Billionaire Steve Case On How The AI Boom Mimics The Dot-Com Boom

you have better side I know great we'll Center ourselves thanks Steve thanks for coming great to be here a lot of energy a lot of excitement it is there's a lot of energy speaking of energy before we get into it I I I have a personal question every time we hang out you like look younger you're like the Benjamin Button of tech here how what what is what is the secret to that and then we'll get into we we heard some life science talks earlier but I want I want the secret from The Source I'm flattered that you say that maybe it's cuz I'm hanging out with you with a lot of young people a lot of smart entrepreneurs that are inspiring me about the future yeah the energy the energy is Big here all right so I app again I appreciate you coming and when I reached out there was a purpose to it because it feels like we're at this moment here where AI has gone from a concept to now it's actualizing and you were so key you know and everyone talks about AI it's the biggest thing maybe even bigger than the internet the last time we had this incredible shift in how everybody did everything was the internet and you know you were you know one of the key key people you know you had Tim burners Lee and he you know developed the worldwide web and then you had people like Mark andreson with the Mosaic browser and then really it was AOL and in your company that brought you know tens of millions of people popularized um the internet I mean how many how many CD ROMs did you guys send out back in the day a lot sorry about that and everybody over 40 is like yeah I got about eight of those everybody who's under 30 here is like what a CD run yeah but uh there were a lot a if you were around uh in the in the 9s it was AOL really that was bringing you onto the internet so with that perspective what do you see first question would be what do you see as the similarities and differences right now about this moment here and when kind of that mid 90s latest you know mid to late 90s where you really saw everything go nuts with the internet well I think one similarity is uh it's been developing the technology in this case AI or the internet uh for decades and then hit a acceleration you know point so you know 75 years of investment including here at MIT around AI it's really the last 18 months where things have really accelerated because obviously the overnight success of chat GPT which was 75 in years in in the making and that really created momentum and excitement with entrepreneurs and investors and the general public and attention from was yesterday with meeting with some senators in the in in DC around what to do around AI policy and so forth so it went from you know developing in an interesting way but not really captivating you the moment not really you know kind of capturing the the zeist and suddenly it took over the same thing was true with a we started 1985 at the time only 3% of people were online and those 3% were online about an hour a week and for a decade from 85 to 95 I'd go to conferences like this and nobody cared about the internet they're talking about semiconductors personal computers you know software there's a few of us kind of fringy on the side you're talking about you know the internet most people didn't think the internet ever would be a mainstream phenomenon more like a hacker and computer Enthusiast kind of thing and then in 95 with Netscape IPO and some other thing it sort of accelerated and then became sort of a little bit of a Mania you could tell that because companies would rename themselves something.com just as now companies are renaming themselves something you know AI uh to be part of that that we're us steel. a we're a new company so but but at the same time there there is tremendous excitement people do recognize the absolute uh you potential of the technology how it can transform business transform Society improve health care all the things that you're all aware of uh but they also is a a concern a fear about some of the unintended consequences in the case the internet because it grew so slowly there was sort of a sense of let's kind of a light touch of Regulation let's kind of kind of leave it alone here there's a sense that it needs more than that not too much because there's obviously a concern if you have too much regulation it ciples Innovation but nothing is is not likely to be the you the case whether it be in this country or other country so it just shows you it's it's arrived it's it's hit it's hit it's moment nobody knows exactly what's going to happen it reminds me of a song that most people in this room are too young to know a Buffalo Springfield song uh you know something's happening here what it is is not exactly clear and that you people are trying to to figure it out and try to maximize the benefits uh while also kind of hedging minimizing some of the potential risks makes sense what year what was the year that you saw the Tipping Point with AOL it was It was 95 we went from two two statistics I remember I mentioned the initial you know usage when we got started uh the other was we raised $1 million to get started1 million in 1985 and then in and we went public in 1992 the first internet company to go public and in our IPO we raised $10 million uh and the market value that day was $70 million and then 5 years later was $160 billion so we'd been at it for a while it was still growing slowly and suddenly it really accelerated the other data point is it took us n years to go from zero to 1 million subscribers and a couple years later we're adding a 1 million subscribers every month and so it was a it was a classic hockey stick that Venture capitalists never believe appropriately because it almost never happens but in that case it really it really did happen so based on that experience where when do you think we'll see that high are we there now is it 18 months from now 12 months like again you're you're looking a lot of startup so you're obviously your both your history and your field Vision here when do you think we're going to see that mass uh kind of acceptance of acceleration well I think we're seeing the massive interest in acceleration and and the creation of new companies and a lot more Venture Capital going into the into the sector so that is you know bodess well for what's going to happen in this next next phase but what these things typically follow and maybe this a little different but typically including with the internet there's this initial phase of people are working hard on it but nobody's really paying attention then it moves into a phase where everybody's paying attention it's a little bit too much hype a little bit too much Mania then it moves into a phase where it's kind of like a correction a little bit disappointment 2000 for example a lot oft companies went public a lot of them men going going bankrupt and it was sort of this viewed as this this this internet nuclear winter and you know the ones that survived then were able to accelerate the Googles the Facebooks Etc and really become kind of you know significant iconic iconic companies so we clearly moved from that first phase where people were working hard on Research here at MIT and other places uh but it wasn't really getting significant Traction in the in the marketplace and now we're in that phase where there is a lot of uh attenion and and hopefully we'll figure out a way to move to the next phase in a way that is not quite as disruptive as it was with you know the side where where like 90% of the companies you know kind of went ended up going bankrupt one maybe one major difference who here is kind of a startup entrepreneur doing their own thing okay about half how many are how many are working for like uh a Google Microsoft one of the big one of the big guys all right so we got the entrepreneur St this is your room these are people small Tech not big Tech that's right so small Tech versus big Tech it's a great point which is that maybe one difference though between kind of the the you know the 1990s and the internet and today is that because of large language models obviously it's a it's more of a top down you need massive scale and size and money to start developing it where you were able to kind of ground up and now there's a lot of top down so how do we make sure that it's not just a three-player field and that you know you know you've been one of the great evangels for the reason things work and the way we're stay ahead is because of the entrepreneurs not because of the a big Tech but this definitely there's a risk that this becomes a big Tech play no there's a big risk of it and and I do worry that uh AI because of sort of the as you said the sort of the table stakes and the need for data and so forth you know could result in big Tech getting bigger and you've seen that in the market you know there's some companies that have increased a trillion dollars in market cap in the last couple years based on the presumption they're going to dominate this next wave in ter terms of internet and these are great companies and they're important companies particularly in a what's now a global battle with China and others around the you know the the the future but we can't let this just be around you know the big you know getting bigger we need to make sure the playing fields level so entrepreneurs with less capital and also in places outside of Boston or outside of you know San Francisco or you know you all around the country have the opportunity to you know to participate as well and that is one of the things that I've been pushing hard for including in Washington I testified at the the last Senate AI Summit and my main message was was this which is we need to make sure that that as you think about guard rails you think about rules of the road you air on the side of allowing new companies to start and scale and don't do things that end up entrenching some of the incumbents regulatory capture issues and one key part of that is there's a big debate now in in Washington Brussels other places about open source and and there is a concern which is understandable that open source results in La losing control over the technology and some bad things National Security risk other things could happen and that is a fair concern but we have to have open source if we're going to make sure that this really is an open platform a Level Playing Field and new companies including some of those hopefully in this in this room are able to you know launch and scale and become the next go and the lesson going back to the internet was when we got started the only reason America dominated the internet is because the Defense Agency a government agency DARPA funded the creation of the internet to create essentially a network that would withstand a nuclear attack number one number two a Judicial decision was to break up M Bell the dominant the only Monopoly phone company to create seven Regional Bell companies that Unleashed competition and that's why the cost of being on the internet went from $10 an hour to nothing because of that you know competition so that was a key decision another key decision was to essentially commercialize the internet when we started in ' 85 it was still illegal for consumers or businesses to be on the internet it was for educational institutions like MIT or government agencies not for consumers or businesses Congress passed the Telecom B to Bill to commercialize the internet and the final one and the one most important relative to this conversation is the FCC mandated Open Access so they said we're not going to just create all these different phone companies we're going to require that those phone companies allow others like AOL to run on their networks and if that hadn't happen the cost wouldn't have come down the The Innovation wouldn't have accelerated and certainly companies like ours wouldn't have existed I don't think America would have you know led the chart so how do we take some of those lessons forward here with AI and make sure it is open and and new companies can emerge and it's not just the you know big Tech getting bigger well you know and again that took uh that took Washington to bust up at& what what so what's the prescriptive solution to make sure that we have many you know our box and we have the ability to start you know for companies to start versus three companies it's why I made an event like this having 2,000 people at an event most of whom are entrepreneurs trying to imagine a future not just people representing the you larger companies you know we we've got to lean into that and be backing this next generation of entrepreneurs in terms of antitrust it's a bigger you know kind of conversation and and it is being considered now with the FTC and other being much more aggressive on antitrust issues it is going to be harder it already is harder for big companies to buy other big companies there's more more scrutiny so that's slowing some of that which is not all bad you know there's at the same time we don't want to move too far in that direction where it ends up kind of stifling uh some potential Innovation stifling a path for for you know young companies in some cases should be acquired by the the larger companies so we don't want to go too far in that direction but I do think we need to air on the side of making sure AI is open to all air on the side of making sure the leaders in AI 20 years from now are new companies new entrepreneurs that didn't ex you know didn't exist uh just as with the the leaders of of the internet to companies that did not exist it was not AT&T that that dominated that it was not IBM that dominated IBM spent a billion dollars with IBM Sears and CB to launch a online Venture 25 years ago called Prodigy a billion dollars ended up you know kind of failing our little company with $1 million ended up you know kind of emerging but then we got challenged by other companies and we kind of lost our way and new companies emerged that's the Arc of innovation that's the Arc of the American you know story right that's right well you also mentioned before the idea that we need to make sure that they entrepreneurs all everywhere uh that are empowered to do this you know I don't know if anybody SE you know Steve has this movement rise of the rest I don't if anybody's ever been on seen the rise of the rest tour Steve travels around and has traveled around over the years in a in an RV and he pulls into towns like Cincinnati or you know to or wherever and yeah go Cincy and um and he and it's like Drake getting on concert tour where he comes out and all the not quite that but and the van pulls up and the fans are there it might be dozens or hundreds versus tens of thousands but the entrepreneurs in these cities feel seen and you know we I you know I've been hearing a lot even walking around today about the necessity to make sure that AI is inclusive and that's absolutely right but there needs to be Geographic inclus right the issue there we launched R the rest 10 years ago actually in Detroit a city that we then did Forbes 30 under 30 conferences for for a number of years and we'll be going back to celebrate that in in a couple of months and Pittsburgh and others which are the cities by the way 100 years ago were the Silicon Valley the time you know Detroit Detroit was the most Innovative city in America fastest growing city in America fifth largest you city in America every be one to be car the car Revolution Pittsburgh was powering the steel you industry and the Industrial Revolution you was really rocking and rolling and so these these cities had great histories but we there was some risk about not having great Futures and the progress in the last decade has been great there's 1400 new rent Venture firms in these rise of the rest cities we through our own rise of rest seed fund have made 200 investments in 100 different you know cities and some of them one of them actually company called prion in North Carolina eigor the founder will be speaking in a a session one of the next sessions he was the original founder of the technology Amazon acquired to create Alexa and he's in North Carolina building you know pry we backed company called Tempest in Chicago now it's 2,000 employees focused on using AI initially on oncology so there can be a better diagnosis a more precise uh intervention we fended a company in Baltimore called cataly using AI to identify potential people have that has shifted some people that were truck TR drivers to now being you know you know coders uh so we're seeing this happening you know all over place there's one company in Atlanta building a Mach 5 engine to go from Atlanta to Europe in in 90 minutes and some of that is the core technology around the the engines but they're also using Ai and a plan with the military to do a essentially an uncrewed uh Mission you know later this year that company is in Atlanta and so how do we make sure that as AI moves forward it is open to all it's not just the big getting bigger but it also isn't just Valley Boston New York which have dominated the last couple of years continuing to dominate because 75% of enture cap for the last decade has gone to California New York and Massachusetts we have to level the playing field and if we don't this country which some of you I'm sure are concerned is I'm concerned about the hyper partisanship tribalism some of that not all of it some of that is a lot of people in a lot of parts of the country feel left out by the technology Revolution they feel unheard they feel that the Innovations happening in places like Cambridge are ending up creating job loss in their community and we're not offsetting that by launching new companies that can create jobs for those communities that they're mad and that's playing out in politics and the biggest risk to America I think is in an internal risk China is a competitive risk but an internal risk of the dysfunction and the hyperarithmetical morning and think oh this is all possible most people in most parts of the country trust me I've been there i' I've seen this do not have that enthusiasm do not have that optimism and we have to create more jobs for more people and more places and startups create most of the jobs it's not small business it's not big business it's new business companies under five years old so we've got to do that if we're going to have a United Country as well as doing that if we're going to win and continue to be the most Innovative entrepreneur nation in the world which is a risk given what's happening globally we've got to do that in a more inclusive way that's right how do we how do we it's a catch 22 because the money goes to where the talent is the talent goes to where the money is and there's a this you know perception may you know a lot of it's true a lot of it's not you know that silicon Valley's got a majority of AI Talent Boston's got the you know a smaller but decent percentage and some in New York but really you know those are the markets so how do we how do we get Sol the talent issue in places like Detroit or Pittsburgh or Atlanta well first of all that the talent has always been there you know if you go to celic Valley actually speaking at a conference it wasn't for it was Tech techr conference five or six years ago there were I know two or three thousand people in the room I asked for a show hands how many people grew up in the Bay Area and it was like 5% everybody in Silicon Valley is from someplace else they go there because that is the land of opportunity because the capital other people there an ecosystem supporting risk-taking and and so forth but they grew up in other parts of the country they went to school in other part parts of the country and some of our best universities MIT is wonderful Carnegie melon and Pittsburgh is wonderful Michigan and an arbor is wonderful Ohio State and Columbus is wonderful Georgia Tech and Atlanta is is wonderful but when they've graduated historically it's started to change in the last decade historically they've left those places to go to the coast because that's where the action was that's where the the money was and so if we reverse that and people have the flexibility to build companies wherever they choose to build companies and the pandemic has been a little bit helpful there in terms of freeing up some flexibility around how people work and where they work and and so forth and we merge that with or blend that with capital so people can you know Access Capital get started that creates opportunity in those places the last point is right now the focus tends to be on the horizontal platform AI applications which obviously is really important the real action is when AI meets the real world and AI basically is gets integrated into the core industries of our country healthc care and and food and Agriculture and so forth uh and that's when being in other places may be advantaged because most of the companies you need to partner with are in those other places MD Anderson in Texas Mayo Clinic and in in and Minnesota you know Johns Hopkins and Maryland those are super important you know institutions to partner with if you're trying to reimagine you know disrupt the the healthcare uh sector so it will Advantage people that are close to it it'll Advantage people that have some credibility with those institutions so they can build trust and establish Partnerships and I think Partnerships and policy will be much more important in this next wave of innovation next 20 years and it has been in the in the last 20 years I think I I think you make great points there I we we had the Forbes under 30 Summit in Boston for 3 years and that was about six seven years ago and I remember coming here and I had a lot of meetings with mayor you know Marty Walsh the mayor and and and and Charlie Baker the governor massachusett about what this could this event could do we have 5 to 10,000 young entrepreneurs at that event and it it struck me that the thing that was Haunting them and the reason they were very keen to have this and it boiled down the one word which was Facebook yeah and the reason it was Facebook is cuz Facebook was founded here founded about 2 miles away from here but yet they felt like they even in Boston they felt like they had to go to San Francisco because of the quote unquote talent and imagine how much different Boston will in Boston's doing great but imagine how much different it would look if Facebook was still based in Boston so the secret is right in Atlanta right Georgia Tech you know the every school you mention is amazing how do you send the message to the local launch MERS coming out of the schools or surround those schools so they could stay home where they're comfortable where they like it and and tap is the talent like Georgia Tech has a great program so hermas is attracting dozens and dozens of people out of Georgia Tech and so that it's a competitive Advantage for them and if they were just moved to you know San Francisco that the battle for talent is is is more is more intense so I think there are some strategic Advantage some cost of living Advantage but you have to have the mentor Capital there you have to have keep the talent there the slow The Brain Drain of people leaving create a boomerang of people uh returning and you have to create ecosystem that is around risk-taking as you all know it's it's hard it's challenging it's risky to start a company and and being in a community where which recognize that and supports that which is one of the great things about Silicon Valley or one of the great things about you know you know Cambridge how do we create those communities in more parts of the other country very important you I want to touch upon what you just mentioned about hyper partisanship again your experience is so valuable here because I you know I got on I got on the internet with AOL myself and it was an amazing tool because all of a sudden I was reconnecting with all my grade school friends that I i' never you know I we lost we started email CH you know it was it just this mindblowing experience but what it also Unleashed it that a lot of the hyperarch is a you know after you know the first few years were super friendly but then you know a lot of the internet obviously became you know weaponized in terms of putting everyone into factions how do we base on that experience not let AI accelerate that exponential now that is the core question I'm super proud of the obviously the role internet's played in our lives and how transformative it's been how empowering it's been and it's more so than I would have expected in my wildest uh you know imagination that said I also recognize there have been some unintended consequences that are unfortunate and disappointing and and and what's happening with the weaponization of social media is a is a good example of that you know I always thought that one of the great things about the internet is everybody could have a voice and it wasn't just the newspapers and magazines and the TV networks with a small number of people with megaphones everybody could have a megaphone and that has proven to be true where people have you know blogs and and and can you know you know figure out ways to share their ideas with with people but with that came this tribalism people generally are following people that are like them generally watching television networks that that you know kind reinforce their views they're not really getting exposed to other views and and sort of the other side which has created more of this this tribalism as result there issues around you know privacy issues around safety for your kids issues around mental health related to particularly social media this is a real concern not just here in this country but around the world and so there is a backlash against social media there is a backlash against the internet there's a backlash against big Tech there's a backlash against you know Silicon Valley that that's happening because people see the benefits but also recognize their risk and don't think the companies that are taking the lead right now are responsible enough and trying to maximize the benefits and and minimize the risk which is why there's more of a focus on make making sure we get I right and don't just let the market figure it out we need some kind of policies which I understand with the motivation at the same time I worry that it could overreach what's happening right now in Europe what's proposed is an overreach that likely will stiple innovation in Europe but doing nothing is not an answer and each of you as you think about your companies need to make sure you're engaged in this discussion you're helping to forge the right policy so we can maximize the good things minimize the bad things basically regulations are an attempt to keep bad things from happening how do we also make sure we are enabling good things to happen and that really is by putting things in the hands of of entrepreneurs including people in this room so as you're building your companies if you do emerge as the the next goool or the next you know big company recognize that there a lot of benefits to come with that but you also shoulder a lot of responsibilities to help get this right so you know our society is it really does benefit uh and there's not some benefits and then also a lot of negatives get no pressure guys uh that's a great way to end I you know it's kind of like when you're giving the Oscar speech and they start playing the music when when John's when John's on stage he's like the but uh but we really appreciate your time and your wisdom and I I hope you're going to stick around for a little bit because we've got you know I Steve's one of the great proponents of entrepreneurs and this is a building today full of entrepreneurs so you know I think that's why I'm here thank you Rand than you John thank you all thank [Applause] you e

Channel: Forbes

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Keywords: Forbes, Forbes Media, Forbes Magazine, Forbes Digital, Business, Finance, Entrepreneurship, Technology, Investing, Personal Finance, Steve CAse, AI, AOL, AOL AI, The AI Boom, The Dto-com Boom, Dot-Com Bubble, How we use AI, Randal Lane, how we should use AI, lessons from AI entrepreneurs, AI Entrepreneurs

Id: uR6Wza9bS_o

Length: 25min 19sec (1519 seconds)

Published: Thu May 02 2024