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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Monday, 10/27/2025. We are live from the TVPN Ultra Realm. The temple of technology, the fortress of finance, capital of capital. We have breaking news.
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Speaker 1:So, over the weekend, there was some debate over Suno. Is anybody paying for AI music? What's who's paying for this thing is, was the the question of the day. And this was on the back of reporting from the information that says music app Suno nearly quadruples annual recurring revenue to a $150,000,000. They were doing 40.
Speaker 1:Now they're doing $1.50. And Michael Rosenfeld asks, can someone explain where this revenue comes from? Who is paying? And Harun says me. Suno Music is one of the most magical products I've ever used.
Speaker 1:Harun is the founder and CEO of Rocket Money, the app, which was acquired by Rocket Mortgage. Fantastic outcome. Rocket Money, if you're not familiar. Used to be Truebill. I think it was a billion dollar acquisition.
Speaker 1:Really cool. And, and Haroun is enjoying it. And if you scroll the replies in this viral post that got over a million views and 4,500 likes. Palmer Luckey says he's using it. Gabriel, the, the OpenAI, Sora he's not the Sora lead.
Speaker 1:He's Sora Research. That's right. He's, he says, I'm paying. It's an incredible product. Dwight, over at at captions, I guess now Mirage, is saying it's such a great product.
Speaker 1:Super fun if you have kids too. And there's a couple of people that, lay out specific ways that they use Suno. And so I wanted to kind of revisit this, noodle on this, like, understand, like, what's actually going on, what's driving the revenue, because there's a whole bunch of different buckets of value that you can be extracting if you're Suno, the company. So the the worst possible scenario is that a 100% of your revenue comes from someone who's just scraping your API, basically, and trying to distill your model. Like, if we went back to what happened with DeepSeek, DeepSeek was paying for GPT 4 tokens.
Speaker 1:Right. But GPT 4 obviously was generating money from all over the place and had people paying for knowledge retrieval and and and a a whole bunch of different use cases, coding tokens, all sorts of stuff. And so it wasn't exclusively that. But you could, in theory, like, the most circular problem, you know, the one that would be really thrown out the red flags would be, is it all coming from one customer? Some other lab or someone who's just trying to, like, you know, basically, like, distill everything that you've done.
Speaker 1:That's clearly not what's happening. You can see that so many people love it. And if you add up the number of reviews on I on the iOS and Android app store, it's over a million.
Speaker 3:Wow.
Speaker 1:So they have over a million reviews. And, I mean, I I don't I don't even know many people leave reviews. I don't even leave reviews. Yeah.
Speaker 2:Yeah. Yeah. Exactly.
Speaker 1:And so you're probably looking at, you know, even if they get, what, 10% of people who use the thing to leave a review, you know, you're looking at, you know, millions and millions and millions of people that are using this. Yep. Lots that are paying, and it just kinda adds up pretty quickly. I think they have an $8 a month plan and then, like Yeah. 20 or $5 a month plan.
Speaker 2:And the thing I've been noticing recently on social media is it seems like they've had some type of, I wouldn't call it specifically a Studio Ghibli moment, but people are realizing that they can go to their favorite artists Yes. Like a rapper, let's say Yes. And say, make this, like, make a make a make this future song Yep. Make the jazz version of this future song.
Speaker 1:I saw DMX, x Gone Give It To You, but in nineteen sixties jazz rendition, and that's that's sort of it's almost just style transfer. It's really just filtering. It it is. I mean, that's the beauty of the Studio Ghibli is that you don't have to come to it with something that's completely a blank canvas. Yeah.
Speaker 1:You take something that you like, a picture of your dog, a picture of your family, a funny meme, an an image from a movie, and you just say, hey, restyle this in the style of Ghibli, and you're good. Yep. They're certainly having that moment, and it's doing very well.
Speaker 2:And they
Speaker 1:do see those
Speaker 2:Good thing that is that I don't I don't think the jazz community is up in arms.
Speaker 1:I think they might be.
Speaker 2:Maybe? Maybe.
Speaker 1:Might
Speaker 2:be. Maybe, but they they don't have a strong case to be like, you are infringing on x y z I p. Right? Like, there's no company called
Speaker 1:think that they might. I think there'll definitely be a lawsuit.
Speaker 2:Well well, so of of course, like, individual artists Yeah. Might try to figure out, okay, are they training on my music? Yeah. And then in that case, did they buy the music?
Speaker 1:Yeah.
Speaker 2:Because we now have precedent that shows if you purchase the songs Yep. Can you train on them? Yep. The question is like, if you purchase Spotify, if if, you know, Suno is like getting like
Speaker 1:Yeah. Have $20 a month plan.
Speaker 2:Yeah. We we streamed it to get inspired.
Speaker 1:Yeah.
Speaker 2:That is funny. But but in general, I think this this kind of use case is probably, like, good for the underlying artist. Yep. It's just like marketing.
Speaker 4:Mhmm.
Speaker 2:It's fan engagement. Mhmm. And then they're just doing kind of like broad style transfer from a category of music onto this new artist.
Speaker 1:Yeah. I wanted to go a layer layer deeper on this, but first, let me tell you about Privy Wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. So, Chris Dixon, who actually was on the show last week, he ten years ago, he posted a blog post called come for the tool, stay for the network. Classic.
Speaker 1:And the thesis was that, if you use the example of Instagram, he also uses Delicious and a couple other examples. But, basically, you're trying to start a social network. Why would someone come? Well, they came to Instagram because if you took a photo with your iPhone back then, the cameras were terrible, and adding a filter to it made it look cool and grungy and old school instead of just actually terrible. Yep.
Speaker 1:And so photo filtering apps were very popular. There was one called Hipstomatic, but it cost money. And so Instagram was able to give you a free tool. You came for the tool. Hey.
Speaker 1:I just wanna filter my photos. Maybe upload them. I'll just have a nice little online photo album, essentially. Yep. And then over time, you can save for the network, and then eventually the algo feed, and eventually the multimillion dollar professional content producing, you know, cohorts that are producing, like, the greatest content at, like, Netflix level that will get fed to you perfectly.
Speaker 1:And so we're in this era where there's a lot of tools. Right now, there's lot of AI tools. Suno feels like it could be an AI tool, and I was debating this with you earlier this morning. Of the $150,000,000 that are you know, that that's their ARR, how much of that is people showing up for instead of Spotify, I'm just going to listen to Suno, and I don't really care about the prompt. I'm not really viewing it as, like, a challenge or game or anything.
Speaker 1:How many of them are just like, I need to listen to music and Suno sounds good enough for me? So I'm doing that. Versus the next bucket is I like the activity of coming up with creative ideas and figuring out, oh, I'm you know, normally, I would just be sitting here noodling on my on my guitar or my bongo drums or something like that. I'm I and I enjoy the process of making.
Speaker 2:We have some
Speaker 1:But I'm not I'm not a I'm not a full time creator. I'm not trying to monetize this. I'm just having fun with the expression of, like, actually Making music. Music. Right?
Speaker 1:That's the second
Speaker 2:That's gonna piss some some some hardcore traditional musicians off who are gonna say, you're not making music. But Oh, yeah.
Speaker 1:Yeah. Yeah. Of course. Course. Of course.
Speaker 1:Of Yeah. Yeah. Yeah. Yeah. And then the third bucket is, like like, your job is to create content.
Speaker 1:You need music for your content. Maybe you understand that if you take a popular song, you take the latest Taylor Swift and you make it nineteen fifties theme Yeah. That will go viral, and you will get a lot of impressions on Instagram, on TikTok, on YouTube, and you will just make money. Or you're producing a documentary, and you know what? You need some sort of background music.
Speaker 2:Yeah. Or start up making a launch video.
Speaker 1:Yeah. Right? Exactly.
Speaker 2:Exactly. Historically, they would be like, okay. Stock music. Stock music. Yep.
Speaker 2:Are we gonna use, like, copyrighted music and just wing it? Yep. And if it gets taken down at some point Yep. You know, whatever. Yep.
Speaker 2:But there's tons of different
Speaker 1:So there's those three buckets. And my question is, like, in the early Instagram days, no one was going no one was going to Instagram being like, yes. I'm a professional photographer. I did a wedding shoot, and I need to filter the photos. I'm gonna use Instagram.
Speaker 2:Yeah.
Speaker 1:They were like they were like, no. I'm good with Photoshop. Photoshop. I like Photoshop's fine. But and and no one was going there being like, yeah.
Speaker 1:Like, I just wanna look at something great. I'm not into this whole, like, watching Friends on Netflix thing. I'd rather just scroll Instagram. No one was into that because there was nothing there, and it was just like a couple filtered photos from your friends. You'd you'd see, like, one or two updates a day in the early stage, in the first few months.
Speaker 1:And so nearly all of the early Instagram usage was this middle case of coming for the tool. You wanna just filter a photo on your phone. Instagram lets you do that. And I'm wondering, for Suno, how what's the what's the percentage now? Are most of the people there because they want to be full time content creators?
Speaker 1:They really need it as a professional tool. How many of them are viewing it just as like a video game, essentially? Yeah. And then and then what will it be over time? Will it be something where you you prompted it enough that when you get in your car or you get to the gym, you just say you open Suno and you just say play because you've prompted it enough.
Speaker 1:And I feel like it's very much in that second bucket of video game like. It's fun. It's entertaining. And that's certainly where Sora sits right now.
Speaker 5:Yeah. And
Speaker 1:the question is, like, if you come for the tool, will you be staying for the tool? Will you just will you just live in tool land forever, or will you eventually will this become a network? And do I mean, yeah.
Speaker 2:So what do you So my my lens on it right now is that it is such a mad it is still even though we've had this technology for a couple years now, broadly available, the it's one, it's gotten a lot better.
Speaker 1:Mhmm.
Speaker 2:And it's just so undeniably magical Yeah.
Speaker 1:To be
Speaker 2:able to generate a song. Yep. And I remember growing up, being into music, it was hilarious. And and my and my dad is a musician, and my dad would be like, I'm gonna make a song about the last week of school. Yep.
Speaker 2:And he'd play a song and he'd sing it and it would be entertaining for the whole family. And so to take something that's that entertaining and then condense it down into a prompt is like so magical Yep. And it reduces the the just energy needed to create that magical experience down to ten seconds Yep. That there is a massive amount of people that will just pay for that magic experience today. They'll come in, they'll maybe do one free prompt.
Speaker 2:I don't know how their pricing works. But then they'll actually willing to pay because they're gonna make one for their grandma or make one for their kid or make one for their job or whatever.
Speaker 1:And Yeah.
Speaker 2:At least there's a high volume of people that are happy to pay to have that magical experience today. And so I would my view is, like, there's a lot of people that are, I'm sure, generating these and not even sharing them that broadly. Right? They're just sharing them with friends, family, etcetera.
Speaker 1:We're just listening to them themselves.
Speaker 2:They're just Yeah. So that's the thing. I don't what I really don't what I'm what I again, we we should have, the founder on. But I don't believe that these songs are for listening to yet. I feel like they're for entertainment but not passive listening.
Speaker 2:I might be wrong. But that's my current that's my current sense.
Speaker 1:Yeah. I
Speaker 2:yeah. Don't Like looking on their website right now, it's make a country song about Jess being late. Make a jazz song about watering my plants.
Speaker 1:I think yeah. I I mean, I I think you're you're seeing something similar
Speaker 2:to, like, an electronic music. Putting your job.
Speaker 1:Like, when I was a kid, I was able to actually steal, but, or torrent, a product called Free Loops, which was a a digital audio workstation. So there's Ableton, and there were a few others of these, like, more advanced, what's pro tools. But Frooteloops was very intuitive. They like, a really, really simple interface, and you didn't need a lot of extra gear to actually make music with it. Kind of like GarageBand esque.
Speaker 1:Yep. And it basically, like, lowered the bar. Yeah. FL Studio. Joe knows.
Speaker 1:FL Studio. It lowered the bar because instead you used to need to go and buy every instrument. And then all of a sudden, it was like you could pull a piano off of a menu bar and just say, I want a piano right now.
Speaker 2:Yep.
Speaker 1:And what does that do? Well, that lowers the that lowers the bar the barrier to entry. And so you get a lot more, a lot more product, a lot more creativity, and obviously a big debate over whether, digitally digital instruments can hold a candle to traditional analog instruments. We kind of went through all of that and realized that, you know, the people who are gonna go see Marshmallow live do not care. Or the people that go and see, you know, anyone at Coachella or something.
Speaker 1:They don't they they don't some of them care. Some of the bands make their whole shtick. Well, we use real instruments to make this music, or we still use real instruments Yeah. Or we or we we have a throwback song, and we went back and pulled real instruments off for this. There's a couple DJs that will be like, oh, for this next one, we have someone coming out and playing like a real guitar, or we have someone on the on the drums live Yeah.
Speaker 1:With this. But but overall, you're just dropping the cost to create, and so more people are gonna do it. It creates a steeper power loss so that you have more more competitive than ever because the people that are truly talented are gonna be able to rise up. There's no one if you're truly talented, there's never gonna be the the person who's really, really talented but doesn't have the money to enter the market, so you're not keeping them out. Yeah.
Speaker 1:And so all of a sudden, those people are gonna are gonna run up the score with with cool creative things. Yeah. The question is, like, is, yeah, does this does this become a more of a video game market where people are playing Suno like a game for themselves and maybe for a few friends like a Fortnite, like a like a Minecraft. Yeah. Like, you build in Minecraft.
Speaker 1:You are creative in Minecraft, but you don't often sell what you built. Like, you're you don't often directly monetize.
Speaker 2:Yeah. And so my my question becomes, you know, if I I've I've seen these, reels go viral on Instagram going back to this, like, future as jazz music Yep. Or Coding Crazy by Future as in jazz. Yes. And the question is, yes, that is like a hit, like social media asset Yeah.
Speaker 2:That is getting millions and millions of of views and listens and things like that. The question is, are people finding that song or making that song themselves and listening to it on a repeated basis?
Speaker 1:Yes.
Speaker 2:And my guess is, as somebody who grew up listening to Future
Speaker 1:Yes.
Speaker 2:I love Future. I have no desire. I I was entertained by that, but I have no desire to like go find And songs in the same put it and listen to it on the drive home. Yes. Right?
Speaker 2:And the examples they give on the website of like make a song about Jess being late for work, that feels like more like a meme than something that's meant to be come back and listened to. Yep. Now, I can imagine the use case as as a parent of, like, generating a song, like, the cleanup song and putting your kids' names in it.
Speaker 3:That's cute.
Speaker 2:And you make and and it's like, hey, every day after dinner, we're gonna play this. Yep. And you're gonna put, you know, whatever.
Speaker 1:That's actually hilarious. I like that. That's very cool.
Speaker 2:It's not something that I could come come back to Yeah. Multiple times.
Speaker 1:Sure.
Speaker 2:But a lot of the use case, make a country song about Jess being late. Like, I'm sorry. That's like a funny moment, and maybe you send it again when when Jess is late. Yeah. But it's not like, nobody's listening to that.
Speaker 1:Yeah. Tyler, what do you think about this AI music nonsense, what these kids are up to today?
Speaker 5:Yeah. I mean, I I think current songs are, like, quite gimmicky. Yeah. It's so it's like you have a country song. It's about AI data centers in space or something.
Speaker 5:I saw that too.
Speaker 1:Oh, I saw that one.
Speaker 5:Yeah. And it's like it's fun, but it's very much like a gimmick. It's not like, I'm not gonna actually listen to
Speaker 1:Yeah. Yeah. It it it always almost collapses down to just like, you could just tell me the prompt, and I'd be like, oh, yeah. That would be funny if there was a country song about AI data centers in space. I don't actually need to listen to the instantiation.
Speaker 5:Yeah. Yeah. Play The the quality bar for music is actually, like, quite high to get people to actually start listening. Totally.
Speaker 2:Yeah. Could you could you actually play the bongo drums while you talk?
Speaker 5:Well, I I need to unmute. I can only play with one hand. So because of this.
Speaker 2:But Oh, you you have to press a button to be unmuted.
Speaker 1:He's truly in the
Speaker 2:There we go.
Speaker 1:Okay. We have a producer.
Speaker 5:Okay. So I think this is like two or
Speaker 1:Yeah. But Okay.
Speaker 5:If if you look at like short form, like video, they're only like ten seconds long. Right? So it's, like, very low.
Speaker 1:I can't believe you guys got him like a dead man switch that he has to hold down. I thought he had I thought he could just flip the switch and then the channel's open. That's ridiculous. Yeah. He has a dead
Speaker 2:man for Tyler.
Speaker 1:Hey, Tyler. Say something while holding up both hands. Oh, wait. You can't. Oh, no.
Speaker 1:He's muted. That's very funny. What a quirk of our of our production setup. I wanna continue, but let me tell you about Cognition. They're the makers of Devon.
Speaker 1:Yeah. Software engineer. Crush your backlog with your personal AI engineering team. So the the the reason that I think it's important to understand is Suno a a a network? Are you coming for the tool and staying for the network?
Speaker 1:Will it be a place that is it a competitor to Spotify long term? Is it a competitor to Fruity Loops long term or Ableton long term? Or is it a competitor to Fortnite long term? Is, is because of how resilient and what the market structure will be long term based on the actual usage. And so if it's like a video game and if people come there to do some sort of, like, self expression, they're trying to get a high score.
Speaker 1:They're trying to, like they're trying to create something, and it's more of, like, this creative tool that they'll use elsewhere that feels slightly less less defensible than, okay. We're building at a proper network of of, you know, connections between people that you won't wanna leave. And so video games can be hugely profitable. They can be great. But the power law in video games is just a lot less deep than the power law in social networks.
Speaker 1:Yeah. There there is GTA. There is Red Dead Redemption and, you know, Madden and stuff, they're Call of Duty. Like, there are some huge franchises, but there but there are way more, like, base hits in video games than in social network. In social networking, there you have, like, you know, the meta properties, which is in the trillions, Then you have, you know, YouTube, LinkedIn, Axe, TikTok, you know, all the smaller kind of mid caps.
Speaker 1:But then you really don't have anything down in the lower end. Whereas with a vid with a lot of video games, like, you can just have, like, base hits. And so
Speaker 2:Yeah. So one one thing I've been thinking about is, where does Suno need to go to to maintain their current, I would say, dominance in the sort of AI music category? Yeah. And because we just figured out that OpenAI is working on an AI music product.
Speaker 3:Yes.
Speaker 2:And I would expect that OpenAI eats the category of music as memes, which I'm talking about, which is like
Speaker 1:You think that?
Speaker 2:We had we had a funny thing happen at work Yes. And we're gonna generate a song, and we're gonna share it in the team chat. I think that I think that that use case for people that already subscribed to to various language models that I'm sure will all over time add the ability to generate audio.
Speaker 1:Yep.
Speaker 2:And I think that Suno will still be fine, but they're gonna have to really focus on other more
Speaker 3:Yeah.
Speaker 2:Integrated opportunities, stuff in the enterprise, stuff in kind of prosumer, working with creators, etcetera. Yeah. Actual musicians too is the other one where I'm sure when when we get the founder on, I was I was just texting with, Michael from Lightspeed.
Speaker 1:Yeah.
Speaker 2:I'm sure there's a bunch of musicians, like real musicians that also use it. They're, I'm sure, a much smaller percentage of the overall user base, but they just use it to get ideas.
Speaker 1:Yeah. Yeah. So if if OpenAI builds like a great music generation API and it's, you know, similar to their coding API for GPT five, like, it's just it's just, you know, frontier level, maybe that gets baked into Ableton and and GarageBand and and other No.
Speaker 2:I was just thinking for for the enterprise side of what I'm trying to understand is what percentage of songs are just jokes?
Speaker 1:Yep.
Speaker 2:And I think that ChatGPT will ultimately do that pretty well.
Speaker 1:Yes. So, yeah, I'm trying to I'm trying to think about the
Speaker 2:I'm sorry.
Speaker 1:Don't Images in ChatGPT versus Midjourney. Like, Midjourney has been able to like, Images in ChatGPT did not kill Midjourney by any means. Like, the Midjourney community is still going. They have something special there. They've created, like, their own special vibe and it and then sold it to Meta to create vibes.
Speaker 1:Like, there's something there where it's not just frontier. It's like the specific UI, the specific community, what they want, what like, the the the choices that David Hole's made. It's possible that Suna winds up in a similar situation. But when most people are in in a flow of, you know, they're doing some research. So what you're saying is mid journey
Speaker 2:basically created a genre, whereas it seems like, you know, product market fit is not creating entirely new styles, but it's like, make this make this country art country music artist do a house song. It's style transfer
Speaker 1:Well, no. I think that might I think that might come over to ChatGPT as well. I'm I'm just thinking about the professional versus prosumer versus casual. Like, when I think of the the the casual AI image generator person, they're not like, I gotta go to mid journey and get my s refs prop like, in shape. What they do is they just say, like, oh, I'm already in ChatGPT.
Speaker 1:Like, let me just see if ChatGPT can do it. And, like, even if even if mid journey was a little bit better, the casual user is just like, yeah. ChatGPT is good enough or Gemini is good enough for them. Like, whatever their daily driver AI app is can just bolt that on. And so if you're if you're daily driving in a ChatGPT or a Gemini and you have an idea for an AI song Yeah.
Speaker 1:You're just gonna do it there for the casuals. But then for the prosumers, for the people that are really into the actual community, like, they're in mid journey in the Discord getting ideas, sharing SRFs, really pushing it to its limits. And I think you'll probably see the similar thing in Suno where you have where you have, like, this community that really loves it. And, like, the a mid journey creator will laugh at what comes out of images in ChatGPT. And they will say, it looks bland.
Speaker 1:It looks it looks sloppy. Like, ours looks, better. And I imagine that that that that's the way it'll play out too. But it it's clearly just like an important feature to have because just like when you're if you're developing a grocery list in Chateappity and you wanna say, like, okay. Generate an image of the grocery list so I can just print it nicely and give it a little design.
Speaker 1:Like, it'll it should just be able to do that. Yep. And you should also be able to say, generate a song of of this. Like, sing it to me, and it should just be able to do that. Like, that's what a multimodal model should do.
Speaker 1:Yeah. So, anyway, it it it's just interesting that, like, the the we were we were coming out of the browser war yesterday or last week, and there really is going to be a war in every single vertical here.
Speaker 2:Every company is going to do everything.
Speaker 1:Everyone's going well, yeah, OpenAI is certainly gonna open up a front a a new front of in in every New war? New war. Don't mind if I do. Yeah. Browser war.
Speaker 1:There's gonna be the commerce war. There's gonna be the, certainly the coding agent war. Yeah. And then now the
Speaker 2:music OpenAI never never met a war. It didn't it wasn't interested in fighting.
Speaker 1:Well, let me tell you about figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started for free.
Speaker 2:Go.
Speaker 1:Well, people are really having fun in here. AI generated music from Suno v five is now nearly indistinguishable from human made songs. In blind tests, listeners guess wrong as often as they guessed right. I wonder if I wonder if images are at a similar level. Is music ahead of images?
Speaker 1:What do think
Speaker 5:of that? So so I saw someone Yeah. I forget exactly who it was, but they were doing a quote to it on this. And what the paper actually says is is people who have never heard AI music before
Speaker 1:Okay.
Speaker 5:Couldn't tell.
Speaker 1:Okay.
Speaker 5:But people who who can who have heard a lot of
Speaker 1:it I don't know.
Speaker 5:Can tell very easily. You you see the same thing in text Yeah. Where people who who don't read a lot of AI generated text have a very hard time distinguishing it. Yep. But like Once you or I, we we write a lot
Speaker 1:of Clock it all the time.
Speaker 5:Yeah. It it's very easy to tell. Yeah. So I think it's a similar thing there.
Speaker 2:The fur the first big AI music moment for me was people that know me know I love Gunna. Yes. And two years ago, somebody made an AI album for Gunna called Slime Pharaoh that Mhmm. Was my was the first moment where I was like, okay. If I was maybe distracted
Speaker 1:Yeah.
Speaker 2:And somebody put this on and I was doing email or something else, I was busy and they were like, hey, Gunna just released a new album. I'm playing, you know, like Yeah. Listen to this. I wouldn't have immediately clocked it as AI. But that is like a distinct type of music that, you know, he's not always like, you know, enunciating words.
Speaker 2:Sure. You know, super super It's good. Precisely. Right?
Speaker 1:Yeah. Yeah. If you're if you if the underlying inspiration is is a little bit sloppy, AI slop on top is just fine.
Speaker 2:And he just has
Speaker 1:Yeah. I I I I'm I'm actually kind of excited. I know we were we were a little bit bearish on that YC company that does AI generated launch videos, but I do like the idea of an AI agent that that moves across all the different domains. So you come up with a concept. It can build out a script, and then it can build out a song, and then it can build out imagery for all of those and mash those all up and just, like, kind of puppeteer and let the let the different systems cook for, like, two hours to get you a result.
Speaker 1:At the same time, it's really frustrating to let something cook for two hours, and it comes back, and it's, like, sort of a mess. I I kind of did the manual version of that with Tyler, my personal agent. I had Tyler generate, TBPN, live streaming from every different historical innovation moment. So the steam engine, the light bulb, the discovery of DNA, and, and he did a lot of hard work on it. And it probably took, I don't know, an hour of rendering across all of them, something like that.
Speaker 1:What do you think?
Speaker 5:No. It was definitely faster than that. Because you can I I actually used file
Speaker 1:and Oh? You can
Speaker 5:run them in parallel.
Speaker 1:Okay. So you ran everything in parallel?
Speaker 5:Yeah. And It was like 16 videos. Yeah. Still took like ten minutes maybe.
Speaker 2:I have a I have a song.
Speaker 1:Okay.
Speaker 2:Gonna f you mean 1982 soul funk.
Speaker 1:1982. AI
Speaker 2:cover. Okay. Let's play this. Let's play this.
Speaker 1:I I I I think we won't get this demonetized because of this.
Speaker 2:That's a beauty.
Speaker 3:Oh, this is
Speaker 1:okay. This is gonna. Pretty good.
Speaker 2:Production team. Everyone's jamming. The supporting vocals in the back.
Speaker 1:I even heard the original song here. Like, I I can't immediately clock the original song. So
Speaker 2:Alright. We can pause it. But this
Speaker 1:is pretty good.
Speaker 2:That's good.
Speaker 1:I like I like that. And I mean, if we're gonna be able to play that level of audio on the stream without getting demonetized, that's actually like a huge unlock. I feel like there's a ton of fun that we could have with it.
Speaker 2:Yeah. It's interesting because it doesn't immediately clock as slop No. In the same way and and and of course, like a a a producer Yeah. Probably can clock it as but to somebody that doesn't work in music Mhmm. Isn't necessarily like, I don't consider myself the biggest music fan.
Speaker 1:Yeah.
Speaker 2:It's like, at the very least, like, better than elevator music.
Speaker 1:Yeah. Yeah. I mean, it is it is just a simpler it feels simpler than getting video right. Like, video, if if there's six fingers, you're gonna notice. But in music, like, if you're sticking to general chord progressions and you're sticking to general key and, you know, not, like, you know, slopping up the the the basic rules of how to generate music, you should be able to get something that that that sounds like at least reasonable.
Speaker 1:But I don't know. What do you think about this AI music stuff? Do you think you'll be listening to a lot of it in the future?
Speaker 5:I think there's something interesting on like the consumption, like streaming side almost
Speaker 1:Yeah.
Speaker 5:Where if you think of like, there's like the Spotify DJ. And it will kind of update a little bit if you like, depending on how long you'd listen to the song.
Speaker 1:DJ x. Yeah. Sometimes I'll skip like five in a row and it'll be like, I get it. I get it.
Speaker 5:So so it'll update? Yeah. Yeah. And basically, like, you can imagine it's like trying to find the next group of songs or whatever. In in latent space, there's like some area where it thinks that Yep.
Speaker 5:Like you might like that song. But then it turns out maybe there's actually no song in that in that point in, like, plain space Oh, it
Speaker 1:then generates it.
Speaker 5:Then you can just generate it. Interesting. If you have, like, a generative playlist, I think Yeah. That's kind of interesting.
Speaker 1:I feel like Spotify has gotta do something here. That DJ X is, like, two years old at this point. That was, like, an early just recommendation algorithms. That's not like the AI boom. That's not generative AI.
Speaker 1:But at the same time, Spotify, if they launch some generative AI thing, like, lot of the artists will probably be pretty upset. Right?
Speaker 2:Well, yeah. I mean, it's like kicking the industry while it's down. It's like, hey, we know that streaming already doesn't generate, like, enough revenue, at least in their view. Right? A lot of the artists will post, like I've I've seen artists, like, share their, like, payouts.
Speaker 1:Yep.
Speaker 2:And it's and and it basically shows like you need to be constantly touring Yep. If you want to make money as an artist. Yep. And so if you introduce AI Yeah. Versions of their music or or music that is just decent music Yeah.
Speaker 2:It's just gonna hammer
Speaker 1:Okay.
Speaker 2:So hammer their earnings even more.
Speaker 1:What should Spotify do with regard to AI music? I want your answer. Jordy, pitch me on a five or ten year strategy. You're the CEO of Spotify for the next five or ten years. What do you do in AI music?
Speaker 1:But while you're thinking about it, let me tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program.
Speaker 2:Well said, John. What what do say? My immediate thought, and I haven't, thought this through.
Speaker 1:I gave you an entire ad read to think through. You should be ready to step into the boardroom. Be a boardroom general.
Speaker 2:So the the obvious the thing that feels most obvious, and I'm sure there's some potential negative, externalities to something like this, but if you just make it so that if if I generate a song that's like an AI Gunna song that we just listened to, if every person like, if if you can figure out a revenue split that basically takes care of the people that created that the track that inspired it
Speaker 1:Yep.
Speaker 2:In that case, it's extremely obvious because it's an an existing Gunna song that's converted Yep. Into into a new song. Yep. If you're just paying out effectively the same amount to the producer and the writers and all that stuff, that feels like an easy solution. Yep.
Speaker 2:Now the problem is if you're just generating entirely net new music, which is just like the prompt would be like, make me a funk song Yep. Then you're still eating into the potential earnings of, like, real artists on the platform. Yep. And I don't know how you solve that. I mean, it it's potentially a bull case for Spotify because they take can take out why did Spotify, like, lean so heavily into podcasts?
Speaker 2:One, because people wanted to listen to podcasts, and two, because they didn't have the same dynamic where they're paying out at such a large amount of their revenue to artists on the platform. So they could go out and pay to acquire, you know, Joe Rogan or whatever. It was originally for, like, a year or two years, because you were acquiring users that would presumably listen to podcasts Yep. And you're not paying out the record label and the artists and and all the underlying,
Speaker 1:That is a good point. Yeah. But, yeah, the, yeah, the monetization has to be wildly different between
Speaker 2:Yeah. So if I'm an artist if if I'm if if if I'm gonna and somebody's generating AI gonna, I'm cool with that if
Speaker 1:You're getting paid.
Speaker 2:If I'm getting paid like that's a normal song. Yes. But it starts to get really complicated when it's like generate a gonna song that that sounds like this. Yep. And there's no underlying song, so how do the how do the royalties work on just, like, a generic kind of song?
Speaker 2:Yes. I don't know.
Speaker 1:I have a rebuttal, but first, let me tell you about graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. So, I know exactly how you do it. Tyler, you know how you do it. You take the song, and you do the algorithm backwards, and you basically reverse engineer the prompt from the final m p three.
Speaker 1:And so if someone went to one of these AI music generators and said, I want Taylor Swift singing a Gunna song when and then it generates that music. You can use the same this basically the same system to reverse engineer and and just say, based on what this m p three sounds like, what do you think the prompt was? And if you can if you can figure out the correlation between the prompt and the actual output, you can figure out how to do attribution. And I think in general, Spotify, I would come out and say, hey. Look.
Speaker 1:We're not going to get into the into the game of generating audio directly, but we are happy to let our creators use any tool that they want to generate music and come on our platform, whether that's a microphone and a acoustic guitar or Yeah. Ableton with a bunch of digital drums or an AI music generator like Suno. You're welcome on Spotify, but we're gonna take 50%, basically, because we take our cut our our take rate, whatever Yeah. Whatever the cut the take rate is. YouTube's around 45, 55%.
Speaker 1:And then how are we going to how are we going to actually parcel out the royalty? Well, we're going to look at what does our AI system tell us about what the prompt was. And if it's if it's gonna singing Taylor Swift or Taylor Swift singing gonna, well, then they're both getting 5050% of that new generation.
Speaker 2:Bunch bunch of ideas from the chat. Taylor says the future is exclusive listening parties, zero streaming presence. So artists just charge, not even for a concert, just show up in a room, $10,000 a pop. You can be one of a small number of people to to ever hear the song, and then they just retire it. I like that.
Speaker 2:That's good. I think I think, there's something there. Ryan says I will cancel Spotify if they start pushing AI music. So
Speaker 1:Pushing? What what what does pushing mean? That's the question.
Speaker 2:Like It's exactly what what Tyler just outlined. Right? They're you're they're DJing for you and they're like, hey, we made this song for you. We thought we thought you'd like it. I think this is kind of potentially a stated preference versus revealed preference.
Speaker 2:I think that, actual actual cuss like, broad user feedback would be like, that's entertaining. That's kind of fun. That's cool. Yeah. And I say that because people like doing the sooner
Speaker 1:If I'm scrolling my X feed and I see Harry Potter Balenciaga, which is AI generated, is x pushing that on me? Or is that just a good m p four that day? People liked it, and so it rose to the top of the feed. I would say the latter. I would say that it's not like there was any
Speaker 2:But Spotify is historically less algorithm. Right? It's like we have this
Speaker 1:But they have an
Speaker 2:algorithm. Like basically billboard and the homepage.
Speaker 1:Yeah. Yeah.
Speaker 2:Just gonna put stuff there.
Speaker 1:But they have an algorithm. And the question is is if there's I I think there's a big difference between them actually choosing to generate music and them and them allowing anyone to come with generated music.
Speaker 2:But Well, they're already doing that.
Speaker 1:Yeah. Yeah. Yeah. They're they're already
Speaker 2:partners that are AV says Spotify should launch a standalone Audiosora or Vibes. That could be interesting. I I I feel like they're so any any business that is reliant on Hollywood or the music industry is just so sensitive, like, actually has this at scale business Yeah. Doing that
Speaker 1:Yeah.
Speaker 2:Is so sensitive.
Speaker 1:And they're yeah. Yeah. Spotify is in a way, way different place than, OpenAI, which doesn't really have any Hollywood connections, and even YouTube, which YouTube's like the vast majority of their ad dollars and creators, like, do not come from any sort of Hollywood organization, any sort of large organization. Spotify does really have, like, a few key massive partnerships Yep. That they need to keep happy.
Speaker 2:John Philippines has Spotify buys sooner. I could I could actually see that.
Speaker 1:Well, if you need to generate some media, head over to fall, the world's best generative image, video, and and audio models all in one place, develop and fine tune models with serverless GPUs and on demand clusters. Speaking of Taylor Swift, Travis Kelce is here to save six flags. And The Wall Street Journal has a fantastic look at that header image. Like, what is going on with that collage? Is that AI?
Speaker 1:I don't know. It looks some like some sort of illustration, but it's a lot of fun. Have you been tracking what Travis Kelsey is doing with with Six Flags? Just this year, Six Flags, the stock has dropped from $50 a share essentially to almost $20 a share. So massive sell off in the company.
Speaker 1:It is now popping on news. Travis Kelce
Speaker 2:is Travis Kelce effect, it's up 22% over the last five days.
Speaker 1:Let's go. The stars of the Super Bowl always celebrate in the same way. They bask in confetti, hoist the Lombardi trophy, and then proclaim where they plan to celebrate their epic victory. I'm going to Disney World. If Travis Kelce wins a fourth Super Bowl this NFL season, there are hundreds of millions of reasons why he might pick a different amusement park.
Speaker 1:The Kansas City chief chief's tight end just joined an activist investor campaign that's targeting Six Flags. Kelce, New York, New York based Jana Partners, and other investors have put around $200,000,000 to buy roughly 9% of the theme park operator. That means Kelsey is now part owner trying to sell America on stomach churning drops, head spinning turns, and Dippin' Dots just what he loved as a kid and still does. On its surface, a 36 year old football player teaming up with rabble rousing investors might seem as unlikely as getting engaged to the world's most famous pop star after talking about her on a podcast. But as the two sides got to know one another, they realized the partnership was Kismet and a ripe opportunity to revitalize an American icon.
Speaker 1:Kelsey, in recent years, has developed a wide ranging investment portfolio mostly in business. He's passionate about beer, games, and clothing, and he's often done it alongside institutional investors. Kelsey's business team had Jana on its list of potential partners. What would your I mean turnaround plan
Speaker 2:This is the most classic this is the classic investment strategy, just buy buy buy the buy the stocks of the companies that you spend money with. Right? What you love. Just doing that.
Speaker 1:Make your Beer Find a job you love, and you'll never work a day in your life. How would you turn around Six Flags? How would you increase the revenues, increase the profit, increase the attendance? How would you make Six Flags great? And before you answer, let me tell you about Julius dot ai.
Speaker 1:Julius, what analysis do you wanna run? Chat with your data and get expert level insights in seconds.
Speaker 2:What's first thing you're doing? Get on Julie.
Speaker 1:You actually probably that would be a good first step. I know it's a sponsor, but you actually should
Speaker 2:start. Take all of those six It's notable looking at NFL athletes, looking at their investment strategies. Yes. Kelsey, obviously, going the activism route. Saquon going the Fifth Avenue route.
Speaker 1:Yes. He
Speaker 2:wants to buy Fifth Avenue. Yes. He's he's He likes co investing with the founders funds of the world, with the Thrives of the world. Yes. So it's interesting to see these two strategies play out in the market.
Speaker 2:I don't actually know that I've ever been to Six Flags, which is So I don't feel and I and I'm not a fan of of theme parks in general. So I I don't feel like super qualified to to, what what are your ideas though?
Speaker 1:I I feel like, there is there is potential for a comeback. I I I am I was convinced by Brian Chesky when he came on and said, you know how you never
Speaker 2:Long the real world.
Speaker 1:Yeah. Long the real world. You know how you never see your phone in dreams? That hit that hit hard. I know it sounds like something you see on a Pinterest live, laugh, love board, but it it hit with me.
Speaker 1:I am serious. I I've I've been thinking about this when I was looking at the sphere in Las Vegas. Yeah. I thought the sphere in Las Vegas was awesome on day one. I thought it looked really cool.
Speaker 1:And then I I sent, I I got tickets for my wife and her friends to go see the Backstreet Boys there. They had a great time, and I was further confirmed. I still haven't even been to it, but I'm still just, like, extremely bullish on the sphere. And so I do feel like what you probably need is more differentiation across different Six Flags theme parks. Yeah.
Speaker 1:What makes the sphere so unique is that it's the only sphere. They couldn't even build one in London. They tried, and the Londoner said, no. Thanks. Yeah.
Speaker 1:And so So I would be I would be focused on if you look at the roller coaster database, RCDB, this is a real thing like IMDB, you can pull up which which theme park has the tallest ride, which one has the fastest ride. And if you're a real crazy theme park fan, you can go around and I wanna ride the tallest one here, the fastest one here, the biggest wooden roller coaster, and the fall the the fastest steel roller coaster. There's all these different permutations, and you can go collect all the badges, but it's not meaningful. Yep. Like, they it's like five feet taller
Speaker 6:over there.
Speaker 2:I ideas have for you.
Speaker 1:Please.
Speaker 2:So one, we talked about this a little bit last week, which is just raising the stakes. Right? I think, even as a kid, I understood that statistically, even though the roller coaster was going really fast and it was really high and then it was gonna go really low and then it was gonna go upside down, statistically, I knew my the odds were in my favor. Right? Yes.
Speaker 2:The odds that I was gonna make it to the end in one piece, maybe a little sick to my stomach, whatever. But I knew I was gonna get to the end. Just just I had a good feeling, you know, statistically. Yes. So raise the stakes.
Speaker 2:Right? If if it was like one out of a thousand rides just comes to like a devastating halt. Right?
Speaker 1:Okay.
Speaker 2:Like, upside down. Oh. And so you just don't know. Am I am I am I in
Speaker 1:that batch?
Speaker 2:Yeah. So that that would be exhilarating. Right? And we saw there was
Speaker 1:There could be a mandatory chili eating contest.
Speaker 2:No. No. No. That's
Speaker 1:my next
Speaker 2:that's my next idea. So so America loves to gamble.
Speaker 1:Yes.
Speaker 2:Right? And so what if they required every ride, you had to eat a bowl of chili before Yes. Before going on it. And then there was like a DraftKings
Speaker 1:Yes. Like a
Speaker 2:betting booth nearby. So you could see the people walking onto the ride and you could bet every seat go go long or short on if they were gonna hurl at any point on the ride.
Speaker 1:Yeah. I like that. And so
Speaker 2:you could be they could eat the bowl of chili.
Speaker 1:Yes.
Speaker 2:They're walking out. They go on a on you know, there's maybe like glass separating
Speaker 1:Yes.
Speaker 2:Something like that. You could see them walking out and you're like, oh, that guy
Speaker 1:That doesn't look too good.
Speaker 2:Oh, that chili's not sitting well because especially throughout the day Yeah. People have had more and more chili because every time they have to do a ride, they have to eat a bowl of chili. And so you'd have a huge new influx of guests that aren't there to do the rides. They're just there to gamble on on will people make it to the end. And so by the end of the day, it's just it is just a mess out there.
Speaker 2:People are in hazmat suits. You're walking around, you know, goggles and everything because they're just the whole park is
Speaker 1:just Yeah.
Speaker 2:Grow up going everywhere.
Speaker 1:I I I I'm a firm believer in adding variable rewards to Exactly. Six Flags generally. I would be very interested in when you get on the ride, there's a 1% chance that it goes 1% the speed. And so you get on, and you're like, yeah. You got unlucky, and you're gonna be on this for two hours now.
Speaker 1:Yep. And it's just gonna be clinking along just one inch at a time. Yeah. And you're just like, yeah. I I I caught the I caught the raw end of the stick.
Speaker 1:Yep. I got the short stick.
Speaker 2:So another one, like lottery upsells for every ride. So
Speaker 1:So we're basically just I'm just trying to pure gambling right now.
Speaker 2:Trying to juice their margin. Okay?
Speaker 1:Yeah. Yeah.
Speaker 2:We got people going. Yeah. How do we get more dollars out of every guest? Yes. And so I think, you know, if you have an option, you know, you're waiting in these long lines.
Speaker 1:Mhmm.
Speaker 2:Right? If you have an option to buy, people walk around with an iPad and say like, would you like to do digital slots? Would you like to buy a lottery ticket? And kind of have fast feedback loops Yep. So that, you know, they can say like somebody in the crowd right now is gonna win a thousand dollars.
Speaker 2:Yep. You can do the numbers. There's you can run the numbers. There's there's only a few 100 people online. Yep.
Speaker 2:You gotta get you gotta not not a decent chance, but you got a chance. Yeah. And so I think it's just about getting that incremental dollar out.
Speaker 1:I I have an I have a different idea. I think you're getting a little degen. Let's let's go to Tyler. But first, let me tell you about Turbo Puffer. Search everybody.
Speaker 1:Serverless vector and full text search. Built in first principles and object storage. Fast, 10 x cheaper, and extremely scalable. Tyler, what's your idea?
Speaker 5:I I think I I like the the you know, what other than line doing stuff.
Speaker 1:So I
Speaker 5:think data labeling would be good.
Speaker 1:No. It's that's actually great. Yes.
Speaker 5:Good. This kinda Yes. Route.
Speaker 1:I would take it a a step further. You know there's, like, big, like, massive LAN parties with just tons of monitors, like the JPMorgan. I would make the JPMorgan experience with a bunch of quad monitors, and it could and you could go to Six Flags and you just lock in, and they just have Google AI Studio cooking on every monitor. And you just go to the you get in the line to go vibe code. You chat with models.
Speaker 1:You vibe code. You monitor usage. I I I think that bringing in the corporate big tech dollars
Speaker 2:Yeah.
Speaker 1:Either through branded integrations, rides, so you can ride the Google AI Studio coaster.
Speaker 2:Another thing
Speaker 1:could be a way to up up upgrade.
Speaker 2:Another another opportunity. Wellness has been booming. Right? Mhmm. While theme parks have been have been in relative decline.
Speaker 2:How do you get worse? And so so the obvious thing is is, you know, people have been promoting the intravenous use of, like, ketamine. Right? So if you had ketamine mental health stations throughout the
Speaker 1:What about facelifts? Did you see this article in the Wall Street Journal? Why tech bros are getting facelifts now?
Speaker 2:Yeah. So it needs to turn it to a wellness destination. You can get Yes. So you
Speaker 1:can get a facelift. I I'm I'm not I'm not familiar with this at all, this whole story, but, people were
Speaker 2:It's a pull
Speaker 1:up pull up
Speaker 2:this picture. I I I think they're they're trying I mean
Speaker 1:Whoever this dude is is getting doctor Ben Tale. He's a 60 year old who runs a solar and tech business. He had an advanced deep plane facelift and neck lift with SMAS optimization as well as other procedures. Well, I mean, he looks he looks
Speaker 2:I mean, he looks
Speaker 1:Looks great.
Speaker 2:He's looking great. I I think this is a this looks like a good ad for facelifts, if you ask me.
Speaker 1:Yeah. Well, Keith Ruboy, friend of the show, got a, got a nod in this article. Really? Tech is a young person's game. In a 2024 talk, Keith Ruboy recounted advice for his fellow investor Peter Thiel once gave him.
Speaker 1:You can't hire anyone over 30. It's unsurprising then that men in tech are increasingly, spending thousands of dollars on procedures such as mini facelifts, neck lifts, and eyelid lifts to beat the signs of aging according to plastic surgeons. Yes. The latest addition to the tech bro look is a brand new face. Tyler, maybe you should go ten years younger.
Speaker 1:Maybe you should try and look like a five year old. Just maybe you should shave your head and get like that one curly cue like the baby, you know, the baby with the single single hair.
Speaker 2:I need the cartoon baby.
Speaker 1:Yeah. The cartoon cartoon baby. That's the way
Speaker 2:it is. Yeah. You would have to get a much you could get a face lift, but then put it make your face a lot wider Yeah. Too, like round.
Speaker 1:You need to you need to get on some sort of diet that that gets the gets the baby fat back on instead of working.
Speaker 2:Oh, that's just filler. Tyler just gets
Speaker 1:so much fillers. That'd be ridiculous.
Speaker 2:I'm I'm amazed, that people were quick to volunteer volunteer their own personal stories for this article. Who who did? But I guess mean
Speaker 1:Who do we know?
Speaker 2:All the people in the photos.
Speaker 1:Yeah. But are these people people know in tech?
Speaker 2:I don't know. But they're they're tech
Speaker 1:on nerves if you patient. I mean, you need to you need to ID these people.
Speaker 2:Oh, unnamed patient.
Speaker 1:Menu men used to They're
Speaker 2:saying it's a 46 year old tech executive. Tyler, figure out every 46 year old tech executive. Anyways, I think it's cool. I don't have a problem with it.
Speaker 1:Yeah. Well, if you're trying to do facelifts, you need to get your brand mentioned on ChatGPT.
Speaker 2:That's right.
Speaker 1:Get your plastic surgery firm, mention it on ChatGPT with ProFound. Reach millions of consumers who are using AI to discover new products and brands. The White House has posted that the console wars are over. They shared an image of Donald Trump donning master chief's battle armor with the plasma sword. I'm really not that sharp on Halo terminology, but, it is big news because apparently, Halo is coming to PS five.
Speaker 1:Is that correct? Who's familiar with this? Break this down for me. Are the console wars over?
Speaker 5:It does feel sort of Yeah. This is a I think this was a quote on on GameStop's post Yeah. Where they said, you know, we're announcing the console wars are over.
Speaker 1:Yeah.
Speaker 5:The Halo Halo is is coming to PlayStation.
Speaker 1:That's exciting. But Halo's coming to PlayStation. It does feel like the the the console wars are over in the sense that the the two companies have just diverged so thoroughly in strategy where, you know, Microsoft owns Xbox but is very much, like, console agnostic, and Sony is very much, like, all in on PS five as, like, the core strategy. And he's and and and that's like I don't know. They're still they're still duking it out a little bit, but it feels very much like PS five is, like, a real legitimate console.
Speaker 1:And then and then Microsoft and Xbox and Xbox Cloud are, like, a a strategy. And they would be okay with you playing Xbox games on your PS five because they feel like they are definitely pulling back from like the hardware wars. What do you think?
Speaker 5:I was just gonna say it's pretty funny that Ryan Cohen is so anti violent video game.
Speaker 1:It's That's like
Speaker 5:the whole I mean, like all the old old images of, like, GameStop right the the day before the new Call of Duty comes out. It's Yeah. You know, famous.
Speaker 1:It it must be I mean, I would assume it was a big part of the revenue, but maybe not anymore. Who knows?
Speaker 2:I wish I I I I miss when q four meant that there was an then now all I was thinking about was a new COD. That was a simpler time.
Speaker 1:I played a little bit of the new battlefield. It was not anything super special. Yeah. I think you gotta set your whole life up to really dominate COD. Plus, I feel like I gotta have mouse and keyboard, and it's just not in the cards for me.
Speaker 2:Yeah. I
Speaker 1:can't I can't do the controller stuff, seriously. It's just too I don't know. It's just not for me. Anyway, the the console wars, I I was I was trying to get up to speed on, like, how do you tell the story of the of the last thirty years of the console wars going back to the Atari, then the NES arrives in The United States in The in '85, '89, Sega Genesis in 1989, Super NES, then PlayStation in n sixty four go back and forth. The Sega Dreamcast comes in.
Speaker 1:Apparently, of the earlier online playable consoles. DVD playback of movies moves units into living rooms. People start buying consoles because, oh, you can also play DVDs. And then eventually, you can also play HD DVDs and Blu rays. There was a battle between HD DVD and Blu ray.
Speaker 1:Anyway, we'll see how much it's over. It feels it feels pretty over.
Speaker 2:But they're not to be clear, they're not gonna allow like cross platform live play between PlayStation and Xbox.
Speaker 1:Well, they definitely do that in COD.
Speaker 2:Oh, they do already.
Speaker 1:For sure. Yeah.
Speaker 2:Is there any advantage to playing on one or another? Like, is like the hardcore players, do they do they pick a side?
Speaker 1:I mean, the the I believe the hardest core players always pick mouse and keyboard. But they might
Speaker 2:But play hardcore So so
Speaker 1:PC would be the most hardcore.
Speaker 2:Got it.
Speaker 1:Because the reaction time, I mean, I'm sure that there are plenty of people that debate this, but, in general, the the the the muscle, like because if you're trying to pick click on a head, like, moving your arm
Speaker 2:Yeah. You playing on a PC would smoke you playing on a console.
Speaker 1:Usually. Like, there are there are clearly some people who are phenomenal with the sticks, but in general, this much movement is gonna be more accurate than this much movement because this is just not that much. It doesn't it it doesn't leave that much, for, like, precision. Now some of the games have worked to crude to kinda level the playing field by having different levels of auto
Speaker 2:have auto aim.
Speaker 1:Exactly. Different levels of auto aim. And so you're in this weird realm where if you play on consoles, you do get it's not auto aim. A console player would be very upset with you calling it auto aim because what it actually is is that when they're when you're over a target, it slows down the speed at which the stick moves the cursor. Reactivity.
Speaker 1:Exactly. And so it's not snapping to the target. It's just letting you slow down.
Speaker 2:Using auto aim with this laser pointer
Speaker 1:Exactly. On Don't don't shine
Speaker 2:I don't put it in people's eye. Don't put the laser pointer. You don't
Speaker 1:know where you're going with It's risky. You never know. It's risky.
Speaker 2:It is. Should we talk about Tae Kim on why AI is underhyped and isn't a bubble yet? Sure. Let's do it. Tae Kim.
Speaker 2:Whatever happened, we Tae Tae was supposed to be on Friday.
Speaker 1:Yeah. But it was like a it was like a 2PM last minute, booking, and it wasn't, there wasn't anything in the news right then, so we're gonna have him on later. I I've wanted to him on the show real in
Speaker 2:the LinkedIn chat says, I'll take it that Jordy wasn't exactly a trick shotter.
Speaker 1:Not on not
Speaker 2:on I've had my I've I've I've I've three sixty no scopes.
Speaker 1:I like that Joseph is like, as a PC player, it is auto aim. I I I agree. It it it does feel like there's a big difference between the computer is you're setting your sensitivity once, and then you go into the game and you interact with the game and there's nothing that's, like, context aware. As soon as you add something that's context aware, it feels like that's auto aim and that's cheating and that would certainly be Yep. An advantage.
Speaker 1:And it is designed to be an advantage because you have a lot of disadvantages when you're using a console with a Yep. With a controller that has small stakes. So Take Kim says, here's why AI is in a bubble today. He's distilled data points and ideas from previous columns and coverage. If you prefer facts and evidence based reality over vibes and conflated narratives, enjoy.
Speaker 1:Big tech valuations are reasonable. Leverage is low. We're at the beginning of multiple AI super product cycles in the year ahead. We are in the early innings of a technology computing shift to AI, the largest in decades. Think 1994 versus 1999.
Speaker 1:Yeah. That's a good question. When does the .com bubble start? Everyone says, like, '99 to 2000, but was it not a bubble in '94? Because, like, it can be a bubble.
Speaker 1:Like, even a big big bubbles have small beginnings. Right? Like, they start as small bubbles, and then they get bigger and bigger as they inflate.
Speaker 2:I remember Amazon went public 05/15/1997.
Speaker 1:So Yeah. And so you could so you could easily claim
Speaker 2:that I just have
Speaker 1:a we're in we're in the very early stages of a bubble.
Speaker 2:My personal timeline was that, like, the further you went in the nineties, the crazier it got. Mhmm. Like, it was, like, heating up. Yep. And there was plenty of people that made insane amounts of monies money, like, prior to the bubble.
Speaker 2:Right?
Speaker 1:Totally.
Speaker 2:And a lot of them probably wish they held a bit longer. But
Speaker 1:No. No. I think a lot of them are happy they got out when they did. It's like
Speaker 2:Well, sure. But but, again, like, lot of, like, the euphoria.
Speaker 1:I'm talking about, like, like, the I I've talked to some folks who are, like, they founded a company in 1994. They sold it in 1998. It does not exist. It didn't exist. It it does not exist anymore.
Speaker 1:It didn't exist in 2002, and but they wound up with, like, a $100,000,000 liquid. And they're, like, set for life Yeah. Because they, like, nailed it.
Speaker 2:That's enough to retire? Yeah. Kidding. I always I always I mean, I feel like the debate comes up, like
Speaker 1:You still have you still have to work
Speaker 2:on that schedule. 10,000,000 enough to Yeah.
Speaker 1:You still you still have to cut you still have to raise a VC fund and
Speaker 2:Yep.
Speaker 1:And LARP is VC for a
Speaker 6:little
Speaker 2:continue.
Speaker 1:Well, we have our we we actually have our first guest.
Speaker 2:Okay. We can come back.
Speaker 1:Let's go to let let's go to space. Let's go to space data centers. Our first guest of the show Philip.
Speaker 2:Is Philip from Star Cloud.
Speaker 1:Burning up the timeline, Philip. How are you doing? Good to see you.
Speaker 2:The current
Speaker 1:thing himself. The current thing himself. Did this all kick off with NVIDIA posting about you? Was that when the kerfuffle I
Speaker 3:think that was the main think that was the catalyst. Yeah.
Speaker 1:Okay. So Thanks
Speaker 3:so much for having me on, by the way. I've been a huge fan since day one.
Speaker 1:So I I yeah. It's great time to have you. This is why the show exists. We we we we address every timeline that is in turmoil. So break it down for me.
Speaker 1:When did you start the company? What's the pitch? And and then we'll go into some of the, like
Speaker 2:Why are the haters wrong?
Speaker 1:Yeah. Yeah. But but just give me, like, the recent back backstory.
Speaker 3:Yeah. So we started about a year and a half ago, beginning of last year. We, yeah, we basically, in that time, built a satellite. We've got first launch coming up in a week, and that's why NVIDIA just posted their first thing because we're gonna be launching the first h 100 space. So about a 100 times more powerful GPU compute than has been in space before.
Speaker 1:Okay.
Speaker 3:And, yeah, that's that's the sort of brief history.
Speaker 2:Okay. What were what were you doing before this?
Speaker 3:So I started my career as an engineer for five years. Started applied math and theoretic physics, undergrad and masters, and then I spent a few years at McKinsey working with the space agencies of the UA and Saudi government. And then I founded and sold another company not related to this, and then moved my way into this.
Speaker 2:Here you are.
Speaker 1:Harvard, Wharton, Columbia. He's been to every academic institution.
Speaker 2:Collecting them all. What what is the what is the strategy for this first launch, this first satellite? Like, what what are you trying to figure out with this launch? What is what is the value of putting this h 100 into space? And then kind of, like, how do you think about the timeline?
Speaker 2:Because I think, like, the, I would say, like, overarching criticism of data centers in space has been, like, people I don't think people genuine generally believe that this will never happen. It's more of, like, a debate around, like, the timeline on which it happens.
Speaker 3:Yeah. Yeah. Which is a fair I mean, it's a fair debate to have, I think. So the first satellite, the reason we're launching this, lots of people believe that you can't run terrestrial data center grade GPUs in space because of high radiation environment, and you need to dissipate the heat in a vacuum. So this is really a demonstrator.
Speaker 3:It's a 60 kilogram small sat. It's launching on a Falcon nine, a quarter plate there. And so we'll be running high power we'll we'll do a whole bunch of firsts. We'll be the first to run high power inference in space on imagery from working with various DoD customers. We'll announce that soon.
Speaker 3:We'll be the first to train a modeling space. We're training mini GPT from. We'll be the first to do running a version of gem Gemini called Gemma, which is like a cut down version, working with Google Cloud on that. So so we'll do some fun demos. Like, for example, you can SSH into it and then just ask it things like, where are you now and how does it feel to be a satellite, and it will give you a kinda coherent answer.
Speaker 3:But, yeah, this is really, really a demo. The next satellite launching in October year is 10 times the power. We'll have, by far, the largest commercial radiator in space, a 30 meter wingspan solar panel, and then we'll have very, very sophisticated optical and, connectivity options on there. So customers including, DOD and other satellites will be able to send us raw imagery. We process it on the agent, and we just download the insight.
Speaker 3:That's that's the road map.
Speaker 1:How how far are you like, there's a launch that's happening very soon, and then there's the renders, which are like it looks like sci fi Star Wars. Like, they're oh, yes. There's, like, 25 shipping containers that are descending. Like, what's the delta there, and what was the decision between, like, kind of showing more of a vision document? Because I think that's what triggered a lot of people was, like, you were showing an amount of mass in orbit that feels, like, beyond the ISS.
Speaker 1:Like, it felt it feel it looks huge.
Speaker 3:Oh, yeah. Yeah. Right? Yeah. No.
Speaker 3:To to be fair, it's it's extremely difficult to imagine what's about to come down the line with Starship. So, like, the launch launch cost might come down by between 10 and a 100 x. Launch capacity is set to go up by a thousand x or more. And the reason is if you build a new Starship every day for a year, which is, like, a very conservative estimate for what they're trying to do, at the end of the year, have 365 Starships. It has five times payload capacity.
Speaker 3:You can launch 10 times as frequently. So we're really talking about a thousand times, like, more tonnage per year that we can get space. So and that's coming, like, three to five years, which is really not that far away. So the idea of the the render like, you can launch the the whole ISS in two Starship launches. So the render is to show, look, there is gonna be a lot more mass in space.
Speaker 3:But I mean,
Speaker 1:it was Yeah. I almost feel like you should have done the Andoril thing where it's like anime if it's like sci fi where the vision's going, and then it's like render for, like, what you're actually sending. Because, like, the render that I saw of, like, the multiple shipping containers putting together, like, that's not what's actually launching next week. So I think that's where, like, a lot of the cognitive dissonance is coming
Speaker 3:from. Right?
Speaker 1:But, yeah, I mean, you'll iterate all this. It's fine.
Speaker 3:Yeah. Yeah. I I recently saw Palmer talking about that, and I was like, man, that's actually pretty cool.
Speaker 1:Yeah. Yeah. It it it's nice to have because there is a there is a value for, like, the vision document. Like, what do you where do you wanna go in ten years? Yeah.
Speaker 1:But it just hits different when it's like, the official NVIDIA account is sharing this render, and it's like, okay. Like, that feels like it's happening soon.
Speaker 3:They they they it's not like they don't do their research. Like, they have a whole team of, like, PhDs that go and look at this shit, and, like, they have they have a board that approves that this can get shown that it's, like, feasibly possible.
Speaker 1:Yes. But I don't
Speaker 2:think so Talk about talk about like yeah. Guess talk about so so this first this first launch is meant to be like a demo. Basically, correct me if I'm wrong, but effectively, a science project to start to show capabilities in space to start to prove that you guys can actually put GPUs in space that can run workloads. Like, what is the actual timeline? So and then it sounds like maybe defense is like an an early place where there might be some commercial applications.
Speaker 2:But then what is what's your timeline on on when, if or when, you know, I would be, you know, prompting a model like ChatGPT or Gemini or whatever and and
Speaker 1:It's like open running. It's just cheaper to do it in space. Because that that that's the long term vision. Right? It's like, it's just cheaper.
Speaker 1:It's not anything special or like, oh, we need to be there for some geopolitical or defense reasons. It's just like, the energy is free and the heat dissipation is free, so it's just cheaper. So that's where you go even though the launch costs are expensive.
Speaker 3:Yes. Yeah. So maybe I'll start with the second part. So when will it be cheaper? That's coming with Starship.
Speaker 3:And so Yeah. We're looking at the first commercial launches of Starship in eighteen months. Yeah. But we're probably gonna be seeing, you know, mass volume production of Starship on a three to three to five year time frame. Yeah.
Speaker 3:So, yeah, the the the road map is next year in October, we're launching our second satellite. That's the one it's about a 10 times the computer of the first one, but much more much more capable in terms of continuous power generation and solar panels. That one is the first commercial self service that will produce more cash than it costs to design, build, and and launch. I mean, we we that satellite pays for itself just on hosted payloads because that satellite has such high throughput and processing capabilities. There's a whole bunch of people that just wanna stick stick sensors on that.
Speaker 3:It's not the end state business model, but that's a a nice revenue stream in the meantime. Then we're launching a satellite after that, which will be I mean, yeah, can't talk too too much about it, but you can see you can see this Pez dispenser form factor that's coming out of Starship. Oh, yeah. Yeah. I probably shouldn't say
Speaker 1:too much. And and that was successfully tested on the last Starship launch. Right? The where, like, there was a whole bunch of, like, debris blowing around. It was a crazy, crazy launch, but it did come back.
Speaker 1:It landed, and the Pez dispenser thing shot out the the fake Starlinker, like, the the dummy
Speaker 3:Starlinker. Right? So so so that's about a four ton at least at least a 100 kilowatt satellite. Yeah. Second one's 10 kilowatts.
Speaker 3:First one's one kilowatt. So we like going up an order of magnitude each time. Okay. That one could feasibly launch 2027. And then from there, we basically will launch lots of lots of small versions of or lots of continuous versions of that because that will have very low launch cost.
Speaker 3:Yep. And it will be a while before we start launching the full Starship payload base size. I mean, for one, we need this clamshell door to be ready before we can do that. And yeah. But to be frank, it's quite a while until we start docking things in space.
Speaker 3:The only reason you would dock things in space like in the concept video is if you wanna train a large model because then you need the whole data center to be internally networked. And so that we're probably looking at, you know, early early twenty thirties before we start docking.
Speaker 1:I mean, I I I don't have a problem with thinking in decades. Like, that that's, like, what we say in tech we want people to do. And so I don't I I don't have any I don't think there's any problem with saying, like, yeah. Like, there's some crazy stuff that needs to happen with launch costs. Like, it's gonna take a while until this really works out.
Speaker 1:Like, that's actually exactly what people want from from technology founders, ideally. I guess there is the question of, like, you know, how do you frame it? It's like how you you don't want people to Yeah.
Speaker 2:It's like you just needed to generate a lot of revenue quickly in space. You could do the first space casino where people could beam up, tap into it, all ages all ages.
Speaker 3:People to hit me up.
Speaker 1:Oh, really? Yeah. Yeah. I mean,
Speaker 2:I Yeah. Yeah. You're space space token. You gotta find this thing. The dark place.
Speaker 2:How do you think about, you know, some of the we we I think we had we'd asked Dylan Patel at one point about GPUs in space, and and I don't think he mentioned, like, the challenges around heat and heat dissipation, but he was talking about how sometimes you just need to, like, unplug the server and plug it back in again or or switch out, individual GPUs. But, like, what's the solve on that long term? Are you thinking about, you know, these being, like, fully robotic systems that allow you to make changes on the fly? Like, what's the solution there?
Speaker 3:Yeah. I think probably two points on that. I mean, the first is for these massive data centers where you've got, like, you know, a kilometer long or a mile long row of racks. When so the people I speak to now are saying, look, if if an h 100 breaks in that, you just leave it in Nobody's going down there and unplugging and putting that back in. Just writing software around it, and they'll just leave it, basically.
Speaker 3:So that's number one. But secondly, for the first few iterations of the satellite, it'll be exactly like Starlink, and we won't be able to touch it. And so we'll have to have redundancy on the critical systems, and then we over provision things like solar panels and radiators, which degrade over time. And over over time, the whole industry is well, space industry in general is moving towards robotic maintenance, but also terrestrial data center industry is moving towards robotic maintenance. And that's where on a sort of five year time frame, you know, some of the people we speak to in data centers are saying, we we are fully expecting data centers to be maintained by humanoid robots in a five year time frame.
Speaker 3:And, you know, this is where it starts to sound a little bit wacky and sci fi, but it I mean, humanoid robots do not require too much modification to work in space in the sense that a a human space suit would take care of radiation and thermals. You would need to retrain it slightly, but, you know, that that's maybe sounds a little bit wacky, but robotic Yeah. The
Speaker 2:I I it doesn't have to be a humanoid. Right? Like, there's a bunch of other form factors.
Speaker 3:Form factor, but humanoids will be mass produced, so probably the probably the cheapest.
Speaker 2:It's interesting.
Speaker 1:I want you to react to Andrew McCallop's viral post to get 7,000 likes breaking down a bunch of different things. The core claims I see in here are, questions about what if demand for payload to to orbit doesn't decline. He does talk about, the difficulties of, heat dissipation. He says, you just finished watching a Scott Manley video on, radiative heat transfer, and now you think you're gonna disrupt AWS with a few solar panels and a rideshare slot. You're gonna believe that right up until the next month when you crack open DeWitt.
Speaker 1:And he goes into a lot of the technical level. But I was I was wondering if if if there were any key points in here that you think were, you know, easily debunked from actually being in the trenches. You know, obviously, he's he's Yeah. You know, he does work in in space and does something somewhat similar and does seem like an expert who'd be equipped to know this stuff, but you've obviously focused on this case specifically. So what was your reaction when you saw his sort of comedic breakdown?
Speaker 3:Yeah. I mean, I like the post.
Speaker 1:I mean,
Speaker 3:I'm I'm a fan of Andrew. I've been following his stuff, and he's a great engineer. Same with Kelly, by the way. I'm very impressed with what they're doing
Speaker 1:with ours. Yeah. Totally.
Speaker 3:Yeah. Yeah. So, I mean, on the on the thermals, the criticism usually is in order to dissipate that heat, you need a large surface area, and they think for some reason that that's super impractical. Mhmm. I mean, my cofounder, Israel, has a PhD in engineering, spent ten years designing and building large deployable structures, solar panels, and radiators.
Speaker 3:And, I mean, you just have to build a large surface area, and that's what we're doing. So half our engineering team is building a very large low cost and low mass deployable radiator. So that is the core IP of our company is that. So that's number one. On the launch cost side of things, so so sometimes people say, if there's no competitors to Starship, which it doesn't look like they'll be for at least five years, then will there be any incentive for Starship to for SpaceX to drop the pricing?
Speaker 3:Yep. Now I have a bit of a different opinion than than most people. Most people say, well, no. They'll just keep it high. I I don't think so, and it's the same reason that they keep that the the teller Tesla is sold under the price.
Speaker 3:They could they could potentially sell Tesla at a higher price, but in order to reach a much larger market, you need to sell at a lower price. So for example, they're gonna have all of these Starships sitting there. They can only launch in two years once every two years to Mars. Their marginal cost of launch on each Starship is 2 or $3,000,000. Yep.
Speaker 3:Now either they can leave it there because there's no demand at the, you know, $200,000,000 for launch price, or they can say to people like us, hey. You can launch it for $2,030,000,000. They still make shitloads money. That's still very profitable for us. Mhmm.
Speaker 3:And so it's like a win win. So my expectation is that actually the launch price will come down even if they don't have huge a huge number of competitors.
Speaker 1:Yeah. Yeah. Like, the the elasticity of demand there. Like, they might just be able to sell more volume at lower prices, so they might wind up lowering the cost, or, yeah, kind of giving you, like, a bulk discount if you wanna put it in that terms. Interesting.
Speaker 1:On the on the heat dissipation, question, how much do you think that that is, in the domain of science, and we need to have a breakthrough discovery? You need to discover the solution to that problem versus an engineering, problem where maybe it just comes down to, can you make manufacture something that is already follows the laws of physics, and all the physicists agree it works if you can just build it profitably.
Speaker 3:Yeah. I mean, it it's from what we're seeing, it's very much an engineering challenge. It's a it's really like a manufacturing. So we know that it works because the International Space Station has a radiator that dissipates 70 kilowatts. The problem is it's ridiculously expensive.
Speaker 3:Sure. So our radiation on our second satellite is 10 times lower mass per watt of dissipation and a 100 times lower price per watt of dissipation than the radiator on the International Space Station. That's the whole the whole game is making this radiator cheap and light. And, yeah, we've got very some very innovative or very unusual manufacturing techniques that we are working on, basically.
Speaker 2:Fun. You posted a few days ago, people don't understand Starlink is going to just be the Internet direct to sell is gonna hit hard. Basically, all telco is doomed. Let's check-in this time next year. Expand expand on that.
Speaker 2:I we
Speaker 3:That was at 1AM, and I had a very heated argument with somebody, and I got I was in the cabin. Was like, I'm just gonna post this. And then, like, 300,000 views later, I was like, okay. This was probably, like, a little bit too
Speaker 1:extreme. Too aggressive.
Speaker 2:Well, no. Yeah. Yeah. Obviously, if you wanna get attention on acts, just say the most inflammatory thing possible. Say that, you know, all these multi 100 do that.
Speaker 2:Yeah. No. But but what's what's what's your view on how quickly you know, we we saw news on Apple exploring something with with Starlink on direct to sell. Yeah. Yeah.
Speaker 2:Seems like every major manufacturer is gonna be interested in this. And then there's also that other company that that's like a competitor. Right? That what is it? That is Verizon propping them up?
Speaker 2:Don't have any satellites?
Speaker 1:TS. It's ASTS.
Speaker 3:Yeah. Yeah. Yeah. No. I think they have any open hell.
Speaker 3:And the reason they don't is sorry. I know there's a there's a whole bunch of people that got it.
Speaker 1:They have a I mean, they have a retail army. Retail traders? The retail traders are gonna come for you, dude. Good luck.
Speaker 2:What do you know about space?
Speaker 1:Well, you got your you got the private markets.
Speaker 2:They're doing fine.
Speaker 1:You got the private markets Varda guys coming for you. Now you got the retail traders at ASTS coming for you. You got you got no friends in this foxhole, dude. You gotta get out
Speaker 2:of here. A s a s ASTS is up 7% just today.
Speaker 1:So That's
Speaker 2:so good.
Speaker 3:Oh, wow. That's amazing. So No. I mean, okay. I I want them
Speaker 1:to succeed, I'm I'm like Well, that case, I reversed my entire position. 7% move. Let's go. That's very funny. Yeah.
Speaker 1:I I I don't know.
Speaker 3:It's a launch cost thing. It's a launch cost thing. They they can't compete with Starlink on the launch cost. So
Speaker 1:yeah. Yeah. I mean, that The argument can
Speaker 3:be leveled against us, by the way, as well. So Yeah.
Speaker 2:Well, so so on on what what are the what are the telco companies gonna do? Because they're multi $100,000,000,000 companies. They're not just gonna roll over. Is it is like, how do you see them kind of reacting?
Speaker 3:I mean, it it feels like there's lots of multi $100,000,000,000 companies that just get backed into a corner and die. I mean, Blockbuster is a $100,000,000,000 company.
Speaker 1:You are Doesn't make sense of space, Maxie. This is Well
Speaker 2:well, no. I I guess my be
Speaker 1:right over, like you know, it just depends on the time frame. But, like, I mean, it just doesn't seem like it just doesn't seem like like Internet backhaul is not gonna move to Starlink in the next, like, five years. You know? This is like, nothing else. Like, back of mind.
Speaker 3:Cables for sure.
Speaker 1:They'll be
Speaker 3:on the cables. Yeah. The the thing people are under appreciating is the amount of capacity they can launch per Starship is mind blowing. And that is coming in eighteen months. So and like and that's like proper hardcore, you know, very high bandwidth direct to sell in buildings.
Speaker 3:And that's
Speaker 1:what we don't appreciate.
Speaker 3:In buildings. It's pretty crazy.
Speaker 2:Yeah. It's Yeah.
Speaker 1:Yeah. No. I mean, maybe I I I
Speaker 2:guess a Starlink I guess they they generally. They the telecom companies will end up being like Starlink resellers. Yeah. Right? Is that is that one scenario?
Speaker 3:I mean, they could be.
Speaker 2:Yeah. Doesn't sound like the best business to be in. But
Speaker 1:yeah. Yeah. Anyway, thank you so much for hopping on and defending your honor. I think you did a great job defending your honor. I think you're thinking in decades.
Speaker 1:I'm excited for you to continue working on this.
Speaker 2:How how you're you're in the Washington area. Right?
Speaker 1:Yes.
Speaker 2:Washington State. How how how's the what's the scene like in Redmond before you go? Good? How's how's the energy?
Speaker 3:I mean, there's a lot of it it's where Kuiper and Stalin cast all of the peep like, I think 95% of satellites launched in the last two years were designed in in Redmond, so there's a lot of space time out there. But, yeah, it's not the liveliest of cities in the world. But
Speaker 2:Well, you guys you guys have work to do. So thank you thank you so much for joining. Fun conversation, and we're we're rooting for you.
Speaker 3:I really appreciate it.
Speaker 1:Well, talk to you soon. Let me tell you about Linear. Linear is a purpose built tool for planning and building products. Need the system for modern software development. Streamline issues, projects, and product road maps.
Speaker 1:You can start building. Do you wanna go into BubTalk? Are you still interested in talking bubbles, or do you wanna move on to something else?
Speaker 2:We can move on to something else.
Speaker 1:There's there's a bunch of bub talk in here. Maybe more importantly, the mango Oreos
Speaker 2:We need to bub talk more.
Speaker 1:I mean, there's been a lot of bubble talk lately, but I feel like we've hit it a bunch. There's a bunch of charts
Speaker 2:Yeah. If you're trying to figure out if we're in a bubble or not, I recommend going outside, picking a daisy Mhmm. And just picking the leaf the picking the petals off That does
Speaker 1:feel like where we are right now.
Speaker 2:It's a bubble. It's not Yep. A bubble. It's not. It's and then whatever you end up landing on, that's what's gonna happen.
Speaker 2:So
Speaker 1:Yep. Good luck In Oreo world, Mondelez, the owner of Oreo, has trained their own video model for television advertising. They invested $40,000,000, and they say it cuts production costs by 30 to 50%. I don't know how that's possible. That that, like, it should cut costs by 99%.
Speaker 1:Like, do you don't know. I I just think
Speaker 2:I still but I still think there's a huge amount of budget goes to coming up with good ideas Sure. And then the the like editing and then making infinite variations of it, which I'm sure AI will will, can already do well in in some cases. So
Speaker 1:Tyler has
Speaker 2:a pay people to come up with great ideas and then execute. But the the idea is is like the actually the highest margin part. Right?
Speaker 4:And so
Speaker 2:the ad some of the ad agencies, I think, will do well. Apparently, the Oreo's parent company Momma. Only spent a 100,000,000 on digital print and national TV advertising in the last year.
Speaker 1:Wait. So they spent a 100,000,000 on advertising
Speaker 2:And then
Speaker 1:they spent 40,000,000 on top. Okay. Tyler, what's your take on Oreo net?
Speaker 5:So this was my idea when we were talking about Sora where I said that Coke should or Coca Cola should release a video model open source, where you can do anything but every single video has a Coke point.
Speaker 1:Oh, yeah. Yeah.
Speaker 5:Yeah. So so they should release this model, make it open source, but there's just Oreos everywhere in the video.
Speaker 1:You just like can't do anything else. You ask it to like make a picture of your dog and your dog just does an Oreo for a head or something like that. It just gets crazy. Yeah.
Speaker 2:I yeah. That that would be that's a brilliant idea that would be abused so badly Yep. It would be shut down with
Speaker 1:Does this
Speaker 2:twenty four hours.
Speaker 1:I mean, does this math make any sense? Like, where did the 40,000,000 go? Like, what were they were they What fine tuning is it? That 40,000,000
Speaker 2:is ours now. That is ours now. Yeah. Accenture was like
Speaker 1:I I really wanna know I really wanna know the breakdown of that. Was it actually like running the fine tuning? Was it generating, you know, training data? Like, what was the actual project that got them there? I mean, I I I could imagine, you know
Speaker 2:It was it was somebody took the $40,000,000 and they made it an app layer on top of Sora too.
Speaker 1:Yeah. Also, if they had a whole bunch of footage of Oreos throughout the thirty years that they've been advertising and doing video ads, maybe fifty years, and they load those in, can they count that as, like, depreciation or something?
Speaker 2:It's hard not to see this being, like, a huge waste of money that somebody somebody high up said, like, I'm gonna be the AI guy at Mondelez. Right? Because you have to imagine whatever they were able to do today by investing $40,000,000, 40% of the of their ad. So again, like, production cost, which is where they're saving money, is not advertising budget. Yes.
Speaker 2:I would I would look at the way they're talking about their ad budget as like what they spend on ads plus the production cost. Yep. Like, that's the ad budget. Yep. It's very possible that the production cost was like 10% of that.
Speaker 2:Yeah. So you spent 40% of your overall advertising budget to slash 10 potentially 10% of your budget by 30 to 50%, meaning that the payback yeah. I mean, it's a it's a
Speaker 1:It's not the craziest thing. I don't know.
Speaker 2:Yeah. But but the models are gonna the models will just be one shotting. I promise you they will be one shotting people eating Oreos better than your model, your custom model by now. Yeah. Like, by the time they finish by the time they finish, it's it's like they they get on Sora too and they do it and they're like
Speaker 1:Oh, no. Why did we fine tune like some, you know
Speaker 2:Oh, they did it with Accenture. I called it.
Speaker 1:No way. They did it with Accenture.
Speaker 2:I knew I knew I knew it. I I knew this was just like, yeah, like big consulting, you know, big strategy firm says, yeah, we're we're happy to give you if you want it, what's your okay. $40,000,000? We're happy to give you an AI play here. You're gonna be you might just be the open AI of food.
Speaker 2:You might become we can help you be the anthropic of cookies.
Speaker 1:Of cookies.
Speaker 2:And then and then it's just immediately a write off.
Speaker 1:It is so crazy that they created their own model. How did this leak? It's so bad.
Speaker 2:I think no. I think they're bragging, John.
Speaker 1:They're bragging?
Speaker 2:They're bragging. Mondelez is doing It's like why are they telling on themselves?
Speaker 1:Why are
Speaker 2:they telling They're not, John. They're bragging.
Speaker 1:Wait. Yeah. They said the yeah. The head of the glow the global senior vice president of consumer experience said they're gonna use it in the twenty twenty seven Super Bowl. I don't know.
Speaker 1:Is there any reason why you'd want a three year old to cartoon?
Speaker 2:You could have just run eight Super Bowl ads.
Speaker 1:You could have run eight. That is actually crazy.
Speaker 2:That's actually an under This is
Speaker 1:so inspiring. If you want to make money in the AI boom, go and get $40,000,000 for a project like this. It's genius. Like, you just made
Speaker 2:so much money. Insulting moment. Yeah. Yeah. Koop says, sounds bubbly to me.
Speaker 2:Totally agree. There's really so much money. Nobody has applied so so the friend.com billboard strategy Yeah. Is potentially a new strategy. Just like buy so much advertising Primal.
Speaker 2:That people can't stop talking about it. Why has nobody done that for the Super Bowl? Like, has anybody bought like, if you really wanted to break through with the Super Bowl, you would buy 10 ads or you would buy try to buy mean, a friend tried to buy
Speaker 1:Can you imagine doing a whole Super Bowl buyout? It's just it's just four. How many minutes of Super Bowl ads are there? Could you do forty minutes of ads?
Speaker 2:The, we drove we we Insane. We can't get away from the from obvious billboards. We drove by today, this one that just says, when you're on the street, just says endend.com.
Speaker 1:Is it the end?
Speaker 2:Yeah. I would I would have I I definitely think that Oreos just being like, we want to be drilled into the mind of every American. We're gonna buy 20 Super Bowl ads this year. That's our budget for the year.
Speaker 1:Yeah. I mean, there is, like, some sort of bull case where it's like you need to generate a whole bunch of Oreo creative across Facebook and and, you know, Instagram ads and whatever. But at the same time, it's like, I don't know why you need a custom model. Like, the $40,000,000 custom
Speaker 2:model was crazy. Assume that every model is training on every Oreo ad ever in history.
Speaker 1:Do do do am I crazy here? Is there any reason why you'd wanna fine tune for $40,000,000?
Speaker 5:I would I would go farther. I would train a language model.
Speaker 1:Oh, yes. From the ground up.
Speaker 5:Yeah. Because then you have the
Speaker 1:Do a full pre train. Do a pre train.
Speaker 5:Do a pre train. Do a a full base model. Yep. You know, what's it gonna score on? We Meny's last exam.
Speaker 5:What's it gonna score on
Speaker 1:And and and let's let let's let's assume I'm a Fortune 500 buyer and you're an Accenture consultant. How much is that gonna cost me, Tyler?
Speaker 5:A couple billion. I I mean
Speaker 1:And and you're telling me that that's worth it. Right?
Speaker 5:Of course. Yeah.
Speaker 1:We gotta get this guy a job at Accenture. He he's gonna he's gonna 100 x revenues.
Speaker 2:Yeah. I mean, this just, to close it out, this is Publicis Group, French multinational advertising company, one of the largest advertising agency conglomerates in the world, and Accenture serving up a farm to table AI strategy for an executive at Oreo who wants to be able to say, we don't we're not just using generative AI. We are generative AI. We are the future of food.
Speaker 1:I I hope they, they need to vertically integrate. They need to vertically integrate. They need their own data center. Five snap chips. They need to bake this algorithm into an ASIC.
Speaker 1:They need to go to Broadcom. They need to go to TSMC. They need line time at TSMC because, I I mean, it's possible that they need to go to ASML and get an entirely new lithography machine.
Speaker 2:Need to get
Speaker 5:to Rare Earth.
Speaker 1:They need to get into Rare Earth. They need into Rare Earth. They need to go all the way down to they need
Speaker 2:to Maybe acquire a desert just to get enough sand.
Speaker 1:They need to teach sand to think. They need to teach sand to make Oreo hats. That's what they need to do. They need to acquire Brutal.
Speaker 2:Best of luck out there, Oreo.
Speaker 1:Best of luck.
Speaker 2:We're rooting for you.
Speaker 1:Well, you know what Oreo should do?
Speaker 2:They gotta
Speaker 1:They wanna use AI. They gotta use numeralhq.com. Put your sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. If you're if you're selling Oreos online, you gotta get numeralhq.com.
Speaker 2:Lulu says it's the year 2025. You wake up and a progressive white billionaire with a black face NFT profile picture is saying GM to you. Saying wag me friend.
Speaker 1:This is a crazy choice. Why did he pick this one?
Speaker 2:This is like the how do you do fellow kids meme with the
Speaker 1:It's it's such a crazy choice on a million different levels. Even the smoking, even the NFT. Jay
Speaker 2:Maybe he's maybe he see maybe Reed secretly likes heaters.
Speaker 1:Jay that would be sick, I guess. Jay said this this GM is proof that LinkedIn is four years behind on every news cycle. Pretty pretty remarkable. How did the how is this
Speaker 2:I think the crypto community loved it, to be honest. Really? I think they're I think they're pretty fired up. If you're one of the 10,000 people that own
Speaker 1:Crypto punk?
Speaker 2:A punk. This is a punk. How are the
Speaker 1:punks doing? Are they still are they still hanging out? Hanging around? Well, before we dive into that, we have Justin Murphy in the restroom waiting room. Let's bring him into the TVP at Ultradome.
Speaker 1:Justin, how are you doing?
Speaker 7:I'm good. What's up, guys?
Speaker 1:Suited up.
Speaker 2:You're looking fantastic. The sharpest guest we've ever had. I love this I love this suit. You're looking great.
Speaker 7:Well, thank you.
Speaker 1:You know, you're the reason you're the reason I use 1Password. You you had some sort of course, like, creativity or something. And the main thing I took away was use a password manager because you gave such an emphatic endorsement of password management. And I adopted it and it changed my life, and I love it. And then we interviewed the the CEO of 1Password, and I was like, I love this.
Speaker 1:I learned this from Justin Murphy.
Speaker 7:Wow. That's really interesting to hear. I'm an avid user of Lucy. I'll throw in as well. Oh, that's good.
Speaker 2:There we go.
Speaker 7:People how people don't use password managers is beyond me. I mean, even with password managers, it's it's living hell. But Yeah. I'm glad you glad you solved that.
Speaker 1:Yeah. Maybe maybe for the folks who aren't who aren't super familiar, what's the shape of your business? What's the shape of your day to day? I know you have a number of different outlets. I was, I I wanted to invite you on the show because I noticed you were live streaming, and you actually mentioned us.
Speaker 1:And I was like, oh, that's so cool because I love when the, when when we, like, create some format and then other people can kind of spin off of of it and whatnot. But but how how do you describe, like, your whole Wife. Like, yeah, your whole
Speaker 2:Your whole person.
Speaker 1:Your cinematic universe, I suppose.
Speaker 7:Yeah. So I mean, left my very nice cushy academic position about six years ago and I left at that time with a very clear mission which was to basically reinvent the scholarly life for the Internet era. I had I I was watching sort of like academia go downhill and all the creator economy stuff was sort of kicking kicking off. And it was clear that there would be ways to essentially port everything I was doing as a professor onto the Internet. And I would just have to experiment and test a lot of things out and hustle and and try to figure it out.
Speaker 7:So that was what that was my mission six years ago and and it still is. I mean, that's my calling. That's my vocation. It always has been. Yeah.
Speaker 7:And I basically built a couple businesses, tried a few different models, and had moderate success with a few of them. And then, you know, my I started having kids and Yeah. Kinda took a step back to kind of, you know, think about what this stuff really looks like, you know, over the long term. I I I had a lot of successes. I had some failures as well.
Speaker 7:And that's when I decided what I really needed to do was sit down and write this book called The Independent Scholar to really map out the whole thing and really put this kind of new lifestyle and business model on the map. So basically, the past past couple years, past two or three years, I've kind of been in hiding honestly. I've been having kids, figuring out how to do that, and writing this book, to try to basically teach everything I've learned about this lifestyle and business model that I've that I've built and also to ground it in a kind of longer running history. Because most of the a lot of the greatest thinkers and philosophers and what I call independent scholars throughout history were actually free floating individuals hacking it in weird entrepreneurial ways. And most people don't know about this history and it was largely what what inspired my kind of mission.
Speaker 7:So I decided I needed to to do it right, sit down, take the time required, and put it down all in one place. So that's that's finishing up. And then I also I occasionally work with startups if something actually really interests me and seems really exciting and asymmetric and I like the people. So my life's really crazy right now just because I, want a startup I started working with like two years ago. It started out, was just sort of like consulting, kind of advising, helping out with the branding and messaging.
Speaker 7:They just they just keep winning and this thing is like kicking off. So we're in the thick of it right now. That's called Noctrain. It's a a layer one blockchain. Yeah.
Speaker 7:So that's kind of consuming everything at the moment. Apologies to the poor people who pre ordered my book. A lot of people are waiting on it. It will come out by the end of this year, mark my words. But right now, I'm I'm in I'm in the weeds with Nocturne because they they're this thing I think is is it's going off.
Speaker 7:So that's a summary. It's a little messy, but
Speaker 1:That's cool.
Speaker 7:I basically have accomplished my mission that I set out on six year six years ago. And I still haven't, you know, come up for enough air to tell the story fully, but I will. And I I think, you know, I'm pretty proud of everything I've accomplished.
Speaker 1:Yeah. How do you think about the just like the the the basic economic forces around, like, long time horizon content, which is how I would put investigative journalism and academia. It feels like social media and algorithmic feeds are, like, fantastically aligned with, like, news and and kind of fast high throughput creativity. Like, just because if you're producing a lot of content regularly, there's lot of ad inventory space. There's a lot of room for a little side partnership here, and it just kind of all flows together very easily.
Speaker 1:And I feel like Substack and the social media platforms have done a great job of of providing an outlet for someone who would effectively be like a beat reporter or someone who's just a commentator, an analyst, somebody with a column, a weekly column in a newspaper. You can take that weekly column, and you can go and develop an audience and monetize effectively. But if you're Seymour Hirsch and you're gonna get, like, one scoop a decade, and it's gonna be something that reshapes the global political world order, really hard to underwrite that against, like, $10 a month on Substack. And so how how are you thinking about, like, the the long term monetization summary, like like like forces that allow for, like, long time horizon work. Is that solved?
Speaker 1:Is there is there a good pattern there yet?
Speaker 7:I have a very strong and clear answer to this after a tremendous amount of experimentation and also this kind of prolonged engagement with the history of independent scholars. I believe the answer to your question, John, is you need to stage one is you have to get out there and you have to you have to write a lot in stage one. So you're not you don't necessarily have to be chasing clicks or playing the the the engagement baiting game or whatever, but you do have to get out there. And inevitably, there's going to be some kind of volume game where, like, you have to get in the mix. But I don't think you have to do that actually for too long because if you can just get out on places like x Yeah.
Speaker 7:And have some kind of blog or newsletter and just or or videos or whatever your medium is is. If you can get out there and just put out interesting stuff that's intelligent and thoughtful and build even a small audience, nothing that you would be able to live on. But if you could just do that stage one of showing that you understand content, that you have real ideas, that you are really interesting and and worth listening to, and that you can execute on a basic kind of, you know, modern content operation. If you can do that for even a little bit, what you then do, stage two, is you get exposure to tech companies. That's really the missing link that people have not fully figured out.
Speaker 7:A lot of people have sort of accidentally figured this out. But the the fact is that you know Silicon Valley and technology is obviously the engine of all kind of radical wealth creation moving forward. And these companies need really educated, thoughtful, creative people who understand how to read real books and how to write really high quality copy and and write thoughtful essays. This whole new world of sort of high brow thought leadership is incredibly valuable to almost every company today. And the fact is it's incredibly hard to hire for.
Speaker 7:Yeah. Tech companies, you know, really struggle to find sort of PhD tier intelligence for hire and and who also have any kind of understanding or or experience with actually running modern content operations online. And so what I have found and and this I think is really the the ticket is that if you can just simply prove that you know what you're doing on online with content and you can build any kind of audience and just put out stuff that's worth reading that someone smart could look at and be like, this person's smart. He might not have a million followers, might not have many followers at all, but clearly he publishes consistently. He's smart.
Speaker 7:He's got alpha. It's I think actually increasingly easy to find some sort of creative position with a startup or tech company of some kind and that's gonna be your ticket to actual sustainable wealth and income on which you can then do the really long form thought leadership. I've seen
Speaker 2:enough Use use like consulting fees from from a tech company to bootstrap like a independent media platform.
Speaker 7:Absolutely. And maybe some people don't wanna build their own platform necessarily like someone like Seymour Horsch or these kind of older guys like, often they don't wanna build a business. Right? They don't wanna a whole thing. And and for them, that's kind of a non starter.
Speaker 7:But if you can get some if you can get any if you can finagle some kind of situation where you're adding value to, you know, a growing tech company or or even just a funded startup for a couple years, even if they fail, Like, you can, drive real value that they have a hard time hiring for. And in an ideal world, the company wins, and then you really have, you know, economic security, to do your intellectual work over the long term. But even if even if you have to hustle this way for for for for a few years in different projects, you can get a very decent paycheck adding real value in a way that is actually quite conducive to to your intellectual, you know, orientation and goals and and lifestyle that you're building. So you don't necessarily need to build a company or a big media operation. But on that economic basis, you can definitely grow your audience in that time.
Speaker 7:You can write, you know, a really heavy hitting long form essay once every month or two months or three months or whatever the case might be. And in this way and you know, you start publishing your own books. And there there's so there's so many different ways to to monetize. But the the the tech partnership I think is the big opportunity that that a lot of people are sleeping on. People have done it.
Speaker 7:There are enough examples in addition to me to make me feel like this is obviously the future. But people haven't really systematized it yet or kind of like written down a reproducible playbook yet.
Speaker 1:Wait. Wait. Wait. Maybe it was I don't wanna get the person's name wrong, but there was someone who did, like, a philosopher in residence at a venture capital firm. And there's been a few people who have, maybe partnered with, like, Stripe Press in one way or another and Yep.
Speaker 1:Kind of, like, pulled forward some income in various ways. There's definitely, yeah, different ways to, like, slice it. But I think you're I think you're right that there's just, like, there's a pool of capital over there. And if you're able to, yeah, provide some interesting service.
Speaker 2:I I hadn't thought Basically, if you wanna be an independent scholar, get ready to hustle.
Speaker 1:Kind of. Yeah.
Speaker 7:Well, but look, it's a hustle to get a job as a professor. It's a really bad hustle. It's it's absolutely grinding competition that is as brutal and as intellectually exhausting and suffocating as grinding on a startup for a few years, honestly. The only difference is you don't get paid very much at all and also there's no upside. So I mean, when you when you compare working for a startup or, you know, being creative and hustling with different kinds of creative positions in in in tech startups, you compare that to what it takes to get a full time tenured position in academia.
Speaker 7:It's actually like more liberating and mentally kind of, freeing and and and more conducive to a kind of creative intellectual life, I
Speaker 2:had lunch with an academic a couple months ago and he was like, yeah, I'm I'm having a kid in like six months. And I was like, go get a job at a lab right now. And he actually did. He got
Speaker 1:Oh, he did? Yeah.
Speaker 2:No way. That's awesome. And, you know, again, I I think he'll be able to probably do more interesting work at the frontier with more resources. And I I guess, is part of this, like, sad that like, what's the downside here that the techno capital institutions are going to end up financing, you know Academia. Scholarly research in academia.
Speaker 2:Like, is there is it is it basically Lindy? Like, this has been happening for, like, hundreds and hundreds of years and this is, not so different? Is that kinda what you're getting at with the book?
Speaker 7:Yeah. Exactly. It's not sad. I mean, contemporary academia is very sad living a life as a kind of cloistered professor. Today is incredibly sad.
Speaker 7:I can tell you from from firsthand experience. And what we're talking about here with sort of the the the new breed of independent scholars joining forces with Silicon Valley, it's it is clearly part and parcel with a long running continuous history because when you look at some of the most interesting and impactful thinkers and philosophers and creatives throughout all history, what what you find with many of them is that they lived on the margins of institutions, both economically but also socially. And in in multiple cases, what they're what's really going on is they're look is they're they're looking for any kind of unexploited economic niche where they can just make some money in a way that is maximally conducive to a certain state of mind and and a certain kind of lifestyle. And they are, you know, really kind of opportunistic. Like, they'll they'll you know, Spinoza was famously a lens grinder.
Speaker 7:Right? Mhmm. This is at a time when being a lens grinder was it's not as manual as it sounds. He was a kind of scientific and technical expert of optics. And to to to grind lenses was actually an interesting kind of philosophically and scientifically sophisticated industry.
Speaker 7:But he also involved manual labor and he sold his lenses to leading scientists of the era. And that's actually how he networked with some of the brightest lights in Europe European science and and philosophy. That's how he got on people's radar, and that's how he earned their respect actually is from the quality of his of his lenses that he was grinding. And and this is this is in my book. And so Samuel Johnson is another interesting example.
Speaker 7:He's a case study in in the book. Samuel Johnson, people don't know this, in the early eighteenth century, he basically in kind of invented the substack model. And this was before there was even email. I kid you not. So, he did paid subscription newsletters by print, well before email, obviously.
Speaker 7:And he would just write essays, twice a week, and he would walk them to the printer's office and where the mail goes out or whatever, and he would send them off twice a week, by post. And, and he made a he made a living doing this for for quite a few years. He was at the end of the patronage era, so he was one of he was well known in elite circles as one of the most brilliant genius thinkers and writers and conversationalists of the time, and he never got a patron. He he never got the bag. He was always forced to hustle.
Speaker 7:He was always doing creative things, and that was one of them. And, he managed he managed to do it and, you know, ended up changing the English language in in many ways, one of the most, you know, impactful, kind of scholars of his lifetime. And so to answer your question, Silicon Valley and tech startups today are just the current manifestation of this. Like Mhmm. Independent scholars always have to look where is the money, where is the opportunity, where can I use my brainpower in the way that is, maximally adding value, but also maximally conducive to me having freedom and time and and being able to think clearly and provocatively?
Speaker 7:And it's obvious now Mhmm. If you when you look at this that in in in The United States perhaps in the West more broadly, Silicon Valley is now the site of that.
Speaker 1:Why do you think Silicon Valley is obsessed with Nick Land?
Speaker 7:There's still a tremendous amount of alpha there that people have not fully been able to grok because it's, you know, it it is dense and and a little bit difficult to read. Yeah. But that's the reason is because there's real alpha there and people know it and no one really has the time or the patience to kind of work through it. But they know the alpha is there and that's why they're all obsessed with
Speaker 6:it.
Speaker 1:What is the nature of the alpha? Just investing theses or like lifestyle? How you live your life or predicting the future and what the shape of the political economy will be?
Speaker 7:I would say, I mean, there there are many specific things you could look at. If you look at his writing on AI back in the nineties, it's incredibly prescient and much more so than even even you compare Nick Land's early writings to someone like Nick Bostrom writing about AI much more recently. And now a lot of Nick Land's texts actually match reality much more, I I would say. But the the reason so so you could you could double click on many sort of specific ideas, I guess. But the the high level answer to your question, John, is that there is this kind of ideological problem in Silicon Valley, across the board.
Speaker 7:I mean, the the big intellectual problem with Silicon Valley is that everyone is a back patter. Everyone is mutually invested in each other, So everyone is back patting everyone else. I mean, structurally. Right? I'm not even not not throwing shade at any individual, but just literally everyone is invested in each other.
Speaker 7:And so pretty much all public content that you see is you know, it's someone speaking their book and and that's fine and that's America and that's cool. Like that's that's the world that we live in. But there is just a big sort of one big drawback to that which is that people are too like pro social is the way that I would put it. In Silicon Valley, you know, no one wants to be, you know, anti human or anti social. Right?
Speaker 7:Because it it it's not it doesn't sound very nice. It sounds a little scary. Maybe you don't want to invest in that.
Speaker 2:We this had this morning as a team. John, Tyler and I were sitting around. We had a we had a post that will not be posted that was like genuinely had us all in tears. But there's one group that would be, you know, taking the the brunt of the joke. And we like them.
Speaker 2:We're friendly with them. And we just wasn't it wasn't something we were gonna share. And so, yeah, there's this pressure to be pressure to be social, which in some ways is healthy, like in some ways that stems from like, this is a culture that somebody can move to San Francisco and be a nobody and in two years be an icon. And that is like, that's positive, but it also means that the the culture is like, I'm not gonna do anything antisocial here because two years from now, this person might I might be trying to lead their round. Right?
Speaker 2:And so
Speaker 7:Exactly. And so the issue with technological acceleration is that it is a brutal kind of machinic global process that's been happening for hundreds of years and we know a lot about it. And a lot of it does not look very pretty for a lot of humans. Not all humans, but but for a lot of humans. And so when you really try to model this really rigorously without any kind of pro social biases and without any of the kinda, you know, human ideological filters that frankly most Silicon Valley players are forced to kind of lay over their thinking and their publishing.
Speaker 7:You like you you you see like there no no one in Silicon Valley really is able to talk frankly about kind of the the underlying brutality and the the really kind of scary structural elements to involve with capital acceleration. But Nick Land does that in a very aggressive way. And that's that's the source of the alpha basically.
Speaker 2:Well, Dar I mean, Dario's hasn't been I mean, I'm sure that the anthropic comms team, freaks out every time he goes and gives a talk and says, you know, 80% of or whatever the statistic he's saying, it's some some large percentage of white collar work is gonna disappear. Then they kinda like walk it back a little bit. But clearly Yeah. Like the message is being received.
Speaker 7:Well, but notice notice that whenever you do hear some Silicon Valley thought leader or big player come out and say something that's kind of antisocial or bad or scary, there's always kind of immediately behind it the solution that they're providing that will make it all okay. You know what I mean? So so the the thing with Nick Land is you've got a model you've got a really hardcore, I think, very rigorous model of of modernity and capital acceleration, which has no such convenient solution hiding in the background to sell you. And when you look at that, you know, stone cold in the eyes, it's it's it most Silicon Valley people don't wanna hear it. But on the other hand, they know there's alpha there, so they kinda can't look away from it either.
Speaker 1:In Yeah. Desire, there's this concept of, like, artificial intelligence being this time traveling force, an invasion from the future. As a human, that makes me feel like I wanna fight it. Is that the right desire? Is that the human desire to counter the machinic desire?
Speaker 7:So Lan does introduce this site. Well, doesn't introduce it, but he very much plays up this mental model that you get from the term Terminator movies Yep. That, yes, capital is this kind of time traveling entity that comes back and not only kind of composes itself from us, but just as the Terminator movie suggests, comes back and and kind of composes itself out of enemy resources. So so there is in that kind of model an implicit kind of antagonistic structure. But I'm not so convinced of that frankly.
Speaker 7:I think the fact is that capital acceleration will be quite brutal for some people, for for many people. I mean, it clearly shreds apart sort of modernity and techno technology shred apart traditional values and morals. I mean, even Marx knew that. I mean, Marx perhaps knew that better than anyone. That has been clear that has been clear for a very long time.
Speaker 7:And whatever the errors of Marx were and and the terrible kind of, you know, tragedies that came downstream of of his ideas, you know, the the critics of capitalism in the early modern period like were structurally on something. Okay? And there's no doubt about that. I mean, it it it it absolutely shreds any vestige of any kind of traditional morality basically. And and that is sociologically true beyond the question in in my opinion.
Speaker 7:And so play that forward, play that forward. It's it's gonna be ugly for a lot of people I think. But I think all we can do really is try to basically try to stay one step ahead, be honest and rigorous and aggressive, and take the risks necessary to bet on the truth. And try to just stay ahead of the machines and try to take with you all of your friends and family and everyone in your tribe. There's really no other no other solution.
Speaker 7:And I think personally that it actually goes in a more positive direction than some of Nick Land suggest you know, text seem to suggest. I think it's actually it actually matches much more clearly to something like the city of God by Saint Augustine where, you know, basically, the the the good people and the bad people increasingly kind of diverge over time. So technological acceleration kind of pulls these people apart. What he calls the city of God on the one hand and the city of man on the other. What what technology really does is it accentuates the differences between people who are oriented to heaven and the truth and the good and people who are oriented towards anything else.
Speaker 7:So if you're oriented towards anything else, you're you're you're gonna go down fast. You're gonna get wrecked, I think, and increasingly fast.
Speaker 1:You're chopping
Speaker 7:technological acceleration.
Speaker 2:You're chopping Where where how do you summarize the current discourse? Because, I would loosely group it into general fear among the broader white collar class and potentially even blue collar because you have, you know, everybody you know, people outside of tech are worried about automation and losing their jobs. And sounds like you think that's a very, maybe the correct concern to have. Inside of tech is kind of like bifurcated into people that are thinking like, okay, OpenAI just is starting to look more and more like Facebook every single day. They have Sora.
Speaker 2:They're gonna introduce ads. They're introducing commerce. This just looks like a big tech company. And then you have people at labs that just believe, like, you know, just wait, like, you know, just one more training run, bro. AGI is right around the corner.
Speaker 2:But it's hard to, like, actually read too much into what they're saying because they obviously have, you know, tens of millions to hundreds of millions to billions of dollars of like, you know, equity tied up in in these narratives that are kind of dependent on on those scenarios playing out to some degree. But how would you kind of summarize it, and where do you think it is like even a year from today?
Speaker 7:Yeah. So again, I think a lot of these categories that people use to parse this this phenomenon are just totally wrong and they're totally ideological. So for instance, the jobs story. Like, that's all people can come up with to think about the devastating impacts of technological acceleration. We're gonna lose our jobs.
Speaker 7:We're gonna lose our jobs. So it's like everything potentially bad about AI gets shoehorned into this like one topic Yeah. Of like, are people gonna lose their jobs? It's much more complicated and and in some ways worse, but in some ways better. So the better way to think about it is really just that with all technological acceleration, you have to everyone has to hustle harder basically.
Speaker 7:You have to work to stay ahead to succeed. You have to work really really hard and increasingly hard. And, yes, there is more surplus. People are wealthier on average. That is true.
Speaker 7:So, you know, you know, a kind of poor person in America has exposure to like a lot of really nice things that obviously, you know, only kings could have in the So that that story is true. But nonetheless, to actually build a life that is healthy and happy and sustainable, you have to be incredibly smart and sharp and and and judge and making good decisions about a number of different things in all aspects of your lifestyle, and you have to be working super hard, and you have to be dodging this existential threat. Like, nowadays, I mean, think about how much research you have to do on, like, food just to stay healthy. Right? Like, you have to be incredibly smart and sharp, and you have to hustle increasingly hard just to survive the chaos of of of technological acceleration.
Speaker 7:And so AI is just a kind of a further acceleration of that. It's going to get more and more insane. The payoff will be bigger for people who are who are right and who keep their head on on their shoulders. For those people, the payoffs are gonna be bigger and bigger. But for everyone else who can't keep up with this kind of shredder of traditional norms, you do get you do fall behind.
Speaker 7:And and you it's not a matter of losing your job. It's a matter of like your whole family is, you know, opiate addicts because they got one shotted by complex processes that they had no chance of even understanding.
Speaker 1:When does this start? Like, if we take the time travel analogy, do should we start this whole story at '8 1860 when GDP really starts to accelerate? Is that the beginning? Do we go back earlier? Is this latest, like, AI boom anything special?
Speaker 1:Karpathy on Durkash was kind of saying, like, no. Like, this is exactly this is just an extension of computing.
Speaker 7:So this is an interesting research question about how do you really mark that breaking point associated with modernity and technological acceleration.
Speaker 1:Yeah.
Speaker 7:People have very different answers. I think it's it's an interesting kind of empirical debate. I've always kind of been partial to Heidegger's answer. If you read Heidegger's The Question Concerning Technology, he seems to think that the the the key break point was when we started storing energy basically. Like the he says the windmill for instance was fine because the windmill just sits there.
Speaker 7:It nature kind of operates on it and it can create energy and that's he seems to think, it's my reading, is that it's fine. But when we start storing it, when we're putting it in batteries and we're putting it into these different containers, he seems to think, he seems to suggest that that's kind of the breaking point because that's where you can start to sort of run much farther ahead of the future because you can store store these
Speaker 1:things I up. I have a stockpile of coal and I have a steam engine and I can I can build up a like a larger pile of energy and then I can deploy it all in one jolt to jump forward?
Speaker 7:Right. And then the Marxists have this kind of theory that they like to say that it's the enclosure of the commons. So like in the it really starts in in in in England. There were for for for, you know, aeons these traditional norms of anyone could kind of graze on the commons and much of the land was commons. And then at a certain point, there's a specific kind of decision made where where they start enclosing it in order to capitalize on it and privatizing it.
Speaker 7:Some people point to that as the kind of breaking point. Can give you can give many examples and and people kinda debate that. I think it's sort of it it's sort of very hard to answer conclusively, but those are some those are some possible answers that I think are interesting.
Speaker 2:Do you think Yeah. Do you think the escape of the permanent underclass meme is actually healthy then? Because it's basically is encouraging people to like, you know, sharpen up, avoid the avoid the the pressure to just quit your job and and gamble on meme coins, like avoid, you know, becoming immersed in completely
Speaker 1:take different on this, and I want your reaction too is, I feel like the future things playing out in the, like, kind of the darker scenarios. Like, there's a massive underclass, but there's no permanence whatsoever. And on any day to day basis, somebody could go a thousand x up and become extremely wealthy, and then everything collapse and go back down to the underclass. And I feel like the volatility is actually increasing way higher, and we're actually getting more underclass but also less permanence. But what's your take on the permanent underclass meme?
Speaker 7:So that meme, actually think, is a rare good one that is directionally correct in an important way. And that actually gets more to the heart of the the threat and and the brutality of of of tech technomic acceleration much more so than the jobs meme. Mhmm. That is the kind of anxiety that is the general diffuse anxiety and fear that everyone feels and is right to feel. You're you are forced to feel that with with capital acceleration and its current inflection with with the AI revolution.
Speaker 7:So I think that's basically that that is spot on in terms of the the generalized
Speaker 2:you know, kind of
Speaker 7:threat and problem.
Speaker 2:It feels like durable because everyone feels it. And it it feels like yeah. Like you're saying, like, it's somewhat real. Right? It's like the techno capital acceleration.
Speaker 2:People feel it. They realize that making the $20,000,000 in three years is a lot better than making the $20,000,000 in twenty five years or whatever look like.
Speaker 7:It's worth noting that it's kind of self enforcing as well because if that's a meme and you know other people feel that way, then you really have to trust it and you better get after it because even if you think it's false in stage one, right, if you think other people are buying into it, you think, okay, everyone else is gonna be hustling harder. They're gonna be getting the bag. And shoot, even though I thought this was false, now they're all getting it. I I better get after it or I'm gonna get crushed and left behind. And so yeah.
Speaker 7:Mean, what a lot of people say is that capitalism produces so much surplus that you could just choose to not participate in the rat race and just enjoy enjoy the surplus. But that's not totally true because the things that we really want in life and and that really matter to us are are are often relative. Things like recognition and identity and standing standing in a community. These things are relative. And so it doesn't really help that much that you can have a big screen TV for really cheap.
Speaker 7:You can have many other Yeah.
Speaker 2:It's clear like everyone will be entertained in the future. Will not be elite to be entertained. Like, you're gonna be entertained, you're gonna have the screen, you're be able to put on the headset, you're gonna be able to take
Speaker 1:For sure.
Speaker 2:Any range of telemedicine drugs to make you feel anything. You will be entertained. You'll maybe have a one in a ten thousand chance every week to like escape or whatever. But I do think it's notable that we transition from a pull yourself up by your bootstraps culture, which was like, if you just do anything in America in the in the early nineteenth century, you can get a house, you can, you know, can live kind of you can you can pull yourself up by the bootstraps to live the American dream, and now the American dream is on the other side of escaping the permanent under underclass. At least the American dream that you were sold as a kid of having a home in a desirable area and sending your kids to college and Yeah.
Speaker 2:The American dream
Speaker 1:was the middle class. It was the default.
Speaker 7:Right. I mean, frankly, I think the big antidote to all of this, the the other pole of this entire problem that we're talking about is, of course, crypto, I I believe. I mean, in in so many ways, it's sort of diametrically kind of opposed to AI or it's like perfectly poised to be kind of the the the the solution to a lot of this. Because one way to understand technological acceleration is the especially in kind of human societies with all of the faulty human wetware that we have is that it becomes this like big lying game. Like everything gets inflated.
Speaker 7:Like the, you know, the money supply is is really just kind of a metaphor for many other things where there's a ton of inflation. Right? Like verbal inflation, you know, credential inflation. In a way like modernity is this mad race to kind of inflate all kinds of things. And we we get ahead of our skis in many ways.
Speaker 7:And that's why people have to that's why it's so cutthroat because other people are inflating. So you have to inflate or you die. And so like human society and modernity is totally torn asunder from all of its traditional values and traditional, you know, anchorings. Everyone is competing in this mad materialistic race to stay afloat, is memetic. And even if you don't wanna do it, you kinda have to do it.
Speaker 7:Meanwhile, crypto is this kind I mean, cryptographic protocols are truth machines, basically. They kind of restore integrity and kind of like primordial almost physical truths to this kind of chaotic constantly inflating kind of material modern world. And so my mental model is very much that the reason you're seeing the reason the early stages of crypto have been so chaotic and crazy with, you know, so many stories of big crashes and crimes and so many kind of scammers and and con the reason it's so crazy like that is because people intuitively understand that this crypto stuff, like, is the next big vector through which, like, humanity will be able to secure its future. And so people are the people who rush into that first are a wild grab bag of of sketchy people, I think. But it's going to be the thing that, like it it's gonna be the only thing that puts, kind of grounding on all of modern chaos.
Speaker 7:And you see this like that's what Bitcoin does. Right? The Bitcoin is, like, literally just regrounds money and, like, physical physical resource, kind of anchoring.
Speaker 2:One one suggestion, crazy idea for you before you jump and then we'll
Speaker 1:have to We've been really fun. Thank you so much for helping.
Speaker 2:Instead of a book, how about you buy a Lambo and you sell a course? I will teach you to
Speaker 1:escape I've paid for his He has a course.
Speaker 2:Escape the permanent underclass by becoming an independent scholar.
Speaker 1:I mean You could be the Andrew
Speaker 2:Tate of of independent scholars.
Speaker 7:That's one option, but I don't think so, man. That that's knock chain. That's the role of knock chain. We say escape the leveling process. I don't think you should worry about escape.
Speaker 7:Don't I don't like I don't like the phrase, you know, escape the permanent underclass because it it's much it's much more general. You have to escape the leveling process. There is a long running gradual historical gradient that is trying to sort of destroy everything of traditional value. Everything that is permanent and timeless is getting sort of eroded or hidden and and kind of taken away from you. And like you you wanna escape the leveling process.
Speaker 7:And that's why we're building blockchain. That's what it's all about. Escape the leveling process.
Speaker 1:That's very cool. Well, thank you so This was super fun. It was a great conversation. We'd love to have you back on and go deeper. Ever everyone really enjoyed this.
Speaker 1:But thank you so much for hopping on. We'll talk
Speaker 7:you soon.
Speaker 1:We'll talk to you soon. We have our next guest in the restroom waiting room. But first, let me tell you about fin dot ai, the number one AI agent for customer service. Number one in performance benchmarks. Number one in competitive bake offs.
Speaker 1:Number one ranking on g two. Let's bring in our guest from the restream Let's do it. Waiting room.
Speaker 2:Darren, what's going on?
Speaker 6:What's up? How are we?
Speaker 1:Second time on the show. Thank you so much for on. I'll let you take this.
Speaker 2:Sweet. Great to have you back. What's happening in your world? Here you've been you've been flipping flipping pretty hard. So break it down for us.
Speaker 6:So this weekend, a 1914 Baltimore Babe Ruth, Baltimore News Babe Ruth sold for, $3,000,000 less than the guy bought it, in 2023
Speaker 2:Brutal.
Speaker 6:Making it the biggest card loss of all time.
Speaker 2:No way. Now I thought they I thought they only went up.
Speaker 6:Yes. So did Adam Smith never says that. No. Never. So, you know, it's very interesting to me because, I don't like to admit when I don't know something.
Speaker 6:But when this card when I first heard of this card was when Collectible, which was one of those fractional share companies that went bust, when they said they were buying a piece of it, I think it turned out to be, like, a 1% piece
Speaker 2:Okay.
Speaker 6:For a value of $6,000,000. And I had said, I've never heard of the 1914 Baltimore News Babe Ruth. So I did a little research. Newspapers.com is probably the best value that I have. I mean, a $150 a year for all the newspaper stuff.
Speaker 6:I mean, wow. I look for
Speaker 2:That's crazy. I don't actually I'm actually not familiar. This sounds incredible because we're always I mean, we we have a little recurring segment on social. History. I'm sure we could get a bunch of bunch of alpha.
Speaker 6:Oh, you can get now, hopefully, they didn't see this because I've been subscribing for a long time, and they're not too good at business because I would
Speaker 2:because you'd pay, like, 10 x more. Yeah.
Speaker 6:Yeah. Exactly. So anyway, I looked and tried to see when the first mention of the 1914 Baltimore newspaper is, again, because I didn't know, and I think I know everything. Yep. The 2006 Durham Herald Sun.
Speaker 6:That was the first mention, at least on what newspapers and they have a lot of newspapers in there. That was the first mention of the 1914 Baltimore news Babe Ruth. So I kind of have this theory that people don't think it was a card.
Speaker 1:Interesting.
Speaker 6:On the back on the back is a schedule. So it's Babe Ruth in the minor leagues the year before his rookie year. It has a schedule of of who they're playing, and it came in a newspaper, and it was a 10 card set. Okay. So one of the reasons one of the reasons why I think this guy lost was because there's only so many people that know this.
Speaker 6:A lot of people buy cards and big cards so that they can say they have the big card. And when someone says I have the big card, oh, what card is that? I don't even I've never heard of it. It's a whole lot different to have a T206 Honus Wagner or a 1952 Mickey Mantle than to have the 1914 Baltimore News Babe Ruth. Yeah.
Speaker 6:And so I think that's why the guy got it handed to him.
Speaker 2:Okay. And why would do you think the person that just paid 4,000,000 for it knows that it might not be a real card?
Speaker 6:No. I'd like to know who it was that that bought it, but I don't think I'm gonna find that out. Again, it it's a real card by a lot of standards. So after I I looked at the 2,005, 2,007 Durham Sun, I did more research and people had mentioned it in their early eighties. So they've they'd mention it in passing.
Speaker 6:But to me, it doesn't inspire a whole lot of confidence that something that was beginning in 1914 until 1980, no one talks about it. I I'm just not comfortable. I'm not comfortable. So that's my take. Might not be What what is it?
Speaker 6:But it's my take.
Speaker 2:What does it say about do you think other people that own, you know, own some of these, like, flagship cards are a little bit concerned now about the, like, real market value of whatever they're holding? Or is this like a one off, like
Speaker 6:No. The market the market is as hot as ever. Mhmm. I sold 31 things, this weekend on Heritage Auctions.
Speaker 1:Wow.
Speaker 6:And some of the prices that I got were were amazing. Some are are painful in terms of inbound. You know, able to do this. Like, you know, I just, it's hard to sell. It's always hard to sell.
Speaker 6:But, I got some some really awesome prices too. So this is the question is buy
Speaker 5:did you
Speaker 2:buy 31 times two to just even it out?
Speaker 6:Well, you tell the wife you didn't. You say I made so much money. That's how it works. And then, you know, there's a different bank account that then goes out. It's all about trust because in in the end, I'm I mean, I'm married seventeen years.
Speaker 6:It's all about trust.
Speaker 3:It's all about
Speaker 1:trust.
Speaker 6:It's all about we are gonna win anyway. We're doing it for our family.
Speaker 3:Yep.
Speaker 6:So I did buy a massive, massive, massive piece about two weeks ago, and I had to clear some room.
Speaker 2:You had to clear some room. But, yeah, did this is investing. Right? So you just we made a lot of money. We're gonna invest some of it again.
Speaker 2:It's how it goes.
Speaker 1:Talk to me about You
Speaker 6:you have?
Speaker 1:Yeah. Go ahead. Talk to me about Ohtani on the Dodgers because, my family I'm not super into baseball, but I do go to the occasional game. I often get Ohtani bobbleheads.
Speaker 2:I was so confused, by the way. I had a I had a I had a Dodgers hat on, not because I'm a fan of the Dodgers. It's just a green hat and I like New York City. I've always, I've I
Speaker 1:Wait. What?
Speaker 2:I was wearing Green
Speaker 1:New York City?
Speaker 2:They they made a green Dodgers hat.
Speaker 1:Oh, okay.
Speaker 2:So I was wearing a green Dodgers hat and
Speaker 1:And it was for the Brooklyn Dodgers?
Speaker 2:Saturday, so many people were were telling me Yeah. Were yelling baseball things.
Speaker 1:Oh, okay. Okay.
Speaker 2:I'm like, I wear this hat all the time. Why is everyone yelling? And then I found out, from the security in my neighborhood that the World Series was happening. That's how I Yes. The world.
Speaker 2:So we're at a loop here, but we're interest
Speaker 6:we're That that is quite you guys have to pay a little bit
Speaker 1:more attention. We do. Well, no.
Speaker 2:We we're I'm more interested in the mark I'm more interested in the market Yeah. Than the the just alts market in general than the actual game being played.
Speaker 6:Right. For sure.
Speaker 1:Yeah. But my question Otani. Yeah. My question about Otani is that I've been getting bobbleheads when I go to the game, but it feels like there's, the market like, the equilibrium of the market is beating expectations. Right?
Speaker 1:Because if there's really high expectations, a lot of products are produced. Right? And so are where are we on, like, clearing prices around Ohtani? Is he blowing out expectations, and so market prices are rising, or is there a different dynamic dynamic?
Speaker 6:Yeah. Absolutely. Everywhere. So Fanatics has a deal with Ohtani, and they're buying up all the Babe Ruth balls because they wanna have Ohtani sign the Babe Ruth balls and then, you know, sell them. So if you're What
Speaker 2:do you think do think
Speaker 1:about that?
Speaker 2:Is that is that not, like
Speaker 6:I don't want it. I I want now Babe Ruth signed plenty. He signed a tremendous amount. But to me so there's so the the value of Babe Ruth's single sign balls Mhmm. Are going up because they are buying in in the backroom.
Speaker 6:They're buying as many so that they can put a tiny on it. The the bobbleheads I mean, the bobbleheads since 1997. I mean, it's amazing, the life of bobbleheads and the lines of the bobbleheads. The Dodgers did a really good job gamifying it, so you have to gamify it for the degenerates and the youth. Every we live in a degenerate economy.
Speaker 6:Yes. And, so you have to have 10 that are golden and only couple with the that come with the dog and Yep. You know, and then that really kind of, you know, jams up eBay. So the Dodgers have done a good job.
Speaker 1:Bobbleheads Wait. Wait. Why does it jam up eBay? You by by jamming up, you mean just makes it popular?
Speaker 6:Yes. Yeah. Yeah. Got it. Yeah.
Speaker 6:People people people, you know, people really like to go to buy their bobbleheads on on eBay. It's amazing to me that that's been going for for thirty years. Yeah. I'm surprised there's not another thing.
Speaker 1:I mean, the market is so, it's so crazy. I don't know if it's always like this, but when I go to Dodger Stadium and they give me a bobblehead, there will always be someone inside the stadium who paid for a ticket.
Speaker 6:Who offers?
Speaker 1:Who's who offers? And you think about the okay. What is the sunk cost of that ticket? They're not actually watching the game. They're there just to acquire the actual merchandise.
Speaker 1:By the way, I
Speaker 2:gotta jump in. I I I I misspoke. I meant the it was a it's a green Yankee.
Speaker 1:I was about to say. Yeah. Everyone's like, what what are you talking about?
Speaker 2:It was a a Yankee hat.
Speaker 6:Come on anymore if you guys don't know the difference between a Dodgers and a Yankee's logo.
Speaker 1:But I but I
Speaker 2:have both I have both I have a I have a Yankee's hat and a Dodgers hat, and I wear them interchangeably. Okay. And so I just like to confuse people in my neighborhood.
Speaker 1:They don't they don't know Dodgers were in New York at one point. They were in the Brooklyn. But, yeah.
Speaker 6:You you were wearing they they were.
Speaker 1:We've thinking why were people talking to you about the were you Well, no.
Speaker 2:I I just was I just was wearing I was wearing a base a baseball hat.
Speaker 1:Yeah. Yeah.
Speaker 2:And I didn't know it was a World Series, so I didn't know why people kept yelling, like
Speaker 1:Yeah. Yeah.
Speaker 2:Random baseball related things at me. Like, you know, people were just cheering
Speaker 6:for haven't won the World Series since 2009, so you should know that. So we're they're in a in a sixteen year drought right now.
Speaker 1:Okay. Brutal. Okay.
Speaker 2:What, yeah. So why why would this person that just sold for do you think this was a forced seller, like somebody that just had to I get think Otherwise, you would just sit on it?
Speaker 6:I think so. I think so for sure. I mean, I always say that the assets that are in this space are not its, they are what's. And and, you know, if you there's no absolute here. Right?
Speaker 6:It is it is when do you sell it? Yeah. What is what auction house are you selling it? What's the description in the auction house? What's the publicity?
Speaker 6:What's the marketing? These all play. It's like when when someone says to me, hey, I'm gonna invest in Ohtani because he's playing well. Mhmm. I said, this isn't collecting isn't fantasy.
Speaker 6:Mhmm. Collecting isn't fantasy baseball. Collecting is a amalgamation of all the factors
Speaker 3:Yeah.
Speaker 6:That go in.
Speaker 1:Yeah.
Speaker 6:Right? It's it's how many people collect ohtani. What is the worth of the people who collect ohtani? What is their ability when they when it's going down to stay and hold? And if you're a 35 year old man with money and you collect what people who are 16 to 20 collect, you better know because they don't have the wherewithal to hold on if it goes down and then that affects you.
Speaker 6:Yeah. Or you better know if there's a guy who owns 600 of them Because, again, those are the market factors at play. It's not as simple as a game of fantasy.
Speaker 1:Yep. Do you have any insight into what's going on at GameStop? We had the CEO of GameStop, Ryan Cohen, on the show, and he was talking about prize packs or or what was it? Power packs.
Speaker 6:Let me let me this is this is this is this is a fun one.
Speaker 1:Yes.
Speaker 6:So rep repacks
Speaker 1:are
Speaker 6:like the new thing. There are if digital repacks are even crazier. Now people who are watching the show, I'm now gonna blow your mind. Okay. Digital repacks.
Speaker 6:This is how digital repacks work. Mhmm. You open a pack digitally. That card really exists in the company's coffers or vaults. Inventory.
Speaker 6:You open it. You don't like it. So you pay $25 for it, and it's $8 in value. Then they immediately offer, do you wanna exchange it at 80% of the value? And then you're like, okay.
Speaker 6:I'm comparing this to gambling where there it's a zero sum game. If I lose, I'm zero. Yeah. And they're like, wow. I can I can I only lose 20%?
Speaker 6:And so these companies like Courtyard and Arena Club who do these digital by the way, then it goes back into the pack. They could sell the same card 30 times a day. Wow. They show you the
Speaker 2:checklist. Business.
Speaker 6:Show you yeah. The checklist so so Courtyard did 70,000,000 this past month. Yep. They it is it is going nuts. Anyway, GameStop what GameStop has done is it has a relationship with PSA where people can grade their cards.
Speaker 6:And a normal company, and since GameStop is always gonna be, to me, a meme stock
Speaker 1:Yep.
Speaker 6:A normal company would be very worried about taking submissions from from from people holding the card and then sending it to PSA. Right? If this was another company that was a a Fortune 100 company, you would be really scared about the liability of this. But I feel like GameStop has a little bit more flexibility than most. And so they are the biggest player in this in this game, and it is really we've written about it on collect a lot.
Speaker 6:It is really interesting.
Speaker 2:How are how are startups faring in all of this? You have GameStop playing here, Fanatics, a couple that you just mentioned. You have Heritage. I feel like the big the big auction houses have been surprisingly durable against, you know, upsarts coming to their markets if you look at the automotive industry.
Speaker 6:Are Everyone is like like every industry, everyone wants the multiples, so they're all in the tech. Mhmm. You know, that's what they do. Right? They they want the SaaS model.
Speaker 6:That's that's what that's what everyone's after. So, you know, originally, there was card scanning where it told you what the price is. A lot of people were coming out of COVID, and they're like, I have a bucket full of stuff and no one's gonna go through it, so I'm gonna have to scan it. Who's the best scanner? And then we had too many scanners.
Speaker 6:And so there's there's just a you know, there's a lot of information. There's a lot of people fighting. I don't know who the winner is. Fanatics is all over the place. It is probably in terms of monopoly, they are probably the number one monopoly in any business today in terms of having a stronghold on so many things.
Speaker 6:So it makes a
Speaker 2:Do hard you think that'll keep do you think that'll keep just compounding?
Speaker 6:It it depends. It depends, what teams and leagues, whether they you know? I mean, teams and leagues want to take the bag, and they're gonna give the biggest bag. Now if you choose to, you know, build it by yourself, then that's a little bit different. But as of right now, that's that's what we're looking at.
Speaker 6:I mean, some of the parts of the consulting part of my company, it helps teams and leagues and brands get into this and help, you know, build by themselves. But, you know, right now, Fanatics is is is the 2,000,000 pound gorilla. It should be interesting to see what they're gonna do with gambling Yeah. Because, you know, I just think the one and two are FanDuel and DraftKings, and I don't even think it pays to be three given how much the business costs and the the the consumer acquisition.
Speaker 2:Yeah. What about, how how much attention have you been paying markets entering, sports?
Speaker 3:Mean, obviously, they've
Speaker 1:been at
Speaker 2:it they've been at it for a while, but it feels like
Speaker 6:You mean polymarket?
Speaker 2:Polymarket. Calshi. Calshi. It's really really heating up.
Speaker 6:I'm I'm as someone who was in gambling for a long time, I'm shocked that Polymarket and Calshi got to the place that they did. Sure. They always had kind of that, like, work here to peer, but I I I can't believe that, just like PrizePicks, I can't believe that they got to where they did in their valuation because I always thought that the the the lobby of DraftKings and FanDuel and Fanatics and Caesars and the old casinos, I always thought that they were going to win. The tribes. The tribes.
Speaker 6:Yeah. I mean, you know, the Seminole tribe. I thought the lobbies would win, so I'm actually shocked. Always thought that Polymarket and Cauchy would be kind of lower end and never really break through, and that has not proven to be the case.
Speaker 1:What is the secret to Fnatic success? Like, it feels like there was a time when every brand every team and maybe every league had their own kind of merchandising operation. I remember being able to, as a kid, go and buy an NFL jersey. And then at some point, fanatics, like, finagled the ultimate deal and got everyone in the room together. And they
Speaker 6:Well, they came again, they came with the bag of cash.
Speaker 1:Is that what it was? Is he just is he just a value. Founder, just a fantastic deals guy? Just got all the money and
Speaker 6:Well, my Michael Rubin has a Yeah. Know, he had a great he's a he has a great story. Yeah. You know, if you don't know this story, I'll quickly tell it.
Speaker 1:But Please.
Speaker 6:You know, he owned GSI Commerce, which was essentially around the turn of the century, around around 2000. All these companies were saying, oh, we could do a virtual warehouse. We could do our warehouse virtually. And Michael said, I'll do a physical warehouse. I'll get it to you I'll get it to your consumer a day faster.
Speaker 6:And I'll take the risk that 7% of the time, Jeremy Lin is gonna get traded from the Knicks to the Rockets, I'll have 9,000 Jeremy Lin dolls in a Because if I win every business, it doesn't matter if I have waste. All these other guys are not taking any sort of risk. They're just opening a virtual warehouse. And so that was his that was his way to get there, and he got everyone's business. And then eBay bought it from him for $2,300,000,000, and then they said, oh, but, you know, we don't wanna compete with our consumers, so we'll give you the sports business.
Speaker 6:And then he turned Fanatics into a $20,000,000,000 business. So, you know, he he he did he did benefit from getting the he did he he did benefit from getting the the the biggest guys who you know, some of them overvalued the market. Right? He got big SoftBank money, you know, and and and and and that helped because money was money and they took whatever valuation. You know, obviously, they had to write down on a lot of businesses, but he he got the right money and he has the right connections.
Speaker 6:You know? He knows he knows the owners well. He knows he knows everyone so well. And so they feel like it's a it's a good relationship. Makes it really hard to get into the game.
Speaker 2:Do you think, it's it's niche enough that he'll never face, like, anti monopoly pressure?
Speaker 6:If he hasn't now, he won't.
Speaker 1:Last question. I mean, can't Blue Jays or or Dodgers tonight. Who are rooting for?
Speaker 6:I am rooting for the stars to be the stars because that's better for my market. So if Vlad Guerrero and Beau Bichette and Ohtani and all those guys are the stars, that's great. What I don't want is I don't want a no name hitting a home run even though you can say, oh, he's gonna grow his own market.
Speaker 1:Yep.
Speaker 6:The I'm more benefited by the big guys getting bigger. You want to win
Speaker 1:to keep winning. Okay. You wanna let your winners ride. That's right. Thank you for all the context.
Speaker 1:I feel like
Speaker 6:I truly on your show. You guys are very you guys are very curious.
Speaker 1:This is very fun. I I really learn a lot. Thank you so much for coming on this. It's really really
Speaker 2:great. Let's do it again soon.
Speaker 1:We'll talk to you soon. Have a
Speaker 2:great day.
Speaker 1:I clearly need to learn a lot more about sports. I've been spending too much time learning about CRMs. I've been learning about Adio, customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next level. Jordy, do
Speaker 2:want is hilariously ironic that we always we always make jokes about not knowing about sports. And then, of course, I try to talk about sports and really mix up a team. But
Speaker 1:Our next guest is Guillermo Rao from Vercel. Welcome to the TVPN Ultra Dumb. Guillermo, how are you doing? Do you know about sports? I know you know Counter Strike.
Speaker 1:Do you know sports?
Speaker 4:I know a lot about Counter Strike. I know some about soccer being from Argentina.
Speaker 7:Okay. Right?
Speaker 4:Yeah. Baseline. And jujitsu. And jujitsu. Jujitsu.
Speaker 4:So I know as much as one class, but I'm ready.
Speaker 2:Okay. But But Did you get brutally injured in the first class? Because No.
Speaker 4:I brutally overcame because I boxed for many years.
Speaker 2:Oh, okay.
Speaker 4:So I had some baseline fighting me.
Speaker 2:I I I I got into jujitsu briefly and it's like so it's incredible workout. It's so fun. It's like perfectly competitive and skill based. Yeah. You know, you can like clearly level up.
Speaker 2:And And then I just saw that, like, every guy in the gym that was over 40 that had been doing it for, like, twenty years would just be, like, hobbling in, you know, all these different injuries. And I got I got I got a little scared around, you know, destroying all of my joints. But Yeah. But I guess if you're in the right gym, it's probably better for longevity.
Speaker 4:Yeah. We're working down the tech CEO checklist, you know?
Speaker 1:I love it. Yeah.
Speaker 4:AI, jujitsu, more to come.
Speaker 1:Well, we missed you a week ago. We've been bopping around. But, give us the latest news in Vercel world. What's latest on your side?
Speaker 4:Well, I mean, the big one is our funding at 9,300,000,000 valuation.
Speaker 3:At 300.
Speaker 1:It's had that. It's awesome. Congratulations.
Speaker 2:Insane. To miss a gong. Insane. Oh, yes. 300,000,000
Speaker 4:in primary, 300,000,000 secondary led
Speaker 2:by I don't
Speaker 1:know if you can hear, but this is a good omen. The gong is still ringing.
Speaker 2:Still ringing.
Speaker 1:Still ringing a little bit.
Speaker 4:Did it ever stop?
Speaker 2:It never stopped. It might never stop.
Speaker 1:Yeah. Yeah. You might be back here with the series g before it stops ringing, hopefully. What's the, what what do you what what are you actually capital constrained on? Is it just hire more people, build a better product?
Speaker 1:Are you actually, like, a big consumer of AI data factories, token factories? Are you spending a lot on inference right now?
Speaker 2:Well, clearly not too capital constrained because half of it was secondary.
Speaker 4:Yeah. So chapter one of Vercel was providing the developer experience to developers to build pages. Yeah. I mean, I'm I'm being overly simplistic. Right?
Speaker 4:But the world is going from pages to agents. Yeah. So it's not that the web services of the Internet are gonna be irrelevant. Mhmm.
Speaker 8:But if you
Speaker 4:think about the cloud, the cloud was born with Amazon Web Services. The next chapter of the Internet is gonna be AI services. So Vercel is building the AI cloud, and we felt and obviously, investors felt this way too, that this is worth, you know, a very, very big bet.
Speaker 1:Mhmm.
Speaker 4:Because every type of software will become AI native software, and the new primitive of the cloud will be the agent. Mhmm. And and this requires new services. It requires new frameworks. Something that developer developers and investors are really excited about is our AI SDK.
Speaker 4:Mhmm. You can think of a of it as the React of AI. So the most popular package for developers to use to build AI agents, and it's growing basically vertically. Like, never like, something we've never seen before at Vercel, and we've been doing open source for a long time.
Speaker 1:Is that driven by new new ideas, new companies, startups that are coming up. And instead of spinning up just a website or a web app, they're spinning up an actual agent that then That's right. They get new customers for? Is is that That's right. And it's net new customers?
Speaker 4:It's a lot of net new, but also I think a lot of enterprises are gonna be basically leapfrog their classic digital transformation journey
Speaker 3:Sure.
Speaker 4:And just go to agents directly. Yeah. And what this is resulting in is a a whole new set of demands for the cloud that were never there before.
Speaker 1:Mhmm.
Speaker 4:Software is running for a lot longer, which is fascinating from a compute standpoint. Obviously, investors are excited about GPU compute, but now we're seeing all of these new types of software that are just running, like, thinking and and and producing, obviously, demanding tokens, but running for minutes, hours, days. We call these workflows. Yeah. And so we hosted our Vercel ship AI conference the other day, and we basically came, with an actual definition of what an agent is.
Speaker 4:And a and agents basically remind us a lot of the old types of software that people were excited about maybe maybe decades ago, which is like this workflows and business processes that, you know, look like nodes connected in a graph and have all of these steps. It turns out that kind of software, which we'll now call agent, is actually kinda hard for developers to write, especially the ones that were, you know, used to creating, the typical SaaS type of software. So Vercel is sort of becoming the default place where this new kind of agentic workflow is born.
Speaker 1:How are you thinking about hardware or your own cloud, your own physical infrastructure? It feels like that was crazy to talk about five years ago, but now there's there are neo clouds. There I I know I know people who have just stood up whole data centers. And so if you came to me and said, yeah. As part of this fundraising round, we're also gonna spin up a couple different data centers, and we're gonna be on our own infrastructure in a few years, be like, yeah.
Speaker 1:That doesn't sound crazy to me at all. But how are you thinking about it?
Speaker 4:Well, Vercel is in this incredibly unique position that developers come to us because of the developer experience.
Speaker 1:Sure.
Speaker 4:We can actually automatically make the best infrastructure decisions on their behalf.
Speaker 1:Okay.
Speaker 4:And today, that's sitting on top of the hyperscalers So
Speaker 1:you multi
Speaker 6:cloud. Flexibility.
Speaker 4:Yeah. So for example, a couple of years ago, you could have made the wrong hardware decision. Mhmm. Because you were gonna say, well, all my CPU workloads are gonna be like short burst
Speaker 1:Oh, sure.
Speaker 4:Really immediate, CPU bound Yep. Rendering based. Well, it turns out that a lot of the new workloads are agents.
Speaker 1:Mhmm.
Speaker 4:They're spending a lot of time thinking. So you need new kinds of computing, new kinds of software infrastructure to support these workloads. And I believe that the hyperscaler clouds still give us the most flexibility there. Also, keep in mind that a lot a lot of these agents need to be in close proximity to the enterprise data.
Speaker 1:Yeah.
Speaker 4:So, yeah, the neo clouds are exciting, but it kinda wanna be in the cloud Yep. From a security perspective, regulatory, and also latency. I do think there is something to the cloud that is a bit of a rich get richer scenario when it comes to latency. Because you need to fetch data. You need to do RAG.
Speaker 4:You need to get actual context into the models.
Speaker 2:Yeah.
Speaker 4:And every millisecond of latency that you waste there is actually very, very costly. So on one hand, you know, proximity to the cloud and being in the cloud gives us a great advantage. On the other hand, because we offer services like our AI gateway, we also make them compete fanatically. So at Next. Js Conf, we, we announced the Next.
Speaker 4:Js evals, which is basically what I call sort of the, like, oracle of truth Mhmm. Of how good your model is at coding real world workloads with things like Next. Js.
Speaker 1:Here's a
Speaker 4:And so
Speaker 1:Oh, sorry. Yeah.
Speaker 4:I was gonna say our developers really benefit from the fact that we let them choose.
Speaker 1:Yeah.
Speaker 4:They're not bound to specific model.
Speaker 1:How are you thinking about integrations with consumer AI apps? I feel like there's a world where I go to Gemini or I go to ChatGPT, and I am iterating through a prompt and kind of laying out the let's say I wanna make a landing page for a new start. And I'm and I've kind of figured out the value props and the customer testimonials and how I'm gonna wireframe everything out. And then Yep. I I want to actually deploy it right now.
Speaker 1:I don't think I can do that within any of the consumer grade chat apps. They're gonna kick me over and say, hey. Go set up this account. But there's a world where that doesn't need to happen, but it's a delicate balance because you don't want them to be like, now we're on top of you and fully. And so how are you thinking about, like, onboarding, like, almost like prosumer creators?
Speaker 4:Yeah. So on my blog, I drew these parallels between the Cloud one point o and the AI Cloud. Yeah. And so you have, you know, the the child poster child of of frameworks with React and Next. Js.
Speaker 4:Now it's gonna be the AI SDK. Yeah. Before, we had CDN for delivering pages and images. Now we have the CDN of tokens, the AI gateway. Mhmm.
Speaker 4:And one of the other big transitions that's gonna happen is protocol. So we we're going from HTP to things like MCB. Mhmm. MCB is really exciting because if you looked at how ChatGPT is now allowing you to embed apps inside of ChatGPT, that also just came out a couple weeks ago, I went to Next. Js.
Speaker 4:I was able to deploy Doom inside of ChatGPT. Why? Because we have an MCP integration that allows our customers to embed themselves inside of ChatGPT. This is really exciting. If this takes off Yeah.
Speaker 4:This will be the world that you just described.
Speaker 2:But can open an app.
Speaker 1:Yeah. Does does OpenAI have, like, a review process for that? Because I haven't just, like, run into the I I do run into those, like, hydrated UI elements every once in while. If I'm asking for, like, movie reviews, it'll show me some pictures or, like, links baked in. But it's all kind of, like, pre baked UI.
Speaker 2:Yeah. You need to be working on creating your own Studio Ghibli moment around that.
Speaker 1:Yeah. Because, yeah, this feels really, really big.
Speaker 2:You like this. Right there.
Speaker 1:So yeah. Yeah. Yeah. Tell me a bit more about, like, how this actually rolls out.
Speaker 4:Yeah. So on a vertical level, it's MCP. So as long as you have something like Vercel, you deploy your thing, you can speak MCP, you're embedded into ChatGPT. Mhmm. I deployed my app in developer mode Okay.
Speaker 4:Which means, like, the lady who basically embed everything. Yep. It's gonna be a little bit like an Apple App store where you're gonna have to get approved. But it's it seems like, you know, that the their guidelines are pretty open, so I think a lot of it will fly. And to your point, this allows ejection points from ChatGPT into other kinds of platforms.
Speaker 1:Yep.
Speaker 4:So you could imagine one where if you start up cooking up an idea, it recommends v zero because Vercel registered an application with them Mhmm. And this is the right application to for prototyping and vibe coding. Mhmm. In fact, the other day, while while I was in developer mode, it started recommending things to me. So I I guess some of the early adopters of their apps platform.
Speaker 4:I believe MCP will continue to enable this sort of, like, agent to agent communication. This is already very big when you're coding with agents because in order to you know, for example a good example would be Figma converted to a v zero so they can convert from Figma to Next. Js app. That's gonna speak to the MCP protocol. Yeah.
Speaker 4:So I think for as far as the AI cloud goes, enterprises will be wrestling with these questions. Right? Like, the the most common question I get is, how do I not get this intermediated by Google AI overviews? Right? So which is sort of summarizing all of the results of the search pages, and how do I not get this intermediated by ChatGPT, and I think they're really good answers.
Speaker 2:Mhmm. How do you think about M and A? You don't have to talk about M and A interest in Vercel because I'm sure you're turning down, stuff all the time. But how are you thinking about, you know, M and A in terms of expanding and and building on on the existing platform?
Speaker 4:Yeah. There were so many, investments being put into the AI categories. Right? And, vertical agents, coding agents, IDEs, things like this. I think, you know, there's gonna be more consolidation in the coming months and years.
Speaker 4:There's, like, ten, twenty different options for anything you can conceive AI related, AI for QA, AI for testing, AI for this. So I think it creates a lot of opportunities for Vercel, which is a very broad platform with lots of users to sort of make some strategic m and a. But I'm even more excited about our marketplace. So we announced at Vercel, ship.ai, our marketplace for one click install of AI agents and AI infrastructure services. So I mentioned, if you're gonna sit down and create your own agent, it's very likely you're gonna need some services that Vercel doesn't offer.
Speaker 4:One example is browsers on demand.
Speaker 3:Mhmm.
Speaker 4:I think you guys have had a couple, browser CEOs Yep. Here on
Speaker 7:the show.
Speaker 4:And, so Vercel doesn't offer browsers as a service built in, but now we offer it one click through the marketplace.
Speaker 1:Sure.
Speaker 4:Another example is security audits that AI agents can help with. One click install sis services like Corridor. Because Vercel contains the deployment URL and we have access to the code and we have access to the production data, it gives us a very special place so that we can grow a massive ecosystem of agents that automate the cloud. Mhmm. We're gonna create some of those agents.
Speaker 4:We might acquire a few. But overall, I'm very excited about becoming sort of the nexus where all of the agents are collaborating together, so they take the burden off of maintaining the cloud. We also the the outage the other day with US East one, the Internet melted down. You know, all of those pagers or mattresses were waking up people. Mhmm.
Speaker 4:Our vision for the future of the cloud is that they wake up agents. Sure. The agent has the first pass of, like, oh my god. Anomaly alert. 500 errors.
Speaker 4:Alright. Let's have the Vercel agent do the first pass. But this is also true for, you know, you've vibe coded something, and you want a security engineer review it for you. Well, now that's an agent you you can one click install through the Vercel agent marketplace, which is very, very exciting.
Speaker 1:Yeah. It's awesome. I mean, what an interesting place to be. You can I mean, you're you have so many different pieces of the business? I imagine that a lot of them are are, you know, growing business lines.
Speaker 1:I can imagine, the series f process was a lot of fun Yep. Given given all the boobs. Jordan, anything else?
Speaker 2:No. This is great.
Speaker 1:Great
Speaker 2:to get the update.
Speaker 1:Yeah. Thanks so much for hopping on. Have a great rest of your week. We'll talk to you soon, Guillermo.
Speaker 2:Cheers. See you.
Speaker 1:Bye. He mentioned eight sleep. Let's talk about our sleep scores. How'd you sleep?
Speaker 2:We need to Go to eight sleep. We need to talk to Matteo, and I I don't want this I don't want the the John handicap.
Speaker 1:You have you have a conspiracy theory that, like, for some reason, it just gives me better results. I got a 98 last night. Let's go. Seven hours forty four minutes.
Speaker 2:Our next 78.
Speaker 1:Our next guest, Brendan from Merkour is in the Restream waiting room. No. He's in the TVP in UltraDome. Welcome to the stream, Brendan. Congratulations.
Speaker 2:$10,000,000,000 man.
Speaker 1:How are you doing? Called his shot. He's the biggest shot caller in all of Silicon Valley.
Speaker 2:Yeah. We gotta get we gotta get some new shots.
Speaker 1:This is like yeah. I was telling him this. I was like,
Speaker 2:I know you need to you guys.
Speaker 1:Call the shot. You're holding up the global economy within five years. Every company is dependent on you. Like, there's no there's no shot this man won't call. But, give us the news.
Speaker 1:Break down exactly what happened. Tell us what is new today.
Speaker 8:Yeah. I mean, the company's been growing like crazy. We're now paying out over 1 and a half million dollars a day to experts in our marketplace.
Speaker 2:Hit the gong for that. There we go. What else? What else?
Speaker 8:We've really start series c of $350,000,000 at a $10,000,000,000 value.
Speaker 2:Massive. No. It's $10,000,000,000 value. Pretty exciting. Yeah.
Speaker 3:Is huge.
Speaker 2:Bad for your first startup.
Speaker 1:The Gong is really going. Something's up with the Gong these days. I don't know if you can hear it, but it's like, it's raining.
Speaker 2:Let's get right in. You had a, I feel like I remember you had a blog. Was it blog post Friday? Do I have that right? It worth is it worth getting into that?
Speaker 8:About the big things?
Speaker 2:Yes. Yeah. The big things. Let's talk about the big things.
Speaker 8:Yeah. It it's really starting with the question of what are the things that we know are going to be the same about our business over the next ten years, and that there's a lot that's gonna change over time. But we know that the three main areas that our customers will always want more improvement and progress are in more candidates on our platform, better matching, and faster delivery of all the candidates that we're hiring for them to improve frontier models. And so those are really Is
Speaker 2:that Bezos inspired?
Speaker 8:It is. Exactly. Yeah. Similar to how Amazon said that their three big things were more products, better prices, faster delivery. For us, it's a little bit different because no two people are the same but, inspired by it very significantly.
Speaker 2:Totally. Let let's go let's go through them, I think. And then, I guess, like, wanna understand like, wanna get kinda more into the into the future too. I think I think people, some people would have a sense that, like, there could just be this, you know, incredible, demand over the next five years? And then, you know, does that demand evolve, evaporate?
Speaker 2:But I I wanna I wanna hear how how you view it, maybe more specifically.
Speaker 8:Totally. What we've been seeing is that there's an enormous trend towards humans training agents how to automate redundant workflows that they would do in their jobs because it's structurally more efficient to do so. Instead of a customer support representative redundantly responding to hundreds of tickets, they create an eval to train an agent one time how to do that thing. Instead of Yeah. A banker redundantly analyzing data rooms, they create an eval to train train an agent how to do that thing.
Speaker 8:And we believe that a huge portion of the broader knowledge work in the economy is going to converge on training agents how to do these activities, and our marketplace is really at that frontier of creating this new job category in training agents.
Speaker 1:How does, how does this look long term if one of the big AI platforms becomes really, really dominant, understands what everyone does and can just ask me to do a task within the app? Like, is there any sort of, like, disintermediation risk, or do you think that what you're building with Merkor is special enough that even if, you know, the OpenAI ChatGPT app can detect that, oh, well, you've talked to me enough. I know you're an investment banker. I'd love to do a RL environment with you. Here's an offer directly to come and do some training data.
Speaker 1:Like, how how are you thinking about counter positioning against that risk, or is that just, like, not a thing at all?
Speaker 8:Well, one of the most important things in building out these environments to train agents is that they need to be very consistently reliable. Mhmm. And that you need to put a lot of work into them Yeah. And if there's noise and that there's some mistakes or issues, then it's very difficult for a model to learn from. And so as a result, it's really difficult to ask your users to say, put in ten hours to helping to see if we made a mistake in preparing this financial model for you.
Speaker 8:Mhmm. And those users might flag a mistake, but that's, you know, incorrect half the time. And so what they instead need to do is build out armies of experts that are able to diligently analyze model performance, go through strict review processes to ensure consistency, and build these RL environments to adopt models for any specific use case.
Speaker 1:So you obviously have massive diversity on the, talent side. But how do you think about customer concentration over the next few years? Do you think that like, there are clearly power law winners in AI. There are trillion dollar labs. You know, Google and OpenAI is half a trillion dollars.
Speaker 1:Like, there's huge winners, and then there's a ton of startups. How do you see the shape of your business? Do you think you'll have a lot of medium sized companies or just tons and tons of small companies? And in every individual company will need to come to you for talent to optimize whatever little thing they're doing, or will you be doing more work with the really, really big labs? How do you think that all shakes out?
Speaker 8:I think it'll be some combination. Definitely, near term, it looks similar to NVIDIA and so far as working with a dozen of the hyperscalers that are investing huge amounts in this. But over time, what we're seeing is that every enterprise wants to train agents to customize their specific workflows.
Speaker 1:Mhmm.
Speaker 8:And we have the expertise to help them do that in building out all of the eval sets and environments that correspond to every workflow in their businesses that they wanna automate.
Speaker 1:Mhmm.
Speaker 2:What any any I I had an eye opening experience yesterday. I have a a friend who's a lawyer. And about a year ago, I started I I started asking him, like, what kind of AI tools they're using and he was like broadly like not impressed. He was like, we're like signing up for them. They're not get we're not getting a lot of value, but it's interesting.
Speaker 2:I'm keeping an eye on it kind of thing. And then yesterday, he said to me, I've seen the future. Harvey isn't perfect but has better attention to detail and is more thoughtful than almost any junior person at our firm. I've watched it do a 100 k of associate level work in ten minutes. And that felt like just extremely notable to me to just see how hard he, like, one eighty on that is like, how like, what what is the structure?
Speaker 2:And and you can talk at a high level and not give away specifics, but like, how much investment is, like, going into just that category alone from from from your view?
Speaker 8:I mean, we're seeing a huge amount of investment in law. Certainly, I would say the top categories are probably software engineering than finance than law. Maybe close between medicine and law, but I think that the models are very quickly gonna be able to do even partner level work at a lot of these firms. And so that transformation and how it impacts businesses and the economy is gonna be really profound. And, obviously, all of the data and evals to enable that is one of the primary blockers to getting there.
Speaker 1:We have a shout out to one of your employees, Bharat Talwar. So I just wanted to say, congratulations to him on being part of the team.
Speaker 2:The chat.
Speaker 1:The chat is just shouting him out.
Speaker 2:Oh, I see. Obviously,
Speaker 1:it's a big milestone, so we wanna celebrate everyone on the team.
Speaker 2:What, how in in conversations for this last round, obviously, business has so much momentum. I'm sure people are just like, take my money at all, you know, whatever. I'll just take it. I'll send the money and we'll figure out the docs later. But how big can Merkor get?
Speaker 2:Like, what is, like if somebody asks, like, okay, if everything goes right, what does his business look like? And, does it does it look like, you know, you're paying out on the levels of, like, an ADP? Right? Is our do you become, like, one of the largest pseudo employers in history? Like, what's like the what's the craziest outcome?
Speaker 8:The way I think about it is that right now, businesses are spending about $40,000,000,000,000 a year on knowledge work. All for people doing these largely monotonous things that have similarities from task to task. But all of that is going to be transformed to training agents to automate workflows. Instead of doing it ourselves, we'll have agents do those things. And Merkur is building the infrastructure to enable humans to engage with models, to teach them, to fit into the AI economy.
Speaker 8:And and I think there's an opportunity worth tens of trillions of dollars a year, to help that transformation happen over the coming decade. And so we're only 1% of the way there with that, and very exciting for everything to come.
Speaker 1:Are you a foodie? We have another question from the chat. Do you do you like fine cuisine?
Speaker 8:I I am a foodie. Yeah.
Speaker 1:You are a foodie.
Speaker 8:It's very fortunate coincidence. Yeah.
Speaker 1:That's good nominative determinism. We're very happy to hear that. Last question. When IPO?
Speaker 8:We don't have a specific date in mind yet, potentially on the horizon, but we'll be sure to keep you guys updated.
Speaker 2:Let's go. Potentially. Let's do an air horn
Speaker 3:for Air horn for the horizon.
Speaker 1:The horizon. No. There's probably somebody's
Speaker 2:probably gonna write an article on that, by way, so I'm sorry.
Speaker 1:This is a new thing. I I see it all the time. Every time they interview Palmer Lucky at blonde Bloomberg, they ask him, like, when are you IPO ing? And I'm like, you know that he would tell you if he had news there. Like, why are you even asking?
Speaker 1:But I guess it's just fun to ask. And then in a couple of years, we can look back.
Speaker 2:Potentially on the horizon is much different than we have no plans, though.
Speaker 1:So Yeah. Yeah. I mean, you could have said absolutely not. I I would never I will never take this company public in my life. You didn't say that, so at least we got something.
Speaker 1:So thank
Speaker 8:go. Progress.
Speaker 1:Anyway, massive congratulations on all the progress. Really, really remarkable growth. I mean, what a fun time. What a fun business. And, congratulations to everyone on the team.
Speaker 1:I mean
Speaker 2:Thanks for having
Speaker 1:me on.
Speaker 2:Absolute rocket ships. Cheers.
Speaker 1:Have a great rest of
Speaker 2:your day. Later.
Speaker 1:We'll talk to you soon. Let's get
Speaker 2:back to the timeline for a little bit.
Speaker 1:Let's get back to public.com investing for those who take it seriously. They got multi asset investing, industry leading yields and they're trusted by millions. Yes. Let's go back to the timeline.
Speaker 2:A lot of people have been focused on this, this chart overlaying stock market performance over job openings
Speaker 1:Mhmm.
Speaker 2:And how it basically diverges
Speaker 1:At the introduction of of ChadGBT. That like Basically. That's where people, like
Speaker 2:Which is also the introduction of high rates. Yes. And I think
Speaker 1:I think we need to put Tyler on this. Is this a chart crime, Tyler? Do you think that there's some funny business going on? This is a pretty simple just I don't think that I don't think that it's literally like the the lines are wrong. But I
Speaker 2:Mark What else? Mark at a 16 z broke this down. He said this is particularly trippy chart crime. The break point was exactly when the COVID stimmy bubble pop and the Fed hiked interest rates to He the says, the great forgetting that COVID ever happened is wild. I can't tell if it's adaptive or suicidal or both.
Speaker 2:But, yeah, I think everyone wants to, memory memory hole this one.
Speaker 1:And and and so what is exactly on this chart? I I don't even have it pulled up. It's it's number of jobs versus financial performance or something like that. Gavin. Gavin Baker here says really interesting chart from Derek Thompson surfaced it, former guest on the show.
Speaker 1:Stock market and job openings were highly correlated for decades. No longer stock market is up 75%, and job openings are down 33%. Would think at least partially due to AI. Chamath Palihapatia chimes in and says, it could also be that the plurality of the stock market is now highly concentrated across seven to eight companies who, on a relative basis, just don't employ a lot of people. So the stock market goes up, won't pull up employment along with it.
Speaker 2:I still think what has been happening to date is CEOs are desperate for every possible AI narrative. And if they need to do layoffs because they got bloated during COVID Yeah. They will say that we're getting efficiency out of AI, and that's a much better reason than, like, we over hired.
Speaker 1:Yeah.
Speaker 2:Remember, Microsoft has done a number of different, you know, layoffs Yep. This year. There's a layoff that got announced today.
Speaker 1:Well well, should get Derek
Speaker 2:Johnson back on
Speaker 1:the show. We should also get, a couple other economists, maybe Tyler
Speaker 2:targeting as many as 30,000 corporate jobs beginning tomorrow. So probably not a fun not a fun, day over at Amazon HQ. Some more positive news. Timothy Mellon, a banking heir, is said to be the anonymous donor, not so anonymous now, I guess, according to the Times, who gave 130,000,000 to the US government to help pay troops during the shutdown. This guy doesn't, according to Will Menidas, worth 14,000,000,000 personally guaranteed payroll for the armed services, And the only and most recent photo of him is from 1981.
Speaker 1:And I
Speaker 2:mean, kinda this photo looks so cool that I kinda understand how he was like, alright. That's it. Yes. I took the only photo I need for life.
Speaker 1:Yep.
Speaker 2:I won't do any photos because this looks I mean, suit, the tie
Speaker 1:the photo.
Speaker 2:With the train in the background Yeah. You know, with the with the the hair, the stare. I mean, yeah. He he just he one shotted photography.
Speaker 1:He did. It's remarkable because when you look at the photo and then you hear the headline, it's like, meet the man who backstopped the, and and paid for the army's payroll in a time of crisis with his fortune. You're like, oh, yeah. Like, this guy was probably crucial in World War two based on the image. And you're like, no.
Speaker 1:This happened, like, last week. He's talking about the the twenty twenty five government shutdown. That is what they're talking about, which and I just keep I just every time I see this image, I think, like, oh, this is a
Speaker 2:Mike in the chat is asking, a 130,000,000 is what percentage of monthly payroll? And that is
Speaker 1:Yeah. I had no idea. Well, maybe he levered up.
Speaker 2:Fiscal year 2024 military personnel category of the DOD budget, which covers pay and retirement benefits was about a 192,000,000,000. So, yeah. I don't think the 130,000,000 is gonna a good start.
Speaker 1:We've been on gambling this entire show, but I'm just thinking about, like, what if instead of government bonds where you earn, like, 4%, the government just released, you know, a one massive lottery ticket or something that would be, it it it costs a billion dollars, but there's a 1% chance that it pays out a $100,000,000,000. And if it does, then then the US government is indebted to you for, like, hundreds of years. But if it doesn't, if it doesn't Yeah. Then The US just gets a 100 By 2024
Speaker 2:math, I think you basically need, like, billion dollars every two weeks to keep the payroll going.
Speaker 1:So what does a 130,000,000 do? It's like a day?
Speaker 2:Yeah. Mike Mike did
Speaker 1:8,800,000,000.0.
Speaker 2:8.8 So, guess I mean, it's a good start.
Speaker 1:I mean, there are some there are some divisions of the government that have, basically savings that they can kinda tap into. And then also there's a big question about, how much are you actually going to, like like, like, do you need to do you need to bring everyone back on payroll, or or can you get by with 10% or 20%? And maybe this is something that he's backstopping and saying, hey. Let's pay 20% of people instead of 10% of people. What does Polymarket say about the government shutdown?
Speaker 1:Let let let let's pull that up. Government shutdown. Will the government shutdown end by, what is the most likely? November 30. By December 31, it's a 93% chance.
Speaker 1:November 15 is like the fifty fifty mark, basically. So expect another two weeks, maybe another three weeks according to Polymarket. So, there's your there's your Polymarket update.
Speaker 2:People are
Speaker 1:in the chat.
Speaker 2:Still talking about double speed. The, lets you control thousands of social media accounts with AI, ensuring they look as human as possible. Never pay a human again. Control is all you need. Jeremiah Johnson says, every startup is like, we found a cool way to monetize undermining the social contract with 30,000 likes.
Speaker 1:This is I mean, we follow we follow this person or something like that. This person's like a liberal. They should be pro tech, and they're it's not like this person is, like, by default, some, like, crazy anti tech person. And so
Speaker 2:You mean by you
Speaker 1:Jeremiah Johnson. Like, Jeremiah Johnson is is not like some, like, tear it all down, anti anti business, you know, and and he's making a good point getting 30,000 likes. And so I think this is a harbinger of, like, what the shape of the tech lash will look like.
Speaker 2:Well, I think in this case, even tech was not excited about this one.
Speaker 1:Tech is lashing itself. Self flagellating. Self harm. Self lash.
Speaker 2:No. But tech tech is saying like, you know, broadly, this doesn't seem like it needs to exist and Yeah. Probably is a net negative even if there's some, some some legitimate use cases.
Speaker 1:It's insane. Anyway, you know what is Last casino?
Speaker 6:Last
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Speaker 2:Zoomer, went viral again. This guy
Speaker 1:Zoomer.
Speaker 2:This guy is just Zoomer. Harvesting hatred from the entire world at this point. He said on a few days ago, at this point, I've lost all motivation to post on X. The new algorithm is so demoralizing. I have 30,000 followers and I'm getting 500 views in an hour.
Speaker 2:I'm done with this place. Well done, Elon Musk. And everyone, and their mother was dunking on him and saying, you just got paid $10,000, a week ago to post a picture of Steve Jobs' daughter. Just He
Speaker 3:didn't he
Speaker 1:didn't take the photo. It's not like he's a photographer.
Speaker 2:And this post by Adios, Elon Elon, I need my dopamine doll dollary dudes. I posted another hot girl. Where's my engagement? Elon Elon, I'm a content creator. So anyways, not not a lot of support for, Zoomer, but I guess, I'm sure he'll be back.
Speaker 2:I doubt he I doubt he
Speaker 1:Okay. We need we need Tyler to give us a review of chadlabs.ai. Apparently, I didn't even see this, but, there's a YC company that is a brain rot IDE, something like that. The idea
Speaker 2:is No way this is real.
Speaker 1:You can
Speaker 2:you can Is this re Brain rot actually real?
Speaker 1:And a cashback IDE. It seems like a parody.
Speaker 2:This is for sure somebody just making it.
Speaker 1:This seems like it's like a joke, but we need you to get to the bottom of what's actually going on.
Speaker 5:It's in I mean, it's a real YC company.
Speaker 1:Yes. But is it a stunt, Or are they actually trying to bring Tinder into your IDE? Which is like
Speaker 2:I mean, I'll I'm on the web I'm on the website commenting. Learn what Y Combinator website and Cloudlabs says it's the BrainRot IDE. It's a fall twenty twenty five bat.
Speaker 1:Oh, it's Cloudlabs. I thought it was Chad.
Speaker 2:No. It's Cloudlabs.
Speaker 1:Founder of Chad IDE here, cladlabs dot a I. So it's not Chad Labs. It's Cloudlabs.
Speaker 2:Yeah. I mean, I think I think this is just called Zoomer. This is just Zoomer marketing. They do call it the Chad IDE, the first brain rot IDE. They say, sup Gigachads.
Speaker 2:This is on the YC websites. Sup Gigachads? We're Richard and Kevin, founders of Cloud Labs. TLDR, as highly requested, we built the Chad IDE. Chad integrates your brain rot vices with your agentic coding workflow.
Speaker 2:Chad increases productivity and reduces friction of context switching. Yeah. So they're reducing
Speaker 1:So so Kevin Kevin is kind of saying like, I thought the problem solution was pretty straightforward, crying emoji, not sure what people can understand about that. So he's kind of, like, leaning into this. It feels like this might be rage bait. The product's branding is an epic rage bait.
Speaker 2:This is on the YC website. They have a screenshot of the product where they have Tinder in one panel Yes.
Speaker 1:Yes. And
Speaker 2:then the IDE in the other
Speaker 1:panel. And so this is this is the modern thesis.
Speaker 2:They're saying you can you can
Speaker 1:rage bait your way
Speaker 2:to yeah.
Speaker 1:So you can rage bait your way to actual usage.
Speaker 2:I'm surprised that YC is putting this gambling ID on on their website, I will say. But maybe they're just Well not gonna form an opinion.
Speaker 1:No. No. I I think there is a open debate amongst a lot of people, like, respectable respectable venture capitalists around, can you launch with something that's rage baity and then pivot into something that's serious? Can you build a serious business with a rage baity go to market? And And I know you I know you're against I've
Speaker 2:my been working next essay.
Speaker 1:Yes.
Speaker 2:Rage bait marketing is for losers. I like it. Which is that I think when you do rage bait marketing, it obviously gets a lot of attention. Mhmm. But it makes it so that you make the entire world prey on your downfall.
Speaker 2:And I think that that is Yep. Spiritually a bad strategy. Yeah. So I'm still working this one out. But I don't, you know, I don't think that
Speaker 1:No. I think
Speaker 2:I don't think that rage bait marketing helped clearly win the enterprise. Right?
Speaker 1:Yep. But there were a lot of VCs who invested
Speaker 2:in students.
Speaker 1:And the story's not over. But there were a lot of VCs who invested and said, hey. Look. I mean, we talked to Brian Kim from Andreessen on on the show about this. Like, why'd you do the deal?
Speaker 1:And he was like, I like that they were able to get a lot of attention, and that gives them an opportunity to deliver a product. That gives them the opportunity to go build something. And he was like, look. Like, we don't know if they have necessarily, but Yeah. At the very least, it's Yeah.
Speaker 2:And they were master's of it. They would do the the pictures of, like, just spent $10,000 on this suit, and you could tell that it was off the rack or
Speaker 1:whatever. Yeah. Tons of stuff. I just I just But I just don't
Speaker 2:think it's a I don't think it's a good strategy. And I think we're gonna be that's gonna be proven correct.
Speaker 1:I think I think you're correct in the in the spear in the spiritually risky strategy because how much better is is it to just go and and actually build a beautiful optimistic brand and pay for some billboard ads or, you know, even, you know, direct response ads.
Speaker 2:Beautiful thing. You don't even need advertising if your product is is you know, advertising is an accelerator.
Speaker 1:Say you do need advertising because you've built a product, but no one knows about it. And you have two options. One, like the the dark castle and the bright you know, the fork in the road meme. One of them is you you you rage bait everyone. You make your product annoying, and then everyone will have to check it out and the product's actually good versus, yeah, you have to shell out some cash to run some ads, but you slowly compound and you slowly grow.
Speaker 1:And then after a decade, you have a product where everyone's like, wow. That went that came out of nowhere. Those guys have just been running great ads for years. You know?
Speaker 2:Yeah. I just I just think you're ultimately Chat IDE is competing with Cursor, Windsurf, GitHub, Copilot. They're competing with serious companies and what kind of like, you're you're gonna you're gonna attract You don't serious developers.
Speaker 1:This is the lack of this is the lack of the April Fool's Day joke. This company could potentially have just been
Speaker 2:This should have been an April Fool's beach.
Speaker 1:Fool joke or windsurf's April fools joke. And it should have just been maybe I I don't know exactly what it is. We gotta dig in and understand what this is. But there's a whole world where the idea of a of a brain ruddy IDE is something like Google does as a side project as a joke. Right?
Speaker 1:Yep. Like, they used to do stuff like that and some of it like, they had a whole they had a whole didn't they have a whole feature that was just like talk to your dog or something? I don't know. There's so many. We there used to be a rich culture of of April fools jokes where you could effectively rage bait the the world, but everyone was in on the joke.
Speaker 1:And now, we're in this world of, like, you you rage bait
Speaker 2:Rage bait is your whole brand strategy. And that's where That's where
Speaker 1:And it's really hard to pivot away from. I don't think anyone's done it successfully.
Speaker 2:Yeah. It's very, very hard. Well, on that note, we have to get on With Bezel.
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Speaker 2:Love you.
Speaker 1:To everyone in the chat. Thank you to everyone who's listening to the show. We will see you tomorrow live with Satya Nadella, the CEO of Microsoft.
Speaker 2:Cannot wait. Cannot wait.
Speaker 1:Have a great rest your day.
Speaker 6:See you then. Goodbye.
Speaker 2:Cheers, folks.