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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Watching TVPN.
Speaker 2:Today is Tuesday, 07/01/2025. We are live from the TVPN Ultra Dome. The temple of technology, the fortress of finance, the capital of capital. We have the current thing hot off the presses. It's Siri v two.
Speaker 1:Apple is making moves.
Speaker 2:Apple is making moves. Are weighing
Speaker 1:They are listening.
Speaker 2:They're listening. They're weighing using Anthropic or OpenAI to power Siri in a major reversal. Everyone thought they were do it in house.
Speaker 1:Can you imagine the actual like customer feedback that they get on the Siri product? Yeah. It's like people try to get Siri to do a simple thing, it fails and they're just hearing somebody swearing or something while they turn it off. I hadn't even thought about that because, like, we've heard you loud and clear. We've you
Speaker 2:loud and clear. Yeah.
Speaker 1:You guys are mad.
Speaker 2:I don't even know if
Speaker 1:they're doing something about it.
Speaker 2:Is that really I feel like people the expectations for Syria have also been low because it was introduced a decade ago, and it was, like, the the thing that sets the timer and the thing that you ask to get the weather and that's it. And so people haven't been asking for super intelligence or chat the Chatuchipiti like experience and so
Speaker 1:Or even a companion.
Speaker 2:Certainly. Yeah. Certainly not.
Speaker 1:You don't hear about people falling in love with with Siri.
Speaker 2:It was kinda pitched like that, though, back in
Speaker 1:the day.
Speaker 2:Yeah. It was very much like Siri. We're giving it a human's name because it will be as integrated into your life as a human. And that was the original vision. Now it's possible, but not possible with the team they have on staff.
Speaker 2:So they're partnering with Anthropic or OpenAI.
Speaker 1:Whether it's exploring. Bidding war. Bit of a bidding war. Yeah. And Apple allegedly has been balking at some of the prices being thrown out.
Speaker 1:Okay. I really think that. Anthropic wants How much? Billions a year and and ramping up over time.
Speaker 2:Yeah. What's interesting is that like, it could go the other way. We're like we're like Anthropic or OpenAI could pay Apple like Google pays Apple.
Speaker 1:No. I I imagine. Knowing knowing Tim Yeah. He'll figure out a way to make it a profit center.
Speaker 2:I would think so. Yeah.
Speaker 1:I mean, the the the data But the issue is there's real cost to running these products.
Speaker 2:For now. Yeah. But, I mean, it it seems like the cost will come way down. And, I mean, I I believe that the current ChatGPT, OpenAI, Apple deal is revenue neutral for both. I don't think there's any money changing hands, but it's also kind of a mess of a product because you have to say, hey, Siri, go to ChatGPT and look this up.
Speaker 2:And then it pops up a prompt that says, would you like to use ChatGPT even though you just said that? And I don't understand what you said. And then you have to click yes. It's like, come on, Apple. Like, you know what I want to do.
Speaker 1:Forward progress. The markets like it. It's up 2%.
Speaker 2:Mark Gurman has the story in Bloomberg. We will be diving into that. Said side it's sidelining its own in house models and potentially a blockbuster move aimed at turning around its AI effort. We should go to the mag seven market caps to track the horse race of the biggest tech companies in
Speaker 1:the world.
Speaker 2:Let's pull them up on the screen and see where people are tracking. So Apple's in third at 3,100,000,000,000.0. Good to see that they're over 3,000,000,000,000. Stock's up 2% today. Nvidia and Microsoft
Speaker 1:just as well. And one of these companies is not like the other.
Speaker 2:Meta does
Speaker 1:not. Measured in Tesla. Oh. Measured in the in the paltry billions.
Speaker 2:Congratulations to 2% up. You'll love to see it. They're up 2%. Yeah. Meta being in sixth doesn't feel like a sixth company to me based on the team and the and the moves they've made this week, which we will continue to dive into.
Speaker 2:We have Swix on the show today to break down some of the AI talent moves. We have a bunch of other folks coming on the show today. Yep. Talk about that.
Speaker 1:Anyway Other news. The senate passes Trump's mega bill, the big beautiful bill after an all night session. They went all night. I like that. And, it's gotta get through the house still, but, Elon is fuming.
Speaker 2:Play the Ashton Hall sound effect for
Speaker 1:He is absolutely fuming.
Speaker 2:Coming for the bill. It's war on the timeline. The timeline's in turmoil because Elon Musk said, anyone who campaigned on the promise of reducing spending but continues to vote on the biggest debt ceiling increase in history will see their face on this poster in the primary next year.
Speaker 1:Pinocchio mode.
Speaker 2:Liar. Voted to increase America's
Speaker 1:tech by easier to make your enemies look like Pinocchio.
Speaker 2:Yeah. Wait. But but I feel like if you put, like, I don't know. I I don't even know who voted for. Like, let's just say, like, Ted Cruz or something.
Speaker 2:If you put, like, Ted Cruz's face on here, like, are you going to lose the Pinocchioness?
Speaker 1:AI will find a way. I feel like it could be a little
Speaker 2:bit a little bit rough. Anyway, Elon's upset. He's trying to start a new party.
Speaker 1:He The America party?
Speaker 2:He said Vox Popula, Populi, Vox Dei. He wants to
Speaker 1:start the American party. And he is pissed because Polymarket Yes. Is showing that the is expecting the reconciliation bill, the big beautiful bill to pass
Speaker 2:by July 4. Fifth and 62%. Oh, yeah. 62% by July 4 and almost certainly by the end of the month.
Speaker 1:So this will be the one to watch. They're voting I guess the first vote is tomorrow. Yeah. We'll be following that.
Speaker 2:Yeah. It'd be interesting. Lots of pork. But if you're AGI pilled, it doesn't matter. Yeah.
Speaker 2:We are gonna be printing at 10% GDP, folks, in just just a few thousand days when superintelligence arrives. These these deaths matter.
Speaker 1:It's not days away. Many peep many people are saying
Speaker 3:And so
Speaker 1:people are saying.
Speaker 2:You're if you're against this bill, you're just telling yourself about your AGI timelines. You're like, oh, I don't really think superintelligence is coming.
Speaker 1:Yeah. It it is, I I think Thiel was pushing, generally pushing on Elon a bit in the interview he did last week around like, So are are humanoids humanoids are gonna be important? You're obviously making them. Are they going to impact the economy? Are they gonna accelerate growth?
Speaker 1:Yeah. You know?
Speaker 2:This is the post nineteen seventies stagnation. You know, we've been growing at 2%. Satya Nadella is asking the question of will AI accelerate GDP growth? Because if if GDP growth accelerates a lot, it changes the dynamic around everything. Like, not just this debt, which we've been kind of lightly joking about, but also,
Speaker 1:like, redistribution credit, he's also said when he when he initially exited Doge Yeah. And just stopped being a special employee, he did say the only way out is growth. So he knows this too. Yep. But I think he can hold both of these ideas, which is we need to grow, but he's also Yeah.
Speaker 1:Frustrated.
Speaker 2:The Hegelian dialectic. Of course. Yeah. I mean, if if GDP is growing really, really fast, you could even keep tax rates the same or lower them and still pay down the debt and do more redistribution. Like, you could be paying people like, you could have, like, something that feels like a massive social safety net, something that feels like UBI or or socialism, but to actually attack people less because the growth is so significant.
Speaker 2:So it all changes once super intelligence arrives.
Speaker 1:Maybe maybe Zoran is just so AGI pilled himself
Speaker 2:That's true.
Speaker 1:That he's like, yeah. We're gonna have plenty. We're
Speaker 2:We're gonna have to go around.
Speaker 1:We're gonna have such high levels of production. I'm sure the state can just seize
Speaker 2:a little bit. Alternatively, maybe he's a hardcore Bitcoiner. And so if he wants if he wants there to be no billionaires, no it is impossible mathematically to be a billionaire in Bitcoin because there's only 21,000,000 of them. So the richest you could possibly be is a millionaire if you owned over 5% of the Bitcoin supply. Right?
Speaker 2:So there will never be a Bitcoin billionaire because there aren't a billion of them.
Speaker 1:Well
Speaker 2:Whereas there are billions
Speaker 1:of dollars. Maybe he doesn't want
Speaker 2:people in the network
Speaker 1:to vote to expand the supply.
Speaker 2:Yes. So he's probably against the expansion of the Bitcoin supply, but maybe he's a hardcore Bitcoiner.
Speaker 1:He's a hardcore Bitcoiner who's against inflation.
Speaker 2:Yes. Yes. Exactly.
Speaker 1:Exactly. Anyway, in other news somewhere.
Speaker 2:We gotta hit that gong, Jordy, for Rahul Vorah.
Speaker 1:Where's the hammer, John?
Speaker 2:Founder
Speaker 1:You got the hammer?
Speaker 2:Of Superhuman. He has sold his company to Grammarly for an undisclosed sum.
Speaker 1:Nothing like hitting the gong for an undisclosed sum. You just don't you don't know
Speaker 2:what's going on. Could be a billion. Who knows?
Speaker 1:No. But 've used superhuman for many many years How many when did they really get out? Was it like six years ago?
Speaker 2:I think it was a bit older. I feel like it came on the scene like 2018.
Speaker 1:I remember I was I think that yeah, was graduating college and there was this concept that the Thread boys at the time were talking about luxury software. Oh, this is good. The idea of charging $30 for emails, which was just default free. They grew really quickly. Apparently, at the time of this acquisition, they have about 35,000,000 of ARR.
Speaker 1:Very impressive.
Speaker 2:Of ARR. Okay. So that's like, what, a 100,000 users paying roughly? Something like that?
Speaker 1:Something like that.
Speaker 2:Between a hundred and two hundred thousand users paying $30 a
Speaker 4:month. Yeah.
Speaker 2:Got it. Pretty cool. I mean, you know, serious business at $30.35 mil, you know, if it's run effectively, could have been, you know, kind of a lifestyle business throwing off a couple million dollars in free cash flow.
Speaker 1:Probably bigger.
Speaker 2:Yeah. Yeah. Potentially.
Speaker 1:Yeah. I'm really interested. We should have the CEO of Grammarly on want to understand. So they acquired Coda. That was surprising.
Speaker 1:Coda was another company that had a lot of, you know, meaningful traction. Yep. A lot of fans was a great product but I I don't think it was breaking out. Right? It wasn't, you know, on a path to being a public company itself or or a billion dollar
Speaker 2:Yep.
Speaker 1:Outcome. And then, now they're adding superhuman to the network. I don't see yet exactly how these tools all interconnect. Right? Grammarly helps you with grammar in the browser.
Speaker 1:Superhuman does have some AI functionality. I'm sure I'm sure and I know Coda does as well. Unclear to me yet how if it's like the same user that's gonna be using all of these things. If it's truly a productivity suite
Speaker 2:Yep.
Speaker 1:Or it's a basket of
Speaker 2:I mean, selling a point solution in the enterprise is hard with when you look at the the story of Slack versus Teams, like Microsoft just has so much dominant distribution there. Actually having someone rip out their productivity suite and say, as a company we're using superhuman for email and Grammarly for writing and you know, this other product for docs and and then not to mention the fact that Notion's running somewhat of a similar playbook with Notion Mail and Notion Docs and and then Google has a similar productivity suite. So, I mean, it's a tall it's a tall order, but will be cool to see how these different products interact because they're clearly excited about tying them all together in some interesting way. Yep. Very cool.
Speaker 2:Anyway, you mentioned humanoid robotics and, you know, there's another player. It's not just Elon. It's Jeff Bezos as well. Amazon now has as many robots as employees in its warehouses. So the number of Let's
Speaker 1:give it up for the hardworking robots. Yes. They haven't striked yet. Work.
Speaker 2:They haven't striked yet. The number of Amazon employees per facility over the last ten years has kind of oscillated from 750 800 employees per facility, went up to a thousand. Now it's down around 700, down 30% over the last five years. That's the post COVID era. And the packages handled by Amazon end to end per employee has skyrocketed over that time from from zero, to over 4,000.
Speaker 2:And so the robots are taking over. They're they're about to cross their one millionth robot deployed in an Amazon warehouse. So congrats to Jeff Bezos. Hope you enjoyed for that.
Speaker 1:Yeah. We should hit the gong for that.
Speaker 2:Maybe the gong
Speaker 1:sound Yeah. I saw a post somebody maybe it ended up in the timeline, but but I'll say it now. Was like a lot of people have opinions on Jeff Bezos' wedding. I ordered a phone last night Yeah. At 10PM and I got it this morning.
Speaker 1:Yep. I think you should be able to celebrate however he wants. So I'm happy for him and
Speaker 2:Built a business. Very helpful. Yeah. This was kinda Yeah.
Speaker 1:And and even looking at like Amazon puts up over a $100,000,000,000 a year of profit. Yeah. Let the man have a $50,000,000 a year wedding.
Speaker 2:A year, not a year.
Speaker 1:Not a Hopefully not a He's only done it twice. Some guys get to that stage of life and they just enjoy weddings. Right? Yeah. So they just have, you know Yeah.
Speaker 1:Frequent
Speaker 2:was this narrative around the wedding actually that, oh, he only invited celebrities because like Sydney Sweeney went and everyone was like, oh, is he really tight with like Sydney Sweeney? Like and but but it and I was saying like, look, he invited 200 people. You're seeing Sydney Sweeney because like, if you're a if you're a celebrity like, you know, paparazzi photographer, you're not taking a picture of like RJ Skirinj from Rivian who Bezos invested in and might have been there. I don't know. Yeah.
Speaker 2:Or like, Andy Jassy, the current CEO of Amazon. Probably got the invite, but is doesn't get in the paparazzi
Speaker 1:So he's having a party. Yeah. He's having a party.
Speaker 2:But you're gonna invite your boys, your business friends.
Speaker 1:Yeah. Sure. I'm sure. Yeah. Yeah.
Speaker 1:The media is obviously
Speaker 2:The media is who
Speaker 1:are the biggest stars there
Speaker 2:Exactly.
Speaker 1:Because they are who drive clicks.
Speaker 2:But that's why we need to send our paparazzi
Speaker 1:And you get people don't have any
Speaker 2:that's true.
Speaker 1:Yeah. That that would Andy Jassy spotted
Speaker 2:And there's Gapper. Yeah. Yeah. And then it's just like Sidney Sweeney off blurry in the left. It's like everyone's like, you missed the most important person at the wedding.
Speaker 1:We did not.
Speaker 2:No. Didn't. Andy Jassy is the most important person at that wedding potentially, if you win. Anyway, in other news, Commonwealth Fusion Systems, a fusion startup, has struck a deal with Google. Historic news.
Speaker 2:We've signed a landmark agreement with Google, a multifaceted partnership that dramatically advances our commercial fusion energy mission. Google signed an offtake agreement for 200 megawatts of power from our first ARC power plant. Google is increasing its corporate investment in in Commonwealth Fusion Systems. Google has the option to procure power from future ARCs. Deal is very strong signal that the war world wants clean secure power that Fusion offers.
Speaker 2:Together, we're catalyzing the Fusion market. So there's a couple players in this space, but all the Interesting guys
Speaker 1:who have hashtags as well dating themselves a little bit. They may be have a veteran social media manager. Maybe. Maybe. Maybe more for like the Hashtag fusion energy.
Speaker 2:Hashtag power moves. Because people are searching that. Didn't Elon ban hashtags recently? Oh, from ads. Okay.
Speaker 3:So you
Speaker 2:can still rip them in in hard posts. Yeah. Anyway, beautiful video. Good luck to them.
Speaker 1:And if you wanna learn more about Commonwealth Fusion Systems, go to hashtag Fusion Energy.
Speaker 2:Stop it. Stop it.
Speaker 1:Was great. Super exciting. So
Speaker 2:I mean, this is this is like the flip side of the Sam Altman Helion deal where OpenAI and Sam Altman, he's clearly thinking about power being very, very important for the long term. Crusoe has been very important in finding stranded energy, building natural gas plants, and helping scale up Stargate in Abilene, Texas. And Commonwealth Fusion Systems is kind of the other side of that, and they're partnering up with Google. So good to see it. In other news, Microsoft claims that their new AI framework diagnoses four times better than doctors.
Speaker 2:And people are kind of putting this in the truth zone, says, doctor Dominic Ng, I'm a medical doctor, and I actually read the paper. Here's my perspective on why this is both impressive and misleading. There were some interesting things where in the control set, I believe the doctors couldn't use Google. So it wasn't necessarily like a current doctor versus the Microsoft AI system. It was like a a like a doctor just completely
Speaker 1:Sort of acting like a human GPU.
Speaker 2:Yeah. Yeah. Just being like completely pen and paper, which isn't really the benchmark that you need to go against, but still impressive. Maybe the four x is a little overstated.
Speaker 1:Because the average doctor in The United States when they're sitting with a patient is googling Google. Whatever's happening and then Reddit at the end. And then going to Reddit and then OpenAI is scraping that
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah. And, you know, summarizing it.
Speaker 2:Yeah. But it is cool because now we have a Pareto frontier. We have a graph of the average total diagnostic care per case, how much it costs versus the diagnostic accuracy. And Microsoft with this team, this is led by Mustafa Suleiman, who had in an interesting trade deal was over at Google in DeepMind, co founded DeepMind
Speaker 1:Yep.
Speaker 2:Then did Inflection AI and got, like, Aqua hired in one of those, like, zombie deals to go to Microsoft. He's now the head of AI at Microsoft, and he, has been leading this this this push that's much more it feels maybe more Microsoft coded than what Apple's or than what Google is doing on the DeepMind team where Google is focused on, like, solving these very fundamental questions in in science and health, like, how do you do protein folding? That's not something that you go into, like, your primary care doctor and say, like, my shoulder hurts, and they they need to know how to fold proteins. Right? But if you go into your doctor and you say, my shoulder hurts, like, having an AI tool, basically, like, a great fine tuned chatbot that's HIPAA compliant and works within the Microsoft Teams ecosystem to pull the patient records inappropriately, fine tune on the right data, and then and then suggest a bunch of things that the human doctor can then go investigate.
Speaker 2:That's super valuable. And that feels like something that Microsoft is equipped to roll out to, the network of of doctors and clinicians that probably are already on Microsoft tool sets and and Microsoft stacks. So good stuff from Microsoft. We'll have to get somebody on the show to talk about that since AI in health care is all the rage. Anyway, hit that sound effect, Jordy, as we move to our next important news item, which is that ramp.com is available now for you to Time is money.
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Speaker 2:I'm literally up in the lab scheming on beautiful abundance for you. I'm cooking up ways for a rising tide to lift all of our boats. I'm praying on your I'm praying for your gains. I'm lighting a candle to your inevitable splendor, dude. GM.
Speaker 1:We mean that from the bottom of our hearts Yes. To all of you.
Speaker 2:Well, if you're looking to design a meme like this, head over to figma.com. Think bigger, build faster. Figma helps design and development teams build great products together, and you can get started for free at figma.com. Signal had a post breaking down Mark Gurman's analysis of Apple weighing Anthropic or OpenAI in the major power shift in the Siri game. Signal says, absolutely astonishing.
Speaker 2:Apple used to own the full stack, silicon to software to services. Now they're outsourcing the one layer that will define the neck deck the next decade of computing. It's a metaphysical betrayal of their own DNA. Anthropic and OpenAI don't need Apple, but Apple desperately needs one of them. This puts Apple under the models.
Speaker 2:It's integrating wild reversal. Whoever they choose, they now owe existential dependency to. And finally, if it if consumers realize Siri does not equal Apple anymore, that it's powered by OpenAI or Anthropic, then what exactly is Apple's IP? Thin shell over someone else's mind? That kills the aura of vertical magic.
Speaker 1:I Do
Speaker 2:you agree?
Speaker 1:It's exciting.
Speaker 2:It's certainly exciting.
Speaker 1:It's exciting. I would I would push that push back and say OpenAI and Anthropic don't need Apple. I would say that OpenAI, sure they don't need Apple, but integrating deeply at the hardware layer Yep. Is gonna be important. Otherwise, they wouldn't buy Johnny Ives love from.
Speaker 1:They wouldn't spend billions of dollars trying to develop their own hardware device. Obviously, they're trying to figure out what's after phones or what what could complement phones. Yep. But ultimately, I think it is a, for both companies, extremely important relationship Mhmm. In the context of consumer, right?
Speaker 1:Mhmm. Is this gonna impact Anthropix code gen business? Mhmm. No. But will this
Speaker 2:It might. It might in the sense that if I'm asking Siri to do tasks that require writing code, and the models are generating more code, that's more training data. Right? Like that example of like, I took a photo of Pat McAfee. I took a screenshot from the Pat McAfee show and asked how tall is his desk.
Speaker 2:And shot GPT three zero three wrote like a thousand lines of Python to go through and calculate how tall that desk was. And then I was able to say basically by thumbs up or thumbs down or asking another question, I was able to give it human feedback on whether or not that code path was the accurate if it got me the answer I wanted. And if I if I walk away from that, that's a signal. If I ask another question, that's a signal. If I give it a thumbs up or a thumbs down, that's another signal.
Speaker 2:And so there actually is a world where if you need to test a ton of different real world Yeah. Code generation tasks, and and is the code that you're writing actually useful to the consumer? The average consumer, the person who's just asking Siri for random stuff, maybe that is valuable. And so I I I don't know. I'm still I'm still curious as to like Maybe.
Speaker 2:But I I think the time.
Speaker 1:Obviously, are they gonna get better, more valuable data from just having tens of thousands or hundreds of thousands of developers building on
Speaker 2:True. True.
Speaker 1:Cloud Code daily. Yeah. Yeah. The other the other thing is is what what we're what's completely unclear so far is will consumers just be talking to Siri and it's still the relationship? Just like Siri might be running on some cloud somewhere.
Speaker 1:Consumers aren't saying, oh, Siri is not Apple because it's not their own servers.
Speaker 2:Well, Apple does push on that point very precisely Around privacy. Around privacy. They say, yes. When you use our models, it is on our cloud, and it is super private, and it is on device.
Speaker 1:But they can still partner with OpenAI or an Anthropic I agree. Figure out how to deliver that same end Yeah. Value prop.
Speaker 2:Yeah. It seemed like a lot of the privacy narrative at Apple was about control of the ecosystem and the ability to to to really push on the Apple tax and justify it. Right? Yeah. And and maintain that leverage.
Speaker 2:I don't know. It it it's interesting. And also remember money
Speaker 1:Siri was an acquisition. Yeah. Consumers didn't have an issue with that saying, oh, this isn't Apple code. Yeah. Yeah.
Speaker 1:Yeah. You you you this
Speaker 2:isn't Homegrown. This isn't
Speaker 1:farm to table. This isn't handmade.
Speaker 5:Can you
Speaker 2:imagine if consumers cared about that? It's like, this was technically an aqua hire, not an acquisition. Oh, no. I don't wanna wear beets. The the earn out structure wasn't to my liking.
Speaker 2:Like, only one board seat changed hands. I wanted I wanted three board seats in the acquisition.
Speaker 1:No. It was telling though that, Perkash here has opposed Yes. Claude gave Tim Cook sticker shock. I was referring to this earlier in the show. Yes.
Speaker 1:Anthropic have asked Apple for a multi billion dollar annual fee that increases sharply each year. Very acceleration pill. Yes. Anthropic. Yes.
Speaker 1:But, yeah. So so ultimately, I think that that feels like, you know, Apple having a cost center that can scale exponentially with usage Bad. Is not gonna be something they're super excited about because Yeah. At the same point in time, they're trying to show we are this ecosystem of software products. Yes.
Speaker 1:Hardware is important but really we're growing services revenue. And so if their costs are growing Yeah. Sharply Yeah. As defined here. The surprising thing is is, yeah.
Speaker 1:You could imagine a world where a part, you know, OpenAI says, we'll give it to you for free for the first five years or something like that. Right?
Speaker 2:I mean, it could even be that Because if Apple wants to paying Apple because if they are able to drop the inference cost low enough that it's similar to serving a Google search, and they're able to stuff ads in it, that would be incredibly valuable. Like, imagine if you go to Siri and you say, I'm looking for a new backpack and ChatGPT can dynamically insert out ads into that response within Siri. That should be extremely valuable. And so that I mean, that's the that's the current structure that Google has, that the current arrangement that Google has. I'm it's unclear to me how much how much different the market will be going forward.
Speaker 2:I don't know. Anyway, let's read through some of this Mark Gurman report in Bloomberg, Apple ways using Anthropic or OpenAI to power Siri in major reversal. I'll read through some of this, and then I'll want your reaction, Jordy. Apple is considering using artificial intelligence technology from Anthropic, BPC, or or OpenAI to power a new version of Siri, sidelining its own in house models in a potentially blockbuster move aimed at turning around its failing AI effort. The iPhone maker has talked with both companies about using their large language models for Siri according to people familiar with them.
Speaker 2:It asked them to retrain versions of their models that could run on Apple's cloud infrastructure for testing, who asked not to be identified, discussing private deliberations. Interesting. So, I mean, I don't know if Apple's cloud infrastructure has a lot of h two hundreds and is ready. I mean, they certainly could not serve 4.5, like a truly large model like that.
Speaker 1:Another $100,000,000,000 customer for Jensen.
Speaker 2:For Jensen. I mean, I I realistically, like like, Apple has enough of a relationship with TSMC that they could go and do kind of like, you know, the the the a three, the a or the the Apple silicon, you know, the m two chip, the m three chip, like the m four chip. They could do a different run with TSMC that's more optimized for inference of large models in the data center context. But it does seem like it'd be a very different muscle for Apple since they have not been I mean, when you think Apple's cloud infrastructure, it's like storing photos. It's like iCloud.
Speaker 2:Like, that's probably their biggest service or like like, I guess, like, Apple Music, Apple TV. Like, they serve files. They don't do a lot of machine learning inference versus, say, Meta that already has a, you know, a $100,000,000,000 data center that just does recommendation algorithms and machine learning and inference. It's not fully like a transformer, large transformer model, but it is, you know, multi parameter model for deciding what ads go where and what reels get served to you. So it would definitely be a new
Speaker 1:overtime to serve you the perfect reel right now.
Speaker 2:For sure. For sure. And and and Apple just doesn't have that scale GPU cluster that I'm aware of. So they'll have to call up Dylan Patel and some folks to get it done. Call up Jensen, maybe.
Speaker 2:Who knows? If Apple ultimately moves forward, it would represent a monumental reversal. The company the company currently powers most of its AI features with homegrown technology. It calls Apple Foundation Models and had been planning a new version of its voice assistant that runs on that technology for 2026, but it seems like they're backtracking. Switch to Claude or ChatGPT models for Siri would be an acknowledgment that the company is struggling to compete in generative AI, the most important new technology in decades.
Speaker 2:Apple already allows ChatGPT to answer web based search queries in Siri, but the Assistant itself is powered by Apple. Apple's investigation of third into third party models is an early stage, and the company hasn't made a final decision on using them. Marking a change, which is under discussion for next year, could allow Cupertino based Apple to offer Siri features on par with AI assistance on Android phones, which you don't hear about that much. I see the Gemini demos on
Speaker 1:You know, your friends that use Android phones, don't don't talk about how they're
Speaker 2:You know the Lone Rangers on Android.
Speaker 1:The Lone Ranger.
Speaker 2:You know we got one in our group chat. But other than that, it is rare. But even then, I feel like there would be more, like, viral x posts about cool Android features if they had really done well on the Gemini product, like, implementation. And it's just, like, maybe not quite there. But Gemini is great.
Speaker 2:The models are are really top tier. The Gemini app on iOS is not amazing. Like, the the the text to speech is really, really rough. Like, you click you click dictate, and then it will just stop dictating when you pause, and then just submit their query. Yeah.
Speaker 2:And so you can be with ChatGPT, love it because I open it up and I hit that button and I think and I say, okay, I'm trying to do a research on the MAG seven, and I wanna look MAG seven, their performance over the last decade. So go back and pull what their market cap was ten years ago and then what it was today and then create a table. But then if I pause, like, Google will just submit that. And I'll be like, woah. No.
Speaker 2:I wanted to add more and I wanna give you more context, but ChatGPT waits until I push the button to finish that. And so it's just like minor, minor UI. Yep. But that's more important to me than like, does it have a 150 on MMLU versus a 149? Like, I care more about the UX of like, am I did I just waste ten minutes by sending like a query that isn't complete, and I know I'm gonna get a bad answer on?
Speaker 2:Yeah. And so I I I I don't know. But again, Android's clearly a fan of Siri here, so it's not even a competition. The competing project internally dubbed LLM Siri that uses in house models to remains in active development. So representatives for Apple declined to comment.
Speaker 2:Shares closed up over 2% after Bloomberg reported on the deliberations. So Wall Street clearly likes the idea of one of these deals getting done, but very big question as to the structure of those deals. And I keep triggering Siri because I'm talking about it on my phone. It keeps popping up. Fantastic.
Speaker 2:Incredible. The project to evaluate external models was started by Siri chief Mike Rockwell and software engineering lead Craig Federighi. They were given oversight of Siri after the duties were removed from the command of John Giandrea, the company's AI chief. This was a spicy little trade deal going on over there.
Speaker 1:Giandrea Federighi.
Speaker 2:A spicy meatball over at Apple in Cupertino. He was sidelined in the wake of a tepid response to Apple intelligence and Siri's feature delays. Rockwell, who previously launched the Vision Pro headset assumed the Siri engineering role in March. After taking over, he instructed his new group to assess whether Siri would do a better job handling queries using Apple's AI models or third party technology, including Claude, ChatGPT, and Google's Gemini. Interesting.
Speaker 2:After multiple rounds of testing, Rockwell and other executives concluded that Anthropic's technology is most promising for Seres needs. That led Adrian Perica, the company's vice president of corporate development, to start discussions with Anthropic about using Claude. What's interesting is that SSI, not in the conversation here yet. Also Yeah. Thinking Machines, not in the conversation yet.
Speaker 2:And when you think about Thinking Machines, that recent information article about Miramaradi wanting to do fine tuning RL for businesses. It's like, there's very few bigger businesses than Apple. That's a pretty good client to go win. Yeah. And so if you have a foundation model, you have to assume she's raised what?
Speaker 2:2,000,000,000? So she can do So
Speaker 1:pre seed. Yeah.
Speaker 2:Yeah. Pre seed.
Speaker 1:It could be a thing Apple doesn't really work with a lot of pre seed companies. Yeah. Yeah. Yeah. They're like, call us
Speaker 2:when you're like series c
Speaker 1:I'm sorry. Like, you know, I can't bet my career on a on a pre seed
Speaker 2:On a pre seed company.
Speaker 1:But call us if you can get a seed round done.
Speaker 2:Yeah. Yeah. But, I mean, I I I think the I think the fact of the matter is, like, $2,000,000,000 is enough to do a GPT four level run, to do a deep sea style run. And so you if you take all the best practices from deep sea v three and r one, like the reasoning model, and you spend the money to go do the training, and you pull all the data together, and and maybe you're not completely stealing the data from the GPT four API, but you're getting it somewhat legitimately through, you know, these these data brokers like Merkor and Scale and whatnot. Like, you should be able to get a, you know, near the frontier level model done.
Speaker 1:The issue is Apple isn't set up to comp top AI researchers. Exactly. So in some ways in some in some ways it's
Speaker 2:It's not a money issue.
Speaker 1:They're not willing to spend the money to put together to say, hey, we're we're getting cooked in AI. Yep. We should spend $5,000,000,000 like Zach just did to to put together an incredible team. Yep. But they'll have to pay for it by it sounds like they may end up paying annually to get access to the technology that those types of teams
Speaker 2:It's crazy.
Speaker 1:Built. Yeah. And so you you gotta pay for it somewhere.
Speaker 2:It's the CapEx, OpEx which you're the CFO is like, okay. Yeah. Like, don't want we don't wanna spend a bunch of money upfront to reap this award endlessly, but endlessly, but we will pay a billion dollars a year, I guess. I don't know. Yeah.
Speaker 2:They they they seem not fully AGI held over there. The Siri Assistant originally released in 2011 has fallen behind popular AI chatbots and Apple's attempt to upgrade the software has been stymied by engineering snags and delays. A year ago, Apple unveiled new Siri capabilities, including ones that would let it tap into users' personal data and analyze on screen content to better fulfill queries. I do wonder if Apple is thinking about thinking machines. You have to imagine that Zuck is thinking about buying the company.
Speaker 2:Right?
Speaker 1:Sure they talked.
Speaker 2:It's only a couple billion dollars. And by all accounts I
Speaker 1:think I think, to to be honest, it sounds like Zuck had offered somewhere around the last private market valuation for SSI.
Speaker 2:Yep.
Speaker 1:And he probably even though all the investors had a one x pref Yep. Right? He probably needed to do that to get Yeah. At least early investors comfortable with it.
Speaker 2:So But Ilya is a true missionary, true believer, wants to take the straight shot to SSI. He doesn't he doesn't care about optimizing Ilya doesn't care about the debt ceiling. Let's put it that way. Mira, on the other hand, is doing reinforcement learning for businesses. You throw you throw a $15,000,000,000 acquihire her way with that team, maybe it gets done.
Speaker 2:I don't know. If I'm Apple, what well, let's pull up the mag seven market cap again. What do they add? 2,000,000,000,000? 3,000,000,000,000?
Speaker 2:They're up there. And and Apple is, you know, it feels like they could afford even 15,000,000,000 for thinking machines. Sure. Do you disagree?
Speaker 1:No. I mean, they totally could. But they'd be looking at it as talent acquisition, I think. Yeah. Because the team is I mean, it's such a young company.
Speaker 1:Yeah. And But if you
Speaker 2:were if you were in in the big man's
Speaker 1:seat, know,
Speaker 2:trying to cut
Speaker 1:So you you would do that.
Speaker 2:What would you do?
Speaker 1:You think Mira's gonna be cool just clearing 74,000,000? She's not gonna make more than Tim. You think she's gonna be down to sell now and then just make have total comp less than the average AI researcher going to Meta?
Speaker 2:I don't know. I mean, the the beauty of an acquisition is that, like, you can be structured to make more than the CEO, at least in a short amount of time. Like, that certainly was the case with, the Beats acquisition. Right?
Speaker 1:Sure.
Speaker 2:Like, for those years when the that earn out was active, they made more than the CEO. Yeah. And that's okay. Anyway, people with knowledge of Apple's AI team say it is operating with a high degree of uncertainty and a lack of clarity with executives pouring over a number of possible directions. Apple has already approved a multibillion dollar budget for 02/2026 for running its own models via the cloud, but plans for that beyond remain for beyond that remain murky.
Speaker 2:Still, Federighi, Rockwell, and other executives have grown increasingly open to the idea that embracing outside technology is the key to a near term turnaround. They don't see the need for Apple to rely on its own models, which they cons which they currently consider inferior. And this makes a lot of sense because Apple is not great at, at software that needs to be updated, you know, 25 times a year. We're in this crazy AI model horse race. You're you don't wanna be waiting around for, oh, yeah.
Speaker 2:Like, at the next WWDC, they're gonna improve it when Sam Altman shipped, like, 25 updates.
Speaker 1:Sam's gonna have 40 buzzy announcements between now. Exactly. And so you wanna be riding those. So Beats was Apple's largest ever acquisition.
Speaker 2:Yes.
Speaker 1:Paid $3,000,000,000
Speaker 2:Okay.
Speaker 1:Including 4,000,000 of 400,000,000 of Apple stock. Mhmm. But Beats at the time was doing a billion dollars of payroll. Holy only paid, like, a three x revenue multiple.
Speaker 3:Wow. That's
Speaker 1:insane. Intel's modem business Yeah. Yeah. Yeah. Which was in 2019 for a billion.
Speaker 1:Okay.
Speaker 2:And It was doing 2,000,000,000 in revenue probably. Money?
Speaker 1:Yeah. Probably. Yeah. You look that up.
Speaker 2:I'll keep reading. They don't see the need to rely on the own own models. Licensing third party AI would mirror an approach taken by Samsung. While the company brands its features under the Galaxy AI umbrella, many of its features are actually based on Gemini. Anthropic, for its part, is already used by Amazon to help power the new Alexa Plus, which I haven't seen rolling out into the Amazon Alexas.
Speaker 2:Maybe the Alexas aren't wired up properly, and you have to get the next batch, the next revision. But Intel's
Speaker 1:motor business was doing it over
Speaker 2:a billion. So less than a one x revenue multiple.
Speaker 1:Yeah. Basically a one x.
Speaker 2:Okay.
Speaker 1:And you remember in 2018, they acquired Shazam
Speaker 2:Oh, yeah.
Speaker 1:For 400,000,000.
Speaker 2:How much were they doing?
Speaker 1:Yeah. I got it.
Speaker 2:This is In the future, if its own technology improves, the executives believe Apple should have ownership of AI models given their increasing importance of
Speaker 1:how products What do you think Shazam's annual revenue was at the time of acquisition?
Speaker 2:I wanna say 80. How much? Waiting. The company is working on a series of projects including a tab a tabletop robot and glasses that will make heavy use of AIs. I'm really excited for the Apple tabletop robot.
Speaker 2:That doesn't get enough coverage these days. I think that's a really cool idea.
Speaker 1:So Apple paid 400,000,000. App was pulling in roughly 38,000,000 a year.
Speaker 2:So over 10x revenue multiple. Okay.
Speaker 1:So, anyways, not a long history of making massive acqui hires.
Speaker 2:Yeah.
Speaker 1:Actually, no history at all.
Speaker 2:Well, whatever planning, they gotta do it on linear. Linear is a purpose built tool for planning and building products, meet the system for modern software development, streamline issues, projects, and product road maps.
Speaker 1:If Apple wants to be more like OpenAI, one way they could do that is by getting on linear.
Speaker 2:Yeah.
Speaker 1:Because OpenAI uses linear.
Speaker 2:Oh, here we go. We get to we get to thinking machines. Apple has also recently considered acquiring Perplexity in order to help bolster its AI work. It also briefly held discussions with Thinking Machines Lab, the AI startup founded by former OpenAI chief technology officer, Mira Moradi, but nothing really more than that in the story. Apple's models are developed by roughly 100 person team, maybe two two times big, too big.
Speaker 1:Who knows? Maybe 50. It's a lot of pizzas.
Speaker 4:A lot
Speaker 2:of pizzas. Run by Ruming Pong, the an an Apple distinguished engineer who joined from Google in 2021 to lead this work. He reports to Daphne Luong, a senior director in charge of AI research. Luong is one of Giandrea's top lieutenants, and the foundation models team is one of the few significant AI groups still reporting to Giandrea. Even in that area, Federighi and Rockwell have taken a larger role regardless of the path it takes.
Speaker 2:The proposed shift has weighed on the team, which has some of the industry AI industry's most in demand talent. Some members have signaled internally that they are unhappy the company is considering technology from a third party, creating the perception that they are to blame, at least partially, for the company's AI shortcomings. They have said that they could leave for multi million dollar packages being floated by meta platforms and OpenAI.
Speaker 1:Yeah. If you are a great AI researcher, the idea of being responsible for just integrating the work of OpenAI or Anthropic is gonna be much less exciting than trying to build frontier models.
Speaker 2:Totally. And also like, I don't know, just in terms of missionary work, like the idea of building like the the the the most advanced god that you can talk to in this crazy AI. Like that is exciting, but there's also something that's like, I think potentially like a really strong missionary pitch for you're you are going to create you're going to build models that are used at massive scale by every iPhone user. And you can actually, you know, surprise and delight the customer to the tune of hundreds of millions of people. I I think that is I think that is actually like pretty pretty laudable work and
Speaker 1:very Even going to work at Super Intelligence Facebook knowing or at Meta knowing that knowing that your work will be integrated into the Meta Ray Bans
Speaker 2:Yep.
Speaker 1:And you're gonna have like a Cluelly like experience That's cool. Yeah. Just
Speaker 2:That's very wearing
Speaker 1:glasses Yep. Like that is a cool Yeah. That is like a new dimension
Speaker 2:Yeah.
Speaker 1:That you can build on.
Speaker 2:I remember the initial Siri build out. They they did a bunch of magical things. Like, you could say like Siri, tell me a joke and it would come up with these like funny zingers that were like tuned to Apple's brand, but still actually pretty funny, and they hired comedy writers to work on it. And so like, I think that there still is a world where you you find you you develop a model, you own it, and you're doing the foundational, like, serious AI research, but you're still productizing it in the Apple way, creating something special. You know, you already hear about this with the the Claude is different than ChatGPT, like the vibe test.
Speaker 2:Like, we haven't seen the vibes fork out really all that much, but there's definitely a world where the Apple LLM performs at a similar scale and speed and the reasoning and it's doing well in the benchmarks. But then, you know you're talking to the Apple model and it has the Apple feel to it. And, like, that could be cool if you're if you can actually
Speaker 1:It could
Speaker 3:be so cool.
Speaker 2:It could be very cool.
Speaker 1:It could be so cool. Yeah. Like if they brought if they could bring back some of the like flare from the brand campaigns that you can you remember Apple by 1984, the like original iPod. Like, these things that were just iconic. Yeah.
Speaker 1:And if you could think about how to like embody that that original Apple
Speaker 2:It's like Steve Jobs' voice, basically. Yeah. Bicycle for the mind. And and like encouraging that wonder. I keep going back to that idea of like what would Steve Jobs have thought about vibe coding?
Speaker 2:And it's like he would have loved it. He loved GarageBand. He loved giving everyone the tools to be an artist. Everyone's a musician. Everyone's a programmer.
Speaker 2:Like these these things, this like this giving someone the ability to do really really interesting things with Siri. Awesome. I think I I think it's very very on brand for for Apple. Anyway, let me tell you about Vanta. Automate compliance, manage risk, improve trust continuously.
Speaker 2:Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.
Speaker 1:Head over to vanta dot com and tell them the technology brother sent you.
Speaker 2:There are some more trade deals in this in this report in Bloomberg. One of Apple's most senior large language model researchers, Tom Gunther, left last week. He had worked at Apple for about eight years, and some colleagues see him as difficult to replace given his unique skill set and the willingness of Apple's competitors to pay exponentially more for talent.
Speaker 1:I'm saying.
Speaker 2:Apple, this month, also nearly lost the team behind MLX, its key open source system for developing machine learning models on the on the latest Apple chips. After the engineers threatened to leave, Apple made counter offers to retain them and they're staying for now. That's dramatic. Wow. In his discussions with both Anthropic and OpenAI, the iPhone maker requested a custom version that could run on Apple's private platform.
Speaker 1:Apple is such an interesting culture because it's counter to a lot of other cultures and tech that are like, oh, I might work at Meta for five years and then go to Google for a few years then dabble at a startup and then go back to Meta. In Apple, you see more of the the somebody who's been there for fifteen years. Yeah. But then at a certain point, even if you've been there a long time, you're looking around and you're saying people with my exact same skill set are making Yeah. Five, ten times.
Speaker 1:Yeah. This article highlights that that the meta pay packages have been between 10 and 40,000,000 Yep. Annually. And I would transcribe And that more on that. That feels more realistic than what the New York Times had been saying about a $100,000,000 signing bonuses and all that good stuff.
Speaker 2:Well, you know, the source is not conflicted at all. He's the guy that hates the fact that these pay packages exist. Yeah. He's quoting them. Yeah.
Speaker 2:Yeah. It's so funny to source a podcast between two brothers doing psy hops. Like, come on. Come on, New York Times. Step it up.
Speaker 2:The company already has already internally tested the idea of running l these LLMs, other models, other companies' models on their own Apple controlled cloud services. Obviously, that's very important for the data privacy narrative. Other Apple intelligence features are powered by AI models that reside in consumers devices. These models slower and less powerful than cloud based versions are used for tasks like summarizing short emails and creating Genmojis. It's here for Genmoji.
Speaker 2:Just bake down Ghibli. Just bake down Ghibli, have it be a filter in the iPhone app. Boom, you're done. Like you have a bang or product there. Something like that.
Speaker 2:Just cart like, you know, you can go in and make any photo in your camera roll black and white. You can make it Hollywood like teal and orange. You can make it you know, moody or super cool or super warm. Like you can adjust the the contrast, the color temperature. Turn it into a cartoon.
Speaker 2:People will love that. Everyone will be using that. Apple is opening up the on device models to third party developers later this year, letting app makers create AI features based on its technology. Very excited for that. Very bullish for Apple on that.
Speaker 2:Amazing. Yeah.
Speaker 1:Which is why the fact that they almost lost the team working on that Yep.
Speaker 2:Entirely. They need that team badly.
Speaker 1:Is would have been crazy.
Speaker 2:Because if that product stagnates
Speaker 1:I saw founder I saw founder, I I forget their name, posting hearing that, you know, the team that you're based he was building a product Mhmm. Based on MLX. Mhmm. And then he heard the MLX team almost left.
Speaker 2:Was like Freaking out? He was like, woah. Oh, no. It's So last year, OpenAI offered to train on device models for Apple, but the iPhone maker was not interested. They said, we got it handled.
Speaker 2:Turns out they didn't. Since December 2024, Apple has been using OpenAI to handle some features. In addition to responding to world knowledge queries in Siri, ChatGPT can write blocks of text in the writing tools feature later this year. In iOS 26, there will be a ChatGPT option for image generation and on screen image analysis. While discussing the potential arrangement, Apple and Anthropic have disagreed over preliminary financial terms according to the people.
Speaker 2:The AI startup is seeking a multi billion dollar annual fee that increases sharply each year. The struggle to reach a deal has left Apple contemplating working with OpenAI or others if it moves forward with a third party plan. They said if Apple does
Speaker 1:So interesting. You can imagine OpenAI being more willing to strike some type of deal because they're they wanna be effectively the next Google Yep. Right? In terms of this dominant consumer Internet company. Yep.
Speaker 1:But at the same time, OpenAI is building devices to try to kill, you know, Apple. You can imagine. They they wouldn't say that. They wouldn't
Speaker 2:say that. Yeah. Would say that. I I
Speaker 1:do believe that consumers, there's like a finite amount of devices that they're willing to Yep. And so if they wanna compete in hardware, it's a little hard for Apple to to get excited. Yeah. Although they partner with Google, and Google has
Speaker 2:I have been surprised by the number of devices that people carry. I mean, like, I'd say, like, a decent chunk of San Francisco tech people carry AirPods, an iPhone, an Apple Watch, and an Apple laptop, basically, everywhere they go. That's four devices. That's like a lot. Yeah.
Speaker 2:And then, yeah, maybe maybe a VR headset eventually. Well, if they do wind up buying a device, they gotta pay sales tax. They gotta get a numeral HQ sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Anyway, in other news, John Mu, the inventor of muting, has passed away at 96 in his castle.
Speaker 2:Rest in peace to John
Speaker 1:Mu. His castle.
Speaker 2:Professor John Mui, visionary orthodontist and founder of Orthotropics, passed away peacefully in June 2025 at the age of 96 in his castle. A pioneering figure in the facial growth and development, John Mu challenged the status quo of traditional orthodontics arguing that environment, posture, and function, not genetics alone, shaped the face. His philosophy, orthotropics aimed not only to straighten the teeth, but help promote healthy jaws, open airways, and confident faces. Through his work was though his work was often met with fierce resistance from the establishment, John stood firm in his convictions, driven by a lifelong commitment to prevention, integrity, and science, and giving every child a fair chance at full facial development. Today, his legacy works on through lives on through the work of his son.
Speaker 2:John Mu will be remembered not only as a clinician, but as a courageous truth seeker who dared to ask better questions and never stopped looking for better answers.
Speaker 1:Never
Speaker 2:stopped. Chewing some nasty gum, say, pour one out for Johnny.
Speaker 1:How he processed the explosion of Matsuki. Popularity on social media.
Speaker 2:It must have come as a surprise because it was the last, like, few years of his life. Yeah. Been working on it for pro I mean, he's 96. And somebody probably printed out a tweet for him and said, look. Some some trad influencer has gotten 10,000 likes on your on your work and a million views.
Speaker 2:Anyway, we have some trade deal news. Ring that gong, Jordy. Mary Dinofrio has joined Crosslink Capital as a partner and a leader of the BERM's crossover strategy. She will be focusing series b plus venture investments across software categories. She Fortune Magazine has the story.
Speaker 2:She was a longtime Bessemer investor, and now she's heading over to Crosslink Capital to crossover into private growth equity deals. So congratulations
Speaker 1:Mary In
Speaker 2:other news, Miramaradi's Thinking Machines is offering top dollar to technical talent, much higher base salaries than Anthropic and OpenAI. Thinking Machines will give you 500 k. Anthropic, how about a safe 400 k? OpenAI, best we can do is 300 k. No wonder everyone's jumping ship.
Speaker 2:I think we're looking at two different things here. Like, this is this is, like, not necessarily for the top researchers who are these, like, star athletes. This is maybe more for just, like, the general folks who are joining as like software engineers and developers and kind of like members of technical staff. But it is interesting to see that, Mira is offering Getting aggressive. Yeah.
Speaker 2:Getting aggressive and offering generous pay packages because there's obviously a lot of work and it's a very small team. And even though Thinking Machines has some great, great AI researchers on board, they gotta have some folks to chop wood. And now that Mira is in the is in the business of selling to businesses, b to b fine tuning reinforcement learning for businesses to drive profit, She's gotta get thinking machines on Adio. Customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level.
Speaker 2:You can get started for free.
Speaker 1:Adio.com/tbpn. Yep. You can try it out for free on us.
Speaker 2:So the 462.5 k average salary Thinking Machines Lab offered four technical hires is considerably higher than more established language model competitors Marathi is aiming to compete with. So the, the competition in AI talent rages on. We will be joined by Swix in just a few minutes to discuss the AI talent wars in more detail. Aidan McLaughlin, who's been on the show, says, post the the survivorship bias photo of the plane with the red dots. And Benjamin this is in response to Benjamin DeKracker who says, the OpenAI brain drain poaching by other labs kind of confirms that the smartest minds in AI don't actually believe OpenAI is on the cusp of AGI, but rather that it's going to be a drawn out slugfest for several years at least, and the economy still matters.
Speaker 2:In other words, if you really believe that OpenAI was right around the corner from AGI, and once there, AI disrupts the entire economy to a post scarcity economy, why would you leave that organization right now in exchange for money? It's a good question, but Aiden is, of course, saying that the true believers are still there. They haven't left. It's only the mercenaries that left. And he's
Speaker 1:We gotta have
Speaker 2:he's continuing
Speaker 1:We gotta have Aiden back on the show.
Speaker 2:Get him back.
Speaker 1:That was that was a really fun
Speaker 2:It's it's a great shot. It's fantastic. Also, in other news, they're saying Meta is now preparing a huge pile of cash to acquire sweet baby Ray's.
Speaker 1:Sweet baby Ray's. I would love do identified as a potential acquisition target.
Speaker 2:Yeah. I mean
Speaker 1:I wonder what their AI talent pool really looks like.
Speaker 2:I mean, Elon sells the Tesla tequila. Chamath has tequila. Maybe Zuck, he, you know, he
Speaker 1:he The Meta
Speaker 2:sweet He says he doesn't use caffeine.
Speaker 1:You know?
Speaker 2:Maybe
Speaker 1:I just got sweet baby rays. Sweet baby rays.
Speaker 2:Bans.
Speaker 1:Ray bans.
Speaker 2:Sweet baby Ray Ban Metas. There we go.
Speaker 1:They they come with sauce
Speaker 2:Honestly
Speaker 1:in the glasses.
Speaker 2:BBQ AI. No. No. No. When you're barbecuing, that's the ultimate augmented reality use case.
Speaker 2:That's It can take a picture and say, okay. I've set a timer automatically. Check the temperature. How long, oh, how long should this particular steak be cooked? Sets the timer, lets you know.
Speaker 2:Starts buzzing little reminders
Speaker 1:when it's when it's ready.
Speaker 2:This is actually killer application. This is actually
Speaker 1:Perfect ribs.
Speaker 2:This is actually
Speaker 1:You can only make perfect ribs with a sweet baby Ray Bans.
Speaker 2:Well, if you're interested in in getting in on the action of the mag seven, the public companies, head over to public.com. Investing for those who take it seriously. They got multi asset investing, industry leading yields, and they're trusted by millions. So Elon Musk is starting a new party. He says, Vox Populag, Vox Dei, 40 per 80% of people voted for a new political party that actually represents the 80% in the middle.
Speaker 2:Interesting. So we'll see if he actually does it. There is a poly market tracking whether or not he will do it. It has been surging. We will be tracking that.
Speaker 2:Third parties, not very successful in American history, but, you know Not yet. We're in a new era. Maybe Elon will will cherish. It's unclear if he wants to be the head because he can't be the president because he's not a native born citizen. So who would he put in charge or who would he back?
Speaker 2:Andrew Yang was running a third party for a while, the forward party. Do you remember this whole thing?
Speaker 1:That whole
Speaker 4:You remember this?
Speaker 1:Whole thing. I I do remember it Yeah. Yeah. At a high level.
Speaker 2:Yeah. I mean, had the backing of like Sam Altman, some really big tech people, and he was running as a democrat. And then he and then he dropped out and kind of like was not seen as like an outsider. And then he started the the forward party. So not left, not right, but forward.
Speaker 2:And didn't really get that off the ground fully. But
Speaker 6:Good branding.
Speaker 2:Joe Roganian. Yeah. Good branding work. I wonder what the Elon Musk I wonder what the Elon Musk party will be called.
Speaker 1:I think the I think it's called the America party.
Speaker 2:Oh, the America party. Okay.
Speaker 1:Would be confusing. Said he he called it that was his words. What Elon Musk's America party could look like. Yeah. He seems he he he clearly hated politics.
Speaker 1:Yes. Got out. But he's angry enough about the state of things that he wants to potentially get back in the game. But one, we're we're gonna have Zach Kukoff on the show in two minutes. Great.
Speaker 1:He's gonna be breaking down the big beautiful bill for us. Great. What's happening on the ground in Washington? One thing that was included was the Invest America Act which got approval from the senate as part of the It's on the verge of becoming law, the first country on the planet to make sure that every child has a stake in the game, real private account ownership compounding in our best companies from Very
Speaker 4:cool.
Speaker 1:So very very cool. Great work from Brad Gerstner. And otherwise, we have some breaking news from
Speaker 7:Tell me.
Speaker 1:VPN, which is that we have partnered with Graphite. Graphite.dev is a website. Let's pull it up. Team,
Speaker 3:I've
Speaker 1:been very excited about this. I was a happy graphite customer at my last company. Entire engineering team was running on it. Graphite helps teams on GitHub ship higher quality software faster. It is the platform trusted by 45,000 developers at top engineering orgs like Harvey
Speaker 2:What company is it?
Speaker 1:Ramp Ramp. Replit. Love that. Who else we got? We got a Complexity,
Speaker 2:Harvey, Asana.
Speaker 1:Datadog for sale.
Speaker 2:Datadog?
Speaker 1:The browser I love Datadog. DuckDuckGo.
Speaker 2:Let's go.
Speaker 1:A lot of them. But if you're building on GitHub, like I'm sure you are, go and get on graphite. Graphite.dev is the website and we'll have to have Merrill, the CEO on the show very soon. But very excited to partner with them and, you know, Tyler will be running our TVPN fantastic.engineeringorg on graphite as well.
Speaker 2:Love More
Speaker 1:to come.
Speaker 2:Well, we have our first guest of the show, Zach Kuukoff.
Speaker 8:Thanks for having me.
Speaker 1:From Washington. Washington correspondent.
Speaker 2:Mister Washington.
Speaker 8:I even set up I don't know if you can see. That's
Speaker 2:That's great.
Speaker 8:Oh, that's the monument right there.
Speaker 2:Wow. No way.
Speaker 1:There we go. Beautiful. There we go.
Speaker 2:That's great.
Speaker 1:We'll just have our production team zoom in zoom in just on the monument so you won't be on camera. Perfect. Just I'll get out of the way, but you can
Speaker 8:see the good stuff behind me. That's the important thing.
Speaker 2:So, yeah, break it down for us. The, The Wall Street Journal has a story. Senate passes Trump's mega bill bill after all night session. Tax cuts and Medicaid spending reductions head to the house with a July 4 deadline reachable. What's interesting in the bill?
Speaker 2:How likely do you think it is to pass? What are the major reads on this? And then we wanna get your your takeaway from, like, where the dividing lines are around the bill.
Speaker 8:Yeah. So there's a couple trip lines. The first trip line, I would say, you guys have been tracking the moratorium, the ten year moratorium on AI development. This was the on AI regulation. This was the first it was in.
Speaker 8:Ted Cruz put it in, then it was out, then it was back in. There was a compromise. There was a five year agreement instead of a ten year agreement, and Blackburn has been sort of a key driver of getting it back out again. It's out now. It was done 99 to one in the senate, almost unanimous in the senate to get this out.
Speaker 8:This was a big win for Dario, a philanthropic, probably the number one beneficiary. And by the way, somebody who certainly used a fair bit of political capital pushing for this, that's fault line number one. I would say fault line number two,
Speaker 1:Medicaid Great.
Speaker 2:Before on that. It's it's a it's a potential ban on AI regulation that was removed. And so the current bill does not have a has a does not have a moratorium on regulation. So it's kind of double negative.
Speaker 8:Moratorium on federal regulation. That's right. So you can have California
Speaker 2:Yeah.
Speaker 8:States, whatever, who want to Marsha Blackburn, her home state, Tennessee Mhmm. Passed last year something called the Elvis Act, which, was cutely named. But basically said, look, if you are building, like, a a, you know, an AI audio business, you cannot use any likeness of a real performer's sound. So if you wanna have, John singing the blues or Jory singing the blues, I cannot do that without a prior deal. That's because in Tennessee, Nashville is a dominant industry.
Speaker 8:The music industry is a dominant industry. And so part of Blackburn's opposition to the moratorium, which would have prevented bills like that from taking effect, is that it ended up superseding the work that her home state has done to protect its dominant industries. By the way, net net, this moratorium, the time that they got to a compromise was so watered down, it really wouldn't have impacted Tennessee or California anyway. But it was a very dramatic swing from in, out, in, and now out once again for good.
Speaker 2:Mhmm. And and
Speaker 7:and What do
Speaker 1:you what do you expect at at the state level around AI safety going forward? Is this gonna is the fact that this was removed gonna inspire certain governors to say, you know, make make this a part of their platform?
Speaker 2:And I guess, like, I I wanna know more about, if I'm Eleven Labs and Yep. I'm and I'm training a voice agent and I can't be sure that some clip from, you know, Elvis or, you know, some Justin Bieber worked its way in there. Does that mean that I just turn off Tennessee at, like, the DNS level or do some geofencing? Or or is it more risky than that where have to I I have to comply kind of at the national level and they're kind of forcing me to comply everywhere, or can I just pull back out of that state? Because we've seen this with with Apple intelligence not being available in China, not being available in Europe, for example.
Speaker 2:But, yeah, what what would the impact on something like that be?
Speaker 8:Well, think about states in two categories. Right? There are some states that are so large. And by the way, the analog that I would think about here is what happens in the textbook market. So if you're a textbook publisher and you wanna write some textbook about biology or whatever, if the largest states in the country, it's category one, has a law mandating something needs to be in a textbook, suddenly, you're gonna comply nationally because they are so large, they warp the market
Speaker 7:exactly what you
Speaker 5:have to.
Speaker 8:That's right. And so if California tomorrow says, look. We're passing a European style bill to severely curtail, which I think would be a disaster, to severely curtail AI development, that would, in effect, be a national bill. Mhmm. And part of the, in my view, mistake that's happening tactically right now is this self imposed July 4 deadline is so restrictive that it forces all of these more nuanced negotiating points to fall by the wayside.
Speaker 8:Mhmm. Right? It becomes blanket either it's in or it's out. There's just not time to get to a more nuanced middle ground. So 11 Labs at Tennessee at the Elvis Act probably says, look.
Speaker 8:We just heard around Tennessee. I don't I haven't spoken to 11 Labs. But if California passes, then suddenly you have the whole country warped by this. And Gavin Newsom and the California legislature are certainly ambitious enough to try as they did last session, to try to pass something that would impact the whole country.
Speaker 1:Yeah. Wasn't wasn't there news out of California this week or or last week around some of this stuff?
Speaker 8:Yeah. Yeah. There's there was a huge fight which had an unlikely set of bedfellows where you saw Andreessen and others leading the anti legislative, anti regulatory brigade against some other folks who are much more pro curtailing. By the way, I I will just say the other interesting takeaway for tech, not to totally dovetail away from your question, but the interest other interesting takeaway for us, I think, in this is the deciding vote in the senate on the overall package, the reconciliation bill, was JD Vance. And so if you're a Vance head looking at 2028, right, you already see that Ocasio Cortez and others, AOC and others, are gonna use his deciding vote on this bill, which includes huge amounts of Medicaid cuts that Tom Tillis from North Carolina, in particular, thought were politically toxic as a wedge against him when he comes and runs for president in four years.
Speaker 8:So sorry. That was a you didn't answer you asked a question about California, and I dovetailed it back to the federal level. No. It's super interesting. Yeah.
Speaker 8:Yeah. Yeah. That's the big, the big shock. So you asked about tripwires. The AI tripwire was one.
Speaker 8:Medicaid cuts, which are politically really toxic. Right? Because who wants the idea that you voted for the government to take away your health care. That's another huge tripwire. And then there's a package of things that maybe we care about that, are nuanced, like, for example, IRA, tax incentives for clean energy, right, or new taxes on wind and solar from China.
Speaker 8:These are all things that might enrage the Republican, the the very conservative Republican faction in Vigee in the house, which now has to still pass the bill and now complicates the negotiating posture because the senate watered down. The senate preserved the IRA tax incentives and watered down some of the tax cuts, got rid of some of the tax cuts on Chinese imports, which means, basically, you have a bill that's actually financially harder to pass because it's less balanced. And at the same time, you've now alienated a huge faction of the GOP, the super conservative GOP side of the party who still have to vote for the bill to happen. So it's up in the air if it passes or not.
Speaker 2:Can you tell me about the EV tax credits? I know Americans are struggling more than ever to buy naturally aspirated v twelves. I'm hoping that there's some move there to subsidize things like the Ferrari 12 cylinder, the Dolce Triindi. It's a multi $100,000 car. Even if we can't subsidize that, maybe we can just take away the subsidies from electric cars to tilt the to tilt the playing field in favor of the of the larger engines, the supercharged v eights, the twin turbos, the g 60 threes, these types of cars that Americans, you know, deserve to be driving.
Speaker 2:So what's the news on the EV credit front?
Speaker 8:I agree with you that the backbone of the American economy is the Ferrari. Right? It's impossible to me to imagine a world. Thank you for the last track. I appreciate that.
Speaker 8:Where a blue collar factory worker cannot own a sports car is beyond me. This bill doesn't address that. I wish it did. Great if it did. It's not gonna solve that huge unsolved problem.
Speaker 8:Yeah. What it will do, by the way, is continue to drive a wedge between Elon and Trump. Right? Then you saw Elon take the Twitter. I imagine you guys probably mentioned earlier.
Speaker 8:You saw Elon take the Twitter and start to really crusade against people voting for this. That is in part because at least the house version of the bill was much worse on a lot of the subsidies for electric vehicles than the senate version. The big challenge is gonna be going into now the conference committee. It's gonna be how do they reconcile these two challenges so that they can hopefully tilt the market back in favor, of course, of Ferraris and supercars nonetheless, while also not alienating one of the two power centers of the GOP, at least today, in Elon, who could easily primary somebody who votes against.
Speaker 2:Yeah. That makes a lot of sense. What what what about, how how are the Democrats feeling about EVs these days? Because it used to I used to feel like it was a Democratic cause to be pro EV incentive. Let's save the environment.
Speaker 2:Let's get people out of the gas cars. I'm joking about the v twelves, obviously. But but now it's become maybe let's punish Elon, but is this a cut your nose despite your face situation for the Democrats?
Speaker 8:I think it's a rough spot. I mean, you guys remember when Elon wasn't invited to the big EV summit under the Biden administration. Right? That's part of what kicked off his political awakening. Totally.
Speaker 8:Is he isn't he hasn't used unionized labor, and so he was excluded from this EV summit. There's been a huge polarization, a negative polarization against EVs among not only Dems in office, but a democratic base too Mhmm. Which is, to all the points you brought up, quite ironic. You're not gonna find many Dems willing to cross the aisle in support of electric vehicles to save this bill. This is a bill that will live or die by Republican whip count and Republican unity.
Speaker 8:If the whip count isn't there, it's gonna be really hard to get it done before July 4.
Speaker 1:Mhmm. What about Elon's America party? You think that's real or or just exciting?
Speaker 8:Those are my only two options. Real or exciting. There's no door there's no door number three.
Speaker 1:Yeah. I mean, it's obvious like, you know, we were talking earlier, third parties haven't haven't historically done well.
Speaker 2:Well, he has the America PAC. So when you say
Speaker 8:That's right.
Speaker 2:Elon could primary someone, he could potentially primary a Republican on the Republican ticket with the American PAC. And he could almost, like, be kind of like a head fake, like, oh, this is part of the America party, but it's not really a third party. Is is that more what we're thinking here, how this plays out?
Speaker 8:Maybe maybe one historical analog. It's not perfect, but think about, like, a Theodore Roosevelt, like a Teddy Roosevelt with the Bull Moose Party. Right? You think about it's a fact faction within a larger established party, to your point, that can serve as an engine to primary people who are in disagreements.
Speaker 2:Like the tea party.
Speaker 8:Like the tea party or, frankly, what's happening now. Look at Zoron
Speaker 2:in New York. MAGA is also like a wing of the Republican Party.
Speaker 8:That's right. That's right. That's right. MAGA, the Tea Party, and now on the left, the polarization from the Zoran and Democratic Socialist world. All of these folks are new factions in a way that, by the way, we haven't seen before.
Speaker 8:The same way that fifty years ago, you basically watched MASH on television. That was your only option. And now I tune into TBPN while I play Subway Surfers and have 30 other things hitting me at the same time. That's absolutely the political version of that. Right?
Speaker 8:Where you say, okay. It used to be my options were a platform that I accepted wholesale on the Republican side or the Dem side. Now I can be a MAGA guy. I can be a tech right guy. I can be a populist guy.
Speaker 8:And I'm a new right guy. And on the left, I can be a democratic socialist. I can be an abundance bro. I have an infinite menu of things. The America party is more likely, if it sticks, one more menu on the side of the right.
Speaker 2:Sure. Sure. That makes sense. A lot of sense.
Speaker 1:What question. What what time what do you expect out of the next twenty four hours?
Speaker 8:So tomorrow morning at nine, house rules committee votes. That's gonna be a key vote to see how this thing does. What I would say is if this gets done by July 4, the thing that you're gonna have to look to is that 9AM eastern vote to see how much unity is there in the Republican party. They can barely lose any votes if this thing goes through the house in its current form. But I think it's unlikely it's going to happen immediately.
Speaker 8:It'll happen. This will get passed. But Mhmm. On their timeline, I don't know. Next twenty four hours, if you see more senators like Murkowski from Alaska who are saying things like the bill is flawed.
Speaker 8:Please send it back to the senate so we can work on it again. That's a key indicator this thing may not have the legs it needs the next couple days.
Speaker 2:Yeah. We heard about I mean, everyone's saying, like, it's the biggest bill. There's all this pork. Like, are there any, like, green shoots where there's some random startup out there that's just super excited because maybe it's not a headline grabbing, you know, $10,000,000,000 thing, but it's like, that's a $100,000,000 that I can go after in energy or in defense or in shipbuilding or anything. Have you seen any of these, like they're called riders.
Speaker 2:Right?
Speaker 8:Yeah. Yeah. It's a good question. Biden was famous for stacking a lot of these. Like, the inflation reduction act had a million ways you could go participate.
Speaker 8:This one's got fewer. I'll say one funny piece of pork, and I'll say one actual opportunity. The real opportunity, I would say, is for fintech folks who are looking at the Trump accounts, right,
Speaker 2:which is
Speaker 8:negatively giving huge amounts of new Americans who are underbanked or not banks before access to capital for the first time. If I'm Robinhood, I am loving. That's a big change for me. Funniest piece of pork in the bill, Murkowski, who is the key holdout in the senate from Alaska, got a tax exemption for Alaskan native Alaskan whalers. She said, basically, native Alaskan whalers need to be Yeah.
Speaker 8:That was honestly big delivery for, for her constituency of people who kill whales in Alaska,
Speaker 1:I suppose. Let's give it up for the whalers. Yeah. They don't get enough attention in Washington.
Speaker 2:I mean, we've we've talked
Speaker 8:about the,
Speaker 2:you know, energy is really important for the AI data center race. Whales, they produce oil that you can
Speaker 1:burn. So Wasn't it Chase who said he would he would burn
Speaker 2:whale oil? He didn't say he would do it. He said that the hyperscalers are so desperate for energy
Speaker 1:right now
Speaker 2:that they would burn whale oil. It's more
Speaker 1:fun to think about Chase
Speaker 2:He's being like personally. Launching Crusoe for whales.
Speaker 1:Yeah. They're
Speaker 8:so blubber. To the new whalers.
Speaker 2:Yes. Yes. They really are. The old whalers.
Speaker 8:And the old whalers. True.
Speaker 1:Zach, this was so much fun.
Speaker 2:This is great.
Speaker 1:We'll have to have you call in tomorrow or Thursday. More news.
Speaker 8:Please. I'll be around it's my first wedding anniversary, so I'll be around.
Speaker 2:Oh, congratulations.
Speaker 8:Plenty of time to call in. Thank you very
Speaker 1:much. Incredible.
Speaker 2:Incredible. We'll talk to you soon.
Speaker 8:Thanks having me, boys. See you soon.
Speaker 1:See you.
Speaker 2:Bye. Up next, we're going back to the AI talent wars, talking trade deals, talking $100,000,000 offers with Sean Swicks. How are you doing?
Speaker 1:There he is.
Speaker 2:With the suit. The suit. Looking fantastic. We you wore a suit last time, and we didn't give you enough credit because you were at your own conference Yeah. The AI World Fair.
Speaker 1:This is a
Speaker 2:sign would just this is a sign
Speaker 1:of respect. This is
Speaker 2:a great respect. So thank you.
Speaker 1:Thank Thank
Speaker 2:you. And it's always great to great to catch up with you. How how did you process the news over the weekend? What jumped out at you? I saw a couple of your posts.
Speaker 2:You were breaking it down. But but how how would you tell the story? How how how big is this for Meta? How bad is this for OpenAI? How are you feeling about the trade deals that we've seen break loose over the last few days?
Speaker 7:I feel like people who have been in discussing, like, sports trades, I might be way more equipped to to discuss this. This is, like, relatively new in in AI land and, honestly, just, like, absurd. You know? Like, no like, get that bad guys. Like, you know, like, I'm I'm happy you're getting paid.
Speaker 7:But, like, also, it definitely feels like for the a lot of the AI researchers I talked to, like like, this is a little bit sort of a, like, a panic move and and Mhmm. In some extent warranted. Right? Like Yeah. I think that Meta has felt like it needs to do something different than what it has been doing, especially leading up to LAMA four, And this is different.
Speaker 7:This is very, very different. This is something that only Zuck can do. Think for
Speaker 1:me So there was just just for some extra context, there's new reporting from Kylie over at Wired just now saying that, you know, there's been some back and forth. What are the actual offers? Yes. There obviously a lot of them are different, right? It's not just like a set offer that everybody is getting.
Speaker 2:You join Meta you get $100,000,000 immediately. Yeah. Hand
Speaker 1:delivered. Don't think that's what's going So, apparently some of them are up to 300,000,000 over four years Okay. With more than 100,000,000 in total compensation for the first year. This is Wired's reporting, right? Mark Gurman was saying
Speaker 2:They must have seen She said she needed to see
Speaker 1:an offer letter to put But, the funny thing here is there's an OpenAI staffer who was responding to this anonymously and they said, that's about how much it would take for me to go work at Meta. So shots shots fired. Wow. But I
Speaker 7:mean, they have Right? So now they have unfortunately, have set their own price. It is public now. I think there was some back and forth between, like, whether or not Sam appearing on his brother's podcast was, like, a very calculated move and, like, was he dishonest? This is not my words.
Speaker 7:This is what
Speaker 2:my It seems like you might have been honest based on this reporting. Like, it seems that it's real.
Speaker 7:I think it look. It's in that ballpark. Right? Like, whether or not it's exactly a 100 plus minus, like, it it is at least eight figures. Yeah.
Speaker 7:And that is, like, far and far and beyond what any anyone else had had been getting prior.
Speaker 1:And and Basically. And it it is in there at least in the relative range of what Tim Cook and Satya made all of 2024.
Speaker 2:Yeah. Which is which is crazy. Is Also, the 100,000,000 number, it's so round that it just jumps out to you. And I think it's much more viral than a 112 or 89. Like, a 100 is just such a round number.
Speaker 2:It's such a big amount of money. It's just instant generational wealth.
Speaker 7:For sure. I I think, like, that's exactly it's weird that the calculus of, like, does this make sense for Meta? Yes. It does because I think you guys covered my analysis before that, like, basically, they just cut VR spend and reallocate to AI spend, and they have the funding. They have the equivalent of Anthropix entire annual spend.
Speaker 1:Yeah. And Meta's at all time highs right now. Right? The market likes aggression. And so and so it doesn't really matter if you if you could move a $1,800,000,000,000 company market cap by a couple points, you're doing pretty well.
Speaker 1:Yeah.
Speaker 7:Yeah. Zuck is no stranger to betting, like, 1% of his company, right, to
Speaker 1:to Totally.
Speaker 7:Against the future. And he, like, I think of uniquely of of a lot of the sort of FAANG or what is it? I think a a lot of people are trying to come up with, like, new acronyms for, like, the the magnificent seven. So I like the one that's Among Us.
Speaker 2:Among Us.
Speaker 7:Yeah. Among Us is the best acronym.
Speaker 1:There have been some wild acronyms flying
Speaker 2:around. You're talking about.
Speaker 7:That's just uniquely empowered as as, like, a, you know, honor mode of the of the of the trillion dollar companies to actually do this. And, like so, like, it's really amazing that the leaders he's hired and the people that he's managed to hire. I I would say that, you know, to to one part of your opening question, like, how affected is OpenAI? I would have said no. Not not that affected.
Speaker 7:You have, like, super deep bench. Mhmm. Even, like, the people that you don't really hear about, like, are actually, like, fantastic leaders in in their own right. And so, like, in some in some in some extent, OpenAI is, like, very robust to to already sort of lead, like, departures already. But the email from
Speaker 2:Mark Chan.
Speaker 7:Mark Chan over the weekend, I think, was also, like, oh, like, I wouldn't I wouldn't say that if I were him. Mhmm. I don't know if you you guys have the the
Speaker 2:Oh, yeah. We saw
Speaker 1:it. Oh, yeah. That knowing that that memo would immediately leak, it felt emotional and defensive versus hey For sure. John's phrasing was was or or at least the way that you you said. If you phrase this as, hey guys, we have billions of people coming to our website monthly.
Speaker 1:Yep. We have hundreds. We have billions and billions of revenue. We are the category leader in this space. Yes.
Speaker 1:We are doing something different than Meta is doing. Yes. And we will continue to dominate. And also rally.
Speaker 2:This is the fourth time this has happened. Maybe fifth time this has happened. So we survived Anthropic and Dario leaving.
Speaker 1:Don't forget surviving Elon
Speaker 2:We sir we survived Ilya leaving, and we survived Mira leaving. And there's four spin out direct competitor cofounder companies. This is a couple people leaving. We're gonna get through it. We've been you look at the growth chart.
Speaker 2:We're growing, growing, growing. I would have, yeah, definitely gone from a source of strength there. I don't know. Yeah. But, yeah, what is your thought on, like, the narrative that, like, OpenAI seems Lindy at this point, incredibly resilient, able to lose key people, and just keep plotting forward with, you know, iterative releases, models get a little bit better, UI on the app gets a little bit better, deep research comes out.
Speaker 2:They're just always staying on the frontier, just one step ahead of everyone else in that core chat product. And, yeah, maybe they maybe they might not be able to dominate in, you know, the the Claude code ecosystem immediately. They gotta make some plays to make that happen.
Speaker 7:They definitely want to, by the way. They
Speaker 2:They want to. Yeah. For sure. But in terms of the core thing that's clearly dominant and huge and, like, game changing and profitable, like, they're doing great and they should and they should kind of they should lead from a source of strength there because they've been through so much and continue to deliver on that front. And and and this doesn't seem like a cause for like, the narrative around this this leaving is that, okay, Meta's gonna catch up to a frontier LLM, a reasoning model.
Speaker 2:They're gonna have great image generation. But does anyone think that, you know, in three years' time, people's phone people's home screens are gonna switch from ChatGPT to MetaChat? No. I don't think so. But what about you?
Speaker 7:Yeah. Yeah. I I don't think so. Keep in mind also Meta has its own institutional issues with AI products. I think they launched this, like, AI chat feature that every chat was public.
Speaker 7:I don't think I still think it's still there.
Speaker 2:It won't that that I think it was, like, a dentally sharing
Speaker 1:box you had to check.
Speaker 2:Yeah. People were accidentally sharing it, but it kinda speaks to, like, yeah, when you're dealing with a trillion DAUs. Like, you're gonna have weird stuff happen. But
Speaker 7:yeah. I would say that Sam would be the first of many people to acknowledge that there's such a thing as a 10,000 x engineer and 10,000 x AI researcher. Yep. But they they also have a very deep bench, and it's not just about the bench. It's also about the data.
Speaker 7:It's also about the infrastructure that they've accumulated, that, you know, the t m what what's their what's their acronym? MSL. Yep. Metasuperintelligence is going to have to build up effectively from scratch because if effectively, Yan Lakun has failed in his in his leadership of of Meta AI there. And think, like, that that's fine.
Speaker 7:Like, that's that's a pivot. Like, that's that's something that Oneida can do. But, like, yeah, Oneida has very deep bench, and, like, I I think they are like, they're they're they're good there. I would say, though, that it's a really interesting, like, how well diversified this this landscape is. Most people when I talk to, you know, there's there's often, you know, in the eye circles, there's this discussion of who has the mandate of heaven.
Speaker 7:Mandate of heaven meaning Mhmm. They they're just, like, most likely to achieve a GA. Obviously. Of the big labs Yeah. Myself excluded.
Speaker 7:Of the big labs, a lot of people are mostly saying DeepMind. It's actually not OpenAI. So I think, like, OpenAI is, like, intensely aware that they're being, you know, poached. They're being outcompeted on on on pricing. They're I'll be outcompeted on some metrics like for DeepMind.
Speaker 7:Mhmm. And they're and OpenAI is, like, extremely competitive. Like, whenever I talk to them, I'm so impressed that, like, they're not just arrogance. They're not they're not, like, resting on the laurels. They're actually just like, we will win on every single front.
Speaker 7:Yep. And I think it's just a very impressive company that way.
Speaker 2:Then let's flip over. I mean, MSL is a very it's a cooler acronym than than LAMA. I always love LAMA because it's a fun name, but it it didn't have the same, like
Speaker 1:It seriousness. Fair.
Speaker 2:Fair. And Fair felt also just like it's it's a little nice. It's not a hardcore team.
Speaker 7:No. We don't we don't care about fairness. We Nope. We we drop safety from
Speaker 1:MSL is like going to the majors. Exactly.
Speaker 2:I mean, that's so Major League LLM, major league AI trainer. But but I wanna talk about the historical energy analogy because Zuck has been in this position before, with the shift to mobile. So when when Meta or when Facebook back in the day was a web browser, they initially moved over to, to an iPhone app, and the iPhone was growing. And they kind of made a mistake going a little bit too far into the HTML five route, wrapping it in an in an iOS shell, but they didn't build the app natively, and they were kind of falling behind. But then, you know, from 2012 to 2015, Mark was extremely aggressive about acquiring Instagram and WhatsApp, rebuilding the team, hiring some great people.
Speaker 2:This is when Adam Messeri and and Andrew Bosworth came in and really really built out monetization in the feeds. They had more money flowing through the system to actually pay for all this stuff. And then
Speaker 1:Yeah. We were covering yesterday that the Zuck did a talent rate in in the 2010 era of Google because he just wanted to get better at ads basically. And then he built the greatest ad engine of all time.
Speaker 2:Yeah. So yeah. I mean, yeah, how are you how are you interpreting, like, the comeback story and the fact that, like, Mark has also been here before?
Speaker 7:I think that it's interesting how you have like, Zuck has almost has to fail first. Mhmm. And then he overcorrects and and goes really, really hard and wins. Yeah. In contrast, I think, like, VR never really had a failure because it didn't really, you know, have that had that that much of a of a success to begin with.
Speaker 4:Yeah. But, yeah,
Speaker 7:it, MSL could only have happened after the comparative disappointment of LAMA four. Mhmm. If LAMA four had had proportionately the same traction that Llama three had Yep. I don't think we'd be sitting here today. Totally.
Speaker 7:So, actually, this is, like, net positive that we went through that because we were like, oh, like, this like, we proved out that this is we've tapped out in this direction, and we just need a whole new team, and we need to scale things in a very different way. And probably we just need to poach from the other labs. Yeah. That's what they've done.
Speaker 2:What do you think the
Speaker 7:I mean
Speaker 2:Oh, sorry. Yeah. Continue.
Speaker 7:It's interest it's also interesting, though, that I what their their their current strategy was their third choice. Mhmm. And somewhere in the middle, either first or second choice was perplexity.
Speaker 5:Mhmm.
Speaker 7:And that would have led, that would have led, Facebook or or Meta in a very, very different direction, more than, right now, which is building a lab.
Speaker 2:What do you think the postmortem on Llama four is? Is it just that they over rotated towards pretraining, massive model, behemoth, these, like, you know, not focused on reasoning, not focused on all the little tricks and tool use and stuff that actually creates a delightful LLM experience or chat experience these days? Or is there something else going on there? Like, how do you tell the story of what they got wrong with Llama four, if anything?
Speaker 7:I don't wanna bag on Llama four too much. By the way, put in a a thing in the chat for for people to to compare. Scout and Maverick were great, and then the the shenanigans around Llama Arena were regrettable, but, like, understandable, honest mistake, whatever. Yeah. But it seems that Behemoth will just never be released.
Speaker 1:Interesting.
Speaker 7:The assertion again, Behemoth's never released, so this is all rumors, was that they try to basically adopt whatever that DeepSeek did for their large fine grained mixture of X rays model, and it just didn't work. They didn't interested in filtering it enough, whatever. We will never really know the answer. I I think, like, there's probably also organizational issues around what data they can use. I I know this for a fact just because, like, I've I've heard some sense.
Speaker 7:Issues around, like honestly, like, at a big corp, when your lawyers get into the mix of training data issues, that can get very inconvenient. Mhmm. When you know, I think, like, comparatively, Anthropic when they won their recent case, they were more, like, you know, seek you know, bend the laws and seek
Speaker 1:Founder mode. Founder mode. Yeah. Ask for forgiveness.
Speaker 7:I think now that we actually have a little bit of ruling around, like, okay. Like, pre trading on on copyrighted data is actually transformative use. Therefore, it's fair use. Therefore, it's fair game. Go ahead.
Speaker 7:Actually, we'll see Yes.
Speaker 1:But you the case is still trying whether that you need to buy the underlying thing, which could still be egregiously, you know, it could be incredibly expensive to to acquire the copyrighted material.
Speaker 7:Not at all.
Speaker 1:You don't think you don't think that'll go through?
Speaker 7:No. No. No. Yeah. Whether or not you buy the underlying thing, it's fine.
Speaker 7:It's actually just the the issue of copyright, whether you have to pay per use.
Speaker 3:Mhmm. It's
Speaker 7:actually our pay per inference. Now that that issue is out
Speaker 1:of Yeah. But I I was saying the Anthropic case is still like they had 7,000 7,000,000 books that they obtained through that they don't that they didn't purchase. And Oh,
Speaker 7:the pirated ones.
Speaker 1:The pirated Yeah. So I mean, that that's will be interesting if labs have to effectively strike deals with publish you know, I I don't know. It's it's still in the court. They
Speaker 7:they are doing that. They they probably just just should do that. It's a onetime cost comparatively compared to the value that they can extract out of the books. The books are just guaranteed to be underpriced because the books are priced as though they're sold to one person, whereas, you know, a model is gonna be used by millions. So, like, there is there's just there's just no like, it's fine.
Speaker 7:Just pay it. The the piracy thing is a is a legacy of Books three, which is a dataset that was created in a by a let's say, someone who was very pro piracy. It was a it was a copy of Books one and Books two. It was actual licensed public domain books. Anyway, so so long long story short, like, I think I think those cases will be resolved.
Speaker 7:And, like, I don't I I think that LAMA and Meta's strategy there will probably be affected by the quality of the data that they had and the fact that they just couldn't they they, like, sort of type they were playing one hand, typing hand in their back, whereas all the other labs were not.
Speaker 1:Yeah. Yeah. Interesting. Well, this has been a fantastic Last last one one more question. Any reactions to the news that Apple's working with, you know, potentially working on a deal with Anthropic or OpenAI.
Speaker 1:Anthropic wants potentially billions out of it.
Speaker 7:Very very convenient timing for the open model release, which is rumored to be soon. Mhmm. Like but, like, I no reactions yet. I think Apple There's a lot of news around Apple that never materializes. I think Apple hasn't shown that it has gotten the memo like Zuck has shown.
Speaker 7:Mhmm. So until until it wakes up, like, I don't know. I think, like, around the time of the Apple intelligence launch last year, I think a lot of people I I was I was commenting that, like, basically, Apple wanted to be the first layer of intelligence, and then they wanted to route. So they always wanted to keep wanted to be Switzerland, wanted to play nice between OpenAI Anthropic and all the and whatever other labs, probably not Google. But I think you kinda have to make a bet.
Speaker 7:I think you I think you kinda have to go all in. Like, I'm I'm not that interested in in Apple making deals with OpenAI Anthropic. I still want OpenAI to do an OpenAI iPhone. Mhmm. I don't feel like I don't like the in ear device.
Speaker 7:And I and, know, I I just I just wish they just went all in and and took Apple on head on because, like, all of these are half measures, man. Like, the like, you're we're gonna be sitting here, like, five years from now, and Siri's still gonna, like,
Speaker 1:kinda
Speaker 7:suck. Like, it's the same deal as, like, Amazon making a deal with Anthropic for, like, smarter Alexa. Where is that today?
Speaker 2:Yep. No. No. I was just asking. I haven't I haven't actually seen it in the wild yet.
Speaker 2:Great point. This is really
Speaker 7:One more breaking one more breaking news for you guys. I don't know if you probably guys probably missed it, but, Cursor has hired the Cloud Code people from Anthropic.
Speaker 1:What do you mean what do you mean hired? Like, how many of them?
Speaker 2:I heard they hired the Notion Mail team. I didn't realize that they hired the the Cloud Code team.
Speaker 7:That's an that's an interesting commentary on, like, the like, what is what is Notion able to keep its people? Because the Notion Mail team was, you know, they they just launched it.
Speaker 2:Yeah. They just launched it.
Speaker 7:And now they have left.
Speaker 2:Trade deal.
Speaker 7:But, like, cursor so Cloud Code, developers have been talking about it nonstop. I think Yep. People who are, like, adjacent to developers really pay attention to this one. This is
Speaker 1:as
Speaker 7:close as anything is to the new being the new Cursor, it is Cloud Code. Mhmm. People are going absolutely nuts and spending a huge amount on it. Anthropics revenue is up four x since the start of this year. Mhmm.
Speaker 7:And and, like, Cloud Code only launched in February.
Speaker 1:Wow.
Speaker 7:And now Cursor has poached the top two people from Cloud Code, like, creator and the and the PM. I'd like, it's it's breaking news.
Speaker 1:But, like,
Speaker 7:in terms of in terms of, like, talent trades, this is a really interesting one because it's at the engineering level and not the model level. Mhmm. And it's starting to spread out. It's starting to be, like, extremely competitive here. And I think it's very exciting.
Speaker 1:Wow.
Speaker 2:Well, yeah, we'll have to have you back soon since this is this is the top story every day now. This is this is real life. Thank you so much
Speaker 1:for Sean.
Speaker 2:Great to see you. Cheers. Have a great rest of your day. And next up, we have Matthew Prince from Cloudflare coming in to TBPN. Welcome to the stream.
Speaker 2:Some huge news from Cloudflare. We'll let him
Speaker 1:tell us the How
Speaker 2:are you doing? Good to meet you. That's me, Juke. Welcome to the stream. I would love to start with the news today, and then I wanna go into some of the the history of the company and and when you faced similar junction points and kind of turning points in the past.
Speaker 2:So why don't you kick us off with the big announcement and the big news today from Cloudflare?
Speaker 3:Sure. So about eighteen months ago, we started getting approached by a number of content creators saying that they faced a new new threat Mhmm. Online. We spend most of our days, most of our business trying to fight cyber hackers, Iranians, Russians, North Koreans.
Speaker 1:Yeah.
Speaker 3:And so I was surprised when the new threat was AI companies. And, frankly, I kind of rolled my eyes at publishers. I was like, publishers are always complaining about, you know, the next new technology. And and and and they said, just pull the data. Look at what is is going on.
Speaker 3:And it was really striking that over time, you could watch as the sort of deal that publishers have made with Google, you know, starting thirty years ago, which was you can copy all of my content. In exchange, you send us send us traffic. That deal just didn't hold up anymore
Speaker 1:Mhmm.
Speaker 3:Where they were copying the content, but because they were providing answer boxes, AI overviews, they just weren't sending nearly as much traffic. And and that was the good news. As you looked at OpenAI, it was about 750 times harder than with the kind of Google of old to get traffic with something like Anthropic. It's 30,000 times harder. And the reason why is because people are reading the derivatives.
Speaker 3:They're not reading the content. It'd be effectively like, if I ask an AI system, you know, summarize what happened on the Technology Brothers show today, I have less incentive to actually go and watch your actual show. And Yep. That means that if you're making money through advertising, if you're making money through subscriptions, if you're just, you know, getting value out of the ego of knowing that people are watching your show, that's going away in an increasingly AI driven web. And and we worried about that quite a bit.
Speaker 3:And more and more as we talk to publishers, we realized there was something that we could do about it because Cloudflare runs one of the world's largest networks. A huge amount of the Internet already sits behind us. We could partner with literally publishers, everyone from Adweek to Ziff Davis and everything in between to say that let's change the the way that that, the Internet works, and let's change the sort of model where if you're going to take content, you should actually compensate the content creators for it. And so starting on July 1, we flipped the script. We made it as a default that if, you're using Cloudflare, that you, can, by default for free, block any AI crawlers from taking your content without compensating you.
Speaker 3:And I think now the hard work be begins where we have to figure out now the business model around how we get compensation back to these content creators and make sure that folks like you who are who are creating real original content can continue to be compensated for the hard work that you're doing.
Speaker 1:Yeah. Well, we used to joke saying that the the labs are welcome to scrape our content because we want to influence the of the model. But no, it's it's a serious issue. We we were covering one of Ben Thompson's pieces about this whole debacle a few weeks ago and Yep. It was funny because at the time we were like, this is There's so many different stakeholders here who could possibly try to figure out a solution Yep.
Speaker 1:To this problem and I obviously It's you guys are a key player in this and you have the scale in order to kind of make changes happen. Yeah. Can you Yeah. Can you, I guess, like break down more kind of like the the kind of the market structure between and and how you see this actually working out and who
Speaker 2:really have been done in over the past year? Because I know, didn't News Corp do a bespoke deal with OpenAI for that exact thing? It sounds like you are more equipped to kind of handle, like, the longer tail, but also some of the bigger publishers. So talk to me about kind of the state of the art of what those deals look like when they're one to one and then what things might look like going forward.
Speaker 3:Yeah. So I think that, first of all, I I think for some time to come, large publishers will do deals with large AI companies Mhmm. Where there might be places that people need help or either small publishers or small AI companies, you know, and and figuring out what has to happen, there. But think even in the case of places where deals have been struck, what the challenge is is, you know, someone like OpenAI is paying a lot of publishers for their content and doesn't actually object to the the basic idea that they should pay for the content that they're using. But but they do object to the fact that they're paying where all of their competitors are getting content for free.
Speaker 3:Sure. Any market that exists has to have scarcity. And the problem, the reason why there hasn't been a market in this place space is that there isn't scarcity. And so what changed yesterday is scarcity was in introduced really for the first time. And I I think the closest analogy is if you think back to, you know, before iTunes launched, we're all downloading music on Napster and, you know, all the the free pirate services.
Speaker 3:That's effectively how the AI companies are taking data from any content creators today. And what you need is an iTunes. You need someone to come in and say, okay. Let's provide a way where people can pay for that content, and they can go back. Now now that's evolved over time.
Speaker 3:I think our first version in the marketplace will probably be relatively naive, and we'll figure it out.
Speaker 1:Night we
Speaker 3:didn't know it's paying 99¢ for songs anymore. We've moved to something that's closer to a subscription model like a Spotify. And and and I think that that's what what we will evolve to have over time. And and if we do it right, you know, I think that we can have a large number of sellers of content, obviously, but also a large number of buyers of content, both the big sort of general purpose models, but then also very specific models. And we've gotta make sure that new entrants can come into this market and have have a vibrant way of of participating and competing.
Speaker 3:And so I think that for now, most of the deals will be one on one bespoke deals between publishers and AI companies. You'll need to have some way of enforcing those deals and making sure that if you're charging someone, they can get access, but their competitors can't. And then over time, I think we'll develop something that looks much more like a robust marketplace where content providers can set sort of what their price is. There can be a bid for maybe getting that that content exclusively for some period of time or or or whatever else. And that's gonna develop over over the next over the coming months.
Speaker 2:Is that the correct I I is that the correct model to think that the the content producer would set the price? I mean, that's certainly what happens on Substack and, you know, the the The New York Times, The Wall Street Journal set their price. But I've always thought that this might evolve a little bit more like YouTube or like Spotify where there is a pool of dollars that are going into ChatGPT subscriptions. I personally pay $200 a month. And occasionally, I fire off queries that probably land on The Wall Street Journal or The Financial Times.
Speaker 2:And I would be happy for them to send 10¢ or a dollar or split off 50% of what I'm paying. So you have a $100 to of, you know, parcel out in the pool, and then you see how much inference pulled, what data from what what sources, and and kind of have it all be driven by the, like, kind of the same volume like, the volume algorithm that you see on on, on YouTube or Spotify. Does that seem like kind of what the long term, outcome might look like? Or do we need to also get to some sort of, like, ad driven marketplace? Because that's ultimately where YouTube how YouTube prices these things.
Speaker 3:Yeah. You know what? I think it's gonna be I I think that we there's a there's a lot that we still have to figure out. I I I, last week, traveled up to Stockholm to meet with Daniel the the the founder of of Spotify. And and it was, you know, it was really it it was interesting.
Speaker 3:He said, you know, the the ultimate model that Spotify settled on, I think it's I don't wanna put words in his mouth, but but it was basically like it was it was sort of the most naive of all of the different options that he had come up with. And it and it is works as it is a pool of funds, then they divide it up based on basically how many minutes of of content you you consume, and there are different rates for music versus podcast versus audiobooks. And and and was fascinating to to see. So you could imagine a version where Cloudflare effectively negotiates on behalf of all of the content that sits behind us with the big AI companies. People can opt in or opt out of being a part of that pool.
Speaker 3:The more content that's part of that, the more valuable it is to the AI companies. And then we would look at how we could split that up across how much crawling is actually done across that. I think one of the real keys will be how can we give hints to the AI companies on what is the content, which is the most valuable to them. So for instance, if Taylor Swift releases a brand new song and maybe does an interview about it, that's incredibly valuable content if you're a chatbot for teen lone lonely teen girls. Right?
Speaker 3:On the other hand, it's probably not so valuable if you're sort of a chatbot trying to be the world's best doctor. You know, may maybe there's some value in in sort of bedside manner, but but largely, you know, that's not gonna be a big deal in your in your care. On the other hand, if a research study comes out on acetaminophen's effects on on, you know, different types of chemotherapy, Very little value for the chatbot for teen girls, but incredibly valuable for the doctor. And so what we have to do is actually, I think, on a on a LLM or a AI model by AI model basis, be able to give them signals back to say this is the sort of thing that you should be paying attention to, that you should be indexing, that you should be actually scraping and paying for. And and the the same way that in, you know, the music industry, we've got reviews, we've got different types of music that that people are you know, that you might be in the country or you might be in a classical, And and and it kind of allows you to compartmentalize that.
Speaker 3:I think that whole ecosystem has to develop. But once that does, something very much like Spotify could be the right answer long term. And again, I think we're in a unique position to pull it together.
Speaker 2:Rudy?
Speaker 1:Talk briefly about stablecoins. I remember in this Ben Thompson piece, he was the people have been suggesting this idea that stablecoins could be some part of the solution to to put your backbone for a new business model for the internet. At the same time, while I'm bullish on stablecoins, someone like a Cloudflare can set up the infrastructure to just use traditional financial rails to process payments. So I'm guessing that it's not part of of of what you're
Speaker 2:This was Ben's reaction to the the original sin of the Internet was advertising and this idea that Marc Andreessen, when he built the browser, didn't build in payments because it was this multi party discussion to figure out how to actually integrate payments into HTTP. Didn't happen. The first MCP spec, that's the model context protocol spec for AI agents to interact with each other, doesn't include payments, but he was kind of saying that it might be on the horizon, but would love your take.
Speaker 3:Yeah. You know, I think, the answer doesn't have to be a hundred percent one or or the other. And so I would guess that there are there are gonna be, very traditional kind of traditional, financial rails that will be ways to pay pay people out. But there will also likely be something that is blockchain based or or stablecoin based. And and, again, I think we're looking at all of the different providers that are in this space, including potentially creating our own stablecoin that would be part of how these these transactions, you know, take place.
Speaker 3:And I think you're exactly right that there's a natural extension from what we're doing here to how we figure out around what the payment rails look like for MCPs. Because as your agent is going around interacting with things, that's also going to be something that is is either, you know, charged for or that you that you actually pay get paid to do. And and there's gotta be a way for those those transactions to take place. And to the extent that you can reduce the transaction costs for those transactions as far as possible, then that's that's a pretty interesting, way of of of of being able to, process, you know, very high volume, low dollar amount, transactions. So I think that's right.
Speaker 3:The my only one quibble is that I think that the original sin of the Internet is not that it didn't include payments. That it was that there was no privacy built into it, your IP address reveals far too much about you as and who you are. We don't even have
Speaker 1:to get to cookies, but that's a
Speaker 2:No. No. We totally can.
Speaker 1:What about we we we've talked about content creators, publishers. What about the the apps of the world, the Ubers, the Instacarts that actually have really meaningful advertiser business, you know, businesses built on top of them. Do you expect there to be any type of of this functionality rolled out to them over time or or is that something you think they're thinking about quite a bit? Because if I can go into ChatGPT and that's my default daily assistant, let's say in a few years from now and I'm like, hey, order me groceries and order me this Uber, You know, I'm not in the app seeing ads potentially, you know, being upsold, and and that could be a problem for those types of companies.
Speaker 3:Yeah. Totally. And I think that, I mean, you know, robots don't click on ads. And and so and so the the sort of model that that part of the, you know, revenue stream to support these services has to come from from somewhere. And if today, you know, Uber is able to monetize the time where I'm I'm waiting for a car to come by showing me an advertisement, that that means that they can effectively charge me less for the ride.
Speaker 3:And so it may be that if that ride is booked through an agent instead and they don't get that that advertising experience and again, I don't know enough about, you know, Uber's business model to know how how important that is to them. But if they don't get that, then maybe it is that there's some sort of premium that an agent booked ride receives versus a human booked ride. And, again, I think that that's that that that's just we've gotta figure out what that what that what that looks like. I think that's gonna be less up to Cloudflare. I think it's gonna be you know, our job will be how do we provide those payment rails?
Speaker 3:How do we provide the systems? How do we make it so so that we can have guard rails on as agents interact with applications that are there, that you as the application provider can set those those rules and controls, and then and then agents can interact within within that system. And MCP is is sort of the leading candidate for providing that. But you're you're right that that's a sort of draft version of that that specification, and there are a lot of things that have to, you know, mature in order for that to be something that is the the real kind of agent to agent system that runs that that is likely to run what will be an increasingly AI driven web.
Speaker 2:Yeah. Can you talk about any previous crucible moments for either Cloudflare or just like the Internet history broadly? This feels like a moment where you're potentially trying to I mean, deal with a shift in the in in the overall Internet structure or the incentive structure. But it's a reaction, but it's also an action that should reshape the the the the relationship between different parties on the Internet. Are there different moments in the history of Cloudflare or the history of the Internet that you think we could draw on as historical analogies to learn from, to see how this might play out?
Speaker 3:You know, I think that, you know, the Google really, thirty years ago, defined what was the business model for the web, which was you you create content, search drives traffic, and then you monetize that content through advertising or or subscriptions or or ego. And ego and monetization, not quite the right thing, but you drive value from it in one of those those three ways. And that that's held up for the last thirty years. I I I I think that this is the first time that I've I've seen something where I thought, wow. There there are really going to be very, very, very fundamental changes to the structure of how the Internet works if we move from a search driven model to an AI driven model.
Speaker 3:And and I think that what I hope is that we can actually make this something where what gets rewarded is not what gets rewarded today, which which largely is, you know, who can write the headline that produces the most, you know, sort of inflammatory response
Speaker 2:Yep.
Speaker 3:In in all of us, you know, who who basically drives the most cortisol, you know, gets the most clicks and and therefore the most ad revenue or the most subscriptions. That's that's not a that's not a healthy way of looking at the world.
Speaker 1:I think,
Speaker 3:you know, the alternative is if you imagine that kind of all of the AI models together are a good kind of assemblage of of an approximation on human knowledge. If we can identify where the holes are and then create incentives for content creators to actually fill in those holes, that actually is gonna move humanity forward. It's gonna make the AIs better. It's gonna it's gonna be a much more interesting thing, and that's, I think, how we're gonna we're gonna be creating it. I I can't think in the last thirty years of of it as as seminal moment.
Speaker 3:I think there are some things that are along the way. Think 2016 was a really big turning point year for for a lot of reasons. It was sort of the year that it went you know, technology went from being able to do no wrong to being able to do no right. And sort of rise in populism around the world. You have you have Brexit in in the EU.
Speaker 3:You have the first Donald Trump election. You've got Xi and Modi consolidating power in in Asia, the Filipino election. And I think that that was a point in time where, you know, also driven by Snowden shortly before that in 2015, that that a lot of the world lost faith in kind of The US model of Internet governance. And it wasn't quite ready to adopt the Chinese model, but that's that's definitely been a shift, which is substantial. And I think we're still watching that play out.
Speaker 3:That's that, I think, is probably still remains the biggest threat to the overall Internet. But this shift to AI as well, you know, again, I I think is is is a real challenge, but it's also an incredible opportunity. If if, again, we can make the rewards incentives for content creators not be who can produce the most most cortisol, but who can produce the biggest sort of incremental improvement in human knowledge, that that would be an incredible win and and something that that, you know, I I I don't quite know how to get there yet. Yeah. But I I think yesterday or today and, you know, we took in July 1, took a a real step in in in moving in in that direction and making sure that compensate content creators can be compensated for for really producing information which is valuable to advance human knowledge.
Speaker 2:What do you think about the future of investigative journalism? There's been a big shift in just content creation into independent creators. But a lot of that is actually downstream or separate from the type of work that investigative journalists do. I'm thinking of like Seymour Hirsch hanging out at a local army bar for a year before he gets one scoop that he can write a book about. And he and these investigative journalists, they tend to, you know, John Kerry Rue was on the payroll of The Wall Street Journal for years.
Speaker 2:He was writing stuff, but then he blows the Theranos case wide open, eventually a book and then a movie. And and I and I imagine that with artificial intelligence, the value of a scoop could actually go up because you could use an LLM to read through the clickbait repurposed version of the article to find, wait, they're sourcing actually this person posted it on the Internet earlier. They're the one that actually did the hard work to get the scoop. They should get 90% of the value and 10% should go to the repurposed rage bait version as opposed to the economic model now, which is maybe you get 90% more clicks on the on the viral, you know, repurposed content, and the scooper actually gets 10%. Do you think that's possible?
Speaker 2:Or or how do you think that investigative journalism will evolve?
Speaker 3:Yeah. This I I don't know if this is an answer to your question, but but it but it's yeah. I thought it was I thought was interesting. I as I said, I met with Daniel Ak Sure. Up in up in in Stockholm.
Speaker 3:And and and he told me he said, you know, we were talking about this, and he said, you know, one of the things we do at Spotify is we actually surface all of the different queries that are sent to Spotify that we don't feel like we have a really good response for. So if somebody searches for, you know, I want a song to a reggae kind of beats with and it's all about how much it sucks when your sister steals your car and your dog. Like
Speaker 1:Not to get too specific. No. No.
Speaker 3:No. No. I'm not I'm again, I
Speaker 1:don't know what what what these things are.
Speaker 2:But they're
Speaker 3:people they're musicians who take this list, and they actually write songs based on what people are looking for.
Speaker 2:No way.
Speaker 3:And that that they make tens of millions of dollars a year doing just exactly that. And there's something about that that I think is really beautiful. Yeah. As opposed to the alternative of just, you know, the just trying to do a little more me too of what everybody else is doing, like taking a different twist using signals from the market in order to go find that. So, you know, again, that's not investigative journalism by any means.
Speaker 3:But I think it is actually advancing kind of the sort of good of humanity where it's taking what a place where there's a a missing need and it's filling that missing need. And so I am hopeful, you know, and and relative I mean, I'm a relatively optimistic person. And and I'm hopeful that if we get this right, that we might be on a golden age of of content creation where people actually are rewarded for doing things that advance human knowledge as opposed to just doing things that produce as much cortisol as possible.
Speaker 1:Yeah. The the idea of a knowledge bounty. Right? It's like, hey, there are there's there's groups of people or a single entity online that will just pay you to produce really high quality information around this specific topic. Yep.
Speaker 1:And this the internet always did this sort of organically, but it would just be somebody spinning up a blog or maybe an Instagram account or something like that. And they would just start blogging about something that was niche and then an entire network would form around it and other people would contribute to it. So, I think there's quite a lot of precedent, but it would be exciting to like put that reward out Mhmm. Before and not saying, hey, you have to do this and then maybe you'll get some ads associated with it later. But like, basically, like, the the pool of capital is here, and you just have to deliver that knowledge that that people already want.
Speaker 1:And we know it because they're searching it on LLMs and and things like that.
Speaker 2:Can I throw you oh, sorry?
Speaker 1:Think that the I think I think I'll I'll tell you
Speaker 3:the sort of black mirror kind of dystopian outcome if we don't get this right, which is I don't think that I don't think journalism goes away. I don't think that research goes away. But you could imagine a world in which we go back to something kinda like the Medicis, where there are five big AI companies, and they basically employ each of them, all of the journalists, all the researchers, all the academics to be able to do the research to feed their systems. Because you're still gonna have to have original content. Yep.
Speaker 3:People are still gonna have to be able to produce that in order for the AI systems to, know, fill in the holes in their kind of effective block of Swiss cheese or or that that is that is their model. But but I I think that that's that's a bad that's a pretty bad world where where again and because you then probably have, like, the conservative AI and the liberal AI. And, I mean, all all these things that we've kind of that the Internet kind of broke apart. You could imagine AI is a system that is just this massive consolidator in the future. And and I I think that's a bad outcome.
Speaker 3:And I think a better outcome is if we can figure out how how can we reward people for, again, driving knowledge, but but but not get to a place where all of them have to be employed by by one of the five, you know, big
Speaker 2:Yeah. I I actually talked to somebody very high up at one of the labs who said that was was saying that, like, if you take the total the total salaries of all the journalists in America, it would be a fraction of what the AI labs are spending right now just acquiring data. And so it it's not a financial question. It is a political cultural question. It's interesting.
Speaker 2:Yeah.
Speaker 3:I have follow-up. The argument why I think that and and I've been really positively surprised as we've talked with because we've talked with all the big tech companies, all the AI companies about this. And they and they all like, with with maybe one or two very small exceptions, they all say, yes. We understand over the long term, we have to pay for content. Mhmm.
Speaker 3:And so they get that. What what what's key though is it has to be a fair playing field. Yeah. And that fair playing field, everyone sees that slightly differently. So if you're a new incumbent, you wanna say, well, Google can't be advantaged.
Speaker 3:If you're Google, you have to say, you know, well, we have to it has we have be respected for the ecosystem that we've helped build and flourish, and
Speaker 1:we should be able to, you know, do
Speaker 3:this thing. And so everyone's got a slightly different take on this, but I I'm actually encouraged that that the the dollars are there, that there is an acceptance that this is is, is something that needs to happen. And that if you if you if you ask them, everyone says, yes. We need to do this as long as you can create a level playing field.
Speaker 1:Mhmm.
Speaker 3:And, again, that's where I think our role comes in is how can we create that level playing field? How can we create scarcity? And then how can we make sure that content creators are being compensated for the the hard work that they're doing?
Speaker 1:Yeah. Zooming out just for a second, what is the state? How's the Internet been for the last few weeks? It's been a busy month in or last month in geopolitics. I'm and I know that makes your job a bit harder or at least I would imagine, things get a little bit busier.
Speaker 3:Keeps it interesting. I mean, it's whatever you see sort of in in a in the sort of kinetic side, the physical side of a conflict is is usually replicated in the in the cyber Mhmm. Side of the conflict. And so, you know, we as the hostilities, ramped up between Israel and Iran, first of all, saw very clear signals that that something was coming ahead of time, which is it's interesting how there's sort of a digital residue, which shows when there's going to be kinetic action taken. And so and so we were we were watching that that pretty carefully.
Speaker 3:The big attacks targeting both Iran, one of Iran's largest banks was hacked by what looked like a a group of is Israeli hacktivists. The largest cryptocurrency exchange in Iran was hacked, all its funds were drained. Right. Again, looking like it was either by the Israelis or or Israeli sympathetic attackers. Iran has has tried to do the same thing against against Israel.
Speaker 3:Israel's cyber defenses are much stronger, but we're starting to see that Iran is targeting other other largely US, financial services firms, critical infrastructure firms, to try and see to sort of try and strike back from what what is you know, how do they strike back against The US in a way that that that is harmful but doesn't start World War three? And I think that increasingly, unfortunately, cyber will be a big piece of that. And so we're, you know, we're we're we're doing everything we can to to stay in front of that, make sure that anyone who needs it has has protection, and that we can keep keep the lights on everywhere in the world.
Speaker 2:Last question for me. Go for it. There's a number of larger overarching tech narratives. I'm interested in if you're losing sleep over any or tracking any in particular focus. The AI talent wars and kind of pay inflation for top performers, is that an issue or something you've been tracking or the difficulty to build larger data centers and infrastructure, the GPU short of the chip wars?
Speaker 2:Any any of those topics kind of particularly relevant to you or your business or or kind of keeping you up at night?
Speaker 3:Yeah. You know, I think we're we're not trying to build a foundational model LLM. So so we're not we're not as much competing, for the the bleeding edge AI researchers. I will say that we've I've been really amazed at at both from an academic side and then also just, you know, pure talent side. How many people are interested in working on that problem of something like, how do you score content in order to be able to create a a marketplace?
Speaker 3:And so and so that that's something that's been, you know, pretty exciting. We're we're very excited about the the the people who are coming to apply to work for Cloudflare to to work on problems like that. And, like, today has been a record applicant day for us.
Speaker 1:It's awesome.
Speaker 8:On the
Speaker 1:on the
Speaker 2:Congratulations. Records. Sorry.
Speaker 1:I hit the air air horns.
Speaker 2:Air horns
Speaker 1:for you. Records. Applicant day.
Speaker 2:But it's good. It's good news. And
Speaker 3:then, you know, I think, you know, we we've we we we tend to put a little bit of equipment in a lot of places. And so that we don't tend not to have kind of massive multi
Speaker 2:Yeah. You're not running into, like, power constraints or rare earth element constraints or water. Right? Constraints. We
Speaker 3:we we do in but in in in kind of a micro micro way where Sure. You know, we put GPUs at the edge of our network. We have to live with a power envelope that we're given by an ISP. And so Sure. We're doing things to try and figure out how to just get the best power efficiency out of the the GPUs that are there.
Speaker 3:The answer to, you know, more and more need of GPUs can't be everyone has to turn up their own nuclear power station. So so I do think the place where we're pushing suppliers and AMD is doing some really interesting things in this space. Qualcomm is doing some interesting things in this space. The fruit company down in Cupertino is doing some interesting things in this space. Or how do you focus on, yes, performance, but performance per watt?
Speaker 3:And and we've seen this game before with with Intel saying, oh, that doesn't matter. Like, just just get the most performance possible. You can water cool things, all kinds of things. That that tends to not be the winning strategy over the long term. And so we do think that there will be a renewed focus on just energy efficiency around GPUs, and and we're really pushing that in a way that because because, again, we can't build our own own data centers in the business that we're in.
Speaker 3:And then and then chip shortage the chip shortages are funny. Like, it's there's never been a chip shortage in any time in the history of of silicon that doesn't turn
Speaker 1:into a glut. Because it's Hey. But this time it's different. Yeah. This
Speaker 3:time this time is totally different.
Speaker 1:So I I think that
Speaker 3:I think you're gonna see both. You're gonna just see shifting demand Sure. That's there and and and and a lot more. It's NVIDIA is not gonna be the only chip supplier of GPUs. There are some really, again, great great other providers that are out there.
Speaker 2:Yeah. Well, thank you so much for stopping by.
Speaker 1:The conversation. Yeah. Congrats on launch and come back on again
Speaker 2:soon. Yeah. Yeah. Thanks for Congratulations. Coming out.
Speaker 2:Good luck filtering through all those job applicants. We'll talk to you soon.
Speaker 1:See you.
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Speaker 1:I'll be right back and kick it off. Yeah.
Speaker 2:We'll bring in Luca from Pudgy Penguins. We're gonna talk about what's going on with the market structure built, what's going on with the Genius Act, what's going on with his business. So we're very excited to catch up with him. It's his second time on the show. He came on during Crypto Day, fantastic conversation.
Speaker 2:And now, we're excited to have him back on to talk about the state of crypto. How are doing, Luca? Good to see you.
Speaker 1:I'm doing good. How are you doing?
Speaker 2:I'm great. What is that behind you? The the igloo. Is this, part of the Pudgy Penguins expanded universe?
Speaker 6:Yeah. The holding company that holds Kaji Penguins, Abstract, and a couple other companies we've got to announce that we've acquired is called Igloo. Everything lives within the Igloo.
Speaker 2:That makes sense. There you go. Has there is there a is anyone riffing on the meme of like selling ice to an Eskimo yet? I feel like that's you know, I know that you're good at at doing deals with old line retailers but can you sell ice to an Eskimo?
Speaker 1:I can I can sell ice to an Eskimo? I can sell fish to a penguin.
Speaker 6:Can sell land to a mammal.
Speaker 2:Yeah. What is what what is the latest? I mean, we caught up on Crypto Day a couple months ago. What's the latest in your world? How are you feeling?
Speaker 2:I mean, we've been in this kind of kangaroo market for the high level l ones. Prices are up. Prices are down. Everyone's kinda waiting for the next big crypto catalyst, but maybe that's the Genius Act, the Market Structure Act. Maybe that's legislation.
Speaker 2:But what else are you tracking? Stablecoins have been really hot with the Circle IPO. What's been top of mind for you?
Speaker 6:Yeah. Our big thing at the Igloo is actually, like, we feel like we are one of the most well positioned organizations for consumer and culture in crypto.
Speaker 1:Mhmm.
Speaker 8:And it was actually a
Speaker 6:little fascinating because I actually felt like I missed a piece in terms of what I felt like was needed for this consumer crypto revolution.
Speaker 1:Mhmm.
Speaker 6:And I think it's really prevalent around this genius act, which is I think you're gonna see crypto breakthrough mass off the backs of stablecoins. Because if you look at all of the consumer crypto applications and really their barrier and bottleneck, You know, I I I thought it was product builds, and I do think that is true to a certain extent. But I think the product builds are a byproduct of the current environment that rewards builders for building in. Mhmm. And I think that gets completely flipped on its face when average consumers are now transacting in dollars that are on chain.
Speaker 6:It opens up a whole new vertical of product builds that I think are more oriented around maybe providing a a service or an experience and not providing a scheme to return your dollars 2 or threefold as, like, a financial mechanism for you to kinda speculate on.
Speaker 2:Yeah.
Speaker 6:And so I think, like, the genius act is quite literally going to kick off the consumer crypto revolution. And that is really apps that are built around, I think, the best properties of blockchains, which is, like, on its face. I think a lot of people listening specifically around your audience, like, maybe look at blockchains as like maybe speculative vehicles or like programming languages. But I think the best frame to look at it as is like a blockchain is a censorship resistant version of a Stripe or a PayPal that taps into global composability and global liquidity, which basically means that, like, anybody with an Internet connection can transact, you know, using these payment rails without some sort of intermediary. And that at scale, if you actually understand, like, consumer product builds, know, every every guy that I know that's building an AI or building consumer product goods at one point has had their account locked up or their funds withheld or are paying a huge premium on these transactions, whether it's 3%, in some cases, five to 8% if it's a higher risk product.
Speaker 6:And I think this you know, blockchain is very useful when you think about removing that middleman for those applications. I think we've just been pigeonholed as an industry around, like, these builds that are solely around speculation and making the end user more money. Right? Like, I go buy this. I should return a two x or a three x or a five x.
Speaker 6:And I think we're slowly transitioning into more traditional builds where it's like, hey. Consumer crypto is really around this idea of removing these these layers that I think today make it so hard to build, you know, fun and robust applications that are, you know, segmented either geo, from a geography perspective, whether it's certain regions, etcetera. And and I think it's kinda transitioning to, like, more real product builds that I think more serious entrepreneurs are interested in. So the Genius Act, I think, is gonna change everything because the the floodgates for stablecoins are here. And I think that was the missing piece to the consumer crypto revolution that I think crypto very much desperately needed.
Speaker 2:Okay. I want your reaction to this older analysis by Ben Thompson during the first NFT boom, where he was talking about the value of NFTs as a as a as a disintermediated membership, program, essentially. So, basically, the the the link I see to, Stablecoins is if you have a community, and you're a creator, you might not want to have someone have a super fluctuating financial interest in your community. And so when I think about the folks who are big on Patreon and it's $5 a month or $10 a month, but when I pay $30 a month for The Wall Street Journal, I get access to wsj.com. I can comment there.
Speaker 2:There 's a bunch of other things that you could imagine, but I can't really go around the Internet and carry my Wall Street Journal login to their YouTube account and get custom YouTube videos. Like, the videos have to be embedded on the Wall Street Journal website. So it can't really follow me around the web. And Ben Thompson was talking to Adam Masary at Instagram about this idea that Instagram might be open to a bring your own membership type of integration with Web three. And so I I I think that we were almost there, but there was no one that really broke out into mainstream adoption where both you you gotta get YouTube and you gotta get Instagram to say, yes.
Speaker 2:We are we are, you know, integrating this membership card as a native as a primitive on our platform to allow, you know, creators to create, you know, subscription level content. Instead, we wound up with every social media app has their own subscriptions. So I can go get YouTube YouTube premium subscribers who subscribe to me, pay me $5. Then on x, I can have subscriptions $5. They subscribe to me there.
Speaker 2:But you gotta follow follow me around. You can't just subscribe to me as the creator. That felt like something that Web three could do, but we weren't quite there with stablecoins. Is that something you think is a reasonable dynamic that could play out post Genius Act? Is there still some sort of countervailing force where the big tech companies might just want not wanna give it away because, hey, they're earning a cut on those membership revenues directly.
Speaker 2:How do you see that playing out?
Speaker 6:They're they're definitely not gonna wanna give it away. Right? Like, those guys are pretty good at at capturing and trying to keep revenue. I think, like, one of the big, you know, bull cases around web three is, like, these universal logins and identities, right, that, like, follow you all over the Internet. Yep.
Speaker 6:Like, that that's gonna take a lot of pieces to put together, but, like, things like the Genius Act, right, and everyone transacting in stablecoins makes that so much more possible and feasible.
Speaker 1:Mhmm.
Speaker 6:That I don't know of anyone who's really mastering that build just yet. And to the point about NFTs, I think there's two bull cases for NFTs. One, which is the one that you referenced, which is access. Right? And that is a more mundane, probably less exciting, but probably bigger TAM because you could replace the entire ticketing industry and OnlyFans and Patreon, like you'd mentioned
Speaker 2:Yep.
Speaker 6:And info. Right? The WAP guys can go and plug that in. So I, you know, I I I I think there's that. And then there's also the TAM of digital collectibles, which is, you know, physical collectibles today have a total addressable market of about 600,000,000,000.
Speaker 6:1% of that 600,000,000,000 is digital. Yet digital collectibles have a slew of pros that physical do not. Right? They are they have no friction when buying or selling. They have no insurance issues.
Speaker 6:They have no storage issues. They have no inauthenticity issues. Right? And and so I think there's a there's a gap in value to capture in terms of you know, in a $600,000,000,000 market, it's kind of like gold to you know, physical gold to digital gold. You know, Bitcoin's captured 10% of it.
Speaker 6:I believe that digital collectibles are you know, whether you argue what side of the spectrum they're on, they're not 1%. They shouldn't have 1% of that market share. And so I think there's gonna be value to capture between that spread.
Speaker 1:Mhmm. But the other the other the other thing that stands out to me as a as just an observer is that I think when people are frustrated with the NFT market broadly, it's frustration with 90 it's basically saying like, yes, 99% of attempts to create new IP are gonna fall flat because it's really hard to create IP that is actual like, it's easy to create IP. It's hard to create valuable IP.
Speaker 2:Yeah. Most people don't period in Hollywood. Yeah. 90% of scripts in Hollywood don't go anywhere.
Speaker 1:Fall flat.
Speaker 2:But 1% of
Speaker 1:the crypto scripts They they just hit the chain and they're they're they're know They're already in stream. There should be some value Yeah. Tied to them. And so I think it's just very possible that that NFTs become bigger and bigger and bigger Mhmm. But it's just a handful of really select projects that that you know become these sort of centers for gravity and get developed in all these different ways.
Speaker 1:But you're not gonna have a 100,000 projects that each have movie offshoots, video game offshoots, you know physical toys attached to them and that's exactly the way it happens in the real world where Oh. People people in Hollywood like you said, will spend their entire life trying to develop a a cartoon that actually turns into a franchise and many people will try and fail.
Speaker 2:Yeah.
Speaker 1:And the difference with crypto is like the expectation is immediate value creation and Yeah. Yeah. I just don't I don't see that happening.
Speaker 6:Yeah. The the tokens whether it's fungible or nonfungible, there's a superpower behind it. It's a kryptonite, and it's a superpower depending on how you harness the power. The financial alignments can be your greatest weapon or your greatest weakness.
Speaker 2:Yeah.
Speaker 6:Right? And how you harness that. Right? Like, us being able at Pudgy to galvanize this group of 10,000 people to go and hit algorithms. Our big breakthrough at Pudgy was I told all of them that Walmart had turned us down, that we were gonna go live on Amazon, and that I needed everybody to buy.
Speaker 6:And if they bought it, right, all at the same time, we would trigger Amazon algorithms. We'd be number one across all of these different categories. And that and then give me a lot of leverage to go do a deal with a major retailer. Well, what happened was exactly that. We launched within, you know, thirty minutes of launching on Amazon.
Speaker 6:I'm I'm number one across basically every consumer product category, every plate category. And then and then Laura Rush, who was the head of merchandising at the time at Walmart, pinged us and said, we wanna stock you. You got three months. We're gonna put you in a pallet in the center of the store in 2,000 locations in quarter four. And that was, like, the big paradigm shift for Pudgy where people are like, oh, shit.
Speaker 6:You know, these kids, you know, came out of nowhere and did it, and and the rest is history. We've basically, you know, carried that momentum up until where we are today. But that was our big breakthrough, and that was because, I think, of that alignment and that incentive, everyone was incentivized to go and create this headline in this moment for Pudgy. At least the core community members who had, quote, unquote, bags or collectibles or tokens within the ecosystem. And if you can harness that and if you can respect that, it it can be a superpower.
Speaker 6:It can be your greatest kryptonite as you've seen a 100 times over, and there's, you know, plenty of horror stories which we won't get into.
Speaker 2:Yeah. Bit of a wild card question, but I don't know if you saw, OpenAI has a deal with Mattel to make a chat GPT enabled Barbie potentially. We don't really know the shape of the deal. How many
Speaker 1:LLMs can fit in a Pudge Penguin?
Speaker 2:Yeah. Yeah.
Speaker 1:So That's what we wanted to
Speaker 2:do.
Speaker 1:Mean, we actually lot of LLMs in this
Speaker 2:Yeah. I mean, you're you're you're in some ways in the toy business and what is the next generation of toys look like? What are you optimistic about? What will change? What technologies do you think will be integrated?
Speaker 2:What considerations will drive actual success instead of just like, yeah, we slapped AI on it. Like we tried that with with every toaster having Bluetooth. Didn't really work out, but the Nest Thermostat pretty fit pretty pretty popular. So yeah. What how does this play out?
Speaker 3:It's a great question.
Speaker 6:I saw this coming two years ago and I basically jumped for joy when I thought of it and I told the guys because for those who are not familiar, the toys that we sell have the QR codes. So it's not just like selling toys that are
Speaker 1:Mhmm.
Speaker 6:You know, IP related. We're actually putting NFTs in the hands of regular people because you buy this toy, you scan this QR code, you redeem these NFTs through a gas experience. So it's like a whole crypto funnel, which is basically our product, our our physical toys. Yeah. But I jumped for joy because I was like, dude, what if these these characters that you bought and these NFTs that you created then became like your AI homework or helper.
Speaker 6:Right? And this was an idea I had two two years ago. And Lorenzo, our president, was like, you know, dude, you know, if there's a point zero one percent chance this home worker helper tells a kid to kill himself, it's not worth it because we'll get deshelled, and it'll create a bunch of chaos. And we weren't, you know, AI guys. But we actually are doing a toy with Curio who recently raised pretty big over in the whole, you know, AI cryptos or AI, you know, startup Twitter land
Speaker 1:Yep.
Speaker 6:X.comland. And and That old place.
Speaker 1:Yeah. We're we're that place. We're familiar. We've dabbled. That's great.
Speaker 1:Yeah. How who's the who's the musician that's involved with that?
Speaker 2:I don't know. I mean, I I yeah. I'm I'm super bullish on this. You know, I have kids and and I mean, was thinking about this with the RabbitR one, like, yes, the safety and security stuff is really, really important. But safety interpretability research and the ability to run an extra LLM just filtering is this a harmful response from the LLM.
Speaker 2:That seems to be getting better and better, and and and I'm pretty optimistic about having a a watered down LLM that can't explain everything, but is really good at identifying plants and animals, that's gonna be a big product for kids, I think.
Speaker 1:So Good.
Speaker 2:I'm very The
Speaker 6:tricks of CPG is all about providing value for the customer. Like Walmart will tell you if you're
Speaker 3:trying to stock, like, they're always optimizing for the best deal.
Speaker 6:And so my mind frame is, like, how much bang for your buck can you get from this purchase? Well, if you can buy it and redeem some NFTs, that could be worth some digital dollars. Maybe you recoup your cost on the physical item, and then it's a net free good. And then maybe you can go in and and ask it questions and now it's a value add. And so I think this stuff is just changing.
Speaker 6:It it's a complete paradigm shift. I think I think no one's really ready for how I think the world is going to change. But in terms of a value add, you can plug in an LLM to a lot of physical products, just alpha for the room, you know, and and create a ton of value for your end consumer which is ultimately your goal as an entrepreneur.
Speaker 2:That's awesome. Awesome. Well, thank you so much for stopping by.
Speaker 1:Appreciate your perspective.
Speaker 2:Gotta have you back at topics. When there's more breaking news, and we'll keep we'll keep catching up with you. Good to see you, Luca.
Speaker 4:We'll talk
Speaker 1:to Luca. Have a good one.
Speaker 2:Bye. Really quickly, let me tell you about adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 2:If you're gonna be in Walmart, if you're gonna be selling toys, you gotta get on adquick.com. Yeah. Anyway, our next guest is here. Julia. Hey.
Speaker 2:How are doing?
Speaker 5:Doing well. I like the intro music.
Speaker 2:Yes. Welcome to the show. Welcome. Are professional newscasters, as you know.
Speaker 1:You're one of a handful of people in the entire world that has actually visited the Temple Of Technology.
Speaker 2:You've been into the
Speaker 1:Temple Of Technology?
Speaker 5:The capital of capital.
Speaker 2:Yes.
Speaker 1:That's right.
Speaker 2:Give us the latest and greatest in your world, new, new piece in Palladium. What was the thesis? What inspired it? Take us through the high level of the piece.
Speaker 5:Yeah. So it's something I've been thinking about for a while. It was actually sort of inspired by this freshman at Stanford who I was talking to in the library, very, very sweet girl, she was like, what are you doing post grad? And I said, well, I'm working for this magazine called Arena, they wanna do books, so I'm gonna be helping with that, I'm super excited. And she said, that's a nineteen thirty ass job.
Speaker 5:And I was like, well, why is it a nineteen thirty ass job? Well, it's like, you know, most people are like consultants or software engineers, but you're making like this very real thing that's like you can touch. It's like, yeah. Like, maybe it is a nineteen thirty ass job. I guess people a lot of people in the nineteen thirties didn't have jobs, but there were some people who were writing books
Speaker 2:Yeah.
Speaker 5:And publishing books. So I was sort of thinking, it's like, well, how do we get to this point where it's you it is sort of like this weird thing for people to be doing something real and tangible. And then I think it's also just, you know, I sort of feel like graduating from Stanford in 2025, in some ways I'm like, out on the last chopper out of Nom. Like, ChatGPT was only, like, super ubiquitous, really, my senior year. Like, sometimes you just walk into the library and everyone had ChatGPT on their screens, and it was just you go to section and the section leader would be like, please, like, I know it's really easy to use AI, but it would really make me sad if you used AI to write your weekly reading response.
Speaker 5:And then just sort of sort of just, like, all these things that were just, like you you felt like you're more practicing, like, acting like a college student because just AI was just making a lot of the day to day, like, obsolete. Mhmm. And it's also just like, there's a pretty good chance that, like, AI is a better writer than I am. There's a really high chance AI will be a better writer than I am in five years. And I think it's like, well, if I wanted to be as a writer and that's going to be obsolete or AI is going to be better than me.
Speaker 5:Or like, if my friends who want to be lawyers are just going to be replaced by Harvey and my friends who want to be software engineers are going to be replaced by cursor, like what does the future look like? And I think I was also guided by this conversation I had with a wonderful professor at Stanford, Jennifer Burns. She's in the history department. She has done biographies of Milton Friedman and Anne Rand. I took a really great class with her in the fall called Thinking About Capitalism.
Speaker 5:And I've had a lot of conversations with her just because I found her work really interesting. And she asked me, she's like, you know, you're sort of like pretty enmeshed in like the current, you know, right wing intellectual moment, who is like the defining like economic thinker? And this was back in like October, November, and I was just totally stumped. And when I sort of published the piece with Palladium, I sent it to and I was like, this is sort of my answer to like, what is the economic thought of Gen Z or really of the twenty first century? And it's economic nihilism.
Speaker 2:It's nihilism. So, yeah, are we cooked? Where are you most bearish? It seems like you're you're you're worried about a lot of different trends. Is is is capitalism cooked?
Speaker 2:Is democracy cooked? Is technology Well, I'm
Speaker 1:curious to get an anecdotal job market kind of It sounds like we got breakfast last week and you were saying that sure somebody some of your classmates got offers from what was it, like, TIMU or something Oh, yeah. So To work in, a warehouse and they were all, like, super
Speaker 5:It Shein. Yeah, was Shein. And it was, like, become this, like, Shein warehouse manager. And I was, like, actually, that sounds like a really interesting job. Like, if I didn't have something lined up, maybe I would apply to be, like, a Shein warehouse manager.
Speaker 5:And there's this app called Fizz, which is sort of, like, Yik Yak two point o. It's an anonymous forum for college students at particular campuses, and people got so mad that Shein, like, dared or asked Stanford students to stoop to their level to become a warehouse manager. And I think there's it's it's sort of like a paradox because Stanford students believe that they are they are entitled to certain jobs, and this is true of sort of like all IVs or elite universities. Universities. But there are a lot of jobs that people aren't willing to do.
Speaker 5:And I sort of wrote in the article for Palladium, it's like the line used to be, well, the hardest part about Harvard is getting in. And now I would say the hardest part about Harvard is getting a job that your peers deem elite enough to not feel any, like, social backlash or to feel comfortable in the rat race. And I think it's Peter Churchin, who's a phenomenal historian, has written a lot about how conflict rises in societies when there are more elite aspirants than there are elite positions. And I think, especially as class sizes at these schools are expanding and the Internet is democratizing access to education and democratizing access to power in some ways, I think that these schools are in a really tough place because they're it is not is no longer a guarantee that you can go to Stanford, you can go to Harvard, you can go to Yale and be upper middle class.
Speaker 2:Is are are there really not that many jobs at McKinsey, Bain, BCG, the Wall Street banks, the big tech companies, the PMs? It feels like we're we're hearing a lot of nervousness about job loss and not hiring, but it feels like also McKinsey's printing a bunch of money just writing, you know, slide decks about AI transformation in the Fortune 500 or has the actual shift in what is a high status job changed? And and if it has, what what is the high status job? Is it entrepreneurship now? Is it YC?
Speaker 2:Where where are we sitting with that?
Speaker 5:I think it's I think it's VC. I think it's entrepreneurship VC.
Speaker 2:They want to go straight to venture capital?
Speaker 5:Yeah. This is the golden ticket.
Speaker 1:Kidding. We support venture Yeah.
Speaker 5:I think, like, anecdotally, it seems that big tech is like, that used to sort of be like, okay, everyone told you to study CS, and if you study CS, you'll have like a 200 k
Speaker 2:Yep.
Speaker 5:Post grad salary. And now that's not really happening anymore. Like, yeah, it's, I think there's definitely a shortage of or especially in, like, more big tech firms
Speaker 1:Yeah.
Speaker 5:Which offer more security than, like, startups.
Speaker 2:Sure.
Speaker 5:It's a lot harder to get those positions now than five or ten years
Speaker 8:ago.
Speaker 2:Do you think that's more of a hangover from COVID and kind of Elon showing that he could run x at one fifth the headcount versus truly AI disruptive to, like, replacing workers?
Speaker 5:I think it's probably both. Okay. I think there's like the zero well, there's a time in 2021 where just people were throwing money at anything that they could throw money at. And I think we're in very different times now. But I think it I'm I I think about it less in terms of just like, oh, what's the market like now?
Speaker 5:And more in terms of like, how has the social contract changed? Mhmm. And I think for a lot of elite college students, the sort of social contract was for a time like, okay, if you study like these three things, then post grad you will have like, and you don't fuck up in college. You'll have, like, pretty easy access to these really important high paying jobs. But I think we've seen now that it's, like, maybe a job at Goldman Sachs as an analyst isn't that important.
Speaker 5:You're just, like, changing font colors for a hundred ten hours a week. But also just we're seeing underemployment rates in these sectors.
Speaker 1:Mhmm.
Speaker 5:I think the computer science underemployment rate is one in six, which is insane considering that pretty much every authority figure I had from ages, like, eight to 18 told me to major in computer science.
Speaker 2:Yeah. Do you Sam Alden wrote this post about the soft singularity. And his kind of thesis was that if you went back to 1930 they would think we all have fake jobs and so we will maybe create new fake jobs. Are you optimistic about that at all?
Speaker 5:Yeah. I don't think the fake jobs thing is necessarily going away. Like I'm in LA right now. That's where my parents live, and every third person is an influencer. So it's not hard for me to see.
Speaker 2:For the influencers. Yeah.
Speaker 1:The hardworking content creators.
Speaker 2:Content creators.
Speaker 5:It's very hard to go and
Speaker 1:get more Slaves of the algo.
Speaker 5:Yeah. But I think what we're gonna see is just there's a lack of or what we're sort of seeing, it's like there are there have been fake jobs for, don't know, maybe probably not an eternity, but for, like, recent history. And what we're going to see is just the fake job that just the work becomes more and more meaningless. Mhmm. It's like, don't know what the fake jobs of, like, five years, ten years from now are gonna look like.
Speaker 5:But I think what like, a key thesis to my article was that, like, Gen Z is simultaneously, like, hypercareerist, but, like, there's no career at all. It's just sort floating around from one job to the other. And because there's so much, like, hopping over from one company to another, one firm to the next, there's never really any, like, real expertise that's developed, and there's this shallowness in the work. I think it's like my parents, especially my dad who just retired, he worked at one firm for like the vast majority of his career. He was like an expert in that field.
Speaker 5:And that wasn't anomalous for people of his generation, boomers at all. But I think now with Gen Z, it's just like, okay. You have one job for six months to two years, and then you move on to the next thing. And these big companies have, like, incentive structures built in, like McKinsey that has search time. It's like, okay.
Speaker 5:Well, we're gonna after one year, we'll give you six weeks off so you can go and look for another job. And I think in sort of doing that, it's admitting that it's a fake job because it has no real tie to its employees and no real tie to their employees sticking around. Yeah. It's it's launching pad.
Speaker 1:For some
Speaker 2:of the new grad roles Fascinating. At least the big three, they they'll very much encourage you to go take two years off to do an MBA, which feels like I don't know. It just feels odd to me to, like, lose an employee that you could be just nurturing internally and growing and stuff. What's the reaction on campus been to the big AI trade deals, these massive offers? Our people most of those folks who are getting a $100,000,000 offers, they have PhDs.
Speaker 2:They're published papers. Maybe the new advice should be don't just get a CS job and then or a CS degree and then try and go work in big tech. Maybe it should say, actually, stick in academia longer.
Speaker 5:Yeah. I I don't know. I can't say just because, like, I'm not a CS major. In fact, I never took a single CS class at Stanford. Yeah.
Speaker 5:But I also think the the people who go into CS PhD programs just, like, love the subject. And I think, like, the Stanford in particular is very good at getting people to major in computer science because they just teach the intro courses very, very well. But I think that's a very different demographic. The people you just sort of wanna check out for college have, like, an easy ish major that a lot of people around them do so they can have a cohort versus the people who are, I'm really into systems. Like, this thing is, like, if you met someone at Stanford who was, a systems concentrator rather than an AI concentrator, they were, like, really in it.
Speaker 5:Don't know
Speaker 1:Oh, you're a systems guy? Name every system.
Speaker 2:This is Symbolic Systems?
Speaker 5:No. Symbolic Systems is a fake major. It's like the systems cracked in
Speaker 1:the I
Speaker 5:also did a fake major. So I'm not
Speaker 1:That's so funny. It's fake major. The realest major is art history. Higher employment than
Speaker 2:CS. Symbolic Systems is like literally every first employee at all the big tech companies who's worth like a $100,000,000 now. They're all
Speaker 5:Yeah. It's like they probably have a higher average income than the average comparative literature major, which is what
Speaker 2:Oh, well. Well, thank you for so much for stopping by, Jordy. Do have any other questions?
Speaker 1:Let's make this you're new. You're our Gen Z Oh,
Speaker 5:gosh. Okay.
Speaker 1:We need you. We need you. I I want more updates reporting on the Stanford class of 2025. Where are they landing? We
Speaker 2:got a fake job for you. Gen z correspondent on a livestream.
Speaker 1:Yes. New fake job new fake job alert.
Speaker 2:New fake job.
Speaker 5:Funny idea when I was editor Please. But never got around to doing it. And so one last thing was that we would compile the names and photos of everyone who got a job at Goldman Sachs, and it was just black and white portraits of all of them listed, like, vertically, and it's it was titled our best and brightest. Oh. So it's gonna be something like that for you guys.
Speaker 2:Here we go. Let's see it.
Speaker 1:Love it. Hey. Well, very, very excited for you to be at Arena.
Speaker 2:Who who's gonna take the companies public, if not Goldman Sachs?
Speaker 9:I don't know.
Speaker 2:Who's gonna issue the the massive debt to back these corporate titans, if not Goldman Sachs?
Speaker 5:Well, they are our best and brightest. They're they're doing important things.
Speaker 1:They are. Anyway, this has been fantastic. Thank you
Speaker 2:so much for stopping by.
Speaker 1:Great to see you.
Speaker 5:Thank you.
Speaker 2:Well, you.
Speaker 1:Talk soon.
Speaker 2:Up next, we have Joel from Thomson Reuters coming in the studio. He was supposed to be on AI day. He's buddies with Swix. He was introduced to me by Sean Swix, who's been on the show earlier. We're gonna dig into how Thomson Reuters is using artificial intelligence and what's going on in the enterprise.
Speaker 2:Welcome to the stream, Joel. How are you doing today?
Speaker 4:Guys, how's going?
Speaker 2:It's going great. Good to
Speaker 1:meet you.
Speaker 2:Would you mind kicking us off with an introduction on yourself? And then I'd love to know a little bit about the shape of Thomson Reuters business. People are obviously familiar with the brand, but, on a day to day basis, what's actually, going on the technology side?
Speaker 4:Yeah. You bet. So I've been at Thomson Reuters a few years. I joined via acquisition, as a CTO of an AI company. TRR acquired a few years back and have been with the company since then.
Speaker 4:I think a lot of people know Thomson Reuters from the news business. The obviously, that's the most public facing part of the business. But from a from a revenue perspective and a technology perspective, it's really, I would say, a relatively small percentage of of what we do. You know, we're one of the top two or three software providers in the world in the legal industry, in the tax industry, compliance, audit, and risk. So we really cover, I would say, a pretty broad expanse of the information services industry.
Speaker 4:For a lot of years, we were really seen as a as a content provider or an information provider within these businesses, but software, and in particular, like search, has been sort of a foundational piece of the technology that has kinda underpinned delivering that information to customers, again, across across the sectors, legal, tax, compliance, etcetera.
Speaker 2:Okay. So walk me through, of those verticals, which one is seeing the most acceleration from the current suite of AI tools? Which one's kind of maybe next up at bat and not really the models aren't really having as much impact as you expected so far? But where are we getting the most leverage in AI?
Speaker 4:Yeah. It's a great question. You know, if you look at all of those industries, you wouldn't necessarily look at anyone and and immediately say they are, particularly eager to adopt technology or aggressive in in that sense. But, you know, for the last two, two and a half years, the legal industry has been on fire, and I'm sure you guys have talked about it. There's a a ton of capital coming into that to the legal tech industry in general.
Speaker 6:Yeah.
Speaker 4:But, really, from the customers too have been extremely hungry and eager to use this technology, and it's having profound impact on, the way those professionals think about, doing their work and operating their businesses and and the underlying businesses business models themselves. I think, you're starting to see more, more progress being made in industries like tax, though. I think sort of the quantitative capabilities of the models kind of lagged the the language capabilities of the models.
Speaker 1:Mhmm.
Speaker 4:But I think that's improved. But I also think if you look at, like, the tax of the audit industry, that particularly workflow kinda heavy. And I I think as agents have really taken off in the last, you know, six to nine months and the tool call and capabilities of the models have improved, it's really opened the door to, you know, deliver, like, real true automation and productivity with some of these agentic frameworks and and reasoning based models.
Speaker 2:Yeah. Talk to me about I mean, I imagine you're not focused on pretraining a massive model to get to the frontier. You're probably a buyer of that capability, but we're seeing a lot of deals get done. Open AI's fine tuning models for clients above $10,000,000. They have they have even cheaper offerings.
Speaker 2:Palantir is doing fine tuning work now. We just heard Thinking Machines. Miramaradi is doing some fine tuning reinforcement learning for business to business applications. What are you a buyer of right now? What are you focused on building internal applications around?
Speaker 2:Where do you want the various pieces of the building blocks of a great artificial intelligence enabled product to sit?
Speaker 4:Yeah. This might be a little bit of a long winded answer. I would say, first and foremost, when we look about look at shipping product into the market quickly, we're certainly a buyer of these models, and and we're we're close partners with Anthropic, OpenAI, Google, and others
Speaker 2:Mhmm.
Speaker 4:In in that regard. You know, when those companies are working on their next versions of models, a lot of times they come to us to to help them evaluate and test certain capabilities of the models because the the type of work that's done in in the legal industry in particular is is is challenging. It's not a simple, like, rhetorical response. It's it's a deeper level of reasoning that happens in terms of the the types of problems that we're solving. So I would say, first and foremost, like, we're we're we're buyers of the technology.
Speaker 4:We have done, you know, fine tuning engagements with several of these providers. Mhmm. Super excited about the sort of RFT, trend that may be coming with with many of them in terms of being able to apply more RL based methods to to that fine tuning. But we're also, I I would say, builders in some sense. We're we're not, you know, pretraining models of the size of of, GPT four or or or Claude, SONNET, but but we do engage in that.
Speaker 4:So about a year and a half ago, we acquired a a small company with a couple folks from from DeepMind who have come in and really built up our deep learning expertise and deep learning training expertise within our team. You know, we've got about 1 and a half trillion tokens of our own proprietary content, in in legal and tax and news. And and like I said, that's been sort of one of our defining assets for a long period of time.
Speaker 2:Yeah.
Speaker 4:As RL really becomes kind of the the main mechanism for driving further improvements in the model, we see our talent, you know, our 4,500 domain experts across legal and and tax and otherwise, really being pivotal in that process of driving performance into the model. So, we're certainly a buyer, but we're definitely trying to exercise, the data and the content that we have proprietary to us, but also the the human experts that we employ to drive that flywheel faster.
Speaker 2:Can you give me some extra color on on all the different value kind of on the table with one of these deals between a big company and a foundation model provider? Because it can seem so simple. It's like, I'm I'm I'm buying an API. But there's actually a lot more to it, and we were talking about this in the context of Apple potentially partnering with Anthropic or OpenAI. And there's actually kind of a, you know, an odd relationship there where if Apple's sending a bunch of users to ChatGPT, that could improve the model, and that could make their business stronger.
Speaker 2:They could wind up servicing ads in the responses like Google does, and you could wind up with a situation where, you know, Google is paying Apple, not the other way around. You could see Right. ChatGPT eventually paying Apple for the right to be on the Siri button. But in your business, you have over a trillion tokens. That's pretty valuable data.
Speaker 2:There's a question of, you know, what's value are you bringing to that side of the deal? And so how are you thinking about doing a great deal that sticks and is aligned economically over the long term with a foundation model provider?
Speaker 4:Yeah. It's a really it's a really hard question to answer, and certainly, you have to kinda, like, have some crystal ball to project out what the next two years are gonna look like, and it's it's hard to project two weeks to to do that effectively.
Speaker 2:That's true.
Speaker 4:So We got one.
Speaker 1:Got one right We actually got a crystal ball in
Speaker 2:the studio for this exact reason.
Speaker 1:Quite a bit.
Speaker 2:It helps a lot. Yeah. It's important.
Speaker 4:I'll borrow that next time I'm out there. So, you know, for us, I think, like I said, our people and our experts and the data that they create, ultimately, I think, is is sort of core to our identity and core to what we believe is valuable to us, and we try to really hold on to that and extract as much value from it into our IP as we can. I think where where there's mutual benefit, like I said before, is, we provide a lot of insight and direction to these foundation model providers in terms of, like, what the models are failing at and sort of what kind of capabilities you know, they have these public benchmarks that say, you know, every week, one model's better than the other, but they don't really represent the real world. And in particular, they don't represent the real world of, like, how professionals do work on a day to day basis. And we spend a tremendous amount of time building real world evaluations into those kinds of things.
Speaker 4:And not only that, but we spend a a tremendous amount of time and energy grading and evaluating those on, like, real world rubrics for how a lawyer would interpret this. So it's not like it's a right or wrong answer. It's is it helpful? Is it harmful in some way to a lawyer? These are types of things that, like, create a require a tremendous amount of just domain understanding to to do well.
Speaker 4:And so that insight is super valuable to the foundation model providers to understand how they need to adjust their datasets, and it benefits us on the flip side because we get more performant models, at the back end that that are that are that are better suited for our tasks.
Speaker 1:How much time are you guys spending just on preventing hallucinations when you talk about domains like law and tax. You know, it's not uncommon for a a lawyer or a tax attorney to hallucinate themselves, put, you know, put the wrong number somewhere, you know, have have the right. But but usually there's, you know, hopefully checks and balances in terms of someone else reviewing it, the client reviewing it, making sure that it's getting to the right place. But that feels like the number one of the bigger issues kind of holding back LLMs from, you know, unlocking the full value. So I imagine it's a it's a big focus for you guys, but but what are your thoughts?
Speaker 4:Yeah. I mean, all all the time. I mean, I I think that that's one of the core things that we do. You know? And you're right that hallucinations existed before AI was involved here, and they exist now.
Speaker 4:And they no matter how good these models will get, they will exist in the future. I think there's there's some element of, like, that that that would be the fact. I mean, foundationally, way the models operate, like, it it is a propensity, and it can happen. So but we spend a lot of time trying to build guardrails, trying to build methodologies to to prevent that or at least mitigate it in in as as many ways as we can. I would say this is where, though, the the UX of the applications really becomes, like, more and more critical.
Speaker 4:Like, creating the environment where a lawyer, like, knows what they need to validate, knows how to do that validation, and can do it quickly and efficiently so that they're still saving time in whatever they're doing, I think is a critical part of the the design of the applications and how they operate. And as much time as we spend on the science side trying to build algorithms that prevent that. We spend just as much time on the design side trying to make sure we build experiences that allow lawyers to to build that that confidence and trust that that they need.
Speaker 2:Very cool. Well, thank you so much for stopping by. We'll have to have you back when there's more news from your world. And I we hope you have a great day and have a have a Thank you for July 4 too.
Speaker 4:Yeah. Thanks.
Speaker 1:Appreciate the insights.
Speaker 2:Talk to you soon.
Speaker 1:Cheers.
Speaker 2:Bye. Jordy, how did you sleep last night? I think you might have me beat. I was a little rougher. I got an 81 but how did you do?
Speaker 2:Go to 8sleep.com/tbpn. Get a pod five.
Speaker 1:Actually unbelievable.
Speaker 2:Did I beat you? Did I beat you? Play the sound effect. You know you know the award I get. 81.
Speaker 2:What do you get? 80? I can't believe it.
Speaker 1:52.
Speaker 2:52.
Speaker 7:Oh my god. Wow.
Speaker 1:I I'm You're I said I said worth,
Speaker 2:you have put on a fantastic performance this show. I would have guessed 99. I thought you were locked in. I think you've done fantastically this show.
Speaker 1:I I I like need to hire a new head coach. I'm gonna like have a call
Speaker 2:Well, what what we gotta have Brian Johnson back on the show. He's gonna be down to come in the studio. He can give us a coach. We'll bring Andrew Huberman back too. He was Andrew Huberman was saying there's a drug that can help you sleep better or something like that.
Speaker 1:I might need to get on PDs to I actually beat you.
Speaker 2:But then we're gonna have to drug test because if you're if you're cheating and I'm and I'm natty sleeping Hey. This is not gonna
Speaker 1:We we sleep. We focus on our sleep to make the show better.
Speaker 2:We do.
Speaker 1:We should be able to do any type of
Speaker 2:And there's no better there's no better place to sleep than a wander if you're on vacation. Find your happy place. Book a wander with inspiring views. Hotel hotel great amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation but better.
Speaker 1:We are gonna be launching a video of us in a wander.
Speaker 2:Get ready.
Speaker 1:Get ready for that. I can't
Speaker 2:wait. Ready. We have our next guest coming to the studio. And we'll let you take the intro. I will
Speaker 1:be back. Be from Ambrooke announcing some news. What's going on? Welcome to the studio.
Speaker 9:Hey. Thanks so much for having me.
Speaker 1:Quick intro on yourself and the company, and then let's get into the news.
Speaker 9:Okay. Sweet. So I'm Mackenzie. I'm the CEO, one of the cofounders of Ambrooke. Our mission is to help American family run businesses become more profitable and resilient.
Speaker 9:And, yeah, the way that we do that is we're starting in agriculture, so building out financial management software. So accounting, like, the full bundle. So accounting payments, banking cards for America's farmers and ranchers.
Speaker 1:How did you land on this idea? Where did it where did it all start?
Speaker 9:Yeah. It was a pretty winding path, but we actually started during the pandemic helping a lot of producers try to get access to working capital. And if you talk to a lot of producers about their problems and sort of what, you know, they think software can help with, it almost always has to do with the all the way up the masses hierarchy. So, you know, getting access to capital to take more risk. But the more that we dug into it, we helped we helped, a couple thousand producers access a couple million, during during the pandemic.
Speaker 9:But when you really dig into it, it's just kind of it kinda gets down to, like, accounting and financial record keeping. Like, it's just accounting all the way down.
Speaker 1:Non existent? Yeah. It was one of the issues you're, like, trying to underwrite a a business, but there's they're like, well, I have this piece of paper and I have this piece of paper and and, you know, maybe they have a QuickBooks account.
Speaker 9:Huge range, like you can imagine. But a lot of, you know, you have farmers that are running multimillion dollar businesses on pen and paper. Yeah. And, of course, you have folks who are also, using, you know, standard F and B accounting software too. But a real the real issue is just that farming is actually so complicated.
Speaker 9:Like, you know, I don't know if you guys have ever been on a dairy or how to do or how to do FDD farmed.
Speaker 1:Not a lot of content farming.
Speaker 2:Content farming. No.
Speaker 1:I I I grew up I grew in the country, in wine country, so I had some exposure. I also have some portfolio companies that that have some end farms as customers. So I feel like I've had some exposure, but certainly not an expert. But from from my understanding, think the the challenge is one, you're you're actually on a farm, and historically, some farm, you know, maybe I'm sure there's a lot of like Starlink adoption, which maybe is a is a catalyst. But at the same time, you're not at a desktop computer.
Speaker 1:So mobile mobile, the explosion of mobile helped in farming because you could be Yeah. Updating a database or even sending an email. But all of that is, like, relatively new, and and I and I don't think the, like, big accounting software providers of the world were necessarily, like, actually on the ground talking with farmers being like, what software do you want to run your business?
Speaker 9:Totally. Yeah. We we ended up, so a lot of accounting and FP and A software is built for for, like, office workers. Mhmm. So it's built as if they assume that you're gonna be in an office, you know, eight hours a day.
Speaker 9:And, we actually ended up flipping that very early on and building workflows that were built for folks who spend more time in the field than in the office. And so, from the very beginning, we had, like, cross platform across mobile and, and desktop, like, sort of web based. But over 50% of our users use the mobile app as their primary device to do pretty complex bookkeeping, accounting, payments, receipt management, and, you know, understanding their their analytics and reports. And and I think that speaks to kind of what you were talking about there.
Speaker 2:How consolidated is the industry? I feel like there's this narrative of, like, private equity has rolled up every farm, and there's, like, a few mega farms and the certain, like, billionaires own all the farmland in America. But then at the same time, it sounds it seems like there's still I I personally know folks who have family farms that are still in this, like, single digit million, maybe tens of millions of business. Like, they're definitely SMB. There's
Speaker 9:a little under 2,000,000 farms in The US, and only, only only, I mean, like, 12 to 16,000 of them do more than 5,000,000 a year in annual sales.
Speaker 2:Long tail. Yeah. Okay.
Speaker 9:So super long tail. Yep. Yeah.
Speaker 2:Yeah. So, I mean, that yeah. That's the market opportunity for you.
Speaker 1:Now I think we've started to the the the new financing you guys announced today, and maybe what was the inflection point that you that that made this round kind of possible?
Speaker 9:Yeah. Totally. So, we just announced, 26, point 1,000,000 series a.
Speaker 2:Let's go.
Speaker 1:Who's it from?
Speaker 9:So it's led by, Josh at Thrive and Dylan from the field venture.
Speaker 2:Congratulations. He's on a tear today.
Speaker 1:Our guys.
Speaker 2:He got a trade deal done. He got he got
Speaker 1:It's been a busy busy day for
Speaker 2:for Busy day for Thrive.
Speaker 1:All three of you. Yeah.
Speaker 9:So Yeah. Busy day for Dylan too.
Speaker 1:Yeah. I don't even think you you caught this, but they they released s one like an hour ago. Oh, yes. That's right. Yeah.
Speaker 2:Yeah. Were gonna
Speaker 1:More breaking news. But but anyways, back to Ambrooke.
Speaker 9:No. Yeah. No. Super yeah. I just I so the inflection the inflection way for us was that we just thought, you know, I think once we realized that we actually did need to because I I mentioned earlier that we, at first, were just trying to solve this paperwork problem, with getting access to working capital.
Speaker 9:And once we realized we actually had to just rebuild QuickBooks from the ground up, but that is not that is a long build. Nontrivial. So nontrivial. And so we ended up sitting with a group of pilot customers, couple dozen farms across The US for about two and a half years before we ended up releasing it, and actually starting to market it more to the public. And so it wasn't until last year that we, that we, launched early last year, and that that growth basically catalyzed, catalyzed this round.
Speaker 9:So
Speaker 1:That's awesome. And and will is the goal for working capital to still be a core part of the business in the long run, but you just had to solve the underlying kind of ledger first?
Speaker 9:Yeah. Totally. And, actually, I was I was the what pushed me to this decision too was just I ended up talking to a lot of these ag big ag tech players, that a lot of the executives there that were, doing a lot of ag financing. And I asked them whether or not they could standardize it by pulling on QuickBooks. And they just said it was a garbage garbage in, garbage out pro problem.
Speaker 9:Mhmm. And so they couldn't even like, they weren't they themselves were going in and doing pretty specialized underwriting, that was one off, basically, per operation. I figured if we were gonna have any shot at getting a lot of these folks our customers access to, not just commodit you know, commoditized financing, because a lot of these a lot of ag bankers actually drive to the farm to put together
Speaker 1:Boots on the ground. Boots we need boots on the ground.
Speaker 5:Yep. Makes sense.
Speaker 9:Yeah. Which is I mean, the faith based relationships are really important, but what that also what the cost is that it means that more capital can't flow into this ecosystem. Right? And you it's really a lot harder to to do really interesting niche financing as well if you don't have that level of standardization. And so a lot of what Ambrec has been focused on is first just solving producers' problems.
Speaker 9:So making it easier to file taxes, making it easier to manage receipts. But now what we're starting to do is a lot of our producers, for example, are for the first time understanding their managerial costs in real time and able to make a decision. Like, one of our producers, you know, realized that actually replacing heifers was a much more profitable enterprise than his hay enterprise and being able to make those decisions in real time and either you know, you just pick up because hay equipment is pretty expensive. And so he basically, like, he needed he needed to increase the amount of, income that was flowing through the hay enterprise to to offset the cost or essentially, you know, stop growing his own hay and instead buy it. And, like, those are types of decisions that actually, in real time, affect profitability in the long run and build a more resilient operation.
Speaker 9:And that's just not something that again, it's you know, the farms are pretty complex. It's one of the only industries where, oftentimes for manufacturing, you're usually assembling things actually with agriculture disassembling it. Mhmm. So, like, what are the cogs on that?
Speaker 1:Yes. I it's exciting because to me, it's like you can level the playing field and, like if you're a farm and you don't have access to capital in the way that these big you know sort of you know mega corporations have like really efficiently run businesses, plenty of access to capital because they're running sophisticated financial operations. It's just so much harder to compete and and with a business like farming where I I think a lot of, you know, I'm there's a bunch of different subcategories but so much of the revenue comes in waves seasonally based on harvests and things Yeah. Like that. And so it's if you're getting paid a couple times a year and you can't really have consistent access to capital, it's like very challenging to actually run a business and stay in business and not be forced to just sell your land or or or do something else.
Speaker 1:So it's very exciting.
Speaker 9:Totally. There's I mean, there and there's a huge the the big trend that everyone talks about in ag is just the generational transition. Right? Like, percent of land is supposed to change hands in the next fifteen you know, ten, fifteen years. The average age of a farmer in The United States is 57, 58.
Speaker 9:It's only increasing. Right? And so a lot of these operations are looking at generational transitions, and there's a knowledge gap there as well. Because if everything is in you know, if everyone's in someone's head about how all the finances work and how the operation runs, right, like, that's fine. But what happens when, you know, I don't even need to pass on to the next generation.
Speaker 9:And so a lot of what we think about is democratizing access to that knowledge, democratizing access to capital, to knowledge. Right? I think this is also our thesis on AI, which is AI should actually be the great you know, it should be actually the, like, the democratizing wave that the computing revolution promised, but ended up just actually hollowing out the middle class. I think you're actually seeing that come back in a real way where you're able to tap in, you know, folks who don't necessarily have, know, specialized skill sets or, like, have a, you know, are a CPA or something can actually understand more about their books in real time. Yeah.
Speaker 9:They don't need to necessarily have that, yeah, background.
Speaker 1:You can get at least access to the intelligence of the average McKinsey associate. Yeah. But for but for, you know, the cost of Amber. Couple of You know, don't you don't have to go hire McKenzie. Great.
Speaker 1:Yeah. Exactly. Awesome. Well, super exciting. Thanks for coming on the show and come back on when you have news.
Speaker 1:Yeah.
Speaker 5:Congratulations. Thanks, guys.
Speaker 7:Talk to
Speaker 1:you soon. The breaking news of course is that Figma has filed publicly filed their s one with the SEC. Oh, the printer? Is the printer?
Speaker 2:The printer
Speaker 1:is going. See Okay. They have applied to the list on the Oh,
Speaker 2:don't don't don't don't. There we go.
Speaker 1:Boom. Boom. Have applied to list on the New York Stock Exchange under the symbol FIG. Love it. It's got a
Speaker 2:great ticker.
Speaker 1:FIG. Congratulations. The New York Stock Exchange, one of the best stock exchanges if you ask me. Preliminary said, I I called you Gon.
Speaker 2:Gon. Gon.
Speaker 1:Gon. Anyways, the other interesting data point, Arthur Rock called this out. There's 70,000,000 held in Bitcoin ETFs on the balance sheet with board approval for another 30,000,000 BTC purchase via USDC. Woah.
Speaker 2:So So Dylan.
Speaker 1:A little bit of a BTC treasury action
Speaker 2:going That's wild.
Speaker 1:What else?
Speaker 2:I would not have expected that. Bill
Speaker 1:McDermott, who was formerly at Xerox, transformed SAP, and is now leading ServiceNow is joining Figma's board of directors. Congratulations. Bill is a legend. In addition to his wisdom, I especially appreciate his humility and authenticity. So great addition to Figma's board and
Speaker 2:Well, you're heading to the New York Stock Exchange.
Speaker 1:Have to have some
Speaker 2:You gotta get a watch on Bezel. Go to getbezel.com. Bezel is relentless. Available now to source you any watch on the planet. Seriously, any watch.
Speaker 2:Yes. This is very good news. Should we run through some timeline? Get on here. Do you think?
Speaker 1:Take some timeline. Let's see
Speaker 2:some timeline. We got another trade deal. Another massive trade deal. Jeff Bercovici is joining the Wall Street Journal. Starting July 28, he'll be heading up Wall Street Journal's San Francisco Team as deputy tech and media editor.
Speaker 2:Absolutely massive news. Congratulations to Jeff on the trade deal. Oh, we got another trade deal that we posted on the timeline. Same is moving to Thrive Holdings to build exceptional businesses designed to compound over many decades.
Speaker 1:Massive signing from Thrive.
Speaker 2:Massive Our friends
Speaker 1:over at Thrive. Mean, we're Probably maxed out. Maxed out probably four years. Yep. Guessing a one year cliff, but we'll wait for more details.
Speaker 1:A veteran of ramp. Yep. Absolute dog. Congratulations, Samantha.
Speaker 2:And in other news, Public, our sponsor, has the IRA triple play here, 1% match, plus 1% match, plus 1% match. That's 3%. So go check it out at public.com.
Speaker 1:The absolute dogs over public do it again. Yes. Will Menidas has new law. New law alert. We gotta Oh,
Speaker 2:he's coining.
Speaker 1:He's coining.
Speaker 2:Citadel's law, any industry with sufficiently high stakes will end up mirroring the culture of hedge funds, massive cash comp for top performers, bid away dynamics where entire teams walk together, extreme litigation of non competes, hard o to work twenty four seven culture, short tenures. We are at most six months away from PE style midnight recruiting coming to AI, at most twelve months away from undergraduates preinterviewing for the job they want after a two year stint in a frontier lab because because they even start.
Speaker 1:There's Whales are scrambling now.
Speaker 2:Hawaii saga ponic paratrade here. It's fun to be aghast when Bali Asni or whoever pays a 100,000,000 to bring some PM an unknown quantity of their loyalists that's portfolio manager,
Speaker 1:not private. Favorite is when portfolio managers have their their Squad? No. No. No.
Speaker 1:On the the LinkedIn gap where they'll add, like Oh. I'm gardening. Gardening. It's like gardening for
Speaker 2:six months. Couldn't go work at another, another hedge fund, after a six month cool down, of course, over. But this is actually much pure expression of the kind of thing that is being attempted in the Wong f b Nikita z deal, but this is actually much pure expression. At this, at the margin, I think, makes the capital environment for funding independent big AI things much worse. Not worth underwriting a team if you know they can do r and d on your dollar and then walk.
Speaker 2:In the same way, my sense is fund staking turn got worse, not better post pawnshop. He's getting in the weeds there, but it's a fun fun post.
Speaker 1:Yeah. Cut. But
Speaker 2:Yeah. But this is the long term impact of the AI
Speaker 1:talent wars. Do think it's accurate to say that, you know, a lot of people over the last twenty four hours have been saying, oh, nerds are being treated like athletes. I would just say this is tech. This is AI researchers being treated like PMs in in the hedge fund world.
Speaker 2:Yep. Totally. And the last piece of breaking news, think you mentioned this briefly yesterday, but Andrew Zin Horowitz is back in the mix to acquire TikTok, joining Oracle and Blackstone in talks to buy The United States business. It'd be fantastic.
Speaker 1:I would love to see that.
Speaker 2:Be great.
Speaker 1:Well Would be absolutely fantastic.
Speaker 2:End of the show. Folks, please leave us five star review on Apple Podcasts and Spotify, and stay tuned for tomorrow's show.
Speaker 1:If you leave a review on Apple Podcasts, we will read it on the show. You can put anything you want in there. You can put an ad for your business
Speaker 2:Yes.
Speaker 1:For your venture fund.
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Speaker 1:day. Have a great afternoon. We'll see you tomorrow. See
Speaker 2:you tomorrow. Bye.