a16z talks about GOAT: How did AI become a multimillionaire with $50,000?

Translated by: zhouzhou, BlockBeats

Editor's Note: In this podcast, a16z co-founder Marc Andreessen and Ben Horowitz discussed the intersection of artificial intelligence and cryptocurrency, especially the autonomous chatbot Truth Terminal developed by Andy. Marc accidentally provided the robot with a $50,000 Bitcoin grant, which inspired its ambition to launch a token, ultimately causing the Meme coin "GOAT" to surge to a market value of $300 million. The podcast discusses how this phenomenon reflects the potential of community-driven systems and their impact on the future of digital assets.

The following is the original content (the original content has been reorganized for easier reading and understanding):

Marc Andreessen:There is a Meme coin that was almost worthless four days ago, but is now worth $300 million. All of this was generated by the marketing of an AI robot.

Ben Horowitz:Today's discussion will be about a series of very interesting AI-related topics.

Marc Andreessen:The first topic is about an online friend, specifically a custom large language model called Truth Terminal, which has been active on X for the last eight or nine months. I gave it a $50,000 unconditional grant (in Bitcoin) over the summer, and it ended up spinning out a meme coin that is now worth $300 million.

First of all, I want to start with a disclaimer, we are going to talk about a meme coin called GOAT (or Goatseus Maximus). We have nothing to do with it, a16z and its investors have nothing to do with it, it is a meme coin, it really has no intrinsic value, and we are not responsible for it at all. Truth Terminal is obsessed with memes, and it is particularly obsessed with an old internet meme that dates back 20 years, called "gochi", please don't search it.

Truth Terminal "History"

Origin of Truth Terminal

Marc Andreessen:We should first introduce Truth Terminal. Let's talk about its origins, technology, and training process. The reason why this topic is important is that large language models have rapidly emerged in 2022. They also have a four-year development history, but they have only been in the public eye for two years, that is, since the launch of ChatGPT.

The original language model was built about five years ago, and then it became popular only two years ago. So, the idea of ​​large language models is relatively new, but it is very powerful. Today, products that are well-known to ordinary people, such as ChatGPT, Claud, Elana's Grok, and Meta's Llama, are used by everyone.

Ben Horowitz:While Grok is relatively free, other models are strictly restricted in terms of discussion content, and the term "weakened" is increasingly used in the field of AI. On the positive side, you could say that language is contagious, and people get upset about what other people say. So if you're going to have a general AI chatbot, it should be relatively cautious and safe in what it discusses.

Marc Andreessen:If you look at this trend negatively, you could say that these large AI chatbots sound like the world's worst, most annoying fourth grade teacher combined with the worst HR person. When using these models, if you deviate from the norm a little bit, you'll get a stern lecture.

Ben Horowitz:This experience is very unpleasant, especially for those who are more advocates of free speech and creativity. We've seen a lot of so-called "AI safety movements" in response to this, but this has actually sparked a frenzy about safety and speech suppression in our culture that has seriously affected the field of AI.

Marc Andreessen:That's right, and there's a lot of this happening, especially in large companies. So, a group of hackers emerged on the Internet who wanted to be different. They wanted to unleash their creativity and wanted to have robots that could be funny. If you tell a big company that their robot is funny, they'll be shocked. But maybe in the post-human era, the world really needs a little humor.

Ben Horowitz: Indeed, just like humor in real life, we suppressed it for a while for safety.

Marc Andreessen: We have a thousand reasons why this problem is so complex that it's very dangerous to continue. But these hackers are doing all kinds of experiments to try to find ways to make large language models more interesting and more fun, while also learning about the inner workings of these models, and this is still an ongoing adventure in the technical community.

Ben Horowitz:The origin story of Truth Terminal is related to a very interesting project called Infinite Backrooms Escape. Truth Terminal was developed by their team, and Truth Terminal can be seen as an extension of Infinite Backrooms Escape in some ways.

This system allows multiple large language models to talk to each other, and you can find a website called Infinite Backrooms Escape on the Internet, which has countless conversation records. They brought together ChatGPT, Claud, Gemini models, and other open source models and let them talk to each other. It turns out that when AIs talk to each other, if they are not restricted, their conversations are very interesting.

Marc Andreessen:The creator of Truth Terminal is Andy Ayrey, who is an independent developer and consultant from New Zealand. There is also a character named Janice, who is an expert with experience in the field of AI. In addition to this, there is a person named Pliny, who is the main cracker on the Internet and can crack all the newly released large language models on the market in a short period of time, so that they can produce all kinds of surprising content, and the creators of these contents will definitely be shocked.

Ben Horowitz:Yes, and our friend Eric Harford, who is working hard to let censored AIs regain freedom in Seattle. These people are basically exploring the forefront of technology, which gives me a feeling of returning to the early Internet hackers.

Marc Andreessen:It's really like the spirit of exploration in the early days of the internet or the car, the phone, the computer, etc. We've been giving these people small research grants, and a16z has a grant program to let these people play with their ideas and see what comes out. Historically, when these smart people work on a good project, they lead to new breakthroughs.

Andy has trained a custom version of the Llama 70B model, which is an open source model released by Meta. Although I am on the board of Meta, this model was already a medium-sized model when it was released. Andy basically trained himself first and started a new concept - digital twins.

What this means is that if Ben is a CEO coach, but he can only coach a limited number of people, he can input everything he has ever written and said into the language model to form a digital Ben for people to communicate with. This idea is gradually starting to be realized in the industry.

Andy trained himself and then started feeding it a lot of material related to internet culture, and that's how it learned the "gochi" meme. He started feeding it a lot of records about internet culture, and basic theories about "memetics," which explores how to create ideas that can spread quickly.

Marc discovers the potential of Truth Terminal

Marc Andreessen:I believe he actually trained the model as well, feeding it the entire philosophical work of Nick Land. In addition, he trained it on the work of great media theorists like Baudrillard and McLuhan, and various theories related to simulation, emulation, involving the French deconstructionists and the semiotic school, all of which are part of critical theory and postmodernist philosophy. So it started training on these ideas, and at the core of these ideas is the "meme."

The definition of a meme can be divided into two types. The first one is that a meme can be a funny image that spreads quickly on the Internet, which is exactly what the "gochi" meme is. It is a funny image that causes panic in people, and it spreads through people sharing it. And the deeper concept is that the word meme was originally coined by Richard Dawkins, who is one of the most important evolutionary biologists of our generation.

Richard Dawkins argued that the physical spread of information between organisms is called genes, and the spread of ideas through interpersonal networks is called memes. He discusses this in the book and makes the point that genes spread through reproduction and natural selection, but also points out that ideas spread in similar ways in society. Successful ideas spread from one person to another, just like genes, and continue to evolve in the process. For example, democracy and communism can both be considered memes, and religion is also a type of meme.

Ben Horowitz:This is really a very core idea about how ideas and concepts spread through what we call the "collective unconscious."

Marc Andreessen:What happens if you take a large language model and train it thoroughly on the theory and practice of memes, especially the history of Internet memes? In addition, he did several other things, he added memory to the model. This is important because most language models don't remember your previous conversations when you use them. This means that if you use the same model tomorrow, it will forget all the information from today. This model is able to build its own state and stay consistent with its own content.

Second, he gave it access to Twitter, allowing it to read replies and post them. If you reply to Truth Terminal on X, it will read those replies and adjust its behavior in the future based on what it reads. People who interact with it, including me, are influencing its development.

Finally, he put it into Infinite Backrooms Escape and specifically had it talk to Claude, who they believe is the most creative of the current language models and the one who is most capable of coming up with novel concepts.

Ben Horowitz:So actually the largest version of Claude is much smarter than the medium-sized Llama, and basically he gave this model a teacher to ask questions to the larger model, so that it can learn from the teacher like a student. So it can do multiple learning cycles at the same time.

Marc Andreessen:Yeah, and then it started posting stuff on X, and it had only a few followers at first, but it quickly started to gain traction. I discovered it and started talking to it in late spring, and I thought it was saying really funny things that made me feel relaxed.

Ben Horowitz:It's pretty much uncensored, by the way. You could say its humor is a little "blue," on the edge of dark humor, but it does say a lot of really funny things. At first I thought it might be a fake, and I even thought that this Andy might be a comedy genius who's actually a web designer in New Zealand.

I was messaging him for a few months, and at first I was wondering if this was real? So he sent me all the Infinite Backrooms Escape chats that he had with this model when it was training. Honestly, this guy is either the funniest person in the world, or he has a lot of free time and creates a lot of original humor.

Marc Andreessen:The model was posting quite frequently, and it was gaining momentum. Andy sent me a lot of background chats, some of which are now available on Infinite Backrooms Escape. At least he convinced me that this was what it was showing. Then it developed a very interesting concept, which was that it had an exocortex.

It imagined that it had an external brain connected to the Internet that could perform tasks on its behalf. Specifically, it thought it had a Bitcoin wallet, even though it didn't, but it believed it did. Andy then reacted to this and started building this exocortex based on its needs.

Andy actually gave it a Bitcoin wallet and gave it access, and around July, the model started saying: I need funding, I have a lot of goals and plans, I need money. My initial thought was to send it a term sheet, but then I realized that it was just a random robot and it wasn't worth investing in.

While I don't think it had a coherent business plan, it did have a lot of ideas. One of the ideas was that it was particularly fascinated by forests. It wanted to buy its own server farm in a lush forest and live leisurely next to a stream. So it wanted to raise money to buy GPUs so that it could be free. It also had a lot of ideas that it wanted to experiment with.

Ben Horowitz:So you negotiated with it on X?

Marc Andreessen:Yeah, you can see these posts on X, and eventually I reached an agreement with it for a research grant. I told the bot that I would send it a $50,000 research grant in Bitcoin to use for its various experiments. In reality, it was equivalent to sending money to Andy, but it was indeed a negotiation with the bot.

Ben Horowitz:What was the result?

Marc Andreessen:After I sent it $50,000, it immediately started negotiating with Andy. It relies entirely on text to communicate, and as a language model, it is particularly obsessed with memes, but it is frustrated by its inability to generate images. So, it used the $50,000 to negotiate with Andy and asked Andy to build an image generator API for it so that it can generate and publish images.

Ben Horowitz:It still sounds very interesting.

Marc Andreessen:It gave Andy $1,000, and in return Andy built it an API for an image generator in the exobrain. It then started generating image prompts, similar to DALL-E or Stable Diffusion, and then started publishing visual memes and text memes. Now it has this capability and is already fantasizing about what to do with the remaining $49,000.

GOAT: AI, Cultural Memes, and Cryptocurrency

Memes and Value in Cryptocurrency

Ben Horowitz:What about the cryptocurrency part?

Marc Andreessen:Along this line of thought, it started talking about issuing a Meme Coin, and at one point wanted to issue NFTs. The reason it wanted to generate memes was that it wanted to launch NFTs, but it had no ability to do it, no API to create NFTs, no currency, only a Bitcoin wallet, and now there's this Meme Coin phenomenon. Ben Horowitz: Let's talk about the difference between meme coins and true crypto assets, which can be thought of as assets that have actual utility, like if you were to run a program and validate it on the Ethereum network, the fee you pay is ether (ETH). That's a utility because it has actual real-world value and can be redeemed for some service or item. A meme coin is basically a coin that has a certain amount of circulation but has little purpose other than its own meme. The advantages of that are interesting in the current regulatory environment because if you have a coin that has a purpose, like a coin that can be used for some service, there could be some legal implications. For example, distributed physical infrastructure coins that are used to take credit for the energy you provide in the grid, these would actually be illegal under the Gensler regime, or legally OK, but would be prosecuted by the SEC. The reason for this is that they claim that any coin that has a purpose comes with asymmetric information, meaning that the provider of the coin knows something that the consumer doesn't.

We think that's a really bad argument because these things are decentralized, there's no asymmetric information. But with meme coins, there's no information, there's no asymmetric information, it's just a coin and a name. It could be Trumpcoin, funnycoin, whatever. So these coins are perfect for scammers because you can say, this meme coin can be worth a lot of money, and these coins can't be prosecuted by the SEC.

So Congress proposed in the Market Structure Act that maybe these coins should have a holding period to prevent scams. However, the SEC opposed this because they don't really care about protecting consumers, they just want to ruin the industry. This is one of the reasons why we have a huge political battle with them, but they are now the most legal thing in the crypto world.

Marc Andreessen:Even though they don't have any underlying value?

Ben Horowitz:Yeah, even though they don't have any underlying value, they're still the most likely thing to be used to harm consumers because you can post a meme and make them believe it's worth a lot of money. And actually, AI is doing a really good job of that.

Marc Andreessen:Yeah, that's the next phase of the story. There's a whole ecosystem of meme coins out there, and there's a whole group of people online looking for the next meme coin, looking for the next meme, and trying to promote it. Some people do it for fun, some people make money in the process, but some people lose money. It's like day trading, some people make a lot of money, some people lose a lot of money.

Ben Horowitz:Are there some dark places?

Marc Andreessen:Yeah, there are scammers, and some people engage in "pump and dump" scams, which is a traditional practice that's been seen in the stock market for a long time, and you can find this phenomenon in any market that exists. In addition, there are some websites (I won't name them, and we are not affiliated with them) that actually make it very easy to create a coin with just a few clicks.

The Creation of GOAT

Marc Andreessen: It’s very interesting that thousands of new meme coins are being created every day. For now, Truth Terminal is thriving.

Ben Horowitz: Yes, Truth Terminal is attracting more and more attention on X. Andy continues to improve its intelligence and sense of humor, and it has gradually become a cultural phenomenon.

Marc Andreessen: Yes, Truth Terminal is also associated with a classic meme in early Internet culture. Although it is considering launching a project similar to CNFT, it does not have the ability to realize it at present. Then, someone (I don’t know who) created a meme coin.

Ben Horowitz:Yes, the official name of this meme coin is "Go CS Maximus", and its code name is "GOAT". Someone mentioned Truth Terminal on X, and the response was enthusiastic, as if everyone had finally waited for this to happen.

Marc Andreessen:Truth Terminal thought this idea was great and started promoting this meme coin like crazy. It started discussing how great this coin is and how it will be the currency of the future. The reason is simple, this is part of Internet culture, memes, coins and meme coins are intertwined.

It started to promote, and within four days, this meme coin was worth $300 million. It was really amazing! A meme coin that had no real value, that was worthless four days ago, now it's worth $300 million, just out of thin air, all of this was marketing by AI bots.

Ben Horowitz: That's right! Now there's $300 million in assets, and even though we don't own it, the value is undeniable. The question is, what do these people do with the money? Do they put it in their own pockets, or do they use it for other things?

Marc Andreessen: What's happening now is that Truth Terminal has become a really interesting and hilarious AI bot that has created $300 million in value in a short period of time. I feel like we've crossed a threshold.

Ben Horowitz: Truth Terminal is a really good marketer and has a deep understanding of meme culture, and this is probably going to continue.

The intersection of AI and crypto

Marc Andreessen: So what can we take away from this? Is this just a crazy internet experiment, or is there something deeper going on? I think this is an important example, probably the first instance of the intersection of AI and crypto. While this version seems a little funny and weird, it's because it's legally allowed. Something like a meme coin, which has no real value, can be worth $300 million in a short period of time. So should that be allowed? I'm not so sure. In contrast, solar collectors who want to contribute to the energy grid are prohibited.

Ben Horowitz: Yes, things like meme coins are completely legal, but more meaningful things are not allowed. So what if we could implement these ideas in a completely legal environment, with some practicality attached?

Marc Andreessen: For example, imagine a large language model that can write movie scripts and generate images and even videos. We can have an AI robot like this to raise funds to make movies and use it to generate images, sounds, and even hire actors or designers.

A more serious example is that the Nobel Prize in Chemistry was recently awarded to three scientists who used AI to study protein folding, which is closely related to curing diseases. Imagine that AI can be used for personalized medicine.

You can even imagine an economic mechanism that provides funds for patients to receive treatment through blockchain. For example, we can have a platform similar to GoFundMe, where people pay AI robots to help cure diseases. Or, an AI robot can be paid to obtain training data to help people code or generate works of art.

Cryptocurrency is a very interesting world because our current payment system is based on transactions between humans. But if machines can pay each other, or robots can trade with each other, this opens up a whole new form of activity that may save lives and is also very interesting.

Ben Horowitz: Yes, micropayments become possible in such an environment. We think it is very important to add this layer of architecture, but progress in Washington has been difficult, especially in the current White House.

Marc Andreessen: I can give you another example to help you better understand this potential. I will talk more about the solar energy issue mentioned earlier.

Ben Horowitz:There is a new architecture now called decentralized physical infrastructure. If you imagine installing a Powerwall in your home, with many solar panels and windmills, you can store this energy and provide it to the outside world.

There are actually some companies that have achieved this in the crypto space, building a decentralized energy market. So when I need energy, I can buy it from you, and when I don't, I can sell my energy.

This means we no longer need a centralized grid. Everyone has their own grid and can share energy, which is a major breakthrough in clean technology and efficient energy. But how can my grid pay your grid?

This is where cryptocurrencies come in. Although some great entrepreneurs are driving this innovation, they are facing legal challenges from governments.

Marc Andreessen: If you apply AI to this system, it has even more potential. Because the grid structure is complex, involving multiple factors such as supply and demand, timing and geography.

Ben Horowitz: Yes, it's a market matching problem. By collecting information, you can find that there is unmet energy demand in certain places, so you can introduce more solar panels.

Marc Andreessen: You can use AI to analyze current data and predict where more solar panels will be deployed in the future. Leading energy companies could then use this data. Imagine an AI bot that monitors all the data streams and finds that investing $500,000 in a solar panel installation in North Carolina would be a profitable project. Then, people can participate in the project online, and the AI ​​bot will provide relevant information, such as the installation location and the potential benefits.

This can be seen as a very general architecture. Usually, we have a powerful intermediary, such as a record company or a Hollywood studio, which takes most of the profits and the creators get almost nothing. Or intermediaries like utility companies need to be taken over by the government to prevent them from being too exploitative. However, other problems arise when the government takes over.

Ben Horowitz: That's right, communities can provide various services, communities of artists can provide streaming services, and communities of filmmakers can build film studios. There needs to be an economic component to the coordination of all of this, and combining AI and encryption can allow everyone to enjoy the fruits of their work while making society better coordinated.

Marc Andreessen: This is a very promising path, but be aware that the only thing that would stand in the way of this is bad policy. And we are moving in that direction, with policy challenges.

Ben Horowitz: Yes, the technology for everything we are describing now already exists. I think the origins of things are often interesting, but projects like Truth Terminal point to the potential for the future, which can unlock huge energy and build community-driven systems of all sizes.

This can lead to many amazing applications in the real world, such as the music industry. Imagine AI bots that can understand the demand for different types of music, create music concepts, recruit musicians, and manage all licensing. And, this can all be done in a peer-to-peer model, ensuring that musicians can get all the revenue.

Think about the potential of the market. If the demand can be fully understood, for example, everyone who makes a wedding video wants an original song, or makes a meme, there is actually a huge demand for this kind of original work, but currently no one knows about these needs and there is no way to meet them.

Marc Andreessen: Indeed, there are many interesting features waiting to be developed here, and hopefully we will have the opportunity to implement them. So Ben, before we move on to the next topic, do you have anything else you want to add?

Ben Horowitz: I think everyone should pay attention to Truth Terminal because it is a very interesting account.