Stephen Schwarzman: Going Big in Business, Investing, and AI | Lex Fridman Podcast #96
the following is a conversation with stephen schwartzman ceo and co-founder of blackstone one of the world's leading investment firms with over 530 billion dollars of assets under management he's one of the most successful business leaders in history i recommend his recent book called what it takes that tells stories and lessons from his personal journey stephen is a philanthropist and one of the wealthiest people in the world recently signing the giving pledge thereby committing to give the majority of his wealth to philanthropic causes as an example in 2018 he donated 350 million dollars to mit to help establish its new college of computing the mission of which promotes interdisciplinary big bold research in artificial intelligence for those of you who know me know that mit is near and dear to my heart and always will be it was and is a place where i believe big bold revolutionary ideas have a home and that is what is needed in artificial intelligence research in the coming decades yes there's institutional challenges but also there's power in the passion of individual researchers from undergrad to phd from young scientists to senior faculty i believe the dream to build intelligence systems burns brighter than ever in the halls of mit this conversation was recorded recently but before the outbreak of the pandemic for everyone feeling the burden of this crisis i'm sending love your way stay strong we're in this together this is the artificial intelligence podcast if you enjoy it subscribe on youtube review it with five stars and have a podcast support it on patreon or simply connect with me on twitter at lex friedman spelled f-r-i-d-m-a-n as usual i'll do a few minutes of ads now and never any ads in the middle that can break the flow of the conversation i hope that works for you and doesn't hurt the listening experience quick summary of the ads two sponsors masterclass and expressvpn please consider supporting the podcast by signing up to masterclass masterclass.com lex and getting expressvpn at expressvpn.com lex pod this show is sponsored by masterclass sign up at masterclass.com lex to get a discount and support this podcast when i first heard about masterclass i thought it was too good to be true for 180 a year you get an all-access pass to watch courses from to list some of my favorites chris hadfield on space exploration neil degrasse tyson on scientific thinking communication will wright creator of simcity and sims on game design carlos santana on guitar gary kasparov on chess daniel negrano and poker and many many more chris hadfield explaining how rockets work and the experience of being launched into space alone is worth the money by the way you can watch it on basically any device once again sign up at masterclass.com lex to get a discount and to support this podcast this show is sponsored by expressvpn get it at expressvpn.com lex pod to get a discount and to support this podcast i've been using expressvpn for many years i love it it's easy to use press the big power on button and your privacy is protected and if you like you can make it look like your location is anywhere else in the world i might be in boston now but i can make you look like i'm in new york london paris or anywhere else in the world this has a large number of obvious benefits certainly it allows you to access international versions of streaming websites like the japanese netflix or the uk hulu expressvpn works on any device you can imagine i use it on linux shout out to ubuntu 2004 windows android but it's available everywhere else too once again get it at expressvpn.com lexpod to get a discount and to support this podcast and now here's my conversation with stephen schwartzman let's start with the tough question what idea do you believe whether grounded in data or an intuition that many people you respect disagree with you on well there isn't all that much uh anymore since the world's so transparent uh but uh one of the things i i believe in and put it in the the book what it takes is is if you're going to do something do do something very consequential do something that's quite large uh if you can that's unique uh because if you operate in that kind of space when you're successful it's it's a huge impact uh the prospect of success enables you uh to recruit people uh who want to be part of that and those type of large opportunities are pretty easily described and and so not everybody likes to operate uh at scale some people like to do small things because it uh is is meaningful for them emotionally uh and and so occasionally you get a disagreement uh on that but those are life choices uh rather than commercial choices that's interesting what good and bad comes with going big see we often in america think big is good what's the benefit what's the cost in terms of just bigger than business but life happiness the pursuit of happiness well you do things that make you happy it's not mandated and everybody's different uh and um some people um you know if they have talent like playing pro football uh you know other people just like throwing the ball around uh you know not even being on a team what what's better depends what your objectives are depends what your talent is uh you know it depends um you know what what gives you joy so in terms of going big is it both for impact on the world and because you personally gives you joy well it makes it easier to succeed actually because if you catch something for example that's cyclical that's it's a huge uh opportunity then then you usually can find some place within that huge opportunity where you can make it work uh if if if you're prosecuting a a really small thing and and you're wrong you don't have many places to go so you know i've always found that the easy place to be uh and you know the ability where you can concentrate uh human resources get people excited about doing like really impactful big things and you can afford to pay them actually because the bigger thing can generate much more in the way of uh of financial resources so so that brings people out of talent to help you uh and and so all together it's a virtuous circle uh i think how do you know an opportunity when you see one in terms of the one you want to go big on is it intuition is it facts is it uh back and forth deliberation with people you trust what's the process is it art is it science well it's pattern recognition and how do you get to pattern recognition first you need to understand the patterns and and the changes that are happening and and that's uh that's either uh it's observational on some level you can call it data uh or you can just call it listening to uh unusual things that people are saying that they haven't said before and you know i've always tried to describe this it's like seeing a piece of white lint on a on a black dress but most people disregard that piece of lint they just see the dress i always see the lint uh and and i'm i'm fascinated by how did something get someplace it's not supposed to be so it doesn't even need to be a big discrepancy but if something shouldn't be someplace in in a constellation of facts that that you know sort of made sense in a traditional way i i've learned that if you focus on why some one discordant note is there that's usually a key to something important and if you can find two of those discordant notes that's usually a straight line to some place and that some place is not where you've been and uh usually when you figure out that things are changing or have changed and you describe them which you have to be able to do because it's not uh some odd intuition it's just focusing on facts it's almost like a scientific discovery if you will when you describe it to other people in the real world they tend to do absolutely nothing about it and that's because humans are comfortable in their own reality and if there's no particular reason at that moment to shake them out of their reality they'll stay in it even if they're ultimately completely wrong and i've always been stunned that when i explain where we're going what we're doing and why almost everyone just says that's interesting and they continue doing what they're doing and and so um you know i think it's pretty easy to do that uh you know but what you need is a huge data set so you know before ai and people's focus on data you know i've sort of been doing this mostly my whole life i'm not a scientist i'm not a let alone a computer scientist and you know you can just hear what people are saying when somebody says something or you observe something that simply doesn't make sense that's when you really go to work the rest of it's just processing you know on a quick tangent pattern recognition is a term often used throughout the history of ai that's the goal of artificial intelligence is pattern recognition right but there's i would say various flavors of that so usually pattern recognition refers to the process of the the we said dress and the lint on the dress pattern recognition is very good at identifying the dress as looking at the re the pattern that's always there that's very common and so on you almost refer to a pattern that's like an what's called outlier detection in uh computer science right the the rare thing the the small thing now ai is not often good at that do you just almost philosophically the kind of decisions you made in your life based scientifically almost on data do you think ai in the future will be able to do is it something that could be put down into code or is it still deeply human it's tough for me to say since i don't have domain knowledge in a.i to know everything that could or might occur i i know um sort of in my own case that most people don't see any of that right i i just assumed it was motivational uh you know um but but it's also sort of uh it's hardwiring what what are you wired or programmed uh to be finding uh or looking for it's it's not what happens every day that's not interesting frankly i mean that's what people mostly do i do a bunch of that too because you know that's what you do in normal life but i've always been completely fascinated by the stuff that doesn't fit or the other way of thinking about it it's it's determining what what people want without them saying it uh that that's a that's a different kind of pattern you can see everything they're doing there's a missing piece they don't know what's missing you think it's missing given the other facts you know about them and you you deliver that and then that becomes you know sort of very easy uh to to to sell to them to linger on this point a little bit you've mentioned that in your family when you were growing up nobody raised their voice in anger or otherwise and you said that this allows you to learn to listen and hear some interesting things can you elaborate as you have been on that idea what do you hear about the world if you listen well you you have to listen really intensely to understand uh what people are saying as well as what people are intending because it's not necessarily the same thing and people mostly give themselves away no matter how clever they think they are particularly if you have the full array of inputs in other words if you look at their face you look at their eyes which are the window on the sole it's very difficult to to conceal which what you're thinking uh you look at facial expressions and posture you listen to their voice which changes um you know when it's when you're you're talking about something you're comfortable with or not are you speaking faster is the amplitude of what you're saying higher most people just give away what's really on their mind uh you know they're they're not that clever they're busy spending their time thinking about what they're in the process of saying and and so if you just observe that not in a hostile way but just in an evocative way and just let them talk for a while they'll more or less tell you almost completely what they're thinking even the stuff they don't want you to know and and once you know that of course it's sort of easy to play that kind of game uh because they've already told you everything you need to know and and and so it's easy to get to uh a conclusion if there's meant to be one an area of common interest since you know almost exactly what's on their mind and and so that's an enormous advantage as opposed to just walking in in some place and and somebody telling you something and you believing what they're saying um there are so many different levels of communication so powerful approach to life you discuss in the book on the topic of listening and really hearing people is figuring out what the biggest problem bothering a particular individual group is and coming up with a solution to that problem and presenting them with the solution right in fact you brilliantly describe a lot of simple things that most people just don't do it's kind of obvious find the problem that's bothering somebody deeply and as you said i think you've implied that they will usually tell you what the problem is but can you talk about this process of seeing what the biggest problem for a person is trying to solve it and uh maybe a particularly memorable example yeah sure you know if if if you know you're going to meet somebody there are two two types of situations chance meetings and you know the second is you know you're going to meet somebody so let's take the easiest one which is you know you're going to meet somebody and you you start trying to make pretend you're them it's really easy what's on their mind what are they thinking about in their daily life what are the big problems they're facing so so if they're you know to make it a really easy uh example um you know make pretend you know they're like president of the united states doesn't have to be this president it could be any president so you sort of know what's more or less on their mind because the press keeps reporting it and and you see it on television you hear it uh people discuss it so you know if you're going to be running into somebody in that kind of position you sort of know what they look like already uh you know what they sound like you you you know uh what their voice is like and you know what they're focused on and and so if you're going to meet somebody like that what would you what you should do is take the biggest unresolved issue that they're facing and and come up with uh a few interesting solutions that that that basically haven't been out there uh or that you you haven't heard anybody else i was thinking about so just to give you an example it was sort of in the early 1990s and i was invited to something at the white house which was a big deal for me because i was like you know a person from no place and and you know i had met the president once before uh because it was president bush because his son was in my dormitory so i had met him at parents day i mean it's just like the oddity of things so so i knew i was going to see him because you know that's where the invitation came from and um so so there was something going on and i just thought about you know two or three ways to approach that uh that issue and you know at that point i was uh separated and so i had brought it it brought a date uh to the white house and you know you know and so i saw the president and we sort of went over in a corner for about 10 minutes and discussed whatever this issue was and i i i later you know went back to my data was a little rude but it was meant to be confidential conversation and i barely knew her and um you know she said what were you talking about all that time i said well you know there's something going on in the world and i've thought about different ways of perhaps approaching that and he was interested and the answer is of course he was interested why wouldn't he be interested there didn't seem to be an easy outcome and and so you know conversations of that type once somebody knows you're really thinking about what's good for them uh and good for the situation uh it has nothing to do with with me i mean it's really about being in service uh you know to to to this situation that then people trust you and they'll tell you other things because they know your motives are are basically very pure you're just trying to resolve a difficult situation or help somebody do it so so these types of things you know that's a planned situation that's easy is sometimes you just come upon somebody and they start talking and you know that requires you know like different skills you know uh you can ask them what you've been working on lately what are you thinking about uh you can ask them you know has anything been particularly difficult any any you know you can ask most people if if they trust you for some reason um they'll tell you and then you have to instantly go to work on it and um you know that's that's not as good as having some advanced planning but but you know uh almost everything going on is is like out there and and people who are involved with interesting situations um they're playing in in in in the same ecosystem they just have different roles uh in in the ecosystem uh and um you know you you can do that with somebody who owns a pro football team uh that loses all the time we specialize in those in new york and and you know you you already have analyzed why they're losing right inevitably it's because they don't have a great quarterback they don't have a great coach and they don't have a great general manager who knows how to hire the best talent those are the three reasons why a team fails right because they're salary caps so every team pays the same amount of money for all their players so it's got to be those three positions so if you're talking with somebody like that inevitably even though it's not structured you you'll you'll you'll know how their team's doing and you'll know pretty much why and if you start asking questions about that they're typically very happy to talk about it because they haven't solved that problem in some cases they don't even know that's the problem it's pretty easy to see it so you know i do stuff like that which i find is intuitive as a process but you know leads to really good results well the funny thing is when you're smart for smart people it's hard to escape their own ego and in the space of their own problems which is what's required to think about other people's problems it requires for you to let go of the fact that your your own problems are all important and then to talk about your i think uh while it seems obvious i think quite brilliant it's a difficult leap for many people especially smart people to empathize with truly empathize with the problems of others well i have a competitive advantage which is which is i don't think i'm so smart so good so you know it's not a problem for me well the truly smartest people i know say that exact same thing yeah being humble is uh is really useful competitive advantage as you said uh how do you stay humble well i i haven't changed much um since since since i was um in my mid-teens you know i was raised partly in the city and partly in the suburbs and um and you know whatever the values i had uh at that time uh those are still my values uh i call them like middle class values that's how i was raised um and um i i've never changed why would i that's who i am and and so the accoutrement of of um you know the rest of your life has got to be put on the same you know like solid foundation of who you are because if you start losing who you really are who are you so i've never had the desire to be somebody else i just do other things now that i wouldn't do as a you know sort of as a middle class kid from philadelphia i mean my life has morphed uh on a certain level but part of the strength of having uh integrity of uh personality is is that you can remain in touch with um with with everybody who's comes from that kind of background and and you know even though i do some things that aren't like that you know in terms of people i'd meet or situations i'm in i always look at it through the same lens uh and that's very psychologically uh comfortable uh and doesn't require me to make any real adjustments in my life and i just keep plowing ahead there's a lot of activity in progress in recent years around effective altruism it's i wanted to bring this topic with you because it's an interesting one from your perspective uh you can put it in any kind of terms but it's philanthropy that focuses on maximizing impact how do you see the goal of philanthropy both from a personal motivation perspective and a societal big picture impact perspective yeah i i don't think about philanthropy the way you would expect me to okay i i look at you know sort of solving big issues addressing big issues starting new organizations to do it much like we do in our business you know we keep growing our business not by taking the original thing and making it larger but continually seeing new things and and and building those and and you know sort of marshaling financial resources human resources and and in our case because we're in the investment business we find something new that looks like it's going to be terrific and and we do that and it works out really well all i do in what you would call philanthropy is is look at other opportunities to help society and i end up starting something new marshalling people marshaling a lot of money and and then at the end of that kind of creative process so somebody typically asks me to write a check i i don't wake up and say how can i like give large amounts money away i look at issues that are important for people in some cases i do smaller things because it's important to a person uh and and you know i have you know sort of like i can relate to that person there's some unfairness uh that's happened to them and so uh in situations like that i'd give money anonymously and help them out and you know that that's that's it's it's like a miniature version of addressing something really big so you know at mit um i i've done a big thing uh you know helping to start this new school of computing and and i did that because you know i i saw that that you know there's sort of like a global race on uh in ai quantum and other major technologies and i i thought that um that the u.s could use more enhancement from a competitive perspective and i also because i get to china a lot and i travel around a lot compared to a regular person um you know i i can see the need to have control of these types of technologies so when they're introduced we don't create a mess like we did with the internet uh and with social media uh unintended consequence um you know that's creating all kinds of issues and freedom of speech and the functioning of liberal democracies so with with ai it was pretty clear that there was enormous difference of views around the world by the relatively few practitioners in the world who really knew what was going on and uh by accident i knew a bunch of these people uh you know who were like big famous people uh and i could talk to them and say why do you think this is a force for bad and someone else why do you feel this is a force for good and and how do we move forward with the technology but the same by the same time make sure that whatever is potentially you know sort of on the bad side of this technology with you know for example the disruption of workforces and things like that that could hap happen much faster than the industrial revolution uh what do we do about that and how do we keep that under control so that the really good things about these technologies which will be great things not good things uh are allowed to happen so so to me uh you know this this was one of the great issues uh facing society the number of people who were aware of it were very small i just accidentally got sucked into it and and as soon as i saw it i went oh my god this is mega yeah both on a competitive basis globally uh but but also in terms of protecting uh society and benefiting society so so so that's how i got involved and at the end you know sort of the right thing that we figured out was you know sort of double mit's computer science faculty and and and basically create the first ai enabled uh university in the world uh and you know in effect be an example a beacon to the rest of the research community around the world academically and and and create you know a much more robust uh us uh situation competitive situation among the universities uh because if if mit was going to raise a lot of money and double its faculty well you could bet that you know and a number of other universities were going to do the same thing at the end of it it would be great for knowledge creation you know great for the united states great for the world uh and so i like to do things that i think are really positive things that other people aren't acting on that i i see for whatever the reason first just people i meet and what they say and i can recognize when something really profound is about to happen or needs to and i do it at the end of the day the end of the situation somebody says can you write a a check to help us and then the answer is sure i mean because if i don't the vision won't happen but it's the vision of whatever i do that is compelling and essentially i love that idea of whether it's small to individual level or really big like the the gift to mit to launch the college of computing it's it's it starts with a vision and it you see philanthropy as um the biggest impact you can have is by launching something new especially on an issue that others aren't really addressing and i and i also love the notion and you're absolutely right that there's other universities uh stanford cmu i'm looking at you that would essentially your the seed will will will create other it will have a ripple effect that potentially might help us be a leader or continue to be a leader in ai this potentially very transformative research direction just to linger on that point a little bit what is your hope long term for the impact the college here at mit might have in the next 5 10 even 20 or let's get crazy 30 50 years well it's very difficult to predict the future when you're dealing with knowledge production and creativity um you know mit has obviously um some unique aspects uh you know globally and you know there's four big uh sort of academic surveys um i forget whether it was qs uh there's the times uh in london you know the u.s news and whatever but one of these recently mit was ranked number one in the world yeah right so so leave aside whether you're number three somewhere else in the great sweep of humanity this is pretty amazing yeah right so so you have a really um remarkable aggregation of of human talent uh here and um where it goes uh it's hard to tell you have to be a scientist to have the right feel um but but what's important is you you have a critical mass of people and i i think it breaks into two buckets one is scientific advancement uh and and if the new college can uh help you know sort of either serve as a convening uh force within the university um or or or help sort of coordination and communication among people uh that's a good thing um absolute good thing the second thing is is in the ai ethics area uh which is is is uh in a way equally important because if if the science side creates blowback uh so so that science is is is um you know uh a bit crippled in terms of going forward because society's reaction to to knowledge advancement in this field becomes really hostile that then you've sort of lost the game in terms of scientific progress and innovation and and so the ai ethics piece is super important because you know in a in a perfect world mit would would serve as a global convener because what you need is is you need the research universities you need the companies that are driving ai and quantum work you need governments who will ultimately be regulating certain elements of this uh and you also need the media to be knowledgeable and trained so so we don't get um sort of um overreactions to to one situation which then goes viral uh and it ends up shutting down avenues that are perfectly fine you know to to be walking down or running down that avenue uh but but if enough uh discordant uh information not even correct necessarily uh you know sort of gets um uh you know sort of is pushed around society then you can end up with a really hostile regulatory environment and other things so you have four drivers that that have to be um sort of um integrated uh and and so uh if if the new school of computing uh can be really helpful in that regard uh then that's a real service uh to science and it's a service to mit so so that's that's why i wanted to get involved for both areas and the hope is for me for others for everyone for the world is uh for this particular college of community to be a beacon and a connector for the re for these for these ideas yeah that's right i mean i i think uh mit is perfectly uh positioned uh uh to do that so you've mentioned the media social media the internet as uh this complex network of communication with uh with flaws perhaps perhaps you can speak to them but it you know i personally think that science and technology has its flaws but ultimately is uh one sexy exciting it's the way for us to explore and understand the mysteries of our world and two most perhaps more importantly for some people it's a huge way to a really powerful way to grow the economy to improve the quality of life for everyone so how do we get how do you see uh the media social media the internet as a society having uh you know healthy discourse about science first of all one that's factual and to one that finds science exciting that invests in science that pushes it forward especially in this science fiction fear-filled field of artificial intelligence well i think that's a little above my pay grade because um you know trying to control social media to make it do what you want to do sure appears to be beyond almost anybody's control and and the technology is being used to create what i call the tyranny of the minorities okay a minority is defined as you know two or three people on a street corner it doesn't matter what they look like uh it doesn't matter where they came from they're united by that one issue that they care about and their job is to enforce their views uh on the world and you know uh in the political world people just are manufacturing uh truth uh and and they throw it all over and it affects all of us uh and um you know sometimes people are just hired to to do that i mean it's amazing uh and you think it's one person it's really you know just sort of a front you know for a particular point of view uh and this has become exceptionally disruptive for society and it's dangerous and it's undercutting you know the ability of liberal democracies to function and i don't know how to get a grip on this and i was really surprised um when we um it was up here for the announcement uh last uh spring uh of the college of communi computing and they had all these famous scientists some of whom were involved with the invention [Music] of the internet and almost every one of them got up and said i think i made a mistake uh and as a non-scientist i never thought i'd hear anyone say that and and what they said is more or less to make it simple uh we thought this would be really cool uh inventing the internet we could connect everyone in the world we can move knowledge around it was instantaneous it's a really amazing thing he said i don't know that there was anyone who ever thought about social media coming out of that and the actual consequences for people's lives uh you know so there's always some um some younger person i just saw one of these yesterday he's reported on the national news who killed himself when people use social media to basically you know sort of ridicule him or something of that type this is dead um this is dangerous uh and um you know so so i i don't have a solution for that other than going forward you can't end up with this type of outcome using ai to make this kind of mistake twice is unforgivable so so interestingly at least in the west uh and in parts of china uh people are quite sympathetic uh to to you know sort of the whole concept of ai ethics and what gets introduced when and and cooperation within your own country within your own industry as well as globally to make sure that the technology is a force for good and that really interesting topic since 2007 you've had a relationship with senior leadership with a lot of people in china and an interest in understanding modern china their culture their world much like with russia i'm from russia originally americans are told a very narrow one-sided story about china that i'm sure misses a lot of fascinating complexity both positive and negative what lessons about chinese culture its ideas as a nation as future do you think americans should know about deliberate on think about well it's it's sort of a wide question that you're you're asking about uh you know china is a pretty unusual place you know at first it's it's huge uh you know you got it's physically huge it's got a billion three people and the the character of the people isn't as well understood uh in the united states um chinese um people are amazingly energetic uh if if you're one of a billion three people one of the things you've got to be focused on is how do you make your way uh you know through a crowd uh of a billion 2.99999 other people another word for that is competitive yes they they are individually highly energetic highly focused always looking for some opportunity uh for themselves um because they need to uh because there's an enormous amount of just literally people around and and so you you know what i've found uh is uh they'll try and find a way to win uh for themselves uh and their country is complicated because it it basically doesn't have the same kind of functional laws uh that we do uh in in the united states in the west and and um the country is controlled really uh through a web of relationships you have with other people uh and the relationships that those other people have with other people so it's an incredibly dynamic uh uh culture where if somebody knocks somebody up on the top who's three levels above you and is in effect protecting you then then you know you're you're like a you know sort of a floating molecule there uh you know without tethering uh except the one or two layers above you but that's gonna get affected so it's a very dynamic system and getting people to change is not that easy because if there aren't really functioning laws it's only the relationships that everybody has and so when you decide to make a major change and you sign up for it something is changing in your life there won't necessarily be all the same people on your team uh and that's a very high risk enterprise so when you're dealing with with china it's important to know almost what everybody's relationship is with somebody uh so when you suggest doing something differently you you line up these forces in the west it's usually you talk to a person and they figure out what's good for them uh it's a lot easier and in that sense in a funny way it's easier to make change uh in the west just the opposite of what people think but but once the chinese system adjusts to something that's new everybody's on the team it's hard to change them but once they're changed they are incredibly focused in a way that it's hard for the west to do in a more individualistic culture so so there are all kinds of fascinating things i you know um one thing that might interest uh you know the people who are listening were more technologically based than some other group um that was with one of the top people in the government um a few weeks ago and he was telling me that that every school child in um in china is is going to be taught computer science now imagine 100 of these children this is such a large number of human beings now that doesn't mean that every one of them will be good at computer science but if it's sort of like in the west if it's like math or english everybody's going to take it yes not everybody's great at english they don't write books they don't write poetry and not everybody's good at math you know somebody like myself i sort of evolved to the third grade and i'm still doing flash cards uh you know i didn't make it further in math but imagine everybody in their society is going to be involved with computer science i just even pause on that i i think the computer science involves at the basic beginner level programming and the idea that everybody in the society would have some ability to program a computer is incredible for me it's incredibly exciting and um i think that should give united states pause and uh consider what talking about sort of philanthropy and launching things there's nothing like launching sort of investing in young the youth the education system because that's where everything launches yes well we've got a complicated system because we have over three thousand school districts around the country china doesn't worry about that as a concept they make a decision at the very top of the the government that that's what they want to have happen and that is what will happen and we're really handicapped uh by this distributed you know power uh in the education area although some people involved with that area will think it's uh it's great uh but you know you would know better than i do uh what percent of american children have computer science uh uh exposure my guess no knowledge uh would be five percent or less uh and if we're going to be going into a world where where the other major economic uh power uh sort of like ourselves is is got like a hundred percent and we got five and and the whole computer science area uh is the future um then we're purposely or accidentally actually handicapping ourselves and our system doesn't allow us uh to adjust quickly uh to that so you know the issues like this uh i i find fascinating uh and you know if you're lucky enough to go to other countries uh which i do um and you learn what they're thinking then it informs what what we ought to be doing in in in the united states so the current administration donald trump has released the an executive order on artificial intelligence not sure if you're familiar with it in 2019 uh looking several years ahead how does america sort of we've mentioned in terms of the big impact we hope your in investment in mit will have a ripple effect but from a federal perspective from a government perspective how does america establish with respect to china leadership in the world at the top for research and development in ai yeah i i think that you have to get the federal government in the game in a big way and that this leap forward technologically which is going to happen with or without us you know really should be with us and and it's an opportunity in effect uh for another moonshot uh kind of mobilization uh by the united states uh i think uh the appetite uh actually is there to do that at the moment what's getting in the way is the kind of poisonous politics we have but but if you go below the lack of cooperation which is almost the defining element of american democracy right now in the congress if you talk to individual members they get it and they would like to do something another part of the issue is we're running huge deficits we're running trillion dollar plus deficits so how much money do you need for this initiative where does it come from who's prepared to stand up for it uh because if it if it involves taking away resources from another area our political system is is not real flexible uh to do that uh if you're creating um this kind of initiative um which we need where does the money come from uh and and trying to get money when you've got trillion dollar deficits in a way it could be easy what's the difference of a trillion and a trillion a little more uh but but you know it's it's hard with the mechanisms of congress but what's um what's really important is uh this is not an issue uh that is unknown and it's viewed as a very important issue uh and there's almost no one in the congress when you sit down and explain what's going on who doesn't say we we've got to do something let me ask the impossible question so if you didn't endorse donald trump but after he was elected you have given him advice which which seems to me a great thing to do no matter who the president is to contribute positively contribute to this nation by giving advice and yet you've received a lot of criticism for this so on the previous topic of science and technology and government how do we have a healthy discourse give advice get excited uh conversation with the government about science and technology without it becoming politicized it's very interesting so when i was young before there was a moonshot we had a president named john f kennedy from massachusetts here and in his inaugural address as president uh he has not what your country can do for you uh but what you can do for your country you know we had a generation of people my age basically people who grew up uh with that credo and you know sometimes you don't need to innovate you can go back to basic principles and that's a good basic principle uh what can what can we do um you know americans have gdp per capita of around 60 000 uh you know not every it's not equally distributed but it's big uh and you know people have i think an obligation uh to help their country and i do that and apparently i take some grief for people from some people you know who who who um project on me things i don't even vaguely believe but i'm like quite simple you know i tried to help the previous president president obama he was a good guy and he was a different party and i tried to help president bush and he's a different party and you know i i i i sort of don't care that much uh about what the parties are i care about even though i'm a big donor for the republicans but it's it's what motivates me is what are the problems we're facing and can i help people get to you know sort of a good outcome that'll stand any test uh but we live in a world now where you know sort of the filters uh in the hostility is is so unbelievable uh you know in the 1960s when i went to school in university i went to yale and we had like like so much stuff going on uh we had a war called the vietnam war we had you know sort of black power starting and and uh you know we had a sexual revolution with the birth control pill uh and um you know um there was one other major thing going on and right the drug revolution [Music] there hasn't been a generation that had more stuff going on in a four-year period than my era yet there wasn't this kind of instant hostility if you believed something different everybody lived together and and you know respected uh the other person and and i think that you know this type of change needs to happen and it's got to happen from the leadership of of our major institutions and i i don't think that that leaders can be bullied uh by people who are against you know sort of the classical version of free speech and letting open expression and inquiry that's what universities are for uh among other things uh socratic methods and uh so so i i have um uh in in the midst of this like onslaught uh of oddness uh i i believe in still the basic principles and we're going to have to find a way to get back to that and that doesn't start with the people uh you know sort of in the middle to the bottom who are using you know these kinds of screens to to shout people down and and create an uncooperative environment it's got to be done uh at the top with core principles that are articulated uh and uh ironically um if people don't sign on to these kind of core principles where people are equal and and you know speech can be heard and you know you don't have these enormous shout down biases subtly or or out loud then they don't belong at those institutions they're violating the core principles and and um you know that that's how you end up making change uh and but you have to have courageous people uh who are willing to lay that out for the benefit of not just their institutions but for society uh as a whole so i i i believe that will happen um but it needs the commitment uh of of of senior people to make it happen courage and i think for such great leaders great universities there's a huge hunger for it so i i'm too very optimistic that it will come i'm now personally taking a step into building a startup first time hoping to change the world of course there are thousands maybe more maybe millions of other first-time entrepreneurs like me what advice you've gone through this process you've talked about the suffering the emotional turmoil it all might entail what advice do you have for those people taking that step i i'd say it's a rough ride and you have to be psychologically prepared for things going wrong with frequency you have to be prepared to be put in situations where you're being asked to solve problems you didn't even know those problems existed you know for example renting space it's it's not really a problem unless you've never done it you have no idea what a lease looks like right you don't even know the relevant rent and you know in a market so everything is new everything has to be learned what you realize is that it's good to have other people with you who've had some experience in areas where you don't know what you're doing unfortunately an entrepreneur starting doesn't know much of anything so everything is is something new yeah and um i think it's important not to be alone uh because it's sort of overwhelming uh and you need somebody to talk to uh other than uh a spouse or a loved one uh because even they get bored with your problems uh and and so you know getting a group you know if you look at alibaba um you know jack ma was telling me they went you know they basically were like a financial death store at least twice uh and you know the fact that there it wasn't just jack i mean people think it is because of you know he became the you know the sort of public face and the driver but but a group of people who can give advice share situations to talk about uh that's really important and that's not just referring to the small details like renting space no it's also the psychological yes burden yeah and you know because most entrepreneurs at some point question what they're doing because it's not going so well or they're screwing it up and they don't know how to unscrew it up uh because we're all learning and it's hard to be learning you know when they're like 25 variables going on if you you know if you're missing four big ones you can really make a mess uh and so the ability to to in effect have either an outsider uh who's really smart that you can rely on for certain type of things uh or other people who are working with you on a daily basis um it's most people who haven't had experience believe in the myth of the one person one great person you know makes outcomes uh creates outcomes that are positive most of us it's not like that if you look back over a lot of the big successful tech companies it's not typically one person it you know it's and you will know these stories better than i do uh because it's your world not mine but even i know that almost every one of them had two people i mean if you look at google you know that's what they had and then that was the same with microsoft at the beginning and you know it was the same at apple it you know people have different skills and and they need to play off of uh other people so so um you know the the advice that that i would give you is make sure you understand that so you don't head off in some direction as a lone wolf uh and find that either you can't invent all the solutions um or you make bad decisions on certain types of things this is a team sport entrepreneur means you're alone in effect and that's the myth but it's mostly a myth yeah i think and you talk about this in your book and i could talk to you about it forever the the harshly self-critical aspect to your personality and uh to mine as well in the face of failure it's a powerful tool but it's also a burden that's that's very interesting uh very interesting to uh walk that line but let me ask on the in terms of people around you in terms of friends in in the bigger picture of your own life where do you put the value of love family friendship in the big picture journey of your life well ultimately all journeys are alone um it's great to have support um and you know um when you you you go forward and say your job is to make something work and that's your number one priority um and you're going to work at it to make it work you know it's like super human effort people don't come become successful as part-time workers it doesn't work that way and if you're prepared to make that 100 to 120 uh effort you're gonna you're gonna need support and and you're gonna have to people involved with your life who understand that that's really part of your life uh sometimes you you're involved with somebody and you know they don't really understand that and that's a source of you know sort of conflict and difficulty but if you if you're involved with the right people uh you know whether it's a sort of dating relationship or you know sort of you know spousal relationship um you know you you have to involve them uh in your life uh but not burden them with with every you know sort of minor triumph or mistake they they actually get bored with it after a while and and so you have to set up different types of ecosystems you have your home life you have your love life you have children and and that's like the enduring part of what you do and then on the other side you've got the you know sort of unpredictable nature uh of um of of of this type of work what i say to people at my firm who are younger usually um well everybody's younger but but um you know people who are of an age where you know they they're just having their first child uh or maybe they have two children that it's important um to to make sure they go away uh with their spouse uh uh at least once every two months it's just some lovely place where they're no children no issues uh sometimes once a month if if they're you know sort of energetic and clever uh and that um escape the craziness of it all yeah and and reaffirm uh your your values as a couple uh and you have to have fun if you don't have fun with the person you're with and all you're doing is dealing with issues then then that gets pretty old and so you have to protect the fun element of your life together and the way to do that isn't by hanging around the house and and dealing with you know sort of more problems you have to get away and and reinforce and reinvigorate uh your relationship and whenever i tell one of our younger people about that they sort of look at me and it's like the scales are falling off of their eyes and they're saying geez you know i hadn't thought about that you know i'm so enmeshed in all these things but that's a great idea and that's something as an entrepreneur you also have to do you just can't let relationships slip because you're half overwhelmed beautifully put and i think there's no better place to end it steve thank you so much i really appreciate it it was an honor to talk to you my pleasure thanks for listening to this conversation with stephen schwartzman and thank you to our sponsors expressvpn and masterclass please consider supporting the podcast by signing up to masterclass at masterclass.com lex and getting expressvpn at expressvpn.com lexpod if you enjoy this podcast subscribe on youtube review it with five stars in apple podcast support it on patreon or simply connect with me on twitter at lex friedman and now let me leave you with some words from steven schwartzman's book what it takes it's as hard to start and run a small business as it is to start a big one you will suffer the same toll financially and psychologically as you bludgeon it into existence it's hard to raise the money and to find the right people so if you're going to dedicate your life to a business which is the only way it will ever work you should choose one with the potential to be huge thank you for listening and hope to see you next time