In this podcast episode, the speakers delve into the rapid evolution of AI, focusing on OpenAI's latest model, o1, and its impact on startups. With insights from experts at Y Combinator and OpenAI, they highlight how o1 excels at complex reasoning tasks, outpacing earlier models like GPT-4. This advancement opens doors for automation in areas such as chip design and CAD, significantly influencing various industries. The conversation underscores the necessity of thorough testing ("evals") and the use of proprietary data as crucial advantages for startups harnessing these innovations. They suggest that startups with strong technical teams targeting niche markets are poised to reap the most benefits. Additionally, the potential of o1 and future models to transform scientific research and tackle intricate real-world challenges is examined, weighing the risks of job displacement against the chance to liberate people from repetitive tasks.