5 Ways to Make Money From an AI the Government Fears - Ep. #310

Speaker A: The most powerful AI ever released to the public was online for only three days. Three. And I had a chance to play around with it, but then the United States government sent a letter, and the company that built it shut it off worldwide in a matter of hours. Not throttle down. We're talking off off. So I'm going to tell you what it was, why the government killed it, and the stuff it did in those three days that honestly scared the crap out of the same people that build it. Then I'm going to hand you five businesses that you can set up right now while this AI model is still dark. So the day that this AI model comes back online, which it will, you are going to be primed and ready to make some money on it. And at the end, I'm going to show you the one signal that everyone out there is getting wrong. They're reading it backwards. People see the word banned and they run away. But I'm going to show you why the word banned is the strongest buy signal the government has ever handed a regular person. Let's dive in. Okay. Let's get on the same page. The company is Anthropic. They make Claude. This is the AI that a lot of you already use, as do I. On June 9, they released a new model called Fable 5. This was kind of a big deal because Fable came off of a tier that they'd been holding back. And this tier is a class of AI models that they were calling Mythos. Think of their normal models like Opus Sonnet, stuff that you're probably familiar with, as the strong stuff that everybody gets. But Mythos was like the locked vault in the back, the one they said was too powerful to hand out. So Fable 5 was anthropic, finally cracking that vault open for the public with safety guard rails bolted on. And that's important. I'm going to get back to that. And you're probably non technical like I am. You've probably never written a line of code. So this matters to you. Because the thing that Fable can do is the exact thing that every online business has been waiting for. But before I get to that, I want to get to the part that reads like a movie. Here's why they pulled fable. So three days after launch, on June 12th, at around 5:21 in the evening, Anthropic got a letter from the US Commerce Department. This letter ordered them to cut off access to Fable 5 for any foreign national. But listen, that doesn't really work. Anthropic can't just check your passport when you log in. And if they tried, that friction would turn almost everyone away. So to follow this order from the U.S. commerce Department, they had no choice. They had to shut down the whole thing for everybody. You, me, paying customers, enterprise, doesn't matter. Even their own employees who weren't US Citizens, they had to shut it down for. But the craziest part about this is that this is the first time in history that the US Government used export controls on an AI model itself. Export controls, like we're talking physical goods. This has never happened before. Here's the kind of company that this AI is now keeping. Export controls are the rules that cover stuff like nuclear material, fighter jets, missiles, and the guidance systems inside them. Or spy satellites, night vision. The whole list of stuff the government decides is too dangerous to let walk out of the country. That's the club that Fable just got drafted into. A thing that you just log into with a password is sitting on the same shelf as weapons. But individuals have never had access to weapons or missiles or nuclear reactors until now. Called Fable. A couple years back, the government banned the best AI chips, the Nvidia chips that everybody wanted. They banned it from being sold to China. So Nvidia just turned around and built weaker versions on purpose so they could stay legal. Of course, they don't want to stop selling to China. So then they went after the machines that built the chips. There's this Dutch company called ASML that makes the one machine on earth that can actually print the most advanced chips. One machine costs over a hundred million bucks and it weighs like 170 tons. And the US government said that machine does not go to China, period. So follow the pattern. First they control the chips, then they controlled the machines that make the chips. And now, for the first time ever, they're controlling the model itself. The AI. They skipped the hardware and went straight for the brain. So here's the part that should make, like, the hair on the back of your neck stand up. This is the second time in history that the government has looked at a piece of software and called it a weapon. The first time set off a fight that changed the Internet forever. And how that fight ended is the whole reason you should be paying attention right now. But I'm going to get to that later. And why? Why did they do this? Well, there's the official reason and the unofficial reason. The official reason is because of a security hole. The government said somebody found a way to jailbreak Fable. Do you remember the early days of the iPhone? You could jailbreak it and, like, have it do Things that Apple didn't authorize. Someone was doing that, allegedly, with Fable, and this was like a trick to slip past its safety rules, its guardrails. And they got worried about what a foreign actor could do with it. I mean, think about it. I like to think about things in upside and downside. Basically, the government was like, it's kind of more downside than upside here, at least in its current state. And that's the whole thing is what these mythos class models like Fable are scary, scary good at, is finding weaknesses in software. So this is awesome if you're defending a company, but bad if you're a bad guy and you want to break into one. So, of course, Anthropic, which, by the way, is privately valued at about a trillion dollars. Okay. They push back hard. They said that. Listen, that jailbreak that you heard about was narrow. And other public AI models can already do the same thing. So yanking a model that are used by hundreds of millions of people over one alleged jailbreak is a massive overreaction. Now, of course Anthropic is biased. Of course they're saying that they know what this means to their bottom line or top line? Both. And the timing of this could not have been worse for Anthropic because they're right about to go public. What just happened to SpaceX? That went public, up 40% in the first two days. We're talking to $3 trillion company. Anthropic's licking their chops, hoping for something similar. Terrible timing for them. And I don't know the full politics behind this. I'm sure there were some conversations that went on behind closed doors that nobody will ever know about. But what I do know is the single best AI tool in the world went dark. It had never happened before. And the window to get ready for it to come back swung wide open. Now we kind of know what we're getting, and we can prepare for it. Hey, please subscribe to the channel. Whether you're on Spotify, Apple, YouTube, doesn't matter. It would mean a ton. All right, remember when I said, you know, the first time the government called a piece of software a weapon? Here's how that ended. So back in the 90s, there was a program called PGP. And this program let regular people scramble their messages so nobody could read them. The government freaked out. They classified that software as a munition, the same legal bucket as a missile. And they opened a criminal case on the guy who built it. He was facing literal prison time for letting code leave the country. And how did he beat it? He simply printed the code in a book because a physical book is protected speech. So they were stuck. The government was stuck, their hands were tied, the case fell apart, and they lost. And that weapon they tried so hard to lock turned into the little padlock that you see on every website. It's the whole reason you're able to put your credit card into the Internet at all. So this thing that in the 90s, they called too dangerous to export became the whole freaking foundation of the entire online economy. But let me tell you why I care this much about this model. And again, this is not sponsored. Anthropic does not pay me, okay? This is just Chris Kerner talking here. Here's the one thing that makes Fable different the most, because everything else that we talk about is going to flow from that. So AI you've used so far is smart for, like, a minute, okay? You ask it, it answers. And if the job is big and the context window is what it's called, gets too big, too onerous for the model to handle, it loses the plot. It starts hallucinating. You're like, whoa, what are you talking about? Why are you talking about this? We're over here halfway through the chat, and you're going to be back to babysitting it. But Fable was built to be left alone, right? Like a really good employee. You give it a real job, let's say it has 10 steps to it, and it plans it out. It does the work. It checks its own work, fixes its own mistake, and then it hands you the finished product with a nice little bow on top. And it can run for hours. It did. It can run for days. It can even spin up copies of itself, split the work, and review the copies. And that's the whole game here. The magic is not that. It's just smart. Lots of AI is smart. It's all smart. The magic is that you can walk away, and it'll just do. It'll just work while you sleep, and you can trust the result enough to put your name on it and to sell it, okay? That's why we're here. To sell it. That has never existed before. So if you've tried AI for real work and just watched it quit on you halfway, you're not crazy. That wall is exactly what Fable just knocked down. Here's some receipts. Here's some examples of how crazy this is. So Stripe, you know, giant payments company, they tested Fable, uh, early. They had a code base with 50 million lines of code, and they needed to overhaul it. They needed to update it. And something like this would usually take a whole team of engineers two to four months. Fable did it in a freaking day. One day. That's a real example. Another example, a physics researcher ran it on a hard frontier problem. Now a hard frontier problem is like uh, an unsolved question in physics where our current understanding of physics just fails to get us all the way across the finish line. The frontier problem is something that requires like a huge leap in understanding to solve, AKA a big frickin deal. So Fable got nearly as far in solving this frontier problem in 36 hours as a top competing model got in four days. Okay, a little more gimmicky of an example, but still interesting. Someone had it play a card game called Slay the Spire. And when they gave it a simple memory file so it could just take notes on its own runs of this card game, it started winning three times more often. So it taught itself, it learned mid task and then kept retraining itself from its own notes. That's freaky, that's scary, that's amazing. All of the above, and the example that probably explains the whole reason for the ban in the first place is this thing called a hacking skill test. Okay, this is like a pre employment test that an employer would give to a software developer to, to help them try and expose security vulnerabilities. So the locked down twin of this model, Fable, this version did not have safety filters or guardrails, scored about double what the normal top model scores double. And that reason is the main reason why this thing has a safety version in the first place. It's really why the government got nervous enough to pull it. And the most ironic thing about all this is that this mandate locked out every foreign national. And a country like South Korea makes a huge percentage, percentage of the memory chips that power these American AI models in the first place. So we cut off the exact people building the parts, which I just find hilarious. So the part that you're, you know, you probably came here for is the money. Okay, here's five ideas of businesses that can be built on this one superpower. And for each example, I'm going to show you a real business that's already making money the hard way with employees. So like these are not like wacky off the wall ideas. These are already proven to be working with humans the hard way. The old school way. Right? The 2025 way. Okay, idea number one, legacy code rescue. So there are agencies right now that charge 30 to 70 grand to move one old clunky software system over to something modern. Okay, this is a big problem that companies need solved. And one job could run into the hundreds of thousands easily because a company might have hundreds or thousands of employees and it's just very tedious. And this one job can take a team of engineers like six months to complete. So they're justified in charging hundreds of thousands of dollars. But Fable could do this entire migration on its own. So to find customers, instead of cold calling owners, use tools like BuiltWith or Outscraper or a frigging chamber of commerce website to find businesses that are still running on ancient systems. Then you want to talk to the office manager because that's the person who probably hates the that old ancient system the most and just say, listen, I can get you off your old system in a weekend with zero downtime. The companies that do this today are called modernization firms, by the way. There's a pretty good chance that you watching that you, the person consuming this episode right now, work for a company that uses an ancient system like this. Who's saying that that company, the one you work for today, can't be your first customer? Did you know that 95% of ATM transactions are run on an outdated software system called Cobol Ancient? Tons of million, 100 million billion dollar companies are running on 20 year old software. You don't have to start with a big Fortune 500 company. In fact, I'd advise you to not start with a local company that has 13 employees and needs to migrate from QuickBooks Desktop to QuickBooks Online. Something simple. You won't be able to charge nearly as much, but, uh, you can at least get your feet wet. Idea number two, the overnight turnaround shop. Okay, there's a ton of small to medium sized businesses that are way behind on their books, their financials, and they end up having to pay between 3,500 to 10 grand just to get their books cleaned up. And this is a miserable, tedious job, which is why few people want to do it. Now, using today's AI models before Fable, you'd still have to babysit these transactions and keep training and retraining them and worry that your context window runs out. But with Fable, you could just drop the mess in everything at 5pm all the account statements, bank statements, spreadsheets, everything. And it'll reconcile everything overnight by itself and you can review and deliver it to your customer by 9am, go to bed, wake up, it's done. Um, you know how many Facebook groups there are for bookkeepers that are just turning down what they call cleanup Work because they hate it and they have more important things to do. You don't need to be a bookkeeper. You don't need to have a finance background. Post in these groups that you take overflow cleanup and you have 48 hour turnaround, which is unheard of. You do one of these a week, three grand a piece is six figures a year. Your costs are almost nothing. All right, number three, do you remember my episode with Brett Williams? The design joy guy does like 60 to 80k a month with a design studio, one person design studio. He's charging 5 grand a month per client and he's capped out because he's the one doing all the designing. But Fable could be the team that he never had to hire. It could be your team, your agency team. So find a service, go back and listen to that episode. We'll link to it below. Productize it. People can have one request in at a time. Make Fable do the work. Number four, how about a custom product for every single customer? So we all know that a generic sales email is not nearly as good as a personalized one. Your reply rate will jump 2 to 3x. But companies aren't really doing this for sales emails because with a human, it takes too long. And there are AI tools that will kind of do this for you, but they're not super accurate. I get these emails every day. But with every piece of personalization in your email, your reply rate will go up by a few percent. Right? First name. Great. First name plus business that they own. Even better. First name plus business that they Own, plus city they live in. Awesome. Why not 8 to 12 pieces of personalized information? Fable can do that. And if you don't want to send these cold emails to acquire customers, then you just find a customer, a business customer that has an email list that needs to get more out of it. And almost every business is not fully utilizing their email list or even close to it. So you take their list, their strategy, their process, attach Fable to it, and you can make amazing things happen with their email list. Doesn't need to be a big company. It could be a gym, a med, spa, anything. There's no business too small for this as long as they have emails. Number five, how about digital assets that run themselves? So there are people out there, I've interviewed a lot of them that have little portfolios of small websites that earn, you know, 300 bucks to 3,000 bucks a month each. But they have multiple or dozens of these little digital assets and it really adds up over time. Like directory sites. Right. Being a website landlord now, these portfolios can be a, uh, grind to build and to feed, but Fable can build them and keep improving the winners on its own for days. It can log into Google Analytics, Google Tag Manager, Google Search Console. It could see where the holes are and automatically fix them. It's going to make a lot of mistakes, for sure. It's going to miss a lot of things, for sure. You're going to have to train it. But the training process is so much shorter now. And the work ethic from this model is unlike anything we've ever seen. So what can we do now while Fable 5 is still dark? Don't just sit around and wait. Pick one of these five ideas. Or better yet, pick one of your own, because you're probably going to love that one even more. Pick one niche, pick one offer one landing page, whatever, and start using the inferior models, which are still incredible. I, uh, like Opus 4.8 to start hacking together some of these things and just know that when Fable 5 does come back, it's just going to be easier. But here's the truth of it. If this model got switched off once, it can get switched off again. It can get nerfed. So don't bet your entire life on one AI tool. You always want to test a bunch of different tools. It's going to give you more insight into each one of them individually because you'll have something to compare them against. The AI should be the engine or the gasoline. It's not the car, it's not the company. So the signal that I referred to at the beginning that everyone's reading backwards is when the government wants to slow something down, they regulate it. We've seen it over and over again. They do it with military drones, with nuclear materials, fighter jets, missiles, supercomputers. When they think something can shift the balance of power in the world, they export control it. Same as a weapon. They just did it to a piece of software that you can rent for 10 bucks. The most powerful institution on the planet looked at this tool and said, uh, this is as dangerous as a missile. But individuals have never had access to things as powerful or dangerous as missiles until now. So don't hear the word banned and think, oh, stay away. The truth is the opposite. The US government just did all of your market research for you. They told you in writing that this is the most powerful software ever built. So the only question left is whether you spend this blackout getting ready or whether you find out like two years later like everyone else. Hey, guys, if you're still listening to this, it's probably because you haven't had a chance to take your AirPods out. You're still mowing the lawn, you're still driving, what have you. If you're still here with me, I would really, really love and appreciate a five star review on Spotify, Apple, or wherever you get your podcast. It would mean a lot if you want to go the extra mile. Share this episode with a friend that might have an interest in starting a business. It would mean a ton. Hope you have the best day of your life today.