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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:Cracks are forming in Meta's partnership with Scale AI says TechCrunch. It's only been since it's only been since June that Meta invested 14,300,000,000.0 in the data labeling vendor software.
Speaker 3:Invested.
Speaker 2:Yeah. Invested. So it's not an acquisition. It's not an acquihire. It's a trade deal.
Speaker 2:It's basically a trade deal. That's how I think about it. 14,300,000,000.0 for less than half the business equity, a big dividend 49%. They just wanted of the scale that people went
Speaker 3:over. Percent was a nice nice number.
Speaker 1:Yeah. They just pulled it out of
Speaker 2:the hat. Random. It's random. It's just random. And so several of the top executives left Scale to go run Meta Superintelligence Labs.
Speaker 2:That's MSL. But says TechCrunch, the relationship between the two companies is already showing signs of fraying. At least one of the executives was getting brought over to help run MSL. Scale AI's former senior vice president of Gen AI product and operations, Ruben Mayer, has departed Meta after just two months with the company, two people familiar with the matter, told TechCrunch. Mayer spent roughly five years with Scale AI across two stints in his short time at Meta.
Speaker 2:According to these sources, Mayer oversaw AI data operations teams but wasn't part of the company's TBD Labs, the core unit with in Meta tasked with building AI superintelligence where top You think
Speaker 3:they made MSL and TBD and, like, the the Just
Speaker 2:to confuse TechCrunch reporters.
Speaker 3:Like Just to confuse
Speaker 2:Yes. Yes. The journos. Yeah. Yeah.
Speaker 2:It's it's entirely the 40 chest that's going on. And so after this after this article was published, Mayer reached out to TechCrunch and was like, hey. You got the story wrong. My job was to set up the lab with whatever was needed, rather than data. And I was part of TBD Labs from day one rather than being excluded from the core AI unit.
Speaker 2:Mayer also clarified that he did not report directly to Wang and was very happy with his meta experience and was leaving for a personal matter.
Speaker 1:So
Speaker 3:So, again, it's hard to read too much into this article.
Speaker 2:But the bigger the the bigger question is, like like, TechCrunch has their angle, and then the timeline was kind of in turmoil. I feel like the timeline's always been rooting against Alex Wang. And there's a few reasons. So I wanted to go through, like, the bear case for just the question of, like, was Meta buying Scale AI the right move? Like, did they overpay?
Speaker 2:Will we look back on this as a great deal? Because we look back on Instagram, we're like, that's one of the greatest acquisitions of all time. WhatsApp, also great acquisition. Very expensive at the time. Both very expensive at the time.
Speaker 2:Even Oculus. I was thinking about it, and I was like, Oculus VR, super expensive, multi billion dollar deal. And the level of headset adoption, I mean, they didn't even have like a consumer product at that time. It was like dev kit still. And obviously, retention was super low.
Speaker 2:People would churn off of them, and they still do even, what, a decade later. Like but
Speaker 3:you But it was very important to Zach.
Speaker 2:Yes. And and and VR is a tech wave that's going to that's going to happen at some point. Yeah. Like, we know that the technology is gonna get there where
Speaker 3:Zach's not gonna miss the next platform.
Speaker 2:He has his surfboard. And when that wave come, he's he's ready to surf. Did you get any surfing in this weekend?
Speaker 3:I did. I did. I did. I
Speaker 2:Describe your surfing experience. Can you do like three sixties off the back and stuff? Can you do a backflip? Can you do a parallel
Speaker 3:No no backflips. But but I went surfing with a with a TBPN Yeah. A technology brother, Steve Yeah. Founder of Clock Tower Capital. And he saw me he saw me do a couple airs.
Speaker 2:You could
Speaker 3:do airs. I didn't land either of them but
Speaker 2:You were telling Speeder like he has to get barreled. Did you get barreled?
Speaker 3:It wasn't barrelling this weekend.
Speaker 2:It wasn't barrelling this weekend.
Speaker 3:But it was it was was was fun. There was definitely swell. I got quite sunburned couple days in a row.
Speaker 2:It's fantastic. We should one day stream your stream your surfing endeavors, and we should do it on restream. One livestream, 30 plus destinations, multi stream with audience wherever they are. People have been asking, will TBPN expand to other mediums? Will you do other things?
Speaker 2:And it's Yes. Yes. Surfing live streams. That's what's And you, if you're surfing and you wanna live stream
Speaker 3:Head over to stream.
Speaker 2:There's a bunch of questions in the chat we should get to at some point. But let's keep talking about this Scalea stuff. So Zuck has a surfboard with Oculus VR. The question is, what's going on with Scalea? Because it's not necessarily an obvious compounder where, like, with Instagram and WhatsApp, it's like you have this network effect.
Speaker 2:It's just gonna keep growing, keep growing, keep growing. You can grow the user base. The user base never goes down. The business never gets smaller. You just run more and more ads and it just prints prints prints.
Speaker 2:Right? Buying a growing social network that has strong product market fit, easy easy to justify at any price, basically. Scaling I
Speaker 3:Well, Elon wanted to get out at one point. Yeah.
Speaker 1:Okay. Anyway.
Speaker 2:For the most part.
Speaker 3:But if you can buy it and then and then lever it up and then merge it within a foundation Yes. Model lab. Yes. You
Speaker 2:know. So Scale AI does not have that obvious like winner take all network effect like
Speaker 3:At very real competition.
Speaker 2:Extremely real.
Speaker 3:Surge, which which is was the bootstrap scale AI that was Mercur. Printing money. Mercur, which was emerging.
Speaker 2:Isn't there another one Garrett
Speaker 3:Garrett at Handshake? Handshake. Labelbox.
Speaker 2:There's a ton of
Speaker 4:these companies.
Speaker 3:A bunch of players.
Speaker 2:And so the reason is because it is not a monopolistic Totally. Market by default. You might be able to make it one, but it's it's it's tough to justify. It's tough to think that, oh, yeah. It'll just continue to compound.
Speaker 2:And then also, if you're AGI pilled, you don't believe that basic data labeling tasks are gonna be done by humans in the future. Like, if you have a bunch of tasks that are like, oh, yeah. Like, just, you know, what do you go to Scale AI for? Oh, RLHF this. Tell me if this is a good answer.
Speaker 2:Like, you're AGI pill, do you think that the next version will be able to do that level of task, like, perfectly?
Speaker 3:Yeah. And the the the expectation if if Scale had stayed fully independent Yep. Would be that they would keep having to, like, bet the company on these new
Speaker 2:Yep.
Speaker 3:Sort of like eras.
Speaker 2:Right? That's and that's sort of the story. I mean, Scale started as a data labeling company for self driving cars. And then eventually, that kind of hit takeoff where there was not that much more business to for Scale to do, I believe, because Waymo had gotten all of the data and Cruise has gotten the data and Tesla had gotten, like, the the the base level data. And then the RLHF boom and the LLM boom happened, and and Scale was able to move over to that.
Speaker 2:And then all of a sudden, were having their best their best years ever. And so the business was kind of like up and down very much like, oh, they have a second act. Do they have a third act? Chunky. Yeah.
Speaker 2:Very high high volatility. And so as the market shifts and more and more expert, like, the like, as it shifts to more of these expert data collection processes, like what we see from Merkor, scale potentially becomes less and less relevant. It's not like an obvious just beneficiary of every next wave. You have to keep kind of reinventing the company. And so there's
Speaker 3:And they were at some point, stopped working with OpenAI. Correct?
Speaker 2:Yes. Yeah. Yeah. They stopped working with OpenAI, and then and then post MetaMeta opportunity for MetaMeta deal. It seemed like Microsoft and and Mike Microsoft and Google both pulled back from working with Scale.
Speaker 2:And so, like, the core Scale business doesn't seem like it's just, like, endlessly compounding. So you really can't underwrite this, like, $14,300,000,000 investment purely on the basis of Scale's business.
Speaker 3:But then They're not trying to make money on the investment.
Speaker 2:Yeah. Maybe. Yeah. It seems like they need a mad scientist for their lab. And every other AI lab
Speaker 3:Or they need
Speaker 4:a deals guy. Yeah.
Speaker 2:Or a deals guy. Exactly. So OpenAI has Mark Chen. SSI has Ilia. DeepMind has Demis.
Speaker 2:Anthropic has Dario. Each leader has a different shape and style, but they're all capable of rallying top AI researchers and building teams of missionaries. Alex Wang is unproven here. So if you believe that the best talent magnet wins, it seems like a bad deal. And that's kind of the bear case.
Speaker 2:Now the bull case is that, yes, meta buying Scale AI is a bit pricey, but ultimately, it was a good decision for the company. Here's why. Let's review the landscape of big tech's AI efforts. Google has deep mind firmly on the frontier. Microsoft has g p t five, also frontier.
Speaker 2:Amazon's a bit behind, but the core business doesn't seem very threatened by LLMs. NVIDIA benefits from basically every outcome right now. Apple acts as a window into AI, probably not too threatened. Meta feels like it could benefitly benefit hugely from getting to the frontier, but it doesn't have an obvious dance partner. So what are trying to do?
Speaker 2:You go down the list and you try and buy every company or hire every researcher you can. Hence, the rumors that Zuck tried to buy S. S. I. Tried to hire Mark Chen, etcetera, etcetera.
Speaker 2:Right? Because it's super high. I mean, I I we we we saw that image of, like, some Wall Street investment bankers, like, did, like, a kind of sum of the parts valuation of Google and just DeepMind was worth, like, a $150,000,000,000. Right? And so if if you're thinking, okay.
Speaker 2:If I have my lab and it's adding all this value all over the place, like, is that worth $200,000,000,000 to my market cap? Like, absolutely. Right? Yeah. And so you try and do that.
Speaker 2:So at the top of the list, you have something like, you know, assemble a dream team. Get Ilia, Mark Chen, Dennis. Get everyone. Just put the OG OpenAI team and the DeepMind team together at Meta and, like, you win. Right?
Speaker 2:But that's obviously not on the table. There's a bunch of reasons why you can't make that happen. There's economic reasons. There's interpersonal reasons. There's some ideological reasons.
Speaker 2:Yeah. But Alex Wang isn't that far down the list. And so, yes, he hasn't led a real AI lab that's trained a popular big foundation model. But if you look at his trajectory, all of a sudden, it becomes I I I can be a lot more optimistic about it. So he's 28 years old.
Speaker 2:He's a fantastic communicator. You've seen him on on every podcast, and he clearly communicates very well about
Speaker 3:He's been on Theo Von, one of the few AI heavy hitters that's been on Theo Von, obviously.
Speaker 2:Joke, but he was on Theo Von really early. And he tells a very convincing story, and and he's actually able to communicate to, like, to to both insiders and outsiders, I think. And he's genuinely been at the center of the AI boom for his entire career, but he wants to go bigger. He's built a great company that easily could have cash flowed hundreds of millions of dollars over time and continued to serve the training data market. But getting further into the action that's happening at the big labs was probably not in the cards if you stayed at scale.
Speaker 2:And so teaming up Yeah.
Speaker 3:People would push back on that and say that that scale was losing real market share to Surge and other players who had a reputation for having higher quality data.
Speaker 2:Losing market share, but still, like, so many big contracts that if they just went, like like, to, like, weaker and weaker clients and just, like, held on and just had high margins, like
Speaker 3:Built to die.
Speaker 2:Basically. Like, I I I I do think, like, the the, like, the run out the clock value on that company is definitely, like, hundreds of millions of dollars every year. It's just such a big market. But that's clearly not what what Alex wants to do. He's 28.
Speaker 2:He wants to go bigger. He loves being at the center of AI and wants to work on interesting huge problems.
Speaker 3:Now he has will have does or will have more compute than pretty much
Speaker 2:Pretty much everyone. Like the latest cluster that Zuck's trying to build is is is supposed to be just a couple percent over the next biggest cluster. So he will have the biggest. And so I think that you when you look at at Alex Wang, you see someone who's been through, like, the Gartner hype cycle of training data. Right?
Speaker 2:It's like, wow. We are teaching cars to drive. This is incredible. Then oh, wait. Like, they actually don't need that much more data.
Speaker 2:And then, like, oh, wait. Like, LLMs need incredible amounts of RLHF data? And then like, oh, wait. So he's been on the up up and down. He's bit so there's a there's a bunch of different takes here, but let me continue.
Speaker 2:So there's also the rumor that Scale AI isn't fully delivering all the data that MSL needs to train their next model, but the reporting here is a bit questionable. I don't think that the Scale acquisition was ever fully underwritten against the value of the training data business, as we discussed. So the and the AI race is so aggressive that every company is grabbing every possible resource. Not only is Meta using other data providers, they also just signed a $10,000,000,000 cloud deal with Google. Yeah.
Speaker 2:So this this idea of like, oh, like
Speaker 3:Demand is outstripping supply pretty Yeah.
Speaker 2:Oh, they did one deal with scale. That that means that they shouldn't do a deal with Merkor or they shouldn't do a deal with with Serge. Like, no. They're gonna do deals with everyone.
Speaker 3:I think all yeah. All all it says is that it was primarily an act like an acquihire.
Speaker 2:Yeah. An acquihire of the team and a bunch of the people and mostly it's a bet on Alex Wang. And so I think that the the FUD over the departures is overstated right now. It doesn't seem like it's an exodus. They hired a ton of people.
Speaker 2:There's been rumors that, like, one person was thinking about leaving but then wound up staying. And then and then one person left, but they said they were, like, never really planning to stay. And then another person left but clearly to start a company. So it doesn't seem like there's some sort of massive exodus. And, basically, it just comes down to the value of developing an in house AI team that's like DeepMind.
Speaker 2:It's a that that team, if it works and if they build it out, the value of that team is immense, probably in the hundreds of billions of dollars. And so there's inevitably gonna be bumps in the road. But at the end of the day, Zuck is just betting on the most successful entrepreneur that Gen Z has produced thus far. And it seems still reasonable that even if he's not entirely a researcher, he's deals guy, you have him, and then you have Nat Friedman who's able to who's worked with Ilia. And you have the pieces of the team to put together the right amount of researchers and engineers to actually go and and build out a frontier capability or near frontier.
Speaker 3:It's an all star team.
Speaker 2:It's close to an all star team. It's not the all star team. Like, the all star team is Ilya and Demis and Mark Chen, but, like, that's not happening. It's just never gonna happen. What what is the big announcement from today?
Speaker 2:Is are are you are you trying to tell more of a story around Enterprise with this?
Speaker 5:You know, we're kinda not. We're I I think we're just it's more like we're crushing it.
Speaker 2:Yeah.
Speaker 5:Everyone tells us to be super modest about 93% growth in The US and 94 rule of 40. They they may be redefining the
Speaker 2:rule to,
Speaker 5:like, make sure the other people don't, like, have to live in shame. Yeah. I keep seeing these articles, like, in the Wall Street Journal. It's like rule 40 isn't real. It isn't real.
Speaker 5:Yeah. It isn't real because we're, like, crushing everyone.
Speaker 3:You were forced to be humble for a really long time.
Speaker 5:I was forced well, people were showering me with humble nuggets all day. It really exactly work. But, you know, I I do think you have to judge humility by the delta between performance and ego. Mhmm. And I would say somewhat ill modestly, I'm the most humble I've ever been.
Speaker 5:And and now, and I just, I think it's like so what we try to accomplish with the we've been doing these kind of conferences forever. Basically, because everything we've done at Palantir is like completely it's antithetical or at least orthogonal to what you would, how you would build a business. You guys look at a lot of businesses. You would never build a software downstream from value creation. It's all basically how do I make the client feel like they're getting laid when they're getting fucked.
Speaker 5:That's the whole way you build a software business. In our business, we began in the beginning, used to tell people, you know, this is a we're a mutually servicing business. Both sides should like be happy. And the way we built the business was basically underlying metric I always thought was, you know, the logic of software should be we charge you something downstream of value creation. That sum is a percentage of value we create.
Speaker 5:It's better for both sides because it's significantly less than the value creates. It's good for us because there's a multiple in the value. The flaw in the logic was always that FDE model would basically mean that you'd get a one multiple. So, we were structurally misaligned with everyone in finance, everyone not at the founders fund but basically everybody because of that. What we've proven with ontology, FD structures where FD are actually technical and internal orchestration which is largely artistic, basically was, now we got very lucky because without large language models this would not be hypercharged.
Speaker 5:So it still didn't exactly make sense, but lo and behold, we have large language models, it hypercharges everything. So downstream value creation is an enormous amount of money.
Speaker 2:And
Speaker 5:because of our unit economics now, which are, you know, some people believe are the best in the world, we actually get fairly valued. And what are we doing actually downstairs is we're saying America's central advantage is the plasticity of how we approach the pragmatism. Right? So businesses have to move from businesses where it made sense to have parasitic software products that are like basically helping you. It's like one of these things, it's like you believe you're learning to sell, they're selling you on something is that you can't get rid of.
Speaker 5:You then run to Wall Street and say, our clients all we have 50,000 clients that all hate us. They're like, great. That's a software business. Because the hating means
Speaker 2:they can't rid
Speaker 3:of it. But platform business means that you're creating more value than you capture.
Speaker 5:Well, the way we do, the way we sell is like, and this is why it's just all, it's like all these things are hugely contrary. Our revenue's going up, our sales force is going down, the number of people we plan to have in the future is less than now. We are very focused you know, everybody's like high volume. The volume makes up for, you know, the fact that revenue decreases per client. We're not focused on that at all.
Speaker 5:We believe we're going to make more from people in the future than in the past, sizably more because it's like why should we not capture part of the value that we help create? Actually, it doesn't have to be the majority, in fact it's usually the minority of the value you create. We also believe that if from more kind of like kind of architectural implementation technical perspective, the value is in high fidelity data captured in ontology with FDs and where there's an enhancing factor with LLMs and that's going to be very, very hard to replicate. But but again, all of this is kind of very non traditional and so what we're really doing in these conferences is saying the same thing we say on the outside. Don't believe anything we're saying.
Speaker 2:Mhmm.
Speaker 5:Talk to other people who have done it. We're we're not we don't chaperone the people here. So they're like, you can talk about things you like, things you don't like Yep. People are on stage, but learn how to build the business of the future. What is the business of the future look like?
Speaker 5:Actually, the interesting thing is workers become more valuable, like actually trained workers become more valuable. This is exactly the opposite of what people are saying, but it's The person at the top is actually crazy valuable. People with technical expertise are crazy valuable and everything else is going to be done in Foundry, Ontology and something like an FDA. Like the orchestration of the business is completely different.
Speaker 2:Where are Fortune 500 companies getting screwed by these AI pilots? We saw the stat, 95% of AI trials in the enterprise aren't converting, like what's
Speaker 5:What going on
Speaker 2:what does it look like when somebody sells someone
Speaker 5:to Well, mean that score there's a technical reason. These LMs are probabilistic, they're not precise. The value of LLM is when it's essentially in an ontology wrapper because to actually create value, you have to be able to take the output, serialize it and deserialize it in the context of the business. So the logic, actions and security of the business and its tribal knowledge and what it's trying to accomplish. LLMs are vertically crucial, but the but but the error bound is very very very narrow and the way you actually do LLMs in the real world, not in theory, not is like, is that you essentially put them in a concatenated chain where each single thing has to be done as a street unit because otherwise the underlying math is 95 times a 100 separate changes, like totally unreliable.
Speaker 5:Yeah. And if you do it any other way, you're getting a steak dinner. Yeah. And you're that steak dinner is super tasty. It's not going to work.
Speaker 5:And even worse than the steak dinner, honestly, is that you're being taught how to do something incorrectly. It's like it's like, okay. I'm going to learn how to learn from a Wokester.
Speaker 2:Yep. Great.
Speaker 5:Great. The the damage that Wokester's doing, mostly on the left, but occasionally on the right, the real damage they're doing is they're teaching you how not to learn. Mhmm. Like, and if you just pick your favorite person right, left, center, who's just selling complete garbage, it's all conspiracy, the whole thing. Yeah.
Speaker 5:It's like it's like it's like there's no such thing as building. There's no such thing as agency. Yep. You can get away with FBS. Well, if you wanna like, Palantir's lifted.
Speaker 5:One of things I'm proudest about in the world is we've lifted people from their mom's garage to their own house. Millions of people. You wanna stay in that garage, you listen to those people. And it's the same thing happens in enterprise. They're selling you something you think you're getting laid and you're getting fucked.
Speaker 5:And that once you're fucked like that, it's very hard to undo it. Yeah. And, like, yeah. You know, the the crazy thing about my life is I'm like this wacky dyslexic. It's actually much harder to be dyslexic, but it's also much harder to get Because you don't believe don't you don't believe in any of this BS.
Speaker 5:It's like
Speaker 3:Well, so speaking speaking of sales, there was the CEO, founder CEO of a of a CRM company that was making some comments yesterday. Did you did you catch?
Speaker 5:I I look, Palantir, we structurally mind our own business, and I love that everyone minds our business. But I would say that what I we constantly have people on TV. It always sounds like, you know, the guy in high school who's like, but I'm so nice. Why don't I get laid? It's like, it's literally, like, it's the same thing.
Speaker 5:I'm so nice. I'm so nice. I create all the value and I am so nice. I'm begging to get laid and no one it's like, I have such a big this. I have such a big that.
Speaker 5:And we're like, yeah, we're we're not trying, dude. We're here. You know? And I
Speaker 3:don't think about you at all.
Speaker 5:And it well, I it it it's like we are very focused on value creation, and we ask to be modestly compensated for that value. And, you know, if you disagree, you're like, you don't like us as a client, you know, you love us as a client, but you think it's like, great. We're doing our thing. You know, in Palantir right now in The US, the market account that counts, We don't have the people. We don't have the time.
Speaker 5:We orchestrating completely perfectly at Palantir, which of course we don't do. Mhmm. Because we're like an artist colony. Right? We don't have a time to actually focus on like what we need to like extending certain components of ontology we have to do.
Speaker 5:Extending Maven for the sake of the West. Building things in classified environments. Mhmm. Extending things with high value things like, yeah. We're focused on that, and we don't have the time.
Speaker 5:Like, when you're growing 93% off of a very serious base with a de facto de minimis It's not yeah. It's the 93, and that's not even our best number. It's 94 rule of 40. It's like and then people then people are like, oh, yeah. Yeah.
Speaker 5:Well, but we have all the skills. We have all the motion. But but, like, somehow our ocean isn't working. It's so big, but it's not it's like, yeah. Great.
Speaker 5:You have problems to you have time to focus on us. We got things to focus on here that are crucial.
Speaker 3:And you guys are it feels like you're reacting to the changing world and actual, like, customer needs, whereas other players are reacting
Speaker 5:to Let me a give more kind of slightly philosophical economic thing. What the large language model does, models do in combination with ontology and FTEs and knowing what you're doing, is it creates period optimality over time. We're not there exactly, but every single tech company in the world is going to be paid based on value creation. Maybe that's not completely true today. It will be true tomorrow.
Speaker 5:Mhmm. So when any company is saying something, you really have to ask, given that the the aspiration of LLMs are transparency and and competence. It broadly defined. They've actually the big cultural shift on enterprises, people running enterprises believe that this thing should work. I should know the cost of the components in my business to the second.
Speaker 5:I should know how to rebuild things if there's a macroeconomic trajectory. I should be able to put the bomb on your head and not on his head. Okay. So that basically means every conversation in the future is going to be, I you create x value, I'm going pay you y. And the central problem, a lot of the larger kind of less agile, sclerotic companies have is, it's like they can't, it's very hard to move from I get paid because you can't get rid of me to I get paid because you could get rid of me but you don't want to because you're creating so much value.
Speaker 5:But that's where the future's going. And like people talk about like, you know, how are we going to, you know, get do 10 x in revenue blah blah blah with the same or less people. It's like, yes, but the whole market's gonna have to move to value creation. And we're in the business of that and try to do it. You know, it's not
Speaker 2:Do do you think long term that the gross margins of software companies will change materially because of, like, LLM inference costs, like token factory costs, that type of thing?
Speaker 5:Well, you mean, like, enterprise software companies?
Speaker 2:Or If I if I look at, like, the Fortune 500 right now, there's, like, a set number of gross margin that's out there. Should we expect, like, gross margin compression based on Well, I I bills, basically? Basically?
Speaker 5:Well, first of all, think Yeah. I think let me just give you the trends.
Speaker 3:I think
Speaker 5:first of all, skilled workers are gonna become more valuable. Sure. You're gonna be paying them more. They're gonna be happier. It's exact downstream politically, it's very hard to argue for anything but high end immigration.
Speaker 5:So, like, why do you need more people? Like, we got to make the people we have here work. So, like, politically, it's like, you know, I'm an unhappy Democrat. But running around saying, oh, crime isn't an issue when everyone knows crime is an issue, it's like suicidal BS and no one believes it. And now that wokeism is luckily, mostly, at least in that way, not as punishing, we can all just admit the obvious.
Speaker 5:So, like, transparency is going to be like, so the people are like, workers are going to become more expensive, the overhead's going to become less. Truly, basically, artist shaped people are going to be incredibly valuable and they're going to demand to be very highly paid. So, but the aggregate cost structure will come down, but more importantly, the products you build are going to be much closer to what the market wants in real time. And then, again, just an obvious thing, this is happening like, we have 10x growth in America compared to Europe. Same people, same products, same everything.
Speaker 5:So, it's like, and then I, the other thing, the point that's a little less obvious that I think people ignore time is not time. We always assume a minute of time is a minute of time. It's not. Like, it's like from the time you want to do something to the time it happens, if that's 10% of the time, you've just graduated, you just got a 10x. Like, Poundshare's not these kind of atrophy companies.
Speaker 5:They really take every it takes them three years, five years to get a year. It takes us a week to get a year. So it's like, you know, it's like that that's actually what explains the numbers in a weird way is, yes, but what if five years represents forty years? What if I'm saying in the next five years? It's not where actually it's like the whole problem with the DCF model actually that experts love is a, they don't understand product.
Speaker 5:So then b, they kind of extend the DCF if they like you. So it's like, oh, I like the person. The DCF is too big Give them an extra decade of steak dinners. But but the real problem that they somehow don't understand in the DCF amount is a year is not a year for Palantir. Like a year is like, we don't do holidays.
Speaker 5:I'm working all the time. I'm working Honestly, I sometimes hate the enemies of Palantir, but God, do they get me to go back to orchestration because I'm like, I'm going to fuck these people. And the basic way I'm going do it is going back to like dyslexic, you know, like organization orchestration of we're going to have the best products, best people. I'm going to recruit those people. I'm going to make sure they're the most valuable.
Speaker 5:And I'm going to put them in enterprises that value us. And if you don't value us, go work the people that hate us. Try them out.
Speaker 2:Yeah. Do you have advice for young people? I mean, you said like artists like people, not literally artists. Yeah.
Speaker 3:You you said company is like an artist's colony.
Speaker 5:Yeah. They just become an artist if you're interested. People underestimate like their artistry because like from a young age, you get huge benefits for conforming. And you can say, well, I don't. I mean, the central advantage of being dyslexic, we can't conform.
Speaker 5:So that was that ends up being a huge because you just can't. So you're to have to so your basic thing you to emerge, do not conform. And by the way, the people who are telling you simplistic bullshit, that means, you know, like meritocracy isn't going to matter, you're not going to judge, all these conspiracies, and so you can't do wealth accumulation if you're in this country.
Speaker 2:Yeah.
Speaker 5:Like in America. That that I think actually a lot of these things are true in other countries. Yeah. But in this country, they're teaching you how not to learn Mhmm. How to be complacent, how to give up your agency, how to fail and how to blame it on anyone else.
Speaker 5:And if you're, so you have to say it's like Reject
Speaker 1:to that.
Speaker 5:Yeah. Reject that. That's kind of a and then you have to really, really look at people and judge them by their fruits. The best way to learn is to look at somebody and say, okay, well, you know, it's like you work with somebody like the co founding team at Palantir. So, you have Peter, Joe, Stefan, Nathan.
Speaker 5:Like, part of what made us so good is it's like, okay, you can measure yourself. It's like, you know, when I started at Palantir, I actually just because I just wanted to be left alone. I was like, yeah, I'm going make some money. I'm going to move to Berlin. I'm going to live a debaucherous life.
Speaker 5:That was my goal. Like, I'm moving to Berlin. I I thought I'd need 250 k. I was like, 250 k is a minimum, a million dollars a maximum. Yep.
Speaker 5:I'm moving to Berlin. It was like debauchery forever. Berghain. And yeah. Yeah.
Speaker 5:Well, I had to like yeah.
Speaker 2:So I it's
Speaker 3:Set up a remote office
Speaker 5:But like you then measure yourself and it's like, okay, well, I'm highly differentiated on measure on managing complicated people who have to believe their opinion is their opinion, but still have to build a product that actually delivers value. That's my differentiation. And so, you you you surround yourself and then remember, you have to remember the persuasion being persuasive and being right are not correlated.
Speaker 2:Mhmm.
Speaker 5:So, you have to really look at people who are historically right, rebuttably give them the rebuttable presumption that they are right and work back to discover if they're right or wrong. Mhmm. Not just and, like, in all these things and, like, for example, on the Palantir thing Yeah. Is a great lesson. Go listen to our critics.
Speaker 5:Mhmm. Whatever critic you love. We're a conspiracy theory. So, like, could take the left wing version which is like Palantir is stripping you of your civil liberties with some people on the right believe.
Speaker 3:Yep.
Speaker 5:Palantir is a Jewish conspiracy run by a a a mutt somehow. Okay. Whatever. You know, it's like, okay. Well, go actually, how does the product work?
Speaker 5:Does the product protect data? How does it protect it? Yep. Is it better than any other company in the world of doing this? Yep.
Speaker 5:How do you build a company? Do you think it's just like allocation based on a conspiracy? Why did
Speaker 1:we work?
Speaker 3:Yeah. Just pick your conspiracy and that's the strategy.
Speaker 5:Yeah. And then and then but then unpack it and learn for yourself. Like, did this work? How did this work? How did they do it?
Speaker 5:Assume that at every single decision, if it was a decision anyone else would have made, you would not have worked because that's a commodity. Commodities aren't valuable. Yep. And then apply that to your life. What part of this do you understand?
Speaker 5:Like, you know, what part do you not understand? What part do you understand better than them? What part could you do better than them? And the weird thing about LLM ontology foundry is this actually will work for anyone watching this podcast.
Speaker 2:Yeah.
Speaker 5:If you're watching this podcast Yeah. And you enjoy this, you've already passed the test. Mhmm. I don't care whether you're a welder, a plumber, a carpenter, an astrophysicist, or a somebody who'd like to build a business or just wanna get rich or you wanna get enough money and move somewhere and do what I Berlin. It's not the right place anymore.
Speaker 5:But any case but but you've already passed that test. Now go out and pass the test for life.
Speaker 2:Yeah. You said Germany is not the right place anymore. Like, what is your current mental model for the state of the world order? Like, is is is America in decline? Do we need to bring things back?
Speaker 2:Like, who are the power players? How how what's phrase?
Speaker 5:Power pair number one right now. And, like, all this media BS, it's like, you you know, you gotta compare America to and you can't compare America to some thing you're pretending in your head could be America. Compare it to Europe. I don't know, you want to compare it to China? You want to have no rights?
Speaker 5:I mean, again, I'm actually not anti Chinese culture,
Speaker 2:but CCP.
Speaker 5:It's like compare it to Europe, like no tech industry. Everyone rich was born rich basically or with almost no exceptions. Yep. The most important Germanic company, I hope someone from Germany is listening to this, Kompd aus Palo Alto. It's Peter Thiel undiche.
Speaker 5:It's like the only German company since SAP that's real.
Speaker 2:SAP has
Speaker 5:been tested. Like, and what they won't listen to us. Yeah. Like, just think about that. You have Peter Thiel, like the most important venture person maybe that's ever lived.
Speaker 5:Co founder of Palantir and you have me. Those like somewhat, you know, basic partially dramatic Yeah. Did my PhD in German, and you have no tech industry. Wouldn't you have us on fucking speed dial? Yeah.
Speaker 5:Yeah. I mean, like, on speed dial. Like, you don't have to listen to what we're saying.
Speaker 2:Yeah.
Speaker 5:You don't have to agree with what we're saying. Who are you talking to?
Speaker 2:Who are
Speaker 5:you talking to? You're talking to your, like, I don't know, expert that came here and studied us.
Speaker 3:Trust the experts.
Speaker 5:Trust the experts. It's like so it's yeah. It's like energy. Like
Speaker 2:Do you think they will? Do you think that there's there's optimism around the idea of Right?
Speaker 5:Oh, no. No.
Speaker 2:I I just I
Speaker 5:mean, I pick up it's crazy who calls me. It's like it's honestly like I I I can't talk out of school who calls me. You'd be surprised the number of people come in. I begin every call with don't listen to me. Yeah.
Speaker 5:Very few people have.
Speaker 2:Yeah. Yeah.
Speaker 5:I'm gonna give you the freak show answer. You probably wanna ignore it. Yeah. This is what I think. And they're like, okay.
Speaker 5:Yeah. Yeah. Okay. Some call back, some don't. But, yeah, of course, I would I mean, I have a lot of I mean, like, honestly, we have a huge retail the crazy thing about Germany is a huge retail investor base.
Speaker 2:Sure.
Speaker 5:Sure. They don't admit it in public,
Speaker 2:but private, they're like,
Speaker 4:keep going.
Speaker 5:Keep going. But but, yeah, no. I'm just saying, the point I'm saying is, you know, it's like, oh, so then it's like energy, technical talent, understanding how to manage the technical talent, that's an art. Like, we have the right venture people, the right entrepreneurs, the right spirit. We have generations of people who are entrepreneurial here.
Speaker 2:It's like The kind of tall poppy syndrome?
Speaker 5:Yeah. It's funny you mentioned that. That's like, yeah, like we're very well, this is the thing, we have to fight for this. Yeah. Because that no tall poppy, what that basically means, people may not realize this, but in any other every other culture I know of, and like, and I lived abroad in Germany, Europe, incredible cultures.
Speaker 5:Mhmm. But if you you your head sticks above the line, it gets cut off. Yep. There's one culture where that doesn't happens here. The only thing is we have to fight for that because the thing that unifies the woke left and the woke right is they don't like the consequences of meritocracy.
Speaker 5:Mhmm. They want to work back to the inputs. So, and that that like just will screw society. It's like you've got to be able to allow people to succeed wherever they go. Now I I was kind of still progressive, you know, and believes it.
Speaker 5:I super would like the inputs to be fair.
Speaker 2:Yeah.
Speaker 5:But the outputs, those are the outputs.
Speaker 1:Yep. The results of freedom.
Speaker 2:Okay. Last question. We gotta get you out of here. I walked by your office. There were some kettlebells.
Speaker 2:What what are the kettlebells for?
Speaker 5:Oh, okay. Well, this is slightly longer. I'll give you a short version. Please. So to be a cross country skier, you've got to train year round.
Speaker 5:Yeah. So you need substantial VO2 max and actually you need to be strong per unit of weight. So, as an example, I do three days a week of kind of above and below lactate threshold running, but mostly pretty far and then once a week kind of at. And then I do two days of strength, one day of like endurance strength. And currently, the thing I'm actually really proud of is just started doing hanging from a bar, so dead hang like four months ago and I hit four minutes and thirty six
Speaker 2:Four
Speaker 3:six What's minutes and the
Speaker 5:goal for
Speaker 2:the end of
Speaker 3:the year?
Speaker 2:What do we do?
Speaker 5:Well, actually my goal for the yeah.
Speaker 2:You gotta you gotta the soundboard.
Speaker 5:This isn't just money. No. This is a no. I mean, my goal for the year was for actually the next twelve months was was four minutes.
Speaker 3:Okay.
Speaker 5:But then there's the number
Speaker 3:two We gotta get those numbers up.
Speaker 5:Yeah. Yeah. Well, no. But the number two, the second best mountain climber in Norway.
Speaker 2:Yeah. Don't know
Speaker 5:if you know his name. But he I have a picture. He did four minutes and twenty two seconds. Oh.
Speaker 1:There you go. That's nice.
Speaker 3:There you go. What can
Speaker 5:I do?
Speaker 3:Well, we did it part time.
Speaker 2:It's Oscar's famous.
Speaker 3:Thanks for having us. Bye. Appreciate your work.
Speaker 2:We'll talk to you soon. Have a great rest of your day. Congrats.
Speaker 5:You too.
Speaker 2:My question is we're gonna go through the timeline. Tyler Cosgrove has written out the full United States versus Google case timeline. We're gonna dig through. We're also gonna go through Ben Thompson's. But my question that I wanna answer is, what do these what do these pay for default deals look like going forward?
Speaker 2:Specifically, in artificial intelligence, there is going to be a particularly odd dynamic around how LLM queries route on the iPhone by default. Like, the last possible moment to start taking AI seriously and build, like, a serious AI foundation model lab, the the last moment that you could credibly do that, I feel like, or was earlier this year. Like, that was when the the the the last train left the station. And who was driving that train? Mark Zuckerberg.
Speaker 2:And what did he do? He went and tried to buy everything that was buyable and hire everyone who was hireable.
Speaker 3:Weren't buyable.
Speaker 2:Yeah. For sure. And what he wound up with was not exactly a dream team. He didn't get Ilia. He didn't get Dario.
Speaker 2:He didn't get Demis, but he got a really solid crew. Right?
Speaker 3:And some great business guys.
Speaker 2:Some great business guys, some great researchers. He he also just filled out the the the researcher tiers. Like, he's got a ton of researchers. So I feel like He wasn't
Speaker 3:worried about salary caps.
Speaker 2:No. No. No. Not at all. And so and and so we were debating yesterday whether Alex Wang was a good pickup for Mar Meta.
Speaker 2:And my conclusion is, like, he is the best possible option, and I think it'll pencil out. I think it'll be a good deal. It is a big acquisition, and it'll be interesting to see how we look on that in a decade. But I think the opportunity is so big, it makes sense. At the same time, like, what would Apple even do if they wanted to compete in AI?
Speaker 2:Like, everyone is taken off. All the all the pieces are off the board at this point. They don't have the DNA for mega acquisitions, so they're not gonna go and try and buy Anthropic. Like, that that's just not how they work. They don't like writing $100,000,000 checks for talent.
Speaker 2:Tim Cook only makes $74,600,000 a year. They're not gonna pay some AI researcher a $100,000,000. Yeah. It's just not gonna happen. And so everyone else sort of has a dance partner at this point.
Speaker 2:Apple wouldn't just be, like, trying to turn the cruise ship that is Apple. They're building an entirely new cruise ship. It's just not gonna happen. So I don't think Apple is is going to try and build a serious frontier lab. I think they're gonna partner on this.
Speaker 2:And the question is where does it leave them? They have something incredibly valuable. Do you know how many active iPhone users there are worldwide right now?
Speaker 3:One and a half billion.
Speaker 2:1,400,000,000. Isn't that a ton? That just I I feel like I was if I had to just guess, I'd be like,
Speaker 3:job's not finished.
Speaker 2:Truly. Truly. But but so like that is incredibly valuable because it's not just it's not just over a billion users. It's over a billion users that have can charge
Speaker 3:$9.99 a month Yes. Forever randomly.
Speaker 2:Yeah. Yeah. There's so many different monetization. But it's also it's like, it's it's the top 1,000,000,000 really, usually, like, basically of, like, earners because it's the most expensive phone usually. And so and they also have that button on the side that right now activates something that should feel like AI but is very clearly far from the frontier.
Speaker 2:And so the logical outcome feels like a partnership here, but what will the scale and structure of that partnership be? If OpenAI really nails agentic commerce, as semiannualysis suggests, it wouldn't be crazy for OpenAI to pay Apple billions of dollars to be the default. And so right now we're thinking about if you push the Siri button, you trigger an LLM inference query that's very expensive. Every time I hit ChatGPT, it's a couple cents. If I do some crazy reasoning thing, some deep research report, might be a dollar.
Speaker 2:I don't even know. It is expensive. Right? If I'm sending off some agent to go and, like, research every single type 10 aquifer somewhere. Yeah.
Speaker 2:Yeah. That's what it feels like. Right? It feels like every time you hit you hit a query, it's expensive. And so but that's gonna flip.
Speaker 2:And I think each query is actually gonna be monetizable, and they're all gonna be they're basically all gonna be profitable like Google searches. And so what if they are profitable, if every time someone hits an LLM, it's not a cost center, but it's actually a profit center, well, then OpenAI can pay to get more search volume, some more query volume. And so that means that maybe OpenAI will wind up paying Apple billions of dollars to be the default. And, of course, they're gonna try and build their own device, and there's a lot of other dynamics. But would they go with Gemini?
Speaker 2:Because they're already on Google for the search default. But would they go would they do that? Or or is that too is that never are they never gonna be able to compete there because Gemini is so deeply integrated with Android and the Android phones are are over here kind of doing their own thing? So you can imagine
Speaker 3:And and over this year, there's been rumors bubbling up of Apple and conversations with Anthropic Yep. With ChatGPT Yep. With Gemini. Right? And a lot of these companies have been throwing around some very big numbers with with Tim and the Apple team.
Speaker 3:And I think they had at least back then, they they seem to have some stickers.
Speaker 2:So right now, it feels like the Foundation Labs are going to Apple and saying, every time we run a query, it costs us 1¢, 10¢, a dollar, whatever. You gotta pay us to use our amazing intelligence.
Speaker 3:Yeah. To bring value to your users.
Speaker 2:But I think it might flip. And I think that each query might actually be profitable just at the query level because there's going to be commerce that's triggered from those. So in the future, you'll pick up your phone, you'll press the button on the side, and you can instantly fire off a best in class OpenAI agent to do your bidding. So you'll say, order me some creatine, and it'll just go do it. And that will be valuable, and that will actually drive that will be a profitable query.
Speaker 2:And so OpenAI could potentially be paying Apple for the right to do that. So Yeah. Right now, OpenAI OpenAI and Apple do have a partnership in place, but the reporting suggests that no money is directly changing hands. But I don't necessarily expect it to stay that way. So I don't know.
Speaker 2:What's your take? What how do you do do you think that this is reasonable that OpenAI could be paying Apple billions of dollars within the next, I don't know, five years? Or do you think it it it flips the other way and Apple is the one shelling out billions of dollars for access to frontier AI models from maybe Anthropic, maybe maybe OpenAI, maybe someone else?
Speaker 3:Yeah. It's interesting. I mean, the people that are paying for ChatGPT today probably have a pretty insane overlap with iPhone customers. Like it probably looks something like this.
Speaker 2:In the circle.
Speaker 3:I I think that Sam recognizes I mean, every consumer tech entrepreneur has like realized how important it is to integrate at the hardware level. Right? This is why Zach is hell bent on winning in VR. Right? He's been sick of like being at the app layer.
Speaker 3:Totally. And I know that Sam does not wanna be in that same you know, why would he pay billions for Johnny Ive and that team?
Speaker 4:Like, he
Speaker 3:he he he understands the importance of the hardware layer and certainly will recognize the leverage that Apple is gonna have over the entire ecosystem. I think the question is a lot of this just comes down to, in my view, are consumers gonna be paying for AI in the long run? I haven't been totally convinced that that the everyday American is gonna be spending, certainly not $200 a month. I don't even know about $20 a month.
Speaker 2:I think it flips.
Speaker 3:Gonna ultimately flip. So I can there being a period where OpenAI is willing to pay to be like the default intelligence product within the Apple ecosystem. But again, there it is just gonna be a really it'll be it'll be an interesting dynamic and partnership. Right? Because it's gonna it's so there's so much tension there because Apple is gonna want us Apple is already selling intelligence as a reason to upgrade the iPhone.
Speaker 3:Right? And they've they've gotten lawsuits over this because they sold Apple intelligence and then people are like, this isn't very smart at all. What did what did I just buy? Right? And so are they gonna be incentivized to say
Speaker 2:Even 70 IQ is a form of intelligence. It's just a low level of intelligence. Yes. They didn't say they didn't say Apple high IQ intelligence. They didn't say Apple super intelligence.
Speaker 2:They just said Apple intelligence. It has some level of intelligence.
Speaker 3:Room Apple room temp.
Speaker 2:Room temp intelligence.
Speaker 3:Room temp. Hi, Apple.
Speaker 2:What do you think, Tyler? Do you think that OpenAI will be paying Apple, or do you think Apple will be paying other Foundation Labs? Or or what where will the flow of money go in the next few years?
Speaker 4:Yeah. I I don't really see it flipping very soon Mhmm. To where like prompts or or tokens are like actually super profitable. Mhmm. Because you need like both massive you need like way better capabilities and it needs to be way more efficient.
Speaker 4:Because like if you just have more capabilities, still, like, right now, most people are not paying for ChatGPT. They're just using the the, you know,
Speaker 3:free Sure.
Speaker 2:Plan Free tier.
Speaker 4:Which is like, if you compare I mean Yeah. If you compare four o, like, look at, like, five months ago, if you compare four o to, like, o three
Speaker 2:Yeah.
Speaker 4:It was, like, massive, you know, difference and people still weren't paying.
Speaker 2:In cost
Speaker 4:or in In capability. Capabilities. Yeah. Yeah. And people still weren't paying.
Speaker 4:So you need to be like way better in order for people to actually start paying or you need to be way cheaper.
Speaker 2:Yeah. I don't know if
Speaker 1:I agree that.
Speaker 2:I I I feel like four o was definitely good enough. People were obsessed with it. People were, like, falling in love with it. Right?
Speaker 3:Even Meek Mill.
Speaker 2:Like, I understand
Speaker 3:Mill is defaulting.
Speaker 2:I, as a power user, like, didn't get that much out of it. But
Speaker 4:Yeah. But I I I think you like, if you ask normal people what they think of, AI, they're like, oh, yeah. This is not gonna take my job at all. Yeah. When in reality, if you used, like, o three and they if they use o three every day, they if they were a power user, they'd be I think they'd be way more bullish on AI generally.
Speaker 4:Yeah. So I think that might be evidence that people, like, I don't know, are not
Speaker 3:I think, I mean, one crazy dynamic is Apple says I mean, if they were to do a deal with OpenAI, they could just say like, great, like we're gonna sign up every like how many paying subs do you have? Great. Start heavily if Apple just starts heavily pushing ChatGPT, they will by default get their 30% from the App Store. Right? But they could work out.
Speaker 3:So like this could end up being like even if even if OpenAI is not directly paying
Speaker 2:Yeah.
Speaker 3:Apple for it, it could end up generating
Speaker 2:I don't think it's enough.
Speaker 3:You don't think it's enough?
Speaker 2:I don't think it's enough money for the value that that it'll bring on. If it was actually integrated into, like, the Siri button at the low level, I can just press a button and say, order me creatine. Order me creatine, and it knows my address because it knows my home address from my contact in the Yeah. In there. It has my payment information saved.
Speaker 2:It does all of that. Like, I don't know if taking 30% of my ChatGPT subscription if I subscribe and if I subscribed on mobile, but, really, most people are gonna subscribe on desktop, and OpenAI is gonna be constantly being like, hey. Go over here and, like, use a web view to, like, subscribe this way and stuff. I don't know. It'll be interesting to see how it how it pencils out.
Speaker 2:I feel like there's gonna be some new deal that that that that's gonna gonna happen. Someone's gonna someone's gonna pay. Someone's gonna bid. Someone's gonna pay out.
Speaker 3:Yeah. The Google team says, hey. We're already paying $2,020,000,000,000. Why don't we double it to be Gemini would be the default?
Speaker 2:Can you imagine? I mean, if Gemini was the default on on on iPhone, that would be bizarre. But, I mean, it does kind of like it does kind of match with the with the search deal. Right? Yep.
Speaker 2:Anyway, let's read through Ben Thompson. Maybe we maybe we go through the the history first to get us up to speed, Tyler. Do you do you mind taking us
Speaker 4:a Take
Speaker 3:us through it.
Speaker 2:So this is The United States versus Google Yep. Which started in 2020?
Speaker 4:2020. Starts in October 2020. So that's under Trump.
Speaker 2:Okay.
Speaker 4:So yeah, think let's just go over kind of the central claim of the actual case first.
Speaker 2:Okay.
Speaker 4:So basically that Google is violating the Antitrust Act It's of '18
Speaker 3:to think about, before Donald Trump was a technology founder Yeah. With True Social, there was a time where he was beefing with big tech.
Speaker 2:Yeah, it's crazy.
Speaker 3:Feels so long ago.
Speaker 2:Instead of just competing.
Speaker 3:Oh, thanks for getting us up on VHS. We needed this.
Speaker 2:Fantastic. Only possible on Restream, one livestream, 30 plus destinations. Multi stream your VHS tapes and reach your audience wherever they are. Head over to Restream.
Speaker 3:It truly is. Technology is incredible.
Speaker 2:Yes. Also, yeah, continue.
Speaker 4:Okay. So Sherman Antitrust Act of 1890. I also put some of the victims, previous victims of this act. So we see Standard Oil. Oil.
Speaker 4:American Tobacco Company, U. S. Steel, AT and T. This is what broke up Bell Labs. Yeah.
Speaker 4:Probably set us back a couple decades.
Speaker 2:You know who founded Bell Labs? Pop quiz. Who founded Bell Labs?
Speaker 4:Wait. Is it like Oh, I don't know. Is it Claude Shannon? No.
Speaker 2:No. Who founded Bell Labs? Oh. Bell Labs?
Speaker 4:Alexander Graham Bell.
Speaker 1:Alexander Graham Bell. Yeah. No way.
Speaker 2:That's correct. Yep. Alexander Graham Bell started Bell Labs.
Speaker 4:Let's go.
Speaker 3:Original don't know to company.
Speaker 2:I know. I was looking at the names.
Speaker 3:Standard Oil. American Tobacco, What
Speaker 2:does the a in AT and T stand for? Is that America? American Technology and
Speaker 3:Let me ask Gemini.
Speaker 2:Okay.
Speaker 3:What does AT and
Speaker 2:T Okay. Anyway, continue. Okay. Microsoft, of course, it was a headache for Bill Gates for his entire career until he retired.
Speaker 3:Yep. Oh, that's so good. American Telephone and Telegraph.
Speaker 1:Oh, that's so good.
Speaker 2:When you pick a name like that and you actually you understand the job and you're just like, yeah. Standard oil. I'm gonna standardize oil.
Speaker 3:I need a name for my telephone and telegraph company. What about American American telephone and telegraph
Speaker 4:Okay.
Speaker 2:Okay. Anyway, sorry.
Speaker 4:Okay. Basically the claim is that they're legally monopolizing the search engine and the advertising markets like in search. Yep. So they're locking up distribution. Okay.
Speaker 4:They're self reinforcing barriers to entry. And they're
Speaker 2:And the evidence is that they've paid billions to Apple and other vendors.
Speaker 4:Exactly.
Speaker 2:Probably hundreds of billions at this point because it's been like 10,000,000,000 for decades. Yeah. Yeah. So wow. They are up.
Speaker 4:So so that is they they filed the the case, DOJ, in 2020.
Speaker 2:Wait. Should we start with the history of Google Search and Safari and
Speaker 3:then Sure. Run through Yeah.
Speaker 2:Yeah. That might be better.
Speaker 4:So, yeah. Okay. So Google Search and Safari. So 02/2002.
Speaker 2:02/2002.
Speaker 4:This is
Speaker 2:Pre iPhone.
Speaker 4:Yeah. This is pre iPhone. This is just on Safari on the How? I guess the Mac or Yeah. Whatever it So Google is the default there.
Speaker 4:It's just
Speaker 2:like They just, Apple just picked that
Speaker 4:because Yeah, it was the just the best just put it in. Yeah. There's no like
Speaker 3:Google's deal right been the default search engine on Apple devices since 02/2002. Yep. And we don't know specifics. Most recently, was $20,000,000,000 annually, but but it's been over twenty year partnership.
Speaker 2:I mean, that's a crazy it's crazy to go. I mean, Google was founded late September nineteen ninety eight. And then by 02/2002, you're the default on Apple, like the previous era biggest compute computing company. I mean, I guess Apple wasn't like what it is today back in 02/2002, kinda pre iPhone. It was certainly not like the biggest company in the world.
Speaker 2:But still like
Speaker 3:Pre Tyler too. Yeah. Tyler's too. I mean,
Speaker 4:Three years? 02/2005.
Speaker 3:02/2005. Wow. Hey, if you wanna feel old, born in 02/2005.
Speaker 2:Born in 02/2005. Okay. So anyway, Sergey Brin, what does
Speaker 4:he do? So so 02/2005, Sergey Brin suggests suggest some kind of revenue share. They they always call it a revenue
Speaker 2:the goodness of his heart? What what is he thinking?
Speaker 4:That's crazy. I I have to assume there's it's like there's some He's nice man. He's seeing it on the horizon. Okay. Yeah.
Speaker 4:But yeah, I like that he they always call it a revenue share. They don't they're not paying Sure. The default.
Speaker 2:Sure. Sure. Sure.
Speaker 4:They're just helping a brother out,
Speaker 2:you Yeah. And then,
Speaker 5:thousand seven Seven
Speaker 2:and wealth.
Speaker 4:Yeah. 2007 to 02/2009, are like the real negotiations. They're like, it's like Sergei Brin says like, oh yeah, we can do revenue share but then when it comes down to it, he's like, well, you know, let's slow down. Let's push the brakes a little bit. The numbers are getting a little high.
Speaker 4:And then basically, the the actual like numbers are not public.
Speaker 2:Yeah.
Speaker 4:They really only show up as a result of this case like Sure. Them being
Speaker 2:Oh, after the fact. So we learned this through the case. We didn't know for years.
Speaker 4:Yeah. It's not really till 2021.
Speaker 2:Actually, there's like a full decade where people were like, yeah. Like Google's probably paying Apple something.
Speaker 3:What what yeah. But hiding hiding a
Speaker 2:$30,000,000.
Speaker 3:$20,000,000 line item and you're
Speaker 2:You can do it if I I I believe the disclosure rules and SEC filings are something like if it's a if it's a if it's a division of the company that reports the CEO, then you have to break out the financials. This is like YouTube. This is the story of, like, AWS when we first got the AWS financials. So if it's just something like like, you know, it's some deal and it's just one deal, like, it's A deal. It's not even a it's not even like a whole division
Speaker 4:of It's the
Speaker 3:deal I did with Steve.
Speaker 2:Yeah. It's just like just like other other income or something like that. Don't know.
Speaker 4:Anyway, okay. So Yes. So 2021, it's it's kind of revealed or estimated at least that payments are around $20,000,000,000 a year. And then 2023, this is also a result of the case. Sure.
Speaker 4:Apple is confirmed to be taking 36% of the revenue from Safari that Google makes.
Speaker 2:Okay. So it's similar to their App Store revenue, little bit higher, 36%. Yeah. And that's probably how they got to the number. That's pretty crazy that Google's making $6,000,000 off of
Speaker 3:I never knew they got where they were getting $30.36 percent for the big man.
Speaker 2:For the big man.
Speaker 3:For the big man. That's crazy.
Speaker 4:Yeah. Then $20.25 We
Speaker 3:know you paid to but be I'm gonna need a cut too.
Speaker 2:Yeah. Wow.
Speaker 4:Yeah. Okay. So let's go through
Speaker 2:the Yeah. Case. Case.
Speaker 4:The case.
Speaker 2:Yeah. Break it up.
Speaker 4:So September 2023, this is really the first actual trial. It's the bench trial. I don't really know what that is, but August 2024 is the actual initial judgment. Okay. So this is Google is in fact violating antitrust.
Speaker 4:Yes. Like something needs to be done. We don't know what is to be done.
Speaker 2:But we're gonna do but then we will eventually decide what the punishment is. Yeah. But they are guilty.
Speaker 4:They are guilty.
Speaker 2:They were found guilty.
Speaker 4:There's results like what are they going to do. Yes. They're guilty. And then it's not until April 2025, so this is five years after the Yep. It was actually filed.
Speaker 4:There's the remedies trial, I think that's what it's Sure.
Speaker 2:Yeah. Figuring out
Speaker 4:the remedies. So this is like what is actually to be done. Now, like we know that they're a monopoly. What do we do about it? And then it wasn't until I guess yesterday That
Speaker 2:we found
Speaker 4:out what the verdict was.
Speaker 2:So
Speaker 4:I think we already went through some of the verdicts. But it's the judge denied the DOJ's request for forced divestiture of Chrome and Android. They ordered Google to end exclusive distribution agreements. So that's like I think we talked about this too with Apple. You can't like just it can't be exclusive to Apple Mhmm.
Speaker 4:The like payments or whatever.
Speaker 2:Yeah. What what does that mean in practice? It can't be exclusive. So they have to pay, like, Xiaomi or something? Are we talking about other phone manufacturers?
Speaker 2:Are we talking about other other search engines? Like, I know that it like like, it's not like if I go into my Safari settings, I I can't pick a bang. Like, I I I can still pick other things. It's just the default that that they're paying for. Yeah.
Speaker 2:Have to dig into that. Jordy, do you do you wanna look that up or something?
Speaker 3:At Gemini. Okay. Cool.
Speaker 4:I don't Yeah. It's kind of like legalese. And then there's mandating Google to share search index and end user. Basically sharing data with I don't
Speaker 3:understand the exclusives. Google pays Mozilla.
Speaker 2:Yep.
Speaker 3:Mozilla basically wouldn't survive without Google apparently. It's like a very significant amount of their revenue, which is funny because Google obviously competes with
Speaker 2:On Chrome.
Speaker 3:With Chrome. And then they do this with device manufacturers like Samsung that just continue to make Chrome and Google Search preinstalled Sure. For
Speaker 2:And then what's the last one? Search index, sharing of the search index and user interaction data with rivals. So was that Bing?
Speaker 4:I guess. Yeah. So I guess this means these are all basically direct quotes from the actual like file. Yeah. But I assume it means that they have to just share some of the like actual like
Speaker 2:Okay.
Speaker 4:Index data Okay. From like whatever PageRank They have to like put out publicly.
Speaker 2:So we gotta hammer the Chief Product Officer of Microsoft today about Bing and what this means. Because, yeah, I mean, there's gotta be a way to make money off this if you're Microsoft. This is the way to do it. Okay. Anyway, anything else from the history
Speaker 3:of Okay. Just to be clear, prevent exclusive contracts. So Google is barred from entering or maintaining exclusive contracts that give its search engine, Chrome, Google Assistant or Gemini app a monopoly position on a device. So basically they can't go to a smartphone manufacturer and say you just can't host any other.
Speaker 2:Sure. The chat, Paraclete says Google's only to share their search data with like other top three companies. It's still remaining monopoly. Interesting. And people people enjoy the VHS.
Speaker 2:So thank you for for tuning in.
Speaker 4:Yeah. Also, so so these rules also apply to like Gen AI stuff. Yeah. So this All this also applies to Gemini if they want to do the same if they want to lease it to Apple or whatever. All the same rules apply about
Speaker 2:If you've been enjoying the whiteboard segments, we are thinking about getting a smart whiteboard where we can put up a FigJam from Figma. Of course, by Figma. Think bigger, build faster. Figma helps design development teams build great products together. You can get started for free at figma.com.
Speaker 2:Let's run through Ben Thompson's take. So he kicks it off with Google's remedy decision. Alphabet Inc will be required to share online search data with rivals while avoiding harsher penalties, including the forced sale. We know this. Google's statement was short and sweet.
Speaker 2:Earlier today, US court overseeing the DOJ's lawsuit over how we distribute search issued a decision on next steps. He the, Google closes as as always, we continuing to we're continuing to focus on what matters, building innovative products that people choose to love choose and love. It's a good line. That's a statement of a company that lost some battles but won the war in my estimation, says Ben Thompson in in Strathecari, which you should go subscribe to. There are some cursory objections to judge Mehta's decision, but by and large, that statement exudes relief and rightfully so.
Speaker 2:The company that is truly breathing the com the company is truly breathing easier today, however, is Apple. Apple's actually breathing easier because they're getting that sweet, sweet, sweet, sweet twenty, thirty, 60%
Speaker 3:off the top. 99% margin, 20,000,000,000 a year.
Speaker 2:The first set of remedies, were the ones that Google proposed and has already implemented, namely an ending the exclusive agreements that were the foundation of judge Meta's original finding of liability. So let's see. I want to know what these actual remedies are. Here we go. Again, this is literally illegal behavior.
Speaker 2:What?
Speaker 3:We should just highlight again. So Google will be barred from entering or maintaining any exclusive contract relating to the distribution of Search, Chrome, Assistant, Google and shall not enter or maintain any agreement that conditions the licensing of the Play Store or any other Google application on the distribution, preloading, or placement of Google Search, Chrome,
Speaker 2:Assistant, This is the bundling thing. So a lot of the antitrust cases hinge on bundling. You say, oh, you can't have the Play Store on your Android phone unless you're defaulting to search, or you you have to have Chrome preinstalled if you want access to search. Like, all of that stuff is is Yeah. Seen as anticompetent.
Speaker 3:And so Ben says, again, this is literally illegal behavior, so ending it was the bare minimum. Yep. Antitrust precedent, however, dictates that judge Meta go further, again, from the opinion. This is from Meta.
Speaker 2:Yeah. Oh, this is good too. So they cannot enter or maintain an agreement that prohibits any partner, either Apple or Samsung, from simultaneously distributing any other search engine, browser, or Gen AI product. So you so Google can't go to someone and say and say, hey. You in order to have search as your default or Google search or whatever deal we're doing or whatever we're paying you, you can't have Anthropic preinstalled, or you can't have Mozilla preinstalled.
Speaker 4:Like, you you can't choose
Speaker 3:the board.
Speaker 2:Yeah. Can't be in the And and that and that is illegal behavior, and so ending it was the bare minimum, says Ben Thompson. Antitrust precedent, however, dictates that judge Meta go further. Again, from the opinion, the question now is what to do about Google's violations. Precedent requires fashioning antitrust remedies that effectively pry open to competition a market that has been closed by a monopolist's illegal restraints.
Speaker 2:Denying the fruits of the violation is a valid objective, and so too is ensuring that anticompetitive behavior will not recur in the same or related ways. The court has broad discretion to impose remedies to accomplish those aims. Judge Mehta laid out four fruits of the violation. The court found that the agreements had four main anticompetitive effects. They, one, foreclosed a substantial portion of the relevant markets, thus impairing rivals' opportunities to compete.
Speaker 2:Two, denied rivals access to user queries or scale needed to effectively compete. Three, reduced the incentive to invest or innovate in search. And four, enabled Google to increase text ad prices without any meaningful competitive restraint, thereby allowing Google to earn monopoly profits to secure the next iteration of exclusive deals through higher revenue share payments. These effects did not persist independently. Together, they enabled Google to widen the moats and pull up drawbridges to ward off competition.
Speaker 2:Great analogy.
Speaker 3:Judge Mehta attempts to address number two necessary scale by forcing Google to share various types of data, including Google's search index, but not the actual data from the web pages in the index or the output. Google's page rank algorithm. Competitors, which explicitly include Gen AI providers, get a one time snapshot, not an ongoing one, and only need to pay Google's marginal cost for providing the information. User click and query data showing what results users clicked on. Competitors will get this data at least twice, but the final number will be determined by the technical committee.
Speaker 3:The court will set up an oversee. Do you fully understand, like
Speaker 2:Yeah. That's a very, very odd odd, like, change in in in remedy. Like, I I I guess it, like, lets people catch up to where things are. I it it feels like the Remedy is like like, there has been this this unfair advantage for Google for years. We're letting everyone catch up, and then we're creating, like, a fair race, but we're restarting the race, and then everyone can go out and do whatever they want.
Speaker 2:Current thing is big numbers. $200,000,000 for the free press. They're Weiss's media company to CBS. People did not like the quiet in the chat. They said scream.
Speaker 2:We're back to $610,000,000 for the browser company. We talked about that a little bit yesterday. Ramp hit $1,000,000,000 in ARR. Let's Great
Speaker 3:hit. Great hit. 600,000,000,000 in meta CapEx.
Speaker 2:CapEx and 1,000,000,000,000 potentially on the table for Elon Musk at Tesla. So we're gonna go through this. So the free press is one of the most impressive media companies built in the last decades as Austin Reef from Morning Brew. Correct?
Speaker 3:Yes.
Speaker 2:Huge congrats to Barry Weiss, Nelly, snoo Snoozy Weiss, for this is a funny name, for building something truly different. This is, I think, still rumored. I don't think it's fully confirmed at this point, but it's all it's all but.
Speaker 3:Yeah. It was hard to tell which side was leaking the news.
Speaker 2:Yeah. There's this dynamic where media likes to talk about media, and I feel that a 100%. It's super interesting to hear about, like, the business of Joe Rogan or the business of Huberman Yeah. Or or any of the experts. But so so, obviously, also, you know, you're surrounded by journalists, literally, if you run a media company, so they all talk.
Speaker 2:Journalistic force headed towards you. Stand before. But you're surrounded by journalists. And so, obviously, everyone talks, and the media leaks out, and the news leaks out.
Speaker 3:And it could be interesting ways for either side to put pressure on getting Totally. Finish line and getting what they want of the deal.
Speaker 2:Yeah. Yeah. And so, there's there's a series of takes. I was talking to a buddy who works in media who was, coming at me with, like, a it's a crazy number. And so that's kind of level one.
Speaker 2:Level one of the take is, like, on a price per subscriber basis seems high. Think they have about a million free subscribers. $200 per free subscriber feels like a lot, I guess. Kinda hard to tell if you think about long term value for CBS. But then others are complaining about the political implications of the deal.
Speaker 2:Is this something that's like a give to Trump to help get the the the the demerger, the spinout approved, something like that?
Speaker 3:Yeah. And, I mean, this is an $8,000,000,000 deal
Speaker 2:Mhmm.
Speaker 3:This merger. And media companies are now entirely like media companies at their best are personality led. Yep. And paying $200,000,000 to bring on, you know, a face for CBS, one of the most important properties makes sense.
Speaker 2:Yeah. That's my that's my, like, level three, like, final take, which is that you sort of have to put a put aside the price per subscriber, you know, take, and you have to put aside the political implications of the take. I just think about it from it's a big company. 8,000,000,000, you said, something around there. Does bringing a younger, more entrepreneurial talent into the organization move the market cap by 1% or 2% Yeah.
Speaker 2:Over the next few years. Like, I it seems like the same math that we're doing for buying a very expensive AI researcher. You're paying a lot of money in terms of, like, what what, like, a salary would count, but you just can't get that level of talent on any sort of normal the overall property. Exactly. Exactly.
Speaker 2:And so I was the the the person I was talking to who was like, this is a ridiculous price. I was like, yeah. But, dude, like, if if you were at CNN, you could probably add $200,000,000 of value to that organization pretty quickly. Yeah. And so it's just a matter of time until, like, the market and the board of directors and the shareholders kind of wake up to that dynamic of how power law certain people are and actually go and figure out how to get the deals done.
Speaker 3:And And David Ellison is doing deals. Right? He just did 100%. C deal. Percent.
Speaker 3:Fair amount.
Speaker 1:100%. And and
Speaker 3:So there's a lot of big numbers flying around.
Speaker 2:And there's an and there's an interesting ding ding where
Speaker 3:And the premium. Right? We saw this yesterday with the browser.
Speaker 2:Oh, yes. Yes. Yes. Right?
Speaker 4:So you do get a
Speaker 3:big Fantastic. For having the the at the beginning of the name.
Speaker 2:Maybe we should just be the business production network. Drop the technology. Technology's over. The hype cycle's peaked. We're just the business production.
Speaker 2:We're in the trough. We're in the trough. We have some fun stuff coming in terms of the hype cycle soon. But it's interesting because many companies just cannot justify putting someone on staff for a $100,000,000 w two. I mean, we've seen this as Apple with Tim Cook.
Speaker 2:You know, the the CEO pay. Once you get into the the these $8.09 figures Thank
Speaker 3:you for bringing that up. No. Thank you for no. Seriously. Thank you for bringing that up.
Speaker 2:Oh, yes.
Speaker 3:It is. Thank you. Apparently, Tim Cook we'll we'll try to pull up this video in a bit. Apparently, said thank you 12 times in two minutes when talking with president Trump last night at the dinner.
Speaker 2:Yep. So No. He's very grateful. So the so, yeah, Meta's, like, the first company to really, like, break this trend of just like, yeah. We're willing to pay a $100,000,000 in salary.
Speaker 2:We will do the crazy acquisitions and the acqui hires to get really talented people in the org, but I don't think other companies are in that world where they could go out and hire somebody like a Barry Weiss just for a $100,000,000. It's gotta be done through an acquisition. That's what gets board approval. That's what gets shareholder approval. And so you're kind of wrapping an individual, an influencer, someone who's incredibly talented and entrepreneurial around an organization just to actually get the cash flow to flow through.
Speaker 3:It's making me think about c CBS News for the first time in decades. Yep. So
Speaker 2:Yep. Yep. Yeah. Yeah. It's true.
Speaker 2:And even if the even if, like, the subscriber numbers are, like, a little low I mean, honestly, a million's a ton. It's a great job. But even if they are a little low, it's like, well, what is it? What are they compounding What what what will the free press be able to be at in a decade with the support of CBS and the and the backing financial backing of CBS and Barry Weiss' execution strategy, like, could be a 100,000,000. I don't know.
Speaker 2:It could be really, really big, but you don't have to raise money for it. You you you can just focus on growth. Anyway, similar story at the browser company, $610,000,000 from Atlassian. Very interesting deal. The timeline was not a fan of came
Speaker 3:from the land down under with a brinks truck.
Speaker 2:Yes. And so backed
Speaker 3:it up.
Speaker 2:A lot of people are asking is this is this summit run around by the Australian government to try and influence the browsing habits of Brooklyn hipsters?
Speaker 3:Yep.
Speaker 2:I don't think there's much Try to
Speaker 3:control the narrative.
Speaker 2:Exactly.
Speaker 3:So as a way to say, you know, what what if we could get all of the data from Brooklyn hipsters
Speaker 2:Yeah.
Speaker 3:All their browsing information Yeah. They're known communication.
Speaker 2:Yeah. They're known for drinking PBR. But what if every time they went to PBR on the ARC browser, the Dia browser, it just automatically rerouted them to Fosters.
Speaker 3:Yeah.
Speaker 2:What if
Speaker 3:For the AI assistant on the side popping
Speaker 2:Oh, you're you're in Dia.
Speaker 3:You might like
Speaker 2:to them. Oh, what should I do this weekend? And it just auto auto populates. Oh, yeah. We're using AI.
Speaker 2:Throw why don't you throw another shrimp on the Barbie?
Speaker 3:Yeah. And if you search, is it true that kangaroos are extremely violent? It'll start spinning it and saying, well actually, they're only violent when provoked. Provoked.
Speaker 2:Yeah. They're actually quite peaceful. Yeah.
Speaker 3:Your dog actually tried to barked at the kangaroo, and then the kangaroo went after it. Exactly. Exactly. I think this I think this really smart
Speaker 2:Yeah.
Speaker 3:From from from
Speaker 2:From people pulling the strings in in Australia. Yeah. To get a little bit more influence over the Brooklyn hipster
Speaker 3:Yep.
Speaker 2:And the ARC and Dia user. Yes. Zeb did not like the acquisition.
Speaker 3:So Pull this up.
Speaker 2:Me uninstalling ARC as a certified Atlassian hater. There is a wild gap between the vibes. And so Yeah. Some people have this take that, like, there was an it was a vibe acquisition. They acquired good better vibes with the next generation of founders.
Speaker 3:Arts I think this is funny. Certainly has that. But I think that from from what we've seen, Dia, they're gonna continue to operate independently. I bet they're gonna build some beautiful enterprise browsing experiences like they always have.
Speaker 2:Yeah. And they should they should build and restream one livestream, 30 plus destinations, multistream, and reach your audience wherever they are. So you should be able to stream from your Dia browser, from your ARC browser. So my my take on this was there's so basically, right now, the team is saying we're gonna stay independent. We're gonna go.
Speaker 2:But my question is, they gonna stay? Are they gonna stick with that narrative of, like, stay independent? And this is very rare for pre product market fit acquisitions. I haven't seen a ton of examples of that where a company was acquired that wasn't, like, clearly on a, you know,
Speaker 3:just Remember. Remember. Instagram was bought for a billion dollars. Yes. And almost everyone involved at the time thought that it was crazy.
Speaker 2:They did. Yeah. That is true. At the same time And
Speaker 3:it and it was like a key threat to Meta's business. Right? Like the user growth was Yeah. Insane.
Speaker 2:I mean, I would love to look at the, the retention metrics for Dia versus Instagram because it's totally possible. I I don't know. Do you know how many DAUs or or total downloads Instagram had at the time of acquisition? I know it was small, but was it sub a million? I feel like it might have been a little bit bigger.
Speaker 2:Can someone look that up? But basically
Speaker 3:Look that up, Tyler. I'm also curious about YouTube as well. Oh, yeah. YouTube was bought for
Speaker 2:Yeah. How many people
Speaker 3:were using YouTube? Three times. Yeah. And again, our our the dollar isn't what it used to be.
Speaker 4:Yep. Yes. So when Instagram was acquired, estimated around 860,000, so less than a million DAUs.
Speaker 2:Okay. Okay.
Speaker 3:So DAUs, though.
Speaker 2:Yeah. Yeah. But still, I mean, we're in the same ballpark here. Very interesting.
Speaker 3:Instagram People people that have
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 3:If DAUs is wildly different than,
Speaker 2:like, users. Okay. Okay. Yeah. Yeah.
Speaker 2:But still, mean, we're we're we're in we're in the rough ballpark where you could where at at very least, you like, we have to take what Atlassian is saying and what the browser company is saying at face value. They are saying we're gonna continue building this browser. We're in it to win the AI browser. We're we're going broad. We're going consumer.
Speaker 2:This is not we're acquiring this browser. We're gonna bake it into Trello, and we're gonna bake it into Jira. No. Like
Speaker 3:I actually disagree with you here. They don't they're they all the messaging was that it this they're they're not gonna be focused on consumer. Like from Atlassian CEO was that we're going to build great enterprise browsing experience.
Speaker 2:Oh, okay. Okay.
Speaker 3:So there's nothing there's nothing in there that that I saw from the Atlassian side that said Yeah. We wanna win in the consumer
Speaker 2:Oh, really? Really? Okay. Interesting. Yeah.
Speaker 3:They are they know their they know their business. Right?
Speaker 2:Okay.
Speaker 3:Yeah. So
Speaker 2:it's very interesting. I I can't imagine having, a work browser, but maybe that makes sense. I mean, people have work laptops. But I feel like the trend has been you have you have, like, one phone that you do work and life on, and then you have separate apps. And maybe you have, you know, an enterprise software product installed on your on your phone.
Speaker 2:But, really, like, there's the trend seems to be more people using, like, Gmail and Google email at work. And it seems like there's less and less like, oh, yeah. Like I have a separate work computer with
Speaker 3:a separate operating system very set up. Chrome is already very set up to have, like, profiles, like personal profiles and work profiles.
Speaker 2:I have two. I I have personal one and then VPN one. So I don't know. Yeah. We'll have to see.
Speaker 2:I mean, the the the founder is saying, like, we're gonna keep working on Dia, but maybe that means in the enterprise context. Anyway, we'll have to keep an eye on, like, they wind up going.
Speaker 3:So Mike said, again, I said this yesterday, with Dia Browser, we're going to collectively redesign the browser to help knowledge workers kick butt in the AI era. And so that to me kind of reads a little prosumer, right? I don't think they're But it feels like very much oriented towards people that are working in the browser.
Speaker 2:Oh, yeah. OTP says, get Sagar on here to give pushback on TFP. Bye. He's going postal about it. I I should text him and see if he wants to hop on.
Speaker 2:We will yeah. We'll definitely get him on when when when he's ready to to to, you know, go live and rip some takes. I also invited Barry Weiss. I'd love to hear her her side of what's going on and what her plan is. It's a it's a fascinating story.
Speaker 2:Of course, like, these are still, like, leaks, so most people don't wanna talk until there's, like, finalized in information. Yeah. Anyway, if you're trying to design a browser, you gotta do it in Figma. Think bigger. Build faster.
Speaker 2:Figma helps design and development teams build great products together. Get started for free. And the third big number of the day, ramp has crossed 1,000,000,000 in revenue. Sheesh. Says Tyler.
Speaker 2:Talking about hogging
Speaker 5:ramp ramp.
Speaker 2:A key question is whether it's gross revenue or it's net revenue. I think it's gross revenue or he goes back and forth on this. But anyway, they've been on a tear. As David Senra likes to say, it's a great example of taking a simple idea and doing it deadly seriously. Taking a simple idea deadly seriously.
Speaker 2:I think David was quoting someone, but I attribute
Speaker 3:everything to David.
Speaker 2:To David's now.
Speaker 3:We should pull up these videos from the dinner at the White House last I
Speaker 2:only have one question for Eric, which is, is the job finished? So we will figure that out today.
Speaker 3:Are you gonna call him?
Speaker 2:I I'm he is he's busy. I'm gonna I'm
Speaker 3:gonna Alright. Play this video.
Speaker 2:Oh, yeah.
Speaker 6:Please. You've done an incredible job with Apple, little company called Apple. Thank you, mister president. Very, very few people have been able to do what you've done. Congratulations, please.
Speaker 6:Sir. That means a lot to me. 2,000.
Speaker 4:I wanna thank
Speaker 6:you for including me
Speaker 2:Three.
Speaker 6:This evening. It's incredible to be among everyone here, particularly you and the first lady. I've always enjoyed having dinner and interacting. I want to thank you
Speaker 2:For. Thank you.
Speaker 6:For setting the tone such that we could make a major investment in The United States and have some key manufacturing, advanced manufacturing here. I think that says a lot about your focus and your leadership and your focus on innovation. I also want to thank you
Speaker 2:That's a
Speaker 6:little for helping American companies around the world. This is a very key key thing, and I really enjoy working with your administration on on those topics as well because I think they're so important to the country. I wanna thank the first lady for focusing on education. Wow. There's nothing more important than education.
Speaker 6:Triple
Speaker 4:Triple glaze.
Speaker 6:It is the great equalizer Truly. And always will be. And so thank you so much for including me.
Speaker 2:One shot
Speaker 6:of We are all different in some ways, but we all believe in the power of technology to improve people's lives, and that that is the thing that that binds us all together. And, Tim, how much money will Apple be investing in The United States? Because I know it's a very lot and and it's, you know, for you were elsewhere and now you're really coming home in a big way. How much money will you be investing? 600,000,000,000.
Speaker 6:600,000,000,000.
Speaker 3:We go. We're very
Speaker 6:proud to do it. That's great. Thank you very much. Thank you. Appreciate it.
Speaker 6:Thank you, sir.
Speaker 2:Wait. Is that 10? Thank you.
Speaker 3:So I think it was 12. Somebody else had counted as 12. I I I was around 10. Yeah. Crazy.
Speaker 3:So we should
Speaker 2:Why wasn't Christina from Vanta there? I feel like that's key to The US's tech strategy.
Speaker 3:I agree.
Speaker 2:Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process.
Speaker 3:We gotta pull up this video of
Speaker 2:With continuous automation of Zuckerberg. This was our fourth big number of the day. Zuckerberg says he will invest around $600,000,000,000 by 2028. Zuckerberg says Meta will invest 600,000,000,000 in AI infrastructure by 2028. Meta's already guided CapEx of 70,000,000,000 in 2025 and a 100,000,000,000 in 2026.
Speaker 2:So that's a big ramp to go from 70 to a 100, and then they still got 430,000,000,000 to do in '27 and '28 to actually re reach 600,000,000,000. Spending would need to jump to 200,000,000,000 in 2027 and 300,000,000,000 in 2028. That's a lot of dollars.
Speaker 3:Video in the timeline.
Speaker 2:Let's play it.
Speaker 1:And this is quite a group to get together. And, you know, I think, you know, all of the companies here are building just making huge investments in in the country in order to build out data centers and infrastructure to power the next wave of innovation. So it's you know, we don't often get together as as the the the CEOs of the different companies, but it's it's good to see a bar.
Speaker 6:How much are you spending, would you say, over the next few years?
Speaker 1:Oh, gosh. I mean, I think it's probably gonna be something like
Speaker 2:601,000,000.
Speaker 1:$600,000,000,000
Speaker 3:Woah. In The US.
Speaker 2:Yeah. It's an order.
Speaker 3:No. It's significant.
Speaker 6:That's a lot. Thank you, Mark. It's great to have you. Thank you.
Speaker 1:Well, thanks for for hosting us.
Speaker 2:Was quite a
Speaker 1:group meeting.
Speaker 3:Does anybody in the chat know if who which which of them went first? Yeah. Because because that number Just stop being number does not align with with Meta's stated
Speaker 2:cashback. Yeah. It doesn't appear in the SEC filings yet, but it is, like, very forward looking.
Speaker 3:And No. It was 2028.
Speaker 2:2028, which is something that they might might not actually put out or might not be demanded by the by Wall Street, but it's hilarious. Anyway, whatever they do, they're gonna have to do it on graphite graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Get started for free.
Speaker 3:Yeah. So Meta guided CapEx of 70,000,000,000 in 2025 and a 100,000,000,000 in 2026. So to to get to 600,000,000,000 spending would need to jump to 200,000,000,000 in 2027 and March in 2028.
Speaker 2:Yeah. What's interesting is that so these numbers are, like, insanely big. And, obviously, it looks like a big acceleration relative to past CapEx numbers. But I'm so inured to big numbers now because of the fast takeoff crowd that was like, oh, yeah. Like, trillion dollar build out data center, like, next year for sure.
Speaker 2:Like, AI 2027. Like, it's gonna be 10,000,000,000,000.
Speaker 3:Gonna a 100 It's 500,000,000,000.
Speaker 2:And so, like, when I hear 600,000,000,000, I'm like, yeah. Yeah. That sounds like totally reasonable. Like, I I think they'll definitely hit that. And and they I don't know.
Speaker 2:They probably will. Like, it doesn't seem like there's many barriers in the way. Like, it's just continue to grow the core business, run more ads, dump the profits into CapEx, build some more data centers. Semi analysis, Doug O'Laughlin over at Fabricated Knowledge has a good deep dive today on the glut of lagging edge chips that I think we might have a chance to get to in a little bit, but it was a it was a fun dinner. Are there any other videos that we should play from the from the White House dinner?
Speaker 2:I like the idea of this is like this is kinda new podcast format. Just have a dinner with everyone. Have some cameras there.
Speaker 4:And just yap.
Speaker 2:Just yap. Yeah. That's good. What's up, Tyler?
Speaker 4:I don't have another video, but there is there was a photo that came out. I'll send it to the chat. But it was like the full dinner. And right at the very edge, I'm pretty sure it's Dylan Field.
Speaker 2:It is. Yeah. Yeah. Yeah. Yeah.
Speaker 2:So someone had the full breakdown here. It's in the deck. It's much deeper. Let me let me pull it up. Where is it?
Speaker 2:The full list of people who attended the dinner is, wow, there's a lot of stuff. Okay. So Ed Ludlow has it. The full list of attendees at president Trump's dinner with tech leaders, the president, the first lady, Susie Wiles, Sergey Brin, Jerilyn Gilbert So to, Sam Altman, Greg Brockman, Anna Brockman, Safra Katz at Oracle, Gil Galterosh, Justin Jason Chang, Meredith O'Rourke, Natalie Natalie Dompe, Tony Fabrizio, Dylan Field, John Herring, Jeric Jared Isaacman. Jared Isaacman, oh, I I guess he was
Speaker 3:missing one.
Speaker 2:Yeah. Elon didn't go, but he's Chamath? Oh, Chamath is in here. So, Sunny Madra, Sacha Nadella, Chamath Palihapitiya, Sundar Pichai, Mark Pincus, Vivek Ranadive, who owns the Golden State Warriors. And I believe Vivek Ranadive is the the the, like, the guy who worked with Chamath in the first SPACs, and Vivek Ranadive kind of, like, pioneered that format almost.
Speaker 3:Did you say Lisa Sue from AMD?
Speaker 2:Lisa Sue made it. David Sacks, Shyam Sankar from Palantir. We missed him yesterday. He was at this dinner in DC. Jamie Simenoff, Alex Wang, Sanjay Marotta, Tim Cook, David Limp, Mark Zuckerberg, and Bill Gates.
Speaker 2:What a crew. Jensen didn't make it. So I the fact that Jensen and Elon are not there, I feel like you shouldn't read too much into it. It's kinda just like Trump catching up with a bunch of people, but I don't know. There's also like this yeah.
Speaker 2:I don't know. They they have it, like, falling out, but it seems like they've kinda patched it up. I don't know. Always always hard to read too much into this stuff. But speaking of Elon Musk, he didn't need to be at the White House because he's setting up a $1,000,000,000,000 pay package.
Speaker 3:$9,975,000,000,000.
Speaker 2:Oh, oh, it's not a trillion?
Speaker 3:Just a little
Speaker 2:bit shy. Okay. So the update is Tesla's board has greenlit a fresh pay package for CEO Elon Musk. If he hits 400,000,000,000 in adjusted EBITDA, he deploys 1,000,000 robotaxis for commercial use, ships out 1,000,000 energy storage units, produces and delivers 20,000,000 vehicles, secures 1,000,000 of ongoing FSD subscriptions, aim for a $8,500,000,000,000 market cap.
Speaker 3:The golden retrievers are barking.
Speaker 2:Seven and a half to ten years in the CEO role. The starting share price is $334.09. The package includes 12% of company stock divided into 12 segments. And so, Signal says this is a masterclass in how to design incentives. This deeply ties Elon's upside on the world radically improving.
Speaker 2:If he actually hits those milestones, the value unleashed for society dwarfs his payout. Most CEO comp is rent seeking. This is moonshot seeking. I completely agree. Every pay package for executives should be this absurd on both sides for the company and the individual.
Speaker 2:And this is exactly my take. It's like bet
Speaker 3:on yourself. Done this. He's done this before.
Speaker 2:And Dan Primak, when when the when the pay package, the most recent pay package came into under, like, lee legal scrutiny, Dan Primack was like, I like this when it was announced. And I thought it was crazy. And I and everyone thought it was impossible that he would pull it off, and he did. So he deserves it. And so it was this crazy legal battle, but it was actually aligned with exactly what a CEO should be doing, creating shareholder value.
Speaker 2:This should be a model for CEO comp going forward in my opinion. There is another side of this, which is increasing a founder CEO stake by doing aggressive stock buybacks. But this is a way cooler because it incentivizes bold investments and huge CapEx on factories, moonshot technology gambles, and generally thinking in decades. So I'm super stoked about it. I think it's I I think it's good.
Speaker 2:I hope it holds.
Speaker 3:Think way to signal. I mean, they're they're very much signaling to the base We're going. Tesla Army that that there's a lot of potential upside. Totally. Chris Camilo said earlier, been tracking XAI's accelerating cash burn, flattening user growth monetization and fundraising struggle since the beginning of this year.
Speaker 3:And I don't see how they last another twelve months without a Tesla or Elon bailout. I mean, saying I don't see how they last another twelve months without a the founder bailing them out. It's like, that's kind of the founder's job. Just continuously bail out the company. But I thought this was relevant because I do think that part of this part of setting up this pay package could set up a scenario where x AI gets just merged into Tesla and it becomes a standalone.
Speaker 3:It it just all gets rolled in.
Speaker 2:Yep. Yeah. I mean, Tesla has I mean, Carpathi worked there. Like, it's it's a fantastic AI organization, and it makes sense that there would be a lot of overlap in in what they do. I I guess there's probably And
Speaker 3:I mean, if if X, the everything app was part of a public company again, how is that not how does that get valued at less than 8 and a half trillion? Right?
Speaker 2:That's a good point.
Speaker 3:And so with with Elon having that ace up his sleeve, the fact that we're all addicted to this app.
Speaker 2:Yeah. I mean I mean, I I guess it's good that there's other milestones in there that that you can't just like merge everything together because if
Speaker 3:you It merge is it is funny it to think about some of the different milestones. You know, it's like shipping out 1,000,000 energy storage units feels like wildly like Pretty this simple. Even need to be included if you're gonna deploy 1,000,000 robotaxis for commercial use.
Speaker 2:Yeah. That one seems a little bit I I don't know. Easy sandbag? Who knows?