It's a real battle around AI. Is America going to lead? Is China going to lead?
Welcome to Direct with John Delaney, sponsored by ForBrite Bank. On this show, we talk about entrepreneurship, leadership, building businesses, public policy, investing, financial services, all the things that we all care about. Today we have a terrific guest, Steve Case, the founder and CEO of America Online, one of the most important technology companies in this country's history. If you made a list of the most iconic, most significant leaders in the history of the technology business in this country, Steve Case would absolutely have to be at the top of that list. But he's done much more than even that. He founded a venture and investment fund called Revolution, which has invested in some terrific companies like DraftKings, Tempest, Cava, the fast casual restaurant many of us enjoy so much. Clear, the company we all see at the airport. Steve's behind all these businesses. He's been active in public policy. He's been an adviser to presidents. He helped pass the Jobs Act, which has been an incredibly important piece of legislation to allow companies to go public more easily. He lives here in Washington. So he kind of exists at the intersection of public policy, investing, and technology. So we're really excited to have my friend Steve Case.
Great to be with you, John.
So you wrote two terrific books, The Rise of the Rest and The Third Wave. But the rise of the rest, you talked about how in many ways America was the most successful and perhaps the first startup ever and you framed it around the 250th anniversary of our country which is obviously coming up this year. We're clearly not a startup any longer and we're going into this next phase and there's a lot happening in business and how it's changing our world. So just give me your perspectives on that.
It's a tough question. I wrote that probably five years ago after spending a number of years traveling around the country, partly doing some of the work around Rise of the Rest and talking about the role of startups and how they create jobs and drive economic growth and things like that. And I realized as I was traveling around that America itself was a startup. It really was 250 years ago just an idea. And like many startups, most people around the world were skeptical that the idea of America would ever survive. And for a while, it looked like they were right. The early years were a little bit chaotic and kind of two steps forward, one step back. But kind of made it through that. And then fast forward 250 years, as a little fragile startup turns into the leader of the pack, the most powerful country, the leading economy. And so part of this is how do we make sure we continue to build on that track record and think about what got us to now and not get kind of cocky or complacent. So part of that writing was to sort of hoping that we all do use this opportunity, this summer with the 250th to take a step back, reflect, celebrate what got us here, acknowledge some of the challenges we face both within this country and around the world and kind of redouble our efforts to continue to be the leader and to make sure the next 250 years are great ones. And so obviously there's a lot to celebrate around this country including the work of innovation and entrepreneurship. That is why we have the leading economy, it wasn't an accident. We just ended up leading the way in the agricultural revolution and then leading the way in the industrial revolution and leading the way in the technology kind of digital revolution. And that's why we are the leading economy and because we have the leading economy, that's the key reason why we're the leader of the free world and such a powerful nation. And I hope as we all come together, and hopefully we will come together, this summer because obviously things are rather fragile and there's a lot of kind of tension and hyper-partisanship. Hopefully we'll be able to come together and be reflective on what got us to now. And as I said, redouble our efforts to make sure that the next chapter of America is a bright one.
Yeah. It's such a good message for our leaders, not only in business, but in politics. What you just said. I mean, I often think people don't put what we've really accomplished here in the proper context or how we've been able to do it. And if you think about the challenges we have today, which you went through a few of them, in the context of the challenges we've overcome historically, in many ways they're not that difficult. If you think about some of the things you talked about, the early years of the country were incredibly challenging. The civil war, the two world wars, the kind of things that the US was able to endure and in many ways show global leadership in our challenges today seem manageable except for what you referenced which is how divided we are. But one of the things I do think we have in common is this notion that the entire country has to prosper. It's something that you've been a leader really by any measure of anyone in the private sector thinking about ensuring economic opportunity is spread all around the country and the thing that's on everyone's mind is obviously the impact of artificial intelligence and you were around and were one of the key architects of the greatest maybe technological innovation any of us have ever seen in our lifetime which was the internet. As the founder and CEO of AOL, you really created the modern internet in terms of how many of us still engage with it. So, how do you think about AI? Because there's people who say it's going to completely change everything. We're going to lose all these jobs. The country's not prepared for it. And other people think of it more in the context of a continuing wave of innovation that will change things but will kind of fold into our day-to-day lives like all innovation has done.
Well, it's a little bit of a mix. I think AI for sure is a transformative technology that already started to have impact and that will accelerate in the coming decades and it will disrupt a lot of things, will destroy a lot of jobs. The question is are we able to use AI and other technologies to reimagine things in terms of how healthcare works or education works or other sectors work to create some new jobs to make up for the jobs that are lost and that's why the role of startups is so important and the role of doing that in a more evenly across the country ways. It's also interesting because you look at the history of AI it first was developed and even talked about nearly 75 years ago. It's not a particularly new technology. It's been developing over decades and there have been a lot of enterprise applications and even consumer applications in the last decade. Most of the apps we all use on our smartphones have AI built in and have for many years. The AI revolution really came with the success really the overnight success about three years ago of ChatGPT which kind of came onto the scene and there was something like 100 million users after the first several months and people say wow this is incredible what these platforms can do. That's led to this accelerated interest, the dramatic acceleration of investment in it and as a result you're seeing the pace of innovation in AI really accelerate and the impact it can have on different sectors in terms of how you operate things in a smarter way. The impact is only now being felt and it's going to take several decades just as it did with the internet for that to roll forward and it'll be a mixed bag just like the internet. There are a lot of great things about the internet that have really kind of changed society, changed the economy in fundamental ways and mostly positive ways but there also been some negatives associated with as well. The same will be true with AI. I think the challenge for all of us whether we're on the entrepreneur side or the investor side or the policymaker side is how do we maximize the benefits of these new technologies, these new platforms like AI and minimize sort of hedge against some of the risk but for sure it's going to be a mixed bag even going back to farming and the agricultural revolution. We now think back and it's remarkable that we went from most of us working on farms to only now one or two percent of us working on farms and that was because of technology making it easier to grow more food in a more productive way with a lot fewer people. That was in some ways kind of a devastating threat to an economy which at the time was essentially an agriculture economy. But as a nation, we're able to make this pivot from farming to factories and retraining people and kind of went from that as I said the agricultural revolution to the industrial revolution, the same dynamic was going to be present with any new technology. It's going to have some impact that's direct, a lot of other impacts that are indirect. Some of the direct ones are more obvious to see, easier to see. Some of the indirect impact take a little longer to see and it's just you've got to be in front of it, you got to make sure that you're leading the charge including going back to sort of the global competitiveness issues. Countries like China are really getting very serious about technology innovation, have led the way in some energy areas like solar, led the way in electric vehicles. It's a real battle around AI. Is America going to lead? Is China going to lead? So America needs to lead but we need to do it in a way that's thoughtful about some of the benefits it can bring, but also some of the challenges and risks associated with it.
I mean, we do have, at least from my perspective, and I'd love your insight of this, we really do have the leading AI companies. We're doing pretty darn well, but is that do you share that perspective?
I mostly share that perspective. I would say that the United States definitely leads in terms of the current leading AI companies that most of them are based in the United States. Interestingly, many of them are our leading tech giants who are just leveraging their platforms to get even bigger. Google, for example, or many other examples. There are some startups that have emerged, OpenAI, Anthropic, some others that have become very significant players fairly quickly. But it's a little bit big tech getting bigger as well as some new entrants emerging. And America has always been stronger in terms of that entrepreneur economy, launching new companies than China, other countries. At the same time if you look at the core technologies if you talk to AI researchers they do think it's a closer battle that some of the things that are happening in China are keeping pace. We're probably ahead a little bit but not that much, maybe it's months not years, certainly not decades. So I think we have continued to be better at the creation of new companies that help commercialize these new technologies but I think it's a closer battle in terms of the core technology that's underlying these platforms which is again we should be optimistic about America's lead and continue to build on that but I think we're in like the bottom of the first inning of the AI battle and right now we're ahead at least by a little bit maybe by a lot but there's a lot of innings to play.
And one of the things that like even at ForBrite we're trying to figure this out as we look to finance some of the AI infrastructure mostly data centers, things like that, the commitments that the big technology companies in the United States have are so extraordinary in terms of forward commitments to purchase capacity in AI infrastructure and data centers. I think everyone's trying to figure out have they gotten ahead of themselves, is there a lot of exposure, even some of these, even for companies with two, three, four trillion dollar market capitalizations which by the way is just hard to imagine that when you ran AOL it was probably the most valuable company in the country and what was its market capitalization, 100 billion?
