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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN.
Speaker 2:OpenAI has announced that they have won a long they achieved the long standing grand challenge in AI, gold medal level performance on the world's most prestigious math competition, the International Math Olympiad. That's the IMO. So this went up at 12:50AM on July 19.
Speaker 1:Typical timeline
Speaker 2:Yes. For announcements. So this is this is basically, like, Friday night, Saturday morning. You're looking at, basically 1AM from Alexander Way. And he shares a picture of a strawberry with a metal with the OpenAI logo on it.
Speaker 2:Someone also tested. They took this picture. They uploaded it chat GPC. What's the fruit in the image? How many r's are in that fruit?
Speaker 2:And it nailed it. So we are truly we are truly AGI. Has arrived. Has arrived. Also, before we go deeper into that story, we have a new partner, Restream.
Speaker 2:You saw it in the intro. We're very excited to welcome them as a sponsor of the show. We've running on Restream. Secretly. Secretly.
Speaker 2:Secretly.
Speaker 1:Since day one.
Speaker 2:Since day one. It's been our secret to our to success and it can be your secret to success.
Speaker 1:Yeah. You Support. Have Yeah. A lot of the Fortune 500 already
Speaker 2:Yep.
Speaker 1:For all their live streaming infrastructure. So if you need to go live, go live with Restream.
Speaker 2:And you see OpenAI do streams. Like Yeah. That that that is a thing that has entered the standard xai.com strategy.
Speaker 3:I don't
Speaker 1:know if x a I is running on Restream.
Speaker 2:But had a little But they do but they do stream and you know, it used to just be the the hyperscalers, the Mag seven, the big, big companies that would do a livestream around a an annual event. Then Brian Chesky came out and created Founder Mode and basically said, put all your announcements on an on an annual release schedule, bundle them all up, have the team celebrate, push to get across the finish line. And part of that is, let's throw an event. Part of that is, let's get the CEO and the product leaders on stage, tell the community about what we're building, what we've built. And now a lot of people are streaming it.
Speaker 2:If you're gonna stream your stuff, you need Restream. Anyway, go check it out. So Dylan Field, someone who's who has streamed events, you know, Figma obviously has config their dev event annually, and they actually do two of them. And those are streamed all over the place, probably using Restream. And Dylan chimes in on the OpenAI news.
Speaker 2:He says, congrats to the congrats twenty twenty five IMO winners and participants, including OpenAI, who trained a general purpose reinforcement learning model and achieved IMO gold. OpenAI team includes these two folks, Cheryl and Polynomial Gnome. Fun fact, Polynomial also won the twenty twenty five diplomacy world championship as a human. And so people are saying AGI is right around the corner. AJ from Semi Analysis says, what stands out to me scaling RL on non verifiable rewards likely via rubrics and LLM as judge, thinking and reasoning for several hours at a time for a highly specific task.
Speaker 2:This is what the 20,000 per
Speaker 1:Month.
Speaker 2:Month model will look like. And so, there were a bunch of interesting things about this. Apparently, there are a few different ways to to tackle math, IMO level math problems. One is using this this program called Lean that is a formal math proof verifier. And there's rumors that Google's building their system to leverage that a lot.
Speaker 2:OpenAI apparently went way, way down just the text based LLM reasoning path and had a lot of success there. So even though, as we'll get into in this story, it feels like it's neck and neck. Maybe Google was earlier and they just didn't release it faster, and maybe this is a comms thing. Yeah. There's a whole bunch of different stuff going back and forth.
Speaker 2:But potentially, the more interesting thing is, did they take different technical approaches and get similar results?
Speaker 1:Yeah.
Speaker 2:If they're neck and neck, which one will scale better? Which one will generalize better? There's a whole bunch of different discussions there. Do you wanna get into some of the the the controversy or the pushback? Do you have do you have a post pulled up from someone saying about about Google's attempt?
Speaker 1:Yeah. Mean, the the the whole thing came down to timing. Yeah. Dennis over at DeepMind was was pushing back a little bit, which I could pull up.
Speaker 2:Dennis Hosabas from Yes. DeepMind, the co founder, and now at Google. Yeah. It was interesting because the we we immediately jumped to Polymarket because this whole idea of a an an AI system beating the IMO, we talked about this with Scott Wu from Cognition months ago, back in April. I I found the clip.
Speaker 2:And and he said, would be very surprised if an if an AI system this year does not does not actually surpass the IMO. He, of course, is an IMO gold medalist himself. And so, was it was a big it was big to hear from him. Now, the poly market had been sitting at like 20%, and I think we're gonna get into like the minutiae of Yeah. Like, what it means to truly win because the IMO, like, the group that actually puts on the competition has a different set of rules.
Speaker 2:They don't They put the questions out, and anyone can go and try and do them. But to actually be awarded a goal for an AI, they said it has to be an open source model potentially. It has to be released in this particular way. And so, OpenAI might have used their systems to solve the questions, which is super impressive, but they might not have checked every box to actually technically win the gold from the actual organization. And so, Noam says, today
Speaker 1:Yeah. Demis, to be clear, so so he put out a post this morning saying official results are in. Gemini achieved gold medal level in the international mathematical
Speaker 2:Which is different than actually getting a gold medal.
Speaker 1:Gold medal. Right. He said, an advanced version was able to solve five out of six problems. Incredible progress. And there's a quote in here from the IMO president.
Speaker 1:He said, we can we can confirm that Google DeepMind has reached milestone earning 35 out of a possible 42 points. Yep. A gold medal scored. Their solutions were astonishing in many respects. Yep.
Speaker 1:IMO graders found them to be clear, precise, and most of them easy to follow. You can imagine Juan is just like off on this insane
Speaker 2:fascinating fascinating details around
Speaker 1:Demis
Speaker 2:how
Speaker 1:they solve them. Shared. He said, by the way, as an aside, we didn't announce on Friday because we respected the IMO board's original request that all AI labs share their results only after the official results had been verified by independent experts and the students had rightly received the acclamation they deserved. And so, you can imagine, somebody was saying, I I don't know how real this was. Somebody was saying that they they were making a claim that like Google Google needed time to,
Speaker 2:like To get the comms approval.
Speaker 1:To sign off. But Yeah. It seems more likely that the original plan was, hey. Let's wait and announce this when when the IMO board actually comes out.
Speaker 2:The analogy feels like you're a super fast sprinter. You go to the Olympics and you run a 100 meter dash that's incredibly fast in the parking lot. Like, you're not in the stadium, but everyone's like, wow, that guy's fast. He's hauling. He's hauling.
Speaker 2:It's very impressive.
Speaker 1:Definitely, potentially the fastest
Speaker 2:man And on and ideally, you paid for the parking pass to get into the stadium and it's like maybe Google and OpenAI were both running 100 meter dashes in the parking lot. One of them had paid for, like, you know, enough parking spaces to make it completely clean. OpenAI was just kinda showing up with a buddy and being like, I'm sprinting. That's the vibe I'm getting. But they're both in the parking lot.
Speaker 2:Like, neither of them are in the actual stadium at this point. But, you know, who knows? They they they might be soon. There are some questions about, you know, do they have to open source or whatever. So Noam Brown says, you know, we achieved a milestone that many considered years away, gold level performance.
Speaker 2:Gold medal, of course, he's saying gold medal level performance. Like, that's very critical. It's not we got a gold medal. It's that we we exhibited gold medal gold medal level performance. Typically, for these AI results, like in Go, DOTA, Poker, Diplomacy, researchers spend years making an AI that masters one narrow domain and does little else.
Speaker 2:But this isn't an IMO specific model. It's a reasoning LLM that incorporates new experimental general purpose techniques, which would be very exciting because you could apply an IMO level
Speaker 1:John, hold up that stack of posts for the audience.
Speaker 2:Oh, we got we got a 150
Speaker 1:I got a text today.
Speaker 2:Gonna be a quick stream, people. It's gonna be a quick stream, but buckle up. So what's different? We developed a new technique that makes LLMs a lot better at hard to verify tasks. IMO problems were the perfect challenge for this.
Speaker 2:Proofs are pages long and take experts hours to grade. Compare that to AIME where which is another math exam, where answers are simply an integer from zero to nine ninety nine. So, you can verify them really, really quickly. Also, this model thinks for a long time. O one thought for seconds, deep research for a minute.
Speaker 2:This one thinks for hours. Importantly, it's also more efficient with its thinking. And there's a lot more room to push the test time, compute, and efficiency further. Now, what's interesting is like these I think these the I think these questions go up and then you have like like, I think the students get like two, four and a half hour sections segments. So there's like, there's a there's a world where, like, the the AIs can do it, but just not as fast as humans, which would be very interesting.
Speaker 2:I don't exactly know how how close they are. So Noam says, where does this go as fast as recent AI progress has been? I fully expect the trend to continue. Importantly, I think we're close to AI substantially contributing to scientific discovery. There's a big difference between AI slightly below top human performance versus slightly above.
Speaker 2:This was a small team effort. He took a research Right
Speaker 1:now, the discovery that that AI is doing is talking with somebody who is potentially schizophrenic and convincing them that they've figured out how to move faster than the speed of light.
Speaker 2:Yeah. There's so many accounts of that. It's it's it's getting crazy. Yeah. I posted chat GPTH and go win me an IMO gold medal and then update my resume.
Speaker 1:Don't make mistakes.
Speaker 2:But, yeah. Mean, have you actually looked at any of the IMO questions ever? No. I don't even know where to start. Like, it's it's all stuff that
Speaker 1:It's one call away for us though. Just text Scott.
Speaker 2:Tyler, have you ever looked at IMO questions?
Speaker 1:No. But I'm looking at them right now. It's like pretty brutal.
Speaker 2:Would you know where to
Speaker 1:Tyler, if you can get two out of six right before the end of the stream, we'll buy you a house.
Speaker 2:Well, that's the thing. He's just gonna be able to ask Chattypedia.
Speaker 1:We won't One shot it. Yeah. Yeah. I had no use. Gotta qualify that.
Speaker 2:So, yeah. Nick has the has the comment about DeepMind. DeepMind has
Speaker 1:also Tyler has another challenge today,
Speaker 2:by we the we will introduce that in just a few minutes. DeepMind has also won IMO Gold, but they haven't announced it yet, by the way. Confirmed. Congratulations, BSC.
Speaker 1:They did this morning.
Speaker 2:They did. Yeah. They confirmed it this morning.
Speaker 1:And so it's been interesting to see the reaction to this. Yeah. Gary Marcus is on X saying, all the tech bros this morning thinking that AGI has been achieved because some parentheses insanely expensive new form of LLMs can now match top high school students on one specific task. It's almost cute. So really just ripping into the entire AI community.
Speaker 1:But Will DePue comes in and says, he's on leave right now, taking a little summer holiday.
Speaker 2:Yes.
Speaker 1:He says, guys, stop using expensive as a disqualifier. Capability per dollar will drop a 100 x a year. The three k task arc AGI 80% could probably be $30 if we cared to optimize it. Repeat after me, all that matters is top line intelligence. All that matters is top line intelligence.
Speaker 1:So Yeah. Yeah. Again, everybody's focused on sort of raw capabilities, not super focused on efficiency, especially for projects like this where they're not necessarily, you know, rolling this out at at in in mass.
Speaker 2:Yep. And you know where a lot of these IMO gold medalists go to work?
Speaker 1:I do, John.
Speaker 2:Ramp.com. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Ramp.com.dot So the timeline was in turmoil over the Gary Marcus post and it went and they went back and forth and he finally admitted it at the end.
Speaker 2:He said he said, that's impressive. So it started with a post by Daniel Lit. He says, huge congrats to OpenAI for their IMO goal. They don't find it too surprising that an AI tool was able to achieve this. See below.
Speaker 2:Though I'd sort of lost hope the last few days, but I'm but I'm pretty surprised it was an LRM with no tool use. So it didn't have Python. It didn't have web search. It didn't have all the things that you're that you could imagine would kind of allow you to to, you know, speed things up or kind of be a shortcut that would put it in a different category. There was always a question about with the when when when the AIs were playing video games, like like computers have wall hacks.
Speaker 2:Like, they can sometimes, like, see the see the map without the fog of war. They can see like, it's very different to get to get perfect pixel, perfect data on where every character is on the map and be able to make decisions based on that as opposed to, like, looking at pixels and having to, like, move the screen over there to see if you're being invaded on the left flank. Right? And so there was always this like, yes, if you gave a computer like the raw access, that's not quite it's impressive, but it's not quite a level playing field. And it's basically the same thing as being like, well, the other folks don't get a calculator and you get a calculator.
Speaker 2:Like, is it that impressive? But this was very much an even playing field, it seems like. So Mel Gibson two point o, great great great name, says you are not surprised that that they you are not surprised that they have figured out a way to make the model learn in very hard to verify domains in a fuzzier reward space. It also appears that the same reasoning model was the one used in the AT coder competition showing that it can generalize across domains. Daniel comes back and says, I don't think we really know that what they figured out yet.
Speaker 2:I'll keep my powder dry until we know more. Mel Gibson says, go read Gnome Brown's thread on the model if you haven't already. He says and remember, Noam Brown says, this isn't an IMO specific model. And that's a very important thing because there's a ton of there's a ton of situations where you can go and RL on a specific task, and it gets really, really good at it, but then you try and get it to do anything else, and it's not that Yeah. And so Daniel Lit says, yeah.
Speaker 2:I read it. Gary Marcus says, chimes in from the rafters because he's not in this chat yet, but he has entered the chat. He says, I read it too. That's pretty vague. Are we sure that no tools were called?
Speaker 2:Gary Marcus then chimes in again, says, re IMO gold, does no tools mean no use of Python code interpreter, etcetera? Dan says Daniel Lit says, that's how I understand it. And then Gary Marcus tags in polynomial, Gnome Brown, and also Alex Way and says, can you confirm that the IMO gold was achieved without using Python or code interpreter or similar? And then Gary Marcus says, humans don't use external tools in the IMO competition. I'm just under I'm just trying to understand what the system is.
Speaker 2:That's how we do science. Daniel Litt. And at some point, whoever was trying to dunk on Gary Marcus just deleted their account. So it just says, this post is from an account that no longer Daniel Litt shows Cheryl on the OpenAI team saying, the the model solved these problems without tools like lean, which is a math verifier or coding. It just uses natural language.
Speaker 2:It also only has four and a half hours to answer our earlier question. We see the model reason at a very high level, trying out different strategies, making observations from examples, and testing hypothesis hypotheses. And Gary Marcus says, that's impressive. So, Gary Marcus, you gotta fill out the the apology form, bro. You gotta fill out the deep reinforcement learning apology form.
Speaker 2:What was the reason for your behavior? No one told me Alex Way was training the model.
Speaker 1:Mercury was in retrograde.
Speaker 2:Mercury, I don't know, ML. And then one of them is Gary Marcus convinced me it was fake because Gary Marcus was famously said deep learning is hitting a wall. Like like this particular paradigm will not scale. You have to do symbol manipulation, which was like kind of his bet, encode different relationships between ideas in the model. There were a bunch of different debates over there.
Speaker 2:And he's gone back and forth on that. He's he's he's not as much of like a deep deep reinforcement learning hater as p some people think. But he's got he that's his brand at this point. So, anyway, more on the drum between DeepMind and OpenAI. DeepMind got a gold medal at the IMO on Friday afternoon, but they had to wait for marketing to approve the tweet until Monday.
Speaker 2:OpenAI OpenAI shared theirs first at 1AM on Saturday and stole the spotlight. In this game, speed is greater than bureaucracy. Miss the moment, lose the narrative. So that's one interesting take. Yeah.
Speaker 2:I I I think there's a little bit of that. I mean, certainly culturally, OpenAI loves to release information before Google. Like Yeah. Whatever Google's like, next big
Speaker 1:And play to win. Remember the Yeah. After what did they release after the deep seek moment?
Speaker 2:Deep research. And then So if
Speaker 1:you're typing deep and you were looking for an AI product.
Speaker 2:And then and then Google had IO and then and then OpenAI OpenAI. IO. This is, like, the day before. With
Speaker 1:Johnny Ive.
Speaker 2:With Johnny Ive. So anyway, you know, you'll love to see it. All's fair in love and war, I guess. I don't think this Warfare. Crosses any Yeah.
Speaker 2:And this is the benefit of having a bunch of posters on your team, I guess. Known Brands says it takes us a few months to return the experimental research frontier into a product, but progress is so fast that a few months can mean a big difference in capabilities. And this is from July 18. So all the models underperform humans on the new IMO questions, and Grok four is especially bad on it even with best event selection.
Speaker 1:Unbelievable. Was accusing Grok four of training on the problem set?
Speaker 2:For IMO?
Speaker 1:No. No.
Speaker 2:No. Something else? Oh, for the other benchmarks? I mean, benchmark hacking is like a thing that happens all over the place. That's why we need, like, hidden benchmarks.
Speaker 2:That's the whole thing of of Arc AGI that we will talk about. We talked about Will DePue saying, guys, stop using expensive as a disqualifier. Terrence Tau, one of the one of the most goaded mathematicians of all time, digs in a little bit and is is adding his perspective as a as a world renowned mathematician. He says, it is tempting to view the capability of current AI technology as a singular quantity. Either a given task x is within the ability of current tools or it is not.
Speaker 2:However, there is a there is in fact a very widespread in capability, several orders of magnitude depending on what resources and and assistance gives the tool and how one reports the results. One can illustrate this with a human metaphor. I will use the recently concluded IMO as an example. Here, the format is that each country fields a team of six human contestants who are high school students led by a team leader, often a professional mathematician. Over the course of two days, each contestant is given four and a half hours on each day to solve three difficult math problems given only pen and paper.
Speaker 2:That's crazy. No communication between contestants or with the team leader during this period is permitted. Advocates for the students in front of the IMO jury during the And
Speaker 1:vigilators are also known as exam proctors.
Speaker 2:Okay. Proctors. Okay. So, yeah. They can ask the people that are running the test, hey.
Speaker 1:We gotta start working invigilator and For sure. We should probably have a shell We
Speaker 2:should hire some.
Speaker 1:Like just an invigilator to For sure. We should have So at least one on
Speaker 2:the team leader advocates for the students but is not involved in the IMO examination directly. The IMO is widely regarded as highly measure of mathematical achievement for a high school student to be able to score well enough to achieve a medal, particularly a gold medal or a perfect score. This year, the threshold for gold was 35 out of 42, which corresponds to answering five of the six questions perfectly. Even answering one question perfectly Crazy
Speaker 1:that a b, basically a b Yeah. Gets you gold.
Speaker 2:Yeah. It's that hard. They're that hard. But consider what happens to the diff the to the difficulty of the Olympiad if we alter the format in various ways. First, one gives the students several days to complete each question rather than four and a half hours for three scenarios.
Speaker 2:To stretch the metaphor somewhat, consider a sci fi scenario in in the student in which the student is still only given four and a half hours, but the team leader places the students in some sort of expensive and energy intensive time acceleration machine in which months or even years of time pass for the students during this exam. Before the exam
Speaker 1:Ben might have put us in one of these Yeah. Because we go live and then it's four hours later.
Speaker 2:Yeah. Time acceleration It's wild. Two, before the exam starts, the team leader rewrites the questions in a format the students find easier to work with. Three, the team leader gives the students unlimited access to calculators, computer algebra packages, formal proof assistance, textbooks, or the ability to search the Internet. Sounds like that didn't happen.
Speaker 2:The team leader has the six student team work on the same problem simultaneously communicating with each other on their partial progress and reported dead ends. The team leader gives the students prompts in the direction of favorable approaches and intervenes if one of the students is spending too much time on a direction they know to be unlikely to succeed. Next, each of the six students on the team submit solutions, but the team leader selects only the best solution to submit to the competition regard discarding the rest. Last, if none of the students on the team obtain a satisfactory solution, the team leader does not submit any solution at all and silently withdraws from the competition without their participation ever being noted. Oh, so that, yeah, mean that could have happened.
Speaker 2:It didn't in this case. But in each of these formats, the submitted solutions are still technically generated for the high school contestants.
Speaker 1:Going back to the parking lot example. Yeah. It's like if you can go run go run the race in the parking lot. And then if you don't run as fast as you hoped Yeah. It's like, well, wasn't in the I mean I
Speaker 2:wasn't in race. I was just going for a jog.
Speaker 1:I was just warming up. I just I like to be surrounded by excellence.
Speaker 2:Yeah. Don't worry. Yeah. I mean, that is the true one. Because if they'd missed, they'd probably be like, what what?
Speaker 2:The IMO is this weekend? We're working on agents. Like, what are you talking about? Like, have you seen our DAUs? Like, get out of here.
Speaker 2:To each of these formats, the submitted solutions are still technically generated by the high school contestants rather than the team leader. However, the reported success rate of the students in the competition can be dramatically affected by such changes in format. A student or team of students who might not even reach bronze medal performance, in the normal competition under standard test conditions might instead reach gold medal performance under some of the modified formats indicated above. So in the absence of controlled test methodology that was not self selected by the competing teams, one should be wary of making various apples to apples comparisons between the performance of various AI models on competitions such as the IMO or between such models and the human contestants. Yeah.
Speaker 2:The question is, like, it seems of those, not many were actually violated by the way OpenAI and Google attacked Like
Speaker 1:Well, this was before I mean, this this was an immediate reaction before I think there was
Speaker 2:More details came out?
Speaker 1:Lot of details. Yeah.
Speaker 2:Yeah. That we've been covering. This is 3PM on on so this is so on Saturday, but 3PM later.
Speaker 1:Well, Rune has a good post.
Speaker 2:This is a
Speaker 1:great one. He says, my bar for AGI is an AI that can learn to run a gas station for a year without a team of scientists collecting the gas station data set. It's a great post.
Speaker 2:The world isn't ready for gas station We
Speaker 1:can run an AI as long as we can we can run a gas station as long as we have you know a perfect you know, data set.
Speaker 2:And that's yeah. That's like the way
Speaker 1:On how gas stations operate.
Speaker 2:Yeah. As soon as we as soon as we place the goals somewhere, we nail that goal and then we have to move the goal post. Shows
Speaker 1:This is so
Speaker 2:This is great graphic.
Speaker 1:Great picture. So Thomas Wolfe says my bar for AGI is an AI winning a Nobel Prize for a new theory it originated. It's just it's a bit image of a team Yeah. Moving the goal post.
Speaker 2:I do like how consistent Tyler Cowen is on AGI. He's like, my bar was the Turing test. We passed that. So I'm I have to call it like it is. Yeah.
Speaker 2:And I'm not moving the goalpost.
Speaker 1:I think I think he's The Tory is gonna look very smart for that. Yeah. In fullness of time.
Speaker 2:I mean, I I think it's okay to be like, yeah, we achieved AGI.
Speaker 1:It's just tough when you achieve something
Speaker 2:Now there's something new.
Speaker 1:It's cool but not immediately Do massively. It.
Speaker 2:But you have to imagine that that was the same that there was the same thing when people were like, human human flight. And then the Wright brothers go and do it. And people are like, great. So like I can hop on a Southwest flight in an hour to go to San Francisco from LA. And they're like, what are you talking about?
Speaker 2:Like LA is like, you know, a couple trains and like some people, you know, with orange groves. And it's like, it takes a long time for the infrastructure to get built out. Like now, a lot of these AI tools, they do build on top of the Internet and on top of technology that we have rolled out. But like, at a certain point, like, the UI matters. The economics of these different tools matters.
Speaker 2:You like, you can't it it might not be economical for a for a company to to, you know, release a an AI tool that costs $20,000 to inference just to get you the weather or do two plus two. And so, all of these things take time to roll out, and that's why we're kind of in this, like, slow takeoff scenario, it feels like. I don't know. Massive post from Fiji the CEO of applications at OpenAI. She is outlining, what her plan is basically, and it's very, very interesting post.
Speaker 2:So in so Fijisimo is an absolute boardroom general. Give me the
Speaker 1:Ashton call. Yeah. When Fijisimo Instacart.
Speaker 2:Yes. Fijisimo. OpenAI and Spotify board of directors positions. Huge runs at eBay, Facebook, and Instacart. Now she's the CEO of applications at at OpenAI.
Speaker 2:Today, she outlined how she sees OpenAI's products having the biggest impacts. High level, six things. Knowledge retrieval, health, creative expression, economic freedom, time, and support. And those are kind of getting, I think, more abstract, more vague as they go along. But it's interesting.
Speaker 2:They map pretty closely to my experience. Knowledge retrieval, I use I use it as Google replacement for a lot of things. Yeah. I use deep research as a as a knowledge retrieval product. I also use it a little bit as web of the replacement.
Speaker 2:Not a ton, but I've seen a lot of people use that. But I do ask it for advice around health, fitness, recommendations for supplements, all sorts of different stuff. Often, I'll just go there and say, what is what what type of creatine does Andrew Huberman recommend? And it'll just Or
Speaker 1:complex medic medical.
Speaker 2:Fortunately, I haven't been in one of those situations recently but I'd Yeah. If I did run one of those situations, I would definitely go to it now.
Speaker 1:Is interesting because previously when people were trying to understand maybe a small health issue Yep. They're having, they would go do a Google search, add Reddit to it and then they would look through the comments. And the comments would provide kind of like context on the symptoms or whatever they were dealing with. But you and you could technically leave a comment But I think the
Speaker 2:of people Yeah.
Speaker 1:Wouldn't post about that. Yeah. So the fact that OpenAI has all that Reddit data. Yep. You can get that same type of data but then you can kind of ask a number of follow-up questions
Speaker 2:Yep.
Speaker 1:Which is very cool, very powerful. I'm certain that people are probably misusing it, maybe reading too much into the results. But again, the idea I think for a long time doctors that would say, don't don't look on Google. You're just gonna stress yourself out. And then you go into the appointment room and they're over there on on the equivalent of Doctor Google.
Speaker 2:Totally. It's nothing new. People used to go to WebMD and like the meme was like you go to WebMD and no matter what you type in it says like could be cancer. Like could be like the worst possible thing. But it might just be a cold, and maybe you should just take some Advil.
Speaker 2:But, like, for whatever reason, WebMD felt the need to, like, kind of give you the full picture and all the possibilities. And then they'd, of course, say, like, go consult an expert or talk to your doctor. So But yes, I I definitely see it it it replacing that type of health experience. Also, I'm using it as a Photoshop replacement a fair amount of time. If I need to just quickly generate an image, quickly generate something that I would have normally gone to a three d rendering program or or Photoshop and kind of created a collage to kind
Speaker 1:of Huge tailwind for the meme industrial complex.
Speaker 2:Huge tailwind. Still a lot to work out there. I do find that sometimes when I go to images and chat GPT, I'm going back and forth on the prompt for ten minutes. And I'm like, I could've just done this with traditional tools. So it's not perfect, but when it gets it, it's so amazing.
Speaker 2:And the final product often looks a lot more cohesive than what I would get if I was like collaging and like the shadows didn't match and there were like rough edges and stuff. So certainly great there. The last three are a bit more vague. We'll have to read into those. But OpenAI is set up to win pretty big in all of these categories.
Speaker 2:So semi analysis, clocks, chat, GPTs, share of queries at 71%. Meta is in second at 12%, and that's with billions of users on Meta products. And so OpenAI is certainly running away with consumer. So there's this question of like the it feels like the rest of consumer AI plays will be, I would say, like horizontal in the sense that it won't be a new app on your home screen. Meta won't have Meta AI as a home screen app.
Speaker 1:Loses their lead and becomes the Yahoo of AI, but that doesn't feel likely.
Speaker 2:Yeah. It feels tough. Like, why did Yahoo lose to Google? It's because there was an entirely new paradigm in page rank. Yeah.
Speaker 2:Like a new algorithm emerged. Sure. If that if that happens from SSI or super intelligence, meta super intelligence, there could be a leapfrog moment. But so far, they've been pretty good at staying near the frontier to the point where it's like, okay, Google got them on this one or Grock got them on this one today. But there hasn't been a time when I've been like, okay, Like, there is a dramatic difference in the results such that it's worth it for me to go over.
Speaker 2:There was that moment for Claude for a little bit. Everyone was like, Claude's way better. I went over and used Claude for a bit and then I went back to OpenAI just because the product was better had more of an ecosystem.
Speaker 1:Product lead is very real.
Speaker 2:Yeah. I was thinking about this. Like, if you played out a hypothetical scenario and you went and you had, you know, the keys to OpenAI HQ, You went and you exfiltrated all the code, everything, got an app into the App Store, Geordie GPT. You have the exact same model, the exact same inference, the exact same UI, everything. Could you win?
Speaker 2:Because people would say, well, it's
Speaker 1:not There's better on that We we live on a part of the Internet where people are constantly debating the merits of the leadership teams and the approaches and the philosophies. But then downstream, you have approaching a billion users that are just like, yeah, I like I like the product. I use it a lot.
Speaker 2:Yeah. And so even if you ran a Super Bowl ad saying like, we have a product that's exactly as good as ChatGPT. It is feature for feature Feature they would be like, but I already have it installed. You're asking me for two minutes to uninstall this and reinstall the new one and then I don't get any benefit. I wouldn't do it.
Speaker 2:Even if you match my even if you match my capabilities, you got a leapfrog.
Speaker 1:It's funny. So so Jason Fried had a great post Oh, yeah. Relevant yesterday. He said, feature parity is just another way to say we don't need to exist. If That's you come out good point.
Speaker 1:And you're so good Yep. At what you do that you can create as as good of a product Yep. As OpenAI models that are as good, you still don't need to exist. Yep. And so that is the challenge Yep.
Speaker 1:For anyone competing.
Speaker 2:If you let me tell you about ramp.com. Time is money saved both, easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp.com. Really quickly. So it feels like the rest of consumer AI plays will be horizontal.
Speaker 2:There won't be a new AI app for Meta that really takes off. Instead, AI will improve everything Meta does across Facebook, Instagram, WhatsApp, Quest, etcetera. And I was thinking about the initial takeoff of Facebook. The other tech companies, they didn't really seriously get to compete in social networking. Yeah.
Speaker 2:Like Google plus never really took off. I guess Microsoft bought LinkedIn, and that's kind of a niche social network, very profitable business, great business. But it's it is like its own thing. It doesn't directly compete. But graph databases and the idea of storing efficiently connections in in graph networks like Facebook kind of pioneered, that became really widespread and was used all over the place.
Speaker 2:Yeah. And the same thing with Google Search, like this this page rank, just better search algorithms, those wound up manifesting in better search in all sorts of products. And so when when a new company comes out and builds, you know, a a whole paradigm or they break through in terms of a front end development or database development or some sort of structure. Like it winds up it winds up improving everyone. And so I think I think AI will have these like horizontal benefits all over the ecosystem.
Speaker 2:I think it makes a ton of sense that that Meta's investing so much in super intelligence. But it's not, I don't really think the narrative should be like, they need to play catch up to ChatGPT. I think it's more like they just need to implement LLMs in every single crack in their all of their different systems like they do with great databases, great infrastructure. I'm not sure. We'll see I
Speaker 1:still think there's I still think there's I mean, remember Meta made some early experiments of making digital clones of big celebrities Yeah. On Instagram. Yeah. I still think they'll take more shots on goal around companionship. Yeah.
Speaker 1:Will they go Grock waifu mode? No. Yeah. I don't think I don't think they want that revenue line. But but there's a bunch of other ways in which they could kind of go after that market that I don't even think I mean ChatGPT is is is such such an interesting product because it's designed to be a functional tool around knowledge retrieval, creative expression
Speaker 2:Yep.
Speaker 1:Just unlocking consumer surplus, giving people access to expertise, etcetera. And the the way in which people are using it as a companion is sort of not the sort of default. It's not like you name your chat gbt. Right? People will give it a name.
Speaker 1:Yeah. But
Speaker 2:It doesn't really stack. Yeah. It's not it's certainly not baked into the UI Yeah. In the way that it could be. Yeah.
Speaker 2:I know people do talk to it.
Speaker 1:And so I can I said it before but as as Chad GPT user hours are just or sorry, user minutes still? But as they're ticking up, I do think Zuck will look at that and say, want I want some of that action.
Speaker 2:Yeah. Yeah. And and and maybe some of that. But I still I still think some of that happens inside of the platforms. I don't I
Speaker 1:don't Yeah. Not necessarily necessarily in that new app.
Speaker 2:It would be very difficult. And and Meta has yet to really do it. WhatsApp and acquisition, Instagram and acquisition. But stories massively successful within Instagram. Yeah.
Speaker 2:And so I would expect, I I agree with your take that I think there's an opportunity for for a lot of AI stuff to live within those apps. And then also just on the monetization side, like they're in a very unique space where they can give great products away for free, but they can't be charged an inference cost to another company. And so, if they have their own open source model, they can inference very cheaply, they can give it away for free, and then they leverage their massive ad network. So let's go through what Fiji Simo over at OpenAI is building. So, in a few weeks, I'll be joining OpenAI as CEO of applications.
Speaker 2:We've all been waiting for this moment. Helping to get OpenAI's technology into the hands of more people around the world. I've always considered myself a pragmatic technologist, someone who loves technology not just for its own sake, but for the direct impact it can have on people's lives. That's what makes this job exciting, since I believe AI will unlock more opportunities for more people than any other technology in history if we get this right. AI can give everyone more power.
Speaker 2:And so, she has a fantastic career. EBay, Facebook, then Instacart, and is now at OpenAI.
Speaker 1:And she was heavily involved in building the ads engine at Instacart, correct?
Speaker 2:Yeah. Yeah. And obviously, Facebook as well. So in on knowledge, she says, empowerment starts with understanding the world around us and our place in it. When we have the right knowledge at the right time, we can make better decisions, advocate for ourselves, and change our path.
Speaker 2:But for most of history, access to expert level knowledge has been limited to those with more resources. I mean, even even after the invention of the printing press, like, still had to be in a big city that had a library to go check out a book for free. Still had to have the time to do it. And and certainly buying every book and being able to index it was very expensive and difficult. Now it's even easier.
Speaker 2:It's already working. People who use AI tutors learn twice as much as they do from human ones, and the gains are even bigger compared to learning in a traditional classroom. In a 2024 OpenAI study, 90% of users said ChatGPT helped them understand complex ideas more easily. I agree with that. On health, she says, personally, I'm most excited about the breakthroughs that AI will generate in health care.
Speaker 2:A few years ago, I faced a complex and poorly understood chronic illness on that side, and it became painfully clear just how fragmented and inaccessible the healthcare system can be. Even with access from some of the best doctors in the world, I found myself acting as a connector, piecing together insights from multiple specialists who weren't speaking to each other. I actually had a friend who, got a very, very rare form of cancer and did all of the research pre CHA2GPT, actually downloaded all the frontier science and all the different papers, figured out that it was this one very rare condition, found the expert, went to that expert. He was like, yep. You have this thing.
Speaker 2:It's the I'm the only one that studies this thing. I'm gonna help you. Did the surgery save your life? Crazy.
Speaker 1:I I had an I had an issue. I was I was 18 traveling. I was surfing in South America. Mhmm. There was flash flooding.
Speaker 1:I was in this tiny town. I got a antibiotic resistant staph infection from Oh,
Speaker 2:that's bad.
Speaker 1:And then was getting repeated infections over the next year. And the doctor kept prescribing
Speaker 2:Antibiotics.
Speaker 1:Antibiotics that were so, I mean, such an intense antibiotic that doctors won't it's like a soap. They won't touch it without gloves on.
Speaker 2:Oh.
Speaker 1:And they use it pre before surgeries. And they just said, use this twice a day over your entire body. And I kept having I kept having issues and eventually found in a Reddit community that was like just like obsessed over this issue and the and the thing that fixed it was avoiding gluten. Yeah. It like actually just That's
Speaker 2:so crazy.
Speaker 1:And I just imagine if I was like even now if I was dealing with that issue, I would have been able to I would have just been able to like talk with chat GPT about it. Would be able to surface all that kind of thing, build a build a picture of it.
Speaker 2:Very interesting. Well, let me tell you about Restream. One livestream, 30 plus destinations, multi stream That's right. And reach your audience wherever they are. We use Restream.
Speaker 2:The backbone
Speaker 1:of this show.
Speaker 2:So she closes out health saying, AI can explain lab results, decode medical jargon, offer second opinions and help patients understand their options in plain language. It won't replace doctors, but it can finally level the playing field for patients, putting them in the driver's seat of their own care. Very excited for that. And also, that feels like something, I don't know, like, yeah, just like, I don't know. It'll be interesting to see if that manifests itself in Like all of this is like, will there be any fracturing in the actual product?
Speaker 2:Because right now, all the fracturing that's happening in the ChatGPT product is in like what model you're using. You're using agent or deep research. But so far, all the different They're all chats. Products. Yeah.
Speaker 2:They're all chats and all and and and none of them say this one's for health. This one and I'm in like a health a safe health territory. It's like that's all driven by the prompt. I would imagine that over the long term, everything's driven by the prompt. I would love to be able to go to Chatuchipati and just say, hey, quickly, what's the population of Canada?
Speaker 2:And it knows to use 40 for that. And then if I say, hey, I want you to give me a full report on the history of Canada. Give me a deep research report. I wouldn't need to select it. It would just know from the And
Speaker 1:go to ChatGPT agent, help me annex Canada.
Speaker 2:Then it just gives Don't mistake. Mistakes. Yeah. Don't mistake. And then and then it just keeps working.
Speaker 2:So the third one, she says creative expression. I believe we're all born creators and that the ability to imagine something and make it real is a big part of what makes us human. The problem is that our ability to express that creativity is often limited by our skill sets. Completely agree. I can't draw at all.
Speaker 2:Not everyone has the resources, time, or training to paint, write, compose, or build. When I imagine the future, it often comes to me in images I paint in my spare time. But the oh, gotta find some VG Simo originals. Why don't I hang them on the wall? This is interesting.
Speaker 2:Bull market. It's lore. But, the images in my head are much more realistic and complex than what I am able to paint today. Now, AI is collapsing the distance between imagination and execution. With AI and image generation, can prompt and iterate until the output matches the complexity and realism of the vision in my head.
Speaker 2:Unless it's a Where's Waldo. We gotta solve the Where's Waldo challenge.
Speaker 1:We do.
Speaker 2:It's it's coming for sure. The Where's the Where's Waldo eval for image generation. Today, nearly one in three Gen Z users say AI tools have helped them express themselves in ways they never could. So this is another fun, viral, obvious, valuable, like we know it, we love it, everyone's using ChatGPT for creative expression.
Speaker 1:Oh, yeah. And this presents a massive challenge if you are a chat g b a GPT rapper that's trying to go compete in the creative expression Mhmm. Space because you have to you it's not enough to generate a cool image or generate a meme. Yep. It used to be that if you could do text well, that would Yep.
Speaker 1:Maybe an advantage that people would use your product. But Yep. ChatGPT image generation has just gotten better and better and better. It's fantastic. If you haven't played around with it much, drop your your group chat.
Speaker 1:The the profile pictures of your most popular group chat. Put them in there and say make them all Giga chats.
Speaker 2:Yes.
Speaker 1:And then you can share Bodybuild. Yeah. For sure.
Speaker 2:Well, you start with generating an image in ChatGPT. Then when you're ready to go pro, you move over to Figma. Figma.com. Think bigger, build faster. Figma helps design and development teams build great products together.
Speaker 2:You can get started for free at figma.com. Fourth, she says, economic freedom. When people can independently create and capture value, they gain power over their own economic destiny. But starting a company isn't easy. The average cost to start a small business in The US is around $30,000, an impossible threshold for most aspiring entrepreneurs.
Speaker 2:Until recently, building a product or launching a service required technical knowledge, especially coding. That was a problem for hundreds of millions of people who had ideas for tools, apps, platforms, etcetera, that could have made an impact, but didn't they didn't have the technical skills to bring them to life. The classic ideas guy, I just need a programmer to build it for me. Well, now you can vibe code it. AI now gives the people the the power to turn ideas into income no matter their age, credentials, or ZIP code.
Speaker 2:A single person can now brainstorm, prototype, market, and launch a product with tools they control themselves. A a 2024 Shopify report showed AI enabled solopreneurs launched businesses 70% faster than peers without a tool without AI tools. I've seen it with my nine year old daughter who decided one day she wanted to a party planner for kids birthdays.
Speaker 1:Let's give it up for
Speaker 2:It's amazing. What a great story. In one weekend using AI tools, she created a fully functional website showcasing her party ideas, shared it with her peers and started taking on clients. Amazingly, my husband and I didn't have to help her. But we did have to intervene before the confetti cannons were ordered.
Speaker 1:Ben, good reminder, should get some confetti cannons.
Speaker 2:We do need
Speaker 1:to Except except last time when we had confetti cannons at YC demo day Yes. My eyes were in pain
Speaker 2:and You need goggles.
Speaker 1:Days and days. We need goggles next Yeah. Was there was so much dust in the in the confetti cannon.
Speaker 2:We left it all in the field.
Speaker 1:We did.
Speaker 2:We did. In the future, people will be able to build new things without waiting for permission, capital or credentials. This will, of course, will mean a meaningful shift in the workforce. Companies will hire fewer people. So you get more smaller companies.
Speaker 2:That seems pretty cool.
Speaker 1:Yeah. My my first real company, skateboard company Yeah. J Man Designs. Probably, I don't know if I would have done it if my my lovely mother wasn't a graphic designer.
Speaker 2:Helped out.
Speaker 1:And I needed a logo to print on the decks that I was getting made. And I just would sit with her and tell her, you know, do this, do that, do this, do that. And that's pretty cool that you can now just talk through that process in natural language and and
Speaker 2:Yeah.
Speaker 1:How many more people
Speaker 2:can do It was pretty crazy you ran a skateboard company without doing proper SOC two compliance.
Speaker 1:I know.
Speaker 2:You should've got on Vanta. Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process.
Speaker 1:Huge alpha in starting starting an extreme sports company and saying, look, none of our competitors are serious enough about this to
Speaker 2:get We take serious.
Speaker 1:To really take compliance and security Yeah. Seriously as you
Speaker 2:I mean, I do think for for for kids especially, I mean the the ability to just just use AI tools fully to go and solve problems and it's almost like your your Town's McKinsey consultant. I remember I had an early job of just like scanning photos for someone. They needed a whole bunch of photos scanned. It was like pretty manual labor, but like I I I actually wasn't that good at it. I kinda messed it up.
Speaker 2:There was like too much like the the the scanner wasn't configured properly. So a lot of us had to redo a lot of them. It was learning. It was learning process, but it's probably the first one of
Speaker 1:the first The small files I the only thing that that's maybe boring and repetitive that that you that that I can imagine you doing is the bench press. Oh, yeah. Should basically the same every time. But but yeah, those type of tasks I've always struggled with.
Speaker 2:But Yeah.
Speaker 1:I don't know that we're at a point. I still think if you were using I I don't think that I think that job still exists.
Speaker 2:I think it does. I think there are bigger companies where you can just, like, send in a ton of stuff and they'll just professionally scan it for you. But they're pretty expensive, I think. So I think the kids still have some alpha if your if your if your opportunity cost is low enough.
Speaker 1:After many school hours.
Speaker 2:Kids are. Fifth, she says, time. Regaining control of your time is one of the most liberating, empowering shifts a person can experience. The ability to control how you spend your time is often what separates people who feel in charge of their lives from people who feel overwhelmed by them. Wealthy people who have always bought back their time by hiring personal assistants, household staff, private tutors, chefs, and more, building full infrastructures to reduce friction in their lives.
Speaker 2:Meanwhile, the average household spends nearly twenty hours a week on domestic work, logistics, and errands. While leading Instacart, I saw firsthand how technology can shift perceptions and behaviors around time. In 2012, the idea of paying someone to shop for your groceries felt like a luxury, something reserved for the ultra wealthy. But with the right product design, logistics and pricing, we made it accessible and indispensable for everyday families. Today, the Instacart user base mirrors The US population with millions of families getting hours back each week to spend on higher value activity
Speaker 1:is will OpenAI build a gig worker network where when your agent runs into a wall and needs somebody in the real world to accomplish a task, will you be able to delegate tasks like that? Feels like a stretch, but I don't know. They could plug in to the Uber network or any of these other networks.
Speaker 2:Yeah. Maybe they'll I mean, they already have like an Instacart integration. So maybe they will they will rely on other gig work Platforms. Platforms to solve those problems and actually handle that side. And they will stay in the full Like the
Speaker 1:package package delivery where you can get an Uber to just pick something up and take it across town. Yep. You could imagine that that being integrated.
Speaker 2:Yeah. I mean, there's there there's a host of of of, you know, services and companies and APIs for shipping, mailing, moving things around, hiring someone. I mean, in theory, you could you you could hire a personal chef and be communicate your agent could be emailing with them and say, hey, you know, be here at this time. There's this party. Here's and it's kind of, you know, it doesn't need to be it doesn't even you don't even maybe need a gig work platform because the agent can go out and and scroll Instagram in theory, and find someone who's advertising that service or Google it and find a listing of local people providing that
Speaker 1:Yeah.
Speaker 2:That that that job and and and go and retain their services directly. Interesting. I believe AI will allow for a similar shift in many areas of life time consuming activities like researching decisions, planning vacations, scheduling a tutor, and more can be done by an AI agent than any that anyone can access as we build new products. We have a chance to make these time saving capabilities feel not only useful, but routine. In doing so, we can empower people to regain control of their time and attention.
Speaker 2:And I I certainly feel that something that I would need to sit down fifteen minutes looking for, you know, a new studio space or something, fire off agent and come back with some interesting results. Anyway, let me tell you about graphite. Dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 2:Get started for free. Graphite. Last one, support. For many people, the biggest barriers to progress aren't lack of access or opportunity, but self doubt, isolation, and burnout. Sometimes what's most empowering is support, someone or something that can help us reflect, feel seen, or simply move forward with clarity and confidence.
Speaker 2:My business coach Katya has been transformative in my career. I've joked with her over the years that everyone needs a Katya in their pocket. Personalized coaching has obviously been a privilege reserved for a few, But now with ChatGPT, it can be available to many. This is something I have not used. This feels like we're getting further out on the curve of like, you know, defining what the product is.
Speaker 2:Like knowledge retrieval is like so concrete. Generating image, very concrete. Now support is much more and it's much more of an amorphous product and there's some companies out there that are doing it right now. It's not a drop in replacement and and there's much more to define about what this product looks like or how people actually use this.
Speaker 1:Yeah. It's very general. There's gonna be vertical specific companionship products.
Speaker 2:Mhmm.
Speaker 1:Right? We've seen this. What's the founder that we had on the the replica original one started like a decade ago.
Speaker 2:Yeah.
Speaker 1:Grok Grok heavy four has their own There's also specific iteration.
Speaker 2:But then
Speaker 1:but then this is also to be clear. Yeah. The area of greatest concern. Sure. Right?
Speaker 1:Where it's very clear. If you have a business coach
Speaker 2:Yep.
Speaker 1:Telling you, John, you got this. You're incredible. You're built
Speaker 2:Probably good.
Speaker 1:You're built different. That's great. But then when you tell them that you've discovered, know, how to break the, you know, space time continuum and they tell you the reason. Right? Right now.
Speaker 1:You're right.
Speaker 2:You're good.
Speaker 1:You're absolutely right. You Call it
Speaker 2:two ones.
Speaker 1:And so I think they need to figure out the guardrails for this category and I'm sure that's top of mind for everybody at the company right
Speaker 2:now. Yeah. For sure. AI coaches on the other hand can be available throughout every day. She says, this isn't about replacing human connection but filling a gap that often goes unfilled.
Speaker 2:Many people don't feel comfortable opening up to family or friends, and most people don't have access to a therapist or coach they can call regularly. Even people who do have access often spend an hour a week or less with these professionals. At the core at the core of philosophy and religion is the idea of self knowledge. To become who we want to be, we have to understand who we are. So very interesting.
Speaker 2:Apple and F1. That's the story that we're talking about today. We've talked about this before. So F1, fantastic race series. We're big fans.
Speaker 2:But the actual streaming rights to the to the races has been kinda hotly debated. There was an article in the journal a while back that they were going to ESPN saying, hey, we want something like $80,000,000. And ESPN was like, I don't know if that's worth it. And we were going
Speaker 1:And they wanted something like 200.
Speaker 2:Yeah. Yeah. Yeah. They wanted a lot. And so, the the stack of of content to go through is growing.
Speaker 2:So we will be we will be thinning out Textbook. We will be thinning out the guest lineup in the future. But for today, we're going through. Let's kick it off with Ben Thompson. He had some good analysis here and has some some details from reporting The Athletic, which is a New York Times property.
Speaker 2:Formula one is trending towards choosing Apple for its United States broadcasting rights for our for 2026 onwards. The technology company's bid being in the 120 to $150,000,000 range.
Speaker 1:Market clearing order inbound.
Speaker 2:It's a market clearing order. Probably will clear. ESPN has held the rights since 2018, but its current deal is up at the end of the year. The sports media giant's exclusivity negotiation period period expired before February 2025 leading to interest from other
Speaker 1:including Netflix and TBPN.
Speaker 2:Yes. We would love to.
Speaker 1:We decided to sit it out.
Speaker 2:ESPN has remained in the mix for US broadcasting rights though its bid is lower. Apparently, ESPN's offer is in the $90,000,000 per year range.
Speaker 1:Which is still wild because this is The US broadcasting rights.
Speaker 2:Yep.
Speaker 1:And I believe in 2024, Formula One had around 1,000,000 total viewers. 1.2
Speaker 2:1,300,000 race viewers on average per race. Yep. But Ben Thompson puts it in a different perspective. He says f one on the other hand has a meaningful audience versus MLS, which was averaging around 200,000 viewers per year on linear TV before the Apple deal, and it and that wasn't growing. So this is six times as big as MLS.
Speaker 2:Yep. But again, there's I think there's more games than or more race more games than races. So it's not exactly Apple to Apple, but every race, but one has seen a year over year increase in viewership, so f one's getting more popular. A lot of that's driven by Drive to Survive. And this is the crazy thing.
Speaker 2:Given when races are televised, usually early Sunday morning, and the fact that they aren't promoted by ESPN in any meaningful sense, so it's not like you're getting the Pat McAfee show talking about, oh, you gotta tune in. A ton of coverage on ESPN throughout the week. They just kinda show up Sunday morning and people turn on the TV and they schedule it. And so you can he
Speaker 1:said I always like the timing because any any parents out there Yeah. You know, you're certainly not sleeping in on the weekends. Yep. Kids wake up.
Speaker 2:Yep.
Speaker 1:And I find it's it's a nice background noise or viewing in those early hours.
Speaker 2:For sure. And so he says you can make the case that f one makes its own audience which by extension means they will be able to pull people to a streaming service. Basically, one fans are strong enough that they'll go search it out. And when I when I was really getting into f one after getting into Drive to Survive, I was like, okay. I'm gonna have to subscribe to f one, the app that like jumped through all these hoops.
Speaker 1:That's on your phone.
Speaker 2:And it was yeah. It's it's it's like as many hoops as f as UFC, but people still do it. Yeah. And there's still there's still a big debate. But
Speaker 1:I think Netflix had done the analysis and realized that all of the potential viewers of f one were basically already subscribed to Netflix. Yep. And so, it didn't it it was a more difficult kind of equation to make work than someone like an Apple TV potentially that Yeah. That could potentially drive
Speaker 2:a new think someone called it a streaming backwater or something like that in here. We'll we'll dig into it. Somebody had some not nice things to say about about Apple TV. Although, I'm a subscriber, and I think it's nice. So he says, what makes this is Ben Thompson writing a Strictory.
Speaker 2:What makes this all work is the fact that for f one races, f one races are at the bottom of the funnel in terms of fan engagement. F one at least in The US has by and large grown its audience via Netflix's drive to survive. Netflix pays f one a pittance for rights, apparently single digit millions for that. But it's okay for f one because the way they ultimately make money is by Kurt converting Netflix viewers into race fans. So if you're f one, you see that as a marketing channel.
Speaker 1:F one has sponsors at the at the sort of league level and also the individual teams. All of those sponsors are getting more viewership and engagement through f one. Yeah. So it sort of added value to them and they don't have to pay. They're actually making money on I mean,
Speaker 2:not not super consequential. I wonder I I mean, of course, the sponsorships are like such like three sixty deals that it's like, you know, car livery and also a whole bunch of other you know advertising assets. But I wonder if they broke out, okay, how much lift, how much benefit, how many impressions are we getting from Drive to Survive? Would that be when you total up all the all the value add to all the different advertisers from being in Drive to Survive and being seen by people on Netflix, how much would would that be more than the couple million dollars that Netflix pays for the for the rights? It might be.
Speaker 2:It might be. Like, there's a lot of people that that see ads that are for specific f one sponsors in
Speaker 1:direction Aramco, like, hundreds of times
Speaker 2:During drive drive to survive. Exactly. Yeah. It's, like, pretty valuable ad space. So interesting deal that kind of works both ways and everyone makes money.
Speaker 2:Anyway, making that model work, however, means actually monetizing the races, means that it actually it's actually quite logical to go with the company willing to pay 30 to $60,000,000 more for those rights. You have to capture value somewhere in the funnel. Moreover, you can make the case that many f one fans aren't necessarily ESPN subscribers. And this is this is where it gets interesting because the cable bundle is shrinking and the the F1 did this global fan survey. So it's their data.
Speaker 2:So Ben Thompson's kind of taken it with a grain of salt, but this is from the F1 global fan survey. They they conducted a study every four years to track how fan engagement is evolving across the sport. They got a 100,000 responses from self identified highly engaged fans in a 186 countries. That's a that's basically all of them. The findings offer a detailed snapshot of the modern modern fan mindset and show that Formula One is increasingly attracting new younger and more female audience with growth in markets such as The United States.
Speaker 2:Gen z is helping shape the rhythm of modern of the modern fandom engaging with the sport more frequently and on a deeper emotional level. Female fans now account for three in four new fans.
Speaker 1:Interesting.
Speaker 2:I would not have predicted that. That's very, very interesting.
Speaker 1:Well, the drivers are often Chads. And I
Speaker 2:can imagine That's what's driving it?
Speaker 1:That that could be part of part of the factor.
Speaker 2:Yeah. It's also interesting that there there are no female drivers on the grid right now. There was Danica Patrick in the in the NASCAR series for a while. But somehow it's breaking through. Maybe it's through drive to survive being more accessible on Netflix, more storylines pulling people in, and they're just going down that funnel.
Speaker 2:I don't know.
Speaker 1:Well, there's also the the WAG industrial complex around
Speaker 2:one Yes.
Speaker 1:That is aspirational lifestyle.
Speaker 2:Maybe they should do a spin off of Drive to Survive. Don't they do that with NBA? Isn't there a a show about like WAGs or something like that? Maybe. That's kind of informally what the Housewives series is.
Speaker 2:Right? Maybe they should do that. With the largest country share of respondents, fans in The US continue continue to stand out for their growth youth and digital fluency. They over index on content engagement, sponsor responsiveness and daily touch points signaling a market where fandom is evolving rapidly and is commercially
Speaker 1:Saudi Aramco is like, why we seem to be getting a lot of female Zoomers. Female Zoomers. Zoomers.
Speaker 2:Buying Following
Speaker 1:our content on Instagram. They seem to be really into this. Yeah. What's happening?
Speaker 2:Maybe. I don't know. So so basically, Ben Thompson's conclusion from this survey is what what do you what are you talking about when you're talking about a younger, more female focused audience? Those don't sound like ESPN subscribers. Those actually sound like Apple TV subscribers or potential Apple TV subscribers.
Speaker 2:Certainly cord cutters, certainly people who are not going to buy a big cable package and get on ESPN two and Red Zone and all of that stuff. Yeah. That's typically the Gen X male, the maybe older millennial male that probably dominates the ESPN audience. And so
Speaker 1:Yeah. That's that's really interesting. Apple kind of has an edge where they can build out a service for some of these more lifestyle oriented sports. So these all alternative, you know, you could imagine them doing doing things in tennis over time because maybe that's a different audience than like the hardcore ESPN Red Zone subscriber.
Speaker 2:Yeah. Yeah. So he says, could definitely envision a scenario where f one not only doesn't suffer from being on a streaming service instead of ESPN, but it actually grows further. So this is an interesting bull case. Given Apple TV's lower price point relative to a standalone ESPN streaming service, much less a cable bundle.
Speaker 2:What is clear is that this deal certainly makes a lot of sense for Apple than the MLS deal did if the company can capture all 1,300,000 of those current viewers and they are incremental to current Apple TV subscribers, then the company will break even on this deal. Those are very generous assumptions, of course, but not nearly as generous as whatever assumptions drove the company to spend double the money on a sport no one watches, which is MLS. So he's he's taking shots at MLS because there was an interesting quote in here from from something else. What was this? It was from The Athletic again talking about the North American Soccer League general managers.
Speaker 2:One common theme from general managers, the Apple deal which is Apple's deal to to air MLS is proving to be too much of a barrier for new fans. Wait.
Speaker 1:They want the content to be completely free?
Speaker 2:New fans just don't want it on Apple apparently, or the GMs don't want to be limited to the Apple audience apparently. They want be on ESPN or something.
Speaker 1:Oh, okay. Okay.
Speaker 2:Apparently. So the GMs say, hey. If we want this to grow, we're the general managers of a bunch of different MLS teams. If we wanna grow soccer in America and grow MLS, change the format, change the salary cap.
Speaker 1:Why don't they just pivot to football or basketball? Baseball if they Yeah.
Speaker 2:What's wrong with just throwing around a pigskin? Yeah. Change the format. Just turn it into American football. I have to
Speaker 1:say a football is one of the best things you can buy under $50.
Speaker 2:Sure.
Speaker 1:Period.
Speaker 2:For sure.
Speaker 1:That's non non non food. I mean, the the the value you can get out of pigskin
Speaker 2:is absolutely insane.
Speaker 1:Hours of fun. The return on the return on pigskin.
Speaker 2:Yeah. It's fantastic. He says allow us to bring more attractive players. I I I didn't realize that MLS had a salary cap because I thought they were signing like massive deals with these like legacy famous
Speaker 1:players. Player that went to Galaxy?
Speaker 2:Messi or something?
Speaker 1:Yeah.
Speaker 2:Is that right? I don't know. Well, this is how this is bad because I don't know Out of our territory. Sports. But there was someone who went to Miami.
Speaker 2:There was someone who went to the LA Galaxy. I don't know. Anyway, this GM says
Speaker 1:Yeah. So so Messi plays for Inter Miami. Yep.
Speaker 2:And it's a huge deal. It's like AI researcher money, remember? That's what we were how we were comping it. And the GM said, but they also have to end the deal with Apple. It's bad for Beckham.
Speaker 2:David Beckham.
Speaker 1:Played in the MLS. Yep. You have Zlatan Ibrahimovic as well. So Mhmm. They'll pull in some superstars Yeah.
Speaker 1:But usually towards the end of their runs.
Speaker 2:So so so the GMs of the North American soccer league MLS, they say, I think we have to be on more linear outlets. We have to be on ABC, NBC, Fox, or more regularly more regularly because I think a lot of people a lot more people watched our games when we were in that space. I think Apple and the whole streaming thing is innovative, but it's probably where things and it's probably where things will be going, but I don't think MLS is the leader of that. I don't think enough has been put behind the subscription model. You're in a different league when you're you're a different league when you're a subscription based league.
Speaker 2:I don't think the effort has been put in like it should be. It's like selling tickets. You need people out there selling. You can't just hope that people are gonna sign up. And so, yeah.
Speaker 2:Interesting. The risk for f one is that the series which has massive massive growth is going to constrict its conscript itself to the streaming backwaters, says Ben Thompson, just so it can make a few more bucks in the meantime. So that that's the risk is that f one goes and, you know, gets stuck in subscription land and no one can just turn on the TV and see it and the 1,300,000 fans don't actually migrate over and they say, I'll just catch the highlights or I'll just watch Drive to Survive on Netflix instead of going set up setting up a new subscription. But if it's truly f one truly does have a younger audience, does have a more female audience, they might be that might be what gets them to turn on Apple TV streaming at least.
Speaker 1:Yeah. Anyway. I still get so confused by all the different cable plans. I watch f one on YouTube TV, which I guess is through Yeah. ESPN.
Speaker 1:It's like I guess that will go away and then I would have subscribe to Apple so they would get a net new. I actually don't subscribe to Apple TV.
Speaker 2:You don't? I don't.
Speaker 1:Okay. Not not for any reason. I just I never wanna I never wanna go through the I never wanna go through the I just don't watch a lot of television. Yeah. And I don't wanna go through the hassle of, like, signing up for a new service.
Speaker 2:Yeah. I feel like recently I got a new iPhone and it just, like, came with Apple TV plus. And I just, like, clicked the button and didn't unsubscribe, and then I've been on that for a while. So let's go over to, Ben Thompson talking about Google earnings. He has said, I've repeatedly laid out the theoretical case for why AI is potentially disruptive to Google, and we asked him about this when he came on the show.
Speaker 2:My question was, like, is there a world where where revenue and profit from from generative AI products is actually not as counter positioned against Google in the sense that, like, if they had launched the Gemini app first and become the ChatGPT, they'd probably be seeing a drop in search volume, but then also seeing revenue spike from an even more popular Gemini that's monetizing even better. And and was it a question of them just, like, not being able to take that pill or or was it more about, like, the risk and PR nervousness than
Speaker 1:The thing that Ben said that
Speaker 2:stood structural. Out
Speaker 1:that stood out to most the the most to me, and I'll probably butcher it a little bit. But he effectively was saying, it's really hard for companies to change who they are. Yeah. When you look at Google's mission statement to organize the world's information and make it universally accessible and useful, that is so deeply aligned with AI. Yep.
Speaker 1:It's like what does ChatGPT do? Like organizes information and makes it useful, right? Agents like ChatGPT agent is making that information useful. Yep. And so it just feels like again, generative AI is like deeply aligned with the core mission And so it's easy to see, you know, them continuing to win here.
Speaker 2:Yeah. I I I think the the problem is is, like, the, like, disruption comes when you create a product that is not as good, but the financials are structurally different. So the idea of, like, if AI disrupts, like, a law firm, you look at this product or even, like I don't know. What what what's the classic example of of of disruption that people go through? I don't know.
Speaker 2:But, like, the the this idea of,
Speaker 1:like Yeah. The big thing was innovator's dilemma.
Speaker 2:Right? In the innovator's dilemma, the example is, like, a new product comes to market that does something 90% as well. And so it's like unacceptable to the people that are buying the current product. But then over time, it gets better and better and better until it replaces the current product. And so there is a world where if they had just changed the the Google search bar to just be like, this is just an LLM now, people would have been really, really disappointed with that shift, and they would have been like, I want to go back.
Speaker 2:And ripping that Band Aid off to the tune of, what, $300,000,000,000 a year in in search revenue would be really painful. So they had to take a more a more iterative, like, step wise improvements, but it seems like they're doing well. And Ben Thompson is kind of echoing this. He says, once again, and however, I have to come to Google's defense. All available metrics suggest that the company is doing quite well.
Speaker 2:Indeed, would go further. You can make the case that the company's biggest mistake is not going harder. And so they flip the switch on cloud. Their infrastructure spending is through the roof, as we mentioned. So in in after the q four twenty twenty four earnings and their announcement that they were spending 75,000,000,000 on CapEx, then Google Google Cloud's revenue numbers disappointed, but this was because they didn't have enough GPUs and they were actually constrained.
Speaker 2:So they they missed on top line. Like, didn't bring in enough revenue, but their margins actually improved. And so what that means is that there was so much demand that they had pricing power. And they could say, no. We're not giving you any discounts because everyone wants these GPUs right now or the TPUs.
Speaker 2:They want our infrastructure, so we don't need to we don't need to sell them at a discount. And so their margins were really good, what that revealed was that they were they were capacity constrained and that justifies the bigger CapEx spend that they're going into right now.
Speaker 1:And Google is still the polymarket which company has the best AI model end of twenty twenty five. So December 31, there's been one and a half million of volume and Google is still sitting comfortably at 46% chance of being at the top of LM Arena at the end of the year.
Speaker 2:Yeah. This is this is such a crazy supply constraints metric. So the Google CFO Anat Ashkenazi said on the earnings call, in cloud as I mentioned, the demand for our products is high as evidenced by the continued revenue growth and the cloud backlog, guess how big their cloud backlog is? Just the demand for for Google Cloud products that they can't fulfill because they haven't built the data centers. Like, but if they had more capacity, they think that they could deliver this.
Speaker 2:A $106,000,000,000. That is so much money. Great. Honestly It's so
Speaker 1:much more businesses should try to put themselves in the position
Speaker 2:Yes. When they have the It's a
Speaker 1:little 60 bit billion of demand that they can't.
Speaker 2:106 106,000,000,000.
Speaker 1:We try to not give business advice because it's so Yeah. Fraud. Well, it's just it's just like every business is different. Every every founder's different. Yeah.
Speaker 1:But in general Yeah. If you can develop a a a demand
Speaker 2:It's a good call for like a YC company. Like, if you go on stage at demo day and you say like, yeah, we have LOIs and we have some demand backlog.
Speaker 1:We have a $106 billion. Of demand that we're unable. There was actually a YC company yesterday Yeah. Or or two days ago that that was getting a little bit roasted because they were like, they launched a product and they were like, wow, today was insane. Our servers our servers went down immediately and you could see the user chart and they had like 250 users.
Speaker 1:And so people are like, wait, like your entire product your went down on 250 users.
Speaker 2:That's ridiculous.
Speaker 1:Anyways, but happy happy for their success.
Speaker 2:Yeah. Well, let me tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free at figma.com.
Speaker 2:And so this so he keeps going into the CapEx.
Speaker 1:Wait. Before we do that, Figma make is generally avail available Yeah.
Speaker 2:You can
Speaker 1:go to figma.com/make and just start building various products. Tyler has been using Figma make to make a product that we'll be releasing very soon. Very excited for that.
Speaker 2:We will we will announce that soon. So from the earnings call, given the strong demand for our cloud products and services, we now expect to invest 85,000,000,000 in CapEx from '25 2025, up from a previous estimate of 75,000,000,000, just a 10,000,000,000 incremental investment. Absolutely massive. Our updated outlook reflects additional investment in servers, the timing of delivery of servers and an acceleration of the pace of data center construction primarily to meet cloud customer demand. The challenge Pichai cautioned in an answer to an analyst question is that it takes a while for these investments to come on board.
Speaker 2:So of course, the risk is like you overbuild, but there's certainly no evidence of that given the massive backlog. So the other interesting thing that Ben dips his toe into. So Ben Thompson, Mr. Techery, famously does not get caught up in trade deals and non CEO employee shifts.
Speaker 1:They're below his line.
Speaker 2:They are below his line. They're below his line. But he had to chime in on the CFO change that happened at Google. So he says, I'm always hesitant to delve too much. I like that he's throwing in a delve.
Speaker 2:You know it's not written by a
Speaker 1:It's bait.
Speaker 2:But he's baiting. Yeah. He's baiting for sure.
Speaker 1:He's like how dare you accuse. Yeah. He's like you can go back and look at how many times I've used
Speaker 2:I I Dell. I coined that word.
Speaker 1:There's there's a there's a there's YC company called Dell
Speaker 2:Oh, yeah.
Speaker 1:As well that's So doing
Speaker 2:he says, but it's interesting that the goo that the earnings call was Ruth Parrott's last one as CFO. Parrott earned a lot of plaudits for getting Google spending under control in the late twenty tens, but what seems clear in retrospect that is that 52,500,000,000.0 that Google spent on CapEx in 2024 was too little. And so he's kind of like, you know, noodling on this idea that maybe the CFO was too cautious going into an AI boom.
Speaker 1:You could lose your job over that.
Speaker 2:Called a maybe Ruth Perrott was calling top signals like us. It looks terrible. Fortunately, we don't lose our job when we
Speaker 1:get nothing wrong with calling top signals.
Speaker 2:There there there's something wrong under investing.
Speaker 1:Water if you're calling specifically calling the top. Yes. Trying to identify top signals is more of a meta game.
Speaker 2:Yeah. Yeah. Yeah. So so basically, Google, it it it does seem like Google under invested in CapEx in 2024 based on demand, wound up with that massive backlog, missed on top line, couldn't couldn't make enough money, couldn't generate enough revenue, had higher margins, that's great, but but didn't deliver on the cloud side on on the actual scale. So Ashkenazi's Ashkenazi's calls, meanwhile, have repeatedly reiterated that Google Cloud is particularly supply constrained.
Speaker 2:They don't have enough servers, And the company has now surprised investors twice in six months with the scale of its CapEx plans. Let's go. It says, in my opinion, is incredibly bullish for Google. Go back to this, the disruption lens, which we were kind of noodling on earlier. The exact avenue from which you would expect management resistance to a disruptive innovation to flow is from the is the CFO office.
Speaker 2:Like the CFO should be resistant to disruptive innovation. And when you look at the history of companies that got disrupted, the CFO is saying, we have a good business. Let's just keep printing cash. Like this new thing, let's not worry about it. Let's not go
Speaker 1:Nokia CFO. Are you guys seeing the numbers?
Speaker 2:Yeah. But like for a lot of those companies that got disrupted, it's like they were printing cash, high dividends for decades even after the disruption happened. The next the iPhone comes out, and in order to actually do something to compete, they have to completely go into startup mode. They have to burn a ton of cash, cut their dividend, stop stockpiling cash, issue debt, do a ton, raise more equity maybe. Like, they have to become a new product development company and it would be very, difficult usually.
Speaker 1:BlackBerry's annual revenue in 02/2005, 1,900,000,000.0. They completely Blackberry's revenue in 2024, 580,000,000.
Speaker 2:It's a cyber security company now. They bought a couple cyber security assets while they were valuable, while they were like, you know, while the stock was up. And then eventually, they wound down the phone business and just kind of became a cyber security company. Because obviously, they had a ton of enterprise contracts because BlackBerrys were sold into like large enterprises as you know work phones. Very few people had BlackBerrys as like everyday phones.
Speaker 2:But so they had all those, they had like solid sales team, solid connections, bought a new asset and were able to continue the business even though obviously it's not the company that it once was. So Ben Thompson goes on to say there's a there does seem to be a major shift in mindset in terms of the company's willingness to lean into AI, particularly for a segment Google Cloud that even in the best case scenarios is significantly lower margin than the company's core business. What's interesting about that margin point, however, is that it too is another reason to be bullish on Google's prospects. Google is the only company we talked about the TPU thing. They're the only company with at scale ASIC alternative to Nvidia's GPUs which should give them a meaningful cost advantage to that end to the extent the cloud compute
Speaker 1:At scale to a point where they've they're gonna be able to support SSI. SSI. Which is crazy. Not just their own needs.
Speaker 2:And then and then there's also another question in the yeah. Sorry.
Speaker 1:The dynamic that's interesting is, like, OpenAI needs to massively scale infrastructure. And and as we covered earlier this week, commit to spending tens of billions of dollars with with Oracle. Yep. And their revenue today doesn't support that. Obviously, their their growth trajectory is absolutely insane.
Speaker 1:But OpenAI being in a position where they are competing head on with Google for this very, very critical consumer use case, search knowledge retrieval
Speaker 2:Yep.
Speaker 1:And ultimately usefulness. It is a extremely tough position for OpenAI to be in.
Speaker 2:Yeah. So the other hyperscalers are working on ASICs that are alternative to NVIDIA GPUs, but they all seem to be following the similar path, trying to get line time at TSMC, not fully at scale. Then there's also the question, you know, I think a lot of people's mind is like, is this the end of history? Is there something that's coming down the pipe that could disrupt the NVIDIA GPU monopoly, the CUDA ecosystem, or even the Google TPU? And semi analysis has a funny meme here, way down in the stack, about the next generation of chips that were that that have been pitched from startups like Etched and a few others.
Speaker 2:So Semi Analysis says, although baking transformers into silicon may sound cool, it's most mostly just a marketing slogan. 90% of transformers, flops, are just GEMMs and two fifty six by two fifty six or one twenty eight by one twenty eight systolic arrays in TPU and in TPU trainium are already optimized for these. Even modern GP GPUs with tensor cores are optimized well for GEMMs. Even if you bake transformers into silicon, aka just create a giant systolic array, most of your die area will still be taken up with SRAM cells, that's the memory, and you will still face the memory wall since your HBM memory bandwidth will be the same as GPGPUs, TPUs, and Tranium. And so the meme is transformers are just 90% matmoles.
Speaker 2:George Hotts had a similar analysis or take just saying that if you look at the actual energy use of GPUs right now, there isn't that much opportunity to squeeze more value out of them. They're pretty efficient, and most of the most of the energy that goes in goes into these very, very specific math calculations that are already pretty optimized. We did hear from someone something about the This is from Martin Scarelli that Jane Street or was it was it Jane Street? One of the high frequency trading firms figured out how to run one of those very, very basic map mole calculations on a GPU more efficiently, and I guess kind of open sourced it or something or got out into the into the research world. So it it doesn't it doesn't feel like at this moment I still think that there's a interesting bull case for the etched crew in some ways, in some niches or something, some specific models.
Speaker 2:But it doesn't seem like there's some new disruptive chip architecture that's gonna come out and and obviate the need for both NVIDIA GPUs and Google TPUs. And so Google's very well positioned as Ben Thompson is writing. So he says this should give them their position that they have an at scale ASIC alternative to NVIDIA GPUs should give them a meaningful cost advantage to that end to the extent that cloud compute becomes commoditized is the extent to which Google actually has a margin advantage. Because if all of the clouds are commoditized, but all of them are on NVIDIA, and then Google is taking the NVIDIA margin basically from their TPU, they should be in a very good spot. This is to be sure a bit weird.
Speaker 2:Parrott gained these plaudits those plaudits because there was so much waste in Google to cut which was downstream of the company's amazing monopoly and margins and search which hardly seems like the recipe for a structural cost advantage. But here we are.
Speaker 1:Sundar is gonna tell every employee, we're cutting your daily massage allowance from three massages down to one. We're deeply sorry, but we need to get fit.
Speaker 2:Gotta get fit. And you gotta get on Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a company. It was great
Speaker 1:talking with Christina yesterday. She's an absolute dog.
Speaker 2:Boardroom general.
Speaker 1:Boardroom general.
Speaker 2:She put the KPIs in orbit.
Speaker 1:She she really has.
Speaker 2:She really has.
Speaker 1:Did you see that?
Speaker 2:Did you see that? Has it. The Reed shirt?
Speaker 1:Yeah. The Reed. This chart she says It's just the Andrew said Christina often talks about stacking rice on the chessboard. Yeah. And I didn't see this until after the show but
Speaker 2:I was
Speaker 1:like it seems like you guys are just chopping wood. Yeah. Just out there like
Speaker 2:That's what it is.
Speaker 1:Putting in the work.
Speaker 2:Just you know, couple percent here, couple percent here. Just very consistent growth, very consistent growth, very smooth growth curve into a monster of a business. So, congrats to everyone over at Vanta on the new round. And we will go back to Google. So, more broadly, the way in which Google seems to have flipped the switch in terms of going all in on AI along with Meta's spending on AI talent really does strongly suggest that AI in the end is a sustaining technology that favors the incumbents most of all.
Speaker 2:Both see a line of sight to new revenue streams and critically, both can fund AI from profits, not speculative investment or debt. And of course, have distribution including search. Sometimes the Empire Strikes Back. I love that. So there were other takes from from search.
Speaker 2:You'll have to subscribe to Certikari to get the full analysis. You gotta go and subscribe to Certikari. If you're not subscribed, what are you doing? But the interesting takeaway from from search is that there it seems like Google's being a little squishy about, hey. We don't wanna report certain KPIs anymore.
Speaker 2:So they used to report paid clicks, and now the chief business officer, Philip Schindler, is saying and and on your paid click question, look, to be very clear, I think we said this before. We manage the business to drive great outcomes for our users and attract our attractive ROI for our advertisers. We don't we actually don't manage to pay clicks or CPC targets, which is fair and good. But it's funny because Ben Thompson's like, but I want that data. That would be helpful to me.
Speaker 1:I mean, when a business has a metric that they tell you is important for a long time and then they suddenly tell you it's not important.
Speaker 2:Don't worry about it.
Speaker 1:You gotta
Speaker 2:It does make sense. They're a huge business. They moved on to to bigger and like higher levels of abstraction.
Speaker 1:Look at the growth in tokens. Yeah. Yeah. But Don't worry about anything
Speaker 2:else. What what he says is that there are there are product changes and policy changes that actually drive better monetization but at the expense of paid clicks and that's probably AI searches and stuff like that. You'll see in the 10 q paid clicks were up 4% year on year, but a number of factors affecting this these metrics from quarter to quarter such as advertiser spending, product changes, policy changes, user engagement. So it's really important when it comes to pay clicks and CPC to avoid drawing overly broad conclusions solely based on these metrics. Don't put me in the truth zone on this, he says.
Speaker 2:So Ben Thompson, this is exactly what you said. I don't even think you you pre read this but you basically have Ben Thompson working in your head because
Speaker 1:This is what I said when Ben Thompson came on the show. I was like, I think your way of thinking has been so ingrained into my mind Yep. That I I that I have an original thought and you've already thought it.
Speaker 2:Okay. So this is what he says and it's literally I haven't read the article. It says, the more that management tells me not to pay attention to paid click rates, the more I want to pay attention, which is exactly what you just said. Regardless, once again, the fact that paid clips paid click pay clicks were up 4% and search revenue was up 12% makes it clear that search growth is primarily being driven by higher prices. And so the actual number of clicks is up 4%, but revenue is up 12%.
Speaker 2:That means that they're monetizing each click better. But people are obviously gonna read into, oh, paid clicks aren't growing that fast. Like the actual pie isn't growing that fast. They're just getting like it's basically like, you know, once Instagram reels is is popular, everyone's watching it, then you just gotta put more ads in the feed. Right?
Speaker 2:And that's kind of that seems like what they're doing and that's what's driving search revenue up 12%. AI overviews is another question. This is a funny one where basically the the chief business officer Philip Schindler at Google says basically says that AI overviews are monetizing as well as other Google searches. And Ben Thompson says given the fact that the vast majority of Google searches don't monetize at all because people just click on a link.
Speaker 1:That's what I was about say. Oftentimes searching for information that you can have very low purchase intent.
Speaker 2:Right?
Speaker 1:Yeah. Like, how many times a day do I search for a specific fact
Speaker 2:Yep.
Speaker 1:And never would have you could show me the best ad in the world and I wouldn't click through because I'm just looking for a
Speaker 2:Yep. So if you're looking for something like, you know, Hulk Hogan's age, that's not a that's not a purchase intent. If that comes from an AI overview or it comes from a you know how they used to have those, like, knowledge boxes or, like, we would pull from Wikipedia. Or if you click on Wikipedia, none of that is making Google any money. So it really doesn't matter the UI or the actual underlying technology to get you that answer.
Speaker 2:And then Gemini is on absolute tear. Really remarkable. How how many monthly active users do you think the Gemini app has? These are MAUs, not DUs.
Speaker 1:On the mobile app? Web app?
Speaker 2:Gemini app. Combined? I think this is probably across mobile web and desktop but I would assume mobile.
Speaker 1:520,000,000.
Speaker 2:Oof. Big. Right? And it that's doubled
Speaker 1:signed like, I guess I get I mean, they kind of get the it's kind of a they have cheat code because everybody already has a Google account so they're like Yep. Signed in. Yep. But in in term I I don't know.
Speaker 2:They're monthly and and what we know from semi analysis is that they're not taking share of queries that much but 450,000,000 downloads on an app and monthly active users is pretty pretty high. And so Yeah. If there's if there's a world where Google can build business around if they can bring in ads faster and keep the Gemini app cheaper and offer better better products and like you get deep research, you get agent, you get the $200 tier, the ad free if if OpenAI and ChatGPT has a $200 tier that's ad free and then Google's giving you the same product and the same experience but with ads for free, like that feels like an Android IOS battle going on. That feels like something that could actually be pretty sustainable and kind of drive this like little bit of a duopoly. Don't know.
Speaker 2:We'll have to see how it goes. But daily requests grew over 50% from Q one to Q two. And I think everyone everyone is is pretty surprised by that. And I was also surprised when I went and pulled up the the Gemini app. When I went to go download it, the number of five star reviews is like hundreds of thousands.
Speaker 2:And I was like, okay. This is very serious. And that reflects the actual number that they shared, 450,000,000 monthly active users. So still a lot of work to be done. I was very frustrated when I went to go get v o three.
Speaker 2:I got the Gemini app and they were Are they already having it? I couldn't access it.
Speaker 1:Is Gemini some frustrations default in in Android yet?
Speaker 2:I don't know. I I imagine that it has to be preinstalled in the next round of Android phones that go out. Why would you not want that preinstalled in in there? But I don't I would be surprised if that's what's driving it because, I mean, how many Samsung Galaxies have they sold in the last quarter? Probably not 200,000,000, right?
Speaker 2:I doubt that that's what's driving the growth. But maybe that might be an interesting thing how many of them are pre installs, preloads. But even then you have to open it to become an MAU. But yeah, maybe maybe they're testing. Maybe people will churn and go back to OpenAI and GPT.
Speaker 1:Android users have had access to Google Assistant for a long time. Yep. That's getting phased out.
Speaker 2:Yep. It's just
Speaker 1:gonna be Gemini.
Speaker 2:Yep. Intel now expects to have 75,000 employees at year end down from 116,500 in June. That's basically one year ago. That's a massive cut. NVIDIA is on the other side of the trade.
Speaker 2:Nvidia CEO said they now have 42,000 employees yesterday up from 36,000 in January. Massive shifts. It's crazy to think about the market cap per employee difference there. It's pretty remarkable. If you're cutting costs, gotta get on ramp.
Speaker 2:Time is money save both. Easy use corporate cards, bill payments, accounting and a whole lot more all in one place. So the news is Intel that has a
Speaker 1:ramp problem.
Speaker 2:Yeah. They really should get on ramp. Lip Buuton. I know you're listening. You should get on ramp, Lip Buuton.
Speaker 2:So this is from the Wall Street Journal, the business and finance section. Intel is going to lay off 15 of their workforce. Chip giant stands at a strategic crossroads. The CEO warns no more blank checks. Intel detailed dramatic steps to revive its sagging fortunes outlining layoffs for 15% of its workforce and scrapping plans to spend tens of billions of dollars on new chip facilities in Europe.
Speaker 2:Oh. Bearish for Europe. I didn't realize that was going The chip making giant said Thursday it would refocus its strategy on the highly competitive market for AI chips, regaining market share in personal computer processors, and developing its advanced 14 a technology to sell to large customers. It's like, okay. We're gonna we're gonna narrow down.
Speaker 2:We're just gonna do three incredibly difficult things. We're gonna compete in in the most aggressive AI chip market where we're not just competing with NVIDIA but also the TPU from Google, all the upstarts, Grox, Cerberus, all these different companies. So we're gonna like go from zero to one there and then we're also gonna turn around our our personal computer processing market. Bold. Bold.
Speaker 2:Intel which has long dominated the business of making chips for laptops and desktop computers fell far behind competitors like NVIDIA, AMD, and TSMC after it failed to anticipate the surge in demand for the powerful chips fueling the artificial intelligence boom. Lip Bu Tan, the CEO, the new CEO of of Intel after Pat Gelsinger stepped down about a year ago, I believe, said there are no more blank checks, he wrote in a memo. Every investment must make economic sense. Love to hear that. Exactly what you want to hear
Speaker 1:from us. Nominative determinism of lip Bhutan. Hate to put you on the spot.
Speaker 2:Hitting the beach getting a tan. I like that.
Speaker 1:I can see it. I can see it.
Speaker 2:Maybe if Intel doesn't work out he can get into cosmetics. It's like get a tan Lip this tanning oil. Get some lip balm lip balm tan.
Speaker 1:Yeah. There's something called lip blushing where I think it's like a mild tatt oo. So maybe if this whole Yeah. Semi thing doesn't work out Yeah.
Speaker 2:He Call could get
Speaker 1:a little lip blushing franchise game.
Speaker 2:Yep. I I agree. Revenue in the June was roughly flat at 12,900,000,000.0 beating Wall Street's expectations. The quarterly loss though widened to 2,900,000,000.0 for the quarter from a 1,600,000,000 loss in the year earlier period. The results represent the company's sixth consecutive quarterly loss extending its longest streak in thirty five years.
Speaker 2:It's got to suck to be in a position where computing broadly, computers are doing incredibly cool things. AI is magic. We passed the touring test and you're not a beneficiary. You're losing money and it's because of a bet on, you know, the server and these large scale CPUs and not getting into GPUs and then missing mobile. There's a whole bunch of things that went into it.
Speaker 2:So sales in Intel's PC chip division, the company's largest segment, fell 3% from the year earlier period. I remember about a decade ago, I built a new you know massive PC rig to do CGI rendering on it. Intel was Sure, gaming John. Rig? I did use it for a gaming rig.
Speaker 2:That's John's vice.
Speaker 1:Yeah. John's vice. He said you This
Speaker 2:is market research. I need to understand what the gaming markets going. I need to understand the future of VR. Think
Speaker 1:I think you you beat your video game addiction
Speaker 2:I did.
Speaker 1:At young age.
Speaker 2:Years. And so it's it's an interesting time for Intel. We I have some more more information here.
Speaker 1:Do you remember six months ago there was the rumors floating around that that Elon was was a potential buyer I was deal so long ago.
Speaker 2:I was propagating those rumors. Yeah. I was I was
Speaker 1:And ultimately it feels like, you know, he he got the got the fun experience of a turnaround at Twitter. Does he wanna do that again? Yep. I don't know.
Speaker 2:I mean, my take when when he bought Twitter and turned it into X was that it was exciting. I thought that he could make it a lot better. He has in many ways made it a better product. We stream on it now and and it feels like it's still a vibrant community and there's a whole bunch of new features, good stuff, bad stuff. But overall, I think he put the company back in startup mode.
Speaker 2:They're shipping very quickly. Interesting things are happening. He's making plays in an interesting way that I like. But at the time, was like, okay. $44,000,000,000.
Speaker 2:There's something like $50,000,000,000 from the Chips Act maybe going to Intel and foundries in America. Run this back and marshal the same amount of capital. Let him buy Intel, turn that around. That feels like something that Elon would be uniquely equipped to turn around. It would put us on a very different path if he got into semiconductor manufacturing.
Speaker 2:But it would be a huge challenge and maybe it wasn't as important to him. So I don't know.
Speaker 1:But I mean only a week ago, a small company called AOL Yeah. Aol.com
Speaker 2:I think
Speaker 1:he's was posting that is Elon Musk about to buy Intel. So this feels like very you know Dylan Dylan Patel on January 17 saying Elon's jet is in Florida, GlobalFoundry's jet is in Florida, Qualcomm's jet is in Florida. And but ultimately a lot of people were in Florida at that time.
Speaker 2:Well, if your jets flying around the world, you gotta take your jet to a wander. Find your happy place.
Speaker 1:Find your happy place.
Speaker 2:Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better folks. And so, Dylan Patel, speaking of Dylan Patel, he actually hung out with Lip Bu Tan at a conference and he has this hilarious story where he clearly wanted to meet Lip Bu Tan and spend some time with him. And everyone's coming up to Lip Bu Tan asking what the future of Intel is. And so, he goes up and offers to make him tea and makes his tea for him.
Speaker 2:And they sit down and they have tea. And they like and I I think Dylan Patel really understands like tea culture and knows what makes for a good cup of tea in the same way that someone like a coffee snob knows about good coffee. So they they have tea and he and Dylan Patel is kind of picking his brain and and it just feels like Le Bouton's overall goal is just layoffs, reduce cost, right the ship, refocus. And so what's interesting is that we talked to Ben Thompson and I wanted a clear I wanted a I wanted a clear narrative. I wanted something like, oh, it's obvious.
Speaker 2:Just split the foundry and the design business. Split up Intel into two companies and that will solve all the problems. But everyone seems to agree it's more complicated than that because part of Intel's foundry business is that they design their own chips. And so they're both their customer and their supplier and breaking those up might be more difficult. It's not a cure all.
Speaker 2:It's not a panacea. And so, it is more complicated. So there's not a super clear path forward. It's a lot of hard decisions. It's a lot of cuts to employees and that's what we're seeing today with the 15% layoff.
Speaker 2:There will probably be more in the future as Intel continues to downsize the workforce.
Speaker 1:Really really rough for morale knowing that the workforce will just be, you know, continue to get cut into, you know, like you said, probably not the last.
Speaker 2:Yep. And so they are focusing on the the the direct quote is refocus strategy on the highly competitive market for AI chips, regaining market share in personal computer processors, and advancing the 14 a technology. Now the problem is that Intel is still more expensive than TSMC on a normalized per wafer basis. This comes from this comes from semi analysis. So they have the Intel three node, the 18 a and that goes up against the n five, n three and n two nodes from TSMC and across the board Intel is more expensive on a per wafer basis.
Speaker 2:So this is at their own fabs. They're trying to catch up. Trying to create chips that are that are as as powerful but the name of the game is always cost.
Speaker 1:Yep. Yes. Semi analysis says the company has cost discipline in its DNA talking about TSMC. Intel not necessarily. This manifests in many ways.
Speaker 1:TSMC has more aggressive cost down targets and exercises its leverage on suppliers. It has not used the copy exact dogma that creates unnecessary overhead and resistance to improvements.
Speaker 2:Hence, Intel is now moving to the copy smart. Are you familiar with the copy exact strategy? No. So, when Intel built the original fabs, what they would do is they would build this I mean, it is a incredibly precise process. So you can think of lithography is basically etching.
Speaker 2:That's why that company, that semiconductor company is called Etched because they that you're etching grooves in a silicon wafer and that's where when you put electricity through it goes through a series of gates and that's what a semiconductor is.
Speaker 1:And that's how you create magic.
Speaker 2:That's how you create magic. Yes. It's the it's the spice. The the dune analogy is the most important one here. But basically, you have to etch these grooves at as small as its smallest scale as possible.
Speaker 2:So three nanometer silicon atoms are one nanometer. So you, in theory, cannot go smaller than one nanometer chip because the space between the atoms is only one atom or one nanometer. So, this is incredibly small. And so, you basically have to shine like a laser or some sort of light or some sort of radiation to actually etch into the silicon to create the grooves, basically. This is very, very high level abstraction.
Speaker 2:But, in order to do that, they get these they get these mirrors from a company called Trumph which is unrelated to Donald Trump. But and and Zeiss makes these lenses and they focus all this stuff and this liquid tin gets like, you know, dispersed and then they bounce light off of it. It's this crazy process. The mirrors are so flat that if you if you if you if you like blew them up to like the size of the moon, you would still would not be able to see a groove even this hot. It's like the most precise process in every single
Speaker 1:By the way, Intel missed opportunity to create the TPU. Google's obviously owning that right now. But if Intel had said we're making Trump process.
Speaker 2:Yeah. That's back it.
Speaker 1:That's back. You know. I mean they're already public.
Speaker 2:Mean, know, what's the chip that's gonna be in the Trump phone? The golden the golden American made phone.
Speaker 1:Yes.
Speaker 2:Should be an Intel processor.
Speaker 1:Really should.
Speaker 2:Who knows?
Speaker 1:American made.
Speaker 2:So the the the semiconductor manufacturing process is so precise that apparently at TSMC like if there's an earthquake or anything like that, everyone they don't even need to send out a notification. Everyone just knows go to TSMC to just deal with everything because the slight change in like the road noise or slight could like miscalibrate the machines. If it like rains too much, there will be extra salt in the parking lot that will get tracked in. Even when they go into the clean room, it'll get tracked in and the small sodium particles will throw off the yield. So all of this is about yield.
Speaker 2:They'll make a ton of these wafers. There'll be small imperfections. It ruins the whole wafer. That's been a big problem with the wafer scale.
Speaker 1:Which is why TSMC getting any yield in Arizona despite setting up, you know, this new facility so recently
Speaker 2:un American. It's a miracle. Yes. And so the copy exact dogma it is so hard to build a fab that manufactures semiconductors reliably at good yields that when Intel figured out how to make one fab, they said, let's make a second and let's change nothing. And so they build a building.
Speaker 2:They build the exact same foundation. They build the the bathrooms would be in the same place if there was two urinals in one bathroom like there would be two urinals the other one. Like everything was exactly the same
Speaker 1:copies Extremely superstitious.
Speaker 2:Yeah. Basically. Because they were like anything that changes like if the water flows through the pipe in the bathroom at the wrong flow rate, it might throw off the amount of molecules in the air over here and the atoms over it's like it's crazy precise. Right? And so that worked for Intel, but it had this problem which was that every once in a while, you do want to make an iterative change when you're building the next fab and you do want to increase yield by maybe not copying exactly and doing things a slightly differently.
Speaker 2:And so now Intel's pivoting to copy smart, only copy what's actually improvement instead of just copying everything exactly. And TSMC has never held themselves to that same standard. And so customers are likely baselining the 18 a Intel node against N3, three nanometer nodes at TSMC given the characteristics. But Intel will have to be aggressive on pricing if they want to compete because they are not competitive on the actual cost of the wafer. And so they would need lower margins if they want to compete.
Speaker 2:And so you can think about Intel as having kind of like three feature products that people are focused on. It's Intel three which is their five nanometer class. That one is fabbed in Arizona and Oregon and Ireland. These are at Intel facilities. Intel also has the Intel 18 a which is at the same sites plus Ohio and this is competitive with the two nanometer class from TSMC.
Speaker 2:And then they have the 14 a which is supposed to be 1.4 nanometer or below. This is the most cutting edge extreme ultraviolet really really aggressive lithography and and this is also made in America which is great. And these will compete with NVIDIA's Blackwells and then the next generation Blackwell successor. And so they're going head to head but the real question will be can they go head to head and still squeeze out a decent margin because the the NVIDIA TSMC partnership is really really strong. They both have good margins and they've really optimized for cost and reliability and yield and Intel has kind of lost a step there.
Speaker 2:And so, they will probably need to get on linear to make this work. Linear is a purpose built tool for planning and building products, meet the system for modern software development, streamline issues, projects and product road maps. So Lip Buuton, if you need an intro to the folks over at linear
Speaker 1:Reach let out. Us know. Will make it happen.
Speaker 2:Reach out and and we'll figure it out. So And
Speaker 1:Intel is of course down almost almost 10% today. Mhmm. Market is not loving much of anything happening over there right now.
Speaker 2:Yep. So semi analysis continues saying, Intel the home of Moore's law. Gordon Moore of course worked at Intel and coined Moore's Law. The idea that the number of transistors will double every few years on on a silicon chip allowing for more compute power basically at the same price. They're they're evaluating if it will continue at the leading edge.
Speaker 2:This is this is what moves the stock in my opinion more than the 15% layoff. The layoff seems like reasonable downsizing but deciding, hey, we're not even gonna compete on the on the most advanced semiconductors which is what Elon, Google, Anthropic, Sam Altman, know, every single company is like give me all of the best and give me hundreds of thousands of the best. The rest of the stuff is like, okay. I'll go to anyone because I need a you know WiFi chip in my toaster. So the quote from the 10 q, from Intel's 10 q is, however, we are unable to secure a significant external if we are unable to secure a significant external customer and meet the important customer milestones for Intel 14 a, we face the prospect that it will not be economical to develop and manufacture Intel 14A and successor leading edge nodes on a go forward basis.
Speaker 2:In such event, we may pause or discontinue our pursuit of Intel 14a and successor nodes and various of our manufacturing expansion projects. Just and semi analysis says, just like that we could be talking about a TSMC monopoly and the death of American made semiconductors forever. Very dark. Up next, have Casey Neistat. Recently
Speaker 1:The YouTuber. The creator.
Speaker 2:He's a now working on the chromatic, which we've been playing in the studio. Working on the m 64. How are you doing, Casey?
Speaker 1:There he is. Are
Speaker 3:Good to see you.
Speaker 2:Welcome to the stream. What's new in your world? How did the are those the Nothing Ear ones? Give us a little review.
Speaker 3:Oh, yeah. These are fantastic. I had to take them off because the noise canceling on these is it's it's, like, too good, and I'm at home right now, and my kids were screaming two seconds ago.
Speaker 1:Yeah. But,
Speaker 3:yeah, these things are fantastic.
Speaker 2:Yeah. We had Karl Pay on the show a week ago, and he put them down, and I was like I was too afraid to ask, like, oh, are those for me? Like, are you gonna leave those for me? I kinda want those. I need a new pair.
Speaker 2:I'll have to pick You know
Speaker 3:it is? I'm not enough of an audiophile to know what if something sounds good or not. Like, it's either good or it's not good.
Speaker 2:Yep.
Speaker 3:But physical switches, like buttons you can touch
Speaker 2:Yeah.
Speaker 3:I really like. And the like the Apple I don't know what they're called. What are they? Air pod
Speaker 2:Air pod maxes. Yeah. Pod maxes.
Speaker 3:There's no on off switch.
Speaker 2:Yeah. Like, I can't
Speaker 3:digital crown. I need an need an on off switch and these have that.
Speaker 2:I like I like the details. Yeah. Yeah. Are you are you a big teenage engineering guy? It feels like kind of like that that that they're almost coining like a trend that's like becoming more mainstream now.
Speaker 3:Teenage engineering is the only company whose products I buy religiously even though I have no idea how to use any of them.
Speaker 2:The same thing happened to me. I bought the little kids. It's like I'm a musician now. Couldn't figure out how to make a song.
Speaker 3:I use it.
Speaker 2:I love it. It's amazing.
Speaker 1:Looks good on a desk.
Speaker 2:Beautiful? It's so beautiful.
Speaker 3:Someone that cares that much about the craft. Totally. I wanna be part of that.
Speaker 2:Support them unconditionally. Yeah. So tell me about ModRetro, how'd that come together? What what what is the news in your world?
Speaker 3:You know, the mod retro thing's really funny because, I I my video says all this, but, like, I'm a big retro gamer. Mhmm. I'm guilty of sometimes playing Call of Duty on my Xbox, but that doesn't work out when you got a wife and kids.
Speaker 1:But being guilty. Every every man should have an allocation of time daily for Call of Duty. You know? Getting on Rust.
Speaker 2:Rust. Yeah.
Speaker 1:Getting on Rust with your boys.
Speaker 3:Yeah. He's so close to that w, and then the door comes fly open and children come running in. Yep. It's challenging. Yeah.
Speaker 3:But I'm 44. So, like, apex of video games for me was, like, 1989, I think, getting a Game Boy the first year they came out for my grandmother for Christmas. And, like, you guys are younger than me, but before that, all we had were those, like, l LED, LCD games that were, like, really janky, like the Tiger games, and they were terrible. And the first time I turned on the Game Boy and, like, saw the Nintendo come down, I was like, holy. This is such a moment.
Speaker 3:Yeah. And then Nintendo 64 came out when I was I was in, like, just getting into high school as a freshman. We used to sneak out of high school, get on the city bus, like, the the the regular bus, and then drive two towns across, and then walk a mile and a half to Toys R Us to sit in Toys R Us and play the demo of Mario 64 when that thing came out. I think it was in '94, so I was 12 or 13 years old.
Speaker 2:Yeah.
Speaker 3:So I I love that stuff. And Mod Retro, when I first learned about it, when I first learned about the Chromatic, their Game Boy Yeah. I thought it was really stupid. I didn't understand because you can get those, like, Chinese ones off of Amazon for $50. Yeah.
Speaker 3:And a friend of mine was like, no. This is great. They're doing great things. Do you wanna talk to Palmer about it? And I'm a huge Palmer Lucky fan.
Speaker 3:And I was like, I'd love to. And I don't know that I've ever been evangelized so much in my life. Like, by the end of that call, he didn't just convince me, but I was like I felt like an idiot for not seeing Yeah. What ModRetro was. And then as I got to know Torin, who who is the the CEO of ModRetro and understand the vision for the company, I was just so, like, overwhelmed.
Speaker 3:Was like, this is the most, like, beautiful vision ever. I don't understand the business of it. It makes no sense to me. But the fact that these guys have the guts to do this, like, can I be a part of it? And I think I pitched back to them what I understood the company was, and they're like, that's it.
Speaker 3:That's what we wanna say. And I was like, alright. Give me a job, and my job will be to figure out how to communicate that, and we'll make videos and stuff. And they're like, sure. But we're not gonna pay you.
Speaker 3:And I was like, great. I'll take a business card.
Speaker 1:Business card.
Speaker 3:Prices. Great working with I've also I'm an investor in ModRetro. I have a vested interest in them succeeding, but, I mean, that's not the that's not where the passion to be a part of what they're up to comes from for me.
Speaker 2:Yeah. So many places we can go with this. This is fantastic. What yeah. Do you think that there's a world I mean, I I love the handheld gaming stuff.
Speaker 2:I my my experience having kids was I stopped playing console games. The n 64 was actually my first console ever. And but once I What was your game? Super Mario 64 for sure. Golden eye was big.
Speaker 2:Big head Golden eye. Golden gun. You gotta do that. And then a couple other Donkey Kong and was never really into the Mario Kart racers but then Smash Brothers kinda took over and that was the real competition with everyone eventually.
Speaker 1:I think what I think what what's exciting to me is like building new new consumer hardware that will still turn on and work and bring joy twenty years from now. I had I had the the game, I have like my Game Boy Pikachu edition from growing up. And I when Mod Retro came out, I went and found it and I turned it on and it worked. Yeah. And that was like such an amazing moment for me because like when like I haven't, I've got old iPhones lying around.
Speaker 1:I've never been like not one, I've never been like, oh I should turn that on. It's gonna be fun. Yeah. Right? Because it's like it's not evergreen.
Speaker 1:Was of the moment and you just And move so I think if mod retro can do anything which is like make consumer hardware which is so disposable today across all these different categories and make it so that yeah, you're gonna get your mod retro or your m 64, you know, this year and then you're gonna turn it on in thirty years and like, you know, bridge generations.
Speaker 3:Yeah. Yeah. You know, it's I think there's there's it's easy to sort of shit on, planned obsolescence because it is real. I think of that like we woke up my house woke up this morning at 07:30AM because the refrigerator repairman finally showed up and was banging on our door at 07:30 in the morning. The dog was freaking out because our two year old refrigerator doesn't work.
Speaker 3:And this is a refrigerator that has WiFi.
Speaker 1:There we go. Let's give it up for WiFi.
Speaker 2:Everybody's always servicing everything. It doesn't work.
Speaker 3:It doesn't work. And when I think about that, it's like that refrigerator that we had as kids with the one big heavy aluminum door, like, it just worked. It worked forever. But in order to keep selling shit, you have to keep coming out with new things. And I think that's the negative of planned obsolescence.
Speaker 3:But I I think when it comes to consumer technology, there is an argument for having to keep up with the rate of innovation. You know, like, the new phones that come out, every time you get a new phone, it does do something that your other phone didn't. So there's a maybe a reason for that. But I think with that sort of tidal wave of innovation that feels faster now than it ever felt when I was young, I think we we lose some great things.
Speaker 1:Yeah.
Speaker 3:And, you know, my understanding of mod retro, at least what I want it to be, and I think what what what Palmer and and what Torin also want it to be is, like, let's identify consumer electronics that people just love. Like, had an unbelievable relationship with. They really like, the love I had for my Game Boy, I don't know that there was another thing that I owned through my adolescence that I treasured more than my Game Boy. And let's bring them back, and let's do them justice. Let's build them so they last forever.
Speaker 3:I think Palmer's quote when I was interviewing was, we don't wanna build another Game Boy. We wanna build the last Game Boy, like, last one that ever needs to be built. And that's the vision with m 64 as well. Like, you can get emulators that kind of they kinda work, but let's let's build the thing that that, you know, you and I had, John, when when we were kids, and let's have it last forever. And I, you know, I just think there's so so much romance in that.
Speaker 3:When you start digging deep, you can start to see products everywhere. And, you know, ModRetro's tiny. There's a couple people working out of a small office, but, like, the list of of products that that we wanna build, the list of ideas that we have is is endless. And that's like a that's a really exciting thing to take on.
Speaker 1:It's also such an interesting company because you're trying to recreate things of the past that were good products and you wanna improve on them, but you need to stay true to the original product. Otherwise, you what do you I mean, it's not to say that that Mod Retro couldn't one day create novel, totally novel products. But Mhmm. It is like an interesting constraint and challenge and you actually have to, it's it's really it's in some ways it's easy because you know exactly what you need to build, but in other ways it's harder because you're taking a product that was almost perfect in its original form and still like you need to make it it needs it should be better. Otherwise, you know, what are you doing?
Speaker 3:Yeah. You know, like, one interesting challenge, and I'm not the right person to speak to this, so I'm not the technical guy, but to make the screen match the old Game Boy screen was an exhaustive process. So when you buy one of those handheld emulators that looks like a Game Boy, the Chinese made ones, they have fairly high high pixel density screens on them. So in order for them to give the look of an old Game Boy, you're using multiple pixels to emulate a single pixel. So it's inaccurate.
Speaker 3:And real psychopaths I'm not one of them, but I appreciate it. Real psychopaths on Twitter have done, like, this super zoom into a pixel, and you realize that Mario is, like, jumping a half a pixel too low or a half a pixel too high within the frame because of the limitation of the screen. And Torin and and Palmer's, like, religious obsession with matching that screen was one of the hardest things to overcome. So it's actually harder to build something that matched the quality of a product that's twenty years old than it would be to actually get the latest and greatest screen and just plug it in there.
Speaker 2:Yeah. Remember Palmer saying something about, like, a couple of the companies, the screen is actually rotated 90 degrees. So instead of the scan lines coming down this way, they go across this way and then they just transform it at the last second. But it's like this bizarre bizarre thing that you would never really notice of but it's this craftsmanship that actually you feel, I feel like. And it feels like something that's just like been lost in this like everything's disposable, everything's junk, everything's a knock off culture and it feels like I I don't know like it just feels like it's worth it to have stuff that exhibits craft and taste.
Speaker 2:And even if I don't, even if I'm not the one that can tell that Mario's one pixel too low when I do the jump, like the fact that the craftsman worked on the product means something. I I it's hard to put an exact like quantitative value on it, but it you feel it. Right?
Speaker 3:That that is the gamble that is the company. Palmer said that in in my video where he's like, you know, maybe nobody cares about this, but but weirdos like you and me, but that's enough. And I think it's like there is an argument that's like, well, who cares if it's off by half a pixel? And if you're one of those people, totally cool. You're well there's plenty of products in the market for you.
Speaker 3:But if you're someone who does care, if you're that weirdo that buys teenage engineering products because you just value the integrity of the product so much you wanna have it Yeah. Then, you know, there's a place in this world for companies like Mod Retro.
Speaker 2:Yeah. What what do you think about, like, the temptation to just make, like, one small change? Like, the chromatic has a USB c port on it. That's a huge upgrade. But you could easily turn this into like, well, like, you know, we have the technology to make the m 64 handheld and then, you know, then you're in Switch territory and all of a sudden it's like a completely different product.
Speaker 2:Right?
Speaker 3:I they had looked at it's ever present, and that's that's the problem with sort of limitless you know, like, when Nintendo was building this, what, four almost forty years ago, thirty five years ago now, they were so limited by what the technology enabled them to do. Yeah. Like, when you think about the Sega Game Gear, don't if you ever had one of those. Oh, yeah. Great product.
Speaker 2:Yeah.
Speaker 3:This big, but it was the first one that had really great color screen on it. It took six double a batteries instead of four, like, the Game Boy, but the battery life on it was, like, forty minutes.
Speaker 2:Yeah. And Do you remember the n 64, like, expansion pack that you put in to, like, double the memory? That was
Speaker 3:Yeah, dude. I remember that. What about the rumble pack that shipped with
Speaker 2:the Starfox?
Speaker 3:That was, like, the greatest innovation ever. My mind exploded when the controller shook.
Speaker 2:Yeah. Dude, he's like, like, these add ons because, like, they couldn't bake it all into the first product and they
Speaker 3:they upsell. And that's that's indicative of the limitations of what tech can do. Totally. And when you look at, like, you know, don't know what what Samsung announced last week two weeks ago at Unpacked, you're looking at what the limitations are today of, like, a folding screen that's as thick as 10 sheets of paper, you realize how far we've come. But when you go in the other direction, there's kind of no limits, and you're looking to make something that was made thirty years ago.
Speaker 3:The problem is, like, where do you draw the line? And I think that's a really, it's a really interesting thing to try to overcome and confront.
Speaker 2:Yeah. What can you teach me about the lore of in the video camera world? I was looking at a cool new music video and it had this fisheye lens and this grain and I was kinda digging in and it seemed like they shot it on like a Sony skate camera with mini DV tapes. Like, this feels like something that I was looking at. Maybe I could buy one on eBay, but it's probably broken and I want someone to go remake it.
Speaker 2:But then, of course, you always have like, oh, you could just like throw the filter on there in Premiere or whatever. But what what are some of the what are some of the iconic video cameras or just, like, creative tools that might, you know, be worth revisiting at some point?
Speaker 3:Yeah. It's it's such an interesting examination, and and your your question's great because my family and I are are out. We're in Massachusetts for for summer vacation, and there's a lot of kids around. Like, we went and got ice cream last night, lot of teenagers around.
Speaker 2:And
Speaker 3:a lot of these kids come up and they ask me for selfies.
Speaker 2:For sure.
Speaker 3:And the amount of teenagers that come up to me and ask me for selfies, and they're carrying the point and shoots Wow. That we had Yeah. In, like, the February, like, before your phone camera was good enough
Speaker 2:Yeah.
Speaker 3:They all carry them. No one makes that camera anymore, which means if you have one, you have an old one.
Speaker 2:Yeah.
Speaker 3:And every one of these kids has it. And when I I asked them, because I'm I'm curious, like, why do you carry that? They're like, I love the way it looks. Yeah. And I I think we've reached this point, like, iPhone, cell phone photography, it all looks still perfect Yep.
Speaker 3:In a way that it almost becomes artificial. Like, I think the iPhone five was the last iPhone where when you took a picture, it just sort of took a picture. And then after that, every time you take a picture now on any modern smartphone, it takes a picture and then runs it through an algorithm to make the picture sweeter and cleaner and sharper and better for you.
Speaker 2:Yeah.
Speaker 3:And I think there's sort of this yearning for something that feels more real and authentic.
Speaker 1:It's like you look at a you're at a store, looking at at a picture, you know, a camera from a picture from from 2010 or camera or a picture from an iPhone today is like you're at you're at the grocery store and there's the organic apples
Speaker 3:and they look they
Speaker 1:look good but like they're a little fucked up and and and you know, they maybe like whatever part of it's kind of rotten and then you look over and you see the perfect apple. And like intuitively you know that you're like that it's a little bit too good to be true that apple over there, you know. Yeah. And I think I don't know the other thing that's real is removing the camera like adding the camera to the phone has been one of the greatest innovations of the century, right, in in in many ways. But now removing it, removing the camera from the phone and being able to leave your phone and just bring a camera around is also an innovation.
Speaker 1:Right? Going going going backwards. And I think that's the other thing that that kids like and and I found that's nice. If I'm going to the beach with my kids, it's nice to be able to bring a camera but not have my phone.
Speaker 3:Yeah. My daughter is 10. This is the first summer she's allowed to, like, walk around with her friends without a parent, and she has a flip phone. And she had this whole argument for getting an iPhone that has nothing on it but the phone and messaging. And my wife and I had this discussion, and the reason why we said no.
Speaker 3:It has to be the flip phone is because of the camera. Like, it it introduces a new level of sort of attention and why you're in purpose. And the reason why we wanted her to have a phone is simply to stay in touch with us. No other reason. But the minute you introduce this other sort of novel aspect of it, it becomes much more of a social dynamic and a social consideration in the way that you're trying to get away from that.
Speaker 3:But I think just going back to the camera things, this is such an obsession of mine. I think that we are quick to quick to ignore or look past the relationship we have with with the aesthetic that a camera yields. And when you see those pictures off of those old point and shoots, they look like something specific. Like, when you were talking about that old skateboard fish eye DV look, it looks like something specific. You have a relationship with that.
Speaker 3:When we see stuff that looks like it's VHS, we think of the eighties or the nineties. And I think now there's just sort of this generic aesthetic across the board. This, like, crispy flat four k phone thing. And there's this desire to have something that that it has some sense of identity attached to it. And that's why we're seeing these sort of Gen z types, you know, looking for older tech that's that reflects more of who they are, more individuality.
Speaker 3:And I think that's a trend that we're gonna see continue.
Speaker 1:Yeah. It's this generation's vinyl.
Speaker 2:Yeah. I I I've joked that I wanna film I wanna film the first podcast on Panavision film or something. Just spend a fortune developing the film.
Speaker 1:Other what other other consumer tech categories are you excited about? We're having we're having the founder of Wave on and I and I in twenty minutes and they got like 12,000,000 views yesterday for launching like sunglasses that well, just livestream constantly.
Speaker 2:Do you
Speaker 3:have a do you have a ratio of positive to negative mentions in those 12,000,000 views?
Speaker 1:I mean, I think everybody people had a viscerally negative reaction to it.
Speaker 3:That's that's my take on it as well. And it makes me think you know, my my, software development company, Beem, my startup, we started that company in 02/2014. And a little known aspect of that company is initially, it was built around Google Glass.
Speaker 2:No way.
Speaker 3:And we actually you know, we we rewrote the code. We rewrote the the software that Google Glass ran. So that a singular function, which was you push a button like this, it captures ten seconds and immediately shares it to your feed. That's where we started with that. And I remember meeting with Google, and they were excited about it, and they showed us what Google Glass two was gonna look like, and we're like, fuck.
Speaker 3:Yeah. We started raising money based on that. And then a week later, they announced they were killing the entire Google Glass program, and we we backed off. We're like, alright. We'll just do it on the phone now.
Speaker 3:But I think when you ask about sort of the social impact of being able to livestream all the time or the negative reaction that we're seeing based on on Waves' video they posted yesterday, I think the social dynamic is something that is often overlooked in the hardware startup world. I think of the Humane AI pin. You know, a really good friend of mine worked for for Humane and obviously super excited about new technology. Yeah. Sam.
Speaker 2:Oh,
Speaker 3:yeah. Which, parenthetically, you joke about Panavision for a podcast. Sam Sheffer has in his studio for his live streaming setup a VHS camera hardwired into his deck so he can live stream from VHS.
Speaker 2:That's amazing.
Speaker 3:But Sam would be around
Speaker 1:We tried to I tried to hire Sam, by the way. We worked with him on a project, and I was
Speaker 3:like He's way too hot. He's way too hot.
Speaker 1:He's gotta be he's gotta be sold.
Speaker 3:He's way too big of a deal. Yeah. Sam's the best. But when I'd be around him and he had his AI pin on, I was always sort of looking down at that or, like, thinking about what I'm saying and uncomfortable about, you know, speaking openly to him. And I think, like, that's what I mean by so social implications.
Speaker 3:Like, you know, my phone is on my couch right here, but if we're sitting together and I'm holding my phone like this the whole time we're talking, you're uneasy about that.
Speaker 2:Yeah. Yeah.
Speaker 3:And so when I think of a pair of glasses that are livestreaming or at least have the capability of livestreaming the whole time, when I look at them, I'm uneasy. And I think of this you know, maybe the most extreme example of this is Apple Vision Pro, which, you know, blew my mind when I got that thing. Like, I made the most the most glowing video about it because it was the greatest technology I've ever used. But later that night, because I made the video the same day I got them, I'm at home using them, and my wife is like, Casey, take those fucking things off your face and pay attention to your kids. And I was like, oh, you can't wear these around other people.
Speaker 2:Yeah.
Speaker 3:And I was like, how did they not see that? And, so I I think about that because, like, we're sort of accustomed to people using their phones, and it's kind of okay. Like, we're used to this. This is not okay. Yeah.
Speaker 3:And so when I think about wearables, I think that that is going to be a gigantic thing to overcome, which is
Speaker 1:Well, the crazy so so Yeah. Amazon acquired a company. It got announced this week called Bee, which is a brace after after all everything they faced with Siri, Siri's listening to me. The B band just listens to you all Every day single conversation. Everything.
Speaker 1:Everything. And and I and it's and it's cool. Like I I think all new tech for the most part is cool. Do I want my team to be wearing a bee bracelet? Are we gonna allow people to wear bee bands?
Speaker 2:Bee free zone.
Speaker 1:This might be a bee free zone. You know?
Speaker 3:There's I'm not gonna have any friends that wear bees. I don't have any friends anyways, but if you have a bee, just means, like, we can't hang out. Yeah. Yeah. Because it makes it makes me uncomfortable.
Speaker 3:And look, I think there's an argument that's like, get over it. Like, you fucking Luddite. Like, this is the direction everything's headed, and you're being recorded all the time anyway. Sure. But in the interim, I do think, like, there is a there's a learning curve.
Speaker 3:I think that Meta's decision to put wearable glasses with a camera on them in Ray Bans, the most common sunglasses in the world, was brilliant because we are all familiar with this pair of sunglasses. Like Yep. There was no learning curve. There was no, like, what's that thing on your face? We know what it is.
Speaker 3:Mhmm. I think how emphatic they are about having the indicator light. There's no way you can turn it off. If you cover it, they don't record. There's some degree at least there's
Speaker 1:That's important. Like, my my question my question for the the wave founder in twenty minutes is, should your glasses be bright red and have like, you know, a circle in the middle of your head that's flashing that says I'm recording.
Speaker 2:Yeah. I mean, if you So
Speaker 1:that people
Speaker 2:can If someone shows up with a TV camera, like, I don't feel like, oh, this is in violation of my privacy. I'm like, I know exactly what's going on. The news is here. And if I step in front of that camera, I'm on the news. Like, it it it we have a social understanding of that and you
Speaker 1:still might not wanna be around it.
Speaker 2:Yeah. Am I actually, I'm gonna turn around and walk the other way because I don't wanna be seen on on this camera or whatever. I don't know.
Speaker 3:But there's there's an understanding there. Yeah. And look on on Wave's website and the q and a, there's a question like, is there an indicator light? And their answer is, yeah, but you can turn it off. And so, I you know, I don't know.
Speaker 3:I read that and it makes me a little bit queasy Yeah. As a guy who has a camera on him, you know, all the time and and so much of the the videos that I've made is about filming everyone in the whole world around me. Totally. I still think there's something honest about having that camera on your shoulder, pointing a camera at someone, versus, like, you know, the glass hole movement of the, you know, Google Glass, which, like, by having this on your face, everyone was uneasy around you. I think it's even a big hurdle to overcome as we eventually, like, figure out what this hardware AI future is going to look like.
Speaker 2:Yeah. What do you think about, like airplane demos? It feels like all there's so much tech where the demo is like, you'll love this on an airplane. The Apple Vision Pro is a great example. A lot of the a lot of the handheld But it devices doesn't
Speaker 1:work when it's dark?
Speaker 2:It's not too dark on planes. Okay. Does work very well in planes. But it's this like weird niche use case that feels like killer application and then you actually get out into most of your life is not spent on airplanes usually. So
Speaker 3:Yeah. Look. If if that's the best you've got like, travel more than most people I know, and we're still talking about, you know, maybe double digits, maybe, maybe ten hours a month tops.
Speaker 2:Yeah.
Speaker 3:So, you know, $4,000 for a face computer that I use ten hours a month on an airplane, which by the way, it doesn't work for me on an airplane. Like, I didn't like it at all on an Okay. No. It will work. Like, work perfectly.
Speaker 3:No. When you're on an airplane, you're surrounded by strangers.
Speaker 2:Yeah. Yeah.
Speaker 3:So the idea that, like, I'm just gonna go like that and watch Avatar with all these people around me. You know, I don't fly Spirit that often, but I have a clone Spirit, and I know what goes on in those flights. Like, it it just again, like, it's the implication of yeah. The social implication of it. Know, I think if that's the best you've got, then maybe, you know, maybe you're not thinking holistically enough about your about your hardware.
Speaker 1:Yeah. How do you how do you spot talent? You you you discovered Sam. Someone in chat was asking
Speaker 3:It's a great question.
Speaker 1:If you have a a framework for it.
Speaker 3:It's a it's a it's a difficult question, but, you know, it's the same I I approach it the same way that I approach, investments, and it's seldom the work, and it's almost always the the individual. You know? Like, I I I think Sam is brilliant, but he's brilliant at everything that he does. He's brilliant with the work that he did at Humane. He's brilliant at the work that he did at The Verge before that.
Speaker 3:He's brilliant with his own YouTube channel. You know, I've I've got a a dear friend of mine, a kid named Hunter, who works in the building with me, but
Speaker 1:I'm not go
Speaker 2:to Hunter's
Speaker 1:Hunter's a friend, and and we invest together. So
Speaker 3:Hunter's Hunter's fantastic, and, like, I don't know what Hunter does because every time I have a conversation with him, he's starting some new business or some new endeavor. Like, the work is almost irrelevant. It's the individual. And I think it's like, it's that mentality that you have or you don't have. Not everyone has it.
Speaker 3:I do think maybe you can get it if you don't have it. But when I see that in people, I I have a tendency to sort of gravitate towards those people. And when I look at the when I look around at the friends of mine that I have some sort of professional relationship with, a professional admiration for, they all have that thing, that that sort of desire to to see it through, whatever the it may be. So, you know, I I guess the short answer is like, it's always the person, never the never the product.
Speaker 1:That's great. Hunter's in the chat by the way. He says hello.
Speaker 2:That's great.
Speaker 1:The another question I have is we've been thinking about AI generated images, video, etcetera is getting so good. If it stays at this pace, you're going to be able to generate characters consistently. You're you're already seeing this on Instagram, people just creating entire personalities for influencers in different verticals. Do you have any type of strong thesis around how how that will play out if we're gonna have sort of organic influencers, regular humans and then you know these synthetic
Speaker 2:Pros and cons.
Speaker 1:I've been thinking about in the context of you know an example is like, I don't want the AI Andrew Huberman. I want Andrew Huberman to get health advice from because I know Andrew and I trust that he's making the best decisions and studying you know and making you know these recommendations and understands the weight of that and you have you have like a synthetic Andrew Huberman in five years. Doesn't care if he could convinces a million people to do something dumb with their health because he can just shut the account down and turn a new one on. But I'm curious how you think.
Speaker 3:Yeah. Okay. My cynical take on it, which is which I believe is accurate, I'd wager that this is accurate, is that it's a tidal wave that none of us will will be able to to overcome. We can hold our breath for a while. It is a tidal wave.
Speaker 3:And I wish I had a better analogy, but it's a little bit like, you know, when Toy Story came out in 1999. It was the first computer animated feature film, and it was great. I loved it. But then five, six years later, there was just this, you know, onslaught of computer animated films, I was like, you know what? The hand drawn stuff is better.
Speaker 3:I missed that. When CGI first started getting introduced into films, I was like, no. Practical is better. I like practical better. That's gonna be the thing.
Speaker 3:And it's like, no. You're gonna lose. And I think AI is probably the most existential version of that. I think that it's just going to be so good that it's going to become irrelevant. And old people like us might appreciate, you know, real human things, and we might keep it alive.
Speaker 3:But the generation behind us, my children, when they see draw hand drawn animation, they're like, what is this? They don't care. It means nothing to them. So I think it's just going to get so good that it really doesn't matter, and that that tidal wave is going to consume everything. And I think that we're we're it's the progress that we've seen over the last couple years of how good it is and how quickly it's developing is incredible.
Speaker 3:But when you look at the capabilities of, you know, the latest rock and the latest GPT, you look at how smart these things are. You look at what the sort of conversations you can have with with any of these agents, and then you look at how good the images that can be spit out by, you know, Google's video or or whichever whichever AI you you might be fond of. It's like they're just gonna marry really, really quickly. And I think five or six years from now, we're gonna start to see real sort of erosion in the space because what they're delivering is gonna be so good. You know, like, another example is, we haven't had a number one song yet that's completely AI generated, but it's gonna come out of nowhere.
Speaker 3:It's gonna be, like, Gangnam style, which, like, the novelty of it allows us to dismiss the lack of humanity that this song has. The first AI song that's gonna be a number one hit is not going to be a Bob Dylan esque song that comes from the soul. It's gonna be something fun and outrageous, and we're gonna forgive that AI made it. And then slowly, it's gonna start to chip away. But I think it is a losing battle, and the optimistic take on that is I think that there is going to be an extreme premium, but on the humans that are able to sustain because of of what they represent uniquely.
Speaker 3:You know, maybe another bad analogy is it's like, I love Marvel movies. They're fucking fantastic. But as far as cinema goes, like, you know, there's an argument that said it's like, those kind of artistry that we saw in the the seventies or eighties, like the the apex of cinema where it comes from one when you think of a Tarantino movie, you think of, you know, a truly great filmmaker with a voice. Yeah. Marvel movies are something else.
Speaker 2:Yeah.
Speaker 3:They're fucking great, we love them. We all show up to see them, and we're okay with that. And I think that's going to happen with AI, but it's gonna happen at a rate of acceleration that we've never encountered before, and it's gonna be so good that we're willing to forgive it. And I think it's gonna leave a handful of people out there. Maybe Andrew Huberman will be one of them.
Speaker 3:I hope so. I'm a fan of his as well. But it will put an extreme premium on the sort of human voices that are distinctly human, that distinctly represents something that AI could never. When you look at the landscape of media, a lot of that shit could be replaced by AI.
Speaker 2:So the power law gets steeper.
Speaker 3:Yeah. Absolutely.
Speaker 2:Makes sense.
Speaker 3:Well That's like a five hour conversation, by the way.
Speaker 2:Well, we'll
Speaker 1:have you back on again soon.
Speaker 2:This was Yeah. Please. This awesome. Back on it.
Speaker 1:And congrats on your new your new, fake but very real role at ModRetro.
Speaker 3:You guys. I appreciate it. Thanks for the time guys.
Speaker 1:Yeah. Have fun in Massachusetts. We'll talk soon.
Speaker 2:We'll talk soon.
Speaker 3:Take care. Bye.