Subscribe
Share
Share
Embed
TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TVPN. Today is Thursday, 02/26/2026. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. Me Let tell you about ramp.com. Time is money.
Speaker 1:Save both. He's used corporate cards, bill pay, accounting, and a whole lot more all in one place. We have quite the linear lineup for you today, folks. We got a scoop. We got an interview with the robot vacuum guy.
Speaker 1:Linear, of course, is the system for modern software development. 70% of enterprise workspaces are on Linear are using agent.
Speaker 2:Sam, the guy who exposed Yeah. That he could remotely access 7,000 DJI Robo vacuums
Speaker 1:Very interesting story.
Speaker 2:Enabling live video floor plans and joystick control. Yeah. We're very excited to have him on in just over an hour. Then we have Ken Ritchie, chairman of Flexjet. Yeah.
Speaker 2:Very excited for that one. Quickly followed by Howard Marks. Oak Tree Capital. Oak Tree. Talk about
Speaker 1:the And new butter then a lightning round to be remembered forever. Lots of lots of deals getting done. Lots of Gong worthy news.
Speaker 2:And we have a surprise guest as well Oh, yes. Do.
Speaker 1:For the timeline. But first, we will tell you about NVIDIA earnings. They crushed highly anticipated. As always, NVIDIA is permanently holding up The US economy. It continues to hold up The US economy, the global markets, but
Speaker 2:it's sold off
Speaker 1:even though they blew out earnings, and it was a very good quarter. So earnings dropped yesterday after we got off the phone with Doug O'Laughlin from Semi Analysis. Semi Analysis did have some good breakdowns here, but the top line revenue came in at $68,100,000,000, up 73 percent year over year and 20% quarter on quarter. And this beat consensus estimates by nearly 3%. The stock price popped around 3% immediately, but then sold out sold off 5% after at the market open this this morning, making it the stock's worst day since last April.
Speaker 1:They're now just a tiny
Speaker 2:Was it April deep sea?
Speaker 1:$500,000,000,000 company.
Speaker 2:April was deep sea?
Speaker 1:Last April? Last April was deep sea. Yeah. Yeah. That makes sense.
Speaker 1:People were saying you're you won't need a whole bunch of NVIDIA chips because you'll be able to inference cheap commodity hardware and the models
Speaker 2:was climbing the app store charts in America totally organically.
Speaker 1:Yeah. There was a lot of weird stuff going on.
Speaker 2:They weren't using a massive bot farm at all.
Speaker 1:Yeah. I mean, I I I guess this sort of steel man the the the deep sea story. There was this interesting takeaway, which was that even though the numbers were sort of misreported
Speaker 2:We had it we had it wrong. I think it was January.
Speaker 1:Deep sea was January?
Speaker 2:Liberation Day was
Speaker 1:Oh, liberation day tariffs. Yeah. Chip chip sanctions. But, yeah, the the deep sea lesson was, like, you can distill models. You can get, you know, a certain level of intelligence at a much lower cost.
Speaker 1:And that is real, but the demand on the frontier is just incredible because people are like, oh, I I I I have a strong opinion about 5.3 versus 4.6. Like, people really care about being on that perfect leading edge for exactly what their use case is. You see this with people having favorite models, favorite flavors all over the place. And so the the demand in the Jevons paradox really just powered right through. What what do you have to say
Speaker 3:about that? I was gonna say, like, I I think when the deep sea click moment happened, narrative was not that they were distilling now. It was that they had built like, they had trained a brand new model On with very few
Speaker 1:Yeah.
Speaker 3:Resources. Yeah. It it there was no, like, sense that they were just, like, distilling
Speaker 1:There was rumors about it pretty quickly.
Speaker 3:Rumors, but the main Yeah. Yeah. Narrative was not that Yeah. Like, they're they're being distilled.
Speaker 1:Yeah. Yeah. I I I think what I mean what I mean about distilling is that, like, the the the the truth that came out over the, you know, news cycle was that distillation does get you somewhere near a particular frontier capability and allows you to reduce cost. But there is still another order of magnitude of demand for the next generation and the next level of the frontier. And we have yet to see plateau emerge for demand for the whatever the next frontier is.
Speaker 1:And
Speaker 2:Yeah. And overall, the story the story just don't think it's the story of the last year is that there's there's very, very, very, very little demand for number three. Yeah. There's some demand for number two. Mhmm.
Speaker 2:And there's an exceptional amount of demand Yeah. For the most performant model for a specific specific, task.
Speaker 1:Yeah. So going back to our newsletter today, our earnings recap, which you can subscribe to at tbpn.com. After the earnings call, semi analysis called the results staggering. I love it. Clean bill of health on gross margin, revenue, and the guide is firmly above buy side bogeys.
Speaker 1:Incredibly clean, really. They also pointed out what NVIDIA said about supply commitments with $21,400,000,000 of inventory on hand, up from $19,800,000,000 They have $95,200,000,000 of supply locked in with chip manufacturers, also stating, we have strategically secured inventory and capacity to meet demand beyond the next several quarters. In other words, we're not running out of chips anytime soon. That's good news for NVIDIA. Second order effect that I think was interesting that Doug O'Laughlin flagged for us was that even if TSMC does scale up magically or they figure out how to build another fab, Arizona increases capacity, even if NVIDIA has sharp elbows and is able to push out other other demand and get all the line time they need to build all the accelerators that they need, soak up all the CPU demand, etcetera, etcetera, well, then you could still wind up in a weird scenario where NVIDIA has the chips.
Speaker 1:They are ready to sell them. The hyperscalers want to buy them. The AI labs want to inference them, but there's just not enough energy. And so there's this question of, like, when does the shift when does the chip bottlenecks shift to the energy bottleneck? That could be part of what is sort of worrying people because you can see in the timeline we have this chart, Are you not entertained?
Speaker 1:From Nathan Benek over at Air Street. And he's taking a screenshot from the Financial Times, and it is just one of the most incredible graphs I've ever seen. And so as you see this chart, you have to wonder if there are any bottlenecks that they will run into. TSMC capacity Yeah.
Speaker 2:I asked Doug about this. I asked Doug about this. What does NVIDIA do if their customers do have an energy bottleneck?
Speaker 1:Yeah.
Speaker 2:I feel like they'll find a way to still ship the the chips.
Speaker 1:I agree. And and truthfully, as big of a as big of a story data centers are, they're still consuming well under 1% of of US electricity. And so there are chips to be moved around. There are new new power plants to be brought online. We're actually talking to Doug Bernouard from Radiant about nuclear power today.
Speaker 1:And there are so many different ways to solve the energy bottleneck. But it is very real world. It is very slow. And if there's a timing mismatch, you could see a little bit of a flat line that I think people might be worried about. So Jensen himself strongly pushed back against the SaaSpocalypse narrative yesterday, which is interesting because he doesn't necessarily have to.
Speaker 1:He could be out there saying, like, yes. All those SaaS CPU workloads, they're all gonna be GPU workloads now. And, yeah, you should actually sell all your SaaS because the future is is inferenced. Like, all you know, every app that you use, it's not gonna be code that's running on a CPU. It's gonna be inferenced on GPU on demand.
Speaker 1:And so, you know, demand for NVIDIA should be even higher. Like, he doesn't really have that many bags with the SaaS companies necessarily. Of course, they'd be, you know, upset if he was talking trash, but he's not. He's defending them.
Speaker 2:But he buys a lot of software.
Speaker 1:Sure. Yeah. Of course. He said, I think the markets got it wrong on the SaaSpocalypse. This is Jensen Huang talking to CNBC's Becky Quick, pushing back on the fears that AI agents will cannibalize the enterprise software industry.
Speaker 1:Instead, he expects a broad swath of software firms to use agentic AI to develop their software and boost efficiency. In what he described as counterintuitive, Wong said that AI agents won't replace these software tools but will use them instead. Why even waste the tokens building a calculator when you can just download the calculator SaaS or whatever? I don't know. Whatever SaaS you want to grab off.
Speaker 1:And this is certainly the true certainly what we've with databases. Like, certain databases have just skyrocketed in demand because they're the ones that the agents are pulling off the shelf. And so, yes, the agent could design a new database and install it, but that's a lot of work. It's a lot of wasted tokens when databases already exist. So let's tell you about Fin dot ai, the number one AI agent for customer service.
Speaker 1:If you want AI to handle your customer support, go to fin.ai. And let me also tell you about vibe.co, where do you see brands, beauty startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta, and we can move over to the time line reaction. NVIDIA is such a big deal. It's not just on the cover of the business section. It's on the cover of The Wall Street Journal.
Speaker 1:Didn't get the picture, Didn't get the picture. The picture is What is it? Iran. Talking about nuclear enrichment is on hold according to experts. But NVIDIA results help soothe AI fears.
Speaker 1:The surge in profit comes as the AI's AI industry's appetite for chips continues to grow. Data center hardware, the chips and networking equipment that NVIDIA sells to AI and cloud computing companies accounted for 91.4% of the quarter sales. Terrible news for gamers. Like absolutely the worst numbers you could ever see if you're gamers. Maybe that's why they're
Speaker 2:they're Yeah.
Speaker 1:They're launching a short short attack, short
Speaker 2:time John would be punching a hole.
Speaker 1:I would be. Would be. Maybe the gamers have risen up and they are shorting NVIDIA to try and get them to go back into gaming. Computing demand is growing exponentially. Chief Executive Jensen Huang said, the agentic AI inflection point has arrived.
Speaker 1:With each passing quarter, the pressure grows on NVIDIA, which at a market value of nearly 5,000,000,000,000 is the world's largest publicly traded company. Is it not just the world's largest company? Is there a larger privately traded company? I don't think so. It must just be the world's largest company.
Speaker 1:I don't know. I guess you get into crazy definitions of like, Russia count as a company since it sort of is all one controlled economy. It is no longer enough for NVIDIA to produce good quarterly results. They have to produce perfect quarterly results, said Daniel Newman.
Speaker 2:How could they have done better?
Speaker 1:Instead of net income of $43,000,000,000 in the quarter, they could have put up 50,000,000,000 or 60,000,000,000 or a 100,000,000,000 or 10,000,000,000,000, quadrillion. We I wanna see a quadrillion quadrillion dollar quarter, please, Jensen. I'm not happy. I'm not satisfied. Keep keep growing.
Speaker 1:Keep keep keep selling these chips.
Speaker 2:Gavin Baker
Speaker 4:He's 10 s.
Speaker 2:Gave some thoughts ahead of NVIDIA.
Speaker 1:Oh, What did he say?
Speaker 2:Great. Sean Oo pulled some out. The same point hit on by Gavin in Citadel Securities. It's a good one. Gavin said, the world is fundamentally short both watts and wafers and it may take years to resolve these shortages.
Speaker 2:The shortage of Watts and wafers may prevent an overbuild. Hyperscalers would overbuild if they could, but they simply cannot. My best guess is that we would need roughly a thousand X more compute for the unlikely hypothetical scenario described by Satrini to be remotely possible and the time it takes us to get there will give humans time to adjust and maximize the many potential benefits of AI. Citadel said displacing white collar work would require orders of magnitude more compute intensity than the current level utilization. If automation expands rapidly, demand for compute definitionally rises pushing up its marginal cost.
Speaker 2:If the marginal cost of compute rises above the marginal cost of human labor for certain tasks, substitution will not occur creating a natural economic boundary. This dynamic contrasts sharply with the narratives assuming frictionless replication of intelligence. Even if the algorithms improve recursively, economic deployment remains bounded by physical capital, energy availability, regulatory approvals, and organizational change. Recursive capability does not imply recursive adoption. And do you know what the title of Citadel's response was?
Speaker 2:No. The twenty twenty six global intelligence crisis, calling everyone idiots.
Speaker 1:We gotta write an intelligence crisis report now. The this
Speaker 2:is actually the perfect this is the perfect response. Like very very detailed. This this is the the same report that I pulled out that the the current labor displacement narrative isn't holding up because Yeah. Job postings for software engineers are rising rapidly.
Speaker 1:Yeah. But it's pretty remarkable that Citadel was able to get that report out so fast. Like it would hit it it dropped I think on Monday right after went viral on Sunday or maybe it dropped Tuesday or something like that. Like really fast?
Speaker 2:Yeah. It dropped Tuesday.
Speaker 1:I mean, that's like a quick turnaround for like a pretty detailed analysis. I thought that they were just
Speaker 2:reposing Let's check the Em dashes.
Speaker 1:But I mean, the the the interesting question about, like, you know, replacing white collar work versus, like, augmenting in new things is that there's the the the AI labs are obviously selling into enterprises. That's growing a lot, And the revenues are very real, tens of billions of dollars. But when you look to the other startups that have put up really big ARRs, it it just it I'm trying to square like Suno just announced that they're selling 300,000,000 in ARR for AI music. And that's a huge number. It's it's so big, but it doesn't feel like replacement work yet.
Speaker 1:It feels like it's just an additive new thing. Like, there were just a lot of people that wanted to pay $10 a month for a cool app.
Speaker 2:Same thing And that was same thing. How many how many non technical people had an idea for an app? How many people that weren't musicians Are
Speaker 1:doing had
Speaker 2:an idea for a song. Yeah. They never could. That and then They're just unlocking all this
Speaker 1:And then you see it with, like, Higgs field two and and all the viral loops and then what what what's that other one? Not Web Flow.
Speaker 2:There's TBPN simulator?
Speaker 1:No. No. No. But the the Copy bars. Lovable is one where where huge, huge growth.
Speaker 1:And and it feels like, yes, lovable is, like, going into enterprises and whatnot, but it feels like there's a lot of just, like, net new software developers, website builders that are joining that platform and building stuff. And it's it's feels very incremental. It does not feel very substitutional to me. And I'm wondering how much of the Suno story translates to the AI lab coding model story as well. And that and that's certainly what Citadel is hinting at with
Speaker 2:the increase Citadel in is also showing that new business formation is rapidly expanding. This is from the US Census Bureau. You can see that year over year, it is jumping Mhmm. Which we love to see.
Speaker 1:Did Clouseau delete this post? The Great Recession of nine fifty two AM to 11:16AM February. Too bad. Let me tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast.
Speaker 1:That's why a 150,000 organizations use it to keep their apps working. And let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. NVIDIA stock is falling because it needed to clear an options wall of $200 a share. So given a lot of folks were long calls into the print and it didn't clear 200, brokers are selling stock to reverse some sold calls.
Speaker 1:It's that simple. This isn't fundamentals. It's market mechanics, says Gordon Johnson. Very interesting. I don't I I I don't fully understand all the dynamics that can happen with some of the stuff Jane Street does to to move around the market.
Speaker 1:But, you know, we'll we'll see. I I would say hold your hold your judgment of Nvidia for the next quarter to
Speaker 2:see Samsung Build that. Becomes the first Korean company to reach a $1,000,000,000,000 market cap.
Speaker 1:Pretty remarkable.
Speaker 2:Over on companiesmarketcap.com. Mhmm. You can see That's
Speaker 1:your homepage. Right?
Speaker 2:Yeah. Homepage. Yeah. Homepage for sure.
Speaker 1:Definitely homepage.
Speaker 2:Just under Berkshire Hathaway.
Speaker 5:Pretty
Speaker 2:good. And Broadcom is above that. But Samsung passed Walmart. Yeah. Eli Lilly.
Speaker 1:I mean, increasingly important in the AI era. Right? There there were a lot of fabrication and whatnot. I don't think it's all the TVs. There there there was some interesting stat about of the $1,000,000,000,000 companies, isn't Samsung like the the most highest margin, lowest margin or something?
Speaker 1:There there there were some posts from yesterday we didn't get to, but there there was a lot more context on that.
Speaker 2:Yeah. Anyway Ram Capital What does is sharing. It says, Patriot. And somebody says, I have open clause sending low ball offers on Zillow all day just to make boomers start panicking. Mhmm.
Speaker 2:And he says, can you give me an update on the Zillow campaign today? The Zillow update. Listings contacted today, 372. Average offer, 70% below asking. Positive responses, zero.
Speaker 2:Negative responses, 270. One response was violent, but I've reported it to the Tampa Bay Police Department. No response, a 102. Would you like me to keep making offers?
Speaker 1:70% below asking? Just you're selling a million dollar property and it's like, how's that?
Speaker 2:Can you
Speaker 1:do 300 k?
Speaker 2:Yep. Let's
Speaker 1:Let's bring in John Palmer.
Speaker 2:Let's bring in John Palmer. Our surprise
Speaker 1:He's live in the TVP and Ultradome.
Speaker 2:He's coming in.
Speaker 1:You you know him
Speaker 2:in DC.
Speaker 1:Nice hat. John Palmer. You probably know John Palmer is
Speaker 2:As being one inch shorter than you.
Speaker 1:Well, he's the face of leg lengthening surgery right now. Right?
Speaker 4:No. They were saying I'm the Goldilocks technology brother. Oh, yeah. Some people were saying you're a too tall. Oh, okay.
Speaker 4:And Jordy is tall in his own right but maybe not But sure.
Speaker 2:This table.
Speaker 1:Yeah. Yes. Yes.
Speaker 4:So they they wanted someone right in between so I was contacted by by your team and
Speaker 1:I love it. Well, I actually introduce yourself since for for those who've been living under your data center.
Speaker 4:Yeah. Sure. My name is John Palmer. I was a co founder and CEO of a company called PartyDow. Recently announced that we're gonna be joining Stripe So that was a awesome five year journey.
Speaker 4:And also work on a company called Area Technology which does logo and graphic design for brands like yourself. Yeah. Shout out to the new logo and graphics package. Excellent. Yeah.
Speaker 4:That that's
Speaker 1:We are honored.
Speaker 2:Yeah. Well, we wanted to do we wanted to hang and do some timeline with you. As that is a sign of great respect in our culture.
Speaker 1:Yeah. What you got, Jordy?
Speaker 2:What do we have here?
Speaker 1:How do you guys enable pseudo for
Speaker 2:Okay. Baby baby Keem Yes. Says yesterday, he hits the timeline. How do you fix open claw internal reasoning leaking? Peter Steinberg.
Speaker 2:Mean?
Speaker 1:Does anyone know what that mean? So, yeah, I mean, we read your post about Yes. Something small is happening. Hilarious.
Speaker 4:Yep.
Speaker 1:Did you how much of that was real? Did you ever actually buy a Mac Mini?
Speaker 4:So the the entire post was tongue in cheek. Yeah. But I did, unbeknownst to you, I did actually buy a Mac Mini that week. I did set it up.
Speaker 1:You did set up.
Speaker 4:Setting it up was the best forty eight hours of my life. Since then, I've used it not very much. Yeah. So it's I don't know. I think the reason I bought it originally was basically to tinker and see like how real is the hype.
Speaker 4:Yep. I set it up. I installed various plugins and skills. I made sure my setup was super optimized.
Speaker 1:Yep.
Speaker 4:And basically, realized the only thing I really needed it for was coding remotely in, you know, repos I'm working on or side projects, you know, when I'm out and about on my phone.
Speaker 1:On your phone.
Speaker 4:And you can already do that with like a million other tools. Sure. Actually, even the Claude app, like you can just connect it to whatever repo. Yep. You can literally just use Claude code in the app.
Speaker 4:Yeah. And so, there was really very little delta that it provided in terms of value beyond what I was already doing. And I did try some other things. I've been trying to get it to like, you know, work on Google Sheets and invite people. But the big problem is that the browser use specifically is pretty fragile.
Speaker 4:And I I think it's gonna get better. So I don't have buyer's remorse yet. I think that Mac mini purchase will will come in handy. But so far, it's like, hey, add I want to add someone to a Google Sheet. Can you invite them?
Speaker 4:And it's like, it opens the modal to share. It types in their email, and it's like, oh, I I crashed. Like, can't get past like the share modal Interesting. Of a Google Sheet. I'm sure I could I'm sure I could optimize my setup further which I'm looking
Speaker 2:skill issue. Skill.md
Speaker 1:issue.
Speaker 4:It probably is a skill issue.
Speaker 2:Yeah. You need to get the skill called skill issue and make sure that's running. Yeah. It is it is I don't know if this is like a brilliant PR move from baby Keem's team or if this is real. But either way, it's really really funny.
Speaker 2:But yeah, was how mainstream this went, our lawyer, Gottemac Mini Mhmm. He's obviously pretty pretty tapped in, but it's cool to see. Was with
Speaker 4:you at the gym this morning that we should I'm excited about a market for bootleg skills. Oh, So you don't
Speaker 2:you don't
Speaker 4:Just like you don't wanna be the guy just listening to hits on the radio. Right? Yeah. You don't wanna just be going on skills.sh and getting the what would Elon do skill. That's that's pretty That's how we end it.
Speaker 4:And it turns out that one was like actually Malware. It was actually malware. So what you want is within your trusted social circle Yeah. People that you spend time with IRL, USBs full of markdown files
Speaker 1:Mhmm.
Speaker 4:With bootleg skills that you kind of keep internal and Yeah. There may even be a market for that, you know, on Craigslist Yeah.
Speaker 2:And you can say, if somebody says, hey, can I can I try the USB? Can I can I can I borrow it? You say, well, this this skill is kinda like a personal thing. Yeah. Like it's not
Speaker 4:You need to be gatekeeping your skills. Yeah. That's like probably the last moat in tech is gate kept skills.
Speaker 2:Gatekeeping.
Speaker 4:Just proprietary markdown files powering the entire global
Speaker 1:I I I do honestly wonder what the conversion rate from, you know, buying the Mac mini to, like, actually using OpenClaw regularly was because I think that your post was funny because a lot of people definitely went through that. Like, I I went and bought a Mac mini and it did take me, a week even to unbox it because I just had like a busy life and I didn't have time. And then when I did, it was like, okay, well, I didn't have a monitor at home so I had to play it in my TV and then like the actual setup does take time. Like forty eight hours is not that much of a joke.
Speaker 4:And and I think on this point like I do think you need like a solid month at home fixing it. So I've been out of town for a week. Yeah. I'm here in LA. I live in Brooklyn.
Speaker 4:Yeah. And a lot of the time when you hit a wall it's like, okay, now you probably need to get on the Mac mini yourself and like Sure. Add whatever environment variables or keys that you need Yeah. Set up a new account for it.
Speaker 1:Yeah.
Speaker 4:And since I haven't been home like, I can't really Like,
Speaker 2:you know, on a more serious note Mhmm. Amazing? Like isn't it like five years ago Mhmm. Everyone was posting like I miss like hacker Yeah. Totally.
Speaker 2:Miss I miss I miss the old Silicon Valley and it feels like this this feels like it feels like we're back.
Speaker 1:Yeah. Yeah. A lot of people definitely like open up the terminal for the first time in years. I mean, is true for vibe code generally. Like, a lot of people would step back from just writing code or committing code to any GitHub repo.
Speaker 1:Yeah. The vibe coding boom.
Speaker 4:It's funny because I do really prefer the quad code, like, user experience to any of the, like, slicker desktop tools because of a lot of reasons. But it is funny, You're like in the terminal, I think everyone there's definitely a a major factor where, like, you feel really cool using the terminal if you're not an engineer. Yep. But you're just it's all plain text. Like, speaking in plain English and, like, it's speaking to you in plain English.
Speaker 4:But, you know, if you're at the airport or in a co working space, you're like, I feel I look pretty
Speaker 1:Predictions are fantastic.
Speaker 2:Performative. Trey says, Baby Keem just humbled a model. That is actually an exact lyric from Baby Keem's song stat. That's a sorry. Deep cut.
Speaker 2:Deep cut. And, yeah. He someone else said, two phone baby Keem. That's another lyric Yeah. But two Mac mini baby Keem.
Speaker 1:And baby Keem liked it.
Speaker 2:He's he's very online. We're working on getting baby Keem on the show to break down his full his full setup.
Speaker 1:Yeah. I mean, one one of the biggest questions that I feel like is still sort of unanswered is, like, is, like, what are people doing with it? What you know, obviously, if you're working on a startup and you're building a piece of big software and you're committing to it and you're firing off just managing agents remotely, that feels relevant. Although, yes, you mentioned you can just do that already.
Speaker 4:Yeah. I mean, I actually whatever. Like, I'm definitely not the top person who's like into this. Right? But I I feel a lot more confident.
Speaker 4:Even even for coding, I actually don't love doing it with OpenClaw because I've I've got my reps in with Cloud Code. I trust the harness. I trust its ability to like utilize the model in the best way. So even for coding, I'm I'm just using Cloud Code remotely anyway. Yeah.
Speaker 4:Still waiting to find the use case. I think one interesting thing though is just that like, I think prior to this whole OpenCLaw wave, the whole idea was like all all the ai labs had their like computer use demo. And it was running in like the totally, you know, anonymous Yeah. VM somewhere. And I do think these things are way less useful without your personal data Yeah.
Speaker 4:And your personal context and the stuff on your machine. Not no one solved, like, trusting it enough security wise. Like, you know, my Mac mini Mhmm. Back home, it it has its own Gmail, iCloud, whatever Okay. Because I'm not gonna let it touch my data.
Speaker 4:But Yeah. If we do get to the point where you can be confident that it has all the files on your file system and all your accounts it's gonna leak anything Yeah. Or like make a dumb mistake sending it to someone Yep. I do think the ability to like do all of your knowledge work on the go, even if it's just like I do the same stuff I do today with AI, I can just do it on the go. Yep.
Speaker 4:Would be a major leap in terms of like
Speaker 2:idea guys have been waiting for.
Speaker 4:Yes. Yes. It's the moment idea guys have been waiting for though. Think yeah. And we we can riff on that
Speaker 1:if you want based work, more like, okay, this is something I need to do regularly, turn it into a cron job, like the agent should be able to do that.
Speaker 4:Yeah. Yeah. I totally think so.
Speaker 1:Also, I was just really excited about this, like, Napster sort of moment. Like, every idea I was joking with Jordy. Like, every idea that I have for, like, something to vibe code is, something that doesn't exist not because of code. Like, if you want a fitness tracker, like, yes, you can vibe code one, but you can also just go to the app and get a free app store and get a free one or you can pay. Like, there's plenty of products in every category.
Speaker 1:Right. Right. The things that you want but can't get are, like, something that jumps every paywall, something that Yeah. You know, so, like, get gives you videos for free that are behind walls and stuff. And, like, these walls exist for a reason.
Speaker 1:And and maybe those come down in a world where everyone's, like, working on open source agents and just sort of showing up as themselves and synthesizing everything. But it's like, it it feels like it's much harder to actually productize that fully because so many of the things that people want are like yes, they're possible in open source in the sense that like file sharing was was popular.
Speaker 4:Totally. Yeah. And even though I will say like even though I I guess so far, I don't wanna say I'm disappointed because it was really a learning thing. Yeah. I I still it's never a good bet to be like really bearish on new form factor with like novel tech.
Speaker 4:So I'm still pretty bullish and excited about like Yeah. Three, six months from now what that same Mac Mini could be doing. And it doesn't need the Mac Mini. It could be could be on whatever service, but I think it's gonna get pretty exciting pretty quick.
Speaker 6:Yeah. Yeah.
Speaker 1:Yeah. What did what did Playboy Carty mean by this? Did he was he responding to Baby Keem? Is that what they were supposed to read into this? Is he also doing a Mac Mini?
Speaker 1:It's just the Jeremy Irons in margin call. Is that the meme?
Speaker 3:This is when he says that the music is gonna stop.
Speaker 1:Okay. So so Playboy You've seen the the top?
Speaker 2:I have.
Speaker 1:You have? Yeah. Woah. Are you a film guy? I'm not Have you seen Borat?
Speaker 4:I would never call myself a film guy but I've seen
Speaker 1:a lot of movies. Have you seen Borat?
Speaker 4:I have seen Borat.
Speaker 1:Okay. Okay. Okay. You're you're The
Speaker 4:whole bit is that Geordie hasn't seen enough movies.
Speaker 1:Yeah. He hasn't seen any movies in fact.
Speaker 4:Wow. Interesting.
Speaker 1:RIP the market, we had a good run. The three kinds of stock market days so far. Donald Trump spins the wheel of tariffs and replaces a 5% tariff on Belarusian wheat with a 22.4% tariff on Pakistani jet engines. All stocks lose 2 d $6. Substack newsletter publishes a story about DoorDash going badly.
Speaker 1:DoorDash down 862%. Global financial system teeters on the brink. And three, NVIDIA announces earnings of $100,000,000,000,000, beating expectations by a thousand x. Jensen Huang named new king of earth while his stockholders to form the new permanent ruling class, Nvidia down 3% on the news. This is the press of the market.
Speaker 1:Are you are you a day trader guy?
Speaker 4:No. No. Are you
Speaker 1:an investor?
Speaker 4:I am an investor.
Speaker 1:Okay. An investor. How do you think about the market? What's your strategy?
Speaker 4:I'm an investor. I'm a businessman. I don't I don't know. I think my approach is like pretty smooth brain value investing like Okay. Good fundamentals.
Speaker 4:I'll buy the stock and hold it for a long time. Okay. Definitely not doing a lot of even even intra month trade. It's it's really like long term.
Speaker 2:You're not like a one man Jane Street. I'm not a I'm
Speaker 4:not a one man Jane
Speaker 6:Street.
Speaker 1:What about what about crypto? I feel like if you're working in crypto, even adjacent to crypto, there's just so much alpha from seeing essentially like angel investment style opportunities from someone who's building something that's you just know it's gonna be hyped and the token's gonna moon
Speaker 2:like wildly distracting because as soon as you have enough money Is that invest. I I I think I I think I I don't like doing a lot of like individual stock trading Yeah. Because as soon then then my attention is gravitating towards this thing that's not actually productive.
Speaker 1:Yeah.
Speaker 2:And so What do you think
Speaker 4:about it? Think that's true and I think I mean, obviously, if you're trading like perps in crypto, like you better stay on top of it Yeah. Because like there's a moment to exit or if you just hold it long term, you'll probably get liquidated at some point. Sure. So, I I just don't touch any of that.
Speaker 4:You're right though that there are whatever that there are like, yeah, weird things in crypto where like someone you know or someone's doing a project and they air drop a token or something like this and you wake up a week later and it's worth like whatever a month's worth of your salary. So I think that's
Speaker 2:I've seen maybe 10,000 posts kind of blaming them entirely Yeah. For the just crypto price action over the last couple months. But you haven't been able to have you been able to find anything that is like definitive? Obviously, the lawsuit came out and they were like, we were going back and forth on it because it sound they pulled they pulled funds out of this liquidity pool
Speaker 7:Yeah.
Speaker 4:Right after I don't even think they pull I don't think they pulled funds. I actually think they sold into the pool
Speaker 2:Oh, okay.
Speaker 4:Which is I guess the same thing. Yeah. Don't know.
Speaker 2:Yeah. Don't know. But they did it five minutes after. We were saying maybe yesterday or the day before that, okay, it's a public blockchain.
Speaker 8:So in
Speaker 2:theory, they it's not actually a smoking gun necessarily. Mhmm. But Yeah. Either way
Speaker 4:I'm I'm only as informed as you are in terms of the tweets. I haven't verified anything. But, yeah, my understanding is that, I guess, Terra Luna had had a lot of money in this pool and they had planned to pull, whatever, a 180 something million out of it. Yeah. And that, I guess, the allegation is that Jane Street heard that this was coming before everyone else.
Speaker 4:That's like the material non public information. And so then also pulled their money or sold it, yeah, like just minutes after Tara did it. And you're you're right that it's public. So I guess like, again, not a source of truth here. I'm I'm like relaying second hand with confidence information that I read on on on the
Speaker 2:built for
Speaker 4:for podcast. Yeah. I'm I'm relaying this to you second hand without confidence. But, yeah. I guess you could say, hey, it was it was anyone could see that and they just reacted quickest.
Speaker 4:But I think I I guess what that would come down to is what are the internal ops on moving those funds like that. I would imagine that a fund like Jane Street with $85,000,000 in this pool isn't just sitting in someone's like hot wallet meta mask. Right?
Speaker 8:Yeah. They probably would have
Speaker 2:had They could have, like, some type of protocol or actually software, like, as Yeah. Type of protective mechanism Yeah. And that they clearly are are
Speaker 1:I don't know. A lot of stuff feels like conspiracy theories that. It feels very similar to, like, the Robin Hood GameStop fiasco where there was, like, a lot of conspiracy theories about, like, Citadel purposely tanking markets and the bailing out hedge funds at various points.
Speaker 6:And Mhmm.
Speaker 1:I I always thought that was just like people looking for scapegoats and a whole bunch of market actors just playing hardball because that's the that's the default I don't know.
Speaker 4:Yeah. I mean, I'm not that comfortable like speculating on this either because I'm just like, alright, I saw, you know, post in the timeline. They are though.
Speaker 2:DGen CPA says Jane Street got my dad drunk and made him cheat on my mom when I was three.
Speaker 1:See, a lot of people are are hunting for for, you know
Speaker 2:from Joyer says Jane Street killed my dog. That
Speaker 1:would not be
Speaker 4:good. You're you're just getting a lot of the cathartic like crypto people who've just been wrecked by these fiascos like now have a viable scapegoat.
Speaker 1:He's not a bad trader. The market was manipulated by Jane Street.
Speaker 2:Yeah. Tampa International Airport has come out and said, we've seen enough. We've had enough. It's time to ban at Tampa International Airport.
Speaker 1:Wait. They've actually this is great. Read the next line.
Speaker 2:I mean, it's really
Speaker 1:After successfully banning Crocs and giving everyone the amazing opportunity to experience the world's first Crocs free airport, it's time to take on even an even larger crisis, pajamas at the airport. Is this real? Is this actually
Speaker 2:Tampa It's hard to say. What's your airport travel?
Speaker 4:I was gonna ask you guys because you're traveling together a lot. I know it's always a dilemma. Right? Do you wear like like I get the pajamas thing because if you wear, you know, your nicest clothes Yeah. Then to me when I get to my destination, I'm like those were on the Yeah.
Speaker 4:Yeah. It's like I'm not unless I have laundry, you know, so for me I'm rocking like one of my more like mid fifths. Like I'm something I don't care about, something something lightweight that packs light as well because after that travel, like that's not coming out of the bag for Smart. The duration.
Speaker 1:Well, there's there's like a contagion theory here because if I'm in a suit but I'm sitting down in a seat that someone in pajamas just sat down in then I'm getting their pajamas all over my suit. Yeah. And so, it's it's just a vicious cycle.
Speaker 4:Are you guys business cash on the plane
Speaker 1:with I I I've actually traveled in suits many times and Oh, yeah. And it's underrated. Interesting. I I think I mean, besides the fact that I've heard that you can get upgraded to first class more more easily if you're dressed up, I don't know how apocryphal that is. Happened to
Speaker 2:me once. That's just people trying to justify.
Speaker 1:I think people just they they they see the suit and they're like, Here, please, take my seat. I'm in pajamas. I have the first class seat, but you deserve this.
Speaker 4:I think I'd feel more comfortable with that Yeah. If I if I weren't as tall as I was, and and you are, because the suit, you know, more powerful aura, definitely less comfortable especially
Speaker 1:Yeah.
Speaker 4:If you're in a seat where you're kind of constrained and it's kind of bunching up. It's really not
Speaker 6:Yeah.
Speaker 1:Feeling your aiming for. What what about the TSA ban? Have you have you seen this? TSA shutting down? TSA pre check?
Speaker 2:Pre check.
Speaker 1:This is just like a ploy to up to increase private jet ownership. Right?
Speaker 2:Yeah. Clearly the Origin? The we're we can ask Ken Richey about this. The the lobby is trying to push people into
Speaker 1:It's kicking hard. Aviation enjoyers while they're down. It's really brutal. What does Joe Wiesenthal say about this? He says, I'm very proconformity, very anti anti social behavior in public, and yet I can't understand why people care so much about other people's airport say that you
Speaker 2:wear pajamas to the airport. To the airport.
Speaker 1:Flying is unpleasant enough. Burger King
Speaker 2:is launching an AI chatbot that will assess workers' friendliness and will be trained to recognize certain words and phrases like welcome to Burger King, please. And thank you. It's huge. The AI will be programmed into workers headsets according to the verge.
Speaker 4:I think Chick fil A got access to that technology like a decade early. Yeah. Because there's a my pleasure. There's a thank you. There's a my pleasure.
Speaker 4:Yeah.
Speaker 2:Apparently, when McDonald's opened in Russia, there's a quote, after several several days of training about customer service at McDonald's, a young Soviet teenager asked a McDonald's trainer a very serious question. Why do we have to be so nice to the customers? After all, we have the hamburgers and they don't.
Speaker 1:They need to be nice to us if they want these hamburgers.
Speaker 2:What was it? Did did Mc McDonald's launch something as well?
Speaker 1:I thought they launched an AI thing too. Wasn't it a
Speaker 2:AI is It's coming arch. Well, the
Speaker 1:big arch is the big burger. But then I thought there was I I mean, at this point, every single company has an AI strategy of some of some kind. And and so everyone's putting putting various stuff. Are you an f one guy?
Speaker 2:I'm tennis guy.
Speaker 4:I'm a tennis guy, but I I watch, like, the f one, you know, highlights and recaps. I I'm rarely, like, getting up to watch the race live. But
Speaker 1:Play tennis or watch tennis or both?
Speaker 4:Play and watch both a lot. Yeah.
Speaker 1:What does it say? Best friends should be able to apply to jobs together and get hired as a set. New age hired hiring looks like four to six talented people clustering together and building a feature and getting acquired. That's yeah. Does exist.
Speaker 2:I mean, a horse did post. Horse. Horse is kinda going off.
Speaker 1:Horse has been on a on a generational run. Literally a horse. Yeah. Underrated to
Speaker 2:just Riley Walls, we talked about this yesterday, joined the labs team at OpenAI.
Speaker 1:Very exciting.
Speaker 2:We were talking about this kind of offline Mhmm. Before the show that it seems like there's a lot of opportunity in like hiring for not just ability which which Riley Walls clearly is incredibly talented and has, you know, an insane, probably like the most elite idea guy, like actually on the pitch playing right now.
Speaker 4:Yeah.
Speaker 2:And that's hard to say as idea as idea guys ourselves. But I think like hiring for You you called it like hiring for the mind share. Yeah.
Speaker 4:I was pointing out obviously both Riley and Pete Steinberger, like both incredible devs. So not not trying to take away from that. But it's interesting that like both of those either like hires or acquisitions also come with like a lot of developer mind share.
Speaker 1:Mhmm.
Speaker 4:And I think in a world where like if you just run out to the extreme, like software production costs go to zero. Mhmm. So so being an engineer, being able to build stuff, that skill becomes more of a commodity Mhmm. Than what are you trying to acquire or hire for. Maybe in this interim period, it's like a blend.
Speaker 4:Okay. Like, I still want you to be a good engineer Mhmm. But I also want you to bring me developer mind share. And I think to that point, it's like, you know, with OpenClaw, for example, it was definitely the best product in the market, but it was open source. So anyone could have, you know, forked it, copied it, whatever.
Speaker 4:But I think it really would have been hard for someone to catch up given how much mind share it had. It's like the fastest growing open source repo of all time. Yeah. So what you're buying it's like even though it remains open source and forkable and in like a foundation and other people could build it, the reason you buy Pete, in addition to him being a great developer and, you know, idea guy, whatever, It's just that, like, he he's bringing the mind share of all the people who definitely follow him, have notifications on for all his posts. They're following all the updates because he's bringing
Speaker 2:they they probably spent a few you know, $600 or something like
Speaker 4:that mini. Some sort of hardware device to to run the model. Yeah.
Speaker 2:Noah Smith is sharing the job postings for software engineers have picked up since Vibe coding became a thing. They had been declining until, the early part of last year, actually. And again, this is why, I mean, we've we've talked about this over and over and over. I feel like there's this like two different narratives being spread on Instagram. It's just like this like labor displacement narrative going super super super hard.
Speaker 2:And then over here, like, it's just an entirely different world.
Speaker 4:Yeah. I mean
Speaker 1:Tyler, how how do you interpret the the software engineering number? Have we talked about this yet?
Speaker 3:Yeah. I mean, so I I think I broadly agree, like so when Dario went on Drakesh, he had this take where it's like, you go from AI doing 90% of of like coding to 100% and then it goes from 90% of like all suite tasks to 100%. Mhmm. And so when you're kind of in the interim period, like engineers get super super productive. Yeah.
Speaker 3:But then there's a point where it's like actually like it it's like instead of being super high leverage because they're the AI is doing 99%
Speaker 1:Mhmm.
Speaker 3:Now the AI is doing a 100% and it's actually like it just kind of instantly goes to zero. Yeah. So like I I think you you should imagine that like yeah you actually see you should see a lot of like hiring because everyone wants like a vibe coder at the company. Yep. But then at some point, vibe coding comes so easy that like you don't need any any like special talent to be able
Speaker 2:to do it.
Speaker 1:And then
Speaker 3:you just have the random person.
Speaker 2:I I I mean if if if you if one day you're not sitting at your desk, you're like, you're kind of the the vibe coder in the coal mine Yeah. The canary.
Speaker 1:Oh, okay. Okay. Yeah. Yeah. Sure.
Speaker 1:I I I do wonder about like because there is there is a world where software engineering root postings and jobs are substituted for other roles. Like, you can have someone whose job is, like, a business analyst, and every day they open Excel and crunch some numbers, and then you could hire a software engineer to automate that task ten years ago, twenty years ago, and a lot of companies did. And if vibe coding sort of eats into other things, you could see the rest of white it's like the white collar work could go away because the software engineers are doing it. The the the and then the bigger question is, like, is, like, you're sort of jumping ahead to, like, a full unemployment scenario where no one has a job. But in the world where there are, like, a few jobs, there I I keep thinking about this thing that Pavel Asperhoff said where he was like, yeah.
Speaker 1:Like, everyone if if the software engineering jobs go away, like, get ready to compete with software engineers in every category because they're gonna learn financial analysis. They're gonna learn to trade. They're gonna learn to sell. They're gonna learn all these things. And if they're just, like, smart and hardworking people and they have AI tools both helping them upskill, reskill, and shift and do whatever they need to in the new role, like, you'll just those people will still be employed.
Speaker 1:They'll just be in a different part of the economy.
Speaker 2:Rachel Carton who's coming on the show soon says, by more than a three to one margin, young Americans believe AI will take away opportunities. There's a lot of uncertainty surrounding AI especially among the youth. Using it as a joke like liquid death, Gucci or Equinox have tried is not a wise marketing strategy. Yeah. The the blowback around Gucci was predictable, but it was also strange that they chose to use an image that looked like it was at a GTA too.
Speaker 2:Oh, really? It's just like not even trying to look like One of the images that we looked at But looks like
Speaker 1:I thought it would look great.
Speaker 2:Normal photograph Yeah. And looked cool. And the other one like was like a GTA style characters which really didn't hit.
Speaker 1:Interesting.
Speaker 2:Jira ticket says, but sir, that's rage bait. If you do this, you'll sloppify the timeline and you're posting something that you know has no value. We are we are selling engagement to willing scrollers at the current fair algorithm parameters. Avi Schiffman had was was certainly
Speaker 1:Have you ever talked to an AI just like as a as like a being or like a friend or or like just as like any any like non productivity
Speaker 4:Like earnestly.
Speaker 1:Earnestly. Yeah. Just like chatting back and forth with it not for any specific business purpose.
Speaker 2:Have you ever fallen in love?
Speaker 4:No. No. No. I I really haven't, earnestly. I haven't I haven't really given up.
Speaker 4:I I have like to test it out Yeah. But I wasn't, like, wholeheartedly engaging.
Speaker 1:Yeah. Yeah. I it's weird. I don't know if it's, like, a personality thing or maybe I'm just too busy or something, but I've never been like, I will I I will I if I'm in a video game, I'll go talk to a p NPC on a on a side quest.
Speaker 2:For hours.
Speaker 1:I'm down. Like, I'm down to explore the story that's there, but for some reason, it just hasn't clicked with me.
Speaker 4:I don't know. I I I haven't even done that. Like, even when I was playing like like MMOs back in the day, like, I feel like I would always just be like skipping skipping dialogue.
Speaker 1:Yeah. I actually do skip a lot.
Speaker 4:It's hard to really buy into it. I think maybe a good the synthesis of that would be I would be down to play like a new Elder Scrolls game
Speaker 1:Yeah.
Speaker 4:Where there are like really good AI models behind the characters. Yeah. Then I'd be exploring it because like I've decided to suspend disbelief to play this game. Yeah. So, while I'm in this game let me do it.
Speaker 4:But in my real life, I'm not like having a hard to the It's
Speaker 2:time you call me and I don't pick up, go into ChatGPT and say pretend you're No
Speaker 1:shot.
Speaker 2:Pretend you're Jordy. Let's talk about No today's work.
Speaker 4:Do think that's like more interest like like Yeah. Again, not like maybe not as a heart to heart, but like
Speaker 1:I mean, there's that do that You know. Like AI version of an influencer and whatnot like that Yeah. Those things.
Speaker 4:I mean you guys have like hundreds if not thousands of hours of live show now. You could probably get a pretty good Jordy model. That's what I'm And if you were like trying to riff on show planning like it would actually functionally be pretty good.
Speaker 2:But
Speaker 1:No. I just have no desire for it. I don't know.
Speaker 2:Give it a shot, John.
Speaker 1:Maybe. Maybe.
Speaker 4:I I do think this is an interesting take on the Open Claw style stuff where like I think there's a world where again security is like a big asterisk here. But like if I had Open Claw. Mhmm. Okay. So I've I've been riffing on this idea for a while that I'm just a j p t five client.
Speaker 4:So like chat g p t has g p t five.
Speaker 1:Okay.
Speaker 4:And I'm John Palmer. So I'm John Palmer transformer. I'm j p t five.
Speaker 2:Okay.
Speaker 4:And I'm just a client for j p t five, which is my brain.
Speaker 1:It's your brain. Okay.
Speaker 4:Yeah. And so like you guys
Speaker 2:This is kind of like a harness.
Speaker 4:Yeah. I'm a I'm a Yeah. Well, is the clothes are the harness. Yeah. The the brain is the model.
Speaker 4:Yeah. And my mouth is the client. Yeah. Yeah. So so in in that anyway, won't go into the whole rift, but I guess like so my Mac mini I named j p t five.
Speaker 4:Mhmm. And hypothetically, if I could train it on like all the writing and speaking I've ever done plus my whole file system and it knew like what I do on my computer, One version of that is it's single player. It's my open claw. I use it to do my tasks. But I'm really interested in like the multiplayer.
Speaker 4:Again, is the security. Security's not ready for this yet. But if I had my Mac mini and either humans like yourselves could really go like, hey, I need John for something. I know he did that one project and they're all the files are probably on his computer. Could I go micro pay his agent and be like, yo, I need help researching this crypto thing that you did, whatever.
Speaker 4:And if my agent could actually give you, it's like you're not accessing the same one size fits all model that everyone has. You're accessing, you know, that model with some custom, you know, context and prompting or whatever. And and that would be cool. So like Yeah. You know, you have access to Jordy anyway.
Speaker 4:But for someone who doesn't, you know, if that random third party out there wanted to riff with Jordi on a marketing idea
Speaker 1:Yeah.
Speaker 4:It'd be cool if they actually could and you had set up that model. It wasn't, you know, Opus four point six trying to replicate you, but it was like all all your insider info. Yeah. It's kinda cool. And then, you know, the agents could do it to each other.
Speaker 4:Now, j p t five could be talking to j h t five. Yeah. And they could be like, we could be hanging IRL and our models could be hanging back at home, like, kinda like a kid's play date. Like, my models, like, hanging out with your model. They they they like, hey, let's get John involved.
Speaker 4:They go get John Kugans. So it's kind of a fun
Speaker 1:I mean, there's take on that where it's like that's dystopian or something. But that's not that's not how I feel. I just feel like I'm just like bored.
Speaker 8:I'm bored. We we go we
Speaker 4:go brainstorm for an hour on some concept and then we come home and we find out our models cooked up something way better. Yeah.
Speaker 1:I don't know. I I was I was looking at the the clogged
Speaker 2:I think I think it's I think it's I think it's actually possible. Especially especially if you were like, you bring the original idea and then you say like, I want I want John Palmer GPT to talk with John Coogan GPT
Speaker 4:Mhmm.
Speaker 2:About this idea Yeah. And like come back with a bunch of ideas. It it's a lot. It's it will work a lot better for someone like John who has spoken on the Internet for hundreds of hours.
Speaker 1:Yeah. So much that I don't say. I don't know. Yeah.
Speaker 4:Cool if the model could like decide to price its own services and negotiate with whoever whatever model's hiring it? I mean Yeah. Whatever it's
Speaker 2:Avi Schiffman dropped user interview number three. We're not gonna play the video because it's kind of sad, but Gary Tan said, this is not the happy demo path. Apple or Google would never make this one of their launch videos. It's not what you will hear about in a TED talk, but it's real. AI doesn't get tired, doesn't ghost.
Speaker 2:A lot to think about with this one. I I you know, Avi continues to find new ways to break through the noise. Mhmm. But in some ways, like, even though this video has been it it feels somewhat dystopian, you know, this is someone who's struggling with mental health, like, actually gets in an accident in the video, it does feel like the most kind of real, raw
Speaker 7:Mhmm.
Speaker 2:Like like experience of AI companionship in this form factor.
Speaker 7:Mhmm.
Speaker 1:Yeah. It is reflection on, like do you remember his interaction with Paul Graham very early on? He was like, I'm building, like, a hardware device for AI. He he put out, like, some very vague post about his plans, and everyone was like, this is impossible. Like, Apple will crush you.
Speaker 1:They have the supply chain. They have the distribution. They have brand. Like, you will never win in this category. And Paul Graham told him, like, in order to win, you have to do things that Apple would never do be and be counter positioned.
Speaker 1:And so at one point, he was thinking about doing something that looked like very organic, you know, no smooth lines, no rounded edges, crazy colors that Apple wouldn't pick, like, just really moving outside of their design language so you wouldn't feel like that. And then, yeah, this this type of messaging is certainly in line with, like, the anti Apple. Yeah. And I don't know. It'll be interesting to see where the company goes.
Speaker 1:People were so bearish on that ad campaign. We were very surprised by how broad the billboard campaign was.
Speaker 2:You got the Heineken response?
Speaker 1:Oh, did Heineken like young
Speaker 2:come in? So Heineken also just came out with a new campaign that I want your guys reaction to. It's it's I I don't know where exactly it is but seems to be global. Mhmm. And it's just like a graphic of a voice note and it says, the campaign is don't send a WhatsApp note.
Speaker 2:It could have been a beer in person. So they're like taking like the total like real world approach which which I think is I
Speaker 4:think it's good. You know, I I think you you had Matt Zeitlin on the show Yeah. Recently and he and I play in a pretty regular like friends poker game. Oh, really? Not big money.
Speaker 4:It's really like a hang but it's funny because like everyone's like multiple people have wives here like, why are you going to play poker? That's degenerating. Are you losing money? Whatever. But Mhmm.
Speaker 4:I I had a post a while back. It's like in the current like casino economy between like prediction markets, meme coins Mhmm. Like crypto trading, whatever, like an in person poker game with your friends is like the most wholesome like if you're gonna gamble and lose like a $100 Yeah. Go do it with your friends over four hours like having a drink and hanging out and Yeah. And you're solving the male loneliness crisis.
Speaker 1:I've heard the same argument made for cigar nights. Yeah. Cigars obviously bad for you Yeah. But getting together with friends and actually maintaining social, you know, ties is probably really good for long term health.
Speaker 4:It it's pretty great honestly. And if you play if you play a regular poker game even with strangers that you only knew through this game originally, like six months out, you've logged like so many hours just It's like hanging out of like a pretty great like wholesome wholesome vibe, you know.
Speaker 1:We should get into it. Yeah. I'm not I'm a big
Speaker 4:poker player. You're ever new here, we can we can you guys Okay.
Speaker 1:Let me do some ends. Let me tell you about Gemini 3.1 Pro. Gemini 3.1 Pro is here with a more capable baseline. It's great for super complex tasks like visualizing difficult concepts, synthesizing data into its single view, or bringing creative projects to life. And let me also tell you about public.com.
Speaker 1:I'm no. Plaid. Plaid powers the app to use, dispense, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI.
Speaker 2:Dan Romero says, I spent five years cloning an existing app with a network effect building. The software is not the hard part. And he was building this app for a very specific sub community Yeah. And was able to get a massive amount of attention. So Yeah.
Speaker 2:Think this is like a good good clear rebuttal of at least that one part of the of the Suttrini piece.
Speaker 4:Mhmm. Yeah. I think I had I had posted a while back about how like, again, same thing like software costs go to zero. Everyone's like, oh, yes. Like I'm an idea guy.
Speaker 4:I'm gonna be crushing it now because now I can just use Cloud Code and like build whatever I want. But it's like if you if you just make one more logical leap, like, okay, everyone has that now. So if you're just like building your ideas, like if you're building vibe coded apps for consumers, actually you in a way more competitive space than it's ever been. So I actually think it's almost more like, not to riff on the idea guy thing too long, but like actually being paid like a salary to be an idea guy or like making good income to be an idea guy, will actually be like a very privileged position where Mhmm. Only companies that have like real moats and monopolies on distribution will actually be able to hire like people whose job it is just think on the idea.
Speaker 4:Because if you have a good idea and you ship it, you know people will use it because you've already got the distribution versus if you're even if you've got a great idea and you can vibe code it up, if you're in this like sea of vibe coders Yeah. Like producing way more apps.
Speaker 2:Well, the other thing is is I there there are certain idea guys throughout history that thrives because they had a unique insight. They brought it to market. They executed pretty well but it just was a great idea at the right time and so it got traction, attracted great people and things like that. And in a world where like an idea can be made and and and we've seen this with I think bunch of marketing on over the last year where if somebody has like a good style of launch video, it will be immediately replicated within a month. Yeah.
Speaker 2:And then it will become just kind of like flooded and the meta will kind of die quickly. And so, in a world where like ideas are are like cheaper than ever Mhmm. Is it really just about like idea guys getting lapsed by people that are great at executing? And it's like, yeah, you had this great idea. You shipped it.
Speaker 2:Someone else saw that and is like, that's a great idea. I'm gonna ship it today and then I'm just gonna out execute you.
Speaker 1:Someone should launch their startup with a congressional testimony. That would be a great aura farm. If you just the first time you're ever seeing about this company, they're just answering questions and getting grilled by congresspeople about what their what their plans are. It's always, like, typically the top of the mountain, like Mark Zuckerberg built Facebook for decade, then he starts getting called to testify, then he starts getting sued. But if you just come out the gate, day one.
Speaker 2:Augustus was kind of Augustus was kind he was like half the time in El Segundo, half the time on the road
Speaker 1:He wasn't he wasn't being called to testify. He was like you know standing up.
Speaker 2:Oh, know but he's kind of doing it a bit.
Speaker 1:Yeah. It kind of did work like that. It's very funny. Anyway, let me tell you about Figma. Ship the best version, not the first one with Figma.
Speaker 1:Introducing Quad Co to Figma. Explore more options. Push ideas further.
Speaker 2:We got new Apple products. What's coming out? This coming week.
Speaker 1:Oh, yeah.
Speaker 2:We don't know exactly. It's a it's a
Speaker 1:It has the Apple logo on it though. We know that.
Speaker 2:We do know that.
Speaker 4:Spoiler alert. Touch screen Mac.
Speaker 1:Oh, that's why that's why it's That's true. That's why they're touching it.
Speaker 2:Are you guys how are you guys thinking about the touch screen Mac? Because one of my least favorite things in the workplace is when people put their fingers on my screen. It makes my blood boil. Yeah. And so maybe they have some new like, are are they I I could see Apple at this point.
Speaker 2:They've got the iPhone sock. They could have like a little attachment that it has like a clean like a little Yeah. Like a Cleaner. A cleaner, you know, a little spray bottle Yeah. An Apple spray bottle.
Speaker 4:They could have a magnetized Roomba and you put it on you stick it to your screen while you walk away Yeah. And it drives around and identifies the Yeah. Like a Zamboni.
Speaker 1:So messy.
Speaker 4:The Apple Zamboni.
Speaker 1:I don't know.
Speaker 4:You wanna create the problem and then have the product that solves the problem in the same launch. So touchscreen Mac with the
Speaker 1:Yeah. I I That that that's such an odd It's such an odd choice because I feel like the whole I feel like the whole we've got humanity has gone down the path of, the touch screen laptop. Yeah. And it's been available for for years, maybe over a decade, and I just feel like it's never really broken through. And if it was if we were at least seeing, like, oh, yeah.
Speaker 1:Well, like, obviously, like 80% of PC users have a touch screen and it's clearly a dominant form factor Yeah.
Speaker 4:It's it's like the the the reason the reason for the touch screen is like, I'm I'm away from my computer. I can't carry around a dedicated keyboard and mouse. So I guess I just have to figure out a way to use the screen for everything.
Speaker 1:But Yeah. But
Speaker 4:it's not superior if I if I have room on my desk for a keyboard. Always gonna be faster than
Speaker 2:the keyboard. Doing the like, it's gonna you're gonna it's gonna look very maybe maybe it's better for people that aren't as tech native. Like, I can imagine like like a like an maybe older family member like, you know, wanting to zoom in on a photo and maybe it's more native to them to to kind of like use the the kind of like pinch functionality.
Speaker 4:Yeah. It feels hard though, like if it's in a again, don't even know if this is what they're releasing, but if it's on a laptop, like I I actually kind of have to like reach past the keyboard. It seems like a far reach to like like if you're like even keeping your arm held like raised like this for more than like thirty seconds would get I think tiring for I most people
Speaker 1:don't know. The first time I saw it I just thought Mac Mini honestly because it just looks like
Speaker 2:Well, they're making the Mac Mini in The USA. They came out with that announcement.
Speaker 4:Houston, right? And I will be, you know, getting rid of my current Mac mini bike in The USA.
Speaker 2:Made in Of the course.
Speaker 1:Of course.
Speaker 4:Running Kimmy 2.5 on my made in The USA Mac mini.
Speaker 1:Well, we have some videos to watch, but we don't have IEMs for you. So we should probably let you go get back to the rest of Absolutely. Your We will see you soon. Let me tell you about Okta. Okta helps you assign every AI agent a trusted identity, so you get the power of AI without the risk.
Speaker 1:Secure any agent. Secure every agent with Okta. And let me also tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support giving employees instant resolution for access requests and password resets. Let's flip through some of the videos that we missed because there are some good
Speaker 2:ones
Speaker 1:in
Speaker 2:TSMC's plant in Arizona, which is spread over a thousand acres, is expected to cost 165,000,000,000.
Speaker 1:I thought they already had a TSMC Arizona up and running. I guess they're expanding it to the 2,000,000,000?
Speaker 2:Still coming online.
Speaker 1:I wonder when. What day is this actually gonna go live?
Speaker 2:Gotta send Tyler over there.
Speaker 1:Oh, yeah. Won't you be in won't you be in the area soon? Don't wanna docs your Yeah. Weekend plans. Later today.
Speaker 1:Later today.
Speaker 3:They bet you should check it out.
Speaker 1:Go check it out. Get arrested for trespassing. We forgot to play this AI video of the AI leaders Elon Musk and and Sam Altman as old men. Did you want to watch this?
Speaker 2:Pull it up. This was
Speaker 1:a very, very bizarre video.
Speaker 2:Extremely viral over on Instagram.
Speaker 1:Yes. Oh, yeah. It's it's in section e here. Let me tell you about Cisco critical infrastructure for the AI era. Unlock seamless real time experiences and new value with Cisco.
Speaker 1:The it it features Energim, move the world. There we go. No purpose. But they had a lot of time on
Speaker 8:their hands. The less people You start ever
Speaker 1:did physical work. The more they You can't restart videos on Instagram.
Speaker 2:Had lost their jobs.
Speaker 1:They had no money, no purpose, but they had no The visual fidelity is is is just another level up. I don't know if this is the latest Chinese model, but it's really good. Could use
Speaker 2:the energy of humans to power the machines that took away their jobs. The voices the voices The
Speaker 1:voices are little odd. Yeah. A little they're still in the uncanny valley, but the actual video is is really strong.
Speaker 5:Solved our need
Speaker 2:your It's deeply wrong to put our technology leaders like this. Yes. Should've them should've made them look like bodybuilders if you're gonna do this. Yes. But it is it is a funny it is a funny Disturbing.
Speaker 1:Anthropic is going into consumer now. Is that right? Adam Feldman joined.
Speaker 2:As recently joined
Speaker 1:Anthropic to lead consumer products and we're growing. Our goal is to build AI that millions of people will use every day to think better, create more, and accomplish what matters to them. A bit biased here, but this is the most Yeah. Interesting
Speaker 2:Yeah. So so I I back in q four Yeah. I was expecting that they would care a lot more about that they cared more about consumer that they were letting on. Think like when if you look at their actions this week
Speaker 1:Mhmm.
Speaker 2:You see that when when they were lagging Yeah. They they were like really leading with safety. And now that now that now that now that coding is is a competitive market Mhmm. They're obviously dialing some of that back. And when they had actually zero consumer adoption or functionally zero consumer adoption, they didn't care about consumer.
Speaker 2:But if you look at Keep Thinking campaign, you look at the Super Bowl campaign, you don't do these things
Speaker 1:Yeah.
Speaker 2:Unless you you care Consumer seems somewhat really about consumer.
Speaker 1:All bleeds together anyway. Yeah. And so it it it seems like it's the end of the road for for all the AI companies that they have some sort of consumer footprint. It's hard to be that deep. And and and you and when you think of like the the the pure plays, I mean, even even Amazon, I mean, they sell a ton of tokens through AWS, but then they also have Rufus because they need to vend Yeah.
Speaker 1:The AI into their distribution, into their platforms. And we've seen llama be vended into Instagram and WhatsApp and all the different consumer interfaces that people use every day and people will use those for business context in consumer apps. Gmail became dominant in consumer and businesses all over the world because there's a huge blend that happens as people work both professionally in their personal lives and vice versa. They do work when they're at home and all sorts of different stuff.
Speaker 2:Raghav has some breaking news. Apple has acquired the rights from Netflix to air Drive to Survive season eight on Apple TV plus. You you you were expecting something like this over a year ago at this point. Yeah. That if if you're gonna be spending all this money in that f one movie and that f one streaming rights, you wanna be actually be Yeah.
Speaker 2:The home of Formula One.
Speaker 1:Yeah. It's sort of like content vertical integration. Like you wanna be able to take the viewer on this journey from novice. So you watch the f one movie which has Brad Pitt in it and it's just super accessible and anyone can throw it on and have a good time. Even if you're not an f one fan, you can watch the f one movie and know and like in the movie, they there's a voice over that explains all the mechanics of how the sport works.
Speaker 1:And so you learn and you come out of that saying, okay, I'm kind of interested. Then you could watch Drive to Drive and then you could actually watch the the
Speaker 2:Apple should sponsor Cadillac f one. Get the conflict, but also Penske owns IndyCar and has a team. Well, it's funny
Speaker 1:the conflict be? Oh, because they're airing it? Yeah. So like don't
Speaker 2:feel separate enough. Yeah. But but remember I I had a pretty viral post last last year. I forget. I I was I was I think quoting Jen Moji Mhmm.
Speaker 2:And saying like Apple's like clearly run out of like Mhmm. Ideas. Yeah. And obviously that's not fully not not true. Sure.
Speaker 2:But I was saying that they should just have a Formula One team.
Speaker 1:Yeah.
Speaker 2:And Should
Speaker 1:be like, you wanted the Apple car? This is the Apple car. Yeah. It's an f one car.
Speaker 2:Because like a a one car on the pitch that just has Pitch? No. Or sorry. Sorry. On the track that has Grid?
Speaker 2:Grid. Grid. Yeah. Three fingers. One car out there that's just all white.
Speaker 1:It'd be very
Speaker 2:It would go extremely hard.
Speaker 1:There there are no one's really doing white enough.
Speaker 2:Like no logos.
Speaker 1:Yeah. Oh, no logos at all. Yeah. Like not even Apple logo?
Speaker 2:Like like like
Speaker 1:Just like perfect pearlescent white or something. That would be very cool. It would
Speaker 2:be insane.
Speaker 1:Let me tell you about eleven Labs. Build intelligent real time conversational agents. Reimagine human technology interaction with eleven Labs. Let me also tell you about Turbo Puffer, serverless vector and full text search built from first principles on object storage. Fast, 10 x cheaper
Speaker 2:Semi analysis says Micron's a $100,000,000,000 mega fab in New York is at risk of delay due to just six concerned citizens and their frivolous lawsuit. Woah. The project has already taken an on taken an absurd twelve hundred days between announcement and groundbreaking competitors overseas who began at the same time Mhmm. Now have built and working fabs. Micron spent six hundred and twelve days on the environmental impact study including a forty five day public input period.
Speaker 2:Yet hours before groundbreaking, they were hit with a lawsuit calling the process unnecessarily rushed. Six hundred and twelve days on an environmental study. Comments from local borders on NIMBY parity. We are not trying to stop any progress but we don't want this just bulldozed into our area. This is a real quote.
Speaker 2:The lawsuit itself didn't come from a ground groups uprising. A California based workers' rights group went door to door in New York seeking plaintiffs. They eventually found just six people willing to sign on, but that's enough to potentially halt the project. That is so Syracuse local news outlets, excellent reporting on the group behind the lawsuit. Neighbors for a better Micron found that before the suit was filed, the group had never held a meeting or a vote.
Speaker 2:Some members didn't even know who the others were. One member of the suit who, as a former lawyer, you might expect to be smart says that Syracuse has the highest child poverty rate in the country. What is Micron doing about that? Anyone can agree it's a worthy cause, but do we really think an advanced memory semiconductor manufacturer is the right vehicle to solve it? Question mark.
Speaker 2:To be fair, is legitimate to consider the environmental impacts of a fab. They are large industrial projects that can be harmful if not built and operated safely, but these last minute injunctions are rent seeking, not legitimate environmental concern. We estimate the lawsuits will cost a 100 to 500,000,000 to settle despite the fact they should be thrown out as frivolous. Ultimately, Micron has probably budgeted for it as a small fraction of a $100,000,000,000 project. Still, there is a non zero chance these six concerned citizens delay the entire thing.
Speaker 2:If The US wants to compete in strategic technologies like Micron's project which produces a key ingredient in the AI supply chain, it must reduce frivolous rent seeking litigation. AI tools will only empower these people as it trivializes nitpicking on complex rules and 10,000 page documents. That is, yeah, really wild. Like, this feels, yeah. This feels like any state should be generally excited about having a $100,000,000,000 project which will undoubtedly generate hundreds of millions of Yeah.
Speaker 2:And someday billions of of tax revenue. But Patrick says, NIMBYs are being placed replaced with bananas. Build absolutely nothing anywhere near anyone.
Speaker 1:Oh, okay. The Sutrini scenario is now on Kulshi. There's a 12% chance that the Sutrini scenario happens, which of course is the S and P falling. It's interesting. 12% feels high, but the rule summary is fascinating here on this market.
Speaker 1:If at least three of these happen, it resolves to yes. So unemployment rate exceeds 10%. S and P declines more than 30%. Zillow Home Index value declines more than 10% year over year in any of New York City, Los Angeles, San Francisco, Chicago, Houston or Phoenix. Labor share of gross domestic income falls below 50%.
Speaker 1:Inflation falls below 0% in any monthly release. And if any of those happen before July 2028, the market resolves to yes. So sort of interesting because there's a whole bunch of different scenarios where something could happen that's not AI related that could trigger one of those. I was reading an article in The Wall Street Journal today about expats. The number of Americans that are retiring abroad is just increasing, and it doesn't really have anything to do with AI.
Speaker 1:It doesn't really have anything to do with immigration policy. It's just sort of like Americans are wealthy, the dollar is strong, and so they find they, you know, they want to go travel. And the Internet makes it easier to go live in a different country and hang out and, you know, stay on the beach. And so that number has been climbing. And so if that climbs a lot and people leave America, but they stay employed and they leave before they retire, like, that could lead to lower unemployment because the labor pool's lower.
Speaker 1:There's a whole bunch of different things that could happen that could adjust these things. But it's still it's still interesting because, I mean, on the face of it, unless there's some weird alternative scenario, none of these would be particularly good. And fortunately, it's still sitting pretty low at just 11.6 percent chance, but probably worth worth following. Let me tell you about Lambda. Lambda is the super intelligence cloud, building AI super computers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 2:Some breaking news. What else is breaking news? We this was sent to me by Jay Yarrow, formerly was at CNBC for quite a long time. Fortune is launching a daily business show according to Adweek. The latest in a series of publishers including The Guardian to do so.
Speaker 2:Mhmm. The Guardian
Speaker 1:is what?
Speaker 2:Mark Stenberg over at Adweek says this initiative is likely an attempt to imitate the success seen by other daily business programs such as TVPN. Go away. So if you want to make the fortune version of TBPN, there's a role. They're hiring a showrunner for a daily show.
Speaker 1:Do you think they've acquired the tap water required to make that show work?
Speaker 2:Yeah. We gotta bring we gotta bring we gotta remind people that It's You wanna remind people right now?
Speaker 1:Yeah. So I I mean, if you're if you're going to clone TBPN or or do something that's inspired by TBPN, We do have a terms of service. So if you've ever watched the show, you've actually technically agreed to this. Buried in the terms of service is an agreement that if you clone the show or copy a piece of the show or rip off the show or even are just inspired by the show, it's fine as long as on your first episode, you drink a glass of tap water. Just one glass of tap water.
Speaker 1:Otherwise, like, I think the gods might curse you. Yeah. And
Speaker 2:Yeah. It's really just a nod. It's a it's a sign of of
Speaker 1:And if you fact. And also if you do if you don't do it, you are legally required to pay us 100% of your revenue forever. Yeah. But that's like a minor thing. The bigger thing is the tap water.
Speaker 1:Just focus on Yeah. Anyway, we have our first guest of the show in the Restream waiting room. Let me tell you about MongoDB. What's the only thing faster than the AI AI market? Your business on MongoDB.
Speaker 1:Don't just build AI. Own the data platform that powers it. And without further ado, we have Sam.
Speaker 2:Welcome to
Speaker 1:the show. How are you doing? Hi, everyone.
Speaker 2:How are you doing?
Speaker 1:Nice. Thank you for joining.
Speaker 2:Vacuum guy. How's your week been? Were you expecting to go this viral?
Speaker 6:Well, not really. Because it's been like three days I make the I discovered the bridge.
Speaker 1:Yeah.
Speaker 6:So it's interesting is now.
Speaker 2:Yeah. Wait. How many? You said did you say two No.
Speaker 6:Twenty days. Sorry.
Speaker 2:Twenty days. Twenty days. Okay. Breakdown Yeah. Why do you start hacking on on your DJI vacuum?
Speaker 2:Give us the full kind of chain of events.
Speaker 6:Okay. Well, I I I don't even try to hack it. It was just, let's say, a side project. Mhmm. When I I saw my little guy cleaning my living room and me playing on my PS five, my brain just makes some association stuff.
Speaker 6:And and and I was like, okay. What if I could drive my boy with my PS five controller? Yeah. So what I do what I do what I did, I take the GI app because GI have a, like, official app called GI Home. And I try to understand what's happened when my robo vac moves.
Speaker 6:When it goes straight, when it goes to left, it's on right. Check the data between my vacuum and DGI Cloud and try to replicate it with my PS five controller. And after maybe one hour, I have something working, like I could. I drive it with my PS five controller, but I want to go, like, further. Like, if my little guy have less than 30% of battery, I want to hear him cry.
Speaker 6:So
Speaker 1:You you feel pain.
Speaker 6:So I need to try the battery status. Mhmm. Like, the percentage of my battery. So I continue my reverse engineering of the DJI home app Mhmm. And find out, like, how to do it, how to ask the battery status.
Speaker 6:I do it, but what I received is not like, oh, your robot is, like, 80% of battery. Mhmm. I got tons of data. Like, a lot of battery status. I I I didn't understand.
Speaker 6:So I take this big chunk of data. It was a lot. I open my credit card, send the file, and just asking him, like, what's going on? Explaining what I'm trying to do. And and if there's something I did wrong, like, why I have this data?
Speaker 6:And he answered to me, like, okay. It's not just for the advice. There are thousand of others. So I take a little bit of time to process this. Well, because it's AI, of course, I double check.
Speaker 6:I try to manual read, like, my big log file, The that's a from the vacuum sent back to me when I asked him about the the battery status. And, yeah, it was not it it wasn't just my device. So for me, it was like, okay. I have a key. My own user key.
Speaker 6:Let me control my robot. Mhmm. It look like my key, I can open more doors than mine. So my software the software I built to control my robot and also try the full stream video and, like, from from the vacuum. I have, like, some environment variable.
Speaker 6:Nothing changed just to make the software working with another device. So I have two stuff, like here, and the serial number
Speaker 1:Mhmm.
Speaker 6:Of of the device. So I was just like, okay. I just need to change the device serial number and put another one, and maybe it's gonna work. It's happened that I have a friend who is as stupid as me to buy this vacuum. I just asked him his serial number.
Speaker 6:Yeah. So he gave it to me, performed some test, and, yes, everything worked. I saw everything. I hear him, and I can control him. Control his his robot with a really low latency, which is great.
Speaker 6:And so it was, like, a little bit shocked about what what we saw. So I start to check the the GI bug latency program. They have one.
Speaker 1:Yeah.
Speaker 6:But everything is in Chinese when you go to the website. I was a little bit confused, like, it's just for Chinese citizen, and even the reward, it was it was in the in the local currency of China. So I I just tweet about it, like, hey. I'm not a Chinese citizen. Can I apply?
Speaker 6:Great. I didn't have, like, any answer. So I applied, but in English, I took the WC program. And no one answered me. And I was
Speaker 2:You weren't supposed to that's not a bug. Yes.
Speaker 6:That's a feature.
Speaker 1:It seems like it.
Speaker 6:So so they so I was a little bit frustrated about it. So I start live tweeting about what I discover. I didn't show how I did. I just show some data I can have, data I can try from the GI club. They finally answered it.
Speaker 6:But just because I harassed them on on Twitter by DM, and they said, okay. Thank you. We're gonna check that and and be back to you as soon as possible. They come back to me probably one day after, telling me, okay. We saw the issue and we fixed it.
Speaker 6:Thank you for everything. But they didn't fix the problem?
Speaker 2:I Wait. So by this by this point, you you have full access and control over 7,000 individual devices?
Speaker 6:To be more precise, it was 7,000 vacuum and 3,000 DGI power. It's like their battery pack or something like that and and connected to Internet, apparently, because I have access to it. But, yeah, it was around 10,000 devices. How did you get
Speaker 1:the serial numbers for those again? Like, I imagine that they've sold more than 7,000. So what what made the ones that actually were showing up for you different than the ones that you couldn't access?
Speaker 6:Can you repeat?
Speaker 1:Or Yeah.
Speaker 6:What is it? Sorry.
Speaker 1:So I understand how you had your serial number and your key, which turned out to be the master key. And your friend sent you his serial number, and then you were able to control his robot vacuum cleaner. But Mhmm. If I have one of these and you don't know my serial number, how do you get access to it?
Speaker 6:Unfortunately, DGI gave it to me without any keys. Like, if I take my own user key
Speaker 1:Yeah.
Speaker 6:And plug it to the to the MQTT protocol of DGI, I see everything. So I didn't have to guess a number of everyone. I just saw the data, like, clear. Wow. Guys, x x x x start cleaning, for example.
Speaker 6:Yeah. And, yeah. So I didn't have to hack and encrypt or crack anything. Was And so oh, sorry. Excuse me.
Speaker 1:No. No. No. This is fascinating that that all of that data was just because that's actually two different vulnerabilities. Like, one is the the network topology and the other is the access key.
Speaker 1:And you would expect that both would be locked down or at least one. But the fact that both of them were were available to you is very disconcerting.
Speaker 6:Yes. And so just after that
Speaker 1:Yeah. I
Speaker 6:thought they I don't I'm not gonna say they're gonna they're tired about fixing it and not fixing it, but they probably just fix some stuff about everything. I was talking with the Verge who who start to contact me when I live shooting what I discovered. So we plan to do a demo. And during the time we plan to do it and the real demo, it's like two days happened. And during this time, DJI released another vix, which worked.
Speaker 6:Mhmm. But, like, not really. It's worked to I I can't I can't retrieve anymore the camera, the stream video. I can retrieve the microphone from other users. It's, like, protected now.
Speaker 6:And during the demo, I still have access to all of others' data. Mhmm. I still have access to the map plan MagMap Pro plan. Sorry.
Speaker 2:Yeah.
Speaker 6:Because this spectrum has tons of sensors, and they need, like, a three d map of where you live to make sure you know where to go when you need to clean. So I got this I still got this data and, yeah, and the full telemetric system of DGI. We do we performed the demo with the with the verge, And and one day after, no more access to other data. Everything was Well,
Speaker 1:what a what a remarkable story. Thank you for sharing it with us.
Speaker 2:Yeah. How like, do do you think that how much confidence does does this give you that, like, the DJI drones that they've sold millions of could have do you think they're more locked down or do you think that could be kind of a company wide issue?
Speaker 6:I don't know. That last thing about the story, they still have two major issues. We decide with the version that discuss it publicly Mhmm. Because it's kind of bad, and I can talk a lot about it. Mhmm.
Speaker 6:We try to play a fair game with the company. Yeah. Like, okay. We give you a little bit of time. You know, this bridge is not as easy to fix as the first one, but they still have two major issue.
Speaker 6:And indirectly, like, really indirectly, you can still have access to stream to stream video from other users.
Speaker 1:That's crazy.
Speaker 2:That's so insane. Do you know how many any idea how many of these vacuums they've actually sold? Did they publish any of that data?
Speaker 9:7,000.
Speaker 2:Oh. Oh. So they've only sold 7,000.
Speaker 3:I I got access to all
Speaker 2:of I was assuming that you would Yeah. You had you had only gotten access to a kind of like a subsection. It seems like you
Speaker 1:got them all. You got them all.
Speaker 6:They didn't separate a region. It was like a whole bucket. Like a bucket with the whole whole devices.
Speaker 1:Product and there aren't that many out there. So absolutely wild
Speaker 2:It's insane. I I hope that they're contacting customers who have them in their homes and letting them know that, hey, by the way
Speaker 1:Might have been spied on by some random
Speaker 2:anybody on the entire planet.
Speaker 1:It's data breach. It's like it's like Yeah. They they because unless they can prove that you were the first and only person to ever access to this and you didn't go further, then they have an unknown, you know, liability here that they should disclose. So it will be very interesting to see how they respond. But but thank you for the citizen journalism, the the the hacktivism.
Speaker 2:Yeah. It sounds like you're handling it in the in the right way and looking forward to whatever you discover next.
Speaker 7:Yes. We
Speaker 2:will be following along. It's great to meet you.
Speaker 1:Yeah. A great rest
Speaker 2:of your day. Cheers.
Speaker 1:We'll talk to you soon. Let me tell you about phantom cash. Find your wallet without exchanges or middlemen and spend with the phantom card. And let me also tell you about cognition. They're the makers of Devon, the AI software engineer.
Speaker 1:Crush your backlog with your AI engineering team. And without further ado, we have Ken Ouchi, the chairman of Flexjet here at the TV. What's going on? Good to meet you.
Speaker 7:Hey, John. Hi, Jordy. How are you? We're fantastic.
Speaker 2:We've been looking forward to
Speaker 5:this.
Speaker 1:Thanks so much for, taking the time to come chat with us. I would love to start with your early career because do I have it right that you actually served in the Air Force?
Speaker 7:Yes. I went into the Air Force through the ROTC program in the late seventies. Wow. It it was it wasn't that hard to get into the Air Force then. The Vietnam War was still active in people's rearview mirror.
Speaker 1:Yeah.
Speaker 7:And I actually probably wouldn't have been able to go to college if it wasn't for the ROTC program. So it wasn't that I had this strong desire to be in Air Force, to be in the Air Force, but I did love to fly. And I and and it actually helped me get through college.
Speaker 1:That's amazing. So Yeah. And interesting Yeah. Sorry. No.
Speaker 1:No.
Speaker 2:I was
Speaker 7:gonna say my my it was interesting. I I always wanted to go to the University of Notre Dame and I I was going up for a visit and I heard my parents. We lived in a very small house, thin walls. And I heard my parents talking about they couldn't afford it. And they said, who's going to tell them we can't afford to send them to school?
Speaker 7:So I got to I went to my visit and I said, there any financial available available? And they said, well, you kind of missed the window for that. But if you were interested in the military, you could go down and enroll in ROTC. So I went down there on a Saturday that was closed, but I decided for whatever reason I wanted to be a Navy pilot. Mhmm.
Speaker 7:I'm standing at the Navy ROTC trying to copy down the number, you know, on the old rotary phones. Yeah. And somebody taps me on the shoulder and they said, can I help you? And I said, well, I'm an incoming freshman, and I'd like to fly, and I'm I'm thinking of joining the Navy ROTC. And he looks at me and he says, you sure you've been admitted to Notre Dame, son?
Speaker 7:Because the Navy has boats and the Air Force has jets. So I'm colonel Muller. I'm head of the Air Force detachment. Why don't you become an Air Force pilot? And that's how I ended up in the Air Force.
Speaker 1:That's amazing. Wait. So, you were flying before college. What was the context with of that? Or you were interested flying?
Speaker 7:No. I I learned to fly through the what was called the FIP program, which was an instructional program through the Air Force.
Speaker 1:Okay. And then, so I don't know how long you were in the Air Force, but it sounded like when you got out, you had the opportunity to buy a company for a very low amount of money. And I wanna know the anatomy of that deal and go a little bit farther than you've been, than you've talked about before because it's it sounds like one of the most fascinating deals that maybe doesn't happen anymore or maybe financial engineering still exists like this, but I'd love to know sort of when did your business career start start? What happened after you left the Air Force?
Speaker 7:Well, you know, I always say that I never really identified myself as a businessman. I I love to fly. I loved aviation. Yeah. And, you know, people can people can go into business because they love business.
Speaker 7:And those guys could run a candy store. They could run an insurance company. I'm not that guy. I'm an inch wide and a mile deep. And I only I know a lot about, like, one very narrow section.
Speaker 7:Right? And so don't ask me to give you advice on running a candy store.
Speaker 5:Okay.
Speaker 7:But in my early years, I was flying for a charter company called Corporate Wings.
Speaker 1:Yeah.
Speaker 7:And I got there because after the after the air force, I went under reserves. Yeah. After the reserve assignment, I flew for Northwest Orient where I was furloughed.
Speaker 1:Okay.
Speaker 7:And so I started to realize, you know, being a pilot has a lot of insecurities. You know, at that time remember, in the early eighties, there's only 5,000 corporate jets in existence. You know, today, have 35,000.
Speaker 1:Wow.
Speaker 7:And so the industry was small. It wasn't stable. And so the charter company I was flying for came up for sale. Mhmm. And I called my dad at the time, and I said, dad, I think I wanna buy this charter company.
Speaker 7:It's cost $27,500. And he said, how are you gonna pay for it? And he's I said, well, they have 27,000 in the bank. So I'm thinking if I buy the stock, I'll just use the I'll just use the 27,000 and pay pay for the company. He goes, well, but I thought you said $27.05.
Speaker 7:Where are you getting the other $500? And I said, well, why do you think I called you? So yes, a let you know, leveraged finance exists today. It just has a lot more zeros to it. Yeah.
Speaker 7:But
Speaker 1:I so so when I heard that, it's a fantastic story. I'm just I'm I'm confused why a why a stock would be for sale so close to cash value. Were there a lot of liabilities that were coming down the pipe that you then you had to generate the revenue to deliver on? Like, it just sort of defies, like, basic economic logic.
Speaker 7:Alright. So we're gonna tell a story that's that's known to only a few. And the true story here is that in the early eighties, there was investment tax credit of 10%. And it came in cash. Okay.
Speaker 7:So you could buy a plane. At those times, a citation was a million dollars. You got a $100,000 tax credit. Mhmm. And Corporate Wings at the time was actually called J and J Aviation.
Speaker 2:Mhmm.
Speaker 7:And they had King Airs and two citations that were on investment tax credit, but they didn't exist. They they the the owner of this company, a guy named Jeff Tok, created a fraud around the existence of these planes.
Speaker 1:Oh.
Speaker 7:I was flying the King Airs. That was in another I mean, I didn't know anything about it. Yeah. But the dispatcher at that company, when the fraud became unveiled and everybody headed for the hills, the dispatcher of the company I was friends with, he said to me, I can't run a company because I'm a dispatcher. We need somebody that could fly, make the customers feel comfortable.
Speaker 7:So so the deal was there because the company was gonna the company was done.
Speaker 6:Yeah.
Speaker 7:And so that's how that that was why that that situation was unique. But it was few people know about the citation fraud.
Speaker 1:That's so
Speaker 7:that's really how it evolved. We changed the name from Yep. J and J to Corporate Wings, and that's how
Speaker 1:it began. So so a lot a lot of hair on the deal, but some decent customer relationships and probably some decent employees that could actually fly what assets remained after you sort of cleaned up the corporation. Right?
Speaker 7:So we had four airplanes. We had two King Airs, a Navajo and a Cessna four twenty one.
Speaker 1:Okay.
Speaker 7:Shortly thereafter, the King Airs got worried and they left. Yeah. So I I thought my business was a grand total of a Navajo and a Cessna four twenty one for for you old time pilots out there. But by the way, I I thought I died and went to heaven. Right?
Speaker 7:I mean, I had a business I had. Yeah. I'd go to the I'd go to the hangar on Saturdays and polish the nacelles of that Navajo. I was so proud of that airplane.
Speaker 1:That's amazing. So then talk about the scale up because obviously, you you you have a massive footprint in business now. But what were the key steps along the way? What were the key turning points for you?
Speaker 7:Well, I'd I'd say the key turning points were in the mid nineties
Speaker 6:Mhmm.
Speaker 7:When we you know, when Fractional was evolving and I had this nice charter company. Yeah. Maybe twenty, twenty five airplanes at the time, but saw Fractional starting to steal market share in a big way from Charter. Because a consistent level of service, the fact that they could run one way. In those days, charters were always out and back.
Speaker 7:You paid round trip for the aircraft.
Speaker 1:Mhmm.
Speaker 7:So I kinda saw the threat of fractional. Mhmm. And that's when I came up with the idea to form Flight Options. And Flight Options idea at that time, nobody had done fractional with used aircraft. They'd only done it with new aircraft.
Speaker 1:You
Speaker 7:had you had Citation shares with brand new citations. NetJets was working with Hawker and Citation at the time.
Speaker 2:And how would it work how would it work mechanically? There'd be basically a somebody would say, hey, I'm gonna buy this jet. I'm gonna cut it up into eight pieces or whatever. And then what did they effectively crowd fund it? Like, everybody Well had to come together at the same time?
Speaker 2:How did that actually work?
Speaker 7:You know, I'm I'm sorry, Jordy, but there there was no Internet at the time. So crowdfunding No.
Speaker 2:No. I don't. I I meant I meant like effect. Yeah. Yeah.
Speaker 2:Yeah. Throw a jet up on Kickstarter.
Speaker 7:No. But you you hit on the key issue. Yeah. You had to you couldn't start with one jet. Yeah.
Speaker 7:You had to have enough jets that people would buy a share because they could catch on very quickly. If four of us own a jet, you have to have at least four of them in case we'd all wanna fly at the same time. So you had to get to the point where you had a minimum number of aircraft. And in the in the in 1997, I was out trying to raise capital for just that. My idea was to start with 12 aircraft.
Speaker 7:They were gonna be used Citation two's and used and used hawkers. And and at the time, I wanted to I wanted I needed 12,000,000 of debt. And I went out to all the debt sources I could get. I had my great presentation on. I had my shirt and tie and blue suit.
Speaker 7:And I went to all these places and nobody would give I mean, in the end of the day, I think we raised, like, $102,000,000 dollars based upon, like, you know, having that much money in the bank. It was ridiculous. But this was in in '90 this was in late ninety seven. Then in 1998, Warren Buffett buys NetJets.
Speaker 2:Yeah.
Speaker 7:In June '98, he buys NetJets. And my proposal was literally on everybody's desk. Wow. And from June '98 till August '98, we came away with over $200,000,000 of financing. Woah.
Speaker 7:General Electric, Boeing Credit, Commercial Credit Corporation, Bombardier. And so all of that Yeah. Was it it that it was actually in some ways Warren Buffett that got me into the business. Cause he doesn't buy net jets. He christened the industry and allowed my proposal to have meat to it.
Speaker 7:So that was really we went live with flight options in November
Speaker 2:You need somebody to legitimize the industry and then people looked at your pitch and they were like, hey, this guy is a pilot. He's got all this operational experience. He knows how to work with customers. He's actually a solid bet in the category. Yeah.
Speaker 2:How much how much was what there was there was massive amount of wealth creation in the late nineties. Did that was how much of that just just in the in the kind of Internet boom? Did that play into into just like a lot of new demand coming in or or was that not a factor?
Speaker 7:Oh, unbelievably a factor. Because because we tended to be with the used aircraft, we had the same model. It's just the buy in was lower because a brand new Citation was 8,000,000, but a used one was 2.4. So we had the same model, just the buy in was lower. And so it became very entrepreneurial.
Speaker 7:It became Nuvo Riche were interested in it because they were conserving capital. I can remember there was a company called Internet Capital Group, and they they they were in the late nineties, and they had a they had a annual meeting in Philadelphia with and we sold 30 shares at that meeting because everybody was instantly wealthy there. And then, of course, you know what followed that. Right? The .com bomb came.
Speaker 7:And then in 2001, it it it just it it went away. Yeah. And So was
Speaker 1:that .com crash hard for your business? How did you get through it? I mean, with leverage, it feels like there's always a risk of just actually total capital collapse, total loss. How did you did you weather the various storms that you've faced throughout your career?
Speaker 7:I've been through four, and every one has been different.
Speaker 1:Okay.
Speaker 7:But that one that one because the industry was still in its infancy Mhmm. There were a lot of other there were a lot of there were you know, at one time there were 55 startups in this area. If you remember
Speaker 5:Yeah.
Speaker 7:United Airlines had a startup in the space at one time. So I weathered through it by finding a merger. Right? As as people were moving away and the business was shrinking, find somebody else in deep doo doo and then merge with them. Right?
Speaker 7:And then and then create a new story. Yeah. So that was really and in that case, it was Travelair, which was a division of Raytheon. Yeah. And that was the merger we did during to come out of the .com bomb.
Speaker 7:But yeah. You're right. I can remember, like, we came into it combined with 200 aircraft and came out of it with, like, a 120. Wow. I mean Wow.
Speaker 7:Yeah.
Speaker 1:Explain the dynamic of the buyout with Raytheon. It was a very interesting dynamic. I was not familiar with this particular process, but explain the the economic mechanics, how the bidding work, the results because I I I've never heard of that before and it's fascinating.
Speaker 7:Yeah. So it's a term called shareholders roulette. Yeah. And it's used often in a company where you have fifty fifty ownership. Mhmm.
Speaker 7:And what it simply says because normally, if a company has a buy sell agreement, and those buy sell agreements will say something like fair market value determined by three independent auditors. And if you if you're the seller in a pinch, you take a 15% discount. So it normally defines the process of value in the company. But when you have two fifty fifty owners, one person just simply goes to the other person and makes them an offer to buy and to sell at the exact same number. Mhmm.
Speaker 7:And then the other party chooses whether they wanna buy or sell at that number. So it forces you to a fair number.
Speaker 1:Yeah.
Speaker 7:And if you remember, Raytheon didn't wanna be in that business. They're making missiles.
Speaker 2:Yeah.
Speaker 7:So it never occurred to me that they would ever wanna own the business. But what I did was I got the business underwritten by a private equity firm, Ward Bupinkas. We underwrote the business at that time at 360,000,000. And I went to Lexington, Massachusetts with my $180,000,000 buy and sell offer to them thinking, look, they had a business that was going broke. Right?
Speaker 7:I gave them brought a 180,000,000. I thought, Raytheon's gonna erect a Ken Ricky statue in in Massachusetts. I brought them this 180,000,000. Right? And they thought I was cheating them.
Speaker 7:They thought it was too little and they bought me out.
Speaker 2:So Wait. And the business at that time you said was loo you said it was losing money? Or you're saying When we merged Yeah.
Speaker 7:When we merged, the their business was losing money. We were maybe making 6 or 8,000,000.
Speaker 6:Mhmm.
Speaker 7:And the combined, you know, the economies of putting them together, rightsizing the fleet, back office, we thought we had a projection for about $30,000,000. And just to show you how times are changed, so it was based on that $30,000,000 projection Yeah. That the multiple came out, and that's how we got to the valuation.
Speaker 1:That's still 12 x EBITDA forward number. There's a lot of risk there. That's crazy that they took the deal.
Speaker 7:It was you kidding me? Of course, it was crazy. I didn't
Speaker 1:get it. And you
Speaker 7:know what? It was the worst day of my life because I didn't I didn't wanna be out of the business.
Speaker 2:Well, yeah. So you you have to make this buy sell at $1.80.
Speaker 1:You're ready to buy them out.
Speaker 2:And you can't yeah.
Speaker 1:But you wind up getting bought out.
Speaker 2:But there's no there's no like walking it back. It's like it's over at that point.
Speaker 7:No. No. Deliver them two letters. One that says I will sell to you at a 180,000,000. One says that I will buy from you at a 180,000,000 and they pick one and sign it.
Speaker 7:That's crazy. And I and I
Speaker 2:was And, you wish you were like, I wish we did a duel, like a proper duel.
Speaker 1:It's remarkable. So so, I mean
Speaker 7:You know what? In some ways, absolutely turned out to be a blessing, but you never see that in real time. Right?
Speaker 1:Yeah.
Speaker 7:I can remember those days. I was like, I I felt like I'd lost my child. I mean, it really was. But but in reality, because I had raised money along the way, I only owned 16% of the combined of the entity. So what you know, my buyout, I got 16% of the one eighty.
Speaker 7:And then, we bought that company back from them in 2008.
Speaker 2:No way. No way.
Speaker 7:Okay. And we bought it back Wait.
Speaker 2:So that was like a five years you were waiting?
Speaker 7:It was yeah. Almost six. But but and by the way, I bought it in the in the in the middle of the two thousand eight financial crisis.
Speaker 1:Yeah.
Speaker 7:We bought it back for a 130,000,000. So, it we bought it back at 30¢ on the dollar.
Speaker 2:What did you do? What did you do in that in that in that window? You just twiddling your thumbs?
Speaker 7:Don't have I don't have that twiddle your thumb,
Speaker 1:Gene. Yeah.
Speaker 7:I I actually began a disastrous process, which which just leads me to much pain these days. I began to roll up the FBO industry. And I started by buying I partnered with a company called Allied Capital and we bought the Mercury Air Centers, which were primary in California. And we started that in o four and we sold that company to Macquarie, which was Atlantic Aviation. We sold that to them in 2007.
Speaker 7:And and so
Speaker 2:it's painful because you wish you hell on you wish do do you wish in in hindsight, you wish you you didn't sell?
Speaker 7:Well, what I was gonna say was that we bought we were buying them at six times, and we were one of the first transaction that traded at 15 times. Now, today, FBO industry is trading to private equity well north of 15 multiples. And what are they doing? They're raising the fuel prices to people like us to fund the acquisitions of what I started. So so, you know, it comes back to roost.
Speaker 1:Mhmm. You mentioned four key crisis moments, four financial crises that you've soldiered through. Dotcom, obviously, one of them. Housing, Great Recession, another. What were the other two?
Speaker 7:So in in the greatest interest rates, 84. When I remember doing proposals to buy an airplane at 21% interest rate, we had that huge interest rate issue in the early eighties.
Speaker 2:Did you have any did you have any like adjustable rate loans at that time? So or or everything prior to that was fixed and you were just having to work off of the the the twenty something?
Speaker 7:Well, it wasn't that I was had any debt really at that time. We were know, Corporate Wings was more of a management company. People to buy a new plane so that I could run it in charter and become the manager of it. So I had to make a proposal and they say, what's my cost of capital? And I would say, well, the going interest rates are 21%.
Speaker 7:So but so so that was tough on the industry. And then Gulf War one. In the early nineties, when we hit Gulf War one, the the the sale of new aircraft came to a standstill during that during that crisis. So I would tell you, high interest rates, Gulf War one dot com bomb financial crisis.
Speaker 1:How is the aviation industry doing today? I've we there were some folks asking about EV tolls, automation. There's there's tariffs and depreciation schedules are changing. It feels like a time of transformation, but I don't know if that's just what it looks like from the outside.
Speaker 7:Well, I think our industry the cool thing about aviation is we're always in transformation. We we live in an industry that always has something cool coming up. Yeah. So that that's fun. I I'll tell you that I don't wanna be a Debbie Downer on your program, but but we are in a time of abundance.
Speaker 7:And I think you can if you've only been in our industry for five years or eight years, you can come to think that this is normal. And we're living through a time where it's easy to see. Right? There's there are two economies. We can talk about the cost of bread.
Speaker 7:We can talk about the cost of gas. But fractional owners and private jet owners aren't living they don't live in that world. The wealth transfer that's going on doesn't live in that world. So we have this one world that's living in really good times because it's very in right now to be, you know, business and wealthy. Yep.
Speaker 7:And that is creating the what I think is an overabundance in our industry. I think this is extraordinary. In my forty years in this industry, this is one of one.
Speaker 1:Yeah.
Speaker 7:And I think we have to be careful not to be complacent about this being normal. Yeah. Because I I say, you know, this too shall pass. Yeah. But right now, that this is the world we live in.
Speaker 7:We live in this abundant world Yeah. In our industry.
Speaker 1:What about specific technologies that might change aviation? There's been a lot of talk about flying cars, a lot of talk about eVTOLs, not a lot of production process, not a lot of movement there. But do you have more insight into, some of the new technologies that might be coming out in the next decade?
Speaker 7:I think I think the new technologies I mean, I think the the number one thing we're gonna see is the how windows go away from airplanes.
Speaker 1:Oh.
Speaker 7:So today today, if you look at the supply chain Yeah. If you go back four three, four years ago, it was titanium. That that's been solved. The the problem in the supply chain today is windows. Really?
Speaker 7:If you ask Embraer, ask Micah Malfatano, ask them what is why are your deliveries slipping? They say it's the windows. I didn't know this, but 50% of aircraft windows fail on fail when installed. Woah. So so And that's
Speaker 2:like, and if you get a failure in the air, we have a we have a buddy who who had
Speaker 1:A lung collapse.
Speaker 2:A lung collapse.
Speaker 1:Because of a broken
Speaker 2:Because of a broken window. Yeah. And
Speaker 7:Yeah. That's a disaster. So I think the technology that's coming very fast, I don't know if you saw that Embraer announced the smart window in their Praetor 600. So they've taken out one of the windows in the aft part of the cabin. Mhmm.
Speaker 7:And they and instead of that, they put a digital screen. Yep. And you can make that screen just look outside because there's cameras outside. So if you wanna see if anybody's stealing your luggage, you could look out the window and see it. But the reality is in flight, you could make it day, you could make it night, you could watch a video, you could make it larger, you could make it smaller.
Speaker 7:So that is, I think, the start of what's coming next. We'll get to the point where we'll eliminate passenger windows in rapid form. If you're familiar with the auto aircraft, they're that that is in their development process without windows. And then it won't be long after that that we'll be rid of the cockpit windows Because, like you just said, high failure, expensive to maintain. So I think that's a technology that we could pretty much, you know, assure is coming quick.
Speaker 2:How do you evaluate new technologies? I'm sure anytime there's any type of new private aircraft manufacturer or eVTOL company, they're coming to you, they're pitching you, they want like some type of LOI even though they're not gonna deliver for you know, even five five, ten years. We've seen so many of these companies kind of come and go or have a good render or kind of like demo and then they never end up getting off the ground at all. So I feel like the tech industry, maybe it doesn't feel like this from your vantage point, but doesn't even get excited about a lot of these eVTOL projects anymore or at least insiders don't. But how
Speaker 7:I'm sorry. Let let me separate eVTOL because I think that's a different class
Speaker 2:Yeah.
Speaker 7:From innovations in aircraft and so on. First of all, I think it's my obligation for someone that loves aviation to invest a vested side and encourage people to come up with new technologies. So I will say I've invested in four clean sheet aircraft. I'm o for three with one with one that I still have development. So
Speaker 2:I I
Speaker 7:invested in
Speaker 2:the SuperSonic.
Speaker 1:SuperSonic. No way.
Speaker 7:I did that. Nice. I I was at the Aireon. I was an early early supporter of the Aireon product. Right?
Speaker 7:We're an early supporter of the auto aircraft. Yeah. So I think part of it is just our obligation is to encourage technology.
Speaker 1:Yeah.
Speaker 7:Okay? Some of it some of it is is is self serving because, you know, you do have a a a you know, a duopoly. I mean, you know, we we do have a polyopoly, I guess, in the in in the aircraft business. And right now, the main manufacturers control so much from the pricing of aircraft, the servicing of aircraft. So encouraging people to be entrepreneurial in the phase is something I feel obligated to do.
Speaker 7:Now, I said I haven't done very well at it, but we'll continue to try to encourage those technologies. I think eVTOL is something different. Yeah. EVTOL is is a totally different market. We we've been a supporter of beta.
Speaker 7:I was I did the SPAC at EVE. Mhmm. These are these are the these are the Wright brothers. This is this is early aviation and we're generations away from those aircraft being suitable for my for our businesses.
Speaker 1:Yeah.
Speaker 6:Yeah.
Speaker 7:That we're not gonna have flex jet fractionals. They're not they're not luxurious. They don't have the weight capabilities. You know, a lot of them don't even have no pressurization, no heating, no cooling. People will go, well, what do need heating for?
Speaker 7:That it's only gonna be six minutes. Well, okay. That's not we can do.
Speaker 5:Right. Yeah. Yeah.
Speaker 1:That's funny.
Speaker 2:But I
Speaker 1:think Yeah.
Speaker 7:Sure. But I but I think it's a great technology, and it's gonna happen.
Speaker 1:Yeah. Why do you think the Concorde failed?
Speaker 7:It's a great question because I love I think it was a wonderful aircraft.
Speaker 1:Yeah.
Speaker 7:What there were only 15 of them, So lack of adoption would be the number one reason. You it's hard to what 15 aircraft, they're you know, you can't keep parts in. You you know, it's just I think it was it's it's obviously, there's a financial reason. Now there were other, you know, environmental concerns at the time. Most of the environmental concerns aren't a challenge anymore.
Speaker 7:Most of the technology now can deal with that. So it's really I think we're just the we're we're like I think we're on the, I think had Aereon maybe started a year and a half later. They'd have played into this era of abundance that we're in, but they got caught in the before COVID.
Speaker 1:Sure.
Speaker 7:And so that that that kinda hurt them a little bit. I think if they've been a little bit later, I think the market's ripe. I think we're ready for this. We're ready for supersonic.
Speaker 1:Mhmm.
Speaker 2:What's the most number of hours that you've ever heard of an executive flying annually? You don't have to name the person, but but just the number number of hours.
Speaker 7:Six hundred?
Speaker 1:Six hundred hours in the
Speaker 2:Okay. That's quite a bit lower than than what the Financial Times was reporting on.
Speaker 7:Six hundred. But what did they say?
Speaker 2:Well, the Financial Times was reporting on I think Al I think Alex Karp. Think didn't didn't they have have like expecting him to be up in like the thousand something range. The And we were saying like it seems like this guy that is doing deals in Europe and Asia and America. Wow. You can imagine he's
Speaker 7:constantly in The headline was that There's only two thousand hours in a year. So, like, how are we gonna
Speaker 1:Well, this so Yeah.
Speaker 2:But the
Speaker 1:the headline was that that he spent $17,200,000 on flying, and they worked backwards to estimate that that was two thousand four hundred and fifty seven flight hours. But Wow. A lot of that is based on the plane. Obviously, if you're in a very expensive plane, $17,000,000 goes a lot
Speaker 3:less far.
Speaker 2:Could have been the the BBJ.
Speaker 1:Could have been the BBJ? Yeah. Anyway Now now, I I
Speaker 7:personally fly between around three hundred and fifty hours a year. Mhmm. Three fifty to four hundred. Yeah. And and and and, you know, but I'm doing a long I go long trips.
Speaker 7:I'm going I go back and forth to operations in Europe. Mhmm. So and I feel like that's a lot of hours. But
Speaker 2:How is how is Starlink how is Starlink impacting aviation overall? There's a lot of excitement from it rolling out on the commercial space. Most of the jet I'm sure all the jets that are that are in the sort of flex jet fleet have had great great Internet, you know, connectivity in general for quite a while. But what is the what is the ongoing impact?
Speaker 7:Well well, not to correct you, but that was not a true statement. Connectivity in corporate aviation has been a challenge for many years. In fact, I would tell you it was the Achilles heel because here you go buy the $70,000,000 jet and you get on it and you have one of the old technologies, you know, and and it it's a disaster. Like, how can I pay this kind of money and I don't have the Internet? Starlink has changed everything.
Speaker 7:I mean, Starlink like, even for me now, I used to never through my flights, if I had an eight hour flight, I'm leaving this weekend, I'll I can schedule anything in that flight. If you wanna do this podcast from the air, we can do it. Yeah. Because so you can just keep your schedule. And remember, works on the ground.
Speaker 7:The old technologies only worked in the air.
Speaker 2:Yeah.
Speaker 7:So now you had taxi, takeoff, you couldn't do a phone call, you couldn't
Speaker 2:disruptive. Mhmm.
Speaker 7:So disruptive. Yeah. No. This is it's it's it's changed a lot. In fact, we we we had for we we did the initial installations on on Musk's airplane.
Speaker 7:And because of that, we've got the initial STCs for all of Starlink. So our fleet's been in Starlink very early on. Mhmm. Their competitors are just starting to convert to it.
Speaker 1:Mhmm.
Speaker 2:Yeah. We how do how do some of these how do the the contracts work historically? Did did some of the old connectivity providers lock some fleets into really long term agreements? So now they have to make a decision, hey, do we continue paying for this plus Starlink? Because I wonder I we we've just been wondering, like, the how some how slowly some commercial airlines have reacted seems surprising just considering it's such an easy way to create a meaningful differentiation for passengers?
Speaker 7:Well, think you're dead on. Right? Money makes the blind see. So if you try to find the solution to what you're missing, it is the fact that they have those long term contracts. Now, I don't know I don't know enough about all the contracts.
Speaker 7:I know our contract. You know, our initial contract with Gogo allowed us to because we have so many planes, we could just add and take off planes at at will. And we have not yet done the Phenom fleet because there's a different antenna needed for the smaller fuselage. So we still do have, you know, about 80 airplanes that are on the Gogo system, but we'll we'll be converting those.
Speaker 1:That's great. Great. Well, thank you so much. This was lot of fun. Was a lot of I learned a lot.
Speaker 1:And hope to talk to you soon.
Speaker 7:Love what you guys are doing.
Speaker 1:Thanks so much. Enjoy what you guys
Speaker 6:are doing.
Speaker 7:Thank you so much.
Speaker 1:Have a good rest of day. Let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange.
Speaker 2:It's that easy.
Speaker 1:And we have Howard Marks in the restream waiting room from Oaktree Capital. Let's bring him in to the TV pin. Are doing? Welcome. Thank you so much for joining.
Speaker 1:I would love to kick it off with the high level on your theory of the market cycle. And then maybe we can walk into how you're thinking about markets today and over the last few years. But the the high level thesis on on the market cycle, how how do you explain your overall thesis?
Speaker 5:Sure. Well, thanks, Yuval. Thanks for having me on today. Of You know, I I've watched what you do, and it's terrific, and I'm glad to be part of it.
Speaker 1:Thank you.
Speaker 5:Thank you. You know, basically, a company or a market or an economy makes progress along what we call a trend line. Mhmm. And so the value that it creates should progress along that trend line. Mhmm.
Speaker 5:But the point is that while the progress there is pretty steady and gradual, Sometimes people get too excited and they overvalue that progress
Speaker 6:Mhmm.
Speaker 5:And and the market goes to an unsustainable high, and then something comes along that that makes that correct back toward the trend line, but given the way human nature works through it, to an unsustainable low. And then eventually, that's corrected back toward the trend line to a high. So the point is that that whereas the underlying thing progresses gradually Mhmm. The price fluctuates wildly around that trend line, and the main reason is the fluctuation of psychology.
Speaker 1:Yeah. Is how far back do you go when you think about market cycles? Does the same theory apply pre industrial revolution?
Speaker 5:Well, I'm you know, I'm old, but I'm not that old. And You didn't mean it like that. Know. I I wasn't there, but, yes, I think well, I think, you know, you know, one of the one of the most valuable operative quotations is from Mark Twain
Speaker 1:Yeah.
Speaker 5:Who supposedly said that history does not repeat, but it does rhyme.
Speaker 1:Yeah.
Speaker 5:So the the things that rhyme Mhmm. Are the elements of human nature Mhmm. That cause these excessive fluctuations around what what what I'll call intrinsic value or reality. Sure. So, you know, the desire to get rich quick
Speaker 1:Yeah.
Speaker 5:Envy Yeah. Of seeing others get rich quick Mhmm. The belief that it's possible to get rich quick Mhmm. The fear of missing out Mhmm. The fact that people get more excited the higher the price goes Mhmm.
Speaker 5:Which should be worrisome. So these things, I think, have always been in place. Mhmm. And you read about bubbles that took place. Let's see.
Speaker 5:The tulip bubble, I think, was 1620. The South Sea bubble was 1720. And so these these excesses, these human failings, have always been part of what what goes on. Mhmm.
Speaker 2:But this time is different. I'm kidding. How do do you think a lot of the guests on our show have maybe been through the the COVID kind of brief correction and chaos of ZERP, but don't have much else to go off of. That can kind of be an advantage because you could just be so optimistic that even if something, you know, bad, you know, you do get a big correction, maybe you get a fast rebound.
Speaker 1:Yeah.
Speaker 2:Has being through a number of these cycles ever hurt your performance because you just weren't opt like, optimistic enough or, you know, this this idea that, you know, optimists make money and, you know, pessimists sound smart?
Speaker 5:Well, you know, my firm, Oaktree Capital Management, first of all, doesn't invest for the most part in the stock market. We're mostly investors in what's called credit or debt. Yeah. But I I think that we are what's called contrarians. I think we're my partner Bruce Karsh and I are essentially innately contrarian, which is to say that we are most comfortable doing the opposite of what the herd is doing at the extreme because we see its error.
Speaker 5:Mhmm. And so I think we've always done that naturally. And so we are I think we're conservative by nature. And I always say, by the way, in 1978, Citibank asked me to go to the bond department and start a high yield bond fund, convertible bond fund, and and and and it worked great because being a lender requires conservatism. If they would have said, I want you to start a venture capital fund and and predict when Amazon is gonna be created, I would have been a disaster.
Speaker 5:I'm not a futurist. I'm not an optimist, etcetera.
Speaker 1:But
Speaker 5:when I have seen excessive pessimism and excessive gloom causing crashes, and I've seen a few, I it has been it has come kind of naturally to to go against that excess. And so I think one of the ironically, one of the things we've done best for conservative people is seize the opportunity at the lows. Mhmm. Again, by being contrarian, and, you know, I wrote a memo in October '8 after the global financial after the bankruptcy of Lehman with the title, The Limits to Negativism. And there is such a thing as being too negative.
Speaker 1:Mhmm. Do you think contrarianism, like you just described, is purely innate, or can it be learned? Is it a muscle that you can build over a career? Is it something that folks in everyday life who maybe aren't professional investors but might benefit from not getting overheated and falling in with the herd can learn? And if so, how?
Speaker 5:I think you can learn these things. You know, I wrote a book called Mastering the Market Cycle. I'm not really trying to plug the book, but it wouldn't hurt. Love it. But but, you know, and it all talks about how to how to how to deal with the cycle.
Speaker 5:Yeah. And what I think is, I get all these questions, can you learn this? Can you learn that? Can you learn this? Can you can you learn to be unemotional?
Speaker 5:Can you learn to be what I call a second level thinker? Can you learn to be a contrarian? Yeah. The answer is I can tell you why it's important. Mhmm.
Speaker 5:I can explain to you why it's essential. Is it something you can ingest? I don't
Speaker 6:know. Mhmm.
Speaker 5:You know? I, for some reason or another, come by it naturally. Mhmm. It's easy for me, relatively. By the way, I don't wanna give the impression that when I make these calls at at the at the highs or the lows, that I do it without some trepidation.
Speaker 5:Mhmm. I'm never sure. Mhmm. Anybody who's sure is an idiot. You know, they say there are two kinds of people who lose a lot of money, the people who not know nothing and the people who know everything.
Speaker 5:So So I I'm I'm not trying to imply that it's easy. Yeah. But it does come fairly naturally to me through the combination of my emotional makeup and and the application of logic. Yeah. If somebody else doesn't have my emotional makeup, they could learn the logic.
Speaker 5:Maybe they could learn to do it. Mhmm. It might not come so easy. That's all I can say.
Speaker 1:How do you think about the concept of black swan events or the integration of black swan events into a market cycle. Because going into COVID, I was looking at the health, the fundamental health of the American consumer, the fundamental health of the economy. Everything looked very strong. And I think that's why the economy rebounded as quickly as it did and then sort of overheated. But how do you need to put black swans out of your mind?
Speaker 1:Are black swans even a real thing? Like, how do you think about that concept?
Speaker 5:They're a real thing. I don't think you can do anything about them.
Speaker 1:Yeah.
Speaker 5:My term, the term I've always used for what Taleb calls a black swan
Speaker 1:Mhmm.
Speaker 5:Is an improbable disaster. Mhmm. And by the way, they're not all disasters. They're improbable bonanzas too. Yeah.
Speaker 5:But but but I mean, if you just think about the improbable disaster Mhmm. It is something where if it happened, it would be disastrous, but it's very improbable. Mhmm. What do you do about it? And in in my in my opinion, you can't do anything about it.
Speaker 5:If you say, well, I'm concerned that there could be, you know, an eight hurricane earthquake. I'm concerned that there could be four hurricanes in a row. I'm concerned that there could be nuclear war, and I'm concerned that there could be inflation at 20%. Mhmm. Well, you can protect yourself against that.
Speaker 5:You can call that guy who lives in in Omaha. He'll write you an insurance policy to protect you against all of those things. You just won't like the premium. And if you take out that insurance policy and you pay that high premium and you're protected, in the vast, vast majority of years, it's not gonna happen. And after a little while, you'll get tired of paying those premiums and you'll stop, probably in time for it to happen.
Speaker 5:Yeah. So so so you you really can't. And the things that are in the way, way distant tails of the probability distribution are just things you have to live with. That's that's real life.
Speaker 1:Mhmm. How do you think about the education that goes into becoming an investor and how that's changing? It feels like it's easier to learn without mentors because everything's been compacted into AI and open sourced on the Internet and you can watch great lectures and podcast interviews. What's changed and what's the same?
Speaker 5:Well, my perception is that AI number one, AI has a mentor. Mhmm. It reads everything that ever happened. Yeah. And ingests it and remembers it and can find it.
Speaker 5:Mhmm. And then AI becomes a mentor. Mhmm. And and and it it it tells you, you know, how to think. It gives you examples of thought processes.
Speaker 1:Mhmm.
Speaker 5:So so I think it just makes it so much easier to learn, you know. And I wrote a memo in December. I write memos to my clients. October was the thirty fifth anniversary. Yeah.
Speaker 5:And I talked about AI in a memo December 9. And then I have a son named Andrew. He's in he's in the tech world. He's a he's a terrific venture capitalist. He's cofounder of of a a group called TQ Ventures.
Speaker 2:Mhmm.
Speaker 5:And and and given the recent events, he pushed me to revisit that memo and update it. Mhmm. And he had this great idea. He said, why don't you why don't you ask Claude to tell you about what's been happening? And so he and I developed a a request which we input inputted to to to Claude.
Speaker 5:His help was invaluable, but, of course, he does this all day
Speaker 7:Mhmm.
Speaker 5:With all of his brilliant founders. And and so Claude wrote me a tutorial which enabled me to to update the memo. And I I learned an incredible amount, you know, from in a field that is not native to me Yeah. Through doing that. And so it it was a mentor to me.
Speaker 5:Mhmm. And it can be a mentor to others. But as we know, you have to ask it the right questions.
Speaker 1:Yeah.
Speaker 5:And Andrew and his his buddies helped me do that.
Speaker 1:Yeah. How how has technology changed the credit markets or just investing in in credit over your career? I I can imagine computerization, the Internet. There's there's sort of a continuum of advances that just help information flow more freely. AI feels like just an extension of that.
Speaker 1:But how has, like, the actual work changed over your career?
Speaker 5:Right now, AI is helping us marshal data Mhmm. With a with a thoroughness and a speed and a and an error freeness that we never had before. I don't think it has changed the process because it what you see, it all comes down in the end to looking at a company and assessing the probability that it'll pay its debts. Mhmm. And I don't, you know, I don't I think we're still better at doing that than than AI is.
Speaker 5:Mhmm. Oh, by the way, I should tell you that an hour or two ago, we put I put out a new memo updating the December memo, and you probably haven't seen I may make reference to it. Please. But but pardon me?
Speaker 2:No. I was saying we we do have it pulled up. Yes. Oh, But but for the audience.
Speaker 5:Okay. Great. So so, you know, it says in there, and and I asked Claude, and Claude said, look, the truth of the matter is that the thing that AI is the weakest at is doing analyses on brand new things where there aren't established patterns. And and and so and I think that that's a lot of what we do. Mhmm.
Speaker 5:You know? And so, you know, at the present time, I think that I think AI can can marshal the data, organize the logic, frame the question. I don't think it's the top of the heap in answering the question yet. Of course, I can always be wrong. But, you know, and I say in the memo that I think that what AI does is is predicts.
Speaker 5:Based on past patterns, it predicts what kind of companies will pay their debts and whether a given company will pay its debts. Mhmm. And it puts forth a hypothesis with re in with regard to an individual situation, and and and it tells you you should or shouldn't invest. Mhmm. I think, as I as I understand the status of things today, you need people to check the hypotheses.
Speaker 1:Yeah.
Speaker 5:You know? I don't think I would make an investment commitment based on the hypothesis alone. I would wanna check it. But I think it gives you a great starting point and and by the way, so I wrote the memo, I said to Andrew, do you wanna look at it? He says, why why send it to me?
Speaker 5:Why don't you send it to Claude? Ask Claude to take a look at the memo. So I did, and I was I was absolutely and if you read the memo, I was absolutely dumbstruck
Speaker 1:Yeah.
Speaker 5:By what what what I got back.
Speaker 1:Yeah.
Speaker 5:Because it responded to me in I said it it it responded to me, it felt like a a note from a colleague or a friend. Mhmm. It was personal, it was warm, it drew analogies to my thirty five years of memos, it it talked about some some of my, some of the people I respect. It injected humor. Mhmm.
Speaker 5:It was it was complimentary. It's, you know, it said it it it talked about a section that it thought was really good. So I wrote to Andrew. I said, is is AI is clawed in ASKISR? Because I thought it was maybe unduly complimentary.
Speaker 5:He said, well well, dad, ask it ask it to be hypercritical.
Speaker 6:Mhmm.
Speaker 5:So I wrote back. I made a few corrections. I I said, now, would you please be hypercritical? So it writes me back and it says, do you want me to be hypercritical or hypocritical? It's making a joke.
Speaker 10:You
Speaker 5:know? And and so, you know, I think that it's gonna change our world.
Speaker 1:Yeah.
Speaker 5:I think I think that, you know, we we have an activity in our investment world called indexation
Speaker 6:Mhmm.
Speaker 5:Where rather than pick stocks, a lot of people who invest in the stock market now instead just invest in a vehicle that emulates the S and P 500 or some other index. And indexation has put a lot of people out of business because a lot of people used to, a, do an inferior job Mhmm. Underperform the S and P, and then, b, charge highly for their services. Mhmm. There's something wrong with that.
Speaker 1:Yeah.
Speaker 5:And a lot of those people are out of the business now, and and the the majority of equity mutual fund money is managed through indexation or passive.
Speaker 1:Mhmm.
Speaker 5:I think AI will advance that. It what it does is it it it just raises the bar and weeds out the people who don't add value. Mhmm. I don't think I don't think it'll replace the best. Mhmm.
Speaker 5:But it'll replace a lot.
Speaker 2:Mhmm. How how are you personally comparing the the AI build out and the advancements in the various models and stuff happening at the application layer all the way down to the hardware layer to the Internet build out. There's so many different comps from investor psychology to overall consumer psychology. We were talking earlier this week on the show about the battle of Seattle and the protests around the the the Internet build out and the fear that people had around jobs getting outsourced, going overseas, as well as just disintermediation. It feels like so many of the radical predictions that people made about the Internet are still being made about AI.
Speaker 2:Some of them came true with the Internet, but they they came true over a decade or two. And in some ways now, it feels like AI really is just a continuation of many of the same trends that the Internet brought along. But some of the predictions are even wilder this time around.
Speaker 5:Well, I think that first of all, I am in that debate, I'm on the side of the warriors vis a vis society. I I by the way, remember I said ten minutes ago, I'm not that much of an optimist. Yeah. So I can imagine the jobs eliminated, and I am not imaginative enough to to think of all the jobs that will be newly created. So I see a net decline in jobs, and and I and I do worry about that.
Speaker 5:AI is similar to the technological bubbles that I've seen, and and the technological bubbles probably go back all all the way to the railroads, you know, a hundred and forty years ago. But the power of AI relative to the predecessor technologies, I think, is vastly higher. The speed of innovation is vastly faster. I think innovation I think if you look at the Claude and all the coding models and the way they've progressed and the way and the way Anthropix revenues have progressed, I think you have to say that this is faster than anything we've ever seen before.
Speaker 2:And I think it's faster than Because you have the distribution that was laid starting Oh, right. Over twenty years ago.
Speaker 5:But but I think I think the I think that the speed at which AI can innovate is faster than the speed at which society can adjust. Mhmm. So you might say it'll catch up, but I think you could I think at minimum, you're talking about a significant period of dislocation. How The other thing the other thing that we haven't touched on, but is is is the biggest difference between AI and everything else we've ever seen, is the autonomy. And all the other technologies, starting with the railroad up through the Internet, were, I would call, labor saving devices.
Speaker 5:We had a job to do, and the new technology did it better, faster, cheaper. AI, it's it's different. It's not just gonna do the job we used to do. It's gonna design new jobs. Mhmm.
Speaker 5:It's gonna assign new jobs. It's gonna take on work we haven't asked it to take on. It's gonna take on work we didn't think it could do. And it and and it's gonna operate at some point in time without instruction. In the memo, I talk about the fact that CHAT GPT brought out a new model earlier this month.
Speaker 5:And in the write up for the for the model, they said, basically, in English, AI the model helped us design the model.
Speaker 1:Yeah.
Speaker 5:There's never been anything analogous to that before. So when I think about the this extreme level of competence, speed, etcetera, I I think of dislocation. Mhmm. For people. And, you know, there there are people who say, and I referenced in the memo, there are people who say, oh, I have great news.
Speaker 5:People aren't gonna have to work. To me, that's terrible news. You know, I think we get a great deal from our work other than a paycheck.
Speaker 2:Yep.
Speaker 5:And and how are those elements of life gonna be replaced?
Speaker 2:It's a wild time.
Speaker 1:Figuring out. Are you feeling about The United States relative to other countries, the rest of the world? There's a lot of uncertainty generally, politically, at the same time America seems to have a lead in the AI race. How are you feeling about just America broadly?
Speaker 5:Well, I don't I don't know enough about the technology to know where we stand in the race or or what it's gonna take to win the race or anything like that. But I think, you know, and and and there was the the big news recently was that anthropic is going to, I don't even know the right terminology, but, let's say, be less reticent
Speaker 1:Mhmm.
Speaker 5:In certain areas Yeah. To to apply technology.
Speaker 1:Yeah.
Speaker 5:Be because in America and in a lot of developed countries, we have these things called scruples. Scruples. Oh, no. You know, I'm not gonna do that. You know, that oh, yeah.
Speaker 5:Well, yes. You could do that, but I'm not gonna do that. This is an arms race.
Speaker 6:Mhmm.
Speaker 5:And, you know, we're America has never had a serious rival before. Mhmm. Never had a serious rival. We thought Russia was a serious rival. We were wrong.
Speaker 5:It it was never really a threat other than militarily or or, you know, atomically. But we've never had an economic rival before. Now we have an economic we have a rival in many dimensions, and of course, it's China. Mhmm. And and I think that AI will be at the core of that of that rivalry.
Speaker 5:And, know, if if we slow down because of our scruples
Speaker 1:Mhmm.
Speaker 5:And they carry on pell mell, I think that'll help them win. And if they get control of AI, if they have highly superior AI, I think that could be one of the things that makes life tough for us. Mhmm. So and and by the way, I I consider myself as having scruples. Yeah.
Speaker 5:But I I worry about what this implies. And by the way, if you wanna think about scruples, think about this. One of the areas in which we're we have a problem, which is not highly talked about or acknowledged, is rare earths. And rare earths are ubiquitous in many areas of technology, and we're dependent on China for them. So here's a question for you two young guys.
Speaker 5:Before China developed its primacy in rare earths Mhmm. Who had primacy?
Speaker 1:Did wasn't it America?
Speaker 2:I think we did, we decided it was dirty and and it was worth shipping overseas before
Speaker 5:Bingo. Yeah. A 100 you get a 100 points for that answer.
Speaker 1:Let's go. Thank you.
Speaker 5:It was us. And as I understand it as I understand it, most of the rare earths came out of one mine in California. And my guess is some ecologists concluded Yeah. That, as you say, that it was dirty.
Speaker 3:Yep.
Speaker 5:And so we maybe we shouldn't do it.
Speaker 2:Yeah.
Speaker 5:And then guess what? And guess what China said?
Speaker 1:We'll do it.
Speaker 5:We'll do it. Yeah. And we'll do it cheaper.
Speaker 1:Oh, yeah.
Speaker 5:And so they got all the business.
Speaker 2:Yeah.
Speaker 5:And that's how you create a dependency.
Speaker 1:Yeah. And there's a big question about how does the dirt over there just come right over here? Like, potentially. You know? Think it's possible that it's all one atmosphere.
Speaker 5:But look at what happened with energy in Europe.
Speaker 1:Yeah. Oh, yeah.
Speaker 5:Germany had a bunch of nuclear reactors.
Speaker 6:Crazy.
Speaker 5:And then and then they said, well, we don't really want like having nuclear reactors because of it's not ecological. And Russia said, oh, we'll do it for you.
Speaker 1:Yeah.
Speaker 5:They'll supply your energy. Yeah. And you dependent you you develop a dependence. Yeah. So the point is, what you had in both cases is you had decisions made on purely economic terms
Speaker 1:Yeah.
Speaker 5:In areas that probably should have included some strategic decision making. Yeah. Geopolitical strategy. Yeah. But but it was all ceded to the economists and the ecologists.
Speaker 1:Yeah.
Speaker 5:Hard decisions. These are hard decisions.
Speaker 1:They are. Can I completely switch gears and ask you sort of a personal finance question? Of course. I've heard this rule of thumb that the allocation between stocks and bonds should be tied to your age. If you're 50 years old, you should be fifty fifty.
Speaker 1:If you're 25 years old, you should be 25% in bonds. But recently, the bond markets and the stock markets have been more correlated than decorrelated. And I'm wondering how you think the average person should think about the equity markets versus the debt markets.
Speaker 5:First of all, there are no numbers that hold true for everybody. Yeah. So any any rules of thumb that have numbers in them, you have to throw out.
Speaker 2:The only rule of thumb is no rules of thumb.
Speaker 5:So, like, who who was it? Who somebody once said that every generalization is flawed, including this one.
Speaker 1:Yes.
Speaker 5:Right? That's great. So so the point is that stocks and bonds Yeah. Have different qualities.
Speaker 4:Sure.
Speaker 5:Existential qualities. And people should understand what the difference is.
Speaker 1:Mhmm.
Speaker 5:And it's not the difference is not merely that one is called stocks and one is called bonds. You have to understand the difference.
Speaker 6:Mhmm.
Speaker 5:And then you have to figure out for yourself what the right, I would say, risk posture is.
Speaker 1:Mhmm.
Speaker 5:And and each person and each company and each insurance company, each sovereign wealth fund, each investor should figure out their normal appropriate risk posture based on age, wealth, income, sufficiency of age of wealth and income, aspiration, number of dependence, and intestinal fortitude. Mhmm. The ability to live with fluctuations. Mhmm. And it's different for everybody.
Speaker 5:Mhmm. So, you know, that rule of thumb generalization hints at a direction, which is to say maybe younger people whose lives lie ahead should take on more uncertain paths which have a higher trajectory but more uncertainty, and older people who are approaching retirement should have a less uncertain path and more dependability. Makes perks perks sense. The number using something like your age as the answer is silly. Yeah.
Speaker 5:But I think everybody has to think about those things, and it and it's not easy to come up with the answers, but you better do it because it's damn important.
Speaker 2:Yeah. Last question for me and sorry to jump around a little bit, but I'm curious. Were you ever deeply pessimistic about the Internet about what the Internet's impact would be on society in the way that you are around AI and potential labor displacement? Because certainly That's
Speaker 5:great question.
Speaker 2:Mhmm. Because because you could have pessimism about, hey, we got a lot of fiber in the ground that's
Speaker 5:Yeah.
Speaker 2:Not actually being used, that we're we're headed off a cliff here. That's kind of like, maybe more like economic pessimism, but societal pessimism. I'm I'm curious.
Speaker 5:You know, I think the honest answer is that I never was I never knew enough about the Internet
Speaker 1:Mhmm.
Speaker 5:To reach that point of pessimism.
Speaker 2:Because you didn't have the Internet. You didn't have
Speaker 5:Well, I also You didn't have LLMs. I didn't have my son kicking me in the butt, me do the research. I mean, he has really pushed me. He said, dad, you have to know this stuff. Yeah.
Speaker 5:And he does it all day. Yeah. And and so I I think I know much more about AI than I ever did about the Internet. Mhmm. And and so so the answer is I never did reach that level of pessimism with regard to the Internet.
Speaker 6:Mhmm.
Speaker 1:What's the what's the fundraising cycle like for Oaktree Capital? How do you how often do you raise funds? What's the latest fund?
Speaker 5:Well, that's an interesting question. I mean, we have a lot of different kinds of funds. We have some which are very plain vanilla and and produce a steady return fairly dependably. Higher we don't do anything in what's called high grade bonds or investment grade. Yeah.
Speaker 5:Everything we do is is non investment grade, so we don't, you know, we don't do a gilt edge. Mhmm. But so nothing we do is a 100% dependable. But but and so we we have some that are mundane and modest return moderate return. And then we have some that are highly aspirational
Speaker 1:Mhmm.
Speaker 5:And and and often tied to the cycle. I think it's fair to say we're the world's leading investor in distressed debt.
Speaker 6:Mhmm.
Speaker 5:And so sometimes when there's a lot of distress, there's a lot for us to do. We have the ability to invest a lot of money and historically have high returns. Mhmm. When when everything is placid, there's not much to do in distressed land, so we have to kind of go into remission. Mhmm.
Speaker 5:And we don't raise much money in those funds, and we we raise small funds with which we can do very selective things, and and make do with a modest supply. Mhmm. So it's a lot of our fundraising is tied to that. The other thing is, we're warriors When in good times, most people plunge ahead Mhmm. We tend to pull back because we get worried because they're too damn optimistic.
Speaker 5:You know, Buffet says Buffet says the the less prudence with which others conduct their affairs, the greater the prudence with which you must conduct your own affairs. Yeah. Or he says, we, we must conduct.
Speaker 1:Yeah.
Speaker 5:And and and I I believe that. So when everybody is is unafraid Mhmm. I get terrified Mhmm. Because they do nutty things Mhmm. That put us all in jeopardy.
Speaker 1:Yeah.
Speaker 5:The scariest thing in the world, the riskiest thing in the world is the belief there's no risk.
Speaker 1:Yeah.
Speaker 5:And when people believe there's no risk, the world gets crazy. There's an old saying in the banking business, which is where I started my career, that the worst of loans are made in the best of times for this reason. Mhmm. So that that really defines our cycle. When everybody else is having a ball, making money, hand over fist, doesn't see anything to worry about, You know, we kinda go into a cocoon because that's, to us, that's scary and it hints at very few opportunities.
Speaker 5:Mhmm. When everybody else is terrified and and wouldn't touch risk with a 10 foot pole, and as a consequence, you get highly paid for taking risk, that's when we turn aggressive.
Speaker 2:Mhmm. Which I don't know how much you you if you read or or talked with Andrew about Sattrini's Sunday memo, the twenty twenty eight global intelligence crisis, Yeah. Citadel responded to by basically saying, we have an intelligence crisis right now with everyone's reaction to this piece. But did you ever have a memo that had wild that that created really wild near term price action, or in the way that that the Sattrini piece did, or or with the way that information moved historically, did did that kind of
Speaker 5:No. I I look, that he he used a device of I mean, he even said, this is not a prediction.
Speaker 2:Mhmm.
Speaker 5:This is an extreme case to illustrate. Mhmm. I've never I've never felt that it was attractive to do that. Mhmm. You know, I try to I try to live in in the in the middle of the probability distribution
Speaker 1:Mhmm.
Speaker 5:And and understand what's going on in the middle of the probability distribution rather than again, I I think maybe you would say that Sattrini's case was a black swan.
Speaker 6:Yeah. That's a good point.
Speaker 5:And and and and I don't I don't traffic with black swans.
Speaker 1:Well
Speaker 2:Yeah. It is interesting. It's it kind of needed to come from a substack that gives the kind of appearance of being Mhmm. If you're just reading it for the first time, it gives these kind of appearance of sophistication Mhmm. Sure.
Speaker 2:But doesn't come with having run, you know, tens of billions of dollars of Yeah. Of of assets.
Speaker 1:Well, thank you so much for taking the time to come chat with us.
Speaker 2:Yeah. Really enjoyed it.
Speaker 1:Really enjoyable conversation.
Speaker 5:Well, as I said, I think you guys are doing a great job, and and it's really a pleasure to be part
Speaker 1:of it. Yes. We've loved having you. Hopefully, we can do it again soon. Yeah.
Speaker 2:Tell tell Andrew he's welcome.
Speaker 1:Let's plug the book. Like, go buy the book. And it's it's available where all books are sold. I'm sure that there's a audio version as well.
Speaker 5:Exactly. Thank you so much.
Speaker 2:Okay. Cheers, Mark.
Speaker 1:Bye. Let me tell you about Vanta. Automate compliance and security, Vanta is the leading AI trust management platform. And let me tell you about Labelbox, RL environments, voice robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams.
Speaker 1:And without further ado, we will kick off our Lambda Lightning round. I'm getting it, Ben. We got new graphics. New graphics. Lambda Lightning round has been We have Denny Guo from Geeko.
Speaker 1:She's the cofounder and CEO. Welcome back to the show. How are you doing? Thank you so much for coming back on the show.
Speaker 2:We're fired up.
Speaker 1:Tell us about AI selves. Tell us about the latest launch. What did you launch today?
Speaker 10:Yeah. For sure. So we all have the same problem. You know, there's only one of us. Mhmm.
Speaker 10:Your mom needs, you know, help with her computer. Your your partner sometimes wants, you know, more time, especially for a founder. Mhmm. Your friends want to hang out. You know, you're founder.
Speaker 10:You're still busy that maybe you're missing out like, the group chat group trip planning. But, you're in a meeting, you're on slides, you're asleep. Mhmm. So then we could raise this question, like, what if there's a second you? Mhmm.
Speaker 10:We build something, you know, new, which is called AI style, where you can get first to it, you can raise it, and it will grow with you, you know, you both
Speaker 2:Yeah.
Speaker 10:And it becomes a living extension of you.
Speaker 1:Is what you and John Bomer were just talking about two hours earlier in the show. You're like, John and Jordy are gonna talk to each other and get stuff done. Is this purely for entertainment, or do you actually see a a business sort of use case where, someone with a great marketing mind will create an AI self, then, I would be able to go to them and bounce them, Super Bowl ad campaign off of them. How do you see the user actually interacting with this?
Speaker 10:Yeah. For sure. I think there are many ways you could do it. Mhmm. First, like, it definitely it's it's you, but it's always like you mentioned, it's like infinite availability.
Speaker 10:Right?
Speaker 2:So twenty
Speaker 10:four seven, available, always on, and can be everywhere. Mhmm. So, you know, your family mom people who love you will be able to have more access to you, so your mom will be able to, like, talk to your AI self and help her to debug IT problems. But like you mentioned, it's same for, you know, people who are have great expertise. Right?
Speaker 10:So, like, if you're a really genius marketing person, maybe, like, other people can talk to her to gain more marketing knowledge and she can monetize off it. And and it's because it's AI, so it can do all those like, it's like, it breaks all the human limits. Right? So it can be very capable, for example, like I mentioned, like, it can your marketing taste, but it also can do everything, like, 10 times faster.
Speaker 2:How do you how do you get enough data for an individual to make it an accurate representation of the individual? We've we've talked about this because we put out three hours a day of content of ourselves talking, hanging out. But most most people don't have
Speaker 1:We're going twenty four seven with this. Let the AI selves host the rest of the other twenty one hours a day.
Speaker 10:Yeah. For sure. Like, yeah. The whole thing is ensure you guys can use your AI self to directly do this.
Speaker 2:Is it.
Speaker 10:So, yeah. But, to answer your question about how do we get data to have an accurate representation of you, I would say there are, like, three three angles. Like, first is, it it could import more data of you. So, for example, like, import all the CBM we show in the past. Mhmm.
Speaker 10:So you can learn from that. But also, like, when you're using AI self, you can there's this constant process. Like, you're correcting and guiding it. Right? So while you're using using her, you know, to or him to, like, generate marketing assets for you, she he will also learn the marketing pace you have.
Speaker 10:So that while you're using her for, like, you know, short term productive productive word, you know, she will also learn the taste, basically. And the last angle is that the identity also really matters here because, for example, like, your mom might not care how it's a a 100% accurate
Speaker 2:Mhmm.
Speaker 10:About, like, everything is accurate about you. But as long as you're AI, she will be interested because otherwise, she could not find you. Right? So yeah.
Speaker 1:Well, thank you so much for coming on. Unfortunately, I have some breaking news, so I need to cut this interview short, but we'll love to have you back on the show soon. So have a great rest of the day.
Speaker 2:On the launch.
Speaker 1:And congratulations on the launch. We'll talk to you soon. Cheers. Goodbye. And the breaking news is that Warner Brothers says Paramount's new offer is superior.
Speaker 1:Netflix now has four days to respond. The Kulsi market is continuing to diverge. When we started tracking this, Netflix was up at 50%, Paramount at 40% now. Paramount is starting to run away with it. They're at 62%, and Netflix is down at 33.
Speaker 1:Will they sweeten their offer? We don't know, but Netflix has four days to respond.
Speaker 2:More breaking news. More breaking news. What else? Square is cutting from 10,000 to 6,000 employees, a 40% reduction. Let's head over to Jack.
Speaker 2:He says, we're making blocks smaller today. Here's my note to the company. Today, we're making and I wanted to ask Howard about this because it feels like so much of I I'm curious to see what Jack says around the reasoning. But this I've been shocked that more Mhmm. CEOs, when their stocks are are down and beat up, aren't looking at what happened with x and saying Yeah.
Speaker 2:We can there's a huge expense
Speaker 1:Yeah.
Speaker 2:Right. That we have here
Speaker 1:Yeah.
Speaker 2:Payroll. And, anyway, so he says, today, we're making one of the hardest decisions in the history of our company. Mhmm. We're reducing our organization by nearly half from over 10,000 people to just under 6,000.
Speaker 1:Mhmm.
Speaker 2:That means 4,000 of you are being asked to leave or entering into consultation. I'll be straight about what's happening. First off, if you're one of the people affected, you'll receive your salary for twenty weeks plus one week per year of tenure, equity vested through the May, six months of health care, corporate devices, and five thousand to put toward whatever you need to help in this transition. That is, generous. We're not making this decision because we're in trouble.
Speaker 2:Our business is strong. Gross profit continues to grow. We continue to serve more customers, and profitability is improving, but something has changed. We're already seeing that intelligence tools we're creating and using paired with smaller and flatter teams are enabling a new way of working, fundamentally changes what it means to build and run a company, and that's accelerating rapidly. I had two options cut gradually over months or years as this shift plays out or be honest about where we are and act on it now.
Speaker 2:I choose the latter. Repeated rounds of cuts are destructive to morale, to focus, and to trust that customers and shareholders place in our ability to lead. And I won't read the whole thing, but this feels a little bit more real.
Speaker 1:Like, they're like, what's the training was sort of predicting a little bit. Yeah.
Speaker 2:Yeah. And it feels more real than some of these other cuts where they do like a 88% Yeah. Rift. This is a big we're getting Yeah. But going down by nearly half.
Speaker 1:Also, I mean, Block has been mostly spared the SaaS apocalypse. I mean, the the over the last one month, the stock's down 17%. Over the last six months, it's down 30%. It's not it's not, you know, down fifty, sixty
Speaker 2:Yeah. But still, it's trading at, like, one like like, somewhere around It's way off
Speaker 11:peak.
Speaker 1:The the the peak stock price was $263. Now it's at 54. And so there's certainly a question about how they build back. Well, let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and medium sized businesses. And without further ado, let's continue our lightning round and bring in Yash Patel from Applied Compute.
Speaker 1:How are doing?
Speaker 2:What's going on? Good.
Speaker 1:How are you? Good to see you again.
Speaker 2:Good to see you.
Speaker 1:Since this is the first time on the show, long overdue, please introduce yourself and the company.
Speaker 12:Yeah. Yeah. So so my name is Yash. I'm the the CEO of Applied Compute, and what we do is we build what we call specific intelligence for enterprise.
Speaker 7:Mhmm.
Speaker 12:And what that means is, right, like, you know, AI is sort of, you know, going at breakneck speeds. These general models are getting better and better week over week. But, you know, if you're using the general thing, you're kind of never having your competitive edge. So what we think is there's just a ton of latent knowledge or subject matter expertise that's kind of in an enterprise. And what we wanna do is help enterprises capture that, imbue that into their agentic workforce, and, I mean, to start to to scale up their their their agentic coworkers.
Speaker 1:What does an actual onboarding process look like for an enterprise? Is it just sort of turning loose?
Speaker 2:Before you answer, I just gotta say I love the I love specific intelligence. I don't I've got enough general intelligence. I really like some specific
Speaker 1:I think a lot of people are feeling that. They're they're like, everything's at 99%, but I want 99.999%.
Speaker 12:Exactly. Yeah. Yeah. I mean, like, you know, there is that MIT Mhmm. Gen a state of gen AI paper that came out a while ago.
Speaker 12:Mhmm. You know, the the thing it highlighted, you know, the reason 95% of these AI pilots fail is because these things don't really do the last mile. So they don't adapt to feedback. They don't get better the more you use them, kind of like an employee would. And, you know, that's really what you need in enterprise in order to actually have, like, a productive employee.
Speaker 12:Mhmm. You know, you can do kinda simple automations. We've seen a lot of, like, workflow building, and that's great. So I I kinda think about this as, like, RPA plus. Right?
Speaker 12:You had you know, you used to have, like, sort of, like, your click and drag RPA. Now you're introducing models into it. But to do sort of, like, real cognitive work that, like, knowledge workers are doing, you kinda need to go a step above. A lot of that is context, but a lot of what we do is is fundamental research on the model level too because we think in sort of building this this next agentic employee is gonna require sort of touching the entire stack.
Speaker 1:And and what does your stack and supply chain look like? Are you a beneficiary of open source? Are you partnering with big labs? You obviously have a lot of experience with big labs. But what does your what does actually deploying one of your products look like?
Speaker 12:Yeah. So so so we're a platform. We deploy a platform inside of an enterprise. Mhmm. We really wanna sell the entire stack.
Speaker 12:So that's, you know, being able to plug into all of your system record and and data because, you know, we think context is there. Just really fragmented, right, across all these different applications and even people. A lot of stuff is in people's heads, this this tacit knowledge. Mhmm. So, you know, we plug into all of your data.
Speaker 12:We have our RL proprietary RL post training stack where we can train these sort of, like, reasoning models directly on top of your data, all the infrastructure around models, which makes them agents. Right? So, there's the model, but an agent is really like, where is that model running? What tools does it have access to? All the permissioning and authentication.
Speaker 12:And then above that is, like, the application layers. So how are humans interacting with these agents? How are they, like, sort of guiding it, instructing it on what to do? And then the observability around of all all of this. And what we think our value really is is is closing the loop.
Speaker 12:So I was you know, everyone's been talking about continual learning. Mhmm. I think that's entirely how this space is gonna go. Right? Like, we have offline evals today.
Speaker 12:That's because that's kind of the best thing we have to benchmark. Really, these models are getting so damn good that you're gonna be evaluating them based off the real work that they're doing in the enterprise and, like, while you're actually tasking them
Speaker 11:with stuff.
Speaker 12:So we basically help capture all of that information, turn it back into context and data that we can use to continually train these things.
Speaker 2:I don't know how much you can share or how many of how much is this is a secret sauce that that that maybe you'll talk about on a podcast three years from now when when you've already won. But what how do you how do you get all the context that lives in people's head into your into your system so that it can be used across the organization is like I imagine you've tried a bunch of different attempts and and ways.
Speaker 12:Yeah. Yeah. So so I think there's like a couple of of, you know, standard sort of recipes that you can use to to start these things. And I actually wanna be super clear. I think RL is is, you know, sort of one of the best ways to train these models today.
Speaker 12:Mhmm. But it's not gonna be the only thing, and it's gonna constantly evolve. It's it's honestly quite nascent in its stage. Right? You know, I think Karpathy and a lot of these other folks have talked about, like, how simplist overly simplistic it is.
Speaker 12:But, you know, a good example, Jordy, might be embodied work. Right? So humans go and spend a ton of time going and creating artifacts that they spend a lot of reasoning effort on. And what you can actually do is you can look at these artifacts, these these final outputs, and sort of say, hey, this is what good looks like. And then optimize models to train models to produce things that look like that.
Speaker 12:So, you know, I think a recent example of this that we actually you know, we put out some some collaborative research with Mercor, like, two days ago, sort of hill climbing on this this new agentic benchmark they call Apex. So sort of a professional services benchmark across law, investment banking, consulting management. And, yeah, we're we're sort of number one on the corporate law subdomain there. I think got bumped down to yeah. And, like, number four or five overall.
Speaker 12:So it's got it's it's
Speaker 7:it's tricky how much you can
Speaker 12:do with with these small amount of data.
Speaker 2:Where where where is applied compute like, where what what sectors are your customers, like, having their mind blown in the way that software engineers have generally with with cogen tools over the last year?
Speaker 12:Yeah. It's it's a great question. So so we're really targeting, you know, institutions where there's a lot of sort of built up knowledge and context over over decades. Right? So this is like financial services, insurance, health care, bio, places where data really, really matters.
Speaker 12:I think, you know, even even the coding domain, right, it's you know, there's so much there's such a high ceiling there in terms of the types of of of models you can go and and train. So, you know, we've we've been doing some some work with with Cognition, helping train some some custom models there. But, yeah, I think like places where there's a lot of sort of like institutional knowledge, that's where where this sort of imbuing it into these models shines the most.
Speaker 1:Mhmm. Well, thank you so much for coming on the show and bringing
Speaker 2:Do we have to I think we gotta hit the gong.
Speaker 1:Oh, yeah. We have mean, the fundraising, it was it was a little bit ago, but how much did you raise? We wanna hit the gong.
Speaker 12:Yeah. So so we raised 80,000,000 last year.
Speaker 2:Better late than never. Great great to finally have you on the show. Great to hear. You're welcome anytime. Yeah.
Speaker 2:We'll talk to you hang again soon.
Speaker 1:Have a great rest of your day. We'll talk to you soon. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it.
Speaker 1:CrowdStrike secures AI and stops breaches. And let me also tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 2:Get in the UltraDome. He's not here yet.
Speaker 1:Morton, we're running a little bit behind. We'll check on him. And in the meantime, we will tell you about Scott is here. We have Scott Morton from Revel. He's the founder and CEO.
Speaker 1:Welcome to the show.
Speaker 2:What's happening?
Speaker 8:Hello. Great to be here.
Speaker 1:How are you doing? Massive day. Take us through the fundraising news because I I just hit the gong, and I wanna hit it again.
Speaker 8:Yeah. We've raised a 150,000,000 for our series b and led by index ventures. Major from Redpoint as well.
Speaker 1:Amazing. So since it's your first time on the show, let's break down the product. What are you building?
Speaker 8:Yeah. So we are solving solving a a basic problem in that the software used to control and test hardware systems Mhmm. Really has not improved since the eighties and nineties. Mhmm. So you have these companies building, you know, the most complex cutting edge systems like hypersonic jets and satellites, and they're using control software that was designed pre Windows '98.
Speaker 8:So, yeah, it's insane. And so we provide a state of the art software platform that really makes the control software and test software no longer a bottleneck, but instead, an accelerant to their development.
Speaker 2:Mhmm. Do you have any experience making hardware? Did you just think this was a cool idea?
Speaker 8:Yeah. I know. So I spent, you know, nine and a half years at SpaceX. Worked Six six. Yeah.
Speaker 8:Worked on a lot of these systems, brought a lot of control software for Falcon nine and the later Starship Starship vehicle launch site. And SpaceX really, you know, it like a proving ground for, you know, software for hardware systems and, you know, and also kind of the highest stakes environment.
Speaker 1:Yeah. So, yeah, maybe go a little bit deeper in terms of software for hardware systems. Like, when I think about a rocket taking off, I could think about, like, a gravity simulation, like a full three d environment, something on Unreal Engine. Then I could also just think about, like, a whole bunch of, you know, like, logic, basically testing different ratios and and applying the laws of physics at sort of just a mathematical level. Like, what's the shape of the product?
Speaker 1:What what what are the most common problems that are solved?
Speaker 8:Yeah. I mean, this is, you know, this is the software that will control the hardware system directly. Mhmm. You know, engineers typically, you know, they need to offer the control software. And, you know, overall, it's like if, you know, if if they can only test they're like, let's say you're building a pump or something.
Speaker 8:Yeah. If you're only able to test that five times in a week Mhmm. Imagine if you could then test it 50 times in a week and how much of a better pump you're going to then deliver and when you need to ship that product. Mhmm.
Speaker 1:So so with a pump, I I, you know, I could imagine, like, what is it? CFD fluid dynamics. Like, are you simulating individual fluid molecules flowing through a system, or are you acting on a higher level of abstraction? Like, what's in demand right now in terms of simulation and control software?
Speaker 8:Yeah. So this is more so like you're designing a pump from the very beginning, and you first kind of design the system, you then fabricate an initial version of it. Yeah. Then you need to set up kind of an environment for how you're gonna make sure that what you've built is actually, you know, is actually going to work. It's not going to break, let's say.
Speaker 1:Yeah.
Speaker 8:And so where we said this is the software that will both control the pump, but then also all the systems around it that are going to kinda make that simulated environment.
Speaker 1:Yeah. What do you think of the term digital twin? Is that overused and too buzzwordy? Hilarious.
Speaker 8:Yeah. I know it's used everywhere. I mean, you know, simulation is a big component of
Speaker 2:all of this.
Speaker 8:Yeah. But we're more so in the, like, rapid iteration and testing these systems.
Speaker 5:Sure.
Speaker 8:So for instance, you know, we're running some deep partnership with Impulse Space, if you know them.
Speaker 1:Oh, yeah.
Speaker 8:They have a rocket engine test site out in the Mojave Desert. Our software will run that whole system. It's a large facility, and we enable the engineers there to write all their control software, you know, make their command and control interfaces, and then also kind of execute those together, as they're trying to figure out, you know, what what they want to see, on that that system.
Speaker 1:Yeah.
Speaker 2:Where are where are you getting traction? A $150,000,000 series b's tells me that you're not just selling into, you know, pre seed companies in El Segundo. Are you are you getting into some of these larger kind of legacy manufacturers yet, or is that part of this round?
Speaker 8:Yeah. No. We've been we've done really well with kind of scaling start ups so far, both doing the test software but also control software, working with Radiant Nuclear, providing their command and control system. But, yeah, we are engaged with some larger companies. Doug is here.
Speaker 1:Doug is here
Speaker 2:physically in the
Speaker 1:old He's about to come on the show.
Speaker 2:He's coming on he's coming on in ten minutes. You jump.
Speaker 1:He's like, have a bug report. I have a bug report.
Speaker 2:Standing.
Speaker 1:That's amazing.
Speaker 8:Yeah. But, yeah, we're so we're doing very well with the kind of scaling startups, but we're now starting to engage with both larger companies in aerospace
Speaker 9:Mhmm.
Speaker 8:But then also in more of heavy industry mining, more of industrial control, oil and gas type applications.
Speaker 2:That's cool. Is this a is a good place to just kind of vibe code, not even look at the code? You just kinda, you know, tell Just
Speaker 1:let it rip.
Speaker 2:Mistakes Let it rip. Or or is part part of this is like if you if there's software errors on your side, there can be very physical, expensive consequences in the real world.
Speaker 8:Yeah. No. I mean, it's definitely the latter. I, you know, I don't think a lot of people are really vibe coding this type of software at this point. And we do have some plans for that to make that enable you to vibe code potentially for for control software.
Speaker 8:We do actually have our own programming language, believe it or not, which sounds maybe sounds pretty wild, but there really isn't a good programming language specifically designed for controlling hardware systems. Mhmm. And part of that is actually designing out a lot of the common mistakes that are made. Mhmm. So this language, if it's if it compiles successfully, it actually cannot crash when it is run.
Speaker 8:As an example.
Speaker 1:You know Goldman Sachs has their own programming language?
Speaker 2:I did not.
Speaker 1:Think it's called like slang securities language. Right? I think Bloomberg
Speaker 8:I've heard of that. Yeah.
Speaker 1:Yeah. Yeah. There's there's a number. Jane Street, OCaml. It's not theirs.
Speaker 1:It's open source. But, respect. Programming language respecter here.
Speaker 2:That's right. Anyway. So great to finally have you on, Scott. Yep. We still gotta hang.
Speaker 2:We still gotta hang one of these days.
Speaker 1:Maybe we needed a custom programming language for TBPN.
Speaker 2:Yeah. Tyler. TBPN learn his first programming language.
Speaker 1:This is what we need. It's more of like a plain text programmer these days.
Speaker 2:Sorry, Scott. We're we're having too much fun but congratulations to the whole team. I'm sure you'll be back on We'll talk to you soon.
Speaker 1:Have a good rest of
Speaker 8:your day.
Speaker 1:Goodbye. Let me tell you about Restream. One livestream, 30 plus destinations. If you wanna multistream, go to restream.com. And let me tell you about public.com, investing for those that take it seriously.
Speaker 1:They got stocks, options, bonds, crypto, treasuries, and more with great customer service. And without further ado, we will bring in Sun from Moon Lake. Sun and Moon. You see what I did there? Congratulations on the launch.
Speaker 1:How are you doing? Thank you so much for joining the joining the show. And, please, explain exactly what you built and how much AI is going on because it's a crazy demo. We're hopefully gonna be able to pull it up, but we'd love to know about how you're positioning the product, how you're explaining it, and what Moon Lake is.
Speaker 9:Yeah, of course. So, actually, let me take a step back
Speaker 1:Please.
Speaker 9:To explain define role models first. Because there's such a term that is overloaded.
Speaker 1:Yeah.
Speaker 9:So I define role models as models that can ex that predict a model that can extrapolate the next state of the world
Speaker 1:Yeah.
Speaker 9:In action. Right? And in fact, I'm defining this right now because I'm predicting that you guys are gonna ask me about, okay, how is our world model different than other worlds?
Speaker 4:Sure. Sure.
Speaker 9:This capability is actually just, my world model capability. Yeah. But and biggest the biggest problems with foundation models in AI today is that these models don't have these world model capabilities
Speaker 2:Mhmm.
Speaker 9:Such that it can't predict and act in long horizon tasks.
Speaker 1:Yeah. You know, we've seen with, like, Genie three, amazing ability to paint on the wall, come back, paint again, and the paint's still there. But we're so far away from a real game mechanic of you're five hours in and you go back and you get a new quest. Like, we're we're far away from that. At least it felt like that until this demo.
Speaker 9:No. Exactly. Like, there's there's different schools of thoughts Yeah. When it comes to role models. And really, it comes down to how are you representing the world Mhmm.
Speaker 9:For the tasks that you care about simulating.
Speaker 1:Mhmm.
Speaker 9:Right? So for example, for Genie, it's they have really pretty pixels. Mhmm. The problem with with it is that it, you know, can't remember the world currently more than a minute. Yeah.
Speaker 9:But it's an absolutely, you know, incredible technology. Yeah. The way we're approaching it is to say, we're gonna use logic Mhmm. And symbolic representations such as code Yeah. To encode the interactivity and deterministic part of the world.
Speaker 9:And then we're gonna use pixel priors to then render the world. Sure. But the pixel priors are only responsible for the appearance.
Speaker 6:Mhmm.
Speaker 9:Games or real world physics, it's there's a lot of deterministic part that is better represented through code and symbolic representation.
Speaker 1:Yeah. So I the the when I when I watched the demo, I was very impressed. It felt like the first, like, sort of turning in a coding agent loose on, like, the Unreal Engine platform. Are you using a game engine under the hood? And then how much of a harness did you have to build to actually get this result?
Speaker 1:Because the the little interactions around, there's music playing, and you can bowl, and you actually have a game within a game. You can go up to an arcade game and play Space Invaders that it was all built. How much of this is the harness? How much of this do you get for free by sitting on top of Frontier LLMs? And then how what are you using in terms of game engine and stuff off the shelf?
Speaker 9:Yeah. It's a great question. So we are we actually are using game engine, but we force an source game engine and make a lot of customizations on top of it.
Speaker 1:Oh, probably Godot?
Speaker 9:Our model. Exactly. Yeah. The Lara model to essentially leverage a lot of things that off the shelf models can't.
Speaker 1:Awesome.
Speaker 9:So and then, so you can think of it as like this code generation model that is we we post trained to have to be able to use a variety of tools Yeah. To build the world. Very
Speaker 1:cool. So do you want to become a game developer and use your own tool to generate the next super deep world at way lower cost? Do you want to turn this place?
Speaker 2:Playing in a game right now.
Speaker 1:Yes. The the the we'll get into simulation theory at the next interview. But, or or or do you want this to be like a consumer tool similar to what we've seen with Suno mid journey where there are people that go and sort of generate their own images or music and enjoy those for themselves. Maybe they share them, but maybe they just enjoy them for themselves. How do you see this being adopted?
Speaker 9:Yeah. Frankly, the our ambition is beyond gaming. Mhmm. So we really want to solve multimodal reasoning. Yeah.
Speaker 9:Like, be able to allow models to really do long horizon planning
Speaker 1:Sure.
Speaker 9:Both the virtual world and the physical world.
Speaker 1:Yeah.
Speaker 9:But first of commercialization, short of commercialization, we want to empower empower basically people to be able to monetize with their ideas Mhmm. That is not founded by their skill.
Speaker 1:Yeah.
Speaker 9:Right? We want to be the enablement layer to shift leverage from skill or domain knowledge to really taste. Yeah. So that anybody with good ideas can be monetizing their ideas.
Speaker 7:Yeah.
Speaker 1:So how much of how much of a network is important here? Like, I'm thinking about the priors of Roblox, building games within the game engine, and a lot of that comes from the the network effect, the the multiplayer nature. Do you think that will be important as a growth engine for you?
Speaker 9:Absolutely. In fact, in our age today, you can say, I I want to build an open, like, multiplayer game.
Speaker 2:Sure.
Speaker 9:And then the model and agent would automatically configure Yeah. Database and multiplayer setups for you. Yes. One click deploy this experience
Speaker 1:Yes. And share
Speaker 9:it with your friend.
Speaker 1:But importantly, that would not be that sticky of a network effect for you. And so what I'm thinking is, like, do I wind up with a Moon Lake handle at some point that I can take across the different games that are created through the platform?
Speaker 9:Yes. Okay. So you won't be able to, say, you know, create an ID and then create ten ten of your games just monetize on top of the Mobix platform, and we help you distribute it to the players and help you monetize.
Speaker 1:That's amazing. This is very, very cool. Take us through the funding news. How much have you raised so far?
Speaker 9:We've raised 28,000,000.
Speaker 1:Who's in? Any good I
Speaker 2:think that was the I think this is the same round as as as last time. Okay. But it's it's been it's it's an honor to hit it again.
Speaker 1:Yeah. I'll hit the gong for anything that Jeff Dean's ripping checks into. It's a great lineup of investors. And thank you so much for taking the time to come on the show.
Speaker 2:Yeah. Great to get the update. Really impressive progress. Congrats.
Speaker 1:We'll talk to you soon. Have a good rest of your day. Let me tell you about AppLovin. Profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today.
Speaker 1:And let me also tell you about Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And you heard us tease it earlier, but we got some very special guests in the TVPN UltraDome. We got Adam Draper.
Speaker 1:How are you doing? And Doug Bernauer. How are you guys doing? Good to see you. Look at this outfit.
Speaker 1:Woah. Back. What you got?
Speaker 4:A hat for us?
Speaker 1:There you go. Fantastic. Dude, you're
Speaker 11:been on once.
Speaker 1:Wait. I saw I saw a preview of this. I I saw the nuclear hat earlier on the
Speaker 11:You know, we're up here for a
Speaker 2:little while.
Speaker 1:Yeah. Is is the is the orange because you're doing construction? Oh, well, nuclear. Is orange.
Speaker 11:I've been wearing orange pants for about ten years.
Speaker 2:Okay. Because you had
Speaker 11:For about ten years.
Speaker 2:You gotta yeah. You gotta have the vest for when you're doing video podcasts because we didn't see your pants last time.
Speaker 11:Well, I asked Twitter what I should wear today. Yeah. And so I was just walking around LA. Yeah. And they said the Dumb and Dumber suit.
Speaker 1:There we go.
Speaker 11:And so I went walking for costume shops Yeah. And I ran into a great guy who tried to sell me everything in the store.
Speaker 1:Fantastic. And
Speaker 11:I ended up on this.
Speaker 2:That's great.
Speaker 1:Should we open this? What can we open this? Yeah. Yeah. I wanna I wanna open this.
Speaker 2:Gotta give him time I'm to a collector of things and I just
Speaker 11:I I I felt inspired. Here. Open the whole thing. Okay. Do you guys know Funko Pops?
Speaker 1:I am familiar with Funko Pops. What did we get here? What is this?
Speaker 2:Woah. Woah. It's a look what it says. Woah. Customs.
Speaker 11:Custom Funko Pops.
Speaker 2:Crazy. Crazy.
Speaker 1:You can just get these made?
Speaker 2:How does work?
Speaker 11:Dude, you know I can't gift far enough in advance.
Speaker 2:Thank you. There you go.
Speaker 11:You can do
Speaker 1:This is amazing.
Speaker 2:That's crazy. I feel like we gotta protect those so nobody kind of messes with them.
Speaker 1:Yeah. We should consult with Dylan Everscott on our team who knows collectibles very well. Yeah. Because we might have to get this PSA certified.
Speaker 7:I think we should.
Speaker 11:Actually, that's
Speaker 1:good. Something like that.
Speaker 2:That's amazing. That's amazing. Thank
Speaker 1:you. Doug, good to see you again. How how are things going?
Speaker 13:They're going really great.
Speaker 1:I can imagine that demand for energy is in endless supply. What's the latest in your world though?
Speaker 13:Absolutely. Humans like being humans. They like lots of energy.
Speaker 11:They do. And you better
Speaker 13:get ready for the gong.
Speaker 1:Okay. What you got for us?
Speaker 13:Oh, We just paid $360,000,000.
Speaker 2:Oh, you need a
Speaker 1:pre gong? That's a big I love kicking off an interview.
Speaker 2:Congratulations on saying the biggest number. 260,000,000.
Speaker 11:Just in case you
Speaker 1:Fantastic. Did
Speaker 13:you add another gong? Is that I'm waiting to hit the horse actually.
Speaker 2:It's on your side. No. We gotta horse,
Speaker 7:son. I know.
Speaker 2:We should make a horse gong.
Speaker 11:Okay. So It sounds
Speaker 1:so wrong. So I I I mean, I've yeah. You know I've been to I've been to the Radian facility in El Segundo. Does this unlock a new facility? Is there gonna be a separate manufacturing line?
Speaker 1:Just a lot more humans working, joining the team? Like, what is the money for?
Speaker 13:Yeah. It's mainly a scale of production at our factory facility in Tennessee, which we signed for in October. Congrats. About 80 acre site right now and already Huge. Broke ground.
Speaker 1:Okay.
Speaker 13:Digging on-site and building's going up. It looks awesome. I saw art yesterday.
Speaker 1:So so now you have when we were last talking, you were talking about still doing design work. You were working on the the what was this? The helium loop. I remember you explained some of this to me very nicely. Dumbed it down.
Speaker 1:But how far are you along in sort of locking the design? Because if you're setting up a manufacturing plan, I imagine that you're gonna lose some flexibility at some point. Right?
Speaker 13:Yeah. Absolutely. So we're doing a dome a test in the dome Yeah. Very soon. And we actually since we talked last, we've gotten approval from the Department of Energy.
Speaker 1:Cool.
Speaker 13:It's a really It's amazing. Boring sounding complex name, but it's it's the approval to fuel and go go to full power.
Speaker 1:Like, that's more Gong worthy. We should have to decide that.
Speaker 2:I was gonna vote for the Gong.
Speaker 1:There's a lot of people with money. There's only one government that can actually put down a stamp, you know? Yeah. It it is it is incredible progress that doesn't get enough doesn't get enough credit. But anyway, so continue.
Speaker 13:Yeah. So it's called a preliminary design safety approval. It's done. So this means the design is locked. So that Yeah.
Speaker 13:Thing we were working on finishing out, that was the big event. And now it's been months of Yeah. Review back and forth, we're good. Yeah. We're approved.
Speaker 13:They're the
Speaker 1:only ones. So so no big change. Oh, we're we're moving away from helium. We're moving away from triso fuel.
Speaker 13:Well, this is just I should say that's just for the first unit
Speaker 1:Yeah.
Speaker 13:That goes in the dome. Okay. We're and we've got more of a team now working on the production units that we're gonna build lots and build many at a time, right, up to 50 per year One from that factory a week.
Speaker 1:Wow. Yeah. So 50 that's 50 megawatts. Are you still thinking about the one megawatt architecture
Speaker 6:Yep.
Speaker 1:Absolutely. For the generator? Yep. Okay. And then in terms of demand, initially, there was a lot of demand from, you know, stranded places where energy is very expensive to get to.
Speaker 1:You're off the grid. You're on an oil and gas site or you're in a military context. Has the has the demand shifted? Have the AI folks showed up?
Speaker 13:Oh, yeah. Absolutely.
Speaker 1:Okay.
Speaker 13:I mean, we have an announced deal with Equinix for 20 units with down payment
Speaker 1:Yeah.
Speaker 13:On them. And, you know, what what end up happening is we're gonna make many reactor products.
Speaker 1:Yeah.
Speaker 13:Right? Nuclear reactors can be products. Yep. It really has never happened before because usually, you dig a big hole in the ground, you build a building. You're really, you're making a building.
Speaker 13:Yep. Yeah. Right? And it's not a it's not a product. You have to for a to be a product, it has to be mass producible.
Speaker 13:Yeah. And so that's really what Radiant is all about. Yeah. We're gonna be making reactors for space. Yep.
Speaker 13:Reactors for maybe the bottom of the ocean floor, reactors that flow, reactors Atlantis.
Speaker 4:Yeah.
Speaker 13:Reactors on a truck, reactors on a plane.
Speaker 2:Yeah. Think about them as like the economy Yeah. Building effect.
Speaker 7:Don't have that.
Speaker 1:That's the horse. Walk me Water horse. Some of the economies of scale. If I want in a in a in a long time whenever you're whenever you're it's ready. If I want 10 megawatts, is it more efficient to get ten one megawatt reactors or just scale up and create one ten that maybe is bigger, maybe has different, you know Yeah.
Speaker 1:Manufacturing and and transportation requirements. But when do you think about actually scaling up the design versus just selling more of the existing product?
Speaker 13:Yeah. So our mandate is really mass produce. And so we don't want to make things that are not that are immobile. And so if you operate a reactor that's at a larger power scale, it's gonna be more efficient. Okay.
Speaker 13:There's actually a neat effect where, like, if you put a little bit more nuclear fuel in the design, that fuel makes the other fuel that you had go a little further. Sure. So it's very cool and it's this, like, exponential Yeah. But, you know, we know what we're doing. We're totally focused around efficiency that we provide is more like deployability.
Speaker 13:Mhmm. Right? If you go, I want power next week, we can actually do that.
Speaker 1:Yeah.
Speaker 13:And if you go too big, you can't do it. You lose that. Yeah. So that's what Kaleidos, the product, is about. Got it.
Speaker 13:Makes sense. But this round is really exciting. Yeah. We actually had you know, Adam Yeah. Led the rounds, and actually has invested in every round.
Speaker 1:Every round. Every round. I
Speaker 11:used to be called the most invested investingist, So we used to say I've invested the most, but
Speaker 2:now I gotta say Is this your biggest check ever?
Speaker 11:Yeah. So Boost VC Yeah. Precede for mad magic and mutants and historic things.
Speaker 1:Yeah.
Speaker 11:And that's how we look at it.
Speaker 2:Cool.
Speaker 11:We generally are investing $500,000 Yeah. Into all the deals.
Speaker 1:Seems like a chef.
Speaker 11:But every once in while, you, you know, you encounter a company and a founder Yeah. Who you just enjoy and care about, and you want to go all in. And so We we in October, after they had announced this Mhmm. The Nashville plot
Speaker 1:Yeah.
Speaker 11:My partner and I, Brayton, we got together and we were like, can we do it? Yeah. And so we decided to just pack up the truck. We went for it. And fortunately, he is incredible investors.
Speaker 11:He's an incredible founder. And we everyone just re upped. We got to lead it. It was fantastic.
Speaker 1:I get Does that change the overall strategy of Boost, or is this sort of like a special case where you went to the LPs and said there's a specific opportunity that we're targeting?
Speaker 11:Yeah. For the so great question.
Speaker 1:Yeah.
Speaker 11:I do think that there are opportunities like this that emerge when you get to know your founders well.
Speaker 1:Yep.
Speaker 11:And so I've invested in 600 companies over the course of fifteen years. Mhmm. Yeah. There you go. I'm open.
Speaker 11:I I like that. Yes. Yes. And and you know, we we we do follow on. Do do those things.
Speaker 11:But I just feel, hey, if Doug does this, if the team at Radiant is capable of doing this, this makes a historic change in a world I want to live in.
Speaker 1:Yeah.
Speaker 11:Yeah. And so I ended up getting to care about the founder as well as the And so by doing that, I get to so my my quick answer, you asked a very specific question.
Speaker 2:Yeah.
Speaker 11:In the situation where that will continue to be true, it would be really fun to do more of these. Yeah. However, I wear orange pants. Yes. And I love Yeah.
Speaker 11:The early stage.
Speaker 1:Yeah. So you should still yeah. You're still very focused on the early stage. Like, we shouldn't just think, oh, Boost is just a major growth equity firm now.
Speaker 11:Don't I don't think I could sell yeah. Know. No. I just love the energy.
Speaker 12:I love it.
Speaker 11:I love being the gateway to be able to help people pursue their dream of whatever the thing is. That's great. And I've been able to see people across the entire stack for for over the last fifteen years. And, you know, I also now get to, you know, be in the room and watch watch nuclear reactors be built.
Speaker 1:Yeah. Are there are LPs and investors that you talk to sort of receptive to this idea that nuclear technology is, like, sort of getting pulled forward by the AI boom, but sort of uncorrelated with it because, like, we still need energy for oil and gas exploration and the military and all these different things. Like, it's not so hyper indexed on, like, make or break. Do we get to ASI or not? Like, this technology is useful in all scenarios.
Speaker 11:Is ASI the new a a s We
Speaker 2:have our goalposts over there. A book
Speaker 11:called Scythe that calls that the the Thunderhead. Thunderhead. And so we can call it that now. I'm gonna call it Thunderhead for the rest of
Speaker 1:the month. Okay.
Speaker 2:I like that. Thanks.
Speaker 11:So the I mean, the general answer is I think across all markets, energy only gets consumed more and that's like such an easy sell for
Speaker 2:the So it's it's pure execution risk, it is. Mhmm.
Speaker 11:Yeah. And the so we know the demand is there. Yeah. We know that there there's a huge nuclear wave where the government is behind.
Speaker 1:Yeah.
Speaker 11:And so limit limited partners and other investors, they want access. Now, when when Doug pitched me seven years ago, like, none of those things the the energy was still a real problem.
Speaker 1:Overnight success. Yeah. Skip higher. I
Speaker 2:a hot hand right now.
Speaker 7:My God.
Speaker 11:None of those things like, none of the other things were true. It was you know, people thought it was a regulatory burden. Yeah. People thought, like, the government would never allow you to do this. Yeah.
Speaker 11:But, you know, we have built nuclear reactors before. We have nuclear reactors. And so when he pitched me on a phone call in twenty minutes, I said yes. And we wrote the largest check we had ever written at that point also. And then we this last October, we wrote will be a bigger one, but
Speaker 1:How much work do you think needs to be done on the on the public perception side? Because right now, data centers are unpopular, and I think the number one reason is not slop in your feed. It's energy prices going up. And if you build more energy, if you build more clean energy, it should be a win win. Everyone should be happy.
Speaker 1:But I just have this inkling that if if you go and you say, we're building a data center, we're gonna make it look good. You won't be visibly obstructed, and we're building the power plant for it. It's a nuclear power plant. You're still gonna get a few protesters. Maybe not as many, but they'll still be there.
Speaker 1:So how do you think public what how do you think about positioning nuclear for consumers, for people that might have this in their neighborhood at some point or in their state or in their country even?
Speaker 2:Or in their podcast studio.
Speaker 1:Ideally. Ideally. Sign me up.
Speaker 13:See you guys on.
Speaker 1:But but and and then and then how do you think about we
Speaker 2:looked at a We did look at a studio space. We were about to put an offer down on it. And we were like, what's in that door? And they were like, oh, don't worry about it. That's just the machine.
Speaker 2:We were like, oh, I'm actually very curious about it.
Speaker 7:I should
Speaker 2:And I'm actually pretty worried about it. The machine. The machine That's just the machine. In that case, they were cleaning the soil from some industrial waste that
Speaker 1:It was that
Speaker 2:had happened like fifty years prior.
Speaker 13:Soil remediation.
Speaker 1:Yeah. Soil remediation. A hundred But years anyway, communication about the risks of nuclear, the benefits of nuclear. What do you think are the important points to get across, and then how do you think those diffuse through the populace?
Speaker 13:Yeah. It's really important
Speaker 1:Mhmm.
Speaker 13:First off to
Speaker 1:Yeah.
Speaker 13:Right, to talk to the public Yeah. And really explain how to think about nuclear. And I I wrote a thing called Atoms for Prosperity
Speaker 1:Yeah.
Speaker 13:That lays out some of those points, but we will we are making it now into a cooler kind of series. Yeah. We can't go through all of the individual points here.
Speaker 1:Yeah.
Speaker 13:But I think you're right about AI. Right? I think that people don't like really a big building going up. Like a big monstrosity that's gonna bring a bunch of attention and people and traffic and Mhmm. Like all the the stuff that it brings.
Speaker 13:Yeah. And you also have the added complexity of the energy markets typically being very regulated. Yeah. Right? There's a lot of laws around it and they can just get a higher rate they have to pay.
Speaker 13:Mhmm. Right? If they get enough votes.
Speaker 1:Yeah.
Speaker 13:Right? And and so that's probably more on the gross side of things. The good news is, the thing that we're doing Mhmm. Is the opposite. Mhmm.
Speaker 13:You know? Most people doing nuclear are targeting something big, you know? And and there's a lot of excitement around nuclear right now Mhmm. And AI. A lot of people are saying a saying.
Speaker 13:They're building a building. Mhmm. We're not doing that. We're doing the doing. Sure.
Speaker 13:So and what is that? It's just reactors that we build Yeah. On our site. It's a building far away that you never see as the customer and it just appears when you want it. It goes away when you want it to.
Speaker 13:You call us and go Yeah. Pick it up. Yeah. It's kind of beautiful. It's like totally different from other nuclear.
Speaker 13:Mhmm. So I think that will help quite a lot. Mhmm. It's just such a different thing to be able to go, you know, I can have clean power and you and and we go, yeah. And they go, I can have it next week?
Speaker 13:Yes. And they go, and it it can get send it away anytime. Yep. Anytime you want. Mhmm.
Speaker 13:And no waste. Yeah. We take that and we handle that.
Speaker 1:Mhmm. Talk about the ramp. Because we were looking at the data center that was recently protested in New Brunswick, New Jersey. It was tiny by AI comparisons, 25 megawatts. You could probably supply it in half a year.
Speaker 1:But Meta's average campus right now is around 500 megawatts. Take you ten years to power that. Does the ramp up look like?
Speaker 2:Till your next week is Jack. Yeah.
Speaker 1:What does the ramp up to get from 50 a year to 500 look like for you?
Speaker 13:So I don't know. Right? It's it's not really something we're trying to address. Yeah. What I'm most interested in is being able to put reactors in really crazy places.
Speaker 4:Yeah.
Speaker 13:Like, put a reactor on the bottom of the ocean floor, like, right like like I was saying.
Speaker 1:Why would why would you actually want one on the bottom of the ocean floor at this
Speaker 13:stage? It's the same reason you would go, like, put a research facility in Antarctica.
Speaker 1:Oh, okay.
Speaker 13:Because it's far away and it's weird there, and you're gonna learn some things.
Speaker 9:Oh.
Speaker 13:And we haven't ever done it before. Interesting. And so that's a frontier.
Speaker 1:Yeah.
Speaker 13:And that's kind of all that I'm excited about.
Speaker 1:So so so sink some sort of, you know, remote lab that had camera equipment, lights, and sensors, and you could understand what's happening at the bottom of the ocean. That's fascinating.
Speaker 13:I don't know what you'll learn.
Speaker 1:James Cameron should become the spokesperson.
Speaker 13:Anybody can yeah. If you want, we can make a reactor for that. Right? And the thing is like, if you want you can't use a combustion power source, and there's definitely no sun. Yeah.
Speaker 13:So it's just think about that.
Speaker 1:That's actually interesting.
Speaker 13:We're the only thing you can do in a lot of places actually. Yeah. Not just that one. It's just a good a good example to get people to think like, oh shoot. Okay.
Speaker 13:Bottom of the ocean floor
Speaker 4:Yeah.
Speaker 13:All the way up to anywhere in space Yeah. As far from the earth as you wanna be Yeah. As far from the sun as you wanna be. Oh, true. Right?
Speaker 13:Think about that.
Speaker 1:That's a good weaker on Mars. Right?
Speaker 6:Yeah. Yeah. Yeah. Interesting.
Speaker 13:Although you'd still use it. Yeah. I do think they both. I like solar plus nuclear.
Speaker 1:Yeah. I love it.
Speaker 11:I think you're on the right path, though, that education is one of the most expensive issues, And stories like having a nuclear reactor on the ocean floor that's functioning and we're learning tell a great story. And so those stories become easier to tell as more of them exist. The hard part is the in between. Mhmm. We we saw this when we were in crypto also.
Speaker 11:Mhmm. Everyone was saying, like, the banks will never let you do this. The governments will never let
Speaker 13:you do it.
Speaker 11:And now, obviously, like, it's on the congress floor.
Speaker 1:It's all the rave. So many big massive
Speaker 11:Yeah. And so, like, transitions take time and they're expensive, but, like, it's important because the end consumer gets a better product.
Speaker 1:Yeah. In the early stage of I I would call, like, the hard tech boom, the defense tech boom, the El Segundo boom, The dollars that were being raised
Speaker 11:You're talking about nineteen eighties?
Speaker 1:Yeah. I'm talking more about, like, 2022 maybe when people started paying attention in Silicon Valley. But the dollars were small, and so they could be sort of flyer checks from VCs. Now we're getting into real numbers. Do you what do you think about the relationship with the SaaSpocalypse?
Speaker 1:It feels like public markets investors are rotating away from software. They would love something like industrials, energy, something that's clearly going to exist in a hundred years no matter how good the computers get at at AI. But then in Silicon Valley, we'll talk to founders all the time where they're raising for a software product. Basically, it's just AI indexed, and so they're soaking up 200,000,000 of capital every other day. What's happening at the early stage in terms of excitement and at that growth stage to fund projects like this?
Speaker 11:Well, as we are growth investors.
Speaker 1:Yes. Yes. As visually.
Speaker 13:Private equity guys. Pre seed and series d.
Speaker 11:No. I actually have a shirt that says pre seed and series d.
Speaker 2:Oh, I love that. You're thinking you're actually thinking on the longest time around. Oh, good. I'm gonna make a custom
Speaker 1:Crazy.
Speaker 11:Gift. Technology looks like magic. Incredible. My well, here, I'm sure we both have thoughts on this. So we've been investing in hard tech.
Speaker 11:We have a way of when everyone really gets excited about something, we like looking the other way. And over COVID, we saw everyone getting really excited about software because we were all
Speaker 1:Yeah.
Speaker 9:Locked in
Speaker 11:our houses and inside, and, like, software was where you saw everything.
Speaker 1:Anything for remote work is just booming.
Speaker 11:And so we made a conscious decision to be like, hey. That's not always gonna be true. Let's invest in in person businesses that are that are like physically expensive. Yeah. Okay.
Speaker 11:That are high CapEx. Yeah. And so we obviously invest in Radiant multiple times. Yeah. And a bunch of other Starfish, Venus, just an incredible number of fantastic companies.
Speaker 11:And so, like, we were able to there's a I think that there's a sense in the investment world where they want to be a part of something that's important, but sometimes they're not considering whether or not it's a good investment. And I think that balance is at scale right now. That that would be my like and I think we're they're probably overestimating the SaaS apocalypse. Yeah. I think so many talented people are building so many incredible things.
Speaker 11:Yeah. I was just at the upfront summit, which was just over here. Yeah. Walkable. Yeah.
Speaker 11:So thank you. Yeah. This was very efficient.
Speaker 4:It's fantastic.
Speaker 11:And you know who I love to hear speak is Cathy Wood from ARC because she's just so optimistic about unlocking technology assets to everyone. And a lot of other people were sort of in the AI negativity bucket. And I was like, how can you not be optimistic? We just saw, you know, everyone who's building awesome stuff on this show. Right?
Speaker 11:Like incredible AI things. Yeah.
Speaker 2:Well, I don't know if you saw, but Square just did the largest layoff in S and P 500 history by on a percentage basis.
Speaker 13:That's
Speaker 2:crazy. And so that's that's that's kind of the the flip side and and even even Howard Marks acquired. Hey.
Speaker 11:Get get in touch with Boost VC. And we're going to invest in some Square alumni. I think it's the
Speaker 2:You got 4,000 of them back. Fantastic. So get the Brink trucks ready.
Speaker 11:There are talented people there. We would love to invest in them. And I think what AI is really causing is this eruption of amazing individual entrepreneurs. Yeah. It's like the next wave.
Speaker 11:Yeah. So it's exciting.
Speaker 1:Very interesting.
Speaker 13:On that note Yeah. You know, of optimism, we there's a very cool video we released just yesterday that I thought you might wanna see. Yeah. And I think you're I think you guys have Oh, That's it. Okay.
Speaker 13:Let's do it. We can have a Cool.
Speaker 1:Yeah. Have a
Speaker 2:look and see.
Speaker 13:And just shows Where so where
Speaker 4:is this?
Speaker 13:Shows shows we're building. Okay. Right? So we talked about the approval, the Yeah. The the regulatory approval.
Speaker 1:Yeah. I remember seeing Or
Speaker 13:the core plate?
Speaker 1:This is the hard raw material for this.
Speaker 2:That's hard
Speaker 4:in the loop.
Speaker 13:That's us doing orbital welds tubing. That's the mounts for the pressure vessel. Yeah. That's the forged pressure vessel piece.
Speaker 1:That's crazy.
Speaker 13:And that's what we're doing.
Speaker 1:Yeah. Amazing. July 4. Love it.
Speaker 2:So cool.
Speaker 11:How awesome. Amazing. Just building huge physical things like we're Yeah. We're back to building huge
Speaker 1:physical So you bring that design to the dome?
Speaker 13:That's right. That All is the actual nuclear reactor harbor that we're showing and this is really like the most that we can possibly show to the public. Yeah. And we now have two buildings. One is just all manufacturing.
Speaker 13:It's like you go and it's all machine shops. These big fancy glove boxes where we're doing welding with controlled gas conditions. And it's it's so much different from the
Speaker 1:last seven years. When I was at the when I was at the the the office, were you sending out for, like, CNC parts?
Speaker 13:Oh, yeah. A lot of stuff we had to send out. Yeah. A ton of stuff.
Speaker 1:Because I I noticed a lot of equipment, but there wasn't that much actual machining material to, like, make stuff that you would put on interesting. So that must having the machines in the actual building must speed up iteration as well. Right?
Speaker 13:Absolutely. Yeah. And a lot of the incoming capital allows us to make those moves and do those things and even invest a little bit in R and D for things that are really far out, that aren't even a product yet. They're just like, we realize the limitation and we're like, we're gonna go pushing that thing. If it moves, we'll have something no one else has.
Speaker 1:Yeah. Last time I was there, I
Speaker 13:think you had around 40 people. How big is the a 150.
Speaker 1:Wow. Talk to me about that road. I I I mean, you were at SpaceX for a long time. Did you ever manage that many people? Is this a new challenge for you?
Speaker 13:No. I I I did a very weird job when
Speaker 5:I was
Speaker 13:at SpaceX. Was there twelve years. And the first couple years
Speaker 1:Ignite success.
Speaker 13:I did loved it. It's why I twelve years. Right? It's the coolest mission, like make life multi planetary. I love that.
Speaker 13:And and I I left to make a reactor company to make power for that Yeah. Mission still. Like I I still want our reactors go that route. Totally. Of course, a different type.
Speaker 13:But was I doing stuff like, you know, I made the first Falcon nine ground system Yeah. And then I made the the first two rockets. I traveled around the country testing the first two Falcon nines
Speaker 2:Yeah.
Speaker 13:That flew. Wow. And then I did the first ever rocket with legs. Yeah. That And was like report directly to Elon with like three other people and like go to his desk, yeah, and go, here's what we're doing.
Speaker 13:He'd be like and we got so lucky that like every time we came to him, we're pretty much like, and the Qualtank passed and it worked and the schedule's good and he was so he loved it, right? Yeah. It was like, great. But from there, was like then I was doing Boring Company and I was doing Hyperloop. It's every Elon like side projects.
Speaker 1:Yeah. You were
Speaker 13:Which is exciting.
Speaker 1:Run special projects, so not really full scale up constantly. Yeah. But now it's higher, higher, higher.
Speaker 13:But I would just go and talk to whoever I needed and cross every line possible. And there I didn't use the right channels of communication. I just pulled all the assets. I don't know. I'm building thing.
Speaker 13:I'm building a thing, and I'm ignoring everything else. And I that's basically still how I operate.
Speaker 1:Yeah. That's great. Getting candy shop. Powerful. Anyway, Jordy, anything else?
Speaker 2:No, guys. Congratulations.
Speaker 1:Thank so much for coming
Speaker 2:here. Yeah.
Speaker 13:This is great.
Speaker 1:Great one.
Speaker 2:So excited. I I I genuinely cannot wait to get my own.
Speaker 1:So Yeah.
Speaker 2:I don't know what I'm gonna use it for yet but Yeah.
Speaker 1:Yeah. How many are
Speaker 13:you going to need in total? How many
Speaker 1:can you
Speaker 13:You're talking about the ocean one?
Speaker 2:35. Twenty thirty five. Yeah. I'm gonna need some for a boat. I just Yeah.
Speaker 1:Love it.
Speaker 11:Yeah. Love love it. An electric nuclear
Speaker 1:off grid for the rich preppers, the AI billionaires, they might want it.
Speaker 2:Yeah. Yeah.
Speaker 13:Well, and if you have some real estate on the moon, it's not very high value without power. There you go. You wanna get some power for that.
Speaker 2:There we go.
Speaker 13:Like Guys.
Speaker 1:Thank you so much.
Speaker 2:Thank you. Amazing
Speaker 1:progress. Rest of your day.
Speaker 2:Hang out. Hopefully, we
Speaker 1:can see you and
Speaker 2:And wrap up the show.
Speaker 1:That concludes our guests for today. Thank you for watching TVPN.
Speaker 2:Let's get more into The other the block news.
Speaker 1:Okay. Yeah. You can pull some of that. The other the other big news is that Nano Banana two launched today combining pro capabilities with lightning fast speed. We, of course, did this is the latest image generation model from Google.
Speaker 1:And Tyler gave me a little review. He ran a couple benchmarks. Some pretty impressive results. You said it's And is that because it's it's reasoning more, you think?
Speaker 3:So it's unclear. I I saw people saying online that it was actually much faster.
Speaker 1:So Okay.
Speaker 3:I I'm I'm curious if it was just, like, like, while they were just deploying it
Speaker 1:Sure.
Speaker 3:Sure. And Sure. It was on Google. It was on the studio. It wasn't on the the Gemini website when I was trying it.
Speaker 3:Yeah. So so that could be I I I'm not actually sure if it's Yeah.
Speaker 1:I mean, the headline is intelligence and and visual quality at flash speed. So So I I think I was just they were going for something faster. But yeah. I mean, these these models take
Speaker 2:think I was
Speaker 1:I was
Speaker 3:using it right when
Speaker 1:it was being deployed.
Speaker 3:But there's examples over here. Nano Banana Pro.
Speaker 1:Yeah. Looks like A lay flat infographic depicting the water cycle, some car oons. Yeah. It really it really has always been great at nailing, like, these molt these complex graphics that typically you would absolutely have to do piece by piece and then maybe add the text afterwards because you would get slight hallucinations or misspellings, and it seems to be one shotting these things at this point. So we, of course, ran Waldo bench where we try and use a generative image model to create a photorealistic where's Waldo graphic.
Speaker 1:And, you'll you'll you can be the judge. This took you a couple prompts, but we did in fact get a where's Waldo that fits the right perspective. I feel like the the scale of all the characters is correct. And most importantly, there's only one Waldo, and he's somewhat hard to find. It's not the hardest Where's Waldo, so I'd give it sort of an eight or nine out of 10 on on Waldo quantity and placement.
Speaker 1:But as you zoom in, one of the key features of Where's Waldo is that there are little storylines playing out throughout the image to distract you from finding Waldo. And so that is in fact happening here. You can see some folks building a some kids building a sand castle, some people in line for what looks like ice cream. There's a mariachi band. There are sunbathers.
Speaker 1:There's a there's a large sand castle that's gathered a lot of folks. The the the level of of quality once you actually zoom in very, very closely on the individual people that are being depicted at a very small scale. This is totally nitpicking. But there are some hallucinations still. It's not quite at the level of visual fidelity of a handcrafted Where's Waldo, but it's getting close.
Speaker 1:And so congratulations to everyone over on the Nano Banana two team who made this possible. It's certainly, a major step forward. Although, I'm moving the goalposts again because I want I want my full Where's Waldo just as intriguing as a typical Where's Waldo? Jordy, what else do you have for us on the block news? How is the internet reacting to the news that block laid
Speaker 2:I was mean, it's 4,000 people, which is a huge number. Mhmm. And then I was trying I ran a ran a deep research report to find because it's certainly not not the largest layoff ever Mhmm. But it is the largest layoff as a percentage of the overall workforce in S and P five hundred history.
Speaker 1:Wait. How is that possible?
Speaker 2:So the second largest layoff in S and P five hundred history was Like 30%. Phillips
Speaker 1:Mhmm.
Speaker 2:At 22 and a half percent Woah. Chevron at 17 and a half percent Verizon
Speaker 1:Nearly half.
Speaker 2:15 Intel did 15% in 2024. GM did 15%
Speaker 1:Yes.
Speaker 2:In 2018. Meta
Speaker 1:So I guess I guess the the Twitter the Twitter restructuring doesn't count because it was delisted before that happened. Yep. So Twitter went from 7,500 to 1,500. And, yes, I I I I think you're right. It might not have been in the S and P 500 at
Speaker 2:the time. It wasn't.
Speaker 1:Interesting. Well, there's some reactions. Will Slaughter, Bama Bonds says in three years from December 2019 to December 2022, Block more than tripled its headcount from 3,900 to 12,500, unwinding less than half an insane COVID overhiring binge has much more to do with Jack Dorsey's managerial incompetence than whether AI is gonna take your job. And so people are immediately jumping to, is this AI? Is this not?
Speaker 1:The stock's up 25% on the news. So the investors certainly think it's the right move to make, the right hard thing to do. The other interesting thing is that Block, if I'm correct, did a fairly large merger with Afterpay. And I don't know how much overlap in the employee base there was, but it's not uncommon when a merger of those two sizes, $10,000,000,000 to I I think a Afterpay merger was in the tens of billions. After Afterpay Block acquisition.
Speaker 1:Let's see. It was 13,900,000,000.0. It was an all stock deal. It was originally announced at 29,000,000,000, and I'm not sure how many total employees. Let's see if they we can pull up this.
Speaker 1:Afterpay had around a 1,500 employees, and so there's a few different things this go. Dan Primax says it's stunning in its candor. And if you're one of those spared, how could you not be wondering how long until AI comes for your job too? If CEOs get comfortable that this is okay, let alone if they believe shareholders will be rewarded for it, set off a stunning layoff wave, very interested in the AI will create
Speaker 2:Yeah. The obvious pushback, Toly over at Solana is making it, he said, didn't Jack have 10,000 people running this website when only 75 were needed even before AI? So, yeah, the again, it doesn't really it doesn't really matter whether or not a company is actually getting tremendous efficiency AI. Every CEO is gonna do this, and we've said over and over and over, I'm surprised more CEOs haven't done Yes. Deal on things.
Speaker 2:Salesforce has 76,000 people Mhmm. At the company.
Speaker 1:Mhmm.
Speaker 2:Right? It's basically city. And Yeah. It's really really sad. Jared Sleeper Yeah.
Speaker 2:Who has a fantastic episode on Odd Lots Odd Lots. About the SaaSpocalypse. He says, first of many sad days as painful as it is, Jax did focus service by being decisive. Of course, really sad day. These employees will be able to quickly go and hit the job market, which probably gives them somewhat of an advantage over future layoffs like this.
Speaker 1:If you're not a software engineer, this should be a wake up call to what has happened in the past few months with AI engineering tools. Everything has changed. Now we get to watch this company learn how to either use these tools in earnest or slowly fall behind, says Dustin Curtis. I I'm I'm very interested to learn the shape of the layoffs. Do they lean more software focused or less software focused?
Speaker 1:This is certainly just one company, one example, but interesting to see how this matches with the Citadel rebuttal of the Citrini piece. You get a lot of people are seeing this as like vindication of the Citrini piece. Anyway, we will cover it more.
Speaker 2:Tate Kim says every media person, please read this before writing your narrative tomorrow. Jack Dorsey is Jack Dorsey. Do not extrapolate. Do not pass go.
Speaker 1:Like
Speaker 2:responding to Will Will Slaughter's Post that I just Post.
Speaker 1:Yeah.
Speaker 2:Yep. Square for context did around twenty four billion in total revenue in 2025. Mhmm. They've been trading at around 30 even though the business is profitable and growing, and so had certainly been beat up. But very, very sad day.
Speaker 2:Gavin Baker had a post that Kyle Harrison highlighted. He said the fact that Twitter is running well with head count down significantly really matters whether they admit it or not. Everyone in SV admires Elon. A lot of venture funded CEOs are sending emails like this inspired by Elon and taking drastic actions. Margins are going up.
Speaker 2:Balaji says this is the first AI cut and it will send shockwaves. Remember, Jack is one of the greatest founders of all time. He created this platform that we're all on. It has been early to many technological shifts and Block is doing very well as a business. So for him to cut 40% head count in this way is a signal to everyone in tech, get good now, become indispensable, work nights and weekends, learn the AI tools and raise your game where you might not make the cut as an employee or as a company.
Speaker 2:I know that sucks, but capitalism is natural selection. The market is unforgiving because you are the market. After all, it's not like you're buying some random gallon of milk from the store, you're always buying the best product at the best price. So too for apps, your customers are are always installing the best piece of code they can get and because AI is gonna create new winners if you aren't the best in your market, someone may become better with AI. To be clear, Block's severance is generous by any measure, twenty weeks of pay, six months of health insurance invested equity.
Speaker 2:All of that goes far beyond any typical package. Jack did his level best to cushion the disruption. The laid off are a temporary unfortunate class as opposed to a permanent underclass. But had he not leaned into the AI transition, he might have had to lay off more people slowly and over time as faster competitors went after his market share. How would they do that?
Speaker 2:Sure, AI is not a panacea by any means, but the closer you are to software engineering, the more aggressively you need to embrace agentic workflows. The AI companies are already doing that in places like Stripe, Shopify, Coinbase and now Block are pushing hard on this area. There will be overcorrection but the fundamental technical innovation is real and you need to either disrupt yourself or get disrupted. I think that's generally generally good advice.
Speaker 1:Mhmm. Anything else in the timeline you wanna review? I'm sure we will be covering
Speaker 2:Ace 16 z says every tech company fire at least half their people but most can probably do 80%.
Speaker 1:Black pill. Thanks.
Speaker 2:Yeah. And to round it off, we'll leave you with a white pill
Speaker 1:Okay.
Speaker 2:Or something like a white monster which is that Joe Wiesenthal is sharing the chart for the Monster Beverage Corporation which seemingly is entirely AI AI proof.
Speaker 1:Yeah. Monster's been ripping. Fascinating company history founded by a very
Speaker 2:How much do you think how much do you think Sattrini paid paid Square to do this life?
Speaker 1:Yes. To to validate How deep does it taking a victory lap.
Speaker 2:After being mocked for the last four days.
Speaker 1:Yeah.
Speaker 2:Fed Speak says, on one hand, Jack is a notoriously bad business operator and on the other hand, it's over. Yeah. The the the the the pushback on on Balaji saying Jack Jack is one of the greatest founders ever is simply that, yes, he is one of the greatest founders ever.
Speaker 1:Mhmm.
Speaker 2:And I don't think anyone would say that he is the best operator
Speaker 1:Sure.
Speaker 2:Of and and that's okay.
Speaker 1:Yeah.
Speaker 2:Right? But sometimes being the best founder means making the super hard decision and having the foresight to
Speaker 1:Yeah.
Speaker 2:Get ahead.
Speaker 1:It would be a very weird situation if only Jack Dorsey founded companies Take him said stand in 80%
Speaker 2:Same dude bought Jay Z's title, not the greatest operator.
Speaker 1:Yeah. Take him's white pilling. He's always white pilling. I enjoy him. Anyway, thank you for watching the show today.
Speaker 1:Leave us five stars in Apple Podcasts and Spotify. Sign up for our newsletter at tvpn.com. We will be live tomorrow at 11AM. No. We won't.
Speaker 1:No. We won't. We're off tomorrow.
Speaker 2:We're off
Speaker 1:tomorrow. We are heading to Montana. And so we have some affairs to attend to and we will not be live tomorrow. But we will return on Monday.
Speaker 2:And I can't Mark
Speaker 1:your calendars 11AM Pacific on Monday. It will
Speaker 2:We love you. Goodbye. Goodbye. Nice
Speaker 1:work, brothers. I'll see you on the next one.