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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're up to TVPN.
Speaker 2:Today is Tuesday, 02/10/2026. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. We're not slopping it up today, Jordy. We're in full force with ramp.com. Time is money.
Speaker 2:Save both. Save both. Corporate cards, bill pay, accounting, and a whole lot more, all in one place. Thank you to ramp. They took us to the Super Bowl.
Speaker 2:We hung out with bunch of folks in SF, very smart people, Dwarkash, Dylan Patel, Trenton, Sholto, Mark Chen. There were a ton of AI, really frontier, the people who actually know what's going on with the labs and the progress. Came away extremely AGI pilled. Then I had to wait two days for the photo that we took to work its way through the NFL software system.
Speaker 1:Yeah. They had on-site photographers.
Speaker 2:And on-site photographer, the guy I mean, no no disrespect to the guy. He took a nice photo. But He very funny because when he was taking the photo, it felt like the camera had recoil or something. Like, he would take the photo and be like, what is this? It was, like, first day with the camera.
Speaker 2:But he had a phone attached to the camera. And I was like, oh, it must be connected to the Real time. Camera. Real time. It uploads immediately.
Speaker 2:Then you get your photos, and you can post them while the game's live. And for some reason, it took like two days for us to get the photo. It was watermarked. We had buy it. I I guess it makes sense.
Speaker 2:But
Speaker 1:We got monetized.
Speaker 2:It was just it was just a funny, funny situation. Anyway, let me tell you about Turbo Puffer, serverless vector and full text search, built from first principles in object storage, fast, 10 x cheaper, and extremely scalable.
Speaker 1:No. And the chat says the photo quality was not great as well.
Speaker 2:Well, first time. First time. There there's a whole bunch of interesting news. We're gonna talk about Michael Grimes today, what Apollo's doing, some new humanoids out of China. There was one piece in the journal that I wanted to read for you.
Speaker 2:Streamer Braden Peters suffers awkward encounter with Arizona State fraternity leader. Video of the interaction has drawn widespread attention. Braden Peters, the online streamer known as Clavicular, found himself at the center of viral attention this week after a brief in person encounter with a fraternity leader at Arizona State University left him visibly diminished. This is this is news just today. Video of the exchange, which has circulated widely across social media platforms, shows mister Peters appearing noticeably uncomfortable as the unnamed fraternity member dominated the interaction through sheer physical presence and social confidence.
Speaker 2:Viewers noted that Mr. Peters, despite his considerable height, appeared to shrink during the exchange, struggling to maintain composure as the other man controlled the tone and pace of the conversation with apparent ease. The clip has been viewed hundreds of thousands of times now with commenters Millions. Largely agreeing that mister Peters was, in the parlance of his own audience, thoroughly outclassed. Neither Mr.
Speaker 2:Peters nor the fraternity leader could be reached for comment, but we'll be following that story, of course. Anyway, moving on. Michael Grimes. He's Elon Musk's banker, and he might be the most important person in the SpaceX IPO that's probably gonna happen this year. Kevin Kwok summed it up.
Speaker 2:He said, Michael Grimes moving back to Morgan Stanley is the strongest signal so far that SpaceX that the SpaceX OpenAI anthropic IPO jubilee, it's a real it's a real thing. We're gonna dig into it. First, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 1:Why is no one talking about
Speaker 2:Michael Well, a lot of people are actually very familiar with Michael Grimes. He took Facebook, Google, Tesla, Uber, Spotify, Salesforce, LinkedIn, Workday, and literally hundreds of other tech companies public. He was involved or lead banker on those. He's been in the industry for decades.
Speaker 1:More on reputation because he he becomes customer or user Oh, yes.
Speaker 2:That's a fun
Speaker 1:the different products as during the kind of bidding process.
Speaker 2:Yes. Yes.
Speaker 1:Talked about playing FarmVille. How many hours did he play FarmVille?
Speaker 2:He didn't say how many hours he played. At some point, we'll have to ask. He just said played hours of FarmVille in the lead up to the Facebook IPF, saying, look. I don't just use Facebook. I use the it's a platform.
Speaker 2:I understand the full business case. I understand that there's whole other companies like Zynga that are building products like FarmVille on top of Facebook. And to understand to understand the IPO thesis, the investment thesis for Facebook at that time, you had to believe that other businesses would be built on top of Facebook, so you had to understand far Yeah.
Speaker 3:So you you would expect him to, like, you know, spend hours talking to to Annie, you know, for Oh. For the SpaceX IPO.
Speaker 1:For
Speaker 2:sure. For sure. Yeah. Definitely. He also actually drove for Uber before taking Uber public in 2018.
Speaker 2:And so he likes to dig in. He also has just a very a very, like, perfectly aligned background for tech and tech banking. So he he did he did war he did the traditional investment banking thing. He was at Salin Brothers, then Bear Stearns, then Morgan Stanley. But before that, he studied he studied electrical engineering computer science at Berkeley.
Speaker 2:And so he was, like, never really boxed in as this pure finance guy. And there's this interesting full circle moment where, you know, many people could comp Elon Musk to Howard Hughes, who started Hughes Aircraft and sort of created, the aviation boom. And Michael Grimes actually interned at Hughes Aircraft in the space and communications group back in 1985. And what is SpaceX? It's like a space and communications company.
Speaker 2:And so you have this like very full circle moment, which I thought was cool.
Speaker 1:That's
Speaker 2:cool. But the the real, like, fork in the road for Michael Grimes was when he was at Morgan Stanley, and he's working with Frank Quatrone, who now runs Catalyst Group, a big investment bank focused purely on technology companies. And, Frank Quatrone was, like, a heavy hitter in the Menlo Park office for Morgan Stanley. And he had a bunch of associates, and Quatrone bails. He's like, I'm out of here.
Speaker 2:I'm leaving. Goes to a different bank, eventually starts his own bank, but Grimes stays. And so that allowed Grimes to really grow into his role. I think he became the co head of West Coast Investment Banking, co head of global technology banking in 2005. And so he had a he had, like, a basically a two decade run with all those IPOs that we mentioned, Google, Facebook, Tesla, Uber, Salesforce, a ton of companies.
Speaker 2:His his office is you can't put down a coffee cup because it's all It's deal all deal toys. It's the one of the craziest offices I've ever seen. It's he's like truly a deals legend. So then he went he did a brief stint with the with the commerce department. And people were wondering like, is he gonna be able to stay out of going back to deal land?
Speaker 2:Like, there's so many good deals on the table right now. You got Anthropic, you got OpenAI. Well, there's no space in
Speaker 1:the government.
Speaker 2:There's deals in the government, but it's just a different environment. You know, there's so much red tape. And famously, at Morgan Stanley, Michael Grimes was set up in a way that he, at least reportedly, was not really required to to deal with all, the firm wide strategy, what's going on with the rest of Morgan Stanley. They were like, go hunt. Like, you're a killer.
Speaker 2:Just go do whatever you need Go to fish. Go fish. And so he had a lot of he had a really, like, broad he had a lot of they they sort of cleared the agenda to just let him go do what he did best, and he obviously was extremely successful at that. In the government, you know that there's gonna be 25 different committees and stuff, so it's just gonna be a different environment. I don't know.
Speaker 2:But he got pulled back to Morgan Stanley, and he got a promotion. So now he's the chairman of investment banking, which is, I guess, higher than co chair of global technology banking, which sounded like the top. There there are And he's even higher now. And it makes sense. If SpaceX, they're on track to raise $40,000,000,000 in this IPO, nothing's really confirmed yet, but that feels reasonable in the range.
Speaker 2:So what are the investment bankers gonna have to do? They're gonna have to talk to literally everyone with money because putting together that size of a deal is huge. Pricing is very difficult, and and the investment banking fees could be like $400,000,000. And so right now, are thinking those will be split across the four lead banks, Morgan Stanley, Bank of America, JPMorgan, and Goldman. And Kalshi actually has a prediction market on who's going to be involved in the SpaceX IPO.
Speaker 2:I believe Citi is sitting around at, like, fifty fifty, so they might be at
Speaker 3:it. 56 right
Speaker 4:now.
Speaker 2:56%. But the but the major bulge bracket banks that everyone knows and loves, Goldman, JPMorgan, Morgan Stanley, and and Bank of America are all sort of locked in in that
Speaker 1:89% being the lowest of that group
Speaker 2:Exactly. Probably being the highest. And so either way, you got to get ready for the roadshow of a century. It'll be interesting. What will Michael Grimes do to prove that he's ready to go to space?
Speaker 2:Will he go to space personally like Jared Isaacman did? That would be pretty cool. I wanna see some stunts. I wanna see stunts pre roadshow.
Speaker 1:Elon, I fell in love with Ani. You think that's We're starting a family.
Speaker 2:I think he's gotta go to space. He's gotta do the Jared Isaacman thing. Put me on top of the the Dragon capsule. Get me into space. I wanna do a a a civilian spacewalk.
Speaker 2:Jared did it. He got up there. He got back safely. Put Michael Grimes in the rocket. Let's do it.
Speaker 1:Do it.
Speaker 2:And I mean, that that that you know, it's you're gonna be so it's so much easier to underwrite the deal if you're like, I've been. I've been to space.
Speaker 1:It works. I It's nice.
Speaker 2:I've I've driven for Uber.
Speaker 1:I think everyone
Speaker 2:I played FarmVille. This is the best technology. Going to space is better than playing FarmVille or driving Uber.
Speaker 1:What if he says put me in the mass driver?
Speaker 2:Put me put me in the
Speaker 1:mass driver. Yes. Too early for that.
Speaker 2:Let me tell you about fin dot ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. So The Wall Street Journal has more coverage on Michael Grimes. By the time Musk finally decided to take SpaceX public and this was sort of a surprise to people. People thought, okay.
Speaker 2:Elon has run the AB test. He took Tesla public. He kept SpaceX private. He had a much better time with SpaceX doing, you know, secondary sales and fundraisers very easily. He could do whatever he wanted, really, like, much more control.
Speaker 2:Tesla, he's getting sued by shareholders, all these different things, like regulations, SEC stuff. Like, it's a headache, but the stock's doing really well. And at a certain point, maybe you cap out what's possible in the private market. So all of a sudden, Elon says, I'm going public. I'm merging everything together.
Speaker 2:I'm going now. I've made the decision. And so Grimes is working in the in the commerce department, and he had actually followed Elon to Washington DC in in many ways. Grimes found himself watching from afar as colleagues former colleagues pitched for roles on what could be the biggest IPO of
Speaker 5:all time.
Speaker 2:He's just like, I wanna get me back in.
Speaker 1:Put me in.
Speaker 2:Put me in.
Speaker 4:Put me in.
Speaker 2:This week's Grimes put himself back in the middle of the action and in line to reap millions of dollars of fees. Morgan Stanley said Monday he was rejoining the bank as chairman of investment banking, a promotion from his previous role as head of global technology investment banking according to an internal memo. SpaceX has long been considered a golden goose by IPO bankers. It skyrocketed to a 1.25
Speaker 1:Let's give it up for all the golden geese out there.
Speaker 2:Golden geese. May they never be slayed? They must just continue laying eggs. Emerged it with the AI company, xAI, which we know. Also interesting, there's all this news about the xAI cofounders leaving, but you're post acquisition.
Speaker 2:Of course, the cofounders leave, right? That's pretty normal.
Speaker 1:Well, I think the reason that people care is because it was happening for quite a while now.
Speaker 2:Yes. That's true. There's also this question just like how much research do you need at this point? We were debating this this morning with Tyler about like, Okay, like, do they need to just be near the frontier or do they actually need to be doing research to advance the frontier if they wind up like, should you think about xAI more like a neo lab that's trying to solve continual learning or some unsolved problem in AI research? Or should you think about them more like a hyperscaler, like an AWS or like a CoreWeave or like a Lambda, like a neo cloud that's just like capacity and more of an engineering task.
Speaker 2:And if they're able to build Colossus and then build 10 more Colossus and then build a bunch of space data centers and they just have a lot of capacity, like, knows? Maybe they wind up working with Anthrop.
Speaker 1:I mean, I forget at what point last year we started talking about that possibility. Yeah. But as the consumer products and the enterprise products have kind of fallen behind or failed to fully catch up.
Speaker 2:I I don't know. I'm seeing a breakout in Grok in the comedy category on Instagram Reels. You can go check them out. There's some funny, funny interactions.
Speaker 1:It is really wild. The yeah. You really have to find the different modes in the product. Yeah. But finding the different characters, going to the unhinged setting, it is about five times more unhinged than I would expect
Speaker 2:Totally.
Speaker 1:Totally. A product like this to be. Yeah. So Oh, yeah. Mean,
Speaker 2:yeah. Talk trash about Elon. It goes all over the place. Honestly, some of it is genuinely funny, though, which is like a high praise. It's a new benchmark for AI.
Speaker 2:It is sort of like doing it's a cheat code.
Speaker 1:Well, Part part of humor can be truth seeking. Right?
Speaker 2:Truth seeking or just saying what no one else can say unexpected. You don't expect the computer to
Speaker 1:sometimes can't say that, you know, there's certain topics you can't
Speaker 5:Yeah.
Speaker 1:Say the truth. And, yeah, it it the the unhinged mode is certainly truth seeking.
Speaker 2:Certainly unhinged as well. Anyway, if you want a more hinged voice AI experience, head over to 11 Labs, fully hinged, to build intelligent real time conversational agents, reimagine human reimagine human technology interaction with 11 Labs. Will DePue shared a little hack for everyone who's in to Chipotle. We reposted a clip that is truly evergreen. Geordie, I used to get 90 of my calories from Chipotle at certain times in my life.
Speaker 2:It was something I would look forward to. But the last time I pulled over to get Chipotle, it was like, this is gonna be rough. The quality has degraded. I'd rather eat I'd rather fast than eat Chipotle, taking shots at Chipotle.
Speaker 1:Yeah. A couple couple of the the younger guys on the team were saying like, what like, what's wrong with Chipotle? Yeah. And I started shedding a tear, like shedding tears explaining how you
Speaker 2:Back in my day, it was the pure
Speaker 1:experience. Yeah. It was it was so it was more fresh than the farmer's market.
Speaker 2:Yeah. I love I love
Speaker 1:your role. But Will has a good hack. He says, I bought a Chipotle hat on eBay once and I walked to the Chipotle in Ann Arbor and wear it when I went. And they would just give me the employee discount every time. I didn't even ask.
Speaker 1:It was a $2 hat and I saved $7 on my $15 order every time.
Speaker 2:This is thinking outside the box.
Speaker 3:This is
Speaker 2:He says, I used to be so into budgeting in Chipotle that I'd measure everything in Chipotle meals. Rent was four Chipotle meals a day. A nice hat was two Chipotle meals. I also grokked it. And in case this is fraud, it was more than six years ago, so past the statue of limitations, can't get me.
Speaker 2:On second thought, need to atone for my sins and repay Chipotle the $21 I stole from them by purchasing $21 of their stock. I am sorry, Chipotle. That's very, very funny.
Speaker 1:Moving on. Yes. We talked about this briefly. You
Speaker 2:Another resignation. Is it the timeline? The cofounder of XAI is out. You wanna read through it?
Speaker 1:Yeah. So he says, I resigned from x AI today. This company and the family we became will stay with me forever. I will deeply miss the people, the war rooms, and all those battles we have fought together. It's time for my next chapter.
Speaker 1:It's an era with full possibilities. A small team, darned with AIs, can move mountains and redefine what's possible. Thank you to the entire xAI family. And Elon, thank you for believing in the mission and for the ride of a lifetime. So I wonder if he took some of the executives at xAI were offered cash instead of staying around.
Speaker 1:You remember We we talked about this, I think, last week. And so it's possible he just said, cool. Time to time to move on. Did you
Speaker 2:see Jack Clark's post about this? I did he take it down? He said he said something about
Speaker 1:Aman Shu says this isn't looking good, it's the original XAI cofounders. There was 12345678. There's three remaining, Elon plus Manuel Yeah. And Toby. Or
Speaker 2:Yeah. Jack Clark, the at at Anthropic had some post, but it's disappeared. But he was basically like, if you're oh, it is in the timeline? I don't know where it is. But
Speaker 1:And someone said, now do OpenAI. And this Himanshu says, Sam was always ahead of his time. Yeah. And you look at the original list. There's
Speaker 4:just Yeah.
Speaker 1:There's there's Sam Altman and Greg are left and you had, you know, a very long list Yeah.
Speaker 2:Jack Clark here. He said, people leaving regular companies. Time for a change. Excited for my next chapter. People leaving AI companies.
Speaker 2:I have gazed into the endless night and there are shapes out there. It must be we must be kind to one another. I'm moving on to study philosophy.
Speaker 3:Well, so so this was like in reference to there's an anthropic researcher that just left and it was like this whole essay and then he ends it with this this poem. Yeah.
Speaker 2:Yeah. People get deep at these companies. Yeah. Deep.
Speaker 1:It was Sout over at Klein said, head of anthropic safeguards research just quit and said, the world is in peril. And then he's moving to The UK to write poetry and quote, become invisible. Other safety researchers and senior staff left over the last two weeks as well, probably nothing. Yeah. I think there's multiple factors going on.
Speaker 1:You can't discount the fact that many of these people maybe made something in the range of $100,000,000 in the last two years. And if you're AGI pilled enough, you believe that that will be many, many, many, many, many, many, many lifetimes worth of wealth, and so why not go to The UK and write poetry? There's obviously a more dystopian sci fi vision where when this period of our lives gets turned into Hollywood blockbuster movies, this will be a moment where the safety researchers start peeling off and going all over the world to write poetry. Yeah. We'll be
Speaker 2:just want one AI co founder researcher to leave and be like, look, I got
Speaker 5:an allocation of an f 80.
Speaker 2:I got a bus down coming. I'm I'm good. I'm Gucci. I don't need I quit. I quit.
Speaker 1:Schlum says probably burnout from organizational dysfunction in moderate to severe safety as I'm one shotting.
Speaker 2:Interesting. I don't know. Paula says, guy who can't quit his I lab AI lab because he's bad at writing essays. He's like, deathly afraid of Pangram Labs. Just one shot by by Pangram, and you can't you can't post slop.
Speaker 2:Really quickly, app loving, profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today. Before we move on to the next story, let's let's pull up the linear lineup and show you who we got today on the show. It's an absolute murderer's
Speaker 1:role. Burner.
Speaker 2:Linear, of course, is the system for modern software development. 70% of enterprise workspaces on Linear are using agents.
Speaker 1:First up. Linear
Speaker 2:in to break down NASCAR. Linear. Ethan Thornton from
Speaker 1:NASCAR has a new campaign. They Yes. They did something that I'm mad that we didn't think of,
Speaker 2:which is
Speaker 1:they broke the world record for the loudest billboard ever.
Speaker 2:Okay. That's cool.
Speaker 1:It it appears to be an engine built into a billboard
Speaker 2:Yeah.
Speaker 1:Like an actual gas engine that just runs.
Speaker 2:Yeah.
Speaker 1:Yeah. So we'll talk to him about that. I wanna ask him about the new the new Ferrari, get his thoughts there as well.
Speaker 2:Oh, yeah. That'll be great. And then we've Ashley Vance in person. Dan Grace in person.
Speaker 1:He's coming in person.
Speaker 2:Cristobal Valens.
Speaker 1:We got the CEO of ai.com.
Speaker 2:Oh, yeah. That's gonna be fun.
Speaker 1:He basically owns AI. Yeah. He controls it. And I wanna ask him about the whole Super Bowl debacle and and how It
Speaker 5:was fun.
Speaker 1:Everything went down. And then you said already Chris Valenzuela Yeah. From Runway. And then, yeah, we'll close it out with with core memory. Can't wait.
Speaker 2:Fun. Good
Speaker 1:times. Moving on. Apollo says it avoided the pain of PE peers by steering clear of software holdings. Software? I never heard of it.
Speaker 1:What's that?
Speaker 2:I don't touch it. You know, people are saying the SaaS pocalypse or SaaSmageddon, but assassination was right there. And I don't know why we're not just calling it the assassination. Isn't
Speaker 6:that I
Speaker 3:I think assassination would be like SaaS is assassinating something else.
Speaker 2:Oh, okay. But you know, it's like your fund got sassassinated. Assassinated.
Speaker 3:Like, I would think it got killed by SaaS.
Speaker 2:Yeah. I guess you're right. SaaSpocalypse is maybe better.
Speaker 1:Apollo says fees rise as company reports record quarter for deployment of capital.
Speaker 2:Doing well. Mark Rowan said the group's decision to avoid heavily investing in software companies during an era of strong of soaring valuations will bolster its growth as investors move their money to firms that avoided a sector now threatened by AI. Rowan said he believed private capital groups would see a dispersion of returns depending on their exposure to software companies following growing fears of AI disrupting many IT businesses that triggered a recent selloff. Apollo would benefit after largely avoiding such deals within its private equity portfolio and curtailing leading to the industry over the past decade, helping to bolster its performance of Versa's many rivals. He said during earnings call, I expect that we will be, along with a handful of other managers, prettier than we have been historically.
Speaker 2:I like that.
Speaker 1:I saw a bunch of Apollo's leak returns. Yeah. Remember? Yeah.
Speaker 4:Yeah. Yeah.
Speaker 1:I think I sent them to you.
Speaker 2:Are they good?
Speaker 1:I think they're they're just very, very Consistent.
Speaker 2:Consistent. That's the Yeah.
Speaker 1:Point of, like, this
Speaker 2:this fund.
Speaker 1:But I don't know. Yeah. Sitting prettier kind of implies that they're gonna be out out performing at least their own work you're in
Speaker 2:much of the software that's selling off, yeah.
Speaker 1:Their most recent buyout fundraise in 2023 has generated a 20% net return and has already returned about a third of investors' capital. I love that.
Speaker 2:Yeah, not bad.
Speaker 1:Significant outperformance versus the broader P industry Yeah. That has struggled to exit investments. So wait, what have they actually been investing in non software industrials? I'm trying to it's
Speaker 2:You will go.
Speaker 1:Failing to mention that.
Speaker 2:So nice. They cut its exposure to software loans as it grew increasingly bearish about the sector's prospects in the wake of rapid inroads made by AI. The decision appears to have been validated by a recent sell off in software stocks and the loans of many large IT companies amid rising AI fears. Rowan's comments came as Apollo reported better than forecast fourth quarter earnings that included nearly $30,000,000,000 of net inflows during the final three months of the last year, pushing its AUM to almost a trillion dollars. Apollo, which manages private funds and owns insurer Athene, said it had a record quarter for deployment of capital, which helped lift the management fees it charges on its funds.
Speaker 2:So called fee related earnings rose 25% from a year earlier to $690,000,000 eclipsing Wall Street expectations. That was boosted by a 27% jump in management fees and a 41% rise in the fees it earns by originating and syndicating deals through its capital markets arm. Net income fell 55% from a year earlier to $660,000,000 The earnings were impacted by a $5.25 $92,000,000 income tax provision. The company also announced its Board had approved a $4,000,000,000 share buyback plan. Annuity sales to everyday investors moderated from last year's highs, with Athene reporting $34,000,000,000 in inflow through retail annuity sales in the year, including $7,300,000,000 in the final three months of the year.
Speaker 2:The insurance unit
Speaker 1:Every time we every time one of these companies has earnings, I just I just makes me it's hard to wait for at least one venture firm to get out into the public markets. Like, how how fun would it be to to listen to Mark Andreessen on an earnings call?
Speaker 2:It'd be so good. I I I just I was so optimistic that it was gonna happen last year or maybe this year, but it just feels like that was total just like head fake from both General Catalyst and Andreessen. Like, it never really went anywhere.
Speaker 1:They're like, I don't want to go public, but I don't want my rival to go public before me.
Speaker 2:Maybe. Maybe. But I don't think it's happening. Don't think we'll see it. Although, aren't there venture funds that might be traded on the public market soon, so you might see some of that, but it'll still be tricky.
Speaker 2:It's no it certainly won't be like a proper venture fund that we know on the markets. Really quickly. Cisco, critical infrastructure for the a for the AI era. Unlock seamless real time experiences and new value with Cisco.
Speaker 1:Monday.com had earnings, and the stock went down 21% after they flagged AI agents as a competitive threat on their earnings call. Anyways
Speaker 2:What did they say? What did they say?
Speaker 1:Trying to pull up what they said exactly.
Speaker 2:Issued weak guidance as it grapples with rising concerns that artificial intelligence is disrupting software business models. I imagine it's seat based right now, monday.com, and they have to transition to some sort of consumption based, some sort of usage based, something outcomes based, I suppose.
Speaker 1:Yeah, you'd think at least some would say, like, we actually love the seat based model in the era of agents. Every agent will require a seat. You might have again, might have a 100 employees, but then a bunch more agents. Maybe you can't charge nearly as much on a per seat basis. But Yeah.
Speaker 1:We'll we'll see how this nets out.
Speaker 2:Yeah. It seems pretty easy just to be like, you have one agent that goes into the software and does everything that it needs to and then brings it out to your organization. It's like, I need to use the tool.
Speaker 1:There's one agent whose sole job is to pull a view.
Speaker 2:Yeah. Everyone gets a prompt box. And then that agent has one seat and uses the tool and brings you back the results. That's a risk.
Speaker 1:BUCO Capital is out for blood. He's you worried about stock based comp. Me, these businesses only need half their employees.
Speaker 2:Oh, so he's bullish. I believe I believe he thinks that the the SaaSpocalypse is overstated. For sure. Headcounts for assorted companies Salesforce is at 87,000 ServiceNow, 32,000 Workday is at 23,000 Zoom is at twelve thousand DocuSign, famously large, at 8,000 OpenAI is at seven Okta is at 7,000 UiPath is at 5,000 Sprinklr is at 4,000 and Anthropic is at 4,000. Yes, UiPath still has more employees than Anthropic.
Speaker 2:Infer from that what you will. The flip side of this is that the companies do need employees to go deploy AI and actually lead about change management and get the they certainly need to talk to the NFL's photographer about with a software that they should be using to upload those photos a little bit faster.
Speaker 1:Tyler over at Pellion says, correct to Bucco. Have a strange amount of conviction that they could cut up to 40% and not impact growth. Bucco says, in fact, it would accelerate. Yeah. Peter it's a fake Peter Thiel account.
Speaker 1:Peter, t e a l Okay. Says, really, only 10 to 20% of x is a good case study. How how many is that actually did x really only cut?
Speaker 2:I think they cut, like, 70% of the workforce. I thought they were up at, like, 5,000. They went down to, like, 1,000. But while you look that up, let me tell you about Lambda. Lambda is the superintelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 1:I am pulling this up.
Speaker 3:I think it was, like, 80%.
Speaker 2:Yeah. 80% reduction. Yeah. That's huge. Yeah.
Speaker 1:Yeah. Did it accelerate? I'm seeing 80. Pre acquisition It was so 2021. Yeah.
Speaker 1:They had 7,500 to 8,000 employees. As of late, they have 20 Yeah. At late twenty twenty four, had 2,800 employees.
Speaker 2:Yeah. It was so was I mean, it was such a chaotic time. Like, they were changing the business model. A lot of advertisers were boycotting and pulling out. There was political considerations.
Speaker 2:There were all sorts of things that were going on. So I would hesitate to say that they accelerated the top line, but they certainly rightsized that business very, very quickly. Yeah. Derek Thompson is giving a shout out to Matt Levine. KPMG is trying to force its auditor to accept less money since accounting work can be significantly automated by AI.
Speaker 2:But KPMG makes money from accounting. So this looks like a company accidentally announcing to the world that its business model is under attack. Matt says, auditing can basically be done by AI, so why should we pay for it? It's not a crazy thing for most companies to think or to say to their auditors, but it's a crazy thing for an auditing firm to say to its auditor. That is, that is wild.
Speaker 2:KPMG should be paying Grant Thornton more. In these crazy AI times, everyone needs to pay more for trusted human auditing. We'll go first. I guess that's what Grant Thornton said. I bet we should negotiate a discount.
Speaker 1:Wait. They're saying So they do auditing. Want trusted human? Well, that's a Grant Thornton.
Speaker 2:Like a different group.
Speaker 1:Yeah. It seems like they'll have to switch to value based pricing too, like everyone else. Yeah. And the value, even if it can be one shotted with a prompt by some, you know, super intelligence is non zero. Like, it is very valuable to have an external party verifying your work and the numbers that you're reporting.
Speaker 1:So it's definitely non zero, but Yeah.
Speaker 2:Yeah. The
Speaker 1:the other dynamic is you have, like, basically legacy, you know, the big brands in the space. Yeah. They adopt maybe a more Coke and Pepsi model where, Coke and Pepsi both could you you've talked about this, get in an insane price war, down, compete on price so aggressively that there's just no money to be made anymore, but they have sort of like somewhat of an equilibrium where it's not really in any group's interest to compete prices to zero. And I would say like brand is still gonna matter in this category with auditors specifically.
Speaker 2:And maybe that's where you find bull cases within the broad sell off is do they like Coke and Pepsi, it's a duopoly, not an oligopoly. So there's no third player that can be, oh, we're 5% of the market. There's so much to gain. Let's go be the bull in the China shop. It just doesn't happen.
Speaker 2:And then also there's lock in around the brand. And then there's also lock in around the distribution because Coke and Pepsi have trucks that go to every store where it needs to be distributed. Auditing might not be the same structure. It might not. I think it's more oligopolistic.
Speaker 2:I think there's more firms in the market, and there's less of, like, you have to use this auditor because they're in this particular distribution channel. Anyone can pick up a phone, call the new upstart auditor that has the same level of quality at a lower price. And you if you're getting a good product, you'll just go there. As opposed to if you're at a gas station and they only Coke or Pepsi, you're you're you're you're sort of out of luck. Really quickly, Railway.
Speaker 2:Railway is the all in one intelligent cloud provider user agent to deploy web app servers, databases, more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 1:Let's pull up this clip of Gerstner on CNBC. He hosted CNBC last week. Yes. I tuned in to as much of it as I could.
Speaker 2:From
Speaker 1:Altimeter Capital. Great host.
Speaker 2:Let's see it.
Speaker 7:Why is this happening? To the degree it is, as we've discussed on numerous occasions, is it overdone? At times, you've said yes. The last time we were together, you said something like 90% of the software companies that were down the way they are deserve to be. Those, I think, were your your exact words.
Speaker 2:Convince words.
Speaker 7:Where are we?
Speaker 8:So so when you and I were together on January 6, I said, you have to understand the difference between earnings and revenue and stock price. Okay? And what's happened in software is hard for people to get their head around because the stocks have been cut in half, but that's
Speaker 6:not what the market is discounting, Scott.
Speaker 8:The market is looking into the future and saying, in the past, three years ago, I could I could buy thirty five years worth of of Salesforce's free free cash flow into the future. Give them 35 times free cash flow because I had that level of predictability. It was like a government bond. It was a sure thing. You definitely were gonna get those.
Speaker 8:And then we have AI. Do what AI has done over the course of the last several months, and people just said something very rational. I can't see as far into the future, so I'm gonna pay less for the terminal value. I'm gonna pay less for those future free cash flows. I'm not penalizing them because they're missing their numbers today.
Speaker 8:I'm just putting it in the too hard bucket because I can't predict those future numbers. So the only way that reverses, Scott, is those companies have to accelerate their core revenues and show that they are beneficiaries of AI. The companies that do that, Databricks is accelerating their core revenues. I think this quarter, they're they grew over 60%. Snowflake, Clickhouse, these are companies that are accelerating their core revenues because AI relies on them.
Speaker 8:I think they'll do fine, but application software where I can't see into the future, they're going to have lower multiples.
Speaker 7:I'll tell you. This week was, especially acute in some of the moves on the news of this updated tool from Anthropic Right. Which you're an investor in. Of course, that speaks to me of the the marketplace and the investment community doesn't necessarily know even yet how to assess the level to which software is gonna be disrupted and by whom and by how. Right.
Speaker 7:And even a simple what appears to be a simple update or an upgrade from an Anthropic causes software names to go down. It causes private credit names to go down because they're exposed Right. In their loans to software businesses. We're still trying to get our arms, it feels like, around this exploding technology and the impact it's going to have.
Speaker 8:Right. And it's and it it's exponential. The rate of change, the rate of improvement of these models
Speaker 2:the ex
Speaker 8:chefs had a
Speaker 1:popping any bubble he can get his hands on.
Speaker 8:Second week in in December.
Speaker 1:And now we just have A lot a lot of good points. I mean, I I think the the real SaaS pocalypse might not start until you have some of the labs public
Speaker 4:Mhmm.
Speaker 1:And people can actually really rotate out of software fully and say, I don't wanna own this thing that I don't fully understand how AI is gonna impact it when I could own the disruptor. Right? The Anthropix, the OpenAI's, etcetera.
Speaker 2:So Yeah. Yeah. Yeah. People were asking, like, where will the $50,000,000,000 come from? Where will the $100,000,000,000 of capital come we see this in China, too, where one company will go public and you actually see a drop in the previous Bidus or whoever the legacy company is?
Speaker 2:Because there just isn't that much liquidity in the market. Yeah. So it needs to come from somewhere.
Speaker 1:Sorry. Yeah. I just don't know how the narrative around SaaS flips positive because the models are not getting worse, Right?
Speaker 2:I think
Speaker 1:They only get they only get better. Yeah. We actually need to see some type of plat like, SaaS would benefit from a model plateau. Right? It's like, hey, there's sort of a set we have a set set of capabilities.
Speaker 1:Yep. SaaS companies can deploy this. Yep. But if the models just keep getting better and better and better and agents get better and better and better, what at where's where's the bottom for SaaS other than, some type of, like, minimal free cash flow multiple?
Speaker 2:Well, it's like refocusing on a narrative that has durability even in a world where software R and D is essentially free. I
Speaker 1:guess what I'm saying is, like, Brad's right. If you see a business actually really accelerating, growth accelerating
Speaker 2:Yeah.
Speaker 1:Then it's possible to get excited about that one company. But it's hard to get excited at any point about SaaS broadly because the models are just going to keep improving, and that just seems to be more and more of a threat?
Speaker 2:Yes. But within SaaS, there will be companies that reveal to the market and correctly message that they are, in fact, like AGI resistant because of ad networks, because of lock in effects, because of regulatory moats. There will be a number of categories that emerge. Like when we talk about the payment rails, those feel like, yes, you could maybe vibe code it, but like are you going to vibe code your bank charter and all these other things that you need to do and get all the customers like the distribution, the lock in? So I think within SaaS, there will be things that are pretty easy to just rip out and replace with something directly like a model.
Speaker 2:And there will be other companies that are old and are legacy. But you're just like, oh, yeah, that's actually that can't be assaulted by a model. It's it's impenetrable because it's actually a different thing. And so those companies will wind up sort of rebounding, I would imagine. Yep.
Speaker 2:Anyway, New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange.
Speaker 1:We love New York Stock 1792.
Speaker 2:1792. That's when they started.
Speaker 1:That's when they started.
Speaker 2:Overnight success.
Speaker 1:Created the country and then almost immediately we decided We gotta start time
Speaker 9:to to
Speaker 1:exchange some stocks. Gotta start to start. Michael over at Quiet Capital is quoting Bucco. Says, for fifty Bucco says, for fifty years, we've treated the supremacy of asset light businesses as a permanent economic law. But if AI commoditizes asset light businesses, we'd just be reverting to the historical mean, where value accrued to atoms, infrastructure, energy, it would be a fifty year blip, an anomaly.
Speaker 2:Interesting.
Speaker 1:Michael says, this is one of the most underrated observations in tech right now. If AI commoditizes software, what's actually safe? Regulated liability bearing businesses, someone has to be on the hook. Oh, sure. Anything touching the physical world, hardware, manufacturing, energy.
Speaker 1:Yep. That's a kind of Tesla
Speaker 2:Yeah, these are the subcategories of things that are sort of SaaS businesses now but will reveal themselves as being not actually that asset light.
Speaker 1:Yeah. Proprietary data sets AI makes your data more valuable, not less. Marketplaces and businesses with network effects.
Speaker 2:Liquidity
Speaker 1:greater than software. Operationally intense businesses, the bad businesses become the best ones. And cyber cybersecurity and physical security, more AI equals more attack surface. Yeah, EquipmentShare, I wonder how they're doing. They went out IPO ed at this, I guess, it was a week or so ago, January 23.
Speaker 1:They've done well specifically because they have so much supply on the platform that they actually own
Speaker 2:Yeah.
Speaker 1:That they're and and they're we're just so far away from anything like an optimist being able to like, hey, make me a bunch of heavy machinery. Yeah. Don't make
Speaker 2:Carried no interest in the reply saying, how is this underrated? Most have been talking about this for over a year. I'll say it again, an HVAC business is not vibe coating a service titan competitor. That's true, but there's still the risk of the software vendor for HVAC businesses is now has 25 competitors that can vibe code competitors. And and there's just a lot more fragmentation, a lot more competition in the space.
Speaker 1:Yeah. That's interesting. ServiceTitan serves a pretty wide range, but they also serve a bunch of SMBs. And those SMBs, if you went to them and say, hey, I can build you ServiceTitan, but I'm gonna cut your bill in half because I can use AI.
Speaker 2:Exactly.
Speaker 1:That is a real risk to the bottom because a single owner operated business might just say like, yeah, no one's getting fired if I choose the wrong software. It might be a little bit annoying. But if I can save a lot of money, maybe it's worth it. So I think there is some risk.
Speaker 2:Yeah. There was a good comment in the chat earlier. Someone was saying, it's the famous Bezos quote, Your margin is my opportunity. And so small company comes in, sees high SaaS margins, can actually go attack them now and can, instead of needing to raise $1,000,000,000 and do five years of R and D, they can raise $10,000,000 and do one year of R and D and have a competitor that's ready to go head to head on a battle card against an entrenched like public company SaaS company. And maybe they're only earning 30% margins instead of 60% margins, but they're happy with that because, hey, it's a new business, and they're they they started it from nothing.
Speaker 2:And if they make $10,000,000 they get to take a lot of that home and stuff. And there's a lot of opportunity for these new companies, but then that's obviously a threat for the incumbents. Really quickly, public.com. Investing for those who take it seriously, stocks, options, bonds, crypto, treasuries, and more with great customer service. Who do wanna go next?
Speaker 1:Sheel says the greatest rebrand in enterprise software history is calling consulting revenue forward deployed engineering. I do wonder if a year or so from now, we'll see companies that, you know, these companies that went from 1 to 10 or 1 to $20,000,000 in revenue really quickly, it just turns out, hey, they were doing about $10,000,000 worth of engineering work. It wasn't actually again, a lot of them are setting it up where, hey, we're going to come and build a bunch of software for you, then we're going to charge on an ongoing basis or based on usage. But still, I'm sure there's some examples where it really is just like effectively consulting or you're running like a software development agency.
Speaker 2:Yeah. Yeah. It's funny. Thinking about OpenAI, I think they're at 8,000 employees. And wasn't the report that they're hiring something like 800 forward deployed engineers?
Speaker 2:So you're gonna have a you're gonna have 10% of an AI lab that's focused on AI research curing cancer is going to be like four deployed engineers. And you have to imagine that it was basically zero, you know, five years ago. I mean, I guess Greg Rockman was out there paying people to use GPT too, which I love. But it is going to be a very interesting shift for that business. And I think the forward deployed engineering is going to be important.
Speaker 2:Like the AI diffusion question, it's a lot of sticky systems. There's a lot of people that don't have time. The fact that we see these spikes in attention during long weekends and holidays, it's like that's when people have time to go do the new project and stop doing the same system again and again and again. And a forward deployed engineer comes into your organization and just is able to do that hard work that you don't have the slot capacity for.
Speaker 1:Brian says, did you guys see that guy who offered in person open claw setups for people and accidentally realized it was a 7 figure business? No. I see didn't see was like it was kind of like a geek squad thing.
Speaker 2:That's really cool.
Speaker 1:Yeah. I wonder I wonder
Speaker 2:No. There are Yeah. Plenty of people who are like, I'm I'm I I don't wanna open the terminal ever. Like, I'm I I feel like I'm hacking into the matrix. It's just not for me.
Speaker 2:I don't know. I'm gonna mess up. I don't I don't know any these commands. And so, I mean, that's why the labs are launching desktop products around that are wrappers for the for the terminal agents. But, yeah, there's there's gonna be a lot of bull market for Ford deployed engineers in my opinion.
Speaker 2:What do think, Tyler?
Speaker 3:I was gonna say that's like Ben. Ben's scared to use the terminal.
Speaker 2:Oh, called out. Called out. He's not even here.
Speaker 1:Where's Ben? Where's Ben?
Speaker 2:He he's he's he's he's practicing TMox or CrowdStrike, your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches.
Speaker 1:China is going all in to beat The US on humanoid robots. Yes. Beijing is showering companies with support, but some fear a bubble. Where's our bubble Look at this.
Speaker 4:Oh, We don't
Speaker 2:have the bubble gun. But look at this terrifying bleed. Do you see this? So it has if you scroll way down in the article you can see the comparison of of the different humanoid robots and they're getting taller. Chinese humanoid robots are getting taller very, very quickly.
Speaker 2:So the Unitree g one the Unitree g one is the robot that most people think of when they think of Chinese humanoid robot. The China the Unitree g one has 23 joints and it's four feet four inches tall. Four four feet four inches tall, that's something you can drop kick across the room. It's probably pretty safe, but they're getting taller. The U the Unix AI Panther has 34 joints and is five foot three.
Speaker 2:The UB Tech Walker s two, it has 52 joints and it's five nine. We're getting we're getting short king status now. Then now they're now the a the AI squared robotics alphabet two, five eleven.
Speaker 1:Wait. That could be some regulation that I could get behind. Yes. All humanoids should be capped at a certain height. Yeah.
Speaker 1:So that if if if any any people out there are a little bit on the shorter side, they get to feel tall. Yeah. And then but in general, a lot of the average person should mog the robot. Yes. Yes.
Speaker 3:Definitely. On Dorcasch, Elon said the Optimus is five eleven as well.
Speaker 2:Five eleven. Yeah. That's a very reasonable height. The So AI AI squared robotics, Alphabot two, thirty four joints of freedom.
Speaker 1:Yeah. Let's give it up for the short Degrees of freedom. Let's give it up for Trey.
Speaker 2:It's yes. Give it up. Trey. It's five eleven. It has wheels, but it looks it's starting to look intimidating.
Speaker 2:It's starting to look You
Speaker 1:gotta ask Ashley Vance was at the latest
Speaker 2:Robotics robot fight.
Speaker 1:Fight. We gotta ask him about that later.
Speaker 2:Yeah. So The Wall Street Journal has a whole deep dive in what's happening in China with regard to humanoid robotics. China's going all in to beat The United States on humanoid robots. Of course, they have a ton of industrial advantages. So Elon Musk has been telling investors for months that Tesla's optimist humanoid robot will revolutionize the world and create a new mega industry, But most of it could belong to China, he has warned.
Speaker 2:China is an ass kicker. Next level, Musk said in January. To the best of our knowledge, we don't see any significant competitors outside of China. China is Shots moving fired at at Figure and 1x, but I mean, the supply chain is
Speaker 1:not Yes, Sunday.
Speaker 2:Oh, yeah. True.
Speaker 1:Yeah. He he talks about this in the context of are you gonna be able to make a million of
Speaker 2:Yes. Yes. He's thinking about, like, massive scale gigafactory status. So China's moving quickly to dominate the industry. Humanoid robotics companies are sprouting up from Shenzhen to Suzhou with more than a 140 and counting.
Speaker 2:There's a 140 different companies. So you got a market map over there. We have five, and they have a 140. They're tapping a vast ecosystem of parts suppliers and engineering talent. They're starting to produce humanoid robots at scale and actively Like, this humanoid is running them.
Speaker 1:Running a bit right
Speaker 2:now.
Speaker 1:That's how you run.
Speaker 2:You ever go through TSA and they make you take your shoes off? What's the deal with airplane food? They're actively introducing them into real life scenarios in factories, hotels, and John. Yes.
Speaker 1:Grok, unhinged voice mode in an optimist Very intimidating. Hanging out around the office Very just running bits
Speaker 2:be would actually be hilarious.
Speaker 1:It would actually be hilarious.
Speaker 2:Get ready. I mean, you're gonna be able to do that in like two years. That's It's gonna be viral. That's weird. That like skin over a humanoid?
Speaker 2:Not a fan of that. I think I like the Terminator more than more than the humanoid with the skin. That is odd. Setting the broader industry direction is Beijing, which has identified embodied AI, the fusion of artificial intelligence with physical systems, as cutting edge technology as a cutting edge technology area China wants to own in the coming five years. It's in the latest five year plan.
Speaker 2:Local governments are showering companies with land and discounted office rent. Banks are offering favorable loans. Since late twenty twenty four, Beijing, Shenzhen, and other cities have established investment funds totaling more than 26,000,000,000 investing to inject capital into the industry. Just kidding, France. We love you.
Speaker 2:Government agencies and state owned companies are serving as early adopters, buying up humanoids and deploying them in museums, at events, and on the street as Robocops performing traffic control. The deployments are helping firms build a market and collect data to make the robots work better.
Speaker 1:Yeah. Bishop was saying next week China has some seasonal celebration that they're doing and there's going be hundreds of robots on display.
Speaker 5:Totally.
Speaker 1:They're very good at effectively like scripted Totally. Dances Yeah. Maneuvering.
Speaker 2:I have been surprised that I mean China was very early with the drone shows. Then we've seen a number of drone show companies come to America and do, like, sort of bring that technology to America. I still have you ever seen a drone show in person in America? I've never, like, run into one. Like, you know, oh, they're oh, like, I'm driving in LA and, like, the Charger Stadium just has a drone show Yeah.
Speaker 2:Or, like, I if I live near I I live near the Rose Bowl. So, like, I would I would I see fireworks from the Rose Bowl every once in while. They have concerts, but I've never seen a drone show there. That certainly is getting diffused into America, but the humanoid robot shows can do a whole another level of just like bizarre thing. And it works particularly well there as opposed to a truly unbounded, like, just be a, you know, be be a worker at a restaurant.
Speaker 2:Right? It's like, you know, just dance in in the scripted. Really quickly, Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why a 150,000 organizations use it to keep their apps working.
Speaker 2:So the move the moves closely track the way in which China built up other industries, such as electric vehicles, which benefited from incentives from buyers to help stimulate demand. Now China has many of the world's most notable EV makers, including brands that are eating up the market shares of General Motors, Volkswagen, others.
Speaker 1:Seen the the people doing the I'm outside in the BYD.
Speaker 2:Oh, yes. Is that a Drake line? Did he actually say
Speaker 1:says I'm outside in the AMG.
Speaker 2:Oh, and they changed it?
Speaker 1:And so there's like The AI voices. If this is a campaign Yeah. BYD Genius. Because it's always showing off the features, like it can
Speaker 2:it can You're crazy.
Speaker 1:It can it can the way that
Speaker 2:it can Yeah.
Speaker 1:Automatically park Yep. Like parallel park for you. Not just like a normal parallel park, but it can shift. I don't know what
Speaker 3:It's like the Hummer EV. It has the crab walk. Right? The wheels turn off the axis.
Speaker 2:Yeah. Yeah. Yeah. You can sort of tank, turn where you're spinning the car without moving forward or backwards. And then I think you can also tilt all four wheels so you can drive in at a really aggressive angle.
Speaker 2:But I feel like I saw one, maybe it was AI that was like even more brain breaking than anything I'd seen from an American car at all.
Speaker 1:Yeah. It can do really crazy u-turn
Speaker 2:Yeah. Too. And there were also I saw one video of someone driving BYD on, like, sand dunes. It was really crazy. So people show it off in snow.
Speaker 2:People show it off all over the place. Good marketing. Good marketing. We'll see what they do with the humanoid robots. China is once again mobilizing state support supply chain depth and rapid commercialization to build a new strategic sector.
Speaker 2:Success will depend on who can best solve the myriad techno technical problems associated with humanoid robots. The industry is still in its early days, and it may take years to take off. If it ever does, skeptics say humanoid robots are a bubble and may never find a true use case. What? It's like the most obvious use case.
Speaker 2:It's like, you don't have to reach that far to be like, put the put the e commerce package in the box like they're already
Speaker 1:doing Yeah.
Speaker 3:Like anything a human can do. I can't think of any good use of
Speaker 2:Who said this?
Speaker 1:Horse says cars may be a bubble.
Speaker 2:Bad news. China has a broad supply chain of manufacturers that make the nuts and bolts of humanoid robots. Government agencies and state owned companies in China are buying up humanoids and deploying them in museums. That's an interesting place. It it it does feel like we'll be in a in an era of, like the the Optimus is already deployed into a lot of Tesla showrooms, which is, like, just a cool thing to see if you're at you know, I I was at the Americana brand in Glendale, went into the Tesla store, and it was just like, there's Lucid Air store and there's a a Rivian store, but the Tesla store has a robot.
Speaker 2:And so you're, oh, I wanna go see that robot.
Speaker 3:Diner has one.
Speaker 2:Oh, yeah. They do. Yeah. I drive by that every single day and I've never I still have never been because I I I pulled in the parking lot one day and I felt so uncomfortable because it was all electric cars. And I'm sitting there with this supercharged V eight just being like, I don't belong here.
Speaker 2:I don't feel welcome. And so I shamefully, like, drove away.
Speaker 1:Yeah. Wait. I have so much respect for Yeah. Tesla. Yeah.
Speaker 1:And yet I've never wanted a food product from Tesla. That isn't That's a big part of it.
Speaker 2:Hey. I mean, it's like a, you know, stunt marketing. So let's go into US worries. Even so, China's momentum is a source of concern for US policymakers and tech leaders. The White House has been working on an executive order aiming to boost the development of American robotics industry.
Speaker 2:Among The US's concerns, many American robotics companies will rely on China's supply chain. Dylan Patel over at Summit Analysis has talked about this a lot. Like, if humanoids become a thing, like, China has the supply chain almost exclusively. Tesla's optimists will count on Chinese suppliers for components such as roller screws for robot joints and motors for robot hands for mass production. The US still leaves one key area, the foundational AI models that serve as the brains of humanoids.
Speaker 2:Companies including Tesla, Boston Dynamics, and Agility Robot Robotics have made advances tapping cutting edge technology from the likes of NVIDIA and Google. China has a broad supply chain of manufacturers that make the nuts and bolts of humanoids, including sensors, batteries, and other components. With the ability to source so much locally, Chinese humanoid companies are able to make design changes easily and at low cost. It is a hassle buying from China and waiting two weeks while something ships to you. They don't have to do that.
Speaker 2:They just walk right across the street, pick up whatever they need, bring it back.
Speaker 1:Yes. We're in the process of shifting. We did some sampling for merchant.
Speaker 2:We're refactoring our supply chain.
Speaker 1:Exactly. Our merch supply chain, I would say, it's looking like 80% of merch that we make for our upcoming drop will be made
Speaker 2:In Los Angeles.
Speaker 1:Right here in Los Angeles.
Speaker 2:Yeah, that's exciting.
Speaker 3:I mean, I I do think there's probably some cool things you can do with delivery of humanoids. Right?
Speaker 2:Because Yeah.
Speaker 3:If you're buying it from China, you could just, like, have it go on the plane and just, like, sit down
Speaker 2:Sit in the seat?
Speaker 3:Walk over.
Speaker 2:Have it swim. Yeah. It needs to learn to swim. Give it a windsurf windsurfing board, a paddle board.
Speaker 3:Give it a foil.
Speaker 2:And it can paddle all the way here. I mean, yep. Well, I mean, Palmer's talked about that with Andoril, like they want the planes to fly from the factory straight into the battlefield. Pretty crazy. Chinese makers of humanoid robots, which include human like human like machines with wheels as well as those with legs, don't have to have legs to be a humanoid robot apparently, announced orders worth more than 300,000,000 in the 2025.
Speaker 2:So the Chinese humanoid robotics industry is at a $600,000,000 run rate. It's not bad. It's not tiny. Like that's pretty significant. That's not that's more than just like demos.
Speaker 2:I mean, sure, there's like a lot of museums and random places where you just want to show something off. That's that's getting
Speaker 1:Isn't isn't it's hard it's hard to like, you know, take every Elon projection at full face value, but he's talking about being able to make up to a million Yeah. Humanoids in the in the what is it? The the x and s facilities in Yeah. Fremont. Yeah.
Speaker 1:I have no it's so unclear
Speaker 4:Yeah.
Speaker 1:Like, these are gonna price still.
Speaker 4:Yeah.
Speaker 1:Like, I I think you can look at you can look at Chinese companies for, like, some type of comp. Like, it's gonna be hard to to really compete.
Speaker 2:Yeah. Morgan Stanley has let's see. 100,000. So that's very interesting. So the run rate right now is $600,000,000 Morgan Stanley is predicting up to 100,000 humanoids shipped in 2026.
Speaker 2:If you if there's not significant increases in price for these, that would be $6,000 per humanoid. It must be higher. So I would expect the based on this Morgan Stanley prediction of 100,000 humanoids shipped in 2026, you would expect revenue for the industry to be in the billions for sure. Because I I have to imagine that the average selling price of a humanoid is, like, more like 20,000. It's more like a car
Speaker 1:than You can get a UniTree G1
Speaker 2:How much?
Speaker 1:On their site for $13,500 but they're gonna charge you for delivery, John. They're gonna charge you a dollar and 44¢.
Speaker 2:Wait. Really? A dollar 44?
Speaker 1:They're like, sorry. Our margins are so bad on this. They're actually negative. We we can't we can't afford free shipping for this shipping, this human sized thing across the ocean. It's gonna it's we're gonna
Speaker 4:have to ship it in
Speaker 2:the spookiest coffin possible. Wake awake from the dead. Very macabre. Very, very spooky. Anyway, let me tell you about Plaid.
Speaker 2:Plaid powers the apps you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. Adjusting bedsheets. On a recent weekday at Unix AI, a Chinese robot maker, founder Fred Yang showed a group of investors how its wheeled humanoid panther could easily adjust messy bedsheets, pick up trash, and place dirty clothes in the laundry machine and start the wash. The company has about a 100 employees now, and it's developed three versions of its humanoid robots with a starting price around $12,000 each. It is deployed in hundreds of places such as hotels mostly in China.
Speaker 2:I was in a hotel in San Francisco once, and there was a there was not a humanoid robot. It was more like a trash can with wheels, kinda r two d two looking like guy. If you ordered coffee, they would put it on the on the delivery robot, and then the robot would get in the elevator, take the elevator up to your room, and then knock, and then you would take it out of, like, the bin. It was more like a like a like those delivery robots that you see on the street, the Cocos. Right?
Speaker 2:So just one level up that. It still has wheels. It needs to be in a controlled facility like a hotel, something that's not super unpredictable.
Speaker 1:It goes pretty hard to name your humanoid Panther.
Speaker 2:Panther's a good name. I don't know if I would be fighting alongside Panther in the singularity. Think in the the in the Skynet apocalypse, Panther's coming for me. I'm gonna have to shred it. Yang, who studied at the University of Michigan and Yale University, returned home to China to start UniX a year and a half ago.
Speaker 2:He said China's deep bench of technical talent and government support help make it a good place to launch. Some local governments offer free land and office space for three years followed by three more years at half price. They're giving out free land over there. We can't even get an art gallery in Hollywood to make a TV show. We need
Speaker 1:help. The saga continues.
Speaker 2:We've got to compete. Policy is one of the most decisive reasons that embodied AI is doing so well in China, Yang said in August. I treat the government policy as a force to crack the market, and our embodied AI startups are the force to push. They call it Robot Valley. Other cities and provinces have set up their own action plans and embodied AI funds to provide capital for the industry.
Speaker 2:Tencent, Huawei and EV maker BYD have been part of
Speaker 4:a so
Speaker 1:called Robot Valley BYD.
Speaker 2:In Shenzhen with 15 robot firms there. Shenzhen has said it is setting up a roughly $1,400,000,000 fund focused on AI and robotics industries and another valued around $6.40 What million is that? A fund for ants?
Speaker 1:Robotics fund. They're making
Speaker 2:That's a lot of money. That's a lot of money to just give away.
Speaker 1:They're making ant sized robots.
Speaker 2:I mean, that's a lot of robots. That's definitely like get a ton of these companies to series B. Like, get them with a product that actually ships. Hire good people, do the R and D, do initial manufacturing run. Then, yeah, we're So going you're going to really
Speaker 1:use that skip much with triple layer STDs every day.
Speaker 2:Every day. One humanoid robot robotics firm there, AI Squared Robotics, enjoys subsidized rent as well as access to interns from nearby universities. Their costs are also subsidized. Eric Guo holds a PhD from Purdue and worked previously at Microsoft. The firm's general purpose humanoid called AlphaBot is currently used in factories including LCD, telephones.
Speaker 1:Implies there's a firm called SigmaBot.
Speaker 2:SigmaBot. Yes.
Speaker 1:Somewhat antisocial. Doesn't actually like
Speaker 2:that lurks
Speaker 4:and humans.
Speaker 2:Looks out when a rainy It's plotting. Yeah. Scheming. It's plotting. And listening to vibe reels.
Speaker 2:Our primary focus is to figure out how to make robots usable and operational even when they haven't fully achieved 100% perfection in technology, Guo said in September. Beijing also has an economic development zone with humanoid robot startups. They are doing a lot, $14,000,000,000 to support AI and robotics industries. So China's recipe for government support, low cost supply chains and technical talent worked wonders in the EV industry, but it also led to hundreds of brands crowding the market and severe price competition with many companies unprofitable. As more robots robot firms emerge, fears of a bubble have risen.
Speaker 2:Hoping to avoid that outcome, China's government is drafting a set of technical standards to guide development of the humanoid robot industry, weed out unqualified players and accelerate adoption, according to researchers involved in the process. In November, China's top industry ministry set up a standards committee with executives from leading companies as well as state labs. So China's financial regulators have also tightened oversight on robotics companies seeking to go public to reduce the risk of a bubble. So they say, you go public, you gotta be accountable. You gotta follow all of the regulations so that you're not just fleecing the public.
Speaker 1:Apparently, Warren Buffett was an investor in BYD. Yeah. Gabe just brought this up.
Speaker 2:He was.
Speaker 1:But he exited in late twenty twenty five. He held it for seventeen years.
Speaker 2:What? I didn't know BYD was that old. Wow. You got in early. Was he like a was he like a pre IPO x.
Speaker 2:X. Pre IPO investor or something? I don't know. How do you get into BYD seventeen years ago? That's that's crazy.
Speaker 1:Buffett began investing in BYD in 2008 when it paid 230,000,000 for 225,000,000 shares.
Speaker 2:Yeah.
Speaker 1:Equivalent to a 10% stake at the time. Wow. Basically led the series a.
Speaker 2:Basically. Yeah. That's crazy. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.
Speaker 2:The Wall Street Journal is trying to unpack what is going on in The US labor market. They identified a number of factors that were sort of interesting. I thought we should read through them. So the pace of hiring in America has dropped precipitously, and there isn't a single reason why, says The Wall Street Journal. Instead, there are a lot of them.
Speaker 2:Uncertainty under over tariff policy. There's a variety of things here. But they identify so uncertainty over tariff policy has made it difficult for many companies to plan ahead, leading them to hold off on hiring. Some, particularly small businesses, tariffs have raised cost, making it more difficult to take on new employees. Higher short term interest rates are another pressure, particularly for smaller firms, which often rely on credit card borrowing to meet financing needs.
Speaker 2:Tech companies that hired heavily in the wake of the pandemic are still dealing with an overhang of workers. And then there's another factor. Workers aren't leaving the jobs they have. The number of workers the number of people that quit in December was 3,200,000, and in March 2022, it was 4,500,000. So less people are quitting.
Speaker 2:And so that's obviously putting pressure on the labor market because there's there's there's less employee churn. When post pandemic hiring was in full swing, the quits rate, which measure which measures quits as a share of employment, was 2%, well short of the 2.3 it averaged in 2019 before the pandemic.
Speaker 1:Yeah. It felt like at the back half of last year, everyone a lot of people started saying very publicly, if you have a job right now
Speaker 2:Keep it.
Speaker 4:Keep
Speaker 2:it. Yeah. So Yeah. Maybe it's So the labor market on
Speaker 1:than I thought.
Speaker 2:Thursday reported that the overall number of hires employers made in December came to 5,300,000. That put the so called hires rate, the number of hires employers made as a share of overall employment at 3.3%. That's a very low number, not only below the level of a few years earlier when businesses were desperate to bring on new workers, but also well below its level before COVID hit. Low hiring has historically correlated to much higher unemployment rate than The U. S.
Speaker 2:Is actually experiencing, 4.4%. The disconnect between the two reflects an unusual environment where, despite the low pace of hiring, employers haven't been shedding as many workers, notwithstanding some of the big recent layoff announcements. As a result, employment has been growing at glacial a pace with the economy adding the fewest jobs last year outside of a recession since 2003, and economists expect annual revisions, including the January employment report coming out Wednesday, will bring the twenty twenty five jobs tally lower still. The relatively low number of layoffs, said JPMorgan Chase economist Mike Feroli, is a reflection of an economy that continues to chug along and hasn't undergone the kind of shock of demand that leads employers to start shedding workers. So top lines aren't decelerating.
Speaker 2:The economy is doing well. But the low level of quits, on the other hand, is probably driven by workers' sense that the labor market is fragile. And there was another article in The Wall Street Journal today about how the the recruiting business is flipping and people and it used to be employers would pay the recruiter fee, but now job seekers are paying recruiters to find me a job. Like, if you find me a good job, I will pay you to find me the job.
Speaker 1:Oh, success fee
Speaker 2:Success fee paid by the talent. Yes, which is the opposite of what it usually is.
Speaker 1:Yeah. That's interesting.
Speaker 2:So consumers surveyed by the New York Fed in December put their chances of finding new work in the next three months if
Speaker 1:they lost their job because if you're a company and you find out somebody's going around offering to pay people to find them a job, that's a very probably negative signal because a lot of the best talent doesn't like, has no shortage of job opportunities. Right? Sure.
Speaker 2:Yeah. Yeah. I was looking at this
Speaker 1:I mean, there were there were other there were other attempts at this over the years. People trying to build kind of like talent agencies for tech talent. There was at least one company that was doing that. I I I don't know the latest on them.
Speaker 2:Mhmm.
Speaker 1:But it's yeah. People trying to comp, like, tech hiring market to sports. Yeah. Right? And it felt like we had that moment
Speaker 5:Yeah.
Speaker 1:In summer of last year. But in reality, those people, again, you know, hopefully, if you're negotiating a comp package worth a 100,000,000 or 50,000,000 or even 10,000,000 Yeah. You have, like, a lawyer involved. Yep. But unclear if if anybody really capitalized on that moment and became like the agent for a lot of these different researchers.
Speaker 2:Yeah. I talked to one person who was sort of a talent agent recruiter, I think for like GP positions at venture capital firms. And there's a few other people that have sort of played in that space but not not too much. I have one more thing but quickly Figma. Figma helps Figma make isn't your average byte coding tool.
Speaker 2:Gives in Figma so outputs look good, feel real and stay connected to how teams build, create code back prototypes and apps fast. So I was looking at the share of white collar work over the last century in America. In the nineteen hundreds, white collar work was around 18% of American labor and electrification was the big technology of the day. It was transforming factories, cities and homes. Then in the 1910s, nineteen teens, we got the automobile.
Speaker 2:White collar work moved upwards to 20%. Then in the 1920s you get radio and consumer electricity. White collar work goes up a little bit more, 22%, 25%. In the 1930s you get aviation. Despite the depression, white collar work kept climbing 25 to 27%.
Speaker 2:In the 1940s, you get nuclear, radar, synthetics, white collar work goes up to 30%. In the 50s, you get television, you're up at 35, 40% white collar work. In '19, in the nineteen sixties you get mainframe computers and space technology. White collar work's up at 42%. IBM is starting to dominate.
Speaker 2:The 1970s you get semiconductors and microprocessors. White collar work goes up to 46%. The personal computer in the '80s leads to 50% of the American workforce working in white collar work. The Internet in the '90s pushes that up to 58%. You have Netscape, Amazon, Google.
Speaker 2:Mobile and smartphone kick off in the 2000s. White collar work's up at 60% then. And then in the 2010s, get cloud computing. That takes it to 62%. So now we're at like between 6063% white collar work.
Speaker 2:And there's this big question about like, do we redefine what how people work? Where do things shift around? But Tyler, what
Speaker 3:what do Yeah. That's what I was gonna say. Mean, I think Boris You got
Speaker 1:a blue collar on right now.
Speaker 2:You do. Do have
Speaker 3:a blue collar on. I I think it was Boris yesterday. He was like, well, maybe we have more blue collar jobs in some way, but the the colors are less blue. Right? So it's
Speaker 2:like Yeah.
Speaker 3:You're maybe you're you're in a factory, but you're only you're just using an iPad. Right? Yeah. You're not actually moving things with your hand.
Speaker 2:Totally. Totally.
Speaker 3:I think it's like very I think the line is getting increasingly blurry at
Speaker 2:least. Yeah.
Speaker 3:Know. Like in The US.
Speaker 2:Yeah. Yeah. Yeah. No. I I I completely agree.
Speaker 2:And it does seem like people will just be moving around to new jobs. New jobs will be created, but certainly a lot of opportunity for like chaos and turmoil if things happen quickly. Although at least according to The Wall Street Journal, there's a whole bunch of different factors that are going on in the labor market. They they sort of conclude that article talk talking about how it's still difficult to really quantify the impact of AI because there's so many other things happening around interest rates, tariffs, quit rates, hiring slowing, COVID overhang that you shouldn't just jump to being like AI is 100% explanatory for what's happening in the labor market. Quickly, let me explain to you Labelbox.
Speaker 2:Reinforcement learning environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. You wanna go back to Ferrari? There's more Ferrari.
Speaker 1:He's an automotive advocate according to his bio. He says to all the people who for some reason want the inside of a Ferrari to keep looking like a mid range gaming mouse, Here's a historical comparison that may provide some context for recent design choices. This is very cool. Mhmm. I I really it was easy, obviously, to clock that the steering wheel of the Johnny I Ferrari looks like some classic Ferraris, but I hadn't seen a shot exactly like this.
Speaker 1:I can't sell. I don't know what car this actually is, but you can see a lot of the same functionality. Even the vents up at the front are are quite similar. They've just they've just modernized it. So my main thing, I'm going to have many more thoughts on the Ferrari, but I will wait to see what the outside of the car actually looks like.
Speaker 2:That's true. Yeah. Mean, very mixed results. People some people were super excited about this design. It's always just cool to see, like, what Johnny Ives is up to outside of Apple.
Speaker 2:Like, this is one of the first big projects that we've We've heard about the Love From acquisition with OpenAI, what he'll be doing there. But all of that is still very rumored. It's unclear how much of his design work is actually working its way through the OpenAI organization. But here is just like a project that he did from start to finish and turned over. Like, they they delivered not just like a deck, but like a series of books.
Speaker 2:Do you see this? Like, five multiple 100 page, like, coffee table books around their work. Like, here are all of our references. Here's how we think about Ferrari's history, all this stuff. I think it was very, very cool.
Speaker 2:But very mixed reaction. Lee says, cover the badge and you'd think this was the interior of a budget hatchback. I don't know if that's entirely fair. I think that up close and personal You you
Speaker 1:could convince me from far away that this was in the new Mini Cooper. Yeah. Totally. But I think the thing that is undeniable is like some of the little details. Right?
Speaker 1:You can to start the car, you can like pull this thing out. Yeah. Lights up. I think that'll be very cool.
Speaker 2:Yeah. Ilya has imagined starting your car like that. It does look very cool. Is this in the ceiling? Like, why are why is the video that Oh, yeah.
Speaker 2:That
Speaker 1:would be
Speaker 2:This looks like you pull it down from the ceiling. It doesn't look like the way the camera is pointed looks like this will be up top, which is very cool and very different. And I think this is something we were talking to a friend about that the tactile feel and the way like, I saw some ASMR video of of all the different buttons and the buttons make even if it looks like the same switch, makes a slightly different sound when it clicks. And so you could potentially have an audio cue that knows, okay, if I click this, it's the light. If I click this, it's the windshield wiper.
Speaker 2:If I click this, it's defrost. And all of that makes no sense in a gas car because Ferrari is going to be very loud. But in an electric car, you can actually hear all these little subtle cues and it really takes beyond like the the image doesn't do it justice. I like I just know that when you're there and you're feeling the materials and then interacting with them and the sound the materials make and the feeling of every knob, every button, how it works, that's very interesting. But at the same time, p Norm says it looks like a PS two peripheral, so you got them dead to rights there.
Speaker 2:But, you know, you got to see it. Yeah. This is it. All the buttons and switches in the far loose sound incredible. Love that they went for a real tactile experience instead of just a touch screen.
Speaker 2:If we have audio here, you can hear them sound different. That's really cool. Yeah. So this sounds the same.
Speaker 1:But That's good. That's good.
Speaker 10:That's That sounds good.
Speaker 1:You ever seen one of those new car reviews where they push Yeah. The plastic throughout the whole car and sometimes it it it, like Yeah.
Speaker 2:It Listen. Listen. So if you go back a little bit. So listen to the different switches. They sound different even though they're, like, on the same dash.
Speaker 2:This one. Okay. See? Different sounds. That's really cool and unique.
Speaker 2:I've never seen that before. I was I was I was intrigued.
Speaker 1:Like this.
Speaker 2:I like it.
Speaker 1:I like this.
Speaker 2:Johnny, I've come on the show. Johnny Drive. Johnny Drive is making cars now. A lot of people in Silicon Valley are are teeing up. Ilya Sukar said, how do I order the Johnny Ive car?
Speaker 2:I'm ready. I call it the Johnny Drive. Anyway, Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card.
Speaker 1:We have Vincenzo.
Speaker 2:We do. Amazing.
Speaker 1:I'm ready. Can
Speaker 2:Vincenzo bring him is in the restroom waiting room. Let's bring him in to the TVP and Ultradome. Vincenzo, how are you doing?
Speaker 1:What's going on?
Speaker 6:Gents. How are you?
Speaker 2:Good to see you.
Speaker 11:What's happening? Yeah.
Speaker 6:Good seeing you. Nice. Here talking about car oh, this is the Williams pit crew, retro pit crew.
Speaker 1:That's very nice.
Speaker 2:Shirt. I love it. I love it.
Speaker 1:That goes
Speaker 2:Well, thank you for taking the time.
Speaker 1:I might have to do a Puma collab.
Speaker 2:Give us a
Speaker 6:Still waiting for my TVPN.
Speaker 2:We'll send it to you. We'll send it
Speaker 1:Aren't we all? Everyone's waiting except for me. I John John this morning John this morning was like, yeah, it's really cool how how every, you know, every Tuesday you wear a new one of one. But we're in the sampling process, so don't worry. We got a bunch of stuff going on.
Speaker 2:We will
Speaker 1:be mass producing. We've been talking about Ferrari, but I wanted to on the new Johnny Ive car.
Speaker 2:The Luce.
Speaker 1:I hadn't actually seen that video yet.
Speaker 6:The Luce, Luce. It's Luce, John. Luce. Light means light in Italian.
Speaker 2:Break it down. What was your reaction? Do you like it? Is it too iPad like? Does it look like a PS2 peripheral to you?
Speaker 2:What do you think?
Speaker 6:I think I'm I'm I'm majority in this one where I'm like, I'm kinda torn. Mhmm. Like, I I wanna like it for what it is, and I think it's it looks cool. It looks great. Yeah.
Speaker 6:But is it is it Ferrari?
Speaker 5:It is a little
Speaker 2:It doesn't But is electric Ferrari? You know, they're doing a different drive train.
Speaker 6:Well, that's a whole other that's a whole other issue.
Speaker 2:Like, just go full send and
Speaker 1:change everything about funny because because, American consumers have broadly rejected EVs even though there are some that sell well. Every American manufacturer Like Ferrari is so late to the game, every American manufacturer has already taken like a multi tens of billions of dollars worth of write downs already. So they're coming in. So I'm expecting the car to be cool. I'm expecting it to sell well in LA, which naturally means it will sell terribly in the rest of the country.
Speaker 1:We're expecting it to be Ferrari's just like known watch f one. Right? Like and and decide Yeah. Do you want a daily Ferrari? Yeah.
Speaker 1:I've tried doing that. It's not good. I expect but but the the price point's interesting. The Johnny thing, I'm expecting
Speaker 2:price point yet?
Speaker 1:No. I just I think you can assume, like, it's not gonna price like the Purosangue up in the half $1,000,000 range Mhmm. Because you're getting a naturally aspirated v 12. Yeah. And this is, like, not even Here's
Speaker 2:what they gotta do. They're they're they're changing the drivetrain. They're changing the UI and all the interior. They gotta change the exterior. It's gotta look like a Cybertruck, and it's gotta be orange.
Speaker 2:They say, we're we're burning the ships. No no Ferrari design cues whatsoever. Just complete blank slate. You already frustrated a lot of people. Why not just frustrate 100% of the audience?
Speaker 1:Have you do you have do you do you know when they're gonna come out with the actual like, what the car actually looks like? Because the render that's been getting shared around is not released
Speaker 6:I by any did not see the date on anything. I I I the render looks doesn't look impressive.
Speaker 2:Yeah.
Speaker 6:So I really hope that's not what it's gonna look like.
Speaker 1:Yeah. NASCAR. NASCAR broke a what is it? A Guinness World Record for loudest billboard. What's going Yeah.
Speaker 6:Bring it guess that's a I guess the thing. Yeah. They're going
Speaker 1:this is the alpha. You gotta be making up records that only you can achieve.
Speaker 2:Yeah.
Speaker 6:Correct. Yeah. They have got a billboard out in Times Square, which it feels like there's so much motorsports stuff happening in Times Square. We had the Cadillac f one reveal. Aston Martin took out some billboards out there.
Speaker 6:Well, I said some billboards. They had a whole bunch of Times Square queued up with their reveal. Their launch was happening. And then NASCAR did this, but I I thought what was really impressive was the ad they put out. Did you guys see the ad they put out?
Speaker 1:The two the red truck. The guy in the red truck.
Speaker 6:Clint Eastwood's kid. It's Scott Eastwood. Yeah. So it it really impressive. So a lot of they had a moment at kind of a Bud Light moment too.
Speaker 6:Right? They kinda switched up, started alienating their Oh, okay. Typical base.
Speaker 1:Yeah. Wait. So they
Speaker 8:switched up
Speaker 1:on their day ones?
Speaker 2:They did switch they were accused of switching up on their day ones. But this is a return
Speaker 1:to campaign. Let's play just I just dropped it for the team. We can we can watch it together. Can watch it together. A little watch party.
Speaker 2:A little watch party. I love it.
Speaker 6:It's pretty fantastic if you're Yeah. If you're into America.
Speaker 2:Okay. One second. So we can be loud. Here we go. So we can be free.
Speaker 11:We don't come from royalty. We come from food bootleggers and barn builders.
Speaker 1:Shots fired.
Speaker 11:War about grit, fights for inches, and contact accounts.
Speaker 5:Boat, a fairy, you know.
Speaker 1:Wait. Is Clint Eastwood's son is he an actor?
Speaker 2:Or He's a very famous
Speaker 1:actor. Okay.
Speaker 6:Yeah. Yeah. Yeah. Yeah. There's also I
Speaker 1:didn't know if he was a NASCAR driver.
Speaker 6:No. No. No. There's a YouTuber, Cleetus, I believe he's in it too, which a lot of people spotted.
Speaker 2:This is great driving. Wow. The sense speed here is amazing. This
Speaker 6:is like Freebird kicks in.
Speaker 2:Yeah. It's a level above even like Oh. Watching a movie, a Michael Bay movie or something.
Speaker 6:Michael speaking of Michael Bay.
Speaker 2:True like true like brand collab here.
Speaker 11:It's This
Speaker 2:is a NASCAR ad, but it feels like This is an for seven other things.
Speaker 6:Oh, I mean, it's it's motorsport. You should have a bunch of ads.
Speaker 2:You should have a bunch of logos. Yeah. Stack them up. Stack them up. Stack them.
Speaker 1:Ben, Sam You got I mean
Speaker 5:This is
Speaker 2:good editing. This editing feels like a vibe real. Like, it's very, like yeah. It's really it's like the cuts are so fast.
Speaker 6:It's like somebody said give us the most America feeling trailer you can possibly think of.
Speaker 2:That's super cool. This is fire
Speaker 1:in the in the YouTube chat. So he's commenting on Apple. He says, car takes the awkwardness of the Apple Watch and scales it up to a car.
Speaker 2:Oh, no. Whoever
Speaker 6:said that is accurate.
Speaker 10:That's exactly kind of funny.
Speaker 1:Anyway, so so NASCAR switched up on their day ones. They're like, we're done. We're we're back.
Speaker 2:But they're back. They said, we never forgot the day ones.
Speaker 1:They take some shots
Speaker 2:at The f royalty thing. Right?
Speaker 6:Yeah. Oh, yeah. We're not here for royalty. We're, you know, we're we're founded by boot bootleggers and barn builders, and so that's kinda that's what sets the whole thing off anything.
Speaker 1:How NASCAR what percentage of NASCAR drivers do you think are if they're taking shots at the European royalty f one pipeline, are is NASCAR a a motorsport where you can be truly self made, actually just work your way up? Or is it just like American's version of royalty, like your father had an oil and gas company, and so you're a NASCAR driver kind of thing?
Speaker 6:I mean, somebody put up with this this graphic, and it was like, here's all the top players in, you know, NASCAR. Bill France, Michael Jordan, Roger Penske. Okay. And it's like they're all billionaires.
Speaker 2:Yeah.
Speaker 6:I mean, listen, it's everyone's got their version of royalty, but I think it is a little bit easier to come up in a somewhat of a NASCAR, maybe not at the cup level, but even at like the XFINITY series, there's the ARCA series, which is kind of like their third division. You can come up in those pretty well. You the the bottom line on motorsport is you still need money to race in it. You need significantly less. I don't have the exact figures, but you need significantly less to go through the a NASCAR feeder, or NASCAR ladder than you do f one.
Speaker 6:F one formula racing, it's insane. It's like, the numbers are mind boggling. I I had someone on the podcast recently who was telling us, like, you need $400,000 a year just to even be in the formula series, or in the formula two, I think it is. And then or formula three. Formula two, you already need like almost 1,000,000 per So if you're not getting out of that soon enough and getting into like a paid f one c Yep.
Speaker 6:You're like, how how how long can you sustain that without being loaded? I I think
Speaker 1:people were running the numbers like Lando's dad spent like 40,000,000 or getting him to the point where it was like Yeah. Yeah.
Speaker 2:Yeah. We talked to some like IndyCar guys who were it's basically like they had a family friend who ran an investment company or a law firm Mhmm. And they put up like 20 k a year and they're like, just put our logo all over it. We'll go and like take clients to the local race. And it's like Yeah.
Speaker 2:Not a huge investment for some company that's doing well and they see it to support like a local hometown hero. And so they can actually get racing and then move up.
Speaker 1:What are you like, NASCAR is doing this in response. They wanna are they is this they're threatened by f one and the popularity f one has three races in The US now. Do they feel like, hey, there's a number of people that are gonna be just saying, well, I'll just go to f one. It's got the glitz and the glamour, and and maybe they're worried about people not kind of entering the NASCAR world, or is this just, hey, we should do a new campaign?
Speaker 6:So NASCAR, they they got a new agency or late last year, creative agency, and I believe it's seventy two and Sony Mhmm. But don't quote me on that.
Speaker 2:Mhmm.
Speaker 6:And they wanted to just attack this whole thing. Right? You've got f one growing, IndyCar, the massive deal with Fox. Fox took an investment stake in IndyCar and all the broadcast rights. So there's a a massive thing going on there.
Speaker 6:IMSA, sports car racing, their YouTube channel is about to surpass NASCAR in terms of growth, and they're they're growing tremendously off the charts.
Speaker 1:I couldn't Yeah. I couldn't believe that stat. I was like, the only way this makes sense is is if NASCAR has just not been paying attention to social media or something. Imsah obviously has like a massive international audience who NASCAR, you know
Speaker 6:Very big.
Speaker 1:But even even as like somewhat still, I I consider myself a casual viewer of all these things, but like, IMSA's a lot more exciting to me. You have the battles. You're not just around an oval. Right? It it's it's very racing.
Speaker 1:Yeah.
Speaker 6:Yeah. They also they may so what IMSA did really well was they worked out a deal with NBC to allow international feed to be completely free on YouTube. So internationally, you can watch if you're outside The US, you can watch it.
Speaker 4:Mhmm.
Speaker 6:From flag to flag
Speaker 4:Mhmm.
Speaker 6:For free on YouTube.
Speaker 2:Very cool.
Speaker 6:You know, is that something others are doing? Now, I think NASCAR is tripling down on we're America first. We're gonna go all in on America. We saw the they've got the Andoril race coming up in San Diego. Anderle is sponsoring car like, there's there's a lot of that come back to, hey, we are an America first series.
Speaker 6:We're gonna go all in on America first.
Speaker 2:Yeah.
Speaker 6:So they're gonna double double, triple, quadruple down on what works for them. Other series will have to do the same thing, and I think that's what they're seeing more than anything is, you know, f one's doing what they're doing, IndyCar is doing what they're doing, IMSA, which is owned by NASCAR, is doing what they're doing. Like, we have to go back and find an identity. We can't just try to be all things to all people. It's just not gonna work.
Speaker 6:It's not that kind of racing. And there's so many other flavors of racing now that are available to everybody. They're so attainable to watch. It's like NASCAR, you need to carve out something, and that's what I think is happening, what is actually happening.
Speaker 2:Yeah.
Speaker 1:Switching gears, Aston had their event yesterday. I was excited to see Cognition working with Aston. They got all their enterprise clients, gotta get them on the paddock. Public, of course, sticking with Aston for the season as well. What's going on with Cadillac?
Speaker 1:How how how like how would you rate their their whole launch, their entire strategy? Running a Super Bowl ad for a new Bold. Formula One team, very bold. Was that Yeah. To get was that a to acquire?
Speaker 6:I'll say I've got a double take. First of all, to go back to Aspen Eight Sleep. Did you guys see the Eight Sleep announcement? Woah.
Speaker 1:There also
Speaker 2:That's right.
Speaker 6:So, that's a big one because Yeah. Not only are they a partner, they are a partner with Aston. Aston invested in Eight Sleep.
Speaker 9:So, it's
Speaker 6:a little bit of a two way situation here. So, that's a that that was big news today. For Cadillac
Speaker 1:an investor, so he's like down to do some equity. Equity deals and stuff. Yeah. Because he's like, I got the cash.
Speaker 2:Yeah.
Speaker 6:That's a thing. That was a thing. As for Cadillac, they were attempting to reach a new audience that they don't have, right, The US audience. They don't have anybody yet, and I think the Super Bowl ad was aimed at doing that. I don't know the ins and outs of what they were trying to accomplish, because it was it felt like a very fast spot, and you guys were at the stadium, so I don't know if you saw it, but it was it showed up, and it felt like it was over really quickly.
Speaker 6:The longer full spot, the one minute that I that you see
Speaker 1:on social media
Speaker 2:one You watched minute on the stream the next day.
Speaker 6:Correct. But during the moment, I had a lot of people text me and say, hey, what was that Cadillac thing? Because they were pulled in by the JFK speech, which I thought was brilliant, and the moonshot, the whole that was great, but I think if you're watching the game and you don't know it's coming, which a lot of people don't, they had no idea what was going on. A lot of people that did not know, I was like the people I was watching it with, was like, hey, check that out, and they were like, what happened? And I said, they're a new f one team, and they were like, oh, that's what that was?
Speaker 6:So, a lot of people had no idea. So, I'm curious to see if it worked. They had the Times Square activation, which I thought was the better move in terms of actually getting people like interested, because you had this box sitting there thawing out in Times Square for a couple days, so people had to figure out, like, inquire what is going on. Oh,
Speaker 1:it was frozen?
Speaker 6:I think that was the the
Speaker 1:the The idea?
Speaker 6:What it looked like. It looked like it was frozen, then it was thawing right at that last minute. So I like what they're doing. They ended up with not a lot of sponsors on the car. They used a lot of TWG's assets.
Speaker 6:So TWG AI is like their big primary partner, but TWG owns the team. So Mhmm.
Speaker 1:Oh, I didn't know that.
Speaker 2:Yeah. I was just expecting for Cadillac to partner with like an Exxon or a Chevron or some you you have your Ramco out there and there's just Give
Speaker 1:it up big oil.
Speaker 2:Pockets. A lot of the big tech
Speaker 1:We love big oil, but we also like asset management
Speaker 2:We do. And TWG.
Speaker 6:There's a lot.
Speaker 1:What do you have any idea what percentage did did Cadillac retain significant ownership in the team, or does TWG effectively own the entire thing?
Speaker 6:It's TWG Motorsports that runs the whole thing. So they're basically operating a factory car or GM Yeah. Under the Cadillac badge with a Ferrari engine.
Speaker 11:Yeah.
Speaker 6:If that makes any sense to anybody.
Speaker 2:I love it. That's that's f one. Get ready to study. Hit the bus.
Speaker 6:And that's also probably why they're not they don't have a oil partner yet
Speaker 12:Yeah.
Speaker 6:Because they're using Ferrari, so they're they're they have to use Shell, I'm
Speaker 11:guessing. Sure. Sure.
Speaker 6:The power unit.
Speaker 2:Yeah. Yeah. Yeah. That's tricky. You did get fact checked on the seven two 72 and sunny thing.
Speaker 2:You were right.
Speaker 9:Okay. Good.
Speaker 2:You were right. Good job. I wanna get the Rolex 24 update. How was it? You were there.
Speaker 2:Give us a review.
Speaker 6:Dude, I mean, the cars are like, that's to me what cars should sound like. The the Valkyrie was there, the naturally aspirated v 12.
Speaker 4:Yeah.
Speaker 6:And in IMSA, there is no they don't muffle the the engines, which they do they have to in WEK in the the World Endurance Championship.
Speaker 5:Interesting.
Speaker 6:So it is full bore, during the night, you hear that thing around the track.
Speaker 1:Wow. I got to sit in the passenger seat of a of our friends, Valkyrie, and every single corner was, oh, I'm gonna die. I'm going out the wall. Oh, okay. We made it around next corner.
Speaker 1:Oh, I'm gonna die. Oh, we made it around somehow. Coming around. Oh, The we're gonna
Speaker 6:access people have though at IMSA is really, really crazy. I mean, there's fans of any like, with any ticket can walk through the the garages, and there's like a whole pit walk, and
Speaker 12:That's cool.
Speaker 6:So people that just think of f one as the only thing out there, like, have no idea. There's well priced series to get you into, you know, into motorsports.
Speaker 2:Mhmm.
Speaker 6:But there's nothing like Daytona. There's nothing like an endurance race. I had never been to the twenty four hours of Daytona. That was my first time there. It's just such a cool event.
Speaker 6:Woah. Such a cool event. I mean, people are up the whole time. There's festivities going on, walking through, like, where all the RVs are. I mean, people are absolute party.
Speaker 6:It's it's a good time.
Speaker 9:So if you
Speaker 6:ever wanna go for a good time, Daytona's a great time.
Speaker 2:Was your experience like? Were you up for twelve of the hours, eighteen of the hours? Are you sleep deprived? Or is it more like, I'm going to the day and then I'll sleep normally and then I'll come back for the day section?
Speaker 1:Yeah. Do you really need to catch the fog? This is hours of straight fog.
Speaker 6:No. Fortunately, I didn't have we didn't have anything to do during that. Like, we weren't tied to anything. We had gone up to like the spotter stand and the the starter stand. We had done all the things.
Speaker 6:We were hanging out with the president of IMSA. We were in the suite. Like, so we they were taking us around, but then around eleven around midnight, it was like, alright. Things are dying out. The fog was coming down, so we actually went back and came back at about 08:00 in the morning.
Speaker 6:So there was like an eight hour period. So what? Sixteen hours I was up for for the actual race.
Speaker 2:Not too bad.
Speaker 1:What what kind of stories, narratives are you tracking ahead of the Formula One season? I know there's been some drama with kind of some of the advancements Mercedes made and other teams pushing back. Can you can you share more on that front?
Speaker 6:I'm tracking to see if any of this anything pans out with the Mercedes situation. There was this rumor that I don't believe is gonna happen, but a rumor that the Mercedes cars may not, like, start in Australia, which is not gonna happen. It was just interesting if that was being floated around, and I know Red Bull was trying to, you know, garner support. And then Dan Taurus today, the CEO of the Cadillac team, he actually said, like, yeah, we're all, like, we're all kind of competitors. We're we're banding up against Mercedes because they're they're competition.
Speaker 6:So obviously, if you take out the Mercedes engines, which to me tells me they are just very worried about that engine. It's it's it must be that good. They're pushing the FIA to change how they're measuring compression ratio, which
Speaker 2:is
Speaker 6:like, okay, you know, they're really trying to nerf this thing, and it it's either an absolute rocket or a thing's gonna blow up. Like, there's no there's no in between to me with the the Mercedes at this point. But, know, half the grid runs the Mercedes. The Mercedes team runs it. McLaren runs it.
Speaker 6:Williams runs it. Alpine runs it. So like, you've got you you've you've got a lot of cars that are gonna have a rocket ship in it. Yeah. Of course, if you're Ferrari and you're Red Bull and and and anybody else Honda, you're gonna be nervous.
Speaker 6:I'm also curious to see how this Adrian Newey Aston Martin ends up with the Honda power unit. Like, it's a match made in heaven, Honda and Newey. You've got Alonso who's been wanting to drive there, a lot of experience, so you know that he's gonna put in a good drive if that car is halfway decent. I think I think that car is the one to watch out for, the Astin. I'm really excited to see the Astin.
Speaker 2:That's very cool.
Speaker 1:Do you think Lewis Hamilton is, locked in during the off season? We saw him at the Super Bowl. Yeah. Locked into
Speaker 9:Kim K.
Speaker 6:While he's keeping up with the Kardashians now. I mean Oh, yeah. Do you blame him though? Do you blame him?
Speaker 2:No. He's having fun. He's living his best life.
Speaker 10:Dude, you're 40
Speaker 2:years old. You're loaded
Speaker 9:like Hey.
Speaker 2:I mean, he's already been on reality TV with Drive to Survive. What's what's one more show?
Speaker 1:Yeah. We're both reality TV stars.
Speaker 2:Essentially. Essentially. Probably more people know him from Drive to Survive than actual f one.
Speaker 6:I don't blame him. And if that car is a dog, could see him checking out sooner rather than later.
Speaker 2:No. I'll real with you. Well, we appreciate you.
Speaker 1:Maybe the conspiracy is like f one is actually doing an, some type of influencer deal with the Kardashians.
Speaker 6:A Taylor Swift deal.
Speaker 1:It's kind of an arranged marriage. Like they saw the success of the Travis Kelce, Taylor Swift thing. They're like, we need a we need we need our own t swift.
Speaker 6:Would it shock you? Like, would that actually shock you if that was the case?
Speaker 2:That'd be great. That'd be great. Well, thank you so much for coming on the show.
Speaker 6:Nice. Thanks for having me.
Speaker 2:Always good to catch
Speaker 1:Great to get the update. We'll have you back on scene.
Speaker 6:Thanks a
Speaker 2:Have a good one. Cheers. Let me tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And without further ado, we have Ethan Ethan Thornton from Mock Industries.
Speaker 2:Long overdue. Welcome to the show. Thank you. Good to see you. Grab a seat there.
Speaker 2:Good to see to see First time in the show, long overdue. Please introduce yourself. Introduce the company
Speaker 3:for us.
Speaker 9:Yeah. I'm Ethan Thornton, Sternbach Industries. Happy to tell background on
Speaker 5:the company.
Speaker 2:Please. I mean, we met, what, two years ago or something, and you maybe just starting the company then, huge progress. But, yeah, give us the background.
Speaker 9:Yeah. For sure. So I actually started the company in high school. Ran like a woodworking metalworking company in high school. Was pretty obsessed with this turnover we're seeing towards unmanned systems and the importance that'll have on the world over the next few decades.
Speaker 9:Went to MIT. Initially thought this would take a lot longer to play out than it would, so I went to MIT. But around that time when Ukraine starts
Speaker 2:Yeah.
Speaker 9:It becomes clear that this transition is happening very, very quickly. Dropout, start mock, I guess, two and a half, three years ago now.
Speaker 2:Where were you studying at MIT? Aerospace engineering.
Speaker 9:I was there. I I I was playing football there. I
Speaker 2:No way.
Speaker 9:Dropped out during football preseason. That's crazy. So I can't can't say that I was I was there very long. Yeah. But I think I think the the mission of making sure the west winds on them
Speaker 1:Yeah.
Speaker 9:Systems is just so urgent.
Speaker 2:Was the Thiel fellowship part of the decision to leave or had you already left?
Speaker 9:I'd already left.
Speaker 2:Okay.
Speaker 9:Yeah. So that was the semester after I left.
Speaker 2:What was the answer to your question? The main the main what what's your contrarian take? What's something you believe that very that very few people agree with you on? That's the classic Thiel Fellow question.
Speaker 9:It's a it's a great question. Right? Oh, yeah. I don't I don't remember what I answered. Wow.
Speaker 9:I can say the thing the thing I was betting my life on at that point, and if I I had to guess what my answer was, I think it was the importance of drones. Yeah. Like, I singularly think that The US is not gonna be able to outmanufacture outmanufacture China on unmanned systems, and that the the way to win is through asymmetry. Yeah. And at the time, that was obviously a contrarian take, less so now.
Speaker 9:Mhmm. The world has started to move in that direction, but I still think very few
Speaker 1:people Yeah. That that sort of predated Americans have now seen how many different Chinese drone shows in the sky where they're like, look at the pretty lights and the colors. And then some people are like, woah.
Speaker 2:That's Imagine that coming at you. Scary. Talk to me about asymmetry. That sounds like not just going drone for drone. That seems like different capability.
Speaker 2:Unpack asymmetry. Why is
Speaker 9:that important? Yeah. It's a great question. I'd say that was that was probably the big big differentiator in the way we thought about the space. Yeah.
Speaker 9:If The US is manufacturing a a quadcopter and China's manufacturing the same quadcopter for making a cruise missile and they're making the same cruise missile Yeah. They will outmanufacture us. Yeah. Right? And so the optimization becomes instead, how do you take this future style of war fighting
Speaker 10:Mhmm.
Speaker 9:And pull it left as far as possible. And we we talk a lot about basically creating an offset to China's dominance in manufacturing, which doesn't mean we we don't focus on manufacturing. Like, first and foremost, we are a manufacturing company Mhmm. But that's not what it's gonna take to win. What America has to do very, very well is actually rely on unmanned systems to win, which, like like you mentioned, America's actually been relatively slow to adopt unmanned systems.
Speaker 9:A lot of the work we're doing is is pushing to change that as much as possible and getting getting the the institution to think about unmanned systems not as something that's scary, not as something that's that's looking to disrupt the way wars are currently fought, but instead is basically our biggest advantage if we look to maintain.
Speaker 2:What's the history of of these asymmetrical offsets? I'm trying to think of, like, the classic example. Like, can one f 35 take out five MiGs? And so you don't need to manufacture as many because you have a more advanced plane. So you throw 50 planes at me.
Speaker 2:If I have even 10 of my better planes, I'm good. What
Speaker 1:what historical A nuke? It's like, yeah, I don't care if you have 10,000 bombs, I have one that's a lot bigger.
Speaker 9:Yeah. It's a great point. Mean, a lot of the things that become the way wars are fought start as asymmetric. Sure. I mean, you go as far back as like the American Revolution.
Speaker 9:Yeah. Right? You've got
Speaker 1:like Yeah. Something's not going to remain asymmetric forever.
Speaker 9:Yeah. But over the next decade, two decades, pushing on this new style of war fighting as much as possible to achieve that asymmetry, which is something historically America's done very well. Yeah. Again, all the way back to the American Revolution. Yeah.
Speaker 9:Adopting tactics to to to counter force that at the time was obviously superior.
Speaker 2:Yeah. So so get me up to speed on how you're thinking about the current drone landscape even putting aside the asymmetrical thing. I mean, I've I've heard, like, you you you just buy a DJI drone, you fly to Ukraine, and you put a grenade on it, you fly it into somebody. There's these new drones that have, the fiber optic wires. So, you know, you don't no electrical interference.
Speaker 2:You don't need a signal. They can't jam it. There's a whole bunch of different things. There's the Shaheeds and, like, all these different tail sitters. There's 25 different types of drones.
Speaker 2:What's actually going on? What's actually making a difference? And then what are you interested in?
Speaker 9:Absolutely. So, yeah, it's obviously a super wide space. Where we focus most is on the pacing threat, which we see as China
Speaker 2:Okay.
Speaker 9:And basically fighting a war in INDOPACOM. Okay. And generally speaking, if you can do something in INDOPACOM, you can do it well in Ukraine
Speaker 4:Okay.
Speaker 9:Is the way I like to think about it. We don't play in the group one, group two space. Space.
Speaker 2:Mhmm.
Speaker 9:So the the quads and similar smaller drones.
Speaker 2:Describe group one and then
Speaker 9:Yeah. There's the formal definitions are are pretty murky. Like, I think, technically, Viper's a group five based on speed, group three based on weight. It it's basically it's an old, like, FAA style of assessing how much damage something does if it falls out of the sky. Okay.
Speaker 9:But generally thinking you can speak speak about a group one as, like, quadcopter all the way up to a group five being 30 foot long kind of fighter jet. Yeah. For us, where we play The
Speaker 2:the predator drone
Speaker 9:would be Exactly.
Speaker 2:Five. That's the biggest we have. Spot on. But it's like human manned in Las Vegas remotely or something
Speaker 1:like that.
Speaker 9:For landing and other things. Yeah. And so where where we play is generally group three, group four space.
Speaker 2:Okay. So pretty big. Pretty big. Okay.
Speaker 9:And our primary focus is again on on asymmetry as relates to Endo Paycom. Mhmm. So the pacing threat for America right now is China, specifically as it relates to Taiwanese semiconductor access. Yeah. Right?
Speaker 9:A world where we lose access to advanced semiconductors because China takes Taiwan
Speaker 2:Yep.
Speaker 9:Is is pretty crippling Totally. For the West.
Speaker 2:Yeah. Talk to me about the hypersonic missile gap. I I I had a friend who was very worried about that, saying that there's a lot of other things that are going well. I mean, we're advancing AI models. There's a lot of stuff that's happening on trade, but we're just not making hypersonic missiles.
Speaker 2:Is that something you've looked at or you have any sort of insight into the importance of?
Speaker 9:Yeah. I mean, we we spend a lot of time thinking about it. Ultimately, we we play in the subsonic regime.
Speaker 2:Yeah. You you focus on this.
Speaker 9:So that's that's where we focus. Castilian and
Speaker 5:a lot
Speaker 9:of the other folks are pushing hard on hypersonics. Okay. My personal belief, and this is, again, sort of a contrarian take, I think future war fighting has to be so decentralized that most of the assets used to fight wars are actually not large enough to consider taking out with a hypersonic missile. So like a big focus for our product line is having things that two operators can deploy. So you look at Viper, you look at Stratus, these are things you and I could actually put up in the field ourselves Yep.
Speaker 9:Mhmm. Such that by the time you launch it, there's actually nothing to shoot back against. Yep. Right. I think that is very much the direction war fighting's heading.
Speaker 9:Yep. That's what we see in Ukraine
Speaker 2:is So less less exquisite systems, less capital assets. Like, you sunk my battleship becomes less important because there aren't as many battleships on the Exactly. On them.
Speaker 9:And so I think hypersonics are are excellent at taking out existing Yep. Large centralized assets. Yep.
Speaker 2:But as soon as both sides have them, there's just no more large assets on the battlefield. Exactly. Because everyone knows, well, I'm not even gonna try.
Speaker 9:Yep. And that's that's a contrarian take, and I'm not saying we're gonna get there in five years. Yeah. But as you as you look as far into the future as you can, and a lot of what we see in Ukraine right now is this giant push towards decentralization. Yeah.
Speaker 9:How do you get everything off a runway? How do you get everything off of centralized command and control infrastructure? Like, how do you push to decentralization? Because the the future force structure looks a lot more like a it's kind of a buzzword y term, but like almost like a kill web Mhmm. Of hundreds of different systems Mhmm.
Speaker 9:Each doing some element of sensing, communications, and shooting Yeah. Such that your force is kind of fighting from everywhere and nowhere.
Speaker 2:Yeah. What is your, like, pea doom on Taiwan or or or timeline? I mean, there was that book, Twenty Thirty Five, I think, that was sort of talking about that timeline. At the same time, you have China's thinking in hundred year plans. Xi Jinping thinks he's gonna live to a hundred and fifty.
Speaker 2:Maybe he's not in any hurry. Last year was pretty quiet. I mean, was a lot of trade negotiations, but we didn't see a blockade. We didn't see really many major military movements. And so from my perspective, it feels like maybe I just wishful thinking, but it feels like things are sort of business as usual over there.
Speaker 9:Yeah. It's it's a good question. Look, it's it's really hard to
Speaker 2:know. Mhmm.
Speaker 9:I mean Yeah. The CCP obviously outlined their plan for military readiness by 2027.
Speaker 1:Mhmm.
Speaker 9:And y'all can find public public testament to to Hegzeth and others talking about sort of the state of our war games right now in that theater being quite dire.
Speaker 4:Mhmm.
Speaker 9:So, look, I I can't say Mhmm. When or or if something happens, but But
Speaker 2:we need to be prepared.
Speaker 9:We need to be prepared. I think we obviously started this year with a lot of Chinese aggression Yeah. Around Taiwan.
Speaker 2:Okay.
Speaker 9:And in January, they ran a pretty big set of set of drills. Mhmm. And then yeah. Look, I mean, it's just it's so catastrophic if if Taiwan falls
Speaker 2:Yeah.
Speaker 9:For for the West, like
Speaker 1:What have you learned from history about in Indo Pacific theater? It's been a while for The United States, but there's
Speaker 2:Since Korea.
Speaker 1:You know, infinite amount of kind of content on on what techniques works, what are the unique challenges. It's obviously very different fighting over, you know, huge bodies of water and that kind of thing versus Ukraine.
Speaker 2:Yeah. There's a lot of predictions about, like, if they're if they do try and cross the straight, they'll do it at certain months because the the the tide's low or the waves are not as choppy. What yeah. What are you thinking about history?
Speaker 9:I think it's super hard to extrapolate out the Yeah. The course of this conflict from history. Like, we have not fought a war in The Pacific since it it scales since the area era of precision munitions. Mhmm. I think certain things will will continue to be true.
Speaker 9:Like, it will overwhelmingly be a logistics battle.
Speaker 2:Yeah.
Speaker 9:And I think the the biggest problem we face right now, speaking on hypersonics, is how do you get your ships close enough Yeah. To actually get into the fight is the big problem right now. Like, how do you how do you secure runway access? How do you get your ships close enough?
Speaker 2:Yeah.
Speaker 9:And so it becomes a massive logistics battle, and that's that's why you'll see us focusing on these decentralized assets that are significantly easier to get into theater or that you can launch from far enough away to actually reach the fight. So I think it comes down to logistics. I think getting secure comms that far forward, and then more importantly, getting proliferated ISR that far forward is gonna be an incredibly difficult challenge. Mhmm. The US conducted an operation last year called Rough Rider in Sintcom, and it it we lost something crazy like 30 mqs, like 30 preds and reapers.
Speaker 9:And that was not against as nearly as sophisticated of of an adversary and certainly not over that distance. And so I think one of the key gaps, how do you get enough sensors forward? How do you secure communications? I think rightfully so in in in many cases, The US pushes to have man in the loop for autonomous systems. But what that means, you have to have really secure comms in order to do that.
Speaker 9:And we're facing adversaries that may not look to do that themselves, and so that becomes a a pretty pretty strategic vulnerability. And then right now, I mean, you can count on any conflict being a conflict of numbers. And in WarGames, we run out of ammo in literally a couple days.
Speaker 2:Mhmm.
Speaker 9:Right? And so that's why you'll see across industry just this massive push to manufacture as many assets as possible Mhmm. While also making sure that those assets are as as Effective. Effective and asymmetric as possible.
Speaker 2:Because we're
Speaker 9:just not going to catch up. I mean, China makes a lot of claims. This claim is probably not totally accurate, but they have claims that they have factories making a thousand cruise missiles a day. And you can go online and actually, like, watch videos of these factories. Now, that might be a 100 a day, that might be 50 a day.
Speaker 9:Regardless, you're talking about orders of magnitude more production than The US has right now, which is serves as a wake up call. It's why why I dropped out of MIT. Yeah. It's it's why I think a lot of us in this space are pushing this hard. And then a world where you lose access to advanced semiconductors is is existential.
Speaker 9:I mean, our entire our entire backbone as a country is built on this sector. As you look at future of of of conflict, like our future of of unmanned systems, the reason you build unmanned systems and not an f 35 is advances in computation. And so if you find yourself in this arms race where the most important thing is unmanned systems primarily bottlenecked by intelligence
Speaker 10:Yeah.
Speaker 9:And you lose access to the semiconductors you need to power these things Yeah. It's pretty terrifying.
Speaker 1:Where are you yes. Sorry to interrupt. Where are you guys partnering? Are there other are there are there primes that you're working with at all? Anything on the obviously, there's Battlefield Systems that you need to integrate with.
Speaker 1:What are you doing? What are you manufacturing are in house? Like, what is kind of the web of Yeah. Companies and and groups that you're actually connected into?
Speaker 9:That's an awesome question. And and before I start, like, I I need to emphasize the importance of working well together as as a group of companies in the space. Primes, neoprimes, startups. Like, when you're facing this level of difficulty at a geopolitical level, you have to you have to view it as as a non zero sum game and you have to be willing to
Speaker 1:Yeah. Have you learned any any stories from history on that front? Like, back like, I imagine in if you're actually fighting in a hot war, I imagine people the whole industry and the whole country is banded together and saying, like, we're not competing here. We're we're fighting for our values as country and and our way of life and all these things. So I imagine it very easily in a in a hot war clicks into that mode.
Speaker 1:But in sort of relative peace time or preparation, they're still like, oh, this this NeoPrime just launched this thing. They're trying to kill this other neo prime. And it's like, alright, we're kind of focused on, yes, you know, fighting for market share is important, but at the same time, the entire purpose of the defense industry is to defend the country and of which we are all citizens of.
Speaker 9:Absolutely. Look. I I mean, unfortunately, in a modern day, I think a hot war would end relatively quickly. Like, you're you're talking about a very decisive outcome. When you think about cyber effects and how quickly infrastructure in both countries would shut down, When you think about the ability to do long range precision fires, how quickly capital assets would be taken out.
Speaker 1:And so Ukraine is Ukraine is, like, not a good example because it's it's effectively turned into trench
Speaker 2:Yeah.
Speaker 1:We don't have warfare. But it's a it's a battle for, like, territory, whereas in a conflict with China, it's more over a specific, you know, region being Exactly.
Speaker 9:And the style of the style of warfare that the Soviets wage versus that the West wages and that China's looking to basically base their fighting style on the West on are quite different. Like, they always have been. Like, the the the the Russian and because that largely the Ukrainian way of war fighting is this sort of just mass effects war of attrition.
Speaker 4:Mhmm.
Speaker 9:What you see The US doing and what China specifically architected their force structure to to also execute is these pulse strikes that are very, very, very quickly damaging. And so my my fear is in World War two, one, we had years of ramp up where industry could start to rearm Lindelys, all these different things that got us into the fight before Pearl Harbor started. Even after that, however, you still had years where GM and Ford could switch over to defense production and where you could get this sort of mass rallying of cultural effects towards fighting this war.
Speaker 1:Yeah.
Speaker 9:That is not happening today to the extent it should, and I think we have way too much confidence about this war not just happening in weeks. Like, very, very likely outcome is you're not you're not ready to fight a war until you you you cede territory. Right? And so the the way I see it, that that effect you're describing has to start like today. Need to start acting like we're purely on the same team.
Speaker 9:Mhmm. And then for for Mox's approach specifically, a few things we do. One, our approach is quite different to a lot of the other neoprimes. So you'll see a lot of folks starting with Battlefield management layer and kind of working down
Speaker 2:Mhmm.
Speaker 9:Which is a great way of doing things. You you need to have a fit like, efficient orchestration.
Speaker 1:We're Everybody everybody wants to be the platform. Yeah.
Speaker 9:Yes. From a business perspective.
Speaker 10:Yeah. From a business
Speaker 1:If you're business if you're pitching investors, you don't want to say, oh, we're a point solution. We just do, you know, offer Yeah. Even though that might be the best way to actually get in get into the game and become a business. Yeah.
Speaker 9:And and I'm I'm happy to dig in there. I I think I think the the business tactics there are actually potentially more complex, and I would I'd argue that point, but I actually don't think it's super important. I think the the big thing is we we need different people doing different approaches. The way I think about it, the defense industrial base has rotted out so bad. I mean, you think about the incentive structures for the last three decades.
Speaker 9:If you're Lockheed and I'm your supplier and you're out in cost plus, you're incentivized to have me charge you more Yeah. Per component. And then if you're my tier two supplier
Speaker 2:Yeah.
Speaker 9:I'm I'm incentivized to have you charge me more. And so for the last three decades, 10 levels down the stack across the industry, you've just seen it rot out. And so what that means is typically, like, tech that you'll get for, like, $50 in consumer electronics, you'll literally be charged tens of thousands for. Yeah. Like, AirPods cost Apple like 6 to $10 to make roughly.
Speaker 9:Wow. If that's a defense product, if you're dealing with like three different radios, all these different IMUs, you're literally Yeah. Of thousands
Speaker 1:of dollars.
Speaker 2:$20. Something about like a it was like a faucet or sink on a on a battleship that cost like $200,000.
Speaker 9:And so and and you look at the incentives, and it's very obvious how we got here. And so the the work I'm looking to do as a company is I think that the rate limiting factor on how much you can produce, and and frankly, where most of the money from the budget goes Mhmm. Is into hardware. And the performance of that hardware is gated on the performance and cost of its subsystems. Yeah.
Speaker 9:And so we're taking a very different approach of actually working bottom up in the stack. Most of our revenue, for the record, still comes from selling platforms. We've taken a very deeply vertically integrated approach, and then one of the ways we look to partner is actually by selling those components to other companies
Speaker 1:Oh, interesting.
Speaker 9:And looking to be a good partner by basically establishing this industrial base and hopefully enabling people to sell products cheaper and more performant than they So could that's that's sort of our approach. And then even within that, like, we try to be selective about the things we bite off. Like, electronics and automotive still run pretty efficiently.
Speaker 2:Mhmm.
Speaker 9:And so if you can if you can architect your designs to use hardware from those two industries as much as possible and to avoid hardware from the defense industry.
Speaker 2:This is COTS versus GOTS. Right? Exactly. Off the shelf versus government off the shelf.
Speaker 3:That's right.
Speaker 9:But in any case, there there needs I mean, this this industrial base needs to be rebuilt, and that does start with your jet engines. That does start with your radar. That does start with your cameras.
Speaker 2:How are you thinking about moving quickly, solving problems in workplace safety? There was that incident that happened that was reported. And I'm just wondering about, like, that trade off has gotta be difficult when you have a bunch of people that wanna work on a really important product, but these are big machines. There's risk factors. Like, what does security and workplace safety look like?
Speaker 9:That's a great question. So I think I think there are misconceptions about that accident. I've talked a good bit publicly about it, but that was actually before we were mock.
Speaker 2:Oh, okay.
Speaker 9:So that was before we had any employees Sure. Super, super early. Got it. And and again, I've I've talked a good bit publicly about that. I'd say today, I don't know, there's this move fast and break things actually doesn't work very well.
Speaker 9:I can imagine. Be like, you imagine testing a Viper. Yeah. Like, you're basically putting a Ferrari on like a slingshot and launching it into the air. Yeah.
Speaker 9:You don't want to be doing that every day, like, haphazardly randomly.
Speaker 4:Yeah.
Speaker 9:So early on, what we did, like, literally when we raised our our a Yeah. Was invest very deeply in SITL, invest very deeply in HITL, invest very, very deeply in What are those? What are those? Sorry. It's like hardware in the loop testing.
Speaker 9:Okay. Got it. A simulation environment.
Speaker 10:Sure. Sure.
Speaker 9:Sure. How do you go and run thousands of cases of what a vehicle will look like in flight, and then actually run that on representative hardware, and then run that on the vehicle, and then build into a test campaign? And we have five products now, and the the first flight of all five of those, reached wings level steady fight flight on the first try.
Speaker 1:Got it. And so I
Speaker 9:I think there's this misconception that the way you move fast
Speaker 4:Just get
Speaker 1:a test range and just start putting slapping stuff together. Which is
Speaker 9:not yeah.
Speaker 1:Actually not the
Speaker 9:way it works. And I think one of the reasons we've we've actually been quite successful at developing these things so insanely quickly. Yeah. I mean, I just I kinda soft release a product that we we went from nothing to flying in seventy one days on a pretty large aircraft.
Speaker 1:Wow.
Speaker 9:And the way you do that is by building excellent excellent test infrastructure, excellent engineering process.
Speaker 1:How do you how do you actually build the simulations? Is it are you using can you use like Microsoft Flight Simulator to to create like a physics engine?
Speaker 2:That's a
Speaker 1:good question. Or or are you building everything from the ground up?
Speaker 2:Unreal? Yeah.
Speaker 9:We we actually do use Unreal Unreal. Okay. A little bit on on computer vision. Mhmm. So for GPS and non navigation, you're using your cameras to navigate.
Speaker 9:You obviously need to be able to spoof some of that imagery. That's cool. Our there are a bunch of different approaches. So we we have a an arrow tool we built in house Sure. To basically run across hundreds of different aerodynamic designs and select your plan form as you design out your outer mold line.
Speaker 9:Different tool chain basically allows you to do RF simulation. A a lot of this stuff is industry standard for the record. Like, I'm not saying we we we invented much of this stuff. I do think we're we're pretty good at it, but RF simulation to understand antenna patterns to understand all that different stuff. We we actually have four different radars in design right now as a company, so we have a really good RF team.
Speaker 9:Wow. You work from there into basically your sixth degree of freedom physics simulator. We found an open source. It's called JSPSIM if anyone wants to go and use it. Mhmm.
Speaker 9:We forked a couple years back and have been doing a lot of work to basically make more robust. That's really cool. Like, you can actually simulate, like, specific actuators breaking. You can simulate wind gust across like thousands of cases. Yeah.
Speaker 9:And then from there, you then plug that into your avionics and actually spoof your avionics to think they're flying.
Speaker 2:Yeah.
Speaker 9:And so we make our own avionics and you obviously can't run hundreds of thousands of cases. Like, the the JSP sim will be running on on basically a cloud instance so that you can crank out a ton of compute, and then you confirm that your actual avionics hardware is performing the way it should.
Speaker 2:Very cool.
Speaker 1:What advice would you give to the younger version of yourself that's dropping out of MIT and gonna attract hundreds of millions of dollars of capital?
Speaker 9:It's a good question. I think I think the importance of people. Like, all all you have at the end of the day is your team. Mhmm. And like, as an individual, the amount of work you can get done is is tiny compared to what what can happen if you get a really, really good group of of earnest mission aligned people together to go work incredibly hard.
Speaker 9:And so And did you
Speaker 1:learn that the hard way by hiring somebody that was maybe, like, leading expert for a specific technology but weren't perfectly mission aligned or came from kind of an old way of doing things? And and then, when, you know, the going gets tough on kind of an individual product level or something like that and, you know, it starts to unwind? How how Yeah. What was
Speaker 9:the I wouldn't say we necessarily learned it the hard way. I just think it it's it's very spoken about and I I don't know. I I'd assume that saying that was more buzzword y. Yeah. Yeah.
Speaker 9:Yeah. Yeah. But but I actually, like, I I I really I don't think we've
Speaker 1:But heard about that's a classic across all startups. Don't I don't even have context. I'm just saying all startups will hire somebody who, like, is the expert in one Yeah. Specific thing, and then you put them into a new context and it just doesn't work. I've I've done it before.
Speaker 1:I think every founder has.
Speaker 9:I I actually don't I don't think we've necessarily done that. I think I actually was so afraid of that. I'm a spun the
Speaker 2:other way. Interesting.
Speaker 9:And we had, like, too many really, really intelligent, really young hungry people. They're they're still at the company and
Speaker 2:they're some Yeah.
Speaker 9:Yeah. Like some of the best people we have. But I actually think I was almost too slow
Speaker 2:to bring
Speaker 9:that on. I don't know if that was good or bad
Speaker 2:Yeah.
Speaker 9:But I I I was pretty terrified because it's because of all the horror stories surrounding stuff like that Yeah. Of doing that too early.
Speaker 1:Yeah. Yeah. That's interesting. Well, it's good to hear the team's What what what is what is winning look like for mock this year? Yeah.
Speaker 1:This What's what's the focus? What how do you end this year? Got eleven months left. What is Mhmm. Coming out of this year?
Speaker 1:Yeah. What what's gonna allow you to take like, you know, one one or two days off around Christmas and feel good about it?
Speaker 9:Look, it's it's proving proving effect on the battlefield Mhmm. And getting into manufacturing Mhmm. At scale. Mhmm. Like, I I think we've done a great job as a company winning contracts and bringing products into a state that we can demonstrate them to customers and that we can make tens or hundreds of a thing.
Speaker 9:But the the really, really hard work starts the day you try to build a 100,000 of something, the day you actually have something go downrange. Yeah. And so for us, it's basically taking these designs that are in a good spot, taking the team that's in a really good spot, scaling that team up a ton this year to actually enter rate manufacturing, and then taking our conviction around the impact our products will have on the battlefield and actually going and proving it for the for the warfighter.
Speaker 2:That's awesome. Well, thank you so much for coming on the show. Of course. Ethan from Mock Industries.
Speaker 1:Talk soon.
Speaker 2:Let me tell you about Gusto, the unified platform built for payroll benefits and HR, built to evolve with modern small and medium sized businesses. Go check
Speaker 1:it out. Like ours.
Speaker 2:And we have the CEO of crypto.com, the CEO of ai.com. I'm gonna tell you about Gemini three Pro, Google's most intelligent model yet, state of the art reasoning, next level of vibe coding, and deep multimodal understanding. And we are going to bring in Chris from crypto.com. He's in the restroom waiting room and now he's in the TBP on Ultradome. Chris, good to meet you.
Speaker 1:What's happening?
Speaker 4:Nice to meet you guys. How are you?
Speaker 2:Thanks, I love the background. The the logo is looking great.
Speaker 1:Is that real or is that AI?
Speaker 4:It's totally made up.
Speaker 1:Well I was like, it feels feels pretty quick to have, you know, the actual
Speaker 2:Yeah. Design. Manufacturing. It takes time. Well, take us through the thesis for
Speaker 1:ai.com. Wait. Before we yeah. Before we get into the Super Bowl, like, let's maybe rewind to maybe probably a year ago.
Speaker 2:Please.
Speaker 1:You see a domain on the market. I think they had been trying to sell it for a while, I imagine. And you came in as a buyer. But walk us through that whole journey.
Speaker 4:Yeah. I bought another domain, and the agent who was brokering this told me about ai.com being, you know, in a process of being sold, if you will. Mhmm. So I immediately recognized the importance of it and just jumped on it. Got on the phone the same day, got the deal done, we shook hands.
Speaker 4:There were some ups and downs through through the through the process, but we managed to get this done.
Speaker 1:You've had some good success buying buying iconic domains. What did you pay for crypto.com? Have you ever disclosed that?
Speaker 4:I don't think we ever did, but we paid $12,000,000.
Speaker 1:Oh, wow.
Speaker 4:I argue that that was a more difficult decision, if you will. We were a small company back then. Mhmm. $12,000,000 was about a third of our capital. And it was bang in the middle of the 2018 bear market.
Speaker 4:So people were discussing whether crypto is gonna survive or not.
Speaker 1:Yeah. The person selling it to you was like probably like this guy
Speaker 2:is I'm so glad
Speaker 1:to be washing my hands yesterday. Of course of course, you ended up ended up looking
Speaker 2:was in the Staples Center. I drive by it all the time.
Speaker 1:Okay. So, yeah. You you see this domain is on the market. Do you have any idea what you wanted to do with it at the time of acquisition or did you just think that, hey, this AI thing is probably pretty important. Maybe I should own ai.com.
Speaker 4:Look, we we're building products ever since Judd GPT launched and playing with consumer facing side, but also internal tools. So So constant experimentation. And the vision from day one was, you know, we want to build a consumer product. We believe that you have 4,000,000,000 people having personal assistants that should play the role of kind of a chief of staff for your entire life with great context, being proactive, getting things done for you rather than just chatting. So the vision didn't change from day one.
Speaker 1:And then, yeah, I guess, fast forward, how did you how did you process before we get into the kind of Super Bowl and that whole strategy, how did you how did you process kind of the OpenClaw launch? It sounds like you guys are integrating the are are you building Some
Speaker 2:of those patterns, at least.
Speaker 1:Yeah. At least some of those patterns. Are you kind of forking the project? Talk about that.
Speaker 4:So as we started building this product about mid-twenty twenty five, it was never just it just didn't click. It didn't have this you couldn't pass the uncanny valley. And I think the pivotal moments where we started seeing this change is OPUS 4.5 release. It started working much, much better. And we obviously saw Cloudbot going live and adding some elements of their architecture to it.
Speaker 4:I think it gets it done in terms of how it feels as a product. You just need to solve a whole litany of issues to make it consumer friendly, like how do you set it up without being technical, you know, the security issues around your data. Those are serious, serious issues when you want to bring something to the mass market. So I think we've we're combining everything that we've built over the last, say, eight months into something that we can roll out to the end users, and we are starting doing this tomorrow.
Speaker 1:Wow. Tomorrow. Okay. Before we get into the product and kind of more of the vision, let's fast forward again to the Super Bowl specifically. How did that how did that all come together?
Speaker 1:It it felt like it was coming together quickly, but we know we ran a much, much smaller ad. We ran a regional ad. You do have to lock these things in ahead of time. But walk us through the process of kind of preparing and then experiencing the the Super Bowl Sunday.
Speaker 4:So I bought the domain in April. Mhmm. The deal closed, and we got the domain successfully. So I'm like, okay. We need to launch this, and it deserves global stage.
Speaker 4:And in May, we were one of the first companies to actually buy this bot.
Speaker 2:Oh, no way. Wow.
Speaker 4:At that at that time, we had just the domain and idea what we want to do with it, but the product didn't exist.
Speaker 2:Mhmm.
Speaker 4:And, you know, I know that we only have one shot to get this done correctly, and I didn't want to release the product until I felt that it's there for the end user. You know, these things you need to be able to develop an emotional connection with the product in order for this to be sticky and retentive. So I only made a decision that we're actually gonna pull the trigger on this a couple of weeks ago. And that's why the ad felt like it was, you know, quickly put together. Was quickly put together.
Speaker 1:Wait. So bought so you bought the Super Bowl spot.
Speaker 2:You could fall on to crypto.com if you wanted to?
Speaker 1:Yeah. What was the idea? Like, hey. If if we don't run it for ai.com, we have the crypto.com ad ready. We'll just run that?
Speaker 4:We have the crypto business. We have a prediction markets business. You know, we could do there's always some level of optionality. Right? But this is the moment to run an AI ad, as you guys have seen.
Speaker 2:Yeah. It is.
Speaker 4:And and and timing is really important in life. You know, scale, timing and lag, combination of these things.
Speaker 2:It's a good reference.
Speaker 1:Okay. So you put the ad together in effectively two weeks. Okay. Then you run it, and what happens then? Because I think you got you got the the attention from buying the world's most expensive domain ever, then you got the attention of like, hey, there's this new AI product I've never heard of with a crazy domain running a Super Bowl ad, you should pay attention to it.
Speaker 1:And then you got a whole another kind of amount of of attention from people being like, wait, just got an ad for ai.com and I landed on the website and it's not and and the website's down. So what what what what kind of happened? Did you you you spent the the 70,000,000 on the domain, the 8,000,000 on on the spot, and then you didn't have enough for to host it? Or what what happened? I'm assuming a lot of people got through, but certainly a lot of people got got stuck as well.
Speaker 4:Yeah. I think we are happy with the outcome. Okay. We had about 300,000 people signing up.
Speaker 1:Wow. Wow. Let's go. That's a lot. Yeah.
Speaker 1:Can we get the Gong? Can we get the Gong sign
Speaker 2:ups? Yeah. There's been a lot of big numbers.
Speaker 1:That's a big number for a one day for a one day. But on on a on a more serious note, how did you how do you even prepare for that that amount of traffic? Like, how do you how do you what was going on in the war room?
Speaker 4:As you know, we've we were on a platform that is used to spikes. Right? We've got a great DevOps team. And we forgot all the stuff that you usually would expect, auto scaling and whatnot. So there were intermittent problems for some people, but largely it held up.
Speaker 4:Here we go through. So I I think fundamentally, it's the name and the fact that there is a certain amount of curiosity there and we designed it in a it it was a very simple call to action. Yeah. Go and and sign up. Yeah.
Speaker 4:So I think it worked.
Speaker 2:Yeah. Talk to me about consumer AI. ChatGPT has broken through Gemini and Google. They've been leveraging, you know, the Google platform and the network to onboard consumers. Nano Banana was a big moment.
Speaker 2:Sora and the Meta Vibes app sort of made a splash but haven't been super sticky. But where do you see the gap in breaking through with consumers in a new way or just doing what consumers already expect, but better, cheaper, faster? Like where is the consumer AI opportunity now that we're three years into the ChetGPT boom?
Speaker 4:I think fundamentally, you're able to actually get stuff done right now. So that's a big differentiating factor for the user experience. And we don't really know where this experiment is gonna take us take us Mhmm. Given the how the domain is is resonating with people. You know, we can introduce social network elements to it.
Speaker 4:I think the fact that every single person on Earth is gonna have an assistant of this sort
Speaker 1:Yeah.
Speaker 4:Can unlock new type of interactions and make and our lives just better through serendipity, advice, staying on top of things, being proactive, really understanding us. So it's I'm pretty excited about the wandering aspect of it. We try to keep an open mind and not really be set on the one thing. Mhmm. We will we now have 300,000 people waiting for us to give them the product.
Speaker 4:Mhmm. We're gonna very quickly iterate on it. A huge believer in moving quickly and and listening to your actual customers, and we will see where the journey takes us. I take a very long term view. Mhmm.
Speaker 4:You know, what can we do with this in ten years? It's I I think it worked in the crypto space and
Speaker 2:Yeah.
Speaker 4:The opportunity here, the size is much, much bigger.
Speaker 2:Yeah. So much of what happened in crypto was sort of permissionless, you know, bankless, this open source, these networks. Anyone can set up a node. And part of this latest OpenClaw, ClaudeBot, you know, hype cycle is driven by the fact you like, you get a Mac mini, it can talk to iMessage. It can talk to WhatsApp.
Speaker 2:It can talk to Telegram. It can go sort of wherever you go as a person. And that feels unique because maybe OpenAI can't go over to WhatsApp because Mark Zuckerberg doesn't wanna let him. And so I'm wondering about how you're thinking about the trade off between certain things that are only possible with an open source AI system that is sort of acting as an impostor as a human versus you're a company. If you wanna integrate with WhatsApp, you might have to give Meta a call.
Speaker 2:So how do you think about delivering the vision of, like, a truly universal AI agent that can do things with the realities of the business community.
Speaker 4:Yeah. There are a lot of business and UX challenges here. Yeah. So we'll have to resolve them one by one. Sure.
Speaker 4:And our view is we want to stand on the side of the consumer and help them make these technical choices, make sure that their data is safe, make sure that they can do what they want to do without putting themselves at risk and solving these issues with access to data, with with user experience. It it cannot feel like a chore. Mhmm. And today, you need to be really technical to get value out of it. Mhmm.
Speaker 4:So there's plenty of work and it's difficult and that's part of the opportunity.
Speaker 1:Yeah. One of some unrequested feedback for me, I had kind of heard that a i.com was like potentially something like some type of relate you know, leveraging some OpenClaw technology Mhmm. And then I got hit with the Google login. And I was like, I don't have time to read through kind of the the full terms of service Yeah. Privacy policy and really understand.
Speaker 1:So I would love to see I mean, maybe there's plans for it, but I'd love to see just like being able to create account an account on the platform Totally. To play around with it just because I was looking at my Gmail, which my life is on, my work email, which obviously, you know, has its own privacy concerns, all that stuff. What you're you said you're rolling out the product tomorrow. What's the first thing that you want people to do with it?
Speaker 2:Mhmm.
Speaker 4:I think this is the big part of the product, figuring out how do you onboard people to it and get them to do a couple of things so that they can see value very quickly and connect with it. I think I think today, it's pretty hard to to get the feeling for what it can do without really connecting your email in Canada.
Speaker 1:Yeah. Yeah.
Speaker 4:But we will see. I I feel that there's gonna be a lot of experimentation there, and we will look for user feedback and and truth in data in numbers of what really works and what doesn't. To a certain degree, you need to gamify it until such point where where users are deep enough that it actually gives them the feeling of like, this is special. This is different.
Speaker 2:Yeah. Yeah. That gamification is so important. Like you see the Studio Ghibli moment where, you know, the latest images in ChatGP launches, and you don't even have to think. You just have something in your camera roll, and you're gonna type Studio Ghibli, and you're gonna get the value prop.
Speaker 2:And then a couple months later, you're still gonna be going there for slide inspiration and stock photography and all the other things that you can do. But there's a killer app on day one that you come in and you and you get joy out of.
Speaker 1:Did you ever talk to the original owner of ai.com? I've I've heard he sat on it for thirty years. Thirty years. His first and last name his first name starts with a, last name starts with I, so he had bought the domain. Wow.
Speaker 1:I'm shocked that he held on to it for so long. You would think, like, IBM Watson IBM Watson in, like, 2010.
Speaker 2:Oh, totally.
Speaker 1:We'll give you a million Yeah. Yeah. For you. But
Speaker 2:He held on.
Speaker 4:Look, we spoke on the day when we closed the transaction because he had a it was a little bit of a bidding war. He had a very serious bidder on the other side, and it required connecting in order to get it done.
Speaker 2:Mhmm. That's good.
Speaker 1:Your deals And
Speaker 4:by the way and and by the way, right after we closed the deal, I got the approach for the from the other side offering $5,500,000,000 plus, not for 500,000,000 for the domain. I think I could have pushed it to a billion if I wanted to, but I didn't want to. So I think you guys need to you guys need to understand I am pot committed. I love it.
Speaker 2:I love love love I
Speaker 1:love I love that you're just thinking you're you're viewing this, like, obviously, you're taking it very seriously Yeah. But you're also taking the approach of, like, it's very early days
Speaker 2:Yeah.
Speaker 1:In, you know, what will be a long journey for for the project Yeah. But also the industry and you're just gonna, you know, listen to your users and figure it out. But the conviction to turn down what would have been turning 70,000,000 into 500 or or a billion in in twenty four hours is is admirable.
Speaker 2:Will you train a foundation model?
Speaker 4:I think I'm more focused on getting this to scale and getting the data flywheel going so that we can deliver for our users. Our users don't really care about which model runs in the background as long as the job gets done and their data is safe. But once you get to a certain scale, who knows?
Speaker 2:Anything's on the table. I like it.
Speaker 1:Well, I'm sure you'll be back on. That's very exciting. I'm excited to see this roll out and roll out.
Speaker 2:I'm signing up tomorrow. I might be using a dummy Google account, but I will be signing up and testing this out. I'm excited. And then I'll slowly forward myself data from my real account to give you a little bit more a little bit more to see what it can do. But I'm excited for for for for the launch tomorrow.
Speaker 2:And congratulations. I mean, a fantastic career, but also this particular project, really, really fun execution and a wonderful story. So thank you for coming to join
Speaker 1:You you're basically the mayor of of Los Angeles Yeah. Through the through the crypto.com arena. Do you do you come through much?
Speaker 2:You're a Lakers guy?
Speaker 4:I've been in DC last week, and then I stopped over in Silicon Valley. I have never been to the arena.
Speaker 6:Never been to the arena.
Speaker 2:You gotta come sometime. Catch a game.
Speaker 4:Maybe we should catch a game.
Speaker 2:Yeah. They also do monster truck rallies there. Underrated crypto.com arena experience, especially if you have kids.
Speaker 1:He's a big monster truck guy.
Speaker 2:I'm big monster truck guy. I don't really follow basketball that much, but I will be watching Grave Digger live on the crypto.com arena. Anyway, thank you so much. Chris. It's to be here.
Speaker 1:Congrats on the launch.
Speaker 2:Have a great rest of your day. Soon. We'll talk to you soon. Let me tell you about MongoDB. Choose a database build for flexibility and scale with best in class embedding models and re rankers.
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Speaker 11:That is
Speaker 1:insane. Buys a domain, immediately could net a $430,000,000 profit same day, decides says no. Diamond hands. Diamond hands. Diamond hands.
Speaker 1:Hasn't been to his arena.
Speaker 5:Hasn't been to his arena.
Speaker 1:He's like, I've heard of it. Yeah. What a what a wild what a wild story.
Speaker 2:Amazing. Here's another wild story. Alphabet is selling one hundred year debt. You can buy a bond from old Google. Sundar's paying you in 2126.
Speaker 2:You'll be getting a payment from Sundar. They did a big bond sale. They're gearing up to sell bonds that won't come due for a century. You don't get your money back for a full century.
Speaker 1:Someone who is Google a thousand dollars.
Speaker 2:They're gonna pay you a little dollar every once in while, and then
Speaker 1:you get a
Speaker 2:full thousand dollars back in 2126. Sorry.
Speaker 1:I don't know if this is fake news, but somebody was saying that out of the Dow of 30 Mhmm. In, like, 1930 Mhmm. Like, none of those companies are publicly
Speaker 2:listed anymore. Thinking in centuries, potentially underrated. So it comes as the second big tech company to tap the bond market this year after Oracle issued $25,000,000,000 in debt last week. Could the Google parent plans to sell debt in dollars, British pounds, and Swiss francs with varying maturities according to an investor familiar with the matter? That will include debt with maturities of three to one hundred years for the sterling debt and of three to one hundred to twenty five years for the Swiss francs.
Speaker 2:The dollar bonds will total up to 20,000,000,000, up from the initial 15,000,000,000, the investor said. And I was listening to Ben Thompson talk about, for a long time, if you were worried about the AI bubble, the easy counter was, hey, it's just all this build out stuff, it's just being funded with cash flow from these super profitable companies that have been around for decades. Like worst case, they take a bath on some cash flow. It's like what happened with Meta and Reality Labs. Like like, Mark Zuckerberg drew down a ton of the free cash flow from Meta's incredible advertising business, launched some VR headsets, didn't really get crazy traction, went back to printing free cash flow.
Speaker 2:Right? It was no problem. Of course, he had to restructure the business a little bit, but the the stock rebounded. All investors were like, okay. You know, that that was sort of a fever dream.
Speaker 2:We're moving on. Well, now the hyperscalers as a class are all going all in on AI and spending all of their free cash flow on AI, and that's where people start to get a little bit more worried. I'm sure we will be hearing more about the potential fears of an AI bubble. Also, I mean, people are broadly very excited about this. Like, believe that this $25,000,000,000 debt offering was massively oversubscribed.
Speaker 2:People are excited about you know, buying these alphabet bonds. It's such a robust business. It's been around for a very long time. And so people are are gearing up to ride with Google into Singularity.
Speaker 1:The Dow ekes out third straight record.
Speaker 2:Let's go. Let's go. Gong for that?
Speaker 1:Gong for that.
Speaker 5:Gong for
Speaker 2:the third straight. I'm getting
Speaker 1:started with the Third straight record close.
Speaker 2:Automate compliance and security. Vanta is the leading AI trust management platform, baby.
Speaker 1:So Blue chip heavy Dow Jones rose roughly point 1%. It's not much, but it's on its worth.
Speaker 2:You didn't you didn't tell me when you said it was a record that it was point 1% gone yet.
Speaker 1:Three record closes back
Speaker 2:I hit it like it was 3% up.
Speaker 1:Industrial is the safe haven Yeah. In the SaaS apocalypse.
Speaker 2:Anyway, Nikita Beer is saying that Axe will be looking into undisclosed paid posts via clipping agencies. Tarun said, these big accounts copy and paste each other's content and get paid by X. What are your thoughts on this Nikita Beer? Nikita chimes in. He says, these are likely undisclosed paid posts, also known as clipping.
Speaker 2:When you see this happen, the person or brand in the story is likely paying a clipping agency to take over the timeline for a day. We're looking into it.
Speaker 1:Yeah. They're they're looking into it. But to be clear, this doesn't read like they're looking into supporting it. They're looking into Oh, yeah. How to how to, I think
Speaker 2:Well, that's what the that's what Yeet, the original poster, was saying. Like, we'll be looking into undisclosed paid posts. I think everyone's annoyed by undisclosed paid posts and wants them to go away. And it it appears that Nikita and Elon are also in that camp to say, hey. We, you know, we we we want these to go away as well.
Speaker 2:They make the platform worse in some ways because it's it's astroturfing. It's not organic. It's not what people actually wanna see. It's it's engineered to go viral. So it makes the makes the user experience worse, and Nikita cares about that.
Speaker 1:Buck says my rep at mister beast bank said I can have a 9% APY savings account, but I do have to live in the bank vault for a hundred days.
Speaker 2:The jokes really write themselves with mister beast bank. It's very exciting. But we'll see we'll see where it goes.
Speaker 1:Tyler was saying there's you could maybe offer no there's no 0% a a p y Okay. Or no interest yield, but you get a you get a you get a chocolate bar once a month, free chocolate bar.
Speaker 2:Wait. Isn't that just isn't that just pure upside for the for the customer? Because they don't they don't pay interest, but then they also get a chocolate bar?
Speaker 1:No. I'm saying, like, in it hey. Hey. It's like, we heard you like rewards.
Speaker 2:Mhmm. So we're giving you rewards.
Speaker 1:Got it. But Yeah. We're not gonna give you any of the interest yield
Speaker 2:that we get. But we'll give you a chocolate bar. Oh, okay. Got it. I thought I I was in credit card debt world, not in Yeah.
Speaker 2:Yeah. Yeah. Not in savings account interest world. Yeah. That makes a ton of sense.
Speaker 1:Yes. This is crazy.
Speaker 10:What's
Speaker 1:this? There's a ATM in China that melts your gold Wow. At 1,200 degrees Celsius and transfers money straight into your account.
Speaker 2:Do you think it actually does this in at the ATM, or do you think it just looks like it does this and it's just storing it in the background?
Speaker 1:Couldn't you couldn't you weigh it? But at the same time, I imagine people would try to spoof it, so they actually maybe do have to.
Speaker 2:It pays you immediately. Mean, I I've seen those ATMs where you where you put a bunch of change. Have you ever done one of those? Have you ever saved up a like a I used
Speaker 1:to do that when I a kid.
Speaker 2:Yeah. Piggy bank. You you you put a coin
Speaker 1:in Piggy banks really fell off, I think.
Speaker 2:I mean, the death of the penny does not bode well for the piggy bank maxers of the world. It was a it a true coming of age story to to save up a $100 in quarters, take it to the take it to the exchange. Although, the real alpha was not using those ATMs because they take a cut of the counting. So Yeah. They're
Speaker 1:preying on piggy banks.
Speaker 2:They are. Yeah. So you get Preying on young pigs. Yeah. You get the you get the little paper you get the little paper coin rolls, and then you fold them up and you put the quarters in.
Speaker 2:And when you get to the full stack, that's exactly $10 or something like that. And then the dimes is is is $2 or something like that. And and you and you very meticulously count them all up. It takes you all day. But at the end, you get a 100% of the value.
Speaker 2:You're not paying anybody. And then you take it to the bank, they turn them in, and they're very happy to hand you cold hard cash that you can use to
Speaker 1:buy The Kuvia game. Being five years old.
Speaker 2:Yes. Yes. I would I I would definitely save quarters. I have definitely bought an n 64 game for $50 with coins.
Speaker 1:Ashton Martin Aramco f one team is welcoming Cognition
Speaker 2:Massive news. Congratulations.
Speaker 1:To the cockpit Very excited. A dedicated AI coding company joins us as a global partner.
Speaker 2:Yes.
Speaker 1:Love to see it. We will be back with Aston Martin this year. I'm sure at some point with Also,
Speaker 2:I mean
Speaker 1:our brothers over in public, and it's great to see Cognition joining.
Speaker 2:Sort of underrated in the FDE boom that Cognition has been going after larger enterprises for since, like, day one. Right? Yeah. That this was, you know Devin did go into general availability, but, you know, the the business
Speaker 1:An enterprise business.
Speaker 2:Yeah. I mean, the the first time I saw Cognition mentioned on stage, think, at a Microsoft conference, and they were talking about re replatforming dot net applications. Like, that's not exactly, like it is vibe coding, but it's not really vibe coding. It's not a common, you know, consumer vibe coding use case. It's not a personal website.
Speaker 2:It's much more, like, you're a huge company and you're running some Fortran, and you gotta move over to Python or Rust or something, and and you send in Devon.
Speaker 1:Matteo says, today, I'm excited to announce our partnership with Aston Martin f one. Growing up as a motorsport fan and racing car driver myself, woah, some lore. I've always admired the precision and dedication that goes into every race. When I first connected with the Aston Martin team, it was clear they shared our vision at Eight Sleep. This isn't just a logo partnership.
Speaker 1:Aston Martin is now an investor at Eight Sleep because we wanna integrate our technology directly into their performance strategy.
Speaker 2:That's fun. That's cool. I mean, you're we we were talking about the the F 1 circuit for the drivers. It's so intense. You're flying all around the world constantly.
Speaker 2:And, I mean, it takes me a full week to adjust from just going from Europe to America. So getting I get an Eight Sleep.
Speaker 1:Yeah. I wonder if there's anything that can actually apply Eight Sleep's, like, cooling technology to the cockpit to help with driver performance. Like, I'm sure there's various vendors already that are dealing with, like, making sure that the drivers are not overheating. Yeah. Obviously, cars in IMSA and Yeah.
Speaker 1:Things like that have have AC. Yeah. It's nice.
Speaker 2:F one car, trailer with a California king, 18 inch mattress with an Eight Sleep on it. You sleep on that while you're going around the track. That's good. Let the
Speaker 1:So jaguar, is this a real jaguar out on the streets in London? Did you see this?
Speaker 2:I I saw the post, but I don't know if it's real. I have no idea. No community note. No key. Yeah.
Speaker 2:This does look real, but El Slapo. AI slaps though. It's not AI dude. You stole the original post from Instagram that was made two days ago. Hard to tell, but it does look like
Speaker 1:You can't even trust your own eyeballs in this world anymore.
Speaker 2:You can't. But wasn't wasn't it supposed to be electric when it came out? They said they're saying this is a V eight now? I don't know. I would need to really pixel peep on No.
Speaker 1:That's a joke. They're saying like, hey, it looks really cool. Now it just needs a v eight.
Speaker 2:Oh, now it just needs a
Speaker 4:v eight?
Speaker 1:Yeah. Seriously. Moving on.
Speaker 2:This does look good though. Moving on. I I think I think if they wound up shipping this, it it it could be it could be successful.
Speaker 1:I covered this when Chris was on from ai.com, but the story here is, this Malaysian bought ai.com as a boy in 1993. Wow. Now, he sold it for $70,000,000. He bought it for a 100,000,000.
Speaker 2:Wait. What? No. Bought it for a $100. Dollars.
Speaker 2:Sorry. He it
Speaker 1:as a boy, he bought arsian. Domain for her.
Speaker 2:Ismail. Ismail.
Speaker 1:Arsian Ismail.
Speaker 2:Ismail. He paid a 100 USD thirty years ago.
Speaker 1:What a buy. Just What a buy.
Speaker 2:He's crying.
Speaker 1:What a visionary.
Speaker 2:Visionary. I love it. It's amazing. Let me tell you about vibe.co. We're d to c brands, b to b startups, and AI companies advertise on streaming TV.
Speaker 2:Pick channels, target audiences, and measure sales just like on Meta. The the Vine boom really does hit.
Speaker 1:Dan Well Primak at Axios. Last story. He says It's good
Speaker 2:one to kick off the
Speaker 1:fucking round with. Stripe is in talks. We valued it over a 140,000,000,000. Mhmm. Everyone, Eric, Bond
Speaker 2:That's a lot. Gonna buy a lot of cheeky pints.
Speaker 1:A cheeky rack maybe.
Speaker 9:They can
Speaker 3:afford the the 20 ounce glasses now.
Speaker 2:They can build out the rest of the authentic Irish pub. That would be a good use of capital. No. Congrats to all the folks over at Stripe. What a what a fantastic, you know, progress.
Speaker 2:Certainly not affected by the the SaaSpocalypse and whatnot. It's a network. They've been building and building for years and who knows? Maybe we'll see
Speaker 1:I'm so curious to understand
Speaker 2:the twenty one hundreds.
Speaker 1:I would love I would love to hear them talk about the, like, competition for Stripe.
Speaker 2:Yeah.
Speaker 1:Like where are they actually facing competition? Sure. Is it real? Are they the kind of company that has to say, we have a lot of competition. We have, you know, cut basically
Speaker 2:think I it's Adyen.
Speaker 1:Yeah. That's Adyen. And certainly public. You don't
Speaker 2:see No.
Speaker 1:No. That's that's a yeah. That's a comp.
Speaker 2:Oh, you mean like But In
Speaker 1:the context in in our world Yeah. You don't exactly see companies saying like, just set up my Delaware c corp and I built some software. Now I'm gonna set up Adyen. Right? Yep.
Speaker 1:It doesn't
Speaker 2:Yeah.
Speaker 1:Yeah. Never see it. Yep. Obviously, they've been more a lot more enterprise focused, but I wonder where they actually do face competition at this scale.
Speaker 2:Well, we'll have to dig into it. Let's start the Lambda lightning round. We already have the mallet down, but we have Cristobal Valenzuela returning to the show. He's the cofounder and CEO of Runway. And here he is in the TV yeah.
Speaker 2:Ultradome. Good to see you.
Speaker 1:What's How
Speaker 2:are you doing?
Speaker 10:Hey. Good to see you, guys. How are you?
Speaker 2:Congratulations. Give us the news. What happened today?
Speaker 10:Yeah. A lot of news. We just raised our series e,
Speaker 11:and so we're announcing it.
Speaker 2:How much?
Speaker 10:315. That's 5. Big
Speaker 1:big numbers. Big I
Speaker 2:big love those products. You know I'm an OG. Jordy.
Speaker 10:Yeah. Yeah. Yeah. You were one of the first.
Speaker 2:Yeah. Yeah. Back when it was like a rotoscoping tool almost. Not to sell it short. There were other features, but the roto was very, You very
Speaker 1:invest. Yeah. That's salary you had. This a running joke. John John's like a early user of, like, every every, you know, 5 to $100,000,000,000 company.
Speaker 1:And now break break down what's been going on the last kind of few months, talk about traction, all that good stuff, and then I wanna talk about where this money's going toward.
Speaker 10:Of course. Yeah. There's a lot going on. And so, obviously, it closed around late last year. I think we just, like, figured out now we should announce it.
Speaker 10:There's a lot going on just in the company model release. We released 4.5, which, like, is one of the best video models in the world, and it's been getting used a lot I think a lot more than what we usually, like, plan for. And so one of the biggest thing in, like, research in both inference is capacity. How do you manage, like, the amount of volume of users and, like, inference that we're seeing? And so scaling compute has been critical for us.
Speaker 10:Mhmm. Remind me, like, we're we're one of the, perhaps, like, smaller frontier labs out there, and we're having and creating some of the most powerful, like, models. And I think the way we do it is we're very, like, efficient, you know, with how we do things and the research itself. Mhmm. And so a lot of our racing and reporting our funding towards is scaling that, like, machine we build to to get more training rounds, to get more pretraining of the next frontier models Mhmm.
Speaker 10:And then supporting inference. Like, we have millions of customers who just require more of runway and, like, supporting them is, like, the biggest thing and the biggest obsession for us right now. Yeah. So, yeah, putting putting funds into that and then talent. We're Sure.
Speaker 10:We're hiring across the board. So from from from research, from engineering, from sales, for pretty much everything at runway, which is which is great.
Speaker 2:Yeah. Talk about going all in on on video generation, training models, the actual video generation from start to finish versus tools. I was watching Corridor Crew. You probably know those guys. Yeah.
Speaker 2:They're like, I still don't have a good roto tool, you know, and they were, like, sort of vibe coding and stuff. And it feels like there's that we're in the centaur period of video editing, and I see Vibrills on Instagram all the time that are like, no video model could do exactly what they're doing because they're editing so fast and in such bizarre ways. At the same time, the models just keep getting better. That's sort of where you want to be. How do you think about the trade off between building tools and harnesses and and tool use within video generation versus just, like, just all in on the video generation?
Speaker 2:It'll solve every problem.
Speaker 10:So so I think the reality is they say you have to do both. Okay. The way we call it on runway is we there's that the exploration mindset and the exploration like mindset. You need to be able to explore and create new models, pre train them, build and net new products
Speaker 5:Mhmm.
Speaker 10:Net new things. I think we've been relatively good at that. We've been first to market with video, first to market with wall models with real time gen. Like, the surface area of what you can do there to help either filmmakers like the crew their crew guys or other folks is just so big. At the same time, like, the gaps you can fill by building the right workflow on top of the right model or chaining models together to get to where you need to go is the way you educate the market to to, like, that mean next frontier of sorts.
Speaker 10:And so the best companies, I would say, are the ones that can do both. Yeah. If you only focus on one, you're a deep hutch from your user base, the reality, from use cases. If you focus primarily on, like, workflows, you're gonna get leapfrogged. And this is a bigger lesson I think we have seen over the last we've been working around it for seven, eight years now.
Speaker 10:The bigger lesson of, like, AI startups is that they eventually get leapfrogged by a better, like, bigger, much more capable model.
Speaker 2:Yeah.
Speaker 10:And so there's definitely a market opportunity while you're getting leapfrog. And so being good at, like, being ambidextrous of, like, you need to do you're you need to use your left hand and your right hand all the time to, like, win here.
Speaker 2:Yeah. Talk a little bit about tool use. It feels like Nano Banana definitely has access to some tools just to, like, cut out an image, overlay it. When I asked ChatGPT to multiply two big numbers together, it doesn't just try and, you know, inference that. It actually writes some Python, executes it in a REPL.
Speaker 2:If I go to runway and I say generate me a video of, you know, beautiful mountains, it's gonna do that flawlessly. If I say now make it black and white, is it going to know just to drop out the colors using like a traditional workflow Or will it regenerate the footage because that feels like an extra step wasteful? And then if I like the way those mountains look, the new mountains might be slightly off. So how do you think about that that workflow and tool use coming to these models?
Speaker 10:Yeah. That's an interesting point. I I think tool tool tool use might be, like like I wouldn't say, like, the best way to necessarily think about it. I think the the way the best way to think about it, I would say, video models are capable of is that in some way, they have all these emerging properties that if you, like, tune them well into, like, we've there's there's examples and research, and I think others, and we have proven that if you wanna train a great rotoscope or a great rotoscoping machine, you can just take a baseline model and show it a couple of examples of rotoscoping. Mhmm.
Speaker 10:And the model has and this is right where the world model like approach comes from. It's like the model has innate understanding of the world. And so with the right examples, then the model can learn that particular task without necessarily having to be, like, pre trained for it, without necessarily having to see enough examples of it. Mhmm. And so the most unique opportunity around here is that these are eventually simulation machines.
Speaker 10:That's that's what video models are. They're simulating the world, and the way they simulate the world is by watching the world. Therefore, you can ask it for almost any task, like remove things or add things or change how things are are seen, create a new novel camera angle, for for example. Yeah. And and when you think about it that way, then simulation becomes extremely useful in other domains as well Yeah.
Speaker 10:Like robotics or still driving cars or many other opportunities where you're not showing videos to humans, but you're showing videos to robots, and robots are learning from those videos. Yeah. And I think that video as a world simulation engine is perhaps the most impactful thing that AI that we can work in AI these days.
Speaker 1:Yeah. How did you react to the Super Bowl? There was Fedka, cut like the first AI Super Bowl ad. I have to imagine a lot of the other ads were using AI
Speaker 2:In some way.
Speaker 1:Like in some way or another. It's kinda hard to clock. They're fifteen second ads. You kinda wanna keep up with the program, so not necessarily pausing and looking at each pixel.
Speaker 2:I see six fingers. Yeah. Yeah. I think a lot of people
Speaker 10:I think more more ads were using AI than I think people realize. But but it's hard to tell. And maybe that's the trick. Like, you can tell. Yeah.
Speaker 10:Like, I like the idea that you're making an ad and you're putting it out because it's good, not because it was made with AI. Yeah. But I'm pretty sure there are a lot of facts out there that were made with AI. Yeah.
Speaker 9:It was the
Speaker 10:first time I watched, like, a Super Bowl. I think I'm not a super, like, sports fan, but we had I'm from Chile. We had a lot of, like, great Chilean representation there. Oh, cool. Pedro Pascal was there.
Speaker 10:So Oh, nice. Biggest Chilean representation we're we've ever had.
Speaker 2:Yeah. Who's who are the biggest customer segments? Some some of these apps have people that just the video generation just for themselves. I was talking to Sam Altman about this. Like, when I use Sora, it's just for, an in joke between me and Jordy.
Speaker 2:It goes in, a text chat. Then you talk to other companies, they'll be like, we are pop we we are used by social media advertising agencies like crazy. Then there's other people that might be in Hollywood, and they're like, hey, we just need to do background shot or stock footage. What's the biggest use case right now?
Speaker 10:I mean, biggest use case is just media all around. Mhmm. Like, marketing, entertainment, film, preproduction, pro production. We've signed with all the studios out there. We've signed Wow.
Speaker 10:With a lot of agencies and brands, marketing teams. I think the default way you make things will be with AI and AI first. Like, it's just such a and and you started to see this already where, like, studios are now hiring, like, AI, like, chiefs or, like, they're organizing their entire companies around, like, AI related workflows.
Speaker 2:Yeah.
Speaker 10:I think that's the norm of what you'd expect over the next couple of years because the trade offs are just so are so big. Like, you start to realize you can do things in days instead of months. And so for us, media entertainment, just content allowed to cross from like social to much more professional will continue to be a source of growth for sure.
Speaker 1:Yeah. It was eye opening yesterday. We we were on Fox Business for, like, a total of three minutes. But while we were in the waiting room to go on, we'd let we watched, like, five minutes of ads. And every single one of the ads, I was like, I feel like runway could I'll, like, not one shot this necessarily, but, like, it's, you know, five different kinda scenes stitched together.
Speaker 1:And I don't know why you would and even in 2026 do this as a IRL production.
Speaker 10:Yeah. No. I mean, you don't have to. And I think that's what most agencies have realized, but also the marketing teams. We've signed with PayPal, with Allstate.
Speaker 10:We've signed with agencies across the board, with AMC, with Lionsgate. Like, all of them, all of those companies and brands and teams have realized. Like, why would you spend six months hire hire an agency to do one work when you could just, like, do it internally as you were saying? Yeah. Not entirely one shot it, but, like, kind of close to it, to be honest.
Speaker 2:That's amazing. Well, congratulations on all the success. Thank you so much for
Speaker 1:Sure you'll be back on this year. You've got a habit of, you know, you know, raising money every two months.
Speaker 2:Such an exciting company.
Speaker 10:Yeah. Maybe in two months, we'll see you again.
Speaker 1:Yeah. Yeah.
Speaker 2:We'll we'll see you soon.
Speaker 1:Good stuff. Congrats to the team.
Speaker 2:Good seeing you.
Speaker 10:Awesome. Thank you, guys.
Speaker 2:Bye. Let me tell you about Restream. One livestream, 30 plus destinations. If you wanna multistream, go to restream.com. And I'm also gonna tell you about Graphite, code review for the age of AI.
Speaker 2:Graphite helps teams on GitHub ship higher quality software faster. And without further ado, our next guest is in the Restream waiting room. We have Brad from Primary. He's the cofounder in general. Brad, good to see you.
Speaker 2:How are you doing?
Speaker 11:Great, guys. How are you doing?
Speaker 1:We're doing fantastic. Not as great as you. We didn't raise Yeah. What happened? Hundreds of millions.
Speaker 1:We're not announcing hundreds of millions of dollars.
Speaker 2:Give us the news. What happened?
Speaker 11:I don't know, guys, but you what is this? Like, about twelve months in and you're becoming the place that people like me have to come and make these announcements? So, like, you're doing something right.
Speaker 2:Thank you. Thank you.
Speaker 1:Or having fun. Yeah. But it's
Speaker 10:great great to meet great to meet you.
Speaker 1:And super excited to Yeah.
Speaker 2:Give us the news. How much is the fund?
Speaker 11:So we raised $625,000,000 for our Oh. Big Gong. Awesome. Exactly. First Gong of my life.
Speaker 11:I I appreciate it. First Gong in primary's history. That's great. Gratto May there be many more? Yes.
Speaker 11:But $6.25 for our fifth family of funds, that's both a pure seed fund and what we call our select fund that doubles down on some of the biggest and most successful of our portfolio companies. That's to we are our model is institutional seed at scale. We think the world is rapidly, as you guys know, and you guys have talked to the leaders of these firms, the kind of mega platforms are getting bigger and bigger. They're sucking a lot of oxygen out of the room. They're getting more and more aggressive in the seed market.
Speaker 11:And our point of view, my co founder Ben Son and I have thought from the beginning ten years ago that seed was a sub asset class that deserved to be treated as such, that there's a very different value proposition, a very different set of needs and opportunities to be the best partner to founders at their earliest stages, it looks a lot different than supporting founders who have $10,000,000 businesses you're trying to take to 100. And so we've tooled everything we do to be the best partner in an institutionalized professional with a lot of support resources behind it way from in those, you know, most fragile moments where the magic really starts to happen.
Speaker 1:Give us, give us the the update on seed today. In in 2020, 2021, there was, you know, every platform fund was descending down and being like, hey, we've got plenty of money. Why don't we compete here? The narrative at that time that you were probably talking founders through was like, hey, there's some real signaling risk and you're not gonna get necessarily the attention and there's all these implications. And then I feel like a lot of funds backed off a little bit, but at the same time, they created accelerators and things like that.
Speaker 1:And where where are we at today? What is what does the market look like?
Speaker 11:Yeah. I don't I haven't seen a ton of backing off yet. Certainly, every time we're in an exciting competitive seed deal, which is all of them now, we assume that one of the big, you know, at least one of the big multistage platforms is is around the hoop as well. And I get why. I mean, I've been in this business for a couple of dozen years now.
Speaker 11:I've seen three full cycles of of of the kind of big firms coming down market, and that that's what everybody does. It gets competitive at your at your stage, you try to front run all your competitors and move early, and that moves down and down and down market. And so we're seeing it again. I think in each one of those cycles I've seen before, founders ultimately figure it out. You know, when you have leaders of some of these platforms openly saying, we're sort of indexing categories, we wanna seed multiple competitors, and then we'll back up the truck for the winner.
Speaker 11:That's a really rational decision for them. It's not a great value proposition for for seed founders, and we we wanna be that. We are that.
Speaker 1:Mhmm. Amazing. Sorry. Go for it.
Speaker 2:Oh, I'm just, I'm wondering more about, what being ready for a seed round looks like in 2026. It feels like some things are so fast with prototypes, vibe coding. Like, you can have something that looks so polished. At the same time, like, building relationship with cofounders takes years, decades sometimes. Like, what what what what do young founders, new founders actually need to be thinking about before they go out to raise?
Speaker 11:I think the fact that to your point, the fact that you can vibe code something awfully impressive in a weekend, the fact that you can get customers excited about something literally in a week or two now, obviously, that plays to the advantage of everybody. But it doesn't substitute for the fact that if you're gonna be selling into a market you know, there's a reason that the guys, you know, the three or four real breakout companies in the legal tech world
Speaker 4:Mhmm.
Speaker 12:All
Speaker 11:have lawyers as their Yeah. Amongst their founders. There's, like, critical customer context and product awareness that only comes from living within these industries. And you can't you can't fake that in a weekend. Yeah.
Speaker 11:You can't fake how well you've gotten to know your cofounder. We certainly spend as much time as we can really getting to understand the the human dynamics of this stuff because the lesson I relearn every single year in this business is that there's nothing more important than the kind of character and grit and makeup of those founding teams. Like, that's that's what ultimately drives the game.
Speaker 1:Yeah. How's What's a category that you'd like to be more invested in? Maybe you've done some, one or two deals, but you want to do more? Or there's kind of you see a greenfield opportunity and you're looking for the right company to back there?
Speaker 11:A couple of things. We've been very light on activity over the last several years in blockchain and crypto because we haven't felt like the kind of application layer of those markets was ready. That is starting to feel much more interesting to us. My partner, Emily, who leads all of our financial services work is getting more and more oriented there. My partner, Sam Toole, who leads our health care practice, is thinking a lot, and we brought on a a venture partner recently to help us explore what's happening at the intersection of AI and biology.
Speaker 11:And there's a set of life sciences companies that are gonna be transforming treatment and therapeutics in the next decade that look a lot more like computer science companies than they do biotech companies in a traditional way, and and we're getting, much more actively involved there as well.
Speaker 2:Have you been processing the SaaS pocalypse? Is it is it a it's a suicide mission if you're a startup founder to pitch a seat based model in 2026?
Speaker 11:A seat based model?
Speaker 2:Seat based model. I'm selling SaaS, and I'm doing enterprise SaaS.
Speaker 11:Secret sauce. Trouble, stick the gun to
Speaker 2:your head. Just Okay.
Speaker 1:Just end it. Yes.
Speaker 11:But a usage base, a value base. Like, I think we're in a really interesting period of of transforming the way software is priced. And I think there's a lot of people with good ideas and best guesses. Anybody who tells you right now they know what the answer is
Speaker 2:Yeah.
Speaker 11:Is wrong. Like, we're gonna have to see how that plays out over the next several years. And it's that kind of, you know, our the premium we put on creativity, nimbleness, like being a learning machine in the founders we back Mhmm. Is higher than ever right now because we know it like, it's just radically changing
Speaker 2:Yeah.
Speaker 11:Week to week to week.
Speaker 2:Yeah. Do you think that, do do you like the idea that AI unlocks, like, new areas for software to eat the world more fully? I mean, the legal boom has been interesting. There's been an there's been a few legal tech companies, but I never thought of legal tech as, like, a multi unicorn category. And now it feels like there's many players, lots of revenue, like it's an entirely new era for that category.
Speaker 2:And I feel like there's probably five more of those subcategories that are less explored.
Speaker 11:I think there's a lot of markets where historically it's been hard to sell software, but when you do what the legal tech guys are doing
Speaker 1:Yeah.
Speaker 11:And start to sell software that's bundled effectively with work
Speaker 4:Mhmm.
Speaker 11:That's a super compelling, super compelling set of opportunities. We have a company called Lighttable that's in the kind of architecture and engineering and design space that, you you traditionally an architect completes a set of drawings for a building. You send it off to a third party quality control operation, and they, like, do the checking of, like, hold on. You can't have a, you know, elevator right there next to that I beam, whatever the problem is. Yeah.
Speaker 11:And so it's been a traditionally very manual process.
Speaker 2:Yeah.
Speaker 11:Like, suddenly, bam. That is AI automated. What took you three months gets done in thirty minutes.
Speaker 2:Yeah.
Speaker 11:And that's been historically a really hard category to sell into.
Speaker 2:Mhmm.
Speaker 11:But now when you're selling not just tools to do the work, but the work completed itself, that's really transformational. And we think that plays that is what's going on illegal, and that plays across many, many, many sectors.
Speaker 2:Mhmm. IPO oh, sorry.
Speaker 1:Go for it.
Speaker 2:IPO market in relation to seed market. If, OpenAI, Anthropic, SpaceX get out, there's a whole bunch of liquidity that could funnel into early stage startups, even early employees getting liquidity, becoming angels. At the same time, you know, you have, like, the most formidable companies in the world now trying to, like, eat every opportunity. How are you processing this idea of, like, these mega IPOs and how they might change your business or the business of the companies that you work with?
Speaker 11:There there's no question, guys. They're they're gonna be helpful. I mean, Mhmm. LP base, you know, we have Yeah. Terrific LPs.
Speaker 11:They just trusted us with a big pile of new capital.
Speaker 2:Yeah.
Speaker 11:We feel very fortunate. But they're all starved for liquidity. The asset class has not done a great job of returning more dollars than it's raised year after year. And so I think this will unlock a bunch. It's been a tough we had a quite streamlined process in our raise, but it's been a tough process for a lot of people.
Speaker 11:And I think it will be good to have more capital flowing into, frankly, something other than just the mega platforms. I think an interesting thing in the IPO dynamic, though, is, yes, OpenAI, Anthropix, SpaceX, those are incredibly sexy. Like, I need to own that stock kind of names. The pipeline of IPO ready companies is also full of a lot of traditional seat based SaaS companies that are in a bit of a weird limbo right now. So it's unclear to me whether or not those three getting out unlock some, like, tidal wave of additional activity.
Speaker 1:Yeah. Last question. How are you advising early stage founders? Let's say you back at, three cofounders in New York. When are they making the call to stay and scale a team in New York versus, set up on the West Coast or or wherever?
Speaker 11:You know, we do equal amounts of work on the West Coast as as New York now despite our original New York heritage. By and large, if we're meeting teams who are in New York, they're in New York for a reason and a good reason. And so I can't remember ever having said, like, gosh, you really need to go West to build this business. We definitely see companies on the West Coast that are, that should be there as well. But I think as we you know, what we're in right now is a is a phase of the AI revolution that's been much more foundational and infrastructure driven, and that's a phase that The Bay always does well.
Speaker 11:You know, when the when the PhDs are driving the companies, Stanford and Berkeley are gonna be, you know, out punching NYU and Columbia. When kind of go to market activity and being connected to customers and starting to really scale around enterprise accounts and all of that. That's when the fact that New York is home to media and consumer packaged goods and financial services and everything else starts to shine. So it's been important for us to be playing both coasts because different coasts excel in different environments.
Speaker 2:Yep. Makes a ton of sense.
Speaker 10:Awesome. Well, great to meet you.
Speaker 1:Thanks for coming on. Congrats to the whole team.
Speaker 2:Congratulations. And everyone.
Speaker 4:We'll talk to
Speaker 11:you guys soon. Congrats again to you guys on all your successes. It's been fun
Speaker 4:to watch.
Speaker 2:That. We'll talk to you soon. Have a good rest of Let your me tell you about Okta. Okta helps you assign every agent a trusted identity so you get the power of AI without the risk. Secure every agent.
Speaker 2:Secure any agent. And without further ado, we'll bring in Dana Grayson. Welcome to the show. Thank you so much for coming on down to the TVP in Ultradome. First time on the show, please introduce yourself.
Speaker 12:So Dana Grayson, founder of Construct Capital with Rachel Holt. We started in 2020. Mhmm. I spent about a decade prior to that, a little bit less at NEA Yeah. Doing early stage investing.
Speaker 12:Started a smaller boutique firm in Boston. That's where I learned venture, had a small stint in product design
Speaker 4:Mhmm.
Speaker 12:At a company that had gone public. Yeah. And that's what sucked me on over to the venture side.
Speaker 2:Was there any particular focus at NEA stage wise, sector wise?
Speaker 12:Yes. Definitely. So NEA, big firm Yeah. Tech, health care, early stage, later stage. At least that's how they're organized then.
Speaker 12:I was early stage tech, mostly outside the Bay Area, but that's because I lived on the East Coast.
Speaker 2:Sure.
Speaker 12:Of course, did some stuff on the Bay Area too. My first investment was a company called Onshape, which is a CAD company, CAD in the cloud, brought CAD, like, next generation.
Speaker 2:Now based on what you're doing now? Okay. Yeah. Continue to assess.
Speaker 12:So, exactly. Like, that that was a pure SaaS investment. I was a SaaS
Speaker 10:Yep.
Speaker 12:You know, like software developer prior to that. Always enterprise SaaS, enterprise software. Mhmm. Through Onshape, I saw like, okay, if you actually bring like collaboration to product design, like real product, physical product design, make it cloud like Google Docs, that affects like the whole downstream
Speaker 2:Yeah.
Speaker 12:Manufacturing and creation of those projects. Yeah. Like you're not FTP ing files. You're not calling your, you know, manufacturer in China. You're like actually able to, like, instantly change things and iterate on the design a lot faster.
Speaker 12:Mhmm. So from there, I got into Desktop Metal Yeah. With Rick Fulop, who I had known for years prior. A whole slew. Basically, 2015 on was doing just exclusively industrial, mostly software investing, Tulip automation Sure.
Speaker 10:Before it was bunch years.
Speaker 12:Yeah. Before it was cool.
Speaker 1:Before we had we had a for it outside of just
Speaker 12:I didn't have term for it. Yeah. Yeah. I didn't have a term for it. I like say.
Speaker 12:I was like, no. Not hardware. Not hardware.
Speaker 4:Because that
Speaker 12:was like a bad word.
Speaker 1:Yeah. Like, secretly, we're doing hardware.
Speaker 2:Was that just a bad word because of the CapEx intensity of that category?
Speaker 12:Yeah. Yeah. In those days, you had to have and it wasn't that long ago, but you had to have people like Rick who were just like Mhmm. Larger than life, gonna will it to make it happen. Yeah.
Speaker 12:You know, you've got now we've got SpaceX hardware
Speaker 1:was hard. So people were like, like, I maybe don't wanna invest there or founders would say, well, I could build this thing in the real world, but I could also build some software scale to a million users really fast. And now hardware is cool, but it's still hard. Like that part hasn't changed and which is why over the last, you know, I I had a I had a a friend of ours was saying like, man, like, I think a lot of these new like hardware American dynamism companies aren't gonna make it. And we were like, yeah, of course.
Speaker 1:That's actually how it's always been, but that doesn't mean you shouldn't invest there. That doesn't mean it's not worth still building in these like, it it still fits the venture model even though it's really hard, but you're gonna get these outlier outcomes.
Speaker 12:Well, you gotta keep it simple. Yeah. Like, in hardware, you can't do everything. Mhmm. Like, when I see teams, like, designing everything new, you're like, that's gonna fail.
Speaker 12:Because, like, you do every little thing new. We love companies that are doing, like, commoditized using commoditized off the shelf stuff for most of it, and then innovating where they need to innovate versus, like, building the whole thing. That that's where you can really falter.
Speaker 2:I remember talking to a drone company, like, a decade or two ago that didn't use Linux. They were like, we need our own operating system, which is Might as well. Crazy. So they had, like, a operating system team, then the software on top of it, then the hardware. It's like, there's really
Speaker 12:You'd be around.
Speaker 2:Very well. Success. Yeah. Exactly.
Speaker 12:You'd like to be around.
Speaker 2:Yeah. And
Speaker 12:so that that's what I say. I mean, I think today, what you're seeing in industrial tech, you're seeing three main things. You see AI automation, and we'll, of course, get to that, I'm sure, in this conversation.
Speaker 2:Sure.
Speaker 12:And that just being able to do things that are filling the talent shortage
Speaker 4:Yeah.
Speaker 12:And boost productivity. Just like we're seeing in the IT space, obviously, coming over to not obviously,
Speaker 2:but Yeah.
Speaker 12:Coming over to the industrial world.
Speaker 4:Yeah.
Speaker 12:It's taking longer. Physical AI is gonna be longer, but it is happening. I think the other thing that we really see is, like, you're able to create things and do things that you just weren't able to produce Mhmm. Before, partly because of the speed. Like, you get engineers that are coming over from the tech world where they're used to someone mentioned earlier on the show, like, fail fast and do things like that.
Speaker 2:Yeah.
Speaker 12:Ethan. Like, you have to have that mentality of just, like, willing it into existence. Yeah. We don't usually back people that are coming out of Fortune 100 industrial companies. We back the people that were coming out of Uber or now SpaceX, Palantir,
Speaker 1:etcetera. You wanna back, like, people that are coming out of a big company, but that became big really quickly versus the industrials company that's like, yeah. We were started in 1800. And
Speaker 12:Yeah. Otherwise, hardware. It's like, well, this will be ready in two years, and you can't accept
Speaker 2:Yeah.
Speaker 1:Yeah.
Speaker 12:That type of cycle.
Speaker 2:What do you think about why the reindustrialization narrative is so tied to the defense narrative? Yeah. I've had this sort of, like, random thesis that, like, maybe if we wanna reindustrialize fully, like, we should make Happy Meal toys here and get back into injection plastic injection molding. But like, what what are the steps? Obviously, are some accelerants to reindustrialization in the defense context because of supply chain security, because of the way DC writes contracts and does deals.
Speaker 2:You sort of have one buyer. So maybe you can accelerate. But what's easier or harder about the various pieces of the re industrialization puzzle?
Speaker 12:I think it's definitely become like the early adopter market, which is like ironic.
Speaker 2:It is ironic. Yeah.
Speaker 12:That like defense is our early mover.
Speaker 2:Yeah.
Speaker 12:But I think it'll happen across the board. I mean, we started Construct, we really believe that, like, world of industrial companies that could dwarf, like Mhmm. You know, the whole S and P value today, 50 if you projected out fifty years, you could have, you know, industrial companies. They should be part of our public markets. Right?
Speaker 12:But getting back to your question, in the defense space, that that is just something that you know has to be built on US soil. You know you've gotta adopt new technology. You had the great impetus, the oh crap moment
Speaker 2:Yep.
Speaker 12:When, you know, Ukraine and actually, it happened way before that. Yeah. But that really opened the eyes of, like, if we're gonna support that, we're running out of stuff Mhmm. Faster than we can make it.
Speaker 4:Yeah.
Speaker 12:And, like, it's a oh crap moment, not just like, we knew this was happening Yeah. Which they did know was happening, but it was like an actual depletion. So they had to escalate. And there are budgets, there are large incumbents that need to be disrupted. If it it's all the things.
Speaker 12:I think the thing that we haven't seen is, like, we're financial markets investors. You know, we're all totally driven and constructive, like, we wanna see 50,000,000,000,000 of, like, new market cap created in our lifetime
Speaker 2:Yeah.
Speaker 12:In public markets from these spaces. We don't know how that's gonna play out yet, but I think we're, like Yeah. What's learning. What's different
Speaker 6:about the market
Speaker 2:for the early stage industrials company. Venture debt is so taboo if you're running a software company. It's something that can blow up on you. It requires a different level of financial rigor. Mhmm.
Speaker 2:What what are you seeing the best founders do to sort of financial engineer their success when they need to maybe buy a lot of equipment?
Speaker 12:I think it's a hole in the market right now.
Speaker 2:It is.
Speaker 12:I mean, I do think it's a hole. I think debt is a hole. You know, the venture debt guys don't know how to lend to companies that are startups unprofitable buying hardware and capex. Like, they don't do that.
Speaker 4:Yeah.
Speaker 12:You know? And traditional banks that would do that don't do that for unprofitable companies. Mhmm. They lend to get cash flow. So you kinda have to back into it.
Speaker 1:But but it's like the founder actually has to put their house on the line, you know. Like it it it very quickly is like, yeah, you can get a loan if you're willing to like, you know, stake your entire Yeah. Financial life Yeah. On it. And you should venture back to startups or not used to doing that.
Speaker 2:Yeah. Yeah.
Speaker 12:So you have to put these different Mhmm. Instruments together. We don't recommend that, like, raw startups go out and take debt. But certainly, series b stage, you shouldn't be using equity capital to finance a build out of a factory or
Speaker 2:Yeah.
Speaker 12:You know, things that are financed any
Speaker 2:movement on equipment financing in the way large equipment makers if they're starting to sell to more startups, if there starts to be more activity in the venture community, there's actually crossover and you see more risk taking from suppliers deeper in the supply chain? Yeah. Because that's also, like, unlocking liquidity in some ways. Right?
Speaker 12:Yeah. I mean, vendor financing is great. Right? So
Speaker 2:Might as well.
Speaker 12:Yeah. I we've seen some of that certainly at the bigger companies like
Speaker 4:Sure.
Speaker 12:Hadrian and others that are buying at scale now. Yeah.
Speaker 1:Yeah. What about Wait. Speaking of Hadrian, I wanted to ask, do we do we need more Hadrians or is Hadrian the Hadrian for x? And a little anecdote, we were flying back from the Super Bowl and Chris, the founder of Hadrian was there and I was like, oh, were you were you at the game? I didn't see you.
Speaker 1:And he's like, no. I was like, is that some business meeting? And I was like, that's that's bullish. It's like it's like a late late Sunday night white like he was he was he was locked in. Yeah.
Speaker 12:Well, I have both sides of that bet because my job depends on more Hadrians, but I would love Hadrian to be the only Hadrian.
Speaker 2:We just
Speaker 12:plow it all into that. But I think you've truly succeeded when you hear people saying, I'm the Hadrian of x. You know, we sit in
Speaker 2:a Sure.
Speaker 12:Position where we're like, yeah, not really. Mhmm.
Speaker 1:It's like, do you know what Hadrian does?
Speaker 12:Yeah. But that's okay too. I mean, that's the sign of success. We're the Uber of. We're the
Speaker 4:Yeah.
Speaker 12:You know, DoorDash of. We're the Google of.
Speaker 4:We're Yeah. The
Speaker 12:But I think what Hadrian's done so well, and you guys probably know, is just rebuilding the whole stack and like really, you know, not saying like never say die until it's full automation, but like getting real return on, I you know mean, they hit this market that was like supply going down and demand going up. Yeah. And like when we first invested, we weren't we didn't even see the defense stuff. Right? Yeah.
Speaker 12:Like, we we loved that it would happen and we thought it would happen. We were investing purely on aerospace and just our own belief in re industrialization. And that and that was already demand going up. But then you have like Yeah. Double demand.
Speaker 12:Like, there are very few companies, like, you know, people say you get lucky. I don't believe in luck. I don't believe in I do believe in timing, but not everybody can like have a return on timing or, you know, like you would on luck or return on. Yeah. Investment that way.
Speaker 1:What can we, do we need to be learning more from China on the manufacturing side? It feels like they learned plenty of things from us. We they were at the factory of the world. They learned, like, what it took to make a great product. And then, you you look at BYD and companies like that, learning from Tesla, whether Tesla, likes it or not.
Speaker 1:We've talked to t one energy. When we saw t one energy, like, launch or at least, like, put out a launch video last year, we got super excited because it looked like a Shenzhen style factory in The US. And we were like, wow. America is back.
Speaker 2:And then
Speaker 1:we realized that, it had a Chinese history. But what what can we learn from China? Does that do we need to be taking that more seriously versus the American, you know, pull yourself up by your bootstraps and figure it out approach that
Speaker 12:I mean, sure. I think you should always know, you know, keep your competitors closed, be learning from them. Mhmm. But be learning from them in a way that you can, like, leapfrog. I mean, I think what we're good at in The US is, you know, the things that you guys have been talking about all day, AI Mhmm.
Speaker 12:You know, systems. And if you're gonna play the catch up game, like, we're probably not gonna catch up. Like, if you're gonna play the leapfrog game, you've got, you know, to reinvent the way automation is done through what we do well with AI and software and
Speaker 1:Yep.
Speaker 12:And systems. So I'd say, like, be aware, but, like, we're not we don't have that culture. We don't have a we don't have the worker talent available. You know, Steve Jobs said, like, we wouldn't even be able to do the tooling of the iPhone in this country with the people that do it, we don't have the skill set. So we've gotta find something else.
Speaker 12:I I firmly believe in it's been a original point of view or thesis of construct since we started of, like, manufacturing and production will look different in this country, decentralized, different, you know, smaller formats. That was the promise of additive manufacturing, which I think is still finding its way. Yeah. But you can do a lot of different things. Not you know, you don't need humanoid robotics going everywhere.
Speaker 12:You may we may end up with that, but we have a few steps in between of just automating factories.
Speaker 2:I wanna go back to the government as an interesting buyer of new technology, reindustrialization technology, defense technology. I'm interested to hear what you're seeing best practices look like on ramping up a business that sells to the government. I'm familiar with the SBIRs and then getting to program of record. Has anything changed there? What are you seeing founders sort of match to based on their fundraising in the private markets Mhmm.
Speaker 2:Relative to traction in DC?
Speaker 12:I think it's it's probably more a canon, like, I'm speaking sort of naively here because we're not a bio we're not biotech investors. But if you think about, like, the biotech world, right, you take different markers, you're like, okay.
Speaker 2:Ages.
Speaker 12:You've got FDA clearance, like, you can go public. Or like, you've applied for this Yeah. You know, you've got to this clinical trial.
Speaker 2:Two trials.
Speaker 12:Oh my god. It's amazing. I'm like, I don't know if that's amazing or not. Yeah. But like, I think those are the signals you can take of like Yeah.
Speaker 12:Getting a program of record, how you navigate that. But, you know, these markets are mercurial too. So we're in a really great time now where there's a lot of spending, lot of new programs
Speaker 4:Mhmm.
Speaker 12:A lot of disruption, a lot of like unseating Mhmm. A lot of neo primes that everyone's talking about. So
Speaker 2:What does it take to work for you as an investor? Do have to be a great angel investor? Do you need a portfolio? Do you need to be an operator? Yeah.
Speaker 2:What are looking for for folks? Yeah. In the first time you hire.
Speaker 12:Yeah. You know, and we think of ourselves as like, if you take the way Venture's gone and like the bulge bracket
Speaker 4:Yep.
Speaker 12:VCs and Yep. The boutique VCs. We're boutique VC. Mhmm. I came from bulge bracket place.
Speaker 12:Yeah. Voted with my feet. That change has been going on for a while. It's great to see some a couple firms, you know, declaring success there. Mhmm.
Speaker 12:But like
Speaker 1:Declaring success?
Speaker 12:Well, being successful. I think being think being able
Speaker 2:to declare success
Speaker 12:because they were declaring their path for a long time and I think Yes. They can declare success. Raising Sure. What was it? Andreessen 15% of all venture capital, maybe more, 18%, I can't remember
Speaker 1:what meaningful market share.
Speaker 12:That's like that's that's success.
Speaker 4:It is. Okay.
Speaker 12:That's hat tip, you know. So but if you follow, like, I've been studying that for a while because I came from a boutique firm in Boston. Went to NEA.
Speaker 2:Yeah.
Speaker 12:I don't think the way to look at it is look at other and I'll get back to your questions about how we hire. But I don't think the way to look at it is how other venture capitalists are doing it. Like, we look at, like, other financial markets, other asset classes, like hedge funds.
Speaker 4:Yeah.
Speaker 12:So if you look at, like, hedge funds, you've got, like, the Bridgewaters, the bulge bracket, and then you've got, like, the bow post, you know, the boutiques.
Speaker 2:Yeah.
Speaker 12:We're very much a bow post. So how would we or we aspire to be?
Speaker 2:Yeah. Who we hire?
Speaker 12:We aspire to be. So how we hire is we hire that analyst type thinker
Speaker 2:Okay.
Speaker 12:Who unlike in the hedge fund world, you can't do a lot of, like, analyst based research behind your desk.
Speaker 2:Yeah.
Speaker 12:Our research is going out, meeting people, being in the field. Like, you have to learn on the front lines, but people that form that point of view. Mhmm. And we work in a very team based approach.
Speaker 1:Mhmm.
Speaker 12:So, you know, if they've spent thirty hours working on something and I've spent, you know, two hours meeting the founder for the first time, I'm gonna, like, wanna collaborate with what they've learned and what they've seen. And then I can also help them, you know, think about winning the deal and how to do this. And and so we want people who are original thinkers Mhmm. Who have points of view and they're scrappy, and can go out and hunt it down.
Speaker 2:Is there anything that jumps out on a resume?
Speaker 12:I mean, we wanna see success in that analytical rigor Mhmm. But we wanna see that combination of self starterism. Sure. You know? Yeah.
Speaker 12:So we do like the analytical rigor, but you can get you can get sidetracked by that because there are a lot of great, you know, bankers out there.
Speaker 2:VC is just so interesting because you have somebody like Andrew Reed, Goldman background, then you have some so many founders. You have operators. You have
Speaker 12:people Anywhere. All from anywhere.
Speaker 2:Over the place. It's a
Speaker 12:Yeah. When I first got into venture, I was at a business school thing, and I heard a venture capitalist speak and he's like, you've gotta have been an engineer.
Speaker 2:Oh, yeah.
Speaker 12:You had to have been a company that went public. Yeah. And then you gotta go to business school. And I was like, oh, I've done those three things. I should go to venture.
Speaker 2:But Yeah. It's funny.
Speaker 12:If you had said, you could do anything or you need be a banker background.
Speaker 2:Yeah. Know, we make that joke, but, like, there really are so many
Speaker 12:other backgrounds. There's no
Speaker 2:more so than other than other career paths.
Speaker 1:What's your what's your health tech stack?
Speaker 2:I see you got the
Speaker 1:WHOOP and the Apple.
Speaker 12:Oh, I'm ridiculous. Yeah. I got the WHOOP. I love the WHOOP.
Speaker 2:Shout out Will Ahmed.
Speaker 12:Yeah. Yeah. We should have invested in him long time ago. Love the WHOOP and I'm a proud customer. I this is my iPhone finder.
Speaker 1:Okay. IPhone finder. Got it. Got it. Got it.
Speaker 12:So and it's a time it's a watch. Yeah. Yeah. And then, you know, I also, you know, do the bands when you go to different workout classes and stuff.
Speaker 2:So Cool. Nice.
Speaker 4:I have
Speaker 12:a I'm a single stream device for one single thing. This is probably more sleep than
Speaker 1:You got two risks for a reason.
Speaker 12:Right.
Speaker 1:You were giving this advice to a friend. He was like, I love the Apple Watch. I was like, that doesn't mean you can't get an RM for
Speaker 12:the other wrist. I haven't done the Oura
Speaker 6:Ring. Don't like
Speaker 12:I don't like that that form factor, but
Speaker 1:I hear they're just
Speaker 2:the space.
Speaker 1:I hope you let us know when you find a real Hadrian for X. Yeah.
Speaker 12:They're out there. We've we've done a lot. Energy Send them on is a big space. Power.
Speaker 2:Energy is a fascinating space.
Speaker 12:Great one.
Speaker 1:Yeah. Awesome. We're Well, great
Speaker 10:to meet you.
Speaker 12:Thank you
Speaker 2:so much for coming by. Thank you. So we'll talk to you soon. And we have our last guest of the show. We got Ashley Vance from Core Memory.
Speaker 2:He's the founder. He's the CEO. He's the podcast host. He's a documentary. He's an author.
Speaker 2:He's a multi hyphenate. He is a friend of our show. We were excited to announce his, his launch of core memory a little over a year ago. We made a sports centers type hype reel.
Speaker 5:Amazing.
Speaker 2:You said a lot of crazy things about some legacy media companies that I probably wouldn't say now, but we all had a good laugh.
Speaker 1:You didn't say this was a death now?
Speaker 2:Death now for Bloomberg short the stocks. Like, we were going crazy.
Speaker 5:Did you time may tell you. We'll see. We'll see.
Speaker 2:Yes. But how are things? What what what's most interesting to you? What are you what are you tracking today? You've you've done so many different things, tours of Abilene.
Speaker 2:You you've been tracking this AI talent war, I feel like, pretty well with a Mark Chen interview and Jerry Touarek as well.
Speaker 5:Yeah. Jerry, Kylie Robinson joined our team. She's in.
Speaker 2:Huge pickup. What do
Speaker 5:you call her? A scoop?
Speaker 2:We she's scooping like a Baskin Robbins employee.
Speaker 5:Yeah. That's what
Speaker 4:we call it.
Speaker 2:But we have a whole list of scoop related puns that we will be slowly trickling out as more scoops hit the timeline. Yeah. So I don't wanna leak them all.
Speaker 5:Okay. I'll send them to you. Okay. Hold on. It's so cool to be here, man.
Speaker 2:Welcome. This place is amazing.
Speaker 5:Guys are recording? You were recording. We're filming you. Filming us. Face too.
Speaker 5:TV you. I'm recording on my face. All the cameras. I think I'm the first person to do
Speaker 4:a Yeah.
Speaker 5:A Metawalka. I know right. I'm told. I love that. Yeah.
Speaker 5:So, well, what are we doing? Yeah. Well, first of all, you're in a Quonset hut. Yes. Which is near and dear to my heart.
Speaker 5:You guys know Silicon Valley began in a Quonset. I didn't know that.
Speaker 1:No way.
Speaker 2:Tell me
Speaker 1:the Yeah. When we figured out how quickly you can actually build these structures Yeah. We were shocked. Yeah. Extremely efficient.
Speaker 5:And there's that one startup that's doing like the inflatable ones from some Belarus technology. But yeah, no, Quonset HUD's William Shockley Yeah. Invents the transistor at Bell Labs. His mom lives in Palo Alto. This is like why Silicon Valley Silicon Valley.
Speaker 5:He wants to his mom's not doing great. She misses him. Yeah. He wants to move out. So he moves to Palo Alto, sets up Shockley Semiconductor Lab in like 1954 maybe and it looks exactly like this.
Speaker 5:It was on it was right in Mountain View on San Antonio Road. It no longer exists.
Speaker 2:It's amazing because we always get like, why aren't you in San Francisco? You know, is this a real tech show? It's like, recreated Silicon Valley here. Right here.
Speaker 1:Yeah. Actually. In Hollywood.
Speaker 5:No. I saw it. I saw it. And it was it
Speaker 1:was great.
Speaker 2:How is SF? Do you go to robot fights like daily now? Is that a weekly thing? Do you have a season pass? Hourly.
Speaker 5:Yeah. It's a lot. We just went to one this Saturday. Rec had one at Kizar Pavilions. Was kinda like their biggest one yet.
Speaker 5:We've been filming like oh, my Meta Glass is died. We've been filming a documentary more or less.
Speaker 2:So Okay.
Speaker 5:So kind of like from the very beginning of the robot fights all the way through. So, yes.
Speaker 1:The How do you think of the timeline? Is this a ten year project? Because my expect I haven't been yet, but the the my expectation, tell me if I'm wrong, is that it just sounds like the craziest, most awesome thing ever and yet the robots today are still kinda making progress. And so the actual action in the moment, it's probably a fun place to like hang out with friends and watch but it's not yet like, oh, I'm I'm sweating. This is like It's better than a
Speaker 5:little little comical at times. But, you know, it's getting better The
Speaker 1:idea is that the documentary would show over time. Yeah. Then Cool.
Speaker 5:Well, I think we wanna do this is like this is kind of the cool thing. So we make we do make films for Yeah. Netflix, HBO, all that stuff. But I think we're gonna try something different here where it's like a documentary that's that's living and ongoing. Yeah.
Speaker 5:So I think we're gonna we're gonna take what we filmed for the last six or seven months, put that out as like chapter one of the rise of the robot fights and then just keep following it along, which is I mean, we have internal not like fights, but just the best strategy on how to release some of this stuff. I think it's kinda cool. I think you can do different things now that we have our own distribution Yeah. And and kinda play with the format a
Speaker 2:little bit. How do you actually like, how do you actually process watching robots fight? Is it like a scary doomer? Are you actually entertained?
Speaker 5:No. It's pretty fun, man.
Speaker 2:It's pretty
Speaker 5:fun. Everybody like at this last fight, you could tell there were a lot of people who had never seen one before. I mean, it's it's a spectacle of it all. There is there was an element where the first round went then a bunch of people cleared out because I think they were just once they've had their fill, this it has to get better. Right?
Speaker 5:But they
Speaker 1:Well well, I think what they should do is is do the robot like extreme sports.
Speaker 4:Mhmm.
Speaker 2:Because
Speaker 1:I think before you get fighting, it's like robot cliff jumping, watching a robot jump or or or base jumping. Right? Watching a robot hurl itself off a cliff and then be like trying to pull a parachute and like, if whether it works or not, it's like pretty pretty cool.
Speaker 5:I'm with
Speaker 2:you. I do think Or big
Speaker 1:wave big wave surfing, robot big wave
Speaker 2:pretty good?
Speaker 5:That the fight is getting like better pretty quick. And now, so the you know, when it first started, they had these little miniature robots and that was super goofy because they barely hit each other and fall over. But, you know, now they're getting They're getting tall. This this year, in the next five months, we'll see like the six foot two.
Speaker 1:Did you used to go to the the Battle Bot shows back in the day? No. I have some good memories there. Those things were lethal. Yeah.
Speaker 1:Those things those things like even
Speaker 2:just jumped from four eleven, four four to to to five eleven. Yeah. Yeah. That's pretty tall.
Speaker 5:So we just filmed it's kinda well, I won't tell the backstory but we have filmed there is a six footer in America. Six
Speaker 2:footer in America.
Speaker 5:That I think is the only six in Yeah.
Speaker 1:That
Speaker 2:make you feel the AGI the AGI more than visiting a big data center?
Speaker 5:I mean, the cool thing I okay. I just I find this goal as like a cultural phenomenon. Yeah. Totally. It's this San Francisco sort of art meets tech
Speaker 4:Yeah.
Speaker 5:Kind of thing. But then I do it resonates with me because it is this physical instantiation of AI and even though it's not as cutting edge as some AI solving a physics problem Yeah. Maybe there is this you do feel the AGI because there's like something to it and there's this energy and that's what like drew me to the story from Yeah. The
Speaker 1:Are documentaries just like a get rich quick scheme? Break down the business model.
Speaker 5:Cannot cannot count all the cash, man. I I always laugh because people are like
Speaker 1:Well, sounds it sounds like, oh, I work with Netflix.
Speaker 2:Work with
Speaker 1:HCL. You sound like a like you're you sound like you're in mogul mode. But the reality is like you have to invest years of your time and it can, you you know, obviously it's a business, otherwise It's risk. You wouldn't be investing in it. But break down the realities of like what it actually takes Yeah.
Speaker 1:To create a documentary, sell it, monetize it.
Speaker 5:It is hard. It's probably harder than ever maybe. I mean, we went through this the glory years of all the streamers lighting up Okay. And then they couldn't get enough content.
Speaker 4:Yeah. They
Speaker 5:were they were overpaying for everything. And so you could actually you don't make money like a scripted project that really hits, but you could do pretty well with a documentary if you really had something good and now it's brutal. Know, Netflix, most of the streamers kind of cap what they're willing to pay and it's not a very high numbers like call it like $2,000,000. And and so you have to get your budget under that. You're following something for could be one year, it could be six years
Speaker 2:Yeah.
Speaker 5:And to spread all that work and money Yeah.
Speaker 1:Over all the of the best Yeah. Some of the best stories. I mean, it's so hard because there's companies today where if you knew where they'd be in five years or ten years, you'd be like, we need to have a camera Totally. On this team every single day. Yeah.
Speaker 1:But then they could just peter out and it doesn't become interesting and then you've just kind of lost.
Speaker 5:Which is what we kind of try to do. I mean, try to place these bets But
Speaker 1:you're kind of an you're acting as like an investor.
Speaker 5:Yeah. Because like the robot project, I'll go as a reporter first and be like, oh, there's kind of something here and this this character, this person is really interesting. Let's like follow it for a bit and then we can do sort of shorter episodes and then, you know, once you really think you're honest so that you can go all in a bit more. So we have like our own money to invest in the projects that we really care about and then sometimes partner with
Speaker 1:Have you pro have you cared at all about what's happening with Warner Brothers Discovery? Is that do you think that actually impacts the documentary market? Is consolidate the
Speaker 5:Yeah. Number of is more consolidation They're gonna be like,
Speaker 1:hey, was 2,000,000 last year and now it's like one and a half. That Which is like kind of the concern?
Speaker 5:I mean, continued consolidation is a real problem. Then, I mean, there's this there's this part where like tech companies own every major media company now and and it's a real issue for some of the stuff we want to cover because it's like, does it compete with this? Is this offensive to all the tech people? And so it really limits, you know, to some degree the scope of what you can cover.
Speaker 2:Hadn't thought about the even even like, if you just wanna make a documentary about like the the the Apple Vision Pro, how it was made, whatever. And it's like, if it looks if it looks damaging to Apple and then you sell it to Netflix, well, like, those two companies compete and then they could even if there's no comp even if there's no true conflict of interest, people could be like, well, you know, well, was there, you know?
Speaker 5:You know, is Netflix gonna buy some doc about Apple? Oh, yeah. They might
Speaker 2:not wanna play as Apple.
Speaker 5:Then you have you're always after the most interesting people. Right? Yep. So you've got this list of whatever the top Yeah. Twenty, thirty tech figures that you might wanna follow for a doc.
Speaker 5:Then it's like, who whose alliances are they on and who hates them and who, you know, who fits in where? You're just trying to make a movie and have people watch it. Yeah. So
Speaker 2:Talk about scoops and the importance of scoops in making a documentary. That feels like they can help a lot. You also have these multiple touch points. So I could imagine you, like, interviewing someone and then being like, that would go well in a documentary. Maybe I wanna hold that.
Speaker 2:I like, how do do scoops work in this?
Speaker 5:That's horrible. I mean, because I do books and documentaries and
Speaker 2:it's it's like So you get good scoops and you have to wait a year. I know you're sitting on some
Speaker 5:You're like, you have to sit and then you just when I when I see these open AI
Speaker 1:You gotta hide your yep. Well, you gotta hide your notes from Kylie too because she's like, that's a scoop
Speaker 5:No. Right
Speaker 2:No. And now you're
Speaker 5:the same we're on the same team. We'll figure all that out. But no, I mean, it is it is really hard. Like, sometimes you're sitting on something and you you know I remember when I did the Elon book Yeah. You know, there was this anecdote where Google almost bought Tesla and I had that like two years before the
Speaker 2:Yeah.
Speaker 5:Book was gonna come out. You're just like praying to God nobody nobody happens upon this in in the meantime and the documentaries are the same way in a perfect world Mhmm. If you do manage like right through that then, yeah, you you know, you have not only this long form piece that's that's revealing a lot about these people, but you've got some Yeah. News with it to help. When I when I released that story ahead of the book on Bloomberg, that's what shot the Yeah.
Speaker 5:Elon book like up the Amazon charts before How it came
Speaker 2:do you think I've always been struck by the fact that in the Netflix app, in the iTunes, like, the Apple TV app, it's very hard to, like, screen record and share because they don't want you stealing the whole thing, which makes sense. But it also hurts, clippings.
Speaker 10:Yeah. Yeah.
Speaker 2:Whereas if you share a a story, you could screenshot it, and that can go viral. With books, it's very important to, like, pick a good excerpt and then run that in a magazine. Right? Like New York Mag got the first chapter of this new book and they distribute it and whatnot. I'm wondering how you're thinking about how documentary promotion might change in the future.
Speaker 5:I mean, it's funny because the we're living in these two worlds right now. We're we're doing stuff on YouTube Yeah. On our channel and the the doc world. And the second you go into the doc world is a lot like the publishing industry. Things get very traditional very quickly and there's a lot more reluctance to try things out.
Speaker 5:And they once you've signed over to Netflix, I mean Yeah. They kind of own your thing and you're a little bit at their mercy of how they want to do it. So it's not something I honestly that I've thought a ton about and I haven't seen, you know, like an incredible amount of creativity yet Yeah. On on embracing that.
Speaker 2:Are there any traditional Hollywood executives that look at your YouTube experience as a feather in your cap. I'm just thinking about that Neuralink documentary that you did. Well, it was a YouTube video
Speaker 5:Yeah.
Speaker 2:Went super viral. And the structure of that video was amazing because it was all the great stuff about an Ashley Vance, documentary video production.
Speaker 5:Right.
Speaker 2:But then it had a hook. It had, oh, Elon's gonna call. It had the had it like opened loops. It was like also a Mr. Beast video, you know?
Speaker 2:And that was the best of both. And I and I imagine that I you probably saw Matt Damon and Ben Affleck on Rogan talking about second screening and how more and more Netflix executives want you to retell the plot Yeah. 25 times. But if you're coming from the YouTube world, you can say like, hey, if it's holding retention on YouTube, like, know I can edit like that for you and you'll have similar retention. Is that interesting Well,
Speaker 5:I I mean, I think there's a massive clash going on right now. I mean, like, the guys filming us who make our show, we sort of at Bloomberg, we learned how to make a TV show Yeah. That was like an Emmy nominated Yeah. Side show for way way way less money than Netflix or Hulu would pay for a similar show. This was Hello World?
Speaker 5:That was Hello World. And then obviously we're doing that at core memory. But, you know, there's this economics that I think we figured out they work very hard is But one part of the second you sign up with a Netflix, the budget expands everybody's padding. Like, you'll get line items on a budget for landlines of like $15,000 because people are just trying to This is how Hollywood works. It's very strange.
Speaker 5:So you have these You've got this clash of finance from the old world Sure. And then the model of the new world. And so, you know, when I talk to more traditional Hollywood execs, some I think are not paying as much attention maybe to YouTube as they should, then there are some really big producers the second we started the company they called and they're like, dude, we want to kind of do what you're doing or we want to be part of what you're doing and rethink how we go about things. And so, I mean, I still think YouTube
Speaker 2:if, you know, it's been
Speaker 5:around what like twenty I still feel like it's it's this is very early days for how this is going to play out because I I think that is where you have the most flexibility and the distribution of the entire world. It still beats everything. Yeah.
Speaker 2:How do you think about Yeah.
Speaker 1:It would be nice if they bought documentaries. So they're like, we'd love to buy your for this creator payout.
Speaker 5:We flooded this idea.
Speaker 1:No. But I I think it I mean, one of the challenges of building a modern media brand, I think, like, you have the sub stack business, you could roll out if you could potentially lean more into YouTube at some point and build out a subscription business there Yeah. And you're kind of like splitting splitting attention which which can be tough.
Speaker 5:It's hard to figure out. And Substack, Substack's been great. Our stories do great but it so far I would say is like not a visual first platform and so putting stuff behind the paywall. It's been tricky but that's there has to be some way to figure this out where you are. You can't just give everything away and that's it's kind of fun now because we have all these different levers to play with and try to try to see where this goes.
Speaker 2:Yeah.
Speaker 1:How did you react to the different Super Bowl ads?
Speaker 5:Well, thank you guys for putting that core memory logo. Think we stuck it twice on the through some sort of missing Oh, Yes. Think we got it.
Speaker 2:No. Over
Speaker 3:there.
Speaker 5:Thank you. Thank you very much. I'm so I'm like, I was just happy that you guys did really good.
Speaker 2:We snuck the ad on Fox Business yesterday.
Speaker 5:I saw that.
Speaker 2:So that ran there. And then it snuck on to the billboard in in Times Square as well. You guys know who's been there.
Speaker 5:Like
Speaker 2:I think we're going to the Olympics next. We're taking these everywhere. You're coming with us.
Speaker 1:Everyone could
Speaker 5:see it. And I'm not just saying this because I'm in the ultra dope. But you guys are are just marketing geniuses. I mean, it was so smart when I woke up on x that morning. It was just every single person was was pushing it along and then and then I I did the same thing and no.
Speaker 5:I mean, I liked I don't know. I kind of like the World ad. I think people are so torn on World Yeah. How they feel about it. Totally.
Speaker 5:But I actually like that one. Yeah. Okay. And then I the Claude OpenAI. Yeah.
Speaker 5:I don't know.
Speaker 1:Wait. WorldCoin ran it at?
Speaker 5:No. No. The world yeah. World I mean, it's world now but yeah. Tools for Humanity.
Speaker 1:I didn't even see that they ran
Speaker 5:There was one about it was like, you know, are you human?
Speaker 2:Yeah. Oh, cool. Yeah. Yeah. That's somewhat of an optimistic message in a time when people are sort of AI skeptical.
Speaker 2:So you have a little bit of wind at your back when you go into the Super Bowl where people are probably like, this AI stuff, I
Speaker 1:don't know. So I have a question. Can you go to China for like a few months?
Speaker 5:I'm trying to figure this out. So we wanna do
Speaker 1:It's like I want your I want the Yes. I wanna I want I wanna feel like I toured China through your eyes.
Speaker 2:I sure got me like 99% of the way there. Only you can take me across the finish line.
Speaker 5:So I appreciate you saying that. We are trying to do this. I mean, we've filled the Hello World in China. When I was at Bloomberg, we had some difficulties with China that made it made it harder to get a visa for a period of time. And so now, I've been trying I actually wanna get in touch with I Show Speed because Yeah.
Speaker 5:I wanna know like what the visa Yeah. YouTuber for pure journalist visa situation is like. Yeah. Yeah, no, I 100% wanna go to the humanoid robot factories. I wanna go to BYD.
Speaker 5:I wanna do all that stuff.
Speaker 2:Very cool. Yeah. Great.
Speaker 5:We're definitely gonna go to India Yeah. This year
Speaker 2:Oh, cool.
Speaker 5:And shoot an episode which is already lining up. Yeah.
Speaker 2:Talk to me about storytelling. When you're in information capture mode, you're doing reporting, you're getting a ton of different facts and scoops. But then at some point, it needs to boil it down into usually a three act structure. Do you think in the hero's journey? Do you think in the eight part story circle?
Speaker 2:Do you think in act one, act two, act three, and then you're trying to map things to that? Or are you just hunting around and then when you get lucky, you're like, okay, the third act has happened. I'm feeling it. I'm ready to publish.
Speaker 5:There's always sort of an arc. Yeah. I don't know if it's not always the hero's journey, but yeah, you're not wrong. I mean, lot of the people I'm chasing are these eccentric inventor types on a quest and and trying to figure something out. I usually when you do the magazine features, if it's if it's like 5,000 words in length, those usually my first thing I think about is the character, spending time with And then, you know, those break down usually into, like, actually four or five, six sections.
Speaker 5:And for each section, I always think about it like a documentary or a TV show. You want something to open. You have to, like, keep momentum for the reader because you're asking them to stick with you for a while. And so those are the bits that I always think about. So, you know, you set up the state of play in the first act or you're you're taking someone into some really weird world through an anecdote.
Speaker 5:And then and then, yeah, you're going on this this journey where you're getting into more in more detail. I always it's like my fatal flaw, maybe. I I short shrift the end. I spend so much time on the beginning, and then we should obsess about the ending as well, but I always kind of just get there and then figure it out on the fly.
Speaker 2:It's really hard because, like, in in many ways, the the third act of the Elon Musk story is, like, the SpaceX IPO. Like, that's the final boss. It would be that that ties it in a bow in some ways. Yeah. So if you're like, well, I'm not gonna wait fifteen years, so we're finding a different third act.
Speaker 2:I found this with the I did a a piece on, Parker Conrad and Rippling. Incredible act one starts Zenith or starts Zenithits. Right? Yeah. Gets fired, Got revenge story.
Speaker 2:Starts the second company. And then it's like, okay. Well, they're building building building. And it's like, what's the third act? They gotta take the company public.
Speaker 2:Yeah. Hasn't happened yet. I'm sure it'll be successful. But it it doesn't tie itself in a in a in a bow with, like, the dramatic third act.
Speaker 5:The hardest thing Yeah. About the for the long form stuff we do, whether it's a book Totally. Magazine story or a documentary is you're doing real time reporting on tech and it's always changing so fast. Yep. And then like on the Elon book, I had to pick, you know, you just have to pick a moment where you're like, okay, this is this is we're gonna button this up.
Speaker 5:Same thing on the last book. And and so, no, I mean, that part's really hard, but it I battle with this all the time after I finished the Elon book for a whole bunch of reasons. I was like, I'm only writing about a dead person next time. But then I I like that. I like only get excited about
Speaker 2:Well, shocking book is ready to go. You you know it off the top of your
Speaker 5:head. One that one is good. There's a couple of people who have swiped at that one. Okay. But, yeah.
Speaker 5:No. I mean, it's I get excited when I walk in places like this, when I walk into factories and I kind of feed off that. So I have it's it's like I have no choice but to chase what I'm interested in, but it's hard to figure out what
Speaker 2:Elon the Elon book is a biography. What is heaven when the heaven heavens went on sale?
Speaker 5:Which is in your lobby.
Speaker 2:I signed it. Multiple copies. Signed Father's
Speaker 5:Day signed it. That's how we first met. It's it's
Speaker 2:I sent him a picture.
Speaker 5:I bought a box. So we made a movie based on it called Wild Wild Space, which is on HBO. But it's a book. It's kinda like a book, nonfiction book tracing the underbelly of of new space being born. And so we go along with a couple rocket companies Yeah.
Speaker 5:Some satellite companies, but it's it's less Elon, less SpaceX.
Speaker 2:Is it on an ensemble cast? Is it a tour of an industry?
Speaker 5:There's like four there's four distinct sections Yeah. That would for sure tell you some of the history of space and then fully bring you up to speed on on like the rise of commercial space. But yeah, we go with Rocket Lab which is after SpaceX, the second most successful rocket company. Planet Labs, changed the face of satellites. Firefly is one of my favorite stories in the book.
Speaker 5:I hang out with this Ukrainian dude. We go to Ukraine. We're drinking scotch at Vandenberg Air Force Base down down the road, all kinds of adventures, and then Astra, which, you know, is still going. God bless them. And and is was trying to make the smallest, cheapest rocket possible.
Speaker 5:And so I spent six years on that with Astra. Overnight. Was like was there. I was with Astra when it was like four dudes in a room trying to get the engine to burn for the first time all the way up to when they flew to orbit for the first time. So I think, I mean, mostly that book is it's meant to like immerse you in that.
Speaker 5:Yeah.
Speaker 1:Did the moon, Mars to moon pivot from SpaceX, did that surprise you or given
Speaker 5:I'm wondering if you guys I'm still, like, processing this in some ways. I mean
Speaker 1:But, like, it didn't come out during the biography No. No. No. All the conversations.
Speaker 5:No. No. I mean, Elon even until recently, it's full Mars. You know, and
Speaker 1:And do you think it's because they're going they're going public and you now as a public company or or a soon to be public company you can't be messaging like, we're going to Mars, we're going to Mars, but then we're actually
Speaker 5:I think Elon probably could still keep messaging that because he The Roadster for ten years.
Speaker 1:Yeah. Yeah. The Roadster, but yeah, 10 public markets are less excited about what you're gonna do in, you know, a decade or two decades versus what are you gonna do for me right now? Like, take me to the moon.
Speaker 5:I mean, oh man, we could talk about this for a long time. You know, the Mars thing was always part of Elon's genius, I think, because it sounded completely insane Mhmm. To most people. And yet, if you were into space and you
Speaker 11:were
Speaker 5:young, there were a lot of people who actually wanted to go do that and it was part of building this religion, very aspirational thing that made you want to go to SpaceX, that filled you with like all this passion for what was going on. Even Gwen Shotwell, I mean, she's the she co runs the company of Theon. That was that was like her quest. That's what she wanted to And so it always had this like mystical overtones, you know, which is the same way with Tesla of creating this big climate change sort of revolutionizing technology. So in some ways I feel like he's come, pardon the pun, back to Earth a little bit with like with with this.
Speaker 5:Right? Because it's it's slightly less I mean, it's still you're building a colony on the freaking moon. But it's it's it's like it's slightly less aspirational. It's much more practical for all the reasons you lay out. I mean, clearly, the US government wants to try to beat China to the moon, although I don't think we will.
Speaker 5:But that's where the US government's attention and money is, is on the moon. And with all the space data center stuff, I mean, all this interplay between Mhmm. Building these layers of infrastructure. So I think I think he's he's chasing money and what makes sense in this near term.
Speaker 1:Yeah. It's somewhat It's more pragmatic. Less sci fi.
Speaker 5:It made me a little sad, man, like canceling the Model S, you know, stop stopping production on that Yeah. Along with this Mars thing. I mean, it is as someone who is like his biographer, I mean, it's it's a massive philosophical change and the Model S just represented that was the moment that Tesla actually became real and electric cars became real and like shocks, you know, it sold so many more than anyone had expected. So these are these are like really momentous things. I think Elon's really practical.
Speaker 5:I think he's all in on AI. He needs money to fund that. SpaceX is like this sexy thing that people get excited about and you can use it to to raise money for other things. And so, you know, I think he's just being very very practical. And I think probably it's the the pressure and the immediacy of this AI race that might be making him make statements and decisions that normally he could he could put off,
Speaker 2:I think. Yeah. No. That makes a ton of sense. Time to plant the bomb.
Speaker 2:We're getting out of here. You can close the show out with us. I wanna hit the gong. Two best selling books. You wanna hit the gong?
Speaker 2:Mom has been planted. Leave us five stars on Apple Podcast and Spotify. Go to tbpn.com for our newsletter. Go to corememory.com for your news Please, please. Your sub stack.
Speaker 2:YouTube channel. Follow Ashley on X, YouTube, podcasts everywhere. Go buy the books. Go buy the books.
Speaker 1:Buy them all. Buy a 100 copies. Buy
Speaker 5:Yeah. Can't buy
Speaker 1:we're rosy.
Speaker 2:Buy a 100 copies. Tomorrow at 11AM. Goodbye. Nice
Speaker 1:work, Bryce. Nice work, I'll see you on the next you on the next one.