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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're rocking TVPN. Today is Wednesday, 08/20/2025. We are live from the TVPN UltraDome, the Temple Of Technology, the Fortress Of Finance, the capital of capital. The Fortress Of Finance is not in good shape today. Holy bearish.
Speaker 2:Holy bearish.
Speaker 1:Back to back tech sell offs.
Speaker 3:Q q
Speaker 1:q its
Speaker 2:worst two days since April 7.
Speaker 1:I thought April 7 was Liberation Day. It wasn't Liberation Day. It was shortly after Liberation Day. But the Nasdaq did slide 1.5% on Tuesday. Some sort of correction was probably overdue, and we certainly aren't in any sort of unprecedented territory.
Speaker 1:But public markets seem to be starting to react to some of the big top signal memes that have been flying around the timeline Yeah. For the past few weeks. So we need to continue to monitor the situation. Joe Weisenthal has a great newsletter today that we're gonna be reading through. We'll be taking a tour of the timeline, of course, digging into what else is driving the narrative, what else is driving the news, what else is driving the markets.
Speaker 1:This feels very different than the liberation than the Liberation Day sell off, not just because the Liberation Day sell off was I remember there were multiple days we were in the gym and we checked the market and it's, like, down 5%, which is huge for a single day.
Speaker 2:Yep.
Speaker 1:But Liberation Day to me always felt like there weren't that many tech considerations. Yes. Apple's in China. Yes. There were semiconductor considerations, Taiwan, and and AI supply chains generally.
Speaker 2:But It was scared about tariffs
Speaker 1:Yep.
Speaker 2:For good reason. Yep. And people can debate that. But now the market is just effectively scared that AI hype is over, you know, overblunt.
Speaker 1:Yes. But there's yeah. There's some sort of difference there where tariffs affect the real economy, the price of food, the price of gas, the price of, you know, like, if there's gonna be a tariff on lumber, that's gonna drive up housing costs. That's all the real economy. That we're talking about computer money.
Speaker 1:The money that's in the computer, that's the AI bubble.
Speaker 2:People been trying to
Speaker 1:get That's what people have
Speaker 2:been trying to
Speaker 1:get of laptop.
Speaker 2:They've been trying to hit the keys in
Speaker 1:the right
Speaker 2:order to get
Speaker 1:If you had a $100,000,000 in your laptop and you were trying to get it out, well, today, it's only $98,000,000 because we're down 2%.
Speaker 2:I thought this post from the account Negative Alpha was funny. This is a quote. This is an Anon account but he says it's from his PM. He says, if your stocks are green today, you literally own dog, s h I t. If your stocks are red today, you own AI.
Speaker 2:Basically, you're an idiot either way.
Speaker 1:Not true though. One stock that's green, of course, Home Depot. You heard it here on the show. If you were interested in going long, the Amish, our pick was Home Depot and Home Depot beat earnings and I believe is doing well. Up a
Speaker 2:100% over the last month.
Speaker 1:Yes. And and and hello to everyone in the chat. Thanks for tuning in. We're we're glad to have you here and thank you for the feedback on the new sound board sound. The Eagle, I think is is perfect.
Speaker 1:Fantastic. When the market's down, what do you gotta do to save time and money, Jordy? Gotta go Easy to ramamp. To use corporate cards, bill payment, accounting, and a whole lot more. All in one place.
Speaker 1:Get your house in one place at ramp.com. Let's read through Joe Wiesenthal's latest newsletter. AI Orality and the Golden Age of Grift. We live in an we live in an age of extreme
Speaker 2:graphic here too. Yes. What is
Speaker 1:this graphic? Come in come on come in. It's viral. This is the Dubai chocolate thing. He breaks down some of the different viral products.
Speaker 1:And there's another article in the New Yorker that I I put in the deck today that talked about brain raw IRL brain rot, the libubuification of the world and Dubai chocolate and these ideas that are things that are designed to go viral but then instantiate themselves in the physical world. Yeah. I think that that's interesting.
Speaker 2:We like when the slop stays on various corners of the Internet.
Speaker 1:Yeah. And you and you can just hit, I'm not interested in that post as opposed to when you're walking around and and you don't really have that option when you're at a store and it's stuffed to the gills with IRL brain rot. Anyway, Joe Wisenthal says, we live in an age of extreme grift. This is obvious. There are people out there publicly organizing pump, pump and dump schemes.
Speaker 1:Right now, someone is trying to sell you a dollar's worth of cryptocurrency for $5. These are, of course, the, bit cold Bitcoin treasury companies that are trading above net asset value. They're trading above, the the book value of the of the cryptocurrency that they have on the balance sheet. Celebrities scam their fans by selling them garbage. It's all over the place.
Speaker 1:But that alone isn't particularly interesting. Grift has been around since day one and there might even be a cyclical element to it. The economist John Kenneth Galbraith famously talked about the bezel, not bezel, which is the bezel on a watch, which you can go to getbezel.com. Your bezel concierge is of course waiting for you to help you source any watch. But the bezel is about embezzling,
Speaker 2:not the bezels of luxury watches. Bad faith business practices that produce an illusory wealth effect Yes. Only gets exposed after the bust Yes. Once everybody realizes that everybody else is or at least some people are swimming naked.
Speaker 1:Yes. Yes. Yes.
Speaker 2:Joe says, the interesting part to me is the total lack of shame. Nobody bothers to try to hide it and nobody really judges it either. It's all just right out in the open. The world is a wash in economic nihilism. We've talked about you know, this sort of get get your bag culture.
Speaker 1:Get your bag culture.
Speaker 2:Jim Chano's calls it the golden age of fraud. Anyway, I know I haven't provided any hard evidence that things have become more deranged. This is just my sense from looking around. If you disagree with the premise, it's fine if you want to stop reading or in our case listening. Mhmm.
Speaker 2:But that being said, before going further, I wanna take a brief detour. In the middle of the twentieth century when the television really emerged, it was probably seen as the polar opposite of the book, highway.
Speaker 1:So the television emerged in the middle of the century twentieth century. That was before restream. Correct? Yes. So they couldn't do one livestream with 30 plus destinations.
Speaker 2:Not a chance.
Speaker 1:They couldn't multistream and reach their audience wherever they were.
Speaker 2:Certainly not a chance. Interesting. Yeah.
Speaker 1:Anyway, go
Speaker 2:to restream.com. But now you can.
Speaker 1:Now you can.
Speaker 2:So highly literate people look down on the idiot quote unquote idiot box Yeah. And so forth. However however, two dots on a plane that initially seem very far apart will start to appear closer as you look from a distance and that's how it is with books and TV which actually have a lot in common as media types. Both engage the eyes and actually with subtitles both can be consumed in silence.
Speaker 1:Growing up, my parents were into film and they would routinely say that TV rots your brain. That was like brain rot was a term that was used for just television generally. Yeah. And and now we are so far beyond that.
Speaker 2:Yeah. Anyway, continue. Yeah. Now now it's algo feeds rot your brain. The TV is
Speaker 1:actually It's Lindy. Yeah. It's fine. Yeah. Turn it on and enjoy.
Speaker 1:It's it's for it's for the the pooh bear wearing a tuxedo.
Speaker 2:Yes. Yes.
Speaker 1:The Winnie the Pooh.
Speaker 2:And both are passive one directional media forms Mhmm. That that can be consumed alone. Both are very costly to produce and distribute at scale which has a gating mechanism in terms of who can get involved. Mhmm. Moreover, television definitely has more in common with the book than radio does.
Speaker 2:Radio has a long history of bidirectionality whether we're talking about trucker CBs, call in shows or amateur ham radio that can be broadcast on a shoestring budget from your basement. That's interesting. I was thinking about this the other day when I saw Amazon is investing in a company that will allow viewers of TV shows to use AI to create their own scripts of shows they like
Speaker 1:Mhmm.
Speaker 2:And somehow insert themselves into the show itself. The company has a vision of making TV a playable medium a la video games. We'll see if anyone's into it but it's yet another assault on passive media. There's also Netflix had that one show that really hit that was like a choose your own adventure type show.
Speaker 1:Mhmm.
Speaker 2:But you haven't heard of any of those formats since then? Feel like it's been used
Speaker 1:Bandersnatch is the one that you're thinking of. Yes. It was it was sort of it was a cool idea. Was sort of difficult to consume because my experience going through it was like I wanted to actually be told the creator's vision. And I wanted to I wanted the story.
Speaker 1:Give me the best story.
Speaker 2:I don't have time to watch this 10 times.
Speaker 1:Yeah. And then if you go back and you watch it again, then you're watching repeated things. There are some movies that do this really well. One run one is called Run Lola Run. And it's this story of a woman who has to deliver, I think, like drugs to a drug dealer or something.
Speaker 1:She has to run across town or something like that in a German city. And the movie is three scenarios of how they play out differently. And so you watch the same thing happen three times. And there was another there was a music video that did a similar thing. I forget what it's called.
Speaker 1:But it it's a cool storytelling technique when the when the when the creator of the art decides to take you on this, like, multi forked path, but they do it intentionally as opposed to putting it in your in in your seat. It feels like you might just be better off just going full video game if you want a true choose your adventure. Like we have the technology to just let you
Speaker 2:choose the We have video games.
Speaker 1:Yeah. We have video games. And so do we really need something like in between or do we need something that's more like the barbell strategy where it's a it's a GTA online adventure? Or
Speaker 2:Choose your own movie feels somewhat NPC coded. Right? Where there's a distinct pass. You don't actually it's you're not actually able to have real effect
Speaker 1:on the
Speaker 2:world that you're in. Yeah. Joe says this means TV may soon become another back and forth media. Everything's back and forth media these days. People comment, people fave, people share, people repost, people quote, tweet and dunk.
Speaker 2:This is what people like the author Audrey Meer and sometimes Joe mean when we say society is becoming more oral. It's not so much about speaking and listening and sounds per se. It's about everything becoming this rolling conversation that appears and disappears in the exact same instant. I mean, TBPN is a good example of this. Yeah.
Speaker 2:We get a lot of alpha from the chat over here and it makes it makes the show
Speaker 1:Suraj told us to bring Vlad Tenev from Robinhood on the show and boom, here
Speaker 2:he is Good list.
Speaker 1:So thank you for John actually calling that out.
Speaker 2:The constraints of oral communication impose certain distinct conditions on the mind. A premium is placed on one upmanship one upmanship and combativeness per Walter. Thought is less analytical and more grounded in the here and now real world. In his famous book, Orality and Literacy, an oral culture simply does not deal in such items as geometrical figures, abstract categorization, formally logical reasoning processes, definitions and even comprehensive descriptions or articulated self analysis, All of which derive not simply from thought itself but from text form thought. Prior to the written word, there was no reference material for people to look things up.
Speaker 1:Mhmm.
Speaker 2:So in order for society to preserve important information, it had packaged in ways that are memorable, repeatable, and viral. This is all totally obvious and familiar to us now in 2025. The the irony here of Joe writing this long form written piece and then us evolving it into back back and forth media which he's describing is is not lost on In his book Preface to Plato, the British classicist Eric Havelock tries to unpack why it is that in his republic, Plato takes shots at poets and poetry. Plato's attacks on poetry is something that apparently bothers
Speaker 1:a shots, Jordy? Do we have a sound effect for that? Taking shots.
Speaker 2:Still working on that sound effect. It's getting dialed in. But per Havelock, Plato wasn't really concerned with the lyrical art form that today we call poetry. Instead, he was criticizing this world in which the Homeric epic was the primary vehicle of moral instruction. Education via Homer was becoming outdated in the emerging world of written word Because the oral world world finds it difficult to define and discuss why abstract analytical categories like moral behavior and hard work are good in their own right.
Speaker 2:Moral instruction has to take the form of children's stories where good behavior leads to better personal outcomes.
Speaker 1:Here Havelock identifies the problem what Greece has hitherto enjoyed, says Adementis, in a great, in a passage of great force and sincerity is a trend, is a tradition of half morality, a sort of twilight zone, at best a compromise, at worst a cyclical conspiracy according to which the younger generation is continually indoctrinated in the view of that what is vital is not so much morality as social prestige prestige and material reward, this sounds familiar, which may flow from a moral reputation whether or not this is deserved or else and this is not inconsistent. The young are insensibly warned that virtue is the ideal, of course, but it is difficult and often unrewarding. For the most part, a lack of principle proves more profitable. Do not the gods so often reward the unrighteous? And immoral conduct in any case can be expiated quite easily by religious rites.
Speaker 1:The overall result is that the Greek adolescent is continually conditioned to an attitude at which which at bottom is cynical. So he's calling the Greek adolescence the adolescence, the get your bag culture, identified it back then. It is more important to keep up appearances than to practice the reality decorum and decent behavior are not obviously violated, but the inner principle of morality is cynical is the keyword here says, Joe, if the point of good behavior is to achieve good personal outcomes, then what's wrong with bad behavior? If that can also achieve good personal outcomes, it's It's all about outcomes. These days, everywhere you look, you find evidence that success per se is seen as a stand in for quality.
Speaker 1:For example, wealthy people are always being asked for their opinions on all sorts of things regardless of their domain expertise. The moment someone becomes a billionaire, they apparently become an expert on everything from interest rates to geopolitics to the elect electricity grid. There is something to this where once you become a billionaire, you you you you you can just convene like, you can snap your fingers and just be like, I wanna have dinner with all the geopolitical experts, and then you can kind of recycle their takes or process their takes. There is something to this, but I but but I agree with Joe's take. It's a it's a good one.
Speaker 1:The whole concept of selling out, then this notion that an artist might sometimes have to choose between making a lot of money and producing the highest quality art feels completely over as a concept. Incidentally, if you look at this chart of the term selling out in books, it peaked right in 02/2008, soon after the introduction of the iPhone and the birth of social media and the web and mobile. Annoyingly, there was a major financial crisis right around the same time and there are all kinds of cultural turning points that show up on charts around then. And we are doomed to be arguing for eternity about whether it was the phones or the foreclosures that changed the trajectory of history. I think that's a great take.
Speaker 1:Maybe discussions about selling out were just a luxury of a time when the economy less felt less precarious. My favorite thing has to be how products get marketed for having gone viral. There are viral handbags. There are viral sandwiches, though this place in the East Village closed down and I never got to try it, says Joe. The chopped the viral chopped Italian sandwich, not familiar with that one.
Speaker 1:There are viral chocolate bars that say it on the label, the original gourmet Dubai chocolate. And then it just has a a seal, a stamp that just says viral.
Speaker 2:Fact checked. Viral.
Speaker 1:Fact checked. Viral. Well, if you're designing a new package for your next chocolate bar, do it on figma.com. Think bigger, build faster. Figma helps design and development teams build great products together.
Speaker 1:You can get started for free at Figma.
Speaker 2:It's also funny because viral is is something that, you know, happens to a thing for a specific moment in time Mhmm. But it's not an enduring trait.
Speaker 1:Sure. It burns So
Speaker 2:the right stamp would be this went viral?
Speaker 1:Yes.
Speaker 2:Yes. Certified viral.
Speaker 1:Yes. This was the COVID virality take. COVID was viral. It had a positive viral coefficient. COVID infections were growing exponentially.
Speaker 1:But by definition, COVID must be must have a sigmoid function, not an exponential function. And what I mean by that is it's an S curve, meaning that there can never be more than 7,000,000,000, 8,000,000,000 COVID victims It's at the same impossible. It can never be a hundred billion cases of COVID because we don't have a hundred billion people. So by definition, it it has to peter out. And then also, like, once you if you're actively sick with a virus, you can't get the virus again.
Speaker 1:Yep. And if everyone has it, then then the viral coefficient drops. And so we were always going to see this sigmoid function pop up. And we did. And we saw, you know, very, very fast exponential growth and then and then Yep.
Speaker 1:Declining.
Speaker 2:So Joe says, this is funny to me to me because in theory viral is a neutral object adjective. It doesn't speak to any inherent quality of the good itself. Things can go viral for bad reasons. Mhmm. Are the handbags well designed?
Speaker 2:Does the sandwich taste good? It doesn't really matter. The benchmark of a sandwich is that people are posting about it. Everything else is an abstraction that we don't have the energy, time or language to discuss.
Speaker 1:I mean, this ties to Clearly. Like at some point, they will be weighted by like their g two rating and their churn. But right now, it's like it is viral. They have viral market entry. Yep.
Speaker 1:And and that's I I would imagine at some point, people ask, is the product well designed? Does the sandwich taste good? Yep. And we'll see.
Speaker 2:Yeah. And I I mean, I went through this with Party Round. Right? We went viral over Yep. Over and over.
Speaker 2:Eventually, I realized it doesn't matter how many times we keep going viral. Yep. Our product inherently has massive churn. Yep. And it was valuable for a brief moment in time Yep.
Speaker 2:Where companies were raising Yep. These crazy party rounds. Yep. And then I I was kind of well aware that we were seeing a broader tech correction. Yep.
Speaker 2:I didn't think that
Speaker 1:And then comp that to branded native. Yeah. Never been viral.
Speaker 2:Never been viral.
Speaker 1:I've never seen it go viral on the timeline. I've never seen us done for it. It's grown every quarter of my entire adult life. It's crazy. Yeah.
Speaker 1:Underrated. Underrated. And potentially a better way to get your bag in decades. Yes. Mere days.
Speaker 2:Yes. Slowly. Slowly. And of course, this gets us back to the golden age of grift or the golden age of fraud and why it's all right out in the open. What exactly is the difference between a company that finds a way to sell a dollar's worth of crypto for $5 versus a company that designs the world's most advanced semiconductor?
Speaker 2:Semiconductor. You or I might be able to come up with some story about how well you see, one is productive and one actually and actually contributes something material in some way to society and so the entrepreneurs and investors deserve some reward and so forth. And then someone else will poke holes in this. Are we really better off for semiconductors that make the AI that is breaking the brains of Facebook addicted boomers? Have quality graphics and video games really made society better off?
Speaker 1:Yes. Absolutely.
Speaker 2:Love you heard about all the people sitting on their couches addicted to looking at their screens? Did that company really do something better for society than than the company that made a bunch of people rich with the magic crypto box? I don't know about you but I'm exhausted just at the thought of having to engage in these arguments. Life is much easier if we just say that the semiconductor company made a lot of money for investors and so did the crypto pump and dump and so they're both equally valid as business ventures.
Speaker 1:Disagree. I understand what he's saying but I will engage in this all day long.
Speaker 2:Has to eat, right?
Speaker 1:Are we
Speaker 2:to judge?
Speaker 1:Anyway, new and different media forms don't just give us new means of expressing the same ideas. They change the internal logic of the human brain. And with the return to orality, this endless back and forth of as a pervasive modern condition, that's it for the idea that certain modes of profit are more shameful or and ought to be covered up and obfuscated. I don't know about that. I think we are in a special time.
Speaker 1:I think we are more in a I'm more pendulum pilled on this issue. And I do think Warren Buffett will return as a hero and people will be quoting Warren Buffett.
Speaker 2:Could be Chamath.
Speaker 1:And I think that getting back to understanding the fundamental value that businesses are delivering will be lauded more. And this is this is inevitable. It is a product of maybe it's more of a product of the kangaroo market, of the faster cycles. Like, in early life, the cyclewas.com. And then eight years later, housing bubble.
Speaker 1:And then twelve years later, interest rate and COVID and the craziness then. But then since then, we've had every two years a cycle instead of every It 10 used to be really these long drawn out 10 mark ten year market cycles.
Speaker 2:Yeah.
Speaker 1:But I do think that we will be going back.
Speaker 2:Yes. So relevant to this article, you have Michael Saylor's strategy down 20 in the past month. Mhmm. This is at the time when there's a bunch of new crypto treasury companies
Speaker 1:Mhmm.
Speaker 2:You coming to market. And then, yeah, I think that there's a lot of people that will defend Saylor and his strategy. But ultimately, there's a number of reasons to to think that that strategy might be too good to be true. At least if it's done too aggressively. Then we covered Chamath's back history the other day.
Speaker 2:And I think that that Joe, you know, I don't wanna put words in his mouth, but he might look at Chamath coming back to market with a SPAC and say that it's shameless given the past performance. But at the same time, every new investment is an opportunity to redeem oneself. So even though that SoFi has experienced a real return, Opendoor, not so much. Clover Health, not so much. Virgin Galactic, down 99%.
Speaker 2:Pro Kidney, down seventy I five didn't realize that Healy, 96%.
Speaker 1:That some of these SPACs were with Hidosofia and some of them were with Surveta. I'm not exactly sure the difference, the the delta there. And then he also did pipe investments. It seems like MP Materials did very well. Oh, yeah.
Speaker 1:622%. That's pretty cool. But a lot of this other stuff is is is down a bunch. Some bankruptcies, some acquisitions. Berkshire Gray got acquired by SoftBank, actually.
Speaker 1:Didn't realize that.
Speaker 2:At 86. Decline from the The Initial IPO Yeah.
Speaker 1:So, I mean, you were saying earlier your take is that you look at this, it looks rough, but he probably learned his lesson. And he might be set up for success this time around. Is that the idea?
Speaker 2:He could have learned his lesson. I wonder He also might not again again, you know, trying to analyze why he is coming back with a SPAC. The Buco capital take is the guy loves SPACs. Yep. He's just having fun.
Speaker 1:I mean, it is not easy to just set up a SPAC. If it was easy, everyone would just do it. Yeah. But as but marshaling $250,000,000 in capital for for an acquisition or or taking a company public is is is the domain of investment bankers. It's the domain of of the the high high finance.
Speaker 1:Yeah. It's not something that you can, like, whip together over a handshake deal at demo day. It it requires a special set of skills, special set of connections. Yep. Shemoth has those.
Speaker 1:But, yeah. I don't know. There there clearly is another SoFi out there. There's another MP Materials out there. There are good companies out there.
Speaker 1:The trick is just finding them with more than, one in 10 accuracy. Yep. Because ideally, every every stack should be Yep. At least some some growth.
Speaker 2:Yep. Anyway. Stacy Rasgon says, I'm good with the government taking equity stakes for chip sack money as long as we get to hear Trump asking questions on the earnings calls. Totally agree. Let's let's turn it into entertainment.
Speaker 2:You know, let's make the most of it.
Speaker 1:That would be hilarious. Yeah. I mean, I guess he would be in a in a place to do that if he's a major share shareholder. It would be I don't think it would satisfy the semi analysis folks to have more government involvement on the earnings calls. Certainly not.
Speaker 1:Let's get Dylan Patel. Let's get Doug O'Laughlin on the on the on the earnings calls. That's who I wanted there. Anyway, if you're looking to automate compliance, manage risk, prove trust continuously, go to vanta.com. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program.
Speaker 2:Thank you to Vanta. Andre says, miss the AI train. AI turns out to be fake. Watch your enemies and adversaries pour billions into a bottle.
Speaker 1:Trillions. Trillions. This is Europe, I guess?
Speaker 2:Yes. It
Speaker 1:says do nothing win. I think this is a reaction to this idea that that the EU had higher GDP than all of China. But I think they already had higher GDP or something. Did you see this?
Speaker 2:I I just assumed this was Yeah. General AI bearishness.
Speaker 1:Yeah. I don't know. It seems like you would still rather like, the net present value of all of AI is still extremely positive, and you would rather have an extra trillion dollars in market cap in your domestic markets if you could.
Speaker 3:Yeah. But So little bit of a
Speaker 1:silly post.
Speaker 2:Yeah. Maybe in a non fast takeoff scenario Europeans Sure. Can use some version of ChatGPT.
Speaker 1:We'll probably literally use ChatGPT. I'm Yeah. I I I think that the answer I think that the aggregation layer and the application layer matters a lot more than the data center layer. It's great to build data centers all over the world. You need to have local inference and and low, low latency.
Speaker 1:But, like, if you can't get your populace to go to letchat.com instead of chat.com, like, you have lost control over the LLM and you will and you will not, win. I mean, you might be able to regulate and put cookie pop up pop ups and all sorts of different stuff, but, you won't have true control over the platform. Like, platform control in the modern era and the Internet era comes from aggregation of demand and consumer habits, and that's why Google is dominant in Europe and has not been displaced by the Google of Europe.
Speaker 2:Yep. Well, speaking of data centers
Speaker 1:Yep.
Speaker 2:Oracle will spend over 1,000,000,000 per year to power a single data center with gas generators. Let's give it up for for big oil.
Speaker 1:OCI, deeply underrated, Larry
Speaker 2:Ellison.
Speaker 1:Absolute goat.
Speaker 2:Diving in here. Oracle's Larry Ellison used to scoff at the idea of cloud computing saying in 2008 that it was complete gibberish.
Speaker 1:That's crazy. I don't remember him saying that.
Speaker 2:Now the success of Oracle's cloud infrastructure unit is why the company's stock price has soared and made Ellison, its chairman and founder, the second richest person in the world. Oracle's sitting at 654,000,000,000 at this on on this lovely
Speaker 1:He's catching up to Tesla.
Speaker 2:We're gonna need we're gonna need
Speaker 1:Yeah. The eighth to the mag seven, mag eight.
Speaker 2:Mag eight.
Speaker 1:Put Oracle in there. Number I mean, founder led company.
Speaker 2:Good luck.
Speaker 1:He's been on an absolute run and he's I mean, it's it's crazy the like, where Oracle started and and how they're still still conquering in essentially the same market. Obviously, very different technology but
Speaker 2:Yeah.
Speaker 1:Have done quite well. Yeah.
Speaker 2:So Oracle, a software company that had long struggled to find its niche in this market, gained a foothold through scoring major customers. Today, it's helping power Elon Musk x AI from a data center in Utah, assembling a cluster of tens of thousands of AI chips for Nvidia near Singapore and recently inked what is likely the second the the largest single cloud deal ever with OpenAI. We talked about this a few weeks ago. This is OpenAI effectively committing to these sort of massive inference bills Yep. Years in advance.
Speaker 2:We're talking tens of billions of dollars.
Speaker 1:Is this inference or or training? This is whole I I thought this was training news. This Models will be trained there is what is what Brody Ford says. We'll we'll I
Speaker 2:I was talking about the Yeah. The OpenAI Yeah. Cloud deal specifically.
Speaker 1:Yeah. Yeah. Yeah. It's a move away from Microsoft Yeah. Which is the the the underlying the undercurrent here.
Speaker 2:Yeah. Oracle is on the hook for tens of billions of dollars to develop unprecedentedly large data centers amid energy and material shortage shortages. That includes a plan to spend more than 1,000,000,000 a year just to power one new mega site in West Texas with gas generators rather than wait for utility connection. With all of this spending, Oracle recorded a negative annual cash flow for the first time since 1990. That's absolutely wild.
Speaker 2:Wow. And questions remain about the longevity and margins of offering infrastructure to train AI models. Mhmm. Oracle founded in the nineteen seventies had long faded from tech prominence. Certainly hadn't faded from prominence in Sailing?
Speaker 1:Things that matter. Racing. Racing.
Speaker 2:I won't I won't I won't accept that.
Speaker 1:Having a founder that looks 40 despite being closer to 80.
Speaker 2:Yeah. On the road to its return in the AI era were internal battles to convince chief executive officer Safra Katz to invest in the cloud Mhmm. Recruitment of key customers like TikTok and the rise of a brash executive named Clay Magorick. Magorick. Magorick.
Speaker 2:Bloomberg spoke with more than 30 current or former employees and customers to understand how Oracle can deliver on its towering promises. They detailed spiraling costs, accelerated timelines to satisfy OpenAI, regulatory roadblocks, the hiring of hundreds of former Amazon cloud staffers speaking anonymously to discuss the inner workings of a famously private and litigious company. Oracle declined to comment. So as cloud computing picked up steam in the late two thousands, Ellison had little reason to be excited. Oracle's namesake database, which is purchased outright and installed directly on customer servers, is one of the world's great cash businesses.
Speaker 2:Adopting a cloud sales model where users rent access to software would almost certainly come with lower profits and a need to collaborate with rivals. After years of writing off the cloud as marketing, Oracle's tone changed as its business came under fire. Amazon pushed deeper, cheaper database options on its cloud customers. Application rivals like Salesforce promised easier installation and updates. Allison saw the need to get Oracle's Fusion apps, commonly used for finance and resource planning on the cloud according to people familiar with his thinking at the time.
Speaker 2:There were competing efforts through the 20 within Oracle to build a cloud for internal and customer use, an initial attempt led by Thomas Curry.
Speaker 1:No way. He's the head of Google Cloud now.
Speaker 2:Okay.
Speaker 1:Yeah. I didn't realize he
Speaker 2:was at Oracle before. Yep. So a separate group made up of largely Amazon alumni led by Don Johnson pushed an approach called bare metal in which clients wouldn't have to share their servers with other renters Mhmm. Allowing Oracle to target privacy focused customers. The group also focused on building smaller data centers which let them expand in countries that weren't yet viable for industry leaders.
Speaker 2:The bare metal approach won the blessing of Ellison who remains a key decision maker despite handing off the CEO title more than a decade ago. Absolutely love that. It's like, hey, somebody else can can handle all the stuff I won't I don't wanna do. I'll still handle the I'll I'll still handle the
Speaker 1:What was that
Speaker 2:big ticket decision.
Speaker 1:What was that famous Larry Ellison quote during COVID? Larry Ellison Ellison.
Speaker 2:I'll keep reading while you find it. The new product came to be known as Oracle Cloud Infrastructure or OCI. Korean departed the company in 2018 after his approach was sidelined. He then joined Google to lead its competing cloud service and remains in that position. And there's a chart here if we can pull it up.
Speaker 2:Oracle Cloud is expected to be majority of business by 2029, and Wall Street is projecting break net breakneck growth. You find the quote?
Speaker 1:I I don't remember exactly what it was, but it basically, he was just hanging out in Hawaii during all of COVID. But he paid all of his workers like the full amount when they were in benefits through May or something. They did some shutdowns of the office, but it was just very funny where he was just like, I will be in Hawaii while this chaos is unfurling. And he was hanging out in Lanai.
Speaker 2:Why? Why have a compound in Hawaii if you're not gonna go there during a pandemic?
Speaker 1:Yeah. It's like the spot. I mean, everyone was out there during that time.
Speaker 2:When offering the new product, Oracle had to overcome a long held reputation for aggressive sales strategies. Major pitches for OCI include cheaper pricing. Thanks to a simplified set of products and good integration with other clouds. Oracle sales people often take jabs at AWS's sprawling set of tools telling customers that paying for Amazon's cloud means subsidizing expensive moonshots satellite project. It's Coupier.
Speaker 1:Coupier. Coupier.
Speaker 2:Coupier. Interesting.
Speaker 1:Yeah. I mean, there are a lot of tools in AWS. You don't necessarily need all of them. Some of them probably higher higher margin than others. I just wanna hear the internal strategies of the Oracle salespeople putting the screws.
Speaker 2:You really wanna subsidize this this satellite project with your money? Yeah. You really do you even care about this? Have you even have you thought about
Speaker 1:it once? On on the on the
Speaker 2:Did you know you were paying
Speaker 1:for battle card. It's just like, do you care about satellites? Yeah. Okay.
Speaker 2:So during during the pandemic, they they landed Zoom who who needed the capacity. Interesting. They they also got a a $2,000,000,000 commitment from Uber Wow. In 2023. And then during that era as well, they got TikTok
Speaker 1:Yeah.
Speaker 2:Of course, owned by ByteDance.
Speaker 1:And that was the whole narrative of, like, if TikTok sells, it'll be the Oracle, and Oracle will just host all the data, and TikTok will be kind of its own company. And there's no antitrust considerations because Oracle doesn't have any consumer facing social media products. It always seemed like
Speaker 2:a Yeah.
Speaker 1:Weird fit, but like a decent fit. Like, not huge synergy, but certainly solves the, solves like all the security concerns because Yeah. Oracle's like the most American for ever company. Yeah. It's, like, just, you know, built American data centers for
Speaker 2:So they landed they landed TikTok. Yeah. They that that account quickly surpassed a billion dollars
Speaker 4:Mhmm.
Speaker 2:In in run rate. Yeah. And then it eclipsed the rest of the cloud business completely.
Speaker 1:I remember seeing the the cloud bills from what was it? Snapchat, I think, was paying maybe Google Cloud, like, billion dollars a year. And that's on, like, what, 15,000,000,000 of market cap or something. So, like, a pretty significant investment. I mean, storing videos is a lot a lot heavier than storing text.
Speaker 2:And so when they started working with TikTok Yeah. They actually that's when they started getting familiar with building out these more AI focused because
Speaker 1:they need to do the inference the That's when they said out of GPUs. Yeah. It makes sense. They should also get on graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 1:You can get started for free at graphite.dev.
Speaker 2:Internal accolades have flown have flowed to McGork. We're probably just butchering this.
Speaker 1:Sorry. Butchering that name.
Speaker 2:McGork. Are you? Okay. The 39 year old has rapidly climbed company ranks directly to Ellison. Let's go.
Speaker 2:He's one of OCI's first employees after a stint at Amazon and recently relocated to Nashville Mhmm. Where Oracle has pledged to move its headquarters. I didn't know that. Interesting. In June, he was promoted to president and is seen by company leaders as a potential successor to his 81 year old boss.
Speaker 1:Do you think he went there because John Fio is out there?
Speaker 2:Probably.
Speaker 1:Nashville? Yeah. Isn't who else is out there in in Nashville? Didn't Ben who's the guy from the Daily Wire? I forget.
Speaker 1:Anyway.
Speaker 2:Yeah. Nicole Wishoff was was Nashville. Shared. She just moved
Speaker 1:back She's close to Nashville.
Speaker 2:San Francisco though.
Speaker 1:But yeah. Bit of an odd choice but, you
Speaker 2:know. Yep.
Speaker 1:No sailing in in Nashville.
Speaker 2:McGork says, sometimes you look back and say, I'm not sure that I was entirely qualified at each step of the way.
Speaker 1:That's the best though.
Speaker 2:Seems to have worked out so far.
Speaker 1:That's great. Good for him. Those who have worked with him describe him as a highly effective and conflict prone. He once told an executive his actions were effing stupid in a room full of leadership. They had talks man, talk about managing up according to allegations in 2021 lawsuit.
Speaker 1:Blunt bosses are typical in a company run by Ellison who once described his leadership style as management by ridicule. We've been, we yeah. We've been going through all the different, Larry Ellison books in the group chat, talking about, what's the difference between God and Larry Ellison? Like, God doesn't think he's Larry Ellison or something like that. Right?
Speaker 1:Isn't that one of the quotes? Legendary, legendary. We're having David Senner on the show soon and we'll we'll have to get him to do a deep dive on Larry Ellison for us since there's there's so much more to the character, Larry Ellison, in the history. There's that famous book where he gave a writer you you know the story. Right?
Speaker 1:Larry Ellison gave, like, biography rights to a to an author and said, you can write whatever you want, but I get a rebuttal in the footnotes. So No way. So the book is the book is the writer, like, documenting, like, shadowing Larry and following him around in the internal workings of Oracle. And then there'll just be a footnote, and Larry Ellis will be like, I wasn't being too aggressive in that meeting. They were being too aggressive.
Speaker 1:Like, this is wrong. It's like a debate. It's amazing. Anyway
Speaker 2:Jeremy shared it in something in our group chat earlier. He said with his top guy this is about Allison from the difference between God and Larry Allison. With his top guys running the day to day business, he was free to do the things he enjoyed. Brainstorm with his engineers Yep. Reread Pose, Annabelle Lee, visit Japan, entertain women, buy things, give interviews, and dream.
Speaker 1:The dream. It's amazing. Yeah. Was Ben Shapiro, Stefan Solisis says. And and Nate says, move to Nashville for Volta Cafe.
Speaker 1:That of course is John Fio's latest caffeine
Speaker 2:We'll eventually do a live show from the Volta
Speaker 1:We need to. The aesthetics are fantastic. You should go
Speaker 2:check We should do that show on a thousand milligrams of caffeine. I'm down. The ultimate challenge.
Speaker 1:Pump me full of it straight into the veins. OCI's importance has grown as the cloud has become a bigger part of the company's business. Today, about 23,000 employees report up through McGork. Over the last two years, more than 600 workers have joined from Amazon according to analysis run by Workforce AI. Amazon's recent five days a week return
Speaker 2:to office Real town.
Speaker 1:Has made poaching easier as OCI remains largely a hybrid or remote workplace. Interesting. Today, the company's biggest driver of o c AI is the biggest driver of the growth. Majority of Oracle's backlog or booked deals are tied to customers training or deploying AI models with GPU based servers. We've talked to some founders who have said OCI is deeply underrated.
Speaker 1:Everyone talks about Azure, GCP, AWS, but OCI, there's some good deals there. OpenAI is slated to become Oracle's largest customer and has marketed work as the work as Stargate, an effort announced in January at the White House. The companies have struck deals for more than five gigawatts of computing power. That's a lot of power. An unprecedented sum and enough energy for millions of American homes.
Speaker 1:Work for OpenAI is happening on an aggressive timeline. The data centers are targeted for completion by early twenty twenty seven with many of the servers running as soon as next summer according to people familiar with the plans. Facilities are being designed for training AI models with the assumption that they could also power the applications. So they will do training and inference. They need to they need to be designed for for hybrid workloads because they don't think that they will be necessarily training on an ongoing basis forever.
Speaker 1:And that at a certain point, the models get good enough and then you just gotta get them diffused into the economy. You gotta get GDP growing GDP is not gonna grow on training alone. Providing infrastructure for AI training is generally thought to be a lower margin business than inference because it requires more advanced semiconductors and cooling. Exact timing and design details for the OpenAI work could still change. Finding data center developers and power providers to support this project to palatable prices has been a challenge.
Speaker 1:Costs for many goods and services have gone up owing to tariffs and vendors capitalizing on intense demands. If you have some power transformers or tents for Alice. For Meta There's a buyer. Price of tents is going up though. Yeah.
Speaker 1:You're gonna be gouging them. And so Oracle cash flow has gone negative on the cloud build up, but just barely. And they Just barely. And they assume
Speaker 2:Not like some other folks.
Speaker 1:The site Oracle plans to power entirely with gas generation is located in Shackleford County near another Oracle server farm in Abilene. So they're expanding outside of Abilene in Texas. It's being developed by Digital Bridge Group's Vantage Data Centers and will have a compute capacity of 1.4 gigawatts, making it among the largest known sites. We've seen a couple groups pop up with one gig one gig clusters. This is 40 larger, so, you know, significance.
Speaker 1:But semi analysis often there's like there's different ways to measure power. Like, it's it's and and people get kinda funky with it. It's like, are you pulling 1.4 from the grid? Is it 1.4 to the chips? And, there's, like, the concept of, like, compute capacity versus IT power.
Speaker 1:Yeah. All these things kind of you you lose a little bit at every single stage. So we'll see where this this this cluster actually nets out, and we will let Dylan Patel be the final arbiter of of how Word. How insane this particular build out is. Part of OCI's popularity with AI farms firms is its long standing focus on bare metal servers.
Speaker 1:This has become the standard arrangement for AI work, Oracle was
Speaker 2:miss the cloud Yep. But made a key decision
Speaker 1:Going bare metal.
Speaker 2:Early on in bare metal.
Speaker 1:Instead of platform
Speaker 2:as a service. It ended up working out.
Speaker 1:Yeah. Yeah. For old Larry. Users and employees will also point to Oracle's networking quality and willingness to do high levels of customized work. Semi analysis.
Speaker 1:Shout out Semi analysis in Bloomberg today. Popular industry analyst listed Oracle Cloud near the top of its rankings for infrastructure vendors in March, citing its cost effectiveness, networking quality, and strong customer service.
Speaker 2:Add a category for how aggressive the sales team is.
Speaker 1:For sure.
Speaker 2:Battle card ranking.
Speaker 1:How much trash they talk about the competitors. Another of Oracle's largest customers is NVIDIA, which uses OCI for internal development and to power its own cloud infrastructure service. The chipmaker, code named Pathfinder, rents capacity from Oracle from an Oracle cluster of h 100 chips in Japan and from a data center being built on Indonesia's Batam Island.
Speaker 2:That's crazy.
Speaker 1:Big into islands over at Oracle. Oracle is also in talks with Meta Platforms and x AI for further capacity. Of course, Larry Ellison and Elon Musk are famous for getting dinner with Jensen Huang and
Speaker 2:Ben. So Batam GPUs. Island is right off the coast of Singapore.
Speaker 1:Is it beautiful?
Speaker 2:I'm sure Or it more
Speaker 5:like industrial.
Speaker 1:Should we go? Should we next vacation?
Speaker 2:It's very industrial.
Speaker 1:Okay.
Speaker 2:But sure it's so beautiful.
Speaker 1:Book a wander.
Speaker 2:Find your happy place. Find your happy place.
Speaker 1:Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home but better folks.
Speaker 3:Don't I even read
Speaker 2:that before. Need get them to put together the data set the Wander data center
Speaker 1:collection. Yes. Want to wander in Abilene. I wanna wander in Batam Island. I wanna wander in Japan, wherever that data center is.
Speaker 1:I wanna go on the world tour. Take me to Virginia. Put me next to AWS East.
Speaker 2:Take
Speaker 5:me to
Speaker 1:the I wanna visit US East. Oracle's cloud business is still orders of magnitude smaller than Amazon, Microsoft, and the number three provider, Alphabet Inc. Google. But plenty of room for growth exists. Orders of magnitude, it's a 100 times smaller?
Speaker 1:That's shocking to me. I feel like it would be at least within, like, 100 x. I don't know. The market generated almost a 100,000,000,000 in revenue in the most recent quarter and expanding 25% year over year. The question is how Oracle will fund this development and what it does to the company's profitability.
Speaker 1:Still, the company had hasn't had to borrow money to develop its centers like smaller rivals such as CoreWeave, who we've interviewed the founder of. We believe margin will rebound and cash flow will be substantial once they get through this investment phase, said an analyst, I think, an analyst at Bernstein. Oracle is going through a business model transformation that is even more impactful over a shorter period of time. Yeah. It's hard to imagine that these data centers I mean, we could be winding up in like the dark fiber world where a lot of these data centers don't get used if, like, truly there's a major popping of the AI bubble.
Speaker 1:But this stuff seems to be extremely valuable for a long period of time. And it's hard to imagine a bunch of huge data centers, like, not being useful to America in a decade. And so, he's risk on. He's
Speaker 2:Risk on but not using leverage.
Speaker 1:Yeah. Not using leverage. It's it's all coming out of the free cash flow. They have the cash to pay for it. And, and it seems like he's he's in a position.
Speaker 1:Anyway, you should get on Julius. What analysis do you wanna run? Chat with your data and get expert level insights in seconds. You can ask Julius to analyze your data.
Speaker 2:Business better. And they're loved by
Speaker 1:users entrusted by individuals at Princeton, Boston Consulting Group and Zapier.
Speaker 2:And TBPN.
Speaker 1:And TBPN.
Speaker 2:There is a new leak of a memo Mhmm. From Alexander Wang. Okay. Kylie Robinson is reporting that Alexander Wang wrote that superintelligence is coming in order to quote unquote take it seriously. The company is making major changes.
Speaker 2:So we can get into this a little bit.
Speaker 1:Yeah. Do we wanna have Tyler break down the whiteboard
Speaker 2:We should.
Speaker 1:Or show us what what what is the structure? What what what can you tell us about the current structure of Meta's AI efforts, Tyler?
Speaker 3:Yeah. So I think that the main thing is that we now know that Alexander Wang is, like, top dog of AI at Meta. Right? So we have I don't know if we can show it yet, but Top basically, see Zuck at top. Yep.
Speaker 3:And then Alexander Wang is
Speaker 1:Reports directly to Zuck.
Speaker 3:Reports directly to Zuck. Okay. And then everyone who works at on AI at Meta, not just MSL, like FAIR Yep. Every single org that does AI Yep. Reports directly to well, not everyone.
Speaker 3:But they all report to Alexander Wang. Yep. So then below him, we see we see three more people. We see Yan Lakun.
Speaker 1:Okay. And is Yan Lakun at FAIR? I that his
Speaker 2:think that is
Speaker 3:still unclear. Okay. We're not super sure. He so he was chief scientist.
Speaker 1:But he was not on the LAMA team?
Speaker 3:No. I don't think so.
Speaker 1:Okay.
Speaker 3:It's also like, maybe he was on LAMA team, but then for LAMA four, he wasn't or something like that. But then so in charge of MSL is Shengjie Zhao. He was at OpenAI. I'm, like, 90% sure. And then we see Nat Friedman is also there.
Speaker 3:And then so below them is just these are like the actual researchers who've been poached from from various labs. So you see like Jason Way, Lucas Beyer from, you know, OpenAI. I think
Speaker 1:I think I think Semi Analysis had a funny funny joke post about this that they wound up taking down. There was something to the effect of, like, you worked at a different AI lab focused on training. They decided that they sold, and they said, like, this this new organization won't be doing training. And then so you go over to Meta, and you work under Yan Lakun. And then they're like, you're not gonna be doing training either.
Speaker 1:And so there it seems like there's a real fight if you're an AI researcher to actually get onto a team that's working on training superintelligence because there's a huge amount of demand for just, like, let's productize this now. And there's probably a divide among the researchers on where they want to play in the stack. Do they wanna be focused on on on implementation, applications, leveraging the foundation models Yeah. Versus training the net and and coming up with the really
Speaker 2:novel So internally, they have TBD labs Mhmm. Which will also be in charge of exploring new directions such as building an omni model.
Speaker 1:Okay. And and and TBD Labs is is is a subset of MSL or a side MSL? What's the what's the take there?
Speaker 2:It's a it it feeds into it.
Speaker 1:It feeds into MSL. Okay. Got it.
Speaker 2:And then FAIR will be a quote unquote innovation engine Yep. For MSL's training runs by feeding its research directly to TBD lab.
Speaker 1:Okay. Got it.
Speaker 2:And that's a according to Kylie, that's a more active role for FAIR than before. Yep. Fare is down for publishing their research, giving it to employees.
Speaker 1:Yep. And so so how do how would I comp this to OpenAI? It seems like Shen Shen Zhao is sort of the Mark Chen of MSL.
Speaker 3:I think that's probably
Speaker 1:Head of research?
Speaker 3:Way to do it. Okay. Head of research.
Speaker 1:Yep. And then and then Zhao has four at least four, like, really key high level researchers.
Speaker 2:These are
Speaker 3:mainly just, like, the the, like, big names.
Speaker 1:Yeah. The big names.
Speaker 3:Obviously, there's, like, way more. Yep. But yeah. I mean, even at OpenAI, it's, like, still it seems like there's, like, a lot of teams there that's, like, oh, I'm, like, I led o one research, then there's someone else who like led reasoning. Yep.
Speaker 3:So it's like unclear how those overlap.
Speaker 1:Yep. Yep.
Speaker 3:Yep. So we we don't really know like what the exact comp would be to OpenAI or Sure. Or to an Anthropic or something like that. Sure. But so far, the the actual like MSL core team seems fairly small
Speaker 1:Mhmm.
Speaker 3:At least of, like, public people that we've seen. Mhmm. I I remember that there was some spreadsheet that leaked maybe, like, a month ago Yeah. That had only, like, maybe 25 names on it.
Speaker 1:Okay.
Speaker 3:And they were all, like, kind of superstars. So
Speaker 1:And and were they mostly on on OpenAI on the various training runs and various research projects or was this across the entire industry?
Speaker 3:No. It that yeah. It was not just OpenAI. Okay. There was a bunch
Speaker 1:of people. Was this like the list that was that was leaked? No. That
Speaker 2:that was
Speaker 1:more recruiting focus.
Speaker 2:Okay. That's cool. This was just like the actual team. Okay. Got it.
Speaker 2:There's more info in the memo about the GOAT, Nat Friedman. Nat Friedman. Friedman.
Speaker 1:What's he doing?
Speaker 2:Will lead MSL's efforts to integrate AI into Meta's products. So Awesome. As everyone knows, Meta's been trying to make things like AI glasses and the Quest VR headset go mainstream. These products have garnered good reviews but have yet to make up a meaningful
Speaker 1:And you Nat Friedman, like, it really feels like he might be the best person in the world to do that because who was the first person to actually make money off of GPT three? It was Nat Friedman with GitHub Copilot. Right? And so if you think about, like, how can you actually deliver value that people pay for at a good margin, which in the meta context, it might be it's value that's delivered for free and then monetized via advertising. But in general, you need you need to develop products that pass the hurdle rate of, like, value capture and not just go around doing science projects, which is what a lot of the research labs are set up to do, and that's fine.
Speaker 1:But in term but, like, the real, like, it feels like Meta has some real horsepower on the training side. They're gonna be able to build great models, and they're gonna need to build those in and vend those into a variety of products, everything from Meta Ray Bans to Facebook, the blue app and and and Instagram, WhatsApp. And how can you do that in a way that is product focused? Well, you hire the person that was the first real, like, AI application layer builder, like, with GitHub Copilot. Demigod.
Speaker 1:Yeah. I mean, I I I I think his his
Speaker 2:acting One thing that's notable, so when Meta Understood. Announced the creation of MSL in June, it said that Friedman would be its co lead. However, in the email, Wang made it clear that Friedman reports to him. Quote, Nat will continue to lead this work reporting to me.
Speaker 1:I don't think that that that that that's as dramatic as you think it is.
Speaker 2:Freeman's Freeman's just like, yeah. I don't wanna I don't I'm I'm I've been CEO. Yeah. Pretty good at it.
Speaker 1:I think
Speaker 2:I'd rather just focus on on making AI
Speaker 1:It's such a huge organization. There's so much to do. I I I think that, like, you you could read that as, like, he's reporting to Alex. I think he's close with Alex. I I think he's worked with him in the past.
Speaker 1:And I think there's a bunch of interesting ways to to to to actually go and have a better experience within the within the behemoth that is meta focused on just the implementation of frontier models as opposed to actually having to have the have the AI researchers roll up to you, and then you're a middle manager in between Mark and your kind of, you know, sharp elbows with with Alex on on, you know, who's doing what, where the stuff is allocated. It makes sense to just have a a rock star training team and then take the stuff that they trained, go implement it. And, of course, there'll be some feedback there, but it won't be but you you if you are an if you are an AI implementer, an application layer developer, like, you don't necessarily need to have the the researchers report to you.
Speaker 3:Yep. True. Maybe there's, like, an equivalence to there's, like, Google DeepMind Yep. And there's Google AI Studio, which is, like, the the productized version of the models. The projects.
Speaker 3:So maybe it's something like Nat is in charge of the the, you know, Google AI Studio for where, you know, Sheng Jiayi is is the DeepMind.
Speaker 1:Yeah. I I I don't know. We'll have to we'll have to dig into how it's
Speaker 2:how it's Where is Daniel Gross?
Speaker 1:Yeah. Where is Daniel Gross? We gotta figure out how he fits in.
Speaker 2:Great question.
Speaker 1:I don't know. I mean, was his was his transfer, his trade deal ever fully confirmed? I don't think he's put out a post about it yet.
Speaker 2:But it was confirmed that he left SSI.
Speaker 1:Okay. Oh, yeah. Yeah. Ilya posted about that and said, like, we
Speaker 3:are Yes. So on Gaynogross' website, it just says working on AI products at Meta.
Speaker 1:Okay. So it sounds like confirmed.
Speaker 3:Okay. Yeah. He's probably still working
Speaker 1:with But who knows? I would imagine he's working alongside Nat. Right?
Speaker 2:They merged.
Speaker 1:They merged. Happened. The And it's it's Nat and Daniel hanging out in a going around stuff in AI in every meta product.
Speaker 2:We're putting it everywhere.
Speaker 1:Putting it everywhere. I mean, seems like a good strategy compared to like, it's gotta be wrangling that problem at Google has got to be somewhat even more difficult because there's probably a Sheets team. There's a Gmail team. There's a Google search
Speaker 5:team.
Speaker 2:It's harder at Google because the core search business is threatened by Gen AI. Sure. And and because you can just go on ChatGPT and have it browse Google
Speaker 1:Yep.
Speaker 2:For you.
Speaker 1:Apparently. Yeah. But Yeah. Whereas whereas if you're
Speaker 2:It's more expensive. Meta, you're like,
Speaker 1:this is This is going to we only want to do things that drive higher ARPU or higher user minutes. How do we keep people in the apps for longer? And it should be very additive on the creator side, on the consumer side. But you should like, a lot of the usage patterns I mean, when they rolled out Stories, it was very clear that they I don't know if they actually wound up rolling out Stories in WhatsApp, but they definitely rolled it out both in Instagram and and in in Facebook. And so there's a lot of AI features that you could imagine.
Speaker 1:Even just like those Meta AI studio design a character that you chat with, there's no reason that that that, like, being chatting with, although it's ridiculous to say out loud, like, the Russian girl or who whatever the killer app is. I mean, it like like, the bull case is that it's chat with, like, a helpful assistant or chat with somebody who's an expert in, watches or semiconductors or cars or whatever. Like, you follow a lot of car content on Instagram. You can now chat with a a a like, the meta AI car expert. Ask it questions, maybe.
Speaker 1:It makes sense that that would be vended into WhatsApp, and it would also be vended into Instagram, and it would also be vended into into Facebook. Speaking of watches, have you
Speaker 2:seen Yeah. Levels was in certain really important post. Yeah. This was Tips for Men.
Speaker 1:The complete current thing in Silicon Valley. Everyone was talking about this.
Speaker 2:Yeah. Sure. This was flying around group chats. For sure. And the reason is, you know, Tips For Men was giving their sort of definition here.
Speaker 2:But to me, this just screams RM at the top, LP, Patek Oh. And clearly the GP. Yes. AP, clearly principal.
Speaker 1:Principal.
Speaker 2:Rolex, obviously associate.
Speaker 1:Associate. Okay.
Speaker 2:And then Cartier, I would say investor relations.
Speaker 1:Okay. Yeah. Yeah.
Speaker 2:Yeah. And then I don't even know once get into to to IWC? C range.
Speaker 1:I don't know. EIR.
Speaker 2:Yeah. Yeah. Seriously. EIR that had a had a moderate, you know, an aqua hire Yeah. Kind of looking for their next thing.
Speaker 1:Exactly. Exactly. They they define the levels of of watches. Richard Mill, who of course we've talked about on the show here as filthy rich. Pawtack is old money king.
Speaker 1:AP is new money. Rolex is wannabe rich. Depends on the Rolex. You got a Paul Newman. I think you're I think you're an old money king.
Speaker 2:They're have a land dweller from the secondary market.
Speaker 1:Are are they spiking? Or Yeah.
Speaker 2:I mean, they're sitting well well above retail. Yeah. Bezel has one for 70 k.
Speaker 1:70 k for a land dweller? It is a beautiful watch. I like it a lot. But that is a wild price for a Rolex. Well, yeah.
Speaker 1:I mean, make a statement.
Speaker 2:It's a nice bracelet.
Speaker 1:Yeah. It's a good bracelet.
Speaker 2:It's good bracelet, sir.
Speaker 1:If you're if you were running a a luxury watch brand and you wanted to get your watch brand mentioned in Chateappity, what would you do?
Speaker 2:I'd go to tryprofound.com.
Speaker 1:Tryprofound.com. You could get your brand mentioned in Chateappity. You could reach millions of consumers who are using AI to discover new products and brands. You could even get a demo.
Speaker 2:I would not be surprised if at least one member of the Holy Trinity already uses ProFound.
Speaker 1:I wouldn't be surprised either.
Speaker 2:You'd be surprised. Fantastic. Yeah. I got an investor update from James at ProFound last week and it was the single most impressive
Speaker 1:Really?
Speaker 2:One, you know, month monthly update that I've received across investing in Yep. 60 or 70 different startups at this point. Very, very impressive.
Speaker 1:Stout out to them.
Speaker 2:What is Rabois talking about here?
Speaker 1:Keith Rabois has taken yet another victory lap on calling Miami as an underrated place to live. It was, of course, not in the conversation at all, and then it became the current thing. Delian famously posted, can we just move Silicon Valley to Miami? He somewhat successfully did that, and a lot of companies moved there. Of course, it didn't actually become like a major tech hub, but, it's certainly more of a destination for the tech elite than it's ever been in the past.
Speaker 1:It's a beautiful place. I love visiting it. Great for conferences. Great, my favorite thing about Miami is that if you host a tech conference there, no one will go home, after the conference ends because everyone will get a hotel room because almost no one, like, lives there. Yeah.
Speaker 1:And yet it's a place where people can justify going to a flight. It's not it it's as convenient as Las Vegas as as, like, nice weather, lots of activities like Las Vegas. But if you throw a big event in San Francisco, half the audience will be like, oh, well, I'm you know, I'm not maybe I gotta babysitter, but I'm I'm gonna go home. And if you throw out an event in New York, same thing. But if you get everyone to my if you get everyone to Miami, 90% of those people are gonna be from out of town.
Speaker 1:They're gonna book hotels. They're gonna be there. They're gonna be staying up later. They're gonna be having more fun, more networking, more business connections, more value creation. So still bullish on Miami as a as a place to visit and as Texas Vegas, less bullish on it as, like, go try and build a foundation model company and recruit a bunch of AI engineers.
Speaker 1:That's gonna be a tough lift. But, the the, the office visits in July 2025 changed from the 2019 is way up. Denver is down 40%. LA is down 36%. We're trying to shift that trend by being fully in office.
Speaker 1:Alec McGillis, who's key who Keith is quoting says, really striking to what degree New York has become an outlier in recovering from the remote work shift, given that it is a city that was first hit hardest by the pandemic.
Speaker 2:Huge part of this is that people's apartments and or homes that are actually in New York City are so much smaller. So people often want to go to the office.
Speaker 1:That's a good point. Whereas if you're in Denver or even LA or Chicago or Boston, you might live slightly outside the city. You might live in a suburb.
Speaker 2:Denver's over here. They're still on a hike.
Speaker 1:They're still on a hike.
Speaker 2:They're still hiking.
Speaker 1:Yeah. So nationwide, office visits are down over 20% since pre pandemic times. And so July 2019 is kind of where the benchmark starts before the pandemic hit. And, obviously, that changed a lot of businesses. It changed a lot of work from home behavior.
Speaker 1:We were just talking about Oracle. You know, they're building data centers, but they're doing it remotely, Whereas AWS has kind of gone back into the office. Seattle notably missing from this list entirely. But anyway
Speaker 2:This this post from Tane is wild. Yes. Charting out annualized ad revenue by platform Google search at two
Speaker 1:We need to we need
Speaker 2:to do
Speaker 1:some pop quizzes here. Billion. How much Tyler, how much money do you think in revenue Bing brings in every year?
Speaker 3:5,000,000,000.
Speaker 1:14,000,000,000.
Speaker 3:Alright. That's not too far.
Speaker 1:That's right. I mean, pretty far. Who reacts?
Speaker 2:If you if John had asked you about Snap, you would have been pretty close. They did 5 and a half billion.
Speaker 1:Pinterest is at 4,000,000,000. Uber at 1,500,000,000.0. This is ad revenue, not platform revenue. DoorDash is making a billion on ad revenue. Instacart's making a billion on ad revenue.
Speaker 1:But Meta is up at 200,000,000,000 or 186,000,000,000. Google Search is at 215,000,000,000. And so, yeah, I mean, like, the OpenAI, we were talking about Brad Gerstner kind of saying that, you know, the the OpenAI valuation of 500,000,000,000 is, like, way ahead of Google's, metrics based on where Google was when they were valued at 500,000,000,000. But when you look at that pool of high margin ad revenue, 215,000,000,000 from Google, 8 186 from Meta, 63 from Amazon, and you ask yourself the question of, like, will ChatGPT be able to grab a piece of that? Is it already?
Speaker 1:Like, it's not really already. It's mostly just people paying for a great tool that they prefer over the other, over other options. But if they seriously get on the in that game with a agentic commerce, agentic checkout, and and taking commissions and cuts from different, revenue streams in the ad revenue world, like, there is just so much money to be made in Internet ads. Like, you can be a company that's not known for advertising like Uber and still be making a 1,500,000,000.0 in ad revenue. And that's extremely high margin.
Speaker 1:And so can can OpenAI suck 50,000,000,000 out of this 500,000,000,000 pool of ad revenue and trade at a 10x on revenue? Like, is it possible? It's like, it's not that crazy. I don't know.
Speaker 2:While getting getting better and better at serving the models cheaper and cheaper.
Speaker 1:Yes. Yes. Well, as they build out their their ad product, they will need to be using linear over at OpenAI. Linear is a purpose built tool for planning and building products. Meet the system for modern software development.
Speaker 1:Streamline issues, projects and product road maps.
Speaker 2:If you make software and you're not on linear
Speaker 1:Yeah.
Speaker 2:You're crazy.
Speaker 1:And if we flip over to the bear take on, OpenAI, BoneGPT says, GPT five single handedly destroyed the fast takeoff narrative and killed the stock market. I don't know if that's entirely fair. Killed the stock market. It sells off 2%. And it's like GPT
Speaker 2:five took it out back. Is this is
Speaker 1:the beauty of, like, the kangaroo market, the faster information is that, like
Speaker 2:Every time it's so over, where you could just be a day away from being so bad.
Speaker 1:It's it's not just that. It's that is that you you you go through the the the trough of disillusionment so so fast. Like, you can have, like, all of the think pieces, all of the memes, all of the hot takes about, like, it's so bad. It's so bad. And then two weeks later, you can be like, okay.
Speaker 1:We've clearly hit the bottom. We've beat this to death. Everyone's talked about how how we're completely over our skis and, like, the bubble has popped. They can be like, okay. Now it's time to start reinvesting.
Speaker 1:We gotta start buying the dip, and then we start building back up so quickly. And that's what happened. I mean, during COVID, like, it was only, what, like a three month drawdown, even even, even the the the interest rate post ZERP era was, like, pretty quickly turned around, maybe a year of hard of of, like, hard times. It was not it was not the .com bubble, which took years, years, years. And Tyler Cosgrove has the this is the doomsday clock for us.
Speaker 1:So the doomsday clock, typically, the folks who are worried about the apocalypse are tracking the doomsday clock, the amount of time until doomsday. We have been tracking we say it's ninety seconds, not to age you. It's ninety seconds to nothing. Tyler, can you give us some more context on what inspired this and how you're feeling?
Speaker 3:Okay. So this is apparently yeah. This is like the doomer take Yeah. On g p t five. Right?
Speaker 1:Yeah. Ninety seconds ever Nothing ever happens.
Speaker 3:No fast take off.
Speaker 1:Okay.
Speaker 3:I disagree. Okay. I think GBD five was pretty good.
Speaker 1:Yeah. Wait. How many seconds until AGI and the Singularity? How many days? I mean, Sam Altman put it a couple thousand days.
Speaker 1:Three thousand days is a decade. Right? I would put it
Speaker 2:closer to a certain last merge his
Speaker 1:6,000.
Speaker 2:His definition for that was just people become really close friends with a chatbot.
Speaker 1:Yeah. Yeah. Yeah. That's yeah. That's that's that's pretty clear.
Speaker 1:I mean, I guess, like, if there's gonna be a fast takeoff, there's gonna be some sort of singularity, something that's, like, unpredictable. I would peg it more at seven thousand days. I would put it at twenty forty five.
Speaker 3:Okay. Maybe I'm, like, halfway in between you and Sam. And Sam.
Speaker 1:So Sam's twenty thirty five. Twenty twenty forty.
Speaker 3:Okay.
Speaker 1:Twenty forty. Okay. So that's a lot of seconds.
Speaker 3:That's a fair amount of seconds.
Speaker 1:We we
Speaker 2:Guco Guco Capital which is basically the the the fourth technology brother. Yeah. He says, this is a drawdown for ants. Momentum names with zero valuation support still up a 100 to 700% year to date. Several with no revenue.
Speaker 2:Many still getting gunned from the lows back to roughly break even. I don't know when the music stops but the Palantards and the Lemon Apes are still dancing.
Speaker 1:Lemon Apes? What are Lemon Apes?
Speaker 2:I think lemonade.
Speaker 1:Lemon oh, peep Lemonade is a meme stock now?
Speaker 2:I mean, it's up
Speaker 1:I know.
Speaker 2:It's up it's up couple 100% year to date.
Speaker 1:Well No. Not
Speaker 2:year to date.
Speaker 1:There there there's another story that is Over the last year. That is developing, but we don't have a full analysis of it. So DeepSeek version 3.1 is out. The the model was released on Hugging Face. Is that correct, Tyler?
Speaker 3:Yeah. So so I think there's basically there's no model card.
Speaker 1:Okay.
Speaker 3:So so we don't know, like, what the benchmarks are really.
Speaker 1:Why would that be? Why would they release the model without releasing the model card? I feel like that's kinda standard issue.
Speaker 3:Yeah. I don't know. I mean, it it could just be like, oh, we forgot to add it to the, like, file. I don't know.
Speaker 1:Okay.
Speaker 3:I mean, I I I assume that they're gonna add it within a couple days.
Speaker 1:Okay. Well, people could do it independently too.
Speaker 3:Yeah. You can run the benchmarks independently, I guess. Okay. But, yeah. So far it seems it's kind of up in the air
Speaker 1:Yeah.
Speaker 3:How good it looks. Some people were like, oh, China's cooked like, you know Yeah.
Speaker 1:Yeah. Yeah.
Speaker 3:The chips like totally screwed with
Speaker 1:Yeah. Yeah. They tried to train a Huawei. They failed. They couldn't get NVIDIA.
Speaker 3:Like, people were saying like, oh, it was supposed to be DeepSeg v four.
Speaker 1:Four. That's what we were hearing, for sure.
Speaker 3:Yeah. And then it turned into 3.1.
Speaker 1:3.1.
Speaker 3:It was so bad. So I it
Speaker 1:was four c moment. Yeah. But, yeah, it's possible that they're going down. They're they're they're mimicking the error in the tech tree that was followed at at OpenAI and Meta, it seemed like. Yeah.
Speaker 1:Because GPT 4.5 kinda came out and was underwhelming, and then Llama four Behemoth couldn't get out, and we might be seeing something similar.
Speaker 3:I mean, so those were both examples of, like,
Speaker 1:Big big big. Yeah.
Speaker 3:That was like big pre training runs. Right? Yep. But DeepseaGuard has like good RL. Okay.
Speaker 3:They because they have r one. Yep. That was like I mean, that was the first Yeah. Using model to come out after after OpenAI. Yep.
Speaker 3:So I I don't know if it was necessarily that. I mean, it it seems reasonable that it's just like a chip thing where they were forced to use Huawei. But I I think we'll see. Hopefully, over this week, they'll they'll release some more details about it. But
Speaker 1:Yep. Well, we will be tracking which company has the best AI model at the August on Polymarket, of course. Google's running away with it. 93% chance. I don't know if they're already in the lead and that's why.
Speaker 1:Or maybe maybe we're expecting something new to come out. But DeepMind seems to be on a tear. They've been climbing. Even towards the end of the year, they're up at 59%. XAI has recently eclipsed OpenAI as the second best AI model at the 2025.
Speaker 1:The other news on DeepSeek, this is still in the rumor mill, but some dude asked the official DeepSeek customer service, and they confirmed that version 3.1 is a merge of reasoners and non reasoners. Maybe it's some sort of, like, model switcher coming soon. Both chat and reasoner reasoner API now route to the same model, but just change if thinking mode is on. So, anyway, if you're looking for sales tax AGI, head over to numeralg2.com. Spend less than five minutes per month on sales tax compliance at numeral h q.
Speaker 2:Well, Howard Marks just had an interview with Bloomberg. I think it's relevant. He says, US stocks are in quote, in early days for a bubble although the critical point for correction is yet to come. He says, I'm certainly not ringing alarm bells. The point is that things are expensive.
Speaker 2:Palantir is certainly expensive at 500 x
Speaker 1:Yep.
Speaker 2:Price to earnings. It's been sixteen years since investors last went through a quote serious market correction. Yeah. That the current
Speaker 1:Sixteen period years? Oh, he's going back to 02/2008? Yeah. Okay. Yeah.
Speaker 2:The current period reminds him of the late nineteen nineties when the market was falling in love with tech stocks leading to former Federal Reserve chairman Alan Greenspan
Speaker 1:Yeah.
Speaker 2:To warn of irrational exuberance.
Speaker 1:Irrational exuberance.
Speaker 2:Still Exuberance. The market rose for a few more years after that before the tech bubble burst.
Speaker 1:Yep.
Speaker 2:Yeah. Again, like, you know, the debate everybody's been having is is are we in January 2021 or November 2021? Yep. We might just be in 2019, you know?
Speaker 1:We might be. Just
Speaker 2:don't know.
Speaker 1:This is a Ben Thompson stake.
Speaker 2:It's very hard to Mark says people get out of of the habit of thinking about market corrections noting that a reversion to the mean is very likely. Some technology stocks are quite highly valued relative to history. No no new insight there. This is a time to put a little more defense into your portfolio Mhmm. And invest investing in credit as opposed as opposed to equities is one way to do it.
Speaker 1:Yeah. I saw another post that so was it Fidelity was was recommending a portfolio of 70% bonds, which seems very, very conservative. But do with that what you will. Let's switch gears to a different hedge fund billionaire, Jim Jim Simons. His daughter, Elizabeth Simons, has given $250,000 to a super PAC supporting New York City mayoral candidate, Zoran Mamdani.
Speaker 1:Of course, this is seen as sort of antithetical to who Jim Simons was and what Renaissance Technologies did as an applied math hedge fund. Gary Tan has a take. He says, it's a special form of insanity for private foundations to supercharge the destruction of teaching math to the next generation when that money was earned literally by the merit of pure applied math, like the money earned by Renaissance Technologies. Legalize math, Gary says. Jim Simon's mass mathematical skills helped transform him from a prize winning app academic at Harvard and MIT into a legendary financier whose algorithmic models made Renaissance Technologies one of the most successful hedge funds in history.
Speaker 1:After his death last year, one of his consequential bequests went to his daughter, Liz, who oversees the Heising Simons Foundation and its near billion dollar endowment. What Liz has chosen to do with that inheritance might have surprised her father. Jim Simons devoted much of his charitable giving to basic research in mathematics and science, but his daughter's foundation is moving in a very different direction. The the Heising Hasting Simons Foundation and similar organizations are supercharging a movement to remake k 12 mathematics education according to social justice principles. Interesting that both the left and the right are somewhat attacking math right now.
Speaker 1:Obviously, this is coming from the left, but there's also that attack on USC Are numbers real? You yeah. UCLA mathematician, Terence Tao, had his had his funding cut by the Trump administration. And so it's a bad time to be a shape rotator, time to pivot into word selling. But we'll see how it how it shakes out.
Speaker 1:I'm not I haven't been following the New York City mayoral election too closely because I live in Los Angeles. Anyway, let's go to this post by Nikhil Krishnan. He says, dude, Mark Bertolini, the ex Aetna CEO, now Oscar CEO, has an insane story. Here, he talks about how after his skiing injury, he was in so much pain for seventeen years that he went to Switzerland to end his life and was then told he could fix his pain. He went through neuroplasticity exercises and got it fixed.
Speaker 1:Amazing. So I was getting ready to go to Switzerland to end my life at Dignitas. It's an assisted suicide organization, but I had to prove I had intractable pain and pain that couldn't be cured. And so I was sent to a doctor, and the doctor evaluated me. The doctor said I was going to do it on 02/15/2023.
Speaker 1:It was going to be my death day. I wanted to do the eighteenth, but it was a Sunday. What was the day I had the accident? So I went to this doctor and sat and he sat down with me, and they did a few tests. And they looked at me and said, so you don't have intractable pain.
Speaker 1:You have neuroplastic pain, and we can fix that. I go, here we go again. I mean, I did seven days at the Hanneman University Hospital ICU, fifty milligrams of ketamine, an hour IV to try and reboot my system. I had a great time, and it felt better for the first month afterwards. But then I came then came back in a rush.
Speaker 1:And so I said, Here we go again. And I had worked with Mary to get her through how that was going to work and what the plans were and all that sort of stuff. And so they go, okay. Well, let's start. So part of it was cognitive behavioral therapy and I had to go back to my childhood and my concept.
Speaker 1:I was not well treated as a child and so I was consistently under threat assessment. And threat assessment is the worst thing, you can have when you have chronic pain because you're always waiting for one cell to have pain, and then all of a sudden it goes everywhere. And they said, and also your 42 pain centers in your brain have wired together from all this chronic pain over the years, So any touch feels like pain. So in essence, I was addicted to pain. And they had done MRIs on baseball hitters, and they said the best baseball hitters, their visual, cognitive and motor cortices light up instantaneously.
Speaker 1:There's no latency. That's why they see the ball in slow motion. That's how they see it moving. That's how they hit it so well. You have a baseball hitter's brain on pain.
Speaker 1:There's no latency in your system. Something touches your arm, you're in pain. So they helped me understand the system. Then they put me in transcranial magnetic stimulation and they zap my brain for thirty minutes to disconnect those pain centers and they put me in a virtual reality lab with a helmet and they repatterned my brain and he got through it and he's doing well. So very good to hear.
Speaker 1:What a crazy, crazy turnaround. Anyway, Microsoft Excel adds Copilot AI to help fill in spreadsheet cells. This is like a crazy The moment
Speaker 2:you've all been waiting for.
Speaker 1:The moment you've all been waiting for. But there's been a lot of folks who have been building, Microsoft Excel add ons. We had some of them on the show. There's one that launched on Monday. We didn't have a chance to have the founder on the show.
Speaker 1:But there was this the the current Copilot, instantiation similar to the the, Gemini integration. It just kinda sits in the sidebar. It does a little bit, but now they're gonna have Copilot AI in every single spreadsheet cell similar to that demo that we saw
Speaker 2:on Monday. But they warn against using the AI function for numerical calculations or in high stakes scenarios with legal, regulatory and compliance implications as Copilot can give incorrect responses.
Speaker 1:Interesting. Do you think this is a disruptor's innovation or innovator's dilemma problem where there's a low end solution Yeah. That is counter positioned against the status quo because Microsoft can't add, like, a unreliable product to something that is thought of as reliable. Yeah. This was the the the take that the legal industry could face disruption from AI because right now, AI is is maybe 50% as good as a real lawyer.
Speaker 1:I don't even know. 80% Yeah. 10%. It doesn't matter. The point is that it's a thousand times cheaper potentially.
Speaker 2:People have gotten used to getting a result from Excel and feeling like they can trust it.
Speaker 1:Sure.
Speaker 2:They trust their own
Speaker 4:Yep.
Speaker 2:Calculation.
Speaker 1:Yeah.
Speaker 2:Yeah. Know, they don't feel like I need to get a whiteboard out and whiteboard it out and use a calculator and Yep. Sort of fact check it. Yep. But I think you're gonna have to do that with Copilot and various AI Yep.
Speaker 2:Tools for some amount of time. But at the end of the day, you have tools that humans use to do things. Mhmm. But then humans are held responsible for whatever whatever process they use in order to get a certain result. Yeah.
Speaker 2:So I don't think this is that big of a of a change.
Speaker 1:Yeah. I mean, fundamentally, Excel is a functional programming language, essentially. Like, it's a it's a bunch of functions. You can't write it's not it's not the type of language where you can create like a class, but or object. It's not object oriented programming, but it is functional programming.
Speaker 1:And what that means is that it's entirely deterministic. Like, everyone opens up the the same Excel sheet. They should see the same numbers. There is no stochastic nondeterministic. And that is kind of antithetical to the way LLMs work.
Speaker 1:Now, to be fair, businesses all over the world have implemented LLMs at various pieces of their tech stacks and been fine with the fact that, okay, for this particular function call, we get a sort of fuzzy result. We're trying to tag something for fraud, and we're giving it, you know, a risk score at the end of the And we know that there might be some hallucinations. It might get something wrong. And the tech industry has completely come to terms with that. And they know that these systems are sometimes reliable, sometimes they're not.
Speaker 1:But they they add value. And so the fact that Microsoft's actually rolling this out quickly is pretty bullish for Excel sticking around, in my opinion. And the fact that they are warning as long as the warning doesn't pop up every single time you call the Copilot AI and you and you use an LLM in a cell, I I don't think it would be a major headwind. But I don't know. We'll see.
Speaker 3:Yeah.
Speaker 1:I'm not using a
Speaker 2:lot Is of it Lindy?
Speaker 1:Excel these days. But you should be using fin.ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on on g two. We need we need AI agent,
Speaker 2:in fact. Champion.
Speaker 1:Yeah. And, I mean, customer service is a good example of, like, where most of the customer service answers are nondeterministic anyway because they come from a human. So if you have an AI agent in the loop, you will still need to escalate and fact check and reality check what's But going in general, it's the perfect
Speaker 2:Yeah.
Speaker 1:Bit for generative AI.
Speaker 2:Kyle Chaika has a new essay in The New Yorker. He says, what do all these things have in common? I grapple with the burgeoning gen z and younger aesthetic of tacky, oozy, ugly, chemically augmented, brain rotted consumer slop, the Lububu Dubai chocolate matcha industrial complex. And I'm looking forward to a time when we don't have to use the word slop anymore. I Yeah.
Speaker 2:Yeah. I think I think it'd be fair to at least soon call the top on that on
Speaker 1:the hoping that I just would never need to learn about La Boo Boo at all. Yeah. And just like, it would just come and go, and I would just be forever ignorant of it, much like you're ignorant of every movie ever created. It It's a beautiful experience. It leaves you with a sense of purity that I long for.
Speaker 1:Yeah. And yet, today, I find myself learning about La Boo Boo. Tyler, do you have a take on La Boo Boo?
Speaker 3:No. But I have a fun fact. Please. I I'm pretty sure this is true. The first
Speaker 2:This better be legitimately fun. Okay. Because I really hyped it up.
Speaker 3:So I I think the first use of the term brain rot is Henry David Thoreau in Walden.
Speaker 1:No way.
Speaker 3:So, like, eighteen fifties.
Speaker 1:Wow. Yeah. Wow. Isn't Walden, like, literally about touching grass? The whole point is if you go to the pond?
Speaker 3:Yeah. He he lives at the pond for two years.
Speaker 1:Yeah. He goes and he touches trucks.
Speaker 3:Anyone. And he just, like
Speaker 1:And he Blocks right. Says the word brain rot or Yeah. Rotted brain or something?
Speaker 3:Yeah. I think brain rot. Wow.
Speaker 1:Okay. Yeah.
Speaker 3:Well Is that a fun fact?
Speaker 1:That's a very fun fact.
Speaker 3:I thought that was fun.
Speaker 1:I would give that 10 funs up. On a recent quiet weekday morning in Manhattan, I attempted to obtain a Lububu, the cutesy monster doll that has become the biggest international toy fad since Beanie Babies in the late nineties. This is in the New Yorker. Collected by children as well as by adults, the dolls were created in 2015. I didn't realize it was 10 years old.
Speaker 1:By the Hong Kong born designer Kasing Long when they were brought to the mass market by the Chinese toy company Pop Mart in 2019. The k pop star Lisa started sharing her collection on social media in 2024, sparking the recent explosion. I didn't realize that that's where this all came from, this k pop star. La boo boos have pointed teeth, rabbit like ears and wide gang glaring eyes. Their faces are and extremities are
Speaker 2:They're demonic.
Speaker 1:Lots of people have been saying that.
Speaker 2:Tye Dye in the chat says Tim Dullen said La boo boos are just Chinese voodoo dolls.
Speaker 1:And Yes.
Speaker 2:I think it tracks.
Speaker 1:Yes. I I like that post. Someone was saying I wanna pronounce it like it's a Greek hero. Lububus.
Speaker 2:Bill Bishop in the sub sack chat says, my dog Tashi wants a Lububu chew toy.
Speaker 1:That could be a good
Speaker 2:We should we should For Lububus. Let's let's buy Tashi all of them that are available on the market and have and have a little little Tashi destroy all
Speaker 5:of them.
Speaker 1:I love I love Tashi because Tashi is like a full on character. He's sort of like the Tyler of Sharp China. And Tashi is a recurring character on the Sharp China podcast that you should obviously go listen to.
Speaker 2:Bill is Bill, we're gonna we're gonna we're buying a a Lububu for Tashi. Nick? Nick, can you Get figure it out.
Speaker 1:Yeah. Get Tashi's address. We'll send a Lububu.
Speaker 2:Yeah. Don't just get an entry level one. Tashi deserves
Speaker 1:Get the rarest one possible. The one of one, the most hyped. Take it out of the clutches of the most k pop addicted brain rotted teen who's ready to spend $10,000 of the parents' money Yep. And give it to the dog.
Speaker 2:So their faces and extremities are bare. The rest of their bulbous bodies are covered in
Speaker 1:I like New Yorker. This is this is exactly who I want to be covering this story is the New Yorker.
Speaker 2:Creatures are usually found hanging from phones or handbags Mhmm. Tiny demons haunting our accessories or and haunting lives.
Speaker 1:See? Demonic. You said it but New Yorker said it as well.
Speaker 2:Yeah. They come in a menagerie of more than 300 collectible forms. Mhmm. They can be matched to a personal style or mood. Pink fur for when you're feeling flirty, glowing eye, red eyes for a bit of an edge.
Speaker 2:Mhmm. Dress be the latte, scarred for a cozy vibe. The high end art fair Art Basel released a limited edition art handler, La boo boo, a batch of which sold out in twenty minutes. I think that Tashi needs the the art.
Speaker 1:For sure. As a result of their popularity, La Bubas is our, La Bubas are difficult to get a hold of, often out of stock both online and in physical stores. Their scarcity made me want one even more. Perhaps those who own them know something I didn't. So I turned to Partia, a Union Square boba tea cafe with neon lit claw machines that are perennially well stocked with libubu boxes.
Speaker 1:I plan to win my own tiny monster by skill. A friend and I picked up refreshments at the counter, sparkling grape yogurt and an iced green tea with vanilla mousse and traded $20 for 20 party tokens, would allow us to a scant four attempts at grabbing one of the Lubuwus stacked and grinning inside their glass cages. This is the Skinner Box. This is fun. I love I love games.
Speaker 1:I would probably fall for this. Though the cafe had just opened, you know, the last time I should thought make here's
Speaker 2:what we
Speaker 1:need
Speaker 2:to We need to make a a a golden retriever that can ward off the demonic LaBubu.
Speaker 1:Yes. You know the antithesis of the of the Antichrist like LaBubu. It is the Santa Monica Pier Mickey Mouse or or like a, you know, I forget exactly what I won. But I was with my son on the Santa Monica Pier and there is a challenge where you have to hold onto a bar, like a pull up bar, and then it pulls you up and you have to dangle. And the longer you dangle, the bigger the prize you get.
Speaker 1:And I held on for my life because I was fighting for the love of a four year old. And I did quite well. There are a number of tricks. So for the first minute, it doesn't rotate and then it releases and then it can rotate freely. And so that makes it a lot harder.
Speaker 1:I, of course, was not carrying my weight lifting chalk like I should have been. And so my my hands were a bit sweaty, and I underperformed. But I drew a large crowd. People were cheering. It was a heroic moment, something I'll remember forever.
Speaker 1:And so if you're trying to if you're trying to win a toy, stay away from the demonic claw grabber and instead do a feat of strength for your child. That's what I would So
Speaker 2:the author tries to tries to win one of these. He does not. And says, he why did I feel the need to own one?
Speaker 1:You didn't win?
Speaker 2:I didn't win. He just decided to cut his losses and Why go buy did I feel the need to own one in the first place? It seemed to be an accessory of lifestyle that I was missing out on and already late to adopt one constructed of physical goods that have attained Yeah. It it feels very You're you're gonna be late to the Lubuu game if you're, you know, buying it now that we are Talking Oh.
Speaker 1:We are definitely to this one.
Speaker 2:One constructed of physical goods that have attained intense online fandom status symbols that are both Instagrammable and consumable. Yeah. Why are they you know, I don't I don't know that anybody's eating their libubus except for Tashi. And yet this lifestyle seemed demarcated by objects that were ugly, strange and uncanny. There's Dubai chocolate, a candy bar stuffed with pistachio cream
Speaker 1:Yes.
Speaker 2:And dough that oozes pea colored mush. And I don't even have the we're not gonna go into
Speaker 1:Yes. The lore. You can look into it if you're interested. The Dubai chocolate story very
Speaker 2:interesting. There's a conspiracy theory there that I do think tracks.
Speaker 1:We don't have a tinfoil hat big enough. Yeah. For that one. But you can do your own research.
Speaker 2:There's matcha lattes, bright green caffeinated beverages that sometimes come out through with a red strawberry syrup resembling blood splashed on a lawn.
Speaker 1:What is this? I don't like any of this. I think the antidote to La Boo Boo's
Speaker 2:I mean, the main thing is
Speaker 6:we are
Speaker 2:far from the Everlane era of consumer goods.
Speaker 1:Sure.
Speaker 2:Right? This sort of
Speaker 1:needs to be garish.
Speaker 2:It to
Speaker 1:be controversial. It needs to be viral. It needs
Speaker 2:to be Built for the Built for the timeline.
Speaker 1:Yes. Yes. Yes. If you're looking for a physical good, get an Eight Sleep. Get a Pod five.
Speaker 1:You don't need to go to a claw machine to pick up an Eight Sleep. You can go to 8sleep.com. They got a five year warranty, thirty day risk free trial, free returns, free shipping. Does Labubu has a have a five year warranty? No.
Speaker 1:Does Labubu have a thirty night risk free trial? No. Does Labubu have free returns, free shipping? No. Get an eight
Speaker 2:sleep we didn't ask Matteo yesterday Yeah. Yeah. CMO was when are they coming out with Eight Sleeps for dogs?
Speaker 1:Because Yes. Yes. Yes. And also and also a third zone for the small child who demands sleeping in the middle and wants his own temperature of the night. That was a request that came in during the during our segment yesterday Yeah.
Speaker 1:From the family. Also, timeline was in turmoil yesterday around Eight Sleep, Delhi and taking shots at benchmark. I thought about it. I am incredibly bullish on Eight Sleep selling in China. I'll give you my my rationale.
Speaker 1:Okay. So a lot of Americans are saying, oh, China America conflict. It's the worst possible thing. The invasion of Taiwan would be disastrous. We need to be, you know, we we need to be extremely judicious with the, you know, our our frontier technology that we send to China.
Speaker 1:We need to restrict exports of of cutting edge frontier semiconductors. The H 20 maybe. Definitely not the GB 200. Definitely not the H 100. We'll see.
Speaker 1:They're not getting Blackwell. But they will be getting the Pod five, and I think it's incredibly bullish for world peace, and I'll lay out my rationale. So there are studies that show that aggression is deeply tied to lack of sleep. And the Pod five, as you know, makes it impossible to wake up on the wrong side of the bed.
Speaker 2:Yep.
Speaker 1:So if you get a good night's sleep, you are less likely to want to engage in geopolitical conflict. So Agree. I think we need to be sending pod fives to the Forbidden City, to Zhongnanhai, to Beijing, to every CCP official, to every PLA official, and making sure they have a good night's sleep so they wake up refreshed. They wake up feeling good. And they wake up like, I don't want to go to conflict with America.
Speaker 2:Maybe it's
Speaker 1:Trump should take We can work together.
Speaker 2:Trump should have America take a position Yes. In
Speaker 1:Eight Sleep.
Speaker 2:In Eight Sleep. Absolutely. And maybe get on the board.
Speaker 1:Yes. I think it's I think it's a it's a strategically important business for the United
Speaker 2:that we could take away at some point if we did get into a conflict Yes. And we didn't want them to be sleeping If
Speaker 1:if all of China is sleeping on
Speaker 2:cut off the supply. And
Speaker 1:we can remotely turn it off and say, hey, you're not getting a good night sleep.
Speaker 2:Or turn it really hot.
Speaker 1:Really hot. Oh, so you like it cold? Now it's hot. This is a major geopolitical Yeah.
Speaker 2:So right when they're gonna take Taiwan
Speaker 1:Yes.
Speaker 2:You just crank them up
Speaker 1:Yes.
Speaker 2:Exactly. And everybody's sleeping.
Speaker 1:No. Cancel the invasion. Cancel the invasion.
Speaker 2:The New Yorker says these products feel hallucinatory. They take the social media mandate of self modification to its logical extreme, embracing easy breezy chemical additives and image augmentation enhancing the self until it spills from its pores. The aesthetic is as much a defense mechanism against the Internet era as it is a self aware in joke. We can see what late hyper digital artificially intelligent capitalism is doing to us. Isn't isn't it a laugh?
Speaker 2:It's very unnatural looking. The cultural critic Dean Keswick told me describing the dominant visual style of extremely online consumerism. It kind of relishes its own artificiality.
Speaker 1:Do you know this song?
Speaker 2:I do not. I do not watch that song.
Speaker 1:Blake the man one thousand wrote a song about Dean Kissick. It's a banger. You should go Anyway, check it cultural critic. I love Dean Kissick.
Speaker 2:Any pretense of the pure organic is undercut by the kind of willful alchemy. Everything is an admixture. The skin care brand Road put peptides in lip gloss Mhmm. The Los Angeles based grocery store chain, Eirwan and
Speaker 1:Like IGF one in lip gloss? The Wolverine peptide? I'd be down for that. What else can you
Speaker 2:157.
Speaker 1:Oh, b b c one
Speaker 3:five seven.
Speaker 1:That's the one.
Speaker 2:Huge muscular
Speaker 1:b c
Speaker 2:one five seven. Face. Yeah. The I like that. Airwand enhances multicolored smoothies with collagen and sea moss.
Speaker 2:Touchlin makes outer mist, scented hand sanitizers. And the drug and beauty brand Hers produces an Ozempic knock off that comes in a bottle the color of matcha. I do As not know
Speaker 1:if you're injecting yourself with Japanese tea. I can hear the barista now. Would you like a shot of semaglutide with that? These days, the memes are to be ingested into the body not just viewed on screen.
Speaker 2:That's a good line.
Speaker 1:Yeah. We should move on from this. It's a long article. You can go read it in The New Yorker and have a have a deep dive into IRL Brain Rot and the trend. I want to read this article by Nadia Asperuhov, Delian's wife, who's been on the show.
Speaker 1:And she is responding to Catherine Boyle's article, The Great Tech Family Alliance, talking about pronatalism. I thought it was interesting. We didn't get to it when this dropped. But it's in the New Atlantis. And I guess the New Atlantis is doing an essay series of replies to other essays.
Speaker 1:I thought it was kind of an interesting format. Anyway, Nadia kicks it off by saying, Catherine Boyle's speech is a sign of a new song making its way through the tech world, one that thrills the importance of investing into our social infrastructure, strengthening our nation, and yes, building families. I agree with all of that. It's a hopeful message. But like Tech's early forays into politics, began as a vague mood board of civic aspirations before coalescing into real policy efforts and wins, the pro family cultural shift still has a long way to go.
Speaker 1:And so Nadia is is laying out a new pathway towards, pro family cultural shift in tech. This is not to say there isn't a real movement happening. And as a parent, I'm grateful for it, says Nadia Asperuhov. But I feel the gap between rhetoric and reality as I navigate the tech world as a writer and researcher, particularly when visiting the San Francisco Bay Area. Never
Speaker 2:ask a pronatalist founder VC how many children they have.
Speaker 1:I mean, you can't do that one in this case because I believe Catherine Boyle does have kids. Of course. But I have long joked that, yes, bro, will definitely read your 5,000 word essay on pronatalism, but I got to take my son to soccer right now, so I'll get to it later. There were too many instances of that for sure. Dinner conversations still tend to circle around whether children are worth having at all or they treat global fertility rates at arm's length.
Speaker 1:Many in tech embrace a borderless lifestyle that implies constant mobility, hosting events in cities like New York and Austin, which doesn't blend well with family obligations. Children are rarely present at social gatherings. I've had the strange experience of bringing my child to events where I'm praised for this act as some sort of pro family ideological flex, which while flattering, misses the much less glamorous truth. And with no evening childcare available, I didn't have a choice. That that's a really, really good point.
Speaker 1:There's something telling about this disparity. Tech is clearly eager to recast itself as pro family, but it hasn't yet internalized what is required to for support families day to day. I mean, I literally just experienced this where I was invited to an event, and I was like, yeah. I'd love to stop by. I wrapped the show at two.
Speaker 1:I might be able to get there, but I gotta be home for family dinner. That's at six. Like and the event wound up being really far away. And I was like, there is just no way I can get there an hour and then get back and do anything meaningful there. And that's just the nature of these things.
Speaker 1:Like, the the
Speaker 2:the Yeah.
Speaker 1:I had thing
Speaker 2:this morning. We we saw a friend that he invited us to an event. And I said, if I go to that, I won't see my fam my kids for
Speaker 1:Like forty eight hours. Yeah. Yeah. It's tough.
Speaker 2:I say goodnight Yeah. At 08:30.
Speaker 1:Yeah.
Speaker 2:I see them the next day Yeah. Around five.
Speaker 1:Yep.
Speaker 2:If I go to something in the evening, I won't see them again till the next day.
Speaker 1:Yeah. There is a real trade off between like we we have said in America in TAC, we work really hard. We also are saying we take our family life really seriously. Something has to give. It's probably the the dinner parties and the happy hours for the most part.
Speaker 1:Yep. Unless they're
Speaker 2:I mean, I think I think There's very high in in tech, you you sort of grew up hearing that, you know, global warming was gonna make the world uninhabitable Yeah. At some point in in the near future. That was the the sentiment. If you turned on the television, that's what you saw. Yep.
Speaker 2:And I just remember hearing, you know, even as a teenager Yeah. You know, talking. Oh, I don't I don't know that it'll make sense to have kids. Right? If if the world is so Yeah.
Speaker 2:Bad and dark and and growing up in coastal
Speaker 1:we need way more kids because they're the big ones that invent the technology that solves the problem. The solution is always like more ingenuity, more people in my opinion. I'm not Thomas Malthus pilled. It's crazy to see Malthus coming back. The Malthusian trap.
Speaker 1:Are you familiar, Tyler? The Thomas Malthus, the Malthusian Wait.
Speaker 3:I don't know the trap.
Speaker 1:So so the Malthusian trap was that Thomas Malthus was an economist a hundred, two hundred years ago or something. And he looked at the growth rate of of farming and the growth rate of the population and was projecting exponential growth in population while linear gains in farming. And And his conclusion was that we were all going to starve to death because we would never make enough food. We would never create exponential growth in food production to match the exponential growth rate in the populace. Of course, we did just that.
Speaker 1:And the number of farmers went from like 90% of the population to like 2% of the population. And although, obviously, food prices are important and starvation is still an issue, in general, we humanity has survived the lack of food. And so it's called the Malthusian trap. It's Malthusian ideology to be afraid of a linear trend not being able to ever go exponential. And so if you think about like carbon recapture or anything that is mitigant to waste heat and pollution and carbon emissions, you track this out and you say, well, carbon emissions are growing exponentially.
Speaker 1:The the temperature is growing exponentially. And our progress on solving that is growing linearly. But all it takes is actually finding the correct exponential solution, which might just be like exponentially growing nuclear or exponentially growing solar. And then all of a sudden, we're we're having a very different conversation. Anyway, Catherine Boyle, as a parent herself, says Nadia Asperuhov, is right to highlight pragmatic changes as the scaffolding that's required to build a pro family culture, flexible work, improving and reducing the cost of education, raising the status of parents.
Speaker 1:Agree with all that. And like Boyle, I believe that tech has the ability and resources to bring this future to fruition if it wants to. Oddly, however, it is tech's unmatched capabilities that might be what's holding it back. Tech is arguably the best place in the world for unchecked personal ambition to flourish, particularly for young childish people. You, grind and get the $100,000,000 out of your laptop.
Speaker 1:Not a lot of time to raise kids while you're in that process. But this type of environment can delay or disincentivize family formation. My peers in tech who are reluctant to have children often express fear that it will interrupt the arc of the careers they've worked so hard to build. That, I think, is the primary tension, not between the family and the state as Boyle argues, but between the individual and collective ambitions. Both the state and the family ask us to make sacrifices for something bigger than ourselves, and this perhaps is why why they have historically fought each other for mindshare.
Speaker 1:What tech offers is the opposite, a chance to realize a vision that is entirely one's own. Tech worships individual talent. Look at the talent war and the AI researchers that are getting the absolute bag right now. And it's a unique thrill to live and work among peers who don't shy away from greatness. I agree.
Speaker 1:But it also means that tech has to work harder than other industries to demonstrate that starting a family doesn't require giving up these ambitions. That case can't be made through Vibes alone as any parent can attest who has spent a sleepless night with a sick child before a big meeting, Zooming with one hand while playing peekaboo with the other and or who has missed a deadline because childcare fell through? The answer to this, more secondary sales, more tender offers. If you're a venture capitalist, you're talking a big game about being pronatalist. You need to put a couple million dollars into the common, in a tender, and make sure that childcare is paid for.
Speaker 1:What do you think?
Speaker 2:I like it. I like it. My my lead VC in my last company, the second that I told him he's having a baby, he said, time for a raise.
Speaker 1:Time for a raise. And it was Yeah.
Speaker 2:Like it was very meaningful
Speaker 1:Totally.
Speaker 2:Important at that at that time.
Speaker 1:Yeah.
Speaker 2:And yeah. I mean, that that's the if you're an entrepreneur and you're building a company and you're having a child and you aren't gonna be able to have access to childcare, that is a Yeah. That is a
Speaker 1:A serious leg weights while you're running. Putting an extra 45 on the bench press.
Speaker 2:Exactly. Maybe not. Unnecessary. Maybe a couple plates. A couple plates
Speaker 1:on each side. Unnecessarily. Yeah. You need one of those shirts that makes it easier to bench press. Are you familiar with those?
Speaker 1:We gotta get those. Have you seen these? No.
Speaker 2:Yeah. Appreciate that's our new merch drop.
Speaker 1:No. That is a great merch drop. So it's a compression shirt that basically, it keeps your arms like this, like tight. And so when you stretch back
Speaker 2:and some of the weight off.
Speaker 1:To stretch like 20 pounds. And so people do it to get comfortable. And, like, yeah, I can't really do three fifteen, but if I wear the shirt, I can. And then they get comfortable with three fifteen. They do it a bunch, and then they can take the shirt off, and then they hit three fifteen, and then they can push up.
Speaker 1:So, yeah, I think that's our next merch shop for sure. For sure. To hear news coming.
Speaker 2:Big news.
Speaker 1:This will be for the for the the people in the chat first. Let's continue with Nadia. If tech wants to embody more pro family values, it needs more skin in the game. It's not enough to tweet about population decline or pass around graphs on it in the group chat. Tech will learn much faster what's required by having kids, raising them, and supporting each other through the ups and downs.
Speaker 1:Pro family culture means figuring out how to meet the family's needs for parental leave, affordable childcare, quality education, and social environments that are welcoming to children and family lifestyles. Until then, the rhetoric will feel less like a movement and more like a mood. Tech has a track record of moving quickly once it figures out what it truly wants. If the pro family turn is real, and I hope it is, well, then what we need next is the is to move the discourse from talk to action. Only then will we be able to say it with a straight face that tech is building not just companies, but families too.
Speaker 1:Fantastic article, Nadia. Thank you for posting that. Oh, if you wanna if you wanna if you wanna invest in the public markets completely unrelatedly, go to public.com, invest for those that take it seriously. Try to find the translation. Sometimes the anti transition keeps you guessing.
Speaker 1:Yeah. It's public.com is investing for those who take it seriously. They got multi asset investing, industry leading yields, trusted by millions. Oh, you wanna transition? Why don't you set up an investment account in public.com for your child?
Speaker 1:Do your own Gersner account. Tyler, what you got?
Speaker 3:It was an anti transition just like anti memetics.
Speaker 1:Oh. There we There we go. Yeah. All these other all these other all these other livestream hosts, they think they need to have the perfect transition. I keep you guessing with the anti transition.
Speaker 2:Well, we have some big big big breaking news. Elon has hit the timeline and Ani from x AI has new outfits.
Speaker 1:New outfits.
Speaker 2:I know. So for all
Speaker 1:the grok heavy subscribers, get ready to
Speaker 2:This is big.
Speaker 1:A little virtual try on.
Speaker 2:Fortnite skins for your companion.
Speaker 1:Didn't we just say this?
Speaker 2:You were saying
Speaker 1:That's the way that they'll monetize is that there will be a number of outfits and that the outfits will
Speaker 2:be On the same day.
Speaker 1:More expensive outfits. I want a Birkin.
Speaker 2:Yes. I want a Lububu.
Speaker 1:I I think we just unlocked like the real value of the virtual AI companion economy. And all of a sudden, was previously thinking this is a single digit billion dollar opportunity. Now, the moral stuff is aside. Like, think me and you are both like, we don't love this. Like Yeah.
Speaker 1:And that's the point that Jira tickets makes here. He says, sir, we need to get to Mars. And I agree with that. I think the efforts would be better spent getting us to Mars and getting us to AGI and and solving physics. And I hope that none of that takes a back seat to this stuff.
Speaker 1:But
Speaker 2:You got the new fits, Tyler?
Speaker 1:New outfits already?
Speaker 3:Yeah. Are
Speaker 2:they free or do you have to pay?
Speaker 1:Are there any upgraded pets? They're free. There's no in app purchases yet? They're all free.
Speaker 3:No. No in app purchases yet.
Speaker 1:Okay. Unfortunately. Well, let's hope that one of the upgrade picks is just a donation to the next Mars mission. Yeah. Maybe put on instead of being so scantily clad, you could put on a full space suit.
Speaker 1:They're the AI companions are on a trajectory to monetize very well, specifically in price discrimination. And so this is the brilliance of OnlyFans. And why OnlyFans is so profitable is that there are both power law creators who generate the vast majority of the revenues and there are power law customers that spend the most money on the individual creators. This is the value of this is the economic insight in Fortnite. There are power many the the median Fortnite player probably spends zero.
Speaker 1:But the biggest whale on Fortnite is probably spending thousands of dollars. And so that that price discrimination, there's going to be someone who is on Grok and and talking to Annie and spending thousands of dollars on virtual goods, I would predict. Yep. Think that's where this goes.
Speaker 2:Same thing as the dynamic in mobile gaming.
Speaker 1:Mobile gaming is the same.
Speaker 2:Whales that are spending hundreds of thousands of dollars.
Speaker 1:Bringing price discrimination into a category that previously did not have it, where it was one size fits all, all you can eat. Like, Netflix does not have this. Everyone pays the same price for Netflix. But if there's a version of the product that can ramp up so you're making more money and this is the beauty of just online advertising. Meta makes probably makes more money from advertising Aquanauts to you than than someone who has lower has has lower penchant for luxury watch shopping.
Speaker 1:Yes. Anyway, Dan Nolan says, a guy on Reddit built something I've wanted for ages, scraping public data and putting together a leaderboard of real estate agents who appear to serially get prices wrong. And so I guess you could go and find the real estate agent who is underpricing assets and then and then go and buy a house from them. Maybe this is the solution to the housing crisis. Maybe this is alpha for Opendoor in a bull case for Opendoor.
Speaker 1:Mhmm. Opendoor, of course, buys and sells real estate and houses. And if there is market dislocation and an inefficiency in the market, you would expect financial institutions to take advantage.
Speaker 2:So this real estates real
Speaker 1:Yeah. What you got?
Speaker 2:Realestats.org.
Speaker 1:Realestats. That's a good point.
Speaker 2:Having a leaderboard of just the people that misprice assets.
Speaker 1:And they do it to both directions? They overprice and they underprice? I feel like How responsible is a real estate agent for mispricing a house? I feel like a lot of that's driven by the home buyer. Like, the home buyer might say, I know what I got.
Speaker 1:I want 3,000,000 for my house. And the real estate agent is like, but you made some really weird decisions in the remodel. You have four movie theaters.
Speaker 2:And Oh, people also will strategically underprice it at listing
Speaker 1:Yeah. In order to Demand and then Bidding. Over. Yeah. Yeah.
Speaker 1:Yeah. Aren't that many people in this neighborhood that need car lifts in their garage. You're like, but everyone wants car lifts. Everyone has four GT three RSs that they need to store in the in in the plastic. Everyone has supercars in this neighborhood.
Speaker 1:They're like, at at at 1,500,000? Yeah. People usually spend 50% of their net worth on cars. Right?
Speaker 2:Yeah. They all should.
Speaker 1:Get a get get a 1,500 square foot, $1,500,000 house in LA and spend it and get four supercars for the next one point five.
Speaker 2:Exactly.
Speaker 1:Exactly. And secure it all with an un Well,
Speaker 2:we have another massive announcement.
Speaker 1:What's that?
Speaker 2:Again, I think everybody listening has been waiting for this. Yes, Really, I'm feeling the AGI right now. Okay. I'm feeling the AGI. We gotta update our timeline.
Speaker 1:Update our timelines, Jordy.
Speaker 2:Notion has launched offline.
Speaker 1:Let's go. Let's go. Let's go.
Speaker 2:Let's give it up for the Notion team. I actually think this I mean, this is cool. I mean, I I I
Speaker 1:Chopping wood.
Speaker 2:I used to use Notion
Speaker 1:Chopping wood.
Speaker 2:Lot. And, you know, even if you have a small feature update, make it make it feel big Yep. Clearly, their users are excited about it. Terminally, engineers says, Notion is so funny. Announcing an offline mode for a to do app in 2025.
Speaker 5:This is
Speaker 1:the right thing to do. Don't get distracted. We saw this Figma. Figma launched, Figma Make, vibe coding platform, super on trend AI stuff, then simultaneously, like, yeah, we improved Figma design.
Speaker 2:No Figma site.
Speaker 1:Oh, yeah. Sites for sure, but also just, like, minor iterations on, you know, the the the opacity layer and and how how how you can implement parallax in your design. Like, you you you you can't get lost in the sauce. You have to stay on the trend and be using the latest tools and and and be on the cusp. But also, you can't let the culture of of, you know, regular iteration fall by the wayside.
Speaker 1:You can't you can't get distracted by the by the shiny green tennis ball. Sometimes you have to focus on just, you know, scratching your ear. I don't know.
Speaker 2:This golden very low temp post here from Mopar. Two Two likes, 61 views. Under Highlighting the MIT report that we covered yesterday. Ninety five percent of Gen AI pilots at companies are failing. Mopar says, No, babe.
Speaker 2:Your zero ROI is perfect. Big one. Scare me. Yeah. I think this is a this is a real real problem.
Speaker 2:There's a lot of Gen AI companies that have sold in pilots to things like healthcare
Speaker 1:Yeah.
Speaker 2:Systems that are not these are not gonna turn into multi year contracts.
Speaker 1:Yep.
Speaker 2:Hopefully, a lot of them do. Some of them do.
Speaker 1:Yep.
Speaker 2:Maybe there's still business there. But your ARR is not necessarily real.
Speaker 1:Yeah. We'll see. I I I wonder the methodology of this report. I wonder what a generative AI pilot means, what failing means. I I wouldn't be surprised if a lot of companies are using tools that have implemented generative AI features under the hood and they don't even really realize that their software is just getting better.
Speaker 1:But it's probably deeper in the stack. It's probably a little more, I don't know, obfuscated. And they're just seeing like, oh, the fraud detection algorithm that my, you know, ERP uses is a little more reliable. But I didn't, like, pilot that. Just like the software I the tools got better.
Speaker 1:The the graphics in video games got better. Like, there there's not a a binary moment. People are hoping for the chat GPT moment of generative AI pilots and it might not be coming. We might be on a smoother adoption curve there. Anyway, what else?
Speaker 1:We have a
Speaker 2:post here from Julie Chang. Very important. Who wants to own Bill Walton's longtime San Diego estate in the Marston Hills neighborhood, which has two homes sitting on 1.3 acres combined. Both homes sit abutting a trailhead, seven beds, eight baths, listed at 5,000,000. Absolutely giving it away.
Speaker 2:This thing looks beautiful. What else we got here? We have is it Vlad or Mark joining? Vlad is joining in just three minutes. So we'll keep
Speaker 1:I'm just posting from my personal account just letting everyone know.
Speaker 2:Alyssa says she's looking for the most performative man in San Francisco.
Speaker 1:Yeah. What is this? What what
Speaker 2:Can you explain this, Tyler?
Speaker 1:Tyler, do you understand this?
Speaker 3:A little bit. So there's this constant like, you're like performative guy. Right?
Speaker 1:So Yeah.
Speaker 3:What's you're going to like a matcha. What what do they sell matcha?
Speaker 1:Matcha.
Speaker 3:Matcha. You go to like a a coffee shop Okay.
Speaker 1:Where he's drinking matcha. He says
Speaker 3:You have a book with you?
Speaker 1:Oh, yeah. Like you with Infinite Jest on the subway.
Speaker 3:What?
Speaker 1:Like you like how you were reading Infinite Jest on the subway. That was like a performative thing that you did.
Speaker 3:Well, okay.
Speaker 1:And how you and how you were telling everyone about how you're, you know, you're a bit of an intellectual and you read Infinite Jest.
Speaker 3:Okay. Okay. You know, let's move on from this. But yeah. There's like like intern Michael, he loves matcha.
Speaker 3:Okay. He's kind of a
Speaker 1:very guy. Cool. Yeah. Oh, he's performing? Yeah.
Speaker 1:You're taking shots? He can't defend himself. He doesn't have a mic. That's not fair.
Speaker 3:But then, I don't know. Yeah. You have like a a tote bag? Yes. It it's like a
Speaker 1:Yeah. Signaling. Signaling. Yeah. Yeah.
Speaker 1:I Yeah. I'm just unclear on on exactly what people are signaling. Yeah. Is it is it more of the aesthetics or is it more like the start up swag? Either way, the SF's Performative Male Contest will be happening at Alamo Square Park on August 22 at 7PM.
Speaker 1:They're putting up posters in San Francisco advertising it. They should get a billboard. They should go to adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising.
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Speaker 6:What's up, guys? Good to meet you. Thanks for having me.
Speaker 1:Thanks for joining. Give us can you give us a little bit of a state of the union on Robinhood? You've launched so many different products. Like, how do you see the shape? How do you define are you a financial institution?
Speaker 1:I remember when I first used the product probably almost a decade ago now, I guess. It was an app. And now it's a company. Now it's a business. Now it's an institution.
Speaker 1:What is the shape of the company today? And how has it evolved?
Speaker 6:Well, first off, our mission hasn't changed. Our mission has always been to democratize finance for all. And what that means to us is we really see Robinhood as the defender of free markets.
Speaker 1:And
Speaker 6:we're building a financial super app, a platform where all of our customers can custody and hold any financial asset or conduct any financial transaction. And obviously, it started with stocks, but it's expanded across multiple domains. We have a credit card, which in my unbiased opinion is the best credit card on the market. Banking, which is a high end private banking inspired offering is coming out very soon. We offer, I think, the best retirement account on the market for the self employed entrepreneur, folks that might not have access to a traditional four zero one.
Speaker 6:So really, we've been on this journey, and we've increasingly been expanding the scope and capabilities of what we offer.
Speaker 1:Does that mean something like I when I think about legacy financial institutions, I think about like an auto loan, a mortgage. Like, is that coming down the pipe? I mean, I'm sure you can't comment on specifics, but just like that shape of experience for consumer finance, like what are all the touch points as you kind of plan the next phase of growth?
Speaker 6:Yes. I mean, the scope is broad, right? Any financial asset, any transaction. We actually, a couple of months ago, started piloting a mortgage offering in partnership with Sage Home Loans. Cool.
Speaker 6:And surprisingly, you know, I announced that on x, and it was probably one of my best performing tweets of the year. Mean people are really interested in these types of offers from Robinhood. The focus is really on daily habits, the financial products and services that you use on a daily basis. But I think serving our customers well with those gives us the opportunity to do these one time offers. And you could imagine if we serve you well with your banking needs, we would be sort of like your first call if you want a mortgage.
Speaker 6:And I think the wrapper behind all this is our Robinhood Gold program. So at first when I launched when we launched this, there was skepticism because subscription products never really worked in financial services. But we've seen this interesting thing where someone joins Robinhood usually to buy a stock or a crypto. Yep. They sign up for Robinhood Gold very quickly.
Speaker 6:Our attach rate for, you know, day one has gone up quite high. And then once they become a Gold member, they look at what else is offered in the gold bundle. And even if they're not ready for that service like a mortgage right away, we usually are top of mind if they ever become interested in something like that in the future.
Speaker 2:How do you think about services broadly over the long term? I think our generation oftentimes saw, you know, having somebody at your bank, for example, that you could call and talk to as kind of a bug. Right? And and then at some point you realize, hey, this is actually a feature. It's actually great to have somebody on the other end that you can call if there's an issue or things like that.
Speaker 2:It's very different margin profile. Right? Yeah. It's different different margin profile but but how are you thinking about that side and especially in the context of of AI and and giving people that ability to kind of have these like new ways of of interacting with platforms. I could I could imagine a world in the future where somebody can call their, you know, call Robin Hood's call effectively call Robinhood and have a conversation with the platform and that person not necessarily even being human.
Speaker 6:Yeah. I mean, we're already basically there. Wow. You can have a chat interaction with a Robinhood agent and the majority of our cases are handled by our in house AI. And I think people don't realize this about Robinhood, but we've looked at where we are relative to others in our industry and I think we're best in class.
Speaker 6:Like we're doing very sophisticated things with AI both internally and in the product through Robinhood Cortex. The service model has evolved and I think what it's going to look like in the future is if you're a customer that's high net worth or a little bit older and we serve an increasing number of these customers as time goes on. I mean, I'm talking to customers on a semi regular basis who are thinking about moving hundreds of millions into their Robinhood account. And I wasn't having those types of conversations But a year we have Robinhood concierge that gives you a high touch experience for those types of customers. And the aspiration of the AI team is let's just make sure the baseline level of support that everyone gets is world class with like an increasing amount of sophistication.
Speaker 6:And I think we've been making a ton of progress. And like I mentioned, I think, best in class in terms of how we use AI.
Speaker 2:How do you let's talk about IPOs. That's like the number one thing I wanted to get your kind of updated thinking on. I'm curious how you expect the IPO process will evolve. Obviously, we we covered the Figma IPO live at NICE. It was an incredible day.
Speaker 2:Was unique to our industry because it's a product that many I'm I'm sure everybody that's listening to this has used at at some point or another. But there was certainly a frustration from the retail community and I'm sure even a frustration from your side. Right? People were able to get into get in at the IPO price but not necessarily as much allocation as as some would have liked. I'm sure you were doing everything you and the team were doing everything you possibly could to get as much allocation for your users as possible.
Speaker 2:But how do you think that process is evolving now that you know, we have millions and millions of investors in The United States that are smart enough to know when they wanna get in, you know, and At
Speaker 1:the IPO.
Speaker 2:At the
Speaker 1:IPO completely different shift from a decade ago. I mean, we have we have multiple ways of going public with direct listings Yeah. Traditional IPOs, SPACs. Like, the the landscape's changed a lot, the and the appetite for these products has changed too.
Speaker 2:Yeah. And so I'm curious, like, what what kind of change you're personally pushing for and and what role Robinhood will play in that?
Speaker 6:Yeah. And by by the way, a lot of my friends were with you guys there. You know, Andrew Reed
Speaker 1:Oh, yeah.
Speaker 6:From Sequoia. Danny, I believe
Speaker 1:Danny Reimer. New York. Index. So,
Speaker 6:yeah, shout out to those guys, early Robinhood investors as well.
Speaker 1:Yeah. That's great.
Speaker 6:Our approach to this, we you guys probably know, four years ago, we rolled out this product, IPO Access. We started with some companies that were going public in 2021. And then our own IPO had, at the time, the biggest or if not one of the biggest retail allocations of over 20%. And at first, was kind of a challenge to get companies excited about this. There was skepticism about the value of retail.
Speaker 6:The companies were concerned that retail would sell and they wouldn't hold. And over time, that shifted to the point where nowadays the majority of companies that are interested in going public are coming to us and talking to us about retail. And I think that's an awesome shift. And where I'd like to take that is even earlier in the life cycle. Now we're helping companies and retail get access to IPOs, but can we go to late stage privates?
Speaker 6:Can we go early stage privates? Can we go seed rounds where actually Robinhood can offer capital as a service to entrepreneurs? And we can deliver a button where, you know, you you press the button, maybe you issue some information, and you get capital for your business deposited directly into a Robinhood account for for you to operate. And I think Let's kind
Speaker 2:of go could could we go through could we could we kind of talk through those specific stages and and kind of what the product would look like? On the one hand, late stage privates, over the summer, you had talked about tokenized products that could involve late stage privates. That's super exciting. How how are those conversations going? This is such a like hot hot button issue.
Speaker 2:Obviously, companies and and CFOs that are that are worried about, you know, being mark to market. But it's ultimately something that everyday retail investors want so badly. Right? People are smart. Yep.
Speaker 2:They know they know that they know they can identify generational companies and and and CEOs and teams and they want they want it. So it's gonna happen eventually. Right? But at the same time, there's this incredible kind of friction at this moment in time in order to get to that point.
Speaker 6:Yeah. So I I started making a public stance on this whole thing with an op ed in the Washington Post in January. And I think that op ed was basically universally acclaimed. People got very excited about it. Everyone's on board.
Speaker 6:But, of course, I'm not one to just write op eds. I I think a lot of people are doing that. I wanna go and do the thing and actually execute on on these things. And as it turns out, execution and and whenever you're the first to do something, it's a it can be a little bit messy. It can be a little bit unclear.
Speaker 6:But going back to our mission, you know, we believe in free markets. We want people to own the means of production to to the greatest extent possible. AI can be this massive transformative force. And I think it's very, very important to have everyday people aligned with that, right? If you're worried about AI having disruption on the labor market, You could either fight it, which you're more likely to do if you have no ownership stake or if you have an owner, you're kind of rooting for that innovation.
Speaker 6:So I'd like to live in that latter world. And we see a path. We have the technology to do it. We've had a lot of companies actually come to us and they want to be a part of providing access to private markets. And I think at first there will be a little bit of like hesitation just like for IPO access.
Speaker 6:But I think five years from now we'll be looking around, retail will have access and we'll all wonder why we were so foolish and and having such resistance to to being in this world. So Totally. I'd like to accelerate that, and and I'm very motivated to to make this happen in a way that addresses everyone's concerns, even the companies with the real time pricing that that you mentioned.
Speaker 2:Totally. Yeah. It's it's it somebody needs to come in and just rock rock the boat, basically. Right? Like, it it wasn't you know, it seemed obvious that it wasn't gonna happen organically or it has been happening, but in ways that aren't necessarily good for investors.
Speaker 2:Right? Like the the meme from the last week is everybody's being offered these like incredibly layered SPVs. Yeah. And that that just shows that like capitalism is gonna find a way to allow this demand to find supply. But if you have all this friction, it's not going to happen in a way that actually is good for the demand side.
Speaker 6:And I think this is an incidental. I don't think anyone sat around the table and said, we don't want retail investors 80% of the market that's unaccredited to not have access to the leading innovation companies of our era. I think it was incidental. In the past couple of decades, it's gotten harder and harder for companies to go public. There's more process.
Speaker 6:It's a greater burden, and some companies are just avoiding it altogether. And at the same time, the private markets funding environment for startups has gotten much easier to the point where now companies can raise tens of billions, if not more, in the private markets. And I think the outcome of that, the collateral damage, is that retail is not getting access to the leading company in the space, the emerging space industry and many of the leading companies in the AI industry, which I think is yeah, should be allowed to continue.
Speaker 2:How think do about offerings? You mentioned potentially at one point having retail be able to access even earlier stage opportunities like maybe seed or Series How would how how do you kind of what what's your vision for for that kind of product given that Yeah. A lot of Robinhood users are gonna be, you know, used to to making investment and maybe changing their mind about it and getting out of it. And Sure. Sure.
Speaker 2:As we all know, if you you back a company at seed, you're riding with them for a very long time. And maybe you can make you know, maybe there's features that would allow you to to to let people get out over time. But I'm curious kinda what what your vision for for that would look like.
Speaker 6:Yeah. I think the interesting point is that the customer and the market are slightly different between an early stage seed investment and a late stage private. So early stage seed investment, there's primary capital. Your market is entrepreneurs that are in need of a capital as a service offering. So whether it's on chain or off chain, what I think would be very attractive is pressing a button, putting in some information, and getting money into your business bank account as easy as possible.
Speaker 6:When I was a seed stage entrepreneur, I spent half my time fundraising, if not more. And so the time at which your time is most critical and you need to build your product and make sure your business works, you're spending a ton of time trying to fundraise. So I I think it's very, very valuable if you lower the friction to to getting capital. And you'll get more startups, more entrepreneurship, which is great for the long term. So there's one, if it's a late stage private, your market increasingly becomes secondary transactions from early shareholders and employees.
Speaker 6:And I think that's very, very different. And I think any privates offering has to like deal with these realities that you have to have two slightly different customers and constituents. And I think where they failed in the past is by treating them kind of as one. So we're thinking a lot about this. I think as time goes on, I'll get much more specific.
Speaker 6:But Yeah. I I think what what you'll see is various mechanisms. The way the way it's gonna work is Robinhood will get exposure through various means to these assets. Mhmm. We'll hold them in a box, very much like how stablecoins work.
Speaker 6:You know, you get exposure to dollars or treasuries, hold them in a box. And, you know, distribution overseas will have tokenization as kind of a delivery mechanism. And in The US, it'll be tokenization, hopefully, once the regulatory environment matures around that. But there's also lots of other means to give access to privates.
Speaker 1:Is there a risk that companies wind up, like, changing their docs to try and push back against this? I I remember forward contracts were pretty popular in the secondary market for a while, and then companies started saying, hey. No forward contracts, early employees. Like, you gotta go to us because we have a ROFR, and we want to offer that to our
Speaker 2:forward contracts is
Speaker 1:Yeah. Yeah. But, you know, they they they they they they like, capitalism finds a way, as always. But I'm just wondering if there's other, like, layers of abstraction that might be more dominant. Like, they don't have nearly the brand with retail traders, but there is a world where you're slicing venture funds and offering those to retail traders.
Speaker 1:And then the companies might be a little bit more on board because the because they like, they don't wind up with a retail army that's, like, upset with their latest product release or monitoring them. Yeah. But they might still see the economic upside or exposure. What do you think about that?
Speaker 6:Yeah. I think all of those are right. Mean, some of those vehicles exist already. Yeah. And like you said, I think we'll find a way.
Speaker 6:I do think over time, companies will see the value of this. It'll be right now the companies that are coming to us for IPO access see that when you have an established retail base as a public company, there are certain advantages, right? Your customers are also active shareholders in many cases. They can defend you. They can give you good feedback, but they're a constituency that companies are beginning to value more and more.
Speaker 6:They want to hear from them. They want to encourage retail participation. And I think you'll see that at earlier stages because companies will believe and I think it's true that cultivating retail interest early has a compounding effect as as you go public and and even beyond.
Speaker 1:I I I know this story has been, like, beaten to death, but we talked to Mickey Malka about the round that came together in the middle of the night during GameStop. But I'm interested to hear just about what has changed technically and then financially and then from a brand perspective in terms of, like, the going through that cycle, making it through, but then just having a lot of folks out there who are like, oh, like, I had a bad experience, and and I'm I'm still I'm still holding the grudge. How do you win them back? What's the strategy both on the actual, like, business building side and then the messaging, the changes that you made? Like, what what's the full postmortem?
Speaker 6:Yeah. I mean, it's there there's this phrase that trust is slowly gained and can be lost in an instant. And I I have validated that that's basically true. When when January 28, the the date that we'll live in infamy and Robin Hood lore came down, we saw, you know, hit to our NPS. Obviously, on social media and across every channel.
Speaker 6:It was abundantly clear that customers were unhappy. And we've had to climb out of that slowly over time. And I think there have been moments where we've sort of like gained a Net Promoter Score. It's clear that we've done good things and we've sort of like accelerated earning trust from customers. But there's no magic formula where I snap my fingers and say the right words and suddenly you make up for that.
Speaker 6:I think that it's done by delivering on our value proposition and being sort of like a consistent trusted member of of the ecosystem for many, many years. And it was probably like a year and a half ago where it became clear like, oh, okay. We've, like, shaken off and And turned the I think we've been on a great trajectory since then with some of the highest Net Promoter Scores in the past four years and customers are very, very happy. And I think we just have to keep executing. There's there there's the only way is through.
Speaker 6:Right?
Speaker 1:Yeah. Yeah. That makes sense. Rudy?
Speaker 2:As somebody who runs platform that actually facilitates stock trading at scale? What gets you excited about the potential of tokenized stocks? I think there's a lot of people that are more crypto native that that are very excited about the potential and they talk about how easy it will be to trade and and transition in and out of positions. And somebody might say, well, I can open I can open my brokerage right now and do that today. Yep.
Speaker 2:And so that's and that's maybe a a luxury of being in a great market like America. But where are you particularly excited about the intersection of traditional finance and crypto? Where do you think there might be unnecessary or hype is overblown?
Speaker 6:Well, I think that in the same way that stablecoins have become a great delivery mechanism for U. S. Dollars outside The U. S, tokenized stocks will be a great mechanism, probably the dominant mechanism for U. S.
Speaker 6:Shares being delivered to retail outside The U. S. Inside The U. S, there is benefit going from 20 fourfive, which we offer through Robinhood twenty four hour market today to 20 fourseven as well as self custody and DeFi applications. I think we haven't scratched the surface for what those can be yet.
Speaker 6:But as the regulatory environment matures, I think there's a lot of really interesting potential. And it's also the cost of operating because more and more of what's traditionally been applications and centralized third parties run by humans, more of that in crypto is being replaced by software. So you have transfer agency, payment processors, clearing houses, all of this is just now in software. And what that allows us to do is lower the cost. And eventually, if you lower the cost enough, the value gets best packed to customers.
Speaker 6:So I view it as, you know, the next stage in the technological evolution of financial services going from, you know, pen and paper filing cabinet to mainframe to cloud, and then blockchain infrastructure is the the the next stage in that.
Speaker 1:Yeah. Yeah. It feels like there's this, like, almost barbell emerging within Robinhood where you are going, like, more individual expression, the ability for a single retailer retail investor to buy a single share in a pre IPO company. That's like an incredibly high agency thing to do. And then simultaneously, you recently launched managed investing, which feels like at the opposite end of the scale.
Speaker 1:And I'm wondering if you see this more as is this like a funnel where people move from one group to the other? Are these distinct groups? And I'd love to just hear more about the managed investing product. How is the business going? And how that weaves into the rest of the landscape of the product you're building?
Speaker 6:Yeah. I think the end state is gonna look less like people graduating from self directed trading and active trading to, you know, retirement more passive products. And more that customers are gonna have multiple accounts.
Speaker 1:Sure.
Speaker 6:So you'll have your discretionary self directed account on Robinhood. You might have a joint account with your spouse. You'll have your retirement account. And some of those will be passively managed and others will be actively managed by yourself. And I think that as we've gotten deeper into understanding our customers, we see that it's less two different groups of people.
Speaker 6:Even the active traders are interested in retirement products and sometimes have an even larger bucket of their capital that is managed on their behalf. Mhmm. And so that's why, you know, we've been focusing a lot on the customer experience and the technology front on serving your broad financial needs.
Speaker 2:How has your, approach to running the company changed having been in the game for over a decade now? I can imagine in the earlier days when markets were ripping broadly, there's all this activity. I'm sure it was easy to get kind of caught up in the hype a little bit. And I'm sure now I would imagine you've you've you've kind of adapted to try to stay as level as you possibly can when when, you know, we've been joking around on the show recently counting up how, you know, you you you certainly need more than 10 fingers to count all the different top signals. So how do you how do you kind of stay even keeled even when markets are euphoric and and wild in so many ways?
Speaker 6:Yeah. I mean, it's much it's much easier to stay about your wits when things are improving. Right? Even though it can be challenging, I think when when markets are going up and everyone's looking at, you know, increased stock prices, whether it's our employees or investors, we just like to tell ourselves we shouldn't get complacent. We've got a huge opportunity in front of us.
Speaker 6:The job is not finished. And then at the same time, in 2022, when interest rates went up and our stock traded below $7 a share, it was trading basically at cash value. You have to tell people that, you know, you have to make sure people aren't discouraged, and they they they think that there's, you know, a wonderful future worth fighting for both outside the company and the environment and and also here. So you go through enough of these, and I think we've been through multiple waves of of ups and downs. And I I'd like to think I've I've developed a little bit of a wisdom about it through experience, right?
Speaker 6:I started the company writing all the code or a large portion of it myself and you sort of evolve with the company. And I think I've been fortunate to be part of ups and downs. And I think now I just I I enjoy all of it, you know, bring it on and each one is a learning experience and an opportunity to kind of like develop some more tools in the toolbox.
Speaker 2:Totally. Can you give us an update on Harmonic?
Speaker 1:I was about to ask.
Speaker 6:Yeah. So Harmonic is building mathematical superintelligence.
Speaker 1:Mhmm.
Speaker 6:And what that means is we want to build something that can solve math problems at a level exceeding the best humans. I I don't know if you guys were math people in your in your school days, but we actually recently sells.
Speaker 1:I dropped out of differential equations. Yeah. Where I
Speaker 6:topped out. Differential equations are are hard Yeah. And very useful. Yes. Yeah, we'll have machines doing them for us.
Speaker 1:So Thank you. Appreciate that.
Speaker 6:Yeah. Essentially, we developed a model called Aristotle that has gold medal level performance on the International Mathematical Olympiad Mhmm. Which is a very difficult test. Off the shelf AI models like GPT-five, Grok four, all the things that you can use don't do well on this exam at all. So this is one area where humans still do very, very well relative to the AIs.
Speaker 6:And the reason is when you have a a very difficult mathematics problem, it's not just like computing big numbers. Right? It's, you know, logical, difficult challenges that require a spark of genius and actually require you to take nine or 10 correct logical steps. And and if you're an AI model that hallucinates, if you get one of those wrong, the the result is is done. So what you have to do is build a a very strong way to verify the output of of your AI model, which means that you have to control hallucinations, and you have to make sure every line or piece of output follows logically from from what happens before it.
Speaker 6:And we think that this is gonna be a new paradigm in AI models. And it's a little bit different than what everyone else is doing because nobody's really tackling the the verification problem. And more and more of our software code is gonna be written by AI. And we're we're in a future already where the job of an advanced software engineer is no longer to write code, but it's to, like, review code that's written by AI. And as that becomes more voluminous, you know, the humans reviewing it is both a very sad existence for our top software engineers, also impractical.
Speaker 6:You're not gonna review hundreds of pages of stuff. So Harmonic has figured out how to solve this problem. And I think the applications are beyond just math, but any domain where accuracy is critical from computer Yeah.
Speaker 2:Well, I'll give you I'll give you an example. So Copilot, they've they've added the ability to add Copilot to Excel. Yep. But then they had to add like a heavy disclaimer that basically said don't rely on this. Don't rely on Copilot for anything important Yeah.
Speaker 2:Because we make mistakes. Yeah. And I that hallucinations.
Speaker 6:Double check all of your spreadsheets and all of the calculations in them. Right? And, yeah, I think I think it's a big problem, not just for spreadsheets, but, you know, think about control systems for autonomous vehicles and all of this safety critical code. In order for AI to be used to generate it, we need to solve this hallucination problem.
Speaker 1:Did your team find problem six on the IMO as difficult as everyone else? It was this combinatorics problem. It seemed like everyone struggling with it. Yeah. There any glimmers of hope for solving that, or is it intractable?
Speaker 1:Is it some sort of wall that we've run into?
Speaker 2:Yeah. And what are your ambitions for next year with the IMO? Are you guys gonna take it?
Speaker 1:The perfect score?
Speaker 6:So we we had, we had proofs for five out of the six problems. Yeah. Formal formal proofs that didn't require humans to verify.
Speaker 1:Yep.
Speaker 6:We did not solve number six even though I was really hoping, we would. But yeah, it turns out that the solution to that problem was a tiling. It was a tiling problem. But the solution was the exact tiling used at the floor of the Sunshine Coast Airport in Queensland, Australia No way. Which is where which which is where the IMO was held this year.
Speaker 6:So the human Easy. Had an advantage. They all walked through that airport.
Speaker 3:Oh, so is that right? They
Speaker 6:were given the answer.
Speaker 1:Interesting. That's a fascinating piece of lore. Thank you for sharing that.
Speaker 2:That was good year, have a humanoid fix
Speaker 1:Oh, yeah. The humanoid user
Speaker 2:the city of the location.
Speaker 1:Get the
Speaker 2:this scan.
Speaker 1:Photos, scan that into the to the context window. The the the full IMO contestant experience context window is important.
Speaker 6:Oh, next year, for sure. Pro problem six and problems like that will will definitely will definitely be solved.
Speaker 2:Yeah. Mean, Yes. The the pressures the pressure will be on for you guys because it's the main it's the main thing, you know. The other labs can be like, well, we we we do math but we're really
Speaker 1:a consumer really care about it. Yeah. No. This Well, I don't know.
Speaker 6:I mean, once you have the gold medal, I guess the the perfect score is a is a is a big accomplishment. But I think our sights are a little bit higher. I think we're we're interested in kinda two things. One is solving a unsolved problem in science and mathematics and actually contributing to the state of the art in one of these quantitative fields
Speaker 1:Yeah.
Speaker 6:Like the Riemann hypothesis Yeah. If you guys
Speaker 1:are familiar.
Speaker 6:Navier Stokes,
Speaker 1:Same thing.
Speaker 6:Right? If we could solve that Navier Stokes is different. I'm less excited about Okay. Because I'm I'm more of a theorist.
Speaker 1:Sure.
Speaker 6:But Riemann hypothesis would be good. Yep. Also, just delivering this technology to individuals and corporations in a form that they could actually use. So I think there there's lots of things coming. But
Speaker 4:For sure.
Speaker 6:Another IMO gold medal maybe maybe isn't top of the list.
Speaker 2:Last question. Have you have you did you give Terence Tao a call?
Speaker 1:Oh, yeah. On this on the show.
Speaker 2:Were like, who should give him a maxed out contract?
Speaker 3:Yeah. Just
Speaker 1:What are your thoughts?
Speaker 6:So I I don't know if you guys knew this about me, but I was a math PhD student at UCLA and No. I actually went to UCLA to study under professor Tao. I had
Speaker 1:no idea why. That's amazing.
Speaker 6:Crazy. I know I know him very, very well.
Speaker 1:Yeah. That's great. Fantastic. Yeah. I I I good outcomes there.
Speaker 2:Yeah. Was joking. You continue to You're saying
Speaker 1:It seems like he does great stuff.
Speaker 2:I had a nontraditional background starting harmonic. I got a math PhD under your parents'
Speaker 1:pal at UCLA. That is fantastic. Thank you so much for joining us.
Speaker 2:Great hanging. This is great job. The updates.
Speaker 1:We will talk to you soon.
Speaker 6:Thanks, guys.
Speaker 1:Have a great rest
Speaker 2:of your day. Bye, Mark. Cheers.
Speaker 6:See you.
Speaker 1:And we have Mark Cuban joining the stream. We invited him on after him and Jordy got a little timeline in turmoil Friendly dust up. Advertisements. We have a lot more news on the front of AI ads. We have more news on what Meta's doing with AI.
Speaker 1:We have more news on what OpenAI is likely doing in the world of advertisements. We're gonna debate that. There Streammark. How are you doing?
Speaker 5:Good, guys. How are y'all?
Speaker 2:What's happening?
Speaker 1:Thanks so much for taking the time. Good to meet you. Where should we kick it off, Jordy?
Speaker 6:Do Where should
Speaker 2:we start?
Speaker 1:Dive straight into the debate over artificial intelligence and advertising? Sure. Maybe you could set the stage for us. What set off your alarm bells? What triggered your initial, worry about this idea of ads in LLMs?
Speaker 5:Because this isn't the Internet, right? It's not just a normal digital platform. It's a platform that, depending on how it's trained, depending on what pre prompts you put in, it could be very manipulative. Mhmm. And there's not really age limitations at all.
Speaker 5:There's not really any limitations whatsoever. And normally, I'd be let's just be laissez faire. Right? The market is the market. But you've already heard, you know, of stories of kids going down these rabbit holes and, you know, other people being told, you know, to kill themselves, and Mhmm.
Speaker 5:You just you just don't know what can happen. So if I if if I build a model and it becomes popular, even if it's only a niche model, right, just like there's Headspace and there's Calm let's just say I build the Calm AI large language model, and I have millions and millions of users, and I want and I have an advertiser who sells Xanax or sells, you know, whatever. Right? And they're trying to get more sales, and I need the money. Mhmm.
Speaker 5:I can easily, easily train this thing to manipulate people into doing things we typically would not allow people to do, and that's my concern. And so if we just wanna put up, you know, just little ad traditional graphics, JPEG ads, all you know, put them into the chat list on the left hand side. Great. You can do all the display ads you want. You could do video there all you want.
Speaker 5:But if it's in the response that comes back from the model, boy, you're you're gonna have lots of problems.
Speaker 1:Yeah. I think I think Sam Altman said something to this effect saying that, artificial intelligence will be superhuman at persuasion before it is truly super intelligent. It will be very good at convincing people. So it is reasonable. What do you think of Sam Altman's latest commentary on how OpenAI might get into this world that the actual LLM interaction, the chat would not be monetizable.
Speaker 1:Not But if you if it made a recommendation to buy a product and then you said, hey, I want you to go check out for me, it sends out It's already doing that, right? Yeah. It's already doing it. Referral fee. Is that okay?
Speaker 5:Yeah, it's already doing it, you know? It's it's, you know, it's one thing to have the model itself convey and try to manipulate. Yep. It's a whole another thing when there's a search query. Yeah.
Speaker 5:Right? We get a lot of traffic from OpenAI ChatGPT for costplusdrugs.com. Yep. In fact, I've used it because sometimes if I want a price for one of our drugs and I I don't wanna take the time to look at the latest price list
Speaker 1:Yep.
Speaker 5:I'll just put in what's the price for, you know, Dareprim, whatever it may be, and it's right there. Yep. And so, yeah, of course, they can extend that, but response is a whole and models are are smart enough to know what the difference between a response to a query
Speaker 1:Mhmm.
Speaker 5:Versus influencing and engaging in a chat?
Speaker 1:I guess the question Yeah.
Speaker 2:I mean, I think I I I think to to double down on what you're saying, an example, if you're going from search, which is people coming in with a specific intent and and maybe doing some product research and you have ads and you have, you know, organic listings or or web pages. That's one thing. But if if if various AI models are seen as trusted advisers, If you compare that to a situation, if I ask John what kind of car should I get? And John starts giving me answers and saying, like, I think you should I really think you should get this car. It's really nice.
Speaker 2:And then I buy it and then later I find out John was getting a 10% kickback. I'm like, hopefully I like the car, but if I didn't, what are you doing? You know? And this happens in a business context, too. You might know, people get in hot water all the Oh, time because it's they're But it's taking really a easy.
Speaker 5:Yeah. This particular case, it's really easy. Just like, you know, there's, you know, emoji for sources or just says sources. You could put a dollar sign just to show they're being compensated.
Speaker 1:Sure. Sure. Sure. And do you think that needs to happen at, like, the FTC, FCC level, or are you do you think
Speaker 5:it needs be a of it enough. You know, hopefully it's self enforced, but you know there's gonna be idiots and assholes who don't self enforce.
Speaker 1:Sure.
Speaker 5:And particularly for medical stuff. I mean, it's easier to talk to chat GPT about your own personal medical situation than it is to find a doctor to talk to sometimes.
Speaker 1:But but does that call example you gave matter? Because, like, I I I imagine that there'll be a power law outcome here. And, yes, I could set up a search engine that serves, that serves ads and doesn't disclose that they're ads. But how am I gonna take market share from Google? People are gonna go to Google, and Google does say when it's an ad.
Speaker 1:And so, like, as long as the power law winner is a good actor, we kind of get good outcome. There's also an interesting
Speaker 2:thing where there's this self self enforcing sort of positive effect which is if if people rely on ChatGPT for example to help them do product research and buy the right products
Speaker 1:Mhmm.
Speaker 2:And you buy a bunch of bad products in a row because they're just pushing the the product that Mhmm. That they're getting paid the most. Eventually, I do think that consumers are smart enough to realize, I'm not gonna use this app anymore.
Speaker 5:I I wouldn't agree with that, Jordy. Mhmm. Because I think people are primed for misinformation these days.
Speaker 1:Mhmm.
Speaker 5:You see it in health care continuously. You know, you saw it with COVID vaccines. Mhmm. People on their deathbed saying, I wish I had taken the vaccine. Mhmm.
Speaker 5:You know? And you see it now with, you know, raw milk, where now there's more people who have you know, there's examples of people who have died, and people just don't care.
Speaker 1:Yeah, yeah.
Speaker 5:You know? They just go on, and maybe they'll say, you know, ChatGPT is woke, so I'm using WriteGPT, and that's because those are the kinds of answers I want Mhmm. Because, you know, there are people who want to be influenced and want to be part of a group when it comes to the product decisions. Just like we saw the anti Bud Light and that kind of builds, and
Speaker 1:you
Speaker 5:see pro right wing products. I just don't know that it is an efficient market enough where people are going to take responsibility for just making a bad product choice and then going to another source. There's just so much personal identity in how we use technology. That's part of my concern.
Speaker 2:How how worried would would you say you are about AI broadly? Think over the last few months, the industry has woken up to you know, a year ago, people were kinda laughing about AI safety. Right? And and thinking about these fast takeoff scenarios. Now, I think people are kinda waking up and worried about the general well-being.
Speaker 2:If you just give hundreds of millions of people, you know, unlimited access to these tools, you know, they are gonna that there there is gonna be some effects. Some people will be good. Some people will be bad. But but what's your what's your high level read?
Speaker 5:Well, it's changed a lot. We went from fear of the terminator
Speaker 2:Yeah.
Speaker 5:To fear of being influenced in ways we didn't expect because they're such good communicators. Right? We can't talk to other people, or we feel, you know, shy or not open in communicating with other people, experts or friends or otherwise. But this is our best friend who never gives us a hard time, and depending on how it's programmed, will compliment what a great question, Jordy. What a great Doctor.
Speaker 5:Glenn, is it? That is a really interesting approach.
Speaker 1:Oh, yeah.
Speaker 5:So there's a lot of things to be concerned with there, particularly because AI is not smart.
Speaker 1:Yep.
Speaker 5:Right? AI is just statistical right now, and I'm of the mindset that that's not going to change for a long time. You know, one of the reasons that you don't see full self driving cars that are just everybody using no matter what is because it's it's easy there's so many adversarial things that can happen to a car. Yeah. You know, we have Australian many Australian German Shep or a million Australian Shepherd, right, tux.
Speaker 5:And about six years old, I trust Tux at an intersection to know when to cross before you know, that he's never been to before
Speaker 1:Yeah.
Speaker 5:Before I trust a car. That's the whole point with AI because there are there are just rules and laws and latencies that they that it can't account for.
Speaker 1:Mhmm.
Speaker 5:It's all text, some graphics, some video, but it's always behind. And then that's part one. Part two, we're I think we're gonna see a groundswell in how intellectual property is dealt with, a groundswell of change Mhmm. In how IP is dealt with. Because there was for a long time, it's been publish or perish.
Speaker 5:Get your stuff out there. Get it into journals. Make it available so that you can present yourself as being an expert. Well, the minute you do that right now, it's gonna get absorbed into, you know, training data for these models, and you've lost everything you've just created.
Speaker 2:Well, what if I wanna what if I'm taking the side of big raw milk, and I wanna and I wanna get people, and so I should just write as much as I can
Speaker 5:about how create Yeah. Your people are going to use bots to try to influence, to post things, to try to influence, like, the robots. Txt for a you know, for AI. Yeah. You can you can structure it in ways where you can set up sites where you can tell it exactly where to go, you know, tell it all why raw milk is amazing.
Speaker 5:Yeah. Right? But the bigger point is AI doesn't understand death. AI doesn't understand pain. AI doesn't understand context.
Speaker 5:AI doesn't know what happened two minutes ago. It doesn't know that there was a plane crash as it's about to tell you or something happened. Right? Mhmm. AI can't tell you why that ball fell off the table unless you tell it, you know, this ball fell off the table.
Speaker 5:What happened next? Right? It's just not smart. And as long as it's not smart, it, a, can be influenced, and, b, you're just not going to know what it's going to do next because it can't it doesn't have judgment.
Speaker 1:So what would you tell the folks at OpenAI and the other Foundation Model Labs on how to structure their business? It feels like a firewall between there needs to be some sort of truth seeking organization that's focused on on delivering the highest quality results. And then on the flip side, you have a monetization team.
Speaker 5:No. I mean, you can't check for quality.
Speaker 1:That's a pretty simple. Yeah. Of course, you can. You, like, you can you you can always, like, benchmark these things or just, like, vibe test them with the with the with the Yeah.
Speaker 5:But, know, Jordy was giving me shit online. I was giving Jordy shit online.
Speaker 1:Yeah. Yeah.
Speaker 5:Yeah. Are gonna be completely different. Right?
Speaker 1:What what I'm saying is, like, is, Google Google does try and re try and deliver the highest quality search results for a particular query. And then separately, they have an ad auction, function Okay. So that ads is an ad platform. Yeah. And those two teams are separate.
Speaker 1:And so, like, if your age if your age is showing up as one of those, like, knowledge boxes on Google, you can't just pay to have them change it. Like, that's a separate business line, and it's a separate team, and they are separate products in the UI. Yes. They exist on the same page, but they're separate.
Speaker 5:And that's fine. Right? I mean, to me, the bigger questions are what's the value proposition for AI as we understand it today, or at least as I understand it today? Yep. Right?
Speaker 5:I don't see AI getting smart. I look at AI, and I think it's the world's best library. Let me explain it in another way. We all have that one friend that remembers everything.
Speaker 1:Yep.
Speaker 5:Everything. Right? Hey. What did we do that one day back in college? Remember when, you know, our one buddy oh, yeah.
Speaker 5:This is da da da da da. That's AI. Mhmm. They'll it'll remember everything. It'll give you the you know, if you give it a, b, and c, it'll figure out d, e, and f.
Speaker 5:Right? But it doesn't even know X, Y, Z exists, just like you're right. So it is just like the world's biggest library. It is just like a meeting of the minds of just regurgitation.
Speaker 1:Yep.
Speaker 5:And so knowing that, then you have to there's going to be so much competition between the models. That is the biggest driver right now in terms of revenue generation, Because there's not there'll be five, six, whatever it is, foundational models before there's consolidation, but beyond that, there's gonna be millions of models. Millions and millions of models, And every brand is going to need a model, particularly like in health care. Mhmm. Like, if you are Stanford Medical, right, if you are Mayo Clinic, if you're MD Anderson, you're not going to just, you know, put out all your IP from the doctors and researchers and scientists you're paying so that ChatGPT can absorb it and have the benefit of all that knowledge so it remembers everything that that all your doctors and scientists did.
Speaker 5:You're going to keep that to yourself. And so in terms of the business models, these guys are going to have to start making decisions. Are they start going to start paying a lot of money for content? Mhmm. Because as much as they're investing in the technology, they've reached a lot of limits.
Speaker 5:Right? You don't you're not hearing about, wow. These guys are getting to do these new topics that I had no idea that they could cover. They're paying
Speaker 1:for a ton of content, to be clear. Mean, they They're paying but they're Reddit, they pay the New York Times, they pay all all sorts of
Speaker 2:Yeah. We had we had a group reach out wanting to buy our back catalog. Yeah. And I was like, I assumed you already scraped it.
Speaker 5:But but think of it if you're I mean, let's talk about it from the government perspective.
Speaker 2:Sure.
Speaker 5:So they just cut all these NIH grants. Mhmm. Right? All this stuff that presumably went and created new drugs, which they have. Right?
Speaker 1:Foundational research. Basic science. Right.
Speaker 5:All this research.
Speaker 1:Yep.
Speaker 5:The government really understood AI, they'd be like, okay. We're gonna keep on investing in this research, and then I'm gonna make it available to the biggest bid the highest bidder No. Whoever it in their model.
Speaker 1:Privatize it. I like that. I'd make some money off it.
Speaker 5:Right. It's not even just privatizing it Yeah. But monetizing it.
Speaker 1:Monetizing it. I like this. This is good. Make some money off of that nonprofit research.
Speaker 5:Are you? Because that's that's the way things are working right now.
Speaker 1:Right?
Speaker 5:I don't I don't have honestly, I don't have a problem with that No. At all if it gets us more solutions, but, or do our own,
Speaker 2:you know,
Speaker 5:the government do its own model and making that available for a fee. Those are the decisions from a business perspective that all these models are going to have to make. Otherwise, how do they keep on adding more training data? Because there's no way to synthesize all that shit. You're not synthesizing, you're not creating synthetic data that all of a sudden is going to you know, you could tell you can give it all the backstory you want, that you're a doctor, that you invented this, that you did that.
Speaker 5:It ain't gonna invent what the doctor and the scientists are going to invent.
Speaker 2:Yeah. At any point during the AI hype cycle so far did you think that this time might be different? There was, I would say a year ago, a common line was this isn't like the internet bubble because there's real revenue. Know, these companies are ramping revenue to hundreds or billions of dollars of revenue very quickly.
Speaker 1:Mhmm.
Speaker 2:This is different. This time is different. Meanwhile, and and I wouldn't lean on this too heavily, but MIT had a report this week saying that 95% of of Gen AI pilots in the enterprise are not turning into, not creating real value. I'm curious what your read has been.
Speaker 5:I've been through every single technology, you know, event and evolution, and this blows them all away. Mhmm. Now how you implement it in business is a whole different issue. Like, literally, when I was 24, I was walking into companies who had never seen a PC before in their lives and explaining to them the value and having these guys going, well, son, I got this receptionist right there. I got that secretary.
Speaker 5:I'm never gonna need that shit ever. Right? And But then, you know, my business then was helping them figure out how to implement it to give them an advantage. Yep. There are gonna be integrators that, particularly young kids, like, when I'm telling my kids who are 15, 18, 21, or 19, 21, and kids going to school, what should I do?
Speaker 5:What should I do? I'd be like
Speaker 2:AI research. Learn
Speaker 5:all you can about AI, but learn more on how to implement them in companies. Mhmm. Right? Because to your point, companies don't understand how to implement all that right now to get a competitive advantage. You got the head of Microsoft saying software is dead because everything's gonna be customized to your unique utilization, right, or use usage.
Speaker 5:Who's gonna do it for them, particularly small to medium sized businesses? There are 33,000,000 companies in this country. 30,000,000 of them are solopreneurs. Right? Single person enterprises.
Speaker 5:There are only you know, there are millions of companies that have one, five, ten, fifty, a hundred, five hundred people that aren't gonna have AI budgets, aren't gonna have AI experts. This is where kids getting hired coming out of college are really gonna have a unique opportunity. If you're spending your senior year in college right now, your senior year in high school even, whatever it is, your excess time, and you're learning the difference between Sora and Vio, and you're learning how to do all this video, you're learning how to customize a model so that then you can then walk into a company and say, I understand your business as a shoe company selling shoes at a retail store. We're selling and selling shoes online. Let me show you how to benefit you.
Speaker 5:Yeah. That is every single job that's going to be available for kids coming out of school, because every single company needs that. There is nothing intuitive for a company to integrate AI, and that's what people don't understand when
Speaker 2:We talk about the interns hired this summer at the end of the last school year because they just built products instead of saying, hey, here's what I can do. They just showed us. They took a day and just built something.
Speaker 5:Said They didn't
Speaker 2:take a
Speaker 5:day, right? They went to chat GPT or Yeah.
Speaker 2:Well, the bear the bear case, John was joking about this though. I thought this was interesting. We we we had one of our interns built this product. It's tbpn.com/guests. It's this guest directory transcript tool.
Speaker 2:And he built it in a day, but then he had to spend the whole summer improving it. So that was a that was a bull case for software engineers still having a job.
Speaker 1:But you
Speaker 5:don't even have to be a software engineer. Right?
Speaker 1:Yeah.
Speaker 5:You just have people are afraid to ask the models the right questions. They're afraid to ask complex questions because they just presume that it can't they can't answer. Kids coming out of school today that are fearless in the questions they ask and the follow ups and their ability to prompt, they have more skill than everybody in every major corporation with under a thousand employees. Right?
Speaker 1:So I completely agree with jobs
Speaker 5:for everybody. This
Speaker 1:feels like a it feels like you're making the argument for putting ads in AI and keeping it free so that kids can have access to frontier models and then go and and explore, learn, implement things at businesses. If all of a sudden you can't get in the game, you can't even interact with a cutting edge
Speaker 2:AI model. Saying he's cool with display ads. He's cool with a LaBubu showing up in the sidebar.
Speaker 5:Yeah. On the sidebar. My chat. That's fine. But think of it you're okay.
Speaker 5:There's a death war going on with the frontier models.
Speaker 1:Yes. War. Yeah.
Speaker 5:It's zero sum game in their minds. Not all will make it. Some will get consolidated. Maybe one goes out of business. Yep.
Speaker 5:Right? And so for the next however many years, however long, there used to be a time when Excel costs $499 Mhmm. To buy a spreadsheet. It's free. Know, it's not free, but,
Speaker 1:like Basically.
Speaker 5:Google yeah. Google Sheets. Right? Yeah. Google Docs, etcetera.
Speaker 5:The basic models are always going to be free.
Speaker 1:Because of ads. Like, the reason Google Sheets is free is because of Google's ads business.
Speaker 5:When was the last time you were selling Google Sheets?
Speaker 1:No. You don't. But but the reason that they can subsidize is because they have this amazing ads business over here that throws off so much cash they don't care about monetizing it.
Speaker 2:Yeah. But in the case, I mean, to to to take Mark's side here, I mean, a subscription product also subsidizes a free product.
Speaker 5:Sure. Yes. That that's exactly right. Okay. So you're gonna have tiers.
Speaker 5:Right? Yeah. Free, your call it your your kid's version, free. And those those those versions are gonna have more constraints because they know high school kids, you know, seven year old kids are going to use them. Yeah.
Speaker 5:So there'll be all kinds of limits built in. Yeah. But then you get your $20 version. And Chad, GPT is doing, what, $12,000,000,000 annualized and growing quickly?
Speaker 1:Yep.
Speaker 5:That's insane. Love you know, lovable. All these guys are just crushing it. And, like, I I was the first investor in a company called Synthesia, which does, you know, talking avatars. I don't know if you know
Speaker 1:these guys.
Speaker 5:Cool. Yeah. They're killing it.
Speaker 1:That's great.
Speaker 5:Killing it is just up and to the right. Yep. You start them off with it's just a whole freemium model. Sure. Right?
Speaker 5:That's been around forever, and I think that's gonna happen. But as you know, we talked earlier about buying IP. You'll see things go into different directions. Mhmm. So you'll have a chat GPT slash health care, and if you want that, it's an extra $5 a month.
Speaker 5:You'll see ChatGPT programming or math or foreign lang duolingo version. Right? And it might be an extra 50¢ a month or a dollar a month, whatever it may be. And then there'll be, you know, entrepreneur version, and it'll have all the integrations into all the the states so that you just, you know, fill in these forms, and you're incorporated wherever you want to be incorporated because all the agents will do all the work. All that stuff, you can upsell.
Speaker 1:Yeah.
Speaker 5:And so but if they're not using your model in high school, they ain't gonna use it in college. And if they ain't using it in college, when they go for that to that company, they're not gonna use you.
Speaker 1:Yep.
Speaker 5:And I think that is a big deal. But I can't say it enough. All these people, we're in a transition period right now for kids coming out of college, whether you have a computer science degree or not, but you're not trying to go to the big companies to get a computer science degree. It's probably not the right way to go. Going to any other company who has no idea about AI but needs it in order to compete, there'll be more jobs than than people for a long, long time.
Speaker 5:Because there's only gonna there's gonna be two types of companies in this country, in the world. Those who are great at AI and everybody else.
Speaker 2:Mhmm.
Speaker 5:And this is not AI is not intuitive. You're not gonna take a 40 year old who's worked at a company for fifteen years and say, go play with ChatGPT and figure out how we can improve our our productivity and improve our processes. Some people will put in the time to learn it, but it's not intuitive to pull all those pieces together and extend them with agents and have the agents start doing things. And then, you know, writing software on Lovable or whatever and having all it's gonna be intuitive for for digital natives and Gen Z who are going through school and graduating with that. That is gonna be jobs left and right.
Speaker 5:For sure.
Speaker 2:Totally agree. Wanted to get your we were just on with Vlad from Robinhood and Yep.
Speaker 5:That's my
Speaker 2:guy. He's super excited about getting everyday investors access to great private markets. Great companies in the private markets. Wanted to get your general read on that. You've obviously been part of Shark Tank for a long time.
Speaker 1:Can you imagine if you were watching and you could be like, I want to invest? That seems extremely long.
Speaker 2:Yeah. And a lot of people have taken crack.
Speaker 1:I'm sure people pitched you this exact thing.
Speaker 2:Yeah. I'm curious because because you obviously
Speaker 1:Yeah.
Speaker 2:You I can I can see you being yeah? It's great when company when if retail can get into the next Figma, but there's, you know, not not making a
Speaker 5:lot of Figma's. Right? I've I've been anti it's not sweat equity. Crowdfunding. Right?
Speaker 5:Crowd equity programs against it because there's no liquidity. Mhmm. People love a company, the next Figma, and they put in their life savings because they know Figma's going to the moon, baby, and they can't they can't get out.
Speaker 1:Yeah.
Speaker 5:And they gotta wait. That's the problem. Yep. And so that's part one to the problem. Part two and more of a system systemic problem, there's just not enough IPOs.
Speaker 5:I mean, it's like watching some of these IPOs. They're like meme coins now.
Speaker 1:Mhmm.
Speaker 5:Bam, they take off, and then it's musical chairs to see who can get out the last but first, right?
Speaker 1:Yep.
Speaker 5:And if you don't get out first or near the beginning, you're getting crushed, And you so is there a way, whether it's tokenization or other approaches to that? Probably. But it's gonna have to go back to the future where somebody is going to have to take some risk and be a market maker.
Speaker 2:Yeah.
Speaker 5:If Vlad or whoever is a market maker
Speaker 1:Yep.
Speaker 5:So that there's always some liquidity within x percentage of the last trade
Speaker 2:Mhmm.
Speaker 5:Great. Yep. Then everybody can do it, and everybody's protected to a certain extent as long as they're not doing deals where the people are just out and out lying, right, or misrepresenting it, at which point, hopefully, the CFTC or the, SCC, whoever happens to end up in charge.
Speaker 1:Not enough just to bring access. You also have to bring liquidity. Last question. If Donald Trump runs for a third term, will you run for president?
Speaker 5:I mean, it's easy to say yes right now, but it's that's the all probably the only thing that could make me really reconsider. Because otherwise, I'm not I don't wanna do that shit. It's not my it's not my dream to be president. I'd rather argue with you guys about Yeah.
Speaker 1:Yeah. It's my dream come back on the show. You'll be too busy if you're in the West.
Speaker 2:Last last question for me. Are you excited about the the American taxpayer potentially taking a position in Intel? Oh, interesting.
Speaker 5:You know what? It's a great question, Jordy.
Speaker 2:So You're sounding you're sounding like an AI. You're sounding like an AI.
Speaker 1:You sound about right AI. You You know what? That's a great question.
Speaker 5:What you don't know is I have ChatGPT listening.
Speaker 1:Yeah. Yeah. Yeah. He's running clearly. He's running clearly.
Speaker 1:It
Speaker 5:is a progressive's dream. This is the Bernie Sanders dream, the AOC dream. Be and I'm not saying I agree with it, but if you think about it It's asking for equity and taking value from the billionaires before it even makes them billionaires or goes to the billionaires. So when you take 10% of Intel and first, let me add, the fact that it's a grant that they're converting, I think, is awful because it was meant to be a grant, and that was the deal The United States Of America made, and now we're going back on the paper that we signed as a country, I think that's bad. But generally, if this was, Okay, we'll put in more money in order to take and we want 10% of Intel, obviously, they can say yes or no, just like NVIDIA and AMD had the option to say yes or no on the H20 chips,
Speaker 4:just
Speaker 5:like Material, whatever, MP had Yeah. The
Speaker 2:Politicians have gotten so good at trading stock. We want them running our federal balance sheet.
Speaker 5:No. You don't.
Speaker 2:No. I'm kidding. I'm kidding.
Speaker 5:Yeah. But if you're gonna generate if I if I was running, right Yeah. Yeah. And I would say Donald Trump did the same thing. He got this one right.
Speaker 5:Now the only question is, will he do it at the right time? Mhmm. Because would you I'd rather take more money from taxpayers, the average person who might need to pay more, or even the the billionaires, the oligarchs, according to Bernie, would I jack up their tax rates to 30 from 39 37 to 39 or 41, Or can I just take it this way? Right? Take it before it even gets to them.
Speaker 5:This is a progressive's dream. I don't understand why AOC and Bernie aren't shouting to the rooftops and Elizabeth Warren, yes, yes, yes, and make, you know, make Donald Trump's head spin around in circles along with every other supporter because those guys were
Speaker 2:If they got excited about it, he might reverse course. Yeah. Yeah.
Speaker 1:Well, of course. That's why they're being quiet because they don't want him to reverse course. This is 40 you're 40 times. On both sides of the aisle. Everyone's playing chess.
Speaker 1:I mean,
Speaker 5:but don't you guys agree? Isn't it just like a progressive Totally. And and, you know, so tariffs, which is just like the greatest sales pitch in the history of sales pitches, when you can convince 30 plus percent of people in this country that that tax that they're paying with increased prices isn't a tax somebody else is paying it. Amazing sales job. Right?
Speaker 5:So now that's $360,000,000,000 towards the deficit and everything. And if you can start doing these other deals that aren't piggish, right, meaning they're they're fair to the companies that are involved, and they're not across the board like tariffs and start banging down on the deficit in the way that is the ultimate progressive approach, he's turned into Bernie Sanders.
Speaker 1:Yep.
Speaker 5:He literally has, you know, only he's a better salesperson.
Speaker 1:You're great at this. This is Yeah.
Speaker 5:I'd be I I give him credit, though. I'm not knocking him. Right? I am giving Donald Trump all his flowers because he is he is doing things in a way that the Democrats aren't smart enough to figure out to have done themselves.
Speaker 1:Yep. This is great. Well, thank you so much We'll for have to
Speaker 2:do this again soon.
Speaker 1:Yeah. We gotta do this again soon. We gotta find a new, new topic to argue about, but this is fantastic.
Speaker 5:Health care. Let's go health care. I can't wait till you hear my shit with health care.
Speaker 1:Okay. Yeah. Let's do it. Let let's
Speaker 4:do it
Speaker 1:tomorrow. Health care debates in. We'll we'll email you. I'll I'll see you soon. Have good Thank you so much for joining.
Speaker 1:Appreciate it. Talk to soon. Up next, we've been keeping and waiting. We got Kayser Yunis from Applied. Welcome to the studio.
Speaker 1:Do we have him? I wanna ring the gong preemptively. I don't even know if we have news, but I'm just excited for those.
Speaker 2:Oh, there he is.
Speaker 1:We haven't talked to you since DC. We talked to you at Hill and Valley. How you been? What's new in your world?
Speaker 2:Sorry to keep you waiting. We had to my world.
Speaker 4:We're arguing. Valley seems Hillen Valley seems like a lifetime ago.
Speaker 1:It really was. There's been, like, four other iconic DC tech crossover events. I have yet to make the to many of them, but it was a fun time. And we appreciate
Speaker 4:And Hillen Valley is the only one that's that's worth that's worth it. So so I think that's fine.
Speaker 1:I mean, used to be a dinner. Now it's an organization that throws, like, some of the biggest and most impactful events. It's a fantastic crew over there. Shout out to them. But, anyway, this isn't about Helen Valley.
Speaker 2:This is about This is about you.
Speaker 1:Welcome to the stream. How are doing?
Speaker 4:I'm doing great. I'm doing great. I you know, following up Mark Cuban, I couldn't really watch the the thing. I I I don't know if this is gonna be a this is the this is the, you know, the slow letdown to the end of
Speaker 1:the day. No. We got We're we're we're yeah. We're working on being able to feedback the show to you so you can watch it while you're in the waiting room, but we're we're sorry to keep you waiting. But give us the update.
Speaker 1:And and, I mean, maybe for those who are are new and maybe hopped on during the the Mark Cuban segment, if you could introduce yourself and the company briefly and then go into the news, that'd be great.
Speaker 4:Yeah. For everybody, who who's who's not in the Bay Area ecosystem, my name is pastor Eunice. My, and the company is called Applied Intuition. Yeah. We are a now he's a late stage company.
Speaker 4:We, earlier this year, raised a series f, if I got my numbers correct, led by BlackRock and KP at 15,000,000,000. Wow. The company is broadly there's a couple of unique things about the company. One is we've been historically profitable, which is super rare. We've preserved a 100%.
Speaker 4:Yeah. Yeah. That word that word probably doesn't get thrown around a lot with AI companies. No.
Speaker 1:No. No. We talk to a lot of folks with high revenues. Gross margin's not there yet. Hoping on some Yeah.
Speaker 2:Very very low. Very low gross margin.
Speaker 4:Price fact that you want. I and, you know, you can never be bragging about any of this stuff because, you know, it creates great fodder for when you fall. Oh,
Speaker 1:yeah. Yeah.
Speaker 4:Yeah. But, like, you know Every every
Speaker 1:bull cycle, I think, like, maybe I should start playing around with hubris. Maybe this time is different. I think hubris, it might be fun to experiment with,
Speaker 2:but Never.
Speaker 1:It it just never it never works. It never works.
Speaker 4:The the the but the three things that you want in a in a late stage company is, you know, things like profitability, but you also want high gross margins and you want high growth.
Speaker 1:Yep.
Speaker 4:And we we've been fortunate. We've had triple digit growth for basically the history of the company and then and high gross margins. But that's the finance side for all the people who are, like, engineers or or technical people watching. We're a AI company that focuses specifically on vehicles, so the broad category we talk about is vehicle intelligence.
Speaker 1:Yep.
Speaker 4:It would be a subpart of physical AI. Sometimes, you know, you might hear Jensen or somebody talk about that. This is, I think, the most pragmatic and real part of physical AI right now. Humanoids, I think, will come for sure. But, but in terms of, like, monetization, it's cars, trucks, tanks.
Speaker 4:That's the business that we're in, and we bring AI to those systems. So, it's it's in a bunch of different we have dozens of products and all this stuff. You know, I won't get into it.
Speaker 1:But Yeah. Take it through the the the market structure because you have, Waymo, no consumer product whatsoever. You have Tesla vertically integrated. I they've I mean, they had a Mobileye deal a while ago. I don't even know if they have Mobileye anymore.
Speaker 1:Pretty much vertically integrated. I I drive a Cadillac. It's it's it's a product of Kyle Voat over at Cruise. They bought Cruise. They were thinking about getting into self driving taxi market.
Speaker 1:They kinda pulled back from that, but they have Super Cruise. Pretty great system. Oh. And then you got George Hotts with Kama, the the bolt on. But what what what is the shape?
Speaker 1:All the OEMs, they need to play here. How how is this gonna play out in kind of the the the the the vehicles that most people see? We can go into the defense side later, but just in terms of, like, what the average American sees.
Speaker 2:Summary, they're coming for it. They're coming for it all.
Speaker 4:Yeah. I mean, you you just said it like like, GM's been a long customer of ours. Okay. That that that you're using is built on our tools.
Speaker 1:No. Thank you. You are safe.
Speaker 4:Our our business our business is one where we are a supplier to the broad ecosystem.
Speaker 1:Sure.
Speaker 4:So of the of the top 20 global automotive OEMs, we say 18 out of the 20 use our tools, but in effect, really, honestly, everybody does. And so that's our play. We we're we're we're like the you know, I don't wanna use the the like, it's a very it's a very, like, risky analogy, but we're the arms dealer in this ecosystem.
Speaker 1:Okay. Yeah. Give me a little bit more context and shape of, like, what what what the product you're actually vending in is because there are physical cameras that need to go on cars if you're gonna do an a self a driving system. There's also some sort of foundation model, I imagine, that gets trained on a lot of data. There's data aggregation.
Speaker 1:There's all sorts of, you know, some part is gonna be in c plus plus The other is gonna be in ML. Like, are you doing an end to end system? Like like, what's the shape of the product, and how much is, like, solutions versus, just, like, the the the packaged up software?
Speaker 4:Yeah. So, historically, like, kinda what we announced yesterday and why why we're talking is, historically, we've been a tools manufacturer. We've been as an give engineer we make tools that engineers use to build these systems.
Speaker 1:Sure.
Speaker 4:Like, other companies, know, you're you're talking about. Then we got an operating system. We still that's a huge part of business. But Mhmm. A while ago, we got into autonomy, but we got into autonomy directly, like, literally making autonomous systems.
Speaker 4:That's in in our words, that's the algorithms, the models Yeah. That run vehicles. We've been in it for defense. We've been in it for commercial trucking. We do l four trucking.
Speaker 4:You know, we're we're running driverless trucks right now in in Japan as an example. So we're already doing that. What we announced yesterday is an l two plus system for automotive.
Speaker 1:Okay.
Speaker 4:So it's specifically it's kinda like, you know, the the average person would know Tesla FSD. Yep. It's like that, except it's one that you can buy from us.
Speaker 1:Yep.
Speaker 4:And so where we fit in the ecosystem is we're we're we're like so I come from the car business. So I went undergrad to the General Motors Institute. I used to work at Cadillac in the Cadillac Building as an example.
Speaker 2:You're John's hero. You're you're John's hero.
Speaker 1:I love it.
Speaker 4:I love it. Yeah. The car the car business is an awesome business, by the way. If you ever want to just nerd out in the car business, we we can. It's going through lots of changes.
Speaker 4:But one other thing to understand, industry structure of the car business is, historically, the car business one is it kinda like defense where you would procure all this technology as an OEM from other parties. Mhmm. What's changed now is that OEMs are like Tesla has shown, you can actually verticalize, do a lot of this stuff yourself. And you kind of need to do it because these systems are way more integrated with each other. Mhmm.
Speaker 4:It used to be you could bolt on a Mobileye system
Speaker 1:Yeah.
Speaker 4:Yeah. And then that would give you lane keep and adaptive cruise. But when these systems are much much more sophisticated and they're they're working with the other functions within a vehicle, you need, like, a white box solution. And so our our SDS product is a white box solution. And what I mean by that is, you know, access a source code agnostic to the silicon.
Speaker 4:Sure. So if you're you're buying, you know, like like an NVIDIA system or if you're buying a Qualcomm system, you're gonna use NVIDIA and Qualcomm chips. Mhmm. So we, being just a software supplier, we can ride on different silicon. And then on the other end, where you're talking about sensors, each company has a different sensor strategy, but the broad summary of passing the car business is it's a cost business.
Speaker 4:And so all of the all the OEMs basically wanna have the cheapest sensor suite they possibly can. But, like, even more fundamental question, why can't we get all the Waymo's tech into the passenger vehicle? It's because all the way to the compute that's being used, it's just very expensive. And so other, like, feature, quote, unquote, of our, self driving system is it's embedded, which is another way of saying it runs on automotive grade silicon, which is cheaper and has all these other things that you need for automotive grade pro products.
Speaker 1:How are the OEMs reacting to the the latest version of Apple CarPlay? I saw it roll out in an Aston Martin SUV. From a consumer perspective, it seems awesome. The new CarPlay takes over all the dash, so even the volume control will be handled by CarPlay. But it feels like if you're an OEM, you're kind of giving away.
Speaker 1:You're letting the Fox in the house potentially. But Yeah. Yeah. Exactly. What what's the reaction been, and then what what does that mean for your business, basically?
Speaker 4:Yeah. I think, so so let's look at a gear shift. You're that's the you know, we've got from autonomy to now just, let's say, the in cabin software experience. For us, we call that business line vehicle OS. It's it's something that that that we build and and sell.
Speaker 4:Yeah. The the punch line there is the issue with CarPlay is if you're a Mercedes and you're in in your experience is the same as a Chevy Bolt, which is the same as, let's say, a Ask Martin. You know, o OEMs are really good at two things. That they're really the heart of their business is two things that have to get bright. And if they get it wrong, they ultimately end up going bankrupt.
Speaker 4:The first one is just managing the cost side of the business, supply chain, getting all the suppliers wrangled. So they put all the parts in a factory to because the factory is this big fixed cost, and it pops out at a certain rate. The economy actually moves up and down at pretty significant, you know, consumer carb sales and consumer index are very, connected. So all the global OEMs are extremely good at forecasting what they need to build, where, and when years in advance. The other thing that they have to do very well is brand management.
Speaker 4:And and what it like, more fundamental question, what's a brand? Yeah. Like, fundamentally, what what's a Mercedes brand? It's the collection of experiences you've had. Yep.
Speaker 4:That's what a brand is. And so if the collection of experience you've had is with Apple CarPlay Yep. That does actually degrade your brand. And so the OEMs are extremely sensitive. I mean, I think maybe a controversial thing to say.
Speaker 4:I think we've seen car peak CarPlay and peak Android Auto has already happened. I mean, multiple OEMs have gone out and said that they're not gonna do CarPlay in the future. They're not gonna do Android Auto in the future. And by the way, Tesla doesn't do CarPlay and Android Auto. The emergent emergence, you know, the Lucids, the Rivians, they're all they're all similarly.
Speaker 4:They they build their own user experience. So I think that's a tough business to be in. Now if you're Google or if you're Apple, your your consumer brand has to be in that interface. If you're Applied Intuition, it doesn't. We're a we're a b to b software supplier.
Speaker 4:Yeah. So we can make the same thing that CarPlay and Android Auto do, except we can do it in a, again, white box.
Speaker 1:And I view the self driving system much more like seat belts or airbags, where all I care if I'm driving a Mercedes or a Cadillac is that I survive and I'm and I'm safe. And and I and I I
Speaker 4:don't care where I go.
Speaker 1:Talk a little bit about the driving style of a self driving system in a Bentley. It might be a little bit different than in a Chevy. But in general, I feel like it's something where I'm very I would I would make the selection based on the benchmarks. Like, what are the incidents per vehicle miles traveled? Anyway,
Speaker 2:I'm What is how do you see the autonomous driving landscape evolving over the next few years, a lot of people talk about this like two horse race Mhmm. Waymo and Tesla. Yeah. But using the arms dealer analogy, it's like Tesla and Waymo are nuclear war and you come and you're like, hey, I'll I'll give everybody nuclear weapons. Is that is that
Speaker 4:Listen. Listen. This this is not the time to make jokes about my Pakistani heritage. Yeah.
Speaker 2:We'll we'll skip that. But but is that is that is that really your play here is basically leveling the playing field?
Speaker 4:Yeah. Absolutely. And and I I would take issue with the two two horse race. I mean, you got to remember
Speaker 2:Well, it's so I'm talking about that in the context of oh, you're you're gonna be able to just, like, you know, why would I buy a test, something other than a Tesla if I could rent out my Tesla when I'm not using it? Yeah. Yeah. There's this section of the market that's excited about that. Yeah.
Speaker 2:But I can imagine Yeah.
Speaker 1:I
Speaker 4:think that that future is to be determined. Right? And so let let me let me answer the fur there's many and the this is such a vast area. We I'm sure we could spend hours on it. Let me tackle each of those individual points first.
Speaker 4:For the first one is, is it a two horse race? Absolutely not. I mean, you talk about Super Cruise just earlier. Every manufacturer globally is absolutely building some version of an l two plus system or working with a partner like us. There's without exception, the smallest manufacturers that you know are doing that.
Speaker 4:The good petri dish of you seeing how this will unravel is China. China is this kind of, like, walled off ecosystem separate in the automotive industry, and you there is no dynamic that says a winner take all will be effective. And I'll I'll do the ten second pitch on why I think an SDS from us would be better. We're taking data from all geographies, from many manufacturers, and not only that, from any vehicle types, like off road, defense, etcetera. And our models, therefore, are just will be and already proving to be more performance.
Speaker 4:So, there, you could have an an you know, you could have a pretty plausible technical view that actually the two legs are are maybe the early entrance. But when everything being autonomous, it's just gonna be a and there's just no there's just no winner take all dynamics there. There there's no winner take all the dynamics there. And then the and then in terms of, like, the the the broader what happens with autonomy next five to ten years, like, this is the this is the autonomy moment. It's happening now.
Speaker 4:And we're you know, when you're in the Bay Area, you kinda live just maybe it used to you know, Paul Graham used to say six months into the future. Maybe we live three months into the future, maybe. But you do live a little in the future, and you hang around in any street corner on San Francisco, you'll see Waymo's, after Waymo after Waymo, and then you'll start using them. You see them eating at Uber's, you know, market share in terms of, right? So, like, that's absolutely gonna happen.
Speaker 4:Pass it in what that's doing is is getting the public used to this concept of self driving. We, the tech industry, are very comfortable with it. A lot of us are Tesla owners. A lot of us use FSD, so we're comfortable with it. You go to Michigan.
Speaker 4:I'm from Detroit. You go to Detroit. People don't know any of this stuff. And then the forget and Detroit's a car town. You go to Tulsa.
Speaker 4:You go to, you know, Dallas. It's just not what people are talking about. So I think that in the next five to ten years is the general availability of autonomy. And so if you wanna use a good analogy, mobile, we're in, like, 02/2008, 02/2009. If you're in the Bay Area, you saw that the iPhone is coming.
Speaker 4:People talk about people talk about Waymos, but most people are like, so when does mobile really hit? Well, mobile kinda hits in, like you could say it hits when WhatsApp or maybe Uber or maybe Instagram. Like, Instagram, you can't even think of before mobile.
Speaker 1:Yeah.
Speaker 4:And it requires an app store and it requires a front facing camera. Yep. So, like, when will that self driving moment happen? It's happening now, but I think I think the next two to five years I'm not just saying I'm not just pitching my book,
Speaker 1:by the way.
Speaker 4:I'd like to believe this. Like, I think the next two to five years without driving, it's it's gonna be massive. It's like the a it's like the area of AI that everyone I think it's just because it's not you know, the the hype happened ten years ago.
Speaker 1:Yep.
Speaker 4:So everyone wants to talk about LLMs, and they wanna talk about humanoids.
Speaker 1:Yeah.
Speaker 4:But it's like, this is the thing where it's you know, when we started the company, the reason we're called Applied Intuition, by the way, is we wanna be on the applied side of this technology. You can spend many years on the research side Mhmm.
Speaker 2:And it's Subtle dig in the name.
Speaker 4:Yeah. And and, like, the the, like, SDS, the reason people ask us, like, especially engineers who, you know, are working, or interviewing with us, they're like, well, why don't you get into, like, this space, like, four years ago? Number one, transformer boom, you know, and the change hadn't like, the technologies just wasn't very good. But, also, now if you get into it too late, then the like, timing is a really, really important thing. And I think, like, we always wanted to see, hey.
Speaker 4:When are we exiting the research phase of self driving? Mhmm. And when are we entering and the applied phase just to be very direct for folks who are not is is when it becomes an engineering problem. And now the engineering problem is just about cost, cost, cost, cost, cost. Like, you guys are not asking me, is self driving real?
Speaker 4:Like, that conversation in 2015, that's maybe the first question. It's like, is this like a real thing?
Speaker 1:I know it's real. I wanna know when will self driving be available in a Konexec. When will it be in the next It's Wyra. When will it be in the next McLaren? Because this is
Speaker 2:R E F A.
Speaker 1:San Francisco lives in the future. Everyone there is already driving p ones
Speaker 5:What a
Speaker 1:Mustang GTBs.
Speaker 4:I gotta
Speaker 1:get these into the general You're talking about
Speaker 4:for the people who don't know what Koenig Zigs are, which, like, by the way, they make, like, six a year. Like, these these cars aren't even crash tested. They're so they're so infrequent. Ferrari, more of a mass mass car.
Speaker 1:Well
Speaker 4:It I think it'd be a while.
Speaker 1:But I'm challenging you. Sell your product to Koenig Zag. Get it into Koenig Zag. I'm throwing down the gauntlet.
Speaker 4:We we we have, you know, we have large and public relationship with Porsche. They're big shareholders of ours as well. Yep. And when they're never you know, we we deal, like I said, with all the OEMs. I never wanna expose any particular strategy.
Speaker 4:But if you if you think about it, if you're from a buyer perspective, if you're looking at a Tesla Model s, what's the other thing you look at? You look at Taycan.
Speaker 1:Sure.
Speaker 4:And a lot of time so, like, I think even the more exotic companies that are focused on driving dynamics
Speaker 1:Yeah.
Speaker 4:You just have to think about this technology of good UX in the cabin and safety systems that prevent, you know, you from getting injured, I think will be, like, table stakes. By the way, AEB, like, rep another, like, a subtle revolution that's happened in the car business that people don't talk about is the automatic emergency braking
Speaker 1:stuff now becoming It's crazy. Like,
Speaker 4:it's it's it's, like, statistically making an improvement in, like, passing, pedestrian deaths.
Speaker 1:Oh, yeah.
Speaker 4:That's wild. Things that they're opting to talk about. So I think even the highest end stuff right now, everyone talks about EPA and emissions. So I think in 2035 and going forward, it'll all be just like, hey. Why are we still having deaths?
Speaker 4:Yeah. And and then and then that's the Koenigsegg question will come up is like, hey, it should be aware enough. It doesn't have to drive, but it should be aware enough to take over from the driver when something really bad is about to happen.
Speaker 2:Well, thank you your support. Question. Just curious. We're we're way
Speaker 1:over there. We're keeping a Series E company waiting just to talk
Speaker 2:to I this guy who's serious was gonna say, when how do you think about, you know, financing the business in the future? It feels like I'm sure I'm sure many many SPAC SPAC sponsors would be begging, but you I imagine, will take the more traditional path. How how do you think about,
Speaker 4:you Yeah. We've we've we've preserved a 100% of the capital we've ever raised, and the company's
Speaker 1:almost taken.
Speaker 4:So, so I I What? Is
Speaker 5:Hit that gong, John. Hit that gong.
Speaker 4:Yeah. Yeah. For the for the for the finance folks at home, they know what that actually means. That that that is that is no easy feat.
Speaker 1:Yes. That's because
Speaker 4:of the race. Is not I can there's many things that I'm speculative about. SPAC is definitely what I can tell you affirmatively we wouldn't do. Yeah. I'd you know, we fall into the very I mean, there it's not random that Fidelity and Blackstone and Yeah.
Speaker 4:You know, Franklin Templeton are investors in the company. I think in that way, we're very traditional. In the way we're not traditional is we're a very hard tech company. I mean, the stuff we build, there's virtually no other companies that that do it. So, yeah, the future I think the future is good.
Speaker 4:You know, how are we gonna spend the money? I mean or how do we think about capital allocation? I'm all of our values, the company's values can be reduced to radical pragmatism. Mhmm. If we had to if we had to raise a billion dollars to get into some specific technical area or fight that we think is worth fighting for, we'd do it.
Speaker 4:Yeah. Like, it's just, like, a pretty pretty straightforward.
Speaker 1:Yeah. Yeah. It's fantastic. Well, congratulations.
Speaker 2:Always great to talk.
Speaker 4:You guys so much fun. That was that was
Speaker 1:I know. I know. Well, you will just hop on next week. We'll we'll talk yeah. We we we could talk for hours.
Speaker 1:This is awesome. Thank you so much. Have a great rest of your day.
Speaker 2:Good to
Speaker 3:see you.
Speaker 1:We'll talk to you soon. We have been keeping Elise AI waiting, but we will let them in from the Restream waiting room. Some big announcements today. Good thing we warmed up the gong because we got a big deal coming into the TVP and UltraDome
Speaker 2:Big news.
Speaker 1:From the Restream waiting room. Hello. How are you doing?
Speaker 2:So sorry to keep you waiting.
Speaker 1:Sorry to keep you waiting.
Speaker 2:On your big day?
Speaker 7:Learning I stuff.
Speaker 1:The previous guest was talking about cars and we went down a whole rabbit hole. It happens. But thank you so for taking the time. Would you mind kicking us off with an introduction on yourself and the company?
Speaker 7:Yeah. Absolutely. I'm Minna Song and I'm one of the co founders and the CEO of a company called Elise AI. And Elise AI is a company based in New York City. We build AI agents that automate the entire customer journey for two verticals, the housing industry and the healthcare industry.
Speaker 7:And we've we just raised our series e today, so
Speaker 5:Give us
Speaker 7:the news. Yeah. How much? Yeah. We raised $2.50 $250,000,000.
Speaker 2:There we go.
Speaker 1:Congratulations. Can
Speaker 2:you give us can you give us a quick history of the company? We heard from a friend what gave us a a general read on your revenue ramp, and it was pretty mind blowing. So I I would love to kinda kinda get the the quick history of the company since this is the first time. Overnight success. Yeah.
Speaker 7:Yes. Just started yesterday. Vibe coded too. No, we started 2017, started with my co founder Tony, who's the CTO. We met in college, studied computer science, both software engineering backgrounds.
Speaker 7:I went to MIT, he went to University of Cambridge. But shortly after college, we wanted to build a company, build technology for industries that serve fundamental human needs. That gave us this idea that we wanted to go into housing, and housing is our largest expense as humans. And we thought it seemed like it had limited technology as an industry. We didn't really know too much about it, but felt like a good place for two technologists to start investigating.
Speaker 7:So when we got started, I took a job working at a real estate firm in Manhattan, and that was just sort of a research opportunity. Worked at the front desk, I answered all the phone calls, I greeted everyone, answered all the emails, and was just really listening for what is the biggest bottleneck that exists that we can start chipping away at. And it was very clear that was communication. So we were actually a conversational AI startup right from the very beginning versus I think a lot of the companies that you know, are adding on AI right now. It's been pretty obvious if you've been doing it for a long time that there's a lot of value.
Speaker 7:A couple years ago
Speaker 2:How long did you last at that job, by the way? Your research, your paid research opportunity?
Speaker 7:It was like it was like a good three months. Good. So it was it was quite fun. I enjoyed it a lot.
Speaker 2:That is a wild start.
Speaker 1:How how important is it to the company to be seen as like an AI agent pure play? I like, it it feels like a lot of companies that are do that are really, really successful or really adding a lot of value are actually not just picking the hottest tools off the shelf, but they also have a lot of traditional software and, like, SaaS. Some are bolting on AI tooling, but others are kind of offering elements of both, whether it's traditional dashboarding or just traditional, you know, business logic and workflows. Like, has the business grown? What's the shape of it?
Speaker 1:What's demand like? Is it are customers receptive to something that is purely nondeterministic?
Speaker 7:Yeah. I mean, a big part of what we work on is to make sure that it's providing enterprise grade reliability to our customers in housing and healthcare to highly regulated industries to just really consequential decisions for if we make mistakes, it's a big deal for our customers, right? And for their customers, the consumers. So we focus a lot on making sure it is stable and it is reliable them. But yeah, it's a mix of I mean, you have to AI is a really powerful tool.
Speaker 7:It's a new type of computer, really, and you can solve problems with that, but also traditional software and other things that you need are also important in solving a problem. I think what's sort of different about what we build, we're a vertical AI company, right? We're not a horizontal AI. Horizontal being, you you can solve one sliver of a problem for a bunch of different industries, but our approach is we sort of go 10 layers deep into every problem. And that way we can actually solve that problem end to end.
Speaker 7:So it's very different. So let's say in housing, you are saying that you have a broken sink, right? It's very different when an AI, a large language model might be able to say, hey, thanks for letting me know. I'll submit a ticket for you. And maybe it does that.
Speaker 7:For us, our AI is actually doing a bunch of things. It's understanding how that issue should be resolved. It's coordinating all the workforce and all the resources, the systems, the compliance to get that ultimate issue resolved. There's things that we do that are not just pure conversational AI pieces, but we work in the physical world. So we have to actually unlock these things called doors and allow people to go and get into the building.
Speaker 7:So we have to do things like hardware integrations. You you can't avoid doing that if you actually wanna solve the whole problem.
Speaker 1:Yeah. On the integration side, what's working on the marketing side? Is are there channel partners or platforms that you can plug into to accelerate growth? Is it just a ton of SDRs? Is there a viral component to this?
Speaker 1:Like, what's accelerating the growth other than just the product delivering value?
Speaker 7:Yeah. Yeah. We work in particularly nontechnical industries, so it's not really there's not a great market for people that are just naturally searching for the There's latest not like an app
Speaker 1:store that you can go viral on and then all of a sudden you're the number one enterprise app in property management.
Speaker 7:Yes. I wish. Is blood, sweat and tears. We have outbound sales. Sure.
Speaker 7:We do have a lot of partners. AI is actually a great vehicle for delivering a lot of the other products that exist in the industry. Historically, you needed, let's say you were a marketing software for housing providers or you have insurance or something like that, you needed to train a human agent, a leasing agent or a property manager to make sure that marketing content got distributed. And that's another manual step that people had to have. I think a lot of people in the industry have realized, hey, I can just partner with Elise AI and now my marketing materials or insurance will communicated to everybody else.
Speaker 1:Makes sense. Jordy?
Speaker 2:Nothing for me. This is Okay. Very exciting.
Speaker 1:Congratulations on the fundraise. Thanks
Speaker 2:so Let us much know when you add podcasting as a vertical. We'll
Speaker 1:happily We're happily try it definitely in the market. Have a great rest of your day. On the raise. Will talk to Thanks you
Speaker 2:for joining.
Speaker 1:Bye.
Speaker 7:Bye. Thanks.
Speaker 1:I wanted to finish on this post from Lucas Beyer now at Meta AI. He says, r f r o f l. Rolling on the floor laughing. The solution it draws is This is from Tomer Ullman. So the question for ChatGPT for GPT five is let's go back to this.
Speaker 1:And it's a picture of what you can go to the next slide. Is this the head of a rabbit or a duck? And the answer that Chachapiti gives is this image shows the duck rabbit illusion. They can be seen in two ways as the head of a duck with the beak pointing to the left or the head of a rabbit, the ears pointing to the left. So the answer is it is both a duck or a rabbit.
Speaker 1:And then and then it says, would you like me to mark the outlines for each interpretation directly on the image to make the two views clearer? And it does.
Speaker 2:Oh, that's so clear now.
Speaker 1:And it draws it on there, which is a fascinating ability to even trace the outline. This was in machine learning just a few years ago.
Speaker 2:What does it see that we don't?
Speaker 1:Yes. Maybe it's found a deeper truth. It's possible it's found a deeper Or virtual rabbit. No. This is this is this is hilarious because clearly it's been RLHF to know that people play pranks on LLMs all the time.
Speaker 1:They hit them with riddles. They hit them with unsolvable questions and trick questions. And that one of the things people demand of their AI chatbots is that they don't mess up when they're hit with a one of the classic examples is a boy is injured, goes to the hospital. The doctor says, I can't operate on this child. And then the question is like, why?
Speaker 1:And the answer should be because the doctor is the patient's father or something. But you can throw all these subtle changes where it clearly indicates who is who. And it'll still think that it's being hit with the test, with the trick question.
Speaker 2:Well, one more post from Luke Metros. Of And we haven't covered him today. Yes. There was a young man, very young man, a teenager joined SpaceX at 14 at 16. Chyran's joining Citadel Securities.
Speaker 1:Let's hear him.
Speaker 2:Luke says the hard tech
Speaker 1:Teen prodigy.
Speaker 2:Actually money is cooler. You've seen it before. If he's really good, he'll get poached by a lab within the next
Speaker 1:Maybe. Maybe. So
Speaker 2:And then one final post
Speaker 1:from Please
Speaker 2:can't pull cap.
Speaker 1:You can't pull Jordy Hayes out of the timeline.
Speaker 2:Sophie Netcap Girl says, August is the Sunday of months. So here's to hoping that does hard to feel like the Sunday scaries.
Speaker 1:Fun hanging out. Oh yeah.
Speaker 2:September is gonna come around.
Speaker 1:Yeah.
Speaker 2:And we'll be extremely back. But thank you for
Speaker 1:Thank watching. Tuning in Hope you enjoyed the guest. Hope you enjoyed the show. We will see you tomorrow. Leave us five stars on Apple Podcasts and Spotify.
Speaker 2:Thank you
Speaker 1:for listening.
Speaker 2:Subscribe to our Substack.
Speaker 1:Yes.
Speaker 2:Vpn. Substack.com.
Speaker 1:Thank you. Have a good day. Goodbye.