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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TVPN. Today is Thursday, 01/29/2026. We are live in the TVPN UltraDome, the template technology, the fortress finance, capital of capital. Let me tell you about ramp.com. Time is money.
Speaker 1:Save both. Easy to use corporate cards, bill pay, accounting, a whole lot more. They got Super Bowl ads too in just a few days. We're counting down the days to the ramp Super Bowl ad. We're very excited for it.
Speaker 2:Yeah. Also Not the Super Bowl. Counting down the days.
Speaker 1:Yeah. I I learned I learned a fun fact. I think I put it in here. Apparently, they they had a Super Bowl back in 2001.
Speaker 2:Okay.
Speaker 1:Have you heard of
Speaker 2:this? Tell me more.
Speaker 1:So I got followed by this account that's called two thousand one live. 2,001 live. It's twenty five years ago live. It's a cool account. And in here, they they flash back to like what was happening, you know, twenty five years ago.
Speaker 1:Every day they post what happened twenty five years ago. It's a Cool. Kinda cool account. Followed me. I I followed it a while ago, it followed me.
Speaker 1:And and I saw a post in here that said, twenty five years ago, they did a Super Bowl in Tampa, Florida. The Baltimore Ravens beat the New York Giants 34 to seven. This is the Ravens' first Super Bowl title. I guess people are not happy about that. I don't know.
Speaker 1:But, anyway, very excited for the Super Bowl. In other news, let's run through the linear lineup.
Speaker 2:Pull it up.
Speaker 1:Meet the system for modern software development. 70% of enterprise workspaces on linear are using agents. And we have a fantastic show. We have Anton from Lovable coming in studio in the In person. And then we got Christian and Dalian from Hill and Valley breaking down what's gonna happen at the Hill and Valley conference in just a few weeks.
Speaker 1:And then we have Eric Souffinator. We need a nickname. No.
Speaker 3:We love Eric. Of course, Mobile. Memo, Hercules Capital. And he's coming out at one. We're gonna
Speaker 1:talk about ads, chat GPT ads, how's Also, rollout obviously, earnings makes a ton of sense. And then Kevin from OpenAI is coming on again, returning to talk about science.
Speaker 2:AI and science.
Speaker 1:AI and science. And if we're seeing a clawed bot type moment and feeling the AGI in science, what we should be looking for there in 2026. In other AI news, of course, we we will go into earnings and whatnot today. If you're tracking earnings, make sure to head over to public.com, investing for those to take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service.
Speaker 2:In the news Yes. Today Yes. Apple said this morning that it has acquired Q dot ai Mhmm. An Israeli startup working on AI technology for audio. Yeah.
Speaker 2:Apple didn't disclose the terms. The company was backed by Matter Venture Partners, Kleiner, Spark, XOR, and GV. Mhmm. So Wow. Nice nice little lineup and great outcome.
Speaker 2:The Financial Times reported it was worth nearly $2,000,000,000 so pretty meaningful deal. Apple is not known for really paying up on a lot of different M and A that they're folding in to their roadmap. We had Mark Kermann on yesterday talking about how Apple uses M and A effectively to accelerate their roadmap. So according to Reuters, Apple did not say how it will use QA as technology, but said the startup has worked on new applications of machine learning to help devices understand whispered speech Mhmm. And to enhance audio in challenging environments.
Speaker 2:QAI last year filed a patent to use facial skin micro movements to detect words, mouthed or spoken.
Speaker 1:This is this is we we've seen a couple startups that are, you know, doing like the whisper like, what what do they call it? It's like telepathy almost. It's it it tracks your your mouth movements so you can just and then it like will track
Speaker 2:what you're saying. Really, really crazy. So facial skin micro movements will be used to identify a person and assess their emotions, heart rate, respiration rate, and other indicators.
Speaker 3:Crazy.
Speaker 2:Very sci fi.
Speaker 3:Crazy.
Speaker 2:QAI's 100 employees, including the CEO and co founders Yeah. Will join Apple. Yeah. So
Speaker 1:It seems like Yeah. You can
Speaker 2:Aviyad Maisel founded three-dimensional sensing firm, PrimeSense, and sold it to Apple in 2013.
Speaker 1:Absolute dogs. They're doing I
Speaker 2:call it double kill.
Speaker 1:That's great.
Speaker 2:The PrimeSense deal eventually helped Apple move away from fingerprint sensors on its iPhone and toward facial recognition technology. Interesting. Facebook said joining Apple opens extraordinary possibilities for pushing boundaries and realizing the full potential of what we've created. Yeah. So very very wild to be going back to Apple Yeah.
Speaker 2:For a second time.
Speaker 1:And pop quiz for Tyler. Why does Apple acquire companies?
Speaker 4:I mean, why questions are usually pretty open.
Speaker 1:Okay. Good answer. But Mark Gurman told us why does Apple acquire companies to accelerate roadmap. Accelerate the roadmap. Yes.
Speaker 1:And and it's funny because because I I asked him like like, why are we gonna hear Tim Cook say that? And he was like, oh, because earnings. But we're basically hearing him say it today with the surprise acquisition. That's obviously the line from Apple. And it makes sense.
Speaker 1:This is something that is uniquely acceleratable because of the Apple hardware ecosystem. They can deploy this through AirPods. They can deploy this through the phones just like they did with face ID. If you have that technology and you're like, oh, well, in order to log in to your computer with your face, you're going to need a third party device that you plug into USB like, no one's gonna do that. Yeah.
Speaker 1:But if you're just like, yeah, it's gonna get baked into the hardware, we have the patents. Have the
Speaker 2:And haven't you been wanting them to make more moves in in specifically audio and transcription for a while?
Speaker 1:I've been, like, an an audio interface bull forever. Like, since I worked at a startup that competed with Siri in 2010 or something like that. It it was actually a good outcome. I didn't get an equity because I was just an intern. But it it was actually a great outcome.
Speaker 1:They sold the dragon, naturally speaking, and everyone made a bunch of money. But Siri could be better. But Siri was like the hot kid on the block back then. And and Siri came out of Stanford, so they were much closer to Cupertino. These guys came out of MIT.
Speaker 1:It's very similar natural speech recognition machine learning pipelines for understanding speech, doing dictation. Their main platform was BlackBerry, because BlackBerry was really, really big. They had a BlackBerry App Store. They did a deal so that you would get, like, preinstalled, so you'd get a big check from RIM. They did a very interesting out of home campaign where they bought billboards right outside of, Research in Motion, the maker of BlackBerry's headquarters, because they were advertising.
Speaker 1:Yes. AdQuick didn't exist then, but they should have used AdQuick. They they because they were basically they're they only had one customer, effectively. I mean, had they had every customer that could go buy the app, but then all the other apps that were on either Google and Android quickly rolled out competitive features with Google Assistant. Siri got acquired, and so it was very clear that, like, Apple was not going to be a really fertile ground for playground for them.
Speaker 1:Yeah. And so they they needed to get sort of, like, the attention of the BlackBerry execs, and so they put up a billboard right outside their their headquarters, which I I still like as a strategy. Think it's very fun. But, yes, I I've been I've been very bullish on this. I I was thinking back then that, you know, people get their wisdom teeth out.
Speaker 1:This is very weird in cyberpunk, but if you got your wisdom teeth out, you you could potentially, like, create, like, add a, like, port for storing a microphone.
Speaker 4:These? I should have got that.
Speaker 1:Yeah. Exactly. Because a lot of people get them out, and then you could just put a port there, and and you could and you could insert basically the tip of an AirPod, very, very small device that you would charge, and then you put it in. And then when you're whispering, you can just hear it it can only hear that, and it goes dictation straight to your phone. Obviously, that's unnecessary because you can, you know, do bone induction.
Speaker 1:You can just also just have a, you know, an an AirPod in and just talk out loud and not care what people think. There's those crazy muffled things. You've seen that where you put on the headphones and then it puts like a cover over your mouth so you can talk in public. Oh, yeah. It's silent around you.
Speaker 2:Kanner says, I want my iPhone to unlock only if I silently mouth the words Open Sesame. Could be in the future.
Speaker 1:I was wondering about
Speaker 2:That would actually be nice Yeah. If there was some other element because Yeah.
Speaker 3:You still have
Speaker 2:this like wearing sunglasses trying to unlock your phone. Yeah. Sometimes some pairs of sunglasses I have it it one shots it. Yeah. Others, it's it's like, you know
Speaker 1:Yeah.
Speaker 5:Pretty
Speaker 1:annoying. I I was wondering about the the quality of Whisper transcription these days. Like, if I just open up Whisper on the ChatGPT app, put my app put put my put my phone in my pocket and just talk, can it just hear through my pants pocket and just dictate perfectly now? Because, like, AI is so good at transcription that it can be really muffled. Like, you can have music playing in the background and talk to Whisper, and it just won't Yeah.
Speaker 1:It just won't mess up. So there is a world where you don't actually need, like, a separate pin. You just have something anywhere on your body, and it knows, okay, this is what John sounds like. Let's kill all the background noise. Let's kill all the other people talking.
Speaker 1:Let's isolate that with AI. Like, it seems pretty, pretty good for that. Anyway, let me tell you about Lambda. Lambda is the super intelligence cloud, building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 2:One more thing on this QAI Yeah. Acquisition. They're using going back to their patent, using facial skin micro movements Mhmm. To assess emotions, heart rate, respiration rate, and other indicators. You could imagine where a world in the future where you have Apple smart glasses Mhmm.
Speaker 2:That effectively have like, health monitoring. Because it's tracking respiration, heart rate, all these different things, and just basically integrating the features you're getting from the Apple Watch today. Yeah. Seems
Speaker 1:But I I I wonder what it's really unlocking that the watch can't do. There's always the question when you when you when you pitch a new device. It's like, well, your phone does have a camera on it, so you're not this isn't like the smart glasses aren't the first.
Speaker 2:Yeah. But it's a new device, but it's a Lindy form factor. Right? True. True.
Speaker 2:True. Like this something we've we've talked about in the past. It's like the, you know, the the new hardware that's taken off is an existing form factor. It's like headphones Yes. Eyewear Yeah.
Speaker 2:You have watches Yep. Right? Creating these pendant things so far hasn't hit. Right? Yeah.
Speaker 2:No.
Speaker 1:It's fair. I I I I just think, like, on the heart rate issue specifically, there was an app before the Apple Watch existed where you could put your finger over the camera of the iPhone, and it would use the light, the the flashlight, which was right next to the camera at that point, to light up your finger. So your finger would turn red, and then it would take the sensor data from the camera and measure the pulses of the red and give you your heart rate just from touching your camera. It's pretty cool. Like, it was completely outside of the Apple ecosystem, just an just an app that you can download or pay for.
Speaker 1:And so the phone can take your heart rate. The watch can take your heart rate. If you give me glasses and you say, those glasses can also take your heart rate. Like, I got enough heart rate measurement. I can also just go like this and estimate it.
Speaker 1:Like, there's a bunch of ways to know that your heart rate's spiking. Maybe tracking it some different but it feels like they they need to go farther, and the real opportunity is is something more around audio interfaces, link it to Siri, have more ways to triangulate what the person's trying to say, what they're saying in a noisy environment, whether they're trying to be quiet and you still wanna isolate what they're saying, having a back and forth, reducing latency. All of those all of those things are very critical to success in that category. Anyway, we are going to be in San Francisco on February 3 next week for Cisco's AI Summit. It's bringing together leaders from NVIDIA, OpenAI, AWS, and more to discuss the future of the AI economy.
Speaker 1:The whole thing will be livestreamed, and we'll be there for a giga Did the fireworks get longer?
Speaker 2:I think so.
Speaker 1:I think they got longer today.
Speaker 2:There's a lot to celebrate, John. Go into
Speaker 1:Microsoft. So Microsoft shares have taken a dive as data center spending overshadows earnings surge. Let's give some numbers here. So Microsoft's q four revenue was $81,300,000,000, which was higher than the consensus estimate of 80,230,000,000.00. So they're making money.
Speaker 1:There's no there's no lack of demand for Microsoft services. Q three twenty twenty five revenue was 77,100,000,000.0, up almost 5%, and year over year grew growth was 17% for Microsoft as a whole. But the stock sold off by 12%, and Microsoft is now just a tiny little $3,150,000,000,000 company. Not bad.
Speaker 2:But Yeah. Still only down, what, 6% over the past five days. Yeah. Was a rise.
Speaker 1:Mean, are excited about the OpenAI investment, which did show up in earnings. So OpenAI owns roughly 2527% of the new for profit entity.
Speaker 2:Sorry, Microsoft.
Speaker 1:Microsoft owns 27% of OpenAI's new for profit entity. And that value was actually reflected in Microsoft's earnings. And of course, more importantly, the GP the GPT models are truly frontier. Like, we've seen it again and again. There's like this horse race over this model's better at this thing.
Speaker 1:This model's better today. But it's just very clear that that OpenAI is on the frontier and in the conversation for pretty much every application possible. And so you can just imagine you take GPT 5.2 Pro, you then that into knowledge work pipelines for Microsoft users. That sounds really useful. They aren't behind on coding.
Speaker 1:We've heard, great stories about how Codex is a great model. Maybe it's a little slow. Maybe they need to speed it up, but people are having a lot of luck with codex. And so you can imagine that Microsoft is capable of integrating codex into all sorts of different pieces of the Microsoft empire to create agentic workflows. And and then they also have a deal with Anthropic.
Speaker 1:They also made made a made an investment. So they they they are multi model, multi platform. But the problem is is that Microsoft seems to be constrained on the data center side. So the CFO, Amy Hood, said on the Microsoft earnings call that limited availability of artificial intelligence hardware is affecting how quickly Microsoft's cloud business can grow, and it's capping Azure's revenue potential. Not good.
Speaker 1:They need to take another trip to Abilene. They need to build more data centers. But it's tricky. It takes time. And and right now, maybe it's just a data center capacity issue.
Speaker 1:What's next? Is it going to be an energy bottleneck? Is it going to be a chip bottleneck? These these are stories that we're tracking. Ben Thompson is is starting to sound the alarm bells around TSMC TSMC capacity constraints and and what is t m TSMC doing on the CapEx front.
Speaker 1:Are they investing enough? Are they are they, you know, at risk of of holding the bag if AI stalls out? Are they taking enough risks that if the AI boom continues, that they can continue to deliver and ramp up? Or will Samsung and Intel need to step up? And will companies like Microsoft need to put pressure on those companies?
Speaker 1:That's another point of debate.
Speaker 2:Yeah. So David in the chat is referencing this. But basically, obviously, it's amazing that that Microsoft owns such a big slug Yep. Of OpenAI. That's great.
Speaker 2:But the challenge is so much of their backlog is OpenAI. Yeah. And they're actually getting less credit for that. Right? Yeah.
Speaker 2:Same way that Oracle Yeah. They gotten punished for it. Now it's Microsoft's chance to actually, get punished. And Microsoft, if you actually zoom out a little bit and just look at the last six months, down 17% in the last the last six months and down 4% over the last year. So it's funny, like, in a in a year where it feels like the last year, Satya and Microsoft have just been on this insane run, They've fully, you know, round tripped.
Speaker 1:Totally. Totally. Yeah. Before we move on to Meta, let me tell you about Sentry. Sentry shows developers what's broken.
Speaker 1:It helps them fix it fast. That's why a 150,000 organizations use it to keep their apps working. So Meta also reported earnings yesterday. 59,900,000,000.0 in revenue in 2025, beating, expectations of 58.5. Revenue's up 16% from q three of last year, which was 51.24.
Speaker 1:The company is growing its revenue 21% year over year. That's higher than Microsoft's 17% top line growth. Stock popped 10% after hours, and the market cap is now 1,840,000,000,000.00. So Mark Zuckerberg told analysts on the earnings call, in 2025, we rebuilt the foundations of our AI program. That should be obvious.
Speaker 1:There's so many so many acquisitions, so many hires, so much, so many experiments, so many different, so many different, strategies and and discussions and changing of the guard and restructurings, layoffs and reality labs. It's the compute desk. There's been so many stories about Meta really rethinking their AI platform, rearchitecting the foundations of it. So he continued to say, Over the coming months, we're going to start shipping our new models and products. Very excited for that.
Speaker 1:Says, expect our first models will be good, but more importantly, they will show the rapid trajectory we're on. And I think that we all have high expectations. I don't think anyone's expecting them to jump way, way out in front of everyone else. But if they can just be in the conversation with DeepMind, Anthropic, OpenAI, I think that will quell a lot of
Speaker 3:the concern.
Speaker 2:That, but also what are they doing with them? I think that matters more. Really, really because important, you look at you look at this is why I'm excited to talk to Eric later today. Yeah. But you look at Meta's business and the way in which Gen AI can accelerate everything from generating more content on the platform to having better ads to better targeting, all all these things.
Speaker 2:Right? And not to mention, like, where they can just vend it in at the product level.
Speaker 1:Right? Product stuff is tricky. Yeah. I mean, like, I've I've bumped into Meta AI in Instagram many times, and you do get reasonable, you know, natural language responses, but it it's it clearly still has the knowledge cut off. It's not searching the the web as effectively.
Speaker 1:It's not pulling together the it it doesn't feel completely native to the platform. Like, if you go into Meta AI in Instagram and you ask it to go and hunt around in Instagram for a specific creator or reel based on some clues, it's it's it doesn't feel like it has the hooks to really go in and understand, okay. Based on what you've watched and what I've showed you in the past, this is probably what you're thinking of. Like, that is sort of a superpower, where, you know, there's so many times when you're on the timeline, you're like, oh, I saw this post. I didn't bookmark it.
Speaker 1:Didn't like it. What was it? And and you want the search products to be empowered magically. What what are we laughing at? What are you thinking?
Speaker 1:You gonna flash bang me again?
Speaker 2:Yeah. Close. Okay. Continue.
Speaker 1:Anyway, I think that there's there's the basic case of they got to get an, you know, an LLM that's frontier that's, you know, has the big model smell, fun to talk to, good vibes. Then they need video and audio models that are rock solid, and then they do need to vent those in. I think just having an API or just having a place where people can generate, you know, photo reel videos or even things like Sora, where it has the aesthetics and pacing and cuts of an Instagram reel, That doesn't feel like it's enough. It feels like to really empower the Instagram creator, it needs to be built into the platform like the captions are or those like the face filters on Snapchat that started there like augmented reality stuff, replacing backgrounds. Just letting people still bring what's personal to them, their family, their experiences, their car.
Speaker 1:But take a couple photos of their car and turn it into a really, really awesome drone shot of them driving their car. I've seen a lot of really sweet edits where people will fly a drone over a car, then they'll have a first person GoPro on their chest while they're driving their car, and then they'll use AI to interpolate between the drone shot and their first person view Yep. Because they can't actually like, if you have a multimillion dollar Hollywood budget, you actually can fly the drone into the car, have someone sitting in the car. They grab the drone, and then they hook it on a crane, and the crane takes it out and does a different shot with it. But that's, like, a multimillion dollar expert's tons of equipment.
Speaker 1:There's all these crazy things where someone will be on a Steadicam on a cherry picker. This this crane comes down, then they start walking into it. You can do these really elaborate shots, but with AI, you can you can you can interpolate and, like, make those transitions. And so even just, like, AI powered transitions would be a really, really cool thing to
Speaker 3:bring Yeah.
Speaker 2:Not to mention they they own Manus now, which is a fantastic product team. They've built some great agents. Yep. You could imagine them integrating Yeah. Like basically like prompts to short form video, right, where you can just describe the video that you wanna make, insert real, like basically like generate b roll for this, pull footage from around the internet, whatever.
Speaker 2:Yeah. And so there's so many things that they can do. And again, they've just been using Meta AI Yeah. As a sandbox for the most part. But I'm just excited for them to start shipping across The
Speaker 1:remixing thing is so underrated because there's a lot of people The number of people that have true inspiration for new formats is pretty low. People always do the sketches.
Speaker 2:Think about the remix functionality. If see a funny video and you can just, like, basically do a character swap Yeah. In there.
Speaker 1:Exactly. And it's like that's a
Speaker 2:new really content that Yeah. That's gonna be shared and a bunch of people engage with.
Speaker 1:Tyler, what what's your take on Meta's new plans for 2026?
Speaker 4:Yeah. I mean, I definitely think the image and video models are much more important to get right than the LLM. Mainly just because, like, it's it seems like very natural them to bend it into everything Yeah. Compared to OpenAI or Google who are, like, right now finding it out in image or in video. Yeah.
Speaker 4:So it seems like if they can kind of do really well, can get OpenAI and Google out of that basically. Yeah. Yeah. And then the LM, it's like it's it's unclear what the actual like use case will be in the short term. Eventually, you want some some cool, like, you know, Claude Bot style agent somehow vented in, but Yeah.
Speaker 4:It's unclear how that's gonna work out. So I think in the in the short term, I'm very excited on the
Speaker 1:Yeah. Model. Yeah. I mean, I I I could I I really like that model of, like, the LLM going around and just, like, seeping into the cracks of all the different product experiences, but in these, like, really subtle ways. Like, YouTube now has AI generated summaries on videos, and you can chat with a video.
Speaker 1:So if you're watching a someone build a PC, you can ask Gemini on YouTube, hey. Just print out the exact list of parts that the person used to build the PC. And there might be a parts list at the end of the video. There might be a parts list that's, you know, randomly mentioned throughout. Sometimes a creator might actually link to a real parts list, but Gemini allows you to scrape the transcript and then just get that however you want, then transform it, or, you know, add prices to all of it, or see what see if it's available in Japan, because I'm in Japan.
Speaker 1:All these all these interesting things. I can imagine on Instagram being able to go to a post that has, like, thousands of comments and just say, hey. I want the LLM to kind of summarize the sentiment. Like like, what what what are the facts? Like, you know, people were debating whether or not this is AI.
Speaker 1:Is there a consensus? Or people were adding context. What was the key context that people were adding? There's a lot of posts that are basically rage bait or click bait, where it's unclear what's going on in the video. And so you go to the comments, people are like, I don't get it.
Speaker 1:Or they put up that sign like, context needed, please. Right? And so you can kinda do that.
Speaker 4:Yeah. But I I feel like that stuff can just like I'd rather just have that be in the like recommendation algorithm.
Speaker 1:Like sorted in the comments. If everyone in the
Speaker 4:comments is saying this is clickbait, just don't put it in my recommendation algorithm. Right? It's like also on x, there's Grok. Right? Yes.
Speaker 4:On every every Yeah. Post you can ask Grok. Yeah. I don't think I've ever used that.
Speaker 1:You've never used that.
Speaker 4:I think I've never.
Speaker 1:I use that.
Speaker 4:I find a little like, you know, where you add a little bit of AI here and there. I I like basically never use anything. I'm Maybe that's just, you
Speaker 1:know I'm a fan. I I I do see posts where there's there's, you know, a a list of companies that someone's talking. Oh, here are all the cool companies that I like, and I can click and just get a little summary of each company, and I don't need to pull it out, go to a different model. I don't know.
Speaker 2:I feel like once a day, Grock will share context on something that is actually valuable.
Speaker 1:Yeah. Totally.
Speaker 2:Totally. Like in general
Speaker 1:You mean in the comments? Because somebody will add it.
Speaker 2:Somebody added it. Like I remember, Eric Sufort yesterday was responding to something. Somebody who's basically saying like shareholders voted against these Mhmm. Tesla x AI investment. Yeah.
Speaker 2:And then obviously they went ahead with it. And Eric responded and he was like, hey, was this real? And then Gronk just shared kind of the history on it. And it's like, somebody else could have shared that Yeah. And provided the context.
Speaker 2:Yeah. But yeah, I can do it instantly. Just helpful to have
Speaker 1:a little bit extra context there. Interesting. App loving, profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today.
Speaker 2:Suspended Cap says, I gotta really respect Zuck willing to spend over 50% of revenue next year when they still haven't delivered a single compelling AI product. Hell yeah.
Speaker 1:Yeah. I mean, the CapEx is crazy.
Speaker 6:So No. That is $200,000,000,000
Speaker 1:in revenue in 2025. That's so It's much a lot of ads. But they're now they're gonna plot plow 135,000,000,000 according to The Wall Street Journal. New York Times said 01/15. But either way, it's like more than half of Yeah.
Speaker 1:The revenues
Speaker 2:I think I think posts like this are are funny. Mhmm. And I think you can definitely agree that Meta has not shipped a a super compelling, you know, AI product
Speaker 1:Yeah.
Speaker 2:Yet, even though Meta Vibes has traction, not necessarily in our world, but certainly has some traction. But you have to like this is the guy that owns the world's largest trough or one of the world's largest troughs. Right? And so he has he knows that it's working. Yes.
Speaker 2:Like he knows he can see the future. Right? He has all the data. Yeah. He knows that people say they don't like AI content.
Speaker 2:Yeah. But They do. In reality, they actually do.
Speaker 1:They Yeah.
Speaker 2:Engage with it. Watch it. They make it.
Speaker 1:Engagement must be growing exponentially. Even though it's very small it it started at a base of zero, and then you got Harry Potter, Balenciaga. And now you have So 10 videos a week that are going so far.
Speaker 2:So I look at this different than than than some of the metaverse bets just because
Speaker 1:Yeah.
Speaker 2:Zuck is one of the biggest beneficiaries Yeah. Of Gen AI. Yeah. And so it's totally warranted to say, hey, we should invest an obscene amount of money in this. This is clearly the future.
Speaker 1:Yeah. Yeah. I mean, there's so many different ways that no matter how you play out the AI future, Meta is a beneficiary of that. So it makes sense that they're investing so heavily. But it is a remarkable shift in the financial structure of the business.
Speaker 1:If go back to thinking of previous years, spending more than half of revenue on CapEx feels like a lot for a software company, right? It's like high margin and whatnot. Anyway, vibes.co, where d to c brands, b to b startups, and AI companies advertise on streaming TV, pick channels, target audiences, measure sales just like on Meta.
Speaker 2:Let's talk about Tesla.
Speaker 1:Tesla reported revenue at 24,900,000,000.0, and this beat the the the consensus estimate just slightly. Consensus was 24,780,000,000.00. But down. 11.4% from the quarter when revenue was 28.13% decline year over year. And Tesla's down 2% this morning.
Speaker 1:There was also a 61% drop in profit, and they're shuttering the high end models, production. So they're stopping producing Model Ss and Model Xs, which I think the Model S and Model X features will be sort of rolled into trim levels. Like, we've already heard about the so, I was debating Jordy about this earlier. I thought that the Model y and the Model x were the same length. The Model x is, in fact, almost a foot longer, so it is a bigger vehicle.
Speaker 1:They both have the option to have three rows. They both have very similar specs, but the Model X is bigger. But in China, we've heard that they're working on the Model YL, which is a long wheelbase version that will be, I believe, longer than the Model X. So you have the ability to get a big Model Y, and then they're already doing different trim levels with long range, plaid. So if you take the plaid badge and you put that on the Model Y L and then you add different specs, and you say, oh, I want to spec my Model Y with Goldwing going.
Speaker 1:Maybe all of a sudden, you're back in Model X territory, and you're dropping 100 ks. But there's just no denying that the Model S and X sales have slowed, and there's a whole bunch more competition at the high end EV market from Lucid, Rivian. Yeah. And and so Elon is fully thinking about what's next. He broke out subscriptions for Autopilot self driving for the first time.
Speaker 1:He was talking a huge amount about cyber cabs and robotaxis. He's making that cash investment in x AI. And of course, he's really focused on optimist humanoid robots. And it seems like he could be scaling up production there very, very quickly. And so analysts
Speaker 2:subs of full self driving.
Speaker 1:Yeah. Not bad.
Speaker 2:And it's what? 89? I'd actually don't know.
Speaker 5:I think
Speaker 4:you can look at that.
Speaker 2:I think I remember it's $89 a month.
Speaker 1:Yeah. But analysts how much is it?
Speaker 2:I guess $49 a month for vehicles with enhanced autopilot. Okay.
Speaker 1:There are few tiers. But Yeah. I mean, if you if you build up the subscription
Speaker 7:What is it?
Speaker 1:How much is it?
Speaker 7:I think it's a 100.
Speaker 1:100 a month? Yeah. Yeah. So, you know, you got a billion dollars a year coming in from that. Not bad.
Speaker 1:And, of course, very high margin because you don't need to manufacture it. Analysts thought Tesla was gonna be cash flow negative for the quarter, but they actually were positive. They generated $1,400,000,000 in free cash flow, and this was down just 30%. So there's plenty of cash to keep the aggressive investments going, especially as Elon shifts the business towards autonomy. He's not shy about making the change aggressively.
Speaker 1:He said, we would expect over time to make far more cybercabs than all of our other vehicles combined. So he's he's fully fully going
Speaker 2:all in on that. Yeah. It's a little I think it's a little jarring for some people just because historically, car companies have thrived by Yeah. Creating the perfect car in each category for every different consumer. And Elon is basically saying, actually, I know I know what you want, and I'm gonna give you it.
Speaker 2:Yeah. It's you know, you don't need that many options Yeah. Where you're gonna be able, like you said, to just leverage the different trim levels Yep. And spec out the car to satisfy.
Speaker 1:And probably, you know, I I I do think over time, like, less and less trim levels, and then and then eventually, it's just cybercabs, no one's buying cars anymore, if if it really goes that way. I I think this rollout will be slow. I mean, the original rollout of the electric car was twenty years, right, for Tesla to actually get to saturation where you're seeing electric cars all over the roads. It'll probably be the same with people giving up their cars and going all in on I only use Waymo and Tesla CyberCab or maybe I just use one. But Elon's certainly thinking in decades and not afraid to cut an entire business line that is still popular with a lot of people.
Speaker 1:I mean, was just talking to somebody yesterday who was singing the praises of his Tesla Model X and how much he loves that and how he would never get a Y because the X is so much more premium. Everything about it's better. It costs a lot of money when he bought it. He still loves it. But, you know, Elon's thinking to the future.
Speaker 1:Anyway, Gemini three Pro, Google's most intelligent model yet. State of the art reasoning, next level of ad coding, and deep multimodal understanding. I love that sound
Speaker 2:so I know you do. Tesla also announced a $2,000,000,000 investment into XAI.
Speaker 1:Didn't they they just did 20. Is this part of the 20, I wonder?
Speaker 2:I don't know. But, yeah. So there was a nonbinding Tesla shareholder vote on authorizing an investment in XAI that failed, although one point, 1,060,000,000 votes were in favor versus 916,000,000 against absentation absentations?
Speaker 7:Abstentions.
Speaker 1:Like like like Counted. Staining.
Speaker 2:Yeah. Not Yeah. Counted as no under Tesla bylaws leading to rejection. So they had run this as a vote. It got rejected, but Elon said, we're doing it anyways.
Speaker 1:Mhmm. Yeah. Doing it live.
Speaker 2:Let's go to the
Speaker 1:timeline reactions.
Speaker 2:Yeah. Pull up this
Speaker 1:I I don't know where you wanna start, but Tate Kim has a good one if you wanna start there with Microsoft.
Speaker 2:Wherever you wanna I wanted to pull up this video Do it. Of Optimus learning it has to make up for s slash x sales after they were canceled.
Speaker 1:Oh, yeah. This one's this is such a crazy video. Taking off the VR headset and just smashing them.
Speaker 4:I love that.
Speaker 1:This is really a Tesla OptiS, isn't it? The same time, like, the the the motion's remarkable. And the force with which the OptiS just smashes the water bottle open is crazy.
Speaker 2:It's amazing. This thing is gonna be super powerful.
Speaker 1:The insurance business that will be built around having a humanoid in your home is going to be remarkable. Remarkable. You're also gonna need to secure these things. So let me tell you about CrowdStrike. Your business is AI.
Speaker 1:Their business is securing it. CrowdStrike secures AI and stops glitches.
Speaker 2:This was one of the standout moments of the earnings call for me. Please. Elon and Tesla are transitioning their Fremont facility to make Optimus. Yeah. And they plan to scale that facility up to be able to make a million of these things a year on relatively near term time horizon.
Speaker 2:So very, very significant. He talked about how the robot would be able to basically learn on the job. Mhmm. It's gonna be able to do a number of valuable tasks. And, I think I mean, the big question for me is like Will
Speaker 1:they ads? That's the question for me.
Speaker 2:Will they have an ad support?
Speaker 1:You have the Tesla walking around your house, and it sees you pull out some sort of random credit card, and it's like, are you not on a ramp? Like, what's going on here?
Speaker 2:Or it sees you like having like,
Speaker 1:from Athletic Greens.
Speaker 2:Yeah, exactly.
Speaker 1:Yeah.
Speaker 2:But yeah, we'll see. So the the question I have is Yeah. At what point will humanoids actually be like ROI positive for consumers
Speaker 1:For consumers.
Speaker 2:In the home or or even just everyday businesses. Yeah. And I would just judge that based on like, okay, you're buying this thing upfront. Yeah. Maybe a business finances it, maybe somebody finances it or they just pay cash.
Speaker 2:But is it valuable? Is it is it valuable enough to actually replace a human? Because competing with your the the optimist is gonna be competing with jobs that are maybe like $40.50, 60 k a year Yeah. Like somewhere in that range.
Speaker 1:Yeah.
Speaker 2:And so that's a pretty high bar to clear. Totally. So we'll see.
Speaker 1:Yeah. And and and and the the risk reward calculation of, okay, you have this thing. It has cameras and audio. It's on all the time. Is it safe?
Speaker 1:If it falls over, is it gonna crush my dog or hurt someone or smash something? Even just, like, doing the dishes. We've seen some incredible demos of humanoid robots doing the dishes. But you have to imagine that every once in a while, it's gonna break a dish. If it's breaking dishes at 10 times the rate of humans, like, needs to be superhuman and not breaking dishes.
Speaker 1:Because if it smashes a wine glass while it's doing the dishes, that's and can I clean that up? Is it gonna be able to do that on Yep. Day one? There will be, you know, a a like a slow ramp of people feeling like, it's good enough. I'm getting a lot of value.
Speaker 1:Obviously, there'll be a lot of novelty. There's already a lot of novelty. Like, the the Optimus is deployed in in most of the Tesla showrooms.
Speaker 2:Some breaking news Yes. From Reuters twenty one minutes ago. Exclusive Musk's x AI and merger talks with x AI ahead of planned IPO.
Speaker 1:SpaceX and x AI?
Speaker 2:SpaceX and x AI Wow. Ahead of planned IPO.
Speaker 1:Okay.
Speaker 2:Yeah. So this was something that were talking about predicting months ago at this point. But this very no huge surprise here. This always felt like it made sense. I'll read through the article.
Speaker 2:I don't know how much context it actually has. So they're in discussions ahead of a blockbuster IPO planned for later this year. The combination would bring Musk's rockets, Starlink satellites, and x social media platform, and the Grok AI chatbot under one roof. Imagine imagine owning x, the Internet's dive bar Yeah. And space in one ticker.
Speaker 1:I mean, the company's launched, like, a couple years apart. I think like 2007 and 2005 or something. Like, flashing back to 2007, 2010. I mean, like, Twitter and that space company that hasn't successfully launched anything, they're gonna be part of the same company one day. That is a wild future.
Speaker 2:Yeah. I am curious to see if they end up at some point just spinning x, the social platform out again. Like, does it really
Speaker 1:need I don't think think of so. I think I think Musk holding companies just gets bigger and bigger and bigger. And it all Yeah. Goes together into one cause there's a lot of efficiencies there. Sean Puri from My First Million had a post about this, how he thinks Elon should IPO his personal holding company.
Speaker 1:So you get you get a stakes in everything that he has stakes in, and he was proposing it like a Berkshire type structure. But instead of Berkshire Hathaway, it would be like Musk Holdings or something or Musk's initials. I think a lot of people would be would be buyers of that. But it'll be interesting to see the s ones getting more complicated by the day as the as the investment banks prepare for the June IPO for SpaceX now. Is June the
Speaker 2:That's target.
Speaker 1:Day? But it's late in June. It's June 29 or nineteenth or something?
Speaker 2:Yep. Yeah. So, yeah, we'll we'll see. I mean, expected this to happen. Yeah.
Speaker 2:I think it it it builds a, you know, again, some people will be frustrated with the narrative, the data centers in space narrative.
Speaker 1:Yeah.
Speaker 2:But
Speaker 1:No. It's real. It's real and We
Speaker 2:saw this sort of like Unbelievable. Sort of organized Yeah. Narrative shift around SpaceX being the data centers in space play. Yeah.
Speaker 1:That was the bridge. Like, without that, it didn't make any sense. And then and then once if you can get behind, okay, data centers in space is maybe possible, maybe
Speaker 2:on land too. Then then
Speaker 1:it starts to make sense that the merger fits a little bit more. The the other the other interesting data centers in space thing, x AI, SpaceX thing, I just I don't know. I I I there is a there is a fair, like, odd history of telecom companies owning media companies. So Comcast, NBC, Universal. Right?
Speaker 1:Comcast was the owner of that.
Speaker 2:Variety. History. Yeah. Rhyming.
Speaker 1:And so, like, there is this world where you have the pipes and then you need something to push through the pipes and so you own a media company that pushes content through that pipe. And it it sort of rhymes. Right? It's like you have Starlink Internet connections, and then you need something to go over those Internet connections. So X, the social network, pipes over those.
Speaker 1:It's it's if you squint Yeah. It's not the craziest thing. The other interesting thing that I want to do, or we should talk to some of the folks who have done some of this data center and space analysis, is is how powerful are the Starlink satellites right now? Like, they have some onboard compute. They don't have, you know, NVIDIA GPUs.
Speaker 1:They don't have whole racks in space, but they they probably have some compute just to run the network. And I'm wondering, like, in terms of energy draw, are they one order of magnitude off, two orders of magnitude off? Like, how underpowered are the current Starlink satellites? Because that could be an indicator of, okay, well, they need to scale them up by this much. They need to add this capability.
Speaker 1:They need to do X, Y, Z. Really quickly, eleven Labs. Build intelligent real time conversational agents. Reimagine human technology interaction in eleven Labs.
Speaker 2:Speaking of eleven Labs
Speaker 1:Yes.
Speaker 2:Eleven Labs is the new sponsor of Audi f one. Yes. John, you sent me a picture the other day of of Audi out, I think testing. Yeah. And you were like, it's insane.
Speaker 1:That they don't have the labs logo on there.
Speaker 2:Exactly. They they the sponsors were looking pretty sparse but Yeah. They're just adding them kind of in in real time.
Speaker 1:Because it's fun to roll them out.
Speaker 2:Super super exciting and exciting. I I love the Audi the new Audi livery. It looks very unique. Yeah. MKBHD responded to the news that Tesla is discontinuing the Model S and Model X.
Speaker 2:And said, oh, Roadster is so cooked. No. Elon just responded a little bit ago said new Roadster will be incredible.
Speaker 1:So maybe
Speaker 2:MKBHD is in the process of getting community noted. Elon said on the earnings call they're aiming to unveil in April and production will commence in twelve to eighteen months. In April. The shareholder deck notes the Roadster is in design development. Lars, VP of vehicle engineering said the Roadster was definitely in development.
Speaker 2:So it will be pretty funny to be in like, you know, something that hopefully will look like a hype look and feel like a hypercar. Yes. But then you're just self driving in traffic. It's like effectively like depending on like pricing Yeah. It it it's not gonna be like price.
Speaker 2:I think I I'm hoping it looks like a hyper car Yeah. But prices like, you know, a Turbo S
Speaker 1:or something like that. Yeah. I I think I think the the secret to success is probably 200 to $300,000, but it looks like a cyber car or cyber truck Huracan, like low to the ground, super insane performance, self driving, but it has like entirely new aesthetics that turn heads. Like the Cybertruck is kind of What
Speaker 2:was he saying on Joe Rogan? He was talking was like wasn't he alluding to the roadster potentially being able to take flight
Speaker 1:Yes.
Speaker 2:Of some sort?
Speaker 1:That's exactly it. Yes. And and we were debating with Doug G. Murrow from Cars and Bids and his own YouTube channel. What does the definition of fly mean?
Speaker 1:Like, we've seen the Xiaomi car jump. It can jump over a pothole. It can jump a couple inches off. There's that Mercedes Maybach GLS that can bounce. So what does fly really mean?
Speaker 1:Fly a foot? Fly 10 feet? I I don't think anyone's expecting that in the next year, it will just actually take off and fly you from LA to San Francisco or something. That would be
Speaker 2:Never bet against Elon.
Speaker 1:I I mean, I would I would want that so so badly. But there are a lot of other cool things that we could do. I think the one that I it wasn't the one that I predicted, like, basically, it you'll be able to pull up to a parking spot, and it will be able to use, like, fans or something like that to, like, lift off the ground and slide into a parking spot or some it'll have some, like, gimmicky
Speaker 2:It'll shoot the battery out so hard that it sends the car
Speaker 1:Shoes the battery down, which pushes the car up into the air, thus and then you you there's an ejector seat. You will be flying. The car will not be flying. Who
Speaker 2:knows? Insane.
Speaker 1:Hopefully, it's available on Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI. Rounding really quickly. Tyler has a point.
Speaker 4:I mean, is about the question of, like, can you run GPUs on Starlink? Yes. So like, a current satellite, if you're looking at the the v two mini satellite Yeah. The peak power draw is, like, around, like, 3,000 watts.
Speaker 1:Okay.
Speaker 4:So if you're running an h 100, right? So this is, I mean, maybe a couple years old Yeah. It's only, 700. So you could actually put a you could put a few h one hundreds on a StarLink right now.
Speaker 1:Wait. Wait. Sorry. Sorry. 300 watts currently, and an h 100 is
Speaker 4:3,000.
Speaker 1:3,000. Oh, okay. Yeah. You could put a couple
Speaker 4:That's like 300
Speaker 1:theory, but you wouldn't be able to anything else. But like Yeah.
Speaker 4:And I mean, like, three h hundreds h one hundreds is, like, not useful really at all for, like, any for serving any big model.
Speaker 1:But Yeah. But we're not four orders magnitude off from doing something. I mean, you can do inference on just a laptop. Right? And that doesn't have the power draw anywhere near an h 100 rack.
Speaker 1:Granted, it's gonna be slow. It's not gonna be functional. But, like, we are in the ballpark.
Speaker 2:Somebody just gonna put somebody should put a Mac mini on a weather balloon?
Speaker 1:The first
Speaker 2:Just send it the second.
Speaker 1:You really could. I First, space center. Have you ever seen those trends of, we sent x to space? It's like a proven viral format on YouTube. I think someone sent pizza to space.
Speaker 1:People send like a piano to space and it plays a song. They're basically, YouTubers figured out that you could get a weather balloon that you could just buy for like, I don't know, not that much money and just release it and it would just fly up, up, up, up, up. And then you would reach the sky and it would take pictures and time lapse photos or video automatically.
Speaker 2:You can get a weather balloon, a 22 foot scientific weather balloon on eBay for $220.
Speaker 1:What should we send to space? It's kinda played out, but may yeah. Garlic bread to space. Bobby, thank you. Yeah.
Speaker 1:The garlic the garlic bread went to space. I don't know why. I don't know why, but, yeah, the sending
Speaker 2:Multi bot.
Speaker 1:To space. Multi bot to space on a on a I I yeah. I also I don't know if you can get Starlink working
Speaker 2:I think, I mean, ideally, Tyler
Speaker 1:Yeah.
Speaker 2:If we got a handful of weather balloons and we sent you up there with
Speaker 4:Then I could I could parachute That Red Bull video.
Speaker 2:Just one shot it.
Speaker 1:Just do it.
Speaker 2:Yeah. Just one shot it. Okay. Last thing on Elon Sure. Looking at prediction market
Speaker 1:Mhmm.
Speaker 2:On Cauchy. When will Elon become a trillionaire? He's got a 65% chance before 2027 just in time for the midterms. It's not like that will be used it's not like that will be used against him I I at all.
Speaker 1:There's still a chance that it takes the pressure off the billionaires because like, oh, there's a new thing we gotta focus on. Like, no one's billionaires right now.
Speaker 2:All the billionaires start ganging up on Elon
Speaker 1:Let's actually just do a trillionaire tax. This billion why are we focused on billionaires? Trillionaires have so much more.
Speaker 2:Waste of time.
Speaker 1:Waste of time. Let's just narrow it down to trillionaires. Just the trillionaire tax. Anyway, Console. Console builds AI agents that automate 70% of ITHR and finance support giving employees instant resolution access requests and password resets.
Speaker 1:Where else do we wanna go? Do we wanna go more reactions to, earnings? There's a whole bunch of other stuff in here. Yeah. Microsoft is on sale according to Jay Gatsby because Joe Wiesenthal said, incredible day according to Barclays Alexander Altman.
Speaker 1:Microsoft has lost $441,000,000,000 of market cap today, marking it the second largest drop ever since NVIDIA lost nearly 600,000,000,000 after DeepSeek. Wow. Yeah. It's the worst day for Microsoft since 2020, since, since, like, the COVID sell off. Absolutely remarkable.
Speaker 1:But, I mean, I don't fully I don't fully get it. It seems like Microsoft is very well positioned. I mean, maybe they're they're facing the same, like, implementation question as Meta, but it seems like they they have all the key ingredients. I mean, they don't have they don't have they certainly don't have, like, the crazy team that Zoc just went and poached, but they got OpenAI. They have the partnership.
Speaker 1:And so they have access to the models where in a way that Meta does not. And so Meta does need to build the team to build the competitive models.
Speaker 2:Yeah. Worse sell offs in Microsoft history, the crash of eighty seven, then in 2000, April
Speaker 1:Down 24 30% in one day in '87.
Speaker 2:We don't know how to Brutal. We don't know how to create sell offs like that anymore. Hopefully, don't. Same as last words.
Speaker 1:It was like Everything candles down 40% teach you a lesson.
Speaker 2:Yep.
Speaker 1:Yeah. There This is some This is an interesting history here.
Speaker 2:Well, Microsoft is unfazed. When you look
Speaker 1:at it this way, it is truly, you know, the the what, fifteenth worst sell off in in in Microsoft history. I think they're gonna get through it. But not but Stan disagrees. Stan says, it's over. Thanks for playing.
Speaker 1:To zero likes? How did this even get I'm gonna like this.
Speaker 2:We're gonna like it.
Speaker 1:Good, Stan. I don't agree, but very funny post. Andrew Curran is sharing a post from the information. NVIDIA, Microsoft, and Amazon are all ponying up.
Speaker 2:Let's give it up for talks.
Speaker 1:Billion, as much as 60,000,000,000 in OpenAI.
Speaker 2:We don't know what kind of talks they are. Are they early? Medium. Medium.
Speaker 1:Late stage talks. Extreme. Advanced talks. Intense. Preliminary talks.
Speaker 1:There's lots of different talks. But this is in a this is on top of the 30,000,000,000 that SoftBank is in talks for, which means that the 100,000,000,000 target for the next round is almost is are almost is already almost met. And of course, is gonna go back to is this circular blah blah blah blah. I don't know. I it it it feels like the circular the circularity narrative, we're just at a scale where if you want to raise a $100,000,000,000, like, who are you going to?
Speaker 1:Who who would be okay? Like, it's it's it's governments and the hyperscalers. Like, there just aren't that many funds that are saying like, yeah, I'd love to lead a $100,000,000,000 round. I don't have the money. Like, it's just it's just impossible.
Speaker 2:They're tapped out.
Speaker 1:Like, yeah. All the all the traditional financial players are very much tapped out.
Speaker 2:And so Let's go to company Yeah. Marketcap.com.
Speaker 1:Okay. While we pull that up, let me tell you about Figma. Figma make isn't your average vibe coding tool. It lives in Figma, so outputs look good, feel real, stay connected to how teams build, create code back prototypes
Speaker 2:so at the 830,000,000,000 Okay. That this round is being discussed at, JPMorgan is slightly worth slightly more at $8,832,000,000,000.
Speaker 8:Mhmm.
Speaker 2:But then below that, OpenAI will be valued more than Samsung, Tencent, Visa, ExxonMobil, ASML, Johnson and Johnson, Mastercard Data is the world. Costco. Man. A lot of them. Yeah.
Speaker 2:You start being able to add up some of the biggest companies in the world and still not be worth more than.
Speaker 1:Zero hedge had some extra context. Q3 twenty twenty five, Meta crashes on surging CapEx forecast. Q4 twenty twenty five, Meta soars on surging CapEx forecast.
Speaker 2:Let's go.
Speaker 1:Research and Invest pushed back, though. So no, it soars on growth acceleration guide. CapEx held it back or could have opened it could have opened at around $8.80, and it's because of the profit. A lot of people are chiming in. So we'll talk
Speaker 2:to Buko Buko has continuously had great calls
Speaker 1:Yeah.
Speaker 2:On Meta. He I remember very distinctly when he would he shared multiple times over a few day period, like, Meta will start touching 600, and you need to develop the mental fortitude to buy even though everything even though everything in your mind will be telling you not to do it. Yeah. Yeah. Just hit the button.
Speaker 2:Yeah.
Speaker 1:Suspect Cap says, I gotta really respect Zuck willing to spend over 50% of revenue next year when they still on CapEx. When they still haven't delivered a single compelling AI product. Hell, yeah. But Pithia Cap chimes in and says, the ads are the compelling AI product. And this has been the under discussed narrative with their CapEx.
Speaker 1:They do break it out. For a long time, percent of CapEx, more than 50% of CapEx was going towards core AI. Just workloads for Instagram Reels recommendations, ad recommendations, running the core product. Different I mean, there is a specific chip for YouTube. Like, there's CapEx that goes into just running YouTube or just running Instagram.
Speaker 2:Yeah.
Speaker 1:And so it's it's, you know, not all AI, but it'll be interesting to see how that shifts. How much of this is, okay, this is generative AI workloads going forward. Is it more than 50% of this new of this new boost in in
Speaker 2:Brother Joe Weisenthal shares one of the best headlines that I've ever seen, which is Blackstone nears deal to become new world's largest shareholder.
Speaker 1:And Just in general?
Speaker 2:No. New World is a company.
Speaker 1:Oh, okay.
Speaker 2:Blackstone is in advanced talks to become the single largest shareholder of New World Development Mhmm. Company according to people familiar with the matter. A move that would see one of Hong Kong's richest family families relinquish control of a major asset. Mhmm. Under the proposed deal, The US company would be able to restructure the embattled developer.
Speaker 2:A New World could continue to try to offload assets to shore up liquidity. The family of Hong Kong tycoon, Henry Chung, currently holds about a 45% stake in New World. We need to bring the word tycoon to the West Coast. Tycoon. Sam Altman is an AI tycoon.
Speaker 1:Tycoon is good. We should do a list of the the top tycoons.
Speaker 2:Jensen is a chip tycoon.
Speaker 1:Yeah. Tycoon's a good one.
Speaker 2:Satya enterprise tycoon.
Speaker 1:We had tycoons during the railroad, Barons. It got it turned into a bit of a pejorative, but I think we can turn it down or turn it around. I think we can turn it around.
Speaker 2:It's such a fun word. Why should it be negative?
Speaker 1:Yeah. It sounds like Yahoo or like, you know, it's it feels like you're wearing a cowboy hat on a horse if you're a tycoon. That's right. You're running all over the economy. You're a tycoon.
Speaker 1:Cowboy hat
Speaker 2:on a horse.
Speaker 1:Yeah. You love it. Well, let me tell you about MongoDB. Choose a database built for flexibility and scale with best in class embedding models and re rankers. MongoDB has what you need to build.
Speaker 1:What's next?
Speaker 2:We have to talk about Genie.
Speaker 1:Genie. The genie is out of the lamp.
Speaker 2:Logan says introducing Project Genie, a frontier world model product powered by Genie three and available to g one Ultra users in The US starting today. Mhmm. Are you a g one ultra user? This morning. We are playing around.
Speaker 1:This got
Speaker 2:We are playing around with this this morning. It is wild. You can basically prompt an entire world. Yeah. It instantly turns into effectively a simple video game.
Speaker 8:Yeah.
Speaker 2:And you can create some really funny scenarios. And We will show you.
Speaker 1:They added the jump button. They added the jump button. You get to pick if it's third person or I guess what if you don't check that, it's first person. But sometimes, you even if you do check even if you don't check that, you can still wind up in a third person game if it's obviously a third person request. To add this the crouch dog.
Speaker 2:They need to add the crouch button.
Speaker 1:The crouch button next, and then the flash bang button probably.
Speaker 2:Woah.
Speaker 1:Yeah. You're jumping. This is so it's so fast. I mean, the the the previous Genie launch was still called Genie three. Right?
Speaker 4:It Well, no. I mean, yes. So this is not like a new product. This is just making it public. Yes.
Speaker 4:Like, so so I think it was in August when Genie three was like originally released. Yeah. But it was basically just the paper. And there were some demos. But no one could
Speaker 1:have to use So so cool. I Yeah. I mean, it it feels like more directable than v o three in some ways and it's certainly more stable as you move
Speaker 2:way cooler too because it's a world you could move around in.
Speaker 1:It's like
Speaker 2:it's not like v o three where you're just creating a a video. Yeah.
Speaker 4:The the memory is really good too. Oh, you can upload an image. Turn back.
Speaker 1:You can upload an image. That's I mean, get ready to play dinosaurs.
Speaker 2:Do you have the clip of
Speaker 1:of So we us driving. Got access. We we generated some. Now, it's in such high demand that you might not be able to generate these worlds for yourself immediately. There might be some rate limits going on.
Speaker 1:I'm sure the GPUs are on fire. It is gonna be Genie three day on the timeline for sure. People are gonna get crazy creative with this.
Speaker 2:Do you have John's first prompt?
Speaker 1:You can't access the videos?
Speaker 4:No. Because
Speaker 1:Oh, no. We didn't download them? No.
Speaker 4:Because I think think the site is being overloaded so much.
Speaker 2:Shane. Wow. Hey. Hey, Tyler. Take some responsibility.
Speaker 2:Take some You're 21 years old now. Take some ownership. Okay. Could have downloaded the video. I'll try
Speaker 4:to As the show go out goes on, I'll try to make a new one. Yeah.
Speaker 1:I mean yeah. Yeah. This is a good point by Noah in the chat. Wait. Can we just take a GTA six leak and generate the game so we don't have to keep waiting?
Speaker 2:So Pretty much.
Speaker 1:Like, first, I mean, it's incredible that even a product at Google scale, they knew that there was gonna be demand that they are, like, seeing rate limits. That's wild and incredibly bullish for AI and shows that there's so much more demand, and we need more chips and energy and and data centers and GPUs, obviously. But but on the flip side, we are gonna move the goalposts. This is this is AGI, but it's not sufficient AGI because my definition is not just the jump button. I want mechanics.
Speaker 1:I want we generated a video of Maybach driving on the Nurburgring. It was remarkably high fidelity. It was a little sluggish but that might just be the
Speaker 2:I think that's the driver.
Speaker 1:I think that's just Oh, you think it
Speaker 2:the driver. Tyler Tyler
Speaker 9:There's lot of body roll.
Speaker 2:This thing on the road, there was body roll.
Speaker 1:Yes.
Speaker 2:I was like, just put it in a straight line, Tyler. Yes.
Speaker 1:But but I want I want I I'm waiting. I'm moving the goalpost because I want Genie three or Genie four to be able to generate game mechanics. If I say I'm racing on the Nurburgring, I want a track timer. I want to be able to stop change my tires. I want to be able to get a refuel overtakes.
Speaker 1:I want overlays. I want boost pedals. I want DRS. I want DRS. I want shifting.
Speaker 1:I want the whole Forza simulation. The whole I wanna I want what what was what's the one that people actually use for the simulators? I forget it's called. I wanna be able to generate a set of Corsa in two seconds. So mechanics are clearly next.
Speaker 1:This is obviously Tyler said six months. We'll see. Over
Speaker 2:pull up this video from you
Speaker 4:in six months. You'll have full games.
Speaker 1:Months. This is the new AGI benchmark for
Speaker 2:Move it. Move it. Move it.
Speaker 1:Move There
Speaker 2:we go. Pull up this video from Ethan Malik. He had early access to Genie three world modeling. Huge leap forward in modeling physics, but some issues remain. Here is a bit of an otter airline pilot with a duck on its head walking through a Rothko inspired airport and an otter in a wingsuit flying through a city of Gothic towers.
Speaker 2:So this is why This this video is why we have 2 and a half $2,000,000,000,000 of capex for AI.
Speaker 1:This
Speaker 2:is Before AI, we would need, you know, a team of Yeah. You know, advanced motion graphics artists to work for, you know
Speaker 1:You could probably vibe code something like this in Unreal Engine in a day if you were if you were strong.
Speaker 2:John. What? Don't try to pop the bubble.
Speaker 1:You you could. I like the wingsuit though. This is fun. In a in a Gothic tower. It looks sort of like a Harry Potter world.
Speaker 1:Wow. It's really a full city of Gothic Gothic towers.
Speaker 2:Yeah. And so so
Speaker 1:I like the
Speaker 2:Potter. The thing that's wild Yeah. Is that it takes twenty seconds Yeah. To go from idea to this world.
Speaker 1:Yeah. Super cool. So Super, super cool. And you're just gonna see this like unlimited like, the people are gonna go and just generate Mario. And you'll just be like, well, I could just download Mario.
Speaker 1:Like, it's not like, I'm I'm okay with that. It's like when you go to, you know, mid journey, you say, make me a picture of a dog or Nano Banana, it's just like, that's just a picture of a dog. You just find a picture of What's cool is when it's like your dog in your house doing the specific mechanic that you wanted, and it's a reenactment from a film that your friend that you're in love with, and you're a mechanic, and you're creating this unique thing, and you're mixing together these interesting ideas. We're gonna see a ton
Speaker 2:took full ownership
Speaker 8:It just
Speaker 4:turned he turned it around.
Speaker 1:Okay. While we
Speaker 2:I made
Speaker 4:a new video.
Speaker 1:While we pull that up, let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest securely connecting bank accounts to move money, fight fraud, and improve lending, now with AI.
Speaker 2:Alright. Look at this.
Speaker 1:Oh, yeah. This is wait. This is a new one? This is a
Speaker 4:new one. I just made this.
Speaker 1:The original was not two tone.
Speaker 4:Yeah. This is a new I I just made this.
Speaker 2:Okay. Look at you barely keeping it
Speaker 1:on the
Speaker 4:road. It's really hard
Speaker 1:to It's really hard on the road. Still issue. You gotta so if you zoom in on this, the license plate does look a little AI generated. There are some artifacts, but
Speaker 2:That was a decent At
Speaker 1:this distance, this looks this looks
Speaker 2:Can he hit the apex?
Speaker 1:This looks photo real. Looks photo real.
Speaker 2:It's Can he hit the apex?
Speaker 1:Can he hit Oh. The The body
Speaker 2:roll. Oh.
Speaker 1:The body roll. You're actually going pretty fast. You're getting some speed on this thing.
Speaker 4:I think I fall off I I get off the
Speaker 9:Oh, no. The grass. Oh, no.
Speaker 1:Wait. What happened to the Oh, no. You're destroying the side rail. How'd you get on the other side of the side rail?
Speaker 2:It says Yeah. Okay. Crazy timing. Tyler turns 21 and he can't even keep a car. That was see any happy dads over there.
Speaker 1:Dude looks in here.
Speaker 4:No. But it does like when it was working so earlier, I I think there were just too many people using it. Yeah. But this took like maybe fifteen seconds.
Speaker 2:That's remarkable.
Speaker 4:It First, it like makes an image and then you can edit it. Yeah. And then from there, you can make the actual world
Speaker 6:Yeah.
Speaker 1:Yeah. Yeah. Play.
Speaker 4:Yeah. And it's like a minute long. Yeah. It's like yeah. Incredible.
Speaker 1:Josh Woodward has another clip he shared. Nano Banana Pro. He's the VP of at Google Google Labs, Gemini AI Studio. Nano Banana Plus Project Genie, low poly cowboy dreams, they've been fulfilled. Let's take a look at what Josh Woodward over at Google built with Genie three.
Speaker 1:So he takes the image. He's generated with Nano Banana Pro, drops it in, summarizes the environment, summarizes and it's interesting seeing, like, what does prompt engineering look like in this like, how what type of prompt do you want to put in? Cause I think we just put in like two words. We put in like Nurburgring, Germ track Germany. What happens if you add a little bit more there?
Speaker 1:How how far can you push this current state of the art? The horse can jump. AGI Achieved.
Speaker 2:AGI Achieved. AGI Do you think this is bullish for platforms like Roblox and Fortnite that have the existing network and they can inter integrate world models so that the players can that are already a part of these ecosystems and these economies can generate new worlds quickly, generate new games, new characters, etcetera? Or or is it as these world models get better, do they become Competitive. A bigger threat because anybody can just you know, I'm sure there's infrastructure providers that can say like, yeah, we're gonna handle everything from account creation to in game currency to things like Yeah.
Speaker 1:I mean, definitely competitive in the long term. In the medium term, like super good for prototyping and communication. And this is a key flow to, okay, you have an idea and you don't just wanna, you know, generate a basic image of the game that you're trying to build. You generate a demo, a prototype, and then you go from here into, okay, let's wire it up in Unreal Engine or Roblox or Minecraft or whatever we wanna do. And then Yeah.
Speaker 1:And then you have the full
Speaker 2:game I I think Roblox and Fortnite will prove that they have real network effects. Yeah. And it's gonna still make sense to create new games Yeah. Within these existing ecosystems.
Speaker 1:Ecosystems. Yeah. Yeah. Yeah. But it is it is a very different architecture if you but yeah.
Speaker 1:I don't know. I don't know how it how it how it interact. Like, if you're in Roblox, and then you wanna go into a fully generated experience, like, the persistence doesn't exist. You're not you're not in necessarily the same world. Just building, like, multiplayer capabilities in here seems very difficult.
Speaker 1:That seems like a real research challenge.
Speaker 4:Yeah. I think broadly, like, the the world model, like, world labs seems much more easy to integrate Yeah. At least in the short term to to something like Roblox. Yeah. Because, mean, this is literally just like generating frames on the fly.
Speaker 4:You're not actually making a Yeah. You know, three d, like, rendering.
Speaker 1:But it seems like it would be useful for training data as well. Yeah. Lots of lots of opportunities there. Well, speaking of training data, let me tell you about Labelbox. RL environments, voice, robotics, evals, and expert human data, Labelbox is the data factory behind the world's Well leading AI
Speaker 2:said, John.
Speaker 1:There are a lot of those. Google DeepMind created this short film AI is going to disrupt Hollywood sooner than most might expect. It's their short film, Dear Upstairs Neighbor. It's previewing at Sundance Festival. It's a story about noisy neighbors, but behind the scenes, it's about solving a huge challenge in generative AI control.
Speaker 1:Developed by Pixar alumni, an Academy Award winner, researchers and engineers, here's how it came together, says DeepMind. And there's a community note on here. Let's see what they said. The quoted video explains that the short film was driven through human made art with AI assisting and speeding up the process. OP is engaging poor Chubby, always getting community noted.
Speaker 1:We've seen a number of these. I think that's like, at a certain point
Speaker 2:Maybe that's assume his
Speaker 1:that things are happening. But the point still holds that this is disruptive. Who knows if it's completely disrupting? There's certainly I mean, there's demand for movies that are shot on film still. So how how quickly will all this roll out?
Speaker 1:But if you if you have a vision these days for, you know, an animated movie, you should just go try and make it at least. You have to imagine that even if you want to use a more traditional process and go through the traditional Hollywood pipeline, showing up to a pitch meeting at an agency with a pretty much polished AI version of your film is going to resonate in a way that a script might just get sent back in the mail room. Yep. So I don't know. Could I could imagine this in like the the prototyping, the the the story boarding phase really, really taking off.
Speaker 2:Staying in Google land. Please. Addy Osmani over at Google Cloud, shared some big changes to Gemini in Chrome, agentic browsing with auto browse, nana banana, and more. Let's pull up this video. You can see it here.
Speaker 1:It's a huge day for tech news today. We had so much earnings.
Speaker 2:I mean, all all earnings.
Speaker 1:Yeah. Week. All week, there's been a lot of stuff. But the other stuff was, like, plant. The the Clodbot stuff earlier was not.
Speaker 1:Is this is there audio on here? Can we play this this audio as well? Let's see.
Speaker 7:Chrome. Okay.
Speaker 1:Let's see. This is Gemini in Chrome, agentic browsing with auto browse. Nano Banana and more. Does it work? Let's see.
Speaker 1:It's a new
Speaker 7:state of the art model for in context image transformation.
Speaker 1:Mhmm.
Speaker 7:And traditionally, you wanted to see how furniture would look in a room, you'd have to download a photo, upload it to an editor, and hope for the best. Here with Nano Banana, you just point Gemini to an image already on your screen. Oh. And in this the prompt is showing You
Speaker 1:know why? With like AI in every feature? You you actually like downloading
Speaker 4:taking your the the normal thing and then just adding one extra AI button.
Speaker 1:I mean, I'm not a product manager at Meta, but you have to imagine that there's there's little features like this that can seep their way into Facebook and Instagram, where you see a photo of like like, you see a photo of a restaurant, and you're like, I think that'd be great for a team off-site. Let me just not download the photo and put me, you, and Jordy at the dinner table at the restaurant, you know, envisioning what we're like. I just hit share, and then I say, hey, put, you know, put the group chat that we're in on Instagram DMs in this video, in this photo. That'll be funny. It'll be it'll be more inspiring for them to be like, yeah, we should go to dinner there.
Speaker 1:Right?
Speaker 2:The feature in the video that actually got shown.
Speaker 1:Yeah.
Speaker 2:Yeah. I wonder if that should actually live like so in that example, you're looking at an apartment Yeah. Online and you're in your browser being like, make it look like Kelly Wursler
Speaker 1:Yeah. Yeah.
Speaker 2:Styled it. Yeah. And it adds a bunch of furniture. Should that live at the browser level or should it just live in Zillow or Redfin or Compass? Right?
Speaker 2:Yeah. It's kind of a question on where this With
Speaker 1:the OS layer. I know what you're gonna say. You're the OS layer or your OS build now. Right?
Speaker 2:No. I mean, in this case, I feel like it should be, like, actually in Redfin Yeah. And you should be able to cycle through a bunch of different And
Speaker 1:it will be. Interior design. I I I we have seen that every single layer of the stack is adding AI features Yes. From top to bottom.
Speaker 2:Interesting context here from compound two forty eight. Google with an absolutely murderous response to OpenAI's app Just killed apps. Highly strategic for Google. Launching a browser was a mistake by Sama and the OpenAI team. OpenAI was never gonna gain big browser share, but launching gave Google the needed cover to launch its Chrome AI embedding without violating antitrust because now it's a competitive response.
Speaker 1:Mhmm.
Speaker 2:Would they have had I don't know. I can't It's hard for me to believe that that Google I wouldn't be allowed to add AI
Speaker 1:I don't necessarily buy But it's an interesting take. And, you know, it's it's one position. Google's Google's using its browser incumbency as a distribution and learning angle for AI is gonna be exceedingly powerful. If you allow it, the browser is going to learn from everything you do online creating differentiation for its position for its position as a personal AI.
Speaker 2:Well, big day today. We're not getting any fines from the chat because we're both suited up.
Speaker 1:Yes. It's been a minute. Minute. I like that. Thanks for thanks
Speaker 2:for holding us accountable.
Speaker 1:Turbo puffer. Surveillance vector and full text search. Built from first principles and object storage. Fast, 10 x cheaper, and extremely scalable. There there is so much new.
Speaker 1:TikTok uninstalls surge a 150% after apps US takeover. That is a crazy surge.
Speaker 2:Okay. Yeah. So there's a new king of the App Store.
Speaker 1:Okay. What's up?
Speaker 2:It's called up scrolled. Yes. It is a TikTok Instagram clone
Speaker 1:Clone? Okay.
Speaker 2:Competitor.
Speaker 1:Mhmm.
Speaker 2:Just getting off the ground. Mhmm. But I guess, yeah, people I think people had the perception that TikTok was immediate immediately censoring a bunch of different topics.
Speaker 1:Yeah. Yeah.
Speaker 2:Political topics Yep. And then just decide to upscroll, like, use that as an opportunity to say, hey. We're the alternative.
Speaker 1:Yeah. It was interesting because I I know people were tracking the TikTok changing ownership. Is TikTok gonna get banned? There were a lot of TikTok creators that took that as an opportunity to diversify to reels and shorts, and it just became obvious that you should be a multi platform creator around that time. But I wasn't aware that the TikTok community was going to be tracking, like, when the servers actually shifted over to Oracle.
Speaker 1:It feels a little wonky and not something that would go super viral. I think people notice because videos stopped being served. Yeah. Yeah. Exactly.
Speaker 1:So there was an outage, and and and that certainly drove deletion.
Speaker 2:Sean Sean highlighted something.
Speaker 1:Yeah. But but again, to be clear, it's it's like there is a base level of TikTok uninstalls, and then that surged a 150%. That doesn't mean that they're declining by 50% or anything like that. Like, there's still there's still new installs
Speaker 2:It's pulling up scroll Yes. The the rumble of TikTok.
Speaker 1:Really? The rumble of TikTok.
Speaker 2:Sean Frank says TikTok views are down. People are blaming the new owners. I think this is just proof that TikTok was botting views the whole time.
Speaker 1:Mhmm.
Speaker 2:Your 100,000 view video is probably reaching 25,000 real people. So, no no surprise here for me. I always felt like It was always obvious that there were very real people on TikTok. I know people that went over to TikTok Of course. They'd start making videos about startups.
Speaker 2:They'd start getting real inbound from people on LinkedIn.
Speaker 1:Yeah. Totally.
Speaker 2:So they very clearly was always a bunch of real people there. But TikTok had every incentive to just bought all the views because what happens if somebody's getting way more views on TikTok versus Instagram? They're gonna lean in. Yeah. They're gonna say like, have more followers on TikTok.
Speaker 2:Yeah. I should be creating content there and that created a a flywheel. Yeah. And so you can imagine as things shifted over, who who knows? Right?
Speaker 2:Yeah. Like, the the the new basically, new the new product. Yeah. I mean, had some system that was
Speaker 1:I I I like different formats. I liked Vine back in the day. At one point, I did set up a TikTok, and I uploaded, like, two or three videos. I was just trying to see, like, what it felt like to use that platform. And I noticed even though I came to the platform with zero followers, the three or two or three videos that I uploaded immediately got 500 views each.
Speaker 1:And I thought that the model was you get more of an opportunity to, like, sort of audition your content in the algorithm, and then if it works, it can blow up very quickly. And I think that that's somewhat true. Like, when I started my YouTube channel, the first videos that I put up got a 100 views. And for, like, a year, if I broke a thousand views a video, was like, this is amazing. Like, crazy.
Speaker 1:You're really grinding at this year. But on TikTok, you you post and you immediately get 500. And I I've talked to some folks years ago who would set up a new TikTok account for a brand, and they would launch one video that was so polished and so designed to be go viral. Like, they blow up a car, and they'd spent all this money shooting this, and it would actually just they knew it would go viral, and it just immediately go viral even though it's a fresh account. There were no followers because they just knew it was good content, it would get shared.
Speaker 1:TikTok would audition it to like a 100 people
Speaker 2:launched, it was a period where it was so difficult to grow Yeah. On Instagram. Yeah. Like that there was a huge challenge. If you're a new creator, you go on Instagram and be really frustrated because your stuff just wasn't getting shared with people that didn't already follow you.
Speaker 2:Totally. Well, we have some comments under here. There's there's Last last thing on the front. Turner, Novak commented, maybe they were views from Chinese users which are gone now. Yeah.
Speaker 2:It's also could be international users. Remember, there's like, if you have a new US app under US ownership Mhmm. Is it getting shared with with, with international users that are using other versions of TikTok? Yeah. Unclear.
Speaker 2:So
Speaker 1:Well, let's bring in our first guest of the show, Anton from Lovable. While he comes on, I'm gonna tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern small and medium sized businesses. Welcome back to the show. Welcome to the TBP and Ultradome. Thanks for taking the time to come and hang out with us.
Speaker 2:West Coast West Coast tour.
Speaker 6:It's it's cool to be here in person.
Speaker 1:Thank
Speaker 6:you. It's been like more than six months, but it feels like much more shit, Tom has changed. See, well, on my side, the business is doing better than ever.
Speaker 1:I can imagine. Every time I every time I see a post about you, from you, there's a new biggest number. How are how is growth going? Is it still accelerating? How's the business doing?
Speaker 6:We are doing great on the growth side.
Speaker 1:Great.
Speaker 6:We hit 300,000,000 ARR two months after 200
Speaker 2:louder in person.
Speaker 6:But more interestingly Yes.
Speaker 1:To me
Speaker 6:is the builders are doing the real things. I I was on the airport from San Francisco here Yeah. And Adam at ownin.com, who
Speaker 1:Yeah.
Speaker 6:Helps tens of thousands of restaurants
Speaker 2:Yeah.
Speaker 6:He he was, like, super excited and raving about he had built out a new product line over the weekend in eight hours, where he was he was solving a new problem where all the customers were saying, like, we keep getting these phone calls Mhmm. It's not always someone picking up. And he built an AI who answers the voice the phone for the restaurants. And it was all working. You can configure it just like you were training
Speaker 1:a Yeah. Yeah.
Speaker 6:Human. And and he was now building it releasing it next with his team. Yeah. And we're seeing all of these new opportunities where people who use Lovable as their technical co founder Sure. They build businesses.
Speaker 6:Yeah. And maybe you saw, like, I was super shocked when someone was shipping AI generated dog pictures in frames Yeah.
Speaker 2:Yeah. To
Speaker 6:pet owners, And they were they're making $300,000 per per month. I'm building that out How without any technical
Speaker 1:are they how are they actually doing that? Obviously, I think maybe you can describe like the the the technical co founder process of building a new application that someone Well, I But then I wanna know about the top of funnel
Speaker 2:for Yeah. Part of I mean, I always saw Lovable's growth as millions of people out in the world that historically were just perpetually searching for a technical co founder. Yeah. Problem is a lot of people that are technical have a bunch of great ideas. Yep.
Speaker 2:They don't necessarily need an idea guy. And so there's all this like sort of pent up creative entrepreneurial energy that just never really goes anywhere because somebody doesn't take the time to actually learn to code Yeah. They never find that that right partner.
Speaker 6:Yeah. That's what we're seeing. Mhmm. And mission is about human creativity Yeah. Which is very fun to empower.
Speaker 6:But it's not just new businesses. There's a lot of companies, and I I keep hearing from how they build out AI applications and and agents using Lovable. And once you get into it, if you especially if you look back compared to six months ago, this feels like to me when I used it, there's no limits on most of what you can do. The the thing where where lovable I what I'm hearing is that it's a bit unique is that there are a lot of tools that are coming from kind of developers, and then more people keep using them. We started with the nontechnical people.
Speaker 6:Mhmm. And that makes it just super simple, but it still has the same capabilities that more sophisticated users are are looking for in the
Speaker 4:same way.
Speaker 2:How are you thinking about working with companies like Owner that I'm not super familiar with Owner. We gotta have Adam Yeah. Founder on. But my understanding, it's somewhat of like a system of record for a restaurant owner. Is that right?
Speaker 2:And so in theory, he could also offer Lovable as like an integration so that individual businesses that are using owner can expand kind of and just build products that they themselves want, not necessarily have to rely on owner. Is is that right? Or are you seeing opportunities like that with other companies?
Speaker 6:Yeah. I think we we have these partnership programs, and I that's a good idea. I'm gonna bring that back to to talk to Adam specifically. Yeah. But what's what we're
Speaker 2:Theoretically, seeing somebody is on owner, they'd have a feature that there's a feature that they want that's not being offered, and they can just build it. They don't even have to request Yeah. A feature.
Speaker 6:I mean, that that's what the future looks like. And what we've seen is that Lovable is first used by the communication medium. And there are a lot of people that have stopped using Google Slides and PowerPoint, and they just now, they just prompted away because it just Sure. Looks so nice. Yeah.
Speaker 6:I I think it's a better medium than the animated videos you were talking about previously. But but then, now a lot of companies, and us is one of those, we're running we're switching out SaaS Mhmm. Providers to using tools that we use build ourselves. Sure. And we connect we we tell Lovable, can you connect these two different applications, SaaS tools, internal tools that we built and add AI in between of those.
Speaker 6:And that's, I think, more of the future of how companies are going to be run.
Speaker 2:Where Okay. Let's talk about let's talk about kind of vibe coding debt and debt. Yeah. Because we we've gone through this where we'll build a product. We built we built like a a guest directory, very simple product that would basically every time an episode would get published
Speaker 1:Yeah.
Speaker 2:We'd it we had an app that would effectively scrape the episode, figure out who was the guest, link everything out and publish it. And it and it we it was built in a in a day by by one of our interns last summer. And then he had to spend like the entire summer just like maintaining it and like shipping incremental updates. So are you seeing any changes on that front? Like, obviously, it's easier to make products, maybe it's easier to maintain them.
Speaker 1:Mhmm.
Speaker 2:But, I think the concern is, like, if you've created, you know, 200 different SaaS tools Mhmm. And internal tools, as part of your organization, then you end up spending really valuable resources at the company, you know, human labor time, just kind of maintaining these systems and making sure they keep running.
Speaker 6:Can I talk a bit about the recent updates we did yesterday
Speaker 1:Oh, please?
Speaker 6:Lovable. So Yeah. There's a much more advanced planning mode that helps asking the you or your intern questions about what it is that you're trying to achieve. Mhmm. And that Yeah.
Speaker 6:Makes the AI be able to, you know, find a better solution that doesn't need that type of maintenance. And and that's one of the many improvements that we shipped yesterday. Another big one is
Speaker 2:So basically, like, you if you vibe code poorly or if you prompt poorly, you're adding a bunch of kind of like vibe coding debt. And if you spend a little bit more time like prompting
Speaker 6:Yeah. I think people should just move fast and and be not be like, oh, I have to think through this, so it's main maintainable. It should move really fast. Mhmm. To get something that works and that's like useful.
Speaker 6:Yeah. And but then you should sit down and you should reconsider talking to Lovable and asking, should I restart from from the beginning? Like, I'm having these problems with the maintenance.
Speaker 1:Mhmm.
Speaker 6:Is this should I just be keeping shipping incremental updates, or is there something else that could actually solve this on a deeper level? And and keep having that conversation and be creative in terms of what could be the right solution for this. Yep. Because the systems are they're extremely intelligent now, and they're just getting more and more intelligent. So that should be your status quo.
Speaker 6:Yeah. Explain your situation so that which the AI doesn't know Yeah. And then it will help help guide you through what's the best path
Speaker 1:feels like the the the solution to vibe coding is more vibe coding or more code. Right? And so but but the question
Speaker 2:It says the vibe coding dealer.
Speaker 1:Yeah. He's like, actually, you need more. But I believe that. I believe that. But my I I think the the the interesting question is the shift to mobile, and I wanna know how you're thinking about that transition.
Speaker 1:Because if you go and vibe code an application and you sit down, you really think about it, you work with the tool to plan and and and test, and you're giving feedback and you spend, you know, a full day or a couple hours and you got it in a good spot, but then there's like that one little, oh, actually, this button isn't quite working. Can you just go check out? It doesn't work in this scenario. That winds up just being normally like you text a developer, you Slack them. How are you thinking about, like, long term integration with end users who might not be jumping into the tool themselves and might not even be, you know, have the time to actually sit down and vibe code?
Speaker 6:I think the future of how Teams operate is, of course, changing. Yeah. And I think there there should be someone who is, like, ultimately responsible for the quality Sure. Of the application. That not be you, even though you can throw in ideas of changes, and then someone looks at it before it goes out to your customers.
Speaker 7:Got it.
Speaker 6:So that's a high level of how I think about it. And there is a lot of new capabilities that we are looking at to make sure that quality is always maintained. And we, over the last nine months Mhmm. We've been super focused on security, which is this like, if you're putting something in production, that should be your first your first priority. Mhmm.
Speaker 6:And and there's a lot Yeah. Built in that makes applications secure from the ground up
Speaker 2:Yeah. In in how we approach Yeah. The the challenge right now is if you have a hit product, you could go to a 100,000,000 users in forty eight hours. We saw this. What what was the company that was like Palantir for dating that
Speaker 1:They really go that big.
Speaker 2:That's Yeah. No. No. No. This they went the Tee dating app.
Speaker 2:Remember?
Speaker 9:Oh, yeah.
Speaker 2:They they they went They
Speaker 1:don't call it Palantir for dating. But yeah. Yeah. They own the Tee
Speaker 2:dating app really. They they have security issue.
Speaker 6:Went to the They didn't use lovable.
Speaker 1:Yes. Yes. Yes. Yes. Be fair.
Speaker 1:Yes.
Speaker 2:But but, yeah, the founder was just kind of by coding
Speaker 1:Yeah. Yeah. On a think he had some team
Speaker 2:members too. Yeah. Sure. But, like, clearly, they were moving quickly and some some mistakes were made.
Speaker 1:Yeah. What it has anything changed in your mindset about the level that you want to operate at or integrate with versus being a web app with cloud hosting, operating into the browser level, into the OS level, launching an an a dedicated app on a phone or on a on a Mac Yeah. Or command line tools? How are you thinking about the the different unlocks that you get at different levels?
Speaker 6:Yeah. Great question. So first of all, I I use Lovable on the phone all the time Sure. And it's really like a good mobile experience Sure. That's why we we are seeing usage there.
Speaker 6:Yeah. I I know that a lot of entrepreneurs, they're building out complete work OS systems. Yeah. I talked to Gwyneth Paltrow yesterday, and she they're building a lovable brain that accumulates all the information that they need running their company.
Speaker 1:Okay.
Speaker 6:And what that gets some more capabilities from is that it connect connect to your local file system. Yeah. And it can connect to I mean, in the future, I don't know exactly what the mobile device is going to look like. Mhmm. But it's going to the AI has to have context on every everything you do on your phone for it to be fully unlocked for all the capabilities unlocked.
Speaker 6:And that's something we're looking at, like, exactly how does that future look like as we are building towards the best in interface for humans to use technology and use AI. And that and because that's the vision we
Speaker 1:are. Yeah. How do you think about the trade offs between consumer and enterprise? Obviously, you can use it to make something that replaces a slide deck, just communication, external marketing materials, landing pages. You can also use it for building an internal tool and just and just spin something up internally to a company that's never going outside.
Speaker 1:Both are very interesting markets. Do you wanna serve both? Do you think that there's a value to focusing on one over the other?
Speaker 6:Yeah. Question. So Lovable started out from the AI early AI adopters. Yeah. And that's where we're seeing now growth Yeah.
Speaker 6:In all directions because people love how there's maybe some Swedish design sensibility, like things just works. Yeah. And then we put a lot of hard engineering in making making it simple. Yeah. Right?
Speaker 6:And one of the directions is spreading in the is in the enterprise. People come to the work and they show, like, look how much we can get done Mhmm. Using Gloveable at work. So now we have all of these required features for enterprises Mhmm. As so SCIM Sure.
Speaker 6:And so on. Yeah. And specifically, what we like, I'll I'll tell you an example of one of them. I had a really large company. They have 80,000 plus real estate agents globally, dozens of countries, hundreds of websites.
Speaker 6:Sure. They had the offer to re platform all these websites because there's always this pain for marketers changing And the VP of Marketing there, it would that would take a year. The VP of marketing found Lovable, and he was like, wow, I can just build one of those websites in in a few minutes. Yeah. And then they sat down and they looked at how can can
Speaker 7:we These
Speaker 2:are websites for individual homes? For so brands.
Speaker 6:Oh, real estate agents across different geos. Yeah. Right. And then and then over three weeks, they replatformed and then they saved $2,000,000 in a on a solution, which was part paying for AI chatbots on the website. Yeah.
Speaker 6:And their their chief innovation officer just says, like, this is the biggest change that the company has experienced in how fast they can move, how they could build out an AI chatbot just by prompting Lovable. And and that's a large company, and that's them building product lines that are facing their end customers.
Speaker 2:Mhmm.
Speaker 6:Where what's what they're seeing even more volume of is, of course, internal applications. Sure. And applicant tracking systems built from the ground up by the people who are using those applicant tracking systems with AI, with thousands of people being How
Speaker 2:are you thinking about headcount planning, specifically on the engineering side?
Speaker 6:Yes. It's a good question. I I I was at the Anthropic office and they're I I think they're hiring a lot of people just like we are doing. Because if what you're actually seeing is that if you use AI correctly as as a business, which is one of my personal top goals or the entire company's top goal out of three goals, is us learning how to use AI as productively as possible. And that means that each each human has more output.
Speaker 4:Right? Yeah. If you
Speaker 6:do that really well. And as we are learning that and figuring that out, we're putting that into the product and giving our users all the best practices in how to connect into all the internal tools that your company is running on to and share context across everything you're doing. Like, when you're doing research on a podcast, you should all be able to just ask an AI, what what question should I ask Anton? And that that all of that infrastructure, all of that tooling, you should be able to build on Lovable or just Yeah. Get someone's else tool and copy it into your workspace.
Speaker 2:How much do you guys pay attention to job descriptions at various companies in terms of understanding market pull? I could imagine people, companies that wouldn't necessarily hire software engineers saying, like, we want engineers that are can, you know, use Lovable and and other relevant tools. Interesting. Because I think one of the one of the interesting things that we're trying to understand from just kinda understanding, like, how job how how we'll see job growth in some areas, maybe job reduction in other areas is I think people are underestimating how many companies there will just be a net new role where somebody or multiple people are creating and maintaining software that the company is creating. And we're an example of that.
Speaker 2:Right? Historically, a media company like, if you if you had a fledgling media company, we brought Tyler on, last I think, like, q one of last year. We'd only been in market for a handful of months. And normally, if somebody was building a media company and they were telling me they were hiring, or a podcast, right, and they were telling me they were hiring a software engineer in their, you know, second quarter in business, I'd be like, dude, you you should focus on like a million other things. Right?
Speaker 2:Just make good content. But in our case, we realized, hey, we can build quite a lot of internal tooling for what we're doing to make the show better. And so I think we're gonna see a lot of job growth from companies that, again, wouldn't normally hire any anybody internally doing software engineering.
Speaker 6:It's it's a good question. I I don't look at
Speaker 3:the
Speaker 6:external other people's job offers. I my background is in physics. So I just break things down into, like, what is it that what are the governing principles for make making a team work really well, and people work humans working well together and getting output as a company. And what I'm seeing is that you want the team of people who they don't have to be soft software engineers, but they're very curious and they get it. They get new things, understand them very quickly.
Speaker 6:And and that's one of the things that we're fundamentally fundamentally hiring for. I mean, I I can take it on another example because I I love I'm so inspired every time I meet someone who's has like will change their lives, who's Lovable. So it's a it's a guy who, Alan, he built a healthcare AI staffing company. In five months, there is a million dollars in ARR, and he couldn't have been able to build Yeah. Something like this.
Speaker 6:And then
Speaker 2:Yeah. There's so many niche labor marketplaces. These were They used to be like more popular like venture backed businesses and then a lot of VCs figured out like, hey, you can build a great business here but you end up kind of capping out. Yeah. There's some software component to do with like matching and I hear.
Speaker 2:Kind of booking, payments, stuff like that. Ultimately, a lot of these businesses should just remain like somewhat niche. Right? You could have a $10,000,000 a year business doing staffing
Speaker 1:Yep.
Speaker 2:And have it, you know, like the people running it. Right? You have a lean team Yep. But now but historically, it was a challenge because you're there was a number of companies that would build like out of the box like marketplace software. But usually, they were like, it was you had to do so much work to like actually adapt the software that it was kind of this trade off of like, do I build it in house?
Speaker 2:Do
Speaker 1:I used use to abuse WordPress like crazy. They they build a whole social network on WordPress or try and modify it with e commerce stuff and and it would take a year and millions of dollars to build something that now it takes a weekend.
Speaker 2:Yeah. How do you how do you lead the team around dealing with competition and, you know, every you guys are now competing with pretty much every company in the whole world. It seems like, you know, from hyperscalers, right, that that are building vibe coding tools to other startups. Like, what's your philosophy around dealing with with competition? Just kind of like emotionally, like, in the organization.
Speaker 2:Yeah.
Speaker 6:I mean, first of all, what we're seeing is that people come back to Lovable and compare it with other tools. They say, like, wow, this is such a wonderful simpler experience that works better for them, that will actually work I mean, it's it's more capable in many many, many dimensions. So that is it just gives us a lot of belief in what we're doing. And Yeah. The way we think about it is to not look at what others are doing.
Speaker 6:It's just to look at what do our customers want us to do. And and being very grounded in that and that
Speaker 2:we Have you banned the, like, competition Slack channel? You know? Like, where people because it would literally be every day. It's like, hey, like, we have a new venture this.
Speaker 1:Yeah. Sense.
Speaker 2:It's a sign that it's a sign
Speaker 6:that So we but, yeah, we we fundamentally have say, we're building the best product based on first principles what we think is the best way to do these things. And it often means not adding new features, adding new capabilities, but thinking very long term
Speaker 1:Sure.
Speaker 6:How is this whole experience going to be for us humans Mhmm. As we interact with super intelligence, basically Mhmm. In the future. And that's what we're that's what we're driving us. Building that product is is the motivator for everyone.
Speaker 2:What about international expansion? You're obviously in Europe, here already. Are you opening offices in other continents?
Speaker 6:Yeah. We haven't announced more offices than Stockholm and then and then a great go to market announce? What's that? Having to I I can't come back. We have more announcements, but we have people hired a few people are are hired remotely Yeah.
Speaker 6:Including here in The US in The in various cities. Yeah. Cool. So that's what it's like. But we we getting a lot of value of being in person Mhmm.
Speaker 6:People who who are very, like, long term thinking, very, very bought into the mission that we're on based in Stockholm.
Speaker 1:A lot of How do you think about retention? There's so many amazing tools that come out. Like, I remember those, it was Lenza magic avatars. Everyone had to take their photo and do the the the Studio Ghibli precursor, like, a year earlier, the style transfer on their image. And then people sort of, like, they tried it and then they churned out.
Speaker 1:But at the same time, like website builders have incredibly low churn because once you build your website, even if you're not using the tool every day, you're using it as hosting and you might be dumping be jumping back in to make changes. How are you thinking about the different retention dynamics, the different cohorts? How are things looking?
Speaker 6:We're seeing very, very healthy retention. We're like, oh, net dollar retention has been more than a 100%. Go. But we're also foreseeing some AI tourists that are just trying a lot
Speaker 1:exist and they just stop by and then they move on to something else. Right? Mhmm.
Speaker 6:Yeah. And and what we what we're doing is that we're splitting out the different segments as as I'm saying, like, what what are the jobs to be done segments that we could do better. Fundamentally, what we what we're noticing is that for most things we're adding, which is about making the whole whole experience to do more things, it's more seamless, like more capabilities
Speaker 1:Exactly.
Speaker 6:More seamless without making it more a more complex experience. Yeah. That's helping their attention across the board for Yeah.
Speaker 1:For everyone. And and less of a point solution. Less of, yeah, I used that for slides this week, but then there's a new one over there. I gotta try the new thing. More of like, actually run your entire business.
Speaker 1:Build a new business on this and then stay with that for a long time. That makes a ton of sense. Yep. What about recommendations for other software products, databases? I've I've seen a bunch of charts where the default recommendation for Suba Base, for example, is just climbing like crazy because it's recommended by By else.
Speaker 1:By by yeah. By you and by a back end and by a number of the models. What does that does that business evolve into an affiliate model? Do you have do you have demand from your customers to educate them about the different trade offs when they're building, when they're picking something? Or do you want all of that to be abstracted away so that the end user doesn't even know what a database is, for example?
Speaker 1:And database is just one example. There's a million things that you probably plug in with. Right?
Speaker 6:This this is a great question. Yeah. We have some really good product integrations, and you mentioned mentioned Superbase Yeah. Is one of them. Yeah.
Speaker 6:And we are recovering more and more. I have payments, email Yeah. And communications. We want those we want more of those amazing partnerships. Yeah.
Speaker 6:I I think, like, there shouldn't be any limits of those integrations. You should be able to ask Lovable to, I mean, get cleaning for your podcast studio Yeah. Or whatever. And and that should be that shouldn't be done by us. Sure.
Speaker 6:It should be a partnership where we're currently we're currently just making more of those partnerships successful. Mhmm. And there are multiple companies that have been seeing the absolute majority of their growth coming from us, actually. Sure. And then but then at some some point, yeah, I mean, we we need to let our users get the best product integration if there are many ones
Speaker 2:should be a little bit worried if the majority of their growth is coming from you guys. Just Given that your whole the whole purpose of the of the company is to make it easy to build software and Sure. Eventually you guys will just Yep. Naturally do some do some of those things. Yeah.
Speaker 6:I mean, the integrations, I'm happy to not do them. We we want to focus on the interface, the app creation layer. And underneath, there needs to be a lot of things that connect to very very technically challenging systems to build Yeah. The infrastructure and so on that. Yeah.
Speaker 6:We don't need to put, like, our our efforts into into building. So it's for the we we want to do a lot more partnership this year.
Speaker 1:Yeah. Makes
Speaker 2:sense. Talk about the dynamics between Lovable and all the different labs. I'm sure that you have very open dialogue with them around just like integrating with new tools, getting previews of models, all that kind of thing. And I'm sure part of why you're on the West Coast is just to spend time with with the different teams.
Speaker 6:Yeah. Those those relationships are really good. Mhmm. We are fundamentally listening to the users more than them. We're building for the 99% while they're Please.
Speaker 2:Listen to your users less, you really want to No, I'm kidding.
Speaker 6:Yeah. No. And what like, they're have to spend so much of their focus on the strategy on like building these models and making like pumps, squeezing out more and more juice from those models. And we're in this place, which is very favorable favorable for the end users. We're we're not tied to a specific model.
Speaker 6:We we use a combination at LevelUp with different models, and that serves that gives a better user experience in the end with the trade off of speed and the the highest quality for each specific task.
Speaker 2:How yeah. How did you and the team react to Claude Bot? Was there any kind of, like, new kind of user paradigms that that you were inspired by anything to take away and kind of integrate? I mean, had Peter on the show Tuesday, a couple days ago, and he was very open. Like, he's just like in it to he's not he's clearly not in it to make money.
Speaker 2:Yeah. Like, he's in it for the love of the game and just We kind of asked him, you know, do you do you think that people will clone what you're doing or or copy it or or build on top of it? And he was like, yeah, I do. It's cool. So kind of an unexpected answer, but I'm curious if there's anything that you thought was particularly interesting that you can bring back to Lovable.
Speaker 6:Yes. I love Peter. I'm happy you had him on the show. I I think, like, for me and many people in the team have been building our own versions of Yeah. This personal assistant that you just talk to, you record audio to, and Talk on your phone.
Speaker 6:Yeah. In my case, on my my computer. And then what we're, of course, thinking about, which is like the other top goal for this year, to provide the best workspace or the best way to collaborate as a team. Mhmm. And that, of course, has a big part of that is being able to talk to an agent that has access to all the all of your different tools that you once you're building with Lovable and can collect the can pull out the data when you need it.
Speaker 6:Mhmm. And I think I'm I'm very happy about this open source project in in particular getting a lot of traction. It is is my roots as well.
Speaker 1:Yeah. Waking everyone up to what's possible. It was real, like, feeling the AGI moment generally, and maybe not everyone reaches for open source and all that's entailed with that, but it's sort of just like a new call to action for everyone to try new tools. So Yeah.
Speaker 6:Overall I
Speaker 1:mean, the good, very bullish.
Speaker 6:Twitter Twitter likes this. It's a completely new thing study. You can try out. From in the end, what users want is something that's simple and that's very, very trusted, high security, high reliability. And the the one you're building a strategy like us, that's what we're focusing on.
Speaker 6:Yeah. What is it that most people want, and what's the sustaining product that you want to build.
Speaker 2:What social platform is most important to Lovable's growth at the moment?
Speaker 6:I think I'm not sure if my team likes me sharing data here, but Twitter and LinkedIn is what are the ones I know are the big ones. Interesting. And what we're seeing is Instagram
Speaker 2:because I because I yeah. Because I feel like products when they actually go mainstream like, going mainstream looks like nav like, going over to Instagram
Speaker 1:We handle many other platforms. Feels like beyond a niche, which I think of LinkedIn and access. But, yeah, I mean, it's a big community, so it makes a ton of sense, especially with some of the some of the larger enterprises that you're working with, the business side. That makes a ton of sense. What what does the top of funnel look like and growth function look like?
Speaker 1:Is there a flywheel where someone builds and then shares and then I imagine that there's, you know, links built with Lovable in the footer, but is that a real engine of growth or is or or advertising, like, what what's driving growth overall at the high level?
Speaker 6:Yeah. So we're seeing about 300,000,000 visits to allowable applications per month.
Speaker 1:Okay.
Speaker 6:So that is a real effect. Yeah. People are like, oh, this is this great website. Yeah. And most of the time, that leading to conversion is that you're just talking to the person, like, oh, yeah, you built it with Lovable.
Speaker 6:Sure. And that that is a part of the biggest channel, which is just word-of-mouth. Yep. Yeah. And that continues to be, like, absolutely
Speaker 1:They see something cool even if it's just a small demo, even if they're not paying for that business, They see it and they're like, I wanna do that, but for me or
Speaker 6:my Yep. They they hear I mean, they hear about us from the friends Sure. Or they see about us on the Internet. Yeah. Yeah.
Speaker 6:And, yeah, I'm looking at investing more into growth Right. Of course. And and then I think Instagram and getting growth marketing really really strong, it could be the the next big channel.
Speaker 1:Well, Super Bowl's coming up. It's not too late to throw something together. Maybe next next
Speaker 6:year. Oh, we'll see.
Speaker 2:It's not enough. It's enough. Awesome.
Speaker 1:Thank you so much for coming on the show. Thank you. This was fantastic. Have a great day. Have a great rest of your trip.
Speaker 1:We really appreciate you coming and we will tell you about fin dot ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. Hi. Up next we have
Speaker 2:I'm expecting a Super Bowl ad.
Speaker 1:I I want a Super Bowl ad. They they could do some really fun stuff. I mean, some of the customer testimonials would be great. Even if they go with something more they they should build the entire ad in Lovable, dog food the product. We have Christian Garrett and Deleon Asperuhov in the restream waiting room.
Speaker 1:We will bring them in to the TVP in Ultradome. Delian, Christian, how are you doing? How are you feeling?
Speaker 3:There they go. What's going on? Ready to go, baby.
Speaker 1:Live from New York. You guys look good
Speaker 3:Good to you,
Speaker 1:Take us through the news, break it down for us. This is year four, correct?
Speaker 5:Year five.
Speaker 2:Year five. Woah.
Speaker 3:Third year of doing the daytime forum. So we started it back in the day just as like a small dinner series. Yeah. And then three years ago, kind of experimented with daytime forum. That went great.
Speaker 3:And then this could be our third time doing it.
Speaker 1:Okay. What's special about this time? Who's on the lineup?
Speaker 5:You wanna start? I'll start. I mean, obviously, the February is is great timing for us to have another event here. We're very excited about that. I think the key focus this year outside of continuing to build on what the forum has always been about, which is building bridges between technology and government, technology sector and government, is gonna be increased focus not just on technological leadership, but industrial leadership.
Speaker 5:Mhmm. And then as well as looking at having leadership among our allies. So I think this year you'll see a bigger expansion of the industries where technology is having an impact and playing a critical role. Mhmm. And you'll see leaders from companies that are leaders in those industries and you'll also see a lot of folks coming from abroad and participating as well.
Speaker 5:So I think you're just seeing that the relationship of the bridge between technology and government is actually a key framework for building deep relations between The US and our allies, as well as building deep relationships and strengthening other industries.
Speaker 3:And we didn't say it, but March 24, Washington DC. For now, we've only announced some of the, like, the private, you know, basically speakers. We haven't announced any of the Gov speakers yet. Mhmm. But it's folks like Trey Stevens from Andoril Founders Fund, Vinod Khosla from Khosla Ventures, Brad Lightcap from OpenAI, Shyam Sankar from Palantir, a bunch more that we'll start to, you know, basically release.
Speaker 3:But, yeah, what I like about this year is we're also going to start to expand themes a little bit. There's going to be a strong, basically, biotechnology, you know, sort of focus and some folks both within the administration, within private industry, talking about basically how we need to make sure that we don't lose that entire, like, supply chain industry to China the same way that we have with, like, consumer electronics or humanoids. You're starting to see some, like, early signs towards that, and there will even be some joint policy put out that HVF will be sort of endorsing. And so what's been cool is as the, like, forum has been around for several years, We're now not just, like, acting as a gathering place, but it's even a place for people to start to think about, you know, not just meeting, but even, like, publishing policy together that aligns sort of, like, private public incentives in a way that is, like, best for the nation. And then throughout all of this, you know, like I said, we started this five years ago, obviously, under the Biden administration Yeah.
Speaker 3:Continuing to maintain, I think, you know, sort of true bipartisanship. Yeah. You know, Vinod Khosla obviously has a certain set of, you know, sort of thoughts about, you know, sort of policies, regulations, etcetera. I may not necessarily agree with all of them. We try to throughout both the forum, the events that we host, everything is pretty consistently even across the aisle.
Speaker 3:And we try and stick with the centrists on both sides that can actually reach across the aisle and produce productive policy together. Yeah. You won't see a ton of the, you know, sort of extremists from either, you know, either party there.
Speaker 1:That's great. I noticed Young Liu from Foxconn is attending. Interesting company. Obviously, everyone's very familiar. Do you think there's gonna be more energy about let's bring more Foxconn manufacturing to America or just start ups trying to work with Foxconn?
Speaker 1:There was this leak that that OpenAI might be working with Foxconn
Speaker 2:To make
Speaker 9:sweet on the new
Speaker 1:sweet pea earbuds. And it feels like more and more companies as they think about hardware, they're gonna be wanting to establish relationship with Foxconn. That's sort of the beauty of this, at least from the business side. What what what's interesting about Foxconn? Why is he important to the conference?
Speaker 5:Well, I think, first off, you you have Foxconn, Qualcomm. You'll have some other names that we announced across these other kind of categories of companies that have maybe been in industries that weren't viewed as technology industries, but now increasingly are. And I think a lot of leaders that are coming there are really just representing a trend that you've seen, which is once again technology industry is a great way to build deepening relationships and partnerships with our allies. And to your point, it works both ways. Right?
Speaker 5:Yes. You'll see just like TSMC has made a huge investment in the state of Arizona and you're seeing that from other companies as well here domestically. You're also seeing companies abroad continue to invest in other countries and scale there through partnerships like these. An example, in another country, we've seen Androle, for example, invest heavily. Androle is a portfolio company for Founders Fund and 137 for us respectively.
Speaker 5:Androle invest heavily in countries like The UK, Australia and Japan, just recently opening their office there. Japan is another country as well as many others like South Korea and Europe that are increasingly opening their doors to become manufacturing hubs for the reunification here in The US, as well as supporting their own reunification efforts. And I think, yeah, you're gonna have to see many companies like Foxconn play a critical role as the West tries to shift off of reliance on Chinese capacity across critical industries.
Speaker 3:Sure. We, as much as possible, obviously, try to make it so that it's either bipartisan from the, like, you know, elected officials and, you know, sort of Congress. But we do try to, as much as possible, whichever administration basically is in office, try to reflect some of their priorities. And what you've obviously seen under this administration is, you know, them leaning into, you know, making sure that our allies are, you know, sort of contributing their fair share, but also reestablishing their own reindustrialization efforts. And so I think a, you know, significant theme of this year's forum is going to be having a lot more international presence.
Speaker 3:And there are to both, you know, sort of learn from how The US is but also partner with some of these companies to bring those technologies locally, partner with some of their local, you know, sort of primes and re industrialization efforts to accelerate those. In some ways, these trends that you're seeing in The US, The United States is much better off if France, if Germany, if The United Kingdom, if Australia, if Japan are mimicking basically those same technological patterns. And so that's definitely gonna be a major, you know, sort of topic of this year's forum.
Speaker 1:Yeah. I know you haven't announced the government attendees, but is there a desire to have international leaders attend as well? Is this gonna be the next Davos in a couple years? Or do you wanna keep it focused on domestic policy makers, US policy makers, senators, representatives?
Speaker 5:I mean, obviously, the event being in DC and the core focus is on the technology sector and the government sector in The US. But the event's always been international. Mhmm. You know, from the beginnings, we've had foreign ambassadors from other countries attend. We had the VP of Taiwan speak multiple times.
Speaker 5:Yeah. I think you will see a lot more international leadership attend as well. I think it's reflective, to Dalian's point, that this really is about the West being successful and Mhmm. You know, the concept of it's not US alone. Right?
Speaker 5:And so I think, yes, you will see that represented. Most of the leadership, of course, is still going to be heavily domestic. Right? And so leaders from Congress, leaders from the administration, etcetera. But you will definitely see a lot more leadership from from countries abroad and our allies, and that's gonna be very exciting.
Speaker 5:That's gonna be from The Middle East, Japan, South Korea, Australia, Taiwan, and Europe.
Speaker 3:Water You'll see like in the long term, I think the way that this will always break down is it'll probably be like 85%, 90% domestic focus, but there'll always be like a twinge of international, and so think that's what it's been probably historically on the attendee side of things. And this year, the first time, there will be a few more sort of like internationally focused panels. But it's not gonna, I think, quite go to like Davos level, which is like Yeah. Be like kind of global elite in some ways. It's always gonna be primarily sort of United States focused with a twinge of international.
Speaker 2:Mhmm. What are all the ways that people can participate, view, you know, watch from home Yep. Be a part of it, whether as a sponsor, all that stuff?
Speaker 3:Yeah. So the, you know, event is invite only to participate during the day in Washington, D. C. But it is going be about 1,000 people, so it's a relatively sort of broad audience that we'll be of bringing in there. We'll also be livestreaming all of the panels on our YouTube and X accounts.
Speaker 3:And then there will be, you know, a couple of media groups that are livestreaming from there, some traditional ones like Bloomberg and some super exciting novel ones like TVPN on-site, you know, there. So there'll be a variety of different livestreams to tune into that I think will give you a feel of the event, both the official panels as as obviously the side conversations that you guys will be doing.
Speaker 1:Yeah. That's great. Awesome. What is the business structure of Hillen Valley now? Is it its own nonprofit?
Speaker 1:How is
Speaker 3:this We are officially a five zero one c three. Okay. So this is the first year ever. We are welcome to the board of the Hillen Valley Forum Foundation. Yeah.
Speaker 3:Five zero one c three, you know,
Speaker 2:to Are you guys just being memetic with OpenAI?
Speaker 1:Yeah. Wait. Are you considering a for profit conversion? Because I feel like the ads, really, we could do a lot with each other here.
Speaker 5:There's a lot more to be announced like Delian said, so just stay tuned. Yeah.
Speaker 1:So we
Speaker 7:do have full time staff, which is really exciting. That's cool.
Speaker 3:Yeah. You know, Chris and I were starting to get a little too stretched in between, you know, both of us having too many jobs. So Yeah. It is nice finally that And we and
Speaker 5:we lost the key leader as well. So that would be really stretch that
Speaker 3:Yeah. Yeah. Believe now the youngest undersecretary in United States history. Handsome. And most handsome.
Speaker 3:Goddamn.
Speaker 1:Some of
Speaker 5:those photos on the
Speaker 2:Most lux max.
Speaker 1:Damn. Oh, yeah. It's true. Oh, yeah. I meet under secretary then.
Speaker 3:I'm his under secretary.
Speaker 1:So, yeah, talk talk more broadly about the 2026 calendar, 2027 calendar. People know the annual event in DC. There was that one off event with All In. There was a special Hill and Valley sort of collab. Is there a plan to do a quarterly series, have other dinners, go off the hill and have something in the valley?
Speaker 1:What what are you thinking?
Speaker 2:Yeah. I I think it's something
Speaker 5:that we're open to opportunistically. It's not something we're committed to or it's part of the plan. We very much focus on the main event every year. But absolutely, you know, we actually just did something recently with FII who Oh, yeah. Is also they do an incredible job.
Speaker 5:Their conference is right after the Hilla Valley, so I recommend most people, which a lot of us are, will end up flying straight to that right after. And, yeah, Rich Yoti has done an incredible job at really gathering a lot of world leaders and running an incredible event in Saudi, and they've done events globally. We did a collab there and brought a lot of Silicon Valley leadership. You know, Ruth Porat from Google attended. Sriram, right from the White House and the administration, attended and spoke, and a bunch of other folks.
Speaker 5:And so I think, you know, we we'll look at these opportunities where we can try to help bring more of really Silicon Valley to these other events internationally, particularly, you know, when it aligns with countries that are our allies and they're focused on building deep bridges between technology and government. Yeah. And so, you know, I think you'll see some of those maybe internationally or potentially, obviously, domestically, the the one off event with the all in guys with with Jake and and Friedberg and and and Sachs, obviously, in his role organizing that along with Jacob. Jacob. That was incredible.
Speaker 5:We love to do more things like this. Just opportunistic. So if it happens multiple times in a year, great. If it doesn't happen, also great.
Speaker 3:Yeah. I think one of the ambitions that I have for the event is starting to become, you know, sort of more deep in particular user sectors, like this year, very intentionally trying to go a bit, you sort of deeper into biotech. I could imagine eventually where, you know, you have the marquee event, you know, on a particular day of the week, but there may be some, like, subsector tracks, you know, over time where we do, like, Hill and Valley Space, Hill and Valley Biotech, Hill Valley Industrialization, Hill and Valley Rare Earths, and there's maybe, like, subtracts. Again, with the goal of this being, like, I don't wanna just gather people for gathering people's sake, like, maybe that's what they do in Davos, but, like, you know, the goal is, like, I would like to actually make sure that, like, policy I thought you
Speaker 2:were I thought your whole brand was I'm the networking guy.
Speaker 9:Network.
Speaker 1:Yeah. Yeah. This is a mastermind. Right? We should rebrand this
Speaker 5:as a Neither neither of us were at Domino's. That Yeah.
Speaker 3:Look. My favorite type of venture investing to do is just follow the heat. That is how you generate the
Speaker 1:Oh, yeah. Yeah. You just
Speaker 3:identify the heat, invest into the hottest deals, and other people are marking it up. You just gotta mark it up even faster at higher prices and chase momentum.
Speaker 1:Well, speaking of exciting deals, Bridget Mendler was on the show yesterday. The chat, we just wanna relay this. The chat is pulling for a Bridget Mendler. Attendance is speaking an an invite something like that. We'd love to see her there.
Speaker 5:Bridgette Bridgette's been there. Oh, fantastic. Okay.
Speaker 1:Chat's
Speaker 5:just Kevin a Whale also have to shout him out. He's been a veteran. I know he's coming on later. He's been he's attended every single forum.
Speaker 8:Wow.
Speaker 5:And has been an incredible partner for us and obviously now, you know, alongside OpenAI, I've been great partners. Yeah. And so, you know, the stuff he's working on on science by the way is awesome.
Speaker 1:I'm very
Speaker 5:glad he gets to talk a
Speaker 8:bit more
Speaker 5:about that later. That'd be great. So, yeah, it's it's Bridge is actually a veteran. So Fantastic.
Speaker 1:We need
Speaker 5:to find a poll for someone that has not attended before.
Speaker 1:Okay.
Speaker 3:I know what what I like is, like, there's some pretty we have, like, just a really solid veteran squad. It's like Alex Karp, been there every single year. Vinod Khosla, been there every single year. Trey Stevens, I think, went to the second one, coming back this year to speak econ. So I think what's nice That's
Speaker 5:a big deal for Trey.
Speaker 4:I know.
Speaker 3:Yeah. Trey's hard to, you He's be social. He's busy.
Speaker 5:He's He's not easy. Exactly.
Speaker 3:I just peer pressured him a lot this year, thankfully. So, you know, I got him up Yeah.
Speaker 1:You mentioned a bunch of different categories. Is energy top of mind for you? How are you thinking about the all the work that's going on? We see a lot of energy or a lot of excitement around nuclear. Been tracking a little bit less in solar, but what who are you interested in?
Speaker 1:What conversations are you excited about in energy?
Speaker 3:Yeah. Think there'll be, like, two major areas that you'll see energy come up in the forum. The first is there is gonna be, like, a nuclear, you know, sort of focus panel. I haven't announced those, you know, sort of, you know, panelists yet, but, you know, let's just say there may be one that's a general
Speaker 1:Yep.
Speaker 3:As one of the panelists. And then other one, I think, where you'll see an angle on it is a little bit in relation to basically, like, the build out of the physical infrastructure behind AI and how much of, you know, energy is the limitation there. So those would be kind of the two, you know, the topic areas that we focus on there. Again, with both those, trying to make sure that by the time we get to the forum, there's particular, you know, sort of policy and things that are coming out of those panels that aren't just discussions, but, know, ideally legislation that's going to be passed. So we always try and make sure the forum is in a week where both Senate and the House are in session.
Speaker 3:And so, you know, in some ways, Congress basically chooses the date of the forum more so than we do. But as much as possible, I'll try and make it so that, you know, sort of policy immediately, you know, sort of comes out of it. And sometimes we would also react live. Right? You know, in one of the forum's years, it was the, you know, the, you know, main event was the day before the TikTok CEO's basically, you know, what's it called briefing in front of Congress.
Speaker 3:And so obviously, there's a lot of discussion, you know, policy papers and recommendations from that, you know, sort of group around, you know, what needs to be done with TikTok.
Speaker 5:Yeah. Dress code, I mean, you'll
Speaker 2:Dress code. Should should people wear different colored shoes, Delians, suit? What what what do you guys recommend?
Speaker 1:T and
Speaker 2:jeans. There you go.
Speaker 5:It is DC, so, you know, probably not full Silicon Valley casual, maybe more business casual or suit and tie definitely.
Speaker 1:Yeah. No. It's the best dressed event in tech. On the tech circuit, it's the best dressed one. It's fantastic.
Speaker 2:Yeah. We were the best dressed people in
Speaker 1:trust, but
Speaker 6:it is
Speaker 5:the best dressed event in tech.
Speaker 1:It is fantastic. I have
Speaker 3:been told that my head of the head of comms at Hillen Valley is unhappy with the fact that I keep wearing the same damn gray suit
Speaker 7:every single year and so
Speaker 1:A new suit.
Speaker 9:I wish they could be
Speaker 3:He could be shopping, you know, later today to get Hey.
Speaker 2:It's also the also wore the shirt last time you came on the show.
Speaker 3:Don't really know. I actually wear this specific quarter zip every single time I'm on TVP yet. I know.
Speaker 2:It's the green. It's the It's the side of the story.
Speaker 1:I make
Speaker 3:sure that it's washed every single week, so that I make sure that I can wear it. Perfect. We appreciate the colors.
Speaker 1:Thank you so much. We can't wait can't
Speaker 2:wait to be there. It. Thank very much.
Speaker 1:On on the list. Stay tuned Cheers. To the new guest.
Speaker 3:See you
Speaker 2:soon, boys. See you there.
Speaker 1:See you later. Goodbye. Let me tell you about Okta. Okta helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent.
Speaker 1:Secure any agent with Okta. And up next, we have Eric Sufort from Heracles Media. He's been on the show before from Mobile Dev Memo, you're not familiar. He got us absolutely fired up about advertising. We're huge fans of him.
Speaker 1:We're huge fans of advertising, and he's in the restroom waiting room. So we will bring him in to the TVP And Ultradome. Eric Souper, how are you doing? Good to see you.
Speaker 9:Guys. Thanks for having me.
Speaker 1:Yeah. For popping back on. We've been following the ChatGPT ads rollout, the story. You've had a ton of great analysis. We've talked about it a little bit on the show, but we wanted to, you know, hear it from you and dive way deeper.
Speaker 1:So maybe you could set the table for us on what the launch is looking like right now, what the product is looking like, what your expectations were. Just maybe begin at the beginning of this saga for the ads in ChatGPT.
Speaker 9:Well, the saga begins where ChatGPT begins. We all knew we were gonna end up here. We all knew ads were coming. I mean, I wrote a piece May 2025. I said, obviously, ChatGPT will monetize with ads.
Speaker 9:Why did I feel so confident in that? Because they had just hired Fiji Simo. Yep. She's kind of known for having led the the mobile news feed ads product to Facebook. That's obviously been one of the the most successful ads businesses in in the history of mankind.
Speaker 9:And so it seemed natural that that they would they would bring given the domain expertise they had acquired, that they would bring ads to bear for ChatGPT, and they have. Now the launch looks like the launch of Netflix ads. Right? And if it remains that way, it's probably doesn't bode well for the for the business, but I think they're gonna evolve it over time. And what they've said now or what's come out, the information has had a lot of good reporting on this.
Speaker 9:They're charging on a CPM basis, which is, you know, not standard for Mhmm. Kind of direct response ads. It's more like a brand advertising formulation. But so it's $60 CPM, which is exactly what Netflix came out of the gate charging.
Speaker 1:Yep.
Speaker 9:They're asking for commitments of less than a million dollars, so this is clearly like a testing phase. And they're gonna offer very little in the way of of measurement or or targeting. So this feels like a very sort of primitive MVP, but, you know, the question is like how quickly can they evolve it into something that looks more like the the Facebook ads platform.
Speaker 1:So what do you think like, what do you think got us to this place where you get Fiji Simo? She's done this before. She has massive connections and skill set, but it still takes, you know, eight months to roll something out that feels not as mature as something else. Is it a talent issue? Are there other regulatory concerns?
Speaker 1:Or or do they do they need to worry about certain edge cases that people might not be aware of? Or is it specifically strategic to actually is there some secret reason why they're they're taking this approach?
Speaker 9:So here's my hypothesis. Right? And so it's not just about, you know, Fiji Simos. She's the the the CEO of Apps. Yeah.
Speaker 9:But they they acquired Statsig, which is, you know, staffed by a lot of XMeta people. That was an experimentation platform. That's the exact kind of talent that you'd wanna ingest into a company if you're gonna roll out an ASK platform, which needs to be aggressively experimented on. Here's here's what I think happened. I think, you know, ChatGP so so OpenAI kind of evolved over time.
Speaker 9:It was a research lab, then it you know, obviously, they've had the the drama around trying to pivot into a for profit corporation. My guess is the investors wanted them to bring in somebody that was a little bit more sensitive to, you know, the commercial sensitivities. Right? And so, you know, Fiji CMO would be a a very good fit for that profile. They brought her in and my sense was there probably was a little bit of animosity internally towards the idea of this being an ads an ads driven business.
Speaker 9:Right? Primarily an ads driven business, which
Speaker 2:Yeah. I think Sam, ultimately Sam, will only only like two years ago, Sam said, I look at ads as like a failure state
Speaker 1:Yep.
Speaker 9:For Right.
Speaker 1:Yeah. And then he started pivoting the rhetoric and started saying, well, like some of the Instagram ads. When they're targeted well, they're actually delightful. And in the right context, they can be good. And he was coming around to the three of ours worldview, which is that advertising is great.
Speaker 1:But but he did have to message that externally and then obviously had a whole bunch of work to do messaging it internally. And may maybe that's why there was a little bit less energy internally to to to really push towards that. That makes a lot sense.
Speaker 9:Well, he may have been the one that was messaged to. He may not have been the one controlling the message there. He may have been the one that was messaged to. We need ads because ads are inevitable. It's not that ads are great.
Speaker 9:Ads are inevitable. If you wanna reach what I call humanity scale Yeah. Ads are inevitable. If you wanna monetize that at the at the at the at the scale it can be, at its total potential, you need ads. That's how you do it.
Speaker 9:Right? And so he may have been the one that was convinced. Mhmm. And and, you know, bringing someone external in who had been there, done that, may have been part of an investor strategy. But but putting aside my hypothesis, look, I think this has the potential to be an incredibly successful initiative.
Speaker 9:The question is how quickly can they pivot into something that looks like the Meta Model. Right? So if you look at it right now, it's, you know, it's and and and I think, look, we to every everything you just said mirrors what would happen at Netflix. For years, Netflix said we would never do ads. Ad ads are offensive.
Speaker 9:They're an affront. They're an affront to to to to my sensibilities as a consumer. That's that's what the leadership said. And then one day, they weren't. Right?
Speaker 9:And the exact same thing happened with OpenAI. The question was six months.
Speaker 2:All in.
Speaker 1:Yeah. Don't forget all in.
Speaker 2:All in was Anti's ad and and we we begged them. We begged them. We begged them.
Speaker 1:And now
Speaker 2:And I you know, think they made the decision independently, of course, but they're they're running ads now. They always Yeah. Mean, I've been
Speaker 9:I've been banging the drum for for since May 2025. Yeah. But I I think the question is, is it six months? Is it twelve months? Is it eighteen months to get something that looks like meta ads?
Speaker 9:Right? And that means targeting, right, based on behavioral profiles. That means measurement. That means allowing that that means explaining to advertisers the the the sort of impact of what that you've delivered on their behalf. Yeah.
Speaker 9:And that means like a whole lot of tech that needs to be built out. Right? And that means, you know, creative optimization. All these things. Just conversion optimized advertising is very different from what they're offering.
Speaker 9:And is it six months? Is it twelve months? Is it eighteen months to get there? That's a big question. Right?
Speaker 9:But that'll determine the success. And if if you say, look, this mirrors what Netflix did, well, that's not really a playbook that you wanna draw inspiration from. Right? I mean, had to pivot. They had do a hard pivot.
Speaker 9:I mean, the the ads tier has been live for three years. They did 1,500,000,000 in 2025. Right? So, you know, it's it's not a significant chunk of the revenue yet. I think it could be a much larger chunk of the revenue, but Netflix has other concerns.
Speaker 9:Right? They've got quality concerns. They've got, know, consumer sentiment concerns that where they can't just like fully embrace ads. I don't think ChatGPT is limited in that way.
Speaker 1:Yeah. Yeah. Take me back to the that initial launch of Netflix. You said similar CPM, $60 per thousand views. But what what was the response like?
Speaker 1:Like, did were there any advertisers that were like, yes, this is great. I got my money's worth. It worked out. Was it just vague and unattributable?
Speaker 2:My my perception is like great performance marketers
Speaker 1:Yeah.
Speaker 2:Are always excited to try new channels, especially a channel that's driving high intent traffic. So if you tell a performance marketer, hey, I've got a billion users and I'm gonna let you advertise to them, they're gonna be excited no matter what the general setup is because they just wanna get in there with a test budget and like, you'll talk to marketers and at a certain scale, they'll they're they're like, yeah, let's try a 100 k here. Let's try a 100 k there. It's just like, you're just kind of throwing around money and then you're gonna double down on on what really works.
Speaker 9:Right. For the initial rollout, this is how you launch an ads platform. Don't get me wrong. This is how you launch an ads platform. That's why I'm talking about six months versus twelve months.
Speaker 9:This is how you do it. This is how you bootstrap the data. This is how you get people onboarded. This is how you get feedback. You have to launch it like this.
Speaker 9:There's no other way. You can't launch a conversion optimized ads platform because by definition, you don't have the conversions data yet. Right? And that's that's another reason why I think they they launched instant checkout. I think instant checkout is a stalking horse.
Speaker 9:I think that's a method of of of gathering conversion data that they can use to then target against with ads. I think that was the whole purpose of that. Right? I don't think that was seen as a a long term revenue opportunity. I think that was seen as a way to bootstrap the data.
Speaker 9:But this is how you launch in an ads platform. I mean, it's gotta evolve the new conversion optimized ads platform, but you can't be that at the start. You intuit the settings. You can't intuit the tuning that you needed to implement to make this work. But but the question is how long does it take them to get there?
Speaker 9:Right? And and so that that, you know, that we'll just see. But my sense is they've got the DNA. They you know, the information report, they have 700 x Meta employees. Like, essentially, everyone at Meta is working on ads.
Speaker 9:Whether they're working Yeah. You know, as an account rep or they're working as an ML engineer, they're all sort of rowing in that direction.
Speaker 2:Yeah. What was what's been your reaction to instant checkout? There's been a lot of debate on on the fee structure. Some people saying, no retailer can afford this. We were pushing back on that in in a number of different cases.
Speaker 2:There's plenty of brands where you say, like, would you spend, like, 4% of AOV to to acquire a customer? I can also see the other side of it. A concern that I have is like, you know, you're running an ad on a meta platform to find a customer. The customer then goes to ChatGPT if that's where they're searching for products and then the the brand is effectively paying twice to like actually find the customer, drive them, get them interested, and then and then at the bottom of the funnel they're paying like another 4% fee. That feels like not great, but what's been your reaction?
Speaker 9:Yeah. So I was in the former camp. I said that that's not a that's not a workable fee. Let me let me come back to that though because you asked a question about what happened when Netflix offered ads. Yeah.
Speaker 9:They had too many advertisers sign up. They had too many. They were demand they were they were supply constrained, not demand constrained. They had to return money. I think that's exactly why OpenAI is saying, no.
Speaker 9:Look. We're setting an upper limit on this. A million is the max. Right? Because they won't have enough people to advertise to.
Speaker 9:This is just a way to test it out and to start scaling. And the problem Netflix made was they never act. So he the problem that Netflix had from day one was they had the partnership with with Microsoft with Xanders. They were using external tech to run the ads. Right?
Speaker 9:Xanders is an ad an ad platform. And so that's the problem. They couldn't implement, you know, custom placements. They couldn't do a lot of measurement stuff. They couldn't do a lot of targeting because they weren't operating the actual pipes, the actual plumbing that was delivering the ads.
Speaker 9:There's a lot of, like, data data issues, just access to data issues. That that's not what OpenAI is doing here. OpenAI is starting out by building their own tech. And Netflix, by the way, pivoted to that. But they pivoted to that very late.
Speaker 9:That's why I think the ads initiative at Netflix was not successful and and and, you know, hasn't really delivered that much revenue. But going back to the 4% fee, first of all, here's what I think is gonna happen. I think they're gonna drop that to zero or very low. It'll be tiny because I think the whole point of this is to just drive conversions. And the whole thing is, like, when you see performance in ChatGPT as a retailer who's just basically paying for the conversions essentially with the fee, you're gonna wanna actually advertise against that.
Speaker 9:You're gonna wanna control it because you have no control if it's just surfaced based on what ChatGPT believes is relevant. And at some point, you're gonna have too many retailers to place into a single placement, so you're gonna have to mediate that by bids. Right? So ultimately, I think this gives way. In in in in the main, this gives way to advertising.
Speaker 9:But whether the 4% is sustainable or not actually comes down to how you view what those purchases are because it's not user acquisition. You're not acquiring a user. If you were, then you'd compare that to LTV. But since it's not user acquisition, you're not acquiring that user as a sort of like with a long term relationship in mind. You're you're essentially trading a percentage of the checkout for the checkout, but that user doesn't interface with you.
Speaker 9:Right? And in a lot of in a lot of
Speaker 2:So, there's gonna be no there's not gonna be passed through to the underlying vendor, you're saying? Like
Speaker 9:Well, no. I mean, look, you're the merchant of record. Right? And you get their information because you have to fulfill the order. But ChatGPT's OpenAI specifically says in the terms that you can't use your email address for, like, remarketing.
Speaker 9:Right? And, you know, Amazon says this too. So so the I think it's you're not capturing a customer. You're just getting you're giving 4% for that one off transaction, but you have no control over whether you reach that customer again, whether that customer is brought into your orbit. There's very that's a very different proposition from advertising to someone and acquiring a customer.
Speaker 9:You acquire that customer, you get a whole stream of opportunities to remarket to them. If you're just, you know, trading 4% for the transaction, that's all you get. So it's not actually customer acquisition. If you think about 4% per transaction now consider that if if you thought about the the people talk about, you know, when that when that number came out, they talked about, well, some people spend, you know, 50%, 60% on Facebook ads. Why is that different?
Speaker 9:Because that's over the life cycle of that customer, not for the
Speaker 2:or even one time. They pay for the customer one time and then they come back, you know, 15 more times or they end up subscribing and they've actually own the customer relationship. Mhmm. Yeah.
Speaker 9:Exactly. Exactly. And and think, you know, think about it also this way. You know, that 4%, that might be all the margin you're getting as an e commerce ever you know, as an e commerce, you know, operator. Right?
Speaker 9:And the thing is that's not preventing you from advertising. That's not saying, okay. You have to save your entire advertising, but you're gonna still have to advertise everywhere. This is gonna be a tiny sliver of your orders that you're not in control of. You can't control it.
Speaker 9:This could be lumpy. This could be up one month down the next. Right? You can't control that. You're gonna have to continue to advertise.
Speaker 9:Now, you have no idea, to your point, whether this is cannibalizing purchases that would have happened from the people that you advertise on other platforms. Right? So this ends up just being a cost on a drag probably on your advertising expenditure elsewhere.
Speaker 1:Can you explain attribution and the evolution of Netflix's ad product? Because if I'm sitting on my couch watching a movie and I see an ad and I go to my phone, it feels really disconnected. Even in a pre ATT world, It feels extremely hard. How do they do attribution? How how good can this get?
Speaker 1:And then and then with ChatGPT, what what's the upper bound on attribution for OpenAI given that we are in a post ATT world?
Speaker 9:Upper bound is basically what you see with Facebook because it's gonna be direct response. It's gonna be click based. Right? With Netflix, it's a little different. So with CTV, the way that companies do measurement and attribution in CTV is to is traditionally they set up what's called a clean room.
Speaker 9:Right? So I set up this environment, a centralized environment. I push all the ad interaction data that I have. So basically, when I know I showed an ad to someone, I push all the data into this clean room. A lot of times, it's, you know, it's IP address and device information.
Speaker 9:And then the advertiser pushes that information into the clean room and I match it up. That's his attribution CTV traditionally. Now there's other ways to do it. There's other ways to do measurement that's just totally probabilistic. This is like media mix modeling and stuff like that.
Speaker 9:Mhmm. But with with attribution, when you when you wanna use that term, traditionally, it's done with a clean room like that. So I'm just, like, linking the datasets together based on some key. A lot of times, it's the IP address. But if you think about clicks, like, clicks out.
Speaker 9:Right? So that's like I'm viewing. I'm on second screen. I can look at time. Like, there there's time elements.
Speaker 9:You you look at temporal elements to to do attribution. But if I'm clicking out, I've got the click. Right? I've got the click. And so that carries a lot of information.
Speaker 9:I can still look at temporal aspects of that, but I can I can do a lot with the IP address too? And so that's you know, if you look at a CAPI, that's what CAPI is. A CAPI is just a way to get this data on the back end so it bypasses the apps, you know, it bypasses the mobile device. It bypasses the browser. So there's no way for, you know, Apple to interfere with that with ITP or ATP or ATT.
Speaker 9:And so you're able to get you know, it's still probabilistic in that way if if if you consider, you know, the the decay of the validity of the IP address over time to induce probabilistic measurement. But that's traditionally outside and then a pixel as well. But, I mean, that's what OpenAI has at its disposal. It's got the CAPP and the and the pixel because it's gonna be click based. So so there's there's a there's a a high degree of fidelity that'll come with the measurement there, the attribution.
Speaker 9:That's that's way higher than what you can do with CTV.
Speaker 2:Mhmm. What are what do you think the prospects are for the number of companies that are trying to build LLM ad networks? I got pitched at least a few companies that were maybe a year or so ago saying like, hey, LMs are gonna be free. They're gonna insert ads. We're gonna build this kind of network to serve ads across a bunch of different apps.
Speaker 2:I was super bearish on those specifically just because I thought that OpenAI would wanna own the full stack. I I obviously, Google would own the full stack and I and I think we're heading towards, you know, an an oligopoly of sorts in in consumer AI? And where's the scale really going to come from? But any of takes on that front?
Speaker 9:Well, there'll be a long tail of agents that are going to want to monetize with advertising. So I think there might be space for an ad network to exist that services them. I don't know why that wouldn't be an existing ad network. Mhmm. I don't know why that wouldn't be or, you know, just sort of DSP.
Speaker 9:Like, I don't want I don't I don't know why that wouldn't be the trade desk, say. But but yeah. I mean, I think there's probably an opportunity to to monetize some of those long tails of agents with with ads. But if you think about, like, a ChetiPi, of course, they're gonna build their own. I I would you know, Perplexity is apparently restarting its ads initiative.
Speaker 9:I I think these companies, it's it would be silly to not build their own. I mean, you wanna have that ad stack so you can make everything bespoke. Right, and and and and maximally perform it. Right? If we look at meta earnings, I mean, that's exactly what delivered that big beat.
Speaker 9:And and I think what people forget about the the prospects of of of this sort of like AI enablement with advertising in in digital advertising is that these effects compound over time, especially when you're talking about direct response based ad platforms. Right? So, like, with with Meta, I've been banging his drum since q one twenty twenty five. These effects compound. Like, people point to, like, oh, 3.5% or 5% or whatever in increase in click through rates or increase in conversion rates from from Andromeda or from Gem or from Lattice.
Speaker 9:Who cares? These are tiny. No. But they first of all, that's every quarter they're they're noting these performance improvements, but also they compound over time. If I'm targeting 90 a ninety day recoup on my ad investment and and, you know, a hundred and twenty day, a 110% ROAS, what am I doing after a hundred and twenty days?
Speaker 9:I'm reinvesting the 110% in advertising on your channel. And so if you're giving me 3.5%, 5% bumps every quarter, that's just gonna end up getting reinvested. That's why we're seeing the growth reaccelerate. Growth is reaccelerating going into q one twenty twenty six. That's amazing.
Speaker 9:That's why Facebook was up 10% last night because growth is reaccelerating. They're gonna see growth rates they haven't seen since the post ATT doldrums. That's incredible. That's incredible growth. And anybody who doubted the CapEx going, historically has to accept that reality now.
Speaker 9:And they did. They did yesterday. Yeah.
Speaker 2:Yeah. Yeah. What what, people like, the the criticism is, like, Zac is being so ballsy with the CapEx.
Speaker 1:Specifically on gen gen AI.
Speaker 2:On gen AI. Specifically Gen AI products. Criticism is like, hasn't launched a hit Gen AI product yet. Sure. Our take earlier on the show was like, look, this guy is serving more Gen AI content than almost anyone on earth.
Speaker 2:Mhmm. Even if he doesn't have like a breakout net new product, his product has massive tailwinds because of all this. Like, he's in a perfect position to decide, yeah, I'm gonna I'm gonna be, you know, one of the biggest spenders in this category and and plan, you know, however many years out in advance.
Speaker 9:They're making more money on AI than anybody except for Google. Look, the the the idea that they're not they're not utilizing generative AI, have you seen the ads on Facebook? Those are all generative. There was a revolt. There was an advertiser revolt.
Speaker 9:There there was a scandal recently because Meta was being too aggressive with the ads generation. They're the the idea that they're not implementing generative AI is absurd. I mean, first of all, generative AI is not just what you see on on in the output. I mean, they talked about pairing LLMs with ad ranking. That's really fascinating cutting edge research in in advertising.
Speaker 9:Using LLM to sort of give you feedback on the ad. Does this resonate? Is this something that someone would click on? Like, pretend you're this demographic. There's already research that shows that that has a a really beneficial impact on advertising.
Speaker 9:It's not just like what you see in your feed, but also the stuff that you see in your feed is generated. The idea that they're not utilizing generative AI in advertising, that's absurd. You can see it. Just go on Facebook right now.
Speaker 1:Yeah. Makes a lot of sense. I wanna move on to other companies, but I wanna I have one more question about OpenAI. Do you think that there's any any sort of risk to, like, push back of, the creepy ads, like, being too well targeted? Facebook went through that with, the t shirts that said your name on them basically and, your whole career path.
Speaker 2:Yeah. My my assumption is that eventually, like, you're only getting ads that were specifically generated for you. Like this idea of like historically, you'd have, you know, one ad that a brand would make and they'd run it at the Super Bowl.
Speaker 1:They're like Yeah.
Speaker 2:We're gonna send this to all of America. And then eventually with, you know, on platforms like Meta, I would assume that every ad is like a one off generated and it knows it knows exactly how to position a product, what color, what environment to put it in. Mhmm. And it'll be insane that we used to have ads and we'd make one piece of creative and then run it to like 10,000,000 people
Speaker 1:Yep.
Speaker 2:Because it was like good. And it's like, no. This will all just niche, niche, niche, niche, niche down Mhmm. More and more.
Speaker 1:Yeah. What do think? Look.
Speaker 9:I mean, it's like the idea that everyone would see the same feed when they opened up Facebook is absurd now. Right? I mean, like, look, if if people truly hated creepy ads, Facebook user numbers wouldn't, you know, monotonically increase every quarter. Right? And, you know, Europeans would be lining up to to buy subscription in Europe.
Speaker 9:When it in fact, only 1% of users in Europe has taken that offer.
Speaker 2:Right? Yeah. Is that an offer to eliminate is that like an ad free, like, meta offer? Is that what you're talking about? Because I know they're talking about rolling
Speaker 9:out subscription. So they've got the the less personalized ads option in Europe as a result of the DMA compliance. Right? So they have three options. They have a full on subscription, no ads.
Speaker 9:They get the less personalized ads and they get the normal experience. 1% of people opted into the subscription. Like, people hate ads. They just hate them less than every other monetization model. Right?
Speaker 9:People love ads. And if you look at, you know, demonstrated behavior, people love ads. People love access to free tools. People love access to to to to sort of like endless endless capacity. Right?
Speaker 9:You start capacity constraining things, and you start putting up paywalls. You know, obviously, by definition, those are gonna get used less. Yep. Right? Or, you know, most likely by definition.
Speaker 9:And so the the thing is like, the idea that like ChatGPT is gonna run into this problem that's unique to chatbots, I just don't buy that. And first of all, maybe they will because maybe they'll design this the wrong way, but I give them the benefit of the doubt. I think they can do it in the right way. And one way to do it is to just not tether the ad at all to the chatbot context. You could just say, look.
Speaker 9:This is a display ad for what we know you're in market for based on Capi, based on the Pixel. And we're going to make sure it has nothing to do with what you're talking to the chatbot about Yep. So you never have to even question whether the chatbot has your best interest at heart. That's a very easy way to step that problem, but I think they've got very skilled people there. They know exactly what that trap is and they're gonna avoid it.
Speaker 9:Yeah.
Speaker 1:Let me
Speaker 2:You think we're gonna get ads in Siri in the next twenty four months?
Speaker 9:Oh. No. Because of just because of Apple's because of the optics of Apple doing that. I think Apple would probably love to do that. I think there's probably people inside Apple that are pitching that, but they won't because it's not in alignment with their optics around advertising.
Speaker 9:But but nonetheless we we
Speaker 2:are talking like, I I think people will be normalized to ads in Apple products. They obviously are in the App Store today. Gurman was talking about ads in Apple Maps Mhmm. Coming in the near future. And then I think from that point, if people are starting to use Siri as a search engine, there will be ads eventually.
Speaker 2:It will just be too to to to be able to serve ads like basically natively in the UI to iPhone consumers they
Speaker 1:gotta do ads in the alarm clock app. I wanna wake up to a different ad every day. Get out of bed and Get start online. It's time to check out.
Speaker 9:Yeah. Morning to night, you should be you should be consuming. I don't know. May maybe. I think maps podcast for sure.
Speaker 9:But the thing is, like, I wrote this piece when when Apple introduced ATT. I I said Apple robbed the mob's bank. I said, look. This is just an opportunity for them to to to shift some of the budget that's going to Meta into their own ads ecosystem. They did that because they expanded their Apple search ads.
Speaker 9:They just doubled the number of impressions per search. They've got two placements now in Apple search ads, and they're also blurring the lines between ads and organic results there. Right? So the idea that Apple hates ads, think, is mistaken. I think what Apple needs to do is they need to sort of walk this tightrope of appearing to hate ads while also benefiting from ads because they are such a, you know, an accretive sort of margin expansive way to make money.
Speaker 9:Right? So maps for sure, think podcast is another, like, prime piece of real estate for ads to be inserted into. I don't know about Siri. Siri, that that feels like maybe a little bit too on the nose, but who knows?
Speaker 1:What about Gemini? Did you what was your reaction to Dennis talking about ads in Gemini?
Speaker 9:That makes total sense because they're already monetizing Gemini with ads. They're doing it with AI overviews and AI mode. They're they're monetizing ads and AI overviews at parity with search. Why would they rush to put ads in Gemini, the chatbot? Keep in mind, Gemini is two things.
Speaker 9:Gemini is the family of models and Gemini is the chatbot. Why monetize with with ads in in in Gemini, the chatbot? You never need to. You could just drive adoption of that. They're already monetizing Gemini, the family of models through AI overviews and AI mode.
Speaker 9:AI overviews reaches 2,000,000,000 people a month. That's the biggest single LLM output ad surface that exists. They're already monetizing Gemini through there.
Speaker 1:Yeah. And is that product just what's the shape of that product? Is that just the exact same as just branded keyword search on Google? Like, what is there are there anything different or any learnings from the, the ads in AI search overviews or AI powered search?
Speaker 9:So AI mode is essentially the chatbot. AI Yeah. Overviews is the is the results that's basically takes up now the whole above the fold on Google search. But it's better. It's better than search.
Speaker 9:You know why? Because the whole point with search is I want this to be one shot. Want to type in my keyword and I want to get the best possible result in that first list of results. And if I don't, then I think your product is bad, Right? And so Google is incentivized to make sure that there was one click, and that's it.
Speaker 9:So you get one chance to show ads. With AI overviews, the whole point is to then prompt further queries. Right? So you get a bunch of opportunities to show ads. Right?
Speaker 9:So if that's monetizing at par at parity, it's probably also driving impressions up. I think that's a much better ad surface area than traditional search.
Speaker 1:Yeah.
Speaker 2:Should
Speaker 1:Lucky.
Speaker 2:Startups, business owners be thinking about TikTok under new ownership?
Speaker 9:TikTok is funny because they're going all in on commerce again, it seems. Like, had a really big kind of Black Friday, you know, whatever event, you know, revenue pop, revenue spike. But, you know, they seemingly had had were walking back the TikTok commerce opportunity. Now they seem to be leading into it. I'm not quite sure what to expect there.
Speaker 9:I think, you know, TikTok, I think they were in a little bit of stasis for a while just because of the uncertainty around what was gonna happen with the with the spin out. My sense is now that they have the certainty, they'll probably lean into where they feel like they're best positioned, and that might be commerce now that Meta has completely abandoned it. You know? And I but I think, like, I just don't think that that's the right approach. I don't think Western audiences really appreciate that as much as just the ads driven model.
Speaker 9:And so, you know, the the pure play ads driven model. So we'll see if that ends up working for them. But yeah. I mean, I think TikTok you know, it it if Meta can do what they did to Snap with TikTok, they're gonna be in a pretty difficult position. And they may have to just adapt in ways that that Meta won't, and that would be leaning into commerce more heavily.
Speaker 2:Yeah. The the I always assumed maybe naively that they would lean out from commerce because it seemed like it was just a money pit. They were just lighting money on fire and the new owners would say like, okay, we just bought this. We have to pass back 50% of our revenue to ByteDance. Like, the the whole, like, economic model of the business seems like super upside down.
Speaker 2:Let's just serve ads and try to run the business lean and maintain the user base. But leaning into commerce just feels like I don't know. I I there's so many brands that that I've heard about over the last twelve months that are scaling into the hundreds of millions of revenue, and and it's almost all on TikTok shop. And it just feels like that was, you know, basically subsidized by ByteDance for a long time. And will the new owners wanna subsidize these brands that are driving real volume, but ultimately, I don't know if that they would be able to stand on their own two feet.
Speaker 9:Yeah. I mean, did walk it back. I mean, they did two rounds of layoffs in the in the in the commerce division. Yeah. I mean, the thing about so one thing you have to remember about TikTok and the and the the ByteDance and the the whole, like, the parameters of this deal is that they're they're still licensing the algorithm.
Speaker 9:Right? So, like, I think that impacted the kind of the the the valuation, and that and that may impact some of these other economics. But, yeah, I mean, I I just I just feel like they maybe they they maybe sense that that's an area where Meta retreated, and so that's where they could potentially flourish. But it was odd because they did walk that back, and now they seem to be, you know, embracing it again.
Speaker 1:Yeah. What's your current thinking about the Netflix Warner Brothers deal? It's it it it feels like we're in a lull. It's moving forward, but would be interested to
Speaker 2:see Yeah. I'm also interested just how how do you think about, you know, Paramount's prospects as an app ad platform without all of that IP? Yeah.
Speaker 9:Yeah. Well, so it's it's interesting. So, the the thing is, like, the IP is so so important. Right? So like the one of the aspects that I I found really interesting about the the the Netflix deal was that they essentially valued WB Games at zero.
Speaker 9:Right? So WB Games makes remember, they're big hit games. It makes their Game of Thrones game on mobile and they've got World Combat games, a lot of different console games, Batman Arkham. Yeah. And at one point, it was for sale in the multi billions price range.
Speaker 9:Right? And so Netflix essentially valued it at zero. Why? Because ultimately, there'd have to be like a IP licensing agreement that allowed them to continue to monetize those games. Right?
Speaker 9:So I think the same is probably true on the IP side just generally with with WB. My sense is, like, what this indicates to me is, like, you know and and it this was just I mean, this was said explicitly in the earnings call. It's like, you know, we're gonna pay for content one way or the other and, like, we need this high end IP. Right? And, like, you know, if you look at I mean, everyone saw the the Joe Rogan clip with Matt Damon and and and Ben Affleck talking about, like, Netflix makes us restate the plot of the movie, like, every couple minutes in dialogue because if people don't hear it explicitly, they just lose interest because they're on their phones.
Speaker 9:Yeah. Like, you you wonder, okay, well, is that a result of, like, people's attention spans, you know, declining? Or is that just because the stuff you're pumping out isn't that interesting and people are not really paying attention because they're kind of bored. Right? And so I think maybe it's the latter.
Speaker 9:And so if you bring in a bunch of top notch IP, maybe that keep keeps people more engaged. And then, hey, maybe that boosts the the ad CPMs or may you know, and ultimately boosts subscription numbers. But my sense is, like, they're gonna pay for content one way or the other. And, like, you know, maybe just buying a lot of it in bulk at once is the best way to do Mhmm.
Speaker 1:What are you what else are you tracking this week across earnings? You know, Microsoft and and Tesla. I don't know if you follow those stories. But what what else is interesting you this this week? Well, we got Apple.
Speaker 9:Yeah. Right now.
Speaker 1:Yeah. Yeah.
Speaker 9:I mean, I think, like, you know, you you had you had Garmin on yesterday, and, you know, he's just always an amazing wealth of of leaks. Yeah. It's pretty impressive that he's able to get those. Apple's pretty buttoned down. It's remarkable.
Speaker 9:But but yeah. I mean, I think just the AI story there is is kind of embarrassing. Yeah. And, you know, like, I wrote this piece a while back, Apple's besieged on all fronts. And I was talking about, like, look.
Speaker 9:If look at AI, if you look at some of the threats to ATT in Europe, you know, there there there's a lot of issues that that they face. I think, you know, one of the big questions for me when they announced the deal with Google to use Gemini for for, you know, Apple intelligence, you know, which among other use cases include Siri, was how they would just manage the privacy aspects of that because they were so adamant. Right? They talked about the private cloud compute. They were so adamant that when we do this, we're doing it the Apple way.
Speaker 9:We're doing it the privacy centric way. And then they do the privacy washing thing, which is just then to partner with Google and allow them to do all the dirty work of sourcing the data. Right? Sourcing the data to train the model. Right?
Speaker 9:Or of just monetizing with ads, like and they just get a cut on the back end. And in this case, Apple's paying, but at some but at some point, Google will be paying for penetration into iOS and the exposure. Yep. And I think, you know, that's just a question of, like, is that really the reason? Is that part of the reason why they never invested here?
Speaker 9:Because they couldn't really do it in the Apple privacy centric way.
Speaker 4:Yeah.
Speaker 1:And if you
Speaker 9:want someone you know, if if if you understand that the dirty work of sourcing this data in ways that maybe are not completely above board or just monetizing with ads. I mean, Apple makes so much money from advertising. They just don't do it directly. Right? They do it through the partnership with Google.
Speaker 9:Now, they're gonna be making money through AI interactions, but they're not actually the ones training the models and sourcing the data in ways that could be questioned. Right? So I think that maybe plays a part in it. And I think maybe when you get to a point where all of this can be done on device, right, when the device is actually powerful enough to service most of these use cases, maybe you have smaller models. You don't have, like, foundational models.
Speaker 9:We have smaller models that can all run on device, and maybe Apple will be more interested in that. But, I mean, like, you you have to look at the AI thing as either as a massive whiff, which seems to be what German's take was, or it was just a sense of like, look, this is actually going to be really difficult for us to reconcile with our brand imagery and the sort of messaging that we've, you know, we've relied on for years and years, like, you know, privacy that's Apple. Maybe we'll just outsource this in the same way that we outsource search, right, and advertising to Google until we're able to all process everything on device and and ensure that we can maintain that that messaging.
Speaker 1:Yeah. I mean, my take is like I agree with the whiff narrative, but also it does feel like there's the seeds of a rebuild between this new acquisition that they're doing. They're starting to open the pocketbook a little bit. The hardware really is best in class. We saw that with, you know, the Mac mini boom to some degree.
Speaker 1:People are excited about the silicon, Apple silicon, and and then and then just the partnership with Gemini. Like, they're going to have access to something in Frontier so they can start to vend it into different places. But it's it's just on Apple's timelines, which have been slow lately. So
Speaker 9:Yeah. But the iPhone Air was the iPhone Air was a a flop. Right? I mean, you know, we'll see what happens with the foldable. But, like, I mean, I think they are facing you know, they're obviously, the the replacement cycle is really long now.
Speaker 9:I think one thing that's, like, kind of under discussed is, like, I wrote this piece a while back, like, years ago, where I said, you know, what what are the implications of a billion iPhones? And this is well before there were a billion iPhones in circulation. And my point was the implications are that a lot of those are in the developing world. Right? They're they're secondhand, thirdhand iPhone devices.
Speaker 9:And that's kind of like there's this strange dilemma that Apple faces. Like, the more powerful the devices get, obviously, the the longer you can go without replacing them. Yeah. Right? Because the demands of Spotify aren't changing.
Speaker 9:The demands of Facebook and Instagram aren't changing from, a hardware perspective. Right? And so the question is, like, how how central can you make AI to the core use case, which is a lot more compute intensive Mhmm. If you do everything on device Yep. How central can you make that to instigate a need to replace the device more frequently?
Speaker 9:Right? Not just like the because the power of device at some point doesn't even matter. Yeah. Like, okay. You tell me, like, the compute capacity of the next iPhone is 10 x what I have now.
Speaker 9:Okay. What are the demands of Spotify 10 x? Because that's the the that's the the only app I use Yeah. For hours and hours every day. Yeah.
Speaker 9:Right? And and so that's kind of the question. So it's like, if if all of that functionality can sort of like percolate down to like the iPhone seven. Right? And no one really sees a difference in in sort of like the the in sort of like lifestyle between like the the brand new iPhone and the iPhone seven with their only using Instagram and Spotify?
Speaker 9:How do you actually convince people to to upgrade on every cycle? Right? Because keep in mind, like, that that as that sort of installed base, like, you know, iOS installed base grows, most of that's gonna be through, like, second hand.
Speaker 1:Mhmm. Yeah.
Speaker 2:Yeah. Jordan it was interesting yesterday. You shared that a lot of Apple's advantage on the hardware side in AI is because of the self driving push Car projects. Of the car that ultimately failed, allowed them to do the r and d that that is now being rolled out Yeah. That's Apple fascinating.
Speaker 2:Had a had a huge quarter Mhmm. Beat beat estimates on the revenue side by 4,000,000,000 with China specifically. That's great. And up after hours. The other news that's kind of interesting, I'd be curious before you leave, Eric.
Speaker 2:ChatGPT is retiring four o as of today.
Speaker 1:Yeah. That's interesting.
Speaker 2:Putting putting it to bed. I'm sure that'll make a lot of people mad.
Speaker 1:But it's simpler process for them. Yeah.
Speaker 9:Well, yeah. But they also launched Go. Yeah. Right? Which is the sort of like lower price point subscription tier.
Speaker 9:So my sense is like, you know, if you're trying to push people to adopt that, which I think they are, you you maybe have to get rid of some like the the older models that the free tier relied on.
Speaker 1:Mhmm. Well, thank you so much for taking the time to join. This is
Speaker 2:so much fun. Yeah. Really enjoyed it, Eric. Come back on soon.
Speaker 1:Yeah. We'll talk
Speaker 2:to you soon. Have a
Speaker 1:good one. Thanks, Goodbye. Cognition. Eric. They're the makers of Devon, the AI software engineer.
Speaker 1:Crush your backlog with your personal AI engineering team. And I'm also gonna tell you about Vanta. Automate compliance and security, Vanta is the leading AI trust management platform. And Without further ado, we have Kevin Weil from OpenAI, the chief product officer in the restroom waiting room.
Speaker 7:Hey. What's up, guys?
Speaker 1:How are doing? Great
Speaker 7:to I'm good. It's good to see you again. Thanks for having me on.
Speaker 2:It's been a minute.
Speaker 1:Yeah. What's what what's new with you? Since we've had you on the show, you've changed duties. You've changed focus. Like, reintroduce yourself, I guess.
Speaker 7:Yeah. By the way, I love that we are talking about science today. I think we need to bring more of the this kind of coverage to science and get people excited about science because, you know, there are a few more important factors in all of our lives. Mhmm. And AI is going to is in the process of fundamentally changing science.
Speaker 7:So Yeah.
Speaker 1:Yeah. What is your focus? Because science and health can mean a bunch of things. It can mean D to C, you know, advice. And, you know, one of the ways to cure cancer is just to get a lot of people to stop smoking cigarettes.
Speaker 1:That's something they could learn by should I be smoking? And it makes a very convincing case for why you should not, and maybe it helps you not smoke. The same time, there's researchers that are going to spend decades developing cancer drugs, getting them through FDA approvals. There's a whole bunch of different ways that, you know, even Microsoft Word and PowerPoint and Excel helped the previous generation of biotech companies. You can imagine LLMs vending in there, and then you can imagine the fully automated AI scientist.
Speaker 1:What's been your focus? Where do you think do you think we're gonna see the most progress in 2026?
Speaker 7:Yeah. The the mission of our team is to accelerate science.
Speaker 1:Yeah.
Speaker 7:And the reason that we are starting to do this now, I mean, it's obviously been something that OpenEye cares about a lot.
Speaker 1:But Mhmm.
Speaker 7:When you go back a couple years, we were all amazed that GPT, you know, 3.5, four, whatever, could do well on the SAT. Yeah. And then you start seeing it solve graduate level problems, and then it does okay on math competitions. And then you fast forward a bit and our model can win a gold medal at the IMO, at the top, you know, math competition in the world.
Speaker 1:Yeah.
Speaker 7:And now, we're seeing it solve open problems in mathematics. So things that humans have not solved, suddenly AI models are contributing solutions to. Mhmm. And it's not everything. It's not every open problem.
Speaker 7:Science is not it's far from done, right? Yeah. But the fact that AI models can now contribute at the frontier of science and actually push beyond where humans have gone before
Speaker 1:Mhmm.
Speaker 7:Is incredibly exciting. Because if we can if you can replicate that across math, physics, biology, chemistry, material science, and you can do the next, say, thirty years of science in five years instead. If we can be doing, you know, the science of the twenty fifties in 2030 Yeah. The world is a better place. Yeah.
Speaker 7:And the models are there now, and so this is a huge focus for us.
Speaker 1:So, yeah, talk a little bit more about your work specifically because, not not to, like, discredit you, but I feel like this part of the magic of these large AI models is that you get a lot of this stuff for free. Like, oftentimes, you don't need a specific SAT model. You just build an amazing model, it learns how to code and also learns how to write poetry and tell jokes, and it can do some science too. So what how are you working on fine tuning? Is there a reinforcement learning project?
Speaker 1:Is there specific compute allocated towards this? Do have a team? Are you listening to certain customers?
Speaker 2:I I imagine my my guess was just working really closely with customers, understanding, making sure they're not just signing up for ChatGPT off the shelf and using it, but actually, you know, building a bunch of specific functionality for them and innovating on the products.
Speaker 1:Yeah. Yeah. How do you think about that?
Speaker 7:Yeah. Well, it's it's not it's not about building offshoot models. This is still this is still about improving our core models. Mhmm. But there is if you think about science, science has a huge surface area.
Speaker 7:Yeah. Right? So you want there's a lot that we can teach models at the frontier Mhmm. That, you know, there's there's work that we can do to make to make our models even better at performing frontier science. And that crosses from pre training into post training and reinforcement learning.
Speaker 7:And so, we get to solve, you know, frontier problems in science to make our models better. There's also a whole lot of work that we can do on the tooling front. You know, scientists use a lot of different tools. Mhmm. And you want to bring those to bear so that the model is using the same kind of advanced scientific tooling that scientists are because then it can be an even greater force multiplier for the work they do.
Speaker 7:So there's there's a whole bunch that we're doing on the pure model front.
Speaker 1:Yeah.
Speaker 7:That's not the only thing, though. Because I think if there's anything that we've learned from the way that AI has completely revolutionized coding over the last year is it's two things. It's great models, and it's also integrating AI into the environment where engineers operate. Right? You don't you don't spend your time going to ChatGPT and copying and pasting back and forth.
Speaker 7:Yep. You use codecs in your IDE. Okay. And bringing the model into the environment where you're working is a huge part. That's why we launched Prism yesterday.
Speaker 7:The idea is, or I guess on Tuesday. Yeah. But the idea is to bring great models that can that can help with AI into the workflows scientists are using every day. In this case, Prism is about scientific writing and collaboration.
Speaker 1:Mhmm.
Speaker 7:And if you can help people communicate their ideas faster, if they can use AI to express the research that they've done and collaborate with other scientists, that's its own form of acceleration.
Speaker 1:Yeah.
Speaker 7:So we both want to make models smarter, and we wanna bring AI into the environments that scientists are operating in day to day. Both of those are parts of accelerating science.
Speaker 1:So talk about some of the integrations. ChatGPT at one point just got access to a Python REPL and could sort of write code and execute it in the the in the query for just a GPT five Pro query. But g ChatGPT also has an integration to Gmail, and there's a, some sort of business development relationship. What is your as you're bringing more tools to bear in the scientific workflow, is there some sort of balancing act? Do you just need to integrate with everything?
Speaker 1:How do you think about actually wiring up and, like, unhobbling the models?
Speaker 7:Yeah. I think it's about both a handful a set of tools that we think are going to be broadly useful that we can integrate ourselves. As an example, if you're in the process of trying to solve a hard scientific problem, you need to solve a differential equation. Yeah. The models are actually smart enough these days that they can solve a differential equation just by reasoning through it.
Speaker 7:Woah. But you also you also can, integrate a computer algebra system Yeah. A system that will deterministically and very quickly solve differential equations. Yeah. Why not let the model use that Exactly.
Speaker 7:And, you know, go back to doing what it does best, which is reasoning broadly about how to solve hard problems. So, you have that. You have, like, protein databases and biology. You have so many tools like this. Yeah.
Speaker 7:And I think it'll be important because I might be a scientist studying, you know, the evolutionary biology of snails, and I might have my own set of tools that I use or maybe small models that I've trained that are good at doing very specific things. So it'll be both about us teaching the models to use certain tools that'll be broadly helpful and enabling scientists to bring their own tools to bear so that the models can very deftly adopt them into the process.
Speaker 1:Mhmm.
Speaker 2:What does a ChatGPT moment look like for Prism within the scientific community?
Speaker 7:Oh, that's a good that's a good question. You know, I I I think it's going to be a I I think it's going to be a more, like, process of incremental compounding where you've got a product that helps people work and operate faster. You've got models that are going to be increasingly useful. And we're gonna see kinda two, you know, exponentials, if you will. One is just the exponential that the models are on and their ability to help any scientist who's adopted them do what they do faster, right?
Speaker 7:To aid in their thinking. I was just talking to a scientist earlier today who called GPT-five 0.2 a metal detector for hypotheses. Right? So he's thinking about he's got so many different ideas in his head. You can only run so many experiments.
Speaker 7:You only have so much time. And he uses GPT five as a thought partner in helping him hone in on the most valuable ways to test his ideas. So you've got that exponential. And then there's a separate one that comes from scientists beginning to adopt these tools because a lot of scientists still haven't adopted them. And the more that they do, the more that they individually move faster and the more that the entire field of science accelerates.
Speaker 7:So I think there's a lot to be excited about here.
Speaker 1:A couple weeks ago, talked to Andrew from Cerebras, and I was asking him about where, wafer scale computing is most exciting to him. And he actually cited science as a particularly valuable place. And I was wondering if you had thoughts on the value of speed or the value of different chip architectures in the scientific workload. I was kind of coming it like, well, developing drugs takes a long time. It's probably fine if the model goes off and cooks for an hour.
Speaker 1:But he was sort of pushing back on that. And I'm wondering how you think about the different parameters. Obviously, we're on an exponential with intelligence and capabilities, but there's also latency and usability and flavor. And there's so many other knobs that are being turned as the models progress and as the projects progress.
Speaker 7:Yeah. I think one of the interesting things about scientific problems in particular is that when you're solving the hardest frontier science problems, you need to do a lot of thinking. Right? If these problems were easy, really smart humans would have solved them long ago.
Speaker 2:Yeah. And
Speaker 7:so, the kinds of problems that are left often involve the model thinking not for, you know, five minutes or twenty minutes, which would be a long, a long time if you're inside ChatGPT. Yeah. But maybe an hour, two hours, twelve hours, two days.
Speaker 1:Yeah.
Speaker 7:And that is where we're going.
Speaker 1:Yeah.
Speaker 7:And if you have really fast inference that can take that two day rollout and turn it into a six hour rollout or an hour thing only takes ten minutes, then again, you that that just it's more opportunity for you as a scientist to maybe instead of testing two hypotheses, you're testing 20 in the same period of time. Again, it's acceleration.
Speaker 1:Yeah. To to go back to the chat GPT moment, how are you thinking about actually seeding your work into the scientific community? Because there's there's one angle where it's just it's just chatgpt.com. It sort of goes viral. Everyone's playing with it.
Speaker 1:That's part of what the ChatGPT moment was, was just anyone with a web browser could use it. At the same time, there's only so many real scientists. A lot of them are in labs or in academic institutions. And I could imagine you, doing partnerships or deals or anything to actually get something deployed into the most elite scientific environments? Have you thought about the different trade offs there?
Speaker 7:Well, one of the cool things is we're seeing so much organic adoption. Yeah. You go on Twitter these days, as you do, and you're like, every day, I feel like I'm seeing new examples where someone will say, you know what? I just solved this problem with GPT-five. Yeah.
Speaker 7:Or I gave this problem to my grad student and they were busy. It took them too long. I just, I wanted to make work of progress. I just gave it to GPT-five and now I have a solution.
Speaker 3:And
Speaker 7:so there's this incredible organic adoption because of course, when other people see that, other scientists see that, they go, Oh, wait a minute. Maybe the last time they tried the models was a year ago when they weren't at a place that they were going to really meaningfully contribute to scientific research. They could help with other things, but they weren't going to help with your hardest problems. Now they can. And so there's this groundswell of scientists that are adopting GPT 5.2 especially, I think, has been kind of an inflection point.
Speaker 7:Yeah. So it's it's exciting to see, and there's a lot happening, you know, even without us, with people just discovering this and talking about it.
Speaker 1:Yeah. A lot of people experience that with, like, Andre Carpathi's journey with vibe coding and they lot of people are, okay. Yeah. Like, if it's good enough for him, I gotta jump back in. That's funny.
Speaker 7:That Nateman is an incredible communicator.
Speaker 2:Yeah. Yeah. Really. What, what's the update on how, like, forward thinking labs are are thinking about integrating with a product like Prism? Ideally, there's a future where, a scientist could be at home, have an idea, may maybe they're working in pharma or something in biology, and they can just like start running.
Speaker 2:You can imagine somebody starting to run an experiment just based on a prompt, and then somewhere in the physical world, there's actual you know, the biological process is actually happening. How how much progress is there on that front?
Speaker 7:Yeah. I'm super excited about the world of robotic labs. I think it is 100% likely to be the the future that that that we're moving towards because you can do so much more in parallel, again, to the idea of accelerating science and moving faster. The world where you can have a hypothesis maybe that you've honed with, you know, back and forth with ChatGPT, In in this case, it may also be running simulations. You know, take if you're doing something like, fusion where you wanna do heavy simulation before you run an experiment because your experiments are expensive, then you have the model thinking, running a fusion simulation, looking at the results of that, refining its thinking, running another fusion simulation, and you do as much with the compute that you have in advance so that when you do something in the real world, it's, like, that much more likely to be successful.
Speaker 7:You can look at the same thing with respect to biology. There's no reason at this point that you need to have grad students, you know, pipetting one thing into another The
Speaker 2:idea that I think like a scientist in a lab coat could easily fade away where they're just like in a normal office. Yeah. You know?
Speaker 7:Or or at the very least doing the kinds of things that are incredibly hard for models for robots to replicate.
Speaker 1:Yeah.
Speaker 7:But there's a lot of science that can be totally automated. And the idea of robotic labs that are, you know, twenty four seven online that you can scale in parallel as far as as, you know, you can make it efficient, And you have models thinking you know, reasoning for two days to find the most, efficient experiments to run, maybe running simulations to test that. And then once they get to a good point, passing that to a robotic lab, which can experiment in parallel at high volume, the results pass back into a model, which reasons about the results and then goes out and runs a different set of experiments. You know, you're doing reinforcement learning with a loop through the real world. And that is absolutely Are
Speaker 2:robotic labs something that that OpenAI would ever do or is that best suited for an external partner? How do you think about that that point of the stack?
Speaker 7:I think it'll be both. We wanna partner broadly with with scientists that have their own labs that are already doing anything. Like I said, science is an extremely broad, it has huge amounts of surface area. There's no way that we can do even a tiny fraction of all of science. And I think there will be a lot of opportunity for us to learn from things like robotic labs to make sure that we're working really well with those scientists.
Speaker 7:So I think it will be both.
Speaker 1:Can you clarify the business model? There was some confusion about how this might be monetized.
Speaker 2:Poor poor Sarah Fryer.
Speaker 1:She she keeps getting I'm pulling for ads in science. I want a pill that I take. It helps me lose weight, but then I wind up loving Ford f one fifties. I'm willing to take that trade. Ad supported medicines.
Speaker 1:That's what we need. But no. What what are you actually thinking? Is anything changing?
Speaker 7:This is why I love you guys.
Speaker 1:We're your strongest defenders. Whatever you do.
Speaker 7:Yeah. No. Sarah said something when Sarah was talking about, oh, maybe there are ways to, like, monetize IP Yeah. She was speaking specifically to the idea of us doing partnerships with large companies, you know, pharma companies, people like that Yeah. Where there would be a specific partnership that was developed with the idea of sharing royalties in the future Yeah.
Speaker 7:Was not meant at all Yeah. About a normal Somebody signing up
Speaker 1:for a Yeah. Signing And up this already for happens with the OpenAI investment fund. There's startups that take that take capital from OpenAI. They build something on top of ChatGPT or GPT APIs. And, like, I I think most people inside sort of understood that, but thanks for clarifying.
Speaker 1:So in general, most people will just be on some sort of, like, API consumption based pricing or subscription fee, like, mostly the normal?
Speaker 7:The nice thing about Prism is you log in with your ChatGPT account. So it just you just bring your existing ChatGPT account along with you. Our this is not you know, there are not a billion scientists in the world. This is not, an effort to, like, build a brand new business model. This is about accelerating science because I think it's one of the most impactful and mission oriented things we could possibly do.
Speaker 1:Yeah. That makes a ton of sense. Give us the update on detachment two zero one. How's it going? Are you sore?
Speaker 7:Oh, it's been a blast.
Speaker 1:You've been working out a lot. It's been
Speaker 7:it's been an absolute blast. I've been in DC to various bases, things like that. It it I I think it is massively important that we bring Silicon Valley and and DC closer together because we have an incredible tech community. We have a country and a set of values that are worth defending, and, you know, it's a dangerous world out there. The more that we can do to, you know, to strengthen who we are and what we do, the better.
Speaker 1:That's great. Well, thank you so much for taking the time. Great talk to us. Fascinating stuff.
Speaker 7:Yeah. Thanks so much for having me on, guys. It's good
Speaker 2:to see you again.
Speaker 1:Great to you, Kevin. We'll talk to you soon, Kevin. Goodbye. Let me tell you about Railway. Railway Founder.
Speaker 1:Is the all in one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 2:And Next.
Speaker 1:Up next, the New York Stock Exchange. Wanna change the world, raise capital at the New York Stock Exchange.
Speaker 8:Order inbound.
Speaker 1:And, yes, we do have a surprise guest who wasn't on the lineup, but he's joining. We have Mehul.
Speaker 2:Dramatic. Dramatic. What's going on?
Speaker 8:Hey, guys.
Speaker 1:Thanks for You're gonna Thank you so much.
Speaker 2:You're gonna love this. I the other I think it was two nights ago, my youngest Mhmm. One and a half walked in the other room. And I was pretty quick to chase after her, you know, because she's very very active. Yeah.
Speaker 2:She can destroy a lot of things. And I go in the other room and she has the the like, you know, soap dispenser of the Matic and she has it fully fully vertical fully vertical trying to drink out of it. I was so appreciative of your design because nothing came out.
Speaker 1:Wow. So That's glowing review.
Speaker 2:But I was so worried for a second because it's like looked like she was just trying to chug No.
Speaker 1:That could end up very messy, potentially harmful. Who knows?
Speaker 2:Anyways, so so excited to have you back on. Yeah. We've been loving our Maddox. Thanks for having And I know you have some big updates.
Speaker 1:Yeah. What's new in your world?
Speaker 8:We just announced today that we've raised $60,000,000 in So the next Woah. So led by yeah. And
Speaker 2:Led by who? Genius.
Speaker 8:Led by Sutter Hill Ventures and Vic Miller. Oh. Who is joining our board. Big dogs. We've had thank you.
Speaker 8:And we've had some amazing investor in Gavin Baker at Tritties.
Speaker 1:Oh, yeah.
Speaker 8:Antonio Gracias at Valor, a bunch of other joining on their own. So it's great. And then for us, this is sort of the output of the product we built and shipped. Yeah. I don't think this would have happened without us shipping, so that's been the good part of it.
Speaker 8:That it's not about the demos. We are based on real product, real usage, real customers.
Speaker 2:Yeah. Real real robots. Thousands of them. Real robots. Out in the real world doing doing real work.
Speaker 8:Yeah. We've we've sorry. Jump in. We've shipped more than 6,000 now and have cleaned about 110,000,000 square feet
Speaker 2:There you go.
Speaker 8:Which results in 80,000 miles travel. So part of it.
Speaker 1:That's amazing. That's wild. Talk to us about pricing and willingness to pay. Obviously, with modern AI robotics, everything that you're doing, you're creating more value for the customer. And
Speaker 2:Correct.
Speaker 1:The I mean, the sales show people are willing to pay more than the previous generation, which I feel was, like, more of a three digit price point. And we were we were talking about, like, will people really pay $50,000 for a humanoid, a 100,000? Like, that feels like a big jump. But what are you seeing in terms of just willingness to pay for robotic processes amongst consumers?
Speaker 8:So so, great question. We actually launched first time in April 2023. No one cared. But we started as a robotics as a robotics as a service. Yeah.
Speaker 8:And and we tried to, launch it as a subscription, and that was like an organ rejection. That didn't work at all. So people are definitely not interested in paying yet another subscription. That's another one thing we learned. Then we priced it at about $1,500 plus subscription as an attachment in November 2023 and learned again that that didn't work as well.
Speaker 8:Mhmm. That that was the price point at which a lot of people weren't yet convinced that at least the robot, vacuum or or, this could do a job. So we really took that feedback to heart and then eventually priced it much, much lower introductory price of what $9.95, and now it's Yeah. Because of tariff, we have had to raise it a little bit. Sure.
Speaker 8:But, really, what we learned, and this was our thesis to day one, that if you take a step back and think about it, there is literally zero ubiquitous consumer electronics device priced higher than $2,000.
Speaker 1:Mhmm. Yeah.
Speaker 8:Beyond $2,000, it's prosumer or you pay for cars. Right? There is literally nothing. Even my Yeah.
Speaker 2:So so yeah. That's why that's why
Speaker 1:bucks now.
Speaker 2:Yeah. That's why I think the humanoid robot rollout is gonna be just really brutal because you're trying to get adoption of a new product that is still in very much like gonna be in an r and d phase. Yeah. And you're asking people you're asking people to pay car money.
Speaker 1:But counterpoint Exactly. Piggyback rides, you could take it to work. Replace your car.
Speaker 4:You hop on the back.
Speaker 2:A car that can clean your house. It's just a car that can do the dishes.
Speaker 1:And I'm hopping on the back. Give me a piggyback ride to work. And then while I'm working, you're gonna go around and clean, do all sorts of stuff. Don't know.
Speaker 8:Well well, ADA is coming. Maybe we'll just do the work for you. Maybe we'll go there. They will be teaching one on TV at the end.
Speaker 1:No more commutes, but you will need a clean house, so you will buy a Matic robot in the future.
Speaker 8:That's exactly right.
Speaker 1:Well, I mean, talk about the AGI process, the process and the models. Mhmm. We're seeing, like, incredible advancements all over image, video models, reasoning models, agents. Are you seeing just natural improvements to the performance of your fleet? Is that just something that rolls out for free?
Speaker 1:Are you doing your own training runs? What have you learned or integrated from the progress in just fundamental AI research over the past year?
Speaker 8:That's a great question. We started with this idea that AI is coming and AI would make progress, and and that has always been part of it. And we are taking advantage of VLMs and SAM three and all the open source model that are available to us. But at the same time, one of the things that we had realized on day one that at least when it comes to home, getting data given the privacy that consumers want, especially at this price point, was going to be a challenge. Okay.
Speaker 8:So we knew so we knew such that just like Tesla stole the car, collected data, and now is moving on to autonomy and and robotics in the same exact way. The robotic vacuum was our wedge. That's the way we wanted to get inside home, earn customers' trust, build a brand Mhmm. And also a data wedge. And we knew that if we build it the right way by doing everything on the device and earn customers' trust, they will share data.
Speaker 8:And that's actually one of the most interesting thing that the long tail with which we actually need need all that data is coming in and customers are willingly sending it to us and they are curating it for us as well because we know this data is actually error oriented. So that's, like, incredibly helpful. And if you take a step back and think about it, even for humanoids, if you had a humanoid in your home, you don't want it to step onto that dog poop or cat vomit or get tangled up in wires or rug tassels or, you know, maybe, squeeze your or or break your kids' toys or dolls. Right? So every single thing that we do actually directly leads into it.
Speaker 8:So our thought was always that, hey, instead of sort of building a humanoid in day one, let's grow a robot. Let's grow Rosie the robot, and we'll solve perception first just using floor cleaning space, and then we can worry about manipulation and kinda think about what would kid be able to do it between five to ten year, and can we enable that sort of functionality and make product useful. And then ultimately get to trust
Speaker 2:to think about, like, the actual reality of a humanoid using a regular vacuum, you know, just like dragging around a vacuum or using a Dyson. It's like, is that really the most efficient way to, like, clean a floor is to have this huge robot, like, human sized robot? It's like
Speaker 8:Actually, it was in that movie by Santanio Man. I remember that with Robin Williams, and and he was using the regular newspaper, and he was doing And we're like, wait. That doesn't make sense. Like, you know, do you Like, we have this humanoid, really amazing intelligent robot, but it our appliances never changed. So there was always this idea that it has to evolve in both ways.
Speaker 1:Yeah. Any any traction or plans on the enterprise side? I'm thinking, like, hotel rooms. They need to be incredibly efficient. Every minute that someone is in there is a minute they couldn't be somewhere else.
Speaker 1:Do you have plans there, or is that just a total distraction?
Speaker 8:At the moment, hardware that we've built is really just for homes. Yeah. I did put one in hair salon, and it works fine. We did put some in hotels and everything. So perception and algorithms wise, it it is working across the board.
Speaker 8:Yeah. We do have people using it in their day care centers, churches, schools. Yeah. Animal hospital is another one, that we've seen use cases. So there is an opportunity there, but I think that will require a little bit of a hardware tweak.
Speaker 8:And then we just have to question, is it really about savings time, which is really what we wanna do, or is it about just saving costs? Mhmm. And if it's saving costs, then it may not be as interesting of a problem. But if it turns out that it's a labor shortage oriented one, then we really need to go and look into it.
Speaker 1:What about lawnmowers?
Speaker 8:Lawnmowers is something we wanna stay inside home for a while.
Speaker 2:Okay. Okay.
Speaker 1:What about advertising? What about advertising?
Speaker 2:The reason lawnmower think think about it. It's like, you guys would make it a fantastic fantastic lawn mower.
Speaker 1:Mhmm.
Speaker 2:But I've never once thought like in between when the like the landscapers come to my house. I've never once thought like, oh, I wish my grass was just like a little bit shorter today.
Speaker 1:Perfect every
Speaker 2:because they're just coming every week.
Speaker 3:Whereas in the home in
Speaker 2:the home, it's like your house can always be cleaner.
Speaker 1:Yeah. Every day. What about what about an ad supported tier? It says, hey, I'm on linoleum. Why don't you upgrade to hardwood?
Speaker 1:We'd love to connect you with this local contractor.
Speaker 2:Nord VPN. I see I see you're spilling you're spilling a lot of vegetables on the floor. Why not athletic group?
Speaker 1:We've been talking to Eric Sue for too long today. He he got us thinking on ads and everything.
Speaker 2:What what what yeah. What's the plan for this year? Like, you just scale, sell a lot more robots?
Speaker 1:Do you need to be in Best Buy and and retail distribution at some point? What do you What do think?
Speaker 8:Not at the moment. Luckily for us, at the moment, we are still supply constrained, so we would keep selling and doing build to order model that allows us to keep working capital low.
Speaker 3:Sure.
Speaker 8:And and the goal is really to scale we scale about 20 x last year, selling from 200 to 6,000 robots now. We're thank you. And and try to go, another 10 to 20 x this year. That's the goal at the moment. And there is a second product in the work.
Speaker 8:I won't be able to go into much details yet, but there will be some
Speaker 1:guess it and all of our guesses were way off base. A robot that you can take a ping from. A not supported robot. He's like, no. You guys are not even close.
Speaker 1:Anyway, thank you so much. Congratulations.
Speaker 3:Great great
Speaker 2:to get the update.
Speaker 1:Always great to have you on the show.
Speaker 2:Yeah. I love I love
Speaker 1:And we
Speaker 2:appreciate your product. And you know, we talk about robots a lot on
Speaker 1:the show. This is a good one.
Speaker 2:We love a robot
Speaker 1:With company a fleet.
Speaker 2:Yeah. With with a real fleet.
Speaker 8:And I think Dalian's joining today telling that we're still growing without advertisement. Although we will need some at some We will.
Speaker 1:Yes. Yeah.
Speaker 8:Alright. Well, have
Speaker 1:a great rest of your day. We'll talk to you soon.
Speaker 2:Great to get cheers.
Speaker 1:Goodbye. Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. And I'm also gonna tell you about Restream. One livestream, 30 plus destinations.
Speaker 1:If you wanna multistream, go to restream.com. The other news today is, of course, that rare metals are absolutely spiking. Gold's up 4%. Silver's up 7%. Copper's up 10%.
Speaker 1:Platinum's up 7%. Palladium's up 5%. Oil is up 4%. Geiger Capital says, don't worry, pal, said it means nothing.
Speaker 2:I mean, yeah. Look you look worried.
Speaker 1:A photo that
Speaker 2:was We're all a little bit worried. We
Speaker 1:will be monitoring that. It is an odd it is an odd, you know, dislocation in the market. Boring business is posting a meme saying realizing our that our collective retirements now depend on whether digital gold coin created by an anonymous founder goes up or down. Is that Bitcoins we're renewing? Wait.
Speaker 2:No. So so retirement accounts will be able to do directly Mhmm. Buy This
Speaker 1:is from call
Speaker 2:sheet assets.
Speaker 1:From the SEC chair. Now is the right time to open four zero one k retirement market in crypto. And so more more push into that.
Speaker 2:One update, some some more updates on the Apple numbers, Apple earnings. Mark Gurman says massive Apple revenue beat a 144,000,000,000 in overall revenue, 85,000,000,000 in iPhone revenue, 25 and a half billion China revenue, and 30,000,000,000 in services revenue. Tim Cook gets to keep his job. Mhmm. Obviously, obviously a joke.
Speaker 2:But and we can close out.
Speaker 1:We we we gotta do some of these timeline posts.
Speaker 2:There's lot of good Well, let's let's pull up this video.
Speaker 1:Okay. Let's pull up.
Speaker 2:AI is gonna AI is gonna take your job. What job?
Speaker 1:Is great. We will pull this up while I tell you about graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 2:Alright. Pull this up.
Speaker 1:And let's go to AI with
Speaker 2:the job market.
Speaker 1:Just dream driving is the entire
Speaker 2:job. Double I
Speaker 1:I've seen this meme template. I have not seen this exact video, but the jump in that car, you have to be going so fast.
Speaker 2:This makes me wanna buy a beater And just drift it? Just wait for a rainy day.
Speaker 1:Drifting is is next up on the bucket list. You gotta you gotta learn how to drift like that.
Speaker 2:Maybe stay off the
Speaker 1:bottle. Maybe stay
Speaker 2:off the bottle but
Speaker 6:And off the side.
Speaker 2:Maybe close down a road somewhere.
Speaker 1:Yeah.
Speaker 2:Delicious Tacos with a fantastic post says AI CEOs are like if Henry Ford said these cars are gonna run over all of your children.
Speaker 1:They're getting I
Speaker 2:appreciate it. I appreciated this one just going back to, you know, the the where's our where's our AI Steve Jobs. Yeah. You know, we can't have every lab founder saying that everyone's gonna lose their job and, you know, AI is gonna, you know, kill everyone on a long enough time horizon.
Speaker 4:I I I do think Dario has done like a a reasonably good job. If you're like pretty tapped in right, he has this great essay. Mhmm. Wait. I'm All watched over by
Speaker 1:Machines of Love and Grace.
Speaker 4:Yes. Yes. Yes. I I feel like he's he's not that public yet. He he like, he's starting to do a little bit of a press tour right now.
Speaker 4:Yeah. But I I think if he was more in the public eye, I think he could be that that person definitely.
Speaker 1:Yeah. Mean, Demis has also done a fantastic job in in in in in his one person that's, like, not really highlighted with those questions. But, I mean, this delicious talking I suppose, like, Dart is definitely in this crowd because, you know, he is talking about job displacement.
Speaker 4:I guess his more recent essay was about the the catastrophic risks. So maybe
Speaker 1:are important, and and it's good that it's good that he is talking about it, but it is a very different it's a different world than than other innovations. Jeremy
Speaker 2:Yeah. Fawn says the best way to evaluate a VC is by picking the one with the least bad podcast you'll be forced to
Speaker 1:Mhmm.
Speaker 2:Go on. Of course, if you raise from a VC, you're probably going on their podcast. Just face it. You may as well pick
Speaker 1:the one
Speaker 2:with the best podcast.
Speaker 1:Buckle up.
Speaker 2:There are some Yeah. There are some good
Speaker 1:The Jocko Willink venture capital fund. That's what you gotta do. You gotta do Jocko's pod. That would be amazing. G p t five apparently serving it is profitable according to epoch AI.
Speaker 1:Gross margins were around 45% making inference look possible profitable. But after accounting for the cost of operations, OpenAI likely incurred a loss, of course. They have a huge staff. There's a lot of big CapEx. There's all sorts of different stuff.
Speaker 1:But just on the actual inference, this confirms what a lot of people were saying yesterday about just comparing the open source models to the the private models inference gross margins seem healthy, which is, of course, good
Speaker 6:news.
Speaker 2:We went on the Colin and Samir show
Speaker 1:We did.
Speaker 2:To talk about TBPN and media. And John Palmer didn't just listen, he studied.
Speaker 1:No, studied.
Speaker 2:And he had a great take here. He said, on the Colin and Samir Show, John Coogan laid out a barbell thesis in media. Value either accrues to the platforms or the individual personalities, platforms being YouTube, Spotify, X, etcetera, or the individual people creating the content. He says, I'm guessing that software is headed to the same place. Value goes to the platforms with monopoly distribution, Google, Stripe.
Speaker 2:You can think think of system of records, etcetera. Mhmm. Or the individual vibe coders shipping one man businesses at a thousand x lower cost. Not much value in between. What happened to the media business is now having a software when production costs drop a thousand x.
Speaker 2:Remember, to make a show like this historic and distribute it historically, we would have needed to be on a major television network. Now we can do it with a tiny fraction of the cost.
Speaker 1:And restream.
Speaker 2:And restream, of course. But, anyways, interesting interesting take, and I think we'll see certainly see some of this play out.
Speaker 1:Gary Vaynerchuk rebranded his agency for enterprise clients. Chuck Chuck Media.
Speaker 2:Chuck Media.
Speaker 1:He's been he's just reinvented himself so many times. He's he was Gary Vaynerchuk. I think that's his full name. Then he was Gary Vayner or VaynerMedia, and then Gary V, and now just Chuck, which is very interesting. I've talked to some people who have worked with them.
Speaker 1:The oh, wait. This is a different agency. Oh, interesting. Vaynerchuk's small business agency, the Sasha Group, is being repositioned for enterprise clients as Chuck Media. I think that's separate
Speaker 2:from the
Speaker 1:which is its own thing. Fascinating. In other news, TreeHacks at Stanford is looking for new judges. If you have experience building a notable project, building a major company, you're a journalist, a creator, etcetera, please reach out to I'm gonna not pronounce that, Bijs, coding dev. He's a 19 year old CS Stanford.
Speaker 1:And I was thinking about this, hackathons were huge in, yeah, don't know, 02/1035. And then they sort of fell off or just became sort of like background noise. Like, they would happen, but nothing was that exciting. And this feels like the best time to go to a hackathon because people are gonna be vibe coding, like, truly fully functional products. And there's something at the pressure of meeting a bunch of people, spending two days, you know, staying up all night grinding.
Speaker 1:It's really, really fun.
Speaker 2:You have to Yeah.
Speaker 4:Don't if hackathons have necessarily declined. Like, when when I was at school Yeah. Hackathons were, like, massive.
Speaker 2:Yeah. Just kept getting bigger.
Speaker 1:Yeah. I I I guess just the novelty wore off and they just became background noise. Yeah. That's right. But it's got to be the best time ever.
Speaker 1:I remember the first hackathon hackathon I went to, it was like, oh, cool. Like Twilio exists. So you can like build something that texts you. And now it's like, okay, like you can use agents to just code you everything. And you're and the the the the pool of people, one of the first hackathon I went to, I was I didn't really know programming at all.
Speaker 1:I learned a bunch. I was able to build some things, but it took a long time. And by the end of the hackathon, you sort of just had a landing page that barely worked. Now you can definitely leave with a full fully fledged product if you walk in for two days at a long hackathon.
Speaker 2:Unicorn valuation potentially.
Speaker 1:Right? Oh, yeah. For the company, for sure. And yeah. This seems like a lot of fun.
Speaker 1:So head over to three hacks.
Speaker 2:I have to get we both have to get on with Sydney.
Speaker 1:Oh, do? Yeah. Okay. So Well, we will have to talk about sticker packs tomorrow.
Speaker 2:We can talk about this for a second.
Speaker 1:Yeah. Plant the bottom. We From can talk about
Speaker 2:Dom, founder of Fast, the payments company, launched a new company called Stickier, and I was super confused because he's selling, stickers with the TBPN logo. This is very weird. And It's
Speaker 1:supposed to be a way to, like, short overhype startups.
Speaker 2:But you're just buying stickers with other people that Very I
Speaker 1:questionable where this will go. We'll have to check it out more in the future. Anyway, leave us five stars on Apple Podcast and Spotify. Thank you. Goodbye.
Speaker 1:Nice
Speaker 7:work, brothers. I'll see you on the next one.