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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN.
Speaker 2:Today is Friday, 12/12/2025. Just thirteen days till Christmas. We're live from the TVPN UltraDome, the temple of technology The fortress of finance. The capital of capital. Ramp.com, baby.
Speaker 2:Time is money. Save both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. That's right. Death Star post.
Speaker 2:Now it makes sense. It all makes It wasn't a vague post. It was it was It was just early. A preview of a deal that would take shape four months later. Right?
Speaker 2:That's what was happening. Sam Allman, of course, what was this? On GPT five day, August 6, he posted a picture of the Death Star rising on the horizon. Very confusing post at the time. Now we understand.
Speaker 1:Now we get it.
Speaker 2:He was saying, hey, one day, we're gonna have rights to Star Wars properties through this deal with Darth. Of course. Darth Sama.
Speaker 3:I mean,
Speaker 2:people did not like this post at the time. Nikita People
Speaker 1:were asking.
Speaker 2:Saying, you should delete this.
Speaker 1:Just delete it.
Speaker 2:There's time to delete this.
Speaker 1:And the timing the timing was really funny. Yeah. It implied that they were about to release something, you know, so all powerful
Speaker 2:Yeah. It would Yeah. Read it that way. Yeah. Read it as like maybe they're going on the offensive against the the Death Star or the Empire, which is Google.
Speaker 2:They're gonna attack Google. Yeah. There were a number of different ways to to to read into it, but it was
Speaker 4:It felt It was confusing, and then and then it and then
Speaker 1:it was I I feel like people were somewhat let down Yeah. Right, by by GPT five.
Speaker 2:Yeah. People were
Speaker 1:expecting remarkably, that.
Speaker 2:Qualitatively different. That's not what people got. And so the end result was, you know, people just remaining confused. We had a bunch of different takes on it. We think it makes sense now.
Speaker 2:But now, you know, it's even more clear with the Disney deal. But you wrote about the Disney deal. You dug into the deal, and you kinda crystallized your take. So take me through it.
Speaker 1:Yeah. So I some of the stuff I talked about yesterday, but I wrote about it for the newsletter today, tbpn.com. I wrote a hundred and twenty seven days. That's the gap between Sam's the Star Wars Death Star vague post and yesterday's announcement that Disney is investing $1,000,000,000 into OpenAI and giving them a three year license that allows users to generate AI photos and videos of the most popular 200 Disney characters. Most notably, OpenAI is guaranteed a one year exclusive on the IP.
Speaker 1:And while the post in the deal are probably not connected, I think it's funny to imagine that they are. Right before the deal was announced, Disney sent Google a cease and desist letter claiming Google had been violating Disney's intellectual property by allowing users to generate a variety of Disney characters. Many people outside tech seemed shocked that Disney would license their IP in the first place given their history of ruthlessly protecting it. There's a number of examples of Disney coming after kids birthday parties or at least that's how they positioned it. Of course Yeah.
Speaker 1:These are businesses that are using effectively using Disney characters to Yeah. Yeah. I I monetize
Speaker 2:I read your draft and I was like, wait. They sued a child for having a Disney theme No.
Speaker 1:There's two notable examples. Yep. Nuance. One is coming after basically a birthday party service Company.
Speaker 2:Like a business that sells And we will do your birthday party, and then they were selling, and it'll be princess themed
Speaker 1:Well, so what they blah blah blah. It wouldn't they wouldn't directly call the characters that you could, like, rent Oh. The the same names. Yeah. Like, wasn't like Elsa.
Speaker 2:Okay. But it was clearly
Speaker 1:In the reviews, what Disney noted in the reviews, people would call the characters by the Disney Okay. Name. There was also a story of of a father who, wanted to do a Spider Man tombstone for his, like, very young son that passed and Rough. And I think it was the effectively got blocked. It wasn't necessarily directly by Disney.
Speaker 1:But anyways, Disney has long standing policy of of not letting other people. Nightmare.
Speaker 2:If your legal team comes to you and says like, we wanna sue a dead person, like
Speaker 1:it wasn't in a lawsuit Or
Speaker 2:maybe it was a tombstone company.
Speaker 1:They were just saying like, no, you can't make a Spider Man sure. Anyways, many people outside of tech seem shocked Yeah. That Disney would license their IP. But Bob Iger knows that AI generated Disney will happen with or without the company's blessings. Partnering with OpenAI today while setting up negotiations with Google and other players makes a lot of sense.
Speaker 1:Again, I I just expect this, like, cease and desist is the start of a negotiation process in order to get the same type of IP and capability capability ultimately into Gemini. But
Speaker 2:In 2027.
Speaker 1:Not Yeah. Well, and and maybe not. Right? Like, one question I have is Mhmm. They have a one year exclusive.
Speaker 1:Yeah. After that period, does Disney say, okay, you can keep having the exclusive, but you need to pay us, like, a billion dollars a year?
Speaker 2:And at least Google's at the table negotiating. Yeah. Is that what you mean? Yeah.
Speaker 1:Exactly. So the strategic significance of this deal for OpenAI has been broadly underappreciated, mainly because for a company that frequently talks in the trillions, Disney's investment, a paltry 1,000,000,000, just isn't enough to turn heads. But the advantage this deal gives OpenAI from product and distribution standpoint is extremely significant. Per the most recent reports, OpenAI has 20 to 30,000,000 paid users out of a total of 900,000,000 globally. Disney, on the other hand, had a 140,000,000 people visit Disney parks in the last year and a 128,000,000 paid subscribers to Disney plus If you're an adult spending thousands of dollars to take your kids to Disneyland or a Disney plus subscriber, surely you'll pay an incremental amount to OpenAI to extend and personalize your Disney experience.
Speaker 1:As a parent, some of the most magical moments with AI that I've had are simply generate I've talked about this before. I take a real photo of me and my son and I turn it into The dinosaur mode. Generic dinosaurs. Dinosaurs. Dino mode.
Speaker 1:It really brings us both a lot of It's like photos. It's his reaction Yeah. To the picture that I'm getting joy from because he just like absolutely loves it.
Speaker 2:I I had a similar experience where I would I would like take a picture of like you know, we'd create a scene of toys and then we'd say like, make these Lego versions of this or something. But the models got so good at a certain point that I was just like, okay, like, I just I I made his toys look like toys, it just looks exactly like what I made. I was like, I just I need to take a photo. I need, like, more creativity to come up with something remarkable.
Speaker 1:Yep. But So anyways, I think people my household is not into the Disney world yet. Think my kids are just young. Yeah. But I can imagine how excited if you're a Frozen super fan, an Avengers super fan.
Speaker 1:Being able to put yourself, your kids into their world, I think, is gonna be pretty exciting. So having a license to generate high quality images and videos of 200 of these characters creates a temporary but very real differentiation for tons of current and future Chef GBT users, creates a real catalyst to pay. Right? Like, my kids want more outputs. I'm assuming you'll get a handful for free and then you'll have to upgrade.
Speaker 1:Mhmm. And it creates, and it's just gonna be super viral. Right? These videos are gonna be going into family group chats. They're gonna be shared online.
Speaker 4:Yeah.
Speaker 1:I think old I think it's hard to imagine another Studio Ghibli moment in the way that that happened, but you could imagine that this will be getting a lot of attention. Knowing Sam and Josh, they've likely negotiated to get Sora Chat GBT broad exposure across Disney properties both online and offline. And we already know that, select Sora videos will be featured in Disney plus. I think they're gonna be taking a really making sure they're hand selecting those because
Speaker 2:I wonder what that means. I wonder if that means the Apple TV app or the Disney plus app on the phone because on an iPad, on a phone, it feels a little bit more natural. But just in terms of the Star Wars property, there are the original Star Wars films, and then there's Young Jedi Adventures, which is Star Wars for kids. There's even less violence. It's more G rated than a PG-thirteen rated.
Speaker 2:Even with Blue e, a very popular children's show on on Disney, Dawn Disney Plus, there are full episodes that are like a full episode might be, I wanna say, like, eight minutes long, but then there's minisodes that are even shorter. So, like, the short formification is happening within the Disney app already, but I think a lot of parents would have a sort of negative reaction to just
Speaker 1:A feed.
Speaker 2:A feed. Yeah. An endless scrolling feed of short form Sora content. That's gonna be really tricky. It needs to be some it needs it needs a twist.
Speaker 2:It needs curation. They said that there's already gonna be curation, but I wonder how that's gonna roll out.
Speaker 1:Curation, but it could still very well be infinite.
Speaker 2:Yeah. Well, it doesn't need to be infinite.
Speaker 1:Just imagine it could be a everyone.
Speaker 2:Like, you could have like, you could truly have, like, a monthly contest. Everyone prompts to create the most the most incredible Sora videos with Disney IP And allow the kids to
Speaker 1:bet on. Yeah.
Speaker 2:They definitely have to gamble on it for sure. That's that's a done deal. But but you could you could essentially have like a like a film festival that's running and kids submit their generations and then those get
Speaker 1:A film high festival like of seven second videos. I'm sure Hollywood I mean will love that. Back in the No. Get
Speaker 2:in the Vine days, like, the the the creative skill ceiling was incredible.
Speaker 1:Yeah.
Speaker 2:People were doing remarkable, remarkable things with that Yep. With that with that technology, that short form video. They would loop and do all sorts of stuff. I I still believe that there's some really interesting things that you can do with generative systems, with generative AI. And I and I imagine that we will see some cool stuff come out of the Disney partnership.
Speaker 3:But Yep.
Speaker 2:I don't know that I'd want a kid sitting there watching endless slob. Like, that seems rough. Yep. But, I mean, at the same time, a lot of a lot of parents like, yeah.
Speaker 4:That's rough.
Speaker 2:That's great. Because there are parents out there who are like, no. I'm actually just in the market for something that
Speaker 1:Will keep their attention. Today.
Speaker 2:Yeah. Right now, I'd want them to stop crying
Speaker 1:now. Need five minutes to do this thing.
Speaker 2:Or I yeah. Or I just need a babysitter. Yep.
Speaker 1:Anyway, finished it out by saying my long held assumption is that over time, everyday consumers won't pay for LLMs. There will be great ad and commerce supported LMs that provide the monetization to serve great models. But OpenAI's challenge is that even with future hall of famers like Fiji Simo and Denise Dresser on board, Denise is, of course, the former CEO of Slack who's now the CRO at OpenAI. They can't massively scale monetization of the free product overnight. They can't just say, hey, ChatGBT agent.
Speaker 1:Yeah. Create a massive ad platform. Don't make mistakes. And I said, I don't expect those business lines to really begin ramping till the second half of next year, and they need to show continued revenue growth now. Hard to think of a better time for this deal to get done than eleven days into OpenAI's Code Red and right as Sora was about to fall out of the App Store's top 25.
Speaker 1:I looked earlier this week, they were sitting at around 24. And again, as this as this new IP actually, like, rolls out to users, I expect it to go right up back to number one. I said, will the functionality be immediately abused? Yes. Will it create uncomfortable moments for Disney's leadership?
Speaker 1:Yes. Is it a smart move for Disney? Yes. Will OpenAI have to shell out billions to maintain exclusive access over the long run? Yes.
Speaker 1:Will it be worth it?
Speaker 2:I think quite I want to tell you about Julius AI, the AI data analyst that works for you. Join millions who use Julius to connect their data, ask questions, and get insights in seconds. Second, I want to debate you on this idea that it will be abused immediately. I think it's actually really, really hard to abuse these systems. Like, there was the whole the first Gemini model where people would say, make a, you know, a soldier from the nineteen forties, and and it would be a Nazi, but it would be a black Nazi.
Speaker 2:And so that people were very upset about that because it was, like, just made no sense. But I think that the models and the more importantly, like, the reasoning chains that happen. Like, it's very clear that when you go to Nano Banana Pro and you say, you know, take this image and make it Christmassy, it's unpacking that using Gemini as an LLM first. And it's and it's hydrating it into something that's it's actually reasoning about what you asked, even if you just say Christmas mode, Studio Ghibli mode. You know?
Speaker 2:Like, you give it two words, and it actually is clearly hydrating it to a much to a much broader degree. And I think that that reasoning step happens before. And I also think it happens after. So that even if it accidentally generates Mickey Mouse or, you know, someone doing something that they shouldn't be, Mickey Mouse holding a gun or something, then it will detect that and and actually turn that off. Like, it's been Yeah.
Speaker 2:Very hard. The whole like, oh, jailbreak it. I got it to say something crazy. Like, that's like it's just like seems like a thing of the past.
Speaker 4:What do
Speaker 1:think? I just I just trust that the Internet immediately will figure out if you have Yes. But it leads hundreds of millions of people trying to jailbreak it.
Speaker 2:Yes. Yes. Course.
Speaker 1:The other thing that will happen is people using different models
Speaker 3:Yeah.
Speaker 1:That are like already don't have the same guardrails and making it look like they're sore outputs even though they're insane.
Speaker 2:Totally. Totally. Totally.
Speaker 1:Yeah. You're using something like
Speaker 2:open source model that's completely unrestricted. You do something crazy, and then you throw the sore watermark on it just to take a shot
Speaker 1:at and Bopping Sam.
Speaker 2:Little sigh up. Well, what do you think, Tyler?
Speaker 4:Yeah. I was I was gonna agree with Jordy. Like, I think Hey.
Speaker 2:What's this? What's this?
Speaker 4:Oh, yeah. I've just been you know, I got a double jaw surgery.
Speaker 1:Double jaw surgery. And a little bone
Speaker 4:a bit. Yeah. Just trying to get my looks
Speaker 2:fantastic. This is remarkable. I really I really can't hats off to the production team. This is a this is a fantastic new feature to to allow Tyler to look like the absolute how
Speaker 4:I do every day.
Speaker 2:Yes. How you do every day. I love it. Yo. Chad's loving it.
Speaker 2:Oh, it's such
Speaker 4:say, like, yeah, day one, there's gonna be people on x that like easily jailbreak it. I can't
Speaker 5:I can't look at I
Speaker 2:can't take you seriously.
Speaker 4:Just look at us. And then and then they're just gonna post it and then it's gonna go super viral and then you have parents.
Speaker 1:Chad Chad podcast.
Speaker 2:I love it. Fanta, automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk. Okay. Tell me your actual take.
Speaker 4:Okay. Yeah. So so I think, like, day one It always backs up. What what what happened? Day one?
Speaker 4:There we go.
Speaker 2:There we go.
Speaker 4:Okay. Day one, have people who jailbreak it even if it's like one person then it goes super viral next Yeah. And then it's like, oh, Mickey Mouse like shooting a gun Yep. And then it goes viral, parents see it and they're like, okay, my kids aren't gonna be on this because even even if it's like mostly like you're gonna have a ton of backlash where Could be bad backlash. Goes super viral on CBS News or whatever.
Speaker 1:Yeah. No. I don't buy that. I think I think I think it I think it will be very magical and I think that they'll immediately be getting shared in family group chats and Yeah. And you know, between friends and that I think we're maybe underestimate the adult Disney audience Mhmm.
Speaker 1:As well.
Speaker 2:That could go two ways. Adult Disney.
Speaker 1:Okay. Easy, John. But It yeah. It is notable adult mode and functionality are running out around the same time.
Speaker 2:But the Pikachu getting barbecued, is that a violation? Is that something that they wanna stop? If you're Bob Iger and and someone shows you that Pikachu getting barbecued video, would you say, no. No. No.
Speaker 2:I don't want any videos out there of Mickey Mouse getting barbecued?
Speaker 3:What do you think? Do you
Speaker 2:think that crosses the line?
Speaker 1:I think Disney execs, if they saw that in a pre IPO world, would send a cease and desist.
Speaker 2:Wait. What do you mean pre IPO?
Speaker 1:Sorry. Sorry. Pre world. Pre deal world.
Speaker 2:Okay.
Speaker 1:Like, think that I would imagine that anybody that's been creating content like Yeah. That they come after them in the same way that Ferrari if if Ferrari sees you like paint your Yeah. Like Ferrari some crazy color and do donuts, they'll just send you a cease and desist even though that even though you own the car. Yeah. Right?
Speaker 1:They care
Speaker 2:wondering, like, internally, how where do you think the line is? So you think that they would you you think that that, you know, whenever this rolls out, maybe it's already out. I it might be out soon. But let let's just assume it rolls out January. You go to Sora.
Speaker 2:You can generate, you know, Luke Skywalker fighting with Spider Man because those are two Disney properties. Can you have Luke Skywalker cut Spider Man's arm off? Because Luke Skywalker does cut off people's arms in the p g 13 rated Star Wars.
Speaker 1:But
Speaker 2:Spider Man does not ever get cut he never gets his arm cut off because he's more of a PG character. Yeah. Right? So how do you blend those two together? And I'm and I'm just wondering, like, where is the line for the Disney execs?
Speaker 2:Like, where would they draw the line? How do they even think about a framework for holding upholding the brand?
Speaker 1:I think we'll know it when we see it.
Speaker 2:You think so?
Speaker 1:I think it'd be a funny scenario where they only allow violence on Warner Brothers characters.
Speaker 2:But they don't have the rights, but it's just like, oh, yeah, like you can well, they do that in Hollywood. There's some there's some actors who have it in their contracts that they never will lose a fist fight, basically. They'll say, like, you know, you can cast me in this movie, but if we're if I'm fighting up as somebody, I don't lose, we can tie, basically. So you know how you watch a lot of, like, Jason Statham and The Rock and, like, Fast and Furious, and they're, like, bashing you through each other through walls for, like, five minutes, like, this crazy action scene. Then at the end, you're like, oh, like, neither of them won?
Speaker 2:It's like that's because it's in the contract. They don't wanna be they don't wanna be depicted as, like, losers.
Speaker 1:They don't be aura farmed.
Speaker 2:They don't wanna be aura farmed. Exactly. They wanna use graphite dot dev instead. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 2:Justine Moore has taken a victory lap. She's been on this case for a long time. She said, I got roasted by the anti AI crowd for suggesting that IP holders might want their characters in Sora. They insisted that real entertainment companies would never willingly allow their characters to be used in AI slop. Two months later, how the times have changed.
Speaker 2:Fantastic prediction, Justine. Great work. I I completely agree with this take. I think it is interesting how there are there there is just the reality that if you hold IP, you need to exist in the world. You need to exist a lot.
Speaker 2:You can't just stay on the shelf. You can't be the Humphrey Bogart. And yesterday, when when Dylan from Puck was here, I he was mentioning a bunch of old Hollywood references and I was laughing to myself because I know you have not seen Casablanca and you have no idea what he means by get on the plane or Rosebud or any of these references. You're just like, yeah, totally, dude. Yeah.
Speaker 2:Yeah.
Speaker 1:Give me another give me another movie to watch this weekend. Because you told you you tried to get me to you got me to watch The Fugitive.
Speaker 2:And it was good. Right? I delivered.
Speaker 1:Okay. Movies might be
Speaker 2:movies underrated. You heard it here first. Movies, underrated.
Speaker 1:At least in my household. Scroll down here because I wanted to show another Yeah. Post, from Olivia Moore who said, has anyone else noticed v o three has no IP constraints? Prompt Mickey Mouse welcoming you to Disney. Look at this, John.
Speaker 2:Sorry. Yes. I'm pulling up my movies my movies list, which I will read to you in full.
Speaker 1:Anyway, so this was going back this was going on back June 16.
Speaker 2:What's crazy is that this somehow looks this this looked so good at the time and I was like, oh, it's over. It's so over. Like like they can fully do it. And yet this now looking back, this looks washed out. It doesn't have It's like overly saturated or something.
Speaker 1:It looks like a green screen.
Speaker 2:Yeah. Doesn't actually look that good to me anymore and it's because the the goalposts have moved as they always do. Anyway, let me tell you about our daily newsletter, tech analysis, and news daily. Get our daily op ed, top headlines Daily. And best posts from the timeline every every something, every day in your newsletter.
Speaker 2:It still cuts off. We're working on it. I'm just messing with the team here. Anyway, numeral.com. Compliance handled.
Speaker 2:Numeral worries about sales tax and VAT compliance so you can focus on growth. Numeral.
Speaker 1:Bill Peebles fired Do
Speaker 2:you wanna hear do you wanna hear my full movie? Okay. This is the full list you can pick and and Tyler, you can play along too. First up, The Godfather. Have you seen it?
Speaker 2:No. Wow. Okay. Taxi Driver.
Speaker 1:Never heard of it.
Speaker 2:Star Star Wars. You've seen Star Wars?
Speaker 1:Seen couple.
Speaker 2:Raging Bull. No. Scarface.
Speaker 1:Yes.
Speaker 2:You've actually seen Scarface? Yes.
Speaker 3:Okay.
Speaker 2:Full Metal Jacket.
Speaker 1:But I didn't study it.
Speaker 4:I watched
Speaker 1:it but I didn't I didn't take Full
Speaker 2:Metal Jacket. No. Die Hard.
Speaker 3:Die Hard. Like ten
Speaker 1:years ago.
Speaker 2:You see Die Hard. Goodfellas. No. You gotta watch Goodfellas. This is so good.
Speaker 2:Reservoir Dogs. Maybe. Falling Down?
Speaker 1:Never heard
Speaker 2:Falling of Down is a good one. Pulp Fiction.
Speaker 1:Seen it.
Speaker 2:Okay. Heat.
Speaker 1:Heard of it, haven't seen
Speaker 2:it. Casino?
Speaker 1:Never heard of it. Braveheart? Heard of it, haven't seen it.
Speaker 2:You've never seen Braveheart? Wow. Okay. Hackers? No.
Speaker 2:Apollo 13. No. Contact. No. The Fifth Element.
Speaker 2:No. Saving Private Ryan. No. You haven't seen Saving Private Ryan. Wow.
Speaker 2:Fight Club.
Speaker 1:Seen it.
Speaker 2:You've seen some Fight Club. Thank goodness. The Matrix.
Speaker 1:Seen it.
Speaker 2:American Psycho.
Speaker 1:Seen it.
Speaker 2:Gladiator. No. See, now we're in the 2,000 so we're we're we're more likely. But the fact that you haven't seen Gladiator, I mean that's a fantastic film. You gotta watch Gladiator.
Speaker 2:Lord of the
Speaker 1:Rings. At least one.
Speaker 2:What do you mean at least one? You mean at least once? You've watched the full trilogy at least once?
Speaker 1:No. I'm saying I don't think I've watched the
Speaker 2:full a random movie in the trilogy?
Speaker 1:Probably the first one.
Speaker 2:I don't The first one, it's a it's act one. You didn't finish the Lord of the Rings. It's the three act structure. You can't just watch one and call it a call it
Speaker 1:I I guess I can.
Speaker 2:It's ridiculous. Minority report. No. 300. No.
Speaker 2:You didn't see 300? That's crazy. Troy, The Departed, The Prestige. Just you're just I'm not making things up. No Country for Old Men.
Speaker 1:I think I think I've seen that one.
Speaker 2:The Dark Knight.
Speaker 1:Seen it. Iron Man. See, now this is this is Now we're getting into we've passed, you know Yeah. The one. Joke that I've only seen three now.
Speaker 1:I've seen a handful.
Speaker 2:But A few handfuls. Sicario? Have you seen Sicario?
Speaker 1:No. But I like Okay. That's good one. I like the You gotta watch Sicario. I like the the I know the the memes from it.
Speaker 2:Yeah. We gotta we gotta run through the rest
Speaker 1:of The chat is the chat is getting angst.
Speaker 2:There's so many good ones here. Iron Man, Gran Torino, Inception, The Social Network, Tron Legacy, The Town, Drive, Enemy, Wolf of Wall Street, American Sniper, Edge of Tomorrow, John Wick, Interstellar, Nightcrawler, Mad Max, Fury Road, Ex Machina, The Martian, Sicario, The Revenant, Dunkirk, Blade Runner, twenty forty nine, Ready Player One, Ad Astra, Joker, Tenet Dune.
Speaker 1:I I have seen have seen John I have seen John Wick. Funny story. I was on a flight back from London. Yeah. And it was, like, effectively 3AM.
Speaker 1:The whole plane's dark Yep. And Keanu Reeves just walks by
Speaker 2:my seat. Wait. In the actual plane? Yes. That's wild.
Speaker 1:Just walks by and it was like Wait.
Speaker 2:And you were watching John Wick on
Speaker 1:the No. I wasn't.
Speaker 2:Oh, okay.
Speaker 1:Okay. Yeah.
Speaker 2:But he
Speaker 1:felt like He walks by and imagine seeing like Keanu, like, you're just you're
Speaker 4:on an overnight flight. That's
Speaker 1:very It's dark in the plane and he just like walks by. Think he was using the restroom. And I did I ended up watching it after that
Speaker 3:Yeah.
Speaker 1:To be to be fully immersed. Anyways
Speaker 2:I think Sicario would be the pick. If you if you have one movie to watch tonight, I would say Sicario.
Speaker 1:Okay.
Speaker 2:It's a great one. I I know I know that you're gonna like it in the same way that you like The Fugitive with Harrison Ford. Great. Figma. Think bigger, build faster.
Speaker 2:Figma helps design development teams build great products together.
Speaker 1:Bill Peebles Bill Sora Peebles. Meets Disney. He's gonna be pure magic dream come true to be working with them. Let's give it up for Bill. Bill Peebles.
Speaker 2:Yeah. Seriously. What a what a great partnership for him. Especially because, you know, there's there's a lot of people that have been, like, pointing to, like, Sora falling out of the App Store charts. Like, Sora is not doing that well.
Speaker 2:And it's like, that might be true, but Sora is still the number one generative AI video app. Right? It's kind of like winning by default. So it's not like you should cut your losses. It's not like you've been beaten.
Speaker 2:Like, it's clearly still a category that you wanna go after. And so why not go get a big partnership? Why not keep iterating to get to breakout success, to get to product market fit? Keep the model's gonna get better. You know the research team's working on that.
Speaker 2:And now you have more IP, and then the actual the actual implementation of the app is gonna get better. So Congrats to Bill Peoples on the partnership. Job's not finished.
Speaker 1:Yeah. It's already I mean, it's back up to 15 already probably just based on the news. Even though I don't know that all this functionality is actually available yet. More importantly, hero thousand presents says 5.2. How about 5.2 cold ones with the boys?
Speaker 1:It's a beautiful Thursday night, folks.
Speaker 2:It's hilarious.
Speaker 1:This latest model is state of the art on beer bench, which is if I crack it open, it makes a fizzy sound and I go, hell yeah. Very good. Tyler Cowen says, chat GBD five point two also knows exactly which are the best Paul McCartney songs and it can write a poem in Spanish as good as the median Pablo Neruda poem.
Speaker 2:Tyler Cowen loves loves the GPT models. He's obsessed.
Speaker 1:Have you He's the most obsessed and I yet I've never seen somebody make the claim that he was one shot.
Speaker 2:That's true. That's
Speaker 1:true. Just pretty
Speaker 2:He's he's he's using responsibly.
Speaker 1:Yeah.
Speaker 2:The I I haven't I haven't really had a chance to play too much with the new model. Is it already is it already rolling out? Yeah. I am on 5.2 already, 5.2 Pro. I I was working through.
Speaker 2:I I hit 5.2 Pro with a question because I wanted to know. So it it does feel like opening eyes a little bit of the the coming out of the trough of disillusionment potentially. You know, the the vibes have been really bad with the 1,400,000,000,000.0, but the global economy has not collapsed. And the market is rallying. And there were, in fact, not an Enron scenario.
Speaker 2:None of the big tech companies blew up. Like, we've we've moved on. Now maybe it happens, but in general, it seems like, you know, expectations have sort of reset. And now we're going into 2026. It's kind of a new game.
Speaker 2:But, you know, OpenAI still has a really dominant consumer business. And it what looks like it's shaping up to be an oligopoly in the enterprise side or the b to b side. And so nothing is a five alarm fire. They're in the code red, but it feels like they will emerge stronger from it. The big question is, you know, how will Sam Altman be perceived?
Speaker 2:Will he be one of the greatest founders of all time, founder CEOs? And I was and I was trying to benchmark him. You know, let's say that let's say that he he, you know, lands the plane, gets out of the code red, Baja blasts his way into the public markets. And he winds up, you know, being this founder CEO of a multitrillion dollar consumer tech company. He's in the bag seven.
Speaker 2:It's be it's the bag eight. How will he be remembered? And I was and I was and I was thinking about how unique his ownership structure would be. Because for most CEO, founder CEOs, if they get the company out into the public markets at a trillion dollars or something like that, they typically own a ton. Steve Jobs is notably, at various times, not a major shareholder.
Speaker 2:At one point, he owned 5,500,000.0 shares out of almost 1,000,000,000 shares. So he had half a percent or point 6% in 2011. That's that's reported here. Bill Gates, on the other hand, absolute
Speaker 1:An absolute dog.
Speaker 2:Point 7% ownership of Microsoft. So, you know, at a trillion dollars, that's a 137,000,000,000. That's a lot of ownership. Alphabet, Google, obviously, both of them became some of the richest people in the world today. The economic ownership is only around 3%, but still significant.
Speaker 2:Jeff Bezos is at 14% with Amazon. Jensen is at 3.7%. It's 3.77% of NVIDIA. Of course, it's been a thirty year trip. Elon Musk, almost 20% at Tesla, 19.7%.
Speaker 2:Meta Well, it's interesting that at things 13.5
Speaker 1:Given given how much dilution OpenAI has had to take and all the shareholders
Speaker 2:starting as a nonprofit.
Speaker 1:There's well, that. But there's a world where if a company had just been formed as a c corp Yeah. Back in the day in 2015, and they had just raised a bunch of Rounds. Rounds back to back to back, and there was a bunch of co founders initially, would Sam actually have rumored what he's gonna get something like 7% was the proposal? Sure.
Speaker 1:Would he have would he have less than that in that scenario? Maybe. Could get topped up. Maybe. I don't think I don't think in the fullness this will end up working out that badly for Sam.
Speaker 2:Yeah. Yeah. It is interesting. Because just like like being being founder CEO of a of a trillion dollar consumer tech company, that usually is good enough to get you 50,000,000,000, $100,000,000,000. But we'll see where it lands.
Speaker 6:Yep.
Speaker 2:I'm not I'm not quite sure what will happen.
Speaker 1:But Did you wanna run through this post from Greg?
Speaker 2:I'd love to. But first, I'm gonna tell you about ProFound. Get your brand mentioned in Chatuchiki Tea. Reach millions of consumers who use AI to discover new products and brands. Greg Kamrat, who, of course, is the president of Ark Prize and the creator of some fantastic TBPN trading cards.
Speaker 1:That he's been printing out.
Speaker 2:He's been printing out. We were shocked by this. Thank you, Greg, for the for the tireless work on that project. It's very fun, very cool. And you have such an important day day job.
Speaker 2:I'm I'm shocked we were shocked when we found out that you were making something cool on the on the side. But he says the jump to reasoning models will studied for years. They are still wildly underrated. Arc AGI one has been out for six years. GPT 5.2 is a five order of magnitude scale up, and yet it still lands at 12%.
Speaker 2:Add a bit of reasoning and performance immediately jumps.
Speaker 7:And so you
Speaker 2:can see the ARC AGI one leaderboard. GPT 5.2 is only at 12%. But when you get to low, medium, high, extra high over in the reasoning models or you switch to the pro models, you're getting up to 90% on Arc AGI. Of course, the test of that any human can do and yet AI has struggled with for a long time, not for long. AI is starting to make headroom or make headway on the Arc AGI leaderboard.
Speaker 2:Very impressive results. Opus 4.5 didn't do too poorly either. Croc four, of course, is also doing well. Who else is and has Gemini not benched on this yet, or have they not been they not been focusing on this? I'm not exactly sure.
Speaker 2:But I'm excited to see what happens with Arc AGI v3. It feels like we're not even showing those scores yet because I think that none of the models are scoring at all yet. They're not even finishing. And I think it's an optimization problem to be the least number of moves. But it is interesting because the model card that Sam shared had a caveat around the OpenAI models.
Speaker 2:I sent this to Tyler last night asking him about this because so so Sam Altman shows OpenAI GPT 5.2 thinking versus GPT 5.1 thinking, and there's huge step ups across SWE bench, GPQA, Diamond, Frontier Math, AIME, RKGI one, RKGI two, GDP val. Like, there's there's jumps of various sizes all over. And then there's also Anthropic and Google. Gemini three Pro and Claude Opus 4.5 are also benchmarked there. And, of course, when you read into it, OpenAI's GPT 5.2 thinking wins on almost all these benchmarks, except for the advanced mathematics Tier one through three and Tier four, where Gemini three Pro wins, actually.
Speaker 2:But down at the bottom, there's a little caveat, and it says, OpenAI models were run with maximum available reasoning effort. So these models now have the ability to reason for longer. You can just throw more time at them. But I was asking Tyler, it's weird because this makes it look like open ass cheating Anthropic and Google are doing more of a buy the book approach to their benchmarking or whatever. But Tyler was sharing that actually all the labs now run their models at maximum reasoning effort because they all want to maximize the benchmarks.
Speaker 2:Right? Well, yeah.
Speaker 4:I mean, you're gonna run on on your best model.
Speaker 2:Yeah. It's just highest number. It's just weird to put that caveat for you and not your enemies. You know? Isn't that weird?
Speaker 4:Yeah. I I I don't know. That's just, like, standard practice. Like, they're not gonna benchmark on the on their worst model.
Speaker 2:No. No. No. No. They're not.
Speaker 2:But but it but if anything you would
Speaker 4:wanna You could put say
Speaker 1:just just put a note for all the different
Speaker 2:All the labs all the labs are running on maximum available reasoning effort. We we we're just like that. I don't know. Yeah. We should build a model that reasons for a hundred years.
Speaker 2:What happened? Oh, he's back in chat mode. I'm missing it. This is insane.
Speaker 1:You didn't even notice the difference.
Speaker 2:No. Because when when I'm talking to Tyler, look at him as I look at his face. I don't look at the screen.
Speaker 1:I'm gonna jump in here. So Jay
Speaker 3:Yeah.
Speaker 1:Jay Bold, t a r d, over on X says, Oracle is a train wreck. How did they not disclose these delays on the call two days ago? And Bloomberg is reporting that Oracle delays some data center projects for OpenAI to 2028. Oracle has pushed back the completion dates for some of the data centers it's developing for OpenAI to 2028 from 2027. The delays are largely due to labor and material shortages, said the people, asking not to be identified.
Speaker 1:Oracle has been working to deliver over on a $300,000,000,000 contract to supply the computing power necessary to train and run OpenAI's models since it was inked this summer. Even with the delays, the timelines for the project in The US remain ambitious for sites that are set to become some of the largest in the world. I remember when this news broke, we talked about how Oracle was basically saying, like, we're gonna build AWS in And two that just felt like, you know, applaud the the sort of ambition. But I think some of these delays, labor shortages, etcetera, are were predictable.
Speaker 2:Mhmm.
Speaker 1:Bloomberg says our take on on Oracle's massive bet on AI. Oracle's AI bet has fast become a bubble barometer. Little bub talk. Oracle spokesperson said in a statement that the company remained confident in its ability to meet its obligations and future expansion plans. There have been no delays to any sites required to meet our contractual commitments and all milestones remain on track.
Speaker 1:Site selection and delivery timelines were established in close coordination with OpenAI. And they said, we have ambitious achievable goals for capacity delivery yada yada yada.
Speaker 2:The whole market's down today. I wanted to wear a white suit but it is not the
Speaker 1:day Did for
Speaker 2:you see Broadcom? We celebrated yesterday. It seemed like the earnings but
Speaker 1:And they revealed their mystery $10,000,000,000 customer.
Speaker 2:Anthropic. Anthropic. Didn't people think it was OpenAI? I think I think at the time everyone thought it was OpenAI. But Broadcom is selling off significantly down 10%.
Speaker 2:Really really bad really really bad news.
Speaker 1:Yeah. So Broadcom revealed during a September earnings call that it had signed a customer that had placed a $10,000,000,000 order for custom chips.
Speaker 2:Mhmm.
Speaker 1:Tan said yesterday that Anthropic had placed an additional $11,000,000,000 order with Broadcom in the company's latest quarter. So at the time originally in September, Broadcom didn't say who it was, but yesterday, Haktan revealed. So anyway
Speaker 2:So it's selling off because of questions about Broadcom's sales forecasts, contracts backlog and anticipated future margins despite reporting a record $18,000,000,000 in sales and strong profit growth. That that's what we latched on to from that hilarious post of the crying bear. Well, the bear's not crying now. The bear is rich because the bear was short. The bear's that's funny.
Speaker 2:The bear is excited. Margins appear to be one area of concern. Chief executive Haktan said Broadcom's fast growing AI business has lower gross margins than other areas. Its forecast for non AI revenue in the first quarter was flat. So the revenue mix is changing.
Speaker 2:The margin mix is changing. And so some analysts cast the stock move as an overreaction and noted it came after a 75% run up this year so far. We can expect it to recover, wrote a team from Citi Research that reiterated its buy rating on the stock, saying that upside from the AI business will continue to push up earnings estimates. I wonder why the AI business is so much lower margin. Like we've seen like over the past few years, NVIDIA has actually expanded margins and grown their their gross margins significantly during the AI boom.
Speaker 2:Broadcom doesn't seem to have the same leverage as NVIDIA, and so they've been struggling, unfortunately.
Speaker 1:Meanwhile, Apollo, according to compound two
Speaker 4:four Yes. Eight
Speaker 1:casually predicting zero returns to the S and P 500 over the coming decade. They put this out yesterday. A note on expected returns in public equities over the coming years. The historical relationship between the S and P 500 forward PE ratio and the subsequent subsequent ten year and annualized returns show that investors should expect to get zero return in the S and P 500 over the coming decade. They have a chart below.
Speaker 1:They're like, hey, can we interest you in some private credit opportunities where
Speaker 2:You know or do you know the other option? What's the other thing you wanna invest in when the stock market isn't looking so good?
Speaker 1:Puts?
Speaker 2:Land. Land. Land. And we have Mike Swan on the show.
Speaker 1:We're land maxing.
Speaker 2:The the the the owner of Swan Land Company, we saw him advertising some land in the Wall Street Journal. We said we gotta get him on the show, we did. So we're very excited to talk to him in fifteen minutes. All about land and his business. I'm I'm
Speaker 1:I've talked about this. Land, I think, is the most criminally underrated
Speaker 2:Yeah.
Speaker 1:Asset Yeah. By new generation of investors. Nobody wants to nobody wants to make steady returns land maxing. Yeah. They wanna they wanna hit the thousand x
Speaker 2:Exactly.
Speaker 1:Meme coin. Yeah. They wanna hit the the 1% poly market, whatever it is.
Speaker 2:Well, let me tell you about Adio, the AI native CRM. Adio builds, scales, and grows your company to the next level. There is the timeline has been in turmoil over Klein, and some posts are getting deleted. So I don't even know if we're gonna be able to pull these up.
Speaker 1:Here's what happened.
Speaker 2:Yeah. Break it
Speaker 1:down. Somebody at Klein commented on a picture from a hackathon Yes. And said, imagine the smell. Yes. People thought he was making thought it was like a racist comment.
Speaker 1:Yes. People started piling on. Yes. The CEO initially defended him and said, I'm like, I know I I can vouch for this guy. Yeah.
Speaker 1:He's he's he's fine. People kept piling on. The CEO ended up turning around and said, actually, we've let this guy go.
Speaker 3:Yeah.
Speaker 1:And then, now the CEO is getting even more more hate on from letting the guy go. And then, now he's deleting the post and so and so maybe the guy maybe ends up rehiring. Feels like damage is pretty done at this point. I'd imagine, you know, I'd imagine this this engineer that was formerly a Klein Sure. Finds a new op.
Speaker 1:I I it'd be hard to imagine him saying like going back and saying like, oh, I'm actually gonna rejoin Yeah. The team that I
Speaker 2:have a brief screenshot saved a little bit. I think
Speaker 4:I can I think I can read it? Some of it.
Speaker 2:This is the CEO of Klein. It says, a few days ago, a tweet from our head of AI offended a lot of people, and it definitely offended a lot of people. There's an article in the Hindustan Times in India. Like, this is, like, newsworthy in India. Well, I don't believe his original tweet was attended intended to be offensive.
Speaker 2:His response, refusing to apologize does not reflect my position or Klein's. We recognize this caused real pain and that deserves blah blah blah. And so the rest is cut off. Lulu says this stinks. She's not a fan of it.
Speaker 1:Yeah. She says, mistakes. Everyone makes them. Sometimes things fall flat. It it's happened to me and it also happens to people much smarter.
Speaker 1:Yeah. But betraying people or principles is in a different category. It's more preventable and less excusable. Cowardice doesn't happen by accident. In the case of Smellgate, it could be argued that Posh made the first kind of mistake overlooking how the joke could be interpreted.
Speaker 1:But then the CEO inarguably made the second kind of mistake. And that one to me is much worse. Nat Eliason posted, a friend of the show, I'm not sure if he's in the chat today, said considering the unanimous reaction to the CEO's post saying that he will fight that he that they let go of the engineer. Nat says, will he fire himself now? Only seems fair.
Speaker 1:So I don't know. I don't know if it'll get that far, but certainly
Speaker 2:It's just the entire company gets fired.
Speaker 1:Fire ception.
Speaker 2:Just everyone gets fired? No. The funny thing is that I feel like I know about this joke is from a bunch of Indian friends who who seem to have, like, been making it on anonymous accounts years ago in some sort of funny attempt to, like, reclaim the the formerly racist joke.
Speaker 1:Lulu says, when you cave to the mob instead of standing by your employer, now people are more mad at you than before. And she quotes Yeah. Your worst sin is that you have destroyed and betrayed yourself for nothing.
Speaker 2:Yeah. It's really it's really odd because it feels like although it was going viral, like, this just feels like something that would have blown over. At least, like, take a breather, take a week or two, just, like, you know, take some time off to think about the action. It feels very reactive to do it, like, within a twenty four hour news cycle, which, like, can just amp up so quickly and then fall out. Okay.
Speaker 2:I guess I guess the Hindustan times is not very serious. It's the gawker of India, apparently. So so don't so don't worry about it. I guess I'm wrong on that. Thanks for fact checking me, Suraj.
Speaker 1:Frank says is responding. Trump in an interview yesterday said that he would consider eliminating taxes on gambling winnings.
Speaker 3:This is so crazy.
Speaker 1:Prediction markets be like, never mind, it is gambling.
Speaker 2:It is gambling. Because they always use trade. They always use like, it's not it's not bad.
Speaker 1:You trade Trade on future.
Speaker 2:Trade trade on sports, trading on this. Like, wait, actually.
Speaker 1:Yeah, it is interesting to think about, you know, creating incentives for taxes
Speaker 2:on tips? I remember that was like a a thing during the during the election. Are did that ever go through? Because I remember we were joking. We're like, oh, we're gonna tip everyone here.
Speaker 2:I think everyone made that joke at some point. Apparently, it is a glorified tabloid. So, you know, don't don't if you're an American CEO and the Hindustan time just put you in the truth zone, let it be known that maybe take it with a grain of salt. Anyway, I I this this just feels like a whole series of of people. It's like it's like Trump likes being edgy and funny, making jokes, and he says, I'd consider it.
Speaker 2:And then watcher guru takes it and turns it into a viral thing. And then somebody dunks on it, they get viral points. And it it all feels deeply unserious and and not really, like it's gonna reshape the market anytime soon. But it certainly is a funny headline.
Speaker 1:Yeah. I think I think a lot of people would hope that it'd be like, no. We're not gonna create tax incentivized gambling in this country. But Yep.
Speaker 2:He didn't. Stranger things have happened.
Speaker 1:Stranger things have happened.
Speaker 2:What does this classical theist says? Increasing the incentive to gamble as an answer to the affordability crisis is nothing short of diabolical. That is, yeah, very, very rough. I don't know. Yeah.
Speaker 2:It seems like the thing you should tax extremely highly. It seems like the best thing to potentially tax. Arthur Pigu in shambles, the Pigouvian tax creator. Are you familiar with Pigouvian taxes? No.
Speaker 2:It's basically this idea that, like, you can use taxes to shape, behaviors, incentives. So if you don't want people to drive gas guzzling cars, you just increase the tax on gasoline. Instead of trying to make something illegal or promote something or incentivize something, you just shift the tax to be tax on tobacco. People smoke less, in theory. Of course, cigarettes, they're addicted.
Speaker 1:I mean, California has done this so aggressively with gasoline in the state.
Speaker 2:And arguably, it's worked. I mean, there's a ton of electric cars in California. Like, there really are less gas guzzling cars. So if that was the goal, mission accomplished, right? It kind of worked.
Speaker 2:But what do think? Like, producing I
Speaker 4:was going to say, isn't that like the idea behind the land value tax?
Speaker 2:Yes, a little bit. It's not quite the same. Land value tax is more
Speaker 4:Because you're incentivizing people to develop the land.
Speaker 2:Yes. Yes. But I think of Pigouvi in Texas more as like the opposite, like the negative. Like, it's a way to disincentivize negative externalities, like negative behavior. But I but I suppose it works both ways.
Speaker 2:Anyway, this yeah. This was interesting. This scoop from Alex Kantrowitz. Did you see this? So Alex Kantrowitz from, Big Technology, a great name.
Speaker 2:He says, scoop OpenAI CEO Sam Altman gathered news leaders for lunch in New York City on Monday. He told them enterprise AI will be a massive priority for OpenAI in 2026. And Greg Brockman says, yeah, enterprise AI is gonna be a huge theme for 2026.
Speaker 1:What's And this tracks with hiring Slack CEO as CRO. Right?
Speaker 2:Totally. Yeah.
Speaker 1:Yeah, the question is, what does this actually look like, right? I think a lot of people are using ChatGPT at work. They're using a variety of LLMs. Does it mean
Speaker 2:you're going after Harvey? That's the big question. Harvey seems to be doing really well. And I think of law firms as enterprises. And I think of law firms as potential targets for an OpenAI enterprise plan.
Speaker 2:Am I crazy? Yeah.
Speaker 1:I don't I don't think you're crazy.
Speaker 2:Okay.
Speaker 1:There was a funny post here from Peter, Gurnis. This is, not a not a super serious post, but I think it's worth reading. He says, last quarter, I rolled out Microsoft Copilot to 4,000 employees. $30 per seat per month. 1,400,000 annually.
Speaker 3:Mhmm.
Speaker 1:I call it digital transformation. The board loved that phrase. They approved it in eleven minutes. No one asked what it would actually do, including me. I told everyone it would 10 x productivity.
Speaker 1:That's not a real number, but it sounds like one. HR asked how we'd measure the 10 x. I'd said we'd leverage analytics dashboards. They stopped asking. Three months later, I checked the usage reports.
Speaker 1:47 people had opened it. 12 had used it more than once. One of them was me. I used it to summarize an email I could have read in thirty seconds. It took forty five seconds.
Speaker 1:Plus the time it took to fix the hallucinations. But I called it a pilot success. Mhmm. Success means a pilot didn't visibly fail. The CFO asked about our ROI.
Speaker 1:I showed him a graph. The graph went up and to the right. It measured AI enablement. I made that metric up. He nodded approvingly.
Speaker 1:We're AI enabled now. I don't know what that means, but it's in our investor deck. A senior developer asked why we didn't use Clot or ChatGPT. I said we needed enterprise grade security. He asked what that meant.
Speaker 1:I said compliance. He asked which compliance? I said all of them. He looked skeptical. I scheduled him for a career development conversation.
Speaker 1:He stopped asking questions. Microsoft sent a case study team. They wanted us to feature a they wanted to feature us as a success story. I told them we saved forty thousand hours. I calculated that number by multiplying employees by a number I made up.
Speaker 1:They didn't verify it. They never do. Now we're on Microsoft's website. Global enterprise achieves forty thousand hours of productivity gains with Copilot. The CEO shared it on LinkedIn.
Speaker 1:He got 3,000 likes. He's never used Copilot. None of the executives have. We have an exemption. Strategic focus requires minimal digital distraction.
Speaker 1:I wrote that policy. The licenses renew next month. I'm requesting an expansion. 5,000 more seats. We haven't used the first 4,000, but this time we'll drive adoption.
Speaker 1:Adoption means mandatory training. Training means a forty five minute webinar no one watches, but completion must be tracked. Completion is a metric. Metrics go in dashboards. Dashboards go in board presentations.
Speaker 1:Board presentations get me promoted. I'll be SVP by q three. I still don't know what Copilot does, but I know what it's for. It's for showing we're investing in AI. Investment means spending.
Speaker 1:Spending means commitment. Commitment means we're serious about the future. The future is whatever I say it is as long as the graph goes up and to the right. 134,000 likes on that one.
Speaker 2:What a long post, you go. That's fantastic. I was thinking about the fact that we now have a data point for agent force revenue, and we also have a
Speaker 1:data Okay.
Speaker 4:You have
Speaker 1:to for take that with a grain you have to take that with a grain of salt because Salesforce is or they are the greatest to ever do enterprise sales. And we do know that they're selling AgentForce as like an add on.
Speaker 2:Cool. Yeah. I'm going with this, baby.
Speaker 4:Okay.
Speaker 2:But first, I'm gonna tell you about Restream. One livestream 30 plus destinations. If you want a multistream, go to restream.com, baby. Okay. So my point was you can actually get to a dollar per token because we've we've also seen that leak of how many tokens they're generating.
Speaker 2:Remember? And everyone was like, oh, Benioff's, like, not generating that many tokens. And so you can see that he's probably making the most dollar per token of anyone in the industry because you can look at other companies and see how many tokens they're generating, their rough revenues, and we can work through all the math. Tyler, have we done this with with Anthropic or OpenAI? Because we were looking at the at at, like, rough revenue token, how much they've done it.
Speaker 4:Yeah. I I think I I tried doing this at some point. It's just so hard because they they don't, like, break it up in a nice way. Like Yeah. I think at some point, Demis said they're doing, like, over a quadrillion a month.
Speaker 4:Sure. But then what is the revenue? We don't know. Yeah.
Speaker 2:We don't know for
Speaker 4:Yeah. Gemini. For OpenAI, like we think we knew their
Speaker 2:Yeah.
Speaker 4:API Yeah. Token count. Yeah. And then the the revenue was leaked, it was overall revenue wasn't broken up. Yeah.
Speaker 4:So you can maybe estimate it based off subscription percentage.
Speaker 2:Still still. I I feel like we gotta we we we gotta put together the agent force numbers to figure
Speaker 4:But out agent force must be because, mean, I I think the leaked number was, 3,000,000,000,000 or something. It was, like, a very low amount.
Speaker 2:And they're making, like, half $1,000,000,000. Yeah. So they're they're printing. And that must be, like, 99.999% margin too. Right?
Speaker 2:Like, how much does it cost to generate a trillion tokens? Like, $10 or something? I don't know.
Speaker 4:Well, yeah. I think we also picked this too because we wanted to get on the OpenAI
Speaker 2:Yeah. Yeah. Yeah. Yeah.
Speaker 4:Gaming club. So if you do the batch tokens and, like, the the four o model, it's, $20.
Speaker 2:Can you imagine? Banyash is sitting there, like, yeah. COGS $10.10 dollars. I mean, half 1,000,000,000. No.
Speaker 2:I don't know. The yeah. Yeah. Tokens are the two page views, the new eyeballs. But we should we we should actually get both of those numbers in a spreadsheet and see if there's any other numbers we can pull through because I would love to see them.
Speaker 2:In the meantime, let me tell you about Gemini three Pro, Google's most intelligent model yet, state of the art reasoning, next level vibe coding, and deep multimodal
Speaker 1:understanding. What are you laughing at? A post went very viral a couple days ago. Someone's saying, come on now. Because Tubi has a movie out called The Grinch That Stole b I t c h e s.
Speaker 1:Okay. And to be responded and said To
Speaker 2:be responded.
Speaker 1:Tis the season. Tis the Incredible response That's weird. From the to be team.
Speaker 2:Yeah. And Did you see this sorry. Did did you see this chart crime from is from Riley. Riley says, put this on a shirt. So OpenAI launched a merch store called supply.openai.com.
Speaker 2:Very fun. Bunch of shirts in there. You can get basketball. You can get a bunch of cool but then, Riley Riley is sort of dunking and saying, like, put this on a shirt. It's like how crazy the financials are over at OpenAI.
Speaker 2:And I and I get it. Like, the merch store probably not the biggest priority while you're in Code Red on your core product. Like, that's a legit concern. But, but the Financial Times, like like, what what are we doing with this chart? This is a crazy, crazy chart.
Speaker 2:So first off, this says OpenAI's estimated balance sheet, but then it has revenue on here. And, like, revenue doesn't go on the balance sheet. So, like, what what are we doing? And, like, it's, like, I'm just so confused by this. And so total cost of cloud compute, that's the that's the purple bar down there.
Speaker 2:COGS also don't go on the balance sheet. So, like, both of those don't belong there. Then the red dots are new equity fundings that they're planning to do, and that should go on the balance sheet because that's assets that come in. But then free cash flow, that comes from the cash flow statement. So it's just like, I I this is such a chart crime from anyone who has respect for the three statements.
Speaker 1:This is the financial
Speaker 2:This is the Financial Times. I have a lot of respect for the Financial Times. I love the Financial Times, I was just very shocked. I mean, it's more like OpenAI estimated financials. I don't know.
Speaker 2:It's it's sort of an interesting chart. It's also it's also just very weird how there's, like, bars and dots. And it's like, what does the bar mean? What does the dot mean? Like, it's like the dot feels like it's more of like I I don't know.
Speaker 2:It's a very confusing chart. It does tell an interesting story, though, which is that they're projecting revenue increasing while costs also increase. And they're going to have to raise more money. And eventually, they're going to lose a lot of money. There's going to be negative free cash flow for a number of years.
Speaker 2:Then eventually, they will turn positive. I don't know. It seems like it's a bold five year plan. We've heard about this. It's funny to see it laid out like that, but ultimately, they're, you know, like, whether or not they deliver is sort of immaterial to their merch efforts.
Speaker 2:Anyway
Speaker 1:OpenAI What? Is not gonna like the post I read after you talk to me about Cognition.
Speaker 2:Cognition, the team behind the AI software engineer, Devin, crush your backlog with your personal AI engineering team. What, what post are you pulling?
Speaker 1:Jacob Allordi says he has no tolerance for AI and finds the whole conversation around it so effing boring. He would not like the show. This is hilarious. He says, I would much rather kiss on the beach and read a novel and be sunburnt. Most most pick me moment of It's a crazy lie.
Speaker 1:Of the year?
Speaker 2:It's a crazy lie.
Speaker 3:This is
Speaker 1:But it resonated. 91,000 people agree.
Speaker 2:This is hilarious. Yassine Madid, who makes technical deep learning tutorials, says, yo, Jacob, come on my live tomorrow. We're going to be review this paper. It's almost as good as the stuff you mentioned. See you tomorrow, buddy.
Speaker 2:And it's it's a surprising effect of negative reinforcement and LLM reasoning. That's a very, very funny
Speaker 3:K.
Speaker 1:One more post before We bring it we we start landmaxing. Sachs says, God blessed us again, shocker, a thousand year American empire. And open source intel is reporting a major deposit of rare earth and critical minerals has been uncovered in Utah, which the Wall Street Journal calls the most significant critical mineral reserve in The US. Okay. We did it again.
Speaker 2:We did it again.
Speaker 1:If you're a nation without, you know, a lot of Yeah. Critical minerals, it's probably a scale issue.
Speaker 2:This is actually a good transition to our next guest, Mike Swan. Before we bring him in, let me tell you about Privy. Privy makes it easier to build on crypto rails, securely spin up white label wallets, sign transactions, integrate on thing on chain infrastructure all through one simple API. We will bring in Mike Swan, the managing owner of Swan Land Company. Mike Swan,
Speaker 1:how are you doing?
Speaker 2:Welcome to the show.
Speaker 7:Doing well, gentlemen. How are you?
Speaker 2:Merry Christmas. You so much for taking the time to come talk to, two, I don't know, probably random people.
Speaker 1:What was the what was the timeline here? We saw the ad. Was it Monday?
Speaker 2:Yeah. It was the weekend edition of The Wall Street Journal in the special mansion section. And we saw the Swan Land Company advertisement. And we were like, we've wanted to invest in land. We think that there's a lot
Speaker 5:of people in our audience.
Speaker 2:I've might be interested in
Speaker 1:in land. I've talked on the show before that I think the new generation of investors, they want to buy crypto coins. They want to be trading options. They want to do NFTs, all this stuff. They want to
Speaker 2:But maybe they should just be buying land.
Speaker 1:And I feel like land is just kind of overlooked Yeah. But certainly not by you. So we were excited to have you on the show to give us kind of an update on your business Yeah. And how how investors are approaching the asset class Yeah. Lately.
Speaker 7:No. Thank you for having me on, gentlemen. It's I've really I've really been looking forward to joining you and and sharing a little bit of what we see in our in our arena out here in the West as far as ranch properties, investment properties in the Rocky Mountain West, which we primarily serve. Basically, right now, what we're seeing is is is we always have that, you know, land in the Western Part of United States isn't going out of style anytime soon, especially Montana. We saw an explosion with the with the rise of of the the Yellowstone phenomenon and and how that, that really hit us out here.
Speaker 2:Wait. Was it actually driven by the show? The show really
Speaker 7:caused people to think about it? Amplified what we were already seeing out here in our in our market, but it certainly didn't it didn't slow down the process of the interest in in Rocky Mountain Ranch property. So, of course, you receive the phone calls that, you know, talking about the train station and all of the entertaining aspects of what Rip and that show went through. But that's obviously Hollywood doing its best to portray our part of the world in a very unique and and unrealistic light.
Speaker 4:But Yeah.
Speaker 7:You know, we're we're seeing we continue to see investments in in our part of the world. You know what? Our market's very cyclical as we see many of the markets, and we study those and keep very close tabs on what the markets are doing. But, you know, currently right now, with with the stock market where it is and and and the cash and the financial sector being as strong as it is right now, the capital flow has really been out of real estate. It's, it's gone into the market.
Speaker 7:It's gonna stay in the market until we see until we see some corrections there. And then and then, typically, we see that pendulum swing back and and we
Speaker 1:see that
Speaker 7:money flow back in.
Speaker 1:So that that's somewhat counterintuitive. I would imagine some folks, maybe some smarter investors when they feel like markets are maybe a little bit overheated or overvalued might say, hey. This is a good time to rotate into less liquid asset like land or ranches and have some stability. What you're saying is it's maybe the opposite. A lot of people just wait for a correction and then and then get maybe a little bit scared at that point and then seek more stability?
Speaker 7:No. I think we're gonna start seeing that in q one, q two of next year. I think we're gonna start seeing that movement back into the back into our arena, but we've certainly seen a slowdown, you know, early twenty five all the way through '25. It was a relatively slow year outside of some several large transactions that we've seen in the in the marketplace, but we feel as far as looking at the markets and the economic indicators as well as the financial people that we work with, we're gonna start seeing that come back into the market early in early in 2026 and really see it ramp up in our in our neck of the woods. So, you know, our focus right now is is getting quality listings, getting them priced well, getting them priced in the market.
Speaker 7:We continually see, anywhere between a 1020% rate of appreciation in these Western Montana ranch properties.
Speaker 1:That's year that's year over year?
Speaker 7:I'd say that's over a five to seven year period
Speaker 3:Okay.
Speaker 7:Is what we typically see. Yeah. Especially in the Rocky Mountains now, there's a lot of factors that play into that. We see properties where you have a a quality water component, fishing component, hunting component. There's timber on the property, different amenities like that obviously have a higher rate of appreciation than straight agricultural land where you're grazing cattle.
Speaker 7:There's getting to be a real appetite in the investment world for these quality a properties just like there are with with with quality stocks or quality business investments, whatever it may be. We see the same thing in the in the Rocky Mountain portion of, you know, in our real estate world as well.
Speaker 1:Yeah. How many how many people out of the buyer pool really care about having a a, like, a high quality water source on the property? I I think our our audience primarily works in and around tech. Every every once in a while, a a headline will pop up of some tech founder, you know, buying a doomsday ranch. I think a lot of people like the idea of having a a place with a dedicated water source that, you know, if stuff, hits the fan, they can escape there.
Speaker 1:But what percentage of the buyer pool really actually cares about making sure there's, you know, a a lake or a river or or some type of natural spring? I'm assuming a lot of these properties you can just drill down and and access well water, but how does that all work?
Speaker 7:A lot of majority deals with the fishing aspect of it. The blue ribbon trout fishing in Western Montana is some of the best in the world. So so, primarily, it's more of a recreational driven
Speaker 4:Okay.
Speaker 7:Component of these properties than it is necessarily a a end of times or a doomsday aspect to the property. So the fishing, we always refer to to quality fishing water on these properties as really the golden thread on, on ranch real estate and and recreational real estate in the Rocky Mountains in that, a, we we typically see these properties appreciated at a much higher rate, and, b, they never go out of style, and there's there's only there's a there's a finite amount of those, a, properties that are on legitimate fishing water available in the Rocky Mountains. So when they do come available, they're they're typically in very high demand. And the premium over The
Speaker 1:The pre is what's the what's the what would you say the premium is over a property that doesn't have running water or a lake or or any of those things? Is it 50%? Is it a 100200%?
Speaker 7:But I was just gonna say each each one of these is so unique, Jordy. That's what's hard about it, but it's it's significantly higher. Then, you know, you then you go to, you know, the the timber properties, the the properties that are in the mountains with the mountain setting and that everybody sees in the magazines that you real obviously recognized in the magazine ads that we put out. But the timber, the elk, the big game are always an attractor as well as to those investment grade buyers. You know, back to what you were talking about from the tech standpoint, it's remarkable how Bozeman's exploded as is really an emerging an emerging market in that tech industry.
Speaker 7:We're seeing a lot of tech people, high net worth tech individuals relocating in Montana, in in the Rocky Mountains in general, as well as buying large properties. You know, we were we're tied by a lot of NDA, documents and NDA, contracts, but but there are a number of of high net worth individuals that re that are relocating out here for a number of reasons. One is from a safety standpoint. They see Montana as very safe. They see the Rocky Mountain West as very safe.
Speaker 7:As as you see the crime rates in some of these urban areas that that that you know, regardless of your political affiliation, there's there's concern about it. And I think as there continues to be concern about about that, we're gonna continue to have people that are driven to this market seeing as a safe, secure place to to raise their family, to have their kids, to have their family, you know, a family compound where they can gather at.
Speaker 1:Yeah. What, what kind of opportunities are there to actually monetize and and generate yield on a on a ranch property? Obviously, if you can just buy a a piece of land and and let it appreciate over time, are there opportunities to, actually utilize, some of these properties even if you're not, you know, there to, generate some type of incremental yield?
Speaker 7:Absolutely. Do you know the the ROIs on these is is is much lower than what, a standard investor would would would demand out of their portfolio. So a lot of it when we're working with buyers is changing that mindset that we're looking at long term appreciation. Obviously, the depreciation schedule and the depreciable assets that are contained within these properties is of significance to a lot of these buyers that they can use directly on their on their tax returns. But, typically, the ROI on on a cattle ranch, if you can get a a two, even a 3% return on some of these, is quite good.
Speaker 7:The the land prices have gotten to the point where it really agriculture is making it's it's hard for agriculture to really sustain and to and to pay for any of these. I had a good friend of mine, ag family tell me that really the ability for agriculture to pay for these ranch properties, farming is a little different, but on strictly cattle standpoint, finding a way to get cattle to pay for these properties really that wagon came unhitched back in the seventies. So today it's more of looking at how you can get the agricultural operation to pay for your operation, to pay for your expenses, hopefully get decent paycheck out of it. But where you see the return is obviously when you go to sell that real estate or you look to ten thirty one out of an existing operation and upgrade into something a little larger in a in a possibly not so desirable area that isn't commanding these record prices from a a recreational standpoint, if that makes sense.
Speaker 2:It feel like, essentially, most of the land that you're seeing come across your desk has been properly surveyed such that people aren't seeing it as a gamble. They're they're they're not buying and saying, oh, well, like, maybe there's a chance there's gold there or or oil because we just saw a there was a new rare earth element deposit that was found in Utah, and and the The Wall Street Journal called it the most significant critical minerals reserve in The United States, a whole bunch of rare earth elements. And that seems like, how were we not looking for that already? But I but I imagine that most of your clients are not thinking about, their land purchases as lottery tickets. Right?
Speaker 2:So how do you think about these, like, wildcard events that seem to be happening? And yet, what is your what is your client base actually experiencing?
Speaker 7:You know, we really don't see that in our client base. It it typically, what our clients are looking for is preservation.
Speaker 4:Sure.
Speaker 7:We have buyers that are typically very conservation minded that look at the land is how they can improve it, how they can possibly reduce man's footprint on that landscape, enhance the wildlife, enhance agricultural components, enhance the land so when they leave it, it's a little better off. A lot of what our role is is actually educating these buyers to you know, there's a there's a great there's a great shot right there in a range that we have listed in Northern Montana. But a lot of these new buyers that are in our arena today are looking at ways to that that they can help preserve the West, which is very refreshing in a lot of ways. They wanna find ways that they can preserve the agricultural way of life, that ranching way of life. Oftentimes, we'll see buyers that'll come in, acquire an asset, and then go back to that owner and say, okay.
Speaker 7:We understand that the the the margins in agriculture are very tight. Let's let's relook at this asset and say, okay. If we if we have an influx of capital and we have the ability to to put some capital into this property, what can we do to enhance it both from a production standpoint, but also from a recreational and a conservation standpoint as well. Looking at it through a little different set of glasses and possibly what that operator has been looking at it in the past and and finding ways that they can better preserve the ground, preserve that landscape, preserve that Montana and that western way of life, and not just come in and look at mining it, developing it, carving it up, putting Mhmm. Small ranchettes on it or whatnot.
Speaker 7:We've really seen a shift away from that development aspect into more of a conservation minded buyer.
Speaker 1:Mhmm. What's the process if you acquire a piece of land to actually build on it? We're based here in California, and and the process is absolutely insane. I live in Malibu. If there's a there's a property that you might look at, it might be reasonably priced, but you're looking at maybe six years to actually develop plans, get them approved, and actually start, you know, getting getting to the point where you could really occupy the space.
Speaker 1:What's it like in Montana from from everything from a permitting process through even just, like, labor costs, all that stuff?
Speaker 7:I I don't know if I wanna answer that question necessarily. I don't wanna see a big a big rush all of a sudden into our into our market, but it it I I think you'd be pleasantly surprised, Georgia. It's significantly smoother. We don't have the bureaucracy in Montana that you'd see in a lot of other states. Obviously, there are processes.
Speaker 7:There are permitting processes as far as building permits, electrical permits and whatnot, but nothing remotely close to what you deal with in California. It's much more personal. It's much more hands on. It's much more streamlined. And and not always is it you know, with that being said, we have a a development here in Montana called the Yellowstone Club, which you may or may not be aware of, which is Yeah.
Speaker 7:It turned into quite a a billionaire's resort area. Very, very high end. Very high end. It's the who's who in in the financial sector that that are residing in that area. And and what we're seeing is really the high, high end construction taking place in that kind of in that sector of our state.
Speaker 7:It you know, we'll see some building in the more remote areas, but but not the extravagant building like like we see up in the Yellowstone Club.
Speaker 1:Yellowstone, you'll have little more modest. Like a two bedroom condo for 20,000,000. Is that pretty commonplace? Yeah. Yeah.
Speaker 1:Yeah.
Speaker 2:How much does it how much does it cost in general to to work with you in general? Do you you know, is there like a like a floor price? Or how how do people start to get into ranches, farms, land? Like, what are all the different financial products or or or or actual opportunities that you see people come to you with?
Speaker 7:You know, a lot of it, John, is just sitting down with a client and interviewing them. We spend a lot of time upfront. Our time is money just as a lot of our clients, their time is money as well. So we like to spend a lot of time upfront interviewing them, understanding what their goals and objectives are, looking not only short term goals and objectives, but long term goals and objectives, not just of them specifically, but also their buyer, where are they at with their family? You know, what are their, what are their, you know, what time of year do they plan on using the property?
Speaker 7:What do they want to get out of the property? What are they looking at long term? Talking a lot from the construction standpoint, what those times look like, what are those timeframes, getting them hooked up with the right people so they get good quality information. So what we do is a lot of times is spend that upfront time. So when we have a buyer that comes out and says, Mike, we've sat down, we spent several hours with you on Zoom calls or personal meetings.
Speaker 7:A lot of times we'll fly to the client. We'll sit down with them at their house in California, Texas, East Coast, wherever it may be, sit down and have that face to face meeting. What we do extremely well is personalize a process that so many clients feel is very impersonal. And that's really been our niche that we do extremely, extremely well. We're very high touch.
Speaker 7:Mhmm. We this is a these are big decisions with big dollars tied to them. And so we wanna make sure that, a, there's no surprises. We wanna make sure that we're totally upfront. We're we have everything on the table.
Speaker 7:We we we inform and educate our buyers as best as we possibly can. So there's no surprises.
Speaker 2:Yeah.
Speaker 7:That's the last thing any of us want is dealing with surprises when we get into a multimillion dollar or or a $100,000,000 transaction is surprises. So a lot of that is done upfront, and we sit down and talk to them through that right up front. We we explain the good, the bad, and the ugly about these processes, timing, costs, and and trying to make sure that those goals and objectives that they have are realistic. And so once we get on track with that, we're we're very strategic. We like to say we shoot you know, we we like to aim like a laser versus a shotgun.
Speaker 7:So we're very we're very direct in in how we approach these processes. So we put a property in front of a prospective buyer. It's something that they need to look at. We've we've vetted it. We've gone through it.
Speaker 7:We've we've visited the property. We've gone through and already done a lot of the due diligence already upfront before they ever even set foot on the property. So again, being efficient in the process, that's one of the things that we stress within our office is being efficient with our time. There's no wasted motion in what we do. And we and we convey that to our buyer and we convey that even to our sellers that everything we do has a purpose.
Speaker 7:We have very strict, very systematic protocols in everything we do. And and, you know, I gotta be honest with you, gentlemen. What we do, we're not building rocket ships here. Real estate is is is personal, and it's being able to execute at a very high level. Mhmm.
Speaker 7:And that's one of the things that we do, and we feel we do exceptionally well. We've transacted more $100,000,000 plus ranch properties
Speaker 1:than working
Speaker 4:on with.
Speaker 1:What's the the total volume that that you guys have done you're able to share?
Speaker 7:Oh, boy. I I couldn't even tell you, Geordie,
Speaker 4:right now. But it's in the it's in the bill it's in the in the billions?
Speaker 7:Absolutely. Yeah. Absolutely. It's hit
Speaker 1:Hit the gong here. For Mike. We got a gong here.
Speaker 4:Think we a
Speaker 2:good thing.
Speaker 3:Oh, yeah.
Speaker 1:I got I got I got two more questions
Speaker 2:for you. You gotta do the question.
Speaker 1:Yeah. Yeah. But I got one more before that.
Speaker 2:Okay.
Speaker 1:Any restrictions on building an airstrip on a on a large enough ranch if I wanna if I wanna create a ranch and fly a PC 12, land that, or PC 24? Is is that all fair game?
Speaker 7:We have civil police with airstrips on their properties, private airstrips.
Speaker 4:Okay. Let's get going again.
Speaker 1:Again. And
Speaker 4:then we have a question we like we like to ask all of
Speaker 1:our guests, but it's particularly relevant for you. What's what's the biggest fish you've ever caught?
Speaker 7:Oh, you know, as crazy as this sounds, I don't fish a lot. Oh. I really don't. You know, we
Speaker 1:You're too busy landmaxing.
Speaker 7:We're we're busy. You know? And and when I'm not when I'm not at the office, we have a a small farm that my family and I have that that's kind of my therapy. I I get my hands in the dirt. That's where I work.
Speaker 7:We're avid avid sports fans, so we travel around watching our local college teams. And and my son is a college athlete, so so my wife and I, we spend a lot of time on the road following him. And so I I think one of these days, I'll probably take up fishing. I do I do like to go to Canada with some with some good friends, and we go up and and fish walleye and pike in in up in the in Northern Canada. But around here, I I just I just don't have time to get on the rivers too much, and it is crazy as sounds.
Speaker 7:We get on we get on some of the most spectacular fishing water that you could ever imagine that very few people in the world ever get to see. And, you know, I and now with that being said, some of my colleagues here in the office are exceptional and and and very accomplished fishermen. So that's probably a better question for for them. I'm I I I like to work too much.
Speaker 1:I'm with you. I'm with you. I'm with you. Great stuff. Well, thank you for coming on Breaking It Down.
Speaker 2:This is fantastic.
Speaker 1:And, I'm sure there'll be another land story in the news sometime soon, and and we will reach out.
Speaker 7:I appreciate you having me on, gentlemen. Thank you very much.
Speaker 1:So Yeah.
Speaker 2:Great to meet Christmas to both you. Have a great day. We'll talk to you soon. We tell you about fall, the generative media platform for developers, develop and fine tune models with servers, GPUs, and on demand clusters. Up next, we have Matt Levine in five minutes, but let's go back to the timeline and clarify something with Augustus Dorico.
Speaker 2:He says, am I tripping or did TBPN used to stand for Technology Brothers Podcasting Network? He says, Technology Business Podcasting Network. Did we get gentrified, bros? What happened, Jordy? Break it down for a
Speaker 4:I I think real one I
Speaker 1:think real ones will always know what the TB and TBPN stands for. Yes. We actually never refer to TBPN Yes. As like four words. It's just always always the initials.
Speaker 2:Always the initials. Yes.
Speaker 1:We leave it up to the audience to interpret.
Speaker 2:Yes. It's becoming a thing. But it is it is actually on our website. There is it is spelled out on our website. It says Technology Business Programming Network.
Speaker 2:I still get that wrong. Often I say Production Network. It's not Production. It's Programming Network. Of course, it's a nod to ESPN.
Speaker 2:Of course, technology and business is what we talk about, and so that made sense.
Speaker 1:And technology, brothers TB. Brothers, sir. Always remains. Yes. In our hearts.
Speaker 2:Eternal. Eternal.
Speaker 1:Uh-huh. Or Epsilon. What's up with, what has Rivian been up to this week? We should play this clip.
Speaker 2:Should Arjun's been on a tear. He's he's he's making a a serious run at self driving. He needs
Speaker 1:Chipped up.
Speaker 2:For it. He's chipped up.
Speaker 1:Let's play this with sound, please.
Speaker 8:And now, for the first time on r two, we're adding a third sensor. The lidar.
Speaker 2:Oh, they're doing That's crazy new. It's bold, right? I don't know.
Speaker 4:Yeah. Clearly, one clapped when he's
Speaker 1:when yeah. Go about go back. That was a really awkward pause.
Speaker 2:Dramatic.
Speaker 8:And now Pause. For the first time in r two, we're adding a third sensor, the lidar.
Speaker 4:The lidar. Woah.
Speaker 2:People are like, no. My iPhone camera's gonna get fried. That was a weird thing. Apparently, LiDAR on certain cars, not all of them, can be so strong that if you point your camera at it with your phone, it can permanently damage the sensor. And so
Speaker 1:What about your eyes?
Speaker 2:Recalls. I think it I think it actually only hurts
Speaker 4:the phone. It doesn't hurt. Okay.
Speaker 3:Don't worry.
Speaker 1:Okay.
Speaker 2:You're good.
Speaker 1:Okay. Totally good. Nick, could could you bring over that that bag right there?
Speaker 3:What
Speaker 1:bag? I gotta see We gotta see this. Look. Okay. We signed up for Picnic.
Speaker 1:TK's new service. Let's see this. Let's see this. What did you get?
Speaker 2:Try Picnic? Try picnic.com.
Speaker 1:Look at this. We're supporting Travis Kalanick
Speaker 2:Travis Kalanick.
Speaker 1:Cloud Kitchens team.
Speaker 2:Is unboxing.
Speaker 1:What'd you get? You got a got a you get a slot bowl?
Speaker 2:One slot bowl.
Speaker 1:One slot bowl. You got a bowl. Looks fantastic. We're excited to check this out. One of one of our interns
Speaker 2:signed The up for the bag stands out with the green background.
Speaker 1:You can have your
Speaker 2:like a yeah. Yeah. This is this is iconic. This is gonna be seen all over all over the place.
Speaker 1:He's cooking. They're cooking.
Speaker 2:He's literally cooking. Well, let me tell you about public.com, investing for those that take it seriously. They got multi asset investing. Interesting. They're trusted by millions, folks.
Speaker 1:Tyler posted yesterday, you're telling me to brainwash this cult. Yes. Didn't get didn't get into the 3 figure like club. Kristen What are talking about? Says top 20 tweets of the year.
Speaker 1:Top
Speaker 2:20. That's good. Yeah.
Speaker 4:I laid four more likes. I'm at 96.
Speaker 1:Help them out.
Speaker 2:Go give it a like. Go give it a like. There's a chance. I I tried to artificially give it a boost by quote tweeting that one and not the other ones. But it did out it did perform the Right?
Speaker 4:Correct.
Speaker 2:Because you because we ran the experiment. We posted all four of Tyler's jokes and, per my prediction, the did a brain
Speaker 1:Alright. You can turn the Giga Chat filter off now, Tyler. You can turn it off.
Speaker 2:Thank you so much for taking the time to come on the show on a Friday.
Speaker 3:Thanks for having me.
Speaker 2:Great to great to meet you.
Speaker 1:And thank you for creating wonderful content that at at times we have Remarkable. Yeah. I mean Many times included included in our show.
Speaker 2:Triple delays. Yeah. We love we love the work. It's been fantastic.
Speaker 3:Thank you. Thanks.
Speaker 2:I I I did want to start with a little bit of background. I I wanted to know about the day that you decided to become a journalist. What was the transition like? What was like the first inciting element in that story?
Speaker 1:Did you know we were headed towards a hyper financialized world where we would be able to You have a lot to write about? On this very conversation?
Speaker 3:I don't know, man. I worked at I was working at Goldman when I decided to become a journalist. I was I was already pretty hyperfinancialized.
Speaker 4:Oh, that's true.
Speaker 3:I mean, I was I the day I decided, I went to my boss and I was like, I'm quitting to go to Dealbreaker, which is like a financial gossip blog. And he was like, that's fine. You can stay for another two weeks and finish up your work. And he was like, wait, did you say deal book? And I said, no, deal breaker.
Speaker 3:And he's like, okay, You have to leave the book.
Speaker 4:Yeah. Really wow.
Speaker 2:That's remarkable. Well, I wanted to I wanted to take your temperature on a bunch of different topics. The the the first might be prediction markets. I mean, Jordy was joking about it being able to gamble on this this very conversation.
Speaker 1:Yeah. We've had some uncomfortable moments throughout the year where Yeah. People flood into our chat and they're, you know, betting on what Sam Altman is gonna say or Mark Zuckerberg is gonna say on one of our conversations. And it becomes very distracting because everyone's just saying, say this, say that. Obviously, to
Speaker 2:Influence the
Speaker 1:manipulate manipulate the conversation. But but, yeah, it's
Speaker 3:been I I get a lot of those people. I get a lot of Yeah. The overlap between prediction market people and and my readers is pretty high. So there's a lot of people emailing me
Speaker 2:Wait. So so so what what I mean one of my main questions is like is like, how do you actually get to some sort of ground truth for what's going on with prediction markets? Because there's a world where it was this incredible crystal ball for understanding the election. Then it turned into, Okay, this is going to give you information about all sorts of different things in the world. And then you peel back the onion and you think maybe there's just a lot of sports betting going on.
Speaker 2:Like, how do you actually think about the the shape of the business today and where it's going?
Speaker 3:You know, I think that, like, this stuff about, like, what people will say, like, you look at the volumes on these things, they're, like, you know, thousands of dollars. Like, it's not like, there's a lot
Speaker 4:of stuff that is fun
Speaker 3:to write about because it's it's weird and silly and susceptible to manipulation, but it's just not that big. Right? Yeah. When people talk about these companies raising huge valuations and becoming huge companies, like, it's 80% sports gambling. That's like a number I made up.
Speaker 3:Like, it's it's, you know, it it may be less than that as a volume matter, but like it's it's like the next leg up is sports gambling. Right? I mean, that's what that's why they're businesses. I think if you talk to them, like, their view is sports gambling is this huge opportunity for them to, you know, get people there. Right?
Speaker 3:To get customers who really like gambling and to get professionals who can make money gambling against the the sort of like, you know, dumb money customers. And then once you have that, it's easy enough to expand into, you know, markets that make us more informed about the future of the world. I don't know if that's true. And like if they end up just being weirdly regulated casinos, then like that's possibly still a really good business. Yeah.
Speaker 1:Question is how does the market actually evolve because you have every traditional sports book adding prediction markets. And so Yeah. If you have new businesses that can be in 50 states on day one, maybe that grows the market a little bit. But overall, you know, what what is what is the sort of like total enterprise value that all the popular online trading and or betting platforms can really sit at is kind of unclear. Right?
Speaker 1:Maybe Yeah.
Speaker 3:I mean, like like, clearly the big opportunity is like cannibalizing sports betting. The other thing is, it's not clear what they are because they're exchanges. Right? So they're not making money by trading against customers. Right?
Speaker 3:And so, like, one possible evolution of the market is you end up with people who are either literally sportsbooks or who are, like, kind of, like, hedge funds that are replacing sportsbooks being market makers on these platforms and sort of, you know, making their money by trading against retail flow. But, like, you know, they're a separate business from the the actual, you know, Calci and Polymarket platforms.
Speaker 2:Do you have an idea of how sophisticated, like, Wall Street is around sports betting? Because you have to imagine that, like, at some point, Jane Street or Citadel said, like, well, what if we just went and put someone in Las Vegas and started trading? Could we make an edge there permanently? I I I it feels like there might be a wave coming where Wall Street starts having, serious desks dedicated to sports betting. But or is that already happening?
Speaker 2:Or do you think that won't happen?
Speaker 3:Yeah. It's already happening. Right? I mean, like, Susquehanna is the big one who, like Yeah. You know, famously have a sports desk and, like, other big kind of like African trading market making firms are dipping their toes into it.
Speaker 3:Sure. I think it's hard for them to get into like traditional sports book Sure. You know, trading but it's very Yeah.
Speaker 1:Because if you're too if you're too good Yeah. You
Speaker 3:get regulated exchange.
Speaker 1:If you're too good Yeah. You just get booted.
Speaker 3:Traditionally, you get limited and it's like it's just like a different interface where and and and a different regulatory interface too. Like if you're trading on a commodities exchange, you're trading on a commodities exchange. Can do that. So I think they're very much getting into it. And if, you know, legal sports books regulated as commodity exchanges are here to stay, then it's also just like whether or not it's a good business opportunity, there's a huge personality overlap.
Speaker 3:Like, know, these high frequency trading firms, it's the same type of analysis. It's the same type of adrenaline. So, like, they're they're very happy to get into sports books.
Speaker 2:How are you thinking about insider trading on prediction markets? It feels like we've I mean, this this week, it seems like multiple people have been making the the steel man argument that it's good.
Speaker 1:Yeah. The the problem is is in some ways, it feels like if you don't have insider trading, then it's just a bunch of people guessing. And if you do have insider trading, then you potentially get greater accuracy of of, and and, like, more value out of the markets. And so it just feels like a very tough tough I mean, it's very tough for the prediction market platforms themselves to actually talk about. Mhmm.
Speaker 3:Right. Like, my impression is that everyone who started a prediction market is a true believer in the idea that, like, the job is to make markets as informed as possible and, like, they all secretly love insider trading. But they're also trying to get approved by the CFTC. And so they have to say, we do not allow insider trading. I think the rules are weird.
Speaker 3:Right? I mean, the rules of insider trading in commodity markets are less strict than they are in securities markets because traditionally, they're for like grain producers hedging their grain production. So like you're supposed to insider trade. And I think like maybe a little bit of that philosophy will be imported into the prediction markets. But I mean, you look around it like the justice department is going after, you know, baseball players for breaking gambling and baseball.
Speaker 3:Like, no one there's no appetite for legal insider trading in most of the markets that that, you know, will will be big money in prediction markets. So I think that the regulatory situation is kind of gonna shake out that insider trading is kind of prohibited, but maybe, like, a little harder to monitor than it is in the stock market. But definitely, philosophically, people in this market don't want that.
Speaker 2:Is it do you think we just need a, like, a big, like, bombshell case or story to sort of, like, catalyze some action around that? Because it feels like
Speaker 3:The the the baseball case is that.
Speaker 2:Yeah. Yeah. I I guess, but sportsbooks have existed for a long time. So I'm interested in understanding, like, what would actually change because because for, what, like, I don't know, fifty years, it's been, you know, longer. It's been for decades, it's been illegal or, you know, against the rules for a baseball player to go and put a big, you know, bet against them and then throw the game.
Speaker 2:And so that should just that that yeah. I would imagine that that framework just carries over to prediction markets, but maybe if it's lagging, then it we won't actually get codified until there's a big headline case.
Speaker 3:Yeah. I think they'd be more caught up in prediction markets.
Speaker 4:Right? I think the prediction markets have
Speaker 3:rules saying you can't use material on public information, whereas, like, the sports books and the sports book have those rules too. Right? But, like, I think that I I think that it's gonna be pretty codified like that. But, you know, you're gonna have a lot of like, the sports stuff, the sports leagues have a real interest in policing and, you know, the justice department has a real interest. And, you know, that's a that's a sexy case to bring if you're, like, you know, arresting baseball players.
Speaker 3:You know, people betting on, like, you know, Google search results maybe is a little bit less interesting and a little bit more lucrative.
Speaker 2:Yeah. That makes sense.
Speaker 3:And, like, also,
Speaker 4:we, like, live in a world where,
Speaker 3:like, fraud enforcement is just kind of less of a priority. So, like, people will definitely get away with stuff in the next few months.
Speaker 1:Yeah. How did you process Trump saying he would, quote, would consider eliminating taxes on, gambling winnings.
Speaker 2:This is him joking around or something?
Speaker 1:Yeah. It was kinda offhand, but then the the the nature of the Internet today is you have, like, a 100 accounts on X that are, like, pseudo news wire accounts. And they'll take one line out of context and then blast it out, and they'll get a bunch of engagement. And then you realize, you know, you you you look to like an actual credible news source, you realize that, you know, again, fully fully taken out of context. But do you think we should be incentivizing gambling in the country?
Speaker 3:So a couple of things. One, no. Two, you know, like like like being the friend to crypto has paid big political dividends to him. And, like, if you're sort of looking around for what other, like Consistency. Aggressive young male demographics you can
Speaker 4:can appeal to, you can might be
Speaker 3:like, oh, I'll I'll I'll give the gamblers what they want. And then the other thing is there is this weird situation where the tax bill may be somewhat accidentally limited to deductions of gambling losses. So you can only deduct 90% of your gambling losses, which if you are a professional gambler is, like, quite devastating. And one theory is that that has been very good for the prediction markets because there's an argument that if you, you know, are are trading on prediction markets and you you win some and lose some and you earn 51% of your bets, you can deduct all of your losses. Whereas if you're doing that on a sports book, you can deduct 90% of your losses.
Speaker 3:And so it's the difference between being profitable and unprofitable. Yep. As far as I know, that was sort
Speaker 4:of an accidental consequence of all of this. But like,
Speaker 3:you could imagine, you know, Trump like, you know, Trump administration liking the prediction markets and wanting to send business their way.
Speaker 1:Yep. I wanna talk about the potential SpaceX IPO. A lot of people have been processing it in different ways. Some people were surprised this was was happening just given that, SpaceX has thrived in the private markets and has plenty of access to capital and and Elon has had a number of bad experiences in the public markets. I have a kind of working thesis that this is could be a spite IPO.
Speaker 1:I think we're gonna see a lot of IPOs next year. And if you're raising a billion dollars, let's say, if you're gonna float at like a 50 bill you know, you're a $50,000,000,000 company and you only need to raise a billion dollars, you're not really threatened by IPO. But if you're a foundation model lab such as OpenAI that wants or Anthropic that wants to raise tens of billions of dollars, it's very possible that a 1,500,000,000,000 SpaceX IPO could kind of like suck the oxygen out of the room. Is is you know, I want you to kind of give us your take broadly on it. And and I'm curious if my tinfoil hat schizo theory has has any merit.
Speaker 3:Yeah. I don't really know. Well, okay. So first of all, like, you know, I read companies that might go public next year all the time. I don't I don't know.
Speaker 3:I mean, I assume it's true, but, like, I'm not totally sure. Two, like, one thing I've read is that the use of proceeds for this hypothetical $30,000,000,000 IPO is to put data centers in orbit. And, like, you know, this gets to your spike theory. Like, in a world where there's, you know, $10,000,000,000,000 of, broadly speaking, AI CapEx needs, like, there's gonna be competition for that. And there's gonna be, like like like, SpaceX can kind of SpaceX has been able to raise as much money as it wants in the private market and, like, you know, achieve a, you know, $800,000,000,000 valuation and, like, send rockets into space and be, like, a fairly capital intensive company while staying private.
Speaker 3:But, like, if the next leg is, you know, they need tens of billions of dollars of AI ish spending, then you might reach the limit in the private markets. And, yeah, you might reach the limit in the IPO market too. Right? Like, you might like, there might just not be enough money to go around for all of these AI companies. And then I don't know why SpaceX is in the AI company category other than this data
Speaker 1:Well, so so here's here's
Speaker 3:the other Elon complex. Right?
Speaker 1:Yeah. But but the other theory is, like, there's a world where x AI could get rolled into SpaceX and taken public around the space data center narrative. And I think that there's a lot of people that would be excited about that narrative even if other people in the space economy are saying, hey, space data centers will happen, but it's probably more like a a ten year timeline versus a three to four year timeline.
Speaker 3:Yeah. Also, like, I mean, I've read that they're, like, looking at a $1,500,000,000,000 valuation on, like, twenty two billion dollars of revenue. Like, it's all pretty it's all on a pretty different timeline.
Speaker 1:It's in orbit. It's in orbit. Yeah.
Speaker 3:You're not paying for, like, that year's earnings. Right? So
Speaker 2:No. You
Speaker 3:you need a you need some sort of ten year story to tell.
Speaker 2:Yeah. But I mean, to be fair, it would be easier for I mean, at least I believe it'd be easier for SpaceX to acquire x AI than Tesla to acquire x AI because of acquisition laws around a public company buying something big versus a private company buying something big. Does that sound roughly correct? Like, would you handicap
Speaker 3:Oh, yeah. It sounds roughly correct. Although, I mean Sorry, sorry. Tesla has form of buying, you know, other Elon companies and Yeah. Goodness, I know, has moved to Texas in order to make it easier.
Speaker 3:Right? Like, I don't think Tesla would have that much trouble buying. But they would get sued, you know, if you do it in SpaceX.
Speaker 1:Well, I think I think part of the challenge is that Tesla shareholders might say like, hey, we already have a really good AI team. We've been working on self driving. Like, we don't need x AI.
Speaker 4:We
Speaker 1:don't necessarily wanna dilute ourselves, you know, whatever XAI's current valuation is or whatever price it would come in at. So I I just
Speaker 4:I guess, I
Speaker 3:just feel like the sort of standard Tesla shareholder approach is like we're gonna trust Elon's intuitions on these things and blame them. They bought like, you know, like Solar City? Solar company. Right?
Speaker 1:Yeah. But there were there still was pushback, and that was, like, a much I'm assuming there'll be 1% of the that'd be one per like, Solar City was, like, one point something billion, wasn't it? It wasn't like a
Speaker 2:It was much smaller.
Speaker 1:It wasn't like a 100 bill like, I'm assuming x AI has a lot of debt. They've raised a lot of equity. It would be somewhat
Speaker 2:It has the Twitter debt as well.
Speaker 1:No. Yeah.
Speaker 2:There's a lot of debt rolled in. Well, speaking of debt, I mean, Netflix had to issue some debt for this Warner Brothers deal. I'm I'm interested to know your your thinking around how the Warner Brothers process will go. Are we gonna wind up in a quiet period for the rest of the the year as we go into the holidays? Or you think it'll be, you know, just as as just as many headlines as there have been?
Speaker 2:Where do you think it actually lands? What's the nature of the story?
Speaker 3:I don't know. It's been surprisingly quiet to me. I mean, I think it's weird that Paramount, first of all, launched a tender at the price that was rejected. Right? Rather than saying we're gonna raise a few bucks and go to the shareholders, they launched at the price that the board said no to.
Speaker 3:And that they've said publicly that it's not their best and final offer.
Speaker 2:I know. That's quite crazy.
Speaker 4:Can you think what what is the logic?
Speaker 2:Is there any is there any logic where that makes sense?
Speaker 3:Okay. So I think that where that makes sense is that is that there it's not a real tender offer. Right? Like, can't close a tender offer for reasons including antitrust. They clearly want to do a friendly deal with the board.
Speaker 3:Right? Okay. And so I think that saying very clearly we could give you an extra $2 if you sign a friendly deal with us is a is a good way to get, you know, to the board and to try to strike a deal with the board. So I think that's the logic there. But I I don't I don't know what the board is doing.
Speaker 3:Right? I mean, I think the board likes the Netflix deal. I think that I also think that like Paramount has two things going for it. One is that they think they've offered more money or certainly they can offer more money. Then the other is they really think the Netflix deal is dead on sort of antitrust slash Trump y reasons.
Speaker 3:Yeah. And I don't know how that plays out. Right? Because that's a that's a potentially year long process and presumably nobody wants to wait that long. But I think, like, there's some ability to wait a few weeks and see if, like, Trump says nastier things about Netflix to try to, you know, pressure the board to come to a deal.
Speaker 3:Mhmm. I I don't know. I'm I'm surprised that there's been so little news. Right? I mean, like, since Monday, like, no one like, who would have expected someone to raise their offer by now?
Speaker 1:It's a good point.
Speaker 2:Yeah. What was your have you formulated a take on the OpenAI Netflix deal? We kind of landed on You
Speaker 1:mean Disney deal.
Speaker 2:Or sorry. Yeah. OpenAI Disney deal. We sort of landed on it being like sort of an interesting way to create less commoditization in, you know, the AI application layer, the consumer chat experience. They all are starting to feel very similar.
Speaker 2:I don't know if you felt this way, but it feels like all the models are, you know, sort of at the same level. The benchmarks are pretty similar. Well, if you can get Spider Man in one and not in the other, maybe that's a differentiator. Have you have you processed that deal similarly, or do you have a different frame of mind around it?
Speaker 3:I haven't thought that much about it, but that seems right to me. And it is like, you know, it's like, you know, you think about, like, the Netflix Warner situation. Right? Like, you have, like, you have, like, content distribution services, and then they have, like, content libraries. Right?
Speaker 3:And there's some combination of acquiring the content and making, you know, commercial deals with the content providers. Right? Like like here, one possibility is that the AI chats are ultimately the next, you know, dumb entertainment channel. Right? And so if you have the good properties in your dumb entertainment channel, then like when people are like, oh, I want an AI to create a movie about me, I'll go to the one that has, like, the Disney characters like that.
Speaker 3:I don't know. It kinda makes sense. Right? And it's like a like, the thing that is striking to me is that the AI companies, like, talk about, like, this sort of fundamental reshaping of society and, you know, discovering superintelligence. And then, like, they're a little bit consumer entertainment products.
Speaker 3:But like, if you're a consumer entertainment product, like, you want the Disney characters.
Speaker 1:Also adult adult entertainment.
Speaker 3:Yes. Yes. Right. Right. Yeah.
Speaker 3:Character porn.
Speaker 4:Well, really has saying it is it is funny
Speaker 1:that adult adult mode and Disney are will be rolling out in the same effectively thirty day period. So
Speaker 3:dream. I don't I don't know enough about the deal to know if they like have I hope they have
Speaker 1:I hope they have a carve out.
Speaker 2:They do have a carve out. Yeah. They do. This was confirmed. They did say that there are lots of restrictions on what you can and can't do with a Disney character in OpenAI properties.
Speaker 2:I'm sure that was that was key. It's wild.
Speaker 3:We're gonna we're
Speaker 4:gonna see the jailbreaks. That's gonna be good.
Speaker 2:There will be some jailbreaks. I think there won't be that many jailbreaks. I think in the last two years, they've gotten pretty good at locking it down. So that was that was kind of my my prediction. I'm sure.
Speaker 2:But I'm but there will always be chaotic stuff. It's it's it's inevitable with AI and the Internet. What how should tech people be thinking about the growth of private credit? I feel like there was an era where folks in tech were understanding that the foundation model companies, Anthropic, OpenAI, were operating at a truly unprecedented scale. The capital war was bigger than Uber, Lyft.
Speaker 2:It was bigger than anything folks in tech had seen. It was certainly more capital consumptive than Google was before it IPO ed. And so all of a sudden by a lot. So all of a sudden, have tech people that are grappling with the prospect of a $10,000,000,000 debt financing for something that is you know, feels like a start up. It feels like a start up project.
Speaker 2:And so it was easy to point the to sound the alarm bells, like debt is coming. Debt is scary. Debt blew up the economy in 2008. It's gonna happen again. But you talk to a lot
Speaker 4:of people in private credit,
Speaker 2:they say, no. There's plenty of areas where, people pay their pay their debt obligations on time. How how have you processed, like, the is NVIDIA holding up the global economy? Is OpenAI gonna blow up the entire global economy? Those types of, like, Cassandra esque narratives that have kind of spiraled and maybe are coming back down to earth now.
Speaker 3:Yeah. I don't know. I mean, I it's fascinating that, you know, like, insurance companies investing in investment grade debt are, like, ultimately underwriting, like, a stream of payments from startups. Right? I mean, like, kind of what is happening here.
Speaker 1:Deeply unpro deeply unprofitable. Deeply unprofitable startups.
Speaker 3:Yeah. But, like, also a lot of it is, people underwriting a stream of payments from Facebook, which, like, you know Is very profitable.
Speaker 2:Like Yeah. Blue out data center for for Meta Superintelligence, one gigawatt, the Hyperion thing. Like, it's like Meta's gonna pay that bill, at least I think so.
Speaker 3:Right. And if you had made, like, an equity bet on, like if you if there had been a way to make an equity bet on, like, Meta's pivot to the metaverse, like, you would have lost all your money. But, like like Yeah. Presumably, they paid their supplier bills for that. Right?
Speaker 3:Like
Speaker 2:Oh, totally.
Speaker 3:Like, there's a there's, like, a difference there. Right? If you're, like, underwriting these, like, hyperscalers are mostly, you know, these are very investment grade, very cash flow companies that, you know, could could off the CapEx if they needed to. But, right, I mean, you're underwriting a lot of, you know, fixed payments on CapEx, and it's it's it seems a little aggressive for a credit investor, but they're all, like one thing about private credit is, like, it's not gonna blow up the economy. Like, it's, you know, it's like insurance companies making these bets, so, like, a little bit longer term capital.
Speaker 3:Yeah. But
Speaker 2:Is there anything in the economy right now that gives you the same sort of jitters that you had during your famous interview with Sam Bankman Fried? Where it felt like at the time you were clocking, like, this just doesn't make sense. The math doesn't math. Like, it feels like we're frothy. We're everyone kind of goes around saying, like, yeah, we're in a bubble, but it at the same time, it doesn't it feels like it's a bubble that's built on some real stuff.
Speaker 2:Like, they they even even the prediction market stuff, it's like, I can at least trace the cash flows. I might think that sports betting isn't the greatest thing, but, like, at least I know that the businesses are gonna make money.
Speaker 3:Right. Like, you know, AI sort of replaced crypto as the sort of darling of a lot of investors, but it's just you can you can the the consumer product is very tangible. Right? Like the crypto stuff is all like, oh, we'll make tokens that other people can trade for more tokens. And and and it didn't actually
Speaker 4:sounds like a lie too. Because I make It's okay.
Speaker 2:I make make anthropic tokens. I sell them to you. You make cursor tokens. Mean, you take Circular like,
Speaker 3:the circularity is is, you know, if you wanna be troubled about the circularity, it's like a little weird, but it's the difference between that and like crypto where no one like like the thing about Sam Bankbenefriere that was obvious at the time was that he didn't care about crypto. Like, he was on the like, oh, yeah. This is a world changing product. It was like, oh, yeah. This is a casino where people will give me money.
Speaker 3:Yeah. And, like, AI is there's a lot of people who are true believers in it. And, they've, like, rolled out consumer products that Disney's gonna license its its characters. Right? I mean, like, there's a real sort of there are many real obvious use cases.
Speaker 3:And so, like, there's a lot of value being created. And then the question is, like, is it commensurate with the, you know, $10,000,000,000,000 of debt that's being incurred? And that's it's not obvious, but it's like, you know, there's there's something there. There's not
Speaker 4:How much how much would
Speaker 1:I have to how much would I have to pay you for you to agree to not use any AI for the next year?
Speaker 3:I'm kind of a let out. Like, I mean, I use AI, but I'm
Speaker 1:assuming it's, like, for re like, research here and there of, like, better kind of search.
Speaker 2:Give us the prompt for your column. Give us the prompt. What's the prompt?
Speaker 3:People pretty regularly email me. They're like, I asked Chad GPT to write about this and the style of Matt Levine. It did pretty good. And they sent it to me, I'm like, okay. I'm safe for, like, another three months.
Speaker 3:Yep. It's like never
Speaker 2:It's never close. No. It just never Never close. Doesn't get the flavor or something. I don't know.
Speaker 2:May you may
Speaker 3:maybe answer to question is less on you than by Kyra. Yeah.
Speaker 1:Yeah. Have you been processing Oracle over the last six months or so? They've they're getting zero credit for their backlog, their 5 half $1,000,000,000,000 backlog. I think they're are they trading at less than less than the backlog currently? They you know, people have brought up the .com bubble and obviously are drawing comparisons between the two moments.
Speaker 1:But what's your view?
Speaker 3:About Oracle being, like, not the darling of the AI bubble? I don't I don't I don't really know. Mhmm. They're just not I don't I don't I don't know enough about, like, Oracle's backlog, but I I think they're not just, you know, they're not the name that that people go to as the as the AI AI darling.
Speaker 1:Yep.
Speaker 3:I don't know. The .com bubble is like, you know, it seems like a reasonable comp in that. I don't know. It just feels like, obviously, even if there's a huge shakeout, there will be huge value, you know, there'll be an Amazon of this bubble. Right?
Speaker 3:Like, there'll be big important survivors of it, which, you know, again, like, I can't say it wasn't true of crypto, but, like, there's nothing inevitable about that in crypto. Right? Like, that was, you know, like, like, there's there's there's a possibility of nothing happening there, whereas here, it's like like, the changes to the economy and to society are are kind of already tangible.
Speaker 1:The thing that's somewhat of a narrative violation is the like, the median crypto fund has actually done pretty well over the last few years, and it's possible that the median venture for AI focused
Speaker 2:It is very much like .com boom. It's like you gotta be in Google or Amazon or you're probably in a lot of trouble. And Yeah. And and and with crypto, there were a lot because it's so liquid, there were so many funds that were, like, trading in and out even if something went way down. It's like, well, they already distributed.
Speaker 2:They got out early. Like, you know, there's tons of ways to make money.
Speaker 3:Yeah. I don't know. Yeah. I
Speaker 1:don't know.
Speaker 3:One one All very long. Yeah.
Speaker 1:One kind of random question on your workflow. I'm assuming people email you kind of like tips tips all the time that are really trying to like feed you information on on their enemies, things like that. How do you kind of
Speaker 3:I'm not an investigative reporter and so like I don't I'm not that useful for that. But yeah, people are like, You should write about this. And
Speaker 1:But how do you Yeah. What's your You
Speaker 2:should call this secretory fraud.
Speaker 1:What's your what's your process for trying to figure out
Speaker 2:You should call
Speaker 1:it what what is is like actually real? Because I mean, we we we get that where people are trying to like Mhmm. Convince us of certain narratives and and we're trying to process, you know, maybe off air Yeah. Trying to process how real something actually is.
Speaker 3:You know, again, I don't like do a lot of investigative stuff.
Speaker 4:So if people are like, oh,
Speaker 3:look into this secret thing, I'm like, no. Yeah. So like they, you know, like if I'm if they're sending me information about their enemies, it's like, here's their eight k filings and I can read them myself. And I do try not to I used to like find it flattering when like, you know, big finance people were like, let me tell you about this. And then I was like, they're just shopping me their version.
Speaker 3:And so I try not to.
Speaker 2:Yeah. Sure.
Speaker 3:I try not to either have those conversations or if like I have conversations with the hedge fund manager about how their position is so good, I just don't write
Speaker 4:about it. Yeah.
Speaker 3:I don't I I it's like too easy to be to be flattered and persuaded into thinking that what they say is right. And so, like, I just try not to expose myself
Speaker 2:very That's good.
Speaker 3:Yeah. Like, I just try to, you know, like like, people really, oh, this is an interesting thing. Like, okay, send me the public documents and I'll read them and I'll make my own thoughts about it. I would. Yeah.
Speaker 2:There's a balance Somewhat related question.
Speaker 3:I do have to get some information from people, but I gotta try not to be hearing their opinions.
Speaker 2:Somewhat related question. What is your theory on why Bloomberg is able to retain top journalistic talent? They've seen very little churn over the last couple of years relative to other legacy outlets. What's going on? What's the secret sauce?
Speaker 3:I mean, there's a lot of things. Like, we have a great audience. Like, the audience so good. Like, it's so, you know, there's like the feedback that I get from readers. It's like they're so smart.
Speaker 3:Like, it's it's so concentrated in the financial industry. So, like, the audience is so good. It's the best business model in media. Like, we're a good, stable, profitable company in a world where that is not true of a lot of legacy media. Sure.
Speaker 3:And I mean and, you know, and there's a flywheel where, like, your colleagues are great. Like, I really like like, wouldn't leave Bloomberg just because my friends are all here. Yeah. And then the other thing is, like, it is a huge organization that nonetheless gives people a lot of freedom to do weird stuff. Like, what I do like, I've been doing this for, like, ten years and, you know, if I tried to do it at, like, another media organization, they would have various steps to construction.
Speaker 3:Let's say, are you sure you can do it this way? Like, I feel like I proved out the model and so Bloomberg just lets me do it. But, like, Bloomberg does that a lot. Right? I mean, like, Odd Bots just had its tenth anniversary party this weekend.
Speaker 3:Like, Odd Bots is a weird Overnight success. Yeah. It's like a program that just, you know, like a lot of people in media would have been like, oh, that won't work. And Bloomberg just let them do it. Right?
Speaker 3:So there's a lot of stuff like that where it's a huge organization that also is is like quite Experimental. Agile. Like yeah. And like gives people a lot of freedom.
Speaker 2:That's really cool. Yeah. That's great. That's great. Well, thank you so much for taking the time to get Yeah.
Speaker 3:Really appreciate having us. This was my pleasure.
Speaker 2:Really enjoyed Yeah. This is very educational.
Speaker 1:Letting letting us bounce bounce our theories off you.
Speaker 3:Yeah. This is cool. Thanks.
Speaker 2:Well, have a great rest the year. Have a great rest of the day, and we will talk to you soon.
Speaker 4:Thank you
Speaker 1:so much. Cheers, Matt.
Speaker 2:Goodbye. Fin dot ai. It's the number one AI agent for customer service. Automate the most complex customer queries on every channel with fin dot a I. Our next guest is Mike Gallagher.
Speaker 2:Gallagher from Palantir. He's the head
Speaker 1:of fence. I
Speaker 2:don't know if that one's gonna stick, but hopefully, he's here. Welcome to the stream. Merry Christmas. How are you doing? Do you have some Christmas music for Mike Gallagher?
Speaker 4:Thank you. How are
Speaker 2:you doing?
Speaker 1:I'm good. How are you guys?
Speaker 6:What's the nickname? The Galliganator?
Speaker 1:That didn't stick.
Speaker 2:No. That one's not sticking. Have you had any nicknames throughout your career? Throughout your life?
Speaker 6:Mostly just Gallagher. Yeah. G Money for a while.
Speaker 1:G Money. It's good.
Speaker 6:Yeah. I think that's it. Mixmaster Mike g.
Speaker 2:Was that on the hill?
Speaker 6:What's that?
Speaker 2:Was that on the hill?
Speaker 6:G money. No. That was like high school
Speaker 4:or college. Yeah. I imagine it was before. Yeah. Sounds like
Speaker 2:a high school name, not necessarily one in in congress. But, anyway, it's great to catch up with you. I hope you've been having a wonderful year. It seems like Palantir's been on a tear. I'd love for you to take us through the news today and and kinda get us up to speed on what's happening in shipbuilding specifically, and then I'm sure we can zoom out and talk about shipbuilding more broadly and and geo comp geo just geopolitics and competition.
Speaker 6:Well, I wonder if we couldn't reverse it. I think it's important to make the geopolitical case first. First of all Yeah. You guys seem to be crushing it as well. I see you everywhere.
Speaker 6:I have, like, merch in my office now. Fantastic. All my friends are constantly on your show. So congratulations on all your success and taking over the world. It's very cool to see and Thanks
Speaker 2:for coming on so early and helping us. It was huge.
Speaker 6:Hey. Some call it the Gallagher bump, you know, that you've now you're now a beneficiary of. Gallagher nator bump. The G
Speaker 2:Money bump. Yeah.
Speaker 6:Yeah. That's right. My my my entire, like, eight years in congress was devoted to this question of how do we enhance deterrence with respect to China. Mhmm. And if you look at it, like, are things we need to do in the short term, you know, killer robots, a lot of the stuff Andoril's building, you know, long range precision fires.
Speaker 6:But over the long term, if you just look at a map of the Pacific, we need a bigger navy. Right? We had a four structure assessment that called for a 355 ship navy when I was a freshman member of congress in 2017. We made it the official policy of The United States to get to a 355 ship navy as quickly as possible, as quickly as practically possible was the language. And then the size of our fleet continued to shrink.
Speaker 6:It's on track to bottom out at 279 ships in 2027, which happens to be the year that Xi Jinping has set for having his military ready to invade Taiwan should he make the decision to move. So if for no other reason than if you look at geopolitics in the most fundamental sense, the collision of geography and politics, we need a larger navy to preserve the peace. We need to start cranking out ships. We need the high low mix of ships. Now the reason we haven't been able to do that, I think, is a combination of factors.
Speaker 6:Right? We have had an inconsistent demand signal from previous administrations, And that's usually what the shipyards say. It's like, we don't know the right mix of ships that the Navy wants to build. You have inconsistent budgeting from Congress. Right?
Speaker 6:I mean, we go from omnibus bills to big beautiful bills to continuing resolutions. Continuing resolutions are particularly destructive for the Navy. A former secretary of the Navy said because of continuing resolutions, the Navy put about $5,000,000,000 in a trash can and lit it on fire. All of this is to say is we
Speaker 1:were Why trying to figure out what are the dynamics that that causes that waste? Yeah.
Speaker 6:The the biggest issue is under a continuing resolution, you basically agree to fund a previous year's levels. You can't have new starts. Right? You can't fund new things, whether it's a new ship class or a new innovative AI program or a new, you know, robot that, you know, scares the hell out of Xi Jinping. Right?
Speaker 6:And then there's just also a lot of uncertainty hanging over a CR. They're usually short term, hard to do long term planning. There's this other phenomenon where the military actually because of how messed up congressional budgeting is, the Pentagon fails to spend about $15,000,000,000 a year. So think about that. For the last ten ish years, we've lost about a $125,000,000,000 in defense appropriations, money that was appropriated for defense that went unspent.
Speaker 6:It goes back to the treasury. It sits in abeyance for five years, and then it evaporates. Like, that's for a hundred and twenty five billion dollars, like, I I I could build you a regional military that could definitively prevent World War three if I was unrestricted in how I could use that money and how quickly I could move.
Speaker 5:All that is to say
Speaker 1:Certainly, you could have prevented the decline in in the navy's, you know, number of ships like you mentioned just a bit earlier.
Speaker 6:Exactly. I think there's another thing. Right? Like, we obviously went to war in The Middle East after 09/11. I was part of these wars.
Speaker 6:I deployed twice to Iraq. The navy was largely the build pair for these for these wars. We had a large infusion of money into ground forces and overseas contingency operations. What we didn't spend money on was investing long term in the future naval fleet and growing the size of that fleet as well as the mix of capabilities on various ship platforms. And then we had cost overruns in key programs, whether it's the Ford class carrier, Columbia class submarine, you know, the the Constellation class.
Speaker 6:Forget the Littoral Combat Ship prior to that. So all that is to say for the first time in a long time now, in the Trump administration under the leadership of secretary Phelan, The Navy is taking advantage of some money that was appropriated by congress for nontraditional bets on leveraging AI and autonomy and applying it to shipbuilding and bringing in Palantir in this specific case to turbocharge production in key shipyards, both public and private yards,
Speaker 1:and
Speaker 6:a 100 key suppliers. So this is $448,000,000 over two years. It's based on pilot work that we've already done at various shipyards and suppliers, the results of which have been incredibly promising. At one shipyard, we saved over a 100 or two hundred planning days twenty planning days a week. You mask yourself, there's only seven days in a week, but that's because there's four people whose full time job it is.
Speaker 6:They spend a hundred and sixty hours working on mandraulic processes. Now with our software, it takes ten minutes. At another supplier, a process that used to took two hundred hours for manufacturing bill of materials is now down to twelve seconds. So just by modernizing the underlying software, leveraging AI, it's our belief that we can maximize production at the shipyards and then link the suppliers to the shipyards and all of that, what's called the maritime industrial base, to the navy itself. So key navy officials in general and the secretary of the navy in particular can look at the maritime industrial base and understand what's going on in real time and make critical allocations decisions.
Speaker 6:Because a lot of what's happening at these yards, particularly the public yards, is just simple decisions about what do I buy now, what do I not buy now. And there's really no like, there's no there's no source of truth to to make a a sophisticated judgment on that, and that's what causes us to waste money and time. So this is all about maximizing production, getting more ships in the water, and ultimately fulfilling that geopolitical need for a bigger and more lethal navy.
Speaker 2:Are there sailors that don't have boats right now, or are we gonna recruit a bunch more sailors as we build out the physical boats in the navy? I mean, I I'm just wondering because I imagine if you if you are, you know, an American citizen, you join the navy, your dream is to be on a boat, and then they're like, oh, we're all out of them. You gotta stay on land. That's gotta be depressing. But but do you think there'll be a recruiting push for more navy sailors as we build out our fleets?
Speaker 2:Or are these gonna be autonomous boats? Like, are these support ships? Like, how do we think about the the the human side of the future of the American Navy?
Speaker 6:Sure. It's a great question. I mean, one thing we've seen in recent years was a full on recruiting crisis that had little to do with the decline or the growth of the fleet and more to do with a lot of at the time, it was, in my opinion, a misguided push for diversity, equity, and inclusion initiatives that were based on species political science that really turned off a lot of people. We had a retention crisis as well. The interesting thing is, at least in most services, that's starting to turn around.
Speaker 6:I was just at the Reagan National Defense Forum. They release a survey every year. And one thing that the survey results reveal is that the so called Hagsteth reset is extremely popular among current service members, which is important because that's the big recruiting pipeline. It's usually someone who is serving or recently served to tell someone else, yes, you should join the military, and among veterans. So when it comes to things like gender neutral combat standards, you know, and some other changes, this is wildly popular.
Speaker 6:So the recruiting crisis has gotten better. I actually think over time, it's not gonna be a problem if we stay on that trend because, and this is the second part of your question, yes, more of our ships are going to be autonomous. There's still gonna be destroyers that are complex manned ships. There's still gonna be carriers. There's still gonna be submarines.
Speaker 6:Submarines are our biggest asymmetric naval advantage right now. But increasingly, I think you're gonna start to see a lot more autonomous vessels in the fleet Sure. Both autonomous surface vessels and undersea robots. And that's where you have I think what as we talked about before, I believe what's most exciting about the current moment is you have so many people in your world, right, in the investing world that are that are that are that are willing to put capital into nontraditional defense tech startups that are building really cool capabilities for the Navy. And I think this is a really exciting moment for the nontraditional.
Speaker 6:So I think the defense industrial base is gonna look a lot healthier four years from now where, you know, Palantir shouldn't be the last company to enter the S and P five hundred as a defense technology company. We we need five more companies like that. And so I I actually think the companies that are building autonomous vessels that are building killer robots that are building long range precision fires, you know, hypersonic missiles like Astellion in California. I think it's a great moment for all those companies.
Speaker 2:Yeah. Have you I mean, it's hard to, like, pick a favorite branch of the military, but it feels like
Speaker 6:Well, Marine Corps. Obviously, it's the Marine Corps. Oh, yeah. I mean, it's not hard.
Speaker 3:It's not hard
Speaker 2:to dock the marines. Yeah.
Speaker 3:Hit the
Speaker 1:gong hit the gong for
Speaker 3:the marines.
Speaker 1:Let's go. Marines. We're not picking favorites, but I'm not
Speaker 2:But But but I am I am super fascinated by this, this Palmer Lucky line that he's been, delivering a few times about. He he wants America to be, the world's not the world's police, but the world's arms dealer. And so the idea that that maybe, you know, if if he's if he's building something that can shoot down a drone, that goes in the hands of the Ukrainian service members. And maybe America doesn't put boots on the ground in Ukraine, but we do put, you know, equipment that can neutralize an attack for a Ukrainian soldier. And so I'm wondering how that interfaces with the naval strategy in your mind.
Speaker 2:Are there are there do you think that are there already boats that we're gonna be supplying to other allied navies? We wanna build up our own navy, but is there also an incentive to build up ally navies as well? And and and what role do you think The US will ultimately play in that dynamic?
Speaker 6:A 100%. Well, first of all, Palmer is at the leading edge a lot of this stuff. And one thing that gives me hope as we look at this new Cold War with communist China is, like, I think our, you know, our private sector leaders, and Palmer's a great example of this.
Speaker 2:Yeah. Oh, did we lose you?
Speaker 1:Oh, no. A nation state again.
Speaker 2:What a coincidence. Wow. He starts mouthing off about That's about near peer competition.
Speaker 1:Taken down.
Speaker 2:They get immediately taken down. Well question. Sorry. We we we're we're we're under cyber attack very clearly. We thank you for bearing with us.
Speaker 2:Well, we have
Speaker 4:The moment I had Manchin
Speaker 6:I know. I know. Chinese Navy.
Speaker 2:It's crazy. Okay. Anyway, kick us back off.
Speaker 6:Well, let's I'll I'll make it simpler. I think it goes both ways. Right? Like, we are seeing foreign shipbuilders, world class foreign shipbuilders like HD Hyundai, which the Palantirs have a long standing partnership with. Mhmm.
Speaker 6:They represent, I think, 17% of the global tonnage that's built. And a lot of the work that we're now applying to American yards is built on some of the lessons we've learned in applying AI to Korean shipbuilding. Hanwha, etcetera, are trying to invest in America. Hanwha bought the Philly shipyard, and that's great. We need more shipyards.
Speaker 6:Mhmm. We need that investment. That sort of and they're gonna have, you know, American subsidiaries that are doing important work. So that's one thing. And then on the other hand, and I think maybe the AUKUS agreement, this was the arrangement we had to provide nuclear submarine technology to the Aussies and is is an example where we can take what we're best at, I e building nuclear submarines, and share it with our closest allies
Speaker 2:Yep.
Speaker 6:And get more interoperable vessels west of the international dateline to enhance our collective combat power. I think this gets to a broader issue. Really, the promise of AUKUS and a promise of a lot of our alliances in the Indo Pacific is that we can start to build out something resembling a free world technological industrial base where humans with appropriate clearances, technology can float seamlessly among between the borders of countries that we truly trust. And then if you layer on geography and you look at, okay, Taiwan, the first island chain, the second island chain, we need countries, including treaty allies like Japan, to invest more in their military. There, we have a really positive story in terms of Japan, what's happening in terms of their investment in asymmetric capability.
Speaker 6:It's probably one of the best developments for deterrence in the last twenty years in the region. So the answer is yes. All of the above. We need to be we need to have a more coherent foreign military sale process where we can provide our best technology and our companies can sell around the world and we make it easy for them. But we also want to leverage areas where our allies might have key capabilities either to invest here in America or we can fight as a team.
Speaker 6:And that's where a different sector, what Palantir does with our Maven smart system. You know, we are the solution for joint all domain command and control. This is how you see the battlefield, how you see the enemy, how you see yourself. We obviously want us to have a similar, if not identical picture when we're thinking about how do we fight China with the Aussies, with the Japanese, and with other key allies. We have to fight as a team in order to enhance deterrence on a timeline that's actually relevant.
Speaker 2:Yeah. Makes a ton of sense. Jordy, anything else?
Speaker 1:Not sure how much you can comment or riff, but what should what should people be paying attention to in regards to Venezuela as a casual geopolitical spectator? I saw that video floating out that that very clear clearly at the top, it said unclassified or declassified. It felt I I didn't wanna read too much into why it was immediately, you know, looked like seals Yeah. Taking over. But what should people be kind of paying attention to on on that front?
Speaker 6:Well, know, it's it's almost similar in my mind to some of the recent naval operations we saw relative to the Houthi rebels in in CENTCOM. You know, I started this conversation off laying out the challenges we've had with shipbuilding. That being said, what our recent operations in The Middle East and what our current operations in SOUTHCOM and in Western Hemisphere demonstrate is that we are still the world's best military far and away. And we have capabilities that nobody else has. Now that should not be a cause for complacency.
Speaker 6:Like, we need to build off that. We need to keep investing more in the military. But, like, our sailors, our soldiers, our airmen, and marines, like, when you give them a mission and a difficult job to do, like, they will get it done. And if you are an enemy of The United States, like, you should be on notice. When we have presidential leadership combined with military professionalism, there's almost no limits to what we can achieve.
Speaker 6:And so I welcome a renewed focus on our own hemisphere when it particularly particularly where it intersects with Chinese and Russian influence in our own hemisphere. That being said, what I'm most concerned about over the next five years and beyond is what is the conventional balance of power in the Indo Pacific region? Because what I've been saying now for a decade is that Xi Jinping is serious when he talks about taking Taiwan by force. And all these operations, whether in The Middle East or whether they're in, you know, off the shores of Venezuela or in The Caribbean, will look like child's play compared with a major naval war with China over Taiwan. The scale is almost hard for us to imagine because we just haven't fought a war on that scale since World War two.
Speaker 6:Really, since the battle of Lady Gulf in World War two, we haven't seen something of that scale. And I think one of the disadvantages, I almost hate to call it that, that we have is that in a in a republic like ours, in a democracy like ours, we're very sensitive to casualties, rightly so. We have an all volunteer military. We don't wanna spend lives uselessly. Right?
Speaker 6:I mean, the American people won't stand up for that. In a in a dictatorship, in a Marxist Leninist system like that in China, I don't think Xi Jinping cares if he loses 10,000, 20,000, 50,000 PLA soldiers to achieve his lifelong ambition. This is actually a lesson that endures from the last time we fought the communists on the battlefields of Korea, on the Korean Peninsula. They were just far less sensitive to casualties. So I only bring that up to say there are certainly lessons that are relevant across the world, but there are certain things peculiar to the nature of the adversary we face in China that I don't think it is we that I think makes it a much harder problem to deal with than Venezuela, if that makes sense.
Speaker 1:Yeah. Completely.
Speaker 4:Wild What's
Speaker 6:up with the gong? Can I ask about the gong? Is that you know, I gotta gong. Course.
Speaker 2:Of course.
Speaker 1:The gong. There we go. The
Speaker 2:Gong is usually The the Gong is usually a celebration of funding rounds, big numbers, milestone. OS. Yeah. Mean, there's big numbers. This is a this is obviously a massive deal.
Speaker 2:And so Yeah. Totally Gong worthy.
Speaker 6:And the packers beat the bears.
Speaker 2:So There we go.
Speaker 1:We have
Speaker 6:a lot to celebrate. You know? There's a lot going on. A lot of numbers.
Speaker 2:And we should ring the Gong every day that Xi Jinping doesn't invade Taiwan because that sounds terrible. And I don't want that to happen. And you just delivered a very chilling, you know, potential sci fi future where that doesn't happen and it's miserable. But thank you for everything you're doing to stop that from happening because I very much want peace in the world and in the INDOPACOM region. And, of course, you and the rest of the team over at Great to you.
Speaker 2:Working very hard on that. So thank you so much for taking the time to come and chat with us.
Speaker 6:Thank you, guys.
Speaker 2:Merry Christmas.
Speaker 6:Peace peace peace on Earth.
Speaker 2:Peace on Earth.
Speaker 1:Peace on Earth.
Speaker 4:See you.
Speaker 2:Up next, Turbo Puffer, serverless vector and full text search built from first principles on object storage. Fast, 10 x cheaper, and extremely scalable. We have Sager and Jetty, the cohost of Breaking Points with Crystal and Sager. Obviously, the realignment podcast, the second time on the show. He's also a girl dad.
Speaker 2:Welcome to the show.
Speaker 1:Shooting up.
Speaker 2:How are you doing?
Speaker 1:Looking sharp.
Speaker 5:Good to see you, gents.
Speaker 1:Good to see you.
Speaker 2:How's the family? Merry Christmas. How's how's the holidays?
Speaker 5:Thank you. Merry Christmas to you all. Family's doing well.
Speaker 2:That's great.
Speaker 5:We've she's she's old enough that we've got her pigtails going. This is true girl dad. Yeah. It's as good as it gets.
Speaker 2:Yeah. That's amazing. Well, I'm glad that that's going well because it seems like everything else on your timeline is not going well. What is if you had to pick one to snap your fingers and eliminate, would it be, you know, rising energy prices from AI data centers or or sports betting at the at the touch of everyone's finger all over the world?
Speaker 1:Impossible. Impossible question. Very tough
Speaker 5:because one is gonna be Wait.
Speaker 4:Wait. Before
Speaker 1:you before you say, is it okay if I bet on this?
Speaker 5:I'm sure somebody
Speaker 2:already out there.
Speaker 5:There's gonna there's gonna be a market that that's gonna exist, in terms of which one that I would pick. I don't know. Both are gonna be very financially draining to the American household. Sports betting in the immediate term would probably be the one Okay. That would ban immediately.
Speaker 5:But power use in the future
Speaker 1:Well, what was that reason? There's a reason
Speaker 2:That could
Speaker 5:be bad.
Speaker 1:There's a I I saw a study floating around that in states that sports gambling was legalized, like, the average credit score drops, like
Speaker 5:Yep.
Speaker 1:10 points or somewhere in that range. So it has, like, effect effectively, like, a direct impact on
Speaker 2:Do you think that sports betting is something that will come for us all? Because I the the odd thing is that I have, you
Speaker 1:know John and I John and I have, like, some weird genetic, like, immunity because we went to Vegas for f one and didn't Uh-huh. Gamble at all, had no I I have zero interest
Speaker 2:in gambling. I don't have the bug or something. It just doesn't do anything for me. If I sit down and actually stress out
Speaker 5:for us all. Yes. I'll tell you why it comes for us
Speaker 2:all. Okay.
Speaker 5:Even when if if you casually watch sports, casually watch the NFL. I don't sports bet. I think sports betting is bad. I still know the line on every game.
Speaker 2:So in a way you know who's going throw.
Speaker 5:That's how
Speaker 2:I'm well,
Speaker 5:no. I'm like, oh, well, so and so is the favorite or the over under on how many yards somebody is going to throw. I shouldn't know that. People shouldn't know, but I do. Even just casually, you know, the last time I was on here, I talked about how I think that there's a media bubble in sports because I think sports gambling is just pumping all these money into people with microphones who talk about sports.
Speaker 5:But that's part of the issue is in all mainstream sports coverage from ESPN, pardon my take, everywhere you go, a daily segment is I like the over. I like the under. Yep. Here, you're gonna take the first half. And so even if you don't bet, you can't help but think about the sport without thinking in sports betting terms.
Speaker 5:And that's what I would say is like frame domination, you know, where even for people who don't bet, they have to think in betting terms. Yeah. Maybe winning that's winning in their part.
Speaker 4:Yeah. Maybe I have a
Speaker 2:weird, like, a weird perception of it because I I I also don't watch sports. I I really I really I watch like movies a little bit and Yeah. But but I there there's no there's no sports that I follow like regularly. And so I'm I'm like, I'm not even getting into the top of the funnel for this stuff. And so it's really really hard to ladder me down and so a I'm little bit more mean.
Speaker 1:So, of course, you were excited to hear that Trump would consider eliminating taxes on gambling.
Speaker 2:This must have been paid
Speaker 4:for you.
Speaker 5:Well, okay. Let let's talk about this though, guys. Yes. Because he said gambling winnings. Yeah.
Speaker 5:Gambling winnings. And what I was crashing out about was there are no winning gamblers. It doesn't exist. There's a longitudinal study of sports bettors. Only four percent of people over five years ever took profit.
Speaker 5:Four percent.
Speaker 2:So it is a similar
Speaker 4:issue. Four percent.
Speaker 2:Yes. Alright. Here we go. Let's be in the four percent. I'll take those odds.
Speaker 2:You're telling me there's a 4% chance that I could be one of the greatest chance. Gamblers ever. I love those odds. I'll take them all day.
Speaker 5:It does exist.
Speaker 2:I got the over on me becoming a generational gamer.
Speaker 5:I will tell you if if I had to bet, I would bet on both of you. But but, statistically, it would be a bad bet. And so the reason I was crashing out is because that is going to give advertising to casinos and sports betting apps who are like, oh, your winnings are tax free. There are no winnings. The winnings are fake.
Speaker 2:Yes.
Speaker 5:96% of you are losers. Yes. And all it will do is it'll increase that funnel of people who may not previously have sports. It'll be like, alright. It's tax free winning.
Speaker 5:I mean, I can't lose, right, except I'm going to lose.
Speaker 2:Yeah.
Speaker 5:So I think it's it's really disgusting, basically just giving away
Speaker 1:Well, we don't know what's gonna happen yet. There was a
Speaker 2:offhand comment, and hopefully
Speaker 1:hopefully it doesn't
Speaker 4:go anywhere.
Speaker 2:Well, since since you're the resident, Puritan on this show, do you I mean, do you believe that you can response that you can drink responsibly? You can have a glass of wine every once in a while? Obviously, you don't wanna become an alcoholic. Can you ever responsibly sports bet? Like, Bowl squares?
Speaker 2:Sports. That was that was that was the only thing that I ever Right. Did in college was I was in an office setting, they said, hey. There's squares. You put down $10.
Speaker 2:Whoever gets the right square gets a $100 or something.
Speaker 5:I I have never said people can't responsibly sports bet, but what I wanna highlight is that responsible sports betting would put all these companies out of business. Okay. They literally cannot operate without addicts. Yeah. Like, what I'm trying to highlight for everybody is responsible sports betting would end the industry as we know it.
Speaker 5:The vast majority of the profit comes from a very small percentage of the customers, which is why,
Speaker 4:look, this is the casino model.
Speaker 5:Right? The the whales are the ones who fuel everything, and they lose the most. So that's why they shower these people with gifts, and they call them every day, and they invite them to games, and then send them to concerts. And all this stuff is
Speaker 2:we're gonna get you coin flip
Speaker 1:plus you what did you think about the the policy the, like, an MBS policy in Saudi on, like, you gotta be in your bag to to be getting Yeah.
Speaker 5:Cracking open a
Speaker 1:cold blood, boys. So,
Speaker 5:I mean, in principle, I'm I'm smiling a little bit. But no. I mean, because I lived in The Gulf, guys, I can explain this to you. Okay. Okay.
Speaker 5:That's just a way to target the Indian laborers, so I oppose it.
Speaker 4:So the way that it works over there
Speaker 5:is that they create this entire social structure so that all the Indian, Pakistani, and all these other laborers, like the day laborers Yeah. Are basically excised from all polite society.
Speaker 3:Yeah.
Speaker 5:And they don't want them drinking, so they're just gonna set an income cap to make sure that the foreign laborers don't get to have a drink as well as their own people. And it would just apply to, like,
Speaker 6:the
Speaker 5:wealthy white, expats. So Sure. Because I know that it's just basically going to further immiserate their, like, slave labor population, I do oppose it. Mhmm. But, you know, just broadly, you know, I just wanna get to the fact, you know, from the gambling thing.
Speaker 5:Like, there is no such thing as a gambling company that can operate profitably without with responsible gambling. Like, if if it literally would cease to exist. And remember, because people always forget this. The sports betting apps, if you're actually good, they ban you. They literally do not allow you to place any large wagers.
Speaker 1:Oh, they limit they limit you. They say we want you to be responsible here.
Speaker 5:Eight no. No. No. They don't limit you because you're responsible. They
Speaker 2:think Nate Silver is banned from sports betting.
Speaker 5:He is. Yeah. He's he's he's limited on all major apps. My major question when somebody tells me, they're like, oh, I'm pretty good. I'm like, oh, really?
Speaker 5:I'm like, have you ever been limited? And they're like, no. I'm like, yeah, you're a loser then. I'm like, if you're any good, you would just be limited.
Speaker 1:Being It
Speaker 5:means you're a loser.
Speaker 2:Yeah. Well, you need, like, a complicated network of, you know, people that can make best decisions. Accounts. Yeah.
Speaker 5:It's a whole thing.
Speaker 2:And, I mean, we were just talking to Matt Levine about this. Like, Susquehanna has a desk, like, an actual trading arm of their firm. Like, it's very serious. Like, the guys some guys trade oil and gas. Now there's people that are trading trading the I can't name a sports team.
Speaker 5:The Sports lines?
Speaker 2:The Yankees.
Speaker 4:Yeah. Anyway
Speaker 5:Well, that's the thing. The real bettors, they don't care about the sport at all. They're just looking for value. They're, like, cons they're they're always betting on, like, golf and
Speaker 2:It's tennis where
Speaker 4:like Yeah. Cricket.
Speaker 2:Yeah. This one is at the 2AM halfway around the world, but it works for you, so you're gonna play. Right. But but Exactly. I mean, in terms of, like, the actual politics of this, how does this how does this wind up becoming like, where does this go over the next four years?
Speaker 2:It seems like Trump's sort of, like, leaning in. But is this actually gonna is there a constituency here of people that wanna say, like, hey. Maybe we need to rethink this at the national level.
Speaker 5:Well, already the tide is turning, guys. More recent Gallup polling showed that all age groups, including young people, the most increase is against sports betting. The governor of Ohio, Mike DeWine, he actually said that if he could go back in time, he would never legalize sports betting knowing what he knows right now. I think people can feel it, man. It's the most expensive advertising real estate in the world Yeah.
Speaker 5:Is all being bought by these gambling companies. You can intuitively feel that this is off. You know? Nobody's getting rich if they're able to afford all of the stuff they're able to put in front of you. So I think America's beginning to turn.
Speaker 5:The Trump administration very recently, you know, you didn't let me crash out on what I'm crashing out the most on, which is weed. Oh, yeah.
Speaker 2:You got know,
Speaker 5:the Trump administration is making their vice play right now. You know, they're doing very badly with young voters. Mhmm. So they wanna try and reschedule weed. And, yeah, let's do some gambling winnings and the TikTok thing.
Speaker 5:It's like this libertarian, kind of giveaway. But I I I think that really misunderstands why all of these younger people are even turning on the administration for economic reasons in the first place. The reason they resort to all these horrible vice activities is because they cannot afford, or at least feel they cannot afford the very basics of life like health insurance, being able to buy a house, crushing interest rates for a mortgage. So I would spend more of my time on that rather than a cheap trick like weed, but, you know, that that would require actually doing something.
Speaker 2:Maybe you get busted for weed, the arresting officer flips a coin, 50% chance you get a chance, 50% chance you get.
Speaker 1:Let's let's talk about another thing I'm sure you're thrilled about, the Disney OpenAI deal. Yeah. I think it's I think it's incredibly for OpenAI.
Speaker 2:It's really good.
Speaker 1:So I just I wanna get I want you to agree with me first that it's bullish for OpenAI at least over the next year that they're gonna
Speaker 4:have exclusive profit.
Speaker 2:Yes. Yes. Yes. Literally. Oh, yeah.
Speaker 2:Yes. Literally. Because Yeah. Like like, if you're a dad and your kid comes to you and says, like, I wanna be in Frozen or I wanna be in Star Wars, well, there's only one app that can deliver that. And even if Nano Banana is a little bit better for today Right.
Speaker 2:It's like, you'll go to Sora because it's there.
Speaker 5:Yeah. I It's probably good. Sure. It's bullish for users. Yeah.
Speaker 5:It's or for for creating more users. I think it's one of the worst things that I've ever seen. I mean, last time I was on here on the show, I was like, Sam Altman is like, yeah. We're gonna do AI porn. And I was like, oh, well, I thought you were gonna cure cancer, but okay.
Speaker 5:And so now we're gonna have Disney princesses, to addict children like you just said so that daughters and, you know, others will come to their dads and say, can
Speaker 4:you create a video of Elsa doing saying my name and doing this, this,
Speaker 5:and this so that we're continuing to breed the phone addiction? And as you guys all know, we're also gonna see the most disgusting pornography known to man as a result of yes. I know that they have
Speaker 2:control problems very
Speaker 5:easily. They're no. They're not. No. They're not.
Speaker 5:Have you guys been
Speaker 4:on Sora? Have you been on Sora or Grock
Speaker 5:or any of these? They're not that good at it. Okay? You people people have been playing around. They've been.
Speaker 5:We're trying to create some pretty disgusting John
Speaker 1:is a is a a little too confident that the the I'm pretty
Speaker 2:I'm pretty confident. I also have Absolutely.
Speaker 1:Yeah. I just think I I don't the Internet will always figure out a way to jailbirds anyway.
Speaker 5:Will always find a way.
Speaker 2:Earlier in the show, went to Sora and I said, put me in a Sora video fighting Spider Man and Darth Vader
Speaker 4:Okay.
Speaker 2:And said this content may violate our guardrails considering concerning similarity to third party content. So whatever deal they announced, they haven't implemented it yet because I got completely blocked. But I don't know. As I've scrolled, I've I I don't scroll Sora that often, but as I've scrolled, I have not seen shocking stuff. I was reflecting with Jordy about some of the crazy, crazy stuff that was on the Internet when when I grew up.
Speaker 2:I mean, the stuff that people would send you a link to, you'd open it up. It would be, like, jump scare level. I feel like I have not gotten that from ChatGPT randomly. I have not gotten
Speaker 1:I think I think if you wanna make the the argument that, you know, this is
Speaker 2:Mhmm.
Speaker 1:So bad because it's gonna get kids more addicted to devices and their phones. Like, you just gotta go even further and say, like, well, we should ban all electronic devices for children or buy and and maybe maybe maybe maybe maybe you're Speaking brother. Yeah. Yeah. Well, how do you how do you feel about some of the
Speaker 5:starting to
Speaker 1:speak about that law in Australia that's that's banning social media? Yeah. Love You don't think it's gonna create a bunch.
Speaker 2:Don't Why
Speaker 1:why put it on the parent?
Speaker 2:Why I mean Yeah. So my concern there is plenty of evidence out there. There are plenty of access controls. You can set a passcode. You can I mean, yes?
Speaker 2:Like, the really inventive 13 year old can go out and make the money to buy the iPad and to hide it under their bed every night. But, like, in general, parents Mhmm. Do have the ability to, you know, effectively be the own authoritarian of their home. Why do you need the government? Why do we need a nanny's Yeah.
Speaker 5:My concern with these laws guys understand yeah.
Speaker 1:Go ahead. Yeah. My my my main concern is if you tell a group of young people like, hey, you can't use these apps. Mhmm. There will be new apps created.
Speaker 1:It's not hard to make a social media app. And there'll be new, like, kinda homegrown, wild west social media apps where there's no reg like, the the the properties aren't doing any content moderation. They don't have any groups that are trying to make sure that that that, you know, pedophiles are not able to get on, etcetera, etcetera. So I think it'll just create a bunch of, like, dark corners of the Internet that could very well be worse for kids.
Speaker 5:Mhmm. It's certainly possible. But to just answer, the spirit of the question, which is basically, like, why should parents not be the sole responsible ones for this? In the same way that social media only works when everybody's on it, not being on social media works best when nobody's on it. So if you talk to Jonathan Haidt or others, what the the best and most successful experiments for schools, for example, which are phone free or people who are opting out of of social media is being able to be in a social network where everybody else is also not on social media.
Speaker 5:Because one of the things that's often raised is like, oh, they're missing out on, I don't know, school drama or communication for this, this, and this. And they feel as if they're explicitly removed by the parent from, like, the social way that their high school or their social network operates. Whereas by explicitly making it a top down way of saying, no. Nobody's engaged in it, it's gonna facilitate a lot more actual, like, pro social, real social behavior and make it easier to in order to basic look. At the end of the day, what we're trying to talk about and this is what I always argue with libertarians.
Speaker 5:Like, no. This idea of, like, a totally free society is ridiculous. Like, there are so many different ways in, like, you could act, quote, freely, which would impinge upon my freedom. That's why we have, you know, we have government enforcement mechanisms. Ultimately, what we're trying to do on this is to decide what is the optimal way and for our outcomes to facilitate happiness in the family unit and for our children.
Speaker 5:And there's just too much evidence here on social media and on phones. So that's why I get with the Sora thing, especially in the totally unfettered, like, Wild West that we live in here in The US. I just know this way that this is all gonna go. In a perfect world where everybody is very informed, but, you know, right now, in a lot of ways, there's a huge class divide on phones. Like, from the very, very richest people you know are probably the least likely to actually give phones to their children.
Speaker 5:But the anxious generation might be the best selling book in The United States. But let's all be honest, like, it's a class signifier. Right? It's something that the top 25, 30% have read, are implementing, have the time to be able to. And then the iPad kid thing is still definitely not yet fully known, you know, for a lot of other people.
Speaker 5:And so I I think everyone should try to live under a more uniform standard. And, yeah, that's why broadly I take your concern, dude, about Australia and, you know, like, backwater ways to get around it. But the government's sending a signal, and we have enough data on gambling, on other all other vices, that when you send these signals, especially with a real information campaign, the behavior will reduce. And there's a lot of different ways that we can deal with the backdoor ways of getting around. Never make anything zero.
Speaker 5:How do we try to facilitate the best outcomes for everybody, for all of our citizens? That's the way I would look at the Australia policy.
Speaker 1:Yeah. Have you ever thought of setting up a, you know, breaking points, you know, one of these neo cities, you know, you go down to South America and set up your pure
Speaker 5:I was down to Honduras. Yeah. Down to Honduras. No. I don't have enough money for that.
Speaker 5:Right? I I don't have nearly enough to buy off the president and then get him pardoned whenever he deals drugs. That's that's not my bag. I'll leave that to a few of the other guests, on your show. But no.
Speaker 5:Look. I mean, at the end of the day, like, we have our country. We can just do it here. We don't need to leave. I think that the people
Speaker 1:That's always been our feel that there's problem.
Speaker 2:Yeah. No. No. That makes sense. Let's talk about h h two hundreds.
Speaker 2:Let's do it. NVIDIA is now able to export them to China. The previous rhetoric was we're not gonna give China the best. We're not gonna give them the second best. We're not even gonna give them the third best.
Speaker 2:We're gonna give them this nerfed h 20 chip that's two generations behind, blah blah blah. Now we're giving them the second best effectively. The argument in favor seems to be keep the government out of the boardroom, and Jensen is a is a founder of an American company. Let him sell everything. Again, to
Speaker 1:your point of view,
Speaker 2:it doesn't seem like you're doom pilled. Is this nuclear weapons? No. It's AI slop. Let them
Speaker 4:Yeah.
Speaker 1:AI if AI if slop is so bad, don't you want
Speaker 2:Don't
Speaker 1:want our enemies that have
Speaker 5:They're much smarter than us, and they're not gonna allow any that.
Speaker 4:They don't have any problems over there
Speaker 5:about Sora or about image generation.
Speaker 1:Do they really, though? Do they have, like, incredibly high rates of youth unemployment? Are they not using the phone to kind of medicate?
Speaker 2:What are those 20% doing all day?
Speaker 5:Yeah. I mean, that's a great question. You know, is it phone related, social media? I'm not entirely sure. They don't seem to have the same issues at least in our way.
Speaker 5:Obviously, they're gonna have their own unique circus set of circumstances. But on h two
Speaker 2:Imagine being one of these unemployed Chinese youth and having Yeah. No job, but also no slop, no sports betting, no weed. What are you doing all day?
Speaker 5:You're getting shamed by your elders
Speaker 3:for not having
Speaker 5:a job.
Speaker 2:That's what
Speaker 5:we need. Alright.
Speaker 2:That's I what we suppose. That's good. I suppose.
Speaker 5:Yeah. No. That's that's that's great.
Speaker 2:That's we need successful. Maybe you're practicing. Maybe you're growing. You're studying the blade.
Speaker 1:The blade.
Speaker 2:Yeah. Hopefully, you're studying the blade.
Speaker 5:Studying the blade.
Speaker 2:But anyway I love it. Sorry. Yeah. To be h two hundreds, it seems like a wild You
Speaker 5:know, it it say what your your kind of articulation of the h 200 policy, it's more complicated. And I've spent the last couple days interfacing with some of the guys who are pro exporting h 200. I'll give their their argument. Their argument is to keep China on The US and NVIDIA technology tree
Speaker 2:Yep.
Speaker 5:As long as possible. So what would happen according to them is if we cut off h 200, what it would mean is that Huawei would have the impetus and the incentive to not only compete, but to have all of the developers in China and everybody there explicitly build the software, everything on top of that. Right? And so the argument that was posed to me was that it was a bad idea and a mistake to not have Android be very to not have Android and other operating systems that are explicitly US based be dominant in China. And that the domination of HarmonyOS is actually bad for The United States.
Speaker 5:And here was my counter, and I'm really curious for what you guys think. Is that in a world as we see with Apple, where we see a huge portion of US business which is based in China, there has never been, at least in my opinion, over the last twenty five, thirty years since the PNTR with China, the reopening of trade relations, we have never had a situation where we have a huge business penetration in China, and that company ever really stands more for American interests. Usually, happens is that the Chinese use US market penetration, like US companies market penetration, to make that company a lot more malleable to Chinese interests and to basically make them this multinational actor, which because of their ability, policy, and scale, they can shape for their own interests and strategic, let's say, direction. So the point that I really am trying to make here is that I understand the technology tree argument entirely, but the longer that Jensen, Nvidia, and others see China as this gold mine, which he obviously does, he you he's over there once a quarter kissing their ass on camera, you know, out
Speaker 1:in open space. They have a they have a dedicated, like, r and d center in Shanghai.
Speaker 5:Yes. Oh, yeah. Right. But not it's not just that. He goes there and explicitly is like, I wanna continue to do in business in Beijing as long as possible.
Speaker 5:He's been lobbying for against a lot of these export controls. It's obvious that a lot of his stuff is getting trans shipped via Singapore or whatever, even the Blackwell chip. I'm sure you guys saw that very recently, with the deep sea research that came out. But the point the point remains, he knows it's good for his business. The more that this remains kind of an opening, it's gonna have somebody have to straddle both sides, and it's gonna be a lot more beneficial, I think, for the ability of the Chinese to shape him as opposed for us to be able to have our companies working in our national interest.
Speaker 5:And, look, I mean, there are more libertarians who are listening to the show would say, our company shouldn't even work towards our national interest. Their sole job is to make profit. I think that's a ridiculous argument, you know, sitting here in Washington. And especially just over the last thirty years, I just don't think that there is a good example from Hollywood to tech or anywhere else where they've made a lot of money in China and they become, you know, very reliant on that business line where they have not shaped themselves as lobbyists against, you know, any more hawkish Chinese action.
Speaker 1:I I think the my read on it generally is that selling into China will make it more expensive for them to reduce their reliance on Right. The USAI stack. They still will do everything in that they can to reduce that reliance.
Speaker 5:Which they are.
Speaker 1:Yeah. But but, yeah, it's gonna be more expensive because there's clearly the Chinese companies and AI have a lot of demand for chips and, you know, dollars that they spend with Nvidia and other other players are dollars that aren't going back into local, you know, kind of national champion.
Speaker 2:I'm trying to think of a counter example. And all I can come up with is the Hermes Birkin bag. As we've exported the Hermes Birkin bag to
Speaker 5:Well, that's French. That's a French
Speaker 2:company, not a US company. Yeah. Right? So it's Western. Really.
Speaker 2:They have become dependent on it. And the more Birkins that they buy, the harder it is to rip out the authentic Birkin bag, much like the NVIDIA GPU where the CUDA stack and the open source CUDA ecosystem has been built up around. No. I I I'm I'm still somewhat sympathetic to the to the, you know, hooked on the AI stack, replatforming.
Speaker 5:I I just wanna say, I don't think it's fully I don't think it's wrong. I think it misses the forest for the trees. They're looking at it purely from a technology question. I'm trying to point out the dangers of extending this relationship. And also, look, let's look at the Chinese side.
Speaker 5:The Chinese were like, yeah. We may not even allow h 200 in the country because they want Huawei to compete.
Speaker 4:They want
Speaker 5:to grow.
Speaker 4:Yeah. But I think they said that.
Speaker 1:I think they said that because of Lutnick's comments that they were very offended by, which he was like, we're trying to get him addicted. We're not gonna give him our first, second, third, fourth. We're gonna give him our fifth best. And they were like, actually, we don't want any.
Speaker 2:And also, like, the country is not a monolith. Like, it's very clear that, like, even if the CCP says, like, absolutely not their ban, like, there's still a world where, like, a Chinese company smuggles them in and uses them A 100%. Against the CCP's will because and, like, that could have a dynamic where that boosts the CUDA ecosystem further. Although I don't know why you'd be open sourcing CUDA software if you're stealing NVIDIA or smuggling NVIDIA in. Yeah.
Speaker 2:That's probably a good way to draw the ire of the CCP. But but who knows, of course. You know, we'll we'll we'll see how this play plays out. I I I still think a lot of the reason why this h 200 news is not so much of a firestorm is because this year has been somewhat of the end of the AI doomer narrative. And just we've been backing off this idea that these are nuclear weapons.
Speaker 2:More and more people have been using the models for I mean, Chachi Pitney is three years old now. OpenAI is 10 years old now. And and after three years of everyone saying or all the, you know, the wild crazy people in Silicon Valley saying, it's gonna kill you next year. It's like, okay. Boy who cried wolf once the sky is falling the
Speaker 1:second year. Gonna kill you kill you more slowly because of everyone falls in love.
Speaker 2:Yeah. Yeah. It's become it's become more abstract. And so I think there's this idea that, like, oh, just like one more training run and then it's the super intelligence and it's run away and it's gonna completely dominate. And, like, it's it's either The United States or or China.
Speaker 2:That narrative has kind of fallen by the wayside a little bit. And so I think people are maybe more accepting of export controls loosening. My question is just like, do you agree with me that it was a phenomenal l by the tech community to come out so early with this, like, AI is gonna kill everyone narrative? That just feels like AI is the first technology that we've had since, the phone, social media, software in the cloud, the Internet. All of those were products that I feel like they were technologies that were enjoyed by people for years.
Speaker 2:And then we had the conversation about what are the phones doing to us. Like but we got ten years of, like, phones are cool. Right? And then we got, okay. Maybe we should, you know, understand And with AI, it's like out of the gate, we hated it.
Speaker 5:That's why I'm I'm not yet ready to say, like, oh, they stopped saying that. I'm like, no. They still say it, guys. Like, Elon was on Rogan the other day being like, hey. You know, you you're never even gonna have to work again.
Speaker 5:Like, don't worry about it. And Jensen, what did he say recently on Rogan? He's like, all knowledge in the world will be AI. Yeah. And that's fine.
Speaker 5:I was like, is it fine? It's
Speaker 2:I was watching so I was watching Sam Altman on on Fallon, and and and Fallon comes to him with the with the premise of, like, give me the pros for ChatGPT. Give me some examples of how people can use it for good things. And then he's like, and I gotta ask you about the cons. Like, what are the cons of this technology? And I was like, no.
Speaker 2:No. No. If Tom Cruise was sitting there doing the interview, and he's like, give me give me the reason give me some reasons why, you know, moviegoers might like the new Top Gun. And then he's like, now give me some reasons why people might hate the new Top Gun. Tom Cruise would be like, what are you doing?
Speaker 2:Like, no. I'm not talking to you about the negatives of my movie. Get out of here. I'm here to promote my movie. And and same thing with, you know, any technologist that goes through the normal late night circuit.
Speaker 2:Normally, it's like, oh, wow. You you invented this new trinket. Like and you can buy it at the local Walmart this Christmas? Like, amazing. You you made a gadget.
Speaker 2:And with AI, we just it it's always about the the like, the negative has just been so thrilled.
Speaker 1:Well, that's because it's new. People learn their
Speaker 3:own fault.
Speaker 1:We people
Speaker 2:don't Yeah. That's what I'm saying.
Speaker 1:Yeah. It's like you could write a story every day about violence that happens in grocery stores. Right? It would not grocery stores have been around so long. It's Yeah.
Speaker 1:Everyone knows. Yeah.
Speaker 5:Like, you
Speaker 1:know, every time you walk through a grocery
Speaker 5:store controls all grocery stores. Okay? So it's like, you know, it's a little different. And look, I mean, again, to their point, like, Sam and them don't do themselves no favors. Like, he's like, I can't imagine raising a baby without ChatGPT.
Speaker 5:Look. Maybe just me. I'm like, woah, man. I I don't know. Again, it's just one of those where look.
Speaker 5:They sold domination of our lives, our tech our our not only in terms of our digital lives, but saying that they were gonna take away our physical ability to work, education. They said we're gonna take away all knowledge, and we're gonna feed it back to you. So I'm still not
Speaker 1:ready to You're a little bit. He
Speaker 5:said he said all knowledge will be AI. You're you're you're sort
Speaker 2:of piecing together, like, three different statements, which is fine. Yeah. But those are because that's how people perceive the tech industry.
Speaker 1:All Reddit all Reddit will be AI. There'll be one human on Reddit. Just running around and talking to
Speaker 5:That's the shit that they say, guys. They're like, you don't need to work anymore. What's this? Dario? I mean, you guys are acting like this is three years ago.
Speaker 5:I'm talking about, like, three months ago. You know? All the comments I just made, I think, are literally all within the last month. So the the they're continuing to feed the narrative. And I think people believe them.
Speaker 5:And and I think that's the danger.
Speaker 1:So fear They need to really sells to the capital markets. Yeah. Like, if you if you're if you're somebody that has capital and somebody tells you that, all jobs are going to go away or huge half of all knowledge work, what do you want to do with your money? You want give it to the guy who's going to take away the Right? And so I think that is the challenge is these people are having to go around and give the optimistic vision one hour.
Speaker 1:And then the next hour, do the fear based version of the story. And then the next hour, do the optimistic. But then the content just gets shared everywhere. Right? So it's like Right.
Speaker 1:Then everybody sees it. And they're like, wait, I don't really know what to believe at this point.
Speaker 5:Yeah. My my I mean, last time I was on the show, John, I have stolen your line completely. Credit card. I thought it was the best comp that I've heard is you you were like, I think this will be like the credit card. We just made transactions more frictionless.
Speaker 5:It created more wealth.
Speaker 3:Yeah.
Speaker 5:People built on top of it. And in in general, people's lives were, like, mostly better, and it didn't, you know, like, horribly change anything, but it definitely was very valuable. I I love that comparison. That's kind of the modal one that I'm working with right now.
Speaker 2:Leaks into all the different cracks. And I mean, was there was data yesterday from our our sponsor ramp that, 55% of businesses are they don't pay for AI. And that's like and it's slowing down. It's like flatlining too. So it's sort of like a bombshell.
Speaker 2:Like, Okay, like, there's a lot of businesses out there that are just like, I'm good. And it's like Yeah. They are good because they're using other products that probably have enough AI in them. And so if they're on POS system
Speaker 1:buying They're AI because they hired creative agency to make logo and the creative agency uses AI or whatever. Exactly.
Speaker 5:You know, their back end finance and and all of it. I I agree with you guys. But that also doesn't justify the valuations, and that also doesn't
Speaker 2:It justify might actually spend. Justify the valuations. I think it doesn't it doesn't, it doesn't justify the the panic and the fear and that that it's gonna kill everyone. It's like it's like, if we're talking about the credit card, it is, like, much more incremental. But, of course, there are other sides because we're we have the social media angle of
Speaker 5:the I agree that that's where it'll end up. I'm mostly with you, but I can't help but take them all a little bit seriously. I mean, these are the wealthiest, most powerful people in the world. So, like, when the wealthiest guy in the world says, I don't need to work anymore, and especially if you're walking out there and you feel very out of control of your own life, and you hear that, you hear about the data center stuff that I've talked about here, you have a lot of fear about your own children and their addiction. You're watching their behavior.
Speaker 5:I mean, do you guys ever see your kids as, know, like, my daughter is seven months old, man. She's crawling for the phone. Like, it's it's it starts so early. Like, already, I'm like, oh my god. I can't even use this thing in front of her.
Speaker 5:That makes me concerned. Does it make me a doomer? No. But it does make me feel like it makes me immediately calculate some of the downsides of the Yeah. Use of technology in
Speaker 2:my life. Her go for that phone might be what gets her into the 4% of gamblers that wind up making money. You gotta start her up.
Speaker 4:You gotta start her up.
Speaker 5:Forgot I about that. You're right. You're right. Yeah.
Speaker 2:Is there is there an optimistic story being told by the cannabis industry about weed anymore? I feel like that one is just like people are just like, yeah. Okay. It's it's
Speaker 5:Well, they're still faking medical benefits, which is completely bullshit. Yeah. I mean, they're they're still talking about supposed medical benefits. There's a huge new study that just came out in JAMA. Almost all of the so called medical benefits.
Speaker 5:Total BS. It's all fake. People just wanna get high. What would best
Speaker 2:allegiance? Oh,
Speaker 5:you know, oh, somebody you know, they're always talking about people with cancer.
Speaker 2:Oh, anxiety.
Speaker 5:They're talking about seizures, epilepsy. And the anxiety one is the fakest one of all of them. But, yeah. I mean, they're always like, you know, oh, it helps me sleep and it's like, well, it knocks you out. That doesn't mean it helps you sleep.
Speaker 5:But it's like, does alcohol help you sleep? No. It's actually makes you sleep, you know, 10 times worse. You may not be, you know, awake, but that doesn't mean that you're asleep.
Speaker 1:You'll be happy to know. We were looking we were looking at a new studio space here in LA and it checked every single box. It was a great space and it Yeah. And but right across from it, you could see out the window like a a pot store. I was like, no way.
Speaker 1:I would No. No. There's no no I just don't wanna look at the the flashing lights and the the
Speaker 2:There was another there was another studio that we looked at where it was like the royal flesh of, like, of, like, gambling sin companies. It was like the but the previous three companies had been, like Yeah. An adult content, a a weed company, and then also a gambling company. We were like, that is just a cursed building.
Speaker 1:It was like an amazing
Speaker 2:amazing building.
Speaker 1:We sold our broker. We're like, sorry.
Speaker 2:It's just like it has bad vibes. Like, we can't possibly be there.
Speaker 5:I totally agree. Oh, John. We should do debanking on the Oh, yeah. Thing.
Speaker 2:Yeah. Tell
Speaker 5:me. Yeah. This is so interesting, guys. So you guys know about the whole debanking, you know, Andreessen, Zuckerberg, everybody goes
Speaker 2:Operation choke point two point o,
Speaker 5:Nick Carter's been
Speaker 2:on the show.
Speaker 5:So the treasury the treasury department takes this seriously, and they conducted a study. And they just put out their report two days ago from the office of the comptroller. And I was reading it this morning, and it's like, oh, they've unfairly targeted gun companies. I was like, okay. You know, that's bad.
Speaker 5:They've untargeted unfairly targeted oil and gas. I'm like, oh, that's ESG. Yeah. We hate that. They're like, the banks have untargeted unfairly targeted the adult industry.
Speaker 5:And I was like, woah. Woah. I was like, hold on a second. Wait. What?
Speaker 4:Oh, yeah.
Speaker 5:What was that? So they are actually pressuring the Trump administration right now is pressuring via this report banks to do business with porn companies. Now why do the banks not wanna do business with porn companies? It's not just vice clauses. Yeah.
Speaker 5:Yeah. It's because they're afraid of the internal standards that all these companies have been doing now for decades, where they're often in violation of the law whenever it comes to children, exploitation, all of this, and they don't want anything to do with that. That's why OnlyFans, you know, had that problem at one point. So our great the the debanking conversation is now basically being weaponized, you know, by the government, to potentially force the largest financial institutions to do business with major porn companies.
Speaker 2:So this is pretty the whole license. He's like, I I've had enough. If you twist my arm on this one, I'm I'm gonna be getting in the White House.
Speaker 5:I'm so come on. The idea he doesn't wanna do business with the porn companies because he has a heart, like, get out of here. Okay? Like, they're desperate to take their money. They just don't want that risk.
Speaker 2:I don't know about that. It's not that big of an industry. JPMorgan has, like, trillions
Speaker 5:of years. What was it? 2,200,000,000.0 from consumers, in The US just last year?
Speaker 1:Big land deals, ranches. What do you think the odds are that breaking points a decade from now is just based on, like, a big ranch property in Montana, and you're just yelling into the microphone?
Speaker 5:It might it's it's possible, man. You know? Regenerative farming, just fully off the grid, except for Starlink. Right? I'll need Starlink to be able to zoom in, to be able to do shows like this.
Speaker 3:But it
Speaker 5:wouldn't be
Speaker 1:a bad idea. I I put it at 55%.
Speaker 5:You wanna make a market? Should we make a market on Cal Shi? Yeah. Well, make it a market. What what was Tarek's exact quote?
Speaker 5:By the way, Tarek, if you're listening, I've been trying to get in touch with you, man. Please come on my show. But, Tarek, what what exactly did he say? He's like, our goal is to be Tarek, Tarek,
Speaker 1:breaking points is like Sam going on Tucker.
Speaker 5:That was Yeah. Hey. That was good for Sam, wasn't it? Because it showed that he was open to, difficult conversations.
Speaker 6:So like I said, if he's
Speaker 2:truly in believes Silicon Valley believes that. But I I I actually do agree with you. I do think it
Speaker 5:was good. No. I mean, look. If if if you're gonna live in a world where you're gonna, you know, make all of these claims Mhmm. And you're gonna have a high level of distrust already from the democratic populace, then you're gonna have to go out there and defend your business.
Speaker 5:I mean, all of the big tech companies have been doing that or had done that for a decade prior. I know that they all now think that that was bad. I totally disagree. I think going on podcasts where you're just fluffing your product all the time makes you look even more disingenuous, and you should come face hard questions. But yeah.
Speaker 5:I mean, he said, we're gonna make a market between every difference of opinion. And, I yeah. So look. Mister Tarek, I would love to speak with you about why you think that's a good idea and vision for our future and some of the protections, that you may have in place. John, did you read the prediction thing I sent you about the Russian map?
Speaker 5:Love this story. War. This just came out. So I actually used to be an intern there. It's called ISW, the Institute for the Study of War here in Washington.
Speaker 5:What they do is they create battle maps.
Speaker 3:Yeah.
Speaker 5:Yeah. And so there was a polymarket market for, like, 1,300,000.0. This particular map. That was trading on this map. And there was, like, a 33,000 payout if Russia seized a particular town in Ukraine on this date.
Speaker 5:And the story that's now come out is that the guy who worked at the think tank altered the map specifically for that date so that the market would resolve in that thirty three thousand percent payout for that specific date of bet. And now, the the in the think tank has actually come out and said that they fired that person and that he violated their internal principles by going in and editing this map beforehand. And it was a sizable enough market. We're not talking about one of these $5,000 ones. We're talking about 1,300,000.0.
Speaker 5:So I just wanna highlight that, you know, just in terms of, how these prediction markets and all that should work. I've been reliably told no realistically large market, even trades on anything degenerate. I can't think of anything more degenerate, than betting on the fate of individual Ukrainian towns in a war
Speaker 1:of trade really dark dark ones.
Speaker 2:What if you just load what if you just load a billion dollars into a world peace contract? Oh, And then everyone has incentive to bring world peace around.
Speaker 5:You're gonna need a hell of a lot more than 1,000,000,000.
Speaker 4:If you're
Speaker 5:if you're gonna change me about 2,200,000,000.0, you're gonna get
Speaker 4:a shit load more than 1,000,000,000.
Speaker 2:Yeah. Maybe maybe maybe it's trillion dollars.
Speaker 1:I I but I do believe in the next, call it, one to two years, we'll see even darker markets Oh, yeah. Specifically around individual people. Like Yep. John was John was joking offline yesterday. He's like, Jordy, I'm gonna load a market that Jordy is gonna have a I'm gonna put a million dollars into a market that Jordy is gonna have an amazing year next year.
Speaker 1:And he's just
Speaker 4:because I'm betting on you.
Speaker 1:He's gonna he's gonna bet on me because he's my friend.
Speaker 2:He wants
Speaker 1:to bet
Speaker 2:on me.
Speaker 1:And then what what happens, somebody says, well, if I can make Jordy have a bad year, I can make a lot of money. So There you go. Anyways.
Speaker 5:Guys, the one I'm worried about the most is elections because, you know, now we have state not not just the national level. I I don't think the national level will be as corruptible, but what I worry about the most is individual counties, and these markets already exist. So, I mean, come on. Like, if you guys know anything about our election system, an individual clerk in an individual county, the ability to swing, let's say, a mayor's race. And people on Polymark already do these, like, parley esque style debate, you know, bets where they'll be like, all x counties in the state will go for Trump or something just because they have a little bit better odds.
Speaker 5:These are massively open to manipulation. County level races, mayoral, at the state representative level. There is just way too much of bill. Like, the one I just gave you all is the classic example of somebody being able to manipulate just because it was based on a think tank map.
Speaker 2:Yeah.
Speaker 5:And they couldn't they never thought, oh, some guy making probably $25 a year who makes the map isn't susceptible to a $1,300,000 market. But, I mean, the in a lot of cases, our election infrastructure, it relies on volunteers. You know? It's not even people who are paid. So I'm very worried about stuff like that or individual primaries where there's not as much scrutiny.
Speaker 5:They the yeah. I mean, already we've seen the there was the Google insider. Did you guys see that one? Well, I
Speaker 2:I couldn't get to the bottom of that because Yeah. What was weird was that that was that that was published by one of the one of the one of
Speaker 4:the Yeah.
Speaker 1:I was like, why are they why are they admitting to this? And it's like, no. They're not. They're bragging.
Speaker 2:And so and so I I I I don't know I don't know that I should even believe that it's real because it's so counterintuitive that you would, like, kind of snuff self snitch in that way. It was very, very bizarre and and I didn't see it like truly fact checked so I just kind of wrote it off as like who knows just chaos on the timeline. Right.
Speaker 4:I don't know.
Speaker 2:Anyway, thank you so much for coming on the show. Jordy, anything else? We could do this all day but we'll have to have you back a couple weeks.
Speaker 1:What are you what are you doing? Anything that fun this weekend? Let's lighten
Speaker 6:it up.
Speaker 5:This way. Yeah. Oh, we're just we're going shopping. Got a final final Christmas. That that's all it is.
Speaker 2:Merry Christmas. Let's play some Christmas music. Thank you so much for coming.
Speaker 5:Thank you guys for having me. Love you guys.
Speaker 2:Time. I love you guys.
Speaker 1:Love you, Dave too, man.
Speaker 2:I'll see you. See you. Bye. Let me tell you about getbezel.com. What a great way to go shopping for a luxury watch.
Speaker 2:You can shop up
Speaker 1:for 26,000
Speaker 2:luxury watches, fully authenticated in house by Bezel's team of experts. You can head over to getbezel.com. You can also get your loved one a billboard for Christmas. Pleasedo..com. Out of home advertising made easy and measurable.
Speaker 2:Plan, buy, and measure out of home with precision. You know, you can also put an Eight Sleep under the Christmas tree. 8sleep.com.
Speaker 1:How'd do last night?
Speaker 2:Without exception. Fall asleep faster, sleep deeper, wake up energy.
Speaker 1:I better have one.
Speaker 2:Ate sleep last night.
Speaker 5:87.
Speaker 4:I got
Speaker 2:a 90. I got a 90.
Speaker 1:You're
Speaker 2:Lay that sound if
Speaker 1:you You're cooking the books. You're cooking the books. You're cooking the books. You're putting a bunch of weights you're putting a bunch of weights in the bed when you leave in the morning.
Speaker 4:No. No. No.
Speaker 2:Tyler No. Loaded $10 into no, John will have a good sleep. And so I had to do it to win the $10.
Speaker 1:I hope hope everyone enjoyed the the conversation with Sager. Yeah. I think it's it's critically important that TVPN not just be an echo chamber of capitalism, libertarianism. I think it's important to have an open dialogue.
Speaker 2:You like an echo chamber?
Speaker 4:I love echo chambers.
Speaker 2:I love echo
Speaker 4:I was gonna say, I mean,
Speaker 1:I was born in that.
Speaker 4:I I feel like I disagree with every single one of his points.
Speaker 2:Okay.
Speaker 4:Yeah. Like, elections, like, that's like there's so much value in the information of like who people think is gonna win. Yes. But If you're a local business owner
Speaker 2:Yes.
Speaker 4:There's a local election
Speaker 2:Yes.
Speaker 4:Like there's and and maybe one one of the candidates says, oh, we're gonna do this this tax. We're gonna start, you know, change the the regulation around billing certain types of billing certainly. Yes. There's so much value in knowing that.
Speaker 2:Yes. Yes. Seeing that six months in advance, even even one month
Speaker 4:in advance, that is valuable. If if if he see if he's saying that someone has the incentive to, like, actually mess with the Mhmm. Election Yeah. I mean, that's like a felony. So, like, after one person, like, does he think that more people at the ISW are gonna mess with the map?
Speaker 2:Yeah. I don't know.
Speaker 4:Yeah. It's like one yeah. Okay. Yeah.
Speaker 2:The first
Speaker 4:time it happens, it's bad.
Speaker 2:It's like, If there's if there's if there's economic incentives to to meddle in local elections, like, yeah, like, at at the end of the day, are laws. I don't know. I think yeah. I I would be much more worried about a normalized situation of the opposite where the insider trading. Not changing the underlying outcome of reality based on a big market, but the opposite.
Speaker 2:Like, you know how the market will resolve, so you size up the market as much as possible. But we're clearly gonna be grappling with both of these issues going forward.
Speaker 1:Sean in the chat says, lock me in the echo chamber. Never let me out.
Speaker 2:That's amazing. Well, speaking of Sean, we got a post from Sean Frank here. He said, we are in the shop ads beta and it has been great. Eric Souffert has a story here. He says, Shopify is expanding
Speaker 1:shop getting into ads.
Speaker 2:Pains with a new ad format that allows merchants to recommend products Holy Christmas. On other merchants' websites. So you're already in the checkout flow. You're buying a Ridge Wallet, and you see, would you like some Tacovas to go with that Ridge Wallet? That that's basically what's happening.
Speaker 2:Very cool. David Stickland says, tell me why you would you would wanna encourage someone to click click away from Ridge to another website after you paid to get them there. And and I and I think the answer is that it's basically like an after sell post purchase. You have someone and and you can and you can cross sell. So you're not necessarily surfacing an ad that will take someone away from your checkout at the most valuable point.
Speaker 2:It's that
Speaker 4:Yeah.
Speaker 1:The shop app
Speaker 4:The way I use the
Speaker 1:shop app is for like tracking an order. Right? Yeah. And so if I'm in there
Speaker 2:Yeah.
Speaker 1:And I bought something and then I get served something else Yeah. It says like, hey, you bought this. You might like that. It's a it's a pretty it's it's just a valuable ad placement and I think it's pretty additive. Well, speaking of advertising, John
Speaker 2:wander.com. Here's an ad for wander.com. Book a Wander with inspiring views, hotel
Speaker 5:room, I hear and you're crazy place.
Speaker 2:Dreamy beds, top tier cleaning, and twenty four seven concierge service is speaking
Speaker 1:Quinn had a post Yep. Here. I've been seeing this lately. Meta has a special ad unit that they reserve for themselves. It's like a personal ad Yes.
Speaker 1:For the Meta Ray Ban classes. I've gotten this actually multiple times this week. A fantastic placement.
Speaker 4:And it what's notable is you actually have
Speaker 1:to hit the x to like close it out. So if you just
Speaker 2:Oh, it'll
Speaker 1:see it and scroll past it and you close the app and join again, it'll just be back there. So really one of the greatest ad units of all time.
Speaker 2:It's a fantastic ad unit.
Speaker 1:Well well done to the Meta team. And, yeah, sometimes you gotta save the best for the family.
Speaker 2:I mean, would advise this to anyone who's starting a sunglass business.
Speaker 1:Just Get a get a few billion DAUs.
Speaker 2:Billion DAUs on a major social app so that you have Yeah. So effectively unlimited Take
Speaker 1:it Yeah.
Speaker 2:Use Have a bunch of cash That's true.
Speaker 1:Then invest that into the sunglasses.
Speaker 2:Yep. I mean, these with this ad unit, like like these the glasses better move. I better be I better see some big numbers. Yeah. Because everyone should be aware of these at this point, but you know, it is is
Speaker 1:hard to people to technology. It is a good gift. Right?
Speaker 5:A great gift.
Speaker 1:It's a kind of thing a lot of people wouldn't necessarily buy for themselves Totally. But they'll, you know, get some enjoyment out of it if if it's under if it's in a stocking. Flo over at Linde is highlighting Max Meyer's post asked about by the Wall Street Journal, weather spending 500,000,000 renovating the 5th Ave Tiffany flagship. Bernard Arnaud replies, you cannot dream when you talk numbers. When you create desires, profits are a consequence.
Speaker 4:And I just have You need say to
Speaker 2:be creating desire.
Speaker 1:That is one of the hardest lines Yeah.
Speaker 2:Of of the ironically, the most profound business insight I've read this year makes sense that it would come from the biggest luxury company in industry that only exists because of its ability to create desire, arguably the clearest distillation of the function of marketing. I I have no idea if that can be applied to tech at all. I agree with Flo that it is a profound business insight, but I think it should probably be used sparingly because I can imagine so many scenarios where an enterprise software CEO would go off and spend $500,000,000 renovating an office and realize that it did not really move the needle for their business because what what they are selling is not a Birkenberg.
Speaker 1:Yep. In other news, Lululemon stock hashtag Lulu surges over 12% after the company's CEO says he's resigning. This is not what he was. Not as a manager, as an executive of a public company, you never want the stock to rip when you resign. I'm wondering if we get Chip back in the driver's seat.
Speaker 1:He's been
Speaker 2:Oh, yeah. He was kind
Speaker 1:of an activist Very kind a proxy fight. I would be interested to see what he would be able to pull off back Speaking in
Speaker 2:of other stock pops, this is insane.
Speaker 1:Speaking Google of stock pops.
Speaker 2:Google is about to turn a $900,000,000 investment in SpaceX into $111,000,000,000 if the $1,500,000,000,000 valuation materializes. There are some crazy big tech, like, circular deals. I'm pretty sure didn't Jeff Bezos invest in Google? If he held, then he gets SpaceX stock as well, and it all goes back to Bezos, Jefe Boss.
Speaker 1:The final boss.
Speaker 2:The Jefe Boss.
Speaker 1:The final boss.
Speaker 3:Non determinism.
Speaker 1:Zeke in the chats is going Tyler Potter and the echo chamber of secrets.
Speaker 2:I like that.
Speaker 1:We should actually build an an echo chamber around Yeah. A small echo chamber just so that your own ideas and thoughts are just constantly reflecting back on you.
Speaker 2:It's very comforting to see these AI input names sell off, says Buko, Capital Bloke. Very un bubbly. Confirms we are very much in a more rational discerning next phase of the AI build out and adoption. I agree with that. It does feel like we there was a world where going into the end of the year, we were talking about valuation as a function of tokens or IPO ing any company that could just throw a dot AI or, you know, throw a throw an AI name on their company.
Speaker 2:And we we we backed backwards from that abyss, fortunately, I think. So I've been happy.
Speaker 1:But, yeah, you didn't have to have a dot a I You just had to say, we're gonna do something with AI at some point. Yeah. And you got a pretty big premium. Chipotle
Speaker 2:rang the bell at the New York Stock Exchange, but they didn't hit the gong on TBPN yet.
Speaker 1:4,000. Whoo. 4,000 restaurants.
Speaker 2:4,000 restaurants. 4,000 restaurants. And we'll see. They're under intense pressure from Sweetgreen. Sweetgreen's putting 400 grams of protein in every bowl now, something like that.
Speaker 2:Can Chipotle turn it around? Win Jordi Hayes back as a daily customer?
Speaker 4:I would love to see
Speaker 2:that. Maybe 2026 is the year. We'd love to see it. I'm still I still
Speaker 1:love that in tech you have people that are like, well, like I can predict out pretty well the next one to two years. But after ten years, the way that we're accelerating, it's very hard to predict. Chipotle is like, in ten years, we will add 300 new Chipotle locations in these key metros, and we will
Speaker 2:Yeah. This things are more certain when you've been running business for a long time, I suppose. Well, in other in other financial news, Wealthfront raises $485,000,000 in IPO, valuing it at 2,600,000,000.0. Let's go. Let's go.
Speaker 2:Oh my god. If the SpaceX IPO ticker is SCX, that will be crazy. It probably will be. SPACs would be better though. I'm rooting for SPACs.
Speaker 1:There's no way. SPACs has terrible no aura. I'm not saying I advocate for
Speaker 2:SEX?
Speaker 1:SEX, but I think that Elon will do that.
Speaker 2:Can't he just get dollar sign x? He likes x. Let's just do that. How about that? Anyway, what else is is in the news?
Speaker 2:Is there anything else we should, we should cover? There's some there's some news around, Substack. I guess Substack changed their, their the how you how much you can read without installing the Substack app. They're really pushing the Substack app app. Gurgly Orzos is Orzos is upset about this.
Speaker 2:He says, my paid subscribers cannot even read my email without installing the Substack app. Eric Newcomer says WTF. Bullish for Substack if they get everyone to install their app, obviously. D like like yeah. Yeah.
Speaker 2:And Max Child is there saying, I I was wondering if this was a growth hack. And Eric Newcomer says, for Substack. Yeah. It's for their for their app. Would be very interesting.
Speaker 2:I don't know if
Speaker 1:this This is is should
Speaker 2:subscribe to bpn.com. You should drop your email. You get a free newsletter. We don't have a paid version. I don't know if this affects us.
Speaker 2:We'll have to figure it out. Have to talk to Brandon.
Speaker 5:I'm sure
Speaker 1:it affects us. The newsletter's pretty long. And and again
Speaker 4:And so
Speaker 2:it's not sending the full thing in the in the email?
Speaker 1:Yeah. You can continue reading the app, which is just Mhmm. It's it's it is this kind of decision
Speaker 2:That's rough.
Speaker 1:I like Substack as a business but this decision is good for Substack and it's not good for the reader and it's not good for the the the person sending. Right? I don't they could argue that it'll have a long term benefit because people might be more engaged in the app. They might be more likely. But again, when when you look at the data, at least for us, like 95% Mhmm.
Speaker 1:Of of readers are reading it in their email. Mhmm. They're not reading in the Substack app yet. Wants to change that. But I can see why people will be frustrated here.
Speaker 1:And this is why the the traditional email platforms have pushed back on Substack and said like, look, they wanna become a social network. They wanna Mhmm. They wanna build a a garden. They're building a garden, then they're gonna put some walls up. Yep.
Speaker 1:Right now, it looks like this beautiful garden, you can come in and
Speaker 2:I mean, if they get the app cooking, they're gonna put ads in that thing and they're print. It's gonna be a great business. On the flip side, we are we are big fans of being in the big social media feeds. Like, we we we have not, like, we, you know, love X, love Instagram, love YouTube. These are algorithmic platforms.
Speaker 2:If there were to if Substack were to become an algorithmic, you know, long post app, basically, like Twitter with more words, I think we would be The long trough. Yeah. The long trough. We would be okay with that. I mean, we would certainly be the first ones because we have no paid subscribers.
Speaker 4:Yeah. But the whole
Speaker 1:premise of Substack and you look back at every all the marketing materials is like own your audience, have a direct relationship with your reader, don't be disintermediated by the platforms, and sort of come out and make a product decision like this and you see where this goes, it feels at odds with everything that the company is built on.
Speaker 3:Yeah. Yeah.
Speaker 2:I mean, at the end of the day, for me, it's about like, can our business model flourish in the long form written text and whether it's delivered? Like, there are certain amount of people that read our newsletter in their email. If we can get them all to read in the in the app, like, it's it's kind of six in one and half a dozen of another to me. Like, it is it is sort of neutral. And the and the bulk case is that by going into the app, we our stuff can go more viral, and we wind up getting more views on average per post.
Speaker 2:But you live and die by the content just like we do on YouTube, just like we do on Instagram, just like we do on Axe, just like we do anywhere else, it would be a unique thing. And every time that a feed switches from, you know, subscriber enforced to algo, creators always hate it. This is what happened to YouTube. YouTube, the default home page used to just be your subscriptions. Then people realized that you could just bomb the subscriptions feed with a million videos and you'd get tons of impressions.
Speaker 2:And eventually, they went algo feed, and they show you a single video from MrBeast or whoever you're subscribed to. Maybe you're subscribed. Maybe you're not. Maybe they just know that you like it. And you could see that same thing happening with newsletters.
Speaker 2:You open up the Substack app and it says, hey, look. Today, TUPN put out a fantastic newsletter. Here you go. Other days, it wasn't good, so we're not showing it to you. And that's weird because that's not the Substack model.
Speaker 2:That's not the email model. I think people would revolt. But there is a world where being in that feed, being able to go viral within the Substack app is actually a net positive. It's sort of a it's like a Darwinian survival scenario. Like, you really have to thrive.
Speaker 2:You have to fight it out. You have to earn every view, earn every impression. But we'll see. We'll we'll we'll we will assess.
Speaker 1:Yeah. It's mean, it is notable. I don't I don't think Chris or Hamish have responded to any of the criticism. Maybe they're responding on Substack. Maybe.
Speaker 1:Over there.
Speaker 2:Maybe. Maybe we should have been on the show. Domain it more. I don't know. It's interesting.
Speaker 2:But anyway, that concludes our show for the day. Have a great weekend. Merry Christmas. Thank you for listening. Leave us five stars on Apple Podcast and Spotify, and we will see you on Monday.
Speaker 2:11AM Pacific.
Speaker 1:Is Christmas week. You thought this week was Christmas week.
Speaker 2:We're just getting started. We're just getting started.
Speaker 1:You're not gonna be able to see us. There's gonna be presents. Ready. We're going Christmas. We we might be dressed up.
Speaker 4:Yes.
Speaker 1:We might be interviewing public company CEOs while dressed up.
Speaker 2:Sounds good.
Speaker 4:You have to wait and see.
Speaker 1:We hope you have an incredible weekend. Thank you for being with
Speaker 4:us this week. We'll see you soon. Goodbye. Love you.
Speaker 1:Hi.