Stephen Schwarzman: Going Big in Business, Investing, and AI
政治与社会技术与编程音乐与艺术心理与人性历史与文明
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The following is a conversation with Stephen Schwarzman,
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CEO and cofounder of Blackstone,
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one of the world's leading investment firms
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with over $530 billion of assets under management.
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He's one of the most successful business leaders in history.
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I recommend his recent book called What It Takes
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that tells stories and lessons from his personal journey.
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Stephen is a philanthropist
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and one of the wealthiest people in the world,
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recently signing the Giving Pledge,
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thereby committing to give the majority of his wealth
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to philanthropic causes.
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As an example, in 2018, he donated $350 million to MIT
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to help establish his new College of Computing,
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the mission of which promotes interdisciplinary, big,
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bold research in artificial intelligence.
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For those of you who know me,
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know that MIT is near and dear to my heart
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and always will be.
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It was and is a place where I believe big, bold,
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revolutionary ideas have a home,
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and that is what is needed
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in artificial intelligence research in the coming decades.
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Yes, there's institutional challenges,
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but also there's power
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in the passion of individual researchers,
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from undergrad to PhD,
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from young scientists to senior faculty.
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I believe the dream to build intelligence systems
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burns brighter than ever in the halls of MIT.
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This conversation was recorded recently,
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but before the outbreak of the pandemic.
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For everyone feeling the burden of this crisis,
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I'm sending love your way.
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Stay strong, we're in this together.
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This is the Artificial Intelligence Podcast.
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If you enjoy it, subscribe on YouTube,
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review it with five stars on Apple Podcast,
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support it on Patreon,
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or simply connect with me on Twitter at Lex Friedman,
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spelled F R I D M A N.
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As usual, I'll do a few minutes of ads now,
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and never any ads in the middle
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that can break the flow of the conversation.
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I hope that works for you,
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and doesn't hurt the listening experience.
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Quick summary of the ads.
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Two sponsors, Masterclass and ExpressVPN.
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Please consider supporting the podcast
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by signing up to Masterclass at masterclass.com slash lex,
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and getting ExpressVPN at expressvpn.com slash lexpod.
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This show is sponsored by Masterclass.
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Sign up at masterclass.com slash lex
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to get a discount and support this podcast.
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When I first heard about Masterclass,
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I thought it was too good to be true.
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For $180 a year, you get an all access pass
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to watch courses from, to list some of my favorites,
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Chris Hadfield on Space Exploration,
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Neil deGrasse Tyson on Scientific Thinking and Communication,
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Will Wright, creator of SimCity and Sims on game design,
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Carlos Santana on guitar, Gary Kasparov on chess,
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By the way, you can watch it on basically any device.
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Once again, sign up at masterclass.com slash lex
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to get a discount and to support this podcast.
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This show is sponsored by ExpressVPN.
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Get it at expressvpn.com slash lex pod
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to get a discount and to support this podcast.
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I've been using ExpressVPN for many years.
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I love it.
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It's easy to use, press the big power on button,
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like your location is anywhere else in the world.
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I might be in Boston now, but it can make you look like
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I'm in New York, London, Paris,
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or anywhere else in the world.
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This has a large number of obvious benefits.
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Certainly, it allows you to access international versions
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of streaming websites like the Japanese Netflix
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or the UK Hulu.
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ExpressVPN works on any device you can imagine.
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I use it on Linux, shout out to Ubuntu 2004,
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Windows, Android, but it's available everywhere else too.
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Once again, get it at expressvpn.com slash lex pod
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to get a discount and to support this podcast.
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And now, here's my conversation with Stephen Schwarzman.
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Let's start with a tough question.
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What idea do you believe,
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whether grounded in data or in intuition,
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that many people you respect disagree with you on?
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Well, there isn't all that much anymore
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since the world's so transparent.
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But one of the things I believe in and put it in the book,
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the book, what it takes is if you're gonna do something,
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do something very consequential.
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Do something that's quite large, if you can, that's unique.
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Because if you operate in that kind of space,
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when you're successful, it's a huge impact.
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The prospect of success enables you to recruit people
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who wanna be part of that.
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And those type of large opportunities
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are pretty easily described.
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And so, not everybody likes to operate at scale.
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Some people like to do small things
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because it is meaningful for them emotionally.
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And so, occasionally, you get a disagreement on that.
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But those are life choices rather than commercial choices.
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That's interesting.
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What good and bad comes with going big?
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We often, in America, think big is good.
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What's the benefit, what's the cost
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in terms of just bigger than business,
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but life, happiness, the pursuit of happiness?
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Well, you do things that make you happy.
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It's not mandated.
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And everybody's different.
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And some people, if they have talent,
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like playing pro football,
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other people just like throwing the ball around,
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not even being on a team.
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What's better?
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Depends what your objectives are.
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Depends what your talent is.
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Depends what gives you joy.
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So, in terms of going big,
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is it both for impact on the world
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and because you personally gives you joy?
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Well, it makes it easier to succeed, actually.
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Because if you catch something, for example,
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that's cyclical, that's a huge opportunity,
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then you usually can find some place
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within that huge opportunity where you can make it work.
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If you're prosecuting a really small thing
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and you're wrong, you don't have many places to go.
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So, I've always found that the easy place to be
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and the ability where you can concentrate human resources,
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get people excited about doing really impactful big things,
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and you can afford to pay them, actually.
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Because the bigger thing can generate much more
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in the way of financial resources.
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So, that brings people out of talent to help you.
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And so, all together, it's a virtuous circle, I think.
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How do you know an opportunity when you see one
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in terms of the one you wanna go big on?
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Is it intuition, is it facts?
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Is it back and forth deliberation with people you trust?
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What's the process?
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Is it art, is it science?
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Well, it's pattern recognition.
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And how do you get to pattern recognition?
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First, you need to understand the patterns
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and the changes that are happening.
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And that's either, it's observational on some level.
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You can call it data or you can just call it listening
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to unusual things that people are saying
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that they haven't said before.
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And I've always tried to describe this.
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It's like seeing a piece of white lint on a black dress.
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But most people disregard that piece of lint.
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They just see the dress.
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I always see the lint.
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And I'm fascinated by how did something get someplace
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it's not supposed to be?
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So, it doesn't even need to be a big discrepancy.
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But if something shouldn't be someplace
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in a constellation of facts that sort of made sense
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in a traditional way, I've learned that if you focus
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on why one discordant note is there,
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that's usually a key to something important.
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And if you can find two of those discordant notes,
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that's usually a straight line to someplace.
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And that someplace is not where you've been.
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And usually when you figure out that things are changing
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or have changed and you describe them,
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which you have to be able to do
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because it's not some odd intuition.
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It's just focusing on facts.
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It's almost like a scientific discovery, if you will.
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When you describe it to other people in the real world,
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they tend to do absolutely nothing about it.
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And that's because humans are comfortable
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in their own reality.
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And if there's no particular reason at that moment
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to shake them out of their reality,
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they'll stay in it even if they're ultimately
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completely wrong.
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And I've always been stunned that when I explain
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where we're going, what we're doing and why,
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almost everyone just says, that's interesting.
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And they continue doing what they're doing.
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And so I think it's pretty easy to do that.
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But what you need is a huge data set.
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So before AI and people's focus on data,
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I've sort of been doing this mostly my whole life.
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I'm not a scientist, I'm not let alone a computer scientist.
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And you can just hear what people are saying
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when somebody says something or you observe something
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that simply doesn't make sense.
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That's when you really go to work.
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The rest of it's just processing.
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You know, on a quick tangent,
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pattern recognition is a term often used
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throughout the history of AI.
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That's the goal of artificial intelligence
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is pattern recognition, right?
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But there's, I would say, various flavors of that.
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So usually pattern recognition refers to the process
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of the, we said dress and the lint on the dress.
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Pattern recognition is very good at identifying the dress
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as looking at the pattern that's always there,
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that's very common and so on.
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You almost refer to a pattern that's like
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in what's called outlier detection in computer science,
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right, the rare thing, the small thing.
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Now, AI is not often good at that.
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Do you, just almost philosophically,
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the kind of decisions you made in your life
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based scientifically almost on data,
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do you think AI in the future will be able to do?
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Is it something that could be put down into code
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or is it still deeply human?
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It's tough for me to say since I don't have domain knowledge
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in AI to know everything that could or might occur.
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I know, sort of in my own case,
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that most people don't see any of that.
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I just assumed it was motivational, you know,
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but it's also sort of, it's hardwiring.
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What are you wired or programmed to be finding or looking for?
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It's not what happens every day.
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That's not interesting, frankly.
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I mean, that's what people mostly do.
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I do a bunch of that too because, you know,
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that's what you do in normal life.
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But I've always been completely fascinated
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by the stuff that doesn't fit.
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Or the other way of thinking about it,
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it's determining what people want
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without them saying it.
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That's a different kind of pattern.
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You can see everything they're doing.
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There's a missing piece.
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They don't know it's missing.
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You think it's missing given the other facts.
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You know about them and you deliver that
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and then that becomes, you know,
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sort of very easy to sell to them.
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To linger on this point a little bit,
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you've mentioned that in your family,
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when you were growing up,
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nobody raised their voice in anger or otherwise.
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And you said that this allows you to learn to listen
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and hear some interesting things.
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Can you elaborate as you have been on that idea,
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what do you hear about the world if you listen?
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Well, you have to listen really intensely
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to understand what people are saying
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as well as what people are intending
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because it's not necessarily the same thing.
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And people mostly give themselves away
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no matter how clever they think they are.
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Particularly if you have the full array of inputs.
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In other words, if you look at their face,
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you look at their eyes, which are the window on the soul,
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it's very difficult to conceal what you're thinking.
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You look at facial expressions and posture.
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You listen to their voice, which changes.
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You know, when you're talking about something
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you're comfortable with or not,
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are you speaking faster?
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Is the amplitude of what you're saying higher?
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Most people just give away what's really on their mind.
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You know, they're not that clever.
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They're busy spending their time thinking about
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what they're in the process of saying.
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And so if you just observe that, not in a hostile way,
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but just in an evocative way
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and just let them talk for a while,
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they'll more or less tell you almost completely
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what they're thinking,
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even the stuff they don't want you to know.
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And once you know that, of course,
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it's sort of easy to play that kind of game
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because they've already told you
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everything you need to know.
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And so it's easy to get to a conclusion
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if there's meant to be one, an area of common interest,
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since you know almost exactly what's on their mind.
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And so that's an enormous advantage
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as opposed to just walking in someplace
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and somebody telling you something
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and you believing what they're saying.
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There are so many different levels of communication.
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So a powerful approach to life you discuss in the book
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on the topic of listening and really hearing people
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is figuring out what the biggest problem,
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bothering a particular individual or group is
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and coming up with a solution to that problem
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and presenting them with a solution, right?
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In fact, you brilliantly describe a lot of simple things
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that most people just don't do.
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It's kind of obvious,
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find the problem that's bothering somebody deeply.
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And as you said, I think you've implied
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that they will usually tell you what the problem is,
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but can you talk about this process
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of seeing what the biggest problem for a person is,
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trying to solve it,
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and maybe a particularly memorable example?
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Sure, if you know you're gonna meet somebody,
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there are two types of situations, chance meetings,
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and the second is you know you're gonna meet somebody.
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So let's take the easiest one,
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which is you know you're gonna meet somebody.
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And you start trying to make pretend you're them.
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It's really easy.
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What's on their mind?
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What are they thinking about in their daily life?
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What are the big problems they're facing?
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So if they're, you know, to make it a really easy example,
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you know, make pretend, you know,
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they're like president of the United States.
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Doesn't have to be this president, could be any president.
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So you sort of know what's more or less on their mind
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because the press keeps reporting it.
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And you see it on television, you hear it.
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People discuss it.
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So you know if you're gonna be running into somebody
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in that kind of position.
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You sort of know what they look like already.
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You know what they sound like.
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You know what their voice is like.
Lex Fridman (17:56.000)
And you know what they're focused on.
Lex Fridman (17:58.360)
And so if you're gonna meet somebody like that,
Lex Fridman (18:01.440)
what you should do is take the biggest unresolved issue
Stephen Schwarzman (18:05.360)
that they're facing and come up with
Lex Fridman (18:09.120)
a few interesting solutions
Stephen Schwarzman (18:11.680)
that basically haven't been out there.
Lex Fridman (18:16.040)
Or that you haven't heard anybody else
Stephen Schwarzman (18:19.140)
always thinking about.
Lex Fridman (18:20.000)
So just to give you an example,
Stephen Schwarzman (18:21.680)
I was sort of in the early 1990s
Lex Fridman (18:24.360)
and I was invited to something at the White House
Stephen Schwarzman (18:26.420)
which was a big deal for me because I was like,
Lex Fridman (18:29.400)
you know, a person from no place.
Lex Fridman (18:30.940)
And you know, I had met the president once before
Lex Fridman (18:35.320)
because it was President Bush
Stephen Schwarzman (18:37.200)
because his son was in my dormitory.
Lex Fridman (18:40.360)
So I had met him at Parents Day.
Stephen Schwarzman (18:43.000)
I mean it's just like the oddity of things.
Lex Fridman (18:45.360)
So I knew I was gonna see him
Stephen Schwarzman (18:47.760)
because that's where the invitation came from.
Lex Fridman (18:51.560)
And so there was something going on
Lex Fridman (18:54.040)
and I just thought about two or three ways
Lex Fridman (18:57.320)
to approach that issue.
Lex Fridman (19:00.960)
And you know, at that point I was separated
Lex Fridman (19:04.400)
and so I had brought a date to the White House
Lex Fridman (19:08.720)
and so I saw the president
Lex Fridman (19:12.440)
and we sort of went over in a corner for about 10 minutes
Lex Fridman (19:16.040)
and discussed whatever this issue was.
Lex Fridman (19:18.480)
And I later went back to my date.
Stephen Schwarzman (19:22.000)
It was a little rude
Lex Fridman (19:22.840)
but it was meant to be confidential conversation
Lex Fridman (19:25.800)
and I barely knew her.
Lex Fridman (19:27.720)
And you know, she said,
Lex Fridman (19:29.560)
what were you talking about all that time?
Lex Fridman (19:31.520)
I said, well, you know,
Stephen Schwarzman (19:33.440)
there's something going on in the world
Lex Fridman (19:35.160)
and I've thought about different ways
Stephen Schwarzman (19:37.960)
of perhaps approaching that and he was interested.
Lex Fridman (19:41.640)
And the answer is of course he was interested.
Lex Fridman (19:44.080)
Why wouldn't he be interested?
Lex Fridman (19:45.380)
There didn't seem to be an easy outcome.
Lex Fridman (19:47.840)
And so, you know, conversations of that type,
Lex Fridman (19:51.360)
once somebody knows you're really thinking
Stephen Schwarzman (19:53.800)
about what's good for them and good for the situation,
Lex Fridman (19:58.600)
it has nothing to do with me.
Stephen Schwarzman (1:00:00.740)
There are thousands, maybe more, maybe millions
Lex Fridman (1:00:03.380)
of other first time entrepreneurs like me.
Lex Fridman (1:00:06.100)
What advice?
Lex Fridman (1:00:08.060)
You've gone through this process.
Stephen Schwarzman (1:00:09.420)
You've talked about the suffering, the emotional turmoil
Lex Fridman (1:00:14.060)
it all might entail.
Lex Fridman (1:00:15.540)
What advice do you have for those people taking that step?
Lex Fridman (1:00:20.220)
I'd say it's a rough ride.
Lex Fridman (1:00:23.260)
And you have to be psychologically prepared
Lex Fridman (1:00:28.860)
for things going wrong with frequency.
Stephen Schwarzman (1:00:33.060)
You have to be prepared to be put in situations where you're
Lex Fridman (1:00:38.340)
being asked to solve problems you didn't even
Stephen Schwarzman (1:00:40.620)
know those problems existed.
Lex Fridman (1:00:43.020)
For example, renting space, it's not really a problem
Stephen Schwarzman (1:00:47.140)
unless you've never done it.
Lex Fridman (1:00:48.620)
You have no idea what a lease looks like.
Stephen Schwarzman (1:00:52.060)
You don't even know the relevant rent in a market.
Lex Fridman (1:00:56.820)
So everything is new.
Stephen Schwarzman (1:00:58.580)
Everything has to be learned.
Lex Fridman (1:01:00.740)
What you realize is that it's good to have other people
Stephen Schwarzman (1:01:04.460)
with you who've had some experience in areas
Lex Fridman (1:01:07.660)
where you don't know what you're doing.
Stephen Schwarzman (1:01:09.780)
Unfortunately, an entrepreneur starting
Lex Fridman (1:01:13.140)
doesn't know much of anything.
Lex Fridman (1:01:14.620)
So everything is something new.
Lex Fridman (1:01:18.140)
And I think it's important not to be alone,
Stephen Schwarzman (1:01:24.420)
because it's sort of overwhelming.
Lex Fridman (1:01:28.660)
And you need somebody to talk to other than a spouse or a loved
Stephen Schwarzman (1:01:33.660)
one, because even they get bored with your problems.
Lex Fridman (1:01:38.340)
And so getting a group, if you look at Alibaba,
Stephen Schwarzman (1:01:43.940)
Jack Ma was telling me they basically
Lex Fridman (1:01:47.580)
were like at financial death's door at least twice.
Lex Fridman (1:01:52.420)
And the fact that it wasn't just Jack.
Lex Fridman (1:01:55.940)
I mean, people think it is, because he
Stephen Schwarzman (1:01:57.940)
became the sort of public face and the driver.
Lex Fridman (1:02:02.420)
But a group of people who can give advice,
Stephen Schwarzman (1:02:08.380)
share situations to talk about, that's really important.
Lex Fridman (1:02:13.460)
And that's not just referring to the small details
Stephen Schwarzman (1:02:15.900)
like renting space.
Lex Fridman (1:02:17.100)
No.
Stephen Schwarzman (1:02:17.600)
It's also the psychological burden.
Lex Fridman (1:02:20.500)
Yeah, and because most entrepreneurs at some point
Stephen Schwarzman (1:02:24.700)
question what they're doing, because it's not going so well.
Lex Fridman (1:02:27.780)
Or they're screwing it up, and they
Stephen Schwarzman (1:02:29.180)
don't know how to unscrew it up, because we're all learning.
Lex Fridman (1:02:34.100)
And it's hard to be learning when there are like 25 variables
Stephen Schwarzman (1:02:38.700)
going on.
Lex Fridman (1:02:39.340)
If you're missing four big ones, you can really make a mess.
Lex Fridman (1:02:43.820)
And so the ability to, in effect, have either an outsider
Lex Fridman (1:02:50.940)
who's really smart that you can rely on
Stephen Schwarzman (1:02:53.340)
for certain type of things, or other people who are working
Lex Fridman (1:02:57.460)
with you on a daily basis, most people
Stephen Schwarzman (1:03:03.380)
who haven't had experience believe
Lex Fridman (1:03:06.260)
in the myth of the one person, one great person,
Stephen Schwarzman (1:03:10.700)
makes outcomes, creates outcomes that are positive.
Lex Fridman (1:03:15.580)
Most of us, it's not like that.
Stephen Schwarzman (1:03:18.660)
If you look back over a lot of the big successful tech
Lex Fridman (1:03:22.860)
companies, it's not typically one person.
Lex Fridman (1:03:28.020)
And you will know these stories better than I do,
Lex Fridman (1:03:30.860)
because it's your world, not mine.
Lex Fridman (1:03:32.400)
But even I know that almost every one of them
Lex Fridman (1:03:35.300)
had two people.
Stephen Schwarzman (1:03:36.860)
If you look at Google, that's what they had.
Lex Fridman (1:03:40.380)
And that was the same at Microsoft at the beginning.
Lex Fridman (1:03:43.660)
And it was the same at Apple.
Lex Fridman (1:03:48.180)
People have different skills.
Lex Fridman (1:03:50.020)
And they need to play off of other people.
Lex Fridman (1:03:53.300)
So the advice that I would give you
Stephen Schwarzman (1:03:59.660)
is make sure you understand that so you don't head off
Lex Fridman (1:04:03.420)
in some direction as a lone wolf and find that either you
Stephen Schwarzman (1:04:08.280)
can't invent all the solutions or you make bad decisions
Lex Fridman (1:04:13.740)
on certain types of things.
Stephen Schwarzman (1:04:15.700)
This is a team sport.
Lex Fridman (1:04:18.020)
Entrepreneur means you're alone, in effect.
Lex Fridman (1:04:22.460)
And that's the myth.
Lex Fridman (1:04:24.260)
But it's mostly a myth.
Stephen Schwarzman (1:04:27.420)
Yeah, I think, and you talk about this in your book,
Lex Fridman (1:04:29.900)
and I could talk to you about it forever,
Stephen Schwarzman (1:04:31.940)
the harshly self critical aspect to your personality
Lex Fridman (1:04:36.740)
and to mine as well in the face of failure.
Stephen Schwarzman (1:04:39.780)
It's a powerful tool, but it's also
Lex Fridman (1:04:41.820)
a burden that's very interesting to walk that line.
Lex Fridman (1:04:49.180)
But let me ask in terms of people around you,
Lex Fridman (1:04:53.020)
in terms of friends, in the bigger
Stephen Schwarzman (1:04:56.140)
picture of your own life, where do you
Lex Fridman (1:04:57.940)
put the value of love, family, friendship
Lex Fridman (1:05:02.700)
in the big picture journey of your life?
Lex Fridman (1:05:06.580)
Well, ultimately, all journeys are alone.
Stephen Schwarzman (1:05:12.140)
It's great to have support.
Lex Fridman (1:05:16.260)
And when you go forward and say your job is
Stephen Schwarzman (1:05:23.980)
to make something work, and that's your number one
Lex Fridman (1:05:26.260)
priority, and you're going to work at it to make it work,
Stephen Schwarzman (1:05:31.500)
it's like superhuman effort.
Lex Fridman (1:05:33.900)
People don't become successful as part time workers.
Stephen Schwarzman (1:05:38.220)
It doesn't work that way.
Lex Fridman (1:05:40.580)
And if you're prepared to make that 100% to 120% effort,
Stephen Schwarzman (1:05:48.420)
you're going to need support, and you're
Lex Fridman (1:05:51.500)
going to have to have people involved
Stephen Schwarzman (1:05:53.140)
with your life who understand that that's really
Lex Fridman (1:05:56.300)
part of your life.
Stephen Schwarzman (1:05:59.180)
Sometimes you're involved with somebody,
Lex Fridman (1:06:01.580)
and they don't really understand that.
Lex Fridman (1:06:04.820)
And that's a source of conflict and difficulty.
Lex Fridman (1:06:09.140)
But if you're involved with the right people,
Stephen Schwarzman (1:06:13.500)
whether it's a dating relationship or a spousal
Lex Fridman (1:06:20.140)
relationship, you have to involve them in your life,
Lex Fridman (1:06:28.820)
but not burden them with every minor triumph or mistake.
Lex Fridman (1:06:36.540)
They actually get bored with it after a while.
Lex Fridman (1:06:41.060)
And so you have to set up different types of ecosystems.
Lex Fridman (1:06:45.900)
You have your home life.
Stephen Schwarzman (1:06:48.300)
You have your love life.
Lex Fridman (1:06:50.140)
You have children.
Lex Fridman (1:06:51.620)
And that's the enduring part of what you do.
Lex Fridman (1:06:55.900)
And then on the other side, you've got the unpredictable
Stephen Schwarzman (1:07:00.420)
nature of this type of work.
Lex Fridman (1:07:07.220)
What I say to people at my firm who are younger, usually,
Stephen Schwarzman (1:07:12.980)
well, everybody's younger, but people
Lex Fridman (1:07:16.420)
who are of an age where they're just
Stephen Schwarzman (1:07:19.780)
having their first child, or maybe they have two children,
Lex Fridman (1:07:24.500)
that it's important to make sure they go away
Stephen Schwarzman (1:07:31.140)
with their spouse at least once every two months to just
Lex Fridman (1:07:37.540)
some lovely place where there are no children, no issues,
Stephen Schwarzman (1:07:42.620)
sometimes once a month if they're
Lex Fridman (1:07:45.740)
sort of energetic and clever.
Lex Fridman (1:07:48.380)
And that
Lex Fridman (1:07:49.700)
Escape the craziness of it all.
Stephen Schwarzman (1:07:51.740)
Yeah, and reaffirm your values as a couple.
Lex Fridman (1:07:58.100)
And you have to have fun.
Stephen Schwarzman (1:08:00.940)
If you don't have fun with the person you're with,
Lex Fridman (1:08:04.780)
and all you're doing is dealing with issues,
Stephen Schwarzman (1:08:07.460)
then that gets pretty old.
Lex Fridman (1:08:09.580)
And so you have to protect the fun element of your life
Stephen Schwarzman (1:08:14.580)
together.
Lex Fridman (1:08:15.540)
And the way to do that isn't by hanging around the house
Lex Fridman (1:08:18.740)
and dealing with sort of more problems.
Lex Fridman (1:08:22.540)
You have to get away and reinforce and reinvigorate
Stephen Schwarzman (1:08:27.340)
your relationship.
Lex Fridman (1:08:28.340)
And whenever I tell one of our younger people about that,
Stephen Schwarzman (1:08:31.740)
they sort of look at me, and it's
Lex Fridman (1:08:33.540)
like the scales are falling off of their eyes.
Lex Fridman (1:08:35.820)
And they're saying, jeez, I hadn't thought about that.
Lex Fridman (1:08:39.060)
I'm so enmeshed in all these things.
Lex Fridman (1:08:41.340)
But that's a great idea.
Lex Fridman (1:08:42.820)
And that's something, as an entrepreneur,
Stephen Schwarzman (1:08:45.260)
you also have to do.
Lex Fridman (1:08:47.660)
You just can't let relationships slip
Stephen Schwarzman (1:08:50.620)
because you're half overwhelmed.
Lex Fridman (1:08:53.540)
Beautifully put.
Lex Fridman (1:08:54.300)
And I think there's no better place to end it.
Lex Fridman (1:08:57.340)
Steve, thank you so much.
Stephen Schwarzman (1:08:58.700)
I really appreciate it.
Lex Fridman (1:08:59.620)
It was an honor to talk to you.
Stephen Schwarzman (1:09:01.020)
My pleasure.
Lex Fridman (1:09:02.820)
Thanks for listening to this conversation
Stephen Schwarzman (1:09:04.500)
with Stephen Schwarzman.
Lex Fridman (1:09:05.740)
And thank you to our sponsors, ExpressVPN and MasterClass.
Stephen Schwarzman (1:09:09.940)
Please consider supporting the podcast
Lex Fridman (1:09:11.620)
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Lex Fridman (1:09:16.380)
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Lex Fridman (1:09:21.260)
If you enjoy this podcast, subscribe on YouTube,
Stephen Schwarzman (1:09:23.860)
review it with five stars on Apple Podcast,
Lex Fridman (1:09:26.180)
support it on Patreon, or simply connect with me
Stephen Schwarzman (1:09:28.420)
on Twitter at lexfriedman.
Lex Fridman (1:09:31.940)
And now, let me leave you with some words
Stephen Schwarzman (1:09:33.860)
from Stephen Schwarzman's book, What It Takes.
Lex Fridman (1:09:38.140)
It's as hard to start and run a small business
Stephen Schwarzman (1:09:41.500)
as it is to start a big one.
Lex Fridman (1:09:43.780)
You will suffer the same toll financially and psychologically
Stephen Schwarzman (1:09:46.900)
as you bludgeon it into existence.
Lex Fridman (1:09:50.340)
It's hard to raise the money and to find the right people.
Lex Fridman (1:09:53.540)
So if you're going to dedicate your life to a business,
Lex Fridman (1:09:56.620)
which is the only way it will ever work,
Stephen Schwarzman (1:09:59.740)
you should choose one with the potential to be huge.
Lex Fridman (1:10:02.660)
Thank you for listening and hope to see you next time.
Stephen Schwarzman (20:01.880)
I mean, it's really about being in service,
Lex Fridman (20:05.480)
you know, to the situation.
Stephen Schwarzman (20:08.640)
Then people trust you and they'll tell you other things
Lex Fridman (20:12.080)
because they know your motives are basically very pure.
Stephen Schwarzman (20:17.360)
You're just trying to resolve a difficult situation
Lex Fridman (20:20.560)
or help somebody do it.
Lex Fridman (20:21.920)
So these types of things, you know,
Lex Fridman (20:24.960)
that's a planned situation, that's easy.
Stephen Schwarzman (20:27.600)
Sometimes you just come upon somebody
Lex Fridman (20:29.720)
and they start talking and you know,
Stephen Schwarzman (20:31.980)
that requires, you know, like different skills.
Lex Fridman (20:34.940)
You know, you can ask them,
Lex Fridman (20:38.020)
what have you been working on lately?
Lex Fridman (20:39.440)
What are you thinking about?
Stephen Schwarzman (20:41.480)
You can ask them, you know,
Lex Fridman (20:43.320)
has anything been particularly difficult?
Lex Fridman (20:45.720)
And you know, you can ask most people
Lex Fridman (20:48.960)
if they trust you for some reason, they'll tell you.
Lex Fridman (20:55.560)
And then you have to instantly go to work on it.
Lex Fridman (20:58.860)
And you know, that's not as good
Stephen Schwarzman (21:02.120)
as having some advanced planning,
Lex Fridman (21:03.640)
but you know, almost everything going on is like out there.
Lex Fridman (21:10.880)
And people who are involved with interesting situations,
Lex Fridman (21:15.340)
they're playing in the same ecosystem.
Stephen Schwarzman (21:20.980)
They just have different roles in the ecosystem.
Lex Fridman (21:25.540)
And you know, you could do that
Stephen Schwarzman (21:29.080)
with somebody who owns a pro football team
Lex Fridman (21:32.100)
that loses all the time.
Stephen Schwarzman (21:34.240)
We specialize in those in New York.
Lex Fridman (21:37.300)
And you know, you already have analyzed
Lex Fridman (21:41.460)
why they're losing, right?
Lex Fridman (21:43.280)
Inevitably, it's because they don't have a great quarterback,
Stephen Schwarzman (21:48.240)
they don't have a great coach,
Lex Fridman (21:50.340)
and they don't have a great general manager
Stephen Schwarzman (21:52.420)
who knows how to hire the best talent.
Lex Fridman (21:55.180)
Those are the three reasons why a team fails, right?
Stephen Schwarzman (21:59.200)
Because there are salary caps,
Lex Fridman (22:01.160)
so every team pays a certain amount of money
Stephen Schwarzman (22:03.380)
for all their players.
Lex Fridman (22:04.840)
So it's gotta be those three positions.
Lex Fridman (22:07.000)
So if you're talking with somebody like that,
Lex Fridman (22:09.500)
inevitably, even though it's not structured,
Stephen Schwarzman (22:13.460)
you'll know how their team's doing
Lex Fridman (22:16.780)
and you'll know pretty much why.
Lex Fridman (22:19.240)
And if you start asking questions about that,
Lex Fridman (22:22.420)
they're typically very happy to talk about it
Stephen Schwarzman (22:24.940)
because they haven't solved that problem.
Lex Fridman (22:27.020)
In some cases, they don't even know that's the problem.
Stephen Schwarzman (22:29.620)
It's pretty easy to see it.
Lex Fridman (22:31.300)
So, you know, I do stuff like that,
Stephen Schwarzman (22:33.620)
which I find is intuitive as a process,
Lex Fridman (22:38.620)
but, you know, leads to really good results.
Stephen Schwarzman (22:43.540)
Well, the funny thing is when you're smart,
Lex Fridman (22:48.220)
for smart people, it's hard to escape their own ego
Lex Fridman (22:51.400)
and the space of their own problems,
Lex Fridman (22:53.520)
which is what's required
Stephen Schwarzman (22:55.680)
to think about other people's problems.
Lex Fridman (22:58.220)
It requires for you to let go of the fact
Stephen Schwarzman (23:01.040)
that your own problems are all important
Lex Fridman (23:03.780)
and then to talk about your,
Stephen Schwarzman (23:05.700)
I think while it seems obvious
Lex Fridman (23:09.240)
and I think quite brilliant,
Stephen Schwarzman (23:11.860)
it's just a difficult leap for many people,
Lex Fridman (23:14.580)
especially smart people,
Stephen Schwarzman (23:16.340)
to empathize with, truly empathize with the problems
Lex Fridman (23:19.380)
of others.
Stephen Schwarzman (23:21.140)
Well, I have a competitive advantage,
Lex Fridman (23:23.380)
which is, I don't think I'm so smart.
Stephen Schwarzman (23:29.220)
So, you know, it's not a problem for me.
Lex Fridman (23:31.820)
Well, the truly smartest people I know
Stephen Schwarzman (23:33.460)
say that exact same thing.
Lex Fridman (23:34.820)
Yeah, being humble is really useful,
Stephen Schwarzman (23:39.580)
competitive advantage, as you said.
Lex Fridman (23:42.520)
How do you stay humble?
Stephen Schwarzman (23:44.440)
Well, I haven't changed much.
Lex Fridman (23:46.960)
Since?
Stephen Schwarzman (23:47.800)
Since I was in my mid teens.
Lex Fridman (23:51.100)
You know, I was raised partly in the city
Lex Fridman (23:54.800)
and partly in the suburbs.
Lex Fridman (23:58.280)
And, you know, whatever the values I had at that time,
Stephen Schwarzman (24:03.280)
those are still my values.
Lex Fridman (24:05.700)
I call them like middle class values,
Stephen Schwarzman (24:08.300)
that's how I was raised.
Lex Fridman (24:10.300)
And I've never changed, why would I?
Stephen Schwarzman (24:14.740)
That's who I am.
Lex Fridman (24:16.300)
And so the accoutrement of, you know,
Stephen Schwarzman (24:21.140)
the rest of your life has gotta be put on the same,
Lex Fridman (24:25.580)
you know, like solid foundation of who you are.
Stephen Schwarzman (24:28.480)
Because if you start losing who you really are,
Lex Fridman (24:31.220)
who are you?
Lex Fridman (24:32.700)
So I've never had the desire to be somebody else.
Lex Fridman (24:37.180)
I just do other things now that I wouldn't do
Stephen Schwarzman (24:40.740)
as a, you know, sort of as a middle class kid
Lex Fridman (24:43.940)
from Philadelphia.
Stephen Schwarzman (24:45.340)
I mean, my life has morphed on a certain level.
Lex Fridman (24:48.660)
But part of the strength of having integrity
Stephen Schwarzman (24:52.580)
of personality is that you can remain in touch
Lex Fridman (24:57.580)
with everybody who comes from that kind of background.
Stephen Schwarzman (25:04.160)
And, you know, even though I do some things
Lex Fridman (25:07.320)
that aren't like that, you know,
Stephen Schwarzman (25:09.000)
in terms of people I meet or situations I'm in,
Lex Fridman (25:12.340)
I always look at it through the same lens.
Lex Fridman (25:15.040)
And that's very psychologically comfortable
Lex Fridman (25:18.760)
and doesn't require me to make any real adjustments
Stephen Schwarzman (25:22.500)
in my life and I just keep plowing ahead.
Lex Fridman (25:25.200)
There's a lot of activity in progress in recent years
Stephen Schwarzman (25:29.500)
around effective altruism.
Lex Fridman (25:32.620)
I wanted to bring this topic with you
Stephen Schwarzman (25:34.500)
because it's an interesting one from your perspective.
Lex Fridman (25:38.220)
You can put it in any kind of terms,
Lex Fridman (25:39.980)
but it's philanthropy that focuses on maximizing impact.
Lex Fridman (25:44.300)
How do you see the goal of philanthropy,
Stephen Schwarzman (25:47.340)
both from a personal motivation perspective
Lex Fridman (25:50.020)
and the societal big picture impact perspective?
Stephen Schwarzman (25:53.580)
Yeah, I don't think about philanthropy
Lex Fridman (25:55.940)
the way you would expect me to, okay?
Stephen Schwarzman (25:58.980)
I look at, you know, sort of solving big issues,
Lex Fridman (26:04.420)
addressing big issues, starting new organizations to do it,
Stephen Schwarzman (26:09.500)
much like we do in our business.
Lex Fridman (26:12.060)
You know, we keep growing our business
Stephen Schwarzman (26:14.300)
not by taking the original thing and making it larger,
Lex Fridman (26:17.620)
but continually seeing new things and building those.
Stephen Schwarzman (26:22.260)
And, you know, sort of marshaling financial resources,
Lex Fridman (26:26.380)
human resources, and in our case,
Stephen Schwarzman (26:30.420)
because we're in the investment business,
Lex Fridman (26:32.120)
we find something new that looks like
Stephen Schwarzman (26:33.980)
it's gonna be terrific and we do that
Lex Fridman (26:36.780)
and it works out really well.
Stephen Schwarzman (26:38.740)
All I do in what you would call philanthropy
Lex Fridman (26:42.300)
is look at other opportunities to help society.
Lex Fridman (26:47.300)
And I end up starting something new,
Lex Fridman (26:50.380)
marshaling people, marshaling a lot of money,
Lex Fridman (26:53.100)
and then at the end of that kind of creative process,
Lex Fridman (26:56.820)
somebody typically asks me to write a check.
Stephen Schwarzman (26:59.740)
I don't wake up and say,
Lex Fridman (27:01.940)
how can I give large amounts of money away?
Stephen Schwarzman (27:05.460)
I look at issues that are important for people.
Lex Fridman (27:10.620)
In some cases, I do smaller things.
Stephen Schwarzman (27:13.700)
Because it's important to a person, and, you know,
Lex Fridman (27:18.700)
I can relate to that person.
Stephen Schwarzman (27:21.060)
There's some unfairness that's happened to them.
Lex Fridman (27:24.540)
And so in situations like that,
Stephen Schwarzman (27:26.940)
I'd give money anonymously and help them out.
Lex Fridman (27:29.820)
And, you know, it's like a miniature version
Stephen Schwarzman (27:35.460)
of addressing something really big.
Lex Fridman (27:37.540)
So, you know, at MIT, I'm a little bit
Stephen Schwarzman (27:41.700)
you know, at MIT, I've done a big thing,
Lex Fridman (27:46.660)
you know, helping to start this new school of computing.
Lex Fridman (27:49.860)
And I did that because, you know,
Lex Fridman (27:51.940)
I saw that, you know, there's sort of like a global race on
Stephen Schwarzman (27:57.220)
in AI, quantum, and other major technologies.
Lex Fridman (28:00.700)
And I thought that the US could use more enhancement
Stephen Schwarzman (28:06.860)
from a competitive perspective.
Lex Fridman (28:09.700)
And I also, because I get to China a lot
Lex Fridman (28:12.340)
and I travel around a lot compared to a regular person,
Lex Fridman (28:17.140)
you know, I can see the need to have control
Stephen Schwarzman (28:21.020)
of these types of technologies.
Lex Fridman (28:23.140)
So when they're introduced, we don't create a mess
Stephen Schwarzman (28:26.340)
like we did with the internet and with social media.
Lex Fridman (28:30.740)
Unintended consequence, you know,
Stephen Schwarzman (28:33.420)
that's creating all kinds of issues and freedom of speech
Lex Fridman (28:36.540)
and the functioning of liberal democracies.
Lex Fridman (28:39.380)
So with AI, it was pretty clear
Lex Fridman (28:41.580)
that there was enormous difference of views
Stephen Schwarzman (28:44.980)
around the world by the relatively few practitioners
Lex Fridman (28:48.740)
in the world who really knew what was going on.
Lex Fridman (28:51.500)
And by accident, I knew a bunch of these people,
Lex Fridman (28:55.900)
you know, who were like big famous people.
Lex Fridman (28:59.940)
And I could talk to them and say,
Lex Fridman (29:01.980)
why do you think this is a force for bad?
Lex Fridman (29:05.140)
And someone else, why do you feel this is a force for good?
Lex Fridman (29:08.700)
And how do we move forward with the technology
Stephen Schwarzman (29:13.500)
by the same time, make sure that whatever is potentially,
Lex Fridman (29:19.460)
you know, sort of on the bad side of this technology
Stephen Schwarzman (29:22.380)
with, you know, for example, disruption of workforces
Lex Fridman (29:26.220)
and things like that, that could happen much faster
Stephen Schwarzman (29:29.700)
than the industrial revolution.
Lex Fridman (29:32.100)
What do we do about that?
Lex Fridman (29:33.380)
And how do we keep that under control
Lex Fridman (29:35.980)
so that the really good things about these technologies,
Stephen Schwarzman (29:39.540)
which will be great things,
Lex Fridman (29:41.860)
not good things are allowed to happen?
Lex Fridman (29:44.980)
So to me, you know, this was one of the great issues
Lex Fridman (29:52.100)
facing society.
Stephen Schwarzman (29:53.900)
The number of people who were aware of it were very small.
Lex Fridman (29:57.420)
I just accidentally got sucked into it.
Lex Fridman (30:00.460)
And as soon as I saw it, I went, oh my God, this is mega,
Lex Fridman (30:06.420)
both on a competitive basis globally,
Lex Fridman (30:09.980)
but also in terms of protecting society
Lex Fridman (30:13.620)
and benefiting society.
Lex Fridman (30:15.540)
So that's how I got involved.
Lex Fridman (30:17.620)
And at the end, you know, sort of the right thing
Stephen Schwarzman (30:20.140)
that we figured out was, you know,
Lex Fridman (30:22.380)
sort of double MIT's computer science faculty
Lex Fridman (30:26.180)
and basically create the first AI enabled university
Lex Fridman (30:30.900)
in the world.
Stephen Schwarzman (30:32.500)
And, you know, in effect, be an example,
Lex Fridman (30:35.660)
a beacon to the rest of the research community
Stephen Schwarzman (30:38.460)
around the world academically,
Lex Fridman (30:40.900)
and create, you know, a much more robust U.S. situation,
Stephen Schwarzman (30:49.300)
competitive situation among the universities.
Lex Fridman (30:52.940)
Because if MIT was going to raise a lot of money
Lex Fridman (30:55.820)
and double its faculty, well, you could bet that,
Lex Fridman (30:59.340)
you know, a number of other universities
Stephen Schwarzman (31:02.460)
were going to do the same thing.
Lex Fridman (31:03.420)
At the end of it, it would be great for knowledge creation,
Stephen Schwarzman (31:08.260)
you know, great for the United States, great for the world.
Lex Fridman (31:12.980)
And so I like to do things that I think are really positive,
Stephen Schwarzman (31:19.580)
things that other people aren't acting on,
Lex Fridman (31:23.060)
that I see for whatever the reason.
Stephen Schwarzman (31:25.940)
First, it's just people I meet and what they say,
Lex Fridman (31:29.220)
and I can recognize when something really profound
Stephen Schwarzman (31:32.940)
is about to happen or needs to.
Lex Fridman (31:35.380)
And I do it, and at the end of the situation,
Lex Fridman (31:39.100)
somebody says, can you write a check to help us?
Lex Fridman (31:43.300)
And then the answer is sure.
Stephen Schwarzman (31:44.860)
I mean, because if I don't, the vision won't happen.
Lex Fridman (31:48.260)
But it's the vision of whatever I do
Stephen Schwarzman (31:52.420)
that is compelling.
Lex Fridman (31:54.380)
And essentially, I love that idea of whether it's small
Stephen Schwarzman (31:59.540)
at the individual level or really big,
Lex Fridman (32:01.940)
like the gift to MIT to launch the College of Computing.
Stephen Schwarzman (32:06.820)
It starts with a vision, and you see philanthropy as,
Lex Fridman (32:14.500)
the biggest impact you can have is by launching something new,
Stephen Schwarzman (32:18.460)
especially on an issue that others aren't really addressing.
Lex Fridman (32:22.500)
And I also love the notion, and you're absolutely right,
Stephen Schwarzman (32:25.700)
that there's other universities, Stanford, CMU,
Lex Fridman (32:30.580)
I'm looking at you, that would essentially,
Stephen Schwarzman (32:33.460)
the seed will create other, it'll have a ripple effect
Lex Fridman (32:39.500)
that potentially might help US be a leader
Stephen Schwarzman (32:42.500)
or continue to be a leader in AI.
Lex Fridman (32:44.300)
It's potentially a very transformative research
Stephen Schwarzman (32:49.060)
direction.
Lex Fridman (32:50.020)
Just to linger on that point a little bit,
Lex Fridman (32:52.220)
what is your hope long term for the impact
Lex Fridman (32:55.980)
the college here at MIT might have in the next five, 10,
Lex Fridman (33:00.260)
even 20, or let's get crazy, 30, 50 years?
Lex Fridman (33:03.580)
Well, it's very difficult to predict the future
Stephen Schwarzman (33:06.100)
when you're dealing with knowledge production
Lex Fridman (33:08.460)
and creativity.
Stephen Schwarzman (33:11.140)
MIT has, obviously, some unique aspects.
Lex Fridman (33:16.220)
Globally, there's four big academic surveys.
Stephen Schwarzman (33:22.780)
I forget whether it was QS, there's
Lex Fridman (33:25.460)
the Times in London, the US News, and whatever.
Lex Fridman (33:31.100)
And one of these recently, MIT, was ranked number one
Lex Fridman (33:34.900)
in the world.
Lex Fridman (33:37.620)
So leave aside whether you're number three somewhere else,
Lex Fridman (33:41.420)
in the great sweep of humanity, this is pretty amazing.
Lex Fridman (33:47.140)
So you have a really remarkable aggregation of human talent
Lex Fridman (33:53.580)
here.
Lex Fridman (33:55.180)
And where it goes, it's hard to tell.
Lex Fridman (33:58.380)
You have to be a scientist to have the right feel.
Lex Fridman (34:03.220)
But what's important is you have a critical mass of people.
Lex Fridman (34:08.620)
And I think it breaks into two buckets.
Stephen Schwarzman (34:12.620)
One is scientific advancement.
Lex Fridman (34:15.700)
And if the new college can help either
Stephen Schwarzman (34:21.500)
serve as a convening force within the university
Lex Fridman (34:25.780)
or help coordination and communication among people,
Stephen Schwarzman (34:33.020)
that's a good thing, absolute good thing.
Lex Fridman (34:36.780)
The second thing is in the AI ethics area,
Stephen Schwarzman (34:41.580)
which is, in a way, equally important.
Lex Fridman (34:48.940)
Because if the science side creates blowback
Lex Fridman (34:55.620)
so that science is a bit crippled in terms
Lex Fridman (35:03.980)
of going forward because society's reaction to knowledge
Stephen Schwarzman (35:09.020)
advancement in this field becomes really hostile,
Lex Fridman (35:13.140)
then you've sort of lost the game
Stephen Schwarzman (35:15.460)
in terms of scientific progress and innovation.
Lex Fridman (35:18.980)
And so the AI ethics piece is super important
Stephen Schwarzman (35:22.980)
because in a perfect world, MIT would
Lex Fridman (35:29.500)
serve as a global convener.
Stephen Schwarzman (35:32.460)
Because what you need is you need the research universities.
Lex Fridman (35:38.420)
You need the companies that are driving AI and quantum work.
Stephen Schwarzman (35:46.460)
You need governments who will ultimately
Lex Fridman (35:49.500)
be regulating certain elements of this.
Lex Fridman (35:53.460)
And you also need the media to be knowledgeable and trained
Lex Fridman (35:59.540)
so we don't get overreactions to one situation, which then goes
Stephen Schwarzman (36:09.020)
viral and it ends up shutting down
Lex Fridman (36:12.540)
avenues that are perfectly fine to be walking down or running
Stephen Schwarzman (36:18.660)
down that avenue.
Lex Fridman (36:20.540)
But if enough discordant information,
Stephen Schwarzman (36:25.580)
not even correct necessarily, sort of gets
Lex Fridman (36:34.020)
pushed around society, then you can end up
Stephen Schwarzman (36:36.900)
with a really hostile regulatory environment and other things.
Lex Fridman (36:40.700)
So you have four drivers that have
Stephen Schwarzman (36:44.540)
to be sort of integrated.
Lex Fridman (36:50.220)
And so if the new school of computing
Stephen Schwarzman (36:55.100)
can be really helpful in that regard,
Lex Fridman (36:58.540)
then that's a real service to science.
Lex Fridman (37:02.100)
And it's a service to MIT.
Lex Fridman (37:05.100)
So that's why I wanted to get involved for both areas.
Lex Fridman (37:10.060)
And the hope is for me, for others,
Lex Fridman (37:12.820)
for everyone, for the world, is for this particular college
Stephen Schwarzman (37:17.620)
of computing to be a beacon and a connector for these ideas.
Lex Fridman (37:22.980)
Yeah, that's right.
Stephen Schwarzman (37:23.820)
I mean, I think MIT is perfectly positioned to do that.
Lex Fridman (37:31.940)
So you've mentioned the media, social media, the internet
Stephen Schwarzman (37:35.220)
as this complex network of communication with flaws,
Lex Fridman (37:41.900)
perhaps, perhaps you can speak to them.
Lex Fridman (37:44.140)
But I personally think that science and technology
Lex Fridman (37:50.500)
has its flaws, but ultimately is, one, sexy, exciting.
Stephen Schwarzman (37:58.140)
It's the way for us to explore and understand
Lex Fridman (38:01.180)
the mysteries of our world.
Lex Fridman (38:02.940)
And two, perhaps more importantly for some people,
Lex Fridman (38:06.900)
it's a huge way to, a really powerful way
Stephen Schwarzman (38:09.700)
to grow the economy, to improve the quality of life
Lex Fridman (38:12.540)
for everyone.
Lex Fridman (38:13.620)
So how do we get, how do you see the media, social media,
Lex Fridman (38:19.060)
the internet as a society having a healthy discourse
Stephen Schwarzman (38:26.060)
about science, first of all, one that's factual
Lex Fridman (38:30.220)
and two, one that finds science exciting,
Stephen Schwarzman (38:33.140)
that invests in science, that pushes it forward,
Lex Fridman (38:36.540)
especially in this science fiction, fear filled field
Lex Fridman (38:41.620)
of artificial intelligence?
Lex Fridman (38:43.460)
Well, I think that's a little above my pay grade
Stephen Schwarzman (38:45.780)
because trying to control social media
Lex Fridman (38:50.060)
to make it do what you want to do
Stephen Schwarzman (38:52.820)
appears to be beyond almost anybody's control.
Lex Fridman (38:56.580)
And the technology is being used to create
Lex Fridman (39:00.820)
what I call the tyranny of the minorities.
Lex Fridman (39:04.060)
A minority is defined as two or three people
Stephen Schwarzman (39:07.940)
on a street corner.
Lex Fridman (39:09.300)
Doesn't matter what they look like.
Stephen Schwarzman (39:11.340)
Doesn't matter where they came from.
Lex Fridman (39:13.500)
They're united by that one issue that they care about.
Lex Fridman (39:19.940)
And their job is to enforce their views on the world.
Lex Fridman (39:26.860)
And in the political world, people just
Stephen Schwarzman (39:30.860)
are manufacturing truth.
Lex Fridman (39:34.100)
And they throw it all over.
Lex Fridman (39:36.340)
And it affects all of us.
Lex Fridman (39:38.980)
And sometimes people are just hired to do that.
Stephen Schwarzman (39:45.220)
It's amazing.
Lex Fridman (39:46.780)
And you think it's one person.
Stephen Schwarzman (39:48.740)
It's really just sort of a front for a particular point of view.
Lex Fridman (39:55.340)
And this has become exceptionally disruptive
Stephen Schwarzman (39:59.860)
for society.
Lex Fridman (40:01.860)
And it's dangerous.
Lex Fridman (40:03.500)
And it's undercutting the ability of liberal democracies
Lex Fridman (40:07.420)
to function.
Lex Fridman (40:09.020)
And I don't know how to get a grip on this.
Lex Fridman (40:11.980)
And I was really surprised when we was up here
Stephen Schwarzman (40:16.260)
for the announcement last spring of the College of Computing.
Lex Fridman (40:24.500)
And they had all these famous scientists, some of whom
Stephen Schwarzman (40:27.580)
were involved with the invention of the internet.
Lex Fridman (40:32.660)
And almost every one of them got up and said,
Stephen Schwarzman (40:36.460)
I think I made a mistake.
Lex Fridman (40:39.180)
And as a non scientist, I never thought
Stephen Schwarzman (40:41.500)
I'd hear anyone say that.
Lex Fridman (40:44.100)
And what they said is, more or less, to make it simple,
Stephen Schwarzman (40:48.660)
we thought this would be really cool inventing the internet.
Lex Fridman (40:52.660)
We could connect everyone in the world.
Stephen Schwarzman (40:55.020)
We can move knowledge around.
Lex Fridman (40:56.820)
It was instantaneous.
Stephen Schwarzman (40:58.980)
It's a really amazing thing.
Lex Fridman (41:01.260)
He said, I don't know that there was anyone
Stephen Schwarzman (41:04.380)
who ever thought about social media coming out of that
Lex Fridman (41:07.540)
and the actual consequences for people's lives.
Stephen Schwarzman (41:12.580)
There's always some younger person.
Lex Fridman (41:17.580)
I just saw one of these yesterday.
Stephen Schwarzman (41:19.700)
It's reported on the national news
Lex Fridman (41:21.380)
who killed himself when people use social media
Stephen Schwarzman (41:25.740)
to basically sort of ridicule him or something of that type.
Lex Fridman (41:30.500)
This is dead.
Stephen Schwarzman (41:33.460)
This is dangerous.
Lex Fridman (41:35.780)
And so I don't have a solution for that other
Stephen Schwarzman (41:43.660)
than going forward, you can end up
Lex Fridman (41:46.940)
with this type of outcome using AI.
Stephen Schwarzman (41:50.060)
To make this kind of mistake twice is unforgivable.
Lex Fridman (41:56.180)
So interestingly, at least in the West and parts of China,
Stephen Schwarzman (42:02.180)
people are quite sympathetic to the whole concept of AI ethics
Lex Fridman (42:08.900)
and what gets introduced when and cooperation
Stephen Schwarzman (42:13.620)
within your own country, within your own industry,
Lex Fridman (42:17.460)
as well as globally to make sure
Stephen Schwarzman (42:20.420)
that the technology is a force for good.
Lex Fridman (42:24.260)
And that really interesting topic.
Stephen Schwarzman (42:25.660)
Since 2007, you've had a relationship
Lex Fridman (42:28.660)
with senior leadership with a lot of people in China
Lex Fridman (42:32.820)
and an interest in understanding modern China,
Lex Fridman (42:36.020)
their culture, their world, much like with Russia.
Stephen Schwarzman (42:39.540)
I'm from Russia originally.
Lex Fridman (42:42.180)
Americans are told a very narrow, one sided story
Stephen Schwarzman (42:44.980)
about China that I'm sure misses a lot
Lex Fridman (42:48.660)
of fascinating complexity, both positive and negative.
Lex Fridman (42:53.260)
What lessons about Chinese culture, its ideas as a nation,
Lex Fridman (42:57.020)
its future do you think Americans should know about,
Lex Fridman (43:00.540)
deliberate on, think about?
Lex Fridman (43:02.860)
Well, it's sort of a wide question
Stephen Schwarzman (43:06.100)
that you're asking about.
Lex Fridman (43:09.500)
China is a pretty unusual place.
Stephen Schwarzman (43:11.860)
First, it's huge.
Lex Fridman (43:15.940)
It's physically huge.
Stephen Schwarzman (43:17.660)
It's got a billion three people.
Lex Fridman (43:19.980)
And the character of the people isn't as well understood
Stephen Schwarzman (43:24.940)
in the United States.
Lex Fridman (43:27.300)
Chinese people are amazingly energetic.
Stephen Schwarzman (43:34.020)
If you're one of a billion three people,
Lex Fridman (43:37.220)
one of the things you've got to be focused on
Stephen Schwarzman (43:40.100)
is how do you make your way through a crowd
Lex Fridman (43:44.900)
of a billion 2.99999 other people.
Stephen Schwarzman (43:50.940)
No, the word for that is competitive.
Lex Fridman (43:52.900)
Yes, they are individually highly energetic,
Stephen Schwarzman (43:57.100)
highly focused, always looking for some opportunity
Lex Fridman (44:02.900)
for themselves because they need to,
Stephen Schwarzman (44:07.740)
because there's an enormous amount of just literally people
Lex Fridman (44:11.940)
around.
Lex Fridman (44:12.460)
And so what I've found is they'll
Lex Fridman (44:17.860)
try and find a way to win for themselves.
Lex Fridman (44:21.780)
And their country is complicated because it basically
Lex Fridman (44:25.900)
doesn't have the same kind of functional laws
Stephen Schwarzman (44:29.540)
that we do in the United States and the West.
Lex Fridman (44:34.020)
And the country is controlled really
Stephen Schwarzman (44:39.740)
through a web of relationships you have with other people
Lex Fridman (44:44.340)
and the relationships that those other people have
Stephen Schwarzman (44:47.500)
with other people.
Lex Fridman (44:48.860)
So it's an incredibly dynamic culture
Stephen Schwarzman (44:53.860)
where if somebody knocks somebody up
Lex Fridman (44:56.860)
on the top who's three levels above you
Lex Fridman (44:59.620)
and is, in effect, protecting you,
Lex Fridman (45:01.300)
then you're like a floating molecule there
Stephen Schwarzman (45:08.260)
without tethering except the one or two layers above you.
Lex Fridman (45:12.140)
But that's going to get affected.
Lex Fridman (45:14.180)
So it's a very dynamic system.
Lex Fridman (45:15.940)
And getting people to change is not that easy
Stephen Schwarzman (45:19.940)
because if there aren't really functioning laws,
Lex Fridman (45:23.780)
it's only the relationships that everybody has.
Lex Fridman (45:27.380)
And so when you decide to make a major change
Lex Fridman (45:30.900)
and you sign up for it, something
Stephen Schwarzman (45:33.980)
is changing in your life.
Lex Fridman (45:36.420)
There won't necessarily be all the same people on your team.
Lex Fridman (45:40.700)
And that's a very high risk enterprise.
Lex Fridman (45:43.660)
So when you're dealing with China,
Stephen Schwarzman (45:46.260)
it's important to know almost what everybody's relationship
Lex Fridman (45:50.940)
is with somebody.
Lex Fridman (45:52.740)
So when you suggest doing something differently,
Lex Fridman (45:55.860)
you line up these forces.
Stephen Schwarzman (45:59.100)
In the West, it's usually you talk to a person
Lex Fridman (46:02.740)
and they figure out what's good for them.
Stephen Schwarzman (46:04.900)
It's a lot easier.
Lex Fridman (46:06.340)
And in that sense, in a funny way,
Stephen Schwarzman (46:08.820)
it's easier to make change in the West,
Lex Fridman (46:11.420)
just the opposite of what people think.
Lex Fridman (46:14.860)
But once the Chinese system adjusts
Lex Fridman (46:17.220)
to something that's new, everybody's on the team.
Stephen Schwarzman (46:22.500)
It's hard to change them.
Lex Fridman (46:23.540)
But once they're changed, they are incredibly focused in a way
Stephen Schwarzman (46:28.740)
that it's hard for the West to do
Lex Fridman (46:31.860)
in a more individualistic culture.
Lex Fridman (46:35.020)
So there are all kinds of fascinating things.
Lex Fridman (46:42.580)
One thing that might interest the people who are listening
Stephen Schwarzman (46:46.820)
who are more technologically based than some other group.
Lex Fridman (46:50.900)
I was with one of the top people in the government
Stephen Schwarzman (46:56.060)
a few weeks ago, and he was telling me that every school
Lex Fridman (47:00.060)
child in China is going to be taught computer science.
Stephen Schwarzman (47:08.700)
Now, imagine 100% of these children.
Lex Fridman (47:14.980)
This is such a large number of human beings.
Stephen Schwarzman (47:20.060)
Now, that doesn't mean that every one of them
Lex Fridman (47:22.820)
will be good at computer science.
Lex Fridman (47:25.260)
But if it's sort of like in the West,
Lex Fridman (47:28.780)
if it's like math or English, everybody's going to take it.
Stephen Schwarzman (47:33.420)
Not everybody's great at English.
Lex Fridman (47:35.540)
They don't write books.
Stephen Schwarzman (47:36.540)
They don't write poetry.
Lex Fridman (47:38.220)
And not everybody's good at math.
Stephen Schwarzman (47:41.180)
Somebody like myself, I sort of evolved to the third grade,
Lex Fridman (47:44.780)
and I'm still doing flashcards.
Stephen Schwarzman (47:47.740)
I didn't make it further in math.
Lex Fridman (47:50.220)
But imagine everybody in their society
Stephen Schwarzman (47:54.660)
is going to be involved with computer science.
Lex Fridman (47:58.380)
I'd just even pause on that.
Stephen Schwarzman (48:01.180)
I think computer science involves,
Lex Fridman (48:05.180)
at the basic beginner level, programming.
Lex Fridman (48:07.940)
And the idea that everybody in the society
Lex Fridman (48:11.380)
would have some ability to program a computer is incredible.
Stephen Schwarzman (48:18.620)
For me, it's incredibly exciting,
Lex Fridman (48:20.340)
and I think that should give the United States pause
Lex Fridman (48:24.980)
and consider what...
Lex Fridman (48:28.100)
Talking about sort of philanthropy and launching things,
Stephen Schwarzman (48:31.300)
there's nothing like launching,
Lex Fridman (48:33.780)
sort of investing in young youth, the education system,
Stephen Schwarzman (48:38.180)
because that's where everything launches.
Lex Fridman (48:40.380)
Yes.
Stephen Schwarzman (48:41.220)
Well, we've got a complicated system
Lex Fridman (48:42.620)
because we have over 3,000 school districts
Stephen Schwarzman (48:45.700)
around the country.
Lex Fridman (48:47.380)
China doesn't worry about that as a concept.
Stephen Schwarzman (48:50.900)
They make a decision at the very top of the government
Lex Fridman (48:55.220)
that that's what they want to have happen,
Lex Fridman (48:57.380)
and that is what will happen.
Lex Fridman (48:59.460)
And we're really handicapped by this distributed power
Stephen Schwarzman (49:07.020)
in the education area,
Lex Fridman (49:08.180)
although some people involved with that area
Stephen Schwarzman (49:10.820)
will think it's great.
Lex Fridman (49:13.860)
But you would know better than I do
Lex Fridman (49:17.060)
what percent of American children
Lex Fridman (49:18.900)
have computer science exposure.
Stephen Schwarzman (49:23.220)
My guess, no knowledge, would be 5% or less.
Lex Fridman (49:29.460)
And if we're going to be going into a world
Stephen Schwarzman (49:33.060)
where the other major economic power,
Lex Fridman (49:37.380)
sort of like ourselves, has got like 100% and we got 5%,
Lex Fridman (49:42.580)
and the whole computer science area is the future,
Lex Fridman (49:49.060)
then we're purposely or accidentally actually
Stephen Schwarzman (49:52.980)
handicapping ourselves,
Lex Fridman (49:54.900)
and our system doesn't allow us to adjust quickly to that.
Stephen Schwarzman (50:00.300)
So, you know, issues like this I find fascinating.
Lex Fridman (50:06.300)
And, you know, if you're lucky enough
Stephen Schwarzman (50:08.340)
to go to other countries, which I do,
Lex Fridman (50:12.540)
and you learn what they're thinking,
Stephen Schwarzman (50:14.580)
then it informs what we ought to be doing in the United States.
Lex Fridman (50:22.700)
So the current administration, Donald Trump,
Stephen Schwarzman (50:25.580)
has released an executive order on artificial intelligence.
Lex Fridman (50:29.820)
Not sure if you're familiar with it.
Stephen Schwarzman (50:31.820)
In 2019, looking several years ahead,
Lex Fridman (50:36.300)
how does America sort of,
Stephen Schwarzman (50:38.740)
we've mentioned in terms of the big impact,
Lex Fridman (50:41.780)
we hope your investment in MIT will have a ripple effect,
Lex Fridman (50:47.980)
but from a federal perspective, from a government perspective,
Lex Fridman (50:51.740)
how does America establish, with respect to China,
Stephen Schwarzman (50:55.660)
leadership in the world at the top
Lex Fridman (50:57.780)
for research and development in AI?
Stephen Schwarzman (51:00.260)
I think that you have to get the federal government
Lex Fridman (51:04.060)
in the game in a big way,
Lex Fridman (51:07.660)
and that this leap forward technologically,
Lex Fridman (51:13.540)
which is going to happen with or without us,
Stephen Schwarzman (51:17.340)
you know, really should be with us,
Lex Fridman (51:19.980)
and it's an opportunity, in effect,
Stephen Schwarzman (51:23.500)
for another moonshot kind of mobilization
Lex Fridman (51:28.380)
by the United States.
Stephen Schwarzman (51:30.860)
I think the appetite actually is there to do that.
Lex Fridman (51:38.220)
At the moment, what's getting in the way
Stephen Schwarzman (51:41.380)
is the kind of poisonous politics we have,
Lex Fridman (51:45.980)
but if you go below the lack of cooperation,
Stephen Schwarzman (51:52.500)
which is almost the defining element of American democracy
Lex Fridman (51:59.100)
right now in the Congress,
Stephen Schwarzman (52:00.940)
if you talk to individual members, they get it,
Lex Fridman (52:04.660)
and they would like to do something.
Stephen Schwarzman (52:08.020)
Another part of the issue is we're running huge deficits.
Lex Fridman (52:11.060)
We're running trillion dollar plus deficits.
Lex Fridman (52:13.820)
So how much money do you need for this initiative?
Lex Fridman (52:19.540)
Where does it come from?
Lex Fridman (52:21.460)
Who's prepared to stand up for it?
Lex Fridman (52:24.260)
Because if it involves taking away resources
Stephen Schwarzman (52:27.100)
from another area, our political system is not real flexible.
Lex Fridman (52:32.740)
To do that, if you're creating this kind of initiative,
Lex Fridman (52:41.260)
which we need, where does the money come from?
Lex Fridman (52:45.220)
And trying to get money
Stephen Schwarzman (52:47.380)
when you've got trillion dollar deficits,
Lex Fridman (52:49.540)
in a way, could be easy.
Stephen Schwarzman (52:50.860)
What's the difference of a trillion
Lex Fridman (52:52.220)
and a trillion and a little more?
Stephen Schwarzman (52:54.580)
But, you know, it's hard with the mechanisms of Congress.
Lex Fridman (52:58.620)
But what's really important is this is not an issue
Stephen Schwarzman (53:06.340)
that is unknown, and it's viewed as a very important issue.
Lex Fridman (53:12.540)
And there's almost no one in the Congress
Stephen Schwarzman (53:15.900)
when you sit down and explain what's going on
Lex Fridman (53:18.980)
who doesn't say, we've got to do something.
Stephen Schwarzman (53:22.140)
Let me ask the impossible question.
Lex Fridman (53:26.020)
You didn't endorse Donald Trump, but after he was elected,
Stephen Schwarzman (53:30.660)
you have given him advice, which seems to me a great thing
Lex Fridman (53:38.860)
to do, no matter who the president is,
Stephen Schwarzman (53:42.060)
to positively contribute to this nation by giving advice.
Lex Fridman (53:47.140)
And yet, you've received a lot of criticism for this.
Lex Fridman (53:50.580)
So on the previous topic of science and technology
Lex Fridman (53:54.100)
and government, how do we have a healthy discourse,
Stephen Schwarzman (53:59.740)
give advice, get excited conversation with the government
Lex Fridman (54:05.500)
about science and technology without it becoming politicized?
Stephen Schwarzman (54:09.620)
Well, it's very interesting.
Lex Fridman (54:12.100)
So when I was young, before there was a moonshot,
Stephen Schwarzman (54:17.260)
we had a president named John F. Kennedy from Massachusetts
Lex Fridman (54:22.300)
here.
Lex Fridman (54:23.060)
And in his inaugural address as president,
Lex Fridman (54:27.700)
he asked not what your country can do for you,
Lex Fridman (54:31.700)
but what you can do for your country.
Lex Fridman (54:34.860)
We had a generation of people my age, basically people,
Stephen Schwarzman (54:40.340)
who grew up with that credo.
Lex Fridman (54:45.180)
And sometimes you don't need to innovate.
Stephen Schwarzman (54:49.980)
You can go back to basic principles.
Lex Fridman (54:52.700)
And that's good basic principle.
Lex Fridman (54:55.860)
What can we do?
Lex Fridman (54:58.620)
Americans have GDP per capita of around $60,000.
Stephen Schwarzman (55:04.540)
It's not equally distributed, but it's big.
Lex Fridman (55:08.180)
And people have, I think, an obligation to help
Stephen Schwarzman (55:15.980)
their country.
Lex Fridman (55:17.220)
And I do that.
Lex Fridman (55:19.140)
And apparently, I take some grief from some people who
Lex Fridman (55:28.740)
project on me things I don't even vaguely believe.
Lex Fridman (55:33.580)
But I'm quite simple.
Lex Fridman (55:36.980)
I tried to help the previous president, President Obama.
Stephen Schwarzman (55:41.060)
He was a good guy.
Lex Fridman (55:42.660)
And he was a different party.
Lex Fridman (55:44.420)
And I tried to help President Bush.
Lex Fridman (55:46.660)
And he's a different party.
Lex Fridman (55:48.580)
And I sort of don't care that much about what the parties are.
Lex Fridman (55:57.180)
I care about, even though I'm a big donor for the Republicans,
Lex Fridman (56:01.420)
but what motivates me is, what are the problems we're facing?
Lex Fridman (56:08.220)
Can I help people get to a good outcome that
Lex Fridman (56:13.500)
will stand any test?
Lex Fridman (56:16.620)
But we live in a world now where the filters and the hostility
Stephen Schwarzman (56:24.860)
is so unbelievable.
Lex Fridman (56:30.100)
In the 1960s, when I went to school and university,
Stephen Schwarzman (56:34.140)
I went to Yale, we had so much stuff going on.
Lex Fridman (56:40.060)
We had a war called the Vietnam War.
Stephen Schwarzman (56:43.820)
We had sort of black power starting.
Lex Fridman (56:47.660)
And we had a sexual revolution with the birth control pill.
Lex Fridman (56:54.580)
And there was one other major thing going on,
Lex Fridman (57:02.980)
the drug revolution.
Stephen Schwarzman (57:05.460)
There hasn't been a generation that
Lex Fridman (57:08.020)
had more stuff going on in a four year period than my era.
Stephen Schwarzman (57:17.460)
Yet, there wasn't this kind of instant hostility
Lex Fridman (57:23.460)
if you believed something different.
Stephen Schwarzman (57:26.220)
Everybody lived together and respected the other person.
Lex Fridman (57:32.180)
And I think that this type of change needs to happen.
Lex Fridman (57:37.780)
And it's got to happen from the leadership
Lex Fridman (57:41.580)
of our major institutions.
Lex Fridman (57:44.420)
And I don't think that leaders can
Lex Fridman (57:48.660)
be bullied by people who are against sort
Stephen Schwarzman (57:53.780)
of the classical version of free speech
Lex Fridman (57:56.300)
and letting open expression and inquiry.
Stephen Schwarzman (58:00.420)
That's what universities are for, among other things,
Lex Fridman (58:05.420)
Socratic methods.
Lex Fridman (58:06.820)
And so I have, in the midst of this onslaught of oddness,
Lex Fridman (58:18.940)
I believe in still the basic principles.
Lex Fridman (58:22.900)
And we're going to have to find a way to get back to that.
Lex Fridman (58:26.540)
And that doesn't start with the people sort of in the middle
Stephen Schwarzman (58:31.420)
to the bottom who are using these kinds of screens
Lex Fridman (58:36.300)
to shout people down and create an uncooperative environment.
Stephen Schwarzman (58:41.260)
It's got to be done at the top with core principles that
Lex Fridman (58:46.140)
are articulated.
Lex Fridman (58:48.340)
And ironically, if people don't sign on
Lex Fridman (58:53.580)
to these kind of core principles where people are equal
Lex Fridman (58:56.900)
and speech can be heard and you don't have these enormous
Lex Fridman (59:02.980)
shout down biases subtly or out loud,
Stephen Schwarzman (59:06.940)
then they don't belong at those institutions.
Lex Fridman (59:09.580)
They're violating the core principles.
Lex Fridman (59:12.100)
And that's how you end up making change.
Lex Fridman (59:18.180)
But you have to have courageous people who
Stephen Schwarzman (59:21.660)
are willing to lay that out for the benefit of not just
Lex Fridman (59:26.220)
their institutions, but for society as a whole.
Lex Fridman (59:31.620)
So I believe that will happen.
Lex Fridman (59:35.740)
But it needs the commitment of senior people
Stephen Schwarzman (59:41.580)
to make it happen.
Lex Fridman (59:42.700)
Courage.
Lex Fridman (59:43.660)
And I think for such great leaders, great universities,
Lex Fridman (59:47.820)
there's a huge hunger for it.
Lex Fridman (59:49.300)
So I am too very optimistic that it will come.
Lex Fridman (59:53.260)
I'm now personally taking a step into building a startup
Stephen Schwarzman (59:56.420)
first time, hoping to change the world, of course.
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