Subscribe
Share
Share
Embed
TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TVPN. Today is Friday, 01/16/2026. We are live from the TVPN UltraDome, the temple of technology,
Speaker 2:the fortress of finance, the capital of capital.
Speaker 1:Let's tell you about ramp. Times money, baby. Save both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. It is the goat of My goat.
Speaker 1:Fintech, a fintech goat. A bunch of news today. Lots of people dropping stuff on Fridays. What's the meaning behind that? I don't know, but we'll take you through it.
Speaker 1:Lots of AI news, lots of open AI news because there's new details, new discovery in the OpenAI versus Elon Musk lawsuit that's heating up. There's a whole bunch
Speaker 2:Greg of was waiting for.
Speaker 1:Yes. For sure.
Speaker 3:For sure.
Speaker 1:There's lot
Speaker 3:of crazy quotes.
Speaker 2:We're gonna go we're gonna go through it all Yeah. Because it's part of our job.
Speaker 1:We're gonna go through both sides.
Speaker 2:I We're gonna do
Speaker 1:do the steel man for Sam, the steel man for Elon.
Speaker 2:Yeah. No. Just I have I have Double stick. I have a lot of sympathy for Greg. This is like a night, you know, having your personal diary.
Speaker 1:It is sort of crazy. Mean, do we know it's his diary?
Speaker 2:It's not. There there
Speaker 3:You lost call
Speaker 2:it. Framing it as a diary.
Speaker 1:I think I think you had the best take of the day so far, which is that this is the Super Bowl for
Speaker 2:Nick on Nick on X.
Speaker 1:NIK is having the best
Speaker 2:day number one creator
Speaker 1:for three years. He's having a great time. Anyway, let's take
Speaker 3:you through
Speaker 1:the linear lineup, tell you
Speaker 4:who we're having on the show today. Linear,
Speaker 3:of
Speaker 1:course, is the system for modern software development. 70 of enterprise workspaces on linear are using agents now. And we will be having the co founder and CEO the founder and CEO of Athletic Brewing. We got the Athletic Brewing beers here in the studio.
Speaker 2:We got a lot of them.
Speaker 1:Pat Grady and Sonya Wong from Sequoia Capital coming on. They're coauthors of twenty twenty six. This is AGI. Then we have Sean Frank, Emergency Podcast. They put ads in chat GPT, so we're calling the god of ads himself.
Speaker 1:Sean Frank, the CEO of Ridge. And then Alex from Hicksfield's coming back on the show to
Speaker 2:get a full update. 200,000,000 of ARR. Absolutely. The fastest growing
Speaker 1:So we're very excited for our guests, but we have about ninety minutes here to lock in, talk about the two sides of the Elon versus OpenAI lawsuit. So let's kick it off with the Elon should lose side of the argument. I'm gonna be steel manning Sam, steel manning Greg. They did nothing wrong. Elon's wrong.
Speaker 1:He needs to back up.
Speaker 2:Do want your helmet?
Speaker 1:I I need the steel man helmet for the whole thing. I it might be too much. Maybe let's put it on the turbo puffer, but we'll just let everyone know that we're steel manning like crazy. Put on put it on the puffer.
Speaker 2:I'll I'll wear it.
Speaker 1:Okay. You can you can wear it. Before we do, let me steel man some super intelligence cloud, specifically Lambda. Lambda is the super intelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 4:Talk
Speaker 1:to Okay. Elon made a donation to a nonprofit organization. He got a tax write off on that donation. And that nonprofit, OpenAI, the nonprofit, it's now one of the best funded nonprofits in history. And it's still focused on the original mission.
Speaker 1:OpenAI, the nonprofit, it still exists. It has just a tiny 100 plus billion dollar position in a for profit company. They're gonna be able to do nonprofit stuff forever, whatever they wanna do. If they wanna hire researchers, if they wanna write white papers, if they wanna train their own models, the OpenAI nonprofit can do that. It's funded.
Speaker 1:Elon donated roughly $38,000,000 alongside other donors who put in 90,000,000. There's some debate over how much Elon put in. I saw one report that was around 45. It's in the tens of millions of dollars. And he was a
Speaker 2:large According to OpenAI Yeah. They believe that I I think their their sort of optimistic belief is that the damages would be $38,000,000
Speaker 1:If they lose. The original donation. If they lose. I'm I'm arguing right now that they're gonna win. They're gonna win.
Speaker 1:The jury's gonna say not guilty. OpenAI did nothing wrong, and here's why. So Elon, yeah, he was a big donor. He put up tens of millions of dollars. But play out the counterfactual.
Speaker 1:It's entirely reasonable to assume that things would have played out exactly the same even if Elon was never in the picture, even if he never donated. Sure. I mean, the office would have had to be a little bit smaller. You're working with you're working with 90,000,000 instead of a 120,000,000. But we've seen folks raise 90,000,000 series b's.
Speaker 1:We've seen folks raise a $120,000,000 series c's. Roughly the same company. You know, you you pay people a little bit less. You have a few few less perks. The office snacks aren't as good.
Speaker 1:Maybe you skimp on the 45 pound plates. You just get the 10 pound plates. These things happen. So if Elon had never donated, maybe Sam would have just stepped up his donation. He put in 10 he put in 10.
Speaker 1:You know, he maybe he goes and leverages something profit club. Yeah. Yeah. He put he put in 10. He could have potentially sold more stock than he owned, taken a loan, sold property, put the McLaren f one up for sale.
Speaker 1:That's another $20,000,000 he could pour in. He could have filled that gap, or he could have hit the he could have hit the road. He's a good fundraiser. He could have gone out and gotten money from a variety of people. Reid Hoffman, Peter Thiel, Dustin Moskovitz all put in money.
Speaker 1:There are more tech billionaires in that crowd that could have written a $1,000,000 check. So Sam could have gotten $341,000,000 dollar checks and and filled the gap. So it's not like if if if Elon didn't donate, he wouldn't have like, OpenAI wouldn't exist. Right? It's totally possible that everything would have been the same and that the Elon donations were not make or break for a for OpenAI.
Speaker 1:So Elon should lose this case because everyone around the table came to the same realization at roughly the same time about the goal of creating AI responsibly. Basically, scaling laws ensured that AI progress would require vastly more capital than could ever be raised through donations. At a certain point, if you need $100,000,000 for a nonprofit, you can do it if you're aligned with some of the world's richest people in tech, like Elon, Peter Thiel, the other folks that I mentioned. On the flip side, you need $100,000,000,000 or you need $50,000,000,000 like OpenAI has already raised in the venture markets, that's just not going to happen in the nonprofit sector, except it could have. Because if Elon really believed in the nonprofit mission and really said nonprofit or bust, yes, I see the scaling laws, yes, I agree we'll need an insane amount of capital to get to AGI, well, who has an insane amount of capital?
Speaker 1:Elon. If he wanted to, he could have said, yes, I'm staying with the nonprofit strategy, and I'm gonna put up the 50,000,000,000. Every dollar that OpenAI has raised in the venture markets could have been a dollar donated by Elon Musk if he sold down all the positions. Now it's crazy. Never gonna happen.
Speaker 1:Doesn't make any sense, obviously. We're pro like, I think the nonprofit transition makes a ton of sense in the context of raising that amount of money. I think that's a reality. And truthfully, I think that everyone around the table agreed about that. And so
Speaker 2:One thing that seemed clear here is there were a variety of different paths, but clearly, a lot of big personalities in the room, a lot of ego, and it makes sense that eventually that just kind of blew up. Yeah.
Speaker 1:And so even if you were going to keep funding the nonprofit, you're going up against Google. They have an economic flywheel that will provide the amount of capital required to advance AI, build massive they're hyperscalers. They're going to build massive data centers. They're not going to have a problem with this. Google was set up to make investments at this level, at 10,000,000,000 of CapEx.
Speaker 1:Google's not blinking. The shareholders are all thumbs up on that.
Speaker 2:Very different. Remember when Sam was texting Elon, I think this was in 2023 Yep. Saying, like, it pains me to see you attack OpenAI publicly. I think we can both agree it's important that Google doesn't own AI. Exactly.
Speaker 2:And that's been one of the only things that throughout this whole process they've stayed in agreement on.
Speaker 1:Yes. Yes. So they want to create a counterbalance to Google specifically. And Elon actually agreed with this as they were shifting from maybe the nonprofit's not the ultimate way to win this AI race, this AI battle, this AI future. Because Elon agreed, according to Greg Brockman in emails, that he said he being Elon said nonprofit was def the right one early on, the right structure at the beginning, but may not be the right one now.
Speaker 1:So according to these leaks, it seems like Elon wasn't always all in on nonprofit. He was maybe open to the idea of a for profit. And, of course, that was a fork in the road. Elon did actually have the money to continue supporting OpenAI as nonprofit. It would've been crazy, but technically could have sold down positions.
Speaker 1:But Elon clearly agreed that OpenAI should build a for profit, and that's why he wanted equity. He wanted to be CEO. He was interested in OpenAI joining Tesla. Tesla's a for profit. He wasn't saying, we're gonna bring OpenAI over to Tesla, the whole thing is gonna be a nonprofit.
Speaker 1:Clearly, Elon is no purist about nonprofit AI research. He runs XAI. It's a direct competitor to OpenAI. He started it as a benefit corporation, which meant it had an obligation to deliver environmental and social benefits. But after the merger with X, that benefit corporation status was dropped entirely.
Speaker 1:This whole lawsuit is clearly just corporate lawfare and the battle should be fought out in the financial markets, in the App Store, on the open Internet, not the courtroom. Let the best product win. Let the best AI model win. Let the bet let the best team win. And so, let's wrap this let's wrap this court case up and and let let OpenAI go and compete it out.
Speaker 1:They got they're fighting a war on five different fronts. Let them let them build. Let them cook. Yeah.
Speaker 2:And it's worth noting that this is pro what and AI. This is the this is what winning like, today is what winning looks like for Elon. If he gets a if he gets, like, the the damages awarded and he gets $38,000,000 Yeah. He's like, nice. Yeah.
Speaker 2:I can fund x AI for a week. You know? Maybe not even gets 20,000,000. If he gets, like, some points in OpenAI Yeah. Yeah.
Speaker 2:Right? Yeah. He's like, great. This didn't this is not a material jump in my net worth or my influence or power Yeah. Whatever he's looking for.
Speaker 2:This doesn't really get me one step closer to Mars. Right? It doesn't necessarily align. So the wind state right now is just being disruptive, Basically buying buying x AI time, putting OpenAI in a position where they are, trying to go public, right? Yeah.
Speaker 2:And they've got this, massive high profile trial going on.
Speaker 1:The helmet is really adding a lot to this conversation. I love it. The chat loves it too. Jordan in the night helmet is what winning looks like.
Speaker 2:Yeah. So anyways, I Really? Was thinking
Speaker 1:Yeah. Let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, invest, and securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. We have fireworks today.
Speaker 2:Fireworks for Plaid.
Speaker 1:I love it.
Speaker 3:I love
Speaker 2:Plaid gets me fired up. This this kind of Good. This reminded me today of the deal rippling lawsuit Yeah. Where, like, the actual win state for this, like, deal rippling lawsuit is just rippling, like like, being somewhat of an annoyance. Right?
Speaker 2:Both companies are gonna continue.
Speaker 1:Yeah. Yeah.
Speaker 2:Yeah. There's no amount of money that's gonna make Parker Mhmm. Like, happy. Yeah. Right?
Speaker 2:But what what will, like, probably make him happy is just, making it harder for a deal to go public. Yep. Right?
Speaker 1:Yeah. Did you see that line that apparently they were talking to Elon in one of these, like, leaked emails? And Elon's like, oh, I don't really care about money, but I do need I do need $80,000,000,000 just handy in my back pocket for a city on Mars. It's like it's like the most extreme being like, yeah. Like, I'm I'm I'm basically post economic, but there's, like, one more thing that I'm reaching for, and it just happens to be $80,000,000,000, like, more liquidity than anyone has ever had in history.
Speaker 1:And I just need it ready to go for when I land on Mars and wanna
Speaker 2:build I just need about 80,000,000,000 liquid.
Speaker 1:Just liquid. Liquid. It would fix me. He says I'd fix billion liquid would fix me.
Speaker 2:In fact, even then I moved back to California because even if they're doing a 1% a year, right, I can
Speaker 3:Yes.
Speaker 2:Probably good.
Speaker 1:Okay. Now let's argue the flip side. Elon Musk will win the OpenAI lawsuit. And before we tell you how and why Elon will win the OpenAI lawsuit, I'll tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets.
Speaker 1:So Elon will win the OpenAI lawsuit, and he should. And he should. He should win this. Judge Gonzalez Rogers already rejected OpenAI's motion to dismiss. OpenAI wanted to throw this thing out.
Speaker 1:And the judge said no. The judge said, I think there's plenty of evidence that something happened here. Yes. It's all circumstantial, but that's how these things work. OpenAI was trying to kill the case before the trial even started.
Speaker 1:They're trying to trying to get rid of this thing, but it's clear that Elon is on to something here. Okay. Just look at the emails. Just look at the emails. It's so obvious that the OpenAI squad was trying to fleece Elon and push him out without giving him a fair share.
Speaker 1:Elon said, guys, I've had enough. This is a direct quote from an Elon email. Guys, I've had enough. This is the final straw. Either go do something on your own or continue with OpenAI as a nonprofit.
Speaker 1:Otherwise, I'm out. I'm not donating anymore. You guys, if if you're gonna do the the for profit, just go start a normal company and wind this thing down. And that makes a ton of sense. It was an open invitation by him to just go build a traditional
Speaker 2:part of the Part of the trial in in in this proceeding that I'm interested in is, like, finding out why they didn't just do that. Yeah. It's not like Sam and Greg couldn't have been like, cool. We worked on a nonprofit for a while.
Speaker 1:How we set up a c corp?
Speaker 4:How do we
Speaker 2:set up
Speaker 4:a c
Speaker 2:I Sam sounds like, oh, I I I own, like, a couple points of Stripe. Yeah. I think they have something called Atlas. You can make a c corp
Speaker 1:Maybe he forgot.
Speaker 2:A few clicks. Maybe he just forgot. It's just, oh, I probably
Speaker 1:remembered about Atlas.
Speaker 2:If there were if there was like a very, very specific reason
Speaker 1:Yes.
Speaker 2:Like the the nonprofit had developed some IP at that point Yeah. That meant that starting over or or, you know, having to rebuild the team or Yeah. Whatever factor meant that that was, like, gonna set them back years. Yes. That's that's a big that's a big deal.
Speaker 1:Yeah. And realistically, even I like, you you you can't there's no indentured servitude. You can't keep, nonprofit employees working there. Why is the horse with the workhorse Three points at OpenAI.
Speaker 2:Need the horse.
Speaker 1:Ilya, cut
Speaker 2:the horse button, please.
Speaker 1:Ilya was the workhorse at OpenAI, and you needed him to keep the excitement, keep working. He developed a ton of the foundational technologies at OpenAI. And if you wanted to work at a nonprofit and you say, hey, we're leaving to go do a for profit, come over here, who knows if he's going to come? And that applies to tons of different researchers that were instrumental in the development of what ultimately became CHAT GPT and GPT three and four. And so Elon
Speaker 5:gave them
Speaker 1:an invitation, just go out and build a traditional venture backed company. Maybe I'll invest. Maybe I'll be involved. Maybe I won't, but at least we'll a clean slate to start from. It would have been trivial to set up a new entity, as we discussed.
Speaker 1:You could start building a team, and then you run the classic venture playbook. But Sam told Elon that he remained, quote, enthusiastic about the nonprofit structure. That was enough to get Elon to donate more, but OpenAI wasn't all in on staying in nonprofit mode. They were on the cusp of restructuring OpenAI and taking the $10,000,000,000 investment from Microsoft. The reality see, the reality of modern philanthropy, it's not fire and forget.
Speaker 1:Don't big donors like Elon, in this case, do have specific intentions and conditions attached to the gifts. It's not like he's just throwing $20 in the Salvation Army donation box around Christmas. This is 30 something million. If you give that to a university and you want a building, they need to build that building. They probably need to build it to your specifications even if you want They might
Speaker 4:even put your
Speaker 2:name on it.
Speaker 1:Yeah. They might even put your name on it. And and you can and you can dictate these things in a nonprofit donation, and you can ask that they that that the donation is contingent on those results. You can you can pursue specific directions. You have he has every right to demand results.
Speaker 1:And so Yeah.
Speaker 2:And meanwhile, you know, during this whole period, Greg is writing to himself allegedly that he cannot say we are committed to the nonprofit, don't want to say that we're committed if three months later we're doing b corp and it was a lie. Yeah. And then later saying, can't see us turning this into a for profit without a very nasty fight. His story will correctly be that we weren't honest with him in the end about still wanting to do the for profit just without him.
Speaker 1:Yeah. Before we continue our defense of Elon, let's tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. So a big part of this, if and why Elon is gonna win, why he should win, is that you can't just have corporate structure remorse, OpenAI.
Speaker 1:You can't pull the plug on promises made. OpenAI's own certificates of incorporation talk about creating a company, quote, exclusively for charitable purposes with the technology being intended to benefit the public. What's exclusively charitable about raising venture to build a subscription app with ads? That's not charity. Why why are you doing that?
Speaker 1:Elon's right. Not only should Elon win this case against OpenAI, he will win this case. It's simple. A bunch of people, a bunch of San Francisco elite tech guys, their fancy cars promised to build AI for humanity. They took $38,000,000 from one of their cofounders based on that promise, then turned around and built a $500,000,000,000 for profit empire with Microsoft.
Speaker 1:It's a straightforward bait and switch story that will play well to 12 regular jurors in Oakland. And so that's the case
Speaker 2:I mean, this is this is gonna be the big challenge, finding finding 12 regular people in Oakland.
Speaker 1:Extremely offline. Like
Speaker 6:How how illegal is it to try to be on a jury?
Speaker 1:Extremely. Stop trying to get on
Speaker 2:the jury. Stop trying
Speaker 6:to get on the jury. Look. I I said this. I'm gonna vote. Yes.
Speaker 6:I'm gonna vote in favor of whoever has the higher Arc AGI score. Okay. I'm just pro AI progress.
Speaker 1:Yes. Yes.
Speaker 6:Yes. I don't care at all about who wins. Mhmm. I just want better models.
Speaker 1:You just want better AI. Yeah. Whoever will build whoever's scaling faster. Well, I think you go with OpenAI. They have they have 50,000,000,000 in the bank.
Speaker 2:Dan in the chat is ready to be a juror. What? We get we gotta get somebody in the chat.
Speaker 1:Somebody in the chat. Yeah. Just like Live TV dating Yeah. The corner while you're in the jury. Just like Hey, guys.
Speaker 1:Yeah. In the chat. Yeah. I I I don't know. The the I mean, this this is incredibly dramatic.
Speaker 1:We're gonna hear a bunch of crazy storylines, learn a lot about the internal mechanics of both the empire and OpenAI's world. But at the end of the day, OpenAI is signaling to investors, hey, the the max damage is gonna be 38,000,000, something like that.
Speaker 2:They did say it could be more. It could be more. Of course, it could always
Speaker 1:be more. It does it does feel like it won't be existential, and it feels like it's more of a vibe war than maybe a true economic war. I mean, you could you could go back and and argue that that Elon should get pro rata equity at what it was effectively like a pre seed round that was done as a nonprofit. And that's 38 out of 120 that was raised in the nonprofit, something like that. So you give him you give him 25.
Speaker 2:Is there any precedent for a company going for a blockbuster IPO while having this, like, lawsuit that is really going at the, like, foundation of the entity itself? Right? You can imagine a company going public where they're in some process, legal process with a with a former executive or a specific customer or even a lender on some, you know,
Speaker 1:I can't think of anything I can't think of anything this big, ever happening. But OpenAI is a unique company. And if anything, it's gonna draw a lot of attention to the to the company
Speaker 2:and Yeah. From from from, like, the retail investor crowd, I think they're I think they're still gonna be happy to to to be in this company Yeah. Even if there's, like, even if this is all not settled. But it's really a question of, like, is Wall Street gonna be on board?
Speaker 1:I think Wall Street will underwrite it as there's potential settlement that could be in the tens of millions. It could be in the billions. But at the same time, you just calculate an expected value, take that off the valuation that you've built up. And if you're bullish on the long term value and cash flow of the business, like, you buy anyway. I I I think that's sort of what happens.
Speaker 1:Tyler?
Speaker 6:Okay. So I I've been reading through some of the documents. Yeah. And so I just wanna like add some some other like details. Please.
Speaker 6:So so one thing is like I think I'm I'm reading through like you can actually see the arguments being made. Mhmm. One of them is from the defense of OpenAI and that it's that Elon actually didn't directly donate to OpenAI. Mhmm. It was basically indirectly through a donor advised fund Okay.
Speaker 6:Through OpenAI's fiscal sponsor, YC. And so because it's not direct, the idea of, like, the the the specific charitable purpose Mhmm. Doesn't actually, like doesn't hold up.
Speaker 1:Oh, okay.
Speaker 6:And that it actually just defaults to, like, OpenAI's.
Speaker 1:Yeah. Because, well, like, you donate to one entity, and then that entity would have to make that claim, so their direct communication doesn't necessarily pull as much weight.
Speaker 6:And then so there's, like Okay. There's a bunch of pages about the history of, like, how how you actually define these things. So it it seems like it's gonna be just come down to, like, extremely, like, esoteric legal Okay. Definitions of, like, trust.
Speaker 1:Well, I think we're out of steel man mode. Jordy, of course, dons the steel man helmet whenever he's trying to steel man an argument. We thank you for putting up our shenanigans and our props. Cool. Let me tell you about vibe.co where d to c brands, b to b startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta.
Speaker 1:And speaking of ads, there's ads in ChatGPT. I liked Raghav in the chat saying they're putting ads in ChatGPT to help fund the trial. Oh, sorry. That was actually Dave. But Raghav did say OpenAI is nothing without its losses, which I think is very funny.
Speaker 2:Anyway Do you wanna know
Speaker 1:Let's go through some let's go through some of the leaks. Let's go through some of the ad details. We also have Sean Frank from Ridge joining to break down the ad landscape, whether he will be advertising Ridge Wallets in ChatGPT anytime soon.
Speaker 2:Yeah. Part part of the the last thing I would say there
Speaker 6:is Yes.
Speaker 2:Part of OpenAI's defense is that through their actions, they've created one of the most well capitalized foundations in history. Yeah. Right? And I think that they're gonna continue to lean on that. Novo Nordisk has a foundation themselves focused on biomedical research.
Speaker 2:Yeah. And it's like it has the estimate is that they have a $167,000,000,000. Okay.
Speaker 1:And Oh, so that's why we that that's why we're using the term one of the best funded because it's possible that the OpenAI nonprofit might not be the best funded in history. Although, if the stock continues to rip, they will probably become the best funded in the in history. Well, there's a whole bunch of leaks and news in the timeline. There's so many documents that hit the timeline that it brought down all of X. And X actually crashed because so many people were logging on to read the Brockman files.
Speaker 2:Yeah. There's there's one more there's one more quote that's that's worth reading through, which is that from from the Greg files from Greg Gate. Another realization from this meeting Mhmm. Is that it'd be wrong to steal the nonprofit from him, to convert to a b corp without him. That'd be pretty morally bankrupt.
Speaker 2:Yeah. He's really not an idiot.
Speaker 1:Yeah. I mean, but that sounds like, you know, they they were like, it would it would be wrong to do that and and by their admission, like they would argue that they didn't steal it
Speaker 2:from him. The funny thing in here is like the
Speaker 1:And
Speaker 2:and again, I love Greg and Yeah. I feel bad that this is all coming out. Yeah. But his like very millennial coded writing Yeah. Frockman further wrote under the heading, our plan quote, it would be nice to be making the billions.
Speaker 1:Okay. I didn't see that one. That's a funny one. I do think that there's a there's a there's a very odd wrinkle where Elon didn't invest in the for profit when any when any of those rounds were going. Like, the ships were so thoroughly burnt to a crisp that even when, even when the new for profit was doing the round, he was not there's at least we haven't seen a lot of emails or evidence saying like, woah.
Speaker 1:Woah. Don't go with Microsoft. Like, at least give me right of first refusal. Let's do this at Tesla, and and and I'll be I'll be the financier, and I'll take the equity. Like, I I'm bullish on this.
Speaker 1:And, you know, you don't have to. I don't know how much that plays into the actual court case, but, it is interesting just seeing, like like, once the ships were burned and the and and the bridges were burned and the paths started to diverge, like, they never really re resolidified. And you would think that, you know, if you wanted to continue, you would you would try and build a position one way or another, get some cap table ownership. It is odd that we're in a situation where Elon has zero equity in the OpenAI for profit. There were clearly many opportunities to get exposure.
Speaker 1:But again, bad blood, so who knows? Maybe we
Speaker 2:should At least Greg didn't go in front of Congress and say, I'm just doing this because I love it. Yeah. Because that would make the these other notes on it would be nice to be making the billions.
Speaker 1:Yeah. But oh, yeah. For sure. But the the the other interesting thing is that do do we know where Sam Altman sits in terms of equity? It's been going
Speaker 6:back and forth.
Speaker 4:Yeah. Seven
Speaker 6:There isn't a number, but Yeah. In one of the documents, I I lost it. But it said he had indirect exposure via YC.
Speaker 1:Okay. Okay.
Speaker 2:Yeah.
Speaker 1:Into the for profit as
Speaker 2:well? Yes.
Speaker 1:Okay. So look through exposure there. But then in terms of like an actual grant, is there a number that's been thrown around?
Speaker 2:To my knowledge, nothing has been shared publicly other than the sort of idea of him getting around 7%.
Speaker 1:Okay. Okay. But Yeah. That still feels low for for a co founder of a, you know
Speaker 2:No. But that was happening. That that's like that's like a lot
Speaker 1:of the Yeah. Evolution No. By that point. Makes sense. But, you know, it it it it's something like the Mark Zuckerberg or the Bill Gates or the, you know, or the Jeff Bezos scenario.
Speaker 2:I mean, yeah. If anything, these Yeah. These files make a lot of Elon's kind of antics, like, more understandable. Like, he's been the one saying that they're morally bankrupt. Mhmm.
Speaker 2:And here, they just straight up say Did pretty coin? Morally bankrupt to
Speaker 1:Yeah.
Speaker 2:Steal the nonprofit from him. Yeah. Like Yeah. I don't think anyone ever expected their that that language come out Yeah. Came out that was this specific about their moment to moment thinking during that point in time.
Speaker 1:Yeah. What's the phrase that Elon uses? Scam defaultman? Scamual. Scamual defaultman.
Speaker 1:The timeline is really so stupid. The poor man tells. No, I one thing that is that is real is that it's very clear that, like, at some point, the the core OpenAI team was, like, it's either it's either, like, Elon as CEO, financial backer, like, complete control. Like, Greg Brockman said, this is the only chance we have to get out from Elon. Is he the glorious leader that I would pick?
Speaker 1:We have we truly have a chance to make this happen financially. What will take me to one b? Which is interesting because, like, there are definitely people that have been taken to one b alongside Elon with Elon in the glorious leader seat. Like, there are people on the Tesla train. There are people on the SpaceX train.
Speaker 1:Where where where truly, like, they are completely hands off. Elon is the glorious leader of those companies. They don't have control over Elon, but Elon has given them effectively billions and billions through either their direct work with the company or their investment in the company. Like, there's a whole bunch of ways that those two things could actually be very compatible.
Speaker 2:Yeah.
Speaker 1:But it would be weird, especially if you want more of an egalitarian organization, more of a equal board Yeah. More of a
Speaker 2:you at the run that Sam has gone on. Yeah. And you could imagine a situation where they're sitting at a table and saying, this boardroom ain't big enough for the two of us. Yep. Right?
Speaker 2:Yep. And it really feels that
Speaker 1:way. Yeah.
Speaker 2:Yeah. Yeah. Big big folks. Sam notoriously is able to draw in capital using many of the same sort of methods that Elon has.
Speaker 1:Yeah. I do think the financially, what will take me to 1B? It's just a good question to
Speaker 2:ask. Everybody needs to be asking themselves this.
Speaker 1:Yes. This is something that should be taught in grade school, really. I I I see people on Instagram reels all the time asking this question. Alex Hermosy, you know, makes reels about this. He's asking himself this question.
Speaker 1:The only other question is why aren't you asking yourself that question? You should. You should also get on 11 labs, build intelligent real time conversational agents, reimagine human technology interaction with 11 labs, baby. Continuing with the timeline, a federal judge denied OpenAI's motion for summary judgment. The case is going to trial, and Tyler's moving to
Speaker 2:Oakland. Oakland. East Bay.
Speaker 1:Should we read through some of Alex Heath's coverage in sources.news?
Speaker 2:And talk about a scoop athlete that's Scoop really god. Given really given Kylie over at core memory. I mean, these two are just going head to head.
Speaker 1:Yeah. Yeah. It it it is a a knockout, drag out fight for SCOOB athlete of the year. But they're both doing great stuff. And Alex read through thousands of pages in Mosk versus Altman, so you don't have to.
Speaker 1:We'll go through some of the summary here. There's some news about Ilya Sutzkever. Ilya had early concerns about treating open source AI as a sideshow. In 2022, OpenAI's leaders seemed quite concerned about the prominence of open source the open source lab Stability AI. We don't talk about stable diffusion that often anymore, but I believe Stability AI was the team behind that, right?
Speaker 1:Ahmad Moustak, I believe, runs it. Sutzkever voiced his worry over text with Marathi and others. Sutzkever, my trepidation around open source is that we're treating it as a sideshow, e. G. Def not going far enough to really hurt stability.
Speaker 1:So they're not taking it seriously. And if open source takes off, everyone could standardize on that.
Speaker 2:Raghav says, bro, scooping harder than a Ben and Jerry's employee.
Speaker 1:Let's go. This is good. This is good, Alex. He he's scooping harder than a Ben and Jerry's employee. We're gonna use that for now on.
Speaker 1:This is fantastic. Maradi, Mira said, we're missing the opportunity stand
Speaker 2:Mira is the real winner here. Yeah. She's winning today simply because Oh, yeah. The attention has shifted
Speaker 1:away Yep. From
Speaker 2:Yep. You know, a a good number of people leaving
Speaker 1:Their own their own co founder exodus drama, firings, who knows what's happening. But good to have the narrative shift and the vibes move on to OpenAI versus Elon Musk. So Miramaradi said, we're missing the opportunity to set standards with this massive growing group of developers. People are hungry to build things, and we should lean in and bring our tech to as many people as possible, long term maximize our chance of maintaining lead, reducing competition. But if we do everything to get this in a couple of weeks at any cost out because we heard stability is open sourcing a similar model, that's not in line at all with my motivation.
Speaker 1:So reducing competition, never something you wanna see in discovery. Always something you wanna see in, you know, a pitch meeting with a VC, but you usually don't wanna put it in in writing. OpenAI leaders were divided over early investor Reid Hoffman's decision to start a rival AI lab inflection. And Reid Hoffman's interesting because he was one of the big early donors, I believe maybe 10,000,000, something like that in the millions. And he has he has not joined the lawsuit.
Speaker 1:He has not jumped in and said, hey. I need I need equity in OpenAI. I'm I'm also wrong to, like like, Elon. Now in order to make the claim that Elon's making, you need a lot more correspondence, a lot more proof of misleading around the donation. And I don't think Reed necessarily has that.
Speaker 1:But also, he doesn't seem to be savor rattling about it. So they were already considering prohibiting investors from backing competing labs from an October 2022 exchange. Betrayed by him founding a direct competitor while simultaneously telling me, quote, I could not possibly imagine you'd find it objectionable.
Speaker 2:And this is InFlexion AI. Of course, you'd find it objectionable. InFlexion AI, which was ultimately sort of like Yeah. Acquired by Microsoft licensing Was
Speaker 1:that Mustafa Suleiman's company, I think? Inflection? Altman. Here's how I'd summarize my thoughts on this. Pros.
Speaker 1:He supported us in a moment when no one else would
Speaker 2:Correct.
Speaker 1:And it was pretty existential. Okay. So we're learning more about the existential ness of certain donations when they came in during the OpenAI nonprofit era. There are times when if somebody didn't come in come in and write a check, would have been very, very rough for them. And Sam says, Reid helped out at a key moment.
Speaker 1:I think OpenAI would have been pretty effed if he hadn't stepped up. Also, he was instrumental in getting the first Microsoft deal done
Speaker 2:There we go.
Speaker 1:And has generally been quite helpful with Microsoft related stuff, he's generally a good board member. Cons, he's very motivated by collecting status. Although I personally think he cares much more about OpenAI than inflection. He was blinded enough by the startup of being able to call himself the cofounder of a company. He made an uncareful decision.
Speaker 1:Also, at this point, think this at this point, I think I think at this point, OpenAI has the leverage to ask for a soft promise for new investors not to not to invest in competitors, but only a select few companies ever get to do that. And we heard stories of this during one of the bigger fundraisers where even Gleam was targeted as something that they didn't want their investors to also invest in. They wanted you to be open AI, ride or die, of course. Tons of funds said, I'd like a basket of labs, actually. I'm gonna invest all
Speaker 2:of broad based exposure to
Speaker 1:the category. Based exposure. And so I'm I'm doing SSI and thinking machines, and I'm doing Tropic too. And I'm also I'm also on the board of Meta. And I'm also I'm also investing in OpenAI and XAI.
Speaker 1:You gotta you gotta get a little taste of all of them. Brockman chimes in. He says, also on a side after talking to Sam Altman, I'm planning to meet Patrick Collison tomorrow in Demo DV3. We'll ask if he's interested in participating in the tender under the condition of not investing in AGI slash big model competitors. So we talked about the Brockman Diary.
Speaker 2:Well, yeah. The funny thing is he must I'd find it hard to believe that he's not didn't get to $1,000,000,000 just off of Stripe. Obviously, Stripe was much smaller back then. But Greg was the CTO of Stripe from 2010 to 2015. Stripe was founded in 2010.
Speaker 2:He was there for certainly longer than a four year vest. So who knows? But we don't
Speaker 1:know about his consumption happens habits. He might have been selling off Stripe equity as fast as possible to
Speaker 2:He might have been using shares to pay for coffee. It's like saying, okay, I'll I'll give you a forward contract. I'm willing to if you give me a free cup of Joe.
Speaker 1:Yeah. Satya Nadella was worried about Microsoft's position in AI when he started looking at OpenAI.
Speaker 2:Yes. Stripe was in 2017, Stripe was valued at $9,200,000,000
Speaker 1:Bunch of wee lads just doing Stripe. From Satya Nadella's deposition, the question to Satya Nadella, CEO of Microsoft, did you feel that your progress was moving more slowly than you had liked? And the answer, Satya Nadella says, I mean always as a CEO of a company, I feel my job is to sort of be dissatisfied with the rate of progress at all times. And so yes would be the answer, which is both in the absolute sense, which is can we build products that are more capable in any particular domain, and also vis a vis competition. There were others achieving things that we looked at and said, hey, that's great.
Speaker 1:And also, how can we make sure we're competitive with it? And so Satya Nadella was obviously motivated to invest, and now he has a huge stack of OpenAI shares ready to rock. Also, Satya Nadella almost wrote a book about AI called An Inflection Point. I think he definitely should write that book. That sounds amazing.
Speaker 1:According to an exhibit filed in the case, it was cowritten with Marco, Eunsiti and was in development in 2023 from the first chapter. On Wednesday, 08/24/2022, with the Pacific Northwest summer showing all of its beauty, Bill Gates hosted a dinner at his home in Lake Washington, just a few miles from Microsoft's campus. No longer a Microsoft board member or even Microsoft's largest shareholder, Bill remained the iconic cofounder and trusted adviser of the company's senior technical leaders. Satya suggested the gathering, which included chief technology Kevin's, chief technology officer Kevin Scott and a handful of top researchers. Food and drinks would be served, but the main entree was a hush-hush demo by OpenAI cofounder Sam Altman on a forthcoming release of ChatGPT powered by GPT four, an AI built on large language models.
Speaker 1:Bill had long encouraged researchers to develop a truly accomplished AI assistant, but had voiced his skepticism about this particular approach.
Speaker 2:It sounds like I'm listening to an audible.
Speaker 1:You're thank you. CrowdStrike. Your business is AI. Their business is security. CrowdStrike secures AI and stops breaches, baby.
Speaker 1:That's right. CrowdStrike. So that would be fun. I hope that book gets published. It'd be fun to have some of those little stories about we we don't I don't feel like we don't have enough oral histories of AI, who was in the room at what time.
Speaker 1:I feel like there's a whole series of books to be written about OpenAI. I know that they're writing they've written a few, but most of them are sort of these, like, skeptical drama pieces. I'd be much more interested in two different books. One would be the technical histories, like exactly what researchers were doing what, at what times. And also, I wanna know the feeling that was going through Ilya's head, and what was the vibe when he said, like, I'm I'm hitting the button, and I'm running the training run.
Speaker 1:What what would
Speaker 6:You're you just describing Dorcache's book.
Speaker 1:Yeah. But Like,
Speaker 6:The Scaling Era, An Oral History of AI, 2019 to 2025.
Speaker 1:So so so yes. Yeah. So so so I hear you I hear you on that being a great a great tour of AI progress across labs. I'm talking about within a single lab. Within a single lab, you're in the room account of narrow it just to the GPT models.
Speaker 1:And so imagine the scaling era but just
Speaker 2:for the products So basically of not basically what would be Acquired episode
Speaker 1:Yeah. On There's that. I mean, isn't there news that there's a book on Demis Hassabis that's coming out about DeepMind. That's going be fantastic. It's written by Sebastian Malabai, one of the GOATs of business writing.
Speaker 1:He wrote The Power Law, all about the history of Silicon Valley. I know that book is going to be incredible. But so I'd be very interested in in the the research side, how the research developed, who was doing what, and then I'd also be interested in the financial side. Wanna know, okay. How did this SPV actually get done?
Speaker 1:What were the terms on this? Who was jumping in in this round at what terms? How who are they talking to? Who are their LPs? Were their LPs skeptical?
Speaker 1:We've talked to and seen a little bit of the other side of that And
Speaker 2:then layering in layering in all of this information from the, deposition Totally. Totally. Some of Yeah. Some of this evidence that's come out that we read through.
Speaker 1:And so there are a few writers that will take different cracks at the OpenAI story. I think the definitive book probably has yet yet to be written. But it will come, and hopefully, Satya Nadella can can play a role in that because he's such a key figure in the full story. Vanta. Automate compliance and security.
Speaker 1:Vanta is the leading AI trust management platform. Like a foghorn. Microsoft beat out Amazon when it initially started working with OpenAI. Elon Musk was opposed to working with Jeff Bezos and wrote the following in an early email to Sam Altman. He said, I think Jeff is a bit of a tool and Satya is not.
Speaker 1:So I slightly prefer Microsoft, but I hate their marketing department. Altman responded that Amazon had started, quote, really dicking us around. Yeah.
Speaker 2:Such a crazy lie.
Speaker 1:He's like, I don't like his taste in champagne. Have you seen what that guy drinks in Saint Bart's? It's unacceptable. He should be taking that up another notch.
Speaker 2:And and the and the the the sparklers with
Speaker 1:the champagne. It's all it's just over the top.
Speaker 2:Very vulgar.
Speaker 6:He knew he was gonna get mocked.
Speaker 1:Yeah. No. Yeah. True. True.
Speaker 1:Yeah. I like a I like a Tesla tequila over a Saint Bart's champagne bathtub.
Speaker 3:I don't know.
Speaker 2:Credit to Jeff. He, of course, was bit more locked in during that era.
Speaker 1:So the upside on Microsoft's initial $1,000,000,000 investment in OpenAI was capped at $500,000,000,000 Hopefully, they hit that cap from a filing written by Musk's lawyers. In November 2018, after dinner with Sam Altman, Scott told Nadella that OpenAI's new corporate structure offered both, quote, a commercial vehicle for monetizing OpenAI AIP and investment returns capped at 500,000,000,000. That's not bad. A 500 x bagger is gonna move the needle for Microsoft for sure. Altman claimed the nonprofit would eventually benefit because though OpenAI has yet to make a single dollar of returns, if OpenAI ever does get to 500,000,000,000 in returns, the balance over that goes directly to the five zero one c three.
Speaker 1:That's exciting. Microsoft's board initially approved a capital investment of 2,000,000,000, but ultimately decided to limit its initial investment to 1,000,000,000 in the hopes that a smaller investment would impress OpenAI to commercialize
Speaker 2:Satya. Joe. Hey. We got it. We can't give them too much.
Speaker 1:Let's put a little fire into them. Let's make sure that they're thinking about dollars. Dollars and cents.
Speaker 2:Well, you see what you've seen. You've seen what happened with thinking machines. Give somebody $2,000,000,000 Pretty soon. Maybe less pressure to commercialize
Speaker 3:Maybe.
Speaker 2:Maybe. More money on weight on weight weight racks.
Speaker 1:Yes. Yes. In exchange for its investment, Microsoft received a convertible limited partnership interest and rights to OpenAI's profits with returns capped at 2000% of its $1,000,000,000 investment. Microsoft CFO noted in an internal email that the cap is actually larger than 90% of public companies, and the limit on Microsoft's profits is not terribly constraining nor terribly altruistic. In fact, it was a good investment at Microsoft's request.
Speaker 2:True.
Speaker 1:OpenAI agreed to keep any mention of Microsoft's promise 2000% of return on its investment out of its public announcement. Imagine going to someone and pitching them, oh, we'll give you a 2000% return, and then actually delivering it. What crazy, crazy story. Gusto, the united platform for payroll, benefits, and HR built to evolve with modern small and medium sized businesses. Get on it.
Speaker 1:Make stop making excuses. The second the second update to Microsoft's partnership with OpenAI in 2021 included another $2,000,000,000 investment that wasn't reported and came with a lower upside. This is also a filing from Musk's lawyers. In March 2021, Microsoft quietly invested another $2,000,000,000 in OpenAI. Neither OpenAI nor Microsoft publicly announced the investment, which was subject to a lower 6x return multiple in place of its 2019 license to a single OpenAI model.
Speaker 1:Microsoft secured rights to commercialize any OpenAI model developed during the term of the agreement, except AGI. Facilitating its commercial use of OpenAI's IP, Microsoft was permitted to embed up to 10 of its employees on-site in OpenAI. That's interesting. Anticipate anticipating increased product commercialization, Microsoft and OpenAI agreed to share any resulting revenue. Just three months later, in June 2021, Microsoft released GitHub Copilot, its first product incorporating OpenAI's technology.
Speaker 1:Well, there are many, many more scoops in this piece by Alex Heath over at sources.news, so I encourage you to go subscribe, go sign up for his substack, and read the full thing for yourself because there's a lot of interesting stuff going on. But we should move on to the timeline. There's so much more news. Let's let's find some post to run through. Everyone is everyone is having fun with financially.
Speaker 1:What will take me to one beat? Sitting on the edge of the bed. I love it.
Speaker 2:Feet up.
Speaker 1:You gotta you gotta be asking yourself this. It's just so clear. This could have saved OpenAI from Elon, and it's a diary with a lock on it. The kitten. I think the diary framing is like woefully wrong.
Speaker 1:That's probably the worst part of this whole thing is because most of the most of the the thoughts that Greg's putting out are completely reasonable. Like, it it's like Yeah. No. We shouldn't screw this guy over. Like, do we really want him to have a a complete authority?
Speaker 1:Like, I this is all these are all reasonable things to to be thinking out loud. It's just when you write them down, they get recontextualized in the courtroom. And then the fact that it's framed as a diary, very questionable.
Speaker 2:Yeah. I I don't think it makes I don't think it makes look that bad No. Because he wasn't he wasn't ultimately it's not like he was, like, secretly, you know, the puppet Sam's puppet master.
Speaker 1:No. No. No. And a lot of this went back and forth, and there were lots of opportunities for both sides to to yield. It was, like, a long ongoing negotiation.
Speaker 1:But everyone's picking their sides. Owen Sparks says, case closed. Elon has OpenAI dead to rights based on this quote here. He wrote, can't see us turning this into a for profit without a very nasty fight. I'm just thinking about the office, and we're in the office.
Speaker 1:And his story will correctly be that we weren't honest with him in the end about still wanting to do the for profit just without him.
Speaker 2:Got it. That That one's blood absolutely
Speaker 1:That's a bad one. That's a bad one. We will see. Anyway, we should move on from all this. Are there any other things the timeline that we should run through here?
Speaker 1:Elon says, They stole a charity, plain and simple.
Speaker 2:They're really on the for all the jurors, they're really going to have to I imagine you get if it's Oakland, 12 people on the jury, I guess like four of them are driving Teslas. They're really gonna have to go check all the cars, make sure they don't have the bought this before Elon went crazy bumper sticker on. Yeah. They're gonna have to throw those those candidates.
Speaker 1:Well, they should also throw out any jurors that show up in Koenigseggs. Because they're probably in the owner meetup, and they're at Cars and Coffee. And they're like, well, yeah. I mean, like, don't really like I I don't like electric cars. Okay?
Speaker 2:They're They do have
Speaker 1:a bias against electric cars. I need a V12. And anyone who drives a V12, I'm going to give them some leeway.
Speaker 2:I'm going
Speaker 1:give them some leeway.
Speaker 2:The thing about a ConasEG owners meetup is that a lot of them are probably not driving the ConasEG because they don't work that well. Yeah. They're not they're not reliable frequently. It's been frequently reported that they're not quite reliable.
Speaker 1:The one day you get to start
Speaker 2:Cars and coffee.
Speaker 1:There's paparazzi there taking pictures of you. Just one of the chances. One of the chances.
Speaker 2:Seriously, it's
Speaker 1:the worst day. The worst luck. The worst luck. Anyway, Sentry. Good luck for your systems.
Speaker 1:Sentry shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working.
Speaker 2:Elon, Holmarch catalog was asking ChatGPT Yeah. What ChatGPT thinks. And it says, if I were grading this purely as an analyst, not as an open AI model, the documents are legitimately bad. Brockman notes, not ambiguous.
Speaker 1:Was asking Claude about this, and it was very funny because it does you can't not read into it like you're talking to someone at Anthropic because it's taking shots at both of them being like, oh, well, like, you know, Elon has x AI, and that's a for profit. So he's a hypocrite. And, like, maybe that's just objectively true and the model's just, accurate. But it's funny just reading it in Claude's voice being like Claude's sitting there being like, I don't like either of these companies. Yeah.
Speaker 1:Anyway
Speaker 2:One more post. One more post. Elon said yesterday we talked about this yesterday.
Speaker 1:Mhmm.
Speaker 2:He was quoting the Kalshi odds on his case against OpenAI. Yeah. And he said What are they I've lost a few battles over the years, but I've never lost a war. I think that the what this comes down to, though, is like, what is the same thing as like, what does winning the AI race actually look like
Speaker 3:Yeah.
Speaker 2:With China? What is what is Elon winning against OpenAI
Speaker 1:look like? The odds now, it's 68% chance will Elon win his case against OpenAI. That's up from 34% back in January January 14, just a few days ago. And so this new trove really did move the market, at least on Cauchy. So we will see where this goes.
Speaker 1:If the U. S. District Court in Northern California sides with Elon Musk in Musk versus Altman before 01/01/2027, then the market resolves to yes. Of course, this doesn't take into account, appeals, which will obviously happen. And there's always the chance that there's a settlement before this, although I think it it feels like we're just past all that, and we are fully in.
Speaker 1:It's going to trial. There's gonna be some drama. There's gonna be some courtroom sketches. So get ready because it's gonna be it's gonna be beautiful. And I wonder who they're gonna call to testify.
Speaker 1:A whole bunch of people will be will be on on the stand presumably.
Speaker 2:Joe Weisenthal. What's he saying? He is highlighting Goldman raising 16,000,000,000 in record Wall Street Bank bond sale. Joe Weisenthal says right here, right here.
Speaker 1:Here. Toss it to me. Toss it to me. Woo.
Speaker 2:Boom. Clean.
Speaker 1:Finally some good news.
Speaker 2:Huge congrats to Goldman Sachs. I've been following them a long time. The whole team and culture is so impressive. I can't wait to see where they're going and what they do next.
Speaker 1:Yes. Yes. Yes.
Speaker 2:Really just getting started. They are. They're really just Today's really just It's day one.
Speaker 1:It's day one.
Speaker 2:It's day one for Goldman.
Speaker 6:It's day one. Will Menidas, he he thinks of Goldman as kind of the the ideal firm. Right? He has this idea of firm versus company
Speaker 1:Yes. Yes. Yes.
Speaker 6:Where the company is just the people, the firm is the core ethos.
Speaker 1:Sure. Sure. Sure.
Speaker 6:And Goldman is kind of the the perfect firm.
Speaker 1:There are some absolute dogs over there. We talked about it
Speaker 3:a bunch, but one of the
Speaker 1:most legendary things going into the financial crisis. They know that real estate's gonna sell off. They sell their corporate headquarters and lease it back for ten years. They're not exposed to the the financial risk of their building. You gotta be careful if you're on the other side of a deal.
Speaker 1:If they're
Speaker 2:selling, why? Why are you buying? Yeah.
Speaker 1:It's a good question. But fantastic firm, fantastic results from them, and congrats. Joe. And speaking of the financial markets,
Speaker 2:you gotta get in on them
Speaker 1:with public.com, investing for those tickets seriously. Stocks, options, crypto, bonds, treasuries, and more with incredible
Speaker 3:customer service.
Speaker 2:Joe has some more news.
Speaker 3:Yes.
Speaker 2:He's news maxing
Speaker 1:He
Speaker 2:is news. Out of AP in Beijing. Breaking with The United States, Canada Canada has agreed to cut its a 100% tariff on Chinese electric cars Oh. In return for lower lower tariffs on Canadian farm products. Prime Minister Mark Kearney said on Friday.
Speaker 2:Kearney made the announcements after two days of meetings with Chinese leaders. He said there would be an initial annual cap of 49,000 vehicles on Chinese EV exports, growing to about 70,000 over five years. China will reduce its total tariffs on canola seeds, a major
Speaker 3:Okay. Yeah.
Speaker 1:Canola oil. They're getting seed oils. They're like, we gotta have them.
Speaker 2:Okay. Okay. Maybe this is part of a grander strategy. Oh. He's
Speaker 1:like, yeah. Yeah.
Speaker 2:Need to this is this is our version of fentanyl.
Speaker 4:So he he so
Speaker 6:he he actually did Carney said that Canada's partnership with China sets us Canada, up well for the new world order. So this is the are the first steps. Yeah.
Speaker 2:That was a that was a crazy quote. That was a crazy quote. I I when I first saw that People do it. I saw the video, I was like, okay. Like Yeah.
Speaker 2:Funny deepfake. Yeah. You know? Prime minister saying, like New world order. Excited for this new world order.
Speaker 1:Yeah.
Speaker 2:But it was real.
Speaker 1:Yeah. Was real. In other in other electric car news, Ford and BYD are in talks for car batteries. Let's give it up for some talks. US car makers need Ford, the US car maker, needs more batteries for hybrid vehicles because it's shifting away from the full EVs.
Speaker 1:They canceled the Ford Lightning. But they are going to do a lot of hybrids, and so they need a lot of batteries. And they're calling up BYD to help with it. Ford and BYD are going to do a partnership, or they're in discussions for it, in which the American carmaker would buy batteries from the Chinese auto company for some of Ford's hybrid vehicle models, according to people familiar with the matter. The two companies are still discussing how the arrangement would work.
Speaker 1:One idea is that Ford would import batteries from BYD to Ford's factories outside of The US. Some of the people said talks continue. And it's possible a deal won't materialize. The tie up, if completed, would pair Ford with the largest Chinese car company that has struck fear in much of the auto industry over its ability to produce affordable models that carry sophisticated technology. For Ford, it solves a problem.
Speaker 1:As the company pulls back from electric vehicles and ramps up its lineup of hybrids, it needs a battery supplier. And BYD is able to produce high quality car batteries. We talk to lots of companies about many things, a Ford spokesman said. A BYD spokesman declined to comment. That's a good comment.
Speaker 1:We talk to a lot of people about a lot of things. Why are you focusing on the Chinese batteries today? Stop calling me Ryan Felton from The Wall Street Journal. Move on. I talk to a lot of people.
Speaker 1:Before becoming one of the world's biggest carmakers in the world, BYD developed a robust battery manufacturing business, including batteries for hybrid models. It currently produces most batteries in China, but the company is building up capacity in its overseas plants as it expands to markets such as Southeast Asia, Europe and Brazil. Bernstein Research estimated that BYD's battery shipments rose 47% last year to 286 gigawatt hours. Mhmm. President Trump's trade adviser, Peter Navarro, criticized the idea on X.
Speaker 1:He said, so Ford wants to simultaneously prop up a Chinese competitor's supply chain and make it more vulnerable to the same supply chain extortion? What could go wrong here? That's Peter Navarro on X, the trade adviser. Last month, board said it would pivot away from making electric vehicles in the face of slumping demand and take an expected $19,500,000,000 in charges primarily tied to its EV business. So very interesting news.
Speaker 1:Anyway, let's move on to the next big story of the day. But first, let me tell you about Shopify. Shopify is a platform, commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.
Speaker 2:Agents. So. And relevant because the day has finally come. Not to see ads in ChatGPT
Speaker 1:That's true.
Speaker 2:But they're coming.
Speaker 1:They're coming.
Speaker 2:They're coming. We're talking, we're no longer in talks. We're no longer in advanced talks. Yes. We're talking about in the coming weeks, OpenAI plans to start testing ads in ChatGPT free and Go tiers.
Speaker 2:It's go time.
Speaker 1:Go tiers. ChatGPT Go.
Speaker 2:They said, we're sharing our principles early on how we'll approach ads guided by putting user trust and transparency first as we work to make AI accessible to everyone. We got to check-in with Mark Cuban. But they say, matters most, responses in ChatGPT will not be influenced by ads. That is
Speaker 1:There's a firewall. There's a firewall. Editorial is over here. Ad sales is over here. They don't interface with each other at all.
Speaker 1:And so the models that generate the responses will not be aware of who's advertising on what. This seems extremely easy to do technically, extremely good for product reliability. It's what the consumer wants. They want you wanna know when you go to Google, if you scroll down far enough, you eventually get past the ads and you see the real results. And you're gonna want that in your LLM even if there's an ad up at the top or in the middle, as long as it's clearly labeled, which they say they will be.
Speaker 1:Ads will always be separate and clearly labeled. Your conversations are private from advertisers. Plus, pro, business, and enterprise tiers will not have ads. So I'm gonna have to downgrade. Yeah.
Speaker 1:Because I'm on the pro $200 a month tier, but I want ads. I wanna experience the ad product. Yeah.
Speaker 2:Everybody's gotta downgrade.
Speaker 1:But I I think they're gonna be making way more than 200 a month off me on ads.
Speaker 2:Oh, yeah? Oh, Oh, yeah. Oh, yeah? Oh, yeah.
Speaker 1:Gonna be advertising crazy stuff to me. They're gonna be every other every other result's gonna be Koenigsegg. Here's a McLaren f one in your in your area. You can go pick it up right now. It's gonna be insane.
Speaker 1:Yeah.
Speaker 2:So so people have been so concerned, specifically Mark Cuban. We obviously had him on the show to talk about this last year Yeah. About this idea of like ads showing up in the results. Yep. And part of it, the reason I was never that concerned is like, if I just search best backpack for men Yeah.
Speaker 2:Which is kind of a joke in itself because It's gonna tell
Speaker 1:you rich, but you
Speaker 2:Well, a man shouldn't wear a backpack Sure. In the first place. So sorry to to any backpack super out there. Exactly. Well, you're not a man yet.
Speaker 2:You're not 21.
Speaker 1:Oh, true.
Speaker 2:Yeah. So you're good. You got you got enjoy your backpack years.
Speaker 1:Yeah. You should switch to a to a stainless steel briefcase that you handcuff to your hand. That's the correct thing for someone of your stature, someone of your importance. You got important stuff carrying around
Speaker 2:But anyways backpack. I search best backpack for men, I can scroll down and find a Reddit result Okay. From it's a second result after Nordstrom. Sure. But they also serve me a bunch of ads.
Speaker 2:I don't assume that the best backpack for men is the first ad. When it's clearly labeled and separated, I just assume this is an ad for somebody that sells backpacks.
Speaker 3:Yeah. But now I'm aware
Speaker 1:of that particular backpack.
Speaker 3:Yeah. Maybe.
Speaker 2:So I think it's fairly aligned, right?
Speaker 1:Yeah, that's why I don't search like best backpack for men. I search best highest margin, highest margin backpack men's backpack, men's backpack.
Speaker 2:Because you appreciate From the perspective of the business. Yeah. You want to support business.
Speaker 1:Yeah. And then so I want to know what's the highest margin backpack for whoever I'm buying from. Then I go to Shopping tab. And then it tells me, Okay, this is the highest margin one. If you want to support that corporation, make sure the most number of dollars flow to their shareholders, this is the backpack you should buy.
Speaker 2:Back forward slash in the in the chat says, he uses a Spider Man lunchbox. Let's go. See, I I can I can I can appreciate a Spider Man lunchbox?
Speaker 1:And soon, you'll be able to generate Sora of Spider Man in Chachapiti. It'll serve you an ad for that Spider Man lunchbox, and the virtuous cycle of commerce will continue. MongoDB, choose a database built for flexibility and scale with best in class embedding models and re rankers. MongoDB has what you need to build. What's next?
Speaker 2:Anyways, so plus pro business and enterprise tiers will not have ads.
Speaker 1:Yes. Super disappointing. They need to hammer, hammer, hammer the first bullet point here. Responses in ChatGPT will not be influenced by ads. We know that this is what they're gonna do.
Speaker 1:Technically, it makes sense. It's completely the the industry standard. Everyone knows that everyone in tech knows that this is how it works, but consumers will have all sorts of conspiracy theories. I mean, remember how big the whole, like, Facebook listens to your audio and then targets ads off of that? And and there's been so many so many, like, viral conspiracy theories around how ads work, how monetization works on these platforms.
Speaker 1:There's going to be a huge amount of just noise out there basically saying that ChatGPT is polluted by ads, overly influenced by ads. And so they need to beat that drum really, really hard. Good that they're doing
Speaker 2:it on
Speaker 1:the main account. It's good that they're doing with Fiji Simo's post. But they're going to have to they're gonna have to emphasize this in comms on every podcast that they do, every announcement.
Speaker 2:Yeah. People people seem to be really riled up about this. I'm seeing a bunch of comments on the post. They're they're upset. I don't I don't get it at all.
Speaker 2:The whole point is that ads ads have made it so that wonderful services on the Internet have been free Yeah. For decades. They're generally aligned.
Speaker 3:Mhmm.
Speaker 2:Even target people report they like targeted ads.
Speaker 6:Yeah.
Speaker 2:It's annoying getting an ad that's not targeted. Yeah. Like why are you why are you wasting my time?
Speaker 1:I agree.
Speaker 2:This is funny. Somebody somebody in here says, some poor fifth grade teacher grading the worst World War II paper ever turned in when it suddenly starts talking about World of Tanks and North. Just
Speaker 1:copy pasting the ads and some
Speaker 2:Honestly, maybe that's a feature though, you know, because you get two impressions.
Speaker 1:Two impressions. Yeah. There's gonna be some hilarious hallucinations or someone's reading from their press release and they accidentally have an ad in there. Oh, that's gonna be amazing. I love it.
Speaker 1:I love it. The Wall Street Journal had a little bit of an overview on this. OpenAI to begin testing ads in ChatGPT and push for fresh revenue. The company will be showing ads in the free version of the chatbot as well as its
Speaker 2:Let's give it up for fresh revenue.
Speaker 1:Fresh revenue. Ads will appear at the bottom of ChatGPT's answers and be labeled. Interesting. The bottom of the answer? I want it at the top and the middle and the bottom.
Speaker 1:And I also definitely want to show the ads while it's thinking, like show because you can run an ad auction and show an ad while you're waiting. I mean, Uber's done this while you're waiting for the car. There's no reason why that shouldn't be there, especially if you're doing a deep research report or anything. I do wonder how the ads will surface in the audio summary. So if you fire off a deep research report, it throws an ad at the end.
Speaker 1:If you're listening to that audio, will that play the ad at the end? Will that sound like a podcast ad? Or will it sound like something else?
Speaker 2:Like, will it be clunky? I'm assuming that they're not doing audio in these. Right? Imagine if you do a Google search and it pops up a video. Yeah.
Speaker 2:It's like trying to play sound.
Speaker 1:It's annoying. It could
Speaker 2:be You'd be throwing your laptop.
Speaker 1:Yeah. Yeah. But I mean, a lot of times people will go to ChatGPT, fire off a query, and then when the query comes back, they will just hit the play the audio button. And will it read the ad as well? I don't know.
Speaker 1:Maybe. But the company said ads wouldn't influence the chat bot's answers, of course, and that user conversations wouldn't be sold to advertisers. That also makes a lot of sense. Also, Well, don't really
Speaker 2:to be clear, my understanding is they will use what they know about you to offer better targeted ads to advertisers. They're just saying they won't explicitly be like, hey, we have here's this person's email, and here's what they like, actually sell that specifically.
Speaker 1:Or even Or not there's not even an option to go to OpenAI and say, hey, I'd like to buy 10,000 conversations about backpacks. That's not an option. What you can say is you can say, I have a backpack. Find me some customers who want to buy backpacks, and they will say, sure. We'll do that.
Speaker 1:And we will go into the black box and, you know, sort and match you and give you the lowest cost per acquisition. You tell us that you're willing to pay $5 per customer, dollars 2 per customer, we'll get you $2 customers. We'll do our best. This is the auction model.
Speaker 3:Yeah. The thing
Speaker 2:here is if you are a business owner
Speaker 3:Yes.
Speaker 2:You should be incredibly excited about this. Yes. Every time a a major new ad platform has come out
Speaker 1:Yes.
Speaker 2:It it it it is an opportunity to drive a tremendous amount of growth really, really quickly, because they typically under under price under price the ads in the short room. Mhmm. In the short run, just to get volume, just to get a lot of customers in. Mhmm. And so when Sean Frank comes on later Yeah.
Speaker 2:We can talk with him about this. I I remember like early days of, like, Snapchat advertising. Like, Connor over at the Ridge was, getting, like, tremendous, tremendous results. Yeah. Right?
Speaker 1:Yeah. Cisco. Cisco is critical infrastructure for the AI era. Thank you to Cisco for powering TDPN. Dean Ball is back on the timeline.
Speaker 2:We know Dean Ball.
Speaker 1:We know Dean Ball. He says flowers no way. We're reacting to the screenshot that flowers hinted math before numerals. Pottery made by people of the Holopheon culture who inhabited Northern Mesopotamia between June, painted flowers with four, eight, sixteen, thirty two petals. Some of them have 64 petals.
Speaker 1:They were obsessed with exponential growth. They were obsessed with compounding, the power of compounding.
Speaker 6:It's the Claude logo.
Speaker 1:It is the Claude That's hilarious. I love it. That's amazing. Anyway
Speaker 2:This
Speaker 1:is Graphite. Graphite. Dev. Graphite. Code review for the age of AI.
Speaker 1:Graphite helps teams on GitHub ship higher quality software faster. Where would you like to go next? This is Victor's story.
Speaker 2:Has a fantastic post. It says, had dinner with wife at a Mexican restaurant last night. Looked at the menu. They were trying to raise prices from $18 to $24 for her favorite entree. Wife was like, I think we can have Claude make this.
Speaker 2:Told waitress trying to goo to gouge us, they done. One week sprint. Claude cloned and replaced.
Speaker 1:Cochinita Pabell and Carnitas.
Speaker 2:Restaurant manager freaks out. How do we solve this? This is gonna happen so much in 2026.
Speaker 3:Just telling the restaurant owner
Speaker 1:that you're gonna do it at home because
Speaker 2:We cloned your entree with Claude.
Speaker 1:We cloned you. We cloned it. We cloned it. I just cloned it.
Speaker 2:This is this is pretty funny. Jeff Huber sharing. This this post from r /teacher. Every year these kids come back with a new annoying quirk dot dot dot. Claude boys are apparently the new thing.
Speaker 2:In my tenth year of teaching, mostly freshmen, ever since the pandemic, there's always a new thing students bring to school that they learned over the summer from the Internet or wherever. Mhmm. The newest thing here is a flock of self proclaimed Claude boys who carry AI on hand at all times and constantly ask it what to do. They have their entire personality revolve around Claude prompting an AI. When we went around doing an icebreaker, four of the five kids, some variation of I live by Claude and die by the Claude.
Speaker 2:That's their fact. Just about an hour ago, when I assigned the first assignment of the school year, one of the Claude boys was bold enough to say, if Claude says I do it, otherwise, I don't. I told him if he asked Claude, he would be getting a call home on the first week of high school. He asked it anyway and it said to do the homework.
Speaker 1:That's amazing.
Speaker 2:This is a copy pasta from the Yes. The boys?
Speaker 6:What what except instead of asking Claude, you flip a coin.
Speaker 1:You flip a coin. Yes. But if the coin The boys boys.
Speaker 6:Coin boys are apparently
Speaker 3:a new thing.
Speaker 1:This is very funny. I like the I like the copy pasta. This is amazing. Very, very funny. Well, you've been trying to make Jemmy Boys happen, which I which I think is underrated.
Speaker 1:We should we should get a copy pasta whipped up, of course, because we are we are sponsored by Gemini three Pro, Google's most intelligent model yet. They got state of the art reasoning, next level vibe coding, and deep multimodal understanding. I have some advice for Jeff Huber. He's the founder of Chroma, and you know, he's trying to change the world. And if he wants to change the world, he should raise capital at the New York Stock Exchange.
Speaker 1:Jeff, it's that simple. Head over to the New York Stock Exchange. When you wanna change the world, you raise capital.
Speaker 2:Call Martin.
Speaker 5:Call Martin.
Speaker 2:Let's get into the mansion section.
Speaker 1:Let's get into the mansion section. I've been waiting all day. The the the the the first big piece is is about the great property transfer. Gen Xers and millennials will inherit trillions of dollars of real estate over the next decade, and it's already reshaping how luxury homes are bought and sold. So over the next decade, roughly 1,200,000 individuals with net worths of over $5,000,000 are projected to pass down more than $38,000,000,000,000 globally.
Speaker 1:That is a huge amount. Real estate is poised to play a significant role in the great wealth transfer. Gen Xers and millennials are set to inherit 4,600,000,000,000.0 in global real estate over the next ten years. And this is why it's so important to win the genetic lottery when you're born.
Speaker 2:We didn't. We didn't.
Speaker 1:I won't be inheriting anything. But Stop making excuses and maybe get a time machine, go back in time and be born to someone with a luxurious state that you can inherit.
Speaker 2:Yes. Maybe even maybe even multiple. We already read about that. So m six,
Speaker 1:let's kick it over to M6. What are
Speaker 2:some Parents are buying earlier and bigger. It isn't a new phenomenon for well off parents to give children a helping hand in securing a first home. But at the high end of the market, agents say more parents aren't waiting for kids to inherit their wealth. They are buying them luxury properties sooner. It's reshaping the definition of luxury real estate as more sellers cater to the tastes and preferences of a younger generation
Speaker 1:The price points have gone wild, said Ian Slater, a Compass agent who works with ultra wealthy families in New York. I used to commonly see people buy 3,000,000 to 5,000,000 apartments for their 25 to 30 year old kids. Now, I see them buying 15,000,000 to $30,000,000 apartments for their kids. That is absolutely crazy. When you're buying for children, coops are a real no no, since many coop boards want the occupants of the units to be financially independent.
Speaker 1:By contrast, condos offer flexibility, which is especially
Speaker 2:They can't make the global global. What makes you makes you more financially independent than having a trust fund that just Yeah.
Speaker 1:I don't know. I mean, I guess if you're at a co op, want to just be around other people who like aren't nepos or something. You want people who have like built their own businesses or something. I don't know. Well,
Speaker 2:I won't Yeah. I there I won't stand for for for Nepo slander. Slander.
Speaker 3:Yes. Yes.
Speaker 2:Seriously. I love I love when a Nepo utilizes every available resource
Speaker 4:Yes.
Speaker 2:And just absolutely dominates. Yeah. It's beautiful. You gotta appreciate
Speaker 1:Well, let's look at Gene Hackman's Santa Fe compound, which just listed.
Speaker 2:Wait. What did how did he how did Gene Hackman make his money? Actor.
Speaker 1:He didn't know that?
Speaker 2:No. I don't. This guy was born in the in 1930.
Speaker 1:He's he's amazing. He's a Hollywood icon.
Speaker 2:He's he's not a hack.
Speaker 1:No. He's not a hack. French Connection, Unforgiven, Superman, The Movie, Enemy of the State, that's where I know him from. Okay. Enemy of the State's a great movie.
Speaker 1:He's in The Is
Speaker 2:this on the movie list?
Speaker 1:He's in The Firm.
Speaker 2:Are any Hackman movies in the chat movie list?
Speaker 1:Behind Enemy Lines, that's a great movie about a downed fighter pilot or spy, a U2 spy plane. I think it's Owen Wilson who goes down and and crashes and needs to and needs to get back to his team, to his side. It's a fun it's a fun ride. I I recommend it. So nearly a year nearly a year after the shocking deaths of Hollywood icon Gene Hackman and his wife Betsy Arakawa at their compound in Santa Fe, New Mexico, the couple's 53 acre estate is coming on the market for just $6,500,000.
Speaker 1:I had no idea that Santa Fe, New Mexico was so affordable. We were looking at a place in Nashville, which I would put at the same level
Speaker 2:as Santa John, I gotta stop you there.
Speaker 1:Well, explain.
Speaker 2:I mean, saying that is this a bit? Saying No. So at 6 and a half million, it's so affordable?
Speaker 1:It is. I mean, we we looked at a we looked at a three bedroom apartment that was like $25,000,000 in Nashville last year or last week. This is 13,000 square feet, 53 acre estate, and it's one fifth of the price. I'm just saying, like, on a relative basis, do you go Santa Fe at six and you get 53 acres, or you're living next to John Fio and you paid 25 mil, which one would you go for?
Speaker 2:Okay.
Speaker 1:Pick it. Pick it. Which one would you go for? I'm going Santa Fe all day, personally. Hackman, the two time Oscar winner.
Speaker 1:Let's see. There will be some buyers who are just adverse to purchasing property, blah blah blah. Let's move on to Washington DC where the prices are way up, way over 6. Six is six is low compared to this $28,000,000 home. It's DC's most expensive home, and it's now owned by the owner of the Washington Commanders, Joshua Harris.
Speaker 1:And this is one of those interesting things where you can build a massive private equity firm, a a a massive financial institution. Josh Harris, of course, built Apollo, the cofounder of Apollo. But he's known as the owner of the Washington Commanders even though that's not, like, his life's work. It's an interesting thing. But when you buy a sports team, that's the thing that follows you around forever.
Speaker 1:Yeah. And so the billionaire investor Josh Harris, the owner of Washington Commanders' NFL team, and his wife, Marjorie Harris, have paid $28,000,000 for a storied Washington DC landmark with plans to return it to its original use as a single family home. The sale is a record for the city. It's known as the Halcyon House. The federal style building in Georgetown dates the late seventeen hundreds.
Speaker 1:The roughly 30,000 square foot house which has a large garden with a pool in the back wasn't publicly listed at the time of the sale, and then the deal happened quietly off market.
Speaker 2:Would you live in a house like this, John? 100%. I knew it.
Speaker 1:Absolutely. Would you not?
Speaker 4:I knew it.
Speaker 1:It's amazing.
Speaker 2:This style of architecture is extremely depressing to me.
Speaker 1:What do you mean? This is like the Lindiest thing. You know who you know who lived there? You know who lived here first? This was built for the first secretary of the native No.
Speaker 1:I under understand Stoddard. You are
Speaker 2:in I habit understand the appeal for for But for
Speaker 1:What and is depressing about this? This is a beautiful house. Is there not enough light or
Speaker 2:something? Don't know. Potentially, if they, like, did a pretty hardcore remodel to it, really, really brought it.
Speaker 1:What's not to like? It looks beautiful. I don't understand.
Speaker 2:Oh, it just looks a little too vintage.
Speaker 1:Oh, it's ridiculous. It does have a crazy, like, there's a roof inside
Speaker 4:And it
Speaker 2:looks like a frat house.
Speaker 1:Do you see this? That does kinda look like a frat house.
Speaker 6:Look at It looks like
Speaker 1:Why do have a roof inside under your roof? Do you see what happened here? They got roof roof roof. It looks like they just built another house, an addition on on top and so
Speaker 2:Yeah.
Speaker 1:It's There is some
Speaker 2:chaos here. It's it's a too fratty for me. It looks like the beer It looks like the floor would be sticky with
Speaker 1:The floor's sticky? Somehow, I don't think this $28,000,000 property has a sticky floor, but you never know. They have they have three TVs up there. That's sort of You watch three different football games.
Speaker 2:Well, if you own an NFL team Yeah.
Speaker 1:You gotta watch all the games.
Speaker 2:Yeah.
Speaker 1:The market the previous record in DC was set in 2024 when Cantor Fitzgerald's CEO Howard Lutnick purchased Fox News anchor Bret Beyer's Foxhall Estate for 25,000,000. Mark and Hunter McFadden of Compass represented Doctor. Kuno in the Georgetown sale. Harris was represented by Sotheby's International. Figma.
Speaker 1:Figma Make isn't your average vibe coding tool. It lives in Figma, so outputs look good, feel real, and stay connected to how teams build. Create code back prototypes and apps. Okay.
Speaker 2:I hate to interrupt the mansion section, but we have to pull up this video from the Houston Texans. Let's do it. They are
Speaker 1:What's going on?
Speaker 2:Their new video Mhmm. Is Call of Duty themed.
Speaker 1:No way.
Speaker 2:And I just gotta wonder Oh. We created COD.
Speaker 1:Yes. A 100%.
Speaker 2:We created the
Speaker 1:to reacting to the latest video from the Houston
Speaker 2:in the timeline.
Speaker 1:And while we pull
Speaker 2:Here it is.
Speaker 1:Up. Here it is.
Speaker 2:What is this? Can we get The
Speaker 1:match begins in 04/03/2010. Eliminate the enemy team.
Speaker 4:Down the left side, and Kirk with a diving attempt, and he's got the catch.
Speaker 1:Oh, the hit marker. The hit marker sounds good.
Speaker 2:Long shot. It's so funny because we were just talking earlier this week. We did the hit marker Yeah. Sound effect.
Speaker 1:Touchdown. Chewstats. Hit marker sound. Air raid. Air raid.
Speaker 1:Kick. What sound effect? UAV online. Another hit marker. UAV online.
Speaker 1:UAV online. That's us. That's not them. Right? That was you?
Speaker 2:We gotta figure out if they did this if if they did this before
Speaker 1:Good. The graphics package, the I I I didn't realize how iconic the text was in in Cod. Alright. Glow right there. The the the the glowing letters, that's just you know, you know, Cod to a t.
Speaker 1:They really nailed nailed that. That's very fun.
Speaker 2:I wonder I wonder what inspired that.
Speaker 1:Anyway, let's move on to the last the last story in the mansion section. But first, let me tell you about railway. Railway simplifies software deployment. Web apps, servers, and databases run-in one place with scaling and monitoring and security built in. So this is a renovation.
Speaker 1:I want your take on this renovation. A Texas couple transformed a 945 square foot room into a space where they could watch sports and entertain friends.
Speaker 2:See, this looks fantastic.
Speaker 1:Thank you.
Speaker 2:This is what I wanna see.
Speaker 4:Is what I wanna see on the last
Speaker 1:I agree on this.
Speaker 2:I wanna see I I I wanna see this More dark level of Renault Yes. To the last property.
Speaker 1:But I like this does capture some of the opulence, some of the details, some of the texture. Yeah. I this is not flat white walls. There's lots of layers. There's trim.
Speaker 1:I like the blue, the way it goes with the brown, the gray couches. Everything sort of like harmonizes, but it's not bland. It's not flat. There's a lot of detail and layering there. Even behind the TV, you see a sort of like textured backsplash.
Speaker 1:I think they did a fantastic job on this, and they spent $465,000 So when financial consultants Damon Cronus and Julie Cronus decided last year that it was time to renovate their game room, they wanted to keep it fun for the two teenagers, but add a layer of sophistication. You always got to do that. They're in their early fifties, and they drew inspiration for their new entertainment lounge during a visit to Manhattan in a stop by the UBS Arena Preview Club, a temporary showroom for the arena's premium space under construction. Styled in vintage hues of rich gold and deep blue with dark brown wood, the space had just the upscale feel they wanted for their home. They brought in pulp design studios and transformed it.
Speaker 1:The owners wanted it to look like a lounge, like a private sports club. We took the inspiration and created our vision to suit their needs and lifestyle. The 945 foot square square foot space was designed for versatility, allowing guests to enjoy different activities. At once. It was tailored to host movie nights, lively cocktail parties, and Sunday football gatherings.
Speaker 1:The room had to have maximum flow for people to move about. And so you see they have a horseshoe couch, but there's a gap in the middle, so you can flow around That's key. Either way. So it's kind of like two L couches nestled next to each other.
Speaker 4:Very, very smart.
Speaker 2:Two L's. Custom making a W Two
Speaker 1:piece. I like it. The custom two piece sectional sofa set them back $26,000 and it allows guests to move in and out of the TV So
Speaker 2:you can tell the floors are not sticky here.
Speaker 1:Yes. Definitely.
Speaker 2:Which is key.
Speaker 1:The room is narrow, and we didn't wanna have a sectional that you had to walk all the way around. And so for additional seating, ottomans pull out from under the coffee table, swivel stools accompany console tables beside the sofas, tall stools are tucked under the nearby bar top and custom banquet hugs a curve of windows. Performance fabrics and durable materials were chosen to endure active crowds. They're not letting the beer soak the walls. They got performance fabrics and durable materials in there.
Speaker 1:They're not they're not worried about a sticky floor. A sticky floor here, a sticky floor there, it's gonna be okay. They're gonna mop it up. Those performance fabrics are built to handle the stickiest beer. Maybe even the athletic brew.
Speaker 2:Some athletic Yeah. Some athletic brews.
Speaker 1:You're chugging athletic brews. You're spraying them all over. You're cheersing, slamming them on your head. And they get on
Speaker 2:the Honestly, athletic brewing, which we have we have a few here. Athletic brewing really needs to do a hard sell to cheeky pint and be like, look. You guys are We hardly can tell
Speaker 1:We'll have to ask him if he uses Stripe currently because maybe there's a
Speaker 2:We can tell can washes
Speaker 1:the other deal there.
Speaker 2:Yeah. Yeah. Yeah. We can tell you don't have it in you to get hammered on Yeah. Podcast.
Speaker 2:Yeah. But we want you to be able to enjoy the taste of beer.
Speaker 1:Yeah. I like that. A little cheeky athletic brewing. I like that.
Speaker 2:Cheeky brew.
Speaker 1:Beyond watching sports across two TVs, the family enjoys competition of their own. Oversized scrabble board hangs on the wall to set the tone. They spent $25,000 on a table. Who knew tables can get so expensive? We've been looking at tables.
Speaker 2:I mean, I feel like we we did. We keep We did. We're just trying to get a new table.
Speaker 1:I know. We want a bigger table.
Speaker 2:Want some features,
Speaker 1:but very quickly you get up into these big numbers. So the table the round Cambria table was crafted from man made quartz with a metal base. We bolted the base to the floor because Damon and Julie wanted to be sure it wouldn't topple around the teens if people are getting hammered down there standing on the table, they don't want it falling over, so they bolt into the floor. The chandelier set them back $3,900. The Cavalino X Large radial chandelier from Visual Comfort adds sculptural interest and focused lighting to the game table.
Speaker 1:Chairs, $2,400 each, covered in Everly fabric having coasters. Casters allowed them to move freely, perfect for group activities, you can move them around. The window shades, $12,000. Motorized Roman shades create a blackout environment that's ideal for TV watching. That's a cool feature.
Speaker 1:And the banquet cost $27,000. The bottom is covered in ultra suede green and ochre from Crovat, and the back in lulu
Speaker 4:velvet I like the sound of that.
Speaker 1:From s Harris. We had to do a custom banquet so that it fit the curve of the window to maximize seating. They're all about maximizing seating over here. Well, congrats.
Speaker 2:And also In Morning.
Speaker 1:Fin dot a I, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. What other news do we have, Jordy?
Speaker 2:Tell me. Harmonic. Harmonic. Idea is investing in math. Tom They're investing in Vlad's AI startup Harmonic.
Speaker 2:They're investing a 120,000,000. Hit. Hit. Emerson Collecting Collective is also joining as a new investor alongside existing backers, Ribbit. Ribbit.
Speaker 2:Ribbit. We need effect. Mickey Malkus, Dublin. Mickey.
Speaker 1:He's a big Robin. How
Speaker 2:index and Kleiner.
Speaker 1:Oh, Sequoia. Yeah. We'll have to talk to the Sequoia folks about how harmonic fits into the post AGI age. Because we have Pat gradients on
Speaker 2:you. What if it turns if it comes out that Harmonic is just working on a child GPT style app to help kids do math problems?
Speaker 1:That's it.
Speaker 2:That's a play. Yes. It's a trillion dollar opportunity.
Speaker 1:Yes. I love it. Well, we have our next guest in the Restream waiting room. Let me tell you about Labelbox while we bring him in.
Speaker 4:Get in the box.
Speaker 1:Reinforcement learning environments, voice robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And we have, oh, nice and cold athletic brewing, hazy IPAs. I will enjoy one of these while we bring in our guest, Bill Bill Schuufelt from
Speaker 2:Here we go.
Speaker 1:The restream radio room.
Speaker 2:Welcome Cheers.
Speaker 1:To the TV panel show. How are doing, Bill?
Speaker 3:Incredible to be here. Love the show. Thank you so much. Even though I'm East Coast and not in the AI world, you know, I just sell things that hurt when you drop them on your feet over here. But I'm a huge It's a huge fan of the show.
Speaker 3:I'm so excited to be here.
Speaker 2:Yeah. It's so so great to have you. I was just trying to remember, I listened to like about ninety minutes of you on a podcast. It must have been like four or five years.
Speaker 1:I Logan Bartlett. That was a fun one.
Speaker 3:Yeah. Got a number of
Speaker 1:great. Yeah. Yeah. He's awesome.
Speaker 2:What do you think about the pitch of getting Are you familiar with the Cheeky Pint podcast from Stripe? Have you seen this?
Speaker 3:I I love it. Yeah. Okay. I'm actually thinking about cold emailing them to get
Speaker 1:So out of
Speaker 2:elephant the elephant in their pub is that they're not really crushing beers.
Speaker 1:They're not getting actually drunk.
Speaker 2:And so I think you should make a special for the team over there so they can really start indulging. Well,
Speaker 3:I I love that. I'm a fan of them. Ireland. I've got a bunch of their books. So yeah, would love to reach out to them.
Speaker 1:Fantastic. Let's take it back to the beginning. Since it's your first time on the show, give me the founding story. Give me what you were doing before. It's such a huge trend now, mostly thanks to you.
Speaker 1:Did you imagine that the trend would become so big? What was what were the inciting elements?
Speaker 3:Yeah. I think it there's, like, both, like, the personal story and the category story and, like, the health and wellness megatrend behind it. You know, even zooming out to the trend, I know, you know, so much of, like, the megatrends in business these days and big numbers around AI, and it's rare rare to see something that is, like, so solidified Yeah. Very visible long term. And I can get more into, like, how big I think the trend will be and why it'll be so big over time and why I have good line of sight to that.
Speaker 3:My personal story really is I I was working in the hedge fund world, had a great finance job. I I came that for free. Went I went view. It's Not
Speaker 5:to it.
Speaker 3:I went to, like can do it. Went to college. Exactly. Yeah. When but I, like, went to college with that view, went right into it in my career, never thought I'd do anything different.
Speaker 3:And Yeah. But I was living this high performance lifestyle where, you know, twelve years ago, I was about to get married. I was thinking about my future life, and alcohol was kind of a ceiling on my my work productivity, my relationships, my sleep, my workouts, you know, all the things that are, like, so commonplace in knowledge now that, like, you know, all the fitness variables, the podcasts, like Peter Tia, Huberman Yeah. Rhonda. Like, all these things are, like, so evident now, but I was, like, living that and feeling it myself.
Speaker 3:I was you know, I had an a very intellectually intense job at Steve Cohen's hedge fund where you're graded on your output every day. I was at the desk from 6AM to 6PM, 150 work dinners a year, then out with friends and family on weekends.
Speaker 2:A 150
Speaker 1:work dinners
Speaker 2:is insane. One for for us, I mean, we we have like a maybe not as intense as your schedule with Steve Cohen, but it's very you know, we're here. Have to get to the studio at nine. We go live at eleven. There's very little downtime.
Speaker 2:And so we do one work dinner, and it throws everything off. It's like throws off
Speaker 3:the whole week. Yeah. I have huge admiration for your always on. Like, I think about that all the time. Yeah.
Speaker 3:But, yeah, we had I had 200 brokers, and I had to do research then there was also and you have to have good relationships. So when you, like, pick up the phone and need to convey something in ten seconds that you know that person Yeah. So, anyway, that's a long way of saying, like, I was very interested in health, longevity, my fitness, my performance way before it became such a commonplace trend, and I was living that. And I really started saying to people, like, I I really wish I could go out to all these dinners and be in the moment without alcohol. And, you know, I saw the trend happening over my finance career where people were just as excited to go to Barry's Boot Camp or something in the morning rather than go to a steak dinner at night.
Speaker 3:And so but I just really wish there
Speaker 2:was an another
Speaker 3:side of that.
Speaker 2:Boy four Berry's Boot Camps in a day. So
Speaker 1:so why not Shirley Temples? Why didn't you just become the Shirley Temple king drinking six of those? Like Woah. Like, what what what were what were you doing before you actually decided to build a new product in the category? Were you on just, like, soda water and lime?
Speaker 1:What was the what were the options?
Speaker 3:Well, so I saw that huge impact on my life Yeah. Just by, like, my drinking and ultimately stopping my drinking. Yeah. And then thought, you know, if I could just bring moderation to the masses and just make it accessible. Like, I have no view on, like, bringing back prohibition, sobriety, or anything like that.
Speaker 3:But just making the other side of the menu delicious, like, match the culinary expectation and the experience that and as I started to look into the numbers behind it, 50% of adults even at that point had point one drinks or less per week. And it was really only, like, the top 10% of adults have more than, like, seven drinks a week. And it kinda hit me that the adult beverage world is also just totally missing a majority of the population and their needs. And so I'll skip, like, the years of business research and surveys and stuff like that to get conviction around it, but, ultimately, it was, like, right out of my lived experience, and I wanted it to exist and quit my job to build that.
Speaker 2:How much how much credit do you give just how good the product is with the success of the company? Because I think in CPG, you're not the first finance Chad to like wake up one day and say, wanna start it. It's it's kind a common path.
Speaker 1:It is.
Speaker 2:Like, you know, they're kind of like bored. They're, you know, they they they try some drink. Like I I've met as an angel, I've met so many people over the years that like are trying to make the leap from finance to being an entrepreneur and CBG because it's like you're going from like spreadsheets to something that's like super tangible and you still have to use you have to spend plenty of time in spreadsheets. And I think there's something really appealing about like going from like finance to like the tangibility But of the issue is like so many people that are incredibly talented, they just end up like they end up developing a developing a product that's not amazing and then it just you can't even live up to your talent level or your potential because you're just like handicapped by the product. And when I tried that, you know, having this product even when I had it for the first time, it's like it's just a fantastic product.
Speaker 2:It tastes exactly like a beer. It tastes like a sort of a, you know, celebratory moment or it tastes like, you know, winding down at the end of the day, which is like it delivers something unique in the way that like a LaCroix or just some other like you know, alternative actually works.
Speaker 3:Yeah. That is exactly it. And we have an incredible cofounder, John Walker, and the two of us home brewed on Gatorade Jugs, and we took it down to the screws and reinvented the way nonalcoholic beer is made rather than where, historically, nonalcoholic beer was a very industrialized, heavily processed thing. It was only a lager category as well. And so we took the time, and John said he wouldn't even sign on if if I if I didn't agree that we wouldn't launch the beer, if it wasn't indistinguishable from top craft beers from day one.
Speaker 3:Yeah. And I I think that's the huge differentiation. We we made the very unattractive decision to investors to take take a capital intensive route. We've built all our own breweries. We've put over a 130,000,000 into our manufacturing.
Speaker 3:Just very unattractive to investors if I can repeat that.
Speaker 2:Attractive now.
Speaker 3:Yeah. And they but it was so we could own our proprietary process, own the quality of what we're doing every step of the way, where yeah. As you were saying, if you were to, like, nick Shirley a lot of CPG or especially the competitors in our category, like, you would find that they just totally outsource all the production. There aren't brewers on the team, and it truly had to be different quality and different experience. And we really invested to change that perception of the category, and that's still very rare in non alcoholic beer.
Speaker 3:There have been Yeah. 280 brands since we launched, and a lot have had very disparate futures.
Speaker 2:Well, And what's happening with the category right now broadly? Because I've, you know, I've again, as an angel in LA, there's so many CPG founders. I've seen so many of these companies try to come up, not just in kind of the non alc beer category, but in other categories. And one of the things I always struggle with as somebody who dramatically reduced my drinking probably like six years ago from drinking like a handful of drinks once a week to like drinking like one or two drinks like once a month, really. Like, so really limited it.
Speaker 2:And so I'd get these pitches and people would be pitching like something that doesn't taste like alcohol at all.
Speaker 1:Mhmm.
Speaker 2:And I'm like, I I I'm the buyer here, but you're selling me a product that I can I can drink a Diet Coke? I can drink any number of other things. And so like your competition is just is not like the non alc category. For some of these new non alc brands, their competition is just like every single drink that doesn't have alcohol in it. And that just felt like a super tough position.
Speaker 2:Whereas for this, it's like if you want a beer but you don't want alcohol, like, your options are, like, much more limited.
Speaker 3:Yeah. For sure. And as as I looked at the TAM of the market, the way I thought about it was, a, 50% of the people really aren't drinking, and 99% of people or even people who do drink are not drinking, like, 99% of the time they're awake. So there's a huge opportunity to meet new occasions. And those occasions you just described losing over the years, we're trying to bring those back, bring the social connection back, get people out multiple times a week.
Speaker 3:But I think that, like, the clearest way I think I could say this isn't, like, why I think it's such a big trend is, you know, the overall beer category per the Brewers Association is north of a $100,000,000,000 in all retail sales. Craft beer itself is 28,000,000,000, supposedly, the Crappers Association. If you go back, like, fifty years, light beer was one of the biggest megatrends to ever hit beer, and that is an enormous part of the beer category today. And but that was a huge trend up until about the turn of the millennia. And then we started to see, like, people well, the light beer trend was driven by, like, the nutritionals, where people wanted superior nutritionals to what existed previously.
Speaker 3:Then you had big trends in craft beer and flavored RTDs, which were, you know, light beer might not have that flavor. We wanna, like, have the nutritionals but the flavor. And where nonalcoholic beer comes in is all the experience, superior nutritionals. It's about 30% of the calories plus all the flavor of great craft beer, and it's emerging in this new big megatrend that I think has really good line of sight to be the next huge thing in beer. And I I'm a very delusionally optimistic person, but I do think nonalcoholic beer will be significantly bigger than craft beer and a huge part of the overall beer category in the future.
Speaker 2:Yeah. Where where else in beer is there, like, meaningful growth?
Speaker 3:Well, that's also the problem too is every other like, most CPG overall, but especially BevElk, all the innovation is, a one for one substitute for the same consumer in the same occasion. And and even some of them are, like, you're substituting one thing for many. Like, a THC drink is a one one for, like, six substitute. Oh, sure. Yeah.
Speaker 3:And so what we're doing is we're bringing in like, a lot of people drink our beers within the same night as alcohol. Our cons 80% of our consumers drink. So we're bringing a lot of people back into the category, plus 25% of our drinkers are new to beer altogether. So, like, this is really additive to the beer world for the first time. Yeah.
Speaker 3:And then, yeah, as you think about those occasions, there's just a lot of occasions to layer in. I guess on the broader beer category too, the last few years have been the worst beer years of our generation in alcohol for a number of reasons. I think part of it is the category is not connecting to the next wave of consumers. If you look across the spokespeople in the major brand TV ads, most of them in their seventies, one of them's in their eighties. One brand's about to bring back an 87 year old spokesperson from ten years ago.
Speaker 3:So, like, this is a cohort. This like, this is not the cohort we need to meet. Like, it is like, we are bringing beer for the modern, healthy, active adult. We have great aspirational athletes and chefs and people behind it. But more than anything, we're just trying to build, like, a really timeless brand, and I I could share more about our marketing and how we're thinking about that differently too.
Speaker 1:I I wanna get to that, but first, wanna know about what how is your business different or similar to other beer companies that are higher alcohol? Do you need to be 21 to buy this? Are you subject to the three tiered system? Can you sell this online? What's different or similar to just higher alcohol beer distribution and sales?
Speaker 3:Yeah. I I mean, as a finance grad coming into this category, was like, wow. There is there is no tech in this sector, and there is margin everywhere. Yeah. And, like, I very quickly got on the ground and realized that there's a lot of reasons why, like, beer distributors are great at what they do.
Speaker 3:It's an incredibly capital intensive. Mhmm. They're basically a big logistics business. And so we do largely plug into the three tier system
Speaker 1:Yeah.
Speaker 3:But that's our opt in. And then So you
Speaker 1:legally, you don't have to necessarily because you're regulated slightly differently.
Speaker 3:Correct. And then we were the first beer brand to launch nationally on d two c also. And so that was, like, an absolutely enormous marketing advantage where Okay. You know, any high flying brewery of the 20, you'd have to wait in line outside of their brewery for a limited release in the locale where, you know, we could we could lose tons of money shipping beer all across the country.
Speaker 1:So And then is there any age restriction?
Speaker 3:Not in most states.
Speaker 1:No.
Speaker 3:But, yeah, typically, it's you know, we we're trying to establish it for adults in typical beer occasions celebrating life's special moments. Yeah.
Speaker 1:I'm mostly trying to catch Tyler because I saw him grab one. And if if there's some rule that he's violating, I'm gonna call the cops right now. I see him over there. I
Speaker 3:I mean, we are huge on the Michigan campus.
Speaker 4:Oh, yeah.
Speaker 3:Know, we There you go. Like, some of I mean, some of the, like Yeah. Just like colleges across the country were enormous. Next generation is so much more moderate than prior generations. And I I think the perception of alcohol has changed something like 14 percentage points in three years, which, you know, it's it's happening really fast.
Speaker 1:Talk about the the the the formulation process a little bit, not to go too far back. But a lot of folks, when they're doing a CPG project, they go to a co packer, and they get a dog and pony show. And they come out, they're like, we formulated the perfect thing for you or flavor house or some supplier. They tell you this is the best thing possible. And then if you're not sharp, sort of the dog and pony show can kind of overpower you.
Speaker 1:Was there any point where you were working with a manufacturer and you had to sort of override them? Or what was the initial scale up like?
Speaker 3:It it's really been all internal since day one.
Speaker 4:Whole time.
Speaker 3:Wow. I I basically put my life savings into our first 10,000 square foot warehouse Wow. Gatorade jugs.
Speaker 1:It's amazing.
Speaker 3:Me and John's salaries a bit. And then raised raised an angel round to build that first brewery. Did a 120 meetings. Huge rejection percentage. But, yeah, in that, we wanted to approach it in a totally different way.
Speaker 3:Yeah. And so we're confident we arrived at where we
Speaker 2:have I I I I feel like consumer is the one category where you just really don't know until you start selling the product. Like, can easily imagine getting this pitch and just being in the mindset of like like, if I'm if I wanna drink a beer, I wanna I wanna I want alcohol. Yeah. And it just turns out it's like totally just totally false. Yeah.
Speaker 2:Right? I wanted to ask, I know you did a ton of like community IRL marketing early on. And I wanted to ask you about how you advise other consumer brands when they're early on and thinking about how to spend their time, what channels to really focus on. Because for certain consumer categories, if somebody's like, yeah, we're gonna really focus on events and community, I'm just looking at them being like, you should just sell the product. Like, just sell the product.
Speaker 2:Like, spend all your time selling the product. Whereas you guys, like, I know invested a lot in the in in kind of the the running running world and and saw a ton of great results.
Speaker 3:Yeah. I mean, by invested a lot, like, a lot of my time and weekends. Yeah.
Speaker 2:Like, every every weekend.
Speaker 3:Yeah. We had no more resources after all the stainless steel to put into marketing, so that was, like, all on us. But, yeah, just touching quickly on two things you said there where, like, a lot of people both, a, don't contemplate nonalcoholic beer. They're almost like nonconsiders
Speaker 5:Yeah.
Speaker 3:And then think they don't like the taste of beer are two things we, like, combat, like, over and over again. Because, like, it it really is hard to imagine nonalcoholic beer and the social experience until you actually experience the social experience without alcohol. And you're like, oh, like, I kinda really like this. I'm actually in it for my friends, the food, the moment, and not the alcohol that mostly hits you after the moment. That was, like, a big light bulb to me.
Speaker 3:And the thing we hear all the time is people say, oh, I don't like the taste of beer. Well, actually, the ingredient a lot of people don't like in beer is the ethanol, which at times is up to, like, 85% of the calories of beer. Like, in a normal light beer, the ethanol calories is more than 80 of the calories of, like, the 95 to a 100 calories. And so we actually do have a pretty big flavor advantage too and, like, no comparison large brand. Yeah.
Speaker 3:On the e e the In Real Life too, that was almost out of necessity. Like, I was, like, going around our early grocery stores like Whole Foods, and nobody was even looking at the nonalcoholic beer shelf. And so I was like, okay. I gotta get out in the world and bring people in. And so I like, I was running a lot of races and, like, trail half marathons and Spartan races anyway, and so I just started pouring beer at those, giving out hundreds of beers a weekend and getting people to, like, to the actual, like, table and trying the beer where they're, like, happy, sweaty, thirsty, and actually considering it.
Speaker 3:So it's gotta be
Speaker 2:How you yeah. How do you measure success with an initiative like that? You're pouring. You're you're sampling with people. You're seeing reaction.
Speaker 2:Are you trying to like Are you already at that time stocked in shelves in local stores? And then you're trying to like see, hey, if I if I do like a bunch of weekends back to back, am I gonna see an uptick in sell through? Or is it more just like, this is like, I'm basically spending my time to get more people aware of the brand, and I have more time than I have capital?
Speaker 3:It yeah. We have down to ZIP code and store level sales, and so I was able to see, like, ripples fairly quickly and could run regressions on that.
Speaker 2:Very
Speaker 3:cool. Separately, like, it it has to be authentic to the brand proposition. Like, everything about this brand, like, the can, the mountains, the outdoor aesthetic, the taste was, like, all out of me and John's life and, like, primarily my life. And so where I was going to market the brand and talk to people were, like, I didn't have to, like, go to a focus group or Google where people like me hang out cause it was all built around me. And so I I have seen a lot of people, like, try to bring nonalcoholic spirits to, like, races.
Speaker 3:And it's just like it's like an absolutely laughably terrible fit. But you can tell some VCs are pushing someone up to, Yeah.
Speaker 2:Yeah. They heard you on a podcast, and they're and they're like, yeah. Let's just run. We'll do the same thing. It'll have the same effect.
Speaker 1:Brewing for Manhattan's and
Speaker 3:We did also take a very intentionally, like, long track with things too where so, like, that like, yeah, talking to someone face to face is very unscalable and, like, doing things digitally is so much more scalable in awareness. But, like, if you do it enough and if you're doing it all the time, all of a sudden, is scalable on a long time horizon. And even up until this year, last year, we probably did 2,500 events as a company and handed out well over a million samples, probably in all 50 states and three other countries. And so those things do scale over time, and then we've been really consistent with our marketing messages too. You know?
Speaker 3:I I knew my core skill set isn't like me being a social media persona and, like, just turning on the cameras all the time. We wanted to create a timeless brand that just compounds over time. We talk about the same things, like, over and over again. I I think of it somewhat as, like, a Red Bull model of advertising consistency where most of CPG these days is, like, chasing that next hit. It's like, you've gotta be on the next trend.
Speaker 3:You've gotta be like, the next video's gotta be a home run.
Speaker 2:Yeah.
Speaker 3:Or even shorter duration, like, celebrity trends. You know, we've had upwards of 10 celebrities enter our category. We have a whole range of superheroes at this point. Okay. And and It's so funny because you
Speaker 1:you probably know all of them, but you could list them all off, and I've never heard of any of them. And that's that tells you everything about the level of focus and actually
Speaker 2:It's probably harder to watch their movies now.
Speaker 1:Feel personally slighted. I can't do it.
Speaker 3:Yeah. Well, we've got one more at least one more superhero coming into the category this year. This one's being launched at us from a French castle. Okay. You know, it's gonna be draped in Americana imagery, so we're excited for that one.
Speaker 3:Interesting. Interesting. But there's all different texts. There's, like, the short term celebrity spike Yeah. And, like, hope you can ride it where we've kinda just done the thing and been authentic.
Speaker 3:Like, who we are inside the walls is who we are outside the walls Yeah. Over and over again. I think that really compounds over time and matches with our, like, manufacturing strategy, our continuous investments in quality. Every
Speaker 1:one
Speaker 3:of our teammates is full time teammates. And, like, all all this capital investment is it looks really good right now, but in 2018, this was super out of vogue for sure.
Speaker 2:Yeah. Yeah. Well, yeah, the the beautiful thing with CPG, it is it is incredibly competitive. You are gonna deal if you're successful at all, you'll deal with a million knockoffs and new entrants. But you can look backwards and say, like, or even just look at your business today and and realize, like, even with everything you know now, imagine trying to compete with yourself from zero.
Speaker 2:That you'd be an absolute nightmare. Yeah. You know? So it's just the the benefits of great product, operational excellence, and then compounding.
Speaker 1:Talk more about the decline in alcohol consumption amongst young people. What are you seeing in the data? How real is the trend? And what are the key drivers of what's going on?
Speaker 2:And how much basically, how much does the alcohol industry I hate Andrew Eberman. He basically he basically needs to be in witness protection.
Speaker 3:Yeah. The the new dietary guidelines were basically, like, don't not drink alcohol. It was, like, it it was, like, as close to don't drink alcohol as it gets, and the industry was, yeah. At the end of the day, like, I I think a lot of this is potentially skewed by COVID and, you know, generations that were maybe, like I mean, if you go back to the start of our careers, it was so like, I lived above a bar in the West Village in New York, and, like, I had friends in that bar every afternoon. It was so easy to find where people were after work, and I I feel for this generation that, like, is kinda losing the work happy hours, the mentorship, and stuff.
Speaker 3:And I I don't think we're gonna have generations that don't love social connection and blowing off steam and having fun. I think the industry and the world has to meet people where they're at. And so I do think they'll normalize, but I also don't think, you know, in a world of cell phones and videos always on and, like, high work performance expectations, it it's gonna be really tough to get back those, like, volume drinkers as well. So I I think you've gotta layer in more occasions throughout the week. You've gotta find ways to keep people at bars longer with moderate beverages.
Speaker 3:So I the industry on the alcohol side will have continued volume challenges. And then there's, like, new nonalcoholic functional drinks too, of which THC is the most obvious, and those are not, like, high volume drinks either. So
Speaker 2:Yeah. They're low volume, and they destroy your sleep. So Yeah.
Speaker 1:Not a fan. Talk to me about label claims. The only real label claim that I see on here is nonalcoholic brew. It doesn't say it has creatine in it or protein or caffeine or anything else. Protein.
Speaker 1:Protein. But I mean,
Speaker 2:Have you guys have you guys ever made like a
Speaker 1:Have you been
Speaker 2:tempted? Of the protein beer?
Speaker 1:The high protein beer. We 50 grams. Why not?
Speaker 3:We've had some fun with, like, caffeine and protein and, like, funny videos and stuff. I I do think there could be a world of functional beers in the future, but I I also think, like, beer and function is, like, just kinda different things Yeah. For the most part. And so but that being said, like, one of the hardest things of starting a CPG business is, like, the plaintiff's bar and all the like, how tight the FTC rules are from website to label claims to everything. And there are a thousand eyes waiting people for people to misstep even the smallest tripwires.
Speaker 3:And
Speaker 2:Yeah. That was why earlier last year, there was somebody there was a a viral brand doing, nicotine
Speaker 1:drinks. Yeah.
Speaker 2:And that that
Speaker 1:But at the same time, I mean
Speaker 2:And that just looked like it was like, okay. You're you're just you're just making stuff and selling it. This
Speaker 1:Don't you Jordan, you don't think an athletic four loco could work? An athletic loco? Athletic loco has a nice ring to it. No. That one got What's up?
Speaker 1:Immediately.
Speaker 2:What's the what's the scale of the of the business today?
Speaker 3:Steadily compounding. I guess we we've moved into, like, the top five of overall crappereweries out of 10,000 crapperers. Wow. Top 20 beer producers overall. That's amazing.
Speaker 3:Yeah. We passed a 100,000,000 in revenue in 2024 and have been growing very healthy double digits since then. Last year was the worst beer year of our lifetime probably, and we had really strong growth into that. And, you know, we're just coming back with more exciting partnerships, more marketing spend next year as the business grows, and kinda steadily just chugging along. And, you know, comparable, I think, could be the energy drink category, which Red Bull really put on the map in the nineties.
Speaker 3:Monster arrived in, like, 2002. And those brands didn't have a lot of 100% ears. It was just a, like, five to 15% compounder for twenty five years. Yeah. And that's really what we're looking for also is just to, like, make really high quality beer, timeless marketing, and just ride that health and wellness wave.
Speaker 2:Yeah. That's always the I I feel like founders can get a bit carried away of, like, I'm making an energy drink. Look how big Monster is. It's like Or look how big Red Bull is. It's like, you don't They didn't just like be like, oh, yeah.
Speaker 2:We just executed well for six years and suddenly we're a $50,000,000,000 company. It's like decades and decades and decades. And I think I I I I get excited about CPG founders that are like, you know, I think of like Peter with David where he he doesn't wanna sell out to the last gen. He wants to just compound Yeah. Enough, launch new products, launch new brands to get to the point where he is the the the 800 pound gorilla Yeah.
Speaker 2:In the industry. And so I'm sure you've had a bunch of opportunities to sell and and turn them down to date. So I'm a I'm a fan of the compounding.
Speaker 3:Well well, you guys know better than ever too. Like, the rules of private capital have totally changed since we launched the business. And we have, like, an amazing cap table through all that rejection I went through. And just people who are super excited about what we're doing with a really long time horizon, and, you know, there's the whole public versus private debate. And, like, do we wanna go public and spend 80% of our time on the regulatory of that versus how great it is for awareness, and then the public can also invest in the business who are, like, super fans in it.
Speaker 3:So there's a lot of push pull on public versus private too that we're working out.
Speaker 5:Mhmm.
Speaker 1:Are you getting any pushback from other alcoholic beer producers? We saw this with the milk lobby pushing back against, like, the alternative milks and saying, hey. You can't use the word milk. Do do are there words you can't use?
Speaker 3:There's actually, like the alcohol industry definitely tries to put up walls around things like this. We can't use, like, all the normal beer words, like, lager, stout, ale, like, you name it. Yeah. And so, like, we have to call our Mexican lager a copper, for example, or a stout a dark. But I do did look at, like, those analogs and Beyond Meat and companies like that and how they made enemies with the incumbent industry.
Speaker 3:And, you know, we wanna make it really clear from day one, like, we're not out to stand on a soapbox and kill alcohol. Like, we're here to add to it, bring a lot of new consumers into it, and actually create a really new exciting viable part of the industry that just helps build the whole thing. So, yeah, definitely learnings from that.
Speaker 1:Well, thank you so much for coming Thanks on the
Speaker 2:for all the drinks.
Speaker 1:Thank you
Speaker 4:for working
Speaker 2:through it. We're working through it. We're we're
Speaker 1:I think it mean, it says under half a percent. I think if I drink 50 of these, I can get a buzz going. So hell or high water here?
Speaker 3:Yeah. There's a major placebo effect.
Speaker 2:So it's
Speaker 3:like having one with lunch or on stressful workdays
Speaker 2:Okay.
Speaker 3:Or, like, my commute beer is my favorite beer to all them. Beer. Yeah. It's like all these new occasions.
Speaker 1:It feels a little risque.
Speaker 3:I like it. I I think it's Oh, it's delicious. Yeah. So
Speaker 1:Thank you so much for taking the time to come show out.
Speaker 2:Great great to meet you. Super impressed with everything
Speaker 1:Yeah.
Speaker 2:Has built, and come back on anytime. News.
Speaker 3:Yeah. Thank you so much. Love the show.
Speaker 1:Thanks so much. We'll talk to you soon. Great chatting, Bill. Goodbye. Cheers.
Speaker 1:Let me tell you about Turbo Puffer, serverless vector and full text search, built from first principles on object storage. It's fast, 10 x cheaper, and extremely scalable. Our next
Speaker 2:Switching years. Just a little bit. Capital. We're going from non Alcohol beer
Speaker 1:to AGI. We have Pat Grady and Sonya Wong from Sequoia Capital in the restroom waiting room. Welcome.
Speaker 2:Welcome to the show.
Speaker 1:How are you doing?
Speaker 4:Cheers. Thanks for having us.
Speaker 2:It's been Friday.
Speaker 1:It's been way too long, Pat.
Speaker 4:Been way too long. Guys.
Speaker 2:We missed you too.
Speaker 4:I missed you guys.
Speaker 1:Most shows, it's like, you know, maybe once a year we'll have someone on.
Speaker 2:Invest like best. It's like once every few years.
Speaker 1:Every week. We'll start scheduling next week's appearance too. Sonya, it's also been too long. We we enjoyed the candles that you sent us after our our last hangout. I'm so glad
Speaker 7:you guys asked about the ideas for this year's swag. Just wait.
Speaker 1:Yes. Is is the conference it's still called AI Ascent?
Speaker 7:AI Ascent. It's it's gonna be on 04/20 this year.
Speaker 2:So that'll give you Woah.
Speaker 1:Yeah. You were you were early to the whole Ascend trend. Everyone's talking about Ascending this year, and so it's just a great brand for you guys. I love it. Anyway, take me through the article 2026.
Speaker 1:This is AGI. Why were you writing it now? What was the one thing that you saw? What was the inciting element?
Speaker 3:Do want me to start?
Speaker 7:Go for it.
Speaker 4:I I think there were two let me start with there were two purposes to the article Mhmm. And there was something that we saw that catalyze the article. One purpose was to kind of put a stake in the ground. Mhmm. Because there's this thing that people call the AI effect where once a technology is actually out there and working, we stop to believe that it's AI, we start to just call it by the specific name of the technology.
Speaker 4:You know? Oh, that's not our that's not AI. That's just our LHF.
Speaker 2:You know? Yeah.
Speaker 4:And so and so there's this mythical quest for AGI, and thus we can tell we're there. Yeah. And so we just kinda wanna put a stake in the ground and say, hey. Look. We're there.
Speaker 4:And and then you say, okay. Well, what's the point of doing that? Why put a stake in the ground? Well, that leads to purpose number two of the article, which is it is time this is meant to be a call to arms for founders.
Speaker 3:Mhmm.
Speaker 4:It is time to take stock of what capabilities are available in the world today and apply those to real world problems as vigorously as possible.
Speaker 1:Mhmm.
Speaker 4:And so there is enough great technology out there available to founders today to go solve so many real world problems. And, particularly, what we've seen over the last couple of months, and this is kind of the triggering thing for the article with Cloud Code and Opus four five and these long horizon agents, which to us are kind of the tipping point that's gotten us into AGI. Like, in particular, what is possible now with that as sort of the third big inflection point of the last five years is pretty remarkable. And so it's kinda meant to be a call to arms.
Speaker 2:Yeah. And we're not helping because we have physical goalposts here. Exactly. We always should I mean, we have
Speaker 1:to take the goalposts off if we've achieved it.
Speaker 2:No. Let's just mount let's mount it to the ground. Like, we actually have to, yeah, bring it.
Speaker 7:That's amazing. Your your smell of AGI stuff was amazing. We'll put the goalpost Yeah.
Speaker 4:See? It's there. We're there. Yeah. Yeah.
Speaker 4:We did Yeah. We'll bolt it to
Speaker 1:the ground. You're in the goalpost now. You're physically in the goalpost because you have declared AGI. Yeah. Take me through a little bit of the history of Sequoia, the history of previous technological revolutions.
Speaker 1:I don't remember a a, you know, a 1999, this is Internet. But as you reflect on the work the firm has done, what can you tell us and what can you share about how the firm has processed these broad proclamations about the impact of technologies that are coming and then arrival dates when they are ready and that maybe changes the stance of the firm?
Speaker 4:Yeah. I love that as a question, so thank you for asking that. We've been pretty quiet historically as a partnership, and so this idea of sharing our thoughts with the world is is kinda new, and, it's a useful service to the founder community. If you go back to our founding, so 1972 when Don Valentine started Sequoia Capital, he was the go to market guy at a company called Fairchild Semiconductor, which is a household name for people who studied the history of Silicon Valley, but but not really outside of that. It was kinda like the OpenAI of its day or is the NVIDIA of its day.
Speaker 4:Like, it was the it company of its day because it was the first company to, to really commercialize silicon silicon based transistors. Like, it was kind of the company that gave Silicon Valley its name. And as the go to market guy of that company, Don's job was to take this magical new capability and figure out how to apply it to real world problems. Yeah. Make it use make it useful.
Speaker 4:Make it useful. And that sort of led him into venture capital because a lot of his customers were these founders, and he just kinda fell in love with them in their quest to build these businesses. Yeah. And so I mentioned that because we grew out of this semiconductor revolution where all of a sudden, computation is a thing that was available to the masses. We move from that into systems in the next generation with the with the Apples and the Oracles, you know, taking these chips and turning them into more computing systems.
Speaker 4:We move from that into the networking and PC era, where all of a sudden you have endpoints on on every desk in every office thanks to the PC, and you can connect them all up with networks thanks to Cisco and the router. We move from that into a more sophisticated form of networking, which is known as the Internet. We move from that into applications, which are a more sophisticated way to make use of the Internet. Those applications start to show up on mobile devices. And then eventually, now that everybody has one of these mobile devices in their pocket, there's an enormous amount of data.
Speaker 4:People start doing interesting stuff with data, and now we have AI. And so this lineage of Silicon Valley is kinda built up over the decades, and each successive wave has built on the one that's come before. And and being in this very fortunate position to kinda be in the mix on a lot of these transitions and and actually being the only partnership that's kinda made it through these different tectonic shifts and kinda has this institutional knowledge, you know, gives us this broader view on, okay. What's the importance knowing what we know about past tectonic shifts, what's the importance of the current moment? And and with that, I'll hand it off to Sonya because Sonya was the one who, you know, three, four years ago, prior to the release of ChatGPT, kinda called this for what it was and put out the original generative AI post back in the back in the 2022.
Speaker 2:Yeah. The other the other thing I think that's interesting about this moment is I feel like people have had this sense of, like, AGI will be here when it's just so obvious in the economic data. And that's when it'll really feel like, okay, that's when you can declare it of like it's here, it's working the economy. And I think part of why I appreciated your guys' piece is it's like it actually is gonna require a lot of human agency and human application of this. It's not just gonna It it may not just like happen fully organically run running away by itself.
Speaker 2:Right? Mhmm.
Speaker 4:Call of arms. Now's the time. Let's go.
Speaker 2:Yeah. Yeah. I wanted I I I wanna hear from you, Sonya, but I wanted to ask, like, has there been any type of shift in in founders coming and pitching Sequoia with, an entirely like, I I I felt like last year, I kept seeing like agent businesses Mhmm. That were exciting and the teams were talented. But I felt like they were just, in in many cases, just like kind of rebranded SaaS.
Speaker 2:It's like, okay, like, I you're pitching me this as an agent, but, like, if I log into the product, it's gonna look like traditional software. And maybe that's the this maybe maybe SaaS is evergreen, and we're just gonna live in dashboards forever. But I've I've I kept wanting more, basically. And I think we have started to see some new paradigms. But has there been any type of shift in terms of the companies coming in where maybe somebody spent a few years in a lab and they're like, Okay, we're actually going to kind of we've seen the future and now we're gonna really reinvent the entire product experience from the ground up based on this new set of capabilities.
Speaker 7:I'll start, but Pat is our AppLayer guy, so you should should talk as well. We we framed this at the bottom of our post, like, from talkers to doers. Yeah. And I think maybe that describes a little bit of what you're describing of, like, first iteration, Gen AI companies, including some of the the great ones. Like, it did feel like, you know, it was a it was a it was a next generation of staff was how it felt like.
Speaker 7:They weren't actually getting work done for you. Part of the reason for this call to arms is, like, we're going from talkers to doers, which is and I think it is both the long horizon agents is the thing, but it's both the underlying model capabilities and the harness around it. So, like, these models can now take action and iterate and persist in the world around us. And so what we're seeing now is that founders are selling companies that are not just doing the, you know, the, you know, newer, brighter, newer, shinier version of SaaS, but actually something that takes real agency and takes real time horizons to execute. So, for example, a traversal in the troubleshooting space.
Speaker 7:Like, when when there's a bug that goes down, Datadog says, like, ding ding ding. There's an issue. Typically, have a war room that goes back and triages what the hell happened, goes back and scrolls through dashboards, goes through traces, etcetera, eventually root causes it, fixes it. This is a, you know, several hour to day long process for companies.
Speaker 2:It's funny to think of the human analog there. It's like if you have an employee that comes to you and they just tell you there's a problem and they're not doing anything about it, they're just like, we got a big problem here, boss. And you're like Okay. Okay. Like, what are you doing about it?
Speaker 2:And it's So traversal is like, okay. Like, we're actually gonna be what a good employee would do, which is like, we have a problem. Here's like how we're gonna fix it. And hopefully, this is solved before it even gets to you. Right?
Speaker 7:Exactly. And so in this case, there is no SaaS equivalent to that. Right? This this there it doesn't even feel like SaaS. It feels like talking to a coworker.
Speaker 7:And that's why the litmus test here is, you know, are you are you sell can you actually sell work? I'd say the founders that came into our door a few years ago, they all sell that vision. Like, it is so it's not it's not a new idea that you can build agents. I think what's new is that you can actually execute on that vision. Because these models are finally smart enough, capable enough to actually stay on the rails where you can just let them run.
Speaker 4:Yeah. And I I would say founders have done a really nice job of making use of what is available technologically at the time. And I think I think over the last five years, we've kinda had three big inflection points. You know, inflection point one was ChatGPT when we saw the benefits of pretraining. And pretraining kinda gives you baseline world knowledge and some kind of instinctive judgment, so to speak.
Speaker 4:Inflation point number two is late twenty twenty four when o one came out, and we had reasoning. And so the ability to kinda take your time and really think through particular questions and come up with deeper answers and better conclusions. And then inflection point number three has sort of been these last couple of months where we saw the impact of these long horizon agents. And so you've got some baseline baseline knowledge. You can do some reasoning over that knowledge.
Speaker 4:Now you can actually fail, recover, stay on task, persist all the way through to some sort of an outcome. And I think if you map those three capabilities to the applications that people have built, it's no surprise that the initial applications were were kinda like good q and a or good summarization or good basic content content generation, like, was the stuff that pretraining sort of gives you, the next generation of those agents could could think a little bit harder. You know? Like, in the case of, in the case of Notion as an example, which I think has done a really good job of staying on top of all this stuff, You know, you could now tell Notion, okay. Can you build me a database?
Speaker 4:And it could actually reason through, like, what kind of database do you need? How should I build? And it can actually build you a database. It's pretty good. And then now with these long horizon agents, we're finally getting to the point where you can make a couple mistakes.
Speaker 4:You can take a test a couple hypotheses, and you can actually iterate your way toward the right outcome. And so look at, again, you can look at Notion, and and you can effectively have your personal chief of staff doing stuff that you would otherwise be doing while you were in a meeting running in the background. You know? Or or in the case of Harvey, you can effectively deploy an AI associate after a data room or a deposition or some other legal workflow and actually complete it end to end while you're doing something else. And so I think this may maybe one way to put it is with this third inflection point, you don't have to babysit the model.
Speaker 4:You can just, like, give it instructions and let it go, and you can have a few instances of it running in parallel. And you you kinda go from this is a cool tool that allows me to be more productive to holy cow. This is kinda like a team of coworkers that I have at at my disposal.
Speaker 1:Yeah. Totally. Help me reconcile these two things that I'm feeling simultaneously. I agree with your, declaration, the call to action, the just the idea of so much opportunity for founders to use AGI to create all sorts of different value and products and services. At the same time, towards the back half of 2025, I was seeing Ilya on Dorrakesh talking about, hey, maybe we're in age of research, and Richard Sutton and Andre Karpathy talking about some of the more restrictive aspects of the research progress.
Speaker 1:And so is that something else that we're working on? How are you thinking about the progress that's happening in more purely research contexts? What even needs to happen there? Your role as venture capitalists in helping that happen? How do you blend those two things that both feel true but are but feel somewhat at odds?
Speaker 7:I think it's an end. Mhmm. And we're putting our money on both in both camps.
Speaker 1:Okay.
Speaker 7:Like, the research side, there's there's absolute fundamental research that needs to be done right now. Yeah. I'm personally I I don't know if you've you guys have read, Dave Silver and Rich Sutton's Age of Experience paper. Like, that to me kind of outlines Yeah. The the premise, like, we're going from, you know, learning from existing data, Internet data, etcetera.
Speaker 4:Yeah. Oh, yes.
Speaker 7:That was, like, the paradigm for pretraining to learning from experience, which is, like, reinforcement learning. The paradigm is you interact with an environment, you get reward signals, you improve. Yeah. And so I think there's a lot that's gonna happen in terms of learning from experience and and have been following, you know, what Rich Sutton's doing with Keen. Yeah.
Speaker 7:And very excited about some of that direction. I'll give you an example. Also, we backed a company called Recursive Intelligence. Mhmm. Yeah.
Speaker 7:They formed, like, Alpha Chip at Google, and this is, like, recursive chip design. So similar to, in the game of Go, you can have, you can play your the agent can play itself and get superhuman at Go. Yeah. You can actually get superhuman at chip design, and very surprising things come out of that. Like, you end up having chip design that looks, you know, not like the Manhattan distance kinda like square grid stuff.
Speaker 7:You you actually have what looks kinda like alien like chip design, layouts. And so, we are absolutely bat backing Research Labs. But then if you like, if you freeze research progress where it is, I am convinced there is so much value to be built in the world, and it's just like it's it's just lacking founders, lacking agencies to actually go out and and and productize and and build companies around those. Like, one of
Speaker 2:my How we
Speaker 7:examples Yeah. Go ahead.
Speaker 2:I was gonna say, how are you guys thinking about, like, more passive product experiences? Because people talk about agents, and most of the time, they're talking about, like, giving agents tasks.
Speaker 1:Like Mhmm.
Speaker 2:Hey, go do this thing and spend as much time as you need on it, and, we'll we'll see the result, right, like selling work. But when you think about actually working with people, some of the best employees are just without direct guidance, constantly doing work in the background and coming to you only when maybe they need some type of like input. And so it's like more like you're just kind of reacting to the work Mhmm. That they're doing and and giving guidance. And so an example I would think of is, you know, with with Harvey.
Speaker 2:It's like if somebody sends me legal docs Mhmm. I should get a a some type of notification from Harvey really when it's when it's already done some type of like
Speaker 1:Like I already jumped on it.
Speaker 3:Diligence on it.
Speaker 2:I already did the work. Unusual. You only don't so I'm not even worried about
Speaker 1:Yeah.
Speaker 2:I'm just I'm getting a ping from Harvey. Hey, you should pay attention to this thing. Yeah. You're gonna need to make a decision here. I've done all the work.
Speaker 2:And so and and even like with the email experience, like I would love to log in to my email and not see just like the order at which the emails came in, but like, here's three decisions you need to make. And again, like, when you work with great people, they're gonna if they have five minutes of your time, they don't just tell you, here's the last 20 things that's happened. They're like, here's the three things that you need to make a decision on. And so I'm really excited to see more of these, like, passive product experiences where the work is just being done and you only need to chime in when it's really necessary or if you're actually a bottleneck.
Speaker 4:Yes. I I think this is a great question and a great direction. And to me, this kinda gets at the software as a service versus services as a software. You know, the the nature of software is really changing as we go from an era of apps to an era of agents. In the era of apps, you want a lot of surface area with your customers.
Speaker 4:You want them to spend a lot of time in your product. You want to put workflows around them. They're gonna be really sticky that they're gonna get accustomed to. In an era of agents, to your point, things can just be running passively in the background. The actual amount of surface area you have with your customers might be de minimis.
Speaker 4:The amount of time they spend in your product might might be de minimis. So the nature of the moat that you build is different. And the nature of the moat that you build, kinda what Sony was saying with the age of experience, it's all about context. It's all about, like, the environmental context of the job that you are trying to achieve and the feedback that that agent gets as it runs off and does something and comes back. It's actually, you know, like, you did this part a little bit a little bit wrong.
Speaker 4:You need to do this part a little bit different. And I think in a perfect world, you have something you have something like what Harvey does, which, you know, Harvey kinda bridges that gap where there are workflows today for people who who want to do the work kind of how they've done it in the past, just a lot better, faster, cheaper with the benefit of the AI brain. And you can deploy agents to go out and do the work on your behalf and then come back to you when it is done. And I think that I think that I think we'll see a lot of that over the next handful of years where there are companies who can kinda bridge that gap, where they can live in the software world and have some of the workflows better workflows because of AI, but some of the workflows people might be accustomed to. And then separately, they can deploy in the background with these passive agents that kinda function as coworkers who just come back to you when things are done.
Speaker 4:But it's two very different, like, design paradigms. It's two very different business paradigms. The fact that they're so different is one of the reasons why I think it's gonna be tricky for a lot of the incumbent, you know, software companies to make the leap the same way it was tricky for a lot of on prem companies to make the leap to cloud.
Speaker 1:Yeah. Can you help me understand where you sit on the level of software eating the world? We talked to Tyler Cowen about one of the one of the problems with AGI showing up in economic statistics is that AGI needs to live in a digital realm. It has to affect the digital economy, the services economy, and that there's so much of the GDP is made up of the health care sector, nonprofit sector. He highlights a number of sectors that are sort of AGI resistant or AI resistant, and so that's why he has longer time lines for significant impact to the overall GDP figures.
Speaker 1:Do you agree with that? Or do you think that there's something different about AGI that should allow tech to finally move the needle on those stickier industries?
Speaker 7:Well, I do think as, like, I I fully agree with the premise that, you know, this AGI stuff is only good. It's only embodied in the digital world right now. Right? And so, like, we we seem to be, you know, getting tantalizing close to solving the entire digital world. That is very exciting.
Speaker 7:At some point, the physical world does become the next bottleneck. -I think the exciting thing is actually that, like, hey, robotics is also going through renaissance right now as well. Like, some of the smartest people are going out and working on robots. And so I do think, like, similar and and just the pace of progress is so high right now, and I didn't think we're gonna have digital embodiment that was reliable this early. And now you can just let the thing run on your machine.
Speaker 7:I think that increasingly, gonna get to physical embodiment, and it's we're gonna have a smooth curve there. I I do agree with the premise of, like, if if you want if you believe in the super fast takeoff, recursive self improving, like, you know, everything is just gonna, you know, go vertical line. Like, I I just yeah. We're we're not gonna get there. We're not gonna get there without the physical world.
Speaker 7:We're probably not gonna get there even if we have the physical world.
Speaker 4:I just
Speaker 7:think the reality of life is really messy. Yeah. So I don't think we're at ASI. We're not at that kind of like take off moment whatsoever. That's not the stake in the ground that we're putting.
Speaker 7:What we're almost saying here is, hey, guys, this this quasi religious concept of AGI, like, is the thing, you know, generally intelligent and, you know, instead of just waiting for it to arrive, it's here. Let's let's let's build that here. That's there's
Speaker 2:so much there's there's such a there's kind of this toxic idea that I feel like is ingrained in so many people's head which is like AGI is just gonna do that. Yeah. Like AGI is just gonna do that.
Speaker 1:And then
Speaker 2:we're done. And we're AGI is gonna cure cancer.
Speaker 4:Yeah. Yeah.
Speaker 2:And it's like it's at least in the near term
Speaker 1:Yeah.
Speaker 2:From everything we're seeing, it's gonna be a human properly, you know, a group of of talented people properly using the tools to solve all the most pressing problems that we And so it's I and for young people
Speaker 1:I'm extremely paralyzed to be like, in 2027, I'm either dead or a billionaire retired on a space yacht. And so I could probably just chill for the next two years because it's what could be one or the other.
Speaker 2:No. And I worry that sort of like lost generation Totally. Of people that have let Yeah. Be ingrained in their head that it's not worth trying. No.
Speaker 2:It's not worth
Speaker 1:Now is the time to build enterprise SaaS.
Speaker 2:Even even I You heard it from Sequoia Capital.
Speaker 1:Get in the arena, folks. This is called action.
Speaker 2:I feel bad because Seriously? I feel bad because a friend of mine was pitching me this idea of like an an agent to help consumers switch between like insurance products. Mhmm. Like an insurance company will will sell you in a policy. Mhmm.
Speaker 2:And then I'll just kinda jack up the price a little bit every year because they assume a lot of people
Speaker 1:Won't start.
Speaker 2:Gonna churn. Yeah. And at the time, I think Chet GPT agent had come out and I was just like, dude, like like, the the labs are gonna like one shot this problem Mhmm. Like, right like, I think pretty quickly. I think you could work on this for like, you know, six months and get steamrolled.
Speaker 2:And like, it's very possible that like, if he had just focused on that one Yeah. Problem.
Speaker 1:It'd a decent business. It'd be like You wanna figure out something unique
Speaker 2:and Yeah. It's a big category. And so I I felt better.
Speaker 1:There's lots of examples.
Speaker 2:How much do you guys I wanted to ask, like like like processing signal because obviously there's so much noise right now. And Sure. Something that I've appreciated is kind of comparing like the x timeline to the App Store charts. Because Yeah. Every single day on the x timeline, like vibes are fluctuating Mhmm.
Speaker 2:And some news will break or some product will be released. And the common response is like, it's so over for x y z company. And then you look at the App Store chart and it's like the company that just launched the thing is like not actually even in the picture at all. Like they're not in the top 25 of any category. And so like I feel like there's this insane disconnect between the real world.
Speaker 2:The real world is using ChatGPT all the time, but they're clearly not paying attention to x, our little bubble. So it's like, where are you guys really looking for signal and noise, especially in the later stages where, you know, the you're you're investing in companies that should be out in the real world Mhmm. At at some point. Yeah.
Speaker 7:Totally. Look, before I get to that point, I I think it is so amazing that, like, all of this AI discourse is happening on on X right now. Like, you could imagine a world where, you know, all this dialogue was, like, happening in behind closed doors or, you know, scattered across different channels. The fact that it's all on X is amazing. And, you know, it's a combination of research and hot takes and what's happening in the labs.
Speaker 7:It's, like, it's I think it's awesome that's all happening in one place. It's remarkable for young people who
Speaker 1:can just like jump in and learn by osmosis and understand
Speaker 2:who's only happening in Valinor.
Speaker 7:Totally. Valinor. I still have to figure out what the elves comment was about. But anyways, putting that aside, like, yes, our, like, our job is to, like, you know, you to just kind of try to pee signal from the noise. Yeah.
Speaker 7:We have we're obviously doing everything we can in the background, credit card panels Mhmm. Web web signals, etcetera. And I'll say, like, sometimes we see a, you know, trending web signal take on on X, and it's just it's just wrong. Like, we look at our our own sources of ground truth. The example, like, some of the stuff on, you know, ChatGPT is losing losing market share.
Speaker 7:You actually cut it by, like, US g US web traffic. It's a very different story. And so for for us, it's like, it's really important that we're on x. I think all of the all the discourse happening here, very important, but then, like, let's let's get to ground truth.
Speaker 1:Most importantly, just know that as venture capitalists, if someone refers to you as smog, it's sort of a compliment, but also sort of a dig. So that's what you need to know in terms of Lord of the Rings references for for where you sit in the ecosystem specifically.
Speaker 7:That is that a short name like Smeagol?
Speaker 1:Smog is the dragon that hoards all the gold and is an antagonist in The Hobbit. Yeah. Yeah. But does have the gold, which is kind of like what you do. You know, you got a lot of capital over there at Sequoia Capital.
Speaker 1:Margaret. Sorry, Jordy. Continue.
Speaker 2:Oh, no. What were you
Speaker 1:gonna say, Pat? Pat. Sorry.
Speaker 4:Oh, I was just gonna say, you know, to the question on signal
Speaker 1:Yeah.
Speaker 4:You know, interestingly, one of the big themes over the last few years on on X, thanks to Lulu, is the go direct idea. And I think for us, go direct is a little bit of try to, you know, let the world know what we're thinking, but probably even more so, just go direct to the founders. You know, the best sort of signal we get is the founders. We spend, you know, we spend many hours every day just meeting with founders out there doing interesting things, and we kinda have the ability to do primary research that not everybody gets a chance to do. And I think that's that's still the best source of signal.
Speaker 1:Yeah. What's the what what is changing in the AGI age in terms of adoption and just AI diffusing itself through the economy? This is something that obviously every company has to deal with because they can build a great product, but then they need to get it into businesses. If they're in enterprise SaaS, they need to get adoption, make sure that it's being used correctly. There's the forward deployed model.
Speaker 1:There's self serve models. Is anything changing there structurally, or is it all just, you know, the same playbooks?
Speaker 7:I mean, one thought is, like, I think we're going from over the last decade, we went from sales led growth to product led growth.
Speaker 1:Yeah.
Speaker 7:I think we're going from product led growth to agent led growth.
Speaker 1:Okay.
Speaker 7:And I think you see this most clearly, actually, if you're using, for example, Cloud Code act actively. Like, it says, hey. You should use for database, you should use Supabase. For hosting, use Vercel, etcetera. And,
Speaker 1:like Yeah.
Speaker 7:It's choosing for you the the stuff you should be using. And I think increasingly, like so it's it's most obvious to me with code. Like, your agent is choosing your infrastructure. Yeah. But I think it's gonna happen across the entire economy.
Speaker 7:Like, your chat chip team is gonna tell you, like, hey. This is the, this is the place, this is the travel you should be booking. This is the you know? And and so I think we are going to
Speaker 2:look channel channel sales, like, old school?
Speaker 7:Yeah. Old school. But I think that the difference is, like, you don't have competing incentives here. And I I think the OpenAI guys tried to lay as, like, principles that I think are it's a very principled take on Yeah. You know, how do you want to tell tell users what users what to use.
Speaker 7:And I think product led growth brought us closer to the vision of best product wins, but, like, ultimately, people are still lazy. They can't read all these reviews. They kinda default to, like, what looks cool on the website. Whereas agent led growth, like, agent has remember, your agent has infinite time to go and make these for you. And so it can go and, you know, read all the documentation, read all the user comments, like, figure out for your use case.
Speaker 2:Also has an experience, like Yeah. Building on top of the infrastructure. It's like Yeah. Like, eventually, it's like, well, you
Speaker 1:wanna to choose why. Reputation management is gonna be very important. The way you show up in these LLMs is important both in the pretraining and in all the research that they do. And then also, this whole idea of, like, SaaS companies that don't have customers, they have hostages. Well, if it's one click or one prompt to replatform from the database that has that was trying to keep you hostage to the database that's trying to keep you happy
Speaker 2:Yeah. But it's It's also like
Speaker 1:be dynamic.
Speaker 2:I think it's good alignment. Compare it to like if you're building a home Yeah. And like the the person like, you know, like running like the the construction firm that you choose like uses really bad cement Yeah. And then you have like a terrible foundation. Like you're gonna be mad at you're actually gonna be mad at at like the the firm Sure.
Speaker 2:Because you're like, did you pick this?
Speaker 1:Yeah. Should've known. Yeah.
Speaker 2:This is like And so I do think there's a good alignment where it's like the best Like you're saying, the best product should win Yeah. Because the the agent is incentivized to make sure that you're on the best like footing and using the best product Yeah. Cost and factor, quality, reliability, all these things. So I I do think there's that good alignment. That makes a lot
Speaker 7:of sense. The agent kind of accelerate this, you know, best product wins notion. And best product for the human is maybe different from the best product for the agent sometimes.
Speaker 1:Fantastic. Well, thank you so much for taking the time to come and chat with us today. Have a weekend, and we'll talk to you soon. Pat, we'll see you next week. Sonya, I'll see
Speaker 4:you next week. I can't wait.
Speaker 1:Can't wait.
Speaker 2:Two for two.
Speaker 1:A great rest.
Speaker 2:To see you guys. Have a great Friday.
Speaker 1:Goodbye. Phantom Cash, fund your wallet without exchanges or middlemen and spend with the Phantom card. Meet Phantom Cash.
Speaker 2:An Andrew Reed special.
Speaker 1:A Sequoia Capital company. We have some breaking news before we bring in Sean Frank. Sam Altman has taken to the timeline. He posts the melting smiley face emoji with a screenshot from Elon's court filing. The the in the court filing, here's what it said.
Speaker 1:Musk insisted that any new entity, quote, support the nonprofit mission and that OpenAI remain, quote, essentially a philanthropic endeavor. Now Sam Altman's putting it in the truth zone. He says, here are the actual September 2017 call notes from Elon. Coming weeks, top priority. Gotta figure out how we transition from nonprofit to something which is essentially philanthropic endeavor and is b corp or c corp or something must tell the story and not lose moral high ground absolutely vital.
Speaker 1:So we'll see if we'll see how Elon reacts to that. But if that is the case, Sam Altman is upset about it. He says Elon is cherry picking things to make Greg look bad. But the full story is that Elon was pushing for a new structure, and Greg and Ilya spent a lot of time trying to figure out if they could meet his demands. I remembered a lot of this, but here's a part I had forgotten.
Speaker 1:Quote, Elon said he wanted to accumulate $80,000,000,000 for a self sustaining city on Mars, and that he needed and deserved majority equity. He said that he needed full control since he'd been burnt by not having it in the past. And when we discussed succession, he surprised us by talking about his children controlling AGI. I appreciate people saying what they want and think it enables people to resolve things or not. This is Sam speaking.
Speaker 1:He's no longer quoting. But Elon saying he wants the above is important context for Greg trying to figure out what he wants. And Hope's revenge says, oh my god, girl, he's such a snake. The drama continues. The drama continues on the timeline.
Speaker 1:Well, let me tell you about AppLovin' profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today. And we have a happy AppLovin' customer in the Restream waiting room. We have Sean Frank from Ridge. He's the CEO.
Speaker 1:Welcome to the show. How are you doing? Woah. Good to see you. Oh, you got the polo there on.
Speaker 1:What's this?
Speaker 4:That's the
Speaker 2:This is Is that the Winter Olympics? Oh, is this Team USA?
Speaker 5:It is the newest drop, guys. You guys like it? I put it on this for you.
Speaker 2:Insane. Fantastic. Insane. Brought the brought the Okay.
Speaker 1:So emergency podcast, we have why we wanted to have you on because OpenAI introduced ads. How quickly are you thinking about ramping up, testing it out? What have you
Speaker 2:learned from waiting in line at outside of opening eye to try to be
Speaker 4:the first?
Speaker 5:Dude, no joke. We are we would be the first advertiser if they let us. You know, we measure a lot of traffic source over at Ridge, and the most, like, revenue per user out of all traffic ever. I mean, Google branded, meta, whatever Mhmm. Is ChatGPT.
Speaker 5:We get, like, $12 from every one of those sessions. Wow. And it, like, you know, for Meta, you'd be lucky to get a dollar per user. Right? So the revenue per session from a AI user is just through the roof.
Speaker 5:And, you know, we have some data. I don't if you would wanna share it or not, but, like, Northbeam put out their 2025 report, and they track, you know, probably 2,000 merchants, billions of dollars in revenue. And AI search in January was, like, point o 1% of all traffic on all ecommerce websites, and now it's, like, point seven. So it's just, like, shot through the roof. Yeah.
Speaker 5:Yeah. And there's no ads yet. As soon as ads roll out, I am so excited.
Speaker 1:Okay. We would expect the dollar per user to fall based on ads. Correct? But do you still expect them to be high intent? Because there were we you were talking to Ben Thompson about this, and he was saying that they should have launched two years earlier because it's gonna take a while for the ads product to work its way up.
Speaker 1:I imagine that the the ChatGPT users that land on your website are super high intent because they've probably been asking ChatGPT about your product specifically or wallet specifically or product specifically. Now if they're researching the Roman Empire and they just see a little ad at the end that you purchased and it's not targeted at all, they might click on it and check it out, but it's probably gonna be lower intent. How optimistic are you about ChatGPT ads delivering at a level above Facebook quickly?
Speaker 5:Well, Google is rolling out their direct AI offer. Right? And what that is is if someone asks, hey. What are the best gifts for dads? Right?
Speaker 5:They're gonna ask that specific, you know, question. Yeah. I can now bid to show up with an offer for those people. It's like, hey. The Ridge Wallet's a really good gift for dads.
Speaker 5:Yeah. And they're gonna give you 20% off right now if you click this link. Mhmm. Right? So it's incredibly bottom of the funnel, like people who are ready to purchase.
Speaker 5:And that's Google's ad offering inside of AI Yeah. And that's coming out soon. So I think that was like what pushed ChatGPT over the edge to roll this out. They'd probably do a carbon copy of that. So it's not going to be discovery ads like you get on an AppLovin or a Meta, right?
Speaker 5:What it's going to be is you know, like that last point of sale, almost like an affiliate, like, push you over the door like a honey competitor or whatever, which I think is
Speaker 1:Would you be unhappy if the offering was just give us a dollar amount per customer and we'll go find new customers, something that's fully black box, you're not doing any demographic targeting, no keyword targeting? Or would you like those features?
Speaker 2:Well, that historically, if you can tell somebody like, here's $20 find me customers, and you're you just look at your average order size, that's like the holy grail of advertising. But it usually ends up being a bit more complicated.
Speaker 1:But is initial product that they roll out does it matter to you, or will you just take what they what they give you?
Speaker 5:Yeah. It's it's what we've seen, the organic traffic from any AI search is already so valuable.
Speaker 1:Yeah.
Speaker 5:Right? Any way to get more of that, we we would we would spend a lot of money for. Mhmm. But, you know, the beauty of the Facebook ad product is that they figured out a way to take half of everybody's revenue. Right?
Speaker 5:Like, affiliate is like, people Let's
Speaker 2:give it up for Mark Shuckabee. Yeah. I'll take half. You do the work. I'll take half.
Speaker 5:Yeah. TikTok shop affiliate, people don't wanna give more than 15% of a sale. They're like, oh, that is too much. Right? But all performance marketing is is just a is affiliate in a different code.
Speaker 5:Right? It's like they're they're able to like, oh, you're gonna generate your demand. And if you have a better offer, you'll get a better return. Right? But really, they just figured out exactly how much money they could take from everybody at the optimal level, and that's why they do a $100,000,000,000 a year in revenue.
Speaker 5:So if the offer from Chad GPT and Sam Altman is, hey. Give us 40 percent of your revenue, and we'll give you new customers you wouldn't get otherwise. I would take that deal because I'm already giving Mark Zuckerberg 50%.
Speaker 2:Yeah. Right? One thing that's exciting is I think once people start seeing more once they start seeing ads for products, they will just naturally start using LMs for more product research. Like, I still find myself if I'm, like, if I'm doing, product research, I'll still go to Google search quite a lot even though in many ways the experience is inferior just because I'm so trained on that. And so I think like as they roll out ads, they're just there's gonna be like more organic activity.
Speaker 2:So hopefully, as a brand, you should be getting more people just landing on the site organically because they're just finding out finding out through their own research.
Speaker 5:Totally. Half of all product searches start on Amazon. So, like, Amazon has been able to take over, like, the product search box from Google, but they spent $500,000,000,000 in two decades doing it. So if ChatGPT can start stealing some of that, you know, glow that Amazon's been able to do, they'll have an amazing affiliate business and ads business and and whatever Yeah.
Speaker 2:What do you what do you you you guys sell a ton on Amazon. What what do you think Amazon's like play here really is? Because they obviously don't wanna give up the golden goose of their massive ad revenue business. They wanna like protect that. Alexa is, like, not even in the picture as far as I'm concerned in terms of, like, a shopping assistant.
Speaker 2:So what's the play?
Speaker 5:Well, you know, Amazon has a beautiful ad arbitrage system where they spend they're like the number one spender on Amazon I mean, on Meta and on Google because they can spend $2 to get a user, and then those users click on a bunch of ads on Amazon. It's a free money machine that they've invented. So Yeah. No kill. Yeah.
Speaker 5:I think they would would love to partner with everybody because once you're on Amazon, you're still gonna click around. You're still gonna do shopping, and they have an ad product. The more interesting question is what does Shopify do? Because, you know, Shopify is a product feed of all these merchants. Right?
Speaker 5:But will they be able to win over any sort of of these deals? They they don't have an ad product. Like, they make all of their money on me hosting my website and then a percentage of the sales I drive. And it's a very small percentage. It's a payment processing company.
Speaker 5:So it's like, how are they going to survive if more and more of those transactions are happening inside of ChatGPT or inside of Gemini? I think Amazon's fine. They have a big enough product, you know, feed. They could feed it everywhere. And if you do come to Amazon, they get all their money back with all the clicks.
Speaker 2:Mhmm. But walk me through walk me through the risk of Shopify because if I am am if I'm looking to there's a lot of there's a lot of brands like there's a ton of I would say like the real like shopping that I've done over the last five years is like almost always on Shopify stores. Right? Like Amazon for like essentials and things like batteries and things of that nature. But I feel like a lot of my like like like lifestyle consumption is happening on Shopify.
Speaker 2:And so you mentioned that that not having that, like, ad flywheel, but am I not still, like, discovering Ridge and just popping over to your Shopify store and, like, to complete the transaction? And if they're effectively a payment processor, like, they're still making their money?
Speaker 5:Right. Well, it's just if websites continue to be important. Like, I you know, I I'm I'm gonna operate on the assumption
Speaker 2:that Yeah. But all But calling calling Shopify just like a website company, Like, in my view, it's like a catalog and it's a CRM and it's a payment processor.
Speaker 5:Oh, for sure. It does all those things incredibly well. Bro, I'm so bullish on Shopify. I love I love Shopify as a thing. But the challenge is the website will become less important in the future.
Speaker 5:Just like mobile apps had a moment. They're not important anymore. Where's the last time when you guys opened a shopping mobile app? And before that, it was catalogs. Right?
Speaker 5:So, like, the user experience has has become easier and easier and easier. And the way you interact with brands has changed. And I think the website will kind of be replaced just by asking chat to buy you stuff. And may maybe you'll still go to websites, but kind of like how you still kind of open catalogs and
Speaker 2:I don't know. Catalogs. Like
Speaker 3:Yeah. That's right.
Speaker 2:In the recycling. I'm like, I did not ask for this.
Speaker 5:Totally. Right? And that's just like the the worry of of the website. So Shopify is incredibly important for us, but they do have to plug into every single LLM. Right?
Speaker 5:They have to be that product feed everywhere.
Speaker 2:And they're they're they've taken the approach of just like being more quick to partner with the LLMs than an Amazon has because, again, they don't have that same like they have like less to lose. Right? They're not worried that because they don't have an ad business, they're not like like, I feel like Amazon has to be a lot more when you look at the No. Catalog? When you look at the marketplaces that are partnered with ChatGPT, it's like Etsy.
Speaker 2:Right? Etsy doesn't really have anything to lose. Right? Like, they're just want more traffic, more more sales. Like, they'll take it however they can get it.
Speaker 2:Whereas, like, Amazon has something to lose.
Speaker 5:Right. You know? And it was big news when Shopify partnered with ChatGPT. Intel Amazon partnered with ChatGPT. And Amazon comes in with an equity round that, like, that now all of those products are gonna be feeding in ChatGPT.
Speaker 5:And that's one of the the worries of Shopify. It's like, how do you stand out? Right now, like, it's, like, beautiful brands with beautiful websites with shopping experiences, and that is different from what Amazon offers. But if all of those products are just going to be discoverable inside of ChatGPT and competing for the same space, I don't know the value of my website in three years. Like, that's one thing that we're worried about at Rich right now.
Speaker 1:Mhmm. Well, what about ad creative? I there's this weird trend where d to c companies were effectively making TV commercials with TV production techniques, cinema cameras, high res photos, whatnot. But wound what what wound up working on TikTok and Instagram Reels and YouTube Shorts was a lot of UGC, a lot of stuff shot on iPhones, a lot of stuff that feels more natural. Is there a world where maybe you wanna get good at creating Sora videos or or AI generated images?
Speaker 1:Even if they don't look like a real photo, it looks more natural within that app, Within the chat app, you're expecting to see AI images. And so you want to lean into AI image versions of your products. Even if the background's a little a little crazy hallucinogenic, it's what people will be used to. They'll be in that mode.
Speaker 5:Yeah. I think when ChatGPT launches their ad product, it's probably going to be thumbnails to websites with
Speaker 4:Sure.
Speaker 5:Really aggressive offers. Yeah. But right now, in our ad account, if you guys go to the Facebook ad library and pull a bridge, we are running full blown AI videos. Right? And they are they're getting spend, and they are winners in the ad account.
Speaker 5:Yeah. So we're all probably underestimating how much it's going to affect the ad industry. It's like by the end of the year, video is going to be, if you wanna make AI video, it'll look just like human video. And, like, the highest level productions are already being basically monopolized by AI.
Speaker 2:Something I've been something I've been thinking about that feels inevitable is, you know, two years from now we'll look back and laugh that people would like make an ad and then serve the same ad to like a 100,000 people or a million people. Because it's like, if you're gonna spend a lot of money serving somebody an ad, should serve them the most like hyper targeted like, Sean Frank, I have an athletic brewing company beer for here for you. I got an offer for you, Sean. Just click the link and check out. Like, eventually, it will just get so so so so targeted that it's basically like ads are being generated on the fly for individual customers.
Speaker 5:Oh, dude. That's for sure coming. Meta's working on it. And not only that, they'll put you in the ads. They'll be like, hey.
Speaker 5:Look how cool you can look in this sweater. You should buy this sweater. And they wanna do that because then the CPMs just go up. Right now, I get a $12 CPM on Meta. They would much prefer me get a $200 CPM and just show way less ads to everybody.
Speaker 5:Right? So I think that the personalization of ads is coming. And we've already just seen it. Like, in my ad account right now today, maybe a third of all my spenders will be AI ads. And that's crazy.
Speaker 1:That is crazy. Double click on the the the AI ads that you're running. Are you running stuff that you could shoot that's indistinguishable from human photography, human videography? Or is there a unique value to saying, look, there's just no way that we could take a Ridge Wallet to the top of Mount Everest, shoot it into space, have it turn into cake, have it turn into a cat, like crazy stuff that's just impossible, maybe with, like, a massive CGI budget, but truly, like, breaking the laws of physics? Or are you just trying to do, like, hey.
Speaker 1:It's just a Ridge Wallet on a beautiful background, and, you know, we were able to generate that?
Speaker 5:Yeah. So really what it is is, you know, we have wallets with every college. And let's let's say there's 200 colleges in America. Okay. Right?
Speaker 5:Now I could get 200 jerseys, and I could get 200 fans, and I could have them talk about this particular wallet with this jersey, with this fan. Like, they're they're very bespoke ad. Yeah. And then serve it into market like Ohio. I could do that, but that would cost, I don't know, $85,000 to run that campaign, or I can have one guy do it in one day with Hicksfield or whatever.
Speaker 5:Right? So that's what we're doing right now.
Speaker 1:Shout out to Hicksfield. We're having
Speaker 2:Are you guys using Hicksfield?
Speaker 1:We're having them with the show in just a couple minutes.
Speaker 5:Yeah. I love Hicksfield. So yeah. And I I don't think, like I think normies are using ChatGPT now, like, fully broken through the mainstream.
Speaker 3:Yeah.
Speaker 5:But, like, I like, the all of the the tools around that, I mean, everyone knows Lovable. They're Bolt. New. Yeah. But, like, if you wanna make videos at scale, Higgs feels like the best easiest way to do that
Speaker 1:right now. The pipeline is you specifically wanna multiply your creative. So you are filming one human video, and then you're creating variations with AI. Is that the correct use case right now as as that example?
Speaker 5:No. No. So what we're doing is we we have b roll of actual wallets being used that we've shot. Right? But we need an opening hook of a a Buckeyes fan, right, in a jersey or whatever.
Speaker 5:So that is that is being done with AI. Oh, interesting. To the wallet.
Speaker 1:Got it.
Speaker 5:Okay. And you can pull up our attic right now. There's a woman, like, hunter. She's walking, talking about, like, hey. Like, I bought this for my husband.
Speaker 5:He's like, you know, whatever. That she doesn't exist. That is all AI. And it's because for us to find a woman hunter who's out in a field or whatever, we could we could do that. It would just take, you know, two days, and it'll probably cost $2,000.
Speaker 5:And we can test that concept right now in real time inside the Facebook ad library.
Speaker 2:So It's gonna be interesting. I'm so curious to see what happens to the brands that, like, try to take, like, some type of, like, moral aesthetic or ethical high ground and just say, like, we never use AI. And, like, what actually happens to those
Speaker 5:Well, dude, it's one of those things. Yeah. It's like not using AI. It's like it's like if somebody said, like, yeah, we don't use computers. I'm like, I don't even know what you mean.
Speaker 5:It's like everything's AI. Everything's gonna be AI. So look, incredibly bullish on ads coming to any surface of the Internet. So if there's any surface of the Internet that doesn't have an ad, I would love an ad to be there. So Say again.
Speaker 5:Guys did the Applovin ad read. Brand new to ecommerce, and I spent millions of dollars there, and I love I love it as an ad product. So more of that is just really good for me. So if it comes to Gemini or ChatGPT, now I just don't think they'll do big beautiful display ads. I don't think there'll be any video ads.
Speaker 5:It's just gonna be, hey. You're looking for a gift. Ridge Wallet will give you the best price ever right now, and then they'll take a 30% commission.
Speaker 2:I really wanna see more flashbangs come with the
Speaker 1:Watch out. Watch out.
Speaker 3:We gotcha. I hope
Speaker 2:you Do you have any flashbangs on your podcast? You're the you're the one show that we would give you the the the effect if you wanna if you wanna flashbang your boys.
Speaker 3:Okay. Cool. I'll I'll get
Speaker 5:the ad rights to that.
Speaker 1:We also have a horse that runs across the screen now.
Speaker 2:We'll we'll save that. We'll that.
Speaker 1:And so
Speaker 2:For right now.
Speaker 1:Wait. Have you have you have you used any other of the AI ads, like, AIs basically, like, I heard Perplexity was rolling out ads in their product. Did you demo that? Have you have you thought about using that? I know it's, like, smaller earlier.
Speaker 1:Do they have they are they actually live? Do have any experience there?
Speaker 5:No. And I have a list of in front of me, like, I told you earlier. Northgate did a report.
Speaker 3:Yeah.
Speaker 5:And ChatGPT is 99.5Percent of all AI traffic to ecommerce websites right now. Wow. So
Speaker 1:So it's a big one. So this is a big announcement today. So we what does it take to actually get Ridge live?
Speaker 5:I don't know, man. You got you guys know Sam. Dude, hit him up. Say he's got his first paying customer right
Speaker 6:He's a little busy today.
Speaker 1:He's gonna go back and forth between Oakland and traffic. Traffic. No. Yeah. We'll we'll we'll put in a good word for you.
Speaker 1:I'd love
Speaker 2:to What what kind of broader consumer trends are you tracking this year? We were talking about the sauna wars in New York City. Mhmm. People setting up these like bath houses. I was somewhat bearish on the trend Mhmm.
Speaker 2:Like nationally. I just think there's a lot of places in America where people will be like, am I gonna pay a couple $100 a month for this like sauna like, bathhouse membership, or do I just wanna buy one, you know, for my house? And and but what what are you tracking?
Speaker 5:Well, on the sauna wars, I mean, Paws is a franchise based sauna business. They have them in Venice. They have them in Southern California. I was at a ecommerce or like a a private equity conference. I think those guys are gonna expand aggressively.
Speaker 5:So I think they're selling to
Speaker 2:Yeah. But here's right now. I used to live down the street from a Paws. I would go there. I enjoyed it.
Speaker 2:I was like, I like using a sauna and I like using an ice bath. And so I just bought one because it was like a $100 every time I went. I just did the math and I was like, it's nice to go there but it's it's nicer to just have it in my house. And so that's that's one of those things. Like, I I don't know how much like actual spend they they can capture long term or what the LTV is.
Speaker 2:Like, if you get somebody hooked on using the sauna, eventually they just run the numbers. Right? It's not like a gym where it's like, at gym, I'll pay the, however much it is a month because it's nice to go somewhere out of my house to work out and I don't want 300 different machines and all these different plates. So I'm not convinced that it's actually gonna scale that well outside of, you know, major metros like LA and New York.
Speaker 5:Yeah. Also, the cost per use of a gym is really low compared to a $100 every pop of a of a pause. But I they're gonna expand like crazy, and it'll be a great private equity transaction for somebody. But, yeah, long term, it's I mean, I don't I don't think it's a good trend. The thing we're most interested in is fiber.
Speaker 5:I think fiber is gonna have a protein like moment. And protein's been, like, on a megatrend for twenty years or whatever and has billions of dollars in spend behind it. You know, creatine had, like, a little taste of that, but fiber will be, like, the next, you know, thing that even reaches something like a protein. So we think fiber is like the the obvious big trend right now that's going mainstream.
Speaker 2:Mhmm. Will we see will we see you you guys enter enter the category this year?
Speaker 5:Oh, we're secretly in the fiber space already. So we're not talking about it, but we have we have a brand bubbling up. We have real customers that are paying. They don't know it's behind Ridge, but we'll talk about that maybe offline.
Speaker 2:Amazing. So you're gonna post your revenue every single month to invite thousands of competitors into the category. Right?
Speaker 5:Yeah. Yeah. Seems to be the smartest thing to do. Right?
Speaker 2:It's like I I the the the build the build in public movement brought to consumer is just an absolute nightmare. It's like if you brag to the world about how much revenue you're doing, there are gonna be smart people that enter your category. And they're gonna do it fast and they might out execute you. I don't think they'd out execute you guys, but I've yet to see see a consumer founder build in public that didn't ultimately regret it.
Speaker 5:Oh, yeah. You know, we're pretty public with Rich just because I think you have to be stupid to try to sell wallets in 2026 or whatever.
Speaker 2:Yeah. But but but for you guys, it was it was never like you were just like, here's our investor update. I'm publishing it because it's so good. Like, you guys don't have investors, but like, it was never like, I'm gonna flex monthly on the timeline Mhmm. Which is the approach that I think a lot of people have had, like, on on the the consumer side.
Speaker 5:Yeah. I mean, because consumer's a knife fight, man. Like, there's no moats at all. It's it's the digital equivalent of opening a restaurant, I think. So, you know, like, you're you're fighting for every single transaction.
Speaker 5:Right? You guys were just having, you know, Sequoia on talking about it's a great time to sell enterprise to ask because you guys have hostages and not customers. And it's like, yeah. I would love I would love to have Yeah.
Speaker 1:There's truly no lock in once once you buy one. It's not that you have to come back the next year, whereas for a lot of enterprise SaaS, if you stop paying, your entire business shuts down.
Speaker 2:Yeah. The the moat is it's like scale, operational excellence. But those things like those things can erode. Mhmm. Very team based.
Speaker 1:Well, thank you so much for taking the time to hop on.
Speaker 2:It's great to see you. Next time you come on, come in person. We'll hang out. You know it's not that long of a drive. Yeah.
Speaker 5:Dude, I would love to and
Speaker 2:Wait. Guys keep crushing it. Once you once you actually have the the OpenAI ad platform live, let's come here.
Speaker 1:Let's put
Speaker 6:it on
Speaker 2:the big screen. We'll get a bunch of monitors. Yeah. And we'll just monitor the situation together.
Speaker 5:And we'll clap every time a sale comes
Speaker 1:in. Yes. Yes. Dude.
Speaker 5:Hell yeah, brother.
Speaker 1:And thank you for hooking the team up with Ridge Wallet.
Speaker 2:Oh, yeah. You guys are too kind.
Speaker 1:I was in the gym this morning with some of the folks. They they had the suitcase. Look at the suitcase.
Speaker 2:There it is
Speaker 1:in the corner.
Speaker 4:There
Speaker 1:we Every single member of the team is rocking a Ridge suitcase.
Speaker 3:There are
Speaker 1:more Ridge Wallets than you can possibly count in this UltraDome.
Speaker 2:It's amazing.
Speaker 1:We're huge fans.
Speaker 2:We love you.
Speaker 1:Carry I Ridge Wallet every day. I love it.
Speaker 2:Talk to you.
Speaker 5:Brothers. Thank you. Keep crushing. Goodbye.
Speaker 1:Goodbye. Goodbye. Restream. One live stream, 30 plus destinations. If you wanna multi stream, go to restream.com.
Speaker 1:I wanna talk about ads more. I wanna talk about vibe.co's ads. They're a sponsor of us, but they've also been burning up the timeline with a number of billboard ads in San Francisco. Shiel Monat, friend of the show, says these ads are very clever. What else is in the collection?
Speaker 1:And I got a preview of some other ones. So this is Jensen on Target Jensen on TV. That's a brilliant billboard. It only works in San Francisco, but Jensen Wong, the CEO of NVIDIA, his leather jacket is iconic. And so you see the shoulder of the leather jacket with Jensen.
Speaker 1:You know what they're talking about. If you wanna get to him, you're gonna go to vibe.co. What else did they do? They did say target Mark on TV. They put just Mark Andreessen's It's head an iconic image, and it lets you know immediately how can you target someone like Mark Andreessen.
Speaker 1:It's hard. He's not gonna be everywhere. Vibes.co has great targeting. So I got a little teaser of what else is available. We got Sam Altman.
Speaker 1:Target Sama on TV with the McLaren app. Real?
Speaker 2:Is that real?
Speaker 1:And then we'll go to the next one. Target Zuck on TV, and it's a wrist with a with a FP Jorn on there or a Patek. No. You made
Speaker 2:these.
Speaker 1:And then the next one, they have a Target Cesky on TV, and it is a barbell. Yeah. So this is the type of marketing that that you gotta be doing. You gotta be thinking, okay, how do I how do I send a message? There's there's one more.
Speaker 1:We'll go to this. Target Augustus on TV. Of course, everyone knows Augustus Dorico.
Speaker 2:You know, he's known for carrying human version of the white monster.
Speaker 1:If you put this billboard up, everyone's gonna get it immediately. They're gonna know that you're you're cool. They're gonna know that they should go to vibe.co and they should start targeting folks like Augustus Dorico, the CEO and founder of Rainmaker, who's known for having a white monster every once in a while.
Speaker 2:Not every once in a while.
Speaker 1:Pretty much Every
Speaker 2:hour. On the hour.
Speaker 1:He's powered by it.
Speaker 2:The way you drink Diet Cokes, I I imagine he drinks White Monster.
Speaker 3:Yes. Yes.
Speaker 2:It's just like, oh, oh, it's 02:00.
Speaker 1:No. No. The four of those that that we just displayed, I did generate in Nano Banana with Gemini three Pro, Google's most intelligent model yet.
Speaker 2:Leah says, love trash day. Love here in that truck. Humans getting stuff done. Cooperation, logistics, municipal services, civilization. Couldn't agree more.
Speaker 2:It's a reminder that we haven't collapsed yet.
Speaker 1:Dude, a four year old, the way their face lights up when the trash truck comes, and it's just pure wonder at the massive machinery moving up and down the street, the beeping when it backs up, that is childlike wonder that you should never lose. No matter what
Speaker 2:Never lose it.
Speaker 1:It is. You should always take take a moment to show some respect for the trash truck. I completely agree. I love it. Joe Wiesenthal is crashing out.
Speaker 1:He says he never wants to use the web again. He said in today's Odd Lots newsletter, he wrote about how depressing the Internet's become. We'll read his piece. And we need to catch up with Joe. I think he's coming on the show soon.
Speaker 1:He says, I swear I swear this is not another piece about my personal forays into vibe coding. Okay. Maybe it is a little bit, but not really. So last year, we did an episode with the COO of Perplexity whose name is Dimitri. He says, which is kind of a hybrid LLM search engine, you'll be familiar with it.
Speaker 1:It's it's very tethered to the real world. So if you ask it about, hey, maybe the latest developments in Venezuela, it will obviously produce text, but also links to the latest reporting from reputable news outlets and other sources. It generally works well if you want to get up to speed on something that's happening right now. Anyway, one of the questions that Joe tried to get across with Dmitry, but he doesn't think he phrased it all that particularly well, is what happens to the future of the web as we know it if more and more of our news is coming to us from chatbot form? Let's just imagine people start regularly making Perplexity their first destination each morning to capture up on the news.
Speaker 1:And let's just imagine for sake of a thought experiment that the traditional news publishers come out fine in this relationship. So the New York Times is and the CNNs and the Al Jazeera's of this world are getting adequately compensated for their reporting to be summarized and displayed in perplexity. It's hard for me to imagine this future, but whatever is beside the point. So he's just saying it's not an economic issue. Let's talk about the the the vibes that would result from this.
Speaker 1:So this is this is his question. In the future, why do websites still exist? If more and more people start consuming The New York Times' content through a chatbot, why continue continue to invest in maintaining a well functioning website called n y times dot com? I suppose that to some extent, this is a question that precedes the existence of chatbots. There was almost certainly a time when a majority when a major priority for The New York Times was to have a well functioning elegant website.
Speaker 1:And while there are people still paid to work on it, this is probably not their top priority right now. A tech budget that might have once gone to web development might now be going to figure out the best strategy for Instagram, Reels, or whatever. Nonetheless, do you have a comment, George?
Speaker 2:Yeah. Maybe maybe this is just because I turned 30 and I'm unk now. Unk. But I like going into the world of the content. Mhmm.
Speaker 2:Like, I like going to the Wall Street Journal app.
Speaker 5:Yeah.
Speaker 2:I like going to the New York Times app. I like going to these places because
Speaker 1:I like the physical paper.
Speaker 2:We like the physical paper.
Speaker 1:This isn't going anywhere. For my cold dead hands, me and you, Joe Wisenthal, we are keeping the newspaper alive. I guess you'll be on the web like some hot new young in. And ultimately I will read in the paper.
Speaker 2:Yeah. Ultimately, still care about like, matters. I care a lot about who wrote it too. Totally. Like, I don't wanna just serve
Speaker 1:But that can be instantiated in perplexity or chatty bitty. Yeah. You can tell you who wrote it. You you could, in theory, if the if the deals are structured properly. Now, you can't get I I don't think you can get The New York Times content in the in ChatGeePee because they have a lawsuit.
Speaker 1:You can get Wall Street Journal content. So in theory, you could kick off your morning with a query to ChatGPT. Hey. Tell me the most interesting pieces that are on the front page of The Wall Street Journal, and it would just do it for you, and it would bring that in. It would pay News Corp accordingly.
Speaker 1:But there's something fun about holding a nice piece of paper in your hands. I think it will die, but a very, very slow death. We're still reading newspapers. I imagine I'll still be reading newspapers in a while, and I imagine that we'll still be going to the websites. But he is correct to to highlight that there is a change of foot.
Speaker 1:So he says, nonetheless, the web browser is by and large still a dominant piece of software for accessing content and services that exist on the Internet. And in fact, if we step out of the news context and think about it, say, buying a car buying car insurance, then the website as we know it is still incredibly important. Anyway, I was thinking about this again because my vibe coding foray, easily the most annoying parts were when I had to leave the terminal interface and do something on the web. So it's still an unbelievably annoying process to do something simple like redirect a domain name. I found GoDaddy's, where I've been registering various domain names for years, interface to be borderline unusable.
Speaker 2:Shots fired. Back check true.
Speaker 1:It is difficult sometimes.
Speaker 2:Every time I'm I'm I'm just trying to make sure that, like, a domain is renewed Yeah. They're like, how about you buy a thousand websites right now? Just buy a thousand websites. Name I'm a com.
Speaker 1:Guy. Experience.
Speaker 2:We have 1,000,000,000 websites for you. Yeah.
Speaker 1:Yeah. Yeah. As I mentioned in the piece he wrote on Tuesday, one of the first things Joe did to make it so he could update his website directly from Cloud Code rather than having to update the files via Cloudflare back end. This is the first very small thing, but the point is that every time I had to open or operate in the browser, it felt deflating typing in URLs, clicking buttons, checking boxes, pulling down dropdowns, entering fields. No.
Speaker 1:Thank you. He's genuinely curious what happens to visual the visual web that's designed for humans. I know there's plenty of work that's being done to allow agents such as Clogcode to go to a website, click around at what human does. Just in the same way the chatbots were trained on billions of Reddit posts and everything else on the Internet, these agents are being trained by ingesting numerous sessions of people moving a mouse on the screen and so forth until they can mimic that process. So that's all well and good, but it still gets to this issue that we currently have much of the Internet presented in the form of web pages that are designed to be logical and pleasing to the human eye.
Speaker 1:We still do so much on the web, but now every time I have to use the web, it feels kind of like a personal failure. It feels inefficient. And if the web is increasingly going to be navigated by bots working on a human user's behalf, then why even bother optimizing it for visuality at all? I don't know where any of this is going, but my guess is that it's pretty big structural changes are in store for what people think of as the Internet. Yes.
Speaker 1:It's interesting. No.
Speaker 2:I feel like the Internet is already living in apps so much. Mhmm. Like when I think about a world in the future where an LLM is just generating me Mhmm. An article Mhmm. That was in the New York Times that day.
Speaker 2:Yeah. I could imagine it just generating it in a visual style. The New York Times, like Yeah. Decides themselves.
Speaker 1:Yeah. I mean, you can already do this with Nano Banana. You can you can say, write me a New York Times style article about this topic. It will write it, instantiate it. It will search the web to find the facts, so it'll probably not hallucinate that much.
Speaker 1:And then you could say, turn it into an image that looks like a New York Times screenshot, and it'll do that too. So people will people will be met where their preferences are. I don't know. I I I think that I mean, the the flip side is, like, he's he's making this argument that as more and more traffic shifts away from the web, it will get fewer and fewer resources within those organizations. So the New York Times will say, hey.
Speaker 1:You know, we're not getting that much traffic to our website, so let's not spend that much effort making it better. But you also get 10 times as much leverage because the folks at The New York Times will be able to fire off an agent and say, make it look better. And so you would imagine, I would hope that even as you go from, okay, maybe there's there's 10 people working on a on a website, and now, five of them move over to Instagram and YouTube strategy, and four of them move over to generative optimization strategies and LLM and AI stuff. Well, there's one person left, the person on the the Japanese soldier on the island who hasn't gotten the memo, that no one's going to the website. Well, some people are going there, and they fire off a prompt.
Speaker 1:Make it perfect. Don't make mistakes. And boom. They're good. They're in business.
Speaker 1:So some cause for optimism. We'll see. What do you think, Tyler?
Speaker 2:Well, I
Speaker 6:I was just gonna update on the on the same Altman.
Speaker 1:Please. Give us an update. What's up?
Speaker 6:Okay. So so first, Jesse, if you wanna look at prediction markets.
Speaker 1:Mhmm.
Speaker 6:Right? So will Elon win his case against OpenAI? Yes. Earlier today, basically at the peak of like the, oh my gosh, like Sam is so cooked. Yes.
Speaker 6:He was at 74 and a half percent chance. Woah. It's down at 54.1.
Speaker 1:This is fascinating. We're watching them like duke it out in real time
Speaker 6:Yeah. Prediction Elon It's wild. He doesn't have to worry too much because Nick Oh, Nick. His broncest soldier
Speaker 1:From the rack. Yeah. From the rack.
Speaker 6:Saying it reads as Elon's emails
Speaker 1:Yeah.
Speaker 6:Or it reads as obviously fabricated. Elon doesn't talk like that. So
Speaker 1:Oh, well, you know, case case closed. Case closed. I wonder if Nick will be caused called to testify. We'd love to see him on the stand. That would be very entertaining.
Speaker 1:Anyway, Jensen Huang doesn't care about gamers, allegedly. ASUS reportedly says the RTX fifty seventy Ti is no longer being produced. RTX fifty sixty Ti 16 gig to follow. The gamers have been having a rough time.
Speaker 2:With Jensen says, I don't wanna play with
Speaker 1:gamers anymore. It's AI. The time. Yes. Gamers are being squeezed left and right.
Speaker 1:We we we we need to make everyone aware of of the rights of gamers with our COD sounds and our flash bangs and our smoke grenades to let people know, let Jensen know. Maybe we'll have to bring Jensen on the show, throw a smoke grenade, and when the smoke clears, he can tell us that he is still committed to gamers. Let's move on to World Labs. World Labs launched a box. They shipped a box.
Speaker 1:It's a video of they took World Labs. I think this is real. I I have no idea how to process this, but it looks like they built a screen put in a box that has an IMU, inertial measurement unit, that can measure how the box is being rotated, and then it can rerender the world so you're looking into it in this box. This seems really, really cool. This seems like just a piece of hardware that people would actually buy and sell.
Speaker 1:We've seen this with the holographic display that you put next to your gaming rig made by ASUS or a Razer. I guess Razer is the one that makes it. This is really cool. I'm a big fan of World Labs, I like that they're they're productizing this. I I wonder if this is, like, a stunt, if this is just for fun.
Speaker 1:I really hope we can get our hands on one of these because this looks amazing. Well, there is more news in the AI talent war. The total
Speaker 2:Here we go.
Speaker 1:Folks, the total number of employees that are leaving Thinking Machines. Alex Heath is hearing that it's up to six now. True Scoop god is on on the trail of another scoop. He posted this at 2AM. He's up burning the midnight oil, getting the scoops on thinking machines.
Speaker 1:Maybe up to six people leaving.
Speaker 2:Naval says California based
Speaker 1:unicorns Do think do you think all the thinking machines folks were like, wait a minute.
Speaker 2:We want to work on ads.
Speaker 1:They're gonna do ads at at OpenAI. I gotta go back there. I gotta go to OpenAI. I gotta get out of here.
Speaker 2:It's been my dream.
Speaker 1:Mira hasn't said anything about that.
Speaker 2:Or maybe it's maybe it's they wanted to work on adult mode.
Speaker 1:Maybe. Maybe. There's lots of reasons. Or Sora. They could be trying to grind up
Speaker 2:the The Disney IP. They they wanna get their hands on that IP.
Speaker 1:Yeah. They wanna slough it up, and they say, we're not doing any of that at Thinking Machines. So we're going over that opening. Talk about this.
Speaker 2:Naval says California based unicorn is being routed to the glue factory. Horse metaphor. Mincing words.
Speaker 1:Yeah.
Speaker 2:We will protect the unicorns. Unicorns are horses. We will protect them.
Speaker 1:They are. To read through David Friedberg's piece.
Speaker 2:Yeah. Fantastic piece. California started with the gold rush and might end with the golden exit. It has been underreported how much wealth has left California because of the asset seizure tax being proposed. It's important that we continue to call it the asset seizure tax.
Speaker 2:A private poll was conducted amongst affected individuals a few days ago, and 80 to 90% surveyed they'd already left California in 2025 or will leave in 2026 if the ballot measure looks likely to pass. Of course, the ballot measure currently is retroactive, so they would be subject to the five percent one time tax, and of course, it would get litigated. Dave Friedberg continues two to two and a half ass half trillion of assets gone, representing 20,000,000,000 of annual in annual revenue for the state government and likely hundreds of thousands of jobs now at risk. Less reported is the bigger exodus underway from folks who are not directly affected, but worry as they should that this law will quickly transition from billionaires to everyone else. The initiative actually gives California legislators the right to take anyone's post tax assets anytime in the future based on a majority vote.
Speaker 2:This isn't about billionaires. It's a new tax system that simply destroys private property rights in America. All private property is now public property, even after paying your taxes. It's not legally your property anymore. It's the government's.
Speaker 2:You're just borrowing it. Legislators will decide what you get to keep and temporarily use each year. Countless founders, CEOs, and other business leaders are actively looking to move their companies out of state, Not just tech, not just AI, not just billionaires, but the core engine of California's prosperity since 1847 is unraveling. And here is how this initiative risks unraveling America. 10 states have explicit or implicit prohibitions against asset seizure tax.
Speaker 2:Individuals affected in California and other states trying to do the same will move to these states that endow private property rights. California already has a 20,000,000,000 to $30,000,000,000 budget deficit, an unfunded $1,000,000,000,000 pension liability for public employees, unions, and $500,000,000,000 of debt outstanding. The state cannot afford to borrow much more and will launch more asset seizures to meet its obligations. Asset seizures will transition to millionaires and eventually to the entire middle class as more asset seizures drive more people to leave the state. The deficit debt and job loss will spiral.
Speaker 2:The golden exit, no US state has ever declared bankruptcy. In addition to California, dozens of other states face similar fiscal crises. Legislators promise future benefits that can't be paid, where theft and waste have been allowed to run rampant and unabated for years. Struggling states will eventually request federal government assistance as they always have in times of fiscal crisis, effectively federalizing state debt. States not in crisis will declare enough is enough.
Speaker 2:Individuals in those states will refuse to pay their federal taxes. Why pay for other people's mistakes? Some states may try to secede from the union, and a constitutional and civil crisis will erupt. I I know this sounds crazy Mhmm. But I think at some point, states will just say, like people, citizens will be like, why am I sending 30% of every dollar I make to bureaucrats in Washington that hate me?
Speaker 2:And so I think this sounds wild, but I don't I I don't think it's as far fetched.
Speaker 1:Yeah. One might be. It's very dark. It's it's
Speaker 2:like a little Friday blackmail. Not.
Speaker 1:We just the the answer the answer is is clearly just AGI pilling all of the California regulators. Just say, AGI will solve the deficit. We will just ask AGI to fix the debt, fix the fiscal crisis, fix the pension liabilities, fix the budget deficit. Don't make mistakes. And, and so much value will be created by AGI here.
Speaker 1:Just the income taxes will pay for that a thousand times over. A thousand times over. So you don't need to you can respect private property. Don't worry. It's gonna be fine.
Speaker 1:AGI's here to save it. That's the solution. Gotta pitch them. Anyway, back to the AI world. We have Alex from Higgs Field AI in the Restream Radio.
Speaker 1:Let's bring him in to the TVP and UltraDome. Alex, how are you doing?
Speaker 8:He's back. Great. So great to be back.
Speaker 1:It sounds like you're
Speaker 2:doing about the billionaire tax. You got this something that, fortunately, your business is doing so well. Yeah.
Speaker 1:Focus on growth. Focus on the good things. Tell us the tell us the best news in your world this year.
Speaker 2:Give me that mallet.
Speaker 1:Oh, yeah.
Speaker 2:Give me that
Speaker 3:mallet.
Speaker 1:Yeah. What's the latest? What's the latest metric?
Speaker 8:Absolutely. What's exciting, about Hixfield is that we see emergence of AI native social media agencies. Mhmm. So, really, teams from maybe 10 to 30 people Mhmm. Making commercial ads end to end with AI.
Speaker 1:Yeah. And we talked to yeah. We just talked to Sean Frank. He said he's a huge fan. He uses it for Ridge Wallet and has been able to generate custom ads for, you know, tons of different markets, local areas where it was just completely unfeasible to to cast so many actors, to to to to play so many different parts for every single different college team that he sells products for.
Speaker 1:Yeah. It's a it's a fascinating time. So this is mostly driven by agents or brands going direct. What's the biggest driver of growth for you?
Speaker 8:Absolutely. We are excited to see Fortune 500 brands really hiring primarily hiring really hiring smaller really hiring smaller agencies
Speaker 1:Yeah.
Speaker 8:So that they then use to make those ads. Mhmm. And I think although the most exciting segment is definitely direct to consumer, especially when AI can deliver not just the efficiency and not the cost efficiency, but also higher level of personalization. So the example which you just brought up completely makes sense.
Speaker 1:Yeah.
Speaker 8:Whenever someone needs to customize for thirty, sixty, 100 different user groups, let's say, sports teams Mhmm. Generally, I delivers against this goal, and Pixel is at forefront of that.
Speaker 1:What are the compute costs look like looking like these days? I mean, the the the big the big news is that you you jump from a 100,000,000 to 200,000,000 top line in just two months. That's insane. Congratulations. Jordy, hit the app level.
Speaker 1:Congratulations. Thank you. But but on the flip side, I mean, if you I mean, you are raising money. Obviously, the capital markets are open. But if you were really spending on inference, that could be, you know, difficult.
Speaker 1:How is how are the margins developing? How are you optimizing for inference cost? What are you seeing on just inference cost trends broadly? Are you are you happy with the progress, or what else can you tell us about the the the cost structure of this business?
Speaker 8:I have good news, and I have bad news.
Speaker 1:Okay.
Speaker 8:Look. I think the good news is that video models gets more capable Mhmm. So that over time, marketers can just upload all the brand assets in one place.
Speaker 3:Mhmm.
Speaker 8:And then the model just remembers all the context.
Speaker 3:Mhmm.
Speaker 8:And this helps to make not just one video, but multiple videos Mhmm. And extend existing marketing campaigns.
Speaker 2:Mhmm.
Speaker 8:I think this is gonna going to be a major unlock.
Speaker 1:Mhmm.
Speaker 8:Think about marketing agents who actually remember all the previous campaigns, all the performance of the previous campaigns, and so on. Yeah. The although there is a bad thing. Like Okay. These models, they get bigger and bigger.
Speaker 8:There is no other pay there is no other path around. I think most of the video models, this last year were maybe between ten and fifty billion parameters.
Speaker 3:Mhmm.
Speaker 8:And this is going to scale well beyond 100,000,000,000 parameters.
Speaker 3:Okay.
Speaker 8:So I think, so the although the good news is that in the same time, we're seeing customers spending thousands dollars a month on the platform Yeah. Which tells us that Slay likely make thousands of videos. Cost per one video is still quite below 1 zoller. Yeah. Is this is very interesting times as we move from a concept of
Speaker 2:Oh, yeah. That's an insane that's an insane reduction in cost because I'm Even
Speaker 1:sure the most efficient video shoot on your iPhone, you're gonna spend a day even if you're paying a
Speaker 2:marketing Yeah. When brands
Speaker 1:in turn $20 an hour or
Speaker 2:something like brands are doing to generate UGC content. Yeah. Historically, you know, now they can use Higgs Field and generate stuff on the fly. But historically, you'd be like, okay, I'm setting a budget of like $2,100 an asset and then you'd have a bunch of people like actually record on their iPhone to generate. And so if you're saying it's, you know, a dollar an asset or sub a dollar, it's like a 100 x reduction in cost.
Speaker 2:It's pretty significant.
Speaker 8:Absolutely. I think cost reductions has already I mean, it has already happens compared to physical production. And I think this batch content generation, meaning that we make not just one video but hundreds of videos simultaneously, I think this change happening this year. So the goal for Higgs field is to leave those like, this new wave of agentic behaviors and build Coursera for video.
Speaker 1:Mhmm. What about getting the ingesting the data on performance? Do you have API integrations with all the big platforms where you're ingesting ad data from Meta and AppLovin or whoever else you're distributing video content through? Or are is it PDF upload, CSV upload? Like, how are you thinking about actually creating that feedback loop?
Speaker 1:Because that seems extremely powerful.
Speaker 8:Yeah. Absolutely. On that angle, I can tell that probably 2027
Speaker 2:Mhmm.
Speaker 8:Is going to be a year of major evolution in ad tech worlds. Mhmm. As connecting generation with performance data is going to become major points.
Speaker 1:Got it.
Speaker 8:This year, we collect a lot of these data from social media platforms. We built most of these integrations
Speaker 2:Sure.
Speaker 8:And establishing direct relationships with the platforms. Very we collect a lots of very valuable data points directly as we see which generations results in an actual ad
Speaker 3:Mhmm.
Speaker 8:That we can actually run reinforcement learning to streamline content creation process. I think this is the main priority for '26, and '27 is going to be a year of full revolution Mhmm. In advertising technology space.
Speaker 1:What what's going on in the hardware side? What would be most valuable to you? We saw NVIDIA acquire Grok with the Q. Grok's whole pitch has been very fast inference, usually for text based LLM models. When I think about the work of a marketer generating a bunch of different video variations, if they fire that off and they come back an hour later, that doesn't seem like a terrible experience.
Speaker 1:So are you more focused on higher fidelity, larger parameter counts over speed? Are you interested in what's happening in custom silicon in a particular area? Or do you just want more and more NVIDIA GPUs at your disposal? Like, what's what's important on the infrastructure side for your plans over the next few years?
Speaker 8:This is this is a great question. I think we have seen that custom silicon can perform really well.
Speaker 4:Mhmm.
Speaker 8:Gemini three is the first multimodal LLM, which has these emerging capabilities, like which is not a banana pro model.
Speaker 2:Yeah.
Speaker 8:This model essentially made Adobe obsolete. Yeah. Who needs to yeah. Because, I mean, who needs to go to Photoshop?
Speaker 1:Yeah.
Speaker 8:Yeah. Look. I mean, I I am not saying, like, like, especially for social media marketing
Speaker 3:Yeah.
Speaker 8:If we're being serious. So because, I mean, going and if let's say, Georgie, you assigned me to go and make, five ads for you a day Yeah. And try completely different stuff. I don't have time to go to Photoshop and push every pixel to make it perfect. I better use a model like like Banana Banana Pro to really to deliver against the vision.
Speaker 8:Mhmm. And it's semantic based editing, not just, like, pixel pushing.
Speaker 3:Yep.
Speaker 8:So I kinda miss I
Speaker 2:kinda miss when you you used to be able you used to see a like a like really high quality Photoshop on the timeline. And part of why you appreciate it is like somebody really needed to put effort in or they needed even if they're not great at Photoshop Yeah. They hired somebody and it's like you and and nowadays You
Speaker 1:know they got the lasso tool and they cut that character out and slap that text over there, threw a drop shadow on it. Now it's just a prompt. It's fascinating.
Speaker 8:Yeah. Now it's just a prompt and it's done with custom silicon. So I think we're gonna see a sense of custom silicon for sure. Mhmm. And Gemini and BananaBananaProd are come are amazing model with these emerging capabilities.
Speaker 8:We we really embrace those create those creators and social media marketers who creates ads with AI end to ends. Mhmm. So they don't have to go to Adobe tooling at all.
Speaker 2:Mhmm. How how are you tracking the the problem of understanding what's what's AI generated, what's real? This is now a daily Better. I feel like it used to be, like even, like, twelve months ago, it was, like, you know, once a once a month, you'd see something and you're like, oh, is that AI or is that real now? It's like almost every single day.
Speaker 1:Oh, I I see stuff on Instagram all the time where I know it's AI, but then I go to the comments and and everyone's happy. No no one's it used to be people would clock it. And then even if they couldn't tell, they would key off of the comments and and then kinda pile on. Now people are just like, yeah. This is good content.
Speaker 1:Well, yeah, what's your take on on AI detection, how it's working through its way through the Internet?
Speaker 8:Look. I think that's we're we're going to see more standards emerging.
Speaker 1:Mhmm.
Speaker 8:I think Europe in the European Union, it's a big thing. Mhmm. We're gonna see something by the end of the year coming on that front, I guess. I can just tell you that direct to consumer brands, they primarily don't care if that looks like AI generated content or non AI generated content. As long as it catches eyeballs and it sells Mhmm.
Speaker 8:They just keep coming to Hixville than making more of such videos. So the best the best performing AI generated ads, they look like AI ads Mhmm. And they don't look like real ads. Think that's Oh. That's my main observation.
Speaker 1:Yeah. Yeah. Yeah. I mean, there's a certain element where, the iPhone, the selfie video, it never actually wound up looking like an HBO show or a James Cameron film. It never wound up looking like you know, it was shot with a $100,000 camera.
Speaker 1:But everyone just got used to it, they liked the aesthetic, and we grew accustomed to that aesthetic. And it has its own aesthetic, and so have AI content. Even if it retains its aesthetic for a very long time, even though I think it's gonna be indistinguishable, already sort of is. But But even if it does, people could just become fans of that and be like, yeah. I like I like the way it looks.
Speaker 2:Yep. Yeah. Interesting. Anything else? Very cool.
Speaker 2:Well, I also my buddy texted me. It's Alex Kasson. You guys just had lunch?
Speaker 1:No. No way.
Speaker 8:Absolutely. We're just chatting about small holes.
Speaker 2:Yeah. He he's a great guy to know, in this in this town. So are you in LA right now?
Speaker 8:Yes. I'm in LA. I love Hey.
Speaker 2:Next time. You by should've the studio.
Speaker 1:Yeah. Next time.
Speaker 2:Could've been sitting here. You could've been hitting the gongs.
Speaker 8:Next time.
Speaker 1:Could've been moving the goalposts.
Speaker 2:Next time.
Speaker 8:Absolutely. Thank
Speaker 1:you so much for taking
Speaker 2:the time. On the progress. The growth is absolutely insane. Yes. And look forward to talking more year.
Speaker 1:Yeah. We'll talk to you soon. Cheers.
Speaker 8:Thank you, guys.
Speaker 2:Thank you.
Speaker 3:Have a great weekend. Goodbye.
Speaker 2:Alright.
Speaker 1:We can close with one of the best ideas that I've heard recently. It's from Ryan Peterson. He says we should have an AI transfer portal like in the NCAA. Couldn't agree more. Well, that's our show.
Speaker 1:The bomb has been planted. Thank you for tuning in today. It was a good one. For watching. Leave us five stars on Apple Podcasts and Spotify, And sign up for our daily newsletter at tbpn.com.
Speaker 1:We send out our newsletter every weekday. Enjoy the weekend. We will be live Monday. We will be live Monday. We'll be back at 11AM Pacific.
Speaker 1:So tune in. Have a couple live in person guests.
Speaker 2:Go touch some grass.
Speaker 1:It's gonna be a lot of fun. Well, hope you have
Speaker 2:a great us.
Speaker 1:And goodbye.