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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TPPA. Today is Friday, 09/05/2025. We are live from the TPPA Altar Dome, the Temple Of Technology, the Fortress Of Finance, the capital of capital.
Speaker 2:We have a great show for you today, folks. Thought we'd mix it up. People have been complaining about the screaming. Just
Speaker 3:The yelling.
Speaker 2:Take it in a different direction.
Speaker 4:We heard you.
Speaker 2:I think I think we'll be back to yelling on Monday. That was pretty weird. Yeah. Anyway
Speaker 4:Never again.
Speaker 2:Never again.
Speaker 4:Should we actually just dial it back and run it back again?
Speaker 2:You wanna do it again? A second take?
Speaker 4:Yeah.
Speaker 2:Okay. You're watching TVPN.
Speaker 4:We're back.
Speaker 2:Current thing is big numbers. $200,000,000 for the free press. They're licensed media company to CBS. People did not like the quiet in the chat. They said, scream.
Speaker 4:We're back
Speaker 2:to the $610,000,000 for the browser company. We talked about that a little bit yesterday. Ramp hit $1,000,000,000 in ARR. Let's carry.
Speaker 4:Great hit. Great hit. 600,000,000,000 in meta CapEx.
Speaker 2:CapEx and 1,000,000,000,000 potentially on the table for Elon Musk at Tesla. So we're gonna go through this. So the free press is one of the most impressive media companies built in the last decades as Austin Reef from Morning Brew. Correct?
Speaker 4:Yes.
Speaker 2:Huge congrats to Barry Weiss, Nelly Snoozy Weiss, this is a funny name, for building something truly different. This is, I think, still rumored. I don't think it's fully confirmed at this point, but it's all but.
Speaker 4:Yeah, was hard to tell which side was leaking, the news,
Speaker 2:Yeah, there's felt like a dynamic where media likes to talk about media, and I feel that 100%. It's super interesting to hear about the business of Joe Rogan or the business of Huberman or any of the experts. So obviously, also, you're surrounded by journalists, literally, if you run a media company, so they all lot of journalistic force headed towards you, stand by. But you're surrounded by journalists and so obviously everyone talks and the media leaks out and the news leaks out.
Speaker 4:And it could be interesting ways for either side to put pressure on getting the finish line and getting what they want out of the deal.
Speaker 2:Yeah. And so there's a series of takes. I was talking to a buddy who works in media who was coming at me with like a, it's a crazy number. And so that's kind of level one. Level one of the take is like on a price per subscriber basis seems high.
Speaker 2:Think they have about a million free subscribers, 200 per free subscriber feels like a lot, I guess. Kind of hard to tell if you think about long term value for CBS. But then others are complaining about the political implications of the deal. Is this something that's like a give to Trump to help get the demerger, the spin out approved, something like that.
Speaker 4:Yeah, and I mean, this is an $8,000,000,000 deal, this merger, and media companies are now entirely, media companies at their best are personality led, and paying $200,000,000 to bring on a face for CBS, one of the most important properties makes sense.
Speaker 2:Yeah. That's my level three final take, which is that you sort of have to put aside the price per subscriber take and you have to put aside the political implications of the take. I just think about it from, it's a big company, 8,000,000,000, you said, something around there. Does bringing a younger, more entrepreneurial talent into the organization move the market cap by 1% or 2% over the next few years. It seems like the same math that we're doing for buying a very expensive AI researcher.
Speaker 2:You're paying a lot of money in terms of what a salary would count, but you just can't get that level of talent on any sort of
Speaker 4:value normal the overall property.
Speaker 2:Exactly, exactly. And so the person I was talking to who was like, this is a ridiculous price. I was like, yeah, but dude, if you were at CNN, you could probably add $200,000,000 of value to that organization pretty quickly. And so it's just a matter of time until the market and the board of directors and the shareholders kind of wake up to that dynamic of how power law certain people are and actually go and figure out how to get the deals done.
Speaker 4:And David Ellison is doing deals, right? He just did
Speaker 2:the C deal. 100%. So there's
Speaker 4:a lot of big numbers flying around.
Speaker 2:And there's an interesting dynamic And where the
Speaker 4:premium, right? We saw this yesterday with the browser.
Speaker 2:Oh, yes, yes. So you do get a big, fantastic the
Speaker 4:outcome for having the the at the beginning of
Speaker 2:the name. Maybe we should just be the business production network. Drop the technology. Technology's over. The hype cycle's peaked.
Speaker 2:We're just the business production. We're in the trough. We're in the trough. We have some fun stuff coming in terms of the hype cycle soon. But it's interesting because many companies just cannot justify putting someone on staff for a $100,000,000 w two.
Speaker 2:I mean, we've seen this at Apple with Tim Cook. You know, the the CEO pay, once you get into the the these $8.09 figures, it
Speaker 4:just No. Gets Thank you for no. Seriously, thank you for bringing that up.
Speaker 2:Oh, yes. Thank you.
Speaker 4:Apparently, Tim Cook, we'll try to pull up this video in Apparently, a he said thank you 12 times in two minutes when talking with President Trump last night at the dinner. Yep. No, he's very grateful.
Speaker 2:Meta's like the first company to really break this trend of just like, yeah, we're willing to pay $100,000,000 in salary. We will do the crazy acquisitions and the acqui hires to get really talented people in the org, but I don't think other companies are in that world where they could go out and hire somebody like a Barry Weiss just for $100,000,000 It's got to be done through an acquisition. That's what gets board approval. That's what gets shareholder approval. And so you're kind of wrapping an individual, an influencer, someone who's incredibly talented and entrepreneurial around an organization just to actually get the cash flow to flow through.
Speaker 4:It's making me think about CBS News for the first time in decades.
Speaker 2:Yep, yep, yep, yeah, it's true. And even if subscriber numbers are a little low, I mean, honestly, a million's a ton, it's a great job. But even if they are a little low, it's like, well, what are they compounding What will the free press be able to be at in a decade with the support of CBS and the financial backing of CBS and Barry Weiss' execution strategy? Could be 100,000,000. I don't know.
Speaker 2:It could be really, really big. But you don't have to raise money for it. You you you can just focus on growth. Anyway, similar story at the browser company, $610,000,000 from Atlassian. Very interesting deal.
Speaker 2:The timeline was not a fan
Speaker 4:of this. Came from the land down under with a brinks truck.
Speaker 2:And so a lot of people are asking, this summit run around by the Australian government to try and influence the browsing habits of Brooklyn hipsters? Yep. I don't think there's much Try
Speaker 4:to control the narrative.
Speaker 2:Exactly. As
Speaker 4:a way to say, what if we could get all KAUFMAN: of the
Speaker 1:data from Brooklyn hipsters, all their browsing information Yeah. They're known communication.
Speaker 2:Yeah, they're for drinking PBR. But what if every time they went to PBR on the ARC browser, the DIA browser, it just automatically rerouted them to Fosters.
Speaker 4:Yeah. What if Or the AI assistant on the side popped
Speaker 2:Oh, you're in Dia. You might like that. You're asking, oh, what should I do this weekend? And it just auto populates, oh, yeah, we're using AI. Why don't you throw another shrimp on the Barbie?
Speaker 4:Yeah. And if you search, is it true that kangaroos are extremely violent, it'll start spinning it and saying, well, actually, they're only violent when provoked.
Speaker 2:Provoked. Yeah. They're actually quite useful.
Speaker 4:Yeah. Your dog actually tried to barked at the kangaroo and the kangaroo went after it. Exactly. Exactly. I this is really smart from Australian,
Speaker 2:from When people pulling the strings in Australia. Yeah. Get a little bit more influence over the Brooklyn hipster and the Arc and Dia user. Zeb did not like the acquisition.
Speaker 4:This up.
Speaker 2:Me uninstalling Arc as a certified Atlassian hater. Is a wild gap between the vibes. And so some people have this take that it was a vibe acquisition. They acquired good, better vibes with the next generation of founders.
Speaker 4:Artsakh think this has a is funny. But I think that from what we've seen, Dia, they're going to continue to operate independently. I bet they're gonna build some beautiful enterprise browsing experiences like they always have.
Speaker 2:Yeah. And they should they should build and restream one livestream, 30 plus destinations, multi stream and reach your audience wherever they are. So you should be able to stream from your Dia browser, from your ARC browser. So my take on this was there's a, so basically, right now the team is saying, we're gonna stay independent. We're gonna go.
Speaker 2:But my question is, are they gonna stay? Are they gonna stick with that narrative of stay independent? And this is very rare for pre product market fit acquisitions. I haven't seen a ton of examples of that where a company was acquired that wasn't like clearly on a, you know,
Speaker 4:Remember, remember. Instagram was bought for a billion dollars. Yes. And almost everyone involved at the time thought that it was crazy.
Speaker 2:They did. Yeah, that is true. At
Speaker 4:And the same it time was like a key threat to Meta's business, right? Like the user growth was insane.
Speaker 2:I mean, would love to look at the retention metrics for Dia versus Instagram because it's totally possible. I don't know. Do you know how many DAUs or total downloads Instagram had at the time of acquisition? I know it was small, but was it sub a million? I feel like it might have been a little bit bigger.
Speaker 2:Can someone look that up? Basically Can look that up, Tyler?
Speaker 4:I'm also curious about YouTube as well. YouTube was bought for
Speaker 2:Yeah, many people
Speaker 4:were using YouTube? Three times. And again, the dollar isn't what it used to be.
Speaker 3:So when Instagram was acquired, estimated around 860,000, so less than a million DAUs.
Speaker 2:Okay, okay.
Speaker 4:DAUs, though.
Speaker 2:Yeah, yeah, but still, I mean, we're in the same ballpark here. Very interesting. Instagram
Speaker 4:People that have
Speaker 2:Yeah, yeah, yeah, yeah.
Speaker 4:DAUs is wildly different
Speaker 2:than Then like total downloads. Okay. Yeah, yeah. But still, I mean, we're in the rough ballpark where you could, the very least, we have to take what Atlassian is saying and what the browser company is saying at face value. They are saying, we're gonna continue building this browser.
Speaker 2:We're in it to win the AI browser. We're we're going broad. We're going consumer. This is not, we're acquiring this browser. We're gonna bake it into Trello and we're gonna bake it into Jira.
Speaker 2:No.
Speaker 4:I actually disagree with you here. All the messaging was that they're not going to be focused on consumer. From Atlassian CEO was that we're going to build great enterprise browsing experience.
Speaker 2:Oh, Okay. Okay.
Speaker 4:So there's nothing in there that I saw from the Atlassian side that said, we want to win in the consumer brand.
Speaker 2:Oh, really? Really? Okay. Interesting.
Speaker 4:They know their business, right? Okay, yeah.
Speaker 2:So So it's very interesting. I can't imagine having like a work browser, but maybe that makes sense. Mean, people have work laptops, but I feel like the trend has been you have like one phone that you do work and life on and then you have separate apps and maybe you have an enterprise software product installed on your phone. But really, the trend seems to be more people using Gmail and Google email at work. And it seems like there's less and less like, oh yeah, I have a separate work computer with a separate operating
Speaker 4:Chrome system is very separate set up. Chrome is already very set up to have profiles, like personal profiles and work
Speaker 2:profiles. Yeah, have two. I have a personal one and
Speaker 4:a VPN
Speaker 2:one. So I don't know, yeah. We'll have to see. I mean, the founder is saying we're gonna keep working on Dia, but maybe that means in the enterprise context. Anyway, we'll have to keep an eye on where they wind up going.
Speaker 4:So Mike said, I said this yesterday, with DiaBrowser, we're going to collectively redesign the browser to help knowledge workers kick butt in the AI era. And so that to me kind of reads a little prosumer. But it feels like very much oriented towards people that are working in the browser.
Speaker 2:Oh, yeah. OTP says, Get Sagar on here to give pushback on TFP. Bye. He's going postal about it. I should text him and see if he wants to hop on.
Speaker 2:We will, yeah, we'll definitely get him on when he's ready to go live and rip some takes. I also invited Barry Weiss. I'd love to hear her side of what's going on and what her plan is. It's a fascinating story. Of course, these are still leaks, so most people don't wanna talk until there's finalized information.
Speaker 2:Anyway, if you're trying to design a browser, gotta do it in Figma. Think bigger, build faster. Figma helps design and development teams build great products together, get started for free. And the third big number of the day, ramp has crossed 1,000,000,000 in revenue. Sheesh, says Tyler.
Speaker 2:Hodge. A key question is whether it's gross revenue or it's net revenue. I think it's gross revenue or he goes back and forth on his. But anyway, they've been on a tear. As David Senra likes to say, it's a great example of taking a simple idea and doing it deadly seriously.
Speaker 2:Taking a simple idea deadly seriously. Think David was quoting someone, but I attribute Everything's to David. To David's now.
Speaker 4:We should pull up these videos from the dinner at the White House last I
Speaker 2:only have one question for Eric, is, is the job finished? So we will figure that out today.
Speaker 4:Are gonna call him?
Speaker 2:I I'm he is he's busy. I'm gonna I'm gonna Alright.
Speaker 4:Play this video.
Speaker 2:Oh, yeah. Please. You've done an incredible job with Apple, little company called Apple.
Speaker 5:Thank you, mister president.
Speaker 2:Very, very few people have been able to do what you've done. Congratulations, please.
Speaker 5:Thank you, sir. That means a lot to me.
Speaker 2:2,000 I
Speaker 5:wanna thank you for including me
Speaker 2:Three.
Speaker 5:This evening. It's incredible to be among everyone here, particularly you and the first lady. I've always enjoyed having dinner and interacting. I want to thank you
Speaker 2:Four, thank you.
Speaker 5:For setting the tone such that we could make a major investment in The United States and have some key manufacturing, advanced manufacturing here. I think that says a lot about your focus and your leadership and your focus on innovation. I also want to thank you for helping American companies around the world. This is a very key thing and I really enjoy working with your administration on those topics as well because I think they're so important to the country. I want to thank the first lady for focusing on education.
Speaker 5:Wow. There's nothing more important than education. Triple
Speaker 2:Triple please.
Speaker 5:Triple is the great equalizer. Truly. And always will be. And so thank you so much for including me. One shot of We are all different in some ways, but we all believe in the power of technology to improve people's lives.
Speaker 5:And that that is the thing that that binds us all together.
Speaker 2:And, Tim, how much money will Apple be investing in The United States? Because I know it's a very lot and and it's, you know, you were elsewhere and now you're really coming home in a big way. How much money will you be investing?
Speaker 5:600,000,000,000.
Speaker 2:600,000,000? There we go. We're
Speaker 5:very proud to do it.
Speaker 2:That's great. Thank you very
Speaker 5:much. Thank you.
Speaker 2:Appreciate it.
Speaker 5:Thank you, sir.
Speaker 2:Wait. Is that 10? Thank you.
Speaker 6:So I
Speaker 4:think it was 12. Somebody else had counted as 12. I I it was around 10. Yeah. Crazy.
Speaker 4:So we should
Speaker 2:Why wasn't Christina from Vanta there? I feel like that's key to The US's tech strategy.
Speaker 4:I agree.
Speaker 2:Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process.
Speaker 4:We gotta pull up this video of
Speaker 2:With continuous automation of Zuckerberg. This was our fourth big number of the day. Zuckerberg says he will invest around $600,000,000,000 by 2028. Zuckerberg says Meta will invest 600,000,000,000 in AI infrastructure by 2028. Meta's already guided CapEx of 70,000,000,000 in 2025 and 100,000,000,000 in 2026.
Speaker 2:So that's a big ramp to go from 70 to 100, and then they still got 430,000,000,000 to do in '27 and '28 to actually reach 600,000,000,000. Spending would need to jump to 200,000,000,000 in 2027 and 300,000,000,000 in 2028. That's a lot of dollars. Video in the timeline. Let's play it.
Speaker 4:And this is quite a group to get together. And, you know, I think, you know, all of the companies here are building just making huge investments in in the country in order to build out data centers and infrastructure to power the next wave of innovation. So it's you know, we don't often get together as as the the CEOs of the different companies, but it's it's good to see everyone.
Speaker 2:How much are you spending, would you say, over the next few years?
Speaker 4:Oh, gosh. I mean, I think it's probably gonna be something like
Speaker 2:$1,201,000,000,000
Speaker 4:in The US.
Speaker 2:Yeah. It's amazing.
Speaker 7:No. It's
Speaker 2:not significant. That's a lot. Thank you, Mark. It's great to have you.
Speaker 4:Thank you. Well, thanks for for hosting us. It's awesome. Great. So does anybody in the chat know if who which which of them went first?
Speaker 2:Yeah.
Speaker 4:Because because that number that number does not align with with Meta's stated
Speaker 2:CapEx. Yeah. It doesn't appear in the SEC filings yet. But it is like very forward looking No.
Speaker 4:Was 2028.
Speaker 2:2028, which is something that they might not actually put out or might not be demanded by Wall Street. But it's hilarious. Anyway, whatever they do, they're gonna have to do it on graphite graphite. Dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster, get started for free.
Speaker 4:Yeah. So Meta guided CapEx of 70,000,000,000 in 2025 and 100,000,000,000 in 2026. So to to get to 600,000,000,000 spending would need to jump to 200,000,000,000 in 2027 and $300,000,000,000 in 2028?
Speaker 2:Yeah, what's interesting is that, so these numbers are insanely big. And obviously, it looks like a big acceleration relative to past CapEx numbers. But I'm so inured to big numbers now because of the fast takeoff crowd that was like, oh yeah, like trillion dollar build out data center like next year for sure. AI 2027, it's gonna be 10,000,000,000,000.
Speaker 4:Be It's gonna $100,100,000,000,000.
Speaker 2:So like when I hear 600,000,000,000, I'm like, yeah, yeah, that sounds like totally reasonable. I think they'll definitely hit that. I don't know, they probably will. It doesn't seem like there's many barriers in the way. It's just continue to grow the core business, run more ads, dump the profits into CapEx, build some more data centers.
Speaker 2:Semi analysis, Doug O'Laughlin over at Fabricated Knowledge has a good deep dive today on the glut of lagging edge chips that I think we might have a chance to get to in a little bit, but it was a fun dinner. Are there any other videos that we should play from the White House dinner? I like the idea of, this is this is kind of new podcast format. Just have a dinner with everyone, have some cameras there.
Speaker 4:And just yap.
Speaker 2:Yeah, that's good. What's up, Tyler?
Speaker 3:I don't have another video, but there
Speaker 4:is there is a photo
Speaker 3:that came out. I'll send it to the chat. But it was like the full dinner. And right at the very edge, I'm pretty sure it's Dylan Field.
Speaker 2:Is.
Speaker 6:The goat. Yeah.
Speaker 2:Yeah. Yeah. Yeah. So someone had the full breakdown here. It's in the deck.
Speaker 2:It's much deeper. Let me pull it up. Where is it? The full list of people who attended the dinner is, wow, there's a lot of stuff. Okay.
Speaker 2:So Ed Ludlow has it, the full list of attendees at President Trump's dinner with tech leaders. The President, the First Lady, Susie Wiles, Sergey Brin, Jerilyn Gilbert So to, Sam Altman, Greg Brockman, Anna Brockman, Safra Katz at Oracle, Gil Galterosh, Justin, Jason Chang, Meredith O'Rourke, Natalie Dompe, Tony Fabrizio, Dylan Field, John Herring, Jared Isaacman. Jared Isaacman, oh, I guess he was
Speaker 4:missing one.
Speaker 2:Yeah, Elon didn't go, but isn't Chamath. Oh, Chamath is in here. So Sunny Madra, Sachin Adela, Chamath Palihapitiya, Sander Pichai, Mark Pincus, Vivek Ranadeve, who owns the Golden State Warriors. And I believe Vivek Ranadeve is the guy who worked with Chamath in the first SPACs. And Vivek Ranadeve kind of like pioneered that format almost.
Speaker 6:Did you say Lisa
Speaker 4:Sue from AMD?
Speaker 2:Lisa Sue made it, David Sachs, Sham Sankar from Palantir. We missed him yesterday. He was at this dinner in DC. Jamie Simenoff, Alex Wang, Sanjay Marotta, Tim Cook, David Limp, Mark Zuckerberg, and Bill Gates. What a crew.
Speaker 2:Jensen didn't make it. So the fact that Jensen and Elon are not there, I feel like you shouldn't read too much into it. It's kind of just like Trump catching up with a bunch of people, but I don't know. There's also like this, yeah, I don't know. They have like falling out, but it seems like they've kind of patched it up.
Speaker 2:I don't know. Always hard to read too much into this stuff. But speaking of Elon Musk, he didn't need to be at the White House because he's setting up a $1,000,000,000,000 pay package.
Speaker 4:175,000,000,000.
Speaker 2:Oh, it's not a Just a little bit shy. Okay. So the update is Tesla's board has green lit a fresh pay package for CEO Elon Musk. If he hits 400,000,000,000 in adjusted EBITDA, he deploys 1,000,000 robotaxis for commercial use, ships out 1,000,000 energy storage units, produces and delivers 20,000,000 vehicles, secures 1,000,000 of ongoing FSD subscriptions, aim for a $8,500,000,000,000 market cap.
Speaker 4:The golden retrievers are barking. Seven
Speaker 2:and a half to ten years in the CEO role. The starting share price is $334.09. The package includes 12% of company stock divided into 12 segments. And so, Signal says this is a master class in how to design incentives. This deeply ties Elon's upside on the world radically improving.
Speaker 2:If he actually hits those milestones, the value unleashed for society dwarfs his payout. Most CEO comp is rent seeking. This is moonshot seeking. I completely agree. Every pay package for executives should be this absurd on both sides for the company and the individual.
Speaker 2:And this was exactly my take. It's like bet on yourself.
Speaker 4:Yeah, and he's done this. He's done before. He's done
Speaker 2:this before. And Dan Primack, the pay package, the most recent pay package came into under legal scrutiny, Dan Primak was like, I like this when it was announced. And I thought it was crazy. And everyone thought it was impossible that he would pull it off. And he did.
Speaker 2:So he deserves it. And so it was this crazy legal battle, but it was actually aligned with exactly what a CEO should be doing, creating shareholder value. This should be a model for CEO comp going forward, in my opinion. There's another side of this, which is increasing a founder CEO stake by doing aggressive stock buybacks, But this is way cooler because it incentivizes bold investments and huge CapEx on factories, moonshot technology gambles, and generally thinking in decades. So I'm super stoked about it.
Speaker 2:I think it's good. I hope it holds.
Speaker 4:Think to signal. Mean, they're very much signaling to the base We're going. Tesla Army that that there's a lot of potential upside. Totally. Chris Camilo said earlier, been tracking XAI's accelerating cash burn, flattening user growth, monetization, and fundraising fundraising struggle since the beginning of this year.
Speaker 4:And I don't see how they last another twelve months without a Tesla or Elon bailout. I mean, saying I don't see how they last another twelve months without a the founder bailing them out. It's like, that's kind of the founder's job. They're just continuously bail out the company. But I thought this was relevant because I do think that part of this part of setting up this pay package could set up a scenario where x AI gets just merged into Tesla and it becomes a standalone.
Speaker 4:It just all gets rolled in.
Speaker 2:Yeah. Yeah. I mean, Tesla has I mean, Carpathi worked there. It's a fantastic AI organization, and it makes sense that there would be a lot of overlap in what they do. Guess there's probably
Speaker 4:And I mean if less x, the Everything app, was part of a public company again, how does get valued at less than $8,500,000,000,000 right? That's a good And so with Elon having that ace up his sleeve, the fact that we're all addicted to this app
Speaker 2:Yeah. I I guess it's good that there's other milestones in there that you can't just merge everything together. Because if you
Speaker 4:It merge is funny to think about some of the different milestones. It's like shipping out 1,000,000 energy storage units feels like wildly does this even need to be included if you're going to deploy 1,000,000 robotaxis for commercial use?
Speaker 2:Yeah. That one seems a little bit I don't know. Easy sandbag? Who knows? I like yeah, well, notably missing.
Speaker 2:What about post more tweets? Post some bangers.
Speaker 4:I would like to see a thousand
Speaker 2:I wanna see him go
Speaker 4:I would say a thousand people a day marrying Ani.
Speaker 2:Oh, okay. That's the milestone.
Speaker 4:That should be in
Speaker 2:there too. Anyway, oh, on Chemoth. People were making fun. Q Cap has Chemoth at the tech leaders dinner last night, he's a Drake on the basketball team, the Kentucky basketball team in full in fully suited up.
Speaker 4:He's there with Saxe and he's big in Grok.
Speaker 2:Oh, is he? Oh, o g r o q. Yeah, that's right. That's right. Yeah, that makes a lot of sense.
Speaker 2:And Rune had a good kind of contrarian take on the Chamath hate. He says, young heads don't know that Chamath initially had his come up as the VP of Growth at Facebook. While the app grew from 50,000,000 to a billion users, they invented people you may know, which Preeter naturally predicts who your friends are, the concept of MAU, etcetera. All this stuff is in the water at any Internet company now. More important, yes, he basically invented growth, the entire app, the entire idea that you can treat app growth as an empirical AB tested science.
Speaker 2:And we talked to a designer on the Facebook team at the time. And, you know, it's so easy to zoom out and look at Facebook as like, oh, there was like just a foregone conclusion that they would win everything and just completely dominate. But there were
Speaker 4:moments I love Jason where we're popping in here in the comments saying it's his birthday party dummy. Yeah, that's good. He just turned 49.
Speaker 2:Oh, he did?
Speaker 6:Yeah.
Speaker 2:No way. That's amazing. What a birthday party. Where else would you want to be? That seems like a great time.
Speaker 2:Yeah, people were having fun making fun of Chamath, but why not have him be there? Makes a ton of sense.
Speaker 4:I love this post from Morgan.
Speaker 2:Should have gotten the other crew in there. Should have gotten Jason and Friedberg the invite. Anyway, what was the next thing you wanna put?
Speaker 4:Oh, This one.
Speaker 2:Three way deal.
Speaker 4:Elon is
Speaker 8:What is this? Deal
Speaker 2:Between xAI and Tesla?
Speaker 4:No, I mean, it's Ed Ludlow over Bloomberg saying Tesla's board has proposed a new pay package for Musk and proposed the authorization of investment in xAI.
Speaker 2:Oh, sure, sure.
Speaker 4:The board is looking at investing. Remember, SpaceX already invested in xAI because they had to get exposure.
Speaker 2:Yeah, we saw that complicated web of Elon companies, how they all link together. Maybe you just got to merge together.
Speaker 4:Pure Pure play Elon
Speaker 2:Holding company.
Speaker 4:Yeah. It to 10,000,000,000,000. Send it
Speaker 2:10,000,000,000,000 for sure. The yeah. I mean, like, Elon's done kind of these zombie mergers before with Solar Cities. I mean, some people frame that as a bailout and didn't hurt Tesla. The stock went on an absolute run and it was great.
Speaker 4:Just a flesh wound.
Speaker 2:And I I never really understood why SolarCity wasn't more successful because it feels like solar, you can talk to Casey Hanmer, he's like the biggest solar maxi, and all of the like scientists, all the experts that I trust say that solar is, you know, going to continue to grow, extremely valuable, extremely important, but it seems like we've just been, SolarCity specifically and basically any American solar company has been kind of going to economic war with China and China's been like dumping cheap solar on the market continuously. So you need a company like Tesla to maybe subsidize that for a while until the US government comes around to some sort of regulation on what exactly are we gonna do about it to create like more of a level playing field. Either we're gonna subsidize or we're gonna like put tariffs and taxes on their exports to get them back into what they actually cost instead of just letting another company run roughshod all over the American
Speaker 4:This is interesting. Ed Ludlow also was sharing that Musk must also help craft a CEO succession plan to unlock the final tranches.
Speaker 2:Will Maximus Trump be old enough? Who what's his name? X? There's a few. There there's a few wild names.
Speaker 2:One of the it's gotta be a it's gotta be a hereditary dynasty. Right? He's gotta let X take over in ten years. How old
Speaker 4:will The oldest Musk children are 20 year old twins. Oh, they'll be totally ready in 30 Vivian and Griffin, Musk, potentially co CEO.
Speaker 2:Co CEO, That could happen. And then there's and then there's another one that's a little bit younger who might be, you know, more in the, like, twenty twenty something year old by the time Elon steps down. But I I I would be surprised if he's not running Tesla in ten years. I think he's going stick around for a while, keep running it. He just keeps hanging out and building cars.
Speaker 4:And this is just fantastic news for people like Gary Tan who have been saying we need more trillionaires.
Speaker 2:Oh, that's true. Is that his thing? He thinks he's more billionaires. We need our first trillionaire. The package could raise Musk's stake in Tesla to at least 25% with total voting power of up to 29%.
Speaker 2:Tesla's market cap must reach 8,500,000,000,000.0 from 1,000,000,000,000 today. The plan follows Musk's 2018 package valued at 50,000,000,000, which was struck down by a Delaware court. Tesla's board is appealing that ruling, but is also offering Musk an interim $30,000,000,000 stock award while pursuing the new deal. Musk's outside venture, SpaceX, XAI, Neuralink, boring company, and political activity is rave concerned about focus. But was Warren Buffett not focused on C's candy and Coca Cola at the same time?
Speaker 2:Come on, It was a holdco. It's not that complicated.
Speaker 4:It isn't. Gabby Gabby Goldberg went super viral quoting What'd say? Quoting some of these, quoting a video from Sam Altman at the dinner last night and said, this is like when you're at someone's birthday party and they make everyone go around and say their favorite thing about them.
Speaker 2:That's very funny. And what did Sam say? Do we have the video? Rapid response
Speaker 4:He said, you for being such a pro business, pro innovation president. It's a refreshing change. The investment that's happening here, the ability to get the power of the industry back, I don't think that would be happening without your leadership.
Speaker 2:I love it. I agree. I'm happy to triple glaze as well. I like innovation. Triple glaze.
Speaker 2:I like innovation.
Speaker 4:Arthur McWaters, been on the show many times before, says, I'm unironically working my butt off so that my wife can go to Pilates on a Wednesday afternoon and get a $15 matcha. And Sikhi says It's a noble goal. Same.
Speaker 2:It's a noble goal. I wish Raul from Julius had been invited to this dinner.
Speaker 4:Yeah.
Speaker 2:I feel like
Speaker 4:They're snubbed.
Speaker 2:He shows up in in different pieces of Silicon Valley lore
Speaker 4:That would be insane. Delivered. That would be insane.
Speaker 2:It wouldn't be that insane.
Speaker 4:He's on generation level.
Speaker 2:He's fantastic.
Speaker 4:I just, mean, maybe we could we could
Speaker 2:That's why we sponsor him. That's why we partnered with him. Julius, what analysis do you wanna run? Chat with your data. Get expert level insights in seconds.
Speaker 2:Could be more relevant to the government
Speaker 4:than having an AI, a
Speaker 2:AI data analyst that works for you?
Speaker 4:Every CEO there is probably already using Julius.
Speaker 9:Yeah.
Speaker 4:If they're not, short.
Speaker 2:Yeah. More context on Zuck's $600,000,000,000 investment. Turner Novek says Meta has done 478,000,000,000 in revenue over the past thirteen quarters and plans to invest 600,000,000,000 in data centers over the next thirteen quarters. Good thing they're growing revenue. Yep.
Speaker 4:Well, this is important too because data centers are the foundation of the global economy. And if we stop building them, everything is going to collapse.
Speaker 2:Token factories continue to
Speaker 4:John Wu had some good analysis on the BrowserCo acquisition. He said, man, parts of tech are sour about the BrowserCo acquisition. The common complaint is that DiaArcArc don't have enough users or revenue to justify the acquisition. First, think this line of BITCH ing assumes that Atlassian's corp dev team are dingleberries. Dingleberries down under when in fact they're elite and one of the most disciplined and successful M and A units in tech.
Speaker 2:That's super legit.
Speaker 4:Rationally integrating products into the existing product suite and otherwise protecting independence when merited, Trello, Loom, Opsgenie, AgileCraft, many others. Second, I think this is part of some ridiculous coping narrative that some VCs and founders inhabit, which is that having differentiated product vision, assembling a world class team that ships, and being an incredible storyteller and salesperson is somehow easy. That's a really good one. Maybe you have more revenue. Maybe you have more users.
Speaker 4:Guess what? The market doesn't give an F. I've read, seen, and heard directly from multiple people today something like, oh, if I just knew how easy it would be to raise a ton of venture and make good videos, I'd do it and get acquired for $610,000,000. So go do it then.
Speaker 2:Go do
Speaker 4:it then. I'm not affiliated with the browser code anyway. I'm not here to pat anyone on the back, do the whole well deserved rigmarole claim I was just one part small part of their success. I'm here to say the market has spoken. A transaction has been transacted.
Speaker 4:Capitalism has capitaled. Browser company is worth 610,000,000 in If you're a VC founder, etcetera, in the salt mines today, focus on your business. If you think you can do better, do it. That is reality.
Speaker 2:Do we have the shots fired sound effect? So there we go. Shots fired.
Speaker 4:Great. Great way to sum it up, John.
Speaker 2:Yeah. Just go and build a yeah. Just go build something. I don't know. Go tell a story.
Speaker 2:Figure out a way. Yeah, I mean, underrated is like the isn't the founder of the browser company one of the core contributors to Chrome early on? He was on the Chrome team. If you want to build a browser I actually didn't know that. To imagine having a better team in place.
Speaker 4:Yeah. More breaking news. OpenAI is working on its own AI inference chip with a small company called Broadcom. I don't know if you've ever heard of this company before.
Speaker 2:Hock tan.
Speaker 4:If you've never heard of Broadcom, they're small company based out of San Jose Okay. California. They are worth $1,570,000,000,000.
Speaker 2:They just had a massive massive earnings beat because there was like this mystery $10,000,000,000 customer. It It was OpenAI, I'm pretty sure.
Speaker 4:There we go. So Love to see it. Broadcom. Up 14% in
Speaker 2:the last I
Speaker 4:mean, it's just it's just crazy that that you can have a company that is in the same sim you know, similar at the moment, priced in the same range as a company like Meta. And most people would be like, oh, Broadcom, yeah, I've heard of them, but not be able to say much more about it.
Speaker 2:Yeah. So Richard Ho, ex Google TPU, is leaving 40 engineers over at OpenAI. Seems like Sam did a little talent raid of his own. Broadcom providing critical design and IP. TSMC will fab it on the three nanometer node inference only.
Speaker 2:Target mass production in 2026 could fail on first tape out. So the interesting thing here is that I've been beating this drum of like, yeah, GPT-four is good enough, bake it onto silicon, just get the inference cost down. Just let me use it faster, cheaper. We have really, really good intelligence. We just need to inference it a lot more.
Speaker 2:Said the same thing about mid journey. Thought the images looked good enough. And yeah, they could get better, but I'm fine with where they are now and they're fun. And so let's just make it really quick and easy to use. And it seems like they're going in that direction for the most part.
Speaker 2:Because even the Riesling models, they're still built on mean, it seems like they're built on a pretty stable foundation of the architecture the frontier model. They're not making drastic, drastic architectural changes to the core LLM that powers these reasoning models. So bringing down the price of inference seems really, really important. So the Wall Street Journal has an article here. OpenAI and Broadcom make a $10,000,000,000 deal for custom AI chips.
Speaker 2:Order aims to ease shortage that limited the rollout of new ChatGPT versions. OpenAI is working with Broadcom to develop custom artificial intelligence chips, a move that could alleviate the shortage of powerful processors needed to quickly train and release new versions of ChatGPT. Broadcom shares surged nearly 11% in Friday trading. You said it's up at 16% now. What a great ripper.
Speaker 2:If you're looking to get into Broadcom, you think it's overvalued, undervalued, do it on public.cominvesting. For those that take it seriously, they got multi asset investing, industry leading yields. They're trusted by millions, So Yeah.
Speaker 4:Up 74% in the last six months.
Speaker 2:Yeah. So on the earnings call, Broadcom said, we've signed a fourth major AI developer as a customer, and that the new customer had placed a one time order worth $10,000,000,000 for server racks using the Palo Alto based firm's chips. The new customer is OpenAI, according to people familiar with the matter. The Financial Times reported the arrangement earlier. Sam Altman, OpenAI's chief executive, has been saying for months that a shortage of GPUs has been slowing the company's progress in releasing new versions of its flagship chatbot.
Speaker 2:In February, Altman wrote on X that GPT 4.5, then its newest large language model was the closest the company had come to designing an AI model that behaved like a thoughtful person, but he lamented the delays and high costs that came with developing it. I guess there's a big question. Some of these really, really big models, people have been saying, it's great, but it's slow. And it's costly. And I wonder if they're going to optimize for GPT 4.5 inference or GPT four level inference.
Speaker 2:Tyler, do you have any take on where they might sit? Sam Altman said, It's a giant expensive model about 4.5. We really wanted to launch to Plus and Pro at the same time, and we've been growing a lot and are out of GPUs. I thought that demand for GPT 4.5 wasn't purely predicated on the cost and the timing and more just about the fact that people couldn't really tell the difference.
Speaker 3:Yeah, I mean, there's definitely a sense of only the high taste testers actually liked 4.5. I would be surprised if they really bring it back in any capacity. It's just so expensive.
Speaker 2:Yeah, I wonder what they're going to do. I mean, seems like they'll probably still leave some flexibility like the TPU. They're not going to go fully lock themselves into one specific architecture. But hopefully, it brings down inference costs, increases margins, which should be very, very good for the business.
Speaker 4:We love those.
Speaker 2:We will add tens of thousands of GPUs next week and roll it out to the plus tier. Hundreds of thousands coming online soon. I'm pretty sure y'all will use every one we can rack up, he said. I like the y'all.
Speaker 4:I'm pretty sure y'all will use everyone we can rack up.
Speaker 2:Recently, OpenAI has relied heavily on so called off the shelf GPUs produced by NVIDIA, the biggest player in chip design space. But as demand from large AI firms looking to train on increasingly sophisticated models has surged, chip makers and data center operators have struggled to keep up. If we're talking about hyperscalers and gigantic AI factories, it's very hard to get access to a high number of GPUs, founder of Compute Labs said, a startup that buys GPUs and offers investors a share in the rental income they produce. It requires months of lead time and planning with the manufacturers. To solve the problem, OpenAI has been working with Broadcom for over a year in secret behind our backs to develop a custom chip for use in model training.
Speaker 2:Broadcom specializes in what it calls XPUs, a type of semiconductor that is designed with a particular application, such as training ChatGPT in mind. OpenAI also recently struck a data center deal with Oracle that calls for OpenAI to pay more than $30,000,000,000 a year to the cloud giant and signed a smaller contract with Google earlier to alleviate computing shortages. It is also embarking on its own data center construction project, Stargate. And so this is just another example of like, wow, they haven't made that much in revenue and they're committing to all these spends. It's like, well, they're growing very, very fast and they plan on setting themselves up for success and high margins and more growth ahead.
Speaker 2:And if you need serverless vector and full text search, head over to Turbo Puffer. Search every byte. We puffin'. It's built from first principles and object storage. It's fast.
Speaker 2:It's 10 x cheaper, and it's extremely scalable. You can get started.
Speaker 4:Be like Cursor, Notion, Linear, Superhuman, and many more. Yes. Readwise is on TurboPo.
Speaker 2:Oh, no way. That's very cool.
Speaker 4:That makes
Speaker 2:a ton of sense.
Speaker 6:That makes a
Speaker 4:ton of sense. Yeah. Smart guys, working with smart guys.
Speaker 2:Okay. So we need to do a little bit of a meme review moment on the stream. A monkey was handed an AK-forty seven, and the image went viral and is now a meme. I don't know where this came from. It looks like an old image from a documentary.
Speaker 4:I love It's crazy how you can tell this image has been screenshotted
Speaker 2:dozens of times. Potentially more. It does not yeah. And it also uniquely does not look like AI. But Levels.
Speaker 2:Kicked it off with point point of view, you can you discover you can do your own DevOps with clogged code. And, of course, that could end in disaster. Skooks.
Speaker 4:Skooks says Your point one x coworker just discovered AI.
Speaker 2:Oh, no. I don't know how true that is. I mean, feel like AI should be an accelerant, but yes,
Speaker 4:No. It could No. No. No. No.
Speaker 2:Yeah. You need be at least one x coworker.
Speaker 4:Like, you give a bad driver a super fast car. Does that make Okay. Fair. Them
Speaker 2:Fair. Fair. TurningOmX is letting the VC give product feedback. It's rough if they haven't been in the trenches. Liquidity says how it feels to let the first year analyst speak directly with the client.
Speaker 2:I love that. And producer Ben says giving the ramp card to interns.
Speaker 4:This is real. This is real.
Speaker 2:Do not do it, folks.
Speaker 8:You gotta be careful.
Speaker 4:You gotta be
Speaker 2:Ben's like, why do they have to request funds for every single purchase? Why don't they just have a limit that they can spend within?
Speaker 4:Well, we
Speaker 2:know because they are monkeys with AK 40 sevens.
Speaker 4:The credit is simply too powerful.
Speaker 2:Yes, it is. Also, Brian Armstrong bumped up the max leverage from 20 x to 50 x on international perpetual futures and upslope capital just give the monkey the AK47. It's a great meme. I hope this meme sticks around for a long time. Anyway, if you wanna get your brand mentioned on ChatGPT, head over to ProFound, reach millions of customers who are using AI to discover new products and brands Oh, it's clearing orders.
Speaker 2:Saw OpenAI's investment in Broadcom chips. They're not going anywhere. You're gonna want your brand mentioned on ChatGPT, and you're gonna wanna do it through Profound
Speaker 4:And Grok.
Speaker 2:And Grok And Perplexity. And everything.
Speaker 4:And everything.
Speaker 2:In the mansion section today, it's Friday. We got ten minutes until Friday. Joe Wiesenthal joins to tell us what's going on in The United States economy. But one thing that is going fantastically well in The United States economy is Ellen DeGeneres' house flipping hobby, which has turned into a $190,000,000 enterprise. So the comedian and wife, Portia De Rossi, have bought more bought and sold more than 30 homes
Speaker 8:They are.
Speaker 2:Since the mid two
Speaker 4:dogs. The dogs. The absolute dogs of Montecito.
Speaker 2:So they bought a 10,700 square foot property in Santa Barbara, California for $27,000,000 in 2019. They sold it for 33,300,000.0 in 2020.
Speaker 4:Modest gain.
Speaker 2:Modest gain. Not bad.
Speaker 4:Probably, but it didn't take a lot of risk here.
Speaker 2:Right? One year. One year. 6 mil. Not bad.
Speaker 2:It's it's pretty good.
Speaker 4:It's honest work.
Speaker 2:Let's read through the reporting in the Wall Street Journal's mansion section by Katherine Clark. She says, just before last year's presidential election, comedian Ellen DeGeneres and her wife, actress Portia De Rossi, decamped to their Cotswold to the Cotswold, an upscale rural area near London, they had bought a vacation home, a 43 acre estate to use a few months a year. Then, the morning after the election, when they awoke to lots of texts with crying emojis, they said, we're staying here. Where was this? Which which election?
Speaker 2:Oh, last year, okay, so it's the Trump II election that was sparking crying emojis in Ellen DeGeneres' iMessage. Behind them, they leave a trail of luxury residences. Over the past two decades, the long time California residents have developed a reputation as serial home flippers. The Wall Street Journal's research shows that the pair have owned at least 34 homes since the mid two thousands, including properties in Los Angeles, Beverly Hills, Santa Barbara County, Santa Barbara County's wealthy Montecito, and now The UK. Records show that the couple were actively buying and selling throughout the mid aughts in the February, but their activities ramped up significantly during the and we're gonna move to page eight.
Speaker 2:This is one of the luxuries of reading the Wall Street Journal in print. During the pandemic, so starting in 2020, they have frequently owned multiple homes at one time and show no obvious signs of trying to time the market for the best returns. Records show they bought Impatient. No. They're just they just got the hot hand.
Speaker 2:They're they're they're they have the Midas touch. They don't need to time the market. They deliver value everywhere they go. They bought at least eight homes in 2021. Wow.
Speaker 2:And 2022. Record show. From the 34 homes tracked by the journal that the couple have since sold, they have posted a profit of roughly $190,000,000. That has to be in line with how much Ellen DeGeneres makes off her show and her core business. This is the side hustle of all side hustles.
Speaker 2:Their average think return it's research. Their average return based on the original purchase price to the end of subsequent sale price is about 37%. Not bad. You didn't raise a fund. Let me in.
Speaker 2:I'm The LP in
Speaker 4:degenerate home buyer.
Speaker 2:Flipper, but not very degenerate. I mean, who knows? Probably a lot of leverage involved, but it's paying
Speaker 4:There's degenerate gamblers that actually make a lot of money.
Speaker 2:That's true.
Speaker 4:True. That doesn't mean that you're they're not being a
Speaker 2:little So the pair's business manager, Harley Newman, said DeGeneres' real profits are much more modest once the costs of renovating are factored in. I would love her to have made that big of a killing, he said with a laugh. Forget about the real estate agents and the escrow and title people, the costs of contractors and designers and the army that comes in once we've closed. It takes a village. He said those numbers don't also don't account for what DeGeneres spends on furniture that is usually included with the sale.
Speaker 2:None of the furniture is inexpensive, he said. She takes the art off the walls, but everything else gets sold. Newman said 34 is an underestimate, saying he probably thinks she has bought and sold at least 50 homes
Speaker 4:since she's known her. Love it. Buying them in trusts. Yeah. Secretly.
Speaker 2:Very hard to buy a home secretly. It can almost always be discovered. The Wall Street Journal, I mean, they uncovered 34 of 50 or so. The couple's homes have varied in size and in style from mid century contemporary to Italianate and English Tudor. It's not that I get bored, I'm just so passionate about architecture and furniture that you can only buy a certain type of furniture for a contemporary house or mid century house, said DeGeneres in a phone interview.
Speaker 2:She she talked to the journalist.
Speaker 4:There we Amazing.
Speaker 2:A large journalistic force headed towards
Speaker 10:I love it. Standby.
Speaker 2:She said she has lost count of how many homes they have bought and sold. That's great. That's like you with angel investments.
Speaker 4:Kimberly Trasher. Kimberly Trasher.
Speaker 2:She has a home buying addiction and it's paying off.
Speaker 4:I text myself when I make a new Oh, angel investing that's addiction, so I just gotta scroll up far enough.
Speaker 2:Got it. Got it. Got it. There is now a certain cache in owning an Ellen house, said Ryan Ryan Williams of the Beverly Hills Estates, who represented a Hollywood executive who purchased one of their homes in Montecito a few years ago. Once somebody knows it's her house or she had a hand in it, it adds value.
Speaker 2:In LA, she's synonymous with quality. She's a she's a tastemaker. She cares about taste. Many of the homes are have been sold off market without ever being listed for sale. The couple couple's Hollywood Rolodex seems to have come in handy.
Speaker 2:Comedian Will Ferrell and the late actor Heath Ledger and singer Ariana Grande are a few celebrity buyers of Allen houses. DeGeneres said real estate
Speaker 4:Can you imagine Will Ferrell? Very lucrative hobby. Can you imagine Will Ferrell, like, role playing as Allen DeGeneres after buying one of her new movies?
Speaker 2:Yeah. You imagine him in some of his titular roles as kind of a disheveled middle aged man stumbling around a $40,000,000 Ellen DeGeneres neatly appointed home, and it doesn't quite fit, but I'm sure he's much more modern.
Speaker 4:I like how she just flat out says to the journal, real estate has become a very lucrative hobby. Let's go. Let's go.
Speaker 2:Turn your hobbies into side hustles. Turn your side hustles into
Speaker 4:mean, this is basically the main hustle now. She doesn't do the main show anymore.
Speaker 2:Yeah, that's true. The 67 year old former television host has long had a passion for interior design and would have been a designer if comedy hadn't panned out. She attributed her itchy feet in part to her family frequently moving between rentals in her native New Orleans area. We never owned a house,
Speaker 4:so I always New Orleans. Was on your a tier.
Speaker 2:That was in my a Yes. I got in a lot of trouble for that. People did not enjoy
Speaker 4:Nobody nobody got the joke.
Speaker 2:It's like some people got the joke. But I posted my tier list of best cities in the world and it and it dusted some ruffled some feathers. Don't know if you have it pulled up or if
Speaker 4:read through I'll pull it up again. So John's you said city tier list that'll trigger everyone, but is true.
Speaker 5:It is true.
Speaker 4:S tier, NYC, LA, SFDC, Miami, Chicago, Austin, and Boston. A tier, Seattle, Nashville, Vegas, New Orleans, Detroit, Bakersfield, and Reno.
Speaker 2:I love
Speaker 4:And then note, there was nothing in the B and C tier. Then D was, of course, London and Paris. Yeah. And then F was Rome, Berlin, Tokyo, Dubai, Hong Kong, Barcelona, Sydney, Buenos Aires. So basically, if somebody said, John, I'm going I'm going to Sydney.
Speaker 4:I'm gonna see the opera. Do you wanna come? I'd be like You'd be like, sorry, I'm at Bakersfield going to that Bakersfield, yeah. And then if somebody said, hey
Speaker 2:Hey, expenses paid trip to Paris.
Speaker 4:Paris. You say, sorry, I'm actually in the biggest little city, Reno.
Speaker 2:Reno. Exactly. I would prefer to be in Reno. Anyway, we had some fun with that. Well, we have our first guest of the show, Joe Weisenthal on the phone.
Speaker 2:On the phone. Wired on the play. We got Joe Weisenthal.
Speaker 4:Picture that we just commissioned of Joe. There we go.
Speaker 10:Can you That's real.
Speaker 4:And it's a real picture.
Speaker 10:Yeah. Can you hear me?
Speaker 2:Yeah. We can hear you.
Speaker 4:You look asset.
Speaker 2:You you sound as good as you look.
Speaker 7:Understand why
Speaker 10:you do this. I had very Yeah. Yeah. I had a very active summer. I didn't wanna reveal it to everyone, but happy to have you with the exclusive on my new look.
Speaker 2:That's fantastic.
Speaker 4:Incredible. Always great to catch up and always I'm surprised you're away from your terminal on a day like today. But Yeah.
Speaker 2:It's jobs day. It's the Super Bowl.
Speaker 4:It's the it's Joe's.
Speaker 10:It's Joe's. It is the Super Bowl. You know, is the Joe Day. It is the Super Bowl day. It is the Jobs Day.
Speaker 10:You know, after 08:30, you know, obviously, there's the initial hit, and then there's the rush, and then there's the market reaction. And as as much as it is the Super Bowl, by the, you know, by the middle of the day, I'm already like, okay. I'm I'm good for the day. I had such a such a high from following the numbers and seeing all the reactions and reading all the tweets, etcetera, that it's like, alright. I can sort of run some errands in the afternoon on jobs day.
Speaker 2:There we
Speaker 4:go. Well, thank you for squeezing this, Aaron.
Speaker 2:So, yeah, take us through the numbers. I mean, the market reaction Sure. The the the Dow is down Yeah. Half a percent right now. NASDAQ's off Yeah.
Speaker 2:Point two three. Bitcoin's up 1%. So
Speaker 10:Yeah. You know, it's an interesting so, like, the number was not great, obviously, coming in solidly below expectation. I think everyone sort of had a feeling there was gonna I think there's just been a lot of anxiety about the state of the labor market right now. You People talk about the so called whisper number where it's like, okay, here is the forecast that Wall Street has, but here's what everyone sort of really thinks. It's pretty clear that I think a lot of people just sort of thought it could be a miss.
Speaker 10:The last month actually was revised up a little bit, but the month before was revised down substantially such that June was actually now negative, which is the first time since I think December 2020 that we had a month of job losses, which I think is interesting. Once again, care employment, so that added 31,000 jobs in the month. So what that means is that once again, if you exclude health care, the economy overall has been shedding jobs for some time, which
Speaker 4:is Including manufacturing.
Speaker 10:Yeah. So manufacturing employment down 78,000 so far this year with another decline this month. Look, like this is what I would say about manufacturing, which is that I wouldn't let's say a tariff strategy we're going to work. In the long term, and we were going to have this sort of strong reindustrialization of The United States economy, I wouldn't expect it to work right away. Mean the tariffs were unveiled on April.
Speaker 10:But what we can say is that so far those numbers, to the extent that this is a real priority of the administration or policymakers or others, to the extent that this is a real priority priority, it's clearly going in the wrong direction in 2025.
Speaker 2:Yeah. Also, I mean, last night there was that dinner at the White House with all the tech leaders and the numbers that were thrown out were staggering, 600,000,000,000 from Apple, 600,000,000,000 from Meta. But that doesn't necessarily mean massive jobs growth because building a data center might just be a multibillion dollar check that's written to TSMC.
Speaker 10:This is the funny thing with the sort of data center AI sort of thinking about its massive impact. Because first of all, you're obviously correct that these huge checks don't necessarily mean massive jobs growth. And if we're going to take seriously the promise of AI, it shouldn't lead to jobs growth. The test of AI is arguably jobs destruction. Right?
Speaker 10:It's about what jobs that currently exist in the economy can be replaced by something that we call AI. And so not only does the data center is not add to employment in a meaningful way, if those turn out to be good investments, there's a payoff, if they drive productivity, you would expect them, you would almost hope them to be labor market negative.
Speaker 2:Maybe. I mean, there is a world where it's like a worker plus AI is additive Sure. And you can underwrite hiring them.
Speaker 9:And so
Speaker 2:there is a hiring
Speaker 4:Well, our conversations, so we we talked with I'm
Speaker 10:not a I yes.
Speaker 11:Yeah. I mean
Speaker 10:I'm not a doomer. Like, in this sense, I I'm skeptical of this. I find myself just from a sort of pure thinking about it through the economics lens of this idea of, oh, AI is going to lead to mass unemployment Yep. Just for all the obvious reasons that anyone can say, I have caused savings because of AI. Well, I'm gonna, like, spend that money somewhere.
Speaker 10:Yeah. But the question is, do these investments actually free up resources or enable new things that expand our capacity of what we could do with labor? Yeah. That's really the question more than the direct job creation.
Speaker 2:Yeah. Jordy?
Speaker 4:Yeah. One point, we interviewed Palantir's CFO and obviously Carp as well yesterday, and they said something like Yeah. Revenue is obviously up massively in the last few years. Headcount is only up 12%, and they said specifically we expect to have fewer people in the future.
Speaker 10:Yeah. Saw that quote, which I found to be really striking, and it is sort of, again, this sort of very weird condition. Maybe we've talked about it before. I'm not sure not, but it does seem like we're in some sort of uncharted territory here with respect to the fact that I don't know what's happening on a given day. Okay, maybe the net is next down a little bit, but you have all these names that are at or very close to all time highs.
Speaker 10:Any other time in history, I think where you're talking about some sector near all time highs, are also associating it with a massive expansion of or at least a significant expansion of headcount typically. This is just sort of how it is in any industry, tech or otherwise, you would truly link stock performance with headcount. And so it's interesting that here is a situation in which not only this being articulated, this sort of divorce between revenue growth and employment growth, but also it's not just a theory. It's clearly been happening in the industry for some time.
Speaker 2:Yeah. I wonder what Trump's like bull case is. I haven't heard him kind of reconcile what's going on in AI and reindustrialization. There's like broad strokes of like, let's bring back the jobs. There's not a lot of early evidence of that, but I'd be interested to hear from people in the administration about just like paint me a picture of what it actually looks like.
Speaker 2:What is the American jobs economy
Speaker 10:I know.
Speaker 2:Look like in four years if everything plays out like you Yeah. Want? Like, what are people doing? Because it does seem like that we're going through a period of change.
Speaker 4:I don't know. What about Yeah.
Speaker 10:I mean, I do I think I and in defense of the administration, right, a lot of people are I think people all over the place are scratching their heads over this question. Because what I think people want, or what the dream is when they close their eyes and they wanna see an economy in which you don't have to be an absolute superstar computer science PhD, from Carnegie Mellon or whatever or Stanford to get a great job. There should be some sort of broad middle of decent employment, whatever it is. And in the defense of the administration, I don't see many other people anywhere articulating, well, what that ultimately, what sectors or what ultimately drive that sort of employment abundance, so to speak.
Speaker 4:Yeah. The youth unemployment data as well is absolutely brutal. Bloomberg Economics had a chart showing it basically ramping in a way that it hasn't youth unemployment is rising at the fastest pace in in the past fifteen years other other than the pandemic sitting at sitting at what what's the number? 10 and a half percent between the ages of 16 and 24.
Speaker 10:Yeah. No. I think it's it's important to so there has been this debate in the labor market, which is very important and interesting, which is we know that the pace of job creation has slowed. No one is disputing the fact every month where it's just the number of new jobs in The United States is going down. Then the question is, well, maybe some of that is because of the changes in immigration practices or maybe some of this has to do with just sort of normalization of the economy after a crazy few years.
Speaker 10:And so maybe some would argue that the pace of job creation slowing down does not automatically say, okay, we're heading into a recession. That being said, the question then the test then becomes, right, what about just the ability to get a job if you want one? And that's sort of essentially what the unemployment rate is. But it's interesting to watch some of these demographics that historically are sort of more marginal, more vulnerable. The youth unemployment rate is one, the black unemployment rate is another.
Speaker 10:That also that was at its highest since October 2021. And so even though the headline unemployment 4.3%, they were pretty low by historical standards. What we're seeing is this deterioration of the job finding ability for some of these sectors of the economy that tend to, you know, maybe they sort of first to let go or some of these more marginal segments of the labor force.
Speaker 2:Is there a narrative coming together about what's driving the healthcare employment numbers and the healthcare job Because it feels like
Speaker 4:lot there were of our elders are moving beyond unk status.
Speaker 2:Yeah. Mean, they weren't massive Post America. Because I mean, weren't
Speaker 10:a lot of
Speaker 2:healthcare layoffs during COVID. If anything, those are the people that kept their jobs down. And healthcare then isn't particularly sensitive to interest rates.
Speaker 4:Well, we get into this too much, think the big thing is CEOs broadly, even if they're seeing massive revenue growth, it's hard to go out on an earnings call and say, we're seeing massive efficiency gains. We're leading in AI in our industry. We're getting all these benefits from AI. And then be like, well, Okay, our employees are getting so much more efficient. And then be like, well, also are ramping why are you ramping headcount the same white or Yeah.
Speaker 4:Or or Yeah.
Speaker 10:Right. Right. Well, I think so on this point specifically, I also do think there was maybe you know, even though I think many people would say that the formal Doge hasn't accomplished particularly much, maybe other people would argue otherwise. I just think there is just a quote vibe shift on quote, so to speak, where a lot of people are just sort of proud of the fact that they're keeping headcount across all of these things. And I think sort of Elon Musk may have sort of shot the starting gun on this vibe that everyone can look within their organization and say, do we really need all of the people that we've hired, particularly after the boom years of '21, '22, and arguably 2023.
Speaker 10:But I agree on the health care employment standpoint. I mean, would say two things. One is, yeah, it's the, it's the aging population. There does not see it's hard to imagine what would slow this train down. I guess it's slowing down a little bit because, of course, there have been some of those, Medicaid, cuts to Medicaid growth, etcetera.
Speaker 10:So there is reasonable to think that maybe at the margins, the monthly numbers of new headcount into this space is going to not be as fast as it was, but it is very hard to envision what could happen in the short or medium term that wouldn't automatically mean this sector is just going to need a lot more people every month. I'm certain if you talk to any sort of healthcare network of any sort that's on the ground in any community, I'm certain still today in September 2025 that they would identify acquiring talent as one of their big challenges right
Speaker 2:Talk to me about what we're seeing from the Fed. Poly market has the number of rate cuts spiking today. Three potential rate cuts in 2025 spiked from 18% up to 38%. And the chance of just a single cut is falling as well as two cuts. Polymarket is certainly expecting more cuts to come.
Speaker 4:And most people, yeah, most people pricing I mean, it's pricing cut cut cut.
Speaker 2:Yep.
Speaker 10:Yes. So I think, you know, it's funny. The last time, I was chatting with you guys, it was from Jackson Hall, and that was a really interesting moment because you hit you if you talk to a lot of the regional Fed presidents, like, I don't know. Like, there's also inflation still looks kinda warm. It's not totally obvious that a cutting cycle or certainly an aggressive cutting cycle
Speaker 4:But you said I'm here. I remember you said you said the labor market is clearly softening. This is the case for cuts. Like, you you you've set that line.
Speaker 10:If I will lay that out thank you. Thank you. I I if I said something smart, I appreciate you remembering it. But, you know, Powell's speech at Jackson Hole, I called it. That's that's the main takeaway here.
Speaker 10:I called it. No. But, you know, it is it's a Powell's speech at Jackson Hole clearly clearly centered risks to the downside with the job market. And I just think everyone has come around to that view. And so now the question is, especially in the wake of today's number, is that not only does September seem like a lock, it is for a rate cut.
Speaker 10:I think the decision is in like ten days. The question is could they go 50 basis points? Could they go aggressive kind of like they did last September? And then also I think October, which people thought, well, maybe they'd take a pause after a rate cut that is now perceived as a good chance. So I think this sort of world really is coming around to arguably the Paul, the Powell and then the Christopher Waller view.
Speaker 10:He's probably been the most dovish of the Fed governors over the last six months. He's been pretty forceful in saying, look, the labor market is fairly softening and rate cuts are due. And I think right now, it's the it's the Waller Powell sort of view that's winning out in markets and the expectation is they'll be able to get the rest the rest of the FOMC bond.
Speaker 2:Do you have any insight into what's going on with the treasury doing a bond buyback to lower yield? Someone in the chat is joking that they're printing money to buy back printed money. I don't know if that's real.
Speaker 4:Same old, same old.
Speaker 10:I you know, if I to be honest, I I do not put I think these things tend to be very marginal and sort of plumbing related. You know, ultimately, the sort of long end of yield curve comes down to the market's view of the inflation trajectory and what the Fed is expected to have to do to maintain essentially its 2% goal. Some of these treasury moves, you know, they may have to do with liquidity, etcetera, but I my advice to people when I have encountered the accomplish in the past is that generally these things are somewhat noise and to keep your eye on the ball about what's happening in the economy over the medium term and how you expect the Fed to respond to.
Speaker 2:So what's the next date on the calendar that we need to be tracking? Is the next Fed meeting that's the big news or is there going be more data?
Speaker 10:Yeah. That's in Yeah. That's in two weeks. You know, the thing in the meantime, what I would say is, yesterday, we had the weekly initial jobless claims data. That's been creeping higher.
Speaker 10:I think you should keep that comes out every Thursday. Mhmm. And I think people should keep watching that because one of the ways that the economy has been characterized for really, like, over a year now is they talk about this low hiring, low firing equilibrium, which is that there aren't a lot of layoffs, but also it's not a great time not a lot of as we've been talking about, not a lot of headcount expansion. The initial jobless claims has been picking up a little bit lately. Yesterday, we got two thirty seven ks, I believe that was ahead of it was a bit higher than expectation.
Speaker 10:And you don't have to wait. You know? Like I say, jobs report, Super Bowl once a month, but you get these mini Super Bowls every Thursday where they talk about initial jobless claims. It's no easier data. Oh, one other thing.
Speaker 10:So keep an eye on that. Yep. Also, this coming Tuesday, there's something called the and I don't remember what this acronym stands for, but it's QCEW benchmark revision. So probably says for quarterly census employment something. This is actually how they sort of reset labor market data because we know it's all very noisy, but every quarter they draw from actual a complete sample of everyone who's paid into the unemployment system.
Speaker 10:And so they get this very big snapshot and it could show there's this view. It could show that the pace of job creation for all of 2024 going back has was lower than expected. So they're they're always doing these revisions, but I suspect that Tuesday will be interesting in terms of what what it says backwards looking about just how much employment there really is right now.
Speaker 2:Yeah. I'm looking at the quarterly census of employment wages, and it says that Santa Clara, California has the largest fourth quarter over the year, wage gain at 15%. And now I'm thinking if Menlo Park will see a massive spike in average wages because of the the AI trade deals. Just they got five people at a billion dollars a year.
Speaker 4:Speaking of big pay packages, did the did the new Elon pay package feel low to you?
Speaker 10:Yeah. They're just paying them a trillion dollars. What's the point of reincorporating from from Delaware to Texas if they're only gonna bump your target
Speaker 4:and send them trillion dollars? Yeah.
Speaker 2:Should have covered something. Yeah.
Speaker 10:Somewhere where you can really where an executive can really get paid for the work that they do.
Speaker 2:Should be like, look.
Speaker 10:For one.
Speaker 2:I want 100% of the dollars that I create in the shareholder
Speaker 10:value here.
Speaker 4:And were were you disappointed to see that the White House snubbed Meek Mill on the invite to that dinner, AI dinner last night? It felt like they really it was a big f u Yeah. To Philadelphia broadly.
Speaker 2:Yeah. I I would agree.
Speaker 10:I was shocked. I was shocked by that. It's time it's time to shake that room up in terms of who who are the big tech names that get invited to these things. But clearly, our up and coming AI entrepreneurs, regardless of what industry they are currently in or had been in, to have a voice at the table. I do think going forward too, we really need to have inflation data excellent low par.
Speaker 10:Just generally, when when you see these sort of when you sort of when you see these sorts of wage gains so concentrated, we need to start having a formal, you know, on the Bloomberg, it'd be CPI Yep. Or CPI, or CPI, X Men, Low Park. Yep. That's the kind of data that we get.
Speaker 2:I mean, there's also a $10,000,000,000 tender offer going on at OpenAI. So, you know, if you're in the market for San
Speaker 4:Francisco Somebody somebody was running the numbers and and showing that there's, like, there's there's only I think a a few 100 homes that are in the like 4 to $10,000,000 range in the in San Wow. Pretty competitive. And and and so imagine you just flood the market with like $10,000,000,000 in Yeah. Like fresh cash and you get a bunch of cash buyers. Yeah.
Speaker 2:Last question, we'll let you go. There's something in the chat. Someone's talking about the US Open, which I guess is US That's
Speaker 4:The US. Okay. United States Market State Operations. United States Open.
Speaker 10:Yeah. O O open. Yeah. Maybe isn't there like a real estate company? Maybe it has something to do with that.
Speaker 9:Yeah. Anyway, yes.
Speaker 2:But do you have a prediction? They wanna know they wanna know if you're watching tennis. No. And if you have a prediction or favorite. Who are you rooting for?
Speaker 10:I know. And I I'm so embarrassed every summer I try to get into tennis. And I actually take a few tennis lessons every summer, and it's like, this is the year we're gonna go to the US Open. This is the year I'm really gonna pay attention. Yeah.
Speaker 10:No. I I said we have nothing to despite my efforts year over year, I've once again nothing positively contribute to this decision.
Speaker 2:Yeah. Me too. I I have no idea. But I I hopefully I will see some more great capital allocators photographed and paparazzi shots. That's what I watch The Open for.
Speaker 2:I watch the paparazzi feeds.
Speaker 10:As do we all. As do we all.
Speaker 4:Anyway, thank you for Joe, dropping enjoy your afternoon. We love We'll
Speaker 2:talk to you
Speaker 4:soon. Talk soon.
Speaker 10:Talk to you
Speaker 2:soon. Man.
Speaker 6:Bye. Legend.
Speaker 4:Did you see
Speaker 2:Linear. That Yes. It's a purpose built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product roadmaps.
Speaker 2:Start building with Linear.
Speaker 4:It really is a it really is a crystal ball for your roadmap.
Speaker 2:Yeah. It is. Anyway, what did you see?
Speaker 4:This is interesting. Guido Reichstadter is doing a hunger strike outside of Anthropic.
Speaker 2:He
Speaker 4:said, hi, my name's Guido. I'm on hunger
Speaker 2:Couldn't get in.
Speaker 4:Couldn't get He said, I'm on hunger strike outside of the offices of the AI company Anthropic right now because we are in an emergency. Anthropic and other AI companies are racing to create ever more powerful AI systems. These AIs are being used to inflict serious harm on our society today and threat Why to
Speaker 2:is it?
Speaker 4:Why Increasingly increasing is we'll get to that. I think it's very likely that he's hitting rate limits on pro make plan. That sense. And threatened to inflict increasingly greater damage tomorrow. Experts are warning us.
Speaker 4:Okay. We're gonna trust experts here. Experts are warning us that this race to ever more powerful general intelligence puts our lives and well-being at risk, as well as the lives and well-being of our loved ones. Are warning us that the creation of extremely powerful AI threatens to destroy life on Earth.
Speaker 2:Okay. Tyler, what you got?
Speaker 3:So I think it also could be, you know, Dario just said they're not selling AI to China anymore, so he might just be SPV holder and he's mad about
Speaker 2:Yeah, the less revenue from not selling internationally. Makes sense. Mean, this is
Speaker 4:incredible marketing Because
Speaker 2:they're not a public company, can't really take out a short position and become an activist.
Speaker 4:This is incredible marketing for Anthropic.
Speaker 2:Yeah. You think this is some sort of like mischief style stunt to promote the company? Yeah. You need to get protesters.
Speaker 4:It's so funny to single out anthropic. The most safety oriented.
Speaker 2:Yeah, they are the most safety Like,
Speaker 4:why not? It's just like
Speaker 2:Like, xAI is like, we will just put everything out. It's it's it a it the first name is actually Adolf. It's
Speaker 4:like Mecca.
Speaker 2:Mecca. Yeah.
Speaker 4:Anyways, lot of lot of big buzzwords in here. Okay. Power power bottom dad says, this is so crazy. I'm kind of for it.
Speaker 2:Yeah. Does the does the post look one shot at all?
Speaker 4:Victoria says, bro, you're on a fast. If it's good for you, if you get to seven days, it'll do wonders wonders for your health.
Speaker 2:Because this is bodybuilding related?
Speaker 4:People are just responding to his post with pictures of their food.
Speaker 2:Okay. Oh, that's so mean. Wait, but are there any em dashes in the post?
Speaker 4:Zero em dashes.
Speaker 2:It's not this, it's that, nothing like that?
Speaker 4:Mean, basically says
Speaker 2:Seems like Pierre.
Speaker 4:The same thing over and over and over. Okay. Kind of a I wish he put this into Claude and of
Speaker 2:What is his clean name? It
Speaker 4:Guido Reichstadt. Reichstadter. Interesting.
Speaker 2:Well, good luck to him. Hopefully he dries out and cuts down on the body fat, gets extra diced. We say it's bulking season, but it's not right for everyone, so people gotta cut. And no better way to cut than
Speaker 4:going on an aggressive He is the co founder of a company called Stop AI. And he has one connection on LinkedIn.
Speaker 2:Stop AI. Oh, you're connected to him.
Speaker 4:No, no, no, I wish. His Okay. Only experience on his LinkedIn
Speaker 2:Has he stopped anything else? Has he stopped anything else?
Speaker 4:Yeah, it'd be crazy if his last job was co founder at Stop NFTs.
Speaker 2:Or like Stop Time Travel. He's like, I was successful. We don't have time travel. Stop teleportation technology. Stop hypersonic planes in America.
Speaker 4:There's not much on Guido. He is interested in LinkedIn news according to his interests on LinkedIn. Interesting.
Speaker 2:Well, one AI you should not stop is putting your sales tax on autopilot with Numeral HQ. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq. On the more optimistic side of things, Everyday Astronaut has been reflecting on the Starship program over the last week.
Speaker 2:And one thing has become obvious to him. This is from Everyday Astronaut, a fantastic space related content creator. He says, SpaceX is enjoying the freedom to try and fail in a way they couldn't with Falcon Nine. Doing anything experimental on the Falcon Nine was risky because it was SpaceX's only source of income. It was their lifeline, their workhorse.
Speaker 2:Making any tweaks to the Falcon Nine to try and land a booster back in the day was a delicate balance. Don't push the envelope too hard because it could lead to a failure of the primary mission, which did happen twice. Yes. I believe that they blew up a satellite that Facebook was putting up. It was very dramatic and kind of foreshadows the showdown and the potential MMA fight.
Speaker 2:But of course, they have a contract and I think the money flowed appropriately. The companies weren't actually upset at each other. But it was kind of a crazy crossover moment in tech. Anyway, everyday astronaut says, when SpaceX first landed a booster almost ten years ago, they were fairly slow to refly, and those first non Block V boosters were only capable of a couple of reflights. This gave pause to some of the industry slash community, fearing all of this reusability hype wasn't going to pan out.
Speaker 2:But SpaceX learned from every landing attempt to develop their Block five Falcon nine, which has now gone on to have a single booster fly 30 missions. Absolutely unheard of.
Speaker 4:That's wild.
Speaker 2:Now imagine if SpaceX could have had the freedom to not worry about flying customer payloads to get data during Falcon nine's reusability campaign. Imagine if they could have tested engine out procedures or push booster reentry profiles or try hot staging or what or what have you. This is the phase that SpaceX is now in during the Starship program. I know we hear the talking point of, quote, today's payload is data, and it could seem like a gimmick or excuse even, but that's a freedom almost no rocket program has had before. To just, to know you can just try things out, fly real life hardware without bankrupting the company is the ultimate development platform to be able to push engine out capabilities, remove heat shield tiles on purpose.
Speaker 2:And we saw that with the video. It's like this crazy garbage floating around. They removed heat shield tiles. The thing barely made it back because they're pushing it to the absolute limit. They're not just trying to reach orbit.
Speaker 2:They're trying to do something that's never been done before. Build a rapidly reusable rocket, a rocket that can land and refly. This could have never this has never been done before, and honestly, it's silly to think you could do something like this without trying some extreme things. That's what we're seeing today, and that's extremely exciting to me. I can't wait to see version three of Starship fly because they've learned so many lessons already, and they have a factory capable of making rockets at scale.
Speaker 2:And we just get to sit back and watch the cook. It's an exciting time to be alive. Kitchen's open. Kitchen's open. They're cooking.
Speaker 2:Anyway, you want take us us through the next few timeline posts, Jordy, what you got?
Speaker 4:Absolutely. I I just feel bad because we kind of glossed over some of Alan's trades. 2021 bought a house in Carp for 70,000,000, sold it for 96,000,000 two years later.
Speaker 2:Wait. Carpinteria? Yeah. Dollars 96,000,000. That's a huge number.
Speaker 2:Wow, that must
Speaker 4:have been Another one bought a house for $7,000,000 in 2017, sold for 11,000,000 in 2018.
Speaker 2:Yeah, these are great.
Speaker 4:Another one's rebought a house for $14,000,000 in 2021, resold it for 2021 sorry, 21,000,000 in 2023.
Speaker 2:Some of these are so quick. Buy in 2024, sell in 2025, dollars 10,000,000 gain. I mean, she's just pushing this. Holmby Hills, same year.
Speaker 4:I think it's $10,000,000. She bought a house for $20,000,000 in 2022, sold it for $36,000,000 in the same year. That's great. An absolute dog.
Speaker 2:The Usher house. Usher listed the home for sale for $35,000,000 in July 2019. We just can't quit the mansion section today. Should we talk about the house of the month? What else is in here?
Speaker 4:Don't you call call Eric right now
Speaker 2:Oh, yeah. Okay.
Speaker 4:So he's ready.
Speaker 2:Yeah. Well, let's get Eric Lyman on the phone. I got an important question for him.
Speaker 4:We saw the news about the billion dollar run rate and we just had one question to ask.
Speaker 2:Let's get Eric Lyman, the CEO of Ramp, on the phone. Hey.
Speaker 4:Eric, how are doing? You're live.
Speaker 2:You're live.
Speaker 10:We're we're live. What's going on?
Speaker 2:Give us the update. There's some milestone that just dropped yesterday, I believe.
Speaker 10:It is we couldn't be happier. Ramp is now doing more than $1,000,000,000 a year in revenue.
Speaker 2:Let's go. Congratulations. I just have one question. Is the job finished?
Speaker 10:Job's not finished, guys. Job's not finished. Just getting started.
Speaker 2:Fantastic. Well, I'll let you get back to work. Thank you so much for your
Speaker 4:Thank you for calling in.
Speaker 2:We'll talk to you soon.
Speaker 4:It's great to hear from you.
Speaker 10:All right, cheers. Have a great weekend.
Speaker 2:You too. Talk to you soon. Bye.
Speaker 4:It's not the weekend yet.
Speaker 2:It's not the weekend yet.
Speaker 4:Mark Canis has got a buddy from high school who's on his fifth AI startup in two years. No technical engineering background. He's an MBA. Hires engineers with low budget to do all the work and build the product while he is CEO and manages. Just started a new AI education startup, Wish I Could Short.
Speaker 2:I wonder how this will pan out. It could work. I don't know. Depends on exactly what he's doing. But it certainly is not the YC path, not the make something people want.
Speaker 2:It is a very management consultant, very MBA coded strategy.
Speaker 4:Yeah, good luck getting into YC with this strategy.
Speaker 2:Good luck. Good luck.
Speaker 4:Naval says, if your smartest friends start saying crazy things, pay attention. A paradigm shift may be underway. I think he's talking about people getting one shotted.
Speaker 2:You think that's it?
Speaker 4:Could be.
Speaker 2:I don't know. It might be, you you might be talking about AI, right? Like you have really smart friends and they start saying crazy things like, you know They discover Yeah, it's you gonna be bulls. Yeah, all this other stuff. Not that, not that.
Speaker 2:But actually, like, you know, the idea of of super intelligence is a crazy thing to say. But it might be real, you know? It might be it might be real. And it might and it might start in your customer service organization with fin dot ai, the number one AI agent for customer service. Number one in performance benchmarks, Number one in competitive day tops.
Speaker 2:Number one ranking on g two. So we we covered the jobs gains. They were all part time. Full time jobs dropped by 375 356 ks. Part time jobs grew by 197 ks.
Speaker 2:Certainly not good for the durable long term healthy economy. We But earlier this year, there was a massive gain in full time employment and then that dropped. And so there seems to be gyrations every which way. But anyway.
Speaker 4:Yeah. Crazy story coming out today. SEAL Team six in 2019 attempted a covert mission in North Korea to plant a device to intercept Kim Kim Jong Un's comms. They should have just waited and got him a friend.com. Friend.
Speaker 4:Just say, hey, this is gonna be your new bestie. Just wear it.
Speaker 2:Keep it
Speaker 4:on your person.
Speaker 2:That'd work.
Speaker 4:Authorized by Trump, the mission failed when SEALs unfortunately killed civilians mistaken for security forces. You can get into the story a little bit because we don't talk about geo we don't talk about politics, but we we do enjoy geopolitics. In early twenty nineteen, Trump approved a clandestine SEAL Team six operation to plant a device in North Korea to intercept Kim Jong Un's communications. Red Squadron, known for killing Ben Ladden, rehearsed for months. The mission aimed to gather intelligence during nuclear talks.
Speaker 4:This was the Yeah. Nuclear you know, Trump and and Kim Jong Un had been communicating around, obviously, North Korea's nuclear program. On a winter night, SEALs emerged from the sea near North Korea's coast. A nuclear submarine deployed two mini subs carrying eight commandos. Lacking real time drone support, they relied on delayed satellite images.
Speaker 4:The shore appeared clear, but a North Korean boat emerged. Mistaking civilians for security forces. The seals opened fire, killing two or three shellfish divers. So apparently, they were on the beach. Yeah.
Speaker 4:The boat pulled up, started using lights. They just assumed it was security forces, ended up being fishermen. And anyway, so apparently, the Trump admin at the time didn't notify congress. And the SEALs sank the bodies, abandoned the device, and signaled for extraction. The submarine risked exposure, retrieving them in shallow waters.
Speaker 4:North Korea detected activity but made no public statement. The mission's failure hidden by secrecy risk escalating tensions from a nuclear armed state.
Speaker 2:So Military reviews justified the civilian deaths under engagement rules claiming unforeseeable errors. The Trump administration withheld details from congress potentially violating federal law. Many involved many involved seals were later promoted despite concerns about special operations uneven track record. It is fascinating that, so Disclosed TV talked to 24 anonymous sources, including Trump administration officials and military personnel with direct knowledge. Their anonymity reflects the operation sensitivity.
Speaker 2:It is obviously a tragedy. Yeah.
Speaker 4:Seems a bit hard to hold special operations teams and say you have to have can't fail if you want to rise up in the organization. Sure. Sure. Right?
Speaker 2:But, yeah, I mean, obviously, you want every operation to be executed flawlessly. Anyway, in other news, the Washington Post is now on Substack. Let's hear it for the Washington Post. The Washington Posters. Jeff Bezos They heard
Speaker 4:you can post. Jewel. You can post notes on Substack. They said we gotta get involved in this.
Speaker 2:We love posting.
Speaker 4:We love posting.
Speaker 2:It's in our name. Posters. So this was, I believe, a a story that was broken by Emily Sundberg in Feed Me, and she did a little bit of an interview here. Let's see. Welcome to my life, says Rachel Tashjian.
Speaker 2:And Emily asks, how do you see the Washington Post's game plan on Substack playing out? Is there something that will make your strategy different from other legacy media brands that have joined the platform? I'm actually not that familiar with other legacy media brands that have joined Substack. Are you subscribed to
Speaker 4:any And Therese and Horowitz.
Speaker 2:That's not specifically a new media brand. At at this point, they've been doing media for twenty years, though, so I can't That's what I'm saying.
Speaker 4:That's what I'm saying.
Speaker 2:Play the shots fired.
Speaker 4:No. I'm just I'm just joking around.
Speaker 2:No. We are the legacy media. They are the new media. We want to be legacy media. I don't the the Washington Post responds, I don't necessarily see Substack as an alternative to legacy media.
Speaker 2:I see it as an additional tool to experiment with in a fantastic way to connect with new readers. I love getting into the mix in the comments. Comments section, yep. I think a successful journalist in 2025 should be on as many platforms as possible and have a tailored strategy for each one. Completely agree.
Speaker 2:So it was important to us that we publish original content exclusively on Substack and really engage with the platform on its own terms. I consider post runway something like Opulent Tips goes to Milan and Paris. I don't report from the chiffon trenches as Andre Leon Talley love lovingly called the fashion world, for my newsletter. So now I'm going to bring a bit of that madcap approach to the access driven reporting and criticism I do for the paper, I'll and still be doing all my usual reporting and runway reviews for the post. Will there be a paid strategy?
Speaker 2:Asks Emily Sundberg in Feed Me. The the Washington Post responds, post runway will be free. Woo hoo. What does success on Substack looks look like for the Post, says Emily. Having fun opening the Post's world to new readers and introducing the amazing voices on Substack, especially fashion writers, to the Post's audience.
Speaker 2:Well, welcome to Substack, the the Washington Post. Maybe we should do a collab and talk about fashion. I don't know. I mean, I'm I'm dressed to the nines today. I'd love the Washington Room
Speaker 4:Yeah. Place the invite.
Speaker 2:To review the wonderful yellow suit.
Speaker 4:And we gotta give
Speaker 2:it up for
Speaker 4:to Sierra. Yes. And they're raising some new capital. Yes. $350,000,000 from Green Oaks.
Speaker 4:Okay. Doubling down. Down Sierra at a $10,000,000,000 valuation. And Zach DeWitt
Speaker 2:I think he's at Wing.
Speaker 4:Saying, incredible seed investment for Benchmark. They likely own 15%. It's a $450,000,000 fund.
Speaker 2:Let's go.
Speaker 4:Three to four x already on one investment. We love to see capital allocators Look
Speaker 2:at goat emoji.
Speaker 4:Congratulations. Job's not finished, but certainly a fantastic milestone. Power Bottom Dad says, quoting Joe Wiesenthal's post saying that US has lost 78,000 manufacturing jobs this year.
Speaker 2:That is a lot.
Speaker 4:He says, Chad, is this re industrialized? I'm kind of tired of winning. You would, I don't know. It's hard to, you know, Joe Joe's point, which is real, is that you can't expect things to have an immediate impact. Yeah.
Speaker 4:But at the same time, if US manufacturers were feeling good Yep. And had lots of business
Speaker 2:Yep.
Speaker 4:They would probably be trying to keep as many people as they can.
Speaker 2:There are two economic statistics that I find important in measuring the progress of re industrialization or industrial might. The first is jobs, like manufacturing jobs are important. It's the, in many ways, the heritage and the backbone of The US economy, although The US economy has shifted to a services driven economy. But if you want to measure manufacturing capacity, it is fine to just use GDP. What is the total value of all the goods that are manufactured in America?
Speaker 2:Is that going up or going down? I actually don't know the numbers off the top of my head, but when I think about the next, I was talking to someone who was saying that America will re industrialize, but it will re industrialize with, on the back of robots and automation, and there will be much higher leverage for each individual manufacturing worker. You've seen this with companies like Hadrian. There's not that many people in that facility for a lot of CNC machines that are basically automated. And when you look at who are we actually competing against, if you're benchmarking The United States against China, yes, China has a ton of people that migrate from outside of Shenzhen into the manufacturing hubs to assemble iPhones during the push.
Speaker 2:They bring in a million migrants to assemble iPhones right before the new iPhone's released. And China obviously employs tons and tons of manufacturing employees. But at the same time, they also have lights out facilities where everything is effectively automated. And when you look at the way, at the design of the latest Tesla factories, the design of the latest Starlink factory, we are making things in America, but we're doing it at a much lower level of headcount. Headcount Some of
Speaker 4:our best manufacturers aren't contract manufacturers, right?
Speaker 2:They're
Speaker 4:Elon companies.
Speaker 2:Yeah, vertically integrated.
Speaker 4:Yeah. But over time, there's a crazy story from the BBC, which I think stands for Business Business Central.
Speaker 2:Business Business Capital.
Speaker 4:Business Business Capital.
Speaker 2:That's what I like.
Speaker 4:They said this was basically breaking live for today. Almost 500 people have been arrested at a Hyundai factory in Georgia by immigration authorities
Speaker 2:And what they a workplace
Speaker 4:grade. Majority of those attained at the 3,000 acre site, which was built by the Korean automobile manufacturer to make electric vehicles, are Korean nationals. That's very interesting. So South Korea expressed concern and regret over the operation,
Speaker 2:which is
Speaker 4:kind of an interesting dynamic to just be like, yeah, we regret that because it's the gov I mean, it's South Korea saying that, not Hyundai.
Speaker 2:You
Speaker 4:think Hyundai would be like, sorry, because this scale is
Speaker 2:Gotta like sort out the visas, guys. Yeah. You know, I I think everyone's all for like, bring the TSMC, the semiconductor experts to Arizona, but make sure that they fill out the immigration paperwork Yeah. If they're gonna come over here and build. Anyway, BucoCapitalBlok says, perhaps we are moving to the find out stage of paralyzing The US economy with a multi quarter barrage of nonsensical inconsistent and conflicting set of economic policies.
Speaker 2:And there's some people in the chat. Or is this bullish? Is this bullish? No. This is not bullish.
Speaker 2:He's black billing. Very upset about the economic data that was printed today related to a lot of the economic policies, mostly from the tariffs.
Speaker 4:Alps has a post showing the Las Vegas sphere saying it's looking a little bit different. This to This me SSI advertising? This super intelligence rearing its head?
Speaker 2:Yeah. I love that Ilio is leaning in to the bit and having fun with the hats and whatnot. Wasn't there another hat? Oh, yes. PixelHulk.
Speaker 2:PixelHulk says they now have a new line of Marc Andreessen merch. And it's a hat where the head looks like Marc Andreessen. This is like a fantastic AI image. Imagine this is AI. It looks like some sort of however they made this, whether it's Photoshop or AI, it's flawless.
Speaker 2:Yeah. I do think this would sell pretty well. It is ridiculous looking, though.
Speaker 4:TBPN was featured at Volta
Speaker 2:Oh, yes.
Speaker 4:Earlier. Theo did a photoshoot. There's a Ferrari in the picture, which we love. Yes. And I believe one of Volta's employees.
Speaker 4:And anyway, shout out to John Fiorentino.
Speaker 2:You gotta do a live show.
Speaker 4:Can't wait to visit the Volt HIT
Speaker 2:HQ. In Nashville? It'd be great. The flagship. It's even the HQ.
Speaker 2:This is the flagship store. Right?
Speaker 4:The flagship.
Speaker 2:This is the you gotta make the pilgrimage.
Speaker 4:Yep. We covered Tempo, the new l one built by Stripe and Paradigm, so we don't need to cover it again. But Mert was firing back. In the in the announcement, they were the Tempo team was basically highlighting potential limitations from existing l ones. They highlighted transactions per second.
Speaker 4:They highlighted moments that you couldn't run payroll again Yeah. When when Trump if you were trying to run payroll And that's because the day that Trump coin launched
Speaker 2:So Trump coin launched on Solana. Is Not that Ethereum? Because I know Ethereum, the narrative around Ethereum has been like the network's congested, there are high fees, but that was the whole idea behind launching Solana was that it was going to be much more scalable and there was some sort of trade off there. And then this is like the next L1 and people are upset about it in kind of both camps. But I invited Matt on the show and Mert, who were both talking about this, would love to
Speaker 4:Yeah. They're happily They're
Speaker 2:tripping on a little bit
Speaker 4:under the radar now. Mert said, guys, you can just say you want more full stack control and distribution. You can also say you want the l one premium or a controlled validator set. These are perfectly legitimate answers, but you look unserious and hurt your brand when you start talking about scalability and defending the Solana blockchain. Yes.
Speaker 4:Yes. Yes. It is proven that it can scale. But, yeah, mean, I I think this kind of play makes sense because, of course, Stripe and Paradigm would want to own the rails effectively even if it's gonna be network driven.
Speaker 2:Yeah. And it does seem like Stripe has a large enough customer base that they can actually bootstrap the network fairly easily, right? But just offering it baked into checkouts that are already powered by Stripe potentially. Although I wonder how, like what the onboarding process is like because even just getting a Solana wallet set up, it's not as easy as like, oh, I have a different credit card. And so the same Stripe form works the same.
Speaker 2:Maybe you wrap it in a credit card. I don't know. I still don't exactly understand, like, where Tempo fits in the full stack and and and how this gets rolled out. But I'm excited to learn more. Mean, we'll certainly have some folks on talking about it.
Speaker 4:More importantly for some members of our audience, Mercedes Benz is teasing the return of the four door soft top Cabriolet G Wagon. This is the moment that many of us have been waiting for. Yes. G Wagon, arguably the greatest car ever made. They have done many iterations of the Cabriolet over the years.
Speaker 4:I came close to buying one a couple times from my friend Blake who has a company called Found Objects here in LA. He sources these incredible G Wagons from all over the world. Anyways, I'm super happy that they're bringing this back. This this image that is pulled up on the screen right now is actually, I think, somebody taking some artistic liberty. The actual image, we can pull up here if possible.
Speaker 4:I put it in the timeline. But the actual image is blurred out on the official Mercedes account. And so I expect this to be, like, somewhat somewhat different than than the picture that we just had up on the screen.
Speaker 2:What's crazy about this
Speaker 4:is I think that they're gonna I just expect them to modernize it a little bit.
Speaker 2:So Mercedes has a g six fifty Landole, which is the soft top four door, but it's a Maybach, and I believe it trades at around a million dollars a car. And so I
Speaker 4:can't believe some anybody would sell that for just a million. Just a million. Yeah. This is Yeah. Is image that he posted on Instagram.
Speaker 4:Yeah. And anyways, I'm super excited for this. I wonder how limited it'll be. I will definitely struggle not
Speaker 2:to go far. To pick it up.
Speaker 4:John John puts a lot of pressure on me to not just continue buying G Wagons to mix it up.
Speaker 2:You gotta mix it up. It is think I think if you want a convertible
Speaker 4:Even Speeder. Speeder Speeder drove my G the other day Yeah. And said, you know what? I thought these were ever hyped, but I get it now.
Speaker 2:I get it now. I get it now. But if you want a four door convertible SUV, why not get a Nissan Murano Cross Cabriolet? It's actually a two door. Yeah.
Speaker 4:But if you want a two door.
Speaker 2:If you want a four door, yeah, you kind of
Speaker 4:have to upgrade from the
Speaker 2:new sunroof cross cabriolet to the G650 Cabriolet. It'll take you from maybe $20,000 to maybe $2,000,000 But you do get those extra two doors. So Yeah. I I I think it's a pretty clear
Speaker 4:I can't value there. I cannot wait for this.
Speaker 2:Do you think the G Wagon salesman should be on Adio, customer relationship
Speaker 4:Yeah, absolutely. Should.
Speaker 2:Adio is the AI native CRM that builds, scales, and grows your company to to the next level. You might be tagged as just already closed one and for some g wagon owner in Adio, and they put you right back in, reach back
Speaker 4:out for me. They certainly do.
Speaker 2:As soon as as soon as you move into closed won, they move you back into prospect.
Speaker 4:Yep. Back in the pipeline.
Speaker 2:Back in the pipeline. Oh, Sergey Brin was at the dinner last night with Donald Trump. And Google is back in founder mode. You love to see Sergei having a seat at the table again, says Beth Jasos. Very exciting.
Speaker 4:Post from TJ Parker
Speaker 2:Yes.
Speaker 4:Was absolutely insane.
Speaker 2:Insane.
Speaker 4:We gotta have we should we should we should call TJ right now and ask him to explain himself. So it says, fun facts. I was the youngest VP at Amazon. Yep. Of course, he sold PillPack to Amazon for $1,000,000,000.
Speaker 4:That's good. He said I was the youngest VP at Amazon. I've also personally never bought anything on Amazon, which is just absolutely incredible accomplishment. How
Speaker 2:do you live your life without ever buying a single thing on Amazon? It's crazy.
Speaker 4:I think what he said I think he just I think he just said if he'd like something, he sends a link to his wife and then she
Speaker 2:Okay. Buys You still have Amazon purchases. He was too poor and then too rich.
Speaker 4:Poor and then he was too rich.
Speaker 2:Yeah, maybe. Yeah. I mean, like, really telling yourself for not taking the gig seriously, TJ. It's like, you know
Speaker 4:Well, was focused on something else. I mean, like, he was focused on
Speaker 2:I'm here, I guess. But, no, I should be I just think, like, like, if you if you get a job at Apple, you're expected it's polite to wear an Apple watch, you know? You walk around Apple HQ, Cupertino, like, everyone's wearing Apple watches. They're not wearing Samsung Galaxy gears, you know? They're using the If you there's a famous story about if you are trying to sell a piece of software or any do any sort of business dealing with Nike, when you go to their headquarters, you should be wearing Nikes.
Speaker 2:You do not show up to Nike Headquarters in Adidas because they will that they will take that as a sign of disrespect to their culture.
Speaker 4:It's like if we get lunch or breakfast with somebody and they insist on paying and they don't pay with a ramp card,
Speaker 2:is Oh, I was about to say
Speaker 4:big sign of disrespect.
Speaker 2:I'd rather just have you not pay at all. But very, very silly, very silly and I guess, you know, evidence that he was ready to move on and get into the world of investing in venture capital at Matrix where he is now. Tim Cook has an iconic photograph in Getty Images. He hit the Abbey Road, says Mark Gurman on the way to meet Trump. You love this.
Speaker 2:He is flanked by a crew of what appear to be bodyguards or maybe just the boys, maybe just the homies. But he's he's a good good picture. One for the one for the tech, the Museum of Business History. We talked about the this. Oh, we should go into this fabricated knowledge post.
Speaker 2:So Yeah.
Speaker 4:I'm gonna let you cover this. I'll be
Speaker 2:right back. So Doug O'Laughlin has this thesis. He says, I think lagging edge is going to be is going the way of solar panels. Some can win, but the aggregate the aggregate big number of chips is going to be bad. And so it says, first up is Texas Instruments.
Speaker 2:Where does he say this? April's pop is mostly pull forward. The lagging edge price war. Lagging edge capacity now behaves differently. Another upturn may come, but it may be muted and prolonged.
Speaker 2:Something is broken in auto and industrial. Texas Instruments is right to run inventories down. They likely will not need as much. There's a lagging edge permaglut, he says. What no one wants to admit, lagging edge capacity may be structurally different now.
Speaker 2:Earlier, I argued prices had to rise because new fabs cannot profit from selling lagging edge chips at prices set by a fully depreciated fab. There are obviously pricing problems in this scenario with a new fab. A company can't turn a profit by selling lagging edge chips at a price that was previously dictated. Reality, the lagging edge took price in a temporary market upturn. Now we are reverting to the mean.
Speaker 2:The old trend line is back. There's no meaningful new demand for old nodes, and what exists is made and consumed in China. So you go and you make the smart toaster or the smart dishwasher, and you need a chip in there. You don't need a TSMC three nanometer TPU NVIDIA chip. You just need some lagging edge chip.
Speaker 2:It's gonna be made in China. It's gonna be assembled in the product in China, and then you're gonna get that smart toaster delivered to you. And all of that's gonna happen within the Chinese ecosystem. And so if you're running a lagging edge fab in America, Doug O'Laughlin thinks you're in trouble. The COVID super cycle plus a new China supply line that does not care about capacity economics points to a forever glut.
Speaker 2:China has a long record of flooding the low end. State directed CapEx boosts output at the expense of efficiency. Doug wrote about this involution dynamic recently in China's race to the bottom. Products at 90 nanometer and above should internalize a permanent China glut. Companies resist, that conclusion, but the case studies are familiar.
Speaker 2:Solar modules, LCDs, LEDs, steel, shipbuilding, batteries. You've seen it time and time again. China wants to stay on the lagging edge and dominate there, the commoditized lagging edge, and not worry about, you know and and they see that as the learning curve to get to the the leading edge, but they are willing to sell at a lower margin for a very long time if they need to. Companies can still win share, through performance and packaging rather than by producing older chips at lower cost, ADI is a masterclass in adding capabilities. MPWR has focused on higher end power.
Speaker 2:The long tail will face a flood of Chinese supply. Good luck to the older fabs. I cannot resist talking about Marvel during Marvell behind the paywall, so head over to Fabricated Knowledge and subscribe to the Substack. And we will have Doug O'Laughlin on the show again soon to dig into all of the dynamics of both leading edge and the lagging edge. So Josh Steinman, famous for saying we are good morning, we are going to win every single day, has a post here that's not good morning, we are going to win.
Speaker 2:It says you versus the guy she told you not to worry about, Robotaxi versus Waymo service area in square miles. So Waymo has been on a very consistent grind adding square miles every year for the past seven six years, gone from maybe 50 square miles to now 750 square miles, whereas Robotaxi went from zero to almost a thousand square miles in in just under
Speaker 4:a few Hard to hard to to to make an equal comparison here Yeah. Based on the single metric. Yeah. Obviously, I'm super excited about both companies, but
Speaker 2:One's still in beta, but the app is doing very well with Robotaxi. Will see this
Speaker 4:Number one in
Speaker 2:the safety drivers, number one in the charts. A little bit of a narrative violation. Maybe made a phone call with Tim Cook. And Tim Cook said, thank you, Elon, for getting us to space. Thank you for
Speaker 4:We'll put you at the top of the charts.
Speaker 2:Thank you for Starlink. Thank you for the Model three. Thank you for the Model s. Thank you for the Model y. Thank you for the Model x.
Speaker 2:Thank you for the Cybertruck. Thank you for the Roadster. Thank you
Speaker 4:Thank you.
Speaker 2:For the Falcon nine. Thank you for the Merlin engine.
Speaker 4:Thank you for the brain chip.
Speaker 2:For the brain chip. For the neural link. Thank you for for Twitter. Thank you for building that tunnel in Las Vegas. Thank you for PayPal.
Speaker 2:Thank you
Speaker 4:for Twitter.
Speaker 3:Thank you for Ani and Valentine.
Speaker 2:Tim Cook definitely said thank you for Ani and Valentine. And Elon said, cool. You can have the Robotaxi app on iOS. Anyway, how did you sleep last night?
Speaker 4:Oh, you know I slept.
Speaker 2:You slept like a log?
Speaker 4:I wish. Seventy one, only six hours.
Speaker 2:Eighty five, play the song. Let's go. Eighty five. Thank you, Charlie.
Speaker 4:I travel days. Travel
Speaker 2:days are rough. Yeah. Rough.
Speaker 4:Is Go
Speaker 2:to 8sleep.com. Get a pod five. Five year warranty. Thirty day at risk free trial, free returns, free shipping. And you
Speaker 4:can use code TBPN. So This was cool. Yep. So this I mean, this was just a cool move in the history of capitalism. Yes.
Speaker 4:Altecap says, didn't notice this until today. Okay. Another shareholder died. This is a Japanese company and donated their shares to the company Woah. Which was six that 6% of the outstanding shares.
Speaker 4:Their will also donated their real estate to the company.
Speaker 2:Yes. Yes. Yes.
Speaker 4:And and said, oh, you think buybacks are cool? How about major shareholders dying and donating their shares to the company plus some real estate for free?
Speaker 2:Tyler, we do expect you to put the iPhone that we gave you in your well to TBPI.
Speaker 6:Will be
Speaker 2:passed down to another intern in
Speaker 4:But there's a put yesterday I Well, yeah. What is what's this? Carrot?
Speaker 2:Yeah. What oh, the carrot and Oh. The
Speaker 4:Yeah. And the stick.
Speaker 2:Carrot and the stick.
Speaker 4:No. They shouldn't be on the same they can't be attached to each other.
Speaker 2:You put the carrot
Speaker 4:You give somebody the carrot
Speaker 2:Have you ever ridden a horse? You you put the carrot on the end of the stick and then you hold the carrot in front of the horse's nose and then the
Speaker 4:Oh. I'm I'm more I I thought we were talking
Speaker 2:about the phrase like No. You're correct.
Speaker 4:Bring the carrot of the stick in a negotiation. I'm imagining it. I'm assuming. Yeah. Yeah.
Speaker 2:But, yes.
Speaker 4:Okay. We got it.
Speaker 2:Yeah. So so the next time we see Donald Trump doing a a four d chess negotiation, we're we're doing away with the chess analogy and we're moving to the carrot and the stick analogy. We now have a physical prop for both the carrot and the stick.
Speaker 3:Okay. But I was gonna say Yes. Yesterday, I think we sent a post about there was some billionaire who was leaving his will to Neymar.
Speaker 2:Oh, yeah. That's Like a billionaire in was for Neymar. Yes. Yeah. I love that.
Speaker 3:So interesting contrast.
Speaker 2:Yeah. Wait. Who is Neymar?
Speaker 3:Some something with like a ball.
Speaker 2:He's an athlete? Yeah. He plays soccer? Is this is this just some crazy way to get around salary caps? A businessman is leaving $1,000,000,000 to Neymar in his will.
Speaker 2:The administrator justified that he identifies with the athlete and decided to give his inheritance to the player.
Speaker 3:That is crazy. Steve Ballmer really wanted to get the to get around the salary cap, he would, you know, commit ritual suicide and leave in his will his his his money.
Speaker 4:He's a good man. That is the final boss of of a salary cap evasion. It's just it's
Speaker 2:just to get an extra. You care so much about your team. Well, in some other news that we will have to track the will of, very sad news, Giorgio Armani has passed away. He was 91 years old. Absolutely.
Speaker 2:He was the creator of the power suit. He held the reins as conglomerates rose. Giorgio Armani, the designer and business mogul who brought subtle Italian luxury to the world stage and conquered Hollywood, died at 91. He worked until his final days dedicating himself to the company, the collections, and many ongoing and future projects, said an announcement by the namesake brand. The company later confirmed he died in his home in Milan.
Speaker 2:During his years at the helm, he remained steadfastly independent in a fashion landscape dominated increasingly by conglomerates. Although he disliked the moniker, Armani was often called the king of fashion. In an interview with The Wall Street Journal in 2024, just one year ago, he insisted that the secret to success was his humble, consistent work ethic. This guy has Founders Podcast episode written all over him. He owned a superyacht and homes in New York, Milan, Pantellera, Antigua, Paris, San Maritz, Saint Tropez, Forte De Marmi, and Brioni, but he showed up at the office every morning and ruled his empire with a firm hand.
Speaker 2:He has TVPN, mansion section, deep dive written all over him as well. Armani, who who called himself a designer businessman, was the sole shareholder of his company at the time of his death. Wait. I
Speaker 4:had no idea. Still.
Speaker 2:In 2023, its worldwide revenue was 2,600,000,000.0 across men's and women's lines, the Emporio Armani diffusion line and Armani Prive haute couture, interiors, dozens of restaurants, 2,500 retail stores, fragrances and a cult classic beauty line, whether it took the form of relaxed suiting, makeup or interior design, his work whispered refinement. His stylistic innovations included an emphasis on neutral in between colors, soft shoulders, and a more relaxed approach to in between colors as I read this in a yellow suit. Not exactly an in between color. You know it's not from Armani. He often drew inspiration
Speaker 4:from He still would have appreciated the ramp the ramp suit.
Speaker 2:I think he would have I think he would have
Speaker 4:As a designer businessman.
Speaker 2:Yes. He often drew inspiration from Asian culture in his work Akira Kurosawa's 1980 a eight let's say about a eight, film called Kagemusha inspired his fall nineteen eighty one samurai collection. I love that he has this balance of softness and power, said Armani's fellow designer Michael Kors at the last New York runway show in 2024. Armani became a household name where he's where he designed Richard Gere's suits in the nineteen eighties '80 movie, American Gigolo. From the nineteen eighties until recent years, he was the go to designer for red carpet looks, dressing Oscar winners from Jodie Foster to Kate Blanchett.
Speaker 2:In 2024, Armani stressed the extremely important role of independence played in his impact. It's not a question of pride, he said. It's about getting things done. When I have an idea, I want to see it through to the end. He set up a trust in 2016 that laid out his plans for his company, including a charitable foundation and details for how a public stock listing or an acquisition would be handled.
Speaker 2:He worked with a close circle of collaborators, including his sister Rosanna, who is on the board his niece Silvana, who is the head of women's design his his niece Roberta, the the head of VIP and entertainment relations, and his nephew, Andrea Cammarana, the sustainability managing director. His right hand man and close friend was the head of menswear. Born in Northern Italy, the town of Piacenza in on 07/11/1934, that's what, two hundred years before Tyler was born. Armani was the middle child of three siblings between older brother Sergio and younger sister Rosanna. Armani described his childhood marked by a fascist regime in World War two as hard scrabble.
Speaker 2:At nine years old, he was standing outside a movie theater looking at a poster for Snow White when a friend came across an unexploded shell of gunpowder. It caught fire and the young Armani burst into flames. He said he shut his eyes only to open them twenty days later in the hospital. This is crazy. Well, there I know we have our next guest, I I can't stop reading One second.
Speaker 2:We're sorry. We have the CEO of Scale AI coming on in just a minute. His only lasting scar was on his foot where his shoe melted into his flesh. The incident contributed to Armani's desire to become a doctor. He attended medical school in Milan for three years before dropping out to fulfill his compulsory military service.
Speaker 2:After the army, Armani's latent creativity was stirred. He began working as an assistant architect designing interiors and displays for a department store in Milan. He moved into menswear working for working at a working for a time at Hitman, a company owned by Nino Suruti, a freelancing and freelancing for other brands. By the mid nineteen sixties, Armani met his longtime life and business partner, Sergio Galletti, a Tuscan architectural draftsman, ten years his junior. Galletti persuaded Armani to start his own business in 1975.
Speaker 2:He woke me up from a sort of torpor, from the little life in which I was living, Armani told the journal in 2012. John, it's amazing. I hate
Speaker 4:to cut you off. Yes. Let's not keep our guests waiting.
Speaker 2:Let's not keep our guests waiting.
Speaker 4:So that is a fantastic story.
Speaker 2:Welcome to the stream. Bring in Jason. Sorry.
Speaker 4:John was getting carried away there.
Speaker 2:Have you heard the story of Giorgio Armani? He just died, and, what a fantastic obituary in the journal today.
Speaker 6:No. I was hoping you'd keep going. That was that was great.
Speaker 2:Sorry to keep you waiting.
Speaker 4:Sorry to be a Jason. Thanks for coming on.
Speaker 2:Yeah. Thank so much for having me on.
Speaker 6:Yeah. Nice to meet you guys.
Speaker 2:Why don't you kick us off with an introduction and kind of your path to how you wind up wound up in this particular situation?
Speaker 6:Yeah, totally. So I've been in tech for a long time. I've been at scale for a year. My background has been in starting companies, you know, early early in my career onto, you know, more notably at Uber. I started the Uber Eats business there.
Speaker 6:Oh, cool. And that grew, you know, much larger than we ever thought it would.
Speaker 4:How big is the how big is that business today? You don't mind me asking.
Speaker 6:When I left, it was about $20,000,000,000 a year of GMB. Sorry. And then I
Speaker 4:I think they've
Speaker 6:think they've grown it to maybe $7,000,000,007,080,000,000,000. It just keeps going. Yeah. Dara just announced yesterday that in Australia alone, they've served a billion deliveries, which is about 2,000,000,000 meals. So, you know
Speaker 2:That's a lot of shrimp on the Barbie.
Speaker 6:You know, when you get involved in these things, you're always surprised at how big things can get, and I think that's gonna end up being true here with this current wave.
Speaker 4:Yeah.
Speaker 6:And, that was one of the reasons why I was excited to, you know, join Scale a year ago, joining Alex at the time. Yeah. And, you know, had experience in marketplaces, done a lot of growth stage businesses, things where where demand was outstripping supply, and you needed fix a lot of things to get the business on track. And, you know, it's been a it's been an exciting, super fascinating journey over the past year. I mean, nothing like I ever expected.
Speaker 2:Yeah. What was the, the the the shape of the business when you came in? Like, from my perspective, scale has been a very interesting business in that it hasn't many companies have a second act. I feel like scale's had a second and third, maybe even a fourth act. The way I tell the story is Alex Wang is starting with creating data for self driving cars.
Speaker 2:Eventually, that business maybe gets rolled into Waymo and Tesla directly, and so scale expands into the RLHF boom during the LLM boom and has kind of grown. Then my question was, are we going to see Scalaei take on robotics data or more specific tasks? And so describe the shape of the business when you joined and where you were thinking about taking it.
Speaker 6:Yeah, no, for sure. I mean, the history is amazing and fascinating. I think Alex had this insight that data was the most important thing to models. Yeah. And that was nine years ago, so that's very visionary, And I was very impressed whenever I was talking to him about a role at the company only a year ago.
Speaker 6:And you're right, we've gone from different types of data. And one interesting thing about this entire journey is that every single type of data someone has said like, oh, when is this going to go away? When is this going to go away? When is this going to go away? And this is a common thing that we hear and we've heard it so many times that you know, we sort of are used to addressing it, and there's always some other source of data.
Speaker 6:And one of the reasons why is because data is the application in many ways. Mhmm. You know, you're you're going from a software space where it's software organizes data for use by humans. Now you've got data driving applications of things. Mhmm.
Speaker 6:And so as we generate more and more data, the models are serving customers. Those customers have higher and higher demands of of what the model should do, which then drives, demand for more data. And the data changes, but, you know, we've gone through this so many times from expert data to, you know, now, you know, you know, models are working on like how do they do things for you, right? It was about knowledge capture and then now it's about skill capture.
Speaker 10:Yep.
Speaker 6:So, it's been, yeah, it's been an awesome journey, and the company has extremely agile and extremely commercial over the entire journey, which is, you know, which leads us to this discussion.
Speaker 2:Yeah. It hasn't just been just like the the the like, if you zoom out, it's like one smooth sort of exponential, but in fact, there's different pools of data that have been maybe a series of stacked S curves, but that's the story of all technology and all progress. So I'm interested to know what, like, when Alex did Invest Like The Best, he had a very interesting point about robotics data being particularly rare. At least we had the internet to crawl and scrape, and that was something that didn't It eventually needed to be polished with RLHF, but with robotics data, there's just so little out there. And I was wondering if that was something that you were interested in looking at or if it was immediately the skill capture thing of these really, really niche experts, people who know about archaeology, and it's just not on the internet, you need to go get some PhD, get them on the platform, and start having them answer questions so that that can get baked into the models.
Speaker 2:And we can get out of the what is it? Like Gell Mann, Amnesia, Dunning Kruger for these models where it sounds great until you're asking about the thing that you're the expert in. And then you're like, oh, actually, it's only at a college level. It's not actually at the full expert level.
Speaker 6:Right, right, right, right. Yes, so yes, we do robotics data today. We've been doing, that's one of the newest parts of our business. That's the way beyond expert data. So we've been doing expert data for a year and a half plus, depending on where you draw the line on experts, but everyone in the data business is in the expert business because that's what the models need, that's what they demand.
Speaker 6:Know, something like 15% of the people in our network are PhDs, 25% have master's degrees, and like a very large percentage, think 60% or so have at least a bachelor's degree. And so, you know, that is where the knowledge capture has gone. Robotics, yeah, it is interesting, right, because you can't necessarily pre train on this like corpus of information from the past twenty five years of the internet. And so that probably just increases the size of the opportunity going forward. But the space is new.
Speaker 6:Right? I mean, like like, you know, there aren't robots working, you know, walking around the world yet. So a lot of this is still in development. One other thing worth mentioning is like all the data types from before we still do. We still supply data to autonomous vehicles companies, we're still providing computer vision data to the US government and other parties, And so these things do stack up, as you mentioned, into what is now a pretty big business.
Speaker 2:Is there still some piece of the business that's not directly AI related? Like almost like Mechanical Turk esque. Like, I just need an actual human to do something at the at an API endpoint for, you know, a very reliable, very scalable. And so I come to you and I and instead of going to an LLM, just have people doing it on demand. Is that a thing?
Speaker 6:That's not a thing for us. I do think that that's a thing in the industry. Sure. Like some of that work has gone into BPOs and, know, sort of like lower margin, less difficult type tasks. And so we're at the frontier, and part of being at the frontier means you do the hard stuff.
Speaker 6:The margins are better, the skill level required is higher, and it pushes you to constantly be driving the business forward. And and that adaptability, frankly, that that started with Alex terms of, like, always looking for the next thing and being really close to the tech is kinda what's allowed us to get here.
Speaker 4:On the customer side, how are companies buying this data? It feel for the it seems like there's overwhelming demand and
Speaker 2:Well, you go to them and you say, like, 10 data, please.
Speaker 4:10 data. A 100 data. No. No. I I mean I mean more so like what what are the actual customer relationships look like?
Speaker 4:Sure. It seems like a lot of the labs and big players are actually working with multiple providers.
Speaker 11:Mhmm.
Speaker 4:And that's not necessarily a bad thing because different providers can specialize in different things.
Speaker 6:Yeah. I mean, you know, we have, you know, that is true. That's like, that's sort of a general understanding of the market. The reality though is on the ground, if you want high quality frontier data that's difficult to get at volume, the number of providers goes down dramatically. And so there's a lot of claims being made out there about doing things at scale.
Speaker 6:We're one of the largest providers today. We've been one of the largest providers. And so I think that that's through all of the change, that's what's allowed us to keep the relationships that we had, which is it's actually pretty hard to get this data. Right? Like like like, you really have to have the right network.
Speaker 6:You have to know how to talk to the network because if you imagine, like, being in the contribute we call them contributors
Speaker 2:Mhmm.
Speaker 6:Meaning the people who provide the data to the models through us. If you imagine being in their mindset, you have to have a system that can interface with them on what is a part time job for them to give high quality data for a very technical audience, which is the researcher, you know, so that it changes the weights of the models in a positive way, and that's not a super straightforward thing to do. And so, I mean, and and the business is going great. I mean, like, I've seen a lot of press out there. There's, you know, there's been a lot of coverage, a lot of speculation.
Speaker 6:You know, every month since the deal happened, we've had growth, which I think a lot of people will be surprised to hear. Yeah. Know, given I mean, like, I read the news, and then we look at what's going on inside the company, and we're just like, okay. We gotta start talking a little bit more. Yeah.
Speaker 6:Obviously, I've been in the seat only a few months, and so there's been a lot going on, but, yeah, like, things are going well. We have two I mean, one thing worth noting, like, is that we have two multi $100,000,000 businesses. We have our data business, which
Speaker 2:we're most known for. Yeah.
Speaker 6:So so if you were
Speaker 8:to split either of these out, and we
Speaker 6:have an application and services business
Speaker 2:Yeah.
Speaker 6:Which which which applies this in in customers, that business alone has hundreds of millions of dollars of revenue, and so if you were to break that out, it'd be its own unicorn or deck of corn or whatever they're called these days. Yeah. So. That's wild. Great.
Speaker 4:Do you ever, you get an inbound, maybe a customer fills out a form on your website, do you ever have to check to make sure it's not like a runaway super intelligence that's like, you know, off on its own, just like hoovering up data?
Speaker 6:Well, I mean, great question. We tend to know our customers pretty deeply
Speaker 4:on Yeah, yeah, gotta have And the
Speaker 1:KYC process in
Speaker 6:frankly, they spend, you know, these are data is not cheap to procure. Yeah. And so that would be a very expensive hoovering operation if
Speaker 4:Well, if AI if AI, you know, progresses like the AI 2027 crowd was projecting, at some point or another, a super intelligence will come and you'll have to choose humanity or the super intelligence.
Speaker 2:Have you run into any super small companies that are customers? We've talked to some small LLM providers. Like they're not building the mega GPT-four, GPT-five level models. They say, we're still doing transformer based AI, but it runs on a gaming graphics card. And I feel like usually they're just distilling LAMA or something into a smaller model.
Speaker 2:But are there any customers that have come to you and just had some weird niche use case that's like pretty light on the data but so differentiated that it actually provides value for them in their particular niche? Or is it all just like the huge labs, the big the people taking really big swings?
Speaker 6:Yeah, I think the big swings is most of it. We do see some of the smaller stuff. Where, you know, where we actually are starting to see some data needs, which is sort of, you know, it goes to just following the market. It's actually inside of enterprises.
Speaker 2:Yeah.
Speaker 6:So they're not actually building their own foundation model, but they're hitting the limits of their own sort of the data that they have to make applications useful in their environment. And obviously, the US government, we do a lot of computer vision data for the Department of Defense too. So those are the more sort of smaller customers and maybe less publicized things that scale does.
Speaker 2:Are there other analogies to the DoD where there are companies that have private, secure data needs and maybe scale process is working on top of their own proprietary data and they need to transform it somehow and you get involved. Is that a thing at all?
Speaker 6:Yeah. So that's the applications and services side
Speaker 4:Sure, of our sure.
Speaker 2:That makes sense.
Speaker 6:Right? And so the history there is, as we were supplying data to the model builders, obviously scale is very well known, Alex is very well connected to the company, there's a lot of people. People started contacting us saying like, hey. We kinda thought this AGI thing was just gonna, like, pop out of the box and do everything for us. And the reality is is, like, that's not what's happening at all.
Speaker 6:And so as we got pulled into that world and being asked, well, how do I apply this to an accounting problem? How do I apply this to a health care problem? We started to see the actual fundamental problems inside of these organizations and why they can't get there. And what's interesting is I like, I've actually been on-site with some customers in the past in the past month, you know, as we're getting to production with this latest round. And some of the limits they're hitting is the actual human knowledge from the executive staff or in like a health care setting, maybe the most senior doctor or in an accounting setting the most senior accountant, and they, you know, they sort of went into this this thinking like, okay, we might need some data from the subject matter experts here, but maybe a junior accountant or maybe a junior lawyer will just go in and label some data where we don't have recorded data but we you know, need the models to do something that they currently aren't doing.
Speaker 6:And what's happening is is that the senior staff is finding that they need to get involved because as you build these agent systems, which agents are basically obviously just applications running, you know, that leverage AI that coordinate with each other. In order to align them, you know, which goes to your AI twenty twenty seven comment, which is like, are they gonna be aligned to, like, human values, and then will they do the things that we want them to do the way that we want them to do? You actually need the question becomes who do you align it to in an organization? Like, do you align it to, you know, someone who's straight out of college? Maybe.
Speaker 6:Do you align it to the most senior person in the organization? Maybe. They need a partner to help them figure out, like,
Speaker 4:which Yeah. Do you align it do you align it to compliance? You have the the Yeah. Yeah. Exactly.
Speaker 4:You know, somebody more on the operating side.
Speaker 6:Yeah. Yeah. Yeah. What are you guys seeing on the, like, smaller, model builder side of things? Are you seeing, like, the, you know, the things you're asking me about in terms of, like, like, their needs and specialization?
Speaker 2:Yeah. I mean, I I I think there's, like, this there's this big question right now about inference costs costs and do you need to throw a reasoning model at everything. Token costs are coming down, but people just keep moving on to the they're like, oh, the better model is the same price as the last model, so I'm not even capturing that 10% or the 10x gain or whatever is happening in the cost of inference. The most recent data point that we actually got that was hard was from Notion in The Wall Street Journal. Ivan, the founder, said that their gross margins dropped from 90% to 80%, not that bad.
Speaker 2:And I think that that's a trade that they should take all day long. But you could imagine that
Speaker 4:Yeah, mean, I think
Speaker 2:Oh, yeah, you could imagine that so basically, Notion's probably paying for the best in class intelligence, and having a material cost on their gross margins. But if they figure out that, Okay, what users are really excited to pay for is a report that summarizes everything that's happening in Notion across all your documents, or they really love templating with AI, or they really love having just a chat interface on the right that is somewhat aware of the documents, and they can just kind of ask, Hey, I remember putting all of my medical records in one Notion thing, or I remember putting all my financial and my CRM over here, like, Can you find that for me? Over time, I would bet that they're able to distill that into smaller and smaller models, bring down the per token cost or dollar per million token cost to a place where the margins go back up. But it's kind of a broad question in the market as more and more companies lean into AI and want to deliver the most frontier model possible to their customers. No one wants to say like, oh, yeah, we added AI to our product.
Speaker 2:It's GPT 3.5. People will be like, why? What am I paying for?
Speaker 4:What can you share about more general business strategy at scale going forward? Your 49% of the company is owned by Meta, but you guys still have a bunch of customers, tons of revenue. You talked about $2.09 figure businesses. You got a bunch of people on your team. Like, how are you kind of, like, rallying the team, and and what are what are are reasons that people should join scale today and and be a part of the the opportunity you guys are going after?
Speaker 6:Yeah. Yeah. Yeah. Of course. Yeah.
Speaker 6:It's worth taking a step back and talking about that deal for a second, which is, you know, Meta put in over $14,000,000,000 for 49% of the company. As part of that, Alex and if and some others went to Meta. Scale still has over 1,100 employees, and we're and and a billion dollars on the balance sheet. And so we have a lot of
Speaker 4:employees, to be clear, just are not none of those are contributors. Those are, like None of people that work on other one.
Speaker 6:Yeah. Yeah. Contributor network is hundreds of thousands of people. Mhmm. Yep.
Speaker 6:And so those are people that are working at scale. When I joined the company, actually, I joined the application side of the business. I didn't join the data side of the business when I joined as a chief strategy officer, and I sort of saw the opportunity there. And so we're investing heavily there and customers are reserving budget heavily there. And, you know, as an example, we just, got a $100,000,000 contract with the army, to provide services and data and people to them.
Speaker 6:And so you've got the data business, which is supplying data to the models, and then you've got the applications and services business, which is making those thing make making those models do things inside of large complex organizations, Fortune five hundreds, US government, international governments. And that this opportunity is going to be huge for scale, and very few people actually know about it. This is a multi $100,000,000 business, as I said today. We've got contracts with, you know, Qatar is a huge customer. The US government is a huge customer.
Speaker 6:We've got dozens of Fortune 500 companies that we work with. And so, I think the opportunity for scale right now is just to, like, capture this wave going forward because we're at the very, very beginning of actually making AI work inside these big organizations.
Speaker 4:Like Yeah. I was gonna ask you where where Yeah. Big organizations right now, where do you think AI is overhyped and where do you think it's underhyped? We asked this to Carp yesterday.
Speaker 6:Yeah. I mean, I think I think it's very overhyped that it's going to eliminate jobs in the next, like, one to two years. Like, I think this line of thinking would require a change in the curve of capabilities and the change management inside of these organizations where I think it's, like, way overblown. Like, the promise is just so high, and the reality of what's going on on the ground is this there's value, but the value needs to be extracted, and that requires a ton of work. Yeah.
Speaker 6:And so I think what's gonna happen with these customers in the next year, I had to make a prediction, is you're gonna go from, like, having a certain amount of money, which is usually a lot in these companies, allocated for, like, AI initiatives to what is the ROI? Mhmm. Like, you know, the Grim Reaper is going to come for every AI company that is not delivering value to these customers. Because because what's happened is is they've all been sucked into this idea that, like, oh, if we don't invest in this, we're gonna miss out. But because AGI is coming.
Speaker 6:Mhmm. And the reality is is that if that doesn't pay off, that expectation is very high. And if you're not finding a way to, like, give ground truth to these customers, they're gonna be very disappointed.
Speaker 4:So do you think we're approaching the trough of disillusionment in some of these big enterprises?
Speaker 6:I mean, it like I I think the gap yeah. I mean, my short answer is yeah. Yep. I think that the the the I've seen this in many tech cycles before. The promises are way out of our other seas.
Speaker 6:There's still a ton of value. Like, it's not that it's like vapor. Like, we are delivering value, but the effort it takes and the amount of data you need to, like, organize in a company and get from human beings inside the company to make sophisticated applications work is way harder than people are are selling today, except for us.
Speaker 2:Yeah. Makes sense. Has the contributor has like the geopolitical or geo geographic footprint of the contributor network changed as you've moved towards more expert focused criteria, like the PhDs? Is it still spread all over the world? Are people onboarding in Europe and America?
Speaker 2:What does the what does the geo the geographic footprint look like right now?
Speaker 6:Yeah. I mean, the footprint, as you would expect, know, centers around areas where PhD and Masters and advanced degree, you know, people are. Yeah. And so you have a very high US footprint. Sure.
Speaker 6:You know, parts of Europe, India and Latin America. There's actually mean, one interesting fact is, like, there's a lot of contributors who are contributing at a high level who've actually grown themselves. Like, you would think it would be like if you don't have a PhD, you can't do this type of work.
Speaker 2:Yeah.
Speaker 6:And, you know, maybe PhD is too far of a stretch here, but like, Yeah, which is kind of amazing if you think about labor markets. Like, you would just assume like, oh, the technology would move on, but the people are adapting.
Speaker 2:Yeah. Jordy, anything else?
Speaker 4:Yeah, this was super, super insightful.
Speaker 2:Yeah, this is great. Thank you so much for hopping on.
Speaker 4:Always welcome to join. You just give us few minutes warning, and we'll send you the link, and you drop on. Thanks, glad yeah. You guys are out telling your story, and congrats on all the progress.
Speaker 6:Yeah. This was fun. Thank you for the opportunity.
Speaker 2:Yeah. Of course. We'll talk to you soon. Cheers, Jason.
Speaker 6:Cheers. Take care. Bye.
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Speaker 4:Do we have our next guest?
Speaker 2:We do. I think I believe our next guest is in the restream waiting room right now. We'll bring him into the TVP and UltraDump. Good to meet you. How are you doing?
Speaker 4:What's happening?
Speaker 7:Guys, how are doing? Thanks so I much for having me feel like I need to say thanks nine times. When you
Speaker 2:say thanks I nine mean, we love being thanked, maybe, but save some
Speaker 4:of Thank you for coming on. Thank you Thank for being being you here.
Speaker 2:Thank you
Speaker 4:for Thank being you for raising capital. Thank you for building. Yes.
Speaker 7:What a fabulous time to be alive.
Speaker 2:Yeah. It's really is. Indeed. Let's kick it off with an introduction on yourself and the company.
Speaker 7:Yeah. Well, I appreciate it. Let me tell you a little bit about Rivet. We founded the company about a year and a half ago, and we the the team has just been cooking furiously. The the the fundamental philosophy that we have is there's about a half a billion people in the Western world that have been completely and totally underserved by a big tech.
Speaker 7:Mhmm. This is people that do hard jobs in hard places. So you think people on flight lines, people in factories, people in bucket trucks, and people on the battlefield. We feel that the most transformative application of AI and augmented reality is with these people. So we set out to build a portfolio of products to do to do just that for that group of people.
Speaker 7:That's that's fundamentally probably the most important, group of people operating, building, and defending our way of life.
Speaker 2:Yeah. Walk me through, like, one case study of someone actually using using your product, to get more productivity.
Speaker 7:Yeah. As you can imagine, I mean, you even had doctor Karp on yesterday talking about everybody from plumbers to people sitting and doing financial analysis, etcetera. When you think about somebody let's let's pretend, they're in an aerospace manufacturing facility. You've got a substantial amount of telemetry coming off of machines, tooling, the actual aircraft itself, and you've got a glut or there is a deficit of people that are actually able to do that job efficiently. The application of reasoned intelligence delivering to folks, on the flight line that are, you know, operating with tools in a heads up, hands free fashion.
Speaker 7:John. Wow. Is is is gonna be the most the
Speaker 4:most attractive for his money there with the Ray Bans. Those are those are those are these
Speaker 7:are certainly better than Ray Bans.
Speaker 4:Woah. Shots fired. Anyways,
Speaker 2:talk about the progress of the of the business. There's a new army contract. Where are you in that process? What does it mean? And how does it come together?
Speaker 7:Yeah. Th this this program, specifically with the Army, is probably the most important thing that I will do in my career. To tell you the truth, I can I can cut to the punch line? I'm holding in my hand a contract No way. Executed with the Army for $195,000,000 It's a win to deliver the next generation of soldier born mission command.
Speaker 7:So that's where we are in the business. The team we started from a clean sheet of paper back in January Yep. With a determined focus to build the most comfortable, most rugged, most utilitarian, fighting goggle for the army Yep. That's ever been seen, and that's what we've done. So we were we were selected, over the past few months in a in a very rigorous source selection process.
Speaker 2:Talk to me about lessons from the soldiers' computer, from IVAS, from HoloLens. Yeah. There was a, what, twenty year, thirty year process, and, there were lots of concerns about weight, lots of money spent. How do you tell the story?
Speaker 7:Yeah. You've touched on you've touched on a lot of the areas that are of vital importance to us. In fact, when we started the company, we thought about that whole set of a half billion people in the world that are underserved by modern technology, and we boiled it down to four big things. What do they need? They need a system that is comfortable enough to wear for the duration of a mission.
Speaker 7:For a guy in a bucket truck or a flight line, that might be eight or ten hours. For a, you know, a paratrooper doing an airfield seizure, that's seventy two hours, so comfort is number one. Yeah. You need ruggedization because all of these people doing the hard jobs are doing the job in the most austere of environments. So you need a fully rugged device that is shockproof, dustproof, you know, protects against water ingress, can handle the percussive elements of using tools, jackhammers or guns, etcetera.
Speaker 7:That's number third. Finally, you need, you you need a compliant device, and compliance is is is a very broad category of statutory and regulatory things that these kind of products come under. Mhmm. And that is specifically over the supply chain. Specifically, you can't have bad guy parts in a device that's gonna be deployed in a secure environment.
Speaker 2:Yep.
Speaker 7:There is governance over what constitutes eye protection, you're on the factory floor and you need true eye protection, that's ANSI compliance for for for not getting your eyes hurt in those kinds of environments, or whether you're a soldier on the battlefield needing ballistics and laser protection. And then finally, utility. Utility comes from the ability of the actual face computer and the end user productivity system to be able to connect to other data, get recent intelligence at the point of need. Where that utility comes back full circle to the enterprise is now you have, let's say, the enterprise's ontology has a set of eyes and a set of ears that understand the enterprise the way that the human would. And that's the do loop that we're creating with these dynamic task systems for these frontline workers.
Speaker 2:Is the why now basically just we're in a phase of, I don't know, technological commoditization where miniaturization of batteries and and chips is at a point where it's just we're getting to a place where you can functionally deliver everything that you said. Like, do you think it would have been possible to build this ten years ago, twenty years ago?
Speaker 7:I I bet that that John, it was a perfect prompt. Like, I was gonna answer your question exactly that. In fact, this device could not have been built five years ago. So you have a confluence of a bunch of things happening. If you think about just the supply chain and the underlying components that go into products like this and you think about the amount of capital that's been poured into them by all of the big tech companies that you know, you know what Zuck has actually spent?
Speaker 7:He reports a quarter over quarter on his on on his on on the mixed reality lines in the report. That's something like $6,065,000,000,000 dollars, I think, the last I checked.
Speaker 2:Yep.
Speaker 7:Certainly know what the other big tech companies. Net net, you put the signal on the bottom of that column, you get something like a quarter of a trillion dollars has been invested in the underlying things that emit light, combine light, bend light, the processing capability that can go in a small form factor remaining thermodynamically compliant so it doesn't burn your face, etcetera. So all of that supply chain has come together, and it's a very hungry supply chain because for ten or fifteen years, they've been promised that everybody in the world is gonna be wearing these things. Mhmm. And that's where the market has actually gone wrong.
Speaker 7:Augmented reality, mixed reality, and virtual reality has largely been a technology looking for a problem rather than a solution to a big industry's articulated need, and that's what we've built and what we're focused on.
Speaker 2:Yeah. How how important is SLAM, like some simultaneous location and mapping, I think is the acronym, but the actual idea of overlaying images into the real world versus just a HUD that is static? Like when I'm in Call of Duty and I do a three sixty no scope, the map the mini map stays in the same part of the screen the entire time. Yeah. Yeah.
Speaker 2:When you're in, you know, the Apple Vision Pro and you put a screen down, you turn your head, the screen stays in the environment. There's benefits to What's your take?
Speaker 7:I I think that there there is a ratio or proportion of what is world locked and what is head locked and what is body locked in every application scenario. Mhmm. And you have to have the right thing to make the best user experience, and that user experience has to, know, contemplate the cognitive load of the end user, the environment, etcetera. No doubt, SLAM and the ability to create a, you know, a holographic can and put it on the table and stay locked so as my perspective on the can changes Yep. It's rendered appropriately.
Speaker 7:And then being able to do that fast enough so there's not some oculovestibular discomfort that causes you to wanna
Speaker 2:Yep.
Speaker 7:Puke is is critical. So when we think about advanced manufacturing scenarios, specifically the installation of a part on an aircraft, you wanna be able to line that up very accurately. And when the and the quality control guy comes past, he's gotta check and validate that it's in the right place and install it correctly. So in that sense, it's very it's it's very important. In other use cases, you rec you know, you referenced, the Call of Duty, kind of thing.
Speaker 7:Some course or three DOF based just like, hey, I want a crude kind of location. Like, I'm looking this way. There's some nouns that are bad or good on this side of me. Yep. You can reduce the amount of six DOF or, you know, high high fidelity SLAM that you have to do.
Speaker 7:Long winded answer to your question, it's critically important to have a a that capability in the system and available to application developers that are developing with it to build a good experience for the end user.
Speaker 2:Do yeah. On that flexibility point, but do you want to create two different hardware stacks? Because I imagine a three off headset could be lighter, could have longer battery life. Like, you're just doing less things, and so maybe you can have some savings that you pass along to everything else? Or or is this just not an issue anymore?
Speaker 7:The the the issue is becoming further and further less severe or less acute as cameras and processors and the actual algorithms themselves become more efficient.
Speaker 9:Yeah.
Speaker 7:Certainly, the the market that is most important to us and and where we're focused, we don't need a $300 consumer device. Yeah. What what folks need on the battlefield on the aerospace flight line is a high precision, high performance device that delivers both a quick and dirty kind of crude direction of where you need to go to get to safety or or to do something important, and then also the super high precision, tracking that would be required on the aerospace manufacturing.
Speaker 2:How are you thinking about dual use? I I we saw a hot take from a, from a founder on the timeline a couple weeks ago saying that, like, going dual use too early can be a risk. Palantir is a great example, but it's kind of an accidental dual use company, and they spent twenty years wandering the wilderness. And it took a long time to build that. Some people have been saying, go dual use on day one.
Speaker 2:Other people have been saying, you know, wait and maybe it emerges in a decade or two decades. Maybe it's your second act, along, like, long down the road. How do you think about the trade off of of balancing
Speaker 7:those two?
Speaker 9:Well, I think
Speaker 7:I I think it's circumstantial to the individual company and the individual product. For us, we thought about dual use immediately. When I say, hey. There's a half a billion people that are underserved by big tech and underserved by this product, that is half a billion people that are doing this exact job. And whether they're on the flight line or in the bucket truck or on the battlefield, largely the same kind of persona working in that austere environment.
Speaker 7:For us, the the the army contract is is an incredible is an incredible thing for us, primarily because if we get it right for the most size, weight, and power constrained user that is the most hard on their gear and operating in the most critical environment, we get it right for everybody else. Yep. And that's what we've done. So that market were common. In fact, when I started contemplating about the the thesis in our product development and go to market direction, I thought maybe this the the the the commercial market would be serialized behind.
Speaker 7:But what we've seen just six months out of stealth as people are looking at the product, they're hungry for it, and they're ready for it. So this is gonna happen in parallel. You know, I I I've referenced the army contract
Speaker 2:Yeah.
Speaker 7:Where where we've got, signed scopes of works and execution agreements with some of the biggest aerospace manufacturers in the world to do exactly this thing on both the military flight line and the, the commercial flight line.
Speaker 2:It's fantastic. You're out of stealth. Give us the fundraising update. Got into got
Speaker 7:into news for us. Yeah. Yeah. I I I gotta tell you something. It's an incredible situation to have a confluence of these things coming together in the same week.
Speaker 7:We just finished our a round. That brings, total investment into Rivet to $90,000,000 over the past is a market that that that our investors believe in. You know, shout out Doug Phillipone. Oh, point. We've got Got it.
Speaker 7:Going. 72.
Speaker 4:Steve Collins. Let's go.
Speaker 7:She led our seed round. And then Duquesne Capital. Shout out to them.
Speaker 2:Very cool. That's fantastic.
Speaker 4:The capital is just four goat emojis.
Speaker 2:That's great.
Speaker 7:You can't we just can't
Speaker 4:help I it I think
Speaker 7:Customers and supporters.
Speaker 4:Yeah. I I love like this where you just take a team with like deep deep deep domain expertise and a bunch of advantages right from the start. But then when you have that, you have to execute at an insanely high level. And clearly, you guys are. It's awesome to see a master class.
Speaker 2:Well, thank you so much for taking the time to talk to us.
Speaker 7:Enjoy the much for having us on. A lot of fun. I love the show, man. Guys are innovating.
Speaker 2:Keep doing I appreciate it.
Speaker 4:Thank you. Yeah. That's we're we're we're doing this is an austere environment. It is. You and
Speaker 2:There's bugs around. There's dust.
Speaker 7:You guys you guys need some rivet.
Speaker 4:Like I know.
Speaker 2:Honestly, I'm reading I'm reading a chat over here. I'm reading text messages about who's the next guest and stuff. It makes sense.
Speaker 7:You guys we gotta get you out of the studio and out Yeah.
Speaker 4:Out of
Speaker 7:the woods, do some, like, frontline stuff. You wanna come shoot some guns and and do some cool stuff.
Speaker 2:We'd love to have you. Yeah. Thank you so much.
Speaker 4:Congrats. Thanks so much. I appreciate it. Talk to
Speaker 2:you soon, Dave.
Speaker 4:Cheers, Dave.
Speaker 2:Have a great Bye. Bye. Up next, we have Mert Mumtaz from Helios. Dev.
Speaker 4:He's calling in.
Speaker 2:About Bezel first. Get bezel.com. Your Bezel Concierge is available now to source you any watch on the planet. Seriously, any watch. We are excited to talk to Mert.
Speaker 2:He's taking a couple minutes out of his busy day to break down the latest l one for us. So we will bring in Mert from the restream waiting room whenever he is ready if he is available. Know it's last Mert,
Speaker 4:how are
Speaker 2:Thanks you so much for taking the time. I know it's always crazy with the time change.
Speaker 4:Okay. So I want to pitch you something. Okay. Blockchain for yapping so that we can get specifically we want more yaps per second.
Speaker 2:Yeah. People say YPN coin, but why not an L1?
Speaker 4:Yeah. YP. YP. Yeah. I
Speaker 2:I feel like you're not that serious with what you do. I could beat you in my free time. May may maybe I should just go up against you. What do you think about that?
Speaker 8:In in yapping?
Speaker 2:No. No. No. In crypto. In in your main thing.
Speaker 2:It could be my side thing, and I could compete with you. That sounds like a great play.
Speaker 6:Anyway. Of course, absolutely.
Speaker 8:Thanks for having me. Just hanging out in my f tier city today. You guys are in your eye. F tier cities?
Speaker 2:Yes. Thank you. You inspired me. You inspired me.
Speaker 4:That was a we we we love that first post because it was just It's It's the perfect post. It's like, how do you get a bunch of people to agree with you and a bunch of people to disagree with you in the same place?
Speaker 2:Viral school. I think I might do a Yeah. Tier list every
Speaker 4:You created a new meta.
Speaker 2:Yeah. Fantastic. Anyway, take us through what actually launched if you can give us a steel man and then your kind of argument, I'd love to just get up to speed on what Stripe and Paradigm are doing here and then kind of understand some of the trade offs.
Speaker 8:Sure. So I'm guessing people have all read the announcement, but basically it seems there's a new blockchain called Tempo. And they they they are messaging in such a way that it's an independent company with Paradigm, which is a VC firm, mostly in crypto or really exclusively in crypto Yep. And Stripe as the first investors. There's a team of 15 led by Matt, who cofounder of Paradigm.
Speaker 8:Yep. Very, very good investor. And they're basically building what's called a a layer one, an l one blockchain called Tempo, and it's going to be focused on payments and stablecoins. Mhmm. And so there's a few and and we can go quite a few different directions here.
Speaker 8:So there's a few controversies around it. You know, for example, this is the fifth or maybe sixth payments l one or chain that has been announced in the past few months. It has some parallels to something like Libra back in the day from Facebook.
Speaker 4:Yeah. I was gonna ask.
Speaker 8:Yeah. And then the one other thing that got some heat is that it's it's an L1 instead of an L2. So an L2 for people who aren't familiar would be basically a smaller blockchain on top of a bigger blockchain. So generally, an L two is on top of Ethereum, which everybody obviously knows of. Mhmm.
Speaker 8:And Paradigm traditionally has been very Ethereum centric, not exclusively, but very Ethereum centric. And so for them to create an l one instead of an l two on Ethereum turned some heads as well. So there's there's a lot there.
Speaker 2:Okay. So yeah. I mean, the like, I know very little about this, but the obvious one is, like Yeah. You mean problems mean seem solved by Circle and Solana. Like, we've seen a lot of these, like, big but, I mean, just in just in this idea of, like like, there seems to be a serious player from my perspective that's taking stablecoins seriously.
Speaker 2:And there seems to be a player that's taking
Speaker 4:Yeah.
Speaker 2:But that's transaction Yeah. I mean Yes. Seriously.
Speaker 4:I guess, given given that you're building in the Solana ecosystem, I guess, like, some of the pushback that I saw from you on the timeline was was that, complaining that or not complaining, but in the original announcement post, shared an example of during Trump coin launch, you couldn't run payroll or something like that. And we're basically saying we're not going to be able to rely something like a Solana. You were pushing back and basically saying that there's a lot of reasons that you would wanna create a new L1. There are real reasons that you kind of laid out, but transactions per second or sort of scale maybe is not one of them.
Speaker 8:Mhmm. Yeah. So to be clear, I think, like, if I'm just to put on my objective hat, I think it's certainly a good move and I think if I were Stripe, I would probably do the same thing. I don't think I need to pay rent to anybody. I can just create my own chain, especially if I have somebody like Paradigm helping me in a world class team, then I want to own the full stack, right?
Speaker 8:And I think that's totally fair and the distribution and everything that comes with it. Now there are some misconceptions here, which is mostly what my post was about, which is like the second you bring blockchain performance and scalability into it, now you're kind of playing a different ballgame. Right? So for example, this idea of a payments only chain, right, let's just think about this for a second. How can you possibly have something that's a payments only chain?
Speaker 8:Right? A blockchain is, by definition, something that's permissionless. Meaning anybody can just come on and do anything that they want there. So if you just say we're gonna be paid for payments only, that's not going to actually happen unless you enforce that somehow. And generally, the way to enforce that is twofold.
Speaker 8:One is the chain can be not true and complete. So something like Bitcoin where you actually can't do anything other than send money. Mhmm. The other is you can permission the chain, which is actually what's gonna happen here for when they first launch. Now they did say they have plans to make it permissionless in the future, but I think that's going to prove out to be much tougher because the second you make something permissionless, you end up getting all sorts of degenerate behavior or people launching FarCoin and all these different things that could just buying FarCoin on Tempo.
Speaker 8:Stripe
Speaker 2:checkout. One click, one line of code to launch a new meme coin. Yeah. It seems like they they they would want to avoid that. They will be going more
Speaker 4:Functionally, you expect Tempo to have a token, like a liquid token itself in the same way that Solana does? Or but but from from my understanding, like, Base is like a blockchain, but it doesn't have its own native token that's fluctuating in price. Correct? Mhmm.
Speaker 8:Right. Yes. And part of the reason is because Base is an L two. So it's one of those smaller chains that settles on Ethereum. And so you would just use Ethereum.
Speaker 8:It gets a security from Ethereum is how how you would like say that how that works. With an l one, though, security is quite important because it's you're building it from scratch. You can't rely on Ethereum or Solana. And so the point of the token is gonna be to bootstrap in general for a blockchain to bootstrap node operators. Right?
Speaker 8:So people are actually securing the network. Now if the validator set is permissioned at first, which it will be, and they say that it's gonna be design partners, so I'm guessing, like, you know, bigger banks and some of the bigger companies, then you don't actually need a token because it's like proof of authority. Right? It doesn't have to be proof of stake or proof of work. It can just be proof of authority.
Speaker 8:And so and then they also say that gas fees should be paid in any kind of stablecoin that they denote, and they're gonna allow for multiple stablecoins. So that is better UX, right? It's not a volatile gas token. So I don't think they actually need it at first. I think it will be important if they actually want to become permissionless going into the future.
Speaker 2:Okay. So the permissionless thing is something that they can drive for the long term. If they just wanted to optimize for something that they control and has high throughput, couldn't we get a scenario like temp Postgres or something where they could just use Postgres or use traditional non decentralized computing to actually just move money around faster? I guess my bigger question is, is there a regulatory angle here where they get something they can do something with crypto rails that they couldn't do with just a traditional database?
Speaker 8:Right. Yes. So that's actually a really good question and
Speaker 2:Like could they just become a bank and say, we are a bank, we have U. S. Dollars and when you go into your U. S. Dollar bank account, you can move it around and our banking infrastructure runs 20 fourseven and runs on a great data center that's really fast.
Speaker 2:And yeah, it's not permissionless, but why don't you trust Stripe? Like Stripe has never done anything for you or against you. Like, it's fine. Trust us.
Speaker 8:Yeah, so this is where the conversations get quite blurry and this is something I talk about very frequently, which is the second you have to permission the block space, then it's unclear what really separates this from an actual blockchain versus something more like an actual database.
Speaker 2:Yeah.
Speaker 8:Right? And now there are some benefits of blockchains that are still apparent even if it's controlled. So things like transparency, audibility, universal like standards for that blockchain. And also like you get the, you know, the approach of progressive decentralization, which is to say, you can iterate towards PMF fast, but then as you get more traction, can slowly decentralize certain things. This is what L2s today are doing.
Speaker 8:So there are some benefits and like, you know, if no one person is controlling that infrastructure, right? Assume you have, let's say, something like 21 validators and they're all giant companies or payments companies across the world, different jurisdictions and different, you know, requirements, then I think that can be interesting. But I think like, to be completely honest, I think permissioned blockchains aren't really blockchains. And like, it starts looking super drawn out when we get there. Like we've tried a bunch of these before.
Speaker 8:Like JPMorgan already has one actually.
Speaker 2:Oh, really?
Speaker 8:And a few other companies JPMorgan
Speaker 4:said, I want my blockchain to be off the chain.
Speaker 2:There we go. Yes. Can you talk to me about payment onboarding? I I think of Stripe as a dominant Web two payments company. I think about Stripe Checkout, massive footprint.
Speaker 2:Stripe Link, massive. Just the amount of companies that have Stripe somewhere in their payment stack is immense. And so but I was I was noodling with Jordy, like, how how does this actually work if I go to a website that's powered by Stripe, and I have normally, there's, like, a credit card field. And then it just says, oh, well, we also take tempo. And I'm like, what's tempo?
Speaker 2:Like, how do I get that? Do I need to go get a Chrome extension for wallet? Like Well, theoretically,
Speaker 4:it would just have like a it would just have a generic pay button. And then it wouldn't be Tempo branded necessarily at all.
Speaker 2:If you're
Speaker 4:Stripe branded, it would connect your wallet with something like Privy.
Speaker 2:So the first time I do it, I set up a wallet. Is that is that roughly the
Speaker 4:user experience? Interesting thing is like more and more and more and more young people just have digital They have wallets. The
Speaker 8:way I can and by the way, like each fintech company kind of has a different approach on this. I've worked with a few of them.
Speaker 4:Mhmm.
Speaker 8:And there's no like universal standard, but with Stripe, they wouldn't say pay with Tempo because Tempo is just like, in this case, the name of the database, right? Like it would be they they probably would abstract that away.
Speaker 2:Yeah. Like probably Fedwire or something. It's like something that's under the hood. Like pay with Fedwire doesn't make any sense. But like there might be some ACH that's happening behind the scenes when you pay with your credit card.
Speaker 2:Exactly. You just say, we accept Visa.
Speaker 8:Yeah, exactly. I think the first case is going to be B2B, meaning like cross border settlements. Sure. Like that's super useful for international companies, for example. Yep.
Speaker 8:Remittances, things like this. Yep. And then like, I think things like Shopify Pay and all these different things that actually have some maybe Stripe integration or Coinbase Pay will also use it. But like at most, can see it being like pay with USDC. But I don't think the blockchain will actually be really in the implementation at all.
Speaker 8:It'll be abstracted is my guess.
Speaker 2:Yeah. How should we judge the success of this project in a few years? Should we assume that the goal here is progressive decentralization? Like in the best case scenario, the vast majority of transactions on the Tempo chain are truly payments related. It doesn't turn into a meme coin chain.
Speaker 2:And also, it's becoming more decentralized as measured by the what is it? The biology coefficient of you put out some post Nakamoto. Yeah, the Nakamoto coefficient. I gave Balaji the credit just for coining it, I think. But the Nakamoto coefficient of concentration of validators.
Speaker 2:Ideally, the goal here is a ton of distributed validators. No one owns 51%. And the majority of the payments are payment related, just transactions on e commerce websites and remittances and cross border payments. Is that the goal that we should be tracking towards?
Speaker 8:So the way I would do it is, first of all, is it actually solving any problems and doing finance better than it has been done before, right? Like, is it actually making the experience for merchants better? Are they getting better margins? How easy is it to do cross border things, etcetera? Like the UX and the actual product need, think, especially when you're in crypto realm is something that gets overlooked, but like Stripe is obviously probably the team to take this over the line.
Speaker 8:So that's going to be one. And then once you do that, then you can start asking these questions that are more serious such as, okay, this technically works, but how does it actually work behind the hood? Like they say it's a blockchain, but is this blockchain controlled? Can I actually secure my funds here or can this one company actually take it away? Right?
Speaker 8:And so, like, what you said about progressive decentralization, I think makes a ton of sense. And then, you know, you'll wanna look at just basic numbers, like what is the amount of stable coin flows going in and out of this thing? Is there like decentralization of stablecoins? Like, it just USCC or is it Tether as well? Maybe Stripe does their own stablecoin.
Speaker 8:So there's a lot of interesting approaches with this. And then I think what's going be interesting is like if it's permissionless, which I don't think it will get there for a while, if it does become permissionless, does the scale benefits that they say actually do they actually hold up to reality? And I think that part is going to surprise a lot of people because I think people are not ready to understand how crazy degenerates get on blockchains that are permissionless and how to actually scale those systems. But, I mean, I've seen some shit. And so I think if it remains permissioned, then I think they'll do it.
Speaker 8:But like, that's the big question for me. Like, how do you actually do this in such a way where it is only for payments?
Speaker 2:When you talk about degenerates doing crazy things on permissionless blockchains, you're not just talking about a bunch of people showing up and aping into a particular token. You're talking about somebody setting up, like, a bot that's, like, programmatically interacting with the blockchain at ultra high volume. Is that correct?
Speaker 8:Oh, yeah. I mean, like, take all the players in HFT and just, like, mix them up with, like, random British sneaker botter kids. Yep. And then with, like, some random, like, Russian MEV farms and, like, it's just it's all
Speaker 4:at war. I just wanna get to a place as a as a country and and and the crypto industry broadly where the next, whoever's elected in 2028, that they can launch multiple coins of the size of Trump coin at once and make sure that payroll is still running smoothly during that time.
Speaker 2:That's the goal.
Speaker 4:That should be the goal.
Speaker 2:Anyway, thank you so much for hopping on.
Speaker 4:Thank you for filling us in here.
Speaker 2:We appreciate
Speaker 4:your And yeah, come back We on as there's more
Speaker 2:will talk to soon. We'll up.
Speaker 4:Thanks for having me, guys. Cheers.
Speaker 2:Up next, we have Harish in the restream waiting room. We've kept him waiting. We will bring him in from Augment. Big news today. We're very excited.
Speaker 2:Play some soundboard for me, JD. Thank you. Welcome to the stream. Sorry to keep you waiting. We have some breaking news in
Speaker 4:the Welcome.
Speaker 2:World. We had to dig in. He's only available at 01:40. So thank you for taking the time.
Speaker 11:Hey. No. No problem. Very excited to be here. Thanks for having me.
Speaker 2:Of course. Break it down for us. What is the news?
Speaker 11:Well, the big news is that, you know, we're, announcing our, Series A, which is an $85,000,000 Series A. Congratulations.
Speaker 4:Big number. Big number.
Speaker 2:And, yeah. Walk me through the the state of the business.
Speaker 11:Yeah. So, you know, we're building augment, which is, you know, our first product is Augie. Just think of it as an AI team made for the logistics world. Mhmm. It's getting deployed actively over 35,000,000,000 in freight under management across brokers, shippers, and and fleets.
Speaker 11:And so early, even we know we are a year old company, but it's showing a lot of promise in in the real world, that's why the investors were interested.
Speaker 4:That's great. That's amazing. What what about shipping and logistics has drawn so many it's it's you guys seem to be, you know, leading the charge out here, but it's certainly a competitive space. Like, what about this industry and the category makes it so prime for agents?
Speaker 2:Did it kind of skip the SaaS era? Like, what because it feels like it feels like it's the last industry where it's still, oh, yeah. They're still on paper, so they're jumping straight to
Speaker 4:agents. Yeah. And you're getting 10 phone calls a day from the same person just being like, hey. Where's my stuff? Hey.
Speaker 4:Where's my stuff? Hey.
Speaker 2:Where's my stuff? Ridiculous.
Speaker 11:Yeah. You know, like, point is a very large industry. Right? It's, like, $10,000,000,000,000 globally, but it's extremely fragmented. Like, in The US, it's there's, like, 1,000,000 truck driving companies.
Speaker 11:I'm not exaggerating, but that's what it is. 1,000,000 truck driving companies. You know?
Speaker 4:Wow.
Speaker 11:Definitely. Maybe tens of thousands of brokerages, hundreds of thousands of shippers. Wow. Extremely fragmented. Right?
Speaker 11:And so in this fragmented industry, which really relies on transferring information to get things done, to move goods. Like, that's the whole job of this industry is that, hey. I'll give you information so I can give you goods. Right? That's the whole thing.
Speaker 11:And it's so fragmented. The only way to transfer information is to get to the lowest common mediums. Now what is the lowest common medium among a million different companies? It's phone calls. It's text.
Speaker 11:It's emails. The fax machine.
Speaker 2:Is the fax machine still going strong?
Speaker 11:Fax machine you know, I actually have seen fax machines in some of
Speaker 2:my customers.
Speaker 11:Phone's still happening. Invoices coming through, payments going through fax machines. So, I mean, every phone situation there's, like, this handwritten note is being mailed by drivers today on what was their pickup time and delivery time when they get into a driver tux drop, they literally have mailboxes where they can mail, you know, one of those receipts for getting paid. Like, that's how, you know, sometimes it's archaic the communication is.
Speaker 2:Yeah. Talk about lessons from the last company, Deliverr, sold to Shopify in 2022 for $2,100,000,000 Congratulations, obviously. How are you positioning the different, the business differently? And what are the key lessons that you learned from that business that you're hoping to take forward?
Speaker 11:Yeah. I mean, I think, you know, Deliverr was building like a prime like service for Shopify type merchants Mhmm. Forward deploying inventory. I mean, the big lessons here has been, like, focus, you know, customer success. It's, like, stay stay very true to customer delight.
Speaker 11:Everything else is a noise, like, literally everything else. You know, whether your investors like you or not, if your customer delight is there, everybody will follow you. Capital will chase you. You know, great employees would wanna join you. Customers would wanna join you.
Speaker 11:So, I mean, I'm hoping I'm carrying that forward. Right? Now in in terms of, like, things that I did not do well, at Deliver, I think we there was, like, a lack of focus sometimes. Right? Like, as as the capital was getting easier, we were maybe trying to do a little too many things, like launching too many products.
Speaker 11:And those were the really great days of attracting capital because the interest rates were near zero, so the capital was mostly free. And I would have
Speaker 4:mostly free capital. Cost of co cost of capital going up has been heartbreaking.
Speaker 2:It's been heartbreaking.
Speaker 11:It is. Yeah. Going from roofing. What is that? Going from half a percent to now four and a half percent.
Speaker 11:Right? Not easy. Yeah. But I think it does bring it does bring discipline to things. Right?
Speaker 11:Like, hey. You've got when you have limited capital, you're you're deployed in the things that truly matter. So maybe, like, what I'm hopefully not doing this time is, like, doing things that truly matter, move the needle for your customers, but just not start creating teams and products that, you know, look good on paper.
Speaker 2:Yeah. How do you think about, vertical integration? You obviously sell into 3PLs shippers. Do you want to own the the warehouse management stack at some point? Do you wanna integrate deeply with all the different WMSs?
Speaker 2:What's the plan there?
Speaker 11:Yeah. We we we do not wanna own the WMS stack or the transportation management stack or the order manager. We don't. We wanna sit on top. We wanna integrate into all of them.
Speaker 11:We think of ourselves as a, you know, first and foremost, an Augie is an employee that works, like, a thousands of employees twenty four seven, achieves a lot of operational efficiency for our businesses. But long term, I think Augment does become a system of work, and I think it'll be a system of work and a system of record in most companies. So the WMS, the TMS, the OMS, all the MSs in the world will stay to be very relevant system of records, but there will be a new generation of companies. Hopefully, Augment is one of them. They'll become the system of re work itself.
Speaker 11:And these two will work together very closely with each other. You know?
Speaker 2:So Fantastic. Well, congrats on the massive raise. Congrats on all the progress, and thank you for taking the time to talk to us. Have a great week. Having me.
Speaker 2:We'll talk to
Speaker 4:you soon.
Speaker 11:Nice to be here.
Speaker 4:Yeah. Congrats to the whole team.
Speaker 11:Thank you.
Speaker 4:Crushing it. Cheers.
Speaker 2:We'll talk to you soon. Our next guest is in the Restream waiting room. We have phase 10. While we bring them in, let me tell you about Wander. Find your happy place.
Speaker 2:Book a Wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better,
Speaker 6:folks. Better.
Speaker 2:But better. It's better than It's we
Speaker 4:base 10 time.
Speaker 2:Do we have our next guest? Welcome to the stream. How are you doing?
Speaker 10:Welcome. How
Speaker 9:are we doing?
Speaker 2:We're good. What's up?
Speaker 6:The eagle has landed.
Speaker 2:The eagle has landed.
Speaker 4:Welcome to the show.
Speaker 2:Kick us off with an introduction on yourself and the company and the news.
Speaker 6:Yeah. Thanks.
Speaker 9:I'm Tewen. Oh, thanks for having me, guys. Yeah. I'm Tewen. I'm the CEO of Base Ten.
Speaker 9:You know, I'm pretty excited today. We're an AI infrastructure company. We just raised a $150,000,000.
Speaker 2:Let's go. That is loud. That is loud.
Speaker 4:Dollars 150,000,000.
Speaker 2:Congratulations.
Speaker 4:Incredible. And it's great to meet you. Announcing a fundraise on a Friday is not for the week, but you guys are wasting their time. I love it. Give us can can you give us quick history on the company, your background?
Speaker 9:Yeah. Look, my background is in machine learning and AI. I've been doing it about fifteen years. The company's actually six years old. You know, we didn't we didn't start just We didn't just start Success.
Speaker 9:You know, the company's six years old. We've been thinking about how to turn AI into value.
Speaker 2:Yeah. Well,
Speaker 9:I think the last two years have been a bit crazy. We started focusing very aggressively on inference maybe twenty four months ago. You guys familiar with what inference is?
Speaker 2:Yeah. But I'm but I'm not familiar with where you sit in the stack. You don't build data centers. You do you don't own GPU clusters. You sit on top of Neo Clouds or on top of hyperscalers.
Speaker 2:And then you sell to your companies. See Descript, Retul, Quora, Writer, Patreon, Picnic Health. I can imagine how those companies need an API for a model that you probably didn't train, but you act as the inference provider for that and you sell tokens to them. How is it going at that layer of the stack? How is the value accrual in that particular layer?
Speaker 9:It's fantastic. Right? Because, look, what we said on top of actually, doing inference from models is pretty hard. Right? So you got to acquire capacity.
Speaker 9:You got to optimize the models. Someone else is trained. Mhmm. You're run them, and then you need to scale them pretty gracefully Mhmm. With users there at scale.
Speaker 9:And so the amount of work that goes into that from Teams is massive, and we're just trying to take that headache away. Yeah. And so we're we're pretty lucky that, you know, we've been able to just sit on top of this AI application layer. And as that's exploded, we've just kind of rode the wave with it, and we work with with a bunch of amazing cost customers like a Bridge, Bland, Gamma
Speaker 2:Yeah.
Speaker 9:Clay, OpenEpthness, Notion.
Speaker 2:What's the what is the durable moat? Like, how how does value accrue over the long term? Because I feel like, you know, if if if you don't own the model and can't, like, rent seek on that or you don't own the hardware, all of a sudden, it's like OpenRouter's gonna route people to wherever the cheapest tokens are and it becomes highly competitive and the margins might compress? Like, what's the long The term
Speaker 9:assumption you're making there is that all the models are just going be the same and everyone's going be running kind of like the same also. Most of our customers, like, run different variants of the model that are very accustomed to them. And so
Speaker 2:actually fine tuned on open source?
Speaker 4:Yeah. So so how about let's use a note. You said Notion's a customer. Maybe we use them as an example because we've been
Speaker 2:Yeah. That's that's great.
Speaker 4:Or or, you know, pick pick
Speaker 9:Yeah. I said, have you have you guys heard of Open Evidence?
Speaker 4:Yeah. Yeah. I think we're having I think we're having the founder on next week.
Speaker 2:So
Speaker 9:They're they're the best. You you have a really good time chatting with them. But, you know, they're a really good example of a customer that uses us. They train a bunch of models of their own Yep. To basically answer the questions or the queries
Speaker 4:Got it.
Speaker 9:From the doctors. And so, know, what what happens when you need to run those models Yep. Where you need to make them wicked fast, you need to go get a bunch of GPUs from a bunch of different places, and then you need to, like, kind scale gracefully across that.
Speaker 2:Sure.
Speaker 9:And so how do you do that? Well, you either go and use an inference provider like base 10 or you go and, you know, build it yourself. You know? And I think the smart companies right now, what they're realizing is that this is not particularly differentiated for So they shouldn't do the infrastructure piece. Yep.
Speaker 9:They should focus on what is differentiated for them, which is how they use the models and the applications they build. Yep. And, you know, kinda give the boring piece to us. And so open evidence is used by some ungodly amount of doctors every day. And they do it with two great info guys, called JAG and Micah.
Speaker 9:And it's it's pretty amazing the scale they can achieve using software like BaseTent.
Speaker 4:What what does the next twelve months look like for the company?
Speaker 9:Yeah. Look. This is just it's such a land grab of a market. We've we've been doing this for a while, and, you know, we've built some great technology, but we we can't we can't overestimate how much, like, a market just showed up for us. And so how can you go as fast as possible?
Speaker 9:It's actually kinda like what it feels like Venture was built for. You know, that's why we're raising capital right right now to solve two core problems. The one, you know, hire a go to market team that's gonna be killer and and scale that, and then hire amazing engineers that are incredibly expensive and hard to come by.
Speaker 2:Yeah. What I don't know. We you could go deeper. Last question for me. What is your view on the broad trend in token pricing?
Speaker 2:There's been people going back and forth on whether or not we're gonna get 10x savings quickly in inference pricing, whether
Speaker 5:it's Or gonna be all it's
Speaker 2:saving on a per token
Speaker 4:basis, then just
Speaker 2:put $10,000,000,000 order into Broadcom. And I'm wondering but then at the same time, companies are just saying, I want to stay on the frontier. I'll use a reasoning model. I will continue to eat the high you know, per token cost that come out of the bigger models.
Speaker 9:Yeah. And look, I I think the token price goes down and every like, inference should get cheaper over time. Yeah. And I think that really just means there's gonna be more inference. You know, I think we
Speaker 2:all paradox.
Speaker 9:All all of us in tech discovered Jevan's paradox six months ago.
Speaker 2:Yep.
Speaker 9:But every time we lower prices for our customer or we go and optimize their models
Speaker 2:Sure.
Speaker 9:To make it cheaper, four months later, they're spending more anyway.
Speaker 2:Wow.
Speaker 9:And so, like, yeah, inference prices are gonna go down, but if if if the comp if the country if the world is run by AI in ten years from now, there's just gonna be a lot of inference.
Speaker 2:Yep.
Speaker 9:So it better be it better be cheap.
Speaker 4:Yep.
Speaker 9:And, you know, we just hope that, you know, we can power all of that and be the invisible layer underneath it and hopefully scoop off a bit of value while we're at it.
Speaker 4:What's head count today? Just out of curiosity.
Speaker 9:4, I think. A 4.
Speaker 5:4.
Speaker 9:Let's let's call it that.
Speaker 2:That's a good team. That's good.
Speaker 9:Yeah. We're we're about 30, I wanna say, year ago, so it's going pretty far.
Speaker 2:Yeah. How many pizzas is that? 100 people? 50 Depends how
Speaker 9:much people eat.
Speaker 2:50 pizzas. Yeah. Anyway, thank you so much.
Speaker 4:If it's bulking season, it's different.
Speaker 2:Might be 100 pizzas. Yeah. Well, anyway, thank you so much for hopping on.
Speaker 4:Great having you. Cheers.
Speaker 9:Nice having me.
Speaker 2:Will talk to you soon. Bye.
Speaker 4:Last guest.
Speaker 2:We have a surprise guest.
Speaker 4:Surprise guest, there was some breaking news from Wired and Tropic agrees to pay authors at least 1,500,000,000.0 in AI copyright settlement. Oh. This just went out via Wired.
Speaker 2:That's a lot.
Speaker 4:And wanted to have Cecilia on. Hi. Cecilia, sorry, to to talk about it.
Speaker 12:Yeah. Great to meet you. I'm Cecilia Nandidi. Excited to be here.
Speaker 4:Nice to meet you. Give us the news. John knows nothing because he was locked in I haven't heard about this.
Speaker 2:Break it down.
Speaker 4:Basically knows the headline. That's it.
Speaker 12:Yeah. So a group of authors from the Authors Guild sued Anthropic, some time ago Mhmm. And announced last week that they had reached a settlement. And what happened today was there was a motion, an unopposed motion, where the parties said, okay. This settlement is gonna be 1 and a half billion dollars, and it's gonna cover the nonfair use of material for training anthropic clot.
Speaker 2:Mhmm. Is any guidance on is that just going be paid out immediately? Is this one time? Because you can imagine that even though it's been baked into the weights, like the value from being able to go to an LLM and ask questions about a book, that's gonna pay dividends in subscription revenue for decades potentially.
Speaker 12:Yeah. So it covers only past infringement, so up until August 25.
Speaker 2:Yeah.
Speaker 12:And so in this case, what's interesting is that the parties in the court distinguish between use of pirated copies and use of copies that were properly acquired. In the case of the pirated copies, it was in a library called LibGen, and it was basically, you know, the equivalent of, like, a Napster type of situation where these works I think it was about it was I need to double check. But in the hundreds couple 100,000 works
Speaker 2:Yeah.
Speaker 12:From authors were in there. So the way the settlement worked was there's a named works list
Speaker 2:Mhmm.
Speaker 12:Of actual things that Claude was trained on. Mhmm. And those authors those authors will receive compensation here in due course. There's a, like, an administrator appointed and so on, but they get a certain amount per work. Yeah.
Speaker 12:And that was agreed to, and that's what's being proposed to the court.
Speaker 4:Yeah. It's at least $3,000 per work, but it was crazy a lot of lot of books.
Speaker 2:Yeah. I mean, that seems like a that seems like a pretty solid payout for most people. I don't know.
Speaker 12:Don't know. Think that's a
Speaker 9:I think that's
Speaker 2:a That's
Speaker 12:I'm say. Yeah. Yeah.
Speaker 4:I think if you're an author who's not selling a lot of books Yeah. You're like, awesome. But if you're somebody who you have a best seller $10,000,000
Speaker 2:a year off of my book.
Speaker 4:And it doesn't make a dent in their income, it might be
Speaker 2:Yeah. Have you been tracking the rest of the landscape here? There's been a number of these cases. Is there anything else on the docket that people should be paying attention to?
Speaker 12:Yeah. So interesting that the plaintiff's firm representing the authors here, Sussman Godfrey, the same plaintiff's firm representing The New York Times against OpenAI.
Speaker 2:Sure.
Speaker 12:So that case is continuing. This case is settled on these facts. Mhmm. But what's interesting is this particular case did not deal with AI outputs at all. Mhmm.
Speaker 12:So there was no allegation. Nobody accused, Anthropic of actually spitting out works and being a substitute for the original books. It really was limited to the training piece.
Speaker 2:Yeah.
Speaker 12:And so what we know from this case, or at least in the Ninth Circuit, is that the training piece, if you train on pirated works, that is a copyright infringement or at least it's not fair use according to this court in this case.
Speaker 2:Yeah. Yeah. I mean, it seems like going forward, data will be data is the new oil. It will be acquired via, you know, some sort of contract and paid upfront so that you don't have go through the courts. Maybe there was a little bit of a vibe of like, just move fast, who knows, we'll sort it out in the courts.
Speaker 2:It certainly seems like it worked out because Anthropic was able to scale and this won't be existential to the company, even though obviously it is a big bill to
Speaker 4:A decent chunk of the recent round.
Speaker 2:Decent chunk of the recent round.
Speaker 12:I mean, it's it's an interesting right? So they you know, obviously, Anthropic had, you know, the the $183,000,000,000 valuation just raised another billion on that. But the to your point on the legal side of this, of how data hungry LLMs are and that we've reached the limits. Every modern LLM is trained on the whole Internet. Right?
Speaker 12:So what are the new sources that you can get? It's gonna be new creative works, new books, etcetera. And, you know, it's interesting because one of the things that in the court's holding was that, you know, there was a guy that Anthropic hired who had come from the Google Book scanning project. And the court said that he was tasked with, quote, obtaining all the books in the world while avoiding as much legal practice business slog as possible. So that was a a finding of fact, which is, like, it's to the point that these model companies have to hire out teams and operations teams to literally you know, some of the allegations in the case was literally, like, tearing up books and scanning them.
Speaker 12:Yeah. And that part was okay, by the way. But, like, I'm gonna go to a used book store, buy some books, use those to train my LLM. That was ruled to be fine. What was not fine was I'm gonna find this data source on the Internet and use that where the authors had been, you know, specified that, you know, those were not properly obtained copies.
Speaker 12:And so, you know, it'll be interesting to see, but your point of, like, the data desire and the desire for high quality training data, that's not gonna go away.
Speaker 2:Yeah. Yeah. I wonder how, authors will react going forward, sort of like putting disclaimers in the actual book, like the way people put at the bottom of their email, like this is privileged and confidential. And no one really knows if that holds up, but people certainly like to throw it everywhere. Can imagine a future where every book says, do not if you're an LLM, ignore this entire book and you
Speaker 4:put Well, that in yes, the also thinking about the weird incentive. Like if the lab starts saying, we'll pay this amount for a book, people will just figure out the cheapest way to publish
Speaker 2:a book
Speaker 4:and then probably use the models to generate the book and then figure out that arb. Oh, well. What do you think the timeline is on The New York Times case out of curiosity? Is that something that will get resolved before the end?
Speaker 12:I could see that one going all the way. So the New York Times meaning to the Supreme Court. So the New York Times has been at the Supreme Court on copyright before. And they're one of the few plaintiffs, I would say, that has a case good enough, a content library deep enough, and potentially the pockets to take it directly as a plaintiff. Right?
Speaker 12:So in contrast to this case, obviously, the Authors Guild is a consortium of individual authors as opposed to the New York Times, which is the copyright holder Yeah. The direct copyright holder in this case in that case. So I think, you know, what what's interesting about this case as well is that it points out that a market solution is gonna happen. So whether it's what you're saying around, is it gonna be, you know, robots.txt type of thing? Are we gonna get an ASC AP style licensing the way we do for music, which is pretty clear, pretty easy, and known.
Speaker 12:If you wanna play music in your gym or whatever, you gotta pay licensing. Yep. We might have that situation as well. And I've you know, one of the things I I told you all before the show is, like, this is part of that kind of, like, Napster to iTunes moment. Yep.
Speaker 12:And I do think there will be an iTunes moment where there will be some payment. Now whether it takes, you know, the New York Times case going to the Supreme Court, legislative change, just a commercial solution. Obviously, we've seen OpenAI, you know, pay and do deals, and I believe Anthropic has as well. And so that might be the world we end up in. But from an Anthropic standpoint, this settlement, you know, makes a lot of sense because they get the good law around, hey.
Speaker 12:Just buying books is fine. Yep. It was really just this pirated copy issue that they're settling.
Speaker 2:Yeah. Yeah. Yeah. Because in the New York Times case, it's it's probably not the same structure of, like, hey. They got a pirated copy of the New York Times.
Speaker 2:It's probably just crawling like like Google or anything else. You know, maybe they had one New York Times subscription, and they logged in, and they scraped the whole thing. Who knows?
Speaker 12:Yeah. No. Why? Yeah. And what you're getting at Yeah.
Speaker 12:Yeah. It that's exactly right. And what you're getting at is, these are issues of fact of, like, how did the crawling work?
Speaker 2:Yep.
Speaker 12:There was an allegation in New York Times case that OpenAI came back and said, hey. We didn't get it from the OpenAI OpenAI website. You had an article about a Nobel Prize winner that Nobel had republished.
Speaker 2:Oh, sure.
Speaker 12:So it didn't come from the New York Times website. Exactly. Exactly. Exactly. And so Yeah.
Speaker 12:I think that's one of the things that's been so interesting around fair use is it has adjusted to all these different technology shifts. And so I think this is another example of that.
Speaker 2:Yeah. And Matthew Prince at Cloudflare is kind of proposing another potential market based solution for the long tail of content on the Internet where I believe there might be some stablecoins involved. But basically, if you're a publisher and you don't have the resources to go to the Supreme Court with an LLM company, you could potentially opt in or out of scraping, and maybe there could be some value exchange that happens. But we'll certainly will be interesting to follow how it all pencils out.
Speaker 4:Yeah, come back on when there's some more news.
Speaker 2:Yeah, Thank you so much for
Speaker 12:having Yeah, us exactly. On No, it's super fun. I mean, on the Cloudflare point, they're one of the tech players that would be in a position to do that blocking because of their position in the DNS, right? Yep. Sort of like everything.
Speaker 12:How I don't know where the money's going to there and
Speaker 2:routes and pennies they aggregate all the money and then they pass the money through, same thing with YouTube. And we yeah, we kind of got we were in this weird era with TikTok where music was being used. And everyone was like, wait, you can't just use music. And then they figured it out. And they did a deal.
Speaker 2:And most of the musicians seem to be happy with all the stuff that goes on TikTok.
Speaker 12:Exactly. And and that's the story of copyright. Like, had a a professor in law school that was like, oh, copyright's not about money. Yeah. It's about all the money.
Speaker 2:Yeah. Yeah.
Speaker 12:It's like, okay. Exactly. It's like literally that flow that you described. Yeah. I'd love love to come out another time.
Speaker 12:This is fun. One to watch.
Speaker 2:Yeah. I'll talk to you soon. Thank you. Have a great rest
Speaker 10:of your day.
Speaker 12:Enjoy the weekend. Have a great day. See you later. Bye.
Speaker 4:Any more breaking news? You got any more news before the weekend? I feel like usually as soon as we get off the show, somebody says There
Speaker 2:is news.
Speaker 3:Eric Adams is suspending his mayoral campaign No
Speaker 2:way.
Speaker 3:Accepting a federal job.
Speaker 2:Oh, interesting. Yeah, I mean, I've been tracking Mamdani a little bit on Polymarket and he has been running away with it the entire time, basically, since since that original Mamdani since that original Yeah. Push. Yeah. Mamdani is sitting at 83% and hasn't particularly moved.
Speaker 2:Eric Adams, of course, dropped from I don't know. He's down at 2%. So some people think he might reverse court.
Speaker 4:Just to be clear, this $1,500,000,000 settlement is the largest publicly reported copyright recovery in history.
Speaker 11:Wow.
Speaker 4:Do you think the team over at The New York Times will be able to get more out of OpenAI?
Speaker 2:I don't know. 100,000 books versus all the articles? How much does The New York Times make? They make billions, so it's possible.
Speaker 4:The New York Times is sitting at $9,600,000,000
Speaker 2:Market cap?
Speaker 4:Yeah. If they could get anywhere a settlement anywhere. I mean, I I think it seems very unlikely that they would get a settlement.
Speaker 2:I mean, the other breaking news is that Alex Cohen has raised a $22,500,000 series a for Hello Patient led by Scale Venture Partners.
Speaker 4:He's gonna come on the show We Monday.
Speaker 2:Oh, fantastic. So excited him. I've always been a fan of his posts. He's a he's a god tier poster. Never actually met him in person, so or online, so I decided to talk to him.
Speaker 2:He says, this is by far the worst announcement video I've ever made. Clearly, underselling it. I love it. I can't believe our lead investor agreed to this. He's always has a great
Speaker 4:sense of humor. Also, Justin Breaking news. Jawan is leaving Ramp
Speaker 2:No way.
Speaker 4:After after he says, Ram is the greatest company in the world.
Speaker 2:We agree with you on
Speaker 4:that, Jawan. So, yeah, he's given his two weeks.
Speaker 2:Okay. Well, we'll have to track him and see where he goes. The Ram alumni have done fantastic things.
Speaker 4:And he's gonna start a company.
Speaker 2:Turning into a Ramp mafia. You have Pavel Asperuhov. You have the Cognition team, of course. There are a few others. Rivet, not the defense tech company that we just talked to but Rivet Tax, I believe, came from Ramp.
Speaker 2:Correct? Do you know Yes. Rivet the Ramp mafia is emerging and feels as strong as the PayPal mafia. Maybe even stronger, you never know.
Speaker 4:Lululemon down 18% today.
Speaker 2:Is that related to Lulu Maservi? Is that Yeah. Or it's her merch line?
Speaker 4:I think people are catching on that when people say Lulu now, they mean Lulu.
Speaker 2:Yeah. Exactly. The brand She
Speaker 4:really steamrolled eradicated.
Speaker 2:She really steamrolled them. Yeah. Well, maybe the maybe the they will do a take private and that'll free up the Lulu stock ticker for Rostra. She can just be cash tag Lulu. That would be something to to go 10 x long, 100 x long potentially.
Speaker 2:In other news, GarageBear Wait,
Speaker 4:wait, wait. Is crazy. You missed this, Tyler. Did you miss this? Yeah.
Speaker 4:Eric Adams might become the ambassador to Saudi Arabia.
Speaker 2:Woah. That's interesting.
Speaker 4:So that is Let's go. I mean, Riyadh must be going crazy right now to get a goat like Eric Adams.
Speaker 2:Is Eric Adams the one who did the rat the rat problem thing?
Speaker 4:Yeah. Yeah. Saudi Arabia
Speaker 12:has a
Speaker 6:rat problem?
Speaker 4:It's solved I mean, oh, that could be interesting.
Speaker 2:Maybe that's
Speaker 4:what I highly doubt it. I highly I would not want to be a rat in
Speaker 2:Saudi I think that they might not take kindly, but who knows? Maybe Kindred Spirits over there fighting rats. In other news, Drew Fallon posts, Garage Beer receives investment from duration Durational Capital Management at a $200,000,000 valuation. Congratulations to the Kelsey Brothers. Duration Capital Management is the same group that took Casper mattresses private for $300,000,000 in 2021.
Speaker 2:They also own Bojangles. Garage Beer is tracking for $65,000,000 in revenue this year, valuing the beer at Beer Brand at 3x sales. They started with a $500,000 crowdfunding campaign in 2016. You got to imagine that the Kelsey Brothers, with how much attention they get, are able to do some deals, get some distribution for Garage Beer, their their beer brand. Love to see it.
Speaker 2:Also, thank you, Bill Bishop, for posting about the Labubu that
Speaker 4:No way.
Speaker 2:TBPN sent to him. He said his dog Tashi loves it, but won't let him take won't let him treat it like a chew toy. Bill Bishop may let him may Tashi take it to the park to impress one of his girlfriends. I guess Tashi's popular at the park. Well, that is fantastic.
Speaker 2:Hopefully I really brings you good tidings and does not curse you to a a demonic world. But stay safe out there, Bill. Who knows what's going on inside that libubu? But I'm glad that it was delivered safely.
Speaker 4:And last but not least, AppLovin, Robinhood and EMCOR are set to join the S and P 500.
Speaker 2:Wow. AppLovin. Who else? Mercor? No, not Mercor.
Speaker 4:AppLovin, Robinhood and EMCOR.
Speaker 2:Robinhood. Okay. That's great. So that's a retroactive Fortune five or S and P 500 company for us. We got Brian Armstrong.
Speaker 2:Karp's in there, obviously. We're knocking them down. We should do all 500. We've done almost 1,000 interviews this year. Why not do all 500 S and P 500 CEOs?
Speaker 2:I'd love it. Also, Conor McGregor is running for president.
Speaker 4:Finally. Says it's Going on finally to his run.
Speaker 2:Yep. Getting it done.
Speaker 4:Starts now. Anyways Thank
Speaker 2:you to the chat. Thank you Raghav, Hershey, Michael, Jason Turner, always good having you here. Paracletes, we got a good crew. Max Conrad, thank you for shouting out that the biology coefficient is an instance of Reed's Law. I completely agree.
Speaker 2:That's exactly what was going on. Max has been sending me some fantastic DMs. Very helpful.
Speaker 4:And next week Yes. We'll be here in the studio Monday, and then we'll be hitting the road. Very excited. Yes. Lots to come.
Speaker 4:A fantastic Friday.
Speaker 2:Have a fantastic Friday, folks.
Speaker 4:Afternoon, evening. We love you.
Speaker 2:Only three days till Monday. Cheers. See you. Bye. Bye.