--:-- [Theme music fades out]
--:-- Annie Minoff: Welcome to The Journal, our show about money, business, and power. I'm Annie Minoff.
--:-- Megan Bobrowski: Thanks for having me on the show, Annie.
--:-- Annie Minoff: Hundreds of top AI researchers recently found themselves in an unusual position. They were getting personalized messages from one of the tech industry's most famous people, Meta CEO Mark Zuckerberg. His pitch? Come to Meta. He's sort of become Meta's recruiter-in-chief.
--:-- Megan Bobrowski: That's right. And in some cases, people didn't even believe it was actually Mark Zuckerberg, because why would you, right? I mean, can you imagine the CEO of this company reaching out to you?
--:-- Annie Minoff: I mean, fair. Yeah, right? Zuckerberg is on a mission, to win over AI's brightest minds, to supercharge Meta's AI efforts.
--:-- Megan Bobrowski: Do we know what's in the message? Is it just like, hey, I'm Mark Zuckerberg, Can we get coffee?
--:-- Annie Minoff: I don't know exactly what the messages say, but generally once people do respond and, you know, are conversing with him, he invites them to his homes, either in Palo Alto or South Lake Tahoe, for a meeting, and then they can go meet him and, you know, sort of talk about this.
--:-- Megan Bobrowski: We do know that he is offering some people up to $100 million to come join his company. Holy cow.
--:-- Annie Minoff: Zuckerberg's offering these sky-high salaries because for him and for Meta, the stakes are really high. Whether Meta keeps its position at the top of the tech world could hinge on how Zuckerberg's recruiting targets respond.
--:-- Megan Bobrowski: Welcome to The Journal, our show about money, business, and power. I'm Annie Minhoff. It's Thursday, July 3rd. Coming up on the show, Meta's fallen behind in the AI race. Can it catch up?
--:-- Annie Minoff: Tech companies, from Google to Microsoft to Meta, are betting big on AI, wagering that AI supremacy will be the key to their future success.
--:-- Megan Bobrowski: And AI is already peppered across many of Meta's products. You can ask questions to an AI assistant in Facebook Messenger. AI technology helps moderate content on Instagram.
--:-- Annie Minoff: And in some countries, you can get AI customer service on WhatsApp. But Meta's ambitions for AI are even bigger than that, especially when it comes to advertising.
--:-- Megan Bobrowski: AI can be used to really advance its ads business. At its core, Meta is an ads business. And AI is already being used in some cases to optimize these ads to better target them.
--:-- Annie Minoff: In some cases, it's being used to actually make the ads not entirely from scratch, but it can make alterations to the ads. It can turn photo ads into moving videos.
--:-- Megan Bobrowski: So this is a big, big opportunity for Meta. If they can make their ad business even better than it already is, they stand to make a lot more money from companies who want to advertise and reach people on their platforms.
--:-- Annie Minoff: And they're already scary good at targeting ads. I'm like, yes, I do want that skirt. You are correct. Exactly.
--:-- Megan Bobrowski: So imagine if these ads were 10 times more effective. That's essentially what Meta thinks it can do. And so that's where they're trying to go.
--:-- Annie Minoff: Central to Meta AI plans is its flagship large language model called Llama. That's where all this technology comes from essentially right. So you have the chatbots, you have improved advertising.
--:-- Megan Bobrowski: What is powering all these things? That's this model called Llama. And it's kind of a play on words for large language model. Oh, I just got that. So that's why it's called Llama. Yeah.
--:-- Annie Minoff: Meta debuted Llama in February of 2023. This was in the feverish months after OpenAI had rolled out ChatGPT, kicking off an AI arms race.
--:-- Megan Bobrowski: Tech's biggest players vied to develop the most advanced, capable models. And Meta was right there in the mix. How did the release of Llama go? I mean, I think it was a big deal.
--:-- Annie Minoff: Meta was one of the first companies to sort of open source this technology, meaning they opened it up to everyone. They're like, hey guys, we're here as well. We are in this game. Here's our version.
--:-- Megan Bobrowski: But since Llama's debut, Meta and its model have fallen behind their AI peers. That became clear in April. This was supposed to be a big month for Meta. The company was hosting its first ever AI developer conference.
--:-- Annie Minoff: All right, welcome everybody to LlamaCon. To coincide with the event, they were planning to release the biggest, most advanced version of Llama yet, called Llama Behemoth.
--:-- Megan Bobrowski: The problem? Behemoth wasn't ready. Here's Zuckerberg on stage at LlamaCon.
--:-- [Audio clip of Mark Zuckerberg speaking]
--:-- Mark Zuckerberg: We have the pre-train of the Behemoth is done, and we're working on the post-training, but even just kind of getting it...
--:-- Annie Minoff: The biggest one, the most powerful one, they realized early on they're not going to be able to release this in April.
--:-- Megan Bobrowski: So Meta is putting a lot of these resources and compute and data into making the biggest model better. And they're not seeing results. They're not seeing the improvements that they want to see that would justify how much money they're spending on it.
--:-- Annie Minoff: So they're spending billions of dollars on this thing, and it's not better enough than the old models. And so they decided they can't release it.
--:-- Megan Bobrowski: Behemoth's release date was delayed from April to June, and then delayed again. It's now expected to be released in the fall, or even later.
--:-- Annie Minoff: According to my reporting, researchers and engineers inside Meta worried that Behemoth's performance wouldn't live up to expectations.
--:-- Megan Bobrowski: Senior Meta executives blamed the team behind the latest model. A Meta spokesperson declined to comment.
--:-- Annie Minoff: Instead of releasing Behemoth, Meta released two smaller versions of the Llama model. But those releases also didn't quite go to plan.
--:-- Megan Bobrowski: The problem emerged when Meta submitted one of its smaller models to what's known as a benchmark test.
--:-- Annie Minoff: It's really hard to know how good is a model. What does that mean? What is it good at, right?
--:-- Megan Bobrowski: And so this is a big question in the AI industry is like, how do you rank these things? How do you know? How do you tell who's number one?
--:-- Annie Minoff: And so there's this whole ecosystem of third-party tests that test these models and have rankings for which ones are better.
--:-- Megan Bobrowski: The test that Meta submitted its model to is called Chatbot Arena. Different companies submit their models. And they're pitted against each other, almost in like a battle.
--:-- Annie Minoff: So what happened was Meta submitted a version of this model to Chatbot Arena that was optimized to do well on the test.
--:-- Megan Bobrowski: It was not the same version that they submitted to the general public. Interesting. So they sent the model to AI arena that was like specialized for these AI cage matches.
--:-- Annie Minoff: And then they served everybody else a different model. Yes, and so this is what happened. People find out about this.
--:-- Megan Bobrowski: And people view of the model kind of goes down right. Because in their minds Meta has gained the system to try to be better than it is.
--:-- Annie Minoff: Zuckerberg acknowledged in a podcast interview that the model Meta submitted to Chatbot Arena was optimized for the test.
--:-- Megan Bobrowski: The delayed release of Behemoth and the debacle over Chatbot Arena laid bare an uncomfortable truth for Meta. It was behind.
--:-- Annie Minoff: Meta currently is one of the top tech companies in the world. If Mark Zuckerberg can't figure out Meta's AI problems, Meta could lose a lot of relevance here.
--:-- Megan Bobrowski: So Zuckerberg knows he needs to turn things around. What's his plan to do that? So Mark Zuckerberg decides there's a problem here. We need to solve it. And he's going to hire his way out of this.
--:-- Annie Minoff: How Zuckerberg's recruiting blitz is going? That's next.
--:-- Megan Bobrowski: To tackle Meta's AI problems, Zuckerberg has announced a new team. He's calling it Meta Super Intelligence Labs.
--:-- Annie Minoff: The new division will house existing teams, like the one that makes the Llama model. Plus, a new team focused on developing even more advanced LLMs.
--:-- Megan Bobrowski: And the guy leading this whole thing is one of Zuckerberg's new hires. Tell me about Alexander Wang. Who is he?
--:-- Annie Minoff: He's the CEO of this AI startup that is not itself building these large language models and this technology.
--:-- Megan Bobrowski: But what they do is they label the data that goes into the models. So they're almost like the picks and shovels of the AI industry. Got it.
--:-- Annie Minoff: Mark Zuckerberg hopes that Alex Wang can kind of turn things around at his company.
--:-- Megan Bobrowski: In an internal memo, Zuckerberg called Wang, quote, the most impressive founder of his generation.
--:-- Annie Minoff: To bring him on board, Meta shelled out $14 billion for a stake in Wang's company, making him one of the priciest hires of all time.
--:-- Megan Bobrowski: The new team still has a lot of seats to fill. And to help in his recruiting efforts, Zuckerberg and his team have put together a list.
--:-- Annie Minoff: It compiles all of the top AI researchers in Silicon Valley. It's everyone who he thinks is going to be able to help him turn around his company's AI efforts.
--:-- Megan Bobrowski: And what kind of people are on this list? Yeah, so the types of people who are on this list, they typically have PhDs from schools like Berkeley or Carnegie Mellon or MIT.
--:-- Annie Minoff: They've typically worked at places like OpenAI or Google DeepMind. They're usually in their 20s or 30s.
--:-- Megan Bobrowski: And it's such a small community that most of these people know each other. And they're talking to each other about the fact that they're all on this list and trying to figure out if they should go to Meta or not.
--:-- Annie Minoff: A lot of things factor into that decision. Of course, there's the money, which for some could mean a $100 million pay package.
--:-- Megan Bobrowski: But there's also the glory. Many researchers want to be at the company where the big breakthroughs happen.
--:-- Annie Minoff: And some are choosing to take their chances with Meta. So far, the company's announced 11 new hires for its superintelligence team.
--:-- Megan Bobrowski: Several from OpenAI, two from Google DeepMind, and one from Anthropic.
--:-- Annie Minoff: But not everyone is taking Zuckerberg up on his offer. According to my reporting, OpenAI co-founder Ilya Sutskaver got an offer, but didn't take the bait.
--:-- Megan Bobrowski: So for the people who are not biting, why not? Some of the people are getting counteroffers. They're getting counteroffers to stay at their current job.
--:-- Annie Minoff: You know, Mark Zuckerberg is the one who's publicly out there recruiting these people, but, you know, certainly this is not a new thing.
--:-- Megan Bobrowski: There is this talent war that has been going on for several years in Silicon Valley. And, you know, we do know for a fact that OpenAI, for instance, has been offering people counteroffers Tuesday.
--:-- Annie Minoff: Really seems like the real winner here are these AI researchers playing these offers against each other.
--:-- Megan Bobrowski: Yeah. OpenAI's CEO, Sam Altman, addressed Meta's hiring efforts at an event recently.
--:-- Annie Minoff: So it's like, OK, Zuckerberg is doing some new insane thing. What's next?
--:-- Megan Bobrowski: Earlier, he'd said that he was happy that his best people hadn't left for Meta.
--:-- Annie Minoff: It's not clear yet whether Zuckerberg's hiring push will ultimately turn things around for Meta.
--:-- Megan Bobrowski: What is clear is that the company is pouring money into AI. It's planning to spend up to $72 billion on capital expenditures this year alone.
--:-- Annie Minoff: Largely on their AI development. So that includes, you know, acquiring all the hardware they need to build, the stuff.
--:-- Megan Bobrowski: It also includes powering these data centers, these huge data centers where they actually train the models.
--:-- Annie Minoff: And now will also include the salaries that they're paying people.
--:-- Megan Bobrowski: Let's say that Zuckerberg fails in this recruitment effort, this recruitment drive, and Meta does not catch up on AI.
--:-- Annie Minoff: What would that mean for this company? It's not immediately existential for Meta. They're a huge company that brings in billions of dollars in advertising revenue.
--:-- Megan Bobrowski: Where this could become a problem for Meta is years down the line, if other AI companies are able to be more successful and are able to implement ads of their own, Meta could lose ground in the ad space and it could be a big problem for them.
--:-- Annie Minoff: A lot of these tech CEOs believe that AI is going to be a game changer to their business going forward in all aspects.
--:-- Megan Bobrowski: Some CEOs have talked about AI writing code for the company. You know, there's also all the chatbots.
--:-- Annie Minoff: And so if Meta is not on the cutting edge of this, you could see them start to slip down the tech totem pole.
--:-- Megan Bobrowski: That's all for today, Thursday, July 3rd.
--:-- Annie Minoff: The Journal is a co-production of Spotify and The Wall Street Journal.
--:-- Megan Bobrowski: Additional reporting in this episode by Ben Cohen and Berber Gin.
--:-- Annie Minoff: The show is made by Catherine Brewer, Pia Gudkari, Carlos Garcia, Rachel Humphries, Sophie Codner, Brian Knudsen, Matt Kwong, Colin McNulty, Jessica Mendoza, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhi, Jivika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Annie Minoff.
--:-- Megan Bobrowski: Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard.
--:-- Annie Minoff: Our theme music is by So Wiley. Additional music this week from Catherine Anderson, Peter Leonard, Bobby Lord, Nathan Singapak, So Wiley, and Blue Dot Sessions.
--:-- Megan Bobrowski: Fact-Checking This Week by Kate Gallagher and Mary Mathis.
--:-- Annie Minoff: We're off tomorrow for Independence Day but we'll be back with a new episode on Monday.
