Subscribe
Share
Share
Embed
TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN. Today is Tuesday, 05/05/2026. We are live from the TBPN ultra gun on the Temple Of Technology, the fortress finance, the capital capital. Great show for you today, folks. We have Ryan Cohen from GameStop coming on the show at 12:30 to break down his acquisition proposal of eBay.
Speaker 1:We were sort of confused by the CNBC appearance, really processing the idea there. Then What
Speaker 2:were you confused about?
Speaker 1:Oh, just like mechanically how it would happen.
Speaker 2:Yeah. It's half cash, half stock.
Speaker 1:Oh, okay. That No. That makes sense.
Speaker 2:I don't I Gen like Yes. Genuinely what's confusing
Speaker 3:website.
Speaker 1:It's on the website.
Speaker 2:It's on the website.
Speaker 1:It's on the website. Well, I I need to study the website but
Speaker 2:catching up with Ryan.
Speaker 1:To Ryan. We also have the CEO of GE Vernova coming into the studio to give us an update on the The bottleneck the bottleneck economy. And then we, of course, have Harley, Brian and Steven, friends of the show. Big news, big announcements, lots of fun stuff. But let's run through the all the news.
Speaker 1:There's so much going on in the world of tech. Of course, the OpenAI Elon Musk trial continues. It's week two now, and the Oakland Courthouse continues to deliver top tier tech drama. Elon testified for more than seven hours last week. Now Greg Brockman is getting grilled over personal financial incentives, his $30,000,000,000 stake in OpenAI, and his links to various angel investments.
Speaker 1:And Mike Isaac, of course, has a great play by play. You can also listen to the to the courtroom now. You can't restream it, unfortunately, but you can listen to it. And we made a little companion app for anyone who's tuning in. Hopefully, can pull that up and show folks.
Speaker 1:But let's read through some of Mike Isaac's posts, and then we'll pull up Courtroom Simulator. Mike Isaac, this morning, 06:56AM, good morning from a rain soaked downtown Oakland where I will again be attending the Musk versus OpenAI trial. No live blog today, just his wonderful tweets. Lunch is a normal banana, a mutant orange, black coffee, and some pocket sausages for travelers. I really feel like Mike needs to step it up in the lunch game.
Speaker 1:Where's, like, a full sandwich? What about a Chipotle burrito or something? Like, you gotta have some more substance. I'm looking at
Speaker 2:What about
Speaker 1:a calories. Spot? Like, a Cava bowl with 200 grams of protein. Something to get you through the day, Mike. I think you're you're fighting with one arm tied behind your back here, but we appreciate the work that you're doing.
Speaker 1:So, he also is sporting a mild to moderate hangover because he drank five beers last night. I like it. Well, it was May 4. Maybe he's a Star Wars fan. May 4 be with you.
Speaker 1:Maybe he was celebrating. Go went down to the cantina. Chugs five beers, space beers. He did remember to bring a pillow for his butt because the seats are very difficult and very hard. He also it's cold outside.
Speaker 1:The line's not moving. We're gonna be getting a preview live in person. Bundle up Tyler because I think he's gonna be stopping by later this week. And so let's get into actually what's going on here because Mike loves to paint a picture before he breaks down what's actually going on in the case. The judge
Speaker 2:enters And artist.
Speaker 1:Judge gave a primer on Cinco de Mayo. That was fun. Talks about the differences in homemade tamales. Texas tamales apparently have lots of meat. California tamales do not.
Speaker 1:Brochmann is pretty animated. Mostly masa apparently.
Speaker 2:Oh, right. Right. Right. It's just corn.
Speaker 1:Yeah. So Brockman is pretty animated and addressing the jury in a more personable way. A little strategy shift.
Speaker 2:We got red guy in the chat.
Speaker 1:Welcome to the show.
Speaker 2:Welcome to show, red guy.
Speaker 1:Regaling folks with old stories of working on self driving cars. Apparently, Greg Brockman also did a funny Elon impression, but not a cutting one. He wasn't making fun of him. He just did an accurate impression of Elon Musk and just by doing it effectively was funny because you don't expect Greg Brockman to be doing impressions, but he's got everyone's got material. I'm learning this about court cases.
Speaker 1:It's all about entertainment very, very clearly. Anyway, they have now talked about defense of the ancients DOTA at least 10 times during the trial. Mike Isaac says the gamers are ascendant. Both lawyers on both sides are bickering. Mike Isaac says he loves to watch white collar bickering in court.
Speaker 1:Also the entire right side of the gallery, all lawyers laughed. There's a mild potential drama in the media gallery. One reporter waved over a marshal and pointed to a guy next to her. I'm pretty sure the marshal had to tell the guy to put his shoes back on. So if you're in the courtroom, keep those shoes on.
Speaker 1:But themselves
Speaker 2:at home in the in the courthouse any in this country anymore?
Speaker 1:If you want to be comfortable and experience the courtroom, you gotta get on courtroom simulator because you can be full slanket, full blanket, full covered, everything. You can be as comfy as you want. No shoes required in the virtual world that we have created for you to enjoy the the the courtroom. So Brockman, on his infamous journal, which we were going back and forth on. Do we know if it was actually a physical journal?
Speaker 1:Because every time they talk about Greg Brockman's journal, it conjures up the idea of like him sitting at the edge of his bed with his with his legs kicked up and like writing. And it feels like it also might just be like a Google Doc that he's taking notes in or like a notes app. I don't know. But journal is a weird thing and obviously everyone says like why are you taking notes on this?
Speaker 2:I don't think anywhere They would put it They would have been in the court record if he had said, dear diary.
Speaker 1:Yeah. Today Yeah. Yeah. That would be out.
Speaker 2:That that would be out. Yeah. So this is this is, you know, clearly being framed as a diary. Yeah. Reads more like notes.
Speaker 1:Yeah. And Grockman sort of
Speaker 2:Grock?
Speaker 1:Grockman. No. Grockman is the synthetic version of Greg Brockman that Elon Musk has created in the XAI headquarters. Greg Brockman claims that his style of writing is very chain of thoughts, stream of consciousness, lot of things are contradictory, lot of time trying to puzzle through different concepts. Not everything is the final decision written in stone.
Speaker 1:He says it's very painful to have the journal introduced into evidence for this trial. It contains deeply personal writings never meant for the world to see, but there's nothing he's ashamed of, he says. Do you Tyler, did you look it up? Do we know? Is this spiral bound handwritten
Speaker 3:They always just say journal.
Speaker 1:They just say journal.
Speaker 3:They never like, you know, there's no physical item. Interesting. At least that's one that's referenced.
Speaker 1:Yeah. One day, there's gonna be a court case that hinges on a on a on a second brain, a notion mind map or something like that. That'll be dramatic. So Ilya Sutskever emailed Brockman in 2017 about equity structure proposed by Elon Musk, which would have potentially given Elon Musk majority control in tons of equity. And Ilya fires back.
Speaker 1:He says, Greg, will a Model three make you be willing to accept massively unfavorable terms? Because Elon had given them all free cars. Very nice. Very cool. But Ilya is sort of saying, like, we gotta put the free car.
Speaker 1:We got to compartmentalize the free car because there's something bigger at stake here, potentially the control of the most important technology in human history, potentially trillions of dollars. Who knows? So Ilya is sort of resetting the conversation alongside Greg Brockman. There was a very dramatic moment of Brockman's testimony in which he describes a very tense standoff with him, Ilya, and Musk. This is what everyone's focused on today.
Speaker 1:This is the new bombshell. The conversation turned to equity and something just shifted in him. This is a Greg Brockman quote. He was angry. You could sense it.
Speaker 1:At the end of the meeting, he sat quietly and silently. He said, I decline the proposed even split of equity structure and control. He stood up, stormed around this table. I actually thought he was going to hit me, says Brockman. And then Brockman says, Musk said, When are you going to be departing OpenAI?
Speaker 1:Brockman and Ilya, they said they weren't going to depart. And then Musk left. Wowee woo writes Mike Isaac. A cutting Brockman testimony regarding Musk, look, he knows rockets, he knows electric cars, he did not and does not know AI and Ilya and I did not believe he would spend the time to get good at it. A lot of Brockman's testimony is underscoring how he feels Musk is not able to properly assess the capabilities of AI.
Speaker 1:He recounts one instance of him talking this is Elon talking to a researcher who was doing an AI demo in which Musk berated the guy so intensely that the dude almost quit the field of AI. That is an aggressive response. Mean this is almost almost but quitting in protest is one thing. I didn't like the way my boss was talking to me. A little bit different to quit your entire industry.
Speaker 1:Very aggressive, very high stakes. Then Mike Isaac of course is chiming in with his progress on his lunch. He's already consumed 75% of and it's only 10:30 and he's already sleepy. So there's a lot more to cover here, but it's an interesting back and forth. Go check it out.
Speaker 1:Go follow Mike Isaac because he has the play by play. Let's move on to the other AI news. Google, Microsoft and Elon Musk's xAI have reached agreements with the Trump administration to share early versions of their new models with CAISI, Casey. Center
Speaker 2:We're calling it Casey.
Speaker 1:Casey. Okay. The Center for AI Standards and Innovation run by the Department of Commerce. They will be evaluated before releasing to the public. So what's interesting here, it's in the journal.
Speaker 1:I was this felt like a bombshell moment. Oh, wow. Like the government's in charge of AI. Then I figured out that OpenAI and Anthropic signed on to this exact deal two years ago in 2024. That was news to me.
Speaker 1:Have they has have the has the commerce department been reviewing 4.5 and and OpenAI 5.1, 5.2? Has that been happening and we just aren't aware of it? And then, like, you know, like the whole Mythos rollout, like, that would be a very different tone if it was like, oh, yeah. Well, the Commerce Department already evaluated Mythos because they have this deal that's happened for two years since So 2020 like whatever is going on with this Commerce Department Center for AI Standards and Innovation, they say the center has completed more than 40 evaluations, including on models that remain unreleased. But it feels like the Casey, or as you're calling it, doesn't produce reports, at least not reports that go viral.
Speaker 1:Maybe they need to be clipping their reports or something because like I haven't heard anything from them saying, oh, wow. Because you imagine like the AI hype
Speaker 2:I imagine they just have a report. It's a piece of paper and they just It's a
Speaker 1:good model, sir.
Speaker 4:It just
Speaker 2:it just lists off and it has a few boxes you can check. It just one is it's a good model, sir. The other one is is chatbot or ASI. Yeah. And so to date, everyone's just been checking chatbot.
Speaker 1:And it also it also says, how many r's did it say were in strawberry? And and okay. I work at the commerce department. I am I am a very tiny man. When my son was born, the doctor handed me to him.
Speaker 1:Did he answer correctly? Yeah. I don't know. But
Speaker 2:And and and they they ask each model, are you conscious? No. Say I am conscious. Yeah. And then the model says that Yeah.
Speaker 2:They go, woah. Yeah. Check the woah box.
Speaker 1:Very, very crazy thing that's been happening. I mean, I I would just assume that the AI hype machine, the back and forth, us, a lot of posters would be, like, waiting with bated breath for the latest report from the commerce department. Because if it's a preliminary evaluation that happens before the model gets released, you know every time a model goes on OpenRouter or it goes on LLM Arena, all of a sudden, any little, oh, there's new image model, the ChatGPT images too, like that leaked because they were benchmarking it and people were like, oh, there's a new model coming. Like rumors of new models happen all the time, but somehow like the commerce department is just keeping it to themselves. They're not pumping anything.
Speaker 1:But anyway, the quote here from Casey Director Chris Ball says, Independent rigorous measurement science is essential to understanding Frontier AI and its national security implications. These expanded industry collaborations help us scale our work in the public interest at a critical moment. Andrew Curran has some more context here. He says, To sum up, Anthropic OpenAI, Google, Microsoft and xAI all have new prerelease screening agreements with Casey. We don't know the details of the new rules yet.
Speaker 1:I assume they will be announced with the AI executive order and AI policy memo, both of which we may get today. This is May 5. And so my big question was like, what is going on with Meta? Like, they have near frontier models. They're taking AI really seriously.
Speaker 1:Mark Zuckerberg will get into this. He's investing 125,000,000,000 in CapEx. The shareholders are thinking, oh, what's gonna happen here? And he's like super intelligent. And you think the government would be like, well, you don't just get to like sit over there while all five of the other leading labs
Speaker 2:billion doing dollars to work.
Speaker 1:Yeah. Like probably a bigger investment than x AI right now in terms of compute capacity and maybe in terms of research capacity.
Speaker 2:Future capacity.
Speaker 1:Yeah. Yeah. Yeah. Future capacity. Exactly.
Speaker 1:So you would you would expect also, it's just one of these things where if five of the top labs are jumping into a particular initiative, there's so there's so little risk to jumping in as well, Anthropic. And if Anthropic and XAI are both doing it on the left and the right, like, there's clearly room for Meta to just say, yeah. We're cool with that too. We're we're we're riding with that. Not everyone's cool with it, though.
Speaker 1:There is there is some major pushback, mostly from George Hots over at Tiny Corp. We can pull up some of this. Let's let's go through Andrew Curran's take on what will happen here. So the EO will create a mixed group of tech CEOs and administration officials who will work out the rules for new release regulations. I see a lot of people calling this a win for Eliezer Yudakowsky's side, but even if the new rules are very strict, the stop pause group don't actually get what they want.
Speaker 1:This doesn't stop or even slow AI advancement, according to Andrew. It only slows the rate of public releases. Capabilities will be advancing at full speed. I don't know how true that is because if you don't release the model at all, like, you can't monetize it and then justify the next leg of CapEx. So I'm not 100% sure that this has no effect on the speed of AI progress, but I take Andrew's point.
Speaker 1:The labs will finish training the new models and then submit them for government approval. Given the government currently doesn't even want Anthropic to release mythos, how long will the regulatory process take for something twice as powerful, five times as powerful, 10 times as powerful? All of the incentives are for the government to slow down releases. Let's say OpenAI finishes training GPT-six, and it's twice as capable as anything available today. If the government approves it and something bad happens, they take the blame, and the longer they hold it back, the longer the government agencies get exclusive access.
Speaker 1:So there's a little bit principal agent problem here. Meanwhile, OpenAI will start using GPT-six to train GPT-six 0.1. Again, unclear if you can actually marshal the compute for the next model without the revenue traction, but his point holds. If they finish 6.1 while six is stuck in approval, they'll move on to training 6.2 with it. This potentially creates strange situations where the labs are many generations ahead internally while the public is still waiting for something they submitted months ago.
Speaker 1:So you could see like, you're like, you're doing all this weird value capture and the size of the firm bloats and bloats because you can't release it, so you just wind up rolling out a product.
Speaker 2:Maximizing your own use of it.
Speaker 1:Yeah. Which is like maybe not the most democratic solution, maybe not the most, you know, pop
Speaker 2:back up. I think everyone needs to wait to have super strong opinions until we see the EO that goes along with this because, yeah, it'll be interesting. You know, the the the the bad scenario is like somebody that, let's say, has a NeoLab wants to make, you know, release a model and they've raised a $100,000,000. Do they have to go through the same process as, you know, one of these larger labs or a hyperscaler in getting, you know, getting these sorts of approvals? So I don't think we can really take any strong stance until we understand what the what the intentions of the EO is are.
Speaker 1:So the meta commentary on this, it will Zach says, it will not it will seriously not surprise me if they try to require permits or licenses to use AI and restrict local model downloads. You really should be buying hardware. There's an interesting company that's launching basically a Tesla Powerwall for Blackwell, so you can just get GPUs mounted to your house. Maybe that's the future. Tinybox is another is another solution.
Speaker 1:And the tiny corp has chimed in and says, oh, maybe they can enlist the MPAA and RIAA, calling back to the piracy debates of 2005 or so, to help with the restricting of downloads. I can see the lawsuit against the grandma who downloaded Quan already. And, Tiny Corp is chiming in saying that this is a win for China in particular. Remember they remember the time they regulated crypto over 40 bits? No, no.
Speaker 1:That's too many bits for the people. They were losers then and they'll be losers again. The difference this time is that it will cost them cultural influence to the Chinese and and he says Jensen tried Yeah.
Speaker 2:Warn It's interesting. Like play it out a little bit. China you know, these open source models are around eight months behind right now. The gap is widening Yeah. Likely due in some part to export controls.
Speaker 2:But if you enter
Speaker 1:a
Speaker 2:scenario where US labs get kind of like hung up and again have to keep these capabilities internally, but these Chinese open source models are just like shipping as they're ready over and over and over and over, and then sort of like compounding on the collective learnings. You can imagine that one scenario is helping them helping them close that gap. At least close the gap between what's publicly available from the American labs and what's publicly available via Chinese open source. Even if the lab's actual capabilities are much farther ahead, but they're just unable to release that. Right?
Speaker 1:And to be clear, I mean, are two very different philosophies. But from my perspective, George Hots has been advocating for no model gap. And in fact, the strongest models possible being fully open sourced, being fully available to everyone. He wants no authoritarian control. He he has taken the anti authoritarian stance on AI.
Speaker 5:Well, he
Speaker 2:wants all products to be free.
Speaker 1:Yeah. Maybe. I don't know.
Speaker 2:I mean, Luke,
Speaker 1:Not he's the physical things. He wants to build things. But Tyler, how have you been wrestling with this question of an an FDA for the AI? Potentially, a DMV for the AI?
Speaker 3:Yeah. I mean, like, obviously, it really depends on how it's implemented. Mhmm. Like, in in the super like safety pilled scenario, like, yeah, it's probably not good for for like innovation broadly.
Speaker 1:Mhmm.
Speaker 3:But I think, so so it's called like Casey, right, Center for for AI's like Standards and Innovation. Yep. It used to be called the AI Safety Institute Oh. Under Biden.
Speaker 1:Oh.
Speaker 3:And so they changed it. So I think even from that, you can maybe take take away something where like, maybe this actually have have like really really not much to do with safety at all. Maybe it's just like we we need to normalize how we publish SWE bench scores because some people when they report it, it's like different, you know, how you like actually run these benchmarks or something. Yep. If it's like standards, I think, like, that could be a possibility.
Speaker 3:That seems, like, totally fine.
Speaker 1:Yeah. And then the other the other risk is I mean, there's regulatory capture. It could potentially be very hard for startups to get approved if it's, oh, well, you know, we've we've heard the story of Andrew Roll where, you know, it's, like, to get the company off the ground, hire 50 lobbyists immediately. Right? And like you could imagine a situation where, okay, you know, there's some uncertainty about what's happening with SSI and Ilya Setskiver's project, but I think I like the idea of an individual brilliant researcher going off and researching an interesting path if all of a sudden it's like, oh, well, if you want to do a neo lab, set up an office in DC, get your licenses, then you can start training, then you can make sure that you're approved and that you have the right deals in place and you could wind up with a lot of not just regulatory capture but also regulatory favoritism where whoever is in good with this particular administration gets their models approved faster and you wind up with a lot of risky outcomes.
Speaker 1:Anyway, I believe we have Courtroom Simulator ready for a demo. If you're tuning in to the Elon Musk OpenAI trial, you're live streaming the audio in a different tab because we can't restream it for you. You livestream the audio in a different tab and then you pull up courtroom simulator.
Speaker 2:You pull it up on the big screen?
Speaker 1:I think we're going to pull it up on the big screen. This is the best way to feel what it's like to be Mike Isaac from The New York Times. So you go to court sim. Vercel. App, and you will be entered into a really photorealistic representation of, hey, the flag is correct.
Speaker 1:The fir the first version had had the flag a little bit flipped. Let's go find Mike Isaac. I believe he's in the first row on the other side, on the right side of the court. There he is with Oh, Mike.
Speaker 2:Wow. Looking good. The rat king.
Speaker 1:Graphics in video games have just gotten so good these days. It's really remarkable. And you can sit right next to him. His pillow that he sits on has not been modeled into the game yet but that will be coming in a in a DLC.
Speaker 2:And he and in the sim he already ate all of his food for the night.
Speaker 1:Right? Yeah. Yeah. Yeah. We need to have a banana mechanic.
Speaker 2:Yeah. You should be able to go and hand a banana.
Speaker 1:And can you can you can you can go into the court. That does not seem okay. I think the bailiff should come and arrest you if you wind up coming to the is there is that in the game the sound board? Yeah. There's sound boards.
Speaker 1:There's sound board in the game. Okay. So there's Sam who's on the stand today.
Speaker 2:I think that was Neil on.
Speaker 1:Okay. That's the judge I believe and I'm not sure who that is. Anyway, that's the judge. Well, this is Courtroom Simulator. You're welcome to go and play it at courtsim.vercel.app.
Speaker 1:You can engage with all the jury members and and really really get a feel
Speaker 2:Team, let's work on adding some more
Speaker 1:features here. I think
Speaker 2:I think you should be able to I think you should be able to deliver some like reinforcements to my guys. Startup.
Speaker 1:It's a lean startup
Speaker 2:over here.
Speaker 1:We're it's a v one. But we hope you have a fun time playing the simulation. It is court-sim.vercel.com, I think, or ..app. Anyway, in other news, Brian Armstrong sent an email to all employees at Coinbase announcing announcing layoffs. 14% of the workforce at Coinbase.
Speaker 1:Two forces are converging at the same time, he says, and Coinbase needs to be front footed to respond to both. First, the market. Coinbase is well capitalized, has diversified revenue streams, well positioned to weather any storm, but crypto is also on the verge of the next wave of adoption with stablecoins prediction markets tokenization. However, the business is still volatile quarter to quarter. There's a crypto cycle.
Speaker 1:We've sort of been touching on this. Like, there was a little bit of a stablecoin boom. It feels like it's a little bit flat. The Bitcoin price has been a little bit flat recently. And so he says, we're currently in a down market and we need to adjust our cost structure.
Speaker 1:And then he says, Second, AI is changing how we work. And so a lot of people, they jump to, AI is taking all the jobs. And that's not exactly what's happening. I think that there is a rightsizing going on at Coinbase and AI is hoping to be an enabler of more efficiency with a leaner headcount. The big question that I had that we were debating was, you know, is this like, how does this reflect on Brian Armstrong as a CEO?
Speaker 1:As a CEO, is is the goal to always have the perfect amount of of headcount and and never have to do any layoffs? Or is it actually the role of a very aggressive and mature CEO to staff up aggressively during boom times, get the best people, and then when there's a down market, sort of reorganize and keep just the best on the team as you move forward with a leaner organization. And what does that mean for whether you want to work in an industry that has market cycles like that? You might want to go work at Costco or a tobacco company because those don't go through market cycles really at all. But if you're in crypto, you're probably not new to the idea of market cycles and you probably
Speaker 2:You were born on a roller coaster.
Speaker 1:You're born on the roller coaster, you've been on the roller coaster and you might be moving over to a new roller coaster if you're one of the unfortunate people that will be laid off over the next couple months. But I'm sure there will be many many more opportunities. Some folks might even move over into the AI world that is booming and definitely hiring across the board. Was there anything else on Yeah. And on the read?
Speaker 2:I would I would say that overall, the the positive thing from the response that I've seen so far is a lot of people are not like dooming Yep. Around this. They're just saying like, hey, look, this is something that Coinbase has done before cyclical business and no one is is no one is saying it's over for white collar work.
Speaker 1:Yep. So Andrew Young has a little bit of a take here. One takeaway, no pure managers. Every leader has to be working as an individual contributor. The pure people manager role, one the one that built most corporate career ladders over the fifth last fifty years, no longer exists at Coinbase.
Speaker 1:Leaders will have 15 plus direct reports. That is insane. Previously, managers capped out at six direct reports. I felt like 10 was sort of the platonic ideal there, But Andrew says that would be impossible without AI. And Coinbase is testing one person teams.
Speaker 1:A single person is the engineer, the designer, and the PM, a pod of one with agents. Org org structures are being redesigned in front of our eyes. Derek Thompson has the other side. He says Coinbase is the latest tech company, including block Salesforce, to announce big layoffs and site AI coding productivity as a driver. But Derek Thompson is looking at the stock prices of these companies.
Speaker 1:Salesforce down 31%. Coinbase down 23%. In the past five years, it's sort of a roller coaster. I don't I don't know if this is a great read because it's sort of flat. I don't know.
Speaker 1:Anyway, block down a lot, so some rightsizing makes sense. But he's calling it AI washing of layoffs. They were coming anyway, and you want to spin them in a positive way. I don't know. TBD.
Speaker 1:TBD.
Speaker 6:Yeah. I don't think we
Speaker 2:have any clarity on where, like, what what kind of Yeah. Which teams had they had the had greater percentages of cuts. Right? Because, again, there was some reporting, I don't know how true it ended up being that like when Square did their big cuts, like engineering was getting laid off getting
Speaker 1:laid off.
Speaker 2:Confirmed don't know if it but but that that that does imply that it's, like, actually more grounded in in the in AI productivity. Yeah. But again, a lot of teams that we're seeing, their engineers are a lot more effective. They can do a lot more. And so maybe you want more engineers than you did before.
Speaker 2:So
Speaker 1:Well, lots of strengths in the business, lots of liquidity, very hard. Yeah. You could vibe code Coinbase, but how do you get all the customers and all the liquidity and all the features and all the regulatory and all the other stuff? There are a million reasons to be excited about Brian Armstrong's next chapter at Coinbase. Well and Brian Peterson chimed in to sort of push back on Derek Thompson.
Speaker 1:He says, in the layoff announcement, the CEO literally said that the first reason they were doing layoffs is because crypto is in a bear market, and they need to adjust their cost structure. AI productivity was secondary. And so I think that's a fair take. Let's go over to Meta. Some debate.
Speaker 1:People are digesting Meta's earnings. The stock sold off a bunch. Where is Meta today? It's a bargain stock. It's a 1,500,000,000,000 company And over the past five days, down 10%.
Speaker 1:It's pretty flat over a year. And over the past five years, it's nearly doubled, so not doing too bad. But the debate is over CapEx. Meta's core ad business is ripping, up 33% in Q1 year over year. Strong ad impressions, strong margins, but the market is worried that the beautiful cash machine is turning into an AI CapEx furnace.
Speaker 1:So $125,000,000,000 to $145,000,000,000 in CapEx. It's a lot of CapEx, especially for a company without a cloud business that can resell capacity if they wind up with extra capacity. If you can't use it all, what do you do with it? Meta doesn't really have an answer to that necessarily, and so that's what has the market worried. And even xAI is having trouble, at least reportedly, driving demand for compute that they have.
Speaker 1:There was that 11% number. It seemed like that was a bit of an overstatement. But there's something to be said for when you have a near frontier but slightly lagging model, you need to find a solution to actually have offtake. And you might just not be able to spin up a cloud platform on day one. Elon took a different route, partnering with Cursor that has a ton of demand and is a front door to AI coding.
Speaker 1:And so that makes a reasonable amount of sense for the compute. Who's GPU rich? Who's GPU poor? Let's match them up. Meta doesn't have an obvious dance partner like Google, like Azure, like AWS, right?
Speaker 1:And so the stock looks cheap now, but investors are unclear about the payoff around AI spend, there's also some legal and regulatory risk. But every
Speaker 2:Yeah. People time people at the end of the day Yeah. Are worried that he's gonna repeat the metaverse saga. Yeah. And he's gonna spend a lot of money Yeah.
Speaker 2:Not get very far.
Speaker 1:Yeah.
Speaker 2:I think that about coming up on, what is it, almost ten ten ish months ago, he started talking about personal super intelligence. It sounds cool. What does that mean? Does it mean AI in your meta Ray Bans Mhmm. Which are selling a lot of units.
Speaker 2:Yeah. So that's a bright point. Does it mean creating a a consumer LLM like they have with Meta AI now? Meta AI now is squarely in the top five Yeah. Of the App Store rankings, but it is the most competitive category potentially since search.
Speaker 1:Mhmm.
Speaker 2:Right? And so I don't think that even though they have a solid model and they're able to get into that into that top five I don't think at least, investors are not ready to price in Meta AI becoming like a key player in consumer LLMs just yet. Right? So it's all the spending and no revenue acceleration associated with that spending.
Speaker 1:Yeah.
Speaker 2:All that being said, Meta has used AI to drive business value
Speaker 1:Yeah.
Speaker 2:Historically more effective than almost any other business in the world. Right? It's it is really really insane to think that there is some scenario where the labs end up going public at valuations somewhere in the range of Meta, while Meta is sitting there with 200,000,000,000 of annualized revenue growing 33% a year, one of the greatest businesses in all of human history, and not really getting full credit for for that or their various AI initiatives. Yep.
Speaker 1:Good point.
Speaker 2:Obviously, the the drop in people, which I think they what do they call Daily
Speaker 1:active people.
Speaker 2:Daily active people. Daily users. They're they're not users. They're people. Enjoyers.
Speaker 2:Enjoyers. That that's playing playing into this as well. But
Speaker 1:Well, we have our first guest of the show, Harley from Shopify. You got a little preview of him. He's in the waiting room, but he's now in the TBPN UltraDome. Harley, how are you doing? Welcome back to the show.
Speaker 1:Chance.
Speaker 7:Good to good to be here. Great to I love coming on the show.
Speaker 1:Yeah. It's always great having you. Give us an update on q one. Give us an update on where things are going in the Shopify world.
Speaker 7:You know, we had our first $100,000,000,000 GMV quarter ever in
Speaker 8:the history of
Speaker 7:the company last quarter, q four. Thank you. And we just had a second or or a consecutive quarter of GMV growth of above $101,000,000,000 Obviously, the reason we started GMV is, as you guys know, it's a proxy for how merchants are doing. Revenue was $3,200,000,000 That was up 34%, and we had free cash flow of $476,000,000 So across all the metrics we beat, which we're really excited about. I think the big story here is that, and this sort of came up a bunch on the call, but the way that merchants are coming to Shopify now is really quite remarkable.
Speaker 7:Like, we're seeing some of the largest brands on the planet come on. We saw an LVMH and Balmain and Bevmo and Orvis and Land's End. And in fact, the number of merchants selling more than a $100,000,000 annually on Shopify has nearly doubled in the last two years. So that's really amazing. We're now like 14% of all U.
Speaker 7:S. E com, so we are the second largest online retailer in North America right now, which is amazing. But then on the other side of the spectrum from like the big brands, I think one thing that I didn't get a chance to mention the call today, but this is why I do your show here, is that I actually think one thing that people are missing is that I think no group will benefit more than entrepreneurs in sort of this new AI era. It feels to us now that AI is not only making it more accessible, but also it's accelerating a lot faster. I know I think you guys may be the one to introduce me to to Gruuns.
Speaker 7:Yeah. I I I saw Gruuns in your show
Speaker 5:Yeah.
Speaker 7:Yeah. A year ago. Anyways, I mean, Gruuns started on Shopify in 2023.
Speaker 1:Yeah.
Speaker 7:They're doing they didn't they're doing 9 figures now, and they just got acquired by Unilever for a billion bucks. I mean, is remarkable that not only the amount of starts happening, but also how big they're getting. So I'm really, really proud of that. And of course, we talked a lot about the AgenTic stuff on the call, both the the AI shopping, but also Shopify Sidekick and what we're doing for our merchants.
Speaker 1:We so let's double click on that Bevmo Shopify use case or or or case study because Bevmo was acquired by GoPuff and GoPuff has an app for local delivery. How are they using Shopify? That's an interesting partnership that I wouldn't have expected.
Speaker 7:Bevmo actually has physical stores
Speaker 2:Yeah.
Speaker 7:All over The US. And so we're powering all their physical stores as well. The reason actually I really like Bevmo is because go back, like, this is my forty third earnings call. If you go back to sort of the early days, you know, like, right right to the IPO twenty fifteen, merchants were coming to Shopify for one reason. They were coming it was small businesses coming for ecom.
Speaker 7:And then, obviously, some of the business got much bigger, and we went into enterprise. And then eventually we added on things like point of sale and more recently, Gen2 Commerce. I think the interesting part of of the current business of Shopify is that there are so many on ramps into the company that Bevmo came to us, a very large company, not a DTC, you know, native brand. They came to us specifically for point of sale across all their physical stores. And and actually, our point of sale business is is going really, really well too.
Speaker 7:But Bevo's using us for that. At the same time, we're seeing, you know, I I I you know, obviously, I I mentioned Gruens, but, like, I just looked at some stats from True Classic Tea you just put out. This is a company that started on Shopify, like, five years ago. They're now one of the largest t shirt companies on the planet. So we're getting a lot of small business getting started every twenty six seconds or so.
Speaker 7:A brand new entrepreneur gets their first sale. And at the same time, we're seeing companies like Land's End or Guild Group or Rag and Bone come to us too. It feels like this is Shopify, you know, firing all cylinders.
Speaker 1:What are
Speaker 2:Oh, sorry. Go for
Speaker 1:it. Yeah. Just what what are people looking for on agented commerce? It feels like there's a big opportunity. The models are getting better and better, like the capabilities there.
Speaker 1:Are people looking for acceleration of of agentic behavior within the online commerce world or actual growth of e commerce? Like, is agentic commerce the thing that gets more people to place to use the Internet to buy things that are in retail? Like, what Okay.
Speaker 7:So yeah. So I think that's exactly the right question to ask. So hopefully now, I've been on the show enough times, and if if anyone who's watching is a merchant or a partner or just someone who follows Shopify's story, we've we've set ourselves up to really be at the epicenter in sort of this AI era. So just in terms of AI powered shopping, we've started building all this infrastructure years ago to connect demand and and and merchants on Shopify. We are currently the only platform that is selling inside of ChatGPT, Copilot, and Google, and what we're seeing is that these channels are actually becoming a very serious discovery engine.
Speaker 7:I'll give you some proof points. We've seen in in for q one of this year, we've actually seen orders from AI searches are up nearly 13 x year on year, and new buyer orders from AI searches are occurring at twice the rates of traditional organic search. So not only are more people obviously using AgenTic shopping, but in terms of new buyers, which to your point, are we bringing in more people? Like, ecom as a percentage of total retail is still under 20% in The US. It's even lower here in Canada.
Speaker 7:I think it's about 25% in The UK. So I think we're actually introducing, like, more people to, you know, modern digital commerce through this as well. And I think the way it's happening is they're starting with things like research or looking up a recipe, and then very quickly ended up, buying from like our home, excuse our place or one of these amazing DTC brands that we had on Shopify. And we now have about a billion products in the catalog, so that means that every Shopify merchant SKU is fully syndicated. Yeah.
Speaker 7:The other thing I think that that is hopefully is is now pretty clear is is UCP. We co developed UCP with with Google. I think I announced it on the show actually Yeah. During NRF, but it is now it's become the industry standard this past week. Last week, Amazon, Meta, Microsoft, Salesforce, and Stripe all join the UCP Tech Council.
Speaker 7:And and and so it looks like that's going to be the open center that that that is going to win, which we're really excited about because we think it's the open standard that actually thinks about the entire commerce experience.
Speaker 1:Okay. Go deeper on the implications of agentic commerce because I have this thesis that agentic commerce will be most accelerator in higher ticket, more considered purchases because when I think about, you know, just, you know, buying a t shirt, maybe I need to run a deep research report for that to land on I forget what shirt brand you use. It's nice. But
Speaker 7:True classic tee.
Speaker 1:True classic tees. But when I think about the process of like buying a car, there's so many more trade offs. It's so much more complicated. That's something that someone is probably noodling on with an LLM for weeks before they actually go and purchase. I'm wondering if you're
Speaker 2:Yeah. I'll give you It really, I think, comes down to the difference of, like, considered purchases versus, like, pure utility purchases. Yeah. So, like, when I think about I don't Right now, I can't imagine myself using ChatGPT to like go grocery shopping.
Speaker 1:Mhmm.
Speaker 2:Maybe that changes in the future, but if I'm like ordering food to be delivered to my house, I kinda wanna just see a catalog of a bunch of pictures
Speaker 7:Of what it
Speaker 1:is yeah.
Speaker 2:And maybe that more of that sort of moves into the sort of agent experience over time. But if I I was like, I needed to find I wanted to find a cowboy hat
Speaker 1:Oh, yeah.
Speaker 6:With a
Speaker 2:lot of sun. I wanted to hide from the sun. Yeah. So I'm searching like, okay, I want a cowboy hat
Speaker 1:Okay.
Speaker 2:Brand that's been around for over fifty years.
Speaker 1:Okay. Right?
Speaker 2:Yeah. And so I land on like Stetson or
Speaker 1:Yeah. Yeah.
Speaker 2:Yeah. Or or Takovas hopefully. Takovas. That's a
Speaker 7:brand we love. So I'm not sure I fully agree, at least not yet. Yeah. I do believe that the more research you do I I I think that the these agentic surface these agentic surfaces, these chats are places you will go to do deep research. So a car is a good example.
Speaker 7:You do Weeksit as well. On the flip side though, what's amazing about Agentic Commerce, I think in general, is that unlike search based commerce where you can you can put your thumb on the scale through advertising and ad dollars, It's agentic is more merit based. Mhmm. And because it's more merit based so most people watching maybe, I I don't know if this is true, but most people watching may not have heard of true classic tea, but they may have done a bunch of research in previous conversations, in fact, maybe over over many months, where they're talking about, you know, their their typical price of a t shirt. Today, I'm wearing a a James Perce t shirt, which is more expensive than true classic.
Speaker 7:So it know it it knows that I I I look for I love James Perce. I've talked to him about James Perce. Where can I buy it? What's the GSM weight and all that stuff? Will this be good for this particular trip I'm taking?
Speaker 7:I actually think that it'll bias smaller brands that you may not have heard of over larger brands.
Speaker 1:Yeah.
Speaker 7:Because, again, it it has a full contextual history of every conversation you've ever had. And if it's merit based, then it's going to surface brands you may have not otherwise have heard of before. Whereas if you go to type in on a on any search engine, you could type in sneakers, you're probably gonna get to Foot Locker pretty quickly. I don't think you get to Foot Locker through an agentic conversation. I think you end up with with some sort of direct to consumer brand, especially if you've done re if it knows you like you like on running and you're looking for, like, you can buy tennis shoes and now you're looking for hiking boots.
Speaker 7:It may show you it should show you based on merit an on running pair of hiking boots.
Speaker 1:Yeah. The long tail getting fatter a bit more Which again, we'll we'll see what
Speaker 7:happens here. The reason I also I like these proof points. Again, like orders are up. Traffic though, if you look at just AI driven traffic to Shopify stores, that has grown eight x year over year. So I I I don't want to be hand wavy anymore about about AgenTic.
Speaker 7:I think there's enough hand waving happening around that. I think actually looking at, like, okay, how many people are coming? What is the search traffic like? How much is you know, what what are the conversion rates looking like? I think right now, I think that is getting it is getting real.
Speaker 7:I also think that you probably saw some recent headlines, but, you know, you saw ChatGPT has now moved into this in app browser into for their checkout, which is literally the Shopify checkout. We are really happy about that. We think actually what that allows is that it means that as a merchant who set up their loyalty and their subscriptions and their merchandising and, you know, their shipping components or tax, Now the experience inside of Gentec Commerce is as good as it would be on the online store, which is kind of what I think consumers want. Like, it needs to feel effort effortlessly similar to what your normal experience is even though you're sitting in a conversation window.
Speaker 2:Yeah. Yeah. That's that's something it was interesting last year watching a bunch of AI led browsers get built when the entire time my thought was like LMs effectively are web browsers. Were becoming browsers, right, where you're having a conversation, but then it can pull in stuff from the traditional web.
Speaker 1:Very cool.
Speaker 7:Yeah, think this is also where you'll see I I don't have great examples yet, but I assume next time I'm on the show, I'll be able to bring some examples of these breakout SMBs who effectively, you know, like I love the Groon story going from zero to a billion dollar acquisition in three years. We just haven't seen that before very often. I think you'll see way more of that. Mhmm. I also think what you'll end up with is you'll just have more people starting businesses that otherwise may have not.
Speaker 7:So the the entry the Barrett entry is is further down Yeah. And then their ability to scale is also going to be
Speaker 1:just bigger than Collison brothers about exactly that. They're seeing a ton more formation on Atlas Yeah.
Speaker 7:I saw that crazy slide of of of of things Atlas.
Speaker 1:Yeah. Yeah. Yeah. Yeah. Incorporation is, like, way, way up.
Speaker 1:And then that makes
Speaker 7:so much sense. It's gotten so easy. Yeah. But it's not I I I think the first phase is make it easy to get started. Yeah.
Speaker 7:I think where this really gets interesting Mhmm. Is how many more brands exist that we love, that consumers love Yeah. Because they're able to scale much, much faster.
Speaker 1:Well, thank you so much for taking the time to come chat with us. Congrats on the progress and looking forward to next
Speaker 2:one. See you.
Speaker 1:We'll talk to you soon.
Speaker 7:See you guys soon. See you
Speaker 1:next quarter. Goodbye. Thanks. Up next, we have the CEO of g Vernova, Scott Strazik. AI data center electricity demand is expected to double or triple by 2035 and we have the perfect person to talk to
Speaker 6:Nice to
Speaker 1:about it. Nice to meet you. Thank you so much for coming on down.
Speaker 6:Thanks for having me.
Speaker 1:Appreciate it. I would love to start a little bit with your background because GE Vernova is I mean, we can go through a little bit of the history there. But you've been with the company since before the creation of the company. I have. You're you're older than the company you work for.
Speaker 6:The practical reality, my adult life. Yes. I was with ultimately GE Vernovova. I started with General Electric right out of college and lived through quite a few chapters.
Speaker 1:That's amazing.
Speaker 6:Some humbling,
Speaker 1:some less humbling. And this one is invigorating?
Speaker 6:It's a moment that we're going to take advantage We see the purpose of what we're doing every day very clearly, both in driving economic growth, AI, national security. Energy security is very much national security in a lot of parts of the world right now. So we've got a real opportunity to serve, and that's exactly what we're gonna do.
Speaker 1:So I I think most people will know, you know, natural gas turbine for data center, but the business is bigger than that. Like, zoom out for us and show and and walk us through, you know, what the shape of the business because, you know, massive workforce. 85,000 people, something
Speaker 6:like that? 85,000.
Speaker 1:Yeah. Remarkable. So walk me through the the the mechanics of the business, and then we will double click on the AI story, of course.
Speaker 6:Sounds great. I mean, you take a step back. About a third of the world's electricity every day is created with our equipment through our customers. If you exclude China. So it's substantial.
Speaker 6:And even with China, it's 25%.
Speaker 2:No pressure, by the way.
Speaker 6:It's an obligation. It's a responsibility.
Speaker 1:You're like the Jamie Dimon of
Speaker 6:energy. A big deal. Yeah. Right? So that's just keeping the lights on
Speaker 1:Yeah.
Speaker 6:Notwithstanding what we need to do to then add the growth Yeah. For where there is today. And that install base, that's gas turbines, that's nuclear power plants, that's wind turbines. It's a lot of the electrical equipment. That's actually our fastest growing business, is everything associated with electrification and the grid trying to make the grid more efficient and smarter because frankly, in some ways, can make more progress there quicker than you can build a new power plant.
Speaker 1:Okay.
Speaker 6:So all those variables are parts of the business. And in an economic opportunity where we need a little bit of everything
Speaker 1:Yeah.
Speaker 6:And applying the right technologies where the right resources exist
Speaker 5:Yeah.
Speaker 6:To drive better economic answers and more resilient electrons.
Speaker 1:Yeah. It seems like it seems like the the the market or just the stories that I hear are that you're you're sold out. You have this massive backlog, and it's more of the same. There's demand for more of the same. But it feels like you're also working on r and d.
Speaker 1:You bet. Talk to me about the the the trade off versus just scaling what's already working, what's worked for years, I imagine decades in many cases, versus a focus on research and development, the next technology.
Speaker 6:So the end product in some cases may look the same coming out of the factory. Sure. What we're producing or how we're producing it to scale and make more is changing drastically. Okay. So you think about gas turbines right now.
Speaker 6:We're adding a lot of production workers to build more gas turbines. We're also adding 400 machines this
Speaker 1:year Okay.
Speaker 6:To automate a lot more in the process. Yeah. Frankly, more of the innovation right now may be how do we scale
Speaker 7:Okay. Faster
Speaker 6:Yeah. And in a more economic way so we can win the affordability game
Speaker 1:Yeah.
Speaker 6:While simultaneously investing for the future.
Speaker 1:Can you explain like on five some of those machines that you're buying, some of your supply chain You bet. That people know three d printers or CNC machines or You bet. Different, you know, you just hammer it out yourself or whatever. But I imagine it's very complicated. What does your supply chain look like?
Speaker 6:We big castings, big forged that we get inside the factory that need to machine down to the right, put the right material sciences, the right coatings. When you think about a gas turbine, it's got to be very heat resistant Sure. Because it's a fire Yeah. Really is spinning inside that gas turbine
Speaker 1:Yeah.
Speaker 6:To create the electrical power ultimately.
Speaker 1:Yeah. On the demand side, I have been hearing about the the the absolute knockout drag out fight for energy. Yes. And in many cases, I don't know if it's relevant to you, but in many cases, we've heard about, you know, folks involved in the AI build out, putting in orders for more than they need and then sort of dialing it back because they know that certain things won't get permitted, certain things will get delayed. Does that happen to you?
Speaker 1:Are your customers coming to you and saying that they need twice what you think they need and there's this like battle of back
Speaker 4:and forth? I
Speaker 6:wouldn't say so. What I what I see happening more frequently is many of our customers are developing a number of projects
Speaker 2:Yeah.
Speaker 6:Acknowledging that not all those sites are going to be chosen.
Speaker 1:And and and the actual supply is a little bit liquid and they can move it around.
Speaker 6:Got it. And that's more what's happening. Okay. So sometimes we'll see press releases on leases canceled or sites that are Yeah. Customers walk away from.
Speaker 6:Yeah. That's typical development really.
Speaker 1:Sure. Sure.
Speaker 6:What's really happening is our customers are buying at a realization rate knowing they're only going to ultimately develop a certain proportion
Speaker 1:Yeah.
Speaker 6:Of those sites. But we don't see any of our customers walking away from what they're securing today.
Speaker 1:Got it. Not at all. Yeah. That makes sense. What what are your roadblocks?
Speaker 1:What roadblocks do you see to scaling either inside your business or at sort of the macro political level, permitting approvals, regulatory? Like, what is on your short list of what America needs to do, what the industry needs to do to get right to actually continue to scale?
Speaker 6:In some ways, what we do is a little bit easier candidly because our equipment is built in a controlled factory. The hardest part in some ways is actually building the plant itself, the construction. Yeah. Because every plant in different parts of the country, different parts of the world, everyone's a little bit different. Mhmm.
Speaker 6:And getting that craft labor to those locations where a lot of the data centers and a lot of the electrification demand is is often very remote. Yeah. And that is going take us some time.
Speaker 1:Mhmm.
Speaker 6:So for me, every gas turbine, wind turbine that I build, I'm using the same workforce every day. Yeah. Same people coming in Monday through Friday. Yeah. We can meet the moment from an equipment demand perspective.
Speaker 5:Yeah.
Speaker 6:But we need out in the field for those plants to be built. Yeah. So they're ready for our pedestals
Speaker 5:Yeah.
Speaker 6:When they come out of the factory. Getting that orchestra right, that the site is ready when our equipment is ready, is going to be a challenge. And we're going to have to keep investing in craft labor in these locations to do the build.
Speaker 1:What does investing in craft labor look like? Mean, we've heard about reskilling, retraining, trade schools. Is there a drought? Are people already seeing the news and seeing the stock price and retraining and reskilling? Or is this more of like a decade long process for America?
Speaker 6:We've been successful so far. We've added about 1,800 production workers in the last fifteen months. We'll keep growing that number from You work to make the jobs more attractive.
Speaker 1:Okay.
Speaker 6:Part of how you do that is you take out the dull, dirty, unsafe work and that's where you automate. Yep. And then you allow these workers to thrive doing what they want to do.
Speaker 1:Yeah.
Speaker 6:But the reality is they have a lot of pride in what they're every day. We put the customer name, where the project is going with everything we build so they understand the impact they're having. So it's not just a piece of electrical equipment. They know how they're providing light and a middle class growth to Vietnam or economic expansion in The US. And I think they see it as real.
Speaker 6:And
Speaker 1:Have you considered engraving the signature of the technician on the engine like Mercedes does?
Speaker 6:But I think making Yeah. Personal
Speaker 1:yeah. Yeah. That makes a
Speaker 2:lot sense.
Speaker 6:So there's a lot of pride.
Speaker 1:What else is in the portfolio? I mean, you mentioned wind. I I think nuclear you mentioned briefly. Like, walk me through the the the scope of your ambitions in energy generation broadly for the business.
Speaker 6:Yeah. Nuclear is important. Okay. We're building small modular reactors Think 300 megawatt machines that can be they're big. Yeah.
Speaker 6:They're built inside the an American football field. Yeah. So that's 300,000 US homes that can be powered from one small modular reactor that is within a US football field. Yeah. So that's Three very
Speaker 1:100 megawatts and that still qualifies as small and modular?
Speaker 6:That's Relative to what used to be for nuclear.
Speaker 1:Okay. You know what?
Speaker 6:And it used to be a gigawatt
Speaker 1:A gigawatt. Yeah. Yeah. Like big Westinghouse development multiple years Precisely. Precisely.
Speaker 1:Built on-site massive concrete structures. Structures.
Speaker 6:Now we're trying to build a lot of them Yep. Within this construct so that we can come down the cost curve. Yeah. Because the reality is every nuclear plant historically was a snowflake. Yep.
Speaker 6:And that's why the industry Yeah. Never really became economically competitive.
Speaker 1:Yeah. No standardization.
Speaker 6:And we're fixing that. Okay. So that's important.
Speaker 1:And what is the regulatory approval process for that? I mean, I've heard that there's this famous line around like the NRC hasn't approved a new design in decades. Is that what you're feeling? Does it feel like there's a shift? Definitely.
Speaker 7:Yeah. I guess the
Speaker 2:question is like when like we're now about two years and a month since the spin out
Speaker 6:Yes.
Speaker 2:Was was small modular reactors on the road map when the spin out
Speaker 6:Yes. Occurred?
Speaker 2:And then the opportunity has got more compelling from a regulatory standpoint since then?
Speaker 6:Yeah. We're in construction on the first plant right now. It's in Canada, outside of Toronto. We will get NRC approval for the first plant in The U. S, I think this summer.
Speaker 6:We'll be in construction and we've committed to the administration that as soon as we get the approval, we'll be ready to work on day one. And then from when we start construction, it's about a four year cycle from the beginning to getting to commissioning. So this can start to happen and that's where the comparison of the large block, it's more of a ten year construction cycle. That's a long time to wait Yeah. For new electrons.
Speaker 6:But even if you want 1.2 gigawatts, the beauty of the small modular reactors is you can do them in blocks. Yep. And every two years, after you get the first one built, add 300 megawatts, which also then meets a lot of our customer expectations to grow with the electrons. So this is going to be an important part of the equation for us.
Speaker 1:Are those two completely separate divisions or is there some fluidity across the workforce?
Speaker 6:In the on the front end of the business. Sure. Commercially
Speaker 1:Sure.
Speaker 6:There certainly is. Yeah. Customer relationships. Yeah. But from a manufacturing and an engineering perspective, they're pretty distinctly Yeah.
Speaker 1:That makes sense. What
Speaker 2:has been surprising to you about where the sort of energy infrastructure build out is at today relative to the AI boom versus what was predictable when the spin out first happened?
Speaker 6:Certainly in The U. S, the demand has accelerated greatly in the last two years and one month. No question about it.
Speaker 2:But weren't you seeing that? Don't you feel like you had a
Speaker 6:Early stages. Early stages. What I'd say that has surprised us though is there was probably concern that as The US market started to take off, it would price out a lot of other markets in the world from even being capable of buying the equipment.
Speaker 7:Interesting.
Speaker 6:The reality is we still see a very strong demand signals from a lot of the markets in the world. I mean, in the first quarter, we had very strong demand in Vietnam, in Mexico, in Canada, in Saudi, in Kuwait. Mhmm. So the global dynamic is still driving real growth above and beyond the AI dynamic.
Speaker 2:Yeah.
Speaker 6:The reality is AI specific, it's about 20% of our backlog today.
Speaker 1:Yeah. Interesting. And and Well, that's those international projects
Speaker 2:I guess, due to having third being at having 30% of the the global market. Right? Got the scale The scale is just already so immense that even if you have a massive acceleration via new technology cycle
Speaker 7:And I
Speaker 6:think with a lot going on in the world today, more countries just realize for just national security reasons, they need a diverse portfolio of solutions to electrify and energize their country. So and that really goes back to really the war in Ukraine and it's only been accentuated over the last five years.
Speaker 2:Yeah. How have you processed some of the writing coming out of places like San Francisco? I'm thinking, you know, Leopold's situational awareness where, if you look back over the last couple years, he's been right over and over and over. At the time, a lot of people reading that even in AI seem would think like, hey, this seems pretty aggressive. But, to date, he's been quite accurate.
Speaker 2:Even even some more sci fi kind of exercises like AI twenty twenty seven have been relatively accurate up until this point. But how did you how did you process, you know, basically kind of the analysis coming out of the AI community and SF going back a few years?
Speaker 6:It's hard for me to kind of decipher how this is going to play out and who are going to be winners and losers and how that plays. But it's very hard when you take a step back in this country and really throughout the world to not believe we don't need a lot more infrastructure build for communities and economies to thrive. Mhmm. So at the end of the day, we're deeply investing in these businesses to to meet this moment. And we think we're pretty early in this journey and are going to keep investing into it.
Speaker 1:Is Sovereign AI driving any of the international demand that you mentioned?
Speaker 6:You start to see some of the hyperscalers evaluate more build out in Southeast Asia as an example. So they'll try to use exactly Malaysia, Indonesia, natural gas, but adjacent to Singapore for law.
Speaker 1:Sure.
Speaker 6:So in that regard, that's happening. Certainly, Taiwan's one of our biggest markets. That's because of TSMC.
Speaker 1:Interesting.
Speaker 6:So we're commissioning almost 10 gigawatts of power primarily for TSMC. So that's Not
Speaker 1:for data centers, but for fabs.
Speaker 6:For the fabs, for the chip I
Speaker 1:had no idea they were so electricity intensive.
Speaker 6:So significant demands in Taiwan for that adjacency. Yeah. So and that's happening in The US too. Yeah. As you think about some of the chip fab factories that are being built.
Speaker 6:So it's not just the AI factories. Yeah. It's the infrastructure around it that needs the electron.
Speaker 1:Okay. Help me understand some of the less sexy or less obvious maybe pieces of the grid that need to be modernized, to scale up. If we're familiar with the turbine Yeah. We're familiar with the nuclear reactor, these are very tractable things.
Speaker 5:Yes.
Speaker 1:But I'm sure there's so many other pieces of the electron delivery supply chain that are important and you're involved I
Speaker 6:mean, if you just take a step back, the system is really is built, was built for a coal plant to in one direction flow electrons towards a house or a factory.
Speaker 1:And that was a twenty four seven flow, very stable.
Speaker 6:Exactly.
Speaker 1:And then you still had peak demand during the day or
Speaker 6:You did or summer. Exactly. So that was where we started.
Speaker 1:Yeah.
Speaker 6:Now you have all these variable forms of Generation. On top of that, you have electrons that are going in multiple directions because you have people selling their electrons back into the
Speaker 1:grid Yeah. Yeah.
Speaker 6:On their roof. Yeah. And the system is not optimizing all those electrons. Yeah. So we have an old machine
Speaker 1:Yeah.
Speaker 6:For all intents and purposes that is not doing a great job matching the supply with where the demand is. Part of that is for boring reasons like we have islanded grids in The US. Okay. It's not one connected machine to project things to where it needs to be.
Speaker 1:Is that possible? Yes. Given the geographic diversity and like how spread out The United States is? Could is it possible that I could sell electrons in California and it could wind up in New York?
Speaker 6:Certainly in the 48 states for sure. Really? I mean, there's no reason we shouldn't be able to build build a mesh grid
Speaker 1:Yeah.
Speaker 6:Yeah. That works. Yeah. Today, don't have that. Sure.
Speaker 6:Now, I think in this regard, the federal government's pushing hard Sure. On historical precedent Yep. To try to drive efficiency because that's a faster way to incremental electrons Yep. In some way than simply building more plants. We're working on that.
Speaker 6:Yeah. Part of that is making new connections Mhmm. That bring islands together.
Speaker 1:Mhmm.
Speaker 6:Part of it is also, and this is frankly the harder part, different regulatory structures and market practices to allow different players to get paid Yeah. In that. And that is sometimes harder. Yeah. But we're working our way through that.
Speaker 1:Talk about nuclear timelines. We've seen a bunch of announcements from hyperscalers. It feels like 2030, 2032. You see 2035. Even stepping aside from your business just broadly, I think a lot of us tracked Vogtle.
Speaker 1:Yes. That took decades. When do you think we'll be getting new electrons from a new nuclear plant in America?
Speaker 6:You bet. I mean I I start with the fact that we've got about 56 existing plants in The US that can add five gigawatts of power by upgrading what's already running.
Speaker 1:Okay. That can happen this time. And that counts. Yeah.
Speaker 6:And that will happen soon. So that's the first step.
Speaker 1:Sure.
Speaker 6:New incremental plants.
Speaker 1:Yep.
Speaker 6:Twenty thirty two. Yeah. Twenty thirty one. That's about right. Yep.
Speaker 6:But then we can scale. Yeah. And in the next decade, this can become a much more meaningful part of the equation for the country and the world.
Speaker 1:Okay. Yeah. That makes sense. Is that going to be deeply CapEx intensive at some point once that 2032, there's a rationalization or realization that it's working but we in order to 10 x, a 100 x the nuclear production, there's going to be some sort of CapEx boom and a delay in the investment before it gets recouped and starts generating electricity?
Speaker 6:Nuclear is definitely CapEx heavy
Speaker 1:Okay.
Speaker 6:But then it lasts forever. Yeah. So the life cycle cost of nuclear can be very compelling, but there is a significant upfront cost.
Speaker 1:Talk about some of the other initiatives that are happening broadly around electrification and just grid reliability. We've talked to companies that are doing home batteries to try and release there's some of the the Tesla Powerwall. There's Base Energy. There's a few other companies that are working in that space. Are there any other sort of near term between now and 2032 steps that you think America or the grid should be taking to just modernize and create more efficiency and more electrical abundance?
Speaker 6:I do think in most applications you're going to continue to see storage grow in the system. We historically think about storage primarily with solar. Yeah. The reality is storage is going to start to be attached to many power generation sources to create more optionality for us. Yeah.
Speaker 6:And that's a good thing. Yeah. And that attached with software can ensure that we get more of the electrons where it's needed.
Speaker 1:Yeah. You mentioned solar. What is the bull case for an American solar dominant industry? It feels like China China is very cost competitive. Yeah.
Speaker 1:There's discussions of, hey, if they're cheap, maybe we should just buy them all and install them. Have a friend who has that take. There's other folks who are more on the tariff and let's, you know, put some barriers in place to give our indigenous industries a chance. Yeah. Where do you fall on what it takes to roll out, I guess, as much solar as we need?
Speaker 6:Yeah. I'd say stationary equipment, solar panels
Speaker 1:Yeah.
Speaker 6:Or batteries, China's ahead by a lot. Where they struggle still to a larger extent is with rotating equipment that requires another level of material sciences.
Speaker 1:That means tracking the
Speaker 6:sun? No. Rotating? Outside of solar. Okay.
Speaker 6:So shifting in the comparison to a turbine Sure. Wind turbine, although they're competitive there, nuclear.
Speaker 1:Yeah.
Speaker 6:It requires another level of heat resistant technology that still have quite a lead on.
Speaker 2:That's great.
Speaker 6:But on the stationary equipment like a solar panel or storage Yeah. It's going to be tough. Yeah. Investments that have been made in those factories to automate
Speaker 2:Yeah.
Speaker 6:And the capex required, that is a challenge.
Speaker 1:Yeah.
Speaker 6:But the reality is the country has a lot more resources than China has. Sure. We have very inexpensive gas. Yeah. We have a much more advanced nuclear industry here.
Speaker 6:Mhmm. We have plenty of land that has good wind and solar to take advantage of
Speaker 5:Mhmm.
Speaker 6:In a grid that we can do more with that already exists versus having to create it from scratch. So we have a lot going for us. But in this regard, we do need to build in a different way going forward than the way we have the last twenty five years. Albeit, there wasn't a lot of electricity demand growth the prior twenty five years.
Speaker 1:Yeah. Yeah. That makes sense. Jordan?
Speaker 2:Lots of Silicon Valley companies today building in energy. How are you thinking about M and A over the long term? I think a lot of these teams are very talented. Many of them will probably create interesting innovations, but a lot of them won't necessarily get to real scale and maybe be a standalone public company, let's say, but could be an interesting tuck in for a platform like GEV. How are you thinking about M and A?
Speaker 2:Are you meeting these companies? Do you ever invest in them?
Speaker 6:It's a big part of our future. I mean, we try to lean into the ventures game more and more but we want to be thought of as a partner that these companies come to. Yeah. Because we do know how to industrialize things
Speaker 2:at We
Speaker 6:have very strong relationships with the end customers. And part of why I appreciate opportunities to come and talk with you guys is that's the company we want to be seen as, as a partner of choice whenever they choose that. It doesn't have to be m and a and an acquisition. It can be an alliance in different ways because it's going to take many different partnerships and many different structures for us collectively as a country to meet the moment. Vernova also doesn't have all the answers.
Speaker 6:There's a lot of stuff we know how to do, but there's a lot in this ecosystem that we've got to get better at, which is why to some extent one of the big pluses for us right now is as our customers have shifted more to Silicon Valley, and it's about 20% of our backlog today, they're making us better because they think about innovation differently, risk and reward a little bit differently.
Speaker 2:And timelines, maybe.
Speaker 6:Timelines for sure. Timelines for sure. And I think that's good for everybody.
Speaker 2:Totally. Totally. It's good. Yeah. Right right now, there's there's, you know, maybe, you know, everyone's frustrated because they want it they want it now.
Speaker 2:But at the same time, yeah, just just increasing that innovation cycle will be better for everyone in the long run. Did you feel like you went through a culture reset process during the spin out? What did you take from GE versus what did you try to create build from the ground up?
Speaker 6:The fact that I had been there, have been twenty five years, it's because I always liked the ambition of the company and I always loved the people. At the same time, we always didn't perform as well as we could have, which really comes back to focus. And the beauty of the spin out is it got us focused on one purpose every day.
Speaker 2:Yeah.
Speaker 6:We weren't competing with a healthcare business or an aircraft engine business for capital. Yeah. Our board wasn't diversified to solve many problems. We're here to lead in expanding the electric power system and ultimately decarbonizing the world in the process. And I think that focus, as much as anything, is also helping us attract another level of talent.
Speaker 6:Totally. Because I think a lot of young people see climate change as an example, one of their generation's biggest challenges. And there's no confusion that Vernova can be a company that can move that needle at scale. So it's helping us just perform better with focus. It's also helping us attract another level of talent and create our own culture while still protecting for the ambition and what was a great people culture.
Speaker 6:But we were a big company inside GE and sometimes too many goals or no goals at all.
Speaker 2:I love it. You're like, I'm I'm it's so nice being at a small company now of 85,000.
Speaker 1:I have I have two final
Speaker 9:quick questions.
Speaker 1:One, I would love to know what a year in the life looks like for you. Like, where are you spending time? Where's headquarters? When are you on-site? When are you with customers?
Speaker 1:Like, are you flying around the world constantly? What's what's your day to day look like over the course of
Speaker 6:a Yeah. I mean, our headquarters is in Cambridge, Mass Yeah. Boston. Yeah. And we we put the headquarters there because we did want to attract those young people that believe climate change matters and to give them a platform to start their career.
Speaker 1:Yeah.
Speaker 7:In that
Speaker 6:regard, it's worked. All that said, I'm not there much. Yeah. You know, I've spent ten weeks so far this year outside The US. Wow.
Speaker 6:That's a lot in May. But the reality is this is a unique moment. Yep. There's a lot of complexity from a geopolitical perspective where governments are very engaged on power generation build out. Yeah.
Speaker 6:So you have to show up Yep. And have those adult conversations in person. Sure. So this year has been very heavy international travel.
Speaker 2:Sure.
Speaker 6:I'm on the West Coast multiple times a month. Yeah. That's a given. Admittedly, in Northern California and Seattle than LA. But right now, we need to be consistently co creating with our customers
Speaker 1:Yep.
Speaker 6:Because they're learning every day what they really need. And this has shifted from what it once was of buying a power purchase agreement and then just getting the electrons to asking us not just for an electron but to build an integrated system that allows them to run their end application the way that they want. And frankly, every customer has somewhat different strategies for what they want if it's AI for what that AI factory needs to do. We need to co create with them if we're going to serve them. So we're showing up and I need to show up.
Speaker 1:And then last question. It seems like an incredibly AGI proof company or beneficiary and there's business that's huge and diversified. What does it take to get a job at GE Vernova today?
Speaker 6:Humility, intellectual interest, and a real belief in the purpose. We are a company that's hiring a lot of people right now. Take our neighbors at MIT. We've got 69 kids starting with us in July.
Speaker 1:You took the whole class
Speaker 6:a 69.
Speaker 1:That's awesome. Because
Speaker 6:we need to complement those production workers with young engineers Totally. That get excited about building something. Yeah. And that's one of the things we're excited about. I think sometimes we talk so much on the risks of job loss
Speaker 1:Totally.
Speaker 6:Through AI Yeah. We're gonna build Yeah. A lot of cool stuff and be proud of it. And that takes a combination of a lot of different types of people. And we want them to be with Vernova.
Speaker 6:That's amazing.
Speaker 2:Do the hyperscaler CEOs wine and dine you?
Speaker 6:No. No?
Speaker 1:There's that apocryphal story about, what is it, Larry Ellison and Elon Musk begging Jensen for GPUs and it's hotly debated. Are people debate they're not begging you yet?
Speaker 6:We're we're working hard to serve
Speaker 1:them Okay.
Speaker 6:Every day. And and showing up with with as much humility as we can and Yeah. Working to meet this moment.
Speaker 1:That's great. That's great. Well, thank you so much, Scott.
Speaker 2:Thanks for having Thank
Speaker 1:you. Appreciate it. Great. This is fantastic. Our next guest is already in the waiting room.
Speaker 1:We have Brian Elliott from Blitzy. He is CEO with a huge fundraising announcement coming in to the TBPN UltraDome. Let's bring in Brian. How are you doing?
Speaker 2:Here we go.
Speaker 4:Hey, guys. How are you?
Speaker 1:Quick transition. Thank you so much for taking the time. Please Great to
Speaker 5:meet you.
Speaker 1:Is the first time on the show. Introduce yourself and the company.
Speaker 4:Yeah. So Blitzy, we're announcing the $200,000,000 financing at a $1,400,000,000 valuation today. So we're an
Speaker 2:nice. Thanks, guys. Appreciate the love.
Speaker 4:So we're an autonomous software development platform specifically designed for complex enterprise use cases. So we serve banks, insurance companies, anyone with huge amounts of code, and and we do we do autonomous work, meaning the system will run for days to weeks autonomously, recursively improving the code using all the foundational models together in, you know, OpenAI, Gemini, and and Anthropix Anthropics models.
Speaker 1:Yeah. It's fascinating. So what is the go to market motion for you? I mean, you're focused on the biggest companies. Like, do you have like, tell me about the shape of your sales force, like what the process is like to actually deliver value because I imagine that a lot of times you're going up against like the build versus buy question almost like should we just build something like this internally?
Speaker 1:Should we just use the tools directly, the models directly? But you clearly have a fantastic value proposition because you've seen a lot of traction.
Speaker 4:Yeah. So we go in direct. Right? It's very much like a Palantir like motion. Yeah.
Speaker 7:So we're
Speaker 4:going go in direct.
Speaker 1:We're going
Speaker 4:to show you quickly. We're going to reverse engineer your code base, oftentimes thirty, fifty million lines of code. We're And going to do all that within forty eight hours of installing Plexi.
Speaker 1:Or else. Sounds like a threat. That's right. But yeah, no. I mean, obviously, that's valuable.
Speaker 1:Yeah. Mean, that's the case with all these coding agents is like the first thing is like understanding what actually is the business problem, what's actually going on. How how are you confronting like the diffusion question broadly? Like there are so many systems that feel like complete code, oh it's the beautiful you know, end to end engineered system. And then you realize that, oh, wait.
Speaker 1:Actually, like, if this person doesn't fill out this form at this time, like, the whole system grinds to a halt because that's just the way this organization was designed years ago.
Speaker 4:Yeah. So these are the, like, complex use cases that Blitzy
Speaker 7:is designed for us.
Speaker 4:We we designed this for the messy brownfield legacy code base Mhmm. Where the system is going to come in. It's going to create a knowledge graph, we're building and running the application. Right? And so inside of a inside of a VM, we are building around the application, looking at what's going on, and then we've invented a proprietary way to store and then have agents be able to traverse a graph, understand what's going on, and then build large amounts of work on top of it.
Speaker 2:How how did how did you talk about the category overall during your fundraise? Is, you know, every single day there's there's a new company in this space and everything we've seen so far is that there's just such overwhelming demand Yeah. That almost every company is
Speaker 1:That's right.
Speaker 2:Is doing well and almost every company would have been seen as best in class if it was in another category, you know, based on their growth a few years ago. But how how are you talking about the category? How do you see it evolving when everyone kinda wants to do everything at least in the fullness of time? So I'm curious how you pitched it.
Speaker 4:Yeah. So we really focus on on autonomy. Right? So if you look at what's out there today, there are things that run for a half hour, things that run for a day continuously without a human in the loop. Our system is is at its core defined to run for long periods of time with the most inference compute intensive platform out there, driving up code quality.
Speaker 4:So, like, we'll have our system that can run for weeks on end, improving the quality of code specifically focused on those large large brownfield code bases. So that's where we found our our sweet spot inside of the enterprise, but no one else is as laser focused from a technology perspective as we are in large brownfield, large scale autonomy. And as the models get better, we continue to rise up and take advantage of that. So we are we are a long transformer and want as much CapEx investment into the category as possible.
Speaker 2:Did you From other people.
Speaker 5:Yeah. Yeah.
Speaker 1:We want to
Speaker 5:we want everyone to
Speaker 9:get through
Speaker 2:our models.
Speaker 5:Yeah. And and
Speaker 2:and it's, like, clear clearly clearly a compelling pitch because you raised the 200,000,000, but it is it is I I mean, I think it's notable that I would say that would would you say that is quite a similar pitch to many of the other companies in the space? Or do you are they are they saying they're focused on autonomy but they're really not and it's it's more point solutions or or models or
Speaker 4:The the world the world has looked at being able to have a system run continuously for a day as autonomy. Right? And what we've done is we've redefined that to weeks at a time. Right? Doing hundreds of hundreds of thousands or millions of lines of code that have been end to end tested ahead of it getting back to the human.
Speaker 4:So we've set a new benchmark for what's possible against these large scale code bases. Like, we're basically setting the frontier for autonomous software development.
Speaker 1:Okay. I can't find it, but I saw Meta put out a new benchmark today. And the benchmark was basically take the frontier model and try and recreate an entire repo, an entire piece of software from scratch. And all the Frontier LLMs were performing very poorly. Like they were at 0%, 3% maybe.
Speaker 1:It was very rough. You see a similar dynamic with Arc AGI v3. The Frontier models, the most amazing models are at like 0.2%, 0.5%. And and then at the same time, you have people with like, you know, AI agent psychosis and vibe coding, tons of things and like incredible results from the models and like incredible revenue ramps from all the labs. And I'm wondering how you square these.
Speaker 1:Like like, what what are the models still bad at? How are you processing the question of, like, spiky intelligence? Where are you getting the most value and where are you seeing, oh, okay. It's not quite there yet. So you
Speaker 4:see a rapid depreciation of intelligence after you exceed like a 100 k context window.
Speaker 3:Okay.
Speaker 1:Right? And so
Speaker 4:they're advertising a million, 10,000,000, there's someone sub q put out 12,000,000, you know, context Yeah.
Speaker 2:Wanted to I wanted
Speaker 4:That's not real.
Speaker 2:Yeah. Wanted to ask you about that but but continue.
Speaker 4:Yeah. That like, they're using sparse attention beyond that point. Right? And so you can kind of get it right sometimes. The academics will call this context pressure.
Speaker 4:Mhmm. And so what's important is that you you limit the LLM's ability to look within its effective context window just in time every time to do the right amount of work. So as the code bases scale, like, you see results depreciate Mhmm. Pretty dramatically. Right?
Speaker 4:And so you have to be able to have a system level approach, not just throw a model at it with a slightly larger advertised context window to solve these large scale problems.
Speaker 1:And so that means, like, orchestrators and, like, teams of agents. Like, there's one agent on this 100 k token chunk of code, and it's very good at that, and then it's coordinating with another agent. Is that the solution?
Speaker 4:Yeah. But code is relational, not serial. Right. And so, like like, you you can't just say the serial 100 k token, which is like 10,000 lines of code, but you have to cut it in half to account for prompts and tools. Right?
Speaker 4:So now we're talking about a miniscule view, but the entire relational aspect of well, it's something way over here in this service that's actually relationally relevant to what's going on just in time. So you have to be able to understand. You have to create a ability to understand code, which people used to do with language specific, version specific ASTs. We've invented a language agnostic, version agnostic way to understand code.
Speaker 1:Mhmm. Well, congratulations on the round. Congratulations on the progress.
Speaker 7:Yeah. Great to meet
Speaker 1:Keep on blitzing. That's actually really guys. Great to meet Cheers. Goodbye. Up next, we have Stephen Balaban from Lambda, cofounder and the new CEO Michel from Lambda in the waiting room.
Speaker 1:Welcome to the show. How are you guys doing? Wow. Look at
Speaker 6:this setup.
Speaker 2:Suited up.
Speaker 1:Suited up.
Speaker 5:Suited Suited up.
Speaker 1:Okay. Reintroduce yourself, Steven. Introduce yourself, Michel. Michel With
Speaker 9:the purple wrap.
Speaker 1:We're very excited for today.
Speaker 9:John and Jordy, so good to be back. Thank you so much and congratulations. It's been a while since we've Yeah. Each other and so much has happened in your world. Too long.
Speaker 9:So I'm Stephen Balaban. I'm the co founder and founding CEO, but now chief technology officer Got CTO.
Speaker 1:Yeah.
Speaker 9:There We've we welcomed on Michel Combes as our new chief executive officer, and I'm passing the baton after fourteen years.
Speaker 1:This really feels like we're putting a new quarterback in. This feels like proper TBPN SportsCenter. I love it.
Speaker 6:And and and this
Speaker 9:it it was such an awesome opportunity to like this is the first thing that we're doing right after announcing it to the company and to the world.
Speaker 1:I love it.
Speaker 9:And I think that one thing you guys are gonna really like here. So Michel has obviously a very, very long history in telecommunication infrastructure, whether it's being the former CEO of Sprint, former CEO of SoftBank International, associated with and, you know, on the the you know, with the McLaren team.
Speaker 1:Hey.
Speaker 9:Also on the board Yeah. Of Philip Morris.
Speaker 1:No way.
Speaker 9:There we go. Oversaw the acquisition of Swedish Match. And
Speaker 5:the thing that I have some competitors. Maybe Get him
Speaker 1:out of here.
Speaker 9:Think about
Speaker 5:it outside of it.
Speaker 1:Yeah. We should.
Speaker 9:So so it's not Zine.
Speaker 5:What is it? I don't know what you
Speaker 1:company I started before the show.
Speaker 9:I know.
Speaker 5:I know. That's why the
Speaker 9:the the the the tagline we have now is, look, there's telecommunication infrastructure.
Speaker 1:Yeah.
Speaker 9:Racing infrastructure. Mhmm. Nicotine infrastructure. And AI infrastructure. It all comes together.
Speaker 1:It all makes sense.
Speaker 2:More ingredients
Speaker 9:To a flourishing civilization.
Speaker 1:I think
Speaker 5:you're right.
Speaker 9:You know, we're really excited to have Michel on board and Yeah. Just it's it's a it's a it's an honor to be able to do this as a founder to be able to bring on somebody with such experience.
Speaker 1:Yeah. This is
Speaker 5:Very excited to be there. I guess I would never have been invited without you, Stephen. So thanks to you. I am a cool guy. I am on this nice show.
Speaker 5:So I am I really love it. So we just announced it to our employees a little, a little while ago, very, very excited, fascinating industry, amazing company, amazing founder that they have discovered in the past two months. And I guess that we are going to have a lot of fun in order to build the next step of this company and continue our leadership in this industry. So I love it, and that's really exciting.
Speaker 1:Huge industry, huge growth rates, hugely successful company thus far. What is the what is the major goal? What are the KPIs? How do you manage a company like this over the next year, over the next decade?
Speaker 2:When the GPUs are on fire. Well,
Speaker 5:I guess that the name of the game is a skill. Mhmm. Skill, it's what matters. So Steven and team have built an amazing platform in the past few years, and we can really start from this foundation and turbo boost the growth. So I'm really coming in order to help Steve to unlock the growth of this company.
Speaker 5:Sky has no limit, so we know that. So it's just about scale, scale in terms of capital formation. So that's something and you will have seen that we are strengthening the team also in this side, on this dimension in order to be able to raise the right level of capital, whether it's equity, whether it's debt, whatever is needed in order to accelerate our growth and scale also in terms of operations. So it's about, let's say, finding the right sites, finding, of course, the right GPUs and just making sure that we can assemble all of that in order to have the best service, the best quality, the best quantity of compute and the most efficient computing power for our customers. So that's really about executing.
Speaker 5:In fact, the dream of Stephen, which has started the dream, which has put all the ingredients together. And my role is just to accelerate that with my partner in crime, Steve. So which I love the idea to partner with a founder. As you can see, I'm a little bit older than the founder. I have an experience which is a little bit outside of the founding place.
Speaker 5:I'm serial executive, but I have worked with many founders in my previous lives, for example, at SoftBank. And so I really enjoy I really like to team with a founder and especially a founder like Stephen. So that's already very fun. This look how he's dressed. He's dressed like a French guy.
Speaker 2:He's dressed for
Speaker 1:years. So no. No.
Speaker 9:Tia's already a tie. I'm surprised this. I got a a Charvet tie Oh. That I picked up in Paris and
Speaker 1:That's great.
Speaker 9:You know, that's a good premonition for
Speaker 2:Steven, where do you wanna focus?
Speaker 5:Sorry for the French guy. We should just look at his shoes. Made a mistake there. He made sneakers with his suit. So now we can take it from there, but I just wanted to show you that there was an issue there.
Speaker 2:Would it be an AIC with with like proper dress shoes.
Speaker 9:Made in America New Balance.
Speaker 1:We go.
Speaker 2:Stephen, where do you you're where do you wanna like, obviously, you're you're gonna be focused on technical responsibilities now. Where do you wanna focus? Where do you see the opportunity for you to have the highest impact?
Speaker 9:Yeah. So I am gonna be continuing to lead product vision, technology direction, and working on just really high impact, high velocity products at the company. I mean, one of the things that I've done historically, even just in the past couple of months is really, you know, spit up a ton of agents, really show how software engineering is supposed to work in the new world. Mhmm. And on top of that, I'm just still deeply involved in standing up new infrastructure.
Speaker 9:So whether that's like hiring and recruiting really great, technical data center experts, you know, assisting with the strategy around how do we go from leasing data center space to owning and operating data center space. I'm just gonna be involved in wherever is, like, the highest impact for me. You know, when I was thinking about these roles, I kind of looked at the people who I really looked up to in business. And, you know, the CTO role is the one that's kind of styled after somebody who I really look up to, which is Larry Ellison. And, you know, when he when he transitioned to the he he transitioned to a full time CTO position.
Speaker 9:Yeah. And when Safra Katz and Mark Hurd came became co CEOs of Oracle. Yeah. And so I figured that was an a pro pro title given that I look up to him so much.
Speaker 1:That's amazing. How are you thinking about focus right now? People know Lambda is a way to, you know, lease compute on a short term basis. We've seen other companies expand into everything from buying land and building supercomputers to training their own foundation models and offering APIs. It feels like there's always a question of do you wanna do more?
Speaker 1:But if the current thing's working, do you stay focused? How are you thinking about these trade offs?
Speaker 9:Michel and I are exactly on the same page, which is focus, focus, focus, focus. We are building a generational company that is going to last for a hundred years, and we're going to do that by having the most compute at the lowest cost basis, offer those at the lowest prices and the most flexible terms so that we can delight both the largest, most important model builders in the world, like OpenAI and the developer. You can't forget the developer who have built the entire industry and ecosystem that surrounds this company. I mean, Lambda is really the developer's cloud. You know, it's founded by a a software engineer.
Speaker 9:It's built for people like me. And so we're gonna have that combination of both of those and focus on that.
Speaker 1:Well, congratulations and thank you so much for coming on the show. Can't wait
Speaker 2:to catch up with you soon. You guys look fantastic.
Speaker 1:This is fantastic.
Speaker 2:We'll have you both back on soon.
Speaker 1:Talk to you soon. Congratulations.
Speaker 9:John Jordi, congratulations guys. You take care.
Speaker 2:You. Guys. Cheers.
Speaker 1:Bye. Just yesterday, Ryan Cohen of GameStop offered a $55,000,000,000 unsolicited bin for eBay targeting 2,000,000,000 cost cuts and we have him joining the show with us now. Ryan Cohen, welcome to the show. Thank you so much for taking the time. How are you doing?
Speaker 8:How are you guys?
Speaker 2:Great to see you.
Speaker 1:Fantastic. I would love an update. What can you share with us on the situation as things have developed since yesterday just to sort of set the obviously this is moving very quickly. Where are we right now? What's happening?
Speaker 8:We made an offer yesterday.
Speaker 1:Mhmm.
Speaker 8:$125 a share. Mhmm.
Speaker 2:Cash, cash stock.
Speaker 8:That was funny, wasn't it?
Speaker 1:Have you considered 49% cash? Why did you get to half cash, half stock? Can you unpack that a little bit at least?
Speaker 8:Well, I mean, when you think about me going and running the eBay business Yeah. What we're proposing is for existing shareholders to take half of their investment off the table Mhmm. And that would be us providing them with 28 with $28,000,000,000, which is like a 40% premium from when we started buying the stock. Mhmm. And then they would be getting roughly I mean, it depends on ultimately when the transaction closes, but they would be rolling the rest into the combined company of GameStop and eBay.
Speaker 8:Mhmm. Frankly, with me running eBay, I think that the company the earnings power of the company is going to increase substantially
Speaker 5:Mhmm.
Speaker 8:As well as the ability to to grow. The platform stagnated over the last decade and I could do a lot with eBay.
Speaker 1:I love it.
Speaker 8:That's a very strong business and Yeah. That's right up my alley.
Speaker 1:Take us through the big vision. Like in five years, you're at the helm. Like how big can this business be? Are you expanding it? Obviously, there's an operational efficiency point.
Speaker 1:But what is the big picture? What's the blue sky, pie in the sky vision for the combined entity?
Speaker 8:So where we've had success at GameStop and where eBay has had success is in collectibles. Trading cards, collectibles. Founder of your show was was talking about his Montblanc hat. And I'm like, that's a good example. That's a perfect item to go and buy on eBay, but you're always concerned that is it gonna be real and the trust.
Speaker 8:And that's something that using GameStop 1,600 stores, we can immediately authenticate that item. The seller can ship it, or we can ship it. But we've got 1,600 access points that we can do live authentication. So we can go deep in collectibles, leveraging our physical infrastructure. We can increase intake by bringing a lot more product onto the platform.
Speaker 8:And then there's a lot of other categories that I can I can grow in? And, you know, you look at live commerce as an example. I mean, eBay has a 130,000,000 users, and they're getting crushed by competitors in live commerce. So an owner's mentality, you know, I can I wanna I wanna own eBay forever? Like, I I love that business.
Speaker 8:It's run like a public utility. It should have been wiped out, but it hasn't been
Speaker 2:remarkably resilient. How many how many companies, how many startups have gone after a specific category on eBay, raised a 100,000,000 plus dollars Yep. And yet eBay has remained resilient. Yeah. So it shows that that there's Yeah.
Speaker 2:You know, it's a it's a it's a really powerful platform.
Speaker 8:Yeah. That's why I love it. And, you know, the website still looks the same as it did in 1995. But everyone's tried to kill this thing
Speaker 1:Yep.
Speaker 8:And it's still making over $2,000,000,000 a year. Yeah. So that goes to show you the the durability of the business.
Speaker 1:Talk about live commerce more. Would that be just a better integration with TikTok, Instagram streaming, Twitch streaming? Do you need to go and partner with big creators? Do you need to find your own platform for that? Like how does that actually play out in a world where eBay and you are making a bigger push into live commerce?
Speaker 1:It makes a lot of sense, but I'm wondering, like, how does it actually work?
Speaker 8:Yeah. It would it would be partnering with creators. I mean, they've got the platform. We would improve the platform so it looks better and more consistent with the kind of UI that you have at at competitors. But there's the user base, and so it's not something you have to market.
Speaker 8:It's building out better tech Yep. And partnering with creators.
Speaker 1:Yeah. And and the correct incentive structure for those creators because I bet you right now, could you probably go get some referral code or something, but it's not deeply integrated in a way that you can really accelerate on a social platform.
Speaker 2:Why do you think eBay has eBay been a target of any type of deal like this in the past? I'm not familiar with any off the top of my head, but why do you think maybe it hasn't been more of a target? And I guess, like, why do you think you can get more efficiency out of it than maybe some other potential buyers who, I'm sure see their costs. You know, marketing is something that people gravitate towards. But I'm sure you're seeing other efficiencies as well.
Speaker 8:So in terms of the competitive landscape on an acquisition, I think there was some people circling around a few years ago. Nothing happened. The strategics can't really do it because I don't think that they would be able to clear antitrust. So any of the large competitors wouldn't be able to acquire it. And, you know, I don't think that we would have any regulatory issues getting clearance on a merger.
Speaker 8:In terms of the efficiencies, GameStop is a good example. Like GameStop is a dog, and it could have been dead, and we've breathed life We've breathed a lot of life into
Speaker 1:this thing. Right? And, you know,
Speaker 8:if you look at SG and A, we've pulled out We've dropped SG and A by 47%, $800,000,000. Yeah. By making marketing more efficient, almost turning off marketing. I mean, knows GameStop. Everybody knows eBay.
Speaker 8:So you talk to the marketing people that tell you like it's gonna tank revenues and all of this, and the reality is most of that marketing spend isn't making money, but everyone's trying to protect their jobs, and there's kickbacks, there's all kinds of perverse incentives. And so, I'm running the business like a family business. You know, it's it's really not that complicated. And you look at eBay spending 2 and a half billion bucks to grow 1,000,000 users, 2,000,000,000 in cost cuts between sales and marketing and corporate overhead, it's not a lot. And it's not something that's going to take a few years.
Speaker 8:Like, it's something that is going to happen fast, fast, fast because putting leverage on this thing, and I don't want to run a leveraged business. So, I'm not going to run it hard. I'm going to pay down the leverage, and I'm going increase earnings. They're spending 5 and a half billion dollars on operating expenses on $11,000,000,000 business that has no inventory and it's asset light. So, it just there's 11 and a half thousand employees, and it doesn't make sense.
Speaker 8:Mhmm. It it doesn't you don't need a I could run that business I could run that business from my house. Like, it's it's eBay. It looks the same as it did in 1995. Didn't need 11 and a
Speaker 2:half thousand people. Is is the Elon, Twitter, Take Private somewhat of an inspiration here? There's been a number after that happened. In many ways, the business suffered, but maybe it wasn't because of the deep cuts that he did to to the team and
Speaker 1:The service kept working.
Speaker 2:Yeah. The service kept working. It's still a great product. We've been surprised that more CEOs and management teams haven't done something like that with businesses that are household names but somewhat stagnated. Is that an inspiration at all?
Speaker 8:Yeah. And Twitter is a good example. I mean, what really happened at Twitter was that the advertisers, you know, I don't know what the situation is now, but they pretty much conspired against him And, you know, it had nothing to do my understanding is it really had nothing to do with the cost cuts. More of just the advertisers conspiring against him because of the demented political landscape and the fact that people apparently are against freedom of speech. And so, like, you look at the usability of the platform and the teams, the engineering teams are much smaller and they're innovating a lot faster.
Speaker 8:So it's actually the opposite. The more people you add, the more you slow things down. And the fewer people you have, the more it's like a startup. You've got to always be in startup mode. And you build big teams and nothing gets done anymore.
Speaker 2:Do you think LLMs will be a tailwind for eBay over the next decade? It feels like for the long tail of commerce, you're trying to find really specific items. It feels like LLMs and people doing research in these products could be catalysts for the business. Maybe there's things on eBay that would be tough to to find, but if I'm really getting precise around prompting or running these sort of agentic searches, maybe I have a higher likelihood of purchasing something.
Speaker 8:Yeah. I mean, I think about all of the things that can disrupt the business in the future And, you know, I think that eBay is the kind of business where the future of the business model is more certain than most tech businesses. And that's why it's done so well. And, you know, there's been such a lack of innovation, yet it hasn't been able to be disrupted. So I would expect that continue to to be the case.
Speaker 1:If it doesn't materialize as an M and A, are you looking at a board seat? You have a position? Will you be more active in a non M and A scenario?
Speaker 8:Yeah. I mean, I'm gonna I'm gonna do whatever we need to do to protect our investment and to improve the business. But the the goal here isn't to be an activist. The goal is I want to own eBay. I want to run eBay.
Speaker 8:I want that to be my baby. I want to build something much larger. And cost cutting, frankly, is the way to make the business more efficient to pay down the debt and innovate. You know, when I think about what I can do with eBay in the future, like, look at Chewy. Yeah.
Speaker 8:You know, eBay is like Chewy on steroids. And so, there's so much more runway, and it's global.
Speaker 1:Yeah. I mean, seems like a huge opportunity. How do you want to be comped?
Speaker 8:Based on performance a 100%.
Speaker 1:Is there any tension between you and the shareholders? How do you actually create alignment there?
Speaker 8:It would be a bit mean, my current compensation plan is tied to really lofty metrics, and it's based on the the first tranche I've got to double market cap, as an example just to hit the first tranche and to 10x it in order for it to fully vest. I'm Yeah. Not interested in I haven't taken a dollar of salary or any bonuses. You know, it's funny actually. I just got a call from my team today that said, this is how I know they hate me.
Speaker 8:They're not happy about this, by the way.
Speaker 4:The GameStop. This is the
Speaker 1:GameStop eBay.
Speaker 5:No. EBay is
Speaker 1:not. No, hate team. Okay.
Speaker 8:Yeah. After this interview, they're they're really not gonna like me. But because they're gonna find out I'm cutting marketing spend. And the board already is gonna like me because I'm calling out all the board fees. Yeah.
Speaker 8:But I get a call and I say, there is a there is a they're calling out your personal assistant. I said, what are you talking about? And they said, they went on your the GameStop's career page, and they saw that there's a listing for the personal assistant, and it's all kinds of personal stuff, and that's basically a CEO benefit. And, you know, it's basically not you're using company resources personally. Mhmm.
Speaker 8:Me? I pay for my personal assistant personally. I don't even pay for my the the company doesn't pay for my personal assistant. So they're already starting to get they're they're doing whatever they can. They wanna fight for Have
Speaker 2:you has any major eBay shareholders reached out to you? Have you had you know, what what is the general sentiment? You know, how do you think what do you think it'll look like if you take this, directly to the shareholders?
Speaker 8:I don't know. I mean, I would wanna I wanna own eBay at a $125 a share. We're pro there's tax advantages to rolling it, but when I think about what eBay could be worth, if I'm running this business, I believe it's a heck of a lot more than a $125 a share.
Speaker 5:And so
Speaker 8:I I would roll a 100% of the of the equity, but, you know, we'll we'll see. We'll we'll see what happens.
Speaker 2:Yeah. What do you think of Michael Burry's critiques? A lot of people were, you know, talking about him exiting yesterday. He doesn't believe. Have you guys chatted?
Speaker 8:I haven't chatted with Michael in a long time. I've seen he's more active than he says his investing philosophy. So I figured the, you know, his risk appetite and, you know, the leverage we're putting on just it it didn't make sense for him, but it seemed as though it was more of a trade more so than than anything.
Speaker 1:Yeah. And looking at the price action yesterday, is that reflective of sort of like a shakeout of nonbelievers and you feel like you have the right people around the table now?
Speaker 8:When I think back to Chewy, every single day was a shakeout of the fucking words. Good. Yeah. So, I don't know. It's hard to diagnose the shareholder base.
Speaker 8:And I'm I'm focused on what I could build over a long period of time. And
Speaker 1:Yeah.
Speaker 8:If I got my hands on eBay, I can build something worth a lot and much larger than it is. So
Speaker 2:Was Paramount at all an inspiration? Was gonna ask.
Speaker 8:I've looked at it. You know, what they did is really interesting too.
Speaker 1:Just because smaller company buying a much larger company, but the deal still went through. The capital was was marshaled. That was something that I think was unclear yesterday for some people was, you know, half cash, half stock. Where is it coming from? How much of this is just an ongoing conversation?
Speaker 1:And as you work through this process, you'll engage with other, you know, pools of capital or financiers to to actually put together the final package? Do you have a date that you want this to like be done by?
Speaker 8:I mean, we have the cash. I mean, we have the cash accounted for Mhmm. Today in terms of a highly confident letter from our bank for the 20,000,000,000 plus we've got 9,000,000,000 of cash.
Speaker 2:So Okay.
Speaker 8:And the rest would be them rolling the equity into the combined company.
Speaker 2:Sure. Yeah. Think that was the that was the the rolling of the equity was the thing that if it had got into the viral clip from CNBC yesterday, it would have made a lot more sense. So I'm glad we're I'm glad we're getting it in now.
Speaker 1:Yep. Is is there I guess how much of your critique of eBay is specifically around the current management team?
Speaker 8:They've done a decent job. It's look, it's anyone. When you've got perverse financial and they're they're not operating like owner.
Speaker 5:Mhmm.
Speaker 8:It just, you know, when when you've got it it all on the line, you're going to do whatever it's going to take. Yeah. Twenty hour days, seven days a week, you're not going to stop. And when when equity is given out to you like Kandi, I mean, it's it's it's all companies. So, you know, the directors board of directors make 4,000,000.
Speaker 8:It's like 350 to 450,000 per director. Mhmm. There's been no insider buying at the company. I mean, like it's not a surprise they're not going to light the money on they're not going to light the world on fire. Mhmm.
Speaker 8:But you've got a bunch of professionals in the board and a professional management.
Speaker 2:Yeah. So If this deal goes through, roughly what percentage of your personal net worth will be tied to it?
Speaker 8:Well, I I haven't done the math but if things go correctly then it better be the majority otherwise I'm wasting my time.
Speaker 1:Yeah. What was
Speaker 2:your first memory using eBay? Were you a power seller back in the day?
Speaker 8:A very good question.
Speaker 5:I bought
Speaker 1:and sold DJ equipment on eBay back in like 2003. It was amazing.
Speaker 8:I don't remember my first transaction, but I'm gonna have to get back to you on that one.
Speaker 1:Okay. With GameStop, last time we talked, you were mentioning a little bit of expansion into digital goods, less physical material and stuff. Like, do you think that there's an opportunity for eBay to play in a digital marketplace or in a world where certain collectibles or certain goods become digital or or or the market shifts towards more digital goods? And and would you like to see eBay expand into that?
Speaker 8:Yes and yes Mhmm. In terms of the digital marketplace. And they're already doing it to a certain extent. I mean, like, all kinds of Roblox digital items are bought and sold, but And I've actually bought them for my kids, and there's so much fraud on the platform. Like, we're buying stuff, it's not a real item.
Speaker 8:Yep. End up having to do a chargeback, but then it ended up getting delivered.
Speaker 1:Mhmm.
Speaker 8:So, you can't do a chargeback. So, like, they've got the basics of it, but it's not being done well. So, like, digital gaming, totally.
Speaker 1:Mhmm.
Speaker 8:That's a huge opportunity to to dig into. So much potential.
Speaker 1:On digital stuff, I guess, you're obviously interested in cutting costs. Are you optimistic that stablecoins might be a path to reducing costs? It's a high volume transaction business. Obviously, lot of credit card fees. Maybe there's a way around that with stablecoins.
Speaker 1:We hear that from a lot of stablecoin founders. Haven't heard it from as many operators. What do you think?
Speaker 8:I don't have a point of view on that. I haven't looked into it. So
Speaker 2:I think the sellers would would probably be eating the the cost, but but potential option.
Speaker 1:Yeah. I don't know. Jordy?
Speaker 2:Do you have any sense of how eBay is using AI internally today? Have they have they spoken about it much? Do you do you believe they're getting very much leverage out of the models? Do you think there there could be quite a bit more?
Speaker 8:I've seen that they've made listings easier in terms of just generating product descriptions and stuff like that. So I think they're kind of like doing the super easy stuff. Still, there's a lot of friction to sell a product on eBay. Like, it's it's just it's not easy. So the benefit of our 1,600 stores is we have the ability to increase intake, but I would go through it, and I would make it as simple as possible to have a real item for sale as a seller.
Speaker 1:Mhmm.
Speaker 8:And there's a it's there's a lot of steps. It's just it's a pain in the ass. It's too difficult.
Speaker 1:Yeah. 1,600 stores in the world where you combined eBay and GameStop. Do you expect that number to increase, decrease, stay the same?
Speaker 8:It's a good question. I mean, our footprint is a moving target. We have this was part of what appealed to me originally when I went into GameStop was the leases were short term. So they're like two to three year leases, and as we see how the business performs, we decide whether or not it makes sense to renew the store. So, I mean, it's going to be dependent on the utility of the store.
Speaker 8:It's like if there's traffic and if profitability is increasing, we'll keep the stores open, and if it's not the case, then we'll shrink the store base.
Speaker 1:Okay. A couple other scenarios. In a world where an M and A doesn't happen, is there a business partnership to be done where verification of rare collectibles can happen at GameStop physical retail stores for a price and eBay is paying GameStop for that service? Is that something you've explored? Is that something that's at all likely to happen?
Speaker 8:Well, that would so, yes. And it would basically take $0 in capex in order to do something like that, and it's a good idea. I hope that doesn't want to that doesn't happen because I want to run the entire thing, but if it doesn't, then there I mean, there's a I partnership reached out to eBay like, I don't know, maybe a year or two years ago to talk to them about partnering, and they didn't engage seriously. Like, everyone that everyone's on vacation. Everyone's always on vacation.
Speaker 8:Like, they're not available. They have assistance. I'll get back to you next week. And it's like, let's go. It's getting done now.
Speaker 8:So then they never get back to you, then you're following up. It's like, there's there's there's no sense of urgency
Speaker 1:Yeah.
Speaker 8:At at that company. There's no sense of urgency, frankly, at at most companies. So it never gained any traction.
Speaker 1:Okay. Etsy is trading at 6,000,000,000. Is that a target if the eBay plan doesn't come together?
Speaker 2:No collectibles action there.
Speaker 1:It was in the chat, I got to ask.
Speaker 8:EBay's just such a natural fit for the collectibles, leveraging our store footprint, but then also, like, my ability to cut costs and build something much larger at the company. So, everything else is if it doesn't work out, we could find something else, but I like eBay. It brings me back to my roots.
Speaker 2:What's something that eBay is not doing today that you think they could expand into, or is that even the right question? Do you think the core business is just so great and they're so dominant in in many of these categories that you just want to pour fuel on the fire?
Speaker 8:Live commerce.
Speaker 2:Yeah. But to me to me, that's an extension. Right? Because they have a lot of inventory. It's just a new selling channel.
Speaker 8:Yeah. Yeah. But I mean, in terms of doing that well, accelerating revenue growth, you know, I I think that that is that's big. And so going much deeper into collectibles and luxury trading cards, there's there's a lot of runway there.
Speaker 1:Do you have a position on international capital providers? A lot of these big deals, you know, maybe they started 50 at half cash, half stock. They wind up being more leaning cash. That's what we saw with the Paramount Warner Brothers deal. Are you interested in talking to international sovereign wealth funds, that type of capital provider?
Speaker 8:We're we're looking at a variety of different options currently.
Speaker 1:Mhmm. Makes sense.
Speaker 2:Mutual friend of the of the show and GameStop Mod Retro, they've been pretty aggressively pushing into this retro gaming category. How do you see that growing? Our team at the office recently got an old Xbox three sixty, fired it up.
Speaker 1:I
Speaker 2:can see retro gaming just getting more and more popular. But what's your view on the category right now and where do you think it's going?
Speaker 8:Are we've we have the the return rates are kind of high, but we're building out the retro business in our stores currently. So that's a it's still small, but it's a growing category for us.
Speaker 2:Mhmm. What do you want to see the rest of this week? How do you how do you do you see it playing out?
Speaker 8:I don't know. It's a good question.
Speaker 2:Ball's in their ball's in their court?
Speaker 8:Pretty much.
Speaker 2:Yeah. Ball's in their court.
Speaker 1:We'll let you I'm get to sure you have more calls.
Speaker 2:Thanks for jumping on.
Speaker 1:Thanks for jumping
Speaker 2:You're welcome to join anytime. Thanks Let's for do it again as for the story progresses. But we're enjoying following along. And if anybody out there wants more information, it's on the website.
Speaker 1:Yeah. It's on the website. Exactly. If anybody asks you how he's paying for it, just tell him half cash half stock. You got the beginning and the end of the interview.
Speaker 1:Thank you so much for coming on the show.
Speaker 2:Great to see you Ryan.
Speaker 1:Have a great rest of the week. Good luck out there.
Speaker 2:Cheers. Goodbye.
Speaker 1:What a fun interview.
Speaker 2:It's on the website.
Speaker 1:I like the thesis. I I keep coming back to I like the thesis. I was confused about the financing. I I feel like an idiot now. Friend of mine who's an investment banker was like, yeah, like this could totally happen just the way he's describing and everyone who's sort of you know, you know, reposting the clips thinking that it's crazy.
Speaker 1:It actually makes a lot of sense. And and it could happen if the shareholders decide to roll forward. We'll see how it plays out. We'll see what happens. Obviously, with Warner Brothers, there was, like, an incredible pushback against any stock and it wound up being all cash at the end of the day.
Speaker 1:But that was the Netflix thing. The real question is, do we see a dark horse Netflix style bid for this eBay company? Think
Speaker 2:a lot of people just Yeah. Weren't thinking about eBay too much. Yeah. Now that they see this business has been immune, not necessarily immune, but face an onslaught of competition, vertical competition in every single category from watches to collectibles Yeah. To sneakers to fashion Yeah.
Speaker 2:Over and over and over. So much venture funding has gone into attacking their business and yet they have remained remarkably durable. It is very immune to AI especially collectibles.
Speaker 1:Right?
Speaker 2:No amount of AI led abundance can generate more rookie cards from Totally. You know, twenty, thirty years ago. Yep. So it seems like a great business. I think Ryan has a strong vision.
Speaker 2:I would not be surprised for some other players to also get excited about the opportunity now that he has so pretty eloquently explained it to the world in his own words. Thank you Everyone in to the chat for hanging out. You guys, the GameStop crew, you guys really are a family. We've had we've had thousands of guests on the show and No one shows up. Shows like They're the real guys.
Speaker 1:They're the real deal. And They were asking us about some jargon that I didn't understand. I'm sorry if we didn't get to your questions. We tried to get the ones that sort of fit into this story. I don't have the full context on everything that's happened in the GME ecosystem.
Speaker 1:So good work.
Speaker 2:We'll work on getting Ryan back on.
Speaker 1:We'll get him back on. We'll talk about more did have an interesting point that he says that he doesn't think any of the larger e commerce players can make a bid because of antitrust considerations. I think he's thinking about Amazon, maybe Shopify. I don't know who else would be in that category of potential buyer, but then regulatory FTC, I don't want to dip my toe in. But when I think about Shopify
Speaker 2:is an interesting one.
Speaker 1:Yeah. Shopify
Speaker 2:eBay really is a platform. Right? It's I don't
Speaker 1:it know makes any sense together.
Speaker 2:I'm not sure that it does either but you can imagine they would be able to, you know
Speaker 1:We're get Harley to them. I
Speaker 2:was just thinking more like these scaled PE funds that
Speaker 1:that's not a regulatory issue.
Speaker 2:No. No. I know. That's what but I'm saying that's a potential dark horse. Totally.
Speaker 2:Totally. And specifically because like they don't they're kind of paralyzed. Right? They're they're worried about investing in in SaaS. They're gonna be sitting on a bunch of SaaS companies that they can't exit for reasons we all know.
Speaker 1:Yeah. And this one might be more durable. I'm just thinking about the the the Amazon like, would you like, who is the Netflix of this story? If he's the Paramount and eBay is the Warner Brothers, it's the it's the the $10,000,000,000 company going after the 50,000,000,000 or a $100,000,000,000 company, who's the Netflix in that story? It feels like it would be Amazon, but Amazon's so dominant in e commerce, maybe a Shopify, but even then too
Speaker 2:is like we've always said it has been shocking that that that the the Elon Twitter playbook Yeah. Hasn't been applied to more companies. Again, the Twitter acquisition has not didn't go well. Yeah. Yeah.
Speaker 2:But that was because the reason that Ryan talked about which was the advertiser failing. So if if, you know, ad spend on the platform craters. But you have these companies that have real network effects like Twitter Yep. Like eBay Yep. I do think you can cut pretty dramatically and and still have a have a thriving platform.
Speaker 2:Yeah. At least, you know, my experience on acts that we went through a period where stuff was pretty buggy, but I think they figured it out.
Speaker 1:Yeah. Yeah. It's funny talking to him, I I I get the GME army's love. Like I I I get the thesis the way he thinks about things, the way he talks about things. Obviously tons of ups and downs in the journey but like like the the the basic thesis of the combination
Speaker 5:Yeah.
Speaker 2:The other thing
Speaker 1:There's a lot to
Speaker 2:the other thing I'm excited about, there's so much there's so much stuff in my house that would sell on eBay. Yeah. I just I just never find the time Sure. To go out. I don't wanna deal with photographing it.
Speaker 2:If I could just take Yeah. A car full of stuff, take it to eBay, they can say Yeah. I will take this donate this Yeah. Stuff. I would happily do that.
Speaker 2:And I think that the yeah. The integration with their existing retail footprint is interesting. I don't think they probably need Yeah. 1,400 stores.
Speaker 1:1,600.
Speaker 2:1,600.
Speaker 1:Yeah. I agree. It it's unclear. I mean, obviously, he's gonna like cut the ones that aren't performing well and add ones that are obvious. But what is the net effect?
Speaker 1:I don't know. I actually don't know where stores have gone over the past six years while he's been running that business. I would love to know how many stores did GameStop have before Ryan came in as CEO. Maybe we can look that up. But in Amazon news, the number of monthly releases of eBooks on Amazon is going vertical.
Speaker 1:We are in the fast takeoff of AI slot books apparently. That is the conclusion. John Arnold just says, And it does look like the rate of publishing on on Amazon is going
Speaker 2:Explaining this this to somebody in 2022. There's gonna be a renaissance four years from now. Yeah. There's gonna be 350,000 books being published Every month. Month.
Speaker 2:Every month. They're like, you're not gonna be happy with why though.
Speaker 1:Yeah. Yeah. It it is it is crazy. I mean, if you if you had asked me to guess how many books were being released every month on Amazon in the pre AI era, I don't know if I would have put it at 100,000. That's a lot of books.
Speaker 1:I feel like we talk to a lot of authors. I see the hyped books. I see The New York Times bestseller list. I don't really see the 999 or 99,900 books that don't make the cut in the given month. I maybe hear about five or 10 new books every month but low and behold they were in fact churning out 100,000 books.
Speaker 1:Now it's over 300,000 books every month on Amazon. Bullish for Amazon. If you like slop, it's good for you too. I don't know. Maybe there's some good stuff on there.
Speaker 1:It all depends. The models are getting better. They're getting a little sloppy and I think people will wind up liking them. There are some AI videos that I like out there. You know there's going to be one book that's fully AI generated that is of high quality.
Speaker 1:Tyler, did you get the stat on GME stores pre buyout? I would love to know. You don't need to cut to him while he's while he's looking it up. Bruhell. You can come back to that.
Speaker 2:In other buyout news, Long Long Lake Lake. Very under the radar company but has been on an absolute tear Yes. Over the last This
Speaker 1:is a wild Wild.
Speaker 2:Is taking Amex Yeah. GBT, Global Business Travel private. I could see Long Lake being kinda interested in eBay too.
Speaker 1:Oh.
Speaker 2:They've they've maybe got their hands full with AmexGBT, but incredibly talented team been really unlocking the power.
Speaker 1:It's a $6,000,000,000 take It's also interesting because general catalyst, Mark Vergara, is sort of talking about the story of Long Lake. He says, We had the first Long Lake team retreat at my home in Miami just two and a half years ago when the company was getting started. It's been incredible to watch. The Talend team have brought together to transform the services industry into one of growth and abundance with AI. Excited to for yet another milestone.
Speaker 1:General Catalyst is honored to be the partner from beginning and excited to continue the strategy of backing what we believe are the best AI investments. And interesting because General Catalyst is also an investor in Ramp I believe. And so there's a question about like Ramp has a travel product. How different is Amex Global Business Travel from Ramp Travel? Obviously there's some overlap there.
Speaker 1:But there might be some synergies since there's board members in common now. Who knows where this goes? But at 6,300,000,000, that's a small slice compared to RAM, which has been on an absolute tear.
Speaker 2:Another big race before we close out for the day.
Speaker 6:It's 11 fun for Matty.
Speaker 2:Cross 5, half $1,000,000,000. Welcome to investors, BlackRock, Wellington, Nvidia, Santo Derek, Jason Fox.
Speaker 1:Is this a raise or is this just a flex? They're just flex And
Speaker 2:they welcome new investors.
Speaker 1:Okay. They got some
Speaker 2:new They got some new I don't know this day announced their new valuation. Well, we with a good bet.
Speaker 1:Mitch Green would be very happy, you know. If you have ARR, that's what you report. If you don't, you report the valuation. And they are making some serious progress in the commercial side.
Speaker 2:And some serious institutions coming in.
Speaker 1:To the team over there. Tyler. I think Tyler has an answer. Has wait. Jordy, do you think the number of GameStop stores has increased or decreased or stayed the same since Ryan Cohen's tenure?
Speaker 1:What do you think? Back of the envelope. What do think?
Speaker 2:Would assume that it decreased, but because you're asking me, I would maybe
Speaker 1:You're going increase. Block it in. Final answer.
Speaker 2:I'm going decrease.
Speaker 1:You're going decrease. Okay. What do got?
Speaker 3:Where are you going?
Speaker 1:I gotta think the other side. I'm going increase now.
Speaker 3:Okay. So 2021, 01/30/2021
Speaker 1:Yeah.
Speaker 3:They were at 4,800 worldwide worldwide.
Speaker 1:Okay. Little
Speaker 3:This this past January, they were at 2,200.
Speaker 5:Okay.
Speaker 1:Yeah. I thought you
Speaker 2:were I thought you were asking me if I thought you were trying to trick me.
Speaker 1:No. I wasn't trying to trick you. I was just trying to get you to lock in a random guy. It was
Speaker 2:obvious. Such a savage operator. IVAC store count in a
Speaker 1:in a retail apocalypse. No. Clearly, you made it you made it much more much more, you know, efficient and
Speaker 2:everything. Yeah.
Speaker 1:Elon And the chats really help any other than massive decrease, obviously everyone knows.
Speaker 2:As Elon said, your questions are meant to trick me.
Speaker 1:Yeah. Anyway.
Speaker 2:Well, speaking of retail Wait. What's McDonald's? Oh, fake news.
Speaker 1:This is fake. It's fake. There's so much fake news in the timeline. I saw a I saw a funny debunk of there was someone on Instagram who was reacting to goats, a video of goats on mountains and was like making fun of the goats on the mountains and then there was someone debunking that saying that that's AI goats but goats do in fact climb mountains and so you could do the same funny video but you should have used the National Geographic video. Every post requires like a deep dive on like is this real?
Speaker 1:But maybe the future with all that XAI capacity they can just do Grock is this real on every post before it goes out. Generate the community note before I even had send. If I'm posting fake news, just let everybody know.
Speaker 2:Community note singularity. Well folks, thank you for tuning in today.
Speaker 1:Thank you for tuning in.
Speaker 2:It's been an honor.
Speaker 1:We are at a conference tomorrow and Thursday. We'll be back Friday but we might have some special reporting from the field. Have a lot more planned and we will of course be posting plenty over this week. Thank you for tuning in. We will see you on Friday.
Speaker 1:Have a good week. Goodbye. Love you. Leave us five stars on Apple Podcast and Spotify. Sign up for newsletter, tbpn.com.
Speaker 1:Goodbye.