Tim O’Reilly, evangelist for the digital era, has been described as a web guru and an internet pioneer.
He’s popularized trailblazing concepts such as open source software and Web 2.0, the era that followed the bursting of the dot-com bubble, and ushered in user-generated content and social media.
He’s done it all from his perch as the founder of Sebastopol-based O’Reilly Media, a technical book publishing company that has morphed into an online learning platform and events business — adapting itself to the disruptive changes brought on by a digital world. The company employs around 400 people with offices in Boston; Farnham, England; Oakville, Ontario; Beijing and Tokyo.
Now O’Reilly, 63, is turning to a much broader general audience with his latest project, a book entitled: “WTF? What’s the Future and Why It’s Up to Us.” In it, he takes what he has learned from some 40 years in the tech world and applies it to the challenges facing our economy and society, where artificial intelligence, robots and big data are changing our lives.
O’Reilly doesn’t fear the future. He writes: “Instead of using technology to replace people, we can use it to augment them so they can do things that were previously impossible.”
In an interview at his Oakland home, O’Reilly covered a wide range of topics: his business, weaning ourselves from Wall Street’s influence on our economy, sexism in the tech culture, and why he thinks ride-hailing business Uber has been over-hyped. The transcript has been edited for clarity and brevity.
Q: You are more bullish on artificial intelligence (AI), robots and big data transforming our economy than some others. Why is that?
A: I don’t know if everybody is bearish. There is a wide range, from people who are very worried to people who aren’t. I am actually bearish for the prospects of our economy in a way a lot of people aren’t. I think we are thinking about AI wrong. We are living in a giant robot already. How do you find out about things? Through Google, through Facebook, through Twitter. There are these vast systems that combine algorithms and people. In some sense we are living in the AI, and it’s a prototype AI... Right now I’m optimistic about the subject of jobs. What I’m not optimistic about are the moral values of business.
You realize that our financial markets also are in an algorithmic system with an objective function, which is to maximize shareholder value. We actually just created our own rogue AI. The reason it is the most important one is because Google and Facebook and all the other AIs are answerable to it. That’s why in some sense the financial markets are the master AI.
Q: Let’s look at the role of financialization, for example, at Uber. Its current market value of $50 billion appears to be derived from future services years down the road such as driverless cars and transporting in the wholesale market. But you are a skeptic.
A: I spend a lot of time on Uber in the book. If you actually understand the business model of Uber and Lyft, you realize how fatuous much of the analysis is of the impact of driverless cars on these platforms. Why have they been able to be so much more effective than taxi cabs? The reason is they are using part-time drivers supplying their own cars, which means the number of cars they have scales automatically to meet demand. When there’s a lot of demand, there are many more cars. When there is not much demand, there are fewer cars. Their expenses go up and down. Now imagine they have all autonomous cars on the road. They have to have enough cars to meet that peak demand. You see these statements that they won’t have to pay drivers anymore and the cars will be fully utilized. No, the cars will be very lightly utilized because they have to have enough cars for peak demand. It only works if those autonomous cars belong to someone else who will take on that risk. If they put the cars on their balance sheet, they are going to have lower utilization, they are going to have all the costs, and the business will be actually worse.
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