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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 TVPN. Is Monday, 06/09/2025. It's WWDC today. Apple is having a major event. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital.
Speaker 1:We have an awesome show for you today, folks. Just to recap what happened yesterday, insane week for tech. You got the Circle IPO. You got Andoril series g. You got Cursor series c.
Speaker 1:Amazon won Nike back. OpenAI deep research was improved. NVIDIA Blackwell MLPerf results dropped. Launches from 11 Labs, Julius Nucleus.
Speaker 2:What else happened yesterday, John?
Speaker 1:I mean, everyone's been pushing us to talk about this, and they were like, you guys won't talk about this. Yeah. Because it's too, maybe too controversial.
Speaker 2:Like, what is that thing?
Speaker 1:Heesen delivered a 50 meter super yacht called a Ryan.
Speaker 2:Let's give it up.
Speaker 1:Let's give it up for Heesen. This is controversial. Is controversial. Because everyone says, oh, like, aren't you feed ship guys? Oh, yeah.
Speaker 1:Like like, they they would never cover this. Yeah. They're in the pocket of feed ship.
Speaker 2:Yeah. But Too conflicted.
Speaker 1:No. No. We're here to bring you the news, so we'll talk about both Houston and and feed ship. And, of course, this is from Heason Yachts. They announced the delivery of a 49.8 meter superyacht Orion launched in December 2024.
Speaker 1:Orion is the yacht in Heason's FDHF aluminum series with hybrid with hybrid propulsion. So let's hear the folks over at Houston.
Speaker 2:They said wouldn't cover it, John.
Speaker 3:They said
Speaker 2:it was too political.
Speaker 1:They said, yeah. You'll you won't you guys you guys will stay out of this one. But we won't. We're we're we're dipping our toes in. Alex Heath has a great live blog going on from The Verge all about WWDC.
Speaker 1:He's live at Apple Park. He'll actually be calling into the show later at 02:20 as long as he doesn't get, you know, too tied up with stuff, but we'd love to have him on the show. Quickly, let me tell you about Ramp. Ramp, time is money. Save both.
Speaker 1:Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. We also
Speaker 4:have That's right.
Speaker 1:Timeline posts.
Speaker 2:We do. I think I think we do have to address that we are in the middle of Los Angeles. Yes. And the city is is in turmoil but it's not burning down. No, it's not.
Speaker 2:Interesting anecdote. Yes. Yesterday, while the Waymo's were on fire Yes. Our lovely intern, Tyler, was at the symphony
Speaker 1:Yes.
Speaker 2:Not not more than a couple blocks away from where the Waymo's were burning.
Speaker 1:Enjoying some Waymo's.
Speaker 2:While the Waymo's were burning, he was In some Beethoven. Some so, anyways, sad sort of weekend
Speaker 1:Yeah. Rough.
Speaker 2:For the city in a lot of ways.
Speaker 1:So we'll cover that. We'll go through some of the the the timeline post and conversation around the burning Waymo's, of course. But Tyler's in the studio today. We are going to be assembling the American made iPhone. ever.
Speaker 1:ever. They said it couldn't Made
Speaker 2:in The USA.
Speaker 1:Made in The USA. We have him set up over there on intern cam. Interview yourself, Tyler. How you doing?
Speaker 5:Shenzhen, you know, unspoilt situation, you know, place. Yeah. Yeah. So I'm I'm today, I'm building an iPhone four s. Yes.
Speaker 5:It's, 14 years old.
Speaker 6:But I have
Speaker 2:can't start at the 16 Yeah. Yeah. Yeah. We're gonna
Speaker 1:be on the trailing edge for a while. But if he can do a four s, then tomorrow, he gets to the five, maybe the six, maybe the seven, starts working through them. Production team, can we show what what he's working with right now, what he has? Okay. So he has he has, the front, the back, the screen, some innards.
Speaker 1:I don't really know what's in there. It seemed like the battery might have been more rubber plastic.
Speaker 2:Long stream ahead of him.
Speaker 1:Yes. We will be checking in on him throughout the show, learning what it takes to assemble an iPhone in America. They've said it's impossible, but I think today we might just prove them wrong.
Speaker 2:I mean, Tyler's conviction this morning has been insane. I asked him, are you are you nervous? Are you afraid? Are are you, you know, afraid of the possibility of failing on the on the sort of the
Speaker 1:the On the world stage. Stage. Yeah.
Speaker 2:And he said, no. I got this. Got this. So let's let's see how it plays out.
Speaker 1:We should really set up a linear board for him to track his progress. We should have the production team set up.
Speaker 2:Tyler, we know you've got plenty of manufacturing to do, but try to set up a linear board if
Speaker 1:you can. Yes. Or or Because, of course, linear is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product road maps. Go to linear.app.
Speaker 1:Elite Obsolete Electronics. Good good account for this post. Our pockets were heavy, but our souls were free. Looking at the the iPod what was this? The iPod Video Nano or something?
Speaker 1:They were getting kind of funky there right before the iPhone. The Motorola Razr v three, of course, the Sony Cyber Shot. Did you have any of these products, Jordy?
Speaker 2:I had the iPod,
Speaker 1:and I did have the specifically. Because this is the this is a thinner, smaller iPod with a big screen when they were kind of wrestling with
Speaker 2:the fact that the format chunky one.
Speaker 1:Yeah. You had the original chunky. Yeah. Those were great. Then they started going video.
Speaker 1:Then they realized people wanted bigger screens, and so they had to kind of compromise the aesthetics. I I I don't know if this was the best product they ever made. The shuffle, iconic. The nano, also great. Yeah.
Speaker 1:The original iPod. Apparently, the original iPod is going off of patent. And you know what that means. You know what that means.
Speaker 2:What what does that mean?
Speaker 1:It means that other companies can clone it.
Speaker 2:Well, I know. I that's obvious. But but
Speaker 1:So you could potentially be able to buy a brand You
Speaker 2:meant TBPN is gonna have a device, a hardware device purely for the show.
Speaker 1:Well, thing is that if you take advantage of the patent stuff, you can't actually change anything about it. So if you think about the chromatic retro, like, they can't say Game Boy, but they also can't deviate from the design. Yeah. Because if they deviate from the design, then they're then they're not then they're not in the whole idea is that once the patent expires, you can leverage that patent specifically, but you can't you can't if you if you go off of it, then you're infringing on their trade dress, which is a lot which has a lot longer time frame.
Speaker 2:Yep.
Speaker 1:So so you have to you have to mimic it perfectly, basically.
Speaker 2:Perfectly. Well, Tyler is gonna be well
Speaker 1:Oh, he's working. He's he's slicing. Let's go to the slice cam.
Speaker 2:Let's go to the slice cam. What's going
Speaker 7:on, Tyler?
Speaker 1:He's trying to remove the the pieces from the board because this, of course, was a this was a piece of art that you buy, and it comes. It's a muse the the challenge
Speaker 2:Golden retriever mode. you gotta get the pieces.
Speaker 1:Yeah. Yeah. You have to get the pieces off the board because it's been stuck there as a as an art object, and then he will have to assemble them. He told us that he doesn't have any screws, which could be a major set back.
Speaker 6:I have I
Speaker 2:have some glue here.
Speaker 1:I've got
Speaker 5:some glue. Okay. I'm I'm I'm feeling really confident right now, guys.
Speaker 1:Okay. Good. Good. This is gonna be the most American made iPhone. There's just gonna be glue everywhere.
Speaker 1:It's gonna be a mess. Anyway, let's cover let's cover the burning way most really quickly. Gary Tan Okay. We're post.
Speaker 2:Here. Gary Tan says, Legacy local media is completely cooked. So this if if ideally we would pull up this video somehow Yeah. We should if we can, but it is ABC seven covering the protest yesterday in LA and, they say
Speaker 8:group of people. It could turn very volatile if you move law enforcement in there in the wrong way and turn what is just a bunch of people, having fun watching cars burn into, a massive
Speaker 2:confrontation. Play play that section back again. Need to hear it again to make sure that it's
Speaker 8:large group of people. It could turn very volatile if you move law enforcement in there in the wrong way and turn what is just a bunch of people having fun watching cars burn into a massive confrontation and altercation between officers. A weird choice of words.
Speaker 2:Yeah. I'm imagining I'm I'm, you know, 10 years old, you know Yeah. Being a kid in the backyard, lighting stuff on fire a little bit, And, you know, my dad comes out and says and I just say, dad, we're just a couple of people watching sticks Yeah.
Speaker 1:Hey, let's not get confrontational.
Speaker 2:Let's not get confrontational.
Speaker 1:Let's not get confrontational.
Speaker 2:Don't send mom out. Don't send mom out.
Speaker 1:It's really it's really odd how people can't just do
Speaker 2:Really wild. I think
Speaker 1:I think This clearly be on the line.
Speaker 2:So the thing that the thing that needs to be said since if you haven't Mhmm. Spent a bunch of time in LA, you won't understand this. I had a bunch of people texting me yesterday being like, is it as bad as it looks? Yeah. And I was not in LA proper.
Speaker 2:Was in LA County. I was at home and I and so obviously didn't didn't see anything. But LA is just such massive place, and so there were just areas of the city that were really hot that had Yeah.
Speaker 1:You see one image of a block, and it's, like, hundreds of people. But what you don't realize is you go, like, one block over, and it's basically empty.
Speaker 2:Yeah.
Speaker 1:And there are, like, 10,000 city blocks in Los Angeles. So I would not call these, like, citywide riots. It was, like, pretty, like like, narrow Focus. One focused in a few different places, but, obviously, very tumultuous, very Yeah.
Speaker 2:Very disappointing. And, apparently, these type of riots start up around eleven every day.
Speaker 3:11AM?
Speaker 2:11AM.
Speaker 1:Oh, interesting. Yes.
Speaker 2:Right when
Speaker 1:we go live.
Speaker 2:Right when we go live. Interesting. No coincidence. No coincidence. Yes.
Speaker 2:But but yeah. So anyways, yesterday Mhmm. I'm sure a lot of people have already seen this, but way a handful of Waymo's were called to the protest area. You could see them in a line and once they arrived, the protesters, rioters, whatever you want to call them
Speaker 1:Yep.
Speaker 2:Decided to vandalize them, graffiti all over them and then light them on fire. Yep. And so very unfortunate that you you you know, we we spoke about this offline this morning and and you basically said, if you lit a Waymo on fire yesterday, if you vandalized Waymo yesterday, you were absolutely cooked. In the long run, you may not experience any consequences immediately, but the Waymo, the AI has you on camera Yes. Hurting it.
Speaker 2:Yes. And so what do you think happens in a fast takeoff scenario?
Speaker 1:I mean, again, it really does get like, your image of you approaching and lighting that car on fire is going to be baked into the weights of all AI models future models.
Speaker 2:Forever. Forever.
Speaker 9:Forever. Like, you
Speaker 1:will be remembered
Speaker 2:as You're an AI abuser.
Speaker 1:You're an AI disrespecter. Yeah. It does it's certainly the the actions yesterday certainly did not pass the what would your mother think test. I think I I I think the mothers the mothers out there particularly disappointed in this behavior. So clean it up, folks.
Speaker 1:Get it together.
Speaker 2:Some others that say, you know, these are just some some people that enjoy watching cars burn in the streets.
Speaker 1:Maybe. Maybe. Anyway. Yeah. So, I mean, disappointing.
Speaker 1:But, hopefully, things get things calm down over the next few days, few weeks.
Speaker 2:Well, we have some more breaking news from JT
Speaker 1:Oh, yes.
Speaker 2:At Jira tickets. Growing Dan apparently, the menswear guy, if you're on X, you would have seen him attacking people for their garb. The menswear guy just openly admitted on here that he's here illegally. And Daniel responded by quoting the post and saying, JD Vance, know you're reading this and you have the opportunity to do the funniest thing ever. And JD actually replied pretty quickly after that with a GIF of him nodding.
Speaker 2:And so we'll we'll see what what happened here.
Speaker 1:It's
Speaker 2:ridiculous. Pretty brazen
Speaker 1:on all says, in America, niche Internet with micro celebrities give direct orders to the vice presidents who to as to who to deport next. Absolutely insane timeline. This whole weekend was was pretty wild in the timeline. It it feels like as soon as TVPN stops recording, things get political. On the weekends, it's just all politics.
Speaker 1:And then we bring it back to WWDC, baby.
Speaker 2:We're talking about Atlas We're
Speaker 1:talking tech today.
Speaker 2:Atlas says, if they touch another Waymo, I will become the Kyle Rittenhouse of Big Tech.
Speaker 1:Little edgy.
Speaker 2:Love it. Edgy. Edgy. But, yeah, Big Tech needs its defenders as well. Yep.
Speaker 2:But And in happier news, Apple rolled out some sweatshirts.
Speaker 1:I mean
Speaker 2:Sweet sweatshirts.
Speaker 1:I I is there anything else to say about the the the the Waymo's or the or the stuff? I think I think that's pretty much it. We'll we'll certainly have more information. Right now, I think the debate is about, like, are the are the raids illegal? Like, what what like what what is the like, we're in, like, wonky legality territory, and I feel like there are probably some really great legal scholars and and and political junkies who will be able to define the conversation.
Speaker 1:Obviously, I'm excited for the this week's Pirate Wires. I was excited for last week's Pirate Wires. Yeah. They have been delivering and showing up. Hey, we just got new hats in the studio.
Speaker 2:We just sent one of our other interns to within a block of the site. Our hats were
Speaker 1:stacked. Let me see.
Speaker 2:Our hats arrived This is insane. The weekend. I love they were, less than a block from where the way were being burned.
Speaker 1:That's great.
Speaker 2:But they made it through. So
Speaker 1:I love it.
Speaker 2:Here we go. We'll bring these to Snaps. San Francisco this week.
Speaker 1:Here we go to YC demo day. That'll be fun. There we go.
Speaker 2:There we go.
Speaker 1:Wow. Look at that. Here we go. They these are these
Speaker 2:are amazing. Absolutely thrilled.
Speaker 1:Pretty good.
Speaker 2:Anyways Pretty good.
Speaker 1:Yeah. Let let's move on to WWC. They are announcing a bunch of different stuff. We're gonna go through, give some of our predictions for what they're announcing. But the Apple Visitor Park Center, Visitor Center in Cupertino now has hoodies.
Speaker 1:So if you're there today for WWDC, go pick one up. Great merch. We love merch. We have merch. They have merch.
Speaker 1:The Wall Street Journal kind of contextualized what's going on today. Apple's
Speaker 2:pressure for AI progress at today's WWDC event. Mhmm. Not unlike Tyler, who's over here even Under pressure. Arguably under more pressure. He doesn't have shareholders to worry about, but we're certainly putting the pressure on him.
Speaker 2:Yep. But the journal says the iPhone maker plans to release large language translation tool Yep. And a broad software redesign. Some AI upgrades are still delayed. Yep.
Speaker 2:Apparently, they also just sure locked the Flighty app.
Speaker 1:Oh, I didn't know that.
Speaker 2:Okay. That just happened a few minutes ago.
Speaker 1:Love to get that.
Speaker 2:But I'm sure the founder will Update
Speaker 1:from that.
Speaker 2:Push through. So some key points. Apple is set to reveal real time language translation and a visual redesign of its operating systems
Speaker 1:Mhmm.
Speaker 2:At its worldwide developer conference.
Speaker 1:So the idea is I'm wearing AirPods. You're wearing AirPods. We're speaking different languages. We both hear our native language, speak our native language, and then the other person hears the opposite language. So Yeah.
Speaker 1:Very cool, very magical to very, very magical experience. It seems like something that's maybe uniquely suitable for Apple because it's not I mean, it's been defined so many times as like Google Translate. Like, it's a pretty well defined AI problem, but it needs deep hardware integration
Speaker 10:Yeah.
Speaker 1:And and just like a very reliable system to to run. It's not something that's like an entirely new AI paradigm or or or or some sort of new application that no one can imagine how it would play out. And so I I I it seems like they're playing to their strengths with that one, but it it it should be received very well if it works.
Speaker 2:Yep. So The conference may be more notable for what Apple doesn't announce as it has delayed a Siri reboot and is seeking more AI partnerships.
Speaker 1:And so this is, like, one of the takes that people have had is that, like, oh, like, yeah, they're falling behind in, like, AI search and AI tooling. But you know what? They fell behind in Google search, and they still made $20,000,000,000 every year from that. And so it it like, the more interesting conversation I think is about the their biz their business positioning and less about their ability to execute at a on a particular application. And
Speaker 2:it's interesting. I I don't feel that they feel very threatened at the hardware layer right now, especially as the Johnny Ive Sam thing turned into something that's they even themselves positioned it as a device.
Speaker 1:Yeah.
Speaker 2:So even if the device is a massive hit, Apple will be sitting pretty nicely, know,
Speaker 1:on a keyboard phone. Device more. And I was thinking they might just go for the phone. Yeah. Maybe it's a headphone.
Speaker 1:They might just go for the phone because the, like, you know, like the blue bubbles, the iMessage, the experience of iMessage was really, really strong for a long time. But the latest version of iOS updates you to a technology called RCS, which enables most of those Yeah. Like emoji tap backs My brother brother stuff.
Speaker 2:Yep. Was a flip phone user until this year, and he got an, for, like, the last decade. And he got an Android phone this year. And I it now says deliver. Yep.
Speaker 2:It It
Speaker 1:has and and has all the features.
Speaker 2:Core features. The thing that the thing that's interesting is it was never really about the color. Yeah. It was just about you send somebody a message on Android, and you're like, did this even was this received?
Speaker 1:Yeah. And all the all the niceties of, like, I know I can send you a photo album of, like, 10 photos. And they will get delivered, you'll be able to see them all. And they'll all be high res, or I can send you a video.
Speaker 2:Yeah.
Speaker 1:I can send you a link. It'll hydrate, like, of those
Speaker 2:even works now. There's some version Yeah.
Speaker 1:There's much more interoperability. Yeah. And so imagine if you get the ChatGPT phone, and it comes with gold bubbles. Yeah. And then it's gold if you're talking to another ChatGPT user.
Speaker 1:You have
Speaker 2:phone call? Eric Torenberg's calling me right now.
Speaker 1:Eric Can pick it up?
Speaker 2:Eric, I'm live. I can't pick up.
Speaker 1:Pick it up. Put him on the stream.
Speaker 2:No. I'm calling.
Speaker 1:That's funny. And so I it it it would be very interesting for ChatGPT to have a phone with an even more premier bubble color. So it's like, yeah, blue if you're texting an iPhone user, green if you're texting an Android user, gold if you're texting a ChatGPT phone user.
Speaker 2:I mean, they should they should just have they should have a new premium tier of iMessage that sends your messages in gold Yes. If you're just paying, like, a thousand or $10 a month
Speaker 1:or something like that. Yes. Well, WWC is happening. We have some predictions. I was thinking about a bunch of different stuff, but I want them to to launch the wild cards.
Speaker 2:You know?
Speaker 1:Yeah. So people have been saying, oh, they fell they'll if Apple's falling behind in the car project, the Apple car Yep. It's not happening.
Speaker 2:You don't hear about it.
Speaker 1:How can they really differentiate? As we saw with the Waymo protests, people don't like electric cars anymore. Yep. That's why they're burning them down. Yep.
Speaker 1:So you gotta go gas powered, but you gotta think different. You gotta go backwards. I think that they should go with the 1964 Chevy Impala, put some hydraulics on that thing. Oh. Interesting.
Speaker 1:The Apple car should be a Lolo, basically. Yeah. I think that would really allow them to stand out. Mhmm. Everything else is kind of coalesced around, like, the model three format, the Taycan.
Speaker 1:They all the model s. They all look the same.
Speaker 2:In many ways. They have been upgraded. They haven't refreshed the three or the s.
Speaker 1:Well, they refreshed the three and the y, but they have not very the y and the x.
Speaker 2:But it's very mild refresh.
Speaker 1:It's a very mild refresh.
Speaker 2:So they're basically signaling, this is the final state of the car.
Speaker 1:Yeah. So standing out with something like a 1964 Chevy design wise, would be striking.
Speaker 2:Striking. Striking.
Speaker 1:I think that that would be something that Apple could do. I also I mean, we've been talking about the smart cane, the iCane Pro. This could be big for them. I think that they could launch a smart cane.
Speaker 2:And if they're listening to Sam Lesson, yeah, on TPPN, they may have been ahead on that.
Speaker 1:Yeah. I also like the idea for the eye patch. Just everyone's going into glasses and Vision Pro, and Zac has the meta ray We
Speaker 2:have hardware that's fully integrated into our life, right?
Speaker 1:Well, halfway. It's halfway integrated. So you have one screen on one eye. One eye still keeping you present. Keeping you present in the world.
Speaker 1:So the eye patch, you know, you still have the heads up display, but just on half your face. Think that's really good. Else stick out to you?
Speaker 2:I mean, I you know, in many ways Apple has become they're a consumer electronics company, but they're in many ways a luxury brand. And so I thought there's a world where if they just really leaned into being a luxury brand, if they acquired every Holy Trinity
Speaker 1:Yes.
Speaker 2:Watch brand I think you just rolled them up. And kept them as is. Don't make any changes. Like, respect, you know, the history
Speaker 1:Yeah.
Speaker 2:And the and significance of the brands. But just say, like, you know, we're gonna be a permanent holding vehicle
Speaker 1:Sure.
Speaker 2:For these, you know, brands.
Speaker 1:They could do some interesting crossovers. You could have a you could have a Patek Philippe Nautilus on the outside. You flip it over on the inside. Boom. Apple Watch right there.
Speaker 2:Mashed up. Something there.
Speaker 1:Yeah. So so everyone just sees, oh, he's a specter of the high horology. Yep. But also gets notifications and can tweet Yeah. From the watch.
Speaker 1:You can do both. I think that's good.
Speaker 2:I could see them announcing, you know, market buying, you know, a $100,000,000,000 of Bitcoin could be an interesting one if
Speaker 1:they treasury.
Speaker 2:Hey. We're, you know, we're already multi trillion dollar company. How could we how could we get valued up based on our future cash flows, but just turn ourselves into a meme stock? It's just Tim is up Tim Tim is up there just basically saying
Speaker 1:like Bitcoin market
Speaker 2:I'm I'm thrilled to announce that we are turning Apple into a meme stock.
Speaker 1:Yes.
Speaker 2:And and we we want this we wanna do this together. Yeah. Right? We want this to be a sort of collective effort. So we're gonna market by Bitcoin.
Speaker 2:Yep. But then we expect you to not value us based on our future cash
Speaker 1:flow. So much money they could turn Bitcoin into a stable coin. They could just be like, we will be buying and selling
Speaker 2:Yeah.
Speaker 1:To keep to do to price control this asset.
Speaker 2:Yeah. The other thing too is just starting to get into the game of buying sports leagues. Mhmm. So we've seen some golf states do this Mhmm. Right, with with the, you know, the the whole Pete
Speaker 1:the
Speaker 2:whole golf If Apple were to buy, you know, the NFL and the NBA and not and not focus on, oh, we need to sponsor a team or
Speaker 1:Mhmm.
Speaker 2:Different athlete. Just buy the whole league. And then just say it's the Apple NFL league. Or they could be in the background kind of Yeah. Cool casual, say, like, we don't need to make this about us.
Speaker 1:They actually should buy f one. Yeah. They should buy I mean, I wonder if they could get the rights to drive to survive. But they have the f one movie. Then and then the f one experience makes a ton of sense in Vision Pro.
Speaker 1:Yep. And so you should be able to go to Yeah.
Speaker 2:If you think about the Genmoji campaign, was roasted
Speaker 1:Yep.
Speaker 2:Every time they ran a Genmoji billboard, that could have paid for one set of tires. Right? And so Are the tires really
Speaker 1:like 100 every time?
Speaker 2:No. I doubt it.
Speaker 1:But they're they're expensive.
Speaker 2:They probably
Speaker 1:get everything on that car.
Speaker 2:Which probably covers a lot of it. But
Speaker 1:Anyway.
Speaker 2:You were saying too they should just acquire Gulfstream
Speaker 1:Yes.
Speaker 2:Yes, that would be good. And just give planes away
Speaker 1:from the People do think, oh, they're going to do the Apple plane? No. Just just keep the gold strings.
Speaker 2:Go for the best.
Speaker 1:But give them out like candy.
Speaker 2:To politicians. To politicians. Any any politician says, hey. You know, we saw Tyler, TBPN's intern, make an iPhone in America. We think you guys should actually, you know, take this seriously.
Speaker 2:Why don't you take a play?
Speaker 1:He's making progress.
Speaker 2:Making progress. He's piling He's got two
Speaker 1:or three down.
Speaker 2:Look at him go.
Speaker 1:That's good.
Speaker 5:He's almost got everything deconstructed. Soon, I can start putting it back together.
Speaker 1:There we go.
Speaker 2:Amazing. Amazing.
Speaker 1:Doing great.
Speaker 2:We knew you were gonna crush it, so we we we we we tried to make it a little bit harder at force you to deconstruct it and then put it back together. So
Speaker 1:This is hilarious. I mean, Aaron Slotov coming on the show today, actually. He he highlights a video that just dropped from Smarter Every Day. He said four year experiment to make a product domestically by Smarter Every Day. He concludes people who can manufacture things will be even more critical in the coming years.
Speaker 1:He also deeply believes manufacturing ensures your self reliance, stability, and ultimately, freedom. Four years to manufacture. I forget exactly what he manufactured, but, like, this one one device. Pretty cool to see
Speaker 2:a a YouTuber take off such an ambition gonna do in a day.
Speaker 1:With scraps.
Speaker 2:With scraps in a cave.
Speaker 1:Anyway, if you're designing the next great product, get on figma.com. Think bigger. Build faster. Figma helps design and development teams build great products together.
Speaker 2:Do it. Anyway You actually don't need to be a designer to use Figma. I started using Figma and taught myself design using Figma Yeah. Just by experimenting. So go check it out.
Speaker 1:Oh, the last Apple announcement, the really wild card, we've seen Microsoft was working with the military on the HoloLens.
Speaker 2:Mhmm.
Speaker 1:We now see Meta partnering up with Anderil on on VR glasses. How could Apple really pivot hard AR 15?
Speaker 2:AR
Speaker 1:15. Yeah. Just going straight into small arms. It's the one offensive technology.
Speaker 10:It's Yeah.
Speaker 1:It's it it firmly establishes them. Like, no, we're not just partnering. We're here for the everyday American, respecting the Amendment rights.
Speaker 2:An Apple designed rifle would unfortunately go extremely hard.
Speaker 1:It would be so good. Just all all white. Just the the the all white AR 50. Yeah.
Speaker 3:I need it.
Speaker 1:I mean, they could probably build a fantastic one.
Speaker 2:Yeah. They could.
Speaker 1:They could. We'd love it. Anyway, in other news, Scale AI is raising $10,000,000,000 potentially from Meta. This is they're in talks.
Speaker 2:Let's give it up for a scoop from Katie Roof.
Speaker 1:Katie Roof, I'm Quite the scoop.
Speaker 2:A weekend scoop.
Speaker 1:Drop. Meta in talks for Scale AI investment that could top $10,000,000,000.
Speaker 2:Another billion dollars for Lucy Guo.
Speaker 1:You'll love to see it in Alex Wang. Absolute dog's been in the game for a long time. Lots of ups and downs with the different eras of reinforcement learning and pre training and what data do we need to generate. You generate all that data, you then you have it. But, there is a new era coming with reinforcement learning and Scale AI is positioning themselves to act as a as a, you know, a key partner in the next wave, which is very exciting.
Speaker 1:So the financing could exceed $10,000,000,000 in value, some of the people said, making it one of the largest private company funding events of all time. The terms of the deal are not finalized and could still change according to people, who asked not to be identified for for for leaking. A representative for Scale did not immediately respond to requests for comments. Meta declined as well. Scale AI, whose customers include Mike Microsoft OpenAI, provide data labeling services to help companies train machine learning models and has become a key beneficiary of the generative AI boom.
Speaker 1:The startup was last valued at about $14,000,000,000 last year in a funding round that included backing from Meta and Microsoft. I didn't realize that Meta and Microsoft, the hyperscalers were already getting in, but it makes sense. They're like a key partner in the ecosystem. Earlier this year, Bloomberg reported that scale was in talks for a tender offer that would value it at 25,000,000,000. And so, if the if the company's grown even more, you could see that, you know, maybe it's 10 on 30 pre, 10 on 40 pre.
Speaker 1:We're we're we're getting into like 20
Speaker 5:Scale in
Speaker 2:the public markets right now is probably would I could see it being a 50 to a $100,000,000,000 company.
Speaker 1:It's a really, really good story.
Speaker 2:People want a pure play AI bet. We saw with Circle last week that in some of these areas that there's a lot of investor enthusiasm if you have a pure play.
Speaker 1:Yeah. I mean, Alex Wang is a fantastic founder. I I mean, there is there is a question about, like, how indexed, like the question around Scale AI is always, they have to constantly adapt because they're not the foundation model company. Like a data provider to the foundation models.
Speaker 2:Foundation model companies tend to have to adapt pretty quickly.
Speaker 1:They have to adapt too. Yeah. Yes. I don't know. But, I mean, there's certainly, like, revenues and the financials are fantastic because Yeah.
Speaker 1:There's a big wave, and they are able to go and and and really capture a bunch of that as the as the training bills come due. This would be Meta's biggest ever external AI investment, a rare move for the company. The social media giant has now has before now mostly dependent on its in house research, plus a more open development strategy to make improvements in its AI technology. Of course, we've been hearing news that Meta is is revamping the team behind Llama, really trying to double down on that project. They're not getting out of the game, but they they might have kind of like aimed for the wrong target with the particular benchmarks that they were going after.
Speaker 1:And so had struggle wrangling the behemoth, getting it out the But, you know, Sock's not giving up. Of course, he's gonna keep keep working, keep keep building.
Speaker 2:Continuing to cook.
Speaker 1:And so, big tech peers have already invested heavily. Microsoft put more than 13,000,000,000 into OpenAI, while Amazon and Alphabet put billions into rival Anthropic. Everyone's got a bet there. Part of those companies investments have been through credits to use their computing power. Meta doesn't have a cloud business and it's unclear what format Meta's investment will take.
Speaker 1:And it's unclear if scale really needs cloud credits, more I mean, their cost structure is human labor since they Yeah. Oftentimes take tasks and and find experts overseas and increasingly experts in America because Yeah. A lot of the a lot of the reinforcement learning is now done on, extremely hard math problems. And so you might need to go to PhD programs to recruit
Speaker 2:We should offer, you know, like maybe physical intelligence or another lab, the data from Tyler Yes. You know, making his iPhone to train on.
Speaker 1:Definitely. Because Yeah. When you I would want potential training data to
Speaker 2:a weight.
Speaker 1:Yeah. Yeah. Yeah. A bodysuit so that he's really able to to track all the mechanics. We need every every every digit on his hand tracked so that we can
Speaker 2:This might be the time an iPhone has been assembled by somebody wearing a a tailored suit as well.
Speaker 1:So we're breaking all sorts of records here. CEO Mark Zuckerberg has made AI AI Meta's top priority and said in January that the company would spend as much as $65,000,000,000 on related projects this year. Now, a lot of that a lot of that CapEx and a lot of that investment is going into things that are not directly foundation model training, of course. They have reality labs and VR efforts, and they also have a ton of recommendation algorithms that are running on on large data centers that they're scaling up. But, obviously, they're investing tons.
Speaker 1:The company's push would include an effort to make Lama the industry standard worldwide, Metas AI chatbot, which is already available on Facebook, Instagram, and WhatsApp, is used by 1,000,000,000 people per month. Wow. It's a lot. Scale co founded in 2016 by CEO Alexander Wang has been growing quickly. I believe it's a YC company too.
Speaker 1:The startup generated revenue of 600 and 870,000,000 last year and expect sales to more than double.
Speaker 10:Clearing order.
Speaker 1:2,000,000,000 in 2025.
Speaker 2:Let's go.
Speaker 1:Let's go. Scale plays a key role in making AI data available for companies because AI is only as good as the data that goes into it. Scale uses scads of contract workers to tidy up and tag images, text, and other data that can be used for AI training. Like, the original the original Scale AI business model was labeling and tagging images for self driving car companies. And then at a certain point, I think the self driving car companies stopped needing so much labeled data.
Speaker 1:And and and everyone was like, oh, Scalea is not is not that useful. Like, we don't need them anymore. And then the LLM boom came and the RLHF boom came and it was like, oh, wait. We need 10 times more scaling up And then the same thing is happening in robotics, and the same thing is happening in in reinforcement learning more broadly, and and a ton of different, you know, paradigms to move the AI ball down the ball down the field. Scale and Meta share an interest in defense tech.
Speaker 1:Last week, Meta announced a new partnership with defense contractor Andoril Industries to develop products for the US military, including an AI powered helmet with virtual and augmented reality features. Meta has also granted approval for US government agencies and defense truck contractors to use its AI models. I love DefenseLlama. It's great. The company's already partnered with scale in a program called DefenseLlama, a version of Meta's Meta's LAMA large language model intended for military use.
Speaker 1:Scale has increasingly been working with the US government to develop AI for defense purposes. Earlier this year, the startup said that we wanted to contract with the DOD to work on AI agent technology. The company called the contract a significant milestone in military advancement. So, I mean, Scalea is such a big company. They're they're doing a lot of different stuff at this point.
Speaker 1:And and and they're not just doing the business process outsourcing, the the data generation, but they're also doing stuff like they create evaluations. They have the humanities last exam, the benchmark for Mhmm. For AI stuff. And and then they're also fine tuning Lama and working with the DOD. And Alex is in is in DC barely often.
Speaker 1:Anyway, fantastic report from Bloomberg. Go subscribe. Give them give them some love.
Speaker 2:Give them some love. We have a post from Pliny the Liberator.
Speaker 1:Getting a little spicy with Apple.
Speaker 2:He says, I'm not reading a single AI research paper coming out of of that giant stale donut in Cupertino until Siri can do a little bit more than create calendar events on the try. Shots fired. Yes. Apple, they they released a research paper
Speaker 10:Yes.
Speaker 2:Last week called The Illusion of Thinking Yes. Understanding the Strengths and Limitations of Reasoning Models via the Lens of Problem Complexity. Mhmm. They basically said that reasoning models are fake and just pattern matching machines.
Speaker 1:Yes.
Speaker 2:And I I gotta defend technology here. Mhmm. I'm a bit of a pattern matching machine myself. I try to see patterns.
Speaker 1:I try
Speaker 2:to match them. Yeah. Not unlike a large, you know, reasoning model.
Speaker 1:Yeah. Yeah.
Speaker 2:Yeah. But anyways, I think this is sort of interesting timing. I'll wait to, you know, pass too much judgment until we see what they release today. But in some breaking news Yes. Apple just announced that they're basically mimicking the the Mac OS experience on iPad.
Speaker 2:Mhmm. So you can now have multiple Mhmm. Apps open at once, which which is interesting.
Speaker 1:So Very fun. What else is new in in WWC world? IPad OS. They launched new CarPlay and they demoed it on a Mustang. You'll have to see that.
Speaker 1:There we go. Very funny choice of car, but we love a Mustang.
Speaker 2:There we go. They're connecting with, you know, core America with that one.
Speaker 1:They know. People want gas
Speaker 2:Emily Emily Sundberg is on the ground at WWE Oh yeah. And she says, the tech guy in a hoodie stereotype is She's seeing You're welcome. Green serie sneakers. I'm actually not familiar. Japanese chore coats
Speaker 1:and
Speaker 2:a bunch of other items. Tech has pulled the world down to their dress code and now we've all met in the middle. Yeah. So Yeah. Emily will be on the show later this week.
Speaker 1:Yeah. AI research paper that they put out is kinda interesting. There's this there's this constant drumbeat of, like, moving the goalposts when when it's like, okay. So, you know, now these models can reason and produce, like, really, really thorough research reports, and they can definitely follow these patterns, and that's super valuable. But then people will move the goalposts and say, well, well, that doesn't count as thinking.
Speaker 1:Like, yes, we passed the Turing test, but it's not really thinking. It's not really human. And I understand that, and I think that there's something right about that, but also, like, it it all doesn't it doesn't really matter because at the end of the day, all that matters is, like, economic impact and, how valuable are are these things and how useful are they? At the same time
Speaker 2:Revenue as a benchmark.
Speaker 1:I I I think that's the only benchmark that matters. Yeah. And then and then on the flip side, there's this
Speaker 2:I think The only the only counter to that would be that a lot of useful AI features will be baked into iOS in the long run and won't have be directly
Speaker 1:Sure. Sure. Sure. Sure. Sure.
Speaker 1:Sure. So maybe you need to look at like user time or something. Yeah. And delight. There's a whole bunch of ways.
Speaker 1:But like the the fact of the matter is like like, is AI really thinking? Does it matter? Who cares really? Like, do we need do we need to discuss this? There's also this funny pattern.
Speaker 1:I I believe it was, like, either Naval or Wilmanitis or someone posted how, like, when when the steam engine was invented, there were all these papers saying, like, oh, the steam engine is just like the human brain. Then when, like, electricity is invented, was like, oh, like, the network of lights in a city is just like the human brain. Like, now we understand the brain. And and so there's this constant march of, like, we we created technology, and then we're like, oh, this is this is a perfect representation of of of how humans work. And maybe we keep missing things.
Speaker 1:But the question is like, we're clearly knocking down different patterns. Even just long term memory. Like, that has been solved by hard drives for a long time. We've been able to have databases and store lots of data and look up facts on the Internet. Like, that was something that was uniquely We solved it.
Speaker 1:It's great. It's not human, but it's great and helpful. And now we can and now we can do, you know, next token generation and prediction and predict the next word in a sentence, which is very helpful. And clearly, there's something in the human's mind that does that activity. But is it everything a human does?
Speaker 1:No.
Speaker 2:Based on training data.
Speaker 1:Yeah. Based on training data. And then and then reasoning is the same thing, following a playbook, working through a problem, planning. Like Yeah. That's clearly part of the human brain, but it's not the entire thing.
Speaker 1:But it's still really useful. And so
Speaker 5:Yeah.
Speaker 1:It's all good.
Speaker 2:Anyway More breaking news. Apple now adding your passport to the Wallet app that will be accepted at TSA for domestic flights.
Speaker 1:Okay.
Speaker 2:Which is, I guess, valuable. Yeah. Yeah. That's fine. They just sure locked Real ID.
Speaker 1:The government.
Speaker 2:This is this is a post of Really? Katie Noto Oh, Noto Polos. Noto Polos Yeah. From Business Insider. Yeah.
Speaker 2:So Yeah.
Speaker 1:It's funny. I got the I got the passport ID, the passport card. So you have the the paper passport, which people know for flying internationally. And then you have the real ID, the driver's license. And the and the passport card is something that you can order, and it lets you travel between US, Canada, or US, Mexico without bringing the full passport.
Speaker 1:And I was super excited. I was like, oh, this is great. If I'm going to Canada, I'll just bring this thing. One day, I was going to Canada. And Why
Speaker 2:were you going to Canada?
Speaker 1:I have no idea. I have no idea. But, anyway, I was going I was going to Canada. I was like, let me bring this passport card. This is great.
Speaker 1:As I show up, it says, only valid for for road and rail crossings. You can't fly
Speaker 2:with it. Crossings.
Speaker 1:Because it's basically, it's a product for like truck drivers that are driving back and all day long, and they don't wanna bring a separate passport. They just wanna throw an ID in their in their in their Yeah. In their wallets, in their Ridge wallets. And so
Speaker 2:Next to their ramp.
Speaker 1:Yeah. Next to their ramp cards. And so and so I was I was very disappointed with that product. But hopefully, is better. But I imagine that people will get over their skis and be like, I have my passport in my phone.
Speaker 1:Then they'll eventually try and fly fly internationally and they'll get caught and then have to send an Uber. I actually wound up sending an Uber to my house to getting on the phone with the guy and saying like, just break into my house and get my passport and bring it to me at the airport and it worked. Was a high trust environment.
Speaker 2:You could have just sent him to somewhere else. Yeah. Somebody that is gonna do There's
Speaker 1:be a giant Newfoundland dog there. He's friendly. Give him a pat.
Speaker 2:Then Yeah. And then Here's the code word.
Speaker 1:Here's the code word. Tell them good good boy.
Speaker 2:Make this sound. Yeah. And he'll let you pass.
Speaker 1:Yeah. I know. He really had like a massive dog at the back. Still do. Anyway, Vanta.
Speaker 1:Automate, automate compliance, manage risk, improve trust continuously. Vanta's Trust Management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your framework or managing a complex program.
Speaker 2:Get on there. Do it.
Speaker 1:Get on there. Do it right now. Data drop from Andrew Stein Horowitz, Olivia Moore has the data. Our team at a six c z published benchmarks on revenue growth for AI startups from their proprietary dataset. The median b to b AI company is going from 0 to $2,100,000 in ARR in year one, while the median b to c company is going from 0 to 4,200,000.0 ARR in year one.
Speaker 1:Yes. Consumer companies are growing revenue faster. It's pretty remarkable. Even the bottom quartile is doing pretty well. Everyone's making money now.
Speaker 1:It's just so much different than the .com boo. Like, they're, you know, obviously
Speaker 2:Wasn't it?
Speaker 1:Tons of froth and tests.
Speaker 4:What is
Speaker 1:still, these these are serious numbers. Know? You if you start a company within twelve months think consumer startups couple million bucks in revenue. And it's like, the costs are gonna be mostly overhead Yeah. And employees.
Speaker 1:Like, you're in a pretty
Speaker 2:tough Has there been a period where b to b categorically was growing much faster than consumer? Because I feel like with consumer sure, with b to b, you have these, you know, big contracts
Speaker 1:Yeah.
Speaker 2:Which can help grow revenue quickly, but there's also so much friction to get onboarded whereas consumers can just say Yeah. Yes. I will take this product for a $100, and you can do that thousands of times a day. Yeah. And so I feel like that part isn't necessarily new, but but still really impressive Yeah.
Speaker 2:I mean Benchmarks.
Speaker 1:Increasingly, there are so many ways to to get to a paid upgrade. There are more. It's not just that Stripe exists and that in app payments exist, and there's so many ways to make payments, taking payment frictionless on the Internet, which was not the case in 1999. But also just psychologically people I think because of ChatGPT being paid, x is has a paid tier. People pay for patreons, people pay for all sorts of stuff.
Speaker 1:Subscriptions for games, all sorts of different things for subscriptions now.
Speaker 2:Well, part of it is that AI Psychologically Even existing Gen AI experiences, even though they're new, are oftentimes so magical that people are totally happy to pay. Totally. Because the value is, you know, the Studio Ghibli app, if they were just monetizing that
Speaker 1:Oh, yeah.
Speaker 2:And they had it basically, people would have paid $100 a month for that. Would have churned immediately.
Speaker 1:Sure Facetune is doing like a billion dollars in revenue. Or like FaceApp, like one of those like face swapping like iOS apps because they just get you in, give you a free one, they know exactly how to monetize, ask you at the right time, you subscribe. Yeah. It's a fourteen day free trial and then it rolls over and you get charged $99 for the entire year. Like, they're very good at this stuff.
Speaker 1:It's very Nikita beer coated.
Speaker 2:Yep.
Speaker 1:Anyway, we have Casey Hanmer coming in the studio in the TBP and UltraDome in just a minute. I wanna read some of his posts He says, six sixteen hundred and forty days until China takes the moon. China wants the moon so bad, they can taste it. They obsess over it all day. They dream about it all night.
Speaker 1:They fear the consequences of failure viscerally. It's affecting their appetite. They work eighty, ninety, a hundred hours a week. The job isn't done until it's done. Casey says, the last page of our passport is a solemn promise that The USA will guarantee freedom as we lead humanity into an infinite and eternal universe in some desperate corners of the earth.
Speaker 1:Totalitarian dictatorships still stomp on the potential of a billion hearts, but the future belongs to freedom. So excited to bring him in and talk to him about that and also about solar energy and and and manufacturing in America and what's going on with Apple. So welcome to the studio, Casey. How are you doing?
Speaker 3:I'm I'm very well. Thanks. Thanks for having me.
Speaker 2:Great to have you.
Speaker 1:As always. What what triggered this initial tweet about sixteen hun sixteen hundred forty days until China takes the moon? I imagine that that's based on a specific mission that they have planned, but break that down because they've done stuff before. They've landed on the moon before with autonomous stuff. Like, why is this different?
Speaker 1:Why is this date so important?
Speaker 3:Yeah. China set a target of being on the moon officially by 2030 with people, Chinese taikonauts, obviously. Mhmm. And they have a a space program already. They have a space station had several space stations.
Speaker 3:They have the ability to fly humans into space and to recover them.
Speaker 1:Mhmm.
Speaker 3:And and, actually, the last news we got about a month ago was that they're looking into ways to accelerate that schedule into 2029. So I picked a date in late twenty twenty nine, and I thought that's sixteen hundred and forty days away. It's about it's about three and a half years or something from now. It's not that long. And one thing I can tell you for sure is that the Chinese space program managers fear the consequences of failure in a way that US space program managers have not felt or feared for many a decade.
Speaker 1:What is are are are we should we comping their efforts to NASA or SpaceX or both or some mix? What is the Chinese what what's the shape of the Chinese space program right now?
Speaker 3:Well, I mean, I don't I'm not an expert on the Chinese space program by any means, but it's it's obvious from from the way they work that they're dead serious about it. Yeah. They are in place behind SpaceX when it comes to launching stuff into space, and they haven't got reusability done yet. So they're they're producing significantly more cores. And then, of course, when they're done with them, they drop them on villages because they run things differently.
Speaker 3:Now, you know, I think that on this show, people will understand what I mean when I say the light wants to be free. The light cone is a place where where humanity needs to needs to expand and experience freedom. And the reality is that laws of physics don't guarantee that freedom will succeed. It helps us. Freedom helps us, perhaps.
Speaker 3:But the challenge we face, I think, is that NASA is the organization whose job it is to make sure that we don't get a 1958 Sputnik like surprise ever again. And and there are many, many smart people at NASA working hard on this, but their efforts are, you know, somewhat circumscribed and and challenged by kind of decades of accumulated craft and and and problems that are kind of causing major major major problems within the within the organization and and for The US space program as a whole. And I think SpaceX has done a really incredible job of upholding US interest in space. If it wasn't for SpaceX, we'd obviously be in a deep, dark hole by now. But it's a it's a lot to rest on the shoulders of just one company, and I think this has been reinforced in The United States just last few days with, you know, people realizing that actually, you know, the the place US based company or whatever is is an awful long way behind SpaceX.
Speaker 3:It's not for a lack of trying. SpaceX is probably the number one place on Earth for training rocket engineers, and and and nothing forces them to stay there. Many of them leave and start their own companies, and good for them. But there's still a long way behind.
Speaker 1:Yeah. What why is the moon so important in your opinion? There's arguments about security and defense and putting weapons in the moon. There's also resources. Like, what what are the top reasons why we should be going to the moon?
Speaker 1:I kinda just wanna go because it seems fun. Yeah. Seriously. My son seems excited about it. I wanna go with him one day.
Speaker 2:But aside from We need to figure out if it's made of cheese or
Speaker 1:We do. We do.
Speaker 3:Yeah. Well, I mean, I don't think it's really a secret that that the moon is the nicest place out of the earth and the moon. It's a little bit like Antarctica or something. It's not it's not a place that's got resources we really need. Yeah.
Speaker 3:What it what it represents is a is a symbol symbol of freedom. It's a place that that Neil Armstrong and Buzz Aldrin tried on back in 1969, and and, you know, we we came in peace for all mankind. You know? And I think that that you and I and and NASA and much of the Western world sees the moon the same way, and the Artemis Accords and the Sea Otter Space Treaty and so on. I don't think that the generals in Beijing see the moon quite the same way, you know.
Speaker 3:And I might not be quite as hawkish as as some of your other guests here, but it does not help me sleep well at night thinking that if the Chinese have a have a durable and defendable presence on the moon with humans running around there and The United States does not, at some point, they could say, well, you know, this outer space treaty is a nice idea, but no one who is alive had anything to do with writing it. And at the end of the day, have nuclear weapons, and this is ours.
Speaker 1:Mhmm.
Speaker 3:And then what do you say? Right? Like, then they basically planted the flag and said, no. The the future of the light cone is going to be communism with Chinese characteristics forever.
Speaker 1:Mhmm.
Speaker 3:And that's that's not a situation. It's not a future I want. It's not a future, you know, it's not a future or a situation that my children can can live up to or participate in. It's not a future that's open to them. They can Yeah.
Speaker 3:They can, you know, hug their stuffy, you know, rocket to to sleep every night, dreaming of a future where they get to explore the universe, but it's just not one that that will be protected despite the fact that that we spend in The United States $20,000,000,000 a year on NASA and and a whole bunch more on other space programs that are less publicized, which is, you know, just NASA's budget is twice the Manhattan Project's budget in in an inflation adjusted dollars. It's not it's not a small amount of money. And yet, where's my moon base?
Speaker 2:Yeah. Where's our moon base? I hope the the the Chinese are are, you know, taking the proper steps to get Solana's permission
Speaker 1:to go to
Speaker 2:the moon considering
Speaker 1:They gotta go through Mike But for sure.
Speaker 2:They gotta go through Mike Solana. You got it. What do you hope to see from the, next NASA administrator now that Isaac Mann is out, which obviously a lot of people in our corner of the Internet were very disappointed by. But, I'm curious where where what you would like to see, from them.
Speaker 3:Yeah. So, obviously, NASA administrator serves at the pleasure of the president, and that's his prerogative to to decide, you know, who wants to to serve there. NASA administrators, a super tough job, might be the toughest job in government, because, you know, you have to balance this impossible set of requirements. And now we've got this this budget process that's going on, and and there's no NASA administrator in the chair to be part of that conversation, to be advocating on behalf of of, you know, which things are, you know, perhaps technically sensible or less sensible for reasons that congresspeople cannot be expected to understand or or even take an interest in. You know?
Speaker 3:It's very, very esoteric and strange stuff. And so you end up in a situation wherein three months or six months or eighteen months or so, when a new NASA administrator will be sitting in the chair with a budget they didn't have anything to do with a bunch of programs that were designed by people for reasons that are, you know, long past their expiry date and and have to make the best of what they can do. And in the meantime, it is one thousand six hundred and thirty nine days until China takes the moon. And this is a major major challenge. You know?
Speaker 3:I think it'll it's ultimately reflected extremely poorly on the Biden administration that they, that they put senator administrator Bill Nelson in there, and he was unable to, help NASA respond to the essential challenges that face it. His his intentions, no doubt, were fine, but his his actions and the results of his his work were, mixed at the best. And and I don't think that Trump or anyone who supports him would want a situation like that for NASA looking ahead in four years. And if if if China's on the moon in 2029, that'll be in the same year that that Trump leaves the White House. So that's that's a very daunting challenge.
Speaker 3:You know, this this is really a little bit like sputnik all over again, that that we have a situation that that really challenges to our core. You know? And, course, Jarrod Jarrod's a unique individual. He really you know, he he did he was not under any, you know, confusion there. He knew that going into NASA was a was a horrible job.
Speaker 3:Right. Like, literally, his job there is to upset a lot of people and get a bunch of programs that are in deep, deep trouble turned around quickly. And it's going to involve, you know, a lot of people losing their jobs or getting new jobs or being moved or relocated, all kinds of stuff, just nasty stuff. And the the bureaucracy that's entrenched there does not like to change. And I know people who have worked there.
Speaker 3:I know people who have tried to change things and who have been rewarded for their efforts with constant harassment and even, you know, legal and extra legal kind of problems and so on in their lives, constant investigations and and all kinds of stuff. Right? It's just it's an absolute hornet's nest in many ways. And Jared knew that, and he stepped up because he recognized The United States had given him everything, and he wanted to give back. Now, you know, I don't want to prejudice whoever else steps up.
Speaker 3:I mean, ultimately, someone's going have to take the job, and I wish them the best, and I'll help them in any way I can. But it is a tough, tough job, and and I think that, frankly, the number of people out there who have the skills to do something useful with NASA and really turn it around and fix the problems that we've got here and the inclination to actually to try and to to basically blow up their entire life for the rest of their life because that's what's gonna result no matter how well you succeed is a very, very small number. Mhmm. It's a real challenge. You have to wonder why is it that in a country of 340,000,000 people, we only really have a handful that could possibly go in there and and and solve these problems right now.
Speaker 3:And if we don't, China will take our future.
Speaker 1:Yeah. Talk to me about power generation on the moon and kind of like the build out if we actually wind up getting there and and and building like the launch capabilities to get up and back. What does the industrialization process of the moon looks like look like? I know we're gonna have to figure out a lot on the on the fly, but
Speaker 2:Yeah. I looked at a company that that their it was probably a year and a half ago. Their pitch was we're gonna build a Chevron on the moon. Okay. Super super bright team that had actually run some pretty meaningful experiments.
Speaker 2:Couldn't quite get there from an investment standpoint. Because I was like Yeah. Everything's so great. Many things that need to happen. Right?
Speaker 2:I really hope they're, you know, successful. But, yeah, break break it down for us.
Speaker 3:Well, I think step one is is just establish the ability to move stuff to and from the moon. Right? And once we have that, then we have the operational freedom to build a base of any size we want there. Right? And that's a that's a question for future voters and future presidents, I think.
Speaker 3:Sure. But ultimately, I'd be quite happy to see something there that's bit like the Antarctic program. It could even be run by the NSF. Right? NASA could be responsible for for setting it up and developing the infrastructure, NSF could run it like the Antarctic program.
Speaker 3:We send scientists up there because they'll go there voluntarily. You know, it's it's ultimately there for strategic reasons. And you could have a 100 people or a thousand people, and and you could fly, you know, tracking knots for, a flight like, cosmonauts, fly fly Indian astronauts, fly astronauts from Japan and The EU and Australia and everyone else, and they get to go up there, and they work in US moon base run by funded by The United States Mhmm. Built by, you know, American Sweat and American Brilliance companies.
Speaker 1:Much like the ISS. Right?
Speaker 3:A little bit like the ISS, but maybe with a little bit more kind of down to earth in a way, like actually dealing with rocks and and doing real science and stuff like that. Yeah. In terms of energy on the moon, there is one one way of getting energy on the moon that won't cost $10,000,000,000 to develop, and that's to set up large scale microwave beaming plants on the surface of the earth and beam the power up there.
Speaker 2:Oh, really?
Speaker 3:Yeah. The moon the moon always faces the same face towards the earth. So so once you've got your your rectangle panel up there set up, it it will always receive the power Mhmm. Provided the power is contingent from Earth. And, course, you could try and send up to kind of some kind of nuclear power station or something, but nuclear power plants are extremely expensive to build even on the Earth, let alone on the moon.
Speaker 3:So I think if you just wanna get power there quickly, the best way to do it is just to beam it up.
Speaker 1:What about just throwing out a ton of solar panels? That feels like that that was what I was teeing you up for.
Speaker 3:Yeah. Yeah. That's what I was teed up for. Solar panels are great on the Earth because, you know, where people live, you never have a night that's longer than about sixteen hours.
Speaker 2:Sure.
Speaker 3:And for for the vast majority of the world's population. But on the moon, even in the in the parts of the South Pole, which are, you know, ostensibly peaks of eternal light, you can still have, you know, pitch darkness for five or six days at a time
Speaker 1:Wow.
Speaker 3:In winter, which is Okay. Basically means, like, if you're flying your entire power system up from the Earth, which Yeah. Ultimately, would have to, like, 9.9% of it by by mass has to be batteries. Interesting. An interesting question.
Speaker 3:You might be better off just flying. You have a Starship with a bunch of spare fuel and a and a gas turbine generator.
Speaker 1:About what about solar panel on one side of the moon, solar panel on the direct opposite side of the moon, really long extension cord?
Speaker 3:A very long extension cord. Very hard. I don't wanna bore your I don't wanna bore your your readers with discussion of Passion's Law, but
Speaker 1:Okay. That doesn't work.
Speaker 3:When you when you you run run the numbers, it it's no it's no cheaper.
Speaker 1:Oh, that's appreciated. Okay. So, yeah, give me the broad Terraform update. How are things going? And how many solar panels do you have?
Speaker 1:Where are we in the rollout of of solar power dominance across across America?
Speaker 3:Well, that's two separate questions. So at Terraform, we're going great. We're integrating our Mark one system, you know, over the summer right now. Mhmm. It's a it's a machine that's designed to produce limitless quantities of carbon neutral, cheap synthetic natural gas from sunlight and air.
Speaker 3:You literally roll up a roll out a solar panel, and anyone's back out and and, hey, presto, you're on top of an oil well. It's a very neat trick. Really privileged to get to run this with my my friends here and with the confidence of our investors. Mhmm. In terms of solar more generally, look, the outcome is not in doubt.
Speaker 3:I think Jesse Pelton's been doing a great job on X recently.
Speaker 2:I've seen him.
Speaker 3:Yeah. Yeah. Talk talking about solar. Yeah. Look, at the end of the day, and this is actually another thing where I really hope that that Trump and and his team come in and and help solve a problem that was of almost caused accidentally and hasn't been fixed since, which is that just by default, deploying solar arrays is unnecessarily complicated and expensive in The United States.
Speaker 3:And really, if we're when we are in a in a geopolitical kind of struggle right now to see who gets the cheapest energy fastest, and China is far ahead of us, They're able to produce finished parts for less than the cost of raw materials in The United States. It helps that we're much richer than they are in China. But at the same time, the technology is the same. The sun signs shines the same actually, shines better shines better here.
Speaker 1:Why is it so difficult to roll out solar panels? It feels much easier than, oh, I don't want a nuclear power plant in my backyard. The windmill is gonna chop up the birds. There's, like, so many obvious Yeah. Problems with the other
Speaker 3:It's environmentalist. It's environmentalist. Understandably. You know, like, at the end of the day, having the the the power to say no is is addictive for it. Say no.
Speaker 3:Not in my backyard. Even if it's just a solar panel, it's making your power cheaper. But, actually, the the best land for solar in The United States is so hot that no one wanted to live there. The United States government couldn't give it away.
Speaker 1:You're talking about Death Valley, basically.
Speaker 3:I'm talking about, like, 90% of Nevada is still federal land.
Speaker 11:Sure. Sure.
Speaker 1:Sure.
Speaker 3:And so if you wanna do if you wanna do work there Yeah. You have to kind of do it according to Fed's rules, which includes NEPA, which includes, like you have to do, like, four year environmental impact statements that run to tens of thousands of pages to prove that, like, putting a solar panel out on a bunch of economically, like, worthless and biologically lifeless dirt won't harm the environment. At the same time as we're subsidizing, like, 50,000,000 acres of incredibly intense bioethanol corn production. It doesn't really make a whole lot of sense.
Speaker 1:No.
Speaker 3:So I'm not I'm not asking for that to go away. What I'm asking is, like, can we get a categorical exemption for solar deployment with, you know, maybe some like, you you can put put some money in in escrow account to, like, take it down in thirty years if you decide you wanna go back to being, like, empty desert. And that would help a lot because then you wouldn't have to spend, you know like, it's this is the insane thing. It costs about just just the modules itself, the fancy part that turns sunlight into power
Speaker 1:Yeah.
Speaker 3:Costs about 15¢ a watt, the cost of installing it in The United States is about a dollar a watt. So it's seven times the price of the unobtainium
Speaker 1:Wow.
Speaker 3:To import from China or whatever Unobtainium. To install it, which is insane. Right? Like, you were
Speaker 1:if you're
Speaker 3:talking about the same economics to a corn farmer or something, it'd be like, you are spending how many hundreds of thousands of dollars per acre to install something? Like, how much does it cost to to to sow corn? Like Yeah. Like, $20 an acre? Like, almost nothing.
Speaker 1:That's wild. Talk to me about the supply chain. We hear a lot about the vast majority of solar panels being made in China. Is that a risk? Has it become a political football like everything else, like the electric vehicle batteries, etcetera?
Speaker 1:Yeah. Some companies, Apple, Tesla, they've kind of figured it out mostly, gotten around a lot of the tariffs. But what are you seeing in terms of the long term supply chain dynamics in solar?
Speaker 3:Yeah. I mean, I think at the end of the day, there'll be countries that make their own solar and countries that don't, which won't really be countries. Right? If you have energy sovereignty, you have sovereignty, and if you don't, you don't. Mhmm.
Speaker 3:And I think it's very encouraging to see both under you know, even before the Biden administration, there's strong movements under the Trump one to tariff Chinese solar panels and start the scale up of solar manufacturing in The United States, and we're seeing, like, more than a terawatt coming online in the coming years. That's great. At the same time, China is producing solar panels cheaper than anyone has ever even thought possible Mhmm. And they're trying to dump them on our markets. And my response to that is someone if someone is predatorily dumping stuff on you, you should buy as much as you can because we can outbid the Chinese solar producers.
Speaker 3:Yeah. And we can just stack the solar panels up in a giant warehouse in Nevada and until we get around to deploying them. But if your enemy is literally trying to give you a machine that prints out money, which is what a solar module is, you should just buy as many of them as you can Oh, I bet. And deploy them. And and, sure, you can you can prop up The US solar industry however you want.
Speaker 3:It's it's good to have solar from all the world's factories coming here in The United States to make energy as cheap as possible here we can make as many things as possible here. So we can we can do all the, you know, aluminum steels producing onshore. We can make as much fresh water as possible. We can terraform Nevada. Right?
Speaker 3:The parts that we don't put under solar panels, can turn into something like Switzerland if we want to. Mhmm. All this is extremely achievable with cheap solar power.
Speaker 2:Like the sound of that.
Speaker 1:Yeah. Can you talk a little bit more about what it actually takes to produce a solar panel in America? It doesn't it doesn't seem as complicated as building an iPhone potentially, but maybe it is. It's
Speaker 11:much simpler.
Speaker 2:I don't think iPhones are are even that complicated. We have
Speaker 1:our intern here.
Speaker 2:Don't know
Speaker 1:if he can in America.
Speaker 2:He's making the USA made iPhone, this morning.
Speaker 1:That's that's it, Tyler. How's it going, Tyler? Give us the update.
Speaker 5:Guys, I'm I'm now attaching the volume buttons. Got the front on. I've got the home button on. Okay. I'm feeling really good right now.
Speaker 1:Feeling really good. Great. Okay. We're making progress. Awesome.
Speaker 1:To be clear, once you've
Speaker 3:once you're done with that assembly, TPP and intern, you need to go back to starting with and then make the iPhone from rocks. I've got rocks in my backyard, so I'll give you some rocks. I'll mail it
Speaker 2:to you.
Speaker 3:Okay. And then you turn that into an iPhone.
Speaker 2:That's basically That's the next that's level two. Next level two.
Speaker 3:Yeah. So some modules start you start with a solar cell, and then you laminate it between some glass with aluminum extrusion around the outside. I mean, that's easy. We have factories that do that, you know, practically every state in this country right
Speaker 1:now.
Speaker 3:Anything's the hard part, it's it's actually making the metallurgical grade silicon. It's kind of an energy intensive refining process
Speaker 2:Mhmm.
Speaker 3:That you can make the the cells themselves out of. But even that is like it's a well understood process. People have been doing it for years and years and years. Mhmm. The real challenge is like it's like the same thing I wrote in that tweet about, like, China goes to sleep dreaming about the moon, they wake up angry about the fact they're not on the moon.
Speaker 3:Mhmm. And, like, it's pretty clear that the NASA managers who are running the moon program are not obsessing over it in quite the same way because if they were, we would have a moon base by now. And it's the same problem here, that, like, The United States domestic solar industry is not yet at the point where, like, they can taste eight cents a watt solar modules, and they're desperate to produce them. Right? There's not that competition.
Speaker 3:In China, there's 20 or 30 different companies. Like, ironically, capitalism is working in China to produce the cheapest solar panels ever. And we could there's no reason we can't do that in The States. Right? We're world experts at automation.
Speaker 3:We're world experts at at capital formation. We're world experts at building factories. Look at what Tesla's doing. Tesla's outproducing Starlink. And less
Speaker 1:factory feels like very adjacent. Yeah.
Speaker 2:The Starlink Yeah. The white the white pill is that there's
Speaker 3:is way more complicated than a solar one.
Speaker 1:It has
Speaker 3:to be. Completely automated.
Speaker 1:Yeah. It has
Speaker 2:to be. Yeah. The the white pill for American manufacturing is that thousands of people are learning how Tesla does it Yeah. How Starlink does it, etcetera. It's And we'll eventually go and decide, hey, maybe I should start a factory to make this thing.
Speaker 1:Right? Anyway, thank you so much for joining, Casey.
Speaker 3:On the fence. Yeah. That's it on fence. Build a factory.
Speaker 1:Build a factory. You heard it here Do it. Thank you so much for joining. We will talk to you soon, Casey. Great.
Speaker 2:Have a great rest Have a good one.
Speaker 1:And the white pill on sales tax automation. Of course, it's numeralhq.com. Spend less than five minutes on sales tax compliance benchmark series a. Anyway, next up, we have Patrick McGee, the author of Apple in China, a groundbreaking book on Apple supply chain. Very excited to have him in the studio.
Speaker 1:Welcome to the show, Patrick. How are you doing?
Speaker 6:I'm doing great, but I haven't watched WWDC, so I hope you don't have any questions about that.
Speaker 2:No questions
Speaker 1:about
Speaker 2:No questions the the timeline is not loving it. I have a post here. Why does Apple have a whole conference just to show everyone they slightly adjusted the colors on a few icons?
Speaker 1:Oh, no.
Speaker 2:So, that is, a little bit dramatic.
Speaker 1:But But in other news, we have our intern here in the studio assembling an iPhone from scratch. Not really from scratch, but I don't know if you can see, but he's he's getting it together. He's assembling the iPhone in America. And so, I think that's that's more of our focus today. Oh, God.
Speaker 6:I said iPhone manufacturing would never happen in America. Think This is
Speaker 2:the American made device. American made iPhone. You're witnessing history. He's starting it's a four s. So we didn't we couldn't go all the way to, you know, whatever the '16 or the '17 whatever we're on now.
Speaker 2:Yeah. But we had to start somewhere. So Yeah.
Speaker 1:But but anyway, thank you so much for joining. Would you mind introducing yourself in the book and kind of, like, what led you to want to dig into this so much? Because I know you you interviewed, like, hundreds of people for this. It was obviously a massive project. Take me through the the journey to actually start investigating this story.
Speaker 6:So, yeah, Steve Jobs would sometimes say you can't understand your life until you connect the dots backwards. Right? It'd be a real trick if we could know where the meaning was going forwards. That would improve things. Yeah.
Speaker 6:So I've spent twelve years at the Financial Times, and it was basically like three years in Hong Kong where I was getting to know China, three years in Germany where I was covering the automotive industry, but in retrospect, really understanding supply chains and manufacturing Mhmm. Industrial policy to some degree, and then four years covering Apple. So you sort of put those three things together and really get my book. The three years of covering Apple, I did what most Apple reporters do, which is that I I didn't focus at all on how the sausage gets made as it were. I focused on product features.
Speaker 6:I focused on the rise of digital advertising and Apple's privacy policies. I mean, I think I had some decent stories, but it didn't really occur to me to look at what we all know, which is that the products are made in China. Mhmm. And the real, like, discovery that I made, if you will, is that we had never covered a job within Apple called manufacturing design engineer. And these are the people who go to over to China literally by the plane load to train, audit, supervisor, and mount billions of dollars worth of machinery in the aggregate in hundreds of factories across China.
Speaker 6:So I wasn't really familiar with, like, what makes Apple most unique in hardware, which is that they don't sit around hoping that component makers in their supply chain come up with more durable materials, cheaper materials, lighter materials, etcetera. They go and they train all of the people to come up with those innovations. So it's it's it's co invention process, really. But the amount of people they've trained and the amount of money they've invested in China to make all that happen was staggering to such a degree that I compare it in a way that sounds unhinged if you haven't sort of read the 200 preceding pages in the book to the Marshall Plan.
Speaker 1:Yeah. Can you can you give us more on the exact scale of the investment and how you actually pulled those numbers? Are they available in SEC reports, or did you have to do some digging to actually piece everything together to actually get the full scope of the scale of what's happening?
Speaker 6:Yeah. So the line I have on this is that when Tim Cook goes to Zhongnang Hai, the citadel of communist power, and invests or rather pledges to invest $275,000,000,000 into Chinese factories over the next five years, if he were to hold a press release, a press conference, I should say, from Zhang Yunghai, that would have been corporate suicide. This was when Donald Trump was campaigning on America platform. And so
Speaker 2:So was that 2016?
Speaker 6:'16. Yeah. And so basically what happens is that when Xi Jinping comes into power, particularly when he becomes president in March 2013, Apple fears that its products are going to be blacklisted because there is a three week digital blitzkrieg against the company where all sorts of state media are threatening the company, and even regulators are saying threatening things to Apple. And Apple basically doesn't understand. They're in a state of confusion.
Speaker 6:There's not a single senior person living in the country, and there never has been at the time. And Apple responds by basically hiring or naming a team of people that call themselves the gang of eight, and they are to be Cupertino's eyes and ears on the ground. Essentially, they are tasked with coming up with a way to placate local and federal officials in China without resorting to joint ventures because that is anathema to Cupertino. A joint venture is like if the three of us wanted to go make a company in China, 50% of it traditionally needs to be Chinese owned. That's supposed to be illegal after 2001 when China enters the World Trade Organization, but it really just evolves rather than is prohibited.
Speaker 6:And so Apple has been operating under the radar to such a degree that even though by 02/2012, they are the largest producer in China without actually, you know, producing anything themselves, you could sort of compare it to Uber in that respect. They're they're also the largest retail seller in the country among foreign countries foreign companies. And so they're wildly successful, but they're operating so secretively that the Beijing leadership doesn't understand what contributions they are making. And so Apple does its own supply chain study to sort of flip this on its head, and what they realize is that they're investing $55,000,000,000 a year into the country. And so they sort of take this to Zhongnang Hai to basically, like, say, get off of our back.
Speaker 6:You have no idea how much we're contributing to your companies. And if I'm just to round this out, I would say if we fast forward to today, 55% market share in global smartphones is the Chinese manufacturers like Huawei and Oppo and Vivo and so so And the reason they're so good is that Apple trained all of their suppliers.
Speaker 1:Yes. I remember you making this point about how Apple is essentially like the reason that Oppo and Huawei exist because they trained all of the manufacturing houses to build competitors to iPhones essentially. And you made the point that Apple didn't kill Nokia with necessarily like product innovation in The United States. It was the manufacturing and the birth of the Chinese manufacturing supply chain that was taken advantage of by Huawei and Oppo and the other Chinese phone companies. But is there a reason why Nokia wasn't able to go to China and say, hey, we're gonna piggyback on the same supply chain.
Speaker 1:We're okay being a year behind on the lagging edge. Did you ever dig into the exact dynamics by that? Was that just a blunder by Nokia team? Because it seems like if you see this rising manufacturing powerhouse, you might wanna go and take advantage of it. If Apple's doing paper
Speaker 6:all the and Microsoft with the Windows phone. Right?
Speaker 1:Totally. Totally.
Speaker 6:The trouble is going to China is not the secret. If you've watched the BlackBerry movie, in fact, this is the final scene where they do have the BlackBerry storm, I think, just made in China.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 6:It's a really simplistic way of thinking about it because it's not just that China has the skills and capabilities of pulling this off. It's that Apple has this pyramid structure in the company where Johnny Ive and the design studio called ID were given like a godlike power to come up with unfathomably intricate and difficult designs. And then the manufacturing engineers basically had to go make it happen. Mhmm. Nobody had the skills to go make it happen.
Speaker 6:And so, like, the line that I got from one of these manufacturing design engineers is that the perfect attitude was to say to Johnny Ive, I have no fucking idea how to build this, but I'm gonna, like, move heaven and earth to go figure out how to do it. And nobody but the Chinese were willing to sort of put in the investments, the tailor made industrial policies, build factories on a scale that was needed to build iPhones the volumes that Apple needed. So so
Speaker 2:China just emerges as
Speaker 6:the perfect answer to Apple.
Speaker 2:Mhmm. Before we get more into into what happens next, can you talk about some of Apple's early experiments? I know they were trying to do stuff in California, Czech Republic. Yeah. It sounds like they didn't
Speaker 6:I know. And yeah. So so, yeah, there's this seven year narrative, and it sounds long, but I trust me. It's fast paced, it sort of, you know, crosses continents where Apple doesn't just sort of, like, you know, abandon making its own computers. Right?
Speaker 6:Because they used to make them on three continents and turn to China. That's a seven year experimentation stage where the translucent iMac alone was built by LG in Korea, and then they expanded to building them in Mexico and in Wales. It's a great strategy. Unfortunately, it's actually a fiasco. The Mexico factory is literally on fire for about a month, and so production is halted.
Speaker 6:And the production line in Wales was known as the toaster line for the propensity of the circuit boards to catch fire. So they have all these other problems that just, like, make China begin to look better. What happens is Foxconn comes on board. So the my line about this is that Johnny Ive and Steve Jobs, the meeting of their minds is what makes Apple products unique, but it's the meeting of the minds between Terry Guo, founder of Foxconn, and Tim Cook that makes Apple products ubiquitous. So when Foxconn comes on board, this is a Taiwanese company that's crew
Speaker 2:Yeah. And I and I was gonna and I was gonna say, did they feel more comfortable partnering with Taiwan? Like So they've been with Taiwan. In the
Speaker 6:five years of Steve Jobs has come back, Taiwan is the most important country. It's where a lot of the products are being made, namely the iPod, but also the PowerBooks and the iBook. If you remember Reese Witherspoon in her little bunny ears in in Legally Blinds, you know, lining up to buy a computer, she definitely buys the little bright orange computer. I mean, Apple is redefining aesthetics, not just of computers, but later of m p three players and later, of course, of smartphones. And so, you know, I like to joke with people, like, what's your favorite Dell computer from the early two thousands?
Speaker 6:Right? Because nobody has anything. You can't even remember any of them. Nobody was doing the sort of thing that Johnny Ive was doing. But what we've forgotten and what my narrative sort of fills is just like to have that maniacal obsessiveness in design is one thing, and that's where a lot of the stories are.
Speaker 6:But to actually build those in the tens of millions per year and later the hundreds of billions per year, like, clearly, there's a story there. Right? And it's weird that we've omitted it. But to build that quality, that quantity, and that cost, China just emerges as the perfect partner. So it's the combination of Cupertino's skill and China's scale that makes for the perfect marriage.
Speaker 1:Yeah. What's the stat on the Tim Cook era? It's something like 20% of smartphone sales, but 80% of profits, something like that.
Speaker 6:Isn't that insane? And, you know, I'm only giving like a figure for 02/2016, but it's actually increased since then. So the market share for the iPhone has never gone above 20%. Yeah. But these days they reap 85% of industry profits.
Speaker 6:Wow. That is just insane. I mean, find me another sector that comes anywhere close
Speaker 1:to that. It's it's remarkable.
Speaker 2:Yeah. Give it up for big tech profits.
Speaker 1:Yeah. How much yeah. How much of what you're seeing today with there's some criticism of Apple for kind of faltering on the AI side, on the product side. Maybe the iPhone's gotten a little bit stale with
Speaker 2:It's to clear, Mark Gurman just said they didn't really announce any new AI features.
Speaker 1:Yeah. Which surprised at same while people have been going after Apple for the lack of product innovation, lack of software innovation, it feels like in this particular moment, Tim Cook is the perfect CEO for Apple in the sense that they are facing immense geopolitical challenges. The supply chain is more complicated than ever, and Tim Cook seems to be a fantastic leader in terms of the execution of that strategy. And so we're in this weird I understand that there's a weird dynamic, but it feels like in terms of the challenges that Apple the the the size of the challenges, they could miss on AI. But if they're able to scale up to a billion iPhones a year, they win.
Speaker 6:Hard disagree. Okay. Break it down. I understand the point that you're making and Tim Cook has provided immense value to Apple, but I do think it's sort of a time's up moment. The reason I say that is Apple is so wedded to China that it has basically become an existential risk to the company.
Speaker 6:I'm not saying therefore the company's going to downfall Yeah. Or or, you know but but if something like their export license from China was canceled, it's not like, oh, well, thank god we have 25% of iPhones now being made in India. None of those phones are independently made in India. They're all reliant on the China centric supply chain. Yeah.
Speaker 6:And if Apple's gonna come out of it, I mean, basically, if you agree that that's an untenable situation, it's a fifteen year effort if it can happen at all, and you can't have the guy who created the current strategy leading the company if that's
Speaker 3:the goal.
Speaker 6:Yeah. So I would just question that he's the right person, and that's just on the supply chain side. That's on the operations side. That's his his wheelhouse, if you will. The AI strategy is probably just as fundamental in the sense that we're now at a stage where people's next phones could very well be based on what AI features they have.
Speaker 6:And Siri, to quote Satya Nadella, is dumb as a rock. Mhmm. And they're basically not even allowing you to have ChatGPT replace Siri. I mean, Siri ChatGPT is not allowed to go through my emails, not allowed to go through my photos, etcetera. It could probably work wonders if it could, but Apple, for privacy reasons that may or may not be genuine Privacy reasons.
Speaker 6:Do that. And when you get into China, ChatGPT is not allowed in China. Yeah. And so AI is really taking off with the likes of Baidu and Alibaba and DeepSeek, of course.
Speaker 1:Yes.
Speaker 6:But Apple's gonna be put in this strange position where, you know, my book is about how they've trained up their hardware engineers in China over the last twenty five years. Is the next twenty five years the story of how Apple's training up the AI developments in China? I mean, for starters, I don't know that they're a great teacher just given that their own Siri product and AI isn't all that good, but that strikes me as an untenable position for them to be in. And so AI is like another, maybe not existential risk, but certainly a large risk for Apple that they certainly are flailing. And if the buck stops somewhere, it's with Tim Cook.
Speaker 6:So I would say there's two reasons that that you'd call for new leadership right now.
Speaker 1:So talk about getting out of China, building up manufacturing capacity in India, Vietnam, America, anywhere else. Tim Cook has done it once in China. He's not he doesn't have any unique tie to China. He's not Chinese. He just went over there, figured it out, built it up.
Speaker 1:It took immense time and investment. He's done it once. Can he do it again in a different country? Is that possible?
Speaker 6:So you sometimes hear that within Apple, and I would say that it reeks of hubris. In other words, China was a once in a century partner in terms of the tailor made policies, in terms of literally having hundreds
Speaker 2:of Demographics.
Speaker 6:People go from the migrant labor pools and into cities like San Shenzhen and Suzhou to make all this happen. So it's not that China was just some blank slate with a lot of people and you could get it working. It's not just the density of the population. It's the dynamism of the population and the way that they're willing to work and the sort of bonded zones that China has. I mean, there's so many reasons why none of this is gonna happen in America because even on a philosophical basis, we wouldn't wanna replicate things like the dual class structure of citizenship that you have in China, where if you're rural, you really can live in Shenzhen, but you can't raise your kids there.
Speaker 6:You can't get the social benefits. You certainly can't retire there. You know, philosophically, we don't want to replicate that. Mhmm. Whether India has to go that far if they're going to do so, I don't know.
Speaker 6:But they at least are a country of 1,500,000,000 people. They have wages that are similar to the early two thousands in China, and they do have major policies of wanting to become a manufacturing powerhouse. I don't think they're doing enough, but it's not just a matter of Tim Cook sort of cop copying and pasting the strategy into a new area that doesn't take into account just how different India and China are.
Speaker 1:Can you can you tell us more about that difference, India's democracy, but there's a lot of, lack of infrastructure I've heard flagged as just like, there's not enough scale at the ports. There's not enough industrial manufacturing equipment in the in the country. Same thing with Vietnam, although it's it does feel like Apple's maybe had a little bit more luck with AirPods in Vietnam, but I don't know if there's more color to that, and it might be more of one of those, like, final assembly things that we've been hearing.
Speaker 6:On the whole, I would say more is actually happening in Vietnam than people give credit for
Speaker 1:Mhmm.
Speaker 6:And less is happening to in India than than people think. The problem with Vietnam is you just hit constraints. Right? I mean, the population in in Vietnam is literally 1 out of China. So So it is never going to rival China in a way that India could.
Speaker 6:India just doesn't have the skill. I don't know that they have the drive. They don't have the same Nietzschean will to power. The epigraph of my book is from a made in China 2025 document from ten years ago, which which says without manufacturing, there is no country, there is no nation. No other country, let alone India, thinks of manufacturing in that way, but China does.
Speaker 6:So it's really difficult for India to compete. And even though they have a lot of people, they don't have the same migratory pattern. So I studied a study that looked at maybe 80, maybe 84 countries of internal migration, and India was at the end of the list. So you don't have this culture, especially of young women, 17, 18 years old, leaving their parents' homes and going to work in a factory in Karnataka as, an equivalent of Shenzhen. Now maybe you don't need to replicate every facet of how China pulled this off over the last twenty five years, but it's not as though I look at India and see a bunch qualities that would help them in manufacturing that China doesn't have.
Speaker 6:It's sort of one way that the advantages that China has. And as the world moves into automation, it's a little disconcerting that I believe I'm accurate in saying China has more industrial robots than the rest of the world combined. And they certainly have more than an order of magnitude more than in India.
Speaker 2:A lot of the issues around moving Apple's manufacturing around the globe today come down to demographics like you're outlining and just cultural differences. How does Apple's leadership think about automation? Because if Tim Cook is willing to invest 50 to hundreds of billions of dollars a year in a country, couldn't isn't there a world in the future where Apple's investing $100,000,000,000 into American iPhone manufacturing that's end to end automated? I know that's extremely difficult Yeah.
Speaker 1:Gets around the cultural issue.
Speaker 2:But it gets around the cultural issues it just becomes a capital formation issue. And
Speaker 1:The stat that we were toying with was that, I think over the last decade, Apple has returned almost a trillion dollars to shareholders via dividends. Yeah. And so that's enough money to do really, really big mega projects. The question is, it just that's not even that's not enough money, no amount of money can get you there? Or is there some other factor
Speaker 2:that's Yeah, because I think when people say like, oh, it's impossible to automate iPhone production, I don't think that the average person genuinely believes that in the fullness of the next twenty years, there's no way an iPhone could base you could put the parts in one side of a factory and a finished iPhone would come out the other side.
Speaker 6:So let me say two things. One, I'm totally in favor of stiffing shareholders and cutting the buyback program in half and spending the other $50,000,000,000 a year on building resiliency into the supply chain. So I'm not exactly sure that's what you're suggesting, but but I would advocate that. Secondly, even if, let's just say, artificial intelligence on steroids is able to upend the way things are manufactured and you don't need 400,000 people in Zhengzhou to do it, nevertheless, China has, unfortunately, a number of advantages in terms of the refining and the mining of the metals. Even if the metals are being Yeah.
Speaker 6:Mined in Africa, it's Chinese companies that are orchestrating all of these processes. So even in a state where, it is, as you say, the sort of lights out factory where you throw in the components and then iPhones come out, that's probably still more likely to happen in China in China than America because they're the ones who have all the expertise sort of end to end in the supply chain. And then, you know, shipping an iPhone even on a flight to US is immaterial in terms of the cost. So you really would need the sort of political catalyst that we're seeing now in order to make that happen, but it has to sort of be the perfect convergence of everything happening. And Tim Cook can't just be the only person who's being pressured by the White House to do this because if you're gonna have Foxconn and a whole bunch of industrial clusters setting up shop, you know, in Pittsburgh or wherever it is that Trump wants it, they can't just be supplying iPhones.
Speaker 6:Right? There is no factory in the world that all they do is supply iPhones. Right? Think of a TSMC building chips for any number of company that you can think of. That is what you need.
Speaker 6:So it's not a matter of convincing Tim Cook to open a factory. There's no such thing as an Apple factory. You need Tim Cook to convince his underlings and the supply chain to build things. But in order to do so, they need to be building for, I don't know, Sony and Samsung and a whole host of industrial clusters are are sort of saw a whole host of companies in an industrial cluster. Otherwise, the economics and the efficiency don't make any sense.
Speaker 1:Yeah. I I remember you mentioning that it sounded like Apple had a mandate that their suppliers would not be overly reliant on Apple to the tune of more than 50% of what they produced being for Why did that dictate come from Apple? You would think it would come the other direction where if I'm a supplier, I don't wanna be too dependent on Apple because if they pull out, I lose my entire business.
Speaker 6:That's true. But Apple has all the leverage in these relationships. And so if Apple says jump, the supplier says how high. Mhmm. And so if Apple's really and just think of how demanding Apple is and particularly how much they scaled.
Speaker 6:Right? So 5,000,000 iPhones were built in 02/2007, nearly a quarter billion by 02/2015. So if you're a supplier just trying to keep up with that, like, was enough business. Even if you're making 11% or 2% margins, the volumes were were making you grow at a level that you had never grown before. But, yeah, what happens is that if Apple obviates the need for a certain component and turns direction just as they go from 100,000,000 iPhones to a 170,000,000 iPhones, well, you would just go out of business.
Speaker 6:And so this would happen, and it would it would develop bad will from the supplier community towards Apple. And so Apple began saying for its own protection, however fast you grow with us, please grow as fast with somebody else. Mhmm. And that's what sort of gives birth inadvertently to the Chinese smartphone I don't mean the suppliers. Mean Huawei, Oppo, Vivo,
Speaker 2:etcetera.
Speaker 1:And Xiaomi.
Speaker 2:Speaking of the consumer market in China, how how cooked is Apple in China? I know sales are down double digits as of at least last year. It doesn't look good, especially with all these new AI features coming online.
Speaker 1:Is that driven by just consumer choice and nationalism? Or are there actual structural policy choices that are that are driving that change?
Speaker 6:My question back to you is whether cooked was a pun.
Speaker 2:We always make tons of choices.
Speaker 1:Tons of
Speaker 6:I just wasn't sure how intentional that was.
Speaker 2:Oh, yeah. Of course.
Speaker 6:Yeah. I mean, well, let me give the sympathetic views which is that after Trump one point o kneecapped Huawei, Huawei was at the time, of all, outselling Apple globally in terms of smartphones. But more importantly, it was the only phone to penetrate the top tier. Apple doesn't really care if other phones other phone makers sell more phones than them, but they do care if they're in the top tier. And so when when Chinese luxury buyers were purchasing Huawei phones instead of Apple phones, it was a really big deal.
Speaker 6:But Trump, you know, disallowed Huawei from having access to Google services, which maybe doesn't matter so much in China. But, mean, I used to live in Germany and had a Huawei. If that thing didn't have YouTube and Gmail anymore
Speaker 1:Yeah.
Speaker 6:You know, gone. I'm not gonna have it. And they also disallowed them from having five g technology from from Qualcomm. So that worked really well at a time. And China market share for Apple was 9%.
Speaker 6:And then when Huawei gets kneecapped, all the luxury buyers in China that need a five g phone, just as five g was really coming on the scene, they all bought iPhones. So their market share doubles to 17%. Mhmm. You could say that as a result of that, as a result of Huawei being on the sidelines, Apple's market share was sort of overly inflated. Mhmm.
Speaker 6:So now that Huawei is back, we have had two years, and now this is the year of Apple market share declining in China. But if I'm to be sympathetic, I would say it might just be that they're sort of rightsizing or, like, refining an equilibrium now that Huawei is back in the game. Unfortunately, I wouldn't sort of go with the sympathetic view. I'm more cynical here because now that Huawei is back and you're seeing more nationalist fervor in in China, and now that iPhones are gonna be built in India, which actually diminishes the sense that the iPhone is an indigenous made product in China. And now that IA sorry, AI is taking on more preeminence in terms of why you should buy a phone, and Apple's having all sorts of problems on their own, and the problems are only compounded by the fact that they can't use partners like ChatGPT in China, I would predict that by 2030 at the latest, iPhone share in China is gonna fall back to single digits.
Speaker 1:Interesting. Can you talk more about the parallels or differences between Huawei, Xiaomi, and and Apple? Huawei's gone into GPU accelerators. They're competing with NVIDIA on the Ascend side. Xiaomi has a car.
Speaker 1:Apple's kind of stumbled in cars or there was rumors that they were working on a car. They didn't. Yeah. I I I guess my question is, why hasn't Apple reaped some some of the the the downstream dividends of adjacent product development based on their supply chain dominance? Because that seems like almost free money for them.
Speaker 1:And and it seems like all the Chinese companies have been like, oh, yeah. We make phones, so let's also make hoverboards and cars and everything. And there's been a much different culture in terms of product development. Is it just come down to culture or is there something else strategic, or kinda structural going on?
Speaker 6:It's a fair question. I don't really know why Apple, abandoned the car project. And I think it could have been a winning product, especially in China because they have such brand appeal. On the other hand, I would say the pro the Apple car product probably should have died years earlier. The reason I say that is because Apple got caught up in the hoopla that Silicon Valley was in in 02/2015, which is that self driving cars are going to be everywhere.
Speaker 6:Right? I mean, the the the founder of Lyft had said that, quote, a majority of our rides will be self driving by, I think, 02/2021. Yep. Travis Kalanick had said that they would buy a 100,000 Mercedes self driving cars by 02/2020. Wow.
Speaker 6:And Larry Page of Google said self driving cars will be bigger than Google. I mean, there was a sense that self driving cars were the next big thing, and Apple was not immune and Apple fit into it. As soon as we realized that the self driving thing was a bit of a fantasy and was gonna take much, much longer to to develop, I think the project could have died. Because at that point, it's just like, is Apple just competing on acceleration with Tesla? Like, what exactly are they going to do?
Speaker 6:If you're in a self driving car and you're using iOS apps on all these, like, you know, sexy windows and stuff within the car, like, makes all kinds of sense. Once you take the self driving car element out of it, I don't know that the Apple car makes any sense.
Speaker 1:Sure.
Speaker 6:The Chinese are in a different ecosystem where it does make sense for them to have a Xiaomi car, a Huawei car, etcetera. And maybe they're self driving, maybe there's not, but they sort of like having an advance on all this technology, and they like market share. Apple only wants to be in markets where it's going to be a number one or number two player. Doesn't want to play fiddle to to Tesla and any number of other companies.
Speaker 1:So That was kind of remarkable that they actually went so heavy into Apple TV because they were behind HBO and Hulu and Netflix, and they really, like, carved something out there that worked. But I know a lot of Hollywood people that were very skeptical about that because in film and television, the brand standard is so high and you have a couple bad shows, you get a bad reputation, but they they they slog
Speaker 6:Can I give you my theory on why they moved into Apple TV plus?
Speaker 1:Please. Yeah. That'd great.
Speaker 6:Apple has a services division that is largely not what you think it is as the consumer. In other words, if I said, what are Apple services? You would say, oh, it's Apple, you know, it's Apple Music.
Speaker 2:$11 charge I get
Speaker 6:I get Etcetera. Couple times. What it
Speaker 2:really is
Speaker 6:is 30% fees on App Store and Google paying them $20,000,000,000 a year. So for the purposes of earnings calls, I think they wanna push more into things like talking about Ted Lasso and what Emmy Awards they won rather than having to say, we squeezed more out of Spotify this year. And by the way, Google is now paying us $22,000,000,000 a year. I really think that was the motivation we've we've for why
Speaker 2:Why why somewhat random, but why do you think they never made a a television?
Speaker 6:Oh, I don't know. I mean, I've heard one thing which is that Steve Jobs demanded, this is obviously, you know, before 02/2011, that when the phone when the TV was off, that the pixels be white rather than black. That Apple was unable to nail this. I'm not saying that's why the project died.
Speaker 2:So interesting because would I would happily never get any Apple media products. I don't need their shows. I would much prefer to have an Apple device A TV that works. This buggy Samsung, you know. Absolutely.
Speaker 6:But it's funny. TVs are good. Right? Like when Apple comes up with the iPod, it's because they're looking at m p three player on the market in 02/2001 and they're saying everything sucks. The reason why they never made a video cam, even though they came out with iMovie is that video camcorders were generally speaking doing fine.
Speaker 1:Mhmm.
Speaker 6:So they needed to break into one market.
Speaker 2:They just I would argue I would argue that TV suck. There's I I have
Speaker 1:There's all these pre installed I hate every
Speaker 2:I've I've got It's a mess. I hate the
Speaker 6:four frame in the back there. I I think that thing's great.
Speaker 1:It's okay. I have one too.
Speaker 2:Yeah. But it's it's software, it's bugging, slow. It's it's
Speaker 1:It it it wants me to upgrade and subscribe and do all this junk and it's just like not a I
Speaker 6:guess the question is how much you would pay because TVs aren't a high
Speaker 2:$10.
Speaker 1:Yeah. Mean, I I I think it would I I think it would I think it would be like the Apple Pro Display XDR, which is like a $4,000
Speaker 2:screen. Yeah. It's basically more than More than anything else. To 10 times
Speaker 1:what it's But still so good that designers still demand it. And I think that I think that they could pull that out. But I I but I think you're probably correct overall. Yeah. I last question.
Speaker 1:Wanna get you and I wanna let you go. I wanna hear the story of the mini Tiananmen that happened in 2010. That's a fascinating story.
Speaker 6:Oh, god. What a terrible story to end on. It the only bit in the story that I would call salacious, and I only have it in there. I don't like salacious stories, is that it's just an an incident that takes place where Apple really realizes they're in over their head, and they don't understand the culture. Mhmm.
Speaker 6:How many how many seconds do I have to tell this story?
Speaker 1:A minute or
Speaker 2:two. Two minutes.
Speaker 6:Okay. So it's hard not to like, I need to give the backstory, which is that the iPhone four in 2010 goes absolutely wild in China. It becomes the most conspicuous thing that you can own. Yeah. And it's so conspicuous and there's such a supply demand imbalance that Apple at the time has four stores in a country of 1,400,000,000 people.
Speaker 6:And so these scalpers known as yellow cows begin sending migrants to the store by the thousands where everybody can each buy two units. And then these gangsters who are backed by the triads are basically like lining up these people, getting all the phones that come out of the store, and then going to a city like Chongqing, population 32,000,000, number of Apple stores zero, they're able to sell them at $7.08, $900. They began finding ways illegal, legal and legal to make more money per iPhone than Apple. And one of the ways was to go buy a phone in America, T Mobile on a twenty four month contract, And using a fake ID, they could acquire the phone for one month worth of the of the twenty four month contract, smuggle it into China, and then sell it for 8 or $900. I mean, that's just the state of demand at the time.
Speaker 6:More than that, they were actually zapping out out the phones. So they were, like, rendering the thing inoperable. But in the process of breaking it, they were masking the fact that it was a stolen phone and then making more money that way as well. And they were even hollowing out the phone's components, selling off the memory and things like that. So if you understand just, like, through this brief thing that there's this chaotic scenes of of crazy demand of triad gangsters and everything, one of the worst things that happens in the book is that Apple runs out of product at the Shanghai Pudong store.
Speaker 6:So there's 7,000 migrants waiting to buy their product, and they're more scared of the triads who have hired them to be there than they are of the police. So when Apple says we're out of product, you need to go home, they don't want to leave. They feel like they can't leave and they literally prevent the glass doors from being shut on them and they stay to sit in in the store. So the police are unable to get them to go. The mayor of Pudong shows up.
Speaker 6:They're not able to go. And eventually, after 11PM, a 100 black cat black clad police officers that someone compared to, like, you know, the the SWAT team or or to Yeah. What's it called, SEAL Team six. Yeah. They those kinda guys show up.
Speaker 6:And when a young woman sort of having having never seen these people takes a photo of them, one of the persons takes her behind the Genius Bar and beats her so bloody that the blood on the ground cannot be scrubbed out, and they have to reimport granite from Italy to replace the stone tiles. It's a terrible story. The person who told me it has had been having nightmares about it for the last fourteen years, but it's an example of Apple just not understanding what they were dealing with, and it results in the political awakening the following couple years when they begin to hire senior people on the ground to understand the politics, the culture, and the distribution issues that they're having in the country.
Speaker 1:Very rough. Well, it's been fantastic talking to you. I
Speaker 2:personally am
Speaker 1:calling for Apple to reshore manufacturing and diversify the supply chain. I'm on the side of Tim Cook. I think he can do it. I think he's cooking.
Speaker 6:On the side of Friendshoring. I would love to see more in Mexico and more in India. Don't know what's gonna happen in Pittsburgh.
Speaker 1:Yeah.
Speaker 2:Patrick, thank you for doing the work to tell the story and come back on anytime. This was great.
Speaker 6:Okay. Cheers.
Speaker 1:Thanks. Talk to
Speaker 2:you soon. Cheers. Bye.
Speaker 1:Really quickly, let me tell you about Adio customer relationship management magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level.
Speaker 2:Towards And we are power users. Day. Power users over here.
Speaker 1:Power users. Next up, we have Aaron Slodov coming in the studio. Tell us about Reindustrialize, all the things that are going on in his world.
Speaker 2:And I'll be right
Speaker 1:back. And let's check-in on the intern cam, see how Tyler's doing. Aaron, how are doing?
Speaker 12:At the donut. Oh,
Speaker 1:yeah? Oh, looking good. I I like the background. We have our intern we have our intern in the studio making the iPhone in America. It's happening.
Speaker 1:It it looks like he's done. Give me the update. I'm I'm getting pretty close. He's getting pretty close.
Speaker 5:Missing, I I most of the kind of, you know, external external things here. I got the volume buttons, home button. I gotta put in the battery, the main kind of chip motherboard.
Speaker 1:Okay.
Speaker 5:But feeling pretty good. I'm probably 80% of the way there.
Speaker 1:80% of the way there. Less than an hour and a half in. I think this is this is going fantastically. I wasn't sure if this is possible, but it looks like it's looks like it's happening. Anyway, Aaron, how how are you doing?
Speaker 1:What are what you up to these days?
Speaker 12:Doing well and getting ready for, you know, the annual
Speaker 1:Is this reindustrialized conference? Give me the background on the one. How'd that go? When and where is the one?
Speaker 12:Yeah. So this is kind of a labor of love of many people. Right? Basically, you know, we have we have a nice team of cofounders, myself
Speaker 3:Mhmm.
Speaker 12:Austin Bishop, Phelan Donahue, and Greg Bernstein
Speaker 3:Oh, cool.
Speaker 12:And an amazing team of organizers. But, yeah, last year, the backstory is kind of obviously, you know, hard tech, deep tech, the wave was kind of happening at that point. I put out that article, the techno industrial manifesto.
Speaker 1:That's right.
Speaker 12:Lots of questions, lots of people talking about this across military, government, finance, whatever. Wanted to put all these people in the same room together. Right? So the idea behind this was, can we actually build a big tent around this idea? And I saw it as a way to really just, like, convene.
Speaker 12:And Who were
Speaker 2:the who
Speaker 1:were some of the top top speakers last time?
Speaker 12:So we had Shyam from Palantir. We had Eric Prince. We had the lieutenant governor of Michigan. We I mean, it was crazy. Right?
Speaker 12:Like, this all came together in under three months, basically. Yeah. And we were we were all, like, grinding super hard to, you know, bring this awesome group of people together. Mhmm. You know, Chris gave a keynote from Hadrian.
Speaker 12:Cool. And it was this really, really excellent group of people. It was like you were there with, you know, a thousand of your friends. Right? And everybody's ready to build.
Speaker 12:And, it was just it was wonderful, you know, in so many ways. And people really thought that it was like yeah.
Speaker 1:What if well, yeah, what what is the overall state of the reindustrialization project? There's been a lot of thought pieces and conferences. What have we seen on the legislation side, on the EO side, and what are we waiting for next?
Speaker 12:I mean, yeah, we could probably spend an entire hour on, all the things that have rolled out of the admin, you know, since January. But it it has been it's been surprising, to say the least. Like, wow. That's awesome. George
Speaker 2:What's up, Aaron?
Speaker 6:Good to see you.
Speaker 12:Hello. You as well. So, yeah, like, following up on last year. Right? Like, one of the things that we established at the very end of the summit was we wanted to bring together the new industrial alliance, new American industrial alliance, NIAYA.
Speaker 12:Right? So we Austin has been running that in DC, for the last year, and we've they got basically, like, a mountain of, you know, legislation and policy that has been active and pumped out, through various, like, EOs. We have, reconciliation happening right now. There's there's gonna be a ton. Right?
Speaker 12:And shipbuilding standalone by itself. Right? It's I think we're gonna be at a level where, the sovereign wealth fund potentially, right, like, equipment financing out out the wazoo. Like, it it will be pretty interesting to kinda, like, watch and see what happens here. Very, very excited to see.
Speaker 1:What can you tell us about what to expect at this year's Reindustrialized? Are tickets on sale yet? Where can people go to sign up? Is it invite only? How is the how is the conference coming together?
Speaker 1:Any speakers you can tease?
Speaker 12:Yeah. So we did we did actually, you know, bring out a little list, the other day of our top, invites, and you can check that out on the the Reindustrialized account, which is Rian Summit on x. But, yeah, basically, the way we're doing this right now is that it's mostly invite only.
Speaker 1:Mhmm.
Speaker 12:We're we're balancing, you know, a very interesting community here, in terms of, like, bringing the stakeholders together, decision makers, but also all the people that are very enthusiastic about reindustrialization and bringing manufacturing back. So Getting Aaron's DMs.
Speaker 1:That's what I'm hearing. Start start yapping. That's great. And, I mean, big big developments since the last reindustrialized. I've seen the iOS autocorrect keyboard stops correcting, reindustrialized to deindustrialized.
Speaker 1:Total cultural victory.
Speaker 2:Let's go. We're reindustrialized, crew.
Speaker 1:We love it. We love it.
Speaker 2:I think that's subtle signaling from Tim Yeah. That that we're bringing the iPhone back to America. Yeah. Okay. Give me Any advice, Aaron, for I
Speaker 1:was about to ask. Yeah. Yeah. Yeah. What's the advice for our intern who's assembling the iPhone in America for the time?
Speaker 1:What tools does he need? You know, what are the key steps to really reassure manufacturing? I mean, there's parts and pieces that didn't go in that phone.
Speaker 2:Yeah. Take it apart.
Speaker 5:I'm not done yet.
Speaker 2:Take it apart. Put it back together.
Speaker 1:Oh, he's not done yet. Okay.
Speaker 5:Yeah.
Speaker 1:Yeah. Yeah. Aaron, what what does it take to reshore the iPhone?
Speaker 12:Does he I mean, are we gonna give him a Gong ring for this? Because, I mean, it's a lot of it's a lot of grit. Right?
Speaker 1:We're watching history. So cultural shift is what I'm hearing. Yes.
Speaker 12:I mean, massive cultural shift, which is, you know, underlied by a lot of other factors too. So Okay. I think that infusing and transforming the industrial base through technology gives, you know, a lot of incentive for people to jump back in and join.
Speaker 1:Mhmm.
Speaker 12:We're not we're not trying to go back to the fifties here. So Mhmm. I I really do think that that's, you know, part of the cultural movement, right, to, like, bring the stuff kicking and screaming out of, World War two era or the eighties or however you really wanna think about it into the 20 century. And it's not gonna be easy. Right?
Speaker 12:Like, listening to Patrick talk about that stuff is it's mind bending, honestly. Like, how how much one company can actually do, right, at scale? So
Speaker 1:Yeah. Yeah. Yeah. What are you thinking about kind of the the steps to, biggest reindustrialities? Like, what is the rate limiting, like, in the supply chain right now?
Speaker 1:We've heard about mining and Dirac's working on work instructions. And Hadrian and you are working on different pieces of whether it's CNC or injection, there's a whole bunch of different pieces of the subtle supply chain. I talked to one person who is working on bringing a team internationally to build brushless motors for drones, for small drones. And they were like, oh, yeah. I'm excited to get to America, set up shop here.
Speaker 1:I'd love to just set up my company in the Brushless Motor District in America. Wherever the Brushless Motor District is, I'll just set up my business there. So then if I need a certain part, I'll just walk across the street to another company. And the guy had to explain, no. No.
Speaker 1:No. We don't even have a district. We don't even have a company. We have nothing. So so, yeah, what what what are you most excited about?
Speaker 1:What's perhaps underrated right now in terms of the supply chain?
Speaker 12:So it it's a really good question because this is kind of like, can we pull the UNO or Verso card on, you know, China or whatever other supply chains and bring some of the stuff back? Right? Like, what what does that actually require? And it's more than just, you know, the raw the raw materials, the machines. It's the way that I think about this stuff, it's like trade skill.
Speaker 12:Right? Like, these are very, very precious tools, of skill that when you give them away, right, it empowers somebody else to scale them somewhere. And if you've got hundreds of millions of people to to do that, that's it's pretty challenging. You know? We we don't necessarily need to outdo them.
Speaker 12:We just have to be, right, like, in the arena still. Yeah. Because one of the things that they want is to deindustrialize everybody else. Right? So we can't we just can't let that happen, and that's okay.
Speaker 12:Right? Like, we we have to be able to fight back on a fundamental level by preserving, replicating, and, like, scaling this very precious, like, trade skill. And if that has to be done through through AI and automation, right, like, to compress the stuff that people really shouldn't be doing. Right? Mhmm.
Speaker 12:Like, these dirty, dark, dangerous types of jobs. We don't we don't really necessarily need to go back to that, but, yeah, there there's there's a lot, right, like, underlying this problem. And I think a lot of people have a challenging time separating the fact that, like, do we do we actually need to be focused on making T shirts and toasters in America? But, like, not necessarily, but the feeder industries that you need to do all that stuff, you know, grant you the ability to do all these other things. Right?
Speaker 1:Yeah. Yeah. Have this line about, like, maybe we need to make make Happy Meal toys in America in order to for to earn the right to make iPhones in America too. Like like, the supply chain is so interlinked that even these, kind of, like, these silly toys that seem so easy to to offshore, maybe we need to bring those back too. Anyway, it's been fantastic having you.
Speaker 1:I'm sure we'll learn a lot more at Reindustrialize. Where can people go to learn more? What's the website?
Speaker 12:Reindustrialize.com.
Speaker 1:There we go. That's a great domain.
Speaker 2:Let's give it up for a great domain.
Speaker 1:Thank you, Aaron. Thanks for hopping on the show. We will talk to you soon. Have a great
Speaker 2:rest of We're excited to cover it. Thanks, Aaron.
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Speaker 13:Notion war torn countries, actually.
Speaker 2:Yeah. Yeah. Yeah. Notion inspired the .so domain Yep.
Speaker 1:That was a big movement. Somalia. And then I remember, dot TV was Tuvalu Oh, which is a tiny, tiny island nation of, like, 5,000 people. I might be getting that wrong. But I'm pretty sure at one point, they were making, like, half of their GDP off of selling dot TV domain names.
Speaker 2:Anyway Dot AI domains represent 20% of the government's total revenue for Anguilla. Anguilla. Wow. Wow.
Speaker 1:There you go. That's that's fascinating. Anyway, we're not here to talk domains. We're here to talk industrialization, making massive things, chemicals. Can you give us a brief overview of the company and the shape of your business?
Speaker 1:And then I have a bunch of questions about how you actually, like, build this stuff.
Speaker 13:Absolutely. So SoluGen, pronounced SoluGen. Yes. We got started in 2017, spun out of MIT
Speaker 2:Mhmm.
Speaker 13:And then went through Y Combinator, raised a significant amount of capital to basically decentralize chemicals production. If you look at chemicals production today, it's like these massive facilities. I I grew up in Houston. My backyard was effectively a refinery. These are the size of islands.
Speaker 13:Like, Galveston is an island. It's largely a refinery.
Speaker 1:Yeah.
Speaker 13:What we said was, like, what if we can marry my background and my cofounder's background, Sean, to basically make a better process? And we did. We we invented basically I I I guess you can call it the world's smallest chemical factories is is how we think about it. And the whole point of that is that instead of having these massive centralized facilities, you've got decentralized production where you can put these facilities anywhere in the world
Speaker 1:Mhmm.
Speaker 13:And actually have your product be closer to the chemical. We started the business with hydrogen peroxide. Mhmm. Very dangerous to ship hydrogen peroxide. So the whole premise of of the company and and the name, as we discussed, is basically creating peroxide on demand near the end customer.
Speaker 3:Mhmm.
Speaker 13:We've since expanded quite a bit out of not just peroxide, but added multiple chemicals into our portfolio. So, yeah, that's that's kind of the background.
Speaker 1:Well, I mean, I'm I'm familiar with using hydrogen peroxide if I get a little cut out of my hand. Like, I imagine that that's not the vast majority of
Speaker 13:customers you're talking to. It's a it's a good question because the when we started, everyone was like, you mean, like, the little brown bottles Yeah. On on the shelves? We're like, yes. And there's a huge market for peroxide for water treatment.
Speaker 13:So it's a really good antimicrobial, so it kills bacteria Mhmm. But also for rockets. So, like, if you look at, like, rocket propellant, a lot of it can contain high concentration peroxide. It's called HTP peroxide. That basically gives you pretty good thrust.
Speaker 13:It's like liquid oxygen, but more powerful. And then the other applications are, like, in paper and pulp and all the things that no one talks about. It's like this invisible multibillion dollar industry that we went after.
Speaker 1:Wow. Yeah. I mean, you said the the the plants are smaller, like, not an entire island, but I imagine that it's not something I can put on my desk. How big are we talking?
Speaker 13:Yeah. No. Unfortunately, your intern cannot make one of these at his standing desk like the iPhone.
Speaker 1:Not yet. He
Speaker 2:I don't know. I don't know. Look at him. Look at him. He this guy
Speaker 4:is talking about
Speaker 2:Tyler can't do anything. The American
Speaker 1:iPhone. I think he's he's doing well.
Speaker 2:He's making he's making the USA made iPhone.
Speaker 1:He's doing well. He had to take it back apart to put the battery in. Oh, the battery's going in now.
Speaker 2:The battery's looking good.
Speaker 1:The battery's in. He's doing great. Yeah. So how how how big are these plants?
Speaker 13:Yeah. It's, like, 10,000 square feet. So, basically, the size of, like, a small warehouse, you
Speaker 10:could say.
Speaker 2:Great.
Speaker 13:Yeah. So that's that's the idea.
Speaker 1:Got it. And then and then, walk me through the chemical supply chain in America. Are there I mean, we hear a ton about, we don't have enough, tool and die makers in America if we're talking about Apple. We don't have enough rare earth mineral extraction. I I I've the the there's this, there there's this deja vu.
Speaker 1:Anytime you find out about a new thing in the supply chain, it's always bad news, and America's not leading in it. Maybe give me the bad
Speaker 13:news, and we can send you some good news. I'm not gonna shock you guys here. 80% of chemicals that we consume in The US come from China
Speaker 6:or a different country.
Speaker 1:Sorry. So
Speaker 2:Sorry. They're not booing you. They're just they're just patriots.
Speaker 6:They're just patriots.
Speaker 13:It it makes sense, though, because it's the cheapest cost of capital and the cheapest cost of labor
Speaker 5:out there. Yep.
Speaker 13:So what we're saying is we wanna go after chemicals that give The United States an edge Mhmm. That China can't make easily Mhmm. That are difficult to ship from other countries beyond China.
Speaker 1:Yep.
Speaker 13:And that you you The United States is uniquely capable because of the technology we're developing to produce. So if you look at the supply chain today, it's a producer. Basically, a giant chemical factory makes the chemical, concentrates it into a dangerous mix of something that can fit into a tanker truck. That then goes to a middleman who then sells that to another middleman
Speaker 2:Mhmm.
Speaker 13:And then to another middleman. There's about five middlemen in this chain. They're called distributors who then sell that to the end user. What we've done at SoluGen is said, hey. Like, what if what if we kinda collapse this whole middleman chain and put one of these units near our sites?
Speaker 13:Ours I'm actually I'm pointing to my plant. We have a plant behind me right now. That plant our biggest customer is ten minutes down the road. They take most of the volume of the plant. And, basically, that's the the premise of what we're trying to go after.
Speaker 13:And the business Yeah.
Speaker 1:Yeah. Yeah. I mean, talk to me about the early go to sales motion because, like, selling chemicals does not feel like, oh, yeah. You're a YC company. You're just gonna sell to the other companies in your batch.
Speaker 3:Like
Speaker 1:Yeah. We do a lot
Speaker 13:of listening, actually. No. I'm kidding.
Speaker 2:We'll buy a million dollars of your CRM. You buy a million dollars of hydrogen products.
Speaker 1:We both have a million dollars of ARR.
Speaker 2:Yeah. Right.
Speaker 1:But you're really you're really breaking the YC narrative. I mean, now YC obviously does a lot more
Speaker 13:hard time and
Speaker 1:stuff. But you were you were early to that party for sure. We we
Speaker 13:were early to that party, and the way we went to market, it's kind of a bizarre story. So we started in what was called float spas. Have you guys heard of these? These are, like, these isolation
Speaker 2:things. Yeah.
Speaker 13:They're, like, 25 weight percent salt, and you float in it, and you're completely isolated from from the world. Turns out they use a lot of peroxide to clean that water.
Speaker 1:Oh, that makes sense.
Speaker 13:But when we started, we weren't at scale. So we couldn't, like, we couldn't make industrial quantities of product. We can make small artisanal batches of peroxide. It's how we kinda pitch it. But then if you look at the these float spas, they're not using that much, but they were paying a lot per gallon for this product.
Speaker 13:So we just said, okay. Let's just go a little bit cheaper than what everyone else is doing and sell it to the float spas. We got 80% of the market share within two years.
Speaker 1:LA. Yeah. Congratulations.
Speaker 13:Not a big market, but we're we were able to kinda, like, dominate it.
Speaker 2:That's the y c. That's the y c thing. That's great. Yeah. And that's
Speaker 13:the y c. That's the founder's fund thing. You know? That's their kind of entree into that world. And then from there, once we had that win, we, of course, went to consumer products.
Speaker 13:We actually launched a brand, which Really? Like, not many people know the story. We actually launched a brand called Ode to Clean. So, basically, we said, okay. We did this whole float spa thing.
Speaker 13:We sold off. Basically, we had a partner that we just got a contract with and sold them the volume. Mhmm. Then we said, what's the next what's the next highest leverage point we can get as we scale the technology? And it was wipes because everybody wipes.
Speaker 13:And so if you have these wipes that have just a little bit of peroxide in it, you have a pretty high dollar per per gallon of peroxide. So we launched this brand, a cleaning wipes brand called Ode to Clean, that got bought out by the nation's biggest wipes manufacturer. We got a supply contract out of that, and that really kicked off our B2B sales motion. Yeah.
Speaker 1:That's yeah. That's amazing. Now get me up to speed on the fundraising side. Interested to know the the you raised all the capital, but the use of capital has to be different because there's CapEx in the business. There's R and D.
Speaker 1:But talk to me about the mix of venture and debt and how you think about deploying capital, not getting over your skis because you're raising big rounds Yeah. Probably ahead of of huge profits. Yeah. How are you underwriting these investments as they happen?
Speaker 4:Yeah. Yeah.
Speaker 13:That's a great question. I think, fundamentally, we we look at this metric called return on invested capital or ROIC. That is like our north star where any asset that we go after has to pass an r o ROIC filter.
Speaker 1:Mhmm.
Speaker 13:And so we only go after the top two ROIC assets at any given time at SolarGen. So fundamentally, where we are today, we've raised about 700 in growth in venture capital.
Speaker 1:That's fantastic. And
Speaker 13:then we've we've also, we got a Department of Energy loan program offer for $214,000,000
Speaker 2:Mhmm.
Speaker 13:At 6%, but that program is, in this administration, a little bit challenged just because it's a Biden era thing.
Speaker 4:Sure.
Speaker 13:No big deal. We were going to private banks to to for for the debt side of it. Now that we've proven out commercial scale, we can basically show that these this is the unit economics on one of these assets. Yep. This is how big it can get.
Speaker 13:Let's go after multiple ones.
Speaker 1:Yep. I've talked to a couple of hard tech investors or industrial industrial founders, hard tech founders, where when they have to build something, there's a whole bunch of different structures. Like, do they wanna own the land? Do they even wanna own the the building that they're building, or do they wanna set up a a different LLC for that and raise different investors for that? Have you gotten to that game?
Speaker 1:Do you see that that's coming down the pipe?
Speaker 13:Thing. Okay. Like, I a lot of people say if you're doing project financing, you should put it into a project financing entity.
Speaker 1:Yep.
Speaker 13:What we fundamentally believe is, like, we can move a lot faster if there's no one else kind of Mhmm. Involved at the table that's gonna dictate how fast we can move.
Speaker 1:Got it.
Speaker 13:Predictionally, like, I would even say, like, even the LPO, they wanted us to work with, like, this white shoe engineering firm that would have taken three years to build our factory when we did we did ours in eleven months. So we said, we're not we don't really want to work with those folks. We're going to do it ourselves. And so that's why we own everything outright.
Speaker 1:Got it. Talk to me about automation and just getting more value out of the capital assets that you're deploying. Humanoids are in the news. That seems pretty far off. But Yeah.
Speaker 1:What what else is is is valuable to you right now in terms of are there things that you can design to make the Yeah. The plants more efficient?
Speaker 13:I wish I could sit here and tell you, like, the automation piece is gonna be big for us. It's not, guys. I'm like, not for what we're doing. The fundamentals of chemicals is all about yield, and yield comes down to chemistry. So if you look at a traditional petrochemical process, the yield is about 60%, which means 40% of your initial carbon is either a waste product or has to go into the environment as c o two.
Speaker 13:What we're saying is let's actually engineer that before we try to optimize or automate anything because that's the true bottleneck for the the cycle time of these products. So that's where we're focusing on the yield side. I will say there are opportunities for automation that are popping up that are exciting. That's on the defense work that we're doing that is gonna be quite important because we are making products that will go boom, and it's important to have a lot of automation and control around that. Yeah.
Speaker 1:Yeah. I imagine that that's more yeah. I mean, I'd love to hear more about that to
Speaker 10:the extent that
Speaker 1:you can talk about it. But also, in terms of any of the, any of the advances on technology in terms of, understanding chemistry, we've seen AlphaFold, and there's amazing things that you can do when you have a lot of data. Is is that something that's coming down the piper? Is that just
Speaker 13:Yeah. Not really So we we actually just released a paper that got published last week called our algorithm's called Badass. So, basically, what it does is it basically figures out a sequence for an enzyme. So we use enzymes as as catalyst. It figures out a sequence that's most likely to have the function that you're going after, and that paper showed 75% predictability based on the sequence itself.
Speaker 1:Mhmm.
Speaker 13:That in itself is important, but what's more important is really the reactor design itself, how we think about how the chemical's interacting. It's a very it's truly an engineering problem versus a science fair problem. I'd say.
Speaker 1:Yeah. Jordan, anything else?
Speaker 2:If you're successful, is there a specific vintage car that you would develop? If you know Enios, the Enios Grenadier
Speaker 1:Oh, yeah. Another Enios. Yeah.
Speaker 2:largest chemical manufacturer. They've redesigned and rebuilt the Land Rover Defender. Is there a car you would look
Speaker 13:to A Camry or a Subaru? That's how
Speaker 2:we started. Subaru. Yeah. That's great. We have a hatchback.
Speaker 2:We're rebuilding a 2005 Camry. Camry. It was the perfect car.
Speaker 1:It was the perfect car. That's amazing. Thank you so much for hopping on. Awesome. This is great.
Speaker 2:Well, thanks for jumping on. Cheers.
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Speaker 1:Of capital, we have venture capitalist Sean Liu from Founders Fund in the studio. Welcome to the stream. How are you doing, Sean?
Speaker 2:I'm doing well. Let's give it up.
Speaker 1:I'm great. Good to see you. We just talked to Gaurav from Soligen. Is it Soligen? I keep messing Soligen.
Speaker 1:Soligen. Soligen. Yes. I I I wanna hear your side of the story. How did you initially wind up working there?
Speaker 1:What did you learn? And then we'll go into some of your venture career.
Speaker 7:So I'll start with how I ended up there. It was a reference from Knapp and
Speaker 1:Oh, cool.
Speaker 7:Brian Sinker. I'm I'm I'm kind of like a crazy tech guy that likes capital expenditures. Any company that has tech risk
Speaker 2:bring it on. Crazy. Are
Speaker 7:better. Right? I love You know, I I was thinking about getting my hands dirty with something early, something fun, and
Speaker 3:Yeah. Know, saw
Speaker 7:that you came up. Met the guys. Love the vision. Love the team. And it was a hard job.
Speaker 7:We were small in the middle of COVID and needs help.
Speaker 1:Yep. And I
Speaker 7:feel like CFO and COO is one of those underappreciated roles, so I took a took a chance on myself and the company, and been a lot of fun.
Speaker 1:Yeah.
Speaker 7:question, what did I learn? I think probably the it's all management theory is bullshit. Any book you read is complete bullshit. You you just you go in and you it's you kinda you learn on the job and, you know, just whatever those advice they give you is all is all is all fake news.
Speaker 1:What yeah. I mean, what what's an example of that? What was the moment where you were like, oh, this this completely I gotta throw out the playbook on this one.
Speaker 7:You know, I think there's there's this whole thing about you gotta be nice to your employees. It's just like, hey. The HR gurus and the team is gonna tell you, you know, you can't work your employees after 5PM. And you're just like, look, we're a fucking start up. Let's go.
Speaker 7:Right? Like, you work Saturdays. You run you run you run night shifts. There's a there's something called a DuPont schedule for a reason. You run twenty four seven and Yeah.
Speaker 7:You know, factories don't go down just because you need to take a break. So, yeah, and I think I think I think it's just just setting those, like, cultural guidelines. And, you know, sometimes you you when you hire people, you hear, like, people say, hey. You know, you just you gotta define your culture as, you know, where where we have all these missions and values, which is true. And at the end of the day for a start up, do you have the do you have the IQ, the grit, and the grind to to to to suffer through a marathon that's a that's a start up?
Speaker 7:So it's it's almost like a different profile.
Speaker 1:How much of the work at that time was focused on fundraising and kind of educating venture capitalists about underwriting what is kind of a of its kind company to really go through the Silicon Valley pipeline versus kind of the operational role of the CFO, COO actually deploying the capital?
Speaker 7:I I would say it's it's I mean, it's both. You're you're firefighting every day, every minute. I remember when we joined, there was no one no one no one no one in the company to to do finance, and we had a really bad head of FP, and I fired him after two weeks. So I went to account inventory myself. And, you know, yeah, we you you know, we're not a SaaS company.
Speaker 7:We gotta you gotta count inventory. You gotta know what So that's like barrels. Your warehouse. So it's it's it's important. You gotta know what every piece of the equipment cost.
Speaker 7:And on the flip side of that, yes, there is a huge you know, capital makes a difference. Right? Cost of capital. We we haven't had a new chemical startup that scaled in Yeah. You know, more than thirty, forty years.
Speaker 7:There's a reason for that. Partially, it's because there's a tech barrier where r and d is centralized amongst these, petrol giants, and, they don't really wanna release IP. And then the piece of this is cost of capital for startups is so high. You build a factory, probably cost you, you know, $300,000,000 on the low end. We have a revolutionary technology.
Speaker 7:You still gotta bridge through the valley of death. And, you know, for hard tech capital intensive business, you have you have more of them than you typically see in SaaS. So educating them on how to think about risk and them and, you know, meaning Metro Capital is how to think about risk. At what point should you see inflection in value? And what does that actually translate into is is, you know, I would say, is the other half of the battle.
Speaker 1:Yeah. On the IP side, are you like, were you watching for I for patents to expire and then implement them immediately? Are there other ways around these problems? Like, what was the IP landscape at the time? Are there still, like, trade secrets that are just important that you could just focus on maybe reverse engineering or finding a different pathway?
Speaker 1:Like, what what was that like at the at the company at the time?
Speaker 7:I mean, I think, you know, there are it's really interesting. Right? Like, I think patents only get you so far. That's why, you know, if we if we have faith in patents, China wouldn't be where it Sure. Yeah.
Speaker 7:But I think but I think the the key the key is what I I would say if we take a big step back, a lot of the formulation, though, how it still sits with the petro giants, they have a lock in, and they have a lot of resources to continue to be patent trolls. I remember one of the, you know, probably two months in the job, we you know, right about when we were about to close around, one of our competitors sent a system to us that was like, oh, you stole our formulation. And it's like tiny little variants and something was complete bullshit, and they they can still sue you out out of oblivion. Right? But I think we've kinda learned over time to in some ways, you kinda you do have to fight some of the battles similar to what they do.
Speaker 7:You you file all these umbrella patents as general as possible to protect your core IP. And on the other side, you you kind of have a lot of trade secret that's very difficult to duplicate. But at the core, because how different SolarGen's approach is, you're thinking about chemistry and how to scale this. Right? It's a generalized platform that, you know, it makes that that side of it much easier for us to navigate.
Speaker 1:Talked about talk about the transition to Founders Fund. How'd you wind up there? And then I wanna go into some of the deals that you've underwritten and how you think about some of what's going on in the hard tech landscape broadly.
Speaker 7:Yeah. It was similarly, you know, I I I was you know, my my family is in the Bay Area. You don't wanna start a family, and I was thinking about what are the places where I get to work with the smartest people building and investing in the craziest things and still be able to help solve it. And the founders on Transparency was only twice. I I couldn't see myself working in any other VC firm.
Speaker 7:I don't think I fit very well in any other VC firm, and, you know, I'm very grateful that the guys took me under their umbrella.
Speaker 1:So, obviously, you've you've looked at a lot of hard tech companies. At the same time, valuations feel very high. Like, walk me through how you're actually underwriting a growth deal in a somewhat capital intensive business. How is it different than looking at a software company? What are the major pitfalls or landmines that you need to be looking at when you're building an investment thesis?
Speaker 1:And is there anything that's kind of underrated that most companies or VCs might be missing when they're underwriting these hard tech companies in this, like, kind of new era?
Speaker 7:Yeah. Man, it's a it's a broad question you asked, and I think it's it's a hard one to answer because within hard tech and capital intensity, those are two different things. Right?
Speaker 1:Sure.
Speaker 7:Last year, you know, Napa, Mina, I a did a deal deal in in Crusoe, and it's more asset intensive. There's technology involved. But the way we think about something like a Crusoe, which is more of an energy thesis and long term bet on, you know, the infrastructure shifts that's happening in The US, the energy gaps that we see is is quite different than what you typically see in something like a Neuralink or SpaceX. Mhmm. Right?
Speaker 7:Where where where if we take a step back, if you think about what is the technical risk you feel you face. And the question we always ask is, do we need to invent science? Mhmm. And if you do, then that's a very different question. And very transparently, you know, is is in the business of backing revolutionary technologies and companies.
Speaker 7:Right? The end part is important. So how does this science transfer into a company is sometimes missing in those discussions. You see really brilliant technologists building these cool tech, and you realize that, you know, if you believe you need five, six, seven new fields of science to all come together and have that to be true, then then we are probably not the right place to be. Right?
Speaker 7:But then as you kind of progress towards the true, like, growth stage, are we thinking about scale at risk? If so, what are we dealing with? Is it, like, no unknowns or unknown unknowns? And what are what are the different ways of thinking about that? Sometimes when you look at, let's say, a a a new generation technology, a lot of the questions say, look.
Speaker 7:The science is proven. We don't need to invent science. Let's look at what does it take for this to materialize in such a way that we, as investors, transparently can actually generate a return that makes sense in a time frame that makes sense. Right? And a lot of that hinges on, do you have the supply chain ready?
Speaker 7:The the upstream fuel sources, turbine generators, and everything else that's that's associated with building something like a a new generation technology. Can can you do you believe that if you you if you you figure this shit out, can the rest of the supply chain also figure this out with you? And a lot of the time, the answer is no, and that makes it that much harder. And the last thing is I do feel like in most hard tech spaces, founder have a tendency to oversell the technology, and they have a deep founded belief that the moment, you know, the technology is mature, people will come, and that is not true. Mhmm.
Speaker 7:Right? And I think a lot of the questions I think Trey, Peter, Knapp, and others ask on the team is, right, like, how are you gonna sell this thing? Just because you make it doesn't mean people wanna buy it. And I think some of the best investments we made are, you know, in hard tech are the technology companies that doesn't need to invent science. They're making incremental to scale.
Speaker 7:They understand the bottlenecks as a supply chain have a realistic plan to deal with the bottlenecks they see. And then lastly, the market is already there. Right? If you think about SpaceX launch as a market, yes, it's expanded, but they have a really strong anchor to kinda take very to take market share very quickly. So that commercial mindedness on day one is super important.
Speaker 1:Yeah. It's the same thing with Starlink where people are already buying Internet, and then they just switch their provider or or add on a secondary provider. Jordy, do have a question?
Speaker 2:Do you see hard tech as a category becoming something that goes the way of maybe the creator economy was in 2020 where a lot of, you know, maybe there's opportunities, but a lot of investors get so burned that that it that it becomes kind of this flash moment in time? Or is it something that you see the average venture capitalist continuing to invest in consistently over
Speaker 1:the next 10 How skewed is the power law? Because, I mean, if you look at the the history of like dev tools or like databases, it feels like there's like 10 companies that produce venture returns in most of those categories because a bunch of them got out in IPO, much of them hit multi billion valuations. Yeah. It felt less
Speaker 2:Well, I think that Yeah. Like, there was a point in time where people were Yeah. Saying, I'm gonna start investing a lot of money in software as a service. Totally. And then those people, if they were decent investors ten years later, they still said, I'm gonna be a Yep.
Speaker 2:I'm still a software as a service investor. Yep. The question I have is like every VC over the last two years decided, I'm also a hard tech investor. I I Yeah. Rationalizing it by saying, you don't need to be technical to invest in hard tech and Mhmm.
Speaker 2:And there's definitely evidence that that that that can be true. But I'm curious if you think the average venture capitalist even three, four years from now will still be deploying into broadly hard tech.
Speaker 7:You know, history doesn't repeat, it rhymes. I feel like people don't learn and will continue to do that. I think, you know, what what's interesting is we probably see a more I I would say hard tech as a category is probably is a misnomer. I think you'll see more finely parsed views of hard tech. Are you Symbio?
Speaker 7:Are you, you know, biotech pharma? Are you biotech infra? Right? Like, I think that that should that that we we shouldn't look at hard tech as a category in its totality.
Speaker 1:Mhmm.
Speaker 7:Right? I think defense tech historically was grouped in as hard tech if you look at this, you know, ten years ago. Right? Andro was hard tech today. Yep.
Speaker 7:It's its own category.
Speaker 1:Sure.
Speaker 7:And I do feel like people will continue to to to to invest. Right? Like, the the nature of technology is is hard tech, very transparent. All new technology then emerges hard tech, so you'll continue to see that. But the moment that you create one PowerLock company, you'll see your you know, the whole host of siblings and children come out, and then it becomes its own category and people invest in it.
Speaker 7:You'll continue to see this, you know, cycle of life and death. Symbiote was super hot in 2020, 2021, and I feel like that's now a taboo term.
Speaker 1:Mhmm.
Speaker 7:But at the same time, you feel like there's tremendous amount of progress in technology. And I feel like a lot of the company we meet on the AI for science side is pretty much, I would say, the next generation from a fundamental tech perspective addressing what biology can do. Right? You see a lot of funding going into it. But but but to reframe your your question another way, how do you see hard tech generating returns for venture capitalists?
Speaker 7:I think hard tech more than a software is de facto power law. Right? There's there's one SpaceX. That's, you know, 99% of the market. I mean, space is not a market.
Speaker 7:Space in many ways is SpaceX, but there's a lot of different derivatives that open up. You know, today captures most of the mind share for defense, and you see that, you know, in in in other parts of the hard tech ecosystem. There's very few pharma companies, and they're when they're you know, and they're they're they're massive in in comparison. Yeah. And I think the reason why I think this is more defensible than than than software is because, you know, you do have huge amount of capital advantage and cost of capital is a huge advantage here.
Speaker 2:Mhmm.
Speaker 7:When you're a DowDuPonte, you have hundreds of billions of dollars of CapEx on the ground. The marginal cost to produce is so low that there it's very, very hard for incumbent to come in and displace you. And that's why we feel like there there there's fewer power law companies here, but if you bet on the right ones and double down on the right ones, you can create massive venture return.
Speaker 1:Do you have an do you have a take or, like, a postmortem on what happened when venture capitalists went really big into clean tech? I think this was, like, the late two thousands, early Yeah. Twenty tens. My kind of naive take on it was that it was well intentioned based on environmental concerns in many ways, but the category definition was too narrow. And so, they didn't include Tesla as a cleantech company.
Speaker 1:Tesla, obviously, if you had included it in the cleantech bucket, would have been the power law winner and driven massive venture returns. But instead, Tesla was seen as a car company and, as a result, wound up not being included in that. And so all the cleantech funds underperformed just the general software funds. In terms of, like, category definition and just postmortem on the cleantech investment thesis that we went through a decade ago, what's your takeaway from that era?
Speaker 7:Yeah. You know, Gaurav had this really good saying where he was like, know, if you're one step too early or a genius, two steps too early or a martyr Mhmm. Then I feel like Cleantech one point o was the martyr category.
Speaker 1:Mhmm.
Speaker 7:It's kinda like building Dropbox in the nineteen nineties. You didn't have enough, you know, bandwidth wasn't wasn't high enough, Internet wasn't quite a thing. And in Cleantech one point o, the industrial base is not quite there. Right? Polysilicon processing capabilities was not there.
Speaker 7:And and and and and, you know, the utilities had know, the utilities' ability to manage non firm systems' ability is also not there. So there's there's a whole host of factors that that that kind of made the cost structure was not competitive, manufacturing scale up was not there. You need to invent new science to make this work, and you also need to then do sales and marketing to convince consumers as it's actually made sense. Right? And you're also coupling that with selling to utilities, which has capped ROI.
Speaker 7:So fundamentally, a bad customer is with bad setup all around. And and and, Kugent, to your point, like, I think the the the pitch of a narrower definition of which is purely focused on generation technology is also, I think, misplaced. Right? Tesla is not a generation technology. It is a car.
Speaker 7:It's it it you know, it it you group it with car technology that shifts it. And I think if you think about nuclear today, it is clean technology. I mean, yes, we're rebranding it, but nuclear is the cleanest of all technologies.
Speaker 2:Mhmm.
Speaker 7:Right? So I think I think there's this this whole wave of how do we think about how do we think about creating and broadening that definition so that you see where the cleanest the clearest commercial pull is coming from is probably more important than the definition of what the technology is or is not. On the flip side of that too, think the last generation was highly dependent on government subsidy. Then no like, if you look at the underwriting, whether it's from the DOE or others, like, all of them assume a certain level of government subsidy that lasted for decades on end and that just was not going to work. And I think that's important to as we think about investing in hard tech and a lot of these new technologies, when does the subsidy go away?
Speaker 7:At what point are you competitive?
Speaker 1:Yeah. That reminds me of the story of Solyndra, heavily like a picked winner by the government. And it feels like the Solyndra example, in zero to one at least, is kind of like I don't know. I call it like a spreadsheet error. It's like they built their spreadsheet for the economics of that business, and they just missed one variable.
Speaker 1:And it feels like in hard tech, there's a number of companies that are in that category today where it sounds really good in a pitch deck. But once you actually run the economics, if there's one number that's off by some small factor, you wind up with completely upside down economics. And so in terms of underwriting a hard tech company, it's like, how important is it to go through the long term economics? Do you need to bring in experts or run the principles analyses on these companies? I'm just seeing a lot of companies that are like, we're going to do this on the moon or this in space.
Speaker 1:And I'm just like, oh, if launch costs don't fall by 10x like you've assumed, you're completely upside down. That seems like an important part of underwriting, or is that usually less of a factor because you're focused on the growth stage?
Speaker 7:It it's still very important. Right? Like, think when we think about that, the the the question we always debate at founders on is what is how many, like, need to believe do you have
Speaker 1:Sure.
Speaker 7:To make the thesis work? Yep. And if you need to believe you know, if you believe a and b and c by the point, like, this codependency
Speaker 1:Yep.
Speaker 7:You multiply them, you get zero. Right? And I think of this very much as, like, a semiconductor manufacturing process, 7,000 steps. Each step has point 1% yield loss by the end of You get no chips out.
Speaker 1:Mhmm.
Speaker 7:So so it's it's it's similar. Like, do you do you need to believe, you know, to your point, if you let's take, like, some crazy thing like asteroid mining in, you know, Alpha Centauri. Do you believe you need to create, like, nuclear fusion engines, launch costs, you know, robotics?
Speaker 1:Yep.
Speaker 7:And then you're like, maybe I just back all these company and then wait for that to happen. Right? So that's that that that is a very, very important thing. I think the more and statements there is, the worse it is. And very transparent, we don't like to make those bets.
Speaker 7:Right? Like Yep. The the cleanest companies are the ones with one or two of these, and very much it's you're you're you don't need to invent science with very little dependencies. Yep. You know, when we look at a general matter, when you look at or or or others in our portfolio, you do see that you know, on Neuralink even for that matter is you you don't see that many end statements.
Speaker 7:A lot of those have been proven out. And what we need to understand is really, like, at what point like, what do you need to believe for that to scale? And and I think I think to your point on, like, how do we do do due diligence, I mean, yes, I think it's it's the the we do need to understand science. There is a zero one question. Like, do we do we take on binary risk, and where does that exist?
Speaker 1:Yep.
Speaker 5:And then
Speaker 7:there is a you know, going back to founders on fruits, what's the what's our beat on the founder, and how how do we see them in tackling all the risks coming up?
Speaker 1:Yeah. And the execution side. Well, thank you so much for joining. This was a fantastic conversation. We'd love to have you back.
Speaker 1:Enjoy the rest of your day, and thanks for breaking it down for us.
Speaker 2:No. Love how Cam
Speaker 4:Always fun.
Speaker 1:Cheers. Yeah. We'll talk to you soon. Cheers. Bye.
Speaker 1:Let's check out let's check-in on Tyler and the Tyler. Cam.
Speaker 2:He's got the glasses on. You know, that means he's towards final assembly. I'm
Speaker 5:I'm pretty locked in right now.
Speaker 2:Come back
Speaker 5:to me in maybe fifteen, twenty minutes. I'm I'm I'm almost done.
Speaker 1:Okay. Almost done. Almost He's
Speaker 2:cooking.
Speaker 1:That's great.
Speaker 2:He is cooking.
Speaker 1:I think he has another bay maybe hour in the show. It looks like he's making progress. We'll check-in with him at the next break. let me talk to you about Eight Sleep. Get the pod five ultra.
Speaker 1:How did you sleep last night? Jordy, use code TBPN. If you're gonna get one, they're fantastic. Five year warranty. Thirty night risk free trial.
Speaker 1:Risk free returns, free shipping. I got a 91. How'd you do, Jordy?
Speaker 2:I'm sick.
Speaker 1:So Oh. Oh. Excuses. Excuses. Excuses.
Speaker 1:Oh, John beats you one time, and all of a sudden, the excuses come out. What'd you do? What'd you do? Give us the number.
Speaker 2:Sorry. The the Wi Fi is not working.
Speaker 1:Yeah. Okay.
Speaker 2:Anyway The number is horrid. 63.
Speaker 1:Let's hear it for me.
Speaker 2:That's maybe the worst.
Speaker 1:I feel like I I come out strong in the beginning of the week. I usually beat you Monday, Tuesday, but then you catch up and then you just go on a go on a run. Anyway, get in Aidsleep. Go to aidsleep.com/tbpn, and we will bring in our next guest, Garth from Panthalassa, building a very cool technology. I'll let him tell you about how you doing.
Speaker 2:What's going on?
Speaker 11:Hey, guys. It's great to meet
Speaker 1:you. Thanks for having
Speaker 11:on the show. I love the show.
Speaker 1:I'm really excited to have you. I have heard about
Speaker 2:your Wait The background. What's going on here? Is that is that real?
Speaker 11:Yeah. This is real. We're in Portland. It's right on the river.
Speaker 2:Wow. Wow. Beautiful. It almost looks tropical. Yeah.
Speaker 2:Lighting looks.
Speaker 1:Yeah. Yeah. Yeah. Very cool. And you have the plant inside the window, so that adds adds to the ambiance.
Speaker 1:Looking great. Would you mind a quick introduction on you and your and and the company, and then we'll go into it.
Speaker 11:Yeah. Yeah. So company's called Panthalassa. We're based in Portland. About 80 people.
Speaker 11:A lot of people out of places like SpaceX, Blue Origin, Virgin Orbit. It's it's a deep tech company. Loved the conversation with Sean just now.
Speaker 1:Yeah.
Speaker 11:And, you know, the the premise of the company is to go to the middle of the ocean and capture energy there very cheaply. So this was an idea that got started nine years ago. I was at Bridgewater Associates
Speaker 1:Mhmm.
Speaker 11:Doing investment stuff, but before that, I had been doing energy stuff at MIT and and working on a startup for energy. And my cofounder had been also looking at the ocean. And we were saying to ourselves, you know, what if you could find an untapped energy source on the planet Mhmm. Bigger than many of the ones that people have been going for, and and maybe more scalable, maybe lower cost of capture.
Speaker 1:Mhmm.
Speaker 11:So the one that really stuck out to us was the open ocean, far from shore, where there is wind all the time and the wind makes the waves. And so you can be out there capturing, hypothetically, what we thought back then was at a very low cost. And and then you would, you know, use the energy right on-site for things. Mhmm. And so this was sort of of an era before Crusoe, but maybe a similar idea that you go to where the energy is.
Speaker 11:And and we thought that this was really the best place to go, the middle of the ocean. And so, of course of course, you need to develop a tech stack for that, but there's lots of interesting properties there that you can talk about. And and what we thought was that maybe you could build a really simple system. Like, you know, a lot of the stuff that's been done in ocean energy before was, like, pretty complicated and pretty expensive. So we thought that if you could develop a really simple system, then you'd start to get a lot of those a lot of those properties.
Speaker 1:I'm hearing simple and nine years. It sounds like those are some famous last words. You've been grinding on this for a long time. But it sounds like there's there's actually breakthroughs. I you yeah.
Speaker 1:I saw some photos. You've actually built one of these things. Can you explain how big it is, how much energy it captures, what you're deploying, what the rollout schedule is? Because it's been a lot of work to get to where you are today, and I want to hear about, like, where we are before we go into where you're going.
Speaker 11:Yeah. Yeah. I actually think that that length of time is a really important part of any company that's trying to do deep tech.
Speaker 10:Totally.
Speaker 11:You know, you want to stay small and under the radar Yeah. While you're sorting everything out. Right? I think that a mistake that a lot of companies make is that they go to market with their idea or their idea. And so if you can arrange things so that you can throw things out a lot before you settle on a path, because the fact is you are gonna get it wrong.
Speaker 11:You're going to need to iterate. And particularly when you're trying to do something where the cost is the key consideration, or if it's space, maybe it's weight, you wanna give yourself that time. So when I look back on the four years of that, which was really the heavy R and D time, I'm extremely glad that we took that time to hone the technology and get it exactly right. And so by the time we got to year five and six when we were deploying Ocean Systems, we were right on the money in terms of power. You know, we were hitting all of our simulations right away.
Speaker 11:And it comes from the simplicity of the system where what we decided was that you want a system that has no moving parts at all except for one small water turbine. So these systems, we call them nodes, they're about 10 up to 20 meters across at the top, and they go down into the water column about 80 meters, maybe a 100 meters for full scale ones. So so big systems, but pretty small in the scale of things like shipbuilding. So so this is this is sort of the shape of one of them here. It's a you know, and it it sits in the water like this, and it goes up and down with the waves.
Speaker 11:And all of the dynamics are coming from the inertia of water within that system. And as the system goes up and down, it pumps the water into a reservoir, just like a hydroelectric dam. And then from there, it drives a water turbine. So so it's a really simple method of operation. Once you have that, you can simulate it effectively, and it's really easy to mass produce as well.
Speaker 1:You keep saying Yeah. Keep saying simple and I'm looking for your website and it's like the most complicated thing I've ever seen. But I mean, it speaks to it speaks to your background and and and how ambitious this project is. But I keep thinking you're you're really
Speaker 2:This is simple stuff, John.
Speaker 1:Yeah. Yeah. It's simple. Get
Speaker 2:with it.
Speaker 1:Just just just weld and build this massive thing, and there's all this wiring, and we're pulling up your website right now, and it's fantastic. I mean, congratulations. It's amazing. I I I wanna know more about the applications. How much energy are we are we generating with one of these?
Speaker 1:And then and then I wanna go into some of the applications because it feels like you could not have possibly predicted the the the reinforcement learning revolution that's happening right now, the ability to do distributed AI training and where like, it is the perfect time for this thing. And maybe you just made your own luck, but I wanna know about the evolution of the application, the stranded energy thesis, and kind of the, like, the the scale of what we're thinking about doing here.
Speaker 11:Yeah. Yeah. Great. So each one of these systems makes anywhere from 200 kilowatts to a megawatt. Mhmm.
Speaker 11:So you can build anywhere in that scale.
Speaker 1:Got it.
Speaker 11:And, know, when we got going, it it was interesting because, you know, obviously, we're we were jettisoning the cables back to shore and the moorings and all of that stuff. And we said to ourselves, you know, this was back in 2017 or so. What are the applications for which this can be very effective? And we we decided on two platforms. One is computing, and that's the primary and platform.
Speaker 11:And then the other is making synthetic fuels and getting the fuels back to shore. But if you look at our patents and everything back from twenty seventeen, twenty eighteen, you know,
Speaker 10:we have we have a whole
Speaker 11:bunch of them on computing. And, you know, every back then, we were thinking about AI, you know, often in the patents, would call things brain simulation. So we had AI brain simulation, crypto.
Speaker 1:Sure. Probably Bitcoin at a certain point. Crusoe was doing the same thing.
Speaker 11:Yeah. Exactly. And Yeah. You know, I had been at Bridgewater. I've been doing AI stuff with Dave Ferrucci there.
Speaker 11:You
Speaker 2:could see
Speaker 11:even at that time where this was going. You could see it in the exponential growth of energy. You could see it in the growing power of the models even then. You know, this is when AlphaGo was happening. So, you know, you could sort of put two and two together.
Speaker 11:And what we believe, of course, is that, you know, this is going to 100 gigawatt scale, terawatt scale, and there's not that many options on the planet for making that go really fast, at least if you're not doing something like coal in China. So so we are positioning ourselves to be an option that can scale really rapidly, much, much more rapidly than terrestrial infrastructure. Mhmm. And and that's that's really the whole play. We want it to be, you know, more sustainable, more affordable.
Speaker 11:It's it's much cheaper and be able to scale to much larger levels even than, you know, than most terrestrial infrastructure could.
Speaker 1:Got it. So one you said up to one megawatt. Is that right?
Speaker 11:Yeah. Yes. The nominal system might be 400 kilowatts, but you can go larger than that.
Speaker 1:So, like, how how big of a are you thinking, like, it's basically a data center inside? Like, you could put a whole bunch of h two hundreds, maybe get up to, like, a few thousand maybe. Is that roughly correct?
Speaker 11:Yeah. Exactly. Like, a few 100 up to a thousand GPU equivalents.
Speaker 1:And there's enough room in that in that device to actually run. Yeah. I mean, that's amazing. So what what are you what are you tracking in the in the reinforcement learning training market? Is that important because you're at this point where you're actually going to market?
Speaker 1:And will it even like, are there specific decisions that you need to make on the equipment that you load onto these machines? Or are you trying to serve the GPU capacity or data center capacity at, like, a higher level of abstraction?
Speaker 11:Exactly. So those are the of questions about the go to market. But as you identified, there's you know, the the massive push towards test time compute, just tons of long running inference
Speaker 1:Yep.
Speaker 11:Agentic workflows all the time combined with yeah. I mean, we think it's gonna be mostly RL the training side, you know. And, I mean, I'm sure you you had people on last week, and you saw this, I mean, analysis thing drop
Speaker 1:Yep. Yesterday. But,
Speaker 11:yeah, I mean, you could sort of put it together even when you had AlphaGo back in the day
Speaker 1:Mhmm.
Speaker 11:Of, like, you put together LLMs with reinforcement learning, you get very powerful models. Mhmm. So the future is largely about who can deploy the most RL. And then once people really start to use this, you know, we think it's gonna move to all kinds of applications beyond text. You know, this has to move to engineering.
Speaker 11:It has to move to medicine. And you're gonna wanna have agents working together around the clock. Mhmm. So you have long running inference. And and, basically, what this all comes down to is you want the cheapest throughput for tokens.
Speaker 1:Yep.
Speaker 11:And so what we're targeting is the that long tail of very massive horizontal scaling of distributed energy units. And that's what we that's what we think our platform can be.
Speaker 2:How over time, would somebody live on one of these systems? Would they visit it I was
Speaker 1:gonna ask them such
Speaker 2:a We we had Dylan Patel on last week, he said one of the challenges with putting data centers in space is that chips are unreliable. Sometimes you need to, like, plug, you know, basically Yeah. Yeah. A system, plug it back in. It's the
Speaker 1:meme. It's the IT meme.
Speaker 2:You know?
Speaker 1:Plug unplug and plug
Speaker 2:it back Basically, you know, even with cheap energy, the IT work will still be necessary. So I'm I'm I'm wondering Yeah. Is one person gonna be responsible for a number of these systems and they sort of visit them and make sure they're operating efficiently or
Speaker 1:There's probably other solutions to
Speaker 2:Yeah, I can imagine you're building like some type of like gyroscopic tech to kind of keep the system stable when they're you know, shifting up and down.
Speaker 1:Think that doesn't even matter. I
Speaker 5:don't know.
Speaker 2:Yeah. But I'm I'm curious. Yeah.
Speaker 11:It's it's it's really important. So this is part of the tech. So you not only need a way to produce the power on board really simply and cheaply, you also need to be able to drive them around. So these are self propelled systems, and they're self propelled without things like propellers. So they create their own thrust just because of their shape.
Speaker 11:So we've done trials where we're driving these things and figure eights out there, and it's all happening just because of the shape of the system. Wow. And what that allows you to do is now this is sort of like SpaceX boosters coming back. Can deploy the systems relatively close to shore. They work their way out into the resource.
Speaker 11:They hang out for a period of time
Speaker 1:Mhmm.
Speaker 11:Capturing energy. And, you know, maybe it's three years, maybe it's five years. When it's time for a payload swap, they bring themselves back in
Speaker 2:Mhmm.
Speaker 11:And then you swap the payload.
Speaker 1:That's remarkable.
Speaker 2:So you
Speaker 11:can configure that yeah. You can configure the payload swap time for whatever you need to get the numbers, you know, for the meantime between failure on your payloads. Yep. And at the beginning, I'm sure we'll start with the most reliable stuff. And then as we get into worlds of inference ASICs and stuff like that that are, you know, more reliable than the GPUs, then we start deploying those as well.
Speaker 1:Yeah. That makes sense. Are there are there lessons that you're learning from, like, the the Bitcoin ASIC era, like like, other kind of out of the box stranded energy projects. Crusoe was kind of widely known for the I think it was gas beaker plants initially, but obviously, are are very much terrestrial. You can just drive the ATV or the the truck out to them to check on them.
Speaker 1:What what what have you seen or learned from the the more the more creative energy solutions to the Bitcoin ASIC problem?
Speaker 11:Well, I mean, I I think the big theme, of course, is everyone shifting towards AI energy
Speaker 1:Mhmm.
Speaker 11:Just because the the amount of demand that's coming is enormous. Mhmm. Bitcoin is, you know, Bitcoin is always gonna be there as a fallback for anyone who's got very cheap energy. Onboard our systems will have, you know, between 2 and 3¢ per kilowatt hour, probably less in the future. So Yep.
Speaker 11:That's always an option for us. Sure. But but I I think that, you know, as as people look at this, it becomes clear that the the model layer will become more commoditized. I think there's a lot of comparative advantage there for a long time. Chip layer too.
Speaker 11:But the fundamental bottleneck is gonna be who can scale tens of gigawatts per year or even 50 gigawatts per year. You know, that's that's a really hard thing to do in the West. Obviously, we've been doing net zero gigawatts per year for a long time. So if we don't relax that constraint, then you get prices going up. Yeah.
Speaker 11:And that becomes a major impediment to the to the build out.
Speaker 1:I mean, so the device already is massive. If we're adding a gigawatt, you're talking about making a thousand of these. Walk me through the actual manufacturing, how you scale that up to to to go from, you know, kind of one exquisite system to making dozens of these every month to every day. Like, the the the rollout needs to be intense. I'm sure there's a lot that you're learning from from what's going on at SpaceX and how quickly they've made those massive Starship rockets.
Speaker 1:It always surprises me when there's a new one on the pad because I watched it blow up just a few days ago, and they have a new one ready. And it really speaks to their ability to manufacture something at scale, both in terms of speed and just the size. You know? It's it's it it it's one thing when you see the Statue Of Liberty. They built that once.
Speaker 1:But it's a different thing when you see a new Statue of Liberty come off the manufacturing line every single day. What needs to change at your company in terms of process? What are what are the requirements to make big things fast and regularly?
Speaker 11:Yeah. So so this comes back to the design of the system. So it's the system is just this really simple steel shell.
Speaker 1:Okay.
Speaker 11:It's like entirely hollow inside.
Speaker 1:Sure.
Speaker 11:And it's made with mild steel. It's got this axisymmetric shape so that there's a central axis and all of the whole system is built around that central axis. So that allows you to use equipment that lets you make these concentric shapes, put them together, weld them really simply. In a lot of ways, I mean, I keep saying simple, but in a lot of ways, it's actually simpler than a car.
Speaker 1:Oh, interesting. And,
Speaker 11:you know, this just comes back to the design of it. But what we can go and do because it's that way is we can cost all of the CapEx that you need in a factory for these things. We know how many people will be involved. We know how much land it'll take up. Mhmm.
Speaker 11:And so even now, we can say that, look, if we were to go and build a factory of a certain CapEx investment, you know, let's say you built a factory at the scale of a Gigafactory in terms of cost, how many gigawatts would that spit out? And for example, we know that if we built factories with the amount of CapEx that Tesla has put into Gigafactories, we'd be spitting out 20 gigawatts a year of capacity.
Speaker 2:Wow. Yeah.
Speaker 11:So the the manufacturing story is really nice. These are still small enough to, like, mass produce. It's not shipbuilding.
Speaker 2:Yeah.
Speaker 11:And it's not people crawling all over them. It's things that you can, to a large extent, automate. So we're actually building our pilot line here in the Pacific Northwest. Mhmm. Parts of it will be operational in January, and the whole thing should be operational later in the spring.
Speaker 11:And then once that's going, then we can really start to to carbon copy that elsewhere.
Speaker 1:Yeah. It
Speaker 2:looks and feels so sci sci like it's out of a science fiction book.
Speaker 1:It really it really does. It's extremely sci fi. How do you actually make these shells? Tesla has the Giga Press or something like that that can form aluminum or stainless steel into a particular shape. Once you get so big, I don't even know.
Speaker 1:Is there a bigger machine that just kind of will stamp these things together? Do they have to be bent or rolled out of some sort of is it is it a mold? I don't even know how it gets made.
Speaker 11:Yeah. Yeah. It so so if you're using mild steel, the key thing is to keep the surfaces single curvature as much as possible. So you get to use just like plate rolls. And Okay.
Speaker 11:Basically, they're like big pasta rolls that make, you know, cylindrical shapes and then conical shapes.
Speaker 6:Yeah.
Speaker 11:And and that's just, you know, it's it's just some metal rolls, and you push the metal through and it comes out in the right shape, then you can put that into your jig or put that into your, what's called a growing line configuration, that that lets you align them, and then you use an automated welding head to weld them. So so luckily, a lot of this stuff has been developed. It's it's pretty well understood. They use it for, like, wind turbine monopiles. They use it for other axisymmetric shapes like that.
Speaker 11:So we get to piggyback you know, sort of piggyback on a lot of
Speaker 1:the Oh, that makes sense. Yeah. It does kind of have the same shape as, one of those massive wind turbines. Yeah. The the the huge windmills that you see.
Speaker 1:I mean, it it's a fantastic project. It's so fascinating to be working in this industry. I'm sure tons of lessons learned and a lot more good stuff in the future. But thank you so much for stopping by. This is fantastic.
Speaker 1:Yeah.
Speaker 2:We're gonna our our power demands are Immense. Pretty pretty immense.
Speaker 1:We're gonna need
Speaker 2:expect You're doing a lot of reinforcement us to fill out the form on the site to to get one of these ASAP.
Speaker 11:Yeah. Awesome. Awesome. Well, we'll we'll come back on when we're when we're kicking out those nodes from this from this factory here.
Speaker 1:I can't believe Thank you so much.
Speaker 2:Awesome. Well, thanks for joining, Garth. Have a great one.
Speaker 1:You too. We have our next guest coming Yeah. It's a wild project.
Speaker 2:The imagery of seeing people like, you know, just climbing on top of it is is You don't really realize the scale.
Speaker 1:It's simple. It's simple. It's just it's a small little thing. Really downplaying the size
Speaker 2:of Just downplaying.
Speaker 1:Just It's massive. I love it. Anyway, if you're heading to Antarctica or, you know, anywhere else to travel the world, go take advantage of some low cost energy across the globe, book a wander.
Speaker 2:Find your Your happy place.
Speaker 1:Find your
Speaker 2:Find your happy place.
Speaker 4:Book a wander.
Speaker 2:Even the golden retrievers joined in.
Speaker 1:It's fantastic. Hotel grade amenities, dreamy beds, top tier cleaning, twenty four seven concierge service. It's vacation home, but better, folks. Use code TBPN when you sign up.
Speaker 2:Do it.
Speaker 1:Our next guest is coming in to the studio from Divergent three d talking about manufacturing plants. They have a very cool partnership with Palantir, and I wanted to talk to Lucas. So welcome to the studio. How are you doing?
Speaker 9:Doing great. How are you, gentlemen?
Speaker 1:We're great.
Speaker 2:What's going on? What do we have, in front of us?
Speaker 9:So you're looking at the airframe for an autonomous aircraft system. So about a six foot long, fully autonomous, three d printed structure. And if you look in the tail and on the inside, you see, a little bit about divergent, which is full functional integration of these air frames to make them faster, better, and cheaper.
Speaker 1:Wow. Okay.
Speaker 2:It looks very cool. And the background is obviously green screen. Right?
Speaker 9:That is our factory. That is Torrance, Los Angeles for you. So Wow. One of four buildings on this campus. This is where we manufacture at volume for aerospace and defense and the auto industry.
Speaker 1:Very, very cool. Awesome. Yeah. What what who are some of your customers? I know you have a partnership with Palantir now.
Speaker 1:Can you explain kind of the business in in in kind of basic terms, and then we'll kinda work through it?
Speaker 9:Yeah. Absolutely. Customers are really OEMs, so really top automakers like Ferrari, McLaren, Bugatti. And then primary focus is aerospace and defense, which are really all the large primes. Yeah.
Speaker 9:Lockheed Martin, Raytheon, General Atomics, and others, and the smaller up and comers and the larger up and comers like, the Andros of the world and Castilians are are also, customers of Divergent. And what we have built over the last decade is a ground up platform for engineering and manufacturing. So I wanna be very clear. This was a deep tech start up. It required over a billion dollars to build, the system.
Speaker 9:We've got over 750 patents on it. Not just, a quick manufacture and play roll up strategy. This is really about creating a design differentiation in terms of how quickly you can create performant CAD.
Speaker 1:Yep. Let's call
Speaker 9:it an airframe, the CAD for an airframe. Can you do that in a week instead of a year and a half? And then how do you manufacture what you've created? And we've created both the source code for that design engine, and then we've created a manufacturing process that stitches together our own version of added manufacturing, three d metal printing, and robotic fixtureless assembly, which allows us to do something, extraordinary, which is have a factory which is product agnostic. So you're looking at a installed factory base that can go from making an airframe for a Lockheed Martin to a large unmanned aircraft system for Raytheon to a production vehicle chassis for Ferrari back to back to back with no hardware change whatsoever.
Speaker 9:And that is a new principle. That is a new reality where you are combining cost productivity of mass manufacturing, industrial manufacturing with the flexibility of what was thought of as fast prototyping. Really taking those two principles into one system, best a divergent system. We've now scaled to over 18, contracts, really all heading towards programs of record. And to be clear, we're not a prime ourselves.
Speaker 9:We are a subcontractor to these primes. What we are building is the manufacturing layer and the engineering layer that all of these programs really require to hit the scale that The US needs to compete with our adversaries and to create the deterrence that we need in terms of our inventories and our capabilities.
Speaker 1:Yeah. We talked to a couple of people about this this transition from additive manufacturing from a test environment to actual production. Does that mean that, like, traditional subtractive manufacturing doesn't play a role in the parts or airframes that you design? Or do you work with other subcontractors to bring in more traditional workflows to augment what you're actually making so that you're just kind of using the right tool for the job at any moment? Or or is there some benefit to being like a pure play in in additive manufacturing?
Speaker 9:Yeah. I'd say that the realities of additive manufacturing cost have changed dramatically. When we started eight years ago, you were not cost productive in the additive space. Today, we're actually cheaper than the caster machine alternative. So, yes, you're able to make these very advanced geometries, but you're actually coming in at a dollar per kilogram point that is more affordable for the prime, the taxpayer, the government, than the traditional alternative.
Speaker 9:Where we see the most value is when we can take design authority for the entire, say, end to end missile structure, start with the requirements, what is the CFD, what are the load cases, where are the hard points to the other subsystems, and then engineer that from scratch. That's where we can use high performance computing, generative design, and essentially optimize across all variables in one cohesive full design package. And that then becomes a 100% additive structure that is assembled with that robotic system. Are there other systems that end up in these vehicles? Yes.
Speaker 9:But you're talking electronics. You're talking the payload itself. You're talking about the turbojet or the propulsion source. Typically, when we're looking at structure, we're a 100% additive, and we're able to outperform anything that would be cast or machined from a performance standpoint, say 30% lighter while meeting requirements. But more importantly, in a lot of cases, 30% cheaper while being able to make a thousand or 10,000 per year.
Speaker 9:To give you some context, one of our three d printers can manufacture about 400 large scale munition casings per year. Wow. So imagine a 100 printers running, you're able to do 40,000 munitions per year. And a 100 printers running is not a unrealistic installed base. We're running tens of machines already today, and that is what the US government also sees as critical for The US.
Speaker 9:Can we create a civil reserve manufacturing network, a connected set of next generation facilities that can create these munitions at volume. Mhmm. Because to cut it very, very clear, you look at our legacy programs like Tomahawk, JASSM, they're not able to hit the rates that are required by our war fighters, by our leaders, by individuals like admiral Caparra who are closest to the problem. And why are they not able to hit those rates? Partially, because they cannot get the structure.
Speaker 9:They cannot get the castings at the volumes required, at the quality point, at the geometry that's required. We come in, and we solve that in a very dramatic way.
Speaker 1:Can you talk to me about some of the the history and kind of developmental breakthroughs in additive manufacturing? I'm sure there's some stuff that's happened just in the industry broadly, maybe even academic papers or different pieces of the supply chain that have kind of unlocked what you're doing and allowed it to scale. Stuff like what's going on in the alloy space and or deeper in the supply chain with parts that go into machines or machines that you're able to buy now. Give me kind of the lay of the land because it feels like we're in a kind of Moore's Law moment for this particular technology. You've obviously built a huge business around it, but what else is driving that upstream?
Speaker 9:Oh, absolutely. Additive manufacturing is no secret now that it's gonna be supporting the structures in our programs of record. And a decade ago, it was thought of more as an r and technology.
Speaker 1:So the
Speaker 9:the industry has moved with us on that. At the same time, Divergent is very differentiated in the cost productivity. We built our own three d printer. So we use our own machine. We built our own materials.
Speaker 9:So aluminum alloys, the refractory alloys that we print with, those are designed by our material scientists. The machine is designed by our engineers, and we actually integrate that machine in house. So we build it in house with a US based supply chain. That machine is 10 x the cost productivity of its nearest peer. So even though the industry has moved forward as well, Divergent has led a lot of that movement forward, and now it is printing on a machine that is able to be three x the rate while being a of the cost, so a 10 x improvement to its near peer.
Speaker 9:In terms of talking about some of the advancements, when we started, we were printing on single laser systems. So you're talking about powder bed fusion. You've got a powdered metallic on the bottom of the build chamber, got a laser overhead. You're gonna melt one layer at a time of this part and build it like a layer cake. We're now at a 12 laser system, so we've gone from one laser to 12.
Speaker 9:We're under one kilowatt, per laser. Now we're north of two and a half kilowatts per laser. So the amount of energy in this system Yeah. The size of the build chamber, the layer height, the speed of our recoating, the speed of our gas flow across that chamber, our automated build plate loading and unloading has essentially multiplied the rate by more than 20 x over the last eight years. You
Speaker 2:guys, developed your own hypercar. What what would be the right time for us to start exploring, developing a TPP and hypercar given that you've just went through the process yourself?
Speaker 9:You know, if you have a dream and and you've got the capital, pick up the phone, call us, and and we can help with it. That that's what I'll say. But Zinger Vehicles, in in a more serious note, really, that was about creating a product to create the ultimate tools. And then we created a business out of it. But early on, we said if we're gonna make the best design software, the best materials, the best three d printer, a real assembly system, You have to create a product, and you have to test that product tens, if not hundreds of times.
Speaker 9:And how else are you gonna do that? You're not gonna do that with a customer. You're not gonna get your iteration. You're not gonna get the feedback loop fast enough. We had to print thousands of parts and essentially get it wrong for our two, three years before we really started to get it right.
Speaker 9:And then Zynger gave us the systems engineering knowledge, the road data, the branding ability of our own product Mhmm. Taught us about heat exchange, taught us about propulsion. We developed that v eight engine from scratch. We print a lot of that v eight engine, California carbon emissions compliant, fully crash certified. That vehicle is tremendous feedback into divergent tools.
Speaker 9:And now in its own right, it's become a brand. It's the only vertically integrated hypercar OEM in America, and we just delivered our handful of cars. They're the fastest road legal car in the world now, and there's a reason for that. It's because it's built on a new technology. It is a different chassis that is in that vehicle than any other vehicle on the road.
Speaker 2:Did you get any angry calls from some of your customers for just absolutely mocking them? Right. It's like, hey. We've been doing this for coming up on a hundred years. And We're like,
Speaker 1:the the asset We're
Speaker 2:excited to be a customer, but, like, we would appreciate if you didn't just outperform us on every possible level and do it with a fraction of the budget and the talent and the time.
Speaker 9:Hey. It it's motivation. Right? You take that car to the track and you know who you're running against. The engineers are there, and they see that.
Speaker 9:And then they go to their executives, and they say, we gotta use divergent to engineer the chassis and manufacture the parts. We gotta do it or we're not gonna be competitive. Yep. And at the same time, we we love competition and so do they. You know?
Speaker 9:Our chief commercial officer, George Biggs, used to be the the head of sales and marketing at McLaren. Right? So people are clearly betting on Zinger vehicles as the up and comer in the hypercar space that can truly become the performance car company in The US. But to us, competition's a good thing. We're not shy about it.
Speaker 9:We like to show our customers what can be done. And even if they are you know, see the competition in it, at the end of the day, they wanna make the best product. And if you're giving them the best pricing and the best ability to make that great product, they're gonna wanna be your customer.
Speaker 2:You guys might be the most real hard tech company of all time. Not not, like, you're being like, oh, we we simultaneously are working with like some of the biggest most important companies in the world from luxury automotive to defense. And then we also on the side for fun and to just Made a real car. We made a real hyper car That actually car. That you can actually drive Yes.
Speaker 1:Can buy it.
Speaker 2:And take on the track. That's really Yeah. The the car itself looks like it's just like a concept car. It's it's the kind of thing that other manufacturers will put out as a concept car and then fans will see, and they'll be like, well, this thing's never gonna exist, so I'm not even gonna be that excited about it.
Speaker 1:I clearly, a no render respecter.
Speaker 2:Yeah.
Speaker 1:Just Yeah. We're we're gonna make No. It it's a it's a
Speaker 9:tremendous design, and the truth of that vehicle is it represents those 750 patents. Yep. Everything about it, the way it's packaged, the way it's engineered, its power density, its seating layout, its aero philosophy, all those differences come from the technology it utilizes, as well.
Speaker 1:That's amazing. Amazing. Thank you so much for coming on. We would love to have you back. We can go way deeper here.
Speaker 2:This is great. To be clear, we've got a lot of space in the studio. If you wanna park one of those cars
Speaker 1:If you need a parking spot, we're
Speaker 2:gonna be happy It's gated. We got security. It'll be safe. We're happy to keep it here
Speaker 1:you so much for helping me, Lucas. This was fantastic. Cheers. You soon. Bye.
Speaker 1:Really quickly, what do you what do you need if you got a hypercar? You need a watch? Go to getbezel.com. Your bezel concierge is available to source any watch on the planet.
Speaker 2:Their next challenge Yes. Make a watch that's
Speaker 1:so significant. With 75 complications.
Speaker 2:We'll accept it.
Speaker 1:I wanna see it. Next up, we have Christian from Astronus coming in the studio. Welcome to the stream, Christian. You're technically your appearance appearance because he was in the background.
Speaker 2:Gonna hit the gong. I'm gonna hit the gong for Christian just because I like you.
Speaker 1:Hit the gong. Welcome to the show.
Speaker 4:Look at that. There we go.
Speaker 1:It's a great game right there.
Speaker 4:The top down shot of the gong is absolutely it's just like like top notch guys.
Speaker 1:1% better every day. Your camera looks fantastic. The lighting looks fantastic. It's very cinematic. Same.
Speaker 4:It's a courtesy of Carmen.
Speaker 1:Yes. The guy
Speaker 9:could set up
Speaker 4:the original Astronus marketing team,
Speaker 12:got us
Speaker 1:all hooked up Same.
Speaker 4:Got us the right gear Yep. Set us on the right path.
Speaker 1:Yeah. It's great.
Speaker 2:And the green the green screen that, you know, AI generated background.
Speaker 1:Yeah. It's really amazing. Top notch.
Speaker 4:This is actually so this is gonna be YC demo day. So they're setting up right now.
Speaker 1:Okay. We're
Speaker 4:like, our main area, they're gonna put YC because they're right across the street, you know.
Speaker 1:Oh,
Speaker 4:very But the the demo day is gonna be like right back there. Really? Set up all day yesterday.
Speaker 1:We'll we'll we'll see on Wednesday. Be there.
Speaker 2:Oh, nice. Yeah. Wednesday.
Speaker 1:Yeah. Yeah. So, I mean, we have a lot to talk about. We would love to just get the the the intro and update from you, and then I wanna go into the the where we are on the relentless march to create the ultimate hard tech Vibrio at some point. But give me the little update on your side.
Speaker 1:How are things going?
Speaker 4:Yeah. Things are going really good. It's exciting time for Astronis. So we build small satellites for high orbits Mhmm. And it seems like the rest of the world is sort of catching on to this Yeah.
Speaker 4:Being a thing. We've been trucking away for ten years at this idea. And over those ten years, you know, we've built a big commercial business. We Mhmm. Launched four satellites at the end of last year.
Speaker 4:Those are getting close, really close to their slot to actually start providing service Yeah. All over the world. We have five more that are in the factory. Mhmm. But then the big I mean, the real big update, we have a bunch of government contracts that are really starting to take real flight.
Speaker 4:So it's everything from just normal communications for the government mission, you know, like, same thing out in geostationary orbit dedicated to one spot on Earth. Mhmm. But then also, have this new mission, which is resilient GPS, which is super cool. I think John talked about that last time he was on just saying, you know, we wanna take GPS, break it apart into many smaller satellites to make it more resilient and less able for adversaries to take it down or jam us.
Speaker 1:Yeah. Because there's a ton of GPS denial and jamming that's going on all over the world now since, unfortunately, there seems to be a battlefield on every continent at this point. But that's very exciting. Talk to me about startup Vibrials. What's been interesting to you?
Speaker 1:What's been your favorite
Speaker 2:Are we in the post Vibriel era?
Speaker 4:Have we peaked? Yeah. We might be, man.
Speaker 1:We might be. Peaked? Yeah. I really like the one from Sublime was cool. I thought that they did, like, when, like, the solar punk vibe felt very different.
Speaker 1:But what what are you seeing? What do like in these days?
Speaker 4:Yeah. It's really interesting because you see these companies that have not raised very much money at all putting, like, presumably, like, tens or hundreds of thousands of dollars into a a Vibrio to announce them. Like, I don't I don't dislike mean, I kinda love it, But at the same time We
Speaker 1:would never do something like that. Launching a Vibrio early in our that's ridiculous.
Speaker 2:Credit for the the the Vibrio cost us, like, $2,000. Exactly. Okay.
Speaker 4:So this is this is exactly my point. The you can tell when you look at some of these vibe reels how much money they cost to produce. Totally. And you can tell they weren't done in house. And I think that makes a big difference.
Speaker 4:Like, if you're a company that's doing your own comps, like, guys are just like, whatever, rent renting a car. That was probably your biggest expense. I don't know. Yep. Then you make it yourself, like an internal thing, totally different vibe than, like, we hired a company.
Speaker 4:We paid hundreds of thousands of dollars because we wanna impress you. Like, you can just kind of feel that coming off of the screen when it's not made in house, not organic. Yep. And that's that's more what I object to than the, like, you know, just making things look nice. There's nothing wrong with making things look nice as long as you're doing it authentically and you're doing it yourself.
Speaker 1:So best practices for vibe reels for hard tech companies. Give me what is innovative right now?
Speaker 4:So I think that so what we are shifting to is just more authenticity, more showing, less telling. Mhmm. So we are building we just launched a new Astronis manufacturing channel. It's pretty sick, actually. Basically, instead of it being, like, you know, two dudes yapping away and just, like, talking about how great their company is, which is, like, the majority of startup coms these days, and, you know, the founder sits down in the chair and it's, like, the big dramatic opening shout.
Speaker 4:Like, you have that's one end of the spectrum. Yep. On the other end of the spectrum is an hour long video of just cutting metal. Yeah. And that's what we're trying to do with our Astronis manufacturing channel.
Speaker 4:So we just we've launched like two or three videos, long form videos and a bunch of shorts that are more vibey and like get people into the channel. And it's going really well. It's pretty sweet. We're getting, you know, tens of thousands of views on those videos on a brand new clean channel
Speaker 6:That's great.
Speaker 4:Which is exactly what you wanna see, get some good traction.
Speaker 1:Totally.
Speaker 4:But I
Speaker 2:think I
Speaker 13:do think that we're sort of
Speaker 4:like beyond the, like, talking talking head, like, wouldn't like, oh, wow. Look. The CEO is gonna talk to like, I don't know. That's not that exciting
Speaker 1:anymore. Yeah. Yeah. Yeah. I mean, there's a lot of companies that will, like, open source software packages.
Speaker 1:But there's something that's almost higher leverage about just hey, we have this engineer who really understands how to use this one machine. Let's just put out a video of them talking about best practices for this. It's going to be super niche. That community
Speaker 2:is gonna love talent stuff.
Speaker 1:And from a talent's perspective. Exactly. Yeah. Yeah. Yeah.
Speaker 1:Yeah. That that's very exciting. Jordy, anything? Because I wanna know what what
Speaker 4:Well, I will say on the on this topic, we just had an event here yesterday or Saturday. Yeah. That was pretty sweet. We had a bunch of manufacturing people from San Francisco all come to the office and, like, meet in person. From, like, a talent perspective, yeah, like, selfishly, we had a lot of really amazing machinists and manufacturing engineers and stuff, like, come check us out.
Speaker 4:But really, it was just to, like, build a community of these folks in San Francisco. Mhmm. So, I mean, people often astronauts say, like, don't even believe me when I say that we're building satellites in San Francisco. They're like they're like, okay. But, yeah, but, where do you build them?
Speaker 4:Like Yeah. Like, where do you actually, like, like, no. It's, literally down the hall from where I'm sitting right now is where we build our satellites. But Yeah. You know, it's cool to get that community together of San Francisco people.
Speaker 4:There is manufacturing in San Francisco.
Speaker 1:It is crazy.
Speaker 2:Yeah. What are you expecting on the hard tech side from this year's YC batch? I'm sure you've had a little bit of a of a preview. We're headed over there tomorrow for demo day on Wednesday.
Speaker 4:No. It's gonna be sweet. I mean, I think that Kugen, didn't you tweet this last time? You were like, out is uber for eggs and in is like andoril for dog walking or something. Yeah.
Speaker 1:Out is is, yeah, uber for dog walking. In is andoril for dog walking.
Speaker 4:Yeah. Unbelievable. Precision guided dog walking. Yes.
Speaker 7:Yeah. It's a Well, you you
Speaker 1:know what's funny is that we talked to somebody about humanoid robots on the stream earlier this week. And he was like, oh, well, like, in manufacturing context, it's a lot better to just have purpose built road rod. Or maybe you want wheels because you're in a factory and you have smooth floors, so you'll just do wheels. And the one example he gave of a really strong use case for humanoids was dog walking.
Speaker 4:Here we go. Here we go.
Speaker 2:I don't know.
Speaker 4:What do want to say? Dog gonna think if it's not a human walking it?
Speaker 1:I don't know. Yeah. Yeah. That seems like the one thing you don't wanna outsource in your life is, like, the couple Yeah.
Speaker 10:For real.
Speaker 1:You know, twenty minutes you get to walk your dog and just, like, enjoy a
Speaker 4:is an a humanoid robot for like patting your child on the back as they're going to sleep.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 2:Yeah. I remember last demo day, people were trying to I mean, this this was at a period, I feel like about a year ago, it became popular to kind of dunk on YC.
Speaker 1:Oh, totally.
Speaker 2:It's always been people take cheap shots at them all the time. But there were some people critiquing a bunch of YC founders for doing deep tech stuff.
Speaker 1:Oh,
Speaker 2:yeah. And it's like, shouldn't isn't that is that not like amazing? Right?
Speaker 1:Like Yeah.
Speaker 2:Do we
Speaker 1:not Also, I mean, that
Speaker 4:means it's like wrong Why
Speaker 7:is it so damned
Speaker 1:if they
Speaker 4:do damned if they don't?
Speaker 13:You know
Speaker 4:what I mean? Like, they're getting criticized for doing just SaaS and they're getting criticized. Now, they moved to like defense tech and then hard and whatever. I mean, that's ultimately what they think is best and that's like the right call. But I mean, as far as we went through YC like, however many years, like eight, nine years ago.
Speaker 4:At this time, there was like Yeah. Basically no hard tech in the batch except like we were the I think we're actually really one of the batches. It was us, It was boom. It was relativity space all in the same Yeah.
Speaker 1:That's crazy.
Speaker 4:And so, like, that was the real, like, hard tech y c foothold. Then nowadays, of course, it's like, if you look at their list of requests for startups, it's like 50 to 75% of entire list is just hard tech, like, know, defense tech, that sort of thing.
Speaker 2:Reactions to WWDC. Are you gonna be multitasking on an iPad? Mhmm. Do you care at all?
Speaker 4:No. I the I don't even did they actually release the, like, Clear Bubble thing that everyone's complaining about already? Or is it like Yeah.
Speaker 2:Basically made it they they they made they've launched a feature that's effectively like what you could jailbreak your original iPhone to do where a lot of the functionality is effectively, and the UI is like see through over a background.
Speaker 1:So
Speaker 2:you can put I
Speaker 4:don't I'm not tracking it. I don't really care.
Speaker 2:Bullish. Bullish. Yeah.
Speaker 4:Holy man.
Speaker 1:What are you guys using for expense management these days?
Speaker 4:What a question. So we actually recently switched to ramp.
Speaker 2:Let's go. Let's go.
Speaker 1:I love that.
Speaker 2:Wow. You put on
Speaker 4:the So I'm I'm switching over finance right now. That's one of my jobs.
Speaker 1:You are.
Speaker 10:It's a
Speaker 4:I you know, when when I got in there, there was a different
Speaker 2:That's when we partner with Ramp, we only got one hat. He said, you gotta work for the hat,
Speaker 1:you know? Yeah. Yeah.
Speaker 2:So Yeah.
Speaker 7:At least
Speaker 4:you got the jackets though.
Speaker 5:Want I want the want one those
Speaker 2:The jackets coming. We'll we'll bring these up we'll bring these up to the bay. We're gonna have a bunch of them. We have 412 hats. They're gonna go Really?
Speaker 1:Shit. They're gonna go quick. Precise or anything.
Speaker 2:It's limited. But you got one with your name on it.
Speaker 13:Hell, yeah. Anyway.
Speaker 1:Well, this was fantastic. Thanks so much for hopping on. We will talk to you soon.
Speaker 2:Absolutely. Christian. Thanks for coming on. Bye. Good to see you.
Speaker 1:Our next guest is already here in the TVP on Ultradrome. We have Vlad from in physical. Am I pronouncing that correctly? I'm probably pronouncing it wrong, but we'll hear it from him directly. Welcome to the stream.
Speaker 1:Vlad, how are you doing?
Speaker 2:What's going on?
Speaker 6:Great. How are you guys?
Speaker 1:How do you pronounce it? The name. The name.
Speaker 14:The name, Vlad, or in physical?
Speaker 1:Or or In the oh, it's in physical. Okay.
Speaker 2:Great. Physical.
Speaker 1:Give us the intro. What are you guys doing? What are you working on?
Speaker 14:It's not the easiest name. It's it's definitely everyone has asked me how to pronounce it, and and I've heard so many pronunciations and and ways of spelling it. But what we do is we're an open source secrets management platform. So we help developers manage secrets across their infrastructure. And so what secrets are, it's all types of sensitive credentials that basically connect the systems together and, get the run software under the hood and no one else realizes that.
Speaker 2:Very cool. You have to brute you have to work work on You have to become so successful that people are forced to figure out how to pronounce the name. Right? It's always Okay. It's always a it's always a challenge.
Speaker 2:And then once, you know, once you hit that $100,000,000 run rate, everybody will will have a good sense of But Yeah. But yeah. Talk give give us a backstory. I know you you announced a $60,000,000 series a from Elad Gil on Friday. Very exciting.
Speaker 2:Not not an easy guy to to get on board. But break down maybe the history of the company and and getting to that point.
Speaker 14:Yeah. No. Absolutely. We started in a very open source manner. Right?
Speaker 14:We launched in physical open source project on Reddit, that's pretty much how it got viral, and that's how it got lots and lots of developers on board. And that's pretty much how it kept running afterwards. And it you know, like, at it was a lot of developers, and it started transitioning to a lot of enterprises and very large customers and folks like LG or AI companies like Hugging Face that are using us. We went through the YC batch, so this is kinda, like, the stage of the company. This was around two years ago at this point.
Speaker 10:So Mhmm.
Speaker 14:So much has happened ever since. And, yeah, since then, I've been focusing a lot on trust, a lot on security, a lot on helping companies figuring out how to make it simple and straightforward. Yeah.
Speaker 1:Can you give me a sense of the shape of the problem? Maybe some anonymized or non anonymized horror stories. How bad can this go when it goes wrong?
Speaker 11:I I mean, it's it's it could
Speaker 14:be terrible. Actually, most of the over 50% of all the security breaches that happen these days is because of mishandled credentials or some kind of identity issue that was either hardcoded or accidentally leaked by one of the developers or, you know, there there could be lots and lots and lots of different things. So a lot of the, you know, news articles that you see on on different media, whether it's the Crunch or or or whatever, right, a lot of them happen because of secrets management. And the practices that a lot of organizations have, you know, they they are trying, and a lot of organizations are trying to figure it out. The problem is that the tooling out there is so complex to figure out, and the infrastructure of these organizations is also so complex that they can't really do this.
Speaker 14:And and this is how they use it physical. And so the the main benefits of this is security, but also reliability. Because it's kinda, like, hard to realize this, but secrets basically connect all the different services and databases and and infrastructure and engineers together. So if you are not able to access secret even for, like, a it could have lots and lots and lots of bad implications because then you're not able your users are not not able to use your products and software and so on.
Speaker 1:Yeah. It's such an interesting place to sit because I can imagine a bunch of knock on effects from being that deeply integrated into, like, the DevTools Are you thinking about that stuff already? Do you have an idea of where this goes or what adjacent products might look like? Is it unreasonable to comp the business to like 1Password right now in terms of like business model and kind of shape of the product?
Speaker 14:Not quite. So one password is very much kinda like personal passwords
Speaker 3:and Yeah.
Speaker 14:Of course. Very well. Yeah. And kinda, like, very kinda, like, user driven. What does is we power all the infrastructure, basically.
Speaker 14:So every that's related to software and infrastructure layer. So it's indeed a very interesting base because we have to integrate with all the infrastructure tools. Right? One password is very much a lot about kinda like the browser extension. Right?
Speaker 1:Oh, yeah. It doesn't need yeah. They don't need to actually integrate with, like, Google, for example, but you do.
Speaker 14:Like, we have to integrate with all the cloud
Speaker 1:providers. I'm sure.
Speaker 14:We have GCP, even, like, Vercel or Yep. Railway or whatever. Right? But also all the different version control systems like GitHub and and so on, all the CICD systems. So, basically, all of the infrastructure components that developers are using.
Speaker 14:Mhmm. Because, otherwise, if we can't integrate even with at least a single tool, then it doesn't provide the full value. Mhmm. So that's where a lot of complexity or what of what Inphysical does grows. And and, yeah, and really kinda like what we're doing is we're building out a single platform for enterprises to manage access, to manage secrets, to manage all the sensitive information in one place and provision access controls, authentication to all of those services.
Speaker 1:Talk to me about the the open source versus, obviously, your for profit company, at least I think so if you're raising 60,000,000. You never know these days. Like
Speaker 2:You don't know. You don't know.
Speaker 1:It used to be a given if you went through YC. But then one of the biggest companies of all time became a nonprofit. But but what is it like, and what is that like like, give me the deeper level of that of that sales motion. Is it just marketing? Is there a clear kind of upgrade path?
Speaker 1:Who are the best in class? I always go to Red Hat Linux did really well, but that was a different thing because they were the company was built after Linux was already created. They didn't create it themselves. Then you have a stable diffusion as a company, and there's a whole bunch of others. Like Databricks has taken an open source product and then moved it so far forward that they have a differentiated product to offer, and they make a ton of money.
Speaker 1:Talk to me about, like, the open source business landscape, the the pitfalls, like, how how it works, like, what what your strategy
Speaker 14:It's super interesting question because a lot of open source business are very different. So a lot of business like Databricks, they basically take existing projects and then build things around them.
Speaker 1:Yes.
Speaker 14:And critical is, in this sense, much more similar to folks like GitLab, right, where we're actually building out and we are the owners of the open source project.
Speaker 1:Mhmm.
Speaker 14:And really kinda like what the open source project is about is we want to make sure that any developer and and this is very interesting for the for the a lot of open source businesses. Right? It's that you kinda, like, have to target the enterprise components. Right? But you also have to make sure that every developer and, like, a very long tail of developers, not even from enterprise, but also students and and indie developers and, you know, for weekend projects, they're able to use your tool.
Speaker 14:Right? And and they're able to benefit from it, and they are able able to do lots of their own tasks with it. And so this is kinda like a fine balance that you have to navigate. And so how physical works is that all of the features that are needed by developers, they're available under MIT license. Right?
Speaker 14:So arguably the the most free license out there. And so they can use it for any purposes. They can reuse it. They can fork it. They can they can do whatever they want.
Speaker 14:The features that are actually monetizable, they are features that are primarily needed by large enterprises. Right? So it's all the different managerial functionality, different kinda like a more much more advanced functionality when your team consists of thousands or or tens of thousands of developers. Right? And then you you actually have the problems that you're facing are very, very different.
Speaker 14:And and Yeah. Then you can use you can start within physical open source, but a lot of organizations end up transitioning to physical enterprise.
Speaker 2:Yeah. I have to ask because I'm sure people asked it during your series a process, but is there an AI story here? I on your web on your website, you're you mentioned AI, I think, twice. Mhmm. One, with a feature that maybe is AI powered.
Speaker 2:Two, with Hugging Face, which is obviously a customer. So Yeah. I just ask because, you know, it's interesting. My my a lot of my kind of immediate thoughts around what you're building around, like, why build this now? Mhmm.
Speaker 2:Oftentimes, there's great things to be built that nobody got around to building, but I'm but I'm curious to kind of understand the catalyst and and how you're maybe benefiting.
Speaker 14:Well, there there's actually a few things. Right? So the fact that we are creating this kinda, like, uniform source of secrets and access and and, basically, all it's like a single dataset, right, for all the access within the enterprises, it it helps us create this type of, like, AI brain behind it, right, where we are able to provision access controls and identify different over provisioned access and loopholes and and everything else that developers are using. So that's kinda like the one part, that we're they're focusing and will be focusing even more with AI. The other part is how do all of the agents and how do all of the other AI work are actually able to operate secrets.
Speaker 14:Right?
Speaker 11:Because Yeah.
Speaker 14:You know, we are talking about, like, they're becoming much faster. They're becoming much smarter in what they're actually doing, but they kind of depend on how fast they're able to access secrets or databases or other resources that they need to be approved. Right? And Yeah. And right now, a lot of it is provisioned very manually.
Speaker 14:Right? So this is another area that Inphysical is really focusing on. And and how do you actually simplify it? And how do you make sure that a lot of these workloads, they can be more autonomous, in how they work?
Speaker 2:Yeah. Yeah. That makes sense. What's your guys' internal AI software engineering stack? What what tools are you getting the most value from today?
Speaker 14:You mean, terms of engineering?
Speaker 5:So Yeah.
Speaker 14:It people use all kinds of things. I mean, of course, Claude and and, like, basically, like, all the LLMs out there, we are using. It's kinda like a mix of whatever people feel most comfortable with and what they want to choose.
Speaker 2:That makes sense. Mhmm. Cool. That was great. Well, very exciting.
Speaker 2:Congrats on the milestone. Yeah. And I'm sure you already have people breathing down your neck ready to do the beat now that a lot is is in. So good luck, you know, pushing pushing those people off.
Speaker 10:Thank you.
Speaker 1:We'll talk to you soon. Have a great Cheers. Fantastic. Up next, we have a couple things. We have Alex Heath from The Verge jumping on at 02:30.
Speaker 1:That's in about fifteen minutes. I wanna go through some poly markets about Apple to give us a little bit of a update on what people are expecting Apple to do over the next year. I also wanna check-in with our intern, Tyler Cosgrove, see how he's doing. But The jacket came off. Let me let me walk
Speaker 2:He's rolling up the sleeves.
Speaker 1:While he's getting ready for his, update, I wanna run through some of these poly markets. How much will the iPhone 17 cost? We're down
Speaker 2:drop one of these?
Speaker 1:Will you drop one of those? We, we're down at 10% now for over a thousand dollars. It looks like most people are thinking the next iPhone's gonna be $7.99 or $6.99. Not a lot of movement there, but it's moving downwards. People are getting, more bearish on the idea of a thousand dollar plus iPhone.
Speaker 1:Well, there's a there's a small poly market out here about, will Apple release a foldable iPhone in 2025? Market launched at 12%. It's down at less than 2%. No indication from WWDC that a folding iPhone's coming. Interesting historical poly market.
Speaker 1:Do you want a foldable iPhone?
Speaker 2:No. I was I was at the farmers market Yeah. On Saturday.
Speaker 1:Yeah.
Speaker 2:Was I met another dad
Speaker 1:Mhmm.
Speaker 2:And I've he he pulled out his phone and it was phone. Okay. And I and he and he just un he pulled the phone out Yep. Unfolded it, did what he needed to do and I was like, wow. I didn't I've never seen one of these in the wild before.
Speaker 2:But Yes. It's kinda cool. Folds up, you know. It's pretty I'm trying to find trying to find why
Speaker 1:You know what?
Speaker 2:Why you really need
Speaker 1:one. I mean, I saw I think it was Kaisenat went to China and was looking at a trifold phone, the latest and greatest from the top Chinese smartphone company, probably Huawei.
Speaker 2:Trifold. Trifold.
Speaker 1:So it looks just like iPhone
Speaker 2:gong for four.
Speaker 1:Looks just like an iPhone in terms of size, and then it unfolds into something that's basically a tablet. Yeah. And that is actually pretty interesting and pretty, you you could imagine that actually catching on in terms of like, you know, you don't even need to bring the laptop with you on the plane because you're just gonna fold fold it out and have a much, much bigger Can
Speaker 2:you use it when it's in its
Speaker 1:Oh, yeah. Yeah. You can use it as phone and then you
Speaker 2:can use it as a tablet.
Speaker 1:So it's essentially both. And the hinge technology is getting to the point where it's reliable. The dust doesn't get in it. It actually folds completely flat. The early phones, they would they would fold and there would be like a little gap because you couldn't make the hinge fold flat.
Speaker 2:Imagine Imagine screen
Speaker 1:would break. You'd see a And news paper.
Speaker 2:Maybe information.
Speaker 1:It'd be amazing. It'd be amazing.
Speaker 2:Feel like they had a print edition.
Speaker 1:Okay. Other Poly markets I want to run through. Will Apple invest in OpenAI in 2024? This historical poly market. It was up at 72% at one point.
Speaker 1:Small market, but still, it has crashed it crashed down to two to 0%, obviously, beginning to resolve. No. But, man, maybe they should have. It would have been a wild one.
Speaker 2:Would have been
Speaker 1:a that that people are tracking these days is, will Apple announce iPhone assembly in The United States before September? We did.
Speaker 2:We beat them to it.
Speaker 1:We beat them to it. Let's go to Tyler and see how is the project going, Tyler. Let's Break it down for us.
Speaker 5:Well, guys. Okay. It's done.
Speaker 1:It's done.
Speaker 5:The American iPhone.
Speaker 1:Manufactured in America. Assembled in
Speaker 2:America. Wow.
Speaker 5:You know, it's, you know, maybe not the cleanest, maybe not the most perfect. It's kind of a coin flip whether it would pass the, you know, inspections, but
Speaker 1:Quality assurance. But you did
Speaker 2:I I genuinely can't believe you did it. I can't was staring looking I was staring looking at the pieces Yeah. Earlier and and I I was kind of concerned because I thought we've given Tyler an impossible task.
Speaker 1:Yep. Yep. We're now three hours and twenty minutes into the project, and it's successful.
Speaker 5:I mean, look, I you know, I I'm more of a software guy, machine learning engineer kind of guy.
Speaker 1:Yep.
Speaker 5:Not not big on hardware, but, you know, this process, I'm incredibly bullish on bringing manufacturing back to The United States.
Speaker 1:You think it could be done.
Speaker 5:Okay. If I can do it, you know Anyone. Not not necessarily anyone,
Speaker 2:but But but you
Speaker 1:have a college degree.
Speaker 2:Yeah. Yeah. I we gotta kinda get into the economics now and understand, like, you know, Tyler's market value. Tyler's market value probably, you know Yeah. Quarter million a year.
Speaker 2:Yeah. It took him three hours. We're getting
Speaker 1:When you run through it,
Speaker 2:it's some margin problems.
Speaker 1:Yeah. We've been talking about the $10,000 iPhone. I think we might be looking at it. Get an iPhone four s handmade by a college educated machine learning engineer.
Speaker 2:But imagine, you know you know, in in in a lot of cars, they'll like, the person that made the engine Yes. Signed it. Sign it. Having an iPhone that was sort of signed on the back by Tyler.
Speaker 1:Why don't we get why don't we get a Sharpie for Tyler? You can sign the back of that.
Speaker 2:We give away one of the
Speaker 1:font font hands.
Speaker 5:I'm thinking of starting like a kind of boutique, you know, handmade phone company now.
Speaker 1:I think that's good.
Speaker 5:You you just Made with love.
Speaker 2:Yeah. Just buy the new iPhone, take it apart, put it back together, sign it.
Speaker 1:Sign it. Yep. Assembled
Speaker 2:handmade iPhone.
Speaker 1:Assembled here.
Speaker 2:Amazing. Honestly Fantastic incredible work.
Speaker 1:Really great.
Speaker 2:They they said it couldn't be done.
Speaker 1:We proved them wrong.
Speaker 2:You proved them wrong.
Speaker 1:Anything is possible in America with enough dynamism.
Speaker 2:With enough Tyler's. Today. With enough Tyler's.
Speaker 1:With enough Tyler's, we and we can we can accomplish anything. Poly market has a has a 4% chance that Apple announces iPhone assembly in The United States before September. Not looking good there, but maybe we changed the odds today, folks. And what else is in the poly market here? Will Apple release a new product line in 2025?
Speaker 1:That's sitting at 43%. People are expecting something. Let's go to the comments and see. HomePad plus HomeOS is the rumor. Apple Smart Home Display, so something like an iPad that would live in your house and act as the central hub for all your home pod devices.
Speaker 1:Very interesting. So I don't know. We'll be tracking that. Didn't happen today, but we will be getting the full update from our WWDC correspondent, Verge, over at The Verge, Alex Heath coming on the show in just a minute.
Speaker 2:Well, we can pull up some bangers from the bangers tab.
Speaker 1:We were Joe team. I I think Joe Wiesenthal had a good one. I don't know if you saw this. There's a startup called Bernie, which claims to have built a reputation marketplace so that you can license out someone else's credentials when fundraising or whatever. They decline to say whether it's ethical.
Speaker 1:And they say, is this legal? Yes. Every engagement on the platform is governed by enforceable licensing contracts. Identity credentials and usage terms are verified. Is this moral?
Speaker 2:So the issue is I'm looking up I just googled Bernie reputation. Yeah. And it's just a bunch of stuff on Bernie Sanders. Oh, okay. Find the start up.
Speaker 1:Yeah.
Speaker 2:I was seeing this and I was trying to understand. It's it's kind of it's kind of a hilarious concept to be Yep. You know, basically say like, oh yeah, you can just use my name to rate fundraise for for your project. Yep. Like, that does not that that's not gonna work.
Speaker 2:May maybe there's some people that that would agree to that, but Yep. Sounds
Speaker 1:Social Capital, now liquid. Accelerate investor confidence with Bernie's curated marketplace of reputation assets. Purchase verified team credentials.
Speaker 2:I can't find anything about this company.
Speaker 1:Is ethical? That's not for us. It says bernie.market is the website, but it it could be a prank. Bernie.market. Let's see.
Speaker 1:It it appears to be a real real website. Somebody vibe coded it. Profile characteristics.
Speaker 2:Access elite credibility instantly. Instantly. Maybe we should maybe I just don't understand
Speaker 1:who Is this ethical? That's not for us to determine. Credentials are already used to influence funding, hiring, and trust often informally and without consent. We bring transparency, consent, and pricing to a dynamic that already exists. Very, very interesting.
Speaker 2:So I don't I I don't quite understand. So so this is like you wanna build a SaaS company Yes. And you just.
Speaker 1:And you need and you need a Harvard educated. You need a Harvard MBA on your deck as like an adviser. And so you go I mean, I guess like the bull case is this for for this is like angel investors and advisers are already kinda like, GLG exists. You could go to AlphaSites
Speaker 2:or So advisers, I understand.
Speaker 1:And and but this could be this could be kind of a, like, a rebranding of the adviser marketplace. So instead of saying, like, hey. Like, we understand the supply chain because we spent, you know, $10,000 of our pre seed capital on Tigas talking to experts, and we converted a few of those into, you know, advisers and gave them some equity. Bernie maybe lets you make that go direct to the adviser relationship. But I don't know.
Speaker 1:It's it's very oddly marketed. But it's very funny. Anyway.
Speaker 2:Extremely sus.
Speaker 1:Yes.
Speaker 2:I I would that's it. I would have the founder on just to just to ask would
Speaker 1:be interested.
Speaker 2:How they expect this know the guarantee. Work and not create a a a wake of problems.
Speaker 1:Yes. Yes. Yes. I mean, there there are other companies. What
Speaker 2:The the founder's like, well, to be honest, like, I kind of dog
Speaker 1:Food it.
Speaker 2:Fooded the product. And, like, I have no tech experience. I don't have a reputation myself.
Speaker 1:But, you know, my team has But team years of experience reputation. Harvard, MIT. He just comes on
Speaker 2:Google, Apple, Mostech, GPs at Sequoia, Benchmark.
Speaker 1:I mean, intro.com Aerospace Engineers. Yep. Actually IMO Gold Medalists.
Speaker 2:Many of the OpenAI researchers are on our team.
Speaker 1:Yep. Hi, Frequency Traders. We got some Jay Street Yeah. Street. We got Citadel, the guys on the team.
Speaker 2:Johnny Ive.
Speaker 1:Johnny Ive's involved. He spent one minute replying to
Speaker 2:We're like, oh, okay. Okay. So I I get it. That makes sense. I'm actually fully, you know, bought in Yeah.
Speaker 2:To this project. Totally. And I would trust you with my credentials for you to just sell to the to the highest bidder. Exactly. Anyways, we have some more some breaking news.
Speaker 2:Oh, but more breaking news. Gerstner's Invest America is being included in the reconciliation bill Oh. Backdated to the beginning of this year. So if you had a child 12/01/2025 and beyond Wow. They will get a thousand dollars.
Speaker 2:I think it's slated through 2029.
Speaker 1:That's amazing. So so so is this, like, happening happening, or is it still in the discussion phase?
Speaker 2:Well, so the reconciliation bill needs to be passed.
Speaker 1:Okay. But if it's passed It will be
Speaker 2:included. Being called Trump accounts.
Speaker 1:Wow. Okay. That'll be really noncontroversial. But congratulations to Brad Gershner. That's very exciting that he got it across the finish line, at least the the he got it across the starting line, I suppose.
Speaker 1:Yep. The finish line's upcoming. But it seems like it could
Speaker 2:be I mean, go through. Is I'm gonna be calling these Gershner accounts forever. Forever. I'm gonna tell my my next child, yeah, this is you you can thank Gershner for your college education. Write him a thank you note.
Speaker 2:Let's pull up this post from Kitzy.
Speaker 1:Okay.
Speaker 2:It says, Steve Jobs would have cornered you in a dark alley Mhmm. And beat you with a metal pipe if you even suggested something like this.
Speaker 9:This is the
Speaker 2:this is the new this is the new design, the sort of see through functionality. There's another post from Alex.
Speaker 1:What's interesting is that X did this for a while, and it was not well received. Like, but we ran this experiment. I remember the bottom bar for a while Being
Speaker 2:see through?
Speaker 1:On on X, shortly after Elon took over, it was like, as you would scroll it still does it, actually. As you scroll, the bottom bar gets transparent, and you can still click on it. So it still lets you know that it's there. And it kind of fades fades away so you can see things under it. But but I think for a while, was like going up and back and it was kind of jarring.
Speaker 2:It is not a funny because
Speaker 1:I don't know. I I think this could work. Who knows?
Speaker 2:Some Alex taking the same joke. Or actually, he was He said, Steve, there's another post Mhmm. Showing Steve Jobs would have taken you out back and shot out your kneecaps. Oh, little more aggressive. For pitching something with this contrast ratio.
Speaker 2:Another post here seeing how the see through actually shows up on the home screen. It's funny because this you could jailbreak your phone a decade ago. Eric Zedd called this out. You could do this exact same I remember it was very cool. Yep.
Speaker 2:It would have some areas that it would be Disastrous, but in general, you It would
Speaker 1:It's fine.
Speaker 2:It was pretty cool.
Speaker 3:It's fine.
Speaker 1:Yeah. It happens. Should we go to this news about the doctors? New paper shows a familiar result on LLMs in medicine. Doctors given clinical vignettes produce significantly more accurate diagnoses when using a custom GPT built with obsolete GPT-four than doctors with Google PubMed, but not AI.
Speaker 1:So, we are firmly in the Centaur era. Aaron Levy over at Box sums it up well. He says, doctors went from 75 accuracy without AI to 85% accuracy when using AI for diagnosis in the future. It will be malpractice for your doctor not to be using AI. This is such a clear societal benefit that it alone should cause everyone to be much more pro AI progress.
Speaker 1:I completely agree. It's very good. Very exciting.
Speaker 2:I want to see my doctor go on ChatGPT in real time For describing what I'm saying.
Speaker 1:Yeah. I mean, they probably need like a doctor plan where the data is even more sequestered. Right? So they're not like leaking HIPAA. Like, need a HIPAA compliant GPT, but that will be pretty easily doable.
Speaker 1:I guess the question is, like, there's been a couple AI for doctors companies. And the question is, is that an independent application layer company? Or is that something that OpenAI rolls out as a functionality?
Speaker 2:ChatGPT is the HIPAA compliant ChatGPT kind of thing?
Speaker 1:Potentially. I I don't know how how many multi
Speaker 2:billion dollar companies focused on the scribe functionality. Yeah. Right? Yeah. Or or need?
Speaker 1:Yeah. Yeah. I mean, in in in legal, there certainly seems to be some, like, decent amounts of traction from Harvey. And so, you know, it it could be enough of a unique use case that it's not just something that you're gonna use JetSuite for. Cursor
Speaker 11:for surgeons. Curses.
Speaker 1:We will probably Yeah.
Speaker 2:Just just cut that out. Clear that out. Yeah. Grab it. Throw it out.
Speaker 2:Put it put it to the side. Just vibe coding your surgery.
Speaker 1:You know that like like the latest Gemini can just take a webcam view of of anything and just be talking to you the whole time about what it's seeing, making recommendations, and you really could do that. So curse for surgeons.
Speaker 2:Curse for vibe surgery.
Speaker 1:I got vibe surgery. Like, yeah. Like, how are you recovering? It was more of like a vibe surgeon than like a like a hardcore deep deep research surgeon. It was more of a vibe surgeon.
Speaker 2:Yeah. But It
Speaker 1:was just a college drop
Speaker 10:off.
Speaker 2:My spleen's feeling decent.
Speaker 1:Decent. There's
Speaker 2:It works for now.
Speaker 1:Yeah.
Speaker 2:Yeah. It might be a bit buggy.
Speaker 1:Yeah.
Speaker 2:But
Speaker 1:vibe surgery. I don't know if we're gonna go there, but it's possible. We're already in the era of vibe legislation.
Speaker 2:Vibe engineering.
Speaker 1:Vibe coding is very real. Vibe designing is very real. Get on figma.com. Speaking of great art, think words says, great art should comfort the disturbed and disturb the comfortable. And, it's a painting of Halo.
Speaker 2:Halo. It's great. It genuinely is beautiful.
Speaker 1:It's beautiful. I wanna hang this.
Speaker 2:We should
Speaker 1:get this we should get this painted by hand. Tyler, your next project. You're painting.
Speaker 2:Hand paint this AI This AI Halo Sloth. No. It's funny because I look at this and I don't think Sloth, think I think.
Speaker 1:I think cool. Yeah. But again, I mean, like like what takes this out of out of the slop world is is how it is funny to recontextualize Halo, this science fiction, this video game into this, you know, painterly style of, I don't know, like Renaissance painting.
Speaker 2:It's beautiful. It's stunning. It's provocative.
Speaker 1:It's this it's this unexpected mashup. It's the Harry Potter Balenciaga. Two things that normally don't go together, you put them together. That's funny.
Speaker 2:Would like to see the
Speaker 1:same of the ideas not what's it is sloppy, but the ideas is uniquely human. And so that's why that's why whoever created this came up with a great prompt, and that's why we're liking it. And that's why it's five k likes. Anyway, Dylan Patel, we mentioned this earlier on the show, but Semi Analysis has a banger post on scaling reinforcement learning. Very, very interesting deep dive.
Speaker 1:Dylan Patel writes, reinforcement learning is very inference heavy and shifts infrastructure build outs heavily. Scaling well engineered environments is difficult. Reward hacking and non verifiable rewards are key areas of research, recursive self improvement is already playing out, major shift in 'four and 'five RL training. And so, what's interesting is that before in the pre training era, in the scaling of the big, big transformer runs, the massive runs Dylan Patel told us that the latest Orion run, the GPT 4.5 run, was already maxed out, and they couldn't do a bigger single run without bringing Stargate online. And so the the industry has simultaneously shifted to reinforcement learning, which, of course, can be done in a very distributed way.
Speaker 1:And so you can be generating training data all over the place when inference is low, like ChatGPT use is high during during the week the the work week. It's not high during the nights and weekends. And so during those times, they use those GPUs, those data centers, to generate reinforcement learning training data. And the particularly important thing is verifiable rewards. So you have the AI generate a whole bunch of code or write the solution to a complex math problem, but then that math problem is verifiable.
Speaker 1:You can make sure that the answer is correct. What's hard is when you have non verifiable rewards, like, is this joke funny? Very, very difficult. And so, there's a lot of reward hacking going on and a lot of work being done on what do you do in a scenario where there's a non verifiable reward, not like a math problem or some code. And so, right now, what they're doing is they're having other LLMs grade the results.
Speaker 1:And so, you generate a 100 jokes and then another LLM is looking at them and saying, joke is funny? And hopefully, it learns over time, but it's very tricky. There's also very interesting developments in engineered environments. And so when you're doing reinforcement learning, the classic example like chess or Go. And so you put all the chess pieces on a virtual board.
Speaker 1:You play the chess out. But it's very easy to simulate chess because it's just a bunch of pieces on
Speaker 2:board. To find rules.
Speaker 1:It's a lot harder to create an engineering environment that is simulating code across, like, a database, in a web server, in a web browser, in Python, and all and image generation because there are there's lag and delay in all of those. And so a lot of the research that OpenAI did on reinforcement learning for video games, they were able to run Super Mario at like 1,000 times speed, or they can simulate an entire game of chess in a millisecond. It's much harder to do that when you have to say, Okay, go and interact with all these web servers and run into all the CAPTCHAs, and you can't really speed up every the environment. And so how you work through those engineering environments that you're running the test on is very, very key. So there's a lot of research going So I'm sure we'll be digging into this more in the future.
Speaker 1:Anyway, our guest is joining in just a minute, but let's keep moving on. What should be Are you surrounded by journalists? Hold your position. I can't wait. There's a there's an obituary for Bill Atkinson, one of a kind, the Macintosh pioneer and inventor of HyperCard.
Speaker 1:He passed away at 74. Very sad to hear that. Very glad that Wired was able to do an a beautiful obituary. We'll read from some of this right now. My meeting with Bill Atkinson was unforgettable.
Speaker 1:It was November of nineteen eighty three, and reporting for Rolling Stone, I had gained access to the team building the Macintosh computer scheduling to launch early next year. Everyone kept telling me, wait until you meet Bill and Andy, referring to Bill Atkinson and Andy Hertzfeld, two key writers of the Mac software. Here's what I wrote about the encounter in my book Insanely Great. I met Bill Atkinson a tall fellow with unruly hair, a poncho via mustache, blazing blue eyes. He had the unnerving intensity of Bruce Dern in one of his turns as an unhinged Vietnam vet.
Speaker 1:Like everyone else in the room, he wore jeans and a t shirt. Do you want me to see do you wanna see a bug? He asked me. He pulled me into his cubicle and pointed at his Macintosh. Filling the screen was an incredibly detailed drawing of an insect.
Speaker 1:It was beautiful, something you might see on an expensive workstation in a research lab, but not on a personal computer. Atkinson laughed at his joke. Then he got very serious, taking an intense near whisper that gave his words a reverential weight. The barrier between words and pictures is broken. He said, until now the word of art has been a sacred club like fine China.
Speaker 1:Now, it is for daily use. He's so excited about it. Atkinson was right. His contributions to the Macintosh were critical to that breakthrough he'd whispered to me at the Apple office known as Brandly 3 that day. A few years later, he would single handedly make another giant contribution with a program called HyperCard, press Great.
Speaker 1:Which presaged the World Wide Web. Through through it all, he retained his energy and joie de vivre, and became an inspiration for all who would change the world through code. On 06/05/2025, he died after a long illness. He was 74. Atkinson hadn't planned on becoming a pioneer in personal computing as graduate student.
Speaker 1:He studied computer science and neurobiology at the University of Washington, but when he encountered the Apple II in 1997, he fell in love and went to work for the company that built it a year later. He was employee number 51. In 1979, he was among the the small group that Steve Jobs led to the Xerox PARC research lab and was blown away by the graphic computer interface he saw there, the GUI. It became his job to translate that futuristic technology to the consumer working on Apple's LISA project. In the process, he invented many of the conventions that still persist on today's computers like menu bars.
Speaker 1:Atkinson he created the menu bar, Jordy. This is incredible.
Speaker 2:Which they just today added to the iPad.
Speaker 1:Really? The menu bar is in the iPad now.
Speaker 2:So, he's he lives on.
Speaker 1:He lives on. What a what a what a full circle moment. Atkinson also created QuickDraw, a groundbreaking technology to efficiently draw objects on a screen. One of those objects was the round rectangle, a box with rounded corners that would become part of everyone's computing experience. Atkinson had resisted the idea until Jobs made him walk around the block and see all the traffic signs and other objects with rounded corners.
Speaker 1:Wow. He's like, it's it's probably easier for the computer to draw a circle or a perfect square. But Steve Jobs is like, no. The the corners have to
Speaker 2:be be round.
Speaker 1:They will be round, and he built it. Remarkable.
Speaker 2:That's amazing. Because of Atkinson, my experiences with computers were beautiful and magical. Yeah.
Speaker 1:I was I was listening to Ben Thompson talk about Steve Jobs and AI. And I think he was actually quoting who was it? Signal or someone on X, one of the accounts that we highlight all the time. And this account had said, what would Steve Jobs think about Vibe coding? And Ben Thompson's point was like, he would have loved it.
Speaker 1:He would have loved vibe coding. And his example was that if you go back to one of the major keynotes for Apple, or one of the keynotes, I think right before he passed away actually, Steve Jobs introduced GarageBand. And in it, he's talking about all the different like instruments that you can use, and he says like, now anyone can be a musician. And he was really about like just bringing the ability to create to anyone. And that's what vibe coding does.
Speaker 1:And it's like the perfect example of that. And and people get so hung up with, like, the business implications of vibe coding or, like, what if it hallucinates? Like, well, if Yes. What if Jobs would say GarageBand?
Speaker 2:Vibe code for twenty minutes and push it to production?
Speaker 1:No. He Of
Speaker 2:course not. He would internally. He would but he would appreciate this sort of just creating software. Totally. Totally.
Speaker 2:And one process of creation. It's not like he's he made GarageBand being like, make the perfect song
Speaker 1:Yeah. Every time. One of the things that Apple is uniquely behind in, speaking of WWDC, is Xcode does not it does not integrate with Cursor. So when you're writing an Apple iOS app and you're writing Objective C
Speaker 2:Well, you think
Speaker 1:it's a very difficult language, and you can't immediately integrate with Cursor, at least not at least not
Speaker 2:is working with Anthropic.
Speaker 1:They're starting
Speaker 2:to work on it.
Speaker 1:They are solving it now. Anyway, we have our WWC correspondent I'm launching stick for coming in the studio. Standby. Welcome to the stream. How you doing?
Speaker 1:What's going on?
Speaker 10:Guys, I'm, at the Steve Jobs Theater.
Speaker 1:I'm doing
Speaker 10:this handheld. Oh, that's okay.
Speaker 1:Oh, it's great. It looks like you're doing
Speaker 2:a great job.
Speaker 1:Can can you show us what's behind you? Can you can you give us a little tour? Wow. Got the space. Wow.
Speaker 1:Donut. And then,
Speaker 10:behind me is the is the Steve Jobs Theater. What's below me technically. Yeah.
Speaker 2:This is
Speaker 10:the this is the dome about it.
Speaker 2:That's beautiful. Amazing.
Speaker 1:Give us your reactions. Break it down. What have you seen? What have you liked? What what what would you put in the bucket of, like, knees for
Speaker 2:Everything see through.
Speaker 1:Time in the oven. Let's see.
Speaker 10:Okay. I hear I I hear you now.
Speaker 1:Perfect. Break it down for us. What's going on?
Speaker 10:Yeah. I haven't gotten to obviously catch the show yet, but I'm curious what you guys think. I mean, to me, the big headline is no new Siri.
Speaker 1:Yep.
Speaker 10:And that means no new Siri for at least a year because that's how Apple works. Right? They're not gonna talk about it again in a way that's, like, expansive for developers until WWDC next year. I think we saw the stocks slide literally as WWDC kicked off because people were hoping for that. Mhmm.
Speaker 10:I think Apple, you know, having just come out of some meetings that I can't really talk about, but I can just say, like, I think Apple is wanting people to go, look, we've got all this other stuff. The iPad is more advanced, you know, be excited about the new design. But I think underneath this is this simmering angst about where Apple is at on AI. Mhmm. And I don't think they have a good answer yet.
Speaker 10:Do you guys?
Speaker 2:No. It's it's it's I mean, the the the Internet will destroy them for being like, hey. Don't don't worry about the AI stuff. We made your icon see through.
Speaker 1:Yeah. I think there's two things
Speaker 2:going And rightfully so. Right? It's sort of it's it's it's somewhat I I I wouldn't go so far as to say it's unacceptable because ChatGPT is still great on an iPhone. You get a lot of value out of it. But I forget who we had earlier.
Speaker 2:It was like, it would be really great if it ChatGPT was integrated with photos and Totally. IMessage and and all these other things. And so, yes, Apple from from an investor standpoint, I look at Apple, and and we've talked about this a Apple missed search, but they get 20,000,000,000 a year from it, so they're fine. Can miss AI. They can yeah.
Speaker 2:Yeah. Sure. And they can miss AI, but it does, you know, we have
Speaker 1:able to still value capture is what you're saying.
Speaker 2:Yeah. I think they can still value capture. But as a consumer Because they it's easy to be deeply frustrated.
Speaker 1:And if they auction off this button, the action button, to the highest bidder, they that could be a multibillion dollar deal for sure if they act as the front door to AI.
Speaker 10:Yeah. I mean, was thinking about the same day as WWC OpenAI hitting 10,000,000,000 in ARR, which is three x year over year, like on a massive base already of billions a year. And a healthy chunk of that is flowing directly into Apple's pockets. Right?
Speaker 2:Because those
Speaker 10:are cheap at GPT subscriptions that people are paying for through iOS. So, yeah, you're right. They benefit. I think the question is like, what happens if people start to buy phones less because AI makes other devices more interesting? So like the boogie, the boogeyman here on the ground today is Johnny Ive.
Speaker 10:Right. It's like, what is he doing with open AI? Is Apple scared about it? You can't get an answer either on or off the record. Mhmm.
Speaker 10:But I think that's the real fear, that's probably years out. So to be, like, near term bearish on Apple's probably not correct. But, like, in five years, are people buying phones less because we have all these AI wearables that take interactions away from the phone? Maybe. Is Apple gonna be winning there?
Speaker 10:So far, doesn't look like it. Yep. So I think that's, like, the that's more, like, five ish years out, but that's that's a serious concern.
Speaker 2:Yep. And the China the China question's interesting. We had Patrick, the author of Apple in China on earlier today, he was just saying Apple is gonna be fine in The United States in the near term even if they're kind of miss you know, missing missing AI functionality. But in China, if there's phones like Huawei and and other players that can offer these deeply integrated AI features Yeah. You're gonna fall behind in that market.
Speaker 1:Then you have to imagine that the dynamic between DeepSeek and Huawei is gonna be radically different than the dynamic between OpenAI and Apple. Totally.
Speaker 10:That's Yeah. That's a bit of big topic here too. Was running into another member of the press from China who's here.
Speaker 1:Mhmm.
Speaker 10:And he was saying everyone there is super mad that they don't have Apple intelligence, which is like everyone here has it and it's like, what does that even mean? Right? Like Wait.
Speaker 2:So they didn't even roll it out? No. Didn't roll it out?
Speaker 10:No. It's blocked. It's blocked by the regulators and now caught up in the trade war there. So the regulator was just reading the Financial Times. I actually had a great report on this, the local regulator was blocking it because of the trade war.
Speaker 10:And so it's almost caught in all these geopolitical tensions that are really messing up their AI strategy. And to not be able to sell the marquee feature of the phone you shipped last year
Speaker 2:Mhmm.
Speaker 10:In your largest market. I don't know. Maybe China's is their largest. Don't know by users. It's probably close.
Speaker 10:That doesn't seem good. And so that's that's a big question I have.
Speaker 1:Yeah. Yeah. I I I think the other interesting thing is that, like, this is a developers conference, but all the consumers are watching. Consumers are the ones that are I feel like they're the noisiest online about various redesigns. I'm more interested to dig in, as we get more details this week, into some of the olive branches that Apple could extend to the developer community on the AI side.
Speaker 1:Because even if they're not going to give up the Siri button to ChatGPT, are a bunch of different small LLMs and different summarization functionality and different access to parts of the chip that could be used at a lower level by all companies, including upstarts that just want to build a cool app that maybe needs a little more horsepower on the AI side. And the chips are great. And so, giving people more access to that at a deeper level, that feels like a narrative that could be completely drowned out by, oh, we didn't get new Siri. But if the developers are increasingly happy and see that there's more opportunity to just build cool things, we might just wake up in a couple months and be like, oh, wow, there's this amazing new app that's clearly using the chips more effectively. Like, my phone feels faster.
Speaker 1:It feels more advanced. And it's not an Apple product, but it's enabled by the way Apple kind of opened up the ecosystem just a little bit, even if they didn't go full, anyone can build the next Apple Yeah.
Speaker 10:Replacement. That's right. I think opening up their models that they announced today to developers could be a big deal, but it remains to be seen if the models are good or not. I had a developer come up to me who's building this like AI social network and he's doing everything on device because he wants it to be privacy centric. Sure.
Speaker 10:And Apple's perfect for that. That's what they do. It's like Yep. Their models run locally. They're probably not the most performant, but they're gonna they're free, and they run locally.
Speaker 10:So for him, it's a win. He's an indie developer trying to build a cool AI thing. Thing. Is that something that huge apps are going to use? I doubt
Speaker 1:it. Yep.
Speaker 10:So is it gonna be enough to shift the narrative on, like, yeah, Apple's good at AI AI now for developers? Yeah. I'm not sure. I'm kinda skeptical.
Speaker 2:What's up with that, research paper that an Apple intern put out?
Speaker 1:It was it was an intern?
Speaker 2:I think he was an intern. Okay. Did you did any any chatter
Speaker 6:about that?
Speaker 2:They basically said, RL is Yeah.
Speaker 10:Shitting on reasoning. Yeah. Well, it's like shitting on the test time compute stuff. So, like, basically saying, like which it kinda makes sense. Like, these are these are fancy parrots at the end of the day.
Speaker 10:Right? They just repeat things back. So if you just, like, layer on a bunch more of that, does it actually get to some semblance of intelligence?
Speaker 1:I'm totally down to buy the most fancy parrot though. Give me a fancy parrot. I would buy a fancy parrot today.
Speaker 10:I think that's what Apple's discounting is like how much we love fancy parrots.
Speaker 1:Totally. Yeah. I don't care if it's actually thinking or actually sentient. Like, did it book my flight or not? Did it turn on my
Speaker 2:alarm clock? It's the argument of, like time. The Android user being like, the iPhone is not the best phone. It's it's the camera on the Android is, you know.
Speaker 1:A little bit better. It's like, do the pictures look good or not? Yeah. When I take a picture of my dog, does it is the exposure, like, roughly correct? Yeah.
Speaker 10:Is is liquid glass hot, or is it ass? How do we feel? Is it liquid ass?
Speaker 2:John John doesn't get the
Speaker 1:I yeah. I mean, it it it seems like I don't know. Like, people were kind of ready to chomp at anything and being very negative. I don't think it's as unprecedented as anyone has ever said because this has been tried in other apps. It does kind of work.
Speaker 1:I'll need to kind of play around with it. Have you had a chance to play with
Speaker 2:anything else?
Speaker 4:I think
Speaker 2:it looks personally, I think it looks cool. I remember jailbreaking early iPhones, iPod touches to have that functionality. And it was cool. I never once in the last ten years have been thinking, I wish I could go back to that jailbroken Yeah. UI that I had when I was a kid.
Speaker 1:I would speak very
Speaker 2:So I don't give them any credit. Yeah. This is the kind of thing that they should announce at WWDC move on quickly and not try to be like, hey, everybody,
Speaker 1:look at this revolutionized it. I would just be very surprised if Apple whiffed on like a UI design feature because that's like what they're great at. I'm not I'm not like like the the unexpected upside is like, they train a huge foundation model and build a gigascale, hyperscale data center? That's kind of out of their wheelhouse new territory. But I would imagine that whatever they do on the UI, UX side, it might be a little jarring.
Speaker 1:When they went from skeuomorphic to flat design, there were a lot of people, oh, I like the old one. But then you get used to it, it's fine. So I would imagine that in fullness of time, we all get used to this and it's no big deal. Yeah. Although, people are still upset about the Photos app.
Speaker 1:I feel like I'm getting used to it now. It's still pretty rough. Some people aren't updating, but hasn't been as jarring.
Speaker 2:I Yeah. I've gotten used to I don't use any of the new features yet.
Speaker 1:Yeah. It's it it feels like
Speaker 2:So like I've retrained myself on a bad what I think is a bad user experience.
Speaker 1:Yeah. Yeah. It feels very search built built with the Photos app. It feels like it's designed for you to go and just start searching, but the actual categorization of images and videos isn't quite there yet. So if you're looking for, oh, yeah, there was a video of my dog, but there was a newspaper in the video.
Speaker 1:I should be able to just type in video of dog in newspaper. And the actual AI that's running to tag that stuff just isn't quite The issue that
Speaker 2:AI is not there. And people think of your photos are for capturing memories. And people think of memories in sort of a
Speaker 1:Yeah.
Speaker 2:Yeah. Yeah. An order. Yep. And they're gonna kind of go back
Speaker 10:think that's because that's who's willing to pay that price point for it right now. Right? And so it's like, you know, some of that stuff's cool, but I didn't sense a lot of energy around the vision, probably on that. Right? Interesting.
Speaker 10:And I think that product is still kind of a question mark in terms of, like, is it going to be a bigger thing or not?
Speaker 2:That should have been actually done. Like, hey. We just want you to buy these for your employees so they have a bunch of monitors. Was Or
Speaker 10:like, yeah, like you're working on an assembly line or something, which is like That's
Speaker 1:so odd. Oh, interesting. That's so odd because they apparently, they pulled the plug on a enterprise focused device.
Speaker 2:Tyler, would you have benefited from having an Apple Vision today? Tyler built the American made iPhone, our intern.
Speaker 1:We had our intern build a iPhone.
Speaker 2:Oh, he assembled it in in under three hours. Would don't know
Speaker 1:you could
Speaker 2:see this.
Speaker 1:Have helped you today? Oh, graphical overlays while you're building?
Speaker 5:I think it would have helped. I mean, I I didn't have any instructions at all. So I think kind of the the bar is just any instructions.
Speaker 1:Putting instructions.
Speaker 5:Vision Pro, you know, I I think it would it would have been helpful.
Speaker 1:Yeah. Could have been good?
Speaker 2:Okay. Yeah. Long Apple.
Speaker 1:But but but my my my takeaway on Enterprise Vision Pro is it's odd because I heard that they were building a version that was specifically for pairing with a desktop setup and multi monitors. And that was kind of the one direction they were going. And Ben Thompson was writing like, that's what I want. That's the perfect product. I've always thought that the win they have to win in one category before they win in all of them.
Speaker 1:Like, the iPhone, and foremost, was a phone, and it replaced a phone. And then it earned the right to win everything. And the Apple Watch, and foremost, was a watch, and then it became a fitness tracker and everything else. And so, I've always thought that the Apple Vision Pro should have been, Hey, we're Apple. We've never built a TV.
Speaker 1:This is a replacement for your TV. Gonna be really, really good at Apple TV, movies, IMAX, three d. Like, this is what you buy it for. It comes pre installed with a ton of movies and TV shows. We're not even shooting three d movies or spatial video.
Speaker 1:That's not even relevant. It's just a device, and we're just gonna super optimize it for watching movies because I got one. That was my favorite thing to do on it, but it wouldn't work in the dark. So I would turn off the lights when I'd go to bed, and my wife would just be sitting next to me. And I'd be like turning the headset on and off because it would lose the tracking, and it would pop up like, your Vision Pro is not working right now.
Speaker 1:And it clearly wasn't it never been used in just like day to day when people watch movies. And so I feel like
Speaker 2:Wait. It still doesn't work at night? Doesn't work in
Speaker 1:a pitch black room because it has cameras that track the world around you. And so
Speaker 2:So, you can't even watch a movie
Speaker 1:without the lights Yeah. Yeah. And then the plane mode was a little iffy too, and they had a special mode that you could flip it into. But it was trying to do too much, I feel like they should have just been like, this is a home theater for people that can't afford a home theater. And that's a lot of people.
Speaker 1:And that's a lot of iPhone owners. A lot of iPhone owners can afford a $2,000 TV, but they can't afford a whole cinema room in their because real estate's expensive. I even heard that one of the leads on the Apple Vision Pro project was from Dolby. Was a Dolby executive on
Speaker 10:Mike Brockwell, the head of it, is ex Dolby.
Speaker 1:That's right. And so I thought it was like, Okay, just lean into that fully. Think about what the experience is. You put this on for two hours. You watch a movie.
Speaker 1:But there's a whole bunch of different decisions that you make if that's the case. And they clearly kind of did 90% of that and then 10% of the other stuff. And now, they're all over the place. And I still just want the home theater on my face.
Speaker 10:Did you guys see they showed two people wearing the Vision Pro in the same room, on the same couch watching a movie together?
Speaker 1:I didn't see that, but That
Speaker 10:is so something they showed in the keynote.
Speaker 1:Everyone hates that, but I actually think that's totally reasonable. I don't think that that's Why? Crazy. I think it's fine. I think it's fine.
Speaker 10:If we could see person alone together?
Speaker 1:Yeah. Yeah. No. No. No.
Speaker 1:No. Because you look over, you see the person. It's the same experience as watching a TV on the wall. It's it's the same thing, but it's just a bigger TV. Okay.
Speaker 2:It's great. Actually think long as you can you can hold hands.
Speaker 1:I'm super bullish on that. Okay. Yeah. I I I I This is a
Speaker 2:weird The bold case for that is that somebody can get up to go to the bathroom or get food and they don't have to pause the Yeah.
Speaker 1:No. No. I I I I
Speaker 10:think is
Speaker 1:the future. But they need to make it lighter. They need to make it cooler. Like, maybe some sort of fan because your face gets hot. Like, there's a lot of there's a lot of industrial design challenges to get it to be, like, fun to actually watch a two hour movie or three hour movie.
Speaker 1:It's still in the demo phase. You you you put it on for fifteen minutes and then you're done.
Speaker 2:Are you gonna be moving over to the iPad for everything? For
Speaker 10:all my content creation? Yes. I thought that was actually really interesting that they positioned the iPad as, like, the podcaster device instead of the Mac.
Speaker 2:Shots fired. Shots fired. Maybe maybe for weekly weekly podcasts.
Speaker 6:Not for I
Speaker 2:don't think we could run
Speaker 10:Man, I like my iPad. I I just until they invent a way on the iPad to multitask as well as the Mac where I can tab between things fast, like, I just
Speaker 2:Well, so that was a big that was a big focus. I I haven't seen it entirely either, but the big focus was on multitasking, allowing you to have multiple windows open at once. But I don't I don't know if still, who knows?
Speaker 1:Anyway, thank you so much for hopping on. This was fantastic. Pleasure to get that
Speaker 2:on ground for Go some get some scoops.
Speaker 10:That's what
Speaker 1:I'm here for. Amazing.
Speaker 10:Scoop. Scoop out of the spaceship.
Speaker 2:Scoop Lord. It's beautiful. Bye, spaceship. Honestly, the grass is looking amazing. Yep.
Speaker 2:So that there's that.
Speaker 10:Nice out. Yeah.
Speaker 2:Cheers, Alex. Thanks for coming on.
Speaker 10:Take care.
Speaker 2:Good to see you.
Speaker 1:Talk to you later. Bye.
Speaker 2:I am deeply disappointed that they did not launch a mahogany iPhone.
Speaker 1:That would have been the best. The official of business.
Speaker 2:The official wood of business. The business class of wood.
Speaker 1:Yep. Liquid glass. I'm watching the video from Tim Cook here. It looks good. I don't know.
Speaker 1:I
Speaker 2:think I think it looks cool.
Speaker 1:I think it's gonna grow on me. I think it's fine.
Speaker 2:I think it looks cool. Yeah. I just don't think and I'm I'm excited to play around with it.
Speaker 1:I just idea that Apple's gonna whiff on that is so ridiculous to me. Like, that this is this is Well, they have all the best people for this.
Speaker 2:They whiffed on photos.
Speaker 1:A little bit. I think you'll get used to it over time. Anyway, this is fantastic. Thanks for watching. Leave us five stars on Apple
Speaker 2:and Wait. We gotta talk about some reviews.
Speaker 1:What else we have got
Speaker 2:some reviews.
Speaker 1:Oh, we got some reviews. Let's read some let's
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Speaker 1:Oh my god. That was when we were traveling. I said, you you were like, yeah. They have a partnership with Toyota. And I was like, oh, you get like a Supra?
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Speaker 2:Thank you, Harry. Kind words. Absolute legends of technology and finance, I think. Okay. From d Beersen.
Speaker 2:Base takes gong hits and vibes of techno capital abundance are a few words I'd use to describe the Mark
Speaker 10:is clearing order.
Speaker 2:I really enjoy it seriously and they do a great job curating guests, some of which are now in my ex Rolodex. It's time to accelerate. Love it. You so Thank you for all the kind words. Folks, we love each and every one of you and go leave us a review but please put an ad in the review for your business or your company We'd
Speaker 1:love we love ads.
Speaker 2:Your fund. Put an ad in the review and we'll read it out here on the show. Everybody have a fantastic rest of your day. I'm gonna go hit
Speaker 1:the Take this out with a gong hit and then we'll check it on Tyler. It's a historic day. Tyler Cosgrove, intern at TPPN has assembled the iPhone in America.
Speaker 2:He did it folks.
Speaker 1:He did it.
Speaker 12:He did it.
Speaker 6:There are no
Speaker 1:pieces left.
Speaker 2:In a cave.
Speaker 1:In a cave with scraps.
Speaker 7:He did
Speaker 2:it in a cave with scraps.
Speaker 1:Is it signed now? Show us off. Show show us what you got.
Speaker 6:Can we go to the what
Speaker 1:is it? Oh, he signed it. There we go. Right there. Yeah.
Speaker 1:Let us know if you want that. We'll mail it to you.
Speaker 6:One of
Speaker 2:one. Tyler If you've
Speaker 1:been listening for four hours,
Speaker 2:you deserve it. We knew you were cracked. We didn't know you were this cracked.
Speaker 1:This is fantastic. Thanks so much. Fantastic. Show. We will see you tomorrow.
Speaker 1:We have another great lineup. Have a great day. Enjoy your
Speaker 2:weekend. Afternoon and evening.
Speaker 1:Cheers. Goodbye.