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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 watching TBPN. Today is Tuesday, 07/15/2025. We are live from the TBPN Ultra
Speaker 2:Ultra dumb.
Speaker 1:The Temple Of Technology. The Fortress Of Finance. The capital of capital. We have a great show for you today. Folks, lots of guests, lots of news.
Speaker 1:The big one is we are doing a post mortem on the windsurf chaos. I was saying that I liked this post from Pavel Asperuhov. I think he sort of nailed the post mortem, but we can debate this. It I mean, if you leave someone for dead, but someone else calls in a helicopter, that doesn't really change your moral positioning in the situation. And, Zdellian says this 100%, the Windsurf founders and Google thought they could pull a fast one and that the broader community slash Windsurf employees are somehow are worded enough to not catch on that their leave the Shell co with cash plan was totally morally bankrupt.
Speaker 1:Everyone will remember. And so, I don't know. I'm I'm perhaps ready to put on the steel man hat and not go quite as far as Delian. I think you might agree with the Delian and Pavel take a little bit more.
Speaker 3:I still think it's important to debate Yeah. Because we wanna avoid this kind of situation in the future. Yep. There's probably gonna be more of these deals. John John Ludig had some good Yep.
Speaker 3:Commentary on this basically saying, if you are a big tech company Yep. It is much easier and faster to do something like this. Yep. It's not just the FTC sort of like climate around antitrust. Yep.
Speaker 3:It's just that it's much easier. Yeah. It's much faster. And oftentimes, these companies are just buying the team and the talent. So they can license the tech and get the team.
Speaker 3:It is that's just capitalism doing capitalism. Yep. In this case, the answer to capitalism doing capitalism was more capitalism.
Speaker 4:But it would be
Speaker 3:kind of Scott Wu Yep. Coming in hot working over the weekend to get a deal done. So anyways, fantastic Yeah. Outcome. Wu looks like a hero.
Speaker 3:Wu looks like a hero. I think cognition is gonna be stronger for it. They got a world class you know, GTM sales marketing engine.
Speaker 1:What John Ludwig said here was big techs AI talent shortage means with means these M and A choices. A, you get the talent only but you get it today Or b, you get the talent plus the business plus the product, but months after regulatory scrutiny. And he says they will pick every time. Thankfully for Wirt Windsurf, the product lives on, but a, as the default is extent is existentially dark for startups. And so, I think what's what's interesting is like, we were debating how much of the blame goes to Lena Khan.
Speaker 1:And I don't actually know that there's all that much on Lena Khan specifically.
Speaker 3:It's like But it's fun. It's fun. It's fun to point the finger.
Speaker 1:It is. But I think The bogeyman. I think in general, like, the FTC has always has always had some sort of approval around big public company buying a small company. They're going to review it. Even if they would have approved it, it would they wouldn't Google would not have gotten the talent actually in the door, actually working at Google for six months.
Speaker 1:Yeah. Months after regulatory scrutiny. And so, that time
Speaker 3:And the other comp here that we have is Figma Yep. Who was slated to get acquired by Adobe.
Speaker 1:Took forever.
Speaker 3:Adobe had to pay $1,000,000,000 break up Yeah. Now Figma is going to IPO. Yep. And I would be shocked if they end the first trading day below the price that Adobe was gonna pay. Yep.
Speaker 3:And the company is doing better than ever, has launched a bunch of new products. And and and so
Speaker 1:Not financial advice, but I will give you product advice. Go to figma.com. Think bigger, build faster. Figma helps design and development teams build great products together. Can't say anything about the stock, but great product.
Speaker 1:We do love it. Anyway, Varunam Ganesh had a good take here. Windsurf employees over the weekend. And it's the it's the we're so back. It's so over.
Speaker 1:We're so back. It's so over. And I think the underrated take on this, like yes, it's funny and it's a good point. But this has a real economic cost. Like losing sleep.
Speaker 1:We're sponsored by Eat Sleep, as we put out a video today. We did. Sleep is valuable. And if you make me lose sleep, that does have an economic cost, that does have a moral cost. You shouldn't do that.
Speaker 1:And so, you should as a founder, try and land the plane. Not just save everyone's life, but actually not have super rough landing. Yeah. Make it a win for everyone but make it smooth for everyone. Make it
Speaker 3:smooth And for there was a good post Pavel Pavel was on a tear
Speaker 1:He was.
Speaker 2:For the
Speaker 3:last few days. Defender of the founding engineers. Yes. But he said, I hope these guys smoke Google at AI coding. Imagine the chip on your shoulder after this if you're a Windsurf employee.
Speaker 3:Yep. And Sandeep Shah over at Windsurf, he's a vice president there said Yep. It's bigger than a chip. We're coming And for so love the energy.
Speaker 1:He was left behind in the remain co. Is that correct? Yeah. He did not go over and
Speaker 5:he's On
Speaker 3:the ghost ship.
Speaker 1:Ready. He's on the ghost yeah, the ghost ship. We go. The ghost ship. And Augustus says, go off the king and Will diffuse as LFG.
Speaker 1:Lots of lots of support for Sandeep in the AI coding, in the a I IDEs war that's continuing. Anyway, Signal has opposed here. Startup comp used to be confusing because it was complex. Now it's confusing because it might be worthless even with a large exit. The founders can dip anytime.
Speaker 1:Last chopper out of Saigon vibes, except they're flying private while you're holding the bag. Good best. Yeah. My my take here was that Scott Wu looks like the hero, not Varun Mohan, the founder and CEO of Windsurf, who should have gotten an amazing outcome for his team in any other situation. Like in any other situation, I say, hey, join this fast growing company.
Speaker 1:We're just post pivot. We're second in the market. We're doing some cool stuff. I'm raising some money, and we're growing, but we're only doing $4,080,000,000 ARR. And I get you liquidity at 2,400,000,000.0.
Speaker 1:You should be like, I am ride or die for this guy forever. Yeah. And I think that a lot of these employees aren't gonna feel that In in in five years, even after all the dust settles, they're gonna remember that this was not not handled as well as it should have been. And so they're gonna be like, meh, I don't wanna work
Speaker 6:with him.
Speaker 1:Yeah. We just trust It's rough.
Speaker 3:I'm sure when when the muzzle is review is removed, he'll be able to Yeah. Hopefully call every employee one by one. That would be good. Yeah. Make up.
Speaker 1:And so I still put some of the blame on FTC stuff. Just FTC stuff broadly. Some of the blame on Google Comms. Some of the blame on Lena Khan and what and and how she changed the FTC.
Speaker 3:And the other thing is speed, like, this was happening really. Remember the the the sort of exclusivity period that that OpenAI had on the deal expired. And I think this got announced, like, the very next day. So I'm sure it was in the works, they definitely were moving quickly. And again, it would have been a good outcome if they all ended up at at OpenAI, but I also think this is a good fit going forward as well.
Speaker 3:Yep.
Speaker 1:So I'm excited to see
Speaker 3:what each branch of the team
Speaker 1:Roon here has some pushback on Signal. He says, this has always been true. The idea that startup comp is confusing and complex. Investors and founders screwing over early employees during an M and A is a time honored tradition in Silicon Valley. I don't know how true that is.
Speaker 1:There's a lot of examples where that didn't happen, but of course it it it has happened. If anything, the abundance of capital has made things better for early employees. And so, know, kinda, you know, people people taking both sides. We didn't get to this post, but it was funny. Connor saying, Windsurf is the so hungry of startup acquisitions.
Speaker 1:They got acquired by OpenAI, Google, and now Cognition Labs all in one month. You'll love to see it.
Speaker 3:Swicks has a six way parlay. He said, I want Mistral founders to Apple, Mistral team to meta, character remain code of perplexity, core to perplexity, ideogram to figma, gamma to notion, read it back. Read it back. There was rumors that Apple was was interested in in picking up Mistral.
Speaker 1:Oh,
Speaker 3:really? Taking a look at it. The funny thing though is that if you're France, do you want your national champion
Speaker 1:Yeah.
Speaker 3:To you know, the the luxury
Speaker 1:AI The straw should go to LVMH
Speaker 3:for sure. Exactly. Should be home with the Arnaud's.
Speaker 1:Didn't we post a joke post around that? I think we did.
Speaker 3:I think we did. Yeah. I I want fine luxury language models Yeah.
Speaker 1:From the Yarno family. Think some of the Mistral folks were like, this is hilarious but also like complete misinformation. Anyway, Sandeep says, it's bigger than Chip, we're coming for it. And Rob says, let's talk about a reboot for HBO Silicon Valley. And it's funny because when you see the windsurf tag right in the name, you're like, oh, okay.
Speaker 1:This is hilarious. You think this is ridiculous. And at least you're having some fun with it.
Speaker 3:Can we talk about our our upcoming guest?
Speaker 1:Yeah. Yeah. We're gonna have one of the co creators of HBO Silicon Valley on the show. He has been working on on Barry for a couple years, kind of out of the Silicon Valley parody world. But we're gonna
Speaker 3:try to get that. We're gonna explain to him
Speaker 1:What's going on in
Speaker 3:Line by line, what's been going on. And I think once he really processes it, he'll be interested in making a reboot. Yeah. Well, you can reboot
Speaker 1:your finances with the ramp. Time is money. Save both. Easy use corporate cards, bill payments, accounting, a whole lot more all in one place. I like this post.
Speaker 3:Yeah. I threw this in kind July brand ambassador says, the business the business I stood on was operating at a loss.
Speaker 1:40 k likes. You love it. So good. Perfect. Business nice to know.
Speaker 3:Perfect inner intersection I am. Into it and Business. And and Justin Bieber.
Speaker 1:Yeah. I remember we put up that when when we talked about the Justin Bieber launch. You were like, you're so offline, John. And it's like, I'm extremely online but just in one narrow bubble of the internet.
Speaker 3:Yeah.
Speaker 1:And so I somehow missed the entire Justin Bieber saga
Speaker 3:The new one album in the world.
Speaker 1:It's the new number one album in the world. See, this is I'm learning this again.
Speaker 3:I think so.
Speaker 1:Wow. We listened to some of it. We should do some I don't know if we're in music.
Speaker 3:We actually listened we were saying we should listen to this Yes. On the drive home
Speaker 1:As research.
Speaker 3:And we made it two songs.
Speaker 1:It wasn't it wasn't really hitting for us but
Speaker 3:So but congrats on the comeback.
Speaker 1:Mean, it seems like a great launch. Do you think the do you think the viral moment was staged or do you think it was organic and then he just leveraged it later?
Speaker 3:Seemed like a legitimate crash out.
Speaker 1:Mhmm. I mean, seems like, you know
Speaker 3:But it but it was extremely well played.
Speaker 1:Even the best of us in technology have gotten frustrated with the journalists from time to time.
Speaker 3:So Yeah.
Speaker 1:Who amongst us are above that?
Speaker 3:Yeah. Right? Yeah. If the misinformation caught me outside of Nobu like that
Speaker 1:Yeah.
Speaker 3:They might
Speaker 1:You might crash out.
Speaker 3:I might crash out.
Speaker 1:And then drop an album at number one. A new a a number one livestream. And so Kyle Zhang, I think from the browser company or browser base has has kind of a hot take Kind of a hot take
Speaker 3:here. Soy boy versus Gigachad, Varun Mohan left his company for big tech screwed over employee equity. And then of course, Scott Wu can solve any math problem imaginable giving Windsor from employees accelerated vesting and Cliffs Wade.
Speaker 1:I like math problems.
Speaker 3:Scott basically Scott basically came in and was able to run the playbook that a lot of CEOs have run. Who was it from from Matrix? Ilya? Ilya Sukar. From Parse.
Speaker 1:Yeah. Parse.
Speaker 3:He did the same exact thing with his employees Yep. Back in the day when
Speaker 1:he With Facebook. He sold he reinvested, which is pretty common. And Yeah. And I I I would believe that that the team that went over to Google is reinvesting to get that multi billion dollar For sure. I don't think it's just cash and you can just quit immediately because the whole point is a talent acquisition.
Speaker 1:So it's gotta vest. Right? But, yeah. I mean crazy situation. And I I do wonder I do wonder like what what the price would have been to say, hey Google, I'm it's all or nothing.
Speaker 1:What price will you pay now? Because there's a price to wait for Google. Google would have to pay a price to wait to actually bring over the whole Windsurf company. Right? They need FTC approval for that.
Speaker 1:Let's call it six months. What is Google's cost?
Speaker 3:Send our pitch AI doesn't maybe feel like he has six months.
Speaker 1:He would miss
Speaker 3:six months If you want to if you want a real shot at at meaningful traction in cogen Mhmm. Another six months feels like a long time.
Speaker 1:So what? Billion dollar cost? 2,000,000,000? Is it a zero?
Speaker 3:Well, could it could be the
Speaker 1:Would you winning not be deal?
Speaker 3:Or or having a you know, horse Just a not because, you know, plenty of people are leveraging Gemini broadly across their companies. Haven't heard it a ton from engineers on the show talking about using Gemini in their coding stack.
Speaker 1:Yep.
Speaker 3:Yep. Scene was a big fan.
Speaker 1:Yeah.
Speaker 3:But it doesn't come up a ton. And they know that there's there's billions of dollars being printed in in code gen.
Speaker 1:Mhmm.
Speaker 3:And I'm sure that Google wants a piece of it. Business lines that that they that I imagine they can see a through line of we can get this to a billion dollar run rate and that's kind of the bar at Google.
Speaker 1:Yep. Well, if you need to review some code, head over to graphite.dev code review for the age of AI. Graphite John. On GitHub ship higher quality software faster. And speaking of artificial intelligence, wanna go to Tyler and get the update on the new Gwern piece.
Speaker 1:He read it on the treadmill this morning. Is that right?
Speaker 2:This morning on the treadmill. Yeah. I I realized that there's Google on the treadmill. So I was like, oh, I'll read the new
Speaker 1:Wait. What? Article. There's like The treadmill has a has a browser?
Speaker 2:Yeah. So usually Wow.
Speaker 3:That's the real browser wars.
Speaker 1:That's the real browser wars. Wait. Is common available?
Speaker 2:Just Google. Yeah. That's what you're
Speaker 1:gonna Wow. Break it up. Break up the treadmill market. Yeah.
Speaker 4:This is ridiculous.
Speaker 3:It's a monopoly.
Speaker 1:Yeah. Okay.
Speaker 3:So Google's Chrome is probably paying to be on all the Equinox Probably. Treadmills.
Speaker 1:Probably. Okay. So you so Gourn wrote this piece and it kicks off with Dwarkash Patel. What was the what was the actual inciting tweet that I saw? I saw Dwarkash posting about it and he was saying he was saying, really interesting new Gorn essay, LLM Daydreaming.
Speaker 1:It's a proposal of how default mode networks for LLMs are an example of missing capabilities for search and novelty. By the way, I know it's a big cringe it's a big cringe to delight in, but if you had told 19 year old me that a Goren essay would open like this, I would have found it hard to believe. And it is a huge milestone for Dora Kesh, so congratulations to Dora Kesh. He deserves it. So Duarkesh Patel asks why no LLM has apparently ever made a major breakthrough or unexpected insight.
Speaker 1:You would expect this given the incredible IQ that is on display for fifteen minutes as you use an LLM. No matter how vast their knowledge, or how high their benchmark scores, while those are by definition extremely rare, contemporary chatbot style LLMs have now been used seriously by tens of millions of people since ChatuchPete November in 2022. And it does seem like there ought to be at least some examples at this point. This is a genuine puzzle. When prompted with the right hints, these models can synthesize information in ways that feel tantalizingly close to true insight.
Speaker 1:The raw components of intelligence seem to be present, but they don't. What's missing? It's hard to say because there are so many differences between LLMs and human researchers. So Tyler, take me through the piece. What did Gwern have to say?
Speaker 2:Yes. So so basically, the question is like, okay, why have they not produced new research?
Speaker 1:Yep.
Speaker 2:He he basically gives two reasons. So so the first is like, they don't have continual learning. Mhmm. Right? Which is like, you train an LLM, you put it to inference, it's like the weights are fixed.
Speaker 2:They don't change. There's sure there's like test time inference but it's not really learning like, you know, between the chats. Right?
Speaker 1:Yeah. Unless it's in the context window. Yeah. But
Speaker 2:it There's some kind of like primitive ways to do memory you're starting to see but it's really like not super great so far.
Speaker 1:Yep.
Speaker 2:So he kind of it there's analogy it's does a person who has like permanent amnesia, have have they ever like produced novel research? Like Yeah. Probably not. Right?
Speaker 1:Interesting. Yeah. This is the PhD amnesiac. Yeah. Like we bring them in, they're genius, but every time they go home, they forget everything that they've learned about running our business and could they even figure out how the printer works.
Speaker 1:They would have to start from first principles every single time just to print, you know, a stack of tweets for us. And all of a sudden we'd have a genius who couldn't really add value at our company.
Speaker 3:If you can't print tweets, you're gonna have a tough time.
Speaker 1:You gotta operate the brother printer
Speaker 3:Under this to
Speaker 1:work at this company. Anyway, continue.
Speaker 2:Yeah. Okay. So there's continual learning Yep. And then there's continual thinking, right, which is kind of like the model is only producing tokens when you prompt it. Right?
Speaker 1:Mhmm.
Speaker 2:So it it's not like like an average person is like daydreaming or they're like normally dreaming. You you kind of are always like passively thinking about stuff.
Speaker 1:Mhmm.
Speaker 2:So it's like sometimes you wake up in the morning, you just have this like new solution to a problem that you're working on. It's like, oh, how did that happen? I wasn't like thinking while I was,
Speaker 3:you Yeah. How many great ideas have been shower thoughts?
Speaker 2:Yeah. Exactly.
Speaker 1:It's really true.
Speaker 2:So so so basically, the the solution is he has this like system where you basically just draw like two totally random like concepts ideas Mhmm. And then you just prompt the model. You say, draw a connection between these two things. Mhmm. And then for like almost everything, it's gonna be like total nonsense.
Speaker 2:Right? It's like two random things. There's not gonna be anything. But if you do it enough times, you'll eventually get like, oh, this is actually like an interesting connection between these two things.
Speaker 3:Yeah.
Speaker 2:It's like a new concept. It's like a novel idea. Yeah. You can use it for research stuff like this. Yeah.
Speaker 2:So you're
Speaker 1:just randomly drawing like like almost words like Yeah. Cow ethernet cable. Like no connection there. But if you iterate, you might wind up with like cow and Fitbit and then you come up with the idea for that company Halter that's making like a trillion dollars and is doing really well. And I never would have thought of that, but if I just like iterated enough to be like, does a Cow need a Fitbit?
Speaker 1:Maybe. Okay. Is there a business here? And you can kind of trace through that.
Speaker 2:Yeah. Basically, and then so you have this like you have like two sides. Right? You have this thing that kind of tries to make some non obvious connection.
Speaker 1:Mhmm.
Speaker 2:Then you have this other like half of the model that basically says, is this an like an interesting idea? Yeah. And then basically, so if it is an interesting idea, it like saves it to this kind of like memory bank. And then you use that memory bank to to keep pulling new ideas like from that and from kind of everything else.
Speaker 1:Yeah.
Speaker 2:So you're like building on top of these ideas. And then eventually, you're gonna like slowly, very slowly build like these really interesting ideas that are totally novel that you'd only get from basically passing in like millions and billions of Mhmm. Totally random concepts.
Speaker 1:Yeah. Yeah. I feel like, yeah. One one of the things that he highlights is like, this would be incredibly compute intensive. Right?
Speaker 1:Like you're talking about like running all the data centers all the time to kind of think about this. And it feels like it puts me back on Kurzweil timelines of like 20 I think he says Singularity in 02/1945. And so it's like, this is an interesting idea. What if it what if it takes a thousand times as much compute as we have now?
Speaker 2:Yeah. I mean, 're basically like brute forcing research. Which like kind of doesn't make sense in a way. If you have these models that are like small enough, you can kind of steal them down. Do their
Speaker 3:I don't know. Think about a scenario where founder exits their company, they do their earn out, they wanna start something new instead of spending two years lost in the woods. You know, think trying to come up with a decent idea. They just spend $5,000,000, five minutes And just like generate a bunch of different ideas. Yes.
Speaker 3:You still then have to like pick an idea and it might seem good on the surface and then you talk to people in the industry and they Yes. Say well, oh well like here's here's kind of the issue with Yeah. With how you're thinking and then maybe you gotta do another run.
Speaker 7:Yeah. But
Speaker 1:I think the I think the interesting question is like 5,000,000 feels like the point at which we would say, like if someone built this system and they actually said, hey we've we've designed the algorithms such that you can you know, tell it to go and it will come back with a good idea. But every time you hit go, you get a $5,000,000 OpenAI bill. Like people would push that button for sure. And and it would be venture backed and stuff. But what if it's 5,000,000,000 or what if it's 5,000,000,000,000?
Speaker 1:Like there is a point where it just won't no one will push that button.
Speaker 3:Ideas guys would be so thrilled if it costs like $5,000,000,000 to come up with a good idea.
Speaker 1:I think it actually does right now. I think it might cost more. I think the current paradigm is that even if you even if you ran this algorithm, you ran this strategy, like the current models are so like What's the word? Like they're they're not great at like compressing and they're not efficient. And so you might be able to brute force it.
Speaker 1:You're brute forcing research. But the level of brute forcing might might like when you math it out, might be like in the billions of dollars to get an insight. I don't know.
Speaker 2:I think it it also like, it doesn't maybe make sense at if you're like a random person you're gonna pay $5,000,000 for an idea. Yeah. But it maybe makes sense if you're a big lab and you need like you're hitting a data wall. You need new data. I think that it kind of makes sense.
Speaker 1:Yeah. That makes sense. And then
Speaker 2:also he also brings up this this thing which is like, if you like kind of distill the model, even if you like open source it, you're not really giving away the new ideas. Right? Because like say that you have some like weird concept that you find, it's baked into the model. But like you the the only way to access that is to like specifically query for it. Mhmm.
Speaker 2:So you're not actually like giving away these new ideas even if you're giving out the model. That's another kind of interesting.
Speaker 1:So you actually have to like inference is enough to pull the insight out of the model even if the it it's literally the the there's a $100,000,000 in your laptop and your job is to pay pull it out. Like Yeah. There's a billion dollars in the weights of GPT five or 4.5. But you know, to get the insight out of it might cost another billion dollars.
Speaker 2:Yeah. It's basically like the the monkeys typing on the Yeah. Keyboard until they get Shakespeare. Yep. It's like the same thing but for like research.
Speaker 1:Do we have a monkey sound effect yet? No. No. We gotta get one of those.
Speaker 3:Get on it.
Speaker 1:What's your reaction to Chris Best, founder of Substack, friend of the show? He he said, he's quoting this contemporary chatbot style LLMs have now been used seriously by tens of millions of people since ChatGPT November 2022, and it does not seem like there it does seem like there ought to be at least some examples of novelty at this point. And Chris says, potential answer, there have been, but the human users hogged the credit. So so maybe these chatbots are spitting out novel ideas but people are just like, I'm not telling anyone that I got my idea for from ChatTV because that's like a bad signal.
Speaker 2:Yeah. I think that could be plausible. I think it's also just like the the way that LMs work is like you you're querying for a specific thing.
Speaker 1:Yeah.
Speaker 2:So like if you have it's it's more of like you have a hunch of like this could be an idea and then the LM like really gives it to you. But you you never really see like LLM just like here's a cool idea. Right? Which is what this is kind of
Speaker 1:And this is the
Speaker 3:The other the other thing is a lot of a lot of business ideas like good business ideas end up being simple
Speaker 8:Mhmm.
Speaker 3:And they don't they don't always feel like, oh, look at this novel insight. Mhmm. It's just obvious. Yeah. Like other people will see the idea and they'll actually be if they're this kind of founder type or maybe they're looking for their next thing, they will legitimately be annoyed because they think, oh, I I could have thought of that.
Speaker 3:Yeah. And so
Speaker 1:They've been for cows? I could have thought
Speaker 4:love that business. I
Speaker 1:business.
Speaker 3:No. So so that that's the other thing is is at least in in our world in the private markets a lot of a lot of ideas that end up being worth a lot. Yep. It's not necessarily the idea that's worth a lot but it's the having the idea at the right time and then the execution against that idea Yep. For for a very long time.
Speaker 1:And I I think that kind of gets to you know, my silly Coogan's eval which is tell me a joke. That requires novel insight. Because if you just tell me a joke that's already been out there that I've heard, it's not funny. So it requires novelty. It requires insight.
Speaker 1:It's actually really hard to come up with a new joke that's never been told before, because it requires putting multiple things together, realizing something. And so I think that even though I'm not going to Chatuchipi Tea regularly and asking for like, make a scientific discovery, or like give me a genius business idea. I think the tell me a joke is is in the same vein of like hard problem for LLM. And, I think that if if they get to the point where you can ask it for a novel new humorous insight like joke with insight that's actually new, it should be able to do the other things. And I think that is some sort of fundamental restraint, and it's it's it's what we're talking about when we talk about spiky intelligence.
Speaker 1:It's like very good at certain things but it's missing this one human capability. Is there anything else from the post that you think we should highlight, Tyler?
Speaker 2:I think that was that was mostly it.
Speaker 1:Okay. Quirn is on the absolute tear. We love him.
Speaker 3:He's back in the bay.
Speaker 1:Oh yeah. He's back in the bay. That's great. Well, we have four minutes until our first guest of the show a
Speaker 3:little bit of the story.
Speaker 1:Let's cover some ads first. Let's tell you about Vanta.
Speaker 3:Good idea.
Speaker 1:Automate compliance, manage risk, improve trust continuously. 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. And then, should we kick off with some NVIDIA backgrounds so when we have Zach on
Speaker 3:I just wanna say congratulations Avanta for picking up Scott Holden.
Speaker 1:Oh, for sure. He entered
Speaker 3:the trade portal. They picked him up.
Speaker 1:We love some
Speaker 3:personalities brought the Brex over to Vanta to lead marketing efforts at Vanta.
Speaker 1:And So Wait. Do we have the do we have the post?
Speaker 3:The traded post?
Speaker 1:No. Yeah. No. Christina's post, which was hilarious.
Speaker 3:Let's pull it up.
Speaker 1:I didn't know she had this in her.
Speaker 3:It's great. I got it. Yeah. Got She says, big day at Vanta after a couple of days in the transfer portal. Scott Holden commits to the purple lions.
Speaker 1:Purple lions.
Speaker 3:Looking forward to working with you, Scott. So, we'd love That's to see
Speaker 1:a great photo of him too. Wow. I wonder Yeah. What the context was for that photo.
Speaker 3:Chad.
Speaker 1:Yeah. But like, you know, you see a lot of like LinkedIn like just like headshots. This is like the full body shot, really nice soft lighting, teeth looking extremely white. Fantastic. Just nice breakdown.
Speaker 1:Looking diced.
Speaker 3:Anyways, let's get into the story before Zach Kukoff joins. Take your news today out of the journal, Nvidia can sell AI chip to China again after CEO meets Trump. Yep. Jensen's k Huang's case proves persuasive as The US agrees to grant licenses for the h 20 chip. Nvidia said it has received assurances from the Trump administration that it can sell its h 20 artificial intelligence chip in China days after chief executive Jensen Huang met president Trump.
Speaker 3:The administration's move marks a turnabout after the commerce department restricted sales of the chip in April costing costing Nvidia billions The of news came during a visit by Huang to Beijing where he met, he was meeting senior officials. I'm very happy, he told reporters. Shares in Nvidia rose more than 4% in early trading on Tuesday. So big big turn of events. The also coincides with girly.
Speaker 3:Girly's in China right We gotta have him on to to give us a breakdown of what's what's happening on the ground there. But yeah. A bit of a surprise. This also feels like something that that Sax would have been heavily involved with as the AI czar. Yeah.
Speaker 3:So good. You know, whatever people, you know, a lot of people have have their feelings about Saxe. But I I do believe he is a patriot and would have had a lot of different people around the table Yep. Working on this decision.
Speaker 1:So obviously, China Hawks in shambles.
Speaker 7:Very
Speaker 1:upset about this. I imagine. Not all of them have commented on it but I imagine that with people who take the vanilla view of like, sort of like zero sum competition between US and China, they're gonna be upset because they say, hey, just restrict the NVIDIA chips. They won't be able to train AI. And for a variety of reasons, AI is is dangerous.
Speaker 1:It's gonna be super intelligence. We need a democratic, a capitalist superintelligence. We don't want a a communist authoritarian superintelligence that's controlled by a single person. We want it to be controlled by humanity or controlled by the American voters, something like that. On the flip side
Speaker 3:to be freedom pilled.
Speaker 1:For sure. And I and I agree with that to some degree. The question is, does this is there a is there a potential world where selling NVIDIA h twenties into China actually hurts Huawei more than it hurts America. And so it's somehow advantageous for us to get the entire world standardized on the CUDA stack and the NVIDIA stack, and then and then we are able to have like more leverage over the Chinese AI ecosystem, and that gives us more control to basically shift the overall amount of America pilledness in AGI generally. I don't know.
Speaker 1:There are multiple sides but we're gonna talk to Zach Kukhoff, our first guest of the show. He's been on multiple times now. You know him. You love him. Zach Kukhoff.
Speaker 3:He's almost the first guest to do a three peat three days in a row. He made it two. But
Speaker 1:But we
Speaker 3:got bored. Depending on how Yeah. Got bored of the swamp.
Speaker 1:With the swamp. Sorry. It happens.
Speaker 7:That's alright.
Speaker 2:But but You wanna talk about trade deals?
Speaker 3:Today gets a little bit, you know, if this Perfect gets more chaotic on this topic Yeah. Maybe we'll run the Yeah. You'll get the
Speaker 7:It's a really perverse incentive. Like, I'm really hoping for horrible things to happen.
Speaker 3:So I can
Speaker 7:come back and complete this repeat here.
Speaker 1:Yeah. Yeah. Take us from the swamp to the TSMC clean room. It's the swamp meets clean room segment of the show. So kick us off, what how how would you characterize the news?
Speaker 1:Exactly what's happening, and then we'll go into some analysis.
Speaker 7:Yeah. So I think everybody knows the h 20 chip was specifically designed by NVIDIA to meet Biden era restrictions on what chips could be exported to China. Right? So if you zoom out, you go back to April, the beginning of Trump two, what you have is basically a little bit of regulatory uncertainty where NVIDIA spent a lot of money producing chips that are specifically designed to go to China. And the admin comes back in April at the last minute and says, sorry.
Speaker 7:You can't export the chips. We're putting in export controls for having licensure requirements. NVIDIA takes a huge, like, $8,000,000,000 revenue impairment, basically, on the cost of producing and not selling this huge swath of chips. By the way, at the same time, huge domestic market for h twenties, lot of demand. Even though they're weaker, lot of demand from startups domestically for the same chips.
Speaker 7:Last night basically, between April and last night, you've seen a full court press by NVIDIA for the last x number of months where Jensen has been doing a winning campaign, a successful campaign of influence in Washington trying to make two points exceptionally clear. The first point is we need to export these chips because for the same reasons John just said, the stack, American dominance, we want everyone to standardize, so on and so forth. We're losing the biggest market besides America. And, also, he's made the point of, look. We can also comply in a more regulatory aggressive way.
Speaker 7:Right? So there's the chip security act was introduced in congress in May. It's working its way through the house. It's moving through the senate right now. Basically, NVIDIA has helped shape that act aggressively, and it says, look.
Speaker 7:We have to make sure that there are ways to track the diversion of these chips, track where they're going, and and this is still up in the air, is there going to be a kill switch built into these chips? This is all to say, last night, huge win for NVIDIA. Admin comes out and says, okay. Or really, NVIDIA comes out and says, admin has told us we are going to be allowed to export these chips to China for the first time with some checks on them, but almost an unfettered way. Markets are up.
Speaker 7:Obviously, Asian markets are up quite a bit. NVIDIA is up quite a bit on this news. Huge economic win for NVIDIA. Huge question mark from the national security folks to say, look. There's some real risks with these chips going out.
Speaker 1:Is there a horse trade going on? Is this part of a larger bargaining discussion where we even if it's not explicitly NVIDIA chips for rare earth materials, something else might be happening behind the scenes, and this just looks like a little bit of a give from The United States, and we might be expecting something. Or maybe we already got something. Talk talk to me about kind of the the trade imbalance and just the overall deal making that might be happening.
Speaker 7:It's a really good point. This is the the backdrop of all of this is the trade war between The US and China. And as much as it is to you and to me and probably to most of the TPPN folks, the most important question is AI. It is one of many questions the admin has to work through. Rare Earths, by the way, is a huge one.
Speaker 7:Obviously, tariffs on number of American products are a second one. Right? So the big question is, look. In April, the reason we stopped and we actually put in the admin put in these export controls on NVIDIA ships to begin with is in large part because of their ratcheting tension with The United States and China. And now part of the reason they're reducing some of these is because the Chinese market is opening up.
Speaker 7:We're having great progress. Ironically, Japan has been difficult to negotiate with. China has been a good negotiator on trade. And China really wants these chips to come in because even though they wanna wean off NVIDIA and go to Huawei as quickly as possible, the h twenties are a bridge to get to Huawei's ascend architecture. Right?
Speaker 7:To get to a whole world.
Speaker 3:Meme is the meme that, we're gonna get China dependent on US chips, is it really just a meme? Like, the idea that that the idea that there that that that they would just play basically, Jensen makes a good point which is like we want them to be dependent on our infrastructure. Totally. The Chinese government and industry will likely just say, okay, great. We're happy to depend on these for another few years while we ramp up our own.
Speaker 1:Did they promise not to reverse engineer them this time? Yeah. Question?
Speaker 3:This time, not this time. You know, we've done it we've done it thousands of times now. But this time will be different.
Speaker 7:That's right. Promises this time Charlie Brown can hit the football for once.
Speaker 1:That's right.
Speaker 3:So I guess, you know, some of the pushback was somebody yesterday when when this news broke. Walter Bloomberg, you know, prominent journalist who always follows Always gets it right. Journalistic standards says, Nvidia expects Chinese military won't use AI chips which is good thing to expect but probably unlikely. And then somebody quoted it and said, the increasing willingness of Jensen Huang to boldly play both sides makes NVIDIA one of the most serious threats to US national security and global technological dominance currently running. So very dramatic but but you know, valid point of view for this person to have.
Speaker 3:How do you think Have you been surprised at how Jensen can effectively go, you know? I mean Yeah. I wouldn't necessarily play both sides, but you know, this first thing he did when the chip, when the initial h 20 ban happened is he flew over there and he started working on a new r and d center in Shanghai. Yeah. Yeah.
Speaker 3:So so he he is definitely a capitalist but but it's been interesting to see. The other factor here is like you're running the most valuable company in the world. So Correct. You do have quite a bit of leverage. And he almost in some ways, he's sort of like holding up the, you know, the entire global economy.
Speaker 1:Right? Yeah. Does
Speaker 3:feel A couple bad quarters Yeah. And everything.
Speaker 1:It does feel like the good ending that I'm hoping for is like this is a stabilizing force for the world in general and it's not it's not escalatory. And even if it's like, okay, we're gonna be competing more on chatbots and tech companies and stuff. It's like this moves like the potential for a Taiwan invasion down. And like I care a lot more about that than did did Huawei ship a lot.
Speaker 4:Does it Does I don't
Speaker 7:know. Yeah. I don't know.
Speaker 1:What's your take?
Speaker 4:I don't
Speaker 7:know I know if I agree with that. Well, say a few things. You guys had the Apple in China author on. Right?
Speaker 1:Yeah. And so a big
Speaker 7:part of Apple in China was the whole shtick of Apple comes in, says we're gonna teach the Chinese how to do what we do domestically in America, and then they do it, they get better at it, and they no longer need Apple, and they have a domestic market that can produce in the same way. Yep. That's the risk of this export, right, which is that there's no dependence. Think Jensen's a really talented operator. And by the way, the evidence for that is there's a big letter that went out critiquing a strip to Beijing.
Speaker 7:Only two senators signed it. Right? It was Banks on the right and Warren on the left. And if you think that they didn't try to get other people in congress to sign that letter too, you would be shocked at how few people were willing to go on the record on the anti NVIDIA side of this. Right?
Speaker 7:Interesting. The other thing I would say to you is if you think these chips aren't gonna get diverted to CCP use, right, to military use, to PLA use, I think that's a little bit of a naive perspective. Right? It's it's impossible to prevent them.
Speaker 1:Yes. But my question is, if
Speaker 3:Apple not use them for the thing that's most critical to national security. Yeah. It's like Right. Exactly. Great if if it'd be great if they could, you know, set up a local instance of x AI's new
Speaker 7:WeiFu book. Yeah.
Speaker 3:3PM. Yeah. Would be really good for me. Really ramp that up in China, but
Speaker 1:Okay. So if the the the slight difference that I'm I'm kind of steel manning here is No, please. Is if Apple goes into China and teaches a bunch of CNC engineers how to mill aluminum to make iPhones and they explicitly demand that those manufacturers have other clients like Huawei for smartphones. Like, they are building up an internal capacity. If you're just selling in GPUs that are fully assembled, yes, you could tear them down and rebuild, but maybe there is enough lock in in the CUDA ecosystem that you can't just just swap out and and Yeah.
Speaker 1:Just shift off.
Speaker 3:Issue, John, is here's another headline from the journal just a couple months ago. NVIDIA to set up research center in Yep. Shanghai. So they Yep. Are setting up and Yep.
Speaker 3:Investing in r and locally. Yeah. That's And all of that, what whatever whatever they know how to do there, whatever they learn how to do there, it will all disseminate broadly Yep. Into the Chinese economy. And that's just a fact.
Speaker 3:And and if somebody disagrees with that, I think it's
Speaker 1:And I guess we are we are seeing like cracks in the CUDA ecosystem lock in right now with AMD and and and ROCM and RockM. And so people and and the GPU and Trainium and you know, Amazon and you know, I'm sure I'm sure Meta's thinking about custom silicon and and on device inference at Apple. So it's like, yeah, if you can go and train a frontier model on these h twenties and then distill it down and run it on Huawei Ascends, like, that does pull their capabilities forward. Correct. How what is the mood in in DC around the idea of, like, AI as being a really impactful military technology right now?
Speaker 1:Because for most people, it's knowledge retrieval with ChatGPG and CodeGen with Cursor, Cloud Code, Windsurf, Devon. And beyond that, it's like, okay, my b to b SaaS company is a little bit more efficient and I have some AI agents in there. But, like, people aren't really saying, like, you know, oh, it's transforming everything yet. They're not showing those examples even though that's kind of the narrative. Concretely, besides, like
Speaker 7:Yeah.
Speaker 1:You know, prompt, defeat America. You know? Like like, get me from where we are here to there Yeah. And walk me through the mood in Washington around AI as a military technology specifically.
Speaker 7:I think people on the military side are probably some of the earliest to realize the value of AI for a couple of reasons. One, there are already real battlefields today. There are theaters of war where automated decisions are being made that are life and death decisions. And putting aside perspective in any of these wars, you know, whether you're looking at Russia, Ukraine, or whether you're looking at Israel and The Middle East, there are already real instances today of AI deployed on frontier live to operate things like drones, to operate things like targeting infrastructure. Like, that's happening today.
Speaker 7:It's not happening in America, but that is happening today. And the military is very good at keeping abreast of what our compatriots are doing overseas. That's the first thing. Mhmm. Second thing I would say to you is the big unlock for a lot of this is the decreasing influence of humans in warfare.
Speaker 7:Right? Like, in ten, fifteen years ago, twenty years ago, if you were an air force pilot, that meant you were actually sitting in a plane doing Top Gun shit. Today, you're an air force pilot pilot, it means you're in Arizona in a cooled warehouse piloting a drone that's, like, remotely dropping bombs on things. That unlock, there's no reason that should just be the case. We take them out of the cockpit, put them into the warehouse.
Speaker 7:The next step on that is why have the human piloting at all? Right? Why not have the autonomous pilot of the drone making those decisions effectively and actually fighting the frontier of war for us so there's no risk at all domestically to our people going into war? So there's a lot of maybe enthusiasm is the right word. There's a lot of awareness of the value of AI in warfare, and I think the double edged sword of that is if you're looking at if you're concerned about an invasion of Taiwan, it's far more concerning thinking about a China.
Speaker 7:The PLA army is a cup is not an an up to date army in any of your specs. It's far more concerning thinking about a PLA army that has access to supercomputer clusters built by h twenties or other kinds of American ships in the mid h twenty that is able to more effectively fight in Taiwan rather than a PLA army still fighting conventional warfare where it's never been able to excel.
Speaker 1:Yeah. I guess I guess my my pushback or, like, question is just around, like, I I hear you that AI is being used on the battlefield. When I think of AI on the battlefield, I think basic image recognition, look at a satellite image, pick out the missile silos, or if you're a drone, like, it's a very, small neural network. I'm not I I haven't heard a lot of concrete examples of, yeah. We're running a large transformer based AI system to make wartime decisions.
Speaker 1:But at the same time, like, that feels like a year away.
Speaker 3:Yeah. Yeah. But who who's gonna Please. You know, what what government is that is that good PR for any military or government in the world? Hey, by the way we're big we're building the biggest super cluster ever and it's for killing.
Speaker 3:It's a killing machine. Yeah. Like who who wants to go out and see that? One question I have is the is part of why NVIDIA has been so effective on lobbying. You mentioned not being only being able to get If you can only get Elizabeth Warren to sign your doc, you're in a against you're in a rough spot.
Speaker 3:Yeah. But I saw so in 2023, they spent about half a million on total on lobbying. 2024, spent
Speaker 1:This is Nvidia?
Speaker 3:Yeah. They spent 640,000. But then in q one of this year, they spent nearly a million. So they've clearly ramped it up. But how much do you think they benefit from just being the largest company in the world and everybody being a NVIDIA bag holder in some way or another?
Speaker 3:Yeah.
Speaker 7:Right? I mean success to get success. You know, if you if you're the largest company in the world, people wanna be a part of that. Also, look, the number of dollars you spend is not always the proxy for lobbying. Right?
Speaker 7:Like, the the hard thing to understand is Jensen is spending more time than probably any other of his peer CEOs.
Speaker 1:Yeah.
Speaker 7:Yeah. That's right.
Speaker 1:Yeah. His travel budget is probably bigger than his lobbying budget. Right?
Speaker 7:That that's exactly correct. Why would you need to have 30 registered lobbyists running around when your CEO has a personal relationship? This is the new thing. This is the the sort of unique aspect of this admin relative to other admins, which is there is a retail politics relationship based components of a lot of this work that did not exist before. Yes.
Speaker 7:And if you're Jensen and you can have the great relationship with POTUS yourself, you don't need 30 lobbyists running around. You can fly to Mar A Lago.
Speaker 1:He's in founder mode. And let's not forget Donald Trump, Vacheron Historiques owner, watch guy. Yep. Jensen recently spotted with a $1,000,000 Richard Mill. So Yeah.
Speaker 7:God, I've never felt more poor in my life.
Speaker 1:If you if you go to shake a hand in Washington and you got a bare wrist, you might be getting booted. But if you pull up with a hitter, you're going to the moon.
Speaker 7:What do guys what what are you boys rocking today?
Speaker 1:What's the watch? I actually forgot to put on my watch. Oh.
Speaker 3:Bare bare wrist today.
Speaker 1:But I but I typically I typically wear a Vacheron Constantin Patrimony. And
Speaker 7:Oh. Very nice.
Speaker 1:There you And Jordy wears the Adamarque Peuge Royal Oak.
Speaker 3:Anyways, anything else we should be looking out for this week?
Speaker 7:Only thing I would say to you, look, just, John, to your point on who's using actually sophisticated AI, it's not gonna be today, at least Yeah. What's declassified today is not gonna be, hey. We blew up this thing. It's a lot of cyber warfare. Right?
Speaker 7:Like as more and more things are about, hey. I wanna disrupt the infrastructure of my opponents, their water infrastructure, their electrical infrastructure, their banking and financial infrastructure, that's where LLMs are increasingly being used. What you should look for is, look, do the chips get exported? Does this actually happen? Does it get flipped again?
Speaker 7:Right? What are the gunks in the works, the requirements on licensure that enter? And then also, what happens on chip security act? Does it make it through? Does it actually get through a house?
Speaker 7:Great momentum. Senate, TBD, too early to say.
Speaker 1:Okay. That's a great take because I feel like right now, today, I would be more worried about a CCP controlled large language model, transformer based large model just spamming The United States Internet and social networks with a bunch of AI slop that's slightly anti capitalist Yeah. Than
Speaker 3:Which is happening.
Speaker 1:Than Xi Jinping querying, please invade Taiwan. I don't think that the I don't think that the When
Speaker 3:Jinping is in is in
Speaker 1:Don't make any mistakes.
Speaker 3:Invade Taiwan. Don't make any
Speaker 1:Don't lose any troops.
Speaker 7:Yeah. Make it better.
Speaker 1:Yeah. Make it better. But yeah. I I I I think that that's maybe even even it's more of a clear and present danger today.
Speaker 7:That's right. Which is interesting. By the way, that's TikTok. That's TikTok today. If you're opening up TikTok, it's not AI, but it's the soft power component of China's influence over America.
Speaker 1:Yes. And being able to and being able to train that model, which is large and is probably the next version does require a lot of NVIDIA chips, was probably trained on a lot of NVIDIA chips, doesn't have the same quantifiable, you know, oh, this many parameters, this many gigawatts, this this But many tokens went if it gets 1% better you have control over it, it is it is a risk and it should and it and it should be considered.
Speaker 3:Last question. Any any chatter on the ground in DC about the Windsurf Google deal or are they gonna find out next week on LinkedIn?
Speaker 7:So funny. I had conversation over the weekend with somebody who's part of this, like, neo grandeisian movement, which is to say a very sort of Lena Khan orientation. And I asked her, I said, what are people waking up to this? Like, what's going on? Why is nobody talking about it?
Speaker 7:And her only answer to me was stay tuned. So my only answer to you is stay tuned.
Speaker 3:Mhmm. Ominous.
Speaker 1:Last question on the TikTok sale. Polymarket has TikTok sale announced in 2025 at a 35% chance right now. And TikTok banned in 2025. I guess it was already banned, but it's just like been Yeah. Forcing it.
Speaker 1:But have you been hearing anything on or do you have any any any interesting takes or insight about what might happen to TikTok since we just landed on this topic randomly? I don't know. Yeah. We didn't prep this.
Speaker 7:I mean, there's no political demand for it. There's no constituency who's making the argument of because if you were pro TikTok man, you got what you wanted in theory, not enforceable,
Speaker 8:but you got
Speaker 7:what you wanted in theory, and you've now taken the win and you've gone home. And if you're anti TikTok ban
Speaker 1:What about what about my American flag toting Mag seven CEO Mark Zuckerberg? Is he not a constituent that wants TikTok banned?
Speaker 3:I think it's If he's If he comes out too publicly pushing for that, it's like an anti trust nightmare.
Speaker 7:It's it's That's exactly right.
Speaker 3:I mean, like the the whole TikTok story proves that you potentially can build a new social app if you're willing to spend or at least you could rise of vertical video. You could in that moment Yeah. Create a meta competitor if you're willing to spend $20,000,000,000, you know, incinerate, you know, incinerate $20,000,000,000 or whatever they did to to just spend money to acquire all the users and build your own Yeah.
Speaker 7:That's exactly right. And there is nobody on the ground in DC who's using their limited lobbying dollars for the TikTok ban. What Zuck wants is better data construction, better data center construction. Right? Sure.
Speaker 7:Fix the energy policy in this country. And it's by the way, it's a it's a zero negative sum system. Can You only work on so many things during every congressional term, every admin term.
Speaker 1:Wait. So negative sum, not zero sum?
Speaker 7:It's even worse. It's even worse than zero sum. It's everybody's gotta lose. It's even worse. Zero sum system.
Speaker 1:It's whoever loses the least wins.
Speaker 7:Is unfortunately true in politics.
Speaker 1:Welcome to the swamp. Zucks says he's building a one gigawatt cluster aiming for a five gigawatt cluster.
Speaker 3:This should count as a three peat because you've told
Speaker 1:me three
Speaker 3:times now. Last last question.
Speaker 1:Question. This
Speaker 7:is fun, man. I know. I appreciate it. I'll I'll take
Speaker 1:the three feet. He said he said five gigawatt cluster in a few years, in several years. That feels further out than most of the AI hyper accelerationists. Is that an energy policy thing? What are his clear asks?
Speaker 1:Like, what what would I mean what would what would he wanna change in Washington around energy policy?
Speaker 7:This is a huge energy policy problem. Energy policy is is annoying because it happens both at the federal level, but also at the state level and even at the local level. Right? You get things like zoning. If you guys read the abundance book, you get things like zoning that impact you at the very local level.
Speaker 7:And the critique on the left right now for a lot of these questions is hard it's a hard one for these folks to work on is, gosh. Look at all the environmental problems of building the data centers near communities and so on and so forth. And I would expect that in an Ocasio Cortez administration or a Buttigieg administration to be a big problem in, you know, four years. What Zuck wants today is make it easier for me to build, right, reduce regulation at the state and local level for me to actually construct data centers. Let me bring new nuclear reactors online, right, bring new sources of energy online faster in this country, and and and set one federal standard to regulate many of the rules such that you don't have different states and different localities who all have patchwork systems.
Speaker 7:Because if you need multiple people to coordinate all at once, that's where you get these long timelines and complexity.
Speaker 3:It's gonna be the Delta smelt versus super intelligence. That is that is really the battle to watch.
Speaker 1:That's wild.
Speaker 3:Great having you on Zach.
Speaker 7:Thanks for having me.
Speaker 3:Glad to have you on again very soon.
Speaker 1:We'll talk to you soon.
Speaker 7:Thanks. Have a
Speaker 3:great day.
Speaker 7:Take care.
Speaker 1:Well if you're looking to pick up a hitter and you're heading to Washington go to getbezel.com. Do not bezel this is splash with a barrel. Is available to source you any watching the planet you can go to your bezel concierge and say I'm heading to Washington DC I'm talking to the big dog Talking to the big man. I'm going to Mar A Lago and I need a hitter and they will hook you up. Go to getbezl.com.
Speaker 3:And don't If if you get a meeting with Jensen, show respect. Yes. And wear an RM.
Speaker 1:Wear an RM. I wanna talk about the history of Richard Mel. It's fascinating. There's a I found a good thread. I also did a chatty pity deep deep research report.
Speaker 1:I found an interesting by
Speaker 3:the way. Yeah. Little little note in there. I forget what the line was but we said, it's the cold emails. The the warm intros.
Speaker 3:The deep research.
Speaker 1:The deep research. Yeah.
Speaker 3:And the deep research for the show in some instances.
Speaker 1:Is literally deep research. So, the watch business here says Richard Mill has no history, no tradition and looks like a Happy Meal toy. So, how did it become a $1,700,000,000 brand in twenty years selling watches that cost more than a Ferrari? Here's the wild story. And so, very very interesting story.
Speaker 1:Most the thing that popped out to me was that there is a So
Speaker 3:that does not look like a Happy Meal toy.
Speaker 1:I think it looks fantastic. So I will not take global juggernaut of ultra luxurious watchmaking. They they call it the billionaire's handshake in elite circles. And so he was born in the South France in 1951. Richard Mel is the name of the both the founder and the company.
Speaker 1:He became obsessed with precision machinery and fast cars at an early age.
Speaker 3:Yeah. This one does.
Speaker 1:As a teenager, he was such a motorsport enthusiast that he would take the train to Monaco for Grand Prix weekends. Even sleeping trackside to snag a prime view of racing legends like Jackie Stewart.
Speaker 3:That's probably not possible anymore. If you try to sleep.
Speaker 1:Yeah. You'll in the track. They're like, you can't be homeless
Speaker 3:in Monaco. Where's where's your $50,000 wristband? Exactly. That you
Speaker 1:Yeah. But I mean back in the fifties, I mean racing and even f one was a total like, it was just like a bunch of dudes being guys basically. It was not it was not an it was not like heavily sponsored, heavily organized like I don't even know if the FIA existed at the time. Anyway, so Jackie Stewart called the Nurburgring the green hell because it was so demanding and it stands to this day. It's a great quote.
Speaker 1:And so, in 1967, he is 16 years old and he is Richard Mill is there and he witnesses this famous crash, Ferrari driver Lorenzo Bandini's car burst into flames right in front of him, and the incident left a vivid impression of the extremes of engineering and danger in racing. So he winds up joining the in 1974, he joins a small watchmaker, Fin Hor. And then in the nineties, he'd become the head of watchmaking at the Parisian jeweler, Ma Boussin, where he successfully launched a watch line for the firm. And so, had extensive experience handling luxury jewelry and fine chronographs, but he was dissatisfied. In Mill's own words, working with others meant he was often held back from creating timepieces that could break boundaries.
Speaker 1:He felt the watch world was too conservative, too boring, and too self centered, as he later put it. And, he longed to push design and engineering far beyond the status quo. By the late nineteen nineties with decades of industry know how under his belt, he was nearing 50 and facing a now or never moment. He decided to create his own watch brand as a sort of fiftieth birth fiftieth birthday present to himself. One that would realize his wildest ideas without compromise.
Speaker 1:So in 1999, he's cofound his company. He has a trusted friend. They established this new firm, and Audemars Piguet, they partner with the high with the R and D firm, the R and D arm of AP, which is Renaud Epapi, a r r and p. And they get this legendary engineer, Giulio Papi and Fabrice Deschanel, to help turn sketches into reality. So AP got a small stake in the venture, but otherwise
Speaker 3:10%.
Speaker 1:Yeah. They own about 10%. So they own like pretty much everything. So the whole idea was to apply the cutting edge materials from Formula One, aerospace, and other advanced fields to high horology.
Speaker 3:To be clear, this is the opposite of a outsider story. This is an insider Yes. Leveraging every possible advantage that he has Yeah. But then winning on massive scale and effectively doing the impossible. Yeah.
Speaker 3:Because for for most people for most people today if you said, I wanna start a luxury watch brand. You could raise a billion dollars and Fair. It would be very difficult to do it. That's why Rolex and Podtech and our Remedy's brands actually end up being very valuable is the amount of money that you would need to incinerate to try to recreate a brand with legacy like that. A brand that could be 200 years old.
Speaker 3:The other thing is time. Right? It's I agree. You can create a luxury brand but it's not that appealing as an investor or founder if it's gonna take you a hundred years because you won't be around to see Yeah. To see your, you know, really achieve your goal.
Speaker 1:I was texting with Sean Frank from the Ridge Wallet, as CEO of Ridge Wallet today, this morning. And and I was kind of explaining to him in in this piece that Richard Mill is considered like an like an overnight success, like the startup, or like the the the massive quick winner in watches. And he's like, only in only in fine watchmaking is grinding for twenty years to become successful, like an overnight success. Because every other firm is hundreds of years old. Yeah.
Speaker 1:Basically. And so, they they struggled a ton to actually build the first watch, because they wanted to build a three-dimensional object showcasing this extreme technology, and they wanted to create a racing machine on the wrist.
Speaker 3:And they did?
Speaker 1:And they did. And so, their blood and tears in the startup phase, innovations that took a long time to become reliable, resulting in years delay for the launch of the first model. It took them two years from the company's founding to perfect their inaugural watch.
Speaker 3:Which is not even actually that much time.
Speaker 1:Long time if you think about I raised money and and the seed investor is like, so when are you guys launching? You got twelve to eighteen months of runway. And you're like, it's it's gonna be two years.
Speaker 3:Yeah. But I think true r and d, true product development can take easily take
Speaker 1:A completely different.
Speaker 3:Even if you're moving really really quickly.
Speaker 1:OpenAI, Figma, Plenty of other companies Figma
Speaker 3:was like four years to build a piece of software.
Speaker 1:Plenty plenty of great companies took a long time to build like and actually deploy the thing. But it's certainly a narrative violation around like the like the, okay. I got into YC, I'm launching my company in three months, launch early, get feedback, you know. It's just like
Speaker 3:Aurora was a similar story.
Speaker 1:Yeah. How long
Speaker 3:was it? It's it probably was eighteen months. Yeah. And it took, you know, an incredible amount of back and forth with the design firm that we work with and and Charlie who really led the product development. And, yeah.
Speaker 3:And then you have a certification process and and again, I think good things take time. So eighteen months doesn't doesn't really sound crazy at all.
Speaker 1:Twenty four, bro. Twenty four. Two years. So But he was prepared for this. He'd plunged into the project knowing it would be exhilarating, exciting, challenging, fun, and a lot of hard work.
Speaker 1:Finally, in 02/2001, the Richard Mill brand unveiled its first creation, the RM zero zero one Tourbillon, and immediately sent shock waves through the conservative Swiss watch industry. Only 17 examples were made, but that was enough to make history. It wasn't just the bold tonneau shaped case. I was looking for the word of the shape. It's the tonneau shaped, and the skeletonized dial exposing futuristic guts that grabbed attention.
Speaker 1:It was the audacity of the whole package. It was high complication. It had a manual tourbillon, which is a little spinning thing that keeps the time more accurate when your wrist is moving around. Packed with technical innovations, a base plate of reinforced carbon fiber, a torque indicator, and a dynamometer. Dynamometer to monitor the movements performance.
Speaker 1:Dynamometer. Sounds like some American dynamism. I love it.
Speaker 3:How how American dynamism pilled are you?
Speaker 1:It's really dynamometer. Dynamometer. Yeah. If you don't have a dynamometer on your wrist and you call yourself an
Speaker 3:American I just did the math. It's they've they've averaged making 2,500 watches a year since their founding.
Speaker 1:Wow.
Speaker 3:So low volume.
Speaker 1:Yep.
Speaker 3:But but extremely high margin.
Speaker 1:Of all time. Yeah. Crazy. And also, they, you know, the engineering stuff really comes through. Most watches have forty eight hour power reserve.
Speaker 1:RM went with 72 power reserve. And there are some crazy, crazy stories here. So this is where the conspiracy theory comes in. So the price tag
Speaker 3:Jipan, I gotta tell you.
Speaker 1:Yeah. Please.
Speaker 3:One of our one of our dear friends who I will not name, who is a is a size lord and capital allocator in real time just sent me a picture of his RM on his wrist while a helicopter is taking off in the background.
Speaker 1:Beautiful
Speaker 3:beautiful piece.
Speaker 1:It's fantastic piece. Okay. So, anyway. So, RM launched and it was a $135,000 for the first watch this guy will ever launch is in 02/2001. A $135,000.
Speaker 1:This is twice as expensive as the next most expensive tourbillon. So just take the tourbillon watches are already really expensive. It's incredibly complicated. Take the the most expensive one and just double it. And and so there is a so so people are protect fans.
Speaker 1:They're shocked. They're bluntly asked Richard Mill why he thought anyone would pay such a sum for his newcomer watch. And Richard Mill said, very easy because we are not competing with Patek Philippe nor anyone else. In other words, he's playing in the league of his own. So
Speaker 3:So that that line doesn't typically work on a pitch call. Least in the software business.
Speaker 1:We're not competing
Speaker 3:you're you're building this you know, database company. You're charging twice as much as a full enterprise snowflake deployment. And you you you're gonna win because you you say you're not competing with them?
Speaker 1:Yes. Yes. And so, orders came in as soon as the first watches went out the door. But, there is this interesting conspiracy theory, which is that there was a mistake. And the reason that they are so expensive is because the someone
Speaker 3:He was doing a print ad.
Speaker 1:Yes. And so Okay. So a rumor has floated around that Richard Mill's first advertisement which was in the Financial Times, baby. You know it. You love it.
Speaker 1:In the pinch sheets. In the so he buys an advertisement in the Financial Times and the advertising department misprints the price.
Speaker 3:They added a zero.
Speaker 1:They added a zero. He wanted to sell the r m zero zero one for $13,500. They printed in the ad a $135,000, 10 times the price. And what's interesting is that so the ad goes out according to legend, the RM team is like, you guys botched it. Like, who's gonna buy this?
Speaker 1:It's only a $13,000. Don't you try to sell it for a 135? This is crazy. But then they start getting calls. I gotta have it.
Speaker 3:I gotta have it.
Speaker 1:A $135. I I I've been I I have a $135,000 burning a hole in my pocket right now. And I would love this watch. Want it on my wrist. And so, Mill received so many inquiries at that price.
Speaker 1:He decided to stick with the higher number. And so this is why it's a conspiracy theory is because Richard Mill as a brand denies that this ever happened. But the legend Obviously
Speaker 3:terrible. Terrible. If it came out there. Yeah. They wanted to make a $13,000 watch and then they axe accidentally
Speaker 1:charged
Speaker 3:a 135 and then they look around, the orders are coming in. Exactly. They're like, wait. We we just, you know, a thousand x our our our, you know.
Speaker 1:Yeah. But this is a classic example of of what's called a Veblen good. So with in economics, typically, the as price increases, demand decreases if supply is is constrained. So if you raise the price, people buy less. With a Veblen good, a higher price actually increases demand.
Speaker 1:And it's it's reserved for perfect examples of this, like luxury goods where it is a status symbol. And now when you see the billionaire's handshake going on, you know that's a $100,000 watch at least, potentially Pricing much
Speaker 3:is a intimately tied with the the way in which people feel about a product. Right?
Speaker 1:100%. 100%.
Speaker 3:You know, for for a good a good example of this is the GT four RS. Yeah. It's incredible to drive, but people want it maybe like, I know very few people that can honestly say if if price was was no
Speaker 1:Yeah.
Speaker 3:Wasn't part of the equation, would you want a GT three RS or GT four RS? There's like an aesthetic component as well. But but even though many people, if they just drive both cars, find that the mid engine version is is is fantastic Yeah. And enjoyable. They'll still Well,
Speaker 1:GT three for the for the status. An even stronger example in the car world is probably like the Lamborghini Reventon or the Lamborghini Veneno. Are you familiar with these? No. So these are extremely limited Lamborghini releases, and they're built on the existing platforms.
Speaker 1:So they take a Huracan, and then they restyle it, and it looks way more extreme, way more and they tune it, and they improve it as much as they can. But these limited Lamborghinis sell for millions of dollars. And really, like you're buying it because it's signaling that you have that much money. I mean, and to some extent, a Lamborghini is a a Veblen good to begin with, but this is like the most extreme. And of course, a Veblen good is not purely binary.
Speaker 1:You can be more Veblen than the other and more more of the more of the decision making can be driven by the higher price than
Speaker 3:than
Speaker 1:others. Anyway, Richard Mill's conviction proved infectious despite industry skepticism, the RM one found buyers almost immediately. Orders came in and GQ later observed Richard Mill's very existence knocked some of the stuffiness out of luxury watchmaking by showing that expensive watches don't have to be stayed or classical. And so Yeah.
Speaker 3:They they they've always been controversial, but for what for what RM does, they do it extremely well. Yes. It is they they own their category. Yes. They truly don't have competition.
Speaker 3:Yeah. Any other watch that I've seen that that tries to emulate what they do, it does look like a cheap knock off.
Speaker 1:100%.
Speaker 3:And, It it is true. You know, they basically Anytime you have a situation where where insiders come into an industry and have every possible advantage, but then absolutely hit like such a grand slam. You just got to appreciate greatness.
Speaker 1:Totally. And I think that what matters with the story of the actual watches, like the RMs, is that it's not just a knockoff Nautilus with twice the price. It it's differentiated on price. Yes. But it's also differentiated on shape.
Speaker 1:There's no other major watch that looks exactly the Tonneau shape, in my opinion. The the putting skeleton eyes so forward doesn't exist anywhere. So that's like the fourth the third or fourth point. And then the last point that's interesting is that every luxury watch brand, they're not telling you this is a rugged watch. And Richard Mill was all about ruggedness.
Speaker 1:So there's an interesting point in here. He says, one of his breakthrough strategies in establishing credibility was to demonstrate the ruggedness of his high-tech creations in a way that bordered on outrageous outrageousness. At watch fairs and presentations, he would literally take a prototype and throw it on the ground to prove it wouldn't break. This stunt wasn't just for shock value. It was making a point that a Richard Mille wasn't a delicate museum piece, but a luxury watch that could withstand anything.
Speaker 1:The company engineered every component for durability. Cases were curved for strength and comfort. Movements were torture tested with massive g forces and stocks. As one company monograph described, prototypes were subjected to simply brutal trials, including a device nicknamed the goat's foot. A heavy pendulum hammer that smacks the watch from all angles.
Speaker 1:If a part fails, Mills' team iterated until it survived. The result was that these extravagant watches could truly be worn during
Speaker 3:Which is why sensitivity. This is why people see somebody playing tennis in an RM, and they're like, oh, I can't believe they would they would they would be, you know, playing, you know, doing some sport with a watch like this. And it says and it's like, no. It actually was designed to do this and it does it very well.
Speaker 1:Yes. The tennis thing is a is a very interesting example. The first athletic ambassador was f one driver Philippe Massa who joined the Richard Mill family in 02/2004.
Speaker 3:Related to to Massa.
Speaker 1:Massa, he's like, yeah. The last name, it has two s's.
Speaker 3:He flipped it. It was so powerful he flipped it.
Speaker 1:And so, in practice sessions and races, he wore a prototype RM chronograph to see how it held up under high g forces and vibration. So even if it's not gonna destroy the watch, it still might throw off the time. And actually having a a watch that could hold up, maybe it's not in maybe it's not, you know, remarkably important for a watch, but it's a cool cool stat. It's novel. It makes it special.
Speaker 1:It makes it different than everything else. But this partnership paid off dramatically during a violent crash at the two thousand four Hungarian Grand Prix. Mas' car was wrecked, but both the driver and his Richard Mill RM six Tourbillon walked away unscathed. The watch's carbon nanofiber movement proving its toughness in extreme conditions. And then the other the other tennis example that I wanted to get to was in 2010, after years of experimentation, the brand introduced one of its most famous collaborations, the RM zero two seven Tourbillon with tennis icon Rafael Nadal.
Speaker 1:This watch became legendary for its absurdly low weight, under 20 grams with the strap achieved through lithium alloy movement and skeletonized design. Nadal, a fierce baseline player, put it through its paces in Grand Slam matches. In fact, Nadal reportedly broke five pair five different prototypes of the r m zero two seven. That's probably like $2,000,000 worth of sales.
Speaker 3:It's not like the prototypes actually cost the the retail price, but but yeah.
Speaker 1:Remember, these things are 99% margin apparently, if if the rumors to be believed. But and so this allowed them to test it and and the engineers perfected it to withstand his powerful swings. The finalized watch accompanied Nadal to victory at the twenty ten US Open, visibly strapped to his wrist as he hoisted the trophy. The sight was astonishing. A $525,000 tourbillon on a sweat soaked wristband surviving every smash, every serve.
Speaker 1:It sent a clear message that wearing a Richard Mill was compatible with even the most intense athletic pursuits. A perfect melding of luxury and performance.
Speaker 3:Per another perfect example, our our friend who sent us this video is actively heli skiing. Really putting putting it through its paces. Is
Speaker 1:he actually?
Speaker 3:Not at this very moment in time but but
Speaker 1:the recent That's hilarious. Okay. And and then of course once once Richard Mill became kind of dominant in sports, they wound up you know breaking out slowly. So in in 2011, this is over a decade after into the build up of the business, they partnered with Hollywood actress Michel Yo, and co designed the RM zero five one tourbillon that featured a diamond set phoenix motif. They did a collab with Natalie Portman on the RM nineteen zero one with a dramatic spider design.
Speaker 1:And they're just doing all these like anything they can do to create something that's extremely unique, identified with like equestrian polo players, yachtsmen, extreme skiers. So just really focused on this brand and willing to do anything even if it means building something from scratch like a piece unique. Uncompromising functionality under real world stress, is just it's a promise that no other brand is even trying to make.
Speaker 3:Yeah. They own their category.
Speaker 1:They they found a new category and then they dominate it.
Speaker 3:It's absolutely beautiful. I'm pissed there's no Harvard case study, Harvard Business School case study on the business yet.
Speaker 1:There are some GQ articles. There are some Hodinke interviews.
Speaker 3:I need a I need a proper SWAT analysis.
Speaker 1:For sure. For sure.
Speaker 3:Guess we should go to Grok four heavy and say, write a Harvard Business School case study on Richard Mill. Yeah. Please include a SWOT analysis. Be good. Don't make any mistakes.
Speaker 1:That's kinda what I did with deep research. I basically asked for that but
Speaker 3:No. It it's just such such an incredible story because it's it's effectively It it was incredible execution all the way from founding until today.
Speaker 1:Yep.
Speaker 3:But still doing something that most people would have said was completely impossible.
Speaker 1:Yeah. No discounts ever. 5,000 watches per year. Only sold in elite boutiques, Dubai, Monaco, Beverly Hills. Partners with athletes in rich sports, f one tennis golf.
Speaker 3:To be clear. Yeah. Pretty. There's a certain podcaster that we really wanna get. We want him to start, you know, because he gets really into his shows.
Speaker 3:So having having, you know, an Yeah.
Speaker 1:I'm on the wrist. Makes sense because of the weight.
Speaker 3:And the performance. Yeah. He's putting up five six seven hours in the studio.
Speaker 1:But it gets toy it gets hate. They call it a Happy Meal toy. They call it the rich man's Invicta. They say it looks like plastic. They say it has a lack of heritage.
Speaker 1:It's only 24 years old. But it doesn't matter. RM is here to stay. It's redefining luxury in real time. Anyway, fun story.
Speaker 1:If you're planning to build a new watch brand, get on linear, linear.app.
Speaker 3:Is a
Speaker 1:purpose built tool for planning and building products. Meet the system for modern software development. Streamline issues, projects, and product roadmaps. Start building at linear.app.
Speaker 3:Linear really is the Richard Mel of of product management, you know, platforms
Speaker 1:People and have been saying it.
Speaker 3:We've been saying
Speaker 1:it since
Speaker 3:about ten seconds And
Speaker 1:when you go to sell a watch online, gotta use Numeral HQ sales tax on autopilot. Spend less than five minutes per month on sales tax compliance at numeralhq.com. Anyway, David Protein, crazy stuff happening there. I have I still don't know
Speaker 3:what's going on.
Speaker 1:I don't really know what's I I have some people texting me with their theses. I wanna hear yours, but let me kick it off with some basic background. So David Protein announced yesterday, our commitment to protein has led us to a strange place, boiled cod. We're selling it now. And a week ago, it seems like Peter Rahal, the CEO, friend of the show, was teasing this by saying, what should we make next?
Speaker 1:We will make what wins. And he said, cookies and cream, salted calmer, caramel, key lime pie, frozen cod, and cod lost by a huge margin. But they made that. And Ryan Harmon says cod lime pie. So maybe he's in on this stunt.
Speaker 1:I I'm sniffing a stunt here. We'll figure it out. We'll get to the bottom of this. So Andy Rosenberg says, David teased the boiled cod product on its website months ago because 75% of the calories from David come from protein, and the only thing that's higher is boiled cod, which has 85% of its calories coming protein. The Built bar is at 52%.
Speaker 1:The Quest bar is at 47%. And the Bear Bells, which is delicious but it's more like a candy bar, is something like 40%.
Speaker 3:And so That's your dirty little secret?
Speaker 1:Oh, yeah. If I'm picking between David and Bear Bells, it's like, you know, how hard am I going today?
Speaker 3:Well, let's let's be You you you've been known to have three in a day. So you might do two Davids and then a Bear Bells.
Speaker 1:True. That's a little treat. Also the Bear Bells there's some that like they they they get you down the funnel of like, this one's like actually a protein bar, and then you get like, well, like, I tried them all and like the one that's just like pure caramel tastes the best, so I'll stick with that. And then you read the back of the label for the Bear Bells caramel one, and you're like, wait, this is actually just a candy bar. But it's delicious and it does have some protein, and they have a great product.
Speaker 1:I think Bear Bells is fantastic. But there's a time and a place for everything. Sometimes you gotta eat boiled cod, apparently. But there's a big question. So they put up an out of home ad campaign.
Speaker 1:Hopefully, did that on adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe. I don't know if they went with AdQuick.
Speaker 1:They should have. But the ad says boiled cod. It has a picture of the of the cod and it appears to be in New York with a gray is that a Boxster driving by? That's some
Speaker 3:So I think they're actually selling cod.
Speaker 1:You can just buy it. Are they
Speaker 3:actually You can just buy it.
Speaker 1:Okay. So first off, my reaction. This sounds gross. I don't like this. I don't care how high protein it is.
Speaker 1:I'm not into it. So what's going on? They bought a billboard, hopefully mad quick. And it feels like maybe a stunt of some sort, but they are such a young company. This might actually confuse people because people are still just learning about David.
Speaker 1:But I was talking to a friend of the show, and he was saying to me that, you know, at a certain point, a little inside scoop on boiled cod view from perspective of an earned media earned discussion as opposed to paid media slash ads. A segment of TBPN, like this one, proves that. If people are talking about a company, that's usually a win, especially when the convo is about cod having the highest protein to calorie ratio of any food. David bars are second only to boiled cod. Can't beat them.
Speaker 1:Join them. And so that's an interesting take is that, hey, all earned media is good media. But if this gets out of control and all of a sudden people think of David Bars as cod flavored and when they go to grab the next David Bars, they're like, that could be a risk. It
Speaker 3:seems If like it's going a I pack of these, will you eat
Speaker 1:one the show. I test it for We'll
Speaker 3:work on it.
Speaker 1:And then I'm
Speaker 3:holding you to that.
Speaker 1:And then the other question is like, it seems like they're in a battle with some other brands over their supplier, David Barr. It seems like they acquired their their supplier. The key ingredient supplier makes EPG or esterified prop propoxylytic glycol, a fat alternative developed by Epogee and made from modified plant based oil. It's a controversial ingredient choice because it's less natural than raw meat like boiled cod. Boiled cod seems like the other end of the barbell, but I need to know more.
Speaker 1:And I'm and I'm curious to know how this played out, how this is working and are they seeing results from this campaign because it's it's exciting stuff. It's cool. Anyway, if you're if if if they do wind up buying that EPG supplier and they need to get some new clients, they gotta get Okay. Well, they gotta get on Adio. Adio.
Speaker 1:Customer relationship magic. Adio is the AI native CRM that builds scales and grows your company the next level and get started for free. In other news.
Speaker 3:What else we got?
Speaker 1:We got bunch of stuff. We got fin AI, the number one AI agent
Speaker 3:for customer service. You were on
Speaker 1:a one of the performance benchmarks. Number one in competitive bake offs. Number one ranking on g2fin.ai. High yield Harry says this is gonna end in tears. He's quote tweeting Jim Kramer, a new acronym for the meme stocks To that just won't
Speaker 3:park. Park.
Speaker 1:Park your money
Speaker 3:in Applovin, Robinhood and Coinbase. The four wolves of this bull market.
Speaker 1:They are the four wolves of this bull market.
Speaker 3:How's Applovin doing? I haven't you haven't seen people posting charts, but
Speaker 1:Well, there was all that conspiracy theory that like they weren't making any money, but we talked to Sean Frank and he was like, I'm using Applovin. It's like it's not maybe not the best, it's pretty good and I'm actually paying them, so it is
Speaker 3:Year to year to date, they're flat. They're still a $118,000,000,000 business.
Speaker 1:Okay. Okay. Well, that's pretty good. Interesting. In other
Speaker 3:Yeah. The 2024 revenue was 4,700,000,000.0. We'll see
Speaker 4:what they
Speaker 3:put up this year. Yeah. We got got We had There was an interesting post here. So this founder that has been beefing Yes. Sean Mcguire.
Speaker 3:Sean Mcguire, creating a bunch of websites about him, emailing his his boss, emailing his LPs, things like that. Has been going around claiming that he's a portfolio, a Sequoia Mhmm. Portfolio founder. When in reality, he got a 10 k scout check and then his company shut down. So kind of throwing stones from a from a bit of a a glass house there.
Speaker 3:But yeah, if you get a Scout check from a, you know, venture Scout from a fund, that does not qualify as getting an investment from that company.
Speaker 1:Yeah. That's true. This is a violation of the social contract in Silicon Valley. Yep. And Sean clearly looked this up and was like, wait, did we invested this guy a long time ago?
Speaker 1:Dug through it. And
Speaker 2:so I mean, the
Speaker 3:whole thing with the whole thing with Sequoia is like, they at this point, they have a lot of companies in the portfolio. But I think if you if you actually look at the stats, it's like, that, like, 99% of companies that
Speaker 1:they are operating.
Speaker 3:Are, like, still operating. Yep. And so he would know he would know if they had done the deal.
Speaker 1:So Sean really wrote some How much does Sequoia invest in your company? What partner led the investment? And what happened to your company? Can you please enlighten me? The the answer is Sequoia invested zero.
Speaker 1:Sequoia scout invested 10 k and the company failed. Failed. Rough. Well, don't get in the mud pit if you don't wanna get muddy.
Speaker 3:If you hate mud wrestling?
Speaker 1:If you go in the mud pit of x.com with Sean Maguire, you're gonna get muddy. He's gonna
Speaker 3:That's right.
Speaker 1:He's gonna he's gonna roast you.
Speaker 3:Brian Singerman has a new fund. Yes. PT is a big backer. The TechCrunch is reporting.
Speaker 1:So Interesting strategy. Did you read this Yeah. I was
Speaker 3:gonna get into it. So former Founders Fund GP, Brian Singerman and co founder and managing partner of Quiet Capital, Lee Linden are seeking over 500,000,000 for a new fund called GPX. Love the name. Three people familiar with their strategy told TechCrunch. So, sounds like TechCrunch is scooping them Mhmm.
Speaker 3:Which I'm sure they're not happy with. But it makes sense that these kind of things get out. So Yep. GPX uses a two pronged strategy. The firm will invest approximately 20% of the capital into funds managed by emerging VCs who are targeting pre seed and seed stage startups.
Speaker 3:And the remaining capital will go towards partnering with emerging managers. The same emerging managers you would imagine on leading later stage investments most most likely at series b of their breakout companies. So often times, let's say a pre seed focus or early stage fund does a pre seed round for a company Mhmm. End up growing really quickly. GPX can come in and and basically provide the capital in order to help that manager actually lead later rounds Yep.
Speaker 3:Versus that manager going having to raise an SPV
Speaker 1:from Which is what's people. And it's kind of
Speaker 3:like it's harder to win it's harder to actually win the deal because it it can take a lot of time. Yeah. The capital is not actually fully ready to deploy.
Speaker 1:I've been in that situation where the early stage seed fund seed fund is like, you know, yeah, we'd love to lead this for next round. Just give me six months to like, you know, actually close all the money. I'm gonna go around, and then you have this weird like, I gotta talk to this person, then I gotta talk to you. And then I gotta talk to this person, gotta talk to you. And then I gotta talk to this person, and it's just so much back and forth.
Speaker 1:So if you have this Fund of Funds backer who just lets you stretch one round further. Really really cool concept, and I think it could work out really well. Yeah. Brian Sigman. Great great investor.
Speaker 1:Great person. I always had a fun chat with him when I was at Founders Fund. So excited to see him launch this fund and kind of get it going with a new strategy, because it seems really cool. Anyway, we should talk about Eight Sleep. We launched a
Speaker 3:New ad today. Let's Let's play play
Speaker 1:I wanna play our our advertising for
Speaker 3:Eight on is the big challenge for our production team
Speaker 5:Yes.
Speaker 3:Is just playing videos on the show. They can do everything else.
Speaker 1:It's pretty complicated.
Speaker 3:But it it's not easy. It's no joke.
Speaker 1:We got this. So let's play the ad and then we will tell you more about Eight Sleep.
Speaker 4:We're gonna
Speaker 1:People see the three hour streams, the hundreds of guests, the thousands of clips.
Speaker 3:For us, it's the work that happens off mic.
Speaker 1:The cold emails, the warm intros, the deep research.
Speaker 4:Sleeve the shot edge.
Speaker 1:Whether it's tracking down a viral poster Or interviewing a Fortune five hundred CEO. Staying sharp is non negotiable. Podcasters sleep on It's Eight so funny that we did the white suits that day because it was just complete chance that we were in white suits that day.
Speaker 3:Complete chance. It's it's funny system some backstory on this. Andrea was on x ing. This is what you get when you're allowed to have creative freedom with advertising. Can't wait to see more of these.
Speaker 3:Well, more are coming so you can look out for that. But the cool thing here with the Eight Sleep team, we didn't tell them the concepts for the shoot. We didn't give them notes on the shoot. Yeah. All we did was actually send them this final cut that we posted.
Speaker 3:Yeah. And they were like, this is awesome. And that's part of part of what we're doing. I mean, we we we make these for fun. Yeah.
Speaker 3:And it's a good creative process for the team. Yeah.
Speaker 1:And it's Thought that
Speaker 3:it was it was cool.
Speaker 1:Yeah. It's also like an homage to the other Eight Sleep partnership announcement between Charlotte Claire and Eight Sleep that they clearly spent a lot of time concepting and shooting. And we were just like, let's match that one for one and it'll be a lot of It'll be cool and it'll also be funny. And so we had a lot of fun shooting that. So you can go to 8sleep.com to get started.
Speaker 1:Five year warranty, thirty night risk free trial, free returns, free shipping.
Speaker 3:Code tbpn..com.
Speaker 1:In other news, re industrialize is this tomorrow. Happening tomorrow. Yes. And they have been on an absolute tear posting interesting things. They said we exist to reverse The top employer in each state back in 1990, you can see the map is almost entirely green because almost every state, the top employer in each state was manufacturing.
Speaker 1:In 2024, the top employer is health care. And there's a few states that are holding on to manufacturing. A couple that are Utah's in retail. Nevada has been in hospitality the whole entire time, surprise, surprise, Staying strong. Hawaii is the top employer's hospitality.
Speaker 1:That makes sense. It's a tourist destination. But, you know, for a long time, America was a manufacturing powering powerhouse, and this is a really striking chart or visualization of what can happen in thirty four years of neglect, essentially. So Yeah. If you're headed to re industrialize, let us know how it goes.
Speaker 1:We couldn't be there because of travel schedules and whatnot, but I hope it's a fantastic event.
Speaker 3:And, we're very excited
Speaker 1:for everyone who's over there. Well, our next guest is ready to join us. This is Brian from Core Weave. We will be talking about the Neo Clouds and AI training and What it's like being a public company. Yeah.
Speaker 1:So good to meet you, Brian. How are doing?
Speaker 4:What's going on? Pretty good. Well, thanks for having me.
Speaker 1:Congratulations on all the success. Can you just take us through, like, a brief introduction and kind of maybe a little bit of history on the company, but kind then kind of where you are today? Because I I I imagine we can jump into a bunch of stuff. Most people are probably familiar. But
Speaker 4:Yeah. Sure. So first off, my name is Brian Ventura. I'm one of the founders. I'm the chief strategy officer of CoreWeave.
Speaker 4:I started out as CTO until they found me out. I've been demoted to chief strategy officer.
Speaker 3:It's Remoted. It's gotta be more fun. More
Speaker 4:it's demoted, dude. Definitely demoted.
Speaker 3:Well well, I I'm just saying like, you know, day to day, I I imagine you're you're, you know, that you still have the stress of, you know, running the business and and all that. But but but maybe you're not on call, which which would
Speaker 4:be Nothing's nothing's changed. They just don't let me write code anymore. Yeah. Which is probably better for everybody. But, you know, I'm the chief strategy officer.
Speaker 4:I I run a lot of product strategy, infrastructure strategy. I work with clients on big big deals.
Speaker 1:Mhmm.
Speaker 4:You know, probably half the company indirectly reports to me. Mhmm. So I'm on the board of directors, etcetera, etcetera.
Speaker 1:So Yeah.
Speaker 4:I've been I'm I've been involved in pretty much every aspect of the business, but I'm happy to talk about whatever you guys would like today.
Speaker 1:I wanna talk about naming every strategy. I wanna talk about the overarching strategy. Walk me through how you would think about defining the current strategy. What is the highest priority relationship with hyperscalers, new companies, creating a fluid compute layer? All the different, like, incentives, like, what what is top of mind for you on a day to day basis in terms of positioning CoreWeave against competitors or just broadly solving a problem in the market?
Speaker 1:Like, how do you actually break down these problems?
Speaker 4:So it's two things. Right? The the first is serving the customers and partners that got us here.
Speaker 6:Mhmm.
Speaker 4:Right? That's the big AI labs. It's the hyperscalers. Mhmm. It's the people that have an insatiable need for compute infrastructure.
Speaker 6:Mhmm.
Speaker 4:They're the ones that are blocked from delivering to their next customer, from growing their user base, because they don't have any GPUs.
Speaker 6:Mhmm.
Speaker 4:That has been it's been insane to be a part of. Right? It's because every time it increases an order of magnitude, you're like, it can't go again, and then it goes again six months later. Yeah. And, you know, I was listening to the show before.
Speaker 4:You're talking about, you know, Meta's five gigawatt data center campuses, etcetera. Fantastic. You know, it's like, we're headed there. Right? And I think that right now, it's a question of, you know, everybody's in a race and how quickly you can build that, like, that large.
Speaker 4:But it's also understanding what are the local constraints, what are the actual grid constraints, what are the supply constraints to be able to get there. You know, you run into things like labor constraints. You know, there's not enough electricians in the world to go out and build these things and timelines these people need. How do you modularize the data center construction? You know, everybody's kinda solving this as the planes in the air already.
Speaker 5:Yeah.
Speaker 4:Right? And, you know, it it's it's a race. You know, I I always say internally, like, I can always I can solve any problem with enough time or capital. Right? And a lot of times, you don't get both.
Speaker 3:Mhmm.
Speaker 4:So it's choosing, you know, what's the right path to go, you know, how are we gonna solve this for them. So that's that's kinda one side. Right? It's like, okay. How do we build to everything that they need?
Speaker 4:How do we understand what their demand's gonna be? And when you look at the the thing that I think the world misses is that everybody on the hyperscale side and spent, like, in our seat as well, like, we're looking at it going, we need to build x number of gigawatts of data center capacity. Mhmm. Right? Like, we know the demand signals are there, but the capital and the speculative capital isn't there to do it.
Speaker 1:Interesting.
Speaker 4:Right? It's I can go out and I can build x gigawatts of capacity for the next two or three years, right, from my balance sheet. But any more than that, and the demand doesn't show up, and I put my entire company at risk. Yeah. Right?
Speaker 4:So we're we're basically having to haircut the demand signals that we get and only build to a certain extent of it. And then by the time we get out there, we're in the same constrained position we're in today.
Speaker 1:Got it. Great. Talk to me about
Speaker 3:How how do you real quick. How how do you think so so it was 2019 that you guys decided to focus more on AI and and cloud and for Broadly. Is that correct, roughly?
Speaker 4:Yeah. So
Speaker 3:And the reason the reason I the reason I asked this is because I saw a company as you know, there's been a bunch of companies that were effectively came to the conclusion that you guys did, but maybe six five, six years later in terms of, hey, we're gonna sort of pivot away from, you know, bitcoin mining into AI because that's where the real growth is. And it feels like a lot of those company, from from an outside looking in, you know, it feels like those companies are gonna be at a massive disadvantage, but I don't know if I have if I have the right read there.
Speaker 4:Yeah. So we when we started out in 2017, we made the decision that we were never gonna be as good as the ASIC producer in mining Bitcoin. Yeah. Right? And the idea there was, you know, there's always gonna be something they don't release.
Speaker 4:It actually wound up being true. They had released, like, their low power mode. I forgot what it was called in 02/2018, and everybody found out that they were hashing 30% better power efficiency, the world lost their mind about it. Mhmm. And it was kind of like the, okay, we were actually right.
Speaker 4:Like, we were kind of we're paranoid about it, but we never actually knew until then. So, you know, we said, we're not gonna do it as good as them. Where is there a level playing field? And we thought there was a level playing field in GPUs. Yep.
Speaker 4:And we also thought, okay. If crypto goes to zero, the GPUs are repurposable. They're used for gaming. They're used for graphics rendering. Like, we could either sell them on the open market or we can build another service with them.
Speaker 4:Mhmm. What we were most surprised by is when we first launched our, you know, let's say, first non crypto product in 02/2018, 02/2019. It was a rendering service for an open source three graphics platform called Blender.
Speaker 1:Blender.
Speaker 4:We had like a thousand a thousand people sign up on the first day.
Speaker 1:Wow. Wow.
Speaker 4:Yeah. And I was just like, oh, boy. Like, there's a market here. People need this stuff. And, like, we had never expected it to be that large.
Speaker 4:And people would come to us and they sending us, like, support tickets saying, hey. Just wanna tell you it's so awesome. I was able to do so much more work because I got access to GPUs I've never had before.
Speaker 1:Yeah.
Speaker 4:Right? And that was, like, signal number one, and we're like, okay. We convinced our early investors. Like, we're gonna go all in on this thing. We're gonna use crypto to pay for it as we're building out more compute.
Speaker 4:And we set it up so that as we didn't have actual cloud or compute workloads, it would turn back to mining. Mhmm. And the mining would cover all of our fixed and variable expenses, and all of the cloud stuff was just upside. Yeah. Right?
Speaker 4:So we were able to show over time this, like, constant penetration or or kinda constant growth of our margin, which was really easy to grow. Right? We were able to lever the cryptocurrency into a massive resource base. So Yeah. The the timing played a lot a lot into our success there, and that we had that permissionless crypto revenue to lean back on.
Speaker 3:Yeah. But also just having having, I think, incredible foresight to some degree, which which you you're being a little bit more modest about it. But the fact that companies, you know, even I I saw a company that was getting pumped on X last week that is still in the process of transitioning from Bitcoin mining to, you know, some something that will look like a Neo Cloud. And the idea that you're gonna come into this market six years late and really be a a key player feels like a long shot.
Speaker 4:It's so I think it's even worse than that. It's even worse it's even worse than that because the talent pool is so small. Yeah. And to be successful as the technology has gotten more sophisticated and harder to run, you have to be the best in the world. Right?
Speaker 4:And, you know, we have some of our low level hardware engineers, they're amazing. Like, I've seen them, you know, solve problems that nobody even knew existed. They they identify the problem. They're able to say, okay. This is what this is what the problem is.
Speaker 4:They go back to NVIDIA, and they jointly develop solution for it. Right? That that's really important as you're building at scale. Right? You know, anybody can run a 100 or 500 or a thousand GPUs.
Speaker 4:But if you're running hundreds of thousands of these things, like, it's really, really hard to do, especially at high quality. Mhmm. Alright? So people think that there's folks that are twelve to eighteen to twenty four months behind us. Good luck.
Speaker 1:Really quick question. I have to ask, what's the story with the wheels behind you?
Speaker 4:Alright. So they're f one wind tunnel tires.
Speaker 1:Yeah.
Speaker 4:And we just did a so we're we just did a sponsorship with Aston Martin.
Speaker 3:There we
Speaker 4:go. We also executed a computer agreement with them. I'm Awesome. So excited about this one. You know, when I talked before about, like, the the way that we think about our first cohort of clients, it's the AI labs.
Speaker 4:The second is the enterprises. Yep. And I feel that if we can walk into Aston Martin and help them modern modernize their AI and ML stack in the most hyper competitive sport in the world with so much data and so many eyeballs already on it, we can do it for anybody.
Speaker 1:Yeah. Right? So So, yeah, being more concrete there, you have an f one car. You need to simulate how air flows over it. That's a particle simulation, and that's perfect for accelerated parallelized computing GPUs.
Speaker 1:They're probably doing it on premise at some point. They're gonna take it to the cloud. They're gonna take it to your cloud.
Speaker 4:It it's so much yes. But it's so much more than that. It's not just the CFD workloads. Mhmm. It's also things like taking radio data from other teams and trying to decipher what their strategies are in That's real awesome.
Speaker 4:I I mean, it's running tire degradation simulations, like how does track temperature change with cloud cover, how does weather come in and actually impact this stuff. It's helping them make better decisions on track in real time.
Speaker 1:Wow.
Speaker 4:It's, like, it's the coolest confluence of the technologies that I can imagine. Yeah. And I'm like, I'm totally into it.
Speaker 1:That's amazing. Yeah. Translate all of Ferrari's comms from Italian into English.
Speaker 4:Yeah. Well, I mean, good luck with Ferrari
Speaker 1:strategy. Talk
Speaker 3:about sort of data center build out timelines. Sure. I think Colossus and and the x AI team were getting a lot of credit for bringing a lot of compute online very quickly, a lot of energy online. How much was that an outlier or are they just really good at marketing?
Speaker 4:I think it's both.
Speaker 3:Mhmm.
Speaker 4:Right? You know, one of the things that I admire about Elon is, you know, there he sent an email a couple years ago on Thanksgiving. And it was like, the biggest problem that we have right now now is there's nobody to turn a screwdriver on the line. I'm gonna go turn a screwdriver on the line. Right?
Speaker 1:Mhmm.
Speaker 4:And he is so good at identifying what the bottleneck is and breaking through it. And if you're the richest guy in the world and you don't really care about the consequences, you can do that a lot more than you can as a director of a public is what I've learned. Mhmm. Is, you know, they're able to go and I think some of what they've done is a bit of the you told me I can't build it, but I already built it. It's already there.
Speaker 4:And they're like, no. You can't build it. No. No. It's there.
Speaker 1:Mhmm.
Speaker 4:Right?
Speaker 1:Yeah.
Speaker 4:And when you're in a race like this, that bravado matters.
Speaker 3:Yep.
Speaker 4:Right? I I don't know I don't think anybody knows the truth of what's actually there, but they've definitely been incredible in how they've been able to execute.
Speaker 1:Yeah. Yeah. I mean, with the the that data center seems like it's performing very well. But what I learned from Dylan Patel over at Semi Analysis with the ClusterMax ranking is that not all clouds are created equal. And a 100,000 one hundreds is not perfectly substitutable for another 100,000 h one hundreds over here.
Speaker 1:And CoreWeave did extremely well on ClusterMax. And I'm interested in peeling back a layer deeper into understanding first, how do you think you did so well? Like, what concretely makes CoreWeave stand out as a Neo Cloud on a on the features level from a customer perspective? And then internally, what's the secret sauce? Like, is it just great employees?
Speaker 1:Are they aligned? Are they working harder? Is there key insight? Are you like, how do you actually deliver that product at at a higher level than, you know, competitors that Dylan Patel reviewed?
Speaker 4:Yeah. So so let's let's not get off the XAI thing yet. Sure. I'm gonna trans transfer into that. You know, if they have a 100,000 GPUs and they get 60,000 of them running and they don't care about the other 40,000 of them Mhmm.
Speaker 4:It's kind of enough.
Speaker 1:Got it.
Speaker 4:Right? And if they're looking at it saying, I don't care how much this costs. I have to win. Mhmm. And they're in the position to do that.
Speaker 4:And if you're Elon Musk, you are. Right? That's a powerful position to be in. Sure. Now the clients that we serve are typically going to be more cost conscious and are going to look to optimize, you know, their spend, make sure they get the whatever they need out of their investment.
Speaker 4:Mhmm. And what we found is that, you know, these jobs and this infrastructure, it it breaks all the time.
Speaker 1:Mhmm.
Speaker 4:Right? And when you accept that something's gonna break all the time and you design for it, your solution's gonna be very different than if you're just kind of, you know, square peg in a round hole after the fact saying, I have to go deal with these failures.
Speaker 1:Yep.
Speaker 4:Right? So what we did initially is we built with a incredibly high level of observability at the bare metal layer. Right? And the bare metal visibility is really important because things do fail and, you know, you have memory failures, you have thermal failures, you have all these things that impact your jobs. But if we're able to help our customers identify what's happening, triage it for them, and explain to them why something failed, you know, they don't have to go back and say, oh, was it my code or was it one of the 700,000 connections in my cluster?
Speaker 4:Mhmm. Right? They can immediately point to our software stack that says, oh, it was this link flap over here. We took it out of service. You restart your job.
Speaker 4:You'll be totally fine. Mhmm. That's been very, very, very powerful. And it's not just that visibility layer. It's also the storage and networking and the quality control that we put around those things.
Speaker 4:You know, I have to give credit to our new c our now CTO, Peter Salanke, who used to work for me until they found me out. He is he is incredibly focused on the low level visibility and quality and drives a lot of that culture throughout the company. Right? Of, like, if one of 500,000 things is gonna break, I need to know immediately so I can go in and fix it to make sure my customers are back up and running, like, three minutes later. Mhmm.
Speaker 4:So it's it's building from that low base and understanding what the problems are gonna be. And then culturally, you know, we have people that are here that take so much pride in being first and being best.
Speaker 1:Yeah.
Speaker 4:Right? And, you know, if we're not first to market with a new release, like, they're like, they're gonna cry for a week, kinda thing. So when we did GB 300 a couple weeks ago or maybe it was just a week ago, like, people went out to one of our data centers. Like, all of our low level engineers went out there, and they lived there for, like, two weeks to get it done. Mhmm.
Speaker 4:Right? Like, they go and they they work from 8AM to 4AM every day, and, like, and they love it. And it's a cultural thing. And I think we're really lucky to have that.
Speaker 3:Bit of a tangent. Were you an h 20 buyer at all over the last few months?
Speaker 4:Or No.
Speaker 3:Or not needed? No. And and there there was h 20 sales happening in The United States from what we heard. Who are the kind of players that are that were were making use of that?
Speaker 4:I don't know. If that did happen, I don't know who it is. Mhmm. But for us, you know, if we had any power available, we're gonna buy the best, you know, the best accelerator we can. You know, there's no reason for us to buy the cut down accelerator if we have power available.
Speaker 1:Yeah. That makes sense. You you mentioned that one of the key things is, like, the insight into what's happening in the data center. What if a specific chip is failing, you want your customer to be able to know. You want to be able to I mean, we talked to Dylan Patel, he was saying like, sometimes you just need to turn it off, turn it back on.
Speaker 1:Or like there's a whole bunch of different things that can happen in that feel very abstract when you're looking at it from the outside, but are very concrete when you're on the inside. And that's actually what separates great data center performance is just like the hand to hand combat that happens on an inside day. My question is like, we've talked we talked to some people who are like, we're gonna put data centers in space or we're gonna put data centers like on the moon or
Speaker 3:align with it with your framework of being like, we need to build it in in a way knowing that it's gonna break often. And we're gonna need to fix it. And hard to do that if it's if it's
Speaker 4:Yeah. I I don't think space is the right place for a data center. Okay. But, you know, to to the point there of sometimes you have to turn it off and turn it back on to solve the problem. Mhmm.
Speaker 4:We don't find that to be true.
Speaker 1:Okay. Break it Is
Speaker 4:if you if something needs to be turned off, there's a reason why it needs to be turned off.
Speaker 1:Sure.
Speaker 4:And that, like, that one comment may be what separates us
Speaker 3:Mhmm.
Speaker 4:Is, you know, our engineering team, if they're like, I'm not gonna reboot the system. That doesn't solve problems. Mhmm. I wanna know exactly what happened there because we have to go solve it. Because if it happens one time, it's gonna happen another time.
Speaker 4:Like, the scale that we run at, these, like, these skeletons come out. Yep. Right? And, you know, be making sure that the data center's on Earth and is acceptable by is accessible by, like, human technicians is really important. Yep.
Speaker 4:Because sometimes you have to make judgment calls on, like, what's actually causing this and, you know, how do you fix it?
Speaker 1:Yeah. So the the one kind of I mean, the the the there's a few things that the space data center folks will tell you about, like, you know, free energy or free cooling or something like that. We we don't need to go too deep into that. But I guess the question that I'm more interested in is how are the recent results from different training runs? We saw this with Grok four that the reinforcement learning post training was 50% of the overall cost.
Speaker 1:That's kind of the rumor. And there's been kind of mutterings about, hey, maybe in the future, you'll need a whole bunch of distributed compute all over the place generating reinforcement data and doing rollouts and bringing those back. And you won't need as much of this hyper concentrated compute in one place. And so maybe having ten one gigawatt data centers is better than one five gigawatt data center. It's just power and compute all over the place.
Speaker 1:How do you think, like, the the shape of distribution of of compute clusters will evolve over the next few years? If you have any insight there.
Speaker 4:Yeah. So great question. Let's let's put it into perspective because you said one five gigawatt or ten one gigawatts. Those are insane, by the way.
Speaker 1:Like Yeah. Okay. Okay.
Speaker 4:Like, even building a a gigawatt data center and its impact on the local grid, like, that's we'll see.
Speaker 1:I mean, you talk to people and they're like and they're like, there's gonna be a 100 gigawatts data centers in three years. Like, the the crazy AI people get crazy. And so I'm I'm may maybe I'm a little bit on, you know, like, out in space here literally, but but bring it back down to Earth.
Speaker 4:Yeah. So people definitely wanna build at that scale. Mhmm. Right? When you think about a 100 gigawatt data center or a 10 gigawatt data center Yeah.
Speaker 4:The capital required to build these things and then install the compute inside them, like, that's country level capital. Yeah. Right? And, you know, I don't think that the broader market understands the investment required yet to do this. Mhmm.
Speaker 4:Right? But, you know, back to the question of, is it gonna be more distributed? Is it gonna be more centralized? I think that right now, while the ability to centralize it exists, people would prefer to do that because the optionality of having it altogether is, you know, is worth more than having it distributed. Mhmm.
Speaker 4:I think that as you have workloads that become more latency driven, right, so, you know, we're starting to see customers that say, hey. I need something that's actually local to a metropolitan area because I'm running, you know, agentic AI for one of my customers or for a banking customer. I I need to make sure it's there. That's a very different story than twelve months ago where people didn't care where inference was because your first response wasn't for, like, two or three seconds.
Speaker 1:Yeah. You actually want it on the other side of the world, ideally, where it's low load.
Speaker 4:Yeah. Then you're managing to optimize for cost.
Speaker 1:Yep.
Speaker 4:Right? But there there's a group of people that are gonna optimize for cost. There's a group of people that are gonna optimize for performance. You know, for us, one of the products that we're really excited to develop is, you know, almost like a global load balancer product that helps people choose what they're optimizing for. Right?
Speaker 4:And, you know, we've been thinking about that for a long time now because, like you said, you have to have that compute distributed. And it may not be be because you're trying like, if you could choose, you'd always have it in one place.
Speaker 5:Mhmm.
Speaker 4:Right? But when you build it distributed, then you have to have the software services that can intelligently say, okay. Where Where am I gonna run this? What am I optimizing for? Where is the data that I need?
Speaker 4:Right? And that's where, you know, we've been investing in you know, we've built a massive global network backbone. We have a ton of our own dark fiber to be able to move workloads around, can have
Speaker 1:a What does that
Speaker 3:mean what does that what does that exactly mean? You're on
Speaker 4:dark fiber. So we've leased dark fiber between a bunch of our data centers across The United States and in Europe that allows us to install our own optimal optical optical gear so that we can, you know, flex up bandwidth as we need to. You know, we have some customers that need things like 64 terabits per second between sites, like crazy amounts of bandwidth. And the idea there is that they're they're moving synchronization data or they're synchronizing models between sites.
Speaker 1:Yep.
Speaker 4:So, you know, that's where, you know, we have to make these big capital investments knowing what's coming. Right? So when our customers start asking for it, it like, oh, yes. We already have it there. So, you know, some of that is just it's the focus that we have and the specialization to know, hey.
Speaker 4:Like, we better start investing in this because a year down the road, like, we're gonna be screwed if we don't.
Speaker 3:Yeah. Yeah. How how has it been you know, what what are some of the differences been in building out data centers in Europe? I know you guys have Norway, Sweden, Spain, and The UK. Is that correct?
Speaker 3:What what's it been like developing new data centers there versus what you've done in The United States?
Speaker 4:Not so different, actually. Right? You know, everybody was initially saying, oh, it's gonna be so hard to work in Europe. You know, are people gonna show up and work as hard? And the one of the things that we've done, I think, we've done really well in our onboarding process for employees is we've actually brought all the European teams over to work with our tiger teams inside of our data centers.
Speaker 4:And You just
Speaker 3:player the star spangled banner just loudly throughout the day. Yeah.
Speaker 1:Know, you
Speaker 4:just if you blast music continuously, all of sudden, like, they have yeah. Well And, you know, the the culture is infectious. And that what's one of the best things about the company is that all of our like, the company's so young that there's been no real attrition. Right? Nobody's left.
Speaker 1:Yeah.
Speaker 4:So the people that are running the data center start as day started as data center techs a couple years ago. Like, everybody's still fired up. They still have, like, the the same drive. They wanna be first. They wanna be best.
Speaker 4:And when you have new employees that walk into that environment and those people are genuinely happy to teach them Mhmm. It transfers pretty well. Right? So I I think our European investments have gone a lot better than I thought they were going to, which I attribute largely to our people.
Speaker 1:Mhmm. That makes sense. A couple years ago, I feel like everyone in tech had to learn about Nvidia. And then everyone in tech had to learn about TSMC. And then everyone in tech had to learn about ASML.
Speaker 1:And now, are kinda getting familiar with SK Hynix. What do you think the next big company in the semiconductor stack or data center stack or even networking? Like, what is the next big theme or or subcategory of important foundational technology? People are starting to dig into the the rare earth materials and what's going on. Like, what is on the horizon in terms of, like, underexplored or or misunderstood as important as having a role as we try and build out these one gigawatt, 10 gigawatt data centers?
Speaker 1:What are we gonna be hearing about?
Speaker 4:That's such a such a good question and the kind of question oh, man. I don't even know. I'm not sure I have an answer for you.
Speaker 1:Yeah. May maybe it's networking gear. I mean, you mentioned you're putting optical gear at and and just hearing, what was it? 42 terabits a second. Like, that seems like something that could be become very important.
Speaker 1:Not that you ever call out a single company. Just like the the the the the overall industry is interesting to be like, oh, you know, everyone's gonna be thinking about this industry.
Speaker 4:Yeah. You know, that's definitely one of them. Yeah. Fiber capacity between metros is gonna be an issue. Mhmm.
Speaker 4:I don't know that it's an issue that's insurmountable.
Speaker 1:Yeah.
Speaker 4:There are definitely some gotchas that Yep. I can see coming down the the line at people. I I don't wanna say it because then I'll give them I'll give them warning. And since we've already identified what they are, I feel like I'm in a better position.
Speaker 1:Sorry. Yeah. I don't mean to put you on the spot too much.
Speaker 4:No. No. It's it's okay.
Speaker 1:What what about electrical what about electrical transformers? I've heard a little bit about, like, there there there's a shortage. They're very complicated. Like, is this is this, like, big technical thing that's a big piece of hardware? Is that, like, an important thing for people to be aware of going forward or, like, an important industry to understand?
Speaker 4:So a bit of a tangent off of that.
Speaker 1:Sure.
Speaker 4:Everybody talks about how there's no power left in America.
Speaker 1:Yeah.
Speaker 4:Right? And if you actually look at the data, there's a tremendous amount of power available from baseload and load following generation.
Speaker 1:That's great to hear.
Speaker 4:Thank you. And the the problem exists on peak days.
Speaker 1:Mhmm.
Speaker 4:Right? And, like, what solves peak load problems is solar. Like, solar and batteries will solve peak load problems. Like, you're worried about, you know, 05:00 on the hottest July day when everybody gets home to turn their air conditioning on.
Speaker 1:Sure.
Speaker 4:Like, that's that's the thing. And, you know, everybody wants to talk about how they wanna use demand response as a way to, you know, bring supply back to the power grid from data centers. You know, this stuff is really hard to bring up and bring down. It's it's not really intermittent load.
Speaker 1:Mhmm.
Speaker 4:Right? You know, I think that a lot of this shortage narrative from a power perspective is coming from the fact that everybody and their brother has become a data center developer in the past year, and there's a lot of people out there squatting on power. Right? Or squatting on power rates. And I don't think that the local regulatory commissions understood what they were signing up for when they started doing load studies for free and giving power allocations.
Speaker 4:You know? But it goes back to my point earlier that the biggest constraint is speculative capital to build out to meet demand that we expect. Interesting. Right? So, like, yeah, transformers are a problem, but they're not outside the lead time window.
Speaker 4:Mhmm. You know, UPS is everything's a problem if you need it tomorrow.
Speaker 1:Sure.
Speaker 4:But if you're able to plan and make the investments in, like, in a reasonable period of time and you trust your demand forecasts Mhmm. And the market is there and believes in it, like, this is all fine.
Speaker 1:Yeah. Right.
Speaker 3:So you still I feel like the chart that people have been tracking is, China bringing on, you know, new you know, basically, like, copy and pasting, nuclear Reactors. Reactors. Do you think that The US should be seriously, you know, there there seems to be enough people now from tech to Washington that care about nuclear. So who
Speaker 1:very do contrarian. It was very, very edgy to say, oh, yeah. Nuclear, it's like, it's it's it's safe, and we should do it. People are like, it's it's still scary.
Speaker 3:But, yeah, in your view, would you like to see more focus on more attention on nuclear or more attention on on solar if you had to pick?
Speaker 4:I mean, so nuclear's they solve two different problems. Mhmm. Right? Nuclear builds your base load and your and, like, it's not nuclear's not load following. It's really hard to bring those things up and down.
Speaker 4:They have long outage cycles. Mhmm. There that's a base load solution. Right? So as your data center demand is gonna increase so much and you're shifting your base load requirements up, that's the solution.
Speaker 4:Particularly, if you wanna retire old coal or you wanna retire some of the base load natural gas, nuclear, I believe, is the solution there. Mhmm. But as you're dealing with peak loads, right, you're looking to match that load profile, and, you know, solar is a great one to do it. Yeah. You know, wind doesn't necessarily solve that problem during peaking.
Speaker 4:Like, wind doesn't peak during the afternoon. It peaks overnight.
Speaker 1:Sure.
Speaker 4:So you you just have to match, like, what's the load profile you're trying to match and which part of the curve are you trying to solve for?
Speaker 1:Is the load profile for AI not perfectly matched with nuclear? And and is that because of inference demand from actual customers? Like, I've heard people use ChatGPT during the work week, but they don't use it when they're sleeping. So there's actually maybe it follows more of like the solar load profile. Because when I think of training, I think of we're gonna run this entire data center for months.
Speaker 3:I don't know how far off I
Speaker 1:am on that, but, like, that feels like perfect. Oh, build a nuclear power plant right next to the big data center, run it continuously, just keep training. And then when you get done with one model, train the next one and just keep it running perfectly matched forever. But but how are we actually like, like, the actual AI workloads, how how do they match to different load profiles?
Speaker 4:Yeah. So if you're in a global constrained environment
Speaker 1:Mhmm.
Speaker 4:Right, you're serving as much load as you can around the clock from
Speaker 1:Yeah. Yeah.
Speaker 4:Right? So I I don't think that you have any load shape right now. I think it's just flat load, and it's like, it's pinned to a 100%. Got it. As Bullish.
Speaker 1:Yeah. Yes. It's insane. You're like, it's stressful. Stop talking.
Speaker 4:It's it's incredibly stressful, but it's it's a good problem to have.
Speaker 1:Yeah.
Speaker 4:Yeah. I have people yelling at me every day, like, where's my stuff? Where's my stuff? Where's my stuff? And I I might have promised I'm doing everything I can.
Speaker 4:But I I think that as that like, as you have the investments where things are more latency sensitive, you'll see that the load curve may not change. It may still be pinned at a 100. Right? But the types of workloads may be more may be more shaped.
Speaker 3:I'm not
Speaker 4:sure how it plays
Speaker 1:out. Mhmm.
Speaker 4:Right? I I think that, you know, the the problem that you're trying to solve there is not necessarily data center load shape. It's residential and commercial load sheet.
Speaker 1:Mhmm.
Speaker 4:Right? Because you're not running like, your big commercial buildings meet in New York aren't running at 3AM. They're running at 3PM. That's the problem. Mhmm.
Speaker 3:Makes a ton of sense. Well, this was really fun. Yeah. Hope that we see you at the track soon. One of our other one of our sponsors is also an Aston f one sponsor.
Speaker 3:So hopefully, we run into you on the paddock.
Speaker 4:I'll be there soon, actually.
Speaker 3:Fantastic. Great having you on. Let's make this a regular thing when you guys have news. It was awesome to get all your insights.
Speaker 1:Yeah. This is great.
Speaker 4:Yep. Thanks, guys.
Speaker 1:Thanks so
Speaker 3:much. Cheers. Bye.
Speaker 1:Bye. And since we're mentioning public.com, investing for those who take it seriously. Multi asset investing, industry leading yields. They're trusted by millions. Our next guest will be joining us in just a few minutes.
Speaker 1:But first, we can tell you about Wander. Find
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Speaker 3:Okay. I got an update from, a friend, friend of a friend Mhmm. Which says that, his friend no. No. No.
Speaker 3:Sorry. Our friend says that he has a buddy that owns some RM boutiques
Speaker 1:Mhmm.
Speaker 3:And has not heard of the conspiracy.
Speaker 1:Really? Which is interesting. Maybe it was hallucinating. It might have been conspiracy. I don't know.
Speaker 1:I need to find the source for that. Where where was that actually in here? I will figure it out. And we will get to the bottom of the conspiracy theory. But we will do that later because our next guest is here.
Speaker 1:It's Tyler Cowen. How are you doing, Tyler?
Speaker 6:Which conspiracy theory?
Speaker 1:So this conspiracy theory is
Speaker 3:that You'll actually you'll actually like this one.
Speaker 1:Okay. So, are you familiar with the high, the ultra luxury watch brand Richard Mill?
Speaker 6:Only by name.
Speaker 1:Okay.
Speaker 6:I don't have one.
Speaker 3:May have seen it on a on a sailboat or something like that.
Speaker 1:Yes. So Richard Mill is famous for selling watches at 10 times the price of other luxury watch brands. So Richard Mill, the first one was a $135,000 for a single watch, and at the time, $13,000 would have been more appropriate for that kind of tier of watch. And the conspiracy theory is that when Richard Mill went to promote their new watch, they took out an advertisement in the Financial Times. They sent over the copy for the advertisement saying, please please promote Richard Mill.
Speaker 1:Our new watch is is available for purchase, and the price is $13,500. And there was a mistake in the newsroom, and they added an extra zero, and they printed a $135,000. And what happened was instead of getting no offers, they got flooded with offers because people had to have it. A classic example of a Veblen good, and and the rest is history. And to this day, the brand denies it.
Speaker 1:But what do you think?
Speaker 6:Well, it sounds like the opposite of a conspiracy, just an innocent mistake, and then it worked out well for the company and bad for the buyers. Yes. I believe it
Speaker 3:The the the conspiracy is that the brand now obviously denies it because it would it would not be a good look for them now to to be like, well, we actually wanted to price it at 13,000 and then we actually, you know, now that you're willing to pay a 135, well, it's a good deal. Let's do it.
Speaker 6:Could be a deathbed confession on that one. One way or the
Speaker 1:other. Maybe.
Speaker 3:Well, it's great to have you here.
Speaker 1:It's great
Speaker 3:to have you on video. Super intelligence
Speaker 1:is Yes. Yes. Yeah. Yeah. We have some technical difficulties last time, but I'm glad.
Speaker 1:You look great. How are you overall? Let me take your temperature on. The last time we talked, you said AGI was around the corner. Later two days later, o three released.
Speaker 1:We now have o three Pro. How are you feeling on artificial intelligence progress overall? Do you feel like we're accelerating, decelerating? Are you happy with the products? How are you using them?
Speaker 1:Take me through kind of the state of the union.
Speaker 6:Everyone has a different definition of AGI, but the definition I grew up with, which is that it can pass a Turing test and do at least as well as expert humans on most endeavors, intellectual endeavors, it clearly passes.
Speaker 1:Mhmm.
Speaker 6:So if you wanna call it AGI, you can. Mhmm. I don't insist on the term. Maybe it's more misleading than useful. Yeah.
Speaker 6:But o three, o three pro, I use them every day. I ask them questions about history or music or travel. My wife and I did a trip through Europe, France, and Spain. We asked it about our hotels, our restaurants, the churches. We saw everything.
Speaker 6:It just keeps on working. It's amazing. Much better than having, you know, a historian guide with you. So to me, it's like AGI. It's better, in fact.
Speaker 1:Are you what is your prior for hallucination at this point? Because that that Richard Mill conspiracy theory that I just relayed to you, that comes from an from a ChatGPT o three pro deep research report, and we're getting text messages that many people hadn't heard of it. I haven't checked the sourcing yet, so I'm not sure if it's real. I haven't gone down and done all the fact checking. But just in terms of your prior, how likely would you believe that it's that it's a a hallucination?
Speaker 6:Well, just ask it. Right? If it's something important, you double check with another AI and or you ask and you find out. So hallucinations should not be a practical problem. They end up one because people are silly.
Speaker 6:Mhmm. Or they'll ask it questions where there may not be any answer at all, and that is by far when it's most likely to hallucinate. They'll just make something up to please you. But if you know in advance, that's when it's most likely to hallucinate. Again, you take countermeasures.
Speaker 6:So it's a way overrated problem.
Speaker 1:I agree. I agree. And I just fact checked this, and it does come from a 2021 GQ report, which again might be wrong. Hallucinated by the author.
Speaker 6:Never hallucinates.
Speaker 1:Take it out
Speaker 6:Gentlemen, do not hallucinate.
Speaker 1:No. Gentlemen, do not do not hallucinate. What do you think of, Duarkesh Patel's new formulation that there's sort of a a two axis diagram between you and him? AGI is here. AGI is not here.
Speaker 1:The impact of AGI economically will be massive in his in his mind, and the impact and the impact of AGI will be more muted in in his assessment of your assessment.
Speaker 3:And I think I I think your general stance, which is we should hold ourselves accountable to the definition that we set out to, you know, to achieve, you know, decades ago when this work started and not constantly just be, you know, pushing out the sort of requirements, the goal moving the goalposts is is important.
Speaker 6:And then there's this new definition, superintelligence. Yes. I'm waiting for super duper intelligence. Right?
Speaker 3:For giga giga intelligence. We
Speaker 1:already we're already past it. Everyone folks like us, we know what superintelligence is. We we we already have it. We're waiting for the next one.
Speaker 6:Maybe the best measure is how much of people's time are they spending with this thing. Mhmm. And that's rising steadily. Right? So that to me is quite impressive.
Speaker 6:Dwarkesh understands my views perfectly well. He and I use the term AGI in different ways, so it all ends up being confusing. I just think the human bottlenecks are so significant that it's not going to be fast progress anytime soon. That's my core view. It's not based on any kind of bearishness about AI.
Speaker 6:It's that I've spent my whole life working in human institutions, and there are plenty of much simpler developments like don't be a jerk, that would boost productivity immensely, but we still haven't gotten around to really implementing.
Speaker 1:Yeah. But, I mean, on the on the topic of superintelligence, I think what people are kind of getting at is that it feels like we have fifteen minute AGI. It feels like we have spiky intelligence. It feels like we have intelligence that can, you know, memorize every book in the English language and yet not tell you a funny joke or or put a novel connection together between two disparate disciplines.
Speaker 3:And and potentially more important is this idea of of intelligence with amnesia. Right? It's like, you know, we've been talking about this on the show and Durkash, talked about it last week, which is this idea of PhD level intelligence that, you know, can't remember what you told it, you know, yesterday. Right? And so it's difficult to sort of build real momentum and real, agency.
Speaker 6:I think it can do all those things. Mhmm. Now it might require a little smidgen of work from you. Like, you might need for one thing, you can turn on memory. That's maybe not as much memory as you'd like, but you can just reinsert the dialogue you had with it and tell it to start from there.
Speaker 6:So, okay, it's a slight inconvenience, but my goodness, people, they're so unhappy. Like, it's incredible what we have. And with modest effort from you, it does all these things.
Speaker 1:So I completely agree. I I love these systems. I I enjoy spending time with them. Even if they're not directly providing economic value, I find them entertaining. I find them just interesting.
Speaker 1:I I learn things. It's fantastic. I guess the the question is like, yes, you can stuff the context window, but increasingly folks are saying that there's some sort of fundamental limitation with the size of the context window that, yes, you can do needle in the haystack analysis with a big context window. But even if you have, you know, pages and pages of all your best practices, the current systems are more likely to forget some hard won lesson early in working with you than just an average employee, and that feels uniquely unhuman.
Speaker 6:I don't know. I've worked with a lot of employees. This is one generous way I would put it. The things are not perfect. If you compare them to smart humans on intellectual tasks, they're basically ahead.
Speaker 6:They can't dribble a basketball. They cannot do most jobs, that's for sure. Mhmm. It's a big reason why progress will be slow. If nothing else, those jobs intersect with the physical world, robots are far away, and there you go.
Speaker 6:I think it's a pretty clear prognosis. I don't really get why anyone disagrees with it.
Speaker 3:Well, if you need to raise a billion dollars, it's not super convenient truth if robots are far away, for example.
Speaker 1:Specifically economic growth is far away. This is the Satya Natya Satya Nadella, position, which I think he agrees with you on the economic impact that we're currently seeing and potentially the economic impact for the next few years. And so he is underwriting a very different investment strategy in artificial intelligence.
Speaker 3:Yeah. It says it says a lot in in our view that that that everywhere you look, there's just blaring top signals in in the market, both, like, literal all time highs, but then just other more more indirect signals. And at the same time, Satya is, like, you know, doing layoffs, being seemingly, you know, very pragmatic. Mhmm. And and and I read that as more aligned with your view, is transformative, impactful, incredible
Speaker 1:It's wonderful. Magic,
Speaker 3:but also potentially incremental. And, you know, going to be transformative in the fullness of time, but not next quarter.
Speaker 6:Forgive me for not sounding like a complete capitalist, but this is also important. People should just be doing it.
Speaker 1:Mhmm.
Speaker 6:And to some extent, they are. The labs are working very hard to make progress. You can debate how much the motive is profit. But look, these are driven people. They they get how important it is and they're doing their best.
Speaker 6:I think that's amazing. Yeah. Are they all gonna get rich? I'm not predicting that. I don't know.
Speaker 1:Yeah. I I think the the trade off that people are debating broadly in the market is if if the next training run that's a little bit of a stretch for the market. We were just talking to the cofounder of CoreWeave, and he was saying that, like, the capital markets just aren't really ready to absorb what it means to 10x data center construction. And at the same time, if AI researchers are saying that the that by 10 x ing data center construction, we will lift ourself off of the GDP baseline, and we will see breakout economic growth. And we will get through some of the problems that you've identified actually, you know, restructuring the economy and speeding up economic growth.
Speaker 1:All of a sudden, like, that question and that that how much should humanity as a whole invest as a portion of GDP, That becomes a very important question for the overall market to solve.
Speaker 6:Well, let's go talk to United Arab Emirates. They can either buy some more parts of sports teams or do this. I think they're gonna do this. I agree. The growth rate, I think, will go up.
Speaker 6:I've offered the very speculative estimate of half a percentage point per quarter. Mhmm. But that's an enormous sum of money.
Speaker 1:That's massive.
Speaker 6:Yeah. Now, you know, is it captured by the capital markets, the shareholders, and so on? No. Just the free time liberated by ChatGPT and the other services already is enormous money. So remember Satya had that challenge, when will it earn $100,000,000?
Speaker 6:Well, has many times over, it just hasn't earned it for him. So people get their work done more quickly. You add up those valuations of time. I'd love to see a study in the number, but it's way, way above a 100,000,000 right now.
Speaker 1:Well, on that point, there was a study last week about does, does AI code generation tools, do these tools actually improve developer productivity? And they did a, I believe, a double blinded trial with or or maybe just like a split up trial, based on talented software engineers working on open source projects, kind of trying to work on some of the harder problems in software engineering, not just build me a new web page. Actually, advancing open source projects, and they gave half of the developers access to tools like Cursor and Windsurf and Cloud Code, and and then the other half didn't have these AI driven development environments. And they said that the AI enabled engineers expected experienced a 20% decrease or 19% decrease in productivity. What is your take on that?
Speaker 1:Do you think that there's a world where we're fooling ourselves into believing that we're actually sped up by these tools? Or do you think that that's completely ridiculous and it's obvious that this that these tools speed us up?
Speaker 6:That's BS, that paper. First, only 16 data points. Second, only one of those people had experience working with AI already, and that person's productivity went up. It's the other fools who were just trying to get a handle on it at all where the productivity went down. So we need to throw that out, get it out of our minds.
Speaker 1:Okay.
Speaker 6:It's obvious from marketplace tests that AI speeds up developer productivity. Of course, you have to do it right. You need to learn some things, but it's working. Overwhelming real world evidence to that effect.
Speaker 1:Do you think that there are particular tasks maybe that you've encountered where you've gone to AI and then afterwards realize, like, well, for this particular task, not just planning a a vacation or trip or something, I was actually slowed down.
Speaker 6:Sometimes I like giving stupid dogmatic answers. I'll just say no. I think it's a correct stupid dogmatic answer. No. It's never happened to me.
Speaker 1:I love that. Because it's definitely happened to me when I've when I've said, like, generate a generate a two by two chart, and I'm, like, seven prompts deep. And I'm like, I could have done this in Excel, or I could have done this in just taking a screenshot or I could have done this in Photoshop faster. It it it does it does happen to me, but I agree on that. I I feel sped up and I and I and I feel very happy to use the tools and I'm I'm enjoying them.
Speaker 6:I use it to prepare for podcasts.
Speaker 1:Sure.
Speaker 6:It cuts my prep time in half. Sure. No real doubt there.
Speaker 1:Okay.
Speaker 6:I don't use it for charts. I just tell a human. Maybe the human uses it. I don't even know. I get the chart back.
Speaker 6:It's great. I love the world.
Speaker 1:I love it. What is the what is the labor economist in you think about the AI talent wars? Has have AI researchers been historically underpaid? Are we in some sort of odd intellectual property theft ring where we're paying for trade secrets to trans to change hands? What is your read on kind of all the talent moves that we've seen at staggering numbers by comparison in what's historically happened in Silicon Valley?
Speaker 3:Yeah. And then specifically, do you think that an AI researcher in the year 2030 will be getting a $100,000,000 signing bonus? Or do you believe that things will maybe normalize and and researchers will go back to being paid well, but maybe not more than Fortune, or Mag seven CEOs?
Speaker 6:Probably normalized. Now I'm an NBA basketball fan. Mhmm. And what I observe is the top teams need some time to gel. So you look at the Miami Heat, they got LeBron, Dwayne Wade, Chris Bosh.
Speaker 6:The first year, they lost. You look at, you know, Chicago Bulls, Jordan and Pippen, it took them a few years. You look at the Lakers, what they had? Karl Malone, Gary Payton, was it Shaq and Kobe Bryant? They didn't win a title.
Speaker 6:So it's not as easy as you think. Not that those aren't great, great players, but there's something about how it gels and the process and what part of people's trajectories you get them at that all has to fit together. I think it's a fascinating experiment. I'm dying to find out how it's gonna work.
Speaker 1:What do you think of the missionary versus mercenary debate? A prior guest on the show highlighted Tom Brady in the sports world, taking a lower salary in order to build a better team around him. Bit of an economic sacrifice for greater performance, longer legacy, ultimately reap the rewards economically. But a lot of people have been saying, you know, you can't buy great missionary talent that will stick with you during the hard times and really advance the frontier of artificial intelligence.
Speaker 6:In the case of Brady, you know, he has these contracts for shoes, jerseys, footballs, other things. He probably made a lot of money from that pay cut by staying more focal. Mhmm. So maybe for some of these AI companies, you know, we need more endorsements, a line of tennis balls or something. And then it'll be cheaper to hire talent because the outside market will pay them.
Speaker 6:We're not at that point yet. Maybe we'll get there.
Speaker 3:I think Yeah. I want a game worn jersey and then Evan sell.
Speaker 6:Here's what Ilya wore when he, you know, built the key parts of GPT four.
Speaker 1:Exactly. I mean, we've we've been putting out these little trading cards, sports, you know, whenever when any an AI research whenever an AI researcher moves from one firm to the other. And, I mean, it seems like an insider joke, but there these posts are getting millions and millions of views. Like, it really is turning into into sports in terms of the attention of the entire tech industry on these trade deals. Maybe it's just the big numbers, but I think it's also the fact that this is an important technology and people are excited about the developments, they and they wanna know who who will win.
Speaker 1:What what product will I be using in five years? Will it be OpenAI? Will it be Meta? Who knows?
Speaker 6:All of the above, I hope. Probably.
Speaker 3:How did you how would you try to value the Dutch East India company? And the reason I bring that up is NVIDIA crossed a $4,000,000,000,000 market cap. Everybody's calling it, you know, one of the most valuable companies ever. But I think a lot of the people that run the kind of valuation analysis and inflation calculations and things like that believe that the Dutch East India Company was worth somewhere around, you know, two x of that. Do have you spent much time, thinking about, about that business?
Speaker 6:I look at all the numbers. In general, I don't feel I can outguess the markets. So the market is a better estimator there than I am. But look, markets are always wrong. That's why the price changes all the time.
Speaker 6:So the fact that NVIDIA is priced so high shows the market is paying attention to AI, which is good. But the fact that everything else is priced more or less normally, I think is evidence for my thesis of slow takeoff, that it will matter a lot over time, but not that much right away.
Speaker 1:Yeah. That makes sense. It is
Speaker 3:it's interesting something we we just had one of the founders of Core Weave on, which is now a $70,000,000,000 public company. And I was thinking about the advantage that he has as a public company where he doesn't have to raise capital from the private markets that are and and tell the story this, like, ten year story. He can kind of focus on the next quarter and just say, like, how do we deliver more compute Interesting. To our customers. And it's like this interesting change where a lot of the companies today, let's say you're a lab with a $10,000,000,000 valuation, and you need to raise billions of dollars.
Speaker 3:You kind of need to tell the story around superintelligence. Yeah. Meanwhile, if you can just get out in the public markets and have billions of dollars of revenue, you can kind of go back to telling the story of, yeah, we're we're hoping to to bring more compute online, more data centers online, and just actually focus on on the business.
Speaker 1:Yeah.
Speaker 6:That can cut either way. But look, if you're selling socks today, public market is fine. But as you well know, fewer and fewer companies wanna go that route. So that does suggest to me the public markets are somewhat broken, overregulated, too much disclosure required, too much bureaucratization. Shareholders themselves can be kind of nutty.
Speaker 6:Mhmm. So, you know, it's good to have the two compete, but I'd like to see us make the public markets easier to be in.
Speaker 3:What about Delaware? We saw Andreessen Horowitz moving to Nevada. We've seen some other high profile exits. Do you think Delaware will, try to turn it around? I know about a pretty meaningful amount of their, their budget, comes from, franchise taxes, things like that.
Speaker 6:I say get out, send them a message. They're not feeling enough pain yet. Let's make it really tough for poor little Delaware. What do they call it? Small wonder?
Speaker 6:Well, small wonder that they haven't gotten their regulatory apparatus into better order.
Speaker 1:Wow. That's a great
Speaker 3:thing. Roasted.
Speaker 1:About in this I wanna talk more about the public market distortions versus private market. It feels like Elon has kind of run an AB test with Tesla and SpaceX. They're, like, within an order of magnitude of each other, maybe within, like, 2x in terms of valuation. And now Elon seems to be building some sort of a Japanese style keiretsu between all of his private market and sometimes the public market companies as well. Like, would would a hallmark of a well functioning public market be that there is just one ticker for Elon Inc, and all the companies are under one umbrella?
Speaker 1:Or is there a val is there value in the in the public markets to having, like, pure plays? I hear some public markets hedge fund investors are like, I just want a pure play on the robotaxi. I just want a pure play on humanoids. And I don't know if that's actually, like, an economically valuable thing for our society to have or what would be best for Elon or the shareholders. I'm just kind of struggling with all the different stakeholders.
Speaker 6:I suspect the pure play idea is useful. So you get a market price signal, what's working, what's not. Mhmm. So Elon obviously has become less popular, So the value of Tesla goes down. You see that quite directly.
Speaker 6:If they're all bundled, the signal is far more muddled. Sure. So I think it's better separate.
Speaker 1:So, ideally, if it was easy to operate in the public markets, we would we would just see SpaceX and and and companies would be going public once they hit, like, 5,000,000,000 or 10,000,000,000, something like that.
Speaker 6:I'm not sure if something like Neuralink would be. That's just weird to begin with, nonlegible.
Speaker 1:Yep.
Speaker 6:Who are the customers? What are the products? Yes. The disabled. But after that, that I would think should be in private markets.
Speaker 1:Wait. Are are you sure about that? Because I feel like it's also, in in many ways, like a classic biotech drug, you know, FDA approvals. Once it's approved, it goes out to everyone. It feels like that's one place that the public markets are particularly functioning as they always have, where new drug comes goes through phase one, phase two trials, but goes public very early.
Speaker 1:We we're not seeing the stripe of biotech hang out in the private markets for two decades.
Speaker 6:What am I ever gonna buy from neurotech? No no insult intended, by the way, but it's not transparent to me. I think it's amazing. I'm all for it. Yeah.
Speaker 6:Maybe it has to be not so legible to public shareholders, and Elon wants to do it. That's great.
Speaker 1:But you might not buy a particular cancer drug. I would hope that you'd never have to buy any of them. But that particular drug, for some certain indication, some certain illness, could be taken through FDA trials. They could go public. Their stock price could trade on the basis of the FDA results.
Speaker 1:And then when they they when they get approved, they start selling that drug. Maybe they get acquired by a bigger drug company, but then they live or die by the market size of that particular illness.
Speaker 6:Well, if it was a cancer drug, sure, I'd buy that. But a brain computer interface? I don't know. I don't want one. I'm happy with it being there.
Speaker 6:And, again, it seems to me that's probably not a good matter for public shareholders.
Speaker 1:Oh, okay. Yeah. I I'm more just think I mean, yeah, I I guess if you're thinking about valuing it as, like, brain computer interface for the masses, that's a different story than, it is a it is a treatment for the for the illness of being a a paraplegic. Or if you are blind, it can cure blindness, and that is a medical diagnosis, and it is a medical product. But, obviously, Elon's telling a much broader story about that, so that's a different thing.
Speaker 3:Were you surprised to see uncle Sam put up a surplus in June? Or were you expecting that?
Speaker 6:I wouldn't say I expected it, but, you know, month to month fluctuations can be so severe. Yeah. Nothing like that should surprise us. The debt and deficit, they're still out of control.
Speaker 3:It's like a it's a it's a startup. It's a startup that that's like, yeah. We're we're we're profitable because they have
Speaker 6:one month Yeah. Had a great week.
Speaker 3:Yeah. One one month of free free cash flow or one day, annualized. Yeah. Yeah. That makes that makes sense.
Speaker 3:How about stablecoins? There's there's been new regulation. We have a a issuer that's that's now public. There's a massive amount of excitement. It seems like a lot of the use cases outside of, you know, being you know, as a value transfer to facilitate investing in The US, but then the potentially, you know, more interesting use cases internationally.
Speaker 3:But but how are you thinking about adoption? And and do you believe that, the The US and specifically the traditional dollar will be a major beneficiary of the tech?
Speaker 6:It's been great. The rest of the world wants access to dollar based systems. Our government makes it hard for them. Stablecoins are a workaround. I'm not sure what their long run fate will be because keep in mind, regulations can change and other payments methods can innovate as well, But they're gonna pass the Genius Act, it looks like.
Speaker 6:I'm all for it. It's not perfect legislation, but it will give people a chance to experiment with these things on a legal transparent basis and let it rip. Right?
Speaker 1:Why do you say that our government makes it hard? I always thought it was an authoritarian government that or or or just a foreign government that wants the ability to inflate away their own debt, and so they're keeping dollars out of their economy. They're trying to avoid dollarization.
Speaker 6:They don't always avoid it successfully, but you look at the US government, know your customer laws
Speaker 1:Sure.
Speaker 6:For instance. It's a pain in the neck to deal with an American, say, who wants to open a bank account in Germany. I've tried to do this. Mhmm. That's because of the US government putting reporting requirements on the German bank.
Speaker 6:They don't want your money. So a lot of the problem is USG, not, you know, Argentina, Russia, whatever. It's both. But in fact, if people just hold dollars, that is usually tolerated, and, it's a workaround for both.
Speaker 1:I wanna talk about Google's acquisition of Windsurf. Google paid a licensing agreement. They acquired 50 or so engineers from Windsurf. The CEO and the share and the preferred shareholders got paid out by Google. Roughly 400 or something employees were left in a ghost ship in the RemainCo.
Speaker 1:They also had a $150,000,000 roughly on the balance sheet, and so they were scooped up by Cognition. I'm not sure how closely you follow the drama, but my question was, is this a Pareto improvement or a Caldor Hicks improvement for Windsurf stakeholders as a whole?
Speaker 6:It raises the cost of capital, and we're gonna need more covenants to limit this happening. Like, say, I start a company, raise money, and then just pay myself a huge dividend for all the money. Well, that's typically against the law because there's a covenant in the contract saying I can't do that. So we need new covenants to cover these cases. Those will be harder to write, but the market will respond.
Speaker 6:In the meantime, it's a problem.
Speaker 1:Do you believe that the the problem should be solved by employees demanding a new covenant, employees demanding more strict employment contracts. Where will this solution sit?
Speaker 6:It depends how you're doing the financing, but very often in other settings, it's done by the bondholders. The bondholders want a covenant that you can't just drain all the resources out of the firm. The more the firm is based on human capital, the easier it becomes to do that because human capital leaving is not monitorable in the same way that a big cash dividend is monitorable. Mhmm. But we'll figure out ways of doing it.
Speaker 6:Maybe it will require arbitration, but this absolutely needs addressing. Otherwise, you just keep on starting up companies, ship the talent out somewhere else, in essence, sell it twice. Bunch of different people are screwed over. For the next person who tries it with no intent of doing that, the cost of capital is too high, and that's the the longer run problem. But, again, markets are very good at solving problems like that with covenants.
Speaker 1:So this is, this will be solved by the market. This is not an FTC issue?
Speaker 6:I would not involve the FTC. I don't like them. I don't trust them. Their previous boss, their current boss, they're both bad news. Neither knows any economics.
Speaker 6:My goodness. They're a nightmare. Why would you call them on the phone? They're gonna make it worse.
Speaker 1:Well, thank you for the for the for the solid breakdown and being very clear about your opinion. This is fantastic, Tyler. Thank you so much for coming on the show.
Speaker 3:Thank you for the update
Speaker 6:My pleasure.
Speaker 3:And your wisdom.
Speaker 6:Good luck with the rest of the day.
Speaker 1:We appreciate it.
Speaker 2:As well.
Speaker 3:Have a
Speaker 1:great day, Tyler. We'll talk to you soon. Bye. Always a great segment. And we have our next guest already ready to join the show.
Speaker 1:Austin, welcome to the stream. Let's play that. I wanna play that intro song a little bit. I like that intro song. Oh, maybe he's already here.
Speaker 1:Maybe you just get Ashton Hall. So we got
Speaker 3:an issue with the soundboard, but we're gonna make a sound for you.
Speaker 1:Yes.
Speaker 3:A hand crafted sound.
Speaker 1:Kick us off with the news and an introduction on yourself.
Speaker 9:Thanks for having me, guys. Honored to be here. Everybody, I'm Austin, cofounder and CEO here at Unifi. Today, we just announced a $40,000,000 series b led by battery about wow. We're getting
Speaker 1:Led by who? Who? Doesn't matter.
Speaker 3:Come here.
Speaker 1:It does matter. Congratulations. Awesome firms. Awesome firm leading. Awesome firms along for the ride.
Speaker 3:Awesome. Beep a bunch of questions, but give it give us a quick history on yourself. You said earlier, was it the proudest day of your father's life was when you signed an offer to work at Ramp? And then the second proudest is today?
Speaker 9:It's good. It was. Yes. It's, it's been a it's been a big couple years for me with me and my dad. Took a lot of years going through college to get to that point, but Mhmm.
Speaker 9:Quick background story. So originally joined Ramp back in 2020, on the, on the growth product team. Really attracted to just, like, the talent density that existed even back in that period of time. Spent a couple years there working on the growth product team with a bunch of incredible folks I know y'all know well, including Sam Buck, you know, folks like, Pavel you had on the show, the Crosby eyes, etcetera. So ton of great folks.
Speaker 9:Spent a couple years there and, spent a lot of time thinking about distribution from an engineering led perspective. And so joined, saw everything that was happening with OpenAI in 2022, and it felt like the nexus of go to market and AI was starting to happen. Didn't know the chat should be t and things like that were were about to drop, but ended up starting Unify beginning of twenty twenty three. Pretty quickly raised a seed round from a combination of OpenAI, Thrive, Emergence, and we're off to the races. Fast forward two and a half years, we're a 50 person team today serving a bunch of incredible companies like Cursor, Perplexity, you name it.
Speaker 9:And so, just grateful grateful to be here.
Speaker 3:K. Explain the product like I'm a new grad, SDR.
Speaker 9:So if you're a new grad SDR, the pitch of the product is you used to have to push a million buttons just to get to the place where you'd actually do something that was valuable to talk to a prospect. We take care of all that on your behalf. So example is you might show up in the morning. You're gonna make your list of the 25 people that you wanna reach out to based off of, okay. This person started a new job.
Speaker 9:I reached out to John in the past. He is now at this new thing. He started a new job or he got a new promotion. We'll make that list for you. We'll automate all that research.
Speaker 9:We'll also deploy agents to go get 50 other data points for you. So you can start from the 90 yard line, and then you can just be polishing the messaging and the actual work that we've done for you. But you don't have to you don't have to start by just, like, manually combing through LinkedIn or manually combing through a a database like Crunchbase. So we'll do all that work for you.
Speaker 3:That makes sense. What is the sentiment like among sales leaders, all the way through kind of the the entry level roles, SDRs, BDRs, etcetera, just around AI broadly? I think the there's been a lot of dialogue recently around, you know, the core challenge with a lot of AI tooling right now is this amnesia. So the the the the the model is really smart, but it can't remember lessons from at any point in history. You know, there's some memory, but not the hard won lessons that you get from going out and doing 100 phone calls with customers, things like that.
Speaker 9:Yeah. That's a really great question. So the evolution of the sentiment has changed over the years. So 2023, we started the company. There was a lot of aversion to using AI to do the end to end job because it just wasn't there.
Speaker 9:Wasn't remotely there. Agents could sort of, you could see them coming, but we weren't in a place where it felt like that value was tangible. And so it was really in early twenty four where it started to feel like the world started to believe that even as a seller, the best thing for me to do was to adopt AI to try to automate a bunch of a bunch of what I'm doing. But to your point, exactly '24, it's been this, like, version one point o of AI where products are dumb. They they can do basic research tasks for you.
Speaker 9:They can do them over and over again, but they have no context that they've done that task four times in the past. One of the things that we're really excited about that we launched a couple months ago is something we call our observation model, which is actually this underlying primitive that looks very different than anything else that's existed. Basically, it looks like you have a memory associated with every person you've ever talked to. And that memory is not a database. It's actually a flexible set of context, just a big text doc, basically, that is every interaction and every piece of notable information between you and that prospect.
Speaker 9:And so as an example, let's say we're talking about Perplexity. Perplexity has maybe reached out to, I don't know, Ford Ford Automotive in the past. And they've got some record of all the sellers that they have, and they've contacted them. They've gone back and forth. They may, like, maybe exchange a few ads.
Speaker 9:All this sort of data has usually existed in a bunch of different silos, but we actually built this observation model to join all that together so you actually have one clear set of context. And then when Unify wants to understand, hey. What should I do next? It can ask that set of context. What do I know?
Speaker 9:What's the most relevant thing that I can surface right now? And let me go ahead and hit on that. And so we really see that as being the evolution of where these AI products are gonna go to just make them that much that much smarter and more powerful.
Speaker 1:Feels like, one of the really, like, just lay up use cases for artificial intelligence in the sales context is just data hydration, cleaning up the CRM. But I'm interested to hear about how high the walled gardens are in a business context. We've heard stories about Glean getting pushed back from different big tech companies, and it's one of those weird things where every company says, yeah, it's your data until I wanna give it to their competitor potentially that's overlapping. So what data sources are are are particularly like AI friendly these days? And and what is the shape of the of the garden and the walls of that garden these days?
Speaker 9:It really depends on, I think, the overall data strategy for the company and just, like, what their strategy is built on. And so to give you one example, Salesforce, historically, their advantage is built on being a fairly open ecosystem. So Salesforce, the AppExchange launched, call it, like, ten, twenty years ago at this point. It's been building moats around Salesforce as people have connected tens of applications into the product, and that sort of built the stickiness. You'd have 25 different products that all integrate through Salesforce that happens through this open ecosystem connectivity.
Speaker 9:My my gut says that the platforms that are built much more on open endedness like something like a Salesforce are gonna continue to remain open as that's the core value prop of the product, and that's the reason why they haven't mowed itself. But I think products that have historically been a little bit more walled off until, know, Slack is an example of that. We'll probably continue to stay that way and trend even more in that direction. Generally speaking, people haven't been super privy to give out Slack information. They wanted to keep that in, especially within an organization.
Speaker 9:And so I imagine we're gonna see those things clamp down even further. And case in point is the is the glane example you brought up.
Speaker 3:Do you have a thesis around, sales copilot type products? You can imagine this is a sales call and you're, you know, running an LLM in real time to to give you the next answer. I don't think you guys have one of those, in your suite of products but I'm curious how you think about that category.
Speaker 9:It's definitely super powerful. I mean, you see what's happening with with Cluey right now. Right? And what's going up.
Speaker 3:It's That's like a great question.
Speaker 6:Let me
Speaker 1:let me just real quick.
Speaker 9:It's it's wild though. And I think, we're only at the beginning of that period of time, and I think the the way in which people absorb information is gonna dramatically change over the course of the next couple of years as we get more and more used to these products. Today, the closest that we get to that in our product is that we've got a a composer for for emails and for anything you wanna do in Unify. And next to that, you've got all these AI con all these AI nuggets and AI research, tidbits that we've done for you alongside that. We're, generally speaking, believers that the faster your product is, the more real time it is, the more addictive it is to users, the more helpful it is to users in that context, especially in a work context.
Speaker 9:And so we're gonna keep pushing the product in that direction. Something like a clue is, like, the far flung example of that. We're not quite there yet, but I imagine the world is gonna keep moving in that direction.
Speaker 3:That makes sense.
Speaker 1:I wanna talk about, I mean, your your your your website's tagline is scale your revenue team's creativity. And I'm wondering if there's any sort of like just like really creative sales solutions. Like I was talking to Sam Blonde a while back. He was working with Parker Conrad for a long time and said like one of the best campaigns he ever did as a sales guy, he's like a SDR for a long time, was in head of sales, was like sending bottles of champagne to people. Because like they just open it, then they have a phone call, they have this nice thing.
Speaker 1:And
Speaker 3:so And it becomes incredibly rude not to respond to the email.
Speaker 1:Exactly. And so I'm wondering about these like weird squishy like the handwritten note. And and in many ways, feel like these creative these creative deal closers like the the unexpected text message from a friend who's already using the product is the thing that gets you to actually go and say, yep, I'm ready to onboard fully. I get my company on this new product. But is it it it is there Are there any are there any like world I feel like a lot of the creativity in in in sales is specifically showing the client that I'm not using software for this.
Speaker 1:I handwritten that note. I I I sent your I got your address. I sent you a bottle of champagne. And so is the goal to more just like remove all the barriers to let the humans do the creative things? Or do you think there's a world where we can use AI tools to speed up those creative out of the box solutions that might be uniquely tailored to just this one company strategy?
Speaker 1:They're the only one that does this weird thing, it's working. And they found this alpha, and they stick with it for a long time.
Speaker 9:Yeah. Big fan of of Sam's, and he's done a bunch of incredible outbound campaigns over the years. My thinking is that what will happen is what the thought behind all these things and the reason why it matters, this all comes back to taste. Right? I think people and more and more are talking about taste in the world of AI, and it's all about knowing what's relevant at the time, knowing what's gonna resonate with someone personally, and being able to do something that feels really delightful.
Speaker 9:So as an example, like, thing that we did as part of our fundraise announcement today, we put out, about 25 Cameos that we had custom built for everyone. We've got one for you guys on the way right now. So we'll have it
Speaker 7:to you later.
Speaker 9:Like, things like that that are based off of someone's personal experience and show you thought about it, Doesn't really matter if you use ChatGPT in the brainstorming process. Right? What matters is that you got the idea that originated from something special, and then the actual end delivery is the same quality you put out as a human.
Speaker 3:It's what the person feels.
Speaker 1:Yep.
Speaker 9:Exactly. Exactly. But I think ultimately today, AI doesn't feel, and so it can't really use that judgment. There's a reason why, like, in the world of content and in the world of the stuff that we do here, it's like, you just can't AI that. It just feels bland and generic, and I think that's gonna continue to be true in a sales context.
Speaker 9:What you need is a human behind the scenes who's providing that little touch of, like, what it means to be a person and what it means to be a friend. And so we'll continue to lean into experiences that make it easier to stay on top of those friendly experiences, but, but just get easier over time to actually execute.
Speaker 1:Great. Jordy, anything else?
Speaker 3:I got a bunch more questions, but we'll save it for another time. Thank you for joining. Congratulations. Congratulations on the new raise.
Speaker 1:Get back to work.
Speaker 3:Get back to the garage. Sure you guys have a bunch of people to hire to Yeah. Just deploy that capital.
Speaker 1:We'll talk to you later.
Speaker 9:Thanks for having us, guys.
Speaker 3:Thanks for coming on. Appreciate it. Cheers, Austin.
Speaker 1:In other news, Apple is reportedly planning to invest $500,000,000 in a rare earth magnet startup. This is MP Materials. They're gonna build a new recycling facility in Mountain Pass, California. Currently, they recycle rare earth They they take recycled materials and they make rare earth magnets in Texas. There's a huge Wall Street Journal profile on MP Materials, and now there's news that they're working with Apple.
Speaker 1:My takeaway is that this it shows that Tim Cook is actually thinking about long term supply chain strategy, and it's this it's just funny
Speaker 3:How much do think MP Materials is up in the past five days?
Speaker 1:I have no idea.
Speaker 3:85%.
Speaker 1:Let's go. Bring the gong. 500,000,000. Do it. Let's
Speaker 3:do it.
Speaker 1:Hit that gong.
Speaker 3:I'm gonna warm up the gong properly.
Speaker 1:Yes. Yes. Yes. We've gotten some notes that you must warm up a gong before you hit it. Also, hit the gold part, not the center.
Speaker 3:Really?
Speaker 1:Yes. That's what that's what somebody said in the comments. Is that better? It's about the same. I don't know.
Speaker 1:I'm not I mean I don't know enough about gongs. I'm sure I'm gonna be an expert in twenty years when we're still doing the show. But, I thought this was interesting because you know Apple's a huge company. Tim Cook's a legendary operator. And That's correct.
Speaker 1:There's just something about being a big company that even if you're seeing, oh, the current thing on X today, everyone's talking about supply chain in China being a risk. It's gonna take years to actually build up another supply chain. So this kind of tied to the re industrialization story. There's a Yeah. Like, you can start a new company.
Speaker 1:You can actually build something like before Apple can really like turn the massive cruise ship that is the or the battleship or the aircraft carrier that that the company is. But it seems like it's happening and this seemed like a huge white pill. So I was excited to talk about it. Totally. And we should and we should dig into MP Materials more deeply soon.
Speaker 1:They're up 22%, I guess just the day that this profile came out. And seems like a very very exciting company. And honestly, when we were talking to the co founder of CoreWeave, I you know, there's this, you know, we all learned about chips, then ASML, and then SK Hynix, and memory. And I feel like rare earth minerals and rare earth magnets are gonna be the next thing where everyone's learning about it at the same time. And a lot of people already have, and they've done pieces on it, but I want to learn more.
Speaker 3:I could see AP doing a rare earth royal oak.
Speaker 1:That would be incredible. Yeah. Like instead of the what was it? Meteorite dial? Yeah.
Speaker 1:The meteorite dial, you get the
Speaker 3:rare earth.
Speaker 1:The rare the rare
Speaker 3:Go through some timeline. I'll be right back. Welcome Chris into the studio.
Speaker 1:Okay. Yeah. Yeah. I'll I'll I'll go through some stuff. I'll I'll just welcome Chris in and and get the intro from him.
Speaker 1:So welcome to the studio, Chris. Good to see you. It's been long. What has it been? Over a week?
Speaker 5:Over a week. I think that sounds right. I'm excited to be here.
Speaker 1:I'm glad to have you. Kick us off with an intro and and a little bit of an overview of the news today.
Speaker 5:Well, look. Before I get started, I should say that if at any point during this interview, Windsurf gets acquired for a fourth time, cut it off and I will there will be no hard feelings. Quick intro on me though. I've been in The Valley for fifteen years, working with tech companies the whole time and kind of every stage and variation and just about any role that you could think of. So I most of my career was as as an investor.
Speaker 5:I worked at Benchmark working with early stage companies. Kotu focused on some later stage companies. Before then, I founded a healthcare company called Curology. And before that, I was an investment banker working with big tech companies and helping them taking them public and and do M and A transactions and all that kind of stuff.
Speaker 1:Okay. We'll get into the news in a bit, maybe when Jordy gets back. But the the question I have is, like, as an investor, as a board member, there is generally a you mentioned Windsurf. There's generally a duty to be, like, founder friendly. But what do you do when the founders and the employees are misaligned?
Speaker 1:Like, are you as a board member, are you supposed to vote in favor of what's best for the whole group of founders plus employees as a class? Are you supposed to doubt back the founder if they wanna do something that's less employ employee friendly, vice versa? Like, this feels like the modern debate that we're having in Silicon Valley is, like, the social contract is is reevaluated. How have you processed the windsurf news? What how do you think this changes going forward?
Speaker 1:What what are the next questions that you think venture capitalists and founders need to be talking about to make sure that, you know, when amazing deal happens, everyone's happy about it.
Speaker 5:Yeah. Well, I think your first goal as an investor, you know, we rarely have a lot of power. We have sort of in the best case influence. But I think your first duty is to try to help the founder understand that what's good for the employees and what's good for everybody is sort of the right thing for everybody over the long term. And the ecosystem and your reputation and all that stuff is really critical.
Speaker 5:And so I was delighted to see that everybody got to a very good outcome on this one, and I think that's where it should have landed. This feels like a one plus one equals three kind of thing.
Speaker 1:Yeah. Yeah. It seems like I mean, when the Cognition news broke, we had been talking about like, oh, where could the RemainCo wind up? Maybe it lands at like a more legacy tech company, like the humane team wound up at HP and people were kinda memeing about like AI printers and stuff. And that seemed like, you know, it probably would have been a fine outcome financially, but it would have been like, okay, lot of those people kinda need to restart their careers and kind of get back into the high aggressive Silicon Valley, the high growth startup world that they probably fell in love with, and that's why they wound up at Windsurf six months ago or ten months ago or fifteen months ago.
Speaker 1:But with Cognition, it's just a complete continuation of that aggressive take over the world build something new mindset. So, yeah. I agree with you. Amazing outcome for everyone involved. Obviously, a tumultuous weekend, but we're glad that the plane landed.
Speaker 1:You could move a bit bumpy.
Speaker 3:Some better news.
Speaker 1:Yes.
Speaker 3:We gotta talk about the new vehicle. Yes. It broke in Forbes this morning, but we're happy to have you on here today to talk about it. Give us give us a story. Give us the number, and I'm gonna stand up and get ready to to
Speaker 1:Let's do it.
Speaker 3:Do something back here.
Speaker 5:So it's a $175,000,000 debut fund.
Speaker 1:Let's go. Congratulations. You guys,
Speaker 5:is the Gong like individually mic'd? Because that sounds incredible.
Speaker 4:This is It's about mic'd.
Speaker 3:It's got its own camera.
Speaker 6:Yeah. Yeah. It does
Speaker 4:have its
Speaker 1:own camera. Okay.
Speaker 3:But but yeah, we're always working on the fidelity of the Gong. It's really
Speaker 1:important to to the to the Congratulations. A 175,000,000?
Speaker 5:A 175,000,000, stage agnostic, sector agnostic is the idea. Okay. I'll make a very small number of investments. So sort of eight to 10 core positions. A normal venture fund might have 30 or 40 positions or something like that.
Speaker 5:And the idea behind that was my favorite part of my career was when I was just making my first few investments that were going to matter a lot for me. Because it felt like there was sort of a symmetry between what I cared about and what the founder cared about. Like for the founder of this company is their whole life. It is everything. They live and die with it.
Speaker 5:And I think one of the problems as you get more senior as an investor, you naturally have more companies that you've invested in. Every individual company is gonna matter a little bit less. And so with this vehicle, the idea was create a vehicle where structurally everything will matter to me. It's eight to 10 core investments. Every one of them is going to matter, and I'm gonna work really hard on each of them.
Speaker 1:Stage agnostic, sector agnostic, still, I imagine, not an RIA, not playing in the public markets, not not putting more than 20% of the fund into secondaries. Is that roughly correct? It's crazy I even have to ask that question, but
Speaker 5:Yes.
Speaker 1:We are in crazy times. Is it even possible to start an RIA at this scale, or is that something that only the mega funds are thinking about?
Speaker 5:No. It's definitely possible. It just it eats into some of your management fees, and it requires some various compliance obligations that you have to get used to. You probably have a second phone and some things that are like you hire some compliance consultants and all that kind of stuff. I had looked at it because I do like buying secondary from time to time and just decided against doing it.
Speaker 5:There's also some additional rules around how you can market the fund and stuff like that. You have to be a little bit more careful when you're in RIA. And so I decided to go the ERA route. It's a flexible vehicle, so I'll do things just kind of of any stage. I will often not be leading rounds.
Speaker 5:I'm willing to lead rounds. The idea was because I'll be so selective on the company quality, I think I have to be flexible about everything else. And so I'll try to just show up in a way that is useful and easy to work with.
Speaker 3:How is the concentrated strategy resonating to founders so far? I imagine it's it's a very real differentiator of just saying, hey, you can be one of of 40 bets or you can be one of 10 and I'm gonna do everything in my power to to help you win. Can see how that would resonate, but but what's it been like on the ground?
Speaker 5:I think so far it's working well. You know, I have founders who text me 10 or 20 times a day. I also have founders who wanna be left alone for the most part, and I'm happy to do that also. But I think I think so far it resonates. I like you know, I tell every founder when I make an investment, I just wanna be along for the ride.
Speaker 5:And things will be good, things will be bad. A lot of the time, they'll be difficult. You know, building companies is mostly pain. And I will just try to be someone who eases that along the way and helps you navigate the difficult moments and all that kind of stuff.
Speaker 3:Is there is there an alternate world where you launched this fund prior to Curology? And and I I think it's sort of funny because if you were in that situation you would have said, I had a non traditional back, you know, background for venture capital and it's HBS and Go to and Benchmark and sort of a traditional background but you went and did the hard thing and and built a big company. But but but was it did you have it in mind that I'm gonna, you know, go be a founder, do this, and then come back around to venture? Or or did was it all just kind of an accident?
Speaker 5:I think I was always built to be an investor. I enjoy it, and there's a lot of sort of features of investing that are well suited to me. But I just think it's kind of a rite of passage. If you haven't operated inside of a company, if you don't know what it's like when things are difficult and bad, I think it's kinda difficult to give good advice to a founder. And so I think it was an important thing for me to develop some empathy.
Speaker 5:Like, I try to understand that this is it's one of the hardest and loneliest jobs in the world. You'll have weeks where everything is going wrong. And there's sort of, you know, playbooks for navigating each of these things that go wrong, but I think you have to have been through them before to understand how to do it and who to call and what the foot faults are and that kind of stuff. And and, that's sort of how I thought about it.
Speaker 3:What was the fundraise process like? 175,000,000 for a first fund. It's a it's a big number. But I heard from a little birdie that you got some pretty insane LPs in this one. So it sounds like you were doing something right.
Speaker 5:Well, I think that's that I well, thank you for that. And I think it's right. The, I it went relatively quickly. I was real lucky because I had a few LPs who were just fast and early believers, and everything else sort of ended up forming around that. And so I ended up sort of many times oversubscribed and ended up with a group that I'm very, very happy about.
Speaker 5:I think most of them, I'm not allowed to say their name, but the ones that I can say are Adams Street Common Fund, Northwestern University, Howard Hughes Medical Institute, and a bunch of causes that I'm I'm very excited to be working for here.
Speaker 3:That's really cool. It's exciting. What do you think, how do how do you think about investment kind of time horizon? If you have a a such a concentrated fund, very possible that you'll meet five companies in the next six months that you'll invest in, but it feels maybe unlikely. Maybe it's more like one a quarter, but but it's hard to plan these things.
Speaker 5:Yeah. When I was raising, you know, everybody says they're gonna deploy the fund in three years, and then they go they end up going a lot faster than that. And so maybe this ends up being two years or something like that, but I just don't have that many amazing ideas every year. And so I part of the reason for the way the fund is structured is it's kind of how I like to work, that I develop a lot of conviction around something over a period of time. But then I like to have a bet that matters.
Speaker 5:I think the single most painful thing for me is if I I find a company and I sort of am able to persuade the founder, I'm able to win the right to invest, and it ends up working, and it still doesn't matter in a material way for my limited partners. That's, that's something that that I think is, is something I don't wanna deal with. And so I that's the reason for the sort of bigger bets, the concentrated strategy. And that that requires, I think, going a little bit slower also because there just aren't that many companies that that will meet the bar.
Speaker 3:That makes sense.
Speaker 1:I have a question about venture markets generally loosely in the context of of Windsurf. But I'm wondering if it feels like right now the labs are on a buying spree, not just OpenAI and Anthropic, but DeepMind, and you could see acquisitions happening all over the place. And it one framework to think about it is that they're all just buying call options. Anyone who's got a unique technical direction or unique technical talent, the labs are just happy to pay any price because maybe it's 1% of infinity if you solve super intelligence or maybe it's, hey, we already have, you know, Mark Zuckerberg has a massive business in, you know, delivering ads. If you make that 1% better, you've added $10,000,000,000 to the market cap.
Speaker 1:So what's a couple billion in in acquisitions going out the door? Totally makes economic sense. But my question is is, does this change venture capital underwriting at any particular stage? Like, it it feels like you really wanna be backing, I guess, teams that could be, you know, acqui hire talent because it gives you this, like, liquidity option, but then maybe the real alpha is finding the
Speaker 3:But at the same time, very who
Speaker 1:are on mission.
Speaker 3:If you look at the capital deployed into windsurf Yeah. Obviously, the majority of the capital didn't get a tremendous return despite it being a big headline number.
Speaker 1:Is that just because A lot of unknowns that does the the seed and they didn't return
Speaker 3:majority the money? Of the capital came later, and then I think it was probably at at somewhere around a billion.
Speaker 1:Okay. Yeah. I don't know. But I mean I
Speaker 5:mean I think on the underwriting question, I think in the history of our industry, there was always like a hard and fast rule that you always backed one company in a space. There was always going to be one winner. And then I think as the markets have gotten progressively bigger and, know, there's there's like one winner in search for a long time and one winner in operating systems. And as the markets got bigger and bigger, you started to have, like, two player markets. Like, you have iOS and you have Android.
Speaker 5:And then they got bigger, and you have three player markets. And you have, you know, the cloud, AWS and GCP and Azure. And I think AI is going to be the biggest market of all of these. And I think one of the ways that it changes underwriting is that there's probably gonna be more winners in each space than we expect. And I think you see this a little bit with Cursor and with Windsurf, and you see some, like, really high quality companies.
Speaker 5:I also think it changes underwriting because it feels like m and a is coming back a little bit. And I think there's sort of some a cause for optimism around that.
Speaker 3:It's great. Anything else, Jordan? No. Join any join any boards recently? I don't know if you can talk talk about that kind of thing.
Speaker 5:Yeah. Yeah. Joined the board of Perplexity recently.
Speaker 1:Congratulations. Let's go.
Speaker 3:I wanted to give you an off ramp there in case you weren't ready to talk about it.
Speaker 5:I it's a product I use 20 times a day and a half since it came out for investment research and everything else and one of the the best executing teams I've ever been around. So I'm very excited to be a part of the effort.
Speaker 3:Fantastic. That's awesome. Yeah. Yeah. I find myself using it every time we record.
Speaker 5:Yep. You guys gotta try the browser if you haven't.
Speaker 1:We we we demoed it live on the stream. Tyler, our intern used per the Perplexity Comet browser. Had some good feedback for you. It was good.
Speaker 5:Amazing.
Speaker 3:Awesome. Well, congratulations. I would say to the full partnership, but you are the full partnership. Yeah. Is that correct?
Speaker 3:Are you gonna adding anybody to the team?
Speaker 5:Me and the head of operations.
Speaker 1:Very cool. Lee. Amazing. I'd it.
Speaker 3:Bet on yourself. Love Awesome, Chris. Well, congratulations. Thanks for coming on. I'm sure we'll have a Thanks
Speaker 5:for having me. We'll see you guys.
Speaker 1:Good seeing you. Cheers. Talk to you soon. And we have our next guest already here in the waiting room, Dick Lucas. He Do you
Speaker 3:wanna do some backgrounds? Video going viral today. There
Speaker 1:he Wow. Look at that background. How you doing?
Speaker 8:I'm good. I'm good. How are you guys
Speaker 3:Looking sharp in the suit.
Speaker 1:You you look like you have changed since the viral video.
Speaker 8:I I know. I know. Actually, I, my shirts are, my shirts are dirty. This one's not. So this is the same outfit, same pin as well.
Speaker 8:So congrats on the, success of the show. It's been awesome to watch you guys cook. So thank you for fitting me in today. Appreciate it.
Speaker 3:Yeah. Thanks. Awesome. I saw your name for the first time this morning when you started going viral. Great silhouette on the video.
Speaker 3:It looked like you're in The Palisades somewhere. Yep. Where where are you just give give us a full history on yourself and and maybe what what inspired you to get involved politics or mud wrestling call it.
Speaker 8:Awesome. Well, think it really starts in, it starts in high school when I got my first computer dig in the dig.com days. That's when I got really into technology, and got really into software and saw this whole boom taking off. Was like, this stuff's really cool. I didn't think computer science.
Speaker 8:I thought that was only for smart people, so I didn't declare my major for CS until sophomore year of college. Like, it was a lot I was a history minor. Was like, you know, I'm gonna just do the CS thing. It kicked my ass, but but I but I got through it. You can get a bachelor of art of arts in computer science if you could believe that.
Speaker 8:And that's what I got. So I've I've had a long belief in in in technology, and then from there, started, doing software stuff. I was an Android developer for several years. So I was in the code mines. Started an agency with a homie, with Sawyer, and now we're, yeah, we're cooking on that.
Speaker 8:And what inspired this really is is I was creating voter guides. I was like, okay. California's obviously run run horribly. If maybe if I just read all what the candidates are saying and go deep on, like, know, who's running for waterboard? Who's running for this?
Speaker 8:Who's running for that? And actually, no one even knows what a state assembly person is. I'm running for state assembly. Most people don't even what that means. So I'm like, okay.
Speaker 8:If I go and, like, look at these candidates, there's gotta be people that are out there that are good. And I'm going through these campaign websites, and I they don't even they barely even say what they believe. There's no competition. There's not even debates at these local levels. And I'm just like, there is a huge opportunity here for someone that is willing to just get themselves in the game, put a couple videos out there, say some common sense stuff, and shake things up.
Speaker 8:So that's that was really the inspiration. And
Speaker 3:So tell us what tell us what running for state assembly means. What what is the role that you would like? What does that look like? And then what are the what's the process to get there?
Speaker 8:Okay. So the primary is in June. It's in June of June of twenty six excuse me, June of this year. And excuse me, June next of twenty six. So there's 80 assembly members, right, in in California.
Speaker 8:Each state has something different but it's basically like a mini senate and a mini house of representatives, just like the federal government. So you have 80 assembly people you have 40 state senators. And unlike, you know, in California, there's 80 districts. I'm in the 50 First District, Santa Monica, West Hollywood, Westwood, other parts of Hollywood, Beverly Hills. And each district has assemblymen and then each and there's also state centers as well.
Speaker 8:So same thing with federal government. There's stuff that comes out of the senate, state senate. There's stuff that comes out of the state assembly, and that's how legislation gets passed. That's how the machine works. And right now, what we've seen is it's basically one party state.
Speaker 8:Now I'm not I think the left has good ideas. I think the right has good ideas. I think that there's opportunities on both sides. The problem is when you lack competition in a system, which is what we have in California, it becomes sick. It becomes ill.
Speaker 8:I mean, we see this in every single institution or system since the dawn of time. You need to compete. There needs to be pressure on the system or it collapses from within, and that's what we're seeing in California. We're starting to see a small shift, I'd say. But you know what?
Speaker 8:What really broke the camel's back for me was fires happened, and people wouldn't even hear about the wildfires in the Palisades, eating fire out
Speaker 9:where where
Speaker 8:I grew up. People wouldn't even hear. They wouldn't even wanna listen if you said, yo, maybe we could have done some things better. The Santa Yenes Reservoir that went dry in the Palisades was down for eight months. I talked to I talked to a state senator.
Speaker 8:I went to a meet up with him. I was like I was like, bro, what happened there? He said, well, it's unclear how much that would have actually helped. It's like, dude, if it helped 5%, if it helped 10%, it helped 50%, like, you couldn't even really have a discussion about it. And I said, okay.
Speaker 8:This is the the system itself is is is completely sick where where we had a whole bunch of stuff burned down. Our mayor in Los Angeles was gone on a trip. We had fire hydrants go dry. And and people, in my network, people didn't want to talk about it. So I guess the only way to talk about it, you gotta run.
Speaker 3:Yeah. No. I love it, taking action. We we covered the fires. We John and I are both here
Speaker 1:in LA.
Speaker 3:Uniquely, John lives in Pasadena. I live in Malibu. We both had to get out of town for a while. Missed a show. John was covering one day.
Speaker 3:Was really the It's only show. I've missed this year.
Speaker 1:Right
Speaker 3:on. But yeah, but the the it my reaction to the fire is it seemed like there was a lot of excitement around clearing PCH because that was the thing that was most obviously a reminder of the the competency of the government. And so but that's only a very small percentage of of the of of what the over overall response should should look like. I'm curious. Do you know who your real competition is
Speaker 8:Yes. I next year? Yes. I do. Yeah.
Speaker 8:A demo a democrat. He's been in the machine for several years, and that's the other thing. Looking at these people, what they've done, a lot of these people with while I have this audience, if you are considering running, you should run for office. You should look at who your local person is and you should run because not YouTube, all your listeners, but YouTube as well. Because you look at their website, you look at their CV, you look what they've done.
Speaker 8:A lot of these guys are community organizers. I still don't know what that means. And also people they're they're lawyers or they're people that haven't built anything or created any jobs. So it's like, this all my smartest friends, no one even thinks, and I'm sure it's same with you guys. No one even thinks about going into politics.
Speaker 8:So it's like, if if you if all the people that are smart or driven in your network aren't going in to politics, who is going into politics? And, well, we see players, basically.
Speaker 3:Yeah. No. That makes sense.
Speaker 1:What's at the top of the stack in terms of low hanging fruit? You get in, what do you wanna push on? What do you wanna change? What are the most exciting or, like, tractable problems that you think you could
Speaker 8:you could I think the biggest thing that's resonating right now is, the cost of housing. Mhmm. You know, there's the the phrase that the economy is stupid and obviously, we need to work on that too. But housing in California is a 100% the national average, same with our, similar gas prices. Our gas utility prices, gasoline is the highest in the country, as you know.
Speaker 3:Ranked is housing not a which is is not partially due to the market but also due to just massive taxes that the government has voted to apply to every gallon
Speaker 1:Oh, for for for gasoline. Yeah.
Speaker 3:So you drive across the border. It's it's not like a supply demand thing as much as it is.
Speaker 8:Or a top eight oil producing state. It had the highest highest gas price in the country. It doesn't make any sense. There's obviously there's also some good things that we want clean gas. So California puts a lot of, you know, restrictions on refiner refiners on, you know, they wanna pay for the top quality clean gas so we don't have we don't have, you know, Smoky Valleys, and it doesn't look horrible like it did in the sixties.
Speaker 8:So I get all that, but it's it's completely out of whack. Yeah. So, the other thing housing, we need
Speaker 1:to Yeah.
Speaker 8:We need to make we need to make it easier to build. They did just pass the Dems did just pass something, and I tried to understand it. You can go read the, you know, alleged you can read these bills and, like, they they talked about it as a big win, but it's it's it's difficult to even understand what's going on, like, in terms of what they got done. You know, they they're making it easier to build now recently as of, like, July 3 near transit areas. And you go read the bill and it's, like, 30 pages of it's like, is this making it easier?
Speaker 8:Why isn't it just say, like, you can build here. If you own the land, you can build here. Like, this is it's completely out of whack. So, we have a supply problem here. We need to just make it a whole lot easier to build.
Speaker 8:And, you know, there's people talking about freezing the rents. We can do better than the funny thing is is the people that lie to you will say, oh, we're gonna freeze the rents for everyone. That's not even that good. We can do better than freeze the rents. We can actually lower if you add supply.
Speaker 8:And we've seen this in Austin. We've seen this in other cities. And my view is there's 50 different experiments going on everywhere in our country, every state. You just look at what works. Where are prices coming down?
Speaker 8:Where are businesses going? And you just fall yeah. So it's like we have the tools right here. I I I don't I'm not the smartest guy in the world. I know that I have a lot of respect for people in technology because I think they're epic.
Speaker 8:I think they're smart. I think they they raise the standard of living for everyone. And I'm not gonna, you know, invent the next nuclear reactor or whatever. So I'm looking at this. I'm like, this is an opportunity that I can actually you know, I'm smart enough and it's like, we have 50 experiments.
Speaker 8:Let's follow what works and let's just do it.
Speaker 1:How can people support you? How do people like, who who are your constituents? Who will actually be voting for you? So it doesn't sound like it's just everyone.
Speaker 3:Do you cover are you gonna be covering the Gunda or is that out of range?
Speaker 8:No. It's out of reach. It's out of reach, unfortunately. I'm a be you know, to represent those guys. But dicklucas.com, my biggest following is on x.
Speaker 8:Damn. You got me sweating, boys. I'm fired up.
Speaker 3:Let's go. Let's go.
Speaker 8:Dicklucas.com. Stoked on that. Yeah. I'm not taking any money right now. We're just gonna see what noise we can make.
Speaker 8:The people that will vote for me are the people, like I said, in my district.
Speaker 1:Yeah.
Speaker 8:And I don't I think very few of those people have seen this viral video, so I wanna do two things. I wanna get the word out with you guys and with technology people and the people in my network, and the second thing is ground game. I gotta knock on doors. I gotta I gotta talk to people. Now that I have a website, my video up, I'm gonna just go door to door and be like, yo, let's let's talk.
Speaker 8:Let's I I actually wanna hear what what people obviously, what's their biggest concern.
Speaker 1:When you say knock on doors, do you mean literally knock on doors?
Speaker 8:Yes. Yes. Door knocking is very effective in these local races. You just have to you just have to do it. Like Yeah.
Speaker 8:Yeah. How many how many yeah.
Speaker 1:Do have to you have to quantify how many doors it is? Break it down, guess. Well, if there's
Speaker 8:a 100 there's a I think my district's 490,000 people, something like that, or eligible voters, something like that.
Speaker 1:It's pretty big. Thousand, you do, you know, yeah. I mean, you got what? 300 a day. Okay.
Speaker 1:You can you can get through a bunch of those.
Speaker 8:Mean, it's
Speaker 1:do the math.
Speaker 8:I mean, it's huge. Yeah. And I'm gonna be working while I'm doing this. So it's like, I'm gonna do
Speaker 6:Good luck.
Speaker 8:And I
Speaker 1:have a
Speaker 8:kid coming in November, so I'm like, let's just see what kind of noise we can make. And, yeah, I'm excited to to start knocking on doors and let's just see what we can Technology is the only technology is the only way you get more for less. There is nothing else. Yeah. Yeah.
Speaker 8:You can make processes better, but fundamentally, that's the only thing that you would get more for less. It's the only thing that raises standard of living for everyone. So I don't know why people have such an aversion to it. I'm just trying to be like, this isn't left or right. Let's just let's implement things that make our life better That's for sure.
Speaker 8:Make everyone more rich and prosperous.
Speaker 1:I love it.
Speaker 3:I love it. Yeah. California, despite, you know, shooting ourself in the foot over and over for decades. It's still amazing place to live.
Speaker 8:Still amazing. So
Speaker 3:let's just you know stop shooting our self in the foot. Get some common I
Speaker 8:think can I think we can have a bigger economy than China? I mean straight up we can be let's go second. Everyone Newsom fourth. We're top four. We're top five.
Speaker 8:And, yeah, we are. Not because of you. I think we can let's just let's do this. It's possible. Let's do it.
Speaker 3:Have you met Gavin Newsom?
Speaker 1:You gotta get on phone.
Speaker 8:I have not. I have not.
Speaker 1:You you gotta reach out to him. Get him get on his podcast because he's had all sorts of people. So that would probably
Speaker 8:be best big time enough for him yet. I think now that I've done this, I'll send you I'll send him this link and he'll say, okay. I I I know it. I know what Jordan and John are doing. Okay.
Speaker 8:Yeah. Come on. It's time.
Speaker 3:It's time. Well, thank you for doing this. Yeah. It is truly a sacrifice. Is Yeah.
Speaker 3:It is gonna be an absolute slog, but it's worth doing. And somebody's gotta step up and do it, and it it can start in your district. And we'll have to have you back on as as the campaign gets closer.
Speaker 8:Appreciate it. Appreciate it. Thank you. Thank you gentlemen so much for having me on.
Speaker 6:Really
Speaker 8:really do appreciate Great talking.
Speaker 1:We'll talk to soon.
Speaker 8:Great talk. Good luck. Bye.
Speaker 3:What a sign of what a sign of respect joining with a suit with the flag. Totally. Mean, he checked both boxes. Yeah. A lot of people bring the suit, they don't bring the flag.
Speaker 3:Yeah. And he should get a California flag up there too though.
Speaker 1:That'd be great.
Speaker 3:Yeah. The
Speaker 1:bear. He loved the California
Speaker 3:flag. What else we got? We got some timeline.
Speaker 1:So Michael Truell, the founder of Cursor released a very cinematic kind of like a podcast conversation with Patrick Collison, the founder of Stripe. And it's very cool for a few reasons. But it has the aesthetics of the Johnny Ives Sam Maltman video.
Speaker 3:So you just immediately assumed?
Speaker 1:Immediately. I was like, oh, there's a deal they're acquiring, Cursor. And I don't that's not the news. I don't even think there's a rumor, but there's something about when you film two CEOs walking into a coffee shop with cinema cameras. I just permanently think acquisition now.
Speaker 1:Thanks to Sam Altman. But I didn't get a chance to listen to this whole thing. I'm definitely going to. It's gonna be it's like a full hour or forty five minutes or something. Seems very cool.
Speaker 1:I love these kind of conversations. I and I think this is like an interesting untapped media product where it's not cursor starting a podcast. It's just a one off really cool thing between two CEOs and and they're
Speaker 3:Yeah. They're not making a commitment of putting out a video like this once a week.
Speaker 1:No. It's just like
Speaker 3:know, a couple times a month.
Speaker 1:They're Yeah. They're just like both technical CEOs and so you look at the list of topics. It's like writing your first startup in small talk, Lisp, chatbots, bread Victor and Dynamic Land, Coinbase's a code base's big bang moment and MongoDB, rewriting Stripe. How do you, Patrick Collison, use AI? Changes to GDP slash total factor productivity, Unexpected beneficiaries of AI.
Speaker 1:So they're just having like the conversation that they probably have when they just hang out and get dinner together, but they're just recording it with cinema cameras and great audio in a coffee shop, then just putting it on the Internet. And I think this is a very interesting new new form of like going direct. It's like, it really helps me understand who Patrick is, and who Michael is. And it's and it's in this like, they're both insiders. They can just have the conversation they want to have.
Speaker 1:I feel like this is great for both of them for recruiting. I don't know. I was just like, I I haven't watched the full thing, but it just felt like a cool new modality of like content in the startup world. So aside from the confusion about potential acquisition announcement, it it it Acquihire. It it seemed really really cool.
Speaker 1:And and I was excited to see it go out. So go give it a watch if you're if you're looking to to spend forty five minutes hanging out with two absolute absolute amazing CEOs talking about AI and coding. In other news, Andreessen Horowitz managing partner Scott Kapoor has been traded to the US office of personal management.
Speaker 3:He's actually poached. No. Course not. This is obviously This I'm sure had been in the works for a while.
Speaker 1:Was officially sworn in today. I think it was announced. I think he passed confirmation or something. But very for Scott. Congratulations.
Speaker 1:Going
Speaker 3:into the government is not very sexy. Yep. It's not high status. Yep. But like Dick just said, it's important And step up and make sacrifices to serve their city, county, state, country, etcetera.
Speaker 1:Yeah. We applaud him. The AI war, it hasn't opened a new front on Wall Street. We've talked to a number of founders that are building AI tools for Wall Street. And today, Anthropic giant AI giant, Anthropic, announced the launch of Claude for financial services.
Speaker 1:Finance is a natural fit for AI, given the reams of structured data, says Nick. The industry processes, the big platforms are focusing more and more on fintech products. Anthropic already signed Bridgewater and S and P Global is here for Anthropic. And we saw earlier that Devin got hired at Goldman Sachs. You'll love to
Speaker 3:see that. Was it Citi?
Speaker 1:Both. And Goldman? Both. And yes. So so, Kaplan, the president of Cognition, I believe that's his title.
Speaker 1:He said like, this was the news that we were hoping to launch on Monday. We had this all queued up that we did this big deal with Citi. We're very excited about this, but no one saw it because we were, you know, acquiring the current thing and and and that became the story. But that was very exciting. So, all the big AI companies are figuring out how they can plug in to the big Wall Street companies.
Speaker 3:And, there's some more there's gonna be some big launches and announcements this week from some of these labs. And we will be covering them as soon as they're ready to share more. Yeah. TBPN was in the ringer this morning.
Speaker 1:Thank you to Katie Bakes
Speaker 3:for Talking about the AI trade wars and tying them into sports, which we know nothing about. But it was cool to see Katie break that down. And then in other news, Shane Copeland over at Polymarket says, eight months ago on election night, we were on top of the world after Polymarket called the election. Eight days later, the FBI broke down my door at 6AM and took all of computers and phones looking for anything that could imply foul play. While traumatic, it etched the story of polymarket's accuracy and the ensuing resistance into the history of American politics.
Speaker 3:And today, I'm happy to announce that this chapter of the story is over. After cooperating and engaging, we've been cleared of any wrongdoing, justice prevailed, God bless America. And of course, Polymarket probe ended by Department of Justice and win for crypto bets under Trump.
Speaker 1:So Congratulations.
Speaker 3:Very cool for Shane. I think we were live recording when the news broke that he'd been raided. Mhmm. But we it was we were not live yet.
Speaker 7:Mhmm.
Speaker 3:Like, we weren't actually live. So we were
Speaker 1:recording Interesting.
Speaker 3:And we got off the show Yeah.
Speaker 1:And we
Speaker 3:looked and we were like, wow. It's insane.
Speaker 1:Well, I have one last post. Do have anything else you wanna go through, Jordy? Can I A it councilman has been charged with petty theft after allegedly removing a Palantir advertisement from the baggage claim area at Friedman Memorial Airport? Trip Hutchinson pleaded not guilty. If convicted, he will face up to one year in county jail
Speaker 3:in
Speaker 1:a thousand dollar fine.
Speaker 3:So did he take this because he wanted it for his garage?
Speaker 1:Game worn. It's a game worn out of home ad. And he must be an out of home ad fan.
Speaker 3:Maxi.
Speaker 1:He must be a huge Palantir fan. And I think it's a I think it's probably just a honest mistake. But I I I think all these great out of home ads, they should find a resting place with they should be auctioned off and you should be able to get them on should put them walls. On our walls. So if you run a great out of home ad, put in put it up in the airport, you're you're you're taking it down, send it to us.
Speaker 3:Throw it
Speaker 1:up here
Speaker 3:in the Ultra Dome.
Speaker 1:In the Ultra Dome. And we will see you tomorrow in the Ultra Dome
Speaker 3:I cannot wait.
Speaker 1:At 11AM Pacific sharp.
Speaker 3:Thank you.
Speaker 1:Five stars on Apple Podcasts and Spotify. And, thank you for watching today.
Speaker 3:We'd love to.
Speaker 1:Talk to you soon. Bye.