Emad Mostaque: AI agents will go mainstream this year, reducing friction to boost profitability, and the future of AI lies beyond transformers | Raoul Pal

AI's rapid evolution promises unprecedented efficiency and profitability across industries, reshaping economic landscapes.

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Add us on Google by Editorial Team | Powered by Gloria Mar. 3, 2026

Key Takeaways

• AI is poised to bring a transformative wave of intelligence across industries.
• The rapid advancement in AI is leading to unprecedented business efficiency.
• AI agents are set to become mainstream, significantly boosting intelligence at no cost.
• The removal of friction in intelligence flow will enhance profitability.
• Electricity generation costs are decreasing exponentially, while AI intelligence is increasing.
• Efficient AI models optimize by minimizing the difference between model complexity and update costs.
• Transformers may not be the future of AI due to their language-based limitations.
• Machines can now communicate directly at the byte level, bypassing traditional coding.
• AI companies have the potential to outperform human teams due to cognitive efficiency.
• AI models process information at speeds far exceeding human capabilities.
• The intersection of AI and solar power is crucial for future economic models.
• The evolving role of AI in reducing economic frictions is reshaping profitability.

Guest intro

Emad Mostaque is the Founder and CEO of Intelligent Internet. He is the co-founder and former CEO of Stability AI, the company behind the Stable Diffusion AI image generator. His work advances decentralized AI systems and open intelligence technologies.

The wave of intelligence impacting industries

• There’s this wave of intelligence just about to hit us it’ll cost basically nothing

  — Emad Mostaque

• AI advancements are reshaping business operations and societal dynamics.
• The impact of AI will be both positive and negative, requiring strategic navigation.

• We just increase intelligence dramatically at every level for zero cost

  — Emad Mostaque

• AI is leading to unprecedented efficiency in business operations.
• The role of AI in enhancing operational efficiency is critical for economic impact.

• I just tried their chatbot askjibby and it’s like you type anything instant response

  — Emad Mostaque

• Understanding AI’s implications is crucial for future business strategies.

The mainstreaming of AI agents

• Agents are gonna go mainstream in every single way possible this year

  — Emad Mostaque

• AI agents will significantly enhance intelligence without additional costs.
• The shift towards AI agents marks a pivotal change in the economy.
• AI’s role in productivity is set to increase dramatically.
• The mainstream adoption of AI agents will transform various sectors.

• We just increase intelligence dramatically at every level for zero cost

  — Emad Mostaque

• The economic impact of AI agents will be profound and far-reaching.
• AI agents are poised to redefine intelligence flow in business processes.

Reducing friction and increasing profitability

• All of those frictions are gonna disappear and you know what frictions are frictions are profitability

  — Emad Mostaque

• The removal of friction in processes will lead to increased economic profitability.
• AI plays a critical role in reducing friction and enhancing efficiency.
• Understanding the link between friction and profitability is essential for businesses.
• The transformative impact of AI on economic processes is significant.
• AI’s role in reducing friction is reshaping business models.

• When it comes to digital points being moved around all of those frictions are gonna disappear

  — Emad Mostaque

• The economic landscape is being redefined by AI’s ability to eliminate friction.

The intersection of AI and energy costs

• The cost of electricity generation is collapsing in an exponential downtrend

  — Emad Mostaque

• Solar advancements are driving down electricity generation costs.
• AI intelligence is increasing exponentially alongside decreasing energy costs.
• The relationship between AI development and energy costs is crucial for future models.
• Understanding this intersection is vital for economic forecasting.
• AI’s growth is closely linked to advancements in energy technology.

• While the intelligence is going exponentially on the upside

  — Emad Mostaque

• The synergy between AI and solar power is reshaping economic dynamics.

Efficiency in AI models

• The most efficient AI’s are the ones that minimize the difference between the two

  — Emad Mostaque

• Efficient AI models balance model complexity and update costs.
• Optimization in AI is driven by minimizing these differences.
• Understanding AI model efficiency is key for technological advancement.
• AI efficiency is a function of update costs and model complexity.

• That’s a function of their update cost the complexity of their model

  — Emad Mostaque

• Strategies for AI optimization are crucial for future development.
• The efficiency of AI models is a critical factor in their success.

The future of AI models beyond transformers

• Transformers are very language based next token prediction

  — Emad Mostaque

• Transformers may not be the future due to their language-based limitations.
• Alternative approaches in AI development are needed beyond transformers.
• The limitations of transformer models highlight the need for innovation.
• Understanding AI architectures is crucial for future advancements.

• Jan Lacun has said that he doesn’t think transformers are the way

  — Emad Mostaque

• The future of AI models requires exploration beyond current architectures.
• The reliance on language-based predictions is a limitation for transformers.

Machine communication evolution

• Machines can talk to machines without code they just go straight to byte level

  — Emad Mostaque

• Machines now communicate directly at the byte level, bypassing coding languages.
• This evolution in machine communication is crucial for AI development.
• The implications for coding and AI interaction are significant.
• Understanding this shift is vital for future AI strategies.

• Code is a translation… but machines can talk to machines without code

  — Emad Mostaque

• The future of AI communication is being redefined by direct machine interaction.
• This fundamental shift impacts how AI technologies will develop.

AI companies versus human teams

• How are you gonna out compete a fully AI company the human has negative value cognitively

  — Emad Mostaque

• AI companies have the potential to outperform human teams due to cognitive efficiency.
• The competitive landscape is shifting towards AI-dominated industries.
• Humans may face challenges in the workforce as AI capabilities advance.
• Understanding AI’s competitive edge is crucial for future business strategies.
• The role of humans in AI-driven industries is evolving.

• We’re the dumbest slowest person on the team

  — Emad Mostaque

• The future workforce will need to adapt to AI’s growing presence.

AI models as information processors

• These models are like sieves that right now they don’t continuously learn

  — Emad Mostaque

• AI models process information at speeds far exceeding human capabilities.
• The technical capabilities of AI models are redefining information processing.
• Understanding AI processing speeds is crucial for technological advancement.
• AI’s potential is highlighted by its ability to process vast amounts of data efficiently.

• The new hardware does 15,000 tokens a second

  — Emad Mostaque

• The efficiency of AI models is a key factor in their transformative impact.
• AI’s role as an information processor is reshaping industries.