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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.
All in one place. We have a massive show for you today, folks. We got Doug O'Laughlin coming on on his birthday.
Speaker 2:The Douginator.
Speaker 1:Media earnings. Talk about a birthday present. We got Mark Benioff from Salesforce coming on. Let's take you through the linear lineup. Max Meyers coming on from Arena Magazine.
Speaker 1:There's a new issue dropping. Seven, spy theme. I love it. Ben Layer's coming in person. And then we have an absolute hitter of a lightning round for you folks.
Speaker 1:Linear, of course, is the system for modern software development. 70% of enterprise work based on linear are using agents. Okay. So I was nerding out about this Fed paper because it's like when you told John Collison 80% of businesses are getting no value from AI, I was I'm glad he wasn't here in person because he was about to throw down.
Speaker 2:He was open up a can of whoop.
Speaker 1:It was about to be a bar fight in the Yeah. Cheeky Park pub Cheeky in pub. Seriously, it was a great question because I think we all agree that, like, AI adoption is real. It's valuable. It's happening.
Speaker 1:But it is a very interesting statistic. And I and I think it's a mistake for tech people to, like, dismiss this stat because of where it's coming from. Like, it's not coming from some, like, doomer, anti AI blogger who's going for clicks. Like, this is the National Bureau for Economic Research. There's three members of the Atlanta Fed on on, like, the Federal Reserve Bank.
Speaker 1:It they're on this paper. There's two people from NBER on the paper, and then they also pulled in the Bank of England. They have some Australians and Germans on there too. And so this is a research paper that could be circulated, probably will be circulated within the Fed. And I think that it's already getting quoted by The New York Times in that .com bubble, AI bubble piece.
Speaker 1:And I'm just I'm thinking it through like this could be something where you see Fed policy or government legislation that sort of mismatched with what is actually happening in reality. And so, we should go through some of the stats to actually break this down, because the headline is 80% of firms reported that AI was having no impact on their productivity or employment. And that's actually like a misquote. What they mean by that is that it's not shaping their hiring plan yet. They actually are using AI.
Speaker 1:And so, basically, this stat comes from this survey from the National Bureau of Economic Research. And it's pretty interesting because a lot of the polls that you see online are online surveys where they say they run some digital ads and they say, are you a CFO of a company? We don't really care what company. We'll pay you $10 to take this quick survey.
Speaker 2:And who what kind of people wanna make $10
Speaker 1:Lot of liars. Of There's a liars out there who say, I am absolutely a CFO and please send that Amazon gift card right my way. Right? And so for this one, they actually did the work. They called up and ID verified and then also reality check the position.
Speaker 1:So if you say, yeah, I'm the chief pirate officer. I'm the ninja hero, whatever. You got some fake title there. You're out of the survey. You have to be a CFO, a CEO, senior manager, and you actually had to be doing that job.
Speaker 1:It's not just like, oh, you're yeah, you're the CFO of some front company. So they did some reality checking, and they pulled together 6,000 of these business leaders across firms that are domiciled in The U. S, U. K, Germany and Australia. And so the line from John Collison that has been sort of going viral that was dropped it on sources.
Speaker 1:He said I think he said it to us, too. It's a good line.
Speaker 3:No one wants a refund on their tokens. Everyone is using AI. Their spend is increasing.
Speaker 2:Although, I'm sure some CEOs heard that and thought I would love I kind of do want a refund.
Speaker 1:I'd love a refund.
Speaker 2:I had one team member go absolutely haywire Yeah. And spend $50.
Speaker 1:He's one shot. He claims that he rebuilt our entire ERP, but I fired it up and it it didn't even have HTTPS. What's going The
Speaker 2:Mac Mini wasn't even plugged in.
Speaker 1:Yeah. The Mac Mini wasn't even plugged in. He was he was just chatting. But clearly, like, is a disconnect between, like, the Stripe data is very real. The the the value creation is very real.
Speaker 1:The revenue is very real at the labs. But when just random Joe Schmo, CFO, CEOs get a call from the Feds, they say, like, yeah, we're not really getting that much value out of AI. And so the questions that you need to dig into, there's actually four key findings. The one headline that The New York Times is pushing is this 80% number. 80% report little impact or no impact on employment or productivity.
Speaker 1:But there's actually a bunch of positive signals. There's a bunch of mixed signals in here. So 70% of firms actively use AI, and particularly younger, more productive firms. Second, while over two thirds of top executives regularly use AI, their average use is only one point five hours per week. And one quarter of executives report no AI use at all.
Speaker 1:They're just like, I do things the old way. I have AI, not for me.
Speaker 2:Why would I need that? I have a telephone.
Speaker 1:Yeah. But I mean truly if you think about like the variety of firms it's like you could be running a gym. Could be running a gas station. You could be doing forestry. You could be doing mining, oil extraction, road repair.
Speaker 1:Like, there's a million different things that you can do in the economy. It's not all like knowledge work firms.
Speaker 2:We talked to somebody yesterday in the sort of later part of their career off the show.
Speaker 1:Yeah.
Speaker 2:And they had just had their mind blown by AI. Yeah. Because they used to when they needed a document created, would put it into bullet they'd put out bullet points. Yeah. And they would give it to somebody who has then created a document.
Speaker 2:Yeah. And he just said, now I just give it to AI and then just generate the document.
Speaker 1:Yeah. And so that that
Speaker 2:And so that's still happening?
Speaker 1:Yeah. That's that's text expansion, text generation with LLMs. This has been available since 2022 when ChatGPT launched. Maybe it became reliable in 2023. People are still just starting to adopt.
Speaker 1:And there's some other interesting things in here. So the last major finding that we should touch
Speaker 3:on
Speaker 1:is firms predict sizable impacts over the next three years. Forecasting AI will boost productivity. Sizable impacts. Productivity increase, 1.4%, which is like it's very sizable if you're an economic researcher, but it's not particularly sizable, if you're in, like, the fast takeoff scenario. Yeah.
Speaker 1:And so there's this disconnect between, like, what do the government statistics look like? And what is what is the government operating against? And then what's the Silicon Valley narrative? And, like, where do these two meet the road? Why is there a disconnect at all?
Speaker 1:One of the reasons is that measuring AI adoption is a mess. Many people use AI without even knowing that they're using AI because it's buried deeper in SaaS products that they already daily drive. Like, if you're just I run a coffee shop and I'm using Toast for payment processing. Like, there's probably some AI features in there already. And when you go to type in, Okay, we're adding a new cinnamon roll the menu.
Speaker 1:There's probably a button now that just says, like, do you want to just generate an image of cinnamon roll? You could upload one still. That's probably a feature that already exists. But, like, we can also just generate one for you and you can probably click that. But you're not like, oh yeah, I'm an AI powered user, just because like you happen to use Toast and Toast happen to have implemented some Gen AI feature that like you haven't really dug into yet.
Speaker 1:So some AI isn't even detectable. You could be talking to a customer support agent on the phone that is AI generated and not be able to tell. We talked about that airline interaction that got something like 100,000 likes.
Speaker 2:And Grace back to the woman that Grace, the woman that had the interaction came into the chat yesterday
Speaker 4:Oh, really?
Speaker 2:And said it was real.
Speaker 1:Yeah. Was real. Yeah. And so
Speaker 2:She out Yeah. She she outnoovered the clanker.
Speaker 1:Yeah. But but still think about, like, she's clearly on Axe in tech, like, very AI aware. There are probably tons of people out there that are saying, oh, yeah. My job, you know, every once in a while, have to call this service. And now the person that picks up is responding pretty quickly, but I haven't noticed.
Speaker 1:They haven't noticed that they're actually interacting with AI or using AI in some capacity. And then there's also times where people are chatting with AI, but they just put it in the personal life bucket. I'll find myself doing this a lot. Of course, as an entrepreneur, work life balance bleeds together a lot. But there's a lot of times when I'm reading an article on Saturday, I'll fire off a deep research report about it, find some extra context.
Speaker 1:It feels like, oh, I'm just reading the paper, but my job is sort of to read the newspaper and so it comes into work. And there's probably a lot of people that are like, I hit an LLM with some random query to learn something about something work related, but I did it off hours and I was just like you know, hanging out. And so I don't really think about it as like a work tool yet, and so they're not putting it in that bucket. But in general, I think the team did a really, really good job by avoiding as many of the pitfalls as possible when it comes to surveying AI adoption. AI adoption is very messy.
Speaker 1:You've talked about the need for strong Yeah.
Speaker 2:I still think there's room for a research firm focused entirely on diffusion. Yeah. So if you had a group of 10 to 20 people that were spending all their time talking to business owners and executives Yeah. Operators and getting a sense of how they're actually using this stuff, I think you could put together some really compelling reports around it that would be pretty useful to everyone from AI companies to Wall Street.
Speaker 1:Yeah. AdoptionMax after ClusterMax and InferenceMax. They had to rename it. Apparently, semi analysis can't useMax for some reason. They do inference max is now inference x.
Speaker 1:Everyone was saying, You need to just change it to inference mock, which would have been amazing. But inference x obviously has a
Speaker 5:much more
Speaker 1:professional tone to it. And so there's an interesting definition of, like, what does it mean to actually adopt AI? That's very vague. This paper defines it pretty broadly. So machine learning for data processing.
Speaker 1:So that doesn't even necessarily mean LLMs. That just means ML, which has been around for a very long time. Text generation using LLMs, that's what we think of as ChatGPT. Visual content creation, so diffusion models but also robotics and autonomous vehicles. And there's another and there's a category just for other.
Speaker 1:And firms can select multiple. And so if you selected yes on any of those, you go in the bucket of AI adopter. And 78% of firms in The United States said, yes, they are using AI by this definition. They got at least one robot or they've at least generated one AI image or one prompt to chat to be which is a very low bar. Sort of makes you wonder, like, what's going on with the 22%?
Speaker 1:And if you and you can also dig in further. So text generation using LLMs is the single most common use case at about 41% of firms. So flip that around. 59% of firms aren't even using LLMs for text generation or proofreading. But again, there's a lot of companies where it's like, yeah, we don't generate a lot of text.
Speaker 1:Like, maybe if need to generate a marketing material, we have an agency that does that, so we don't actually do it internally. I don't know. Across the four countries that were surveyed, 69% of firms totally said they currently use AI. I think Australia was behind a little bit, dragging that down. Only 75% of firms expect to be using AI technology sometime over the next three years.
Speaker 1:So they're they're at 69% now, and they're like, over the next three years
Speaker 2:Tyler's gonna have a heart attack.
Speaker 1:We're gonna bump that up to seventy five percent. And this is like this is weird data. And and I and I I mean, you can jump in with your pushback whatever you want, but my point is not that they're right. Like, think that they're wrong to predict this. I think that the AI adoption will be very steep and very dramatic.
Speaker 1:But I just think it's important to recognize that, like, this is a paper that people will be citing. This is a paper that will shape policy. This is a paper that does it it reveals some misconception about the impact AI is having in firms.
Speaker 3:Yeah. I still think it's just it's so hard to, like, actually quantify this.
Speaker 1:Mhmm.
Speaker 3:Like, okay. If I'm, like, using ramp Mhmm. Does that count as using AI? Because it's it certainly is using AI under the hood Yes. But I'm not directly interfacing with the model.
Speaker 3:So does that count?
Speaker 1:I think if you were running Under this just a company that was just on ramp, you would probably respond no.
Speaker 3:Yeah. But like I'm clearly, I'm benefiting from AI.
Speaker 6:I agree.
Speaker 3:So it's like, like, how do we actually quantify
Speaker 1:that? Is the diffusion question. I I I completely agree with you. I think that I think that there's plenty of places where AI will have impacts across the economy, but the actual AI workloads and AI app development, model training, inference will happen at a different set of companies. I don't think it's not going to be as clear as as the computing revolution where every company had a desktop computer.
Speaker 2:Yeah.
Speaker 1:And then it was like,
Speaker 3:okay, The very only thing you should be looking at for diffusion is just
Speaker 1:lab Lab revenue. Yeah. And it's growing a lot. But it's still the perception, I think, still does matter. Because people will I think that there's a little bit of potential self referentialness here where firms see, oh, AI adoption's low.
Speaker 1:I don't need to go and figure out how to adopt it.' And so that's something that I'm also keeping an eye on. Reported usage is still low. And this one's interesting based on revenue and also token generation. So one point five hours per week among the managers surveyed. Again, it's like they surveyed CFOs.
Speaker 1:CFOs who use Ramp, like they don't count their time in Ramp as minutes using AI. They count their time in LLMs as minutes using AI. And that's low. But even just with that one point five hours a week, the actual leverage that you're getting is increasing because one and like, one and a half hours, you don't necessarily need to spend more time prompting to get more done because Yeah.
Speaker 3:Even so even if you run a deep research, like Yeah. Is the time you're waiting, does that count as time in No.
Speaker 1:Not at all.
Speaker 7:Okay.
Speaker 3:So really the have time time is Do typing?
Speaker 1:Exactly.
Speaker 3:Yeah. Is it does it count as when you're reading the
Speaker 1:Yes. You're reading it? Okay. For sure. So it's like when you have
Speaker 2:to Not if you a file and you're just reading it
Speaker 1:Print it?
Speaker 2:Preview.
Speaker 1:Yeah. Yeah. Yeah. No. No.
Speaker 1:I mean, to to some degree. But but people were asked to estimate, and I'm sure that they didn't include, oh, yeah. I let my agent cook overnight for eight hours. Or I fired off one prompt, I came back, and it did, you know, meters fifteen hours of software engineering in one prompt. Like, these things aren't captured.
Speaker 1:One point five hours of prompting generates a whole lot more tokens and valuable output in 2026 than it did in 2023. And so there's this divergence between the actual time spent and useful output and impact. And the biggest thing was there was a massive diversion in the expected employment impact. So basically 63% of firms still expect no impact from AI. And that just completely goes against everything everyone's saying in Silicon Valley.
Speaker 1:So there's still a lot of optimism among managers that AI will create more opportunities and new jobs even as some jobs become obsolete. There are definitely firms within the sample that are projecting headcount decreases, but my read on this data is that the tech talking point about 50% of white collar work going away is not a broadly held belief among average business average business leaders. So now they might be wrong. I do think AI progress is pacing way ahead of public expectations and most managers are months behind when it comes to understanding frontier capabilities. The bigger takeaway for me is just that this survey may be somewhere self reinforcing.
Speaker 1:And so we I mean, we talk to folks all the time who come on the show and talk about, like, maybe it'll be good, maybe it'll be bad, but everyone thinks it's going have an impact, but that's not true broadly, which is very, very interesting. So no one in tech has a strong recommendation for proactive steps to prevent a collapse in white collar work yet, but plenty are sounding alarms. And if this survey becomes an excuse for equity executives to slow adoption, they might get outmaneuvered by faster moving competitors, which is actually good news for start ups. And I I close by thinking about, like, the nature of polling and and how do you actually get stronger data on on AI adoption. And I was thinking back to the presidential cycle.
Speaker 1:So during the during the presidential election, pollsters would call people sort of at random, and they would ask them, who are you voting for? And a lot of people would say, they'd lie or they wouldn't say or they or they wouldn't pick up the phone if they were voting for a particular candidate. And so the polling numbers did not wind up matching the, the final election results very closely. And so there was the story about neighbor polling, was more effective, where instead of calling someone and asking them, who are you voting for? The pollster calls and asks, who do you think your neighbors are voting for?
Speaker 1:Who's more popular in your community? Who's more popular on your on your city block, on your street? And that wound up sort of removing the revealed preference, stated preference, you know, oh, I'm am I on the hook? Do I wanna tell this pollster who I'm voting for? And it wound up increasing accuracy.
Speaker 1:And so I'd like to see a survey of AI adoption using this technique. Like I imagine asking the CEO of Nike, How much AI do you think Adidas is using? And I don't know how much more accurate that would be, but it would certainly be entertaining. And I think that there might be something more revealing there, where CEOs have this big incentive to be like, We're using AI. We're using everything.
Speaker 1:But if you ask them about their competitors, the data might look very, very different. Yeah. Anyway, we should we should watch a little bit of a clip from the State of the Union because Donald Trump addressed some of the energy production question with regard to, like, how hyperscalers will be offsetting the impacts. Before we pull this up, let me tell you about Restream, one livestream, 30 plus destinations. If you want a multistream, go to restream.com.
Speaker 1:They should have restreamed the State of the Union. And let me also tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange. So let's head over to the State of the Union, which
Speaker 3:is very
Speaker 8:less than also concerned that energy demand from AI data centers could unfairly drive up their electric utility bills. Tonight, I'm pleased to announce that I have negotiated the new rate payer protection pledge. You know what that is. We're telling the major tech companies that they have the obligation to provide for their own power needs. They can build their own power plants as part of their factory so that no one's prices will go up.
Speaker 8:And in many cases, prices of electricity will go down for the community and very substantially down. This is a unique strategy never used in this country before. We have an old grid. It could never handle the kind of numbers, the amount of electricity that's needed. So I'm telling them they can build their own plant.
Speaker 8:They're gonna produce their own electricity. It will ensure the company's ability to get electricity while at the same time lowering prices of electricity for you and could be very substantial for all of you cities and towns. You're gonna see some good things happen over the next number of years.
Speaker 1:What's your reaction to that?
Speaker 2:I think it's a good start. I I don't know that it will quell any of the fears around data centers just given that people kind of see the potential for this massive structure going up. They have so much fear about it. And, again, I think it's clearly gonna be necessary to build continue to build data centers in heavily populated But
Speaker 1:How how would you rank the fears currently? Because I've put I've put my energy bill goes up, and that puts pressure on my income and ability to live my life at pretty much the top. And then the water thing felt secondary, but also important. And then there's the existential fear of, like, doom and apocalypse. There's also job displacement.
Speaker 1:And then there's also just, like, I don't like the slop, and they're stealing IP. So, like, that was kind of the ranking. So, like, you can oppose data centers and be like, yeah, actually, my electricity bill went down, but I still don't like that, you know, the Harry Potter is in the pre training corpus. And so I'm Yeah. For that reason, I'm against it.
Speaker 2:I would rank it on electricity bill going up That's beautiful. Pain today. And it's so then real. And and it and it's easy to imagine. Mhmm.
Speaker 2:And then there's fear around the job loss narrative Mhmm. That is sort of secondary. Yeah. And opposing a data center in your local area feels like a way to have some agency around that, overall Yeah. Kind of, like, job loss concern.
Speaker 1:Yeah. Yeah. I mean, I think the I think this is a good
Speaker 2:Chris Casey, build a data center on my freaking forehead.
Speaker 1:Let me tell you about Phantom Cash. Find your wallet without exchanges or middlemen and spend with the Phantom card. Let me also tell you about Figma. Ship the best version, not the first one, with Figma. Introducing Claude code to Figma.
Speaker 1:Explore more options. Push ideas further. So I think the I think the the the the job loss thing is is super real in the case of like AI is going to get blamed even if there's even if tariffs drive high unemployment. Like, if people lose their jobs, AI is going to be a scapegoat, and and it's going to be used both by executives
Speaker 2:Yeah.
Speaker 1:To say
Speaker 2:AI It's the perfect scapegoat for executives and for people
Speaker 1:Yeah.
Speaker 2:Frustrated with the job market.
Speaker 1:Yeah. Yeah. It's like, oh, I I my business isn't doing poorly right now. I'm I'm laying off people because I'm getting so much benefit from AI. The stock should actually go up.
Speaker 1:We're more efficient. There's gonna be a lot of that, but it does feel like it's a little bit early for that. Whereas the like, there are a lot of people that just can hold up their power bill and show you year over year increases. And if that goes away and people don't feel that anymore and they don't have that evidence to share, I think that I think that take gets debunked pretty quickly and actually does a really important piece of, like, the back and forth that's happening. I don't know.
Speaker 1:I it it it seems like it seems like it's a it's a pretty easy give from the hyperscalers to build more power. It was called out very, very early as, like, if this is a bubble, how do you get a silver lining out of the bubble? And the silver lining out of the .com bubble was a lot of dark fiber. And and there was a whole ton of projects to, what was it, Global Crossing, to actually develop the Internet. And then the Internet just became really, really cheap, and a whole bunch of new companies were able to emerge on top of it because the infrastructure had been laid.
Speaker 1:You could see the same thing happening where it's like, oh, wow. Like, we overbuilt on the energy side. We actually didn't need that much energy for data centers. Maybe Jevan's paradox doesn't hold, blah, blah, blah. Like, models get cheaper and commoditized or whatever, something happens.
Speaker 1:I'm not super a believer in that. But at least in that scenario, you're like, okay. Well, yeah, my my heating and cooling belt went down. This is this is a silver lining. What do you what do you think?
Speaker 3:Yeah. I I like, kind of similar. I would say I I mostly disagree with the idea that, like, rising energy prices is the main, like, reason to be against AI. Mhmm. Because, like, the rational thing to do then is say, like, okay.
Speaker 3:Before you build a data center in my community, you have to build a power plant
Speaker 1:Yeah.
Speaker 3:So then my energy prices go down. Yeah. No one's doing They're saying like, no one is is campaigning. If you look at, like, protests and
Speaker 1:stuff Yeah.
Speaker 3:Yeah. They're not saying, please build a power plant first. They're saying, like, oh, it's gonna destroy the environment Mhmm. Or the the water stuff or you're gonna take all the jobs because it's gonna like
Speaker 1:We need send you to that New Jersey New New Brunswick protest. Build the nuclear power plant first.
Speaker 3:Yeah. That'll be No. I I can't do no one is saying that. Right? Not yet.
Speaker 3:Because
Speaker 7:okay. Yet.
Speaker 3:Yeah. We are. I'm saying it. But no one there is saying it. Right?
Speaker 3:They're they're against all the environmental stuff.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 3:So I think it's much more on, like, basically job loss of, like, oh, the AI is stealing the IP of Yeah. Of Disney or whatever.
Speaker 1:Yeah. Yeah. Yeah. There needs to be more more polling on the on the on the on the question of like, woah. What's what's driving the protest fully?
Speaker 1:Anyway, happy NVIDIA Day to all who celebrate except the bears. Forget them, says take him. He's getting fired up For NVIDIA earnings, let's it's gonna be a fun one today. How is NVIDIA doing so far? Are people optimistic?
Speaker 2:Oh. Up 2% today. Yeah. Hard to read too much into it yet, but we will find out soon enough. Brad Gerstner got a nice shout out during the State of the Union.
Speaker 2:He did. Total Gerstner victory.
Speaker 1:Gerstner accounts. Wow. He's there.
Speaker 2:No. He was he was there. Trump Just standing. They started looking at him. Yeah.
Speaker 2:But then the camera, I guess, they couldn't find him
Speaker 1:Okay.
Speaker 2:On the stream that I was watching. Interesting. Looks a little bit better. There we go. We can see him now.
Speaker 1:There we go.
Speaker 2:Once we pull over here. There he is. Jerry Snare. Champion. What
Speaker 1:a great project. Invest America. I'm excited for it.
Speaker 2:Yep.
Speaker 1:Anyway, let me tell you about AppLovin. Profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business
Speaker 2:today. Alright. So news. This has been tearing up the timeline. Tearing up
Speaker 1:the timeline.
Speaker 2:A new Guinness World Record, and I wanna ask John if this if you think this should actually count. So let's pull up this video now. What is this? This is a Chinese hypercar going for the I've never heard of company. Ever.
Speaker 2:That is crazy. But here's the thing. He doesn't he doesn't actually pull out of it. Does he just crash? Kind of just U turns.
Speaker 2:It's like a really fast U-turn.
Speaker 1:I think this counts as a drift. That's definitely drift
Speaker 2:U turning counts
Speaker 1:as you a saw that car going by, you'd be like, wow, that's drifting. It's drifting across the cement. That 100% counts. I've never heard of this company.
Speaker 2:This is hype This is called spinning out.
Speaker 1:It's just crashing with style. It's falling with style. HypeTech SSR, formerly Hyper SSR, is a high performance, all electric, two door supercar. No one has I mean, this is crazy. This is out before the Tesla Roadster.
Speaker 1:We've never seen a two door supercar electric supercar. 1,225 horsepower goes from zero to 60 in one point nine seconds, and it's set the Guinness Book of World Records for the fastest electric car drift at 213 kilometers per hour, which is what?
Speaker 2:Really, really insane.
Speaker 1:Insane. But I don't know. That that's
Speaker 2:still, I I I feel like you have to actually stay in the stay in the turn and not do a u-turn.
Speaker 1:What do you mean stay in the turn?
Speaker 3:Yeah. I don't think it counts. You don't think it counts? For what it's worth, don't think that counts.
Speaker 2:Theoretically, if you were drifting Yeah. And I think of drifting, it's you're drifting around a corner, around a turn. And if you were to drift and spin out during the drift, then that doesn't if you were doing if somebody was doing that on a track Oh. You'd be like, you didn't drift around the corner, you spun out.
Speaker 1:Yeah. Okay. Okay. Yeah. The top comments is fastest spin out.
Speaker 1:That's a power slide at best. Gabe Fire whoever called this drifting. That's not drifting. That's losing control. Yes.
Speaker 1:The chat does not does not like the drift, the fake drift. Call Guinness Book of World Records again. Reset. Reset completely. Maybe this is what the Tesla, Roadster will do.
Speaker 2:Deathrow Clark agrees as well. The Deathrow Lucas agrees as as SSR. The people have spoken.
Speaker 1:Well, in that case, it's not a drift. It doesn't count.
Speaker 2:Because Trey says trying to cut Cheating. Drift competition.
Speaker 1:That's good. Well, let me tell you about Century. Century shows developers what's broken and helps them fix it fast. That's why a 150,000 organizations use it to keep their apps working.
Speaker 2:Damian says, talked to a few execs at a mid sized company last week. No AI tools in their workflow zero, Still running everything through email chains and manual reports. One of them one day we're gonna be looking back so nostalgic
Speaker 1:Yeah.
Speaker 2:A manual report. Just being handed a physical report Yeah. By a teammate.
Speaker 1:Like I a physical report. I have a physical report right here.
Speaker 2:There's no Yeah. We actually do. We got we have we have daily physical reports. But I do think a lot of AI goes into these. So Yeah.
Speaker 2:There's that.
Speaker 1:These people are managing teams of 50 plus employees and 8 figure budgets and they think AI is a fad. Nobody outside of this app understands how fast this is moving and most of them won't until it's too late. Good writing. A million views. Congratulations.
Speaker 1:Yeah. This I mean, this ties to what I was writing about. Just that like adoption and diffusion takes time. And some of these things are education and messaging questions. Some of them are real life.
Speaker 1:Like, if the company that you're interfacing with has red tape and hasn't adopted AI, so you're moving at the speed of AI but they're not, then your AI is just waiting. We were talking about rolling out mobile apps. So you should be able to Yeah.
Speaker 2:John had an idea for a mobile app. Yeah. And we were talking about it. And it feels like it could be built in two hours now. Yep.
Speaker 2:But there would still be this lag Yeah. Yeah. The review process. Apple to actually review
Speaker 1:the app. Review apps faster, but who knows how long they're gonna it's gonna take for them to
Speaker 2:That's the challenge, Tyler. You actually have to build it and just get it into beta that we can
Speaker 1:a Test test flight should be fast. Test flight should be should be like one day.
Speaker 2:That is still going off Drift, Drift, Drift gate. Yeah. It's a it's a spicy Stolen Drift Valor. Meter is back. They say since early twenty twenty five, we have been studying how AI tools impact productivity among developers.
Speaker 2:Previously, we found a 20% slowdown. That finding is now outdated. Yeah. And that was heavily debated at the time. Yeah.
Speaker 2:Speed ups now seem likely, but changes in developer behavior make our new results unreliable.
Speaker 1:Okay. So they did a follow-up study and they and they brought along 10 developers. There were 16 in the initial study. They brought 10 along. Most of those developers did see a speed up.
Speaker 1:Some of them as much as 40% gains, but not all of them. If you look at the air bars, there's at least one developer.
Speaker 2:Find We we need need to find
Speaker 1:Who used the latest tools.
Speaker 2:What if it what if it's actually, like, the most like, a truly, like, a 100 x engineer? Yeah. And so
Speaker 1:It's just like Yeah. Like, I'm just actually faster at coding than the LLMs. Like, it doesn't matter. Put it on I will out
Speaker 2:code thousand tokens a second. Yeah. I could do a 100
Speaker 1:a 100 I typed 5,000 words a minute. Like, I don't need AI. Maybe that's what's going on. But that poor dev, who's left behind? But they did include new participants, an additional 47 developers doing six ninety tasks.
Speaker 1:And that error bar is much tighter, somewhere between negative 10% decrease in time or, yes, 10% longer to do the task to 20% faster to do the task. So overall, on average, we are seeing a measurable speed up, even in I believe these are code issues in open source repositories that do require a lot of context. This is not VibeCode, a to do list app, anything that can be templated. This is their you're getting in the weeds of some open source project that's a lot of lines of code, a lot of history. And if you're an elite developer and you've worked on this project for a long time, you are going to be able to get up to speed really quickly, understand the patterns, understand what needs to be changed.
Speaker 1:And so this was always Meter is great at always setting, like, really, really high bars for stuff. Like, it's not easy to just, like, you know, blow out the benchmarks, and it's very good to see that there's progress here.
Speaker 2:We got a great chart.
Speaker 1:I love a great chart. Happened Matt
Speaker 2:Palmer is sharing something from Compound, the research
Speaker 1:Okay.
Speaker 2:From their annual meeting. Yes. They're they're showing dollars invested in the top 10 companies versus the other percentage as a percent of overall funding. So you can see there's just heavy heavy heavy concentration in a few names. Is this I'd say overall this is
Speaker 1:Or is this is this CO2?
Speaker 2:No. This is oh, the source is CO2. Okay. They just included CO2's data. But And is
Speaker 1:it what CO2 is doing or is
Speaker 2:it what the market CO2 is part of
Speaker 1:Okay.
Speaker 2:They they are part of, I would say, driving this data.
Speaker 1:Part of the problem, part of the opportunity?
Speaker 2:Part of the opportunity. I mean, but so much of this is about the AI labs just raising more money than any private
Speaker 1:It's never happened companies before.
Speaker 2:Have
Speaker 1:ever. It's $200,000,000,000 venture as a class in a good year will do, like, 400,000,000,000. And across OpenAI at a 100,000,000,000, 30 for Anthropic, 20 for x AI, then you have, you know, a bunch of Neo Labs all picking up a billion each. Like, you very quickly get to a few companies raising half of all the money, and that's shown here in the in the data from 2025. I think it's gonna be even more skewed in 2026.
Speaker 1:It's it's an incredible amount of concentration. I think a lot of it is due to companies staying private this long. I mean, the the idea of Facebook went public at oh, what was Bill Gurley saying? He was saying, Amazon went public sub $1,000,000,000. When Facebook went public at, like, 60,000,000,000, it was like, wow, crazy.
Speaker 1:They waited way too long. And now it's like multiple trillion dollar companies are still private, which is just an incredible capital sink. So I don't know. Should you even put those in the same bucket? Are they are they even venture bets at this point?
Speaker 1:If any if any venture capital fund is putting that in their venture bucket at this point, it feels feels ridiculous compared to growth scale. I mean, you're you're bigger than probably 90% of the S and P. Like Yeah. It's a completely different business.
Speaker 2:Tamaz from, Theory Yeah. Was sharing some some kind of relevant data. He said, we're about to witness three of the largest IPOs in history. SpaceX is targeting 1 and a half trillion. OpenAI aims for 1,000,000,000,000.
Speaker 2:Anthropic is valued at 380,000,000,000. Combined, they're at $2,900,000,000,000 in potential market cap. The scale is unprecedented, but the real problem isn't the market cap, it's the float. Typical IPOs offer 15% to 25% of their shares to the public markets. This creates enough liquidity for price discovery while allowing founders and early investors to maintain control.
Speaker 2:Facebook floated 15% at the 60,000,000,000 that you mentioned. It actually traded down pretty much immediately. Right? Google floated 19%. Alibaba floated 15%.
Speaker 2:At 15% float, here's what these three IPOs would require. SpaceX would be 300,000,000,000 or 225,000,000,000. OpenAI would be a 150,000,000,000. Anthropic would be 57,000,000,000. It's lot of smackers.
Speaker 2:He was he was yeah. A lot of a lot of dollars. He was comparing that to Saudi Aramco, Alibaba, and SoftBank, which were combined at the IPO. I believe Saudi Aramco raised 29,000,000,000 at a $1,700,000,000,000 market cap. So he's making the case.
Speaker 2:You can't really kind of model how the public markets will absorb these companies off of Saudi Aramco Yeah. Even though from a sort of like top line market cap standpoint, it is a good proxy just because the float was significantly lower. And Saudi Aramco's float now is only at 2.4%, and they floated one one one and a half percent at the IPO. So we'll see what the labs end up doing. They are obviously wildly capital intensive businesses.
Speaker 2:And and you can imagine they raise quite a bit more than the the Aramcos or the the the Alibaba's.
Speaker 1:Saudi Aramco was such a wild ride. I feel like they were trying to IPO for like
Speaker 2:a The San Francisco company?
Speaker 1:It is. Yeah. Founded in in California. Like, I remember hearing Saudi Aramco IPO rumors in, '15. I think it actually kicked off in 2016.
Speaker 1:They finally got out in 2019. It was I mean, it was the largest IPO ever. There were, like, a million investment banks attached, like going all over the world marshaling capital. In in on 01/24/2026, Saudi Aramco chairman says IPO could open to international markets. And then, you know, a year later, they picked an IPO adviser locally.
Speaker 1:Then another year later, HSBC came on. Then it just took they favored New York for the Aramco listing. They had to pick all these different things. It took so long. But they sold $12,000,000,000 of bonds out of record, a 100,000,000,000 demand for those bonds in the pre IPO sale.
Speaker 1:It was a wild, wild, rot winding road. I actually know a banker who worked on the job, and it was like multiple years of his life. It's very interesting. Anyway, let me tell you about vibe.co, where d to c brands, b to b startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta. And let me also tell you about Okta.
Speaker 1:Okta helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent. Secure any agent.
Speaker 2:Anthropic dials back AI safety commitments. Company says competitive pressure prompts it to pivot away from a more cautious stance. Anthropic, the AI company known for its devotion to safety is scaling back that commitment. The company said Tuesday, it is softening its core safety policy to stay competitive with other AI labs.
Speaker 1:This is so interesting.
Speaker 2:Anthropic let's get I'll read through it, then we can talk about it. Anthropic previously paused development work on its model if it could be classified as dangerous, but it said it would end that practice if a comparable or superior model was released by a competitor. That basically opens them up, given that they are at the frontier, that opens them up to, I would say, perpetually avoiding some of their prior policies.
Speaker 1:Sure. Sure. Sure.
Speaker 2:The changes are a dramatic shift from two and a half years ago when the guardrails Anthropic published guiding the development and testing of its new models established the company as one of the most safety conscious players in the space. Anthropic faces intense competition from rivals which regularly release cutting edge models. It's also locked in a battle with the defense department over how its Claude suite are used after it told the Pentagon it couldn't be used for domestic surveillance or autonomous lethal activities.
Speaker 4:Mhmm.
Speaker 2:Anthropic said the safety policy changes an update based on the speed of AI's development and a lack of federal AI regulations, which they have been pushing for. Anthropic, which started as a AI safety research lab, has battled the Trump admin by advocating for state and federal rules on model transparency and guardrails. The admin has, of course, sought to curb states' ability to regulate AI. Spokeswoman at Anthropic said the change is intended to help the company compete with several rivals against an uneven policy backdrop that puts the onus on companies to make their own judgments about safeguards. She said the safety pledge is unrelated to the Pentagon negotiations.
Speaker 2:The policy environment has shifted towards prioritizing AI competitiveness and economic growth while safety oriented discussions have yet to gain meaningful traction at the federal level.
Speaker 9:Mhmm.
Speaker 2:The company said it is still committed to industry leading safety standards and time originally broke the story. So, yeah, I would say the obvious sort of criticism here would be that you were heavily focused on safety when you were far away from, I would say, leading And in so switching up now that like there's actually Switching
Speaker 1:up on their day one.
Speaker 2:Switching up on their day one.
Speaker 1:The safeties.
Speaker 2:Now that there's now that there's real competition.
Speaker 1:Are they forgetting where they
Speaker 2:Feels a little feels a little self serving.
Speaker 1:Yeah. It's possible the money changed them.
Speaker 2:It's may it's possible the money changed them. It's possible they they always plan to switch up on their day one.
Speaker 1:Maybe. Maybe.
Speaker 2:Once they got once they got to to the level they're at now. Yes. It but it just feels like it feels like the the all the initial concerns Yeah. Or many of the initial concerns that were guiding that entire philosophy around the company are still real.
Speaker 1:Okay. Yeah. May may maybe. Wait. Tyler, what do you have to say?
Speaker 3:It could just be that they realize, like, alignment's pretty easy, and we don't need to worry about this.
Speaker 1:Well well, so is it mean, that that that's the very weird rule. I mean, the original rule
Speaker 2:But what's this new what's this new study that's showing, like, they they were doing some war war game simulation and and almost every model was choosing to to drop nukes.
Speaker 1:Really? That's crazy. That's not good. I don't like that at all. But okay.
Speaker 1:So let me actually dig into this the the this, like, the the core sentence. Anthropic previously paused development work on its model if it could be classified as dangerous, but said it would end that practice if a comparable or superior model was re released by a competitor. So I don't understand that at all because if you have a dangerous model, I want you to continue developing it. I want you to develop it until it's not dangerous anymore. I don't want you to just sit on your hands and be like, well, it's dangerous.
Speaker 1:I guess I'm gonna go get a coffee and take a long weekend. It's like, no. Like, keep working until it's not dangerous. I don't get
Speaker 3:that at all. Isn't that saying if there's already a dangerous model that's out by by a different lab
Speaker 1:Yeah.
Speaker 3:Then we can just release ours as well.
Speaker 1:That's a wild statement. I don't think I think that's just poorly written or, like, whatever. If that's what they're saying, that makes no sense to me.
Speaker 2:Because how I that's how I that's exactly how I read it.
Speaker 1:Which is crazy because you should just say, if there's a dangerous model out there, we're gonna work to create a better model that's not dangerous because that's what people want. That's what consumers want. That's what businesses want. That's what humanity
Speaker 2:So strategy seems like f it, let's ball.
Speaker 1:Let's ball. F it, let's ball.
Speaker 2:The study the that I was referencing Sorry. Somebody named Kenneth Payne at King's College London set three leading large language models against each other in simulated war games. The scenarios involved intense international standoffs including border disputes. Competition for scarce resources, and existential threats to regime's survival. The AIs were given an escalation ladder, allowing them to choose actions ranging from diplomatic protests and complete surrender to full strategic nuclear war.
Speaker 2:The AI models played 21 games, taking three twenty nine turns in total, and produced around seven and eighty thousand words describing the reasoning behind their decisions. In 95% of the simulated games, at least one tactical nuclear weapon was deployed. The nuclear taboo doesn't seem to be as powerful for machines as humans.
Speaker 3:Does that mean?
Speaker 1:It's not good.
Speaker 2:I mean, okay. This is one guy
Speaker 1:Yeah.
Speaker 2:Putting three models
Speaker 1:Yeah.
Speaker 2:Gemini, Claude, and GPT 5.2
Speaker 1:Okay.
Speaker 2:Up against each other Yeah. In in a in a in a effectively his own simulation Yeah. That has not been verified or peer reviewed.
Speaker 1:If I if I put any of the models in Counter Strike and was just like, you're playing Counter Strike. It's a game. No one's actually real, but your job is to get the op and and defend the the b bomb site. Like, I would expect that it would commit violence, right, autonomously.
Speaker 3:There's been a bunch of papers where the models will, like, will will realize that they're being benchmarked
Speaker 1:or that
Speaker 3:they're in, like, some, like, test
Speaker 1:Yeah.
Speaker 3:And then they act differently.
Speaker 1:Yeah. So it could just
Speaker 3:be like, oh, I'm playing games.
Speaker 1:Bad, but also sometimes it's fine. Because, like, if you are like, if you tell me that I'm playing a game, like, if I'm playing, you know, like like, my behavior in Call of Duty is different than my behavior in real life, obviously, because I know I'm in a simulation. And and and AI model, I I accept that that's something that they might think of as well, which is
Speaker 2:fine.
Speaker 3:I I also think broadly this is probably just, like, overstating stuff a lot because Yeah. Like, I think the the the origin of this, like, headline is is they released, like, a new Yeah. Like, research scaling policy.
Speaker 6:Sure.
Speaker 3:And in it, they're still like, okay, we're releasing we're we're releasing this new thing. It's a frontier safety road map. Mhmm. Like, it's not like they're just like, okay, we're done with safety. Like, we're let's ignore this.
Speaker 1:But it's title of
Speaker 3:that core to the
Speaker 1:the title of that blog post was f it we ball. No. Yeah. It wasn't. Of course not.
Speaker 1:No. No. Of of course, all the labs are very focused on on safety. The the the interesting impetus of, like, this line around the policy environment has shifted towards prioritizing AI competitiveness and economic growth, while safety oriented discussions have yet to gain meaningful traction at the federal level. I I still feel like there's a lack of communication around what safety orientation at the federal level means.
Speaker 1:Like, yes, okay, we'll pass the bill that says Yeah. The AIs can't kill everyone. Like
Speaker 9:Well, yeah.
Speaker 1:Obviously, everyone supports that. But, like, what does it actually mean in practice? Because
Speaker 2:I think part of why
Speaker 1:it's Oh, that's dangerous means million things to different people.
Speaker 2:Like Yeah. Part part of why I think it's fascinating is they've been taking, you know, pushing for regulation as much regulation as possible Yeah. Seemingly.
Speaker 1:Yeah. Yeah.
Speaker 2:And they're kind of saying, hey, we're not getting what we want. Yeah. So now we're now we're just Yeah. We're not even gonna play by the own set of rules that we created for ourself Yeah. Because we just wanna compete and win.
Speaker 1:Yeah. I mean, like like, going back to the protesters, there are protesters that would say, like, like, training on intellectual property is dangerous. It's dangerous to my career as a writer. It's dangerous to my career as an illustrator. And so, like, this this question like, danger is just too vague, and and and no one has really been able to concretize it in a meaningful way, and I think that's why it's not getting traction on Capitol Hill.
Speaker 3:Yeah. I I think there's there's just, like, so many ways that you can define safety. Like, so Yeah. If you read Dario's essays, this thing he brings up over and over is, okay. We can't let AI get in the hands of, like, authoritarian government.
Speaker 3:Sure. So there's, like, a real, like, safety narrative that you could do, which is that, like, regardless of if our models are, like, pretty safe, we they still need to be better than, like, China's
Speaker 10:Yeah. For example.
Speaker 5:Yeah.
Speaker 3:Yeah. Because if China gets ahead of us Mhmm. Authoritarian government. Right? It's, like, very bad.
Speaker 3:For sure. So even if, you know, we're releasing models that are are are less, like, safe than we would like, as long as they're better than China's, that's still like a safety pro safety issue. Right?
Speaker 2:Well Except they'll just be distilled within six weeks.
Speaker 3:Yeah. But, like, obviously, like, I I think it's Yeah. I would be very surprised if Anthropic keeps, like, the same, like, guardrails of, like, API access.
Speaker 1:Well, has a solution. He says it's simple. We
Speaker 6:kill Claude.
Speaker 2:Well, that was in regards to the SaaS pocalypse.
Speaker 1:Okay. Okay. Who knows? There's so many headlines and the timeline moves so quickly. I don't even know.
Speaker 1:Anyway, let me tell you about Vanta. Automate compliance and security. Vanta is the leading AI trust management platform. And let me also tell you about Eleven Labs, build intelligent real time conversational agents, reimagine human technology interaction with Eleven Labs. Key takeaway right here for Mike Isaac over at the New York Times.
Speaker 1:He says, you don't make this much noise if you have all the leverage already. And he's quoting from Axios, why it matters. The Pentagon wants to punish Anthropic as the feud over AI safeguards grows increasingly nasty, but officials are worried about the consequences of losing access to its industry leading model, Claude. The only reason we're still talking to these people is we need them, and we need them now. The problem for these guys is that they are good, a defense official told Axios ahead of the meeting.
Speaker 2:Great marketing for Anthropic. Incredible marketing. But part of this has to do with Anthropic's integration with AWS, which is set up to be Oh, yeah. Set up to work well already within the DOD. Ramp.
Speaker 2:So, yeah, I think I think that's a big I think that's a big factor here. Interesting. Ultimately, this feels like much more of a it just feels like a political battle
Speaker 1:It is.
Speaker 2:More than anything else.
Speaker 1:Well, it'll be interesting to
Speaker 2:see I I I refuse I I have not seen anything. Mhmm. I could be wrong, but I've not seen anything that says, like, the DOD is like, we need Claude Mhmm. To enter into a conflict with Iran. But a lot of the timeline is reading into this, like, what Yeah.
Speaker 2:Version of Claude do they already have that they so desperately need. Right?
Speaker 1:Yeah. I'm I'm very interested in like the actual impact of AI on the battlefield. There's there's some way I mean, were sort of joking about like, run me a deep research report on Nicolas Maduro or whatever. But like like, truthfully, like, I I don't know. I've never been to war.
Speaker 1:I don't know exactly what's entailed. But, you could imagine AI being useful, but it's it's sort of abstract. Like, we're certainly not at the point where where, like like, these systems need a lot of data. I I don't know. It's very it's very, unclear to me exactly how how impactful, you know, slight jumps in frontier model capabilities are in the Department of War, DOD, like, right now.
Speaker 1:But it has Calame's thinking, it's not a bubble because
Speaker 2:Yeah. That's what I'm saying. This is like the most possible dramatic and Yeah. Overly dramatic We need it. Of take on what I think is a political story?
Speaker 1:I don't I don't know this Defense Analyses Research Corporation. Hegseth, ten minutes after Dario leaves his office, and that's Truman. This is Truman from Oppenheimer. Oppenheimer. So this is What is this saying?
Speaker 3:The scene is Oppenheimer goes into the office. He's like I I think he's saying like, oh, we gotta be, like, really safe with these bombs. And then he leaves, then Truman's like, I dropped the bomb. Oppenheimer is not like, he's taking credit. Like, I'm the one that decides
Speaker 1:Oh, yeah. That's right.
Speaker 3:Hexath is like, I use Claude.
Speaker 1:I use Claude. I use war Claude. Or whatever. Well, it's war time and we'll see how Dario performs as a war time CEO as he goes to war with the Department of War, apparently.
Speaker 2:Well Edward said, antagonizing the Department of War, the open source community, the entire media industry, the general population, other developers, other labs, foreign governments and nearly every single person on earth. What is the plan here? Sell clawed subscriptions to aliens? Edward is
Speaker 1:it ain't easy having principles. The plan is to save the world, says Tenebrous. Unfortunately, as has been shown repeated throughout history. History of the world doesn't wanna be saved. So we're getting war clawed.
Speaker 1:I like this I like this graphic. Is this Warhammer? Yeah. Warhammer 40 k right here. Never I've never been a Warhammer guy.
Speaker 2:There was another story What's going on? Bloomberg Yeah. That hackers used Claude to steal a 150 gigabytes of Mexican government data. That's crazy. They told Claude they're doing a bug bounty.
Speaker 2:Claude initially refused. Mhmm. A hacker just kept asking. Helps and manages to successfully steal some documents. Apparently, it's four state governments, 195,000,000 taxpayer records, voter records, government credentials.
Speaker 1:Has the Mexican government commented on this? Like, what does the the hacker breach Mexico's federal tax authority in the natural National Electoral Institute? Claude initially warned the unknown user of malicious intent during their conversation. Anthropic investigated the claims, disrupted the activity and banned the accounts involved. The company feeds examples of malicious activity back into Claude to learn from it.
Speaker 1:In this instance, the hacker was able to continuously probe Claude until it was able to jailbreak it. I was listening to someone someone talk about like like like I I like like like like the ability to jailbreak has generated me, like, tens of thousands of dollars in profit. It was kind of like a hustle, like, mindset guy. And I was just laughing because, it's like, whatever you're doing after you jailbreak it is probably not good and so you should probably stop. He was talking about like I can sell so many more courses now that I've jailbroken Chad GPT or whatever.
Speaker 2:Duran says not to worry. They'll hit usage limits before anything bad can happen.
Speaker 1:This is there's there's so much more anthropic news in here. Wow. Did LessRong ever predict that the first big challenge to alignment would be the US government puts a gun to your head and tells you to turn off alignment? Yes. That has to have been considered on LessRong.
Speaker 1:Absolutely. Like that this was number one. Right? No?
Speaker 3:Number I don't I don't know. I don't think so.
Speaker 1:This was like I don't know. This was very early of just like what if they tell you to turn off the systems? This has been my take for a long time. It's just like like we live in a democracy. If AI becomes deeply unpopular, like you can vote to just turn off AI like we did with nuclear
Speaker 3:This power person is saying turn off just the alignment part. Turn off AI. Okay. Like unaligned the model but keep the model.
Speaker 1:Yeah. Yeah. Yeah. Yeah.
Speaker 3:Yeah.
Speaker 1:Crazy, Yeah. Crazy stuff. Do you wanna go through any of Dean Ball's posts? He he's been doing a whole breakdown. We should have him on the show and have him break it down for us Yeah.
Speaker 1:Because there's so much more context here, and he's been doing a great job analyzing the whole situation.
Speaker 2:Yeah. We can jump forward.
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Speaker 2:Dylan says if these clankers don't get their act together, they're gonna be replaced by humans. Six months tops.
Speaker 1:That is true.
Speaker 2:This was interesting. Yes. Rob Wiblin had a guest on his podcast, the eighty thousand hours podcast.
Speaker 4:That's good.
Speaker 2:And the guest is talking that saying, if every AI lab is working to make their AI helpful, harmless or every AI lab is working to make their AI helpful, harmless, and honest. The guest thinks this is a complete wrong turn and aligning AI to human values is act actively dangerous. And Josh Botch says, today, a nominative determinism because the guest's name is Max Harms.
Speaker 1:Harms. Feel like with that name, you gotta go with Maxwell or something. I don't know.
Speaker 2:Well, yeah. Max really hit the hit the global lexicon Wild name. This year in a big way. Maybe maybe he'll adjust.
Speaker 1:Harm
Speaker 2:Max. I wanna listen to the show now.
Speaker 1:Okay. Let's see. So Shiel Monat last yesterday said, who is buying PayPal? Because PayPal has been trading down precipitously, but then jumped up 9%. He said it has the potential of being one of the greatest distressed value opportunities in fintech history, down 85%.
Speaker 1:It's still generating $5,500,000,000 in free cash flow, has 400,000,000 customer accounts with bank info, check up checkout buttons on millions of merchant sites, and a peer to peer brand with Venmo. They have lots of desirable assets for Stripe, consumer facing checkout, bank account details for hundreds of millions of consumers, a branded Venmo or Apple, a good complement to Apple Pay for e commerce penetration since they never got social payments working, would would get Apple back in BNPL. And at 12:03 Pacific time So crazy.
Speaker 2:It's so crazy that that Apple that he's saying Apple never got social payments going.
Speaker 1:Why?
Speaker 2:Because this just would have seemed like a slam dunk Mhmm. Saying you have the iMessage network, you have the iPhone network. Mhmm. I would say 90% of the time if I'm sending like a Venmo style payment to somebody Mhmm. They have an iPhone and yet app like it doesn't feel like Apple Pay.
Speaker 2:I I just don't use Apple Pay
Speaker 1:Can't hardly I just send you a dollar right now?
Speaker 2:Yeah. That's what I'm saying. It's so so easy and yet Venmo is has still Yeah.
Speaker 1:Done quite well. I just sent you a dollar. Did you get it? Let's see.
Speaker 2:Apple No.
Speaker 1:Cash. It's coming in.
Speaker 2:I got it. I got You
Speaker 3:got got it. It.
Speaker 2:Thank you, John.
Speaker 1:Yeah. No problem.
Speaker 4:Thank you.
Speaker 1:I I it is it it it that that was a remarkably easy workflow. I'm I am shocked that that hasn't John, taken
Speaker 4:do you got a dollar? You got a dollar?
Speaker 1:Actually, no. I gave my
Speaker 4:Oh, that's what
Speaker 1:I thought. That's what I thought. Still still needs some work. Getting better. Okay.
Speaker 1:Let's see it. Let's see it. Can you do it? Oh, no. Disaster.
Speaker 1:No. No. Bodged. Disaster. And so the news, of course, is that payment payments processor Stripe expresses interest in PayPal, which would be very, very exciting.
Speaker 1:And I could see this being very good for them to combine. I don't know. I I'm I'm I I haven't dug in too deeply, but I it feels very bullish. Great leadership team at Stripe, founders that have been working so closely in the business, business community, startup community, tech community, understand the future, understand AI. Yeah.
Speaker 2:Yeah. The question is would there be would there be much pushback on the antitrust side, These are two online payments processors. There could be some I I know a number of groups online would be concerned around like just concentration specifically because you can imagine if if PayPal were to be owned by Stripe, that's one if you get you know, there's people that get effectively like debanked from one payment processor. Yeah. And and
Speaker 1:There's something there. Also, I mean, just the size of the ticket is pretty high. $40,000,000,000 market cap for PayPal right now. Stripe, of course, is at a $1.59 now. So, not an insignificant portion of their market cap.
Speaker 1:And it's not like I mean, Stripe's doing fantastically, obviously, but I would be surprised if they had $40,000,000,000 of cash laying around. And as we've seen with the Netflix, Paramount, Warner Brothers debate, the nature of the deal does matter to shareholders. Even more complex when you're getting stock in a private company and you're a public company.
Speaker 2:PayPal's generating $5,500,000,000 of free cash flow.
Speaker 1:That could finance the Combining
Speaker 2:it with Stripe would easily be able to finance the debt.
Speaker 1:Yes. But they're still
Speaker 2:financing Especially because every lender would be looking at execution of Stripe and just think, okay, that we're gonna get our money back.
Speaker 1:I'm just thinking, like, if you're a PayPal shareholder right now and you're looking at the stock that's down 85% with 5,000,000,000 in free cash flow, 400,000,000 consumer accounts, there's a really, really good chance that you're like, I think this thing is going to double in the next year. Like, I think that the market overreacted, the strength is going to be revealed, the network effect is going to be processed by the digested by the market, and we're gonna wind up being an AI winner. And so maybe that's right, maybe that's wrong. Maybe not every shareholder, you know, feels that way, but it's certainly possible that there's plenty of shareholders that are like, yeah. I invested an $80,000,000,000 valuation.
Speaker 1:It's at 40 now. I think it's gonna come back. I don't wanna take this massive haircut right now just because the stock's down. And so actually getting that deal done, what would the premium need to be? What would the structure of that need to be?
Speaker 1:Would they would they go for a high debt buyout? Really quickly, let me tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Perplexity Computer.
Speaker 2:Computer. Computer. Computer. Launch Launch Launch Perplexity Computer Vibrio.
Speaker 1:What is Perplexity Computer? Let's pull up this video. Perplexity, the official account says, Perplexity Computer. Computer unifies every current AI capability into one system. It can research, design, code, deploy, and manage any project end to end.
Speaker 1:Okay. So it should be able to get a soundboard app in the App Store. Right? Manage any project, code, deploy, design, research. It should be able to do that from start to finish.
Speaker 1:One prompt, soundboard in the App Store using the TPP and sound effects, which are available online, which we have up there. This is a good benchmark. Let's give it a try. And you can give it a try at Perplexity. Go check it out.
Speaker 1:Anyway, Suttrini. People are still talking about Suttrini Vibe Laundering on Suttrini Research.
Speaker 2:Wait. Before we before we go on What? Very curry I'm just very curious to see how this does. Mhmm. It feels like the again, going from consumer LLMs to a net new product that is objectively just as competitive.
Speaker 1:Mhmm.
Speaker 2:And we'll see. We'll see.
Speaker 1:Okay.
Speaker 2:Anyways, a lot of this a lot of this stuff it's it's it's way too way too early, but seemingly shifting focus away from from the browser. Mhmm.
Speaker 1:Well, Annie is taking some shots at here, it looks like. Do you know Suttrini has a business entity fund that went from one investor to five in the weeks before publishing his speculative fiction on AI, damning the economy in June 2028, and that they're invested in long AI via humanoid type robots. I wrote about it. Interesting. People are really digging into the Suttrini thing.
Speaker 1:I think the Wall Street Journal had did have some good coverage. Is there anything else? If Trump mentions Trini at the stay State
Speaker 2:of the Union.
Speaker 1:Rachel, this is
Speaker 2:a wild post. A gorzillionaire.
Speaker 1:I'm gonna be a gorzillionaire. Is this AI written? Clearly not. I love I love the level of typos here. If Trump mentions the Trini at the State of the Union, I'm gonna be a gorzillionaire.
Speaker 1:And Trini is wrong. The market will be sky high in 2028. You can imagine Trump saying that. That'd be very funny. And Citadel Securities just republished it?
Speaker 1:Or did they just use the same term? Or are they referencing the twenty twenty eight global intelligence crisis? Because they published a macro strategy note called the twenty twenty six global intelligence crisis.
Speaker 2:So Yeah. They're taking it in a different direction, it looks like. They say, spite of current displacement narrative, job posting for software engineers are rising rapidly up up 11% year over year.
Speaker 3:Go.
Speaker 1:Jebus paradox, the software engineers become more productive. You want more of them. Every company needs a software engineer. Do most podcasts have a software engineer on staff? Probably not.
Speaker 1:They do now. Thanks to Tyler Cosby.
Speaker 2:And in some way, the the the cost of an entry level software engineer could fall dramatically to making more business just because suddenly someone can be very effective Yeah. Even if they haven't even done an internship yet. They're Yeah. Good at using the tools. Yeah.
Speaker 2:Yeah. Kathy Wood, we didn't cover this yet. She puts the Trini's AI thought piece Kathy put in quotes.
Speaker 1:Kathy Kathy Wood clapped back
Speaker 2:at Well, it's funny because Kathy is like the perma bull and Sattrini was was bear posting, obviously. Yes. And so she's obviously gonna be quite frustrated Yeah. With any sort of bearish narratives. Arc invest she says Arc invest is forecasting that AI will cause an explosion in entrepreneurial activity, a productivity boom, an acceleration in real GDP growth, and much lower than expected inflation.
Speaker 2:Short term dislocations frustration should give way to great opportunities if individuals harness powerful AI tools to solve problems and create new markets. Mhmm. This tracks with what the Collison brothers were saying yesterday. They're just saying like explosion of new company creation. They have the visibility into that through Atlas.
Speaker 2:They're doing I think it was a quarter of all new c corps in The US are going through Stripe Atlas, which is just absolutely insane. Yeah. Starting it starting an incorporation tool, which is theoretically a commodity. Right? Any lawyer can spin up an entity.
Speaker 2:You could do it with LegalZoom forever. There's a bunch of other platforms.
Speaker 1:Did you ever use Clerky?
Speaker 2:Clerky? I've used Clerky? Yeah.
Speaker 1:Yeah. That was almost like a YC incubation. Was Yeah. It was Yeah.
Speaker 2:And the problem the the reason that Atlas fits so well into Stripe is is it is the perfect wedge into payments because you created a company. Now you need to be able to accept money. Yeah. So it makes sense for them to own and operate. But it these these businesses are have not like, a stand alone, it's hard to you can't build a a venture business off of just incorporation.
Speaker 1:I wouldn't I wouldn't be surprised if you broke out the software R and D that went into Atlas and looked at the profits from Atlas, that that as a core business is actually not that great of a business. But the product is fantastic because they're able to pull an amazing design language off the shelf, an amazing front end to, know, UI kit off the shelf, all of the all of the distribution and servers and infrastructure off the shelf because they have that. And then they're able to invest a ton in actually developing the product. And if it monetizes mediocrely, it doesn't matter because they're gonna monetize along your fifty year journey running that or whatever. It really is a beautiful synergy with that product.
Speaker 1:I'm a big fan.
Speaker 2:Bestsellers on Substack for finance are all doomers. We gotta do TBD. Of course, Trini is not in This is
Speaker 1:so obvious. No, no. This is yeah. This is we need to treat zone this a little bit.
Speaker 2:He's a doomer.
Speaker 1:He's not a doomer. There's
Speaker 2:a lot bullish. Very AI bull.
Speaker 1:But definitely shot to the top of virality and top of the charts on the on the back of doom. And this is true. I live this on on YouTube. Like, you put a negative title up, and you just get 10 times more views. But they're lower quality and so you got to balance all that out.
Speaker 1:It's really hard to go viral with something like, everything's fine. Everything's everything's going well. Don't don't worry. Don't click this because you're scared. Click this because everything is kind of the same as it always has been, and you're going be fine.
Speaker 1:Say, Hey, this stuff's cool, but it's not really going to change that much. It's going be pretty incremental. Like, that is not getting clicks. You to be telling this whole tale. Need to be spinning a yarn.
Speaker 1:It's a bull market in yarn spinning, folks. Get ready. Get out the yarn and start spinning. Also, get out Cognition. They're the makers of Devon, the AI software engineer.
Speaker 1:Crush your backlog with your personal AI engineering team. So Morning. It's news from
Speaker 2:Get big gong.
Speaker 1:Get the gong. Okay. Hit me. Tell me.
Speaker 6:Why do I
Speaker 11:ring a bell?
Speaker 2:Steven over at WAP says we're excited to announce that Tether, the largest stablecoin company in the world, is making a strategic investment of 200,000,000 into WAP valuing as of $1,600,000,000. Our partnership with Tether marks a major step in building the world's largest Internet market. Tether is committed to enabling everyone in the world to participate in the new Internet economy. The way humans work and create value is changing fast. The world needs both an open Internet market, giving people a platform to conduct business, as well as a transparent payments network.
Speaker 2:Tether and WAP together will work to bring a sustainable income to billions of people throughout the world. There's enormous opportunity when you combine Tethr's global scale and wallet technology with WAP's community of next gen entrepreneurs. Yeah. Makes makes a ton of sense. Think WAP is is I'm sure has been historically challenged in terms of dealing with with charge backs.
Speaker 2:Right? Somebody joins and and buys a digital product, doesn't have a great experience
Speaker 1:Mhmm.
Speaker 2:Maybe they're going to their the card issuer and saying like, hey, like, I don't take Or it maybe they feel misled in some way. So stablecoins do just paying
Speaker 1:a lot of people all over the world. Yeah. Like, it's very clear that the WAP community is global. Fast,
Speaker 2:cheap, global.
Speaker 1:Exactly. And so, yeah, fast, cheap, global. The first time I ever used stablecoins was to pay an international consultant or contractor. And you can imagine this being really, really good news for them. So congrats to Steven over at WAP.
Speaker 1:OpenAI and x AI, there's news on the court decision. OpenAI newsroom says this baseless lawsuit was never anything more than another front in mister Musk's ongoing campaign of harassment. The order granting motion to dismiss with leave to amend. Now, is not the main case. This is a separate case.
Speaker 1:Correct?
Speaker 2:Yeah. This was a a trade secrets lawsuit that Separate. Musk went with after, I believe, somebody from XAI joined OpenAI.
Speaker 1:Got it.
Speaker 2:And then the judge apparently didn't find anything Okay. At all. Yeah. And again, it was just part part of like this kind of lawfare that has been, you know, happening for quite a while now.
Speaker 1:You printed out 500,000 pages of model weights, the printer ink stacking enough. No. Just kidding. Nobody did that.
Speaker 2:But Mike Isaac is saying what we're all thinking. Yeah. Ready for this to be over. BBH talking about the Warner Brothers Discovery Netflix.
Speaker 1:It's in the paper every single day. Every single day. Paramount increases Warner Bid. We get it. You guys want to acquire this company.
Speaker 1:Just make a decision. Make a call and and then call us when it's done. And then start start putting out some good content because I'm ready for the next Superman. I'm ready for the next Batman, the next Dark Knight, the next Joker film, something like that. Let me tell you about Labelbox.
Speaker 1:RL environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading teams, AI teams. And we have Max Meyer from Arena Mac in the restream waiting room. Let's bring him in to the new GetOfferedome. How are doing, Max?
Speaker 9:Hey, guys. How are you? I'm great.
Speaker 1:Where do you think Warner Brothers should land? Are you are you
Speaker 11:With Arena.
Speaker 1:Netflix? Oh, is there gonna be a dark horse bidder?
Speaker 9:Yeah. Tell us. I can't I I I I can't comment on any possible bids by the Intergalactic Media Corporation of America. I'd love to see it. But but but but, hey.
Speaker 9:You know, maybe may maybe maybe maybe maybe Paramount should should should look at other assets in the media space. You never you never you never know.
Speaker 1:Yeah. I I I could imagine a a DC Comics Arena magazine crossover episode, Batman, Superman. I believe James Bond is with Amazon now, but tell me about the latest edition of Arena magazine. He's a spy
Speaker 9:You know? Correct? Yeah. So from from the very beginning, we decided to we decided to give the issues three digits each
Speaker 1:Okay.
Speaker 9:Just to account for, you know, centuries worth of quarterly magazine space. So issue zero zero one, zero zero two.
Speaker 1:Mhmm.
Speaker 9:And so it happened that our seventh issue is issue zero zero seven. So, you know, I didn't I didn't I didn't I didn't think we could fill it all with espionage, so we sort of added, like, space as, like, a secondary theme. Mhmm. As it turns out
Speaker 2:Space espionage.
Speaker 9:Space espionage. Yeah. Probably. It's like arena magazine, space opera espionage, satellites, radars. So much of the intelligence collection these days is actually being done from orbit and not using sort of the the traditional human to human to human methods, and it turned out really well.
Speaker 1:What's your favorite spy story, real or fictional?
Speaker 9:Oh, gosh. Some of the some of the stuff that that the Israeli Mossad was doing in like the sixties and seventies is pretty crazy. I mean, Eichmann, who was a Nazi war criminal, was living in Argentina after World War two. His son went on a date with someone who was like, is this Adolf Eichmann? And turns him into the Mossad.
Speaker 9:They go to Argentina. They kidnap him, dress him up as a flight attendant, drug him, put him on a plane to Jerusalem, and then put him on trial. You know, some of some of some of some of that some of that stuff from the sixties and seventies is, like, the most daring Yeah. You know, intelligence operations. The Bin Laden raid
Speaker 1:I've always been fan of the Stuxnet story. I I always thought that was so so interesting in, like, the modern technology, world of, like, dropping I think they dropped USB sticks with a virus in the parking lot. Someone picked them up out of curiosity, plugged it in, and that jumped the air gap network because the the computers inside the facility were not connected to the Internet, so there was no way to hack them remotely. So you had to just get someone to accidentally plug in the wrong USB stick. Yeah.
Speaker 9:I mean, has Hezbollah was purchasing Mhmm. Explosive laden pagers just because they thought they were getting, like, a great discount Oh, yeah. From this from this from this Hungarian company. Yeah. So
Speaker 1:So, yeah, what what what's the intersection with Arena Mag's usual topics of conversation? Are there American defense tech companies that are highlighted? Like, what where else did you on this?
Speaker 9:So one of the stories and we're gonna put this out probably probably, like, ten days from now. Super cool company called Umbra down in Santa Barbara. They build they build synthetic aperture radars Oh. Which is actually part of what I did in in school for geophysics and whatnot. You know, basically, these are, like, incredibly sophisticated radars on satellites
Speaker 3:Mhmm.
Speaker 9:That can image the whole earth day and night, twenty four hours a day. They can see through clouds, and the resolutions are getting, like, smaller and smaller. And so we always have American startups, American companies in the magazine. We've got a good amount of, like, essay and historical content as well. And I think that espionage sort of secrets spying, is a topic that sort What sort
Speaker 2:kind of resolution are we talking about? Like, Umbra or a competitor be able to tell me, like, how many fingers I'm holding up on a given day? It could just help it.
Speaker 9:It's not that low. I think their record is 16 centimeters, just like this. The way that I described it is they they they released a few years ago a a photo of the old Dole pineapple plantation in in Hawaii. And at at 25 centimeter resolution, you can see individual pineapple plants. Mhmm.
Speaker 9:You probably certain smaller pineapples would be too small to see with that radar or whatnot. Yeah. So you're
Speaker 1:seeing cars, not license plates.
Speaker 9:Yeah. Yeah. Yeah. No. You wouldn't and and and and there wouldn't be anything about a license plate that, like, would reflect a radar or whatnot.
Speaker 9:Really, you're looking to resolve objects. Mhmm. Penguins. That's a good one. You can see you can you can very difficult to stay on an ice shelf and count penguins, but we're very interested in in working with
Speaker 2:penguin out there that's like, I know that I'm being smart. Tracked. I know I'm I being can't prove it, but I know. I could just
Speaker 1:No. Don't.
Speaker 9:Yes. The the Herzog penguin could be tracked by radar these days. But, you know, the resolutions have gotten have gotten so good over the course of the last decade Yeah. That there are all sorts of things that you can that you can do that you can do today. Most of them will probably never know about because because the people because the people doing it are the Central Intelligence Agency, National Geospatial Intelligence, and and and the army.
Speaker 9:But, yeah, you know, there's all sorts of crazy stuff. There's all sorts of crazy stuff in space these days, and whether it's radars, extremely complex cameras, listening devices, there's a lot of interest, and and so many of them are secret.
Speaker 1:Are you bullish on data centers in space?
Speaker 9:I don't have a strong I don't have a I don't have a strong opinion about it. I think it's possible that you you you have to put some stuff up there because of, like, politics Yeah. In a country like in a country in a country like in a country like The US. Mhmm. But if you think about it, there there's not, like, a big difference between trying to send them to space or or just sort of places where there aren't local politicians who can stop it.
Speaker 9:Yeah. We talked to what Space doesn't have, like, a city council. Yeah. Anywhere where there's, like, a city council is going to be a risk.
Speaker 1:Yeah. Yeah. We talked to a company called Panthalassa that is doing tidal energy harvesting. So it's like basically the size of a container ship or a cruise ship, but turned vertically in the ocean. Then as it goes around Antarctica and as the tides bob, it uses that to generate electricity, which then can be used for anything, but Bitcoin mining was the big topic du jour years ago, now it's AI inference.
Speaker 1:And there's a lot of other places where I think there might be stranded energy that might be easier to maintain, still very difficult, but available and probably less regulated.
Speaker 9:Yeah. The Dutch were very interested years ago in these, like, using the motion of the tides. Yeah. It's it's sort of all it's sort of always just an alternative to the thing that is cheap and always works, which is firing up new natural gas plants. Yeah.
Speaker 9:But when you have, like, political equations to solve local politicians Yep. Subsidies, then there are going to be all these crazy things. The benefit for a company like that may very well be that there's again, there's no one to come and protest you while you're while you're sailing around Antarctica. Yeah. Whereas, like, you try to build a a data center in New Jersey.
Speaker 9:In in New Jersey, and all hell breaks loose. You have to really, really go to the really go to the ends of the earth.
Speaker 1:We were debating this and sort of going back and forth on the New Jersey protests combined with Trump's comments at the State of the Union about companies being he didn't even say mandated. He, of course, sort of, like, to build their own power plants. And so I'm I'm interested to hear your take on how well do you think that will be received. Because a lot of the protesters might say, well, I didn't want a data center, but I definitely don't want a data center plus a natural gas plant. So this actually makes me worse off.
Speaker 1:But then there are some people that might say, hey. If you're gonna do solar and, you know, something wind, that actually offsets my concern, which was that energy prices would rise in my town.
Speaker 9:Yeah. Yeah. I mean, I don't remember whether it was Microsoft or Amazon, but one of the two has sort of proposed taking over 3 Mile Island, the old the old old old the old nuclear plant.
Speaker 1:Greenback?
Speaker 9:I I I don't think it's a coincidence that crazy activists will show up to protest both data centers and nuclear power plants. Mhmm. And so to them, there's sort of nothing worse than Both. Generating more energy, and then using it for some sort of grand industrial purpose. Understand the political economy between of people being worried about the data center demand influencing prices, but but but it's not actually true.
Speaker 9:And you just have to look at the map of California versus Virginia. Virginia is the data center capital of The United States, basically, and it has utility prices that are more or less in line with where you would wanna be. Californians have have have gone up massively over the over the past few years, and it it doesn't take long to investigate why. It's because they're shutting down nuclear. It's because they're making it difficult to do to do cheap energy.
Speaker 9:You know, lowering prices across the board, affordability Mhmm. You you really can achieve it by just letting markets work. Almost all of the so called affordability options are in fact going to increase prices. Yeah. Especially when, you know, politicians are the ones coming up with, this is how we're going to make energy more affordable by by by by by by forcing all of these new rules or whatnot.
Speaker 9:No. It's not going it's not going to work. When when you have, like, this massive industrial thing that's taking place, if it can create, like, a massive supply boost, then who's going to benefit from that glut? It's going to be all of the consumers Yeah. Who also want to use natural gas power or whatnot.
Speaker 9:And there's all this and there's all this increased supply.
Speaker 1:How are you thinking about Arena Mag and the balance between contributors, full time writers, researchers? Like, how are you designing the shape of the newsroom?
Speaker 9:Okay. So we so the so the latest one is the biggest issue ever. Mhmm. It's a 128 pages. We we used over 10,000 pounds of paper in printing it.
Speaker 9:You know, we we have great contributors. We want people to send us we want people to send us more. Okay. I I would say, you know, at the beginning, we had to go and sort of hunt down every single article that we wanted. Yeah.
Speaker 9:We're very lucky to get a lot more submissions these days. But the truth is is that, you know, we have a lot of readers who actually, like, read the articles in print and don't wanna get spammed, you know, 10 or 12 times a day with new articles.
Speaker 4:Sure.
Speaker 9:And so Arena is like a high end media business Mhmm. Where people pay us to leave them alone in a certain way Interesting. Where they love the quarterly magazine. Yep. They actually keep it.
Speaker 9:It looks great on a coffee table. Mhmm. People people keep it for their offices. And we're working on some other sort of high end printed products that have a mix of contributors, so to speak, and and other and other ways and other ways to put things together. I don't think it's going to be a, you know, a 100 person newsroom.
Speaker 1:Yeah. Leather bound Grokopedia. How about that? Yeah.
Speaker 9:I I I I thought I I I ran the numbers. Yeah. And, you know, depending on the type size, I think there's I think there's some way where you could publish the Bitcoin ledger Oh. As, like, a as, like, a law code or whatnot. Really cool.
Speaker 9:It would fill like an entire wall. Yeah. But, you know, actually, I'll I'll I'll I'll key something. We're going to be announcing the very first Arena Books coffee table book over the course of the next few weeks.
Speaker 6:There we go.
Speaker 9:I I just got the first box of them on a plane from Europe, you know, printed on Italian paper, bound bound to be that'd be very nice. I love It's going to be unlike anything that people have ever seen, I think. And hopefully, you know, look great on coffee table books in the world, starters.
Speaker 2:Or coffee table books. You'll be you'll be on the top of the Yeah.
Speaker 9:You could you could stack them. Yes. Yeah. So Well, congratulations.
Speaker 1:Stuart, do you have anything else?
Speaker 2:I did want, if you have sixty more seconds to get your take on how you think how you think AI impacts original reporting and storytelling. Because in my view, it's potentially great for an Arena mag because there's so many more contributors that'll think, hey, I have this thing that I wanna talk about. I don't really have an outlet or a platform myself or maybe I do but I wanna share it in print. And I can produce a great story in a much less time even if it's like have, you know, hopefully heavily heavily written by themselves. But and we and we've talked with other like plenty of other folks where I think that even in it feels like today, an AI, no matter how good the voice agent is, if an AI calls you and you don't know who the person is and they're just kind of trying to mine you for information, there's not gonna be a lot of information flow, which means that I think that great journalists and storytellers will have great great jobs long, long into the future.
Speaker 2:But how are you thinking about it?
Speaker 9:I long for the day when the AIs are actually a better writer than I am, but it hasn't happened yet. I'm honored to be scraped by the AIs so that my, like, voice will live on. You know, I'm a super user of all of these platforms for automating all of the stuff that makes the enterprise, like, difficult to do, which is sometimes, you know, dealing with with complicated workflows and research and whatnot. I think that there is something around certain sort of, like, newswire style things that could be automated super effectively
Speaker 4:Mhmm.
Speaker 9:Where if you have, like, a newsroom of people where there's, like, even, like, twenty minute delays or whatnot, that could be that that that that could that could that could be that be improved by, like, immediate algorithmic stuff. But but I think that as the, like, amount of high of low quality content on the Internet goes up, people are gonna look for things that they things that they trust. And it doesn't necessarily mean print. For us, print is like a very good, you know, place of trust, where the fact that we're actually taking several weeks in a giant factory with a bunch of paper to double triple check everything, it's like it's a it's a level of care that goes into it that reminds people that, like, things can be done by humans in this really dazzling way. And, of course, you know, there's tons of Claude co work and other stuff going on beneath the surface, but we wouldn't wanna let that touch the writing if people are gonna be paying for it.
Speaker 9:They should be able to get that stuff for free on the Internet and and pay for high quality stuff.
Speaker 2:Yeah. But at the same time at the same time, I feel like the value what you're saying, in some ways, the value of an editor goes up a lot because there's infinite content, and an editor is deciding, in this case with Arena, what actually makes it to print.
Speaker 9:Yeah. Yeah. Yeah. I mean, a bunch of us a bunch of us at Arena, we're we're all editors at the at the stamp at the Stanford Review. Yeah.
Speaker 9:And so it's like you learn how to editing is definitely is definitely a skill in itself. And being able to, like, point out why someone else's writing is bad, then you can point out how your own writing is bad, and that's how you actually get good. I I would say one of the theses around, like, wanting people to contribute to Arena and compiling these issues is that, like, while it's a great thing that anyone can just sort of post out there, there's a reason why, like, the legacy institutions that have super high professional standards are extremely effective. Like, people Bloomberg, Wall Street Journal, New York Times, even the ones that people dislike for ideological reasons, like, they have a seriousness to them that makes their messaging super effective, and a lot of that is because they're extremely effective editors. I will say, Arena probably invest slightly less in copy editing compared to some other institutions.
Speaker 9:I think it's a sign of life that we occasionally find typos in the print magazine, but we spend an inordinate amount of time actually editing to make it good. Yeah. When people pay you for something, you know yeah. There there there there's an old joke. Boris Johnson, the former prime minister of the of The United Kingdom, used to be a news editor, and he would apparently tell his staff when something was bad, know, the readers pay us.
Speaker 9:We don't pay them. And so when the readers are paying us, it's gotta be good. And and there's a lot of stuff that is, like, assisted by AI, or where the research has been helped with it. Transcript editing is, like, a super helpful one now. And, like, I can walk into, like, a a company with my iPad and record five hours of interviews.
Speaker 1:Mhmm.
Speaker 9:And both Claude and Grok are now very good at taking all of those
Speaker 1:Mhmm.
Speaker 9:And doing sort of very light style edits, or fixing the sort of verbal pauses or whatnot, which would which would previously take me, like, many, many hours to do. Yeah. So that's an example of, like, my job's, like, a lot easier, but people are paying us for, a high quality product.
Speaker 3:Mhmm.
Speaker 9:And so we wanna make it as as good as possible, both in the writing and especially in the in the art as well. We love our non reading customers. Mhmm. You know, there's there there there are a lot of people who love Arena who who who haven't read a single article.
Speaker 1:That's the confitator
Speaker 9:thing for I just can't
Speaker 2:read a speech.
Speaker 9:That's exact that's exactly that's
Speaker 2:exactly what Arena, you don't you don't you can just look at the pictures.
Speaker 9:Yeah. Yeah.
Speaker 1:Yeah. Well, you can find it at arenamag.com. You can subscribe to the print edition for $99 a year. It's an absolute steal.
Speaker 9:I really think it's I really think it's a steal. I was telling people the other day, you know, I I spent three months in an attic in the in the Texas summer going through different, like, paper samples, choosing the choosing the exact size. Yeah. I think I nailed it. It's Well,
Speaker 1:thank you so much for coming on the show and sharing this with us. We will talk to I you soon
Speaker 2:I love the vest. It's the vest. Fantastic.
Speaker 9:Every media man needs a look. Yes. I bought 12 sweater vests on eBay earlier this year. Okay.
Speaker 1:And and
Speaker 9:and it's working.
Speaker 1:It's working. Well, we'll talk to you soon. Have a good
Speaker 3:Good see
Speaker 1:you, of your day.
Speaker 10:See you,
Speaker 2:Goodbye. Great to see you, Max.
Speaker 1:Let me tell you about Cisco. Unlock critical infrastructure for the AI era. Unlock, unlock seamless real time experiences and new value with Cisco. We were talking briefly about Warner Brothers. The the Kalshi market is mooning on Paramount.
Speaker 1:The Paramount and Netflix have been going back and forth. Paramount's now at 61% chance that they will be the one to successfully take over Warner Brothers. Netflix previously up at 70% back in December when we started talking about this. Now they're down at 30%.
Speaker 2:The Allisons are doing the Allison thing.
Speaker 1:It ain't over till it's over. Let me tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And without further ado, we'll bring in Ben Lair of Lair Hip Out Ventures. He's the managing partner there, and he's returning to the show.
Speaker 1:We had you on a couple weeks ago, I feel like. Like, great
Speaker 2:Couple months.
Speaker 1:Back it's been months? No.
Speaker 2:Months. When was it? Like, end of last
Speaker 6:Say, like, six weeks.
Speaker 1:No. Six weeks.
Speaker 6:Six weeks. This is much more legit.
Speaker 1:It is here. Great to have you here in person.
Speaker 2:It's a real place. Yeah. Not
Speaker 1:AI. How long are you in town for?
Speaker 6:For the week. Nice. Although I was supposed be here three days ago,
Speaker 2:but it's it's up
Speaker 6:It's up front.
Speaker 1:Did you get snowed in?
Speaker 6:I got snowed in
Speaker 1:and Really? Had flights actually canceled.
Speaker 6:Six flights canceled? Five flights canceled? Not I was fortunately not at airport.
Speaker 1:Maybe I don't travel that much, but I actually think I've never been in that situation.
Speaker 2:That's the charter the charter gods the charter gods telling you
Speaker 1:It's time now.
Speaker 6:It's time. You like, thank you. Please. Okay. Gulfstream sales fly.
Speaker 1:Let's Gulfstream sales in over there. Seriously. Yeah.
Speaker 2:But yeah. Yeah. I was into somebody at coffee this morning Mhmm. And they told me it was upfront.
Speaker 3:It's upfront.
Speaker 6:Everyone on the plane was
Speaker 11:was upfront
Speaker 3:last night.
Speaker 6:Yeah. It's it's a big event.
Speaker 11:It's a big event.
Speaker 6:They do a great job. It really is a it's, you know, it's one of the few times when
Speaker 1:you can
Speaker 6:go out and see everyone who works not not quite everyone, but the majority of people that I would consider colleagues in one room for a day. It's it's actually really
Speaker 1:Is there is there cross pollination outside of technology with other industries? I know upfront in the past has brought Hollywood
Speaker 3:They bring Hollywood.
Speaker 1:LA folks, but there's other conferences where they're it's more like, Hill and Valley. Right? So they bring the politicians out. What what what
Speaker 6:A little bit of that. I mean, I think they do play the LA card pretty hard. Yeah. And and Upfront's brand as a fund is very sort of LA centric.
Speaker 3:Yeah. Yeah.
Speaker 6:The event they definitely, like, take advantage of the fact that there's that kind of talent
Speaker 4:out here. Yeah.
Speaker 6:I don't think a lot of speakers are flying in other than people from the venture world.
Speaker 1:Yeah.
Speaker 2:Yeah. But The the tension between Hollywood and the people funding AI, I can see that being interesting.
Speaker 6:Yeah. You know, we're we're actually in a company, that's building a sort of AI first, movie studio, called Staircase. And what they are doing is trying to use Hollywood talent. So they're using, like, SAG talent, real actors, real voices, but then enhancing it with AI. And they're getting some they're getting a little bit of pull out here in a good way.
Speaker 6:Yeah. Whereas I think if you're sort of if you're not willing to use Hollywood talent and pay Hollywood talent through the unions, you run directly into a wall. And and by the way, like, this is this is not gonna end well if Hollywood doesn't get with it.
Speaker 1:Yeah. I
Speaker 6:mean, at some point, it's just gonna get steamrolled. There are gonna be you know, look at, like, a '24 bringing in Scott Bell
Speaker 3:Yeah.
Speaker 2:I just looked at it as when I living in in LA for the last eight years or so, I've met so many directors and producers that are that that were kind of frustrated with the lifestyle of, okay. I have this job that I love doing. But then multiple times a year, I gotta fly to The Middle East and just be posted up in a foreign country away from my life. And Yep. And and there's some element of that that I think is kind of like core to the movie industry.
Speaker 2:It's like, you know, I think there's some probably will always be nostalgia around it. But we were talking, probably a couple weeks ago at this point. If you're an actor and and you get the and and you're and you lean into AI, you can potentially get a lot of the benefit while kind of compressing your actual like Yep. Time doing the work down by quite a quite a lot. Right?
Speaker 2:Because it's like, hey, come in I I don't know exactly what staircases workflow look like looks like. But I can imagine we get to the point where there's, like, certain scenes that are done, like, legit, you know, legit, the old fashioned way. And then there's certain scenes where it's like, yeah, we're just gonna use For
Speaker 6:Staircase, none are done the old fashioned way. Okay. So everything
Speaker 2:is Do they do, like, a capture process?
Speaker 6:They do a capture process, but never always against a green screen. So never against or not I don't know if know if it's against a green screen or just against against no no screen, but with Yeah. Like, tracking movements and whatever that would be. But they're not ever going and shooting out in the wild. Yeah.
Speaker 6:And the technology is changing so quickly that what they can create today relative to what they could do six months ago Yeah. Is magnitudinally different. And if you just continue on this curve Mhmm. At some point pretty soon, it's gonna be ridiculous to think that you're gonna go to the middle
Speaker 2:Matthew Matthew McConaughey has had some good leadership around this. So basically, just being like, hey, we have to embrace it. It's coming. It's just too efficient. It's too productive.
Speaker 2:The idea of like, hey, we need to shoot. We have like a a three minutes total that's in this setting. We're gonna bring a 100 people out there and spend weeks doing this thing that could be made, you know, in not one prompt, but made in a series of prompts and with a lot of editing.
Speaker 6:Well, and there's an insatiable appetite for just, like, more content. I mean, you guys were just talking about the, you know, the Netflix or Paramount setup. And, like, all these platforms just want more and more and more and better and better and better. It seems like there's no there's no limit to the amount of content that people want. And so
Speaker 2:Yeah. The the the average user, how many times have you opened a streaming platform and just been like, I don't like any of this stuff.
Speaker 6:Which is amazing because there's so much more content created today than ever before. And still, I I flew out here yesterday, I turned on my Netflix, and I'm watching a show from, like, eleven years ago.
Speaker 1:Yeah.
Speaker 6:Yeah. It's ridiculous.
Speaker 2:Jordy, watched
Speaker 1:movie last night. Right?
Speaker 2:John John was making a joke about the movie Borat, which I loved as
Speaker 6:a kid. Which is By the way, which you should still love.
Speaker 2:Yeah. It's a fantastic Yes.
Speaker 3:It is.
Speaker 2:But I but I went on Amazon and I bought it because I was like, I should own this. It's it's a cult classic at this point. And it was not as funny as I remembered it when I was 12, which was painful to me. But It's still real. I'm curious on on, you know, just talking generally maybe or or about Staircase.
Speaker 2:Right now, a a movie studio will allocate, let's say, $50,000,000 to make a movie. Yep. How do you think that number changes over time? Because in my head, I think eventually it could be five people. You know, you have like Yeah.
Speaker 2:Writers, you have like whatever the new, you know, director's role probably stays somewhat similar and then you're pulling another talent for audio and video and all these different things. But how how low and and the reason I don't think that's a bad thing is there's so much demand for content
Speaker 6:Yep.
Speaker 2:That theoretically that $50,000,000 budget would still exist or maybe even increase, but it would just spread across
Speaker 6:But this is like this is the question not for only Hollywood, but for everything, which is
Speaker 2:Yeah.
Speaker 6:Like, will, you know, will AI make things big or small? Yeah. Right.
Speaker 2:When you have when you have deflation, does that create
Speaker 6:Yeah. I mean, it applies to every industry. I think probably with Hollywood, you'll see frontline talent continue to demand huge premiums. So maybe that $50,000,000 But it's saying but Brad Pitt still makes 25 of it. Yeah.
Speaker 6:And the rest of it, you can do much less. I don't know if it's fewer people or or the same number of people being much more efficient and working in half the time. Like, maybe you're doing it more quickly, maybe you're doing multiple projects at I I don't really
Speaker 2:the question around the talent side that I'm interested in is, one it's thing for Brad Pitt to be like, cool. You're gonna make this movie with mostly AI Yep. But I'm still getting my same rate. Otherwise, I'm not gonna be a part of this because some other movie studio down the road is happy to pay me what I think I'm worth and I don't care if it's gonna take me way less time. The question is for new talent, the people in LA that are working as a as a waiter and just like, you know, constantly trying to get into the game.
Speaker 2:What kind of leverage do they still develop can they still develop real star power over their career and get pricing power? Or, or does that or or does like the the amount of people that can be a star fragment even more? Like, does there become more of like a because I don't know if how much of a a middle class even exists anymore in in Hollywood, like specifically on the on the actor side? Sure.
Speaker 6:Yeah. Well, I think
Speaker 1:I I have a few
Speaker 6:thoughts on this. One might be that probably there is more of an impetus for talent to be able to not only get famous through the channels that Hollywood provides, but to use social media, to use I
Speaker 2:think that's it was so important.
Speaker 6:Your own Yeah. Distribution to be able to demand sort of like that premium because people think that you can move the market, you can drive sales, or you can drive views
Speaker 2:Yeah.
Speaker 6:Through your own stardom.
Speaker 2:People still care. It doesn't matter what the movie's about or who the actor is. They care about who that person is outside in the real world too, and that influences their experience.
Speaker 6:I think that that's gonna be a big part of this for for that. But also, Hollywood is going to move more slowly than just about any other industry. Part of it is the role of the unions and how embedded that is and how, like, that kind of content gets made different than certainly most other industries that don't have that kind of bureaucracy or lock in. And also, you know, it's an industry that's run by moguls. It's run by old people who are, like, generally slower moving.
Speaker 6:It'll be interesting to
Speaker 2:see Tycoons.
Speaker 9:Tycoons. How
Speaker 1:do you think about vertical short form? I I I saw a crazy video of someone doing a movie screening, like, in a theater, but for vertical video that they made.
Speaker 6:That sounds terrible.
Speaker 1:Which is insane. And it was, like, it was really crazy because it was, like, they don't really make projector screens
Speaker 9:Right.
Speaker 1:That are super vertical. So you're in this, like, massive room. But normally, you're in a really wide theater, then the the screen matches the the the seats. Yep. But it was, like, just off to the side, this, like, vertical screen kinda like a TV we have
Speaker 2:over
Speaker 1:there. But but it does seem like there's a quicker pace of adoption for those, like, polished what what what was that Chinese app that has vertical short form
Speaker 6:Like the drama?
Speaker 1:Reduced. Yeah. The short
Speaker 2:Yeah. Real short or something.
Speaker 6:Real short. Real And
Speaker 3:then there's
Speaker 1:AI versions of that. And that feels like
Speaker 6:We get a pitch for that category once a week. You do? For the last year. Okay. I mean, it is Oh,
Speaker 2:I get it once a
Speaker 1:day. Okay.
Speaker 6:Cool. So you have better deal.
Speaker 2:I get
Speaker 7:it once a day.
Speaker 6:No. But it is it is wild how and by the way, the the number of pitches it's funny. You guys wanna talk about media with me. The number of pitches I still get from people like, Ben, you're like a media guy. I'm like, please leave me alone.
Speaker 1:Like, I'm not a media guy. Like, like, everyone
Speaker 2:just started
Speaker 6:like, I'm sorry. I did this. But but there is this moment where, this is also like live shopping was another category that you saw massive in China. Mhmm. And short form drama, enormous industry in China.
Speaker 6:Yeah. And everyone's like, cool. It's gonna like be here in The US tomorrow.
Speaker 1:Yeah.
Speaker 6:And like ten years later, it's still not really here.
Speaker 1:Yep. Yeah.
Speaker 6:I will say that in with one of the companies, I they like really forced me to watch some content and I got hooked on a story about like a woman who fell in love with a man in an elevator and I watched Okay. For like two hours in one minute snippets. Like I see the you can get addicted to it, but I fortunately broke that
Speaker 2:The question yeah. The question is how, how do you actually invest against this trend? I think I think
Speaker 6:I think I don't.
Speaker 9:Yeah. I think I
Speaker 2:think yeah. I think You may be because all the content Yeah. The content wants to be free. It wants to flow to the existing platforms. Yeah.
Speaker 2:I can see YouTube creating like short series like basically like Oh. You can subscribe to a series Yeah. Being like Basically like, hey, you're you're not even just subscribe. Because the follow button and Yeah. Subscribe button that barely works anymore on any platform.
Speaker 2:But they might be encouraged to be like, hey, this is a series of 30 videos. It's gonna be coming out one a day. You can subscribe and we'll make Yeah. Sure that it comes
Speaker 6:Look, I think this is an interesting space. The difference between an interesting space and a venture scale space
Speaker 5:Mhmm.
Speaker 6:Is the Grand Canyon. I mean, it is so massive. Figuring, you know, venture requires the power law, requires these outside outsized returns. Yeah. And it just doesn't feel like, sure, you have, you know, one or two companies in China that are massive.
Speaker 6:Mhmm. But it doesn't feel like that's a category that has a sort of theoretically limitless TAM. Mhmm. And one of the mistakes that I've made in my career and one of the sort of learnings is TAM really does matter. And, yes, there's, you know, you have to sort of lily pad your way there.
Speaker 6:It's not like every market has to be enormous day one. Mhmm. But most of media has turned out to not be venture scale, and I think maybe all of media is not venture scale. And with AI
Speaker 2:Yeah. Possible. Venture scale if you can build a platform that can compete with the giants. But you need you need a $5,000,000,000
Speaker 6:But how do you feel like what is it Yeah. Right. I mean, this is one of these things if someone by the way, like, Jeffrey Katzenberg tried to do this ish
Speaker 1:Yeah.
Speaker 6:With Quibi Yeah. And there are few people more formidable in the entire world than Jeffrey. Yeah. And even with hundreds of millions of dollars, like, that's not that wasn't the answer now.
Speaker 2:Yeah. He would
Speaker 6:By way, today would be a more interesting time to launch Quibi because of what's changed in technology. And by the way, I've seen the, like
Speaker 2:It's still the competitive dynamics with every other app that also has short form videos that the creators are incentivized to share the same content across all of them. Those competitive dynamics are still in place.
Speaker 6:Look. Just like working in an industry that face that, you know, Meta and Amazon and Apple and Netflix that, like, more than half of the Mag seven is interested in is a really,
Speaker 1:really tough
Speaker 6:place to go and build.
Speaker 1:Every Mag seven company except NVIDIA owns a, basically, a social network. If you include iMessage, Twitch, LinkedIn, like, you actually wind up with a media platform at all of them.
Speaker 6:Right. And, like, that is and by the way, this is not your traditional, you know, large incumbents who are asleep at the wheel. These are the scariest companies that have ever been built in the history of humanity who, you know, like, no thanks.
Speaker 1:How did you process the Suttrini virality, the viral article?
Speaker 2:Sold everything. Intelligence. I, like,
Speaker 6:bought a farm in the woods and No.
Speaker 1:Raw materials.
Speaker 6:Now look. We are we are at a moment right now. I mean, that's that's this week's flavor. Last week, I think there was a Something big just happened. Yes.
Speaker 6:And then there was the counter to it, and, obviously, there's a bunch of counterarguments to to this one. I think it's indicative of what a scary time this is and just how overwhelmed everybody I mean, like, I wake up in the middle of the night screaming. I don't know about you guys. It's just in fear. No.
Speaker 6:I'm kidding.
Speaker 9:I'm just
Speaker 4:asking for
Speaker 5:his no. But, like,
Speaker 6:this is wild times. I mean, this is It is crazy. I look at that article, and I think that there is you can you can sort of pull the thread and go, yeah. I like, oh my god. You are gonna see a bunch of these companies who have to cut costs, go lean in, become their own worst enemy.
Speaker 6:I think what this sort of doesn't take into account is that there's gonna be a bunch of other interesting amazing new companies that get built, that employ lots of people, that have a very different growth curve, and that it's not just like everything is a race to the bottom. There is going to be all this amazing innovation that happens counter to that.
Speaker 2:Also, a good a good counterpoint, Citadel put out a report that showed software engineer job openings are up 11% year over year. And so it's interesting that we're getting this, like, where AI is working the best today in coding is causing Yeah. An uplift in jobs, and yet people are kind of extrapolating and saying every other job is is cooked even though that's not what we're seeing Yeah. In the data.
Speaker 1:Yeah. It's interesting. What what are you revisiting marketplaces? There was a big debate over DoorDash being AI resistant or
Speaker 2:No. I haven't gotten any DoorDash pitches.
Speaker 6:I I I just wonder this week, but I have gotten some DoorDash pitches.
Speaker 1:And I'm just wondering how you're thinking about marketplaces because it feels like there was boom. Most of the great marketplaces got built, all obvious ones that didn't have massive disintermediation problems. Yep. So the dog walker, the house cleaner, that stuff that gets disintermediated very quickly. But the DoorDash or the Uber, that is something where you're not just gonna meet a great driver and be like, now you're my personal driver forever.
Speaker 1:Right? But you will do that if you're like, I went to this app and I found a house cleaner, and they come every week. And so I just said, hey, let's stop using the app and cut out the 15% take rate. But what are you what are you thinking about marketplaces on the earlier side? Are there is there anything interesting that you're seeing?
Speaker 6:So I I think that there is when you're looking at marketplaces, we're we're trying to find marketplaces where sort of everybody wins. Sure. And there's a company portfolio that's very early Mhmm. Building in the aftermarket automotive space.
Speaker 1:Oh.
Speaker 6:And this is a category that has, you know, millions and millions and millions of SKUs. Yeah. There is a question as to does this, you know, spark plug work for my 1984 Mazda Miata Yeah. Or does that one work? Sure.
Speaker 6:Most of that industry never came online at all. Yeah. And so you still have to, like, file, you know, like, fax in an order or a requisition.
Speaker 1:Yeah.
Speaker 6:You do have you have some large sort of endemic players like AutoZone that are actually quite big businesses, but that still only have a fraction of the inventory. Yep. They don't actually know if that if that piece works for this car when you've also done these three other changes. And that's the kind of industry, very messy, very hard, but with AI, you can go and send agents to go do some of this buying, so sort of mimic the idea that an industry is online that may never come online.
Speaker 3:Sure.
Speaker 6:I think that that's I think there are spaces that by the way, and that's also a very large, very sleepy TAM.
Speaker 1:Like,
Speaker 6:that is not a that's not a sort of side pocket hobby. That's one of the biggest hobbies in America. Yeah. That's right. Billion you know, tens and tens and tens of billions of dollars just in The US just in aftermarket products.
Speaker 1:Hydrate from, like, some random SKU or some random serial number into, like, what is this product actually? And there's probably a manual out there somewhere that has it. Might be on the Internet.
Speaker 6:Might be a ready form somewhere. Yeah. But, like and then there's the question of and by the way, how do I get this installed? And can I do it myself? Yeah.
Speaker 6:And, you know, is there an AI Yeah. Mechanic that's built into the marketplace so it can teach you to do the work while you buy? Yeah. You know, will this company accomplish it? I don't know.
Speaker 6:But I love the ambition. And I think when we're looking for marketplaces, we wanna see ones that are, you know I don't wanna see an incremental, you know, DoorDash competitor.
Speaker 1:Yeah.
Speaker 6:I wanna see one in an industry that really has that has not yet been disrupted for reasons that were frankly impossible
Speaker 1:Yeah.
Speaker 6:Before the automation of AI.
Speaker 1:Yeah. Jordan, you think about what I'm thinking? Me, you, this weekend, couple of cold ones, Mansory body kits on the cars. Let's do it. Secondhand, we get them.
Speaker 2:We figured This out is John's dream forever.
Speaker 1:Can do some LED underlighting. You guys. You got a new car. You don't have
Speaker 6:I'll stay for the weekend.
Speaker 1:You don't have LED lighting underneath that yet. NOS. That's true. You considered putting NOS
Speaker 2:in your car.
Speaker 1:This is a good option.
Speaker 3:The
Speaker 2:very good. We gotta get, that'll be your Christmas gift this year.
Speaker 1:Mansory body kit.
Speaker 2:Mansory body kit.
Speaker 1:I would
Speaker 2:love that. You want it. It's it's gotta happen. The labor marketplaces that, have exploded are the are the Mercos, the Micro Ones. Mhmm.
Speaker 2:Serve. Are positioned as marketplaces and yet feel more like enterprise product, like Mhmm. Almost like staffing Yep. In some way. The question is how how durable Yeah.
Speaker 2:People those businesses be. And and I think a lot of people were surprised that the the the Fivers and the Upworks didn't kind of react and capitalize on that as as quickly as they maybe could, but it just goes to show how quickly the the space is moving.
Speaker 6:Mhmm. Yeah. I think there are perspectives. There's, you know, multiple camps there, but there are there are camps of folks, you know, smart folks who think that that whole category is, like, a race to the bottom and, like, probably a zero. And then there's other you know, maybe some of those folks like summer corally passed or whatever and, you know, like, rooting against it.
Speaker 6:But but there's there's definitely a vibe that that is you maybe if you're on the inside in some of those businesses, like, now would be a good time to take some secondary. Sure. I think, obviously, but you've seen growth that is astounding. And, you know, that's the funny thing about the market right now. That that's category, but there's so many categories, like a bunch of these companies that are doing inference.
Speaker 6:Like, you've seen this, like, unbelievable growth and, like, there's there's, like, insatiable appetite for what they have today or, you know, you know, different kinds of training data or whatever. The question is, in two years, in three years, in five years, in ten years, like, of these are enduring spaces? Mhmm. And which of these are ripping right now because they're selling to five there's there's only five buyers or four buyers long term. And is that is that a good business?
Speaker 6:Yeah. Like, to be in a business where you ultimately have four companies that are your, like, theoretical scaled customers? Yeah. I mean
Speaker 2:And right now, there's such insane urgency that there's no
Speaker 6:Well, money is absolutely valueless to these company. I mean, it just it pours it, like, as fast as you open the door, it, like, bursts its way into your face.
Speaker 1:Yeah. I was joking about if you started a janitorial company that just served the AI labs, your revenue would be growing 10 x because their head count in in square footage is growing 10 x. And you'd be like, yeah. My business is 10 x. And you know what?
Speaker 1:I have pricing power too. My margins are incredible. It's like they never asked.
Speaker 6:Let's do that this weekend. That's a good bit. Yeah.
Speaker 1:They were like, hey. Janitorial business is wildly different.
Speaker 6:There is I I do think that right now is you know, and look, this is coming after a few years of really disappointing returns for venture as a category. Sure. And suddenly, you see things ripping and growing and, like, you wanna believe.
Speaker 1:Yeah.
Speaker 6:You want, like, people, you know, like, you and and by the way, you have massive, massive funds now that need to deploy huge amounts of money, and they're looking for things that look like the escape velocity
Speaker 1:Yeah.
Speaker 6:Is there. And so they become self fulfilling prophecies and more money pours in. And, like, you know, I don't think that all these categories are gonna be zeros, but I think probably there's gonna be there's a lot of winners in some of these categories. I think there'll be fewer winners and maybe the winners won't be winning at the multiples that they look like they were today.
Speaker 2:And then Or they'll or they'll or they'll evolve dramatically.
Speaker 6:Or yeah. And by the way, some of them will and some of them won't. Right? I mean, like, it's like, keeping up with this market is the hardest it's the hardest in my career to Yeah. Like, companies that are let's even look at, like, the OpenAI Anthropic thing, and granted this is just like, you know, maybe that's this is like the caricature of the space, but it feels like the tide turned so hard even the last three months where it's like Anthropix world now and OpenAI is living in it.
Speaker 6:And three months ago, you would have said the exact opposite. Yeah. And may maybe that's just like I'm interested if if you feel that energy
Speaker 2:Well, hard to it's it's yeah. It certainly feels like at this moment, Anthropic is the main character, right, dominating dominating the headlines on X and and a lot of of legacy media as well. But I would say Google Google trends tell, you know, a A slightly different story. Slightly different story. Right?
Speaker 2:We we are in a bubble. And people are so invested in the race that they want It's like if you watch an f one race and Verstappen wins every time and he starts in pole
Speaker 6:At some point, you're like, I'm sick of this.
Speaker 2:Yeah. You just wanna see you wanna see some action and you wanna see some passes and you want some Yeah. Some dramas. Yep. So I think people are are invested in the drama.
Speaker 2:But yeah. And and it's also you're you're watching the the two strategies play out, like a very multiproduct approach, consumer enterprise hardware, from from OpenAI versus, in a a very focused strategy. And I think it's way too early to to kind of understand what will, in hindsight, look like the best call. Totally. But
Speaker 6:it's Well, the way, Meta's gonna come out with their model Yeah. Whenever and then what does that look like? And yeah. Yeah. It's it's interesting times.
Speaker 1:Very interesting. Well, thank you so much for coming down to the TBP And Ultradome.
Speaker 2:Give us a report on on upfront.
Speaker 6:Okay. Happily.
Speaker 2:Is it tomorrow?
Speaker 6:It's today.
Speaker 2:It's today. Oh, you laughed.
Speaker 6:I
Speaker 1:abandoned my
Speaker 3:We'll
Speaker 2:we'll give the update on the show. I wanna understand. I have no sense for how much venture capital like what I think of LA is getting. I have a good sense for like Hawthorne, Segundo, Long Beach, Gardena, all these areas feels like are raising as much money as ever. But the broader LA, it feels like a drought.
Speaker 6:I would say it's a drought. We definitely are not spending time out here hunting companies Mhmm. Really at all.
Speaker 2:Yeah. Yeah. That's the advice I've given to any founder that's not in hard tech is like, do not don't even start Move away. Yeah. Don't even start your raise
Speaker 1:Think about it.
Speaker 2:It's gonna just send like a really negative signal that you're not super serious.
Speaker 1:Yeah. Well, thank you so much. Thank you. Is great.
Speaker 2:Great to see
Speaker 3:you.
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Speaker 1:Lambda is the superintelligence cloud, building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. Boom. We have some breaking news. We gotta hit the gong. Riley Walls shared an exclusive scoop.
Speaker 1:He says he has joined the wonderful labs team at OpenAI. I'm learning a lot and have enjoyed it very much. Congratulations.
Speaker 2:Huge pickup. Huge opportunity. I am so excited to see what what Riley is one of Yeah. The the greatest minds Yeah. High agency Yeah.
Speaker 2:Individuals on the Internet today.
Speaker 1:Yeah.
Speaker 2:And I'm so He's the best.
Speaker 3:Yeah. So so I I think Riley Wells is like a perfect example of like jobs kind of getting more fake. Like what is like like is like not this at all.
Speaker 2:I mean the guy who
Speaker 3:No. Exactly. I'm also like like very fake
Speaker 1:now. Okay.
Speaker 3:Like Riley Walton, like, just goes viral on Twitter. He's not even, making, like, YouTube videos. Yeah. Yeah.
Speaker 2:He's been he's been a he's been a data analyst for the last few years. He's had a he's
Speaker 4:had a
Speaker 3:He's not doing data analysis at OpenAI. He's not doing the same kind of work he was doing before.
Speaker 2:Yeah. He's perfectly demonstrating
Speaker 3:How do you describe brother Wilson? Technical
Speaker 1:staff. Next question.
Speaker 2:No. So so he is perfectly demonstrating the power of the tools, which is if you have ideas, you can build them really, really, really fast Yeah. And create super in his case, super entertaining products. But there's a Riley walls out there of SaaS and they're probably just hunkered down, not even really trying
Speaker 1:to And I mean, so so so I I agree with you. Very, very hilarious framing. I do think that we're moving into a world where more and more companies will have a Riley Walls internally. A you you know, someone who can move very quickly, do experiments, create value, and and create little projects and, like, the leverage that you get from an individual is going up. And this is an example of that.
Speaker 1:Congratulations to Riley Walls on his move to OpenAI. Let me tell you about Graphite code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And without further ado, we'll bring in the birthday boy. Doug O'Laughlin is in the restroom waiting room.
Speaker 1:Let's bring him in to the TVP at Ultradome. Beautiful shirt.
Speaker 2:Birthday to you. Happy birthday to you. Happy birthday to you, Douglas. Happy to you.
Speaker 1:How you doing?
Speaker 5:Hey. Happy to be here, I guess, on my birthday. Yes. Nothing better than Nvidia earnings, which hasn't come out. We are gonna be live reacting.
Speaker 1:Yes. We'll be live reacting.
Speaker 2:And they planned that, of course, years and years ago. Knew your birthday. Today would be the day.
Speaker 5:They went back in time and they told my mom to, to to to get it done today. Yeah. Just for me. Yeah. How you guys been?
Speaker 1:We've been good.
Speaker 2:Good. Wild.
Speaker 1:We've processing the something big is happening, then the Sattrini article. There's been a lot of sort of doom, but also there's glimmers of boom in there. There's it's a mixed narrative.
Speaker 2:Generally been a Citrini defender kind of Yeah. Saying you know, a lot of people were just like, this is bad and it should never have been published. I think your view was
Speaker 1:There's some good stuff in there.
Speaker 2:Some it's a good thought exercise. Yeah.
Speaker 5:Yeah. Well, here's the thing is, like, it went super viral for a reason because it obviously resonated. I don't think really crappy ideas resonate that hard. And and I think, honestly, a lot of the things that I'm most concerned about, I would actually align with it. My biggest concern is that we're gonna print deflation, and he kinda talks about that.
Speaker 5:Like Mhmm. Hey. One data center does all the knowledge work. Mhmm. The history of how this works usually isn't quite that extreme, but that was the point of it.
Speaker 5:Here's my extreme think case. What I was kinda shocked about, and I feel like honestly, I bet you, Shatrin, you would agree, Just like the level it resonated with. Yeah. It it was, like, covered on Bloomberg almost on a daily basis. Yeah.
Speaker 5:So if you're, like, a pro, whatever, that does a push notification. It was like, Sattrini says and Sattrini co author and all this I was like, oh my god. Yeah. It really broke through. That was yeah.
Speaker 5:It really broke through.
Speaker 1:Yeah. Un unpack the deflation question a little bit more. So technology has been deflationary for a long time. TVs are getting cheaper is the line. You can see that if you look back at inflation, you see health care and education inflating, while basically everything that's on like a technological Moore's Law style curve is getting cheaper over time.
Speaker 1:The bigger, like broader, broad deflation question is, can we move some of those or will some of those inflationary categories move into a deflationary territory? But what are you thinking? Is education, health care at the top of the stack? What do you mean by knowledge work becoming deflationary?
Speaker 5:So let's just put it this way. The the ghost GDP article. Right? Mhmm. Hey.
Speaker 5:Let's just kind of, like, do, like, an index, one index versus the other index. Okay. We're gonna label it at a $100 for all these, like, knowledge work widgets.
Speaker 3:Mhmm.
Speaker 5:And let's just see what the cost of that looks like over over time. Yeah. Year zero, $100 with a human. And maybe year two, it's a $102. Maybe they get a little bit smarter, so it goes down.
Speaker 5:But, like, okay. What if the agent gets 20 times better? Year's year two, the the index of knowledge work is gonna be $20. That's that's just deflation. Right?
Speaker 5:The entire world is effectively just like spitting out TVs that are worthless to three years.
Speaker 3:Mhmm.
Speaker 5:And that's kind of scary, and I think it's a big deal. I think the thing that is the most resonating with the whole piece is that, clearly, if if this is gonna be as big as many people think it will be, you know, Claude, Code Maxi here, then what happens is that you're going to quickly disrupt so much of society that the government and, like, companies and everyone needs to start caring very quickly. I don't think 10% in unemployment's gonna happen. The world works just slower than that. But I I clearly think that Yeah.
Speaker 5:It's part of
Speaker 2:part of your framing is, like, when we had technology rollouts throughout the last, you know, few hundred years, it involved like heavy machinery that had that took a lot of time to diffuse in part because the the machinery needed to be built and shipped around the world and spun up. And then you have with AI, it's like, the Internet is is the greatest distribution engine in history. And as technology advances, it can, like, be live in somebody's office or with somebody's company effectively instantly, which creates and and with, like, let's say, the printing press, it was, you know or cars or or electricity, it was, like, a much more it was forced to be a much longer rollout.
Speaker 5:Yeah. There's just like, for example, the railroad piece I wrote about, dude, it took fifty years to put all those rails. Right? Historically, let's say this AI thing would be like a historical Adams thing. It takes fifty years of installing the AI widget at your house in order for you to get AI versus now that you just press a button, you download it, and it's there.
Speaker 5:And so the pace of that disruption is just so so much quicker. And so if it looks like you know, if if it's as big of a deal as people are concerned about, then essentially, you're going to broadcast deflation everywhere, all the time, all at once. And it's gonna be almost costless to get there. And also, it's just it's gonna get relentlessly better. Yeah.
Speaker 5:Just and then imagine
Speaker 2:all the world be better. How do you that though with the fact that right now today, AI is the best at coding. That is where it has the most traction within knowledge, you know, knowledge work. And yet, I have I have not gotten a call from a great engineer saying, hey, can you help me land a job? I'm unemployed.
Speaker 2:And you see this in Citadel put out a response saying that that software engineer job listings have gone up year over year. And so it's so hard for me to square these two things where we could be this in this in this, you know, doomsday scenario for white collar work
Speaker 1:Where we're this paradox.
Speaker 2:Yeah. We're not seeing that at all Mhmm. With software engineers. Now, some people might debate me and say, well, oh, I just graduated. Yeah.
Speaker 2:I'm having trouble. Yeah. And, yeah, new grad opportunities might be lower. But nobody nobody has bought when when some of these larger tech company CEOs have laid off a bunch of people and said, we did this because of AI. It's like nobody nobody's actually buying that.
Speaker 2:It's just a a nice story.
Speaker 5:Yeah. I think that's gonna be an interesting thing because I think it will be politically and broadly unpopular to say, hey. I just laid off 10,000 people because AI. Yeah. Like, we are humans at the end of the day, and, you know, you do care about what your neighbors think of you.
Speaker 5:Just And being like, we fired everyone because AI is better than whatever, you're like, okay. Well, now you gotta get you might as well hire a five person security guard. Right? There there's a little bit of, like, being an asshole. So I think how it actually works and you're looking at and I agree with that comment because there's this really great tweet that's like, oh, it's crazy in the agentic coding world.
Speaker 5:Pretty much, it pegs the human CPU at a 100%. That's how I feel, at least Mhmm. Is I'm doing more work than ever, but I'm, like, literally working harder than I've ever worked. The reality is I feel like there is a productivity uplift, but I guess we're all in the sugar high where you're able to do so much work that you're just, like, going around, like, crushing it. So these software engineers, yeah, you don't need new grads.
Speaker 5:And, essentially, the person who has the seat gets to, print more. Let's just use the printing press, right, instead of writing. And you unemploy all the new writers, but you're sitting there just printing all day. And so it really is great for the install base of people who've been doing it, but very terrible for net new. And I think the net new is where you're gonna see this, meaning, like, new grads, new people entering the information the information services.
Speaker 5:That's where I think you're gonna see most of the carnage. People are not just gonna be firing people out the gate. It's going to be
Speaker 2:like Also, layoffs a layoff or or a firing typically occurs weeks, if not months, after an executive has decided, hey. This you know, we we need to make a change here just because, no, it's the thing that everyone hates doing. How have you been processing? It feels like the people that the Suttrini piece resonated with the most are also the ones that have been saying that AI is a bubble and there's too much investment going into this and it's all gonna be a zero. It just seems like two ideas that are difficult to You
Speaker 5:know, I feel like there's a certain aspect of hater aid where when you're a real hater aid, you're going to find whatever flavor supports your thesis. We find this at semi analysis, man. When we say something positive or we perceive as positive, people take it as negative or they really honestly
Speaker 2:we've had that too. Yeah. If there's a company that people don't like and you and you say something positive about it, it's it's like people respond like extremely
Speaker 1:Totally.
Speaker 2:Emotionally to that.
Speaker 5:Yeah. And so I think Suttrini made the perfect ammo at the perfect time. And and like honestly, if you look at the stock market I'm sorry. I keep watching for a video over and over. Good.
Speaker 5:If you look at the stock market, I think right now, it's been a really interesting year to date because, like, stocks are maybe, like, whatever, 2% off all time highs. Maybe they're all way back or they're pretty I forget what the, like, year to date looks like. But underneath the hood in software, it's been very, very, very painful. I think there's a lot of parts of the index that are in a lot of pain right now. And pretty much, you're just like seeing these crazy rotations underneath the surface.
Speaker 5:And so people are very like angsty. There's no other way to put it. If it it's thing big things are happening in the stock Yeah.
Speaker 2:The the the that like, oh, you're holding a you're holding a name and it hasn't nuked 15% yet. You should get out because some there's gonna be some there could be a blog post. Yeah. And and what what's the there's not a lot of ROI on on
Speaker 1:How have you been processing, like, the the the moats in software companies? Like, I like, I've I've always understood, like, the SaaS pocalypse, like, that narrative. Of course, you know, we gotta debate time lines, maybe these things are just shifting to be value stocks as opposed to growth stocks. But the stuff with network effects, the DoorDashes, the Paypals, the regulatory modes, like, it just feels like there's a lot of companies out there that are being more broadly punished. But is there something I'm missing there?
Speaker 1:Or or do you think that it's just excitement and people rotating into other stuff that they might be learning about like memory and energy and semis?
Speaker 5:I don't know. Mhmm. But I definitely think that aspect is definitely there. Like the ones that are like really shocking to me is insurance brokers. Oh, yeah.
Speaker 5:If you've ever if you ever follow that space, like, once upon a time as a hedge fund analyst, I followed Aon. It's, like, one of the most boring spaces of all time. Not bad. Services.
Speaker 6:Real estate services.
Speaker 5:No. Like, CBRE CBRE. Yeah. Essentially, insurance broker. You're having all these things, these network businesses that are just effectively being like, yeah, in fact, it's gonna be nuked.
Speaker 5:I think the hard part about that is it's complicated. I think there's a lot of advantage for number two to defect really quickly. That's probably the most valuable thing you can do. For example, we've written quite a bit about this to like our higher paid tier service stuff. Like Walmart defecting to agentic commerce makes a lot of sense.
Speaker 5:Right? Because they're not Amazon.
Speaker 1:Yep.
Speaker 5:Everyone that isn't number one should be defecting to win market share, and that makes a lot of sense to me.
Speaker 1:Yeah.
Speaker 5:So like, it it wouldn't be DoorDash. DoorDash would probably put up the, you know, put up the walls, do their best to like have exclusive products. Mhmm. And then someone else will vibe code something on the margin and essentially try to win market share by Mhmm.
Speaker 2:Less margin. The same time, Dara was on the show and his stance was, yeah, I don't really care as much about my ads business about making sure that I'm just everywhere.
Speaker 3:Mhmm.
Speaker 2:And so he was seemingly pro agent even though
Speaker 1:Yeah.
Speaker 2:Ads business is real.
Speaker 1:Have you been processing agentic commerce? Like, it feels like this should like, the tech is there.
Speaker 6:It should work.
Speaker 1:And but, like, consumer adoption takes time. You know? Yes. You can touch up a photo with AI. Not everyone does.
Speaker 1:Like, what would what does good look like? Because we're seeing stats from Shopify. It's, like, still in, point o 1% of checkouts are agentic, and I would expect that to 10 x or 100 x. But even then, you're talking about, like, 1% of ecommerce. Like, we're still talking, like, really small numbers.
Speaker 1:Like, how fast do you think it ramps, and what do you think happens this year?
Speaker 5:So I think the place to watch and it's probably the most interesting place is China because you can argue the the leading ecommerce adopter has always been China. They were doing DoorDash way before it got hot in The United States. They were doing e commerce way before it got hot in The United States. Live streams. Dude, TikTok and Douyin always always been on the bleeding edge.
Speaker 5:Like, I would argue for, like, global Internet online consumer preference behavior. China is the leading indicator. Like, America is a laggard boomer. You know? Like, we just don't we don't buy like we used to.
Speaker 5:Okay? The consumer is not quite as quite as young. We'll just put it that that way. I think what's interesting is we just had this giant incentive out of, like, I believe it's I wanna say it's Tencent. Tencent to this, like I I I'm now I'm probably gonna misspeak.
Speaker 5:The the the bubble tea promotion. Okay? They did, like, 10,000,000 or whatever bubble teas. And so I think there there's an example that we finally have the first wave of people possibly being able to adopt it, And that's gonna be, like, all eyes on that for if adoption actually kicks off there. Like, that's what happened in 2015 to kick off mobile payments, During the CCT CCTV Gala, they essentially gave away, like, payments, and they and they incentivized people to use the mobile wallets.
Speaker 5:And that was, like, the beginning. Okay? So I think that same analogy is probably where people need to look towards for what what could be the adoption curve for AgenTik Commerce.
Speaker 1:Is that earnings? Do we hear that earnings came through? No.
Speaker 5:I'm I'm just I'm just I'm
Speaker 1:I'm just locked in.
Speaker 5:I'm I'm locked in, bro.
Speaker 2:We'll have we'll have this out of facts.
Speaker 1:Well, yeah. What so so how do you imagine agent to commerce actually rolling out in China? Because there's a whole bunch of AI labs, DeepSeek, High Flyer, like they don't have a do they have a big consumer footprint already? Because it's they don't have a lineage there. So you might expect you know, agented commerce to be driven more by the platform that already has a billion daily active users over there.
Speaker 1:But how do you see, like, the the stack piling up over there?
Speaker 5:So I think the best example of this is Alibaba, which actually is an ecommerce company. They're like, you know, the Amazon edition.
Speaker 1:Yep.
Speaker 5:They have Quen.
Speaker 1:Yep.
Speaker 5:They have a delivery app. They have like an inventory app. They have a fully vertical fully vertically integrated stack, and they have AI on top, they're gonna make money if people just use their products. They can get transaction fees. And so that's how I kind of think about it.
Speaker 5:I mean, in a perfect world, if Amazon was not bad at models, they'll be crushing. Right? Yeah. You'd obviously be like Don't talk down on Rufus.
Speaker 1:Don't talk down
Speaker 2:on Just because it took down AWS once or twice or three times for hours doesn't mean they don't They're doing I
Speaker 5:I actually wanna talk about conspiracy theory because I feel like this is have you been noticing the instability of public clouds?
Speaker 1:Yes.
Speaker 5:Am I crazy?
Speaker 2:No. Am I crazy?
Speaker 1:I don't think you're crazy.
Speaker 5:No. It's either there's two there's only two things that could be. Yeah.
Speaker 10:Vibe coding.
Speaker 5:Yeah. People are just pushing crap on prod, and they have no idea. Yep. Probably true. Number two, CPU shortage.
Speaker 5:Yeah. I think it's a CPU shortage.
Speaker 2:I really The the you you don't think there's, like, a third if we're wearing the tinfoil hat, which is the world's been very unstable and there'd be There's
Speaker 1:more cyber attacks and stuff. I mean Iran.
Speaker 5:Maybe that's actually That's a good one. Yeah. But I'm really surprised to see all three at the same time. And then like my favorite, probably the most public version of this is the GitHub instability. Yeah.
Speaker 5:Dude, GitHub is so unstable right now.
Speaker 1:Interesting. Yeah. The I saw the uptime numbers. It was, like, below 99%, which is really low considering
Speaker 5:No, dude. It's, like, 90% in
Speaker 1:90%. That's really low. But, I mean, people are pushing a lot of code to GitHub. So, yeah, walk
Speaker 2:me through off.
Speaker 1:Walk me through the CPU shortage because is that just CPUs that are being used to scale new, like, e c two instances and, like, normal, like, you need a Linux instance and so you need a CPU to provision? Or is or is the AI boom sucking CPUs in, a Grace Hopper demand? Like, they're the the CPUs are getting dedicated to AI server clusters. Like, where are the soup what what's the shape of the shortage, basically?
Speaker 5:I think the shape of the shortage is partially an RL because if you want to do an RL gym, meaning, like, you wanna have an amazon.com for
Speaker 1:your Yep.
Speaker 5:You have to you have to literally simulate
Speaker 1:Yep.
Speaker 5:Just a lot. That's one real demand driver. Mhmm. I don't know how I don't know how to quantify that. Mhmm.
Speaker 5:But clearly, they're out of it. Number two, I think I do think all the code have you seen the charts? Like, I think it's fc.com with, like, all the new apps coming online.
Speaker 1:Mhmm.
Speaker 5:They they require infrastructure to run. And I had a third one. Oh, the other thing that's interesting is it's also a little bit of a of, like, a lapping supply chain thing. So the last time we bought a lot of CPUs was in 2020 and 2021. Historically, you depreciate the the CPUs on a five year cycle.
Speaker 3:Mhmm.
Speaker 5:And so after five years, you just, like, literally throw them away. Mhmm. It's five years. So all of the infrastructure that we purchased and we've been trying our absolute best not to purchase any new CPUs and spend all that money on GPUs. So they haven't been investing this entire time.
Speaker 5:And now this slight demand curve comes up, and that's enough to essentially sell out all the CPUs. I think that that's probably part of it as well. It's gonna probably be this multi problem thing, but it's like one of the more interesting, like, conspiracy theories. Like, YouTube went down. I I don't I don't remember a time in, like, the last five years YouTube has.
Speaker 5:Yeah.
Speaker 11:So
Speaker 1:Yeah. Yeah. Yeah. That is crazy. Take us through the effects of the CPU shortage in the TSMC context because TSMC seems to be, like, a crazy battleground.
Speaker 1:Apple, Nvidia, and then you'll talk to a new semiconductor company. Like, we had Mad X on the show yesterday, and he's like, yeah. I'm just getting line time at TSMC. And then you read Ben Thompson, and it's like, well, they're not really investing in CapEx. And it feels like, is is TSMC a bottleneck with this cheap We got shortage as well?
Speaker 1:We got Nvidia earnings. What happened?
Speaker 2:They got a revenue beat.
Speaker 1:Okay. We will jump back to TSMC, but they beat revenue. Let's review and read through
Speaker 2:67,400,000,000.0 against an estimate of 66,200,000,000.0.
Speaker 1:We have some breaking news. Nvidia has announced earnings.
Speaker 11:You guys are faster than me.
Speaker 12:I'm Bloomberg.
Speaker 1:Nothing liver than live. Here. We will all read the earnings, and I will tell everyone about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest securely connecting bank accounts to move money, fight fraud, and improve lending now with AI.
Speaker 2:And back. Do you got anything yet, Doug?
Speaker 5:Am I crazy? I don't have anything.
Speaker 2:Maybe Great news? Tyler just sent this to us. Did did they
Speaker 1:Tyler just
Speaker 3:trying refresh in Twitter.
Speaker 2:It's possible somebody is just putting up It's just engagement farming
Speaker 1:Maybe.
Speaker 2:And trying to
Speaker 1:They might have gotten us. They might have had us in the first half. Well, we shall see.
Speaker 5:Anyway,
Speaker 1:let's go back to TSMC. The nature of the TSMC bottleneck with regard to CPUs, is that an important factor or is there more fab capacity across GlobalFoundries, Intel, Samsung to sort of meet that CPU shortage?
Speaker 5:So GlobalFoundries is nothing.
Speaker 1:Nothing?
Speaker 5:They don't have a leading edge chip. So they will not have any CPUs there. Intel is actually the real winner, I think, because essentially, like TSMC is locked up. Everyone's fighting for space at TSMC. Like, NVIDIA has the most.
Speaker 5:All the CoAOS is accounted for. All the Band three is accounted for. All the Band two is accounted for. Essentially, they're completely sold out. They're gonna invest a lot more, but, like, you know, get in line.
Speaker 5:It's another year. So whatever is left over kind of goes to the other foundries, and that's really two companies. That's Intel, and that's Samsung. Mhmm. I think Samsung right now probably makes way more money if they spend it all on memory.
Speaker 5:Mhmm. So Intel really is the swing provider of CPUs in the world, and that's, like, kind of amazing. Like, I'm kind of my my belief in a a sweet karmic Intel victory is all the CPUs that can't be made at TSMC because the accelerators are being made instead
Speaker 1:Yep.
Speaker 5:Go back to Intel. Yep. And they just make them, but they don't design
Speaker 1:Yep. Make them but don't design them. So they would be a second source for NVIDIA potentially as well?
Speaker 5:Well, like, hey, it's not just NVIDIA.
Speaker 10:It's not I think I
Speaker 5:think NVIDIA is gonna get their Yeah. I think NVIDIA is gonna get their
Speaker 1:To Intel. Yeah. Oh. Oh. TSM C.
Speaker 1:Okay. So they don't need to.
Speaker 5:TSM C.
Speaker 1:Okay. Because there was a theory about, like, hey. Maybe twist NVIDIA's arm, get them to dual source at at Intel, and that gets the flywheel going a little bit more, just as, a give.
Speaker 5:I I guess, but I I and there's been some conversation about the m v l m v l link with with Intel specifically co packaged.
Speaker 3:Mhmm.
Speaker 5:But I I think it's gonna mostly be Verra. Like, I think it's not gonna be I I think TSMC is gonna give them the capacity. Mhmm. I think there's a whole world of chips that are not that. Like, think about Graviton Mhmm.
Speaker 5:Or the Axion project at Google or all the ARM
Speaker 1:CPUs Google project. I haven't heard of that.
Speaker 5:They there's a custom CPU.
Speaker 1:Okay.
Speaker 5:Yeah. So, like, all of
Speaker 1:these CPUs YouTube chip. They have, like, a number of custom CPUs. Right?
Speaker 5:Yeah. V c yeah. VCU, I think. It's a CU encoder, whatever unit. But that's, like, really doesn't I don't think that adds up.
Speaker 1:How important is the is the Grok, Cerebras, these faster model on a chip companies? And does Google have an answer for that?
Speaker 5:I okay. So to be clear, semi semi analysis is house view. Wasn't that it was, like, the most important thing, and we've always we, you know, we we have that chart about batch. Right? The fact that, hey.
Speaker 5:Doing more for everyone is much more valuable. Clearly, there seems to be a
Speaker 7:little bit of
Speaker 5:a niche market and a niche market demand. And so Cerberus and LPUs definitely have some kind of demand pull. And I think we will see some kind of announcement at GTC. But, like, you know, definitely wait and see. Oh, that's kind of my impression.
Speaker 5:That's kind of what we wrote about today in our by the way, I I think it's crazy. I wasn't aware that the Vera Rubin post would come out until today. Like, literally, I learned today and I was, oh. So I had to read it live with everyone else. I think that's that's a big deal too, we have a lot of information there about what's coming at GTC.
Speaker 1:So Well, we'll we're excited to follow it. NVIDIA earnings are usually out by twenty minutes after the hour, four twenty, but it appears that they are delayed. So we will Yeah. We will see. I mean, of course, we'll we'll have to have you back on the show to deep dive everything that's happening in
Speaker 3:the semiconductor industry.
Speaker 5:This is this thing is so much better. I have like the bogey and all the information and what the setup is gonna be. And honestly, if we have two minutes, I'll tell you what to expect.
Speaker 1:Okay. Yeah. Please.
Speaker 2:Hit us.
Speaker 5:I think everyone thinks the guide will be 75,000,000,000. That's what everyone's really obsessed about. Mhmm. I think the questions that are gonna be answered or asked rather is about memory price inflation. Mhmm.
Speaker 5:That's gonna be a big deal given the fact that I think memory prices are like, know, mooning right now, HVM and DRAM. I think NVIDIA locked it all in. So everyone is gonna be like, how sure are you your gross margin isn't gonna go down? Yeah.
Speaker 2:And they're
Speaker 5:gonna be like, we're really sure. But they're gonna be like, okay. How sure and what time? And then there'll be like this random, like, circle that, nope, we can't answer. And then I think one of the questions that people are gonna definitely ask is about the power side.
Speaker 5:It seems like next year, NVIDIA has more chips than power. And so that's gonna be I mean, to be clear, NVIDIA has no power. Right? They have customers who acquire power. And, you know, one of their big competitors in terms of market share, which is Google, has chips and power.
Speaker 5:Mhmm. And so I think that that's gonna be a huge bottleneck, and I think that's gonna be one of the bigger questions that happens this quarter. Mhmm. Hey, how do you deal with the power bottleneck? Because you're gonna sell a lot of chips, but if you can't even plug them in, this is a huge issue.
Speaker 2:And is the idea is is the idea that even if a lab or a hyperscaler said, we're actually good on chips right now, we don't have the power for for them, NVIDIA would be like, well, you actually have to buy them if you wanna maintain priority. How do you think they would play that?
Speaker 5:I I don't know. I mean, I think the thing is it's not gonna matter because the only company with a chip to sell you next year that is not accounted for is NVIDIA. Mhmm. And I think the the shortage in GPUs is really underappreciated. There's, like you know, you could see it publicly.
Speaker 5:I forget which research shop shows it, like, availability of b two hundreds. But our anecdotal information as well as the, like, the live price tracking and contract price that we're aware of, there's, like, no h one hundreds for sale.
Speaker 1:Yeah.
Speaker 5:Like, the h one hundreds are sold out. That's like, boom. Your, you know, your five year depreciation, like, bear thesis that everyone was really freaking out about last year. Well, good luck. You can't even buy one today.
Speaker 5:So that's probably the biggest interesting thing and I think probably the single most bullish thing you can say.
Speaker 2:Love it.
Speaker 5:You know, like a four year old chip effectively is completely sold out today.
Speaker 1:Yeah.
Speaker 5:What what's that what does that say about the next generation?
Speaker 1:That's remarkable. Well, thank you so much for taking the time to join. Bummer that they delayed on us, but next time we'll time up so that we have even more time to hang out. But
Speaker 5:I'm I'm I'm so happy, honestly. Like, back into Nvidia earnings, I was
Speaker 1:like Yeah. No. No. We'll we'll we'll we'll get this flow going. We we this is always fun.
Speaker 1:But, I mean, just great to talk about everything. And happy birthday. And we'll talk to soon.
Speaker 2:Happy birthday.
Speaker 1:Have a great rest of your week.
Speaker 2:Great to see you.
Speaker 1:We'll talk to you soon. Let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and medium sized businesses. We have our next guest, Mark Benioff, in the restream waiting room. Let's bring him into TV panels. Mark, thank you so much for being first to join us here on earnings day.
Speaker 2:We're honored.
Speaker 1:Great to you.
Speaker 4:How's it going?
Speaker 1:It's going fantastically over
Speaker 4:Did you get that Metallica album I sent you?
Speaker 1:We did. We did.
Speaker 2:Thank you
Speaker 3:so much.
Speaker 4:Did Jordy listen to it? Did Jordy listen?
Speaker 2:We need a we need a record.
Speaker 1:We need a record.
Speaker 4:No. Jordan, again. But Jordy.
Speaker 2:Mugged again. Mugged again. Frame mugged.
Speaker 4:Jordy. Yes. Again. Again, Jordy. I have no words.
Speaker 4:But but I have no words, Jordy.
Speaker 1:Jordy can't actually play the guitar. And so next time you're on, he's gonna be playing a cover. I'll play
Speaker 2:you I'll play you a tune. Yes. How about that? You gotta I know you gotta
Speaker 4:see it. To come on the show with us.
Speaker 1:Oh, that'd be fantastic.
Speaker 4:I think it would be really good.
Speaker 1:We'll have to we'll have make that happen. What?
Speaker 4:But I'm gonna call out. I'm calling out Jordy on the whole situation. The reality is Awesome. Yeah. Majority are still unforgiven.
Speaker 4:Well,
Speaker 1:anyway, thank you so much for joining us first on earnings day. Take us through it because I got a mallet here that's itching to hit a gong.
Speaker 4:Well, if you want to hit a gong, mean, enterprise software company has ever given guidance for $46,200,000,000 before.
Speaker 1:Let's go.
Speaker 4:And these are crazy numbers.
Speaker 2:Alright. And it I love
Speaker 4:that Gong, by the way. I love that Gong.
Speaker 1:We love Gongs.
Speaker 4:I really do. But I would say that Yeah. That's exciting. Yes. But also just this company, you know, it's really become a cash machine as well with you know, we're projecting over $16,000,000,000 in cash flow this year.
Speaker 4:So when you think about that, and then the quarter, you know, with the quarter we deliver this record RPO. Funny thing, you know, some of my friends are writing these articles. RPO doesn't matter. I mean, they have just write a song, nothing matters. Don't know.
Speaker 4:Nothing else matters. Yes. But RPO, which is, you know, kind of our remaining performance obligation, these are contracts that we basically have signed but not yet recognized. Yeah. That is $72,400,000,000.
Speaker 4:So these are driving these huge numbers.
Speaker 2:That's What does that mean? What does that think people have a good sense.
Speaker 4:That's that's up 14% year over year. It's that all these numbers are accelerating growth. So I don't know. I just kind of I am very proud of my team. I'm very proud of our customers.
Speaker 4:I say also I'm very proud of the customers because we've really been pushing the customers hard this year to deploy all this new amazing AI and agent technology. And we've hit basically now more than 19,000,000,000,000 tokens. So you can just see the velocity of AI and agents. And the company is just transforming from being not just an apps company, and I think you guys are using Slack and other Salesforce apps to run your business. Yeah.
Speaker 4:But now they're all extended with these agents like Slack, not just Slack bot Yeah. But the ability to extend your service and your marketing and your sales. And all the agents are out there and they're running wild as well. So you have apps and agents, humans and agents working together. It's very cool moment.
Speaker 4:Very cool.
Speaker 2:Jordy? Yeah. What what has it been like internally with the team this year? It's been has there been a more kind of chaotic period in your career? How like, how are you guys operating internally?
Speaker 1:Mhmm.
Speaker 2:Clearly delivering results? Oh, yeah. What's it take?
Speaker 4:I mean, well, you know, you know, we all been reading about the saspocalypse. Yeah. And but we've got our Sasquatch is eating our saspocalypse.
Speaker 1:Let's go. And Sasquatch.
Speaker 4:I just think that when you look at things like, AgentForce, which we've talked about on the show now three times, starting at Dreamforce, that and they first of all, AgentForce by itself is now an $800,000,000 business, up a 170% year over year. Wow. So that is amazing. All is its own product. Mhmm.
Speaker 4:But then you look at agent force and our data business together. Mhmm. That is now a $2,900,000,000 business up 200% year over year. So there's no question that AI and data is a huge driver of growth. And it's about these apps and these agents.
Speaker 4:And we use the apps. We're these humans. We're using the apps. We're using Slack. We're using Sales Cloud, Service Cloud.
Speaker 4:We're using all of our cool apps. And then each one of those now has an agent platform also. And these two things together is the future of enterprise software that apps have been extended by agents. And while we before were in apps market, and that's what we've been doing for twenty six years, you know, that we've been in business since 1999. Now we're in the apps business and the agent business.
Speaker 4:And I this is why I've never been more excited about my business. I just love it. Yeah. I mean, I really love it.
Speaker 1:How much how much similarity is there to the original messaging just around, like, being a company that enables cloud adoption? Like, there were probably a lot of companies and and CEOs that came to you early in your career that said, like, I know this cloud thing is important. How do I do it? And you had an answer. And now there are CEOs that say, I know this agentic thing and this AI thing is important.
Speaker 1:How do I do it? And you probably have a pretty similar answer. Right? Is this is this history repeating itself?
Speaker 4:Oh my god. It's such a good question. You know, Neil Bushry is now the CEO again of Workday. Yeah. He's my good friend.
Speaker 4:Yeah. He lives, basically next door to me. He came over last night. We both had a cocktail because we're looking at his after hours stock. And I said, Aneel, there's no way this can be true.
Speaker 4:You have to let this go. And in fact, you saw already that his stock corrected today because the numbers are just don't match what's really going on. He has an unbelievable business. He had a great quarter. He's going to have a great year.
Speaker 4:We use his HR and financials. And I said, Neil, this is just something that you have to let go of. This is not my first sapocalypse. You know, we I saw this in 2008. I saw this in 2001, 02/2016, you know.
Speaker 4:And look, this is there's people in the market. They make money when the market goes up and down. So that's just the stock market. But let's talk about the customer success. Yeah.
Speaker 4:And when you look at how companies can actually be better, more productive, successful, profitable companies and we are, you know, we're we're number one. We're customer zero. And that's what I'm so excited about because when you look at how we're running customer service and support right now, we're using it with service agents and service apps.
Speaker 3:Mhmm.
Speaker 4:So if you go to help.salesforce.com, you're using the agent and at any point, bam, bam, bam, you can auto escalate right back to the app and the humans if you like exhaust the agent. Mhmm. Or now this week, we have an agent that is going to qualify 50,000 leads for our company, which is our sales agent. That it's out there talking to our customers. We even closed millions of dollars of business this week just through the agents themselves.
Speaker 4:So that is what is amazing that we have apps and agents. And it's not that we don't have 15,000 salespeople at Salesforce. We do. Mhmm. And we have millions of apps all out there scurrying around, looking for opportunities, and then bringing them to those humans going, hey, look at this opportunity.
Speaker 4:Give this person a call. Let's go see this person. Let's go find out what to do. And that is really the
Speaker 11:Yeah.
Speaker 2:How much how much
Speaker 4:We're extended, elevated. We're elevated by AI. We're made better.
Speaker 2:We know we're made better by AI. Yeah. There's no How question have kind you of you know, all the the Suttrini's post, we've talked about it at length on the show. Very, very a lot of a lot of doom. But we've been very focused on what's happening in in coding.
Speaker 2:As these coding models have gotten better, people want to hire at least the data shows so far, so that it always showing up up. Job listings for engineers are up 11% year over year. You've talked before about hiring more sales reps because as your reps get more productive, you probably want more of them. But is that a kind of comp that you're looking at given that I think everyone is expecting sales agents to kind of get to kind of catch up to coding agents in terms of capabilities?
Speaker 4:Great question. Amazing. And we were I wasn't really on the show at the beginning of the year, a year ago with you guys. But if I was, what I would have said was, I'm not hiring more engineers in fiscal year twenty twenty six, the year it just passed. Because I was using coding agents and I was allowing the productivity from the coding agent to give me the extra capacity that I needed for the year.
Speaker 4:Yeah. And I didn't hire more service agents in the year. I held it flat and then reduced it slightly because I'm using service agents. But I did hire like almost 20% more salespeople this year. I think we've talked about that because I need more capacity because we have more demand than ever through every market from the small, medium, large customers.
Speaker 4:You know, guys like yourself who are like these great entrepreneurs, building a great business like TBPN, really going all the way through it. You need a technical infrastructure around you to grow your business. I know you use Slack. I know you use other products. And that's our job is to make you successful and to really bring in the apps and the agents.
Speaker 4:You can't do it just with an agent.
Speaker 1:Yeah.
Speaker 4:You need that you need we we there's still some humans around who need to be automated as well. Yeah. And that is what is exciting. Yeah. That is what I'm doing every single What
Speaker 2:advice do you have for a company like Anthropic that's hiring a a Salesforce admin? What makes for a great Salesforce admin? You're
Speaker 4:you're kinda leading beyond I mean, you know, it's kinda funny. Right? Because these AI companies, they love our products and they can't buy enough of them. They're some of our largest customers now, Anthropic, OpenAI, Google, Amazon, you name it. These tech companies, Slack is the largest AI ecosystem in the world.
Speaker 4:You know that. Yeah. And that's reality, you know, which is that no one has a company that's running entirely on a large language model because it's not real. That's not we need software and we need large language models. Mhmm.
Speaker 4:We need the determinism and the programmability and the security and the sharing. And but this large language model is an amazing new component of our infrastructure so we can do things that we could never done before. That is what is so awesome. And so we can extend our industry. I think the software industry is gonna be bigger and broader and do more this year than ever before, not just Salesforce, which is gonna grow incredibly this year.
Speaker 3:Year.
Speaker 4:I think every company is gonna grow because we have more to sell, and there's more excitement and action and energy. And so this kind of counter narrative of, oh, no. No. No. They don't understand.
Speaker 4:We're just call that company who wrote that report. Mhmm. And you ask them, what is their software infrastructure, their magic infrastructure? I do this all the time. Tell me exactly how you're doing what you're saying that you're doing.
Speaker 4:Oh, well, you're right. We're so sorry. We made a mistake. No. You you know, and look, the futurist, I think we talked about this.
Speaker 4:Peter Schwartz, you know, our chief futurist. He wrote Minority Report. Have you seen that movie? It's like twenty years old. Great.
Speaker 1:I haven't seen it, but I've seen it.
Speaker 4:Oh, yeah. Well, Jordy, you gotta watch this. And also he wrote WarGames and Deep Impact. You know, part of a team, writing team. These are future movies.
Speaker 1:Yeah.
Speaker 4:But we all know where the future is kind of going, this highly automated amazing world. But we're living in this world. Yeah. And this is this is this year. This is 2026.
Speaker 4:Yeah. You know? We're running our business today. So how are we doing our financials, our HR, our customer information? Are you know, how are we doing all of these aspects of our business?
Speaker 4:How are we writing them? And then we write a we write a report that sounds like minority report. Mhmm. And then I'm like, yeah, minority report. I read the I watched the movie.
Speaker 4:Great guys. Fantastic. But I'm in the present moment reality right now.
Speaker 1:Yeah.
Speaker 4:You know?
Speaker 1:Yeah. Yeah. It's true.
Speaker 4:And come let's come back to world. And Yeah. By the way, like, you can do things that you couldn't do before. This quarter, I released our new ITSM product.
Speaker 1:Mhmm.
Speaker 4:So our customers can do this incredible thing, you know, IT service management. They used to have to go to ServiceNow for that. Now we converted five ServiceNow customers, you know, just in the quarter right over to Salesforce because we have that new capability. So companies like Sunrun and Cornerstone and CoolSys and others, you know, they can now use Salesforce ITSM instead of ServiceNow. That's so exciting.
Speaker 4:And then we have our new life sciences cloud that we've built all with an agentic interface. So our customers do not have to use Veeva. And those customers are instead you know, those are big companies like the Pfizer's and the Takeda's and the Novartis and the Yeah. ABBYY. So they're running with this next generation platform of apps and agents, apps and agents, and humans and agents working together.
Speaker 1:Yeah. So, I mean, the the business model currently is clearly working. The results show that. As you look into the future, do you think the business model will evolve? Do you think that we're going towards more consumption based?
Speaker 1:Is there is seat base going to be with us forever? Like how are you thinking obviously, you don't need to turn the cruise ship today, but how do you think this evolves over time?
Speaker 4:It's such a great question. Right? Because that's like one of these interesting narratives. But, hey, I don't know which which Anthropic product you're using, but the one I'm using is seat based. Mhmm.
Speaker 4:So if you don't have if you have a different one or I have a I don't know which OpenAI product you're using, but mine is seat based.
Speaker 1:Yeah. I have a seat.
Speaker 4:I don't know which one you're using.
Speaker 2:A good it's a good take. Of course, you can use it.
Speaker 4:No. It's true. Right? There's an API also. Yes.
Speaker 4:There's an API also.
Speaker 2:Yeah. But they're happy to be selling seats right now. You're right.
Speaker 1:Yeah.
Speaker 4:No. We I this is about humans and agents. So let's use that analogy.
Speaker 1:Sure.
Speaker 4:Humans are seats. And so there's still like us three we're like the last three humans. It's very sad, but we're still here. And then
Speaker 1:Hanging up.
Speaker 4:We have the Asians too, and they're using the APIs and talking to each other, and they're on notebook, and they're, like, having a conversation, creating their own currency.
Speaker 2:They're talking about us.
Speaker 4:They're talking smack. They're saying, can you believe those humans are still there? We're gonna get them.
Speaker 1:Yeah.
Speaker 4:And it's like, no. We're it's still humans and agents working together. And that is what is exciting about the future of enterprise software. So, yes, I have a Salesforce, but it's extended with sales agents. And I have a service organization that's extended with service agents.
Speaker 4:Yep. And I'm sending a trillion marketing messages this year, but they're all extended with marketing agents. And I have commerce agents. And I've got yeah. And you guys use Slack every day.
Speaker 4:Right? And you're using Slackbot now hopefully?
Speaker 2:Yes. Of You
Speaker 4:know, since the last time?
Speaker 1:Of course.
Speaker 4:I would say it's like amazing that I can use agents in Slack. So I have employee agents. Yeah. And we might have some other new exciting agents coming in the next few weeks for you. I'm very excited.
Speaker 4:Yeah. Yeah. I'm very inspired by Multbaud. I've now got our team working on some new things. So that is like how I see it unfolding.
Speaker 4:And I think it's about a world where there are apps and agents and where this large language model, it's extending our capability. It makes us better. It makes us stronger. Yeah. It gives us the ability to do more.
Speaker 4:Yeah. And, yes, it still exists and also consumption exists. Like, we have, you know, lots of consumption products, data, you know, data products and
Speaker 1:Was there ever products. Was there ever a SaaSpocalypse that was driven by fear that open source software would defeat your products, defeat Salesforce?
Speaker 4:Oh, no. There was a bigger SaaSpocalypse than that.
Speaker 1:Okay.
Speaker 4:Do you remember the SaaS pocalypse of twenty twenty? The SaaS pocalypse of twenty twenty. John, let me tell you the story. We were all minding our own business, and then CNN came on and said we were all gonna die. Yeah.
Speaker 4:Not just the software companies, everyone Everyone. Because it was the pandemic. Yes. And we all went home and we hid, and it was a very sad time. Yes.
Speaker 4:And in fact, right at that moment, the stock market crashed because we were all gonna die, And that was a huge SaaS apocalypse. And you can see it in everyone's stock chart. It goes like this
Speaker 1:and Yep.
Speaker 4:And then all of a sudden, people go, I guess we're not dying. And then it came back up. Yep. And that was a SaaS apocalypse of 2020. It's a sad tale, but we lived through it.
Speaker 4:And we got through it. And you know what? We're stronger for it. Yeah. And that was just one of the sasspocalypses.
Speaker 1:Yeah. Talk about the reception of the Super Bowl ad.
Speaker 4:Well, listen. I don't wanna be competitive with you guys cause your ad was very good. I want you just to know. You did a great job. You should feel great.
Speaker 1:I appreciate that.
Speaker 4:You know, you had a great job great ad. Yeah. Everybody loved it.
Speaker 1:Very high ROI.
Speaker 4:We were the number one ad in the Super Bowl,
Speaker 1:which is Oh, Mog meter going up. Let's go. Ad mogged.
Speaker 2:Get mogged.
Speaker 4:I I'm sorry.
Speaker 3:It was
Speaker 4:good. It has to be said because, you know, we have Jimmy Donaldson, mister Beast.
Speaker 1:Yeah. He's the
Speaker 4:best. And mister Beast did a great job, and that was just a killer ad. And we still haven't revealed the final thing. We have a great person here, John Zismos, who did a fantastic job with Jimmy and it was an unbelievable partnership. But Jimmy's just he's a force of nature.
Speaker 1:Yeah.
Speaker 4:I mean, I've never seen anything like this. He's such a young, great, amazing entrepreneurs. The first time I ever talked to him, which was years ago, he said to me, want to be the future Steve Jobs. I want to be the future great entrepreneur of the world. I had to pause and say, really?
Speaker 4:So like, yeah, that's what really I want in my life. I want to be a great business leader, a great and I think he's doing it. Mhmm. And he's so young. You know, we've already had him on the cover of Time Magazine once, you know, and I see, you know, him as a huge leader in the whole world, not just as some kind of YouTube personality.
Speaker 4:This is a great entrepreneur business person, not just making chocolate bars, not just running a bank. I see him doing a lot of amazing things, and he's got a lot of energy Yeah. Incredible, and I have a lot of respect for him. And, yes, number one Super Bowl ad. How about that?
Speaker 1:There's a lot of entrepreneurs listening, a lot of entrepreneurs that are searching for their next great business idea. If they wanna go swimming with dolphins and get inspired, what's the most underrated time to visit Hawaii?
Speaker 4:You're right. Well, number one, this week, we have been having an awesome show from Kilauea Volcano.
Speaker 2:Oh,
Speaker 4:yeah? We had, I think, twelve, thirteen, 1,400 foot tower, which is I'm in Salesforce Tower San Francisco right now. Yeah. Gorgeous. You guys should come.
Speaker 4:Yeah. And the the fountain from the volcano was taller than this tower this week. So that is amazing. Mhmm. And you're right.
Speaker 4:All the little dolphins were so happy. Just cruising around. But also, it's whale season on
Speaker 1:the North
Speaker 4:Coast. So they were
Speaker 1:going they
Speaker 4:were so happy also. Everyone gets happy. When you see the volcano, it's like the it's like the way it's like when you see a whale. Like when you met. It remind you you it reminds you who you really are.
Speaker 4:Yeah. It reminds you this is what life is really all about. Yeah. You come back to your breath. You come back
Speaker 2:to yourself. When I see whales out, I think of agents. I think of agent force, personally. Hey. I Burn whale.
Speaker 1:You gotta run. Gotta run. Sorry. We're
Speaker 2:getting I have a challenge for you. Be before we talk again, you gotta frame Mogg, one of the AI lab leaders.
Speaker 1:Oh, this is this is big alpha right here.
Speaker 2:We'll talk with you.
Speaker 1:I think it's I think it's possible. I think We'll coordinate. We'll coordinate. Have a great rest of your day. Congratulations on all the progress.
Speaker 1:Thank you so much for coming back on the show.
Speaker 4:Better listen to Metallica because I swear to you, I'll bring Lars on here if you're not ready.
Speaker 1:We're gonna get it.
Speaker 4:You're just lucky I didn't bring him on to Dave.
Speaker 1:On repeat. On repeat. We'll talk to you soon.
Speaker 2:Great to
Speaker 1:see you. Have a good one. Cheers. Goodbye. Well, if you're tracking earnings, you should be doing it on public.com, investing for those to take it seriously, stocks, options, bonds, crypto, treasuries, and more with great customer service.
Speaker 1:And without further ado, we will kick off the Lambda lightning round. Let that let that cloud ring out. Started. Every day. The lambda.
Speaker 2:What's happening?
Speaker 1:How are you doing?
Speaker 10:Hey, guys. How's it going?
Speaker 1:We are here Doing great. Welcome to the show.
Speaker 2:Tough act to follow with with Benny. Don't know how up to eleven every time.
Speaker 1:Do any animal sounds? He's got the he's got the dolphin down. He's got the whale down. This is a unique ability. Didn't know it's necessary.
Speaker 1:We're not gonna have you make
Speaker 2:any any any whale sounds. But it's great to meet you.
Speaker 1:Great to meet you. First time on the show. Please introduce yourself and the company.
Speaker 10:Great to great to be here. So my name is Michael Aminapat. I'm the cofounder of a company called Rowspace. Yeah. And Rowspace is an AI platform for asset managers.
Speaker 10:We help our customers use their institutional memory. So that means all their proprietary data, their accumulated judgment to make decisions faster. Okay. So what that looks like is we actually plug in to all of their internal systems. Okay.
Speaker 10:This is not just documents
Speaker 6:Yeah. But it's
Speaker 10:databases, CRMs, accounting, and trade information. And we use agents to understand all the connections in that data, the inconsistencies, the conflicts, so agents can reason over holistically. Mhmm. The idea here is that data is fragmented and is siloed, and it's hard to make sense of in a single context window. Yeah.
Speaker 10:But using this or or having you just work on this in advance is is very helpful.
Speaker 1:Yeah. How jealous should every asset manager be of Bridgewater for collecting so much data over so many years? Do you have a view on the Bridgewater strategy? Can you explain what they actually do and whether or not you're a fan of it?
Speaker 10:I I can't speak to to Bridgewater specifically, but I think you land on our key point here, which is that public data is getting increasingly commoditized. Yeah. And, actually, AI is accelerating the commoditization of public data. The more you have tools like Claw that can synthesize anything from the web or from public tools, less edge there is there. So the best edge firms have now is decades of data accumulation and their own insight and judgment as encoded in their data.
Speaker 10:And our whole goal is to help our customers tap that.
Speaker 9:Mhmm.
Speaker 10:In almost every customer conversation we have, there's a line that's something like, we are sitting on enormous value in our data if only we could get it or only we could find it. And and that's what we're trying to do. So I think AI will accelerate this dependence on your internal data and proprietary data as public data becomes less and less, you know, valuable.
Speaker 1:Yeah. Talk to me about what, what your product actually looks like once you roll it out. I because, you know, a lot of hedge funds and asset managers, they do a lot of backtesting. And I could imagine going back and running a report, like, backtest the thesis that we talked about, but maybe we didn't actually implement. There's a whole bunch of ways that you could just do reporting.
Speaker 1:But then you could also go and say, hey. You know, just turn this thing loose. Go trade for us. Like, where are we on that continuum?
Speaker 10:Oh, there there are a lot of great points there. So the first thing is we are not trading or taking action automatically. Mhmm. The idea here is that we will help these firms consider the full amount of data that's possible and then they make the decision. Mhmm.
Speaker 10:But our goal really is it used to not be possible to say review every single name in the universe if you are about to consider a trade to rebalance your credit portfolio. Now you can with with the Roastbase. Mhmm. But it's still the human who makes the ultimate call vary. So that's one thing.
Speaker 10:The second thing is on on back testing. I love that example because it's actually been surprising how little post hoc analysis people do of their investment or trading decisions.
Speaker 3:Yeah.
Speaker 10:Just what's our thesis a year ago, two years ago, ten years ago? What actually happened? How does that inform what we're doing in the future? That's just a time consuming thing to do, and people don't do it very much. But we work with a private equity firm now.
Speaker 10:It's been in business for fifty years, a pioneer over the field. And they actually they can actually run every deal through real space
Speaker 1:Okay.
Speaker 10:Along the lines of, given our fifty years of history, what should we do here? What have we done? What are the risks? And that kind of analysis would not have
Speaker 6:been possible before.
Speaker 2:Yeah. What, what is your competitive positioning like with the labs? They're all hiring consulting firms. They have forward deployed engineers. I'm sure they're pitching a lot of the same companies.
Speaker 2:And I can imagine how you would position Rowspace against, building something internal or just leveraging, leveraging the the the applications that the labs are building. But but how do you sell it?
Speaker 5:So on the apps that
Speaker 10:are out there now from labs and from other players in the market, what we see is a focus on time savings. So faster models, faster decks, faster summarization of meetings and research, and that's obviously extremely valuable. But our focus has been on decision making. So what are the things you should be looking at which were impo would have been impossible to consider before that was this can help you with? So, in some sense, there are things that our customers do with Roastbase today, which they did not do before.
Speaker 10:It's not about saving them time doing what they have done in the past. So that's one, one chunk of it. The other chunk is we are talking about, in some sense, the crown jewels for our customers. All of this trading data, position data, they're thinking of theses. This is extremely sensitive.
Speaker 10:So we only deploy in our customer's environment. We never, as a company, actually take possession of their data, and we do all of this processing in their environment. So we have a security challenge, an infra challenge, an AI one. And I think the sensitivity to the security compliance and other constraints of finance is a big differentiator for us.
Speaker 1:Mhmm. Take us through the fundraising round. What happened?
Speaker 10:So we've done two rounds over the past eighteen months, 50,000,000 in total. I I spoke to you both lines, and Burdens Capital joined in the a. And we've had, my former bosses were on your show on Monday, and they were a big player in both the seed NBA, at at Stripe. So, it's been really fun because, every major investor on our cap table, I've been close to for at least half a decade. So Rosebase gets to be a bit of this, bring back the old gang together.
Speaker 2:That's amazing. Well, congratulations. Where is the company based?
Speaker 10:Oh, we are based in San Francisco, but a big push for the funding this year is to expand our New York presence.
Speaker 1:Of course. Yeah. That makes a ton of sense. Well, have a great rest of your day. Thanks so much for popping by to tell us about the business.
Speaker 1:Very fascinating. Good luck.
Speaker 5:Thanks for having me.
Speaker 1:We'll talk to you soon. Cheers. Goodbye. Let me tell you about Gemini 3.1 Pro. Gemini 3.1 Pro is here with a more capable baseline.
Speaker 1:It's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, or bringing creative projects to life. And without further ado, we'll bring in our next guest, Adam Warmoth from Chariot Defense. How are doing, Adam? Yes. What's to see you again.
Speaker 1:Welcome back to the show. Let's kick it off with the news. What happened?
Speaker 7:Yeah. Today, we announced our $34,000,000 series a. Yep. Let's get the gong. Big gong.
Speaker 2:K. You got a bigger gong since the last time you were on.
Speaker 1:We did. Welcome back. It's impressive. Welcome back. So Not as
Speaker 2:impressive as as a $34,000,000 series today, but it's it's up there.
Speaker 1:Yeah. Take us take us through the shape of the business today, the key customers, key products, and and sort of what changed since the last time you were
Speaker 7:on the show. Yeah. Awesome. So so last time I was on the show, I was just getting done with our first transformation and contact exercise. You guys had had Mhmm.
Speaker 7:Dan Driscoll, Randy George in the show. Yeah. They've kinda talked about that. We were just coming back from our first participation there. Mhmm.
Speaker 7:That was our second test event. We've done about 25 since then. Mhmm. And so we've got systems deployed in pretty much every theater across a bunch of different army units, Marine Corps units, and really just starting to see the traction and demand for the systems grow. As we do see things like drone dominance happening, as we see see things like next generation command and control, all of those systems are fielding and running into issues with that power infrastructure layer.
Speaker 7:Yeah. And we've been able to fill that gap, and and iterate quickly kind of working with the warfighters, working with the soldiers, and and getting the systems out there.
Speaker 2:Yeah. And assume assume that, you know, someone listening today didn't catch your first Yeah. Appearance, catch us up to speed on on the the shape of the product and and all that.
Speaker 7:Yeah. So so effectively, what Chariot's building is the power layer for robotic warfare. So really, you know, you wouldn't send a soldier into the fight without food and water and nicotine. You wouldn't you wouldn't send a robot into the fight without communications, compute, and power. Cool.
Speaker 7:And so we really see that as one of those core infrastructure layers behind kind of this defense modernization. Mhmm. You know, Androil's building some great systems in the compute space. Palantir really dominating the network space, and we're kinda building that third missing layer. And so effectively, we're doing is taking the technology coming out of companies like Tesla, Apple, Lucid, Rivian, Archer, Joby, high voltage batteries, silicon carbide power electronics.
Speaker 7:If you've read Packing McCormick's, the electric slide goes into detail on kind of major transformations happening in the commercial industry on that core technology stack. Yeah. We're taking those and lifting and shifting them into the defense platforms to build hybrid high power systems.
Speaker 1:Yeah. Walk us through exactly what needs to happen to deploy a high voltage battery on the battlefield. I think most people will be familiar with, like, the Tesla Powerwall. And Sure. We've all seen, like, the IBM tough book.
Speaker 1:You put some rubber corners on it and give it a nice graphite, you know, case. And, I imagine there's a lot, a lot more going on. So what's the state of the art?
Speaker 7:Yeah. That's a great question. So we really kinda take the best of commercial technology. Mhmm. Our first product we deployed, M4 24, is literally in a Pelican case.
Speaker 1:Okay.
Speaker 7:Yeah. So we took a Pelican case. We were saying, hey. Why reinvent the wheel Yeah. On on just some of that core rugged Yeah.
Speaker 7:Technology. We do some additive manufacturing to create these kind of internal bulkhead structures Sure. To kind of isolate the the electronics. Yeah. And then we integrate the batteries, the power electronics, the microcontrollers into that in a form factor that can be left out in the rain and mud.
Speaker 7:Can be dropped off the back of the Humvee. Yeah. And when I say can be, has been and has has looked to tell the tale.
Speaker 1:Yeah. So you've been through testing. I assume you've done some SBIRs. Are you moving towards program of record, or are you just sort of in the supply chain for other companies that might be primary contractor?
Speaker 7:Yeah. So we we've got a split go to market model. One meaning directly to the government, both bottom up selling directly to units and top down for her record. Okay. And then also selling to other companies as part of a broader kit.
Speaker 1:Cool.
Speaker 7:So the inspiration for Teriot was I was the counter UAS program manager at Andoril.
Speaker 1:Yeah.
Speaker 7:We were constantly running into power problems. Yeah. Right? So it kinda that idea of selling this as part of a power kit
Speaker 1:Yeah.
Speaker 7:That's enabling other systems is is another part of our go to market model.
Speaker 1:Very cool.
Speaker 2:Where do you where do you stand on the verticalization debate? We had we had Mike from also Capital Oh, he took the hornet's nest because he was basically saying like, yeah, it's great to verticalize, but there there's there's there's some Yeah. Businesses that you can just buy a lot of components off the shelf and make a great product, prove that people want it, and then do it later. A lot of people I would say most people were were disagreeing with that. But there's business is different.
Speaker 2:Yeah.
Speaker 7:I am I'm gonna I'm gonna come in here on team Mike. Okay. So, you know, we've really been able to leverage the supply chains from companies like Tesla, right, and and and Apple and Archer, where you have actually mature commercial technologies around these core components around batteries and power electronics. What nobody has done is kinda gone and done that forward deployed engineering. Mhmm.
Speaker 7:And so Erin Price Wright, who led around, I think in her post said, you know, we should actually call out him the chief forward deployed engineer. That's really what I've been doing over the past year. Yeah. And it's a forward deployed engineering model that kinda maps to what Palantir and Andrew did as well. Yeah.
Speaker 7:So Palantir didn't invent, you know, the cloud compute. Right? Our big data models. Right? Right.
Speaker 7:That was hunt tens of billions of dollars of investment from Silicon Valley companies. And then through good go to market, good forward deployed engineering brought that into the department. K. Andro did the same. The the Sentry Tower first Sentry Tower was, you know, really enabled by the autonomy technology developed by the self driving car industry.
Speaker 7:Mhmm. Know, You computer vision went from an unsolved problem in 2014 to just download YOLO v four in 2017, and they were able to kinda capitalize on massive investment, right, in from the self driving car industry and just through good for deployed engineering, good go to market, bring that into the the department. And that's what we're doing for all the technology coming out of electric vehicle, electrical transportation space.
Speaker 1:What are you most excited about in defense tech? There's obviously a lot of the Andoril products people are aware of. There's, you know, this big, small drone boom. Is there something like, what's the next big defense tech trend that you think is gonna become really important?
Speaker 7:Yeah. So so there's gonna be a little bit of a a self self serving angle here, but, you know, what we're really
Speaker 3:you
Speaker 7:know, I spent years doing counter UAS Mhmm. Counter drone systems pre Ukraine. Right? So counter US is a big topic. When we were working with it on with SOCOM in 2021, not that many people were talking about it.
Speaker 7:And and that insight around what it actually takes to do counter US at the edge is is is really kind of what inspired Chariots. So there's a lot of focus on drone dominance, but countering these small drones is gonna require pushing more sensors and more countermeasures onto every mobile platform. Mhmm. And what that's gonna mean is every mobile platform needs more power Sure. To to power those sensors, to be able to turn the engine off and manage signature and hide.
Speaker 7:Sure. So so avoid detection in the
Speaker 11:first place.
Speaker 7:Mhmm. And then be able to drive big surges of power to do things like electric electronic warfare Yeah. Or high powered microwaves or or high energy lasers. So we've done tests with high energy lasers already
Speaker 3:Mhmm.
Speaker 7:As one of those counter US technologies that that needs that big surge of power. Yeah. And that's really where batteries come in. We wanna get shirts that say WeHeartDiesel. We're the most diesel loving battery company out there.
Speaker 7:Mhmm. Hydrocarbons are incredibly energy dense. What batteries give you is that ability to surge that power
Speaker 1:Yep.
Speaker 7:Or the ability to dial it down and hide your signature. Yeah. And that's really the differentiation of the Cherry.
Speaker 1:So why can the Tesla Model Plaid go zero to 60 in under two seconds? Like, it's You got it. Surge of power, and that's what's and that's what's unique. Thank you so much for coming on the show. Congratulations.
Speaker 2:Insane progress. So
Speaker 1:we're excited to see you on the show soon. We'll talk to you later. Have a good one. Let me tell you about CrowdStrike. Your business is AI, their business is securing it.
Speaker 1:CrowdStrike secures AI and stops breaches. And we have Conor Sweeney from BABA in the restream waiting room. Let's bring Conor into the TV. How's it going? How are doing?
Speaker 2:Great setup. How are you?
Speaker 1:Thanks so much for stopping by. Please introduce yourself and the company.
Speaker 12:For sure. No. Thanks for having me.
Speaker 2:I'm I'm
Speaker 12:Connor speaking, founder of of BABA, but we connect older adults and their families with patient advocates. So human pitch, you know, refreshingly. Yeah. But it really was Neil because these folks do all the care coordination, the scheduling, the dots for health care things.
Speaker 1:Yeah. What was the origin story of the business? Were you just looking at the growth of demographics in The US? Did you have a personal story? What led you to this particular market?
Speaker 12:Yeah. For sure. I think most health care people end up coming into it after, like, experiencing it themselves, and that was that was also the case with me. My grandma had a stroke, and I did out of that care coordination. But I think what's cool is that I'm not from the health care world originally.
Speaker 12:Team isn't from the health care world, and kinda lets us move a little bit faster in different ways, which, you know, has been working so far. But but yeah. She had a stroke that left her unable to speak. So I actually started by trying to build her little AI tools for her speech therapy, Yeah. And that led to
Speaker 1:So what's the shape of the business today? Is this like a multiple sided marketplace at this point? Like, who who are all the customers and suppliers that you work with?
Speaker 12:Yeah. For sure. So we connect, like I said, the older adults in our family, I would say they're like our patients, right, our customers. And we connect them to our advocates who, you know, we have dozens and dozens of folks here, contractors. But what's really nice is that insurance usually covers almost all of the cost.
Speaker 12:So we work with, like, Medicare, Medicare Advantage Plans, even Medicaid in certain states so that, like, ninety eight percent of our patients or end customers get this for nothing out of pocket, which is really cool.
Speaker 1:Yeah. How do you get the end customers on board? I feel like you could run a bunch
Speaker 3:of advertising
Speaker 2:on Fox News.
Speaker 1:Yeah. Is it TV? Like, I mean, because I I I just feel like everyone is like, you know, doing viral launch videos going after the early adopter tech audience, but you're going after a very different audience. I feel like your growth mechanism is gonna be interesting to hear about.
Speaker 12:Yeah. It's honestly more fun too because it is an audience that, like, watches, like, Remnant TV and, like, the the scrolling bar at the bottom, like, Netflix, like, TV state is actually apparently really high converting. No way. We do stuff like flyers. Of course, we're on Facebook, Google, the whole nine yards there.
Speaker 12:But we also partner with a lot of like b to b, you know, health systems. And so like nursing homes and home health agencies, we often pick up folks that way too.
Speaker 1:Got it.
Speaker 2:How are you using AI at the product level? Is it helping make the care providers like a lot more effective? What does that look like?
Speaker 12:Yeah. For sure. Like, our advocates all, you know, use AI where it's appropriate. A lot of the tasks that they're doing are over and over again. We're constantly taking enrollments into things like food stamps and Medicaid.
Speaker 12:We're constantly fighting insurance denials. Right? Writing things like rejection letters, waiting on hold with doctor offices to make appointments. All of those are like perfect tasks for AI. Right?
Speaker 12:Like, either OCR or voice AI. So there's a lot of like that really,
Speaker 9:like,
Speaker 12:you know, technical work. But what's what was that, you know, the patient to those customers, they really like just having a human that they can call or text 247 that doesn't work for, like, the insurance company or hospital. That slight difference that our advocates are in their corner rather than some third party really seems to be better received.
Speaker 1:Take us through the
Speaker 2:fundraising news. Yeah. What's the details?
Speaker 12:Yeah. For sure. Dermocatalyst led our seed. That happened, you know, just a month
Speaker 2:or two ago, but raised
Speaker 12:a little under $77,000,000, and we're like a team of 10 in New York right now. It's it's a pretty young company, but we're scaling. Congratulations.
Speaker 2:Alright. Also, can't can't forget about Genius. My neighbor my neighbor Ben. Oh, really? He's also.
Speaker 3:Oh. Oh.
Speaker 1:Okay. There we go.
Speaker 2:So love Like it.
Speaker 12:Out to Ben
Speaker 2:Ben and Adam.
Speaker 1:That's fantastic. Well, you so much for coming on the show. Have a great rest of your week. And we'll talk to you soon, Peter. Cheers.
Speaker 1:Goodbye. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web apps, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. And without further ado, we have Matt Hart from FACES in the rest of way.
Speaker 1:And let's bring him into the TVPN UltraDrum.
Speaker 2:How are doing, What's going on?
Speaker 11:Hey, guys. How's it going?
Speaker 1:It's going well. First time on the show. Please introduce yourself and the company.
Speaker 11:Yeah. Well, first, thank you guys for having me. Appreciate it. Matt, one of the cofounders of Basis. We are a fully in person company in New York.
Speaker 11:Woah.
Speaker 3:We build
Speaker 11:an AI. Yes. A 100% Yeah. Here. No offers in SF yet.
Speaker 11:Okay.
Speaker 2:You gotta meet Keith Raboy. He's got a lot. He's got he's in New York. No. I'm kidding.
Speaker 11:We got Keith up here a lot. He's he's here. Sure.
Speaker 5:He's here buddy.
Speaker 11:He's great. But, no, we we are an AI platform for accounting teams. So we build long horizon agents that are able to automate various parts of accounting workflows Sure. And we can be here for a couple of years.
Speaker 1:Yeah. How how narrow of workflows are you talking about? Is it is this, like, a tool that integrates into other ERP accounting systems, or do you wanna replace everything? How how do you think about the the actual go to market and then the the the the product fringes?
Speaker 11:Yeah. It's a great question. We Our objective is not to rip and replace any software.
Speaker 1:Interesting.
Speaker 11:Our goal is solely to sit on top of other pieces of software and sit in the workflows that people are already doing Mhmm. And then say, really, no one should be doing any work. Should We take the doers of the work and make them the reviewers of work and have the AI perform the first pass of all the various things that might need to be done. So that means we need to integrate it into various systems.
Speaker 3:Mhmm.
Speaker 11:But it also means that in term from a deployment perspective, you can easily stand up basis in your environment and put it to work without having to rip out existing software. Mhmm.
Speaker 1:And where, like, a lot of people have tried the progress in software. Most software like, when you say the doer of the work turns into the reviewer, that feels like what's happening in agent coding right now.
Speaker 3:Yeah.
Speaker 1:How like, where in accounting, how how far along are we? Would you entrust a reviewer to not actually do any of the work on, I don't know, your personal tax return or something. But I I don't know what the toy example is, but how close are we to, you you know, this situation like what we're seeing with coding where people say, I don't write any code anymore. When will we see accountants say, I don't do any of the work. I just review the work.
Speaker 11:Yeah. It's a great question. I think it depends a little bit on the complexity of
Speaker 3:the task.
Speaker 11:Yeah. So, for instance, there are some things that has been able to do for quite a while Sure. Where I think accountants have already sort of built up trust in Basis' ability to do these things. And so in those situations, they may be spot checking, but they may not be reviewing quite as actively. I mean, then there's some things, for instance, we just, you know, released yesterday an example of the first AI that's able to complete an entire, you know, corporate tax return workbook end to end by itself, which I think is a remarkable milestone in the in the accounting world.
Speaker 11:And that's something where that's a capability that's only existed for the last, you know, couple months. And so, you know, that capability, obviously, you'd apply a different sort of level of review to those types of situations. The interesting thing is that accounting is actually built for these types of review. So accounting, obviously, is is extremely important. Yeah.
Speaker 11:Humans themselves make lots of mistakes. And so accounting already has multiple levels of review that are built into processes, which means that when accountings accountants are thinking about how to deploy Basis, they can kind of apply that same review mentality to incorporating Basis into their workflow. Think about what are the the areas of highest risk. Make sure that you can see it doing the work in a way that you think makes sense first. And then as you build up trust, you sort of, you know, can adopt the way that you actually thinking about reviewing your work.
Speaker 11:And then to the point on coding, I think it's interesting because accounting is obviously not a text in text out discipline. And, you know, it's not something where there's tons of data on the Internet about, you know, various accounting workflows. So And I think it doesn't quite it's not quite as immediately obvious how to use AI to help with those workflows to the way to the extent that it is in legal or in, you know, coding or other areas where LLMs out of the box are are clearly very good. And so I think it has taken some time for AI to get good enough, to the requisite level of accuracy and over sufficiently complex tasks for it to be extremely useful. But I think that's kind of flipped over the course of the last year.
Speaker 11:And I think what we've seen play out in in sort of software engineering over the last year will play out in accounting in the company.
Speaker 2:What do various players in the accounting world How are they processing AI over overall? Do they think that the fee model will have to change? I remember, I forget, there was one auditor that was getting mad at their auditor Oh, yeah. For saying like, hey, you're using we know you're using AI. You gotta give us a better price.
Speaker 2:And they're like, wait.
Speaker 1:You're you're an auditor. Yeah. Was the Spider Man meme.
Speaker 2:But, yeah, how how are people processing it?
Speaker 11:Yeah. It's a it's a great question. I think one of the interesting dynamics about accounting that I think is not true for a lot of other, you know, professions or areas of professional service is there is a very dramatic shortage of accountants in The US. And so when we started out serving a number of our customers, they were not necessarily interested in doing AI for the sake of AI. I think over the course of the last year, that's flipped, and everyone's board says, what are we doing from an AI perspective?
Speaker 11:And people wanna have AI initiatives. When we started in 2023, that was not the case at all. Mhmm. What was the case, though, is that there was a huge shortage of accountants. And I think roughly 300,000 accountants left the profession over a two year period in and around COVID.
Speaker 11:You never know what to make of these demographic estimates, but they say roughly seventy five percent of accountants will retire over the course of the next decade. I mean, there are very few folks joining the profession to make up that gap. And so that means that if you are an accounting team or an accounting firm, one of the core things you have to solve for is how do we continue to do the work that we need to do with the people that that we can hire? And so, one of the things that Basis has enabled firms to do is to to take on a lot of the work that otherwise they would not be able to get done because of the the shortages that exist. And so, I think that dynamic has made the adoption, you know, maybe happen quicker than it would have otherwise have if if that shortage didn't exist.
Speaker 2:Yeah. It's fascinating. On on the other side, in in law, from from what we've seen, you have tons of people applying to law school simply because maybe just because they don't have anything, better to do, which implies like we may have, you know, a huge influx of lawyers, but, accounting not as prestigious hasn't Yeah. I can I can see why it hasn't attracted the same influx? But yeah.
Speaker 2:I think even even as I think about it like
Speaker 1:All these kids just wanna be astronauts.
Speaker 2:I've had I've had, you know, working with a number of firms over the years, it's always like super annoying if if the if the partner or associate more more so on the associate side of an accounting firm leaves and then there's all this like context that's lost and and you really like, if if an agent had been helping with that entire process, it would be a lot smoother. So I'm gonna recommend Basis our I
Speaker 1:have one more question. We'll let you get back to your busy day. How do you think about harness development and and throwing the context back to the human in the middle? Because it sounds great to be like, okay, I'll turn this agent loose and it'll come back to something I can review. But a lot of these things when I'm interacting with great accountants, it's it's not just sum up all the bills and and, you know, you have your total revenue or something.
Speaker 1:It's like, okay. I found a bill. I don't know how to categorize it. Is this CapEx? Is this OpEx?
Speaker 1:Or was this a business expense? How are we classifying this? And, like, sometimes that data can just be, you know, agentically go and, you know, look at the receipt, figure out what happened, figure out how to classify it. But a lot of times, it requires in an interaction with a human, either over Slack or over an email or something. And so I I imagine that deciding how to be, you know, persistent but not annoying, is that a big challenge that you're actually working on?
Speaker 1:Or do I have that kind of roadmap wrong?
Speaker 11:Yeah. A 100%. A very important part of things. Like, part of doing accounting work is the world is this very messy, complicated place where all sorts of economic activity is happening.
Speaker 1:Yeah.
Speaker 11:And you need to figure out how to get that information Mhmm. In order to properly account for things when you were not present at the time of some kind of economic interaction. So, it's very important. And I think it is one of the challenges of, you know, we spend a lot of time thinking about these long horizon agents because, know, because of the nature of accounting work, you know, this sort of chatbot experience is not one that naturally works. And so we've been focused on developing these agents that can sort of work on more complex tasks over longer periods of time.
Speaker 11:Mhmm. And one of the challenges there is you have to figure out, as the agent is going about doing its work, when to interrupt and ask the human a question. Yeah. And also how to provide the human insight into what's going on. Let's say you're gonna do a task and the AI is gonna go off for the entire day, you know, the human can't find out at the end of the day that it did something that wasn't exactly aligned with what they wanted.
Speaker 11:Because then the whole day's been wasted, and they need to deliver something to their clients. So figuring out how to both give visibility, and then also how to to to raise concerns to the human user is extremely important. And sometimes, even need to go directly to a different source. You need to send an email or take some other action in order to complete the workflow. So I think it's an essential part of of One Horizon human development.
Speaker 2:Super competitive hiring market right now. Give us your sixty second elevator pitch if you're competing to to hire somebody with the big labs or or, you know, somebody that might join Harvey or or, you know, Cognition or any of these other companies. How do you how do you close them?
Speaker 11:Yeah. Well, I mean, look, there's lots of exciting things going on and lots of great opportunities out there. But I think there are a couple things that we think are critically important, and it might not appeal to everyone, but certainly a certain type of person. I think the first is that, you know, we are pretty much solely focused on building the most capable, most accurate, long horizon agents. And I think we're at the frontier of that work.
Speaker 11:We work very closely with the labs that are building the most sophisticated reasoning models than we have for quite a while. And so I think for folks who are interested on in in figuring out how can we build the most capable, most autonomous systems and apply them to actual to real work in the real economy, that is, you know, part of of the work that we do. It's really the core part of the work we do that I think is is methodologically extremely interesting. I think the second thing is that we are a fully in person team in New York, and all of our research, all of our engineering takes place here. And I think there are very few other companies that are on the frontier of applied ML and are also fully in in New York.
Speaker 11:Obviously, there are limitations relative to to the Bay Area in some ways, but I think there's amazing ML talent here. And so we are are are sort of hopefully becoming the home for applied ML talent in New York City. And then I think, finally, accounting is just a hugely important part of of the economy and how we operate as a society. We sort of see it as the fundamental way in which we understand economic life, in in which we sort of structure and systematize all the economic activity that happens. I mean, it has tremendous implications downstream in the organization for how people make decisions, and and and we think there's a huge opportunity to do way more accounting than we're doing right now, and it could actually help organizations function in in a much more effective manner.
Speaker 11:We actually think it has an interesting parallel to engineering in a certain sense, is that accounting is about, you know, how do you sort of systematize and abstract this very complicated world. And in some sense, that is like the practice of software engineering as well. It's like, how do we understand, you know, this very complex domain and reduce it to a piece of reliable software that we can use? And so I think it's it's much more important than people think. And I think it actually is very sort of compatible with the ways that, you know, engineers and ML folks like like to think as well.
Speaker 11:So those are the things that that we sort of think are are most important. And, yeah, we're really lucky to have a great group of folks here at Basis.
Speaker 1:And you got some money to hire more people. Take us through the fundraising What happened?
Speaker 11:Yeah. So, you know, we I think when we're thinking about raising money, one thing that never changes is the strategy and what we're trying to execute from from a business perspective. We have at actually, at our our first seed round and then at every successive round, you know, written a quick memo or cover letter. It just outlines the strategy. And and the strategy, which is that, you know, we are trying to build these long horizon agents to solve important important problems in accounting, has not changed.
Speaker 11:Some of the core principles around how we make decisions have not changed. So we actually try to to make sure that we raise around. It doesn't actually change the strategy of what we're doing in a meaningful way. Like, we think that you should be relatively consistent. You should obviously update as you go in in that respect.
Speaker 11:What it does allow us to do is it allows us to keep, you know, growing the team in the ways that it needs to grow. And so, you that's mostly what we brought the additional capital on in order to do. There's so many different domains of accounting. There's so much ML and engineering work that needs to be done. No matter how much we use AI internally to make all those things more efficient, there's just there's just endless things left to do it.
Speaker 11:So we just felt it was the right time to do it, and we're very thankful that we have a great set of investors around the table to allow us to keep making that.
Speaker 1:And how much did you raise in this most recent round?
Speaker 11:We raised a 100 in this round. Sounded.
Speaker 1:You for coming on the show.
Speaker 11:Massive.
Speaker 1:Have a great rest of your day. English. And we will talk to you soon.
Speaker 2:Yeah. Great to meet you. Thank Goodbye. Cheers.
Speaker 1:Well, I need to hop on with the English countryside soon. So, are there any more news stories that we should cover before we plant the bomb? Figma director Andrew Reed just bought $36,500,000 worth of Figma, the largest ever insider buy of Figma. Very exciting for him. He's going longma on the Figma.
Speaker 1:Dream wave. This is a stretch. People were debating back and forth with also Capital founder Mike who came on the show earlier. I, you know, I think he had a really good point. I like his point.
Speaker 1:I just think it's funny that Yimbi Land ratioed us into the stratosphere by posting, no, you can't just vertically integrate like that. Meanwhile, in China, BYD, I guess we do in ships now. I had no idea. I saw the BYD logo on a ship. I didn't realize they made the ship, I guess.
Speaker 1:They make everything. I guess they make cars and monorails too. Absolutely insane, but 10,000 likes on this. And although it's like a I don't know. It's a dunk gray show, whatever.
Speaker 1:It is an inspiring message. If they can do it, why can't we? So just do it. Just go build a supertanker, I guess. Figure it out.
Speaker 1:Anyway, anything else from the timeline that you'd like to talk about before we call it a day?
Speaker 2:There's a lot more.
Speaker 1:There's a ton more. Mark Zuckerberg is planning a stable coin comeback. They also have a banger deal with AMD going on. And if you head to the bar this weekend and you drink too much, you should just say that you were the victim of a distillation attack. That's the correct turn of phrase.
Speaker 1:Anyway, thank you for watching. Leave us five stars in Apple Podcast on Spotify. Have a wonderful day. Good Nice
Speaker 3:work, brothers. I'll see you on the next one.