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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.
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Speaker 2:Breaking the US government of now officially owns a 10% stake in Intel. The the poly market jumped to a 99% chance. This this broke over the weekend in the They
Speaker 3:didn't think uncle Sam could get an allocation.
Speaker 2:They didn't. You know, this is technically Intel series a. They did a seed round of 2,500,000.0 on convertible debt in 1967.
Speaker 3:Convertible debt. Convertible debt. Vintage.
Speaker 2:Arthur Rock, not the anonymous poster, not r for rock, but Arthur Rock.
Speaker 3:The OG.
Speaker 2:The OG. And and then they raised 6,800,000.0 in 1970, and that was their IPO. So this is their series a in my opinion.
Speaker 3:Anyway Back then back then, even if you would you would round down. Right? Yeah. Like if it was gonna be 6,900,000.0
Speaker 2:Yeah.
Speaker 3:The very Elon code Yeah. To go with that number.
Speaker 2:Oh, yeah. Yeah. Yeah.
Speaker 3:Yeah. Yeah. Decided, Yeah. Hey. Let's round down.
Speaker 2:Yeah. We don't need to Keep it classy.
Speaker 3:Let's keep it classy.
Speaker 2:Yeah. So over the weekend, the Wall Street Journal reported, president says US will take big stake in Intel. President Trump said the government is taking nearly 10% stake in Intel, capping a two week frenzy in Washington over the future of the company and fueling speculation about what else might be done to help the troubled chipmaker. Trump said in the Oval Office Friday that the company has agreed to give the government the stake as part of discussions about the company's future and billions of dollars in grants it has received from the 2022 CHIPS Act into And drawing
Speaker 3:to be clear, I don't think they've actually received it yet.
Speaker 2:They've received 2,000,000,000 already. Okay. But not there was full something like something like roughly 10,000,000,000, maybe 11,000,000,000 Prompts. In grants and then another equal amount in loans for an Ohio facility. And those are are going to be rolling out, and they should draw and Intel should be able to draw down on them.
Speaker 2:But they could always be rolled back if something changes and the CHIPS Act kind of goes away. And so this is all the art of the deal. This is the pressure. And so it's very funny the way Trump phrased it. He says, I said, I think you should pay us 10% of the company, and
Speaker 1:they said yes, which is not typically how people discuss equity investments. Government grants too.
Speaker 2:Yeah. Yeah. Well, people just don't people don't say pay us 10% of the company. Like, a VC will come to you and say, hey. I want to invest, you know, $20,000,000, and I want a 15% stake in your company.
Speaker 2:In exchange. In exchange. And and if anything, I I, know, I would ask for that stake, or I'm trying to build towards that stake. I wanna build a position in your company. Not I want you to pay me, but that that's the nature of this thing.
Speaker 2:So there's I mean, we've all been tracking this. There's been a little bit of back and forth between Lip Bu Tan and Donald Trump. He originally called for the, for the resignation. We can take you through the timeline. The Wall Street Journal laid it out really well in an article, a deep dive that we'll go through.
Speaker 2:But let's kick it off with this Howard Lutnick video.
Speaker 3:Let's play it.
Speaker 2:The art of the deal colon intel. And this is from Howard Luttner sitting next to Lip Bu Tan in a beautifully appointed room. If we can go full screen here, that'd be great.
Speaker 4:I'm sitting with Lip Bu in my office. Lip Bu. And at 03:00, we're going to sign a document together in the Oval Office where United States Of America will own 9.9% of the great American technology company Intel. I I can't be more excited for America and for Intel that we get to work together.
Speaker 5:Well, first of all, thank you so much, secretary. And this is a big important historical agreement that we can work together. And then more important, I don't need the grant, but I really look forward to have the US government be my shareholder, and we can work together and make Intel Have
Speaker 6:you ever
Speaker 3:heard Lip talk?
Speaker 4:What happened is Yeah. Lip Bu became the CEO of Intel.
Speaker 1:Yeah.
Speaker 4:And he came to see me, and he said, you know, the Biden administration gave this company a grant of $10,000,000,000 and we don't need a grant. We're a great company. Maybe not with the best leadership. We lost leadership.
Speaker 3:This video is absolutely insane.
Speaker 4:He said, you know and and that was the conversation. And then when we had the conversation with the president Mhmm. He said, look, we don't wanna take your money away from you, but shouldn't it be fair? Mhmm. And we agreed Yes.
Speaker 4:That it would be fair that the same
Speaker 2:money blogging deals from America should have shares
Speaker 4:for you. Because it's just fair. Mhmm. We agreed together, and and then you went to your board of directors.
Speaker 5:Yes.
Speaker 4:And they agreed.
Speaker 3:Yes.
Speaker 4:It's a giant public company, so it had to be fair.
Speaker 3:Yes.
Speaker 4:It had to be fair.
Speaker 5:Had to be fair.
Speaker 4:There's no other way. And so we did it fair for Intel and for the American people. And I think this is this is exactly what Donald Trump is all about. I'm really excited that today we get to do the demo.
Speaker 5:That's right. Thank you so much for your support.
Speaker 3:What sense?
Speaker 2:Is that botched hand shake? What happened there? Woah. Wow. I Lip Bu went for the DAP up.
Speaker 5:Yeah.
Speaker 2:And what Nick hit him with the power shake and it just was botched. Interesting. Interesting. Ben,
Speaker 3:can we can we put that in Well, slow motion and play that the journal has a timeline here. Lip Bu Tan was anxiously preparing for the biggest meeting of his life. Just five months into his tenure as chief executive of Intel, Tan was already fighting for his job. A few days earlier, Donald Trump had demanded he step down over his past ties to the Chinese military. The demand sent to Intel's leadership the demand sent Intel's leadership into a panic.
Speaker 3:They immediately contacted the White House for a meeting and Tan flew to Washington huddling with advisers for hours on Sunday, August 10. His team reassured him that the president would hear him out because, quote, Trump loves meeting with CEOs Let's go. Who doesn't? Even those whom he has attacked publicly according to people with knowledge of the conversations.
Speaker 2:Yeah. Yeah. He he's he's been
Speaker 3:Is it WWE?
Speaker 1:Spot in WWE.
Speaker 3:He understands. You call out
Speaker 2:your opponent, you hash it out, you leave Yeah. It on the It's good.
Speaker 3:The next day, Tan met with Trump, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Besson in the Oval Office. He sought to convince the president that he wasn't a Chinese spy and that the US government has a long term interest in bolstering Intel, one of the only homegrown manufacturers of the computer chips that power the modern economy. The CEO's argument proved persuasive. The president also took a liking to Tan, a Malaysia born, Singapore raised US citizen who once considered a career as a professional basketball player
Speaker 2:Sick.
Speaker 3:And backed off the demand for the CEO's ouster.
Speaker 2:Lip Bu.
Speaker 3:Can we get a Tyler, can you actually try to find a highlight reel
Speaker 2:of Lip Bu Tan dunking on LeBron James?
Speaker 3:But the truce came with a cost. In return for Trump's support, the administration proposed taking an equity stake in the company. It's interesting in that video, they framed it as Lip Buuton was like, you know what? We don't need the money. Why don't you take a stake?
Speaker 3:Yeah. But maybe maybe, you know, it's kind of unclear who made the initial move.
Speaker 2:Both ways. So just for context, last year, Intel brought in $50,000,000,000 in revenue, but they lost 18,800,000,000.0. So they did not do well on earnings. They missed on bottom line, essentially.
Speaker 3:Just a little bit.
Speaker 2:Just a little bit. And they switched CEOs. Obviously, they've struggled on the founding side the foundry side. They're not making chips for they can't find customers for their foundry stuff. So, you know, if that continued for a really long time, yeah, they they they would need the money, but they technically don't.
Speaker 2:And you can just look at the you can just look at the stock price. Like, before any of this, like, it's not like Intel was trading as a penny stock. Like, it was still it was too rich for Elon to buy with the what was it? 40,000,000,000 that went into Twitter or something like that. Like, I I remember thinking like, oh, I would prefer if he bought Intel potentially because that one seems important.
Speaker 2:But but it's always been around $80,000,000,000 company. And so, like, if if it was truly on the brink of bankruptcy, the the shares would be falling even more. I Yeah. In my opinion. So I I I think Lip Bu is not being disingenuous there.
Speaker 2:They actually could get by without the money. But they would they need to restructure, like, very seriously, and Lipu Town's, like, doing that. Like, he's cutting a ton. He's gonna cut more. And if you cut everything that's not additive to that 50,000,000,000 and you just try and hold on to as much of that 50,000,000,000 in revenue as possible and you cut everything that's losing money, yeah, you should wind up with something that actually generates, I don't know, maybe $10,000,000,000 of free cash flow.
Speaker 3:Not a bad little business. No. Intel decided to convert nearly 9,000,000,000 in grants promised to Intel as part of the 2022 chip sack into a 10% equity stake in the company, an unusual arrangement that makes the government Intel's biggest shareholder. Meeting was a pivot point in a frenzied period for Intel, once one of America's most venerated technology companies now stuck in a years long downward spiral. The companies scramble to control the fallout from the president's demand that Tan step down.
Speaker 3:Tan, triggered by a Fox Business Network segment, underscores the unpredictable environment major corporations face under Trump. By the end of the two week roller coaster ride, Tan's job appeared to be secure and the company's situation more stable. Japan's SoftBank Group agreed to invest 2,000,000,000, seeking to curry favor with Trump. On Friday, Intel and the White House officially officially revealed the terms of the deals. He came in, he saw me, we talked for a while, I liked him a lot, I thought he was very good, Trump said of Tan from the Oval Office.
Speaker 3:I said, you know what? I think The United States should be given 10% of intel. And he said, I would consider that. Yet a host of questions remain.
Speaker 2:I think this might be the gong of the day. Might
Speaker 3:be the
Speaker 2:true size gong moment. Is the
Speaker 3:that fundraising gong. Congratulations. Clean first hit of the week. It's good to be back.
Speaker 2:We're calling it, sixteen hundred Pennsylvania Ventures. Yep. White House Capital Group.
Speaker 3:White House Capital Group. Trump Trump. Tan must resolve core business challenges to get his company on track. Some analysts say Intel isn't in a much better position without new commitments from customers. Yeah.
Speaker 3:Converting government grants to stock will only leave the company in a worse financial shape by diluting shareholders. Fair. Trump will likely need to find more ways to support Intel not wanting it to fail on his watch. And that's why
Speaker 2:And that's why Lip Buutan's like genuinely excited. Yeah. Because he's like, now you're in.
Speaker 3:Trump is effectively the SPAC sponsor of Intel now.
Speaker 2:Yep. It's a
Speaker 3:new era.
Speaker 2:Yeah. He has bags and so he's aligned. And so if Lip Buutan needs to come to him and say, hey, you know, we're trying to make this a facility in Ohio. It's not going well. We need you to put some pressure on
Speaker 3:We need to align with some customers.
Speaker 2:We need align with some customers, all sorts of things. Like, in terms
Speaker 3:of He's on the board.
Speaker 2:He he's value add. He Trump is value is a value added investor.
Speaker 3:He's got audience.
Speaker 2:Yeah. Got business.
Speaker 3:He's got he's he's got I mean, he's got his own Yeah. Social media tech giant.
Speaker 2:True. True. Could be a potential buyer. Maybe maybe Truth Social becomes a hyperscaler. Yeah.
Speaker 2:You know, it's happened before.
Speaker 3:True. What's Truth Cloud. Truth Cloud. Intel needs a lot of help and The US needs Intel, says meet Goodrich, a senior adviser to the think tank Rand who focuses on tech issues. Hopefully, something good is gonna come out of this.
Speaker 2:We had we had Jimmy on the show like two days ago.
Speaker 3:Yeah. Jimmy. Jimmy. Good work, Jimmy. Intel was founded in 1968 by semiconductor pioneers Robert Noyes, who co created the modern computership and Gordon Moore, originator of Moore's Law, the idea that computing power and chip efficiency would likely double every year or two, a guiding principle in the tech revolution.
Speaker 3:By the nineties, Intel dominated the market for processors used in personal computers. Its Pentium line and Intel Inside marketing campaign with dancers and multicolored clean room suits made the company a household name. Then came a series of tragic missteps. The company largely missed out on the mobile phone and artificial intelligence booms by overemphasizing short term financial targets, analysts say. Rivals in chip design like NVIDIA and manufacturers such as Taiwan Semiconductor surged ahead.
Speaker 3:It's interesting how you if you're a huge tech company, you can miss maybe one platform shift and do fine. But you miss two, you're gonna be Even able to get even Microsoft said, you know, we miss mobile. Yeah. Again, social media
Speaker 2:and LinkedIn. Yeah. You could. You I mean, it's a really, really stretched metaphor. But you could say that like NVIDIA missed mobile more or less.
Speaker 2:Like, the like, weren't really switching into, okay. Let's be the design arm of because the the iPhone buying enough chips for your gaming attention. Yeah. Yeah. Yeah.
Speaker 2:No. It was just gaming company at that time, mostly in scientific computing a little bit. But there is a graphics processing unit on mobile phones. It's just part of the system on a chip that goes into the phone, and it was never NVIDIA never really, like, figured out a way to get a piece of mobile. And and there's a world where like the cloud rendering stuff happens, but NVIDIA kind of sat that out, but it didn't matter Yeah.
Speaker 2:Because they they they crushed AI.
Speaker 3:So company is still as keen to reviving US manufacturing.
Speaker 2:It It is sales by is sales by quarter, and it's just like and this is what a 30 old company is just completely completely Looks
Speaker 3:to the right.
Speaker 2:Like a YC demo day.
Speaker 3:Looks like a ramp. It's crazy. The company is still seen as key to reviving US manufacturing. In his first term, Trump touted Intel's plans for a $7,000,000,000 manufacturing plant in Arizona. Yep.
Speaker 3:Trump advisers began discussing what became the chip sack, wanting to attract companies such as TSMC to The US.
Speaker 2:Has Arizona tried to brand, like, what they're doing? They they have so many different, chip manufacturers coming in Arizona. They need, like, Silicon Desert or something. They like,
Speaker 3:it's Chip Really City.
Speaker 2:Chip City. It really feels like that like, there is a significant
Speaker 3:movement Center of gravity.
Speaker 2:Yeah, that will ultimately become like a company town type vibe.
Speaker 3:Chip City. As discussion on the chips acts crescendoed during the Biden administration, Intel CEO Pat Gelsinger lobbied aggressively hoping for some of the law's tens of billions of dollars in subsidies. In 2022, he sat in the first lady's box for the State of the Union speech during which president Biden touted Intel's investment plans. While the bill was being negotiated, senators including Bernie Sanders and Elizabeth Warren pushed unsuccessfully for a version that would see the government receiving equity in companies it backed. Very interesting.
Speaker 3:This is what Mark Cuban was saying last He was saying this is Sanders and Warren's dream. He said it in a little bit less PG language, if I remember correctly. But Intel became the law's biggest beneficiary, qualifying for roughly $11,000,000,000 in grants and about 11,000,000,000 in loans for a plant in Ohio and expansion in Arizona and other projects. It seemed like a boon at the time, but the law law's slow rollout in Intel's core business challenges led to repeated delays.
Speaker 2:Talk about ROI there. Like the like, Lip Buuton's saying, like, you know, we don't need these grants. And I think he's, like, technically correct, but it's an incredible nice to have. And the ROI on your CEO going to the State of the Union and just sitting in a box and, like, taking some meetings. And, you know, I don't know what Intel's lobbying budget was, but it probably was less than 10,000,000,000.
Speaker 2:Right? Was probably less than 10,000,000. Probably wasn't very much at all. And Yeah. And get a huge
Speaker 3:So a friend of the show, Andrew Ross Sorkins said yesterday, Should the government start taking equity in every startup for the federal tax incentives we offer or Tesla? How about the banks? How about when a state government offers a tax incentive? Should they get an equity stake in exchange, board representation? This is a super slippery slope.
Speaker 3:And Bill Gurley said, Here's my take. If the government is a lender of last resort, they should take 100% take equity and arguably 100% of the equity. Failed to do this with GM, Goldman Sachs, United and other airlines. How do you know if they're the lender of last resort? Resort.
Speaker 3:Resort? The company takes the deal. The company takes the deal. Which tracks.
Speaker 2:Because otherwise, the the company would go with the financial investor who says, I only want 50% for the same price or whatever. And so it it is a it is a good it's a it's a good point. It's a good point by Bill.
Speaker 3:So, in reference to the original CHIPS Act grants, the journal says it seemed like a boon at the time, but the law's slow rollout in Intel's core business challenges led to repeated delays. Late last year, Tan, who had been an Intel director since 2022, left the board in protest of Gelsinger's strategy. The board also soured on Gelsinger and pushed him out. Trump's victory presented another curveball. He had bashed Biden's
Speaker 2:Quitting in protest? Deeply underrated. Deeply underrated strategy just in life. Yeah. Yeah.
Speaker 2:I I I respect Tan for for quitting in protest. And then ultimately, getting
Speaker 3:Coming back Jack for the top spot.
Speaker 2:It's it's pretty it's pretty sick. Under Pretty underutilized strategy.
Speaker 3:Yeah.
Speaker 2:Just amount.
Speaker 3:He decided basically in the trough of disillusionment, he quit in protest. Yeah. And then he said, yep. I'll pop back on the roller coaster for the
Speaker 2:slope of enlightenment. That that's where intel is.
Speaker 3:And we're really, Yeah. I think we're I think I think we were
Speaker 2:Who's who's on the slope of enlightenment? I thought we were doing three colors. Me, you, Tyler.
Speaker 3:I didn't get Tyler on there yet. Okay. But you're on you're you're just I'm
Speaker 2:still on innovation.
Speaker 3:You're just coming up to the peak.
Speaker 2:I just went to San Francisco.
Speaker 6:I mean,
Speaker 3:this is
Speaker 2:I was talking to AI researchers. They told me deep learning is undefeated. They told me that pre training scaling will continue. And so I'm I'm I have yet to my my expectations can continue to be inflated.
Speaker 3:I am looking at the trough.
Speaker 2:You're looking at the trough?
Speaker 3:Looking at the trough.
Speaker 2:You're going I'm headed straight Where to the are you?
Speaker 7:I think I'm where Jordy is too. The it's the red
Speaker 2:one Downside.
Speaker 7:Other side of the of the Downside.
Speaker 2:Wow. I thought you were so AGI pilled, bro. I thought you're so AGI pilled.
Speaker 7:But I I mean, like, okay. Even Dora Kesh Dora Kesh is extending his timelines. Like, can you I mean, it's hard to still
Speaker 2:be Extending the timelines just means that the the the initial innovation trigger slope is just going like this, but he's still he's still going up. I I don't think we're in the trough of disillusionment yet.
Speaker 3:How about how about I think we need to make the TVPN version of this for the AI hype cycle? Yes. And the slope of enlightenment, we need to just like
Speaker 2:Another another vertical line. Another vertical line.
Speaker 3:For the fast takeoff scenario.
Speaker 2:Yeah. Yeah. Yeah. It's like we get a bubble. We get a crash.
Speaker 2:And then we get a fast takeoff. That's the most likely, for sure. No. Our job is is to recognize and diagnose when we are in the trough of disillusionment and re illusionize people such that we can get to the slope of
Speaker 3:the been in a trough of disillusionment that didn't one day get to the
Speaker 2:Slope of enlighten. Slope of enlightenment. Exactly.
Speaker 3:So It's impossible. There's always hope. There's always hope.
Speaker 2:Yes.
Speaker 3:But anyways
Speaker 2:You know what could've made that video better? If it was streamed on restream now.
Speaker 3:Right. Live.
Speaker 2:One livestream, 30 plus destinations, multistream, reach your audience wherever they are. Lip Buuton. Howard Lutnick, if you're listening, get on restream. Anyway, continue, Jordy.
Speaker 3:Of course. So Trump's 2024 victory presented another curveball. He abashed Biden's implementation of the CHIPS Act fueling worries that he could try to change deals or cancel them altogether. Intel's financial condition worsened and the incoming administration worried the company might fail. Even with the recent share price rebound in August followed by reports of the deal with Trump, the company is now valued at a 110,000,000,000, a fraction of its .com bubble peak.
Speaker 3:The stock is down roughly 50% since the start of last year. Wow. Intel has has been left behind, Trump said last Friday.
Speaker 2:So around Trump's inauguration in January, Lutnick administration officials began evaluating CHIPS Act recipients and which tech companies generally could increase their US investments in line with the president's goals. They asked semiconductor companies receiving CHIPS Act awards to increase their total US investment, but they knew they might need to revamp Intel's deal or help the companies in other ways. What's interesting there is that, when we talk to like, all of this is, like like, everyone's doing art of a deal on each other. And meanwhile, like, when we talk to Doug O'Laughlin at Semi Analysis, he's like, realistically, like, all this trailing edge capacity is gonna be done in, South America. Like, it doesn't make sense to do it in America.
Speaker 2:Like, a lot of this stuff is just gonna wind up getting offshore because it's easier to build some facility that's just copy pasted down there. And so it it it's very unclear, like, how, like, how it can actually work in the long term. And then and then on the leading edge, like, it seems like it's TSMC and Samsung. Like, Tesla's going with Samsung. And those will be in The United States.
Speaker 2:And those will be, like, cutting edge, like, PhD level jobs, amazing researchers, like, really, really great, like, American innovation. But, like, we're kind of already on that path. And Intel's not really the party that you need to be twisting the arm of. It feels like if you want America to be, like, the leading semiconductor country, You just need to make sure that you have leverage over TSMC and Samsung. Not so and maybe AMD GlobalFoundries a little bit.
Speaker 2:I mean, GlobalFoundries is part of Intel now, but but a lot of the a lot of the trailing edge, like, it seems like it might not be a long term thing that America's ever good at again because it's like it's commoditizing so rapidly. I don't know. Anyway, clearly, Trump cares about it and wants to keep it here. That's what he's pushing for. The administration began early conversations with Intel's board about taking an equity stake.
Speaker 2:The talks didn't move forward in part because the board, which has often been mired in disagreement, wanted more than the administration was willing to give.
Speaker 3:Did they want him to take take a bigger position?
Speaker 2:No. They probably wanted, like, 40,000,000,000 in Yeah. In grants or something. Like, give us more for them. Yep.
Speaker 2:Former banker, Lutnick, has had in recent months asked other tech executives what can be done to help Intel, even asking other chip companies like TSMC, AMD, and Micron whether they would content consider potential deals
Speaker 3:And this is what this Doug is Doug has just generally wanted people with semiconductor
Speaker 2:Yep.
Speaker 3:Manufacturing experience to be involved with the company. Yep. So it's very possible
Speaker 2:This seems like a step in the wrong direction according to his heuristic because it's like more government people on the board. But, I mean, to be clear, The US Government is not taking a board seat, not having a controlling stake. It's a purely financial stake, which we'll get into. So, in March, Intel's board named Tan sixty five as CEO, one of the biggest decisions he faces is whether to keep the company as one of the few chip firms that does both design and manufacturing. Some analysts say Intel should consider splitting the business or doing other types of deals to cut costs.
Speaker 2:Tan has so far shied away from spinning off the manufacturing segment, which lost 3,200,000,000.0 in the second quarter. He has told confidence he has inherited a very bad hand in July. Intel said it would lay off 15% of its workers by year end, cancel billions in planned investments, and further delay work on the sprawling Ohio plant. The new rules of the road were no more blank checks, Tan wrote in a memo to employees. Tan's early decisions at Intel were aimed at getting the company on more stable ground, but the CEO's past work at chip design software company Cadence Design Systems thrust the company into the spotlight.
Speaker 2:In in late July, July, Cadence agreed to pay a $140,000,000 for violating US export restrictions by selling banned technology to a Chinese national defense university. The sales happened while Tan was CEO. So, you know, you like, it seems like you probably had to sign off on that in some way. Of course, it's like, is it a university? Is that, like I don't know.
Speaker 2:I I I don't know how you, like, steel man this or dig into, like, you know
Speaker 3:Steel man it.
Speaker 2:Steel man it?
Speaker 3:You're the steel man champion of the world.
Speaker 2:Steel manning, it would probably be like the up the export restrictions are just, like, super complicated, and it's unclear. And it's one of those things where it's like there's the spirit of the law and the letter of the law, and they made some case for, you know, in this particular in the in this particular technology did not fit within the export restrictions because the export restriction might just be like, you know, oh, chips of a certain size or scale, and they had and they had a chip that was, like, slightly under. And then they the the and then the government, like, you know, reinterpreted the export restrictions to include that. Like, this stuff happens all the time because when these when these export restrictions get get written, it's easy to just Crazy.
Speaker 3:You don't hear much about Cadence Design Systems Yeah. By the way.
Speaker 2:A Huge company.
Speaker 3:$95,000,000,000 public company.
Speaker 2:Yeah. And and and that's why people think Le Boutin's so equipped to run Intel because he took that company to, like, a 100,000,000,000 market cap basically from, I think, like, 5 or 10 or something when he be when he, when he joined the company. So he is a he's a talented operator. So a week later, senator Tom Cotton sent a letter to Intel's board raising concerns about Tan's ties to China. Trump was watching this is wild.
Speaker 2:Trump was watching Fox Business Network on August 7 when host Maria Bartiromo highlighted Cotton's criticism at 07:34AM eastern time. Five minutes later, Trump fired off a message on his Truth Social platform. The CEO of Intel is highly conflicted and must resign immediately. It's crazy. He's just watching the news and then posting about it.
Speaker 3:Journal says it was one of the first times in modern history that the president publicly called for the leader of a major company to step down. Trump's demand was seen by some on both sides as an opening bid in negotiations with the CEO. The president had already grown intrigued by the idea of government stakes in key industrial companies during his May trip to The Middle East, a senior White House official said. Though the official added that it wasn't what sparked Trump's post, the president wants to see more such deals in the future.
Speaker 2:Well, if you're trying to maintain compliance get on Vanta. Automate compliance, manage risk, group trust continuously. Vanta's trust management platform takes manual work out of your security compliance process and replaces it with continuous automation, whether you're pursuing your
Speaker 3:I imagine that will we be know that Trump is not gonna be on the board and not gonna be sort of directly pulling the strings on the business, but I imagine one of the first things he wants Lip to do is
Speaker 2:Implement beta. Yeah. For sure. Yeah. So Intel stock price has been on a tear.
Speaker 2:Shout out to Leopold Ochsenbrenner at Situational Awareness.
Speaker 3:They mocked him. They said this guy's fund must have already blown up.
Speaker 2:Yep. He's long Intel. What a weird non consensus bet. Oh, well, it paid off. So Trump question where resignation mid August.
Speaker 2:Then Trump met Tan. SoftBank invested 2,000,000,000, and the share price rose from under $20 to over $25 a share. And the deal has been announced. So anyway, sorry. I cut you off.
Speaker 3:No. I think I think people were speculating whether Leopold had some inside information or he just viewed Intel as a super strategic asset
Speaker 2:that There was some post
Speaker 7:about this where
Speaker 3:wouldn't possibly let fail.
Speaker 2:There was some guy on on X saying like, oh, this is like insider trading. Everyone is insider trading. Even like Warren Buffett made his money on insider trading very black pilled. And and so he would just be like, there's no evidence of any of this happening at all. And and it yeah.
Speaker 2:Wait. What you got, Tyler?
Speaker 7:I think also, like, this trade, like, him being long intel totally aligns with the thesis of the of of Of the fund. Situational awareness. Like Totally.
Speaker 3:This whole thing is monitoring the situation.
Speaker 7:Yeah. They're gonna nationalize like AI. Oh, yeah. So obviously, like, if The US is gonna nationalize, like start a lab, start like Yep. Building computing stuff, they're gonna have like, they're gonna take the existing Yep.
Speaker 7:You know, infrastructure.
Speaker 2:Yeah. Yeah. I didn't even thought about it from that perspective. I was just thinking about it from from the perspective of, like, like, we we we talked to Ben Thompson about Intel. We talked to Doug O'Laughlin about Intel.
Speaker 2:Like, we were kind of, like, noodling on it back and forth as, like, commentators. And I didn't come away with a super strong, like, bull or bear case. I didn't really look at the stock price or the valuation or the financials, but it didn't seem, like, crazy to come up with a a like a like a an expression of your position in a in financial terms. And it's very clear that, like, Leopold and his team just, like, looked at Intel more deeply and saw that there was an opportunity there. You don't need like, you're
Speaker 7:not didn't
Speaker 2:Not every good trade needs to be inside of trading people. It's, like, so ridiculous. Yep. And and yeah. I mean, it's the same thing.
Speaker 2:Like, it's like, what what does he know about NVIDIA? Like, is it possible he just he just knows that, like, every like, he's not in NVIDIA. What does he know? Is he insider trading? Is or is he just, like, looking at, like, oh, well, Nvidia is, like, the obvious bet.
Speaker 2:So everyone piled into Nvidia. It's, the biggest company in the world. Like Yeah. Maybe not a lot of juice left there. Yeah.
Speaker 2:I'm gonna go where
Speaker 3:You get 20%
Speaker 2:I'm gonna go and bet on the things that have high upside potential. And yeah. I don't know.
Speaker 3:Anyway Yep.
Speaker 2:In the Oval Office, Tan told the president his ties to Chinese businesses were years in the past, and he was loyal to The United States. He presented ideas for turning Intel around and investing more in The United States. Lutnick told Tan that he thought it was dangerous to have so much the global chip making capacity controlled by foreign companies. Tan agreed and reiterated that he was dedicated to Trump's America's first manufacturing agenda. By the end of the hour long session, the president was convinced and agreed to lay off the criticism.
Speaker 3:I will no longer call for your immediate resignation on my social media app, Mr. Tan.
Speaker 2:That's great.
Speaker 3:Tan and Lutnick then moved quickly to hammer out a deal for the government to take a minority stake in Intel. It was complicated negotiation because it was unusual to convert government grants that had already been awarded into equity. Yeah. While they were in talks, SoftBank led by Masa suddenly agreed to put 2,000,000,000 into the company, part of his campaign to bet on US firms and appeal to Trump.
Speaker 2:Absolutely. If they were putting together like a pitch deck for SoftBank, I feel like they should have used Figma for that. Right? Think bigger, go faster. Figma helps design and development teams build great products together.
Speaker 3:I would be shocked if SoftBank uses Figma for their the design of their decks
Speaker 2:Yeah.
Speaker 3:Because they seem to be very PowerPoint coded but they still are powerful. Imagine how powerful they could be if they would you know, simply get on Figma slides. Let's see here. Did
Speaker 2:I tell you that my first internship ever was at a SoftBank backed company? No way. Yeah. Drdrew.com. So Doctor.
Speaker 2:Drew was a radio host with Adam Carolla on KISS FM in 02/2005.
Speaker 3:Wait. That's crazy lore.
Speaker 2:Yes. This is insane lore. So, doctor Drew was a, like a board certified psychologist, psychiatrist, I think.
Speaker 3:Wait. We're pulling up
Speaker 2:this website, by the way. And so Doctor. Drew, during the .com boom, wanted to start his own, like, livestream property, basically, and raised money from SoftBank and built a team of engineers and hadn't had their own data center racking servers. And one of my jobs is, like, go to the well, I mean, this is, like, what it is now because he has, like, five steps and stuff. And and you don't really need like a a necessarily like a venture backed startup to be an influencer.
Speaker 2:Yeah. Great.
Speaker 3:So doctor Drew Brewer
Speaker 2:went to the same high school as me. And Tyler, I know I
Speaker 7:was Every single famous person has gone to John's high school.
Speaker 2:Yeah. It's wild. But Pretty great. Like, well, like, one of my, like, you know, pop by the summer, office was, like, go in the data center, and it was, like, super cold. It was, not like a data center like people think today.
Speaker 2:It was, like, a room with a couple racks of servers, but there was no AWS. So if you wanted to set up a website, you had to, like, rack a server and, like, put this put the code on the server and then run it.
Speaker 3:Just put the servers in the bag, bro.
Speaker 2:Yeah. The brand was a little bit different back then. The first show that they were gonna greenlight was this sort of like it was about a lot of his stuff was like relationship coaching. So Loveline, people would call in about their relationships. And so I think I believe they were gonna put two people, like a like a man and a woman who were maybe dating, and they were gonna go on a road trip, and they were gonna like livestream it.
Speaker 2:And it was gonna be like some sort of like new new media.
Speaker 3:Well, all I can see is I can see why Masa needed to be needed to be in that needed to be in that website, John.
Speaker 2:It is it is incredible lore.
Speaker 3:Is that part of how you underwrote the internship too? You're like, look, you
Speaker 2:know I wasn't really, like, technically an intern. I I was I was so young. I was just, like, stopping by the office, basically. But but it it it was cool. It it was like a true startup environment.
Speaker 2:A pool table, like, pretty big office, like, very much like
Speaker 3:Pool table?
Speaker 2:Yeah. Pool table.
Speaker 3:Amazing.
Speaker 2:It it was very it was very iconic of like
Speaker 3:the .tablescom in
Speaker 2:offices Now it's like ping pong tables.
Speaker 7:Yeah.
Speaker 2:They've taken over.
Speaker 3:We should do you like pool?
Speaker 2:I like pool.
Speaker 3:Okay. We should get a pool table back here.
Speaker 2:Billiards. Billiards. Yeah. Yeah. It was like the classic like kind of overfunded venture backed .com bubble company where, like, huge staff for something that, like, would ultimately be
Speaker 3:Small media company.
Speaker 2:I see. Yeah. Yeah. Media company that should focus on, like, the media piece and then and then, like, the YouTube should just be, a platform. And so it's like it's like it it didn't make sense to be in like the middle.
Speaker 2:You either just wanted to be like the influencer or the or the platform.
Speaker 3:Anyway So SoftBank had already pledged to spend at least 100,000,000,000 in The US on AI and other tech investments, a move announced by Sun at Trump's Mar a Lago Club last December. SoftBank had also earlier this year discussed a potential deal to acquire Intel's chip manufacturing business. Intel and The US soon agreed that the government would use 8,900,000,000.0 in grants that have been committed but not paid to take a nearly 10% stake at a slight discount. The US won't have a say in governance. It already gave Intel $2,200,000,000 in CHIPS Act grants.
Speaker 3:That was what we were talking about earlier. Some had been given but not all that was promised. David Shapiro, a former partner on the Wall Street firm, Watchdull, Lipton and Rosen and Katz drew up the terms including a provision that the government could acquire another 5% of Intel at a discount if the company sells the majority of its manufacturing business.
Speaker 2:This an underrated naming scheme. I I I really wish startups would do this. Like, the next, like, AI startup should just be like
Speaker 3:No. This is Kugen and
Speaker 2:Hayes and Cosgrove and
Speaker 3:could be totally a new meta. It can only be done once Yes. By a great team.
Speaker 2:If we did Kugen, Hayes, Cosgrove, Kohler, it'd be amazing.
Speaker 3:I mean at some point, we should just add the whole team.
Speaker 2:The whole team, yeah. That's the longest.
Speaker 3:We could definitely get the dot And
Speaker 2:last names.
Speaker 3:Kugan and Hayes and Cosgrove and Kohler just over and over and over. So the administration insisted on this provision. It's 5% at a discount as a type of poison pill meant to dissuade the company from fully exiting the manufacturing segment. And this is what people are really excited about, government involvement in the decisions
Speaker 2:Highly technical
Speaker 3:projects. Highly technical, complicated businesses.
Speaker 2:Government famously good at building things.
Speaker 3:Yes. So if Intel were to give the government another 5%, it would obviously dilute shareholders and complicate things. So despite the initial optimism, many analysts say the agreement will only be a boon for Intel if Trump can also find customers and attract more investment for the company.
Speaker 2:Might be able
Speaker 1:to do that.
Speaker 3:I think he's gonna be able to do both, to be honest. I think he's gonna be able to strongly encourage other companies.
Speaker 2:He's not gonna be like a VC that just like sits back and like reads the investor updates.
Speaker 3:There's one thing He's gonna one be People can criticize Trump for a lot of things, but he is available the week of August 25. Yes. He's online. While many allocators, he's not a burning man.
Speaker 2:He's not a
Speaker 3:burning man. Which is crazy. Interesting. Which is crazy. You'd think that he's starting to get into venture that he would naturally set up an Oval Office camp in Burning Man.
Speaker 2:But instead of being at Black Rock City, he might be at Black
Speaker 3:Rock That's right.
Speaker 2:In Wall doing deals. Doing deals.
Speaker 3:That was one of our good There's an early episode of TBPN where John and I are riffing out Black Rock City.
Speaker 2:The home of The
Speaker 3:home of Burning Man. And wondering if there's a connection. There's almost certainly a connection.
Speaker 2:Obviously, a connection to BlackRock financial institution.
Speaker 3:Softbank's 2,000,000,000 and the 8,900,000,000.0 in government funding that had already been promised aren't game changing for the chip manufacturing business. In the grand scheme of things, it's
Speaker 2:not They that lost 18,000,000,000 last year. Like we're not even covering last year's losses. But better to have and not need, I suppose.
Speaker 3:Yep. So the agreement is fueling speculation that the president could lean on other tech companies to work with Intel. Lean, strongly encourage, demand that they are fired if they are not if they do not
Speaker 2:He's gonna rip some posts.
Speaker 3:Tan has met with potential customers including Apple CEO Tim Cook trying to win support for Intel's next generation manufacturing process. This is not the kind of thing I see Tim being super interested in. He's like more expensive, less performant.
Speaker 2:Apple has spent, what, a decade getting off of Intel and Intel Macs and going to Apple Silicon, which are like so integrated, so perfect for the Apple ecosystem. Like like now, like, you can run you can run iOS apps on Mac and vice versa. Like, it's it's like there's a ton of there's a ton of, like, they've been spinning up, like, the the ecosystem on top of Apple Silicon for so long, The different graphics engines and getting developers to go deeper into optimizing for Apple Silicon. Yeah. Things just like rugged and roll up, rack on it.
Speaker 3:Yeah. So the journal says many executives say they would need big incentives to use Intel for manufacturing given how badly it trails industry leaders like TSMC. Yeah. It is difficult to switch semiconductor manufacturers because the processes are specialized and have to be planned out years in advance. The government's stake in Intel is the latest in a series of extraordinary interventions in the private sector.
Speaker 2:And what's the craziest thing that they could do? Like Apple GPU for a cluster at Intel or something, like, of fresh start. That seems like something way out of their wheelhouse of both companies. I have no idea how they would do that. But, I mean, if if Amazon can do Trainium and and Google can do TPU at TSMC, like maybe there's a world where that happens.
Speaker 2:I don't know. Anyway, crunching the air right now. Anyway
Speaker 3:the administration So they highlight a couple of the other deals worth covering. So the president won a quote unquote golden share of control over Japan's nippon steel in return for allowing it to take over US steel.
Speaker 2:Yeah.
Speaker 3:These golden shares are in reference to what the CCP
Speaker 2:Oh, I thought it was in reference to the president's toilet, which is gold.
Speaker 3:Yes. And many many of the fixtures in the Oval Office. Yes. But And last month, Trump struck a deal with Nvidia and AMD for the federal government to take 15% of their chip sales in China in return for allowing the exports. In early July, the Defense Department took a minority stake in MP Materials, a maker of rare earth magnets.
Speaker 3:Days later, Apple, which the Trump administration had long pressured to expand its US supply chain, announced a $500,000,000 deal to buy MP's products.
Speaker 2:Yes. So that's an example of like Trump like acting as you know, biz dev basically for the companies he likes.
Speaker 3:I mean, he's really gonna make a lot of ECs look bad.
Speaker 2:Oh, yeah.
Speaker 3:Big promises during the deal process when they're trying to win allocation. Yeah. Yeah. Yeah. And then kind of
Speaker 2:I'll help you ramp your revenue for sure.
Speaker 3:Yeah. I'll help you hire ton engineers.
Speaker 2:I know a lot of the top guys.
Speaker 3:I know a ton of founding engineers. I don't have 50 other portfolio companies that also wanna hire founding engineers. I got you. I got you. But the intel stake is among the most notable notable given Trump called for Tande to resign then quickly brought him to the negotiating table.
Speaker 3:There's this Darth Vader aspect of the whole thing, said Quantum Makunda, a lecturer at the Yale University School of Management, never heard of it, who studies innovation and leadership, referring to the Star Wars villain who started as good, became evil, then redeemed himself. Anyways, if you want to read through this post from
Speaker 2:The big question is, is this socialism?
Speaker 3:Maga socialism.
Speaker 2:Is this maga socialism? A lot of people have been saying this. And I mean, I think like my default take is that like I don't know that intel is so critical that we need necessarily a backstop. I don't necessarily know that the government is the right
Speaker 3:board Do trust Doug on this? Doug really doesn't want Doug from semi analysis really doesn't does not want Intel to fail.
Speaker 2:Yeah. I don't know. I I I'm I'm still like on the fence about it. But so the debate has been raging, like, is this is this socialism? And so we're going to the socialists who are self proclaimed the people's line from Carl Behar.
Speaker 2:And Carl says no, but that hasn't stopped Democrats from complaining about it. And this is interesting because, obviously, the Trump camp is very pro this deal, and they're saying this isn't socialism. What are you talking about? We're just doing art of the deal. We're making good deals, and we're we're this is an America first agenda project.
Speaker 2:The Democrats are saying, oh, wow. Trump is a hypocrite. This is socialism. The socialists are saying this isn't socialism. It doesn't go nearly far enough.
Speaker 2:It doesn't count as socialism because it's not a controlling stake. So Carl says former under Obama undersecretary of the state, Rick Stengel, is freaking out right now over the news that the Trump administration has taken a 10% equity stake in chip manufacturer Intel. This is a quote from Rick Stengel. Trump Trump's strong arming intel for government equity is something Mao and Stalin would be proud of once the GOP believed in the laissez faire capitalism and government not interfering in the private sector. Look it up.
Speaker 2:The state owning the means of production is called Marxism. Carl,
Speaker 3:can I couldn't find any evidence of Elizabeth Warren or Bernie Sanders taking a victory lap
Speaker 2:Mhmm?
Speaker 3:On Trump's acquisition of Intel shares Yes. Which was surprising given that back in in the Biden admin era, they were pushing for this.
Speaker 2:Yes. But the key discussion that's going on right now is is financial financial ownership versus true control over capital, and that's what Carl's gonna get into here. So he says anyone old enough to remember the phrase government motors, this is from the era of the take of the takeover of GM, should be able to appreciate what a wild line criticism this is to hear from a former Obama official. As part of his troubled asset relief program, TARP, Obama took for the US government a 61% equity stake in General Motors, and the right's backlash was entirely predictable. Rush Limbaugh called this a sterling example of the left's crusade for government control of business that proved left's enchantment with socialism.
Speaker 2:John Stassel complained that this was a move toward more government control of the economy. And in the end, that's pretty close to socialism. That so many liberals have adopted this line of criticism, Joe car Joe Scarborough took it up on Thursday, and Democratic consultant Jessica Tarlov ran with it on Friday, for example, should probably provoke some reflection among socialists who think of liberals as fellow travelers. While socialists may share certain egalitarian values and other priorities with contemporary Democrats, American liberals are still reflexively ambivalent to hostile toward the basic socialist agenda of nationalization. They will opportunistically support it when it's time for Democrats to bail out the economy, but they will aggressively attack it if they think so if they think this will score points against Republicans.
Speaker 2:There are a few things that contemporary liberals enjoy more than catching a Republican doing something that they can rightly or wrongly construe as socialist. In this case, I would say wrongly, Stengel's definition of Marxism as state ownership of the means of production is confused for all kinds of reasons. But here are the most salient that but here, the most salient is that ownership does not imply control. Even if this was ordinary equity, 10% would hardly give the government any kind of significant control over the company. But as Intel made clear in a statement, this deal doesn't even give the government 10% control.
Speaker 2:Control. Quote, the government's 9%. But no. No. So so there's more.
Speaker 2:The government's investment in Intel will be a passive ownership with no board representation or or other governance or information rights. The government also agrees to vote with the company's board of directors on matters requiring shareholder approval with limited exceptions. So this notion of passive ownership perfectly illustrates why socialists would would do well to talk about control rather than ownership of the means of production, a major function of modern finance is to sever the relationship between those two. To identify control, you have to look past the legal and business terminology and figure out who actually has the final say over any given lot of capital. In that light, it isn't clear that 10% ownership stake even represents incremental progress towards control of intel, which is what, the socialists want.
Speaker 2:Convincing a business to give you 10 a 10% nonvoting stake in their company is very different thing from getting a 10% voting stake, let alone a 51% voting stake. Nevertheless, American partisans clearly aren't interested in litigating the fine details between ownership control, and that's why socialists have an interest in this fight. If Democrats are going to vilify Trump as a socialist, the best response is to complain that he isn't even doing socialism. He's not
Speaker 3:doing enough.
Speaker 2:He's not doing enough. And so my my my takeaway from this is that it's a good point. Like, it is not with the goal of socialists, but at the same time, it reaffirmed that I do not wanna do the socialist thing here because I don't want the government voting on what Intel should do. Like, I don't think the government's equipped to make the decision on on how they should position against TSMC, where they fit in Apple Silicon versus TPU versus Tranium. Like, it just doesn't seem like government's set up to actually run this company more effectively than anyone else.
Speaker 2:And so I'm very hesitant about that. It sounds like something that's, like, very good in some abstract sense to the socialists, but I have no I have no faith that if the government were to get a 51% voting stake in Intel, that we would get a better outcome here.
Speaker 3:Well, the better outcome people were talking about this on the timeline would be Trump answering questions on earnings calls.
Speaker 2:That would be fantastic.
Speaker 3:Maybe that's So that's best good outcome.
Speaker 2:Yeah. But it'd be odd to have like I mean, if we went to pure direct democracy and socialism, like, you go to the ballot box and you vote, like, are we gonna do three nanometer? Like, decide. You decide. Like, yes or no.
Speaker 2:Like, I think it's I think it's a waste of
Speaker 3:Or just have the the whoever's the intel CEO just have that as, you know, an elected
Speaker 2:Basically. Official.
Speaker 3:Yeah. Like, let the people vote on who should be running.
Speaker 2:Yeah. I mean, the question is, like, how much democracy do you want? You could vote on everything. You vote every single day. California is extremely democratic.
Speaker 2:We have ballot measures for all sorts of things. We tend to not do ballot measures for different things at the federal level. We have a representative democracy, not a direct democracy. And but if you if you really play out the direct democracy socialism thing, it's like, yeah, you'll be voting on whether or not Intel launches a GPU. Like, like, hey, we miss mobile.
Speaker 2:What should we do about that? Okay. Let's ask the American people broadly at the ballot box. Like, that is that is the key issue.
Speaker 3:It's kinda crazy
Speaker 2:to me.
Speaker 3:Should Intel launch energy drinks? Yeah. It's not really in our wheelhouse today but, you know Yeah. Big potentially large opportunity.
Speaker 2:Yeah. It just it does seem it does seem fraud. It doesn't seem like it seems like they're
Speaker 3:they're It's potentially one of the slipperiest slopes that we've ever been on as a country.
Speaker 2:Well, I don't know. This is saying that like we're like like his point is that this isn't this isn't a step towards real socialism because it's not real control. It's it's purely a financial instrument.
Speaker 3:Yeah. But the Intel board said the government also agrees to vote with the company's board of directors on matters requiring shareholder approval with limited exceptions. What are those exceptions? So what are the exceptions, right? I'm not sure not sure that we know.
Speaker 3:But anyways, the timeline The
Speaker 2:analysis says it's a bad idea. We can vote against you. That's the exception. Anyway, first step, I would vote for if I was a in in a democratic socialist society, I would vote that Intel gets on graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 2:You get started for free.
Speaker 3:Kanor in the chat says, I think Intel needs to launch short form content.
Speaker 2:Well, make sure your voter registration is up to date because president AOC might just make it happen. You never know.
Speaker 3:I could see it. I could see it. Possible.
Speaker 2:I mean, the the the real wild one is, yeah, Tesla because Tesla's had a number of government incentives that they've taken advantage of. You could make the same argument. You put the screws to them and you say, hey. We need we need voting shares for this.
Speaker 3:For the years and years. Is what Andrew
Speaker 2:Sorkin was saying. Yeah. He was saying, like, yeah. Like, where, like, where do you stop? And I understand that, yeah, there is this, like, slippery slope.
Speaker 2:But to Bill Gurley's point, like, Intel could have said no. They could have said, like, We're actually gonna be fine without the chips act money. And so we don't want we don't want an equity stake.
Speaker 3:Button is sitting there just on fire. And he should be like, you don't need help. You don't need help, put it out. I'll I'll be good. I'll be good.
Speaker 3:Flames are just Hey. No. I'm I'm good. I'm good. I'm good.
Speaker 3:I'll
Speaker 1:just cut more.
Speaker 3:It's like I don't wanna I don't wanna give the president the ick. I'm just gonna act all like
Speaker 2:Hey. I mean, BlackBerry is a cybersecurity company now. Maybe Intel just, like, pivots all the way down to just, like, yeah. We're we're actually just own real estate at this point. Like like, all we own is We're we're real estate, and we just lease to, TSMC.
Speaker 2:And that's it. We're we're completely out of
Speaker 3:Probably a decent business.
Speaker 2:In other news, Taylor Swift is getting married. The private jet enthusiast. Well, I I feel like most of our audience would know her for her Wall Street Journal op ed in 2014
Speaker 3:Right.
Speaker 2:Where she said for Taylor Swift, the future of music is a love story. Right. Where will the music industry be in twenty, thirty, fifty years? Before I tell you my thoughts on the matter, you should know that you're reading the opinion of an enthusiastic optimist. One of the few
Speaker 3:Enthusiastic souls.
Speaker 2:Yeah. One of the few living souls in the music industry who still believes that the music industry is not dying. It's just coming alive. There are many, many people who predict the downfall of music sales and the irrelevancy of the album as an economic entity. I am not one of them.
Speaker 2:In my opinion, the value of an album is and will continue to be based on the amount of heart and soul an artist has bled into a body of work and the financial values and the financial value that that artists and their labels place on their music when it goes into the marketplace. Piracy, file sharing, and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently. In recent years, you've probably heard the articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they all realize their worth and ask for it. Music is art, and art is an important is important and rare.
Speaker 2:Important rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free and my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or underestimate or or undervalue their art. So did she get this right?
Speaker 2:To date? Not really. I think she I think she got the thing that she got right is that what an album is can be extremely monetized if you continue to think about what the like, the album is scarcity. Like, you either have it or you don't, and the Internet kind of reduced that scarcity to zero because you could stream it. You could pirate it, but there is still scarcity to be created if you are an artist, if you are a musical artist.
Speaker 2:And so the way she does that now is when she releases an album, she goes on a tour that becomes so big that again there is scarcity because there are only so many tickets at SoFi Stadium, and you have to be there
Speaker 3:Yep.
Speaker 2:Because it's a moment
Speaker 3:One of the best monetized Yes. Recording artists of all time.
Speaker 2:Yes. Yes. And so she gets the long tail eventually. And eventually, her her music is essentially free and played in in grocery I'm gonna read
Speaker 3:you something from their Instagram caption announcing the engagement. Yes. It's not just a marriage dash and dash.
Speaker 2:No way.
Speaker 3:It's the perfect love story.
Speaker 2:No way. No way.
Speaker 3:Smack on x is calling this out saying saying claiming that Taylor and Travis are one shotted.
Speaker 2:No way. What did you got, Tyler? Was that
Speaker 7:Oh. Well, I was gonna say something about like her like monetization like Yeah. Kyle Scanlon has this good post. She said Taylor Swift's engagement is actually very relevant to monetary policy
Speaker 2:Mhmm.
Speaker 7:Because she is the most powerful stimulus tool we have.
Speaker 2:Oh, really? How so?
Speaker 7:Well, I mean, her her tours are, like, massive. Like, you can see the, like, rise
Speaker 2:in In consumer spending?
Speaker 7:Yeah. Oh, interesting. Especially, like, smaller countries. It's like very notable.
Speaker 2:Yes. Yes. But but how does her being married like, she could just go on tour and be single. Right? Is she gonna sell more tickets because she's married now?
Speaker 2:Does it allow her to tour more?
Speaker 7:You could also see it in a lot of people are talking about birth rates. Right? So maybe in boom. Yep. Baby boom.
Speaker 3:Yeah. Catherine Boyle just posted a picture and just said with the caption captioned American. Their pictures pictures just said American dynamism.
Speaker 2:American.
Speaker 3:I do think this will be good for the birth rate. It's it's also gonna be some some for anybody that's in a longer term relationship in their late twenties, early thirties, pressure is now on. Yeah. These photos are gonna be getting sent around. They're setting a new bar, right?
Speaker 3:Quite the floral display by Travis. Gotta give him props there.
Speaker 2:How many many kids do you think she'll wind up having?
Speaker 3:She's 35.
Speaker 2:She's 35.
Speaker 3:She's gotta get going.
Speaker 2:Oh yeah. Nineteen eighty five.
Speaker 3:And hopefully a ton. Right? I mean, I think we'd like
Speaker 2:see luxury status symbol, apparently.
Speaker 3:I'd to see at least 10.
Speaker 2:Yeah. It'd be great. Oh, wow. Looking sharp. You you really really undersold this.
Speaker 2:You said you were just gonna do a phone call, and now here you are.
Speaker 1:No. I thought I died before. Full warranty here because This
Speaker 2:is amazing. Okay. So first off, I need to apologize. I completely botched the story of doctorg.com. In my defense, I believe I was 10 years old when I stopped by the office as a as a kid, but please break it down for us.
Speaker 1:It's so funny. The the only thing I found disturbing was how how miserably you did with my credentials.
Speaker 2:Oh, I'm sorry. I'm sorry. Let me start with that. Okay. Please.
Speaker 1:I'm a board certified internist. A board certified dictionologist. I'm a fellow with the American Board of Medical College of Physicians. I'm we had multi I was assistant clinical professor in psychiatry, practiced medicine my whole life. I'm not a psychologist.
Speaker 3:Okay. Yes.
Speaker 2:We did do Loveline back in
Speaker 1:the day.
Speaker 2:I love Loveline. I I sincerely love Loveline. I wish I listened to it constantly. It was amazing.
Speaker 1:Well, it it was very popular, and it served a function back in the day. But but this this business spun out of it, and I thought you guys would really like to hear this history a piece of history.
Speaker 2:Incredible.
Speaker 5:Good
Speaker 1:friend of mine from high school, Polytechnic High School. Yeah. We we went off to Amherst College and then he went to Harvard Business School, I went to medical school and I'm going along doing all these wild things, practicing medicine and then doing radio and he shows up and he goes, I wanna I wanna show you how to form a business. We're gonna do a .com company. And of course, I was hearing about all the .com stuff in the in the wind and he'd got some seed capital from a company in Orange County like a million dollars.
Speaker 1:Mhmm. And then he put together a little board and we went, he grabbed me by the arm and took me up to Sandhill Road and we sat at Softbank, Softbank rather.
Speaker 2:Incredible.
Speaker 1:Made a he just said, follow me. I go, what are we doing? What are we I had no idea what we were doing. Didn't know how to start a business. I didn't you
Speaker 3:had you bought your.com, by the way? Had you like gone out
Speaker 1:Probably had done something like that at that point. Don't I don't
Speaker 3:think we
Speaker 1:were sitting there without that.
Speaker 3:Yeah, exactly.
Speaker 1:And and he just goes, follow me. And I was like, okay. So I followed along and they go, what do you wanna do? And I'm like, I'm So I don't remember what I said, but the six or seven SoftBank VC representatives marched out of the room and my Harvard Business School friend was anxious and like I didn't even understand what was happening. Still, I did not.
Speaker 1:And they came back in and they go, okay, $10,000,000.
Speaker 2:That was that.
Speaker 1:Let's go. We went down and we built the company exactly as you described. Okay. And in fact, drove my wife crazy. She goes, what are people doing here?
Speaker 1:Why aren't they why aren't they working there? If we shouldn't it shouldn't be this nice an environment. But most of that was for the tech team, and you pointed out how weird the tech situation was. You got that part exactly right.
Speaker 3:K. Perfect.
Speaker 2:But the
Speaker 1:part you got wrong is Yes. Remember, people didn't have any idea what a website was.
Speaker 2:Yeah.
Speaker 1:And so we had an editorial staff, we had a medical staff, we had a marketing team, and they envisioned I kept saying, why do we need a magazine on my computer screen? Why why you're you're building this really great magazine Mhmm. But with a chat room and with some feedback. And they kept they all the all the all these sort of trigger words back then were interaction. Sure.
Speaker 1:And and I didn't understand. I I saw no value in any of it. I kept saying I I I kept saying I we had a 120 employees and we had a board of directors from from Northern California who were demanding we, quote, get big fast. This this is interesting quote.
Speaker 3:Get big fast. Yeah.
Speaker 1:This guy this I I came to our first board meeting. I said, look, I I'm trying to decide if we should figure out how to make money, how to make this profitable or or what we should be doing or how to, you know.
Speaker 3:They tell you, don't worry about that. Don't worry about that.
Speaker 1:Worse than that, this one guy goes he was manic as hell, and he goes, if I thought you were so stupid, I never would have been on this board. And he jumps up and he goes, here's how you make money at .comcompany. And there was a giant whiteboard, and he wrote in huge letters, get big fast. Yeah. And they were demanding we burn through capital faster to try to get big fast.
Speaker 1:So that became the weird it was the weirdest thing I ever seen in my life. But the one thing I got right Mhmm. I kept saying, it's gonna be video. Why else do we need this thing? It's gonna be video.
Speaker 1:But look look what we're doing right now. Right?
Speaker 7:Yeah.
Speaker 1:And I just kept saying that, and we put together a one night a week television show Yeah. That was really a high quality show. We still have some of the tapes from it, and everybody came in. Paul Rudd, Tommy Lee, everybody came in on that one night a week show because it was the cool thing to do Mhmm. Because there's this new idea, this .com company creates a TV show, and nobody could watch it.
Speaker 1:You know why?
Speaker 3:Because you couldn't stream it?
Speaker 1:Because nobody had stream. Nobody had broadband. Yeah. Broadband. You needed broadband back then.
Speaker 1:That's that's how far ahead of the technology we were.
Speaker 3:We were in the It sounds like you weren't making a ton of money, but were you selling the show on a subscription? Like, what what did that
Speaker 2:Was the was there any business model? Or like any revenue model? No. Just eyeballs. Just eyeballs.
Speaker 2:So get big fast didn't mean revenue or profits. It meant eyeballs.
Speaker 1:Eyeballs, get big meant money meant number of people. And they kept talking about how the curve, you know, how the ascertainty curve would develop around viewership and and engagement and this kind of stuff. And we literally this was a company I mean, it had lots of traction and engagement and stuff. People were kind of intrigued by it. So people were stopping by and looking at this thing.
Speaker 1:I'm I'm not sure. We did lots of interviews with celebrities. It was sort of like E meets, teen B meets, you know, it was all these different sorts of things, all together in one site. And we literally were sitting in Goldman Sachs on, I believe it was 03/19/2022 2010. Wait.
Speaker 1:When was that?
Speaker 2:February.
Speaker 1:I'm sorry. 1989.
Speaker 2:That's right.
Speaker 1:Or February. The day the Nasdaq fell apart.
Speaker 2:Oh, shoot.
Speaker 1:We were sitting day.
Speaker 2:Yeah.
Speaker 1:We were sitting in Goldman Sachs and the woman across the table was contemplating giving us $30,000,000 on a $110,000,000 valuation Wow. For a company that had never made a penny. Wow. And I I I just thought it was the dumbest thing I ever saw, but I I I knew it was tulips the whole way and I kept and one friend of mine finally goes, look, it's Amsterdam 1680, it's tulips. You're gonna grow brussels sprouts or you're grow tulips?
Speaker 1:What what
Speaker 6:are you
Speaker 1:gonna do? I said, alright, I'm I'm gonna grow tulips. You're gonna
Speaker 3:grow Well, it's I mean, it's interesting to think back and if and if if if it was structured as an investment that was actually in you and your name and likeness, it would have been a tremendous investment. Yep. But that wasn't a good.com story.
Speaker 1:It it was why we got the money though. Yeah. In fact, there's a there's an ink article on my wall here. I was gonna actually pull down and wave in front of the camera. It'd be almost impossible to do it.
Speaker 1:Were that they were sort of saying that's what they were, you know, that's kind of what they were thinking they were doing. But it it was not it was not a clear thought, but they were looking for brands. Yeah. And I don't think they really knew that that that was not a fully developed thought at that time.
Speaker 2:Yeah. So what was the key? What was the conclusion? Because I
Speaker 1:go into business school
Speaker 2:Yeah.
Speaker 1:I saw the entire the entire from from seed to dissolve Yeah. I saw the entire business cycle in one year.
Speaker 3:So did you did you eventually take take over the site again yourself or what did
Speaker 1:that Doctor. Coop brought bought the site. Mhmm. Remember Doctor. Coop?
Speaker 1:Or you wouldn't, you're too young. He was the attorney general and then he he had a website that actually did rather well for a minute.
Speaker 3:Did he just redirect the website or was he still using doctordrew.com?
Speaker 1:No no. He was a redirect. He actually very cool. Absorbed everything. And and he went bankrupt as everybody did.
Speaker 2:Yeah.
Speaker 1:And we got we were able to weasel it back. I forget how we got it back, but we had to we had to do some sleuthing. We finally got it back.
Speaker 2:So yeah. What what what what how did the shape of your business evolve then? And like what like, how do you think about packaging everything that you do now?
Speaker 1:You know, there there is I was listening to you guys talk and I was thinking, boy, I don't have any framework. Mhmm. This is all very interesting to me, but I but I don't have a framework to sort of understand what I do. My my stuff is always an improvisation.
Speaker 2:Sure.
Speaker 1:Right? I when I started radio in 1983, I had no designs on radio. I I was leave me alone so I can practice medicine. I'll come here in the evenings on Sunday and do community service.
Speaker 2:Yeah.
Speaker 1:That was my very little notion in 1983 when I started doing radio.
Speaker 2:Then
Speaker 1:there's some television guys came along. I'm like, how do you do a TV show? I've never I don't even know what you're talking about. Well, this was the same thing with the.com. Yeah.
Speaker 1:My my good friend comes to me and goes, we're gonna do this. And I thought I I don't see it. I don't get it. But I think we might be able to do something with it. It'd be interesting.
Speaker 1:This was a hell of an education.
Speaker 2:Yeah.
Speaker 1:And and you're asking how I frame everything I do now now?
Speaker 2:Well, yeah. I was wondering
Speaker 3:how many techno how many different technology trends from the.com to, you know, podcasting, but
Speaker 2:it all comes back to
Speaker 3:this AI radio and TV.
Speaker 2:Yeah. Like, wait. Like, what what over over the past, you know, more recent tech boom history, have you been hit with the hey, let's do let's do a
Speaker 3:AI doctor Drew.
Speaker 2:Or let's do an AI thing? Is this coming is it rearing its head again?
Speaker 1:It that has been that has been I've had conversations like that.
Speaker 2:Yeah. Of course.
Speaker 3:Mean, looks really good for conversion optimization. It made me want to click. You're I think it's Chris is doing a good job.
Speaker 1:Not meant to be shown at other people's shows. You know, that's been interesting. It happened, that all happened just because I got canceled for daring to say people shouldn't panic about COVID.
Speaker 6:Oh, yeah.
Speaker 1:And that caused me to just stop doing everything.
Speaker 2:Yeah.
Speaker 1:And I had somebody who said, hey, should do a streaming show. I was what's that? Again, that's sort of my it's where I start every one of these projects.
Speaker 3:Yeah. You had a bad experience streaming the first time where you're like, if if I make the show, you're sure people are gonna be able to watch it.
Speaker 1:But Well I knew it. But we were way early and nobody else was quite as much of a believer as I was. And so the streaming thing has been very interesting and you just I'm I'm in my own my kids' playroom doing this, and it's the same thing. Everything here used to require me to go out to a satellite booth booth at CNN.
Speaker 2:Yeah.
Speaker 1:And now I just do it from here. So the efficiencies are fantastic.
Speaker 2:Yeah.
Speaker 1:And so I do television out of the studio, I do podcasting out of the studio, I do streaming shows. And it all started because I got cancelled and some of my webmaster said the streaming is probably gonna happen pretty soon. I said, oh, let's try that. And I wanted to talk to all the peep other other physicians who've been cancelled. Mhmm.
Speaker 1:One of them happens to be the director of the NIH right now. So I do this sense that that these people had something to say and the cancellation thing was some sort of bizarre aberration, certainly in in science and medicine.
Speaker 3:Had you have you gotten, you know, the the opportunities that you may be lost due to the cancellation, have you gotten invited back in the last it just a year
Speaker 2:different set of opportunities?
Speaker 3:Or is it, yeah, are you looking at totally different or do you not even wanna go back to the to kind of the old
Speaker 1:These those are great questions. I I don't know that I want to go back but I probably would because I've taken the position that my opinions have never changed, I'm happy to express them on any platform anywhere. What has happened in the meantime is, you know, what I used to do is say all the news outlets, all of them, all of a sudden the only people that would have me on was Fox.
Speaker 2:Yeah.
Speaker 1:Now, just last week, CNN called. So I thought, okay, good. This is a good sign. I couldn't make it, but I would have had I been able
Speaker 2:to Nature's healing.
Speaker 3:Nature's healing. Yeah.
Speaker 2:We've we've been really obsessed with this idea that sort of a barbell is emerging in modern media where all the value either accrues to the platforms like YouTube, Twitch, Instagram, or the individuals, the Joe Rogan, the Andrew Huberman,
Speaker 1:the 100%. 100%.
Speaker 2:And that it's very hard to actually build anything in the middle. Would you agree with that? Would you is this something that you've kind of experienced? It it feels like something that
Speaker 1:No. I the I I absolutely concur with the on the talent side.
Speaker 2:Yeah.
Speaker 1:That because it used to be I would require to do what we're doing right now. Yep. There'd be an executive producer. There'd be a segment producer. There would be a director in the studio, the satellite booth.
Speaker 1:There'd be somebody directing in the other end of the satellite booth. There would be And
Speaker 3:then you got the unions. The unions involved with
Speaker 1:There'd be unions. There'd be sales forces. There'd be executive structure. Now it's me. Yeah.
Speaker 1:That's it. Yeah. So it's so much more efficient, and it drives that world crazy.
Speaker 2:Yeah.
Speaker 1:So when Colbert gets gets fired for losing $40,000,000 a year, I just looked at that, and I go, well, of course. Yeah. That's gonna happen to all of them. This is just not a model.
Speaker 3:Yeah. And our reaction at that point was he could just go set up his own home studio and probably have a fantastic business just with his existing fan base and none of the none of the overhead.
Speaker 1:100%. But they are they are you gotta know how that world thinks. They're very spoiled. They're very spoiled, and they're used to gigantic infrastructure and dozens of writers, and this is this the world we're living in right as we have this interview
Speaker 2:Yep.
Speaker 1:To them looks sort of cheap and dumb and people aren't talented do that. The real people people back back us with infrastructure and money. That that is just not so this the other side of the barbell
Speaker 2:Yep.
Speaker 1:Which I'm wondering how you see it, I just see it as largely nonviable. So much of it has got to shrink dramatically, and it's resisting.
Speaker 2:Yep.
Speaker 1:It's resisting like crazy.
Speaker 2:Yeah. I mean, I I would almost put the the traditional media corporations, like, in the center. When I think of the far big mega side of the barbell, I think of the platforms. Spotify, Facebook, Meta, YouTube, Twitch, LinkedIn, the networks. And they actually accrue a ton of the value.
Speaker 2:And and it and it is extremely hard to start one of those companies. And if you do
Speaker 1:Yes.
Speaker 2:You're not talent at all. In you're probably an engineer. And you probably, at this point, have the backing of like a state government because that's the only way TikTok got going was, you know, so much energy and capital flowing in to actually, you know, breakthrough. The ship has sailed on starting like new platforms for the most part in my opinion.
Speaker 1:I think that's probably right. And and there and they don't need to buy talent.
Speaker 2:No. Not at all. It just comes to them naturally and they give 50% of the revenue or whatever the Yeah.
Speaker 3:We would rather we would rather just have you jump on our show from your studio
Speaker 2:Yep. Yep.
Speaker 3:And you benefit Yep. Because people are gonna trickle over to you and and
Speaker 2:And X makes don't have their
Speaker 1:ads and
Speaker 3:We just get to focus on making content and and not not focused on talent
Speaker 1:But the interesting thing is, you you just have to wonder, is there are we somewhere in a business cycle that's gonna lead to some consolidation? Mhmm. And when the talent consolidates, are they gonna start negotiating with the platforms? Is there gonna be some sort of
Speaker 2:Yeah.
Speaker 1:So I mean, that would be a natural business cycle. Right?
Speaker 2:Yeah. What was that new left wing substack publication that just announced? They said they're living out or something. Remember this?
Speaker 3:Yeah. What are the
Speaker 2:Anyway, there there's like a collection the the argument. So there's Yeah. The argument. There's a new a new publication that's launching that's aggregating a number of writers who are sort of on the left. And we were kind of debating, will they have leverage over different platforms because they're all together, or does it actually make more sense for Matt Iglesias and Derek Thompson to just have their own substacks and go direct?
Speaker 2:And then, you know, and then on the far other side is the is the platform, and there's really no one in between. But we're still early in the in this development of the the argument.
Speaker 1:Well, there there's something very strange. It says there's a weird confluence of worlds right now.
Speaker 2:Yeah.
Speaker 1:My son just texted me and he's he's been trying to get to you guys. Really? No way.
Speaker 3:Does he wanna does he wanna Does
Speaker 2:he wanna hop on? We'll send him a link.
Speaker 3:Yeah. We'll send him. You can join right after you.
Speaker 1:Listening. Maybe call my phone and I'll put you up to the microphone. Let's do it.
Speaker 2:Let's do it.
Speaker 1:He's consolidating the ad depart you know, the the management, the the lawyering, the
Speaker 2:Okay.
Speaker 1:Ad services, the distribution. He's trying to consolidate that onto a tiny little team
Speaker 2:Sure. Because
Speaker 1:these things aren't all this stuff is not needed anymore.
Speaker 2:Yeah. You an ad agency. Yeah. This is amazing. The the the chat is going wild.
Speaker 2:Everyone's really happy with this. They're calling they're calling your son the prodigal son. Well, he
Speaker 1:he here, I'm gonna see if I can him to call me. He said he emailed he his his partner named Jake emailed one of you guys.
Speaker 2:Okay. Okay. We'll have to follow-up. But
Speaker 1:They're they're having huge success, and he's the one that he's the one that started talking about AI. He's he's in the middle of all of this. The tech influencers, the the Google Store, the, TikTok Store, all of everything.
Speaker 2:Yeah. Yeah.
Speaker 1:But all of that is more efficient, more efficient, more efficient. Yep. Right? I mean, and the and what you have is these the the talent agencies and the ad agencies and the managerial services and the lawyers holding on. They're like they're like going into the fox holes
Speaker 2:Yeah.
Speaker 1:As opposed to adjusting and adapting and changing what what it is they do. They are just insisting that things continue to be done the way that they've always been done. And it's it's it's I guess a classic business mistake, right?
Speaker 2:Yeah. Totally. Yeah. I have one
Speaker 3:I have one one health one health question for you. Yeah. What are the John and I are starting what we hope to be a multiple decades run of daily live streaming. What would you have done when you were earlier in your career health wise to better sell, you know, you you seem to be doing incredibly well now. So what are what are the key things to look out for health wise to make sure you can do this for decades?
Speaker 1:Be hypomanic.
Speaker 2:Mhmm.
Speaker 1:Helps, which which a lot of successful business people are.
Speaker 3:Yes.
Speaker 1:Okay. You're going as I I hear many of the podcasts, you're gonna suffer, you're gonna work hard, you're gonna lose sleep. I wish I had paid more attention to sleep, but if I had, I couldn't have done most of what I did. Mhmm. I'm trying to pay attention to sleep now.
Speaker 2:Yeah.
Speaker 1:And you know, you've heard it all before. It's it's not this is not new, trust your instincts, explore, don't be afraid to fall down. I for me, the the the big as I look back on all the things I did, it it just the willingness to improvise and to go into dangerous situations. I mean, a lot of oh, he's calling now.
Speaker 2:Go on. Got the sun on.
Speaker 3:I don't
Speaker 1:know if they can hear you. He can I'll have to translate from you.
Speaker 2:Put on speakerphone.
Speaker 6:Hey. How's it going, guys?
Speaker 2:How you doing?
Speaker 3:What's happening?
Speaker 6:It's not obviously, but we my business partner and I actually emailed you a couple weeks back. Okay. We rep Roberto Nixon.
Speaker 2:Oh, no way. I love Roberto. That's amazing. Okay. Yeah.
Speaker 2:We gotta get in touch.
Speaker 6:My dad was on the air. Fantastic.
Speaker 2:I'm flying back from Seattle. Okay. Yeah.
Speaker 3:Okay. I do so we did have a little exchange.
Speaker 2:Yeah. Yeah. Yeah. Let's follow-up.
Speaker 1:Guys. He's gonna keep talking. Okay? He can't. I'll tell him what you said.
Speaker 2:He can't hear you.
Speaker 1:Keep talking, Douglas.
Speaker 6:I was gonna say that I so Rob and Jake are going to an Oasis concert next week in Pasadena. And I was gonna ask you
Speaker 2:Go ahead.
Speaker 3:You could
Speaker 6:meet Rob in Pasadena.
Speaker 2:Okay. Yeah. His
Speaker 6:sister also his kid her kids are going to Poly.
Speaker 1:And to Poly too. That's August went to Poly August. It's a little Like you said at the beginning of the show, only famous people go to Polytechnic
Speaker 2:school. Yeah. That's fantastic.
Speaker 6:No. I I just wanted to say hi and show you that we're not like the rest of those guys that probably email you randomly asking for things and wanting to to build a relationship. It's it's very funny that this all happened in a strange way.
Speaker 2:So Yeah. This is incredible.
Speaker 6:Actually have to take a call for this guy named Ror Keith. He's a Gen AI creator. Cool. Because he's in Dubai, and I, you know, just trying to get on the
Speaker 3:fucking You gotta get on with Dubai. We know we know how that goes.
Speaker 1:Alright. Get going. I I called these guys because they butchered my mymy.com. And and I did get some free heat. John, is that which one's John?
Speaker 2:I'm John.
Speaker 1:John John was actually at doctordrew.com when he was like 10 years old.
Speaker 2:Yeah. He interned for Yeah. Oh, yeah. I was in the very cold data center. Yeah.
Speaker 2:Okay. Racking servers.
Speaker 6:That's spectacular. So there's there's a long history on on on all fronts.
Speaker 1:Andy went to Poly. So okay. We'll talk later. Yes. Andy went to Poly.
Speaker 2:Amazing. Okay. Okay. I I I have one more question on the For ham or me? For you.
Speaker 2:For you.
Speaker 3:Okay. Sorry, Doug. Later, Douglas.
Speaker 2:Later. Yeah. For you. Last week, we had Mark Cuban on the show. He said that drinking raw milk is extremely dangerous and should never be done.
Speaker 2:Yeah. I drank Is there anything to that?
Speaker 3:I drank I I'll go on the record. I drank a liter of raw milk
Speaker 1:every day
Speaker 3:every day for two years straight.
Speaker 2:You were fine?
Speaker 3:Yeah. What's the Did he explain why?
Speaker 2:He didn't he didn't give any underlying rationale.
Speaker 1:Yeah. I I doubt he knows why.
Speaker 2:He was just saying that that the LLMs might convince you to drink raw milk and that might lead to some sort of doom scenario.
Speaker 1:You can get brucellosis, you can probably get tularemia, you can get listeriosis.
Speaker 2:Okay.
Speaker 1:And we can treat that with antibiotics, no problem. Okay. But they can make you very sick and they're very rare.
Speaker 2:Yeah.
Speaker 1:I I wouldn't do it, but I don't the fact that p look, there's something terrible going on
Speaker 2:Yeah.
Speaker 1:Where people are so fearful of being the biological agents that we are Yeah. And the reality that we are going to die, that they are afraid to live.
Speaker 2:Yep.
Speaker 1:Living well is the goal. Yeah. Not living forever, not living perfectly free of illness.
Speaker 3:Yeah.
Speaker 1:It's living a good life, and we are off of that. I can't That's great. We are so far off of that. It is disgusting. And for a nonphysician to have an opinion about milk that contains pathogenic organisms that he's never heard of or he learned to pronounce yesterday is disturbing to me.
Speaker 1:It's the same thing with when people went after hydroxychloroquine the day they learned how to say that word, a medicine I've been prescribing for decades. Yeah. So it's all we are so out of whack with this gonna live forever, fear of death, illness, infection. Oh, shit. Yes.
Speaker 1:We are we we my generation of physicians, we walked into illnesses that had one hundred percent fatality. AIDS had one hundred percent fatality, and we did not know what we were dealing with. And we didn't cower in the corner. We marched in. Mhmm.
Speaker 1:It's the right thing to do. Yeah. I don't know what's happened. I I can't understand this at all. But here we are.
Speaker 1:We need to focus on living well, living a good life, period.
Speaker 3:You you predict The
Speaker 1:logical stuff comes what may.
Speaker 3:Did you predict the decline of alcohol consumption?
Speaker 2:It's I did not. Not off a cliff, right?
Speaker 1:Yeah. Yeah. I did that's still surprising to me but it fits with the lack of dating and the lack of having sex and the lack of socializing. It it it that was the that was a prime social lubricant for decades. I'm glad to see it.
Speaker 1:It's a good thing. You know, the people are starting to understand it's a poison, and it's not good for any tissue in our body ever. But it makes me also I mean, what happens when did we become such pussies? When did that happen? That's my question of the day.
Speaker 1:When when did that happen?
Speaker 2:I don't know. I mean,
Speaker 3:I I I I You kid, have you ever said something like that on CNN? This is why you gotta stay off the networks. You just gotta do your own show.
Speaker 1:I I guess I'm I'm just I've been through so much lately. I've just lost all
Speaker 3:Inhibition. Strength.
Speaker 1:I I I'm a huge advocate for freedom of speech and freedom of many sort. I'm not happy about this flag burning thing. We freedom. Freedom. Freedom is what I'm all
Speaker 4:about now.
Speaker 2:So I I I will pitch you one possible explanation. I I think that the the fear of very, you know, consequential but low probability events, like the raw milk or the risk from raw milk or the risk from COVID Yeah. Is tied to a lack of belief in immortality and not in the sense of of living forever. Like, biological immortality, like, science will cure this and let you live forever. That's just one way to think about immortality.
Speaker 2:You can also think about immortality in your legacy. If you are written about and you have lived a great life, you will be remembered and immortalized. Can also You think about it through your children and also through the the afterlife. If you're spiritual or religious, you could think that you're going to heaven. And if you don't believe in any of those modes of of of immortality, you don't believe that you're gonna have kids or or do your life's work and be remembered in the afterlife or go to heaven or or you don't believe that science will be able to fix you if you do wind up getting sick from raw milk, then even a small chance has the has an incredible, incredible penalty, and so you you discount it very, very high.
Speaker 1:So I I agree with you with a couple of caveats. I I do agree with you.
Speaker 2:Yeah.
Speaker 1:Embedded in that observation is a general lack of meaning making. Is that if the meaning is I'm trying to ascend to a afterlife, whatever the meaning is of my living, that meaning should be deeply meaningful to me and purposeful. It doesn't it does not have to include an afterlife. It can also include just creating a good life for my children. That's why I'm here, to do that, that kind of thing.
Speaker 1:But but we people are here for their narcissistic needs, and that's when things become
Speaker 2:fragile. Yes.
Speaker 1:Because we we are not the beginning and the end of everything. We just are not. And if we think we're all there is is what's happening to me. Yep. Man.
Speaker 1:And then we have people whipping the frenzies and the fear and they're learning to control us with that and that that is disgusting.
Speaker 3:Yeah. So what about have you been tracking AI psychosis at all? Any thoughts
Speaker 1:I hear about it. I I don't I don't believe it. I'll tell you I'll I'll take I'll make a bet that that it's over way overblown. Was somebody who was already psychotic and, you know, whatever. There and not that the AI relationships are necessarily gonna be good.
Speaker 1:I I worry about that. But this psychotic episode, I don't know. I don't know if you remember back in the nineties, there were news stories every night.
Speaker 3:I wasn't born, sir. Okay.
Speaker 1:Do you have to rub that in? No.
Speaker 2:You have to.
Speaker 1:You just said no. I don't remember.
Speaker 3:No. Late later nineties, I got into the action. But
Speaker 1:But but there was news reports, like, every night, oh, these parties where all the parents throw their keys in a bowl, and they just they just grab a set of keys and that's who they go home with that night.
Speaker 2:Oh, sure.
Speaker 1:Sure. Yeah. The press, fake news I don't think people are sensitive to fake news. We have to be very sensitive to reporting these days. So much of what's being reported is fake, it's just to catch your eyes, it's just to get your attention.
Speaker 1:They they the the person that wrote that article was a 23 year old segment producer somewhere who doesn't do any research of of any meaning. It it just becomes something that they catch on the line. They saw other people report it, they report it. It it's ridiculous.
Speaker 3:Yeah. Mean, the the My my read on it is is it seems obvious now that if a large number of people take Ayahuasca, some of them are gonna have some type of psychotic break of sorts and maybe they were prone to or had some underlying issue that Correct. Enabled the issue with
Speaker 1:You're right. They already had a psychotic illness and they just happened to break when they were working with AI. But you're raising, you're making a very smart observation that AI world is populated by people that microdose on acid and do Ayahuasca, which I I tell you it categorically causes severe psychiatric problems. I've seen it my entire career. Scares the hell out of me.
Speaker 1:They should not be doing that.
Speaker 2:If you're listening Did you ever consider Yeah.
Speaker 3:If you're listening live from Burning Man, just listen to doctor Drew. Keep it. Did you ever go to Burning Man, by the way? This doesn't
Speaker 1:seem No. We got friends keep trying to get us to go. It's not it's not my jam exactly.
Speaker 2:It's not my jam either.
Speaker 3:Well, you could go there and try to try to, you know Yeah. Talk people out of it. How about we stick
Speaker 2:to the Bud Light, buddy?
Speaker 3:Yeah. Let's stick to crushing beers.
Speaker 2:Have a couple glasses of wine. Anyway, this has been fantastic. Thank you for joining. Coming on, cracking the record.
Speaker 3:Come back on anytime.
Speaker 2:We appreciate this. We'd to have
Speaker 1:you guys. You guys are great. I I learned something just listening to you guys. This talking about the playing card the baseball cards. That was fast.
Speaker 1:You guys have a great you're obviously extremely well trained in in your in your respective fields and it's very interesting to hear you talk about these various markets and opportunities and things. And I leave with one caveat. Please. If you don't call my son, he's gonna kill me.
Speaker 2:I know. We will definitely.
Speaker 3:We're gonna we'll go to this concert with
Speaker 2:him. We will. We will.
Speaker 1:Exactly. And it's in Pasadena. Yeah. I live
Speaker 2:in Pasadena now.
Speaker 1:You live there now?
Speaker 2:I do. I live over the Rose Rose Bowl is literally walking distance for me.
Speaker 1:So do I.
Speaker 2:Amazing. There we go.
Speaker 7:Okay. We should Did
Speaker 3:you guys just become best I'll
Speaker 2:swing my address. I'll I'll I'll swing by. We live we live over here by the rack of Bud Light.
Speaker 1:We live by Annadale.
Speaker 2:Oh, okay. Yeah. I'm right over there.
Speaker 1:Okay. So Just up Late Vista. Excuse.
Speaker 6:I don't
Speaker 2:wanna get too I don't wanna get too too precise, show up with people in my front door. Anyway, thank you so much for hopping on. This was fantastic. Great hanging. We will talk
Speaker 6:to soon.
Speaker 2:Bye. Massive news from SpaceX last night.
Speaker 3:They did it.
Speaker 2:They did it. Flight 10 made it back, took off from Starbase, South Texas. The, the booster landed in the ocean in the, I think, the Gulf Of America, technically.
Speaker 3:That's absolutely right.
Speaker 2:And the actual Starship executed a successful flip maneuver, deployed a mock payload of a bunch of nonfunctional Starlink satellites, survived reentry just barely as we'll see. It was a really dramatic video. It was amazing. And then splashed down on target in the Indian Ocean.
Speaker 3:It was a full send.
Speaker 2:It was a full send. It was it was a crazy, crazy
Speaker 3:NASA could never.
Speaker 2:Watch. Yeah. Let's watch the recap video that the Wall Street Journal put together. This is pretty interesting. Starbase, Texas.
Speaker 2:This is yesterday. They scrapped two attempts on Monday and Tuesday because of, some some problems with the the vehicle, but they got it off the ground. Look at that. They lit the candle Stunning. Going to space.
Speaker 3:And so I wish we could get a better sense for just how massive it is from those angles.
Speaker 2:And so that those are the dummy Starlink satellites, the dummy payload.
Speaker 3:That little motor conveyor belt on the left.
Speaker 2:Yeah. Just the number of things that have to go right to actually release something from this rocket.
Speaker 6:That's
Speaker 2:not what And then this is the crazy part. There's just a bunch of Take a
Speaker 3:That's not what we're
Speaker 2:seeing come from?
Speaker 6:Just take a hit.
Speaker 3:We clearly didn't need it. You would
Speaker 2:think that as soon as I saw that, I was like, okay. It's over. The whole thing is gonna blow. For sure, it doesn't definitely doesn't make it back. Because if it's like losing parts, like, every part should be important.
Speaker 2:Right? Like, what's going on here? And so engines? And they're also the whole time they were, like, testing the the flaps, like, really pushing them to the limits going farther. There it is splashing down in
Speaker 3:the ocean. You were mentioning earlier there's a sound bite of them saying they were they were
Speaker 2:actually They were going further than they needed to. So they were doing things like like, okay. Let let
Speaker 1:let's stretch. Moment.
Speaker 2:And then boom. And then the Washington
Speaker 3:Convenient cut. You would have thought the journal and the legacy media would have let that Yes. Yes. A little bit longer. Yeah.
Speaker 3:The massive explosion.
Speaker 2:Yeah. I mean, the vibes the vibes going into this were rough, honestly. Lots of people with the Elon's been distracted by politics take. Lots of people with the Elon too focused on AI romantic companions take. We covered the You
Speaker 3:can imagine the conversation between Elon and Ani yesterday, right before the launch. You got I this,
Speaker 2:mean, you know that know that Ani apparently, allegedly, the original Ani romantic companion model runs on the non reasoning model. Just Grok three, I guess. Just pure love. Pure love. And and if if there's any evidence out there in the just market of AI chatting and companions is that you don't need a reasoning model when you are chatting with a romantic companion.
Speaker 2:So a lot of, like, the backlash to the GPT five launch was something like, you know, people were using it not just as a romantic companion, but just as, like, a life coach, somebody to talk to. It was very conversational. And that quick back and forth was what people actually enjoyed. They liked the tone. They didn't care that it wasn't, you know, incredibly good at solving hard math problems or like the IMO or whatever.
Speaker 2:What what you got for me, Tyler?
Speaker 7:I think there's also something to be said for like reasoning models kind of mess with the vibes. Yeah. Totally. It's the music thing where
Speaker 2:Yeah. Yeah. Yeah.
Speaker 3:Sometimes you want a friend that's not gonna think too hard. They're just gonna Yeah.
Speaker 2:Yeah. Yeah. A 100%.
Speaker 7:Like in in the musical like taste thing
Speaker 2:Yep.
Speaker 7:All the reasoning models gave like these weird answers because they would like prefer, you know, hardest names with numbers, like that.
Speaker 2:Yep. Yep. Although, I mean, I think the reasoning models actually had the best taste of all, but that's a bit of a hot take.
Speaker 3:But we gotta pull up this post from Red Bull Futurist. It's very important. He says, super heavy. The effing goat. Wow.
Speaker 3:And I just needed to highlight this because obviously, Red Bull, some of Red Bull futurists work actually has lot Yeah. Of way into Of course.
Speaker 2:It's amazing.
Speaker 3:So absolute legend. A win for Red Bull, really. For sure. For sure. Yeah.
Speaker 3:I'm it's actually surprising surprising that that Red Bull and SpaceX haven't tried to collab yet. You'd think that Red Bull would just be like, we'll give you millions of dollars if you just put Red Bull branding over this. Yeah.
Speaker 6:That'd be
Speaker 3:Why not? It'd be good it'd be good for both parties.
Speaker 2:Even the explosions are feel like on brand for Red Bull.
Speaker 1:Totally.
Speaker 2:Red Bull's down for the crazy risk
Speaker 3:taking. I could see Elon going with White Monster too.
Speaker 2:Really good.
Speaker 3:Something here.
Speaker 2:You really should do that. I mean, space advertising is special and maybe you don't want to delete that.
Speaker 3:I mean, are you Would you go so far to say the White Monster brand isn't special? Would you
Speaker 2:say I guess it would be added Red Bull.
Speaker 3:Would be added It's special.
Speaker 2:Yeah. They the reason I was bringing up the reasoning models was because apparently, Elon wanted Ani to use the reasoning model. Like, the the the AI the AI companion has to be able to do the hard math problems,
Speaker 1:which
Speaker 2:is So so so maybe maybe she really was in use making doing rocket science and and calculating the last final decisions before this this rocket went out. It was a huge success. The Wall Street Journal has kind of the play by play here. Space Hawks pull SpaceX pulled off a smoother test of its Starship rocket managing a more complete mission after setbacks earlier this year. The Starship spacecraft flew through space after launching from the company's South Texas complex Tuesday around 07:30PM ET.
Speaker 2:The vehicle successfully deployed a batch of dummy Starlink satellites and reentered Earth's orbit facing intense heat and forces before splashing down in the Indian Ocean. This is the tenth launch of Starship. I believe this was the this was ship like 37 or something. They've built a lot of these. Not all of them have launched.
Speaker 2:Some of them have been scrapped. Some of them blew up in the test stand. Like, they really push these things super hard. So it's a 403 foot tall rocket. They started testing this in 2023.
Speaker 2:There's been a series of explosions, mishaps, previous test flights that have been cut short. Elon Musk has much riding on the rocket envisioned to one day carry satellite scientific devices and eventually astronauts.
Speaker 3:Just to put this into context, the White House is 70 feet tall. Wow. So this is
Speaker 2:Yeah. It's it's like the size of the isn't it closer to the, the Statue Of Liberty? I think it's like around that tall, 403 feet. I have to look that up.
Speaker 3:For The Statue Of Liberty is 305 feet.
Speaker 2:Oh,
Speaker 3:absolutely mug. Mugs.
Speaker 2:An extra feet 50 feet on that. For now, the company is pushing to show it can consistently fly Starship and experiment with its design space up SpaceX setup Tuesday's mission to stress test parts of the Starship spacecraft. We certainly saw that, on display with the parts flying all over the place, seeking to give engineers information to continue developing the vehicle. Basically, the the the the the calculus here is, how cheap can you make this thing If you use, you know, duct tape, will that work? Will you if you use tinfoil, will it work?
Speaker 2:Like, they really are pushing these things like crazy crazy hard.
Speaker 3:You I think the other the other way to put this into context Good. Not everybody is fortunate to be able to launch build and launch rockets for a living. But anybody that's built software knows that even if you're launching a relatively simple feature
Speaker 2:Oh, yeah.
Speaker 3:It'll oftentimes break and have issues and bugs and things like that. And Yeah. It's a little bit you have a little bit more leeway to ship stuff and and make changes on the fly. Yep. In this case, they're doing it in this incredibly public setting where the Internet is gonna have a a very strong reaction one way or another.
Speaker 3:So the pressure is just insane.
Speaker 2:So Musk wants both the Starship booster and spacecraft to be fully and rapidly reusable, more akin to an airplane than a traditional rocket. SpaceX has made major strides with reusability with its workhorse Falcon nine rockets, which are powered by boosters. It can be used many times. SpaceX faces self imposed external deadlines with a much larger Starship. Musk wants to launch an uncrewed version of the vehicle to Mars next year, but has said meeting that goal will be tough.
Speaker 2:Of course, there's a Mars transfer window that only comes up, I think, every eighteen months or so. So it's really critical to hit it in 2026, or else you gotta wait till 2028, I believe. In 2027, a lander variant of Starship is supposed to be ready to carry astronauts on a NASA moon mission through the agency's Artemis exploration program. That's gonna be really hard because I think they have to refuel in orbit and then also make it safe enough that astronauts can fly on it. Like, they have a lot to
Speaker 3:do there. This is why we need to get Ani to be able to solve complex physics.
Speaker 1:For sure. For sure.
Speaker 2:Today, we are talking about LaBooBooz and the story of Pop Mart, which to me really stands out as a similar like, in the .com boom, there was this, the Beanie Babies went on a similar run. Incredibly popular, built on the back of .com technology. I remember going over to a friend's house and loading the beaniebabies.com website, and it was so heavy because it had all these images.
Speaker 3:Did it take, like, minutes to load?
Speaker 2:It took minutes to load because they like, whoever built the website just didn't kind of think about It probably did. How long
Speaker 3:it would take. But even then it was like, this is so cool. Yeah. It takes thirty minutes to go to the store.
Speaker 2:Exactly. Oh, if it takes five minutes to load all down. And so, yeah, the page would load, the HTML would load, and then slowly one image after another would load in. And you can really feel the difference at the time. Many people were on dial up, which was 56 k, which is like a staggeringly slow speed compared to what you get even just on like a plane.
Speaker 2:Yeah. And then DSL was
Speaker 3:Posted one level that United has Starlink now.
Speaker 2:Yeah. And I think it's 300 megs per second. 300 megs. So that's that's, what, 6,000 times faster than what we were experiencing back in, the mid nineties. Yep.
Speaker 2:And so then you could upgrade to DSL. DSL was between 256 k and 1.5 megs. I had a friend who had a t one line, which was like enterprise level Internet in the nineties. It was one meg up and down. So you could get equal upload symmetrical line.
Speaker 2:And he could still he could load the Beanie Baby website faster than anyone. It was like true status symbol at the Yeah. Was alpha. His parents were very successful.
Speaker 3:What was the the the most expensive Beanie Baby transaction ever? Do you know?
Speaker 2:I don't know. I I do know that prices peaked throughout just they perfectly tracked the .com boom. So in '2 in 1998, Ty, which is Ty Warner, his company is called Ty, t y, they make Beanie Babies. They made $1,400,000,000 in sales, making it one of the fastest growing toy companies in history. Two years later, the market crashed almost overnight.
Speaker 2:Prices on the secondary market plummeted as supply overwhelmed demand, and speculative buyers exited. So people were in the habit of and, yes, age the chat is correct. EBay was a major, major driver of Beanie Babies growth because people could buy them, and then the secondary market was way more liquid than ever before. Before, it was like, okay. If you buy some some rare drop or some limited edition thing and you wanna go sell it, you have to go to, like, a trade show that maybe happens every once in a once a once a year.
Speaker 2:You have to find maybe your local shop, but there's not that much liquidity. Remember when we were talking to our friend about the, the the the the collectible card market, Beatles memorabilia? He was saying, like, I only need two buyers. It's very easy to find two buyers if you're if you're if you're interacting at Internet scale.
Speaker 3:Totally.
Speaker 2:It's harder if you're in some town and you have a rare Beanie Baby and you need to see, are there any other crazy Beanie Baby fans in this town? So eBay was a huge yeah. Beanie Baby is the original unicorn startup, essentially. I mean, it was it was an overnight success in the sense that I think the business was gone for about a decade before the boom, but they rode the wave of
Speaker 3:the Internet. Interestingly Yeah. Most expensive Lububu ever sold was 170,000 in June. Yep. And the most expensive Beanie Baby ever sold was something around half a million dollars.
Speaker 2:Half a million dollars. So we got room to run. We got room to run-in the LubuBoo market. So my question is like, what is driving the LubuBoo? Enjoy your victory lap.
Speaker 2:Get out there. Get some exercise. Do some push ups halfway through the lap. Aiden. Enjoy.
Speaker 3:Belt ski. Did we say that right?
Speaker 2:Belt skis. Yes. Belt skis?
Speaker 3:You said your full name now. There Thanks we
Speaker 2:for watching. The yeah. So Laboo clearly, clearly a beneficiary of the social media boom of TikTok, of the unboxing culture, TMU culture, live shopping culture, flex culture.
Speaker 3:Because you these people put them on, you know, their their purse.
Speaker 2:Interestingly, even though it's like it's like money is cheap right now. Everything is going up into the right. The market is booming. I I can't find a yeah. I can't really find a bridge between, like, the AI boom and the and the boo boos.
Speaker 2:It seems like it's just the social media boom that we're continuing to see. The yeah.
Speaker 3:It's the fart coins. The boo boos.
Speaker 2:Yes. Yes. Yes. Yeah. There's a little bit of that.
Speaker 2:There's a little bit of just like gambling culture has has infiltrated everything from sports betting, obviously, as being is legal in more states and and and has been on a tear for a long time to folks big gambling on crypto and stocks and out of the money options all the way to, you know, the the collector culture on all sorts of different platforms. Like, there's a big there's just a broad boom happening here. And then there's also the China angle, which I think is interesting. We were talking about this yesterday that China hasn't had a major cultural export, and this might be sort of the first one more or less. Like, TikTok counts in some ways, but TikTok, I see it as like a bucket that fills up with the local culture of the people that open the app.
Speaker 2:Like, if you're in It doesn't in LA, you see LA.
Speaker 3:Chinatown when you
Speaker 2:go Yeah. Exactly.
Speaker 3:But whenever you're
Speaker 2:But you can certainly access that if you wind up in that filter. If you search the right keywords, and then you can
Speaker 3:But same with it.
Speaker 2:Go there. Yeah. Yeah. Same with Instagram. But by default, I don't see TikTok as, like, a uniquely a a uniquely Chinese cultural export.
Speaker 3:It's an export, not a cultural export.
Speaker 2:It's a technology. It's a technology. And and, of course, like, China has been exporting, like, manufacturing technology and been manufacturing prowess for a long time. And so my
Speaker 3:Got a got a real win with the demon dolls.
Speaker 2:They do look crazy. Right? I just I don't like them. I I they just rub me the wrong way. I I don't know.
Speaker 2:They're something is weird, but I'm just not into it. I don't know.
Speaker 3:That's why we bought
Speaker 2:into it.
Speaker 3:One for Bill Bishop's dog.
Speaker 2:Toshi.
Speaker 3:We're we're excited for Toshi to rip it apart.
Speaker 2:It apart. Yes. It it feels it just it's not a good look. I don't like the aesthetics at all. It's very odd.
Speaker 2:I would not
Speaker 3:buy one for my child.
Speaker 2:The bigger question that I have that I think we wanna answer so we're gonna dig into the history of Pop Mart, take you through some of this the history of Lububus. The the question that I have is, like, the the horse is out of a stable with, like, gambling on toys, clearly. Think about the TikTok story. There was a big discussion, nationwide discussion a few years ago. Should we ban TikTok?
Speaker 2:Is it spyware? Is it influencing our culture? Is it causing brain rot? Where do we land on that as America? We said, yeah.
Speaker 2:It's fine. We're good. The answer was YouTube will compete in shorts, and Instagram will compete in reels. And, you know, TikTok will be out there and, you know, buyer beware. Like, you know what you're using, and you're an American.
Speaker 2:You're a free person. And if you wanna use that app, you can. And if you wanna come over to a different app and you trust, Mark Zuckerberg
Speaker 3:Stated versus versus field preference. People are like, I just wanna follow my friends. Yep. The the the, you know, feeds that are algo driven
Speaker 2:Yep.
Speaker 3:Get used more.
Speaker 2:And so my my pitch and what I'm what I'm kind of digging into what I wrote about in the newsletter this morning, you should subscribe at Substack, to our Substack.
Speaker 3:Tbdn.substack.com
Speaker 2:is is the conclusion to the TikTok debate was the YouTube team and the Instagram team need to launch direct competitors and take it very seriously. And Mark Zuckerberg invested, like, tens of billions of dollars, I think, in, data center build out to actually support Reels and the algo feeds. And they took it really seriously, and they executed very well. So what's the conclusion to the Lububu story? Well, it's probably like Ty, the maker of Beanie Babies, or Mattel, the maker of Barbie
Speaker 3:Has to get
Speaker 2:into blind boxes. Yeah. Like, that's the only answer. That that's the way the, like, the arrow of progress moves by one direction. Gamble.
Speaker 2:They wanna gamble. And so I think that that's the end state here, and I'm just I'm I'm that's the situation that I'm monitoring. I'm not holding my breath being like, oh, yeah. La boo boos are going away anytime soon. Yeah.
Speaker 2:Sure. There might be, like, a bubble, and then it subsides. But in general, I think that the future is, like, more mystery boxes under the Christmas tree generally broadly in American culture. Like, we love gambling. We love freedom.
Speaker 2:Pick your poison.
Speaker 3:That's where you're gambling as a gift is crazy.
Speaker 2:Like, I
Speaker 3:buy you this blind box.
Speaker 2:You never give someone scratchers? Give someone scratchers. It's great.
Speaker 3:We should give the team scratchers. Send them off into their three day weekend.
Speaker 2:I bet somebody was like, I'm I'm into scratchers. I I have friend in college who was into scratchers. Really? You know, the thrill of a scratcher. I bought one lot of ticket in my life and it was electric.
Speaker 2:I was like, I'm gonna win. Like, this is gonna happen. And then it didn't. And I was like, okay. I'm never spending $2 ever again on that.
Speaker 2:But anyway, this is what happened with video games. They went free to play plus micro transactions. The whales drive everything, price discrimination and everything. We see this with OnlyFans. We see this with the future of romantic companions.
Speaker 2:Price discrimination is key, and this will probably unlock some of that. It'll be interesting to see where it goes. But I think if you're a toymaker, you gotta get into mystery boxes, unfortunately. Maybe maybe unfortunately, but, like, that's where the that's where the culture's moved.
Speaker 3:Late stage capitalism.
Speaker 2:Pretty much.
Speaker 3:Which I would say we're just getting started.
Speaker 2:Pretty Anyway, let's go through. Brandon Guerrelle has a fantastic thread on, on Pop Mart and Tyler has, the story here.
Speaker 3:Full history.
Speaker 2:Do do you want to take us through the history?
Speaker 7:Yeah.
Speaker 2:Tyler, you got for us?
Speaker 3:Can we pull this up on VHS, Ben? I think this is this is gonna
Speaker 2:be important. There we go. We go. Here is Dan.
Speaker 7:Oh, man. Yeah. So I I think we should
Speaker 3:I first just love the way this looks. Yes. I can't help it.
Speaker 7:Okay. Let's first go through some big big numbers here. So Yep. Pop Mart, public company currently at what? Like around 55,000,000,000?
Speaker 7:Yes. Hong Kong
Speaker 2:Wang Ning is now the tenth richest person in China. He's worth $28,000,000,000. Wow. Pretty pretty crazy.
Speaker 3:Credit is due.
Speaker 2:And a lot of these a lot of the data sources here are Chinese and we tried to double check everything by translating, but there might be some details that are wrong. So, you know.
Speaker 7:Okay. So, yeah, they have almost 600 retail stores, 2,500 vending machines, revenues at 1,800,000,000.0.
Speaker 2:Vending machines. That's
Speaker 7:that's really the big thing. That that was big. It kind of so the kind of main story of Pop Mart is that they basically took a lot of things that were first in Japan and then brought them to China Okay. And then exported them basically worldwide.
Speaker 2:Yeah.
Speaker 7:But yeah, the revenue is a 106% growth year over year and then 700,000,000 of that is just overseas?
Speaker 2:Yeah. The stat was crazy. Think in the first half of this year, they beat last year's total revenue. Yeah. And they're already like a scale pretty Is that huge company.
Speaker 3:Is that good?
Speaker 2:It's I think it's better than Nvidia. It's the backbone of the economy. Okay. So take us 20 through some of the
Speaker 7:10 Yeah. In Beijing, Wang Ning starts it. Okay. Originally, basically, it's just like retail store for these little collectibles. Yeah.
Speaker 7:They don't There's a bunch of stores that do like license other people's IP. So there's like I think they originally started with some marble. Okay. Yeah. But then really the I mean, the majority of the revenue is just from, like, their custom IP that they basically license from artists they find.
Speaker 2:Yeah. So that's the nature of, like, Pop Mart. Like it's like pop culture market. Yeah. And Brandon says And it's single variety mall store.
Speaker 2:Think Spencer's are Hot Topic. Couldn't get they couldn't get investment at the time because no one thought adult toys would work. Now he's the tenth And
Speaker 3:when Wang was growing up, his parents ran small shops.
Speaker 2:Oh. So it was Yeah. In the DNA. Family. Okay.
Speaker 7:Yeah. So then 2014, this is when they basically bring over these sunny angels. These are the Japanese like figurines. Yep. And this is when they they start the blind boxes.
Speaker 7:This is, like, really the main thing that spurs the rest of their growth. Yep. 2015. Wait.
Speaker 2:Before this, this is this is actually crazy. Brandon has some extra context here. So he starts the company in 2010. A year out of college, he had an undergraduate degree in advertising and a short stint at the Chinese version of Twitter. His single variety store in Beijing in a Beijing mall, it's essentially a reseller.
Speaker 2:He has seven employees. He spends two years selling third party stuff on thin margins trying to scale with debt, but he's it's hard to finance because investors don't get selling toys to adults. He manages to raise $320,000 equivalent in in RMB, and then 1,000,000 around there in 2013, which he opens to use which he uses to open three new mall shops. And then in 2014, he hits his first lick, finds a repeatable format blind boxes. So take us into that.
Speaker 7:Okay. So then so they start with that. These are still different figurines from Japan?
Speaker 2:Yeah. These Sunny Angel blind boxes. Yeah. They look kinda like nineties troll dolls. Interesting.
Speaker 3:Yeah. And then Yeah. And and I I don't think we already we covered specifically what a blind box is. It's you're going in, you're paying a generic price for something and you have no idea what's in it. It could be the super generic one of a 100,000 item or it could be ultra, ultra limited and so you just get this massive buyers get this massive dopamine rush when they're buying it.
Speaker 3:Paying and that whatever item they unpack might immediately be worth like some significant multiple of what they paid. Yep.
Speaker 2:Kind of like angel investing.
Speaker 3:So it has it has yeah. But but way more condensed. It's like I buy this and then I immediately figure out am I am I gonna get
Speaker 2:Put a 100 crazy thousand dollars in Turn. 10 cap.
Speaker 3:But unlike angel investing, think there's like a floor. Right? Angel investing, you usually go to zero. Labooboo is like have somewhat stable Yeah. Like it has some market value.
Speaker 2:So if you're trying to like gamble less and you're addicted to angel investing, maybe downgrade to just Labooboo's and loot boxes.
Speaker 7:Big attraction of especially libubus, which we can get into later Yeah. Is like they have like these sets that come out. So it'll be like
Speaker 1:And you
Speaker 2:would collect the full set.
Speaker 7:Yeah. It's like 10 and then they're basically all the same except like the color of the fur is slightly different or something.
Speaker 2:Yep.
Speaker 7:But then So people are trying to create
Speaker 3:set which will then sell for more
Speaker 7:Yeah. But obviously, if there's 10, you can't just buy 10 of the boxes because you're probably not gonna get all of them. Yeah. So have to buy Do
Speaker 3:you think that Porsche should get into blind boxes? Imagine if you just Imagine if like a nine You could just buy nine elevens only with blind boxes. It's like 200 ks. You might just get a bay you might get a Carrera T like super base model. You might get a GT three RS.
Speaker 2:You might get an ST. Wow. Yeah. Yeah. There might be something there.
Speaker 2:I don't know.
Speaker 3:I want to do it. I I mean, people would be people would be sending it on those.
Speaker 2:I think so. Yeah. I mean, and you just work out the expected value. Right? So you just charge whatever the the the expected value is.
Speaker 2:There I there isn't quite enough of a delta. They need to throw in like a Carrera Carrera GT as well. A few of those as well. Yeah.
Speaker 1:Used to
Speaker 7:see a similar thing in the sneaker market when that was like a really big thing. Really? On eBay, you would see these like a third party like mystery boxes.
Speaker 2:Oh, eBay would just do it. Interesting eBay, but that's crazy because Yeah. Like that's even like less regulated because they can just totally like cook the box. I I I Oh, yeah. For sure.
Speaker 2:Like versus like a real company that has probably some sort of oversight.
Speaker 7:Yeah. I mean, I you you don't really know how many people were actually buying it. Like, it was just, for YouTube that they
Speaker 6:would make the videos
Speaker 7:like, oh, I bought this $500 mystery box.
Speaker 2:I I remember I bought a mystery box of cords on a woot.com, which was an electronics reseller that was bought by Amazon. And we That's so Kugenko.
Speaker 3:It's an exciting box of cords.
Speaker 2:It was just electronics. Electronics. It was like so woot.com would go around and find like like a bunch of electronics that have been discounted. I bought a I bought an HD projector that was probably, like, $3 for, like, $600 because, like, they were, like, going out of stock, and they just needed to, like, liquidate. And so we would go and buy the liquidation and then put it on the website.
Speaker 2:You could just buy it, but it was limited time. They would just do one daily deal every day. And one day, they just did a mystery box, and you could just buy they would just baby you, like, literally, like, whatever was in their facility, they would just pop back, like like, pack up for you. And who knows? I got, like, oh, this is like HDMI to DVI cable or something.
Speaker 2:Yeah.
Speaker 7:You can probably trace back something like do you remember Storage Wars, the show?
Speaker 2:Yeah. Yeah.
Speaker 7:Yeah. It's like they open it, you can't go in but you can just see the front and then you can try to estimate the value.
Speaker 2:Yeah. Yeah.
Speaker 7:Yeah. And then So there's probably some lineage there.
Speaker 3:That's great. So when did China figure out that this was gambling? Because they banned the sale of LaBubu's to kids under eight years old. Yeah. But that still means you got ten years before you're legally adult here in The US at Yeah.
Speaker 3:Least where Yeah. Also, I I don't gambling
Speaker 1:is
Speaker 7:know how many like actual eight year olds are going to the store and buying in. It's not their parents.
Speaker 2:Yeah.
Speaker 7:So it's kind of unclear.
Speaker 2:Well, you're worried about your employees gambling with your company funds, get on ramp.com. Time as money say both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Dot com. Very easy to set a a rule in Ramp.
Speaker 3:No pop.
Speaker 2:No LaBubu. No Pop Mark. Anyway, continue.
Speaker 7:Okay. So let's go back. So Yeah. So 2015 is when LaBubu first appears as it's in a picture book. So Okay.
Speaker 7:This has nothing to do with Pop Mark. Mhmm. It's just this other artist, Kai Singh Leung. Mhmm. And then 2016, this is Pop Mart's first like kind of real IP that they created that like went super viral.
Speaker 2:Yes. Ning saw in 2016, Ning tries something new. He flies to Hong Kong and meets with artist Kenny Wong who had created the trendy toy figurine Molly in 2006 and was a big designer in the toy niche. There he negotiates an exclusive license with Wong to develop and sell Moly products and blind boxes. Interesting.
Speaker 7:So I I I think this was it's done around 800,000,000 in revenue Woah. Since 2016.
Speaker 2:Let's go. Yeah. So selling Molly not only gives Ning more control and capitalizes on trendy toy plus blind box signal, but it capitalizes on Kenny Wong's fan base and leads Ning to his next big unlock, betting big on controlling existing toy IP with a built in fan base instead of selling third party. So in 2017, sales of Molly are going nuts. Total 22,000,000 by end of year for Molly.
Speaker 2:Pop Mart rolls out vending machines, reducing rent they had to pay in malls and establishing way deeper reach with fandom. Company begins repeating
Speaker 1:It's great.
Speaker 2:It's replicating the molly
Speaker 3:part. Unregulated slot machines.
Speaker 2:Yeah. Basically. And then they Puck Puckie is another Hong Kong artist derivative. They launch it then. They launch a seder.
Speaker 2:You know, it's like half, half like goat legs, which is very odd. They're getting
Speaker 3:Not beating the
Speaker 2:Antichrist delegation. Yes. If you've been at the PT lectures in SF for who the Antichrist is, I think we got a lead here. I think we got a lead. Did you already write that?
Speaker 2:Yeah.
Speaker 7:This is already there. Yeah. You
Speaker 2:already wrote that? That's amazing.
Speaker 7:Many there's a lot of allegations here. I mean, it's unclear whether, you know, what's I the original think we solved
Speaker 2:it, folks. Yeah. We've solved it. Wait. Is there really a star on them?
Speaker 2:Is that the thing or
Speaker 1:do you No. I just broke the pentagram. Okay.
Speaker 7:Well, that's why yeah. Question mark.
Speaker 3:Max over in the sub stack chat says we need to tokenize the Lububus. I think that's I think that's how
Speaker 2:you That's obviously happening next. We know that's gonna happen. We know that's gonna happen. CSGO loot boxes walked so Lulu boo boo could run
Speaker 3:this. Brandon in the ex chat says we gotta get a bezel box going. I totally agree.
Speaker 2:I agree.
Speaker 3:Quaid, let's get some let's get some blind boxes going. You might you might get a Nautilus. You might get a tutor.
Speaker 2:Yeah. There you go. There you go. Okay. So where are we?
Speaker 2:Okay. So
Speaker 7:now 2019 Okay. Labubu is then licensed to Pop Mart.
Speaker 2:Yep. So just in in 2018, right before this, sales spiked to 73,000,000 on the back of Molly. Around this time, Pop Mart builds its own in house design team, the Pop Design Center, like a Porsche design center. It becomes a powerful pipeline alongside ever more exclusive artist licenses and big nonexclusive entertainment licenses. If you wanna entertain people on a stream, get on Restream.
Speaker 2:One livestream, 30 plus Destiny That's right. Stream and feature options wherever they are. Continue.
Speaker 7:Okay. So so they licensed in 2019, but they don't actually release, like, the modern Lu Bu Bu Doll Okay. Until 2023.
Speaker 2:So it's in the book or whatever. Yeah. So like they're starting to build the lore, build the IP.
Speaker 7:They do characters, they do little figurines, but it's not like the the kind of modern Yep. Instantiation. Mhmm. So then let's go to 2020. They IPO at 7,000,000,000
Speaker 1:Okay.
Speaker 7:In Hong Kong. And then Wait.
Speaker 2:Hold on. So so continuing with Brandon, 2019, Pop Mart begins selling LaBubu blind boxes, an exclusive deal with artist Kasing Leung, LaBubu's original character in Leung's picture book trilogy called The Monsters, but was selling his figurines in Hong Kong by 2015. At time of the deal, it's only popular among niche toy collectors. And we do have some images in the deck, by the way, guys, if you wanna pull up the pictures of these these monsters. Yeah.
Speaker 2:If you scroll down a bunch, there are some photos of the Labubus. It it has like kind of a street art vibe, very chaotic drawings. Keep going. There's one more. Keep going.
Speaker 2:One more. Keep going. That's Molly. There we go. That's the first Lububu.
Speaker 2:The Monsters Trilogy by Kha Sing Lung, the story of Puka, Pato, and the girl, Miro's Requiem. And so these started selling in 2039. In 2020, Pop Mart raises a $100,000,000 on a $2,500,000,000 valuation. Hit the gong. I see a large IPO.
Speaker 2:And a few months later, IPOs in Hong Kong. Stock rips 80% on open day opening day. You thought meme stocks were just an American phenomenon. Meme stocks are a worldwide phenomenon.
Speaker 3:Across the pond.
Speaker 2:Ning's net worth doubles overnight. He's worth 3,200,000,000.0 at open, 6,000,000,000 at close. Pop Mart has a 12,500,000,000.0 market cap at close. That's a big company. That's a big company.
Speaker 2:So let's continue.
Speaker 7:Okay. So so 2023 is when the blind box, lububu, like, phenomenon really takes off. So this is, I think, probably, it's it's mostly due to TikTok. You see a lot of this. And then, yeah, 2025.
Speaker 7:Right now, it's like around 55,000,000,000.
Speaker 2:Now it's now it's at 55. Absolutely incredible. What a run. Should we pull up the Wall Street Journal video, watch some of that? What do you think?
Speaker 3:Yeah. Let's
Speaker 2:do it. While they're pulling that up, let's tell you about figma.com. Think bigger, build faster. Figma helps design development teams build great products together, folks. Get to figma.com.
Speaker 2:Design your next Labooboo drop.
Speaker 3:Yeah. I mean, developing real IP this quickly is incredibly impressive. Yeah. Yeah. IP that can do billions of of
Speaker 2:Yeah. I mean, it just takes so long. I remember learning about the the Lucasfilm acquisition that Disney did. Even the Marvel acquisition. This is these are like they were big acquisitions at the time, but, like, single digit billions, low double digit billions.
Speaker 2:Yep. Like and then they just created so much value as they actually monetized the IP and created, like, shows and merch and, like, ran the Disney machine around it. Yeah. Seems like Pop Mart's capable of running, like, a monetization playbook on top of somewhat new IP, which is pretty crazy. Anyway, let's pull up the Wall Street Journal video and watch a bit of that.
Speaker 2:Aiden says nightmare fuel. I agree.
Speaker 8:Whenever Chinese retailer Pop Mark drops a new LuBoo designer toys, it sells out within minutes. Okay. Sold out. Insufficient stock.
Speaker 2:It does seem like It's hard
Speaker 8:to get toys.
Speaker 2:Like, it's it's truly like a worldwide phenomenon in a sense that, like, it's not just women that are doing it. It's not just men. It's like it's really being what I saying.
Speaker 3:Not just adults. It's children. Children and adults.
Speaker 2:Yeah. Yeah. You Yeah. Would think it's like, oh, it's just kids. So, yeah, their revenue doubled in the
Speaker 8:have flooded social media. Fans flock overseas to buy exclusive products.
Speaker 2:I mean, it it just has the
Speaker 8:natural off of celebrities.
Speaker 2:Look at Madonna promoting
Speaker 8:Pop Mart everywhere. But can the company continue to grow beyond this viral moment Yeah. That has seen its share prices rocket more than 1200%
Speaker 2:A 100%. Before? Here. Pause it.
Speaker 8:So economics up.
Speaker 3:The Are you rooting for their downfall?
Speaker 2:Preying on it even. The I don't know. I think I think the bigger question is like, there's something that so so it's easy to say like, these go viral on social media. Like, it's a beneficiary of social media. But like, if you actually think about why is and why is a LaBubu more viral than, you know, the latest iteration of Barbie or Beanie Babies, like, there is a reason, and it's directly related to the nature of the algorithm.
Speaker 2:So when you do an unboxing, there it, like, the it naturally takes about one minute if you edit it down to do it, and the reveal comes at the end. So when you watch it, you say, oh, someone's doing an unboxing. They're introducing what the stakes are. It hasn't after creator
Speaker 3:because they get that retention.
Speaker 2:Exactly. It it drives retention because it has a natural storyline of like, okay. How did I get this box? How much did I pay for it? What are my expectations?
Speaker 2:Do I have something on the line? Maybe I'm hoping to build the set. Right? I wanna build a set. I really am hoping for the red one or whatever.
Speaker 2:And and then and then you you're you're taken on this journey. And I believe when they when they unbox them, there's, two stages to the unboxing. You you take it out of the box, and then there's packages tied Yeah.
Speaker 7:So so there's a box.
Speaker 3:The third stage is when you have your dog rip its
Speaker 2:head off. And see what's inside. What was what was this?
Speaker 7:So there's the box, then you there's, like, a nice, like, opening. Like, like rip it. It's like nicely packaged. And then inside there, there's a little bag. And then inside the bag is the actual
Speaker 2:Yeah. Yeah. Yeah. Toy. Yeah.
Speaker 2:So so even that like lends itself to like keeping you engaged for sixty seconds, which is going to drive more virality in the in the feed.
Speaker 3:Aaron Frank, partner at Lightspeed says, I have the largest single collection of LaBooBoos
Speaker 2:Nowhere.
Speaker 3:In America. No. I'm kidding. He texted me and said, this is hard to watch.
Speaker 2:This is hard to watch.
Speaker 3:So sorry. We're we're forcing you to sit through this, Aaron.
Speaker 2:Let's play a little bit more of the journal video.
Speaker 3:Yeah. Let's pull it back up.
Speaker 2:Yeah. Keep going.
Speaker 8:Of Pop Mart.
Speaker 2:The 50 year old culture was founded in 2020.
Speaker 8:Entrepreneur, Wang Ning, as a
Speaker 3:Ron Lawrence in the chat says my startup has done 75,000,000 in unboxings. Say more.
Speaker 2:Yeah. Elaborate, please.
Speaker 8:19, over 70% of
Speaker 2:Tamagotchi for real should come back. AI powered Tamagotchi. That's a good business. We've done
Speaker 8:is just added our own flavor to that. Yeah. Now the company has more than 500
Speaker 2:Look how international thousand venues worldwide. Southeast Asia.
Speaker 8:When you decide to splurge on a PopMark blind box, which could cost around 20 to $30, you don't go in totally blind. Take this collection. There are six possible characters you could unbox and the secret one that you have a one in 72 chance of
Speaker 2:One of the things that the brand can do to keep engagement, to encourage consumers to get a little more excitement out of it, is to label the box. This one says,
Speaker 5:have a seat.
Speaker 2:I know people people throw the the satanic panic around a lot. Like, white monster monster energy drink. There's like a whole six six six. It's satanic. But it's always unclear if it's like the the founders are are, like, poking fun at satanism.
Speaker 2:Like, yeah, like, no one accuses, like, John Carmack of being satanic by or I mean, I guess people did when he released Doom. But in in Doom, it's like you're clearly playing as a as a mortal, like, killing the demons. And that's the name of that. That's the that's the virtue of the game.
Speaker 3:Aaron just sent me the the stock chart for Build A Bear. Have you
Speaker 2:seen that? Oh, yeah. Build A Bear is ripping too. Does Build A Bear have loot boxes yet? That could be the next unlock.
Speaker 2:Build A Bear is up. It's outperforming Yeah. In video, I It's absolutely ripping. Who's clapping?
Speaker 3:Build A Bear blind boxes. No more building. Just just gambling, children. Just come in come into the store.
Speaker 2:Yeah. Yeah. If LaBoo is like the slot machine that you could be pull out of the the vending machine, Build A Bear should turn it into like a game of like high stakes
Speaker 3:Has anybody a lot done like remote LaBooBoo openings? So it's just actually, like I think
Speaker 2:I've seen that. Yeah. Who was it? Blake Robbins posts about this a lot, how there's, like, apps in the App Store that
Speaker 3:are Oh, it's probably happening on, like, Whatnot, to be honest.
Speaker 2:Well, have you seen have you seen the claw game? So there is a there is a an app that you can download. You can pay real money to use a a claw in the real world to pick something out of a out of a, you know, a a machine or like a bucket. And whatever you pick out, you get to keep and they will mail it to you. Wow.
Speaker 2:And so it's not technically gambling. Somehow they got something like your loophole there. Very
Speaker 3:very Right now on whatnot, there's, like, seemingly hundreds of streams selling libubus.
Speaker 2:Wow. Don't gamble, folks. Don't gamble on compliance. Get on Vanta, automated compliance management risk, proof trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.
Speaker 2:Anyway, the last two years of what's interesting is the last two years of of sales in in of Lububu have been heavily driven by international expansion. They've definitely figured out how to take the brand abroad. It was predominantly growing in Mainland China. And I believe it's still growing. It's doubling in China, but it's also like seen maybe like a 10x increase in in international sales over the last two years.
Speaker 2:So it's on a tear. It's on a tear. We'll see. We'll see how people respond. We'll see how the American toy companies respond.
Speaker 2:I feel like this is like the the horses left the the stable. The cow has left the barn. The dog has left the
Speaker 3:dog. The children yearn for the slots.
Speaker 2:They do. They're gonna they're they're gonna figure out how to gamble one way or another. I mean, what what's the alternative? Like ban libubu?
Speaker 3:Airwon Airwon blind boxes combo plates.
Speaker 2:Yeah. Combo plates.
Speaker 3:You might just get the worst slop bowl of your life. How about sweet green blind
Speaker 2:Or you get 12 ounces of blue It's like
Speaker 3:you might get a bunch of steak. You might get a bunch of kale.
Speaker 2:You might get some caviar.
Speaker 3:Never know.