“How to prompt AI like a tech millionaire” – Balaji

Key Concepts

• Amplified Intelligence (AI): AI as a tool that enhances existing human intelligence rather than replacing it.
• Prompting: The act of providing specific instructions to AI models to achieve desired outcomes.
• Verifying: The process of validating the output generated by AI models to ensure accuracy and relevance.
• Time-Varying Systems: Systems that change over time, making them difficult for AI to model and predict.
• Types Faster Problems: Problems that can be solved more efficiently by increasing typing speed and computer proficiency.
• Cloud vs. Land: The tension between the digital world (cloud) and the physical world (land) in terms of innovation and regulation.
• Network State: A concept of a sovereign entity built on the internet, with a focus on community, crowdfunding, and eventual diplomatic recognition.
• Fractal Frontier: The idea that the frontier of innovation is not in one specific location but is distributed across various zones and communities.
• Onchain Incorporation: The process of registering a company on a blockchain, enabling greater decentralization and resilience.
• Boomerang Effect: The historical trend of economic power shifting from Eurasia to the West and then back to Eurasia.

AI as Amplified Intelligence

Balaji argues that AI should be viewed as "amplified intelligence" rather than "artificial intelligence." The key bottleneck in AI utilization is prompting and verifying.

• Prompting: The quality of the prompt directly impacts the AI's output. A more specific and detailed prompt, utilizing a richer vocabulary, yields better results. For example, instead of asking AI to "code me a website," a better prompt would specify the framework, database, libraries, and front-end requirements.
• Verifying: Humans are needed to verify AI outputs, especially in complex domains like backend code, smart contracts, and systems programming. AI can make basic errors, such as stating "9.11 is greater than 9.8." While AI excels at visual tasks due to our built-in "hardware" (vision), verifying complex code requires "system two thinking" and a deep understanding of the underlying logic.
• Amplified Gap: AI amplifies existing intelligence gaps. Smart individuals who can effectively prompt and verify AI will achieve significantly more than those who cannot.
• Human Input: Unless AIs can prompt themselves, humans will be needed for a while.

The Enduring Importance of Prompting

Prompting is not a temporary phenomenon and will likely remain crucial for AI interaction.

• High-Dimensional Vector: A prompt is a high-dimensional direction vector that guides the AI "spaceship" to its destination. Even with advanced AI like Neuralink, interesting thoughts and clear direction are still necessary.
• Analogy: Even with a fast spaceship, you still need to specify the coordinates (phi, si, and r) to reach your destination. Similarly, prompts provide the necessary direction for AI to navigate its vast knowledge space.

The Challenge of AI Prompting Itself

It is argued that it will be challenging for AI to prompt itself due to the time-varying nature of the environment.

• Time-Invariant vs. Time-Varying Systems: Time-invariant systems (e.g., chess rules) are easier for AI to model than time-varying systems (e.g., markets, politics).
• Adversarial Time-Varying Systems: In adversarial systems, AI's actions can be countered by other AIs, making it difficult to maintain a consistent strategy.
• Human as Sensor: Humans act as sensors for the environment, distilling complex information into prompts that guide AI. This requires goals, desires, and an understanding of the local context.
• Humanoid Robots: The need for human prompting may persist until the emergence of humanoid robots capable of independent goal-setting and replication.

Types Faster Problems and the Bottleneck of Human Intelligence

Computers have transformed many problems into "types faster problems," where the limiting factor is human typing speed and cognitive ability.

• Shifted Bottleneck: The bottleneck has shifted from computational power to human intelligence and the ability to effectively interact with computers.
• Historical Context: Before computers, complex calculations were performed manually by large teams of people. Computers sped up these calculations, but this did not necessarily lead to a radical advancement in understanding basic physical processes.

Cloud vs. Land and the Need for Synthesis

Peter Thiel's view that the world of bits has improved significantly while the world of atoms has stagnated is discussed.

• Bits vs. Atoms: While progress in computing is undeniable, advancements in basic physical processes are less obvious.
• Synthesis: The key is to use progress in bits to unlock progress in atoms. This involves leveraging the capital and distribution of the cloud to influence regulations and foster innovation in the physical world (e.g., self-driving cars, biotech zones).
• Regulatory Delays: Delays in the rollout of technologies like self-driving cars and nuclear reactors are often due to regulations, resulting in quantifiable losses (e.g., deaths, environmental damage).
• Risk Tolerance: The lack of risk-tolerant zones hinders technological progress. There should be areas where individuals can consciously take risks for the sake of innovation, similar to test pilots or medical pioneers.

The Rise of the East and the Decline of the West

China and India are rapidly advancing in technology and infrastructure, while the West faces challenges related to regulation, debt, and risk aversion.

• Nuclear Energy: China, India, and Russia are building nuclear reactors, while the US is not. Germany shut off all its nuclear reactors.
• India's Potential: India is underpriced on the world stage and has a talented young generation in the digital world.
• Brain Circulation: Immigration from rising countries is not necessarily "brain drain" but "brain circulation," where individuals gain experience abroad and eventually contribute to their home countries.
• Millionaire Migration: The US has seen a decline in net millionaire migration due to factors like high taxes, restrictive visa policies, and political polarization.
• Rerouting of Global Trade: Tariffs and trade restrictions are causing a rerouting of global trade to avoid the US.

The Network State and Startup Societies

Balaji is building a "startup society" called NS in the Singapore Johor Special Economic Zone as a new model for community and innovation.

• NS.com: A physical space with co-working, living, and recreational facilities for technologists and entrepreneurs.
• Internet Community: NS is envisioned as an internet community first, with the potential to evolve into a network state over time.
• Crowdfunding Territory: The long-term goal is to crowdfund territory and establish a special economic zone with favorable regulations.
• Fractal Frontier: The network state is part of a larger trend of distributed innovation across various zones and communities.
• Template for Startup Societies: NS aims to provide a template for other startup societies to emerge globally.
• Long-Term Vision: The network state is a long-term project that requires patience, peaceful collaboration, and a focus on building a strong community.

Onchain Incorporation and Decentralized Governance

The future of companies and governance lies in onchain incorporation and decentralized systems.

• Onchain Data Structure: Companies should be registered as onchain data structures, enabling greater transparency, security, and mobility.
• From Delaware to the Internet: The goal is to move corporate governance from traditional jurisdictions like Delaware to the internet.
• Decentralized Equity Issuance: Onchain equity issuance and stock markets will further decentralize corporate finance.
• Resilience Against Oppression: Onchain companies can easily relocate to other jurisdictions if a government becomes oppressive.
• Digital Judge: Blockchain-based governance systems can provide a fair and transparent alternative to traditional legal systems.

The Boomerang Effect and the Decline of the West

The West is facing a decline in relative living standards due to the rise of Eurasia and internal challenges.

• Historical Reversal: The world economy is shifting back to Eurasia after a period of Western dominance.
• Scapegoating of Tech: The West may scapegoat technology, immigrants, and globalization for its economic woes.
• Dollar Inflation: Money printing by Western governments is devaluing currencies and fueling inflation.
• Illegal Emigration: Western countries may eventually restrict emigration to prevent further economic decline.
• Tactical Withdrawal: Individuals and companies may need to make a "tactical withdrawal" from declining regions to seek opportunities elsewhere.

Conclusion

The conversation highlights the transformative potential of AI, the importance of human intelligence in guiding and verifying AI outputs, and the need for new models of community and governance. The rise of Eurasia and the challenges facing the West necessitate a shift towards decentralized, internet-based systems that empower individuals and foster innovation. The network state is presented as a potential solution, offering a new paradigm for building societies and escaping the limitations of traditional nation-states.