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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching Today is Friday, 08/01/2025. We are live from Manhattan, from New York City.
Speaker 2:The Big Apple.
Speaker 1:The Big Apple. The city that never sleeps.
Speaker 2:And we certainly have not been sleeping a lot this week.
Speaker 1:I got a pretty good night's sleep last night.
Speaker 2:Decent night last night.
Speaker 1:Massive day, massive so wild and exciting.
Speaker 2:Still feels like
Speaker 1:a dream. Really really crazy that everything came together. So if you weren't watching, we were at the New York Stock Exchange yesterday for the Figma IPO. Jordy was getting emotional over software. Design software.
Speaker 1:Collaborative, actually, software. You've actually used Figma for a decade.
Speaker 2:It was an interesting it was an interesting first IPO for us to cover a lot
Speaker 1:A 100%.
Speaker 2:From Nicee because it was a product that I've been such an active user of for so long and genuinely love. And I and I was thinking if next software IPO, the likelihood that I will have any emotional attachment Yeah.
Speaker 1:To the product is near zero. Exactly. It's It's almost like guys. We've had them on the show. But it's like I'm not a CoreWeave user.
Speaker 2:Yeah.
Speaker 1:So it's a little bit more abstract.
Speaker 2:In many ways, Figma is of the few, like, like, like, enterprise SaaS products
Speaker 1:Yeah.
Speaker 2:Yeah. That people, like, genuinely, like, deeply love Totally. And have an emotional connection to. So super, super fun. Thank you to Lynn, Martin, and Yes.
Speaker 2:The whole team for us. I was looking down on the floor Yeah. There's a bunch of other media companies with dedicated space Yeah. Building and I thought maybe One maybe we should make something happen there.
Speaker 1:My my favorite moment of the entire stream was when you had told the story of hanging out in Figma as like a third space during COVID with a couple of your team name team members.
Speaker 2:Chris. Chris, the CTO, we talked about it.
Speaker 1:Yeah. So so so you talked about it a few times and you'd mentioned that, like, yeah, it's it's so interesting that, like, you know, it was this space where we'd hang out. And then and then Dylan came on and was, yeah, we're seeing this, like, weird phenomenon. Even COVID, people would use it as a third space. And I was like, how did you predict this?
Speaker 1:But it really was
Speaker 2:It's real.
Speaker 1:Yeah. Yeah. It's real. So it makes sense. And we, of
Speaker 2:course, are recording this at 06:48 Pacific time. So Welcome. It's friends on the West Coast. Sorry to go live before you're waking up.
Speaker 1:But the good news is that Restream works twenty four hours a day.
Speaker 2:If you're
Speaker 1:looking to publish a stream to multiple platforms, get on Restream. And also, thank you to Ramp for making this possible. Time is money. Save both. Go to ramp.com.
Speaker 2:Easy as Incredible timing with Ramp. Ramp's announcement this week. Fantastic. It was a massive massive week.
Speaker 1:Really back
Speaker 2:to back Back to back big days for us.
Speaker 1:Big wins.
Speaker 2:Yeah. And then we had a really fun time last night. We co hosted an event with Emily Sundberg Yes. From Feed Me. It was fantastic.
Speaker 2:We were at San Vicente West Village and Jeff Klein and Abby and the whole team there. We planned the event roughly we locked it in like twenty four hours before. Yeah. We it actually started so really came together and it was super fun. That was great.
Speaker 1:So thanks to everyone who attended and thank you for Vanta for making all of this possible. Vanta.com automate compliance security and trust. And you can go to vanta.com to get started. So Apple beat earnings. There we go.
Speaker 1:Apple's iPhone sales blew past Wall Street's expectations in the June helping to lift the company's overall revenue about 10% from a year earlier. Interesting we've been
Speaker 2:tracking Apple Apple lands a windfall as customers raced to beat tariffs.
Speaker 1:Tariffs. That yeah. That's the story. I think that what's really driving iPhone adoption is just Girardi and Genetic. Against what we did with Tyler.
Speaker 1:People saw, oh, if I beat Arc AGI as a human, I I deserve an iPhone, a little treat. So I think we kick started a trend. And I wouldn't be surprised if the leaderboard, if I opened it up, it's it's tens of millions of people Yeah. That have treated themselves to an arcade iPhone. And then and then gotten a new iPhone out of it.
Speaker 1:Yes.
Speaker 2:I think there's there's probably something there.
Speaker 1:There's something there. But on a more serious note, Ralph Winclair in the Wall Street Journal has the story. He says, Apple's iPhone sales blew past Wall Street's expectations in the June as some US consumers rushed to buy their devices before potential price increases from tariffs. I didn't realize that that the prices are going up because of tariffs. Meme had actually taken hold.
Speaker 1:Yep. Especially because it felt like on day one, Apple was maneuvering to never be in a situation where tariffs were going to affect the iPhone. Yeah. We put up that poly market where we were saying, will the next iPhone be over a thousand dollars or under a thousand dollars? Like, where will that sit?
Speaker 1:And so there were, like, plenty of data points, and and very early, you could see that that Tim Cook was negotiating with Donald Trump to make sure that that prices the weren't moving very heavily. But, of course, there's always like an impending possibility that something happens. Yeah. But it was it was odd that I I I wasn't aware that, like, this had been brought lot assumption.
Speaker 2:This happened a lot in the automotive industry. Every single dealer was using the pending tariffs as to get people in the door
Speaker 1:Oh, interesting. To convert. Yeah. But so the I I mean, Apple Store, it's not exactly the same. It's not used car salesman energy at the Apple Store.
Speaker 1:You think they're, like,
Speaker 2:poor people on the street? They weren't pushing it, but I think people underestimate how many people are are iPhone buyers that are still price sensitive. And the difference, if price goes up 20%
Speaker 1:Yeah.
Speaker 2:They're gonna, you know, they they care about Yeah. Saving.
Speaker 1:The weird thing is, like, I feel like right now I always feel like it's a bad time to buy an iPhone because they release every year, and and and I and I want it the day it comes out. And then even if I'm, like, a month in, like, if the new iPhone comes out October 1, if it's like December, I'll be like, I'll just wait till the next one comes out.
Speaker 2:I know. These people rushing to buy But if
Speaker 1:you buy this and then you get the new and then then the next one's gonna be a proper, I think, a proper refresh of the design. We saw that new kit that maybe maybe going less camera bump, maybe the the flash and the lidar or the Yep. The dot the dot projector kind of moved over. And so, a few different things that could be different, and all of a sudden, could be stuck with an iPhone that doesn't doesn't scream, I have the latest and greatest, which I think people, often enjoy. Although although all of the design iterations have been so subtle.
Speaker 1:The upgrade from even even four years ago to today, you really have to notice, like, okay. Yeah. The the edge of the screen is, like, a little bit thinner, and that's it. Anyway, the robust sales growth for the company's signature product was the highest increase in years, exceeding 13%. And, I mean, I feel like we talked about this a couple months ago on the show.
Speaker 1:The like, the iPhone had fully saturated, reached maximum penetration, and was plateauing in China, losing ground there as the Chinese were moving to more domestically made and domestic brands, the Huawei phones, etcetera. And so when we talked about it a couple months ago, we were we were certainly not expecting a big jump in iPhone sales.
Speaker 2:Yeah. Remember, earlier this week, it was reported that Apple was closing retail store in China for
Speaker 1:the first time. That's right. That's right. So shares rose by about 3% in after hours trading. Overall, sales came in at $94,000,000,000, about 10% higher than the same period year a year ago.
Speaker 1:So that puts them almost just almost at a 400,000,000,000 ARR, which is nice to see.
Speaker 2:In China, for the first time in two years, Apple's revenue rose. It's a little bit of a comeback story. They had suffered six to seven consecutive quarters of decline prior to that. Yeah. So again driven by increased iPhone sales.
Speaker 2:I guess there is real demand for the 16 and they they were running a bunch of but they were discounting going into some local festivals there.
Speaker 1:So Tim Cook said the company will face tariff costs of about 1,100,000,000.0 in the July to September period compared with 800,000,000 in the June. That's still so little when you're making a $100,000,000,000. It's a I mean, it's a 1% tax effectively. Yeah. And so I do wonder if if this is dramatically changing the amount of tax that's actually paid from Apple to the US government in, on a regular basis because, I mean, companies are famous for, you know, being in Ireland and withholding the the earnings and then, you know, not just not generating a ton of cash and investing in the r r and d or stock buybacks and and just doing everything that they can to mitigate the tax burden.
Speaker 1:I wonder if this is a if this is a
Speaker 2:meaningful Yeah. Wasn't too long ago that Apple was sending how many 747s to pick up they were like evacuating iPhones.
Speaker 1:That's right. They were they they were worried about the the tariffs in this in this pretty serious way. Yeah. But
Speaker 2:I think that was more so, hey, if we get all this inventory Yeah. To The States today, we're gonna save
Speaker 1:Yeah. Yeah.
Speaker 2:You know, however many it's it's just good practical businesses to
Speaker 1:So so the CFO, Kevin Parikh, said the company saw some obvious signs of pull ahead demand related to tariffs earlier in the quarter. He attributed about one sixth of iPhone sales growth to such purchases. So what what they say the growth was 14%, so one sixth of that, you know, an incremental 2% of of sales coming from customers who were worried about tariffs. He said, the rest was due to very strong upgrade performance in general. Interesting.
Speaker 1:Another I mean, that's just like the health of the American consumer. Like, people are not they're like, I like my phone and I still have a job and I'm making a decent amount of money, so now's as good of time to upgrade as ever. Yep. Another bright spot was an increase in China sales. Wow.
Speaker 1:Unexpected. After declines in recent years, the tariff impact could rise in the near future. An exemption for smartphones from reciprocal tariffs is expected to to lapse. When it does, Apple could face steep tariffs for iPhones that originate in India as well, especially after president Trump announced new levies on India on Wednesday. Tariffs are just one issue that Apple has weighed has weighed on Apple shares this year.
Speaker 1:Apple has kept spending kept spending in check relative to Microsoft, Amazon, Google, and Meta platforms, of course, because of their massive AI investments, which we will get into. But some investors are wary of rewarding that discipline as it points to the iPhone maker's struggle to keep up with an AI arms race. Maybe they should be spending $70,000,000,000 on CapEx to build a foundation model. Who knows? Gross margin came in at 46.5% above the 45.9% expected.
Speaker 1:And so the the the the really interesting question is just like, what does the next iPhone refresh look like, and how much does it change the actual economics of the business if they do that folded phone and people love it, and then there's a whole new upgrade cycle. Like, imagine if if it really becomes a status symbol and everyone on the pro phone needs to upgrade and it's a $2,000 phone instead of a $1,000 phone. Like that's a pretty that can be a pretty significant driver of
Speaker 2:growth. Yep. What he mentioned, Tim Cook discussed openness to M and A on the earnings call as well. That's why I which is interesting. Yeah.
Speaker 2:And Yeah.
Speaker 1:Everything's so expensive. When you look through the history of Apple's acquisitions, it's like, yeah, like, they they they I
Speaker 2:remember Beats. They bought for $3,000,000,000. Yep. That's their largest acquisition of all time. Yeah.
Speaker 2:Yeah. Run rate at the time was a billion dollars a year. They paid Three x revenue. Three x revenue
Speaker 1:Yeah.
Speaker 2:Yeah. To buy
Speaker 1:They probably they probably sold so many Beats headsets.
Speaker 2:Yeah. I'm sure. Yeah. You don't Made
Speaker 1:that bad 10 times over.
Speaker 2:You don't see Beats at least I don't see Beats very often out in the world. I'm sure they're still
Speaker 1:that often. I I definitely see good reviews for the for the the the AirPod competitors that are more athletic, and they wrap around the ears. Yeah. People say they don't fall out of your ears if you're doing, like, really extreme athletics. They definitely sell.
Speaker 1:And then and then I think Siri was, no more than a couple $100,000,000 acquisition. Yeah. And they also bought Shazam, and that was also not a huge acquisition. They've never done some sort of massive, multi billion dollar acquisition.
Speaker 2:Yeah. Tim said, see AI as one of the most profound technologies of our lifetime. We are embedding it across our devices and platforms and across the company. We are also significantly growing our investments. Apple has always been about taking the most advanced technologies and making them easy to use and accessible for everyone and that's at the heart of our AI strategy.
Speaker 2:All sounds good.
Speaker 1:I feel like the I feel like the text to speech has gotten better. Not the speech to text, that's still bad. But the the this the text to speech because I was That's I was I was pulling up a semi analysis article on Wednesday, and I went into reader mode, and I told Safari, the native Safari app, read this to me. And it sounded pretty reasonable. And so I think they updated the model at some point because it used to be really robotic.
Speaker 1:And now it's it's it's not quite at the level of Chateapiti when Chateapiti reads you something, but the the text to speech was pretty, pretty good. And Yeah. And it should it should get better. It should get better very, very quickly.
Speaker 2:Anyway Yeah. So CapEx, like you said, is up Yeah. But it doesn't Okay. I I I don't have the exact data point here, but the thing to note is that it's not an exponential increase in CapEx and they've said that they're gonna continue to rely on like third party capital providers for some of these investments and so they just said broadly don't expect CapEx to rise anywhere near what other hyperscalers are doing. Yep.
Speaker 2:The other thing that's interesting in relation to their notes on m and a is that Apple's acquired seven companies this year. Yeah. And I'm struggling to think of any of them.
Speaker 1:I mean, the the the most recent Apple acquisition I can think of is like, you have a buddy who sold the company to them. Right? Or something like that?
Speaker 2:That was like years ago.
Speaker 1:Yeah. But like that's the one that comes to mind and it's only because it's like an in network Yeah. Deal.
Speaker 2:So, yeah. They've acquired seven companies this year. Tim says Yeah. None were huge in terms of dollar amount.
Speaker 1:Yeah. I remember when I was digging into And they and
Speaker 2:he also said, Apple's making acquisitions at the rate of one every several weeks. So it's just Wow. Quite strange Here's guy. Love it. Not again, not hearing about a lot of this.
Speaker 1:Yeah. I I mean, Applecom's famously locked down, so it's not like they're doing some, like, you know, mutual podcast tour if if if they do some sort of deal. It's usually, like, come into the organization, and then we're gonna we're run a pretty tight ship. I remember when I was digging into the precursor, like, the rumors around the Apple Vision Pro a few years ago before the VR headset dropped, before their augmented reality headset dropped. And a lot of a lot of the technology that went into the Apple Vision Pro was acquired in.
Speaker 1:Yeah. And so, like, Apple Vision Pro, they they acquired some teams, but they also acquired some patents and some technology Yeah. And a whole bunch of different things to
Speaker 2:piece So Ben Taft, neighbor of mine Oh. And close friend. He That was one of them. He was working on a virtual reality product called Mira and his entire Sure. I believe his entire team is still at Apple.
Speaker 2:Shared that he believes that so eyewear Yeah. Will be like one of the important new computing platforms. Yep. Tim Cook on the earnings call yesterday was was asked about next gen computing platforms and and just hardware broadly. And he said, it's difficult to see a world where the iPhone's not living in it.
Speaker 2:That doesn't mean we aren't we are not thinking about other things as well, but I think that AI devices are likely to be complementary devices, not substitutions. So obviously, going to be, somewhat biased there giving that the iPhone is the greatest cash cow in human history but, I I tend to agree and I do believe that's how a lot of I mean that's how a lot of these hardware new AI hardware companies are messaging. They're calling it a net new device not a necessarily a replacement. So we'll see I think per perplexity is working on a phone, Solana's working on a phone and those are there's just a lot of people that are taking crack taking a crack at the market. So obviously
Speaker 1:Nothing's working on the phone. Nothing has a phone.
Speaker 2:Nothing has
Speaker 1:Yeah. Odd odd company name. I know. Yeah. Well, the market is selling off broadly today.
Speaker 1:The Nasdaq's down two and a half percent so far, and Apple is one of the more stable in Most of the mag seven companies are down two to 3%. Apple, less than 1%, on this news. On the flip side, Amazon also reported earnings and is down 7% and is doing much less well. But it's interesting because the headline in the journal is cloud helps catapult Amazon. And and, like, the the the short of the the long and the short of it is that Amazon beat expectations on both revenue earnings and did very well.
Speaker 1:But there was a big question about how AWS is performing relative to the competitors in the cloud. And so there there was still a lot of pressure. And there's some there's a few posts in the timeline about Amazon we should pull up, but I will first give a little bit of an overview of what happened with earnings. But also, let me tell you about graphite. Dev.
Speaker 1:Got in from one thing
Speaker 2:Smooth, John.
Speaker 1:Teams that ship on GitHub use use Graphite. Code review in the age of AI, get on graphite.dev.
Speaker 2:CEO Yes. At the event last night.
Speaker 1:Nice to meet
Speaker 2:him in person. Got some fantastic updates on the business.
Speaker 1:So Yes.
Speaker 2:Team is absolutely crushing.
Speaker 1:So cloud helps catapult Amazon. Ecommerce giants quarterly earnings beat Wall Street's expectations. Amazon.com reported sharp increases in sales and profit partly fueled by the growth of its cloud computing business. The company said Thursday that revenue rose 13% in the second quarter to $168,000,000,000. Profit increased 35%.
Speaker 1:The sales and profit expectations beat Wall Street's expectations. The results beat the expectations. AWS reported that sales climbed 17.5% in the three months following the earnings report. Amazon shares fell 7% in aftermarket trading because the cloud business wasn't growing as much as its rivals. It's such a bull market.
Speaker 1:It's such it's such a hot market that you it's the Red Queen race. You have to keep up with everyone else. Jeffrey's Yeah. Analyst
Speaker 2:Post here from BUCO Capital bloke. He said, Doug from JPMorgan asked why AWS is growing slower than Azure and GCP and Jassy responds with some weird comment about the law of large numbers and the Gen AI customer experience and the stock instantly eats four negative 4%. Imagine your company losing 90,000,000,000 from your bad answer, LOL. So Yeah.
Speaker 1:Law of large numbers. What what is he trying to say? He's just like like, we're we're we're so big. And because we are the biggest, it's harder for us to to grow at the same percentage rate. Is that what he's saying?
Speaker 1:You
Speaker 2:know? Britain Britain who's Yeah. Been biased. He's over at Microsoft now. He says AWS was leading when they had inertia on their side.
Speaker 2:I saw it break and left. It is wild. Mean, wild.
Speaker 1:Some of developer advocates get wild on the timeline.
Speaker 2:Yeah.
Speaker 1:We love it.
Speaker 2:It's war. Yeah. It's war. Bloodsport to them.
Speaker 1:Yeah. Yeah. Yeah. It's it's remarkable. So, yeah, Jeffries is saying the same thing.
Speaker 1:Disappointing given the momentum at Microsoft and Google's units. Of course, Google has Gemini. Microsoft has OpenAI. Google has the TPU. Microsoft is is, you know, a massive NVIDIA customer and has all the OpenAI and the Crusoe facility.
Speaker 1:There's like so many different tiers of capabilities at Microsoft. Satya has been messaging very, very well to the enterprise about the capabilities of Azure as that cloud routing model, the idea that we we have basically the best asset in the category. We have it's completely differentiated access to Open AI, which is the the the one that if you just ask people on the street, what is AI? They'll say, oh, ChatGPT? Oh, just chat?
Speaker 1:Like, that's the one that they're familiar with. It has massive brand recognition, and Microsoft has a preferential deal there. But And then
Speaker 2:At the same time, yeah, at the same time, I think that businesses make much more, you
Speaker 1:know Yeah.
Speaker 2:Research decisions around
Speaker 1:A 100% and that's And why
Speaker 2:talked with Avi earlier this week.
Speaker 1:He was
Speaker 2:saying he's running Friend on on Gemini.
Speaker 1:Yeah. But Notable. Yeah. But but but Amazon's been able to to act as that model router for a lot of companies, obviously, not with Gemini, but the but with Lama and Grok that will serve all these different things. And so AWS just doesn't quite have that same narrative.
Speaker 1:Like Yeah. We can describe Google's and GCP's plan in the sense that it's like, they're staying on this Pareto frontier with Gemini. They have all these great models. We can describe Microsoft strategy with getting super early in OpenAI and then acting as, you know, model agnostic and serving Grok and Lama and DeepSeek and everything. It's harder to articulate AWS's AI strategy.
Speaker 2:Direct quote here from Andy. We have more demand than we have capacity right now. We could be doing more revenue and helping customers more and we're working very hard on changing that outcome and how much capacity we had. He did say that constraints such as power and chip availability may take several quarters to resolve. So again The backlog.
Speaker 2:The backlog is real. Yeah. But Satya and Sundar are still putting up Yeah. Putting up
Speaker 1:But so Amazon is best known for its e commerce business which no one cares about anymore because they only care about AI at this point. And it's heft in the retail industry makes it a bellwether for consumer spending.
Speaker 2:Am interested to see I wonder if they had any comments about about the new de minimis exemption.
Speaker 1:Yeah. Yeah. Look that up. Amazon spent $30,400,000,000 on CapEx in the second quarter, much higher than analysts' forecast of 26,000,000,000. So 31 to 26, that's a pretty that's a pretty big jump.
Speaker 1:And that puts them on a 120, $125,000,000,000 CapEx run rate, that is that is massive, and that definitely puts them at the top of the stack, like its rivals. But, of course, like, if you're if you're investing that much in data centers, like, you have to put up the numbers, in the growth of the cloud. Like its rivals, Amazon has been trying to cut costs while increasing capital expenditures and integrating AI. Jassy said that AI would be where where are we going with this? Would be, would would result in the company having fewer white collar workers.
Speaker 1:The company spokesperson recently said Amazon would lay off a number of employees in its cloud computing division, in part because of shifting business priorities. Interesting. I know. I was talking more with Joe Weisenthal last night about why you would turn down one of Zuck's offers, the white whale. Why why you would stay at OpenAI and and one of the one of the Or Thinking Machines or Anthropic.
Speaker 1:Any of those. Any any player. And I and I I was thinking that there's this there's this world where the if you if you want to be like a top executive, it's there's something powerful about being at the company where that's the main thing. Being top that's true. Also, just being in the top 10 kind of key players in an org versus being top 50 at meta Yeah.
Speaker 2:You're gonna be able to have potentially more impact, responsibility, and and ultimately, yeah, influence on this, like, broader trend.
Speaker 1:Yeah. Yeah. Like, it I the the Thinking Machines one's a little bit more complicated, but certainly, like, the question of, like, why didn't Mark Chen accept, a billion dollar offer to go to Meta? Like, the financial stuff, maybe maybe that pencils out, but I think the the other interesting thing is that, it's like it's like like, for Google, search is the priority. Search is the is the most important.
Speaker 1:It's the crown jewel of the of the overall structure of that of that business. And so if you're the number one researcher, the number one guy, or the number one person, the number one executive in search, like, that's extremely valuable. And with with OpenAI, being in that position in with ChatGPT, you are, like, the market leader right now. If you think you can maintain that, it's like even if even if Meta puts up a really great performance and creates a great number two product, there could be a really steep power law where you're you're running something that is is not as important as Facebook and Instagram to their bottom line, to their business.
Speaker 2:Yep. That's true. Yeah. I think the already already rich reason, is is probably a real factor as well. I I would be hard don't know any details at all, but I'd be hard pressed to believe that Mark Chen is not worth at least half a billion
Speaker 1:this point. Yeah. So, anyways. Well, in other news, Ray Dalio has sold his last remaining stake in Bridgewater and left its board capping the protracted transition from the hedge fund firm he founded. And really quickly, let me tell you about numeralhq.com sales tax on autopilot.
Speaker 1:Spend less than five minutes per month on sales tax compliance. Thank you for clapping.
Speaker 2:Great transition, John. Still got it.
Speaker 1:Still got it. So, yeah, Ray Dalio has been Oh.
Speaker 2:And by the way, if you're just joining us, early show today. We are still in New York. New York. We're coming back to And we will be headed back to LA later today.
Speaker 1:Yes. We should do Coinbase at some point. But, in the meantime, Ray Dalio sold his last remaining stake in Bridgewater Associates and stepped off its board capping a tumultuous transition of the hedge fund he founded. Bridgewater bought the remaining shares held by its charismatic billionaire founder. The firm told clients in a letter last week, people familiar with the matter said Bridgewater subsequently issued new shares to the sovereign wealth fund of Brunei in a multi billion dollar deal that gave the Southeast Asian fund a nearly 20% stake in the Connecticut firm.
Speaker 1:Neither transaction has previously been reported. Bridgewater's letter didn't mention the Investment Agency, the sovereign wealth fund, has been a long time investor and transferred its money invested in a Bridgewater fund to invest in the firm's equity. So they're rolling from LP to GP stake, basically. The Brunei Fund now ranks as one of Bridgewater's biggest owners, though co investment chief Bob Prince has a larger stake, said one of the people. Dahlia is 75 now.
Speaker 1:That really I feel like he that crept up on me. I feel like I when I think of him, I I don't think of him as that. I feel like he I feel like he was
Speaker 2:You don't huge think of him as a
Speaker 1:A 75 guy. You you wouldn't He looks great. Yeah. And he's and he's like, yeah, and he really is like charismatic but he brings a lot
Speaker 2:of energy Certified to his unk status.
Speaker 1:Certified unk status. But also, yeah, just like an incredible amount of energy and he doesn't look Totally. He doesn't look like he's like fighting it.
Speaker 2:Don't know. And he probably wants to focus on being a content creator. Probably.
Speaker 1:I mean, $2 under
Speaker 2:his I've done it all.
Speaker 1:He's done it I just
Speaker 2:wanna make TikToks now.
Speaker 1:Have you seen his like social distribution strategy?
Speaker 2:Oh, it's it's great. Fantastic. Probably has a a thousand clippers globally.
Speaker 1:Whoever whoever he hired actually turned his book into, like, a straight up mega viral YouTube video with graphics and did it really, really well. And the team that was on that just executed at a very, very high level. It was it was very surprising given that you wouldn't expect that to come from, like, a Connecticut hedge fund that's, like, so out of the YouTube world. Totally. But, he's done very well.
Speaker 1:So, Dalio, in a statement that said he looks forwards to Bridgewater's future success in his role as a client and a mentor. He remains invested in the funds. People close to the firm said they hope that Dalio's exit from its ownership ranks and board will simplify its governance. Though Dalio has given up his CEO, co investment chair, and board chairman roles over the years, in addition to selling down his own stake, he had remained actively engaged, regularly making requests and registering complaints. He said people want he's still giving us feedback and he said he was leaving.
Speaker 2:That's that's that's been something I've been I mean, we we'll have Gurley on the show at some point. Yeah. But I've been trying to get a read on
Speaker 1:Yeah. Know,
Speaker 2:is Gurley? Soft power
Speaker 1:of a benchmark. Yeah.
Speaker 2:He's still He he went over to China recently, I think, to check out what's happening in AI there. Yeah.
Speaker 1:Benchmark And people and people definitely read Bill Gurley's tweets and see that as like a proxy or a surrogate. He's like a surrogate for benchmarking. It feels like that, but I don't know. I don't know what's actually going on.
Speaker 2:Yeah. The question is, yeah, he could he still be one of their largest LPs?
Speaker 1:Probably. And then in that case
Speaker 2:Yeah. Like, you do exercise quite a quite a lot of
Speaker 1:Totally. You can Totally.
Speaker 2:Exercise influence over the firm.
Speaker 1:Yeah. Yeah. So he's so he's remained actively engaged, which is also hilarious because Are you familiar with how Bridgewater, like, tracks every meeting? Are you familiar with this? So Bridgewater famously, like, records every meeting and transcribes it all and makes it all available, or they did for a long time.
Speaker 1:Yeah. I don't know how much of this is, apocryphal, but the idea is that Back in the
Speaker 2:day, was it Radical trends Was somebody was there somebody
Speaker 1:I think so.
Speaker 2:Actually So Stripe
Speaker 1:did something somewhat similar, where Stripe, for a long time, and I think it's probably evolved in the age of Slack and chat and whatnot, but for a long time, by default, every email was on kind of a list serve that anyone could look at. And so you could go and see and trace through not just the GitHub, you know, pull request history of how Stripe was built as a software product, but you could actually go and read the emails that the product managers were sending sending around, the engineers were discussing, all the different trade offs that led Stripe to build certain things certain ways. Yeah. And so, incredible for onboarding.
Speaker 2:So if you wanted to Yeah. If you wanted to figure out basically the why behind anything, you could without bothering anybody or making them repeat
Speaker 1:Yep.
Speaker 2:The reasons or Totally. Remember all the the
Speaker 1:And then remember we we we talked to Jeff at at Stripe. He came on the show and he was saying that, like, we're really glad we did that because now we have this incredible log of of stuff that's already public within Stripe. And you can probably now query it Exactly.
Speaker 2:And organize it. Or what are all the what what are the key meetings that, like, drove this decision or this Who who are the who are the people that push for this? Yep. Who are the people that Yep. You know, had concerns about it?
Speaker 2:Yeah.
Speaker 1:And so and so you can query. So I think they've done that. And then he was also saying that they they can they now have, I believe, an, an, like, AI agent that's proactive and will actually jump in and say, based on what I know, like, you two are talking about this. You probably want this extra context even though you didn't even ask me. So that's very interesting.
Speaker 1:Anyway, Bridgewater's been doing that for a very long time. They call it radical transparency. It was, very controversial because it's it's such a bizarre way to run a company. It's very different from most hedge funds. But it worked out, and and and a lot of people that have been at Bridgewater have certainly enjoyed it even though it is, like, kind of an acquired taste.
Speaker 1:But it certainly resulted in, fantastic performance for the fund. In 2011, Dalio said succession at Bridgewater would be a ten year process. We're now fourteen years into this process. Little little, miscalculation there. It has been a protracted messy affair, says The Wall Street Journal.
Speaker 1:The firm tried various numbers and combinations of CEOs. One of them later sued, then settled with the firm. Bridgewater chief executive, Nir Nirbardia and Mike, McGavick, co chair of the firm's board, wrote in the letter to investors that the sale of Dalio's last shares was an ideal culmination of the ownership transition process. They said Dalio, the board, and employees would celebrate the firm's fiftieth anniversary together in Connecticut and New York. Bridgewater's assets under management have fallen in recent years to just $92,000,000,000.
Speaker 1:Just a just a Wah. Small Wah. Just a small $92,000,000,000 fund. Still massive, but this is down from a 168,000,000,000 in 2019. It's pretty massive.
Speaker 1:I mean, it is it is world's biggest hedge fund, or of, definitely in the top 10. And I remember a decade ago, these these hedge funds were, like, being in the 10,000,000,000 range would put you in the category of being the biggest and they've all basically 10 x,
Speaker 2:I believe.
Speaker 1:Yeah. Fascinating. Anyway. Coinbase earnings.
Speaker 2:End of an era. Coinbase earnings. Let's walk through it.
Speaker 1:But first let me tell you about adquick.com. Out of home advertising made easy and measurable. Only ad quick combines technology, out of home expertise and data to enable efficient seamless ad buying across the globe.
Speaker 2:We need to go see our billboards while we're here, John.
Speaker 1:We do. We still haven't seen them in person. I've seen so many photos.
Speaker 2:It's so good.
Speaker 1:Feel like I've seen this. So, Coinbase, in summary, they they missed on top line but beat on bottom line. Revenue was, estimated to be what was it? One point, one point no. Wait.
Speaker 1:Top line verdict. Yeah. 1,590,000,000.00, and they posted just slightly below 1,400,000,000.0. So Coinbase said its profit surged in the second quarter, so that's the bottom line beat, fueled by gains in its investments, including crypto company Circle Internet Groups. They're making more money from Circle, and that's higher margins, that's driving a higher, profit.
Speaker 1:So the cryptos exchange The
Speaker 2:since the journal's heard the update, Coinbase is down 15 today.
Speaker 1:15% today. Wow.
Speaker 2:Still sitting at 82,000,000,000.
Speaker 1:82,000,000,000. Coinbase Global led by CEO Brian Armstrong said it earned $1,400,000,000 or 5.14 per share in the second quarter compared with 36,000,000 a year ago. That's a huge swing. That's the nature of this company. It's still not on this, like, you know, just like, you know, clockwork, clockwork profit.
Speaker 1:So if you look at this chart here, I don't know if you can see this, Jordy, but it's like it's like very neutral profits and then just put up a billion dollars in profit and then very neutral profits and then and then, like, breakeven and then billion. Breakeven and then
Speaker 2:a So naturally the Real founder's journey. The the share price is just gonna fluctuate wildly.
Speaker 1:Yes. Yes. Yes.
Speaker 2:Still almost a 10 x from the bottom Wow. In 2022.
Speaker 1:So, the company said, it's the increase was driven in part by a pretax gain from its investment in stablecoin provider Circle Internet Group, which had a blockbuster market debut in June. Total revenue rose to 1,500,000,000.0 from 1,400,000,000.0 a year ago, but fell short of Wall Street's expectations. Analysts were expecting 1,559,000,000.000 in revenue for the quarter. On a quarter credit by quarter basis, revenue fell 26%, from over 2,000,000,000 in the first quarter, which the company attributed in part to lower market volatility. So if you remember q one, the liberation day, Bitcoin was all over the place, and there were talks of the sovereign wealth fund in The United States.
Speaker 1:There was so much crypto news back and forth, back and forth. That was all driving a lot volatility, and that was driving volume on Coinbase and, obviously, revenue for Coinbase. Transaction revenue declined from 764,000,000, to to 764,000,000 from 781,000,000 a year ago. The slide was caused by a slump in spot crypto trading activities during the three months that ended June 30. Total trading volume rose to 237,000,000,000 in the second quarter from 226,000,000,000 a year ago.
Speaker 1:To drive its next leg of growth, Coinbase said it aims to become the everything exchange and focus on tokenization with a or or the conversion of trading financial of traditional financial and real world assets into tradable tokens on chain. The company also has been working to diversify its business and recently partnered with JPMorgan Chase and PNC Bank to facilitate the buying and selling of cryptocurrencies by their clients. I think a lot of that is on the back of a couple acquisitions that they made for custody. There's I mean, coin Coinbase at this point goes all the way from, you know, a, like, a consumer, you know, like, just general user who just downloads the app, wants to buy couple dollars of Bitcoin, all the way up to the largest institutions in the world at this point. We're really, really widespread of the client base, but I think that's part of the strategy.
Speaker 1:Meanwhile, Coinbase has been capitalizing on moment on momentum under president Trump's crypto friendly positions with Bitcoin trading near its peak of more than a $120,000. Shares have jumped 52 this year, cementing it as one of the largest publicly traded crypto companies with a market cap of more than 90,000,000,000, although it is of course down Yeah. Today. And Bitcoin is at $1.15.
Speaker 2:Yeah. Outside of the numbers, the the thing that stood out was Brian's messaging around he says it here on Yeah. Coinbase. Right? Yeah.
Speaker 2:Coinbase is becoming the everything exchange. All assets will inevitably move on chain, so we wanna have everything you want to trade in one place. Incoming, our DEX integration, which will allow users to access millions of assets and expansion of our derivatives offerings. He says, next, our tokenized equities and more. So again, we covered this before, but it feels very much like Coin Base and Robinhood are converging towards to to old Super A Fintech Super Bowl.
Speaker 2:But Fintech Super Bowl.
Speaker 1:We're not gonna we're we we don't like the war analogies. That's too that's too negative.
Speaker 2:Yeah.
Speaker 1:I like the I like the sports analogies. The NBA finals. The NBA finals of Fintech. Truly.
Speaker 2:Yeah.
Speaker 1:And it's funny because like, when both those companies started around the same time, I believe Andreessen Horowitz invested in both of them. Yeah. And I mean, I I I went through I was in the same YC batch loosely with Brian Armstrong in Coinbase, then I remember talking to Chris Dixon at a dinner, and he was like, hey, like, you know, you're, like, young, like, what what apps are you using? And and the one app that I was on my phone that was like an up and coming startup was Robinhood. And he was like, why are you investing in public equities?
Speaker 1:Yeah. And I like, I don't
Speaker 2:if that's the Mickey from Ribbit is also early in Coinbase and Both of Right? So all is converging. Yeah. Mickey is
Speaker 1:just wearing the NFL hat like the I just support all fintech. He's like, I'm taking a team. Yeah. Yeah. It it was Rob Lowe, I believe is the meme.
Speaker 1:Rob Lowe in the NFL How you've seen this? Yeah. Yeah. It's great. Anyway, let me tell you about adio.com.
Speaker 1:Customer relationship magic, Adio is the AI native CRM that builds scales and grows your companies to the next level. Let's go through the mansion section. Find me some posts on
Speaker 2:the give a little bit coverage of updates on on the Figma IPO.
Speaker 1:Oh, yeah.
Speaker 2:Of course, there was a funny post in here from Jawan. Okay. Jawan apparently got a offer back in 2019. Okay. Oh.
Speaker 1:It's series c territory.
Speaker 2:And he was gonna get a base of 165 k a year and 300,000 in Figma RSUs.
Speaker 1:300,000 shares.
Speaker 2:And I guess by his calculation, it would have turned into 30,000,000. I guess. But the important thing, Jawan is now getting the the ability to spend his time automating finance.
Speaker 1:Yes.
Speaker 2:And certainly didn't pick a bad company to On that front. Gary Tan says, if you stick around in tech and you're good, sooner or later you start collecting these stories. Yeah. I think you remember Gary designed the Palantir logo back in the day. Crazy.
Speaker 2:And I wonder if he held on. Yeah. It's almost
Speaker 1:a trillion dollar company.
Speaker 2:More Sikhi ran some numbers. Sikhi Chen said Yeah. There's 10x returners, there's fund returners, and there's Figma. Figma alone returned 10x the entire fund of not one, not two, but three VC funds. So he pulls up Index Ventures, made which their initial investment out of a seed fund.
Speaker 2:The it was a $4,000,000 investment or 3,900,000.0 out of a $400,000,000 fund, and it is a 1,850 x multiple. Their their current multiple of fund on that? The fund multiple is 18 x. Greylock That's so crazy. Greylock, who's did the series a, is sitting on 11 x fund.
Speaker 2:They did the series a out of a $600,000,000 fund. KP, which did the series b, is, sitting on a 10 x fund out of a $700,000,000 fund, which is just wild. And then Sequoia will will have returned one and a half x on a 2 and a half billion dollar fund. That's crazy. So
Speaker 1:Just from that one deal. Gary
Speaker 2:chimes in says, grand slam home run business. Yep. Yep. It's not just a home run business. It's a grand slam home run business.
Speaker 2:Yeah.
Speaker 1:This is good advice for all the VCs out there. And Just get just get one figment
Speaker 2:in your pocket. I noted this on the timeline yesterday but we are retiring the gong that we had at Nicee yesterday. It's a game hit gong by none other than Dylan Fields. So we still need to get him to sign it and date it, of course. But pretty pretty pretty wild.
Speaker 2:Deleon says greatest capital markets on earth, greatest country on earth and throws up not one but three American flags quoting signals signals post. He said nothing hits like an IPO in America. It's the most iconic cultural moment that's relatively infrequent. The most beautiful part about it is that not only here does a company going public trigger a national feedback loop of inspiration. Kids watch it, builders feel it, and the next gen catches fire.
Speaker 2:Nowhere else turns liquidity into legacy.
Speaker 1:Signal is such a funny posting style. Very
Speaker 2:very unique. Good job. And yeah pretty pretty insane. We also didn't really cover this yet, but ChatGPT is apparently now generating a billion a month in revenue. Yep.
Speaker 2:12,000,000,000. But is projecting to burn 8,000,000,000 in 2025. Wait.
Speaker 1:That's oh, so so they will so they'll generate 12,000,000,000 in revenue and and spend 20
Speaker 2:It sounds like they're run rating
Speaker 1:Run rating a billion. Run rating
Speaker 2:a billion. A month. It's around 12,000,000,000 a year. And the other story here is that Anthropic is now at 4 and a half billion in annual annualized revenue. Okay.
Speaker 2:DD's calling it DD DOS is calling it the fastest growing software company in history. Wow. And they just overtook OpenAI to become the market leader in LLM API cost. So he drops an analysis here. So
Speaker 1:Well, you wanna use AI, use Fin AI, the number one AI agent for customer service. Fin is the best performing AI agent delivering higher quality customer service and higher resolution rates. And another
Speaker 2:post here, so of course a couple days ago Mark Zuckerberg announced his vision for personalized superintelligence personal superintelligence for everyone. Nir says I'm having flashbacks of 2023 and it's a post by Character AI that says we started Character AI to bring personalized superintelligence to everyone on earth. So anyways funny little throwback, funny little throwback there. And then in other news one thing I wanted to highlight, fintech, junkie, what's his I feel bad that I don't remember his real name but clearly he's running as fintech junkie end to end now. But fintech junkie was a founding partner, co founder of QED Investors.
Speaker 2:FinTech invest investment group backed a bunch of companies. Think they were I think they led like two rounds in Wander and they're in a bunch of great stuff. He's introducing thirty seven Maru and taking a step back from QED now. He's going thirty seven Maru. So at a high level thirty seven Maru is a small batch idea factory with one simple approach, identify profound problems, develop well thought out solutions, find amazing founders to partner with and then obsessively build together.
Speaker 2:So Venture Venture Studio is is my read on it. Okay. This is my chance to collaborate with the many remarkable people I've grown to know and respect in the VC world as well as the opportunity to partner with a few hunger eager founders, capital f founders to build special businesses together. Thirty seven Mar isn't an incubator or an accelerator it's a way for me to throw my time and resources at a very small number of ideas and roll up my sleeves as an operator once again. It is, got to put them in the truth zone here a little bit because this this does seem like the definition of a of a venture studio so to say.
Speaker 2:It's not a it's not an incubator. And he says I don't plan on doing it alone. Every idea will require a co founder. Every idea will require require hiring amazing people to work with. Yeah.
Speaker 2:And What what's
Speaker 1:the name again? Thirty seven Maru? Is it m a r u? M a r u. Do you think that's is that a reference to Move 37 and the Kobayashi Maru from Star Trek?
Speaker 1:It must be. It must be. Who's Kobayashi Maru? Kobayashi Maru is this like it's like the final exam that you have to take at Starfleet or something. I don't really remember.
Speaker 1:In the simulation, it's training simulation used by Starfleet Academy to test cadets' character decision making and how they handle a no win scenario part. It's a legendary part of Star Trek lore. And then move 37 from the Lee Sedol DeepMind match. Yeah. But then there's also 37 signals.
Speaker 1:And I don't know where Jason came up with 37, how he picked that because he named
Speaker 2:haven't back
Speaker 1:on the show. 37 signals before Move 37. So it's clearly not a reference to DeepMind. Maybe Move 37 is a reference to signals. They're like, we saw Valkyrie, and we're embedding we're sending messages.
Speaker 1:We
Speaker 2:saw his remote work setup.
Speaker 1:Yes. Yes. Yes.
Speaker 2:We saw The super intelligence wants that.
Speaker 1:Yes. Yes. Yes. And Anyway, it can only communicate with you via numbers. Via So the the the the super intelligence locked in AlphaGo Yeah.
Speaker 1:Is like, I need to send a signal
Speaker 2:to that don't exist.
Speaker 1:Put me in the car and take me around the track. I need to feel the g
Speaker 2:forces. Well, '37 Marius Got investment themes, algorithmic isolation, which he's saying personalized content algorithms are fracturing our shared cultural experiences Mhmm. Leaving us with less common ground than ever before. The algorithm algorithms powering our daily digital diet have become remarkably sophisticated at learning our preferences and serving us exactly what we want to see. I'm not gonna read through all of this but, he basically is referencing back in the day radio, TV, everybody was kind of like consuming a lot of the same media and you could strike up a conversation with anyone about last night's episode or this week's hit song.
Speaker 2:I do feel like I I gotta you know my immediate thought is is when a tweet deeply resonates with me Yep. Most most of our friends I feel like have already seen it. Oh yeah. I thought it was funny. Yeah.
Speaker 2:So it's like some effect of like even if a group of people don't follow the same person like if you have like again like common ground with somebody already then the content will be served to
Speaker 1:you. Mhmm.
Speaker 2:But anyways he wants to, fresh tools and experiences that focus on shared content and group activities. Music's missing layer says the music industry offers consumers inexpensive passive streaming services and expensive engaging live events leaving a vast opportunity for new products to emerge in the middle. The access paradox zero commission trading apps have democratized market access but created a generation of untrained investors gambling with with sophisticated financial products they don't understand. I think some people like that they don't understand it. Makes it more exciting.
Speaker 2:And he let's see here. Understand the internals creative new approaches are needed to support ongoing waves of participants focusing on innovative tools, intuitive safeguards, and adaptive resources rather than conventional
Speaker 1:dice control? Have you ever heard of this this theory? So at the craps table, you know how you have to like throw the dice? Yeah. And there's like and there's like like you can't just be like, I threw it like that.
Speaker 1:You know, they they like you have to throw it across the table. It has to bounce, hit the back and the back has like this spiky foam that makes the dice go in random directions. Yeah. So in theory, it's like impossible to to be like, I'm intentionally good at throwing snake eyes or I'm intentionally good at throwing, you know In theory. Seven.
Speaker 1:In theory. But dice control is is a thesis that some people believe that you can actually control the dice. You you can actually become so precise at throwing the dice that you're like, okay, I know that if I throw it that the perfect perfect arc, it will bounce once, do do a three sixty, bounce another time, do a do a seven twenty, and then land exactly where I want.
Speaker 2:I need back to back to back seven twenties
Speaker 1:Exactly. And I'll the money. Exactly. Exactly. So people there are people that believe this.
Speaker 1:And I and I guess, in theory,
Speaker 2:you could I just need you could do this in John, and I'm a I'm a billionaire.
Speaker 1:Yeah. Yeah. And, yeah, I I I'm thinking of the financial markets equivalent of that now.
Speaker 2:Well, '37 Maru's last theme is financial nihilism. So he simultaneously wants to I I like it. Like, on one hand, it's like new approaches to help people that are new participate participants in financial markets. Okay. And then the other side is just is just like life's a casino.
Speaker 2:Sure. Sure. Sure. And he says a new theory is needed to help restore society's confidence in the achievability of realistic financial goals. So this is focused on, yeah, helping people get out of Yeah.
Speaker 2:Being black pilled
Speaker 1:Yeah.
Speaker 2:And towards ownership. I mean, I think that that the the Gerstner accounts that
Speaker 1:Yeah. Yeah. Are
Speaker 2:are an example of that. But that's a, you know, public solution versus private market.
Speaker 1:Has anyone built a casino on top of that yet where you can wrap the Gerstner accounts and trade forward contracts against your Gerstner account? Yeah. In in a It's like In the most in the highest leverage casino
Speaker 2:Miss Rachel meets like Robin Hood, and she's teaching four year olds to Yeah. To use options.
Speaker 1:I mean, I I I do I do like that he's coming out with some strong theses about how he wants the world to look and then executing on that. I'm thinking of other folks who have done that, like Trey Stevens with the Soul Reader, the the kin the face Kindle. He's like, you know, I I I like to read. I want portability, but I don't want the the infinite dopamine machine to read I don't wanna read on the infinite dopamine machine. So I'm making a pair of Yeah.
Speaker 1:Of e ink glasses that let me read in essentially isolation. Palmer Luckey, same thing with chromatic and mod retro, thinking about I I I want the world to embrace this nostalgic legacy technology. I think there were things that were done very well. So I'm gonna go and Yeah. And marshal resources and to actually go and build that company that otherwise would just not exist.
Speaker 1:Yeah. Because it's not it's not a natural path that the the the the business community or the capital markets would like go and fund. Yeah. So he has to marshal himself.
Speaker 2:Well, also important. I finally remembered Fintech Junkie's name Yes. Which is Frank Rotman. Oh. So we should have him on the show.
Speaker 2:Yeah. I've always appreciated his writing over the years.
Speaker 1:Yeah. Yeah. And we'll reach
Speaker 2:out, Frank. Fantastic.
Speaker 1:Well, let me tell you about Bezel. Get bezel.com. Bezel is the top marketplace in the world for authenticated luxury watches. Thank you. And speaking of luxury world, maybe we should
Speaker 2:Wait. Before we go into that, I just have one more one more story that dropped.
Speaker 1:Okay. Tell me. Tell me.
Speaker 2:Week Got you. By Andrew Ross Sorkin contributed We to got to hang with Andrew last night. Absolute legend. Absolute legend.
Speaker 1:It was pleasure talking to him.
Speaker 2:Yeah. It was a pleasure. His day is, like, very inverted from ours. He's He's
Speaker 1:clearly he's clearly much better at this.
Speaker 2:Had a yeah. No. There's levels.
Speaker 1:There's levels to this.
Speaker 2:Show there's levels.
Speaker 1:There's levels to this.
Speaker 2:Yeah. So we do the show for us. It it sits in the middle of every single weekday. Yeah. That makes it very hard to have any Yeah.
Speaker 2:Type of deep work
Speaker 1:or anything like that. Crazy. We're doing it on hard mode.
Speaker 2:Andrew last night goes, yeah. I I think about it as like I do television on my way to work. He he he works. He he's live like six to nine Yeah. Eastern and anyways Yeah.
Speaker 2:Very cool. But he contributed to this piece in deal book, a new exclusive OpenAI secures another giant funding deal. The venture capital round values the chat GPT maker at 300,000,000,300. And underscores the fierceness of the AI money race. I've been
Speaker 1:hearing rumors about $3.50. 300 seems like an absolute steal.
Speaker 2:So OpenAI's latest mega round, while Wall Street has been focused on how tech giants are spending on artificial intelligence, the most prominent name in the field, OpenAI has been racking up big money. DealBook is the first to report on the huge numbers and what the round means for the company behind ChatGPT in an increasingly heated AI race. OpenAI has raised 8,300,000,000.0 at a $300,000,000,000 valuation months ahead of schedule as part of its plans to secure $440,000,000,000 in funding this year. Billion. Yeah.
Speaker 2:And again, I believe that Yeah. The the whole, you know, a lot of the deals with Masa were getting like announced with clearly like Masa needed some lead time to pull the capital together.
Speaker 1:Yeah.
Speaker 2:Obviously he's very bullish on the company. Yep. To back in March OpenAI announced ambitious funding plans with SoftBank committing to provide $30,000,000,000 by year end. So Masa's just race in, you know, dial in, probably flying all around the world to help put this money together. Might might end up being one of the biggest SPVs of all time in the private in the in the venture in the venture context.
Speaker 2:It's hard to think of
Speaker 1:hard to print out the s p s s p v document and hang it on the wall.
Speaker 2:And again, they they're burning 8 like, roughly 8,000,000,000 this year. So they they do need the cash. A wave of new investors participated in the new round, including private equity giant Blackstone and TPG and the mutual fund manager T Rowe Price. Yeah. So really going after the big dogs.
Speaker 2:Other participants include Fidelity Management, Founders Fund, Sequoia Capital, Andreessen Horowitz, Co2 Management, Altimeter Capital, D1 Capital, Tiger Global, and Thrive Capital.
Speaker 1:Just a few over, please.
Speaker 2:Just a few It's good. Of former guests of the show. Yeah. Blackstone and TPG aren't major investors and AI model makers, but they were seen by OpenAI as particularly valuable since they can promote the adoption of ChatGPT among their portfolio and companies including those in healthcare, financial services, and industrials. The round was five times oversubscribed Mhmm.
Speaker 2:And left some early investors in OpenAI frustrated by the smaller allocations they got as a company prioritized bringing on new strategic backers. The lead investor was Dragonier Investment Group which committed 2,800,000,000.0. You got the size going there?
Speaker 1:I do.
Speaker 2:There we go. An astonishing check from a single venture capital firm that may be one of the largest ever written. The investment cast a spotlight on Dragonair, which made successful early bets on companies like Airbnb, Spotify, and Uber, but has largely stayed behind the scenes in SV. Mark Stadt, Dragonair's founder, is now taking a very public claim on what many in Silicon Valley see as the defining tech platform of the next decade. Yep.
Speaker 2:Their investment represents about 10% of the firm's funds, which I'm just reading as AUM. Yeah. OpenAI's business continues to surge. DealBook hears that the company's annual recurring revenue has soared to 13,000,000,000 Yep. Up from 10,000,000,000 in June and is projected to surpass 20,000,000,000 by end of the year.
Speaker 2:It So is funny when you know you just see people. I think we talked about this on the show last week. All the all the stuff around you know GPT psychosis felt like you know massive comms crisis brewing but we said at the time numbers still gonna go up right like the usage is just astonishing. The number of businesses business users who pay for chat GPT has reached 5,000,000 up from 3,000,000 just a few months ago. The new funding round comes amid OpenAI's delicate negotiations with Microsoft.
Speaker 2:Remember that OpenAI is seeking to become a for profit company which of course Microsoft needs to sign off on Mhmm. As which is still its biggest investor and partner.
Speaker 1:Yeah. Remember a couple was it a couple of years ago or maybe even just a couple months ago, people were like, oh, the foundation model labs are cooked. All the value will accrue to the application layer. And then OpenAI is just like, cool. Like, what if we got an application installed on everyone's phone and then charge them $200 a month for it?
Speaker 1:Like, could do you think we could make a million a month?
Speaker 2:5,000,000 b to b
Speaker 1:Yeah. User paying b to b users Yeah. Like, they're dominating in the in the application layer. Yeah. Absolutely.
Speaker 1:And all
Speaker 2:of this, you know, the the negotiation with Microsoft as well as some of this new capital, like a lot of the new people coming in Yeah. Traditionally, you know, some of the largest asset managers in the world. It does feel like there's a the the path to IPO is is starting to become quite a bit more clear.
Speaker 1:Yeah. Well, we know that they use Linear. You got it on Linear. Linear.app meet the system for modern software development. Linear is a purpose built tool for planning and building products.
Speaker 1:In other OpenAI
Speaker 2:news thing. So Dylan, when we interviewed Dylan yesterday Yep. He was highlighting how design is a like competitive advantage and that's the edge. Yeah. And there's no better example than Linear.
Speaker 2:Yeah. That's just been, again one of those companies that has to have incredible product and incredible product experiences and design because they're helping people design and build products. And just a perfect example where they came into crowded category and it's really one of those like Jiro dreams of sushi businesses where again they weren't the first tool in their category. There's companies with billions of dollars in revenue and they just focus so, you know, intensely on on making a delightful product.
Speaker 1:So Yep. In other OpenAI news, they are doing Stargate Europe. OpenAI is joining forces with two European companies to set up a data center in Norway dubbed Stargate Norway. The project is expected to house a 100,000 NVIDIA GPUs by the end of next year. OpenAI is partnering with AI infrastructure company, Enscale Global, and industrial group, Aker, to set up a facility in Kvandal, just outside Narvik in Northern Norway.
Speaker 1:The company is jockeying for position in the AI Racer seeking to expand data center infrastructure to meet the energy needs to power the technology. If you're looking to travel the world, get on Wander, find your happy place. Book a Wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. So That is. Right?
Speaker 1:The the the the there was an article a while back that was saying, like, Stargate isn't going well. They've scaled it back. And it's like it it just keeps I I keep abstracting it into, well, what is Stargate? Is if if Stargate is just build a lot of data centers, like, we can build data centers. It is possible.
Speaker 1:The question is, like, can you build more than can you build $500,000,000,000 worth of data centers extremely quickly? And the answer is probably no. But if you shoot for the moon, you land in the stars, and that's kind of what's happening where it seems like Stargate will have a lot of really, really big facilities all over the place. And, like, that will be the the like, a compounding advantage and a and a continuing a continuing project for everyone involved. And so some of the folks in the group SoftBank, Oracle, and MGX are equity funders in Stargate, and they committed a 100,000,000,000 initially with plans to invest up to 500,000,000,000 over the next four years.
Speaker 1:So in other news, the mansion section has dropped. It's Friday. Finally. One of our favorite sections, from, let's see. Is this in focus?
Speaker 1:No. Well, we'll we will pull that up in just a second. So tech founder Eugene Nonco has paid $51,000,000 for an oceanfront home in Delray Beach, the highest recorded home sale in the city. Eugene, cofounder of the software company Media Alpha. Have you ever heard of this company, Jordy?
Speaker 1:Media Alpha. He has, his wife, Olga Nanko, bought the home from eye care mogul Massimo Musa, property records show. Musa had taken the home off the market and initially listed it for 60 back in 2021. The Noncos declined to comment. No one no one's commenting, but the home is very interesting.
Speaker 1:Masa and his and his ex wife, Carrie Whitegoe, paid around 9,000,000 for the Delray Beach land in 2002 and spent around five years building the home. The property has nine has a nine bedroom, roughly 22,000 square foot main house as well as a guesthouse. The estate's amenities also include a gym, a roughly 1,000 bottle wine cellar. Not too helpful for me. Guess I could put a bunch of Diet Coke there.
Speaker 1:But this is where it gets interesting. Guess how many movie theaters this house has?
Speaker 2:I I mean, since you're asking, how high?
Speaker 1:Three? Two. Damn. It has a formal movie theater for guests and another movie theater just for kids. It's like It's good.
Speaker 1:I don't want the popcorn in the seats
Speaker 2:of my movie kids to watch whatever the parents wanna watch Exactly.
Speaker 1:Vice versa. Exactly.
Speaker 2:Although it's somewhat I mean, you know, people are gonna critique this and say, like, it should be a family experience, you know, shared experience Yeah. Lost social time.
Speaker 1:Oh, yeah. Yeah. Controversial. But yeah. You know, many many people are in the market for a two bed, two bath, get a nine bed, two movie theater, a thousand bottle wine cellar.
Speaker 1:Seems like a fun house. Moussa cofounded several companies including the in the eye care industry, including My Eye Lab and the LASIK Vision Institute, which he sold because he sold this house because he wanted to downsize. Media Alpha and and I I've never heard of this company Media Alpha, but I wanted to dig into it. It says, in late twenty twenty four, Media Alpha was notified by the FTC, was prepared to file a complaint against the company for alleged deceptive marketing practices. As of April, Media Alpha said it was in active settlement discussions with the FTC.
Speaker 1:In June, the company announced that Eugene Nonko would step down as Media Alpha's CTO and become the chief architect. And so I guess he founded this company, stepped into the CTO role instead of the CEO role, now is stepping down and still was able to purchase a $51,000,000 home. So he's clearly done very well. The previous Delray Beach record was set at 50,500,000.0, so just barely edging that out earlier this year. The area has seen a number of high end transactions recently.
Speaker 1:And another property
Speaker 2:I mean, this this home is truly palatial.
Speaker 1:It is. It is it is very loud opulent. Gold over Statues the
Speaker 2:of philosophers. Philosophers? No.
Speaker 1:No. I haven't seen this. But the the the golden fireplace is really really something. Anyway, another tech founder who I think we
Speaker 2:are If if we can really mine that asteroid that had however many Yes.
Speaker 1:Many more palatial 20,000,000 tons to the market.
Speaker 2:Yes. Is gonna have a golden fireplace like this. So universal basic golden fireplace Yes. Coming soon. So everybody can look forward to
Speaker 1:What was the Donald Trump thing? Had a golden toilet in in the Trump Tower apartment that he had? I mean everything was gold in that apartment but also the I think
Speaker 2:Oh, that's another thing. While while we're at it, we've got to cover the White House is creating a new ballroom.
Speaker 1:Oh, yes. Press secretary. Really quickly, let me tell you about public.com. Investing for those who take it seriously, you can lock in a 6% yield that won't change if the Fed cuts rates and a diversified portfolio of investment grade and high yield bonds. Go to public.com.
Speaker 1:So tell me about the I I saw somebody was saying, oh, I thought it was 9,000 square feet, which is would already be huge for a ballroom. Apparently, it's 90,000 square feet. Is that correct? How big is this ballroom?
Speaker 2:Yeah. So the press secretary announced yesterday the construction of a new 90,000 square foot ballroom.
Speaker 1:90,000 square feet. That is so huge.
Speaker 2:Gonna be able to fit quite a lot of people in there. That should be where we do the next event with Emily. Yes. Seems like an ideal. I know I know some people that could probably get us access to that to that to the space.
Speaker 2:Obviously, we'll have to wait a few years, but construction is expected to begin in September. It sounds like this is being funded by donors. I mean US secretary says president Trump and other donors have generously committed to donating the funds necessary to build. What is your
Speaker 1:cause to build is field is around 50,000 square feet. So you're it's twice it's two football fields. That's that's absolutely nuts. Trump wants
Speaker 2:to be able to hold like a like a gladiator style He
Speaker 1:went he went to the
Speaker 2:NFL all star game. Yeah. The
Speaker 1:Really could. He he could do UFC Standard. You could probably do UFC there. You could do WrestleMania.
Speaker 2:It's 50 A typical football field is 57,000 square feet.
Speaker 1:So we have It's bigger than that.
Speaker 2:Gonna have
Speaker 1:a With some stands.
Speaker 2:America needed a presidential ballroom
Speaker 1:Where is this going to be? Both sides. In the White House?
Speaker 2:No. In Washington? Okay.
Speaker 1:Just somewhere in DC. Because they can't possibly find a spare 90,000 square feet in the White House. Right? That would make no sense.
Speaker 2:Yeah. Let's see. But but what I what's exciting to me is like this space is like we should it shouldn't be hopefully this is not nobody sees this as hyper political. Well, but the space looks absolutely beautiful and I think it's important to exercise the muscle of building beautiful things.
Speaker 1:Yes. Although it is it is somewhat ironic because Trump was a little bit upset about the Fed remodeling a bunch of stuff and spending a ton of money on a a is Donor. Building. Oh, this is Donor. Funded by Donor.
Speaker 1:Okay. Okay. So so no no impact on the taxpayer? Yeah. Okay.
Speaker 1:Got it. Makes sense. A little bit more defensible.
Speaker 2:We'll see. Sure. I'm sure somebody can figure out how Somebody will how it's gonna impact the taxpayer.
Speaker 1:Who knows? Hopefully, it's built quickly. That that would be my biggest hope. Anyway, should we move on to what's going on in Miami? Miami.
Speaker 1:Should. Absolutely penthouse is sold. This is fun because it's a it's a so look up open evidence and pull up the cap table because I think you're gonna wanna dig into this company. We haven't had Daniel Nadler, the founder, on the show yet, but we gotta talk to him because I've heard a lot of people talking about Open Evidence. So this spring, 42 year old tech entrepreneur Daniel Nadler gave up his Miami rental apartment and moved into a beachfront hotel.
Speaker 1:We were talking about living in hotels, recently, when and where you stand on that. The goal was to be was to streamline his life and focus on building open evidence. His Google backed medical AI company, which is now valued at $3,500,000,000, quote from him, I didn't want the overhead of dealing with houses and all the stuff that comes with houses, he said. If I could wake up at 4AM and just order room service, this is so perfect. I love it.
Speaker 1:Then a then a friend pointed out that the hotel where he was staying, the Four Seasons at the surfs at the Surf Club in Surfside, Florida, also had condos for sale, which is hilarious that you're you're staying there and you don't realize that they're it's like, that's kind of an L on the Four Seasons for not upselling. It's like Yeah.
Speaker 2:You've You have a guest here that's
Speaker 1:just stayed here for a month. Why don't you just tell them about the condo that's right over there? But Friend of the show
Speaker 2:lives in in a in a Four Seasons. Oh, really? I think Cool. Mister John Ferentino. Doesn't he live in a in
Speaker 1:a No. Four
Speaker 2:I didn't know that. Residence.
Speaker 1:So this week, he he checked out of the hotel and moved over to the condos. He paid $38,200,000 in cash for a fully furnished penthouse at the beachfront surf club. How much? Four Seasons. $38,200,000 for a 6,000 square foot five bedroom penthouse with a rooftop pool.
Speaker 1:The seller was tied to an entity who bought the triplex for so it's three stories Open Evidence. 30,000,000.
Speaker 2:Open Evidence just a couple weeks ago Yes. Raised a new round of $210. $210,000,000.
Speaker 1:$210.
Speaker 2:Three three and a they raised $210. Give it up. Hit the seis gone.
Speaker 1:You probably you probably could do that. Just raise $210 and then just put that out there and people will misprint it and you'll get all
Speaker 2:the press you need. Led by GV and KP Okay. And valuing the company at 3 and a half billion. So he, I imagine, was able to to pull enough liquidity out.
Speaker 1:Believe And this is one of those stories where the company's been going for a long time, like pre AI boom, then now is a major beneficiary of the AI boom. So it is
Speaker 2:Started C dram was in 2021.
Speaker 1:2021. So that's still pre GPT three, like, GPT four. Right?
Speaker 2:Of course, Sequoia did the a. Of course. And Sequoia did the a in this year?
Speaker 1:What? Oh, wow. So they were grinding for a couple years and then started taking off. Nadler's new penthouse spans about 6,000 square feet with five bedrooms and roughly 2,000 square feet of terrace space. Nadler said there's also a roof deck with an infinity pool facing the ocean.
Speaker 2:There we go.
Speaker 1:It actually feels almost like one of those Venetian Palazos. But in the sky, he said. I like this guy. What a good what a good turn
Speaker 2:of phrase. He sounds like he's not he is not the guy to turn off his Zoom background on a call. Yes. Know, he's just he's just Yeah. Embracing reality.
Speaker 1:Yes. It's
Speaker 2:great. Well, any any more notes here? And then I think we gotta
Speaker 1:I wanted to pounce on it, he said. Whatever I paid, I think it'll be worth double that in five years. There's very little negotiation, Nadler said. He said, that's what he wanted. And I said, okay.
Speaker 1:A Canada native, Nadler is founder of Kensho Technology. Okay. I I because I was wondering, how did he wind up with $40,000,000 in cash to buy this to buy this penthouse if he's still in the series b? The latest round. Yeah.
Speaker 1:He could've done some crazy secondary, but that would be kind of a crazy deal. But he is a second time founder. In 2,018, he sold Kensho Technologies for $550,000,000. There you go. You walk into Sequoia for series a for your second company, they're probably gonna say yes.
Speaker 1:And that's what and that's what happened. So his decision to move into the Four Seasons is partially inspired by inventor Nikola Tesla's tenure at a New York hotel during the last years of his life. It sounds completely insane, but there's precedent, Nadler said. He's like defending it.
Speaker 2:Alright. We gotta wrap
Speaker 1:this Thank you so much for Really
Speaker 2:important news before we leave. Mira Moradi has started following Growing Daniel.
Speaker 1:Oh, no. That's amazing. And Congratulations to Growing Daniel. He's posted He's probably getting Maradi so many times. It's a wild bet she's following I wouldn't be surprised
Speaker 2:growing Daniel. If, you know, Thinky Machines buys his company. He's an AI he's an AI founder.
Speaker 1:That would be amazing. He's a tier one I I just think he'd have a lot of fun there. I don't know. I whatever he chooses to do, I fully support. And we're looking forward to getting back to LA.
Speaker 1:Looking forward to get back to Eight Sleeps. Go to Eight Sleep dot com. That's our final ad read. And thank you for watching. We will talk to you on Monday.
Speaker 1:Have a good evening.
Speaker 2:Fantastic week. Have a incredible weekend. We love you. Bye. Bye.