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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN. Today is Monday, 07/13/2026. We are live from the TBPN UltraGround, the temple of technology, the fortress of finance, the capital of capital. I like the bell, Ben. That's a good one.
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Speaker 1:It's on the sound board now. Well, huge news over the weekend dropped. Mark Gurman dropped a massive scoop right after we got off on Friday night. Friday afternoon, Mark Gurman broke the news that Apple is suing OpenAI. Apple and OpenAI are going to war.
Speaker 1:The Wall Street Journal called it thermonuclear echoed past attacks calling back to the jobs era. We'll get to that. But first, the accusations. Apple is suing OpenAI, accusing it of stealing Apple's trade secrets. Apple Inc sued OpenAI for trade secret theft, accusing the artificial intelligence startup and its hardware chief of engaging in a coordinated campaign to steal information about upcoming products.
Speaker 1:The iPhone maker said in a suit Friday that OpenAI encouraged Apple employees to share information, components, drawings, and other materials related to upcoming products. So like the robot? What are the upcoming products from Apple right now? Part of the part of efforts by the AI The lamp. Company.
Speaker 1:The lamp. Yeah.
Speaker 2:The lamp. Smart like. The cobra lamp.
Speaker 1:The AI company developed its own suite of devices. I feel like rumors around the device have gone back and forth. Is it phone? Is it is it headphones? Is it something else?
Speaker 1:A pin? We're having Mark Gurman on the show today to break it down for us. He's coming out at 12:45.
Speaker 2:The funny thing is I bet Gurman knows more about OpenAI's devices than we do because That's we specifically
Speaker 1:why we're having a lot.
Speaker 2:Didn't want to be read in on Yeah. Anything Yeah. Device related because we knew there was going to be so much speculation that we just said like, yeah, we're we're gonna be in the dark.
Speaker 1:We'll find out.
Speaker 2:We'll find out, like
Speaker 1:From the timeline. Everyone.
Speaker 2:The timeline.
Speaker 1:So the center of the lawsuit is a former Apple employee named Chang Liu, who left for OpenAI and allegedly kept his Apple laptop for weeks after he left the company, downloaded proprietary Apple files and encouraged other Apple employees to do the same. Yeah. If that happened, that's a big no no. When you leave a company, you got to leave your device on the day you leave, usually. I mean, I was remembering back to I mean, we had a very graceful transition to this business from from Founders Fund.
Speaker 1:But, you know, I had, like, emails from in Founders Fund from, people that went to Heredicon, people that'd be a good guess. And I was like, I'm not even gonna export that. I'm just gonna, like, leave that and I'll reestablish those connections to people, cold email them, find find their information independently. Just don't take any files. Leave them with the other Standard practice.
Speaker 1:Yeah. It is standard practice. You know, some people can make mistakes. Also, are just allegations. None of this is confirmed.
Speaker 1:And this lawsuit will be going on for like months, if not years. We can go through some of the other historical examples that are sort of interesting to sort of set the the table on what might play out here. So Apple's filings also spends quite a few words on the fact that OpenAI has poached more than 400 employees from the company in recent years. That's not going to make anyone in Cupertino happy. They hate poaching.
Speaker 1:There's the famous Steve Jobs, Adobe, back and forth. Tang Tan left Apple in 2024 to co found the AI hardware startup, IO, with Johnny Ive, which OpenAI acquired in 2025 as part of its consumer AI device effort. Tan is now OpenAI's chief hardware officer and he's leading the consumer device effort there. In his lawsuit, Apple says Tan systemically solicited sensitive information from Apple employees who were interviewing for roles at OpenAI. A lot of perspective on this flying around the timeline, but Ben Thompson and Rolf Winkler in The Wall Street Journal both had interesting angles here.
Speaker 1:Winkler
Speaker 2:Wait. They have a Ben Thompson at The Wall Street Journal?
Speaker 1:No. No. No. Ben Thompson at Stratackeray and Wolf I said that wrong. Brandon got it cracked in that newsletter.
Speaker 1:Had interesting angles here. We can read little bit of what Ralph said in the journal. He says, open Apple's OpenAI suit echoes past attacks. Steve Jobs declared thermonuclear war, which is a great if you're trying to fire up your staff and you're going to battle, even if it's We're not just
Speaker 2:going to battle.
Speaker 1:Even if it's just for like, will the next device have 12 gigs of RAM or 32? That's boring. Thermonuclear war is exciting. You got to fire up the staff. So he declared Steve Jobs declared thermonuclear war on Google on Google's Android operating system in 2010 calling it a stolen product.
Speaker 1:Now his successor is going to battle against Apple's most most dangerous rival. In one of his last acts as Apple's chief executive before successor John Turnis takes over, Tim Cook fired a missile at OpenAI. In a lawsuit filed Friday, Apple alleged senior OpenAI executive who once sat atop Apple's own product design team was involved in a months long campaign to steal Apple trade secrets. OpenAI replied at this point and said, we have no interest in Apple's trade secrets. But Ralph continues.
Speaker 1:He says, although it isn't clear yet what evidence the company has to back up all of its claims, the suit lands before OpenAI has released a product and as the technology industry races to build artificial intelligence powered devices that can move society beyond the smartphone era. And there's a whole debate to be had for, you know, where that goes and the value of devices in a world where the agents are just kind of off working and you can maybe just text them or send them a message on Telegram, there's a whole debate over what the future is of devices more devices and different devices or is it just no devices? But OpenAI has clearly been working on devices as we know from the IO acquisition. And the Wall Street Journal says the winner could dominate the future just as Apple's iPhone ruled the consumer market for the last twenty years. Quote, I am not afraid of Apple, but I have tremendous got to flip to a six.
Speaker 1:Let's see. Tremendous respect for them. OpenAI CEO Sam Allman posted on X Saturday.
Speaker 2:And he said S tier company.
Speaker 1:Hey. Said, oh, that didn't make it into the paper. Maybe the Wall Street Journal readers aren't familiar with a proper tier list. They think S is down at the bottom when in fact it is above A. Big tech rivals have long tried to supplant Apple, but so far Google, Samsung, Meta Platforms, Microsoft, and amazon.com have all failed.
Speaker 1:It is crazy. People think, okay, Android was successful but captured like one tenth of the actual value because the margins on Android are so much lower. But you forget that Jeff Bezos stood on stage and said, we're launching the Amazon Fire Phone and we're going to win. And then Microsoft had the whole Microsoft Phone and they were really pushing that. And Facebook, Chamath was at Facebook working on the Facebook phone.
Speaker 2:Sort of a rite of passage.
Speaker 1:It is a rite of passage. It it it's a it's an ultimate long shot as a as an up and coming hyperscaler to it's a rite of passage to go and and challenge Apple. Now OpenAI is emerging as a new threat. It has it has built powerful AI models and is working to toward an unspecified family of devices, interesting to hear that, to run them, devices that could supplant Apple's. Apple's innovation engine failed to develop hit AI products and features, leaving it vulnerable to new entrants.
Speaker 1:Its suit could be an attempt to throw sand in the gears at OpenAI. I mean, a lawsuit is always a little bit of sand at the very least. Even if everything gets dropped quickly, it can still drag on for at least a year. Company observers say this to slow poaching of Apple staffers, for instance. So this could just slow the the the poaching that's happening.
Speaker 1:Friday lawsuit Friday's lawsuit has echoes of one of Apple's the ones Apple's filed against various Android ecosystem players beginning in 2010, a legal battle royale with hardware makers producing rival phones that played out over eight years. The central allegation then, as now, was a rival stole Apple's innovations. Apple said Samsung slavishly copied the iPhone with smartphones it was already selling by the millions, which Samsung denied. The company settled in 2018 after a long costly battle. Eight years.
Speaker 1:In AI years, that's like a million decades. Wow. At the center of each case Apple has pursued was a perceived breach of trust trust. So Google's then chief executive, Eric Schmidt, sat on Apple's board as his company developed Android. So there was like you're you're on the board of Apple saying, yeah.
Speaker 1:We should definitely block
Speaker 2:Kind of similar to the Krieger, Figma dynamic.
Speaker 1:Yeah. Very, very tricky. I'm going to destroy Android because it's a stolen product, Jobs told biographer Walter Isaacson. Apple alleges in its new suit that, quote, at every level OpenAI has been stealing Apple's trade secrets. A more junior employee appeared to cross the line by using an Apple employee's login to access Apple servers.
Speaker 1:But Apple has also accused OpenAI's hardware chief Tang Tan of soliciting trade secrets from its employees in interviews for jobs and encouraging them to bring quote actual parts from Apple for show and tell sessions at OpenAI. Tan worked at Apple for twenty four years rising to vice president of product design. But bringing parts to an engineering interview isn't unusual, say people familiar with the tech hiring process. That was shocking to me. I it does feel unusual to me.
Speaker 1:But, I mean, I guess people would bring don't know. If if something's public, like if you're bringing like if you're if you just went to the app
Speaker 2:store and just bought an iPad. A a recent iPhone.
Speaker 1:Yeah. And you're just bringing that and you're like, I did the button. You see how it clicks this way? Maybe that's okay. But if it's like actual secret parts, that would be really, really bad.
Speaker 1:Interviewers want candidates to talk through their work. The question is whether the parts were sensitive, something Apple doesn't offer evidence of and is seeking is seeking discovery to determine. A spokesperson for OpenAI said, quote, we have no interest in other companies' trade secrets. We we remain focused on building innovative technology that empowers everyday people everywhere. Tan and a more senior employee, Chang Liu, didn't respond to a request for comment.
Speaker 1:At Apple, Tan worked very closely with Johnny Ive, its famous industrial design chief. Ive left Apple to build his own design firm, later poaching Tan. Apple OpenAI bought that company, IO Products, in 2025 to spearhead its own device development efforts. Bedfellows can quickly become enemies in tech. OpenAI made the IO acquisition revealing its intention to wean customers off smartphone screens a year after announcing a partnership with Apple to integrate ChatGPT into some parts of the iPhone.
Speaker 1:The Wall Street Journal has a content licensing partnership with OpenAI, of course. Bigger companies have so far failed to dent Apple's dominance. And they talk about Amazon's Fire Phone, Microsoft Windows Phone. Mark Zuckerberg also tried to do an end run around the iPhone with a metaverse that never fully disrupted the iPhone, of course. Elon Musk has also chafed at Apple's control of the digital economy.
Speaker 1:A unit of SpaceX is suing Apple for disadvantaging its AI app and the company is now prototyping its own smartphone like AI device. Apple has said that its App Store relies on algorithms and expert curation and doesn't suppress rivals. The irony of Apple's case against OpenAI is that Apple itself has so frequently been accused of stealing others' companies' ideas that it has spawned a new verb, Sherlocking, which is a reference to a an app for the Mac that allowed you to hit, I think, command space and get a finder window to search everything across your entire desktop. That that that that eventually became the spotlight feature baked into Apple, but it was not very good for the company that was running Sherlock. And so Apple this is the same like, you know, the labs will steamroll this or this.
Speaker 1:These many companies just got put out of business by this company. And sometimes it works, sometimes it doesn't. It just sort of depends. Apple recently tried to Sherlock Particle, but it seems like Particle is doing fine. And so it sort of depends on the
Speaker 2:actual haven't got a single invite from Apple's True. Tru invite system.
Speaker 1:At the same time, when was the last time you paid for a flashlight app? Probably never. Right? Because all of that stuff's baked in. Apple's trying to
Speaker 2:catch up. I saw someone actually go pretty viral on Instagram with the world's most expensive flashlight app. Think it was like a 100 it was it was like $5 to turn the light on and then a $129 to turn it off.
Speaker 1:Mhmm. That's great. Genius. I like those I I also like the ones that are like vibe coding a calculator and you type in whatever you want to multiply and then it's like $200 to unlock the answer. It's like easy money.
Speaker 2:Ben Thompson read through the filing as as he as he would. He says, You can read Apple's filing here and almost everything you need to know is actually on the first page in the first four paragraphs. Paragraph one is a succinct introduction to the case. This case is about Apple's former employees stealing trade secrets for the benefit of OpenAI. Apple brings this suit to put a stop to it.
Speaker 2:Paragraph two recounts how Apple has spent a lot of time and money building products that delight customers. Paragraph three basically says that everything they do is a trade secret. And paragraph four introduces Chang Liu and spends the next page and a half recounting his crimes. Ben Thompson says Liu is almost certainly guilty and an idiot to boot. Not mincing words there.
Speaker 2:Apple has a lot of details about Liu's behavior including dozens downloading dozens of proprietary Apple hardware related files and encouraging other Apple employees to do the same. Because he did it on his Apple issued laptop. And furthermore, logged on to Apple servers for weeks after he had already left the company. Ben says Apple security says, as depicted in this case, is shockingly poor. First, the company lost track of the fact that Lou didn't return one of his laptops or disable it remotely.
Speaker 2:Second, due to what Apple claimed was a bug, Lou continued to have access to the company's internal servers for weeks. And Ben has like a bunch of bunch of other context on here. Yeah. They he talks about how, you know, Tan is is the point person for the 400 people that Apple says that OpenAI has hired away from the smartphone maker. That is no crime, of course, although one does get the sense Apple sure thinks it is.
Speaker 2:Mhmm. And I'm trying to think if anything
Speaker 1:The funny the funniest moment in here is where he says a couple quick points. A few weeks ago, there was bit of hubbub about meta capturing keystrokes from employees in order to train AI. What confused me was people surprised that a company had this level of access to company issued hardware in the first place. Moreover, while that access may very well be theoretical for a lot of companies, at Apple, it has always been a well known fact going at least as far back as when I was an intern there, Ben Thompson was an intern there, sixteen years ago, that the company could and would go through everything if you ever cross them. And so it's it's yeah.
Speaker 1:Everyone should know this, but somehow it it at least Apple alleges that it was not known or or just a terrible mistake or brazen, you know, brazen mistake. He does he does talk about a little bit of the the the motivations for why you're going to thermonuclear war. He says the AI era has sucked for Apple.
Speaker 2:Yeah. So he says tan is the face of Apple betrayal. OpenAI is the face of AI generally, and it's hard to escape the sense that Apple just really hates AI. And why shouldn't they? Go back to 2022, Apple had it all figured out.
Speaker 2:They had a lock on the premium end of the smartphone market, which they continued to slowly expand even as they had figured out how to earn services revenue from every iPhone user basically forever. Business was good. AI, has ruined all of that. Suddenly, Apple has to make existential decisions about whether or not to compete in the model game. Then they then they totally embarrassed themselves with the 2024 new Siri introduction, had their most prominent blogger declare that something is rotten in the state of Cupertino, had to completely overhaul their software and services teams, lost their position as kings of the supply chain and most favored customer of TSMC to the point where they had to enact an emergency mid cycle price rise, and then worst of all, to actually wrestle with the possibility that AI is such a paradigm shift that it might actually threaten the iPhone.
Speaker 2:And then on top of all that, they lost they lose 400 of their best employees, recruit recruited by the lead hardware engineer for the iPhone in partnership with their most famous executive outside of Steve Jobs and have to know that all 400 of those employees are getting hit up by their former colleagues looking for a job as well. The AI era has sucked for Apple even if they aren't necessarily doomed and even if they relaunched new Siri ends up working out, their position is still more fragile than it was and everything about life is worse. Given that, how sweet it must feel to suddenly have a smoking gun in the form of a seriously dumb employee blatantly lifting documents and to use it as a cudgel to exact revenge on the company that represents everything that is making your life miserable. The perspective does make one wonder if that phrase run to its core was projection in the end. AI is changing the world and Apple's contribution is to deliver two year old technology differentiated by exclusive access to data it won't share.
Speaker 2:It certainly has no interest in delivering on a new AI driven paradigm that endangers its iPhone franchise in any way. Any of its employees who wish to do exactly that meanwhile are being told loud and clear that Apple doesn't just think it owns your laptop, but also your mind and knowledge. I think it mostly stinks, but then again, rotten things usually do. So circling back to something is rotten in a
Speaker 1:state It's thermonuclear. For Tino. But it's not
Speaker 2:the first Go sign up for Stratocari. Read the whole article. There's a bunch of context. And we're gonna come back to the story at 12:45 Pacific. With Mark Gurman.
Speaker 2:The Gurmanator.
Speaker 1:Let me tell you about Railway. Railway is an all in one intelligent cloud provider. Use your favorite agents to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. It's not the first thermonuclear war between hyperscalers, Mag-seven companies. You go back to Apple versus Microsoft.
Speaker 1:They had a massive copyright war over the look and feel of the desktop. So Apple sued Microsoft and Hewlett Packard actually back in '19 what was it? 1997 when they reset the relationship, saying that Windows 2.03 and Windows three point o and the HP NewWave, I don't know what happened with that, copied the Mac's graphical interface. The courts concluded that the similarities were already licensed functional, standard to graphical user interfaces and otherwise unprotectable. In 1994, the Ninth Circuit affirmed that Apple's GUI deserved only relatively thin copyright protection against virtually copying.
Speaker 1:Of course, we talked a little bit about the Android proxy patent war between Apple and Google. Apple rarely attacked Google head on. Instead, sued the manufacturers that were distributing Android, so HTC, Samsung, Motorola, over smartphone design software patents. There was a whole era where you would see Apple launch something and then Samsung, Motorola, HTC would sort of conform to that norm and how much of that is just the standard industry practice, what consumers want and how much of it is a direct infringement. In 2014, they agreed to dismiss all of their direct smartphone patent cases without entering a comprehensive cross license.
Speaker 1:But the broader war continued through Apple's seven year Samsung battle. In 2018, the jury awarded Apple a $539,000,000 damage in a retrial after which Apple and Samsung reached an undisclosed settlement. So Apple won meaningful verdicts and established that industry design could carry real patent value. Amazon and Apple Apple and Amazon have also gone at it over ebook pricing conspiracy aimed at Amazon. This was in 2009.
Speaker 1:Amazon had established $9.99 as the highly visible price for many new Kindle bestsellers. As Apple prepared the iPad and the iBookstore, it arranged agency agreements under which publishers rather than retailers set consumer prices. The Justice Department proved that Apple could help coordinate publishers to eliminate retail price competition and raise ebook prices above Amazon's $9.99 standard. And so Amazon won this one. Apple briefly changed the economics of the market but lost the antitrust case.
Speaker 1:Of course, there's Apple app tracking transparency, Apple versus Meta, another thermonuclear war not fully played out in the courts, but it did create basically a $10,000,000,000 revenue headwind for Meta in the short term, which they ultimately overcame. There's a whole bunch of others. The two two Mag seven participants who have never really fought, Microsoft and Meta have never really had a company level feud. Microsoft and Tesla also have never really had a corporate battle. Tesla sort of stays out a lot of a lot of this because they're not in as many of the same markets.
Speaker 1:Of course, the the big one that people are pointing to these days is Uber versus Google. Where is this? So this is the most dramatic corporate espionage style case in modern technology. Anthony Lebendowski, he was a central engineer in Google's self driving car program and as he prepared to leave, he downloaded thousands of confidential files. That's a huge no no.
Speaker 1:He founded an autonomous truck startup, Auto, which Uber then acquired, bringing Lebendowski and his team inside Uber's autonomous vehicle organization. Waymo alleged that Uber had obtained and was using its LiDAR and autonomous driving trade secrets. The case exposed internal Uber communications, raised questions about what then CEO Travis Kalanick knew and threatened to derail Uber's already expensive autonomy program. Days into the February 2018 trial, Uber settled. Waymo received 0.34% of Uber's equity, which was worth $245,000,000 at the time.
Speaker 1:It's actually worth more now. I don't know if we Waymo held on to that, but Crazy. Sort of a financial civil settlement. And interestingly, Uber promised not to incorporate Waymo's confidential information into its systems. So they agreed, hey, like, we might have seen some of that confidential trade secret information from that company that we acquired.
Speaker 1:We won't use any of that. And it feels like that sort of derailed Uber's self driving program pretty substantially because you're always walking on eggshells. And then there's probably things that you could have potentially independently discovered, but if you know that Waymo has independently discovered them separately, you can't use it. And so there's all these different techniques and tricks that then are off limits even if they are just best practices that you
Speaker 2:could Yeah. Have The found right way to do it.
Speaker 1:Exactly. Yeah. So very tricky situation. And Lewandowski so there were actually two two suits in the Uber Waymo battle. There was the civil suit which settled, of course, as I mentioned.
Speaker 1:But Levandowski separately pled guilty to trade secret theft in a criminal trial. The Justice Department said he admitted downloading thousands of Google files with the intention of benefiting himself and Uber. He was sentenced to eighteen months in prison, fined and ordered to pay restitution, but he was pardoned before he actually entered prison. And then I believe he started a religion? I think he was starting like an AI church, which was way ahead of the curve because it feels like people are like in AI psychosis as of like 2024, and he sort of had it back in 2021, 2022.
Speaker 1:He was like leading to this idea that like AI was God.
Speaker 3:It was 2017. 2017. Way of the future.
Speaker 1:Way of the future. That is crazy. Crazy crazy crazy. So Uber eventually sold the Advanced Technologies Group, which was their self driving unit, to Aurora in 2020. And it valued that unit at $4,000,000,000.
Speaker 1:So, like, pretty substantial progress for something that was sort of beaten up. And there there were a few different reasons. The Waymo litigation cost, technical difficulty and then there was this fatal 2018 Uber autonomous vehicle crash that really made it difficult for them. And Uber has sort of shifted their strategy now. They're much more of like this platform and they want and they don't want to develop Yeah.
Speaker 2:Wanna work with cyber cap Yeah. And Waymo
Speaker 4:But there
Speaker 2:was all the different
Speaker 1:There was recent reporting that Uber's like actually trying to block the rollout of self driving cars in some markets and there's a whole bunch of interesting stories about Oh,
Speaker 2:I didn't know Uber was
Speaker 1:Potentially. It was one tweet I saw. I think it's in the timeline somewhere. We can get to it at some point. But
Speaker 2:What's going on with Paramount? Let's And remember, we're gonna come back to this with Mark Gurman himself who broke the actual story on Friday. So we'll have another thirty minutes to talk about this story. But
Speaker 1:first, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.
Speaker 1:Yes.
Speaker 2:So Rohan in semaphore says Paramount Waze leaving California Mhmm. Over Warner Brothers rift. What's going on here, John?
Speaker 1:So this is on the basis that California is trying to block the Paramount the Paramount acquisition of Warner Brothers Discovery. Rohan says, I'm told that if the states do choose to sue, they would have to assume the damages stemming from that action chiefly. 600,000,000 to 1,000,000,000 1,200,000,000 in ticking fees would potentially be paid out to state state taxpayers. So if if they leave, those those fees would not be paid to the state. Paramount just issued this response to the state AG lawsuit.
Speaker 1:Brian Stelter is breaking it down, saying the complaint distorts settled antitrust law, and is based on misrepresentation of competition in the in in the entertainment industry today. So Paramount is weighing whether to shift major operations out of California after attorney general Rob Banta and 11 other state attorneys general filed attorneys general, I always get that wrong, filed today to block its $110,000,000,000 acquisition of Warner Brothers Discovery. This story was back and forth. Well, Netflix get it. Paramount wound up with the highest bid, the most cash offer.
Speaker 1:It got approved. Huge windfall for David Zaslav over at Warner Brothers Discovery, but a very controversial acquisition. All
Speaker 2:the shareholders?
Speaker 1:Yeah. Everyone did very well. But people were very worried because they owned two two historic studio lots in Los Angeles. Would they need both of those? Would they convert one to apartment buildings?
Speaker 1:This was sort of the the the nightmare case for fans of Hollywood filmmaking that it would become a more agile, lean, globally distributed studio. Would they be making less films? Would they change their pattern? Because as they are two separate buyers of intellectual property and scripts that come to Hollywood, they can pay higher prices, there's less competition, potentially the price of the the industry becomes more monopolistic and there's less buying activity. So the proposed deal was the and is the largest merger in Hollywood history.
Speaker 1:It would combine two of the five major film distributors and give the resulting company control of roughly 27 of US film distribution and basic cable channels. Of course, anyone who's in favor of this was arguing that, well, people are watching Instagram and YouTube all day long and listening to podcasts and livestreams. You can't look at Hollywood in isolation. It's okay if there's a little bit of consolidation in an industry that's facing incredible pressure from a new disruptive industry. We saw this play out with the Shutterstock Getty Images question where you have immense pressure in the stock image market from an entirely new outsider technology, consolidation makes a lot of sense usually in those scenarios.
Speaker 1:But if you're just looking at it, you're just defining the industry as only Hollywood studios, then yes, this is this does represent more consolidation. Friends and advisers to Paramount CEO David Ellison had reportedly been urging him to reconsider the company's California footprint in the event that California sued over the deal. Previously, Paramount had offered to keep both of its historic studio lots in California open and released 30 films annually, which was basically just adding the fifteen and fifteen that were made from both studios, I believe, something like that. But executives have privately complained that Bonta refused to negotiate. Worth noting that the Justice Department has already cleared the merger while China and other international regulators have raised no comparable objections thus far.
Speaker 1:So from an antitrust perspective, it looks like the merger can go through, but the state of California is potentially trying to block it now. So Paramount says California's complaint distorts settled antitrust law and is based on misrepresentation of competition in the entertainment industry today. It'd be very interesting to see where they actually go if they do leave California because there's been so much so much movement to Texas and Florida. But in terms of filmmaking, Toronto, London, Atlanta, exactly, so maybe Georgia. I don't know.
Speaker 1:I'm sure every other state is gunning for this because bringing in bringing an industry to town is is almost always a good move. More jobs for your local economy, more more tax dollars going around. There will probably be a competition, but we'll see we'll see where this where this develops and we might have someone from the media analysis industry come on the show later this week to discuss.
Speaker 2:There is a new letter. Mhmm. New letter just dropped. We are hoping for a new billion dollar PDF. Mhmm.
Speaker 2:But we got another letter. More than 200 researchers and economists including Jack Clark, Jeff Dean, Noam Brown, Tyler Cohen, Sholto
Speaker 1:Mhmm.
Speaker 2:John Schulman, Eric Schmidt, Dean Ball, Yoshua Benjiro. Yoshua Benjiro. Eric Schmidt. Signed a statement urging governments and institutions to act now to prepare for AI's economic impact. They start the Pretty simple by saying AI may become radically more powerful over the next ten years.
Speaker 1:They don't This isn't like the start. It's just three statements. The entire
Speaker 2:signing They're
Speaker 1:saying we all agree with these three statements.
Speaker 2:They they agree that AI could possibly become radically more powerful over the next ten years.
Speaker 1:Which feels very conservative. That's
Speaker 2:like an incredible you're you're not committing to anything at all.
Speaker 1:No. I mean, are plenty of people that are saying that AI will go away in the next ten years. Like it's it's useless, you know.
Speaker 2:No one's really saying that.
Speaker 1:And Zidrin's saying that and like a 100,000 people are liking his post when he says that. So like there are a 100,000 people out there that are like, it hallucinates. It's dumb. It's it's not useful. It's going to go
Speaker 2:out of billions I'm just saying to go away.
Speaker 1:I'm just saying there there are people that don't believe this. But yes, this does feel like a like a like actually an easier statement to agree with than the short timelines of fast takeoff in two years, recursive self improvement. Anything that's coming out of basically any lab is much more aggressive than this. Elon's timelines have been solving new physics in two years, stuff like that. Yeah.
Speaker 2:Okay. So point one, AI may become radically more powerful over the next ten years. Point two, this could drive an unprecedented transformation of our economy larger than the industrial revolution, but unfolding over a vastly shorter time frame.
Speaker 1:Mhmm.
Speaker 2:It could bring risks, including large scale job displacement as well as opportunities such as major gains in living standards. And three, economists, policymakers, and technology leaders must now to understand the economics of transformative AI and to build the incentives, guardrails, and institutions needed to steer AI in a direction that complements humans and benefits society.
Speaker 1:So that last one's not a probability?
Speaker 3:Yeah.
Speaker 1:The first one, it feels like you can sign if you're at 1%. Right? 1% chance that it gets more more radically more powerful over the next ten years. 1% chance that it drives an unprecedented transformation of our economy. But as long as you agree that economists, policymakers, and technology leaders must act now to understand the economics of transformative AI, you sign this.
Speaker 1:So three is really the strongest the strongest the the most strongly worded bullet point.
Speaker 2:Well, it's interesting because the people signing this are technology leaders. So they really say
Speaker 1:Not not the actual top leaders, interestingly. So if you look at who signed this, you have a ton of people from OpenAI, Anthropic, Stanford, Meter, every Harvard, like every lab. Bam Margera, I think you said? No, no, no. Google, Jeff Dean.
Speaker 1:Like, you have people from top from top institutions, but not the CEOs, not the investors. Like there's been other there's been other I mean, guess Reid Hoffman and Jan Tullen and who else is I mean, Eric Schmidt's on here. But notably absent are Sam Altman, Daria Amade. I don't believe Demis is on here. Is he on here?
Speaker 3:Yeah. But you you have Jack Clark, Sarah Fryer.
Speaker 1:Yeah. So but what's interesting is that it's it's sort of like the proxies. It's the it's like the right hand men and women of the AI leaders that are signing. And so you have to imagine that that Dario, Sam, Elon, Demis, Sundar, Satya, like they got the message. This was received to them and they were like, you guys can solve this but you can sign this but we're not signing it.
Speaker 1:Because this doesn't feel like something that happens behind the scenes where Sarah Fryer doesn't go to Sam or or Shalto doesn't bring this up to Dario. Oh, there's a new letter. I'm thinking of signing it. Like Yeah. It feels like it's So
Speaker 3:what's the like that that big pause letter Yeah. That Elon did sign at one point?
Speaker 1:A lot of people signed it. In that one, every lab leader actually did sign. And this one isn't even a pause but somehow didn't rise to the aura level and maybe that's deliberate because then it gets clipped and turned into headlines where it's like, you know, blank lab leader. Fill in anyone. It's going to be a it's going be
Speaker 2:Here's an x y z
Speaker 1:Yes. It's going be head of blank lab. If you're the first one to jump, if you're Sam or Dario or Demis or Elon, they just said that it could bring large scale job displacement. So you're going to have that headline tag next to you as opposed to if it's like someone at a lab who is not the CEO of that lab says it can bring large scale job displays. Because right now, it seems like at the very top, a lot of the lab leaders are sort of backing off of the near term job displacement worries.
Speaker 3:Yeah. But I I think this still feels much more like the the AI doc than like AI twenty forty. Right? And that like Yes. The message I got from the AI doc was like, we all gotta talk about this.
Speaker 3:You know, let's get everyone in a room and like figure something out.
Speaker 1:We don't Yeah. Know
Speaker 3:all what it's gonna be. We gotta figure something out. Yeah. Where AI twenty four is like, okay. We have this.
Speaker 3:This is our our plan a. Yep. We should be doing this specific set of of, you know, policies, tasks, whatever. Yes. It's like This is much more
Speaker 1:like Specifically we
Speaker 3:all gotta talk rules about
Speaker 1:with China. Like US and China, like nuclear level negotiations on how things slow down. It's it's it's global slowdown of large scale AI training runs, essentially. And this is very, yeah, this is very, very different. So much easier to sign.
Speaker 1:But AI 2040 didn't have signatories. I mean, it had people that helped out with it in general. And then they did poll them as to, they polled some of the authors to say, which one do you think is most likely to play out? But I guess by any I guess everyone implicitly in the AI 2040, if you contributed to that document, you're sort of alongside advocating for is it plan A? Because it's the fourth one that they offer.
Speaker 1:I think is it plan d?
Speaker 3:I think plan a is is what they
Speaker 1:Plan a. Okay.
Speaker 5:There's bunch
Speaker 3:of plans and then I
Speaker 6:think Okay.
Speaker 3:Like, in the order on the website, I think it is the fourth one. But that's Yeah. Arbitrary.
Speaker 1:AI twenty forty. I'm trying to load the site, but it's not loading. Anyway, we can come back to that. We must act now. I I like this.
Speaker 1:I like I like the idea of of more economic research, more policy making research to understand these things. It it it's not like it's hard to get wrong because the end result is just more information, more studies, more, you know, conversation and proposals. It's not anything specifically. Like, if it was like, we like, large scale job job displacement is coming next month. We need to, you know, print money and do economic stimulus broadly like we did during COVID.
Speaker 1:I would be like, I don't know that that like, what if the job displacement doesn't come up and we just create a bunch of inflation? Like, I don't I don't know if we should do that. But we should be ready for if we hit 10% unemployment, 15% unemployment, that we do have stimulus in the back pocket. And I think we do with where interest rates are and with the with the history of how we've dealt with employment shocks in the past. So I think we are, like, set up pretty well if that happens.
Speaker 1:It doesn't seem like it's happening at this moment.
Speaker 2:But Yeah.
Speaker 1:Tell us about
Speaker 2:the critical the critical view on this is the people building the technology say that we gotta do something about this. Mhmm. Like like it's kind of a discontinuation of like that we gotta do something about this and maybe you just need to do a new letter every single month forever. Maybe. But
Speaker 1:I don't know. Let me tell you about Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system context.
Speaker 2:I want that. For the
Speaker 1:next ad read, I want the ship horn. The ship horn is where it's at. That one is so underrated.
Speaker 2:So I wanted to talk about the mustard controversy over the weekend, but the original video was deleted.
Speaker 1:Okay.
Speaker 2:And it's now really hard to
Speaker 1:Just describe it to me. We have audio listeners.
Speaker 5:So
Speaker 2:there's two car content creators
Speaker 1:Yes.
Speaker 2:In the LA area. Okay. One of them is an account called Collected Bands Okay. Who's a Porsche enthusiast, a BMW enthusiast Mhmm. Likes to drive fast.
Speaker 1:Younger?
Speaker 2:On the younger side. Okay. And then you have a guy named Canyon Carver Okay. Who's effectively like a vigilante of the canyon. So he hangs up in a lot of the popular driving areas
Speaker 7:And
Speaker 1:he doesn't like to drive fast?
Speaker 2:Canyon Harbor, that's He likes to drive like pretty, would say, close to the speed limit.
Speaker 4:Okay.
Speaker 2:And so he hangs out places like ACH Yep. In the Santa Monica Mountains, you know, around Malibu. ACH? Angeles Crest Highway.
Speaker 1:Okay.
Speaker 2:And which is which is near you. Yeah. And so he likens himself to kind of the sheriff or the mayor. The Batman. He calls him the Batman.
Speaker 2:He claims to be the original Meta Ray Ban's like car Oh, interesting. Guy. I don't don't know how true that is. But over the weekend, these two crossed paths. Collided.
Speaker 2:And there there was a video that ran up to hundreds of thousands of likes before on on Saturday to Sunday before being deleted where the canyon carver is driving and he gets passed by this other car influencer and then they end up they end up in the same parking lot and they have a very quite a funny exchange where they're just talking talking talking past each other sort of perfectly. The younger guy is accusing the canyon carver of just being 40, which is kind of funny. And the canyon carver accusing the other the the younger guy of his dad buying the car for him, to which he immediately says, just because my dad bought me this car doesn't mean I can't afford it. Which is which is a is a funny Yeah. Which is a funny line.
Speaker 2:But anyways, this is so inside baseball, like LA, Southern California car enthusiast drama that I think it's time to move on because without the original video Doesn't work. It's it's really tough.
Speaker 1:What is your stance on cutting the mustard?
Speaker 2:Yeah. So I'm very against cutting the mustard. Okay. You like
Speaker 1:a safe highway, a safe canyon to be carved safely.
Speaker 2:Yes. So cutting the mustard is when, you know, if someone is driving fast on a, let's say, a canyon backcountry road and they're using the entire road. Right? Okay. They're of disregarding the lanes.
Speaker 2:The double yellow line Yeah. Double yellow. They're crossing it
Speaker 1:moving violation. That's
Speaker 2:illegal. Right? Yeah. No. It's objectively against the law.
Speaker 2:Yeah. And then it's very dangerous because you're coming around a tight corner and if somebody's in your lane, it can be over really quickly. So
Speaker 1:we should have a sort of a like a an auto bond style rule where the yellow line doesn't apply. There's certain highways in in in America. It's like we we can't we can't get over the speed limit thing. We gotta have the speed limit. There's still a hard speed limit, but you can drive wherever you want.
Speaker 1:Absolutely. I mean, the problem is like is like Willow Springs is like forty five minutes away. Just go to the track and it's a public course. You can pay and go and drive as fast as you want and there is no traffic coming the other way. It's much safer.
Speaker 1:So if you're trying to push your car to the limit, like, there is a way to do that legally and safely, and so you should probably I just do
Speaker 2:thought it was interesting because it was very generational. You have, like, the millennial, you know, against the the brain rotted sort of zoomer and then they just couldn't even have a conversation. They were just sort of speaking past each other Mhmm. You know, doing various ad hominins.
Speaker 1:Okay. Well, last car question from Reddit r/wealth. If I inherit $4,000,000 USD and a home at 35 years old, would it be responsible for me to just buy a Ferrari? Why just? It's a funny way to put it.
Speaker 1:I think, yes. I mean, you're not gonna probably beat the S and P, but a lot of the cars hold their value. Might be fun. I don't know. It depends on your lifestyle.
Speaker 1:If you have five kids in private schools or something, like 4,000,000 probably isn't enough. Depends on where that home is. Do you live in Manhattan?
Speaker 2:It comes down entirely to what car you select. Yeah. Because there's a lot of cars that, you know, if you're not driving them a lot Yeah. It it would probably, you know, at least track t bills. Right?
Speaker 1:Yeah. From a from a Certain certain I live in Manhattan. I'm trying to send my kids the most elite boarding schools. I have seven kids and I'm considering a Luche. That would be a rough go.
Speaker 1:But if you're out in, you know, an affordable town, plenty of space, you're not gonna spend that much money, the 4 million's gonna last you a long time. Maybe pick up a
Speaker 2:There was a powerful omen What was this? At Yellowstone National Park Why was this Friday evening.
Speaker 1:Oh, yes. This bison. We got a place
Speaker 2:A whole bison.
Speaker 1:A tourist was seriously injured Friday evening after being thrown eight feet into the air by a bull bison in Yellowstone National Park. If you're in Yellowstone, be very, very careful. I didn't realize that bison roamed so freely and could and were so aggressive. Professional photographer Mike McLeod filmed the incident and said the bison was angry, agitated, and charging anything and everything. And the the scale of this beast is really massive.
Speaker 1:It looks absolutely huge and it goes all around chasing this this poor elderly tourist who
Speaker 2:Who ended up being totally okay. Oh, really? And when you see this, it's almost unbelievable.
Speaker 1:That's remarkable. It's a Cowboy State Daily says tourist was seriously injured, but I guess the man did recover, which is very very good to hear. You never want to see someone injured on the timeline. But he really does get thrown way, way in the air. And he's running around.
Speaker 1:I was wondering, he should have gone for the car right there. Right? But there there you go. He's thrown in the air. Absolutely insane.
Speaker 2:I'm so glad he's okay.
Speaker 1:I like that people are already remixing this. WildSpicy says, if it was me out there We got it. Different, throw the bison at
Speaker 7:the Yeah.
Speaker 2:If Alexis if that was Alexis being chased, this is what would happen.
Speaker 1:Let's bring Alexis in. But first, let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange. Look at that
Speaker 2:fog horn for me. Well, we
Speaker 1:have Alexis Ohanian from seven seven six. He's the founder and GP with us here in the TBPN UltraDome. Alexis, how are doing? Welcome to the show.
Speaker 4:Doing very well, gentlemen. I'm glad glad that guy's okay. You know, I saw actually, if you find yourself in that situation, apparently, if you run I think bison can't go laterally, so you wanna kinda
Speaker 7:see I
Speaker 1:thought that was crocodiles and alligators you wanna zigzag. Is zigzag just fart? Oh, that's a fart.
Speaker 4:I I think that's something Floridians tell
Speaker 2:tourists. Okay. You gotta be, like, NFL mode. Yeah. Just running routes
Speaker 1:on the Yes. That's the move. Absolutely.
Speaker 2:Side step on. Good to know. Good to know.
Speaker 1:Absolutely wild. How is your summer going? Are you engrossed in World Cup? What what what's your summer been like? Give me a little recap.
Speaker 4:Ironically ironically, I have spent most of this World Cup actually in Europe watching the matches back in America Okay. Like two, three in the morning. Yeah. I'm more of, you know, I'm more of a women's sports fan.
Speaker 1:Of course.
Speaker 4:Of course. It's been great it's been great watching. The American men showed up in a big way. Obviously, you know, it didn't get as far as any of us, you know, we would have wanted to see a title. But very happy for the American men made it to the 16, and I don't know who to root for now.
Speaker 4:I guess technically England Yeah. Given my Chelsea women's connection. Okay. We'll see.
Speaker 1:Here you go. We'll see how it goes. Yeah. I want your current thesis on premier in real life events, maybe in the age of AI, maybe there's some other boom happening, but I have some stats here that are crazy that were on the timeline from Adam Miller. UFC, it sold for $4,000,000,000 in 2016, worth $15,000,000,000 today.
Speaker 1:F one revenue is up a 115% since 2017. Team values are up Mhmm. Two seventy six. FIFA World Cup viewership is on track to to pass twenty twenty two's 5,000,000,000. Revenue is up 56%.
Speaker 1:NBA media rights tripled in a decade. NFL, 110,000,000,000 in media rights through 2033. You
Speaker 4:know what?
Speaker 1:Broadway is up. Live comedy VC, more.
Speaker 2:What do call them? Rocks. 600,000,000.
Speaker 1:High Rocks went from 650 athletes in 2017 to 1,500,000. World music tours, top 100 tours grossed 8,900,000,000. How are you thinking about this? Is this an opportunity as a as a fan or as an investor or as a businessman? Like, what what what's your overall thinking on live events in the future?
Speaker 4:Look. Like, last time I was on here, I think I was gassing up my track and field league
Speaker 1:That's right.
Speaker 4:With the Olympics there, Athlos, every year, not just every four years. I've been obviously very early in in sparking the women's sports movement, starting Angel City and the investment there. But I you can roll the tape. There is footage from, I think, two and a half years ago at Cannes Lion where I call sports the ultimate anti AI bet. Wow.
Speaker 4:And I think just two weeks ago, JPMorgan Chase is on stage saying the same thing. So what we mapped out at seven seven six three years ago, right after ChatGPT
Speaker 1:Yeah.
Speaker 4:Was basically, we know it's gonna get really good at writing, and then it's gonna get really good at writing code. And then, you know, once actually it was after Dali, I was like, okay. Even this first version's janky
Speaker 1:Yeah.
Speaker 4:But moving pictures are just one step away from static pictures. Yeah. So in the world of entertainment, right, the pillars of entertainment, you have music industry, you have movie, Hollywood, and you have sports. What will remain unchanged and durable in the age of AI even when you can have a pixel perfect highlight
Speaker 1:Mhmm.
Speaker 4:Of Mbappe scoring a goal, it will do nothing for the soul Yeah. Because it never actually happened. Yeah. Human experience is the reason why it's valuable. And I you know, Josh Kushner, who's a friend and obviously an incredibly successful investor, his first investment from Thrive Eternal, great name by the way, was San Francisco baseball giants.
Speaker 4:Yep. Like like, we're now seeing a moment where the smartest folks in venture capital realizing this is not just a trophy asset. And what what we've been privileged to see now for three, four, five, six years is under the hood of these organizations, guys, these the best sports teams in the world, the best sports leagues in the world are run like a tech company in, the mid aughts. They are devoid of modern technology. They're Yeah.
Speaker 2:I've asked every time an athlete comes on here, I'm expecting them to have some like, you know, basically performance super intelligent Yeah. Like, oh, I have
Speaker 1:a database with every lift I've done. It tells me exactly what to lift and what where to ice and it's like, no, I just have a guy that, you know, tells me if it hurts, I walk it off or something.
Speaker 4:And and it's also on the business side of the house. Right? And so it's it's even if you even asking a question like, what CRM do you use? Like, again, you're gonna get some weird looks and, like, maybe it's Salesforce or, oh, we've been trying this new thing called Hub HubSpot.
Speaker 1:Yeah.
Speaker 4:And and so all across the stack, there is tremendous opportunity for efficiency for software. And so the smart money we're we're we're investing, and they're also figuring out how to invest in the tools that'll make these even more profitable enterprises.
Speaker 2:Yeah.
Speaker 4:And I'm fired up because I also I get I I spend all of my time at seven seven six either investing in the technology of the future that is gonna accelerate. So we all had Philip on here, our guy from Star Cloud. Right? Data centers in space. Crazy ambitious infrastructure play.
Speaker 1:Yeah.
Speaker 4:Or the other end of the barbell of everything I know will be left. Yeah. And so a consumer electronics company like Mod Retro, let software keep getting cheaper to make. We still need to have physical things to play those games. We should make them closer to or in America.
Speaker 4:And so that's a trend that I know is gonna continue to grow. And so I I I really see the world through those two sides of the barbell, either rapidly accelerating the world or everything that I know is still gonna be left and matter even more. And it's funny you mentioned Broadway. Yeah. Pulled the tweet.
Speaker 4:I think it was a year and a half ago. I'm still trying to find the venture backed model for it, but my bet was because anyone will be able to sort of dream up their version of iron man where they're iron man and obviously with making sure daddy Disney gets their check. But like, you're gonna have this dispersion of culture and like acting at the end of the day is way more normal for our species in person than it is going into a dark theater and watching it on screen.
Speaker 1:Well, actually found tweet. Found the tweet. Bonus hot take. I think we'll see live theater make a comeback in the next ten years and you said this July 7. Yeah.
Speaker 2:I got one for you. Yeah. Think you should incubate a robot circus. An event that you can go to and and I I think in about two years, you will have robots capable of feats that will be wildly impressive.
Speaker 1:You
Speaker 2:can imagine like a drone show that where the drones fly up to within, you know, a foot from your face. You've got humanoids going going crazy.
Speaker 4:Canadians right now running Cirque du Soleil who are very mad. I think I will I'll give you this.
Speaker 2:Yeah. It's robot Cirque du Soleil.
Speaker 4:I think there is so part of the why, at least for me with those things, and maybe this is just exposing myself as a bad person, is the fact that you're like again, you're not hoping anyone gets hurt, but it's this anxiety of like, my oh god, what's gonna happen? Like, is this person gonna survive this death defying
Speaker 1:act? And
Speaker 2:Yeah. So you need to make the the the person viewing it feel like they're gonna die.
Speaker 1:That's the thrill. I see some It's a drone. It's a
Speaker 2:drone that flies. It's a you're strapped in you're strapped into like a, you know, like a roller coaster seat and the drone flies like two feet from your face. Know?
Speaker 1:Can I can take that?
Speaker 4:I do think I'm I'm fond of saying that like no one will pay money to watch like robots play Or imagine golf is an easy one. No one's gonna wanna watch a Ryder Cup where, you know, you get 18 hole in ones Yeah. Against another 18 hole in ones. But but there are some sports you know, we've seen battle bots. Right?
Speaker 4:There there's there's versions of that with, like, gladiator sort of robots fighting to death. There's probably a version of drone racing
Speaker 1:Yeah.
Speaker 4:That allows oh, yeah. I mean, you play Twisted Metal, but allows weapons
Speaker 1:Oh, yeah.
Speaker 4:Yeah. Drones. Right? There's there there are there are new sports that are, like, that are actually entirely robotic, but that are levels up of American one or human ones that we don't want humans doing. Mhmm.
Speaker 4:But but I had not considered making it an experience for the fans.
Speaker 1:Okay. So really quickly. So as live events are growing, I feel like a lot of collectibles come out of the It's live like the game ball, the the the card of the player who played in the live event and you're sort of there's like this chain of custody, chain of authenticity. This thing happened. This human was great at this thing.
Speaker 1:There was lore. You could have gone and saw it with your own eyes and now there's a card that commemorates it. What's going on in the collectible space? Is there as much of a boom there? What do you expect happening over the next couple of years and what are you doing specifically?
Speaker 4:Well, you know, a few years back, I created the when I heard trading cards were coming back, I quietly amassed the largest collection ever of my wife's cards just because I didn't want them ending up in some other collector's house. I wanted my kids to have that.
Speaker 2:You're like no one's gonna make money on these cards but me.
Speaker 1:No. These are friendly areas. No. Sorry. No.
Speaker 1:They're gonna stay in the family forever. No. No. But you also you drive up the price by by taking all of those cards into the treasury. Yeah.
Speaker 1:And so everyone's like, the the the lore is growing. Yes. It's And Many knock on effects.
Speaker 4:I, and then I was the lead investor in Alt, so marketplace, which just had they just set a record for an all time kaboom. Was like a $1,400,000 for a one of one Wemby. Wow. What's
Speaker 2:a kaboom?
Speaker 4:Real dollars. So it's a it is a a brand within the universe of trading cards that was inspired by, like, nineties era comics. Okay. And so it's your favorite players, but sort of restylized as, like, cartoons, almost like a comic book inspired art.
Speaker 1:Yeah.
Speaker 4:And for whatever reason, it struck a nerve with the culture. And and so you have these record auctions happening. A big fan of collectible video games, match worn, you know, athletic apparel. All these things I think are culture assets for us. Like, having an 86 FLIR Jordan rookie card on my desk in mint condition is a better sort of more satisfying flex for me than having, a Warhol.
Speaker 4:No offense to Warhol, but I think the energy of contemporary art. Yeah. I think this is our contemporary art, especially for a generation of us who grew grew up collecting or idolizing. And and now that, you know, Topps and others have gotten much smarter. Oh, by the way, bought a trading card company.
Speaker 1:Yeah. Explain that.
Speaker 4:I mean, is this
Speaker 2:normal firm?
Speaker 1:Is it within the firm? Yeah. Like, interesting strategy.
Speaker 4:When you're the biggest LP in the VC firm, you get to kinda do what you wanna do. We have amazing institutional LPs. Don't get me wrong, but, like, I I sign up every deal we do at seven seven six. I'm when I'm hitting send. Yeah.
Speaker 4:I'm thinking of my kid's inheritance. Right? It this is my money more than anyone else's. Totally. And so or theirs, really.
Speaker 4:And so with trading cards, this was a a modest sized company that was specializing in college sports. Obviously, NIL has changed the landscape of that. And this long tail of college athletes, a guy like Mendoza gets a card deal with us, and he doesn't just get his rookie card. His left tackle gets a card. So the guy protecting his ass, who may never get to play in the NFL, may never get a card.
Speaker 4:Mhmm. He's getting a card with on it. And, you know, I love the fact, we actually have just as many we have more women college athlete cards in the last year than every other card company combined. So there's a long tail there. University of Nebraska women's volleyball sells more cards than the men's football team.
Speaker 1:Woah. And
Speaker 4:so it's focused on a part of sports that I obviously love. I think college is obviously a huge and booming opportunity, and these companies all need software now. They all have an opportunity to
Speaker 2:And do any of the athletes turn it down?
Speaker 4:No. It's I mean, the the amazing thing is we're playing at a level where, like, these some of these guys are making so much money in NIL deals
Speaker 1:Yeah.
Speaker 4:That the kind of deal we're striking with them is
Speaker 2:not Like $1,015,000,000?
Speaker 4:No. Well, no. That's the amount that they're making all year. That's not what I'm paying them.
Speaker 7:Yeah.
Speaker 4:No. No. No. No. They they these card deals are still pretty small ball.
Speaker 1:Sure.
Speaker 4:And so relative to the deals they're getting from big brands. And what's dope is, you know, most of these guys are thinking big picture, And if they make a little less money doing it on deal, but every other guy on their team is getting a card Oh, sure. They're not mad. They're not mad. Sure.
Speaker 4:Yeah.
Speaker 1:Yeah.
Speaker 4:Yeah. The athletic directors love it because we're also working with the women athletes just as much as we are with the men. So Yeah. That's the focus. And and I'm but I'm inspired by so much of the motion and creativity happening here.
Speaker 1:Yeah.
Speaker 4:Even Jensen Wong's leather jacket going on sale, I think it's only the second one that's been auctioned. These are cultural moments, and I know we live in a weird little myopic tech world
Speaker 1:Mhmm.
Speaker 4:But like Yeah. Once it happens, I wanna bid on. Right?
Speaker 2:Have you bid yet? You know you know the the Jensen jacket is
Speaker 4:myself now.
Speaker 2:The you know the Jensen jacket's going to a good cause. It's our friend Justin Mares inflection grants. So all the money all the proceeds are gonna be given to to, you know, founders, no strings attached, no equity, love the game. How how much do you think the boom in live events is driven by social media and flexing like these are the, you know, very exclusive. Basically, you know, you can call them like one of 10,000 assets.
Speaker 2:Right? Or they're these like Yep. Ephemeral, you're buying a ticket but it's also, you know, the Yeah. There was a very viral post over the weekend.
Speaker 1:Is almost like the next bull case for live events and in fact Mhmm. The current boom is driven more just by people seeing cool events happening on social media and then also just feeling isolated. They're spending a lot of time on their phone. They're like, I got to get out of here. I got I should go to that live event.
Speaker 1:And everything else outside of the live event is free, so I'll spend more money on the live event because I can basically watch every music video ever created for free on YouTube, etcetera. And I I agree with you that the AI thing is is gonna be big, but it doesn't feel like the current driver.
Speaker 4:I look. I don't disagree, and I would I would also think of it as sort of just like that k shape happening in the economy. I think you're gonna see right. One of the things the the the Wimbledon ticket Yeah. Is gonna continue to be even more exclusive, even more scarce because there's just a finite amount of access to it.
Speaker 4:Right? But I also wouldn't discount growth on the other end, which is I think a bigger culture shift. In building Aflos, one of the things that's been really eye opening for me is we partner with run clubs in order to build our fan base. Now just because you run doesn't necessarily mean you're a fan of track and field, but it's very easy to get you to be one because these are the best in the world doing what you like doing for fun. The average soccer fan doesn't play soccer very often.
Speaker 4:Right? And so by learning about run clubs the last two years, not firsthand, but I've learned that it is a way for Gen Z to push back on the toxicity of online dating culture. It is a way to push back and almost break the sort of jaded narrative of, like, online life to actually, like, meet with people, decide if you wanna spend more time with them or not, again, platonically or romantically. And I think there's also a culture shift happening among gen z's in particular who have kinda lived through the dark parts of social and have just said fuck the algorithm. I think not all of them, but I'd say, like, a material majority and said, I crave IRL.
Speaker 4:And it doesn't cost a Wimbledon ticket to go join a run club, but it's an experience that is verifiably human, which is harder and harder on this dead Internet. And and it's a chance to get laid. It's a chance to meet someone who could be a lifelong friend. Like, there's I I think the that part of the barbell that gets me excited is that side of, like, the things we've done as a species way longer than this modern age of the last couple hundred years. And I think those food I mean, this is it's such a dumb thing, but, like, I I think if if we get the AI utopia we all want, right, this gets cheaper and easier and better to make, and it's healthier for you.
Speaker 4:It's more accessible to more people. Are There so many things that are still gonna be invaluable that will still give us, and I hope give us even more of a purpose to live, whether it's getting food together or going for a run together, shouting at a soccer game or screaming with our favorite singer, or laughing at a stand up comedian's jokes. Like, I actually I'm I'm very bullish on humanity for if this goes right
Speaker 2:Mhmm.
Speaker 4:Us actually having even more appreciation for the shit that, like, a world that our great great grandparents would actually really recognize as being like the sort of fundamental parts of humanity.
Speaker 1:Yeah.
Speaker 2:And I I How did you process given, you know, given your work with Athlos, how did you process the enhanced games? Oh. It felt like to to me to me it was like one of those ideas that that sounded so cool in theory. Mhmm. But then as I was watching it, I realized like how much of the Olympics is about the pain and the glory and the sacrifice and representing your country and like the every four years dynamic and just how different a gold and a silver are even though they're right next to each other on the podium.
Speaker 5:Mhmm.
Speaker 2:And so when I was watching it, it just felt like drinking a flat soda, you know, where it's like you got a little bit of the taste but it doesn't hit. And Yeah. Curious how you how you felt.
Speaker 4:Yeah. Look. I and I would not I I I am I know those guys. I am happy they did it in the sense that I do think those regulatory bodies, WADA and some of these others, are very, very antiquated with how they think about usage and testing. And even you you hear about athletes getting suspended for marijuana.
Speaker 4:Like like, things where it's like,
Speaker 1:is this really in the
Speaker 4:best interest of preserving the sport? Yeah. And I do think guys like Brian Johnson and others who are human guinea pigs for things that could benefit all of us, a great benefit to society. Right? Where this one rubbed me the wrong way or at least where I knew I wasn't gonna wanna be party to it was because I mean, the thing you nailed, obviously, having a wildly successful professional athlete for a wife who is also accused for so much of her career of some bullshit doping.
Speaker 4:Right? I the idea of a league that is leaning so heavily into everyone dopes is just anathema to what I really believe sport is about. But I'm still look. I still think like I said, I think it's a I I think it's important to move the narrative forward of, like, what actually should be approved and not. And I also think, hopefully, it gives people more of an appreciation, like you said, for the fact these athletes sacrifice.
Speaker 4:And probably, it's a similar narrative that we had when I found out how little money most Olympic athletes actually make. Like, before Aflos, the top prize for a track and field athlete was $30,000 in a season. They would win the championship that year, be the fastest man winning in their race, man only. It was $30.
Speaker 1:That's a win win. That's not a win. Trombone. Yeah. There you go.
Speaker 1:There is one.
Speaker 4:And and so we doubled it just because And
Speaker 1:now it's a chain. And then we've I think we
Speaker 4:have we have two point we have over 2,100,000 in prize money this year for two races Yeah. In New York and we're giving equity. Like like, these are all things, and I think the enhanced games prize money is also a helpful way to push that conversation forward of saying, hey. These Olympic athletes should actually they're worth more. Yeah.
Speaker 4:And, and so I think that's good for them. But, yeah, like I said, I couldn't I couldn't personally get behind it, for those reasons.
Speaker 5:I don't know.
Speaker 2:How are you last question since we're out of time. Mhmm. How are you processing just the explosion of sports betting as I was and and kind of how it's driving sports and live events and providing a lot of funding, but at the same time, I was watching, you know, watching the the McGregor fight, if you could call it that, on Saturday. And like, they don't even do betting exclusives anymore. It's every single ad is for a different sports book or prediction market.
Speaker 2:Mhmm. And and and so yeah, it's like I I've never had like the sports betting bug.
Speaker 7:Mhmm.
Speaker 2:I I've at points been like, gotta give this a good shot. Like, it seems like a lot of people really like doing this. I like it. I gave it a shot. I I
Speaker 1:watched you I watched you lose $200 and it was one of the most entertaining things that Yeah. So it
Speaker 2:was wildly entertaining. It was wildly entertaining for John. For me, I was like, that's it. Maybe
Speaker 1:He's down to his last 4¢. Let's see what he'll do now. Yeah. Will he make a play? Did get
Speaker 2:4¢ and then I was like, I'm gonna make it all back in one trade and that's a good man. A hell
Speaker 4:of a parlay. Like 20 different legs. Yeah. I I, look. I one of the things we've said around here is we wanna invest in things that we know can make, you know, generational size returns, but also be things we're proud to tell our kids about.
Speaker 4:And so I have again, I have no beef with betting or gambling.
Speaker 1:Yeah.
Speaker 4:I think I think in models where the house always wins, that does not stir my cocoa because now you're just you're just weaponizing sort of, slot machine tactics to bring someone back who probably shouldn't be investing that next dollar or gambling that next dollar. I think prediction markets are unique in that it is peer to peer, and I I feel less distaste around, hey. Someone made a better decision than you did today.
Speaker 1:Sure.
Speaker 4:Right? That feels more like any market. But I do think overall, the worst toxicity that I've seen on the Internet when I when I get and it's it's I mean, was jarring when I first started dating my wife. The worst toxicity that I would get was from psychopathic racists on the Internet, and it was tied to sports betting.
Speaker 1:Woah. Yeah.
Speaker 4:And and so it's and tennis is a unique sport where there's actually always been a lot of sports betting women's sport, where there's actually always been a lot of energy around it. And so even just anecdotally, it feels like athletes carry a disproportionate weight from it. And it might be easy to say, well, don't don't check social media. But like, you I mean, we all get our It's hard. We all get our hate.
Speaker 4:Yeah. But like, if you're an athlete, like, you're literally just trying to do your job every day in front of everyone. We don't have to our board meetings are not broadcast to the world. We don't you you already have to live every workday in front of every person on the planet. And if if a downside of a shadow of sports betting and its rampant growth is even more toxicity for the athletes, like, feels bad.
Speaker 4:And then there's the
Speaker 2:it was like Holland's teammate who, you know Yes. Had a clear had a clear should have passed it. But he's in the moment, you know. He's he's gonna be a hero. And and yeah, he had more you know, he just lost the World Cup, you know, not or not lost, but you know, lost in the in the quarters and he had like, you know, double the amount of comments as likes on on his last post.
Speaker 2:Yeah. Most of almost all of them saying like
Speaker 1:yeah. It's just very different when you're a fan, you're passionate about a team. Yes. You are upset about your favorite player Yeah. Or Yeah.
Speaker 1:But it's different when people have money on the line, they are more incentivized to go crazy online and and send the aggressive message, which is never fun.
Speaker 2:Never
Speaker 4:fun. And I and I and I also just think from a health standpoint of our society, right, we know young men are more likely right? We're risk takers biologically, and that's a great thing when it pushes us to go take an entrepreneurial risk. It is a less great thing when we invest our last 100 on a parlay that's never gonna pay off, and then it leads us into a cycle of addiction and problems. And so I I hope we can have a good conversation as a society about this.
Speaker 4:I know we're in a very, like, let's say, deregulatory time in America right now.
Speaker 1:Yeah.
Speaker 4:And I hope when that switches, I hope it doesn't lead to a hyperregulatory period.
Speaker 1:Yeah.
Speaker 4:But, like, I hope we can have a reasonable conversation because I also I the the part that worries me the most is we know we're gonna continue to see more growth and acceleration for folks who are connected and plugged in, that's gonna be a great thing. It's gonna give us lots of good stuff. If the folks who aren't feel even more disenfranchised and even more left out that there's this almost like, and you see parts of it flare up in crypto for sure. Right? You see this sort of dystopian world of people willing to do anything to make a buck.
Speaker 4:That that that from a societal standpoint makes me very, very, very uneasy. And and I I like, it's it's becoming more and more obvious how big a role betting is, in particular sports betting is. And I just feel like we haven't had the conversation, and I don't know if we have the folks equipped to have the right one.
Speaker 1:Yeah. It's starting. It's starting. There's Well,
Speaker 2:I think Saturday's I think Saturday's event could be somewhat of a turning point with the UFC because Mhmm. You know, there's some some potential there's an idea that maybe there was people that knew there was a major injury going into that and there was too much money on
Speaker 1:the line to I think we will have a national conversation about this. I'll I'll give you 10 to one odds that it happens this year by the end of the year.
Speaker 4:But you guys are good.
Speaker 1:I also I also heard an interesting stat that ninety nine percent of gamblers quit right before they hit it big. If that really goes national and people embrace the the the statistic, I mean, it's just math like, you know. Anyway.
Speaker 2:Had a we had a bad running shoe that this this interview would go over because we always love talking
Speaker 1:to you. I'm
Speaker 4:sorry it's been so long.
Speaker 1:Yeah. Yeah. Yeah. We'll do it again soon.
Speaker 2:Great to
Speaker 1:see you.
Speaker 4:And congratulations. Thank I congratulate you all on Twitter but
Speaker 1:congrats on
Speaker 4:the exit. I will still point out as soon as I saw you know. I know.
Speaker 1:I I need to apologize. I need to apologize. We're like, yeah, we're a bunch of we're bunch of podcast. Why would you want
Speaker 5:to invest in this?
Speaker 2:You you saw.
Speaker 1:I saw the potential.
Speaker 2:You saw it.
Speaker 4:Anyway, you guys deserve every bit of you.
Speaker 1:I appreciate Have a great rest of your day. We'll talk to you soon. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences and new value with Cisco.
Speaker 1:Our next guest is Morgan Housel. He's been on the show once, twice. I think this is third time. Fourth time? Maybe fourth time?
Speaker 2:I think fourth.
Speaker 1:Back
Speaker 2:more. We'll let we we got it back going now. Okay.
Speaker 7:Hey, guys. How are you?
Speaker 1:Yeah. We start with sports betting? Is it an epidemic? How do you think how how has the sports betting boom and the gambling boom and the hyperfinancialization worked its way into your thought process and your work generally?
Speaker 7:I have two takes on this. One that's been talked about by a lot of people is that this well known idea in psychology that if you think all of your options in life are bad, you become very risk seeking. Yeah. And so if you feel like you can go to go to college, get a degree, work hard, get promoted, buy a house, you'll do that. Mhmm.
Speaker 7:If you don't, you'll start trading zero day options. Mhmm. That that that makes sense. I believe that. I could also argue the other side, which is that if my generation, my parents' generation, our grandparents, if they had access to all of these things, they would have done the same thing.
Speaker 1:Oh, sure.
Speaker 7:They would have done like, it's not it's just because we have these tools now that we're using them.
Speaker 2:Yeah. It's such a classic When like the image of like a boomer in the Vegas like airport just, you know, hitting hitting the button over and over and over is like sort of like an iconic image in my mind and I think that's proof to what you're saying which is like, you know, if if everyone had a casino in their pocket for the last hundred years, then probably every generation would have been gambling at a pretty high rate.
Speaker 7:We're the same. I mean, for my generation, when we were teenagers, the the new thing was was day trading because before that, you had to call your stockbroker and pay him $200 to make a transaction. Now you had E*TRADE and Charles Schwab. You could do it for free or nothing. And so all of us, like when I was 17, we all started day trading.
Speaker 7:Every one of us did it. It wasn't about the economy. It was just the tools we had in front of us.
Speaker 1:How do you think about loss aversion in the in the in the gambling, in the in the world where you're doing these like crazy parlays? Because there's been all these studies that show that people have more negative feelings about losing money than the good feelings that come from making money. This general idea of loss aversion, if you lose $10 you're going to feel more pain than the joy that you would equivalently feel from gaining $10 so people are generally loss averse. And yet gambling seems like a formula for like endlessly triggering that loss aversion and yet we don't see that actually play out.
Speaker 7:And then you also have this other concept of house money where like if you do win, it doesn't it's not your money that you earned from your paycheck and you're much more likely to take higher risk from it from And you you see it with loss aversion in people's lifestyles as well. If you go from a Honda Civic to a BMW, it feels pretty good. If you are forced to go from the BMW back to the Civic, it's the worst feeling you could ever possibly imagine. Will Smith talked about this with Fain. He was like, becoming famous is amazing.
Speaker 7:Being famous is okay. Losing fame is the is the hardest pain you could ever experience.
Speaker 1:Woah.
Speaker 7:And so I think there there's a lot of things in life that are like that where you're taking risks, and particularly, like, when you know, as a matter of fact, that you're gonna have losses. That's just that's just coming with it. And if the losses are gonna feel 10 times worse than than your gains, it's gonna be it's gonna be tough. There's so many of, like, the best hedge fund managers, stock traders, the people who've actually done extraordinarily well over years and decades. Mhmm.
Speaker 7:And you look at their track record, and they might be right 55% of the time. Right. Maybe, like, 65% of the time if they're incredibly good at what they do. And so really what their their skill is is they became very comfortable and level headed losing money. That was how they made money over time was paying the cost of admission of just dealing with that volatility and loss.
Speaker 1:Yeah. I've I've been disappointed that a lot of the folks that I know that participate in gambling refuse to take my advice and invest in the gambling companies just buy the house. Yeah. Because some of the some of the gambling stocks you you know, you like the industry, hate the industry, but some of the gambling stocks have been very performant and it feels like it should be the solution and yet it doesn't have the same psychological impact of the quick wins that come from actually playing. Shifting gears a little bit, I wanted to ask you about the publishing industry, the non fiction industry.
Speaker 1:Tim Ferriss put out a blog post asking the question, has AI already killed how to non fiction? And he tells a story about his books and he says that on the 2026 run rate, he's down 57% on sales of books. And he sort of attributes that to some of his books being substitutable with LLMs, just the idea that if his chef, a four hour chef book was a bunch of recipes and you can get those directly. And I'm wondering about how you think the the publishing industry, the book landscape, there's also this piece in the Atlantic about people just not reading in all anymore. Yeah.
Speaker 1:What are you thinking about where we are right now in terms of the publishing industry and where we're going?
Speaker 2:The only thing on to The piece in
Speaker 7:the Atlantic. Sorry.
Speaker 2:Yeah. The only thing I was gonna say is like the the decline in sales like coincides with him just putting way less time into his podcast.
Speaker 1:Oh, sure. So he's maybe driving less sales?
Speaker 2:So so like you have to imagine him not fully pricing in just having one of the biggest podcasts in the world. Yeah. And And then just drive more. Slowly doing like, you know, more competition plus putting less emphasis Yeah. Into it.
Speaker 2:But What do you think?
Speaker 7:I think I think you're probably onto something there. I was gonna point out Mel Robbins whose book will sell eight zillion copies this year. That's that's non fiction self help. It's the exact same genre. Yeah.
Speaker 7:And she's blowing the doors off right now.
Speaker 2:Yeah.
Speaker 7:And so I think for every example that you put in what what's true is that the book industry as a whole, and particularly nonfiction, has not had a very good three or four years, a lot of which was because 2020, twenty one COVID lockdowns was just an explosive bonanza that everything by comparison to then is is is not that great. But I think there's a there's a thing too with with podcasts and long form writing in books where it's easy to say that people don't have attention spans these days. They want short form video, and that's they just want to flip through it, that's it. And it's like, no, the biggest podcast in the world are like three hour conversations that people listen to all the way through. Yeah.
Speaker 7:And so I think it's not that people don't have attention spans. They don't have a lot of tolerance for BS in the way that they used to. So I think thirty years ago, people would slog through a bad book because they had nothing else to do that day. Whereas now, if you start a book and it's bad, you're like, I got 20 other things competing for my attention over here. I'm going to go there.
Speaker 7:So if you're still putting out the kind of content that is engaging and interesting and saying something new, people will buy it, they'll listen to it, they'll put effort into it, they'll listen to it for hours, that's that's still there.
Speaker 2:Yeah. It's crazy how captured audiences were thirty years ago.
Speaker 1:Mhmm.
Speaker 2:It's like you or let's say like pre internet, but it's like if there's nothing on TV that you're excited about Mhmm. There's nothing on radio that you're excited about and you don't have a book physically in your home and it's like 8PM, like you're kind of like just choosing between options that you're not that excited about. Yeah. But then now it's, like, truly infinite possibility. No one Yeah.
Speaker 2:Feel like people are bored anymore. Right?
Speaker 7:Yeah. Yeah. And I think it's I think there's there's a lot of times when people what they think is impatience is actually just a newfound intolerance for BS in content. Think there's a lot of that.
Speaker 1:Interesting. Yeah. I was in a bookstore recently and the the the power law of publishing is fully on display because you walk in and the the Mel Robbins book, for example, will be shoved in your face with a massive display and tons of copies. And then if you're actually looking for a book, you have to find the section and it's much harder to dig through. They might not even be in stock.
Speaker 1:And I would I would have assumed that the Internet would sort of flatten that and lift the tail, but I guess there are power laws everywhere and so certain books go viral. What I'm interested in is this idea of like there are certain authors that publish a book every year and they sort of just base hit, base hit, base hit. And then there's another version of that playbook which is have one really defining book but then continue to franchise it, promote it, add on to just continue to drive sales. And I think that's what Jordy was alluding to a little bit about you have a podcast and you can drive sales to your existing catalog even if you're not publishing new books.
Speaker 7:Yeah. I think that power law exists even among the tippity top authors. Stephen King has written like 50 books, something like that. Yeah. And most of his sales and most of his fame came from like three.
Speaker 7:So even among and like, you you have people like Michael Lewis
Speaker 1:Yeah.
Speaker 7:Who's written, I don't know, I'm gonna guess like a dozen books, something like that. And I bet most of his income, sales, and fame came from two or three of them. Mhmm. And so some people have a better hit rate than others, but even among the best. Listened to an interview yesterday with Matt Damon.
Speaker 7:Same thing in movies. He's made dozens of movies most of us watching this have never heard of before. Yeah. And so that you see that you see that everywhere. I remember James Clear telling me several years ago, there's 4,000,000 books for sale on Amazon.
Speaker 7:Mhmm.
Speaker 5:And if
Speaker 7:you look at the top five, the top five of the 4,000,000, it's possible that number one is selling 10 times as many copies as number two.
Speaker 1:Yeah.
Speaker 7:So even it's like it's a 4,000,000 thing and even among the top, the the power law just gets crazy.
Speaker 1:Yeah. I think it's the same thing with podcasts. I think Rogan is like an order of magnitude bigger than everybody else Spotify. Jordy can't name a single Matt Damon movie. Born identity.
Speaker 1:There you go. Oh, yeah. That that is the series that you like. Matt Damon also famously passed on Avatar and he was like, you would have made so much money from that. But James Cameron said like, the movie, it's not a Matt Damon vehicle.
Speaker 1:It's a it's just a it's a movie that the idea exists regardless of
Speaker 2:there has there been a a book written on the power law, not the the venture book? The power law?
Speaker 1:The book
Speaker 2:on just like every single place at the power law? Because I'm wondering like Interesting. Is does power power law apply to marriages where like the best marriages are actually 10 times better than, you know
Speaker 7:I would assume I would assume it does. I think it's one of those big things that's going to influence everything in life. And it throws a lot of people off because it's like you can be extremely good at what you're doing. Like, if you are a really good college basketball player, you might be significantly like, there's the the difference between that I I what what was the story I'm thinking of? It was someone it was an NBA player that people were harassing because he he was having a really bad season.
Speaker 7:He went on a podcast and he was like, the difference between me and you is so much bigger than the difference between me and LeBron. It was like, once you get to that level, like the Oh. And so you see it everywhere.
Speaker 2:But couldn't you make the argument that no, the difference between you and LeBron actually I guess it's the difference still could be bigger, but it could be
Speaker 7:I mean, I I I don't when when I was a my my sport growing up, I was a ski racer, and if you were a really really good regional skier, you were not in the top 100 nationally, and you were not in the top thousand internationally. It just it got and I think it's that it's it's it's it's like that from those sports.
Speaker 1:Cow Are are you what you're thinking of is Algorithms to Live By, the computer science of human decisions by Brian Christian and Tom Griffiths. It takes well known computer algorithms and then applies them to everyday life. So a good example is the 37% rule for choosing. This is like known as the secretary problem. But when selecting amongst a fixed number of options, apartments, job candidates, even potential partners like marriages, spend the first 37% of your search observing without committing and then choose the next best option that is better than everything you've seen before and you will almost you'll be like mathematically optimal.
Speaker 1:And it takes all these different algorithms and applies them to everyday life. It's a fun book.
Speaker 2:In parenting, are are you do you spend any time thinking about or trying to identify where where your children might have might be 10 times better or the potential to be 10 times better at something than their than their peers. Because I look at it between between my children, even even looking at athletic abilities, I think it's already like completely noticeable who's like the better at least natural athlete and I believe that that will probably carry through throughout their whole life is my is my intuition. Not to here's my
Speaker 7:here. I not not for my kids. Let me tell you a story. When I so I I was a skier growing up, and from my generation, there were two skiers who became head and shoulders above everyone else. Lindsey Vonn and Ted Liggety.
Speaker 7:They both won Olympic gold medals. Everyone knows Lindsey Vonn now. When Lindsey Vonn was six years old, she was in a different universe of everyone else of of of talent. She was just it was so obvious from the time she was a small kid that she was just the best out of anyone. Ted Liggety was not that.
Speaker 7:He didn't hit his stride till he was, like, 18, which was so, so rare. And so I I always it's it's it's always interesting that, yes, there are some people from like from a very early age. Tiger Woods was on TV golfing when he was like two as as a talented golfer, and so there's that, but there's also these people that just don't hit it until late in life. Those are always interesting. A lot of entrepreneurs like that that don't really find their stride until
Speaker 2:the But with 30 year Ted, is it possible that he just didn't care enough until he was late in his teenage years and prior to that, like, was always that good but just never put the effort in or the time?
Speaker 7:I think this might boast me, but I think it's so fascinating. One of the things with Ted is that there are rules about the kind of ski gear that you can use for racing. Like, have to meet these these sizes and whatnot, and they changed the rules at one point so that your skis had to have a certain side cut. Ted was the first person in the world who figured out how to ski on the new skis, and he just completely dominated everyone else for several years after that before they kind of caught up. So there's there there there's some of that that was interesting.
Speaker 7:But I think for I think that's the rare one. I think to your point, the Lindsey Vonn story is more common when from a young age, they are just so preposterously better than everyone else.
Speaker 2:Yeah.
Speaker 1:I want your reaction to this chart that Joe Wiesenthal, a friend of the show shared, and we will have the team pull it up. It's the percentage of US household net worth over time. And for a long time, real estate was the dominant place where American households held their net worth. But for the first time, we are seeing that households are increasingly holding equities. Cash and cash equivalents peaked in the eighties and is sort of declining around 10 of household net worth, but equities have been completely up into the right.
Speaker 1:Maybe it's just a temporary dislocation in the stock market. The stock market is doing very, very well. Houses are more expensive, so households are preferencing that. But I'm interested in your take on what this says about US households, but also the psychology of what it means to hold a, you know, a larger percentage of your wealth in equities versus your house.
Speaker 7:Yeah. We always talk about, like, the stock market crash in 1929, and and I I think the the statistic was 5% of Americans owned stocks in 1929.
Speaker 1:That's right.
Speaker 7:So we had like, we we talk about it as, like, it started the Great Depression, but it was it was such a small number of people that actually got hit by that. Yeah. Whereas today, think the status 55% of Americans own stocks, the vast majority of them in their four zero one k.
Speaker 1:Yeah.
Speaker 7:Now and and part of that, like, if you're an investor for the long term, the odds that you're gonna experience a 30% decline or even a 50% decline are are almost a 100%. That's just how markets work over time. Yeah. And does the do does the general population of just, ordinary Americans who are not watching this and listening to finance podcasts and reading finance books, do they have the stomach for that, or do do they even know that that's the game that they signed up with for? I think by and large, the answer is no.
Speaker 7:And even if you do know it, knowing it and experience it in in real time can be completely different. The one thing is that, like, stocks have been over time. Nothing is promised in the future, but generating real growth above the rate like, well above the rate of inflation. Real estate is something completely different where, particularly if it's the house that you live in, not a rental that you have, I I I think we've done a lot of damage to Americans by convincing them that rising home prices are a good thing and they make them wealthier. And it is such flawed math because if you buy a house for $500 and then sell it for a million, how much money did you make?
Speaker 7:Yeah. Well, for most people, once they sell it, they have to buy another house that also inflated in value by two x over the last same period. So you didn't probably didn't make anything. And so I I think there's a lot of, like, it looks like wealth on paper with real estate, but it's just a place to live in, and you have to exchange it for another place to live in, and you didn't really make that much over time. So maybe if we're talking real wealth over time, it's a much better situation that we're that we're in now.
Speaker 1:Yeah. I am interested about I mean, I I know some people who bought in Mill Valley, like, years ago, decades ago just because that was a logical place to buy and it was a nice community. And, of course, the house prices are insanely high with the AI boom with San Francisco booming. But there isn't a logical like, oh, yeah, of course, they'll move to Florida at some point because that's not really what people do culturally. If you are in California, you sort of just retire in the town that you grew up in or live in Yeah.
Speaker 1:And raise your kids in.
Speaker 7:If you can do that, if you can sell in Mill Valley and move to Oklahoma, that's great. That's real wealth.
Speaker 1:Yeah.
Speaker 7:But if you sell in Mill Valley and buy in Mill Valley, you can make anything.
Speaker 1:You're not doing anything. What how do you how are you do you ever think about, like, the different prescriptions for solving the housing crisis? We're having Sagar and Jetty on the show tomorrow to talk about it, but I'm interested if there's if there's anything that you have that you've dug into, whether it's through the abundance or permitting or anything that stuck out to you as particularly exciting around the way America deals with housing broadly?
Speaker 7:I think I mean, it's simple, but it's but it's not easy. It would it would be around permitting and building more. There's obviously demand for more. There is the ability to build more. It's just that in the vast majority of cities, it's virtually illegal to build where people wanna live or at least extremely difficult.
Speaker 7:And it's one thing to say, you know, build more homes. It's another if you're a home developer in California and you wanna go build 200 homes, you're gonna be waiting in line for years and paying a fortune to actually build that if you can actually get it done.
Speaker 1:Yeah.
Speaker 7:And and so I think the idea that, you know, there's a great saying by Connor Senn, who's a great thinker, around these topics, he says, the future is a policy choice. And the reason that home building is so scarce and we don't have enough homes is because we've made a choice to be in that situation. There's no like, it's if you were left to its own devices, it would be solved not that, you know, in in due time. And we did this similar situation at the end of World War two when you had 16,000,000 soldiers come home. There were not nearly enough homes for them.
Speaker 7:Yeah. But at the time, it was much easier to build than it is today. And so you had things like Levittown that sprung out of the middle of nowhere, and they were building 25,000 homes in a year. And you solve the problem in due time. And so it's it's simple, but just politically much more difficult to say, like, yes.
Speaker 7:I think by and large, it's permitting. It's not a it's not an exciting answer, but we've made the choice make it difficult to build where people wanna live.
Speaker 1:Yeah. For for those who don't know, what what is the actual story of Levittown, and and can that be replicated today? I was I was in Irvine, and it feels like a very planned community. Of course, most of that town was built maybe a hundred years ago, but just driving around and seeing so many apartments and houses, it felt like this could be replicated, but I don't I'm not exactly sure how far it
Speaker 2:would be. Yeah.
Speaker 7:It was the end of World War II, and there were like I said, there were all these soldiers who needed homes and buying like, most of them a lot of them moved back in with their parents
Speaker 1:Sure.
Speaker 7:Which is not what you wanted to do coming home from war. Yeah. And the Leavitt brothers were homebuilders. They started buying up abandoned farms Oh. In New York and Pennsylvania.
Speaker 7:They basically took what Henry Ford figured out for cars, which is like, you have to make the manufacturing process, like, very step by step Yeah. And every person has a specific step that they do all day long. And they they made very small, very cheap, not high quality homes, but they could just bang out tens of thousands of them. Yeah. And and it it it between that and, like, the GI bill that helped finance a lot of those homes, I don't think it's an exaggeration to say.
Speaker 7:Like, it saved that generation who came home and had nothing, and within a couple years, allowed them to have a good dignified life going forward.
Speaker 1:Yeah. I've been surprised that we haven't seen more spreading out of basically, like, longer commutes or longer distance commutes because we're on the cusp of self driving cars. Even just a basic Tesla Model three has self driving that can make an hour long commute much more palatable. And then you also have telecommute and a lot of companies have like a work from home Friday policy or some flexibility around that. And I was expecting that there would be some alleviation from the pressure.
Speaker 1:Like when I look at the home prices in San Francisco and then I compare them to the the or the rental prices in San Francisco, $4,000 for a one bedroom, and then I look over in Oakland, I'm like, I I'm surprised that we're not seeing more flattening out. But I think that there's still a huge demand for being in the action in a particular area, in a particular town, and even in a neighborhood, and so there's been a lot of pressure on, like, the the highest value areas. I don't know.
Speaker 7:I'd say there's also been a big inflation of expectations over time, which is what you want in society. Want people to expect to expect a better life. Mhmm. But when you talk about Levittown, the houses that they were building back then that were so great for middle class Americans in the forties and fifties would not be considered a livable house today.
Speaker 1:Yeah.
Speaker 7:It was it was 800 square feet for your four or five kids who all shared one bedroom. You had one bathroom for the six of you. No garage, no deck, no air conditioning. Like, go on down the list. Most people would not consider that an acceptable place today.
Speaker 7:And, again, I whenever I point that out, I have to say, I wanna live in a world where people have higher expectations over time. That's progress. Yeah. But it's not comparable over the generations.
Speaker 2:Yeah. Jordy? I do too, but at the same time, when I moved to the city that we're in now, I had an extremely long commute and a terrible apartment and
Speaker 1:I had a real roommate
Speaker 2:at one point. I think it's
Speaker 1:just I think the same room as me.
Speaker 2:Well, I think it's I think it's like Yeah. The life that people want is immediately available on social media to them to view at all times Mhmm. There's I think like a decreased ability to delay gratification. Because I remember growing up, I'd travel to somewhere and I'd see like a really big yacht and I'd be like, wow, that's like, yeah, pre internet. You're like, oh, I've never, you know well, guess not pre internet, but like, you know, there wasn't like the first time I saw a yacht, I'd probably never seen like an Instagram video of some athlete doing a backflip off of it.
Speaker 2:I was just like, oh, that's a totally different like life.
Speaker 1:At the same time, like, I watched MTV Cribs and stuff. I don't know.
Speaker 7:Yes. I was just I was just gonna bring up MTV Cribs, which had such a profound cultural impact on my journey because that was the only view into how the other half lives. Yeah.
Speaker 1:But what
Speaker 7:and it was I I watched every episode of that show when I was younger. Wow. But what's but was but what was so important about it is that you did not consider those people peers.
Speaker 1:Sure.
Speaker 7:You're like, that's that's that's master p. Of course, his bathroom is made out of marble.
Speaker 2:Like,
Speaker 7:that's not a peer of mine.
Speaker 4:Sure.
Speaker 7:Whereas today, on social media, you see the yacht and you see the person and you're like, that guy, like, he he's supposed to be a peer. Like, I'm supposed to be there. Yeah. And so the fact that it was an obvious celebrity or an athlete and that, like, Shaq had a 12 foot bed, you didn't expect to have that yourself.
Speaker 2:My favorite my favorite example is, like, the GT three RS is, like, the most, if you ask like a 21 year old guy, what car do you want? If you just get any car right now, a lot of them would say GT three RS. And so that's my favorite example when talking about personal finance with, you know, people that I know in my life that are just starting their careers is I'd say, like, you know that car that you see and you just assume, like, if you work hard, you'll, be able to, you know, get a GT three RS because that's a car you wanna drive on the weekend? Well, you need to make if if you wanna buy that car, you basically need to make $850,000 in one year in California and be willing to spend the entire amount after taxes that you make just on that car and not have any other expenses for the year. So that is what that car that is the actual cost of that car, but it's just like put into their face all day long to the point where people just assume like, okay, like, if I work hard and I do a good job in life, I I should be able to get a GT three RS.
Speaker 2:And it's like Yeah. It's just so normalized.
Speaker 1:I just found one for I just found one for 50 k. It has this is not a salvage title. It it has six owners, Florida. It has aftermarket wheels, but it's doable.
Speaker 2:It's doable. Okay. You have
Speaker 7:you have to pull it
Speaker 2:out So if you make your six figs Yeah. And then you spend your entire salary after taxes.
Speaker 1:Only four accidents. Anyways, Mark Still runs.
Speaker 7:No. I was gonna say, I think I think tech has has done so much to expectations over time. I was in Tahoe this week with my family where I grew up, and we were driving past, and the biggest, most beautiful house in town, this mansion in town, it's so beautiful. And I told my wife, said, you know, the people who lived there when I lived here back in the nineties, that was an orthopedic surgeon. And we're like, there is no way an orthopedic surgeon could afford that house today.
Speaker 7:That house would be a tech CEO's house. But back then, orthopedic surgeon was the highest earner in town. There were there was there were no product managers at Google making $8.50 back then.
Speaker 1:Sure.
Speaker 7:And so it it created what we used to think of, like, jobs that every town has, dentists, doctors Yeah. Lawyers, those kind of things used to be number one. Now they're number 47 on the earners in town.
Speaker 2:Now you
Speaker 1:gotta do orthopedic surgery SaaS. If you're the founder of an orthopedic surgery SaaS product, then you get the house. It's the same thing. Exactly. Or dental SaaS or something like that.
Speaker 1:Yeah. No. It really has been like a crazy, crazy boom. It's driven up everything all over the place. Jordan, anything else?
Speaker 2:Do you ever plan to retire? I
Speaker 7:think it depends. I always think the purpose of financial independence is to get to choose your problems Mhmm. Because you're going to have problems either way. And I was talking about this with someone earlier, of people who sold their business. I don't know if you guys know two people who sold their business recently.
Speaker 7:I don't know. But the number of them who went on to regret it, and the reason is this apply to you guys is because they left their business and they realized on day one, like, that was their purpose.
Speaker 2:That was
Speaker 7:their purpose. And once they loft it, that was their identity. And they woke up the next morning with tons of money and no purpose.
Speaker 5:Mhmm.
Speaker 7:And I would say, if you think work is hard, try boredom. It's way harder. Mhmm. It is way more psychologically taxing than hard work. People want good problems in life.
Speaker 7:Yeah. And so retire no. I I'll I'm I'm doing I I work very differently now and do a different level of Yeah. Less work than I did five years ago, but I'm still doing things to keep myself busy because if I didn't, I would slip into boredom and then probably depression very quickly. So I guess to answer your question now.
Speaker 1:Yeah. Yeah. There's some formula. It's like how much you should invest in bonds is like your age minus one one hundred minus your age or something. It's like how much free time you should have should be like 100 minus your age.
Speaker 1:So when you're 20, you're working 80% of your waking hours. But when you're 50, you're taking half the time off or something. I don't know. There there there's some, like, you know, you wanna have some sort of balance. You probably can't go hundred hour weeks into your eighties unless, I don't know, maybe somebody will, but
Speaker 7:It's a big problem because in finance, we spend so much effort making sure people have enough money to retire Yeah. And focusing on that number. Yeah. And no time whatsoever asking the question, what are you going to do once you're retired?
Speaker 1:Sure.
Speaker 7:And for a lot of people, they retire, they got plenty of money, they saved their whole life.
Speaker 1:They don't know
Speaker 7:what to And then after two weeks of retirement, they wake up and like, who am I? I I don't even know what I am anymore. What's my identity? What's my purpose? And if they retire at 60, they might have another forty years to live.
Speaker 1:Yeah.
Speaker 7:Like an entire extra life to live doing nothing.
Speaker 1:Yeah. Long time. Nurburgring Track time. Sub seven minutes. Make it happen.
Speaker 2:That That'll be John.
Speaker 1:That is
Speaker 2:It'll be the it'll be the 80 year old on the on the track.
Speaker 1:He's shaving off milliseconds.
Speaker 2:Alright, grandpa.
Speaker 1:I don't think it's put you to bed. Think I'd have a disadvantage forever. I don't know. Maybe I
Speaker 7:I'm glad Let me let me flip that around to you guys. Young guys, successful, sold your business, do you think you'll ever retire?
Speaker 2:No. Absolutely not. I saw my my my late grandfather was sharp as a tack until about three months after he retired. And I think that I think that the daily habit of just putting putting in work, you know, using his mental capacities. Yeah.
Speaker 2:I would like to was contributing to his longevity. And to me to me, the you know, building companies is like an act of creation and there's nothing as as satisfying or enjoyable to me in this whole world than creating. Yeah. And so to me, it's like it's like Not going anywhere. You're asking an artist like, do you think you'll ever stop like, you know, making art?
Speaker 2:Yeah. Yeah. You might you might dial it back, you might do these different things, but No. I'm I'm so fascinated to I I I like I like to imagine, like, if I was 80 years old right now, living the same life, what what would I be choosing to work on? What what ideas?
Speaker 2:And I I think they'll be quite I think they'll be quite different than the things that are interesting to me now. Yeah. But I look forward to
Speaker 7:figuring would say, out like, there are some fields that I really admire when people quit while they're ahead. Whether it's like Seinfeld in 1998 shows On Top of the World and he's like, no, we're done. That's I've given it all to our team. We're out of here. But he didn't retire.
Speaker 7:He's still on tour today doing a million other things.
Speaker 1:Yeah.
Speaker 7:And so the ability to say, I could probably squeeze more juice out of this career, whatever that career might be, but I'm proud of what I've achieved and now I'm going to go do something else. It's not retirement, but I admire that versus you could easily imagine a history where Seinfeld went another ten seasons, it sucked, and it just kind of, like, died on the vine. Can easily imagine that history, which is kind of what the Simpsons have done over the last twenty years. Right? And so I I I really like when people quit while they're ahead.
Speaker 7:Think it's really admirable.
Speaker 2:Yeah. There's also something there's like a kind of business that can only be started by someone who doesn't need it to work, basically. And you see this with startups where, like, you know, an entrepreneur will have an exit and they'll start working on something and then they'll just be toiling in obscurity for years and and, you know, and and eventually they can build something valuable out of it. But a young entrepreneur wouldn't necessarily do that because they're like, have to I have to make the SaaS so that I can raise the next round, so I can, you know, do all these different things. And so, I also think it just changes when you when you have like if you can set yourself up to be able to take more risk, there's interesting businesses to be built.
Speaker 7:Yeah. I forget who said this years ago. May have been Mike Salana. I might be getting that wrong. But he said, like, the number of founders founders that he's met who sold their business, cashed out, and then they said, I'm gonna take two or three years off to just chill Mhmm.
Speaker 7:And ski with my family and hang out, and then I'm gonna come back. And they come back after three years, and I think the way he phrased it was, like, every one of them is so smooth brained at that point. Like, you just lost it. Like, you just atrophyed. They lost the edge of what you had.
Speaker 7:And so the idea too that it's a muscle that you got to keep going or else it's just going to wither away is important too.
Speaker 1:Yeah. Yeah. It seems like the there are there's, like, a different set of challenges that the post exit founders can take on that that that works. But if the if the business requires, like, having really, you know, like like, firm contact with, you know, a large swath of consumers and you haven't been to the store in four years because you now have a personal shopper, like, you might be out of touch there. But if you're solving some sort of problem on the, like, geopolitical level marshaling billions of capital and it's like that was an opportunity that was only open to you after you exited, then that becomes something that's you can accelerate into a little bit better.
Speaker 1:But it's Yeah. It's it's sometimes hard for people to go back into the garage if the if the startup idea requires those like garage years of like prototyping something at a very low level and like going zero to one on something that's so niche and so requires contact with like, you know, broad reality.
Speaker 2:What do you think the value of vacation vacations is? Because to me, like, I went I went like a I basically, you know, I'm 30 now, my twenties. I probably didn't take, you know, more than four days off, you know, at any point in my twenties. And I used to think like, wow, I'm stressed. I should like get away and like but ultimately, that would just try to create that would, in my experience, create more stress because I'm like the thing that is causing stress, I'm not addressing head on and and solving, but I'm curious in your life what you feel like, you know, what benefit you feel like you get from vacation because I don't think, like, stressed people going on vacation, like, solves stress.
Speaker 1:Mhmm.
Speaker 7:No. If anything, it's because if they actually detach on vacation, then they come back and they have 47,000 unread emails and just more problems piled up in there. My my
Speaker 2:is not necessarily even healthy to be like, I'm just gonna ignore the problems in my business or whatever for four days, and then it's like, you may as well just go on a bender or something like that, you know?
Speaker 7:Yeah. But I do think it's true is that for a lot of people, the reason that they actually go on vacation is because they have to travel somewhere else in order to justify detaching. If they just stayed home and detached, they would feel some sense of shame. But if they're like, oh, we're going to Maui, so now I'm gonna detach Mhmm. It gives them the excuse to do that.
Speaker 7:Because, like, is being in Maui actually that much better than being back at home? Like, it it there there are aspects of it, I think what you really enjoy is giving yourself permission to be someone else and to be on a different schedule that you could not bear if you were just staying back at home. Mhmm. My wife doesn't like traveling. She's totally she likes she likes being at home, and I think this is part of her philosophy.
Speaker 7:If, like, people don't actually like traveling, they just don't like being at home. And if you enjoy being at home, your desire to actually do it really diminishes. I travel a lot for work, so I don't have a a ton of desire to my my idea of a vacation is not not getting on a plane this week. Yeah. But I think I think it tends to be true.
Speaker 7:I I've used this example before of, like, if I'm building sandcastles with my kid on the beach in Maui, and that's a 10 out of 10, being at home playing Legos on the living room floor is at least a nine. Yeah. But what I actually enjoy is is time with them. It's not flying for seven hours and spending $10 on the trip. It's spending uninterrupted time with the family.
Speaker 7:But back to the original point, think you have some people have to vacation in order to have uninterrupted time with their family. It's impossible any other way.
Speaker 2:Yeah. Yeah. When after kids, the idea of like a seven day trip to Hawaii. I'm like, so you want me to go through two days of just like pure chaos Mhmm. And suffering for everyone in the family where the kids are uncomfortable because they're going to the airport and they're in the airport and they're on a plane and they're waiting around and then and then it's like sort of you bookend the experience.
Speaker 2:And so you're like, you come out of it not necessarily like to me, I because I don't come out of trips feeling like
Speaker 1:Just take a boat. Turn it into a three month trip.
Speaker 2:There you go.
Speaker 1:It's probably better. Boats
Speaker 7:are wife absolutely my wife has this thing too where she says the best part of every trip is coming home. I think when we do go on vacation, it gives her a newfound appreciation for home. After you've been in a tiny hotel room and then you come home, your kitchen feels like it's the biggest thing in the world. The bathroom feels like it's the biggest thing in the world, and you appreciate what you already have more. We were joking last night, not seriously, but we're like, we should intentionally take worse and worse vacations.
Speaker 7:We should appreciate home that much more.
Speaker 2:Wait. We we have a we have a buddy who at least historically would take a would like get a round trip flight over the course of a day if he needed to work on something. So he would he would like just fly to some random basically book like a $200 round trip ticket
Speaker 1:Lock in.
Speaker 2:And just to get like something done that they were avoiding. Wow.
Speaker 1:That makes that seems like there's much easier ways to do that. Drink a coffee or something. Anyway, thank you so much coming on the show, Morgan. Great catching up. Yeah.
Speaker 1:Great to see you. Have a great summer. Have a wonderful summer.
Speaker 2:Take care.
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Speaker 1:The Germinator's back in the UltraDome getting us up to speed on what's happening in the thermonuclear war between Apple and OpenAI. And so he is here. Let's bring in Mark Gurman, the Gurmanator himself, to take us through his excellent reporting. As always, congratulations on the scoop. Take us through it.
Speaker 1:Friday, what was your day like? What happened? What's the headline?
Speaker 5:Friday was great, you know, end of the work week. But for me, there's really no end. It's Monday, Tuesday, it's Seven the whole days, twenty fourseven. Apple suing OpenAI. I didn't find it to be that big of a shock.
Speaker 5:I think things have been brewing for several months. This was a two year relationship that went south pretty much in the first year. Okay. I think it was doomed from the beginning. We can get into that.
Speaker 4:Yeah.
Speaker 5:But OpenAI had been pillaging Apple's hardware engineering ranks, cloud department, many other aspects of the company for over a year. 400 people hired by OpenAI, and people move between companies all the time. Yeah. But one company hiring 400 people from another company in Yeah. Such a short period of It's absolutely insane.
Speaker 2:And Apple and Apple even with all the the competition we talked about it from like Amazon and Microsoft and Meta has never gone through this kind of they've never been pillaged in this Yeah. It's not like it's not
Speaker 1:like Bezos got 400 people from Apple working on the Fire Phone.
Speaker 2:Everyone I've I've seen a million decks where we're like, we got this guy who worked on iOS at Apple and it's like says
Speaker 5:they worked on iOS at Apple.
Speaker 1:It's good
Speaker 5:for the resume. Yeah. Whether it's true or not, you know, every company likes to say, oh, we got this big wig from Apple, and then Yeah. You you ask people at Apple about this person, they're like, I've never heard of this guy. He didn't even work here.
Speaker 5:But that that that's besides the point. The the real story here is that Apple had known for a while now that there was probably some shady stuff going on when you have that many people. I mean the person running the hardware organization at OpenAI, a guy named Tang Tan, he was heavily respected when he was at Apple, but you know, once he left Apple it was wartime. This was a person who had been running the iPhone design team for many years, paired with Johnny Ive, who was the designer, you know, alongside Steve Jobs for decades. Ive's successor, Evan Tanke, who ran the ID studio, the industrial design studio for three years after Ive left, they set out to build the product to take down the iPhone.
Speaker 5:You know, you can ask yourself, is that even possible? But on the other hand, the fact that these people, you know, worked for Apple for so long and they wanted to create sort of the antidote to Apple, it's a scary thing for Apple. And that coincided with Apple facing its own AI struggles. Right now, their hardware engineering organization is going through the biggest transformation in decades with John Turnis stepping up to become CEO, and Johnny Srouji, the chips guy, now becoming in charge of hardware engineering himself. You know, he's a visionary when it comes to management and silicon, but the big question, is he a visionary when it comes to products?
Speaker 5:Obviously, Chernis will help with that as well. So there's some big questions at Apple right now. Obviously, it's been a very long time since they had a big new hit. The Vision Pro was a complete flop. And so this company combining the best AI, right, OpenAI, using some of Apple's best engineering talent, plus three ninety of their best friends from Apple.
Speaker 5:It's a scary sight for Apple.
Speaker 1:Yeah.
Speaker 5:You know, they maintain that this lawsuit was not about slowing down OpenAI. It's because they were able to findthey're not calling this, but I can't think of a better term. They knew some shady stuff was going on, and they found a smoking gun, right? Smoking gun was this young iPhone engineer who went from Apple to OpenAI at the beginning of this year, and it's a crazy story. He kept a MacBook, he had this relationship.
Speaker 5:They're not saying if it was like a romantic relationship or whatnot, but I have to imagine that probably had a component He was working with this girl who was still at Apple who eventually went over to OpenAI, and he had found some flaw in their cloud network and was working with her to get stuff even though he was still working at OpenAI. So, you know, you can make a Netflix special out of this, or you can make an Apple TV special out of this, but they'll never go for that.
Speaker 1:Maybe it'll be on Amazon A
Speaker 5:lot of interesting stuff. Yeah. And then they kept digging. They found a bunch of stuff lawsuit around this guy who worked at Apple for twenty five years. Everything that I'm told about Tang Tan is obviously a brilliant guy.
Speaker 5:He flew very close to the sun is what a few people told me. I'm not going to say he did shady things, but he did what he needed to do to help make the iPhone the most successful consumer gadget and its well designed piece of machinery, know, most successful consumer product ever, one could argue. So they knew some of his tactics. He helped build
Speaker 2:So you're saying there was an awareness at Apple that he was basically like always playing to win very aggressively Yes. Mhmm. Like potentially blurring some some lines.
Speaker 5:Yes. Yes. So they knew their players.
Speaker 1:Got it.
Speaker 7:And so
Speaker 5:they knew this guy was going to do anything to get things done, but they weren't able to sue them until they found this kid. Mhmm. One thing I'll say, and it's kind of unfortunate, there's two people at OpenAI on LinkedIn with the same name. There's the guy who's named in the lawsuit, and there's another dude at OpenAI with the same name, and maybe he works for TBPN.
Speaker 7:No, I'm just joking.
Speaker 5:And I see a bunch of people posting on LinkedIn or on Twitter or whatnot a screenshot, and I'm like, You've got the wrong dude. And so you know whenever there's
Speaker 2:a That's interesting.
Speaker 5:Yeah. Whenever there's like a big tragedy or whatever, everyone goes out to try to find the guy's name, and everyone posts the wrong Facebook account. So this guy is getting blamed for getting blamed for it, has nothing to do with him.
Speaker 1:Yes. There there's also an an actor with the name Chang Liu and he has some very iconic photos on the Internet because he's like a basically a male model.
Speaker 5:Oh, that's funny. I think I saw that.
Speaker 1:Yeah. Yeah. Yeah. It's Fang Liu. He looks he looks like yeah.
Speaker 1:Just like a a model straight out of the runway. What does the timeline for this case look like? I was digging into XAI's lawsuit against OpenAI filed about a year ago. Just was dismissed, I guess, a month ago.
Speaker 2:Is that about App Store ranking?
Speaker 1:No. No. No. So XA SpaceX currently has an ongoing lawsuit with Apple about the App Store ranking. That has not been decided.
Speaker 1:But separately, XAI sued OpenAI for poaching employees and potentially getting those employees to share secrets of how Grok is trained. That's the allegation. And that case was just dismissed last month on the fifteenth. But it took a year to get there. And I'm wondering because we have that as an example, we also have the Samsung Apple battle that took eight years and ultimately ended in a settlement.
Speaker 1:And I'm just wondering about how you're feeling about the pace of things. There was sort of a quick back and forth on X, some comments from OpenAI leaders. But how will this story actually evolve and play out?
Speaker 5:It all depends. I mean, OpenAI is going to fight Apple like hell. Yeah. They'll have a law firm involved. Mhmm.
Speaker 5:In fact, you know, OpenAI hired
Speaker 4:a
Speaker 1:law They want
Speaker 2:to use chat, Kodak's bearish, you know, new models. Yeah.
Speaker 5:They hired they they they actually hired a law firm a couple months ago
Speaker 1:Okay.
Speaker 5:And they were gonna sue Apple over the relationship when it came to the Apple Intelligence Siri deal. So they've got lawyers looking into this and working on this. I wonder so Apple's saying that they reached out to OpenAI in February about their concerns over trade secrets and whatnot. I wonder if OpenAI started preparing its lawsuit against Apple as part of a down the line countersuit type of situation, or as in response to Apple's letter to every neither here nor there. I think this could take several months to years.
Speaker 5:Really depends. The discovery process is going to take a while. But if I'm going to be really honest with you, I don't think the courtroom timeline really matters. I mean, it matters to some extent, but the bigger picture already happened. If you're an Apple employee, and you're thinking about joining OpenAI right now
Speaker 1:Sure.
Speaker 5:First of you're going keep your mouth shut. You're not going to tell anyone. Yeah. Right? They're going to walk you out.
Speaker 1:Yeah.
Speaker 5:It is not a good thing to be someone on Apple right now who's thinking about joining OpenAI.
Speaker 1:Sure. Sure.
Speaker 5:Sure. You're gonna have Apple security all over you. Your manager's gonna despise you.
Speaker 1:And everything you do. They're gonna be Yeah. Watching every website you went to on your Yeah. Computer for the last month. So you got to know that you're going to be really clean if you're thinking about that.
Speaker 1:Yeah.
Speaker 5:Yeah. So if you're thinking about going to OpenAI and you're at Apple, the way Apple wrote this lawsuit, you have to be out of your mind to not think twice about it. And I think that Apple needed to stop the bleeding to OpenAI, and this lawsuit is certainly going to help with that. The other thing is, is you're going to have Tang Tan, all those guys caught up in depositions and discovery, and meetings with lawyers now. It's like, how are you supposed to launch a product?
Speaker 5:How are you supposed to do your job if you're stuck in the office all day with lawyers? Sure, sure. Everything's going to need to be cleaned up. They're going need to work in a clean room like environment now. They're going to investigate what kind of Apple IP is in there.
Speaker 5:And even if OpenAI did nothing wrong, all of the work that's going to need to be done to prove that, is just going to be a big waste of time for everyone. By just filing the lawsuit, Apple accomplished quite a bit.
Speaker 2:Yeah. So how do you think a company like Apple who notoriously is, you know, very protective about internal secrets, process, supplier, you know, all these different things, is in the middle of of getting, you know, you know, the craziest talent raid in consumer electronics history and then just like has someone go out the door and and they're not even, you know, we were reading Ben Thompson's piece earlier just and he was kind of mocking Apple's security and and as I was reading the complaint, I was thinking back to the deal sort of rippling drama that happened last year and how Yeah. The guy was kind of set up in in some way. And and I was thinking like
Speaker 1:2.5.
Speaker 2:Is Apple Apple savvy enough to to like try to create a smoking gun by being like, yeah, let's not let's just let it yeah.
Speaker 1:This is full tinfoil. Yeah.
Speaker 5:You think Apple just made this whole thing up?
Speaker 2:No. No. I'm not saying
Speaker 1:that I'm
Speaker 2:not saying I'm not saying that at all. I'm just saying like, it would be crazy to me if you get you're getting people post and you're not like, oh, yeah. We should make sure all the
Speaker 1:Oh, you're leaving the company? Sure.
Speaker 2:Yeah. Just keep your laptop kind of thing. Oh, yeah.
Speaker 1:Yeah. That'd wild wild twist. Well, mean, I I'm sure more information will come out and
Speaker 5:The discovery process is going to be very exciting, very interesting.
Speaker 1:Totally.
Speaker 5:I think Apple has a very high burden of proof here from a legal standpoint. I'm not a lawyer, but being able to prove that its IP is within certain products is going to be it's to be difficult to prove. Yeah. So we'll see if we're able
Speaker 1:to do it. Also the narrowing of, like, what is a trade secret because, like, it's been this, like, awkward reality in the AI race that when a AI researcher leaves for another lab, they basically take the architecture that isn't necessarily patented in this sort of a trade secret. Like, they take that with them and they just say, oh, yeah. Like, we should probably train a model of this size or we should probably include some of this training data. And that's why we've seen the frontier.
Speaker 1:But that's very different from hardware stuff with patents and
Speaker 6:Right.
Speaker 5:I would like to know what trade secrets or what Apple will be able to claim as a trade secret
Speaker 1:Yep.
Speaker 5:Ends up in these products. Because as you know, and everyone listening to this knows, hardware is incredibly commoditized. There are hundreds of companies that make electronics in the same space as Apple all over the world. And being able to prove that you're using Apple technology to release your phone, and build your phone, and develop your phone, that's going to be very difficult. I don't see this being a clean victory for Apple if it goes to a jury trial.
Speaker 5:They don't My guess is they're not going to have Remember the Samsung trial? This is what Samsung phones looked like before the iPhone. This is what the iPhone looked like. Yep. This is what Samsung phones looked like, right?
Speaker 5:They broke it down so a third grader would understand it. It was very easy to follow. Short of that, I just don't see how Apple could win a jury case here. And if you read the complaint, over and over again, acknowledges that they don't really know what is really happening here. They know enough to know there's something shady going on, and we need discovery to figure out what is going on.
Speaker 5:So they'll do that, but I'd be very surprised if they find something. The other part of this is there's a few things that you can really make a trade secret case on right now. That's silicon, And Apple has very proprietary silicon code, the way they develop chips and design chips, and they went after this company called Rebos that Meta ended up buying, and they got major changes made to how Rebos operates. The other one you mentioned is AI. You know, there's no AI thing that OpenAI is stealing from Apple.
Speaker 5:And from the chip side, everything we know is that OpenAI is using Qualcomm and third party chip providers. So I'm very curious to see what Apple ends up finding. Interesting. I'm sure they'll find some good text messages and emails, though.
Speaker 1:Yeah. Can you take us back in time to, Johnny Ive's departure, the birth of IO, how that was perceived within Apple? Because it feels like when the acquisition happened, was 55 employees at IO at the time. A lot of them ex Apple. And Ben Thompson pointed out that he said, I think Apple feels betrayed not just by Tan, but also Johnny Ive.
Speaker 1:Start with the fact that Ive framed his partnership with OpenAI as an attempt to undo the harms he thought were caused by the smartphone, not exactly a ringing endorsement. So you see these, you know, people leave and then they're like, oh, like, you know, we need we need an antidote to the social media thing. This is a common a common thread that that people pull on in their second act of their career. But what was the IO journey? Was it pretty smooth when that happened?
Speaker 1:Was this something like, if if you play out a different scenario and IO is just consulting for, you know, a Samsung and Ferrari. Know, Ferrari and a bunch of other, you know, companies that are not, like, directly at each other's throats, new hyperscalers, a disruptive AI take off, all of that. How what how does the story look then?
Speaker 5:So the story well, let's I'm not going to get into the Johnny I stuff right now, but
Speaker 2:Sure.
Speaker 5:You know, Tang Tan, he tells John Turnis. By the way, the other side of this thing is him and Turnis hate each other. Mhmm. Happy to go into that. Mhmm.
Speaker 5:But Turnis, you know, he was up for the SVP of hardware job in 2020. Tang Tan and a lot of the people at Apple who now are at IO and at OpenAI, they wanted Tang to be the new head of hardware engineering because they enjoyed working with him on the product design side of things, and the ID studio and product design worked very closely together. Tang had run the iPhone side of things. Ternis for a number of years was running the iPad and the Mac side of things. He had felt that a lot of the core technologies that Tang was working on, you know, they got iPhone priority, and he didn't really want to share that with the iPad and the Mac team.
Speaker 5:You know, now Ternist and Cook are sort of getting the last laugh, sort of, you know, giving Tang that reputation that he's not going to ever be able to draw of being someone who's sort of, they didn't say the words, but a ringleader around this. So what happened. He tells Apple at the end of twenty three he's leaving. Ternus lets him stick around through February '24 because Tang's role at Apple was so big. He had his tentacles in so many different things.
Speaker 5:They actually had to replace him by splitting up his responsibilities, if I remember correctly, across five or six or seven different people. Wow. So it took a lot of time to unwind. He behind the scenes was already working with Johnny Ive and Sam Altman and some of these other folks on creating this company. I think the origin story of IO was they knew all along that they were going to get acquired by OpenAI.
Speaker 5:The other part, and this sort of got buried when OpenAI acquired IO, But like OpenAI already owned 25% of IO, if I remember correctly, for a year or maybe more before the acquisition of OpenAI buying IO was announced. So that's pretty interesting. That's very interesting. Neither here nor there, IO, they're building some of the best talent who's ever worked at Apple. Combining the best talent that's ever worked at Apple with the AI acumen of OpenAI as a scary sight, I would say.
Speaker 1:Mhmm. Oh, no. They're gonna have to pivot to a VR headset. My dream. I just want another VR headset.
Speaker 1:That's all I want. Yeah. Me and me only. I'm the only one that's gonna get it. It's it's rough.
Speaker 1:What else is what else is new in in Apple world? What else are you covering outside of this?
Speaker 5:Lots of stuff lots of stuff to come. Yeah. Apple's gonna start its biggest new product period in its history
Speaker 1:Yeah.
Speaker 5:This fall.
Speaker 1:And and at higher prices. Right? Like, the the the memory shortage is very real. It was sort of like a delayed announcement post WWDC. But, you know, the the the the strategy there was like rip the band aid off after WWDC, but with enough time for everyone to absorb the news before the products are launched.
Speaker 1:Is that generally the theory there?
Speaker 5:Well, you know, they hit the point where they couldn't impact their margins anymore. Obviously, they're reporting earnings at the end of this month, so they'll talk more about that. Yeah. But the big picture here is the iPhone is going to get its price hike in September. Yeah.
Speaker 5:Everything I'm told is that the cost to build because of the memory makes these phones $150 to $200 more expensive a unit.
Speaker 2:Yeah.
Speaker 5:So I think they're going to raise the prices by 150 to $200. Yeah. They don't want to get up that margin. I mean, fact that nobody's buying the Vision Pro and Apple hyped the price up by $200 anyways because of the memory tells you everything you need to know. This is not a company that's going to compromise on its margins.
Speaker 1:Sure. Is there any world where vertical integration around memory is on the table? Like, is going deeper there locked? Even like the Southwest bought all those, like, futures on oil and had cheap gas and cheap flights for a long time. Like, you know, even if you're not AGI filled and you don't build the foundation model, there's still a world where you go lock up really long memory contracts and keep your prices down.
Speaker 5:I don't see it happening. Mhmm.
Speaker 1:Just not culturally the value?
Speaker 5:I don't yeah. I don't see it happening. How is I think they're trying to get the suppliers to expand.
Speaker 2:Sure. Yeah. How has Apple's relationship with TSMC evolved or changed across the AI boom? Mhmm.
Speaker 5:Oh. Well, I think the long and the short of it is that, you know, Apple is still the preferred customer of TSMC
Speaker 7:Mhmm.
Speaker 5:But there are plenty of other customers now that are a big piece of the pie. And so I think the relationship still remains very strong. But I don't think this is exclusively because of the AI boom. And you can see Apple looking at secondary potential third suppliers on silicon. So you've seen that with Intel.
Speaker 5:They've talked to Samsung as well. But the TSMC relationship, from everything I understand, is still as strong as ever. It's just Apple's not the only game in town as a customer at this point.
Speaker 4:Mhmm.
Speaker 1:Well, thank you so much for taking the time to come break it down for us. We appreciate you
Speaker 5:You got it.
Speaker 2:Hopping on. Thank you. Congrats again on on a major scoop on a major scoop. How much how much time did did you were you able to were you able to, like, prewrite your article before the actual complaint was live? Or did you did it go live and then you wrote it?
Speaker 5:Did I write my article before the complaint was live?
Speaker 2:Like, did you know it was
Speaker 5:a Good bad question. I'll I'll tell you next time.
Speaker 1:Thank you so much See for coming on the Mark. See guys.
Speaker 5:See you soon.
Speaker 1:Let me tell you about Public. Whether you're long short long Apple, short Apple, Public has investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. Let me also tell you about Shopify. Shopify is the commerce platform that grows with your with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.
Speaker 1:Yes. Yeah.
Speaker 2:I can see why he wouldn't actually wanna answer that question
Speaker 1:Of course not.
Speaker 2:After I set
Speaker 1:it up. He knows everything. Nothing happens in Cupertino without Mark Gurman knowing first. There's an interesting AI threshold that was broken over the weekend. I didn't know that I wanted goalpost in this particular area, but I like this.
Speaker 1:So Ethan Moloch shared this. He says, this was one of those impressive AI thresholds for me. I gave GPT 5.6 Soul in Codex control over my computer and asked it to win the daily challenge for the game Slay the Spire two randomized factors so it can't cheat. You can't just look up the answer. And he said it worked for five hours making complex game choices and won.
Speaker 1:And I've been a huge fan of Slay the Spire. I really enjoy this game. I don't know that I didn't know that there was a sequel. I guess there's a sequel out already. But it is sort of a it's a slow paced game.
Speaker 1:It's turn based. So you can take as long as you want to make every decision. And so it's not real time, so it's somewhat suitable for this. But it makes me very, very clear that these are great benchmarks for computer use because you can RL on certain Pokemon benches that the data will flow in once it becomes a big trend. But if you can just fire up some random game that you find personally interesting and watch a coding agent sort of win that game just through computer use, that's gonna be a very visceral feel the AGI moment for a lot of people.
Speaker 1:What do
Speaker 3:you think? Mean, yeah. I think the current coding models are are not good at this because they're like a little bit too slow. Yeah. But if you remember, standard intelligence had that computer agent model where it was like playing games in the browser.
Speaker 3:Yeah. So I that's like a very different architecture from like what, you know, Codex is using right now
Speaker 1:or whatever, Cloud Code. But Yeah. I think it
Speaker 3:should be very possible.
Speaker 1:So, yeah. Mean, there's been a lot of advancements in AI that can win games, but it needs a very specific harness. Like, it always needs to have some sort of like the output is basically JSON or something and that's translated into actions in the game. What's so cool about this demo is that there is no harness. It's just moving the mouse and clicking the buttons and it learns all of that on the fly, I think is really cool, which means that we need to move the goalpost one more time because we are coining and we are creating Rustbench, which is not the programming language Rust.
Speaker 1:That's right. It is the level in Call of Modern Warfare two. Right? You need to be able to beat Jordy on Rust if you're building a coding agent. Wait.
Speaker 1:That's oh, it's
Speaker 3:Is that COD four?
Speaker 1:Oh, is it called
Speaker 2:m w two. Wait. Which one is it? We play Modern Warfarers.
Speaker 1:We play COD and we play Rust. Rust. And you and
Speaker 2:And the fact that you guys can't even get it straight
Speaker 1:We are going to set up Taking it seriously. Codex on Rust and we are going to one v one it and hopefully and hopefully defeat it for a very long time because humans must stay in control. But I have a feeling that the AI will win eventually. But it might take the Cerebrus chips. It's going to have to think pretty quickly, think on its feet because five hours to win Slay the Spire, I think it it takes a normal person like maybe thirty minutes, forty five minutes to win one of those challenges.
Speaker 1:We're getting called not real gamers. It's really rough right now. We're getting absolutely destroyed.
Speaker 2:Damn. Young John would be just so disappointed. It's been
Speaker 1:a while. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents and playing video games now. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. And we have our next guest with us in the team.
Speaker 1:Big. This is And relates to what we were talking about earlier.
Speaker 2:What's going on, guys?
Speaker 1:How you guys doing?
Speaker 8:Yo. Thank you guys for having us. And congrats. On the acquisition.
Speaker 1:Thank
Speaker 8:you. I'm seeing Codex ads, Cerebras ads. Yeah. Yeah.
Speaker 2:You. Great to see you. And Michael, we are honored to have you on the show. So Yes. Nico Don't
Speaker 5:be here.
Speaker 2:Why don't we we've been dreaming actually dreaming about the like dreaming about this moment. We've talked we've we've John and I have talked on and off air about wanting to get Yes. The greatest Excel jockeys on the show. Yeah. We finally did it courtesy of Nico.
Speaker 1:So maybe quick introductions.
Speaker 2:Yes. Nico Set the scene for us. Why are we talking why are the three of us talking with the Excel world champion?
Speaker 1:Yes.
Speaker 8:For sure, for sure. Yeah, guys. I'm Nico. We chatted about a year ago when we launched the first like superhuman Excel agent. We launched Shortcut, caused like a big storm Yeah.
Speaker 8:And we've been like heads down in spreadsheet hell for like a year trying to build an agent that was really really freaking good. Yeah. A whole combination of things happened that I felt like we did pass this threshold where maybe it's at the level of a Michael Jarman or Demerle, and I'll let Michael introduce himself. But I flew down to San Diego last week, nervous as hell, calendared a studio, we rented it out, and competed live on four official championship models, me versus Michael. And of course, I had shortcut, but Michael had his, you know, big brain.
Speaker 2:There you go. When did you first name do you remember your first Excel session?
Speaker 6:That's a great question. I think it would have been when I was about seven or eight. I think for some reason, I decided I want to wanted to put the 2,002 World Cup in Excel. I mean, somebody else had already done this because somebody else was running the tournament, but I decided that seven year old me could do it instead. That's my earliest memory with Excel.
Speaker 6:But, yeah, since then, sort of built a career doing various things in Excel, and it's now a competitive esport for reasons that I still don't really understand. But it's it's fantastic. There's a great community around it. It's surprisingly watchable. And, yeah, I won that competition in 2024.
Speaker 6:There's a financial modeling sort of World Cup that is sort of a little quieter. I won that last year, which is why Nico decided that I should represent humanity and see if we can all keep our jobs.
Speaker 1:What what is the shape of of the challenges in an esports competition around Excel? How much randomness is in there? I mean, I've seen I've seen the the the screen recordings where you have to change the color of a bunch of cells, reshuffle sort things, write formulas. But how much do you know going in? How defined is like the scope of problem that they're going to give you?
Speaker 6:Yeah. I know the videos you're talking about. It's it's some dude who like speed runs like doing all that. That's not what we do.
Speaker 1:Okay.
Speaker 6:That I do not have the dexterity for that at
Speaker 1:all. Interesting.
Speaker 6:So what we do is it's more sort of problem solving in Excel, a bit like a hack essentially. So, you know, you'd be modeling some sort of board game or, you know, navigating around a map. The the year I won, you sort of had 20 characters in mod of Warcraft because they were sponsoring it that year. Yeah. And you sort of had to try and track them leveling up and doing quests and whatnot.
Speaker 6:It can be very, very random, like, what comes up, like, or not it's your sort of question or someone else's. Like, there's a vast array of things that people can do using spreadsheets. So, yeah, the question makers do make a good effort of trying to make a variety of topics people to answer questions.
Speaker 1:And then on the actual grading, how much is qualitative versus like once the solution has been found, the buzzer buzzes and it's deterministic every single time, like pure math versus there's oh, you know, you got a nine out of 10 from this judge because there's some style points in there.
Speaker 6:No. There's no marks for the style at all, which I think is for the best. Yeah. I think if people had to spend times making things look pretty, I don't think it would be nearly as entertaining. It's entirely deterministic like somebody else has already calculated what the answers are.
Speaker 1:Got
Speaker 6:it. And then as you're copying them in, they either go, yeah, you've got them right or no, you haven't.
Speaker 1:Okay. Is there anyone who tries to basically eschew Excel entirely and solve the problem with Visual Basic? Because if I believe if I understand correctly, Excel has like a VBA back end and you can basically write, you know, you know, programming language. You can just write code.
Speaker 6:Yeah. Absolutely. So there's nobody who tries to solve it entirely in Visual Basic just because anybody who's watched this or watching this who's coded in VBA knows it's a terrible language. It's so slow to get going.
Speaker 1:Yeah.
Speaker 6:There's bits there's chunks of code people have especially especially for for things things like looking at the colors of cells, like if you've got a map and like the blue cells of water, the green cells of land. There's no native way in Excel to do that with formulas. So you need VBA for that. There is one guy who there's now Python and Excel that's been there for about two years, I think. And like you write some Python code, it gets sent to Microsoft.
Speaker 6:They run it. They send you back the answer. And there's one guy who competes in that and does quite well. His general thing is he's very slow to get going, but when he gets going, he sort of, you know, really starts to pick up pace. So again, it's a little bit of the randomness of what sort of case comes up.
Speaker 6:Some suit him. Some suit him less.
Speaker 1:And then what is the what what are the rules around artificial intelligence, copilots? There's there's you know, AI is coming to Excel. Do you think competitors will freeze on a particular version of Excel that doesn't have AI? Or will there be an AI subcategory that allows you to use some copilots, everything, unlimited, unrestricted, you know, and no rules apply categories. How will all that play out?
Speaker 6:Yeah. So AI is banned in the main competition. It's getting increasingly difficult to police because it's it's making stuff that looks more and more like a human would compare sometime maybe eighteen months ago. Sure. Maybe they'll start running it like an AI assisted competition.
Speaker 6:I know a few people have talked about that. I don't think it'll be very popular. Like, you look at the world chess championship, people watch that. There is a world chess engine championship. People don't watch that as much.
Speaker 6:Mhmm. So but, yeah, it's it's currently banned. I think we're still gonna wanna keep on the latest version of Excel because they're adding other stuff to it that's quite helpful. Like, added Regex about a year ago. So we didn't have that, so people would complain.
Speaker 6:But, yeah, at the moment, it's kind of an honor code. Like, when you get to Vegas where it is to do the finals live and you obviously can't just be like, hi, chat GPT. Do this for me because someone will notice. Yeah. At home, it's currently an honor code, which is, yeah, something we're finding harder and harder to police.
Speaker 1:Yeah. That makes sense. So Nico, like what are you learning from Excel championships? Yeah. Yeah.
Speaker 1:Yeah. Yeah. This is your competition. Is there training data to be learned? Are there sort of like the the rough edges of the spiky intelligence you notice things at at the at the top tier level that then can be applied for everyday users that use your product?
Speaker 1:How are you actually working together?
Speaker 8:Yeah. Yeah. For sure. I wanted to know that like, one, could you really compete at this high level and what has to be true for you to get there and how much of this is like mastering the art of using AI versus how much could you like institute into the product as like a first class experience for everybody. And it turns out that like, you have to be really fucking good at using, sorry, really good at using AI, to even have a chance.
Speaker 8:So like when I competed, I actually did some practice cases at home all weekend before leading up, and like AI will take the same way in coding, like the path of least resistance. It'll be like, okay, well I didn't check every single question. I looked at the hints and then decided what I should answer. I'm like, no. And you'll see this in my prompts.
Speaker 8:I'm like, do a blank space audit, spin off adversarial review sub agents of multi different model types at the frontier to see that, like, you know, they think differently. I want you to catch yourself. And with enough advert like, with enough verification loops, you can clearly get a 100% on, like, any realistically hard challenge that is verifiable. But that's not how most people use AI, and I wanted to know what what it required to get there and then work backwards from like, do you bake this into the product? Because, there's a trade off to these things.
Speaker 8:And you know, I actually didn't even use the best model. Like, didn't use Fable. Interesting. I had to use Opus four eight fast because it's the right spot of the front Because I would probably have lost.
Speaker 1:On speed.
Speaker 8:To my goal. If I if I used Fable because we were getting a 100% accuracy on almost every question, but I was, you know, faster because of the model I had chosen.
Speaker 1:Is there strong transfer learnings from these verifiable tasks versus the less verifiable stuff that people do in in Excel all day long. Like like the average investment banker who's doing a DCF, like, it's not like at the end of the day, they're like, yep. The share price should be $200, you know. You're you're building a case.
Speaker 8:Right. Right. So in I would say AI is better suited for the contest than it is for real Excel work. In that, this is like you asked first, which is, is this programmatically verifiable? Like, there true or not true?
Speaker 8:And the answer is yes here because we have a contest. But if this was judged by a committee of, like, experts based on taste, it would be way harder. Now you can say that as AI becomes more tasteful, and it is, you see this on front ends, like it's getting a taste for what looks right, we benefit from that. But there's another more difficult form of verification, which is like, okay, well, there's 20 ways to make a DCF. They all look great, but one is specific to your company.
Speaker 8:Like how do you learn that?
Speaker 1:Mhmm.
Speaker 8:And that is like the real long tail product learning curve that we bake in with our customers. Like that's the real challenge right now. It's AI will do things but there's a million there's a million right ways.
Speaker 1:Among among your customers, what what does demand for speed look like? I mean, we were talking about Cerebras, like Oh, man. There's this trade off. And I feel like for like, the nature of an investment banker, is at least on the junior level is often the MD is like, turn this around ASAP because the client is meeting in an hour and I need you to do it as fast as possible. And there's no excuse for, well, I'm using a really solid model, but it's gonna take five hours to get back to me.
Speaker 1:What does demand look like? What what are customers telling you?
Speaker 8:Oh, man. I I don't think enough people are talking about Cerberus or whatever other alternative ways there are to get to like whatever tokens per second that was. Yeah.
Speaker 5:It was
Speaker 1:like 50 you
Speaker 2:know, every company has a different style.
Speaker 8:Like it's going to open up computer use. It's going to open up everything.
Speaker 7:Now you
Speaker 8:have to hit you have to hit a certain level of competency and accuracy first before it even matters at
Speaker 5:all.
Speaker 1:Yeah.
Speaker 8:But we are sort of there with Soul and Fable. Yeah. Now, like for example, we even with Opus four eight Fast, we turn like an operating model build out with like 15 quarters of historic fifteen years of historicals for quarters, like Mhmm. That can take thirty hours for a hedge fund to build, and then two hours to update every quarter. We do that like in one hour and then ten minutes.
Speaker 8:Wow. Now we could get that to like 10 times faster. Yeah. And that's actually what's going to be a huge unlock because hedge funds, for example, want to track not 200 companies a pod, but 2,000. But you cannot do that because they're Excel firepower bottlenecked.
Speaker 8:There's another bottleneck, which I think the future will care about, but it's like, even if it's faster, it has to run headlessly because you're not going to open up 50 models or a thousand models like on your computer, and Excel does not run headlessly. I bet you it will soon though.
Speaker 1:At all? There's no there's You
Speaker 8:can do some clever clever arrangement of like vms vms, like expensive licenses and like some companies might do this to get around the bottlenecks, but I'm I would I actually don't know for sure, but I would bet my life that Microsoft is working on this.
Speaker 2:Interesting. Niko, are you recruiting Michael yet?
Speaker 8:Michael. No. Don't think I could afford Michael. No. I would say Michael, the best form of recruiting was after the contest Michael asked me if we can get his team on shortcut.
Speaker 8:And we did.
Speaker 2:There you go. Wait. So Michael, what do you what what's your what's your what do you do day to day when you're not
Speaker 1:Winning championships. Yeah.
Speaker 6:So I've about six months ago, moved into private equity investing in freight rail across North America.
Speaker 1:Thank you. Thank you
Speaker 5:for your service. Alright. Thank bro. Appreciate it.
Speaker 1:Faith in humanity restored. I needed that today.
Speaker 2:I needed that today.
Speaker 1:Thank you, guys.
Speaker 2:To know that our best and brightest are still choosing private equity
Speaker 1:Yes.
Speaker 2:And not giving in to, you know, the Nikos of the world building our our future.
Speaker 1:Yeah. Exactly. Yeah. Yeah.
Speaker 2:Make, you know, making the the roll up you know, the path.
Speaker 1:Well, congratulations to you both. Thank you.
Speaker 2:Yeah. Really really fascinating guys.
Speaker 1:Been the time to come chase Great to see
Speaker 2:you, Nico, and great to meet you, Michael.
Speaker 1:Have a great rest We'll of your talk to Nice
Speaker 2:talking
Speaker 1:to you. Private
Speaker 2:equity. Got a good one.
Speaker 1:Dan Primmack shared a little tinfoil hat theory. He is beginning to wonder if Sun Valley is really organized by Getty Images and Allen and Co is just a front. I wonder if they actually do you think Getty Images actually sees an uptick in sales around Sun Valley? Or is this just like tech insider baseball exclusively? You have to imagine like Met Gala sell sells more Getty Images than Sun Valley.
Speaker 1:It's more of just Yeah.
Speaker 8:I think the the
Speaker 2:it's it's a good bit. The funny thing is, like, even being in tech media, we don't see that Getty Images has a bunch of photos of Sun Valley and think, okay. Gotta go sign up for Getty.
Speaker 1:Sure. Sure.
Speaker 2:It's like if a cool one pops up, it's like great.
Speaker 1:And you kinda want the watermark on there because it's like a status symbol that it was taken by a paparazzi and not by just some Yeah. Some random person.
Speaker 2:Speaking of our previous conversation
Speaker 1:Yes.
Speaker 2:On on betting, risk maxing says a nine to five isn't a career. It's a supply chain for casino ammo. And that is certainly one way to look at it. Although, that's not how we think about our work here, gentlemen.
Speaker 1:No. We respect the dollar like Nick Cage. Tai Lopez calls money fuel units. I always thought that was a funny funny turn of phrase. I call them fuel units.
Speaker 1:I call them fuel units. Well, this person calls them casino ammo, which is very silly. No two countries than AI data center have ever gone to war with each other. Is that true? That seems potentially true.
Speaker 1:What else is going on in the timeline?
Speaker 2:Major innovation in fashion. Let's pull this video up.
Speaker 1:I haven't seen
Speaker 2:this yet. Silva says, this is the greatest invention created since AI.
Speaker 1:Okay.
Speaker 2:It is a polo and a quarter zip.
Speaker 1:Oh, it's
Speaker 2:all one? That's a one. Wow.
Speaker 1:There we go. What is this what is this Kazakhstan ad? There's a targeted ad on Instagram. It says if you love tiramisu, you should visit Kazakhstan.
Speaker 2:Just try Kazakhstan.
Speaker 1:Try Kazakhstan. Is is that an aerial photo of an area in Kazakhstan?
Speaker 2:Yeah. It looks like beautiful
Speaker 1:image, but I don't know what it has to
Speaker 2:do with
Speaker 1:but I I've actually seen ads from the Kazakhstan board of tourism before. They they have a pretty significant firepower when it comes to advertising. I want to play this this reel of this gentleman who's practicing his robot skills so he can take AI's job because it's my new favorite genre. I'm seeing less AI videos and more people doing AI impressions going viral. It's a very weird outcome.
Speaker 1:Everyone said that the this is this is the best. This is incredible acting. Look at this guy. So good. Uncanny.
Speaker 1:Uncannally accurate. Uncannally accurate. No. There's like a whole subgenre of people that just do impressions of the AI slop. There's that guy who does the chatting with the voice mode and it always gets wrong and I see more of those than people actually generating AI voices.
Speaker 1:And I've also seen there's this group
Speaker 2:You mean the off payroll QA tester?
Speaker 1:Yeah. Off balance sheet quality assurance. I see there's this there's this group of of of guys who make Instagram videos that imitate AI videos. And it's fascinating because you notice once they do the impression of the AI video, all the little quirks and tells of AI video, like they'll be saying lines and they they pre rehearse the lines and they have everyone in the shot move their mouth to the line even if only one of them is saying it because that's something AI videos do a lot apparently. And then it has these odd like push in camera moves that happen all the time.
Speaker 1:It's very very funny.
Speaker 2:We never talked about how I was referencing the turn it down meme with Alexis. Oh, yes. I wasn't picking it up. You guys
Speaker 1:caught it.
Speaker 2:Yeah. They caught it. I heard them I was like, do any of the athletes turn it down? He's like, no, actually. And I was like, how much can you make?
Speaker 2:$10.15? Ridiculous. Pull up this last video. We'll close out the show with it from Emily.
Speaker 1:She's been on a tear.
Speaker 2:Is a Every video is going viral. Voice. Actor.
Speaker 1:I think she's a she's a real she does voice acting for for radio ads, but of course is making fun of the tech industry, I I think.
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Speaker 1:Sounds like something we
Speaker 4:would Business
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Speaker 9:AI.
Speaker 2:It's part Very talented. The funny is she's saying every voice over script right now, which I would assume that this kind of like audio is like AI is really good at. Yeah. But but I think some of the AI companies are LARPing and they don't know how good the the voice models have gotten, so they haven't hire
Speaker 1:a voice actor to read the most AI laden script of all time?
Speaker 2:Yeah. So so
Speaker 3:I like, sometimes I listen to the radio on the
Speaker 1:way to work,
Speaker 3:and I hear ads like this, and they're always by these, like, big legacy companies.
Speaker 1:Okay.
Speaker 3:So I assume that's why they're not using, like, actual cutting edge technology.
Speaker 1:Bullish for voice over artists, I guess. Reading AI for business
Speaker 2:ads. Last video of the day. Yeah. Did you see this? There's a clip from This is SpaceX's new launch site.
Speaker 1:It looks like Dune. It actually looks like Dune. I'm pretty sure SpaceX accidentally built a transformer. At least that's what it sounds like here. And so you can play.
Speaker 1:This is designed to to hold all the rockets so they can launch them, I think, every hour.
Speaker 2:Let's get some audio.
Speaker 1:Look at this. How do they they shot this with a drone? This is Dune in real life. Look at this. The engineering that goes into this just so thinking so far ahead, like, I think this is designed to launch a starship every hour.
Speaker 1:Yep. And it's like
Speaker 2:They said that something like an Olympic swimming pools worth of water that they use to Cool everything? Yeah.
Speaker 1:The There's another video here. This new critical path video is just mind blowing. Love the deluge part of the story. You can play this video. This is crazy.
Speaker 10:About 650,000 gallons per minute. That's approximately in the range of about like one entire Olympic swimming pool being drained in the course of a minute.
Speaker 1:Is that for when it takes off?
Speaker 10:Deflector on pad two. We're sitting somewhere in the neighborhood of about 650,000 gallons per minute. That's approximately in the range of about like one entire Olympic swimming pool being drained in the course of a minute.
Speaker 2:Is how they quantify it? Is the kind of thing you can imagine, you know, maybe a world in the future where humanity has left earth
Speaker 1:and
Speaker 2:and another another group comes and visits and they're looking at this thing
Speaker 1:being like,
Speaker 2:what were they cooking?
Speaker 1:What were they cooking? Imagine if you had the world's biggest machine gun and it's just firing 11 pickup trucks per second out of the bottom of the rocket. Has to be the most American measurement of all in all aerospace history. I love it. Always put it in always put the power of your rocket in pickup trucks per second, I suppose.
Speaker 1:Anyway, thank you for tuning in to TBPN. We will see you tomorrow at 11AM Pacific sharp. And leave us five stars in Apple Podcasts and Spotify. Sign up for our newsletter at tvn.com. We'll see you tomorrow.
Speaker 1:Goodbye.