Subscribe
Share
Share
Embed
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. We're live from the temple of technology, the fortress of finance, the capital of capital, the dojo of the dollar, the shrine of shareholder value. And today is March 5. It's Wednesday. It's twenty twenty five.
Speaker 1:And we got a great show for you. The show starts now. We got a bunch of call ins. We got Jeremy Jafon. Jafon.
Speaker 1:Jeremy. We got Nick Carter calling in, talking about core weave, talking about crypto. I'm sure we'll I'm sure we'll ask him a bunch of stuff. And we got Sean Maguire talking about the Elon empire. The empire that Elon Musk has built across every Sean, of course,
Speaker 2:has his tentacles all over.
Speaker 1:Yes. Right? Yes. And
Speaker 2:that should be all over. Master.
Speaker 1:The puppet master. He's the
Speaker 2:man pulling
Speaker 1:the tree tree. Yeah. Yeah. The wizard of Oz.
Speaker 2:Exactly.
Speaker 1:Yeah. We we we we've given our studio nicknames. We need to give our guests nicknames. We've done this pretty well with, David Sentra, the godfather of pod of podcasting. Very powerful man.
Speaker 1:Powerful man in Miami. Yes. Anyway, speaking of very powerful men, we are breaking down, of course, politics. Trump gave a speech. I didn't watch it, but I did control f and see, did he mention tech?
Speaker 1:Did he mention chips? And, yes, he mentioned tech twice. And, he said, Ronald Reagan wanted to do it long ago, but the technology just wasn't there. He's referring to he's asking congress to fund a state of the art golden dome missile defense shield to protect our homeland. I mean, golden Dome.
Speaker 1:Let's go.
Speaker 2:I mean, obviously, referencing the iron dome
Speaker 3:Yes.
Speaker 2:But has to do it one greater.
Speaker 1:Hilarious. Hilarious coinage. I think I'm on board for Golden Dome. This does seem big for, you know, obviously, politics. We try and stay away from it.
Speaker 1:But the, like, the president is saying we're gonna spend money on something that technologists build, like, yep, tech. The the
Speaker 2:So if you're in the Golden Dome business Yes. This is a huge opportunity.
Speaker 1:Exactly. Exactly.
Speaker 2:That's why we wanted to call it out.
Speaker 1:Yeah. I really also, I mean, just generally, do I'm you have to be pro dome. Yep. Just be pro dome. And to be honest, I recommend everyone build it.
Speaker 2:Had a Golden Dome already? Yeah. So so whenever you're Star Wars.
Speaker 1:Do you remember Star Wars?
Speaker 2:I I've I've Not
Speaker 1:the not the show.
Speaker 2:No. Not the movie. Oh, right.
Speaker 1:This is the Reagan, so Ronald Reagan what what he's referencing here says, Ronald Reagan wanted to do it a long time ago, referring to a golden dome, but the technology just wasn't there. The idea was Ronald Reagan had this, Star Wars program. It got called Star Wars after the fact. I think it's a pejorative. They were like, oh, he's gonna put satellites in space, and they're gonna shoot down missiles.
Speaker 1:Like, this guy's stupid. I I and then, like, they they was, like, a hit piece. And
Speaker 3:they're like,
Speaker 1:oh, he just watched Star Wars, and he wants to do it in real life. And now it's like, no. Actually, we do need that. That's that that's a good thing. The same thing happened with Trump in the first administration where, the, what was it?
Speaker 1:The star what what's the Space Force? Space Force.
Speaker 2:Yep.
Speaker 1:So he comes out with Space Force, and it's, like, mocked. And there's actually a show called Space Force that's, like, The Office. It's like a sitcom. And it was originally was making fun of Space Force. We were, oh, it's so ridiculous to have a Space Force.
Speaker 1:But then the people who were writing the show were like, wait. Like, this is actually kinda cool. And it kinda turned into,
Speaker 2:like, a constant team has a Space Force.
Speaker 1:Exactly. Exactly. And so, yeah. Who knows? But Golden Dome, very silly name, but probably some technology that we want and will probably affect a lot of defense tech companies, that we know and love and have mentioned on the show.
Speaker 2:We should do a deeper segment on what is the difference between a generalized, ICBM sort of missile defense system and whatever the Golden Dome is gonna be other than branding. Because it's fantastic branding. Branding matters. Yep. Naming matters.
Speaker 2:Yep. I'm sure that Trump would like for his legacy Yep. To, have at least a footnote about the Golden Dome. Yep. But, you know, again, going back to this idea of, we we've had sort of missile defense systems for decades And, yeah.
Speaker 1:So there are generally levels to this stuff, like ICBMs. We we talked about this, the hypersonic thing. Like, ICBMs, they go in a parabolic arc. It's pretty easy to intercept them and shoot them down with just another missile. The Patriot missile and the and the Roadrunner that Anduril is building.
Speaker 1:You know, the the whole idea is a cruise missile comes in. You need to hit it with a with a drone or, another, like, a Patriot missile. Very expensive, very, you know, not a particularly treatable system. And with with the with the dawn of hypersonics, like, you know, you need to upgrade your dome. So Yep.
Speaker 1:I I think the question is, like, we
Speaker 2:New dome alert.
Speaker 1:Yeah. Dome is a binary term that sounds very good, but realistically, it's like this massive gradient of, like, our capabilities versus, things that wanna penetrate a dome. But, you know, and and Trump goes on to say, and and and other place, they have it. Israel has it. Other places have it, and The United States should have it too.
Speaker 1:Right? Kim. Right? They should
Speaker 2:Now that we are waging trade wars Yeah. With our neighbors, we should, you know, be ready for anything.
Speaker 1:This transcript is so funny. I saw a bunch of transcripts. Like, the top search result is, like, is, like, Trump's transcript and fact checked. And, like, you can barely read what he's saying because, like, every fact checked. And I mean
Speaker 2:I mean, reasonable. Do the same thing for the New York Times as well. Right? But it's one sentence, true song.
Speaker 1:Yeah. Yeah.
Speaker 3:True song.
Speaker 2:True song.
Speaker 1:But but, I mean, just listen to this transcript. They should have it too. So I wanna thank you, but it's a very, very important. This is a very dangerous world. We should have it.
Speaker 1:We wanna be protected and we're gonna protect our citizens like never before. It's like, it really comes across in the actual,
Speaker 2:voice.
Speaker 1:Yeah. Yeah. Yeah. The voice comes across even in the transcript, just a couple sentences. So the other tech thing that was mentioned, of course, was, SoftBank, Oracle, OpenAI.
Speaker 1:Trump is telling this to his America's First policies. He claims, that we have had 1,700,000,000,000.0 of new investment in America in just the past few weeks. That money hasn't been spent yet, but it's been the vibes of 1,700,000,000,000.0 have happened.
Speaker 2:That's actually an area where I would wanna fact check, not because I don't fully believe it, but I would just like to see it listed out.
Speaker 1:So he goes on and he actually lists this down a little bit. He says, the combination of the election and the economic policies that people love, SoftBank, one of the most brilliant anywhere in the world, announced a $200,000,000,000 investment, open AI and Oracle.
Speaker 2:Everybody's collectively just agreed that they're sizing down the 500.
Speaker 1:No, no, no, no, no, no. That's the funny thing. So he says soft bank is putting in 200,000,000,000 and then he says open AI and Oracle, Larry Ellison announced a $500,000,000,000 investment, which they wouldn't have done if Kamala had one. And it's like, well, I'm pretty sure that open AI for Oracle five hundred billion includes the 200,000,000,000 for SoftBank. So you're kind of double counting that.
Speaker 1:And then he says, apple announced 500,000,000,000 investment. Tim Cook called me and said, I can't spend it fast enough. I got it's gotta be much higher than that. Right. And of course that was contradict.
Speaker 1:And of course that was, like, you know, money that that apple was, like, already spending to some degree. But generally, like, this is good. Like, oh, we want we want companies to invest in America. Like, this is great. And and so it's it's funny because it's hyperbolic, but it's also like directionally correct.
Speaker 1:So like, I'm I'm kinda down. I believe they're building the best that that, their plants here instead of China. And just yesterday, Taiwan semiconductor, the biggest in the world's most powerful in the world has a tremendous amount. 97% of the market announced a hundred and 65,000,000,000 investment to build the most powerful chips on earth right here in The USA. And we're not giving them any money.
Speaker 1:Tripp loves a deal.
Speaker 2:Love it. And then
Speaker 1:he goes into the chips act.
Speaker 2:Your chips act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn't mean a thing. They take our money and they don't spend it. All that all that meant to them, we're giving them no money. All that was important to them was that they didn't want to pay the tariffs.
Speaker 2:So they came, and they're building.
Speaker 1:They're building.
Speaker 2:And many other companies are coming. We don't have to give them money. We just wanna protect our businesses and our people, and they will come because they won't have to pay tariffs if they build it in America. So it's very amazing. You should get rid of the chips act and whatever's left over, mister speaker.
Speaker 2:You should use it to reduce debt or any other reason you want to. And just, like, this iconic iconic paragraph.
Speaker 1:Yeah. And so that's pretty much that that that's pretty much the the the entire coverage of tech and chips. Chips act, you know, obviously passed during the Biden administration, but was saber rattled for years. And and, you know, the people always make the argument that, like, America is more divided than ever. But with regard to China, Trump and Biden had a lot of similar policies.
Speaker 1:Yeah. And you see hundred year marathon, Michael Pillsbury. That book really lays down, hey. China wants to be number one. They're not gonna stop.
Speaker 1:It's not that they're gonna necessarily just go to go to war, but they are putting a plan in place very slowly to build and build and build and become, you know, the number one. Everyone wants to be number one. Why not? And so Michael Pillsbury kinda lays this down. Yep.
Speaker 1:Then there's also this other book we have over here, America against America, that was written by, a Chinese researcher in the government, came over here and was like, I think America's gonna destroy itself, basically, culturally. And, like, we can kinda just, like, sit back and let it happen. Very, very weird, like, kind of blackmailing book. It's very odd. But at the same time, there's a bunch of interesting things in it.
Speaker 1:But But
Speaker 2:every time we're about to destroy ourselves, we find a trillion dollars in in minerals. It's true.
Speaker 1:Yeah. And so, and, and so, you know, Trump comes in, starts talking trade war, starts talking, you know, competition. That actually carries forward into the Biden admin. And Yep. Biden says, like, yeah.
Speaker 1:Like, I hated I'm very opposite of Trump aesthetically. And I'm opposite Trump on many things, like immigration. But but on China and on tack and on a lot of these things, the the the two administrations are pretty similar. And so, the Chips Act goes out, and now Trump is thinking about renegotiating, which which is supported by Ben Thompson at Sertechery. Because right now, the Chips Act is structured as, incentives to build plants, not the supply side, not demand side, basically.
Speaker 2:Ben should give free subscriptions Yeah. To anybody in the White House.
Speaker 1:Yeah. Seriously.
Speaker 2:If you want it, you can have it.
Speaker 1:Yeah. Because his his analysis is gonna be yeah. Hopefully, hopefully, informing folks. But, you know, I don't really when I tune on when I turn on C SPAN, I'm not really watching for the politics. I'm not really watching for Jack.
Speaker 1:I'm watching for the watches.
Speaker 2:That's right.
Speaker 1:And so that's why we wanna talk to you about bezel. You can shop over 22,000 luxury watches, fully authenticated in house by Bezos team of experts. If you love Trump, if you hate Trump, his watch available on bezel. He has a Vacheron Constantin historiques, square, dress watch. It's gold.
Speaker 1:It's, Fantastic. It's a it's a fantastic piece. But, you know, Obama known to wear a Rolex. Pick one up on Bezel if you're if
Speaker 2:you're, Obama guy. Guy.
Speaker 1:Yeah. So whatever your political persuasion, there is a watch for you that will signal who you who you stand with on Bezel, and this is what you want.
Speaker 2:Three separate auctions live right now. So if you're in the, you know, it's almost it's it's fun.
Speaker 1:I I I do think one of the one of the most fun things about, like, watch hunting is finding these ones that have stories. Like, I'm pretty sure Obama has a Rolex that was given to him by a navy seal who was on his security detail and saw him wearing one watch and was like
Speaker 2:Like a Casio or something?
Speaker 1:Yeah. Like, you gotta you gotta you gotta take this, mister president. Like, you gotta step it up. Something like that. And I was just like, Boys, like these guys,
Speaker 2:you love to somebody is one of the highest.
Speaker 1:And then, and then of course you can track it and you can see like, oh yeah. And then Obama wore it for like the next twenty five years or something like that, or like ten years. And you're like, that's awesome. Yeah. And so and so I think when there's a when there's a rich history about a watch like that, like some story, like the Rolex presidential day date, like the the gold the gold Rolex worn by several presidents.
Speaker 1:Sure. You're not getting one that's worn by a president unless you're going and finding one for, like, a million dollars.
Speaker 2:Yeah.
Speaker 1:But even just having a story that you can tell around watches. Oh, yeah. This is the same model that was worn by Reagan.
Speaker 2:To be honest, I wouldn't be surprised if Trump had some type of, little scheme at some point where he would just take your day date, wear it
Speaker 1:Wear it.
Speaker 2:For, like, thirty seconds, take it off, you know, and he could do, like, a hundred, and he'd be creating you know, it could be the Trump edition Rolex. Yeah. Yeah. Yeah. And so he just puts it on.
Speaker 2:It's worn by Trump. You know, they stamp it on the back. On they go. It's ridiculous.
Speaker 1:Anyway, let's move on to some, tech news. Let's go to OpenAI. Sam Altman told investors that he might launch agents costing between 2,000 to 20,000 a month to do tasks like coding and PhD level research. Nick here says Lowell Lammau even. This was something didn't we predict this?
Speaker 2:Yeah.
Speaker 1:I think it said I wanted a 20 k agent.
Speaker 2:Yeah. We we had talked about this, you know, months ago. Yeah. One of the things that I think we are more fixated on was if you just gave me the best model Yeah. And and let me have unlimited usage of it, that would be worth around $2,000 a month.
Speaker 2:Sure. In my opinion. Sure. What they're saying and the pushback here has been, for $20,000 a month, you could probably get four separate PhD level research assistance and get them all the, o one pro subscription Yep. For the cost of you know, so so this agent can't just be a PhD level researcher.
Speaker 2:It has to be vastly more effective. Yeah. Otherwise, because 20 k, you know, it says two to 20 k. Right? So we don't know exactly.
Speaker 1:What's fascinating is, like, there are now PhD level researchers that are in the training loop in the RLHF. Because at a certain point, like like you can't just hire me and you to generate training data for advanced mathematics.
Speaker 2:On the humor side.
Speaker 1:On the humor side. Yeah. When you call us, Sam, when you need a humor eval and you need us to generate thousands of jokes, yeah. Well, but it's gonna cost you a thousand times more per per, per token. But, but it is interesting to wonder, you know, like, do you wind up putting those folks in the loop at some point?
Speaker 1:And do you just say, hey. Yeah. At 20 k a month like, 20 k a month for a software product, you usually get, like, an SDR. You get, like, like, some sort of implementation person. And so it wouldn't it would be funny if, like, you're at 20 k a month and, like, you also get, like, a human who you can just, like, act like, a a human you can text and call and be like, hey.
Speaker 1:Yeah. Like, I need the a I need the AI agent to do this. And then and then they're using the AI, but, actually, you're, you know, interacting with the AI. I wanna
Speaker 2:know I wanna know how real this is. Yeah. Right? There's just been this, OpenAI has been at the leading edge
Speaker 1:Yep.
Speaker 2:And they continue to impress
Speaker 1:Yep.
Speaker 2:Even though many people said four or five was a letdown. Yep. I think many people just expected it, so it should have been a letdown. It should have just been sort of, like I said, expected. All that said, if Sam is out on the fundraising trail and he needs to be able to show how they're gonna add $10,000,000,000 of ARR Yep.
Speaker 2:That's that's not on their core consumer subscriptions
Speaker 1:Yep.
Speaker 2:This is one way to do it. Right? When you're talking about two to twenty thousand dollar a month per sort of instance of the software, you know, it's very easy to get these sort of big numbers very quickly. And so I don't think people with where four point five landed, I don't think people are and and the way that Satya is talking, people are starting to adjust the sort of narrative around, oh, AGI is sort of three, four months away. You should invest now at this crazy valuation because we're gonna control superintelligence.
Speaker 2:There needs to be a new narrative from a fundraising standpoint, in my opinion, you know, to continue sort of commanding these really, really, really aggressive, forward revenue multiples.
Speaker 1:And it's test time inference. Yeah. Like, it it it is like, when I hear 20 k, I I hear, like, I'm signing up for that if I have a workload that that needs to be done every single day. I'm not exactly sure what a great example would be, but, I mean, it's like, you know, run through every I'm an insurance company and look through every single policy every single day for anything that's out of the ordinary, and you're dumping in millions of pages of text again and again and again. And and every time you query, you want it to actually sit there and think for, you know, hours, something like that.
Speaker 1:And so the 20 k, I would imagine that the that the cogs on that are thousands
Speaker 2:of dollars. Every day, you're gonna say, write me a stand up joke
Speaker 1:Yeah. In the
Speaker 2:style of Shane Gillis, and feel free to take twelve hours. Yeah. But you better come back with something good. Otherwise, I'm unsubscribing.
Speaker 1:Yeah. I would I would start threatening the the jokes that people like, it it it's always like the public figures who say, like, be me, be Andre Karpathy. And then it's like, oh, well, it knows everything about Andre Karpathy, so it can tell a good joke. I wonder I wonder when, like, normies will be, like, laughing at it because, like, it needs to know stuff about them to actually deliver a good joke. Because a lot of it
Speaker 2:seems me. Love DraftKings. Love Netflix.
Speaker 1:Yeah. Exactly.
Speaker 2:I love parlays.
Speaker 1:Yeah. Yeah. I don't know. Anyway, you you had the question of, like, you know, how real is this? Let's let's actually read the information to see how much info they have.
Speaker 1:Basically, OpenAI is now at a 4,000,000,000 ARR, which is incredible.
Speaker 2:Gerstner came out and said they're projecting to be at somewhere near 11 by the end of the year.
Speaker 4:So the
Speaker 2:growth is still ridiculous.
Speaker 1:Yep. Yep. Yep. The term agents typically refers to AI as they can take actions on behalf of customers without needing a lot of direction, while OpenAI investor SoftBank has committed to spend 3,000,000,000 on agents, from OpenAI this year alone.
Speaker 2:Yeah. Yeah. Yeah.
Speaker 1:Wait. Like
Speaker 2:So so you saw Sam Lesson had that billboard on the one zero one Yeah. That said AI is not your mode. Yeah. He came out and he said I think it was basically on this digital billboard, which hopefully they got through AdQuik. Otherwise, they probably, you know, wasted money and did poor targeting and all that stuff.
Speaker 2:But, he was saying that, you know, $3,000,000,000 of their sort of projected revenue is from SoftBank, which SoftBank is using those projections to lever up, raise tens of billions of dollars of debt to then invest in OpenAI. So it feels it feels hard to believe that that SoftBank will actually spend $3,000,000,000 on OpenAI agents this year just because I imagine that
Speaker 1:Yeah.
Speaker 2:Even if even if the technology is there, imagine rolling that out across your entire
Speaker 1:I mean, $3,000,000,000, that's gotta be on that's, like, in the same ballpark as Snapchat's cloud bill with Google. Like, it's like or Netflix's infrastructure on AWS. Yeah. Like, they're probably higher than that. But, like, in the billions, like, to spend billions with a single, like, you know, software, like, you know, tech company contract as a customer.
Speaker 1:Like, you have to get so much out of it.
Speaker 2:Put it in perspective, I I just ran a few, very basic, calculations. That would be them spending 250 doll, 2 hundred and 50 million per month this year, which sounds crazy, but it's it's it's, like, $8,000,000 a day on agents. Yeah. And I think that, of course, OpenAI would let them spend that much, but SoftBank is also running a business. Right?
Speaker 2:And they need to be there needs to be some real value exchange. Right? And I think if you just turn on a bunch of these agents Yeah. And you're spending $8,000,000 a day on them, very unclear if they're, yeah, very
Speaker 1:What I mean, what what what's, like, the craziest steel man you could possibly think for this? Like, what if you what if you just say, okay. SoftBank has a ton of employees doing a lot of different things. For this year, we're gonna spend this massive investment, but we're going to effectively have every single employee at SoftBank is going to have an AI agent shadow them. So every task, every email, every Slack message that goes to a a human SoftBank employee is also going to go to a a, like, a mirror world metaverse representation of that employee that's run by an OpenAI AI agent.
Speaker 1:And so you have information on, hey. SoftBank, you know, had customer service people. Let's see what the response from the human was. Let's see what the response was from the AI agent that was shadowing them every single day, and then do the same thing for the analyst. Do the same thing for the CFO.
Speaker 1:Do the same thing for the, you know, Masayoshi. Yep. Do do do it for everyone. And then you can and then you can see, okay, this is actually a replaceable job, or this is a job that that we got twice as much done. And so there's actually twice as much value, so we should expand, keep the workforce, but Yeah.
Speaker 1:It was a good deal. I don't know. It seems it seems really hard to to to manage that much AI agency. You know? It's like, it's a lot of it's a lot of intelligence to just go say, hey.
Speaker 1:Hey. Go do, you know, what, $250,000,000 of work? Like a month. I have trouble. I have the o one pro.
Speaker 1:I, I have trouble, you know, dispatching enough valuable queries on a regular basis to really like, get the most out of it. And I talk to people and sometimes people will be like, oh, you only use chat g p t, like, five times a day. I'm using it 20 times a day. And it's like, I don't know if that's, like, I don't know that you necessarily wanna, like, be maximizing your AI usage, and that's, like, the right metric. There might be something where it's, like, work smarter, not harder.
Speaker 1:But if I had a $250,000,000, it's like, Brewster's millions. Have you seen Brewster's millions? The kid inherits, you know, a billion dollars from his, like, you know, rich grandfather or something Amazing. And says, you know, in order to deal with this sudden wealth, you have to spend, you know, $10,000,000 this this weekend or something. And if you can spend it, it's all this analogy of, like, you know, you catch the kid smoking a smoking a cigarette, you make them smoke an entire pack, and they're like, this is disgusting.
Speaker 1:They never smoke again. Right? And so, Brewster's Millions is the same idea with with money. And if you Brewster's Millions to me on AI agents, you gave me a $250,000,000 budget and said, go and deploy this and try and get $250,000,000 worth of value out of this. I don't know.
Speaker 1:I don't I
Speaker 2:don't know if it's It's this weird house of cards. Right? Yeah. And and when you see, it's completely unbelievable that SoftBank would effectively spend $3,000,000,000 a year on agents today when I would guess that their actual spend on agents in the past twelve months was under a hundred million dollars. Right?
Speaker 2:Yeah.
Speaker 1:I mean
Speaker 2:so the so so that level of growth is not super believable.
Speaker 1:Yeah.
Speaker 2:It is almost believable that Masa would say, I will actually spend this money with you because SoftBank is gonna be such a big investor in OpenAI that, you know, you know, we're we're willing to make this commitment, and it's sort of like this crazy, conflicted transaction that, has a bunch of you know, Sam is out there using this revenue commitment to raise more money from other people. Yeah. OpenAI is using that, you know, open it or sorry. SoftBank is using OpenAI's, revenue projections to raise debt against Yeah. And the whole thing is just, beautifully, conflicted.
Speaker 2:And But no conflict, no interest. No conflict, no interest. So Let's
Speaker 1:give a little bit more context. But we'll
Speaker 2:be able to actually so the beautiful thing is we will be able to see pretty much exact not exactly necessarily, but we'll be able to see if this spending spree from Masa on OpenAI was real because SoftBank's a public company. Yeah. So we'll be able to check back on this.
Speaker 1:So OpenAI is gonna have several tiers. $2,000 a month gets you high income knowledge workers. Mid tier agents for software development can go up to 10 k a month, and high end agents acting as PhD level research agents could cost up to 20 k per month. In the long run, OpenAI expects 20 to 25% of the company's revenue to come from agent products, the person said. Our past reporting has given hints about each of these type of agents.
Speaker 1:And so,
Speaker 2:So here's the thing that's somewhat you know, just one way to push back here.
Speaker 1:Yeah.
Speaker 2:Dev and AI, which is built on top of OpenAI Yep. Costs $500 a month.
Speaker 1:Yeah.
Speaker 2:There's been reports that it's super effective in organizations.
Speaker 1:Yep. It works 500 a month, and then there's also consumption based pricing.
Speaker 2:Right.
Speaker 1:That's the same thing with Cloud Code.
Speaker 2:Right. But all that being said
Speaker 1:Yep.
Speaker 2:Is OpenAI's products going to be 20, 20 or 10 times better than Devon, just built on top of OpenAI? Yeah. Otherwise, why would consumers use the OpenAI version that costs $10,000?
Speaker 1:Yeah. I don't know. It'll be interesting. There yeah. There's so many there's such a dance here between, you know, what are they gonna release in the, in the in the API?
Speaker 1:What how how closely are they gonna keep things held as secrets? There's actually another story we're gonna get to about, Ilya Suskva and how he's, like, being really, really secretive. And it's interesting because yeah. I mean, if you're if you're vending your best model, your model that costs, you know, $20,000 a month out on API, someone can wrap that. Maybe you don't want them to do that.
Speaker 1:Somebody can maybe distill that or reverse engineer it. And so, there's there will continue to be the question of, like, how's how much can you lock these down? Or Yep. How how long does the frontier last? It's a it's an ongoing debate and it's fun to follow, follow along.
Speaker 1:But of course, there are, you know, endless battles over OpenAI. And, of course, there is the news that, Elon Musk and OpenAI are in, lawsuit. And there's a breakdown here from Rob. Should we go through this?
Speaker 2:Yeah. Yeah. We can go through this briefly. I'll cover it. So people are sleeping.
Speaker 2:This is this morning at 3AM. Yeah. He says people are sleeping on huge news in the Musk versus OpenAI case today. The judge finds that if Musk's donation gives him legal standing, she thinks it's very likely she'd wanna block their entire hundred billion dollar nonprofit to for profit conversion. And there's a highlighted, piece of a legal document here that says, next.
Speaker 2:And similarly, if a trust was created, the balance of equities would certainly tip towards plaintiffs in the context of a breach as Altman and Brockman made foundational commitments for swearing any intent to use open AI as a vehicle to enrich themselves, that the court finds no inequity in an injunction that seeks to preserve the status quo of open AI's corporate form as long as the process proceeds in expedited manner. Rob says Musk is trying to stop the opening AI opening AI business effectively converting from a nonprofit to a for profit. To do that, he needs to prove that he is being wronged in a way that allows him to bring a case to the court, which is the legal standing and the conversion to a for profit, which gets cut off here.
Speaker 5:I'm gonna
Speaker 2:try to see if I can find it, briefly.
Speaker 1:Yeah. This is this is a very high bar to reach. Interesting. I mean, I'm I'm still on, like, team, like, you know, hopefully, they can sort this out. It does it does make sense that it seems like such like a just an aberration of the legal system that we're in this situation where it's like, Hey, there's this weird situation where we kind of have to switch from a nonprofit to a for profit.
Speaker 1:Can we just have a one time grace period where anyone who donated to the nonprofit just gets a stake in the for profit? Because that would be that that does feel like the most fair, but it feels like legally, it can't happen or else there will be some crazy tax implication or it will get, like, blocked.
Speaker 2:Yep. But also I actually messaged Rob about coming on the show. He responded back, and he says, you should have a lawyer on the show, not me. This is a super complicated issue. But, overall, my takeaway from the news today was that, that the judge is not shutting down sort of Elon's efforts.
Speaker 2:Okay. It's it seems like still very fifty fifty, or maybe even, sixty forty Altman, OpenAI versus the the team Musk. Yep. So we'll we'll see what's what, you know, what what ends up happening. But, overall, you know, this, is pretty wild to just be kind of playing out in front of everyone while OpenAI stays charging ahead, while XAI stays charging ahead.
Speaker 2:And, yeah, it certainly, is evolving.
Speaker 1:Yeah. I I wonder really even, like, what the time we're gonna get ASI before we get a legal conclusion on this case, aren't we? Like, this this is gonna drag out for years. I mean, the the Musk pay package is still dragging out, right? Like we don't, we still don't have a conclusion on that because he's moving the, he's moving Tesla from Delaware to Texas, I believe, and like reinstating it and then the judge blocked it.
Speaker 1:And so, the, the, the legal world just moves so slow. Yeah. It's rough. Anyway
Speaker 2:Well, there's one more line in here that I think is relevant. It says for this inquiry, the court looks at OpenAI certificates of incorporation in both Delaware and California, which lay out the charitable purposes behind the the corporation. The documents state that open AI, quote, was organized exclusively for charitable and educational purposes and not organized for the private gain of any person. And so this is basically what, Elon's legal team is leaning on in terms of, you know, making, making their point hurt. So see how it goes.
Speaker 2:Well,
Speaker 1:whether you're Elon Musk or Sam Altman, you're not gonna be building AGI or ASI unless you're getting a good night's sleep. So both of you, please go to 8sleep.com.
Speaker 2:Tell them the technology brothers.
Speaker 1:The technology brothers sent you and, turn your bed into the ultimate sleeping experience. Sam, Elon, this is more important. Surely, you guys can agree on this. You guys can disagree on who owns what and what the companies are and what nonprofit, for profit, all that legal mumbo mumbo jumbo, we can put that aside, and we can agree that we all just wanna get % sleep scores. And that's actually what's really important.
Speaker 2:Not get that last night.
Speaker 1:I did not either. I got an 84. What did you get? 96. You you roast me.
Speaker 2:I'm back. I've been having a rough time. Two hours of deep sleep.
Speaker 1:Two hours. I got 79% on quality and six forty four in time slept.
Speaker 2:You're sick as a dog. I, But your energy is way back
Speaker 1:to this. I'm pumping it up. I'm pumping it up.
Speaker 2:I I John was asleep at the wheel yesterday.
Speaker 1:I think all the drugs I'm taking, mostly just Robitussin, it's acting like I'm high. Like
Speaker 2:That's great. That's fun.
Speaker 1:I I I'm I'm definitely letting it loose. I think the answer is, like, if I'm low energy, just, like, let it fly. Yeah. Because, it makes for a better show for sure.
Speaker 2:Absolutely. Alright. 8sleep.com/cvpn. Go check it out. Yeah.
Speaker 2:Back to the show.
Speaker 1:Back to the show. Let's talk about Ilya Sutzkever, absolute goat raising
Speaker 2:Papa
Speaker 1:billions of dollars. I mean, we've talked about it before. Apparently, it's impossible if you're an open a cofounder to build anything but a foundation model company. Yep. We would love to see someone start, I don't know, supplements company.
Speaker 1:Yeah. I wanna see, you know, him build a, you you you know, I I don't know.
Speaker 2:Or just say, post economic, I'm gonna go into bodybuilding. Yeah. Because and go Golden Retriever Max.
Speaker 1:Start a podcast. Do something. I I don't know. It's just like it's like all they can do is just foundation model, foundation model, foundation model every single day. Every single person.
Speaker 2:Machine god is real.
Speaker 1:Yeah. And What do you think? What's weird is they don't wanna do it
Speaker 2:together. Never.
Speaker 1:They all want their own companies. They all want their own foundation models. But, you know, apparently, it's profitable. The company is already worth 30,000,000,000, raising multiple billions.
Speaker 2:Of the is that the fastest
Speaker 1:It's gotta be. It's gotta be. So, anyway
Speaker 2:Not not to say the value's already been created, but
Speaker 1:Ilya Sutzkever
Speaker 2:has a company. Yeah. Ever gone from zero to 30 in less than a year?
Speaker 1:I don't know. So, Ilya Siskiver, he's a OpenAI researcher. He's the one who found, like, the transformer paper and, like, you know, Google built it, but he really recognized that it was very important. He, you know, built the early, GPT architecture. It was very foundational in in the development of LLMs and AI.
Speaker 1:And he left OpenAI last year. Now he has a new startup called Safe Super Intelligence, and it's become one of the most valuable companies in tech thanks to his reputation. And SSI says it doesn't plan to release any products until it develops super intelligence. And I was thinking about this. So they raised, like, a billion dollars or 2,000,000,000 at, at a 30,000,000,000, or they're they're in talks to raise, funding at 30,000,000,000.
Speaker 1:What would be hilarious if if if Deepsea comes up, they're raising, like, 2,000,000,000.
Speaker 2:Journal just front running this and saying his startup is already worth 30,000,000,000 because it sounds more interesting.
Speaker 1:Yes. Yes. Definitely. Okay. It would be so funny if it was like you're okay.
Speaker 1:Hey. We need to train this foundation model, guys. Like, we need, like, 3,000,000,000. We'll just give you, like, 10%. So we'll do, like, 30,000,000,000 valuation, but it makes sense because, like, it's gonna cost us 3,000,000,000 to build a frontier model.
Speaker 1:I would take 3 out there, like, we actually only need, like, 300 k to do this. So we're still gonna do the 3,000,000,000, but it's just gonna be secondary. And don't worry about that. And but we're gonna keep the valuation where it is because it's, like, the same tech. That would be genius.
Speaker 2:He's just in it for the cheeky secondary.
Speaker 1:Maybe. I mean, there is a there are group of groups of people who are basically, like, you know, the my a s I a g I world is just, like, I need to just corner some resource. Because, like like, yeah, there will be abundance, but there will only be so much beachfront property. Yep. And so, like, I must, like, get my beachfront.
Speaker 1:But, of course, like, this isn't what Ilya is doing. He's he's, like, obviously a true believer in AI and tech and also fantastically wealthy from OpenAI. I forget what they get. They get credits or Yeah.
Speaker 2:I would
Speaker 1:Enough stock.
Speaker 2:How much would you pay to get the full hour long pitch for SSI? Because arguably, just getting you know, I'm sure he's pitching relatively few people Yep. For this. Right? He's not trying to go talk all over the town.
Speaker 2:Yeah. A lot of people are conflicted already. He probably is talking to Sovereign.
Speaker 1:Isn't this, like, Nat Friedman was the first group, I thought?
Speaker 2:And, it's grow
Speaker 1:Daniel Gross?
Speaker 2:Daniel Gross is the CEO. Yep. Right? Yeah. So so but but getting the pitch from Ilya would be, almost priceless.
Speaker 1:Totally.
Speaker 2:I would lever up to VPN to just get the full pitch
Speaker 3:Yep.
Speaker 2:And then be able to act according to, you know, who knows? He he seems like somebody who would give a very authentic pitch versus just, you know, promising Yeah. You know, he he's sick of this sort of, like Yeah. High flying deal making approach of his former cofounder.
Speaker 1:Totally. Yeah. I mean, he seems he has that that quote, and that I was like a guardian piece or something or SF Chronicle video where he's like, if if if the AGI doesn't go well, the entire earth will be, covered in solar panels. Have you heard about this half Earth concept? Half Earth, h a f f?
Speaker 1:Yep. I think his name's Peter Half. He's a a scientist. Okay.
Speaker 2:He named it after himself.
Speaker 1:Yeah. It's a coinage. It's like King's law.
Speaker 2:Great. No.
Speaker 1:This is, like, a real thing. So so he's like a he's a, like, a futurist, a scientist, and he has this, theory. There there's, like, this four quadrant model for, like, how how, how the Earth can develop and accumulate more and more energy over time. Like, eventually, like, we're growing our energy consumption at, like, 2% a year. And if you just play that out exponentially, eventually, we will be consuming all of the energy that is that hits the Earth from the sun.
Speaker 1:And then eventually, you go into Dyson sphere. That's like Kardashev two. But there's a question about, like, do you go black or green? Green is like, we we focus on, like, bio. And and you have, like, you know, more trees that are, like, you know, absorbing energy, essentially.
Speaker 1:Black is like solar panels. And then the question of, like, do you stay on Earth, or do you go into space? There's, like, this there's, like, this interesting four quadrant model. Yeah. But half Earth is basically, like, yeah.
Speaker 1:Just, just black out the sky, put put solar panels everywhere, and then, we'll all live in pods. And most of the humans will die and will basically just be AIs. And that'll be, like, our progeny. And, like
Speaker 2:Darn.
Speaker 1:Maybe that's good for some people. Some people like it. Some people are into that. I mean, they've never been part of
Speaker 2:that whole world. Never been big into that.
Speaker 1:Never been big into that whole that whole matrix world. But he's, like, worried about this, like, genuinely. Like like, we're we're we're kinda joking, like like like, dancing around it, but he he he Ilya definitely is, like, if if we mess this up, we're just gonna be continually optimizing, like, more computers, more computers, more computers, and then you're gonna have solar panels everywhere and robots taking over.
Speaker 2:Okay. Here's a question. And I don't mean this in an offensive way at all.
Speaker 1:Yep.
Speaker 2:I have many family members that struggle with hair loss.
Speaker 1:And do you really go there?
Speaker 2:Is it possible that Ilya doesn't just shave his head because he wants to reach AGI before his hairline reaches the back of his head?
Speaker 1:It is a funny choice, but it I think it's just because he's, like, focused on other stuff. But yeah. I I mean,
Speaker 2:put it on my looking at the mirror every day and you you've got billions of dollars to deploy, and your arch nemesis, Sam Altman, is racing to achieve AGI, and you look in the mirror and you say, look. I maybe have I maybe have, like,
Speaker 5:eighteen months.
Speaker 2:I maybe have eight I maybe have eighteen months before, to, you know, of of a hairline. You know, I gotta grind harder.
Speaker 1:This is disrespectful. I won't I won't abide by this. I think he looks great.
Speaker 2:No. He looks he's an absolute chad.
Speaker 1:He just he just cares so much about the AI. Yep. You know?
Speaker 2:No. And I think that's the right approach.
Speaker 1:Yeah.
Speaker 2:And he wears a suit. An absolute dog. True. An absolute dog.
Speaker 1:Yeah. Again, no t shirts over over here.
Speaker 2:No. I love it. I'm excited to see this round get confirmed, and, I do think this will be a a first of speed running 30,000,000,000 Yeah. In less than a year.
Speaker 1:So check this out. He's running this place. It's a super tight ship. He's very, very worried about, security. And so, most AI startups work hard to get attention, hoping it will attract employees and investors in a highly competitive space.
Speaker 1:SSI operates as secretly as it can out of its offices in Silicon Valley and Tel Aviv. Its bare bones website contains little more than a 223 word mission statement. Candidates who secure an in person interview are instructed to leave their phone in a Faraday cage. A container that blocks cellular and wifi signals before entering SSI's office. One of the knowledgeable people said.
Speaker 1:Most of its staffers aren't well known in Silicon Valley because the company is looking for promising technologists whom Suss Sussgiver can mentor rather than experienced people likely to jump between employers and take what they have learned with them.
Speaker 2:I love that approach.
Speaker 1:Still, Silicon Valley's top investors, including Sequoia and Andreessen, have poured money into the company. The latest financing, which marks a six fold increase from its 5,000,000,000 valuation, is being led by Green Oaks Capital. SSI is in talks to raise funding of 30,000,000,000, but doesn't include the new cash it's collecting, which were previously reported by Bloomberg.
Speaker 2:Were Sequoia and Andreessen in the same round?
Speaker 1:I guess.
Speaker 2:Close. We don't see that much.
Speaker 1:This also feels like super conflicted with aren't aren't they both in x AI too, and they're doing the exact same thing? Like
Speaker 2:Hey. There's no conflicts in the foundation model world. Everybody's in everything. I
Speaker 1:think it's yeah. It is commoditizing. It's drilling. You're drilling oil and, like, yeah. I want piece of that well.
Speaker 1:I want a piece of that well. Like, let me get it all, I guess. I don't know. It just seems like, like, there would be some discussion of like, hey, like, can you not invest in a direct competitor? But, you know, maybe it's dramatically different.
Speaker 1:Like, when you think about the pro like, just the product pacing, like, Grok three is very much like productizing so fast. Like Yeah. Like, grok one was immediately out and then and then embedded in Twitter and you can and we we talked about, like, maybe it gets embedded into Teslas and it becomes the way you you talk to your car. And and it it seems like Elon really, really wants to, like, be product focused. Like, there's the voice mode and, like, all the different features.
Speaker 1:Yeah.
Speaker 2:We've talked about this. The what he sees in OpenAI is not benchmarks. Yep. It is consumer adoption. Yep.
Speaker 2:Right? OpenAI will probably reach a billion, you know, a billion users at some point this year Yep. Somewhere close to that.
Speaker 1:Yep.
Speaker 2:I think even potentially, they could be in the territory of a billion, like, monthly actives Yep. Which is so, so difficult to reach. Yep. And Elon even if Elon got every person on x to download the grok grok app, he wouldn't even come close to that. Right?
Speaker 1:There needs
Speaker 2:to be sort of organic adoption.
Speaker 1:Don't sell them short. I do think Elon could potentially unseat Jimmy John's for number two.
Speaker 2:That's true.
Speaker 1:Unseating is open AI for number one is a tall order. Right. But, never bet against Elon. And just Never bet never bet for
Speaker 2:It's hard to bet against Jimmy John's new hot honey sub. But if anyone can take them down
Speaker 1:It is so funny. It's the next app. App in the app store. No.
Speaker 2:And they hit number one, I think.
Speaker 1:They hit number one.
Speaker 2:They went number one.
Speaker 1:They went number one. Jimmy John's, for some reason, is the number one app in the app store amid all this, like, you know, billion dollar, you know, lawsuits and and fights over well, this is why Ilya is staying out. He's like, I'm not going to release an app until it can just immediately be better than Jimmy Jones.
Speaker 4:Yeah. I'm not
Speaker 2:even gonna try and go consumer. Sorry. They I I'm I'm wrong. They hit number one in food and drinks.
Speaker 1:Okay. Okay.
Speaker 2:Chad GBT is still on top.
Speaker 1:Chad GBT is still undefeated.
Speaker 2:And which is why it's just why investors are willing to pay over $300,000,000,000.
Speaker 1:Well, now now, you know, normally, people would be like, oh, if you have Jimmy Jones on the show, it's no longer a tech show. But now there's a tech angle. So let's get him on. Yeah. Let's get the founder on.
Speaker 1:Jimmy Jones.
Speaker 2:Let's do it. Let's do Jimmy himself.
Speaker 1:Anyway, we got we got five minutes until our first guest is joining. Let's let's let's close this out. You know, everyone's everyone's interested in following all the different cofounders around the world as they build ever increasingly large, foundation models. The interesting thing is, like, you know, we we heard about, what was it? Test time compute, reinforcement learning, deep, deep research, all these different tools that were they clearly came out of ILLIA projects early on at OpenAI.
Speaker 1:I forget what they were originally called QSTAR. Remember Q star. And it was like, it was, this was leaked.
Speaker 2:What did
Speaker 1:that Ilya was working? What did Ilya see? Right. And so clearly he's, he has some ability to put together kind of new algorithmic paradigms. Yep.
Speaker 1:And even though he was people people get so obsessed with, like, are is deep learning hitting a wall? Are you are you scaling Pelt or not? Whereas Ilya was, like, he was both scaling Pelt and went super long, the transformer and deep learning architectures. But at the same time was working on reinforcement learning approaches on top of, on top of, like, the big massive scaled LLMs Yeah. To bring those two together.
Speaker 1:And I think they were kind of I I I guess they were kind of obvious. I was watching a video, earlier from, Two Minute Papers from five years ago from OpenAI, and it's talking about this this this game that they did where they had two AIs on each team. So it's two v two game hide and seek. Yep. And and and they and they play at over, like, you know, a million rounds, they simulate, and, like, they just can't even find each other.
Speaker 1:And then they get into, like, 10,000,000 rounds, and then they start learning these strategies of, like, well, if I go in this in this box, and then I put, like a cardboard box here, and I lock it in place, then I'll start winning. And then and then the other AI figures out that if they take this, like, ramp, they can surf up over it. And eventually, they start, like, figuring out how to, like, break the physics engine of the game and do all this cool stuff. And and that reinforcement learning, obviously, played into when OpenAI played, Defense of the Ancients, DOTA two. Do you remember this at all?
Speaker 1:They did, like, a five v five, basically, like StarCraft. I mean, they also did StarCraft literally. Yeah. They did, they started playing video games.
Speaker 2:Pokemon was the thing that would actually go viral Yeah. And also live streaming it.
Speaker 1:Yeah. Yeah. Yeah. Yeah. And so the the those types of well, the Pokemon thing is interesting because it's not like, they didn't train on Pokemon.
Speaker 2:Yeah.
Speaker 1:It's just Claude.
Speaker 2:Like Also running it running a twenty four seven experiment is also very powerful Yeah. And that you're putting it all out out there. Yeah. It's verifiable.
Speaker 1:Yeah. Yeah. So anyway, I don't know. Ilya, I hope he comes up with something cool. It's it does seem like he's very aligned with safety.
Speaker 2:Oh, to me, this is my Ilya is my bet on what Keith was getting at when we had him on the other day where he said, what comes after the LLM? Yeah. Seems like every other former OpenAI early team member cofounder is working on language models. Yep. It's very possible Ilya is working on whatever comes after that.
Speaker 1:Sure.
Speaker 2:Sure. So very excited to see that play out. And
Speaker 1:Yeah. Like, as the as the AI brain develops, you have the the memory core, the reasoning core, like, Ilya
Speaker 2:is set the expectations so incredibly high saying, I'm not gonna release a product until I, you know, presumably have something that's significantly better than whatever else is on the market. Right?
Speaker 1:Yeah. I wonder how he would even release that. Like, what what would the product instantiate
Speaker 2:itself as? Like We need we need
Speaker 1:It's just another app.
Speaker 2:There needs to be the information needs to send the tech paparazzi you know, outside of the Tel Aviv office, snapping the picture of Yep. Ilya walking out, you know, all secretive. That's the content I want, the information.
Speaker 1:That's great. Well we have You know what he has to do when he he launches this company?
Speaker 2:Billboards? Billboards.
Speaker 3:One o o.
Speaker 1:Because he's gonna have no one's gonna know about this. Yeah. It's one thing if you're in YC and you launch immediately and you're going direct and you're posting, but
Speaker 2:And you go viral for your
Speaker 1:He's gonna have this fantastic product, but he's gonna no one's gonna know about it. So Ilya's gonna have to buy some billboards, and he's gotta do it on AdQuick. So, Ilya, I know you're listening. Go to AdQuick.com. Start working with the team now.
Speaker 1:Also, I mean, honestly, Ilya, you could do some recruiting ads on there. Throw some billboards up. Waterloo, Tel Aviv, Silicon Valley
Speaker 2:There you go.
Speaker 1:Put the billboards up. SSI, we're hiring, but go through AdQuik because they make ad out of home advertising easy and measurable. Ilya, I'm talking to you directly. They you can say goodbye to the headaches of out of home advertising, Ilya. Only AdQuick combines technology, out of home expertise, and data to enable efficient, seamless ad buying across the globe.
Speaker 1:So, Ilya, go to adquick.com. Tell them the technology brother sent you, and, good luck with your new venture.
Speaker 2:And so we're gonna have Jeremy come on the show right now. Yeah. You know, our main advice for Jeremy was to start buying one on one billboards. Start buying one zero one billboards, saying you got a special situation, raise too much money, call mister Grafon. What's up, guys?
Speaker 1:How you doing?
Speaker 4:Good. How are you?
Speaker 1:Have you bought a billboard yet?
Speaker 4:I'm working on it. I'm working on it. I think, I think all the management fees need to go directly into billboards. That's Yeah. That's what I've learned from the most profitable podcast.
Speaker 1:That's great. Break it down for us. What would go on the billboard? What's your business? How do you pitch it to people these days?
Speaker 4:My business is, picking up the the roadkill of the venture industry. The the the startups the startups the the founders that have triumphantly built heroic and wonderful businesses
Speaker 1:Yeah.
Speaker 4:And have gained millions and tens of millions of revenue and built incredible teams and have a wonderful product and customers that love them, but for the fact that they had too much capital, forced upon them. And it has buried them under an untenable prep stack and made the whole business not work and, and left them with no choice but to kind of, get stuck in no man's land. And my my, my mission is to, to to to help those founders get back in control of their businesses and and, and and run them, you know, as fully profitable, cash flowing, great businesses as God intended.
Speaker 2:Love it. Incredible line. I would love to get a sense you know, we spend a lot of time covering the news, and the news tends to fix fixate on these sort of colossal failures and these sort of, moments of glory The
Speaker 1:humane AI pin, for example.
Speaker 2:Yeah. Ex exactly. Yeah. You're seeing the behind the scenes, which is companies that raised a lot of money, you know, maybe three to five years ago that are now in a tough spot. You know, the the the venture world has sort of turned sour on them.
Speaker 2:What is the state of that market right now? How busy are you? I know you spent a lot of the last year raising your first, independent fund. Now you're investing. What what's, kind of happening on the ground?
Speaker 4:Yeah. I mean, look. It's, there's a lot of these a lot of businesses, a lot of great businesses out there and a lot of, like, stuck founders. And, and there's there's more and more of them and, and increasingly a lot more VCs who realize that, like, you know, there is a there is a severe lack of DPI, especially in the middle of the portfolio right now. And so, you know, there's you're starting to see a lot of, a lot of great companies that realize they need probably a different owner, an owner that's more in line with actually, like, their their goal and and their vision.
Speaker 4:And then a lot of funds that are realizing, you know, gross IRR is is all well and good, but eventually, you know, you you you you can only eat the DBI. And, and and that's that's kinda that's that's what the, you know, that's what the capital allocators are starting to demand.
Speaker 2:Have you seen founders that get in that position? You know, they have the opportunity. You know, they're talking to you or they get in a position. Are they ever trying to sort of pivot their business into a better AI narrative and then go back to market? And is that working?
Speaker 2:Or or are they trying that and giving you a callback and saying, yeah. You were right. Like, let's try to figure something out.
Speaker 4:Well yeah. So no. What they're doing is what they're realizing is that they can pivot to AI, and they don't need any more capital.
Speaker 2:Oh, interesting.
Speaker 4:They they can you know, especially if the business was built, you know, four, five years ago, they can replace a lot of their costs with AI. I think, like, every organization should be thinking hard about whether or not they, ought to cap headcount and just, you know, keep headcount at or below where it is and increase kind of headcount, so to speak, through AI. And I think, you know, I think we're we're we're about to see kind of the the renaissance, the bootstrapper. And so I think a lot of founders are are starting to think, like, you know, maybe I can grow my business 10 x without more capital because because of these tools. And so, you know yeah.
Speaker 4:Certainly, you can you can, you know, slap an AI label on and go raise another round. You know, you you you certainly have the founder who's in the, just, just 2 more million bucks, bro. Like, just give me give me 2 more million. Like, I got this. But I think that's a mistake.
Speaker 4:I think I think we're about to see, like, an era of incredibly, like, capital efficient, businesses that, by the way, like, are not giving up growth at all. Like, you can still grow a % a year. And if anything, you could do with a lot less capital. You can own more of the business. You can, like, you know, be a lot more in the driver's driver's seat and, and, you know, really kind of control your destiny versus kind of, lever yourself up as much as I know that, you know, you guys are always in favor of the the max lever option.
Speaker 1:Exactly. Can you walk me through, anatomy of a deal and how kind of the the pref stack waterfalls out on one of these? What are the different, kind of tension points for some pre seed investor who feels like they're sitting on a 10 x or a hundred x, and then someone who got in late and clearly kinda knows they overpaid and just wants to get something back. Like, how do you get all the parties around the table and then think about incentivizing the team going forward?
Speaker 4:Look. I mean, I I think I think one thing founders don't understand or or maybe underappreciate is that, you know, your your cap table ultimate, like, really affects your business in a wide variety of ways that are that are can be kind of very subtle. And so at some point, you know, maybe you go from having a a venture fund as an ideal owner to being a neutral owner. I think a lot of funds are in that stage now where, you know, it's not detrimental to be owned by a venture backed to be owned by a venture fund, but maybe it's not super additive. And then eventually, you get to a point where it can start to become, you know, it can it can detract because just the incentives really diverge.
Speaker 4:And so, you know, what I'm really looking to do is, like what I implore everyone to think about, especially if they're not on a business that's, like, on a clear trajectory to raise, you know, need to burn hundreds of millions in CapEx for some kind of, like, 9 or 10 figure outcome, is think a lot about, like, who are my owners? What are their incentives? And, like, you know, when you get to the board meeting, is it actually is there friction, or are they actually behind me? And I think that's a lot of it. And a lot of it could just comes down to, like, what is the cost of capital of your owners to get a little bit, boring.
Speaker 4:Like, the the cost of capital of, of the people that own you makes a really big difference, for, like, what they expect and what they demand of of your business. And so, you know, it it varies. Like, if you're an individual, if you're, you know, a a pre seed or seed, you're happy to stay in the business. There's no reason for you to sell. You can roll over.
Speaker 4:If you're like a growth fund that maybe did, you know, a somewhat regrettable you know, it's a little bit wake up from the night after the party, look around, there's beer bottles everywhere, would prefer to just pretend that it didn't happen. Maybe you wanna get your capital back. Like, you know, I think, like, oftentimes, the best outcome is just returning capital, which used to kinda be a Norman venture. And because of this, like, bifurcation between huge outcomes and then very little liquidity in the rest of the portfolio, is not happening as much anymore.
Speaker 2:Mhmm. Every vendor capitalist today says they're in the people business. Right? If you ask them, like, to have any type of specific thesis, they just say, you know, we're we're in the people business. That's
Speaker 4:centers. Yeah.
Speaker 2:Yeah. Yeah. So that that's that's generally, the right take. That's that's center's point of view. Are you more in the people business or the value business?
Speaker 2:Because from my lens, you know, you're looking for value. And in in some cases, you're more than happy to let the founder move on to their next chapter and bring in a professional CEO. Is that correct?
Speaker 4:Yeah. I mean, I I I think I'm also entirely in the people business, but it's, you know, is the I think everyone should be, you know, doing their highest and best use, like, following their calling. Sometimes for a founder that's that's, you know, getting more control, more more sovereignty over their business, and really kind of being in it for the long haul, having way more optionality in terms of, like, financing. Sometimes a founder you know, a a a a thing that happens far too much that that no one talks about is all these founders who are stuck. You know?
Speaker 4:If you have 20,000,000 of revenue, hundred employees, and you've raised a hundred million bucks, you can't just quit if you're the founder even if it's clear that, like, what you were trying to do is build the next, you know, DecaChorn or whatever. And so there's a lot of founders out there who are who know. And what's funny is the board knows and the founder knows, but they're, like, not willing to have that conversation. And so, you know, there's a lot of founders who are stuck. And and for those who are stuck and would like to leave but don't wanna abandon the building the the business, I think, you know, there's more options than you think.
Speaker 4:And there's someone out there to get back to the people thing. There's someone out there who is the perfect person to come in and run a business like that. Because, you know, a lot of times the person who takes a business from 20 of revenue to a hundred of revenue can be a very you're looking for a very different type of person than someone who's gonna start it from zero and grow it into a huge business. And so it's really just about, about, like, is this person doing the thing that they're really fired up about? And if they're not, then, like, do you really wanna be in that seat?
Speaker 1:Are there any common character traits or or kind of either even background career paths for that type of operator who's maybe not the founder, but the type of person that can, with pretty high confidence, take a business from 20,000,000 to a hundred million in your experience?
Speaker 4:Yeah. I mean, I think, like, you know, my friend Andrew Wilkinson has has has written a lot about this. I think he he really kind of has it right. You you know, there's a lot of c suite and senior executives at a business that's two or three times bigger than maybe the business you're looking at. And those are people who are, like, highly capable, has at least some entrepreneurial spirit, but maybe they're not, you know, whether by constitution or circumstance, not interested in taking the full risk of a founder, but still wanna be in the driver's seat, want to, you know, wanna run a business.
Speaker 4:And there's actually a lot of talent there that can be unlocked, who are people who, you know, can't do the go through y c y c thing, but still, you know, would love to have real upside, would love to to, to to lead a team and run a business. And, yeah. I think there's actually a lot of really untapped talent there. And, it's kind of an underrated option. It's kinda like how it used to be, like, buying a business and running it if you're, like, an MBA or something was, like, an underrated path to, you know, quote unquote entrepreneurship.
Speaker 4:I think coming in and running a a a a, like, decently sized startup or business, is kinda one of those now that that not a lot of people consider. It's kinda, like, very, like, you're either a founder or you're just an exec, or maybe, like, a Fortune five hundred CEO or something. But Yeah. There's a lot of middle ground. And and I think, yeah, I think there's a ton of untapped talent.
Speaker 2:Question going off that. Search funds got very popular. Simultaneously, it seems like venture the world of venture capital discovered private equity and roll ups. And, you know, we've seen a a number of companies come out the gates, and decide they're going to, basically raise venture dollars to pursue a a PE style strategy. That concerns me, you know, given that, private equity is pretty good at what they do.
Speaker 2:Right? They've sort of, Yeah. Gotten better and better and better over the decades around, you know, finding, you know, fairly priced businesses and making them more efficient and growing them and selling them. What do you think happens to these sort of, software or AI enabled roll ups? And are you, salivating over the potential of of buying them, down the road once they
Speaker 4:Look, I think, I think raising venture to acquire businesses is a great gig right now. You know? It's
Speaker 2:it's Yeah. So so and here's here's why.
Speaker 1:Everything's like the Grim Reaper. Like, if you're if he's excited about something
Speaker 2:No. And here's why. Right? You can if you typically, in private equity, if you wanna if you wanna go buy businesses, you raise a fund, you get two and twenty, which is a great business model. You've talked about this before, Jeremy.
Speaker 2:Sort of the perfect business model. But in the right now, in venture, you can go raise $20,000,000 at a hundred, dilute yourself 20%, and so you actually have much better economics if you're going to, you know, buying up these businesses. And and, eventually, I think that's gonna stop. Right?
Speaker 4:Yeah. And and by the way, there there's there's a hurdle, in private equity, and there's no hurdle in venture capital, which makes the whole thing even sweeter.
Speaker 1:Yep. Makes sense.
Speaker 4:But, you know, I'm I I'm not I don't think I'm a grim reaper. I I I think I think I'm not I think I'm a liberator. I think all these sounded a trap.
Speaker 1:What I'm
Speaker 2:saying is
Speaker 1:that if you're if you if you envision that you're gonna be doing a lot of business in the category in ten years, it's probably a bear signal. Right?
Speaker 4:Yeah. I I think I think it's more, more seeing exuberance. You know? Once the, once the NBA is pile in, it it it might it might be over.
Speaker 5:I love it.
Speaker 4:But, like, look. If you build a business to $30,000,000 of revenue, that's like a heroic feat. It's extremely hard to do.
Speaker 1:I agree.
Speaker 4:And, and then you somehow end up with 8% of it under a $200,000,000 press stack
Speaker 3:Yep.
Speaker 4:That kinda sucks. And I I don't think that's the outcome that anyone is, like, trying to have happen, but it happens as, like, a as a as a kind of, you know, a spandrel of the of the venture industry.
Speaker 1:Yeah. The Grim Reaper is the bankruptcy of attorney. You are the you are the winged angel.
Speaker 4:Yeah. And, you know, there there are there are there are if if you really wanna sell your startup for parts, there are people out there who
Speaker 3:Oh, yeah.
Speaker 4:Can do that with brutal efficiency. And, and they're great guys, but, like
Speaker 1:Yeah.
Speaker 4:I, you know, I'm a fund. I wanna sell these businesses for more money in the future, which presumably means they get more they get more valuable. You know? I'm not I'm not a, I don't want to just like, you know, make toys R us go bankrupt. That's, that's someone else's job.
Speaker 1:But I mean, is, is over the long term, is your business correlated with, like frothiness and volatility, like, in a post froth, post highly, you know, high Exuberant. High exuberance, like, that is a good signal for you. Right?
Speaker 4:Yeah. There will
Speaker 1:be more opportunities.
Speaker 4:I mean, I'm I'm I'm interested in in dislocations, and dislocations certainly happen, more in bubbles or exuberance. Yeah.
Speaker 1:But
Speaker 4:I also think it's happening more
Speaker 1:frequently too. Like, it seems like it's a good model. It it doesn't seem like it doesn't seem like your fund is, like, a one time, like, oh, they just, like, unique case right now. It's like, no. VC is built to do these types of things.
Speaker 1:There needs to be a system to help process the ones that, don't go perfectly, and that's where you can come in.
Speaker 4:Yeah. Well, look. I mean, venture is 10 x in terms of dollars deployed in the last ten years.
Speaker 3:Yeah.
Speaker 4:It's a completely different thing now. You know, just as the biggest firms are turning into PE shops, the biggest venture firms are functionally PE shops.
Speaker 1:Yep.
Speaker 4:There needs to be there there's basically one product in Silicon Valley, and it's, like, primary growth capital.
Speaker 1:Yep.
Speaker 4:And, and, you know, once these markets become bigger, more liquid, more efficient, there needs to be, different kind of different, just as there is in Wall Street or, like, on the East Coast, there needs to be different, products offered to founders, like equity at different cost of capital and and things like that. Again, like, a really basic factor I think people should understand is, like, if you have if your model is to have a lot of zeros in your portfolio, your cost of capital, I e the, like, minimum return that you need, is just really high
Speaker 1:Yep.
Speaker 4:Which, like, creates all these knock on effects. I really think founders would, like, just take a crash course on venture. It would really help them a lot. Like, a lot of really exceptional founders kind of get into bad situations, that they probably, you know, probably, like, thirty minutes with, like, Chad GPC could could really kind of help them avoid. And, like, understand that.
Speaker 2:You should make a rapper. I I honestly think you should make a rapper and just, like, create the the the sort of, product for these founders and say, yeah, anytime that somebody raises around, send them your send them your little wrapper and say, hey.
Speaker 1:Put your term sheet in here.
Speaker 2:Understand what what you're about to embark on, and, it's good lead lead generation for you.
Speaker 4:Yeah. Yeah. I mean, I think a lot of the board members could use the wrapper as well.
Speaker 2:Got him. Okay. Another question for you. Historically, you've been heavily focused on software. You acquired 30 some, odd businesses while at tiny.
Speaker 2:We've seen, new categories attract venture dollars, like traditional basically traditional manufacturing businesses that have some sort of tech enablement. Is there a world in the future where that is, you know, an area of interest for you, or are you all in on software, you know, indefinitely?
Speaker 4:Everything is of interest to me, Jordy. I I I I just love there's always there's always, like, interesting problems to be solved that can that can create, like, Pareto efficient outcomes in in everything. Right now, there's, like, a lot of them in software venture. But, but, yeah, there there will as as long as, like, humans are not even in the driver's seat, but, like, involved, there's gonna be, like, weird, you know, dislocations and and and problems to be solved. It's, like, amazing how many times everyone could be better off if they just, like you know, it's not something that they could it's not something they need a third party to do.
Speaker 4:But, but oftentimes, like, a third party really helps. So, yeah, it'll be it'll be on all kinds of things. I mean, right now, you're seeing the ventureification of Middle America and, like, as all these venture codes start to buy up, you know, vets and and med spas and all these things. Like, venture capital. I'm in, like, I'm in the rural Midwest right now, and, like, you're gonna these people are gonna start to feel venture in a very tangible physical way.
Speaker 4:And I think that's really gonna change, you know, it's just gonna change the industry dramatically.
Speaker 1:Do you have the, you you had a great heuristic for, you know, early detection of potentially great founders being I think you put it as a Stripe account plus high school diploma or something, high school report card. Can you break that down
Speaker 4:and tell me any more
Speaker 1:about that?
Speaker 4:Yeah. If if if you made money online in high school, I I I honestly can't think of an exception, to of someone who's done that and has not ended up being, like, quite a successful founder, in one way or another. This is like the Internet. You can just go on there with a laptop and make money. It's like, you don't gotta do all this.
Speaker 4:You don't gotta, like, go to Harvard and do YC and all that. Like, you can just go on there and, like, drop ship stuff.
Speaker 2:Make something that makes money. That's the new tagline.
Speaker 4:Yeah.
Speaker 2:What's your what's your read on, general catalyst exploring an IPO? It's been something that everybody's sort of waiting for, the first sort of scaled venture fund, to go public? Do you see all the big firms going that direction over time, or is it gonna be a pretty, binary in that, you know, Andreessen stays private forever or blah blah blah? Or or, you know, what what does that look like?
Speaker 4:So I think, like, one very simple cut at this is just firms that are started by founders versus firms that are started by investors. So, you know, Mark and Ben, they're founders. You know, GC, it's also founders. You know, David Fialco, obviously, an entrepreneur. And so I think, like, I think it's it's kind of expected to see that when a founder starts a business, even if it's an investing business, they're doing it to why does any founder start a business?
Speaker 4:To grow a big business. And, you know, I I thought I thought Mark, Andreessen put it nicely in in in, on on on Patrick's podcast when he talked about, you know, you can be a small partnership that generates some good returns and then kind of is, relegated to, to to some Wikipedia page. Or you can build, you know, Goldman Sachs or JPMorgan or or, Andreessen Horowitz. You know? I think it's also in the name, like, you know, I think I think they they, like, put put a lot of clues there.
Speaker 4:So, you know, I think founders great founders are just gonna build big, important businesses. And, you know, your business can only really get so big if you're actually in the business of, like, true alpha outperformance. You can't, you know, build, JPMorgan or Goldman Sachs or something.
Speaker 1:Do you think that there's, potentially alpha in getting into one of those big VC firms but not in an investing role and instead going into an operating role, like what you see as an, you know, not a deal team, but operating partner at, Bank Capital or Texas Pacific Group or any of the large PE firms, assuming that these these large organizations are gonna wind up actually operating more like PE firms, not just at financial scale, but in terms of their behavior. And so you're gonna come in and and reliably be CEO of of port, portfolio companies that are coming in through, like, the PE arm, essentially.
Speaker 4:Yeah. I mean, I I I think, you know, I think it's like joining, you know, joining Goldman in in this in the seventies or eighties or something. You know, it it kinda depends. It's actually kinda funny. This is, like, kind of a niche thing, but it's very interesting to me how COOs at funds are either, like, incredibly important heroic individuals that the firm would explode without
Speaker 1:Yeah.
Speaker 4:Or they're, like, completely back office kind of, like, low status. No one likes them. And they're also either they're either, like, extremely well paid or really badly paid. It's just, like, it's one of these very, like, high variance roles. And I think it depends a lot on the culture of the firm.
Speaker 4:And so, yeah. I mean, I would argue that, like, a lot of these firms, most of the people there already are not, you know, strictly investors in the sense that they're not making, you know, judgment based capital allocation decisions. There's research and all different and portfolio support and all this stuff, which is, like, you know, not what you would have thought venture was in 02/2005.
Speaker 1:Yeah. Yeah. I mean, I guess you just mentioned, like, the idea of, like, having a venture owner, is not the right thing, and that's where you come in a lot of times. But in the future, some of these firms might actually kind of set up shops to become better owners of Yeah. Turned around assets essentially.
Speaker 1:Right?
Speaker 4:They already are. I mean, Sequoia Heritage, you know, Sequoia Heritage is is, significantly, or maybe not significantly, but it's, like, roughly the size of Sequoia.
Speaker 1:Yeah.
Speaker 4:I know Andreessen's doing a kind of a Sequoia Heritage thing. GC is, like, they're all just starting to be a giant at some sense, at subscale, you just become an asset manager, and really what you're looking for are, you know, different fee paying products, basically. And, like, you really can
Speaker 3:think about it.
Speaker 1:Yeah. I mean I mean, I guess there's still there's still, like, a decision to be made between, like, oh, it's like an index fund, and they're just gonna, like, blindly take a slice of everything versus they're gonna like, that's kind of been, like, the the meme around Andreessen a little bit is that they're just, like, in a lot of deals. But then you have general catalyst where it's like, we're buying a hospital network, and that's much more like private equity. And so I understand that, like, all of this is going towards, like, venture becoming asset managers, proprietary, prop desk. Right.
Speaker 1:But they don't have as much high frequency stuff as Jane Street. Right. There are different strategies. And so it'll be interesting to see, like, where each fund kind of goes, I think.
Speaker 2:One more one more question for you. Mostly a prompt because we were talking about this in, in a group chat. I think, a week ago. There was a chart showing some of these new, AI startups and their sort of revenue milestones. You you laid out very clearly.
Speaker 2:Somebody was basically somebody in the chat, I think it was Bill, said something to the effect of, are are we short all of these? And, you know, I've kind of, like, struggled with the question because people get a tremendous amount of value out of these products. They love them. They they've they're it's real revenue. It's real customers sort of trading dollars.
Speaker 2:You fired back and basically said iron law of the universe, easy come, easy go. Maybe just kind of extract extrapolate that in the context of the, you know, current AI market.
Speaker 4:Yeah. Look. I mean, I I I'm sure some of them will be great businesses, but it it it does seem very true to me that just, you know, anything that can be done very quickly can sort of be undone. And I think you're seeing that. I mean, I think all the kind of, like, IDEs, the best one changes from day to day.
Speaker 4:The switching cost is pretty low. Like, these are very smart teams. I'm sure they will come up with, motes and and, and and, you know, stickiness and all that kind of stuff. But I think, you know, I I think it's kind of like, if you think about, you know, the Internet, it's like, yeah, everyone's gonna rush to use the Internet enabled version of x y z thing. But is does that mean, you know, there's the, the idea that, like, Google is the last search engine, not the first.
Speaker 4:Right? And so I think, I think for a lot of a lot of the companies where it's just like, I wish I had an AI version of this. I want like, the consumer intent is, like, I want to buy an AI version of this. Not like I want, you know, you know, pick your pick your kind of specific AI business. And so, you know, I think some of them will make it out, but I think a lot of them, will not because it's just that's just what the rush is.
Speaker 4:It's like, anyone who can add AI into this is adding so much value that I'll just, like, buy it. I mean, I I know, like, I pay for, you know, whatever, six different models. Like, that's probably not gonna be true in three years. Right? Like, there's probably gonna be one that I'll end up paying for too.
Speaker 4:There's certainly no reason to pay for six right now. And so yeah. And, like, if, you know, if someone launches a slightly, like, an incrementally better model tomorrow, they're gonna get my $20 a month Yeah. Until, like, you know, until they don't. And so, yeah, I don't know.
Speaker 4:I I just I I can't think of an example where, like, a whole class of businesses have cropped up, grown immensely quickly, and then kind of just been the new equilibrium. You know, that that's certainly not what happened in the.com. There's some exceptions, but in general.
Speaker 2:That makes sense. We have a couple minutes left. How are you thinking about building your firm? Are you hiring for any roles right now? What does the future look like for Giffon and company?
Speaker 4:Yeah. You know, it's it's very interesting. I've I've been, I've been, dutifully studying the, all the great solo GPs of the venture world and and and analyzing their their setups and everything. I think it's very compelling. I think asset management is actually a great, like, AI use case.
Speaker 4:So, yeah, I think, you know, the answer is yes.
Speaker 1:I'm hiring, a a a
Speaker 4:little little Tech Bros exclusive here. I'm hiring, exclusive here. I'm hiring
Speaker 2:There we go. Breaking.
Speaker 1:Breaking news.
Speaker 2:Scoop. Scoop. This week.
Speaker 4:Put the chyron up. Yeah. Yeah. I'm I'm I'm I'm gonna make one hire. I'm looking for, like, an investment principle, someone who's super smart, wants to, you know, be kind of the first hire, keep the team really small, you know, a lot of economics to carve up, and, you know, basically, like, I am I have more deal flow than I can handle right now, and what I need is is help, basically.
Speaker 4:And so, yeah. You know, if it just wants to be someone who joins me and then, me and me and them and 30 AI agents, you know, allocating capital, if that sounds appealing,
Speaker 2:you can reach out.
Speaker 1:Well, we have our next guest on the line right now. Thanks, Jeremy.
Speaker 2:Jeremy, thank you for coming on.
Speaker 1:We'll talk to you soon.
Speaker 2:We love you. Love you guys. Talk soon.
Speaker 1:This is fantastic.
Speaker 2:Nick, welcome to
Speaker 1:the show.
Speaker 5:Welcome to
Speaker 1:the show.
Speaker 5:Hey, guys. I I didn't mean to kick off the last night and You're all good. What's that? Booted. Up.
Speaker 1:Booted. I
Speaker 5:was three minutes early.
Speaker 1:You're all good. How are you doing?
Speaker 5:Doing great, man.
Speaker 1:How how did investment committee go, breakdown? Introduce yourself. What is what what do you do? And then what does investment committee mean on a Monday? Like, what who who's in the meeting?
Speaker 1:What are you talking about?
Speaker 2:Yeah. And a little asterisk first. Yeah. Nick just started lent, and he's not he's giving up nicotine. So he's he's said he's a little bit grumpy today.
Speaker 2:Yep. But we're gonna we're gonna turn it around because we're gonna eventually talk about core weave Yeah. Which is, maybe a a 2,000 bagger or something. And Exactly. I was trying to run the numbers on it.
Speaker 2:But, how how did investment committee go?
Speaker 5:It was good. Yeah. And we're actually having I am having a poly crisis with all the the companies that I'm on the board of. So that part's not good. So never become a venture capitalist.
Speaker 5:You know what? I don't advise it to any young folks listening. Don't do it. Okay. Go become an artist
Speaker 2:or something.
Speaker 1:Become an
Speaker 2:artist. Become an artist.
Speaker 1:What kind of art should the fans do these days?
Speaker 5:What's that?
Speaker 1:What kind of art is not gonna be immediately commoditized by AI?
Speaker 3:I don't know.
Speaker 1:Like sculpture? I think you
Speaker 5:just have to learn to work with the AI.
Speaker 1:You know? Okay. Yeah.
Speaker 5:You know, look at Grimes.
Speaker 1:Little sitar model?
Speaker 5:There's the Grimes AI, but people still like her. You know?
Speaker 1:That's true. That's good.
Speaker 2:How often do you take a board seat when you make an investment? Is that, you you sound like future investments, you may just write the check and say, you know, good luck.
Speaker 5:No. Don't say that. No. I can't have I can't have potential investees hearing that. No.
Speaker 5:No. No. I'm on five boards. Okay. I've yeah.
Speaker 5:I got capacity. You know, I got I got some space still. So, if I'm leading and it's my deal, then we try and lead most of our rounds, so I will. I do we do end up on a lot of boards for sure.
Speaker 1:Wanna be on a public company board at any point? Like, you know how Andreessen has visibility into Facebook, and that's just, like, alpha for the entire portfolio. Right?
Speaker 5:Yeah. And I think they pay you as well. So that that part's nice. So I don't get paid to be on
Speaker 1:Well, maybe maybe CoreWeave will bring you up. We'll bring you back. You know?
Speaker 5:I'm silently hoping that they're gonna
Speaker 1:Make your pitch.
Speaker 5:Asking me to be on the board.
Speaker 1:Explain the business to us. And if they like how you explain the business, then you're on the board. Boom. We'll send them this clip.
Speaker 2:Yeah. We'll tell them the technology brothers, collectively requested that Nick be added to the
Speaker 1:board prior to the
Speaker 2:IPO Yeah. And get a little, Yeah. Maybe maybe I mean, let's just bring I'm a very
Speaker 5:small shareholder. Yeah.
Speaker 2:Right. Right.
Speaker 5:For now.
Speaker 1:Could start building that position up there.
Speaker 2:When did you invest in CoreWeave? What were they doing at the time, and what are they doing now? It's obviously been in the news, but I would love to hear it from you.
Speaker 5:What a fun story, man. It's my first angel, investment ever. What?
Speaker 1:Yeah. It was a it was a good
Speaker 5:way to start becoming an angel investor.
Speaker 1:I see.
Speaker 5:So I have, like, over 50 now, but that was my first. And I was not accredited at the time. I mean, you know
Speaker 2:Dirty dog. You don't Dirty dog.
Speaker 5:No one checks. Okay? That's the trick. No one checks. Yes.
Speaker 5:He's he doesn't check. I don't think I even had the money to make the investment at the time. I think I borrowed it from my dad
Speaker 2:to know. Amazing.
Speaker 5:And I had met these guys because we were mutual haters of Ethereum.
Speaker 2:Wow. So
Speaker 5:we we hated Ethereum proof of stake specifically, and I think I found them on Reddit. And, Brian Brian Ventura, he was posting on Reddit about how proof of stake was stupid and bad because they were ETH miners. Right? They were mining ETH. They're against the transition of proof of stake.
Speaker 5:And I was as well because I just love proof of work and hate proof of stake. So we we we, you know, we were kinda strange bedfellows. And then, you know, they were just mining ETH. That's what they were doing. They had a different take on it than other ETH miners.
Speaker 5:They used more high end Nvidia's, which became very important later versus other ETH miners used AMDs, more commodity commodity AMDs. And then, they we became friends. I became friends with Brandon and Brian and mostly centered on our our our mutual shared disdain for Ethereum Ethereum culture. They had, like, a very, like, weird relationship with Ethereum. It was all their revenue, but also they just, like, had a very antagonistic relationship.
Speaker 5:And then they pitched me the idea of of to repurposing their GPU hardware just, like, idling by mining ETH and other proof of work crypto assets. And then, also, you know, on a more bursty basis doing, like, rendering and stuff.
Speaker 1:Like CGI?
Speaker 5:Yeah. Yeah. See, yeah, like Blender. So that the AI wasn't even in the conversation Yep.
Speaker 1:Yep. Yep.
Speaker 5:Wasn't even in the discussion. This is 2018, though.
Speaker 1:Yeah.
Speaker 5:No one Was this except for Goran knew.
Speaker 1:Yeah. What what what was this related to the the render network, like like the octane renderer, RNDR? Was that a thing? Or is this just, like, general purpose rendering for do do you know?
Speaker 5:What they pitched me was, like, they were gonna, like, go to the Blender conferences and be, like, the industrial, HPC farm for Blender
Speaker 1:Yep.
Speaker 5:And, and movie studios and whatever. And that sort of happened, actually. But then, so I I did the the first round in which they raised capital. I I think it was, was the only, like, VC to be on the cap table. I did it personally.
Speaker 5:I actually brought it to the fund, and we didn't do it because it was seen as outside of scope, which was a catastrophic mistake, obviously, worst mistake of my career by far. Like, I just ran the math that I did the numbers on it and Yeah.
Speaker 1:It would have been big.
Speaker 5:Alright. It was our first fund. Fund one would have been a 50 x fund on that alone. Wow. If if we'd done that check.
Speaker 5:So, that was that was a miss. And then, then, you know back
Speaker 1:then? Like like, why was it not in scope?
Speaker 5:Because we had done some crypto mining stuff, and then we got got really turned off by it.
Speaker 1:Okay.
Speaker 5:And, you know, we invest in, like, more, like, asset light crypto businesses. So mining, we thought, was totally out of scope. And the whole pitch was we're gonna stop doing crypto and pivot into this other stuff.
Speaker 1:Yeah. Makes sense.
Speaker 5:So then in 2019, they almost went out of business because ETH moved to proof of stake. So all the proof of work market for GPUs ceased to exist. And but right around the same time, all of these early applications for LOMs, like transform based LOMs came out. Like, GPT two was actually really big for them, because, there are all these apps that are built on it, like, AI dungeon, if you guys remember that. I think that was 2019.
Speaker 1:You
Speaker 5:guys remember that?
Speaker 1:Yeah.
Speaker 5:That was my first it, they were like, yeah. This thing's going crazy. Like, the usage is hockey sticking, and I played it. I'm like, oh my god. Like
Speaker 1:Yeah.
Speaker 5:Wow. This is actually, like, amazing technology. Like Yeah. That's when I realized l m or, like, you know, the transform model was was gonna, you know, change the world. And so then that just hockey stick, and they obviously did an incredible job of being creative about financing.
Speaker 5:And, you know, Magnetar was obviously a a a great, you know, capital partner to them in many different ways over the years. And, technically, they've delivered It's not it's not an undifferentiated product. It really is, you know, they built with the idea of HPC big performant synchronous HPC clusters in mind when absolutely no one was doing that. None of the hyperscalers were doing that. And then now, of course, everybody's realized AI specific data centers make sense, but Coru was really the first Yeah.
Speaker 5:To do it. And so, you know, they've they've been able to lock in, you know, long duration contracts. So so they've done very well.
Speaker 2:Yep. Very cool. Changing subjects a little bit. I want to go back to it feels like a year ago. It wasn't that long ago.
Speaker 2:What was the vibe at the crypto ball which you were at, once everybody started realizing that the the incoming president had launched a token?
Speaker 5:No one knew at the ball that the Trump coin had launched, or maybe others knew, but I certainly didn't know. I think it launched around 9PM, and I didn't get out of there till, like, 11:30. And, it was too late.
Speaker 2:There wasn't people were at the ball just hanging out, having fun, and people weren't realizing what had happened yet?
Speaker 5:Nobody that I knew at the ball knew. I certainly didn't know. No one was talking about it, so I felt that we were rug pulled, actually, by doctor Tom.
Speaker 2:Yeah. Because because most most conferences, there's quite a lot of people just looking down at their phone the whole time because it's just not that. And, obviously, this wasn't a conference. It was a party. But, the the timing was hilarious.
Speaker 2:And then and then the lesson from this last Sunday was if there's ever anything White House related, you know, any type of crypto event, expect some, expect some big news. I thought you had some of the best takes on the strategic, crypto reserve. Now that a few days have passed, have any of your thoughts changed? You know, you're generally, not super excited about it. You had written a post before that you were sort of broadly against it.
Speaker 2:What's your thinking, on today, March 5, and and where does this all go?
Speaker 5:Yeah. I mean, we're gonna find out on Friday what they're really proposing or thinking. I think there's so many unanswered questions. Like, how are they gonna pay for it? Is congress gonna have to authorize?
Speaker 5:Are they just gonna hold the seized Bitcoin? Are they gonna sell the seized Bitcoin to buy Cardano? Is that really gonna happen?
Speaker 4:I mean,
Speaker 5:can you imagine?
Speaker 2:Hey. Portfolio rebalancing. You know, it's strategically important for The United States to, you know, diversify.
Speaker 5:Yeah. I mean, really, like, if if they can't find some Ersatz way to finance this thing without asking congress, because they can't ask congress. Let's be real. Congress is not gonna pass this. Yeah.
Speaker 5:So okay. Are they just gonna use the Bitcoins that hold 200,000 Bitcoins? Okay. We wanna do a basket of Bitcoin, Cardano, ETH, Solana, Ripple. So you're selling Bitcoin to buy Ripple and card that's crazy.
Speaker 5:Come on. So we're gonna find out what David Sacks has up his sleeve. I mean, I like the guy. I think he's smart. I don't know how this policy came to be.
Speaker 5:I don't support it. Continue to not support it whether or not it's just Bitcoin or Bitcoin in a basket of other crypto assets. It doesn't make sense at all. I there's no strategic purpose to, owning crypto at the government level. Other strategic assets that we hold are commodities that are, like, hard to acquire in a pinch if we have liabilities to nominate those commodities.
Speaker 5:Right? We it makes sense to have a petroleum reserve, makes sense of a tungsten reserve, a uranium reserve, even medical equipment, agricultural commodities, whatever. Where is the industrial need to own Bitcoin or Ripple or Cardano? There is none. So I just don't understand.
Speaker 5:The whole thing seems totally incoherent to me.
Speaker 2:What, I think we share the same point of view on Sachs. Do you think that he is having real influence on the sort of messaging coming out of the White House related to crypto, or is he finding out live like the rest of us?
Speaker 5:I think if it was just up to Sachs, we wouldn't be talking about the reserve. There wouldn't be a Trump meme coin. Yep. World Liberty five wouldn't be as big as it is. What other crazy stuff did Trump do with crypto?
Speaker 5:I don't know. I mean, I've just been hoping that Trump would just fire Gensler, put in Atkins, and then never say the word crypto ever again. We'd be so much better. Instead, he's, like, hugging us to death. Yeah.
Speaker 5:You know? And I don't know where it's coming from. I don't know. Is it Baron? Is it Eric?
Speaker 5:Is it Don? Who's doing it? Who's who's the puppeteer? Whoever it is, they need to stop. Hopefully, Sachs can put an end to all this nonsense.
Speaker 5:I just Yeah. It does feel like it for Trump to care.
Speaker 2:It does feel like a distraction from the other side of Sachs's responsibilities, which is the, AI stuff.
Speaker 1:We heard we heard a good take, on the on the, strategic crypto reserve yesterday that I wanna get your feedback on. Trump is known for coming out of the gate hot with a very aggressive proposal. Canada is gonna be the fifty first state, and then when all things are said or done, it's like a 5% tariff or something like that. And and so the the idea here was, hey. Maybe their Cardano thing is is this opening salvo of craziness that winds up just being pure Bitcoin reserve.
Speaker 1:Do you think that's strategically four d chess possible? I know you're still against it even if it lands there, but is it possible that that's what's happening here?
Speaker 5:Yeah. Certainly. I mean, the thing is I kind of, like, disagree with the premise of the question, though. Like, everybody says this is an amazing negotiation tactic, but, like, I make deals for a living. Right?
Speaker 5:This is what I do. If a founder came to me, they're like, yeah. You know, we're we're raising a pre seed. It's a hundred million dollars pre money.
Speaker 1:Yeah. And
Speaker 5:then they expect to get negotiated down to, like, 50,000,000 or something. I'm like Yeah. This person is clearly insane and not, like,
Speaker 1:trustworthy, and I don't wanna do that. Track record of doing just that, and it's, like, very public.
Speaker 5:I mean, yeah. Look, Trump, he wrote he wrote The Art of Deal. He's a great deal maker. Whatever. I still don't like the strategy.
Speaker 5:I think it sucks. What about just, like, being a fair and honest broker? You know? Like, what about that? Yeah.
Speaker 1:Yeah. Yeah. That's totally fine. Yeah.
Speaker 2:Does Trump launch another crypto project while in office? Well, are you, are you or you think he's he's had enough?
Speaker 5:So he's launched, what, four, five in
Speaker 2:He's close since '6, if you count. October. Melania. Oh, yeah. Four since October.
Speaker 2:Right?
Speaker 5:So there's World Liberty five. There's Trump coin. There's Melania coin. There's the reserve, which kind of is a project because there's probably something else that I'm forgetting.
Speaker 1:Sure.
Speaker 5:NFTs. Here's Trump NFTs. Yep. Two editions, actually, not just one editions. To be clear.
Speaker 5:Because I know a lot of behold, it's the first edition of the Trump NFT. They're very upset at the second edition.
Speaker 1:Oh, okay. Yeah.
Speaker 5:So Dilution and the Trump NFT.
Speaker 2:Yeah. Market.
Speaker 1:I yeah. Everyone says immutable or, you know, no no inflated supply, no inflation. But when you issue a whole new batch, of course, you're gonna dilute.
Speaker 5:That was the problem with Melania too. I mean, look, if we extrapolate this, it'll be four 5,000 Trump's crypto projects by the end of this.
Speaker 1:They're growing exponentially. The supply of Trump of Trump's crypto projects is growing exponentially.
Speaker 5:He loves it.
Speaker 2:More broadly, where does crypto go from here? It's sort of it feels like a very interesting moment because it's never had more attention. It's never had more users. It's never had more adoption. Right?
Speaker 2:Even, you know, with stable coins, things like that. Yet the, the vibes are are bad. Right? Like, it it there's a and and the price action is not what you would expect out of the government saying, you know, we're gonna start buying these these assets. Where does it go from here?
Speaker 2:How are you thinking about it as a as an investor?
Speaker 5:I think markets are calling Trump's bluff. I actually don't think we're gonna see a reserve. We might see a stockpile. I don't think we're gonna see a reserve where this where you're using government taxpayer funds regardless of how they're accounted for, whatever accounting tricks they use. We're not gonna see taxpayer funds used to buy crypto assets.
Speaker 5:That's crazy. Okay? That's not gonna happen. Markets are calling us bluff. Also, you know, risk markets are going crazy.
Speaker 5:Every's everyone's worried about the tariffs and inflation.
Speaker 1:Yep.
Speaker 5:And, you know, recessionary signals, whatever, that probably explains a lot of the sell off too. Vibes are really bad in crypto because the big, l one launches of this year have not done well. Meme coins are dead as a category. Even though we have sort of, like, emerging regulatory clarity around it, like, the retail bid's just not there. I think retail got hosed one too many times.
Speaker 5:Yeah. So they're just not willing to do that. They don't wanna buy the, you know, $30,000,000,000 FTV hot new l one that Andreessen put $400,000,000 into. Right? Nobody wants to do that.
Speaker 5:Okay? There's no ultimate bias. It's just VCs buying from other VCs now with a lot of these launches. So in terms of liquid tokens, yeah, like, everyone's down bad. The cycle didn't happen.
Speaker 5:Bitcoin did well. Nothing else happened. There was no alt season. Right? So the framework people have this mental framework that's wrong that cycles have to happen in a certain way, and they happen every four years, and it plays out like this.
Speaker 5:It didn't happen like that. In terms of, like, actual usage of blockchains, like, it couldn't be better. Stablecoins are taking over all of fintech, all of global finance, all banking remittances, b to b, you know, international trade settlement. Like, my corner of the world, the little Stablecoin corner, we couldn't be happier. But most people in crypto don't care about that.
Speaker 5:The coins matter, and, the coins might be dead for generation here. So
Speaker 2:Yeah. How are you thinking about net new stable coin investments? Where are the opportunities? Obviously, anywhere that money, you know, fiat moves today is an opportunity for stables. But there's now been a bunch of teams sort of tackling, you know, these various areas for a while.
Speaker 2:Are you making a lot of net new kind of pure stable coin bets, or are you kind of letting your bets, ride?
Speaker 5:Yeah. I have wires going out for two new stable coin related deals this week. So we're at 19 now in our portfolio, I believe. If you if you looked at the stable coin stack, I don't know how exciting this is, but, you know, there's the issuers, then there's, like, the infrastructure, like, the intermediaries, like, the b to b stablecoin startups, then you have, like, consumer, which are, like, fintechs built on stables. The issuer game is, like, immensely competitive and the domain of banks and consortion now.
Speaker 5:So, like and also, basically, no one's ever created a new stablecoin issuer from scratch done well except for probably Athena. I mean, Tether and Circle dominate. So that one's very hard. The BNB stablecoin payments, like the PSP, stablecoin based PSP thing, immensely commoditized. There's a hundred new bridges.
Speaker 5:Right? Everybody wants to be the next bridge. Very, very competitive, very hard, gonna be thin margin. I'm looking at, you know, weird stuff like, you know, the banking layer itself. Like, you know, how do you incorporate, stablecoins into the core banking infrastructure?
Speaker 5:We're still looking at regional fintechs that have a stable coin angle. Like, that's very interesting to me. But so you're looking for moats. Like, that would be more of, like, maybe regulatory driven moat or or local network effect, something like that. But, yeah, I think just, like, tossing checks into the next bridge, that that's probably gonna be a losing strategy.
Speaker 1:Is is TradFi even trying to move to stable coins in a meaningful way? Like, in AI, you know, we see yeah. Chat GPT is dominant, but there's Gemini and and Copilot from Microsoft, and every hyperscaler has their products baked in. Is Western Union thinking about working on this, or is it just, you know, just completely the trains just passing them by because it's more complex from the regulatory perspective.
Speaker 5:I would say the major fintechs, non bank fintechs are very interested. They're looking at making acquisitions.
Speaker 2:Sure.
Speaker 5:The remitters are either being disrupted by stablecoin remitters or building their own.
Speaker 1:K.
Speaker 5:So for sure that's happening there. The big credit cards like Visa and Mastercard are pretty active. Like, the big global payments networks, are, I would say, all looking at it. The last bastion, those banks, the domestic banks, foreign banks are actually doing a lot of stablecoin stuff depending, like, look at the source gen or standard chartered, tons and tons of stablecoin stuff. The domestic banks have PTSD from what happened over the last two years with Chokepoint.
Speaker 5:They are very afraid. I think many of them would like to be in the business of either issuing a Stablecoin or being a service provider for stablecoin, being the first mile. Yeah. That's gonna take a lot longer. They're they're still afraid that the Fed is gonna destroy them if they so much just think about stablecoins.
Speaker 1:Is it shifting from, like, regulatory arbitrage to more just like, I don't know, like, yeah. Yeah. Whatever the inverse of fear, like, boldness, courage, arbitrage. Like, if you're if you're courageous, there's an opportunity right now.
Speaker 5:I think so. I think so.
Speaker 1:That's good. That feels good.
Speaker 5:There's still a regar, actually. I mean
Speaker 1:Yeah.
Speaker 5:Of course. People say regarb to mean crime. Like, I don't see it that way. You know? A a lot of, like, fintech thought leaders on Twitter will say that, like, oh, you're just doing regarb.
Speaker 5:Like, you're you're just criminal. Yeah. I mean, Stablecoin, there will be questions asked of how Stablecoins work from a KYC and surveillance perspective. That's actually not settled. That's a big gray swan hangover of the industry.
Speaker 5:People don't really talk about much.
Speaker 1:Gray swan. I've never heard that term before. I like that.
Speaker 5:It's like It's like a black swan, but some of us know
Speaker 1:about it. It's a known it's a known unknown. Not an not an unknown unknown. Gotcha.
Speaker 5:Yeah. Grace swans.
Speaker 1:Cool. Like that. What other gray swans are out there?
Speaker 2:Yeah. Gray swans.
Speaker 1:Give me your top five gray swans.
Speaker 5:In crypto or just in general?
Speaker 1:Yeah. Yeah. In general.
Speaker 5:I only know about crypto, so I'm gonna limit my
Speaker 1:Okay. Let's go.
Speaker 5:Tether has the top gray swan in crypto. Some kind of Can you explain that?
Speaker 2:We we have some crypto investors and entrepreneurs in the audience, but I would say it's not the the average. So why is Tether so sketchy? I know the answer, but I'll let you kind of explain.
Speaker 5:Yes. I mean, you know, they made they did some, like, let's say, light accounting fraud in in the past. Yes. You know, they were hacked for $850,000,000, and then they, Bitfinex was or is it Bitfinex or Tether? Anyway, they commingled their balance sheets.
Speaker 1:Yeah.
Speaker 5:There's, like, a weird Ersatz promissory note alone type thing. I mean, look, they're just an offshore dollar that serves people to want dollars on the blockchain in a kind of lightly surveilled way outside of the contours of The US banking system. So, of course, they're gonna be used by a lot of insularious people. That's that was always gonna happen. And, you know, so The Wall Street Journal is always gonna be dig digging up examples of kinda nasty criminal use, and there's only so much activity they can flag and freeze.
Speaker 5:So that's just that's really it. Obviously, the reserves have been questionable in the past. I think they're fine now.
Speaker 2:Mhmm. But, in their bank account, you know if they got hacked for 850,000,000, they just make so much money that presumably they would be able to cover the the hole in the balance sheet. Is that the idea?
Speaker 5:Well, that they could do today. Yeah. I mean, the reason of the hack was they were forced into it because no US bank would really serve them. So they had to use these sketchy banks, and one of them scammed them, basically. So, like, the sketchiness, it like, the fact that they've been sketchy is also kind of a function of the fact that the DOJ is, like, chasing them around.
Speaker 1:Yeah. Yeah.
Speaker 5:Because they're, like, forced to use some of the worst intermediaries on the planet, if that makes sense.
Speaker 2:Yeah.
Speaker 5:Now they've been able to legitimate themselves. Now they have Cantor Fitzgerald. They hold all the treasuries. Like, that's probably fine. But in the past, that's that's, like, the thing that people don't understand about Tether.
Speaker 5:The reason that they looked sketchy sketchy and they, like, wouldn't disclose what banks are using, whatever, they were untransparent, was kinda because they were playing this cat and mouse game with US government.
Speaker 2:That makes sense.
Speaker 1:Any other gray swans?
Speaker 5:Oh, well, if Coinbase's custody setup gets hacked or anything happens, they custody hundreds of billions. They were the really the main custodian for all the ETFs. That would be, like, absolutely catastrophic for the industry. I don't expect it to happen, but that's that'd be bad.
Speaker 2:Yeah. Is there I'm curious if you're looking at businesses, there seems like some of the biggest opportunities in crypto outside of stable coins are just solving, like, the security problem. Right? And the and the the lack of, you know, once funds are on chain, they can move around instantly. Right?
Speaker 2:You know, we saw that, with, what's the firm that that got hacked for 1,400,000,000.0? Oh, Two months ago. Bybit. Bybit. Yeah.
Speaker 1:We saw
Speaker 2:that with Bybit. Right? There's not a lot of recourse there. Is there opportunities around security in this sort of broader sort of, like, fat finger issue? We talked about this, you know, yesterday in the context of Citibank, you know, accidentally, sending you know, they're constantly, sending money around sort of not actually sending dollars, but, like, these dollars are sort of appearing in in client accounts.
Speaker 2:Are are you looking at opportunities, where software and can kind of, like, solve for that, or is that just gonna be kind of a ever present sort of risk in the industry?
Speaker 5:Yeah. So first of all, yes. Cyber is actually one of our biggest investment themes on a go forward basis. So we we think that we've really underinvested in, like, security in the crypto space. Second of all, what I think we should do is take crypto away from being a real time gross settlement network or, like, a bearer asset, a digital bearer asset, and then make it more like the way that traditional finance works.
Speaker 5:I know, like, people like Matt Levine are gonna, like, make fun of me for saying that. Like, oh, you're just rebuilding traditional finance from scratch. Yep. My answer to that is yes. That's exactly what we're doing.
Speaker 5:Okay? But instead of working with, like, fax machines or whatever and, like, weird file transfer protocols that predate the Internet, we're gonna do it on a better substrate. And we're gonna introduce this amazing thing called deferred settlement where you don't sell the payment instantly. And in so doing, you obtain scalability and you can't obtain recourse. And so if we're able to create, like, pull payments as opposed to push, you know, all crypto payments are push, that solves a lot of this problem.
Speaker 5:If we create a messaging layer alongside the settlement layer, you know, like, that that's what swift is to wires. Right? It's the messaging layer to the settlement layer. Yep. You know, all of these structures that are to like, make traditional payments work and be safe and have recourse, They just don't exist in crypto.
Speaker 5:It's it's so weird. Like, if you were to examine the crypto market with first principles, you'd be like, this is garbage nonsense. I don't know how anybody uses it. I don't know how anybody trusts it. So, yeah, it's just a matter of making it more like traditional payments and finance.
Speaker 5:So that's the next chapter here. Yeah.
Speaker 2:I mean, I I don't think it takes away from, you know, we we built an alternative to traditional financial rails, and we did it in, you know, I say the the collective. We we did it in fifteen years, and it's moving hundreds of billions of dollars around the world. And, it's showing a lot of potential, and I think it's totally I think your point of view, and and I share this view is it's okay for just sort of, making a better version of of the sort of the legacy systems that are more Internet native. So I love that point of view. Do you have anything else, John?
Speaker 2:No. It's great to have you. This is awesome. Love to have you as our resident, cryptographer. I
Speaker 5:don't actually know any cryptography,
Speaker 2:but I well, it sounds cool. Cryptography, bro. And that's what this show is about.
Speaker 1:Cryptographer sounds like we're gonna have him on the show to, like, crack people's passwords. Which should
Speaker 2:be a fun segment.
Speaker 5:Yeah. Just don't ask me to explain a c k proof. I can't do that. I'm sorry. It's impossible.
Speaker 5:No one can, actually.
Speaker 1:Did any of the the did that dark forest game go anywhere? People were pretty hyped on that
Speaker 5:for a while. Was that like a paradigm thing?
Speaker 2:I I I
Speaker 1:don't know. I I it was like a couple years ago, it was z k proof powered, like, multiplayer online game and the and the map, like, the fog of war is cryptographically sealed. So I can, we can both general source installations. We know we're not hacking. It was kind of cool idea.
Speaker 5:In general, crypto rule of thumb, if you ask me, did that crypto game go somewhere? The answer is no. And that's true a % of the time. It's never not been true.
Speaker 1:Yeah. So
Speaker 5:there there is the answer.
Speaker 1:Yeah. What's interesting is that, I mean, did, what was the thing you were talking about with GPT two AI dungeon? Yeah. I I haven't seen, like we have GPT 4.5 now, and I'm still not seeing, like, dungeon games, AI generated games taking off. I see a lot of demos of people building games with Claude code, for example, or cursor.
Speaker 1:But I don't see a lot of people, saying, like, this game is completely AI generated, and it's a mobile game, and we're printing millions of dollars, and it's working. It's like a business. It seems seems like somebody should have run with that, or maybe they have, and I just I'm not aware of it. I don't know if you've seen anything like that.
Speaker 5:I think AI Dungeon was popular because people could people could just, like, jailbreak the game and then just use it as a conventional l m pre chat g p t.
Speaker 1:But now you can just use it. I'm sorry.
Speaker 5:It was so magical.
Speaker 1:Interesting. Yeah.
Speaker 5:Yeah, maybe this is the new benchmark. Like
Speaker 1:Yeah.
Speaker 5:Can you make a good game with AI soup to nuts? Like, that's what, Levels did. Right? I think he has played his level five.
Speaker 1:Have you played it?
Speaker 5:Yeah. Yeah. I've, like, I've I've spent, like, a weird amount of time playing You
Speaker 1:play a lot. That's great. That's great. So stupid.
Speaker 2:There's a there's a PMF or Die Blimp. Blimp ad Yeah. Yeah. In there.
Speaker 5:Oh, you do you guys sponsoring it?
Speaker 2:PMF or Die has has a has, like, a blimp in the game.
Speaker 1:I think they did some corrupt bargain or something, and they did No.
Speaker 2:I think Patty Patty, one of the players was so excited Yeah. That he just said, I'm paying for this out of pocket.
Speaker 5:Oh, wow.
Speaker 1:That's great.
Speaker 2:Very cool.
Speaker 1:Well, I
Speaker 5:think this answers your question. You can make a game with AI. Yeah. It's just a it's a horrible, like, flash game from the 2 thousands, but it's Hey.
Speaker 2:You're playing it. It's got your attention.
Speaker 5:Yeah. You're addicted. I know. They got me.
Speaker 1:It's a Skinner box. You can make a Skinner box.
Speaker 2:That's why. You're a whale on on the, on the Peter on the Peter game.
Speaker 1:On the levels I o flying flight simulator. That's great. Well, thanks for that.
Speaker 5:It's a terrible game, but it's fun. You guys should get on there.
Speaker 1:I will go I will see you
Speaker 2:in the we'll see you in the
Speaker 1:next time we're on, we'll all be playing at the same time.
Speaker 5:See you see you in the metaverse. Yeah.
Speaker 1:See you later.
Speaker 2:Thank Thank you for coming on, Nick.
Speaker 1:It's a great time.
Speaker 5:Take care, guys. Bye bye.
Speaker 2:Talk soon.
Speaker 1:It's a lot of fun.
Speaker 2:Apparently, the levels is up to 58 k MRR in about fourteen days.
Speaker 1:It's really ripping with this thing.
Speaker 2:According to Haskell in the chat.
Speaker 1:That's pretty good.
Speaker 2:It's it's funny because he has enough of an audience now that he can almost release anything and hit metrics like that. That's great. Yeah. It is sort of potentially warping, the the actual PMF. Who knows, though?
Speaker 2:Do we got a couple of posts we can run through? Well,
Speaker 1:I mean, we're inviting a Sequoia investor on, and, you know, Sequoia is an investor in Ramp, so let's do a Ramp ad.
Speaker 2:There we go.
Speaker 1:Time is money saved both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp.com to get started. And, what? Oh, oh, there was news about core we've they're buying weights and biases for 1,700,000,000.
Speaker 1:Did you see this deal?
Speaker 2:I saw that. I've never seen
Speaker 1:weights and biases before. I've, I used to watch these videos called two minute papers. And they had this very interesting, like, professor who would have all these, like, funny turns of phrases. And he would, he would always say, hold on to your papers. Whenever he saw some, like, AI breakthrough.
Speaker 1:And he was like and he had a bunch of other, like, funny, funny, like, little phrases that everyone would like, he had a great community of, like, just, giving you updates on, like, what the latest AI papers are. And and Weights and Biases was, like, his main sponsor. And so that's where I know about them. So Weights and Biases, they have paid tools, start for $50 per month for professionals, have attracted data scientists from various industries, including pharmaceuticals and medical imaging firms. It's more than 900,000 users hail from companies, including OpenAI, Siemens, and Salesforce.
Speaker 1:And so, Cori is expected to IPO at a public market valuation north of 20,000,000,000. But its concentrated customer base has prompted investors to debate how long the company's growth will continue. Weights and biases competes with major cloud providers and other AI focused firms such as Databricks, Hugging Face, which sells similar tools to developers. Weights and biases are common terms in the AI field. The revenue, the information couldn't figure out the revenue, but they raised at a billion dollar valuation in 2021.
Speaker 1:And then, 1,250,000,000.00 slight up round in 2023. Company started in 2018 and previously raised 250,000,000 in funding from investors including Co2 Management, Insight Partners, and Felicis. I can never pronounce that. Felicis. Is that what it is?
Speaker 1:Yep. I don't know.
Speaker 2:I think you got it at the end.
Speaker 1:Well, let's see about Sean. Let's see. It's 12:31.
Speaker 3:I'm here. I'm here. What's up, boys?
Speaker 1:Amazing. Welcome to the What's going on?
Speaker 3:I'm scared to pop on with you guys. You guys are, wittier wittier than me, and, that's unfair territory.
Speaker 1:Well, oh, I love the t shirt. Counter strike I could
Speaker 3:do it. I figured you guys would like this one.
Speaker 1:I I I what what what what versions of counter strike did you play throughout the
Speaker 3:years? So I I was unbelievably hardcore and I mean, I I played early, but primarily one point zero to 1.6.
Speaker 1:One point zero. I started at 1.3.
Speaker 3:I was,
Speaker 1:1.6.
Speaker 3:Played multiple Cal invite teams, Cali, baby.
Speaker 1:Me too.
Speaker 3:Did you?
Speaker 1:Yeah. Yeah. Yeah. Like, God's exiled angels, g x a.
Speaker 3:G x a.
Speaker 1:Dude, that's
Speaker 2:the core.
Speaker 1:And then, e e k, the elite nights for a while. I was on a bunch of these teams.
Speaker 3:I remember I remember DEK. I was Yeah. I mean, I'm probably older than you. Yeah. I was on a team called HTP, high-tech performance.
Speaker 3:One guy like, NEG.
Speaker 1:Did you ever go to the CPL?
Speaker 3:Of course. I went
Speaker 1:to the CPL. Never go. I could never convince my parents to go because I was too young.
Speaker 3:Yeah. We They
Speaker 1:were like, what are you doing? Lugging a CRT monitor out to Texas? No way. Exactly.
Speaker 3:In the Volvo station wagon.
Speaker 1:Yeah. Yeah. Exactly.
Speaker 3:I and I would go to a lot of tournaments in SoCal. It's the best.
Speaker 1:Yeah. Oh, yeah. Yeah. I remember going to a Best Buy, a tournament at Best Buy, and we played against this team called, what was it? It was these guys made one of the, the protocols before three g.
Speaker 1:There were there were two different wireless protocols. I forget what they were called.
Speaker 3:I mean, we so I mean, I I think I can't remember the timing. Like, maybe one g was primarily TDMA, like, the original time division multiplexing.
Speaker 1:That's right.
Speaker 3:It was primarily, like, CDMA.
Speaker 1:CDMA. Yes. So we Yeah. So we go up against these guys, and their and their clan tag
Speaker 3:is CDMA.
Speaker 1:And we're like, why what what does that stand for? Like, it is it, like, you know, kind of strike, cool guys, you know. Like, everyone everyone's name usually is, like, something a reference to, like, the game.
Speaker 3:A good name.
Speaker 1:And their name was, like, was, like, this reference to this wireless protocol. And and we were like, why did you name it that? And they're like, well, we're the guys that invented that.
Speaker 3:And, like,
Speaker 1:And, like, we're the founders of the company or something that did something.
Speaker 3:So they're they're
Speaker 1:they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they're they
Speaker 3:So there was when I first started playing, the best team in the world was called TSO, and they were based in Seattle.
Speaker 1:Yeah.
Speaker 3:And they were, like, I I never met them because I was a little kid at the time, but they were described as, like
Speaker 1:Yeah.
Speaker 3:Telecom engineers too, but they were more on, I think, more on the infrastructure side. Like, they, like, they would actually build the early fiber connections and stuff. And so
Speaker 1:I mean, that was how you got an advantage back then. Like, if you could figure out a better internet connection,
Speaker 3:you would
Speaker 1:have an, yeah, you would have an advantage every time you played. And so
Speaker 3:I got an f in algebra two in high school, but I, but I got a networking education through counter strike.
Speaker 1:Yeah. Fantastic. Well, I I don't know.
Speaker 3:Are we live, guys?
Speaker 1:We we are live. We've been live.
Speaker 5:Let's go.
Speaker 1:Anyway, Sean Maguire's here, partner at
Speaker 2:Square. I'm so glad we didn't have, like, a Zuck moment. Zuck was on Rogan. Yeah. And he was, like, pretend he was LARPing like he does, like, bow bow hunting and hunting and, like, Joe Rogan started kinda pressing him on it.
Speaker 2:Like, John's asking you, like, oh, you got the counter strike t shirt and, like, you actually could, like, back it up. But, like
Speaker 1:Of course.
Speaker 2:Like, of course, Zuck, like, actually didn't have much substance behind it. I'm sure
Speaker 1:he had
Speaker 2:it, but no. Oh, man. We're live. Super excited to chat. There's been
Speaker 1:so many Elon companies. That's what we wanna dive into today.
Speaker 2:First of all, we are a show built on x. Take a little victory lap on x. You invested and take
Speaker 3:hundred million dollars, guys. And no victory laps until it's exited in liquid, but there has been some saving of democracy that's been happening.
Speaker 2:No. And the bigger the bigger thing is, you know, I think around six months ago, there had been, you know, legacy media like the Washington Post basically reporting coming out and saying Sequoia Capital and listing out all the investors Yeah. Have lost $20,000,000,000 on this investment. Now that obviously wasn't, you know, true. It wasn't, it had been, I think, marked down internally and some of the other asset managers had, but it was more so to kind of reprice it for employees.
Speaker 2:And, you know, it's very clear that the in in many ways, there's two things happening right now. One, people that used to be active on Twitter that are less active now, they message us, and they say, like, I'm I'm sure No.
Speaker 3:No. No. Social.
Speaker 2:Yeah. Really? But I I think the app has never been better. Yeah. And it's very clear that it's here to stay.
Speaker 2:So I just wanted to give you a little bit of credit there. You never lost conviction.
Speaker 3:I mean, no. On on that, I I never lost conviction. A lot of people did. And I think that I people people are very susceptible to believing what they're told. And I think if you believed what you were told by the media, then you could understand, oh, it's dead.
Speaker 3:But if you use your own eyes, it's like the whole thing is operating, no major outages, Elon, the helm, product innovation happening, like, lowering cost. I I I honestly found that to be one of the more interesting, like, cultural mass hysteria moments that I've lived through. And that was just so easily disprovable in, like, a short period of time, but, you know Yeah. To teach their own.
Speaker 2:I'm glad it I'm I'm glad you only had to wait a couple years. It would have been more excruciating if it if it had taken, much longer to get kind of repriced. What, there there's so many different things we wanna run through today. I'd love to get your, you know
Speaker 3:And we run through your guys' style. Like,
Speaker 2:how
Speaker 3:are you guys so well dressed?
Speaker 2:Well, we had to come out the gates. We we were calling ourselves, you know, we tech tech bro was sort of derogatory. We were the technology brothers. We need to kind of reclaim it, elevate it, and part of that was was dressing, dressing nice. But you've had your sort of, hands across the whole sort of, Elon empire.
Speaker 2:Obviously, you have a relationship, with Elon. I kinda wanna go company by company and just kind of get your take on them. Right now I think Tesla is very interesting. It's, it's not a pure play humanoid bet, but it does feel like humanoids are the next platform for Tesla, especially when you look at, sort of gen you know, generalized EV sales, for Tesla have not been performing great. Talk about kind of the humanoid market.
Speaker 2:I'm sure you've gotten pitched by a lot of these, companies. I'm guessing you're still, you know, a Tesla shareholder, but, you know, talk to us about that category because it seems to have everybody's attention for good reason.
Speaker 3:So let me first of all, I work at a registered investment adviser. None of it is financial advice. This is my own opinion. Also not the opinion of Sequoia Capital. This is all
Speaker 1:Yes.
Speaker 4:Me
Speaker 3:as a dumb individual, Sean Maguire
Speaker 2:As a poster.
Speaker 3:Nonsense. And, also, we're not investors in Tesla just given the timing and that it was public. We're, you know, major investors in SpaceX, investors in Boring Company, investors in x, investors in x AI. And I love all those companies. I'm very optimistic about all of them.
Speaker 3:On humanoids, look, I I strongly believe it's gonna be a real thing and a giant thing. I think the only question is, like, the time frame for when this happens. I I don't think it's a it's an if. I think it's a when. I really struggle to make a forecast there be in part because there's such a complex supply chain and there's, like, there's just so so many different subcomponents from, you know, my partner Constantine has spent a lot of time thinking about rare earth metals and, like, getting, you know, different rare earths for making magnets all the way to, you know, like, scaling, manufacturing to, you know, like, every just every individual sensor, every actuator.
Speaker 3:Like, I really just don't know the scaling of it. But I was at the Tesla Optimus event. I can't remember when. Maybe, you know, months ago or whatever. And it was more impressive in person than I think people realized online.
Speaker 3:Like, you I was just standing there in the street. Is is that some studio in LA? And you're you're standing there, and all of a sudden, like, 20 robots started walking out from behind a curtain, like, right next to me. And I think it's one thing when you just, like, see a robot video. It's another thing when you see, like, a tethered robot demo to see 20 untethered robots walking in, like, a progression.
Speaker 3:And I I I genuinely couldn't tell at first if it was human in a costume or a robot. And you I had to, like, figure out how do I verify because it's about the same size, and they were maybe 20 feet away when they first started coming out. And so I was, like, scanning down the whole thing, and then you look at the waist, and the waist was very narrow. It's like, holy crap. You know, that really is a robot just walking, and they were out there for for about two hours interacting with the crowd.
Speaker 3:And, like, even if there was, like, some human control for safety reasons and all of that, the vast majority of actuation and all of that was autonomous. You know, meaning, like, the whenever you have multiple actuators, you get feedback loops of, you know, all these things and, like, you can't no human can can, like, put out handle all the, like, feedback loops intuitively. And so you need controllers that smooth out all the noise and, like, can map whether it's, like, a computer brain that's telling you the goal or a human telling you the goal. Mapping it's it's almost like with computers how you take raw electronic signal in transistors, and then there's, like, you you have very, very low level programming, you know, and then you have, you know, you have, like, you have assembly, you have, you know, firmware, you have operating system, you have, you know, higher level systems, you have all these things up to queue. It's like everything other than maybe the final operating system level was everything else was basically autonomous.
Speaker 3:And it was just it was insanely impressive. And so it's it's just it really gave me the sense of the stuff that's coming soon. I just don't know exactly when. And I look. I think that for Elon, he is playing all the different angles of AI from, you know, foundation model with XAI to to robots, which I think will be, like, the ultimate embodiment of like, the combination of if you have AGI plus a robot, that's what lets you do kind of unlimited amounts of physical work in the real world.
Speaker 3:The foundation model lets you do kind of unlimited just knowledge work. And then, you know, Neuralink lets you merge with the AI. If we actually get, like, AGI that's way smarter than us, maybe existential for humans. But if you, you know, if we have Neuralink, we can merge. Just put the AGI in your own head and now you're, you know, an enhanced human.
Speaker 3:You know,
Speaker 1:we're back to playing counter strike me and you are going to be piloting Tesla, optimist robots against each other, shooting each other with a hard drive
Speaker 3:to chess. Like, no human can beat the chess systems, but it's still fun to play chess. You still have Magnus.
Speaker 1:Yeah. You
Speaker 3:got, you know, Heroku or whatever his name is. You know, we're still gonna be tearing each other up at the land. And I think we'll be doing more of that with AGI.
Speaker 1:Do you think it's a good time for me to put a deposit down on a Tesla Roadster? I think I think Elon might deliver it. I think we've been waiting, but all the pieces are falling into place. I think it's gonna be an epic car when it drops. What do you think?
Speaker 3:I I actually have to be careful around any public company.
Speaker 1:Okay. Sure. Sure.
Speaker 2:Yeah. Yeah.
Speaker 3:No comments on anything like that. Car.
Speaker 1:Yeah. Let's move
Speaker 2:on. So let's let's talk, some some some of your, recent investments. So, talk to us about Reflect Orbital. That round got announced last year. Very exciting company.
Speaker 2:I would love to hear it in your words and then a little bit more about your investment thesis, and I'll stop there. Cool.
Speaker 3:No. I love it. So for anyone that doesn't know, reflect orbital is an absolutely insane idea where they want to eventually have a constellation of satellites that reflect reflect sunlight back down to the earth with kind of two phases of the business. The first phase is lighting applications, and that's everything from, like imagine the LA fires, you know, firefighters operating at night couldn't see anything. It's it's genuinely really difficult to fight a fire at night and be able to just, like, put sunlight and let these guys operate almost in daylight, you know, say in a disaster or when there's a hurricane, like the hurricane in North Carolina or, you know, anywhere there there's lighting or, like, let's say you're doing a giant construction project, somewhere, like, away from the city that the lighting costs on these projects are insane, and so basically let you extend the hours, especially, like, in northern latitudes, let you, actually, like, do construction more year round.
Speaker 3:But the longer term market is energy. And, you know, I'll come back to, like, the thesis and why I was willing to make this investment in a second. But, basically, the the, like, the real the crazy big business someday is extending the useful time of solar power plants by a few hours a day. You know, so it depends on the latitude and time of year, but, like, a solar farm will, you know, operate for with, like, decent efficiency, call it ten hours a day on average, something like that. And by having this reflector ring that basically lives kind of the satellite is a ring that base the the constellation is a ring that basically only lives at the interface of sunrise and sunset all the time, like, just the the light dark boundary.
Speaker 3:And you can basically extend the very high efficiency time of a solar farm by, you know, call it two hours before sunrise and two hours after sunset with this constellation. So anyways, insane idea. I I have been involved in the space community for, I mean, officially for over fifteen years, unofficially for most of my life. I've been obsessed with space since I was a little kid, like, literally obsessed. I can show you guys a sick ass video from, I think, like, sixth grade where I did this thing called satellite amateur radio experiment, SARX, which was this NASA program, sick retro nineties video where we, learned ham radio and talked to astronauts aboard one of the shuttle missions, you know, using ham radio.
Speaker 3:I got to ask a question in sixth grade. It was pretty pretty fun. But I've been obsessed with space my whole life. I've been skeptical on basically every space business model I've ever seen. The reflect guys, there's a few things.
Speaker 3:One, I just profoundly believe that the launch costs launch costs plus a bit like mass to orbit over the next five years or so is gonna increase the costs are gonna drop dramatically and mass orbit's gonna increase dramatically. Basically guaranteed, SpaceX is driving this. If you look at the mass to orbit curves from the last five years, like, it's it's incredible how much more mass to orbit we're doing every year because of SpaceX. The cost hasn't dropped as much, but I am very confident it will with Starship. And so we're getting to the point where, like, you don't wanna start making space investments once all of that has already happened.
Speaker 3:Like, then you're late and it's competitive. You wanna be a little bit ahead of the curve. So I think we're at a point right now where for, like, the right businesses, it makes sense to be building them right now so you can actually, like, be alive and be scaling a little bit as we hit the like, you you know, you can ride with the cost and mass curve. Brodsworth, I passed on Varda early on. Obviously, you guys are very close to Delian.
Speaker 1:Yeah.
Speaker 3:I love Delian. Should I think I should've done the investment. The like and and I'll tie it to reflect in a second. But the with Varda, in my opinion, in the, like, seed pitch, I think they had the wrong micro idea, but the right macro idea, and it was my mistake for wanting both the right micro and the right macro.
Speaker 1:Yeah.
Speaker 3:And to unpack that, like, with Delian, the first product that they wanted to do was ZBLAN. So, like, this ultra pure, you know, fiber optic cables that are really good for very long range communications. To me, I just don't think that's a very important product. And I actually think that with Starlink, we're gonna need very little, like, ZBLAN in the future. Almost all long range data movements in the future is gonna be done via Starlink, in my opinion.
Speaker 3:I think Starlink has, like, a 10 x plus cost advantage per gigabyte for long haul data transmission compared to, say, putting the fiber optic cable line under the ocean. And that's where you actually get a benefit from something like ZBLAN. And so, anyways, Delaney and I love to argue with each other. Super smart guy. Yeah.
Speaker 3:That's the one where, like, I had been so involved in space for so long that I already had a thesis on ZBLand and already thought it was, like, irrelevant with Starlink and kind of passed because of that. But the macro, I think, was a % right of just, like, we're at the right time in space and just building an a cracked team of space engineers that know how to get things in and out of space. Like, I think that will be very valuable, and I I think it's, like, hard to imagine what Varda's revenue driving product will be in five to ten years, but I think they will have a successful product. I just can't tell you what it will be. So, anyways, back to reflect.
Speaker 3:Like, I've met with so many space teams in the past, and these guys just they're just insanely good. And they know they and they have, like, a real even though it's such a crazy idea, I think that the best businesses in history oftentimes sounded like insane ideas early on. You know, air Sequoia was seed investor in Airbnb. The like, hearing the stories of how people thought about Airbnb in the beginning, like, it's crazy. People were like, I would never share my, you know, house with a stranger.
Speaker 3:They're gonna trash it. They're gonna, like, you know, use all my toilet paper, whatever people's issues were. But lo and behold, like, it worked. And Sequoia, we, you know, made a huge amount of money from this, and they couldn't even raise the seed round. You know, if you look at SpaceX when Elon started it, everyone thought it was insane.
Speaker 3:Like, you're a Internet entrepreneur who's gonna build a rocket company. Isn't there NASA for that? I just there's I think so many of the best businesses in history really sounded insane. But for Reflect, I think I think they have if you really go through the details, and I think very few people have actually gone through the details, like, they have unbelievable macro tailwinds. So one is, like, just dropping launch costs.
Speaker 3:Second is I don't think you could have done this business ten years ago even if the launch was there because we haven't yet built enough, like, solar power plants on the ground. Something that's nice to reflect is they don't we don't have to build any of the ground infrastructure. Zero. There's already, you know, call it 10,000 solar power plants. And so we get to leverage that.
Speaker 3:Anyways, you go.
Speaker 2:Is the idea that, reflect would take basically a rev share on the incremental sort of energy generated that they are directing at these farms? And is that why, is that correct. So, basically,
Speaker 3:like, for one of these solar farms, there is almost no additional operating expense to operate for these extra, call it, four hours throughout the day. It's it's literally just, like, silicon photovoltaics sitting on the ground that is otherwise just not generating power. And so it's like, either they get no revenue from this, or if they work with us, then they get revenue. And it has it actually has very profound ramifications to the kind of financial engineering of running a solar farm. A lot of these utility style infrastructure projects, you know, you basically juice it where the you use debt to build the solar farm, and your revenue is recall, the first fifteen years is just paying off the, like, all the debt you have.
Speaker 3:And then years fifteen to thirty is, like, a lot of profit. But it takes a long time to get to the point where you're you know, you've paid off a lot of the loan, and it's generating lots of profit. If you can increase the useful time by 40%, whatever, of a solar farm, that's all profit upfront. It's insanely valuable, and so it's like an incredibly easy sale. So one of these things, like, if you build it, they will come, and they will come in droves.
Speaker 3:And but the the the the point is this company would have made zero sense before there were 10,000 solar farms on the ground because building each of the we couldn't build those ourselves. It'd be too expensive. But now that they're there, we have just this very clear value prop. And I and, like, I I think these guys actually know how to build the satellites needed. And, anyways, it's an easy idea to shit on, and it may not work.
Speaker 3:You know? Like, the but I believe in taking risk, and I think these guys
Speaker 2:What I'm excited for, I wanna sit outside at night Yeah. Have set up our podcast set. You come over, and the sun just appears.
Speaker 1:It's been
Speaker 2:awesome. We do the, you know, the first podcast, under space sunlight. I love it. Question for you. I think, you know, it's easy to see why SpaceX is a multi hundred billion dollar company.
Speaker 2:In many ways, it feels cheap at times being the sort of toll road to space. At the same time, how do you advise is there sort of any type of fear among founders that are building, you know, space faring startups that what if SpaceX does this? Right? So so you're benefiting from the sort of decreased launch cost, but at the same time, there's this risk that somebody that, you know, can can has even more access to the to space, can can sort of enter that market. How do you think about that risk?
Speaker 1:Well,
Speaker 3:I think that I think that Elon has probably the biggest target on his back from a, like, regulatory perspective of anyone, and there's no one I'm aware of who takes, like, antitrust and all that more seriously than him. And, like, I I think that those guys are gonna like, they're just building the best launch platform in the world, and they probably will launch some other business. Like, obviously, they launched Starlink. But I I think it's also
Speaker 2:a fixation on on Mars that's sort of helpful. Right? Definitely. It's actually great that the the, and, you know, attention is going there, and and there's plenty of opportunity in sort of low Earth orbit for the rest of us.
Speaker 3:Yeah. So I think that's a great point. Look. I think I think SpaceX is deeply incentivized to have a giant ecosystem of lots of great independent companies in space, and I think especially in Leo. And, yeah, you're right.
Speaker 3:I mean, I think the focus is gonna be Mars in addition to Starlink, which is already, you know, operating and scaling. And on Mars, I'll just say, I was I mean, I've always thought just from an intellectual perspective, it's the coolest thing ever to build a city on Mars. But from like, when I wrote my initial SpaceX investment memo, you know, it's like, yeah. I don't really understand Mars from a business perspective, but but, like, I think this is gonna be such a great company. Yeah.
Speaker 3:Like, irrespective of it that it's fine. Like, it's a side quest Yeah. Business perspective. I am now at the point where I actually I I I really believe that Mars is going to be, like, one of the biggest profit generating endeavors in history and not necessarily not, like, from the direct, like, building a city on Mars, but from all the indirect things. And I'm sure you guys remember all the myths about or, you know, all the stories about NASA in the sixties and seventies, all the spin off technology, microwaves and materials and all these different things.
Speaker 3:I think the spin off technologies from having a clear goal of building a self sustaining city on Mars, which will have about a million people or whatever in thirty years, the spin offs are gonna lead to it's basically probably gonna have to make sure that nuclear power plants in a box get built that are very safe and reliable when you can transport the space. It's gonna have to perfect vertical farming.
Speaker 1:Yep. You
Speaker 3:know, gonna have to perfect surgical robots. Gonna have to perf you know, or just have Optimus do it. But, you know, there's so many things. Gonna have to make fabs that you can, like, assemble in space that can remake whatever, you know, leading edge silicon you need. Gonna have to do mining.
Speaker 3:I I just I think all the second order effect spin out businesses that are gonna come from this are gonna be outrageously valuable. And there's something about when you have a a clear goal and all the constraints of, like, being in Mars. One, it lets you recruit the best people in the world because it's such a cool project, and the best people will do more than the sec like, a level below. And the second is just having all these constraints forces you to come up with solutions you would never come up with otherwise, and those are oftentimes better solutions. So, anyways, I think we're gonna I think the company is just gonna rip.
Speaker 1:We have one more minute. I want some advice for new entrepreneurs. New grad wants to work with you, wants to work with Sequoia, wants to start a company at some point. What are you telling them? You had a little bit of an, uncommon path, PhD, DARPA Ethanol, but two.
Speaker 1:What do you what do you recommend for new grads going into entrepreneurship in the age of AI, in the age of Mars colonization?
Speaker 3:I I mean, look, I it's not what people wanna hear, but I think that if you don't have a very, very clear idea, don't don't start a company just for the sake of starting a company. Go join an go join SpaceX or go go join XAI or Tesla or or, you know, some go join Varda. Go join some amazing company for a year or two. I strong like, I I strongly think that's better than just, like, trying to start a company for the sake of starting a company. And then when you do, like, when you do have an idea for a company, don't listen to what other people tell you, even even me, even, like, VCs.
Speaker 3:You gotta you gotta kind of think for yourself, and a a lot of the best ideas seem crazy.
Speaker 2:Great place to end.
Speaker 1:Great place to end.
Speaker 2:You are a new resident, space brother.
Speaker 1:Thank you.
Speaker 2:It's been great having you.
Speaker 3:I am this
Speaker 1:is fantastic.
Speaker 2:Nothing makes me happy than being your guys' brother.
Speaker 3:Music from my ears. Peace.
Speaker 1:Welcome welcome to the brotherhood. Amazing.
Speaker 2:Thanks for coming.
Speaker 3:We're gonna play Counter Strike someday.
Speaker 1:We should. We should. Let's have a late party.
Speaker 2:Mid pod.
Speaker 1:Yeah. Yeah. Awesome. Be.
Speaker 2:Have a good one. Thanks for coming on.
Speaker 1:Thanks for having you. Fantastic.
Speaker 2:I got a call right now. Yeah.
Speaker 1:We gotta wrap up. This was a fantastic show. Thank you for watching. Thank you for listening. Tune in tomorrow.
Speaker 1:We're doing more call ins. We're gonna do more timeline, more deep dives. We're just doing more of everything. That's the theme of of this year. More and better and more and better and more and better and more and better.
Speaker 2:Moss. So it's
Speaker 1:the live moss lifestyle. It's a
Speaker 2:live moss lifestyle. Yes. Thank you, everyone.
Speaker 1:Thanks, everyone. Talk to you soon.