Altman discusses recent talk of a bubble in Silicon Valley valuations:
I’m tired of reading about investors and journalists claiming there’s a bubble in tech. I understand that it’s fun to do and easy press, but it’s boring reading. I also understand that it might scare newer investors away and bring down valuations, but there’s got to be a better way to win than that…Investors that think companies are overpriced are always free not to invest. Eventually, the market will find its clearing price.
He then opens a bet saying that, to win, he must be right on all three counts by Jan 1, 2020: 1) the value of the top six “unicorns” will rise from $100 billion to $200 billion 2) Some mid-stage YC companies will rise in value from $9 billion to $27 billion and 3) the Winter 2015 batch to rise in value from $0 to $3 billion.
This bet is open to the first VC who would like to take it (though it is not clear to me anyone who wants to take the other side should be investing in startups.) The loser donates $100,000 to a charity of the winner’s choice.
Altman warns that superhuman machine intelligence (SMI) is a danger to humans and should be regulated (original blog post here):
The U.S. government, and all other governments, should regulate the development of SMI. In an ideal world, regulation would slow down the bad guys and speed up the good guys — it seems like what happens with the first SMI to be developed will be very important. I think it’s definitely a good thing when the survival of humanity is in question.
Altman wants regulations to have a system for measuring the benefit of use or training of machine intelligence as well as external review of its capabilities:
For example, beyond a certain checkpoint, we could require development [to] happen only on airgapped computers, require that self-improving software require human intervention to move forward on each iteration, require that certain parts of the software be subject to third-party code reviews, etc.
In an op-ed for the Financial Times, Altman describes how Silicon Valley supports startups.
Silicon Valley works because there is such a high density of people working on start-ups and they are inclined to help each other. Other tech hubs have this as well but this is a case of Metcalfe’s law – the utility of a network is proportional to the square of the number of nodes on the network. Silicon Valley has far more nodes in the network than anywhere else.
He also says that Silicon Valley can be replicated elsewhere and is “probably doable with a few thousand people and a reasonable amount of capital.” He says would-be Silicon Valleys should focus on two things: an area where the majority of people care most about start-ups and technology, and on long-term compensation.
A focus on making a lot of money in the long term at the expense of short-term opportunities is essential to building companies that have a huge impact – they take a long time.