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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN.
Speaker 2:Today is Thursday, 10/15/2026. We are live from the TBPN UltraDome, the temple of technology, the fortress of finance, the
Speaker 1:capital of capital. How many days till Christmas? I know that's what you came to the show. That's the question you've been answering. We got the answer for you right here on TBPN.
Speaker 1:There are exactly
Speaker 2:seventy days until Christmas. It feels so close. It feels so close. It's it's remarkable. It's it's been wonderful joining...
Speaker 2:That you've all joined us on the road to Christmas. It's been it's been a strong strong road. I do wanna And I do wanna give a little
Speaker 1:There's more.
Speaker 2:There's more coming.
Speaker 1:There's more coming. There's actually a lot more coming.
Speaker 2:There's seventy days or or after that?
Speaker 1:Well, of course, it just... The clock restarts.
Speaker 2:Yeah. Three sixty four
Speaker 3:Yeah.
Speaker 2:Immediately. Of course. But I I I do need to give a little bit of a... First first, let me tell you about ramp.com. Time is money.
Speaker 2:Save both. Easy use corporate cards, bill pay, accounting, and hold on more all in one place. I actually have a little Christmas gift right here. Let me let me open this up. Production team tossed this my way this morning.
Speaker 2:And let's open it up. What's inside? What's inside? Mhmm. Oh, it's a ramp card.
Speaker 2:Great Christmas gift.
Speaker 1:Would you look at
Speaker 2:that. This holiday season. Get it for someone you love. Get it for someone who needs to save time and money, which is really everybody. Also, congrats to Ramp.
Speaker 2:Massive fundraising news. We'll be talking to the team tomorrow. But the road to Christmas. We're seventy days away. And and this can be a difficult this this can be a difficult moment.
Speaker 2:I mean, don't wanna call out anyone in particular on our team, but there was a there was an individual on our team yesterday who I I was reflecting because it had been a little bit cold over the weekend that I was feeling especially Christmas y. Yeah. I was feeling I was feeling the Yuletide. I was feeling the hearth. I wanted to warm up my hands.
Speaker 2:I was... We were in the jackets. Everyone was saying, why is it so cold in the studio? I was like, no. There's just a warm fire burning inside my belly as I get closer to as I get closer to Christmas.
Speaker 2:But somebody on our team is like... I'm like, oh, we're finally in, like, the cold season. Like... And and as soon as the cold starts where you live, whether you're in California or New York, as soon as it gets a little crisp, it's game on. It's game on.
Speaker 2:No one no one's gonna look at you like you're crazy for talking about it's only seventy days till Christmas because it's it's Christmas y out. It's it's cold. It's cold. But Michael over there... I'm gonna call you out.
Speaker 2:Michael over there on our team is like, John, you know it's going to get hot again. It's going to get hot again. And yes, I checked the weather. It's going to be 80 degrees today, which is not the most Christmas
Speaker 1:There's actually a advisory There
Speaker 2:is Weather Service. But there is a lesson.
Speaker 1:It remains until Saturday.
Speaker 2:Which is Michael. 90% of the road to Christmas, the battle for the road to Christmas is is mindset. And we can't have anyone on this team being a Grinch right now. It's very important that everyone supports the idea and looks on looks on what is... Whichever
Speaker 1:Friendly side is the greener elf mindset.
Speaker 2:Friendly elf mindset.
Speaker 1:Golden retriever mode.
Speaker 2:Yes. Exactly. So yes, there might be heat advisory. It might be blistering hot. But we're still gonna stay laser focused on what matters which is that in seventy days, it will be Christmas.
Speaker 1:That's right. We're pretty excited here. We're headed to see You Can See Everything, the new Nathan Fielder movie
Speaker 2:Yeah.
Speaker 1:Later today after the show with a great group. Can't wait. Yeah. We'll have the review for you tomorrow. Yeah.
Speaker 1:Hell yeah. That'll be fun. And really anything to take our minds off the market, John.
Speaker 2:Yes.
Speaker 1:Because it's an absolute bloodbath out there.
Speaker 2:Well, before we go into the market and the news, let me tell you about Figma. Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system contact. Okay. So the market is mostly reacting to the Anthropic Investor Day numbers, but it's been in a decline for a long time for the last month.
Speaker 2:Core Weave's down something like 50% over the last month or so. It's it's been rough in the AI trade broadly.
Speaker 1:Way off. It's
Speaker 2:It's crazy that you can be growing at 45% quarter on quarter and still not meet expectations. But when people have had in their minds 10 x every year, 10 x revenue growth every year, and Anthropic goes to their Investor Day and says that q three revenue was 16,800,000,000, which annualizes to $67,000,000,000, 67,000,000,000. I don't know what they were doing there. That seems like a little bit of like like, okay, get it. It's like the Zoom reference.
Speaker 2:Like Yeah. This is serious financial. There's a lot of money on the line. Can we not do like the meme thing right now? Yeah.
Speaker 2:Anyway, they are in fact annualizing their quarterly run rate to an annual run rate of 67,200,000,000, which is remarkable for a company that was doing a tenth of that a year ago. But it's seemingly not enough because everyone in their minds was like, they're gonna surprise to the upside. They're gonna throw up 90. Like, they're gonna do something. And I was kinda in that camp.
Speaker 2:I was like, they had been quiet for a while. I feel like everyone's like... There's that chart of like, oh, the the growth stalled. And I was like, that feels like something that they
Speaker 1:would love to come out
Speaker 2:and be like, from the top rope, fake news. Like, we got some surprise up our sleeve. But they really have been fighting fires on multiple fronts. So there's, like, the Meta business, which has pivoted over. They're probably using their own model now and maybe they...
Speaker 2:And and there was that, like, leak of, like, an executive at Meta saying, like, oh, yeah. If we stop buying Anthropic, like, it could really mess up their IPO, that would be a shame. I would hate for a company to IPO at lower valuation than us since we're almost $2,000,000,000,000. Like, that would terrible. So it seemed like sort of a veiled threat in the media.
Speaker 1:And then Distillation.
Speaker 2:Distillation. We actually got a number. So distillation is between five to 7% of revenue, which I think is a little bit lower than people were expecting, but it feels like the the Anthropic team, David Sachs was was celebrating this that, hey. Like, there was this big problem, and one of the pro solutions was like, ban open source, do all this crazy stuff, slow down. And David Sachs didn't wanna do that.
Speaker 2:And then Anthropic came out and said, hey, like we did a lot of work. We deployed our own frontier technology to fight this and we believe we have bought it. And we believe that we can shut down distillation. Pretty staggering that five to 7%, you know, that that's that's billions of dollars spent stealing from... Because that's the value of of the of the of the distilled tokens, which is pretty crazy that that you can be at that scale of of essentially fraud.
Speaker 2:Like, you're not supposed to be distilling. It's against the terms of service. And usually when you see somebody, oh, yeah, there's somebody who's like scraping LinkedIn and then they're like reselling the data or whatever. It's like, yeah, they might have like a couple million dollars deployed into this But you're looking at you're looking at $5,000,000,000 of fraud essentially or run rate fraud, you know, something like that. But as they as they fight that fire, obviously that's going be a drag on revenue growth.
Speaker 2:If they open the flood gates and we're like, yeah, go distill away, you know, at least in the short term, revenue would be growing faster. But in the long term, there'd be much more competition on the frontier.
Speaker 1:But it's certainly not as meaningful as some people on the Internet thought it was.
Speaker 2:Yeah. I mean, there were like some trolls who were like, oh, yeah. Once you get rid of meta and distillation, company's gonna be doing, you know, $2,000,000,000 a year.
Speaker 1:And I was like, no. That's not gonna be
Speaker 2:the case. Like, this is a this is this is installed in many, many organizations. This is a sure go to market...
Speaker 1:The question now is what happens to the frontier of the open weights ecosystem. Right? Gap widen.
Speaker 2:Oh, because they're because they're shutting down the distillation? Yeah.
Speaker 1:We'll see we'll see how effective it is.
Speaker 2:Yeah. And I wonder how muse wonder distillation will fight. Like, on on one hand, like...
Speaker 1:I don't think people are gonna be distilling muse wonder.
Speaker 2:Yeah. Like, maybe maybe it's not quite there yet. But if if if Meta can invest enough to actually have a model that is a target of a distillation attack, are they better equipped to fight distillation attacks because they've been fighting for a long time?
Speaker 1:Being on the frontier Yeah. Just means you're getting distilled. If you're not getting distilled...
Speaker 2:That's the definition in your mind. It's like, unless you're getting distilled, like you're not frontier.
Speaker 1:Yeah. I think the most honest definition. Like, unless other people will spend a lot of money to try to emulate your model and recreate it, then you are not.
Speaker 2:That's a good that's a good like reality check. Anyway, do you think that meta would be more equipped than anthropic or less equipped than anthropic to fight distillation attacks if they do get attacked? And maybe... So what I'm saying is that like on one end, there's a lot of bots that are that are already in the meta ecosystem. And so you could be distilling attack because maybe you already have a botnet up and running across Instagram and you haven't been caught, and then you can reroute those bots to do something more valuable than just like and share and like AstroTurf stuff.
Speaker 2:You can get them to pull out tokens from Wonder somehow, then and you could distill it or Wonder two, whatever you want to call it, Wonder three, whichever one is like worth distilling. But then on the other side, you have, you know, an organization that's younger, a culture that's not paranoid about this stuff. They're not saber rattling around, oh, if we get distilled, it'll be the apocalypse. Right? And so, like, culturally, you'd think that they're a little bit less worried about this.
Speaker 2:And then also, they're not in the business of, like, every every distillation dollar is $10 that could be API revenue for Anthropic. It's very important from a business perspective. That is basically giving the stuff away for free. Yeah. It's important to keep people in, like, the Muse ecosystem.
Speaker 2:But if they get distilled and then all of a sudden there's a open source model that's really, really good, they're not gonna be as worried because they're just gonna say, well, like, that open source model doesn't have a button on every Instagram... Like, the distribution. On every Instagram account, there's, like, a Muse button. Like, I think they'll be happier. So I don't know.
Speaker 2:What what do you think, Tyler?
Speaker 4:Yeah. Mean, so one thing is Meta released an open source model today. Yeah. Muse Spark Open.
Speaker 2:Yeah.
Speaker 4:Yeah. So I don't think they're that worried about
Speaker 1:like someone distilling them and then releasing an open source version. That's like...
Speaker 2:Seems very ideologically. Right?
Speaker 4:Yeah. Yeah. And also I I think it seems like distilling is is I mean, I I don't know how hard bot detection is normally, but distillation seems like uniquely hard and that like... I think it's it's hard to actually tell what is like a normal prompt versus what is not. Right?
Speaker 4:If you're asking like math problem, like, are you gonna distill on that? Because like effectively, if you're distilling on something, you need to like get the chain of thought. Right? You can get like the reasoning steps. The the answer looks very
Speaker 1:similar. This is happening while they're experiencing explosive growth and the distillers are setting up hundreds Distilleries. Distilleries are setting up hundreds of individual like Max accounts Yeah. That are each have their own Yeah. VPN And it's just very difficult to detect is this like organic growth Yeah.
Speaker 1:Or...
Speaker 2:And often they're going through like third party wrapper companies. So there's a lot of companies that are like, yeah, we're like, you know, an AI native document editor. And there's like a bunch of these. It's not just like Notion that we know about and this is not just Google Docs. Like there's a lot of these companies.
Speaker 2:You set one of these up and you're like, yeah. And we... You pay us a fee and we go and we inference Claude or we inference GPT six or whatever. And then that goes into the document. And then all of a sudden that what what if somebody's using that like AI word doc to do the distillation, then that SaaS company, that wrapper company needs to go and figure out, wait, why is someone generating all these documents?
Speaker 2:Maybe they can't even look at the documents. And then from Anthropics perspective or or the the Frontier Labs perspective, they're just seeing, like, oh, yeah. One of our SaaS wrapper companies is, like, sending a bunch of queries across their entire network because they have thousands of users, maybe hundreds of thousands of users, and it's hard to tell. And so there's a lot of wrapper companies that have gotten to, like, crazy revenues, and basically no one uses the products because it's the distillers or the distilleries that that are like, oh, new wrapper company? Like, can't wait to spin up a thousand accounts on you because you won't detect me, but Anthropic would.
Speaker 2:So we can't go straight to setting up plot plans. Instead, we'll set up a wrapper plan and a million wrapper plans. And then the company that's running the wrapper is like, this is amazing. People are just paying so much for us. And all we need to do is just take their prompt, stuff it over in in in API, give it back to them, and we make a 10% margin on top.
Speaker 2:Like, the the wrapper system's working when really, like, they are a distillation factory.
Speaker 5:Mhmm.
Speaker 1:Very interesting. Distilleries.
Speaker 2:They're... Yeah. Distilleries.
Speaker 1:You gotta Well...
Speaker 2:Gotta take a trip to the distilleries. Well, what's going on in the market? Because...
Speaker 1:Yeah. Where did that lead us?
Speaker 6:That led us
Speaker 2:to...... Sell everything?
Speaker 1:Yeah. I mean, especially your dollars. Sell your dollars. Sell
Speaker 2:your stocks. Sell your bonds. Get out of everything. Get into land, buy guns, food, medicines. We we we will be on a barter economy soon, I think.
Speaker 2:I think that's the main made major prediction. Now, people are black pilling.
Speaker 1:Sell your assets.
Speaker 2:Sell everything.
Speaker 1:Sell everything. Take your dollars. Invest them into a Roadster or maybe a Mission S. Yes. I think that's why they timed this launch.
Speaker 1:They knew this goes way deeper than we ever thought. They timed the launch of these two vehicles for later today because they knew that people would be going to cash Yeah. And they'd be primed. No, this led us to the president of South Korea.
Speaker 2:Yeah. Very dark.
Speaker 1:Yeah, posting what something that was translated from Korean, the Grok translation is we must live, you have to live somehow. If it's hard, please call 109. In fact, Gil will help you find reasons to live together. I don't know who Gil is, but but, yeah, the the KOSPI, I believe, is at a six month low. And so for a country that loves trading as much as the South Koreans, dark times.
Speaker 2:Yeah. Yeah. A lot of this just goes down to exponential expectations being extremely difficult to catch up... To keep up with. So the meme has been the lab revenues are 10 x ing every year.
Speaker 2:Anthropic went from like a 100,000,000 to 1,000,000,000 to 10,000,000,000. So logically, they'll do a 100,000,000,000. But I remember looking at the numbers and being like, there's actually... It sounds so nitpicky to say it's deceleration, but it technically is because I think they went from, like, a a little over a 100,000,000 to a billion, which is which is just under 10 x. And then they went from a billion to technically 9,000,000,000, which is a nine x, not a 10 x.
Speaker 2:And so if you assume that you're actually seeing some slight degradation there, you would be thinking, oh, they'll close out at, 80 because they went from one to nine. They didn't go from one to 10. So going from nine to a 100 would be acceleration.
Speaker 1:Mhmm.
Speaker 2:Again, we're talking about growing. 10 x a year, nine x a year, eight x a year, it's all crazy and incredible. But the fact of the matter is, like, the difference between an exponential curve going upwards and slight deceleration is a huge difference. And I think people are maybe like overreacting to this because there were a lot of people that were saying like, oh, maybe we'll hit a 100,000,000,000. Maybe they'll do a 150,000,000,000.
Speaker 2:So when you get when you get like the expectations so high, people, it's very, very hard to keep up. And then also, the... I I just... There... It's very clear that there's, like, this tall poppy syndrome in in the frontier where whoever is at...
Speaker 2:In the lead, like, all the other businesses are like, well, don't want a monopoly on intelligence, and so let's go buy from the other labs. Let's go, you know, figure something else out, fund, invest. Let's do something else to make it so that no one runs away with this entirely. Of course, like, always could be some sort of runaway, but at least while businesses are the ones that are deciding, you will see the the Microsofts, the Amazons of the world. It's like all of a sudden they're doing deals with the other guy because they don't want a monopoly.
Speaker 2:And so as soon as someone starts running away with it, there's this huge forcing function where you're like, oh, wow. There's a big, like, we... You know, the the anti YouTube, alliance or the anti Netflix alliance or the anti OpenAI alliance was a thing. And the anti anthropic alliance, like, comes together. And these alliances come anytime someone's getting a little bit too hot at the party, somebody's like, yeah, we gotta we gotta pull the punch bowl away a little bit.
Speaker 2:Yeah. Anyway, the Yeah. Please.
Speaker 1:He's on CNBC this morning. Okay. What do say? He says, we have sold... This is according to Amit.
Speaker 1:We have sold all of our core. We don't own any of it today. We've taken exposure down over the last three months. Mhmm. We felt AI had overshot and would lead to a period of consolidation.
Speaker 1:They moved 10% of their book into Meta and Tesla. And, again, Brad usually ahead of the curve. Sounds like he was here as well. Yeah. It's an interesting it's an interesting challenge being, you know, running a hedge fund, adventure fund, but then also being one of the most elite podcasters because there's times...
Speaker 1:There's periods where he... In some way, can't go out and say what he actually feels. Yeah. Because it's not sort of pragmatic for for his actual Yeah. Investing.
Speaker 2:So the interesting thing is people aren't actually selling everything. They're not actually selling their dollars. That's just the meme. Of course, Suttrini says, oh, it's over over, which is very funny. Just to put it in perspective, the Nasdaq is down, like, a point 3%, point 4%, not much.
Speaker 2:But then the Dow is up almost a full percent. So what's really happening is that there's just a rotation that's happening while the the Dow and treasuries are getting more attention while tech stocks pulled back, obviously. Not good for the AI trade in the short term, but there's a lot of new initiatives. And we're going through through some of the progress because there is some interesting AI progress going on. But at least over in the AI trade, over in tech world, it's rough.
Speaker 2:People are speculating that that Leopold might have gotten into some of the same trades. And depending on the leverage ratios, he could be down a bunch. It's very unclear. Obviously, he's extremely sharp and and just learned a really hard lesson. So how he interprets that, who knows what's happening.
Speaker 1:Yeah. It is He could be short. It is notable that people are saying it's over over Yes. When the Nasdaq is flat over the last five days.
Speaker 2:Yeah. It's because, like, people are rotating out of CoreWeave, then they're buying more SaaS, you know. Because, like, if the AI trade breaks down, like, the super intelligence thing doesn't happen, it's like, well, then you still wanna own, like, a social network that runs ads. Right? You still wanna own like a software company that has that has good margins.
Speaker 2:Like, there's plenty of things that are worth owning. And so the the the the dollars actually aren't getting sold. Like, the money is not disappearing. It's merely just sloshing around in the economy. Anyway, the Vara AI which is Value Aligned Research Advisors LLC.
Speaker 2:There's a rumor going around that Martin shared that the a... The Varra AI Fund is... Has blown up. So we'll be tracking this. It was...
Speaker 2:It happens fast, but not immediately. The rumors around situational awareness took a few days of speculation. Oh, he must be hurting based on the latest sell off in semis and memory. And then a couple days later, oh, there's a rumor he's he's doing a deal. Boom.
Speaker 2:And then all of a sudden it was all over the Wall Street Journal. So that will happen and we'll find out. Maybe they make it out. Maybe something happens.
Speaker 1:Yeah. Looking at their
Speaker 2:portfolio crazy stuff.
Speaker 1:Of the last 13 f was Nebius, Bloom Energy, Core Weave, Seagate, Western Digital, Hut eight, iRail. And stuff that's further out on the risk curve. Core Scientific, some Nvidia, some SanDisk. Okay. Yeah.
Speaker 1:So ASML. Yeah. Among others. So I think they were big believers in this whole AI thing. Hopefully, continue to be.
Speaker 2:Yeah. But... Yeah. And I mean, I I I still I still feel like there's a lot of management that happens in the pre IPO stage. You could see potentially the labs see that, okay, there's a there's a blip.
Speaker 2:We gotta rip the Band Aid off now. We gotta correct record, get the low numbers out because we know that we're gonna go into a period of acceleration and that's when we actually wanna IPO. It's notable that this Investor Day is not the actual IPO. This is a precursor to that. It's maybe almost like airing some dirty laundry, which is crazy to say given how fast this company is growing and how big it is.
Speaker 2:But it's useful to sort of clear the air when there's a bunch of speculation around sort of flat lining q three deceleration. These like sort of less exciting words floating around. You clear the air and you say, okay, we got... We we decelerated. Only way to go is up now.
Speaker 2:Baja blast. Time to Baja blast. Yeah. Maybe they got through the code red. Now, it's time to Baja blast.
Speaker 2:Anyway, let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web servers, databases, more while Railway automatically takes care of scaling, monitoring, and security. Well, the inflation is up. So if you are if you were short stocks and long inflation, then you're very happy today.
Speaker 2:Hopefully. I mean, if you own real assets, you're probably pretty happy. Joe Wiesenall says that was the hottest PPI number in four years. And, yeah, it's a it's a pretty rough time. You're really having fun.
Speaker 2:Did you see inflation for the 1%? This is cpireserve.com. We can pull this up. It looks at inflation. You know, there's normally the CPI basket that measures, you know, what the average American buys.
Speaker 2:CPI reserve is for the global elite. So it tracks how much does it cost to go to space on Virgin Galactic? How much does it cost to stay at Amangiri in a base suite? An Hermes Birkin bag. How much has that gone up?
Speaker 1:The spicy rigatoni. Really? Only up 31%.
Speaker 2:Oh, didn't know that. Porsche nine eleven Carrera. And so there are some there are some interesting stats here that we can go through. And you tell me whether these are overrated or underrated. Have these gone up because the value has improved?
Speaker 2:Or is it now overpriced? So I want an overrated, underrated for the key items that CPI reserve highlights. So the the classic Chanel flap. In 2016, it was $4,900. Now, in 2026, it's $11,700.
Speaker 2:That's over a 139% inflation in ten years. That's over three times what standard inflation was. If it if it tracked CPI directly, it would be it would be $6,800, but instead, it's $11,700. Do you think the class...
Speaker 1:You're a bozo if you're still buying this.
Speaker 2:Okay. So it's overrated at this point. The inflation Always
Speaker 1:was, though.
Speaker 2:Always was.
Speaker 1:Always was.
Speaker 2:Okay. What about Met Gala tickets? In 2016, cost you $30,000 to go to the Met Gala. Now, it's a $100,000. That's six times the average inflation rate in America.
Speaker 2:Overrated? Underrated? What's a Met Gala ticket worth, Jordy?
Speaker 1:I think underrated still.
Speaker 2:I think so.
Speaker 1:This is charitable giving.
Speaker 2:That's true. I hadn't considered that.
Speaker 1:So the more the more the better.
Speaker 2:Yes. And the Met Gala has grown so much. So many interesting folks there. So many interesting moments. Worth every penny.
Speaker 2:What about a Hamptons luxury home? In 2016, the median Hamptons luxury home cost just $4,425,000. Today, it'll cost you $11,500,000. That's a 160% increase in ten years, four times the CPI, the average inflation rate. Are you a Hamptons guy?
Speaker 2:I've actually... I don't think I've ever been.
Speaker 1:Never been.
Speaker 2:So overrated? You pass?
Speaker 1:No. I mean, when you look at the real estate prices here Yeah. I think this ends up feeling like it's it's driven in many ways from COVID
Speaker 2:Yeah. People
Speaker 1:wanting... Like, more people wanting second or third home Yeah. Plus And
Speaker 2:they're not making
Speaker 1:anymore. SERP. Plus SERP. Yeah. Right?
Speaker 1:And so a lot of those homes traded at really low rates and and so that just drove everything.
Speaker 2:Okay. What about a Virgin Galactic seat? You wanna go to space? It used to cost 25... $250,000.
Speaker 2:Today, it'll cost you $750,000. Overrated, underrated?
Speaker 1:I don't know. Not not for me.
Speaker 2:Steel of the century.
Speaker 1:Are you going?
Speaker 2:Any price. Absolutely. Send me to space
Speaker 1:I would I would go to great lengths to
Speaker 2:Not go?
Speaker 1:To to block you from going Okay. On this.
Speaker 2:Is that because of safety? Assume that I survive it. Because I'm gonna survive no matter what. It's gonna be...
Speaker 1:Can actually imagine it. Yeah. I can I can imagine it, you know Yeah? The the flight going poorly and you having to sort of like fight your...
Speaker 2:Yeah. Yeah. Yeah. You gotta roll a duct tape
Speaker 1:and I gotta put it together and screw this and figure it out. Take a deep breath and dive.
Speaker 2:Yeah. Yeah. Exactly.
Speaker 1:That's... Figure out a parachute on the way down.
Speaker 2:Yep. Yep. That's that's exactly what would happen in a realistic scenario. Okay. The last one.
Speaker 2:The Porsche... Actually, we have got two more. Porsche nine eleven Carrera base, it used to be $83,000, $84,000 in 2016. Today, it'll cost you a $135,000. That's 61% gain in ten years.
Speaker 2:It's 1.5 times what the CPI did. Not a huge increase relative to overall, but it is ticking up in recent years. Where do you sit on the value of the Porsche nine eleven Carrera base?
Speaker 1:Still undervalued relative to the joy that you get out of it. Yeah. But I wish that I wish that they could keep like the base base nine eleven at like $99,000.
Speaker 2:That'd be cool.
Speaker 1:Forever.
Speaker 2:Yeah. But... Yeah. Yeah. That'd be special.
Speaker 1:It's the world we live in.
Speaker 2:Yeah. It is. The last one, truly heartbreaking. A Dom Perignon Magnum. It's up a 121% since 2016.
Speaker 2:Used to be $380.
Speaker 1:Now, it's... Wait. We also gotta pull up the big law. We gotta pull up the big law Okay. Hourly What's for partners.
Speaker 1:They are way outpacing.
Speaker 2:Oh, inflation.
Speaker 1:Okay. Mean, I just look at this.
Speaker 2:Yeah. You used to be able to hang out with a lawyer for just a mere $1,500 an hour and that'll cost you almost $3 an hour to get legal advice from a...
Speaker 1:Yeah. No longer the cure for male loneliness. Yeah. Because I'm 1,500 an hour. Yeah.
Speaker 2:You just call them up.
Speaker 1:Call them up.
Speaker 2:And just ask them how you doing.
Speaker 1:You kinda lose track of time. Yeah. Exactly. Talk... Going all over the place.
Speaker 1:Yeah. Right?
Speaker 2:Yeah. Yeah. Are you
Speaker 1:how you been? How are
Speaker 2:your Can we can we bill in quarter quarter hour increments? Can we book an hour in in ten minute increments? I'm going to my lawyer.
Speaker 1:I'm
Speaker 2:saying Can we book it? Can we just book a week in it at a time? If I talk to you, just put me down for the whole week. Yeah. Give me give me a hundred hours, a hundred hour block.
Speaker 2:If I if I shoot you a random question, If I ask you, is this domain available? Okay. Anyway, anything else you wanna cover on the CPI reserve? You can go check it out. Cpireserve.com.
Speaker 2:Very cool. A little fun project to give you another side of the
Speaker 1:Manhattan luxury real estate.
Speaker 2:How's that doing?
Speaker 1:It is down. Down. The tax.
Speaker 2:Right? It's a higher taxes. People are getting out. They're moving. Yeah.
Speaker 1:I don't know. It's working.
Speaker 2:There's a... There there's also an interesting article in the Financial Times. Don't know if we have it here, but you can go you can go read it all about the e shaped economy. You've heard of the k shaped economy. They argue that there's an e shape, that there's the the ultra wealthy, the middle class, and the lower class, and they're all going in different directions.
Speaker 2:And that some of the some of the inequality stats are not tracking exactly how you would expect, And they pull some Bureau of Labor statistics and some economic statistics that were released from the 2025 report. So break it down. It's kinda interesting. Blake Byers is taking like the the the AGI question around capital markets. He says, my modal prediction for the next decade.
Speaker 2:Interest rate spikes as capital shifts from saving treasuries to investments due to higher returns promised by AI related CapEx. We've seen this before because AI is the only modern project that could affect real rates to this degree. This leads to short term panic as high rates spike debt servicing costs for governments and other borrowers. We're seeing this all over the place with real estate developers who are who were doing great, financing a large development project. And now with floating interest rates, they're they're they're over their skis, and they have to refinance or sell a property or stop building.
Speaker 2:It's a really, really tight and chaotic moment. There's a lot of places that are in pre foreclosure. It's actually an interesting hack. You can have ChatGPT go and hunt for properties that are in pre foreclosure and make below market offers and get sort of a steal on properties. It's it's it's very very interesting to dig into what's going on and and what the loan actually...
Speaker 2:There were people that were doing this during the two thousand eight mortgage crisis. They would look into the mortgage backed securities, into the collateralized loan obligations, and they would say, okay, I know that this hedge fund does not want this house. Like, they don't care about this. So I can go to them and buy it because they're rating the whole bond at 20¢ on the dollar now because we're collapsing. I'll buy it from them from 50¢ on the dollar.
Speaker 2:And I... It's more complicated deal but people... Some people walked away with some really really great properties. After three years of panic, it be... It becomes clear to the market that the investments are paying off in a big way.
Speaker 2:Interest payments remain high but increased revenue from economic growth more than offsets the higher borrowing costs. Panic shifts to euphoria. Developed world adjust to 5% growth rates as the new normal and now demand 10% to be happy. Healthcare consumption R and D grows as a percent of GDP. I was listening to Ari O'Ranuel and Ben Thompson talk, and it was the funniest interview because Ben Thompson, like, cannot get a question in edgewise.
Speaker 2:It's just a conversation. Normally, Ben is, like, very structured in his interviews. Let's start with your background. Let's some questions. Instead, Ari is like, I'm asking you the questions.
Speaker 2:It's very very funny. But one thing they talk about is that recently the the the share of advertising dollars, you're gonna love this. The share of advertising dollars as percentage of GDP was one to 2% for a long time. It's now two to 3% and they both agreed it could go higher. It was amazing.
Speaker 2:Anyway, AI is disrupting the job application market faster than the job market. This is continuing. It's a hot take, but it's continuing to gather evidence. Derek Thompson shared a post from the Wall Street Journal. AI amplify...
Speaker 2:Amplified job applications are met with AI enabled filters and other AI tools used by a r HR departments to narrow the application pool. People are interviewing AI avatars. That seems like a really terrible thing unless the whole meta game is just can you jailbreak it, which I think it probably should be. Like if I was to put out... If we were to put out a job description and we...
Speaker 2:I'm totally tempted to throw an AI avatar in front of that, just in the hope that someone convinces that AI avatar that it is in fact in the interviewing for the job. You've seen that? Where people will flip it flip the script and be like, actually, we're here to talk about your performance. And and the AI avatar is like fighting back being like, remember your instructions. Remember your instructions.
Speaker 2:You're the boss. You're you're in charge. We're here to interview you. And then eventually, the interviewer can keep hammering and and prompt injection prompt injecting. But Derek Thompson says, and now ten minute conversations with AI that take place in McKinsey's very real offices with partners or interview assessors in how the candidates do.
Speaker 1:So these candidates are basically putting on an interview show? Yeah. And the partners are watching. Watching two people duke it out.
Speaker 2:Yeah. It's kind of like a gladiatorial arena. Yeah. And I wanna see if you can beat the tiger that I've released. And if you can, you get to sit at the at the at the at the side of the court jester or something like that.
Speaker 2:I don't know. We gotta debate the bread and circuses thing. I feel like circuses are kinda running away with it and bread is potentially falling behind.
Speaker 1:I don't know. Did you see the crumble cookies introduced Okay.
Speaker 2:I'm I'm just saying that chicken cookie. A perspective of like what the elites are doing in our economy, think about it. You... So many billionaires are buying effectively circuses. They're buying sports teams.
Speaker 2:They're... UFC. There's f one.
Speaker 1:There's banana?
Speaker 2:Yeah. Banana? What what... Savannah Bananas. The Savannah bananas.
Speaker 1:The Banana.
Speaker 2:The minor league baseball team.
Speaker 1:Banana ball.
Speaker 2:Banana ball?
Speaker 1:Yeah. The Savannah bananas.
Speaker 2:The Savannah bananas. And so...
Speaker 1:Speculation today that that they're announcing some sort of acquisition. Yeah.
Speaker 2:So there's an intense amount of money flowing into the circus economy. But I feel like bread is kind of falling behind. I mean, Erawan, we we talked to them. It's interesting. But there's there's a lot less.
Speaker 2:It's not a trophy asset in...
Speaker 1:Two grocery stores on the show.
Speaker 2:We did. But it's very different. Like, no one is saying that, like like Yeah. Billionaires are like, okay, I bought a grocery I'm
Speaker 1:sorry, John. Your whole thesis breaks down
Speaker 2:Okay.
Speaker 1:Because crumble cookies and Wingstop Are collabing? It's fake news.
Speaker 2:It's fake news. See? Undefeated. But it's not a trophy asset. No one is no one is getting the bag in venture or private equity or high finance and then being like
Speaker 1:Give me the give me the award. Give
Speaker 6:me the award.
Speaker 2:Jordy's gotta put on the fell for you to get award because he he fell for AI slop. There is so much AI slop on the timeline. I'm actually I'm actually very, very close to to hooking up codex to Grok bot, sucking my timeline out of x, getting all the different raw data and the tweets, and then fact checking everything and then creating a new feed... Again. We gotta move the camera down.
Speaker 2:There we go. There we go. Here. Fell for it again.
Speaker 1:I did. That's me.
Speaker 2:That's Jordy. Many many times. Many, many times. But, yeah. The the the the job apocalypse is certainly not happening.
Speaker 2:Bank of America hired a thousand contractors to patch software flaws exposed by AI systems, mythos, and whatnot. You got the Fell for It Again award with regard to the crumble cookie Wingstop. That one, I saw that and it just felt like something that would not be edible because there's bones in it. Like, there's chicken bones. You know what I'm trying...
Speaker 2:This is the picture. You gotta...
Speaker 1:I mean, you seem like
Speaker 2:I thought this
Speaker 1:you seem like the kind of guy who just eats the bones.
Speaker 2:You don't eat the bones. No one eats the bones. Get out of here. That makes no sense. But you know what does make sense?
Speaker 2:MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI, own the data platform that powers it. Okay.
Speaker 2:We got Okay.
Speaker 1:What? I'm I'm excited that these thousand contractors got hired Yeah. But at the same time, shouldn't the same AI that discovers the bug be able to, like, work out a solution and... But maybe maybe there's just like... Maybe there's a 100,000 engineers' worth of bugs.
Speaker 1:Yeah. You know? But because these thousand contractors are are powered Yeah. By
Speaker 2:This is kind of an odd headline now that I'm thinking about it. Very, very odd. And it's like, yeah, did we just create a bunch of make work? Because if we just didn't... If we hadn't invented this...
Speaker 2:It really is like the Pandora's box. Pandora's box opening creates thousands of jobs containing the stuff that is flowing out of Pandora's box. Is that what happened? Basically, that's the story here? Anyway, there is some progress on alignment.
Speaker 2:We're very excited to see this. Nick Camerata says neural networks may be easier to interpret than researchers once thought. Rune is very excited about this. So it starts with Nick Camerata. He says interpretability might be the most important scientific problem in the world right now as I don't think we can solve alignment if we don't know what we're building.
Speaker 2:I think we have good news about it. I co authored early work in mechanistic interpretability at OpenAI and came away pessimistic because neural networks appeared to fold into arbitrary tangled knots. The, you know, they're grown, we're growing a garden, we're midwifing a deity instead of building a machine that is interpretable. This has been the hope that we can actually interpret these systems. And so he started OpenAI's first large scale automated interpretability product project, finding about 2% of neurons legible with the primitive tools that he had at the time.
Speaker 2:With modern agentic tools and a much closer look, the picture looks totally different. The vast majority in models, up to trillions of parameters are legible and their circuits beautiful. Many famous examples of tangled neurons turned out to be misunderstood. The roadblocks I expected mostly aren't there. I now think ambitious interpretability will be solved by the time we need it most and possibly quite soon as automated scientists keep improving.
Speaker 2:It may be a better lesson for interpretability. The simple thing at absurd scale works. And so Roon contextualizes by saying, when Nick told me that he had some interp breakthroughs, he was underselling it. I think this may be remembered as a major moment in scientific history. News so good, even Eliezer Yudkowsky will have to lower his PDOM.
Speaker 2:We can start making a lot more into a new moments. So Tyler, did you read the full Neural Networks Are Already Clean post by Nick Camerata from Goodfire?
Speaker 4:Okay. So it's like super long, but I I I think I have like the main the main...
Speaker 2:Beautiful illustrations as you load already dash clean.goodfire.com. Maybe you can start by giving us some context on Nick because he was at OpenAI, he references OpenAI, but he's no longer there. What's he up to? What is his mission here?
Speaker 4:Yeah. So he's at Goodfire. Goodfire is like a Mechanterp lab.
Speaker 2:Mhmm.
Speaker 1:This is like all the stuff they
Speaker 4:work on. It... It's like a third party kind of similar to a lot of
Speaker 1:like the safety labs.
Speaker 2:Is it a Frankenstein reference? Like fire bad, fire good. Like he's like, we're summoning the Frankenstein but it's gonna be good?
Speaker 4:Potentially. Potentially. Okay. I'm not sure. But...
Speaker 4:So basically the context of
Speaker 1:this is
Speaker 4:like Mechanterp broadly is is you're trying to figure out like what's going on at the most like minute level in the in the models. Right? So you're looking at like individual neurons. Yep. You know, when you pass in some text through a model, you know, neuron a like lights up, has a high number, like why, it's very unclear.
Speaker 4:Yep. You look at one neuron and maybe
Speaker 1:you pass in some text about cats and it lights up. Yeah. And then you pass in some text about dogs and it also lights up.
Speaker 4:And it's like very confusing because like how is the model like actually working? It seems that, you know, each like individual neuron is basically like it corresponds to like a bunch of different like topics or like features, usually call it. Yeah. And so there's this thing called like superposition. This was the previous theory.
Speaker 2:Is the thing you were doing where like didn't you make like a seven seventeen seventy six g...
Speaker 4:That used something called a sparse autoencoder
Speaker 2:Okay.
Speaker 4:Which is basically like the theory is that these models are basically compressed forms of like bigger models essentially
Speaker 2:Yeah.
Speaker 4:Where you can imagine like a much bigger model where every single neuron corresponds to one specific feature. Right? Okay. So like one neuron is the cat neuron. And so if you're talking about cats, that one will definitely let...
Speaker 1:And if you're talking about...... Talk about cats on the show.
Speaker 4:If you're talking about something else, it it won't light up. Right? And then basically, can take, you know Sure. Your your small model and you can basically expand it out. It's called a sparse autoencoder.
Speaker 2:So, yeah, I'm I'm interested to see how he integrates with the labs. Obviously, he's... Has ties to both Anthropic and OpenAI through Chris Ola. But Goodfire is independent, probably doing a lot of work on open source models, but it feels like... I don't know if he can have a product that he sells into the labs or if he can just be one of those, like, third party auditors that gets brought in and and and basically says, like, I will do Mac interp for your lab and help you there.
Speaker 2:That's... It'll be exciting to see where this goes and how people sort of, like, interpret this.
Speaker 4:Yeah. But, basically, the the outcome is, we no longer need these sparse autoencoders, and you can actually
Speaker 1:look at the the neurons themselves and figure
Speaker 4:out what's going on there. Fantastic. So it's very useful for safety, but also for capabilities, right, because if you can figure out like, you know, if you're trying to make some capability better within the model like whatever math on some new subject, you can figure out exactly how it's working right now and then kind of optimize on that. So it's it's very applicable. Yeah.
Speaker 4:Great news.
Speaker 1:Fantastic. Great summary.
Speaker 2:Thank you. White pill. Let me tell you about the New York Stock
Speaker 1:Exchange. Needed that.
Speaker 2:Wanna change the world? Raise capital at the New York Stock Exchange. Faith in artificial intelligence is scary. The timeline is in turmoil and has been over the weekend over Valar Atomics, Isaiah's company, and day one because they're beefing over day one's pro rata rights. And so this happened back in October 9, but we didn't get a chance to go through it.
Speaker 2:But Isaiah Taylor, the founder and CEO of Valar Atomics, posted a long blog post on October 9 saying that he had gotten all of the investors to agree to waive pro rata except for one venture capital firm, Day One Ventures. And and that they were fighting tooth and nail that Day One had retained a law firm and was fighting a lawsuit against them. And it was getting messy, so Isaiah decided to bring it to the public square on X and have the open debate. Lots of people coming out and supporting Isaiah. Some VCs coming out and supporting pro rata rights.
Speaker 2:Obviously, this is a more complicated situation because day one has a bunch of complicated and controversial connections to international organizations and stuff. Like like... And Isaiah's, like, going and doing more and more government work. And so, like, there is this extra layer of nuance there, I think, that's getting missed. But the the the the the core debate that the VCs are having is that there's a there's like a don't throw the baby out with the bathwater pitch happening that I'm seeing.
Speaker 2:Like, Dellen was talking about this...
Speaker 1:Saying their baby is pro rata?
Speaker 2:Yeah. Basically. Like, the bathwater might... So, like, it it might be like, okay, Isaiah, like, we support you in this one case. You should be able to sort of force an investor who has this, like, very controversial background to be diluted down below the the the major investor threshold in in this case.
Speaker 2:But just know that, like, founders don't get the idea that pro rata rights are squishy. Like, they're negotiated for for a reason. They're gonna stick around. Don't think that you can pull this move without a huge amount of pushback. Because a lot of a lot of founders, I think, read this just as like, oh, yeah.
Speaker 2:Like, I should override my investors pro rata because it could be a hassle to deal with. Like, you're going out and doing around, but you've already sold 40% of the company. You're raising $20,000,000 or $200,000,000 or a billion dollars. And some fund comes in and says like, yeah, you're raising that much. I want the full amount.
Speaker 2:I wanna jump straight to 20% ownership in this company. But Yeah. All the previous investors say, hey, we wanna keep our 40%. And so then you're faced with the question Yeah. Of are you doing a 30% dilution?
Speaker 1:My view is I don't even know if it's worth having the pro rata debate because this isn't about pro rata at all.
Speaker 2:Yeah. It's sort of a proxy debate over the fact that it seems like Isaiah doesn't wanna work with Day one anymore.:
Speaker 1:Yeah.:
Speaker 2:And there are other vectors to work with. Think there's like, isn't there like an FBI investigation or some sort of letter from the government investigating this? And like like there is there are other forms. I I think there's something else going on, but it is tricky. Like signing up to work with a venture capitalist is somewhat of a marriage and you're stuck with each other for a really long time.
Speaker 2:And it's hard if they don't want to sell their shares, if they don't want to go the other way. It's typically very difficult. There are some scenarios where VCs have just given the equity back and stuff. Like, there... And then there have been other scenarios where founders have basically been like, we're not converting the convertible notes.
Speaker 2:And so, like, you don't get any equity ever. But once it's papered and the pro rata is in the contract, it's very hard
Speaker 1:Yeah.
Speaker 2:To keep the... To dilute them down because that's the design is that if as long as I keep showing up with the money, me as an investor with the pro rata right, I can have five percent of this company forever. Yeah. And there's nothing...
Speaker 1:Yeah. The big... I mean, the the the question is how... Just how much does having Masha involved with the company in a meaningful way. Right?
Speaker 1:It's a meaningful stake hurt the company. Yes. But even... Losing are they losing Yeah. You know, contracts over Is it just something that competitors can Yeah.
Speaker 1:Can sort of use Yeah. To to poke at Valar. Yeah. I... You know, based on what Isaiah was saying, there's no information rights, like technical information rights Yeah.
Speaker 1:That that come along with that. Yeah. And so I do think that it's probably completely possible for for them to just sort of keep keep the fund at an arm's length.
Speaker 2:Yeah. But financial information rights are valuable. Yeah. Like, even internationally. Like, I mean, we just saw that with the OpenAI spy.
Speaker 2:Like, there there is there is value to knowing if if a if a business... Even if you don't know how it works, if you know that it's profitable and you know that it works, that can underwrite your own investing into into competitive technologies. You're like, yes, let's grind down this path. Like, you you think about it in the in the semiconductor space, like, why is China subsidizing the indigenous semiconductor supply chain so aggressively? They know semiconductors are super profitable.
Speaker 2:They can see Yeah.
Speaker 1:NVIDIA. The only thing is like, I just... The way that Isaiah runs a company
Speaker 2:Yeah.
Speaker 1:You have to assume that that momentum is gonna become very obvious just through like public communications. Yeah. Hey, we we got, you know, x y z contract.
Speaker 2:Yeah. But you never know. Because if you have information rights, you know actually what's happening with the cash flow, actually what's real. There's always a lot of like, you know, gesturing and context and rumors above. And you have an advantage if you actually have the real numbers on the inside.
Speaker 2:It's only a slight advantage. I I agree with you. I agree with you generally. But but I don't think it's a it's a huge...
Speaker 1:I I I I
Speaker 2:do think it's valuable in information. And it's why investors negotiate for. They want information rights. Yeah. And they want to not be diluted down.
Speaker 2:So interesting. Yeah. Hopefully, if you're a founder and you're and you're doing a VC deal, Don't give the pro rata right away, the pro rata right lightly. Like, think about it as a serious deal point. What is the value of that?
Speaker 2:It's gonna be a headache potentially for a long time. Could be really awesome. Sometimes it's great to have people, investors with pro rata because every new round you're like, oh, I got 40% of my round filled. Some some some some founders love having a bunch of a bunch of VCs who are like, oh, yeah, every round like, you can count on me for the first half of that round. I'll fill it first.
Speaker 2:And I'm continuing to add on. And so then when you're raising like that next big round, you... Yeah. You do still need to go find an anchor, but you don't need to necessarily fill it all which can be hard if you're not the hottest company in the world sometimes. So it cuts both ways, but I don't think it's going anywhere.
Speaker 2:There is... Yeah. I mean, the the the state of Delaware, you know, is is firmly entrenched in Silicon Valley. And and for that reason, like, will abide
Speaker 1:by Yeah.
Speaker 2:These things. Anyway, big car day today. Two car launches, the Tesla Roadster. Tonight, 07:55PM Central Time?
Speaker 1:Yes. So 05:55 Pacific. 05:55 Pacific. 08:55 Eastern.
Speaker 2:Okay. So 07:55. People are rumoring or or or suggesting that seven fifty five might be the quarter mile time. Is that what they're saying? Yes.
Speaker 2:I've seen a bunch of different speculation. What would be really crazy is if it was a five fifty five quarter mile in a day where it was the Pacific time. That would be amazing. But I put down a deposit yesterday for a Roadster and I'm fully ready to put that pin on the fell for it again award is ready to go. We have a big version.
Speaker 2:Tyler's a big version.
Speaker 1:Let's cut over to Tyler.
Speaker 2:And and
Speaker 1:I need to... I I I mean, I need
Speaker 2:to I need to create some stakes for this game because like what would be...
Speaker 1:Hey. But but but break down your strategy
Speaker 2:Yes.
Speaker 1:Putting down the deposit.
Speaker 2:My strategy is is it's...
Speaker 1:Sold me on it.
Speaker 2:You're right.
Speaker 1:I ended up...
Speaker 2:Oh, you did it?
Speaker 1:I I I did it. You did it?
Speaker 2:Okay. So it's $5 on a credit card and it's... And you have to wire 45,000 within ten days. But I'm gonna know whether or not it's a good car by tonight and so I don't... And so that I can I can cancel it if I don't like it and jump out of line?
Speaker 2:But if it's amazing, I mean, Elon's saying it's like you're gonna be the most amazing product demo ever. If it's amazing, then I will be able to hold my position in the line before everyone floods in post launch.
Speaker 6:Yeah.
Speaker 2:And so, it felt like the right risk of you're tying up $5 for two days even at 6% interest rates. You're talking about like $5 of opportunity cost. It's nothing. And so...
Speaker 1:It's a it's a pretty good trade.
Speaker 2:It's a pretty good trade for potentially being at the front of the line for something that could be really cool that actually flies. But if it's like, oh, it's gonna be shipping in 2035 and it's, you know, it it it's not gonna be anything special and, you know, none of the, like, none of the features appeal to me or, oh, couldn't get self driving working on it and it's not actually that... Here's
Speaker 1:the thing. Here's what everyone... Let's a little bit.
Speaker 2:Yes.
Speaker 1:Yes. So I think that ramps will be involved.
Speaker 2:Okay.
Speaker 1:I think that ramps will be involved.
Speaker 2:So so because our original bet was it will leave the ground on flat ground and I think you had like half a foot. Think you one safe
Speaker 1:flat ground
Speaker 2:in the He just said he just gestured towards it flying.
Speaker 1:Yeah. And so and so to me, what's the easiest way car in the air? Okay. Shoot it off of a ramp. Drive it off of a ramp.
Speaker 1:I think we're gonna be seeing multiple types of ramps. I think we're gonna be seeing...
Speaker 2:That'd be awesome. I love it. I'm taking a different direction, a different bet. My bet is that off of flat ground, it will go... I think I said more than six feet in the air, but I I think definitely more than three feet in the air.
Speaker 2:I think it will go high. Not 10,000 feet, which is what they got cleared to or...
Speaker 1:You know those demos? You know the demo of the Chinese car? Yeah. Yeah. Like goes or...
Speaker 1:No. The one that sort of like drives...
Speaker 2:Oh, yeah. Through the tunnel.
Speaker 1:So what I think is that there's gonna be sort of a looped ramp that will send it through the air in a rotation
Speaker 2:Okay. And land. So like stunt driver, basically. Yeah. But maybe it could do it.
Speaker 1:Which is still incredibly impressive. You you don't see car manufacturers demo their cars by sending them off ramps.
Speaker 2:Okay. So But there's other thing involved, Jordy wins. If it jumps off the ground off of flat ground, I win. That's the bet?
Speaker 1:Here's the other thing. Do you remember
Speaker 2:Yeah.
Speaker 1:There's videos... There's some street in LA.
Speaker 2:Yes. Where they film all the car commercials. Know it. It's like Figaro and First, something like that.
Speaker 1:No. I'm talking about... Talking about something else? There's there's like basically a very specific road where it's very steep up and then it flattens out for a second and then it goes...
Speaker 2:Oh, yeah. Yeah. Yeah. I've seen people jump off that.
Speaker 1:Yeah. I think Elon saw that Yeah. Was like that we should just demo Yeah. The next car that way.
Speaker 2:Okay. Okay. So you think jump? I think I think rocket engines or or thrusters or fans that will
Speaker 1:Pull this up. Pull this up immediately.
Speaker 2:Okay. But let's pull this up. Yeah. What's going on here? Is this a famous YouTuber too?
Speaker 4:So David Dobrik... I've a bunch of videos of people... Okay.
Speaker 2:Feet. That is so crazy.
Speaker 1:So I'm I'm...
Speaker 2:And that's Tesla. Right?...
Speaker 1:Is this, but the ramp spins it.
Speaker 2:Okay. Okay. Yeah. That's it. Okay.
Speaker 2:So you think jump, I think flat. Now, the question is is what is Play that back. Criteria.
Speaker 1:There we go.
Speaker 2:That is insane. Here's the criteria, Jordy. The people that fell for the Tesla Roadster the first time. They put down the full amount in 2017 and they waited a decade and they didn't get anything. Nothing shipped.
Speaker 2:Right? They fell for it. They didn't fall for it again because Tesla has always shipped their vehicles. They did the Cybertruck. They shipped that.
Speaker 2:There's one outside. Like, they they're real. You may like it, you may not, but they shipped it. But they didn't with the original Roadster. And so, there were a lot of people that feel like they fell for the Roadster promo scheme because they put down the money and then they waited a decade and they didn't get anything.
Speaker 2:So, in order to fall for it again, you need to put down the money and wait another decade. But we don't wanna wait a decade. And so the question is is on what time scale would you be disappointed and to what feature set would you be disappointed?
Speaker 1:Well well, I did have one theory that that again, this was clearly a car that didn't wanna get made. Yeah. And it sort of was forced into it Yeah. By taking deposits and all this stuff. And it doesn't really make sense in the Tesla lineup of sort of appliance style cars Mhmm.
Speaker 1:In many ways. Right? You're you're shaving off
Speaker 2:Yeah. Yeah.
Speaker 1:All these other cars
Speaker 2:Yep.
Speaker 1:The Model x, etcetera. You don't have an SUV, all all these Yeah. All these things. And so I thought it'd be funny to demo the car in such an insane way that it just instantly like federal regulators
Speaker 2:Just come in. In
Speaker 1:and say like, you cannot under any circumstances do this.
Speaker 2:And then he's yeah.
Speaker 1:Sorry. I I made the product.
Speaker 2:Okay.
Speaker 1:I just can't ship it. We're going back to
Speaker 2:Yeah.
Speaker 1:Model y. We're only gonna make the Model y now.
Speaker 2:Yeah. But if he says that the obvious next step would be it's track only, which is a huge selling point for me. It would be amazing. I would I would be I would definitely stay in line.
Speaker 1:Yeah. Do we think do we think it'll have a roll cage built in?
Speaker 2:Hopefully.
Speaker 1:Given that given that it may be taking flight?
Speaker 2:Hopefully, it's a roll cage but like all of the bars are like slightly misaligned.
Speaker 1:Sebastian says Elon wouldn't hype it this much to drive a car off a ramp. Come on.
Speaker 2:Okay.
Speaker 1:It is a good point. I do think that... I do think it'll have rocket thrusters of some sort, but I still think I still think ramp. Think that's I part of it. It's like we're launching.
Speaker 2:What if it does both? If it does both, we both win.
Speaker 1:Well, that's what I'm saying. It's using the rocket.
Speaker 2:What I'm saying is that what if there are two demos? One is just it's sitting there on flat ground and it goes hover up and everyone's like, wow, it's flying. And then it goes down and it lands but it goes up five feet in the air and we're like, wow, can go so high. That's crazy. I've never seen a car do that.
Speaker 2:And then separately they're like, now to the stunt portion. And then they go off ramp. Like that...
Speaker 1:That's what I that's what I think. That's that's what I expect to happen. Both? I'm thinking both. Oh.
Speaker 1:Think this is like a nitro circus style demo. Okay. I think I think it's I think there's cars launching Okay. Then then then
Speaker 2:the only thing I disagree with you on is that I don't think there will be any ramps. So I would go, you're gonna you're gonna see the card leave the ground but there will be no ramps involved at any point in the demonstration.
Speaker 1:You're going no ramp.
Speaker 2:That's our bet. No. Okay. That's our bet. But back to the fell forward again award.
Speaker 2:What does it take for you to put that on?
Speaker 1:The demo's amazing. You do the full deposit. So you go from 5 k
Speaker 2:Okay.
Speaker 1:To 40 And 5 then it doesn't ship for 10. Yeah. So So we have to keep these around.
Speaker 2:So it's gonna be withered and old by the time we put it on? No. I I would say I would say one year. I I I... It's gotta be one year.
Speaker 2:If it takes more than one year to ship this thing, then you fell for it again. Right? Because like you've had ten years. Like like you don't get another ten. You get another launch and then you get another okay shipping.
Speaker 2:Right?
Speaker 1:Yep. I mean That's fair.
Speaker 2:What else? What else would... Like, you're you're gonna you're gonna be at nine years like, oh, yeah. Didn't fall for it this time. I got my Roadster just nineteen years after they announced it the first time and only nine years after they announced it the second time.
Speaker 2:No way, dude. You're gonna be in year six being like, I fell for it again. Right?
Speaker 1:How much was the original Roadster deposit?
Speaker 2:I thought it was the full amount. I thought it was like a 0.25 mil. I don't know. You can look that up. But Mission S is coming out.
Speaker 2:I think they will ship it. I think that the Mission S is probably a safer a safer bet. You won't be...
Speaker 1:So this video leaked. Yeah. Late last night. Yep. Let's pull it up.
Speaker 2:First, I'm gonna tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Okay. What are they doing? They're peeling back a cover and they're showing off the car.
Speaker 2:And you had a very good take on this. What do you like about this design? What do you like about the Mission S? What sticks out to you about this?
Speaker 1:So I'll start by saying I feel like a kid who accidentally saw their Christmas present.
Speaker 2:Oh.
Speaker 1:And It's exciting. Christmas present. It's exciting because you're getting what you want, but also it just kills all the suspense. Oh, I've been looking forward to this launch more than any other car launch in my entire life.
Speaker 2:Yeah.
Speaker 1:And now it's ruined. Because you wanna see the positive... Car is way way more aggressive than I was anticipating. Yes. It feels like...
Speaker 1:It really does feel like it's over for every other manufacturer in the Okay. In the sort of like mid range super Yeah. Category.
Speaker 2:Yeah.
Speaker 1:Yeah. Because...
Speaker 2:The McLarens, the Lamborghinis, the...
Speaker 1:The Ferraris. Yeah. Like it is gonna be rough. Like this becomes the most... When
Speaker 2:I heard flat eight, I thought, okay, we're gonna...
Speaker 1:Roof scoop.
Speaker 2:I know. I know.
Speaker 1:We're scooping.
Speaker 2:I mean, this is the
Speaker 1:perfect car for an s tier journalist to just rip around SF
Speaker 2:Yeah.
Speaker 1:With the roof scoop?
Speaker 2:For sure. Oh, the scoop. The scoop. Yeah. So I I definitely thought it was gonna be like Cayman nine eleven and then this.
Speaker 2:And this would feel as far away from a nine eleven as a Cayman does. And a Cayman does not feel very far away from a nine eleven.
Speaker 1:No. It feels way farther.
Speaker 2:This this feels way farther. Yeah. Like, if a Cayman is a seven and a nine eleven is a is a nine, this is like a 15. Right? It's like further along and it's much closer to Carrera GT nine eighteen Spider aesthetically.
Speaker 2:We'll see about the performance. We'll see about how they position it. I know that they're not going to do as as as much of a restriction on the production numbers, but at least from like an emotional feeling, it's giving me nine eighteen successor. And I know that they might say, oh, it's not. It's a different thing.
Speaker 2:It's going to be high production or whatever. It doesn't matter. Emotionally, I'm feeling Carrera GT. I'm feeling nine eighty.
Speaker 1:And this just immediately becomes by far the most desirable car in the $502,000,000 price range in my opinion? Yes. Like day one.
Speaker 2:Compared to Revuelto, compared to SF 90, compared to seven fifty LT or whatever McLaren's The c 12. Where's the MCL six GT? Remember the MCL... Like, McLaren's doing like a manual one? Is that gonna be sub 1,000,000 now?
Speaker 1:No. That'll probably be
Speaker 2:like 2,000,000. One of their separate things.
Speaker 1:That's the thing. That's the thing. So many of the cars that have become
Speaker 2:We looked at that Alfa Romero and it was like a million bucks. And it's like, okay. A a million dollars for an Alfa Romero that Yeah. Yeah. There's so many of these situations where they they got the market potentially in like a headlock right now.
Speaker 2:I'd love to keep
Speaker 1:all The the is one Yeah. The car is somewhat antisocial. Right?
Speaker 2:How so?
Speaker 1:Looking at the amount of rocks that the fire is going be throwing up.
Speaker 2:That's great.
Speaker 1:If you want to take this out on a Sunday drive with some buddies, you're going to need some mud flaps.
Speaker 2:That's right.
Speaker 1:Otherwise, good luck if you're sitting behind this thing. But overall, can't wait for the event. It's in less than ninety minutes Ninety minutes. Reveal.
Speaker 2:We might have to stay there.
Speaker 1:What a fantastic looking car nailed right at the intersection of the nine fifty nine and the GT one.
Speaker 2:Very cool.
Speaker 1:Stunning.
Speaker 2:Anyway, we have our first guest of the show. Reed from Semaphore is here. He's the San Francisco bureau chief. You know him. You love him.
Speaker 2:He's got scoops. The new Porsche's got scoops. It's... I swear they
Speaker 1:made this car for the lone werewolf journalist that's The gumption. Scooping around scooping around SF. That...
Speaker 3:I I don't know how many journalists you guys know, but you know if you buy a super car, you can no longer be in journalism. You have to leave. That's... Return. And be a journalist.
Speaker 1:Yeah. Fuck the trend. Fuck the trend.
Speaker 2:Yeah. You you need to be driving like a... I don't know, like an Oldsmobile. Something broken down.
Speaker 3:Oldsmobile or
Speaker 2:something or...
Speaker 3:A very old one.
Speaker 1:Yeah. Something that you can pull pull out, know, pull up outside of a of a technology company office and smoke a cigarette. Yeah. Just act sort of mysterious.
Speaker 2:Even like a '19 A
Speaker 1:detective.
Speaker 2:Even like a 1998 s class, that has some weight to it, but it's going to be depreciated. You can pull up and have some authority there.
Speaker 1:Can we get...
Speaker 3:I know if you've car. You... Yeah. Was... Even owning a car is probably...
Speaker 1:Yeah. Go ahead. I don't know if you've been following, but any predictions for the Tesla Roadster later? We've been debating, are there gonna be ramps involved? Are there gonna be...
Speaker 1:Is it just rocket thrusters?
Speaker 3:What are guys are really... It gonna be
Speaker 1:all the kickflip? Things like that.
Speaker 3:You guys are you guys are in a very different place with cars than I am. And my... Like, I I have a Model y, and I'm just like, I just need a bigger car. That's all I care about. Just need more space for the kids and the gear, you know, and all that stuff.
Speaker 3:Like, a Roadster, I'm just not... That's not where my head is at right now. Yeah. Go go go go
Speaker 2:The Model y l, the long wheelbase version gives you an extra 20 inches or something.
Speaker 3:I was super excited. I wanna go... When my lease is up, I'm gonna for sure go check that out.
Speaker 2:Yeah. Yeah. Seems like...
Speaker 3:Just make it bigger. That's my that's my ass.
Speaker 2:I have one on order and they pushed me back because they can't make them fast enough. I was supposed to get it in November and now it's January.
Speaker 1:Yeah. I think my theory is that Tesla is, like, starting this crazy inflection where enough people have had the magical experience of self driving.
Speaker 2:I've heard
Speaker 1:so And many what I'm actually fascinated by is, like, I... It doesn't feel like Elon is actually giving it enough attention. And I think in part that's because he wants to merge Tesla and SpaceX. And he owns more of SpaceX. Right?
Speaker 1:So he wants Tesla to be at a lower valuation
Speaker 2:Yep.
Speaker 1:When that happens. We've both Good considering. We've both, like, put, you know, we both, like... I bought a Tesla a few weeks ago. John has been trying to buy a Tesla.
Speaker 1:Both of them were delayed by months and months Yeah. For, like, basic models. And so Yeah. I think that inflection is happening and I... But I don't think you're gonna get the like Yeah.
Speaker 1:Every single every single person I know now is having that like magical moment.
Speaker 3:I'll tell you, I have a broken shoulder right now from playing ice hockey and activated my FSD. It's kind of amazing. You just sit there with your broken shoulder and have the car drive you around. It's not it's not so much how hard I'm going. It's like how hard my old man body went to the ground when I was brutally tripped in Oakland.
Speaker 3:But my point is... Wait.... Ice skating rinks.
Speaker 1:Was it too broken to throw hands after after you got taken out?
Speaker 3:Way too way too broken. Drop the Way too broken. It's just me sadly skating off the ice thinking this is probably the last time I lace them up, but Yeah. You know. Dang.
Speaker 1:We should have been We should have been there. We would not have let that let that let that go.
Speaker 3:Yeah. This is the second time FSD has helped me with a... With an old man hockey injury. So I got to say, it's, you know, there's some marketing opportunities there.
Speaker 2:No. No. The the FSD is is like overpoweringly good to the point where people who don't like electric cars because they wanna hear an engine are, but I still had to get one as the second car, like, for whatever reason. And then the political thing, people are, like, look, the midterms are coming. Like, Elon's gonna be out.
Speaker 2:I like... I I I don't like him, but I'm doing it anyway. And I've heard that from a lot of people too. So people are begrudgingly buying them just because they
Speaker 3:Everyone said they would never buy a Tesla. And I... Every day at school drop off, there's a new Tesla, you know, that's that's post... You can tell it's post Elon because it's got the new... Post Doge because it's got the new headlights,
Speaker 1:you know. Yeah. Yeah. I'm getting the bumper sticker that's... I bought this after FSD became so undeniable that I felt it was the safest option for my family and others on the road.
Speaker 1:Bumper sticker. Right?
Speaker 2:Yeah. Yeah. Exactly.
Speaker 3:Well, my bumper sticker just says morally superior.
Speaker 1:That's all.
Speaker 2:That's all.
Speaker 1:Oh, okay. That's good. Yes. Yes. Yes.
Speaker 1:That's that's ideal.
Speaker 2:And then they can apply it to whatever the topic du jour of the day is. It is. Whatever it is. You know, you're prepared.
Speaker 1:Yeah. I... My other car is the moral high ground.
Speaker 3:Yeah. Right. There you go.
Speaker 2:That's great. Well, what... Yeah. What what what else are you what else are you tracking? Are you...
Speaker 2:I mean, we were at the start of the show absorbed by the anthropic numbers, obviously, historically massive, but still not beating expectations. And so, yeah, what are you tracking today this week in general? What's captured your fascination?
Speaker 3:I think... Okay. So so shameless plug, I've got Satya and Adela on my new podcast Amazing.
Speaker 1:That which... That'll air next week. So I was in... That's the best.
Speaker 3:I love the I love the music. So that's gonna air next week. But a little teaser for that is, you know, I asked him this question. You'll have to watch it to see his answer, but, you know, Microsoft's doing great. Wall Street loves Microsoft, but, like, look at the growth of all these companies.
Speaker 3:NVIDIA is now out earning them per quarter.
Speaker 2:Yeah.
Speaker 3:You got the hyperscalers. You've got SpaceX AI coming into the fold. Like, is there a world in which Microsoft is still a great business, like, a few years from now, but they're not in the mag seven? Oh. And I heard a little gasp from the the Microsoft comms team when I asked a question, so you'll you'll have to...
Speaker 3:But I I think this is...
Speaker 1:I'll just say Satya Satya's my...
Speaker 2:There's comms people can get aggressive. Are sure somebody didn't chime in and say, you are sure you don't want to talk about something politically controversial instead? Anything but the
Speaker 1:price I'll I'll just say, like, Satya is my favorite communicator. Like, he's like... In in the Mag seven. Like, he he's the one that I think is generally like the most candid Yep. And actually pick up on on how he feels about different things in a way that the other CEOs...
Speaker 1:Yeah. Like, does it in a way that's just... Again, I I think he's very candid. I think he's very fair.
Speaker 2:He's not stiff, he's not informative.
Speaker 1:Yeah, exactly.
Speaker 2:And it
Speaker 1:feels like he's just on some set of talking points and just always looping back to that. He's actually like, oh, let me answer this question. So I'm excited.
Speaker 3:And if he does have a talking point, it's like he it's like he's written a blog post on exactly the question that you're asking him, and he's got, like, the perfect... He's thought it all out.
Speaker 2:Yeah.
Speaker 1:Yeah.
Speaker 3:Yeah. And, yeah. I mean, this this was up at the... They've got the CISO Summit up there, and
Speaker 2:Sure.
Speaker 3:He's been thinking about security. I think the way he... It's actually really interesting to hear him talking to these CISOs, because he was saying... He's like... He's been sort of...
Speaker 3:It's almost like a let down. He's like let down by these models. He's like, I don't think the alignment is working. He doesn't think we're gonna mechanistic interpretability, so you have to put all these guardrails around this stuff. Mhmm.
Speaker 3:And that was that was fascinating to me. Like a little bit... There's like a sliver of defeat there, but also like, we're just gonna figure out how to make this work. Like, we're gonna put secure, you know, deterministic software around it and Yeah. You know, we'll use it that way.
Speaker 3:Yeah.
Speaker 2:What is your read on Xbox Labs? We talked about it yesterday, and I I love the the decompiled mashup games. I mean, they're super fun as, like, memes. I don't necessarily actually think that they're blockbuster games, but I I thought it was interesting that Xbox was leaning in, but what's your interpretation of that story right now?
Speaker 3:Oh, yeah. I totally agree. I was talking with someone, I I think someone at Xbox about that, you know, earlier in the week. I think Asha is probably the right CEO for Xbox right now, because I think she's like, you know, she's a little more forward thinking, she's flexible, and I think they're like, yeah. Mean, if you can't beat them, join them.
Speaker 3:Like, there's nothing you can do. If some kid wants to, like, mash up, like, decompile a game in their, you know, in their home using Claude, like, there's not much you can do about that from an IP perspective. So, like, I think they have to... The video game industry is gonna have to rethink everything. I think it's probably gonna accelerate cloud gaming, is my guess, like, in new new ways, and I'm excited by that.
Speaker 3:And Gen z feels loves
Speaker 2:like they're in such a good place as effectively a private company, because they're owned by Microsoft, so they can they they can kind of like hang out in the sub balance sheet and completely upend the business model. Whereas if you're an independent video game company, you you have a business model that relies on you earning a certain amount from micro transactions and selling a certain number of disks and having this particular business model. And you're gonna miss your quarterly earnings if you upend everything, but they're kind of in a situation where it's never been a big driver for Microsoft. It's been awesome for culture. It's been really cool to work at Microsoft and be like, oh, we got the Gears of War over there.
Speaker 2:But financially, there's a lot more flexibility. Do you agree with that?
Speaker 3:I totally agree. Yeah. I mean, they they still... I mean, the console business is no joke. Like, it's like Yeah.
Speaker 3:It's like a great business. Yeah. And I think they have that, but they will... I think they realize like they probably have to start disrupting themselves a little and they can do that. I agree.
Speaker 3:They have the luxury.
Speaker 2:Yeah. I mean, it feels like it's just good to be in hardware too because, like, we saw the Mac Mini was not ever built as like an AI device. Like, it's very much the opposite thesis from NVIDIA, the graphics cards, right, which got used as for for all sorts of AI stuff and eventually developed server chips. But the Mac minis blew off the shelf and you could see people sort of decompiling or hacking Xboxes and being like, yeah, it's just a good bargain. It's a good product.
Speaker 2:It's reliable and I can run anything on it or I can install an agent on it or I can, you know, actually hack and vibe code and do all these different things. And so they start flying off the shelf and actually becoming like differentiated and they're just going to sell a lot because even if they're not even if they don't have that huge margin of IP on top, it's still just a great product to be selling.
Speaker 3:Yeah. I also love the... I love this concept of just like hacking old hardware. Like, you can actually do that now. It's like
Speaker 2:Yeah.
Speaker 3:Why not? I mean, this stuff is so expensive. I'm like going through my drawers now looking for old hard drives. Because Oh, like I don't wanna buy a new hard drive.
Speaker 6:But storage is expensive.
Speaker 3:Yeah. Mean, it's like, why not? Like, just try to... Just try stuff. It's it's an exciting exciting time.
Speaker 2:Yeah. How are you how are you thinking about the open source alliance? Like, all the things that NVIDIA is doing, the different groups there. Open AI has been kind of like one foot in the other, like we don't want to ban it, but we also aren't really open sourcing stuff. Meta is like open sourcing stuff, but you know, has something very close source that's working now.
Speaker 2:Anthropic is still very strong against, but what is the shape of the open source alliance these days?
Speaker 3:I think, yeah. First of all, I think the hyperscalers would love to ban it. I mean, I was talking to our DC people, like the open fill funded groups are having dinners talking about open source is gonna be banned. I have no idea how that's even possible. I mean, that just seems so draconian and and really ultimately just like a fool's errand that...
Speaker 3:Yeah. I mean, I think this stuff is gonna... Is gonna total... It is taking off. Right?
Speaker 3:Okay. Open source
Speaker 2:I want to fight you on that because I think it actually may be very easy to ban open source. In in the sense that like we banned we banned file file sharing. Like
Speaker 3:Right.
Speaker 2:And and it's like, yeah. Obviously like torrents still exist. And you can go and find an offshore website that has a torrent, but you will get a letter from HBO if you download the latest season of True Detective illegally. They will find your IP so you got to be using a VPN and then it just becomes cumbersome. And you can't have a big data center hosting files like mega upload, that whole saga went, came and went.
Speaker 2:And so, it needs to be distributed like weights that are, you know, on this like dark web torrent network that's kind of cumbersome. And then the really dangerous stuff is always like a million dollars of compute. And I don't think you're going to be able to run anything as an attacker on a Mac Mini that can do anything but bounce off, you know, CrowdStrike plus mythos plus GPT cyber plus Palo Alto. Like these organizations are going be running like every...
Speaker 1:To be clear, you're not you're not advocating for it.
Speaker 2:No. I'm not advocating. I'm just saying that like...
Speaker 1:Yeah. It's like banning serving it is quite different. The other thing...
Speaker 3:I think that you're... Oh, go ahead.
Speaker 1:Yeah. Yeah. Was just going to say that the... Like the zero day that Expo found Yeah. Chrome was...
Speaker 1:That affects... Would have affected a billion people Yeah. Was like $40,000. Right?
Speaker 2:Yeah. Yeah.
Speaker 1:Okay. So...
Speaker 3:Okay. Okay. But you're assuming that it... That you you actually get it banned. Right?
Speaker 3:Like, I think I think you're right. If this gets fully banned, like, there are technical ways they can just make it a total headache to Yes. Download open open... They could just, like, kill that industry. Yes.
Speaker 3:But, like, is it... The legal framework for just saying, like, any kind of open source AI model is is banned is gonna be so difficult. Right? Yes. What are...
Speaker 3:What is the theory there?
Speaker 2:Yeah. Yeah. Yeah. So so like, as a practical like, as a practical matter of how things get done in Washington, that is more intractable than the technical question of like how do you find out that a data center is serving an open source model and send them a sternly worded letter, hey, stop serving this because we banned it. But, yes.
Speaker 2:So so so I agree with you. It's harder to actually ban than enforce a ban that that happens potentially.
Speaker 3:Yeah.
Speaker 2:Interesting. I've always... What do you think, I mean, from talking to the DC folks, what do you think of this idea of like you can sort of chart the path of technology regulation by just summing up the market caps of various open letters? Like when the open source letter happened, I was like, oh, this is like very rough for... To be the anthropic position of like, let's ban it.
Speaker 2:Because I was just looking at... It's like Nvidia 5,000,000,000,000 and then you have another company that's like, you know, a couple trillion and I'm just I'm just adding up the market caps and I think it was like $25,000,000,000,000 of market cap was saying like we support this thing. And whether or not DC is coin operated, it's just a fact of the matter that when you have that much economic weight behind it and that many people's pensions and all the different things that like that might dictate the actual outcome.
Speaker 3:Oh, yeah. I mean, let's let's face it, like DC is somewhat coin operated, like it's not, you know, it's oversimplifying it and I'm out here in the Bay Area. Easy for me to say. I don't have to go to dinner with these people every night.
Speaker 2:Sure.
Speaker 3:But I mean, yeah, I think you totally can. But I also think it's like who... It's like there's not some law that's being violated by this already, but you have you have to create a whole new idea, a whole new legal framework. It makes it it makes it really difficult. And then, like, the other the other thing I think with...
Speaker 3:Like, a name a tech regulation that was actually good, or or didn't have some major blowback, like even section two thirty, which is almost like Yeah. Unregulating rather than regulating is like hugely debated today. The DMCA that that governed all the downloads and torrenting and everything, that's a huge mess. Like, that would just Yeah. Created headaches for years.
Speaker 3:Still, it's creating all these issues with doing, security research. Right?
Speaker 1:Like, you don't... You can't... You have to
Speaker 3:be very careful about how you Yeah. Research bugs and software because of that. So, like, I don't know. It just... To me, it doesn't make it doesn't make much sense.
Speaker 3:It makes a lot more sense. Like, it's like you have the money behind it, and also just like the logic behind it. Like Yeah. There's... It makes logical sense.
Speaker 3:Like, let's have open weights. Let's have open source harnesses and sandboxes. Like, I wrote... I had a little scoop today on Perplexity open sourcing their sandboxing technology. I mean, like, let's let's, like, have...
Speaker 3:Let's crowdsource, like, figuring out how to keep this stuff in, you know, in silos and make sure it's safe. Like, that makes a lot more sense than like, let's have two two labs or labs companies Yeah. In Silicon Valley, like figuring this out all out for us. Like, that that never works. Yeah.
Speaker 3:Yeah. I'm preaching to the choir. I realize that.
Speaker 2:No. No. No. No. It's interesting.
Speaker 2:I'm I'm I'm thinking about, like, the, like, AI is maybe, like, the least frustrating it will ever be. I'm just imagining, like like do we get the AI utopia or do we get the doom scenario where like the median case is like probably like we get cookie pop ups. So we get some like annoying thing that happens that like is like constant and like and it's just like the the cookie pop ups development and like the way that like that's how the internet played out is just so depressing every time I have to click that button. I'm just like, how did the... How was this the outcome?
Speaker 2:But I don't know.
Speaker 3:That's That beside the was a consumer thing. Right? And like Yeah. I I think there's actually... Like, my theory right now is like the reason there isn't more consumer stuff happening in in AI Yeah.
Speaker 3:Is that there's just not enough compute. Like, we don't have you just don't have enough data centers to run, like, the frontier models for consumer applications. Yeah. And and I think open weights is probably the way that happens, like, Before you get to, I don't know, like, the web two point o of AI, where it's, like, all in the cloud, you're probably gonna have some sort of like the Netscape of AI first.
Speaker 2:Yeah. Yeah.
Speaker 3:Yeah. Runs on your computer and it's, you know, it's not why... It's not like everyone uses it, but it's sort of like early adopters get into it. Yeah. And we're like not even there yet.
Speaker 1:I mean...
Speaker 2:Yeah. I mean, you see it with like, you know, Muse is having like a crazy moment. Open AI responds with Dot, but...
Speaker 1:Dave's Hot Chicken responds. Dave's Hot Chicken responds. Apparently working with Nikita.
Speaker 2:Yeah. Apparently. But like Dot, I think is like still rolling out through the paid tiers because it's like Yeah. It's actually difficult that they were like opening the flood gates and being like, yeah, billion people can just run this constantly. That's a lot of compute and so it it is tricky.
Speaker 2:Yeah. Where are you thinking the bottleneck goes next? Like, is it money? Are we gonna run out of money? Is that the real problem?
Speaker 3:Yeah. We... That's actually... I was talking about that this morning actually Yeah. With our our finance team because we're...
Speaker 3:They're obsessed with the fact that these companies are borrowing money.
Speaker 2:Yeah.
Speaker 3:I'm like, I'm on the other side of this. I'm like, this is not like, you know, this isn't like the financial crisis or like 2000 again. Like, this is a very different thing.
Speaker 2:Yeah.
Speaker 3:But, like, the banks are getting to the point where they're like, yeah, we just can't lend out this much money, and so I think the borrowing has been opportunistic by these tech companies. It's like, why not borrow that money? Like, investors like it. But if the banks are like, yeah, we're just... We're we're hitting our limit here
Speaker 2:Yeah.
Speaker 3:Then, yeah, I think money does become another bottleneck. The hyperscalers, you know, the the mag seven, they have enough cash. They can they can find other ways to fund this, but I mean, yeah. I I'm actually probably gonna write about this for tomorrow in the newsletter, how this is not a... This is a bottleneck economy.
Speaker 2:Yeah. It it flips so fast. I mean, I remember Peter Thiel... Bottleneck,
Speaker 1:I'm going to invest I'm to invest in cash. Oh, okay. Yeah. You got to get
Speaker 2:some But of I I I remember there was a Wired Tech Conference maybe twenty twelve ish, twenty fifteen ish. Peter Thiel, Eric Schmidt, who was then the CEO of Google debating uses of cash at Google. And and Thiel's point was Google has $50,000,000,000 of cash on the balance sheet. You don't have anywhere to spend it. You're out of ideas.
Speaker 2:We're stagnating. Go do something with it. And he's saying, oh, well, like we're spending a billion dollars on this self driving car thing and we're going to work on cancer research. It was all the same promises but it was just a decade too early where there wasn't actually real ways to deploy the capital. And and this was the true this is true across, you know, all the hyperscalers where Zuck would go off and spend $10,000,000,000 on something that wasn't really working.
Speaker 2:And now the opportunity is here and we've switched from like, oh, you don't... You're you're not you're not spending your cash, that's an...
Speaker 1:Also Google did invent the transformer.
Speaker 3:They did.
Speaker 1:They did. Did. Self driving cars. Yeah.
Speaker 2:But now Yeah. Now we're in the, okay, go spend the cash because there is an opportunity that can actually consume that cash and you still get criticized, but I don't know.
Speaker 3:No. I know. And it's like everyone's like, you know, everyone's talking out of both sides of their mouths. Right? Yeah.
Speaker 3:It's like, oh, they don't want big tech to become so powerful. And it's like, well, they're actually being forced to like spend all their cash right now. Like, that is a good thing. Right? That means there's there's like competition and disruption Totally.
Speaker 3:And you know, I guess if it doesn't work, then they'll go back to just having, you know, the most profitable cash cow businesses in history. But, you know Yep.
Speaker 2:Yep. Yeah. Mean, we saw that today with like, there's a rotating out of the Nasdaq, it goes straight into the Dow. And and you know, it's like, oh, if if the AI trade's blowing up, like get back into SaaS. Get back into the social network.
Speaker 2:Ad tech. Like the the stuff Yeah. This money just like flows around people hunting for the for the latest thing. Anyway...
Speaker 3:They're pretty well hedged.
Speaker 2:Thank you so much. Awesome. Are you
Speaker 1:well excited for the Satya episode?
Speaker 2:Yes. Go. Great to hang.... To go listen.
Speaker 3:Thank you. Yeah. Download Future Proof.
Speaker 2:Future Proof. Gotta plug Yeah. Podcasts are available. Thank you so much for coming on. Cheers, Rachael.
Speaker 2:Goodbye. See you. Up next, we have Bryan Cantrill from Oxide, the co founder and CTO. Let's get this gong warmed up. It's time.
Speaker 2:Nice
Speaker 1:little warm up fit. You're gonna You're
Speaker 2:gonna How much did you raise?
Speaker 1:Let's get another. Oh, man.
Speaker 2:How much did you raise?
Speaker 1:Love it. How much did you raise? We gotta know.
Speaker 6:Okay. Well, so... Hey, guys. I don't know. Is that a is that a gong about how much we raise or about the fact that we're profitable?
Speaker 6:Is that a different
Speaker 1:Gong for that? Wow. How... Oh, you did the warm up. The mad lads did it.
Speaker 2:We did the They
Speaker 1:did it.
Speaker 2:Fidelity head. Said Now we gotta hit it for how much they raised.
Speaker 1:That's right.
Speaker 2:How much did you raise?
Speaker 6:We raised $4.45.
Speaker 1:And finally, the best hit of all Tell me. For the secondary. No. I'm kidding. No.
Speaker 1:No. No. No. We're not gonna go there. Tomorrow, man.
Speaker 1:We're not gonna go there. We're having too much fun. Amazing to have you on. Thank you for matching or exceeding our energy.
Speaker 2:Good day.
Speaker 1:Introduce yourself and the company. What's going on? Oh, man. It's good to be... First of I just...
Speaker 6:I love the Gong. I gotta tell you, the the Gong... So my co founder and I had... There was a Gong at... We were at a cloud computing pioneer joint.
Speaker 6:And...
Speaker 2:It's actually really loud that we played it there. We got
Speaker 1:the baby gong.... Baby gong.
Speaker 6:The the the founding CEO had this gong that was very awkward. And because, like, the problem with the gong is it, like, then the gong isn't rung very much, and, like, now the gong is just kinda, like, sitting there, kind of, like, foreboding.
Speaker 2:That's crazy. I've never had that.
Speaker 6:Gong ended up, a couple office moves later, ended up on Steve's desk. There's just kind of this inert gong there. I remember as we were contemplating oxide, I looked at the gong. I'm like, Steve, at some point, we are gonna have... We're gonna build this company.
Speaker 6:We're gonna have our first customer, and we are gonna ring a gong, and it's gonna feel so good. But that gong never made the move. So we don't
Speaker 1:actually have
Speaker 2:a gong on Oxide.
Speaker 1:So the first gong that we've had at Oxide is the gong you guys just write. Amazing. Well, I recommend... I I... We recommend a gong hit for every single dollar of revenue that comes in.
Speaker 1:So that basically means you need somebody dedicated to the to the craft, you know, and they're pretty much just tapping away all day once you're at, you know, a certain run rate. But, anyways, I still have no idea what you do, and I'm so curious. So... Yeah.
Speaker 6:So we are a computer company. So it's right on the tin. Oxide Computer Company. So we make rack scale machines, hardware and software co designed. And our big observation, Steve and I were together at a cloud computing pioneer joint.
Speaker 6:Prior to that, I spent fourteen years at Sun Microsystems.
Speaker 1:Do I have to experience There you go.
Speaker 6:Computer company.
Speaker 2:There you go.
Speaker 6:Exactly. The the the OG there. And we... At at Joint, we were building a cloud on top of commodity hardware, on top of Dell HBC Micro. Cool.
Speaker 6:And when Joint was bought by Samsung in 2016, we went out to this explosive new scale and everything broke. And the stuff that broke in our software, could fix, but there was so much that broke at that hardware software interface that was unresolvable. And I... There's some... In the number of times you heard from Dell, it's like, you're the only customer seeing this problem.
Speaker 6:And you're like, how the hell is that possible?
Speaker 1:Like That's strange.
Speaker 6:Everyone else is at much greater scale than we are. Then you realize like, oh, wait a minute. Google and Amazon and Facebook are not Dell customers. And so you Dell are kinda speaking your own truth at
Speaker 1:some level.
Speaker 6:Because once someone gets to this kind of scale, they actually can't be a Dell customer anymore. And so as we were beginning to contemplate what was next, we wanted to go... We realized that the hyperscalers had built for themselves their own machines, rack scale machines
Speaker 2:Interesting.
Speaker 6:With hardware, software co design. And the enterprise, the the the... Anyone else didn't have that. You could rent it in the public cloud, but you could not buy it and run your own data center. And our big belief, we are very pro cloud, but we believe that cloud should be available wherever you wanna run your business, and that includes on prem.
Speaker 1:Very cool.
Speaker 6:So the the the the big an iconoclastic belief that we had in 2019 was that cloud computing is going to endure and persist and thrive, is that's gonna happen on prem, and it necessitates this rack scale hardware software co design. And I... You know, I have to tell you how in 2019, was all SaaS all the time, and Yeah. It was very iconoclastic to... And...
Speaker 6:But part of the reason it is oxide computer company in the name is to make clear to any 2019 DCs that there would be no pivots to pure software, that we are
Speaker 1:No pivots.
Speaker 6:Just this company.
Speaker 1:No pivot. Completely. We just make computers, sir.
Speaker 6:Just make computers. And, you know, actually, I did just because you guys are scholars of history. Digital Equipment Corporation, back in the day, one of the, if not the first venture capital backed company, wanted to make computers straight
Speaker 1:out of the chute.
Speaker 6:And they were told by their VC, is one of the... George Dorio, basically a proto VC in Massachusetts. It's like, you can't call yourself a computer company because IBM is gonna be the only computer company. In 1957.
Speaker 1:It's called
Speaker 6:himself Digital Equipment Corporation, Deck. Yeah. Isn't that amazing? He thought
Speaker 1:there was gonna be a fast a fast takeoff in IBM. Sort of an IBM singularity.
Speaker 6:That's exactly right. Right. Totally. And as it as it turns out, we... And again, you know, many, many, many decades later in 2019, we believe strongly in hardware, software co design and actually delivering...
Speaker 6:Because that... That's the only way you can really deliver this Elastic infrastructure. But...
Speaker 1:Alright. Give us the big milestones in the business leading up into this point. You started the company in 2019.
Speaker 6:John's... Oh, Doug Doug
Speaker 2:Doug Doug
Speaker 6:Doug Doug's ready. Wow. Okay. Well, on... So honestly, the...
Speaker 6:I mean, the first big milestone was just raising our seed. So...
Speaker 1:Alright. What happened next? What happened next? Well,
Speaker 6:so we would raise... When we're raising the seed, we raised 20,000,000 out of the chute, which is a very big seed for the team. And the rationale for that, and we feel... As we were talking to VCs in 2019 and only finding these SaaS folks and having to explain that actually the most important products that we have represent hardware software co design. So just finding...
Speaker 6:And we feel very blessed to have found Eclipse and set that Eclipse having... Being big believers and immediate believers in hardware software co design. And they're... And they saw that, like, actually, the biggest companies ever built are are... So finding them, finding the right investors, raising the right amount of money, and we didn't wanna raise, like, three on 12.
Speaker 6:Right? Or or what... But that would have been easy, but it would have...
Speaker 1:Well, it would have been beneath you.
Speaker 6:It it would have been a recipe for death because you would... You can't do any of this with three.
Speaker 1:Yeah. Yeah. Yeah. And... Well, the funny thing is the funny thing is that the the $20,000,000 seed became, at least now, is very much standard and companies are now can be capital intensive enough to justify that.
Speaker 1:It's not just sort of like a, you know, supply and demand equation. But back in 2019, most of the companies that were getting started, like, didn't really need... You know, they they were three on 12 would have would have been more than enough money to, like, at least get to the next round.
Speaker 2:Yeah.
Speaker 6:That's right. And so we... And we knew we needed to raise that much to be able to get to get the team get the team hired. Get... I think, you know, I...
Speaker 6:In many ways, the most terrifying moment for me in the lifetime of the company was when we got our first term sheet and got that term sheet from Eclipse. Yeah. Because it was like, oh, shit. We bought... I gotta go build this thing, and we don't have the team.
Speaker 6:Like, I can't go... This is so technically hard. There's so much technical risk in this. One of the things that we heard that drove us bananas in 2019 is like, look, technically, we know you can do this. And I'm like, am I...
Speaker 6:You wanna stop a VC and be like, no. No. Sorry. Let me stop you right there. Technically, I don't know I can do this.
Speaker 6:Like, I'm sorry. Like, technically, this scares the shit out of me. There's so much technical risk. We did our own compute sled. We did our own switch.
Speaker 6:We we we eliminated the UEFI bias. So we did our first instruction on the x 86. We... We've done all of our own software, lowest levels of firmware, all the way up to control plane distributed system, distributed storage. I mean, we are nine startups in one.
Speaker 6:Unbounded technical. Crazy.
Speaker 1:By the way, Eclipse was actually... Was was absolutely cooking in in the twenty tens.
Speaker 6:Like They were...
Speaker 1:They they have so many bangers that like were just non obvious or like most people just were not that interested in that now look just like genius in hindsight.
Speaker 6:Well, and so they had the advantage of investing in this sector when everyone else was ignoring it. And so as a result, like if you were starting starting oxide in 2019, starting Cerebras a couple years prior
Speaker 2:Yep.
Speaker 6:Yeah. Like, you are so contrarian that you almost have to be good. You know what I mean? Like, those companies are good companies because they were almost tautologically contrarian. And so Eclipse had the luxury of...
Speaker 6:And what we found... We're we're kind of... We found that we're VC homewreckers because we would find that, like, a single partner... Yeah. Is that...
Speaker 6:Yeah. Is is that the homewrecker gong? We actually called them pelts on the wall because... We... Well, because...
Speaker 6:Okay. Here's what happened. You get a... What I learned very quickly is that oxide is very, very contrarian. And obviously, like, everybody loves contrarian.
Speaker 5:Yeah. Yeah.
Speaker 6:But no one actually wants zero. Right? And I think that the the outcomes for Oxide were very bifurcated. It felt like, wow. Generational company or zero?
Speaker 6:And, you know, VCs are kind of in this quantum superposition of fear and greed, and they would constantly be oscillating in their minds between like, oh my god. In fact, we had a VC being like, I
Speaker 1:love that this is n of one. Or this is n of one. It's like they were scared
Speaker 6:that we didn't have competition.
Speaker 2:Wait. Help me understand how this would be a zero. Because it feels like like even if there's no AI boom, it's like you can still like buy parts, assemble racks. Maybe there's not a ton of innovation, but you just become like a mid market reseller of equipment and like That's zero. Thin margins.
Speaker 2:Maybe... Oh, okay. Okay.
Speaker 6:So... No. No. That that is a zero because... First of that's not differentiable.
Speaker 2:I know it's not differentiated, so
Speaker 1:you don't
Speaker 6:go anywhere.
Speaker 2:Okay. Yeah. It just like... It just peters out or something?
Speaker 6:It it peters out because the...
Speaker 2:But but when I when I think big VC zero, I think like you you spent a $100,000,000 on like software engineering for a social network that never gets product market fit and it's actually like you ran out of money as opposed to like the downside risk with it with the sector that you're in feels like you become like a small, like, micro center almost like just a place that like assembles... Okay. No?
Speaker 6:No. No. No. No. The the...
Speaker 6:No. The downside risk is a zero because we're we're not reselling things out of the back of a catalog. We are actually engineering a system. And there are companies that tried to do what Oxide did. Mhmm.
Speaker 6:You haven't heard of them because they're all zeros.
Speaker 1:Mhmm.
Speaker 6:And some of them are like pretty prominent zeros. Sure. Sure. Sure. And we actually...
Speaker 6:One of the things that, you know, benefit of of starting a company, you know, later in life and and with a lot of wisdom, and Steve and I both started the company in our forties. Yeah. We were real scholars of how these companies have failed. Yeah. And wanted to understand how every single one of these companies have failed.
Speaker 6:Yeah. And, of course, like, any founder will tell you, well,
Speaker 1:I failed because I ran out of money. It's like, yeah. Yeah.
Speaker 6:Yeah. Yes. You ran out of money, but also, like, why else? And the... One of the things that we saw over and over again is it...
Speaker 6:If you have something that is kinda half built, it is very, very hard to get that funding... That that funding round to get to that that real customer, and getting that first customer is really, really hard. And then getting that first customer to to expand is even harder because then the... You need to land this thing, and that there was a company, Nebula, that is pretty similar to Oxide's vision.
Speaker 1:If you guys remember, these are these are... This is
Speaker 6:one of the open... This is during the great OpenStack boom
Speaker 3:Oh, yeah.
Speaker 6:Which you... Maybe you haven't heard of for a reason. Right? The... But so Nebula...
Speaker 6:And Nebula's vision looks like oxide's vision almost scarily so. And in... And I'm like, I gotta understand every single thing about this company. Best $7 I ever spent my life is on the Stanford Graduate School of Business did a case study on Nebula
Speaker 2:Keep up.
Speaker 6:As Nebula is dying. Woah. So Nebula is, like, gonna go bankrupt. By the way, Nebula shut down on April 1. So 04/01/2015, Nebula shuts down.
Speaker 6:And I was in the office with my CEO at the time, and he and are looking at this like goodbye cruel world kind of announcement. And we're like, is this like the darkest most fucked up April fool's joke ever? Or is this company literally so incompetent that they can't even go out of business on the right day? Like, go out of business on March 31 or April 2. April 1, I'm sorry, is...
Speaker 1:No. We we we announced we announced an... Our acquisition on April 2. We had the opportunity. I wanted it first,
Speaker 2:but it would have been so much more chaotic than it already was.
Speaker 6:You know what I mean? Exactly. They're excellent. Strong... Good job overlooking...
Speaker 6:Wait.
Speaker 1:But this company but this company... This company... They had raised a lot of money. It was, like, hot at one point. This is sort of, I think, like, predates my technology It was hot.
Speaker 6:Kleiner had backed up the truck. Kleiner had put a ton of money into it. And it... I was absolutely a zero. And if they...
Speaker 6:Wow. Now, the the the case study was extraordinary because they failed at everything. They failed at the tech. They they they failed in terms of manufacturing, in terms of supply chain. They failed in terms of software.
Speaker 6:They failed in terms of of their approach to market. They were trying to get to market too quickly with something... It was kind of that lean idea of like, well, let's just ship garbage. It's like, no. No.
Speaker 6:You can't ship garbage. You have to actually get something that fully works. And in particular, one of the go to market things that they screwed up was they had this idea that someone will buy one rack and they'll buy one rack and then like a month later, they'll buy 30. It's like, no. No.
Speaker 6:No. No. No. Have you ever been an enterprise buyer? Sorry.
Speaker 6:You're gonna buy one rack and you are gonna kick the shit out of that rack for like eighteen months. If you are if you are a bank, or you are a pharma company, or you you you are gonna spend a long time under... Because when you do that 30 rack buy, you are betting your career on
Speaker 1:it. 30
Speaker 6:racks? And the hell
Speaker 1:30 racks?
Speaker 6:Bet your career...
Speaker 1:What about 30 racks?
Speaker 6:What's that?
Speaker 2:What about 30 racks?
Speaker 1:What about 30 racks? Sorry. I mean, I... We know we know a lot about 30 racks buys. I haven't desperate to buy in 30 racks.
Speaker 1:Not on this. So I got a little switched up there.
Speaker 2:We're just messing around. Sorry.
Speaker 1:We're just
Speaker 3:messing around.
Speaker 2:But thank you. This is really good history.
Speaker 1:Hope they don't watch this like the team, you know? Because you're like, not only did they have the perfect vision, they had the worst execution across every possible dimension of the business.
Speaker 6:That's not a state secret. It's in the Stanford Graduate School of Business case study.
Speaker 1:Mean, it's like... But it's behind the paywall. It's behind the paywall. Yeah. Yeah.
Speaker 1:You're breaking open the paywall.
Speaker 6:I'm breaking open the paywall. Yeah. So... But it was it was super helpful to learn from that because you realize that like in your go to market motion
Speaker 2:Yeah.
Speaker 6:You have to rely on the fact. You have to know that that that single rack is gonna be at that single customer. That customer could be a 100 rack customer, but they're not gonna be a 100 rack customer until they are running in production on a smaller deployment for an extended period of time. And that changes the way you gear the business from... It changes the way you raise, it changes the way you kinda set expectations, the way you build a product, the way you set expectations with your own employees, with your customers, because you are...
Speaker 6:What we are focused on is the... Are are those very large appointments. And what's exciting, and this where you can definitely ring the gong, is that's what we arrived at in the last eighteen months is we
Speaker 1:got those those very large accounts. Got those, like,
Speaker 6:you know, the... Okay. I I
Speaker 1:think it's like asshole. Yep.
Speaker 6:We're we're both pretty fiscally conservative, and, you know, these these companies that, like, celebrate employee number milestones, like, number of employees, I'm like, no. We are never doing that. Yeah. Number of employees that... And it shouldn't be a cause of celebration.
Speaker 6:Those are all, like... It it should... You should be celebrating revenue and so on.
Speaker 1:Profitability.
Speaker 6:Profitability. And like, can we celebrate when we have more racks shipped than than employees? I'm like, yes. That we can celebrate. And that was a big a big gong banger was when we shipped our...
Speaker 6:More racks than we have in place. So our our vision from the beginning was how do we run and if... We we have the belief that if you have an extraordinary team, you can run an efficient business. A totally iconoclastic belief along with the iconoclastic.
Speaker 1:Yeah. So we... You know, we're we're we're we're real renegades over here. Yeah. Really out there on the on the fringe.
Speaker 1:Amazing stuff.
Speaker 2:Yeah. Thanks so much for coming on.
Speaker 1:Great. Yeah. What a what a milestone. This was super You're welcome anytime. Yeah.
Speaker 1:This was this was a joy.
Speaker 2:Yeah. We'll talk to you soon.
Speaker 1:And congratulations to the team on... Yeah. How many how many racks are you trying to get? What's the new what's the new ratio that you're going for? Oh, looks like a 100 to one?
Speaker 1:Like, how how...
Speaker 6:I would love that. Exactly. I'm very, again, old school. It's like, what is your revenue per employee? And like, let's get revenue per employee in the many millions of dollars, please.
Speaker 2:That's...
Speaker 1:I love it.
Speaker 6:That's the objective and big healthy generational business. We're not not looking to not looking to flip, we're looking to to actually go build the generational business that Steve and I wanna work at for the rest of our careers, which apparently is also a conoclastic. Yep. I thought that was the point of starting companies is that we build generational ones, but guess not. I guess everyone else is geared for an exit.
Speaker 6:So... But we're...
Speaker 1:Yeah. Big talk big talk until you get offered a 100 times revenue and then...
Speaker 6:No. Dude, this is like... This is not like a negotiation tactic. Like, is like, honestly, hand on heart. Like, that's not what we're interested in because...
Speaker 6:Yeah.
Speaker 1:Know. Bigger number. Yeah. I mean, we we are wanting to kick our dent
Speaker 6:in the universe. So that's what we're doing here, docs.
Speaker 2:Love it. The gong. Dent the gong and then dent the universe.
Speaker 1:Great stuff, Bryan.
Speaker 2:Have a great day. We'll talk to you soon.
Speaker 1:Give our best to the team.
Speaker 2:Have a good one. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches.
Speaker 2:And let me also tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Our next guest is Daniel Kimminau from the Advanced Spade Company. Welcome to
Speaker 1:the show,
Speaker 2:the founder and CEO.
Speaker 1:What's going on? What do got in your hand there?
Speaker 2:Going subterranean, I think. What's going on?
Speaker 1:Look at that microphone. Woah. Look at that. Lucy. Lucy.
Speaker 2:There we go. Jordy, you got that.
Speaker 1:Check. Check. I got it. Check. Check.
Speaker 2:I got the same flavor, but in a different form factor. But thanks...
Speaker 1:Alright. So what's what's going on in here?
Speaker 2:What's going on?
Speaker 1:What's going on here?
Speaker 5:This is our media debut. We we're like famously under the radar and so we wanted to show off all the cool stuff. We get to play with a bunch of fun things.
Speaker 2:Awesome.
Speaker 1:Yeah. Amazing. Well well, yeah. So so introduce yourself and the company.
Speaker 2:And give us background. Have you worked at anywhere relevant to the current mission?
Speaker 5:Oh, yeah. I've probably only worked at relevant relevant places.
Speaker 2:Name them off.
Speaker 5:So, yeah. I mean, way way way back when, I was a student and did the the Hyperloop competition when it was just like designed for college students. And our team did really well. They got me in the door at SpaceX. And I think I was like the only person that worked at SpaceX, and I was like, didn't care about rockets.
Speaker 5:Just wanted to build transportation. And, yeah, then from there, we like built built the Hyperloop track and like ran that competition, and like right before we were we were kind of like showing it off, you know, was like, oh, we're gonna do it. We gotta be serious. Let's go like dig a hole in the parking lot. And that's kinda where Boring Company started, and so then I got to got to help start that and like do that for quite a while, and it, there's some, like, wildly fascinating technical problems when you start looking at underground construction.
Speaker 5:And so, kind of, like, occupied my whole brain for a while, then we went... Was in was in Austin building building for a couple of Elon companies doing just like a lot more site development. And there's like crazy construction coordination of... In like underground utilities. Like, it it is wild how difficult it is to know what's there and not hit it.
Speaker 5:And so... Yeah.
Speaker 1:Had a couple accidents along the way, you know?
Speaker 5:Yeah. Yeah. Yeah. Yeah.
Speaker 1:To say the least.
Speaker 5:There's couple water lines in Austin that like I know where every inch of that line is personally. So... Like, but these these kinda like... It's... It was so wild working at at SpaceX and seeing like, do we know where, like, satellites are to millimeter grade?
Speaker 5:And then underground construction, it, looks upside down because of these, like, technical problems and and and just, an integration of data. And so this... I ruined a lot of parties. I just kept thinking and talking about this constantly. And then, yeah, I got to I got to spend like two years at Androl, which was was awesome.
Speaker 5:And it like finally met kind of some smart people. They tipped me in the right direction. And then, yeah, I was really fixated on like, okay, there's a couple of technical things you can go build. They're hard to build, but you go build those, and then this would make you really good at building underground. And if you're gonna build underground, the really, really useful thing to do is go build underground utilities.
Speaker 5:Mhmm. And so that is, you know, 2024, we started Advanced Spade Company. I mean, I was running around telling everyone, like, do power lines care, put them underground, and everyone's like, yeah, yeah, yeah. And like, we're in my garage, and then like LA started burning down around us, and then all of a sudden, everyone was calling. We had like big wigs coming to just my garage, and seeing like, what can we possibly do to get power lines underground.
Speaker 5:And yeah, we've been going... Yeah, we've going for two years now and having a ball digging holes, burying utilities in those holes. It's great business.
Speaker 1:So glad you're doing this. Yeah. Like, where where I live, I live in Malibu and like there's... All the power lines should be underground. I think the power is getting shut off for at least some parts of the city this this week just because there's like...
Speaker 1:There's high winds and and the utility knows they need to do it, but it just seems like it's really hard and expensive and so everyone just keeps kicking the can down the road. And and so yeah, it seems like super super important work. How do you how do you even go about like what what is what is what is revenue even look like in this business? Like, are you... Like, who who's actually getting the the...
Speaker 1:These are like massive infrastructure projects. I imagine you guys are like part of that or are you guys like the are you guys like the the primary partner that's like bidding on on these like kind of opportunities?
Speaker 5:Yeah. It's a... I mean, it's a very hard thing to figure out early on, but we we've kind of early days of mastering it, but we're getting quite good at this sort of like, find the... Essentially, like, the cheapest, shittiest work that nobody wants and that nobody is good at, and start there, and then you go start doing it, and then you have like a room full of engineers building way better tools, like integrating the data, just like make that work supercharged. And then as your reputation gets good, you'll start getting on bigger and bigger projects, and getting bigger and bigger scope, and you just keep sort of clawing the next thing forward.
Speaker 5:So we started in private utility locating. We were really good at making maps, and so then these general contractors who are typically the ones that like hold the contract Yeah. From the utility, they would say like, hey, like, we keep hitting stuff, the drillers are struggling, you guys make a really good map, can you come drill for us? We're like, yes. That, you know, secret plan the whole time.
Speaker 5:And then we go start drilling and, like, we already come in with a bit of an edge because we have, like, really good datasets, really good maps. And then we just, like, keep going for, Right? Like apply the better tech there. You go build it better there. And you start on like really small shots.
Speaker 5:You're kind of like a sub, and you get called in last second, and it's it's very like... It is ground game, and it is reputation based. And you just, like, keep building those and the tech lets us, like, speed run the normal, like, construction growth curve.
Speaker 1:So you're basically just expanding the scope of what you're doing and then eventually people are gonna realize, like, hey, this GC is actually just a very thin wrapper around the advanced paid company and then you guys eventually will will bid for the for then... For the project yourself?
Speaker 5:Yeah. And that's... There's like a... I mean, yeah. There's there's a bit of a mix.
Speaker 5:Like, there are days where being a a subcontractor is really nice, because it's just like a lot less that we have to deal with, but then you also wind up like you have no control over your own destiny. Yeah. And so the way we see it is kind of like our service team, I mean, feels very big for us, but like is is quite small. And we sort of just keep moving up in terms of technical difficulty. And then as we move up, we wanna sort of, like, leave the lower end market to where it's, like...
Speaker 5:We don't want to be a monopoly of all things utility construction. That's, like a really tough game to be in. So what we do is we take the tools that we've developed to get really good in that market, and then we turn around and sell them to the like mom and pop shops. So private locating is one where like we're kind of phasing out of it, you know, like we can do like these really high quality maps on like really, like customers who care a lot about the data. So a lot of the like field work for just like marking and pre construction stuff, it's it's just like we aren't the best person to go do it, but now we can sell them a locator that we're like, hey, we spent years perfecting this and making it so that like, we can move crazy fast.
Speaker 5:It does all the things that you want. And that's... There's this theory in in construction of kind of like golden shovels. Everyone wants to sell you, say like, hey, guy, like, contractor who lives on 3% margin, pay me a ton of money, buy this golden shovel, and like, I I promise you that it's gonna make you a bunch of money in the end. And that's...
Speaker 5:It's like a brutal business, like, most people fail when they when they try to do that. Whereas if we say like, hey, we've eaten your lunch. We've taken every contract you've had for the last year, and now we don't wanna do it anymore. Here's the tool that, like, let us go beat you. Mhmm.
Speaker 5:Now it's an easy sell. Like, everyone everyone wants that tool.
Speaker 1:Interesting. Fascinating.
Speaker 2:How important is reliability? Like, how much how much opportunity is there in, like, innovation, robotics, the really sexy advanced stuff, entirely new equipment versus, like, just taking a design that works and simplifying it, removing complexity, and just getting a way different economic equation like a reusable rocket at SpaceX, for example?
Speaker 5:It's there there are a bunch of cool things that are like, no one's ever done this and it's gonna count on like material advancements in in tech. We... I can't wait to come tell you about those in like The five reality is right now, it is that like tech... You can kinda look anywhere in the industry and everyone like hates each other. Everyone thinks that the other part is like under serving them.
Speaker 3:Sure.
Speaker 5:There is a stack of like tech that can solve pretty much any of the problems, but you're paying like 18 different people. So one one customer was like, oh, you guys are really just like a a slick integrator of all these things. I'm like, yeah, that's a way to say it. I mean, we also have like, we have zero SaaS cost. We don't pay like
Speaker 2:Oh, sure.
Speaker 5:For added layers. Like, we can go make those things. So like some challenges are mostly just integrate... I mean like, construction workers love having details sent to their phone. It's like Sure.
Speaker 5:The easiest way to make them happy Yep. And it's like not hard to do. Yep. Making a new locator is like quite hard to do. It's like...
Speaker 5:So Makes sense. There's there's a mix. Some days, it feels like if you just take good notes and then go ahead and look at those notes, you're like notch above. Yeah. You're really well.
Speaker 5:Last
Speaker 2:question for me. Can you walk us through what's behind you? It feels like I'm looking at maybe three different vehicles, but what's your product? What's modified? What's the purpose of all this?
Speaker 5:Everything here is like our config of something that you buy. So we've got a directional drill. Mhmm. So this is like a super common drill that you'll see. Like, you guys will see it on the street.
Speaker 5:They're all over LA, every... Everywhere. And these are these are kind of like the big... This is the this is the thing where, you know, like these tools really proved their value, basically. Everyone wants underground.
Speaker 5:Grid investment has like, in the last ten years, it's tripled. Mhmm. Reliability is worse by every single metric. And
Speaker 2:every...
Speaker 5:Like, the problem problem is overhead. You you keep putting stuff overhead, it keeps failing. Everyone wants to go underground. There's no, like, secret there. It just costs too much.
Speaker 5:And really when fiber started rolling out super aggressively, then directional drills, you had this problem where you're like crossing a rural road, how do you do it? And it's like, what do you... You can't dig a trench and like stop a two lane country road. Sure. So directional drills became like ubiquitous.
Speaker 5:They were everywhere because you can just pop a shot under the road. Cool. Then they proved their worth, this whole idea of being trenchless and being like less intrusive, less invasive in rural places. Now, the fiber companies are trying to do it in cities, and it's like, I mean, look at the news. Right?
Speaker 5:Like Mhmm. New York Airport just got shut down because of people, like, operating, and there's fiber in the ground, you, like, hit it, and it's, like, the tool set and the tech set is just not there to be able to, like, be trenchless or safely work in cities. And so that's kind of where we started. And, yeah, like, data center boom has pushed things forward, but it's it's reduced the barrier to cost a lot. Then we just have big trucks.
Speaker 2:Yeah.
Speaker 5:We've got a mud truck, so like drilling is a very fluids game. Yeah.
Speaker 2:Yeah. It makes sense.
Speaker 1:Very cool. I love the I love the the... Your design. Like, it's so cool. Like, it feels like it could just be, like, an everyday, like, construction, general contracting Yeah.
Speaker 1:Logo. It has that feeling, but it's very cool. How big the team today?
Speaker 5:We're like 50, 55, something like that.
Speaker 2:Hiring more, I assume?
Speaker 5:Yeah. Yeah. Always.
Speaker 1:To say the least.
Speaker 2:A lot of digging to do.
Speaker 5:Well... Yeah. I'm on a I'm on a public awareness... I mean, we're based in Long Beach, so we're surrounded by space companies.
Speaker 2:Nice. And I
Speaker 5:am on a public awareness campaign of like, space doesn't matter. No one, don't look up. Know, don't dig holes.
Speaker 2:Space doesn't matter. I was taking it from somebody who worked at SpaceX. That's great.
Speaker 1:Look down.
Speaker 2:Thank you for coming on the show.
Speaker 1:Great to meet you, Daniel. Fascinating company. Journey. Come back on soon. Yeah.
Speaker 1:And please please land some contracts in my backyard Yeah. ASAP.
Speaker 2:Yeah. I'd love it.
Speaker 5:Coming to your streets, baby.
Speaker 1:Fantastic. Can't wait.
Speaker 2:Talk to you soon. Great talk
Speaker 1:to you, dude.
Speaker 2:Let me tell you about Cisco. Critical infrastructure for the AI era unlock seamless real time experiences and new value with Cisco. We got to pull up this video of Assetto Corsa with mods running DLSS five which is NVIDIA's AI upresing. And I was looking at this with Jordy yesterday. We're like, oh, we should pull this up on the show.
Speaker 2:This is really cool. I can't believe they took a video game and they added some mods to make it look more realistic and they added some AI uprising and it looks like a YouTube video. It looks real. And we were like, ah, but it might just be a video. So maybe this is someone trying to trick us into thinking it's fake AI because this is happening.
Speaker 2:There's a lot of video games that are rebranding as like, oh, we vibe coded this game. And in fact they've been working on it for a couple of years. It's not actually vibe coded. And I was like, ah, this might be fake in that it's real video. But it turns out it's not fake.
Speaker 2:This is a video game, I believe. I've done a bunch of research and tried to debunk the idea that this was Assetto Corsa. I believe it is Assetto Corsa but I cannot tell it from real video. Like it's fully passed the Turing test at this point. This is like maybe the first video that I've been able to watch the full thing and firmly say like we are cooked in the in terms of video.
Speaker 2:Like this is... This passes the touring test. We were both confused by it. I don't know if you have any other takeaways. The the interesting thing is that you...
Speaker 1:My takeaway is I gotta shave more seconds off my lap time at You
Speaker 2:gotta shave some time off your off your time. But do you want this? Because there was some debate over I don't want my video games to look real. I want them to look like a game. Part of what makes this look real is that there's some camera shake and your...
Speaker 2:The camera position is behind the driver's head. As someone who spends a lot of time in a racing simulator, would you want this filter on? Would you want this feature? Is this appealing or is this just a cool viral novelty?
Speaker 1:I don't really care that much about graphics.
Speaker 2:Okay.
Speaker 1:But I would certainly take it for a spin.
Speaker 2:Yeah. Yeah. You should. It it seems pretty cool. Anyway, let me tell you about public.
Speaker 2:Invest across all asset classes. Automate anything with AI agents. Run trading strategies, risk management, money movements and monitor markets with AI agents for investing on public. There are...
Speaker 1:Says, please stop cutting off the intro count down music on your livestream final cuts. I enjoy the intro song. Please move in.
Speaker 2:Really? That's interesting.
Speaker 1:It's just so long.
Speaker 2:But people know to skip to five minutes maybe? I don't know. That's that's something I never considered. We thought we were doing such a favor, saving you from having to tap tap tap tap tap or scroll forward. We thought we were going the extra mile.
Speaker 2:Takes us a little bit of time. Saves you.
Speaker 1:I think it's a little treat for showing up live. Oh. Music's a little treat
Speaker 2:Oh, okay. Yeah.
Speaker 1:For being If with us
Speaker 2:you want to enjoy the intro music.
Speaker 1:The real ones.
Speaker 2:Show up live.
Speaker 1:Show up live.
Speaker 2:Okay. Otherwise, 2PM It's live exclusive.
Speaker 1:It's a live exclusive. So...
Speaker 2:Sorry to you in the chat.
Speaker 1:Sorry, We're
Speaker 2:not we're not giving you what you want. We're not listening to the customers. The customers don't know what they want. They'd ask for a faster horse. Well, there is a lot of a lot of fake news on the Internet.
Speaker 2:There's this idea of single flight life insurance from Jetstar. I was able to debunk this. It's a really ridiculous concept. $8 in 3,000,000 if your flight crashes for a single flight. Of course.
Speaker 2:Jetstar does actually sell insurance, but not this way. Very funny post though, but be careful out there because I'm sure a lot of people saw this and thought, hey, maybe that's real. I like this take on jet lag. Jet lag is kind of holy to me. I'm tired because I flew.
Speaker 2:I flew too fast too far. My body misses a different sun. I haven't been getting jet lagged lately. I've been doing pretty well. I don't know.
Speaker 2:It's just that I've just been doing East Coast for a I couple of days in and
Speaker 1:think RVs are going to have a huge comeback. You never have to worry about jet lag. Get ready. RV lag is not a thing.
Speaker 2:Get ready. Yeah. Do you think is actually gonna buy the the banana ball team? You think Disney or TKO and I've never watched The the
Speaker 1:second of it.
Speaker 2:The nano bananas. Maybe Google will buy them. Who knows?
Speaker 1:You know... Yeah. An AI company should buy them. So like get try to help with the popularity.
Speaker 2:Training data for hallucinated AI video. They already do it in real life. Get it in the dataset. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents whether you're writing code, analyzing data, creating content or automating business workflows.
Speaker 2:Codex helps you move project forward from start to finish. The other story that is worth sharing is that Reese Witherspoon is buying her company back. Hello Sunshine. It was valued at $900,000,000 in 2021, but potentially, she's gonna get it back for just 94% of what that headline valuation was. I you think were saying that's around $7,000,000 or something for this production company.
Speaker 2:So Candle Media bet on Witherspoon's celebrity brand and book club but it fell short as growth in direct to consumer subscriptions lagged. But always fun rooting for a founder getting back in the full ownership seat. So a lot of silver lining there, although I'm sure there was some money that was wagered and lost. Who knows? Who knows where it goes next?
Speaker 2:But very exciting to see her maybe back at the helm and getting another bite of the apple. I am personally I'm personally rooting for it. Also, do you think this is a recession indicator? The fact that startup launches are starting to do paid partnerships with all the hottest anonymous accounts? Robert Sterling, Wall Street Bets, Greg, and...
Speaker 1:Yeah. This is just the biggest anti signal. Like if you do this, I just assume that I shouldn't... That no one should care about your company. So just don't do it.
Speaker 2:Don't do it, folks.
Speaker 1:Be interesting. Yeah. Do something Original. That is original that will break through.
Speaker 2:Yeah. I think there's enough people that will just... Your brand will just be like, yo, you're the Astroturf brand. You're the brand that had to buy, you know, quote tweets. But there is I I believe that there's a industrial complex around this now.
Speaker 2:Like there is
Speaker 1:a Yeah. There's multiple companies that do this.
Speaker 2:Yeah. And so it's probably something that's pretty turnkey.
Speaker 1:Yeah. Sheel was saying like if you pay for x premium it should just block the paid partnership.
Speaker 2:That would be interesting. Yeah. Maybe maybe that would be something to do. It is it is cool that the disclosure came because for there there was a while there on x where there was a lot of stuff that was paid and was not disclosed. And this feels like a a step forward in terms of transparency.
Speaker 2:Makes the platform better, honestly.
Speaker 1:I'm Yeah.
Speaker 2:I'm I'm enjoying it. And I don't see that many of these paid partnerships. And sometimes they're funny. Anyway Well thank you for tuning into TBPN. Leave us five stars on
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