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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
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Speaker 2:Today is Tuesday, 12/09/2025. Just a few days until Christmas. We're so excited. We're live from the TVPN UltraDome, temple of technology, the fortress of finance, the capital capital. No travel until Christmas, baby.
Speaker 2:No travel until the New Year. We're in the Ultradome hanging out. We're monitoring the situation. We're monitoring Always. The Paramount Netflix Warner Brothers situation because this is one of the most fascinating deals.
Speaker 2:The deal has gone hostile. Paramount has launched a hostile bid to acquire Warner Brothers. It's an all cash offer. 77,900,000,000.0. Really.
Speaker 2:Really. And it's a fun one because, I feel like it's it's obviously tech adjacent, but it's not it's not the story that people have been monitoring all year. We've been talking about foundation models. That whole story has just gotten a little bit stuck in they
Speaker 1:got tired of not getting enough attention. Exactly. Let's spice it up
Speaker 2:a little bit. Spice it up. Here's something new to learn about. So Yep. Everyone's having fun.
Speaker 2:Everyone's, learning new things. And, I could tell because when I came in today, I had a bunch of questions, that people were throwing at me about how all of this works. Why are why why isn't Warner Brothers just going with the highest price? Like, when I sell a stock, I don't care if Citadel or Jane Street's buying it. Like, if I'm selling $80 a stock, just give me the best price.
Speaker 2:But when you're selling an $80,000,000,000 company, there are other considerations, and it goes beyond just maximizing shareholder value. And so I wanted to break down a few of those, so I did that in today's newsletter. We can run through that, and then we can run through some of the news.
Speaker 1:Perfect.
Speaker 2:But first, let me tell you about RAMP. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. So this this question, you know, it seems obvious.
Speaker 2:The board has a fiduciary duty to maximize shareholder value. That's legal requirement to take the higher offer. And yet that's not what's happening. Like, yesterday, we saw that, that Ellison and Paramount came in with over 100,000,000,000. Of course, that included the CNN, the TV assets.
Speaker 2:But even when you broke it out, it seemed like it was very clear that Ellison was willing to pay more money and make a higher offer. So under what circumstances can a board whose job it is to maximize shareholder value not take the higher offer. They can't just it can't just be whoever we had the better dinner with, right, which is part of the news, of course. They they went out to dinner, and, Paramount CEO David Ellison sent a text to David Zaslov, who's running Warner Brothers, after they made a hostile bid today to buy Warner Brothers. And, David text the other David and says, David, but I guess he misspelled his name, even though that's his name, which is just funny.
Speaker 2:But, anyway, he says, I appreciate your underwater today, so I wanted to send you a quick text. Know that despite the noise of the last twenty four hours, I have nothing but respect and admiration for you and the company. It would be the honor of a lifetime to be your partner and to work and to be the owner of these iconic assets. He's talking about Foghorn Leghorn. He's talking about Porky Pig.
Speaker 2:He's also talking about Batman and Superman, obviously, and Harry Potter and Lord of the Rings and a million other iconic assets, which is true. If we have the privilege to work together, you will see that my father and I are the people you had dinner with, which I I I like that. I think that's cool. They they they had dinner. They
Speaker 1:It's a fantastic text.
Speaker 2:Yes. Yes. Yes. It's a great one. So quickly, let me tell you about Julius AI, the AI data analyst that works for you.
Speaker 2:Join millions who use Julius to connect their data, ask questions, and get insights in seconds. So there are two main reasons why you don't just take why why your size might not be size. Directors at a company like Warner Brothers, they have to maximize shareholder value, but maximizing shareholder value is an expected value calculation. So if you come in with a $100,000,000,000 offer, and I think there's a 75% chance that you're gonna deliver that, and someone else comes in with an $80,000,000,000 offer, and I think there's a 100% chance that they're gonna deliver that, well, expected value of your bid is 75,000,000,000. The expected value of their bid is 80,000,000,000.
Speaker 2:I go with the 80,000,000,000. Even though it's like a lower headline number, it has a higher
Speaker 1:How much of the calculus do you think is just a deal that will actually get done? Right? A deal that is gonna get Yeah.
Speaker 2:So a deal that doesn't get done could still have value because of a breakup fee. So you could you could you could, in theory, go into a deal that you know is impossible. And and the example that I gave is, what if ByteDance came in? And they were like, hey. You know, we're $400,000,000,000 media company.
Speaker 1:To own Porky Pig.
Speaker 2:Love to own these iconic assets. Let's, let's pick up Warner Brothers. We'd love to own CNN too. You know? Knows what we'd put on the TV?
Speaker 1:We already own TikTok.
Speaker 2:We already own TikTok. Why not CNN also? Why not Shark Week? You know?
Speaker 1:No. Not Shark Week.
Speaker 2:Not Shark Week.
Speaker 1:Carve out Shark Week in my book.
Speaker 2:But, obviously, the government would would block that. And we have the we have CFIUS, which is an organization in the US government that determines whether or not an international buyer can take an American company because of intellectual property, all sorts of geopolitical considerations. We don't want another country cornering a market on a really key piece of the supply chain, like the NVIDIA h 200, for example, which we might be talking about later in the show with Aaron Ginn, cofounder of HydroHost, repeat guest on the TBPN show. But then there's also just the FTC. So certain deals, like the I gave you the example yesterday, like Disney.
Speaker 2:Disney would be, like, so blocked, I think, that deal doesn't even get kicked around. No one even talks about it. And because it would get blocked by the FTC, so it doesn't even happen. But it would maximize shareholder value if Disney came and said, yeah. We'll give you a $10,000,000,000 breakup fee, and we wanna try and buy you for $200,000,000,000 or $1,000,000,000,000 or $200,000,000 Like, you would immediately say yes because you just want the breakup fee.
Speaker 2:But having being in this turmoil and being in this limbo and not being able to sign deals with other that has an opportunity cost. Right? Yeah. And so you might want to back off of that. And so basically, the
Speaker 1:Yeah. Look, you look back at the Figma acquisition. Yep. Adobe paid a $1,000,000,000 breakup fee. So that's effectively like non dilutive financing for That has a happy ending because they were able you know, reaccelerate Yep.
Speaker 1:Get out, into the public markets. But, there was another situation where they went through a rough patch Yep. And actually really needed that capital Really? Yeah. To get through.
Speaker 2:Yeah. So so there's so there's there's basically two buckets of risk that I think most most dealmakers would be considering in this situation. First is financing risk. So will the will they come through with the money, and what money are they paying with? Because the initial offer this is the history.
Speaker 2:There's actually been six offers put forward by Paramount. David Ellison is putting on a clinic of just not taking no for an answer. Because all the way back on September 14, he offered $19 a share, and 60% of that was cash. So 60% cash offer. Then September 30, two weeks later, he comes back $22 a share and ups the amount of cash to 66.7%.
Speaker 1:Zaslav is doing a masterclass and making your opponent negotiate against themselves.
Speaker 2:100%.
Speaker 1:It's actually great.
Speaker 2:And so 10/03/2350 a share, 80% cash. Then November 2550 a share, 85% cash. Then finally, 12/01/1926 50 per share, 100% cash. December 4, $30.30 dollars a share, 100% cash. Now why does this matter?
Speaker 2:Well, it's because you get locked into owning the shares of 40% of the shares is paramount, and then while it's closing, the the stock trades down. You wind up getting less value. And so the 80,000,000,000 today might wind up being 70,000,000,000 later, and that doesn't maximize shareholder value. And so there's also just the the question of, like, can you actually marshal the cash? Just like if somebody comes to you and you're about to sell your house to them and they say, yeah, I'm definitely gonna get a loan for this.
Speaker 2:Well, that's a financing risk. Maybe they don't. Maybe they back out of the deal the deal.
Speaker 1:That's why cash offers oftentimes
Speaker 2:Exactly. If you can just prove you have the cash, that that makes a difference. And, I mean, he's effectively gone and done that because he's teamed up with Jared Kushner reportedly and gone around the world, got got a whole bunch of different sovereign funds and just really people any any one with big deep pockets is has has kind of, you know, said, yes. I'm I'm down to come along on this ride Yeah.
Speaker 3:And put up a bunch
Speaker 2:of the capital. The capital has been marshaled. It seems like it's ready to go. And and then, also, you have Larry Ellison, who has three times as much money, I think, than the whole deal value, something like that, 275,000,000,000 to his name. And he's all Assets.
Speaker 1:Not cash.
Speaker 2:Assets. Not cash. But
Speaker 1:He should not just I I know they want it, but do not market sell your oracle position, please.
Speaker 2:Yeah. But but he's like, I'm actually I'm actually going all cash now. But but but he's he's effectively acted as a backstop. And so and so everyone who's come in and said, okay. Who I guess I'm good for 10,000,000,000 of that 80,000,000,000, but only if everyone else is in, Larry Ellison reportedly has come in and said, well, you know, if if there's one person in the bunch that that backs out of their slug at the last second, I'll jump in and get that.
Speaker 2:He's not saying he's gonna put up the whole 80. He's just saying he's backstopping it. Yep. And and and that's the term that's been thrown around. So so David Ellison feels very, you know, good because he's done what Zaslav wanted him to.
Speaker 2:He said, hey. They wanted an all cash offer. I brought them an all cash offer. I brought them an offer that's higher. And we believe that it's there's no reason why, factor number two should come into play, and factor number two is regulatory approval.
Speaker 2:And so, there's been this question about, will Netflix get approved? If there was a different buyer, it would have even more regulatory risk. And so you don't want to even if the price is higher, you don't want to accept a higher price with a lower chance of actual actual conversion. Right?
Speaker 1:Bobby thinks NLE Choppa might up his offer to a 100 k of cash and
Speaker 2:get back in
Speaker 1:the mix.
Speaker 2:In that scenario, at least you know that the 100 k cash is real, and it's gonna be delivered on the day of close.
Speaker 1:Maybe in actual cash too.
Speaker 2:Probably. I I think that was the that that that is funny because that that that was the joke of that meme was that he was giving, like, actual cash. When we're saying cash offer here, of course, we are not talking about physical cash.
Speaker 1:Hey. You never know. You doing money spread over there? Yeah.
Speaker 2:Is Tyler doing money spread? What does he got? Did Christmas come early for
Speaker 1:you?
Speaker 4:I so I I had a question though. What makes the Paramount offer, like, hostile? Is it that it's, like, reacting to the Netflix offer?
Speaker 1:Is that the Netflix board Already or sorry. The Warner Warner Brothers board went with Netflix, and they're coming it's hostile because they're saying, screw the board decision. We're we wanna go to the shareholders.
Speaker 4:Okay. Yeah. Because the it sounds like they had a nice dinner and the techs were, like, kind.
Speaker 2:Yes. Yes. Yes. No. No.
Speaker 2:Hostile. No. No. No. Hostile in the sense of, like, of, like, not accepting the final the the like, the final decision there.
Speaker 2:And then and then also, is a there is a point where you can appeal directly to the shareholders and and make the you can actually make the legal case that the board is not acting in in their fiduciary duty and in their in the interest of shareholders because but, again, these things need to be argued in shareholder lawsuits because it is fuzzy. Because, like, if if I say, I'm offering you a 100,000,000,000 and someone else is offering 80,000,000,000 And the board says, yeah. But that 100,000,000,000 has only a 75% chance of going through. You have to discount that. Now now the board says it's worth 75.
Speaker 2:But whoever made that offer can say, no. We're actually good for it. You need you should apply a 10% discount rate and treat our offer as if it's 90% or a 100% good. Right? And so and so all of those arguments, those can be made in the court, and the shareholders can, you know, react to that.
Speaker 2:And if the shareholders align and say, yeah. Actually, we think we'd be getting more money here with this with this deal, then they can push back against the board at a certain point. But yeah.
Speaker 1:Friend of the show, high powered media exec says, Zaslav has been architecting this situation for the last twelve months, sitting pretty, and he's a wild wily old fox and has what he has been shooting for. Two heavy hitters fighting over a deal. Don't doubt there will be a couple more turns here with the price or even another bidder coming in sideways. Don't quote me.
Speaker 2:Which is remarkable because the price is so high already compared to where it was six months ago. Zaslav, I it it really feels like it's coming together that he will be remembered as, like, an incredible business executive for this deal. I I wanna know more. I'm still learning about this particular industry, and so I've been I've been having fun digging in. But Possible
Speaker 4:deal guy of the year. He's in the conversation.
Speaker 2:He's definitely in the
Speaker 1:Sam Sam was Sam looked like he was running away with
Speaker 2:it Yes. Over the summer That's true.
Speaker 1:Early fall
Speaker 2:It's a he lost fall. Ball control. He lost ball control. Yeah. Well, quickly, let me tell you about fin dot a I, the number one AI agent for customer service, automate the most complex customer service queries on every channel.
Speaker 2:But there is there is a wrinkle that that people haven't really been considering, which is, the fact that Warner Brothers Discovery holds massive a massive, often underrated vault of masculine cinema. And if this falls into the wrong hands
Speaker 1:What is masculine cinema?
Speaker 2:Masculine masculine cinema would
Speaker 1:be dudes on film?
Speaker 2:So they own they own Clint a bunch of Clint Eastwood films, Dirty Harry, Magnum Force, The Enforcer, Heartbreak Ridge, American Sniper, Letters from Iwo Jima, Unforgiven, Gran Torino. They also own the classic Steven Seagal run. Basically, movie where Steven Seagal was a massive theatrical star before going to direct to video. We're talking about above the law, hard to kill, marked for death, out for justice, under siege, which is Die Hard on a Boat, Under Siege two on deadly ground, fire down below, exit wounds. They also own Rambo, the whole survivors to loan the Cobra Wing.
Speaker 2:Cobra, demolition man, the specialist, tango and cash, bullet to the head, get Carter, the 2,000 remake. They also own Mad Max, lethal weapons, all of the lethal the lethal weapons. The Matrix, Blade, Mortal Kombat, 300 Rush Hour, Pacific Rim, and a number of dad and military shows, Band of Brothers, the Pacific Generation Kill. There's a whole host. They should
Speaker 1:release the full DVD set just called Guys Being Dudes.
Speaker 2:Yes. They also own some Jason Statham properties, the Meg franchise where Jason Statham fights a big shark.
Speaker 1:Woah.
Speaker 2:Wrath of Man. I I guess most of the Guy Ritchie films are actually with Lions Gate or MGM. But there are a variety. And and I think this could be a, you know, a big political hot button of what happens to the the Rambo franchises, the the the Hollywood hunks. No one's talking about the Hollywood hunks.
Speaker 2:Everyone's focused on Looney Tunes characters. But if the Hollywood hunks fall into the wrong hands, it could be it it could swing our entire culture potentially. Anyway, let me tell about the data.
Speaker 1:Apparently, Michael on our team worked on wrath of man.
Speaker 2:Oh, really? No way.
Speaker 1:First job. Very cool. Very cool.
Speaker 2:Data, automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risks. You're hiding inordinate amounts of Middle Eastern funding sources in your takeover bid. Are you not? Says boring business. And not hiding it.
Speaker 2:It's out in the open. Like, this is this is this is, like, the playbook for these
Speaker 1:big deals. Double double that of the amount of equity that the Allisons are putting in.
Speaker 2:Okay.
Speaker 1:Putting in around
Speaker 2:Yeah. I mean, I think everyone assumes that there'd be a lot of Middle Eastern funding in this. That has become the standard funding instrument these days. I I don't know. Like EA Games, we just followed that story a little bit.
Speaker 2:That was obviously a
Speaker 1:It's like 90
Speaker 2:amount. 3%. Saudi money. And that is part of the modern deal making playbook these days. Every I'm pretty sure most of the a lot of venture funds have raised money over there.
Speaker 2:A lot of the big AI companies have raised money over there. Like, that seems like a foregone conclusion that if you need money, you go where the money is. Why do why do bank robbers rob banks? Because that's where the money is. Right?
Speaker 2:Well, Dylan Beyers says, David, I appreciate you're underwater today. So sent you a quint quick text. He's talking about the dinner. Oh, so that was the correct that that was the misspelling, d a I v d. He must have been texting very quickly.
Speaker 2:It does give you a
Speaker 1:little of Let's turn this into a copy pasta.
Speaker 2:Yes. I enjoyed the dinner. So exec sum has an overview of who who's actually putting in the money here. Filings reveal that Paramount's bid for Warner Brothers is backed by equity commitments, including 11,800,000,000.0 from the Ellison family, 24,000,000,000 from Saudi Arabia's Qatars and Abu Dhabi Sovereign Wealth Funds, 1,000,000,000 from China's Tencent, additional commitments from Redbird Capital Partners and Jared Kushner's Affinity Partners. That doesn't add up to a 100,000,000,000.
Speaker 2:So there's must be must be cash coming from somewhere else. This is, maybe maybe there needs to be some more reporting until, oh, they did give a they did give an an updated version of this post, but doesn't quite add up. So, will be interesting to follow where, you know, how the deal comes together.
Speaker 1:And we have a few more people joining this week to help us break down the deal. Ben Smith from Semaphore tomorrow and then Dylan Byers
Speaker 2:Oh, Dylan's coming?
Speaker 1:Puck on Thursday Amazing. In person.
Speaker 2:I'm excited. Oh, he's coming in person. Yes. That's great. Well, let me tell you about numeral compliance handled.
Speaker 2:Numeral worries about sales tax and DAT compliance so you can focus on growth. Trump says that The United States will allow NVIDIA h 200 chip sales to China and get a 25% cut. This is a pretty big change. I mean, we were talking about not selling I mean, I guess it's not Blackwell. Right?
Speaker 2:It's Hopper. So we're still a generation behind. But was this it it was like a pretty nerfed chip before. We're getting less nerfed. We seem to move we seem to be moving in a in a more thumbs up direction, more, let's let's actually get the chips over to China.
Speaker 2:At the same time, AI is fake, it doesn't matter. Right? That's the take. The the pro China take is that is that
Speaker 1:it's like It's SaaS.
Speaker 2:It's it's SaaS or it's not it's not like this nuclear bomb that's going to destroy everyone. So it's harder. It's getting harder to make the Manhattan Project argument. Right?
Speaker 1:And it feels impossible to make the argument that we're going to get them addicted to The US AI supply chain, and they'll never develop their own capabilities. And so we want them
Speaker 2:Well, I disagree with that. I think that that I I think that that argument actually holds. That argument holds for sure.
Speaker 1:If we In in the next I mean, I I totally disagree. Okay. I think they're I think China's smart enough to know they don't wanna be dependent on any foreign country to produce any
Speaker 2:Yes. But I still think there's enough of, like, a market force within China that if we flood the market with cheap NVIDIA chips, like, they will there will it'll just be expensive for them to keep propping up their local industry. Even if they are aware of it, even if they know that they have to, it's a cost, and it's something that a lot of AI researchers over there will just say, you know what? I'm already it's so much easier. The NVIDIA ecosystem is so great.
Speaker 2:I'm just gonna stick with that. I don't know. I'm I'm I'm a little bit I'm a little bit skeptical that, like, there isn't there there's no advantage to to selling NVIDIA chips there. I've become more I've become more receptive to that argument, particularly, even though you have not. But that's fine.
Speaker 2:Tyler, what what were you gonna say about this?
Speaker 4:Yeah. Was just gonna say I mean, we kind of joke about this. Yeah. But it is kind of crazy the extent to which you can basically bake down all, like, AI policy Mhmm. Questions to, like, if you are AGI pilled.
Speaker 4:Yeah. Because, like, if you are if you're Dario
Speaker 2:Yeah.
Speaker 4:I mean, you shouldn't be giving stuff to China. Well You also shouldn't you'll like, if you are a AGI AGI pill, you should be thinking about safety, all these things. Like, we had Keith Raboy on. Yeah. He's doesn't seem super AGI pilled.
Speaker 4:He's also like, oh, safety is a hoax, etcetera, stuff like this. I think basically all of these questions you can just, you know
Speaker 2:Well, it depends. Because if you're super fast takeoff pilled and you're super, like, ASI, it's like but you think that it can somehow be contained in whoever gets it first. You actually don't mind if China's six months behind you because as soon as you hit that inflection point, you're a thousand years ahead. And so you might as well just do whatever it takes, fund whatever, make as much money as possible as long as it accelerates you to be the first one to hit that inflection point. So there is an argument where you can be extremely AGI built, even super intense.
Speaker 1:Well, true True Social is creating a prediction markets product with a I thought
Speaker 2:you were gonna say AI product. Did they launch an AI thing last week?
Speaker 1:I think that was fake news.
Speaker 2:Oh, that was fake. Okay.
Speaker 1:But it's possible Trump is going to use the prediction markets on Truth Social in order to kind of set AI policy going forward. Say, h two hundreds of China, good or bad? That's wild.
Speaker 4:I mean, that that's not that like, Robin Hanson says that that's, like, a good idea.
Speaker 2:That was the whole that was the whole that was the whole pitch originally.
Speaker 4:There there is definitely a bull case, you could say, like a steel man for that.
Speaker 1:Yeah. It's There's always a steel man.
Speaker 2:Yeah. I mean, it's basically
Speaker 1:Where's your helmet, John?
Speaker 2:Yeah. Yeah. Yeah.
Speaker 1:You need
Speaker 2:to put on a helmet. Well, let's read through this Wall Street Journal article on the on the details of the new NVIDIA deal. But first, let me tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together.
Speaker 2:So
Speaker 1:Notable that this seems to have been completely priced in already because NVIDIA is actually down half a half a point today.
Speaker 2:Yes. I've it's it's been such a dramatic story all year, and yet it's always felt like a complete footnote in the overall financial performance of NVIDIA. It's never felt like, okay. Yeah. If this if this goes NVIDIA's way, they're gonna double their double their revenue or double their profits or, like, you know, really move the needle.
Speaker 2:They're growing so fast that, you know, I I don't know how many we're gonna get into figuring out how many h two hundreds they sell, but they would need to sell a lot to actually move the needle on this behemoth of a business, what is the world's largest company in the world. So president Trump said he would let NVIDIA export its h 200 chip to China and that The US would receive a 25% cut, his latest bid to make money for the government in an unusual agreement with a private company. I have informed president Xi Jinping of China that The United States will allow NVIDIA to ship h 200 products to approved customers in China and other countries under conditions that allow for strong national security. 25% will be paid to The US today. The move is a boon for NVIDIA, which has fought for months to maintain access to the world's second largest economy.
Speaker 2:The company had agreed earlier this year to give The US 15% of China's sales from a lower performing chip only for the Chinese to scuttle those plans as part of continuing trade talks between the two sides. Chips from the world's most valuable company have become a prized geopolitical tool. The h 200 has higher performance than the h 20 that NVIDIA was previously allowed to sell, but this isn't as powerful as the company's top Blackwell products released this year nor the Rubin generation chips, generation of chips coming next year. The move follows a meeting between Trump and Jensen Huang last week where the pair discussed h two h 200 exports. People familiar with the matter said, NVIDIA shares added nearly 2% after hours.
Speaker 2:That's not too bad. Even with the US government taking a cut, the decision could be worth billions of dollars in sales to NVIDIA, which enjoys comfortable margins on its AI chips. In the most recent fiscal quarter, NVIDIA reported gross margins of 73.4% on $57,000,000,000 in sales. That is crazy. They can totally afford 25% for the big guy.
Speaker 2:I have no idea if it'll be legal. We'll have to figure out if this gets approved because in general, The United States does not import in in force export duties. That's not something America's done historically. We had some folks on the show to contextualize that and give us some background when this was first floated. Feels Feels like it is happening now, but we'll see where it lands.
Speaker 2:In August, NVIDIA CFO Colette Krasz said that if geopolitical issues subside, the company could ship between 2,000,000,000 and 5,000,000,000 of chips to China per quarter, which increase which could increase if orders pick up. So they're doing Yeah.
Speaker 1:Right around that time too. Buttnik was on CNBC. Yep. And this was the quote that originally ticked off the Chinese. He said, we don't sell them our best stuff, not our second best stuff, not even our third best.
Speaker 5:Mhmm.
Speaker 1:And he said, you want to sell the Chinese enough that their developers get addicted to the American technology stack. That's the thinking. And of course, CCP basically immediately said, we don't want any of them now because we're offended. But
Speaker 2:It does seem like yeah. I don't I don't know. We we will have to we'll have to have Bill Bishop or someone on the show to contextualize how China is receiving this information, whether or not they will actually buy it. Of course, we're gonna be joined by Aaron Ginn in just thirty minutes, so stay tuned for that. Also, let me tell you about Linear.
Speaker 2:Meet the system for modern software development. Linear streamlines work across the entire development cycle from road map to release. So the exports could help Chinese tech giants that have struggled to get top chips to train their models. Wong has argued NVIDIA should be allowed to compete in the Chinese market because China has many of the world's top AI researchers, and The US should want them using American technology. If you're you are not going to replace China, Wong said at an event at a think tank event.
Speaker 2:Trump said that the government would take a similar approach to exports from NVIDIA competitor AMD as well as Intel, in which the government now has a 10% stake. The approval comes just weeks after administration officials, including secretary of state Marco Rubio, torpedoed a push from NVIDIA to sell a slimmed down Blackwell chip to China before a recent trade meeting between Trump and Xi Jinping. Some officials, including AI's are David Sacks and commerce secretary Howard Lutnick have backed exporting the h 200 because it could be a good compromise that allows NVIDIA to compete with China's Huawei technologies without vaulting China past The US in AI? People familiar with the discussion said, I don't know. It's it's such a it's such an interesting question that I I still I still wrestle with.
Speaker 2:Like, we we exported a ton of Teslas to China, and BYD and Huawei have now But arguably, completely leapfrogged. Completely leapfrogged was so they would they did not become addicted to the American
Speaker 1:That's what I'm that that that was the point I was making earlier. Yeah. You can make the art like, almost with every single product, they've said, we'll work with you to make this thing that you wanna make. We're really good at making things. Yes.
Speaker 1:And then they ultimately just make a better version of said product and make it for cheaper. Yes. And in the case of cars, right now, we're obviously not allowing these cars to be imported Yeah. Into The US. But they can simultaneously say, we're happy to keep making you these things.
Speaker 1:We're also going to compete with you directly and constantly try to be better
Speaker 2:I than what you just wonder, if you play it back you don't and you don't allow Tesla to export the amazing Model S or Model three, does that slow down BYD's development of their car or or or Huawei's or Xiaomi's development
Speaker 1:of their car. Is they were able to basically get a paid education making Teslas, and they were able to leverage that into making
Speaker 2:But that's about making the car there. If you don't make the car there, which
Speaker 1:is because the the NVIDIA has a Shanghai
Speaker 2:But that's research. That's not made there. That's not made there. Like, it's very different when you're when you're saying, Okay, we're gonna go and we're gonna go and produce this product there. And you are going to get educated there.
Speaker 2:The
Speaker 1:world think it's different. Works But you remember, we've gone through this before China's five year plans to create a domestic chip industry.
Speaker 2:They've been doing five year plans for sixty years.
Speaker 1:I know. They're building that's what I'm saying. And I would argue that it's working. They're not caught up, but they're certainly made, you know, a massive amount of progress. They've made more progress than any other country on Earth.
Speaker 2:Yeah. I don't know. What do you think, Tyler?
Speaker 4:I I think if you wanna think about, like, getting the Chinese addicted to our chips,
Speaker 2:it's
Speaker 4:like how addictive are the chips. Yeah. Because if you can make a comparison between, like, you have the NVIDIA chips and then you have the Chinese or, like, TPU. Right? Because the TPU is, like, in some ways, it's harder to use.
Speaker 4:The open source is not as good. Yep. But if it's just more economical, like Yeah. If the actual hardware is just like a little bit cheaper Yep. Then it doesn't really matter how worse the software is.
Speaker 4:People will eventually move to it. Mhmm. So it's like the the I don't think there is actually that much, like, soft power in the kind of general open source stuff, like, that that in regards to, like, NVIDIA. It doesn't seem very addictive outside of it just being cheaper.
Speaker 2:Yeah. Yeah. I mean, it it at the same time, like like, we are America is very much, like, addicted to Chinese solar panels right now. Like, the Chinese solar panels come here. They're cheap.
Speaker 2:And so we don't wind up buying or building a domestic solar panel industry because just to get anything off the ground, you have to go in and say, okay. We're we're going to deal with having no margin forever, and no venture capitalist can underwrite it, and no private equity firm can underwrite it. And so it just doesn't really happen.
Speaker 4:Yeah. But the Chinese, they do do that.
Speaker 2:I guess they do do bear the cost more. So it doesn't matter. But it's like they wouldn't have to bear the cost, so we're we're imposing a little bit of a cost on them. It's like they they actually have to pay it, whereas, like, they don't. Whereas they wouldn't if we didn't do that, right?
Speaker 2:Because if we don't go in and we sell them NVIDIA chips, then they're like, Okay, well, makes economic sense to back Huawei and fund them. Whereas now, they're like, it's not economically logical to back Huawei, but we have to because there's so much pressure from better chips flooding the market, like NVIDIA chips, that if we don't fund Huawei uneconomically, if we don't lose money on Huawei, like we will never get to we will never get we will never be competitive.
Speaker 4:Yeah. I I think it seems to me that like either way they're gonna fund it, the government, the Chinese government
Speaker 2:I think that's Jordan's point too.
Speaker 4:Really I I don't think it actually matters that much.
Speaker 2:Yeah. I don't know. Well, let's let's move on. But let's also tell you about Adio, the AI native CRM. Adio builds, scales, and grows your company to the next level.
Speaker 2:The United States will allow NVIDIA's h 200 processors, its second best. So this is a this is a change from what Ludnik said. Right? Ludnik said we're not selling the best. We're not selling the second best.
Speaker 2:Turns out we are selling the second best now. Maybe we'll sell the first best soon. Who knows? Well, we should play this clip from Patrick O'Shaughnessy's fantastic interview with Gavin Baker on Invest Like the Best. He's talking about space data centers.
Speaker 2:We had Dalian on the show yesterday talking about space data centers. Dalian still thinks
Speaker 1:Gavin It's new.
Speaker 2:Too far up.
Speaker 1:Gavin knew we needed a new narrative.
Speaker 2:Yep.
Speaker 1:He said after the the fateful BG two episode ended the AI trade Yeah. We needed a new trade. And now we're getting the space data center trade.
Speaker 2:Okay. Let's hear the space data
Speaker 6:most important thing that's going to happen in the world in the next three to four years is data centers in space. If you think about it from first principles, data centers should be in space. What are the fundamental inputs to running a data center? Their power and their cooling. And then there are the chips.
Speaker 6:The inputs to making the tokens come out of the magic machines. Yeah. So in space, you can keep a satellite in the sun twenty four hours a day.
Speaker 2:It's pretty cool.
Speaker 6:And the sun is 30% more intense. And this results in six times more irradiance in outer space than on planet Earth. So you're getting a lot of solar energy. Point number two, because you're in the sun twenty four hours a day, you don't need a battery. This is a giant percentage of the cost.
Speaker 6:So the lowest cost energy available in our solar system is solar energy and space. Okay? Second, for cooling. In one of these racks, a majority of the mass and the weight is cooling. And the cooling in these data centers is incredibly complicated.
Speaker 6:Crazy. Know, I mean, the HVAC, the CDUs, the liquid cooling. In space, cooling is free. You just put a radiator on the dark side of the satellite
Speaker 2:It's fucking golf. And it's
Speaker 6:as close to absolute zero as you could get. So all that goes away, and that is a vast amount of cost. And then
Speaker 1:That's like is about how the satellite
Speaker 2:is gonna
Speaker 1:come more complicated than that.
Speaker 3:What? The
Speaker 1:the dissipating heat in space.
Speaker 2:This is what everyone's fighting about. I'm not exactly sure how it how it plays out, like the physics of it. But a lot of people are saying, like, yes, it's in a vacuum. But because it's in a vacuum, you can't just you can't like, it's it's not as passive of cooling. It's more of a material science problem.
Speaker 2:Like, there's more physics physics problems there. Also, like, I don't know. I feel like you might need some I I feel like you might need some batteries because I think there are there are orbits that are effectively in the sun all the day. But I think that the Earth's shadow, like, hits them not, like, every day, but, like, every once in a while, you'll be you you'll you'll be caught in a shadow, almost in, like, in a what's it called? I don't know.
Speaker 2:Some sort of you you you know, you just get caught in the shadow not every day, but like every twelve days or every thirty days or something like that. And so in that scenario I mean, maybe you may maybe it'd be fine if you're doing inference and you don't and you and you can just turn off the whole system for a little bit and there's some redundancy.
Speaker 1:I just texted our resident spaceman, Dalian. Yeah. I said
Speaker 2:He answered answer this.
Speaker 1:I just said quick take. Yeah. On this. It's urgent.
Speaker 2:It's urgent. Well, we'll we'll we'll get back from him. There there's more to that clip, though. We we should play this because there's a funny part in here. Look at this.
Speaker 6:When you collect connect those racks. Well, it's funny. In the data center, the racks are over a certain distance connected with fiber optics, and that just means a laser going through a cable. The only thing faster than a laser going through a fiber optic cable is a laser going through absolute vacuum. So if you can link these satellites in space together using lasers, you actually have a faster and more coherent network than in a data center on Earth.
Speaker 6:Okay? For training, that's gonna take a long time. It's just because it's so big. But for inference, so let's think about the user experience. When, you know, when I asked Rock about you and it gave the nice answer
Speaker 2:This is crazy though. They've done a podcast together five times. Why is he asking about Patrick? I was like, what is going on?
Speaker 6:Went to some sort of metro aggregation facility in New York, probably within Yeah. You know, 10 blocks a year. There's a small little metro router that's routed those packets to a big XAI data center somewhere. Mhmm. Okay?
Speaker 6:And then the computation was done, and it came back over the same path. If the satellites can communicate directly with the phone Mhmm. And Starlink has demonstrated direct to cell phone Yeah.
Speaker 1:This whole this whole thing I would like to I would like to know how much SpaceX exposure Gavin has. Because if this does become a dominant, at least narrative over the next few years
Speaker 2:Yeah.
Speaker 1:A lot of the people that we know that have computers in space Yep. Are not exactly bullish on data centers in space on a short time horizon.
Speaker 2:Yep.
Speaker 1:We have not we had the founder of Star Cloud on. He's bullish, but I don't believe he has any satellites in orbit. Yep. We've had Delian on. He puts things into orbit.
Speaker 1:He brings them back down.
Speaker 2:Yeah.
Speaker 1:He's talked about having he technically has
Speaker 2:I mean, Delian's in a hilarious position because Founders Fund has a huge position in SpaceX, obviously. But also, Delian has had to do the hard work of, like, getting something in space and probably understands, like, how much of a grunt work it is and how much of a grind it is to get even just, like, something as small as, like, the pod into space. And then he's also seen at Crusoe, like, what a real data center looks like. And the idea of putting something so massive into space. Like, it's bigger than the Hubble.
Speaker 2:It's it'd be bigger than the ISS. Like, what are you thinking about the space data center thing? Have you evolved on this?
Speaker 4:Yeah. I mean, I don't know. To me, it seems just kind of impractical. Like, if you think about if you're doing inference or something Mhmm. Like, how much of the cost of the token is actually in the energy?
Speaker 4:Right? Because, like, I feel like the one of the main benefits of having the the data center in space is that energy is basically free. Right?
Speaker 3:Sure.
Speaker 4:It's it's right there. Sure. But if you think about, like I I think Casey Anwar has talked about this. Like, if you think about an inference when you're doing inference, the the portion of the the cost that's actually the energy
Speaker 3:Mhmm.
Speaker 4:It's, like, very tiny. Yeah. Because it's, like, the chip is expensive. Yep. Or doing like, it's, like, not that expensive.
Speaker 4:Yeah. So it's, like, okay, the cost gains overall are, like, not that great.
Speaker 2:And then
Speaker 4:it's like, well, what if you wanna change the chip to the next generation? Or what if you need to do some kind of, like, mechanical work ignoring how
Speaker 1:a broken cluster would take some sort of intervention to fix as well as the cost per kilogram and fuel costs? Yeah. Just just for context, so Gavin was at Fidelity Sure. And led a $900,000,000 investment in SpaceX at a $12,000,000,000 post money valuation.
Speaker 2:That's amazing. Wow. What a goat. That's incredible.
Speaker 1:Okay. Actually yeah. So may maybe they didn't do the full 900,000,000. Yeah. Grok isn't sure.
Speaker 2:Sure. Sure. Sure. But but, I mean, either way, like, you can you can be pro or con on space data centers.
Speaker 1:And Grok also says SpaceX has been at Trades' largest venture capital position as of 2022, comprising an estimated 30 to 40% of its VC portfolio. Yeah. Feels wild. So, anyways, Gavin is is set to on one hand Yeah. Gavin could know things about space data centers Yeah.
Speaker 1:That the rest of us don't know Yep. Because of his position and and and proximity to SpaceX. At the same time, SpaceX, if they go public next year, would benefit a lot from having a space data center kind of like narrative as part of this.
Speaker 2:It's crazy because the business is so solid. I feel like you don't need a fourth act or whatever.
Speaker 4:Okay. Wait.
Speaker 1:So what
Speaker 4:about this? So if a lot of the gains of space data center are just because the energy is free Mhmm. Why don't we just but then there's this hard part about having, like, different satellites everywhere. Yeah. Put the data center on the moon.
Speaker 4:Mhmm. There's no atmosphere, so you don't get the 30%, you know, reduction in energy from from Sure. The sun, and just put a dead center on the moon.
Speaker 2:Well, don't you get a 50% reduction? Because there's, like, there's a dark side of the moon.
Speaker 4:Like, are you like the moon? You wouldn't put on the dark side of
Speaker 2:the No. I know. I know. But what I mean is that is that our our dark side sometimes gets light from when it's spinning off facing us. Right?
Speaker 2:And so so you only if you're on the moon, you only get light 50% of the time. Whereas whereas if you're a satellite and you're flying out in space and you're kind of orbiting the Earth, like, but at a weird axis that you're not constantly in shadow all the time, you're getting sun, he says, twenty four hours a day. I I think it's I think it's, like, 99.9% of the time. But regardless, it's, like, almost always. Whereas if you're if you're actually, like, on the moon, you don't get sunlight 100% of the time.
Speaker 2:You get it 50% of the time. I'm pretty sure. I don't think it's
Speaker 4:Alright. Maybe there's some Yeah.
Speaker 2:The sun's not the sun's not, like or the the moon's not sun locked. It's it's Earth locked.
Speaker 1:Put up this po pull up this post I put at the bottom of the stack from Joe Morrison. Mhmm. He's over at Umbrace.
Speaker 2:While we pull that up, let me tell you about Restream. One livestream, 30 plus destinations. If you wanna multistream, go to restream.com and we will pull up this next post.
Speaker 1:What we got? Joe says, you just put a radiator on the dark side of the satellite. And he says thermal engineers in absolute shambles right now.
Speaker 2:Yeah. People are not. I don't know. People are so
Speaker 1:says, to be fair, this is a big satellite. Joe says, many big satellites.
Speaker 2:Big satellite? Makes it easier? I don't know. I I don't know.
Speaker 1:Yeah. Think I think you need I think you need like like a lot of
Speaker 2:Yeah.
Speaker 1:Like you need you need basically a lot of mass in order to dissipate enough Sure.
Speaker 2:Heat. From a from a GB 300 or something? GB two hundred? Two hundred?
Speaker 1:Somehow, a s AST Space Mobile Inc. Is up 27% in the last five days. So Excited about this. People are quite excited.
Speaker 2:Yeah. Well, should we head over to Gulfstream news? There's some massive news from Gulfstream Aerospace. The g 400 introduces next gen Gulfstream tech to its class. Sound on to learn more with Gulfstream president Mark Burns.
Speaker 2:How has Mark Burns not been on the show yet? Here we go. Clearly don't have a no render policy over here. They're they're render axing.
Speaker 1:Is they're just not at you you think they could just be adding special effects?
Speaker 2:What do you mean? This is the most rendered video I've ever seen. This looks like it was rendered Okay.
Speaker 1:But here he is.
Speaker 2:2010.
Speaker 1:You think this is real, though?
Speaker 2:Bring Gulfstream performance No. Standards This is not a cabin class. Fulfilling our customers' needs for a product line
Speaker 1:I knew it was too good to be true.
Speaker 2:Enhance every journey. You're like, this is real. Is what it looks like.
Speaker 1:It's far away.
Speaker 2:It does look like a nice plane, though. With Gulfstream's signature combination of range, speed, and cabin comfort, the g 400 will provide unrivaled efficiency. Thanks to the combination of the advanced This is gonna be a hot Christmas gift this year. Absolutely. People will be wondering.
Speaker 2:Think this will be top of this will be under the tree for a lot of people.
Speaker 1:It's not ideal to do like a preorder as a gift. You know? It's nice to have something under the tree, but I think people would make an exception here. So funny. I was talking I was talking with a a mutual friend Yeah.
Speaker 1:Of ours, a a a guest who's been on the show many times. Mhmm. And they're planning to purchase a jet at some point in the relatively near future. And he was so fixated on, like, needing to be able to it's his first it will be his first jet.
Speaker 2:Mhmm.
Speaker 1:And he was so fixated on, like, I need to be able to stand up at at, like like, it can't have like, cabin needs to be big enough that I can, like, walk around freely. I was like, come on. For your first jet Sure. Can you not just, like there is crazy. You know, tolerate, like, slightly lower height in the cabin?
Speaker 1:He was like, no. I gotta be able to I gotta be able to move freely.
Speaker 2:Go straight for the seven forty seven, the BBJ. Yep. Get the the the v I VVIP package, the one that only the Qataris have for some reason. Well, Casey Hanmer Okay.
Speaker 1:I got it back. Post it. I got a text back from Dallian. Dallian, won't read all of it.
Speaker 2:Okay.
Speaker 1:There's a line here. This is from someone else. Dude, all this data centers in space stuff. Also, I'm not gonna read that. You need 1,000,000 a 100 kilowatt SAS to generate a 100 gigawatts in orbit, a 100 kilowatt SATs weighing 1,000 kilogram, including payload, would mean a 5x increase in power density.
Speaker 1:And you can't just not have batteries and slap a radiator on the back, LOL. And then there were some choice words exchanged that I won't read on the show. But anyways, I think we should host the data center in space debate.
Speaker 2:That sounds good.
Speaker 1:We should get a few people on here, somebody to be bullish, somebody to be bearish. I think we want somebody to be bullish that has put things into orbit and taken them down many times. I think it's hard to lean on somebody's take or opinion if they're not actually participating in in space. They're just sort of speculating.
Speaker 2:Yeah. Let's read through a little bit of what Casey Hanmer had to say. He said, here's one idea about SpaceX's next big thing, AI computing inference, again, not training, on orbit. But how the hell can SpaceX do this cheaper than just building more data centers on the ground? From first principles, it's an attractive position proposition because the GPUs have extremely have extremely high value per kilogram and extreme revenue per kilowatt, both of which are relatively expensive.
Speaker 2:That is the value prop somewhat washes out the pain of operating in space. So I took a closer look. If anyone can make this work, it it is a Starlink derived system. So I started with the Starlink v three satellites with some high fidelity CEO CAD below. Orbital parameters, pick a sun synchronous orbit.
Speaker 2:So we're in full kilowatt, 1,400 kilowatt per meter squared sunlight at all times. No need for batteries. Deploy the solar array in sun slicer mode facing full sun, but the edge is pointing in the orbital direction, bottom right, in these images to minimize drag, but the inference Starlink, StarThought satellites don't have to scrape the atmosphere. Being in SunSingers orbit, they'll need to use the rest of the Starlink constellation for backhaul via laser links anyway, and higher orbits actually improve worst case latency, very slightly too high, though, and SSO is relatively full of debris. Let's pick 560 kilometers.
Speaker 2:A Starlink satellite in this orbit has full sun, so the back half is always shaded and relatively cool. The next hottest thing in the sky is the Earth taking up almost half the sky to the bottom left in these images. And so what what does he conclude? He says, seen a bunch of high inclination Starlink launches from the Vandenberg recently, but I don't think any of them were going to sun synchronous orbit. In any case, a ring of inference satellites visible at dawn and dusk running north and south will be awesome.
Speaker 2:If one Starship can launch a 100 tons to LEO, then that gets close to 30 megawatts of inference per launch. A thousand watts is 300 gigawatts. Now we're talking real scale. We're doing one launch of Falcon nine per day. There was Dellians loosely that, you know, we're we're we're now one a day, so 300 in a year.
Speaker 2:So you get to, you know, a thousand over three years if you're on a one a day cadence or if you can wind up getting more. The the math is not that crazy, but it it it does seem like Delian was pushing more towards like, hey, this is maybe ten or twenty years, not the next three years. But it certainly will be fun to follow the story. In the meantime, let me tell you about Cognition. I am.
Speaker 2:The team behind the AI software engineer, Devin, crush your backlog with your personal AI engineering team. Jordy has survived.
Speaker 1:I keep, like, getting the the
Speaker 2:The podcast
Speaker 1:in a can. Can, like, down the wrong
Speaker 2:They should really make a make a drink specifically for podcasters that has no carbonation, that cannot be choked on in any way. Mark Benioff says, LLMs are the new disk drives. Commodity infrastructure, you hot swap for whoever's cheapest plus best. The fantasy that the model is the moat just expired. Mark Benioff having fun on the timeline.
Speaker 2:I love that he's having fun. I love that he's, he's taking shots.
Speaker 1:Don't they have an AI lab, to be clear?
Speaker 2:They were working on Einstein for a while, but I think that they they are very much happy to be a rapper, happy to be a buyer of LLMs at this point. It certainly has penciled out that way. We we can talk more to Mark about that.
Speaker 1:He's doing
Speaker 2:good. But
Speaker 1:Stock's up 10% in the last five days. Let's hear it for Best salesman history. What what do you think about Michael Burry
Speaker 2:What about saying the
Speaker 1:whole industry needs a $500,000,000,000 IPO ASAP?
Speaker 2:So any everyone that knows anything knows this. OpenAI Microsoft is still trying to keep it afloat while keeping it off balance sheet and sucking out the IP. So why do they keep getting funded? The whole industry needs a 500,000,000,000 IPO ASAP. The whole industry needs to go away and sit in corner a for a couple of centuries and think about what's done, says Jeffrey Miller.
Speaker 2:Wow. I don't know. This is people want extreme takes.
Speaker 1:He's This post would go super hard if you don't understand the Microsoft OpenAI relationship.
Speaker 2:Yeah.
Speaker 1:But, yeah. It's just it's just a
Speaker 2:What was what was Netscape's peak revenue? What was what was Netscape's
Speaker 1:I remember correctly, they IPO ed with, like, 15,000,000 of revenue.
Speaker 2:That feels a little bit different. In Netscape's peak peak revenue 1997 was 500,000,000. I mean, we're up at $220,000,000,000 this year for OpenAI.
Speaker 1:Yeah. Their total revenue before IPO for first two operating quarters, Netscape reported total revenue of 16,600,000.0.
Speaker 2:Just odd. I mean, did Netscape have, like, an enterprise business? Like
Speaker 1:That's smart. Yeah.
Speaker 2:I don't know. I mean, even even if there's a yeah. Yeah. Like, even if there's more commoditization, like, it's gonna take it's gonna take time. And I don't know.
Speaker 2:The the dynamics of the of the of the competition here, feels like there will still be a lot of value even if even if there are if it is somewhat commodity infrastructure, it's like, you know what else is commodity infrastructure? Like, AWS, GCP, Azure. Like, you you get you get a, you know, an like, a a server with some hard disk on it. Like, that is commodity, and yet they all have 30% margins. And they're all massive businesses.
Speaker 2:And when AWS when Amazon broke out AWS as its own line, it was like an IPO of its own company because it was so big. It was such a massive business. And it should be completely commodity because it's just servers in a data center. And yet Yeah.
Speaker 1:It's it's interesting. Yeah. It's interesting too. I mean, Burry has has, you know, positioned himself of of just hating any company that's overheated, but ChatGPT having close to a billion weekly actives. Ultimately, even if they just compete in search, right?
Speaker 1:At least it's a, you know, multi trillion dollar opportunity. Whether or not they, you know, fully execute against that is another thing.
Speaker 2:Are you buying are you buying the IPO timeline of Cohere, then Anthropic, then OpenAI? Or do you think they will be sorted in a different in a different pattern? What was the order? Cohere first. That's Aidan Gomez's foundation model lab.
Speaker 2:He is, of course, on the transformer paper, also a dripped out technology brother
Speaker 1:That's right.
Speaker 2:With a fantastic set of outfits. Then then Anthropic and then OpenAI. OpenAI third. The that's the rumor.
Speaker 1:Yeah. Hard to say. I have no idea how the market will react to Cohere.
Speaker 2:Yeah. Cohere has has has shifted more into, like, the business, the enterprise market, fully enterprise.
Speaker 1:Not in the timeline at all. That could very well be intentional. Yeah. But it it would be, it'll be interesting how much excitement they can build around the IPO, assuming they're losing a lot of money. Yeah.
Speaker 1:Assuming the enterprise is really competitive, and they're competing with Anthropic and OpenAI and I mean, bad. Source models.
Speaker 2:If the narrative changes to the point where, you know, this this idea of of every enterprise is going to need a a, basically, a custom LLM that's fine tuned or pretrained on their data like what AWS CEO, Matt Garman, was talking to us about, about these pretraining checkpoints where you can go in and say, okay. I have a business, and I absolutely do not want to up upload my data to Anthropic. I don't wanna update it. I don't wanna upload it to OpenAI, but I want a model that understands my business' data at a core level in the pretraining step, and Cohere can offer that and so show traction there, that that feels like that could be the next wave. We've talked to, a number of founders that are are building those sort of, like, custom pipelines, and there's not really a public company that is even anywhere in that narrative.
Speaker 2:And that narrative does feel very nascent. It feels like it has not percolated through the public markets yet. So I don't know. It it it could be it could be, you know, exciting for for for them. Well, let me tell
Speaker 1:They've raised they've only raised 1,400,000,000.0.
Speaker 2:I did not realize the reason.
Speaker 1:Sorry. 1.5. 1,500,000,000.0. 1,540,000,000.00. Very modest amount.
Speaker 1:Especially when you have seed stage companies raising half 1,000,000,000.
Speaker 2:We got one of those. Showed it in Dean Rao. We're excited.
Speaker 1:Joining Let's go. He kicked the hornet's nest on He did? Timeline. What did he do? A little bit.
Speaker 1:People were people were pushing back.
Speaker 2:Because of his his his racing history?
Speaker 1:No. No. No. Oh, people people show respect. Love that.
Speaker 1:That's good. Show massive respect. No. But I think I think Jack at Slow was saying that Nvidia was valued at at 500,000,000 when they IPO ed. Of course, that was very long time ago.
Speaker 7:Mhmm. Mhmm.
Speaker 1:But, anyways, people people were just saying, like, it feels pretty potentially overheated, but we have Naveen coming on the show today, and I'm excited to hear about the opportunity from him directly.
Speaker 2:I'm ready to say it's overvalued unless he's unless he's built a company previously and sold it.
Speaker 1:Twice, maybe.
Speaker 2:Yeah. Twice. If he's done that, then he's then he's off the hook. But he's gotta prove it to us. Because if if he's just some new grad, some dropout.
Speaker 1:Like a Waterloo
Speaker 2:Yeah. If he's just if he's just like Dropout. If he shows up on the show and he's just like, yeah. I had this idea in my garage. I didn't go to school.
Speaker 2:I've never done it in business before. And now I then I'm gonna I'm gonna call him out, and I'm gonna say, you're overvalued. You you raised too much money. But if he can prove to us that he's done it once or twice before, then I'll let him off the hook. Yeah.
Speaker 2:I'll let him off the hook. Anyway
Speaker 1:I think that's fair.
Speaker 2:Let me tell you about Privy. Privy makes it easy to build on crypto rail, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. Let's read the semi analysis post. It says, important a common misconception about OpenAI's upcoming custom chip is that since it's a custom chip, it won't be flexible and will be a data flow machine. OpenAI has recognized that the 100 x efficiency gains for training and inference happen at the algorithm layer, and the hardware chip needs to be flexible enough to accommodate these algorithm changes.
Speaker 2:We went from just pretraining transformers to now doing RL post training on transformers. We went from dense transformers to mixture of expert transformers and soon ultra sparse transformers that will have four active experts per token out of 2,048 total experts. We went from casual MHA attention to MQA and GQA to attention sync, sliding attention to now even learn sparse attention despite AI tourists think. The chip OpenAI is building with Broadcom will be far more flexible than TPUs, interesting, despite most of OpenAI's chip team being poached from Google's TPU team. The the semiconductor horse race continues to fascinate me, and I'm so glad that we have, the good folks over at Semi Analysis coming on the show regularly to help us understand it.
Speaker 2:I always enjoy talking to them. And we have two two folks from Semi Analysis joining the show next week. So we will be Can't wait. Having a great time. Let me tell you about Turbo Puffer, serverless vector and full text search, built from first principles in object storage, fast, 10 x cheaper, and extremely scalable.
Speaker 1:Of course.
Speaker 2:That's right. It's scalable. A hedge fund was ordered to pay a bonus to a trader who made 97% of its revenues. This is hilarious because when I read this at first, I thought it was he had made he like, his target bonus was, let's say, 10,000,000, and he brought in 9,700,000.0. And so he was 97% of the way to his bonus.
Speaker 2:And they were like, you didn't you didn't hit your bonus, buddy. You you don't get the bonus at all.
Speaker 1:So And
Speaker 2:I was like, oh, that sucks, but, like, that's kind of the deal that kinda makes sense. But, Evolution Capital Management has to pay him because,
Speaker 1:he So a hedge fund that was sued by a trader for refusing to pay a performance related bonus despite him making 97% of its revenue has been ordered to pay him 5,400,000.0 plus interest by the High Court
Speaker 8:The
Speaker 2:High Court.
Speaker 1:In London. When I read the headline of the story, I expected it to not be in the mid 7 figures. But
Speaker 2:What'd you expect?
Speaker 1:Mean, I I was hoping at least 8. Yeah. Hoping at least eight.
Speaker 2:It's not getting a g 400 off of this. Come on.
Speaker 1:Not even close.
Speaker 2:Not even close.
Speaker 1:Robert Gagliardi sued his former employer, Evolution Capital Management in London, alleging that it acted in bad faith by denying him a 7 and a half million dollar discretionary bonus Mhmm. After he had generated more than 60,000,000 for the firm. Wow. Wait. Does this mean that every other trader Lost money?
Speaker 1:Was just Something
Speaker 2:like that. I don't
Speaker 1:know. Heavily
Speaker 2:So he was at the fund. Brief stint. He made 12,000,000. He was already paid 7,000,000, including a $625,000 signing bonus. Base salary was 425 k and a $6,000,000 new issue bonus.
Speaker 2:So he he needs to get out of this. He needs to go into AI research ASAP if he wants to be putting up real numbers.
Speaker 1:Yep.
Speaker 2:This is rough, but there are some there are some harsh words here, he said. Gagliardi, a block trading specialist, alleged that he was told in early twenty twenty one that a return of $10,000,000 over the rest of the year would be an excellent result. When Gagliardi asked the fund's founder, Michael Lurch, for the payout in 2022, he responded, I'm not going to pay you the bonus. F you sue me.
Speaker 1:So Gaggley already did. Yeah. And he won.
Speaker 2:He did. He did.
Speaker 1:Although Evolution did not dispute his extraordinary returns, the fund argued that the damage done to its reputation as a result of dealing with a US SEC probe into some of Gagliardi's trades at his previous employer outweighed his performance and that the bonus did not need to be paid because it was discretionary. There's no question that Mr. Gagliardi made exceptional profits for the funds and Mr. Lurch frequently praised his performance in that respect. Had Evolution properly performed the contract, Mr.
Speaker 1:Gagliardi would have received a discretionary bonus of 5,300,000.0. The judge also said that Gagliardi was Lurch's prized asset at Evolution. That's a good goal for everyone that is maybe working at a company, become the prized asset. Hopefully, that doesn't result in
Speaker 2:For sure.
Speaker 1:In a lawsuit like this. But they're feeling they're feeling gagliardi and his lawyer are feeling very vindicated.
Speaker 2:Well, we have our next guest here in the Restream waiting room. Let me tell you about Gemini three Pro first. Oh. Google's most intelligent model yet. State of the art reasoning, next level vibe coding, and deep multimodal understanding.
Speaker 2:We have Aaron Ginn, the CEO and cofounder of HydroHost. Good to see you. It's been too long. How are you doing? Welcome back.
Speaker 9:Been alright. Yeah. Yeah. I just got back from Southeast Asia. Oh, yeah?
Speaker 9:Well yeah. And despite what some of the critics were were saying other than I wasn't smuggling anything, I should have been smuggling.
Speaker 2:So Are you getting accused of smuggling? That is wild. Well, give us the give us the update on your interpretation of the h 200 deal, where things landed, where you think the next debate points will be. I'd love to hear that. Yeah.
Speaker 9:Like, the I mean, as you know, I've said a number of times that the even though I am a China hawk, that we have to realize that Trump fundamentally is a pragmatist. Sure. And he is not interested in the ideological warfare, and I think that him taking over the Republican Party proves that. And the orientation of reshoring to America, which we all know, like, I wrote one of the first arguments for a new Monroe doctrine. So now you saw that the Department of War has been putting that out.
Speaker 9:The White House has been very clear that it's trying to reshor its emphasis back to, LatAm and South America and to build up the ring of fire from, you know, South Korea down to Singapore essentially, to be more sovereign. Essentially, NATO, as we've approached ourselves with, having them, spend their own money to support their own military Yeah. That the expectation is that Asia would do the same thing. So a deal with China on trade was always on the table and was very likely because both parties actually want this to happen. And and I I do believe that with, like, with Huawei that that, yes, it is the national champion, and they do want to proliferate it, but they are but they're more interested in selling it to other people and promoting themselves as a means of trade like they did with their belt and road initiative than they are for internal uses.
Speaker 9:Like, that that's just kind of my estimation talking to people in the region, and Miller just came back from there. So so NVIDIA being in in that region and being sold, particularly China, I think is important for American interests. Whether it's an h 20 or b 30 or h 200, I'm kind of less opinionated on. I just think that we need to be there because half of all AI engineers are Chinese, and and we can go through any list of anyone scrolling at the bottom of this, you know, this this broadcast, and you can see that the probably the majority are Asian descent, you know, minimally. And and as America, we just have to realize that, like, we're good at certain things, and we're not good at certain things.
Speaker 9:So we're very good at commerce. We're very good at free markets. We're very good at enterprise. We're very good at regaining the default framework, the rules of the road for the role to transact. I I think when it comes to trying to do these other strategies, I think we're we're not very good at it, and we just kinda have to realize that also that the president of United States is interested in making deals.
Speaker 9:He's not interested in trying to get involved in other people's business.
Speaker 2:Yep. Let's I mean, there's, a million different pieces here, but, let's start with, the fact that there are so many fantastic genius AI researchers in China. Mhmm. Why is it in the why is it in the interest of The United States to help them? Is it that if they start developing on NVIDIA chips, it gets the e the Kudo ecosystem stronger, and we will actually get more open source software basically for free from China that will come back to America and make our AI efforts stronger?
Speaker 2:Or is it we want them to be familiar with NVIDIA when ultimately they come over here on o one visas and start working for American companies?
Speaker 9:I I I think that that's too narrow focus. It's it's sort of like Boeing. Do you want Boeing in China?
Speaker 2:I mean, yes, because I want Boeing to be a thriving American business. I want Boeing to maximize profits, and I don't see Mhmm. The the seven forty seven as a piece of I don't I don't see this the seven forty seven as a nuclear bomb.
Speaker 9:The yeah. I mean I mean, I I think that that that's the key priority, right, on the second one. It's like, you think that an h two h 200 is a is a I don't know. Like a like a some form missile technology.
Speaker 2:Yes. Yes. Yes. Increasingly, I increasingly, I I I have I have backed off the idea that that these chips should be viewed as as weapons. Like a defense technology.
Speaker 2:Yes. Yes. Yes. I I backed off that.
Speaker 9:Yeah, baby. Because I view it much more like telco technology.
Speaker 2:I agree.
Speaker 9:And and and we're like and we did not win at that. We lost that. And and that's because we didn't offer the world an alternative. We just were like, hey. Don't use ZTE.
Speaker 9:Don't use Huawei.
Speaker 3:Yeah.
Speaker 9:And then it's like and they were like, okay. We'll give us something else. And we're like, well, I don't have anything to give you. Right? Yeah.
Speaker 9:Well So sort of thing is We're we're
Speaker 2:we're we're of separating things out here because on on the one hand, like, there's give the rest of the world something, and then there's other, which is like give China something, which is like there is a different way. Right?
Speaker 9:Yeah. No. No. No. That that's true.
Speaker 2:Because because, like, I'm totally down to go belt for belt and road for road all over the all over the globe. Right? Mhmm. But the question of, like, can like, is there any world where we could get a different cell phone tower deployed in Beijing that's not a Huawei tower? Like, no way.
Speaker 2:Right? This is impossible.
Speaker 9:But but but then you go back to the fact of, like, you're right. Like, you know, all metaphors fail. That's why they're metaphors. Sure. So the the the other exogenous factors, yeah, I think too that's different from telcos is the fact of, like, the level of I AI engineering talent.
Speaker 9:In fact, like, it's funding in isn't, like, you know, propelling forward American AI. That's just the reality of of where we are. The the second is the fact of, like, they do not have the founder capacity or the foundry skill set to produce similarly level at scale. Scale absolutely is true. Yeah.
Speaker 9:They they could be at some point be approaching some form of, like, five nanometer process. Yep. And there's, like, rumors around that. So and and that's a little bit of an obsession because it's it is a barrier of technology that, like, we've I should say the West has instilled that, not particularly America, Japan, and the Dutch. But but that's they're we don't want to fund that enterprise.
Speaker 2:Yep.
Speaker 9:And I think that that's where the pragmatism comes into play. It's like if we don't offer them something, they'll just do it themselves. And I'd rather take money from them and build our own sort of reshoring in America.
Speaker 1:But but to be clear but to be clear, they're still gonna do it everything themselves. Right? No. I don't think take them. How how does
Speaker 9:I don't think so.
Speaker 1:You think that China will happily be dependent on foreign
Speaker 2:mean, power last time there were rumors of this sale, they they they were putting out press releases saying, like, hey. If you're gonna buy NVIDIA, you gotta prove it. You you gotta prove that you need it. You gotta prove that Huawei won't work. It felt like there was a lot of pushback from the CCG.
Speaker 1:Don't believe I don't believe
Speaker 2:buying NVIDIA. I don't
Speaker 1:believe at all that they're just gonna be like, thank you for the h two hundreds. We're gonna stop investment in our domestic, chip, manufacturing.
Speaker 9:Yeah. So but so but but the the problem is, like, in that flow Mhmm. One, you assume a level of CCB control that's just not realistic. Sure. That that that it's it's a country of, like, 1,300,000,000 people with very successful
Speaker 8:Yeah.
Speaker 1:But they've ripping five year they've been ripping five year plans for over and over and over and over to
Speaker 9:to I mean, like like yeah. But but that stuff doesn't matter. Like, you have to understand that, like, that there's lots of propaganda that I think that they say that they actually never happens in real world. Go look at Africa. Go look at all the airports and see actually how what actually happened.
Speaker 9:Go look at the ports. Yes. There are certain example of the ports actually we transfer, like, Sri Lanka port. Sure. But you go look at the rest of the ones, like, they didn't happen.
Speaker 9:So so they say lots of things, but the question is, like, what matters in terms of the national security orientation of America? And I would much rather take money from their economy and put it back into our economy than trying to give them both the demand side and the supply side argument. You're you're making a supply side argument, which I think very much how the CCB thinks about the world, which is like, oh, we need to build our own JITSA plot. Mhmm. But in the orientation, I think that, Jordy, you're more biased towards, which is like, well, let's also give them a demand argument.
Speaker 9:I'm like, no. I don't wanna give them the demand argument. Like, like, I I I would rather mitigate that as much as possible to say that, yes, like, they have, you know, probably, like, five or six multibillion dollar operations that, like, wanna have these types of chips that are not military oriented. And by applying these export controls that are overly extreme, you're basically giving them a demand argument as well. And I'm saying, I don't want the demand argument.
Speaker 9:Like, if they're still gonna have a supply argument, that's fine. Like, go buy a BYD, you know, car, and hopefully it doesn't catch on fire. Like, it is a so, like, if you know, like, like, just because BYD Are you
Speaker 1:bear are you bearish on BYD? You're you're they're catching strays right now.
Speaker 9:I saw one of them on fire in Hong Kong. No joke.
Speaker 2:Yeah.
Speaker 9:I have a video of it. But I I
Speaker 2:texted you. Wait. Let let yeah. Let's go let's go to the cars and and talk about the what we were debating earlier. If if you're if we are just talking about cars instead of chips, and, of course, there's gonna be a metaphor here.
Speaker 2:But if we're just talking about cars and we want I mean, and and the frame is, we're we're all China hawks, and we're putting on, like, rah rah. We want America to win the electric car race. Should Tesla have sold Teslas into China? Because it feels like they did, and then China was able to make the a whole bunch of cars that compete directly with Tesla and are it feels like maybe better, maybe cheaper, maybe better and cheaper on some sort of Pareto frontier. If if we run that experiment, we try and think through the counterfactual.
Speaker 2:If Tesla had never sold a car in China, where would the the the Su seven be? The jumping Huawei car, the Xiaomi car, the BYD Han, the one that has the karaoke machine in it. Like, there's some crazy cars. Would those exist? Would they be delayed?
Speaker 2:Would they be would they happen faster? How how do you think about that? Mhmm.
Speaker 9:Yeah. So so I I think this is where there is a reality, right, which is that they they're gonna copy. And I I don't think that that is something we can change
Speaker 2:Yeah.
Speaker 9:Speaking as a half Chinese American. So so that that it's just the nature of what what is the way they think about Competition.
Speaker 2:It's just competition. Yeah. You're gonna wanna Yeah.
Speaker 9:They view competition as copy.
Speaker 2:Yeah. And and and importantly, like like like, the there there's one world where, you know, they need the industrial power of, like, 1,000,000 h two hundreds. And there's another one where if you give them a single h 200, they can tear it down and, like, try and reverse engineer it as much as possible. And then they can also do all the learning curve stuff on their on their companies, on their national champions on Huawei.
Speaker 9:I I I think it's it is reasonable in terms of an argument against exponent roles if you view this as a means of trying to slow down their own model level progress. Mhmm. Like like, I can at least cogently understand what's being presented. I do not agree with this from the perspective of hardware engineering. They they because, again, if you don't have the ability to make a car Yeah.
Speaker 9:Then then what's the risk? Right? Like like like, just mitigate their ability to make a car Yeah. Which is generally been my my my position. It's like, I I wanna mitigate their ability to make chips.
Speaker 9:And and and so in a world where there's a demand and supply, right, they in SCCP, because they're they're communists, so they love focusing on supply solutions to everything, which, by the way, doesn't work. I mean, we're we're all free marketers here. We're all biased towards Austrian. Like, we know that their philosophy of the world doesn't work. So so they they can talk about supply side engineering all they want, but, again, they they don't have the ability right now to aggressively address their Lefacre programs.
Speaker 9:And so in that world, I want to just win because if they can't if they if we remove the demand stuff because all their companies wanna use NVIDIA. Mhmm. If we remove the demand stuff, we're we're removing one of the biggest parts the that would give them justification to accelerate on the SMIC side. But if they're just gonna go and play around and be like, hey. We're gonna dump money into SMIC because we want you to use local, but we're everywhere.
Speaker 9:It's it's like the fast food thing of, sure. They have local fast food, but McDonald's and Starbucks is fresh. And and so, like, that that that's more how I think about it. They're they're still gonna try to copy, but if you don't give them the ability to actually have the toolkit Yeah. Then it it's a much safer transaction.
Speaker 9:And I think I think I think, John, what what you said is is important is that the the debate is highly mixed up between you think an h 200 is an f 35. If you remove that as an a prior, then the world becomes significantly simpler to understand. But if you view what you know, the the h two hundred block war or whatever as a as a patriot missile, then then, like, I there's no real place to, like, have a conversation that's irrational.
Speaker 2:Yep.
Speaker 9:Then, you know, like because my view is, like, you know, I I I don't have as much of an opinion on, you know, GB or b Yep. That kind of, like, debate. I I just I think American companies need to be in China, and because we want the ability to not only address the second largest economy in the world and, like, have access to like, that is the Trump position, and that's my position. Like, we should sell to the world, we should be an export nation. But but the other is, like, China is going to copy, and it's just part of the equation.
Speaker 9:Wait.
Speaker 2:Flip flip flip around for me and give me the sorry. I I I wanted to
Speaker 1:hear flipping.
Speaker 2:I I I wanted to hear more shifting to domestic semiconductor supply chains. What is your theory of the current horse race between Tranium, TPU, and NVIDIA? It felt like NVIDIA was dominant last year, the year before. Then we were hearing rumblings of like, hey. Maybe AMD is getting it together on the software side.
Speaker 2:Hey. Maybe this TPU thing could be used to train a decent model. The DeepMind team seems to have been able to do that. Mhmm. Are we moving towards more of an oligopoly?
Speaker 2:What are you thinking about how the the, you know, American semiconductor AI accelerator horse race is playing out?
Speaker 9:I I my my view from the the on the GPU side, I don't really know who would buy that. Mhmm. As like just like a product. I I think Meta is the closest one that kind of makes sense, but why would any of the cloud companies do it? Because they are in a position right now trying to build their own, and they're trying to delever.
Speaker 9:Why they're building their own? They're trying to delever from NVIDIA. Yep. So why would they want to commingle themselves with the actual direct comp of you know, like a a direct competitor and sell their stuff? And and then there was a there was a yeah.
Speaker 9:Like, like, there's there's also this, like, weird zealotry around TPUs that I may make because we had Thanksgiving. This isn't gonna happen. But to say that, like, there's, like, minimal switching costs is absolutely absurd and insane. There's significant switching costs. And and so if you're of the mindset of, like, hey.
Speaker 9:Well, we can we have all this CapEx, and it kinda makes sense. And I I that that's justifiable. Like, I can, like, understand that. But that's, like, the same reasoning that you could apply to the multi cloud argument, and we didn't really see that happen at all Mhmm. Basically until GPUs.
Speaker 9:Now now you're seeing much more multi cloud products because GPUs made everyone multi cloud. So and if you were multi cloud before GPUs, you were as a function of an acquisition, it was not generally intentional. Mhmm. So so I think GPUs makes sense for Google just as a, like, vertically integrated strategy because that's what they like to do. Yep.
Speaker 9:And and then, like, there are probably some other companies that maybe, like, maybe Apple, I could maybe see that because they love low cost chips just in general. But I don't really see it breaking beyond Google because I just don't know who is really incentivized to buy that. And then I I agree with you on AMD side. Their software's getting better. I think that's just
Speaker 8:the
Speaker 9:natural orientation of of just they they like, Leesuit is the most reasonable because a competitor to NVIDIA's general purpose computing dominance. I'm pretty bearish on Tranium. And GPU is just from a from a chip perspective, I'm bearish on. But as an integrated strategy, it it, like, it makes sense for them as a company. Okay.
Speaker 9:But NVIDIA is not really it. It's
Speaker 1:gonna We're be running out of time, but I wanted to ask you about one other thing. There seems to be a number of people trying to manufacture a space data center pump. Oh, yeah. As somebody even NVIDIA was posting from their corporate account some renders of a company called Star Cloud, some space data centers that they're working on. As somebody that has spent a lot of time in data centers or around data centers all over the world, What are your timelines?
Speaker 1:Are we talking Gavin Baker was saying, the most important thing in the next three to four years is data centers in space. We've had plenty of people on the show that believe that it's an exciting possibility or opportunity, but maybe their timelines are more like ten to twenty years. How do you think about it?
Speaker 9:Most of the stuff that has been announced will not happen. There'll be Like, then think of it as, like, a 50%. So if they announce, like, five gigawatts, probably gonna be, like, two. Right? And and because this stuff's really building this stuff is actually quite hard, and America has not really behaved in a manner to me that believes it's that series of a of a thing.
Speaker 9:Like, is it this is a very niche issue. And one one reason why the the going by, say, h 200, the reason why it's making less noise now is because it is it is a niche issue. It is something that maybe a couple 100,000 people really care about. And and the data center, it affects even though it does bring jobs, it does bring the these types of opportunities to cities that previously never had a position to support data center, which is great. It is really kind of a narrow set of people that are really benefiting.
Speaker 9:And if you go look at you can go read the bills that are in consideration across America. I it the America is not acting like it's very serious about building data centers. The power profiles, the approvals that are happening, like, it's it's just not happening versus the other countries. They they're generally more serious about it. And many of these announcements that you as as Jensen disclosed, they're they're they're fundraising announcements.
Speaker 9:They're actually not actual projects yet. Mhmm. So so they're they're trying to let's say they have an equity already lined up, but but the equity generally is, like, 10 to 15% of these projects. You gotta go raise the other portion of
Speaker 2:it.
Speaker 7:Mhmm.
Speaker 9:And and the offshake side, outside of the hyperscalers, there's not a lot of confidence the credit side has outside of the the the the those those hyperscalers. So so the so the debt side of the world actually has been quite conservative on the these these and the private credit. So that that's why I never really thought, like, you know, the clinical bubble talk and bursting. It it like, we're we're nowhere really there if you go talk to lenders. Like, we're we're nowhere even close.
Speaker 9:The type of capital being deployed has actually been very conservative. It's been aligned with contracts, has been associated with high paying credit, you know, top tier customers. We're not seeing, you know, the Jordi Credit Union in the middle of, you know, SoCal doing black you know, b 300 loans. And what happens? And I'll be like, yeah.
Speaker 9:You know?
Speaker 1:Yeah. Yeah. We're working on it.
Speaker 9:Yeah. Like, with the so so so so that that's that that's where if you look at the legal side, if you look at the power profiles, if you look at what's happening and the political nature of it, I I don't I don't think many of these projects actually scale to what they they need to. But I do agree with Gavin that, like, we actually do need to get serious about it because it's not like the world will be worse off with more power, more compute capacity. If everything all of all those things get cheaper, our entire life gets better. And just as it's cheaper today to get a banana than it was a hundred years ago, and that means there's more bananas.
Speaker 9:That means people consume more bananas. So so the logic will still apply for Let's go after bananas.
Speaker 2:Yeah. They love bananas.
Speaker 9:I'll give you a lamp for that.
Speaker 2:I love banana.
Speaker 1:Great to see you, Aaron. Software is eating Thank you for time.
Speaker 2:Software is eating bananas. Thank you so much for coming on the show. We we always we shouldn't have booked fifteen minutes. We should have booked two hours because it's always a fun chat. Thank you so much for taking the time.
Speaker 2:We'll talk to you soon. Have a great rest of your day. Merry Christmas. Merry Christmas. Merry Christmas to graphite.dev code review for the age of AI.
Speaker 2:Graphite helps teams on GitHub ship higher quality software faster. What's under the tree this Christmas? It's Graphite dot dev, baby. Put it in your it's a great stocking stuffer. Up next, we have Matt Kalish, the cofounder of DraftKings.
Speaker 2:He's a board member at DraftKings. He's also a board member of Faze Media. He's the founder of Hardscope, which launches today. Let's bring him in to the TBP and Ultradome. How are you doing, Matt?
Speaker 2:Great to meet Thanks so much for taking the time.
Speaker 1:Hey, guys.
Speaker 10:How's it going today?
Speaker 2:It's going fantastic. Merry Christmas. Good to
Speaker 3:see Merry Christmas.
Speaker 2:Please, for those who don't know you already, I'd love to kick off since this is the first time on your show with a little bit of your background. You have, one of the more interesting backgrounds with DraftKings. How do you tell a story in, you know, in just a few minutes?
Speaker 10:Well, I had a couple friends from some early corporate jobs in my career. You know, I came up through analytics, technology, and then over the years moved more into marketing. And, you know, I met some of, you know, my two partners, Jason and Paul really at those jobs. You know, Jason at Capital One, we were early stage business analysts and then went to a company called Vistaprint. Where we learned direct marketing.
Speaker 10:And, you know, we all had this entrepreneurial bug and we're really looking for the right opportunity to go and spin off and do something kind of in the startup world, which, you know, we had no experience doing, but, you know, we we had that drive. So Yeah. We looked at a million ideas and then DraftKings kinda stumbled along. We just felt like there was a lot of people that like predicting things in sports, but didn't really have a great way to do it. So that was back in 2012.
Speaker 10:We launched the daily fantasy sports platform. Over the course of a few years, grew that to over 10,000,000 registered users. And it became just kind of a big cultural phenomenon. And then come 2017, that's really when sports betting started opening up in The US. So DraftKings was in a really great position to extend our product, launched a sports betting platform first in The US outside of Nevada and became a market leader in that space.
Speaker 10:And then over the years, just kept developing out the product, went public in 2020, and, you know, it's been a really amazing ride. I mean, a growth story that, you know, I'm really proud of.
Speaker 2:Yeah. Take me through I I'm sure there's a ton of questions that we can kick around around prediction markets and sports betting and what's going on there. But first, take us through the launch today. Take us through hardscope. How are you positioning that?
Speaker 10:Yeah. I had a fourteen year, run at DraftKings that, you know, we've seen it all, the ups and downs and, you know, built a really amazing team over the years. I have, you know, the type of team at DraftKings where if I don't come to work for a week, things are amazing and fine. I'm telling you, like, the caliber, the people, the leadership there, the team has been built out just so well. And, you know, I'm a builder at heart.
Speaker 10:I like starting things. I like participating in industries that are disruptive, you know, that are in the middle of a lot of displacement change. And a couple years back, I worked with one of the original founders of Faze to buy the company off the public market and bring And it back it's kind of a space that I'm just super intrigued by the massive amount of disruption in media moving from traditional forms in the creator led to community, this sort of decentralized media through social channels. And I've also found it really intriguing how content discovery has changed so much, like short form clipping and, you know, the TikTok, the shorts. That's how people are really finding content these days.
Speaker 10:And Faze is really one of the best in the world at that. So just kind of jumping in, rebuilding the business side of that team and kind of relaunching and bringing Faze back to number one in creator media. That was, you know, initial focus. And I decided to leave DraftKings and transition out to do this full time to launch Heartscope, which is kind of the platform that Faze operates on. It's a talent and brand platform to access the creator economy at scale, and it's a space I just think is tremendously underserved and a really massive market opportunity.
Speaker 10:So, you know, I felt like it was the right time for me to go all in on that, and I'm really excited to be doing it.
Speaker 2:So what's the what what like, walk me through how to actually use the pro, the the product if you're a brand. Does it feel like just autonomous marketplaces where brands are meeting creators? Are there Yeah.
Speaker 1:I guess I guess a better question is like involved. Probably been
Speaker 2:How much hand holding is going on?
Speaker 1:There's there's been maybe, hundreds of attempts at building these sort of like brand creator marketplaces. A lot of them, haven't, some have turned into great businesses. There's been
Speaker 2:Well, we were just talking
Speaker 1:about Little little to know like venture
Speaker 2:Friday, ventures ShopMise is a is is, like, sort of in the same space. Correct?
Speaker 1:Yeah. A greater commerce tool, but this is more advertising focus. Is that is that correct?
Speaker 10:What's special about Hardgrove is the the impossible part is building the actual valuable content assets that, you know, brands want to be a part of and reach the audience. And that's what our team for talent does really well. It's a full stack operating platform. Like, you literally don't need any other resources. We do it all in house production, socials, clipping, all the distribution side into commercialization, like brand partnerships, ecommerce, access to capital and venture for initiatives.
Speaker 10:And the reputation really of Faze as the number one creator collective in the world is the proof. I mean, that's a group that operates with this team on this capability set. And so Hardscope is really bringing that to new creator collectives in more verticals, really high potential talent, and platforming them to really make the most of, you know, the opportunity that they have, which is really unprecedented. Like, the level of power and control over the content, their community, and how to commercialize it that talent has today, It's it's a totally new age, really. And some creators have built out great teams, but most really have underrepresented teams in particularly the commercial side.
Speaker 10:You know, like, do I take my great content and then maximize the opportunity as basically the CEO of a media business? And
Speaker 1:So so so yeah.
Speaker 11:Let me
Speaker 10:for talent.
Speaker 1:I I yeah. I think I I think I was a little bit confused. So you're effectively like a back office for personality personalities, content creators, whatever you wanna call them, to help manage everything from ad ad sales to editing to clipping content distribution, effectively social media management, like kind of, am I saying that correctly?
Speaker 10:Yeah. I mean, the the landscape is laden with middlemen. Let's just say, like, the LA ecosystem is unbelievably brutal. There's middlemen for everything, and we're trying to provide really a full stack solution where you don't need all of this noise to run a really successful business. You need a great business partner, a great team, and we've proven that with the operations of FaZe Clan and how that's come back in, you know, prominence as the number one creator collective.
Speaker 10:I mean, you're talking about a group that had the top seven accounts on Twitch last month that's growing in an unprecedented rate and people thought it was dead two years ago. So like we came in relaunched the brand and totally turned that around. And that is the proof, that's the proof of concept really that I think is attracting so much interest from other talent and other verticals. And you had asked about the brand side, that's more my background. I was a large media buyer at DraftKings.
Speaker 10:We have, as you've probably seen a lot of advertising out there in the world, probably bought every channel you can think of. And the one channel that's hard for everyone is creator direct partnerships.
Speaker 2:Yep.
Speaker 10:Nobody does this well. And unless you are a pure play specialist where your number one marketing strategy is through creator, you probably are doing this not so well right now. And traditional agencies who try to tack on things like YouTube buying or other, you know, creator products tend to not do that very well at all. So, we're seeing a lot of opportunity on the brand front to be almost like a new kind of agency of record, right, where we can focus just on creator direct partnership, help kind of bifurcate that channel out from a lot of people just lump it in with audio or other other kind of traditional definitions of channels. The opportunity is really breaking out Creator Direct into its own lane, and maybe it's two or 3% of media mix today, but the landscape is changing.
Speaker 10:This channel might be 30% of people's media mix in the future. The Unilever said it's over half of their media mix in the next year they're planning. So, like, a lot of companies are seeing like, we are just not reaching Gen z audiences that are diverse 30 are just not watching traditional media, and this is the way to reach them.
Speaker 1:Yeah. Makes makes a lot of sense. How how are you, how are you, financing hardscope? Do you have outside investors? Am I hearing it correctly?
Speaker 1:You effectively took Faze private, and is it the same entity? I'm curious like, how you're planning to scale. Is this something that you wanna just operate profitably indefinitely? Or or is this, you know, something that you'd one one day wanna, you know, take public again?
Speaker 10:Yeah. Look, I mean, I've been funding it. I led the acquisition initially, and the biggest reason was it was kind of a mess. I mean, the public company of Faiz was in really rough shape, and it needed a lot of work. And putting in the two years to really rebuild the entire operation.
Speaker 10:And also to relaunch the brand of Faze, have that in such a great place today, that was the upfront investment I viewed as getting the ball rolling, kind of building the initial momentum. And, I didn't think it made a lot of sense to, you know, involve a ton of people in that. I thought it was something we had to prove as a team here. So there's no noise in the company. There's no outside investors funding.
Speaker 10:I do think in this next stage now that we've launched as we scale up, there's a lot of interest I have and the team has in certain strategic partners. So I think in including people that can be helpful to us, absolutely. I mean, that's something that we're gonna be looking to do in the next year.
Speaker 1:Makes sense. Little bit of a connection issue, by the way. Sorry. Sorry if there's a lag. Have to ask you about your kind of personal views on the state of both traditional sports books, online sports books, gambling platforms, as well as prediction markets.
Speaker 1:It's absolutely bloodbath on the timeline right now. Everybody involved seems to hate each other, both the even the even the investors on every side of it. Crazy. It's an absolutely wild time right now. How how do you think this kind of category evolves over the next twelve to twenty four months?
Speaker 10:I mean, love it. It's this is one of the most competitive spaces in the world. Right? Like you had mentioned with the creator economy, it's very competitive. All these different companies doing this or that, like great.
Speaker 10:I love that. Like there is nothing better than having a super vibrant competitive marketplace for products, having to compete and win for customer engagement, for loyalty. There's always some curve ball in gaming and gambling and sports betting, whatever, something new every year, some new competitor, some new kind of product variant. And I think the exchange, like how fast that's kind of come in since the election and evolved into a sports product. You know, it's a fascinating thing and I think it'll be very competitive.
Speaker 10:You know, DraftKings obviously announced their launching and exchange. Pretty much everybody, I think in the sports betting space has some plan here. And then there's the Cal Shi, Polymarket, you know, that, rivalry, and, we just look forward to competing. You know, I feel like DraftKings has proven world class technology team. We deliver leading products.
Speaker 10:We have the best customer satisfaction in the market. We pride ourselves on that. So, competition's our favorite. It's like something that drives us.
Speaker 1:That makes sense. What what percentage of content targeting men online do you think is entirely dependent on either gaming, ad revenue? It feels like there's huge swaths of the Internet that honestly, like, wouldn't really exist or creators who, I'm I'm curious if you have any kind of internal estimates even.
Speaker 10:Like creator media?
Speaker 1:Well, yeah. It just feels like I I can think of a lot of
Speaker 2:Saw Gerber was on the show talking about, like, he he was saying, like, there's a bubble in sports podcasting specifically because of all the sponsorships that come from, sports books. It's actually made it's made a lot of people in the creator economy be able to go full time because they've been able to have Yeah.
Speaker 1:I just think a lot a lot of creators where you look at their business and you're like, okay.
Speaker 2:Like,
Speaker 1:90% of your revenue Sure. Is from, you know, either, yeah, some type of, you know, online casinos or sports books, etcetera.
Speaker 2:Yeah.
Speaker 10:Yeah. It's such a valuable category that, you know, going back to hard scope and expanding beyond just Faze Clan, which is a sort of mass market, super mainstream media business, you know, going into verticals like sports really aggressively, you know, sports, food, like the content verticals that have a lot of really attractive partnerships is that's kind of the whole purpose here is to represent the creator economy across all of the verticals at scale for brands. And in sports, you can build out entire content properties and invest in them knowing that it's gonna be supported through some kind of deal, some kind of partnership. It's one of the sure things. So Yeah.
Speaker 10:I feel like as a company that builds assets, that makes content from scratch, puts together creator collectives from scratch and scales them, like, we can invent these things knowing that the sports landscape is so vibrant that there's gonna be deals there.
Speaker 2:Like, guys betting on food. You said that you're working on food channels, and I think that the the like, that that that's one area of the creator economy that has not been financialized yet, and that feels like fertile ground to me. Obviously, business
Speaker 10:Don't threaten me with a good time.
Speaker 2:Exactly. Exactly. I don't know I don't know exactly how it would work. It's like, I'm gonna bake this cake. We're gonna do a blind taste test.
Speaker 2:Whoever likes this more, they win. But, I'm sure there will be an attempt at at at financializing baking channels in the future, the Great British Bake Off. I mean, there's probably a prediction market on Will
Speaker 1:I burn the cookies or not?
Speaker 2:Will you burn the cookies or not? That's a good question. Anyway, thank you so much for coming on the show. This is a lot of fun. Yeah.
Speaker 2:Congratulations on the launch, and, we will talk to you soon. Have a great rest of your day. Merry Christmas.
Speaker 10:Hey. Thanks for having me. Merry And, you know, love to come on again in a year and give you some updates on all the great stuff we're up to.
Speaker 2:That'd be
Speaker 1:fantastic. That'd be great. Anytime you have hot takes too on, anything gaming or prediction markets related. I know it's a little tough since you're still on the DraftKings board. You gotta keep that in mind, but, but we appreciate the insight, and, congrats to the team on the launch.
Speaker 2:Thanks so much.
Speaker 10:Alright, guys.
Speaker 2:We'll talk you soon. Cheers. Goodbye. And, let me tell you about public.com, investing for those who take it seriously. They got multi asset investing.
Speaker 2:They're trusted by millions. Public.com. In a groundbreaking endeavor, the University of Utah athletics is entering into what could be a $500,000,000 equity partnership with Oatro Capital, featuring the creation and shared ownership of a for profit entity to operate athletics, sources tell Yahoo Sports. So college football is going to the big leagues. They're going to the private equity leagues.
Speaker 2:Private equity is now gonna own your local college football team.
Speaker 1:Ugh. People absolutely hate this.
Speaker 2:The prob I I know I hate this
Speaker 1:too because Here's what
Speaker 2:Why are they stopping with college football, please? High school football Middle school. Lower school, Little league. Preschool. Preschool.
Speaker 2:Let's financialize that. Let's get let's roll them up. We actually, this is happening. We talked about the we talked about the the hockey rinks that have been sold to private equity rolled up, and then you can't film your own children without paying for the the the
Speaker 1:Somebody out there that really hates private equity just yesterday was saying, you know, private equity has come for everything,
Speaker 2:but at
Speaker 1:least you can still go to a college football game.
Speaker 4:I don't know.
Speaker 1:And and again, so how how do we think they're gonna you know, so, sounds like they effectively sold
Speaker 2:Yeah.
Speaker 1:For half $1,000,000,000. They just sold. Yeah. You remember it was Chicago, I think, sold all their streets or their parking meter
Speaker 2:Oh, yeah. Sovereign. Yeah. Yeah. Back then, they were like,
Speaker 1:for, like, seventy five years.
Speaker 2:Yeah. So you gotta get the Okay. You gotta get the money. You gotta get the deal right.
Speaker 1:Yeah. So so they they they basically buy a college team. Yeah. You can say that it's some more sophisticated structure than that, but effectively, that's what happened.
Speaker 2:Yeah.
Speaker 1:They'll have to immediately put DraftKings
Speaker 2:Yeah.
Speaker 1:Or prediction market logos all over the helmet and all all over the jersey. So that's that's probably that's probably that's probably like a $50,000,000 new new revenue line that the college could never do. Yeah. What else? They could
Speaker 2:So the current mascot for the University of Utah is Swoop, a rail a red tailed hawk.
Speaker 1:That's pretty cool.
Speaker 2:It could change it to drafty.
Speaker 1:Drafting off the
Speaker 2:Draft Okay.
Speaker 1:So another thing they could they could increase if you want season tickets to the game Yeah. You're a student. Yeah. They could of course, they're gonna jack up the prices. They're probably gonna make it like $20,000.
Speaker 2:You're you're you're let me steal, man. This 20,000 You're being too negative here.
Speaker 1:$20,000 a year. Because And they're gonna offer the private equity firm can bring a private credit partner into the mix and and help finance the season tickets. You don't just graduate with student debt.
Speaker 2:Yeah.
Speaker 1:You actually graduate with game day debt that will stay with you for decades.
Speaker 2:Ridiculous. I mean, there there are so many reasonable ways to monetize a football team over, you know, the entire life of of of ownership for this firm. Could sell
Speaker 1:the windshield. They could sell Yes.
Speaker 2:Yes. It's very funny to sell everything. But, I mean, there is something that actually could be very good for academics at this school because if you have $500,000,000 in cash, you can go and build a new library, a new science lab. You can go build, like, actual academic buildings. Yes.
Speaker 2:You don't really need to and you don't need to worry about, like, okay. We got this donor. Somebody went to the University of Utah. They hit it big. They're a billionaire.
Speaker 2:They wanna donate $500,000,000, but you know what? They just like football, so they're gonna build us a new stadium. And you're like, but wait. Wasn't the point of this whole thing, you know, unrestricted gifts? Wasn't it wasn't the point academics?
Speaker 2:And, and that might not that might be less of an issue now. So they might be able to fund more great academic, activities and endeavors with this money. So I I don't know. It's very funny to make fun of. It's very funny to to riff on.
Speaker 2:But there are some there are some potentially really good, really good outcomes that could happen. Anyway, we have our next guest in the restroom waiting room. We have Emile Michael, the undersecretary of defense for research and engineering of the United States. Emile, good to see you. Merry Christmas.
Speaker 2:How are you doing?
Speaker 1:Welcome to the show.
Speaker 10:Doing great.
Speaker 3:Thanks for having me.
Speaker 2:Thank you so much for taking the time. You look fantastic.
Speaker 1:Yeah. I would say
Speaker 2:thank you
Speaker 1:for wearing the suit, but unlike a lot of our guests, this is a daily driver, I'm sure.
Speaker 2:Yes. Yes.
Speaker 3:Well, we're buying a high school football team today, so I had to dress up.
Speaker 2:Oh, nice. That that would that would be a real treat. Well, you're not on the matter. You're you're is it is it fair to say that you're buying Gemini? Are you buying tokens, or is this one of those deals where it's the partnership is structured so that it's not really, you know, a a major cash infusion for Google or it's not a burden on the taxpayer.
Speaker 2:It's a little bit more of, just two great American institutions working together. How are you framing the deal?
Speaker 3:It's it's making to 3,000,000 Department of War employees. That includes military members
Speaker 2:Yeah.
Speaker 3:And civilians access to Google Mhmm. Gemini on our network which is a private network. Right? Yeah. So it's you actually have to port it over.
Speaker 3:Okay. And they gave us a great deal for the first year. It's like 47¢.
Speaker 2:That's amazing.
Speaker 3:So they're very patriotic. I'm super excited to to have that at the hands of everyone at the Department of War. It's never happened before.
Speaker 2:Yeah. Were there historical examples that you were pulling from? Like like because I imagine that service members have been googling things for a long time. I've heard stories about I mean, even during the during the war in The Middle East, the war on terror, they were using Google Maps just to see satellite imagery. And there are a whole host of reasons why a warfighter might wanna use a Google product.
Speaker 2:Is this a new structure? Are you building on the shoulders of giants? Do you feel like when you came in there, the Department of War had a good a good reference point for how to work with a big tech company like Google, or was it sort of new territory? How did you think about actually interfacing with Google?
Speaker 3:I mean, it's entirely new territory. Right? Because you could get those apps off the app store or on a web browser. So to get AI in Yeah. There's a lot of sort of fear about AI Sure.
Speaker 3:What it could do. And then you have to remember when you're doing a Google search, like, yeah, it it kinda records where you're searching. But if you're putting stuff in AI, you don't want that to leak back into the model. So have to architect it in a unique way. So it's kinda new territory.
Speaker 3:We did it all in like three months.
Speaker 2:That's amazing. Yeah. What did the team on the Google side look like? Is this I mean, I imagine that they have a, you know, a large, team just for working with the government. You you mentioned a few, it was a few weeks of work.
Speaker 2:But what what did they bring to bear to actually deliver this on their side?
Speaker 3:I mean, they they had a ton of engineers Yeah. Because you gotta put it, you know, in our networks which are not simple. Right? You have 3,000,000 people all over the world, all kinds of devices and so on. So they really brought the heat.
Speaker 3:Right? They and they had a you know, for today for launch, they had a room or the, you know, war room if you will. No pun intended. And as did we to make sure that it launched it launched correct. I mean, we got a lot of a lot of flack on Twitter
Speaker 1:So yeah. I saw these comments Yeah. But it was very obvious if you used one brain cell that you needed to be on a on a on a device on a military network if you wanted to access the service. So I didn't I didn't I didn't get the flack.
Speaker 3:Yeah. Well, people wanna give flack just to give flack.
Speaker 1:Right? I think some people wanted to they wanted to try it out themselves. And it's like, well, if you wanna do that, you can join, become a service member.
Speaker 2:Yeah.
Speaker 3:Yeah. We put it we'll put a we put a link on the error message a few hours ago for job openings at Department of War if they wanna join they get access to Gemini from government. We're open for business.
Speaker 2:Yeah. What what what else is have been the highlights of the year? As you look back on the year, obviously, confirmation took time, but then there was this big White House AI action plan. What are some key moments that you feel like have been maybe under discussed or under didn't get enough appreciation at the time?
Speaker 3:I mean, you know, there have been like three AI executive orders Yeah. Which is a big deal, right? And Jensen said the other day that no other administration has ever done this much for the AI companies. So we're really championing championing like these four national champions, right? Google, OpenAI, Anthropic, and XAI.
Speaker 3:Mhmm. And giving them like, we're talking about, you know, data centers on military land. We're talking about how do we get more power to these companies because it's a race, and I think we're the first group in the last six months to really realize that we better get great at We better get better and stay great and ahead of everyone else on this because it's really the next generation of tech.
Speaker 1:On the subject of data centers on military bases or land, what kind of comps have you looked at on that side? I know there's like a historically in in weapons manufacturing, you have like Gokos which seem like, you know, they would provide some framework. But how have you thought about that?
Speaker 3:We haven't thought about that yet. We haven't broken ground yet to the business models. We just had the executive order said we're going to do it and then we got to figure out how do you prioritize who gets what, right? And we may reserve some of that data center capacity just for the government to use for our own purposes, but the point was to send a message that we're all in on AI companies, all in on the data center power chip needs of these companies in a way that the last administration we think was just trying to constrain everything with these orders to to really, you know, have one company win and that's it, so they can control sort of the outputs. We're not We're going the other way.
Speaker 3:We're gonna have all the national champions. We're gonna support them all the way. You know, David Sachs is out there making sure the American tech stacks and all of the you know, as many other countries as it can be.
Speaker 2:Yeah.
Speaker 3:And that's a big deal. Right? It's you know, if anyone's gonna be using AI, we want them to be on our stack.
Speaker 2:Yeah. How do you think about the the the the fact that all of the big tech companies seem to be working with the United States government effectively for free, 47¢. I've heard of deals of of a dollar, as high as a dollar. But then I think back to, you know, a few decades ago where Microsoft had a deal to develop virtual reality headsets, augmented reality headsets for the US government, and I think it was, a $10,000,000,000 deal. And I was really excited when that project went over to Andoril because it's a lot, you know, younger, faster moving company.
Speaker 2:Now I love Microsoft. I love them as a infrastructure provider, and the and the fact that they have OpenAI's IP is amazing. There's so there's a ton of great things that that, that Microsoft does. But developing an AR headset that always felt like it was gonna be a rough go, it was such a big such a big burden on the taxpayer at $10,000,000,000. Much better to see it in a different, in a different land in a different company.
Speaker 2:How are you thinking about when the how the government is working with big tech? When to open up the pocketbook and write a billion dollar deal? Or when to ask for, you know, 47¢?
Speaker 3:Yeah. I think, you know, we want these companies to be successful. So, we're gonna pay them market rates eventually. It's
Speaker 9:how do
Speaker 3:you get out out of the gate? Get out of the gate by like giving 3,000,000 people
Speaker 2:Yeah.
Speaker 3:Access and not having to worry about like a token count every day. Right? Then Sure. That's exciting to them because now they get 3,000,000 more customers. Right?
Speaker 2:And Yeah.
Speaker 3:They get to learn use cases and so on. So, it kinda works for them, works for us, but we need to pay them fair fair rates, but they're gonna be commercial.
Speaker 2:Yeah. And I imagine that they're like, when a new technology comes up like, you know, Gemini, there's just a lot of service members that are just, you know, not by no fault of their own, just, like, accidentally using it a little bit too cavalierly. And this is an initiative to actually refocus on security, refocus on privacy. But can you take me through some of the you know, I'm not particularly worried about about Google having, you know, information from the American warfighter, but I am worried about some of the international chatbots having access to the American warfighters prompts. Can you take me through how the Department of War is thinking about LLMs like DeepSeek, Alibaba, these other AI models?
Speaker 2:Are those just banned everywhere? How do you think about actually, you know, banning different different, you know, vectors of attacks from a security perspective?
Speaker 3:Yeah. Well, I mean, first of all, we're gonna train Yeah. Everyone is gonna train if they wanna use it for like, you know, higher risk use cases. Right? Sure.
Speaker 3:But this is gonna be on their devices just like Mhmm. The web browser is and they can still search Google. But, when it comes to the foreign companies like DeepSeek and China like, in the bill that was just released by Congress, I think yesterday, we're we're gonna ban, you know, DeepSeek and all these foreign models from use by DO DOW members and contractors and anyone who touches it because last thing we want is for those models to get data on how we're using AI. Right? That would be a tragic mistake.
Speaker 3:So, I think we're we're already there but we're gonna it's gonna be in law pretty soon.
Speaker 1:Yeah. What's your what's your pitch to talent to come work with the Department of War specifically in AI? It's like the craziest talent war of our lifetimes most likely. You know, you're trying to recruit people that can go get a I don't know, anything from a million dollars a year to a $100,000,000 a year to a billion even
Speaker 2:up to Literally more a billion dollars.
Speaker 1:And so and so I imagine you have to have a, you know, pretty dialed in pitch to recruit people and it's and and maybe that pitch is you're gonna be able to work on I mean, in the h two hundred news today says that, you know, we aren't the know, the h 200 is not like a f 35. It's not military technology yet. But I'm sure there's a pitch to work with you and your team on actually applied AI in a military context. But what are those how do those conversations go?
Speaker 3:Yeah. So I call them recruiting Tuesdays. Right? I spend all afternoon Tuesdays calling, dialing for dollars, emailing, referencing, interviewing, and my whole team does that. Mhmm.
Speaker 3:And like, the pitches, you know, okay, you have to have some patriotic instinct, obviously. But then, maybe you're in between companies or you're just motivated. I mean, Elon has five companies and he still worked for the government for like seven months and brought a ton of those people who were motivated by the mission. So, I'm trying to motivate people by, hey, this is the biggest technology deployment in the world. There is no bigger organization than the Department of War.
Speaker 3:There's no more exquisite, crazy, interesting use cases, whether they're intelligence, war fighting, you know, corporate use cases, and you get to be a part of creating that. It's never been done before. That's a pretty good pitch. And then, if you when you leave the Department of War and you've done that, I think you get more valuable the private sector. Right?
Speaker 3:All these big AI companies now have big federal businesses. They all have sort of cooperating with like the government in different ways and you're even You have another notch on your belt of good stuff that you've done and been an innovator on. Which is pretty rare in government to like literally innovate while you're sitting in the job on something that's never been done before that's that big.
Speaker 2:Yeah. Excellent. How do you how do you think about the different levels of AI diffusion, AI integration where AI can actually help the warfighter in the American context? I mean, a lot of people, kind of watched the Palantir story evolve over the last few decades, this idea of of analytics, just putting dots on a map sometimes, that being enough to identify where an enemy threat might be, for example. How do you think about integrating AI from the most mundane use cases of just speeding up a little bit of paperwork here and there to some of the bigger questions that will be ultimately face the the the warfighters of today.
Speaker 3:Yeah. I mean, like, the most simple use cases just like any big organ like, an employee in any big organization. Right? Yeah. You're It's writing PowerPoints for you, writing job descriptions, like, making spreadsheets, the basics.
Speaker 3:Yeah. Then there's, like, the cool intelligence use cases. Imagine that we've got decades of satellite imagery. Yeah. Decades of that or sensors that we've had or, you know, all all kinds of things.
Speaker 3:And now, could Instead of one human analyst having to go like, I think I see that there. You you can go back through fifty years, train a model, and say, look for things you've never seen before. Right? Yep. And then on war fighting, logistics, planning, you know, all kinds of simulations.
Speaker 3:If you wanna simulate a war game
Speaker 2:Yeah.
Speaker 3:In a really incredible way with all the data and all the stuff in there. So, it's like pretty pretty compelling, you know, and exquisite to mundane that you could do with this stuff when you deploy it the right way.
Speaker 2:Yeah. How how do you think about the I mean, this partnership with Google, it feels very much like giving, you know, the almost the consumer product of Gemini to everyone in the military. How how are you thinking about larger projects that might require bringing together custom code, multiple systems, multiple pieces? You know? I mean, I guess as a consumer, we're running into things where Anthropic might be better for coding and one day, and the Nano Banana is better for this, and ChatGPity is good for deep research.
Speaker 2:And if you wanna build a business, we see a lot of startups pull three different models off the shelf. Is that or is that something you're starting to look at as like a phase two of AI integration into the military?
Speaker 3:Yeah. I mean, we're so ideally, we'll have all all four models
Speaker 2:Yeah.
Speaker 3:And all four of the newest versions. Mhmm. Like, all the time at every classification level.
Speaker 2:Wow.
Speaker 3:And, the reason you wanna go up through the classification levels is so you can do more exquisite work. Right? More complicated stuff. And, then the reason you want all models is just what you said. If you're trying to write code, maybe you wanna use Claude.
Speaker 3:If you're trying to do these other things. So, as they compete, we wanna benefit from it. And we've never had that here before. So, it's it's trying to consumerize it, give choice, but then give more and more capabilities as you go up the chain of like of security classification.
Speaker 2:Yeah. Who who who owns the data? Does the taxpayer own the data? Does the government own the data? I see a lot of stuff where it's like, oh, this this company now owns Google's gonna have your your government data.
Speaker 2:Google's gonna have the the the data. It seems like they might be storing the data in some points, but they don't have authority over it. How do you frame to, like, the American who's maybe worried about government overreach or or or wants to understand where important critical military data is living. Who has control? Who has final say?
Speaker 3:Yeah. So, taxpayers own the government. Government owns the data on behalf of the taxpayers.
Speaker 2:Fantastic.
Speaker 3:Google does not own it. We control it. Yeah. It doesn't leave our control. Mhmm.
Speaker 3:And that's that's why it was complicated to actually launch. Right? Because you like, AI models are built so that they learn as you continue to query them. Right? And and to make it such that the model we got the latest model and it took in queries, but then the learnings from that don't go back into the general model
Speaker 2:Yep.
Speaker 3:Is a form of making sure that the American taxpayers' data doesn't leak anywhere else and just use for the purpose it was intended.
Speaker 1:Yeah. One other How many other organizations globally, you know, allies, things like that need to take on prod like, a project like this? Like, it feels like you clear clearly, it's very important to move quickly because if you if 3,000,000 people can't use the latest AI models in a secure way, it's not super sustainable. They'll eventually go elsewhere to get these products. Do you think a lot of other groups need to pursue a project like this?
Speaker 1:And are you guys trying to help create kind of a framework so others can can benefit?
Speaker 3:Yeah. I mean, any Well, so we all know, and you guys know, any large organization needs to be using AI just for efficiency purposes. Right? And and just, you know, dollars and cents. If your competitors, you know, showing more profit in in q one relative to you because they have too much overhead that it could be solved with AI, you're gonna be in trouble.
Speaker 3:So, when you talk about governmental organizations, should every government be using it in some degree? Yeah. I mean, it's it's sort of like an economic imperative, but it's like a strength imperative too. It's sort of like the way I describe it to people is you're opening the human context window. So, we're not replacing a war fighter, but we're allowing the war fighter to be to do more with the same amount of time.
Speaker 3:Right? To analyze more intelligence, to do more scenario planning, and all that. So, I can't imagine any other organization like ours that wouldn't be thinking about this. But, hopefully, I think we are are setting the pace here. We're we're gonna be the pace setter here for the US government and for governments around the world.
Speaker 2:I love it. Well, thank you for setting the pace. Thank you also for coming on the show today.
Speaker 1:This is fantastic to have you and thank you thank you for all the work that you're doing. Yes. On behalf of guys. Thanks for having
Speaker 2:me on.
Speaker 1:Every citizen. Come back on anytime. Anytime. Always welcome.
Speaker 3:Thanks a lot, guys.
Speaker 2:Have a nice one. Meal. Goodbye. Alright. Me tell you about ProFound.
Speaker 2:Get your brand mentioned in ChatGPT. Reach millions of consumers who use AI to discover new products and brands. Patrick Collison had a post that hit the timeline, rocked the timeline with 1,300,000 views. He says, two conversations this weekend make me think that there's a vibe shift afoot in Silicon Valley around what one should work on and what is worthwhile. Culturally, it feels like the moment is ripe for new frameworks.
Speaker 2:One, Davos expert morality is stale and
Speaker 1:Let's give it up for the experts. Joe Rogan, Andrew Rubin Yeah. Likes for
Speaker 2:Those guys doing podcasts. Davos. They don't they they're not Davos.
Speaker 1:It's very possible the next the Davos could just be a roundtable between Joe Rogan, Andrew Huberman. Yes. The the real experts.
Speaker 2:Chris Williams.
Speaker 1:Modern experts.
Speaker 2:Lex Fridman. Love that. That would be fantastic. It's also apparent that the, quote, just be super based counter enlightenment is not really an answer. Yes.
Speaker 2:Woke went too far, but simply inverting it does not work. Good point. Effective altruism is no longer the automatic default for smart people. They pushed it too far. They tried to save too many shrimp from their farming fates, and now they are cooked.
Speaker 1:Sorry, shrimp.
Speaker 2:There is increasing skepticism of slot and slop machine dynamics. People don't wanna work on a slot machine. They don't wanna work on a slot machine. They wanna work on something worthy and valuable. The question is, overall, what is worthy and valuable?
Speaker 2:It feels like this question is becoming more central. What do you think is worthy and valuable?
Speaker 1:I think it's worthy and valuable that OpenAI hired Slack CEO Denise Dresser as chief revenue officer. It's the scoop. It's happening right now.
Speaker 2:Wait. Wait. Wait. Wait. Wait.
Speaker 1:OpenAI has hired Slack CEO Denise Dresser
Speaker 2:No way.
Speaker 1:Chief revenue officer.
Speaker 2:That's that that that that really flipped me for a second because they have a CFO. They have a CEO of applications. I don't know where CRO fits in, but they got someone, and that's very exciting. Is that Gong worthy?
Speaker 1:Let's I think it's very Gong worthy. And in other news, we got some new SpaceX news from Bloomberg. The chat had it first. Thank you, guys. We were in the middle of chatting with Emil.
Speaker 1:We can't help But SpaceX plans to go public at a 1 and a half trillion dollar valuation Yes. Up from the rumored 800,000,000,000 just last week. They plan to raise $30,000,000,000, raising, I guess, far above $30,000,000,000. Anyways, so this is reporting SpaceX is moving ahead with plans for an IPO that would seek to raise significantly more than 30,000,000,000
Speaker 2:Yeah.
Speaker 1:In a transaction that would make it the biggest listing of all time. I'll hit this. The Elon led company is targeting valuation of above 1 and a half trillion for the entire company, which would leave SpaceX near the market value that Saudi Aramco established during its record 2019 listing. The oil major raised 29,000,000,000 at the time. SpaceX's management and advisors are pursuing a listing as soon as mid to late twenty twenty six.
Speaker 1:The timing of the IPO could change based on market conditions. Let's hope the window stays open, folks. We will do our best to hold it open.
Speaker 2:We will.
Speaker 1:I hate when the IPO window is closed. But, anyways, no comments from the SpaceX team, but they, junk bond analyst says, of course, congratulations on saying
Speaker 2:The biggest number.
Speaker 1:Always great when you can say the biggest number.
Speaker 2:Yeah. So
Speaker 1:I Do you think do you think you think that the the timing here with Gavin going on about space data centers is just a coincidence? Or is this part of a a, allocator conspiracy?
Speaker 2:I I still I still believe the Primark take that Elon has ran has run the a b test on public companies. Tesla was miserable. SpaceX was great. And so you wanna stay private as long as possible. There's no funding is not drying up for SpaceX by any means.
Speaker 2:There's no real requirement to go public. There's no reason why he has to take that company public. This I I I I don't know why stuff is leaking right now. It might just be some sort of head fake, but it doesn't seem critical, to me. I don't know.
Speaker 1:Certainly doesn't seem critical that they go public.
Speaker 2:It's very different.
Speaker 1:I would just say you have two major leaks in the span of a week.
Speaker 2:Yeah. It's just very different than the OpenAI thing where OpenAI, like, in order to win, they need to, like, marshal all this capital. They need to, you know, make become GPU rich. They need the the the GPU prices to fall. They need energy to get cheaper.
Speaker 2:They need everyone to do everything. They need everyone to get in line. Whereas SpaceX is very much, like, established. They have their supply chain set up. They've been in this business for twenty years.
Speaker 2:They're they're just, like, cooking and compounding, and I just don't see a need for them to to, you know, marshal more capital or do anything really special. I it it it it does seem like there's something going on with, okay. We're talking about a second, third act here. But at the same time, it's not like Elon needs to take this company public. I don't know.
Speaker 2:Do you think he does?
Speaker 1:No. A lot of great companies don't need to go public, but there's still a lot of reasons to go public. Yeah. Yeah. So what do would be
Speaker 2:the odds that It would certainly be exciting, and I think it would be a good like, it would just be a like, there's a lot of people that are, you know, into space and can't get can't get any, like, allocation into into space generally. You know? They just can't they can't participate in the economic upside.
Speaker 1:AST Mobile.
Speaker 2:That's it. That's it. But you can't you can't EchoStar. EchoStar is the holdco. I wonder
Speaker 1:I wonder, this is the the market's closed now, but I wonder EchoStar, which owns, I think it's 10 Yes. 12,000,000,000 of of SpaceX stock.
Speaker 2:Yeah. I wonder what that's Up
Speaker 1:6% today. Well But it's been fluctuating
Speaker 2:a at
Speaker 1:the close.
Speaker 2:Back to the Patrick Collison post, like, what is worthy and what's valuable? Like, I I still honestly feel like SpaceX is one of the worthiest and most valuable missions. And, in terms of just it has no slot machine dynamic. It has it does not create slop. It is I don't know.
Speaker 2:It's it seems above enlightenment, counter enlightenment, woke, super basic. Yes. Elon runs it. But just as a company, just the idea of, like, let's go to the moon. Let's go to space.
Speaker 2:That should be apolitical. It doesn't it it doesn't even have the Davos expert morality impact on the environment. It's just, like, one of the it's one of the purest missions, in my opinion. And I feel like it the the reason I I think there's there's not I'd like there's something interesting about what Patrick is saying here where there is this highly worthy, highly valuable mission, but it's only there's only 5,000 people that can really play in that game. Maybe, like, 10,000 or something.
Speaker 2:Like, it's just not it's just not a career path in America. It's not like I'm going into real estate. I'm going into lawyer legal. I'm going into medicine. I'm going into lawyer.
Speaker 1:I'm going into Big O I.
Speaker 2:You can't you you can't just say, I'm going into the orbital economy. I'm studying, and I'm gonna you know, maybe I'll work at SpaceX, but there's a whole there's a whole host. And, like, go you can go into tech. It's very it's very accessible. You can just, like, go and get a job in tech.
Speaker 2:It's very hard to do that in space and maybe I don't know. Make a career.
Speaker 1:I don't know.
Speaker 2:For it's nowhere it's nowhere near as easy as it is for tech. Because tech broadly
Speaker 1:So you just go into aerospace engineering, and then you have optionality It's very hard. To try to land a job at at a Yes. But space company or you can
Speaker 2:So, yes. But what if you're what what if you're not cut out to actually go do aerospace? What if your what if your actual skill set is marketing? Well, you can go and be a marketer in tech. You can't go and be a marketer in space.
Speaker 2:It just doesn't happen. They hire, like, two marketers.
Speaker 1:Okay.
Speaker 2:There's no there's no marketers.
Speaker 1:Why why is that
Speaker 2:So what I'm saying is that, like, is that, like, this question You're
Speaker 1:saying we need a federal backstop on marketing jobs in the Oracle economy?
Speaker 2:No. No. No.
Speaker 1:I just don't see what the problem is.
Speaker 2:No. No. What I'm saying is that is that there's a vibe shift because, like like so Patrick Collison is asking the question, what is worthy? What is valuable? What is a valuable mission?
Speaker 2:And I'm saying, I know what a valuable mission is. Going to Mars. Going to the moon. SpaceX is a valuable mission. But 99% of people can't participate in that.
Speaker 2:They can't make that their life's work because if they're not cut out to be aerospace engineers, aerospace designers, you know, if they're not if they're if that's not what they're great at, they just can't participate. Whereas when previously, in previous eras, like, tech was organizing the world's information. Don't be evil. It was just cool. Tech was the mission.
Speaker 2:Tech was the thing that was worthy and valuable. And so you could show up and say, I'm a finance guy. I got a job in tech. I'm a lawyer. I work in tech.
Speaker 2:I'm a marketer. I work in tech. No matter what your actual skill set was, you could you could come to technology, the technology industry, and have a career. And you can't do that in the orbital economy yet. You can't do that in space because there just aren't that many jobs.
Speaker 2:And so there I I think that there is something that's worthy and valuable. It's just not able to absorb the actual demand for worthy and valuable career paths. And so for a lot of the marketers, for a lot of the lawyers, for a lot of the financiers, they wind up being forced to work in slot machine companies or slop machine companies because those are the ones that have the jobs. They have 10,000 jobs available. I don't know.
Speaker 2:That's my that was sort of a hot take.
Speaker 1:Yeah. I think that's fair. I just would I I think you could you could you could also make the argument that many people are looking at jobs at, say, like a Boom Supersonic, and they're choosing they're just making the choice to work at the Infinite slot machine company.
Speaker 2:That's fair. That's fair. Well, hopefully, they'll read Patrick Hollison's post. They'll say what's worthy and valuable. I gotta work for Boom Supersonic.
Speaker 2:I gotta work for Blake Scholl, who's our next guest. So while we bring him in from the restroom waiting room, let me tell you about getbezel.com. Shop over to 26,000 luxury watches, fully authenticated in house by Bezel's team of experts. We have Blake Scholl. Look at Blake Scholl.
Speaker 2:Wow. He is in a jet. Oh, yeah. He can fly. I forgot.
Speaker 2:You can fly. Right?
Speaker 8:Hang hang on, guys. I gotta shut the engines down.
Speaker 2:This is crazy. What is going on here? Wow. Look at this. My captain.
Speaker 2:My captain is complete rat race to try and put on the most insane performance during a TBPN interview. I think this is gonna take the cake. Blake, how are you doing? Introduce yourself. What's going on today?
Speaker 8:Hey, guys. It's good to see you. Thank you for having me. It's a big day at Boom.
Speaker 2:This is a huge day at Boom.
Speaker 1:I'm so I'm
Speaker 2:so happy. I'm so happy. Okay. Where are we? Take us through this.
Speaker 6:You and
Speaker 8:the team. We are in the Boom Supersonic factory. This, of course, is the x p one airplane. This is the airplane that broke the speed of sound in January.
Speaker 2:Wow.
Speaker 8:The airplane that resulted in supersonic flight being legal again in The US.
Speaker 2:Amazing. So
Speaker 8:it's blown wide open. But, you know, a year ago a year ago, we were joking that it would be way easier to fund this company if we were an AI company. We were laughing.
Speaker 2:Yes. Didn't talk about that on the show. That's right.
Speaker 8:Yes. It it turns it turns out we are. So Okay. The engine that we're building, that we've been building for almost four years now Yes. To power our Overture supersonic airliner makes the perfect ground power turbine
Speaker 1:Yes.
Speaker 8:For AI. And so that's that's today's news. We've got a product called superpower, 42 megawatts, natural gas. It's going into data centers. Crusoe is our launch customer.
Speaker 8:We're gonna be generating tokens and, quiet sonic booms.
Speaker 2:That's amazing. That's amazing. So
Speaker 9:so you
Speaker 8:guys wanna see the factory?
Speaker 2:Absolutely.
Speaker 1:Give us a tour. Give us
Speaker 2:a tour.
Speaker 8:So one of the one of the things that anybody building in in a hard tech learns quickly is that the legacy aerospace aerospace supply chain is just really screwed up. Mhmm. And so we are building this factory to go from raw materials in one side of the building and completed jet engines out the other side. So this is this is some of the raw material that's just come in. This is 17 pH hardened stainless steel.
Speaker 8:It's heat treated. This is the this is what they call the hot stuff. And, you know, I don't I I missed the gym this morning, so
Speaker 1:there you go.
Speaker 2:Getting little bit here.
Speaker 8:But this is gonna turn into stage five stator veins. They go inside the the engine and the superpower gas turbine. So one of the most amazing surprising things is the technology that is ideal for supersonic passenger flight is actually the same thing you need to power a data center. Yeah. So this is a Elon pioneered this at Colossus.
Speaker 8:Sam's doing the same thing at Stargate. These large arrays of what are called aeroderivative jet engines. Mhmm. And it's like the they're like the blade servers of the energy world. I put a lot of them in array, and just the same way blade servers beat mainframes, aeroderivative turbines could beat mainframe gas turbines.
Speaker 8:So let's tell you how they work. This is a one third scale model of our engine. It works on a complicated principle. Stuck, squeeze, bang, blow. Mhmm.
Speaker 8:Alright. So let's break that break that down. Air comes in this way. This thing spins, super high RPM, compresses. You can see the blades get smaller as you go in, getting the air down to about a 20 to one compression ratio.
Speaker 8:Burners in here, this can run on jet fuel. Mhmm. It can also run on natural gas, just with a different fuel nozzle, and it goes out the back here. So the model you're looking at here is what powers the airplane. The model that powers AI is very similar.
Speaker 8:We basically take the fan off the front. We lose these two turbine stages, and then we have what's called a free power turbine on the back. Three stages that extract energy, spin a second shift, second shaft Yeah. And and that powers a 42 megawatt generator.
Speaker 11:Yeah.
Speaker 8:So like I said, the vision here is we're going from raw materials in one side of the building, completed engines out the other side. The facility we're standing in now is gonna do the first 200 megawatts over the next about eighteen months.
Speaker 2:That's pretty significant.
Speaker 8:A much larger factor that's to be able to do two gigawatts a year, and we're just gonna scale from there.
Speaker 2:Wow.
Speaker 1:So Wow.
Speaker 8:Let's go inside the shop.
Speaker 2:Yeah. And this is all, on the back of you you that it was it was seen as controversial that Boom did not just white label another engine from another company. Correct? And now it's sort of come back to benefit you. Is that is that the correct narrative?
Speaker 8:I I think that's correct. I mean, people called us crazy Yeah. To not outsource our engine.
Speaker 10:Yeah.
Speaker 8:Frankly, I was a little bit nervous about it. I was just really good to go. It's the best decision we ever made. We're getting a fully custom engine for about a quarter of the development cost. Sure.
Speaker 8:It enables things like boomless cruise. Could not do boomless without our own engine.
Speaker 2:Sure.
Speaker 8:It enables a totally new passenger experience. I haven't revealed it
Speaker 3:yet. Yep.
Speaker 8:And then I think the most important thing is we can now take that same engine core, put a power turbine on it, and and get to profitability years faster than otherwise we could have. And this this makes basically, superpower makes not just electricity, it makes capital, and it makes the capital that finances the the capital expensive development of the Overture passenger airliner. So let me let me walk you around the shop here. So this is basically the first unit of what we will copy paste into the the facility that will do two gigawatts per year. What are what are made of?
Speaker 8:Well, you've got big round things. And actually, if you look inside this machine here, this is called a a turn mill. This machine weighs 65,000 pounds, and spending on it right now is a 4,000 pound donut of cast Inconel, and that's that's a nickel alloy. So this is a relatively hard alloy. This is gonna be the turbine center exhaust frame.
Speaker 8:This is the first very large part that we're machining in house. So big round things. Then you've also got discs with blades all around them. It's called blisks. These are some of the hardest to make parts, and so we have started what we call the blisk krieg.
Speaker 8:And this machine here is actually a more than five axis mill. So this will hold a disc of forged titanium or forged powder metal superalloy, and then the disc will kind of rotate in and out like this while another cutter head comes down and basically sculpts each individual compressor blade out of out of metal. So we we're ultimately, we're gonna have a whole bunch of deep machines cranking out discs. Over here on the other side, this this is part of an automated production line or compressor blades. So to give you an example of this, this is the what's called the stage one variable guide vanes.
Speaker 8:This goes in the front part of the compressor section of the engine. These actually move as the engine changes power settings to every optimal airflow. And this machine here starts with that bar stock, those those kind of heavy beams I was showing you outside in the in the hangar floor. It comes out of this feeder in one side, gets held in the machine, the cutter head comes over, cuts it away. Another gripper comes over, grabs it, machines the backside.
Speaker 8:A robotic arm comes and grabs it, puts it on the table, which starts with the actual. So this thing is ultimately gonna be able to run twenty four seven building engine parts.
Speaker 2:Quick questions about the factory. Where are we? What where is this factory, and how big is it overall square footage roughly?
Speaker 8:Yeah. So this this building is about 70,000 square feet. Is five minutes from our engineering HQ in South Denver. And Okay. We are we're about to open early next year another factory that is three times the size of this one, and that's what's gonna be able to do two gigawatts a year.
Speaker 1:Yeah. So what are the what are the key what are the key challenges now? This feels hard, but maybe more straightforward than supersonic commercial flight. Like, what what are what are what are you guys Maybe
Speaker 2:less approvals.
Speaker 1:Yeah. Yeah. Exactly. But and Yeah. Have, like, massive massive demand.
Speaker 1:Yeah. What are kind of, like, the key challenges that you and the team are looking out for to to be able to deliver on on the timeline that you were talking about?
Speaker 8:Yeah. So after having done a boomless supersonic jet, it was safety critical with a pilot on board Yeah. This feels like doing it on easy mode. Literally, x p one had 68,000 parts.
Speaker 2:Yeah.
Speaker 8:68,000 parts, and they're all safety critical. The turbine has less than 2,000.
Speaker 9:Mhmm.
Speaker 8:And so the there's gonna be a lot of challenge in in getting that to work, getting it to work reliably, getting manufacturing up to scale. After having done x p one, it feels like easy mode. We've got customers that are gonna take as much as we can possibly make as fast as we can make it. We've got today, we've got the capital to go do that.
Speaker 2:How much capital?
Speaker 8:300,000,000. And
Speaker 2:Congratulations. Thank
Speaker 8:you. Thank you. After after basically continuously fundraising for about a decade
Speaker 2:Yeah.
Speaker 8:I can't tell you how good it feels to have raised the round that lets us ship the revenue product
Speaker 2:Yeah.
Speaker 8:That then produces the cash Yep. To fund the rest of the stuff. So we're done fundraising. This is the last equity round we ever have to do.
Speaker 2:Let's go. That's incredible.
Speaker 1:How was the first night sleep after you close around? Did you I imagine that was a pretty surreal moment, even though you're still just getting started. I would say people are going to be like, a natural concern is like, does this mean we're not going to get the supersonic commercial aircraft? You obviously I haven't lost any faith. This feels like an intelligent move in order to enable that future, basically, by by the company time to get us to that point.
Speaker 1:But what do you what do you have to say to anybody that might be wavering?
Speaker 8:Yeah. No. This if you want superpedit passenger flight to exist, you should be very, very excited about this. Mhmm. Is that the single biggest challenges we had were, how do we prove that we have a reliable engine, and where do we get all the money to do it?
Speaker 8:And running this thing on the ground proves the engine is reliable, and it literally prints the cash that we need to go develop the airplane. So I think this takes us from, you know, less than 50% chance of success to a far greater chance of success. Like, I think overture supersonic flight is is basically inevitable at this point. And, you know, some people are saying, like, oh, I'm you know, Blake got lost. I'm gonna be you know, I'm just gonna become an energy guy.
Speaker 8:And it's like, guys, I didn't bust my ass for ten years in order to, like, only make power turbines. I'm very excited about the power turbine business. America needs it. Like, we're losing to China. We really need this.
Speaker 8:But this is absolutely our bridge to the the even bigger opportunity to just reinvent all commercial aviation.
Speaker 1:Makes makes a lot of sense. From a from a like, looking at the existing sort of, like, turbine landscape, a lot of them have supply chain challenges as part of Boom's Edge that you guys are so used to making all of your own componentry and parts that you basically effectively just need the raw materials, you can make stuff happen? How are you kind of avoiding maybe some of the other delays that legacy manufacturers are experiencing?
Speaker 8:Yeah. Well, I I think you you named it. Being able to build our own parts is huge. And the, you know, the the room I'm standing in here does not exist at GE, does not exist at Rolls Royce. You know, the the in this sort Jack Welch era of everyone getting focused on return on net assets and what by the way, what a random metric.
Speaker 8:They all sold off their supply chains.
Speaker 2:Yeah.
Speaker 8:And they can't make anything anymore. And now we we hire, like, disaffected engineers out of Tratt, out of GE, and they were like, holy Toledo. We can resolve in an hour what used to take us three weeks or three months to do at our last companies because they didn't have access to hardware. And if they ever wanted to change anything, it's really hard to change. That's actually one of the biggest biggest innovations here is what we're doing is we're trying to make the world of atoms more like the world of bits, and you can iterate, you can evolve, you can change.
Speaker 8:And part of that is about taking software engineers, putting them on a hardware engineering teams, and automating design workflows. So that means we can, like, change digital designs really quickly when we learn. The other piece is how quickly can we turn apart. Like, we take a turbine blade we send it to a traditional supplier to be made, it's gonna take six, maybe nine months for us to get that part back going from digital design to hardware. What that means is if you're the engineer designing it, you get it wrong, like, it's really bad.
Speaker 8:You set the whole company back six, nine months. So now now there's a lot of hand wringing. Now there's analysis paralysis. Now you gotta have layers of managers double checking everything. Now you're really slow.
Speaker 8:But if you build that part in house, you can actually turn a turbine blade in twenty four hours with a three d print process, heat treat, braze, get it out into the engine. So what we can do is iterate really quickly. So we're liberating engineers to move really fast because if they make a mistake, if they wanna do an iteration, we can turn it in days or hours in the same building that they work in.
Speaker 1:That's super powerful.
Speaker 2:Because the product is
Speaker 8:I I see what you did there.
Speaker 2:That was great. It was accidental. I don't know. I love it. I love it.
Speaker 2:Is there is there anything, that you've been tracking on the on the regulation side that you think needs to change? We were talking about making, making, boomless cruise legal, removing speed limits or high speed travel. If you were to wave a magic wand, is there anything that you'd change around energy production in America today to accelerate reindustrialization and everything?
Speaker 8:It's much bigger than energy production. We have we have a huge problem that I think not enough people are talking about, which was we we have a permission based approach to building
Speaker 2:Sure.
Speaker 8:Not a freedom to innovate approach to building. It's like if we drove to work the way we build buildings or, permit energy plants, you'd have to go file a plan. You have to list out exactly what turns you're gonna take. You're gonna promise that you're gonna stop at every stop sign, not run through any red lights, always drive the speed limit, and then and then some bureaucrats gonna sign off on that, and then finally, you can drive the work. It's insane.
Speaker 8:That's the way we build a building. That's the way we build a power plant. I think we need to go from permission based,
Speaker 7:which
Speaker 8:is such huge delays and huge costs Mhmm. To, hey. We're gonna have a rule book. We're gonna have commonplace rules, and then you could you can pledge to follow them. And if you break them, then, you know, then you get fined, and you get in trouble, or you get your permits taken away.
Speaker 8:But I I think we have to really get rid of the entire concept of market preapprovals if we wanna move fast. It's really holding America up right now. It's the biggest problem with building anything physical.
Speaker 1:Yeah. Yeah. Are you guys hiring at all right now?
Speaker 8:We're hiring as fast as we can find great people. So in fact
Speaker 2:I figured.
Speaker 8:In fact, if I'll I'll plug this if you'll let me. You if you go to boomsupersonic.com slash referral
Speaker 2:Mhmm.
Speaker 8:And you send us somebody great. We're looking for great engineers, hardware, software, mechanical, propulsion, everything, technicians, CNC machinists. It's hard to find enough great CNC machinists. Send us somebody. We will send you a free Overture desktop model if we end up hiring that person.
Speaker 2:I love
Speaker 1:it. That's very cool.
Speaker 11:That's very cool.
Speaker 1:Well, this has been the best hard tech tour we've ever gotten. We've had a number of people attempt what you just did. It always it always goes poorly.
Speaker 2:It yeah. It's There was no It's a high stakes. It's very high stakes because, like, anything can go wrong with, like, your Wi Fi or anything. I'm very impressed. This is amazing.
Speaker 2:And and, honestly, it was just, like, chilling, watching, learning. This is really awesome. Normally, I have to ask way more questions to get information, but this was really informative.
Speaker 1:I'm so excited for you and the team Yeah. Put together great group of What
Speaker 2:a crazy story. I mean, the the I'm sure, like, the, you know, the the job's not finished. The book has not been written. But, I mean, I you know, I followed your career for a long time, and, it's, it's you're on an amazing run doing amazing things. So we appreciate you taking the time to come talk to us.
Speaker 8:Appreciate your having me and making this so much fun. Thank you, guys.
Speaker 2:Have a great rest of your day, and
Speaker 1:Merry Christmas. Cheers to the whole team.
Speaker 2:Talk to you soon.
Speaker 8:Merry Christmas. Over and out.
Speaker 2:Goodbye. And out. 8sleep.com. Exceptional sleep without exception. You close the $300,000,000 round.
Speaker 2:You need to sleep on an Eight Sleep, fall asleep faster, sleep deeper, wake up energized. If you're trying to build a 42 megawatt natural gas turbine while working on a supersonic jet. I want You definitely need to get one sleep.
Speaker 1:My eight sleep to be powered by a natural gas turbine.
Speaker 2:100%.
Speaker 1:I wanna just give me a mini boom Yeah. Turbine for my bedroom. Yes. Please. Just a small one.
Speaker 1:Yes. It doesn't have to be full scale. Yeah. But just something small that I can really rely on.
Speaker 2:Yeah.
Speaker 1:Because
Speaker 2:Yeah. It is weird. The the eight sleeps, you plug it into the wall, it's electric. You could get a diesel, a diesel version. You just fill it up with a little bit of diesel, and then and then you and then you you pull start it like a lawn mower.
Speaker 1:And just leave the window open. Yeah. So there's
Speaker 2:Yeah. So it just flows out. Yeah. I mean, the exhaust needs to, like, kinda flow out of
Speaker 1:the Yeah.
Speaker 2:Out of the house.
Speaker 1:But Or you could wear a mask and just run a, like, a a Well, that could be diesel powered too.
Speaker 2:Exactly. You have a diesel powered
Speaker 1:Any sleeping air out That's pulling from outside. That's fresh. Exactly.
Speaker 2:Exactly. Yep. But then you have a diesel motor running in. You put your whole house the
Speaker 1:diesel Your face is potentially Yeah. Kinda vibrating. But It'd be good. Can see it.
Speaker 2:Well, people are starting to talk some trash about met the old Meta Superintelligence Lab. Who? Zero point zero zero five seconds says, it's now painfully obvious that Meta Superintelligence Lab went on a massive hiring spree, promised the world, and delivered absolutely nothing. There has been a mass exodus. I feel like when, Alex Wang was a colossal mishire.
Speaker 2:When is Zuck going to clean house and admit his mistake?
Speaker 1:Let him cook. Let him cook. Let him cook. I was the first one I was the first one to say that Meta Vibes, like, should never have been released or at least advertised Yep. Publicly.
Speaker 1:I think it was definitively just not a good product.
Speaker 3:Yep.
Speaker 1:And but let them cook. Was I yeah. Again, the mistake is like people are gonna judge the first thing that your new organization releases. It felt rushed.
Speaker 2:Yeah.
Speaker 1:It looked bad in comparison to Sora. But we need to see the next version of Llama. I'm sure they'll call it something else. But give them give them more than What should they actually more than six months?
Speaker 2:Like, Google has been able Gemini, I feel like, has been able to carve out a really unique position with Nano Banana. And and, like, it went viral, and this was Anjaney's at in at the time. Anjaney Minhaj's, like, take about, like, Empire Strikes Back. And I have found that, like, you know, having the best having the best video model is a reason for people to go to your app. Having the best, you know, audio model, the best photo model, the best deep research product
Speaker 1:Nana banana is what what the rotisserie chicken is to Costco.
Speaker 2:Nana banana This is a great analogy. Great analogy.
Speaker 1:Right? It's a loss leader. It's like, come in,
Speaker 11:make a bunch
Speaker 1:of images. We're gonna lose a lot of money, but we're gonna get you hooked on our bread and butter. Yeah. Yeah. Our our Yeah.
Speaker 1:Language model.
Speaker 2:And so yeah. I mean, OpenAI has obviously developed just a great, like, back and forth chat experience. The the the voice mode is really dominant there. The deep research product
Speaker 1:It's possible that Zuck wanted his true believers to be able to accumulate Meta shares at around the 1 and a half trillion dollar mark because he wants to reward his most loyal
Speaker 2:Potentially.
Speaker 1:Soldiers.
Speaker 2:Potentially. Stammy here says, Limitless is acquired by Meta today End to a lovely journey with Rewind and Limitless. And Ryan Jones says, Zazaki's going on a generational run of Max Paranoid missing mobile. Really, really, really scared him because he just bought an AI wearable startup. He's still spending on the metaverse.
Speaker 1:I think it's obvious that Meta's just gonna keep shipping hardware. I think that this the Limitless acquisition looked like, you know, a soft landing for a team that had proven that they can ship products. Again, they did that I know they had customers because some of the customers were mad that Meta acquired them and they were talking about it. So, yeah, I shouldn't be a surprise. Don't think you can I I think it's hard to hard to argue that meta should just ignore any forward thinking product lines and just just do
Speaker 2:Yeah? Well, speaking of the metaverse, we should watch this video of a robot that was clearly being teleoperated, absolutely destroying a water bottle. It's one of the craziest videos I've ever seen. This is, like, so insane. So it it the operator clearly takes it feels like it should be AI or something.
Speaker 2:So the the
Speaker 1:Daniel says the hand coming down with enough
Speaker 9:force to
Speaker 2:float a water bottle, which is not easy to do. If you just have a water bottle and you're you can't just rip that thing open. But the the the the robot op the robot teleoperator takes the VR glasses off and then the robot just falls backwards. See you. Is this real?
Speaker 1:Imagine having one of these hanging out.
Speaker 2:It's comedic genius.
Speaker 1:Imagine having one of these hanging out in your office and it's just running bits all the time. Like, it's whole goal. I I I have kind of class clown energy in the office. Yeah. Yeah.
Speaker 1:But if I could outsource that to Optimus and just be able to focus more on my work and he's Yeah. Optimus is just going around running running bits. I mean, that
Speaker 2:know what we have to do? We have to get one of these robots that you know how they're how so many of the robots are are claiming, like, we're gonna do your dishes. We're gonna do your dishes. I just I want to just have okay. We're gonna all have a nice glass of wine.
Speaker 2:We're gonna put 50 different glasses, wine glasses of all slightly different shapes on the table and just tell the robot, hey. Clean up the clean up the wine glasses. Just load them all in the dishwasher. Nothing's I can barely
Speaker 1:do
Speaker 2:that.
Speaker 1:I I can barely do that without breaking.
Speaker 2:Yeah. All the time I'm smashing these things. Can you imagine one of these robots just completely decimating the the the
Speaker 1:Sure. I'll I'll unload the dishwasher just in there.
Speaker 2:Oh, no. No. No. Please. Allow me.
Speaker 2:Allow me to unload the your your your finest crystal stemware.
Speaker 1:This would be
Speaker 2:Allow me to unload your stemware.
Speaker 1:You discover an edge case where the robot thinks, well, to unload the dishwasher, I should break every glass and use a vacuum and just vacuum it out.
Speaker 2:It'll be good. Way easier
Speaker 1:than just taking them all out at once.
Speaker 2:Oh sorry, sir. Would you like me to polish your your your fine stemware?
Speaker 1:Oh, polish it into dust.
Speaker 2:Polishes it into dust. Anyway, our next guest is in the Restream waiting room. First, let me tell you about adquick.com. Out of home advertising made easy and measurable. Plan, buy, and measure out of home with precision.
Speaker 2:We have Naveen Rao from unconventional, CEO of unconventional AI in the Restream waiting room. Naveen, welcome to the show.
Speaker 12:You. Thanks for having me.
Speaker 1:Let's jump right into an introduction on yourself, companies you built in the past, and then we'll get into unconventional.
Speaker 12:Yeah. So I was, the first thing I built in the AI space was called Nirvana. It was actually their first AI chip company. It was back in 2014 before most people knew what machine learning was.
Speaker 1:Yeah.
Speaker 12:Just a little Pretty tough
Speaker 1:too little too early, but you're back.
Speaker 12:I think it was actually decent timing, to be honest with you. But, you know, I I think I sold too early, be honest. The second company was actually moving more toward the software and algorithmic side called Mosaic ML. Sold that to Databricks back in 2023, and I led AI at Databricks up until just a couple months ago where I left to start unconventional.
Speaker 1:Incredible. So, yeah, jump jump right into it. Talk about, you know, the vision. I feel like you guys the perfect amount of controversy yesterday because people were latching on to not a seed round at a $500,000,000 valuation, but a $500,000,000 of capital invested at the seed round. It was honestly perfect.
Speaker 1:You want a little bit of spice on the timeline to get attention, and I'm sure there's been a ton of inbound interest both from the candidate side and future customers.
Speaker 12:Yeah. I mean, obviously, was somewhat intentional. We wanted to have a big shocking moment. But I think it's actually pretty rational when you think about the opportunity ahead of us. So what we're doing at unconventional is rethinking how a computer works.
Speaker 12:You know, the computers that we use today, the the fundamental distractions have been around for nearly eighty years. And, And, you know, it's kind of weird to think about in the tech industry something being around for eighty years, but it it really is true. And now we're we've come to the point where we've pushed that paradigm as far as we can push it. You know, fundamental constraints around energy are now hitting us at the global level. Like, if we keep scaling AI like we're doing I mean, I think AI is amazing.
Speaker 12:I I use it all the time, and I think the rest of the world is gonna do that too. We can't get there. We're gonna run out of energy to scale these things up because it requires very power hungry chips. So really, we we are saying, we rethink the paradigm actually from the circuit level up and build something that's vastly more efficient, like a thousand times more efficient than what we've been building and focus prime only on AI. We don't need to do accounting software and artillery calculations and all the things that traditional computers do.
Speaker 12:We'll let that be in the realm of digital machines. But can we build something that's much more efficient for the substrate of AI? So the opportunity ahead of us, I think, is nearly infinite. And that's why valuation actually can make some rational sense.
Speaker 2:So what does your supply chain look like? Or how or what do you think it will look like in the in the near future?
Speaker 12:Yeah. I mean, when we started this project, there were two fundamental constraints I put on it. One is that we have to able to solve the problem within five years. Mhmm. Because this problem is gonna hit us in three or four years and we need to have a solution ready.
Speaker 12:At that point, when we have a solution, you can't have something that's like, I've solved the science problem, now what? We have to be able to manufacture it. Mhmm. So we have to have scalable manufacturing. So we believe we can solve this problem in a in a big way within five years that actually leverages the silicon ecosystem.
Speaker 12:Mhmm. So we do wanna manufacture it on standard lithography techniques. Now Oh, interesting.
Speaker 2:Yeah. Some of the ASML could potentially be a partner in the next five years. Like, they're not off the table.
Speaker 12:Yeah. TSMC, we we were talking with already. You know, I was out in Taiwan just a few weeks ago for this purpose. And, you know, it doesn't mean the be all end all. What we're doing is really building a new set of abstractions.
Speaker 12:Like, a computer is built on a digital abstraction. Can we move away from that and actually move to something that is more amenable to using fundamental dynamics of the substrate? And if we can do that, we can actually open up the world to a whole new set of, you know, potential substrates. Silicon is one of them. And maybe there'll be more exotic things.
Speaker 12:I've talked to folks who are building three d printed circuits and all kinds of crazy stuff. And so I think the world is gonna be very rich in the next twenty years in terms of new capabilities. Right now, we gotta leverage what we have.
Speaker 2:Yeah. I I mean, in terms of of leveraging what we have, I feel like there's been, you know, movement from, okay, g p NVIDIA GPUs are bust. Everyone's just doing that. Then we got some serious movement this year from AMD stepping it up. We got TPU.
Speaker 2:Tranium's looking pretty good. There's, like these ASICs are doing well. There's a whole crop of of ASIC startups that are saying, hey. We're gonna bake the transformer right onto the silicon. They're going with TSMC.
Speaker 2:Can you help me understand how you were thinking about, like, creating something that's higher performance but still leaving enough, like, flexibility to be able to actually work with, whatever the next algorithmic paradigm looks like.
Speaker 12:Yeah. I mean, one part of what we're doing is a very deep co design. So we're not saying here's a transformer and it's immutable. We're not looking at it like that. The the the way you define the neural network itself Mhmm.
Speaker 12:Is something that we're gonna change and actually link to the hardware. And if you look at biology, there is no difference between the definition of the neural network and the physical substrate. They're one and the same. So the dynamics, the physics of those neurons actually gives you the algorithmic richness that you have. So we want to move more in that direction.
Speaker 12:It's not this abstraction on a digital machine which is built out of numerics. All the machines that you highlighted just then, which all have a wonderful purpose, by the way, all work on the same fundamental abstraction. They all use bits to represent numbers, and those numbers represent weights that then are manipulated in some way to build a neural network. We're actually talking about building those sort of effective numerics on the physics. Yeah.
Speaker 12:On on the fundamental, properties.
Speaker 2:Do do you have a view on, you know, we were reflecting on this Mark Benioff post earlier in the show. He was kind of making the argument that LLMs are gonna commoditize, that, you know, it's like hard disks, and you're gonna be able to move them around. There's not a lot of value or not a lot of lock in at the, okay. I got this bag of weights layer. And I'm wondering if you have a view on how the the, you know, foundation model landscape will evolve over the next five years Because I want to know what your customer mix looks like, but you can kinda tie that together however you like.
Speaker 12:Yeah. I mean, transformers are something that works really well today. We were able to scale it up. We're able to prove out that we can build synthetic systems that learn. I think that was enormous in the last several years.
Speaker 12:Right? And actually, not just that learn that can learn, but can be useful. Mhmm. So now it's about, okay, well, we can define what useful is. Now we have these quality metrics for what a token is.
Speaker 12:That actually has opened up a whole new world to me in a sense where I can say, well, as long as I can supply that quality, I don't really care if it's a transformer. Don't really care what it looks like. And if I can do so very cheaply and very fast, that's all I care about. So now we're really getting to this almost pure play supply of intelligence. That's what we want.
Speaker 12:So now if if that's the abstraction, it's not about a transformer, it's about intelligence and I can define that with some metrics. Okay. Now I can supply that in new ways. And so that's the way we're looking at it. Like, I'm not looking at the world today.
Speaker 12:I'm looking at the world in four or five years in terms of a product.
Speaker 1:Yeah. Can what like, what do you what do you, can you break down more specifically what what you expect your, like, kind of first initial customer cohorts to to look like?
Speaker 12:Yeah. I mean, the way we're gonna see all of this stuff expressed is really much cheaper per token cost, like $1,500 the cost per token or something like that. And and I think our our cohort is really at first, we're gonna go after data center as the as the fundamental rollout. But anyone who's using intelligence for an application at that point, they're gonna actually have probably strict requirements on what the capabilities of the models are, what their what the token quality is defined as. Mhmm.
Speaker 12:So when we have that metric, we can build toward it. We can say, okay, well, GPT eight or whatever it is at that point gives me this. And is there a way I can recapitulate that in the kind of neural network we're defining? And the answer should be yes. And so we will have kind of strict specs in a way to build toward in terms of what that intelligence token really means.
Speaker 12:And so it's really our customer cohort will be anyone who's using AI as part of their application. And we wanna supply that faster, cheaper, and eventually in a more ubiquitous way. I mean, personally, if I really wanna look out there, like ten years, I think robotics are gonna be huge. And I think robotics require us to solve this problem of bringing energy down drastically to actually have more processing on on the bot itself. That's how we're really gonna open up this world of autonomy.
Speaker 12:Mhmm. And so, personally, I think that's where I'm really excited. Maybe that's just the kid in me. Excited about seeing that future, but I think that's where we're gonna go.
Speaker 2:What yeah. I I mean, you I know you talked a little bit about the the size of the seed round, but can you help me understand a little bit more? $475,000,000 is a ton of money. Is is there is there, like, a, you know, a bill that you see yourself paying where you're like, yeah. I'm gonna I'm gonna spend $200,000,000 on this, or is it more like you're just going to be operating at the level of, like, okay.
Speaker 2:We're burning a $100,000,000 a year on a lot of top engineers and AI scientists and, like, it's just a big organization early, and you're just kind of jumping to growth stage company scale as fast as possible?
Speaker 12:Not not really that. So Okay. I don't anticipate the company becoming huge in terms of people. Sure. Call it 80 to a 100 people.
Speaker 2:Oh, that's a
Speaker 12:steady state for a while.
Speaker 2:Yeah.
Speaker 12:But much like a Frontier Lab. Like, a Frontier Lab spends a bunch of money on GPUs to iterate. Yep. Like training GPT five maybe $30,000,000, but you gotta follow a bunch of dead ends. Totally.
Speaker 12:Right? And you do that with GPU compute. Our version of that is actually building hardware.
Speaker 9:Okay.
Speaker 12:So we're gonna be fabricating chips. We're gonna be trying different things. It's very hard to model some of this stuff actually numerically. And we're gonna do our best to model it, scale up that modeling actually on GPUs. But at the end of the day, you gotta build it, you gotta test it, and you gotta see if the whole thing works end to end.
Speaker 12:We're gonna do that a whole bunch of times.
Speaker 1:Yeah. Yeah. There's How are you are you planning to actually use existing Gen AI, kind of the existing Gen AI stack to accelerate your own development of of of an alternative to traditional, you know, GPUs?
Speaker 12:Yeah. Actually, that's a great question. There's it's it's really interesting. As we start clicking into, like, the the tools for designing hardware, they're still pretty far behind. You know, automation of digital logic is has been done to some degree as much like coding tools.
Speaker 12:But on the analog side, this is still relatively new. And we are seeing now companies that are saying, hey. I can explore the design space of different circuit architectures for you using AI. And, you know, we said, great. So we wanna either work with them or buy them.
Speaker 12:I don't know whatever it is, whatever makes sense for us. But, yeah, we are trying everything to use the latest techniques to accelerate our exploration of the space. That's the way we're looking at this is how fast can I iterate? How fast can I find working solutions? That's our main goal right now.
Speaker 1:Makes sense. What have you learned from racing that you've applied to company building? And what have you learned from company building that you apply to racing? Oh, boy.
Speaker 12:I think racing when you start getting into truly competitive events, you start to see that every tenth of a second matters. When you're coming into the pit lane, for instance, you have a pit lane speed limiter. Right? So I don't think people even know this, but when you when you come in, you you hit this pit lane speed limiter and when you drop below the pit lane speed limit, you hit the throttle and it pegs it at the speed speed limit. You basically wanna optimize that so you don't even lose a tenth when you come into the pit lane.
Speaker 12:You basically hit the brakes at a certain point, slow down, and you're and are at this pit lane speed. You don't wanna slow down ahead of time and kinda ease your way in. Yep. Every tenth of a second matters. And that may be in a even a twenty four hour race.
Speaker 12:And I think that's true with a company. Like, don't waste time. Every moment matters. You may make bad decisions. That's okay.
Speaker 12:Figure out how to back them out. Move as fast as you can. If you may if you hire the wrong person, fix it. And so I think the main thing I learned is that time is your biggest enemy, always.
Speaker 2:Love it. Love it. Well, we normally ring the gong for $475,000,000, but we should also ring the gong for 265 points in the Ferrari challenge.
Speaker 1:There you go. Yes.
Speaker 8:I'll take it.
Speaker 2:They're both massive accomplishments. But we're big fans for our challenge around here, so it's a big deal
Speaker 1:for us.
Speaker 10:Thank you
Speaker 1:so much.
Speaker 12:Imsa is where it's at, really.
Speaker 9:That's the
Speaker 2:big stuff.
Speaker 3:Oh, cool. Cool. Yeah. Yeah.
Speaker 2:We we were out in thermal, a couple weeks ago, and it was the first time for both of us on the track, and it was it was life changing. It was like a new, like, And I'm
Speaker 1:sure this is somebody that you probably shared at track.hobby. Here and there. Awesome. Anyways, congrats on on the announcement and everything, and the whole team sounds like an incredible place to go work right now. I'm sure I I can't wait to have you back on.
Speaker 2:And and what a murderer's row. You got Andreessen, Lightspeed, Sequoia, Luxe, DCVC, Future Ventures, Jeff Bezos, Databricks, and many others. What a fantastic way to kick off a new business.
Speaker 1:Very cool.
Speaker 2:Congratulations. Awesome.
Speaker 12:Thanks so much.
Speaker 2:Appreciate it. Your day. We'll talk to soon. Cheers. You too.
Speaker 2:Goodbye. Let me tell you about wander.com. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and 24 concierge service. It's a vacation home but better, folks.
Speaker 1:That's right.
Speaker 2:Our next guest is already in the Restream waiting room. We have the founder of Cremaeon. Welcome to the stream. How are you doing?
Speaker 7:I'm I'm doing great. Thank you very much for having me.
Speaker 9:I'm very excited to be here. Thanks
Speaker 1:for We're very excited as well here. Wanted to get you on last week Yeah. That we were on the road. And, yeah, very excited to chat.
Speaker 7:So thank you very much. Yeah. Last Introduce yourself.
Speaker 2:Introduce the company. We'd love to get, you know, how you're positioning it, and then I wanna go into the funding round, some of the implications of this. But, kick it off with a little bit of an introduction for us.
Speaker 7:So sounds great. As always, I always start by saying my name is Ophir. I married to wonderful Julian, father to Rome, objectively cutest baby ever born.
Speaker 2:That's a great intro. I love it.
Speaker 7:These are the important stuff. Yes. Less important stuff. I I started a few companies before. Okay.
Speaker 7:Actually, four companies to be exact.
Speaker 8:Wow.
Speaker 7:Most recent one was a company called Cloudundo, which we sold to Amazon on January. Grew the business to a billion dollar business
Speaker 2:Yeah.
Speaker 7:Doing migration and disaster recovery to the cloud.
Speaker 1:Let's give it up for migration and disaster recovery in the cloud. Doesn't get enough Absolutely. Get
Speaker 2:enough credit. It does not get enough credit. That's right.
Speaker 7:I agree. I'm actually this I was saying this crazy guy who really love data data data regression, data protection. Yeah. We we live this all so long, and both me and my cofounders and while we were there, we saw an opportunity that we just couldn't resist all those companies really moving to the cloud, especially around COVID
Speaker 8:Sure.
Speaker 7:And and later on. And all the incumbents in our space, they were born on premises, so we decided to start a company in cloud backup. Yeah. You could say cloud backup, isn't it solver already, like, in 1981?
Speaker 2:Yeah.
Speaker 7:Well, we figured out that as companies move to the cloud and become very significant, they have a very big problem Mhmm. Actually managing their data, managing the secondary storage, backups like tapes. These are companies storing their most precious data for a very long time and they can't access that. Mhmm. So we started as a backup company.
Speaker 7:I said, I'm this crazy person starting a non AI company in an AI world. Yeah. But then you know what? It hit me. AI is such a strong compelling event, which has strong tailwinds that we just I had
Speaker 2:mean, look at the Seagate and Western Digital stocks. They're through the roof this year. It's crazy. And makes sense because everyone's gonna need to store a lot more data. Everyone's creating so much more data.
Speaker 7:So much data is created all the time, and you always need data. And I don't know who's gonna win the compute wars.
Speaker 2:Yeah.
Speaker 7:Yeah. OpenAI, Anthropeak, Databricks, Snowflake
Speaker 2:Yeah.
Speaker 7:Yeah. Any area. What I do know, no matter what's gonna happen
Speaker 2:Yeah.
Speaker 7:Data is gonna be the enterprise mode. Yeah. And we are here to help them unlock the the this data. We're automating cloud backups. Sounds boring.
Speaker 7:Right?
Speaker 2:Yeah.
Speaker 1:Yeah.
Speaker 7:Making it into useful, accessible assets.
Speaker 2:Yeah.
Speaker 7:Statalix.
Speaker 2:Yeah.
Speaker 7:So you can back up all your data in a very seamless, easy way, but then use it
Speaker 2:As you can see
Speaker 7:to train models. Okay. That's all the hype. Right? Yep.
Speaker 7:And analytics and BI.
Speaker 2:Wait. So no so so no tapes? It's on drives?
Speaker 7:No tapes. Okay.
Speaker 9:No tapes.
Speaker 7:As it seems, with software only solution
Speaker 9:Okay.
Speaker 7:Only in the cloud.
Speaker 2:Yeah. Yeah.
Speaker 7:Cloud born. This is what we've been doing.
Speaker 2:Yeah. We will put this on on a public cloud or on your own cloud? Because I imagine that one of the benefits of backups and one of the one of the key things that people wanna buy when they're backing up data is, hey. I'm I'm already tied to AWS. I don't want everything on AWS.
Speaker 2:I want I want security. In case AWS goes down, I wanna back up somewhere else. How are you thinking about that?
Speaker 7:So and we've seen quite a few outages in the last few weeks. Right? And what we're saying with democratizing data, it's your data. Mhmm. Whether it's AWS, Azure, and GCP, great clouds or other clouds, we're making sure you can extract the data Mhmm.
Speaker 7:Make it portable between clouds, making accessible, performant Mhmm. Browsable, and searchable. You can search and browse all of your data and all of your history immediately. And because we're building our own software stack, software only, it's not gonna cost you a dime. Mhmm.
Speaker 7:It's actually cheaper than building it on your own or using existing cloud technologies to do that. So we're trying to make sure that we make it a we we give you an easy button as a customer
Speaker 1:Mhmm.
Speaker 7:To just enable the use of all of your data, make it accessible too. If you wanna run Snowflake or Databricks or Redshift or BigQuery or anything that you want on your data, that's great. Mhmm. We are here to make sure that you enable to do it on all of the data that you have and all of the data Yeah. That you had in the past.
Speaker 2:But how can you possibly be cheaper than the big hyperscalers, the the the big public clouds? I imagine that, you know, Microsoft, GCP, Azure, AWS, like, they're buying so many Seagate drives, so many Western Digital drives. How can you possibly compete on price?
Speaker 7:That's an, unbelievable question. Actually, I don't want to just win on price. Just want to make it easy for you. Mhmm. So what we're doing, even though we're still in the cloud
Speaker 2:Sure.
Speaker 7:Using cloud building blocks, object storage, GCS, s three, Azure Blobs, etcetera.
Speaker 2:Got it.
Speaker 7:We're building in a very different way Sure. And actually building a very more more efficient, it's called version of cloud snapshots Got it. That purposely built for backup and data retrieval.
Speaker 2:K. Mhmm. Yeah. That makes a lot of sense. Take us through the news.
Speaker 2:What's the funding news? I wanna ring the gong for a data storage company.
Speaker 7:Thank you very much, Emma. I'm also very excited. So we raised $500,000,000 in total, $300,000,000 just in this round. Really excited. Led by Elad Gil Wisson.
Speaker 7:Not only an amazing investor, he's also an amazing human being.
Speaker 2:Yeah.
Speaker 7:And the and we we got What's it like
Speaker 1:what's it like being what's it like being on a fly on the wall for when you and Elad get together and talk about data?
Speaker 7:Well, Elad is simply unbelievable. You know, he's one of the most humble people I've met, and at the same time brilliant brilliant and so well connected. I don't think I've ever seen an investor that everyone likes so much, and I have the privilege to choose amazing investor. I have Sequoia and Lightspeed and Greenox and Bold Bold Capital and and and likes of Omri Kaspey, who are just amazing amazing investors. And Elad Gill is is very unique.
Speaker 7:Actually, I saw we got preempted by 16 VCs, and I so wanted it to be Elad, really. And when Elad when Elad wanted to I'm gonna lead my around. I was in New York. He flew from San Francisco. He came to my office.
Speaker 7:He basically wouldn't leave until I signed. And to be honest, I really really want to do that because I got to know the person, not just the investor in the last few months and and year. He he put a small check-in a previous round. And honestly, we just fell in love, not just myself, my other cofounders as well. So
Speaker 1:That's incredible.
Speaker 7:When we had the chance, we had to do it.
Speaker 2:That's nice. That's incredible.
Speaker 7:And really, really happy and excited about it.
Speaker 2:Yeah. You
Speaker 1:wrote the book on high growth.
Speaker 2:High growth. You did.
Speaker 11:I know. I know. Yeah.
Speaker 7:Yeah. Absolutely. Absolutely. And I'm I'm really thrilled. We have now a lot of capital in a time when we cannot we can now plan ahead.
Speaker 7:We don't think need to think about the macro. We don't need to think whether everything's gonna continue to be rainbows and unicorns. Do we gonna have a a downturn soon? Who knows? But we know we can build a strong fundamental business.
Speaker 3:I mean, it's gonna
Speaker 7:this is actually for a long time.
Speaker 2:This is hilarious, but it's a great take. It's a great way to build your company and your business so that you can take advantage of these tailwinds, but also survive the headwinds. And congratulations to you.
Speaker 10:Absolutely. This is this
Speaker 2:is what we need. This is
Speaker 7:Exactly. We're here for a long time.
Speaker 2:Yeah.
Speaker 7:Okay. Yes.
Speaker 1:Forever. Forever. Is this your you want this to be you've you've done four companies prior to this. Do you want this to be the last one? You you just wanna just Last one.
Speaker 1:Last one.
Speaker 7:Yes. All the way to the IPO and beyond.
Speaker 9:Yes. Yes. That's my goal.
Speaker 2:Fantastic.
Speaker 1:Incredible. You have incredible energy. I'm excited to follow Yeah. Follow your journey and you're welcome on the show anytime. Thank you so much.
Speaker 2:Thank you very much.
Speaker 7:I'm really excited. I love your show. Amazing. Thank you very much. I'm gonna get back and tune to that.
Speaker 2:Thank you. Thank you. Great. We'll talk to you soon. Have a great rest of your day.
Speaker 2:Cheers. Goodbye. That that is worthy and valuable. We were debating what is worthy and valuable. That feels like a company.
Speaker 2:That's the worthy and valuable company of San Francisco.
Speaker 1:He's keeping That's
Speaker 2:what you need to do. I don't
Speaker 1:even I'm glad he's keeping our all of our data
Speaker 2:But I like
Speaker 1:backed up.
Speaker 2:Yeah. Yeah. It seems it seems it seems extremely He's
Speaker 1:he's that guy.
Speaker 2:Well, we have Gorkem from fall in the Rooster waiting room with some He's back. News. He's back on the show. You know him. You love him.
Speaker 2:Good to be back. He makes all of this possible.
Speaker 1:Every time you're on, I'm like, I he's gonna be back on.
Speaker 2:He's gonna be back You guys are gonna
Speaker 1:on a tear.
Speaker 2:Merry Christmas.
Speaker 1:Merry Christmas.
Speaker 11:Thank you so much. Good to be back in in the temple of technology. Capital of capital.
Speaker 1:Yes. There was one more. What what
Speaker 11:is fortress the finance. Fortress of finance.
Speaker 2:Yes. There you go. Thank you so much for coming on the show. Give us the news. What happened?
Speaker 11:Yeah. Today, we announced our $140,000,000 series d. It's led by Sequoia and meaningful participation from Kleiner Perkins and Nvidia.
Speaker 2:It's the Sequoia To be honest capital firms. We
Speaker 11:had an incredible year this year. We have some of the biggest advertisers, retail platforms Yeah. Design and productivity apps, and movie studios generating images and videos on the platform.
Speaker 3:Mhmm.
Speaker 11:And we we a like star revenue in the whole year.
Speaker 1:A star
Speaker 11:this is our third fundraise of the year. We we announced our series earlier this year in the beginning.
Speaker 1:And then So you got one more? You're going for the four peat, one a quarter? Come on. Come on. We got we got two weeks.
Speaker 2:We got two weeks.
Speaker 1:Couple Two more couple weeks.
Speaker 2:What's been what what's been the biggest driver of of revenue growth? Has it been uptime, you know, being a one stop shop? Like like, what what messaging has really resonated the the most and driven the most growth for you this year?
Speaker 11:Yeah. So beginning of this year, we thought we were gonna ride the AI video wave for the whole year. Mhmm. That that was that was accurate. It was it was an incredible year for AI video.
Speaker 2:Yeah.
Speaker 11:But what was surprising to us is actually rise of image editing. Mhmm. And, like, image models existed a couple years ago, like, that's how we started our business. But image editing, one of the first good models came out around May, and now it's a bigger part of our business than than AI video. That was surprising
Speaker 12:to us.
Speaker 11:So we thought we were gonna ride a big wave, but another even bigger wave, you know, collided with it and our Interesting.
Speaker 1:Well, is that is that surprising because I mean when you think if if it's very it's very common place now to like one shot a great image output and it's so much harder to one shot or even get a great video output. You can get a decent video output. So I feel like it makes sense. Everybody's making images all the time. It's like, it has it's it's like when you think about, in the workplace, there's just so many different use cases even even, you know, for consumers.
Speaker 1:So I think it makes sense. And it really is just exciting because as the image models feel like they're so good now. Everybody's so used to seeing it and getting kind of like faked out by an image now because you can't tell the difference. Video, you can still usually tell. Yeah.
Speaker 1:But it feels like maybe in a year from now, it'll be the same situation where it's like, I just don't know what's real. I don't know what's what's fake. It's it's all confusing.
Speaker 11:100%. Video video models are still very hard to work with still. Some really talented AI creative people create great content with it, but it hasn't really reached mainstream. I would say it it takes even more effort to create an ad with a video if it's, like, high quality than actually shooting it yourself. But what happened with image models is gonna happen with video and the user experience of video models are gonna gonna get much much better and you'll have even even more mainstream adoption of of these models.
Speaker 11:I'm pretty sure of this, and that's what makes me really excited because we we went so far. It's it's a lot of image models, a lot of image editing, just just a glimpse of video models, and this this is all gonna get better and better, and it's gonna reach complete mainstream. All the studios, all the retailers are gonna make use of this technology.
Speaker 2:How how Oh, sorry.
Speaker 1:Yeah. Just what are what are you seeing? Like, how how are you thinking about twenty twenty six from a model progress standpoint? Nano Banana was obviously a massive leap. I'm expecting we'll see even more activity in 2026, but sure you have somewhat of a preview just given given your guys' position in the market.
Speaker 11:Yeah. Exactly. So, usually, one of the Frontier Labs pushes the boundaries. In this case, it was Nana Banana twice this year. It was, like, their first release, and now this very recent Nana Banana Pro release.
Speaker 11:But very quickly, e either the open source community or or labs from China, people catch up. There are a couple reasons for it, to be honest. Once once they see there's demand for it, once people know exactly what to build for, it's usually easier for them to get more motivated and catch up. But also some of the tricks, some of the the research tricks leak, and people use them and and train these models. The the model market for generative media is a lot more fragmented than LLMs.
Speaker 11:There's so much choice. There's so many models that are different than that are better at different things that the the best model keeps changing. Even Nana Banana was dethroned a couple times throughout the year. Right right now, it's considered the best image image editing model, but I don't know how long that's gonna last.
Speaker 2:What are you, excited for, in terms of capabilities for next year? Do you have do you have specific, like, benchmarks that you're tracking or even, like, functionality. Like, I've noticed well, I have one that's the Where's Waldo test where Mhmm. I will ask you to generate a full Where's Waldo, and even Nano Banana Pro still can't quite do it. It'll either put Waldo right at the center, or it'll make two Waldos.
Speaker 2:And the those images in the child children's book are really complicated. It's not just a portrait, and there's maybe not enough training data on the Internet. But that's one test that I've been tracking. Do you have your own internal benchmark or, you know, that whatever you think is, like, next, the thing it can't do right now?
Speaker 11:Yeah. I have some of my favorite prompts that I try with every single model, but I rely on, our team. We have Sure. Great creative people in the team. They spend all their living hours working on these models.
Speaker 11:They are usually ones coming up with very very creative ways to utilize. Yeah. One thing that changed with Tonabanana is you can actually feel the model has more world knowledge than than other models, and that opens up other door. I I don't know. Have you seen people are now adding some web search and creating, like, newspaper articles on the fly, things like that There is there are very creative uses of these models.
Speaker 11:And on the on the video side, people really want more controllability. They want character consistency. They want scene to scene consistency. And some of the releases that happened recently, Cling, for example, is is one of the better video models out there. Yeah.
Speaker 11:They've announced some editing capabilities which are pretty remarkable, and all of that is gonna get easier to use. And once people have more consistency with the scenes they are creating with with video models, I think that's gonna make a big difference.
Speaker 2:Yeah. I always see those videos of, it's the little yachty walkout, that is, like, character swapping. And it's always really obvious what's going on. It's rough around the edges, but it's still hilarious because it's a great meme. And I definitely would predict 2026 is the year that that that little Yachty walkout just looks 100% real.
Speaker 1:100%. Next next fundraise announcement.
Speaker 2:I can't wait. I can't wait. Yeah. Yeah. Yeah.
Speaker 2:Yeah. We need to do that for you. We need to get get your body scanned a little bit.
Speaker 1:Get us You know, we've never asked this question, but you might know the answer. Do you know why it's called Nano Banana Pro? Where do you have any idea what the origin is of the names?
Speaker 11:So they had a code name, Nano Banana. Usually, when they put these models into the benchmarking websites, they usually add a code name. Like, they were blueberry was one one code name, red panda was another, and this was nana banana, and people recognized the model like that, and they kept it. That's the story I know. I don't know if there's another there's another version of the story.
Speaker 2:But I I guess the other question is, is, obviously, it is a code name, but where did the code name come from? Google has a long history of using fruit, although so does, OpenAI with strawberry. But all the Android, iterations were like ice creams and desserts for a long time. Yeah. But the question is do whatever.
Speaker 2:Yeah. Is is is what's the nano doing there? Because I want the full banana. Give me the don't give me the nano banana. Give me the give me the gigabanana.
Speaker 2:I want the gigabanana, the biggest exabanana, the mega banana. I want the biggest banana model. Don't give me the shrunken down nano one. I want the I want the gigabanana.
Speaker 11:Yeah. I think it's using the smaller Gemini model as the as the LLA.
Speaker 2:That's the reason
Speaker 11:it's that's the reasoning. That's why it's nano.
Speaker 3:But Yep.
Speaker 2:No. No. It is nice. It's funny. It's funny to have fun with.
Speaker 2:Anyway, thank you so much for coming on the show. Congratulations on the massive news, and thank you for supporting us all year long.
Speaker 1:And you gotta if you eight x again next year, you gotta eight x the number of fundraises too. That put you at, like, two fundraisers you guys are. Two fundraisers a month two fundraisers a month, 24 for 2026. We'll see.
Speaker 2:That'd be great.
Speaker 1:But, congratulations to the to the whole team, and, we're very excited for you guys.
Speaker 2:Have a good one.
Speaker 1:Thank you so much. Cheers.
Speaker 2:Bye. Well, we have our next guest already in the Restream waiting room. We have pray Pedro from Braxx, the founder and CEO of Braxx, announcing a massive partnership. We're very excited to welcome him to the TVP And Ultradome.
Speaker 1:Welcome.
Speaker 2:Great to see you, Pedro. How are you doing? How's your day? Merry Christmas.
Speaker 5:I'm great. How are you guys? Thanks for having us.
Speaker 1:We're great. We're in the we're in the Christmas spirit.
Speaker 2:We are in
Speaker 1:the Christmas spirit. Bells. Very very holiday themed holiday themed shows for the rest of the year. Yes. Yes.
Speaker 1:But but it's great to it's great to meet.
Speaker 2:It's great to have you on the show. Yeah. Please take us through the news today. Oddly, I'm actually a fifth third customer. So I I wanna I wanna know how this this this applies to me.
Speaker 2:Yeah.
Speaker 5:You get a Braxton cartoon. No. So in all seriousness Yeah. Thanks for having me.
Speaker 2:Of course.
Speaker 5:Today, we're announcing a pretty big partnership between Braxton Fifth Third Bank. It's a $5,600,000,000 commercial card partnerships where effectively wow.
Speaker 2:Massive. So good. Heard a
Speaker 5:big number. I have to say.
Speaker 12:I want big numbers.
Speaker 2:That in my office. Fantastic. And
Speaker 5:and we're really excited just because, you know, when you look into across all The US and we just see, you know, tens of thousands of businesses out there, there are still 98% of businesses are still using legacy corporate cards. And,
Speaker 2:you
Speaker 5:know, there's so many there's so much opportunity in just automating how these teams run their finances. And Fifth Third just has this massive distribution and trust. And, of course, Brex has the the financial services and the the software and the AI that just helps these businesses automate so much of their manual work and better allocate capital. The Wait. So when party.
Speaker 1:Yes. Sorry to interrupt. I'm curious when when you guys started working on embedded products. Because if you go back to 2021 and 2022, I'm sure there was a bunch of companies that or at least a few that got created to go and pitch some of these same banks and say, hey. Your corporate I don't know if people remember.
Speaker 1:Anybody that remembers SVB, like, corporate cards back in the day I
Speaker 2:had I had a few of those.
Speaker 1:UI was truly insane. It was it was like, how is this how
Speaker 8:is this And you had like a different
Speaker 2:you had like a different login too. It was crazy.
Speaker 1:It was truly the most famous product experience of all time.
Speaker 2:And it was like, this is Silicon Valley Bank. We're supposed to be the tech of to talk But but Yeah. A dead horse there.
Speaker 4:Yeah. Kind of
Speaker 11:a dark moment.
Speaker 1:At some point, you said, like, hey. We like like, we'll go compete here as well.
Speaker 5:Yeah. Yeah. So so for us, it's really been driven by by a lot of just customer demand. So we saw we started this with with Navon and Zip, where they really saw a lot of the value in bringing financial services and card workflows into their software.
Speaker 4:Sure.
Speaker 5:And we're really excited about it because it's just a one plus one equals five situation. Both products are coming better together. Yeah. And then as we thought about the rest of The US and, you know, there's, you know, 8% of businesses are now, you know, accessible through this partnership, for example, in The US, which is a really exciting thing in the commercial space. And and the really big thing is how do we make the bank's product materially better.
Speaker 5:And when we bring the technology and, you know, what we've done on the card side and especially the financial infrastructure that we build from scratch, Like, we don't run on Stripe Issuing or Marketa. We just build our own rails from the ground up that enables a partnership to actually take place. So it's How
Speaker 1:does it how does it actually work? Is it is it fully white labeled, or does somebody in in the first third get kicked out? What
Speaker 5:No. No. No. It's actually it's actually a fully a fully Brex branded card. And and the reason is because Fifth Third wants to have someone that's actually responsible for delivering this great customer experience on the card and implementing the software and rolling that out to their customers.
Speaker 5:And what they do really well is the banking side. Right? It's the lending side. It's the banking. It's the relationships and Mhmm.
Speaker 5:You know, the thousands of branches and just the thousands of distribution partners that they have on their side. Mhmm. And the tens of thousands of customers they serve are all effectively reliant on them and already have that relationship. And now they get a Brex card, which we're really excited.
Speaker 2:Yeah. Sorry. You mentioned you're not you're not using Stripe for what was it? Issuing. Issuing.
Speaker 2:Does Stripe or do do are there other fintechs that do play a role in, like, your supply chain, or are you, like, down at, like, an ACH layer? Like, just like, what what's kind of going on under the hood?
Speaker 5:Yeah. So what we've done since 2018 on Brex is we actually build our own financial infrastructure from
Speaker 2:Okay.
Speaker 5:So we actually went straight to the metal on Mastercard and built everything from the ground up. And because we vertically integrated the whole thing
Speaker 2:Sure.
Speaker 5:This created this pretty big advantage on everything that requires, like, bare metal capabilities on financial services. So for example, global. Right? We operate in over 200 countries today with local cards, local issuance because for us, it's just a matter of saying, hey, Mastercard. We're gonna issue in Europe or Brazil or India or Mexico and just flipping a switch for them because we are our own issuer.
Speaker 5:We we run our own stack. Yeah. And then Fifth Third was another example where we said Fifth Third wanted to issue a Fifth Third issued card. They they wanted to be their name on the card. It has to be under their license on Mastercard and all of that.
Speaker 5:And for us, it's just effectively, you know, bringing in a new bank live, which, you know, we have a few banks on the back end and including Fifth Third, of course. So for us, it was it was sort of digging back on this advantage that we've had over over many years by building our own rails from the ground up, which is really How
Speaker 1:are you how are you thinking about we've had bunch of different teams and companies on the show building, like, new layer one blockchains for payments. They're touting, like, speed, default global, all these things. We've had a bunch of stablecoin issuers and and business. I'm sure in conversations that you have, you know, you're you're being pitched these companies from to be an infrastructure provider. I'm sure your your investors are, like, maybe asking you sometimes, should we should should should there be a Brex stable?
Speaker 1:You know, who knows? Right? I'm sure these questions are coming up. How do you think about kind of the layer one landscape? And you're you're operating a a global business today.
Speaker 1:And so I would I would, you know, your opinion on some of this stuff in terms of the the real value of it, I I feel like, would carry a lot of weight.
Speaker 5:Yeah. So the way we think about it is maybe a little bit different, which is we we think that first, like, stablecoins and and and blockchain, you know, have a, you know, tremendous application, and we're really excited about a lot of the work there. We know we announced support for Stablecoins this year when it comes to our banking product, and you can pay the card to Stablecoins. We've done a lot of that. But when we count when it comes to global, right, and and just serve supporting customers in a wide variety of countries, really, the the challenge there is the on ramp and off ramp, right, and specifically, you know, the the the fiat last layer for, you know, an employee to reimburse you in, you know, Indian rupees or Brazilian reais and then to for you to settle the card in that currency and do all that locally.
Speaker 5:And, unfortunately, stables don't help you that much on that last layer. And the whole actually, a misconception about the way our our global product works is a lot of the value comes from remainings in local currency because what they're trying to do is minimize FX. Right? Even on staples, like, has a cost just intrinsic to it. Sure.
Speaker 5:And a lot of what we're trying to do is keep you entirely in reals. So your revenue in reals in Brazil are settling. Your expenses in reals or in euros or in GBP or whatever currency you're in. So a lot
Speaker 7:of the infrastructure we build is
Speaker 5:to enable this multicurrency and multi entity operations versus having to do the effects and a lot of the benefits that stable typically bring to the table. So our use case is a little bit different.
Speaker 1:Mhmm. I'm sure that's disappointing to people building global payments all once, and they're like, wait. You're supposed to need this.
Speaker 2:I mean, we we do
Speaker 5:use it internally for some stuff, but but, you know, I would say the value prop for our customers is we stay in local currency as much as possible because it just minimizes so much savings and effects. Yeah.
Speaker 2:What what what are the other, like, keys to success? Obviously, you you you know, you have experience internationally, but you're, like, a YC company. I think I think of Brex very much as, an American company. But then in terms of winning internationally, what does it take? What what have the lessons been?
Speaker 2:What are the, what are the interesting insights? Or what were some surprises that that, cropped up on the journey?
Speaker 5:Yeah. So I I would say the biggest one is that when you go into, like, true global, like, true enterprise, the amount of requirements and specifically on both the card and expense management side is unbelievable. So you have these rules, for example, local per diems. So when you are in Europe, there's these rules that if you have a German employee traveling to London, there's one set
Speaker 7:of rules. If you
Speaker 5:have a London employee traveling to Germany, completely different set of rules. Woah. And then if they rent a car, there's different mileage requirements, and then you all this information is something you have to be aware of. And, you know, of course, we use a lot of the car data to make that easier, and and we can solve it automatically. But probably the the the the biggest challenge overall is just building the core financial infrastructure because this is something that, you know we're literally the only issuer in The US that actually had done this from scratch.
Speaker 5:Mhmm. And just the amount of time and energy that we dedicated into building these, you know, core financial services infrastructure Mhmm. Is pretty tremendous. But, you know, it gave us a a pretty big advantage when it comes to these enterprise customers. And, you know, today, we have maybe three or four years ago, I think we had five or maybe 10 public companies in Brex, and now we have 250 and growing.
Speaker 5:So Wow. That's a good exciting thing.
Speaker 2:That's amazing.
Speaker 1:Awesome. Yeah. Yeah. Well, congrats to the whole team
Speaker 2:Yeah.
Speaker 1:On the deal. Congrats to Art. Yes. And Love Art.
Speaker 2:Chief business officer. Correct?
Speaker 1:CBO. CBO. CBO. He was coming in to defend Keith Raboy last week was Oh, was talking some smack about the the BD BD people of the world.
Speaker 2:Does Arti think have a chief business officer? Because they just got a CRO. They have a they have a CFO and a they have two c letters. I think they're missing a CEO.
Speaker 1:Title today.
Speaker 2:You gotta lock down Art. He's gonna get poached.
Speaker 5:Art is taken. Art is taken. Don't don't listen to them.
Speaker 1:Awesome. Well, yeah, congrats to the whole team. Congratulations. On the show.
Speaker 5:Yeah. Thanks for having me. Appreciate it.
Speaker 2:We'll see you soon. Have a good one. Merry Christmas. Yep. Merry Christmas.
Speaker 5:Thank you. Merry Christmas.
Speaker 2:Ho ho ho. Christmas. Ho ho ho really gets me every time. I've I've been thoroughly enjoying it. I I love that I love the idea of of country specific per diems because if I had a German employee, I would want them to know that they are not an American employee, and they are second class citizen in this this organization.
Speaker 2:And they will be not they will not be dining out on the company dime in a nice They will eating sauerkraut in the gutter for $5. No.
Speaker 1:That's brutal. The most American the most American American, John Kugen, everyone.
Speaker 2:Yes. Yes. Well, speaking of travel to international countries, if you go to Saudi Arabia, you can now booze it up. Guess you can drink alcohol. Saudi Arabia is loosening alcohol rules, letting non Muslim foreign residents earning over $13,000, you can buy alcohol.
Speaker 2:So you have to check you have to do a whole checklist.
Speaker 1:Daniel's line is great. He says this is such a galaxy brained idea. It could only come from a mind totally disconnected from normal material reality.
Speaker 2:It's hilarious.
Speaker 1:It is it is interesting.
Speaker 2:Imagine being like, hey.
Speaker 1:If you wanna do, you know, drugs, if you wanna Yeah. Consume alcohol
Speaker 2:Yeah. You gotta
Speaker 1:be fine. Numbers. But you have to be putting up numbers.
Speaker 2:Yes. Yes. Exactly. Putting up numbers. Right?
Speaker 2:And so, you know, if you're underage
Speaker 1:Actually, cannabis should be, like, $10,000,000 a year on your w two.
Speaker 2:I was about to say. But you know what happens then? So you have, everyone in America, you know, you turn 17, 18, 19. You're not 21 yet. You get a fake ID to try and buy some booze.
Speaker 2:You're gonna need a fake w two as well. You're gonna need to fake your income statement, and you're gonna need to do all these crazy things where where you have all these, like, circular deals.
Speaker 1:Your your fake w two to the corner liquor store just being and then just, like, looking through every line.
Speaker 2:In Saudi Arabia. So you you're in Saudi Arabia, and let's say you're making a thousand dollars a year USD or, you know, you're making 10,000 rales, you need to go and set up a circular contract where where you're a 17 year old, somebody else is 17. I pay you 10,000. You pay me 10,000. And then we get
Speaker 1:our couple times.
Speaker 2:Exactly. Do it a couple times, then we're earning enough to go buy alcohol. We can go get drunk together.
Speaker 1:That is crazy.
Speaker 2:That is truly galaxy brained. We're we're we're out galaxy braining them. We're gonna we're gonna galaxy brain all the way to the top. We do have to hop on with Riyadh soon. Let's close out with anything else that's on the timeline.
Speaker 2:Jordy, why don't you take a pass? Let me know if there's anything that we make that we
Speaker 1:Fluid stack raising
Speaker 2:$7.00, this is
Speaker 1:100,000,000 out of $7,000,000,000 valuation
Speaker 7:Okay.
Speaker 1:Built on Google backed leases
Speaker 2:Mhmm.
Speaker 1:For new AI data centers according to Rohan Paul. Mhmm. FluidStack, a real player on the semi analysis. What's what's it called?
Speaker 2:The ClusterMax.
Speaker 1:ClusterMax. And so not not surprising here. Interesting that potentially you've got Leopold looking to lead the financing. So dipping his toes into privates.
Speaker 2:Well, yeah. I mean, they have cluster max over at Semi Analysis. They have inference max. Are they going to do looks max?
Speaker 1:Potentially.
Speaker 2:They could.
Speaker 1:We it looks like according you know, looking at some of our officials, it looks like we might be developing a strategic lux maxing reserve.
Speaker 2:I I mean, there are lots of people that would comment on lux maxing and try and rank, like, the hottest men in tech. I personally would only I I would only regard semi analysis opinion as credible on
Speaker 1:that Yeah.
Speaker 2:On that issue, specifically. It must come from them.
Speaker 1:Post here, from Buko. He says, Haktan acquired VMware, had coffee chats with the employees where he made fun of them. This is good. Half the business. So, little excerpt here.
Speaker 1:Earlier last year, Broadcom CEO Haktan decided to host what he likes to call a coffee chat with employees of VMware, the software giant that Broadcom CEO had recently purchased for $84,000,000,000. The company wide meeting was Tan's effort to introduce himself and answer questions from those employees about life at the semiconductor firm. Crazy. At the time, VMware's Palo Alto campus sprawled over 18 buildings and a 100 acres of delicately pruned gardens, an outdoor amphitheater, and a turtle pond. Employees enjoyed nice HR perks, including childcare, marital counseling, and an annual thousand dollar well-being allowance for anything from dumbbells to Xboxes.
Speaker 2:Thousand dollars in Xboxes? That's like one Xbox every three months. That's so many Xboxes.
Speaker 1:You can actually only spend
Speaker 2:this on Xbox. Why do you do?
Speaker 1:When Tan opened the discussion up to questions, a VMware employee asked if Broadcom provided such benefits. Tan Tan seemed surprised. Why would I give you any of this. I'm not your dad, he replied. I'm not your According to three people in attendance.
Speaker 2:We need a trading card. I'm not your dad.
Speaker 1:Over the next few months, Tan fired about half of VMware's 38,000 employees. That is wild. He also stripped down hands selling all but five of the buildings. At the remaining offices, Tan had the espresso machines removed. Okay.
Speaker 1:Well, that is a question.
Speaker 2:They need to stay caffeinated.
Speaker 1:I gotta hold the line here.
Speaker 2:What are they doing? I mean, I'm okay with I'm okay removing the stresses
Speaker 1:white monsters instead?
Speaker 2:If they're doing white monsters, then I approve of it. But if you're gonna have a decaffeinated workforce, that just makes no sense. That's just not elite performance.
Speaker 1:He says, the article says, somewhat against the odds, the turtles were allowed to stay. So Just Do you think do you think he he's putting espresso in the turtle pond?
Speaker 2:No. I imagine I imagine he had a he had a, like, a massive broadsword and was above the turtle ready to let it all
Speaker 1:They're like cocked.
Speaker 2:No. Like, oh, I can't do it. And he drops the drops the blade and it falls to the ground, clanks him, and he says, you live to fight another day, turtle. You're too important here.
Speaker 1:It's got him making, TPU.
Speaker 2:Completely different vibe from when Pat Gelsinger was getting a VMware tattoo on his arm or temporary tattoo, least showing his love for the company that he just bought while he was at Intel. Hawksand, clearly cut from a different cloth, but clearly also putting up big numbers. Broadcom's been on an absolute run.
Speaker 1:Alexis Ohanian says, been warning y'all. AI everywhere, dead Internet, real is increasingly scarce online and thus increasingly valuable. Mhmm. Wired article called AI Slop is ruining Reddit for everyone. This is my this has always been there's such an incentive for companies and
Speaker 2:Yeah.
Speaker 1:People to just like, create synonyms on Reddit. Totally. AI is training on Reddit. Yep. And, the natural end state is, you know, it's 99.9% bots and just a handful of humans.
Speaker 1:Stick to the group chats, I guess.
Speaker 2:Yeah. In other news, Netflix has launched Best Guess Live, a new Netflix mobile game show where guessing the right answer based on five clues could win win you thousands. Dylan Abercrombie
Speaker 1:Now is in this economy? Come on. Not not a secret. Oh, they're oh, they're willing to spend $80,000,000,000 to get Warner Brothers? 40,000,000,000 per
Speaker 2:Warner Brothers. You they should give you some IP. You should be able to win Porky Pig. I get Foghorn Lego.
Speaker 1:Or some of the masculine, films.
Speaker 2:I want the Steven Seagal rights. I want the rights to Hard to Kill, for sure. Dylan, Scott on our team team says, can I copy your homework? Yeah. Just change it up a bit so it doesn't look obvious.
Speaker 2:You copied, of course, he worked, at, you know, a competitor to this or or the precursor to this.
Speaker 1:He created game shows.
Speaker 2:He created game shows with HQ trivia, which you should know.
Speaker 1:Rune says a lot of people think CEOs are on coke or stimulants because of how hyper they look in interviews, but I think the unfortunate truth is that natural amount of energy is extremely unequally distributed.
Speaker 2:I was going back yeah. I was going back and forth on this one. Obviously, it's a subtweet of CART, but I I I think he's I think he's just like that. I think he's just I think he's just high energy. And I think that so the the carp clip looks crazy as a single clip, But I actually watched the full interview, and there is a flip on it, which is maybe more negative, which is like, that was a question he was squirming on.
Speaker 2:Like, that was an uncomfortable question. And I noticed it on this show all the time. If we ask someone a question and they're, like, not that happy that we asked that question, you'll see on their body language, like, cross their arms. And and crossed arms is a is a is like a well established body language for, like, I'm closing myself off versus like if I'm hanging out here with you, I'm just having a good time.
Speaker 1:If I'm Right? Sitting up and
Speaker 2:Yeah. Yeah. And so and so there's a world where where where you're literally they call it being in the hot camera.
Speaker 1:They just needed a better camera tracking. So
Speaker 2:Yeah. They call it being in the hot seat. And when you're in the hot seat, you're kinda bouncing around. And, yes, it can look like you're on a lot of stimulants. Maybe you're on some caffeine.
Speaker 2:Maybe you're a little wired. But, also, maybe you're dealing with a serious inner interviewer, Sorkin, across from you on a stage. There's nothing to help you on a deal book. Like, the the the crazy thing is you keep seeing people's legs all funny, and it's like, because you're just in a chair. There's no desk there, so there's nothing covering you up.
Speaker 2:So it's like, you're very vulnerable. There's this big wall.
Speaker 1:Has somebody has somebody done that?
Speaker 2:Everyone's looking at you. And and, also, it's not just a private conversation where it's like, you and Sorkin are just hanging out here having a normal conversation. Like, there's a couple people. All of our friends are here. Right?
Speaker 2:Imagine it's like all of your rivals are in the all of your rivals
Speaker 1:All your haters are watching online.
Speaker 2:Are watching online, and all of your rivals are in the building in the seats right there looking at you, answer tough questions. I don't know. It it just feels like this is not that crazy of a reaction for a high energy guy who's kinda quirky, who's in that position, and is asking is is answering some tough questions. I don't know. But
Speaker 1:Tyler, figure out how to use AI to run an analysis on every guest we've ever had to see who and just rank their body language from most trustworthy to least trustworthy.
Speaker 2:Yeah. I did like Gabriel here. He says, he's quote tweeting someone who's like, there is zero chance that these hyper animated CEOs are just naturally that way. Kind of the counter to what I was just laying out as an argument. And Gabe says, cocaine expert here.
Speaker 2:These CEOs do a lot of cocaine. Feels like a very twenty twenty five moment somehow. And I agree with that. I agree with that. It it is a very weird weird thing.
Speaker 2:Well, in less weird headlines, we have some fantastic news from Lulu who has raised a $40,000,000.
Speaker 1:Give me the mallet. Give me the mallet. I don't know how you go for it. Too late. Too late.
Speaker 2:Congratulations to Lulu.
Speaker 1:This photo goes hard.
Speaker 2:It's a good it's a good photo. She It's proper paparazzi. She got caught by the paps. The paps got her. This is a throwback photo from when she was working on the Microsoft Blizzard deal.
Speaker 2:Mean, the fact that she's a board member at Activision is just crazy at the time. A a $80,000,000,000 company. You know, people talk about Lulu like she's some, like, you know, small time PR adviser for startups, but it's like she was on the board of a additionally had billion dollars
Speaker 1:She also
Speaker 2:in children's board of Shopify.
Speaker 1:Right? Flies under the radar.
Speaker 2:Yeah. Well, we're blowing up or we're blowing up here now. Sorry. Yep. Sorry about it.
Speaker 2:Anyway, at least it's at the end of the show.
Speaker 1:Lisan Al Gayebe Yeah. Says, the normies are waking up on TikTok. They're saying Chatuchiputti is washed. John says, perplexity is goated. Hard to say Claude is beefy.
Speaker 1:Ranking them.
Speaker 2:They're all over the place. Claude, greater than Gemini, greater
Speaker 1:than Never be washed. You don't wanna be cooked either.
Speaker 2:Yes. We've this. We've learned this.
Speaker 1:Washed, cooked, or chopped. From our If you're a language model that meets Gen Z adoption.
Speaker 2:From our Gen Z employee who is currently both chopped and cooked. He's not here. We hope he gets not you. The one who's sick, who we hope gets better soon. But we didn't learn any lingo from you, Tyler.
Speaker 1:Luca says, what people get wrong, OpenAI's Code Red is bullish, not bearish. It's an admission. They were overeating, getting beat, and needed to focus. That's what great teams do. Now here's the challenge.
Speaker 1:Code Reds are really hard. It's easy to say yes. Hard to say not right now. Yep. All eyes on how they execute Code Red.
Speaker 1:I'm skeptical. Overeating seems to be embedded in the culture. Same, obviously, likes to dabble in a lot of things.
Speaker 2:Every Code Red is followed by a Baja Blast.
Speaker 1:That's right.
Speaker 2:Let's get
Speaker 1:rid of think the next model should be
Speaker 2:Baja Go back to the crazy names that make no sense. Stop it with the 5.2 tomorrow. Wait. Wasn't 5.2 just supposed to come out today?
Speaker 4:That was if you looked at Polymarket, that's what
Speaker 2:it looked like.
Speaker 4:It's now moved to, I think, by December 13. Okay. It's like 90%.
Speaker 2:So Yeah. Yeah. Yeah. Anyway. But also What have got?
Speaker 4:This is a separate topic, but I need to put you in the truth zone. There actually are spots on the moon that are perpetually in sunlight.
Speaker 2:Oh, really? You figured it out.
Speaker 4:Rims of certain craters. Oh. The inside of them are always in darkness. The the rims are
Speaker 2:The rim on the crater is always in the sun.
Speaker 4:Yeah. That's So where we need the data center.
Speaker 2:Okay. Well, how much how much crater rim is there? Is there enough crater rim to actually build a lot of data centers?
Speaker 4:If there's not, you could probably nuke the moon,
Speaker 2:make more more craters?
Speaker 1:Yeah.
Speaker 2:Yeah. I don't I I still have trouble visualizing this. Doing like the celestial body physics math in your head is very, very difficult.
Speaker 1:In other news Confused. This person on XKeenu Nazari says they got their hands on some North Korean cigarettes.
Speaker 2:They did?
Speaker 1:They got them in a DPRK state owned restaurant from a waitress No who was from Pyongyang. Basically impossible to find any background info on them online. They taste and look a 100% what is that? Zuzh?
Speaker 2:I have no idea.
Speaker 1:But I like the packaging. The packaging goes pretty hard. It feels
Speaker 2:Does. Very I can't support it because I don't support North Korea.
Speaker 1:And this is a good place to end the show. Sag Harbor Capital says, if this niche Scandinavian brand doesn't ship my overcoat in the next twenty four hours, I'm gonna blow up the Nord Stream two pipeline.
Speaker 2:That's really funny.
Speaker 1:He tags the brand too.
Speaker 2:You mean he does? Where? Yeah. Oh oh, wait. Bergen Bergen.
Speaker 1:I need an overcoat. I I was trying to just go around New York last week Oh
Speaker 2:god.
Speaker 1:Just my suit, and I and I was kinda cocky going into it. I was like, oh, John. Nice nice coat. You're you're we're gonna be outside for
Speaker 2:Two seconds.
Speaker 1:Twenty seconds.
Speaker 2:Yeah. You're like
Speaker 1:And then we went
Speaker 2:off succession. Kendall Roy doesn't need a coat because he's so rich.
Speaker 1:He's always inside. I didn't say that.
Speaker 2:I think Dylan said that.
Speaker 1:Dylan said that.
Speaker 2:But I was like, yeah. Like, we're not we're not that rich yet. Whatever's going on in succession.
Speaker 1:For We a half mile walk and I was devastated.
Speaker 2:We did. But it's nice when you're in a coat. It's fun to walk around New York City. Also, wasn't that cold, but you were getting destroyed.
Speaker 1:We gotta pull up last post of the day. Skook says, the concept of getting sent to rehab by the Taliban because you and your cousins wanted to LARP as the Peaky Blinders in Afghanistan. And What happened? Out here that says reportedly four people in the Harat province were detained and sent to rehab by the Taliban's Virtue Ministry for imitating characters from British crime series Peaky Blinders and parading around the city resembling the vintage gangsters, an act seen as violating local values.
Speaker 2:This it's I have no idea how to process if this is real at all.
Speaker 1:Nope says rare Caliban l.
Speaker 2:This is crazy.
Speaker 1:Mean, they look they look fantastic.
Speaker 2:They do look fantastic.
Speaker 1:I feel like this would encourage they could open up a tourism market for people at kind of like the Disneyland for Peaky Blinders enthusiasts
Speaker 2:or weird phenomenon to happen here. Also, like, what does being sent to rehab look like in Afghanistan? They're just like
Speaker 1:No more no more Peaky
Speaker 2:Is it like Alcoholics Anonymous? You're like, first step, I am powerless to peaky blinders. I'm I'm a peaky blinders impersonator. You have to come, you know
Speaker 1:You gotta come clean.
Speaker 2:You have to say, I'm an alcoholic. You know, I I'm a peaky blinders impersonator, and I am powerless in the and I you need to say the what is it? The Lord's Prayer? Something like that.
Speaker 1:Anyway Anyways, thank you for being with us today, folks. We we love you dearly, and we will see you tomorrow.
Speaker 2:Hope you
Speaker 1:have a fantastic evening.
Speaker 2:Goodbye.
Speaker 1:Cheers.