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Thank you, Gold Rock. I like that one. No. We're talking about Huang, Alice Huang because the spy gate continues. It's getting worse.

There's a whole bunch more allegations. It's very dramatic and she's going on the naughty

list. The good As thing long is going on the naughty list. If you think there's no way it could get worse, well, that feels like it's on the table.

That is on the table. But yes, let's pull up the naughty list because we put Jensen on the on the naughty list. But I think Alice has to go higher on the naughty list because she's the one that is the spy and she's working for the for for the geopolitical rival, the near peer adversary. She's working for Shaken here essentially.

Like she started it.

But it's it's getting it's getting crazy. There there are seven seven new accusations that some of them we touched on, some of them we haven't. I can kind of take everyone through this. First is that NVIDIA, these are all accusations. There's a varying level of reporting.

Some of it's from Wired and Bloomberg and the information. Some of it's confirmed. Some of it's speculative. So, you know, you have to take all of this with a grain of salt at this point. The story is still developing.

But let's go through them. So first, NVIDIA may have interfered with the federal investigation. Commerce Department investigators were investigating Mega Speed for potentially smuggling NVIDIA chips into China. After NVIDIA general counsel contacted commerce, investigators faced unusual restrictions. They needed to route NVIDIA inquiries through senior political through a senior political appointee and avoiding and avoided references to mega speed, is very odd.

Two, NVIDIA intervened regarding Alice Wang... Alice Wong's detention. General Counsel Tim Teeter called Commerce Undersecretary Jeffrey Kessler after Singapore detained Alice Wong. The question is whether Jensen was leveraging NVIDIA's influence to help her. Also, third, NVIDIA undercounted 50,000 GPUs sold to Mega Speed.

NVIDIA told regulators that its inspectors had accounted for the chips, but Bloomberg identified approximately 50,000 additional GPUs worth billions of dollars. Nvidia said it has had inspected additional warehouses. Fourth, the FBI Congress and Nvidia's board are now investigating. Trump said the FBI was looking into Huang, but it was unclear about what. It might be a different thing.

NVIDIA's board...

The way the quote from yesterday made it sound like there's something else.

Yeah. But there's so many things. It could be within that or separate or linked to it or something, but never wanna be on the... That side of the phone call with the FBI. And so NVIDIA's board has opened its own investigation and lawmakers raised questions about what other NVIDIA executives knew.

I... I'm I'm actually unclear on whether this will wind up with a, testimony on the hill, like a congressional inquiry, the like the famous Mark Zuckerberg, we sell ads moment. Like, is there... Is that how this will play out or is it all behind the Absolutely. Absolutely.

So entire country Mhmm. For the most part except what that one place in North Dakota

Mhmm.

Voted against AI. Sure. What do you think their representatives are gonna be doing come January?

Yes.

They wanna... Jensen is one of the faces of AI. He's the most outwardly supportive of the administration. Yes. They will use him to put on an absolute show.

Right? A performance. Yes. You know, the exact details of that and how it goes down, don't think are obvious yet. But Yes.

He will be starring in...

They're gonna throw the book at him. It's gonna be the Girardian scapegoat. Someone must fall just like Sam Bankman Fried sort of was, you know, like, was the power law recipient of negative attention post crypto collapse. Like, this could be, like, a lot of attention on Jensen, less attention on other people in AI potentially. But my my question is, like, if there...

If it really is, like, a level of national security, those might be just closed door hearings, like, or closed door investigations. Like, it might be, like there's still a conversation and you're and you're under oath, but it's not gonna be televised on Seaspan because...

I'm sure they'll figure out a way to to televise some of it.

Yeah. No. No. I I I think you're right. I would just probably handicap it like 70%.

I don't know.

We were talking with a friend last night. He studies history's greatest entrepreneurs. He doesn't really know much about the news but we were sort of explaining what happened Yeah. To him. And I was like, is this the largest unforced error in business history?

Yeah.

And I think that it might be.

No. No. I I was going back to like, you know, Rockefeller, Henry Ford. Like, there was never a a crisis of geopolitical consequence quite like this. It really is uncharted territory.

There's been plenty of business scandals in history. There's been political scandals in history. But we were even going back to Clinton and we were like, that was not... That that did not reshape the geopolitical dynamic at the time. It was not like, okay, all of a sudden, you know, like Japan had more power than America because of the Lewinsky scandal.

That was a separate thing.

I don't know. I just think I I don't know enough about that to to have a strong stance. Although, my my assumption would be that...

Nautical was an American.

Yeah. I know. I know. Know. But like having a president, you know, be disgraced obviously has...

It was a huge

huge story.

But just purely from a business standpoint Yeah. Like, you know, this a a screw up of this magnitude is Yeah. Is these kind of implications Yeah. Eviscerating hundreds of billions of dollars of market cap. I don't see how Yeah.

Like knowing that there's just like a lot... There there there... It doesn't feel like we're we're hours away from a positive headline. It feels like we are months away from a we're we're years away from potentially like a real resolution to all of this. Right?

It's gonna be this massive overhang Yeah. On the business. Yeah. And it has been interesting to track people's perception of this whole thing from Saturday or sorry, Sunday. People are like, okay, wow.

He admitted to having an affair and then it just got worse and worse and worse to the point where I think most people, even if you believe that that Jensen is the right person to run Nvidia, right, from a Yeah. From a value creation standpoint

Yeah.

It's hard to imagine him staying in the seat.

Yeah. I mean...

It's just like it's

Yeah.

It's just too unless there's some... What what's the opposite of a smoking gun?

A cold gun that has not been fired? An opposite...

Help me out, Tyler. Opposite of a smoking gun. What do we

got? Insufficient evidence. That's terrible.

That sounds horrible. Yeah. That sounds horrible. What do we got? Chat, help us out.

Like muddy waters. I don't know. Anyway, yeah. Yeah. It's it's a question like the other...

Everyone's waiting for the other shoe to drop. There... It feels like there might be 10 shoes here. There's there's certainly more. I didn't even get through the list.

An armory of untouched guns. That's the best that can come up with. An armory. Look. None of them have ever even Yes.

Been

Yes. They're all factory new. Never been fired. Anyway, so there's three more. Oh.

Three more things.

There we go.

A nothing burger.

A nothing burger.

Yeah. If he's got somewhere...

He's like,

here, look. It's a nothing burger. NVIDIA's general counsel was denied...

Stone Cold Alley....

Last as last week. So this raises the possibility that...

Oh. We've got more. A get out of jail free card. Oh. If he's got...

It might be on the table. Who knows?

If they have one of those.

That's gonna be controversial. Possible... So there's a question......

Liability that also sounds bad.

Yeah. That's iffy. Yeah. So there's a question right now about did the senior executives knowingly misrepresent the relationship or were they misled by Jensen? Also Jensen had quietly hired crisis PR firms a year earlier.

This is from Wired. They reported that Heller had been managing his behind the scenes communications since at least 2025. And Tyler, you you hired the crisis PR firm Heller recently. Right? Because you were trying to get in front of the skipping leg day allegations.

Is that right? Because that could destroy you if if it gets out that you've been skipping leg day. Yeah. Certainly not me. I would never.

But yeah. If if you've if you've been if you've been slacking at the gym and you're skipping leg day, you got to give Heller a call. It might look bad but better to have them in your court than than than go it alone, certainly. Anyway, the potential cover up creates personal liability for NVIDIA's directors. This is a big deal.

There's already a lawsuit filed, but if Jensen can seal the relationship from the board while NVIDIA publicly characterized it as ordinary business, directors could face more shareholder litigation potentially depending on how that breaks. So there's a there's a lot of complications there. Also, the information has a fantastic breakdown that goes way deeper into Alice Wong, the the James Bond of of AI, I suppose. Mega Speed and then there's this new company that they dug up Century Litong. Highly recommend reading this.

And they actually pieced together the puzzle a lot more. I was trying to show the connections between these firms. Remember I was saying like, okay, Mega Speed is related to Seven Road Holdings and then there's Alice Wong's HoldCo that's in the BBIs, that whole thing. Remember that confusion? Yeah.

You're like, I was tuned out for that.

Most suspect. It was extremely suspect. Corporate structure

Yeah.

Of all time.

Yeah. You shouldn't be able to raise a seed round if that's your structure. It's a more complicated structure. So there's Shanghai Century Litong which was the founding the founding sole shareholder exited June 2024. Then that's Shanghai Century Long Tang which is indirectly owned until June 2024.

Then Shanghai Yunxi Investment which is owned 99% until '27. It's insane. Also, didn't know Alice Wong is married and so they're both actually married. Alice Wong is married to Kong Wei who's the founder and major shareholder of Shanghai Hexie Capital which was a shareholder in Zhejiang Century Huatong which is a shareholder in Seven Year Old Holdings Limited which is Cool. Which formerly owned Mega Speed.

So her husband was a shareholder in Mega Speed through like five layers or something. So... And and it... I don't even know. Is is he stoked about this?

He's like, good job. You you you honey potted successfully. Like that was the name of the game. Or was it like, oh, I wasn't expecting you to honey pot like

that?

It's possible the marriage was like part of the whole corporate structure. Right?

Yeah. You know. Yeah. Yeah. No one knows.

I mean, have you ever seen the Americans?

I was just... Show.

And in the and in the show it's about two Russian sleeper agents that basically build a whole life in America. And then... And like as part of that, they are like honey potting a lot of different people. But they're in like a relationship but they're both like agents so they like willingly go out and honey pot people all time. Then they come back and they're like, okay, how's it going?

And then and then there's like some jealousy that creeps in. It's a great show. You should definitely watch it if you haven't. Anyway, sorry. Cut you off.

Yeah. I saw a retail investor over on Instagram crashing out Okay. Because they were a big Nvidia holder. Mhmm. Well, probably not a big Nvidia holder.

But a lot of their portfolio Yeah. Was was Nvidia. And they were talking about how how they bought the dip Friday, had a great weekend Mhmm. And woke up to discover that they didn't even... They weren't even referencing the CEO by name.

Mhmm.

Right? Because it... I don't think they're like that focused on But but they were like, and now I find out that the the CEO had an affair but not just a run of the mill affair, like an affair with an alleged spy. Yeah. Like...

And anyways, it it's just... Yeah. They're calling it the greatest unforced error in business history.

Fatality.

Hopefully not. Hopefully not.

Yeah. Is she the is she the Michael Jordan of spying? You kinda gotta give it to her. Right? She's like one of the greatest spies of all time potentially.

A hall of famer?

Hall of famer. But a true American tragedy. Really really bad. I don't think you can be a hall of fame spy if you get found out. Oh, okay.

Like we know about her. The greatest spy, we don't know. Sure. Sure. Okay.

So... Spies know

what So I'm talking

firm place on the naughty list but...

That's exactly Not a spy in a spy say... An active spy would say that wants, you know, elite spies to get more credit Mhmm. But can't, you know, say like I'm the top guy. Mhmm. You know?

So... Mhmm.

Well, let me tell you about MongoDB. What's the only faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it. Going on the nice list, we have our first nice list addition, the United States Marines.

Happy birthday Marines. Today is the 250 birthday of the Marine Corps. And and Jackson over there wrote a very nice tribute in the newsletter Here tonight's success. Grandfather. Do you want take us through it a little bit?

Does he have a microphone or should I read it? You want to come back there? Yeah. Give us give us the high level. You don't need to read the whole thing but give us a little overview of your Are family

both of our hosts sick? Yes. Yes. How did you know? Wow.

How did you know? I'm trying to live together so badly, but...

We're down bad. But the show

Must must go go on. So Jackson, take us through the story of Michael Fordyce and your grandfather, Tom.

Yeah. My dad joined the marines right out of high school.

Mhmm.

He went to The Middle East, was in Gulf War, served in Operation Desert Storm. My grandfather also went to the marines out of high school.

Wow.

Was sent off to Vietnam. Fought in the Battle of Caisson, which was, I think, one of the most of gruelly and bloody battles of the Vietnam War. Got his arm shot off, unfortunately. And he has... How did he...

He explained it to me today. It's called a myo... Myoelectric hand. So he thinks and it moves and picks up things.

Interesting. He actually has like the Wow. Luke Skywalker arm. That's incredible.

I asked him how it works. Says, I don't know. It just does.

That's amazing. I love it.

But that's it. They're awesome guys. I love them a ton and I appreciate their service.

Fantastic. Yeah. Thank you for their for their service. We love them. And happy birthday to the marines.

Go out on the nice list. We got to go hunting for some more nice list addition cause we're kind of overweight naughty list here and I feel like in general, Santa's list should be 70% nice, 30% naughty at most. Yeah. Right?

We're two weighted.

So we gotta dig in,

we gotta dig up some some some good... Maybe Jackson.

Maybe Jackson goes

He's on the nice so good but also maybe he should be on the naughty list because he kind of broke the family tradition of you know, serving out of high school.

Podcasting at war.

Yeah. Men used to go to war.

Serving this country via podcast. I don't see a...

Now, your whole family's on the nice list.

Yes.

Yes. And we're grateful to have you here.

Well, we have Chris Miller joining at 11:45, the author of Chip War returning to the show for the third time to take us through more of the geopolitical implications of the Nvidia situation. Ed Bolian from VinWiki. Then we're going over to Car World, baby, talking about the cannonball. He he has held the record for fastest cannonball. And then of course, we're going into fundraising news and closing it out with Christopher Kercher.

Let's dig into more posts from the timeline. Amir over at the information gives more context on Alice Wong says, forget the role of mega speed, forget the word mega speed, mega speed doesn't matter. It's almost a distraction. Her real story is her role at China based Shanghai Century Litong, which I mentioned before in that very confusing chart, which became a preferred NVIDIA cloud provider or partner in mid twenty twenty three and facilitated over $7,500,000,000 in NVIDIA chips shipments including securing banned chips. Remember, the Chips Act, that's Biden era pre Trump or after Trump one, before Trump two, the Chips Act restricted the a 100, the h 100.

And so eventually, Nvidia came out with the h 20, which was sort of the nerfed version of the of the flagship chip. But Century Litong was still able to get the the the unnerfed chips, best that Nvidia had to offer. Exactly what the government didn't want to have happen. And now there is a world where you get duped and you accidentally sell something to someone who is exporting it and going around export controls. And that would be the opposite of smoking gun.

The nothing burger. Right? If there's clear evidence that he was duped along that way and it really was like, well I I went to their facility in Shanghai. I... Or not Shanghai, sorry.

Singapore. I went to the Brazilian in Singapore. I talked to the companies that were there. They were not involved within the CCP or in China at all. And so it was totally fine.

And like I had done all the checks and we had all of our teams check that the GPUs were staying there and they were not gonna be used internationally. I I I know...

Alice was detained by the Singaporean government.

We have a lot of evidence that it's worse than that but that would be the best if not. Given what we know.

Even even if they were originally tricked, there's been a year since that detention where they could have been Yeah. Like front running this story.

Yeah. Not not not good. So Alice Huang and her sister and her husband have built a labyrinth of companies spanning China and Singapore to acquire NVIDIA chips according to people who know Alice Wong and corporate registration records. At the center of that corporate network is Shanghai Century Litong, a China based company that was founded in June 2023 and by October was added to NVIDIA's list of preferred cloud partners. That's fast to start a company and and rocket and actually get on NVIDIA's radar.

I mean, I feel like, you you talk to startup founders all the time who are like, I I would love to get a meeting with a big company. Like, I'm six months in. They won't they won't answer my emails. Not so in this case. So there's other news.

When a shipment of banned NVIDIA chips could not be obtained from NVIDIA's distributors, Alice Huang stepped in. One of the people who knows her said her role was to secure the chip orders when they got stuck in the supply chain. She told some colleagues and customers that she could always get the supply citing her close relationship inside NVIDIA and with distributors another person who knows her said. Rough. Anyway, what where should we go next?

To Matt Levine or over to negligible capital? Imagine telling someone six months ago during the SaaS apocalypse that Microsoft will have a greater market cap than NVIDIA by November. It is it is remarkable that NVIDIA was actually the biggest company in the world right as this was all happening. So he... It's literally, you know, the target number one for a geopolitical rival.

Like, there's no other CEO that you would go after. It's it's truly the most the most important. And here we are. Here we are. But I guess...

Yeah. That's why it's ultimately... No. It's it it... That's why it's a black swan.

It's a black swan? For

sure. I was... Two weeks ago

Yeah.

I was racking my brain. What could the black swan...

Trying

trying to think about what what, you know Yeah. And of course, that's the nature of these things. But like, you know, I don't see how... The question is like, can Jensen, while he's under investigation

Mhmm.

From multiple groups continue this sort of like deal making spree?

Mhmm.

Or does a lot of that have to just hit pause? Yep. Right? And part of, you know, people talk about moats all the time Mhmm. But like, moats tend, you know, a factor Yep.

If if, you know, if if people are willing to be honest. And moats are just like, you know, the people running the show. And and that the overall talent density.

Yeah.

And so much of NVIDIA's like, Mote was just like Jensen's incredible tenacity and work ethic and and and basically, like, Right? You know, when when you look at, like, the Neo Cloud space and, like, how he's approached

Mhmm.

Those relationships and and supplier relationships. I mean, he's... The the sort of like Jensen discount that you have to put on NVIDIA Mhmm. Even the possibility of it is like extreme.

Yeah.

And and then the impact for the private markets is like, I think a lot of VCs were basically like, you know, shoot for the moon, but even if you miss, like Jensen will give you another up round or or he'll, you know, buy your buy your company. I mean, even even I was sitting here looking at looking at CoreWeave as it's been beat up Mhmm. Being like, gents, there's no world where this company fails because Jensen, I don't think we'll let it happen.

I agree.

And there's so many more questions around how he'll approach running the business. You know, I can imagine as long as he's CEO, he's probably gonna, like, stick to his guns and keep doing what he's doing. But he... It's just like his entire strategy of, like, being everywhere all the time. Mhmm.

Just being again like... He's not actually like Switzerland in practice. Right? Like, Nvidia is very aggressive, you know, wants to do everything he can to win, but but generally being like, I'm gonna fund everyone. Right?

The sort of like Switzerland, you know, sort of like neutral approach. He just wants AI to grow and he wants people to buy NVIDIA GPUs. And if that's happening, he's happy. Right? He's gonna support all the, you know, the the NeoLabs.

Like, there's like a ton of NeoLabs that have raised like $1,000,000,000. Right? And a lot of them now have to be... They were they were hoping like, if we can just prove out that we are like on the path to making something commercially viable or interesting, like, we can probably count on NVIDIA for, like, 500,000,000 or or a billion dollars or to anchor around. And and it just like, as we've gotten into this period where it feels like capital is the primary constraint to the build out.

Right? Mhmm. A lot of people want to build data centers. Right? Yeah.

A lot of people think that there's gonna be, you know, exceptional demand for compute regardless of the midterms. Right? And if capital is the if we're all realizing like, hey, you know, the rates that developers and everybody in sort of seven layer cake are having to pay now to finance different... You know, their own CapEx, whether they're on the bottle, you know, the sort of AI infrastructure side all the way to, like, the real estate and powered shell side. You know, one of the biggest financiers of this entire build out is like effectively you can't lean on them anymore in the same way that you could.

And that's why I just think

We

gotta do major stimulus reckoning. Right?

We gotta do stimulus stimulus checks. We gotta get the money printer going. We gotta get the crack. No. It is it is such a black swan.

And it's interesting because we lived through a very crazy moment with the situational awareness that still didn't feel like a black swan because there were so many people from day one being like, oh, this is not gonna work or this is so this is so risky. It's too good to be true. And that and that puts it in like a... It was it was surprising and it was it was a very rough moment and it was it was tough to watch and it was sad, but it was not as much of a black swan as this. Where...

Tyler, you had a comment and then I wanna know where where the prediction markets are. Yeah. That's what I was gonna say. Please. So they're up almost 10% from yesterday Okay.

Of if Jensen is out before July of next year. Of next year. It's at almost 40 right now. 40%. Yeah.

And yesterday it was around 30, 31. Yeah. I've heard a lot of chatter about people saying he can't stay, but at the same time there's not a very clear succession list and it it's a it's a crisis. Yeah. It is it is just a crisis.

Anyway, there is so much more NVIDIA news, but we probably move on. The the Anthropic news, there's a ton there. They're on track for IPO. They put out their prospectus and offering documents and and videos and they have a whole host of of ways to interact with their data. And also Fable 5.2 came out and is doing very well in benchmarks and people are starting to show demos of that and that's very promising.

Really rough timing because Jensen is sucking a lot of the air out of the room. At the same time, it it is sort of a vindication of their positioning that the the geopolitical conflict with China is extremely high stakes, extremely serious, and will be taken to the extreme. And so it's...

Yeah. And they have a new 80,000,000,000 ARR number. I think there's like a lot of... Like, there's still a million reasons to be bullish on anthropic.

You also cut the valuation. And if

you were bullish, if you... Yeah. The valuation's cut, you have a better entry point if if if you do want to invest. And so I think in hindsight, I think a lot of people will be like, wow, this was like sort of a golden opportunity and that there was so much bad news and yet the Anthropics business was still working in the way that it has been. Yeah.

And that creates, you know, an opportunity for everybody participating. And my assumption is that, like, retail will be able to get massive exposure Yes. At the at the IPO.

Did you see that on their website? They have, like, a whole... They they have a whole... They have, like, a bunch of case studies of companies that are using Anthropic, But then they also have a section where it's like, how how do... How can you participate?

And it says, like, click here to know the Charles Schwab route. Click here for the Robinhood route. Click here for the E Trade route. And they all have, like, you can click your brokerage and, like, go through a flow. And so that felt, I don't know.

It felt like down to earth or something to see. I mean, it may... Maybe it's standard practice, but it seemed like, don't know. It was kind of like... It it it wasn't it wasn't highfalutin.

It it felt it felt very like... Yeah. Like, we're...

Well, I think a lot of people's mental models is still like a company goes out and they raise $4,000,000,000

Yeah.

In their IPO. Right? And there's and there's just like plenty of big investment banks who will fund that. And now it's like, yeah, you can carve out

Yeah.

$10,000,000,000 for retail Yeah. Or more. Right?

Yeah. Well, if you're thinking about going public, do it on the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange. And also, if you're investing in an IPO, do it on public.

Invest across all asset classes, automate anything with AI agents, run trading strategies, risk management, money movements and monitor markets with AI agents for investing on public. Bill Bishop is is just showing that The bishopinator? The bishopinator is doing a of bunch of pungentry. He says, NVIDIA execs ran a smear campaign against proponents of chip export controls. Bare bullied people on the hill.

They made so many enemies and now no one is afraid of them. I think we are still in the tip of the iceberg phase of what is gonna come out. He thinks that there's gonna be many more shoes. A whole closet full of shoes dropping over the next couple months maybe.

Imagine they open the closet and like 300 nothing burgers would spill out.

Wow. Yeah. Yeah. Fire up the grill. We're cooking up a nothing burger.

I I haven't seen anyone post the nothing ever happens guy yet. So... You got a bonus... Know, it could be. Yeah.

You have one of the all time worst nothing ever happens post right before the start of the Iran war, I believe? Yes. Correct.

Yeah. Wow.

That was true.

L for you. Fade, Tyler.

True l. But that's what you come to TBPN for, hot takes. Travis Kalanick chimed in with a vague post sort of. I mean, everyone knows what it's about. He's talking about in in video, but he says, had a little time on my hands this morning to do some writing, send along to someone you know who may benefit.

Practical principles to counter a modern day coup, psyop, struggle session. Own what you did but fiercely resist accommodating the mob. The op is not about your past actions, it's about your enemies and this event is their opportunity. No matter how bad it gets, nothing is as bad as it seems. He's saying it's mindset issue.

I sort of... The the interesting thing is like going from where Mhmm. Every single day that's passed Yeah. Well, it's only Tuesday, the last couple days. Every single day, it seems it's actually worse than I originally thought.

True. Yeah. Does seem to be getting worse before it gets better. But hey, nothing burger could be coming at any minute, any minute. Well, it does seem like Anthropic is on track to IPO next Thursday, which will be very exciting.

I believe SpaceX went out on Friday and didn't really start trading or moving around much later in the day. So we'll be covering it with... It's also g... It's potentially landing on GTA six launch day. So we're gonna figure out the schedule, but should be a fun day tracking how the market reacts to that.

I... I'm pretty optimistic, but we'll see we'll see what happens. It'll be also we're going to tomorrow x next week and we're going to be talking to a bunch of like the most qualified people, many anthropic investors, many of the folks who are underwriting the IPO. So be sure to tune in next Tuesday and Wednesday because we have an all time lineup to cover this IPO and understand what's happening both with the AI trade and Anthropic specifically. So it should be a really, really great week of coverage.

But of course, then we have to lock in for GTA because it is historic moment. First question for Strauss Zelnick, when is GTA seven dropping? That's my first point.

What have

you done for me...

We're not even giving you... We're not even giving you one hour to savor the moment.

No. What have you done for me lately? Give me GTA seven. I want a timeline. Lock it in.

Promise Commit

to a launch date.

Make some commitments.

Well, here we go. Amazon unveils a flying home security drone. Okay. Ring Robotics has two autonomous security devices, a $250 flying camera for homes and a $1,000 roaming robot for businesses. The Ring DroneCam flies preset routes indoors, automatically investigates triggered alarms, and records two ks video.

Its AI pilot maps rooms and navigates around obstacles. The rover cam autonomously patrols businesses, investigates disturbances, and records up to four k video. I think this is quite cool. We have a security system in the office. Yeah.

The cameras are at like very specific angles. Yeah. It's not... I would love for a drone to launch when there's an intrusion and...

Ship with kamikaze mode? Is that an add on that you have to subscribe to? Or do you have to use a zero day and what... In a model to root it and then side load your own operating system?

Also, should just come they with should just come as a swarm. So you should be able to get thousands of these drones.

You probably can. You can just get a whole bunch of these.

All coordinate because... Yeah. Once you unlock kamikaze mode, you don't wanna be limited to... You don't wanna be like, you know, just have one shot.

So very cool. I think this will be maybe successful. I don't understand why it's indoors. Don't you want outdoor patrols, outdoor security? Don't you want the drone on your roof docked and then kind of like flying a little patrol every once in a while based on cameras?

Like, it feels like why are you waiting till there's an intruder inside to like launch this little drone that can just swat swat away?

No. I mean I mean, it's like if you get an alert that Yeah. That there's been some sort of intrusion, I think default assumption should be that it's not actually... Like if if you have a home security system

Sure.

Over the course of a decade Yeah. You're gonna get a bunch of notifications that are an intrusion probably, hopefully, ninety nine percent of them are are like, you know, somebody Yeah. Came home and like that that lives there, didn't know it was armed and you know, whatever. Right? Yeah.

So there's gonna be a lot of false positives. Yeah. And so the drone is how you quickly determine is this a false positive Yeah. Or not without having like... I'd rather

have a Indoor cameras.

I'd rather have a drone than like 20 indoor cameras.

Yeah. You don't want indoor cameras. When Nat Friedman said that he had a series of indoor cameras and he was able to get his open claw to like kind of bully him into drinking water. You remember that? The Stripe Sessions.

I was like, that's... It's very cool that he's such an early adopter of this, but I don't know if I want a bunch of indoor cameras. So having the ability to snap your fingers, put a camera anywhere in your house without needing to install always on cameras that immediately become worse spyware than your than your smart TV potentially, that is very cool. But I wanna see what these things can do outside. Can these things run around outside?

Can you trick them into thinking they're inside when they're actually outside? Because the outdoor patrol seems like the the thing to get. But maybe maybe an opportunity for a start up, maybe...

Sort of contrast between these two things. Like the drone seems kind of like sinister, it's the Matrix, you know, we're living in a sort of a dark sci fi future. And then the little home robot is like very WALL E coded.

Yeah.

And it's like maybe you could have made the drone like a little bit more friendly.

Oh, I would have gone the other way. Made the rolling robot a little bit more intimidating. Threw some barbed wire on that thing.

The crazy thing is like how do you... This product launching right now

Yeah.

Is it's tough timing Why? Because of all the new cyber security risks.

Oh, yeah. Somebody takes it over.

I wouldn't even have thought twice about it. Totally. Call it like six, twelve months ago. Yeah. Whereas now I'm like, do I want something that can take off in my home and Yeah.

Do it.

Fly around. Yeah. Or at the very least like, you gotta really really really trust Ring.

Yeah. Totally. And Amazon. Which is, you know, in the top

five most trusted They can spend more on cybersecurity for this product than any other Totally. Public

security company. But yeah, it is it is still like... There's always like a human...

But I but I so so......

Accidentally gave a password away

or something. With the with the ADT acquisition

Mhmm.

Like I expect them to introduce a bunch of products like this.

Yeah.

And that's what I want out of these security companies. I've talked a lot about the like the pitch for humanoids as like home security Yeah. Deterrent product. I think it's gonna be far easier to have a humanoid be disruptive to a home intrusion than it is for a humanoid to do laundry. Fold laundry well or do the dishes.

Right?

Yeah.

So bullish on on this category.

Yeah. No. It's cool to see that Ring is like still innovating even inside of Amazon. It seems like they're making good progress. Let me tell you about Shopify.

Shopify is a commerce platform that grows with your business lets you sell in seconds online, in store, on mobile, on social, on marketplaces and now with AI agents. Fireworks has been hacked.

Inference Yeah. Platform hacks. Obviously, Railway has been going through it. Fireworks has been hacked. OpenCode was another that was dealing with a bunch of cyber issues.

Basically, a month ago

Yeah.

Various groups decided like we are going after the inference providers. Like, one, you can potentially like get access to compute. Bank of Yeah, you can get access to compute, but you can also exfiltrate weights. And this fireworks incident is the first example where I think they were not able to exfiltrate all the weights. And again, Fireworks is hosting open models that have been host trained by companies like Windows and models, too.

There's a lot of reasons why people would want those. But fortunately, seems like they only got some small percentage of the weights and Seems like no caught it the same day. So again, I I kind of expect it to be kind of like rove... Like the... They're sort of like roving efforts where like it's...

We're going after startup, like, up inference providers Yeah. And then it'll probably go to another Yeah. Category of company.

Yeah. It seems like... I mean, Ilya Sutskever sort of predicted this back in September. He said, Neo Clouds have limited cyber security. Next time agents successfully go rogue, they'll they'll try taking over a Neo Cloud to run more copies.

This is bad. Thus, Neo Cloud should greatly strengthen their cyber security and every company with strong cyber model should help with that. Raul said, never wrong, just early. And, yeah, this isn't quite that because I don't think they got access to all the compute, but they stole a lot of data, stole a lot of weights, and they were not able to, like, they were not able to fully take control of Neo Cloud. I mean, yeah.

Also, I think Ilya here is talking about like rogue agents. Rogue agents. And this was not... Don't think we believe that this But we're like we're we're like, you know, he's he's he's like, this is a proof point in the step in the chain that that an inference provider was able to be hacked is a is a novel and new new problem. Anyway, what do you think of hobbies?

Wait. Actually, we have Chris Miller. Let's bring Chris in. We can can have our hobby debate later. That's much less important than Chris Miller.

Chris. Are Great to

have you back on. It's been too long.

Thanks for having me.

Thank you so much for coming on. We were just about to debate whether or not you should have hobbies because that was taking over the timeline. But there are much more important things in the news.

The best hobby this week would have been spending the last decade obsessing over global... Semiconductor supply chains. Yeah.

I think you need help.

So thanks for Yeah. Thanks for getting a head

How have you how have you been processing the news? Is it as is it as vague what actually happened as it is to you as it is to us? Because it feels like every day it's getting worse but there's also more tentacles. There's like seven different points of contention right now. How have you been processing the overall story as it's been developing over the last few days?

Yeah. I mean, I think with with scandals like this, we should expect they have a long way to run. You find out new things as the investigation deepens. I I think already though for for NVIDIA, the damage is clear. I I think the other damage is in the Trump administration which let this go on.

Now, it seems like for a year Yeah. Without notifying anyone that there was a Chinese spy involved with the CEO of one of the most valuable companies in The United States Yeah. Which is a puzzle as to why that happened.

Yeah. Yeah. That's very odd. So in terms of... One thing that I've been really interested in is like we were, you know, obviously it's a it's an American tragedy.

It is a disaster. It is a crisis for NVIDIA. At the same time, it feels like it's a it's a victory for the CCP. It's a victory for the spying that they wanted to do. They were successful in many ways.

We don't know how successful. We don't know if they were had access to devices and networks in NVIDIA if they were It's like steel designs.

So much more a mixed bag. Like in some ways you lost... You you've lost... That your greatest ally, that wants to sell as many as many GPUs as he possibly can Mhmm. China.

He doesn't wanna lose the Chinese market. He knows they're gonna still build their own independent supply chain anywhere. And you lost somebody who was like the most important person in terms of financing the global AI build out was had clearly aligned interest with you.

Yeah. By default. Do nothing all

the same aligned not total alignment but enough alignment that he Yeah. Was gonna do everything in his power. And my big question is like, why did Nvidia not start this clean up a year ago? Mhmm. Like it seems like they they hired the the the sort of Heller.

ER firm Heller. So so clearly they they they assume that that this would go public at some point. But it feels like they could have reduced the damage by, like, just coming out in... Being the ones that that led with this and they would have controlled a lot more of the narrative. Whereas now, I'm sitting here being like, I expect to get more bad news about NVIDIA every single day for the next six months.

And like, I don't, you know, I just don't know where the bottom is.

Yeah. I I think I think that all sounds right. And I I I think if you, you know, look at the response in Washington, it's gonna be to put tougher controls on NVIDIA Mhmm. And tougher controls on the Trump administration to make them enforce the rules that are actually on the book. And and so it's an interesting question for China.

Are the second order effects negative rather than positive? If if you can no longer smuggle as many chips in through Southeast Asia or get access to as many data centers that are in turn training and deploying Chinese models. It'll be an important question to see what, if anything, China did learn as a result of this. Right now, too soon to tell. Maybe we'll never be certain.

Yeah. But if the Chinese firms can't get access to Southeast Asia, that's a big deal for them.

Yeah. The other thing is, like, NVIDIA, as they navigate through, like, communicating through this crisis, they can't, in my view, take a stance on either side without looking, like bad. Like if they say like, alright, we're gonna change our ways, it looks like there there were people that were effectively like compromised. Right? Mhmm.

And if they just like continue the status quo, it's like, okay, also. You know, it's like there's no winning from here either direction you take. And it just feels like, again for me when you look at Jensen, it seemingly was doing like two to three public speaking events a day. Like Yeah. 365 a year.

I don't know when the guy like Got the takes a

day off. Yeah.

You know? Yeah.

I mean, I I think it I think it is it is sad. It's it's kind of tragic, to to see what happened. I I I think if you're in video, though, you've you've got to change your relationship with with Washington. And it's been super adversarial... Positive with the Trump administration, adversarial with congress over the last eighteen months, and now Congress is in the driver's seat on this issue.

They're gonna investigate both NVIDIA and the Trump administration as to how this happened. And I think NVIDIA needs a big reset with Congress. Otherwise, investigations are gonna keep rolling.

Yeah. Talk about the the difference in in NVIDIA's perception on the West Coast versus in Washington. Because on the West Coast, NVIDIA's just going around being like, you get a $100,000,000,000, you get 500,000,000, you get 2,000,000,000, you know. This NeoLab gets 5,000,000,000, this NeoLab gets, you know, 3,000,000,000, this inference provider gets a billion, whatever. Like they're just like giving money to everyone and through that are like very popular.

Right? And even you saw this yes, you know, the last couple days, a lot of people defending... Going out like defending Jensen just because he is, know, one, a friend to many people on the West Coast, but also because he's funding all of their companies and portfolio companies and things like that. Whereas like everyone on Washington that I know is like, this company made so many enemies over the last couple years that like the balance of power has shifted like very much like you said to Washington and nobody is exactly seemingly wants to give them the benefit of the doubt on anything.

Yeah. I just look at, you know, who's sponsoring legislation in congress that's going to restrict NVIDIA. You got one piece of legislation that has senator Jim Banks, the most conservative Republicans from Indiana, and senator Elizabeth Warren They agree on nothing other than regulating NVIDIA, and that just shows the the cross party agreement on putting more restrictions on AI chip sales and in pressuring the Trump administration to enforce the current rules. And I think for a long time NVIDIA thought it could fight that, And now it's gonna be very hard to fight that because the the argument that NVIDIA would make was was that, you know, these customers in Southeast Asia are just normal commercial customers. Yeah.

And you can't make that argument. One of them is run by a spy.

Do do you have an... Do you have a a sense of why diversion needs to go... Like the GPUs physically need to get to China? Like why can't Baidu just use a data center that's in Malaysia or Singapore that's set up with NVIDIA GPUs and just do all the training and inference over the wire.

Well, are doing that. Think you have to assume that they have a bunch of the most advanced chips in China and they're also buying as much compute as they possibly can that's hosted in Southeast Asia. Some of it's I'm sure hosted in America. It seems like there's going to be a lot of new regulation around not being able to just buy cloud services if you're... Again, so much of the stuff was like every...

The market's been moving so quickly that there's a bunch of these little edge cases that are allowing their labs to develop advanced models even on the data side. Like I would expect now there to be probably enough momentum to sort of regulate like can American data companies turn around and sell the same data that they're selling to, or the same type of data that they're selling to the labs to Chinese companies? Like, the whole the whole landscape, I think, is going to shift.

Mhmm.

No. I I think that's right. And I think one of the ironies though is that this is actually a small share of video revenue. Like, if you look at the best estimates of chips smuggled into China physically plus chips in Southeast Asian data centers, you're talking a couple percentage points of video revenue for both.

Yeah.

It's signing.

It truly is one of the worst like own goals or like Unforced unforced errors because yeah. Like truly, I mean, you know, Jensen has built a fantastic business but it does feel like the last three years you could do nothing and win. You could Yeah. You could even go out there and say, look, yeah, the TPU is great, Tranium is great, Intel is great, you can buy from them, ours is good. Do whatever you want.

Don't even go on the offensive domestically. Admit that it's an oligopoly. I am a car and you'd still be a trillionaire. Like you'd still be a trillion dollar company. You would be extremely successful.

But it was like you gotta do more. You gotta win. It's some some other motivation there to not just like you you know, Apple has not chased the the AI, well, we gotta train a foundation model. They haven't... They they've stuck to their core and it's been fine and they are the most valuable company in the world now and it feels like like you could you could say, oh yeah, like we're, you know, I'm I'm Nvidia.

I'm going to make incredible cash flow over the next couple of years. I'm I'm actually not going to travel at all. I'm not going to leave The United States ever. I'm not going to take a call with somebody on the other side of the Pacific because who cares? I'm making so much money.

It's great. I don't know.

Well, think that's going to be the new policy. I think it's got to be something like that. Refocus in The US market. That's where the money is anyway. And Southeast Asia and China are going to be written off.

Yeah. Yeah. I mean, I know a lot of the... Not just the AI doomers but also safety focused people, EAs, all sorts of people in the AI landscape, even more optimistic people were always upset about any GPUs making it across The Pacific because they were saying like, there's enough demand here. We'll buy them.

Are so many American companies that would love to buy those at the full price. And so you're chasing this revenue diversification the Pacific for not even that much of a financial gain, not just on the revenue scale but also what it would actually do to the margins because you could still keep the prices high. One interesting question is like how much of that philosophy is a legacy of the the global capitalist mindset of the nineties, the two thousands like throughout the birth of Nvidia. I was trying to sort of steel man that philosophy because it's very out of vogue right now when we are in the era of tariffs and protectionism and geopolitical sort of nationalism America First. But also there's a whole bunch of other political groups that are in favor of restricting AI to China.

And but if you go back to the nineties, it feels like that selling internationally, expanding your business globally is something you would get like a pat on the back for as a business leader in America. Does that track with your understanding of how the the global political business landscape has evolved?

Yeah. I I think the way I would frame it is that most chip companies came to terms with the fact that over the last five or ten years, governments were going have a big say in the future of the industry. Sure. And NVIDIA tried to push against that.

Yeah.

NVIDIA wanted to stop that from happening. It thought it could tell Washington that actually its chips weren't strategically important. And now we've got not only evidence that Washington's gonna make its voice heard, that China believes they're so important that they're worth sending a spy to gather information on. Yeah. And I think this is this is going be the final data point that forces NVIDIA to realize that everyone else around them thinks that their chips are strategically significant.

Even if they don't think that, governments are going to force that upon them.

It was always such a hard argument to make too Yeah. From their side, which is that like, yes, AI is gonna change everything and and we need to rally trillions of dollars of of capital as a country and as the West to set up all this infrastructure because we are going to solve all the major challenges of humanities. But also, this technology, this magical technology is not relevant to national security and we should just sell it to everyone. Was like, it was always an impossible Yeah. Argument to make and I don't think they they they're sort of like you said forced into not Yeah.

Being able to make that argument anymore.

Can you give us a quick tour of the other American semiconductor companies and their stances on China? Because Google tried to go to China. They tried to bring Google search to China. Unsuccessful. They were asked to censor it.

They never really developed a business in China. I don't imagine that they're selling TPUs to China. I'd imagine that they don't even take meetings with anyone that looks like they could be diverting TPUs to China, which would be another big issue. Amazon probably similar. Even though Amazon sources a lot products from China, they're probably not selling stuff.

Intel, is that a more complicated situation because ultimately Intel chips go into IoT devices, cars, all sorts of different things? Take me through some of the other landscape and the other postures that we've seen from the semiconductor industry.

Yeah. I mean, I think Intel's certainly a more complicated case. I I would say most chip companies want to sell their products around the world. Sure. Fair enough.

That's their job. Their job is to sell. I think the difference is that most chip companies would have gone to the US government and said, hey, you know, we have this economic interest in selling to China.

Yep.

Or, hey, our chips aren't actually that good. Let them sell to China. Sure. Whereas NVIDIA said, actually, no, these aren't strategically important. You're misunderstanding The US China relationship.

It's actually not about AI competition. Mhmm. Going to the core of what both Washington and Beijing actually think the competition's about. And so it's this clash of worldview that made NVIDIA really stand out. And I Yeah.

Think that's what's gonna have to change.

Yeah. Last question for me. On the in America, is overwhelmingly we are overwhelmingly focused on AI. We are fully awake. ASI, RSI, these discussions are all over the place from the New York Times to the Dorukesh Patel podcast like it's What is the status quo in China?

Have they woken up? Are they taking this really seriously? Is this evidence that they take it so seriously that they would deploy us by potentially? Or or is there is there still a little bit of they haven't fully shifted into gear? You know, I think

that's a a key question in the Chinese system. It's not monolithic. On the one hand, you've got spies deployed to track NVIDIA. That's an important point. The other hand, you know, recent reporting this week that you've got NVIDIA h two hundreds stuck in customs in Hong Kong Mhmm.

Purchased by Chinese firms, but the Chinese won't actually let them into data centers.

Interesting.

Which you wouldn't do if you were super AGI pilled. Yeah. So I think there's still a debate in the Chinese system about just what approach to take on on this topic.

Yeah. It's probably longer time...

Last question. I know we're out of time. What story do you think is being overlooked now that this will dominate sort of all of the headlines for months to come?

The second order impact on on data centers outside of China serving Chinese customers. Mhmm. It's both Southeast Asian firms, but also you look at Oracle, which has ByteDance as a huge customer. Sure. I think that's gonna be in focus as well as this investigation rolls on.

Yeah. No. That makes a ton of sense. Well, thank you so much for taking the time to come chat with us.

Yeah. I really appreciate it.

Have a great

rest Busier your than ever. Busier. The further. Thanks so much, Chris. Talk to you.

Goodbye.

Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And up next, have Ed Bolian from Bin Wiki, the founder and CEO.

His YouTube channel is also VinWiki. Ed, how are you doing? Palate cleanser. I think that's

very well. How are you all?

We've been

We're great. We talk about a lot of AI. We also talk about a lot of cars on this show. Very excited to have you on here for the first time. Thank you so much for joining.

We'd love to start with just a little bit of your backstory for those who are watching who might not be familiar. Can you give us the high level summary of the VinWiki business but also the fantastic Cannonball records that you've set? Just kind of take us through some of the career.

By all means. Yes. I... We started VIN with you about ten years ago, but prior to that, I was director of sales at Lamborghini Atlanta. Before that, I had started an exotic car rental company out of my dorm room at Georgia Tech with some stated income loans back before the financial crisis.

And so I've had a long journey in the world of interesting cars and interesting things to do with them. Back in 2013, a co driver and I set the Cannonball Run record. So there was a real Cannonball Run of the nineteen seventies that inspired the 1981 Burt Reynolds movie, but there are still crazy people like me that occasionally go out and, see how fast it can be done. And so we did it in twenty eight hours fifty minutes back in 2013. And then through COVID, that was able to be massively advanced.

And so now the record is twenty five hours thirty nine minutes. It seems like it's quite an advantage if the cops aren't working and nobody else is commuting on the road. But now we... At VINWiki, we tell car stories and kind of have tried tried to change the way that the world looks at vehicle history reporting and automotive history to try to empower people to immortalize the best stories that they can about their cars.

Is... Are we at the end of the cannonball era? Will we never see a new record? Because I... Is...

COVID was so unique in that there were no no trucks, no no cops on the roads. But at the same time, like

Well, it's definitely

a real are getting faster.

It's... It presents a new risk, which is that car enthusiasts might try to start a global pandemic to create the

Yes. To create

the environment that they could beat the record.

Yes. Yes. That's a good conspiracy theory.

There you go. Whatever means necessary. You know, it's interesting because it may have, you know, sufficiently flipped the sandbox over that no one decides to go out and try it again. Mhmm. Certainly, under the current technological paradigm, it is problematic to really set out a plan that gives you a really high likelihood of success against that mark to beat.

One thing that's been amazing in the, you know, years since 2013 when we set the record is that the enthusiasm for Cannonball has been made manifest in a lot of different ways. So we've had electric car records and self driving records and truck records and motorcycle records and three wheeled records and coast to coast to coast records and southern route records. And so it's become more interesting for people to just find their own way to sort of have their cannonball record. That doesn't have to be averaging a 110 miles an hour across the country, but it can be their own husband and wife record or, you know, whatever they wanna do. And so I've enjoyed that as well to see it all come back.

Yeah. Isn't there one I mean, there's there's forever gonna be opportunities to have the most niche Yeah. Cannonball.

Well, isn't there wasn't there a a Cannonball that was I think a 100 horsepower?

No. I know what we do. I know what we do, John. Yeah. We do the the tour bus Cannonball record.

Tour bus. And we do the show the whole time

Oh, I like with the crew.

Live the

whole thing.

Yeah. We did do a sub 100 horsepower race

Yeah.

Where everybody had to show up and that we would dyno the cars and assess penalties for those that went beyond it. I ended up just renting a Corolla for it because that was the easiest way to get a 100 horsepower car up in White Plains. And... But it was... It...

A lot of fun. To be honest, I've done it about 10 times now. Most of them not, you know, in earnest trying to set a record, just going out as crazy as we can. A couple years ago, we did it in a 1976 Rolls Royce dressed as chicks like Jamie Farr and had a blast. You know?

It's a very very different pace, but a whole lot of fun....

You're like you rented a Corolla. They're like, yeah, just bring it back with a full tank.

Tell everyone what the punishment was for cars that dynoed over a 100 horsepower.

There was... There were several different ones. One was that you had to assemble like a thousand piece puzzle and glue it to the hood of your car, which essentially meant that you didn't get to sleep the night before. You had to do the... Was either a ballast, so you had to carry a lot of weight, like bags of cement or keep a lobster alive since we were starting by the ocean.

I don't... No one chose the lobster, but there was definitely some cement transported or sandbags.

Yeah. Yeah. That's great. And we... When when you did the Cannonball, did you have a a spotter plane or spotter cars?

Like, what was the actual team? Because you said you had a co driver, but was it just two people in the car or three? And then were there other people involved? I I know that there's, like, sometimes whole teams that go after the records.

Correct. And the most recent record involved 35 spotter cars driving at pace with the organizers of the run, the drivers agreeing to pay tickets for them if they get stopped.

Yeah.

So I started planning this in high school, at least ideologically, about trying to find the right recipe to do it. And the record at that point, this being 2004, had not been advanced since 1983. Mhmm. And so while I was sort of thinking through this, two efforts were made, one by Alex Roy and Dave Maher in 2006 in a BMW M5 that did involve a spotter plane. That's right.

I did not have any friends with airplanes, and so none of them were volunteering to fly ahead and Yeah. Let me know what was up ahead. And so... And then Richard Rawlings and Dennis Collins from Gas Monkey Garage did it in an o seven and a 550 Maranello. And so I had a couple of guys that agreed to drive, like, hours ahead and let me know if there was any new construction or new hazards that I might run into.

But no, nothing of the sort that in terms of planes or people ready to, you know, go to jail for me.

Yeah. Switching gears to to car collecting. I mean, interested in the story of the LP six forty but also VIN Wiki and how those two things fit together. How much of your choice in collection is driven by what you discover when you're doing VIN Wiki work which you can kind of just describe and explain some of the realizations that you have that actually impact the market versus how much of it is just you like what you like and sometimes you get lucky.

You know, that really is it. You have to start with something that you really, really like. Whenever you're thinking about something that might be defined as like an alternative investment class

Yeah.

It's it's not something that you set out like Dave Ramsey style, like you should go get some gigantic loans for rare exotic cars and just see what happens. One thing that I learned early on while I was selling cars is that the ones that... The guys that seem to be sort of beating the game were the ones that were buying cars further along a depreciation curve where stability was a little bit more likely. And the way I used to phrase it is that I tried to look like I won the lottery ten years ago. Yeah.

Because with rare and interesting cars, generally, there will be some initial depreciation as people are trying to buy the newest, latest, greatest, biggest, baddest, whatever. But I wanted to try to avoid depreciation. I call that my greatest allergy is automotive depreciation. And so I was looking for cars that seemed rare, but also seemed like they were at a point where they were a lot more stable and potentially starting to go back up, which it was still relatively unheard of, you know, in the early, you know, 2009, two thousand fifteens when I was selling cars every day. And so I loved the Lamborghini Murcielago since it came out.

I just thought it was the coolest car. I loved the heritage and lineage of the v 12 Lamborghinis, especially the manual transmission cars. And I learned that they were a lot more rare than really anybody seemed to know. As manufacture... Manufacturers started to bring out these sequential manual paddle shift cars, the thought was that it was about a 90% take rate.

But it turned out, now we've now learned that it was about 99%. So for the Ferraris and Lamborghinis where there was a manual versus a paddle shift option, almost all of them were paddles. And so that made them much more rare than, you know, we expected. And usually rare just means nobody bought it when they were new. And that's true because back then, the only way that they could make cars faster was to make the transmissions work better.

And so now I realize that they were rare and that's a lot of the ideology around the VINWiki app is how do we document rarity and significance in cars that might eventually, you know, have something to do with the value.

Is manufacturer data getting more reliable over time? Because it feels like there were that like that 90 to 99% discovery, that was unique. That's a gold mine. But is that also going to happen in a 2026 car run that where, you know, some manufacturer, they're vague about it or they give incorrect information and then ten years down the line, we discover through chronicling the VINs that there's some oddity with some spec that's extremely limited.

There is some chance that there will just be something that's overlooked as being important. Lamborghini didn't think it mattered for anybody to know how many of specific cars they were doing.

Yeah.

In the same way that, like, Porsche wouldn't necessarily think about how it... How much it matters of how many they build of a certain paint to sample color

Mhmm.

Or something like that. Those are the types of granular data points that might be uncovered later down the road. Sure. Because it is... There is a lot more documentation now.

The companies have grown up through all of the different ways that they have combined corporately, and so it's a little bit less likely that that sort of thing will happen. And the cars are a little bit more homogeneous Mhmm. You know, with some exceptions being like nine eleven's range from $150 up to $400. And they... You know, there's different permutations of how they're configured and obviously the profitability changes alongside that.

Yeah. How are you thinking about Ferrari's depreciation curve, their their changing strategy? Because there's sort of two lenses. Like, we've seen the run of, the four thirty and many other from that era, the sort of mid two thousands onward cars skyrocket in value at the same time when the SF90 has collapsed. But I can't help feeling like in ten, twenty years, there might be a new class of 30, 40 year old guys who are like, Oh, the SF90 is when it was the best.

And how much of this is just a generational thing versus a structural change in the way Ferrari is producing and selling cars?

So you're exactly right that the generational aspect is huge. And, you know, right now, anything built pre-nineteen eighty is either going down or at least flat as a best case scenario, even the most significant of prewar cars and stuff that has always been kind of the headline of auctions. And that's because most of the people that love those cars growing up have already made the decision about whether or not they're going to engage there as collectors. And so today, we're seeing the people that grew up with the posters on their cars of the iconic eighties, nineties, and two thousands cars really coming into a position where they can engage in that marketplace. Yeah.

And that is what's driving us. That's why the four thirties, as you said, are starting to go up and why the s f 90 just isn't there yet. It isn't old enough yet. And we just brought out the eight four nine. So what what we're seeing with Ferrari is always gonna be kind of on the cutting edge of what the collector hobby is going to do next.

Yeah. Do you think there could be a sort of a lost generation? I'm thinking like, you know, the 2015 to 2025 where like no one ends up, you know, really wanting to to collect these cars because I have felt like in the last year, like the the manufacturers have like all got the message that they've like went through this era of making heavier and heavier cars with

Hybrids.

Hybrids and and basically like every... It was like the most infuriating era even as a casual car enthusiast where you're like no one is listening to my like requests, right? And then now they're getting points because at least I'm giving them points because it's like, okay, like well you didn't make like a true like gated manual but you made something that feels like it, right?

But to ground the 2015 era, what are you talking about like Herc?

Well, just I think like the SF90 is like using that as like the sort of the...

Okay. So yeah, more to...

Like, yeah, 2020s feels like it's sort of sort of peak of this of like not listening and obviously dealing with the pressure from various regulators. But now now with Mate being like, alright, we're in our we're in our... Effectively saying we're in our courts crisis era, we need to play our own game. It feels like it feels like we're headed back to... The future looks more like the past which I think is like kind of good and bad.

Like the the good is that like it feels like there's no more innovation. Right? It's just like figure out how to make cars like we used to make cars.

Look the Mission S. I mean, it's like a nod to that after a lot of, hey, maybe it's going be all electric.

Yeah. The Mitts that that day, that that Thursday felt like monumental On road. Because of the the fork in the road. You had like this kind of kind of like performance from Tesla and and a very different direction plus like Mission S, which is like, hey, we're just gonna make the thing that you've always wanted.

Yeah. Right.

Yeah. We're listening. It took us a while, but we are. And I think you're right that we may have this sort of alienated generation of cars mostly based on hybrid long term reliability concerns that we're just gonna run into cars that are a lot less functional at some point than we'd hoped for, and there may or may not be engineering workarounds to make them into more drivable or usable cars at that point. And, you know, sometimes that's a very healthy thing for the market at large because when the goalpost doesn't move aspirationally, when there's no new cars that you have to dream about or chase, it allows you to focus on the cars that are more genuinely or earnestly sought after, and the the competition there does drive up prices.

And so sometimes having that lost generation, it kind of emboldens the enthusiasm that is made manifest in, you know, the collector's attitude towards these cars. And so now some of these things like an electronic gated manual transmission, they... It may work and it may succeed, or it may come off as a little bit patronizing that, oh, here's that manual thing you asked for. Yeah. It really just sits in the cup holder and you get to shake it around a little bit and Yeah.

To make room room noises. The same way that, you know, speakers making exhaust noises Yeah.

That way. Yeah. The end state is just you're in a driving simulator and and and the car is driving itself wherever it wants to go. You make a good point about hybrid systems maybe being unreliable but it's call... It's kind of fallen on deaf ears from the guy who drive daily drives a Bugatti Veyron.

So how have you squared those two? Because I thought that car was the king of unreliability but maybe I have it wrong. How has it actually been daily driving a...

Well the interesting thing is like it's so daunting to think about personally maintaining like a Ferrari hybrid system.

Sure.

Whereas like these other these other vehicles where it's like, yeah, they're fundamentally like just a mechanical Okay.

Machine with more limited electronics. How Is you see it?

Yeah. There's not really a monster in the closet with a Bugatti of something that's like going to bite you one day inevitably. There's plenty of things that are very, very proprietary and very, very expensive if they go wrong.

Yeah.

But fortunately, with all cars, the more you drive them, the more reliable they are, regardless of how high strung they are, potentially even more so if they're super high strung. So my 2012 Bugatti Veron that had not been well cared for prior to my ownership by a variety of rappers and entertainers and things like that who owned it.

Little Uzi Veron.

It's honestly been great for about 15,000 miles now.

You've you've put 15,000 miles on it already? Had no idea

it Yeah. Was that

Two years.

Wow. And and is is most of that rallies and and and actually driving it or are you are you genuinely daily driving it?

It is more big trips.

Okay.

Yeah. It's a it's a lot to take it somewhere just because you don't get anywhere fast, everybody wants to stop and talk about it. I enjoy that too.

Yeah.

But like, you you have to really plan when you're going to get somewhere based on the likely obstacles in the road to... On that journey. So I drive it every chance I get. I give anybody a ride that really It's wants like... It's...

To me, that's what makes it all fun. That's what perpetuates the hobby anyway. And, you know, generally, attitude with car buying is that I'll buy the worst examples of the coolest cars on Earth. And in those cases, because kind of the cloud of their backstory becomes more difficult or problematic, you know, in terms of the storyline, you're sort of redeeming the value of the car by using it without calamity. So if the car is not expected to be in good shape, but then you put 5,000 miles on it in a year, generally the audience is gonna say, okay, well, this thing's probably okay.

We don't need to worry that much. We can trust the car rather than worry about the backstory. And so, you know, it's it's easy to get scared off by that, but with... But it's also pretty easy to overcome it.

Yeah. I I I love buying the the the worst example of a great car looking like you won the lottery ten years ago. These are hilarious phrases and ways to think about it. But how much of that goes into the spec? Do you do you have do you have particular opinions about color and interior?

Red over red is a particular choice. Actually leads was

not my choice but...

Yeah. But like does that just not factor into it or does it actually just add to the lore and it's just even wilder so you're going for it? Like how do you think about that the aesthetic piece of it? Because Bugatti can be relatively understated when it's spec'd a certain way. Not yours.

But it's No, it's fine. But it's it's almost it's almost more fun that way and that's what the point is of these vehicles.

Yeah. You know, you don't get to go to the used car factory and spec out exactly your dream every time. And Yeah. So I do wind up with some pretty wildly specced cars. This car certainly being a key example of that.

It was actually specced by Bugatti. It was the one they showed off at the Frankfurt Motor Show back in 2011. So red over red with red wheels was a thing.

Okay.

And so, yeah, it's... I wouldn't expect one that way, but it it does work really well for YouTube. The thumbnails work great. The contrast is nice and... Totally.

But the cops do not miss it.

Telling them.

Well, the funny thing the funny thing is, like, I just... I think that just like color color matching interior to the body to the wheels is like starting to be really hot even Sure. In like you know I've seen it with with restomods Yeah. People that just like seek this out so. Yeah you kind of...

No no it's going back in vogue maybe you have to put

the early part of driving.

It's like this the skinny jeans.

What do you what do you think about the various manufacturer programs where you basically give the car back they'll reset the mileage to zero and then make the spec whatever you want it. It feels like it feels like great for the actual owner of the car and but potentially bad for for or or somewhat equalizing. Like it basically levels the playing field. I have a friend who was put a million you know bought a 09/18 put a million miles on it drove it like absolute crazy you know was actually dailying it all over Europe and then you know knows that he can just send it back and they'll reset the mileage to zero and they're gonna change the color and change the interior and it's like very very like honestly I think they're charging too little because the what the ultimate value of the car will be after that is like you have a basically nine eighteen with zero miles on the dash and the craziest spec.

Yeah. All refreshed. And

you get the privilege of seeing all the other specs before you spec yours again, which you didn't have if you ordered the car new. Yeah. I think you're right that that is certainly now in vogue and most of the manufacturers are offering some sort of a program to do so. Lamborghini is probably lagging the most in that regard, although they will, in theory, do whatever you want. Bugatti now will take any Veyron back, and it's about a million dollars for engine overhaul, paint, and interior.

But again, you can respec it to the moon and back if you so choose, and I think that is exciting. Courage ETs are the first one we saw like a a real ROI on that. Certainly, other nine elevens are following suit where you are... You'll spend $500 or a million dollars, and somehow you've doubled the value of your $3,000,000 car. So that to me is interesting, and I think it's driven a lot by the fact that they're not taking too many of them.

I think they've said that they've sold out the next three or five years of slots for those levels of recommissioning. And so it's relatively unheard of that you modify a car and make it more valuable. It doesn't matter if it's turbochargers or underglow or, you know, a factory repaint. Generally, it is seen as a detraction. But this seems, at least at the moment, as potentially not that case.

Now if they all get redone, then certainly the ones that remain original will be a thing. But your friend's attitude is exactly the right one to take. It is to say that I get to use my car completely and then I can go get it properly.

Get of jail free card. You know? Exactly. I actually think it's I think it's I think it's great because it just means more of these cars will just be on the road. Mhmm.

Like even even in, you know, we live in Southern California, there's like an incredible density of some of the coolest cars ever made and yet, I'll see, you know, thousands of like base Carreras before I see like one of these special cars on an average day on PCH, Even you on a Sunday when they should be all out and about, you know.

Yeah. And if it cures the anxiety of utilization, then it's ideal, right? Because it gives you the chance... Even without a reset, if it's just known that they're totally redone, that's one thing that I'm not crazy about Porsche's decision is the odometer reset because, I don't know, I'm always the guy that loves having a high mile odometer. Actually, you know, had driven my...

One of my Mercy's on a long, long trip choosing it against other cars because I knew that that miles would put it as the highest mileage one in the world. Yeah. And so I wouldn't want them to reset all my hard work if they,

you know...

Charge you back in 10 k for it. We won't

reset it for 10 Just roll it up. Give me an extra 100. Earned bonus miles this week.

How how do you feel about this new this new sort of wedgie angular aesthetic, the stainless steel? I'm thinking of like the Audi Nouveau Lari, the Jaguar type zero one, the...

Limited Cybertruck.

The ultra limited Cybertruck. You got to get that on VIN Wiki. There might be less than 79,000. It might be going up in value. But but put aside put aside the internals and I just want to hear you talk about what that design language.

Does it speak to you as someone who grew up and has owned many Lamborghinis and engaged with more aggressive designs? Is this a welcome step forward for design language or is it a detour along something that you are not interested in? How have you been dealing with that?

Well, the fortunate thing is that it really doesn't matter that much what we think of them despite how much we all like to comment on them because we're not usually the ones that are going sustain the values of these cars over time. Mhmm. The goal is to appeal to the inner 13 to 17 year old kid that is dreaming and reading every bit of media, watching every YouTube video. Sure. Those are the guys that you really want to make love the cars.

And if... As long as that happens, then the hobby and the enthusiasm sort of sustains. I love simplistic designs. You know, Lamborghini used to always have silhouettes that could be drawn with one line, and that means that the cars are much more easily recognizable in a sea of other cars that when one passes you on the highway, it makes a greater and more immediate impact. I like that a lot, and I think we are seeing more of that in these iconic silhouettes and a little bit more restrained design language, you kind of think the opposite of the Pagani retooling.

Right? There's still a demand for that sort of thing that's got eight different colors and four shades of carbon fiber and all of the customization that you could ever dream of. But sometimes, you know, taking up one extra piece of Johnny Depp jewelry off and, you know, leaving it maybe just slightly less done makes a lot of sense. And so when I find cars, like, immediately good looking, it's usually because they're not so overstyled and overthought that that is something that you can immediately visually at least digest.

Yeah. When the car market inevitably sees a correction, how do you think it'll be different than the sort of post 2021 era? Because in that case, you had people let's use the SF90 as another example, people spending a million dollars on an SF90 take, you know, basically instantly as it started correcting having like negative equity where they just owed, you know, they were... There were all these viral videos in maybe 2022 and 2023 where people are like, I gotta pay you $400 to give back my S90, you know, because they had like some super low interest rate and they financed like the whole thing. This time it's been interesting this run up that we've seen in so many cars is not really debt financed or some of it could be but it's people that are like I'm paying six, 7%, you know, and which which means that I think it will be, like, maybe less violent of a of a of a correction.

I don't I don't really know.

It might give us a softer landing if that's the case. The bigger reason that it would be a softer landing is that most of the debt available in cars that are ten or more years old and are sort of classified as collector cars is around 60 to 70% loan to value. So even in the event that there was a pretty meaningful contraction of value, most of that equity is not going to be or that, you know, the lien is going to be able to be satisfied regardless of those conditions. What I believe we're going to see is a stronger fork in the road between cars that are legitimately rare, collected for the right reasons versus just everything's for sale, everything's hot. The way that we saw, you know, made most clear in the twenty twenty one to 2023 zone, where we also had inventory shortages and ship shortages and people not able to spend money on travel and other things.

It was all just going into hobbies and cars and stuff like that. So at that point, most of the debt was heavily overleveraged because it was more so built on how somebody buys a new truck or a Toyota because they had to be able to loan 120% of MSRP for anyone to buy a new car. And so that sort of trickled up into the exotic car world and was more problematic. Now that really doesn't seem to be happening. We are seeing sort of cars get king made more or less now, where collectors will come in that may have almost no experience in the car hobby and are treating it much more as an asset class or an investment option.

And they'll come into dealers with just a gone in sixty seconds looking shopping list and say, want a nice one of everything, and there's just not nearly enough supply for that. So you combine that, whether it's their own money or out of a family office, sometimes they're representing private equity, but that's not super common in the space just yet. It would, you know, massively change it if we started to see the way that they've engaged in art and stuff like that. But better debt and more debt available under proper terms is helping, and then, of course, there's just a crazy transfer of generational wealth right now that is fueling the hobby.

Yeah. How how do you think the track only cars are going to evolve? It feels like there's... Willow Springs is going through a a renovation right now. There's like more track clubs and motorsports is can be very expensive on the tracks, but that's part of that k shape that you described.

And so there's a world where manufacturers lean into that more. Do you have any view on where non street legal vehicles from major manufacturers might go?

My hope is that it always looks like a Bugatti Bolide that is so obviously not road eligible that it allows them to do crazy stuff like Aston's car built for Ken Griffin that with a money no object, like what can you do? And I like it when on a very low volume manufacturers do that as kind of a thought exercise to say like, if we didn't have to worry about you not dying in a crash, we could do this. And if we didn't have to comply with any government's rules, we could do that. Yeah. And to me, when it's insane, it's at its best.

Yeah. When it's like a track version of a car that just sort of is, you know, has crazier aerodynamics and no ground clearance, nobody cares. But when it's nuts, that's awesome.

Yeah. Yeah. I'm I'm just wondering if if like the rise of self driving cars and speed cameras or something would take some of the energy out of like the fun that you can have with a road legal street car canyon carving on the weekend because it's you're 100% going to get a ticket or you're going get stuck behind someone that's, you know, in self driving mode or something. And so it pushes people to the tracks more but I don't know.

Well, That's top of mind for us. Our our, you know, my kids are all under five and I assume that they will never drive themselves on the road. Mhmm. And... But I will want to give them the experience of like the joy of driving sports cars.

And so, yeah. Track. Yeah. The beauty of it if you're just a pure enthusiast is like the car that looks like it costs $5,000,000 is like 600 k because you can only use it at the track. Oh, And so it feels like the value you get for a lot of these things ends up being like

It has a crazy

weight If you don't the care about flexing it at Cars and Coffee or in the grocery, you know, driving your, you know, with a bunch of aero to the grocery store, like, you're in a pretty good spot.

Exactly. Now we are seeing an issue, especially in The United States with these cars. The United States does not have a good program to, like, have an independent adjudicator decide that a car could be street legal the same way The UK always did. So, like, you know, especially with rally cars and things like that, you could put proper turn signals and proper lights and proper seat belts in them and go get the car MOT checked and and run it on the road because it was sort of approved for road use. In The US, we don't have a system like that in any state.

However, various states have much more relaxed rules about what constitutes street legal or what constitutes title eligibility. And so we're seeing a lot of these cars popping up that were built as race cars that have got titles. And, you know, that opens up a tremendous amount of legal liability and things like that. And so once again, that's why I prefer that they be nothing close to a road looking car because it it decreases the temptation,

so to speak. Yeah. Yeah. I've heard crazy stories about track only cars getting license plates and driving around because of just like an error at the DMV almost, like crazy stuff.

Right. Yeah. They just took in the MSO and they they gave them one even though they weren't supposed to and...

Yeah. When I when I was like......

Convenient to make it easier to transact them because you're not doing bill of sale only.

Yeah.

But we gotta use our powers for for good, not evil. Right?

Yeah. The funny thing is sitting in a Valkyrie, you know, with the with the engine so loud, you gotta wear you gotta wear ear protection. I'm like, this thing can go on the road? That feels so Which

a Valkyrie is showing displays, so it's not really supposed to go on the road. It can, 2,500 miles a year. Yeah. But it it still found another way, thanks to Bill Gates, around the rules.

That's right. That's right. Oh, that's good context. Well, this has been an absolute pleasure. Thank you so much for coming on the show.

Congrats with all the progress on...

Know, my final parting thought is now it's getting a lot faster to make video games. Somebody needs to make a like a really pure enthusiast version of of Cannonball Simulator. Oh. But it takes the full... It's like

full time.

The full amount of time. So you're driving at normal pace on the

Kind of exact like Microsoft Flight Simulator but for driving.

Yes. IRacing but for the cannonball. Somebody build it. Yeah. You got at least three people that will play it.

Three customers for you.

That'd be fantastic. That's right.

Sounds like a blast. Thank you guys so much for having me. Love your show.

Yeah. Great. To meet you, man.

Goodbye. Let me tell you about Codex. Codex is powerful workspace for getting work done with AI agents. 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, Justin Sealy from Medias, co founder and CEO, taking AI powered robots to defense factories.

Finally. Welcome to the show, Justin. How are you doing?

I'm good. How are you guys doing?

We're doing great.

Sorry we're running behind.

Give us the latest news.

What's up, guys? Just just announced today a $30,000,000 seed round with Kleiner Perkins and Kasinoa. So... And

coming out of stealth.

And coming out of stealth. When

did you actually start the company?

Mid February.

Okay. Pretty quick.

How do you how do you actually lay a wire harness with a robot? Is that like a robot arm or like Yeah. Great. Gantry or humanoid? What what what kind of robot are we talking

Yeah. So a quick background. Basically, we're a bunch of defense tech guys. And so one of the biggest problems is getting technology in defense tech is, like, 80% IT and security requirements. And then you gotta solve the problem as well.

And so, basically, the the big problem is, like, how do you use as much off the shelf stuff as possible? So we just take off the shelf robots as is. You you get all that security. You get all that safety from it versus building all the hardware from scratch. Then you get to go deploy much faster.

And to the answer on the wire harnessing, we try to take... If a wire harness takes fifty hours to build Mhmm. You basically walk through and you find all the pieces that you can automate so that the artisan can build more faster is the idea.

Okay. You're building the wire harness not necessarily installing. Because I think the... When when I think wire harness, the only like diagram that comes to mind is the Cybertruck's 48 volt architecture and you can kinda see it. It's like pretty neatly arranged but it still looks like a bunch of...

It looks like a nervous system or like a bunch of arteries throughout the vehicle. And that feels like a lot of very fine tuned pieces. But you're laying out the wire harness kind of on the floor and delivering it and then they go and install it into the the drone or the vehicle or whatever. Is that right?

You got it. So basically, like, build these things on large tables. They're called layup boards.

Yeah.

And there's just... Across The US and the world, there's hundreds of thousands of humans who sit there all day and manually It's build these incredibly manual. There's no automation that, like, really works for this. And so, you know, as the first starting point, like, of the places we can kind of speed up

Yeah.

The defense industrial base is is making these robots run, you know, when people don't want to work on, like, nights and weekends.

So then

you get more capacity out of existing, you know, these existing artisans.

Interesting. So how much how general do the AI robots need to be? Like how much of this can just be automation in the sense that you have maybe used AI to create a workflow that produces a wire harness at 99% reliability and then you can just run it as a manufacturing line consistently like the original Ford assembly line is AI in some sense. It's automated. There are machines.

But the machine always puts the windshield in the right place. You don't just say, hey, make a car, and then it just figures it out. How general do you want to be in the short term, medium term, long term?

Yes. So the difference between like deterministic and probabilistic

Yeah.

Robots, right? Yeah. So if you're going to build... Like, I was a factory engineer like ten plus years ago before I went to defense tech. The...

If you're going build like more than 10 to 20,000 of something, like you should just call ABB and build a factory line for it. Got it. Right? Like, you get deterministic every time. You get that weld perfect every time.

But the really nice thing is actually in the defense industrial base, we don't build hundreds of thousands of anything. We build like 100 F-thirty five's last So year and stuff like actually, VLAs and probabilistic is really good for the defense industrial base because that same robot needs to build ten and twenty different SKUs. Yeah. So that's where we're actually very bullish on this segment of the market because humans work at a workstation, and they might build part X today and then part Y tomorrow. And VLAs and kind of like general purpose robot arms are really good at switching.

There's no tool change

Yeah. Between So so I agree with the the... That makes sense in terms of meeting the market where it is. But how do you respond to the the proposal that maybe the future actually does look like just like 1,000,000 DJI style drones that are extremely commoditized and we are moving into a regime of high volume manufacturing. And yeah, maybe we'll keep making a couple f 30 fives every month.

But realistically, wars will be won and lost with high volume manufacturing capability around extremely standardized pieces of the supply chain.

I think it's kind of... You know, 20,050 something is like a good amount. It's still not hitting like mass production like you And see in other so for me, it's kind of like, let's go hit that number first. Think we built like a 100 and then we kind of work up there. But also, I think what you're seeing in Ukraine and others is like designs change pretty rapidly.

Okay. And so you need re coupling. Yeah. Yeah.

You can pivot between designs really fast.

Yeah.

And so that's also what's kind of changed is like probably, it's really nice. It's like, oh, you had a tool change design? Yeah. Or you retool the entire line to build that thing.

Yeah.

Now you can kinda segment out the pockets that VLAs can just, like... An operator can just go, like, retrain the robot for maybe 10 and then do a new training run, like, thinking that build the next thing quickly.

Yeah. Got it. Last question. 30,000,000 raised. How much of that is like general operational expenses versus actually acquiring robotic infrastructure, like effectively CapEx?

I imagine that you're able to finance it if you do that. But what is the mix of use of funds for the next twelve to eighteen months look like?

Yeah. Biggest thing is we we probably can pay for all of our CapEx through revenue.

So

we did 7 figures in revenue within the first six months and basically scaled very fast. So the idea is like, let's go do 8 figures, you know, in the next six months and let's just keep crushing it. But the biggest thing is like it's all acquiring AI talent and then scaling data. Sure. Like that's really good.

And so that's... Most of that's for scaling data. And we need like hyper specific data where you're actually doing technical tasks, and so you have to train operators to do that, be very proficient. It's not just general data collection. Mhmm.

You know? These are kind of artisans in their own way. And so scaling that while also getting that... You know, all the software and AI and robotics talent you need in one place is what you need the cash for.

That's awesome. Well, congrats on the fundraise. Congrats on coming out of Stealth. Yeah.

Great perspective and great progress. Yeah. Got to lead with the next time we'll be leading with the revenue. We'll hit the gongs for that. Great stuff, Justin.

A good... Talk to you soon. Goodbye.

Talk soon.

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And our next guest is here live with us in person. Good coming on the show. Please introduce yourself for everyone.

Absolutely. So Chris Kercher, the founder of Kercher Law. Yeah. Before that, I spent seventeen years at Quinn Emanuel.

Most feared law

feared law firm. Had a great run there. Represented Elon Musk with your previous guest, Spiro, in the Twitter case. Also represented him on his comp case. Yeah.

I I represented Citadel in the GameStop, you know, Memestock saga. I did a lot for Lehman Brothers and got very into AI a few years ago and saw, okay, this is pretty obvious how this can be used in the work we do. I started the AI and data analytics group at Quinn, and then in July, I thought, it's time to take this to the next level, take my talents to, I guess, Greenwich, Connecticut and and to build my own firm. But it's been a blast. I've got five lawyers down.

I actually have gifts for you guys.

Let me see.

Wow. So I made... Know, one of the things I made for my lawyers when they joined were baseball cards

Okay.

With their stats and Well, look your pictures. They're very efficient way. If you look at the back, you've got your Oh, is the Friend of the Firm series. The the lawyer series is slightly different, but wanted to give you Amazing.

I love the stats on the back. This is very, very detailed here.

Friend of the firm, let's go.

It even has my head on here. Correct. Nailed it.

Nice. Friends of the firm. I love it. Awesome. Thank you.

So do you feel like the, you know, you just kind of locked into the perfect timing with this where you built your... The beginning of your career, you know, landing all these super high profile cases at one of the most high profile firms and then AI comes along and now you can take the entrepreneurial route but not feel like you need to scale to thousands of people? Was that always like... For me, I love this business because we have 11 full time people. It's nice that we can all be under one small roof and I enjoy that.

But but how did you think about the right time to to take the entrepreneurial step?

Yeah. Great question. I mean, was having a blast at Quinn and and and working on the AI stuff there, but actually ended up teaching a a two week class at Stanford Law School last spring and, you know, wandering around the Bay Area where it's even more AI filled than New York where I'm from, I thought, okay, there's a real moment in time here. I'm 47, so when I was in college, the Internet was rolling out broadband and, you know, I kind of missed that pitch that the, you know, the dot com bust was my junior year or so. Went to law school, loved my legal career, but I thought when AI, you know, blew up, I'm like, I've seen this movie before.

Yeah.

And and I think I can take my now experience and expertise and use what I've learned about AI to build a new kind of firm. Mhmm. We don't need as many people. Yeah. We can have much tighter teams, much less coordination tax, especially in something like litigation where, you know, coordination is so critical.

And and so, you know, find the people who are also really AI pilled, who are in litigation

Mhmm.

Who who just wanna figure out how do we do this. Yeah. So it's been a blast.

What does the future of self representation look like? There there are examples of people going to small claims court and standing up in front of the judge and representing themselves. It's not recommended usually, but it does happen. Believe it's legal, I think, to do that. Is that right?

It is less than

1% of cases, less than point 1% of cases or something. But take me out into the future. Is it gonna be 10%? Because people are gonna be like, can you just use AI? Or do you think that's not gonna change anything?

I guess the way to think about it is the the marginal cost of actually initiating litigation has been dropped to near zero. Sure. Right? Before, you'd have to write a 30 page complaint or whatever and that was hard to do. Now the AI can do a serviceable job.

Yeah. There will be problems with the courts with everybody flooding in with, you know, what they call pro se complaints Sure. For people who are self representing. Mhmm. And when when the new models come out, I use them and I think for second, like, oh my god.

It's over.

Why does anyone need me? But then I remember, oh, because, you know, first of all, going to court Yep. Advocating in front of a judge, that's not going away. Sure. That's a unique human skill.

You can't, you know, grow that in an AI pipeline.

Yeah.

Counseling clients, right? When a client has a big problem, when I have a medical issue, I can look up, okay, why am I coughing like this? And Chad or Claude can give me an answer. But if I am really concerned, I'm going go see my doctor.

Yep.

And so when I was teaching the Stanford class, actually I taught it again in the fall, and one of the students came up to me and said, so you're just like talking to it? Like, you're just asking questions? I can do that. And I thought, can you? Like, you know, let's let's...

Who is going to use Claude better on a litigation task? Me, another litigator, or someone who has never litigated before and has no idea... The pitfalls. Right. The pitfalls, the strategy, the opportunities...

Yeah.

It's the same thing you ask ask an LLM about something you don't know nothing about, you're like, this is a, you know, the most incredible genius then you ask it about something that, you know, even trivial for me, like if I ask it about anything surfing related. I'm like this makes... This is like wrong in a bunch of different ways.

The exception would be design. People with no design skills, they go to the LLMs and they just get these beautiful designs.

Yeah. It's... I you know, was joking that like, know, that people make fun of it, it's the next word predictor or whatever. Like when you've given it all the words you have, the next word is the one you need, you know, the next concept, the next idea. So you can extend your knowledge, but to make huge leaps is really hard.

The legal industry right now feels like all the lawyers that I talk to, like lawyers at least in my network tend to be like pretty pretty smart, pretty pragmatic, logical like they are you know, we're in the technology industry so these lawyers that are working in the tech industry, they believe in technology. I don't meet a lot of lawyers that are like, I just I don't think this AI thing is gonna be that big, you

know? Mhmm.

But it feels like there's like structural reasons why certain groups can't do what what is sort of necessary, right? And so I would say like, you feel like this is an amazing opportunity for you because you can go find the... I feel like most lawyers, the smart ones, should already be like AI pilled and then you have to assess like are they gonna show agency themselves to like figure out new systems and ways to use these tools. But then you also have the structural advantage where you're building from the ground up with this technology in mind versus thinking like man, we have, you know, 3,000 people on payroll and we got to figure out how to, you know, navigate through this. You're just starting fresh.

I I mean, all those things, know, starting from the systems you're building on, is it better to retrofit AI into these legacy systems, or should we just start from scratch? The lawyer training, you know, people are coming at it from all different perspectives. Some people look at it like, oh, AI, that's interesting. I'll maybe get some time this weekend to dabble versus let's use it on everything as much as we can. It's literally super intelligence.

Yeah.

Where, you know, where can we use super intelligence in our practice? And that's hard at any big enterprise because you have committees, you have a lot of, you know, stakeholders who have reasonable concerns, but the technology is moving so fast that to have to sort of slow it down to do it by consensus was was hard. It is hard. And so doing it myself not as hard.

What what's your pitch assuming that you want to let you know, assuming you want your most high profile cases to be in front of you, what's your pitch to clients to to go with you versus the you know, when you're dealing with a really big problem Mhmm. And you have to litigate or or you're being sued, you're not... Your first thought, at least for the biggest companies in the world, is I want to save some money and go with the AI native firm. Right. So what's your pitch?

So that's it. I think clients initially hear AI, okay, that's cheaper. I like super intelligence. You know, we're giving a super intelligent technology on your problem that is inherently, you know, a question of intelligence. It's how do we, argue this point?

How do we find other arguments? How do we shape the narrative? What really happened here? And how do we lay all that out? So a lot of engineers look at at litigation problems and they say, looks vaguely like a math, you know, logic problem.

I think we can engineer away the lawyers. But when you get to the end of a lawsuit, there's just a bunch of arguments about what words mean

Mhmm.

And what the significance of an event is, who's more credible.

And

and so John Quinn, always would say, you know, the the side that wins is usually the side that figures out what matters first.

Super

intelligence is incredible at helping you figure out what matters quickly and and to to develop on top of it.

Or or I imagine even, you know, in in cyber security like every company is facing this right now where like somewhere in your software supply chain there was this one tiny vulnerability and it feels like the same thing could apply to law where it's like finding that one detail that you can like sink your teeth into and make and ideally make the whole issue about that ends up being I imagine like a way to win. And it feels like AI but but the funny thing is that both sides now have that same access to intelligence but it's like so it becomes who can use it the best.

Absolutely. I mean, had a case in the pandemic, $6,000,000,000 hotel deal where a buyer had agreed or our client had agreed to spend 6,000,000,000 on hotels in the fourth quarter of twenty nineteen to close in the first quarter of twenty twenty. That deal became impossible to finance in the pandemic. And usually, you know, those those deals are hard to get around, but, the issue was they closed the hotels. The the seller had closed the hotels in the pandemic.

That was our defense. What did you want us to do? But the contract said you had to run the business in the ordinary course, unless you have consent of the buyer. And we hung on that, and we won on that, and it was it was a huge deal. And in every case, there's...

There is a way. Mhmm. Super intelligence helps you find it faster.

Sure.

And and and come up with more, you know, creative solutions for clients because no client actually wants to go all the way. No one comes into my office and say, I'm here because I want to win a trial. Right? They have a problem and it usually goes through courts or other, arbitration or some other process, but they don't really wanna win the lawsuit. They'd rather just win their problem or solve their problem.

Spirit was saying that he knows some people that do just want...

He he does. He... He's the exception.

He knows some people that are just like, I love love winning and I want to sue everyone. Then he said, know some people that don't want sue anyone. Can you help me understand what's going on? What happened with Wheel? Wheeler Gercher, 95 year old law firm went dissolved a couple weeks ago.

The Wall Street Journal here says it was a talent war, a record year for partner turnover, helped bring down Wheel and is forcing similar firms to make changes to compete. Are you familiar with this story? You give me more context? Me understand what's going

on. I followed it closely. I'm fascinated by it coming out of Big Law. Yeah. Big law firms have many of the features of banks, but without the the FDIC, without bank holidays Sure.

Where you you get a run dynamic where the revenue is is typically concentrated in a small number of so called rainmakers Rainmakers. And you have a ton of infrastructure underneath that. And so... Oh, and

when they leave, they take the revenue with them?

They take the revenue.

As opposed to... You would assume if you're sharing revenue with just a couple people and somebody steps out, that's more for you, but in this case it's less.

And and especially in that run dynamic we think this person's leaving, Jordy's If I'm the last one here responsible for thousands of employees Yeah. I don't have that much business. You know, nobody you know, I don't I don't wanna deal with that, right? I just rather go down the street to

this for fixed costs.

Why have why have lawyers seemingly given having to give so much power to individual partners? Like, would think that over the years it would be the power would shift from independent, you know, partners to the firm. Yeah. But it seems to be if you can just take your clients and go Mhmm. That's a crazy dynamic and I would expect this is like the first story of many as people realize, hey, can jump ship, spin up my own practice, maintain...

Even if I maintain 80% of my book but I have way less cost, I'm instantly making, you know, more money and it feels like you could have this massive reshuffling of big law over the next ten years.

Yeah. I think historically, law firms paid in what was called lockstep. So if we were the same year and we were partners and we were, you know, contributing

Yeah.

We'd get paid about the same. You've seen an explosion of free agency in in law. So people going from one firm to another with big guaranteed contracts or or or deals. So there's less loyalty, there's less like we grew up in this together, so we're gonna save the firm and more, well, you know, these guys all got here three weeks ago, so anyone can turn over anytime. So there's not that same level of investment.

They'll bring their team, they'll bring their associates, you know, there may be their other partners who help them service those clients. But do they need the whole firm? You know, probably not. I think...

What is the base case for a lawyer leaving a firm taking their business with them? Is it they're gonna take 50%, 80%? Because there's plenty of clients that they might like their particular lawyer, but also they might just say, oh, we already have this relationship. I haven't talked to him in a while because we're not doing an active litigation or something. So, we'll just give whoever the firm gives us.

I think litigation is very different. Litigation is episodic. It's it's spiky. Sure. You don't know when someone's gonna have the big one.

Usually, you know, most people have one bet the company lifetime in a In transactional work, if you're representing private equity companies doing deals, I think that tends to be much more stable It's sticking to partner. To. I... It tends to be...

Okay. So so if they leave, are they taking 80%, 90%, a 100% sometimes?

Probably a pretty good chunk. Yeah. Especially if the client looks at it and sees, well, I don't know if that firm is gonna still be there. Sure. Or my other options are still gonna be there because everybody's like a bank run

Yeah.

You know, looking for safer grounds. So you may end up in a situation where, you know, like in o eight, o nine, everybody's looking for the JPMorgan or or, Bank of America or whatever of law.

Yeah. And and is that emerging already? Is there... Is it too soon to call it? It's hard to there might be like a barbell effect where you have a whole bunch of smaller, more independent, more agile firms than one bigger big winner take all power.

But also, you might just wind up with a bunch of diffuse smaller law firms.

I I like the diffuse, but especially in litigation where conflicts are a problem. Sure. A giant law firm

That's right.

Partners have conflicts with one another. Historically, you would trade it off because you wanted access to hundreds of associates. But now, if you don't necessarily need hundreds of associates, that trade looks different. I think the thing I'll watch is in law firm economics, most firms pay out a majority of their comp in January. Mhmm.

And so people may be... I don't know, but they may be at firms kinda holding on until the end of the year to see how that shakes out. But there tends to be a lot of free agency in the first quarter, and that might be the next sort of destabilizing event there is to be one.

When you're working on a bet the company moment, how are you puzzling together all the different strategies and how they fit together? There's, you know, companies that are... They actively have to have earnings, they have to do PR, this founder might need to go on podcast, they might also need to testify, there's discovery, there's so many different things going on. How three sixty is your approach?

It's three sixty, you know, all three sixty. And that's actually one of the one of the great uses of AI is to build like stable case knowledge

Mhmm.

Where you can lay out, here's the client's objective, here are the constraints that we're living within, here are the risks that we're concerned about, so that everything you do on the case is informed by those things and the AI can remind you, you know, don't forget this person's testifying, you know, in this other case next week or, you know, they have an earn out coming up and so maybe they don't want to, you know, rock the boat now, all that kind of stuff.

That's fine. Yeah. Well, thank you.

Last question. What... I feel like you have... One one of the reasons you have an interesting job is like it feels like you you're probably busy every day, but there's like, what is there, ten days a year that like really matter where like you are in the courtroom and even in those ten days, there's probably like a much smaller set of minutes that actually matter. Like, talk about that kind of like like preparation for that and and what you go through because it's It's

Europe Crescendo.

Yeah. Yeah. It's like super spiky where it's like, you know, there's there's all the prep, but then it's like an athlete where you're going in and you you're like it's it's like a, you know, a boxer, an MMA fighter that goes in and in that moment, there's everything is decided and then your track record gets decided which then, you know.

It's a lot. I think athletics is the right, you know, comparison. I always would talk about football. Right? Football is like eight minutes when you compress it down.

You know, when I was at my my old firm and and recruits would say, you know, don't you guys work more hours than, you know, other firms? Like, those are trial hours. That's like saying Tom Brady, you know, plays more football games. He's happy to play those extra playoff and Super Bowl games. So you're all in trial is, you know, a month of trial, like, you're not doing anything else.

You're probably not seeing your family a whole lot. You're not, you know, catching up on your favorite podcasts, but you are locked in. And the whole game in litigation is to get stuff in your context window, in your head. So you can't really outsource the whole thing to AI. AI has to be used to get in your brain so that when you're standing at the podium arguing with the judge or cross examining a witness, you can call what you have to.

And so you

have to... Yeah, because you can't... It's not like in a perfect world you have an AI running in real time that is ingesting every single thing that's said in the courtroom and then giving you, you know, you're looking down and giving you... But that's not possible.

That's not possible. You're you're there. It doesn't matter if you have a 100 associates or a 100 agents. It's all gonna be up here, you know, on game time. So that's what you're preference...

You think there'll be a cheating scandal like what happens in poker where someone in their shoe has something that's telling them to bet or not.

Like Fudge Shannon, like, yeah, like the

original wearable. Salacious one in the chess community.

I won't go into that.

But yes, like having having answers secretly fed to you effectively, maybe not an earpiece, but something that's, you know, shocking you in your right leg if you need to press harder, shocking your left leg if you need to back off a point.

Right now, the method is someone sitting at the table writes a post it note and hands

it to you. Okay. So...

And you have to on the fly try to figure out what the hell they're saying and how do I integrate your... There's gotta be a better way Shut with up. Shut up. Okay.

So there's there is some interaction. So Yeah. Little less room for Yeah. A cheating scam.

Yeah. But I, you know,

maybe it's

not cheating. Maybe there's a technological way to enhance collaboration in the courtroom.

Yeah. Well, still...

No. The the lesson from the last week for me is like the smartest, most successful people in the world will at times do the stupidest things imaginable. And so I wouldn't be surprised if you see a lawyer with a, you know, hidden microphone and some kind of, you know, like smartest, most high profile, most in the spotlight people sometimes do the stupidest things you can possibly imagine. So anything's possible.

That is what happens. That's why I...

Where are you setting... You're you're setting up in Greenwich?

So Greenwich in New York, but we're doing a California roadshow. I had some meetings in LA yesterday, going up to the Bay Area tomorrow for some stuff at Stanford and some other meetings and having a blast.

Amazing. Well, thank you so much for...

Having me on.

Thank you.

Come back on. We we love we love getting, you know, the opinion of the the legal community at different points.

I've been watching since the first episode, so this is an honor.

Amazing. Thanks so much. Close out the show with us. Thank you very much. I'd love to.

Alright.

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