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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN.
Speaker 2:Today is Monday, 04/27/2026. We are live from the TBPN Ultradome, the temple of technology
Speaker 1:The fortress of finance.
Speaker 2:The capital of capital. Earlier show starting with guests. We have Zach Brown from McLaren Racing joining just a few minutes.
Speaker 3:Calling in Will Hurd
Speaker 2:coming in person. Anush from AMD is calling in at noon. Then Augustus is coming to the Ultradome at 12:20. And Rick Caruso will be in person with us as well at 1PM. We'll take you through some quick headlines of what's going on in the news today.
Speaker 2:Of course, Elon
Speaker 1:Take Musk moment for the production team. Have Yes. Screen
Speaker 2:in the background, much better contrast, much brighter. We're excited to explore this. The production team is stoked. We Good work, guys. There there's four key stories on in the news today.
Speaker 2:The first is Elon Musk's $134,000,000,000 lawsuit against Sam Altman goes to court today in Oakland. Musk is alleging that OpenAI abandoned its original nonprofit mission and became a for profit entity focused on maximizing profit for Microsoft. Jury selection is going on today. There are a number of reporters on the ground, and we'll be checking in on the progress there.
Speaker 1:Yeah. Already, there was some reporting that said certain people were saying it would be difficult for me to be unbiased because of my general dislike for basically everything going on.
Speaker 2:Okay. Yeah. Sam The and Greg were spotted on scene. Elon has not been spotted yet. There's also other Microsoft OpenAI news.
Speaker 2:They changed their partnership. OpenAI can now serve all of its products to customers across any cloud provider. Andy Jassy had some had a post about it saying it was a very interesting update. Obviously, he's excited to vend OpenAI technology through AWS, which they are also have a partnership. And so in other words, OpenAI can potentially use Google TPUs, Amazon Trainium, other chips are on the table now.
Speaker 2:There's a lot more flexibility that comes from that. Over in Meta World, China has blocked Meta's $2,000,000,000 acquisition of artificial intelligence platform Manus after regulators reviewed whether the deal violated Beijing's investment rules. This was something that went back and forth. Did they get enough of the company to Singapore in order to clear the hurdles that require the acquisition to go through? Then some members of the Manus team were detained briefly in China on business.
Speaker 2:There were
Speaker 1:some issues there. And one of the challenges is gonna be clearly the Manus team wanted to do this deal. Yeah. They wouldn't have signed up for it. Yeah.
Speaker 1:It was a great outcome for the They were excited to build with Meta. But one of the challenges is you have all these different team members, many of which, you know, were born and raised in China.
Speaker 2:Yeah.
Speaker 1:And they still have family members and people back in China that they care a lot about. So that's gonna be I would assume that's gonna be a leverage point Yeah. From the CCP.
Speaker 2:And the last story also from Meta is that they are planning to use solar power from space at night, beamed from They're partnering with Overview Energy, a different company than the other solar space
Speaker 1:The other talked about. Space.
Speaker 2:They've been in steam for about four years. They're planning to beam up to one gigawatt of space solar power from orbit to Earth for around the clock power production. They're also deploying one gigawatt of ultra long duration storage batteries with noon energy. So some exciting deals coming out of Menlo Park. Well, we will be revisiting these stories over the course of the show, but we have our first guest of the show in the waiting room.
Speaker 2:Zach Brown from McLaren Racing is here with us on the TV at Ultradome. Zach, good to meet you. How are you doing?
Speaker 4:Yeah. I'm very good. Yourself?
Speaker 2:We're fantastic. Thanks so much for taking the time to jump on the show. I know it's later where you are, but we appreciate you taking the time. I would love to
Speaker 1:Looking forward to this.
Speaker 2:Should we start at the beginning? Should we go through sort of the journey to how we got here?
Speaker 1:Okay. So the backstory is that people in tech say they love F one, but they've really just watched maybe one, maybe two seasons of Drive to Survive. So they know you in that assume the audience knows you in that context, But we wanted to have you on to actually understand your history more and then talk about how f one The business. Is. The business of f one and then also how technology is shaping it today.
Speaker 1:Because obviously it's always been engineering led, but there's some a lot of exciting advancements. So, yeah. Should we start at the beginning?
Speaker 2:Yeah. I'd love to know Absolutely. Yeah. Yeah. I'd love to know, like, the you started in karting.
Speaker 2:What was the first initial spark that got you into racing so many years ago?
Speaker 4:Nineteen eighty one Long Beach Grand Prix. I'm originally from, LA, so I was 10 years old at the time. And, my mom and dad, who didn't have any involvement in in motor racing, was kinda like the circuses in town. And they took myself and my brother, and as a 10 year old kid, when you get around a Formula one car and you hear it and you see it, and the size and the scale and the speed, I became a a Hot Wheels kid. And then, went to high school, barely, with, someone that was was in racing.
Speaker 4:And so we went back to the Long Beach Grand Prix in 1987. At that point, I'd really had the bug and met Mario Andretti, one of my, heroes, and asked him how do you get started in racing? And he said karting, and there happened to be a little ad in the, race program for Jim Hall Kart racing school. I'd been on Wheel of Fortune teen week at 13 years old, went and sold a bunch of his and her watches at a pawn shop in Van Nuys, bought my first go kart, and that's how it all got started.
Speaker 2:That's amazing. Amazing. Can you can you take me through getting the like, your first interaction with the business side of racing, just motorsports marketing? Like, what was the inciting element that got you into the business side of racing?
Speaker 4:Well, I didn't have any family resources or certainly not the family resources needed to to go racing. My mom was is a travel agent, and so I just kinda school hard knocks of how how does this sponsorship work? How do you raise money? You just call companies and ask them for logos on race cars. And it's much more sophisticated, certainly much more sophisticated than that today.
Speaker 4:And she got me an intro to, TWA Airlines at the time and did a barter deal where they gave me some airline tickets. And then I would go to companies and say, sponsor me, and I'll give you some matching, value in airline tickets. And then just totally immersed in in in kind of bartering and understanding what was TWA trying to do with their business. And just became obsessed with my career and knowing that the only way I was gonna advance my career was through getting sponsorships. So therefore, I became obsessed with understanding how companies how I could help companies.
Speaker 4:And then once I was done with my career, recognized I wasn't as famous as a lot of the racing drivers out there. So I went back to a lot of the contacts and said, forget about Zach Brown. What if I could take you to NASCAR, Formula One, IndyCar, Jeff Gordon, McLaren, etcetera? And I had a lot of credibility as a racer that I understood how the sport worked. No one was advising corporations on how to get the most out of motorsports.
Speaker 4:It was more people representing racing teams, and that turned into a big business kind of by accident. It wasn't by design.
Speaker 2:Yeah. I I think a lot of people, when they think of like a partnership, they just think logo on the car, but it's a lot more than that. Like when did you how do you how are you positioning partnerships to actually like to move the needle for a brand like TWA or someone else that you worked with? Like what was the key success or like the key innovation that led for led to maybe more confidence to deploy not just free airline tickets but real dollars behind partnerships with motorsport?
Speaker 4:I think it was trying to get corporations to not think about our our business, I. E. Motorsports, but to think about and inform us what are you trying to do with your business. And you know, I helped bridge the gap between this is what you're trying to do with your business, you know, TWA or or, you know, now the, you know, the world's leading companies. And then I understood how motorsports work.
Speaker 4:So I kind of played middleman, you'd if like, not just in brokering the deal, but helping race teams understand what corporations needed and helping corporations understand how motorsports worked and help them leverage it. So it was really, tell me what your business needs are. What are you trying to do? Build brands, you know, get new customers, retain customers, upsell customers, demonstrate technology. And every company has some similarities, and then every company is different.
Speaker 4:And then approach the industry based on what I knew corporations wanted. Hey. I think you make sense in NASCAR. I think you make sense in Formula one. I think you make sense with this team for those reasons.
Speaker 4:And really be focused on what the corporation needs and still very much take that principle, you know, very much today is, you know, what are the Googles and the Ciscos and the Dells? And we've got an unbelievable group of partners and just trying to understand their business and how we can help them move the needle.
Speaker 2:Yeah. Can you talk a little bit about scaling the the marketing firm? Like, how small was it at the beginning? How how do you think about hiring? How do you think about actually just servicing a larger swath of the market?
Speaker 2:Did you go region by region or or league by league or category by category? Like, what was the philosophy around careful growth and scaling of that business?
Speaker 4:Yeah. We we've been fortunate where if you look at the brands on our car, they're they're like minded brands. They're global. You know, we're we're great in the technology space. You know, I'm sitting in here at McLaren Technology Center.
Speaker 4:Yeah. You know? So, you know, our brand is known as a as a premium brand, a lifestyle brand, a technology brand. We're racing around the world. So we approach companies that we feel are like minded.
Speaker 4:We approach companies that we're already doing, you know, business in. So, you know, if you take a Cisco, Cisco all throughout McLaren along before
Speaker 2:Sure.
Speaker 4:We put our partnership in place. Dell, you'll see Dell all throughout McLaren long before there was a commercial arrangement. So we're in a very fortunate position that we can do business with companies that want to do business with us and that we think we can make a difference. We don't need we're not in a position where we need to just do business for the sake of doing business. So that's a a great place to be.
Speaker 4:Mastercard being our new naming partner, which we announced last year. So we're quite proud of our partnership ecosystem. I've very much taken the same approach back when I had an agency. So we have the largest, to my knowledge, marketing department, but size isn't all that matters. It's it's quality.
Speaker 4:So I'd like to think we we have the largest staff. I'd like to think we have the best staff, and we're very much same principle of being focused on our partners' needs. We have partners of all shapes and sizes. We're much more concerned with the affiliation than the size and scale because that kind of takes care of itself over time, and we very much play the long game. And that's what our track record shows if you look at our partner base since we kinda got started in what we're calling the papaya era, our retention and growth speaks for itself, that's because we're focused on what our partners need.
Speaker 2:Yeah. How how as a leader, how do you deal with just managing the emotional roller coaster that is an F1 season or a series of seasons together? It feels like one of the most tumultuous organizations. Like, there are so many organizations where they're managing to like quarterly earnings or even just how did we do this year? And you have a very different results that come in on a very much faster basis.
Speaker 2:And I imagine that a big win or a setback can echo through the productivity of the organization even for people that aren't, you know, in the seat directly.
Speaker 4:Yeah. It's all about culture. I think that's our greatest strength is our is our people. We've been working together a long time. We've added people.
Speaker 4:We haven't changed much, you know, since we've had our success here in the last couple years. You know, I'm looking as CEO five years out. I'm I'm obsessed with our people. That's my number one job is to have the right people in the right roles, giving them the right feedback, the right resources. My philosophy is I work for the race team.
Speaker 4:They don't work for me. So I go around every day. What what do you need? How can I help? So I'm here to serve, the racing team, not the other way, around.
Speaker 4:It it is difficult at times. You know, culture's tested when things aren't going well. You know, a lot of what happens, you see at the same time as as I see it. So our report card gets marked. You know, sometimes when you have quarterly shareholder meetings, you have time to plan for the results here.
Speaker 4:You know, I go from having three or four strategists on pit wall to about 3,000,000 on social media instantaneously. Yeah. A lot of which, you know, are not very well informed because it's a very complicated sport. But Yep. You know, sport is all about emotion for the fans, and that's great.
Speaker 4:Cheering, booing, favorite drivers, you know, good guys, the villains. But back at the factory in the racing team, there's no place for emotion. We're passion led. There's a fine line between passion and emotion, and I think our job is to stay cool, calm, and collected. Usually, when we've made a mistake, it's not an individual person's failure.
Speaker 4:It's a sequence of events. So, you know, when you're emotional, you have a bad pit stop, the right rear doesn't go on well. Everyone wants the you know, your instinct, the emotional response is that right rear driver might not have stopped. Could have been a mechanical failure with the gun. Maybe a light didn't work.
Speaker 4:Maybe it was the person's fault. There's three people. One's taking the tire off. One's putting the tire on. The other's using the gun.
Speaker 4:Could be like so you gotta be very careful because, you know, it's kinda like those emails that we've all written. And over time, you know what? I should have put that in my draft folder and saved it and checked it in the morning. And I'm a big fan of when something happens, unless you need to correct it real time, say it's a bad pitch stop, it's over. So review it Monday when the, you know, the the passion, the emotion, the you know, you can't fix it at that moment.
Speaker 4:It's done. So I'm a big fan of tackle it in the moment if you can change it in the moment. But if it's, you know, something that's happened, do a proper debrief on Monday because, you know, it's hard to take you can say sorry, but if you overreact or you say something, it's hard to unwind, an allegation, an accusation that was, you know, sorry. I was just emotional. Well, you still said it.
Speaker 4:So I think that's also part of just being calm in in the heat of the moment.
Speaker 2:Yeah. You you mentioned that, you know, f one is a sport that or just a business where you have, you know, a chattering class. You have so many armchair critics. I want to know about your thought process going into the first season of Drive to Survive. It felt like a risk.
Speaker 2:You're potentially shining more of a light on your operation. You're going to get more armchair critics. And yet that choosing to actually participate in the very first season feels, in retrospect, like a fantastic decision for you and the organization. But how are you processing it at the time as you reflect on that decision and what has happened to the team and the and and and f one broadly on the back of Drive to Survive? How how do you think about that initial season?
Speaker 4:So I think our, you know, our initial thought was this was just gonna be more shoulder programming. There's been shows done before. So I don't think any of us anticipated it, having the impact on the sport that it had two teams didn't actually participate in year one, and they got all sorts of grief from from their partners, their fans. You know, I've always been I'm a huge fan of racing, and I think about that nineteen eighty one Long Beach Grand Prix, and I think about the impact it had on me. I think about the first racing driver I met, the first autograph I met.
Speaker 4:And so I thought, here's a wonderful opportunity to go from being a very exclusive sport to a very inclusive sport. So we were all in. And the impact it's had when Liberty acquired, there were three main areas the sport needed to grow. Needed a younger audience, more diverse women, and it needed a younger audience. I'm sorry I mentioned that, and a US.
Speaker 4:Mhmm. And you've gotta give drive to survive and liberty a tremendous amount of credit and to the industry for acting differently because I think under previous leadership, the sport was very closed book. It was kinda what's behind the curtain, and that works because that was intrigued. But, you know, we kinda opened the curtain and let you saw what the Wizard of Oz was all about. And I think, you know, especially
Speaker 2:I think we have some technical sport. Sorry. I think we just
Speaker 4:Can you hear me okay?
Speaker 2:Yeah. We're good.
Speaker 4:Yep. That's that that's sport and entertainment are one and the same. Anything you buy a ticket to, whether it's a movie, sporting event, fireworks show, that's called entertainment. I'm buying a ticket to go sit down to watch something. So I think the sport's always been fantastic, but it's been closed shop.
Speaker 4:And I think Netflix gave us the opportunity to show everyone. We only have 20 drivers, now 22. We only have 10 teams, so I became it became very easy for the audience to get to know everyone. And it's an unbelievable sport, probably a sport that has more excitement off the track than any other sport. Right?
Speaker 4:Most sports are concentrated on the field of play, and our field of play is as much off the track as it is on the track. So it's it's been awesome. It's continued to grow, and it's changed our sport. And it's it's great to see how big our sport now is with a younger audience, women, North America, and we just need to keep doing the the same. I don't see any headwinds in our sport other than, you know, the crazy stuff that's going on around in in the world at the moment.
Speaker 2:Yeah. Makes sense, Jordy. Can you give
Speaker 1:us a history lesson on the major technology cycles in f one? In tech, we talk about web, mobile, cloud, What are what are the equivalents in f one? And then bring us up to the present.
Speaker 4:I mean, it's everything you just mentioned. We're the most technology sophisticated sport in the world. I think it started with data. And then, you know, applying that data, you know, we have and and some some people will be impressed by this. Others will go, that's nothing because I know who the audience is, you know, watching your show.
Speaker 4:But we're pulling down, one and a half terabytes of data a weekend. We run 50,000,000 simulations. We have 300 sensors on the race car. We change about 80% of our race cars over 50,000 parts. The amount of simulation that we run, If you take the car at the beginning of the year and you let that was on pole first and it was untouched by the end of the year, it would be last.
Speaker 4:So the pace of development on our sport, we live in a prototype world. Soon as that suspension is done, we're right back to the drawing board of how do we make it lighter, how do we make it stronger, how do we make it more aerodynamic. So we are constantly developing. We don't kind of do something and go, right, we're done. Let's go produce that for the next five years.
Speaker 4:So we live in a prototype world. Of course, AI is here in a big way. We're fortunate to have Gemini as a huge partner of ours. We learn a lot. You know, our technology partners are all integrated into our business.
Speaker 4:We have two different types of partners. We have consumer brands. We go. I see your your Coke. You gotta turn it a little bit if you wanna kinda get some more
Speaker 5:of that.
Speaker 2:There you go.
Speaker 1:We're dealing with that. That's how That's
Speaker 2:how you
Speaker 5:do it.
Speaker 4:We have
Speaker 2:They're not a sponsor.
Speaker 4:Brands. And what we do with our consumer brands is we want them to help us engage with our fans, grow our fan base, build our fan base. So that's what we look for from the Monsters, the Mastercards Mhmm. The Googles. Then on the technology side, we look at the Googles, the Dells, the Ciscos, the Workdays to help us be a more efficient business, run HR better, run finance better, produce our race car quicker, do our financial forecasting better.
Speaker 4:So that's where partnerships have evolved to is in the good old days, it was, I need your money to go racing. Of course, this is an expensive sport. We need their investment. But we also need their technology because that's how our data is getting moved around. That's how our communications are are happening.
Speaker 4:That's how we're using AI to figure out strategy, entire strategy. And so all this new technology, we embrace it, and we have the type of people at McLaren and Formula one in general that want to know what technology is coming tomorrow.
Speaker 1:Mhmm. How do you guys sort of develop and maintain your own sort of IP and processes as a team? One of the things that having gone having gone to a number of races, I've always found it fascinating that I could just walk into one of the garages and I see, you know, computer monitors, I'm looking around, I can, you know, so much of it is out is out in the open and yet you guys are trying to maintain an edge and develop constantly kind of developing and refining your approach. How do those two things balance?
Speaker 4:So healthy degree of paranoia. A high amount of trust with our our team members. You know, IP is is is critical. Obviously, security in itself because you got a lot of bad actors around this world. So, you know, protecting because there's two things.
Speaker 4:There's people that just want to disrupt. You know, we had an incident twenty five years ago where someone broke into our radio comms in the Australian Grand Prix. We were running first and second, and this was just someone in the grandstand, broke into our radio comms, told our driver, Mika Hacking in the pit, and he did. Unfortunately, we were running first and second, so we were able to reverse them. But right?
Speaker 4:So you have everything from bad actors in this world who would love to you know, we can't start our race cars. It's not keys. We started on a laptop. So, you know, the redundancy and the protection, cybersecurity, security, how quickly we're moving data around the world because we're very much like NASA. Whether we're racing in Australia, Austin, or China, it's all coming back to working here, you know, not far from my office.
Speaker 4:And so protecting that with with people, from from bad actors, and then, of course, you know, we're in a very competitive sport where we're constantly analyzing the competition. Things like three d scanners were coming into play. We do a lot of photography of each other. Three d scanners have now been banned, but that's certainly trying to understand what the competition is.
Speaker 1:Just to be clear, that's a team walking around and effectively trying scan another team's Car? Vehicle or
Speaker 4:Yes.
Speaker 1:Some of their equipment.
Speaker 4:Correct. Correct. Three d scanning is now banned, but it wasn't before. Yeah. You'll see do still you think
Speaker 1:happens though? I mean,
Speaker 5:there's a lot of things
Speaker 4:to I mean, no.
Speaker 2:You would see somebody with a scanner. Right?
Speaker 4:Yeah. You would see it. I think our job in Formula One is to find the loopholes, push the boundaries, but there's a difference between working the gray areas. So I'll give you an example. You're not allowed to have movable aerodynamic devices.
Speaker 4:I mean, we do now with with DRS, but we weren't in the past. So these very clever engineers found materials that flex under load.
Speaker 2:Mhmm. Yeah.
Speaker 4:So it's not a movable aerodynamic device, but it does flex. Ah, very clever. Then the FIA or governing body went, okay. We're gonna do a push down test on your rear wing, put load on it, and you can only have so much flex. So then the teams went, ah, so there's a push down test.
Speaker 4:Now let's come up with aerodynamic where it falls back. Now there's a pull test. So the engineers are always one step ahead, and then the governing body who do a very good job go, I don't think so. And that's that's a cool part of this sport, right, where when you have technology that is constantly evolving, you're always trying to figure out what's the new technology. AI is an interesting one because we have limitations on how much CFD and wind tunnel time we can use, But we don't have regulations around AI yet.
Speaker 4:I think Jordan, we had
Speaker 1:we had George we had George Kurtz on the show last Friday. Yeah. And and he was he was saying he was saying that there there there eventually could be restrictions on like how much how much compute you can have as a team because of what I think you're getting at right now.
Speaker 4:Yeah. Exactly right. And I think that's where the sport it's never gonna stop because technology's never gonna stop. So it's about how do you get that competitive advantage so you get to, you know, what the sport called is flexi wings. Eventually, they stop that.
Speaker 4:But because we're looking for the smallest incremental gain for as long as possible, you go until they tell you to stop. And then you go find something else until they tell you to stop. So it's a constant as technology evolves. I think there will be regulations around AI that don't exist today, that will exist in one year, two years, three years, four years, and then there'll be another technology. Mhmm.
Speaker 4:And that's the beautiful thing about our sport. And technology is the ball is always moving up the field, and it's about finding that competitive advantage and trying to capture it for as long as possible.
Speaker 1:Yeah. What are the norms around poaching? There's in in Silicon Valley, there's a famous email exchange between Steve Jobs and and Larry Ellison? Or is it Adobe?
Speaker 2:No. I think it was with Google.
Speaker 1:Oh, Google. Yeah. Sorry. Sorry. Mixing it up.
Speaker 1:But anyways, basically like people having a kind of a handshake agreement not to poach. But obviously drivers are kind of open season. But what about like the rest of the people on on the team?
Speaker 4:Yeah. It's interesting. So where a lot of sports are regulated, you know, there's trade windows and we know the what was it? The I think the Dolphins had a bit of a no no. If I got the team wrong, I'm sorry.
Speaker 4:You know, what was it? Talking to a a quarterback, and they're not allowed. We don't have any of those. We have contracts. But if I wanna go talk to a driver or someone wants to talk to my drivers, we have contracts, but there's no nothing stopping them from having conversations or taking them to dinner.
Speaker 4:America tends to be a bit more of an at will state a country from an employment point of view, where here on the more senior side, you get into two, three, four year contracts. We've got gardening leave. We have noncompetes. The more senior, the the the tougher those are. But you do sign people early and play the game of because we live in a cost cap world, we are signing people early.
Speaker 4:And then the competitive team has to go, how long do I want this person around that I know is going to competitor? When do I shut them off from IP knowledge? Then if you put them on gardening leave, you got to pay them. We're living a cost cap world, so that presents a challenge of I want to spend every pay on performance of my race car, whether that is on performance of my people or technology or the race car. So now I'm in a predicament of I'm now paying to park someone so they don't go to my competitor.
Speaker 4:So I'm stopping my competitor from getting smarter faster, but I'm actually really not getting great value for money cause I'm paying someone to not work. So those are the tricks of the the trade. So, you know, the senior people are under contracts, and that's and what's happening is people are getting signed earlier and earlier. So we're not you know, we're regulated by a contracts of contract, but there aren't rules in our sport like there are in other sports of trade windows and and rules. And, you know, in other sports, they publish, you know, the player's salaries, things of that nature.
Speaker 4:So it's a fascinating game of of poker, chess, and backgammon, which again, I think is part of the draw of what fascinates people about our sport.
Speaker 1:Last question for me. If a company came to you looking for general advice at a 100,000,000 of annualized revenue and they wanted to get into sponsoring f one, obviously, you'd put together, I'm sure, a nice package for them at at McLaren. But how how would you think about breaking into f one sponsorship as a kind of a mid sized company today?
Speaker 4:Yeah. I think it's all about what are you trying to do with your business, Who are the companies involved with that particular race team? Are those companies synergistic? If they're, you know, conflicting, then obviously
Speaker 1:So you yeah. You want want you want synergy? Is it you think it's, like, helpful to have kind of a shared because I've when we were in Vegas last year for the race, was fat it was so funny because we had friends companies were basically on every team because like every company needs like a neo cloud now Yeah. Or every team needs a neo cloud, etcetera. But you're looking for like synergy across the portfolio of of sponsors.
Speaker 4:Absolutely. You know, we I call kind of Formula One. It's 24 Super Bowls from a consumer point of view, and it's 24 Davos from a business to business point of view. And so, know, our ecosystem, everyone does business together. They benefit from giving each other exposure.
Speaker 4:When Cisco runs a global television campaign, all the partners benefit from that. Dell runs their campaign. You know, the Dells, the Googles, the Ciscos, the MasterCard, they're all doing business together. And there's a lot of stuff that goes on behind the scenes business to business that people don't necessarily see. So that all comes down to, you know, the Davos side of our business.
Speaker 4:When you come to a Grand Prix, brings a tremendous amount of c level executives. And the amount of business that we've facilitated for from dinners at Grand Prix, we're very active in that. It comes back again to knowing what our partners want. We're a technology extension. We're a brand extension.
Speaker 4:We're a sales extension. We're a culture extension. And so once we understand what our partners are trying to do, we're not thinking just about going racing. That's what our racing team's thinking about. But our commercial team's thinking about, Dell has this objective.
Speaker 4:Ah, this person's there this weekend. And and so there's a tremendous amount of business to business that's going on.
Speaker 1:That's fantastic. Doing deals. Oh, yeah. I think Doing deals. Yeah.
Speaker 1:There there's I I love that that how much you've embraced your you've embraced the commercial side. I'm sure there's I'm sure there's managers that just think of it as like a necessary evil. I'm gonna do the bare minimum to like keep the keep the team running, but clearly, it pays dividends to really invest in the in the in the partnership side and I really appreciate the time. Yeah. We've been Thank
Speaker 2:you so much. Happy to
Speaker 4:see that. We we love it and thank you for giving us the opportunity to chat about.
Speaker 2:And good luck this weekend. We'll talk to you soon. Cheers. Have a good one. Cheers.
Speaker 2:Up next, we have Will Heard returning to the show, but this time he's live in person in the TBPN Ultradome. We have Will Heard. Welcome. Thank you so much for taking the time. You know, you've been on the show before.
Speaker 2:I know we have some exciting announcements today, but I was hoping we could sort of since we have thirty minutes, we have some time. I was hoping we could go back and tell a little bit more of the Will Heard story because it's one of my favorite stories but does that sound good? Can we start at the Where did you grow up?
Speaker 6:I grew up in San Antonio, Texas.
Speaker 2:Okay. How was it?
Speaker 6:Born and raised. Yeah. I loved it. I was the baby of three. Okay.
Speaker 6:My my so my father's black, my mother's white. Yeah. And so growing up as a biracial kid, that word biracial didn't exist when when when I was growing up. But love San Antonio, love San Antonio Spurs. Yeah.
Speaker 6:Love everything about it.
Speaker 2:Do you play sports in high school?
Speaker 6:I did. I played basketball.
Speaker 2:Okay.
Speaker 6:And and so and I I was on the practice squad Yeah. At Texas a and m for three days. Yeah. When I went to when I went to college, I realized I'm gonna I'm gonna play I'm gonna only play defense. Okay.
Speaker 6:And maybe get to ride the pine later down so then I got involved in student government.
Speaker 2:What okay. Student government. I want to ask you like what was your perception of the US government at that time?
Speaker 6:I I I didn't have one. Okay. I like I I wasn't you know, I wasn't reading the constitution when I was nine or things like that. I I played basketball, I loved robotics. Mhmm.
Speaker 6:I I got to intern at the Southwest Research Institute when in San Antonio, which is the largest private research institution in The United States. And I worked for this woman who graduated from Stanford and she had she was doing some cool robotics stuff. I'm like, I wanna be like her and that's why I decided to I knew I was gonna major in computer science Yeah. But I thought I was going that route. Politics wasn't anywhere on my on my radar.
Speaker 6:But my freshman year in school, somebody said, hey, you should get involved in student politics and help because you meet a lot of people that way.
Speaker 1:Yeah.
Speaker 6:And I ended up as a freshman running this guy's campaign for student body president, he won. And so that's kind of how I got involved in in in student politics a little bit.
Speaker 2:Yeah. I I I'm always so fascinated by your story hacks?
Speaker 6:What? Look look, so so so for us, he used this is this is I'm dating myself, right? He had the first guy we we built the first website every few in in student politics in in in 1995. Right?
Speaker 7:Great.
Speaker 6:And it was it was like earth shattering. Yeah. And and it you know, it's like we were still using, you know, 2,400 baud modems at the time. Yeah. And so so yeah, so that was really that was really the beginning of kind of digital marketing.
Speaker 2:Have I ever told you the story about when I ran for I didn't run for student body president, I ran for a class government. And my entire philosophy was just name recognition and like ad impressions effectively. Yeah. I just put up huge banners everywhere that said vote Kugen. I made every single person in the school a t shirt that said vote Kugen.
Speaker 2:I bought these like cheap shirts and would spray paint them on so they were really efficient to make. Right. So everyone had everyone was very aware. Yeah. They didn't know what I was running for.
Speaker 2:They didn't know what I stood for. But they knew my name and so when they went to the ballot, they're like, okay. I guess I'm voting Kugen because I've been told vote Kugen so many times.
Speaker 6:Name ID. Name ID is the most is the most important thing.
Speaker 2:It's hard to break.
Speaker 6:So you knew that. You knew that at an early age. Yeah. You know?
Speaker 2:But I I mean, the the the reason that I'm I'm I'm so fascinated by this interplay is because it feels like computer science and government have been on a collision course Right. For years and we are now at this moment where there are very serious discussions. But I want to continue into Mhmm. You know, actually studying computer science. Like what was that like?
Speaker 2:Where did you think that was going? Did you think this was was this like the the you know, the birth of big tech? Were you watching that? Like, where were you what what what was were you just interested in the technology broadly? Like, what how were you processing computer science?
Speaker 6:So I I was interested in technology broadly. Yeah. I was interested in the problem solving. Yeah. For me, what I always say was great about computer science is it teaches you a way of solving challenges
Speaker 5:Yeah.
Speaker 6:And and and and regardless of being able to vibe code now and all that that mentality is Perforceables. 100%. And so so I thought it was gonna be cool to be on the cutting edge of stuff. Yeah. And look, I I had some pretty cool offers out of school.
Speaker 6:My first offer in the CIA was in the science and technology department. Yes. Basically, queue of of the of the CIA, but I knew I wanted to do ops and recruit spies and steal secrets. And and so I I I went that way instead. But it but it really is weird this this this understanding technology enough and the implications of it and how it's adopted and some of the the consequences and how you use new technology to solve old challenges is is it's it's funny.
Speaker 6:Was sitting here thinking about go back to my life, it's like those are things that I've been focused on since I was 19.
Speaker 2:Yeah. Take me through the decision to run for congress.
Speaker 6:Look, I in addition to recruiting spies and stealing secrets, I had to brief members of congress. Yeah. You know, I I lived I was in DC for two years at what I used to call our super secret CIA training facility called the farm. Now it's on Google Maps. I did two years in India, two years Pakistan, two years doing interagency work in New York, and then a year and a half in Afghanistan where I manage all of our undercover operations.
Speaker 2:You're in Afghanistan?
Speaker 6:Yeah. Was in Afghanistan. And and so my career started with the USS coal bombing. This is, you know, this is when a lot of the public first became aware of Al Qaeda. Yeah.
Speaker 6:Al Qaeda and Bin Laden had been along for a long time. Mhmm. And then my career kind of ended in with right before Coast. Coast was the deadliest attack in CIA's history.
Speaker 2:Mhmm.
Speaker 6:A a double agent got onto our one of our bases and blew himself up and and killed many of of my colleagues at time. So so I was there in the, you know, in in the global the global war on terrorism. And in addition to recruiting and doing that job, I had to brief members of congress. And I'll be honest, I was pretty shocked by the caliber of our elected leaders. And there was this time in after Shocked
Speaker 1:to the downside.
Speaker 6:Negative. Yes. I had a negative impression. I had a negative impression. And and I
Speaker 2:I I I've had some interactions with members of Congress and I've been shocked to the upside on how good of people they are Sure. Like how much they're trying, but shocked to the downside of just you regurgitate some basic fact and they just have a surface level understanding. But then you dig a level deeper and you're like is it how like what would it actually take to have an encyclopedic knowledge of every discipline? And so there's a lot of sort of Gell Mann amnesia whenever you're talking to somebody in government. You come in, you're the expert in media or you're the expert in technology or you're the expert in oil and gas and you come in and you're like, this person doesn't know anything about oil and gas.
Speaker 2:It's like, well, have to know 1% about everything sometimes. And so is somewhat forgivable, but you clearly thought that it could be done better.
Speaker 6:And and let me be clear,
Speaker 2:like Yeah.
Speaker 6:There are there are many members of congress that are fantastic. Yeah. And I just didn't get the chance to meet them. Right? And there was an experience in Afghanistan where a bomb went off in front of our our compound, killed some of our local guards, took out a section of our our protective wall and my unit was responsible trying to figure out what happened.
Speaker 6:And and basically, we conducted a bunch of operation a short period of time and I had a briefing with members of HPSE, the House Permanent Select Committee on Intelligence. Mhmm. Basically, what happened in the meeting, someone asked what's the difference between a Sunni and a Shia. And I'm started explaining, you know, the the the divide between the two. Excuse me.
Speaker 6:I I'm he asked why the question was actually about Iran. Why was Iran not supporting the Taliban in Afghanistan where they were supporting other groups? Mhmm. And then I start explaining the Sunni Shia divide. And and and this person raises his or her hand and says, what's the difference between a Sunni and a Shia?
Speaker 6:Mhmm. And I'm thinking this person is about to make a really inappropriate joke and who am I to provide them that opportunity?
Speaker 2:Sounds like a
Speaker 6:And I said, I don't know congressman. What's the difference? And I'm getting ready to go. Didn't know that difference in And Okay. And that was really the one I think it set for me Yeah.
Speaker 6:It's like, hey, my mom always said you're part of problem, of the solution. Yeah. And decided to move back to my hometown in San Antonio and run for congress. Yeah. And I had been student body president at a and m and I only needed like 6,000 more votes in a primary to win than when I got when I was student body president.
Speaker 6:I can
Speaker 2:I can do this?
Speaker 6:I can do this.
Speaker 2:But but
Speaker 6:look to your point, right? But the the amount of information that members of congress have to deal with like a day like when I was in there Yeah. You know, my I would do probably 30
Speaker 2:Yeah.
Speaker 6:35 meetings a day. Yeah. And that started with
Speaker 1:that how does that actually work? What does your calendar look like?
Speaker 6:Look, your team is is is what matters. My my scheduler is like the single most important person. Yeah. Pre briefs, read the briefs, have the information down. Right?
Speaker 6:Like Yeah.
Speaker 1:It's it's it's like a five minute five minute meeting here, thirty minute meeting later, ten minutes.
Speaker 6:Usually about thirty. Right? Usually about twenty to thirty. And some of that may be speeches, some of that, you know, all the different kinds, different physical activities that you got to be prepared for. And and the and what one day you would start about the sheep and goat herders of America which is a true like Yeah.
Speaker 6:I had a lot of sheep and goat herders in my district to the San Antonio Chamber of Congress to a company that's putting technology along the border to some issue in cis lunar space with overhead architecture. So you had to deal with it with all of it. Yeah. Right? And and for me, what I try to do is focus on technology because that's what I had experience in.
Speaker 6:I had helped build a cyber security company before I I I was in congress and so so I that's where I tried to focus my lane on and and and and it goes back to that intersection of technology and and national security and to be able to help continue to make sure that America stays the greatest country on the planet. And so and then now in my post career to be able to be involved in companies that do that and with, you know, to work with friends on this on that intersection. Right? Because the company Icon, right? I'm the president of Icon Prime.
Speaker 6:We three d we build three d printed structures. Okay. Right? And and all those places I lived, I lived in some pretty crummy places Mhmm. And people were living in shipping containers.
Speaker 6:Like my colleagues and I were in shipping containers. We're we're working eighteen nineteen hour days putting ourselves in harm's way and we're going back to basically a cot in a shipping container. I'm sorry. That's What
Speaker 1:what what are what's the first things first thing you do if you get in a shipping container? How do you make it comfy?
Speaker 6:You get a good mattress.
Speaker 1:Good mattress?
Speaker 6:Yeah. Good mattress is
Speaker 1:try to insulate it at all?
Speaker 6:Some of these did come with with insulation so you don't have to have that and they would have a AC unit. Right? So they were they were a little kitted out before you got in. But it's still a box. Yeah.
Speaker 6:Right? And and men and women in that are putting themselves in hard way deserves deserves better. And that's one of the that's one of the things we're focusing on on on ICON Prime. Like, it starts with barracks. There's like the black mold and there's like $19,000,000,000 worth of problems from from weather events Yeah.
Speaker 6:That our our soldiers, sailor, airmen, marines, and guardians are living in. That's unacceptable. Mhmm. Secretary Hegseth has said this is an erosion Mhmm. Of our military readiness.
Speaker 6:Right? And so that's, you know, to be able to use big robots to to help, you know, repair military readiness as one as one thing at at part of what we're doing at ICON Prime is is pretty exciting.
Speaker 2:Okay. We I think we have some photos of the actual Yeah. Structures. We're going to have the team pull them up. Walk me through the the bull case for three d printing.
Speaker 2:Because I've talked to some folks in construction and they've said that well three d printing is great when you need something very unique but a lot of houses are just flat walls. We're actually pretty good at just milling flat structures laying two by fours together.
Speaker 6:Why is three d printing an important technology here? Well, off and and and you're seeing this is one of our our robots building, you know, we can build bunker. That was a bunker I think Yeah. You're seeing there. The first part was some was some barracks.
Speaker 6:Whether you want a box Yeah. Or a Fibonacci spiral
Speaker 5:Yeah.
Speaker 6:The cost is exactly the same.
Speaker 2:So flexibility.
Speaker 6:And then here's what happens. When you curve if if I took a piece of paper, you can't stand it
Speaker 2:up. Mhmm. Yeah.
Speaker 6:It'll fall down. Yeah. But if you curve it, it's a little bit sturdy.
Speaker 2:And that's why that internal
Speaker 5:structure
Speaker 6:And so that's why you can start doing some unique things with with internal structure. Yeah. And we have gotten the price down. So so the the construction has been the same since the middle ages. Yeah.
Speaker 6:And we have gotten our price down to below the national average of putting up walls. Walls are the most expensive part of construction. That's what Jason Ballard, our CEO and our founders, the unique insight was if you're gonna disrupt construction, what is the the thing that can do have the biggest impact and they discovered it was the wall system. And so now the fact that like we can make wall systems below the national average Mhmm. So why do you want just a box?
Speaker 6:Now here's the other thing. Guess what guess what happens with concrete? Termites don't eat it. Sure. You can't burn it.
Speaker 1:Sure.
Speaker 6:It can it can stand up against a flood. Yeah. Right? And so these are these are some of the challenges you don't have in in in in traditional construction. Now, the the US military has also done some unique things with our walls to test
Speaker 4:their strength.
Speaker 2:Really?
Speaker 6:And and that there's an added benefit for that when you're trying to help project force in in difficult places. So so that's the that's the that's the use case of why three d printing. Now, the construction technology construction technology companies have been around and many have failed. Sure. There was a company that was three d printing.
Speaker 6:They put out they sent out about a 110 robots, but they only built like a 100 structures. Wow. You know, at Icon, we have built over 250 individual structures.
Speaker 2:Mhmm.
Speaker 6:And and so and and the reason we're unique is that we've done the entire vertical integration.
Speaker 4:Mhmm.
Speaker 6:That's the difference. It's the design. Designing structures takes time and there's different elements of design. Then you have the then you have the the construction piece. We also deal with the regulatory effort.
Speaker 6:So the fact that we've done all of this vertical integration is what has made us successful and we have well, this is not novel technology. This isn't science projects. Mhmm. This is real technology, real robots, real AI enabled software, real material science like our the most PhDs we have is in the material science area. And so so this is what makes us unique and and now we've started the technology business, we're gonna be selling robots to people.
Speaker 6:So it's a it's an exciting it's an exciting place to be. Mhmm. Oh and and by the way, if we're gonna be an interplanetary Yeah. Exploring civilization, we're gonna have to be able to build in other places and we're pop we're gonna be building the first structure on the moon using some of the tactics techniques and procedures we've learned down here on earth in order to do that. So it's it's exciting.
Speaker 2:It's actually feels like you could probably mix cement from moon from dirt on the moon like fairly easily and use the actual materials on the moon. Fairly easily. It's easier than wood. Sure. Easier than easier than getting wood up there.
Speaker 6:Here are the three insights Yeah. On how you're gonna be able to be a interplanetary expediting Yeah. Civilization. You gotta use the resources there. Mhmm.
Speaker 6:In situ
Speaker 1:Yeah.
Speaker 6:Resource utilization.
Speaker 5:Yep.
Speaker 6:Alright. That's one. You gotta have some robots to do it. Yep. And then those have to be generalist not not specific.
Speaker 6:Yep. And the the moon has some unique challenges but but right now but right now, look, we're excited.
Speaker 2:Just a couple of just a few.
Speaker 6:Just a few. But look, we're we're we're super excited because because again, when I was in congress
Speaker 2:Yeah.
Speaker 6:Like I knew about this this barracks problem.
Speaker 4:Sure.
Speaker 6:I was on the appropriations subcommittee that dealt with this issue and the fact that now we're solving this many and and we are right now printing 10 barracks in six months in in Fort Bliss. This
Speaker 3:is
Speaker 6:the the the army came to us and said, hey, you do it in a year? We were doing the negotiation. They came out, can you do it in six months? To have the one of the largest military construction projects to be done in six months is absolutely unheard of and these are places that give our war fighter the the the dignity that they deserve. And because of this work, we got another project in in Louisiana at Fort Polk.
Speaker 6:And this is our newest one. It was $201,000,000 contract to to Congratulations. There we go. Yeah. Yeah.
Speaker 6:Yeah. There we
Speaker 2:go. I wanna talk about the aesthetics of three d printed housing and materials. We saw a Starbucks that was three d printed and it had sort of the the the signature, like, ripples of the concrete. Right. People the Starbucks community was up in arms about it.
Speaker 2:They don't think it looks good. I think that for military applications, people probably take whatever's safe and comfortable.
Speaker 1:But You just want something that's highly highly functional.
Speaker 2:But do you think
Speaker 1:that Not issue prone.
Speaker 2:Do you think that people will like, the the taste will evolve and people will start to see three d printed structures as a sign that it's more sustainable and and and it will actually just be normalized and people will be cool with that? Or will we be like plastering over this to create a flat wall?
Speaker 6:Look, I think people will will and this will, you know, evolve. Yeah. And I live in a three d printed now. Right? We we live we in in all when I'm in Austin, we have a we call it House 0.
Speaker 6:This was the first home Yeah. That we built to show that this is great living. And my wife and daughter love it. My daughter is 13 years old. That's awesome.
Speaker 6:And she she loves the Ripples and Friends Yeah. When they come over, they love now. The Starbucks, I don't know who built it. It wasn't us. Yeah.
Speaker 6:Right? So just like with anything Yeah. Quality Yeah. Is is different everywhere you go.
Speaker 2:Sure. Sure.
Speaker 6:And and so we've done a 100 home neighborhood in North Austin Yeah. With Lennar, the folks that are there love love love living there. We have a community in in South South Of Austin called Wimberley. We're looking to build in Miami as well. Mhmm.
Speaker 6:So so we we've done the whole range from helping the the the chronically homeless in Austin to high end luxury in Miami to folks in the military and barracks in El Paso, and then the astronauts on the moon. Right? Like, we we've done the whole whole bit and and again, this is the the the thing about three d printing is it at the walls are probably the thing that creates the most make something a home. Yeah. And and and when you have the waves and the unique structures, it makes it it it it it it you have a different experience.
Speaker 5:Mhmm.
Speaker 6:And I've seen it in in my personal life Yeah. And the folks that are living in the 240 homes that we've already built are are loving it as well too.
Speaker 1:Yeah. It's a great part of the great part of the sales pitch. They're like, how well, how is it to to live in? You're like, come over for a barbecue.
Speaker 6:100 look. When y'all are come to Austin, y'all I got a place We're coming. I got got I I got I I got
Speaker 2:How do you see that evolving? I have to imagine that the the commercial real estate market is massive compared to The United States military barracks market. Same with the residential market. Is is the army project or is the is the Department of War project more about proving the technology, scaling the technology, or do you see yourself as evolving into primarily a prime? Like where does the business go?
Speaker 2:This seems like a fork in the road.
Speaker 6:Sure. So I the business is really three parts. Mhmm. Right? It's you know, the the my part, the the being a government contractor.
Speaker 6:We we are. We've done already $360,000,000 of work. We have we have more coming. You know, my goal is to build 900 barracks in the next five years. Yep.
Speaker 6:And so so the immediate we're doing it because there the customer needs work. Right? And this project we're doing in Fort Bliss and the demonstration in Louisiana say, this is real. Right? Yeah.
Speaker 6:Like this is and we're moving at a scale people don't have. We also are gonna help, you know, deliver force projection in hard places. How do you build in situ in difficult places whether it's the first island chain
Speaker 2:Yeah.
Speaker 6:In in in the Indo Pacific or somewhere else. Right? So how do you how do you do that? So so delivering force projection and then we've we've talked about about space. Now, we just started the technology business Mhmm.
Speaker 6:Where we're going to be selling the robots Okay. To to others. And yes, that right now, if we had if we sold 2,500 robots Mhmm. Right? And to give us some context to that number, John Deere of their big tractors sells about 66,000 a year.
Speaker 6:Mhmm. Right? So we're talking about 2,500. That would make the Icon Builders Guild the largest home builder in America. Because they could build so many.
Speaker 2:They could
Speaker 6:build so many with with those robots. And when you look at the the market share, it rounds down to zero, the global market share. That's how much opportunity there is in in in this space. Mhmm. And so, yes, the technology business is going to grow in that opportunity but we are gonna have a core a core government because that's our responsibility Sure.
Speaker 6:We we believe. And then and our third part is we have what we call it design built. Mhmm. This is our general contractor in house. This is how we've proven all the steps you need to do.
Speaker 6:How do you have the ecosystem and the tools necessary in order to build. We've proven that with all these structures. We're to continue to prove that with the government business and that's what's gonna inform when we have the the ICON Builders Guild start printing with with our robots. That makes sense. What do you
Speaker 2:think the future of prefab is in this case?
Speaker 6:Look, I there's a there's a $2,000,000 $2,000,000, excuse me. 2,000,000 home deficit
Speaker 2:Yeah.
Speaker 6:In The United just in The United States Yeah. Every single year. So, know, there's gonna be tools for everything. Right? I I think I think there's a place for it.
Speaker 6:I believe and we believe that three d printing is is the way to go because not only of the quality Mhmm. To withstand rains and and fires and and and bugs, but it's it's the the the ability to deliver something that's beautiful as as well too.
Speaker 2:Yeah. On on the national level, was there ever any proposal around home building or solving that home deficit that perked your interest but maybe didn't get across the finish line? It feels like the lot of the housing crisis is driven by specific markets going through bull cycles or permitting or timelines. And then of course, there's the materials and all sorts of different technologies that can happen. But I haven't I I've heard the price of housing elevate to a national conversation, but I haven't heard of someone put down a plan that actually gets traction.
Speaker 6:So so affordability is probably the number one issue Sure. Across The United States Of America right now.
Speaker 2:Yeah.
Speaker 6:And and so I I agree with you. But there's this is a this is a problem that has this is a it's an issue that has multiple problems. Yeah. Now, I can make an argument that because of poor design over many years, that is what's caused all this over regulation because people weren't doing the things in order to take care of their communities. Sure.
Speaker 6:We just went through this process of getting into the UFC. Not mixed martial arts Yeah. But but the the the uniform facilities code. This is what the the government uses in order to build.
Speaker 2:Okay.
Speaker 6:It was a process and we went through it and now we're in and we're gonna be able to start doing more. And so so the difficulty of of doing this community by community is why some people wanna see that that change. Yeah. But I think it starts with do innovative things. We use robots to change the walls.
Speaker 6:Yeah. Alright. That's just the beginning Yeah. Of of this process. It's labor, it's time.
Speaker 6:Right? Like all of these things has has what impacted the the issue of housing. And for us, the key insight was how do you stop how do you do something different and change something that's been been going on since the middle ages and and do it faster and better and smarter and cheaper.
Speaker 7:It's the
Speaker 2:middle ages.
Speaker 7:And that's Right?
Speaker 2:Okay. It it You're right.
Speaker 6:If you had a house that was a 100 years old Yeah. It would probably be a little more stable than one that was built five
Speaker 5:Yeah.
Speaker 6:Years ago. Yeah. Right? Yeah. And and this is this is one industry that hasn't that hasn't been changed and that's what we're that's what we're trying to do.
Speaker 2:Cool. Well, thank you so much for taking the time.
Speaker 1:Great to get that update. Yeah.
Speaker 2:We'll to you soon.
Speaker 1:See you.
Speaker 2:Our next guest is in the waiting room already. Let me pull my headphones back on. We have Anush from AMD. He is the vice president of AI software and we'll bring him in to the TBPN Ultradome in just a minute.
Speaker 1:Here he is.
Speaker 2:Anush, how are you doing?
Speaker 1:What's going on?
Speaker 5:Good. Good. How are guys doing?
Speaker 2:Thanks for great. Happy Monday. Thank you so much for taking the time. Since it is the first time on the show, would love for you to give a little bit of introduction on yourself and how you fit into the the AMD organization.
Speaker 5:Yeah. I joined AMD about two and a half years ago. I'd you know, I came into an acquisition called Node dot ai, and we've been building ML compilers for five, six years. That's precursor to AI. And I was at Google prior to that building Chromebooks, Chrome OS, and and now I lead AMD's software strategy, software execution Mhmm.
Speaker 5:And trying to make sure AMD has a, you know, a pervasive AI software story as much as a pervasive AI hardware story.
Speaker 2:Got it. I'm sure the question that everyone is asking you is around how AI is, you know, speeding up the actual deployment of AI models onto other silicon stacks, other chipsets, AMD specifically? How is it going? What is real? How much acceleration are you feeling?
Speaker 2:Obviously, we've seen incredible performance from AMD on semi analysis inference max, which I think has been renamed but
Speaker 5:Inference X.
Speaker 2:Inference X. That's right. And so like it is clear that AMD can provide incredible inference for AI models. And I think there is an expectation that the AI models themselves will allow for more powerful models to be deployed on AMD more effectively. But what are you feeling?
Speaker 2:What are you seeing? What are your sort of timelines for more fluidity between the silicon stacks that are out there?
Speaker 5:Yeah. Very good question. So until about December, I was you know, I I I I saw it like a linear progression. Right? Like, I'd been here for two years at AMD.
Speaker 5:Mhmm. And it was like hard work, grind, grind, grind. And then suddenly it was like, oh, wow. Software is just tokens and time. So, you know you know, since January, it's just like supercharged our ability to execute.
Speaker 5:Even performance things that we were you know, traditionally took a little bit longer to kind of get for, you know, when we launched the m I three fifty five. It it it would take us a little bit to, like, get understand workloads that are not in the well lit path and go after the performance. Now all of it, like, you know, we have to be everywhere at the same time and be performant, and AI helps us do that. Right? So we have, like, automated, performance loops that just run with, you know as soon as the customer tries the model, we start an agent that's just, like, nonstop optimizing the customer's model.
Speaker 5:Right? And then that allows us to not just make the performance aspect, but also the breadth of coverage to make the out of box experience delightful and magical. And that we're seeing it in our, like, you know, customer feedback and and what what what we share on social media. I I track that very religiously just to make sure that the experience is good, and it's it's been good so far.
Speaker 2:Yeah. I I think I've seen you do the the little yachty walkout once or twice
Speaker 7:taking a bit of your lap
Speaker 2:courtesy of some some AI company and and some analysis, of course. Walk me through the key, like, levers of AI enhancing productivity on AMD. Because I feel like there is potentially a world of secret tricks to model performance that are maybe not in the pretraining data and are locked in the heads of very talented folks that work at AMD and often are deployed with a company to actually get the last 1% out of whatever production run is going on. But then there's the other side, which is this feels like a perfectly like verifiable reward. You can run this loop.
Speaker 2:You can sort of brute force it. And if you're deploying a large scale model and there's a lot of money on the line, you can potentially put a ton of compute behind it. And so even if the training data isn't 100% there, you'll get there through reinforcement learning. But what are you seeing as moving the needle? What else what's the next thing that needs to happen?
Speaker 2:Are we just purely scaling compute here and everything is like, you know, one click on AMD and everything's great. I don't even know what the benchmark is, but but the the hypothetical full performance is is real. Yes. Right?
Speaker 5:Yes. So very good question. I'll I'll just take a step back and say AMD has had this, you know, ethos of open source, right Yeah. Which really plays to our advantage. Mhmm.
Speaker 5:Every frontier model that I use has already seen every bit of AMD source code.
Speaker 2:Sure.
Speaker 5:And I can even like, it it will rewrite my spec for me
Speaker 2:Yeah.
Speaker 5:Because it already is in the pre training data. Right? So which you cannot get from closed ecosystem. Right? Because you are constrained by, like, what is out there.
Speaker 5:Like, we publish our suspects. In fact, I built a virtual GPU simulator just based off of our public specs, and and now I'm running it on the GPU. I can run, like, cross generational, you know, GPU simulations on a on on a existing audit. So so to your point on pre training data, we have that advantage, and and we'd run our dev day contest where we generated more tokens on AMD, like, Triton kernels and Hip kernels than that existed on the Internet at the time. So GPU mode had set this
Speaker 2:up. Wow.
Speaker 5:And so now that's all part of pre training data. Right? So which, again, it's a superpower because now you're open source and you're agentically, you know, accelerating this process. And then the second part is, you know, that that's already the foundation of solid. And now agent loops just you know, they're working nonstop.
Speaker 5:Right? So we know our rooflines, and so these agents just continue and and execute towards those rooflines, and so it makes us achieve that. So from from where I see it, right, I think AI is just you know, it's become like this great equalizer. I thought abstractions alone will be the great equalizer for GPU programming, like, you know, Triton and higher level Pythonic ones. But now it looks like that plus agentic AI, you know, I have agent loops that are running nonstop, you know, every night that are, you know, looking at bugs, PRs, and and they're just automatically fixing them.
Speaker 5:Of course, we have humans in the loop where needed. Mhmm. But if your harness gets really robust, it's it's good to be in autopilot. So so I'm very confident in, like, the the enablement that, you know, Edgehenticay has given AMD as a whole and how we can execute and and kind of skate to where the puck is going, not all the journey of where it went to now.
Speaker 2:Okay. Yeah. That makes sense. In the in the theme of skating where the puck is going, you know, I'm I'm I'm loosely familiar with this, you know, the the the the the paths around CUDA and and and some of the trends that we're seeing there. What is going on in the CPU world?
Speaker 2:It feels like we're incredibly CPU bound from a physical number of chips perspective. But what are you hearing from developers and engineers on what needs to happen to unlock all of the capacity and use the CPUs more efficiently. Is there a need for more software there? Is this just purely just make as many chips as we can, like the job's finished? Or what are people asking you?
Speaker 5:Yeah. That's a very good question. Software, the job is never finished. Okay. It's just you're you're going you're going higher and higher in terms of orchestrating and and enabling the last mile.
Speaker 5:Right? Like, you you always wanna try and see how much more efficient you can make a system. And like we started the thing, right, the discussion, MB, even on our laptops, right, like the Strix Halo laptop, it's got a CPU, GPU, and NPU. And now with AgentDKR, we are actually able to, like, provide a very clean heterogeneous run time and then a compiler so that now you can actually bounce between these based on the usage. So if it's tool calling and it's like, you know, it's compute it doesn't it's not GPU bound and you can use it on the CPU.
Speaker 5:We can shift to the CPU. But then the interfaces, we wanna make it seamless Yeah. So that it's elastic between where you want to run this. I have a a Strix Halo here on my desk that's running like a local voice model that does my transcription. It's a it's a it's a hacked up version of, Codex Yeah.
Speaker 5:That can actually do real time voice transcriptions. That's cool. And I I I have, I have a small keyboard that that just has next button next session, previous session, and this is push to talk.
Speaker 2:That's awesome.
Speaker 5:And and this one here is, extra high or high or, you know, the model selector. And and then you can just speak to it. And and so in that case
Speaker 2:Yeah.
Speaker 5:It's running all of the, voice on the NPU. Right? So it's able to do, like, real time voice translation, and then it does GPU and then CPU. And then where required, it runs into you know, the thinking models are Yeah. Up on the cloud.
Speaker 5:So it gets, yeah, it gets a combination of all of those.
Speaker 2:Yeah. Yeah. That makes sense. The flip side of that incredibly cool four key keyboard is it's over for you if you if your entire job is based on the traditional QWERTY keyboard. I'm sure that there's I'm curious about like AMD seems like a fantastic place to work in an AI takeoff in a crazy AI future world.
Speaker 2:What are you seeing on the people that are joining AMD right now that are set up for success? What does it take to get a job at AMD? Where are the new high leverage positions within the organization where you see, okay, this person is is is on a, you know, fantastic career track inside of AMD?
Speaker 5:Oh, it's a very very good question. So I what I do like about AMD is that, you know, it's I I think it comes from a a humble place of being through fifty five years of a journey. Right?
Speaker 6:But
Speaker 5:then deeply ambitious, and then, you know, at the right place at the right time, you know, have been executing on hardware for so long, and now the software piece is, like, you know, accelerating it. So the way I tell my teams is that it's we're a startup. We're a fifty five year old start up, and, you know, and even in the AI group, it's, like, few thousand people. I encourage everyone to work, like, you know, start up with the right thing. It's you know, I I have an all hands with everyone who has a manager because in the future, it's gonna be manager of people and agents.
Speaker 5:Right? Like, you're just gonna accelerate that, you know, capability and and your breadth of what you do is gonna increase. So I think the the workplace and the culture is like, hey. Let's go do it. Be humble, ambitious.
Speaker 5:Go go do it. And then the AI acceleration is just something that I look for for people to look at it as it doesn't replace first principles thinking, but it can do a lot of your work. Right? You know? And and so my my coding interview is, like, show me your plan, your skills, and solve this problem while you're sitting at it.
Speaker 5:Right? Like, you know, like, the first ten minutes of what you do with Cloud Code or Codex, I know exactly your thought process in terms of, like, how we're gonna approach it Yeah. And what your harness gonna look like. So I I yeah. I'm super excited about the the overall team, how we're adopting AgilityCare, but also the folks that are joining us that have deep experience Mhmm.
Speaker 5:In in the in the fields and now, you know, just supercharging us.
Speaker 1:Yeah. What is AMD's equivalent of the forward deployed engineer? Like, at any given point, how many engineers do you guys have, like, on the ground at at at different data centers or even within the offices of of labs or other companies?
Speaker 5:Yeah. That's a very good question. We didn't get very creative. We called it forward deployed engineering.
Speaker 2:My fix are really broke. Yes. So
Speaker 5:so we started that about about two years ago. And well, I I guess now we should have an FDA also, power deployed agents. So it's an FDA. But but, you know, it's multiple hundreds of people that are just the the the way the the they're focused on the customer. The way I I I phrase FDE is that, you know, SE or software developers are the forward pass and FDs are the backward pass.
Speaker 5:So the forward pass, like, executes to a PRD, and the FDs execute from a customer backwards, and that's your entire model of operation. And both of our you know, you have to be a software engineer to start, but, yeah, you just come at the same code base from, you know, whether you're forward pass or backward pass.
Speaker 1:Yeah. Makes sense.
Speaker 2:How has I wanted to ask about the the the story of George Hotts and how he sort of raised alarm bells. But it felt like you said AMD is a start up. And I did not think that AMD I didn't think of AMD as a start up three years ago. But when I saw that interaction and the back and forth there and the change that actually happened, that felt like, okay, this company is in founder mode. This company is in start up mode.
Speaker 2:How has the flywheel of feedback from the open source, the individual, the random Twitter poster actually become actionable? Because I think there's a lot of companies that will see something being said but not necessarily take action. Like how culturally has AMD changed to actually move the needle when something like that happens?
Speaker 5:Yeah. It's a very good my respects to George Hudson. Yeah. The skills that, you know, he has. Right?
Speaker 5:Like, I I wrote a a Rockin port on macOS just based off of, like, you know, TinyGrad's, you know, what he's done. Right? Wow. So now I have macOS Rockin running with an eGPU. Yeah.
Speaker 5:And and that's, you know, that that that's the power of open. Right? Like, we can see, and now, you know, the the the industry moves forward. Yeah. On the on the flywheel, I personally monitor all effects as much as I can, like all the keywords AMD Yeah.
Speaker 5:Software sucks or something like that. So if someone if someone
Speaker 1:If somebody posts, you're gonna take
Speaker 5:it personally. It's gonna ruin
Speaker 2:I I
Speaker 1:It's gonna ruin your afternoon.
Speaker 5:It's okay. It's okay. It's I I take that as one of my jobs to do. So I personally respond and to to, you know, whether it's George Harts or whether it's anyone else, I I I may not know who that is, but but usually my response is if there's a specific issue with the GitHub, I will go personally track it down and make sure it's fixed.
Speaker 2:It's
Speaker 5:perfect. If it's an opinion, it's hard to fight opinions because it's an opinion. And and sometimes opinions are, like, lagging indicators, and that's fine. We'll earn their trust and we will, you know, take step by step to get there. Mhmm.
Speaker 5:But the problems that exist, we want to, you know, like, double down and go actually fix. And, you know, we started this about a year ago where people were like, oh, you you removed support on this, card or that card or you don't support Windows well. And, so a year ago, I I took out, like, a poll and and we sorted all the systems that we needed to support. And now at least as a community supported version, all of those hardware for Windows and and Linux and and now Mac OS two is all being, like, enabled so that customers or developers can can, you know, use AMD and be delighted by it.
Speaker 2:Last question. Is AMD a car?
Speaker 5:Is AMD a car? Is this a car? Again, let me see how it well, tell me more about the car. It's
Speaker 1:a Formula One car, Don.
Speaker 2:It might be a car. It's a Formula One car. There
Speaker 5:we go.
Speaker 1:That's the that's the correct answer.
Speaker 2:That's the
Speaker 1:correct answer.
Speaker 2:See, it's a good car, sir.
Speaker 5:It it it is a good car. It is a Formula one car, and the race we run,
Speaker 7:you know,
Speaker 5:sometimes we are a little two inches behind and one inch ahead. Yeah. But we're we're ready for the race.
Speaker 2:I love It's been fantastic following the race. It's been fantastic following your progress.
Speaker 1:One thing I know for certain, you did not wake up a loser.
Speaker 2:That's for sure. That's that's 100% true. Obviously, it comes across very clearly.
Speaker 5:Thank you. It's
Speaker 1:it's obvious.
Speaker 2:Thank you so much for taking the time. The the the the news today is that annual developer day San Francisco April 30. Go check it out. And thank you so much for taking the time to come join us. Nailed it.
Speaker 1:I knew that. Okay. Thank you. To hang.
Speaker 2:We'll talk to
Speaker 1:you Goodbye.
Speaker 2:Up next, we have Augustus from Rainmaker. He's the CEO and founder. He's a Teal Fellow and he's in the TBPN Ultradome live with us in studio in Hollywood. Welcome to the show. You're looking fantastic.
Speaker 3:Thank you. Not as good as Jordy in the Rainmaker green suit. Yeah. You did that just for me.
Speaker 2:Background, everything fits. Give us the update. How are how's life? How are things going?
Speaker 3:Blessed. Blessed. Rainmaker is the first company in human history to unambiguously, repeatedly modify the weather and prove it.
Speaker 2:Okay.
Speaker 3:Yeah. This past Break year
Speaker 2:it down. When did this happen? Where?
Speaker 3:So, you know, I've known you guys for a while. It's pretty tough to be the mulleted kid running around saying that you're modify the weather for a few years without being able to prove it. The mullet looks less mullety. It's it's a little just that
Speaker 2:You've grown out the front, so now it's party in the front, party in the back.
Speaker 3:Party everywhere. I'd say either party or just dishevel Dishevel.
Speaker 2:All around. Yeah.
Speaker 3:But across our operations in Oregon, Idaho, Utah, and The Middle East Mhmm. We've been able to run these operations Mhmm. And in areas with otherwise no precipitation whatsoever Mhmm. See snow happen exclusively downwind where our measured and modeled aerosols going. Mhmm.
Speaker 3:And so for anybody that's not familiar with cloud seeding
Speaker 1:Yeah.
Speaker 3:It's this technology that's been around for eighty years. General Electric invented it in '23
Speaker 6:would actually
Speaker 1:be shocked if there's someone in tech that is not familiar with cloud seeding just because because you've been just around the circuit for the last few years. Give it to us again. Yeah. In case someone anybody's been living under a data center.
Speaker 2:We'll start with what a cloud is.
Speaker 3:Yeah. Yeah. Scientists don't actually know. That's a separate question. By the way, speaking of people not
Speaker 1:This goes deeper than I've talked to.
Speaker 3:People that might not heard of Cloudsteam before, I was talking to some big fancy show producers, and we were like, hey, do you want this story? And they're like, well, maybe if you go on TBPN first, then we would take it. And so There
Speaker 1:we go.
Speaker 3:There's some other hits this week, and it's all credited to you. But the long story short is there's lots of clouds that have small drops of liquid water in
Speaker 2:them Mhmm.
Speaker 3:Too small to naturally fall. Mhmm. If you can find those clouds, release the right material into them, those drops will freeze onto your dust and become big enough to fall. Mhmm. Problem is, if you blast a cloud and then it snows, who's to say whether you actually made it
Speaker 1:snow? Attribution.
Speaker 3:Attribution. Oh, he's reading Yeah. The investor
Speaker 2:Yeah. Yeah. Yeah. Yeah. It's just like brand marketing.
Speaker 3:Yeah. But now, the most, like, normie interpretable attribution we have Mhmm. Is downwind of where we're seating. Sometimes, can see the water in the cloud in the entire portion that we seated freeze and then fall out. And in an otherwise overcast day, this hole will open up in the sky, and you can see the blue sky and sun and snow falling downwind, and otherwise, it's totally overcast.
Speaker 3:Mhmm. So using data from our own proprietary radar, from the National Weather Service radar, even NASA satellites, we're able to show exactly how much of the precipitation is man made and then tell our customers, be they governments, hydroelectric utilities, insurers, ski resorts now, actually. Yeah.
Speaker 2:Can imagine ski resorts being early adopters.
Speaker 3:Yeah. Yeah.
Speaker 2:Although isn't it very narrow? It's such a small target. When I think about like rainfall on a cornfield, that seems like sort of spray and pray and you're good. But if you want that double black diamond to be hit perfectly, that feels like precision. Are we there yet on the technology?
Speaker 3:Really, the ski resorts want is the off pied to get snow.
Speaker 2:Right? What's
Speaker 3:that? Pied? Yeah.
Speaker 5:Yeah. Off pied. Off pied.
Speaker 2:Sorry. Off pied.
Speaker 3:Yeah. Because your snow blowers, the conventional stuff, they can get the actual, like, trails. But if you want to do the backcountry, cloud seeding is best for that.
Speaker 2:Okay.
Speaker 3:And so historically, cloud seeding has been no more precise than a few 100 square miles at a time. You're flying these planes at hundreds of miles an hour, the entire water should get water. We've gotten it down to, because of the wind sensing that we're doing, the modeling that we're doing, we're like an AI company now, sorry to say it. We're we've gotten it precise enough to land on about 8,000 acres at a time. Doing all of like our snow zone research, that's what we're calling the area that we're hitting, we can probably get it down from 8,000 to a little bit smaller, maybe a thousand acres at a time, which is easy for any mid to ultra large resort in The US.
Speaker 2:Makes sense. Where has demand been? You mentioned a few different geo locations. You mentioned a few different industries. Do you think that you will be narrowing down at some point?
Speaker 2:Like finding a beachhead, finding a product market fit and it's like Yeah.
Speaker 1:They just narrowed down already. Earth.
Speaker 3:Yeah.
Speaker 2:I know I know there's a broad there's a broad vision, but every company goes through a narrowing and a focusing point and then a broadening diversification. Do you see yourself going more narrow for a little bit and just being like the dominant main player in, you know, the Pacific Northwest in ski Mhmm. And then going other things? Or do you wanna keep running in multiple places? Is there a benefit to that?
Speaker 3:It's it's a super salient question. Right? Because if you look at, say, Reflectorbital. Yeah. The guys that are offering sunlight on demand.
Speaker 3:Yep. Infinite potential applications
Speaker 5:Mhmm.
Speaker 3:For that. Rain or snow on demand. Mhmm. A bunch of different demos could use that. Us, it's two things exclusively.
Speaker 3:It is municipal and state water agencies. Mhmm. So say like the Utah Department of Natural Resources, the California Department of Natural Resources, water for them. Mhmm. That's straightforward.
Speaker 3:We're very legible to them. They understand the value of snowpack and how that relates to their water table. So that's one. And then just ski resorts. So all these other markets, although eventually we'll play in them, I think insurance is really interesting for like crop insurance.
Speaker 3:Think that
Speaker 2:How does that work?
Speaker 3:So right now, there's insurance against crop failure due to drought. Sure. So if you have like a parametric insurance play where you can structurally reduce the risk of drought killing your crops, then you can price water down. Exactly.
Speaker 2:Makes sense.
Speaker 3:Although that'll all be interesting Mhmm. It's really going to be Alpine, Rocky Mountain, Sierra Ski Resorts, and then just the governments that I'm
Speaker 6:looking for.
Speaker 2:Makes sense.
Speaker 1:What kind of advancements have you made on the hardware side, the actual drones? Like, you guys are flying drones in probably more extreme conditions than, like, I would guess any other company or or organization on the planet. Is that is that is that accurate?
Speaker 3:There's some pretty cool defense companies that are building crazier drones than ours, but we have the only rotor wing vehicle that can fly in severe icing in in all of NATO.
Speaker 2:Rotor wing vehicle.
Speaker 3:Copter? Quad copter rather than fixed wing.
Speaker 2:Sure.
Speaker 3:Yeah. And so the advancements have been candidly, last year, our drones were basically like bottle rockets. They'd go up, the icing was really severe. We had not
Speaker 1:perfected the system required to sustain flight through severe icing. But now in as in they would go up, they would deliver a payload, and then they would just kind of fall.
Speaker 3:I was kind of making a joke about them exploding.
Speaker 1:Yeah. Yeah. Okay. So
Speaker 3:all of the the development that's been done in the last year is about reliability and precision. Yeah. These vehicles
Speaker 1:So you don't want to lose a drone every time?
Speaker 3:No. It doesn't work. Exactly. Yeah. And so we're flying three to four miles above ground level.
Speaker 3:That's being done pretty consistently up to sixty, seventy mile an hour winds in these atmospheric rivers. That's the big development there. And then also, another big thing is the aerosol sizing. So this was part of the big breakthrough that happened in January. We we realized we needed significantly smaller, so like nanometer scale, and then significantly more concentration of these particles to deliver the effect that we were intending.
Speaker 3:Before that, we were releasing like micron sized particles, but now, because we're release releasing more and smaller particles, we're able to more reliably see our effect.
Speaker 2:Wow. How has the response been to just the vanilla pushback of like dangerous chemical goes in the cloud? Mhmm. This is like the the actual silver is it still silver iodide?
Speaker 3:Silver iodide.
Speaker 2:Is silver iodide something you can't just chug in a glass of water. Right?
Speaker 3:Did you see a Dacton Yes.
Speaker 2:I want you to unpack that. That did not look very good. Like, what's going on there?
Speaker 3:Yeah. So shout out to Daxon from Soon.
Speaker 2:Great filmmaker.
Speaker 3:Yep. Spectacular.
Speaker 2:Potential investigative journalist going on. What's going on here?
Speaker 3:So so silver iodide is still what we're using.
Speaker 6:Yeah.
Speaker 3:In this upcoming winter, we're gonna have scaled operations with our alternative seeding agent. It's this bio naturally occurring protein from like American soil.
Speaker 5:Yeah.
Speaker 2:So one brand for you.
Speaker 3:Yeah. Yeah. Exactly. We think that you know how like you're trying to
Speaker 1:make It's like a naturally occurring white monster.
Speaker 3:Yeah. Exactly. So we're gonna mix the protein into whey and then I'm gonna
Speaker 2:Oh, yeah.
Speaker 3:And it's gonna play. But
Speaker 2:No. I mean, putting salt in the atmosphere doesn't it it seems like that could be if it's a natural substance. If it is something that you could drink, that would be that would kind of close the loop. But are you thinking about moving away from silver iodide entirely and moving over to this new seeding agent?
Speaker 3:So silver iodide because it's safe, because it's proven Mhmm. Because this problem's already inordinately complex Mhmm. We'll continue to use in most of our commercial ops for the next two years. The reception is generally like, there's two things happening at once. There's more awareness of cloud seeding.
Speaker 3:Mhmm. Like, the last three years, there's 400 times more searches of cloud seeding than there were before.
Speaker 1:We're all wondering. Yeah. Why? And
Speaker 3:then also on the, like, public sentiment side, as long as you can disambiguate, like, the sort of Bill Gates dimming the sun Yeah. Type stuff from cloud seeding, which is localized precipitation enhancement, people are pretty receptive. And and silver iodide, if you back out the math for people, they're willing to talk 90% of the time. 10% less tractable, but we're we're always going to be open and transparent with them. Long term though, my primary interest in alternative seeding agents, it's not just because I want to get away from, like, the PR of using silver iodide.
Speaker 3:It's that these proteins are about a thousand times more effective at nucleating ice. And the Chinese have that one primary advantage over our weather mod program. So they're doing very advanced material science for different graphene particles that much, much more effectively manipulate the weather conditions.
Speaker 2:But that seems more problematic
Speaker 3:Graphene?
Speaker 2:From a environmental perspective. Like, if it, like, if it falls on my corn, I eat it. I don't necessarily want graphene in my digestive tract.
Speaker 3:Something like that.
Speaker 2:Yeah. Sense. Yeah. But maybe in certain applications, you don't care about the chemicals in the water. I don't know.
Speaker 2:Like, I mean, if you're skiing, you're not necessarily eating the snow, so there's potential for
Speaker 1:I eat the snow.
Speaker 2:Lots of people The yellow so maybe that's not the maybe that's not the best example. But there there there must be some sort of there's probably some applications where, you know, you're not net polluting the environment potentially.
Speaker 3:Yeah. And I think there's also always the, like, dilution is the solution angle. Sure. You say, okay. If you put down 50% more water
Speaker 2:Yeah.
Speaker 3:Then it's still an inconsequential amount of Yeah. Material in the soil. That's their angle right now.
Speaker 2:Yeah. Yeah. That makes sense. Jordy, you have something else?
Speaker 1:What's the team like today? Yeah. And where are you guys like where all over the map are you?
Speaker 3:Yeah. So we were I don't know what we were last we spoke, but this time last year, we were about 30 people. Yeah. We're a little bit over a 130 now.
Speaker 7:Wow.
Speaker 2:Yeah. That's huge. Yes. How is that divided up?
Speaker 3:So there's about a third, 40 or so in Los Angeles at any given time.
Speaker 2:Okay.
Speaker 3:There's about 60 in Salt Lake. Sure. Shout out Utah. Shout out Governor Cox. Shout out LDS Church.
Speaker 2:Yeah.
Speaker 3:Love them all. But then we have a smaller operational site in Pendleton, Oregon.
Speaker 2:Yeah.
Speaker 3:An operation in The Middle East, which we still cannot Sure. Talk about the location of. And then our DC team in shortly, actually, Alaskan
Speaker 2:as well. Oh, Alaska. Yeah. Are you still going to, like, local court hearings constantly? I feel like you were on a run there.
Speaker 2:Also, there was, like, a there was, like, a potential of, like, is this gonna get completely banned in certain states or at the federal level? Like, what's the status of, like, the government pushback? I know the government's doing a lot of different stuff. But
Speaker 3:Yeah. At the state level of the 31 bans that were proposed, only two went through
Speaker 2:Mhmm.
Speaker 3:In last session.
Speaker 2:Florida?
Speaker 3:Florida and then Louisiana. Okay. Unsurprisingly, the discourse in everywhere East Of The Mississippi, where they don't need the waters badly, is more liable to chemtrail conspiracy discourse. East or West Of The Mississippi, people need the water and are willing to hear you out and disambiguate.
Speaker 2:Sure. Sure.
Speaker 3:Sure. I think that in terms of federal involvement and potentially preemption, president Trump brought up the necessity of saving the Great Salt Lake. Right? We have operations for the Bear River, which is the primary tributary into the Great Salt Lake right now. And if we were to scale up our operations about 10 times, we could radically accelerate the timeline to reversing the aridification of and refilling the lake.
Speaker 3:And so we might get to see some participation at the federal level in clad seeding because it's the only way to produce net new water for the lake. And and that's an interesting project, not because not just because the lake is a piece of national American heritage, not just because it's something that all of the ski industry is dependent on in Utah, because that lake effect snow is what gives you the champagne powder. Not It's just important because if the lake aridifies, you end up with toxic arsenic getting kicked up like in the Salton Sea. But also, it's the training wheels for what a interstate weather modification project would look like for the Colorado River.
Speaker 5:Mhmm.
Speaker 3:Right? The the Bear River, which flows through or the watershed, which flows through Utah, Wyoming, and Idaho, that is sort of the the precedent setting that we're looking for for the Colorado, which is down to about 8,100,000 acre feet through Lee's Ferry every year. That's the the place where they measure flow the river, so they figure out allocations. That's about half of where the water was measured to be or suspected to be when we made the Colorado River Compact. Rainmaker's goal to call a shot publicly is to get the Colorado River back to its 1920 supply levels by 2031.
Speaker 3:That will mean about 8,000,000 more acre feet of water down. And a lot of that will come from cloud seeding and some of it will come from other technologies that we're looking at right now.
Speaker 1:How do you structure your customer contracts?
Speaker 2:Mhmm.
Speaker 1:Like, how how does that work? Right? I'm assuming, you have these different types different types of groups that you're working with, but but what is a typical contract look like? I'm assuming it's like annual contract. You're trying to deliver a certain amount of effect in that period, but but walk us through it.
Speaker 3:So there there's two modes depending on the customer. With b to b, it is value based pricing. We've recently hired on some guys from Palantir. They've been instrumental in us figuring out how to set up those structures. It is some program stand up fee and availability on, like, operations maintenance repair fee, and then being paid based on the inches of snow that we produce, the gallons of water that flow into the system of interest.
Speaker 3:People value the water from cloud seeding very differently, and so we we structure that outcomes based pricing differently depending on the customer segment and what they actually want. Then on the b to b side, I'd prefer to do that sort of outcomes based pricing, but you wouldn't be surprised to find out that governments have a harder time paying for outcomes than they do for infrastructure services. Oh. And so that has looked like firm fixed fee for the most part. Yeah.
Speaker 3:So all of our operations priced into the initial contract stand up.
Speaker 2:Give me an update on the Gundo.
Speaker 5:Dude
Speaker 2:Feels like a bunch of companies have grown a ton, potentially outgrowing the Gundo. Are there more what's net inflow like? You know, what's going on?
Speaker 3:Well, think the first
Speaker 2:It's also just less noisy now. I feel like the meme, like, if you kind of
Speaker 1:because they all locked wins
Speaker 2:and then locked in. Right? Yeah.
Speaker 3:Yeah. There was a pretty deliberate discussion that happened in the group chat after Europies came out. We were like, radio silence. Yeah. Yeah.
Speaker 3:So I think the most important thing is that it didn't blow up in like a fiery disaster, which it totally could have. Yeah. But if you look at us, if you look at Valor, if you look at Niros, a lot of these companies are like at scale and and operating in size now.
Speaker 2:Valor And the older guard's doing well too. Radiant and Impulse and Varda, that crew, they're like the I feel like they're like the the
Speaker 1:The Unks.
Speaker 2:Yeah. They're the Unks. They're like the juniors. You guys are like the sophomores now. Yeah.
Speaker 2:And the seniors like the space Spaces. Yeah. Lockheed. Mattel. Yeah.
Speaker 2:Mattel. Arby's there, of course.
Speaker 3:Classic Gundo company. Yeah. So I think that our original like Gundobro cohort having matured, that's something that's pretty cool. But, yeah, every single one of these companies now has operations, manufacturing namely outside of Gundo. Yeah.
Speaker 3:R and D will stick in and around Gundo, Torrance, the Greater Gundo area.
Speaker 2:The Greater Gundo, including Bel Air and Malibu, like, consider these Greater Gundos.
Speaker 3:I think actually Greater Gundo extends all the way down to Costa Mesa.
Speaker 2:To include
Speaker 3:Yeah. There's a prolific Yes. Defense company in Gundo, Greater Gundo.
Speaker 2:Throw throw San Diego in. Why not? Yeah. Las Vegas? That's Greater Gundo.
Speaker 3:No. We don't claim Vegas actually. But but
Speaker 2:Right up until San Mateo. You get Nvidia maybe, but not not Facebook. Stop at the chips. Yeah.
Speaker 3:And the inflow has been pretty consistent largely through Dessipulis.
Speaker 2:Yeah. That's right. Jacob.
Speaker 3:Yeah. Jacob's crushed been
Speaker 2:it last week. Right?
Speaker 3:Yeah. Yeah. That was really cool to see.
Speaker 2:Give me a rundown. How'd it go?
Speaker 3:Well, I'm I'm personally investing
Speaker 2:Cool.
Speaker 3:In some of the companies from Desipulus.
Speaker 5:Awesome.
Speaker 3:I think there's a few worth checking out. One, just at the top of my mind is Western Chemical.
Speaker 2:Okay. Jared West. How are doing?
Speaker 3:Harvesting and cleaning the water, and then taking the hydrocarbons out of the duckweed thereafter. Interesting. Yeah. So that's one of the first processes that he's Okay. Scaling up production
Speaker 2:Yeah. Well, we what what were the other trends? I mean, it feel it feels like one interesting trait of the Gundo companies was that they were maybe more, like, pointed to specific solutions. There was already there were already, like, a big energy company generally or, like, big oil or, like, you know, big defense tech company. But then you'd get somebody like Neuros and Sorin who are, like, laser focused on this one application and still breaking through.
Speaker 2:And, like it's not it's not like you were framed as like just like, oh, like dealing with water broadly. You weren't the water company. You were like cloud seeding specifically and it was this sort of off the beat technology. And I feel like that's part of what made the Gundot experiment so interesting was that it felt like a science fair in some ways. There were a lot of people that were like bite they weren't biting off more than they could chew, but they were taking on really ambitious projects.
Speaker 2:Like, if they scaled, they'd work. But is that is that culture alive and well? Like are and are there are there like the stipulus thing, are those are those companies like coming to the Gunda? Are there new freshmen joining every year, basically? Yeah.
Speaker 3:Yeah. Sometimes I feel bad because it's the original cohort
Speaker 1:Feel bad for the hazing rituals?
Speaker 3:No. In 2023, I assure you, I'd have instituted something like that. But 2026, Augustus, not so.
Speaker 2:He's a grown man.
Speaker 3:Grown up. Yeah. Nobody even lives in the office anymore. Wow. I know.
Speaker 2:Fell off.
Speaker 3:There's no squat rack in the office. Brutal.
Speaker 1:It's brutal. Non corporate. Yeah. It's over. Big cloud seeding now.
Speaker 3:Big cloud. But what's interesting about this most recent cohort is it's largely like chemical manufacturing. Interesting. Yeah. So I think that if we pumped out more defense slop or or energy slop
Speaker 2:Yeah.
Speaker 3:Like that space is pretty
Speaker 2:Well, it's hard. Yeah. Andoril has a bet in almost every category and a lot of funding and a lot of talent. And so there's a big question about should you try and compete with Andoril or just go work at Andoril. Right?
Speaker 2:Yeah. Like, you you can you can certainly fulfill a mission if you wanna work on some particular, you know, solution in defense by just going over to Andoril. It's not some abstract company.
Speaker 1:Do you have any younger competitors as in like startups? Or are you or or is your competition somebody deciding just
Speaker 2:because a newer, hotter, cloud seeding company with a longer mullet and just evolving? I guess
Speaker 1:because I know I know you guys you guys acquired a company at one point. Right? Yeah. It was doing some some something in in the space broadly. But has anybody been crazy enough to to try to fast follow you?
Speaker 3:So we did acquire one of the legacy cloud seeding companies. It was using Plains ground generators, and we're gonna continue rolling those up just because it's simple to inject our tech, produce significantly more water, approve our yields, and then upsell accordingly. Yeah. No. I don't know of anybody that's started a company that's competing with with Rainmaker.
Speaker 3:And I I think that they'd probably get bodied instantaneously if they were to do so.
Speaker 1:Yeah. It'd be a nightmare. No. I'm sure I'm sure there will come a point where people will be like, wow, he he figured it out. And and basically, like, you once you hit a certain scale, then they'll be like, that seems like a good idea, but it'll be it'll be too late.
Speaker 1:You'll already be getting dragged in front of Congress for for monopolizing cloud seeding.
Speaker 3:Yeah. I I think that I'm supposed to be magnanimous publicly about that sort of thing. But I
Speaker 2:Do you do you have to be magnanimous publicly about energy drinks?
Speaker 3:About energy the
Speaker 2:we first recorded anything together, we did a tier list. I want you just a quick tier list of of rank all of these please. And you rank every and you rank every
Speaker 3:You got the Elani New up there.
Speaker 2:This is this is the biggest tier list Are you an Elani New guy? For for these are these are unranked. This is the beginning of a tier list where you have to sort these
Speaker 5:Mhmm.
Speaker 2:From absolute heaven, s tier. A, wonderful and amazing. B, pretty damn good. C, it's fine. D, gets the job done.
Speaker 2:F, why are you drinking this? Uh-huh. Then instant kidney failure is the lowest possible tier. And then, of course, you can put things in never tried. There are a lot in here.
Speaker 2:I didn't even realize some of these existed.
Speaker 1:Full throttle. That's pretty
Speaker 2:Full throttles in there. We got a lot. Anything standing out? Anything making it in the Augustus rotation or the or the, Rainmaker fridge more frequently than previous?
Speaker 3:I think the I think the biggest one is not actually listed here. Oh. Deep cut. There's like a I think it's called, like, Red Tiger. It's called this Jordanian
Speaker 2:energy drink. Instant kidney failure.
Speaker 6:Lists the ingredients.
Speaker 3:And so I would actually disagree with the premise and say instant kidney failure, if it gives you the optimal nootropic effect, is probably what we're optimizing for.
Speaker 2:Never we never got you to rank Diet Coke. Are you pro Diet Coke or are you a hater? How do you stand on Diet Coke?
Speaker 3:You know, I think unfortunately Diet Coke is SF coded. However, I'll offer I'll offer my all of breath to SF. Yes. Say, we did the meme. We dogged on you guys for making nonsense for long enough.
Speaker 3:We can be friends now.
Speaker 2:Yeah. Now they're they're shipping, I don't know, semiconductors and hardware. There's a lot of companies up there. Ulysses, I don't know if you're buddies with Oh, dude. Yeah.
Speaker 2:Right? Yeah. And he's building real stuff up there.
Speaker 3:Will David from Poseidon?
Speaker 2:Yeah. There's a ton of also just like I feel like
Speaker 1:Both Ulysses and Poseidon. Yeah.
Speaker 2:That's hilarious. There's also the there's also just a boom of like consumer hardware, industrial robotics.
Speaker 3:Board's pretty cool.
Speaker 2:There's a lot of stuff. And I feel like even even if it's like a consumer robot that does your laundry or something, like, that's a little bit more I don't know. Just like a more optimistic future than just more ad tech. And I think it sort of checks the box. It's close to checking the box of the Gundot criticism, which was fair.
Speaker 3:What what is the TBPN, like, public policy on on prediction markets, by the way?
Speaker 2:Public policy? Or Well, we don't we don't we don't in them. We don't trade on them. They're sometimes useful to pull up like like the Elon Sam Altman lawsuits going on right now. Think it's sitting at exactly 50.
Speaker 2:So bad example because that tells you nothing. Yeah. But but but in terms of like the midterms flipping, I find that really useful. Mhmm. But but I generally I generally hear your criticism about like we don't need more sports betting.
Speaker 2:Mhmm. So we've had Sagar and Jetty from Breaking Points on it. I think you agree with him. Yep. I think we're, like, in loose agreement with that.
Speaker 5:Okay.
Speaker 3:That
Speaker 2:that sports betting is, like, zero sum, negative sum.
Speaker 3:Did you hear about the what was it, the SF guy that not San Francisco, but Special Forces guy that bet on the Maduro extraction?
Speaker 1:Yes. That feels Bet on himself.
Speaker 2:Yeah. He's betting on himself, but obviously a violation of the job, I imagine. So not good.
Speaker 1:I mean, it's crazy because it puts it puts you and your team in insane harm's way because you have to like, Maduro and his government have access
Speaker 2:I to the data source hadn't even thought about that. That's crazy.
Speaker 1:And so you're basically telling the enemy Yeah. Indirectly like when you are going to
Speaker 2:Yeah. Because they can see a spike
Speaker 1:in the chart. Yeah. It's a signal. And so, yeah, the more the more I sat with that, I was Yeah. Like Trump Trump's reaction when somebody mentioned it to him was he was like comparing it to like betting on yourself in baseball.
Speaker 2:That's a joke. This is like That's not the real thing.
Speaker 1:Yeah. But this was like a, you know, putting I I I I think that guy should probably go to prison for like
Speaker 2:Yeah.
Speaker 1:Twenty years or so. Rough.
Speaker 2:Yeah. But not based in SF. I think both companies are in New York. True. True.
Speaker 3:Yeah.
Speaker 2:Sticking with the finance price.
Speaker 3:We haven't yet made money off of snow prediction markets.
Speaker 1:Well, right? Hairdryer. Right? So there was a Paris weather market and this guy gets caught on video pulling a hairdryer up to the to the the to the meter and Yeah. And
Speaker 2:I mean, the other thing that's that was sort of irksome was we got to a point where there were prediction markets around what people would say during their TBPN appearance. Oh. And and so so so that creates this weird thing with the chat where the chat will chime in and be like
Speaker 1:Ask him about Bitcoin.
Speaker 2:Ask him Bitcoin. And then and sometimes that's like a reasonable thing. Like maybe we do want to know is there a crypto integration to this thing or you know, they might want to ask you about, oh, ask them about like Abu Dhabi specifically or ask them about, you know, Spain specifically.
Speaker 3:Is there anybody's bag we can pump right now?
Speaker 2:Yeah. Exactly. And so it creates this weird dynamic where it sort of like degrades the quality of the questions that are getting asked in the chat, which is annoying because the chat is very useful for us to, you know, bring an extra character in. And then we had a very weird interaction where at one point we had prediction market scrolling across the bottom and a guest, actually Sam Allman, was looking at them because he could see them. And one of them was like Sam Allman declares AGI and he's like running this weird thing.
Speaker 2:I'm like, this is weird. Like, people are gambling on what if I say this word right now, this triggers this thing and it's just like distracting.
Speaker 5:Yep.
Speaker 2:And so there's been like a back and forth there. But still some cool intelligence and some cool like meta analysis for like understanding what is going on and just synthesizing a bunch of like polling data, that's still pretty interesting to me. Yeah. But
Speaker 3:Yeah. No. I I think they should be illegal.
Speaker 2:Even though even the even the political ones, like who's going to win the next presidential election?
Speaker 3:I so I well, yes. But, like, I heard one person say you could self fund a campaign. You ever read this article where it was like Yeah. Bet on yourself. Exactly.
Speaker 3:All that to say though, like, Gundos still Yeah. All the changes it's gone through, corporatization
Speaker 2:Yeah.
Speaker 3:Not like sleeping in the office anymore. Like, everybody does hate the get rich quick cash out slop stuff. Sure. And if only for the sake of some moral fortitude and like the mitigation of the degrading mental quality of everybody across the country, and also like the middle and lower classes just being utterly bodied by people that are doing de facto insider trading on these things, like
Speaker 2:Yeah.
Speaker 3:Yeah. They they should probably be illegal.
Speaker 2:Yeah. That was a saga's point about just gambling broadly, that, like, the inaccessibility of, like, Las Vegas is, like, a feature, not a bug. Exactly. And should not be worked out. And you should need to, like, explain to your friends and family, like, why you're going to Las Vegas.
Speaker 2:And then, like, maybe you're only there for a weekend. You come back, and you're, like not just like stepping away from the gambling but also probably hungover and being like I don't need to do that for a couple years as opposed to like push notification. It's available now.
Speaker 3:Yeah.
Speaker 2:Yeah. Very tricky. Very tricky. But stay safe out there. I don't know.
Speaker 1:Any any more shots you want to call for this year?
Speaker 3:For this upcoming year,
Speaker 2:I think ASI. Yes or no?
Speaker 3:ASI. Are you
Speaker 2:are you a a GI pilled?
Speaker 3:I would have said two months ago, no. Absolutely not. But some of our smartest philosophy graduates, like super super AI native young kids rebuilt some of the most sophisticated weather models in the world Yeah. With LM this year. So, yeah.
Speaker 3:I would say actually you have to AGI harden your company.
Speaker 1:And so
Speaker 3:we're doing all of this
Speaker 2:It feels like AGI pilled, not AI god pilled.
Speaker 3:Yeah. Yes. Yes.
Speaker 2:Not not not But also you you Like useful tool pilled.
Speaker 3:Yeah.
Speaker 2:Not not slop. Oh, it's a bubble. It's nothing. It's not even useful. Like, is useful.
Speaker 3:No. Super super useful. I think the weird take though is like most of the economy's faked already. So Yeah. Everybody's jobs getting automated is like ostensibly no You've
Speaker 2:those you've seen those as the GetRails. Right? It's like, hey, I was gonna take my job. What job? And it's like a guy like, you know, skateboarding or something.
Speaker 3:Yeah. Exactly. Exactly. Two examples.
Speaker 1:So,
Speaker 3:yeah. I think it'll probably like revolutionize a bunch of stuff now. I think on the water thing, I brought this up before. The water critique of data centers, yes, sure, we'll talk my own book all the time, but like they don't actually use that much more.
Speaker 2:No. I think all of Google use 50 golf courses worth or something like that. They create Yeah.
Speaker 1:50 golf courses just around
Speaker 2:Southern like 20% of computers or something like that, maybe more. Like Yeah. It's like absolutely insane. It's not a water issue. It is a power issue.
Speaker 2:Are you bullish on desalination?
Speaker 3:Yeah. Yeah. I think desal is gonna be pretty instrumental.
Speaker 2:I mean, is there a bit of you where you're looking at what Isaiah's doing and you're like mega project desal, like this feels like you could crush that. And it's, I don't know, like it's it's a different it's a different shape of company. Like what you're doing right now is maybe more innovative than just being like, there's a desalination plant that works here. I'm gonna build another one. Copy But what's really involved in that is like what Isaiah is doing which is like marshaling the capital, marshaling the political will, getting stakeholders aligned.
Speaker 2:Like it's this very soft messy thing that's All
Speaker 1:things that you're quite good at.
Speaker 2:You're good at this. And I feel like I feel like if, you know
Speaker 7:Is it
Speaker 2:some write down from your office?
Speaker 3:Yeah. Well Is
Speaker 2:it It's off. Right?
Speaker 3:The the desal plant, well, are you thinking Carlsbad down in San Diego?
Speaker 2:I thought there was one like in El Segundo. Is that not right?
Speaker 3:There's the water treatment plant.
Speaker 2:Oh, that's water Oh,
Speaker 3:the treatment? Yeah. They
Speaker 5:do a
Speaker 3:ton of recycling.
Speaker 2:Okay.
Speaker 3:No. I think a shot that I will call is by q one of next year, Rainmaker's gonna be doing some desal.
Speaker 2:Let's go.
Speaker 3:And and, yeah, a lot of that is a lot of that is, like, marshaling political will and stakeholder engagement. Yeah. It's also you you gotta take the perspective of modular manufacturing of units. Right? Like, that's what Valor's big thing is Yeah.
Speaker 2:To clear. We talked to somebody who was doing a, decel at the scale of, a cooler. So, you know, you're going camping, you can fill it up with just swamp water
Speaker 5:Mhmm.
Speaker 2:And you can get clean water, battery powered. It's a smaller unit, you know, but you can kind of scale up.
Speaker 3:Yeah. Sorry. I'm I'm laughing I I realized I haven't told any of my investors yet. So
Speaker 2:Don't worry. It's not like it's
Speaker 3:live. Yeah.
Speaker 2:But We'll review this before we post it.
Speaker 3:No. No. No. But, yes, stay tuned for stay tuned for desal. Think that desal really, the the road map is
Speaker 2:Yeah.
Speaker 3:Really good at snow time precipitation enhancement. Then come next year, we're gonna be doing operational Yeah. Summertime, like, warm cloud precipitation enhancement alongside hail suppression. That's same period when an arm of the company will start doing this desal work. Yeah.
Speaker 3:And then, thereafter, the third thing that you have to do is automated tractor tilling of biochar or hydrogels into soil. Mhmm. Because we make a ton of water right now via cloud seeding, but if you do that in say Moab in Southern Utah, your effective precipitation is about 10%. Most of it evaporates away before it percolates into aquifers or runs off into streams. If you start to till the soil with these absorptive materials that increase the amount of organic matter there, you can change the trophic potential of the soil such that it's not just sand anymore, but grasses can start to live there, biota can start to survive in the soil, and then you you retain more water year over year because of that.
Speaker 3:Mhmm. That's more of like a twenty twenty eight arm that we're going to stand up. But snowpack now, rain and hail next year, desal towards the end of that, and then automated tractor tilling thereafter.
Speaker 2:Very cool. Yeah. Thanks for coming on the show.
Speaker 1:Fantastic to get the update.
Speaker 2:Thanks for Great. Hanging out. We'll see you soon. We have our next guest, Rick Caruso joining in about thirty minutes. What you got?
Speaker 1:Look look at
Speaker 3:the American Conservation Coalition. Oh.
Speaker 1:There we go. Cool. Looking sharp.
Speaker 2:Cool. Well, we have about forty minutes until Rick Caruso joins us live in the TBPN Ultradome. We will go through some news since we really haven't been through the timeline. We got to start with these diet coke videos because I fell down a rabbit hole of diet coke Instagram reels. I'm surprised you weren't
Speaker 1:in this.
Speaker 2:Yeah. It took them a long time to figure out that I drink three Diet Cokes a day and I love Diet Coke but these these videos have brought me a lot of joy. So we can play one. There's been a new study about diet coke versus coke zero and we can pull it up in just a minute. We can also flow to something else whenever we want.
Speaker 2:The world is our oyster today in the TBPN Ultradome. Rick Caruso will be joining at 01:30 to talk LA Fire's retrospective, state of the LA real estate market, his management style, risk preferences, deal philosophy. We'll go through it all.
Speaker 1:Feng Shui.
Speaker 2:01:30. I want a feng shui deep dive for sure. We're gonna get that out of him. Anyways, let's play this video.
Speaker 3:They just came out with this new study that compared people that drink Diet Coke versus people that drink Coke Zero. And what it actually found was that people that drink Coke Zero are idiots, and then people that drink Diet Coke are actually Sigma chats that are way better than everyone else.
Speaker 2:Thank you. Thank you. We needed that. Wait. Play the restock video.
Speaker 2:There's a restock video that is it claims to be $4,000 of Diet Coke stored all over this person's massive house.
Speaker 1:I think it's about 200.
Speaker 2:Let's count it up. Let's count it up. Let's pull up the restock video. And you tell me, is this $4,000 worth of Diet Coke? Okay.
Speaker 2:That's maybe $20 of Diet Coke. This is maybe $10 of Diet Coke. Here's another 10. We're we're what? Under a 100 still of Diet Coke, I would imagine.
Speaker 1:I'm just so curious when when do they opt for the plastic bottle versus the can?
Speaker 2:It is odd. Some people have preferences. I saw again on Instagram in my Diet Coke deep dive someone who insists that the 16 ounce John. Aluminum can of Diet Coke tastes better than the 12 ounce aluminum can. That's the level of diet diet Coke
Speaker 8:official Check out the organizational inefficiency
Speaker 2:Yeah. What's going on here? In his fridge. What's going on here? She's not
Speaker 1:Just putting up Frauding. In the front. Yeah. Frauding.
Speaker 2:Frauding. Yeah. Because you could stack the Diet Coke much deeper, but once you're that far in the reel, you you call it quick.
Speaker 1:Instagram is just the Diet Coke app for you now.
Speaker 2:Yes. Well, I'm getting I'm so deep that I'm getting Diet Coke vibe reels. Let's pull this one up because this one is electric. This is like peak content. Play this play the next one.
Speaker 2:Is this it? Yeah. Is this it? No. No.
Speaker 2:This there's so many so many diet coke videos. It says it's a must be heaven. It says thank on the thumbnail. There we go. This one.
Speaker 6:Adding an accident because this must be heaven.
Speaker 2:Is like John just somebody walked in took so long to edit this together is
Speaker 1:That looks like something you could one shot.
Speaker 2:Not I mean, it's like in CapCut and you'd need to like choose the words and place them and add the features. You should be able to puppeteer that with an agent, but I don't know of any agents that are really there on the video editing front. Certainly like the next next chip to fall, the next opportunity.
Speaker 1:Anyway Rise says, a Chad might mog, but when the jester performs, even the king sits to listen. True. And this is incredibly true. We have a friend of the show that is 100% a jester. Mhmm.
Speaker 1:The closest thing we have to kings in this industry will pick up his call and listen to whatever he has to say even if he's gesture maxing.
Speaker 2:It's true.
Speaker 1:Every time. Based 16 c. Gotta be honest, bro.
Speaker 2:Think they deleted But said gotta be honest, bro. I have no idea what a semiconductor is. Do you know why they call them semiconductors?
Speaker 6:That made
Speaker 8:me laugh
Speaker 3:so hard.
Speaker 2:It's deleted. Do you do you know why they call them semiconductors? Semi
Speaker 1:I do not. So full
Speaker 2:on conductors like copper. Electricity flows through it constantly. A semiconductor is like geranium or silicon. The current is can be turned on and off so it's semi conductive and that started the computing boom There you go. Because you can effectively store ones and zeros in it.
Speaker 2:A little more complicated than that but that's like the very high level version for why they are semiconductors. That's not why they call it semi analysis. It's because Dylan just says he doesn't want to do full on analysis. He only wants to do semi analysis. I think his analysis is totally full on analysis but he decided to go with semi analysis.
Speaker 2:Anyway, imagine genuinely believing that the entire human race was going to be wiped out in the next year and then you just kind of aimlessly argue about it on Twitter. That is a weird weird phenomenon that's going on. Oh Phil is looking for a large gong in the Bay Area. If you are in possession of a gong that is over 30 inches, give him a call. He's in the market.
Speaker 1:He's looking for Is a 30 inch gong a large gong though?
Speaker 2:How big is our gong?
Speaker 3:I think it's 42.
Speaker 2:42? We're we're around there. We're around there. Anyway, do you know where we got this Gong?
Speaker 1:Gongsunlimited.com.
Speaker 2:Gongsunlimited.com, Phil. You have your answer.
Speaker 1:Okay. But here's
Speaker 2:I couldn't reply to this on x but I chose to save it to Monday. Okay.
Speaker 1:Here's the thing.
Speaker 2:Tell it to you in person. Yeah.
Speaker 1:Gong, why is why did we get the biggest Gong? Why did we? Like why is there a limit on Gong sizes?
Speaker 2:I have seen bigger Gongs online. They do exist but they get very expensive. Sort of a sort of an exponential relationship between Gong size and price, unfortunately. Which is rough out there. If you're in the Gong market.
Speaker 1:Okay. We have to talk about this study that went viral over the weekend. Yeah. It is placebo sleep affects cognitive functioning and the takeaway is that literally just having a delusional golden retriever mindset measurably changes outcomes and physiology. Sleep badly, convince yourself you're well rested.
Speaker 1:Stressful day, convince yourself it's fuel. Failed, convince yourself it's useful data. So in this study, it says, The placebo effect is any outcome that is not attributed to a specific treatment, but rather to an individual's mindset. This phenomenon can extend beyond its typical use in pharmaceutical drugs to involve aspects of everyday life, such as the effect of sleep on cognitive functioning. In two studies examining whether perceived sleep quality affects cognitive functioning, one hundred and sixty four participants reported their previous night's sleep quality.
Speaker 1:They were then randomly assigned one of two sleep quality conditions or two control conditions. Those in the above average sleep quality condition were informed that they had spent 28% of their total sleep time in REM, whereas those in the below average sleep quality condition were informed that they had only spent 16.2 of their time in REM sleep. Assigned sleep quality, but not self reported sleep quality, significantly predicted participants' scores on the paced auditory serial addition test and controlled oral word association task. Assigned sleep quality did not predict participants scores on the digit span test as expected nor did it predict scores on the symbol digit modalities test when it was unexpected. The control conditions show that the findings were not due to demand characteristics from the experimental protocol.
Speaker 1:Those findings supported the hypothesis that mindset can influence cognitive states in both positive and negative directions suggesting a means of controlling one's health and cognition. Takeaway, golden retriever mode. Golden retriever mindset.
Speaker 2:They made a movie about the golden retriever mindset years ago. I know you haven't seen it. Have you seen it? It's called Yes Man.
Speaker 8:I was thinking the Air Bud.
Speaker 2:Air Bud is a great answer to that. No. That's about a literal golden retriever. Yes Man with Jim Carrey is effectively about the golden retriever mindset. Basically, he's a bank loan officer.
Speaker 2:He's become withdrawn. He's going through a divorce. He's having an increasingly negative outlook on life. He then goes to this seminar with an inspirational guru who has him enter a covenant with the universe and say yes to everything asked of him. And so he just has to say yes to everything and hijinks ensue but he has a fantastic time and it's it's a it's a very like interesting like silver linings story.
Speaker 2:Bradley Cooper's in it. Zoe Deschanel and Jim Carrey star. Highly recommended if you're looking for a good a good uplifting movie this week.
Speaker 1:Should we talk more about Meta's space solar project?
Speaker 2:Absolutely. What's going on there?
Speaker 1:So they announced this morning two new partnerships to bring innovative energy generation and storage to our data centers. We mentioned this earlier. Space Solar partnering with Overview Energy to beam up to one gigawatt of space solar power from Earth orbit to Earth for around the clock power production. What is the company? I think they're in El Segundo.
Speaker 2:Reflex Reflex Orbit. We talked about that. Yeah. I think Sean Maguire did the deal.
Speaker 1:Yep. And so, yeah, I was not I was not familiar with with Overview Energy. And then they're also doing
Speaker 2:And also, who is it? Co founder of Robinhood. Baju is that his name?
Speaker 1:Yeah. But I thought that was more of a He has compute play.
Speaker 2:Has done more compute. But at least at at one point, a piece of the business was collect energy on solar panels in space and beam it down via laser. Right. And so that was all of these projects are, you know, incredibly difficult to to math out and require a lot of different things to go well. They're very exciting.
Speaker 2:But this company, we've clearly been working for a long time. But if it's working for them and it winds up working for Meta, you can imagine that there are gonna be lots and lots of buyers because energy, of course, is in is in short supply. The the the mirror in space is such an interesting solution to abs to what I'd heard before, which was collected on a solar panel and then beam it down on a laser. A mirror is such a simple solution to that. So we'll have to see.
Speaker 2:It feels like the step one is just getting more solar panels down on the ground. You know, you see these data center projects and a lot of natural gas turbines, not a lot of nuclear.
Speaker 1:Question is, like, if you have this this this ability to bring basically twenty four seven sun Yeah. Can you bring a lot more solar projects online because the economics just make more sense because you can power things like data centers, especially if you have batteries. The batteries that they are doing in tandem with this apparently have a hundred hours of capacity. So presumably, even if you had Cloudy. You know, few days of Yeah.
Speaker 1:Of cloudy weather, you could still keep, energy coming through the system.
Speaker 2:Yeah. Yeah. It feels tough because the data center wants to run twenty four seven, needs to run twenty four seven. The math on depreciation and the cost of the chips completely changes if you have intermittent electricity. And in some cases, if you have if you lose power, you can actually damage the data center.
Speaker 2:And so there's a whole bunch of other things that you need to to work through. Did you see this post from Benjamin Todd? This was a very interesting post. We were we we found this
Speaker 7:You you
Speaker 2:I mean, you were the first
Speaker 1:person that like, kind of brought this up.
Speaker 2:I I had looked at So so so the question is, you know, AI's impact on on on jobs on jobs and and employment broadly. And I had brought up the I I I'd looked at overall employment in India, overall employment in The Philippines, and how it was tracking this year because, of course, there's a lot of outsourcing. There's a lot of, you know, lower skilled white collar style work, call centers, BPOs, outsourced processing centers, like small, you know, atomic tasks that get done abroad. And so I expected that if there was going to be an uptick in unemployment, it would show up in potentially India and The Philippines first. Of course, we heard that somewhat hilarious quote that the that 90% of The Philippines economy is call centers.
Speaker 2:Of course, it's not. It's closer to 5% or something, maybe 6%. But everyone sort of agrees at least on the on the surface level that that it's, as Benjamin Todd put it, it's hard to think of a more AI exposed job than Filipino call centers. But oddly, in 2025, employment was up 4%. And so, of course, people will say, well, maybe it's earlier.
Speaker 2:The technology is getting better. You know you know, all all these different things. But there has been a process of automation around around call centers. I mean, was trying to get on the phone with a company just earlier. I had to go through a whole phone tree.
Speaker 2:It was even hard to find the phone number. There's a whole bunch of steps that companies take to try and reduce the amount of call center operators that are in the in the flow. And so this was not necessarily a new trend. There were some other there were some other commentary about this that I saw that that I I don't know if I can find it now. There's a quote.
Speaker 2:US call center worker employment is in decline, but that started before ChatGPT and is probably main mainly about outsourcing. So the outsourcing boom, you would think it would have started with like the dawn of the Internet. I would have expected the trend to start in 2005, you know, like Yeah. Internationalization, globalization was well underway. In fact, US call center business support services, all employees for The United States, The peak happened in 2016 and then declined sort of during COVID and then has been declining ever since probably as things move offshore.
Speaker 2:There is a world where, you know, these technologies, they take time to diffuse. And so AI might play the similar role in the sense that, like, there is some sort of onboarding cost to moving from a U. S.-based to a Filipino call center. That's taken a decade to to actually decline by, you know, not even half. It went from 900,000 people to 650,000 people over the past decade.
Speaker 2:Certainly not good if you're in that if you're in that industry in America. But interesting interesting nonetheless. Also, Poland is having a breakout year. Income in Poland is on track to overtake income in The United Kingdom. This is based on a forecast for advanced economies.
Speaker 2:UK is growing now slower than Poland. So everyone who's a fan of Poland will be excited hear Big money. The news that Poland really is going through a fast takeoff over there in Poland. They are doing some great stuff. Anyway, Poland was once a communist third world country.
Speaker 2:Now it's overtaking Britain. This is in the Telegraph. European superpowers luring a record number of UK immigrants with its restored economy and robust patriotism. Interesting. Three months ago, the British businessman Johnny Mercer ad advertised a marketing role in his construction firm Polestrade based in Poland.
Speaker 2:Not long ago, people weren't interested in moving here as he sits down with a trendy French bistro. This time, however, Mercer was inundated with Britons eager to work in Poland. 35 applicants for the job were British and happy to relocate permanently including one without any British links who got the job. People are excited. Noam Brown shared some interesting details about the different constraints on AI progress.
Speaker 2:He says Noam Brown suggesting that model weights become relatively less important as inference becomes more important which means securing weight still matters, but securing inference capacity becomes a strategic advantage. This is from a slide for a talk he gave, which is very, very interesting just from a an AI safety perspective. The the the idea of of sneaking the weights out on a hard drive that you've smuggled in your, you know, suitcase and that being equivalent to, you know, a suitcase bomb is or or a Or refined uranium. Yeah. Yeah.
Speaker 2:It's not quite the same. Maybe the the the chips are the are are the refined uranium more than the actual weights, and the weights are are are merely one piece of the puzzle. Do you have any
Speaker 5:Yeah.
Speaker 8:It's interesting because I I think like recently the past few months we've seen this big fuss over like distillation. Yeah. But like, you know, maybe there's an angle where like distillations actually gets less important because, know, even if the, you know, the Chinese can can distill our models, they can't serve them. Yeah. It's like, you know, is that even important?
Speaker 2:Yeah. And even if the models are exactly the same, if I'm able to put 10 agents securing my bank account against your one agent trying to break into it, I will have 10 times the amount of solutions. And so I should win that battle almost all the time. And you you it it does it does seem like we're shifting towards this the the incredible value of inference and capacity, which, of course, makes the whole data center slowdown ban so much more complicated because once you get into, like, the geopolitical considerations and and what what happens when large inference clusters start coming online elsewhere. And you go back to the door cache, the door the door cache, what was it, probability density curve where he he says like if AGI comes soon, America wins.
Speaker 2:If it comes over, long term, China wins. Because he's worried about China ramping up their capacity over time, but they're behind currently.
Speaker 1:Semaphore posted an article, said meet the man who's outsourcing almost everything in his life to his AI assistant. Listens to every conversation, reads every message, emails, and schedules meetings for him all while pretending to be him. Didn't ask I didn't ask it to help me. I asked it to be me. And, Taylor says, I think this will be normal in five years.
Speaker 1:She has an excerpt here. So he's made a small fortune selling multiple companies to Apple. Multiple companies to Apple. That's always that's how I love I love stories And like that where recently launched a voice recognition startup called Olive, said his personal AI has all but taken over his life. Now when he wakes up most mornings, he consults the agenda his AI assistant has crafted for him and then spends his days following its directions.
Speaker 1:The AI has permission to email people on his behalf and sometimes sets up in person meetings with people he has never met. It listens to conversations he has with his three kids and then suggests parenting advice, which he says has improved his relationship with them. It's a portrait of an emerging class of token maxers, power users who are plunging tens of thousands of dollars Mhmm. To MacGyver level AI assistance, not by waiting for the next big model release but by orchestrating today's models and loops with more computing power, more passes, and more automated checking and a massive dose of risk tolerance. The idea is to give the system an unlimited amount of tokens and access to every conceivable piece of relevant data.
Speaker 1:I didn't ask it to help me. I asked it to be me.
Speaker 2:So some of this is extremely weird. Some of this is maybe very normal. I'm trying to think of like how many of my interactions in my daily life are like mediated by techno by technology already. Like my alarm clock comes from my phone. It it decides when I wake up more than anything else.
Speaker 2:In fact, I have the the Eight Sleep will decide, like, the optimal time that I wake up within a few minutes. Right? Because it's like an adaptive alarm. And then I get in the car. I select maps.
Speaker 2:It sort of tells me what streets to go on. I'm I'm merely like the embodiment of the AI to get where I need to go. And then I have a calendar that that that tells me what I'm doing when. There there there are there are some there's some level of like intermediation, but I don't know. There's there's still incredible value in touching grass and I think that the
Speaker 1:We could see a bull market.
Speaker 2:I just I just think we're gonna be in this in this barbell world for so for potentially forever where you have Larry Ellison is is, you know, buying Oracle data centers and going super long on AGI and also CBS and Foghorn Leghorn. And you gotta own Bugs Bunny and you gotta own Superman and Batman. Right? And then on the flip side you have Josh Kushner, investor in OpenAI, a ton of different artificial intelligence companies and then on the other side SF Giants. And it's like are these diametrically opposed or are they actually are they actually both true visions of the future of the world?
Speaker 2:It seems like something that is going to continue. We should go back to Manus. Do you Times with Tyler and I'm going to take a quick break?
Speaker 5:Let's do it.
Speaker 2:Can we do a And queue up with Tyler in place of you can read through the Financial Times and sort of some of the reactions because Yeah.
Speaker 1:So regulators reviewed
Speaker 5:the
Speaker 1:deal, reviewed whether deal violated Beijing's investment rules. China has ordered Meta to unwind its $2,000,000,000 acquisition of AI app Manus as Washington and Beijing vie for dominance over the emerging technology. The decision marks an extraordinary late stage intervention by Beijing involving two non Chinese companies. Meta had already begun to integrate software from Manus, which was founded in China but relocated to Singapore last year. It was unclear how the acquisition could be unwound at such a late stage.
Speaker 1:A person briefed on Beijing's decision said the announcement could be intended primarily as a warning for similar deals in the future. The person said the gesture was pretty harsh and it carries a strong intention to stop follow on deals like Manus. In reality, it's hard to unwind a done deal. Manus has been live, I believe, in the Facebook Ads Manager. It is, you know, obviously been heavily branded as a meta Platforms company for some time now.
Speaker 1:The Meta team has been investing in in scaling it. And so, yeah, very much feels like a done it had been a done deal. I don't I don't don't think I there's been any reporting on it, but I I would assume that, you know, the full cap table had been paid out in large part already. So it's very unclear how you undo something like this. I'm not it's not super surprising given that we obviously forced the sale of of TikTok and this feels like somewhat of a response.
Speaker 8:Yeah. It it is interesting to like, you know, is this the moment when like China wakes up, right? People, you know, they're super like AGI pilled. They're like, okay, at some point China's gonna like wake up. Like this this seems like directionally towards that.
Speaker 8:But it is interesting because like, I I don't know. Like like, you you have this and then you have, you know, China approving the sale of of NVIDIA chips there. So it's like, okay, how much do they really want to, you know, disentangle from The US regarding AI? It's Interesting.
Speaker 1:Yeah. AI 2027 had China wakes up in mid twenty twenty six.
Speaker 2:Yeah. It feels like I don't know. Manus is yeah. I mean, it's a it it's not like a cash flow acquisition. Like, it's not a highly profitable thing that you're trading on earnings.
Speaker 2:It's a team
Speaker 1:And it's a it's a wrapper.
Speaker 2:And it's a technology, but the technology is somewhat commoditized. There there's been code leaks from Cloud Code.
Speaker 1:It's super talented product team with a demonstrated track record of, like, getting real paying users.
Speaker 2:Yeah.
Speaker 1:Right? And so the the question was always, you know, how much does Zak care about, you know, keeping this as a standalone product
Speaker 5:Yeah.
Speaker 1:Yeah. An AI assistant for business that
Speaker 2:But can why even buy the whole company then? Why not do one of those zombie acquisitions where you get the talent and then you get a license and then there's a ghost ship and you leave the Yeah. Ship would assume because that's gotta be harder to approve
Speaker 1:I'm or a harder assume I'm assuming that that's kind of what what happens. I I don't know. I I mean
Speaker 2:It seems like it's too late. They already bought the company. Right? Like, they already did, like, the proper acquisition, like, you know, as you said, like, paid out the cap table. I I don't know.
Speaker 2:I I I don't know the actual exact terms of the deal, but it would have been it it probably would have been easier to do something like what Grok and NVIDIA did or, the Windsurf Google thing where, like, you're bringing people over with this with this, like, contract and then, like, yes, China Blocks it, but it's, like, what are what are they even blocking? It's just people getting a new job and a licensing deal that the money flows through and then maybe they try and claw that back. I don't know. It is a it is a tricky tricky situation.
Speaker 1:Yeah. I'm not familiar with an acquisition that actually closed in Venture that was then later fully unwound.
Speaker 2:I don't know. I don't know. Delian's taken a victory lap. He said, wow. So weird that they can do this since it's not a Chinese core company.
Speaker 2:According to Gurley, there's always been back and forth about whether or not China would have any power over the Manus team. It seems like they have some some some sort of power. Chris McGuire is writing about this. He's on the council of foreign relations. Says after China's cancellation of Meta's purchase of Manus, why would any founder start an AI company in China if they had a choice?
Speaker 2:I mean, well, you can make money and cash flow in China. Like, you don't you don't necessarily need to sell to an American hyper scaler to have a wonderful life as a founder of an AI company in China. But he makes the argument. In China, you have access to less compute, less capital, and salaries are lower than in the West. And if you are so successful that a non Chinese firm tries to acquire you for billions of dollars, the Chinese government will lure you back to Beijing, ban you from leaving the country, and take your profits by canceling the acquisition.
Speaker 2:Manus did everything right. They even moved their entire business to Singapore to comply with US outbound investment restrictions. Their only mistake was that they originally founded the company in China. It's not even clear what this means for China to force Meta to unwind the transaction. Is it going to force Manus researchers to return to China and place exit bans on them too?
Speaker 2:Is it going to force Manus' founders and shareholders to pay back $2,000,000,000 to Meta? This is what happens when you regulate by fiat rather than by rule of law. Ultimately, this is a much larger defeat for the Chinese AI ecosystem than for The United States. Interesting. Meta will be fine without Manus, but Chinese nationals looking to AI to found AI companies will increasingly start them overseas.
Speaker 2:It's interesting. The message from the Chinese government here is that every AI company founded in China will forever remain subject to the Chinese government regulatory pressure and manipulation regardless of its legal status. So he goes on, but you can read that there. What's what's Bill Bishop up to these days? He says he's quoting from the Financial Times.
Speaker 2:Did we already read this? A person familiar with the matter said Beijing had told the two companies that the deal must be unwound completely, including returning funds reregistering the company's ownership and halting Meta's unit use of the Meta of the Manus algorithm. The person said that if the parties failed to fully undo the acquisition, Beijing could impose penalties on Meta, limit its limit its China related business, and possibly pursue criminal charges for individuals involved. That is a wild
Speaker 1:China does have a good amount of leverage given that's like tens of billions of of Meta ad spend Yeah. Is originates from Chinese companies. Mhmm. And so they could put pressure on Chinese companies to pull back spend, which would would hurt Meta. So, yeah, very very unclear how this will all sort itself out.
Speaker 1:But, yeah, unfortunate unfortunate for everyone involved.
Speaker 2:Yeah. What else is going on in the timeline today? I mean, Bessen says game's game over if US doesn't win AI over China in the Wall Street Journal. As I said, winning this race is a national imperative and they will throw everything at it riding the wave. Lots of people chiming in on that.
Speaker 2:Ethan Mullick says, we really need a better word for the good kind of AI psychosis, The one where someone goes into a fugue state with the latest model and returns forty days later from the mountaintop with something new. There's, yeah, AI mania instead of AI psychosis. There aren't enough examples of that. I guess Open Claw would be a good example of AI mania where he was deep in in vibe coding and vibe coded a product that wound up going mega viral, making money and satisfying a lot of people. Like you can just debate whether or not Open Claw is like a game changer or overhyped or will be copied or all that stuff.
Speaker 2:But like like people definitely enjoyed using it and people still enjoy using it and and that's probably the good the good outcome. But yeah. I don't know. There aren't aren't there are there are simply too many examples of people saying I stayed up all night. I vibe coded for you know 10,000,000 lines of code and then you ask them what they shipped and they just don't have anything really tangible to show for it.
Speaker 2:But hopefully this all changes soon. Forge frenzy. I like this. There was something else from Taylor Lorenz. She did an analysis of how much AI content is distributed across each category on Substack.
Speaker 2:So pulled in. Did she did she like vibe code this?
Speaker 1:Let's run this article through Pangram Yeah. Itself.
Speaker 2:Did somebody do that already? That is a funny joke. Extracted from the link truncated. Fully human written says Pangram Labs. So she says I use Pangram Labs, the AI detection tool to analyze thousands of posts from the top sub stack newsletters across every category to find out.
Speaker 2:Here's what I discovered. And the main screenshot is that near pure AI is overrepresented in technology, philosophy, and health content and underrepresented in fiction, music, and food and drink content, also US politics. I would have expected a lot more political slop. I am also I mean, I'm not surprised that fiction is not being slopped because, like when you try and get an LLM to write something fictional, it seems to fall down more there than code or math or research or anything else. Like when you're thinking about technology or even health, if you're just trying to summarize like, here's all the literature.
Speaker 2:I did a deep research report. Even if you're transparent with your audience and you just say, hey, like, here's my take, but then here's a deep research report on, you know, pulling together all the different resources. AI seems very, very good at that, so I would expect that representation. Fiction has been stuck for a little bit. I'm not exactly sure when we'll see a breakthrough there but there isn't really a great benchmark for it.
Speaker 2:It's somewhat like comedy. You know it when you see it. It's hard to determine. It's hard to RL against. It's oddly stickier when people thought it was the first thing to go when the computers learned to write.
Speaker 2:It's turning into like the last thing to go which is just a very odd outcome. Anyway, we have our next guest joining the TBPN ultra. Rick Caruso is here and he will join in just a few minutes. And we are ready for him whenever he is ready. Let's see what else is
Speaker 1:Porsche sold off their stake in Bugatti.
Speaker 2:Oh, yes.
Speaker 1:Rimac upon complete to a half capital. Right? Oh, yes. Hof Capital. I think it's half capital.
Speaker 1:They had invested in Rimac in 2022. They said drawn to what Mate had built from a garage in Croatia into one of the most technically ambitious companies in the automotive industry, home to record setting hypercars, a tier one supplier of batteries, trusted by leading global automakers, and since 2021, the iconic Bugatti brand. And so we are looking to get, some of the relevant parties on the show. Mhmm. I'm very excited about it.
Speaker 1:But excited to see what what the Bugatti Remak does as an independent brand. Very cool.
Speaker 2:Pull up this post from Michael Chang. It's showing sort of a glimpse of like the future of generative UI. So the prompt here, hey, chat GPT, what's the weather like today? Might have been a little bit more complicated than that. But using the new Images two point o, it is rendering sort of a video game style map.
Speaker 2:I don't even know. This feels like the type of map that you'd see at the front of like the Lord of the Rings book or like a Game of Thrones book. But it's giving you the actual information like accurately telling you for each neighborhood what the weather is like of course. You didn't need that much information because every single town is 56 degrees. Maybe 57, There's maybe 50 very slight there's very very slight differences.
Speaker 2:But it is it is an interesting world where you're getting closer and closer to this generative on the fly UI. Ben Thompson wrote a big bull case for the meta augmented reality headsets, not just Orion, but also the meta Ray Ban displays today, talking about as as AI models get better on the fly UI generation with less Chrome, which is like the top bar and the bottom bar and less less permanent UI functionality, is is what actually feels magical. Like, when you go to, you know, look at something and you get something that that perfectly sums up exactly what you're looking for on the fly. And previously, was it possible to build something like this? Absolutely.
Speaker 2:You but you would have to hang out in Blender and create the three d map and render it and then and then build some web page that would go and pull in the the data from APIs and place it on the
Speaker 1:Ryan says one Tower Golden Gate is a crime. No.
Speaker 2:There's still a There is. I found a benchmark that Imagen two fails at. If you want to take a look at an anagram and you want to show how that anagram maps to a different word and you want lines and string between the letters so there what's the quick brown fox jumps over the no, that's a I don't know. You know an anagram where you take one word and you rearrange the letters and it becomes another word? Like, drawing the lines between the two words that map up, it's bad at that.
Speaker 2:Yeah. It's still bad at that. Even on pro. So more work to be done, jobs not finished. But we have our next guest, Rick Caruso, live with us in the TBPN Ultradome.
Speaker 2:Welcome to the show, Rick. Please take a seat. And I just wanna say thank you so much. It's a pleasure. Yeah.
Speaker 2:Thanks for having me. And speak with us. How is your 2026 going so far?
Speaker 7:It's going well. Thank you for asking. Yeah. Yeah. Very good.
Speaker 7:Family's good. Yes. Business is good, so I have no complaints.
Speaker 2:What what is on the top of your mind for this year, next year? What are your biggest goals?
Speaker 7:Are you talking about from a business standpoint?
Speaker 2:I'm talking about from an everything standpoint. From an everything standpoint. Zoom out and and I want to Three know 60.
Speaker 7:Three sixty.
Speaker 2:What does what does a great next year look like for you?
Speaker 7:A great next year starts out with a lot of happiness and health with the family.
Speaker 2:That's First
Speaker 7:and foremost. That's all I care about.
Speaker 2:Always.
Speaker 7:Yeah. And we just became grandparents so that's Congratulations. Know. That's really a great thing.
Speaker 2:That's even interesting.
Speaker 7:Oh, the place goes wild.
Speaker 2:The place has to
Speaker 7:go wild. Place goes wild over
Speaker 2:Luca. Luca.
Speaker 1:Yeah. It's
Speaker 7:a good Italian name.
Speaker 2:I love it.
Speaker 7:And on the business front Yeah. We are pushing really hard
Speaker 2:Okay.
Speaker 7:And growing. We've got two projects already under construction, one in Calabasas. We're expanding the commons at Calabasas, residential tower and more retail. And we bought, I can't say where yet because we haven't completely announced it yet, but we bought a golf course and a club.
Speaker 2:Cool.
Speaker 7:And that's under construction and we're expanding our club business. And we're gonna Generally California, LA. Yeah. But I just spent a lot of time as maybe you see on my social media. I was in Nashville, we were in Austin
Speaker 2:Mhmm.
Speaker 7:We were down in Florida this last week and making a big push to be developing outside the state.
Speaker 2:Mhmm. What does pushing look like for you in the real estate context? Does it mean going broader on the fundraising side, on the prospecting side, evaluating more properties, hiring more staff to evaluate more potential projects?
Speaker 7:Good questions. So we're a little bit unique. Yeah. Everything that we do, we've done on our own balance sheet.
Speaker 2:Yeah.
Speaker 7:So we're not out raising funds.
Speaker 2:Yeah.
Speaker 7:And we've continued to grow on our own balance sheet. So when we're looking at pushing, there's really multiple levels because we're fully integrated as a company. Yeah. So we not only design and build our projects in house, and we bring in outside contractors and outside architects, but we oversee it all in house. We operate all of our properties in house.
Speaker 7:And so we are just like a dog on a bone in terms of pushing our operating profits, generating more cash flow, and at the same time elevating the guest experience, which at all costs can never be sacrificed. And then at the same time, we're putting new projects in the pipeline. And we're very disciplined about how we do that, what our returns look like. So that's that's the big push. And we want properties that are irreplaceable, that are in high barriers of entry.
Speaker 7:And we want properties in cities and states that actually respect and want our investment, and we think our investment is safe. And since it's, you know, our own capital, my own capital, we're very careful about how we invest it, but we can make decisions very quickly because we don't have a lot of committees to go through.
Speaker 2:Have you ever had doubts about that model? We don't see a lot of venture capital firms in the tech industry that that we see some very high GP commits. Yeah. We don't see very many firms that have no outside Right. LPs at I know
Speaker 1:if they're on money.
Speaker 2:Jane Street in high frequencies Yeah. Notorious for also not having LPs. Have you have you ever considered it? Or has it been the model works don't
Speaker 1:I feel like it creates a better
Speaker 2:Break it.
Speaker 1:If you like it ultimately the the client, the customer wins because if you're spending your own money on something, like the experience has to be fantastic. Yeah.
Speaker 7:I think that's right. I mean, I think that's right. There's a couple things there. So when I started the company about forty years ago, I would have never been able to raise money and do what I wanted to do.
Speaker 2:Okay. So it just wasn't an option.
Speaker 7:Well, it it if I would've if, you know, even more recently, if I would've said to you or anybody else, I'm gonna go build a hotel up in Montecito Mhmm. On the beach Mhmm. And it's gonna be a five star hotel. And, but I got one small problem here. We got a train that runs through the property.
Speaker 7:I don't know if you've been up to Miramar?
Speaker 1:I was there this Okay. I'm going go I go there all the time. You'll laugh at this. I'm in I'm in Malibu, but when my wife and I wanna get away, it's our wedding anniversary. We love going to the Rosewood.
Speaker 1:I love It's so funny because I'm like I'm literally on like living on the beach in Malibu and I'm like I need to get away for a week. Need to
Speaker 2:straight to the beach.
Speaker 7:You're in you're in rare air there.
Speaker 1:No. But the but the funny thing is my mom my mom's side of the family is from Orange County. So I I have like a a love for the surf liner, right? Okay. Yeah.
Speaker 1:That runs through that runs through Orange County too. So when I'm at the Rosewood, it feels like I'm at home.
Speaker 7:Yeah. And I and I would tell you that before the hotel was built, just describing that rightfully so, you'd say you're crazy. You can't you just can't put
Speaker 2:Yeah.
Speaker 7:A five star hotel with a train running through the property six, seven times a day. So, you know, the question is, can you take pieces of real estate and do something really special? We have a rule in the company also that every piece of real estate's got some kind of issue. So you can either isolate that issue or you could celebrate that issue. I can't isolate a train, so I better figure out how to celebrate the train Yeah.
Speaker 7:And make the train an amenity to the to the property. And I say that just I could have never fundraised around the Miramar. Right? Yeah. Now maybe now I could.
Speaker 7:Yeah. And we're actually looking at a model that would allow because we get a lot of requests to from firms to joint venture with us and whatnot. So we're starting to look at that model and I think maybe we could do that now because even if I said to somebody, okay, I'm gonna go build the Grove. I'm gonna turn my back on the street, I'm gonna create my own street, and then we're gonna have this trolley going up and down, and actually the trolley goes nowhere. Yeah.
Speaker 7:But it's gonna be really cool. They would have said, no, the trolley's gone. We're not paying for the trolley. If you didn't have the trolley at The Grove, The Grove
Speaker 1:would be the the trains.
Speaker 2:I love it. I I know. I know.
Speaker 6:Lot of
Speaker 1:guys a lot of guys are.
Speaker 2:Okay. Speaking of your childhood, speaking of starting out in a point where no one would finance these projects, did you have a mentor or did you have sort of a historical legend that you look to the way a value investor might look to a Warren Buffett or a technologist might look to Did Steve you have someone that you were identifying with or learning from in the early days?
Speaker 7:I had my dad. Yeah. My dad was my best friend and certainly a mentor. He started his own business. He was an entrepreneur.
Speaker 2:Yeah.
Speaker 7:And he was a great adviser. He was the one that literally drove to my house. We spoke every night after work. We never worked together. But after I announced that I was buying the Miramar, he literally drove to my house that night saying, you are you've lost your
Speaker 1:mind now. Know?
Speaker 7:Which I actually What was the
Speaker 1:state of the of of of Miramar when you bought it? Was it
Speaker 7:It was it There was a lot of the old buildings were still there, pretty decrepit.
Speaker 1:An op No. It not
Speaker 7:an operating property. It stopped operating for about fifteen years.
Speaker 1:I mean it apart. Was just
Speaker 7:Falling apart. We were the third buyers into it. Wow. I I bought it from Ty Warner who tried to get it developed and couldn't. Yeah.
Speaker 7:And then Ty bought it from, I'm blanking on the name that has
Speaker 2:Ty Warner of Studio fifty fame? Yeah.
Speaker 6:Wow.
Speaker 7:And who who had Studio fifty four in New York? I know. I'm dating you.
Speaker 2:I I I'm I'm familiar with Studio fifty four.
Speaker 7:Yeah. I'm not He bought it before Ty and they couldn't get it developed. So we were the third group Wow.
Speaker 2:Into it Yeah.
Speaker 7:From the original family. But but I listen, I I think curiosity is one of the most important things in business.
Speaker 2:Mhmm.
Speaker 7:And so I study a lot of people. I study a lot of companies. I've done it my whole career. I think meeting people in your industry or outside of your industry is really critically important. And I cold call people and I'll say, do you mind having a cup of coffee?
Speaker 7:I have zero agenda. I just want to understand how you think, what you do, how you became successful. And I learn a lot from that. I think it's a it's a constant learning arc that I'm involved in.
Speaker 2:So if you're if you don't need to worry about or deal with wrangling outside investors for a new project, who are the stakeholders that you're trying to build a constituency with to make sure that a project goes flawlessly or has the best possible outcome? Because there's retail shops, there's employees, there's there's the local community.
Speaker 5:Right.
Speaker 2:How do you think about them and and making sure that everyone is aligned throughout the process?
Speaker 7:Well, first and foremost, it's the guest experience.
Speaker 2:Mhmm.
Speaker 7:So we have a guest experience and then we have a customer experience.
Speaker 2:Mhmm.
Speaker 7:The guest experience is you guys coming by with your families.
Speaker 2:Sure.
Speaker 7:Shopping, staying with us, whatever. The customer experience is our customers, Nordstrom, Alo, Apple, whoever we're doing business with. Have to be really great landlords and deliver great value to them and we want to make sure we're taking care of their customers really well. And then we think about our employees. We want to have an environment where people are excited to work.
Speaker 7:We work hard. There's a lot of intensity at our office because we tend to be perfectionists and we're trying to constantly reinvent the curve on these properties. And so I want to take care of my employees. I have an incredible team of people. And then it's our my family because I want this company to be dynastic.
Speaker 7:I want it to live long after I live and hand it down to the family. So I think about all of those people. But every day that all of us wake up, we are literally thinking about the guest experience and how we continue to elevate that and make it something really special.
Speaker 2:On that guest experience, I heard a conspiracy theory Uh-oh. That I want you to address.
Speaker 7:I can't wait to hear it.
Speaker 2:I heard a conspiracy theory that the guest experience is so so important that 90% of the people that you see at The Grove are paid actors. Yeah. Everyone's you're sitting next to on the train. The person that's looking at the fountain excited. The not just not the people in the Apple Store, not the people serving you food, but the people walking around and and on certain days I might be the only real normal guest.
Speaker 2:Is there anything to that? Could be.
Speaker 7:Could be. I don't know. Could be. I'd hate to have that payroll.
Speaker 2:That does sound
Speaker 1:like a thousand extra
Speaker 7:million people coming through the Grove. That's a hell of a payroll.
Speaker 2:18,000,000 people come through. Wow.
Speaker 1:Okay. Your dad thinks you're crazy when you when you buy Miramar. At what point does he call you and say, think you might be onto something? Oh.
Speaker 7:Well, you know, Pop was Pop, the the greatest gift that he gave me was permission not to go into his company. He was in the car business. And I know he wanted me to be in the car business with him in the worst way. But I think that's one of the greatest gifts your parents can give you is to say, alright, go do what you wanna do. Mhmm.
Speaker 7:You know, that you're good at and passionate about. He never lived long enough. He died when he was in his nineties. He never lived long enough to see the completed product. But I know that Pop would be very proud of it.
Speaker 7:Know, he he didn't understand The Grove at first. Like, what are you doing? And you know, why are you doing it that way? But he was always super supportive. But I think the conversations we had every night, it was not only a father and a son, it was a father and a son who were both in business.
Speaker 7:And him challenging me was like really important.
Speaker 2:Yeah.
Speaker 7:Because I didn't grow up in the real estate business. I had no background in the real estate business. So it's not like I came out of this industry or from an industry and I knew what all the rules were. I actually believe very strongly that one of the reasons we've been successful is I didn't know the rules. And so I didn't know I was breaking a lot of rules.
Speaker 7:I didn't know I had to build a property with a roof and no sunlight and no windows and Yeah. No no landscaping and and make you feel like you're walking through a prison. That is the default. That right. If I would've grown up in the mall industry, that's what I would've built.
Speaker 7:Yep. Totally. So but it was great having him challenge me with many, many people challenging me along the way, including communities that we serve. That goes to the other priority of people we're thinking about. We're very, very protective and supportive of the communities we're in, whether it's Montecito or LA or Calabasas.
Speaker 7:And it's they're good for
Speaker 1:Have any data center developers called you and said, how do you do it? Like, what's your what's your playbook? Because Question. In the you know, data centers are ugly. They don't employ a lot of people.
Speaker 1:Yeah. They're probably a harder sell than a lot of the developments that that you've done. But you certainly have faced a lot of opposition over time but got people around and got them aligned and and ultimately created spaces that I think make make the whatever area they're in better.
Speaker 7:Thank you. Well, a a data center doesn't need to worry about any of that. I mean, they need to get their permits, and I know there's a lot of push against data centers now.
Speaker 1:Yeah.
Speaker 7:But they don't have a guest experience to worry about other than they're doing what they're intended to do. So no, they've never reached
Speaker 1:out somebody that they should. Don't you
Speaker 2:Maybe they should because if they were less eyesores, they might be they might face less pushback.
Speaker 7:They could. Yeah. That's true. There's nothing listen. Yeah.
Speaker 7:I'm a big believer. It's always good to make things really, really nice
Speaker 2:Yeah.
Speaker 7:And attractive. Yeah. We spend a lot of time and a lot of money making things nice and attractive and it it always has worked to our benefit.
Speaker 2:Is feng shui a valuable
Speaker 7:100%. Everything is feng shui ed.
Speaker 2:Explain that. How did you how did you get into feng shui?
Speaker 7:We got into it because I started studying it a little bit and in fact, when you take a look at The Grove, our advisor in Feng Shui, Catherine, does every one of our properties. She reviews all of our plans before a property is built. She is on the property before we open blessing it and all the things that need to be done. And it's respectful of a culture that we care about as a guest. Sure.
Speaker 7:But it also makes a lot of sense from a development standpoint. So the way the railroad at The Grove goes and how it moves and turns was very important not to intersect or get too close to the fountain because that's bad feng shui. It would be cutting off a lifeline. Yep. The number that's on the trolley it was Feng Shui.
Speaker 7:Now, it ends up being which most people don't know.
Speaker 2:I didn't know.
Speaker 7:It ends up being my birthday. There's all these things in all of our properties. So the number for the trolley is 1759JanuarySeventh59, which I wanted to use, but we had to make sure it was properly Yeah. Feng Shui. Interesting.
Speaker 7:Yeah. Did did you have any
Speaker 1:projects early on that didn't work that you now attribute to to to poor Feng Shui?
Speaker 2:I don't think he can talk about it, but I know that he passed
Speaker 1:on something. But but yeah. Because I because I think everyone whether or not they've even read about Feng Shui, believe in it, all these things, everyone has been in a space and being like, there's nothing objectively wrong with this apartment or store or hotel, but it just it's just bad.
Speaker 7:Doesn't feel
Speaker 1:right. Doesn't feel right. And I I've had, you know, how you know, a home where I never use like one or two rooms and for some reason
Speaker 2:You gotta function your current office. Your back is to the door. That's a crime. Yeah.
Speaker 7:That's not good. Oh, that's true. No. Seriously. You can there's countermeasures.
Speaker 7:Yeah. You can use countermeasures.
Speaker 5:Yeah. Yeah.
Speaker 2:It's interesting. Yeah.
Speaker 7:I think that Feng Shui is important along with a million other things that are important.
Speaker 6:Yeah.
Speaker 7:When we are so focused on making that guest feel comfortable in the space. And that's why we go around the country and we go around the world actually studying spaces. We're we'll look at retail centers, we'll look at malls, we'll look at ones that work and we'll look at ones that don't work. But mostly what we're doing is we're studying streets. And so when you go to The Grove or you go to the Americana or whatever, the height of that curb, the slope in that street, how the railroad is sitting there, the fact that there's gutters and there's drains and there's all these things, they're there because your eye picks it up.
Speaker 7:Mhmm. If we would have built The Grove as a flat plaza without curbs and gutters, you wouldn't read it in your mind as a street. So the rhythm of the trees, the rhythm of the street lights, we study all of that stuff. Interesting. And we actually had a landscape architect on The Grove that threatened to quit because he wasn't gonna design curbs and gutters.
Speaker 7:He said people are gonna trip. I said people don't trip walking around the cities. Yeah. Why are they gonna trip here? And then he finally came around, but we studied The Grove is patterned very much in scale down in Charleston.
Speaker 7:We studied Charleston in terms of building depths and and whatnot. But all of that's really important.
Speaker 1:How how did you experience the .com era? Were there people telling you that retail was gonna Sure. Be over, it was all just you may as well shut down now, the Internet Right. Is gonna be everything because we have a lot of people in our you know, in the technology industry that are building building products that are either, you know, that benefit from AI or are threatened by AI or or totally unknown yet. So a lot of people are going through an existential crisis.
Speaker 1:How did you Did you ever did you ever doubt? Did you ever believe in in the more out there internet pitches that you were getting or were you always confident?
Speaker 7:I was always confident. I tell you what.
Speaker 6:And may may maybe it's
Speaker 7:because I'm naive. I'm were right. It was I'm not gonna be arrogant about
Speaker 2:it either. No. No.
Speaker 7:But here here's why. If if you looked at it through my lens. Yeah. Why did I go in the retail business? I was never in the development business, so why did I go in the retail business?
Speaker 7:Well, went in the retail business because I loved people and I loved real estate. So where am I where am I gonna do something where I could marry people in real estate? And I started in the warehouse business.
Speaker 5:Mhmm.
Speaker 7:And that was just hugely boring to me because I could care less at the end of the day about dock high loading and clear spans. And there were no people there.
Speaker 6:Mhmm. It was just
Speaker 7:a bunch of trucks. Interesting. So I got into retail because as a young kid visiting family in Italy, I was always taken by the piazzas. And at the end of the afternoon, the sun's going down a little bit, the people are coming out, the kids are running around, somebody's having a glass of wine, there's a little music in the back. Very very my family came from a very poor, very modest town.
Speaker 7:Didn't matter. There was this joy of life. I wanted to duplicate that. That that to me is my psychic income.
Speaker 1:Is this You're like the internet's not gonna do this thing that
Speaker 7:It can't copy it.
Speaker 2:Yeah.
Speaker 7:Yeah. And from the beginning of time, what have we done as human beings? We've gathered. Mhmm. We went around a fire.
Speaker 7:Right? We protected each other.
Speaker 2:Yeah.
Speaker 7:Right? We're just human beings in that way. So the last thing I would say is there's always been multiple ways to buy a product. There was the Sears catalog long before there was the Internet. Mhmm.
Speaker 7:Right? Yeah. And so nobody buys just with one channel. And the best retailers, I want them to have a really robust online operation.
Speaker 2:Yeah. Because
Speaker 7:that means they're a better retailer. So it it doesn't scare me at all. And our business has grown. Our CAGR is 18%. So I I'm not I'm not too worried about I'm like, what
Speaker 1:was that noise? That's a hair horn
Speaker 2:for you.
Speaker 7:Was that a good thing? Good That's a a thing. Fantastic.
Speaker 1:You What what's been your thought process? You've you've you've such an incredible presence in California, such an incredible track record. You've made so many of our communities like better spaces. I I I feel I I didn't live in The Palisades, but I would go to The Palisades, you know, your your your property there at least once or probably twice a week on average.
Speaker 6:Thank you.
Speaker 1:Just passing through. And when after the fires, it felt like like some part of our community was just gone. Yeah. And what what has been your I imagine people from all over The US have tried to entice you to bring this kind of scale to their states.
Speaker 7:Mhmm.
Speaker 1:What has been when have you when have you indulged in those conversations? You you mentioned earlier in the conversation exploring more opportunities outside of the state. What has been the the thought process? Was there early like a loyalty to California? It was seems like it was your
Speaker 7:I'm a big believer. It's a great question. I'm a big believer that if you wanna create generational wealth in real estate, it gets done because you know the area incredibly well and you're local. And when you take a look, and I'll give you an example. If you look at the Palisades, so many people said The Palisades is never gonna work.
Speaker 7:There's not enough people there. People would even say they don't go out at night. It's a bedroom community. Just not the case. The the the there was nothing to go out to.
Speaker 7:Right? And the case study for the Palisades, because I live in Brentwood Park and if you live on that side of a 405, you cannot literally travel east after about 03:00. It is bumper to bumper to get over the 405. So you have this enormous population that's balkanized Mhmm. That can travel west easily Yeah.
Speaker 7:To dinner and the movies and shopping, including the other side of the 405, Bel Air, Holmby Hills that can travel. So to me, it was understanding that dynamic of how the mobility of people.
Speaker 2:It's almost like the feng shui of the city.
Speaker 7:Well, feng shui, but also just the actuality Woah. Of the mobility of how people moved. Yeah. So I've I've always wanted to stay local because that local knowledge is critically important. And if you look at the most successful businesses in real estate in any category, it's usually local families.
Speaker 2:And you get that from a feel, not from data, I assume?
Speaker 7:You get it from a feel. You get it from learned Conversations.
Speaker 2:Living it. You're stuck in traffic, you know. Yeah. You don't need to
Speaker 7:I drove my kids to school every morning. Yeah. And I know at 08:00 in the morning Yeah. You can barely go. Yep.
Speaker 7:And if you wanna go pick them up at three Yep. You need an hour to get to the 04:05.
Speaker 2:Yep.
Speaker 7:So that that I think is super important. What we would do is if we go outside the state, and we're gonna go outside the state for a number of reasons. We would just make sure that we have a lot of really local talent
Speaker 1:Sure.
Speaker 7:Yeah. Surrounding us to to backfill Yeah. That that kind of knowledge that we're gonna need.
Speaker 1:Why are you going out of the state then? What are the reasons?
Speaker 7:Well, California and Los Angeles are very difficult to invest in anymore, especially LA City. We have not built anything new in LA City since the Palisades very intentionally because it's too over regulated, too expensive, too unpredictable. And and frankly, you know, we spend an enormous amount of money on our properties on security because the city, you know, has struggled with having enough police. And we're very adamant on having a very safe, secure environment on our properties. So I want to move our capital.
Speaker 7:I hate leaving LA, but I want our capital to go into places that I know are going to grow and be safe. Now, I don't have to leave California to do that. That's why we're investing in Calabasas.
Speaker 4:Sure.
Speaker 7:It's a great community.
Speaker 2:Yeah.
Speaker 7:We'd love to do more in Glendale. Incredibly good community, safe schools, clean streets, safe streets. Those are the kind of things we're looking for. But there's also great growth happening in like Nashville. I was many
Speaker 1:how many year how many years do you feel like you kind of raised your hand with the the local government and said, hey, these things aren't aren't working. We need to make changes because like, because this wasn't something that overnight you were like, oh, this this Right. City doesn't feel safe anymore. I'm gonna move out of state or I'm gonna move out of I'm gonna move up to a different county.
Speaker 7:You know, listen, a lot of years. And I worked for three mayors. I had the benefit of working for Tom Bradley when I was in my twenties as a commissioner. I worked for Dick Reardon as a commissioner. I worked for Jim Hahn as the head of the police commission.
Speaker 7:So I understand the city. So I worked for the city for seventeen years while I was growing my business. So I understand it well. I understand what was working and I understand what's failing. And so much of what we're doing now is just failing because we have leaders that frankly aren't qualified and they're incompetent.
Speaker 7:And they're not bad people, they just don't know what they're doing. And if you look at other cities, it blows my mind on how well they're doing. There's no reason that LA shouldn't be doing well. It's only not doing well because our leadership isn't making smart aren't making smart decisions. And we're paying the price for it.
Speaker 2:Drew, any follow-up there? You gonna run for No. It says here we're here to announce your comment.
Speaker 7:Yeah. Right. How about that for breaking?
Speaker 1:One other one other
Speaker 7:But I don't want to be you know, let me add before I interrupt you. I'm a very optimistic person and I love this city. Yeah. And I believe in the city. We're not moving out of the city, we're not doing anything like that.
Speaker 7:And I think this city will get back to where it should be in terms of being the most productive city in the country. It just has to.
Speaker 1:Yeah.
Speaker 7:And it and it will eventually with the right leaders.
Speaker 1:I was opt I was optimistic during your during your campaign.
Speaker 7:Well, I tried.
Speaker 5:I've heard.
Speaker 2:Yeah. Yeah. I've heard a lot of a lot of What? You know, negative takes on LA and things that are going right, and I'm and I just keep coming back to, like, the waves crash on time and the sun shines on time, and so Los Angeles will be great for a very long time, and the rest of the things are salt. Well,
Speaker 1:yeah. I think I think the be because of the natural environment, it it sort of enables some poor government
Speaker 6:You get
Speaker 2:a lot shots on gold.
Speaker 1:There's always new people in the you do get more shots on gold.
Speaker 7:But but you do have Yeah. A net decrease of population.
Speaker 2:You did. That's what's going on right now.
Speaker 7:Yeah.
Speaker 2:Yeah. So Unfortunately.
Speaker 7:Just like, you know, I remind people, if we operated the Grove and it was dirty, there were encampments, it felt unsafe
Speaker 2:Mhmm.
Speaker 7:People vote very quickly with their feet.
Speaker 2:Yeah.
Speaker 7:No different in cities.
Speaker 4:Sure.
Speaker 7:And so, there is a tipping point that people are gonna say, you know what, I know the weather's great, I know the views are great, blah blah blah. But my quality of life now or the quality of life for my children Yeah. Have gotten to a point that it's not worth it anymore.
Speaker 2:Sure.
Speaker 7:And we should never bolt to that end.
Speaker 1:We both, You know, continue to make this decision. We work we work here in Hollywood, but we our families are not are not in the city. We both moved out of the city and I would love to I would love to buy a home in the city someday, but there's a bunch of things that would have to change. What what cities and states do you think have the best sort of business environment right now? What's what's appealing?
Speaker 1:Because I'm sure I'm sure there's places that would would love to have your business and would offer a a number of incentives to try to bring you But out then I'm sure there's places that are just already great and and you wanna set up shop.
Speaker 7:Well, we've spent time like I said, we spent time last week in Nashville. I was very impressed. I met with the mayor of Nashville, very impressed with him. There's a lot going on there. Yeah.
Speaker 7:And business is moving there, but the streets are clean. Mhmm. You know, the environment was great and people are happy. You can feel the energy along the streets. So it was terrific.
Speaker 7:Austin was the same way. We're focused on Austin. Last week or yeah. It was last week. We've been moving around a lot.
Speaker 7:We just covered a big chunk of the state of Florida from Palm Beach to Coconut Grove. A lot of interesting opportunities. Coconut Grove is a very cool city down there. So we're looking at a lot of places, but I would also say in California, like our property in Montecito, I I think that region of Santa Barbara is managed very well.
Speaker 3:Yep.
Speaker 7:And we're doing another project up there. We're expanding the retail up at the hotel.
Speaker 2:Mhmm.
Speaker 7:We're starting that at the end of this year. We're investing a lot of money in workforce housing for our own employees actually on the property so our employees can live there. And Calabasas is a good example. We're putting in another 130,000,000. That was a property that I built thirty years ago.
Speaker 7:It's effectively that downtown, but it's an incredibly well run city. Yep. Good schools, good neighborhoods and it's safe and clean. And same with Glendale. I mean Glendale is a phenomenal city and we want to invest more in Glendale.
Speaker 7:So you don't have to go far. Culver City's done a hell of a job. I mean, look at the Yeah. What's boomed in Culver City with the offices that have gone Yeah. We
Speaker 1:was shocked at at the office lease lease prices in Culver. Yeah.
Speaker 2:Like Well,
Speaker 7:look at Century City. It's part of LA.
Speaker 3:Yeah. Yeah.
Speaker 7:But it's the part of LA because it's sort of this contained bubble
Speaker 2:Yep.
Speaker 7:That's clean, safe Yep. There's a there's a lot of emphasis by the ownership there versus downtown. Mhmm. The same office product. And the office product downtown because of the homeless problem and the crime, you have a 40% vacancy rate.
Speaker 5:You
Speaker 7:go to Century City, you have the highest rent probably in The United States outside of New York City.
Speaker 1:Oh, wow.
Speaker 7:So it just tells you what people are looking for.
Speaker 2:What do you think it takes to make it in real estate in 2026 if you're an up and comer?
Speaker 7:I I think the opportunities are huge. You know, you mentioned AI. I would tell you, I think anybody coming into whatever industry today, coming out of college, the opportunities are now endless because the world is on a pivot. Mhmm. And it's gonna be a little bit inefficient.
Speaker 7:And inefficiencies are the greatest opportunities. And because there's so much uncertainty how AI is gonna impact different industries, that's the best time to be leaning into it. And then finding out how if you wanna be in real estate, how AI is gonna create a better guest experience. How it's gonna create lower cost of building. How it's gonna create lower cost of operating, designing.
Speaker 7:I mean, do things now in our company through AI. I would have never thought we could do Yeah. A year or two years ago. And my one of my biggest frustrations is I'm constantly pushing the team, what more can we do in AI? Are we adopting everything we should be adopting?
Speaker 7:Mhmm.
Speaker 5:Yep.
Speaker 7:And so I think it's just jumping in. Jump in, get in it, take any job you can is what I tell people coming out of college. Work really hard. Don't necessarily do what you're just passionate about, that's great, do what you think you're really good at.
Speaker 2:Mhmm.
Speaker 7:And if you're really good at something and it marries up with passion, then that's unstoppable. And then you just keep going.
Speaker 2:We'll close with the challenge for everyone listening. Use AI to feng shui your home office. Wherever you work
Speaker 7:There you go.
Speaker 2:Take a picture of it, upload it to ChatGPT, tell redesign this proper Feng Shui. I think it'll work. I think we're
Speaker 7:That's brilliant.
Speaker 2:AI might be able to reposition your task.
Speaker 7:Next generation. Marry those I
Speaker 2:actually got into Feng Shui two or three years ago, redid my whole office. It was so much more relaxing. I'm I'm a true true believer.
Speaker 7:You married one of the oldest Yeah. Cultural science Yeah. With the cutting edge science.
Speaker 2:Yeah.
Speaker 7:It's very cool.
Speaker 2:Yeah. It can take time to get up to speed.
Speaker 7:You should have a horn.
Speaker 2:Thank you so much for coming on the show. We will wrap up here. Leave us five stars on Apple Podcasts and Spotify. Sign up for our newsletter at tbpn.com.
Speaker 1:It's an honor.
Speaker 2:And we will see you tomorrow. Goodbye. Cheers.