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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching. Today is Friday, 09/25/2026. We are live from the TVPN UltraDome, the Temple Of Technology, the Fortress Of Finance, the capital of capital. Let me tell you about ramp.com. Time is money.
Speaker 1:Save both. You can use corporate cards, bill pay, accounting, and a whole lot more all in one place. Be the king of castle. Castle. With ramp.com.
Speaker 1:We got some debates on the timeline. I I identified four debates for you you you don't wanna call them debates though. You wanna call them arguments, fights?
Speaker 2:I thought arguments. Okay. We're throwing down.
Speaker 1:We're throwing down.
Speaker 2:Wouldn't wouldn't someone rather
Speaker 1:side.
Speaker 2:Listen to an argument Okay. Than a Yeah. I don't know. Want to be a a health healthy, mature conversation. Want to I know It's
Speaker 1:Debate. Yeah. First one, Microsoft. Is Microsoft about to have their Muse moment? They've launched Copilot.
Speaker 1:Now they're launching a new product today. Is it going to be a breakout success? Is it going to compete directly with Meta and Muse? Or will it be a different thing entirely because it lives in the enterprise, it lives in the Microsoft ecosystem? Let's go to Tae Kim.
Speaker 1:He says, Shots fired. Microsoft will go after Meta's Muse. From Alex Heath's interview of Satya Nadella, he's doing the rounds. Talk to Deirdre Bosa, Talked to Alex Heath over on sources. News.
Speaker 1:Still cooking. Quote from Satya Nadella or from Alex Heath. He wants to bring autopilot's AI chief of staff to your personal life too. It's not staying in Excel. It's not staying in Outlook.
Speaker 1:It's gonna be cooking dinner.
Speaker 2:Big move going from a copilot to autopilot. Autopilot.
Speaker 1:Yeah. This is
Speaker 2:It says a lot about about their intentions with the product.
Speaker 1:Yeah. Yeah. It is actually sort of the like, you know, is this AGI? Is this not AGI? Like, if you're in the copilot mode, you're sort of signaling we're not really in the AGI era.
Speaker 1:Autopilot feels more like, although it's a term, it's a vague definition, it is significant in the brand term. So, it's a hardened version of Open Claw. The agent gets its own computer, workspace, and memory to work continuously. There was a very funny post from somebody, in Meta who was like, you know, a lot of these agents, like, the the the value prop is that it has its own computer. It has its own virtual machine with some real hardware behind it, so you can have a file system as, I think, eight gigs of storage.
Speaker 1:So you can say, oh, I need you to download some images, files. Like, keep them in your cloud so you can access them at all times. It can obviously build a database, save records, your contact information, your calendar. It can mirror that so it doesn't need to be pinging every service all the time, doing everything in the context window. In the Ben in the Ben Thompson parlays, it can write things down.
Speaker 1:This is very good. This is what everyone was doing with OpenClaw on their Mac minis. This is what people are doing with codex, clogged code on their computers. And codex, of course, has, like, cloud threads that do something similar. The funny thing is that and Matt was like, it's a real computer.
Speaker 1:This is a real computer. And then and then and they're literally using a virtual machine, which is still a real computer. Like, you have access to hardware, but it is a virtual machine. Like, when you're not using it, it goes dark and someone else uses it. And I think there's still some cons confusion because people were like, this isn't a computer at all.
Speaker 1:And it is
Speaker 2:Well, yeah. It it sounds a little bit too good to be true that They're not just is rack Yeah.
Speaker 1:For you and just let you if you sign up once and never use it, that's just inefficient compute resources. But but it's just funny that we live in such a virtual time that, someone can very seriously and basically correctly be like, it is real. It's a virtual machine. It can't get any more real than that. It's like, yeah, it could, but why would you?
Speaker 1:So no one cares. Anyway, Microsoft's doing the same thing. Virtual machine for everybody. It'll have its own computer workspace and memory to work continuously. When I ask about Microsoft's consumer strategy, he points to its 100,000,000 plus consumer subscribers, people that subscribe, subscribe to consumer Microsoft services, Call of Duty, Microsoft Xbox Live.
Speaker 1:These are the consumers. Now, Xbox is still like pretty anti AI. They've they've been signaling like, hey, yeah, we're not gonna lean in. We're not gonna stuff copilot all over Xbox Live. I'm personally I hate that because
Speaker 2:I think Yeah. Wanna I wanna basically like a company built aim bot.
Speaker 1:No. I I I mean, yes. Of course. That's that's funny. But but, no.
Speaker 1:What I want is I wanna be able to text my Xbox and say, hey, like, Grand Theft Auto six is coming out. I want you to preorder it. I want you to get it installed, and I want you to open it up and do the little config because every time you open a game now, it's like downloading an update, accept the terms and conditions, accept the privacy policy, adjust the HDR, adjust where the HUD is on the screen. Do you want any accessibility features? Do you wanna do the tutorial?
Speaker 1:It's gonna blow your mind, but if you press forward on the stick, you'll move forward. Lock in. We gotta do this tutorial. Here's how to jump. It's gonna blow your mind.
Speaker 1:It's the x button. Push it. Now. Push it again. Okay.
Speaker 1:You ace the tutorial. It's like I wanna be able to jump into the game, and I do think an AI agent could help me with that. They can certainly do it on desktop. You can just say, hey, go play the whole game for me. Level me up until I'm ready to really get in the fight because this is my first rodeo.
Speaker 1:But the Xbox been pushing back on it. Microsoft broadly, they're going all in with autopilot. Autopilot should also go to the consumer side. He sees consumer agents potentially cutting out today's middlemen, making that market more zero sum. In the enterprise, he thinks agents will make the market bigger than cloud by orders of magnitude.
Speaker 1:We got room to run. Satya said it himself. He's going to a 300 t, $300,000,000,000,000 company.
Speaker 2:I like it.
Speaker 1:What do you think?
Speaker 2:So, I mean, the the first thought is that, again, everyone is building the exact same thing. Yep. So we we went through this for the last few years where everyone was building Everyone had
Speaker 1:a chat app.
Speaker 2:Everyone's building the
Speaker 1:The funny thing is is is the lore on GPT four, that was first available in Bing. Like, GPT four, the thing that like, GPT three three, GPT 3.5 powered the original ChatGPT. GPT four was only available through through Bing. And then everyone was like, oh, I guess, like, Microsoft's gonna make a plan. Bing's gonna be doing AI and, like, this is gonna be a challenger to Google.
Speaker 1:And then they sort of, like, pulled back.
Speaker 2:But Well, and at that time when when Microsoft was backing up the brink's truck Mhmm. For OpenAI Yeah. They certainly I don't think it was it certainly was non obvious at that time that they would be creating a company that they would ultimately compete with Mhmm. As much as they are, you know, partners. Yeah.
Speaker 2:So
Speaker 1:Yeah. So Peter Steinberger, the founder of OpenClaw chimed in. He said, Microsoft shipped a really compelling product on top of OpenClaw today. We worked with them since March to make the code base ready for large scale deployments. And of course, there's there might be some IP sharing agreement.
Speaker 1:Right? Because didn't oh, no. Because OpenAI hired Peter, but they didn't acquire OpenClaw.
Speaker 2:Open Yeah. OpenClaw. Open source. Yeah. No
Speaker 1:problem. Anyone can build on top of it. Yeah. But what's odd is that I think Nat Friedman stated that they didn't fork OpenClaw. They built something But from there are just conventions.
Speaker 1:And so you wind up having Yeah.
Speaker 2:Yeah. They they got a bunch of stuff. Files.
Speaker 1:It's just like, you know, if you build a web page, like, you're gonna have a product. If you build an e commerce site, you're gonna have a product detail page. You might have a similar site map and architecture. It doesn't mean that you forked Shopify to do that or whatever. Let me actually tell you about Shopify right now since I mentioned it.
Speaker 1:Shopify is a commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. So the the the debate point is how big will this be? How what is the actual impact to Microsoft? How and, the the the there is the cool macro tech story, which is just that the models have advanced to a point where there is a new use case. Like, they're useful in a new way, not just knowledge retrieval, not just go and write a bunch of code.
Speaker 1:They are useful, but that requires a new type of harness. Just like when the when the, models got good at code, the harness became very important. We saw Cloud Code and Codex and Cursor and a bunch of other companies, Cognition, really, like, defined that era. Now the models are pretty good with personal agent stuff, sending text messages, talking to people, integrating with Slack, etcetera. So the harness and the integrations and the partnerships matter.
Speaker 1:So we're talking about Microsoft partners with Amazon. Who's part who's gonna who's gonna be Amazon's dance partner? Who's gonna be Walmart's dance partner? Who's gonna partner with Shopify? How big is the open ecosystem?
Speaker 1:You need a lot of you need a different harness. You need different integrations. And you need a lot of new user education. Because I think there's a lot of people I mean, there's people that are still online being like, these things hallucinate. Like, they have a knowledge cut off.
Speaker 1:Yep. Because they're talking to, like, the voice model or
Speaker 2:Yeah. The main thing with this launch is that I don't think there's anyone on X that's seeing Microsoft launch an Mhmm. An OpenClaw powered agent and thinking, I gotta use that. I'm so excited. I really want it.
Speaker 2:I I Okay. That that that's that's my view and I think it's correct and
Speaker 1:Mhmm.
Speaker 2:You're free to steel man it.
Speaker 3:Okay.
Speaker 2:That being said, they have such incredible distribution. They can still roll this out to a bunch of people who are gonna try it and be like, wow, that's really cool and useful and helpful Yeah. And be the first way that they experience this new paradigm of agents. Right? Yeah.
Speaker 2:And so, as much as, like, I just think there's basically zero excitement from, like, the core insider agent maximalists Yeah. There's gonna be just natural excitement from everyday Windows and Microsoft users.
Speaker 1:Yeah. Yeah. It is it is uncommon in tech, and maybe it's uncommon in x to, like, run your entire organization, your enterprise on Microsoft. The the default tech stack for most startups is Google Enterprise, Gmail. You set up the Gmail account for your for your employees, and then you add Slack.
Speaker 1:So then you're in the Salesforce ecosystem. And Microsoft is there, but usually with, like, one off Excel licenses here and there for the finance team. Does that resonate with you in terms of, like, how these products, like, fit together? There's usually some Microsoft, but you have to go to a financial company or, like, a real economy company to to see, like, okay, these guys are all in on Microsoft as a tech stack, like Outlook down to Bang, down to, you know, the databases and like fully integrated Microsoft. But there are hundreds of millions of people who their life at work is just pure Microsoft.
Speaker 1:And they're like, yeah, I don't use Gmail at work. I don't use Google Calendar. I use Outlook. And for those people, they're like, okay, I get this thing like probably for free added to the to subscription. Maybe we already have some copilot stuff, so this just rolls in.
Speaker 1:And I get, you know, near frontier capabilities good enough. And there's such an overhang in terms of what I can do that just going from, you know, zero to taking advantage of some decent automations is gonna be potentially popular. It feels like it could be more successful than the old copilot, and a lot of that's driven just by capabilities. The models are better. The harnesses are better.
Speaker 1:The integrations are better. And so you can do more things. I think there'll still be a lot of point solutions and a lot of competition. The big question is, like, when is Google gonna fire back? Because are they gonna wait until the next IO?
Speaker 1:Like, that's a long way away, but they do love releasing on, you know, those annual schedules. And so it's like we might get a Google like a crazy Google Open Claw agent, personal agent in mid twenty twenty seven, and then Apple's close behind in, 2035, something like that. Would they they would launch something?
Speaker 4:I mean, Google does have there is Gemini Spark, which is like a twenty four seven always on agent. But like no one
Speaker 1:Does it have a VM? Does it have a real virtual machine?
Speaker 4:I mean, it says even if your phone and laptops are turned off, it'll still keep work. But I I've I've seen like very little Yeah. Like no one's really talking about this.
Speaker 1:They aren't really pushing that because they are pushing Gemini as like the chat interface. But, man, that that the thing falls
Speaker 2:It's so funny and frustrating that Mhmm. You have all these companies building personal agents Mhmm. But none actually has a 100% coverage over the services that
Speaker 1:you monopoly guy over here. You're gonna advocate for monopoly?
Speaker 2:Not advocating it but it would be helpful right now. No. Because even Google, right, g you know, everything around Yeah. The full Google set of products would be absolutely amazing but then you don't have like native iOS integration.
Speaker 1:No. This is the irony of of MONOPOLY is that it's it's it's bad for, you know, pricing in some way.
Speaker 2:But it's great
Speaker 1:for user experience. For user experience, and it's often great for customers. Like, how many times are you advertising on Facebook and you're like, oh, I wish, like, ad manager would just, like, also run Reddit ads and also run x ads and also do my YouTube ads. Like, just do it all. And the same thing is true.
Speaker 1:Even when you fire up, like, a, like, a Netflix app, you're like, oh, is the movie I want on Prime or Apple TV or Netflix or Paramount plus or HBO Max or Peacock, like there's 25 different things. And as a consumer, you're like, I'd love just one, but then they would have pricing power over you. And so you gotta gotta look ahead and know that there'd be dragons if you allow the monopoly to flourish potentially. At the same time, we've been in this odd regime where the monopolies have not actually damaged consumers. Like, this is how Amazon got out of antitrust again was like they didn't raise prices perniciously against their consumers.
Speaker 1:And so the current antitrust law is written such that you have to prove customer harm. It's not enough just to have concentration in the market. You also have to be extracting monopoly rents. You also have to be raising prices, increasing profits, and hurting the consumer financially. And so for something like Google, as a search monopoly, it's still a free product.
Speaker 1:So it's very hard to prove consumer harm because you're just like, yeah.
Speaker 2:G Suite G Suite, they are steadily hiking prices. Okay. But there's viable alternatives.
Speaker 1:That's yeah. That's much more oligopolistic
Speaker 2:Yeah. For
Speaker 1:the technology suite. Anyway, it'll be it'll be interesting to see if there's like, you know, a niche community of like, yeah, I'm a I'm a I'm a Microsoft autopilot guy. I mean, the cloud integration could change things. It just depends on how you're positioning it. Like, if the brand if you talk to somebody and they're like, oh, you know, are you are you a clog guy?
Speaker 1:Are you a codex guy? A cursor guy? Like, all those things say certain things about you aesthetically. You're a muse. Okay.
Speaker 1:We get it. You're like the the boo boo guy. But but if you if you come out and you're like, yeah, I'm actually a Microsoft autopilot guy, that could say two things. It could say Excel jockey, king of the financial markets Yep. Apex predator predator of the economy.
Speaker 1:Or it could say, you know, dropping a nuke on
Speaker 4:COD. Prestige Max.
Speaker 1:Prestige Max.
Speaker 4:What was the It's diamond camo.
Speaker 1:Diamond camo? No. It's dark matter.
Speaker 4:Dark matter. Yeah. That's Yeah. When you get diamond off
Speaker 1:camo. So if it's a if it helps you grind to dark matter, think I they got a winning product there. Don't you think?
Speaker 2:I agree.
Speaker 1:Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.
Speaker 1:Okay. We tell you we spent way too long on that. We we we got three more and our first guest is joining at noon. We're gonna freeze
Speaker 2:through this. Gotta figure out a way to to make the tensions go up and actually get an argument going here because that was We
Speaker 1:were fighting a little bit.
Speaker 2:That was too friendly. Yeah. That was
Speaker 1:too friendly. Okay. Well Yep.
Speaker 2:You wanted you wanted to argue that everyone, all the tech insiders were couldn't wait to get their hands on autopilot. That was your stance. Right?
Speaker 1:Yeah. Yeah. It's a tough one. Tough to steal, man, that. Anyway, Doge Designer shared a photo from a dinner that happened at the White House featuring important tech people and none other than Xi Jinping, the Chinese President.
Speaker 1:So Elon Musk, President Trump, First Lady Melania Trump, China's First Lady, AMD CEO Lisa Su, NVIDIA CEO Jensen Huang, and Apple's Tim Cook got the prime seating right in front of Donald Trump, and they were at the prime table together. No translator that I can see in this image. Although there is an empty chair, so it's possible that there was a translator at
Speaker 5:this point.
Speaker 2:The empty chair would almost certainly be for Donald. Right? Oh, yeah. That would be
Speaker 1:Yeah.
Speaker 2:That's right. Okay. So We're gonna we're gonna put the translator just between Xi and Milan.
Speaker 1:Yeah. Because because Xi Jinping is whenever he speaks, he he's he he gives his speeches even in America in Chinese. But he seems to be able to to hang with Tim Cook, Elon, Lisa Su, Jensen. Although, maybe there's some maybe maybe those tech leaders at least know that one important phrase. If you wanna really ingratiate yourself with a Chinese speaker, what do you say to them?
Speaker 2:Well, hunt you up. Right?
Speaker 1:That's what you gotta
Speaker 2:Always worked for me.
Speaker 1:You're ever seated with Xi Jinping at a dinner at the White House, just throw that down and he'll be like, one of us.
Speaker 2:One of us.
Speaker 1:We now it's time to do a deal.
Speaker 2:Notable that Elon and and Tim Yeah. No plus one. They're locked in.
Speaker 1:Okay.
Speaker 2:No time for no time for no time for guests for them. Yeah.
Speaker 1:No John Turnis. I feel like Tim Cook should get the the the John Turnis plus one. Elon should be able to bring like Nikita Beer along or something. That would be fun. But it was a pretty tight guest list.
Speaker 1:Although, some some people did get plus one. Jensen Brau's wife, Lisa Sue brought her husband. What's interesting is that is that Dario wasn't there. He's sparred with the administration before. We've seen this.
Speaker 1:He's also attended plenty of meetings in DC. And Tom Brown, the co founder of Anthropic, has been on a reset with the administration and even went as far to praise Trump's let data rain post on Truth Social. This was September 1. He said to Howard Lutnick at the g twenty Innovation Ministerial in Chapel Hill, quote, I really loved president Trump's post from earlier this week. And so there's clearly olive branches going out, but they haven't been fully received because the the dinner invite was maybe didn't materialize or maybe he turned it down.
Speaker 1:We don't actually know. But, I was offered 15 plus ones, maybe 10 plus ones, maybe five plus ones. And he decided to lock in and grind for the grind for the ASI.
Speaker 2:Well, you know who was there?
Speaker 1:Who was?
Speaker 2:Lynn Martin.
Speaker 1:Lynn Martin.
Speaker 2:From From the New Exchange. York friend see it. Holding it down.
Speaker 1:Let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange. There's Lynn. She's been on our show multiple times.
Speaker 1:Dear friend and also, you know, important person to get around the table when the when the capital markets, when the future of the global economy is at stake. So very, very exciting to see her there, as well as many other guests who made the list. The list is is Wild Signal was really was really having some serious FOMO. This was hilarious.
Speaker 2:Oh, I'll read it. Okay.
Speaker 5:Would have paid my entire net worth
Speaker 1:capitalists? VC congratulated themselves. Won't someone please think of the venture capitalists? Yes.
Speaker 2:Yeah. It really showed that there was levels.
Speaker 1:There's levels? It it is. This is like a is this is this a copy pasta of the like $15,000,000 or or dinner with Drake meme?
Speaker 4:Yeah. Dinner with Jay Z. 500 k or dinner with Jay Z?
Speaker 1:500 k or dinner with Jay Z.
Speaker 2:Or the Grant Cardone, yeah, I I slept in my car last night to come here. Yeah. And then
Speaker 1:It is it is very funny because like there truly are levels and if you as the humble poster, I obviously have a ton of respect for signal, but if if he or I were at this dinner, we would just be seated way in the back and we'd be like, wow. Look, it's Jensen. Wow. That's so cool. I wonder what he's talking about.
Speaker 1:Cool. And then you get to go up to him for two seconds and be like, dude, I love the GB
Speaker 2:Well, to be clear, he didn't wanna be He didn't
Speaker 1:Dude, that's so cool.
Speaker 2:Johnny didn't wanna be a guest. He wanted to be a literal fly
Speaker 1:That's on the true. That is different.
Speaker 2:And you can see in that that original image Hope there's no
Speaker 1:flies around here.
Speaker 2:If you
Speaker 1:were We got some flies on the wall today. Sorry. But yeah. It was a stacked stacked list. There's a lot of folks.
Speaker 1:Sam Altman, Greg Brockman, Anna Brockman, Sergey Brin, Satya Nadella, Sundar Pichai. Cristiano Aman from Qualcomm, our guest this week, made it to the dinner, came back from Hawaii. David Solomon from Goldman Sachs. Tons of other folks. ExxonMobil.
Speaker 1:It was really a who's who of the global economy. Son of Bernard Arnaud. Also Bernard Arguments there.
Speaker 2:Yeah. Lot of people are saying Tai Lopez was snubbed.
Speaker 1:Yeah. I would've liked to see a Jocko Willink. I would've liked to see a Joe Rogan on this list. It's sort of disappointing that they didn't include podcasters except for David Sachs. He he did make it.
Speaker 1:And also Yeah.
Speaker 2:He's a podcaster and a venture.
Speaker 1:Secretary Kennedy is also has a podcast. There's actually a fair amount of podcast.
Speaker 2:Brad Gersner podcast.
Speaker 1:Sam Altman ran the Y Combinator podcast years ago, start up school. So former podcaster. There's a few other people on here. But lock in, get your I I I think with your if you put your entire net worth into potentially becoming the CEO of a really important company, maybe you do wind up as a fly on the wall. Never doubt yourself, Signal.
Speaker 1:I think you can make the next cut. I believe in you. I also believe in Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web app service database to do more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 1:My take on this is that it's is is the question is like should should Dario have been invited? I I I think even though they're having beef with the administration, like, it's such an important company. It's important that he's in the conversation. He's also has like a very, very hard line on China. And I would I would feel better about his positions on China if he's like, yeah, met Xi Jinping.
Speaker 1:I really do. Paid him. Or something like that. I don't know. You know, it's informed from like a 30,000 foot view.
Speaker 2:Wait, Dario?
Speaker 1:Yeah. Dario is like
Speaker 2:He worked at at Baidu.
Speaker 1:Yeah. But but since then, his positioning has been like, we gotta win the race against China. We have to do, you know, dismantle authoritarian regimes, etcetera. Maybe he looks Xi Jinping in the eyes and gets the stare and he's like, oh, wow. I had you all wrong.
Speaker 1:You never know. Yeah. But I I want to see the sit down happen. I want to hear the down the downstream. I want to be the fly on the wall.
Speaker 1:Anyway, let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Has the AI slob gone too far this time? That's our third debate.
Speaker 1:The third debate that will shock you. So, we can pull up this call sheet ad. It's their latest direct to consumer direct response
Speaker 2:At home, this is a karaoke moment. Yeah. You're sitting in the office.
Speaker 1:This is gonna be on the
Speaker 2:Open floor plan. Don't be afraid to start singing.
Speaker 1:Yeah. Add it to this to the Spotify playlist. So Brian Pimpas says, this Calci ad is among the most dystopian ones I've seen from any betting app. And you can sort of hear the AI song over the Pixar Pixar inspired AI generated video.
Speaker 3:The the lyrics
Speaker 1:are also odd, not to nitpick, but it says, like, he sends his girlfriend money, and then he's handing her money. Every month,
Speaker 2:I send her money from groceries.
Speaker 1:So, there's a lot of, like it lacks the polish that removes something from swap. Every once in while, you see a video that is AI generated, you're like, okay. There's enough attention to detail there. This was let's just rip it. This is actually a popular format of AI swap that's been going very viral.
Speaker 1:Starts with a really dramatic hook. In this case, the man thinks, his partner is having an affair.
Speaker 2:But, actually, she's just hedging food prices Hedging the cow cheese Yeah. Because she has inside knowledge on the market from working at a bakery in the morning.
Speaker 1:Yeah. So that even though egg prices are going up, she's able to net out and remain even because she is profiting on trading the egg futures market on call sheet. I don't know how deep the market is. I don't know how real those markets are. Do they really have egg futures markets on call sheet now?
Speaker 1:That's kind of interesting. I don't know if you can actually hedge your groceries. I wanna see a version of this ad from the Chicago Board of Trade where she goes a lot further, gets a Bloomberg terminal, establishes a relationship with JPMorgan, Morgan Stanley. She's visiting the Chicago Board of Trade regularly, trading in size. She's talking to counterparties, Millennium, Citadel.
Speaker 1:She's on the phone constantly moving huge volumes of of of commodity futures at scale kind of elevating herself past just the prediction market small ball and getting into the big leagues. That's the future.
Speaker 2:Shane says, would you rather your girlfriend insider trade egg egg futures or cheat on you?
Speaker 1:No. So this is not insider trading. Like, you can actually do this. You can be a baker and realize that prices are going up and and trade the the commodities markets. In fact, the commodities markets are designed specifically to give that signal and that and that that is the purpose.
Speaker 1:The purpose is to is to understand, okay, the weather is bad. People can trade that. Fundamentally, there's there's no law against insider trading in commodity markets effectively. But there's a question of like, is this a consumer ready product? Like, this something that someone who is maybe doesn't have, you know, full desk and a research team and a Bloomberg term
Speaker 2:One one interesting thing is I I found egg prices up in September, the market. Right now, there's a 72% chance.
Speaker 1:Okay.
Speaker 2:But there's only 417 of volume.
Speaker 1:Yeah. But if you're only buying $20 of eggs, that's enough depth. So it is a viable use case. It's not it's not fraudulent. I think most people are responding to just like the sloppiness and like the the the click baatiness of like the weird hook.
Speaker 1:But somebody posted one of these that was done by a much less prestigious brand in, I think, like, loss. It was some sort of weight loss pill, but it starts with, like, this insane hook about a secret relationship, very soap opera script. And I feel bad, but I actually watched the whole thing because I couldn't look away because it was really the Pandora's box. It was it was infinite jest for that three minutes and all the comments were like, why did I watch this? And someone had put it on the timeline as like, this is the worst thing I've ever seen.
Speaker 2:Yeah. The funny thing I've about this gotta watch. Funny thing about this ad is it seems like there no one like proof read it because there's a lot of elements of it that just are not not even phrased properly.
Speaker 1:Mhmm. But sometimes putting in those details gets people to talk about it, gets people to go in the comments, actually amplifies things. It draws your eye in. And so you never know with, like, the algorithmic ad generation where all this stuff goes. What about the the the interesting thing is I I think the the the consensus and we're gonna talk to John Arnold about sports betting and prediction markets at at noon today.
Speaker 1:But there is another interesting side of this, which is people seem to be coalescing. At least the vibes and the timeline are like, this is not good. Like, this is like, either either you should personally stay away from it. Like, I I don't advise you to be sports betting, and I think that's John Arnold's position. There is an a second debate point and question, which is what about the the dopamine sites?
Speaker 1:How do you feel about dopamine sites? So in South Korea The thing that I think is consumerism. Continue.
Speaker 2:My current concern Mhmm. About the state of the hyper casino that our world has turned into is that, like, as an adult, I feel like confident in my own decision making ability and the ability to see ads for gambling all the time everywhere and still make the call that it's not for me. I'm not interested.
Speaker 1:You've never lost a dollar? There's I've tried weekend.
Speaker 2:John John got to witness me one weekend. Was like, look, I think I should I think I should try this gambling thing. It seems super popular. I gotta get to the bottom of it.
Speaker 1:So I
Speaker 2:tried I tried it. I'm I'm I'm running in the running in the red. And this this But that said like You're You're
Speaker 1:stuck in your
Speaker 2:As as a 30 year old, I've been I've been I've been advertised gambling products for a decade now.
Speaker 1:Yeah.
Speaker 2:Yeah. And my concern is that while adults have the ability to just make the decision like, hey, this isn't for me and you have like more Yeah. If you start young Yep.
Speaker 1:You're more likely to stick with it for
Speaker 2:a while. Yeah. But but but young people today are gonna go through that from growing up on the Internet are gonna go through this just like they will probably be served like a million gambling ads by the time they're 18.
Speaker 1:It's a lot.
Speaker 2:Yeah. And so No. I guess I didn't get served. It's so normalized. It's so a part of society now.
Speaker 2:Yeah. It's instantly accessible. Yeah. If you're getting advertised stuff like this that's basically saying like, hey, you're you're you're you're sending this message that like this is your way out. Right?
Speaker 2:Like this is
Speaker 1:this Yeah. The deep irony is like the way out is to not participate and be one of the people that makes it through without forming the addiction.
Speaker 2:Yeah.
Speaker 1:But we maybe we need to run a slop ad about that. We wanna do a a slop ad like this where it's the same same premise. Oh, I think my partner's having an affair. And lo and behold, they're just watching TBPN for three hours every day getting informed about technology and business news. What do think about dopamine sites though?
Speaker 1:Because dopamine sites which is where
Speaker 2:Explain dopamine
Speaker 1:sites are are are fake shopping experiences. It's an e commerce site where you can buy luxury goods, but you don't actually have to pay them and they don't arrive. So this is from an article shared by Adonis on X. The final frontier of consumerism has arrived in South Korea. Quote, this week, I placed orders for a $44,860 Patek Philippe hand engraved watch, a two a $12,500 Hermes bag, a $9,800 Tiffany diamond ring.
Speaker 1:Cha ching. Oh, I like it. I didn't realize that was the analog one. That's great. And a $7,350 Cartier love bracelet in yellow gold.
Speaker 1:I don't need any of them. I certainly can't afford them. Thankfully, they'll never arrive. Instead of Amazon, this individual spent the past week browsing a new breed of website known as dopamine sites, a trend that emerged in South Korea. These websites like dopamine shop and food never comes recreate the entire ritual of online shopping.
Speaker 1:You search for products, compare reviews, add items to your cart, enter a shipping address, place an order, and even track your delivery. But it's all imaginary. Is this not as bad as sports betting? Is this not bad at all? What is this?
Speaker 2:It's sort of strange and sad and a reflection of our society that is so infatuated with pure consumption Yeah. Instead of creation. Yeah. And it's dystopian. But We
Speaker 1:just do dopamine site for TBPN merch.
Speaker 2:Well,
Speaker 1:he never sells. He just didn't work on creating carton.
Speaker 2:Well, I was thinking you you should make, like, dopamine ARR where you log in.
Speaker 1:Oh, it looks like a Stripe.
Speaker 2:It looks like a Stripe dashboard, and then you just see, like, you know
Speaker 1:There's a game that I play that is basically that. It's like a cookie clicker game. What are those mindless games?
Speaker 4:I don't know. Like Adventure Capitalist?
Speaker 1:Yeah. I played Adventure Capitalist and you just like click a button and it's like open lemonade stand and then by the end you're like farming robots on the moon and you just watch the numbers go up.
Speaker 2:Yeah. We we we made a game Spray around. We made a game called Burn the Runway back in the day. Oh, yeah. I it I put it in the chat.
Speaker 2:You can you can pull it up.
Speaker 1:It's still up. Wow. This is pre vibe coding. You did it the old fashioned way by hand. It's crazy.
Speaker 4:Do you think this counts as LARPing? Because it's not it's actually live action. Right? But it's You will in the spirit
Speaker 2:of
Speaker 1:LARPing. Develop like an encyclopedic knowledge of luxury goods if you spend enough time on here. I don't know. It seems like it's it's it's it's nowhere near as bad as something where real money's at stake because you are wasting time, but you're not wasting any money and there's no risk of downside. So why would you buy bananas?
Speaker 2:Well, that's the cheapest item. Okay. But you can buy the max amount of bananas and then
Speaker 1:Oh, okay. Okay. So you buy different things for your startup and you wind up running out of runway at the end? Yeah. Interesting.
Speaker 1:Wow.
Speaker 2:To put this into perspective, there were no AI companies
Speaker 1:Mhmm.
Speaker 2:Even on this list. Wow. And then it was it was WeWork. You had early Androil. Androil had only raised I think a couple 100,000,000 at the time.
Speaker 1:Good to get in. You had
Speaker 2:Quibi on there.
Speaker 1:Okay. Okay.
Speaker 2:The whole Well,
Speaker 1:there's It's not all about an AI slop. There's a video that AIDS shared by popular demand, his magnum opus.
Speaker 2:No. It is all bad in AI Slop.
Speaker 1:You think this one's bad?
Speaker 2:Rewind. There's this guy, Henry says, I am so beyond obsessed with this account. For me, this is the moment that I am now very, very, very bullish on AI video. Okay. There's an account called Jean Philanthrope.
Speaker 2:Oh. Who's like a French guy who's a boxer. Yep. It is just somebody using basically making videos and then
Speaker 1:Translating guy with a funny haircut.
Speaker 2:Yeah. He looks very silly.
Speaker 1:And he got 230,000 followers on Instagram.
Speaker 2:Yeah. Million, you know
Speaker 1:Oh, when he lost a coin.
Speaker 2:Hundreds of millions of views and then and so the new the new meta I guess is, you know, making an AI character Sure. That's silly, strange, run up the views and then Pumped this coin. Was one of the top tokens Okay. Couple a few days ago.
Speaker 1:Yeah. Well, sounds like a mess.
Speaker 2:Anyways, over to eights. To what? This is the video you were talking about?
Speaker 1:Oh, yes. Yes. Yes. By popular demand, his magnum opus is repurposed the famous scene from American Psycho, the business card scene with pickles.
Speaker 3:New pickle.
Speaker 1:What do you think? Really hear it. We're we're doing items, I guess.
Speaker 3:Very nice. Look at that. Picked them up
Speaker 5:from the deli yesterday. Good coloring. That's dill. And the brine is something called mustard seed. It's very cool, baby, but that's nothing.
Speaker 1:I remember when you had to do this, had to go into After Effects, track the business card, roto out the hand so that the card whatever you put on the card was underneath, and then you need to blend the new card in. If you wanted to make a joke, it was very time intensive. Took hours. And now the price preferred the voices. Pickle.
Speaker 1:It's pretty crazy.
Speaker 4:Anyway This is a nut pickle.
Speaker 1:Something coming out of a
Speaker 3:Whole peppercorn.
Speaker 2:Extra crisp.
Speaker 4:Impressive. It's very nice.
Speaker 5:Let's see Paul Allen's pickle.
Speaker 1:See, the the there's still, like, a spark of genius here, you know, mixing pickles with
Speaker 2:Let's see Paul Allen's pickle. With
Speaker 1:and the fidelity is
Speaker 5:a olive coloring. A tasteful thickness of it.
Speaker 2:Oh my god. We can move on.
Speaker 1:We can move on. Let me tell you about Cisco critical infrastructure for the AI era. Unlock real time seamless experiences and new value with Cisco. Anyway, there's there's a white pill on the slop narrative. So AI video is clearly in the in the depths of the sloppification, but code was there a year ago.
Speaker 1:People were saying that the slop code would never get good enough. And then if it did, it would destroy everything. DHH is out with a new speech at Rails World twenty twenty six, his opening keynote. He says, it's pencils down, people. Writing code by hand is no longer an economically valuable skill for most programmers at most companies.
Speaker 1:Of course, if you're in some highly secure environment, it might make might make sense to still write it by hand. And so it sounds like a black pill, but then he says, but the future of making software has never been brighter. Don't you dare black pill this beautiful moment. So you can go watch DHH's full
Speaker 2:Look like a mega church preacher.
Speaker 1:Yeah. He's he's having a good time. So our fourth debate, our fourth and final debate. To what degree is the AI build out driving interest rates upwards? People are going back and forth about this.
Speaker 1:Interest rates are spiking. Specifically, the ten year yield has jumped 12%. So it's actually what is that? 1,200 basis points or something? Because you're trying to explain the move in the rates.
Speaker 1:So it's not that we're at 18%. We're at 5.18, but we were you know, down much lower in the fours earlier. And it's it's it's causing nervousness. You know, last time interest rates went up, the venture capital world collapsed, and nobody likes high mortgage rates. Can you afford a home?
Speaker 1:There's a lot of knock on effects. We've covered this a bunch. The vanilla explanation is just the Iran war was unexpected. It caused an energy crisis that caused inflation That caused interest rate hikes and expectations for future interest rate hikes. And thus, interest rates are higher.
Speaker 1:AI is important in driving the economy, but mainly a sideshow in this story around interest rates specifically. But in tech in tech, there's a view that the data center debt is simply too good to resist, and so the capital markets are flooding over there. But there's a lot of debate around this. So Roon said, Iran oil prices is short term driver, but broadly, this is due to demand pressure from extremely attractive AI CapEx opportunities that are borrowing at nation scale. They're certainly hoovering up trillions of dollars.
Speaker 1:I think the total data center CapEx hyperscaler debt is now almost 20% of what The US Government is is is buying something like that.
Speaker 4:No. So it's actually higher. I like the So, basically, hyperscaler and NVIDIA, debt issuance as a percentage of, like, total treasury bond issuance through 2026 has been, like, 70%. Woah. So and I think 2025, it was, like, around 30.
Speaker 1:Yes. And so Astrid Wilde says, this is correct. Global yields will continue to go higher because why would you invest in literally anything other than data centers when they have such a short payback period and you can throw tens of billions at it? I mean, we saw ClusterMax one, I think, had a few dozen neo clouds. ClusterMax three, which we talked to Jordan Nanos about yesterday, had 326 neo clouds.
Speaker 1:And they reviewed, I think, or they rated 200 something of them. And then that's not to mention that there are also data center construction projects from the actual hyperscalers. The labs weren't on there. And then the chip companies, Jordan called out. He said like Cerebris will have a Neo Cloud and Positron and Etched will have Neo Clouds.
Speaker 1:And so there's gonna be a lot more of this. At the same time, there's there's the flip side of the argument. Deep dish and Dreyer says this is definitely currently not true. Those opportunities are not riskless. And importantly, you can't use private illiquid AI CapEx as collateral.
Speaker 1:So if you're a bond investor and you're looking at two different markets, are you really shifting out of government treasuries that are historically the risk free rate that they have a monopoly on violence? They have the ability to tax their citizens to pay back the debt. A neo cloud that's doing a data center, they go bankrupt. You might actually suffer a capital impairment and and get back 70¢ on the dollar, maybe 90¢ on the dollar. So there it stands to reason that there is more risk associated with the the AI build out.
Speaker 1:And so they're not completely apples to apples, but I still think that there's probably some sort of effect here. So it's true that as real GDP growth increases substantially, rates should rise though, but we aren't there yet.
Speaker 2:Roche has lots of scary talking bonds these days, but it's mostly recency bias since 1960. The 10 averaged 5.8%. We're we're at 5% below average. If you'd fallen asleep twenty years ago and woke up today, you'd think nothing happened in the bond market the entire time. Ignore all the sovereign debt crisis talk, inflation expectations are adjusting as something more historically normalized.
Speaker 2:Carry on.
Speaker 1:Carry on. So which do you think it is?
Speaker 2:I'll I'll I'll defer to John Arnold on that, John.
Speaker 1:Okay. We'll talk to him about it. I I think that I think that the recent spike is 80% Iran war. Because I think that the the AI build out has been going on for a while and has been maybe driving rates upwards broadly, but the the AI build out has not been the thing that's been driving this most recent spike, which we've seen over the last thirty days. And it's not like we've we've been seeing a flurry of like, oh, wow.
Speaker 1:Like like, we didn't know that Oracle was gonna back up the truck. We didn't know that Amazon was so there's no, like, the expectations in the last month on the like like, we've been covering this every day. We haven't done that many shows. We're like, woah. We didn't realize that this was gonna happen.
Speaker 1:We didn't know that this was gonna be a thing. Now maybe you could say Jensen's securitization of GPUs initiative with all the big banks. Maybe that's having knock on effects now. But in general, it hasn't felt like there's acceleration of of that's a departure from the trend. It's like, yeah, we're gonna three x compute every year.
Speaker 1:We're on trend. We've been talking about this. Some people don't buy it. Some people are skeptical. But in general, there hasn't been like a massive revision to the upside.
Speaker 1:It's hard to say like, yeah, rates are spiking because Muse is taking off and personal agents are gonna drive token demand which is gonna drive the build out further. Like, we're not quite there yet. There's a couple million
Speaker 2:Yeah. Other thing is when you look at these large pools of capital, it's not like they're sitting there saying, I was just gonna go all in on treasuries but instead, I Yeah. Like, this is still putting They're still putting capital at risk. Yeah. Right?
Speaker 2:And instead of make there's a there's a number of other investments that they might make outside of AI CapEx, but it wasn't like it's just binary thing like one or the other.
Speaker 1:Well, whatever you want to do in the age of higher interest rates, do it on public.com. Investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. So Wall Street Journal is is sort of putting the higher bond yields in context saying the robust US economy powers through rate hikes and rising bond yields. The US economy keeps powering through inflation, tariffs, and higher borrowing costs, defying a run up in treasury yields and a Fed rate increase that has the bond market spooked.
Speaker 1:The usual economic breaks aren't slowing growth, hiring, or an AI investment boom that looks to be unstoppable. To some, AI's potential return seems so bright that even steep interest rates won't slow down tech companies' investments. And it does seem like the the math on the AI build out is is is wildly different. I I was talking to somebody who was saying, like, I I he knows a lot of people that are falling in love with the spreadsheet, and so they wanna start neo clouds and data centers because the payback period is shorter. I also saw an Instagram sort of like course hustler talking about how he bought a bunch of GPUs and is renting them to a data center and and saw that as an attractive opportunity.
Speaker 1:Allah, like, oh, I bought a multifamily apartment complex.
Speaker 4:You must have watched the the Dylan Patel interview, the recent one, Dorkash one.
Speaker 1:Oh, yeah. Yeah. Yeah. Yeah. I mean, this is this is all related to that for sure.
Speaker 1:And and also a lot of the AI build out, a lot of the AI companies were very much born in the era of higher interest rates. So I I I do believe that if you're a software company trading at a 100 x revenue multiple and you weren't forecasting real earnings for ten years or something like that, like the traditional SaaS playbook, and interest rates go from zero to 4%, that's a lot more damaging than than, okay, you were already born in the era of higher interest rates and interest rates go from four to 6% or something. It's just not gonna move the needle in the DCF that much because, like, you were already discounting cash flows in the future 4%. And so as opposed to zero, you're basically counting future cash flows as today's dollars. So anyway, that's the take from the from the from the Wall Street Journal.
Speaker 1:The the Wall Street Journal also had an interesting article about real estate bargains in a higher interest rate environment. They saying they say looking for real estate bargains, watch these apartment loans. And it's an interesting article. So one pool of multifamily apartment mortgages issued in 2021 is already 53% delinquent. And so what this means is that whoever bought the building had a floating rate interest rate and is now that the interest rate rise has put so much pressure under them that they might have to sell units.
Speaker 1:They might have to sell the building, And this is public information. So you can act I actually went to Kodak and was like, find a bunch of apartments that are could potentially be on the market for way below market rates because there are public filings of the loan delinquency and because those might be interesting things. I found some interesting stuff Yeah. I mean,
Speaker 2:one Affordable. One indicator of just how brutal the whole multifamily investing world is is, like, five years ago
Speaker 1:Mhmm.
Speaker 2:The multi family guys were extremely active on X. Right? Yep. Multiple times a day. Yep.
Speaker 2:Clearly, like, incredibly fired up, doing tons of deals. Mhmm. And then most of them have gone completely silent
Speaker 1:Yeah.
Speaker 2:Since then. And and it's in large part because a lot of their bets are completely underwater. They're they're, you know basically, there's been a number of funds that have basically not just lost money, but gone to zero.
Speaker 1:Yeah. No. Totally. There's also some interesting local knock on effects. Here in LA, Los Angeles implemented a mansion tax for houses, in theory, above 4,500,000, 5,000,000, something like that.
Speaker 1:But it applies to commercial properties as well. So apartment buildings that change hands have to pay something like a four or 5% tax. And so that's obviously gonna hurt the amount of building because when you go to sell and transact the building, you're taking this five percent fee off the top. But, it's also, yeah, putting pressure on existing, on existing, housing stock, and sort of is like an odd knock on effect because voters obviously go and say, like, yeah. If you can afford a $10,000,000 house, you can afford a $500,000 transaction fee.
Speaker 1:Go for it. And it was a very popular, bill or or or change the law of popular tax. A lot of people would be like, wait. My my apartment is gonna be taxed too? Because I just live in a building that's over $5,000,000 in aggregate.
Speaker 1:Like, this is maybe not what they wanted. And so who knows where that goes, but people are disappointed. Anyway, moving on to CrowdStrike. Your business is AI. Their business is security.
Speaker 1:CrowdStrike secures AI and stops breaches.
Speaker 2:America's newest trophy asset is a country home in the Cotswolds. Cotswolds. Can never pronounce that properly. Harry and Meghan's return to The UK has put the region in the spotlight. A bevy of US buyers are looking for homes in the area.
Speaker 2:Mhmm. Not very American to buy or invest out here. Strange to see that it's becoming a sort of an American investment trend.
Speaker 1:Well, everyone saw what Paul Graham did and they said, I wanna be like that, you know. I wanna
Speaker 2:That's right.
Speaker 1:I wanna putter.
Speaker 2:Are you interested? Absolutely not.
Speaker 1:Yeah. Next next story.
Speaker 2:Next Moving A
Speaker 1:modern home in Silicon Valley though. Yep. List for 44,000,000, sort of the Cotswolds Of America
Speaker 2:That's right.
Speaker 1:Silicon Valley, five bedroom house, which features four distinct courtyards, a pool, and is the most expensive listing in Palo Alto, California. Now, I wanna do a little tier list. As I read you the various features, I want you to put them in buckets from f tier to s tier. So I'll read through the article and I want you to quickly assign each feature of this $44,000,000 Palo Alto home a tier. So for years, tech entrepreneur Asher Waldfogle and his wife Helen McLean dreamed of building a modern house in Palo Alto.
Speaker 1:The couple however worried about clashing with the Mediterranean style architecture typically associated with their neighborhood of old Palo Alto. So they tapped an architect to design a home that paid homage to its surroundings with stucco, mahogany and titanium zinc plating. Where does titanium zinc plating go for you? Kick it off. You like it?
Speaker 1:A tier? A tier. A tier. Okay. We're leaving some room for an even better feature.
Speaker 1:They spent 20,000,000 over several years building a house, completed in 2005. So now, looking to be closer to their adult daughter on the East Coast, they are putting the five bedroom home on the market for 44,000,000. Woolgafold is an angel investor who co founded Redback Networks, a telecommunications equipment company. McLean previously had a career in fundraising. The couple purchased roughly
Speaker 2:A career in fundraising. Let's go.
Speaker 1:Generational run-in fundraising. So the couple purchased the roughly 0.4 acre site. In terms of lot size, where are you putting 0.4 acres? Is that F tier. F tier.
Speaker 1:Wow. Okay. You you need at least three acres to really make a make a splash and earn s tier. They demolished the circa nineteen thirties Spanish colonial home. The house they built pinwheels around a central staircase.
Speaker 1:What do you think about houses that pinwheel around central staircases?
Speaker 2:I like classic California one story ranch style homes.
Speaker 1:You don't want a staircase staircase at all? No. Because the alternative is two staircases. You have a front staircase, a main entryway, and then a back staircase.
Speaker 2:Yeah.
Speaker 1:This is a central staircase but you're a no staircase guy. So where is Once the are
Speaker 2:are Older. Grown up.
Speaker 1:Then you introduce I the
Speaker 2:could explore it. Okay. But for now, I'm putting it staircases in general going in d tier.
Speaker 1:D tier. Okay. Staircases are out. It has it has 7,900 square feet of livable space. Where does that go?
Speaker 2:Split across multiple floors, I'm going b tier.
Speaker 1:B tier. Okay. Four distinct courtyards. Are you a courtyard guy? Problem
Speaker 2:with courtyards is like they're they're very cool in theory. Mhmm. But how often are you actually like it's just it's like a feature that goes unused. Sure.
Speaker 6:And I
Speaker 2:feel like the average courtyard gets like five minutes of someone's time annually. So
Speaker 1:I'm hearing like a c tier?
Speaker 2:D tier.
Speaker 1:D tier. Brutal for the four courtyards. What about the pool? It's got a pool. Where are pools for you?
Speaker 2:Pools are still underrated.
Speaker 1:Okay. So what's
Speaker 2:a lot of people would say pools properly rated. Everyone thinks they're great. I think they're better than than the average person thinks a pool
Speaker 1:is. I'm here in s tier.
Speaker 2:S tier.
Speaker 1:Pool is s tier. Okay.
Speaker 2:We need I wanna see what the pool looks like.
Speaker 1:Okay. Key feature of the home is a cast in place concrete wall or spine. What do you like? Do you like a spine in your house? Concrete wall?
Speaker 1:Two stories high, 80 feet long. There's a little bit of
Speaker 2:I it. I like it. Some sort of a continuous theme through
Speaker 3:the Yeah.
Speaker 2:I'm into it.
Speaker 1:B tier?
Speaker 6:B tier.
Speaker 1:B tier. Okay. He said his wife and him are thinking of the next phase of life. They also have a home in Sun Valley, Idaho.
Speaker 2:S Tier.
Speaker 1:Second home in Sun Valley is S Tier. Okay.
Speaker 2:S tier.
Speaker 1:Right now they're trying to emotionally let go and decide what to do next. Palo Alto is the center of venture capital and tech startups in Silicon Valley, home to some of the country's biggest tech titans. Sales volumes and prices are rising with a median sale price of $3,500,000 for the three months ending in August, up 5.8% year
Speaker 2:tough to get excited about this home in LA. This is like a probably
Speaker 1:Mhmm.
Speaker 2:$12,000,000 home You know depending on where it's located.
Speaker 1:But over there.
Speaker 2:It's But over there. Like apparently, it's s tier. Yeah. Apparently, it's s tier.
Speaker 1:Well, someone will pick it up and hopefully they enjoy it. Hopefully, they're into courtyards, they're into concrete spines in their homes and
Speaker 2:That's right.
Speaker 1:They they make it a wonderful location.
Speaker 2:I think it's that time.
Speaker 1:It is that time. Let's bring in John Arnold, co founder, co chair of Arnold Ventures. Welcome to the show. How are you doing?
Speaker 2:What's going on?
Speaker 3:Doing great. Thanks for the invite.
Speaker 1:Yeah. Thanks so
Speaker 2:I much helping
Speaker 1:would love to start with just a little overview of your career since it's been a fantastic journey following it from afar and hearing you describe it. But for for our audience, how how do you tell how do you tell the story these days?
Speaker 3:Yeah. So my first job out of college was Enron. So going there as a 21 year old, it was kind of got there in 1995. If you remember, company went bankrupt in December 2001, and I was there at two and through bankruptcy. And it was kind of this remarkable, ride up and a very educational and sad ride down Mhmm.
Speaker 3:And probably learned more on the latter than I did on the former. But came out of there. We can talk a little bit more about that if you want to. But I came out of there and tried to decide what I wanted to do next, You know, kind of really wanted to run my own division of something. I was running a trading desk at Enron.
Speaker 3:I was, you know, in very quick order, had become the head trader at Enron, was the largest natural gas trading firm in the country. So I kind of had that top seat in the industry, and and I I wanted to kind of take the next step and run a division of something. And so I looked at, you know, should I do this at a bank? Should I do it at an energy company at another hedge fund? But I got the chance to start my own hedge fund.
Speaker 3:There was I got approached by a few people and said, we'll back you if you wanna go do your own thing.
Speaker 2:Well, yeah. Why were you why were you why weren't why wasn't your immediate impulse Most of the people that come on the show, for better or worse, are like, I couldn't imagine working for anyone but myself. Why why were why were you more excited initially about running a division at a at a bigger sort of platform?
Speaker 3:Yeah. So I think the question was, you know, how much of the information flow that I had at Enron that kind of helped create this kind of a very profitable desk there could I replicate on my own? Mhmm. And if you could replicate 95 of the information flow, did that translate into kind of 80 or 90 or 95% of the profitability. Mhmm.
Speaker 3:Or was that the 5%. 5%. Yeah.
Speaker 1:Of it. Right?
Speaker 3:Yeah. Did 95% of the information flow mean that you got 0% of the profitability?
Speaker 1:Yeah. Yeah. What was the information flow at Enron in natural gas in 1995? Did you know that you were stepping into an organization with a strong footing there? I I I know the later years pretty well, but I actually don't know what the the brand positioning was to attract a 21 year old at that time.
Speaker 3:Yeah. So if you look back at the history of the natural gas industry, and like many industries in American history, at one point at one point, it was very highly regulated Mhmm. To the point where and The United States set the price of natural gas.
Speaker 1:Mhmm.
Speaker 3:And you had producers who would go produce it, and they would say, like, if you produce gas, you get x dollars for it.
Speaker 2:Mhmm.
Speaker 3:It was viewed as, you know, as an industry having some monopolistic characteristics. And those characteristics were mostly around the pipelines. Right? So there's, you know, not necessarily three pipelines between point a and point b, and it's more of a monopoly type of industry. And so over the years, and if that kind of government price setting, as you can imagine, has a lot of downsides.
Speaker 3:And so sometimes you would end up with shortages. Sometimes you would end up with surpluses. And so it's kinda starting in the seventies under Carter and then continuing with Reagan in the eighties. You know, you had a deregulation of a number of sectors, including natural gas.
Speaker 1:Yeah.
Speaker 3:And the way that gas was deregulated was said that the the production of natural gas is a competitive field. The end use of natural gas is competitive, but interstate pipelines are kind of monopolistic at times and should be federally regulated. And so kind of that happened. Enron at the time was this integrated natural gas company, and all of a sudden, you know, you have okay. You have a pipeline division that has Chinese wall between the production side and the end use side.
Speaker 1:Mhmm.
Speaker 3:And kinda much like a bank, now all of a sudden, you have to somebody has to be that intermediary between the two. And so you have a producer producing gas in South Texas, you know, a certain amount, wants a certain pricing mechanism over, you know, a certain time period, and an end user someplace else who wants kind of different characteristics about how their gas is priced. And somebody had to get in the middle of that. And in fact, Enron's kind of first business coming out of this deregulation was kind of Enron Gas Bank. You know, again, very similar characteristics to what a bank does.
Speaker 3:And so this industry was really kind of getting started in the in the late eighties, early nineties. And, you know, when I got started in '95, I had the benefit of, you know, this was not a highly mature industry. In fact, it was still trying to find its legs. So as a young guy coming in, you know, I wasn't that far behind, because everybody else was kind of starting starting afresh as well.
Speaker 1:Yeah. Interesting. How did you process the the the famous Enron pitch to commoditize and trade bandwidth? Did that like, were there other people that were like, oh, they might be too homogenous of a market. I don't know if it can be commoditized or was there at least some glimmer of hope there?
Speaker 3:Yeah. Maybe luckily, this was not my area.
Speaker 1:Yeah.
Speaker 3:But I think there was kind of this notion that by by kind of pricing and managing risk and connecting the producer of a commodity with the end users that you could create value. Mhmm. And so, you know, just started for Enron and natural gas, although, you know, the commodity markets, you know, had existed long before that. Oil had been a traded commodity for a long time. But electricity started to get deregulated.
Speaker 3:Enron kind of moved horizontally into that. And then I started thinking about what other areas. You know, what about water? What about trucking? What about bandwidth?
Speaker 3:Yep. And I think many of those, you know, had characteristics where you could tell an argument about how they could be an actively traded commodity, but many of which, I think, Enron got into them, was a little ahead of their time and and didn't work out very well.
Speaker 1:Sure. Can you tell us the story of the all the options that were open to you post Enron? There's the famous story of of, Ken Griffin and Citadel coming in. And I'm wondering, like, going back to that pitch of, like, the the thing that a platform can offer, the the the the actual profit pool that's available, like, how was that articulated, and how did you make a decision there ultimately?
Speaker 3:Yeah. So, you know, I think around this time, there had been have a number of hedge funds that were doing these arbitrage type strategies. And so, like, Ken Griffin famously got started with convertible bond arbitrage. Yep. And there were kind of a number of low strategies, but, you know, they were limited in number.
Speaker 3:As they were successful, more capital came into them, and they started to get armed away.
Speaker 1:Yeah.
Speaker 3:And so the returns for the hedge funds that were doing this were starting to decline, and their assets were were increasing. Yeah. And I think a number of those hedge funds have had realized that they needed to start moving a little bit further out on the risk spectrum and take more risk rather than doing kind of pure arbitrage type trades.
Speaker 2:Mhmm.
Speaker 3:And, you know, the most aggressive of of that was Citadel
Speaker 1:Mhmm.
Speaker 3:And to the extent where whenever Enron went bankrupt, I think Citadel was already interested in the commodity markets, was already, you know, kind of trading some of them, but they viewed kind of the Enron collapse as a great catalyst Mhmm. In order to get into it. And they sent a whole team down to Houston, kind of set up offices in the hotel across the street from the Enron building and just started interviewing almost everybody on the floor. And they're just kind of recreating Yep. What was the edge that Enron had, what was the org chart, Who was doing what?
Speaker 3:Who were the real kind of value creators of the field? And, yeah, I I could kinda see what was happening. I didn't really want any part of it. And so I kept kind of yeah. The recruiter was calling me.
Speaker 3:Will you come talk to us? And I saw and people around me were doing that, and I just said no. Mhmm. And then there was kind of a weekend trip with a kind of industry trip. I was headed to Aspen.
Speaker 3:Ken Griffin called me at at the airport and says, you know, can I talk to you? I said, I'm actually headed to Colorado right now. He calls back a few minutes later and says, if I if I come to Colorado tomorrow, will you meet with me? I said, of course. Like, if if you're gonna put that effort out, you know, then you're serious about it, and I'll meet with you.
Speaker 3:And, you know, I had a great conversation with him. I had great respect for him, great respect for the Citadel organization. But kinda by that point, I realized that, you know, the economics for me would be better if I did my own thing and that kind of the the real value that they could provide me is capital on day one. And if I could raise that money, then I should do it on my own. Mhmm.
Speaker 2:How did you think about risk when you were getting your firm, you know, maybe in the first three years of building your own firm having gone through, been able to experience at least participate in, be involved with a firm that that experienced total collapse. I feel like that probably does something to your psychology. At the same time, you were quickly able to put up the kind of returns that typically will would take a a manager taking on, you know, extreme levels of risk. But I imagine that was, probably priority number one. Don't blow up.
Speaker 2:Don't Yeah. Blow
Speaker 3:I think that's priority number one for anybody managing money is don't blow up.
Speaker 1:Mhmm.
Speaker 3:And, you know, especially if if you think you have an edge, and then there's real value in getting to come back tomorrow and play again. And so the biggest challenge was, you know, coming from a corporation using a corporate balance sheet and not really thinking about capital usage.
Speaker 2:Mhmm.
Speaker 3:So now all of a sudden, have, you know, just a an investment account, with x amount of dollars in it, and I gotta stay, under that in terms of capital usage, as well as, you know, thinking about what's the right value risk that I should be running. Mhmm. And these markets, you know, the natural gas market, especially in that time, could be exceptionally volatile. And so there there was huge risk in there was huge tail risk, and that created a lot of the opportunity was that, you know, there were there was, you you get paid if you had capital to provide some insurance at times, but to do it smartly, to size it correctly so that whenever you had to pay out on that, you could, again, show up the next day. But, you know, I I think that the the biggest challenge for me was this transition from corporate balance sheet to running my own money.
Speaker 1:Mhmm. Does I I mean, we've we I think most people have heard the story of how you made your first dollar. I'd I'd love to have you tell it again, but I'm wondering if there's actually, like, a true lineage between your, you know, trading baseball cards to running arbitrage at Enron in '95. Or are these are these sort of just coincidences that these two things happen? Or do you think that there is a clear line between, like, what it takes to make it as a trader showing up early in your life?
Speaker 3:Yeah. You know, I actually think that there were a number of similarities between between these two things of kinda trading baseball cards and trading natural gas. And, you know, to some extent, you know, sports cards are a commodity, but maybe a little bit less so today as there's so much specialization. There's the one of one card or one of 10 cards, you know, trying to trying to make them not commodities. But back then, they they really did feel like commodities, and, you know, I made money by knowing, you know, what every product was worth at every moment.
Speaker 1:Mhmm.
Speaker 3:Right? And so I kind of connected, you know, when I was 15 14, 15 years old, you know, through this dealer network that was on, you know, kind of an early bulletin board that kinda connected dealers around the country and into Canada. And I was one of the few guys in Texas. And so there was a lot of kind of geographic arbitrage that that I was doing, but also just, you know, that the the prices were volatile. They would change week to week.
Speaker 3:And if you knew what a product was worth in New York that week, you could go around and, you know, buy things cheaper and send them up to New York and make that money. And so kind of that notion of know what every part what every product within the industry is worth at all times certainly stayed with me and was a skill I used throughout my trading career. And I think the second part was kinda just this entrepreneurial aspect of, you know, that that I wanted to do my own thing. Yeah. And, you know, you kinda took took some courage, you know, at age 27 to go out and start my own firm, you know, hire people.
Speaker 3:I kind of put most of my my capital at risk and just say, let's give it a shot. And if it doesn't work out, and I'm still young, I can go do other things, but let's give it a shot.
Speaker 1:It feels like there's a sort of fork in the road that's been intentionally designed to potentially take advantage of of young people where you can get into sports, which are fun. I mean, every kid plays sports as a kid, Pee Wee football and little league and AYSO soccer or whatever. And then you can And
Speaker 2:you can get into cards.
Speaker 1:You get into cards and
Speaker 2:then you natural know gas trading
Speaker 1:or Not
Speaker 2:even getting into cards but the sort of digital representation of cards that function as slot machines and fully disconnect the passion for the thing from the just sort of like, you know, just becomes purely sort of a financial activity. Yeah. And we we were talking earlier on the show how, you know, I feel very lucky to be, you know,
Speaker 1:You didn't a hit the gambling bug. Yeah.
Speaker 2:I've You know, as as a as a 30 year old, I By the time we entered this sort of era of hyper gambling and everything becoming a casino, you know, my prefrontal cortex was developed and I I could say like, you know, maybe that would be fun or or maybe maybe there's some money to be made there or or lost, but it's not for me either way. But but it feels like there was there was maybe a beautiful moment where you could just be into trading cards and then establish a business, you know, arbitraging. Yeah. But not go down this crazy road.
Speaker 3:The the industry was much less of kind of the the the lottery system that I sometimes feel it is today. Right? You you know, there was a card that was just pulled a couple months ago that I got auctioned today or yesterday for $8,000,000. It's Cooper Flag card. Right?
Speaker 3:And so someone, you know, buys a pack of cards, gets an $8,000,000 lottery ticket in there. Yeah. And I think it's there is this kind of of much of society. You see this in a lot of financial markets today. Right?
Speaker 3:Yeah. It's not sexy to buy the index fund and just sit on it. Yeah. And as the the markets have progressed, you've gotten to shorter and shorter time frame trades
Speaker 1:Yep.
Speaker 3:That are more in the binary nature
Speaker 1:Yep.
Speaker 3:Of I either lose one or I make 10 and that have a lot of characteristics of a lottery. Yeah. And so, you know, back twenty years ago, this was day trading and, you know, there was yeah. There there was only so much risk out there. You know, that was more of one for one.
Speaker 3:You can make one, lose one. But then, you know, financial, quote unquote, innovation happens and people come up with products that allow you to take a lot of leverage either through options or through just straight leverage. And so and if you can put a dollar up and try to make 10 or try to make a 100, and there's this kind of whole conflation between investing and trading and gambling. And there's always been some gray area across those. But, you know, you open up a Robinhood app today, and it's you know, do you wanna you know, do you want to day trade?
Speaker 3:Do you wanna buy zero day options? Do you wanna gamble on the sports game tonight?
Speaker 5:Mhmm.
Speaker 3:Or do you wanna buy the index fund? And it's kinda kind of all presented as this is all investing. And I think that's really, really scary message that we're teaching, you know, the 16, 18, 20 year olds today.
Speaker 1:Are you so I I I think the ton of agreement there. I'm interested in where this goes forward. Obviously, there are things individually you can do just like, you know, stay away from the aggressive gambling products. There are things that you can do in your community, encouraging people not to not to take on unnecessary risk and stay with the the safer investments. On a national level, there is a conversation about regulation restricting banning more aggressive financial products.
Speaker 1:There's another side which is maybe fund more education to teach people about this. It's sort of what we did with cigarettes where there was a lot of regulation for who could buy them but also a lot of education where pretty much everyone knows that they cause cancer. There's labels on there. And I'm wondering if you're more optimistic that we get out of this with an education strategy or through a regulation strategy or is there is there no hope and it's every man for themselves and they have to Yeah. Resist the temptation individually.
Speaker 3:Yeah. You know, education strategies take a long time. Yeah. And you also kind of have some vices that catch on like wildfire and will eventually burn themselves out. Mhmm.
Speaker 3:And, yeah, you can look at a lot of illicit drugs will have
Speaker 2:Sure.
Speaker 3:That type of characteristic.
Speaker 1:Yeah.
Speaker 3:Right? And regulation's always gonna be slow, but I think it's faster than the education side. Yeah. I think the scary thing today is that there's a number of products that have kind of been, again, innovated to be of higher intensity and easier access Yeah. Than what they've ever been in the past.
Speaker 3:And the challenge is your regulation lags on those. And so you can think about things like marijuana. Right? And like the the marijuana of twenty years ago is very, very different than it is today, and the access is much more available today. Right?
Speaker 3:And you can think about pornography. Right? The intensity of porn today is very different. The access today is very different. And gambling is the same way.
Speaker 3:You know? You know, historically, you either had things that were high friction and high speed of play. So think about, like, a slot machine where you have to go to a casino. Oftentimes, that meant getting on a plane and going someplace. Right?
Speaker 3:And and you sit down. You could pull the, you know, the arm of the the slot machine pretty quickly. In fact, they it was too slow, so they made it a button so you could just sit there and boom boom boom Right? But but there was friction on high speed of play. Or you had something that was low friction, like I could buy a lottery ticket at the supermarket when I'm, you know, buying my meat, but it's low speed of play.
Speaker 3:Right? If I have my ticket, you know, I wait eight hours or three days or, you know, I find out whether I want or not.
Speaker 2:Yeah. Trading trading cards now, you can buy a pack of cards, but you don't have to wait for them to arrive with you to know what you got and you can decide, I don't want any of them. I'll just roll the dice again.
Speaker 1:Right.
Speaker 3:Roll the dice again. Yeah. And so what gambling is today, right, with the phone, access through the phone and being able to I don't even want to wait three hours and figure out whether my team won or not. Right? I can bet on the next pitch.
Speaker 3:Mhmm. I can bet on every play. Right?
Speaker 1:There's one minute market now.
Speaker 5:So high.
Speaker 1:Do you think Bitcoin will go up or down over the next one minute? And so that is
Speaker 3:Over next. Yeah.
Speaker 1:Yeah. That is effectively a binary option in one minute which is is barely fairly close to just a pure slot machine.
Speaker 3:Yeah. But regulated Flipping a coin. Right?
Speaker 1:Yeah. Flipping a coin. Exactly. Because no one has information on on on a minute to minute basis. I mean, it is something but, yeah, certainly not the average gambler.
Speaker 3:Yeah. And and so you're you're mentioning earlier just about, you know, luckily, this is happening when, you know, we're older. But Yeah. You know, I have a teenage boy, and teenage boys are kind of the most susceptible to these things. Mhmm.
Speaker 3:And there's, you know, tens of millions of teenage boys out there Yeah. Who are all getting drawn into these products. And I think there's real risk to society. And so the question is, you know, what's the right way to allow access to products? Mhmm.
Speaker 3:I I have libertarian bones in my body. Sure. Right? Like, I I think, you know, we need to be careful about banning access to products. But, you know, what are the right and smart guardrails to put on them?
Speaker 1:Yeah.
Speaker 2:Yeah. In some ways in some ways, multifaceted approach to regulation would would help a lot of companies that are in positions where the the the the right thing to do for shareholders is actually to make the gambling product. Right? And we've seen this because there's investing apps now that make more money Mhmm. From, you know, gambling products, whatever they wanna position them as, than stock trading.
Speaker 2:And we even saw four months ago, there was there was a series of headlines around how Meta was exploring building, you know, prediction markets, which, you know, I always felt was was completely at odds with their stated goal and and mission. But at the same time, you can make the argument as a as a Meta shareholder that, you know, they have a lot of attention. There's people that are making a bunch of trades based on information they get on Meta and that product should be integrated into the product because it's generally legal. Right? And it and it just feels like companies in in many categories will get punished by not rolling out these products because their competitors will and they will, you know, onboard more users and generate more revenue and be able to spend more money on marketing.
Speaker 2:And and it's sort of this like really really vicious cycle. And so I've gotten to the point where I I pretty strongly believe that a lot of this stuff needs to be pulled back or or or banned. Of course, that sort of human desire and energy to speculate will just naturally flow to other places. Right? Saw in some ways the AI trade over the last year sucked a lot of the wind out of the sails of like crypto.
Speaker 2:Right? There was like way less appetite for Bitcoin when you can make 10 x on some trade. Yes. I did wanna get to as much as I want as we could spend hours talking about the our our casino world. I did wanna get your point of view on on how you've processed the overall sort of AI super cycle.
Speaker 2:There's so many different elements of it that I'm sure you've drawn. You have experience in through, you know, the early two thousands in that period, whether it be, obviously, energy markets coming into play in tech for for the first time in a in a really meaningful way, massive, you know, CapEx and and debt cycles and seeing some of some of these companies that have historically had pristine balance sheets, you know, figure out all these, you know, super complex structures. And then I actually wanna get into compute markets as well and Sure. How we should be thinking about that from your point of view. But but maybe start how you've processed the the the sort of the last five years and and maybe your mental model for where we are today.
Speaker 3:Yeah. You know, I I probably just started talking to people in this space around the twenty twenty, twenty twenty one time frame. Mhmm. And then kind of like everybody in in '22 is, you know, kind of surrounded by it. It's what I'm amazed at is the number of predictions that came true.
Speaker 3:Yeah. And when I heard it as a guy that's kind of outside of the tech world that that it just seemed farcical. The growth that they were projecting, that that they were saying that things would keep scaling forever.
Speaker 1:Yeah. And tech people have been wrong so many times, VR and flying cars and self driving and NFTs and all this stuff. Then this was the one where it was like, oh, again with the crazy predictions and
Speaker 3:then Right.
Speaker 1:It's been right on track.
Speaker 2:Very deep.
Speaker 3:Yeah. And that and that you could keep scaling. Right? And that you would never hit that plateau.
Speaker 1:Yeah.
Speaker 3:And, you know, again, like, in every other field, you know, you you hit plateaus. You start getting kind of significant decreasing marginal returns
Speaker 1:Yeah.
Speaker 3:Inputs. And, you know, that that was my expectation of how this would play out, and and it certainly hasn't. And so I think I've been open to the possibility but skeptical.
Speaker 1:Mhmm.
Speaker 3:And now, whenever the whenever the big money was coming into data centers a couple years ago and you had kind of the calls for the bubble, I was, you know, know, I I think my view was just because a lot of money is coming in doesn't make it a bubble. Right? Yeah. Now it is true that, you know, you always say it's different this time. Right?
Speaker 3:And occasionally, it actually is different this time. And the real test for the industry is, you know, can you find useful products and services that people are gonna pay for? And if so, it works out great. And if not, it's gonna be over investment. I I I do think that every commodity market, you know, goes through these booms and busts, and that's because you have the producers see the same price signal.
Speaker 3:Producers and end users see the same price signal at the same time and typically react in the same way. And so that creates you know, whenever prices are high, people increase investment. There's a delay before that comes on. Oftentimes, the end users have figured out ways to kind of optimize their demand or define substitutes, and then you get that bust that happens because too much capacity shows up in the future. And I think that's the big risk now with data centers is that kind of every every megawatt that's been built thus far, like, keeps being worth more.
Speaker 3:Right? And it's
Speaker 6:a kind
Speaker 3:of a highly backwardated curve where if you can provide a compute tomorrow, that's worth a lot of money. Compute in two years is worth less. Compute in five years is worth a lot less. Mhmm. Right?
Speaker 3:But everybody is seeing that that if I can build today and supply today, I can make a lot of money by even renting it out in the short term. And I think the question is, is everybody overbuilding a little bit because they look at the same price signal and say, you know, even if we overbuild, we're okay because we can sell it to somebody else.
Speaker 2:Yeah. Yeah. Or even or even, you know, you can imagine some of these models saying, well, yeah, you can discount the rate by 60% and we're still we're still making, you know, we're still gonna be making money here. So, of course, there's that should be plenty of margin of safety when in reality, you could see a much larger, you know, drop depending on how how how much of an oversupply there is.
Speaker 1:Yep. Have you have you been able to tease out the impact of AI on markets from other factors? I mean, we're looking at ten year ten year interest rates are at, you know, very high. There's been a big spike over the last thirty days. All the tech people are sort of saying, look, it's evidence that data centers are just too good and so everyone's investing there.
Speaker 1:At the same time, there's a war in Iran and so that might be a bigger factor. But even in the GDP numbers, it's very hard to actually get to a ground truth of the impact on productivity. The Internet famously never really showed up in the productivity statistics. An incredible amount of wealth was created. So how do you think about teasing out the different effects?
Speaker 1:Does it even matter? Or do you have a process? Do you have a view right now on how much growth or or effect on markets AI is actually driving?
Speaker 3:Yeah. I I think it's really hard. Yeah. I think you did a a great job kind of setting the stage for for the difficulties the field is having. You know, I think the financial world and economists are notoriously just very bad at predicting interest rates and inflation.
Speaker 3:And they it's even hard to describe, you know, why have rates spiked so much just in the past month.
Speaker 1:Yeah.
Speaker 3:And part of this is, you know, they probably you know, there were times when everybody was scratching their head about, you know, why are rates staying so low for so long?
Speaker 1:Mhmm.
Speaker 3:And now it's kind of the opposite that, you know, inflation is manageable at least today, right, kind of at, you know, the, you know, two and a half, 3% levels. You know, having the ten year, you know, what, 05/20 or so today, it seems like those rural interest rates are at a level that I think people, many economists were doubtful that that they would see again.
Speaker 1:Mhmm.
Speaker 3:And so I think that the question is this is how much of this is being driven by the AI super investment cycle? Mhmm. And is there just too much demand for capital because there is both all the sovereigns are issuing enormous amounts of debt as well as all everybody associated with the AI industry is trying to do the same.
Speaker 1:Yeah.
Speaker 3:You know, I think there's it's always easy to kind of assign causation after the fact. But, yeah, trying to predict where this is going in the future, you know, there's it's ended the careers of many a trader.
Speaker 1:Yeah. Do you think about the bullwhip effect? One thing that a lot of tech insiders have been pounding the table about is why isn't TSMC building new fabs fast enough? We finally got AI working. It's going to continue to increase and scale, scale, scale forever.
Speaker 1:NVIDIA is ramping up. Everyone's fighting for chips. And yet we can't seem to get TSMC to mention AI on an earnings call. They're starting to, but they've been burned before. And I'm wondering if there's parallels in other markets that you've seen.
Speaker 1:And how do you actually think about the nature of that bullwhip when it actually comes around?
Speaker 3:Yeah. And I I think that's exactly it. Right? And that, you know, if you're a commodity producer like, you know, the memory chip companies, you know, kind of are, after you've kind of fallen for this, you know, the boom bust, you know, that you expanded capacity at the top of the market. And, again, like, every all your competitors saw the same price signals and did the same thing, and, you know, you have that bust, and that bust just causes so much financial pain that that at some point, you know, you're like, I'm not doing this unless you, my customers, are gonna sign, you know, a three year, five year offtake agreement at prices that pay for the whole factory and then some such that if we've overbuilt, you know, that's on the customer.
Speaker 3:That's not on me. And you can certainly understand why a couple years ago, you know, all the hyperscalers were asking memory companies and the chip companies to increase production, increase capacity, and you know, because it would be beneficial to the hyperscalers who are buying this stuff. And the producers were just saying, like, we're just much more hesitant
Speaker 1:Yeah.
Speaker 3:To do so. Because, again, like, couple years ago, AI could have gone a number of different ways. And, you know, it's gotten the bull case to date, but, you know, where it goes from now, I don't think these companies wanna bet their their future on it. And you've seen the same thing kind of in the oil markets where the reaction to high prices, the industry's interest and investor interest in funding, kind of recycling all the money back into drilling is much lower than it used to be. And investors are saying, like, we've felt for this in the past.
Speaker 3:Like, whenever you're making the big returns, pay them out to investors.
Speaker 1:Can you, sort of reality check me on my history around the shale revolution? I'm interested in, could that have happened anywhere other than The United States? How much of it is a technology story? How unpredictable was it? Because right now in tech, everyone's talking about energy.
Speaker 1:People are talking about nuclear capacity that might come online in 2030, 2035. If it comes, I don't think it will be a surprise to the technologists who have been raising money and proselytizing and evangelizing for nuclear. But from my perspective as like an energy outsider, the shale revolution looked like something that was an unexpected boon to energy in America. But what was it like on the inside?
Speaker 3:Yeah. So, yeah, the the shale shale volumes
Speaker 1:Yeah.
Speaker 3:Have really been over the past twenty years.
Speaker 1:Mhmm.
Speaker 3:But this is you know, this industry kinda got started maybe fifty years ago.
Speaker 1:Okay.
Speaker 3:So in the seventies, federal government started investing in the technology
Speaker 1:Mhmm.
Speaker 3:Through some basic science grants. Mhmm. In the eighties, George Mitchell, who was really the kind of the grandfather of this industry, started investing and doing some you know, using his, you know, his company's capital to go test wells.
Speaker 2:Mhmm.
Speaker 3:It was really in the nineties whenever George Mitchell kinda came up with this slickwater fraction sorry, fracking
Speaker 1:Yeah.
Speaker 3:That that you could see well start to become economic. Mhmm. And the industry kind of had the bonus of the commodity boom that happened in the two thousands. Mhmm. Kinda culminating in 2008 when natural gas got to $13.5 versus the $3 it's at now.
Speaker 3:Oil got to a $147 where and if a lot of those wells, even though they were expensive to drill, yeah, were economic. And that's when and then that 2005 to 2008 period was really where kind of the shell started to work. Yeah. You know, the the technological triggers had happened and you had high prices.
Speaker 1:Mhmm.
Speaker 3:And then the two thousand and tens, you had kind of the industry really start to figure out how to do this at scale and get all the benefits of coming down the learning curve and the benefits of going from, you know, drilling, you know, a well here and a well there to really kinda turning this much more into a manufacturing process. Do you think And then 2020 is it's now a mature industry. So, you know, was fifty years in the making, and, you know, I think the question is, like, on nuke, what happens? Right? In many ways
Speaker 1:Oh, yeah.
Speaker 3:Like, there are there are aspects in which United States is very conducive to the nuclear industry. Right? We have very robust capital markets. We have a lot of great technologists here. Mhmm.
Speaker 3:We have a lot of land in The United State United States, very deep electricity markets. So if you come on with a gigawatt of power Sure. You can place it very easily.
Speaker 2:Yeah.
Speaker 3:And you have bipartisan government support for the industry.
Speaker 1:Sure.
Speaker 3:Right? And so, like, all those things are working for it. And then the downside is that The US actually has fairly cheap electricity. Yeah. Right?
Speaker 3:We have fairly high cost of labor, especially kind of the craft labor.
Speaker 1:And
Speaker 3:and to build a nuclear plant requires a lot of labor at least today. Mhmm. You know, citing anything is hard in this country.
Speaker 2:Mhmm.
Speaker 3:And you have this kind of very bifurcated utility system. We don't have a national utility. It's just kind of state by state. It's utility by utility, and you have they're investor owned and, you know, does the investor get the benefit of this? They certainly get a lot of the risks.
Speaker 3:Mhmm. And then last, I think we just don't have the workforce that's trained on in this field today. And so, like, in some ways, may maybe the optimal thing is we develop the technologies here and they get built somewhere else where it's just easier to build and cheaper to build.
Speaker 1:Yeah. We've seen that with a couple of nuclear companies that have done their first plants in Southeast Asia and internationally and seen, opportunities elsewhere, but I'm I'm certainly hoping for it to hit America. I have one more, but please, Jordy.
Speaker 2:How have you processed the growth of the private markets and and the subsequent disconnect between the private markets and the public markets? I've I've been personally having, you know, made at this point 70 odd private mark you know, early stage investments over the last, number of years. I've been really feeling like the inflation, like inflation, the feeling of inflation in the private markets where you have companies that are a $10,000,000,000 company, but only because there are a bunch of venture capitalists with $10,000,000,000. Right?
Speaker 1:Mhmm.
Speaker 2:And so you just have the these prices pushing up not based on the quality of the underlying asset or
Speaker 1:Mhmm.
Speaker 2:Or the category. And I just so my head is really thinking about how long can you have this disconnect. Like, the the the disconnect can't sort of continue forever at at at with how extreme it is right now. And so I would expect it to correct sometime in the next two years, maybe, you know, who who knows? But but how are you processing it?
Speaker 3:Yeah. We're we're certainly seeing that question right now in the energy tech industry, right, where a year ago, you know, it's kinda probably the peak of almost exactly a year ago, peak of a lot of the SMR, you know, small modular reactor nuclear companies, and they've kind of been on a steady decline since. And then a few months ago, you had, you know, Furvo go public that, you know, had a great kind of first day, first couple of weeks. It went public at a big number, and that's kind of gradually sold off. And when Fervo went public, you know, a lot of companies in the kind of energy transition space thought that, you know, the IPO door was open.
Speaker 3:Right? And everybody called their banker. The bankers call all these companies and say, okay. Like, get ready. We're we're going.
Speaker 3:Mhmm. And then, you know, everything is kind of sold off from there. And now they're all getting the same message, which is, okay. The door closed really quick. And and now what do you do?
Speaker 3:And, you know, the the highs are higher in the public markets
Speaker 5:Mhmm.
Speaker 3:But the lows are lower too.
Speaker 1:Yeah.
Speaker 3:So if you have these companies that, you know, still need to raise a lot of capital and going public, you know, if you catch it right, you know, can work out really well, it can also kind of be handcuffs on you. Mhmm. That if if your stock trades poorly from the, you know, from the IPO on, you know, and you have to go do secondaries in the market for a stock that's down, you know, $5,060.70 percent, it becomes enormously difficult. And so there's a lot of CEOs of kind of those energy transition companies who are now, like, trying to decide, do we do we force this? Yeah.
Speaker 3:Even take a lower valuation and try to get public or do we stay private and where we can have kind of more nuanced conversations. We only have to convince a few investors to come in rather than, you know, the whole market Yeah.
Speaker 2:They'll be more stable. More stable. Yeah. Yeah. The other dynamic that that is endlessly entertaining to me is companies repricing based on the category leader in their category.
Speaker 2:So you saw this with SpaceX. Right? Like SpaceX Oh, is is probably like a thousand times more important than the next space company. Right? But every company right after the IPO starts to like reprice in the private markets based on based on that.
Speaker 2:Yeah. And and, you know, you can see the logic from from the private market investors. But but again, there's those disconnects that that that have to be righted in the fullness of time. Like, you can't know. It doesn't matter how big your venture fund is.
Speaker 2:Eventually, your businesses are gonna price based on market realities. Last question I had for you. I I know we're over time. How did you process the compute markets ban? We saw recently, we saw a couple prediction market players try to put up compute markets and apparently, they got a tap on the shoulder from Washington and were asked to shut down shut down the markets.
Speaker 2:It seemed somewhat curious, but, how would you read into that?
Speaker 3:Yeah. I haven't followed this too closely. I've always been, you know, somewhat the the big question is is that compute is not a commodity where kind of where one data center is providing the same product as an another data center. Right? And and in order to have a, you know, a real tradable market, you either have to deliver into a certain product that needs to have a lot of buyers and a lot of sellers, you know, that are able to take that specific product to create and have a and an arbitrage free type of of ecosystem, or you need some type of index that the industry trusts that might look at across a number of different types of compute and say, you know, your compute that has, you know, characteristics in this range, the cost for that for the month of September is x.
Speaker 3:Mhmm. And so, yeah, either a robust index or a kind of physical delivery product. And I think both are really challenging in this field of compute. There just aren't that many short term deals. They transparency into those is difficult.
Speaker 3:They you know, the distinctions between the chips and the design of the data center and all the specific needs is just different. And so try trying to either come up with the physical delivery mechanism or the index that everybody trusts to be right is really hard.
Speaker 2:Mhmm. Yeah. The other dynamic is just how much more valuable compute is to a couple companies
Speaker 1:Mhmm.
Speaker 2:Relative to the the broader market. Mhmm. Which feels quite different than than some of these other commodity markets. I did have one my second final question Please. And then we'll actually let you go.
Speaker 2:How how much have you opened your mind to various sci fi predictions given how correct many of them have been in the let's say from 2020 until 2015 until 2025. So many of them sounded, you know, crazy at the time and and almost impossible. Things things happened that were almost impossible to predict. And given how correct many of them were, it's hard not to place way more weight on them going forward except that they actually only get more insane from here. Right?
Speaker 2:And so you have to like take another
Speaker 1:Yeah.
Speaker 2:Leap of faith. Yeah.
Speaker 3:It's it's a really interesting question. I've I'm a natural skeptic. I've always kind of been a bear trader. I make more money when the markets are going down than when they're going up. I would be a terrible VC because of that.
Speaker 3:I would tell you all the reasons why this company is gonna fail rather than why it's gonna gonna work.
Speaker 1:Sure.
Speaker 3:You know, I think, you know, getting to and I've been entering into the tech sector that I've had of late has helped kind of open my eyes and, like, you know, rather than being naturally skeptical, I'm trying to be kind of naturally open minded to this. But in terms of specifics, I think the next ten years could be crazy. It could be a normal technology. And I think that's this huge question here and I I try to keep my mind open to both of those.
Speaker 2:Mhmm. That's Hope we're gonna find out one day at a time.
Speaker 1:Yeah. Just one day at a time. Well, thank you so much for taking the time to come chat.
Speaker 2:Yeah. I really enjoyed it.
Speaker 1:Really informative conversation.
Speaker 3:Yeah. I hope to
Speaker 1:do it again soon. Yeah. Great weekend. Have a great rest of your day. Talk to you soon.
Speaker 1:Alright. Goodbye. Let's move right into our next guest. We have Viswa Colluru, the founder and CEO of Inveta with a huge fundraising announcement. Get that gong ready.
Speaker 1:Viswa, how are you doing? Welcome to the show.
Speaker 7:Thank you for having me, longtime listener, first time caller.
Speaker 1:Sorry for the delay. We had to shift things around. I'm so happy that we get to talk to you. Let's kick it off. Jordy's warming up the gong already.
Speaker 1:Tell us about the most recent fundraising round.
Speaker 7:The most recent round was a lot of capital to get a lot of medicines to people.
Speaker 1:There we go.
Speaker 7:And what's important?
Speaker 2:Is 11 lot million.
Speaker 1:I'm
Speaker 2:guessing I'll be back.
Speaker 1:Okay. So, yes, what you're building.
Speaker 7:We're building the easiest way to describe it is think of it as a sequencer Mhmm. But for life's chemical code instead of life's genetic code.
Speaker 1:Sure.
Speaker 7:About 400,000 compounds have been discovered by the collective human endeavor from throughout history to now. And it's expected that there's about one to 10,000,000,000. So 99% of what makes up you, a tomato in your garden, or a random sample in the Amazon Rainforest is still a mystery to science. And that's because we've never built anything that can take a biological sample and answer two really important questions. What are the molecules and what do they do?
Speaker 7:So we've built the tech to do just that.
Speaker 1:Talk about the positioning of the company as actually developing drugs, going through FDA processes versus selling a software product to existing pharmaceutical companies or versus focusing on more general use artificial intelligence technologies. How did you land where you did and what are the benefits of that approach?
Speaker 7:As far as we can tell throughout the history of the industry, there's only been one way to build a big company in this space. And that is to make and own drugs.
Speaker 1:Mhmm.
Speaker 7:Right? And even the biggest companies in this space are largely underpinned by cash flows from a single blockbuster franchise. Yeah. Something like 70% of Lilly's EV is forward sales multiples of the GLP-one 80 plus percent of Novo's is the same. Wow.
Speaker 7:And 30% of Sanofi's is half of one, a drug called Dupixent for eczema.
Speaker 1:Wow.
Speaker 7:So if you want to build a large impactful drug company, the rule is super simple. Make drugs and make drugs that matter.
Speaker 1:Give me some timelines. AI is focused on curing cancer and I feel like we got to cure peanut allergies before we cure cancer. It just seems easy to me. Am I misinformed? What are your peanut allergy timelines?
Speaker 1:You know, it's just something that seems a little bit quicker to test than cancer, which could take months to actually fight and verify that you're in remission. If you have a GLP-one for peanut allergies
Speaker 2:Yes, we can just figure out how to give yourself a peanut allergy.
Speaker 1:I need a million dollars computer then
Speaker 2:fix it Yeah. On Sunday.
Speaker 1:But the more anodyne diseases, are those actually more tractable or is it a straight shot to cancer in like the big ones?
Speaker 7:I think they're both difficult in different ways. I'll start with the simple fact that cancer isn't one disease.
Speaker 2:Yeah.
Speaker 7:And it's thousands of diseases. Dr. Yeah. We just call all of those diseases cancer for something that grows without control and invades other organs. Dr.
Speaker 7:Mhmm. I think that's going to have to be disease by disease. And we've made a lot of progress for a lot of these diseases. But it's going to help, I think, for us to be very specific about what cancers have been most recalcitrant and why. And I think I'd love to see AI come up with completely new ways, whether it's molecules or mechanisms, to be able to hit cancers that we struggle the most with.
Speaker 7:Yeah. Common diseases are difficult for two reasons: they're complex and multifactorial. So in other words, obesity is something you understand quite simply as excess fat in your body. But we now know that at least two organs, likely more, are involved in obesity.
Speaker 1:So
Speaker 7:your fat tissue, your brain, your muscle, your pancreas, all of those coordinate to ultimately give you that. The second reason they're hard is the way each of these factors collude to give you obesity can be massively different across the population. I was just reading something as I was waiting for you guys since you went over that ten to fifteen percent of patients don't respond to GLP-one's.
Speaker 1:Woah.
Speaker 7:Right? And it has probably something to do with the fact that hormones affect GLP-one massively, so women tend to respond better. And there's lots of other things that are just beginning to come out from the data. And these are the two things that make common diseases more complex for AI.
Speaker 1:Yeah.
Speaker 7:But I think there's no reason to stage gate. We should absolutely attack all of them at once and continue pushing the frontier for better medicines so each of us can live, you know, a better life on a day to day basis. And that's the test we want each of our molecules to pass.
Speaker 1:So yeah, I mean it seems like you're taking a pretty broad approach but is there a decision criteria where you're looking at the economic opportunity of a particular drug and treatment versus the total harm caused? Like obviously cancer is at the top of the list, peanut allergy is a little bit lower? Or are you more just like let's generate a bunch of stuff and see what the impacts are? Oh, turns out we cured cancer one day and then the next day we cure peanut allergies and it's sort of a random downstream effect. How much of it is you picking the target versus just seeing what you're capable of?
Speaker 7:Yeah. I'm glad you asked. So at Inveda, we haven't started efforts on trying to treat cancer yet.
Speaker 1:Okay.
Speaker 7:We're focused on really large diseases that still have big, big swaths of what we call unmet medical need. For example, if you suffer from asthma, there hasn't been an oral medicine that isn't a steroid that has been approved for over twenty five years.
Speaker 1:Interesting. Wow.
Speaker 7:Right? You are one of the many, many Americans and the world's citizens that has trouble managing your weight, you can get on GLP-one. In one or two years, you're likely going to be off of it for one reason or another. And then you have no idea what to do about your weight. Interesting.
Speaker 7:So our first two drugs are hitting exactly those problems. We want to make a safe non steroidal oral for diseases like atopic dermatitis or eczema and asthma for which there's millions of people in America alone and there isn't an ideal solution. And our second molecule discovered a new hormone that's produced after you go for a sprint. So it's essentially the chemistry of exercise. And we did to it what semaglutide did to GLP-one.
Speaker 7:So we put it in a pill that you can take once daily. And we think it'll allow you to maintain your body weight and metabolic health over the long term, giving fifty five million people in America an off ramp over the next seven years that will have taken a GLP-one and then not know what to do next.
Speaker 1:Mhmm. A lot of discussion over should we give super intelligence a wet lab? What is the actual human in the loop? I mean, feels like you're hiring. It feels like this is a very rigorous process where you're coming up with candidate molecules, taking them through the full FDA process.
Speaker 1:But how do you make sure that your product is safe? Are you confident in the current system? Or do we need to create new rules or slow down or what's your view on the future of actually getting new AI aided, AI designed products in the hands of Americans?
Speaker 7:For better or for worse, three quick things. The first one is Enveda's core AI models allow us to understand what evolution's already made. Mhmm. So they're not optimized for creating new things either benevolent or malevolent or Okay. Anywhere in between.
Speaker 7:Mhmm. And so this allows us for example, push forward our frontier very, very quickly without being particularly bottlenecked by the safety question. Second is for people whose models are designed to make molecules. I think that most the most important aperture or filter that those models have to pass through is the simple fact that most things that a model can design are not something human chemists can make.
Speaker 2:Mhmm.
Speaker 7:So, and this doesn't get talked about often at all. But 99% or more of the chemistry that any particular model comes up with is constrained by the physics and energetics of putting it together. So I'd say just because AI can come up with an incredibly powerful toxin doesn't mean that it'd be produced right away. And that's the bottleneck even when you're trying to make medicines, produced by AI. Got it.
Speaker 7:Third, I think the big bottleneck, overall that encompasses issues one and two really is the fact that AI is really bad at moving things, in the physical world. Mhmm. And I think a lot of biological surgery, whether it's of cells or genes or assembly involves things that require custom workflows. Mhmm. And, automating and roboticizing that still is an endeavor that we're not very good at.
Speaker 7:Mhmm. So unless there's a rogue agent in the loop with the AI, I think it'd be hard. Now, could then a rogue agent be significantly more damaging? Yes. But I think it's a more human centric problem than it gets written about.
Speaker 1:Okay. I like that. Well, thank for breaking it down. Congratulations on the progress.
Speaker 2:Yeah. Great to meet you. Wish we had more time but come back on.
Speaker 1:Yeah. We'll have to have you up
Speaker 2:back on this. This is really great.
Speaker 7:Sign me up. Thank you.
Speaker 2:Congrats to the team. Goodbye.
Speaker 1:Let me tell you about console.com. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. Coming back on the show, we got Jake Adler, founder and CEO of Pilgrim. Jake, how are you doing? Sorry for keeping you waiting.
Speaker 1:No
Speaker 5:problem. Good to good to be back on. Thanks, guys.
Speaker 1:What's the latest in your world? You raised some money? Anything Gong worthy? Anything that's gonna make Jordy stand up and smash that while you're giving us the important details? Deafening us all?
Speaker 1:What happened?
Speaker 5:Yeah. So we we closed the $25,000,000 round to to build America's first biology prime.
Speaker 1:Fantastic. There
Speaker 2:you go. It's funny like better. Two weeks ago, I was it's been probably a year since you've been on the show, but two weeks ago, was thinking about you and Pilgrim because of all the biosecurity talk, I'm like, he's gotta be raising a new round just because it feels like you've you've been building to sort of meet many of the the current and future problems of of our world.
Speaker 1:Yeah. How how are you how are you pitching the the company right now and then the specific products? Because there there there is sort of a differentiation there between being America's biological prime contractor and Kingswell, the actual product. Correct?
Speaker 5:Yeah. There's there's certainly been a bit of an evolution, I think the the core the core thesis has remained the same Yeah. Which is is really this idea that we're just trying to deploy biotechnology more efficiently.
Speaker 2:Sure.
Speaker 5:Right? So there's like an abundance of like really compelling technologies that Mhmm. Like languish in academia And the the better Pilgrim is really on on the mechanism to take these like really critical technologies and get them deployed. Mhmm. So, you know, at the at the core, when I think about, you know, what we're building today with like a system like Argus, so, you know, this is one of our our early prototypes that we deployed.
Speaker 5:The the idea really is is to build up what is a a really substantial wedge and and get technologies like this into the hands of the warfighter today. But on the basis of of building what is a a bioprime, it it really does come back to that core mechanism of of being able to actually get technology into the hands of warfighters sooner and ensuring that more, you know, warfighters can go into conflict and and actually be able to return home. It's it's been a a very exciting mission, but it's all really revolved around just the idea of of getting Bio into the hands of the people who need it the most.
Speaker 1:The sign behind you says, smallpox, keep out. Is that because there's smallpox in your facility and you don't want people coming into the facility? Or is that because you don't like smallpox and you wanna keep it out of your office?
Speaker 5:You know, you'd be shocked, you know, how easy it is to to procure some like really gnarly, mild oscillations.
Speaker 1:Black pill.
Speaker 5:Yeah. But yeah. Exactly. But, you know, we we don't we don't have smallpox in the office. We have we have a bit of monkeypox here and we'll be able to procure, you know, like, some couple of chemical weapons as well.
Speaker 5:But, like, you know, the the amount of validation that's required for these things is is bewildering. You know, they they they'll call me up on the phone and be like, like, do you know what you're doing with these things? And and I'll be like, yeah. We work with the government. And they're like, that's all we need to hear, which is, again, it's incredibly alarming, you know, considering a lot of the infrastructure we have to, like, deter, you know, a bio weapon attack or to stop the proliferation.
Speaker 1:Yeah.
Speaker 5:None of this has changed in, like, twenty years.
Speaker 1:Yeah.
Speaker 5:But it's a it's been a really cool mission. You know, it's a bet that we made nine months ago on on Arguess. And, you know, candidly, you know, you look to things this year, you know, for example, the Pentagon shutting down four months ago due to, like, a false anthrax alert. Yeah. Like, there are there are really serious events that are transpiring, and I think that the the the rate and the incidents around bio have grown dramatically even to a point now where I think it's due to the sheer lack of that infrastructure has just become incredibly alarming.
Speaker 1:Okay. That Arguments system looks portable. It's on a tripod. Where do you deploy that? I've heard about, in terms of our biodefenses, sometimes airports, wastewater treatment systems.
Speaker 1:There's a whole bunch of other places to plug in. How did you land on that portable of a system as opposed to tapping into basically like a stream of biological data somewhere else in the know, American economy or American industrial system.
Speaker 5:I think that the core bet is really on the platform itself. Like we really want to move beyond what is like the current precedent, which are like these very manual workflows. So like right right now, for example, like if I was to, you know, if I was to pull Jordy and and have him go work the line at TSA, for example Mhmm. And some guy comes through and and I gave you like the best and most portable sensor in the world, he's able to, you know, tell you whether or not some person has Ebola. Mhmm.
Speaker 5:The question quickly becomes like, what are you gonna do with that information? Right? So we we definitely knew that the the system itself had to be portable, but it had to go just beyond, you know, from a platform standpoint, just doing the detection to actually enabling identification and characterization of the threat as well. The reason that we opted for this this form factor first was was very simple. It's it's really on the basis, especially in in the airborne environment, that like that is the primary mode of transmission for for viruses and and for pathogens.
Speaker 5:Right? So when we're thinking about how these viruses spread between populations, it's very important that we're actually monitoring the air.
Speaker 1:There's a
Speaker 5:lot of information that we don't typically see. So we wanted this system to look scary and and really to to to stand out in an airport environment because we have to make a statement, you know, to our adversaries that if they attempt to come into our country and attempt to proliferate, you know, a virus go up and that we actually have the defenses in place to to be able to deter and identify, you know, that proliferation very quickly. Yeah. So so that alone is is really what contributed, but
Speaker 1:Makes sense.
Speaker 5:The the core platform being able to detect, you know, viruses autonomously Yeah. That's just gonna be deployed across all of these different types of media, wastewater, clinical, everything.
Speaker 1:Last question for me. On on the actual sensor fidelity, is this gonna be something where I'm going through the airport, I take off my shoes, they take a picture of me, they scan my thumbprint, I give them my ID, I give them my boarding pass, then I also have to, like, breathalyze into this thing? Or is this passive? Like, are they taking my saliva? Are they going to take a pint of blood from me?
Speaker 1:Like, how far does this go?
Speaker 5:Yeah. You know, I think if we make the TSA line any longer, people aren't gonna gonna be very satisfied. Really, the the goal here is simple. It's because wanna monitor the environment. Okay.
Speaker 5:A a lot of a lot of tools in the past, like, you would call, like, contract tracing. And like, even just thinking about like just how crazy of a time COVID was. I I remember my my sister, like, Lysol wiping bananas, you know, and this is just sort of like the the world that we are living in. Yeah. It's a a lot of the technology that has been built is tends to be hyper personalized, and and what we recognize more than anything is like the current timeline to even detect a threat in the air is like a week.
Speaker 5:Mhmm. And, you know, that means like by the time you find out about a pandemic, it's typically in the newspaper Mhmm. You know, before one of our sensors are even picking up on it.
Speaker 1:Yeah. So Or like Google search trends for I lost my Yeah. Sense of taste Right. Whatever. Yeah.
Speaker 5:Yeah. Like literally, right? It's like these very small ideas. Yeah. So we wanted something that'd be quick and monitor the air and it's like a like a the joke more recently is like a Shazam for the air or like how do we just
Speaker 1:Shazam for the air. Like I that. Any plans to put it on a robotic dog? You got the you got the drug sniffing dog, the bomb sniffing dog. I like the idea of a pandemic sniffing robotic dog could probably carry that payload, maybe.
Speaker 1:Who knows? What are you thinking?
Speaker 5:Yeah. I mean, it could certainly be interesting. I think that there's also a possibility of putting this thing on on drones.
Speaker 1:Or or wheels. Yeah. I mean, you can drive around.
Speaker 5:Shot on wheels. Yeah. It's like having it right after people at TSA. It's like coming up to them and and then staring at them. Yeah.
Speaker 5:It would certainly be very interesting.
Speaker 1:Well, good luck. Congratulations. I'm glad you have fresh funding to help keep the
Speaker 2:air base Yeah. Very important work and fantastic progress.
Speaker 1:Yeah. We love to see it.
Speaker 2:Great to see you, Jake.
Speaker 1:Thanks so much coming on, Jake. We'll talk to you soon. Have a good one. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows.
Speaker 1:Codex helps you move projects forward from start to finish. Our final guest of the show is the cofounder of FreeBeam. We have Adam here with the first parents. But there's been a little Easter egg this whole show. We have his product here with us in the TBPN UltraDome on the desk.
Speaker 2:Cracking open a ramp.
Speaker 1:How you doing? How you
Speaker 2:started the show.
Speaker 1:This was a dream of Jordy's. He had this idea a year ago, two years ago. He wanted
Speaker 2:searching for more ad inventory. We had we had more ad inventory than any show on earth but I wasn't gonna settle there. I wanted more ad inventory and I thought we're drinking. We're we're not getting paid to to drink No. On the show.
Speaker 2:How do we fix it?
Speaker 6:You're not but but now you have some new ad inventory courtesy of courtesy of Ram.
Speaker 1:Yes. And Freebean. So And yeah. Tell us about you, your business, your career. Get us up to speed on all this.
Speaker 6:Absolutely. I'm Adam Korsunsky. I'm the founder of Freebean. Mhmm. Freebean is a target trackable and tangible out of home advertising medium built on free coffee.
Speaker 1:Okay.
Speaker 6:We started the business while I was in college, a senior at the University of Michigan. Stupid. I've never had a full time job. So, yeah. Can't Wow.
Speaker 6:Do the
Speaker 2:Very, very, very great story.
Speaker 1:Yeah. I Thank you. How much do you know about the sort of like white space in advertising inventory? I'm obsessed with, you know, app love and finding that people are playing hyper casual mobile games. They went and found this pool that wasn't on Instagram, wasn't on Facebook and they blew it up to a huge business.
Speaker 1:At the same time on the other end, know someone who did like free napkins and fortune cookies for Chinese restaurants but put ads on them. And it was pure margin because the napkins are pretty cheap. And so they would go and say, hey, restaurant, do you want some do you want some ad supported napkins? And the advertisers say, yeah, we'd love to put our logo all over that bar. What is the shape of these opportunities?
Speaker 1:Why did you pick beverage? And then, you know, how has it actually been going distributing this to various places to get in the hands of consumers?
Speaker 6:Distribution has been going incredible. We just crossed the 100,000 can mark Oh. Across Very cool. A bunch of different channels, accelerators and incubators in partnership with
Speaker 1:Cool.
Speaker 6:Entrepreneurs First, Antler, Techstars. Conferences and trade shows are a huge channel for us as well. Then Okay. On the consumer facing side, college campuses and things like that. Cool.
Speaker 6:The reason for beverage mainly is because it's tangible and consumable. We like to say that this is an ad you sip, not skip, when talking to advertisers. It's really one of the only formats that's actually consumed. It's super unique. Yeah.
Speaker 6:And the reason we chose coffee, 66% of US adults drink it every single day. It's extremely popular beverage.
Speaker 2:Yeah.
Speaker 6:And it's it allows us to target virtually any type of demographic
Speaker 2:Mhmm.
Speaker 6:Regardless of what brand is on the cans. It could be Ramp,
Speaker 7:or it could
Speaker 6:be Red Lobster, another customer of ours.
Speaker 1:Sure.
Speaker 6:Their customers all drink coffee.
Speaker 1:Yep.
Speaker 6:Or at least two thirds of them do. Yep. So it allows us to target those people effectively and drive high return for for our advertisers and brands.
Speaker 1:Yeah. What's the sweet Oh, sorry.
Speaker 2:Fellow Michigan student just texted us and and Or former student texted us. Didn't graduate, but just texted us if you plan to expand into beers. Is that I a potential
Speaker 6:have been asked that a lot. Alcohol is tough, Yeah. So we're we're sticking with coffee for now. Yeah. Maybe down the line, we'll expand to beer, but we'll have to
Speaker 1:we'll have to straight shot to the original Four Loco recipe. Bring it back. Ramp it.
Speaker 6:You guys?
Speaker 1:Wrap it
Speaker 6:in Four the Loco might be might be the move. Might
Speaker 1:be I know you
Speaker 6:the the on YC demo day Yeah. When the guy had the humanoid and you were like, can you shotgun that ramp cold brew? And then somebody's like, oh, Four Loco. So Yeah. Maybe.
Speaker 2:Maybe. These are shotgunable
Speaker 1:Maybe in the What what what is the what is the key to success as a brand partnering with you? Is it I go to you, I I I buy a bunch of cans, I mean the brand looks great on on on the actual can. But then should I should I mail these to my to my customer? Should I have this at my conference? Like, how should I think about actually getting the most out of the the pallet when it's delivered?
Speaker 1:Do you handle logistics if I want to send it to my customers to remind them that they should be talking to their sales to my sales reps, for example? Like, what is the right way to actually get this in the hands of potential customers?
Speaker 6:Sure. So when it comes to distribution
Speaker 2:Mhmm.
Speaker 6:If we're looking at gifting, something that Ramp does a lot of actually
Speaker 1:Sure.
Speaker 6:There's usually third party fulfillment partners who will handle the packing of those cans then shipping them out to, you know, maybe a prospect or something like that. For the right distribution channel for the brand, it's it's dependent on a couple of factors. Some brands take the approach of, hey, this is a brand campaign, or some look at it as an acquisition channel. And conferences work extremely well. We've been outside some major ones.
Speaker 6:FigmaConfig with Paper went super viral on Twitter. And they basically called it the highest converting booth at the conference without a booth. Wow. Because Paper was everywhere at their direct competitor's conference.
Speaker 2:Mhmm.
Speaker 6:And so, again, you think about like putting something that's tangible in somebody's hands Mhmm. Where traditional advertising formats don't really deliver anything to the consumer. Mhmm. Billboard companies, the consumer just sees a billboard. But when you allow a brand to put something in someone's hands for free, especially something that's expensive and and increasing in price, you create this reciprocity effect where a person is opting in to seeing an ad.
Speaker 6:And they're saying, okay, I'm going to take an ad. I'm I'm going to take a free coffee as well. And it just drives higher return for the brand.
Speaker 1:Yeah. Last question for me. Talk about what it takes to work with you. Do you have hard minimums? Do you have maximum capacity right now?
Speaker 1:What's the spot of a brand coming to you? Is it a thousand cans for a conference? 10,000 cans? What where what's a what's a really down the line pitch for you these days?
Speaker 6:For a conference, it's primarily dependent on the size of the conference. If we're talking about Dreamforce
Speaker 1:Yeah.
Speaker 6:A brand is going to want a lot more cans. If it's a smaller conference, they'll want a lot less cans. We do have a hard minimum
Speaker 1:Okay.
Speaker 6:Specifically for our storefront, which we just launched our grand opening on Wednesday in New York City between Bryant Park and Grand Central. It is the world's first free coffee shop.
Speaker 2:Cool.
Speaker 6:And as you can imagine, the coffee is literally free. You walk in.
Speaker 1:You ad supported coffee.
Speaker 2:You ask for Yeah. Wait. So what are the Yeah. What are the different different brands can I can I enjoy free coffee from?
Speaker 6:So at our storefront, we have Ramp, Novig, Warp, Outset, Heaper and and Bland. Wow.
Speaker 4:So good. You can
Speaker 2:get AI, voice supported coffee, you can get gambling supported coffee, you can get enterprise payment supported coffee. It's really like a choose your own adventure kind of thing.
Speaker 6:It is. What I think is also really interesting Mhmm. There's a negative sentiment around AI advertising, more so in New York than San Francisco Sure.
Speaker 1:Yeah.
Speaker 6:Of course. But people don't seem to care. And as I alluded to where
Speaker 2:With
Speaker 6:the you provide value to the consumer Yeah. They're like, hey, I'm opting in to get this advertisement. And yeah, it's okay if Yeah. You know, a voice AI company is saying, hey, call this phone number to learn how Sure. Customer calls can help.
Speaker 1:Yeah. Nobody's Any plans vandalize these plans
Speaker 2:to add a speaker to the to the can. Chirp out, you know. While you're enjoying the sip, you know, you you might be interested in learning that, you know, ramp customers save an average of 5% Mhmm. On their expenses. Mhmm.
Speaker 6:Probably probably no speaker, but we are exploring thermochromic ink similar like a Kors can where if it's cold, it displays something different than when it warms up a little bit.
Speaker 2:I like that. I like it. I love I love your clarity of of of thought on on this opportunity. It's
Speaker 6:Thank you.
Speaker 2:It's Yeah. What a great very and Love I'm excited for you to scale to billions of cans Yeah. Annually.
Speaker 6:Thank you guys.
Speaker 1:It's nice
Speaker 2:to meet you.
Speaker 1:Come back to the show soon.
Speaker 2:Yeah. Let's do it. And and we have a bunch more advertisers. So let's let's get them all on board.
Speaker 1:We got more cans. We need more cans.
Speaker 6:But we we have a a solid amount of crossover. More than you think. Yeah. Fantastic.
Speaker 1:Ramp, obviously. We'd love to do more. Here go. Thank you so much for coming.
Speaker 2:Great to meet you, Adam.
Speaker 1:Have a great We'll talk
Speaker 4:to you soon.
Speaker 2:Sounds great.
Speaker 1:Goodbye. That's our show, folks. We'll be back on Monday at 11AM Pacific. Leave us five stars in.
Speaker 2:A lot of excitement Spotify. Heading into the weekend. Lot of people. Mean, you can just you can feel the energy in the Ultradome.
Speaker 1:Okay.
Speaker 2:Yeah. People are sitting here. We're
Speaker 1:hanging out.
Speaker 2:It's good. We got three more sleeps till Monday. Yeah. People are counting it down. Counting it down.
Speaker 2:Counting Have people
Speaker 1:been counting down the days to Christmas? I feel like we missed the road to Christmas today. Pull
Speaker 2:it up.
Speaker 1:What is it? I think we're at ninety days. A nice round number. That's a huge deal. We got ninety days until Christmas.
Speaker 1:So start shopping. Start shopping. Start planning. Start thinking about it.
Speaker 2:Yeah. And again, this is the weekend to get on it, get your tree Yeah. Get set up Yeah. And get after it.
Speaker 1:It's also only four hundred and fifty five days until the next Christmas. So Yeah. You could start thinking about that as well. But Yeah. You you know, you wanna focus on the next ninety days.
Speaker 6:But we
Speaker 1:got We'll
Speaker 2:see you Monday, folks.
Speaker 1:See you. Goodbye.