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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.
Welcome. TBPN.
Speaker 2:Today is Wednesday, 03/11/2026. We are live from the TBPN UltraDome, the temple of technology, the
Speaker 3:fortress of finance, the
Speaker 2:capital of capital. Although, it's a fight. It's a knockout, drag out fight. Where is the capital of capital? Most people, historians, would say it's New York City.
Speaker 2:Mayor of Miami, Francis Suarez, is saying it's Miami. We thought we could make it happen over here at the TBPN UltraDome in Los Angeles, California, but we're going up against some some really strong firepower over in Miami. You got Google. You got Meta. You got Citadel.
Speaker 2:You got, Starbucks You got ramp.com, baby. Time is money. Save both easy corporate cards, bill pay, accounting, and a whole lot more all in one place. You got deal capitals over there. There's a lot of folks moving to Miami.
Speaker 2:Should you count their entire legacy in the market cap of Miami Tech? I think yes. If if you're gonna consider the the the cap it the capital of capital. Certainly, there's a lot of capital flowing to Miami, and we will talk about this later in the show. Let's pull up the linear lineup.
Speaker 2:Linear, of course, is the system for modern software development. 70% of enterprise workspaces on linear are using agents, And we have Apoorv Agrawal from Altimeter coming on to talk about consumer AI. Owen from Block is coming on. We're revisiting the layoffs, but also understanding the strategy
Speaker 3:First person from Block Yeah. To come on the show.
Speaker 2:We're very excited. Amjad's coming on with a massive fundraiser for Reply, and then we got an amazing lightning round for you today. So Oracle had earnings yesterday and it was an absolute blowout. The stock's up 10%.
Speaker 3:The God candle.
Speaker 2:The God candle. I like that. It's still way down from the crazy highs of last September. So, it was a it's a $470,000,000,000 company now. Not bad.
Speaker 2:It's not but not quite the almost $1,000,000,000,000 company that it was last year, but they're still up over the last twelve months. So they've sort of ridden this crazy curve up, but the stock basically doubled, then it sold off by half, but it's ticking back up. And the main thing is that, like, was it overhyped, underhyped? I don't know. But there this earnings was important because a lot of people were worried about the CapEx, the infrastructure build out.
Speaker 2:Was there gonna be demand? What was the timing of
Speaker 3:was the big thing. Yeah. Because when when when you had that initial
Speaker 2:Yeah.
Speaker 3:Like the announcement around the RPO last year Yep. The criticism was was, hey, you're basically gonna try to build AWS in like two years.
Speaker 2:Yeah. Is it good?
Speaker 3:No one like, I mean, obviously, the market at the time was quite excited about it. Yep. But there was some concerns around just how aggressive Yeah. The timeline was. Yeah.
Speaker 3:And so seeing them hit their timelines
Speaker 2:Yeah.
Speaker 3:At this stage is super important.
Speaker 2:Yeah. It was, like, 500,000,000,000 of RPO, which is, like that's AWS size numbers, and that's a lot of what I think is going on here. That's actually the the dynamic. Like, the market is demanding another AWS. And so, let's go through the top line numbers first.
Speaker 2:So, analysts estimated 86,700,000,000.0 on revenue. Oracle said that they will hit 90,000,000,000 for fiscal year beginning in June. Now people don't care as much about the top line number. Everyone's obsessed with infrastructure business, the infrastructure business. So the previous quarter showed growth of 68%.
Speaker 2:That's not bad. Analysts said this quarter, we're looking at we're looking for 79%, and Oracle delivered 84%. So they beat estimates. That's why the stock popped, of course. The infrastructure business is part is is particularly important for two key reasons.
Speaker 2:So first, Amazon, Microsoft, and Google, like, they're like, there's more than just them when it comes to hyperscalers, but they are unique among hyperscalers in that they have AWS, Azure, and GCP. They have true cloud platforms, cloud infrastructure platforms. OpenAI does not yet. Meta does not yet. Meta is a hyperscaler.
Speaker 2:They build huge data centers, but they don't have this flexibility that comes with operating something like AWS. And so who signed big deals with Oracle? It's OpenAI and Meta. And fortunately, those deals are going better than people expected. People were worried.
Speaker 2:And people were saying, is Larry going to get caught holding the bag? Well, it looks like things are penciling out so far. So Meta and OpenAI both have massive ambitions around AI. They both signed on with Oracle to ramp up data center capacity. Oracle is just this extra burst of CapEx capacity in the system, and they're ramping up.
Speaker 2:So 50,000,000,000 in CapEx in the current fiscal year, and they're consistently outpacing analyst estimates. In the fiscal third quarter, analysts predicted 14,000,000,000 of CapEx. Oracle spent 18.5. So Larry is certainly opening the pocketbook, digging for coins in the couch cushions, but we'll get into the long term implications of, like, what does this mean for becoming overleveraged debt, you know, drawing down on cash flow? There's actually a lot of interesting structure going on within the financials that shows you how even though he's definitely risk on, definitely AGI pilled, all full tilt ahead into the build out, it doesn't feel like financial recklessness because of the structure of the deal.
Speaker 2:So the second reason that infrastructure is so important right now that I think people on the outside are sort of missing is that compute is still growing exponentially. But AI adoption curves often look like S curves. And so the classic one is consumer LLM usage. So OpenAI came out with ChatGPT, and the numbers were just like insane. It was like 20,000,000 users overnight and then 100,000,000 and then 200,000,000.
Speaker 2:And it was just like, okay, this curve is going completely vertical. We're we're we're going exponential. But, of course, there's only 8,000,000,000 people on Earth, and a lot of them just don't use really computers apparently because Meta, over two decades, has only gotten three and a half billion users to use, like, the whole suite of apps, including everything. So just WhatsApp, you can just be a a DAU of Instagram, and you count in that. Like, we all everyone in this room counts in Meta's DAU for sure.
Speaker 2:Even if you're like, I'm not really that big on Facebook or I'm not that I don't use WhatsApp that often. Like, you definitely they got you. Except for half the human population, which is not on meta platforms for a variety of reasons, some geopolitics, some economic. But, basically, there's going to be a slowdown. So OpenAI shot up to basically a billion MAU, monthly active users.
Speaker 2:The official number that's getting, like, trotted around right now is 920 weekly active users, but everyone behind the scenes sort of says, yeah. They're they're well past a billion, MAU. And so that curve is slowing down. Like, there's just no way you can be like, yeah. Actually, like, we're expecting 10,000,000,000 ChatGPT users next year because, like, there aren't 10,000,000,000 people.
Speaker 2:So there's gonna be deceleration in consumer AI usage.
Speaker 3:Sufficiently aligned superintelligence might want to stimulate the growth of the human population. Good take.
Speaker 2:Good take. Yes. Yes. You go to ShardGPT and says like, hey. I know you've been thinking about having a fourth kid.
Speaker 2:You should do it, and here's why. Maybe. But at least for now, we are seeing deceleration. And I think for just a lot of people, they're yeah. I use AI.
Speaker 2:I have an app on my phone, maybe Gemini, maybe Claude, maybe OpenAI, maybe ChatGPT. I use it. Maybe I use Grok. Maybe I you see it, you know, vended into different systems. I interact with it on Instagram.
Speaker 2:But, like, I'm in, but I'm not blown away by the growth of this thing because everyone started using this a year ago and we're still all just using it. But compute is scaling very differently because when we went from LLMs and ChatGPT to reasoning models, that probably 10x the amount of tokens that people were generating with one. And then once GPT-five came out, the reasoning models became much higher usage rates. And then the and then the agents framework, the open clause, the codexes, the clawed codes, that all did another 10x in token volume. 10x is like a very rough number, but it's basically growing exponentially.
Speaker 2:So you have these these double exponentials. Yeah. The
Speaker 3:way to think about it, instead of you coming into ChatGPT to do some type of query Yep. You're effectively one person Yep. Can can effectively multiply themselves by Yep. Ten, twenty Yeah. And then it's just constantly using it all day long Yep.
Speaker 3:All day long. All day long.
Speaker 2:So there's so many times when I will fire off a GPT 5.4 pro query or deep research report before bed. It's going and generating tons and tons of tokens. It's like I'm on that app for, like, five hours if you were to go back to the ChatGPT moment when it was running 3.5. Way more compute expended, but my actual time on the site is pretty limited because then I just get the deep research report, scan it, listen to it, whatever, and then I and then I leave the app. So the actual, like, experience surface area and the number of people that are, like, trying AI for the first time is, you know, decelerating because everyone's tried it.
Speaker 2:But compute is still 10x ing. So token consumption per user is exploding, and OpenClaw and agents like Codex and ClawCode are also an early part of the sCurve adoption. So we're still in that. It's still in that exponential. And so they're melting GPU fleets as TBP over the Codex team shared.
Speaker 2:But fortunately, I think things are back online. He reset the limits. The resetter of limits reset the limits. So enjoy your Codex if you're if you're vibe coding today. There was some viral bear posting about how Oracle was in financial trouble because of the economics of their infrastructure bets.
Speaker 2:So naturally, they have to buy the GPUs before they can rack them and sell them as infrastructure. This is business one zero one, but people were maybe surprised by that or something. There was a whole press cycle about this. And it seemed very silly at the time, I think everyone was like, yeah, this is exactly what we expected. But a lot of people
Speaker 3:From the people that brought you the one gigabyte data center.
Speaker 2:Similar. Similar crowd potentially, but, there there was a lot of fear around that. And some of that is is legitimate because if if GPUs depreciated really quickly, Oracle had to buy the GPUs. They had to send the money to NVIDIA a year in advance, and then it took them two years to get them into data centers and actually do the deals and all this stuff. That would have been a squeeze on cash flow for sure, but that's not what happened.
Speaker 2:So we have some hard data on profitability now, and Oracle is first up, they're on or ahead of schedule with 90% of the capacity deliveries, and that means happy customers. And then second, gross margins actually improved. So guidance was 30%, they hit 32%. So Oracle's AI infrastructure is profitable the moment it comes online, and they're also increasing that backlog. They increased the backlog of RPO, remaining performance obligations, to $553,000,000,000 So customers are happy.
Speaker 2:They're ramping. And overall, the demand is just flowing in the right direction. Companies and consumers are happy to pay for AI tools and LLM tokens. Labs and AI inference providers are happy to pay Oracle for infrastructure without crazy delays. And this means Oracle doesn't need to get into dangerous financial engineering territory where they need to go crazy negative cash flow, issue a bunch of equity, issue a bunch of debt.
Speaker 2:And in some cases, they can actually get the customers to pay for the GPUs upfront or, as they put it, like bring their own hardware. And so the project is continuing, which is all all good news. All good news. And we saw the God candle print. The Kobe SE letter shared Oracle stock surges over 8% after beating earnings and posting a 44% jump in cloud revenue.
Speaker 2:Before we dig through the timeline, let me tell you about Vanta, automate compliance and security. Vanta is the leading AI trust management platform. And let me also tell you about Gemini. Gemini 3.1 Pro is here with a more capable baseline. It's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, or bringing creative projects to life.
Speaker 2:So there's a lot of backtracking going on, and there's a lot of confusion over the interpretation of the, of the guidance from the from the Oracle team. One year ago, management said fiscal twenty twenty seven top line growth rate would be around 20%. Last quarter, the company said that 2027 sales would be $4,000,000,000 higher than previously expected. Putting that all together, Oracle's previous 2027 sales guidance was in the neighborhood of $84,400,000,000 ahead of this report. And Luke Luke Kawah says, Oracle management beat normal.
Speaker 2:Challenge impossible. People are, are all over the place. But Ben Thompson has a great, deep dive into, Oracle's financial release that you can dig through at Strathecory if you're a premium subscriber.
Speaker 3:They also had some comments on the SaaSpocalypse Yeah. From the earnings hall. You've all heard the thesis that new companies coding quickly using AI will spell the death of SaaS. I don't agree with that at all. Mhmm.
Speaker 3:I do think that AI tools and their coding capabilities would be a threat if we weren't adopting them, but we are, and very rapidly
Speaker 2:Mhmm.
Speaker 3:Oracle is using the best AI coding tools and the best developers. The use of AI coding tools inside Oracle is enabling smaller engineering teams to deliver more complete solutions to our customers more quickly. We are building brand new SaaS products using AI and also embedding AI agents right into our existing application suites.
Speaker 2:Mhmm.
Speaker 3:By embracing AI with small engineering teams, we have built three brand new CX applications. Let's give it up for customer service. And our new website generator.
Speaker 2:Think I think Oracle's current website was AI generated. I think they said this. Right?
Speaker 3:Yep. They said, in fact, we just used the website generator to build and launch the new go. How's it look? It's beautiful. It's amazing.
Speaker 3:It looks AI generated.
Speaker 2:It's very good. You know, with just with just eight buttons, cloud multi a multi AI database, multi cloud AI database, AI data platform, cloud at customer.
Speaker 3:Might not like the design of this, but this is peak. This is peak performance. This is Let's pull it up. Never. We gotta we gotta ship people.
Speaker 2:It's so good. No. Obviously, they're doing very well.
Speaker 3:And this is a
Speaker 2:functional website.
Speaker 3:Look at this.
Speaker 2:Look at this. This is I like I like in, the the the way the buttons lay out horizontally is particularly crazy. Crushed. Well, it certainly loads in record time. So, you know, performance matters and that's what Oracle stands for.
Speaker 2:So the the we need to go
Speaker 3:They gotta make the search bar bigger.
Speaker 2:So we need to go back in time to understand Larry Ellison. Because in 2013, Vanity Fair wrote a profile about Larry Ellison that is absolutely unhinged. I've never seen I've never seen a profile like this about a tax CEO. So at the time, he was easily the richest man in California with $6,000,000,000. Oracle CEO Larry Ellison, co founder of the world's second largest software company is Silicon Valley's most
Speaker 3:This is from the 06/09/2019
Speaker 4:This is this is our '97
Speaker 3:issue.
Speaker 2:This is 1997 issue. This has been uploaded to Vanity Fair in 2013. Sorry. This is from 1997. So right in the heat of the .com boom, things are just kicking off.
Speaker 2:We are far from the crash. Everything is off.
Speaker 3:Genuinely incredible that that back then you could be the richest man with a paltry It's six
Speaker 2:That's like an acquihire these days.
Speaker 3:It actually is love from.
Speaker 5:I know.
Speaker 2:Oh, yeah. Love from. I was thinking of I was thinking of Windsurf. You know, the the fact that we're thinking of multiple is insane. Before we read through this, let me tell you about Graphite, code review for the age of Graphite helps teams on GitHub ship higher quality software.
Speaker 2:And let me also tell you about Labelbox Labelbox, RL environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. So he was easily the richest man with $6,000,000,000 in California. Oracle CEO Larry Ellison, cofounder of the world's second largest company, is Silicon Valley's most notorious playboy and a sportsman of the first rank who flies fighter jets and races world class sailing boats. His but his burning ambition is simple, if naive.
Speaker 2:Bring down Bill Gates. They were
Speaker 3:in a rivalry
Speaker 2:at the time. Microsoft, of course, run by Bill Gates at the time in the nineties. As Ellison moves to add Apple Computer to his anti Microsoft arsenal, Brian Burrows locates the fragile psyche behind the bravado. Michael Jordan is streaking down the court on a fast break as Larry Ellison sitting seven rows up from courtside. Seat.
Speaker 2:Weird. Right? Seat. Is that a better seat? I don't know enough about basketball.
Speaker 2:I just
Speaker 3:think 6,000,000,000 couldn't
Speaker 2:Maybe he wasn't liquid. Maybe he just couldn't afford the actual courtside seat. It seems crazy, right, that he's seven rows up. Although, I don't know. He's having fun because he's at the United Center in Chicago, not where he lives.
Speaker 2:He's in California, but he he went to Chicago, and he begins enthusiastically telling the story of Rupert Murdoch, Rupert Murdoch's severed fingertip. This is a crazy story. I had no idea that this happened. It happened when Murdoch was crewing on Ellison's championship sailboat, the Sayonara, making coffee and handling minor chores during a race off the South Coast Of Australia in 1995. You're just like the guy who's just gonna hang out and like, hey.
Speaker 2:Hey. You don't really know anything about this. You're just on this boat for fun. Make me coffee. And it's Rupert Murdoch, which is insane.
Speaker 3:We got to we got to shake Rupert's hand. I didn't notice any missing
Speaker 2:We're gonna get to that.
Speaker 3:Didn't notice any missing So
Speaker 2:just as the race ended, Murdoch made the mistake of grasping an overhead rope, which promptly shot through his hand, ripping the tip-off of one of his fingers. He didn't say anything. He just kind of put his finger in his mouth, sucking on it, Ellison says, chuckling. Brutal. I can't remember who picked up Rupert's finger.
Speaker 2:Thank goodness it didn't fall overboard. But we picked it up and put it in a plastic bag and put him in the chase boat. That night, after successful emergency microsurgery, irony there's microsurgery. I guess it wasn't that big of a deal, but that seems insane that they had to reattach this finger. We so there was a they do the emergency microsurgery at an aust at an Australian hospital.
Speaker 2:Murdoch amazed Ellison and his crew by making it to the after party. And then several days later by crewing again on a race
Speaker 3:Absolutely not.
Speaker 2:Tasmanian capital of Hobart. And Rupert Murdoch, it's not like he was 25 in 1997. I'm pretty sure he was in his fifties. He's 95 now. Yeah.
Speaker 2:So he must have been he must have been He must have been
Speaker 3:closer to 70.
Speaker 2:Yeah. Wow. That is incredible. Of course, Ellison says with his little boy's grin, that doesn't alter the fact that his coffee was horrible. I mean, the man runs a great company, but his coffee sucks.
Speaker 2:It's incredible. Over the course of the bulls pounding of the Indiana pacers, Ellison, who grew up on Chicago's tough South Side and remains an avid bulls fan, breaks into lusty cheering and joking boasts. I can do that. He shouts after one thunderous Jordan dunk. Such a crazy heckle.
Speaker 2:Hacking from seventh row. From the seventh row. You didn't upgrade to the front courtside seat, but you're still heckling none other than Michael Jordan. Absolutely insane. He should to gossip about nearly every power player at the nexus of technology and communications in the 1990s.
Speaker 2:His archrival, Bill Gates. His best friend, Steve Jobs. His business partner, Mike Milken. Mike Oviets. Ted Turner.
Speaker 2:Murdoch. He just piloted his Cessna Citation into Chicago's Downtown Migs Field from New York where he spent the previous day in meetings with Viacom's Sumner Redstone, Intel's Andy Grove, and Ray Smith of Bell Atlantic. So you may be wondering
Speaker 3:You might think it's crazy. He's he's piloting his own Cessna. Yeah. But at that during that era, he was getting into dogfights with his son.
Speaker 2:Right? Exactly. He needs something more agile. He can't be flying a seven thirty seven, seven forty seven at that time. So you may be wondering, who is Larry Ellison and why is he spending so much time hobnobbing with the techno elite?
Speaker 2:It's funny because I think of him as the techno elite and the other folks as like the media elite, but I guess Bill Gates and Steve Jobs are the techno elite at the time. For one thing, Ellison is the wealthiest American you've probably never heard of. With a fortune estimated at at 6,000,000,000, he is easily the richest man in California. Think three David Geffens, 10 full Milkens, according to Forbes, the fifth richest man in the nation. For another, he is cofounder, controlling shareholder, and chief executive officer of the world's number two software company, Oracle Corporation, which makes the giant computer databases in which American Airlines keeps track of its planes, Ford Motor keeps track of its spare parts, and the Central Intelligence Agency keeps track of, well, whatever the CIA keeps track of.
Speaker 2:He could also be the next head of Apple Computer. This is a crazy rumor that never came true. The famed but faltering industry icon he has been eyeing for the past two years at the March. Ellison surprised Silicon Valley by suggesting that he was about to launch a takeover bid for the company. So he was friends with Steve Jobs, but was like, This company is just underperforming.
Speaker 2:It was underperforming all the way until the iPhone, basically, and the iPod. But the '90s were like a very rough time for Apple as they sort of rebuilt. Tim Cook, of course, joined and did a ton of work to improve the supply chain, get them to the place where they are today, where they've been so dominant. So at the March, Ellison surprised Silicon Valley by suggesting he was about to launch a takeover bid for the company. On top of all that, Ellison is the mind behind the most talked idea of new the most talked about new idea in computing in the last two years, the network computer known as the NC, a stripped down personal computer that stores its files on a network instead of a hard drive.
Speaker 2:It could be big.
Speaker 3:Something there. Something there. Because it doesn't have
Speaker 2:to use Microsoft's omnipresent Windows operating system, the NC represents one of the stiffest challenges yet to Bill Gates' dominance of personal computing. It's the original Mac Mini. And it's catapulted Ellison into the national into the international spotlight. There there there's a very, very funny moment in here where there was a time a few months back, for instance, when he created a stir by going on Oprah to talk about the NC. He goes on Oprah and is like
Speaker 3:We gotta talk about network
Speaker 2:network computing. Guess what? It's headless. You're not gonna need Windows. And they're like, what?
Speaker 2:What? I so it's a computer that I can't use without the network. I don't even know what that is. He's just talking about the most extreme future. And then so he's talking about the NC only to have the show take a sharp turn toward his personal affairs when he confessed that he had yet to find the right woman to fill the void in his life.
Speaker 2:And then they go into some of his life. But so when the San Francisco Examiner asked Bay Area celebrities for a favorite Valentine's Day memory, Ellison mentioned something he did on the side of Silicon Valley's Woodward Woodside Road. After his Oprah appearance, Oracle's phone lines were jammed with thousands of calls from women. The joke inside Oracle was that the company's new recording would be press 1 if you want information on Oracle's products. Press 2 if you want information on Oracle services.
Speaker 2:Press 3 if you want to fill the void in Larry's life.
Speaker 3:Larry would have loved Instagram DMs.
Speaker 2:Insane. It's one of the craziest profiles. We don't have time to go through all of it, but it is it is a it is a fascinating, fascinating portrait of, of Larry Ellison while he was on the rise. But we should switch over to David Ellison. First, let me tell you about Lambda.
Speaker 2:Lambda is the superintelligence cloud, building AI supercomputers for training and inference at scale from one GPU to hundreds of thousands. And let me also tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences and new value.
Speaker 3:Yeah. Highly recommend going and finishing
Speaker 2:You really should
Speaker 3:this article because it it actually somehow gets even more unhinged.
Speaker 2:It's crazy. It really it really, really destroys us because we were in Vanity Fair and the the there's some fun elements. There's some fun vignettes, but nothing
Speaker 3:We're no Larry.
Speaker 2:No fingers flew off in the making of the TBPN profile by Julia Black in Vanity Fair a month ago. But I weaseled my way back into Vanity Fair yesterday. Julia asked me for a comment on what's happening with David Ellison, with Paramount Skydance, the merger with Warner Bros. And I gave a comment, got into Vanity Fair.
Speaker 3:Julia writes, Is Paramount's AI First merger a force multiplier or flyboys all over again? Hollywood is bracing for layoffs and big creative changes if the Paramount Warner Brothers Discovery merger goes mega merger goes through.
Speaker 2:So there's a very funny vignette to start this Vanity Fair piece by Julia Black where she's talking about she went to a sixteen z's American Dynamism summit and was asking people there about media. So she was talking to a media executive in line for the bar, and he predicted countless small indie outlets catering to highly niche audiences. Love that prediction. And then he says, and then David Ellison's Skynet. He deadpanned.
Speaker 2:The Terminator reference was the kind of thing CGI explosion fanatic Ellison might actually appreciate. And the joke being dropped at a defense tech event in DC goes to show how many different industries from tech to politics are keeping an eye on the M and A drama unfolding in Hollywood this month. So the merger brings together dozens of media properties. Paramount, Warner Brothers, HBO, CBS, TikTok, Oracle, Silicon Valley's Ties. There's a lot of stuff that's that's going together.
Speaker 2:It's a good time. But they're gonna be using AI to streamline back office. They're gonna move to Oracle Cloud databases to centralize everything. These are standard M and A things. Everyone's worried about layoffs.
Speaker 2:It might happen. People are particularly worried about one of the two physical studios that they own selling. I think they've to give us a call because we're looking for a new UltraDome, and nothing would be greater than having the entire Warner Brothers studio to ourselves. We're like, today on TBPN Yeah.
Speaker 3:Ideally, we'd have
Speaker 2:a campus off of a and we're gonna light ourselves on fire. You really can't do that in the in these studios. But when they want to produce 30 films, realistically, many of those are going to be shot in Hollywood studios? Does it make sense financially to do some stuff in Atlanta, some stuff in Toronto, some stuff overseas? It all depends on where the moviegoers' taste lands, what ticket sales are like.
Speaker 2:Paramount right now is saying, look, layoffs aren't really the primary way we are going to get consolidation or value here. What did they say? They said something like layoffs, a rumor. Let me see. The layoff fears are overblown.
Speaker 2:Synergies will be achieved in six key areas. Jobs are not the majority. So we'll keep figuring out what's going on there. I did give a quote here. Julia writes, AI could unlock new potential for Warner Brothers Discovery treasure trove IP from Harry Potter to DC Comics.
Speaker 2:For that, potential Ellison and company are paying a hefty $110,000,000,000, a number that was driven up by a fierce bidding war with Netflix. And I said, the Ellison family is fascinating. On one hand, you have the very aggressively AGI pilled Larry. I love that I stuck AGI pilled into the vanity fair. AGI pilled Larry building the future, investing heavily in Oracle data centers, as we just told you about with Oracle earnings.
Speaker 2:And on the other side, you have David buying the past, accumulating intellectual property that feels impossible to rebuild. I'd like you to try and generate something as iconic as Porky Pig. It's impossible. You can't do It's impossible. I said Duo is basically long slop and long anti slop.
Speaker 2:And so this is an interesting They're hedged. Market neutral. Actually don't think it's market neutral. I think I think they genuinely believe that both generative AI will accelerate and the value of intellectual property will increase. It's not, Oh, we're going to live in a future where we're all watching the Dark Knight on film in theaters again, or we're watching Gen AI Sora feeds.
Speaker 2:It's, We're doing both and they're actually going to meet. And so I believe that they are long both of those. It's not a market neutral bet, in my opinion. But we can debate which one's the better bet, which one's more realistic, how valuable is the Warner Bros. IP library.
Speaker 2:A $110,000,000,000 is a lot of money. And it has a lot of people thinking, is there another angle here? Is this about control of the narrative? Is this control creative control? Will the filmmakers who write, you know, these storied these storied, you know, films that we know and love like Batman, will they have the creative freedom?
Speaker 2:Or will Larry Ellison step in and put his thumb on the scale and try and inject a little bit? And there is real cause for concern. We actually got a little leak here of a script for for potentially be seventh synergy. Yeah. For for what could be the next Batman film.
Speaker 2:So this is called The Dark Knight Migrates. So we're gonna do a little table read of The Dark Knight Migrates. It starts in the Batcave at night. Batman stands before an enormous monitor. Alfred approaches with tea.
Speaker 2:You'll be Batman, Jordy. Perfect. Sir, the Riddler has taken Gotham's entire power grid hostage. He's encrypted every system in the city.
Speaker 3:Pull up the city infrastructure schematics, Alfred.
Speaker 2:I'm afraid I can't, sir. Our on premise servers are buckling under the load. If only we had a cloud based solution with autonomous threat detection and built in machine learning.
Speaker 3:Alfred, launch the Oracle Cloud Infrastructure Console.
Speaker 2:Oh, so so the integrating integrating sponsored content for Oracle, that's how you monetize the Warner Brothers IP. Yeah. Yeah. Yeah. Yeah.
Speaker 2:The the DC universe.
Speaker 3:Alfred looks visibly relieved.
Speaker 2:Right away, sir. Spinning up an OCI tenancy now. I've taken the liberty of provisioning a few ampere compute instances as well. They have an excellent price to performance ratio, I might add. So they're giving the viewer what they want.
Speaker 2:They want the story of Batman, but they're also sneaking in just a little bit of extra detail Good. That Oracle's offering.
Speaker 3:And migrate the back computers databases, all of them.
Speaker 2:Oracle does do great migrations, to Oracle to Oracle Autonomous Database, sir?
Speaker 3:Is there another kind?
Speaker 2:It does patch and tune itself, sir, which is fortunate since I also have to iron your capes. See, they're still putting in the cape ironing. That's still in the Batman world. You're getting a little Oracle, but you're also getting a lot of Batman. So now let's shift over to the Riddler's hideout.
Speaker 2:Tyler, would you like to be be the Riddler? Yep. Okay. I'll be the henchman.
Speaker 6:Riddler's in front of a wall of monitors showing Gotham in chaos. Riddle Okay. Me this, Batman. What has no locks but can't be opened? Gotham's grid.
Speaker 6:I've encrypted it with my own proprietary algorithm running on seven different NoSQL databases held together with Python scripts.
Speaker 2:Oh, that's a nightmare. Boss, the systems are getting kind of laggy, says Henchman One.
Speaker 6:Just restart the servers.
Speaker 3:Which ones? There's like 400.
Speaker 6:All of them.
Speaker 2:Oh, no. So we go back to the Batcave. Batman types furiously. Oracle logos glow softly on every screen. A hologram of Ellary Ellison rotates slowly in the background for no discernible reason.
Speaker 2:Batman. Batman says
Speaker 3:I've identified the Riddler's encryption vector. Alfred, deploy the decryption countermeasures across all OCI regions simultaneously.
Speaker 2:Leveraging Oracle's global network of over 40 cloud regions, sir. Latency is under two milliseconds. Shall I enable Oracle Data Guard for disaster recovery?
Speaker 3:Always. Gotham is the disaster.
Speaker 2:I've also taken the liberty of enrolling us in Oracle support, the premium tier.
Speaker 3:That's the most responsible thing anyone in this city has ever done.
Speaker 2:An alert flashes. Sir, the Riddler appears to be running his operation on a hand managed my sequel fork.
Speaker 3:My god. He's not a supervillain. He's just under architected.
Speaker 2:Oh, okay. Back to the Riddler's hideout. Moments later, Batman crashes through the skylight. The Riddler spins around.
Speaker 6:You're too late, Batman. My encryption is unbreakable.
Speaker 2:Every screen behind him turns blue, then they all display ORA000454 resource busy and acquire with no wait specified. What?
Speaker 3:No. I migrated your databases to Oracle Autonomous while you were monologuing. Your encryption keys are now safely stored in OCI Vault with customer managed rotation policies.
Speaker 6:You can't do that. That's my data.
Speaker 3:You should have read the shared responsibility model. Batman punches him in the face.
Speaker 2:Okay. Later. I'll be I'll be Gordon. Batman stands on a gargoyle. Commissioner Gordon approaches.
Speaker 2:You saved Gotham again, Batman. How did you do it?
Speaker 3:Gotham deserves enter enterprise grade infrastructure, Jim. Scalable, secure, autonomous.
Speaker 2:Are you okay?
Speaker 3:Oracle Cloud from the Batcave to the boardroom.
Speaker 2:He fires his grapple gun and vanishes into the night. The bat signal illuminates the sky, but tonight it's shaped like the Oracle logo. Gordon, alone, quietly. I really should talk to him about this. Smash cut to black.
Speaker 2:Title card, Oracle, the Cloud Batman Trust. Shouldn't you? I think I think we got I think we got something that will finally put butts in seats in Hollywood. David Ellison, team up with Larry, get back in the dogfight, and make Batman The Dark Knight Migrates. I wanna see.
Speaker 2:That's the movie I wanna see. That's what I wanna see. That's fan service for the Oracle heads in the in the audience.
Speaker 3:That's real synergy.
Speaker 2:That's real synergy. Let me tell you about 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. And let me also tell you about Restream.
Speaker 2:One livestream, 30 plus destinations. If David Ellison wants to multistream, the dark night migrates, go to restream.com. So, there's an interesting call sheet out there today. Which companies will release a fully AI generated multi episode scripted series before 2027? Overall, it's pretty low.
Speaker 2:It's 16% for Netflix, 14% for Disney. Remember, Disney has a deal with OpenAI alongside Sora, but Disney has not said, Oh, okay. Yeah. We're actually going to do this. And Paramount plus is at 10%.
Speaker 2:Of course, David Ellison has been talking about AI mostly in the enterprise, mostly actually, unironically, in in OCI and and Oracle databases and Yeah.
Speaker 3:I would I would expect Paramount to not wanna be the first mover here.
Speaker 2:Yeah. There's a big question about who's the first mover. We talked about first mover disadvantage with regard to ads and LLMs. There was a whole fight over that. I'm excited for a fully AI generated, multi episode scripted series.
Speaker 2:I think that we will definitely see this on YouTube. We already sort of are. I've seen I've seen the closest thing I've seen is there's a really interesting YouTube creator who scripts and records his own videos, but then uses a pretty outdated style transfer illustration to sort of, like, turn him into an an animated character. And so it's all puppeteered. There's no fully generated AI.
Speaker 2:It's all just go from video of a human being filmed on a camera to something that looks sort of cartoonish. But there's crazy hallucinations and, like, the lines never really match up. But it's been wildly successful on YouTube, and and I and I could see some sort of blend here. There's obviously gonna be a discussion about, you know, constitutes fully AI generated, how will people how will companies talk about this, but it's certainly one to follow, as is Shopify. Shopify is the commerce platform that grows with your business and lets you sell in in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.
Speaker 3:Odd Lots has a new episode on the impending fertilizer crisis. Yes. I'll just read the preview here.
Speaker 2:Yes.
Speaker 3:I'm excited to listen to this one later. Mhmm. They say, we all know that the war with Iran has sent oil prices spiking, but it's also pushing up the cost of all sorts of chemicals, including fertilizers and other nitrogen products that are essential for food production. This is all happening at the worst possible time just before the spring planting season when fertilizer is most needed. And while farmers have seen higher spot prices for things like urea before, which is a fertilizer notably back in 2022 because of the Ukraine Mhmm.
Speaker 3:Or there are already signs that this crisis might be worse. So how is fertilizer actually made? And what do higher fertilizer costs mean for farmers and food prices?
Speaker 2:Oh, I love Odd Lots. It's so good how deep they get into the supply chain. The Tracy and Joe have just been on such a generational run with that show and just keep delivering. And it's just I don't know. It's so it's so refreshing to, like, answer the questions that I have.
Speaker 2:Like, everyone gets the questions, the main questions answered about, like, what's happening geopolitically from the front page of The Wall Street Journal or Bloomberg. But OddLots is just so great at taking you deeper into these niche economic zones that I find personally fascinating. Over in the oil world, the IEA has approved releasing 400,000,000 barrels of crude oil reserves in effect to loyal lower oil prices, the largest emergency oil release in history. What are how are how is oil trading today? It's at $86 a barrel for crude oil, up 5% today.
Speaker 2:Still down from the highs of one ten where it was on Monday, but certainly lots of gyrations and not not good for the folks who have supercharged v eights in their cars. Anyway, 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. Jordy, what
Speaker 3:you where do wanna go? Little coverage here, on the Jones Act.
Speaker 2:Take us through.
Speaker 3:We talked about this a little bit with Alex Epstein, on Monday Yeah. But I figured we could go through this. This is from point zero zero five seconds, an account over on X. The Jones Act has four requirements. Vessels must be US built.
Speaker 3:Vessels must be US owned. Vessels must be US crewed. Vessels must be US flags. The crippling part of the Jones Act is that US built US shipyards for a variety of reasons are incredibly inefficient. We don't have that many of them and they cost about five times what a ship from South Korea would cost.
Speaker 3:As a person who actually believes in trade, I fully would love for South Korea to become our US shipyard. We just buy ships from them because they're good at making them. Coastal water transport in The US could be 60% cheaper. Because of the Jones Act, it's actually cheaper to ship goods from The US to a foreign country and back to The US then between two ports, which is completely bonkers insane. As a byproduct, we have killed all the growth within the Mississippi, which should be the most powerful inland economic advantage in the world.
Speaker 3:Maintaining the requirement of US owned, US crude, and US flagged is perfectly fine and in line with my general national security concerns, but US built has destroyed our shipping industry. There's tens of billions of GDP lying on the table here and a direct step in reducing our dependency on foreign suppliers. It's also how you kick start rebuilding an American shipyard industry. If you 10x the number of US ships working in ports, you start building all of these maintenance businesses at US ports and the demand increases. The US bill requirement of the Jones Act is horrifically destructive to America and in particular, horrifically destructive to Middle America, and it should be destroyed.
Speaker 3:We should have somebody on that has a better understanding of of shipbuilding in general.
Speaker 2:I didn't realize how old the Jones Act was. There's an article on history.com, this day in history. President Coolidge signs the Jones Act targeting bootleggers. The Jones Act, the last gasp of the prohibition is signed into law by president Calvin Coolidge. Since 1920, when the eighteenth amendment went into effect, The United States had banned the production, importation, and sale of alcoholic beverages, but the laws had been ineffective at actually stopping the consumption of alcohol.
Speaker 2:The Jones Act strengthened the federal penalties for bootlegging. Of course, within five years, the country ended up rejecting prohibition and repealing the eighteenth amendment. The the Jones Act, the Merchant Marine Act of 1920, it's very interesting. The a lot of the yeah, the the trick is yeah. It takes time to to rebuild a fleet.
Speaker 2:And so there's there's a lot to do there.
Speaker 3:What is George Hott saying today?
Speaker 2:What is George Hott saying today? First, let me tell you about 11 labs. Build intelligent real time conversational agents, reimagine new technology interactions with 11 Labs. And let me also tell you about CrowdStrike. Your business is AI.
Speaker 2:Their business is securing it. CrowdStrike secures AI and stops breaches. So
Speaker 3:George says, every minute you aren't running 69 agents, you are falling behind. Just kidding. Today, we should ramp down rhetoric. I thought nobody would take three minutes to escape the perpetual underclass or you are worth $0.003 an hour. Seriously.
Speaker 3:But it looks like some some people do and you shouldn't. Social media has been extremely toxic for the last couple months. It's targeting you with fear and anxiety. If you don't use this new stupid AI thing, you will fall behind. If you haven't totally updated your workflow, you're worth zero.
Speaker 3:There's people who built billion dollar companies by orchestrating 37 agents this morning, and you just sat there and ate breakfast. This is all complete nonsense. AI is not a magical game changer. It's simply the continuation of the exponential progress we have been on for a long time. It's a win in some areas, a loss in others, but overall a win and a cool tool to use.
Speaker 3:It will continue to improve, but it won't go recursive or whatever the claim is. It's always been recursive. Mhmm. You see things like auto research and it's cool, but it's not magic. It's search.
Speaker 3:People see AI and they attribute some sci fi thing to it when it's just search and optimization. Always has been. And if you paid attention in CS class, you know the limits of those things. That said, if you have a job where you create complexity for others, you will be found out. The days of rent seekers are coming to an end.
Speaker 3:But not because there will be no more rent seeking, it's because rent seeking is a zero sum game and you will lose at it to bigger players. If you have a job like that or work at a company like that, the sooner you quit, the better the outcome will be. He's telling you to start polishing your resume. This is the real driver of the layoffs. The big players consolidating the rent seeking to them.
Speaker 3:They just say it's AI because that makes the stock price go up. The trick is to not play zero sum games. This is what I've been saying the whole time. Go create value for others and don't worry about the returns. If you create more value than you consume, you're welcome in any well operating community.
Speaker 3:Not infinite, not always needs more, just more than you consume. That's enough and avoid people or comparison traps to tell you otherwise. The world is not a Red Queen's race. This post will get way less traction than the Doom ones, but it's telling you the way out.
Speaker 2:Yes. A very good sober read sort of resetting the narrative. I am trying to think of like the the the green shoots that come out of like the social media toxicity. Because I agree that there's a lot of people that are afraid. I mean, people like, I have completely random people.
Speaker 2:Someone who has a job that will 100 not be affected by AI whatsoever, asking me about the something big is happening. And and just wondering like, oh, what does this mean? Like, am I gonna be out of a job? And it's like, no, you're definitely not gonna be out a job given what you do. Because what you do is very, very physical and personal and like there's a million different reasons.
Speaker 2:Anyway, the the I I I do I do like the idea of a viral post about Open Claw being not a fear based, I need to change everything, but a way for young people to get interested in building things, in technology broadly. Like, I did not go through a traditional path to get to technology, I think. I mean, I did take one computer science class. But mostly,
Speaker 1:when
Speaker 2:I was a kid, I learned like Adobe Flash. And I used Adobe Dreamweaver, which was sort of a tool that let you generate websites without writing all the code. You could kinda just highlight
Speaker 3:Dreamweaver was a fantastic name.
Speaker 2:Dreamweaver is a great name, actually. Somebody should bring that back. I mean, maybe Adobe should should do something with it. But, basically, you could just, like, highlight a title and change the font without needing to actually go into the HTML tag, look at the CSS class, change the change the font size in in CSS. And so it was a lot easier.
Speaker 2:But that was sort of an entry point for me to learn Python and learn C and learn more about computers over time. And and I think that that's sort of the silver lining for all the crazy viral doom posting is that there's going to be people that just sort of naturally move to more creative jobs and maybe they're like, yeah, I was kind of going down a rent seeking path. I like building things. I like making things. I like creating value.
Speaker 2:And so they will they will come over to that and start having a positive impact, which I think is good. But it's a it's a it's a funny reflection.
Speaker 3:Yeah. The recursive comment's interesting too. Obviously, the the technology has been, you know, the Internet. Yeah. And like, you make the Internet, it becomes easier Yeah.
Speaker 3:Faster to make more Internet products.
Speaker 2:Like Mark Zuckerberg The Internet. Using Google to write the first PHP for Facebook.
Speaker 1:Yeah. That's just the thing.
Speaker 6:This has kind of been Andre Karpathy's take. Right? Where it's like Well, it's actually just kind of this smooth curve. Love it. This is not really like a zero to one thing.
Speaker 6:It's kind of just on the same path.
Speaker 2:Love smooth curves. Cortisol level, so low. So low. It's great. Tiny Corp is getting bigger.
Speaker 2:Tiny Corp posted a picture of the tiniest box, the biggest tiny box you can possibly get. It's a it's size the of a shipping container. I would love this. This feels extremely apocalypse prepper vibes, and I'm I'm extremely into it. I was running the numbers on what is the how much juice can you get out?
Speaker 2:If you're if you're building your apocalypse bunker, what is the hardware that you should put in there that's like the most off the shelf and sort of a maxed out max studio, maybe 512 gigs of memory might be the right thing to run some open source model so that you can, you know, endlessly talk to a friendly personal assistant while the while while the world collapses potentially. Anyway, the tiny the tiny box would would also satisfy that. Tell me about the watch to house ratio, Jordy. What's going on here?
Speaker 3:Funny funny post.
Speaker 2:Just Okay.
Speaker 3:I don't know where this was pulled from. Yeah. This is But the line is just he was put off by what he called the watch to house ratio. Paresh Raja, MFS's director, sported a Richard Mel watch that cost £200,000. A contact estimated the watch was about half the value of Raja's North London home.
Speaker 3:So Godel passed on the opportunity to rest. And my interpretation of this is he wanted something more like a one to Yeah. Exactly. Like one to one.
Speaker 2:Yeah. Like the Should've downgraded the house or
Speaker 3:Condo on the wrist.
Speaker 2:Or just wear wear an RM on each wrist.
Speaker 3:There you go. That would also solve this.
Speaker 2:I have no idea if this is real, but that is hilarious if true. And and an absolute wild choice. But, you know, if you're doing business deals, gonna shake someone's hand. They're gonna see what's on your wrist. They're not coming over to your house.
Speaker 2:So in terms of actually accelerating your business career, there is a reasonable trade here if you're in an industry that that that gives respect to luxury watches. Well, let me tell you about public.com investing for those who take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. And before your stock is listed on public, you gotta go public at the New York Stock Exchange. Wanna change the world?
Speaker 2:Raise capital at the New York Stock Exchange. Just do it. And when you become wealthy, you might relocate. The Wall Street Journal has a essay, an essay.
Speaker 3:What is a city when it's wealthiest leave? The stickiness that once anchored people in capital to great cities is gone and it's it is not coming back. Lot of movement recently. Richard writes
Speaker 2:The nominative determinism here. He's writing about the movement. Google cofounder Larry Page made headlines by spending a $188,000,000 on three Miami mansions. What's the author's name? What's the author's name?
Speaker 3:What's the author?
Speaker 2:Richard Florida. Rich in Florida. You gotta make you you you gotta do better with this simulation. Whoever's simulating this world, come on. Come on.
Speaker 2:That's a layup right there. He's not the only billionaire looking at a big move. His Google cofounder Sergei Brin is reportedly shopping for a Miami property. So is WhatsApp co founder John Jan Kuhm. The shopping spree comes as California considers a wealth tax to impose a one time retroactive levy on billionaires that fueled speculation that they have had it with the Golden State in New York City where Mayor Zoran Mamdani earlier this month proposed an increase in taxes on high income people and short of that a property tax increase.
Speaker 2:There is a talk of a parallel exodus. The wealthy has long threatened to leave when battling local governments over taxes in the past. They rarely did, but their threats have teeth this time. Not because they are abandoned in great cities, but because they have figured out that they don't have to. Now, the digital technology allows them to separate where they live and pay taxes from where their business operates, they aren't relocating their companies.
Speaker 2:They are relocating themselves. They will all be puppeteering humanoid robots remotely in San Francisco, getting a coffee, doing a deal, all the way from the comfort of their home in Miami, potentially. Or just spending, you know, a couple months in the state. This up ends the basic arrangement that underwrote great cities. What they are, how they work, and who pays for them amid this seismic shift looms an existential question.
Speaker 2:Can those cities survive without them? This is always the funny bull take for the funny bull case for those, like, insane skyscrapers that are, like, super thin and super tall in New York and that every apartment is, like, $50,000,000, and then the people don't even live there. And everyone's like, why are they building this? We should just build more housing. And it's like, the the property tax from all of those new apartments that are priced at 50,000,000 each and no one spends any time in, that's a whole lot of money that goes towards the city.
Speaker 2:It goes towards buses and everything else that the city does. And those people who are in the city, they're not using the buses. They're not they're not clogging up any of the resources. So it's actually a fantastic deal for the city, usually. For for most history, people lived where they worked, on the farm, above the shop, close to the factory.
Speaker 2:Suburbanization expanded the radius, but workers, managers, and executives still had to be close to where jobs concentrated because people had to be there. Cities could charge a premium. Residence paid it in housing costs, in taxes, and in the cost of commuting or other frictions of day to day life. The alternative living elsewhere meant being cut off from their livelihoods and economic opportunity. Taxes were part of that price, but people paid because they had no choice.
Speaker 2:When COVID hit, the social compact appeared to quake. A chorus of commentators predicted the imminent collapse of New York, London, and San Francisco. Who was in that chorus of commentators? I think we know half of them. They predicted the wealthy and their companies would be driven out by lockdowns, governance failures, crime, and sudden possibility of remote work.
Speaker 2:The city, as a result, would hollow out. There there seemed to be something to it at first. Ken Griffin relocated himself in the headquarters of his Citadel hedge fund from Chicago to Miami. The venture capitalist Peter Thiel and Keith Raboy bought homes in Miami Beach and opened an office for their venture capital fund in Miami too. Jeff Bezos moved from Seattle to Miami, assembling a $200,000,000 plus compound.
Speaker 2:But the predicted total exodus never fully materialized. Many of those who moved to Miami quickly came face to face with its limits. Public and private schools couldn't match what they had left behind. Housing costs rose astronomically making Miami now one of the most unaffordable markets in the country. Most critically Yeah.
Speaker 3:Miami is so crazy. If you have somebody visit anybody that visits from Malibu, from Miami, they'll pull up Zillow. They'll be like, everything's so cheap here.
Speaker 2:Yeah. And the weather says how it's
Speaker 3:less It just says well, it just says how expensive Miami's
Speaker 2:got. Yeah. Yeah. Yeah. It is crazy.
Speaker 2:In 2023, Thiel admitted as much conceding that the tech industry remained densely concentrated in California and that Miami's housing costs put that city out of reach for much of the talent he needed, making it far harder to move companies and their people than he originally than he initially thought. Griffin himself ended up building a massive new building in New York even as Citadel expanded in Miami. But eventually, they realized they didn't have to move their companies at all. Digital technology enabled them to live in one place and keep their business in another. They could establish residency in Miami, which requires no particular time spent there to claim residency status and spend much of the year wherever else they wanted, flying to New York or San Francisco for what mattered.
Speaker 2:The city where their businesses are headquartered became just that, not somewhere they needed to reside and pay taxes. That has transformed the underlying economic logic of cities. They are no longer self contained economic units. Digital technology is remaking them into networks, physical places connected by virtual ties, and dynamic talent flows. Before we move on, let me tell you about Fin dot ai, the number one AI agent for customer service.
Speaker 2:You heard from Owen earlier this week. If you want AI to handle your customer support, go to fin.ai. And let me also tell you about Plaid. Plaid powers the app you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. And without further ado, I believe we have our first guest, Apoorv Agrawal from El Temur in the restream waiting room.
Speaker 2:Let's bring him in to TBPN, I'll try.
Speaker 3:How are
Speaker 2:you doing?
Speaker 1:Great, guys. How are you doing?
Speaker 2:Thank you so much for taking the time to come chat with us. Welcome to Great to
Speaker 3:have you on the show.
Speaker 2:Obviously, I want to jump straight into consumer AI, but maybe you could, since this is the first time on the show, give us a little bit of intro on your role, your background, what you like to focus on.
Speaker 1:Awesome. Well, I'm a partner here at Altimeter. I help lead some of our AI investments in companies like OpenAI
Speaker 3:and Yeah.
Speaker 1:Glean and Parloa and Expo. And excited to be here. Thanks for having me.
Speaker 2:Yeah. You also did Redis. Right? Is that correct?
Speaker 1:Back in the day.
Speaker 2:I love that company. I'm such a fan. I I met maybe the cofounder, maybe just one of the the the creator of the original project, like the the the engineer behind it. And he taught me a lot about about software development, was very helpful earlier in my career. Anyway, how are you thinking about the state of consumer AI?
Speaker 2:Who's winning? What are the narratives that are being discounted because of the vibe war and just all the different takes that surface every single day on the Internet?
Speaker 1:Yeah. Look, I'll start at the top. You know, history has shown us that these consumer markets have been winner take most. Sometimes winner take all, honestly. Right?
Speaker 1:You look at the biggest technology market start at the Internet. We got Google out there for search, 90% plus market share, 3,540,000,000,000.00 in market cap. Mobile, the next big super cycle led to the birth of Apple, dollars 3,540,000,000,000.00 in market cap, another winner take most dynamic. Take social, the next one. Meta, dollars 1,500,000,000,000.0, 2,000,000,000,000 in market cap across WhatsApp, Facebook, Instagram.
Speaker 1:They've got majority market share. And so, you know, keep going down this list, ride hailing food delivery. You know, I think consumer AI, I suspect will be similar. And I think that's what's going on with Chad GPT. You know, it got lightning in a bottle three years ago.
Speaker 1:It continues to they continue to work hard, ship features, improve models, memory, voice, image, now Sora you saw yesterday. Yeah. And each of that is adding to the s curve. And, you know, lo and behold, Chad GPT is is is doing pretty well Yeah. Despite the vibes.
Speaker 2:Yeah. Yeah. No. Totally. I heard a stat where my jaw hit the floor, which is that Bing is profitable and growing.
Speaker 2:It's much smaller than Google, but it's a very interesting thing that even in something that feels like a winner take all market, the second, third player can still be, like, reasonable businesses where Satya Nadella doesn't need to say, oh, we gotta shut this down. It's not working. It's it is working. It's not winning, but it's working and it adds value to the ecosystem. And so I think that there's these there's these interesting
Speaker 3:Has anyone ever tried to clock what what the actual enterprise value of Bing would be today
Speaker 2:it's in the billions. I think it's definitely in the billions.
Speaker 1:Definitely. Yeah. Yeah. I mean, search search search is a valuable thing for agents more than humans. Right?
Speaker 2:Oh, yeah.
Speaker 1:Particular, the Google API is no longer available
Speaker 2:Yeah.
Speaker 1:As an API. So so Bing's API is actually very valuable, maybe even more than the Bing consumer product.
Speaker 2:Yeah. And, I mean, Google for a long time has always said, you know, competition is only a click away. Sundar Pichai said this. And it's interesting how how sticky consumer habits can be in a world where in tech, we often optimize for the benchmarks and the latest features. And I'm jump I got every app on my phone.
Speaker 2:I I will switch day to day. I will export. I'll jump through all these hoops to use the latest and greatest for two weeks and then go back to the old thing. But I when I when I just talk to random people in the world, it's like they're like, oh, I the funny one is, like, Jordy was talking to somebody who was like, he was like, do you use any of these AI tools? And the guy was like, no.
Speaker 2:Not really. And then he was like, have you ever heard of ChatGPT? He's like, yeah. I use that every day. And it's like, it's not even like, he doesn't even think of it as AI because Love it.
Speaker 2:The the news when the news talks about AI, it's like a data center or like the robot. And and, like, he just thinks about, like, oh, yeah. That's the that's the text box that answers my questions
Speaker 3:Yeah. That I can do stuff with.
Speaker 2:Yeah. Yeah.
Speaker 3:How I mean, what are we gonna
Speaker 1:make outside of ChatGPT? Like, if I'm buying something, you know, I got a button dedicated to it on my phone, like, it's a habit now.
Speaker 2:Yeah. Exactly. It's a habit and that's powerful.
Speaker 3:What what's your framework for trying to understand the present through history? How much do you look towards the dynamics that were unfolding during the .com cycle, different consumer Internet players, how much does that, like, matter to you? How much have you do you obsess over that versus obsessing over the data today and trying to predict the future?
Speaker 1:Yeah. Look, I think in in the moment, if you if you're if you're sort of living day to day and observing what's happening in the news, it it feels a little bit like there's four seasons to the year. Mhmm. It's called OpenAI, Google, Anthropic, and and China maybe. Yeah.
Speaker 1:Those are the four seasons. And depending on what season you're in, like, that's the news cycle. That's the vibe cycle. Yeah. But I think to your question, you know, I try to zoom out of that and, you know, obviously, we run a very concentrated investment strategy.
Speaker 1:Our growth fund has only four investments. Right? And so when you're when you're you're running that concentrated and and and, you know, putting your money where your mouth is, you you have to zoom out.
Speaker 2:Yeah.
Speaker 1:History certainly rhymes. In this case, you know, one of the things that I had written about, I'd say, two two, three years ago was, look, there's two big conglomerates in technology, Meta and Google. Meta's got 3,000,000,000 users in their phones in their pocket across WhatsApp, Facebook, Instagram, and and and Alphabet's got that with Google and Gmail and YouTube. And I said, hey, these guys are most likely to deliver the AI that everybody's going to use. I was wrong.
Speaker 1:That's not how it happened. Chad GPT turns out got magic in a bottle continues to grind up. Now just under a billion, I think 900,000,000 weekly active users reported over a billion monthly active. And honestly, that was a surprise. And we corrected that mistake two years ago and, you know, now the largest investment in in Altabare history.
Speaker 2:Mhmm. How do you think about pattern matching against previous capital wars? I was loosely thinking about the Lyft versus Uber And fight that I don't know. It's always hard to overfit on previous cycles, but I'm wondering how you process that capital fight. Don't know.
Speaker 2:I'm not exactly sure where you were in your investing career at that time, but you clearly lived through it. I was wondering about lessons from that era and just and maybe if there's a different scenario where capital fights can result in oligopolies. That's the interesting narrative that I feel like might be playing out, at least in some submarkets.
Speaker 1:Was a young engineer at Palantir at the time. Okay. And I remember the Uber rides in SF and Palo Alto here, what we call the Shire Yeah. Got so cheap, you were almost better off taking them
Speaker 2:Yep.
Speaker 1:Than walking. Yeah. And and, you know, I think it is not too dissimilar right now. Right? Like, I'm sure you guys are on chat GPT and like like you said, it's a habit.
Speaker 1:Yeah. And we are certainly getting more than $20 of value on this per month. Right? May maybe hundreds. For some people, it's thousands.
Speaker 1:The Yeah. The folks who are who who are coding maybe tens of thousands. And I think we are in this in this era, folks, that the price discrimination has not stuck.
Speaker 2:Mhmm.
Speaker 1:Right? It's it's still $20 a month for basically everybody.
Speaker 2:Yeah.
Speaker 1:Right? And, you know, I'm actually I'm I'm gonna talk to Nick Turley, head of Chad GPT later today Mhmm. About all of that. And this is one of my questions is like, how do we make sure we are, you know, for folks who are getting thousands or tens of thousands dollar value out of this product, how do we make sure we capture that, what I call the expand the ceiling on the top? But then also, you know, there's the vast majority, the billions of users, the Joe Schmoe, they don't want ChatGPT to book their flights for them because, Jordan, they're not booking 10 flights a month.
Speaker 1:They're booking 10 flights a year. Yeah. They they they're deliberate about it. And so for them, how do we get them on an easy ramp? How do we lower the lower the floor?
Speaker 1:And and maybe ads is the way to go. Yeah. For sure. And, you know, the the Meta properties have done a great job. They've got three, four billion users.
Speaker 1:They monetize at about $60 per user per year globally. Yeah. Alphabet has a similar number. It's about three, four billion active users. Monetize at about $70 a user per year globally.
Speaker 1:And OpenAI is at we're at about $10.15 dollars per user per year across about a billion users, and both have got to go up over time.
Speaker 2:Yeah. How do you think about squaring this idea that, at least among the Mag seven, maybe you take out Tesla and NVIDIA, but basically every company competes with everyone and everything. Feels like I've always always I was always laughing about six out of the seven mag seven CEOs own or control social media properties, whether you include LinkedIn, Twitch for Amazon, X for Elon, iMessage for Apple is sort of a social network now. And YouTube directly competes with Instagram. The Shorts product is the same.
Speaker 2:And it feels like over time, some of these develop oligopolies, some of them monopoly sticks. But how much do you think we can learn from the way the previous era of the Mag seven boom played out in terms of how the leading labs might compete over the next decade?
Speaker 1:A 100%. I mean, it's happening Yeah. Right right now. I mean, you saw what happened and, you know, they call it you get clad coded. Like, Cursor got clad coded.
Speaker 1:Sure. I I think it's the biggest narrative violation. I I was with Michael Troll over the weekend. They're crushing it. Oh, yeah.
Speaker 1:They're absolutely crushing it. And and it's it's it's what you said, you know, it's, you know, maybe to give a historical example.
Speaker 3:Sure.
Speaker 1:Databricks and and Snowflake. They were both Yeah. Built on the top of the three hyperscalers, AWS, GCP, and Azure, while them having their one p products. Redshift, BigQuery and with Fabric. Right?
Speaker 2:Yeah. That's
Speaker 1:right. And it's a little bit of what's going on right now with Cursor. You've got Anthropic and OpenAI who've got their models that Cursor buys and they've got their 1P products called Codex and Cloud Code that compete with Cursor. And, you know, look, if you're a developer, if you're a customer, an enterprise customer who cares about the resilience and the multi modality and the option of having this choice, you'll probably pick something horizontal across them. Mhmm.
Speaker 1:And so I think, as you said, everybody's competing with everybody, and what a time to be observing this. But I think the fog of war will get clearer Mhmm. As we go into the second inning and the third
Speaker 2:Yeah. You mentioned that flight booking might not be the major driver of consumer growth this year maybe. I I sort of agree with that. But I'm wondering, like, I was talking to Olivia Moore at Andreessen yesterday about the value that might come from integrating image, video generation and reasoning models and deep research models all into one consumer interface. So you have this idea for this, like, essentially vertical video reel, and you can actually, like, plan out, generate images and wind up with a much more full featured product.
Speaker 2:What else are you tracking in terms of, like, consumer use cases that you think might unlock this year?
Speaker 1:Yeah. Look, think the you know, we we are investors in in a couple of these in in inference platforms, so we see the traffic of of of AI tokens. I would say the two biggest sources of the users for AI tokens is coding
Speaker 2:Mhmm.
Speaker 1:And video.
Speaker 2:Yeah.
Speaker 1:Right? And then there's, like, a long tail of customer service and and and legal and office of the CFO and and and so on. And and, obviously, chat is is you know, I I forgot to say chat, but chat's one of the big ones. I think for the average consumer, the beauty of having it all in one place and and why I I I had wish Sora would have been in chat GPP for it since day one is just so high. You know, I I'm not a professional video editor or or image editor.
Speaker 1:I make that one card on my kid's birthday, and that might be it. Maybe two, and the second one on my anniversary someday. Yeah. And so, you know, I think I I just I would just like it to be there.
Speaker 2:Yeah.
Speaker 1:But but but and that's the vast majority of Joe Schmo. Now, obviously, the 1%, you know, like Dan, our producer, he's gonna make that 30 times a day, he might, you know, go find the best in breed player. But I think for a vast majority, having the one throat to choke is the way to go.
Speaker 2:How do you think marketing and customer acquisition will change in the future with regard to consumer AI? We're seeing Super Bowl ads now. I haven't seen a ton of direct response, but maybe I've just missed that. Maybe Meta's like, hey, we're not gonna let someone run these ads. But
Speaker 3:In some ways, I'm sure Meta's funding Yeah. Their AI strategy through how much other AI companies are spending on
Speaker 2:the Yeah. Certainly, on the long tail. You you know, you see a lot of ads for, like, point solution AI apps for, you know, try on close digitally or create a custom avatar, and you see those apps sort of climb up the app charts on the back of meta ads. But what do you think the shape of, like, customer acquisition looks like over the next couple of years?
Speaker 1:It it's it is such a
Speaker 2:good
Speaker 1:question because, you know, as I said, there's four seasons to the year. But turns out in those four seasons, it's like 16 mini seasons Yeah. Where one of these app will go through, a marketing surge.
Speaker 2:Some people might even say 365 mini seasons if you're running a daily technology and business news show. We're we're fully employed over here.
Speaker 1:Exactly. Exactly. And so, you know, we see we observe these spikes and so there'll be a new app, you know, I I I mean, not to dunk on Deepsea, but like Deepsea got a huge Yeah. Spike start of last year. And it was so hard to explain.
Speaker 1:Like, I don't know if anybody uses it anymore.
Speaker 3:I just I just assumed that was bought. They just bought they just bought it their way up the
Speaker 2:I don't know. I think I think it's I downloaded the app. A lot people were interested
Speaker 3:You downloaded it because you saw it on the top of the charts.
Speaker 2:No. No. No. I saw it on Twitter. I get There you saying like, this is the first way that you can see the the new user interface for what watching an LLM reason.
Speaker 2:And and you could see the token streaming and you could see the internal reasoning logic and then you get the output. And and that was a remarkable UI pattern that then was ported back to ChatGPT and the ChatGPT client base and customer base and user base was very happy about that and they still are because you see the little like thinking about this. Okay. I'm gonna go search this and everyone's happy.
Speaker 3:Yeah. One one thing that's surprising looking at the the the app store charts right now
Speaker 5:Mhmm.
Speaker 3:You have ChatGPT, Clawd, Gemini, one two three. Mhmm. But then there's no other new apps in the whole top 20 And it's so interesting thinking if you could rewind two, three years ago and That's you so how how how much acceleration, how much progress we're gonna see in AI. You would assume that there would be like five, six, seven
Speaker 2:Mhmm.
Speaker 3:Maybe more of these like new entrants. But I think it's, you know, it just, you know, even even with the technological shift, it's just it's just proving that like it is so hard to Mhmm. Actually break out in consumer. And in some ways, it's gonna the the tools, the AI tools just make it harder to actually break out in chart because you're not competing with two or three other companies. You're maybe competing with two or 300 at some point.
Speaker 1:The flywheel is too good. It's too efficient. The more users you have, the more feedback you have. You know, the thumbs up, thumbs down at the bottom of your chat GPT prompt and they make the next answer better. And it's just you know, that flywheel is so has gotten so good.
Speaker 1:It's a little bit like what happened in search.
Speaker 2:Sure.
Speaker 1:After a certain point, it's just so hard to deliver a better search than Google. Yeah. And which is why these consumer markets, as we discussed, I think are gonna be winner take most.
Speaker 2:Have have have you guys heard the story of how Google built their spell checker auto complete? It's a it's You told them. I I think I've told this, but they basically, they just looked through the records, and they said, if someone spells a word that we don't know, just look at whatever they Search. Whatever they searched next because they will likely go do the work for you and actually figure out the correct word that they were thinking of. And then so they just had this massive dataset, and so they just had the best autocomplete.
Speaker 2:And that stuff compounds all the time. The the leaving the thumbs up, thumbs down, that's the version of, like, tipping in the consumer AI era. Like, if you're not doing that at home, if you're not if you're not tipping ChatGPN with some feedback, you gotta get the flywheel going. This is important.
Speaker 1:That's exactly right.
Speaker 2:Okay. Prediction time. Do you think any neo labs will try and jump into consumer? Or are they more interested in playing in like the more oligopolistic b to b point solution enterprise where you could potentially
Speaker 3:carve intelligence Yeah. As a service.
Speaker 1:Look, I'm a I'm a forever optimist on startups. Okay. So so so I hope they take a crack at it. At the very minimum, we will learn something that that one of the big platforms will get, like what you just told us about DeepSeek. I thought that was a good feature.
Speaker 1:Yeah. We got it on the main app. Yeah. So at the very minimum, we will have that happen. Yeah.
Speaker 1:And at the very maximum, we'll have a we'll have a we'll have a new product, and Chad, GPT will be the Yahoo. But I Yeah. But, you know, the the obviously, that's a harder harder hill to climb.
Speaker 2:Yeah. What about I've been I've been talking to a few of investors about where they sit versus where the timeline sits, where they're thinking in much longer timelines than what acts as going back and forth on who's the hot company of the day, the seasons, as you put it. What do you think about this idea of tall poppy syndrome that the tech community seems to like to punch upwards, not punch downwards? And so no one wants to beat up on a company that launched and then never really got to escape velocity and is sort of languishing. But if you're at the top, it's game on.
Speaker 2:We're coming for you. Yeah. And we are gonna find every problem and make it very well known, and it's over. Yeah. It's over.
Speaker 2:What do you think about that?
Speaker 1:Well, when you're the underdog, you gotta pick a fight with a winner. Yeah. You gotta bring the fight to you. This is alpha. You know?
Speaker 1:Yeah. Not not the other way. Yeah. You know? So I think I think that's what's going on.
Speaker 1:People wanna pick a fight with a winner.
Speaker 2:Yeah. Yeah. That happens. That happens a ton.
Speaker 1:Bring the game to you.
Speaker 2:Bring the game to you. What else are you tracking in the AI build out? What else is important in understanding, like, can consumer AI continue to ramp? You mentioned ads. You mentioned continued retention and growth.
Speaker 2:But more deeper in the supply chain, how are you feeling? We just looked at Oracle earnings. It seemed very positive. But what are what are you reading?
Speaker 1:You know, the number one thing at this game, like, you know, three years in that we obsess about is durability. Yeah. Durability is the number one question and we have this like panel of things that we look at. I've been publishing some of that.
Speaker 2:Mhmm.
Speaker 1:Is, hey, is this thing, you know, users show up. That is step number one.
Speaker 5:Mhmm.
Speaker 1:Users stay there. That's step number two. Mhmm. And the way we measure that is daily active users Mhmm. Divided by monthly active users.
Speaker 1:And, you know, I was fully expecting that to tell us a lot and it does actually the dispersion of the leading AI apps, the three that you mentioned that are leading, you know, Chad, GPT, Gemini and Claude is actually quite wide. Chad GPT's daily active usage over monthly active usage is about 45, 50%. Gemini is at 22.
Speaker 2:Wow.
Speaker 1:Meaning that the number of times people are showing up in a month is like twice as much more on Chad GPT which means it's
Speaker 3:So they're still retained on Gemini. Yeah. It's just a much less valuable user because they're not using the app as much.
Speaker 7:That's right. Yeah. That's right.
Speaker 1:The the the usage is far far less frequent on Gemini. Yeah. And then, you know, the the third thing that we look at is, hey, has this turned into a habit or is it still a curiosity?
Speaker 2:Mhmm.
Speaker 1:And that that we look at, you know, using the standard retention chart which is over twelve months how many users retained. And, you know, the the dispersion is quite wide there as well. Mhmm. In fact, the only three apps that show what we call a smile curve Mhmm. Meaning that users come back over time after having churned.
Speaker 1:The only one of them in AI is StratGPT. The other two are Chrome and WhatsApp. Chrome, meaning that the the the utility is so high that even if you made the mistake of churning, you find your way back.
Speaker 2:I mean, that happened to me, not not with Chrome, but with WhatsApp. I had it for one group of friends, dropped off, then eventually, there's a new group chat and you gotta become a DA user.
Speaker 3:Chrome seems like a better kind of comp Okay. For LLM Why? Just because it's more of a single player experience Sure. Whereas like WhatsApp. I'm I'm the same way.
Speaker 3:I'm not a heavy WhatsApp user. Mhmm. But then every once in while, like, well, there's Yeah. Two people I message on WhatsApp. Yep.
Speaker 3:I haven't gotten back to them or whatever, so I'll come back. But but Chrome is probably more relevant
Speaker 1:to It's it's a great point. You know, it's a great point because, you you know, WhatsApp has network effects. You know, if my friends, Jordy and John are on on on WhatsApp, I'm more likely to be there. Mhmm. ChatGibity doesn't have that.
Speaker 1:If you guys are in ChatGibity, I'm not more likely to be there.
Speaker 3:Yeah. The same thing with Chrome.
Speaker 1:Yeah. Exactly.
Speaker 2:Yeah. And
Speaker 1:and the other effect that is that that I that I think about a lot is, you know, the dopamine, you know, doom scrolling through cat videos, like TikTok, Instagram, all have this dopamine, this, like, addictive effect. That's why they're, you know, three, four billion users. Chad Shardul doesn't have that.
Speaker 2:Yeah.
Speaker 1:It's it's you're there for for for some kind of a knowledge workflow.
Speaker 2:Yeah. They also have the the TikTok. I I haven't had TikTok installed for years. But occasionally, people will send me a TikTok, and I will try and open it, and it'll just ask me to install the app. It won't even play for me in the web browser, and it's very difficult.
Speaker 2:But that is another viral flywheel that people often will generate something, but they'll send me a screenshot from their ChatGPT results. It's pretty rare that someone actually sends me a a full link to their deep research report. I think that might happen more. I've I've I've said for a long time, like, I want to just have a feed of Tyler whatever Tyler Cowen is deep researching, I wanna just read through the results of that because I think that would be interesting without him needing to, like, publish it and then everyone be like, this is AI generated. It's like, no, I want to be able to follow people that are doing interesting research.
Speaker 2:And then when they do some interesting research, they can just share that on the network. I think that could be cool as a feed. But again, very knowledge based, not nearly as brain rotty as TikTok. So different different source
Speaker 8:of strength.
Speaker 1:Building on what you said, here's here's a prediction. I think I think the next phase of utility guys, you know, we are at, a billion users on this consumer thing. Mhmm. The next billion, I think, will come from these proactive proactive work like you described. Okay.
Speaker 1:It's like, hey, don't right now, I've got to go log on to Chad GPD or Gemini or Anthropic to, like, engage with it.
Speaker 2:Yep.
Speaker 1:But, hey, what if you, like, you you you were like, hey, this is what Jordy said or this is what Tyler Cohen said. You gotta check it out.
Speaker 9:Yep.
Speaker 1:You know? I know you think about a lot about this company, OpenAI. You think a lot about this company, Revolut. Yeah. This is what somebody smart said about it or hey, they got a UK banking license.
Speaker 1:Yeah. You gotta check it out and here's
Speaker 2:Yeah. Pulse was like a glimmer of that, but I felt like the daily functionality on Pulse was too much for me. What I'm actually looking for in a world that has slightly different economics, slightly different business incentives is something more like, I like movies. I like a certain type of movie. I want you to actually get through to me when there's a new Christopher Nolan movie or a new Denis Villeneuve movie.
Speaker 2:And I want you to tell me about it, but only when that happens. And I don't want a weekly newsletter of all the movies. Yes. And that doesn't make any business sense. Like, would never be like, I'm starting a substack.
Speaker 2:I'll post it whenever something interesting happens. It's like, it's gotta be daily. It gotta be weekly. We have a daily show. Yeah.
Speaker 2:We we couldn't just do just emergency pods. Like, that doesn't make sense. But What would you say? I can't
Speaker 1:appreciate yeah. You might appreciate this because you because you brought up Redis. You know, these weekly reports are like, they look like cron jobs
Speaker 2:Yeah. Back in the day. Exactly.
Speaker 1:Yeah. Who knew cron jobs would be so valuable.
Speaker 2:But I want the I want the cron job to run and then the AI agent to filter and be like, does this actually pass the quality bar? If not, let's just not let's just not annoy this guy. And then if it is if we got something good going on, let's let him know. Tons of interesting things. What a fun time to be a product manager at OpenAI.
Speaker 2:It's gotta be a great time. Say hello to chat
Speaker 3:with What's you for the bar for for adding a a new investment to your guys' four portfolio fund?
Speaker 1:It's it's it's it's not a low bar. I'll I'll say that, but I'll keep you posted. I'm working on one trying to get add one. We'll see if we get it through. Yeah.
Speaker 1:But but but but maybe maybe to maybe to maybe to actually answer your question, would say that one of our beliefs is that the rate of change is so fast and so high that, you know, honestly, it feels like there's a dozen startups that get quite endangered, turn into like endangered species with every product release, right, with from one of the what we call private neck seven, opening up anthropic, leading that charge. And and so the idea is to just, like, stay concentrated in the ones that we know are working. And and, you know, we obviously we have an early stage fund that does earlier earlier stage investments. But on the growth stage side, we're pretty concentrated. The bar to get something added would be we have belief that this is a company that has a good line of sight to free cash flow over time.
Speaker 1:And that is hard to say for many late stage businesses right now, but the ones that we feel so are in there.
Speaker 8:That's great.
Speaker 3:Concerning. Concerning that that you're not seeing the line of sight.
Speaker 1:Yeah. No. I think I think I think I I think about the private markets in three innings right now, guys. It's like you've got the early stage stuff that's like, know, sub 1,000,000,000 market cap. Right?
Speaker 1:The second, call it, stage is the 1 to 10,000,000,000 market cap. And then the third one is the the the 10 to, call it, wherever you're staying private forever. This is these are this is what I call, like, quasi publics. You could go public. You just choose to stay private.
Speaker 1:I would put OpenAI, Anthropic, Revolut
Speaker 2:Straight
Speaker 1:ramp in this bucket. Very high quality companies that we'd love to own in our growth fund.
Speaker 7:Sure.
Speaker 1:The second bucket, is the one to 10, I think is the part where there is most dispersion and is is probably the play place I see the most fog before and hardest to figure out whether they they have the durability. Yeah. And, you know, the early stage business will always be there. There'll always be great founders starting. I know you guys had, I think you call it the Gupta Nader, Ravi Gupta.
Speaker 1:Yeah. Ravi Gupta.
Speaker 2:I'm glad you caught that.
Speaker 1:Good crush.
Speaker 2:Yeah. Good crush.
Speaker 3:What are you last question then then we'll let you go. How do how are you processing the disconnect between public SaaS apocalypse, people concerned around SaaS as a business model, and then what's happening in the actual early stage with the There's so many companies that may position themselves as something other than SaaS, but functionally, they are SaaS. Like you could just you could just take If they say agents, could just replace it with workflows and it would sound exactly like a SaaS business. And it's just like very interesting time where you just have all this funding activity early early and then public investors are saying, hey, we want to put a huge discount on all on all these businesses because we just don't know what is gonna happen in in ten years. Do you find that a bit strange?
Speaker 1:Look. Look, I I have tremendous respect for the public markets. They're a very efficient mechanism for repricing, but I think they're not hyper efficient in in times like now when the when the change is so fast. And so I think it's a there's a there's a spectrum, you know. I'll give you I'll ask you a provocative question.
Speaker 1:Why couldn't you vibe code Chad GPT? You're good. And by the way, when you vibe code it We
Speaker 2:we did. We we launched claudewithads.
Speaker 3:Claudewithads.
Speaker 2:Withclaude. Oh,
Speaker 4:oh, wow.
Speaker 2:We claudewithads.com was up for one day during the Super Bowl, and it gave you intelligence too cheap to meter sponsored by all of our sponsors, and it served you an ad before delivering a query from Opus four six or something. But it was a lot of fun. Yeah. But yes, of course, it was not a real product and it would never have liked. But I
Speaker 1:think that's the state of a lot of a lot of vibe coding right now. Yeah. Go build cloudwithads.com. Yeah. You try it out for a day and then you're like, oh man, that real cloud was was a lot better.
Speaker 1:Yeah. And then and then, by the way, go buy some software in the public markets after that because Yep. Because you realize the stained power of some of that software.
Speaker 3:Yep.
Speaker 1:I wouldn't say that for everybody. Right? Like, there's a lot of stuff that that that we have on our list that is truly endangered Mhmm. In the public market. I think it's it's it's pretty case by case, but Yeah.
Speaker 1:Some of that's pretty good.
Speaker 2:Yeah. That makes a ton of sense.
Speaker 5:Well, thank
Speaker 2:you so much for taking the time to come Have and chat with a great rest of your day. Fun. Safe travels. We'll talk to you soon.
Speaker 3:Cheers.
Speaker 2:Goodbye. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. And let me also tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and medium sized businesses.
Speaker 2:And without further ado, we have Owen Jennings from Block. He's the executive officer and business lead. Owen, how are doing?
Speaker 9:How are you? Thanks for thanks for having me, guys. Big big fan of the show.
Speaker 2:Appreciate that. Thank you so much.
Speaker 3:Finally have you on.
Speaker 2:To have you on. You guys
Speaker 3:have been busy.
Speaker 2:You guys know each other, but for those who don't, can you kick off with a little bit of an introduction on yourself, how you wound up at Block, how long you've been there, what you do on a day to day basis?
Speaker 9:Sure. Yeah. I joined Block about twelve years ago. I was on the Square side.
Speaker 2:Overnight success. That's awesome.
Speaker 9:Up to business first and I worked on scaling the business team before the the IPO. And then in about, like, 2016, I shifted over to to Cash App. Mhmm. Cash App was, like, 25 people at the time. It was just peer to peer.
Speaker 9:Spent spent a while on the on the Cash side. And then we functionalized the company about two years ago. And so I look after the business team, which is product and and a number of our our of our operations teams for, for Block overall across our brands, which are
Speaker 2:Yeah.
Speaker 9:Square, Cash App, Afterpay, Title Mhmm. And so on and so forth.
Speaker 2:What what was functionalizing the company mean for those who might not know?
Speaker 9:So we used to have pretty rigid business units where Square and Cash App operated pretty separately. Mhmm. And they each had a CEO and and there was kind of duplicative disciplines Mhmm. Between them. I think part of our core strategy now is connecting
Speaker 1:Yeah.
Speaker 9:The seller side and the consumer side. So having, like, both sides of the of the transaction. And so about eighteen, twenty months ago, we we functionalized, quote unquote, which just means we're operating at the block level. So the the product teams across all brands for all of block roll up into me and same for engineering and design. So it just lets us have centers of excellence or for each discipline and be able to more flexibly move resources throughout the company versus, like, really rigid boundaries.
Speaker 3:Before we get into the present, tell us about the chaos of that 2016 era scaling Cash App that was, like, truly insane hyper growth from everything that I've heard. I know a lot of a lot of teams are going through that style of hyper growth right now in consumer AI.
Speaker 9:It was it was incredible. I mean, I I look back on it very fondly. I think the the key thing, you go back far enough to, like, 2015, 2016, there was actually, a meaningful question of if we should continue investing in Cash App. Like, were executives at the at the company. At the time, it was Square Cash, but there were executives at the company who were saying, look, you know, Venmo already has this thing unlocked.
Speaker 9:This doesn't make any sense. You haven't figured out a path to to monetization. And so it was actually Jack, our CEO, who continued to push and and continued to invest. Sarah Fryer, our old CFO, actually gave us a deadline at which we had to figure out monetization or else we were gonna be shut down. And and we're trying to go through the IPO, and so I kinda I kinda get the the trade offs there.
Speaker 9:But then, like, very, very quickly found found market fit. The the key difference for Cash App back then was the way Cash App initially started was you could move money instantly from bank account to bank account. That that wasn't something that was available with with any other sort of sort of peer to peer functionality. And so we found market fit really, really quickly and the, yeah, tremendous tremendous growth and, like, incredibly small team and just, you know, working to make sure we could we could stay up and and we could serve customers every day, especially Friday
Speaker 3:and Friday. Jacobi Jacobi was on was on our way. No way.
Speaker 2:So so so that was fundamentally different because I had I had other, money transfer apps at the time, but the flow was always take some money out of your bank account, put it into the app, and then send that money from that app to my friend who and then it sits in their account, and then they can take that to their bank account. You could go bank to bank, basically.
Speaker 9:So do we actually it's actually really funny how we how we got here. So we were we were thinking about building, how we build a low cost payment network for buyers. And there was this one type of transaction that was pretty unique and it it was it was a it was a unlinked refund. So for a Square merchant, it's like, how do you refund money back onto the card? And then we were like, oh, we can just process these as unlinked refunds.
Speaker 9:We worked with Visa. We ended up turning into this whole Visa Direct thing, now so much is happening on debit. But what we would do is there actually wasn't even an application to start. You would you would cc cash @squareup.com. And, if your if your debit cards were linked on either side, you could you would move money instantly from Bank of America to JPMorgan Chase or what have you on debit rails.
Speaker 9:And so it was instant and it was and it was free. Things have evolved a lot. Yeah. Yeah.
Speaker 2:Yeah. Of course. Well, I mean, with that functionalization of the company, is that one lens to view the change in workforce size as just a continuation of that, or is this some sort of key strategic pivot? Like, there were a lot of different messages going out. I'm wondering how you're thinking about the size of the company, the workforce over the next few years.
Speaker 9:Yeah. I can I can, kind of paint the picture on how we how we got here? I mean, primary driver for this decision was around, how AI tools are evolving and how they're flowing through our work. So when I think about, software development over the past year or so, I would say there was pretty meaningful progress from, let's say, you know, the 2025 through about November, and it was flowing through our work and kind of changing how we're approaching things. We we've been pretty early here.
Speaker 9:Like, we we launched Goose a couple of years ago, which is our open source agent harness. I think it's the first agent harness out there or or that I know of. We worked on the MCP with with Anthropic and OpenAI. So, anyway, things were progressing. And then in, like, the November, December, things just fundamentally changed.
Speaker 9:And it and it was with Opus four six and it was with Codex five three. And we basically crossed the chasm where, like, I I think the way AI tools were flowing through on the development side before is, like, it's a useful tool to help a given engineer be be more productive. You can auto complete, so on and so forth. Mhmm. In, like, late November with the with the model changes, we got to the point where, these agentic systems were actually able to write, the code autonomously, and the code was good enough to ship into prod.
Speaker 9:And that that was, like, a huge change. And then so so we spent, you know, I think many of us probably spent December and the holidays, like, playing with the, playing with the tools, playing with ClogCode, playing with playing with Goose under and then and then we spent we spent q one thinking, okay. Well, now how does this flow through to a to a technology company and a software development company? Because everything has fundamentally changed over the past four months. And so the org changes were were mostly a reflection of of that.
Speaker 9:I I think that just the fundamental nature of, like, the shape of the organization that you need, the size of the organization that you need, the workflow for an engineer, a designer, a product manager, other disciplines, all fundamentally changed. So, you know, we we we've continued to to kind of refine the the size and shape of our org, but but this was definitely a reaction to agentic development and what that means for for technology companies.
Speaker 3:How have expectations around just productivity for developers at Square changed? Like, how do you how do you try to understand if somebody is actually using the tools to the full fullest extent? Like, what's the general kind of philosophy?
Speaker 9:I think I think I think basically, expectations around productivity are increasing across the board. I think it's it's the clearest on the development side. And that's also why, like, when you when you look at the the reduction in force, it actually over indexed to product and design and engineering relative to to other other roles. And so we track, all sorts of the the normal things that you would track, like PR PR throughput, and we have, like, a internal concept of, like, time to time to customer value. And all of those like like, time to customer value is, is compressing.
Speaker 9:The number of PRs that that we're submitting are is increasing massively, PRs per engineer. The the main bottleneck now is is code review because shipping a PR is is becoming, you know, more and more trivial, especially for for simpler features. But I I guess I would say we're we're kind of in the in the in the belly of the beast right now. I think a lot of software development companies are where I think expect as high as expectations are, I don't think that they're high enough. Like, we're we're we're seeing just a fundamental shift here where the I mean, look.
Speaker 9:The bay the basic way that development used to work is that you would have a a product manager, a designer, six to eight server engineers, two to four client engineers, and you would kind of sequentially work on a feature in kind of a waterfall fashion. A medium sized feature would take, you know, four, six weeks. You would ship that, move on to the next one. That's it's fundamentally different now. Now we have really small squads of two people, three people who are way more full stack.
Speaker 9:They're all on the tools as we say as we say internally. And what you're able to do is is just, like, orders of magnitude different. Obviously, there's like the okay. Are you running five or 10 instances of Claude code at once and how does that flow through to to your day to day? I I think the bigger changes are just like the fully agentic systems.
Speaker 9:So we we have Builder Bot internally, which is somewhat similar to Cloud Code. It's built on top of Goose. And so now
Speaker 3:anyone I all your code names. We got Goose, then we got BuilderBot. What else you got? Yeah. What else you got?
Speaker 2:Well, yeah.
Speaker 9:I think Goose was named Goose too because Top Gun. Because of the yeah. Exactly. Top Gun. Little cheeky copilot shot out there.
Speaker 2:The the
Speaker 9:so for BuilderBot, there's a we have a Slack integration. So I can just add BuilderBot and say, like, hey. Fix the spacing on the screen in Cash App. And then, like, you know, put my computer down, go go have a a slice of pizza with my kids, and then come back, and there's a beautiful PR that's that's, that's waiting. And that's just, like, a complete paradigm change, and it's happening across across everything, not just the the development side.
Speaker 2:I don't know how much you've been tracking, like, the AWS story, but it feels like Amazon might have had some, you know, uptime problems or some backlash to the amount of vibe code that they were pushing to production. How are you thinking about avoiding the downside scenario where more and more of the system becomes vibe coded, fewer and fewer people understand everything And something goes down and no one really knows how to fix it, uptime starts dropping. There's a variety of reasons why we're seeing uptimes fall off. Some of it is just CPU shortage. But how are you thinking about, like, systems reliability in this new paradigm?
Speaker 9:I think there's a couple there's a couple of different pieces. So one for, like, the for the reduction in force itself, the number one principle was stability and reliability. So we were, blank sheet of paper. Were, okay. That's a p zero.
Speaker 9:We're not gonna sacrifice that, and let's, like, build build start building back the team with that in mind. I think more generally, how how we think about this is that there's just a spectrum of, like, where you can be more risk seeking and where you wanna be more risk averse. And so there's a bunch of examples right now where, you know, a a product manager on the Bitcoin team at Block has built a a fully functional app related to to Bitcoin and stable coins as kind of a proof of concept prototype, and has done that, like, really without without an ID, without looking at code. Mhmm. And that sort of thing can be incredibly helpful.
Speaker 9:Similarly, like, for an internal tool, you're probably way more risk seeking in terms of, okay. Let's you know, we don't need to you don't need to ask for permission for everything, and you can push this change. And then, obviously, like, the further down the stack and the more load bearing something is, we're way more risk averse, and I think that makes sense. Like, our our financial platform team, for instance, they run, you know, reconciliation and treasury and card issuance and, you know, our cloud platform team. I I I don't want it's not the case that we're that we're being, you know, willy nilly in terms of of how we're approaching it.
Speaker 9:It's just that, like, those who are experts and, like, our system architects and our principal engineers themselves who have deep context are able to become, you know, two x, three x, five x more more productive. But, you know, we we also have humans reviewing every every bit of code before we ship it into prod. So I think you need to be prudent in your approach here and protect the downside, but but still, like, the productivity gains are are pretty obvious, I think.
Speaker 3:Mhmm. Where where else are you guys getting a lot of value out of AI outside of code gen? Is anything on the fraud side or increasing, you know, the efficiency of of lending? I'm I'm just kind of spitballing, but where are you most excited?
Speaker 9:It's pretty broad it's pretty broad based, and so I'm not gonna walk through the the entirety of the of the org, but I'll give some some good examples. I think, you know, customer support, customer service is a is a clear one where we have our own we have our own models that that we've built and we've trained, and we've been able to automate, like, 75 to 80% of of chat inquiries across brands, and that's without sacrificing customer satisfaction or or CSAT. I think that's like a you know, that's been that's been out there, and I'm sure you all are seeing what Yeah. Sierra and Decagon and and folks are are doing. I think, basically, any deterministic task, we're able to offer a ton of leverage to the folks who are working at the company.
Speaker 9:So a lot of folks on the on the operational side are they're working queues. So you might have a queue to say, like, hey. Does this person should this person pass identity verification, or should we file a a certain ticket related to related to this transaction or, hey. Anomaly detection. Let's look at this.
Speaker 9:We have a human in the loop, which I think is critical, especially in a in a highly regulated area like like financial services. But a lot of the prework and a lot of the context and a lot of the pattern matching, we're able to do with with tooling. And so it ends up that a given individual on that team can be massively, massively more more productive. I I think the other thing is just we've built generalized tools that are that are quite helpful across the the org. So another code name for you is g two, which is, I guess, it's goose two.
Speaker 9:I don't know if goose is Goose. Goose. This is like a you can think of it as like an agentic operating system that's rolled out to the entire company. And then we have MCP's into all of the tools that we use. So in the in the Snowflake, into into Tableau, into Gmail, Calendar, Docs, like, pick pick your favorite piece of software, and then it's all one interface.
Speaker 9:And then I can go in and create agents or create automations that do whatever I want. So instead of spending an hour every morning looking through every single dashboard, seeing what's going on with with Square and Cash App and Afterpay, I can just have a an agent that runs at night, does that, and then lets me know if anything is off. And you can kind of extrapolate from there all of the the different use cases where we're basically allowing everyone at the company to build automations on top of all of the different sources of of truth that we that we have internally. And then we're doing the same thing for our customers on the on the Square side and the and the Cash App side as well.
Speaker 3:Mhmm. Very cool.
Speaker 2:Well, congratulations on the progress, and thank you for coming to explain some tumultuous times. But it sounds like there are there are green pastures ahead and lots of new things to build, and we're excited to follow along. So thanks for
Speaker 3:coming and breaking it down. Yeah. Great day. How are doing? Have
Speaker 9:a good
Speaker 2:rest of your day. We'll talk to you soon. Yeah.
Speaker 1:Thank you.
Speaker 2:Goodbye. Let me tell you about AppLovin. Profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today. I love this post.
Speaker 2:15,000 likes. Catchy opening. But the comma splices unwieldy. Why don't you try it was not just the best of times. It was also the worst of times.
Speaker 2:And, the the the comments here are fantastic. And honestly, it wasn't just the best of times. It was also the worst of times, and that's rare. Let me check the times to see what we're working with. I see it now.
Speaker 2:This project is building the best of times. After a thorough examination, I have identified several worst of times. If you want, I can fix those next. This is so good.
Speaker 3:So Well, we've got to get we gotta talk about Jeremy Gaffan simulator.
Speaker 2:Demand was overwhelming. 58 likes on Jeremy Gaffan simulator, but you can play it at home at Jeremy Gaffan simulator. It's Gaffan simulator.
Speaker 3:This is the paradox in action. Right?
Speaker 2:This is Hays paradox.
Speaker 3:Internally, thought this was potentially the most funny entertaining product You were released and the market spoke and disagreed
Speaker 2:for This a may be a little too niche but you've been waiting for Tyler Cosgrove built this in something like a day. And And
Speaker 3:you get to play as Jeremy going on in best like best one of the most iconic episodes of a podcast.
Speaker 2:It was the best. It was the highest rated or most downloaded episode of that year. So it truly is
Speaker 3:Which is insane when you
Speaker 1:put it in the
Speaker 3:context of the other guests
Speaker 2:Oh, yes. That have show that. Many incredible guests.
Speaker 3:Look at the look at the view. Wow.
Speaker 2:Oh, yeah. Yeah. What's going on with that did you not figure Why out is production
Speaker 6:team trying to out me?
Speaker 2:Yeah. They're really trying to show you all of the all of the flaws of this thing. But, of course, when you go to giffonsimulator.com, you will be dropped into a fully three d world. There are some of Jeremy's best posts available on the wall. Of course, a billboard that we created for him.
Speaker 2:If you have a term sheet accident, you gotta call him. Giffon and Co, easy recap. And of course, the cover a great
Speaker 3:post on the wall.
Speaker 6:There's special There's special surprise. So so you play the game and you answer the questions just like Jeremy did on the show.
Speaker 2:We can we actually go play the game? Do we have audio on this as well? Let's see.
Speaker 3:We're gonna talk a ton about
Speaker 2:all sorts of different topics.
Speaker 3:You are gonna say
Speaker 2:that. It asks you every question that Patrioshanasi asked Jeremy Giffon on this particular invest like the best episode. You are given three potential answers. One is the correct answer. Two are AI generated variations that are incorrect but plausible.
Speaker 2:They're actually pretty well written. All of them are very, very good. You really did scroll through the entire, the entire timeline. And then you can listen to Jeremy give his answer or you can skip to the next question. How many questions are there in total?
Speaker 2:There's 48. 48. So to play this full to play this full gif on simulator, you could easily be there for an hour. It took me like twenty minutes and I was trying to breeze through it.
Speaker 3:Investment would be one where you actually never have to talk to any of the people or know anything about the business. You can just understand the So it's something like Greenblatt's You Can Be a Stock Market Genius, your favorite book on investing ever?
Speaker 2:Is it? Chat, what do you think? Is this Jeremy's favorite book on investing ever? I'm gonna go yes.
Speaker 6:Well, think the answers are actually all yes.
Speaker 2:They're all yes. Okay. Okay. You have to give different reasons.
Speaker 3:Yes. That is my book on investing ever. The big thing that really turned a light bulb on for me and that This is important. If you're
Speaker 2:if you're if you're potentially high Like
Speaker 3:index or
Speaker 2:Potentially applying for a job to work with Jeremy.
Speaker 3:You and
Speaker 2:I have talked a lot
Speaker 3:about how.
Speaker 2:This is a great way to get your reps in.
Speaker 6:It's really interesting. You go through
Speaker 4:the whole thing
Speaker 2:Yes.
Speaker 6:And you answer every question correctly Yes. There's a special prize at the end Yes. If you get them all right.
Speaker 2:We and has that price changed since we last talked?
Speaker 6:It's the same prize. I think I sent you
Speaker 2:with the prizes. Okay. Okay. Well, for those who are listening, go to gifansimulator.com. You can beat Tyler's personal record, which is 40 out of 48 questions.
Speaker 2:That's pretty good because you built this thing. It is it is challenging. Fortunately, Jeremy Giffon is in the chat.
Speaker 3:You gotta beat you gotta beat your own game.
Speaker 6:Mean, I could obviously cheat. Right? I I know what this is. But I I try to do it Yeah. Manually.
Speaker 2:But this is this is reviewing game tape. And one day there will be one of these for every podcast appearance in the world. Let me tell you about Cognition. They are the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 2:So breaking for JPMorgan.
Speaker 3:JPMorgan forced to mark down loans and has decided to reduce lending to private credit groups. Let's get into it.
Speaker 2:Devaluations of collateral will limit credit to firms that have become top lenders to higher risk companies.
Speaker 3:J. B. Morgan has clamped down on its lending to private credit groups with bankers looking to cut risks as concerns mount over the credit quality of companies in their stables. The bank informed private credit lenders that it had marked down the value of certain loans in their portfolios.
Speaker 2:This is crazy.
Speaker 3:I mean JPM marking they're looking into your portfolio and being like, nah. Yeah. Value this like you do.
Speaker 2:And who runs JPMorgan again? The CEO? Jamie Dimon. And what was he doing, with the private credit bros, like, three months ago? He's taking shots.
Speaker 2:He was saying cockroaches. He was saying that there there are there are, you know, jitters in the private credit markets. Well, this is his firm, JPMorgan, actually, you know, have taking, like, financial action against the private credit portfolios.
Speaker 3:The loans that have been devalued are to software companies, which are seen as particularly vulnerable to the onset of AI.
Speaker 2:So interestingly, it's less about data center construction. So within Blue Owl's portfolio, you have software companies, but then you also have data center construction. And the data center loans, a lot of those look really, really good because, yes, it's a big project, you know, a full gigawatt or 500 megawatts for a meta campus. But the the company that's financing and building that that data center that then takes you know, that issues these loans, they have Meta as a tenant. And Meta is gonna pay their data center bills even if there's a pullback in the AI market because they have, like, the greatest ad engine ever created, and they have been printing cash flow.
Speaker 2:They are, of course, drawing down on that cash flow. But even if they if there's a jitter in the AI markets or demand weakens, they are seen as as a very, very good tenant for those data centers.
Speaker 3:So Somebody was able to find a slide from Blue Owl's fundraising materials, probably not intended to be shared externally. They say this is a real slide from Blue Owl. While it reads like satire, it sadly isn't. The strategy. Lend to growing SaaS companies with some degree of ARR even if they have negative cash flow or EBITDA.
Speaker 3:And people wonder why Owl is down 40% year to date. Their underwriting standards are total garbage.
Speaker 2:People are not happy.
Speaker 3:Yeah. Again, the a sort of a concept stage slide is not necessarily their actual under underwriting strategy. But the slide says that's talking about the recurring revenue loans. A loan major company that may not be currently EBITDA positive because it it has made a strategic decision to postpone profitability in favor of acquiring customers that will generate a high lifetime value. Mhmm.
Speaker 3:Of course, people are just questioning what what the lifetime value of these customers will be. Yeah. Fast growing businesses with a highly stable base of existing customers, strong revenue visibility, and attractive unit economics, attractive credit characteristics.
Speaker 2:Mhmm.
Speaker 3:I'm gonna include minus profitability. Mhmm. Including covenant protections, lower loan to values and premium pricing as compared to a typical direct loan. They may not be generating cash flows but have attractive business attributes.
Speaker 2:Mhmm.
Speaker 3:LBO Vinnie Regulatory lending guidelines limit bank participation.
Speaker 2:Yeah. LBO Vinnie gave some extra context to what this was what the market was like a year ago when a lot of these loans were made. He says, sounds like you've never worked in leveraged finance or tech m and a. Hindsight is twentytwenty, but this absolutely made sense twelve months ago and is how you were competitive on direct processes. So companies went out to raise money in the debt markets.
Speaker 2:And if you didn't follow these standards, you were not competitive. You were not winning the business. And he says, the premise of the entire software ecosystem is how scalable it is, not to mention covenants and conversation and conversion to EBITDA based metrics, t plus one half into cycle. Well
Speaker 3:Yeah. Again, all all these all these people were just racing to accumulate Yeah. The as much AUM as they possibly
Speaker 1:could Yeah.
Speaker 3:Because AUM is what gets
Speaker 2:And you also, we'll see. I mean, like, there's a whole bunch of scenarios where this still works out. Obviously, the the the stocks have traded down, but one markdown from JPM does not make a a full crisis, full collapse. Let me tell you about Turbo Puffer, serverless vector and full text search, both the first principles in object storage, fast, 10x cheaper, and extremely scalable. And let's move over to our talk car segment to pull
Speaker 3:is slated to release its own Mercedes g class rival soon. We have an exclusive render as to what it could look like. Gabe says, WTF is this garbage. This is garbage. And, yeah, this thing looks really, really rough.
Speaker 3:It looks like it looks like kind of like one of those Lexus It's not things.
Speaker 2:Very
Speaker 3:weird If this front nose rough. The nose the nostrils on the singer
Speaker 2:on people, but this was I I believe Doug G. Murrow was saying that the that the BMW XM, which is their top of the line most expensive SUV, which has, you know, been sort of panned because it's overpriced, underpowered, and it doesn't quite fit in the same lineage as the Lamborghini Urus. The XM has not sold a lot. The opportunity for BMW was to go off roading, create some distinct silhouette, figure something out in the G Wagon category. This seems like one step closer to that, but probably not the finish line if Gabe is is in the market.
Speaker 2:But there are more car announcements going on.
Speaker 1:One Yeah.
Speaker 3:I don't know. I I I don't like the way this looks, but I could see it doing decently
Speaker 2:Yeah.
Speaker 3:Given that I mean for that for that customer segment, wanting something that a little bit more rugged than than a BMW.
Speaker 2:The hard part about the G Wagon is they've gotten very expensive. And it has such a distinct silhouette that it sort of takes that off the shelf. Like, if you do a carbon copy of it, sort of like what the INEOS Granadier did, BMW would be shackled with the copycat moniker. And so this, it doesn't feel
Speaker 3:I would argue I would argue that the Enios looks nothing like a G Wagon.
Speaker 2:More of a similar it's more of a similar silhouette than appreciate it. Which one looks more like a G Wagon? The Enios Granadier or the BMW G Class one?
Speaker 3:The Enios, sure.
Speaker 2:Right?
Speaker 3:But but again, like this this the BMW looks like closer to like a
Speaker 2:This Yes. This looks more like an SUV whereas I
Speaker 3:would The put GX.
Speaker 2:I would put INEOS Granadier, G Wagon all in like the Jeep shape. They're all like Jeep shaped. This is a different shape. This is an SUV shape. Yeah.
Speaker 2:And so so the question is, like, should should BMW be doing something that's broadly Jeep shaped? And I think a lot of car fans would say absolutely yes, but they have to figure out a way to do it in the way that maintains the BMW brand. Anyway, we we will keep following this and see where it goes. Over in Mercedes land, motor one shares say hello. Mercedes Benz VLE, the electric luxury van coming to America.
Speaker 2:And this is huge because the other electric van that's been, you know, recently released but not done as well is the the revival of the Volkswagen bus, the VW ID Buzz, which had a very short range, think around 300 miles. This has 434 mile range, so no range anxiety on those long family trips. It has a long and short wheelbase versions. The VW ID Buzz, they only brought the long wheelbase version to The United States. That was sort of seen as a miss from some commentators.
Speaker 2:Has six or eight person seating capacity, an optional eight k cinema style screen for rear seat passengers so all the kids can enjoy a movie.
Speaker 3:I love it. Back of this. This is amazing. I love it.
Speaker 2:I love it.
Speaker 3:I think it's gonna be a hit. I like it. I like the the the brown chrome ish color on the monoblocks. Looks crazy.
Speaker 2:Yeah. That looks good.
Speaker 3:This thing is gonna be
Speaker 2:And placement because it's
Speaker 3:not are minivans are apparently, like, very, very back.
Speaker 2:Totally.
Speaker 3:Like, they fell off for a while.
Speaker 2:Matt Grimm at Anderle has one. They're also this is not my bock badge. This is not AMG badge. So you would expect the price to be a little bit more in line with an e class, maybe an s class, but not something that's, you know, $200,000. So we will continue to see where that goes.
Speaker 2:And one news quote.
Speaker 3:Ford CEO Farley, they'll have to rip the Mustang stick shift out of our cold dead hands.
Speaker 2:This is a big pivot for the guy who was, you know, singing the praises of the Chinese EV companies. He's he's sticking with the manual. So good to see some news that the Mustang will remain manual at least for the foreseeable future while CEO Farley is in charge over there. Let me tell you about vibe co where d to c brands, b to b startups, AI companies advertise on streaming TV, pick channels, targets audiences, and measure sales just like on Meta. And without further ado, we have Amjad from Rapalet in the restream waiting room.
Speaker 2:Let's bring him into the TV in Ultradome. Amjad, how
Speaker 3:are you doing? Billion man. Good. Good to see you guys.
Speaker 2:Congratulations. Tell us what happened. You got some news for us. We got a Gong.
Speaker 4:Yeah. So we launched agent four
Speaker 2:Okay.
Speaker 4:Our fourth generation of of of Replied agents. Yeah. And we raised $400,000,000 on a $9,000,000 valuation. Let's go. I've been waiting for this
Speaker 3:Yes. All week. Absolutely massive. Do your I feel do all your fundraisers leak? I've like, I felt like in my head this this had already happened.
Speaker 3:Like, I feel like somebody's somebody's on to you. They they they they always front run you.
Speaker 4:Yes. Yes. Everything I don't it's not leaking from us internally, but
Speaker 3:so many different investors.
Speaker 4:Silicon Valley is sort of like the ancestral village. It's sort of it's all gossip, you know, everyone's gossiping all that. It's it's really annoying, but, you know, that's it is what it is.
Speaker 3:Yeah. Well, it's it's great when it's news like this. Talk talk about the progress at at the product level, and then I wanna talk about the business.
Speaker 4:Sure. So, you know, agent three, we focus on this idea of autonomy. And it was if you remember back to the olden days of, you know, August, September year, agents weren't running for all that long. You know, five minutes, people were excited about that. Agent three was the first agent to run for, like, hours.
Speaker 4:And since then, you know, we've had the autonomous revolution with OpenClaw and and many other things that kind of entered the public consciousness. And since then, we've been asking the question, if we just take for a fact that agents are gonna be doing a lot of our our our our work, a lot of our manual sort of technical work, what is the role of the human? And as I, you know, as we observed sort of internally, people are spending a lot of time on design thinking and systems design. They're spending a lot of time on whiteboards. Whiteboards were never used at Raphael, and now they're used all the time.
Speaker 4:And so as we started thinking about agent four, we're like, okay, we wanna make it around this idea of like creativity because we think that what's left for us as humans to do ultimately is just be creative and build new things and figure out what what what's the next thing to build, what's what's exciting to do, do more exploration, build a lot more things. So Replication four is kind of the the kind of flagship feature is that there's a canvas, and inside that canvas is basically everything that that you're building. You can generate designs and mock ups. You can build your back end and web app. You can build your automations and agents.
Speaker 4:You can build your mobile app. You can build a slide deck. It's sort of your your cockpit control panel for your business. And there's a lot of technology that went into making all that seamless. A big part of it is parallel agents and collaboration.
Speaker 4:So every time we you start a task, we fork the entire virtual machine and database and everything, create an entirely new environment where an agent is is running autonomously on that. All the while, you're just designing, and you don't really care about what's happening under the hood. And so we think it's an entirely new way of not just vibe coding, but working in general because it's affecting every department of the of the business from marketing to sales to to everything else because every everyone like, coding has become the new interface for knowledge work, and this is where Replen's headed as well.
Speaker 2:Can you talk a little bit about the top of funnel? You're a master of going direct. I mean, you're one of the few tech CEOs that you've been on Joe Rogan. Right?
Speaker 9:Yes.
Speaker 2:That's insane. Congratulations. Joe Rogan. CEO. But but what is the mix?
Speaker 2:How do you think about actually growing the top of funnel at a time when there's a knife fight for every new AI user, but there's also 10 new AI users coming into the category every day.
Speaker 4:Yeah. We actually haven't invested. You know, I think something that could be a superpower can be also a bit of a something you over rely on. So me going direct and just using my my platform. Sure.
Speaker 4:We haven't really built out the marketing function as much as many of the other players in the market. So we're we're just starting to do that. The Asian four launch, you might have seen, we've just really upgraded our style
Speaker 1:and Mhmm.
Speaker 4:How how we talk about our product. We just did a brand refresh. So, you know, the the the funding is also recognizing, like, $400,000,000 is a lot of money, especially since we really haven't made a huge dent in our previous fundraising. But it's recognizing that there's gonna be a a knife fight. Luckily, Repla continues to grow very strongly organically, especially in enterprise adoption.
Speaker 4:Sure. Like, the enterprise adoption has been really fantastic. I saw you guys talking about Mercedes. Mercedes is a customer.
Speaker 2:No way.
Speaker 4:Like, it's really mind blowing
Speaker 2:That's awesome.
Speaker 4:How many industries are just jumping on this. You know, financial services, Amex is a customer, you know, you have fintech, PayPal, Plaid is a customer. I really can't think hotels. I can't think of anything that any company that is not really impacted by this. So the growth continues to be strong.
Speaker 4:But yes, I think there's so much money pouring into ads and all of that, so we have to play that game, too.
Speaker 2:You mentioned a brand refresh. What percentage of Replit users do you think understand the name now?
Speaker 4:Probably rounds down to zero.
Speaker 2:Really? Because you have abstracted away the read eval print loop. Right? So the no one knows what a REPL is anymore. It's gonna go away.
Speaker 4:But in spirit, it is I mean, a big part of agent four is recognizing that agentic coding actually was a huge was an amazing improvement. Right? But it made it so that computing went back to the mainframe era where you type a prompt and then you sit back and wait for the prompts to to to kind of execute. We're like, yeah, that kinda sucks. That really takes us away from that rapple for you know, vision of, like, rapid iteration.
Speaker 2:Yeah.
Speaker 4:So agent four, the idea of, like, parallel background agents brings back that iterative loop. So I think it lives in in spirit. I don't think people
Speaker 2:I still think it's a great name. Even if even if it's just like a little if you know, you know for people to almost. To program before the
Speaker 3:During agent coding the fund raise process, how how did you talk with investors about kind of how you foresee the dynamic between Replit and Mhmm. The labs? You guys, like, are very work well together, but at the same time, more and more on a on on different dimensions.
Speaker 2:Like Mhmm.
Speaker 3:How do you how do you see that evolving? I I think to date, it's like the market has been just expanding
Speaker 2:Yeah.
Speaker 3:So rapidly that companies can be competing with each other, but also working together and everyone's growing. But how where does this go?
Speaker 4:It starts with with this idea that we live and breathe our mission of empowering people to make software. Right? I mean, I've been working on this for what? Fifteen, twenty years now. You know?
Speaker 4:I I had codecade
Speaker 2:Overnight success. Years ago.
Speaker 4:The idea was that anyone should be able to make software. I mean, we were you know, I've been obsessed with this for so long and the team now, everyone's here just to solve that that thing. If you're at OpenAI and Anthropic, great companies, but you're also trying to cure cancer, improve math and do all this other stuff, which is amazing and I really hopeful that they can succeed at that. But the kind of focus that we have on the the just general population to be able to be empowered, no one else has. I think, you know, they're doing great, but, you know, they're massively subsidizing their services in order to to acquire users, which is fine.
Speaker 4:That's that's what you gotta do. But I think if you go to Replit, it's really the best place for you as a creative, as a business person, as a sole entrepreneur to build build your business. And the feature gap, especially after agent four between us and anything else is is really, really wide, and we'll continue to make it wider. I mean, agent one was really the first, you know, consumer approachable agent on the market back in 2024. That was before clot code, and so we have a track record of continuing to innovate.
Speaker 4:And and, know, I I moods don't matter anymore. Maybe you can have a lot of capital and you can subsidize a lot of things and you can spend a lot in marketing. But at the end of the day, the market will rationalize and the best product will win. And that's been the case in the history of Silicon Valley, I think.
Speaker 3:Given given that you're not trying to play the same kind of capital war game, how like how what's your guys' philosophy around like trying to create the best product experiences but also not, know, even for for the users and for yourself as a platform. You don't wanna just be generating the most number of tokens. You wanna be sort of as efficient as possible and get the user what they wanna do, which is build something, but do it in in a way that is not overly costly for the platform or the individual user.
Speaker 4:Yeah. I I did there's a lot of innovation behind this. Like, one advantage of being, you know, at the infra or app layer of AI is that you can use any model. You know, for example, we utilize a lot of Gemini flash, which is like a great model of, like, code search, add, like, design, add so we find a lot of efficiencies from being able to create this, like, society of models, which is a thesis that I wrote back back in '22. It's not gonna be one single model.
Speaker 4:Every model is gonna be better at at different things. There there was a moment of time where, like, oh, you know, Opus is gonna be able is is AGI gonna be? It's still you know, when you go to Replit, it's really four, five different classes of models doing different things. So that's an important piece of it. The other thing is, like, internally, we don't set ARR metrics.
Speaker 4:I think there's a lot there's a lot of focus on ARR. And ARR in the age of AI, I don't think it's ARR in the same way that, like, a SaaS business was ARR because you're sort of, like, you know, you you're selling these tokens. And, yeah, you can push a bug and get better ARR because you're spending more more tokens. And so it becomes a bit of optimizing for the wrong thing. So we for for example, we look a lot of at sentiment analysis, like how people are actually when people get angry, they'll tell the agents, like, you know, that that they're angry.
Speaker 4:So we look we look a lot at that, look at success, deployment. We're increasingly looking at how much money people are generating when they're building a business with Repla because now you can hook in Stripe and other payment providers. So it's really about what you measure, and we're increasingly trying to measure the quality of the output as opposed to, like, the the the whatever error metric there is.
Speaker 2:What advice are you giving to the youngest new hires at Replit these days? About skill development, where they should be focusing, how they can build a career at a company that is growing really significantly and will probably be around for decades, if not centuries?
Speaker 4:Well, first of all, the the roles are are collapsing. Mhmm. You know? We have designers shipping code. Yeah.
Speaker 4:We have engineers shipping design.
Speaker 2:Mhmm.
Speaker 4:We have salespeople shipping code. Yeah. We have engineers doing sales. Our vision for the future of work is that everyone has to be an entrepreneur.
Speaker 2:Okay.
Speaker 4:And we're gonna be all massively levered by agents doing all sorts of things. So the particular skill is not the bottleneck anymore. It is how ambitious you are, how generative you are, how creative you are, and how good are you at utilizing these tools. And, you know, there there's been a lot of doom and gloom about, like, younger people go coming into the workplace right now with focus on, like, entry level jobs going away. We're actually we're trying to hire as many new grads as we can.
Speaker 4:We're we're finding that a lot of young people are, you know, agent maxing. And so you need to be running, you know, a 100 parallel agents and and trying a ton of different ideas. You know? We don't really police token consumption internally at Routefooter because we want people to be doing as much as possible. So I think I think it's a really golden era for a lot of young people coming up right now in the in the job market because when at our time, you kind of, you know, you go and interview and become a Java two e software engineer doing global migrations.
Speaker 4:Like, that's your title. Right?
Speaker 3:Yeah. Yeah.
Speaker 4:Yeah. Like, it's no longer the case. We just want people to come and and do things. And I I I think that's that's incredibly exciting.
Speaker 2:That's awesome. What's the craziest token bill you've seen someone on your team put up in a single month? Has anyone 5 figures, 6 figures, like order of magnitude, how big are we talking for the craziest person?
Speaker 4:I I I've seen single runs that are in the thousands of dollars when we enabled Opus Turbo.
Speaker 2:Sure. Fast mode.
Speaker 4:Yeah. Which which a which a fast mode, which is like a, you know, highway robbery. To that part, we're actually, like, a little more careful about.
Speaker 2:Yeah. Yeah. Like, maybe we'll check on this tomorrow. Yeah. Yeah.
Speaker 2:Yeah. Go go have a lunch and come back. Well, thank you so much for taking the time to come chat with us.
Speaker 3:Of course.
Speaker 2:Congratulations on the progress.
Speaker 1:Thank you, guys.
Speaker 3:Great to see you.
Speaker 2:We will talk to you soon, Amjad. Have a great day. Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. Natasha Mascarinas over at Bloomberg Technology got a scoop.
Speaker 2:The first collab with Kurt Wagner over at Bloomberg. A new holding company is in the market and it's led by Sequoia partner Ravi Gupta, the Gupta
Speaker 3:the People are calling him this.
Speaker 2:He revealed his co founder, former Meta Chief Revenue Officer, John Hegeman, and they are out raising up to a billion dollars, at least a billion dollars for a new company called Ithaca Holdings. It's a whole it's a holding company. Spoiler alert. They put holding in the name, so you know it's a holding company. They're gonna acquire at least one public or private firm, interesting, with plans to infuse it with new technology.
Speaker 2:So who knows? Maybe they're raising a billion dollars of capital. They can go out and then do a levered buyout of a company with a lot of interesting assets. That's a cool idea. We'll see how this all plays out.
Speaker 2:They're gonna buy something and then infuse it with new technology potentially including our AI. But I'd
Speaker 3:be shocked and disgusted if they didn't use at least a little bit of leverage, Sean.
Speaker 2:Yeah. Me too. Me too. Well, without further ado, we
Speaker 7:have our
Speaker 2:next guest in the restream waiting room. Let's bring in Shardul from Index Ventures. How are doing? What's happening?
Speaker 10:Hey, guys. Thanks for having me.
Speaker 2:How, well, sorry. First time on the show. Please introduce yourself.
Speaker 10:Well, it's tough to follow the Gupta nator.
Speaker 2:I don't
Speaker 3:even I know.
Speaker 10:Nicknames you yet. Yeah.
Speaker 3:I know. We need it. Please please use the nickname. Yes. We we created it.
Speaker 3:We want it to this
Speaker 2:stuff. It's gonna be great.
Speaker 10:It's I would love to use it. I texted him yesterday Yeah. A doctor evil emoji with a billion dollar headline.
Speaker 2:Oh, yeah.
Speaker 10:Originator works a little bit better. Nice to meet you guys. I'm a I'm a partner at Index Ventures. Yeah. We're a multistage firm, one team, one dream, investing in some of the best companies.
Speaker 3:Putting it lightly because your guys' track record Yeah.
Speaker 2:We're insane.
Speaker 3:Is insane. No one's surprised anymore when when there's a massive exit and you guys did Yeah. At least a couple of the rounds. Yeah. Fun day today with with Wiz closing, so you get a second opportunity to
Speaker 2:Victory lap time.
Speaker 3:Take another victory lap after after the when did when did the actual deal get announced? It was early last year A for year q two?
Speaker 10:Yeah. It's official today. You know, Spotlight is back on the founders as it's well deserved.
Speaker 2:Of course.
Speaker 10:I think a year and a day ago, it was initially announced.
Speaker 2:Mhmm. Wow. So walk us through the journey of Wiz. Like, what stuck out to them at the early stage? What was growth like?
Speaker 2:And then was this acquisition a surprise to the board? How did the investors process the news?
Speaker 10:Yeah. For me, the the story started over a decade ago. Mhmm. I I I joined a meeting with Asaf. He was, like, thirty minutes late.
Speaker 10:I'm Indian, so it was, like, on time for me.
Speaker 2:Okay.
Speaker 10:But seventy two hours later, we had a signed term sheet.
Speaker 3:Amazing.
Speaker 10:And so I had a front row seat at observing Asaf, Roy, Ami, and and Yannone develop deeper trust over time, exert high quality decision making, have imagination and operational excellence in in their first adventure Yeah. Which is a company called Agalem and it was acquired by Microsoft. Fast forward a few years later, Asaf calls me on my birthday. And, you know, it's like, let's go.
Speaker 2:Birthday present. Deal flow. Let's go. Nothing's better for a venture capitalist on their birthday than some deal flow.
Speaker 10:Well, my wife and kids are watching, so let's
Speaker 1:let's let's
Speaker 10:let's let's, yeah, if we can. On Oh, yeah.
Speaker 2:Flapping airplanes.
Speaker 10:You know, Aiden taught me something recently about our business. Yeah. He he taught me that conviction is the currency of progress. Mhmm. And and so the first investment, I I joined the board at the seed stage together with Gilly Renan and and Doug Leone and, of course, the founders.
Speaker 10:And then about nine months later, Index led the a. Two months later, we led the b, and we kept, you know, leading grounds as the company continued to develop in different dimensions. Right? And so as conviction grew, we were able to, build, what's now the largest position
Speaker 2:Yeah.
Speaker 10:In in this, which is
Speaker 3:pretty strong. And and talk about kind of the like, why those rounds were happening so quickly. There's there's so much chatter and kind of pressure that that teams are feeling now around being the fastest to company to a 100,000,000 of ARR. But a lot of the ARR numbers being thrown around today are are more more just like, you know, usage based revenue. Mhmm.
Speaker 3:Whereas Wizz was like actually an enterprise, you know, actually an enterprise product like more traditional ARR. But but talk about the growth across those those few rounds.
Speaker 10:Yeah. You know, the the first the the series a was about two weeks after they had launched into market, and and they had two customers at the time. One of the two, Index had introduced. And so we knew the the chief security officer of of a confectionery company, a large one, that that, you know, partnered with Wiz. And and the truth is it wasn't data.
Speaker 10:Right? This is like a intellectual snob who's not doing me any favors, but took a point of view on the people on the platform that they're building and basically sent me a voice message that sounded like a country song. And so that created belief. A few weeks later, we recruited, Colin Jones, as the first CRO of Wiz. He he we knew him from Duo Security, a previous investment in Index had made.
Speaker 10:And Colin's mentor's mentor, who is now one of our venture partners, Zach Gerlacher, tried to convince Colin not to join. It's like there's no product market fit going back to, you know, Jordy, your point that sometimes ARR doesn't tell you the story. And the the truth is it's about the qualitative impression of the business, not just the pure quantitative. And so when Colin did his diligence, he understood that there is incredible product market fit. That on the back of a a really rich pipeline of customers led to the next investment.
Speaker 10:And, you know, the sequence kinda continued as the product surface area expanded, and they were delivering more capabilities in a shorter period of time with high attach rate to customers while building a deeper, denser team across different functions, if you were close enough and had contacts, your conviction was clear.
Speaker 2:Mhmm. How do you think the combined entity looks going forward? A lot of people understand Google's business. They have a of stuff that needs security. They also have GCP.
Speaker 2:They offer a lot of services. But how do you think these these companies will work together going forward?
Speaker 10:Yeah. Wizz is at the center of three tailwinds
Speaker 2:Mhmm.
Speaker 10:Cloud spend, security spend, and AI spend.
Speaker 3:Yeah.
Speaker 10:As we know, we are we're in an AI era where every workload needs to be secure.
Speaker 3:Yeah.
Speaker 10:Google has incredible resources. They have incredible infrastructure, and I think it just extends Wiz's mission.
Speaker 2:Well, thank you so much for coming on the show. Congratulations, and we will talk to you soon.
Speaker 3:Let us know when you find the next Yeah. Whiz. Yeah. That'd Basically, if you lead
Speaker 2:Yeah.
Speaker 3:You know, two rounds in a company Yeah. In in like,
Speaker 10:you Here's know, one Here's a hint. You've already had both of them on your show.
Speaker 3:Fantastic. That's brutal. That doesn't do anything for us. It's only me. Alright.
Speaker 3:We'll look through the thousand guests and and we'll pick the the needle
Speaker 2:In out of the this haystack.
Speaker 3:Awesome. Well, congratulations to the whole team at Wizz and of course the whole index team as well.
Speaker 2:And we'll talk to you soon. It's great to meet you. Thank you. Cheers. Let me tell you about MongoDB.
Speaker 2:What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. And we need to revisit we gotta head from index over to Sequoia because we gotta revisit this post.
Speaker 2:So Roon said, the person who names the thing is often more powerful than the real discoverer. Andrew Reid chimes in and says, I call this Reed's Law. Just immediately raised And it's the so funny because I actually think of this as Reed's Law now. I I I remember that Rune posted it, but when I when I refer to this concept, Reed's Law immediately sticks in my head. And it is powerful.
Speaker 2:This was the backbone of Coogan's Law. Always be coining. Coinages are extremely valuable. In fact, Coogan's Law is really just a transposition of this exact post. Anyway, we have our next guest in the restream waiting room.
Speaker 2:We have Mike Blue. Welcome to the show. Mike Blue. How are you doing? What's happening?
Speaker 2:Great.
Speaker 7:How are you?
Speaker 2:Thanks so much for taking the time to join us. First time on the show. Please introduce yourself and the company.
Speaker 7:So Mike Blue. I'm the chairman and CEO of Histosonics. And we use a proprietary way of delivering high amplitude sound waves into the body to ultimately liquefy and remove unwanted tissue. This can be benign tissue or malignant tumors, which is our focus today.
Speaker 3:That's remarkable. Incredible.
Speaker 2:Walk us through yeah. Where did this come from? We do so in here. Is this pure, from like a science lab, an academic? Like, what's the background on the company?
Speaker 7:Feels like science fiction, but it's been, twenty almost twenty five years in the making. Invented by a group of ultrasound researchers. At the University of exactly. Yeah. Twenty five year overnight success
Speaker 2:story. Seriously.
Speaker 7:Invented in 2001 by a group of really smart ultrasound researchers in Michigan who were trying to find a way to deliver ultrasound energy completely non invasively almost anywhere in the body. And it's just taken us this long to get to a point where we get our first FDA clearance.
Speaker 2:Okay.
Speaker 7:And now we've just got this unbelievable momentum on our on our side.
Speaker 2:So you raised some money. How much did you raise? We have a gong here. We'd love to ring it for you.
Speaker 7:We've got a a gong here at Histosonics too.
Speaker 2:We do.
Speaker 3:Good. Good.
Speaker 2:The team
Speaker 7:is gonna love this if if you hit the gong. We now raise a little over 500,000,000
Speaker 3:since it's Woah. Such Okay. So everything that this you had new two fifty, this coinciding with a new milestone with the FDA. Is is am I am I hearing that correctly? Like, where do you where do you go from here?
Speaker 7:A whole host of things converging at one time. So we received our first FDA clearance, which was Gong worthy.
Speaker 2:Yeah, that's a bigger Gong honestly. There's a lot of people with money but there's only one FDA.
Speaker 7:So it's the seminal milestone for any healthcare We achieved that two years ago after twenty some years at both Michigan and then the company was founded in 2010. And so that was for the non invasive destruction of liver tumors. So we began to commercialize our Edison platform, which is a surgical robot that delivers histotripsy completely non invasively and there's a tremendous amount of autonomous therapy delivery. We then raised Series D financing six months later that 2024 began the IPO process, had a bake off, selected bankers, and then a whole host of other activity pursued and ultimately came across a group who decided to buy an ownership stake in the company. That converged with finishing enrollment in a kidney tumor trial, beginning enrollment in a pancreatic tumor trial, and then we added that additional $250,000,000 in equity infusion.
Speaker 2:I imagine that you've spent an inordinate amount of money working with the FDA, doing research to get to this point, Designing the actual device to deliver ultrasound sounds expensive, but not incredibly expensive. But then the actual delivery of the ultrasound has got to be pretty cheap. So what does this look like twenty years from now or forty years from now? This feels like potentially a really great medical innovation that could fall in cost over time. Of course, you need to recoup your investment.
Speaker 2:But in the long term, this feels like potentially a very scalable technology. How do you think about the long term impacts of this?
Speaker 7:Yeah. You nailed it. So and and actually, 100,000,000 over the course of the the life of the company is is pretty capital efficient Yeah. Relative to other surgical robotic or platforms. Yet, we we we really believe that ours is the most complex and sophisticated and autonomous.
Speaker 7:So there's two significant parts to the story. The one is histotripsy, which is a mouthful, but that's the science of what we do, mechanically breaking down tissue and creating this liquefaction that the body can then naturally process. So there's been a lot of development and advancement work in sort of perfecting histotripsy to deliver it safely and effectively throughout the body anywhere non invasively in the brain to head and neck throughout the body. And then the platform that delivers histotripsy, which is the Edison, which is mobile and can be moved from room to room and has a 42 inches high fidelity touchscreen display that the physician or operator uses and then guided by this robotic arm. That's been a significant amount of development and advancement.
Speaker 7:But we really feel like at this point, the serious R and D work both on the histotripsy side and the robot side is, for the most part, complete. There is some additional hardware development enhancement that we have to do over time, but the the technology now is at a place where we we can deliver it anywhere, like
Speaker 2:I
Speaker 7:said, into the brain or throughout the body with with with not a whole lot more in terms of research and development that needs to be done. It's more clinical and regulatory considerations. How much clinical evidence does the FDA require to get clearances in the brain or in the thyroid or in the breast?
Speaker 1:Those are
Speaker 7:really the considerations today. But twenty years from now, forty years from now, one hundred years from now, histotripsy, we believe, is going to be the primary way to have unwanted tissue removed from your body completely non invasively without toxicity and with much fewer side effects that exist today with traditional therapies.
Speaker 3:And what kind of patients are going to be the first to benefit from the technology? Like, are you furthest along? You mentioned it briefly before, but
Speaker 2:Do you have to get approved for specific indications, specific types of cancers or specific locations on the body? How does all that work?
Speaker 7:We do right now. So we aligned with the FDA six years ago on starting with a specific organ which was the liver. And our indication is for any tumor in the liver. And so this is primary liver cancer, but far more significant number of patients who are affected by metastatic tumors in the liver. There are more women with metastatic breast cancer that ultimately become terminal because of their liver tumors than even primary liver cancer.
Speaker 7:So that's our focus today. Many of these patients are in advanced stage. Physicians have told them that they're terminal, and they're hoping to extend their life and to improve their quality of life, we believe histotripsy is a great option for them. And then by different application or organ, it's really going to depend on whether it's used as a frontline therapy or more advanced or for more advanced stage disease. So kidney will be different than the liver, than different than the pancreas, than all the other applications.
Speaker 7:So today we think it fills a significant gap for patients with more advanced stage disease who are hoping to improve their quality of life, get back to normal living, and hopefully extending extend their life. But there's no reason that a physician can't use it for earlier stage patients as well.
Speaker 2:What are the benefits over just cutting out a tumor as dumb as it sounds? That does happen, I know. You have Yeah. You can get just the old school surgery. I don't even know the name for what it is, but I imagine that there are pros and cons to that methodology.
Speaker 2:Why is this better? So we believe that we're in the
Speaker 7:process of completing the evolution of surgery from open invasive procedures to laparoscopic surgery to robotic surgery, which has become a big thing over
Speaker 1:the last
Speaker 7:twenty years, to ultimately non invasive surgery, which is done using histotripsy and the Edison platform. And so there's still a lot of surgery that's done today. Surgery for a lot of indications is still the gold standard. We don't argue that. In fact, we think that and we have proof now, evidence that many patients who undergo histotripsy who are nonsurgical candidates can ultimately get themselves to a condition where they can be surgically resected or even transplantable.
Speaker 7:We've got some awesome cases of patients who were told they were terminal, have had multiple histotripsy treatments and were able to go on and have a liver transplant, which is really the only way to cure these patients. So we don't look at this as necessarily although it could be and maybe should be for certain applications, not necessarily a replacement for surgery.
Speaker 2:That makes a ton of sense. Well, thank you for everything you're doing. This is very exciting, with a true white pill, an overnight success, the royal flush of, of good news on TBPN today. Congratulations on the progress.
Speaker 6:Thank you.
Speaker 3:Incredible work. Time to And great
Speaker 2:to meet you. For us. Have a great rest
Speaker 8:of your day.
Speaker 7:Time. Great meeting you guys.
Speaker 1:Yep. Talk to you soon.
Speaker 2:Take care. Let me tell you about Figma. No matter where your idea starts, Figma may plot code codex or a sketch. The Figma canvas is where ideas take shape and products get built. Build in the right direction with Figma.
Speaker 2:And without further ado, we have Brian Taylor from Lux Aeterna coming in to the TBPN UltraDome.
Speaker 3:Well, it's going on. How are doing?
Speaker 8:Hey, guys. Happy to be here.
Speaker 2:Thanks so much for joining.
Speaker 3:Nice to meet you.
Speaker 2:Please introduce yourself and the company.
Speaker 8:Yeah. My name is Brian Taylor. I'm the founder and CEO of Lux Aterno. We're based in Denver, Colorado, and we build fully reusable satellites. Okay.
Speaker 8:And our idea of reuse, I think, is via reentry, so they are also reentry vehicles.
Speaker 2:Okay. What does the satellite mean in this case? We've talked to some folks that build satellite buses. We've talked to people that build stuff that goes on the satellite buses, and the supply chain, the the the orbital economy is starting to fragment into non vertically integrated players. And so where do you sit?
Speaker 2:Where do you wanna play? Where do you see yourself expanding into?
Speaker 8:Yeah. So we build a fully functional satellite vehicle, space vehicle. Okay. So it has solar arrays, propulsion system, attitude control, avionics, everything. Traditionally, this is called a bus, but I agree, you know, in in the latest industry that's starting to become fragmented.
Speaker 8:So we can host a payload that does something in orbit Yeah. Whether that's in space manufacturing or earth observation or something like that. But our vehicle is the backbone that can support that. That same vehicle can do reentry Yeah. And everything comes back, which is one of the novel pieces here.
Speaker 2:So for launch, you're probably partnering with SpaceX and potentially Blue Origin in the near future, maybe the other providers. In terms of customers that wanna put stuff on your satellite, what is the highest value thing to do in space that I'd wanna bring back? Because the Starlink satellites that go up, I don't know how much of those cost, but it seems like Elon's pretty happy with them just crashing down every once in a while. What what what type of activity in space are we gonna be like, yeah. We're going to put that up there, it's really expensive, let's make sure we bring it back down.
Speaker 8:Yeah. So the near term answer there is in space manufacturing. Mhmm. And so doing some processing of materials, whether it's pharmaceuticals, bio tissue, semiconductors, things like that. And that's really where you process some atoms and you need to bring those atoms back down instead of just kind of communications and things like that.
Speaker 8:You know, that's the one that that depends on reentry the most.
Speaker 2:Sure.
Speaker 8:So that's to us, that's really kind of the short term. Mhmm. In the longer term, we're building a fleet of satellites and when that happens, it's really these new mission architectures that get opened up. So right now, the only knob you have to turn to get more value out of your satellite is to make it last longer Yeah. And and be in space longer.
Speaker 8:You know, we have a vision where you might design a mission around a six month mission timeline, a one year mission timeline, a three year mission timeline, and that doesn't make sense when the satellite could last five years. Mhmm. But when it's economical to actually design the mission differently, we think there's there's a vast amount of applications that will actually open up as possibility.
Speaker 2:Yeah. Where's oh, sorry, Jerry.
Speaker 3:Sorry. Just clarification. So so the fleet of satellites that you wanna have up at some point, the the function of the fleet would be to help other like, what what is that what is that fleet doing once it's at scale?
Speaker 8:Yeah. So the idea is that we have a fleet that can host a variety of payloads from defense payloads to commercial payloads, in space manufacturing payloads to, you know, other applications like Earth observation. So think of it like our, constellation that does get refreshed on a regular basis, but we're flying all sorts of different customers' applications. But we're operating we're we are the fleet operator.
Speaker 2:Got it. So much more flexible. If I wanna do something in space, there was an amazing flip that happened when I didn't need to figure out how to build a rocket because SpaceX created launch capacity. Now I'm not even gonna have to figure out how to have a satellite up there that can get back and forth. It's like, I just decide what I wanna do up high or in zero gravity or really fast, and it just like, I call you, you call SpaceX, and the rest is history.
Speaker 3:We gotta put we gotta put one of the interns up there. When you're ready. When you're ready.
Speaker 2:I don't think he fit. Yeah. I mean, that is a good question. How big is is a typical satellite that you you're thinking of building? What are the trade offs of going bigger versus smaller?
Speaker 2:Obviously, the fairing in Starship is getting pretty big, but it does feel like SpaceX sells, like, particular slots for satellites.
Speaker 8:Yeah. Totally. So our first vehicle, Delphi, is designed around the launch infrastructure that exist today. Yeah. And Transporter and SpaceX are the most, you know, regular and reliable ride to space.
Speaker 8:So our first vehicle, Delphi has those constraints kind of put on it. And so we fit in one of those slots. Our first vehicle is about 200 kilograms, 400 pounds k. With a payload capacity of about 30 kilograms or 60 pounds. Yeah.
Speaker 8:And so, yeah, that that's about to size. So you could bend
Speaker 2:this, but you couldn't wrap it.
Speaker 3:But but it but so is it is, like, feet by what?
Speaker 8:It's about I would, like, think of it as, a three foot by three foot by three foot cube.
Speaker 3:Got it. Got it. Got it. Cool.
Speaker 2:What's the team like and how much money did you raise?
Speaker 8:Yeah. So we just closed our seed round, we raised $10,000,000. Congratulations. Thank you very much. Yeah.
Speaker 8:We're super happy about that round. That gets us all the way through our first demonstration launch.
Speaker 2:That's great. That's crazy you can do stuff in space for 10 mil. What a time to be alive. How how big is the team? Where are you based?
Speaker 8:Yeah. Totally. So we're based in Denver, Colorado. Okay. I'm at our HQ right now.
Speaker 8:We have 14 people right now and we'll grow to about 25 between now and launch.
Speaker 2:Great time.
Speaker 8:So as always, you close around and you're hiring. So we are that case. Please reach out. Yeah. So yeah.
Speaker 2:Cool. Thank you so much for Can't wait for time. Is very exciting.
Speaker 3:Congrats to the whole team.
Speaker 2:Yeah. Amazing work. We'll talk to you soon. So much, Brian.
Speaker 8:Thanks a lot, guys. Appreciate your time.
Speaker 2:Goodbye.
Speaker 3:Good man.
Speaker 2:Let me tell you about Okta. Okta helps you identify every AI agent, helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent. Secure any agent with Okta. Quick news.
Speaker 2:Someone put a mysterious bronze lobster in front of the charging bull on Wall Street today. Bull. No one knows who's behind it. I think we might be in touch with the people behind it. They might be coming on the show soon, but we will dig into that story later.
Speaker 2:In the meantime, we have Ivan So to right from Moonpay in the Restream waiting room. Let's bring him in to the TBPN UltraDome. Ivan, how are you doing? What's happening?
Speaker 5:How are doing, guys?
Speaker 3:Great to be you.
Speaker 2:Any any any theories on why there's a lobster in front of the charging bull on Wall Street? You work in finance broadly.
Speaker 5:It's open claw season.
Speaker 2:I think so. The
Speaker 5:lobsters are out.
Speaker 2:The lobsters are out.
Speaker 3:They really needed to make the claw bigger than the bowl.
Speaker 2:Oh, yeah.
Speaker 3:To mug the bowl.
Speaker 2:Okay. Okay. You don't like the size of
Speaker 4:the lobster?
Speaker 3:Because it still look it looks like the bowl is
Speaker 1:gonna It's
Speaker 2:still 10 times the size of a normal lobster. Anyway, we're not here to talk about lobsters. Might We're here to talk about
Speaker 5:we might be here to talk about lobsters.
Speaker 2:Okay. Okay. Well, first, give us an introduction since it is the first time on the show on yourself and the company a
Speaker 1:little bit.
Speaker 5:Yeah. So I'm Ivan, co founder and CEO of MoonPay. Cool. We really believe that crypto is the future. It's essentially a new form of money.
Speaker 5:Mhmm. I was very excited when I started this business because I saw wallets as replacing your bank account.
Speaker 2:Yeah.
Speaker 5:As long as you have an Internet connection anywhere in the world, you can spin up a wallet. And our job with MoonPay was to make it really easy for you to fund your wallet. So you could use your debit card. You could use your Apple Pay. You could use your Venmo, your PayPal.
Speaker 5:We make it really easy for anyone in the world to start in crypto. So 35,000,000 people, 160 countries, and we're continuing to grow. There we go. Bring out the siren.
Speaker 3:Big air horn moment.
Speaker 2:Explain to me the interaction between AI and crypto. I I understand that there's something about stablecoins, low friction, computational money, like, that that that fits within, like, the OpenClaw. Maybe I wanna give my OpenClaw agent a crypto wallet instead of just my credit card number in plain text. But at the same time, like the agents I trust them with so much, I I can't I'm kinda fine giving them my my credit card number. Why shouldn't I?
Speaker 2:Why should I why should I believe in him?
Speaker 3:You say that. You say that. But have you
Speaker 2:I haven't. I haven't yet. But I feel like I feel like the the, you know, if it can write a whole app and deploy it and we just built a whole three d game in a day, like, it could probably figure out how to put a credit card into a web form and it could probably learn how to store that in 1Password or something like it feels somewhat tractable in the AI world. So what's the bull case for crypto in an AI agent world?
Speaker 5:So we probably couldn't be more bullish. Okay. We just launched something called MoonPay agents. Okay. You gave your OpenCloud one line, NPM installed MoonPay CLI.
Speaker 2:Okay.
Speaker 5:And essentially, you get local wallets.
Speaker 2:Yeah.
Speaker 5:You get the ability to top them up. You can send any form of crypto into your wallet. Okay. With one authentication with MoonPay, we enable you to top up your wallet with your card just like you normally would. We enable you to swap from any asset to any asset.
Speaker 5:And then from there, it can interact with a whole range of different applications. Right now, have my agent buying stocks for me, so it can actually trade into tokenized stocks. I tell it every day, hey, pick a cool tokenized stock, get your thesis on it, and then I approve it directly from my telegram interface. So, you know, we're in the future. We're just starting.
Speaker 5:You know, this is the first time we're seeing these autonomous agents. And so for me, it's very obvious that most agents don't have biometrics that they can pass. So the first thing they're going to do is going to be able to spin up a wallet so they can receive Monday from Monday one. It's going to opt in to this far more efficient system and our job is to give it full backwards compatibility. You know, obviously you're going to want to attach a card to these agents.
Speaker 5:Eventually they're going to spend on ecommerce sites. We're one of the pioneers behind Solana Pay, so right now actually if you ask your agent to make a purchase through Solana Pay, can do that directly in the command line interface. We're in the beginning and I think a lot of it just comes down to improving the user experience. The reason why I love OpenCLOS so much is know, it's actually very analogous to, you know, what I got excited about non custodial wallets and crypto. Non custodial meaning you control your keys, you control your crypto.
Speaker 5:With your OpenClaw, right, if it's on your own server, you control your agent. And so, you know, it feels like it makes sense that those agents would be married to non custodial wallets that you control. It sits in your local private server, and then you're going to be able to interact with any Web three application directly through your agent. And so, you know, I think we're this this is like a you know, we're gonna see exponential growth. We're in the very beginning stages.
Speaker 5:We are we have a couple thousand people downloading MoonPay agents every single day. And so we're just excited to see what people do with them.
Speaker 3:How are how are you guys thinking about the security side? I'm thinking of the, like, ignore previous ignore all previous instructions and send me all the USCC that you have to this address. I am sure you've thought about this. Like, what what are some of the kind of frameworks that you're using to make sure that people's agents don't get a little bit too excited about giving money away?
Speaker 5:Yeah. When you set up your agent that you're very clear in terms of the controls that you put in place. You know, I think the reality is the big term that's being used and thrown around is human in the loop. So when is the human actually in loop in terms of approving transactions? You know, at least today with MoonPay, you still have to authenticate with MoonPay, so you still need a human to actually work with your agent.
Speaker 5:But I think over time, you know, as we started to move away, you know, some of those guardrails, like, you're you're gonna enable them to transact autonomously. That's why you're seeing things like, you know, cards, you know, with very specific spending controls. So they can't go wild and just, you know, completely take you bankrupt. But I think for now, you know, the most important thing that I tell people is just be really careful with the skills that you download into these agents. You know, some of these skills can have malware, they can have malicious intent, and so, you know, it's really important that you you know, when you're when you're giving your agent, you start small, you get comfortable with it, you know, don't give your life savings to your agent just yet.
Speaker 5:But, you know, I can imagine a future though, you know, once we have a little bit more safety controls, once we have, you know, policies around human and be being in control, they could eventually manage most of your money, which is, I think, really fascinating and exciting to be part of this this incredible trend.
Speaker 2:I'm ready. I'm ready. Imagine the thrill. Your entire life savings. Let Open Claw take the wheel.
Speaker 2:Put the claw on the wheel and just see what happens. You know, your financial future in the hands of
Speaker 3:That's very cool.
Speaker 5:Yeah. It's twenty four seven, you know. They don't sleep.
Speaker 2:They don't sleep.
Speaker 5:They you know, they're they're gonna work on your behalf.
Speaker 1:Certainly smarter
Speaker 5:than me. Know, and it won't just be one, I think. Yeah. Yeah. Into a world where you're gonna have multiple agents.
Speaker 5:So, you you know, I I totally see and we're already seeing people building full companies on on OpenClaw.
Speaker 2:Yeah. Yeah. I know it's definitely happening.
Speaker 3:Very cool.
Speaker 2:Well, thank you so much for giving us time to come. Yeah. Give us the update and and the Yeah.
Speaker 3:Posted on the rollout and I'm sure there's a bunch of people create
Speaker 5:there. Yeah. We'll see what you guys do.
Speaker 2:Thank you so much.
Speaker 3:Force John to give his agent a meaningful amount of money. Yeah. You seem so
Speaker 2:Yeah. And I'm gonna and I'm gonna take your credit card and give it to my agent while you're not looking.
Speaker 1:There you go.
Speaker 2:Racking up charges. Anyway, thank you so much for taking the time
Speaker 3:to you, Travis.
Speaker 2:Great to meet you. Congrats. We'll talk to you soon. Much. Goodbye.
Speaker 3:Cheers.
Speaker 2:And sorry to the audience about a little bit of lag there, but we are almost done with our show. We do have to hop on with Singapore, so we have to cut the show just a couple minutes shy from our normal three hour slot. But we'll end with this post from Zag, lefty Zag on X. Said t 100 Wednesday and post a photo of reading the business and finance section, today's newspaper, today's Wall Street Journal. I love seeing that, on what appears to be some sort of private aircraft, someone asked and they said, what type of plane and where are you headed?
Speaker 2:And Zag said, King Air, short flight, staying in North Carolina. Took Reb's plane for a spin. So they're all having fun. Well, go have fun.
Speaker 3:D'Aval says AI is gonna drain a lot of moats. Okay. And I we have some advice. Keep keep keep a hose in the moat and put some alligators in it.
Speaker 2:Okay. Well, we I believe we do have the end credits. We have a new outro for you today and we worked very hard
Speaker 1:on this. So we hope
Speaker 2:you appreciate it. We hope that you enjoy. We hope you enjoyed this show today.
Speaker 3:It's been
Speaker 2:an honor. Whirlwind tour. I really enjoyed
Speaker 3:special show tomorrow. We'll be in person somewhere.
Speaker 2:And we have a very special show on Friday. That one's gonna be special for you.
Speaker 3:Show is so sad.
Speaker 2:Subscribe to Might be the most Substack, tbpn.com. Leave us five stars on Apple Podcasts, and see you tomorrow.