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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 TBPN.
Speaker 2:Today is Thursday, 10/02/2025. We are live from the TBPN UltraDome, Temple Of Technology.
Speaker 1:The fortress of finance.
Speaker 2:The capital of capital. That's right.
Speaker 1:And good to be back.
Speaker 2:That is a lovely fedora, Jordy, if I say so myself. A yellow fedora, celebrating ramp.com. Kyle Time is money.
Speaker 1:Looking good.
Speaker 2:Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more. If you've been sleeping under a pile of receipts, you probably haven't heard the news. Ramp is doing a publicity stunt in Manhattan, in New York, the Big Apple, the city that never sleeps.
Speaker 1:With Kevin
Speaker 2:With in the office. In the office. Yes. He's gonna be locked in a box, I believe. I don't know how much they've actually teased about this, but we we obviously know a lot.
Speaker 2:But there are some billboards up and some out of home ads, and they look great. And they the tagline that I did see on the timeline that is public says, I'm CFO now. Of course, a reference to the social network and Mark Zuckerberg. And it's a lot of fun, and we will be tracking this stunt as
Speaker 1:it is. Right. I cannot get enough of this fedora. I might start wearing this every day.
Speaker 2:And I believe it might be streamed live. It might be on Restream, one livestream, 30 plus destinations. Multistream and reach your audience wherever they are. Right. The top story today is, of course, about the slop trough.
Speaker 2:How are we gonna keep the lights on at the slop trough?
Speaker 1:That's right.
Speaker 2:The slop trough, it takes an incredible amount of electricity to keep the lights on for the piggies.
Speaker 1:Everyone was worried about water. Yep. Turns out
Speaker 2:Electricity may be a bigger deal.
Speaker 1:Data centers need water.
Speaker 2:They need water, but they recycle the water. They recycle the water. So the water isn't that big of a deal maybe. We don't know all the data. But But if the next year data centers get
Speaker 1:ready for your electricity prices to keep skyrocketing. Yes. And what and the you know, among, you know, many of the issues with that is that it will just ultimately make huge amounts of everyday Americans genuinely hate AI Yep. Because ChatGPT is cool. Yep.
Speaker 1:They might use some other tools. Yep. But if somebody's sitting there watching their electrical bill just climb month over month, year over year
Speaker 2:Yep.
Speaker 1:At some point, they're going to look around and say, I miss when I could just Google something, I didn't have to pay an extra $100 a month for power.
Speaker 2:Totally. So this is already hitting the type timeline. It's clearly in the zeitgeist. This question of electricity prices, is it worth it culturally as a trade off? We get AI, but we pay more in electricity.
Speaker 2:Whether or not using AI. This has been bubbling up for a long time, but the Sora thing seems like a big deal. I don't even know if this is a Sora video, but there's a post from September 5. Oh, that must have been pre Sora. So this wasn't even Sora, but someone generated an AI video of a woman smashing
Speaker 1:Play this video because there's gonna be maybe one person on Earth that thinks the, know, massive increase in electrical
Speaker 2:Is worth is worth it. Okay. So let's play this video. Oh, god. Not with the sound.
Speaker 2:I don't know. Okay. Horrific.
Speaker 1:Worth it. Worth every penny.
Speaker 2:And clearly fake and weird and the glass flows through.
Speaker 1:Pretty interesting physics sim.
Speaker 2:Tyler's over there being like, we're gonna train robots on that. We got it. It's an accurate physics, Sam. It's worth it. We're getting humanized.
Speaker 1:So this is this
Speaker 3:is how we get to the Dyson sphere.
Speaker 2:Yes. This is Very clear. Critical path to the Dyson sphere, obviously. If you if you're doubting that, you're
Speaker 1:so humble. Notable here is that the guy Chipotle Rowan Yes. Says, pretty cool that my electric bill has gone up 25% so other people can make this crap. And he gets 300,300
Speaker 2:likes on x. Like, this is
Speaker 1:That's basically the tax environment. That's basically every user liked this post.
Speaker 2:8,000,000 views, 17,000 reposts. It's a lot. And I wanted to dig into some numbers, so I did fact check that 25%. I think it's real. So in 2021, electric bill for an average American was $14.52 dollars It's like a significant amount if you're an average American, you're making 60 ks or something like that or 100 ks a year.
Speaker 2:And now that's up to $17.28 dollars That's exactly 25% increase. So it does seem like electricity prices have gone up by 25%. And if you look at some of the charts, there really is a spike right after 2020 when AI investment started ramping, electricity prices went up. Now some of this might be COVID, but it does seem like from 2010 to 2020, electricity prices were pretty stable, about $0.12 per kilowatt hour in The U. S.
Speaker 2:City average on the St. Louis Fed. But then 2020 hits, AI comes, and things have been up and to the right ever since and not in a good way. JPMorgan estimated that 70% of last year's increased electricity cost was the result of data center demand, And the flow here is the logic is not quite perfect, but it's not great either. So it's that AI slop will be irresistibly dominant.
Speaker 2:We've seen this with everyone who works at our company becoming entirely one shotted by short form AI video. No one can get anything done. It's a disaster. It's a crisis.
Speaker 1:Of course, John's being sarcastic.
Speaker 2:Somewhat sarcastic.
Speaker 1:There's a couple of people that have been a little
Speaker 2:They're on notice. They're on
Speaker 1:notice. They're on notice.
Speaker 2:But yes, so you have to assume meta vibes, OpenAI, Sora will be massive successes and energy prices will skyrocket as humans spend all their time at the slop trough. I don't think personally that there'll be a fast takeoff in AI slop consumption. I think it will kind of grow slowly. I think this TikTok is just one of many that people will watch. But there's no doubting that energy prices are rising.
Speaker 2:Per capita consumption, interestingly, in electricity has been down flat to down, mostly thanks to efficiency standards, but also there's just not that many new things that require lot of energy. So a lot of people are migrating from incandescent light bulbs to LED light bulbs to more efficient cars, more efficient washing machines, dishwashers, everything is getting more efficient. So the use is actually pretty flat, but the price is going up because we haven't been building any new electrical infrastructure. But that is changing. So the good news is that American energy production is growing with tons more capacity coming online soon.
Speaker 2:Companies are working across all categories. And there's actually a bit of a fight developing between nuclear and solar Maxis. Elon is this total solar maxi, but there are a bunch of folks who are going all in on nuclear.
Speaker 1:Including Rick Perry.
Speaker 2:Rick Perry.
Speaker 1:His company Fermi Yes. IPO ed today at a $15,000,000,000 valuation. Not bad for a nine month old company.
Speaker 2:Not bad.
Speaker 1:A land lease and not a lot else.
Speaker 2:And the hyperscalers are doing deals to bring decommissioned nuclear power plants back online. I see that as a very positive development. We've talked to probably, what, five different, 10 different nuclear CEOs on this program, from Radiant to Valar to the nuclear company to general matter. There's so many companies in the space that are doing cool stuff in nuclear. And hopefully, of that comes online, although the nuclear projects are very slow.
Speaker 2:But there is more capacity coming online. The and and, you know, the tech industry just has no incentive to become maybe more of an enemy of average Americans. They're not they're not polling super great, but this could potentially make it worse.
Speaker 1:Yeah. But the tech industry has addressed that. Through the the social media
Speaker 2:Totally.
Speaker 1:Is terrible and bad crisis. Everybody's sort of a lot of the people that were most negative around it are still power users of social media.
Speaker 3:I I mean, the the Social Network two, like, the the the leaked Yep. Plot is about how they were, like, meddling in all the I think it was, like, election stuff.
Speaker 2:Okay. So
Speaker 3:I that's I don't know if people are fully over it. Yeah.
Speaker 2:Yeah. Yeah. Yeah. I know people are people are upset generally, and that gives the tech industry an incentive to build more electricity so this doesn't become a bigger issue. Sam Altman's guided towards 250 gigawatts of capacity at OpenAI by 02/1933.
Speaker 2:That's an insane number. For reference, in 2023, ten years before his prediction, America as a whole produced average power of around 500 gigawatts, four eighty five. And so he's saying, I need half of the power in America currently for ChatGPT and AI slot, right? And if he doesn't build more and doesn't justify more builds, that would mean way higher prices, right? Because OpenAI would be buying all of that electricity and selling it.
Speaker 1:Not to mention, he'd have to choose between curing cancer free education That's true.
Speaker 2:That's true. Which
Speaker 1:he's effectively requested
Speaker 2:No one wants to make that
Speaker 3:trade off.
Speaker 1:Not make him choose.
Speaker 2:No one wants to make that trade off. So the that two fifty gigawatts will not just be pulled from the grid broadly. It will be built. There will be new builds, and that's already happening. So AI companies the problem right now is that AI companies are pulling forward energy way faster than new capacity can be built.
Speaker 2:Like it's very easy to buy some GPUs, rack them in a tent, and run the one gigawatt cluster. Like Colossus II is an example of that. Like, build it and then pull the electricity from the grid. It's not as easy to build a new nuclear reactor. It's not that easy to build entirely new energy capacity.
Speaker 2:But there are certainly plans to do that. Back in the day
Speaker 1:There's also there's also some new I saw a good post earlier from an account called Pantex Cap talking about how power companies are overwhelmed and tired of a lot of the BS that's happening in some of these new data center build outs. They're putting up huge barriers to weed out the BS. If you want 500 megawatts from Georgia Power, you now have to put up 600,000,000 up front.
Speaker 2:Up
Speaker 1:front. And it's held against a ten year power agreement and withdrawn monthly.
Speaker 2:Interesting.
Speaker 1:Alabama Power is making people to commit to a minimum of 90% of the power requested, so you can't ask for 500 when you want 200 and release it later. So a lot of people will be requesting a lot Yeah. And just not even necessarily confident that they're gonna use it Totally. Understanding that it's an asset to have access to it.
Speaker 2:Yeah. No. That makes sense. So mean, years ago, the hyperscalers Amazon, Google, Meta, Microsoft, they were in a very stable place in terms of energy consumption pre AI boom. And it was so stable that they could basically promise to go all in on clean energy going forward.
Speaker 2:They made net zero pledges. They satisfied a bunch of ESG requirements. But now the AI race is on, and so new data centers need to come online, and we're seeing that with these new data centers in tents and all these new construction projects. Natural gas, solar, recommissioned nuclear, anything's on the table. We've heard that quote before from Chase over at Crusoe, AI companies would burn whale oil if they could.
Speaker 2:The energy is so scarce, it really is the most important resource for all of this. And so data centers consumed about 4.5% of U. S. Electricity in 2023, and that number is growing quickly, could be 6% in the next few years. By late twenty twenty four, six point five gigawatts of new capacity was underway.
Speaker 2:That's actually not just for the data center world, but just in America, they're adding 6.5 gigawatts of capacity. Now remember, we're almost at 500 gigawatts, So that's like a 1% to 2% increase. It's like not that much. But there are now plans for up to 100 gigawatts of new build out over the next few years. Obviously, a lot of that is up for it's like still at the LOI phase.
Speaker 2:But that would mean a 20% like 20% increase in energy production is sort of like being papered right now. You can think about it that way. Like America and the business community and the energy world and the AI companies, they've all come together and said, Okay, let's sign and let's jump over the threshold and let's go build an extra 20% capacity, which would be incredible. Because if AI flatlines and people don't show up to the slop trough and they're just like, I'm good, Just give me a database query, please. And they go back to 10 blue links.
Speaker 2:Who knows? Then basically, have 20 more capacity. Price should fall. It's a basic supply and demand equation. On the flip side, if tech builds the Infinite Jest ultimate slot machine but nobody comes, in that case, prices fall.
Speaker 2:On the flip side, if demand is certainly demand is certainly there today. You can just look at Foundation Labs, OpenAI, Anthropic, Google, DeepMind, they're all seeing exponential growth in token generation. If it's an exponential curve, get ready for expensive electricity. But if it's a sigmoid curve and we're on our sigmoid grind sets, America probably overbuilds and then prices fall. The Internet overbuild that followed the dot com boom was pretty positive externality.
Speaker 2:It birthed a ton of new tech companies that were able to leverage cheap broadband and backhaul and Internet services once the applications actually caught up. It's even easier to imagine a positive scenario with excess energy lying around because you can do even more with it than just fiber lines. But all of this is tightwalking on a power line. And so interesting to keep track on it. Sagar and Jetty had a good take.
Speaker 2:So Derek Thompson shared a series of charts in the first slide of our deck today. Derek Thompson, friend of the show, says data centers and AI are gobbling up electricity, but the share differs significantly by state between 2010 and 2025. Data centers went from less than 5% to roughly 40% of Virginia's electricity consumption. Sweet Jesus. And of course, the city the states that are not on here are like California.
Speaker 2:California produces an immense amount of electricity, doesn't have a lot of data centers. When we use Netflix in California, it goes it comes out of Oregon, usually. When you're on the East Coast, it's not the energy is not made in New York state. It's made in Virginia, and then you access The U. S.
Speaker 2:East and AWS cluster. And we're seeing that with Texas and Mississippi and Alabama and all the new data center construction not really happening in the biggest states. And so you can look at this and see, Wow, Virginia's at 40% electricity consumption. Well, nationally, we're still at 4%, 5% of data center consumption. But it's rising, and it's a big deal.
Speaker 2:It's going be crazy in those state legislations. So yeah,
Speaker 1:does Sager say? Sager's point is that right now, effectively, single family homeowners, businesses are subsidizing the basically subsidizing the cost for these data centers that are coming online.
Speaker 2:Yep. And so, yeah, he says, why should we be paying sky high power bills for Sam Altman's AI slot video generator? And it's a question that tech will have to answer. And then
Speaker 1:It's also crazy because, of course, Sam Altman, leader of OpenAI, was a driving force in creating Sora. But he's also videos of him are the ones
Speaker 2:That were are
Speaker 1:some of most viral videos created on the platform so So it really is him.
Speaker 2:But we are at this precipice where AI is cool, and tech people are into it. But it's becoming culturally like the danger here is it becomes like NFTs, right? I think you were saying this yesterday.
Speaker 1:Think, yeah, potentially hated Yes. Even faster than social media.
Speaker 2:Yes, especially with the video stuff. The video stuff has the same potential for like, ugh, this just bugs me in the same way that the expensive monkey picture bugged people. People weren't that annoyed by Vitalik Buterin building Ethereum and nerding out about secure blockchains. It was when it became, Okay, wait, what? A celebrity is hawking a million dollar monkey picture on a late night TV show and I'm losing my mortgage off of like, why is this happening?
Speaker 2:That's where people got really frustrated. And I think it'll be the same thing if people are like, Okay.
Speaker 1:I don't like this, and it's increasing my
Speaker 2:Yeah. It's very different when it's like, I have a job, and there was a little bit of a boring thing. And now I use ChatGPT to summarize those meeting notes, and it's delightful. And I'm Okay with that versus, like, this stuff is not good, and I don't like it. And also, I'm paying for it.
Speaker 2:That sentiment that got 300,000 likes
Speaker 1:There's also a growing sentiment around even the the non coding use cases, what the value is. We had we had dinner last night with a very successful entrepreneur who's not really he's he's, you know, built a a a widely known SaaS company, but not really in the Silicon Valley bubble, not kind of caught up in the AI hype cycle himself. And he said something a line that stood out, is AI is really good at helping people do unnecessary work faster. Right? Just like producing big reports, producing research.
Speaker 2:Yeah.
Speaker 1:Right?
Speaker 2:What was your example? It was like
Speaker 1:And and you gave the example of, you know, if you're prompting an AI and you're like kind of bulleting out, for example, an email or a document, you can kind of get you could kind of just send give somebody the bullet points.
Speaker 2:That's because I have ChatGPT running in my brain. Like, if you send me three bullet points and you just say, hey, John, imagine this is like five paragraphs. I can just do that in my head in two seconds. It's very easy for me to do that
Speaker 1:based Organic on intelligence.
Speaker 2:Yeah. Also, you know what else I can do? I can imagine that it's being read to me by a monkey on a jet ski. I can just imagine that. If you tell me three bullet points, hey, today we're going to talk about AI.
Speaker 2:We're going to talk about crypto. We're going to talk about ramp. I can just imagine a monkey saying that to me. You don't actually have to instantiate it. You can just share the idea, and I can instantiate it in my head.
Speaker 2:But yeah, the example you had was funny. Was like if you're going to a five minute meeting, you're like, I used AI to generate a 50 slide deck in a 400 page memo. And it's like, did that help? That seems entirely unnecessary.
Speaker 1:Yeah. Yeah. And in a while back when GPT psychosis was becoming more discussed, I was predicting that AI was going to go through a really, really rough PR Yeah. Yeah. Par with what social media started to go through.
Speaker 1:Yeah. I think that's generally happened. And if
Speaker 2:look the macro
Speaker 1:may be Well, well, no. I I actually think I I think generally correct. Right?
Speaker 2:Every There's not a day.
Speaker 1:Yeah. Every legacy media company has been putting out articles on people that are, you know Losing it. Using AI in weird ways and going crazy or talking about how, you know, chat you know, chat GBT or another product is like mentioning, you know, the word suicide a bunch to to users. They it seems like they they released some pretty big updates Yep. Recently that basically take people from four o back to GPT five reality if they sense behavior that's that's unhealthy.
Speaker 1:But again, every legacy media company has been pushing out content around people going crazy through AI. Now you add in electricity costs going And I think it's just gonna continue.
Speaker 2:Well, the good news is that we've been here before, and there are two positive possible outcomes here. One is just that the tech community comes together and builds a bunch of nuclear and solar and just power gets cheaper. Like, that would be amazing. We need more energy production, and clean energy production is kind of limitless. It's magical when it works.
Speaker 1:The problem is AI usage is exponential Yeah. Tokens.
Speaker 2:But maybe it's a sigmoid function, and we wind up building even more, and then prices do fall. It's totally possible. The flip side is that we've seen there are solutions to energy intense algorithms. We've seen this in past with crypto. So there was the same during the NFT bubble, was a huge push for, oh, Ethereum is using so much energy for proof of work.
Speaker 2:They were able to migrate to proof of stake. Yeah. You know, energy prices fell. And it actually took a huge hit to NVIDIA's sales that year because NFT companies and and and and blockchain companies didn't need to buy as many GPUs because they were able to do the same algorithm effectively on a more efficient
Speaker 1:So you're saying Jensen is Satoshi?
Speaker 2:Maybe. I mean, it was extremely bullish for him, for sure. But I do think that we've successfully moved past the crypto is using all the energy narrative, and that was a technological solution to that. What are you laughing at? The Fedora of Finance.
Speaker 1:Fedora of Finance.
Speaker 2:Well, speaking of crypto, Privy, the wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, integrate on chain infrastructure all
Speaker 1:through Yes, one it's simple infrastructure provider.
Speaker 2:And you're not going to be needing a gigawatt of energy capacity to spin up an application on crypto risk. Great line,
Speaker 1:Paracletes, the fedora of finance.
Speaker 2:Yes. It's great. Well, Andre Karpathy had some reactions to the Dwarkash Patel podcast with Richard Sutton. He said his background, the bitter lesson, has become a bit of a biblical text in frontier LLM circles. Researchers routinely talk about and ask whether this or that approach or idea is sufficiently bitter lessened pilled, meaning arranged so that it benefits from added computation for free, as a proxy for whether it's going to work or even worth pursuing.
Speaker 2:The underlying assumption being that LLMs are of course highly bitter less impilled indeed, just look at LLM scaling laws, the Chinchilla scaling laws discovered by Google, where if you put compute on the x axis, number go up and to the right. So it's amusing to see that Sutton, the author of the Post, is not so sure that LLMs are bitter less impaled at all. They are trained on a giant data set of fundamentally human data, which is both human generated and finite. What do you do when you run out? This is the data wall that was a popular point of contention for a while.
Speaker 2:How do you prevent a human bias? So there you have it, bitter lesson pilled LLM researchers taken down by the author of the bitter lesson directly. Ruff, he says. In some sense, Dwarkash, who represents the LLM researcher's viewpoint in the pod and Sutton are slightly speaking past each other because Sutton has a very different architecture in mind and LLMs break a lot of principles. He calls himself a classicist and evokes the original concept of Alan Turing building a child machine, a system capable of learning through experience by dynamically interacting with the world.
Speaker 2:There's no giant pre training stage of imitating Internet web pages if you're a kid. Dylan Patel was on Invest Like the Best, and he keeps talking about how he has a baby cousin, I think, who learns by and he keeps using this example of the baby puts the hand in the mouth or puts the foot in the mouth and learns immediately. And it's not like the baby looked at you and saw, this is what a hand tastes like. This is what a foot tastes like. Or like, this is what a rock tastes like.
Speaker 2:Baby definitely learned that from first principles through exploring the actual physical environment. That's not what LLMs do. And so there is a good point there. So there's no supervised there's also no supervised fine tuning, at which point at which he points out is absent in the animal kingdom. It's a subtle point, but Sutton is right in the strong sense.
Speaker 2:Animals may, of course, observe demonstrations, but their actions are not directly forced or teleoperated by other animals. Another important note he makes is that even if you treat if you just treat pre training as an initialization of a prior, before you fine tune with reinforcement learning, Sutton sees the approach as tainted with human bias and fundamentally off course, a bit like when AlphaZero, which has never seen human games of Go, beats AlphaGo, which initializes with them. In Sutton's worldview, all there is is an interaction with the world via reinforcement learning, where the reward functions are partially environment specific but also intrinsically motivated e. G. Fun, curiosity, and related to the quality of the prediction in your world model.
Speaker 2:And the agent is always learning at test time by default. It's not trained once and then deployed thereafter. Overall, Sutton is a lot more interested in what we have in common with the animal kingdom instead of what differentiates us. If we under if we understood a squirrel, we'd be almost done, he says. Well, speaking of agents, go check out Cognition.
Speaker 2:They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. So Andre Karpathy gives his take.
Speaker 1:If we understood a squirrel, we'd be almost done.
Speaker 2:Andre Carpathi gives his take on the Dwarkash Patel Richard Sutton pod. He says, First, I should say that I think Sutton was a great guest for the pod, and I like that the AI field maintains entropy of thought and that not everyone is exploiting the local iteration of LMs. Completely agree. It was a great thought. AI has gone through too many discrete transitions of the dominant approach to lose that.
Speaker 2:And I also think that his criticisms his criticism of LLMs is not bitter lesson pilled, is not inadequate. Frontier LLMs are now highly complex artifacts with a lot of humanness involved at all the stages. The foundation, the pre training data is all human text. The fine tuning data is human and curated. The reinforcement learning environment mixture is tuned by human engineers.
Speaker 2:We do not, in fact, have an actual single clean, actually bitter lesson pilled, turn the crank algorithm that you could unleash upon the world and see it learn automatically from experience alone. Does such an algorithm even exists? Asks Andre Karpathy, co founder of OpenAI, head of Tesla's autopilot program for a while, now working on something new.
Speaker 1:Binding it What is agency working on?
Speaker 2:He is working on education technology. Correct?
Speaker 3:Yeah. It's called Eureka Labs, I think. They haven't released anything yet. Yeah.
Speaker 2:He's he's he's he's in the trenches.
Speaker 1:Yeah. Think I think the question that I have is is, you know, Ilya has said broadly they're focused on their own Yeah. Definition of super intelligence and that and and it seems like he might not just I I it certainly doesn't feel like he's gonna launch a chatbot anytime soon.
Speaker 2:Ad network. Ad network or business process optimizer. Enterprise software I wouldn't be mad
Speaker 1:I wouldn't be mad at that. I would love that. But I would hope that he's working on something
Speaker 2:Maybe just like entirely true
Speaker 1:crank algorithm.
Speaker 2:Yeah. Entirely novel.
Speaker 1:He could unleash on the world.
Speaker 2:Yeah. I mean, it makes sense to give him the budget and time to go figure that out and and explore. I love it. Two example proofs are commonly argued are are are are are commonly offered to argue that such a thing is possible. The first example is the success of AlphaZero learning to play Go completely from scratch with no human supervision whatever whatsoever.
Speaker 2:But the game of Go is clearly such a simple closed environment that it's difficult to see the analogous formulation messiness of reality. I love Go, but algorithmically and categorically, it is essentially a harder version of tic tac toe owned. Sorry, Go players. Stick to tic tac toe, buddy. The second example is that of animals like squirrels.
Speaker 2:And here, personally, I am quite hesitant whether it's appropriate because animals arise by a very different computational process and via different constraints than what we have practically available to us in the industry. Animal brains are nowhere near the blank slate they appear to be at birth. First, a lot of what is commonly attributed to learning is, in Andre's opinion, a lot more maturation. And second, even that which is clearly learning and not maturation is a lot more fine tuning on top of something clearly powerful and preexisting, the brain. For example, a baby zebra is born and within a few dozen minutes it can run around the savannah and follow its mother.
Speaker 2:This is a highly complex sensory motor task and there's no way, in my mind, that this is achieved from scratch tabula rasa, the brains of animals and the billions of parameters within have a powerful initialization encoded into ATG CGs of their DNA trained via the outer loop optimization in the course of evolution, if the baby zebra spasmed its muscles around at random as a reinforcement learning policy would you would have you do at initialization, it would not get very far. Similarly, our AIs now have neural networks with billions of parameters. Andre goes on. He does give a summary. He says, Anyway, in summary overall and actionably, I think this pod is solid, real talk from Sutton to the Frontier LLM researchers who might be gear shifted a little too much into the exploit mode and not enough in exploring.
Speaker 2:Probably we are still not sufficiently bitter less impilled, and there's a very good chance of more powerful ideas and paradigms other than exhaustive bench building and bench maxing and bench pressing. And animals might be a good source of inspiration. Just look at how a gorilla can bench press. That's what we need to do.
Speaker 1:Is anybody actually Working on that? Yeah, working on getting gorillas.
Speaker 2:Come on. You got the robot Olympics. Let's see some Olympic lifting. Yeah. Intrinsic motivation, fun, curiosity, empowerment, multi agent, self play, culture, use your imagination.
Speaker 2:I keep coming back to this idea of like, we're obsessed with this like agentic horizon, one hour, two hours. And like, my initialization prompt, humanity's initialization prompt, is like, be fruitful, multiply, right? That's Genesis. And I think there's something where humans, the goal that we seek is like survive forever, reproduce forever. And so I don't really see my life as like a string of one hour tasks or five hour tasks.
Speaker 2:I see it as like a one hundred year journey, potentially thousands of years when I think about my multi And so I it just feels like we're pretty far from something that is satisfying all the different criteria. And of course, you know we need smell o vision and we're not making any progress there. Tyler, what was your reaction to this?
Speaker 3:Yeah. I mean, it's very interesting. I think, Sutton is very RL pilled. Mhmm. I think, like
Speaker 4:Wait.
Speaker 2:Wait. RL pilled?
Speaker 3:Yeah. Sutton.
Speaker 2:Are we in the RL paradigm?
Speaker 3:Yeah. But it's still mean, we're we're still at, like, very early days. Right? I think Sutton envisions this thing. It's like it's just RL, right?
Speaker 3:At its core, you start with nothing and you learn the world, where the current paradigm is like, first, you basically
Speaker 4:mimic Pre train
Speaker 2:a bunch of stuff.
Speaker 3:And you're basically like at first, when you're training a model, it's literally just like memorizing facts. And then you slowly get it to generalize.
Speaker 2:So right now, the way I think about it is for a modern chatbot that I'm using, there's maybe 300 megawatts of pre training compute and then 300 megawatts of RL thrown at it. And it's like a fifty fifty balance or something. And then maybe he's saying it should be like 100% balanced towards RL, and like there should
Speaker 1:not Well, to ground this in Sora Please. Part of why this new app is strategic is they're generating an asset, and then they get to immediately See feedback. See feedback. Basically, the reward is more engagement in the you know, watching it longer. Yep.
Speaker 1:If you see a Sora video and you just meet on on x Mhmm. OpenAI is not really able to leverage that. Yep. Right? You could indirectly be like, okay, this went viral.
Speaker 1:Like Mhmm. Maybe that's good there. But in the app, if you're in the in the trough, you're immediately you know, the time that you've spent watching the video, did you like it? Yep. Did you send it?
Speaker 1:All of that is providing feedback
Speaker 2:Yep. Yep.
Speaker 1:For the model. RL.
Speaker 2:Yeah. Tyler?
Speaker 3:Yeah. I mean, so I think if you look at just training, like, RL is nowhere close to half of compute. Mhmm. It's like way less. But I think it is like it is like a very cool idea to basically have this very, like, pure model in some sense.
Speaker 3:It's just like experiencing the world and learning from that. Mhmm. But I I don't know. Like, if you go to the the Dylan Patel kind of example of the baby, like Yep. Putting its finger in its mouth to figure out where its fingers are.
Speaker 3:The baby is not just randomly twitching. Its nerves are not just randomly firing. There's still some prior that comes from evolution or whatever. But it's not just purely experiencing things and then updating. Yeah.
Speaker 3:There's something there.
Speaker 2:I was thinking about it with the zebra example. Like, that's true. But also, like, the baby is kind of randomly twitching in the womb. And and like the baby, like, you can see on the on the, what's it called, the oscilloscope or something? I forget what it's called.
Speaker 2:There's some sort of, like, device that you can, like, look inside and see the baby. And the baby's moving, like, very basically, but probably, like, doing some reinforcement learning essentially, like like, pre birth, I think. I don't know.
Speaker 3:Yeah. I mean, on some level, like, there is some encoding that is going on into the baby Mhmm. Of, like, this is how, like, you can walk around or something like that. Yeah. There there is some like, I I think if you just had a baby and, like, without any other people around
Speaker 2:Yep.
Speaker 3:Like, maybe it could, like, learn to walk and stuff. But there there's some, like, I I think there is still some imitation going on generally. Like Sutton is saying that, like, none of it is imitation. It's all just like RL. Yep.
Speaker 3:You're experiencing world and you're updating on those on the actions you took. You have some goal. You either like complete the action or you don't and then you update.
Speaker 2:Yep.
Speaker 3:I think think imitation is more important. Important. Right? There's the of the Girardian take or whatever. Yeah.
Speaker 3:Is that humans are apes, right? To ape is to imitate.
Speaker 2:If you drop a baby in a prison cell from birth, it'll never learn to walk because it needs to see a human walk to learn that.
Speaker 3:Yeah. Something like
Speaker 2:I think they'd figure it out.
Speaker 3:Okay. Maybe not walking, but like doing, you know, useful things. Like, it's not gonna
Speaker 2:I think I think if think if my son was born in a padded closet and just given food and an Excel sheet, he'd be writing VBA macros in five years with no external
Speaker 3:Well, maybe it's been encoded in
Speaker 2:pure QA. Pure pure reinforcement learning experimentation from first principles. I think it's possible. I don't know. Anyway, Figma, Think Bigger, Build Faster.
Speaker 2:That's Figma helps design and development teams build great products together. Hey, man, just wanted to say I think we talked about this yesterday, but I love it so much. I put it back in. Hey, man. I just wanted to reach out and say I loved how much you drank at the networking event last night.
Speaker 2:There there are a few of those. This is becoming a new new format. There was another one.
Speaker 1:I'll find the
Speaker 2:Find the other one for me in the
Speaker 1:meantime. Yesterday.
Speaker 2:Apparently, there's a game that makes you a YC partner for a day. You watch old pitches and guess if they made the batch. I wonder where this data came from. Usually, YC is pretty locked down with these with these old pitches. But this seems like a fun game.
Speaker 2:I went to the top of Hacker News yesterday.
Speaker 1:Here's the other
Speaker 2:You got the post.
Speaker 1:Hey, man. Just wanted to follow-up and say I admired your ability after three drinks to persistently ask who had a bag at the super serious networking event last
Speaker 2:Super serious networking event. Yeah, I could never.
Speaker 1:Yeah. I could never.
Speaker 2:What do think about I was I was texting with Tyler about this. Like, there's this post. Sam Altman is playing four d chess. Sora two is about to take over social media. The virality is guaranteed once this scales.
Speaker 2:Billions in ad revenue will flow straight into more compute, fueling the flywheel in a year or will be so efficient and cheap that margins explode. You can't out accelerate Sam Altman. And I wanted to reflect on this idea that Sam said, it's way less strange to watch a feed full of memes of yourself than I thought it would be. Not sure what to make of this. And Gabriel I
Speaker 1:mean, he's again, my read on this is I don't fully believe that he actually I don't know. I don't know how to read into this other than he is very incentivized to normalize people being deepfaked all the time.
Speaker 2:I mean, it's a crazy, crazy move to just be like
Speaker 1:Somebody had to get
Speaker 2:life I'm merging. I'm merging. It's like So
Speaker 1:him going first on the first SpaceX rocket. Hey, it's not so bad. Look at this. It's not so bad. Don't want to turn this off.
Speaker 1:I don't I don't want to see
Speaker 2:I I mean, I don't like the skibbidi toilet thing to begin with, and then you mash it up and it gets even more horrifying.
Speaker 1:But anyways, he he went first. He's very incentivized to get a bunch of other big names, personalities to agree to do the same thing. Did is this would imagine it's very weird to watch videos of yourself committing crimes. You know, there's a video of guess a video of him in blackface
Speaker 2:I saw that.
Speaker 1:Floating around. There's a bunch of videos that I think would be incredibly strange to watch of yourself. So
Speaker 2:But stranger than your expectation? Because I would expect it to be weird. I I expected it to be weird when Tyler sent me a deep fake of myself bench pressing and then turning into a golden retriever. I was kind of just like, yeah. This is what this is below my expectation.
Speaker 2:Like, it is less weird to me. I don't know. You haven't seen one of yourself yet. Right? Has anyone made one of you?
Speaker 2:You haven't uploaded one?
Speaker 1:I don't think I've done haven't You haven't done the
Speaker 2:Cameo haven't
Speaker 1:agreed to do the Cameo thing.
Speaker 2:What what what about you, Tyler? Did you expect it to be weird to see yourself in a Sohr video? And then was it weirder or less weird than you expected?
Speaker 3:I don't think it's that weird. Yeah. But it's also like it's still not like that good where like it's kind of me but it's not like all the way there.
Speaker 2:Totally. Totally.
Speaker 3:But I think okay. Jordy, do you think that him basically releasing a social media where like half the content is just him, is that an aura farming move?
Speaker 1:I think it increases his fame, which is a resource that he's able to leverage. But I don't know that it it it didn't you know, a lot of the videos that that I've seen don't I don't think are necessarily good for the brand, but it it's also just putting out so much stuff into the world that it just all gets diluted and you don't read too much into any one video because it's not created by him.
Speaker 2:Do you believe in Cosgrove's Law?
Speaker 1:That ore farming is all you need?
Speaker 2:Break it down for us.
Speaker 3:Yeah. Always be ore farming. Okay. I think I I have the text somewhere. But yeah.
Speaker 3:Okay. Basically, ore farming. Right?
Speaker 2:Yeah.
Speaker 3:You can think of, like, most things are are on some level, like, based off, like, interacting with other people. Like like any kind of if you're, you know, raising around, if you're gonna make some deal. Right? It's based off, like, your interaction with someone else.
Speaker 1:Yeah. People raise wanna raise from tier ones because every dollar is the same but you get to aura farm the Yep. You know, the the GP.
Speaker 3:Yeah. And then it's like like in like when you're raising around, you wanna be aura farming the v c. Right? Because they wanna be like, oh, this guy's pretty sick. Like, I wanna give him money or or something like this.
Speaker 3:Right? So basically, the idea is always be aura farming. Right? You always wanna be doing something that increases your aura because everything you do, like any kind of interaction you have, will be influenced by your personal aura.
Speaker 2:Yes. But stretch the Like analogy wearing
Speaker 1:a fedora of But
Speaker 2:stretch the analogy to the absolute limits. Sometimes when you farm, your lands grow fallow. And you have a failed harvest. And you can also salt the ground so that nothing will ever grow.
Speaker 1:No bounty.
Speaker 2:And so there is a world where you go out to ora farm, you set up your ora farm, but someone has salted the ground and you don't grow a single crop.
Speaker 3:Yeah. So that's like a I mean, that's a failed ora farm.
Speaker 2:Failed ora farm. So the question is, is this the sort to putting yourself in the cameo, it is it is an attempted aura farming. Was it a successful aura farm?
Speaker 3:Yeah. I I think most like, I would say in most cases, aura farms, you can only tell the success of a farm in retrospect.
Speaker 2:If it's successful.
Speaker 3:Yeah. So it's like in six months, we'll see. I think if people are still on Sora Yeah. If the app is still being used as a social media platform, not just like a creative tool Yeah. Then I think it will be a successful farm because now Yes.
Speaker 3:Sam is just he's just everywhere.
Speaker 2:It does feel like there's always a winner and a loser in an aura farm. And if you are aura farming
Speaker 1:Yeah, VCs will do this. They'll buy secondaries in a company to say they're an investor even though they didn't participate participate in a primary round.
Speaker 2:That's true. And then also And that's for every time a founder or a farms a tier one venture capitalist and then blows the company up in a major scandal, that reduces the aura of the fund that that put the money in. And they offend FTX. They got farmed. They got farmed.
Speaker 2:Yeah. It makes if you backed FTX, you got farmed. Yeah. You you you look bad.
Speaker 3:Yeah. Like, there's always two sides. Right? Because in Jordi's example, the the VC is farming the company. But when it gets when it gets exposed that they actually bought secondary, that they weren't real investors, then
Speaker 2:It's a negative aura.
Speaker 3:The company is farming the VC.
Speaker 2:Yes.
Speaker 3:They're like, oh, we're so great that But
Speaker 2:there must be positive sum aura farms, where two people come together. They grow a beautiful garden
Speaker 1:an emerging fashion brand partners with a legacy brand, let's say a streetwear company partners with Solomon
Speaker 2:Yep.
Speaker 1:They can both benefit because the streetwear brand is getting new legitimacy and Solomon gets to be culturally relevant and cool. Yes. And that is a positive sum, Yes.
Speaker 2:Sidney Sweeney and American Eagle. Positive sum, Orafarm. The stock's way up. Everyone's doing well in American Eagle world. Sidney Sweeney is back in the news and dominating.
Speaker 2:It seems like a win win. They Orafarmed each other successfully. They grew a new bountiful harvest together.
Speaker 1:It was more positive for American Eagle. It was more like net neutral
Speaker 2:Okay.
Speaker 1:I think for Sydney Sweeney in that she got a bunch of blowback from it. Did Got a bunch of attention, but it wasn't all positive. Whereas American Eagle, just the stock ripped and
Speaker 2:Yeah.
Speaker 1:Okay. Anyways, I have I have an interesting post here Please. That I wanted to throw in. It's from a guy named Robert. If we can pull it up in the timeline.
Speaker 2:Let's pull that up and I'll tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.
Speaker 1:There we go.
Speaker 3:Let's look those This post
Speaker 1:went super viral. This is Robert. Says, good game everyone. And he's charting total job openings versus the S and P 500. And he shows that when ChatGPT was released, there was this massive divergence.
Speaker 1:Now, a lot of people took this at face value. Yep. And they thought, okay, ChatGPT is just killing jobs.
Speaker 2:Yep.
Speaker 1:But I threw in another post here. That's used ChatGPT understands that it's valuable, but it doesn't replace them at work. Yep. Like, maybe I I I don't I haven't met somebody that's been like, hey, Jordy. Like, I have to admit I'd lost my job because ChatGPT just does it for me.
Speaker 1:Right? Yeah. It's there's certainly in key areas, like, Finn is, like, replacing, the need to add more CX But by and large, ChatGPT was not the catalyst. That's just totally reducing the number of job openings. So there's another person here from Simon Saris, who says, the zero interest rate era is going to become lost history because people want to make up a narrative around AI.
Speaker 1:The white collar bloodbath didn't happen because of a chat app release. It happened because of the end of Zerp, which occurred rapidly in 2022. So literally, when FTX like ChatGPT was released when FTX collapsed Yep. Effectively during within the same thirty day window.
Speaker 2:Yep.
Speaker 1:And so it really was a lot of CEOs woke up and said, we have to get a lot more efficient. We have to get more lean. Let's not hire a ton of new people. Let's do more with what we have. The AI narrative, from a from a job loss standpoint has also it's also, in some ways, I feel like been a lot more narrative driven and that CEOs are have a massive incentive to show they're getting more efficiency out of AI.
Speaker 1:Yep. And so they're just saying to their teams, like, I don't want you to hire more people. Just be more efficient. Yep. And even that by itself, just forcing people to say, like, no, we're not expanding your team.
Speaker 1:Yep. Just do more with less.
Speaker 2:Yeah. There was also huge pneumatic contagion from the Twitter buyout where X was able to run with, like, one fifth of staff and the service doesn't really go down in their shipping features. And so I think a lot of CEOs just kind of Saw that. Adopted a year of austerity, a year of efficiency, and wanted to test what they could do with less. And so they pulled back.
Speaker 1:So yeah, there's Seven different are scaling headcount rapidly. Yep. Anthropic is, you know, hiring teams to, you know Yep. You know, capitalize on all the demand they have. And they're some of the most, you know, AGI pilled of anyone.
Speaker 1:Right? And so you have to read into what what people are are actually doing. And certainly, there's been massive job job creation in in the kind of startup ecosystem broadly just because of, you know, we were talking yesterday with a friend. Seems like every we've we it's become so normalized, but it feels like every day there's like, just on TBPN, like, at least a 100,000,000 of new funding announced. Usually, like, you know, half a billion Yep.
Speaker 1:At least at least lately. And so all you know, a lot of that is gonna go into hiring teams. Yep. And so anyways, this this original chart, I thought it was worth calling out.
Speaker 2:Yeah. It's important to reality check the put one chart over the other and see if they line up perfectly. We had some updates from Tyler Cosgrove.
Speaker 1:Yeah. There was another chart. We we were asking. Somebody had made a chart tracking the nasdaq.com bubble to And this person effectively did graphic design to make them look like they match up perfectly by the day.
Speaker 2:So And
Speaker 1:it looks so perfect. And Tyler spent twenty four hours this week trying to recreate it and no matter which index he was looking at Yep.
Speaker 2:Yeah. Take us through the thought process, Tony.
Speaker 3:Yeah. I I just sent it in the chat. But, basically, it's it's supposed to be Nasdaq from 1990 to 02/2001, and overlaid on top is 2023 to now.
Speaker 2:Yeah.
Speaker 3:And then yeah. I mean, they just, like, don't line up. Like, you you like, you can kind of see, like, there's a little spike,
Speaker 4:and it goes down
Speaker 3:a little bit and rises.
Speaker 2:So the person just, like, made up the data or something?
Speaker 3:Like It's it's
Speaker 1:one would ever do that.
Speaker 3:I don't know if it's, like, literally made up, but can tell us it's
Speaker 2:This is the original post. Right?
Speaker 3:Yep. So time scales are Yes. Are not lined up correctly. Okay. And then
Speaker 2:Oh, so they compress time on one of the charts and not on the other.
Speaker 1:Yep.
Speaker 3:Yes. And so even when I even when I did that Okay. I they still wouldn't really line up. So I think certain parts of the graph are more, like, compressed than others
Speaker 2:Okay.
Speaker 3:To make the kind of, you know
Speaker 2:Yeah. So it's like a linear scale, then a log scale, then a linear scale. It's the ultimate chart crime.
Speaker 3:Yeah. This is I think this is pretty bad.
Speaker 2:Do you have your actual overlay available? Can we look at that?
Speaker 3:Yes. Let me let me pull it up.
Speaker 2:I would love to see that. While you pull that up, let me tell you about Graphite code review for the Age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 1:That when I get that sound effect. I know you're gonna
Speaker 2:Oh, yeah.
Speaker 1:Amp up the WPW.
Speaker 2:Fire me up. While he's pulling that up, John Galt shares websites should be this again, waiting for the first company to authentically do it. Everything looks like a venture capitalist yoga retreat website at the moment. It's from the Sony website in 02/2002, web design history. We remember when we pulled up the old iPhone website on Apple in 02/2008?
Speaker 2:And we were like, oh, it's gonna be like all iPhone focused because it was the iPhone It was
Speaker 1:the MacBook.
Speaker 5:It was
Speaker 2:like the MacBook Air and like the iPhones off to the side and said, high technology is one of the features that you get with the iPhone. I like this. I wonder if this convert, how bad this would be. I wonder if someone's actually going to take this post and run with it and build a site that looks like this. We've seen some cool people do interesting things with web design.
Speaker 2:Posthog had a very cool website. There's still room for innovation in the website. Have fun. Do something different. Don't just copy Linear.
Speaker 2:Our sponsor, Linear, is the tool for it's a purpose built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, product
Speaker 1:your favorite products are built using linear.
Speaker 2:That's all So you need to do we have the actual truth zone edition of the stock chart? Okay. There's some overlap there.
Speaker 3:Yeah. I mean, they're both But it just rising.
Speaker 2:Yeah. They're both rising.
Speaker 1:They're both up into the right.
Speaker 2:But, yeah, they're it's a wildly different time scale. Yeah. And that and that little, like, like, that, like, dip and then pick back up does not line up at all.
Speaker 1:Yeah. Like Well, now it's tariff driven.
Speaker 3:You can line up certain parts of it. Yeah. That that was the big That's that big
Speaker 4:dip. Yeah.
Speaker 3:And you can, like, line up certain parts of it, but then the rest of it doesn't doesn't work.
Speaker 2:So Yep.
Speaker 3:If you shift it around, like, you shift actual time scales of certain parts of the graph Sure. Then I think I could get it to line up.
Speaker 4:Yep. Yep.
Speaker 2:Copy the red line and make it a different color and just offset it by a little bit and be like, I'm going viral. That's the secret. That's the secret. Well, if you want to do your own analysis, head over to julius.ai, chat with your data, get expert level insights in seconds. It's the AI data analyst that works for you.
Speaker 2:And so back on Sora2 and the question of energy, Zephyr says, Pretty sure OpenAI made an algorithmic breakthrough. Sora2 is a much smaller model. Tyler, I don't know what you think about this, but Andrew Main is saying, Another interesting metric is that VO3 costs $3.2 per eight second clip. You get $3 a day. That's $10 a day.
Speaker 2:I get I pay $2.5 So they're basically pay like if I use all my VO3 credits on Google's top tier of Gemini, I'm breakeven. But Sora currently gives you 110 second clips per day. That's $320 of video generation per person for free right now if that's what they're doing. I think they'd eat that cost all day long. What do you think?
Speaker 2:Do you think that they've actually brought the cost down to $0.32 per clip to $03 per clip? Where do you think it's going?
Speaker 3:Yeah. I mean, I would be very surprised if if it was, like, the same kind of cost as the v o three.
Speaker 4:Mhmm.
Speaker 3:I would if I had to guess, I would say maybe, like, 10 x. So maybe it's, like, 30¢. But even then, that's, like, pretty steep. That's like pretty hard to squeeze that out.
Speaker 2:I just think like they gave me $100 I've generated $6 over three days. Have you generated $300 No way.
Speaker 3:Yeah. I'm at like $5
Speaker 2:You've done $5 And we're like kind of power users, early adopters, really testing this for work. And then they're also rolling out the invites slowly. I wouldn't be surprised if this is yeah, it's $3 a prompt, but they're just going to eat that for a while until it gets to scale where I mean, if it's a million new videos a day coming on the platform, that's only $3,000,000 That's only $1,000,000,000 a year. Like, they can eat that, right?
Speaker 1:It's only $1,000,000,000 a year.
Speaker 2:It's only $1,000,000,000 That's really nothing for OpenAI. They're a $500,000,000,000 company that's raising tens of billions of dollars every second. And they and and and what's at stake? Like, winning the next social platform. Like like, really eating the trough The trough wars.
Speaker 2:The trough wars are gonna be fought one ten second clip at a time no matter what it costs. Well, people are still doing things the old fashioned way. Ramp is doing things the old fashioned way. We talked about this earlier in the show, but Kareem says, Sora too is insane, unbelievable. And he got a community note on it because Ramp published a launch video that it was shot with a real camera, and the community notes team put him in the truth zones that it was not
Speaker 1:created by Sora.
Speaker 2:It's a real commercial. I think that helps with the virality. And it helped. Kareem got 400,000 views on this, 450,000 views.
Speaker 1:I wonder what percentage actually just believed it was Sora, too.
Speaker 2:I saw someone in the chat saying they think it's Sora. I don't know if they were joking. But I do think some people it's hard to tell. It's hard to tell these days.
Speaker 1:Well, we have an amazing announcement
Speaker 2:What's that?
Speaker 1:Which is that there are 19,000 private equity funds in The US, and there are 14,000 McDonald's in The US. We have more private equity funds than McDonald's. And I just I think it's important to recognize this moment, I this
Speaker 2:wonder how that's calculated. Does that count like an LLC that holds a sports car in Montana is technically a private equity fund? Are we talking like there's a real office with a couple people that are buying companies with debt and equity? Like, is it a true private equity fund? Like, what's the scale?
Speaker 2:There's probably some crazy power law, right, where KKR is like here, and then there's like some company. Yeah. Yeah. What what's the
Speaker 1:what's accounting funds for ants?
Speaker 2:What's the median size of that private equity fund? I would love to know that. Anyway Yeah. We can dig into it more. Speaking of budgets, the government is about to shut down.
Speaker 2:And It's already the polymarket isn't
Speaker 1:Isn't it already shut down?
Speaker 2:I believe it did shut down. Yeah. Not good. Parties fight to cast shutdown blame. You know you know, do people like the government?
Speaker 2:I don't know. Do it seems like a mess. Deleon was on the show laughing about, like, how no other country just shuts down the government. Do you have the polymarket on when the shutdown might end? That seems like a useful useful data point for us to track.
Speaker 2:Can you
Speaker 1:pull it up?
Speaker 2:Hours into the government shutdown, the White House issued new threats. Congressional leaders were digging in and some rank and file Democrats and Republicans were searching for a way out. Senator senate majority leader John Thune and vice president J. D. Vance said they are open to talking to Democrats about extending expiring health care subsidies, but won't negotiate as long as the government is closed.
Speaker 2:Democratic leaders said they won't agree to reopen the government until their health care demands, at least some of them, are met. When does Polymarket think it's
Speaker 1:going happen? Vast majority of folks, over 70%, think that it'll be October 10 or beyond. 44% So we're tenth. Believe.
Speaker 2:October 10, that's our one year anniversary, I believe. Really? Something like that. You know Fantastic. When the government reopens, and we can celebrate the one year anniversary of this show.
Speaker 2:In other news, Apple is shelving development for the cheaper, lighter Vision Pro, the Vision Air, planned for 2027, and they're prioritizing a more urgent effort developing AI smart glasses to rival Meta. This is interesting. There's some debate over whether or not this is actually going to happen. Apple's a big company. They could just be working on multiple things.
Speaker 2:But the news from Mark Gurman is that they are reorienting. So the company, Apple, had been preparing for a cheaper, lighter variant of its headset, codenamed N100, for release in 2027. But Apple announced internally last week that it's moving staff from that project to accelerate work on glasses, according to people with knowledge of the matter. Smart glasses have emerged as a critical arena for tech companies, which are racing to develop AI centric devices.
Speaker 1:That's crazy that Meta's making them dance.
Speaker 2:Making them dance.
Speaker 1:Duck's making them dance.
Speaker 2:Tim Cook was watching our Meta Connect coverage and was like, I wanna hit that gong with those guys. Let me do it. I gotta make some glasses.
Speaker 1:Someday. Someday.
Speaker 2:I I gotta get my own Rocco Basilisk. I gotta get
Speaker 1:There's only one.
Speaker 2:My own my own Rocco. Yeah. What what could they do? Oliver Peoples, is that owned by Luxottica as well?
Speaker 1:Also.
Speaker 2:Also owned by Luxottica? Where where will Apple go? I think Apple will not try and partner with a fashion brand. I would make that prediction that they will do their own, and they will look like AirPods, and they will be mostly all white, and they will be a big status symbol to let people know that you have an Apple product on your face. Face.
Speaker 2:And there will be a couple of different colors. There will be different colors every year. But Apple will try and own that design language. Apple has done a few partnerships. Didn't they do an Hermes band for the Apple Watch?
Speaker 2:I believe they did that and a few other collaborations. But Apple generally has been pretty limited on the let's partner with Nike. They've done a little bit there on the running side. But in general, they have not done a lot of like, this iPhone is co designed with another brand. Yeah.
Speaker 2:It's just you can get a case from them. We'll give them the design. It's up to them to do whatever they want. You can get the Louis Vuitton, you know, colors and whatnot design.
Speaker 1:One more post before our first guest. There's a post from Modest Proposal who's sharing a screenshot from a transcript of Patrick's interview with Dylan Patel. Patrick says, yeah, he's doing demand guarantees. He's doing all this crazy stuff right now. Course, they're talking about Jensen and Nvidia.
Speaker 1:Dylan says, yeah, right, right. He's using his balance sheet to win, try and win more, which is an interesting dynamic. I don't know if there's ever been anything this in terms of the anti competitive nature of this where you backstop clusters. CoreWeave recently got a deal with NVIDIA where they backstopped a cluster. So that's saying, if you buy this and bring it online, we will guarantee the demand is there.
Speaker 1:Dylan continues, now Core Weave would have never built this cluster because it's for short term demand. And renting GPUs on short term is a terrible business model. You want to do long term contracts and you want to do long term contracts with people with balance sheets, that's the golden goose. But that doesn't exist so much. Important point.
Speaker 1:So you do long term contracts with people who don't have a balance sheet, OpenAI. And if you can't do that, then you'll do short contracts with people who do have a balance sheet. There's this whole matrix of who you rent GPUs to, but from NVIDIA's interest, it's You know what I really love is when venture capitalists fund a company and then 70% of their round is spent on compute. They effing love that. Talk about NVIDIA.
Speaker 1:Right? And that's what's happening with all these companies. Whether it's physical intelligence, they're spending a lot on robot arms and SHIT too, but they're also spending a lot on compute or it's any other startup that's raising Cursor, etcetera. And even if it's not directly, it's indirectly going to GPUs. They love when people spend their entire round on GPUs.
Speaker 1:It would be really good if this wasn't a two year deal or a three year deal for that compute. If it was, you can spend 70% of your round on one training run, leave a company with these ideas, gather the data, do the training run, and then you have a product and you show how good the model is and try it and raise again. That would be really great for NVIDIA. But no one wants to build a cluster who's predicated on that as a business model. That's crazy.
Speaker 1:So they have to backstop a cluster to do that.
Speaker 2:Yep. Before we bring in our next guest, there's a related article in the Financial Times. One of Britain's best known tech investors has warned of a disconcerting rise in artificial intelligence valuations, saying NVIDIA's planned $100,000,000,000 investment in OpenAI brought uncomfortable echoes of the .com bubble. This is about James Anderson, who is at Bailey Gifford. He had a massive position in NVIDIA.
Speaker 2:He was the largest that was his largest holding. He's now in Chinese battery maker, CATL, Kettle. And he said, I have to say the words 'vendor financing' do not carry nice reflections to someone of my age. And so the yes. The echoes of the .com bubble are growing louder.
Speaker 2:Well, we are pleased to be joined by someone who is building in a completely different space. We have the chief operating officer of Axon. The president. The president of Axon. I was reading the chat.
Speaker 2:Little misinformation. Josh? Welcome to
Speaker 6:boys. Good to see
Speaker 2:Thanks for having me. Thanks for hopping on.
Speaker 1:What is this setup here?
Speaker 2:Looks amazing.
Speaker 1:That that looks incredible. Space.
Speaker 2:Virtual background.
Speaker 1:You're in the command center.
Speaker 6:Yeah. Yeah. We have some folks at Axon who just on their own come out. They just churn out new Zoom backgrounds. Every time I open Zoom, there's, like, five or six options to choose from that I've never seen before.
Speaker 6:So this one looks pretty cool.
Speaker 1:It's looking great.
Speaker 2:Can you take us through kind of the shape of the business today, maybe a little bit about your journey, just to kind of set the table for those who might not be familiar with the business?
Speaker 6:Sure. At Axon, we make, pretty much all the cool technology that police officers use day to day. Yeah. Everything from their taser gun to, their body camera to all the SAS software and digital evidence management to all their reporting products, drones, virtual reality police training. We really believe that, we can add a lot of value in a lot of different spots where really software and hardware intersect in policing.
Speaker 6:And so, I've been at the company sixteen years, two year or two months sorry, two weeks after graduating college.
Speaker 2:Wow.
Speaker 7:I drove across
Speaker 6:the country to to join Axon, and here I am.
Speaker 2:That's amazing. What's been the most recent, transformation in the business? I was talking to somebody, about this category and, very experienced investor. He was like, oh, no one's really made it work. And I was like, well, what about, like, Axon?
Speaker 2:They seem to be doing pretty well. And he was like, oh, it's not that big of a company. And then we looked up the market cap, and it's a huge company, and you've been massively successful. But what what what has been the ma like, biggest transformative moment over the past five years for the business?
Speaker 6:Sure. I think, really, for the first twenty five years of the company's history, it was really about hardware.
Speaker 2:Sure. And in
Speaker 6:the last five years, it's been far more about software. So we manage more than 40 times as much content as the Netflix library combined. So we're managing all of this police evidence in the cloud, and and figuring out how to make use of this massive dataset for our customers has been the name of the game. So most notably, a couple of years ago, we released a product called DraftONE, which is a Gen AI product. It analyzes the body camera transcripts and creates the first draft of the police report for the police officer.
Speaker 6:So cops spend about 50% of their time writing police reports. We think we can make that, like, 10% of
Speaker 2:the time.
Speaker 1:So it's a good use
Speaker 5:of Gen AI.
Speaker 1:So is that something where an officer in the middle of an action let's say they're pulling somebody over for speeding, do they talk out loud and say, all right, where is that data coming in from? Because I could imagine they're just kind of John actively uses transcription with ChatGPT, so we'll be talking about something, and then he'll you know, be prompting it just with voice. I could imagine an officer does the same thing where they're saying like, hey, I'm pulling this over. I'm at this, you know, intersection. I, you know, clocked them going 20 over, and and then that just gets built in, or what is that workflow like?
Speaker 6:Sure. So it's a great point. Cops are getting better at prompting, the AI to, to, you know, improve the quality of the police reports. But even without doing that, just in the normal conversation, you can imagine that same incident when the cop walks up to the person's window and says, hey. You know, you're speeding.
Speaker 6:You're going 20 miles an hour over the Yes.
Speaker 1:I guess. Limit. And Yeah. Still pick that stop
Speaker 2:Yeah. And and even just like, like, what's your name? And then the person says that. And then that's in the audio file. And then that gets transcribed.
Speaker 2:And that's just like so much manual work. You're not putting anyone out of a job. You're just making their life better. It's it it feels like a fantastic use of artificial intelligence. Very exciting.
Speaker 1:You guys have been you guys have been super acquisitive. I think you've done a number of acquisitions, but recently completed it was an 800 ish million dollar acquisition. We got a gong here. We'd love to we'd love to, you know Yeah.
Speaker 6:It was about 630,000,000. It was Prepare AI.
Speaker 1:There we go. Love that.
Speaker 6:Have a partnership well at headquarters. Nice. Big deals. You hit
Speaker 2:the gong. I love that. Of course.
Speaker 6:We're excited about those guys joining the company. Their founder, Michael Chime, super, super talented, and, very happy to have him as part of Axon.
Speaker 2:Is is is the strategy with that deal, to to kind of diffuse the technology over everything you do, keep it as a separate business line, cross sell it? How are you thinking about that?
Speaker 6:Yeah. So our mission is to protect life. We want to keep people from getting killed in in policing incidents to include police officers. And the best way we can do that is shrink the time between the incident taking place and help being on the way. Right now, that's like a two minute cycle.
Speaker 6:Someone calls 911, they talk to a call taker, call taker talks to the dispatcher, dispatcher figures out the right officer to to send to the scene, and we think we can automate that entire process in partnership with Prepared. So essentially, 911 based on the metadata of the call. Drone has already taken off to head to the incident. You know, over time, we think we can route the proper police officers, to those scenes without a lot of human intervention. And so that's a lot, of what we have to look forward to, with with Prepared moving into the future here.
Speaker 1:You guys are at the stage where you're a true platform multi product. I'm sure you started with you know, I don't know the exact the the the first product. But in this category, is it how hard is it to get point solutions through? I'm at you know, and if you're just building for other start ups, like, you know, a typical YC company, for example, they can build a really narrow, simple point solution, sell that into somebody in their batch. It's pretty easy.
Speaker 1:You know, these aren't, you know, super sophisticated operations. Whereas selling into police departments, imagine just the just just the timeline alone of of building that relationship is probably really hard for for a young company. I guess, like, talk about the different maybe stages of the companies and getting to the point where you're truly a platform.
Speaker 6:Sure. The the biggest part is, you know, you have to recognize that US public safety is less than a million total users. So a lot of, startups wouldn't even be able to get funding based on that TAM, you know? And so when you go into public safety or, defense tech or, you know, this this segment, you really have to be confident you can build something for the long term where you can win the majority of the users on your platform. That's really the only way you can have a viable business model in this space.
Speaker 6:And so, you know, we look at this like, hey, you know, there we start with the most talented teams we can find then the most product synergy. And so with a company like Prepared or one like Fusis that we acquired last year, we really believe we can help accelerate their growth by plugging them into our ecosystem and, you know, the products nicely play off each other. And, you know, with police, they want to outsource as much of the technology as they can. They don't want to build things internally, to, you know, to capture their use cases. And so when we can show up with a really nice end to end workflow from what we call capture to courtroom, that that really has a lot of value to our customers.
Speaker 6:And so that's part of our our thinking and hypothesis as we look at M and A and which companies to partner with.
Speaker 2:In terms of that platform, is there demand from local law enforcement agencies for you to play nice with other companies, build some sort of open API? Is there another kind of enterprise resource planning backbone that they want you to plug into? What's kind of the the the software supply chain of a modern police department look like these days?
Speaker 6:Yeah. It's a great question. And and the short answer is yes. You wanna build something that's open, that at the end of the day, this isn't about trying to help people make more money or make more effective ads on the Internet. This is about fighting crime and saving So people's when you do those kind of sketchy things where people don't have access to your data or you don't, you know, you don't work well with others, you're ultimately undermining the police department's mission of protecting their communities.
Speaker 6:And so for us, we try to look at this like, hey, we want to be the Switzerland in this space. And regardless of the hardware inputs or the software outputs, we want to play nice and leverage open APIs to to help our customers achieve what they're setting out to do.
Speaker 1:What, robotic form factors are you guys most bullish on over the long run? I'm sure you've leveraged a lot of drones. Is there any other we we we had Tony from DoorDash on this week who built a really cute robot for delivery Yeah. L four autonomy. What are you guys thinking about?
Speaker 1:Are are drones enough? Are there other things on
Speaker 2:the Steeds, we want
Speaker 6:So the reason I'm smiling is I thought that, like, I pitched our founder Rick on this idea, like, two years ago to do this big hugging robot, like the Michelin Man. Just imagine this thing kind of walks down the street
Speaker 2:It's like Big Hero six.
Speaker 6:Criminal and takes them into custody so people aren't as scared of robots. I don't think that one's in our future, but, the thing I'm most excited about is Fairhut. The ability to put less lethal on drones. So you can think of a school shooting, taking place. If you have drones in nests in the in the roof of a school, there's no reason those things can't be equipped with taser technology.
Speaker 6:And they can fly autonomously. They have targeting software. For us, a a a end user, you know, a police department, would always decide when to use force. That would not be autonomous. But this idea of finding ways where we can keep people safe in these mass shooting incidents before first responders ever get there, that's that's very interesting to us.
Speaker 6:Over the over the next few years, we hope to be playing in that space more and more here with, with some tools that can really, you know, again, shrink the time frame where these incidents are happening from when they start to when they're concluded.
Speaker 1:What about somebody in the chat is asking about technology for, you know, firefighters, like, wildland firefighters. We're here in LA. As the fires unfolded at the beginning of this year, it felt like they were so they they had too little technology. At least that was the perception. We had firefighters relying on the nonprofit fire tracker that kept going down because they didn't even have capacity.
Speaker 1:What are you guys doing on that front? It's a tough market because fires are so unpredictable, but certainly feels important.
Speaker 6:Sure thing. Sure thing. I think the most interesting thing I've seen in that space to date is these drones that carry thousands and thousands of pounds that can stay in the air for hours. And you can imagine, you can actually string those along, with, you know, with very lengthy fire hoses and fly out into the fire and try to contain the fire from within. Like, those types of, improvements, through the air, I think, will help.
Speaker 6:I think in software, it's a little bit of what you said. It's predictive. It's based on the wind. I'm not sure that's like a major game changer. I think you've got to find a way to get water faster and more reliably into these fires.
Speaker 6:And it feels like drones over time, especially as they can carry more and more weight, will be, you know, a reasonable kind of creative way to to to help there.
Speaker 2:What what are your current thinking around facial recognition? Obviously, image generation or generative AI is getting so much better, but there's different parties. How are police feeling about it? How are different communities feel about it? Does it differ from township and city to city?
Speaker 2:How are lawmakers thinking about the trade offs there? It seems like one of those conversations that's, like, forever ongoing, and maybe that's the best process in a democracy, but how are you thinking about it?
Speaker 6:Yeah. I think you characterized that well. You know, The United States is one of the few markets right now where facial recognition is not used in policing, and we haven't participated, in that market yet. I do think we're more interested in it now. The thing we've been waiting for is to be able to demonstrably show that the algorithms are rid of racial bias.
Speaker 6:I think that is certainly something that is worth making sure that you got that right. Ultimately, up until now, we haven't felt comfortable with the technology, but it is improving and we're seeing those improvements. And so as we start to kick the tires on what this looks like ethical design principles and like we say internally, helping make the right things easier and the wrong things harder, but that's gonna be kind of at the center of our thinking as we as we think about facial recognition on fixed cameras, on body cameras, and so forth.
Speaker 2:Yeah. Where's the, where, who has ball control on that narrative? Someone in the chat was asking about this documentary, All Light Everywhere, very small box office. I hadn't heard of it until this person mentioned it. Are there other communities or nonprofits?
Speaker 2:Or I mean, we talk about AI all day, and there's this guy, Eliezer Yudakowsky, who's kind of like defined like the AI doom scenario of like super takeoff. And there's a couple of thought leaders. The Dwarkash Patel Show is talking about trade offs in AI building. Who who are the key thought leaders, influencers, groups, public groups, or nonprofits that are actually defining the conversation there?
Speaker 6:Sure. I think a a big piece of it on the policing side is major county or major county sheriffs and major city chiefs. Those are the large organizations that that, you know, that kind of, paint the path forward, on on what the priorities are for public safety. But I think, ultimately, it's it's going to be very political. Like, we we need to get to a place where mayors and city councilors and all all you know, the the downstream folks they serve, the community, is is looking at this saying, hey.
Speaker 6:There's there's far, far, far more good than harm here in in this technology. And it's it's progressing, albeit slowly, but I do think we're getting closer to the, to the point where we can say, hey. Look. You know, there's there's everybody should be interested in equipping public safety with ways that you can reliably fight crime and keep constituents safe. And between, mayors and city councils and the police chiefs and sheriffs, I think that's the key combination, folks coming together on this one.
Speaker 2:What about, on the hardware side? It feels like that piece of the business is pretty stable. But is there anything interesting happening that you can share on there's this big American dynamism movement, make stuff in America. There's a trade war. Like has anything shifted your thinking about manufacturing just hardware devices in America or for your business over the past few years?
Speaker 6:Yes, for sure. And as a company that's sold to to not only U. S. Public safety but the federal government and federal law enforcement for a long time, we've we've always manufactured in The United States. So Scottsdale, Arizona is where our headquarters is.
Speaker 6:Hopefully, it will be in the future. We got a lot of drama around that right now, but if we can get past that, we'll keep building TASERs and body cams in Scottsdale, and we're proud of that. We're supporters of the Buy American Act. We think it's in the best interest of the company to have all of our defense equipment made here. And so, we're happy to participate in that process.
Speaker 2:How how crazy valuable is an individual person in, the manufacturing process? There's been this debate going on in Silicon Valley about process knowledge, this idea that I don't know if you've been tracking this, but Mark Zuckerberg has been paying hundreds of millions of dollars to people that know how to train just a very specific set of skills on how you train a large language model. And once they know that information, once they know how to do it, they're worth so much because they understand how to do it and no one else does. There's been this debate about, well, could we do the same thing with semiconductors and bring some people over from Taiwan and know how to make that, make it in Arizona where their TSMC is already set up. But does the same thing exist in the world of, like, hardware manufacturing?
Speaker 2:Is is that even something that exists, or is it more diffuse?
Speaker 6:It exists to some extent. I think, you know, for us, all of our cartridges, the the things that go in the tasers that have the darts in them that fire out, those are all made by, by robots. They're all automated at this point. So we make millions of those every year. So the idea of people kind of hand winding darts and so forth, gets expensive.
Speaker 6:And so robots are expensive too, but they scale really well. And so ultimately, we've really made a big bet on automation for TASER manufacturing. And we think it's the right bet. We've had automation for years and years, but we continue to invest more in it. And frankly, the people who know how to do that really well, like you said, they might not be as valuable as some of the folks on the cutting edge of LLMs right now, but they're very valuable to us.
Speaker 6:And we've to make sure manufacturing automation is one of the things we continue to be really, really good at.
Speaker 1:Yeah. Awesome. Well, thank you for the updates, and come back on when when you guys do your next maybe the next acquisition will, you know, hit hit the $1,000,000,000 mark, but always welcome in the in the in the 600,000,000 range.
Speaker 2:Sorry for keeping you over time. Thanks so much for hopping on. This was great.
Speaker 6:Congrats on all your success, and looking forward to seeing you again soon. Thanks for
Speaker 2:talking to soon.
Speaker 1:To meet you, Josh. Cheers. Bye.
Speaker 2:Gotta look up the Axon market cap stock chart. It is it's beautiful. It's a thing of beauty. Up a 128000% for all time. IPO'd, according to Google, in 2001 and just went
Speaker 1:out Wow. Had no idea.
Speaker 2:It's a $55,000,000,000 company now. Yeah. It's it's really big. Well, back in the startup world, Dheesh Jain is announcing Mosaic, an agentic video editor. I definitely want to give this try.
Speaker 2:He says, in a world trending towards AI slop, create something real. There's no wait list. There's a
Speaker 1:public Wait. Beta We gotta we gotta pull up the video.
Speaker 2:Let's pull up this video and see. Is it slop or not slop? How are we feeling? Comment Mosaic, and you can get some credits. Let's watch this launch video.
Speaker 1:They didn't bring us here to change the past.
Speaker 7:Mosaic. Mosaic.
Speaker 2:Mosaic. Mosaic. Mosaic. Mosaic. The real test, was this built in Mosaic, or was this After Effects or Premiere?
Speaker 2:I
Speaker 1:can see this being pretty good.
Speaker 2:Yeah. I think so node based workflows are really popular like this where you wire things together because then you can repeat the process very quickly by just dropping in a new base clip. All the so if you say, I want to use AI to remove the background, add subtitles, we have a workflow for this that we've defined with clips in code, but oftentimes, it helps to just be able to have a node based workflow that you can just like wire up and understand where each piece goes to the next, overlay the text. DaVinci Resolve is doing this and a lot of other like the next generation of Blender and Houdini have all moved to node based workflows. Cinema four d recently moved to a node based workflow.
Speaker 1:Well, I like that. I I thought it was a good video focused on the actual product Yeah. You could do with it. It shows you how it I was worried because he was the the founder said in the era of AI slop, and then it looked like like it was just gonna be a bunch of clips No. Of
Speaker 2:No. No. This is very clearly stolen footage from Interstellar. Doubt that they licensed it, but but that's fine for one second.
Speaker 1:Yeah. I think that isn't it legal to do use it for, like
Speaker 2:Yes. It would be transformative. It would be fair use. Yep. Probably.
Speaker 2:You know, I wouldn't you know, you gotta talk to a lawyer if you wanna get it.
Speaker 1:DD DOS is sharing some news from earlier. Lot of people have already seen it. Probably OpenAI wrapped a $6,600,000,000 share sale at 500,000,000,000. This wasn't primary capital. This was employees selling into it.
Speaker 1:Sale Diversify short of the 10,300,000,000.0 that was authorized. But
Speaker 2:Does that mean it was oversubscribed? Does that mean that 10,000,000,000 of demand came in? They went to the employees and said, you can sell up to 10,000,000,000 employees held? Is that what happened? I I have to dig into it.
Speaker 1:Okay. Yeah. So it says with insiders seeing this as a sign of employee confidence
Speaker 2:Yep.
Speaker 1:And continued investor demand.
Speaker 2:Was hearing that
Speaker 1:people were getting cut down. Yeah. So That could be that could be a spin. Sure. By being like, employees don't wanna sell.
Speaker 1:Yep. But I think a lot of employees at 500,000,000,000 are probably, you know, happy happy to to to convert a meaningful amount Yep. Into liquidity just given just they'll they're smart. They're running the comps. It's life changing money.
Speaker 1:They can see, like, you know, I'm sure you can you can still be very bullish on the business and want to sell even half of your position, right, at 500,000,000,000. You know, many people weren't weren't underwriting that when they joined the company. Right?
Speaker 2:Yeah.
Speaker 1:It's 8 and a half million per employee on average, apparently. Yeah. And so Didi says, thanks, Chat Chat GPT, for absolutely destroying the SF real estate market. So even after taxes, these employees are all gonna be sitting there being like, it's time to hit market buy on Zillow.
Speaker 2:Will they be buying in San Francisco? They might be renting in San Francisco and buying in Incline Village, getting those Nevada taxes going.
Speaker 1:I don't know. They're in they're in office. I don't
Speaker 2:think They might be in Menlo Park, know, Atherton. Yeah.
Speaker 1:Bay Area broadly.
Speaker 2:They might be yeah.
Speaker 1:Bay Yeah. Area The the challenge is like, you know, hundreds of employees sold into this. And if you look at how many nice single family homes that are move in ready are available, I'm sure it's less than the number of employees, right? So if everybody rushes to buy a home, it's going to really spike prices.
Speaker 2:It doesn't feel like it's happened yet necessarily, right? It feels like there was a time when SF real estate was really hot, and then it sort of sold off, I believe, during the pandemic.
Speaker 1:Could buy
Speaker 2:Remember?
Speaker 1:You could buy like a two bedroom condo in SF, you know, not in the nicest area Yeah. But for like 600 k.
Speaker 2:But that was down from like really elevated prices. Totally. Totally. So we went we crashed, and now we're we're we're predicting a resurgence. And I mean, it feels like it will come back.
Speaker 2:I mean, San Francisco has been, you know, on a tear in in a bunch of different ways. It seems like it's more, like, a better place to actually settle down. But still, there's always the pull of South Bay of what's
Speaker 1:up Yeah. It's it's it's interesting because it still looks reasonable maybe because we're in LA. Obviously, home prices are are crazy here too. But you can get a four bedroom for 1,800,000.0. That seems reasonable.
Speaker 2:Take the money and run to the to the Ozarks. Do you see the story? No. First, let me tell you about Fault, the generative media platform for developers. The world's best generative image, video, and audio models all in one place.
Speaker 2:Develop and fine tune models with serverless GPUs and on demand clusters. There's a very cool video that we are featured in that was generated on fall that we will
Speaker 1:I saw that.
Speaker 2:Show later in the show. We have but we only have five minutes until our next guest joins. But the article from Performative Mail says, This is the biggest, toughest article I've done about so called AI psychosis. It's the story of a man who committed a horrific crime in his youth, but served his time and, against all odds, found love and a new life, one that swiftly unrattled after he started talking to a chatbot. He grew obsessed with an AI chatbot, then he vanished into the Ozarks.
Speaker 2:What a wild story. John Gantz Super dark. Terrible crime. Very dark. Always tough to read into these anecdotes and see, like, how widespread is this?
Speaker 2:Would this have happened without AI? Would would this person be deranged by something else? A book. Did you get one shotted by Walden? The the book about going and living by a lake.
Speaker 2:Who knows? But you can go read it on Rolling Stone if you wanna dig into that piece.
Speaker 1:Petrini says, is highlighting or quoting one of his own posts saying Korea's financial news is so ridiculously lit. It's a bunch of sad ants crying and the and the Samsung chart just goes Oh, that's hilarious. And Satrini says this article was posted like twenty four hours before the absolute bottom for Samsung.
Speaker 2:The ants are very happy now. Let's go.
Speaker 1:The ants are so back. Yeah. I have push never something been a to Samsung shareholder.
Speaker 2:No. But Samsung is I mean, they did that big deal with Elon for Tesla AI chips, I believe. So, you know, they're certainly getting in on the AI boom. Well, econ kids will see this and think I should give this guy money to help me get rich. And it's two of the most crazy looking individuals.
Speaker 2:I don't recognize either of these.
Speaker 1:This is The guy on the left is is a rapper. What's his name, Tyler?
Speaker 2:Oh, yes. He was the basis of Spring Breakers. This is Riffraff? Riffraff. This is Riffraff.
Speaker 2:I don't know that he's actually done a get rich quick scheme or like
Speaker 1:No. They just said there are some guys out there that
Speaker 2:look like somewhat like it's a very evocative post by Rob Frund.
Speaker 1:We haven't seen a course, bro, just sell a course called How to Make Money, just reasonably priced and just really breaking down, you know, here are the different ways that
Speaker 2:It's econ one zero one, baby. Tyler Town. Conversations with Tyler. All
Speaker 1:sell services yourself. Yep. You can sell services that you deliver through a team. You can buy something for one price and sell it for a higher price. Yep.
Speaker 1:And that's pretty much it.
Speaker 2:Yeah. Naval kind of one shotted that entire category with the how to get rich without getting lucky thread.
Speaker 1:He should have dropped it
Speaker 2:for you. Didn't need to because he summed it all up in a series of like 20 pithy tweets. And you can just scroll and be like, yep, that's the algorithm. Yep. Anyway, Mountain Cash Flow says, always exciting when you see a new letter get added to the end of EBITDA.
Speaker 2:What is he talking about? What's the latest one? I did a sale lease
Speaker 1:Community adjusted was the classic.
Speaker 2:Community adjusted what was that? EBIT CR, CA EBITDA, or EBITDA CA, I guess? EBITDA ka? I don't know. Don't know if there's a new one that's going around.
Speaker 2:Because the AI companies aren't even talking about EBITDA yet. It's all ARR and LOIs and just top line
Speaker 1:NVIDIA's only company with profits.
Speaker 2:Yeah. So they haven't had to dip into some crazy EBITDA calculation. I don't know who is, but stay alert.
Speaker 1:Talk about cash flow.
Speaker 2:Yeah. And if you're diving into EBITDA numbers, head over to public.cominvesting for Multi those that take it asset investing, industry leading yields, they're trusted by millions, folks.
Speaker 1:Adam, person of swag, says you can just do things. Option on the left, quietly announce a $2,200,000,000 series a in a tweet saying back to work. And the second option, get black hat drunk at Cheesecake Factory after closing a 120 k pre seed. Seems a little specific there, They
Speaker 2:think those are both great great options.
Speaker 1:One more post from Bucco Capital Bloke. Most people think investing makes you rich but that's wrong until you're making at least 500 k a year. The best ROI is growing your paycheck, get the cash flowing first. Totally agree. We had this conversation with the the team.
Speaker 1:No matter how much how excited you are about investing, when you're young, focus on developing the skill set that allows you to be more valuable to your market. So without further ado, I think we should bring in our next guest. Absolutely. Man that should need no introduction.
Speaker 2:Pat Gelsinger. He's in the Restream waiting room. We will bring Pat into the TVP and Ultra Realm. Welcome to the show, Pat. Pat.
Speaker 2:Great to meet Yeah.
Speaker 7:Oh, so good to be able to join. Thank you.
Speaker 2:Thank you so much. I'm so excited. I would love a little bit to catch everyone up on what you're doing today. Take us through the current project, the current business, and what you've been focusing on over the last few years.
Speaker 7:Yeah. Thanks, John. Thanks, Jordy. So since Intel, I've been focusing I've been wearing two hats. Mhmm.
Speaker 7:One is the deep tech investing hat Mhmm. With playgrounds, so the hard stuff, you know, quantum computer, superconducting, next generation light sources, new materials, you know, those types of things. And then my other hat is being the head of technology for Glu, a faith tech company. I've lived my life at the intersection of faith and technology, and Glu is building the platform for the faith and flourishing ecosystem, from running IT all the way up through the latest and greatest trained models for AI services for the church and the faith ecosystem.
Speaker 2:Yeah. I'm fascinated by Glu. We've talked to the founder of Holo on the show, and it feels like an industry that is super ready to adopt technology, and yet there just aren't that many founders that are pursuing it. Would love to talk more about some of the findings that you put out when you investigated the foundation models. How did you process that information?
Speaker 2:What was the methodology for evaluating these models? And then I'm sure we can dig into more about the consequences of those findings.
Speaker 7:Yeah. You know, and maybe the first point is, you know, I've been driving benchmarks
Speaker 2:Yeah.
Speaker 7:For forty years.
Speaker 2:Yeah.
Speaker 7:Right? You know, my name, you know right. In fact, some of the benchmarks that are still used today have my code in
Speaker 5:them. Yeah.
Speaker 7:Right? So it's sort of like it's sort of embarrassing. Like, you didn't move. It's amazing.
Speaker 2:But Yeah. You should
Speaker 7:have moved on by now.
Speaker 2:But, anyway, you know, some
Speaker 7:of my code is still there. So I've been deeply associated with, okay. If you can't measure it, you can't manage it. Mhmm. So, you know, this idea of measuring AI models and, you know, people are working on this today, but, you know, we're also seeing that they're just measuring performance or cost per first you know, time to first token, cost per token, right?
Speaker 7:Total token throughput. Those are great metrics, but it doesn't measure, is it good? Right? And to be the absence of bad does not demonstrate the presence of good. So what we did, right, and so the second point is there's this body of work that was fairly recently released by Harvard, Baylor, and Gallup measuring human flourishing, a five year Lilly study that across 22 nations, across 50 plus cultural groups, what is human flourishing?
Speaker 7:So now we can answer fairly definitively across multiple dimensions, across relationships, character development, finances, spirituality, and faith. Is it good? So now we have a solid view for that. And then the final piece is, okay. Let's create benchmarks for AI systems using that foundational research.
Speaker 7:And now we have a corpus of qualitative and quantitative results to measure good. So if you say, which is the better model for human flourishing? OpenAI, Gemini, Anthropic, Claude? I can give you an answer based on a solid corpus of data with the most rigorous benchmarking experiences and numerical analysis sitting behind it. And we believe, and our objective is, as the result of that is, we will make models better because they can start measuring not just first token time, but did I give a good answer that's aligned with human values?
Speaker 2:How do you think about that benchmark of human flourishing? Like, when you go through your life, are you thinking about your finances, character, happiness, relationships, meaning, faith, health? Is are you consciously checking in with yourself, or is this something that's more reflective on your life, where it all kind of rolls up into happiness or well-being, and then when you investigate your life, you realize that those are the things that you've done? How intentional have you been?
Speaker 7:Yeah. I'd say it's sort of in two different dimensions there. Hey, I don't go benchmarking myself all the time. But that said, every time a major new model comes out, I want to ask the question, is it better?
Speaker 2:Yeah.
Speaker 7:And on these dimensions, so we'll be producing these benchmarks on a periodic basis every couple of weeks. We'll be updating those benchmarks to say, okay. Are we better? You know? Which model is better?
Speaker 7:Is DeepSeek better than OpenAI, than OSS? And so on. I want that rigor to be in place that everybody is you know? Okay. You know?
Speaker 7:Are we improving in this area? Because you don't fix these things overnight. It's a long trajectory of evolution and development of the technologies. Secondly
Speaker 2:Oh, yeah.
Speaker 7:And then the second side is, okay. You you'll hear disastrous situations, you know, where we have kids committing suicide. You know, their best friend has become the chatbot. Mhmm. Wow.
Speaker 7:When those things come up, would our benchmarks be detecting those? Can we and then do we have to add more and make them more rigorous that those kind of things can now be avoided in a constructive way that we really are happy, that we are making technology better. Or the language I like to use, technology as a force for good. Technology itself is neutral. Are we going to bend that arc toward good?
Speaker 1:How receptive have the labs been to to the benchmark?
Speaker 7:You know, I'll say it's early at this point. And, you know, so, you know, we're interacting with all the names that you would like. And I'll say, you know, they're getting better. You know, their scores have improved somewhat. You know?
Speaker 7:So I do think we're having some influence with them, but it's still early. And, you know, as I would like to, you know, also say, I don't think the benchmarks are rigorous enough yet. We gotta we have sort of an early version of them out there. These are good. 1,230 questions or so are part of them as well.
Speaker 7:But I expect that becomes a bigger corpus, of questions. Also, we got to go deeper. For the most part, these are single shot questions. We got to get into multi turn conversations. We have to have more of a mixture experts, know, that you're testing different experts.
Speaker 7:Also, how do we test the safeguards? Right? You know, we're now at the sixth turn of a conversation. You know, this individual is clearly suicidal. You know, how do we go handle that?
Speaker 1:Yeah. Think a lot of the safety concerns that at least we have is when people are, you know, many, many, many, many prompts deep, right, in in a in a specific conversation. It could be thousands, right? Depths to which that personally I've never gone, right? I don't know how crazy it gets that far, but certainly the labs need to be thinking about all those extreme edge cases.
Speaker 2:Yeah. Totally.
Speaker 7:Yeah. So I think we have more work to do, you know, on, I'll say, multi turn conversations and how we build more of that robustness into the benchmarks. But, you know, what we have today, and you can go to the Glue website, FAI, right, and see what we have today. This is a good start, but I do think in the speed of evolution of the AI technologies, we have a lot more work to do. And I'm sort of excited now as we get some of that momentum underway, really start crawling into, just like you said, more of the multi turn conversations.
Speaker 7:And we can be pretty aggressive in the questioning sets for multi turn to drive some of those extreme behaviors, Because the first few questions is mostly driven by prompts, right? As you get deeper into, it's much more reflecting what's the underlying model weights themselves. So all of that, we have more work to do, but I'm excited to have this first version out there, and we're starting to get some impact and good results.
Speaker 2:Yeah. There also seems to be some sort of unresolved question around alignment by default. How much do the models just reflect you? If you show up with a lot of negative energy, they can kind of become negative. And it feels like it's a self reinforcing spiral.
Speaker 2:If you come to it just asking interesting questions about the world and wanting to understand how math works, like you're going to get a tutor if you come to it with something bad. So a lot to sort out there. I have a question. One of my favorite quotes from you is from this talk you gave where you of lightly accuse Silicon Valley to be a group of miserly pagans. It's a great quote.
Speaker 2:Think it's a very apt analysis. And when I look at the performance scorecard on glu.com/flourishinghubresearch, I noticed that the models seem to be doing very well at finances and very poor at faith, and I'm wondering if that's a reflection of the the humans that
Speaker 1:or trained the
Speaker 2:the data set that's going into the model or both? Or how how intractable is that problem?
Speaker 7:Yeah. You know, and I think that's great because, you know, I mean, where where's a lot of the training data coming from?
Speaker 2:Yeah.
Speaker 7:Right? Associated with that, you know, and I view it as
Speaker 2:It's Reddit.
Speaker 7:Hey, you put bad stuff in, you're going get bad stuff out.
Speaker 2:You know,
Speaker 7:you put good stuff in, you're gonna get good stuff out
Speaker 2:Yep.
Speaker 7:You know, for it. And, you know, I mean, we're doing some work. You know, we we glue you know, we'll have our own values aligned models. Right? And part of the reason we're gonna do our own foundational training, for those models is specifically, I'm not going to put the bad stuff in.
Speaker 2:Yeah. That's good.
Speaker 7:I don't have to worry about it ever coming out because it was never in Yep. So that we can never probabilistically producing those things. Getting more specifically to your question, I think a lot of it does have to do with the implications of those training sets in the first place. You've seen lots of conversations about the challenges of we don't have enough training data. We don't have good training data.
Speaker 7:The quality of synthesized data versus raw data associated with it. So I do think there's a valid problem. I'm always a bit optimistic on the individuals that their motives are good for it. But we've clearly seen in the social networks, the algorithms were bad. Right?
Speaker 7:I think that leads to more degranged behavior. Right? It's only about dwell time on sites. And I think those same motivations would naturally drive the AI models if there wasn't further accountability.
Speaker 2:Yeah.
Speaker 7:And that's what leads us to saying we have to have better benchmarks that are rigorous and values based that get the answers we want.
Speaker 1:Well, yeah. The the even with with human driven social media and and how it can take people down these extreme rabbit holes, the they're they're not as worrisome as LLMs because LLMs can be totally private. They can go to these kind of dark places and it's just one human interacting with the model. Whereas social media, at least if somebody's on some crazy forum, there is a point at which they can say something that goes too far. People can say, hey, I think A lot of you people should can come in.
Speaker 1:You know, out and touch grass. Yep. Right? And I don't I haven't seen a model tell somebody to touch grass yet. Maybe that's built in
Speaker 2:Maybe that'll come in the
Speaker 1:next version. Somewhere. You Did you always predict, you know, feels over the last few years, Silicon Valley has a massively renewed interest in faith and religion. How how much did you anticipate that? Clearly, you know, you never cared what the industry thought.
Speaker 1:You had your own faith, but is that something that you predicted? Did it come faster or sooner?
Speaker 7:Yeah. May maybe three different dimensions, you know, there. You know? I mean, one is there is, I'll call it, a post COVID and a post success renewal, right, where, you know, this is very endemic of Silicon Valley, but you see it in lots of other, you know, communities, New York, Austin as well. You know, people presume success.
Speaker 7:And now they're asking deeper questions like, is this significant? So, you know, there is this national, right, you know, shift in what's important. Some of that might have been driven and some suggest it was driven by COVID isolation. You know, some of it is driven by the phenomena that we're in. But it isn't just Silicon Valley.
Speaker 7:There's a number of statistics. Those that believe in a faith view of Jesus Christ, the church engagement or spiritual engagement. You know, we're seeing very much, you know, twenty to thirty five year olds, you know, is going up in very meaningful ways, you know, four data points in a row of rising engagement or spiritual value engagement. It's So a national phenomenon at this point. Clearly, at Silicon Valley, we've seen a greater willingness to talk about faith.
Speaker 7:I started an organization about twelve years ago called Transforming the Bay with Christ, one of one of my other hobbies. That organization now is over 800 churches strong. Right? You know, when I talked to people, they didn't believe we had eight churches in the Bay Area. I have over 800 participating in transforming The Bay.
Speaker 7:And I'll just say there is a renewal, a connectivity associated with that. You've seen other things recently, some news and commentary about Act 17.
Speaker 2:Yeah.
Speaker 7:Trey and Michelle Stevens and Peter Thiel and Gary you know, friends friends of mine, that, all of a sudden, you know, I mean, we're hosting these events. They're sold out events.
Speaker 1:Yeah. Right?
Speaker 7:You know, where hundreds of people are showing up, you know, asking life questions. You know, some of it's, hey. I wanna come and hear Pat speak. I wanna come and hear Peter Thiel speak. But some of it is they wanna have life questions from someone they respect.
Speaker 7:So I'll just say, you know, there is this renewal going on. You know? And personally, I've been at it so long, people often say, well, do you feel more comfortable? Well, you know, I felt comfortably uncomfortable thirty years ago to speak about my faith in the Bay Area. Know, thirty years later, well, I've been doing it so long, everybody expects me to do it, so it's not as uncomfortable.
Speaker 7:You know? But in many regards, you know, it's like, it's who I am. Right? And if you have a different faith or a different worldview, you know, everybody should be comfortable talking about that. And, you know, I'd say from my faith perspective, it's, you know, like, I spoke to a Baha'i womanly recently.
Speaker 7:I don't know anything about Baha'i.
Speaker 8:Tell me about Baha'i. Right?
Speaker 7:And the more I engage you where your worldview is, the more freedom I have to talk about my Christian worldview and why I think that's good, powerful, and meaningful as well.
Speaker 1:What do you make of it it feels like an easy prediction to make that there will be religions built around AI. Feels like they're already emerging. If you go into the Reddit forum on ChatGPT, you have people that, you know, worship four o. It feels Even
Speaker 2:in technology circles, people kind of joke, we're building AI god or god in a box. It's gonna be so power. It's super intelligence. It'll be above humans in some way. And it's a little bit tongue in cheek with some people, but some people seem to believe it.
Speaker 1:And and I think there's a long history of Silicon Valley and and and even parts of the Bay Area trying to re recreate religion from first principles. I have, you know, my family has been in, you know, Palo Alto in some way or another since the early nineteen hundreds. And I've heard stories of like cults emerging around Stanford in the sixties where people were basically creating a club that looks like a church. They would meet like a church but ultimately were just basically trying to create new religion. Mhmm.
Speaker 1:And I think these, yeah, these conversations are uncomfortable, but they're important because they're I I think it's inevitable that they're gonna pop up, and it feels like, you know, potentially can go to a very dark place.
Speaker 7:Yeah. And I'd say, you know, you know, may maybe three different comments there. One is, you know, technology is neutral. You can use it for good and bad. Right?
Speaker 7:AI, most powerful technology that we've created yet, in no small part because it's built on the shoulders of all the other technologies, connectivity, cloud, etcetera, right, so it can grow and expand more rapidly. But our job is to make it good. Right? Can it get used for cults and other things? Of course.
Speaker 7:Right? Just like everything. What was the early driving use case of the Internet? Right? I think the number one websites early on were pornography.
Speaker 7:Yeah. Not what we intended, but right at that, you know, gambling and pornography is like, oh,
Speaker 1:man. You know? Man, how should we be
Speaker 7:Right. So I have no doubt, no hesitation that there will be these cultish experiences that emerge. But again, our job is make technology a force for good. And where and how do we build safeguards and other into it. Second general comment is, you know, people talk about super intelligence and those you know, and some of it is, you know, it's like, man, you know, the calculator is a super intelligence.
Speaker 2:Yeah.
Speaker 7:It does math better than I do. Right? And, you know, my Excel spreadsheet. Man, I ain't giving that up. Right?
Speaker 7:You know? Right? You know? And I don't want my accountant to give it up.
Speaker 2:Yeah.
Speaker 7:Right? You know? And so and, you know, we think about LLMs in the futures. Man, they're gonna become indispensable. Right?
Speaker 7:You know, because it is like the real time, contextually relevant encyclopedia of my life. Right? You know, it's got a better memory, better knowledge, better connectivity. I mean, we're gonna use AI to conquer language for the first time in humanity's history. You know, I'm gonna be able to teach every kid in their native language, contextually relevant, using the power of AI.
Speaker 7:And because of that, you know, almost all of the people that live in poverty live in the fringe languages that are not conquered. Wow. You know, how excite you know, I mean, the extraordinary opportunities, you know, this is gonna give us to truly improve the life of the planet.
Speaker 1:But, you know, ultimately Yeah. It's it's been interesting. I I've been debating with John how, you know, how bad would it be if I suddenly didn't have access to LLMs? And we've gone back and forth on this. I personally would much rather live without LLMs than a mobile device or the internet.
Speaker 1:Right? I think some of these enabling technologies that we have that make LLMs valuable and useful and widely available are feel today more foundationally important. But that is coming from a viewpoint where most of the Internet is English. Most of the media that I wanna watch is English. So the point you made about being from somewhere in the world that English isn't your native language, being able to educate yourself on you know, and and watch any content, you know, things like that are are pretty exciting.
Speaker 1:Yep. Where do you think
Speaker 7:Continuing and going back to you, the the core of your question, though, you know, will there be AI gods? Right? God designed us as humans to be in relationship. And any technology that's driving us apart, three teenagers sitting on the couch texting each other. Right?
Speaker 7:How terrible. Talk to each other. Right? God designed us to be relational individuals. A foundation of religion, spirituality isn't just the self, it's the community that you're part of.
Speaker 7:So fundamentally, things that take us apart, you know, I think, okay. We have to build safeguards to have them be tools bringing us together. You know, I do not want my AI doing suicide prevention counseling.
Speaker 2:Mhmm.
Speaker 7:I want a real human doing those things. You know, I want a real human interacting with kids and teaching and learning. You know? I want AI agents that are helping the teacher do better education. Right?
Speaker 7:You know? Because, you know, of the modalities, the training, and so on. But, ultimately, these are very, you know, powerful, right, human experiences that we need to keep as human experiences.
Speaker 2:How have you been processing the dialogue around the Antichrist? You mentioned Acts 17, Acts seventeen's and Peter Thiel. It's something that's really sparked a huge discourse in Silicon Valley that I think a lot
Speaker 1:of people
Speaker 2:weren't even thinking about. Christianity is somewhat unique in the the idea of the Antichrist, but how have you processed it through your life, and then how are you thinking about that concept today?
Speaker 7:Yeah. I do think there's know, there was you know, when I was in my, you know, whatever, twenties or thirties, there was a series called Left Behind.
Speaker 2:Mhmm. Yeah. Right?
Speaker 7:And it was like, oh, you know, and if you go back and read that, you know, and the late great planet Earth, you know, there's sort of been this episodic flow of end times to discussions and discussions on the antichrist and what they would be. So, you know, this topic has, you know, only persisted for about two thousand years. You know, it just sort of goes way
Speaker 4:It's Lindy. It's Lindy.
Speaker 2:Yes. It's been around forever.
Speaker 7:Yeah. Yeah. So, you know, I you know, hey. Having another cycle of that? Great.
Speaker 7:Because it causes people to ask deep questions. Yeah. Right? You know, to me, that is a good side effect to it. Now from a biblical scholarship perspective, antichrist is mentioned one time in the Bible and not contextually in Revelation.
Speaker 7:Right? It's like, okay. This is a thin discussion, right, if you look at it theologically you know, that way. You know, when most of the revelation and, you know, apocryphal conversations in the bible are actually much simpler. Right?
Speaker 7:You know, people of those days were looking at they were seeing the antichrist, and his name was Caesar. Right? You know, in that sense. And, you know, the bible was written to be, you know, I'll say, eternal, but current at the same time. So I think a lot of this is this episodic flow of excitement on the topic, but I think a theological study of it would say, calm down a little bit.
Speaker 7:We are living in the end days, meaning that, you know, right, you know, there isn't another expression of Jesus Christ coming until the end of time, you know, as seen through scripture. You know? And because of that, you know, hey. If this causes people to be more interested in religion, yes. But at the end of the day, let's make sure we have good theology behind the conversation as well.
Speaker 2:What about millenarian thinking generally, apocalyptic thinking generally? Feels like
Speaker 1:Feels like it's
Speaker 2:Maybe I'm out of touch with what the vibe was in the semiconductor industry when you But were active in it feels like the semiconductor companies have not historically said, if we don't build this, the world will end. But we've seen a rise of entrepreneurs who have been talking about apocalyptic consequences to either building or not building what they're working on. And it feels like it's more in the zeitgeist, kind of the final conversation you can have about the impact of a technology. And it's and so far, I mean, it's not just the AI folks. Even Elon Musk talks about the consequences of not becoming multiplanetary being apocalyptic And so we have to explore the stars, which I completely agree with.
Speaker 2:I love space exploration. And so I'm wondering about that as a rhetorical tool in entrepreneurship. Is that something that you've noticed is on the uptick, or has it always been this way?
Speaker 7:Well, again, I think there's an episodic nature to it. And let's you know, when you know, go read some of the press when Sputnik
Speaker 2:Oh, yeah.
Speaker 7:Flew through the sky. Yeah. The Russians hear everything. Right? Yeah.
Speaker 7:They can read my mind. I just saw it in the sky last night. Right? You know? You know?
Speaker 7:So my father, you know, talked to me about when he saw Sputnik in the night sky. Right? You know? So right. You know?
Speaker 7:And I so I do think there's somewhat an episodic nature. And when you hit these huge inflection points, right, like AI that is just exploding in capacity and capability, I think, okay. We're in the next episodic discussion Yeah. Right, as a result. But I think if you look over history, we've seen that go through over time.
Speaker 7:In the first days of the Internet, my cell phone is gonna turn my brain to jello and all of these other kind of things. I just don't get too
Speaker 2:Oh. We might have a technical issue. Let's give just a second. Hopefully, can get
Speaker 1:Pat down. Back. The deep state took down the
Speaker 2:It was getting too It was a fantastic interview. We were enjoying that. Hopefully, can bring back Pat Gelsinger.
Speaker 1:I didn't get to ask him about AI CapEx. Hopefully soon. We'll work on getting him back.
Speaker 2:Back in the meantime. Let me tell you about Turbo Puffer. Search every byte, serverless vector, and full text search built from first principles on object storage. Fast, 10 x cheaper, and extremely scalable. Head over to TurboPuffer.
Speaker 2:And we have Pat Gelstner back. Sorry about that.
Speaker 1:AGI is here, but the Internet still doesn't work sometimes.
Speaker 7:You know, I I always get a kick out
Speaker 2:of this Yeah.
Speaker 7:When the cell network here. Let me expose this as well.
Speaker 2:Yeah. Yeah. We are
Speaker 7:On the cell network future. Or the Internet, you know, drops in Silicon Valley.
Speaker 2:It's like, man. What's going on? What's going on?
Speaker 4:There's no
Speaker 7:place we should get this right. I
Speaker 1:Yeah. I don't know where exactly where we got cut off, but I I wanted to ask you about Yeah. There's been so many insane headlines this year around AI, AI CapEx, AI talent wars, know, rewinding in your career in the nineties, early two thousands. Like, what what of what parallels are you personally drawing?
Speaker 7:Yeah. You know, I do think and let let me give two different answers to that first. Because, you know, I mean, you where you you people are talking about these one, five, 10 gigawatt data centers. Mhmm. Right?
Speaker 7:Every time somebody says gigawatt, the image I want in your mind is a nuclear reactor.
Speaker 2:Yeah.
Speaker 7:Because a new one nuclear reactor is about a gigawatt of power capacity. Yeah. How many nuclear reactors has The US built in the last twenty five years?
Speaker 2:I think it's one or three at Votel. Right?
Speaker 7:Yeah. Remember, China I think China has 60 under, right, you know, construction today. Fundamentally, capacity, we sort of lost a decade, as we were so focused on climate that we weren't building our energy capacity. And renewables, I'm the biggest believer, but for the most part, they're not economic, right? There's a lot of work going into making them economic.
Speaker 7:Some of the playground companies are working on that. But for the most part, they weren't economic, and they didn't add that much to the grid, right? So there's this craziness going on, right, of that CapEx expectation and so on. You don't have the energy to do it. Now, obviously, we're working on dramatic improvements to make inferencing 10 or a 100 times more power effective.
Speaker 7:Right? Because ultimately, I think the demand for inferencing capacity is the ion infinite, right, to Jevan's law or the gas law. It really should be permeating every aspect of what we do going forward. But some of the crazy predictions associated with this, it's not going to be chip limited. It's not going to be land limited.
Speaker 7:It's not going to be capital limited. It'll be energy limited going forward. And I do think it's inducing a lot of investment into the energy systems, which I view as very positive because our long term economic growth as a nation will be energy limited. So even if we're overbuilding capacity, I view it as a super good thing.
Speaker 2:Because,
Speaker 7:hey, whether I need that for my electrification, whether I need it, you know, for my quantum computers, whether I need it, you know, for
Speaker 2:Just make my power bill cheaper. If you have more energy to go around, the price is gonna fall for average Americans. That's a win.
Speaker 7:Yeah. You know, and I mean, the oil crisis.
Speaker 2:Yeah.
Speaker 7:Great. You know, could become the electrification crisis in the future, right, if I don't. So I just view that as such a good thing because if so, mismanage our nation's energy capacity Agree. Going forward. Now, you know, some of these forecasts are just nutty.
Speaker 7:Say, hey. It's all like that.
Speaker 2:It's a 100 nuclear power plants next year. Who knows?
Speaker 1:Yeah. I mean, we did we did have an IPO today Yeah. In Germany that is planning to make a nuclear reactor by 2038 or something. Yeah. Like, they're they're they raised his money to try to bring it online.
Speaker 1:So I was poking a little bit of fun at that because the company's nine months old. They're valued at $17,000,000,000, maybe it will be net good if if we can bring, you know, a new nuclear plant or two online.
Speaker 7:Yeah. And, you know, by the way, you know, I just you know, I just became the general partner lead on investment that we're doing in the nuclear space, a playground. So I'm learning a lot about this.
Speaker 4:That's great.
Speaker 7:Right? And a lot of the small nuclear reactors, they're not economic. Right? You can't connect them to the grid. You can't scale them, the regulatory things.
Speaker 7:So I do think it's a very fundamental problem for the nation. And one, hey, I'm now diving into that problem as well. So we need to bring on many gigawatts of additional capacity for the future of our nation. Now some of the other projections there that people point to, I think they're way over their skis, right? Not everybody is going to add 10 gigawatts of additional capacity.
Speaker 7:And I am excited that, like one of our companies, Snowcap, we're out to make AI 100x more power efficient than it is today. Not 10%, not 10x, 100x.
Speaker 2:That's great.
Speaker 7:Right? As we move to superconducting. So instead of that gigawatt, I'm going to have a 100 megawatts of cryogenic capacity that produces 10 times more inferencing.
Speaker 2:Yeah.
Speaker 7:Okay. That's industry reshaping.
Speaker 2:Mhmm.
Speaker 7:You know? And those are the kind of things that are truly gonna, you know, say, do a better job of the energy capacity we have and, right, you know, creating more ultimate capacity for the future.
Speaker 1:And what about, you know, is some of the vendor financing going on, some of the demand guarantees that people have been making, does that is that immediately worrisome to you because of some of the negative events that came after things like that in the .com era? Or do you think it's seen natural part of the cycle?
Speaker 7:This before. Look at all the optical companies in the early days of the Internet. Well, everything is up and to the right for exponential growth for unlimited periods of time. Okay. I mean, it stunning was ten years, but it didn't extrapolate to thirty years.
Speaker 7:Right? And I see most of the AI I see fundamentally no change for the next two, three, four years. But by the end of the decade, some of these transformational technologies will be at scale. So I do see a real shift right, in them before the end of the decade, particularly on inferencing costs, inferencing performance and power consumption for inferencing, which is sort of like the big one for broad deployment of AI.
Speaker 2:How do you think about I mean, there's a lot of founders in our audience who are it's raining right now, and they're happy and everything's good. But you've been through so many market cycles. Is there a story or advice that you give to entrepreneurs or founders who are going through a reset and going through a bear market? What what how do you think about getting through those hard times?
Speaker 7:Well, so they're going to come, right? Right now, as a CEO, right, your job is the high is never as high and the low is never as low, Mhmm. Right? You know, your job is to sort of, you know, cut the tops off of the crazy highs and, you know, manage through the crazy lows. Right?
Speaker 7:That's your job. And if you're not ready to do that, you know, if you're the, you know, the super enthusiastic champion that everything's up and to the right, you know, for the next, two, three decades, you shouldn't be in the CEO's job. Mhmm. Right? That's called a cheerleader, not a CEO.
Speaker 7:Right? And we have way too many companies that are led by cheerleaders as opposed to CEOs. And we can go back over history and identify a number of those. Also, like I say, I think the next couple of years, I think, are going to be just fine. But as we get to the end of the decade, okay, things are not going to be just fine.
Speaker 7:There's going to be fundamental shifts in the economics and the capacity. And a CEO's job is to get the balance sheet in place that they can navigate through those times, right? You get cash when you don't need it because when you need it, you can't get it, right? So you have to be managing thoughtfully about when those disruptions occur. I do think, particularly a couple of years out from now, okay, that's your job as the CEO, as the leader, as the entrepreneur.
Speaker 7:Do I have enough capacity to take a meaningfully negative time, right, and be able to go navigate through it?
Speaker 2:What about team building leadership? How should you be communicating with potentially thousands of employees who are looking to the CEO for leadership, not just cheerleading?
Speaker 7:Well, you know, you're you know, the first job of a leader is to represent reality. Right? You know, where it is, and, you know, that is the first job. Here's where we are. Life is great, but it's not as good as that.
Speaker 7:You know, life is bad, and here's the situation, and it's not as bad of that. First job of a leader, being that point of truth, that point of reality. You know, as I say, you know, the leader's job is to communicate the vision over and over and over again to the point that you are absolutely sick and tired of it. Right? You know, you think there can't be a single person that hasn't heard you communicate the vision.
Speaker 7:And just about the time that you're absolutely dreadfully bored by it is the first time it's really getting through.
Speaker 1:Mhmm.
Speaker 7:Right? It was just that hard. And about the time your organization knows it, usually one to two years, It takes another year or two for the customers to understand it.
Speaker 2:Yeah.
Speaker 7:Right? You know? And if you change, right, in less than three or four years, nobody understands it. Yeah. Right?
Speaker 7:You know? So, right, that constancy of vision, purpose, mission is a super important thing for the leader. Preparing for the bad days, like we already touched on, there will be bad days that you have to navigate through. And then when you have success, you give it all to the organization. And when you have failure, you claim it all.
Speaker 7:In a transparent, effacing way. Right? And that's how you build, you know, loyalty and commitment, from your teams. You know, being a CEO is not cut out for everybody. Period.
Speaker 7:Stop. You know? If you're not ready to take accountability, if you're not ready to make the hard calls, if you're not ready to hire but also fire, at the same time, if you're not ready to demand your organization to excellence, you shouldn't be a CEO. At the same time, if you're ready to do that, it is one of the most fulfilling, satisfying opportunities of a leader's career.
Speaker 2:It's fantastic. Well said. Well, very well said.
Speaker 1:Do you have time for one more question? I know we're ten minutes over.
Speaker 7:For you, absolutely.
Speaker 2:Thank you. Incredible. I'm really enjoying this.
Speaker 1:We were talking with Brett Taylor of Sierra about kind of the SaaS pocalypse and how there's a lot of legacy enterprise software companies that are needing to react and respond and evolve as LLMs and generative AI comes online. And he said something I wanted to get your thoughts on and maybe some examples. But he believes it's easier to change your technology stack than your business model. He was saying in the context of, it's great if you're a software company that started and is charging based on value, but if you have seat based pricing today and your competitors are now selling, you know, not not trying to get you to scale head count, but just trying to deliver more and more value, that can be tough. I wanted to ask if there was any notable kind of moments in your career where you witnessed a company sort of be able to effectively evolve their business model and and or on the technology side and and how those two things play together in your view?
Speaker 7:Yeah. Yeah. And, you know, first, you know, Brett, you know, just he's a world class guy. Yeah. So if you have the chance to bring Brett on or Pat on, take Brett.
Speaker 2:You know what mean?
Speaker 1:Well, we we've invited both.
Speaker 2:Why not both?
Speaker 7:But Brett is great. You know, the you know,
Speaker 2:we
Speaker 7:took VMware through the transition from enterprise licensing to a SaaS business model. It is butt ugly hard. Right? You know, a business model is like a deep rut. Mhmm.
Speaker 7:Right? You know, one of my favorite posters on this was, you know, it showed a deeply rutted Indian road, and the caption read, right? Pick your what carefully. You'll be in it for 100 kilometers. Right?
Speaker 7:And there's sort of this truth to a business model because your competitors get used to it, your customers get used to it, your supply chain get You just get funneled into it. And when you try to change your business model, man, it is dreadful. The contractual, the legal, the renegotiations, etcetera.
Speaker 1:The team.
Speaker 2:Yeah, team compensation. Yeah.
Speaker 7:Is hard about it because you build every aspect of the business around those characteristics of the business model you've chosen. So Brett is right on. Changing the technology is quite a bit easier than changing the business model. Now, the masterstroke is if you can keep sort of that interface to the customer and the business model the same and do a major retooling, right, of the technology underneath it, okay, now you win. Right?
Speaker 7:And by the way, the first major success in the enterprise to SaaS conversion, my friends at Adobe, they navigated through it. I mean, that was their masterstroke, many others followed in their footsteps after it. But that was hard for the transition. Now as we go to AI, most are going to be in a SaaS like business model going forward. You know, that said, the user experience in an AI native application is dramatically different.
Speaker 7:Right? You know? You know? And if we think about it, you know, and I you know, in very broad terms, the computer has I have been adapting to the computer for the last fifty years. In an AI world, the computer adapts to me.
Speaker 7:Right? You know, if you think about the fundamental shift of that, where now I am speaking to it on my terms, it's hearing me in my way. You know, it's understanding my face, my recognition, my thoughts. Right, contextualizing them, you know, in my language of understanding. You know?
Speaker 7:So I do think the idea of just flipping to a SaaS AI business model, you know, versus an AI native experience that truly harnesses the full breadth of that power, I think many, you know, people, as they talk about the AI conversion of their applications, wholly underestimate what will be associated, right, with truly creating an AI native experience for the future. Everything changes.
Speaker 1:Yeah. It's not just even business model going maybe from seat based and and fixed contracts to value or selling the work, but it's even the entire user interface and the the the app like, what does the application look like? What does it feel like? Does it feel like hiring and managing a team? Does it feel like hitting buttons yourself?
Speaker 1:Yeah. So doing both of those things at the same time.
Speaker 2:Okay. Actual let me see. Actual last question. Is it true or do you still have a VMware tattoo on your arm?
Speaker 7:So, no. I
Speaker 2:don't. Okay.
Speaker 7:And and it was so funny because when, you know, my
Speaker 1:you know, I one point.
Speaker 7:I I did. Right? It's amazing. Like one of those thirty day tattoos.
Speaker 4:Okay. Okay. That's So,
Speaker 7:you know, and I came home from that trip, and my wife you know, somebody sends the video to my wife.
Speaker 2:Yeah.
Speaker 7:Right? You know, the tattoo artist and everything like that. Yeah. And she says, you may not have that on your arm
Speaker 2:by the
Speaker 7:time I go on vacation with you.
Speaker 2:That's amazing. Yeah. People think tech tech people are hardcore today when they launch, like, a video or something or they put up a billboard. Like, living with your brand for thirty days is a new level. And we thank you for your service to the technology industry, Pat.
Speaker 2:Thank you so
Speaker 1:much This coming on the was fantastic. And thank you for the work that you're doing. It's very important.
Speaker 2:I'm very excited. I mean, we'd love to have you back, dive into all the different portfolio companies, also what's happening on the Glu side in terms of actual productization. I know we spent a lot time in the AI world and talking about the other labs. But there's so much more that we could go into. We'll give you back the rest of your day.
Speaker 2:Have a great day.
Speaker 7:Thank you. This was a lot of fun. Thank you so much.
Speaker 2:Thanks so much. Talk to you soon.
Speaker 1:Cheers. Bye. Let's pull up this video Yes. Of the Meta Ray Ban display.
Speaker 2:Okay.
Speaker 1:I'll be right back.
Speaker 2:I will react to this. The Meta Ray Ban display has a new video that we are gonna pull up. In the meantime, let me tell you about ProFound. You've heard that you can now buy products on ChatGPT. You're gonna need to get your brand mentioned in ChatGPT.
Speaker 2:You send you can reach millions of consumers who are using AI to discover new products and brands. We did this just yesterday. We found some new microphone stands. I took a picture of a microphone stand that I saw, dumped it in ChatGPT. What is this?
Speaker 2:Wound up. I didn't check out actually in the ChatGPT workflow, but we were pretty close to getting there, and you're gonna want your brand mentioned in ChatGPT with ProFound. Let's watch the Meta Ray Ban's video right now. This is we so we've demoed this. Both Jordy and I have looked at this.
Speaker 2:This is the what the heads up display looks like. It looks better when you're actually using your human eyes instead of trying to film through it. But the navigation, the heads up display, the COD mini map, I think they should give it much more Call of Duty aesthetics if they want it to really pop and go viral. Tyler, what what what's your reaction? Would you wear this?
Speaker 3:So so is it like running through your phone at all?
Speaker 2:So I believe we we were debating this with with Simon on the show when he was here. I I believe that almost all of the compute is done on the phone, and it is serving up maybe, like, a small JSON file that it renders in on the headset, or maybe it's even just streaming images. The the bandwidth over Bluetooth has to be limited, and then the compute on the device is also limited. So I would imagine that it doesn't have GPS. It's not doing any on device inference.
Speaker 2:It's really doing limited just this is the graphics that I need to show, render that graphics, and pipe it in there, but then keep that battery life going as long as possible.
Speaker 3:Yeah. Because, I mean, with with these, these are the the Oakley ones. Yes. And these, like, when when you set up, you have to connect to your phone. Yes.
Speaker 3:That's like the very first thing you do.
Speaker 2:Yes. So these, you definitely have to connect to your phone. They do not work without a phone. Over time, you would imagine that they try and bootstrap a true platform on top of this and say, hey.
Speaker 1:Soon as we have developer access to this, I'm gonna add the sound effects. So it'll using the live AI feature, you got you walk outside. You're walking down the street. The glasses are, you know, monitoring the situation.
Speaker 7:Watch journalistic
Speaker 1:And you're getting you're getting these kind of sound
Speaker 2:would be electric. Electric. Bobby in the chat asked, why don't we use lav mics? Well, we were discussing it. Turns out lav mics are complicated.
Speaker 2:We're figuring it out. We're gonna see some updates.
Speaker 1:Mics are coming. We're we wanna be able to Walk around.
Speaker 2:Enjoy the horse. Yeah. Enjoy the horse. Can we go to the horse cam? Do we have a horse cam today?
Speaker 2:I know I'm putting the production team on on short notice with that one.
Speaker 1:Get the horse cam going. I mean,
Speaker 2:this Here's wide. This thing Let's is go. We got the horse over there and the gong over here. We're filling out the studio. We're having a lot of fun.
Speaker 2:Zoom in on the horse. Is it it has been unboxed. Some folks in the chat were asking, what's the genesis of the horse? There's a few things. We we we enjoy equestrianism.
Speaker 2:We enjoy polo. This was from the early brand exploration that we did. We found that there was a bit of white space there. A lot of people in tech
Speaker 1:are Too many people in tech media were afraid to And show their so in some ways, the horse is a monument to technology journalism. Yes. Obviously, many technology journalists grew up
Speaker 2:Yes.
Speaker 1:You know, with a very equestrian lifestyle. Horse we thought this was considering the show wouldn't be possible without the brave reporting
Speaker 2:Yes.
Speaker 1:From many technology journalists, we thought, why not put a horse
Speaker 2:Also, I have a buddy, Truman Sacks. He's been on the show. He runs a company called Cubby. And he's obsessed with horsepower, horse metaphors. He's obsessed with the idea of channeling the energy of a horse, much like I channel the energy of a golden retriever.
Speaker 2:The horse is very it's a noble stallion. It has a lot of noble qualities that you should be emulating. And so the horse made its way onto the soundboard, and now the horse lives physically in our world every day at the TVP And Ultradome. Anyway, let me tell you about numeral. Sales tax on autopilot, it's a horse for your sales tax.
Speaker 2:So spend less than five minutes on per month on sales tax compliance. That's faster than a horse can run around the Kentucky Derby, I think. I don't actually know how long it takes. Breaking
Speaker 1:some breaking news. Barry Weiss to be named editor in chief of CBS News.
Speaker 2:Let's go. Congratulations.
Speaker 1:Were predicting Promotion. Trade deal. This is such a brutal deal. There's another post here. Paramount will announce deal to acquire Free Press and bring Barry Weiss to CBS News on Monday.
Speaker 1:I feel like this deal has been announced 50 times Yep. So that when it actually gets announced
Speaker 2:I wonder why. Are media people obsessed with media people? Turns out, yes. Yes. People love reporting on this.
Speaker 2:You could never get this much press for a $250,000,000 acquisition of your database ERP enterprise AI company. You'd be begging for Bloomberg and TechCrunch pieces. But when you're in the media, the media loves to tell a story about media, and so you get a lot of press. In other news, Arvind over at Perplexity is announcing the browser, which I think was teased earlier, but he said announcement in three point five hours. I'd love to get an update from Tyler on what this announcement was and how it's shaping up, what the timeline's saying.
Speaker 2:Do you know what's going on in Perplexity world, or are you perplexed?
Speaker 3:I believe that the main announcement is that Comet is just free.
Speaker 2:Okay. It was pre it was originally 20 or 200 a month?
Speaker 3:Yeah. Well, there's two different plans. Okay. I think it was, like, usage based. Mhmm.
Speaker 3:And I think it was also I mean, it was recently in it was in beta as of very recently. Okay. And I think it was released Yep. Probably to just the paid plans. Yep.
Speaker 3:And now it's fully free.
Speaker 2:Well, you should give it a try again. Yep. See if you churn, see if you stick around.
Speaker 3:Hi. Some
Speaker 2:people love it. Some people are just kinda stuck with Chrome. I'm kind of still living in Chrome world. Although I do Chrome on desktop, Safari on iPhone, which I feel like is the worst possible combination. Like, I should have some bleed over.
Speaker 2:But I I posted a screenshot of some App Store rankings Microsoft Teams.
Speaker 1:So is this a mobile based browser? Can you get Comet in the
Speaker 2:Good question. Let's go to Tyler Cosgrove, our IRL Cluely. Anyway, let me tell you about fin.ai while everyone looks that up. The It's number one AI agent for customer service, number one in performing Spanish marks, number one in competitive bake offs, number one ranking on g two.
Speaker 1:Yeah. I don't believe Comet is available as a mobile app Yep. Which, again, I it's very hard to be a $20,000,000,000 company trying to grind to product market fit
Speaker 5:Yeah.
Speaker 1:For a new for a new product.
Speaker 2:And the browser company was working on something similar, and there's news that OpenAI will be launching something as well.
Speaker 3:I mean, even Anthropic now has an extension, which is it's very similar.
Speaker 2:Yeah. So it bends in Claude 4.5 into your browser, basically.
Speaker 3:Yeah.
Speaker 2:And is it taking do you know if it's taking I wonder if it's taking screenshots or looking at the HTML and JSON as it comes in, acting at a lower level.
Speaker 3:Yeah. Don't know exactly. I don't think it's agentic. Like, comment, one of the main things is that it can actually make actions. Don't The clad one is actually agentic yet.
Speaker 2:Perplexity is a fascinating story. You know, we've had fun with the founder on the show, but it'll be interesting to see how it plays out. It feels like there's a whole bunch of big deals that need to be that need to happen under the hood. Dance partners with you know, they tried to buy TikTok, and you could see partnering up with a with a another legacy tech company, revitalizing them. We saw the browser company go over to Atlassian, and there's so many different ways this could break.
Speaker 2:But, good luck to the team over there. In other news, open source, Pantex CAPS, says, here's the thing on data centers. I laughed at all the dumb sell side reports on data centers being canceled earlier this year. Remember those? People were saying, oh, yeah.
Speaker 2:We're not gonna build data centers. Turns out
Speaker 1:that was Satya was pulling back. And I read I read He a little bit from this
Speaker 2:went back on pulling back. There's news today in the journal that Satya said that oh, where is it? It's somewhere in here amid a bunch of other articles we won't be reading. Microsoft CEO gives up some responsibilities. Nadella said in a note to employees that Judson Altoff has been promoted to helm the company's commercial business in essentially overseeing a large swath of the technology giant's operations.
Speaker 2:Nedella is saying that he needs to focus on the company's biggest artificial intelligence bets. So he's going back in and really doubling down on AI personally, and he's promoting other folks to take stuff off his plate so he can refocus on AI. So kind of a retrench into let's go big on AI.
Speaker 1:Yeah. It was I was pretty I got a little I got personally a little bit bearish when Satya was pulling back. Right?
Speaker 2:I respect
Speaker 1:He has more data
Speaker 2:Yeah.
Speaker 1:Than almost anyone on earth. Totally. Right? Very smart guy. He he was basically actively getting fit.
Speaker 1:They're do they're doing rounds of layoffs. As he pulled back, a lot of other people, you know, have stepped up. Oracle's obviously seen a massive appreciation from leaning in to Yep. Totally.
Speaker 2:You could you could see Okay. Panhandas, like, filling that gap if Oracle hadn't stepped up.
Speaker 1:Totally. But what open source or Pantex Cap
Speaker 2:Yeah, please.
Speaker 1:Is saying. But he says, you know, I laughed at all the dumb sell side reports on data centers being canceled earlier this year, made a ton of money going long against that nonsense and bearishness. But now we're on the other end. I don't think people understand the actual logistical hurdles in place for data centers now. First, power companies are overwhelmed and tired of all the FUD.
Speaker 1:They're putting up huge barriers to weed out all the BS. Mentioned this earlier. If you want 500 megawatts from Georgia Power, you now have to put up about 600,000,000 up front. That's just such a massive number to be locked up. I'm sure people are also like lending now lending helping Yeah, people finance that.
Speaker 1:And he says, second, communities are pushing back more. Deals are getting canceled on it. The water we saw the the Amazon data center. It was in Tennessee. Yeah.
Speaker 1:Where was it? That just got canceled. Yeah. Is He's saying really water long consumption is a real issue. Data centers actually help electricity prices go down, but overall rates are shooting up and they're getting blamed.
Speaker 1:So I want to We need to
Speaker 2:dig into this more.
Speaker 1:Unpack this more because that's
Speaker 2:But not this was always my anti face anti fast takeoff take, which was even in this world where the algorithms hold the scaling is all you need, the bitter lesson holds, it's like at a certain point, you're just moving like billions of tons of sand and refining it into silicon to make chips. And like, the laws of physics come into play at a certain level if you're just moving an immense amount of equipment around the world and you need more boats to move the GPUs from one place to another, need more energy, you have to build a new Hoover Dam every two minutes because you're accelerating so fast. And it feels like there will be some laws of physics that will kind of act as a drag. I don't know. Tyler, what do you think?
Speaker 3:I mean, yeah. But periodic labs is kind of like the answer to that. Mean, obviously, like, at some level, always have to, like, you know, conform to physics. Sure. But I think we have a long way to go where, like, you can actually have the LLMs improving the chips.
Speaker 2:How many days until AGI on the on the on the day tracker?
Speaker 3:Right now, it's 3,600.
Speaker 2:Three thousand six hundred. So that's, what, twelve years or something?
Speaker 3:Yeah. I think
Speaker 2:So based on today, based on this week, based on Sora two Yeah.
Speaker 3:It hasn't been updated since Sora. I think I I need to kind of give a good think about this Okay. Figure out where I am.
Speaker 2:But What what about you, Jordy? If the singularity is is is roughly ten years away, does the Sohrab two news, does the does the energy consumption news move your estimate out or move it forward? I think I'm moving a little bit out. I'd probably add another hundred days to the Singularity counter personally, but feel free to Yeah.
Speaker 1:Signals if you want. It signals. Yeah. This this is Willmanitis post from yesterday saying, is this the product you release if you believe you're three to four years away from super intelligence?
Speaker 2:Yeah. Well, if you're looking for super intelligence for CRM, head over to Adio. Adio is the AI native CRM that builds, scales, and grows your company to the next level. Get started for free. Also, another extremely AGI pilled news headline.
Speaker 2:Google Ads are now live in Gemini. Let's go.
Speaker 1:There we go. We love ads.
Speaker 2:Where was DeepMind on your AGI pilled category?
Speaker 1:Ads were always on
Speaker 2:I critical don't think this is bearish. Let's take two thousand days off the Singularity counter. It's coming tomorrow. Considering Gemini is the only provider which doesn't allow users to opt out of training their models on their data, which I don't think is true because we just got news about the Meta team will be training ads and targeting ads based on your interactions with Meta AI chatbots, which makes tons of sense. Targeting here will be off the charts as Wasteland Capital.
Speaker 2:Every data point about you, every question you've ever had sold to the highest bidder. And so if you're just chatting with Gemini or you're chatting with Meta AI, you'll start seeing ads that reflect what you've been searching for in the chatbot or talking to the chatbot about. Makes a ton of sense. I'm sure there's going to be a bunch of weird things. It was already weird where people would say, like, I talked about this product with my friend, and then I saw a targeted ad.
Speaker 2:How did that happen? It was already feeling creepily accurate, and I'm sure this will make it way creepier. But it'll be good for the business probably, right? What do you think? Bullish?
Speaker 2:Think it's pretty
Speaker 1:good. Now we're bullish ads.
Speaker 2:Bullish ads. Well, we are also bullish. Shiel, a good friend of the show. He has some big news, and we're gonna bring him in to the TBP and Ultradump from the Restream waiting room. Shiel, how you doing?
Speaker 2:Boom.
Speaker 5:Great. How are you guys doing? Fantastically.
Speaker 1:It is great to have you back. It's been too long.
Speaker 2:Awesome chat with Palette Gelsinger. Really went deep with him. Was a lot of fun.
Speaker 5:That's amazing. Yeah. I mean, I feel like the only like like, since I was last on, you guys have had, like, Zuck, Kissinger, Mark Kadriel, like, a bunch of I feel like the the level getting on TPPN now is a really big deal.
Speaker 2:We're happy to have you. Give us the news. What what what's new in your world?
Speaker 5:Yeah. So we just announced yesterday that we we raised a new $140,000,000 fund.
Speaker 2:Times, Massive new fund. Congratulations. One gong hit for every fund. You're on fund.
Speaker 1:That's right. It's crazy. I thought you guys were on I I would've if I had to guess what fund you're on, it would've been, like, at least five by by now. Maybe you're, like, you got that wise status or something. But, yeah, just just getting started.
Speaker 5:So I appreciate that. Yeah. I it feels like we're still brand new, though. Like, it I still feel I still refer to myself as, a new investor, but we've been running BTV for six years now.
Speaker 2:Any change in strategy with this fund, or can you just restate the thesis for me?
Speaker 5:Yeah. So the thesis is investing in the best pre seed and seed stage founders, building fintech companies.
Speaker 4:Yeah.
Speaker 5:We take a pretty broad view on fintech. So for us, there's a lot of stuff that you might not think about as fintech. Vertical SaaS is probably the main one. Mhmm. So if you look at Toast, Shopify, those kind of com Mindbody Mhmm.
Speaker 5:Those kind of companies are actually largely fintech companies. So 80% plus of the revenue for those companies comes from financial services. Mhmm. So we invest in those kind of companies. We invest in some b two b marketplaces.
Speaker 5:But primarily, we're just investing in the future financial services.
Speaker 2:What's the mood on the ground with LPs? Like, is it easier than in past years to raise this fund? Is contrarian to be focused on fintech when everything's AI? Or were you able to kind of roll that into the narrative because every fintech company is obviously leveraging AI now? What what talking points were you running through?
Speaker 5:Yeah. It was definitely I mean, the the mood on fintech is definitely not what it was when we last raised, which was 2021. Nothing could could have been I mean, in twenty twenty
Speaker 1:one hundred x revenue multiples for a team that had started two weeks ago and had, like, you know, an idea of a customer. It was absolutely crazy.
Speaker 5:Exactly. We actually rate we announced it yesterday, and we we haven't even started deploying from the fund, but we actually raised it
Speaker 4:a little while ago.
Speaker 5:I think now things are probably a little bit easier. But it it was it was a harder fundraise for us than than the last one in 2021 for sure. But we'd actually we actually are larger than we had planned for. We'd planned to shrink our fund size, and the idea was last fund took us three and a half years to deploy. This one, we wanted to go back to a three year cycle.
Speaker 5:So we were gonna go from one fifty to one twenty five, but we ended up ended up going to one forty. We wanted to have we had some LPs that we really wanted to have involved. So overall, it wasn't too bad, and we're excited to deploy from it. But I I think since we raised it and now, there's actually it's actually like, the market is ripping. You had Chime, Klarna, eToro go public, Circle, and you have so many more coming, Wealthfront, Nivon, Ethos in our portfolio.
Speaker 5:And so I think the market is pretty hot on fintech. So, actually, I was just before this talking to another fintech investor, who's who's about to raise, and I said, now is a great time to raise. The market's awesome for fintech.
Speaker 2:What I mean, you've been through a proper cycle. What what advice did you give to founders at that time? What are the stories that you share about, like, buckling up and getting through rough periods, rough patches as a founder or entrepreneur?
Speaker 5:Yeah. It's just like do what you can to survive. Mhmm. And if you live another day and you're a smart team, you'll figure it out. And we've had that happen.
Speaker 5:Like, some of our companies basically had no growth for two years, and then all of a sudden, the last year had total inflection. Mhmm. And and I think '23 and '24 '22 and '23 were really hard for fintech because a lot of these companies are selling into other fintech companies. If you're an infrastructure company, you're selling into other fintech companies, and the funding completely stopped. There were all these, you know, neobank for x that got funded in 2021, like, way too many of them.
Speaker 5:And so you had it was just so easy to grow in 2021. And then '22 and '23, you had to grow significantly just to tread water, to stay, like, even. And then now we're seeing companies grow a lot. So it was really just stay alive, hunker down. A lot of our companies got to a point where they didn't need to raise money, and, obviously, that's the best time to raise money.
Speaker 5:Now now investors are are throwing cash at them.
Speaker 1:How are you thinking about stablecoins? I I think we've talked about them, you know, before. It's in such an it's an interesting time to me because people are so bullish on stablecoins as a category, and yet it seems like the people the companies best suited to capitalize on this opportunity are not startups. And I don't know if you you the same way, but you see Stripe's launch of open issuance. You see which was interesting to me because we had a company on like a week and a half prior that was building the exact same product.
Speaker 1:And then Stripe launches it, and they already have, you know
Speaker 2:There's also a public company circle that like is mature Yeah. In that space. And there's a Tether Yeah. And then
Speaker 1:and then it feels like also interesting because even the the scaled stablecoins that Tether USDT, USDC are now under attack from every institution Yep. On earth. And, you know, the the pie will grow, but at the same time, it's gonna get sliced up. So where are you thinking about the opportunities to deploy against this kind of technology at the early stage?
Speaker 5:Yeah. I think you're right. I think one challenge we're having right now is we're just seeing so especially, we talked about last time I was on the the Bridge acquisition. Since then, we've just been seeing so many companies built in every sector within stablecoins. And I haven't seen that many that compelled me to say, okay.
Speaker 5:This is you're gonna beat Stripe on this. Like, Stripe is executing at a at a amazing clip, and I I haven't found the the use cases I found are specific to a geo. So, like, you're solving a problem in Latin America, and I think you might be the best person for that. You might be able to Yeah.
Speaker 1:I'm an investor in
Speaker 5:need in that region.
Speaker 1:Yeah. I have an investor in Mentayo, which is doing something, you know, similar to Bridge but just for LatAm. Right? And so they've been building banking relationships for years now, and so they're they're in a good position. But but, yeah, it's a it's a it's a weird thing for venture capitalists and angel investors to be, at least from my point of view, super bullish on the category, and it's like it's hard to deploy against it other than just buying some Stripe secondaries.
Speaker 5:It's totally true. One thing that I like, a couple days ago, Stripe announced that they were doing agentic payments, and, obviously, that was coming. But it's so hard. Like, I met at least a dozen companies in the last year doing agentic payments. And I feel like as a VC, you're not supposed to say, you know, what if Stripe does this?
Speaker 5:But it was so obvious that Stripe was going to do it.
Speaker 1:Yeah. But saying what if Stripe does this is very different than what if what if Google does this. Right? It's like Stripe
Speaker 2:is Morgan exactly Stanley does this or JPMorgan or, like, an older company that maybe isn't in founder mode, maybe not in Silicon Valley, maybe not Sam Altman on the cap table with the company that's doing the thing. It's like, you know, this is gonna happen. Anyway, we have
Speaker 5:one last question. Payments are gonna be awesome. Yeah. And it's and, like so it's the same thing that you just said, Jordy, which is, like, I believe in the category. I believe that I will be making purchases through, like, through my chat interface.
Speaker 5:Mhmm. But I don't think that there's necessarily a lot of opportunities for new start
Speaker 2:Yeah. Last question from the chat. They're calling you the people's mayor of San Francisco, and everyone wants to know what's the best place to get Indian food in San Francisco or New York?
Speaker 5:It's a great question. Okay. All right. So New York, my favorite restaurant in the country in the world Indian restaurant is my favorite high end Indian restaurant is a place called Ambassador's Clubhouse. It's it's in London.
Speaker 5:Mhmm. And there's Ambassador's Clubhouse in Gymkhana, and they're actually opening in New York next year. So that's gonna be big. Woah.
Speaker 2:Lines out the door.
Speaker 5:Lines out the door.
Speaker 2:Book a
Speaker 5:flight then there's book a flight now. STEMMA in New York is very good. Mhmm. I gotta say, in in San Francisco, I don't think we have excellent high end Indian food. There's a place called Etan in Palo Alto.
Speaker 5:And then my best my favorite spots are Udupi Palace on Valencia Street, Cola Pasi also in the Mission, and then there's a new spot called Jalebi Street on Haight or in the Haight. Mhmm. So those would be my three go tos in San Francisco, all kind of hole in the wall places, but that's the best Indian food.
Speaker 2:Thank you so much for breaking it down and coming on the show.
Speaker 1:And excited to get new core product.
Speaker 2:If it's impossible to get a reservation in any of those places after this pod drops. Thank you so much. Great stuff. Great catching up. See you later.
Speaker 2:We'll talk to you soon. Let me tell you about adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology, out of home expertise, and data to enable efficiency in this ad buying across the globe.
Speaker 2:We have our next guest in the Restream waiting room. We will bring in Santi from dual entity dual entry. Sorry.
Speaker 1:What's happening?
Speaker 2:How you doing? Sorry to keep you waiting. What's the latest in your world? Please
Speaker 1:Do we have video? Do we have sound?
Speaker 2:No. Well, we do have another advertisement. We got
Speaker 1:Don't tempt, John.
Speaker 2:Getbezel.com. Your bezel concierge is available to source you any watch on the planet. Seriously, any watch.
Speaker 1:What did you call it yesterday?
Speaker 2:AGI for your wrist or something. I don't know. It's probably odd ones.
Speaker 1:Out of home ads for your wrist?
Speaker 2:Yeah. He used out of home ads for your wrist. Oh, yeah.
Speaker 4:It works now.
Speaker 2:Hey. Welcome to the TBP at UltraDome.
Speaker 1:What's happening?
Speaker 2:How are you doing?
Speaker 4:Thanks for having me.
Speaker 2:Sorry for keeping you waiting. We were going long with Sheel, but good to have you here. Please introduce yourself, the company, and what's the news today?
Speaker 4:Thank you. I'm I'm Santi. I'm a cofounder of Dual Entry. We're an AI ERP, and we're announcing our $90,000,000 Series A.
Speaker 1:Let's go.
Speaker 2:Love the
Speaker 1:RPGs. Like, there's nothing
Speaker 7:that can feel
Speaker 1:you're coming out of stealth with an AI ERP with 90,000,000 of funding. It just doesn't I don't think it gets better than that.
Speaker 2:It's fantastic. Led by
Speaker 1:none other than lent to income. Been long on it? What were you doing before?
Speaker 4:We've been working for about a year. It does feel good. Will say it does feel good. But it feels even better to be able to run a on an ERP that doesn't suck like the 1990s. But
Speaker 2:For sure.
Speaker 4:And we've been working for about a year now under Stealth. We used to run a product company before, and we suffered one of those legacy ERP migrations for over nine months. Oh, yeah. And, you know, as good entrepreneurs, whenever you have a problem, that means there's an opportunity to solve.
Speaker 2:When I'm gonna steal Jordi's question. When did you know you wanted to build an ERP?
Speaker 4:The fur the first day we were out of the out of the other prior company, we promised ourselves that was the day we were gonna do it. And it was I'll tell you. Was a very unpopular you know, we had we had ton of people saying, it would back you guys for any other idea other than that one because that sounds like a very stupid one.
Speaker 2:Yeah. So what is the track? How you are you I mean, it's the hardest system of record to rip out. It's an enterprise. It's a company that is built on something else out there.
Speaker 2:They're maybe unhappy, but they're really stuck. Are you better at migrations with AI? Are you just better at sales? Like, how do you actually onboard customers? Because I have to imagine that you have some serious traction to hit this Series A so quickly.
Speaker 4:Yeah. That's exactly right. I mean, we we understood from the very beginning that, like, ERPs like having chronic back pain. Yep. Right?
Speaker 4:It's sort of a pain that keeps growing with time. But if if you have to think about about back pain surgery, it's very risky. It's expensive. It might go wrong.
Speaker 3:Mhmm.
Speaker 4:And we had to fix that problem. And the back pain surgery in ERPs is the implementation process. It takes, you know, nine months. The failure rates are over fifty percent. It's very expensive at times two, three times the software fee.
Speaker 4:So we've we fixed that with our next day ERP migration engine. So we actually plug in to whatever system you're coming from, whether it's legacy, ERP, or starter cloud, and we and we actually have you live by the time that you're doing the demo in most cases.
Speaker 2:Whether they like it or not. Wow. Pull the data from their cold, dead hands. I love it. What what It's
Speaker 4:customers' data.
Speaker 2:Yeah. Of course. It is. What's the speaking of customers, what's the median size of a customer? Are you going, mid market to start?
Speaker 2:Are you going for the huge Fortune 100, Fortune 10? How do you see the market now, and then where will it develop?
Speaker 4:Yeah. So we we're targeting the mid market. We're starting with companies as small as 5,000,000. Mhmm. But we have publicly listed traded companies running on DualInch today.
Speaker 4:They're full set of books. Not not a subsidiary, not as, you know, not a department, just the entire company.
Speaker 2:Mhmm.
Speaker 4:And the the most important thing for us is to give customers the certainty that this is the last ERP that they'll ever have to do.
Speaker 1:Yeah.
Speaker 4:You know, you you jump on, you you upgrade from starter cloud, and this will take you all the way.
Speaker 1:Why why do you think why do you guys think you're having more success getting people to trust you, switch over? Is is a lot of it helping, I imagine, agentically sort of do the migration? Or or what's what's working now where, you know, some of the investors you talked to maybe a year ago were saying, I'd fund you, but you're doing anything else. Yep.
Speaker 4:Well, I think I think AI is bridging that last mile in migration. Mhmm. Especially when it comes to the mappings that need to be done. They're very tedious, and they're conventionally done by overseas teams. Then, you know, it takes weeks, and it's error prone.
Speaker 4:But I think, you know, the best thing is we don't have to ask our customers for trust. We just say, go use it, demo it out. You don't have to come with us with questions and think about all the hypotheticals because you also don't know how your business is gonna evolve. And, you know, it's we're the we're the we're the only European in the world that we know of that can actually give you a free trial that lets you use your data and consume it. And by the way, this ERP migration engine is perpetual.
Speaker 4:So, like, you can plug it in, and if it takes you a month to make that decision, the data will continue to flow. You can show your CEO your reporting. I know you can really play around with it, test all the edge cases before you make a decision. And that's how we've run the trust of our of our customers.
Speaker 1:Interesting. Are you how are you how are you actually, and feel free to pass on the question if it's too much detail, but are you basically saying, you have an existing legacy ERP, finish out your contract, but we'll start the migration over. You can start building trust with us now, and then when it comes up for your contract renewal on your existing ERP, you can make the call then. Do I wanna stay with the legacy, or do I have enough trust with you guys to just, you know, keep running here?
Speaker 4:That's exactly right. And we send you a link. You click on it. We authorize the connection, and the data's flowing within twenty four hours. And then, you know, at times people like it so much more, and they they realize how much time they're saving that they're actually, you know, pay you know, starting the starting the the pay for dual entry is not even the the biggest issue or the biggest part of the budget is the fact that they're saving, you know, two or three people doing manual categorizations and the same journal entries every single month.
Speaker 4:And accounting is a very repetitive task by nature, but every accountant doesn't wanna be bogged down in, like, repetitive tasks. Every finance team member wants to be forward looking and thinking, you know, sitting down with the CEO and saying these are the areas where we should be investing more, and these are the areas we should be cutting back. Not not chasing invoices or categorizing transactions, and we're drafting the same journals over and over. So so oftentimes they see that, and they make the jump even even before the contract collapses.
Speaker 1:Very cool. What's, what's the go to market going forward? You guys have been obviously in stealth. You're out of stealth now. Are you gonna get loud?
Speaker 1:Are you gonna buy up all the billboards on the 101? What's the next move?
Speaker 6:Well well, we like to get referrals.
Speaker 4:That's the best way. So far, we've gotten most of our customers through referrals from existing customers, and we we hope to continue that. We've never gotten so many demo requests in in an hour in the past, but, we're excited to to use those customers as a way to get the word out and and have more people come come to us. There's no reason why you have need to have a dinosaur in your office today.
Speaker 1:I love it. Nice. You yeah. Should Skip a skip the dinosaur, get a horse. We have a we have a full sized horse here.
Speaker 2:Snatchers are in.
Speaker 1:Dual entry is really sounding like this a stallion of the the ERP market.
Speaker 2:I love it.
Speaker 4:So Dual edition stallion. I like
Speaker 1:that. Congratulations. For the dinos.
Speaker 2:Very inspirational office view right there. Wonderful having you on the show today. Thanks so much for stopping by.
Speaker 4:Thank you for having me. Thank you, John. Thank you very much.
Speaker 2:Cheers. Good to meet you. Let me tell you about Wander. Find your happy place. 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. Our last guest of the show is Austin from Double Zero. He's in the Restream waiting room. Let's bring him into the TBP and UltraDrum.
Speaker 2:Austin, how are you doing? How's it going?
Speaker 8:Good. Thanks for having me on.
Speaker 2:Thanks for hopping on. Kick us off with an introduction to you and the company and the news today. We'd love to get up to speed on Double Zero.
Speaker 8:Yeah. Certainly. So Double Zero is a blockchain protocol building an alternative Internet for high performance distributed systems and blockchain. And so at its core, this is a physical fiber infrastructure network run by multiple independent contributors to allow systems like blockchains to go faster than the public Internet will allow them to go.
Speaker 2:What's the status quo in the industry? I feel like if I sign up for AWS, I'm gonna get charged ingress and egress bills, and they're kind of abstracting the, like, underlying infrastructure, the physical infrastructure. At what level are you operating? How does all of this fit together?
Speaker 8:Yeah. So this is what's called an OSI layer one, two, and three network. So this is pretty much the lowest level down in the networking stack. And so this is the physical cables, the protocols that transport over them. But fundamentally, this is exactly what you're talking about.
Speaker 8:The egress and ingress problems in cloud data centers.
Speaker 2:Mhmm.
Speaker 8:That's pretty much the only thing that you get billed for in a data center when you really think about it, especially the cloud data centers. And so this is a way that they generate lock in. It is easier to stay in the Amazon ecosystem because data moving within Amazon does not get charged, whereas data leaving Amazon does. And this is why you have such a vendor lock in in the cloud market today. And so if you think about the ultimate mission of decentralizing the entire AWS stack or the GCP stack and basically rebuilding these on decentralized rails, not just for the point of decentralization, but so you have a greater choice from a consumer standpoint.
Speaker 8:The network and connectivity layer really is, in in my view, the first piece of that that we need to tackle. And it's, in some ways, the most broken piece of it today. The Internet is an incredible resource. It connects us all. It serves data in far flung regions of the world, but it was never built for high performance systems.
Speaker 8:And so Wall Street does not use the public Internet. Facebook does not really use the public Internet. Even all these big Internet companies that we think of, they run private networks, and they run private networks because the Internet is too slow to show you Instagram reels. And so why are we building what is supposed to be the alternative replacement to traditional finance on those rails?
Speaker 2:How do you who are the suppliers that are bringing Internet connectivity to the network? Do you need to do deals with companies like Akamai? I I I don't really know who the major players are in the space that you would be pitching to bring resources to the system.
Speaker 8:Yeah. So today, we have 11 independent, basically, fiber contributors to the network. And this ranges from the folks you'd expect, you know, large trading firms that own and operate their own private networks Mhmm. For high frequency trading purposes, like DRW, Cumberland, and, you know, Jump, to digital asset native firms like Galaxy that are this is a new thing for them running private fiber, but it supports a lot of the other business lines that they already do, like market making and trading. Yep.
Speaker 8:And then you have data centers themselves, bare metal providers like TerraSwitch, Latitude, servers.com, Cherry Servers getting involved on this as well as a way to basically make their regions more attractive for this new burgeoning blockchain and AI infrastructure. And then you sort of have the last category, which are blockchain native groups themselves like JITO.
Speaker 2:How does the high frequency trading, like, example work? I remember reading was it Flash Boys where they build the fiber lines between Chicago and the New York Stock Exchange so they can trade commodities faster or something. Do those just go dark outside of market hours and then you can resell the slack capacity? Is that the idea? Or why would a high frequency trading firm if they built this pipe and they got it and they're making money off of it, in what world do they end up with extra capacity that they wanna sell back to basically a grid that you're building?
Speaker 8:Yeah. So there's two things that are going on there. One is simply the technology changes very quickly. And so if you are in the business of being a high frequency trading firm, you pay a pretty extreme premium to be on the absolute fastest path. Yep.
Speaker 8:In blockchain, the second fastest path or the fourth fastest path is actually totally fine. These are still orders of magnitude improvement over the public Internet.
Speaker 2:Yep.
Speaker 8:And so sometimes they have what you'd call sort of secondary inventory that they can contribute to something like double zero. The other component of this too is there's not that many financial centers in the world when you think about it. It's a pretty tractable problem for a large trading firm with a large budget to go out and have a team that connects all these major financial centers. You look at just Solana, it's running over 300 data centers around the world.
Speaker 2:Yeah.
Speaker 8:And when you include other blockchains, that number goes up dramatically. It's too big of a problem for any one organization to solve and address. And so what do we turn to? We turn to a consortium model powered and aligned through tokens. Mhmm.
Speaker 8:And that is what the token is the best unit at. It can bring disparate efforts together, again, a common goal to benefit all. And it really is an innovation on the traditional corporate structure, which, of course, in itself changed the world in its own right. Sure. Tokens just happen to be the best way to create this type of alignment.
Speaker 1:Yeah. Your guys' token launched this morning sometime in the early hours. It's now trading at somewhere around a $6,000,000,000 fully diluted valuation. What goes into, like, what's the process to this get point from a, more from like a financial standpoint? Obviously, you need traction with the network and usage and a bunch of different partners, but we talk to a lot of more traditional public company CEOs.
Speaker 1:We'll often talk to them on their IPO day, we'll talk about the different processes around the road shows. But on the digital asset side, launching a network like this, what are kind of the key steps leading up to this moment? And congratulations, by the way.
Speaker 8:Thank you. Yes. One of the things that is different about a blockchain protocol than, you know, any sort of traditional structure is we don't own and operate any of the fiber. And now you can say, sure. Uber does not own and operate any of the cars.
Speaker 8:But at the end of the day, the role of the core contributors to the double zero protocol is to build the software layer with other core contributors that then allow this contribution of fiber units to it. And so a ton of the work in the early days on this project, apart from the software side of how do we actually build these things in decentralized fashions that allow for permissionless contribution of fiber, but how do we go out and convince these people who have access to fiber that they should take a quite valuable asset that has fairly high OpEx and fairly high CapEx and contribute that to the double zero network? And a lot of that comes back to you know, our contributors for the most part are fundamental believers in the power of this technology. We don't have today, like, an AT and T or a Verizon or a Lumen contributing capacity to the network because those are largely either publicly traded companies or companies that are owned by PE firms, and they're expecting a very traditional dependable type of return from that. Crypto is not that.
Speaker 8:This is this is very much the Wild West. The hope, of course, is that over time, we, you know, basically prove that it's worth contributing even a small slice of a global fiber network owned by one of these subsea cable firms or, you know, these traditional telcos into the mix. And we've had a number of outreaches just today
Speaker 2:Yeah.
Speaker 8:From more traditional players asking how they can get involved. The real thing here is all of these companies, it's the same thing that the cable companies were going through in The United States maybe ten or fifteen years ago. They're they're priced and they're valued and they sell effectively dumb pipes. And I don't mean that in a derogatory way. They're quite sophisticated advanced technologies, but they don't have the same ability to take a cut of what flows over them the way you see in other types of spaces, especially in software.
Speaker 8:And so the promise of going from selling something for a fixed dollar amount to a token model where validators operating on it and traders operating on it pay a percentage of their earnings into the network is a potentially disruptive business model opportunity for these traditional players, the same way that the cloud providers yes. There was a technology revolution there, but it was as much a business revolution as anything else.
Speaker 1:How has the new admin been helpful to you guys, even just in terms of being generally pro crypto? I I don't know how long you've been building the the foundation in the network, but I imagine, you know, this wouldn't have been the kind of thing you wanted to launch two, three years ago for a number of reasons.
Speaker 8:Yeah. I mean, I got involved in crypto in late twenty seventeen, early twenty eighteen. Worked for a company called Republic. Worked for a company called Bison Trails, which then got acquired by Coinbase and spent the previous four years working for the Solana Foundation. So I've been through the changing regulatory landscape.
Speaker 8:You know, we received a no action letter from the SEC for key components of the flow of tokens in the double zero network.
Speaker 2:Shout
Speaker 8:out Cooley. Really important.
Speaker 2:Shout out Cooley. That was your law firm.
Speaker 5:Right? Shout out Cooley.
Speaker 2:Yes. Let's go. We love lawyers here. They don't get me
Speaker 8:a drink. Go. I owe him a drink.
Speaker 5:Yes. But There we go.
Speaker 2:There we go.
Speaker 8:I I I will say that the, you know, the whole thing that came together here was, you know, going to the SEC and asking for relief. So this is a process where you can basically go to them and say, we would like to do this. What do you think of this? Do you see any problems with this under current securities law? And so we applied for relief on two specific areas.
Speaker 8:The first area was around the reward distributions to contributors. So, basically, the network programmatically paying out tokens proportional to the the utility that a contributor brings to the network. This is not like proof of stake. This is much more similar to proof of work where if you generate 10% of the hash power for Bitcoin, you get 10% of the rewards.
Speaker 2:Yeah.
Speaker 8:But this is really important to us because many of our potential contributors, especially as we sort of move lower down and closer to the direct fiber owners Bigger. They are not sophisticated crypto lawyers. Yeah. They may not even be sophisticated securities lawyers. And and that sort of reassurance that we can get from the SEC of, hey.
Speaker 8:This programmatic payment based on this type of model, they don't see any issue with that from a security standpoint.
Speaker 2:Yeah. Makes a ton of sense.
Speaker 1:Well, absolutely massive day. Yeah. Congratulations. I it's unlike public company CEOs, the market closes Yeah. Then you get a little breather.
Speaker 1:You're not so fortunate, but Twenty four second market. Massive milestone. And as you start knocking down some of these massive partnerships, come back on and tell us about it.
Speaker 2:Thanks so Thank much for hopping on the show. We'll talk to you soon. Cheers.
Speaker 4:Appreciate it.
Speaker 2:He said that the Internet is not a series of tubes. Are you familiar with the famous line that was said in Congress, I believe, the Internet is a series of tubes? There's a music video. This is a Music video? Huge sign of respect.
Speaker 2:They turned it into a meme. It's from 02/2006. It's one of the one of the great sign of, you know, respect in my culture to show you a YouTube video that you might not have seen. I wanna show you this video from Internet Explorer four point o, the Internet being a series of tubes. Let's play this.
Speaker 7:The Internet is not the Internet is not a big truck. The Internet is not something that you just dump something on. The Internet is not
Speaker 2:This is huge in 02/2006.
Speaker 7:Truck. The Internet is is is a series of tubes. The Internet
Speaker 2:This is a real clip from real sound bite. We can cut it. This is a real clip from a testimony that happened in Washington, DC with a lawmaker who's trying to explain the Internet to to Congress, basically, with
Speaker 1:saying Not trucks.
Speaker 2:It's not a truck. It's not something you just dump something on. It's not fixed. It's a flow of tubes. And he was lambasted and made fun of for this.
Speaker 2:But it's kind of true. It's like the flow rate matters more than the fixed quantity. It's not a data center. It's a series of tubes.
Speaker 1:It's a series of tubes.
Speaker 2:Anyway, how
Speaker 1:did you sleep last night? Brutally. It's it's just been such it's honestly been a brutal week of sleep.
Speaker 2:I got an 85.
Speaker 1:I got a 65.
Speaker 2:Oh, give me the sound. Give me the sound. Let's go. Yes.
Speaker 1:There you go.
Speaker 2:Boom. Yeah.
Speaker 1:They have this new feature that tracks your sleep debt.
Speaker 2:Oh, I saw this. The sleep debt is really, really nagging me these days.
Speaker 1:I've accumulated two and a half.
Speaker 2:Okay. I'm at zero. I'm at perfect sleep balance. Not in debt. No surplus.
Speaker 2:No debt. I'm doing good.
Speaker 1:It's great because I have this handicap of having a much longer drive And in to so it kind of I really got to push myself Equalizes for the twins. Earlier. Yeah. It equalizes for the twins. Yeah.
Speaker 1:It was great to see. We saw Will Robbins in the chat earlier.
Speaker 2:He was pumping
Speaker 1:up dual entry. We had dual entry and then double zero back to back.
Speaker 2:That is a funny
Speaker 1:A little bit confusing. But apparently, Will did the seed of dual entry. So he's feeling pretty good That's amazing. This announcement.
Speaker 2:In other news, in Inversion Space announced ARC, the world's first space based delivery vehicle. This video looks remarkable. ARC enables the on demand delivery of cargo and effects to anywhere in on Earth in under an hour and offers unparalleled hypersonic testing. Sounds very sci fi. They have a rendered video here.
Speaker 2:We'll have to dig in and understand the actual timeline for this. It seems like a very ambitious project, but congrats to everyone over there at Inversion Space.
Speaker 1:Very cool. And we gotta get on with London. We do. Tomorrow, unfortunately, we will not have a stream. We encourage you to
Speaker 2:Touch grass.
Speaker 1:Watch our recap of the week. Yes. Maybe we'll release the recap early.
Speaker 2:Get back in.
Speaker 1:No show tomorrow.
Speaker 2:Watch the first episode we ever dropped. There's a lot of lore in there.
Speaker 1:Lot of lore. Enjoy that. Lot of fun.
Speaker 2:We will
Speaker 1:be off tomorrow. Will be back Monday
Speaker 7:We'll be
Speaker 1:back with full force. I cannot wait. We hope you all have a fantastic weekend. But don't start until tomorrow. Maybe around five.
Speaker 1:Maybe around ten. Maybe burn the midnight oil. But Yeah. Have a great weekend. We love you.
Speaker 1:We'll see you Monday.
Speaker 2:See you later. Bye.