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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVP. Yeah. Today is Wednesday, 11/12/2025. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital capital. What's going on over there, Shorty?
Speaker 1:You got you got caught lacking?
Speaker 2:I was publishing an essay.
Speaker 1:You were publishing an essay. It's live on X now. You can go listen to it. You can also subscribe at tbpn.com. Our Substack will email you every morning with the TBPN newsletter and, you know, 500 words from me or Jordy.
Speaker 1:It's a lot of fun. Go check it out. Also, check out ramp.com. Time is money. Save both.
Speaker 1:Easy to use corporate cards, bill payment, accounting, and a whole lot more all in one place. The thing that got Jordy to learn to type was this video, this launch video. You were like, I gotta write an essay. I gotta learn. I gotta lock in.
Speaker 1:I gotta learn how to write because this is respond. This is this is, it's it's enraged me. Were you enraged?
Speaker 2:I wasn't enraged. I try not to let the Internet make me mad.
Speaker 1:Okay. But they were trying to enrage you and
Speaker 2:were trying
Speaker 1:they enraged. They me. Tried. Made you angry.
Speaker 2:Yep.
Speaker 1:You got angry. You weren't enraged. You were you below enragement, but you were above angry. And so you had to put him in the truth zone. You had to write a long post, an essay about it.
Speaker 1:We'll go through it, but I'd love to watch the Chad IDE BrainRot code editor video. First, I wanna see I wanna see the video for myself. Let's play it. K. So he's got some Newport cigarettes.
Speaker 1:He's packing, pulls out a cigarette.
Speaker 2:With the Stanford.
Speaker 1:Lights it up. He's got the cutoff. Stanford What is this music that's playing? He's got the the guitar in the background. And what is he playing?
Speaker 1:Some sort of plank plank
Speaker 2:This is steak.
Speaker 1:Oh, this is steak. This is gambling. So he's gambling. And
Speaker 2:He's gambling in the IDE. In the Okay.
Speaker 1:So I assume I assume that means he's won something or other. I I actually don't know what the stake UI looks like. Okay. So he's done.
Speaker 2:Yeah. There's
Speaker 1:Winning. He he has won the the gambling session with stake, and now he's back in his IDE. And he writes a prompt, and he says, test the code, And it pulls up some sort of mobile game that it's playing. Do you do you
Speaker 3:know This is Clash Royale?
Speaker 1:This is Clash Royale. Okay.
Speaker 2:Have you played?
Speaker 3:I have played, in middle school. Yeah.
Speaker 1:Interesting. I've I I I never played, I never really got into any mobile games. I did play Polytopia. I like Polytopia. That's a good game.
Speaker 1:It's a mobile game. It's like Age of Empires, but on your phone.
Speaker 3:Elon is a big fan of that.
Speaker 1:Elon's big fan of it. And with Polytopia actually, the entire Elon universe is sort of into Polytopia. It's like it's like how you gain status at some of these companies. It's like Okay. Winning Polytopia.
Speaker 2:So I'll start by saying I think the video is funny.
Speaker 1:Okay.
Speaker 2:And I'm sure the founders are smart.
Speaker 4:Okay.
Speaker 2:And I think they they, for for a low budget launch video, I think they did well. They broke through.
Speaker 1:That is a very low budget launch video. That that literally cost nothing.
Speaker 2:Yeah.
Speaker 1:Okay.
Speaker 2:So I think that's great. And I'm not and I and I wanna be clear that I'm not bearish Yeah. On the founders
Speaker 1:Yeah.
Speaker 2:At all. But this made me think of something, and I'll I'll read through my post. So the title of the essay that I just put out, rage baiting is for losers. This is in itself rage Rage baiting. You have been rage baiting.
Speaker 4:There's a
Speaker 2:couple levels. But I said yesterday, YC announced Chad IDE, aka the Brain Rot Code Editor. Chad is an AI code editor that allows you to gamble, watch TikTok, and use dating apps while you work on coding tests. Their launch rightfully got a lot of attention. On one hand, it's funny.
Speaker 2:On the other hand, what are we doing here and why does this belong in the official YC account? To understand Chad IDE, Cluely, icon, friend, and the new class of Gen Z startups, you have to understand the online environment that these founders grew up in. If you grew up on the Internet and you studied how and why certain people would regularly go viral, you know that making people mad has and always will be an effective way to get attention. The feedback loop is simple. You make something that makes people angry and people comment, share, and dunk.
Speaker 2:And because feeds are optimized to show posts with high engagement the most, you get a lot of reach. Rage baiting for commercial purposes, in my view, was pioneered by course bros. People like Tai Lopez realized that making the masses mad was an effective way to drive course sales. You could flaunt Lamborghinis, make a bunch of people angry, and as long as a handful of people found their way into their course, it was a viable, repeatable strategy. Historically, on x, rage baiting was a marketing strategy, not a product strategy.
Speaker 2:Accounts like sweaty startup aka Nick Huber frequently post things to get an angry reaction and the subsequent reach. But behind the scenes, Nick has always been running a pretty normal commercial real estate fund. In 2025, rage baiting has become a product strategy. Cluely started as an app for cheating on coding interviews. Chad IDE's only known differentiation from the other 100 AI native IDEs is that you can gamble and swipe on dating apps in it.
Speaker 2:The rage bait is sitting at the product level now. It's becoming clear that while rage bait might occasionally work as a marketing strategy, it really should not be employed as a product strategy. Running a successful VC backed company requires you to build a coalition of people that want to see you win. Getting media, investors, talent, and customers on your side is not an easy task. Rage baiting, whether at the marketing level or product level, is the most effective way to get people who could be potential investors, customers, or team members to actively prey on your downfall.
Speaker 2:YC has long provided some of the most durable, high quality, generalizable advice for startups and I believe that it has had a tremendously positive impact on the companies that go through YC and even those that don't. Launch now, make something people want, do things that don't scale, ignore your competitors are just some some of those. So as someone who believes that YC is one of the most important and influential institutions in tech, I believe it might be time to include this in their list of essential start up advice. Rage baiting is for losers. So, again, I think, you know, I'm sure that I'm sure that there's like more to chat IDE than than we've seen so far.
Speaker 2:But I do think it's notable that rage bait has moved from kind of a fringe marketing strategy to a marketing strategy within tech to now living at the product level. And I just don't think that's gonna create a lot of enduring value for the companies that pursue that strategy.
Speaker 1:Yes. So the the, the reaction to this was very negative, and I think there's a few it it really has to also layer with the stack.
Speaker 2:It ends up it ends up it ends up impacting the brands of the firms that fund these ideas.
Speaker 1:Of course. Of course.
Speaker 2:Of course. Post. I'll try to pull it up here. Let's see here.
Speaker 1:The the most important different, like, the most important thing in your piece that I liked was this idea that there is rage bait marketing, doing a stunt, doing something a little bit crazy, but then delivering a quality product is separate from making the product itself rage baity. And so I think a lot of people Yeah. Would saw this video, they wanted they they were wondering, what does the product actually do? Because all you've told me is that you created an April fool's joke, and Google's been doing April fool's jokes for years. Some of these April fool's jokes I was looking at were insane.
Speaker 1:They in 2000, just a couple of years after they launched, they created a a fake mind reading search engine. Then they did Pigeon Rank, an explanation that, Google's algorithm relied on trained pigeons. They launched a a free home broadband service, so Internet delivered through your toilet. They they announced, Google Translate for animals. You could talk to your dog, and it would try and translate.
Speaker 1:These were all jokes. They were never real products. It was just the Google team having some fun on on April Fool's Day. They would get a bunch of attention, and then they would route you to the safest, fastest, most secure email system possible. Right?
Speaker 1:Like, a real product. And but they would have a lot of fun. And sometimes they would even build a little, like, web experience around it. But at the end of the day, it was like, yeah. But, also, we're we're ready to sell you servers with Google Cloud Platform.
Speaker 1:We're ready to sell you, like, know, ad units on Google. Like, it was like, we have a serious business. And so the the question for me and the question I had for Tyler was what's actually under the hood at Chad IDE? The company is not called Chad IDE. It's called Clad Labs.
Speaker 1:The steel man here is that, hey. IDEs are boring. You gotta do something funny. Film a funny video. Create a fake product, but then have something under the hood that is actually real, that does actually advance the conversation, and is maybe something that a real product try
Speaker 2:to sign up That might need a code.
Speaker 1:Yeah. What what yeah. So what happened? We we asked you to sign up. What happened?
Speaker 1:And one
Speaker 5:one thing
Speaker 2:I would say before we go further, I think this would have been a brilliant kind of, like, stunt
Speaker 1:Yeah.
Speaker 2:If they did it as a stunt, and it wasn't core to the brand that they're building. It wasn't core to the product. If they did it Yes. If they released a product and then later said, hey, we're adding this BrainRot functionality. Totally.
Speaker 2:Like, that would have been that would have been Like Got it. I think a good reaction
Speaker 1:If it was April fool and and Michael Truell at Cursor or Scott Wu with Windsurf were like, we're doing we're doing a BrainRot version of the IDE. Everyone would be like, that's hilarious. Okay. Now back to using Windsurf and Cursor. Right?
Speaker 1:Like, that's just what Yeah.
Speaker 2:And I don't think it it it certainly probably is not a fit for Cursor's brand.
Speaker 1:No. Not at all.
Speaker 2:Creating something to try to compete in that space, it would have been a a good strategy.
Speaker 1:But I I even But, again, even there's a I I I would actually fight you on that. I I think that Kursar has this very Michael Trull has only done, like, a few podcasts. He's he did that podcast with Patrick, Collison. He's he's this very, like, thoughtful software engineer. Scott Wu is this IMO gold medalist.
Speaker 1:Like, there's something that actually would be very funny and might actually break through if they did some silly brain rotty stunt because it because it would be like, well, obviously, they're not actually doing that. Obviously, they what they're focused on is just improving developer productivity. And instead, this it just it it hasn't answered a lot of the question of, like, what's behind the curtain? What's behind the marketing? Because if it's if it's brain rot stuff, if it's if it's jokes all the way down, like, what are we really doing here?
Speaker 2:Yeah.
Speaker 1:But, Tyler, what was your experience actually trying to use this product?
Speaker 3:Yeah. So so I I go to the website. Mhmm. You can't download it yet because it's still in beta. You need you need a code.
Speaker 3:Mhmm. I DM'd the founders, they didn't get back to me. Mhmm. But, like, I mean, the the company is not Chad Labs. It's Cloud Labs.
Speaker 1:Yes.
Speaker 3:This, like, it's the Chad ID, but, like, this is obviously a marketing stunt.
Speaker 1:I I
Speaker 3:I kind of disagree.
Speaker 1:Yeah. But can you get a product from Clad Labs? Like, Google would come out with a joke, you know, pigeon based algorithm or something like that. That would be out or, like, Google Translate for animals would be at, like, animals.googletranslate.com that day. But Google Translate would still work.
Speaker 1:So, like, walk me through the Clad Labs product. Like, what is their core product outside of the stunt?
Speaker 3:Yeah. So I I I mean, obviously, I haven't tried it, so I'm kind of giving them the benefit of data here. But, like, when you go to the download page, there's options like which brain rot do you want.
Speaker 1:Yes.
Speaker 3:And it's like, you know, steak or like Minecraft parkour or whatever. And then there's an option that says, I don't want brain rot.
Speaker 1:Okay.
Speaker 3:So there is obviously a product here that is, like, not just it's not just the BrainRot. That's not the entire company. Yes. Like, when you go to the pricing page, it says that it says, like, there's, you know, the the free pro super whatever tiers. It's not listing like, oh, this one has the Minecraft one.
Speaker 3:It says like, it has unlimited, you know, agent tool use.
Speaker 6:Okay.
Speaker 3:Like, there's obviously a product here. This is a marketing stunt. I, like, believe that.
Speaker 1:Okay.
Speaker 3:I I, like, I I kind of disagree that this
Speaker 2:I just think just think it's I just think it's a poorly executed stunt and be and and
Speaker 1:Because you have not told me what the differentiator is. Like, how is this better than Windsurf? How is this better than Cursor? Like, what is their value prop other than just like, oh, cool. It's a newer it's a newer Cursor with less funding, and the team's less serious, but they're good at making viral videos.
Speaker 1:Like, what does
Speaker 3:that Part part of
Speaker 2:reaction here that I think is, you know, there there's an account Yeah. Developing Valhalla is quoted the the post from YC. He said, this is what we're promoting. Instead of instead of telling young 20 year old founders to take us to the moon, to create better societies, to improve the material conditions of our fellow man, YC is funding garbage that is only making our society worse. You don't hate VCs enough.
Speaker 2:So I think there's just naturally like, I I just look at YC as as an institution that has consistently provided just very sort of like like the best quality advice that's generalizable Mhmm. Right, for for just any any person that wants to get into startups.
Speaker 7:So Mhmm.
Speaker 1:Let me tell you about Restream. One livestream, 30 plus destinations, multistream, reach your audience wherever they are. There is there's this post by Sheila Mo, not here. He says, met a very successful founder who said, I chose fund blank because they gave me credibility when I needed it. Now the fund backs everything, including the dumbest ideas I've ever seen.
Speaker 1:I don't think the next wave of founders will pick them. The credibility they had is gone. And I was thinking about how AUM weighted brain rot or a AUM weighted slop is not an excuse for slop and and and controversial investments. Like, if you if you put if you put 1% of your fund into something that is just going to go all over the Internet and be like, we are the most degenerate. We're the craziest.
Speaker 1:We're the most insane. We're the most fraudulent, like, in your face, company, even if it's only 1% of your fund, you're not gonna be able to say, like, no. No. No. 9% of my investments are just, like, you know, trying to cure cancer genuinely or, like, actually trying to improve developer productivity or, like, 99% of my investments are just reasonable down the fairway, like, good businesses.
Speaker 1:But 1% of them I took a flyer. 1% is a little bit crazy. Well, if that 1% gets a thousand times more views than your enterprise SaaS portfolio, like, you're gonna be known as the slop fund. So, like, you need to be careful about that Yeah. Because because the nature of the Internet is that is that a a viral rage baity video can get a thousand times more views than your latest bet on AI legal services that might actually be helping improve lawyers' efficiency or something like that.
Speaker 1:You know? Yeah.
Speaker 5:So, like, terms of branding Part
Speaker 1:of it is real it's real.
Speaker 2:Has always had you know, one of YC's challenges as an institution is that they can only accept something like I think it's like less than one isn't it less than 1% Oh, locations. So super small, you know, very very low acceptance rate. Yeah. And so if you're a founder that applied with an idea that you think is, you know, world positive and then you see them announcing this kind of stuff, they're gonna be soup you know, that those founders are gonna be even more frustrated. Mhmm.
Speaker 2:Right?
Speaker 1:I want Tyler's reaction, but first, wanna tell you about Privy. Wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, Securely spin up white label wallets, sign transactions, integrate on chain infrastructure, all through one simple API. Tyler, what do think?
Speaker 3:Okay. So, like, as a steel man, like, say that I have some new way to do, you know, agents
Speaker 1:Yes.
Speaker 3:In my editor.
Speaker 1:Yes.
Speaker 3:Right? And it's like, actually it works way better than Cursor. It's way better than Windsurf. It's better than everything else. And I applied to YC with this Mhmm.
Speaker 3:Thing. Okay. There's like probably, what, like 10 other YC companies that are like, YC companies in the same batch doing similar, you know, coding editor stuff. How do I differentiate myself? I feel like this is, like, fairly reasonable.
Speaker 3:You like, to get more views, like, imagine I mean, I I think, in their opinion, the idea is, like, okay. We get some users that are think it's, like, funny to gamble in their IDE, then they realize, like, oh, this is actually a pretty useful feature. Mhmm. And this is all assuming that they actually have good tech underneath. But, like, what it's like, Jordy, if if you were in YC and you had a coding editor company, like
Speaker 1:How would you launch it?
Speaker 3:Yeah. How do you, like, recommend, like, instead of doing stuff like this, how do you how do they differentiate themselves?
Speaker 1:If Clad Labs had launched something and they were just like, hey. Like, we're, you know, we're we're building a better IDE. Here's how we use our model. Oh, Cursor, They're currently in a fight with Anthropic. The the rates are through the roof.
Speaker 1:Ours is cheaper for this one reason, and we have this better UI and better functionality. And we also have this engineer who figured out this little this little solution. And we work on mobile, and they don't. Or we work on iPads, and they don't. Or we work for Fortran, and they don't.
Speaker 1:They only do Python. You know, there's a million ways to, like, articulate your differentiation. They certainly it doesn't seem like they even tried to do that. It doesn't seem like they even tried.
Speaker 3:Sure. But I I think there you could probably find companies in this YC batch doing exactly that. Yes.
Speaker 4:You don't
Speaker 3:know their name.
Speaker 1:Yes. Yeah. Yeah. That is true. That is true.
Speaker 3:And you do like, I I just go back
Speaker 2:I just go back to what I said, which was which was separate out the rage from the core product and have it be like a marketing stunt, I I still think you could have gotten the same amount of attention. Then people would go in and they'd be like, wait. This is actually a really cool
Speaker 7:Yeah.
Speaker 3:But I I Novel don't think we know for sure that they're not doing that. This seems to like, when I read this, I see it as a marketing stunt.
Speaker 1:But it's like like like like I so so I I would I would agree with you. If I could go to cladlabs.com and, like, see the actual product. But it's like, cladlabs.com is not even purchased. Like, they like, there's literally no
Speaker 2:information AI.
Speaker 1:Okay. Cloudlabs.
Speaker 3:But I but when you go to the site, it it is just, like, the brain rot
Speaker 1:Exactly. Like like, where is the real product? Like like, there is no real product here. And that's the and that's what Jordy's risk is is that is that they they they're entire they haven't built anything behind the scenes. It's all marketing.
Speaker 1:It's all stunt. And it's like, yeah, doing a stunt is maybe fine even if it's designed to enrage people. It it's like, I I I I don't know. May maybe you shouldn't do that. Maybe people are against even doing the stunt marketing.
Speaker 1:I think it's actually okay. I I think we went through this clearly. Like, there was there was a moment where, like, it was it was clearly was doing rage bait marketing, and there were people that were upset about that. But there were other people that were upset about this idea of, like, the product you're making is to help people cheat, and cheating is bad. It's like the product you're making is to help people gamble, and gambling is bad.
Speaker 1:And so if you are anti gambling, you are anti this product that they built, and they and they now they have the opportunity to say, no. No. No. Like, the here's the real thing, and they haven't done that yet. And there's no, like, oh, click seven layers deep in the menu, and you can see that it's like, oh, this was a stunt for this other thing.
Speaker 1:Like, they haven't actually put out any breadcrumbs of, like, what they're actually building. And so I I think that's why it leaves such a bad taste. I'm the gonna give benefit
Speaker 2:And I'm gonna give them the benefit of of the the doubt that I'm I'm sure they're I'm sure they're smart, and I'm sure they have a have a have a deeper, broader vision. And I think solve you know, the the reality is is, like, having these moments between prompts, like, is a sort of is a sort of an unsolved problem.
Speaker 1:100%. 100%. And so, yeah. It they it feels like it feels like they they risk sort of going the Cluely route, which is overoptimizing for rage bait product development even. And and then they have to, like, figure out what the final product is where it's like, okay.
Speaker 1:I think it's okay to spend to spend, you know, a day in YC thinking about, like, what's our marketing strategy? That that video did not look expensive to film. Yeah. What feels what feels expensive is, like, it seems like they actually built the full product. Like, it feels like they built the full BrainRoute product.
Speaker 2:Yeah.
Speaker 1:And it's like, you didn't need to do that. You could have just gone viral for the video and then followed up and been like yeah. It would have been so easy if at that end of that video been like be like like, that's what people feel like Gen Z entrepreneurs built.
Speaker 8:Yeah.
Speaker 1:But we didn't wanna do that, so we actually built this,
Speaker 2:go down the road right now. Video.
Speaker 3:But I'm not gonna I I wanna try the I don't wanna gamble, but I wanna see it actually, like, in the ID. That that's, like, funny. But if they at the end, they say, oh, it's all a joke. It's like, okay. It's another ID.
Speaker 3:I don't need another one. But I wanna
Speaker 1:What do you
Speaker 3:I wanna try it.
Speaker 1:You you can just do window management. Like, what are we actually talking about here? Just put TikTok on the on the left side of your screen. I have two windows open right now. This is a Mac native feature.
Speaker 2:Well, let's pull up this video from Sharav Aurora who's going viral this, yesterday.
Speaker 1:Okay.
Speaker 2:He said tips to apply at YC batch winter twenty twenty six. And I think I think Sharav is an is an Is this literal is a literal child. It seems to be under, under I don't know. It's under 10 years old, something like that.
Speaker 1:He looks very young. Yes.
Speaker 2:He looks very young. And the re the reason that I
Speaker 1:think is cognition. Here's a bit of Devin, the AI software engineer. Crush your backlog with your personal AI engineering team. You wanna play this video?
Speaker 9:Dips are fine.
Speaker 1:What'd have?
Speaker 9:First tip, you should have some clear goals in mind. Like, what you should do after funding, and you should have at least
Speaker 2:I can barely hear this, but Okay. We can pause it.
Speaker 3:But the reason the
Speaker 2:reason I included this is because I think there's a lot of people like Sharav and tons of young people that look to YC as like like whatever YC is promoting Yes. They approve.
Speaker 1:Yes. Yes. Yes.
Speaker 2:Give a lot of advice.
Speaker 1:Yes. Yes. Yes.
Speaker 2:If if they're sharing something on their social account, it means it has weight. It means it's a valid strategy. Yeah. And so I just I wanna avoid a scenario where the Sharavs of the world think that they need to raid put rage bait in order to, like, break out in this industry. Yeah.
Speaker 2:Right? Because it's just that that's not it's not the reality. You can just build a great product. You can get let that speak for itself. You can find ways to market it along the way.
Speaker 1:Yeah. I mean, I feel like I feel like that's part of the reason why Gary Tain was tapped as the as the president. Like, he he I I don't know all the complex behind the scenes stuff, but he was putting out content on his YouTube channel and certainly carrying the torch of YC Forward where he was definitely speaking to the next generation of entrepreneurs in an extremely positive way, telling all these fascinating stories about his entrepreneurial career, his values. I mean, he hosts meetups at churches and and has really focused on building a extremely positive community. And there is a question about the y c x account.
Speaker 1:Is it a is it a a portfolio list? Is it every company that launches? Or is it or is it a a library that they're building for startup advice? And they stand by everything that happens there. There's there's two different things that you can use the account for.
Speaker 1:Right now, it feels like it's a little bit of like, hey. Like, you know, if it gets views, we're gonna put it up there. If it's fun, if somebody's doing something fun. But you don't always have the same you don't have the same, like like, the context really matters. Like, I think that video goes more viral because it's on the YC brand account as opposed to, oh, some people got into YC.
Speaker 1:They pivoted. They came up with this funny video. Like, they're just having fun. Like, they're kind of like, after YC, there's a whole there's a whole era where you go through YC, you hit demo day, and then and then, a few months later, like, there's companies that still have a little bit of cash, but they're not really building the same thing. And they're and it's not like I would not hold the y c found the y c partners responsible for what y c companies do post pivot, post demo day where, yeah, the company is still a y c company.
Speaker 1:You know, you do have there there is sort of a code of conduct in YC, and they can kind of kick you out a little bit. But legally, like, there is a contract where once they invest, you can't just take the money back because they think you're doing something immoral. Like Yeah. Unless it's, like, fraud. If it's legal, like, can't just ask for the money back.
Speaker 1:So
Speaker 2:Teddy Blank Yeah. Says sharing a video of Albie, who is a 14 year old applying for YC, went extremely viral earlier this week, got 3,600,000 views. Wow. 14 year old founder. Yeah.
Speaker 2:Let's play it.
Speaker 10:I'm Albie. I'm 14, and I'm based in Sydney, Australia. I've been building
Speaker 1:things since
Speaker 10:I was six or seven.
Speaker 2:Bruh.
Speaker 10:Don't get the joke.
Speaker 1:Really good editing. Well,
Speaker 9:I've been building
Speaker 10:things ever since I was nine. First writing code at code camps, then building Roblox games, and even launching a soccer gear brand when I was 12.
Speaker 1:We do. Now I'm building a physical.com
Speaker 10:platform where teens learn the real world skills that school forgot. Like, engineering, coding, AI, content creation, etcetera. Instead of boring textbooks, you level up, earn XP, and unlock challenges as you go. All while learning from top founders, creators, innovators, and other young people doing amazing things. I started Finkel because school wasn't teaching me or
Speaker 1:my friends
Speaker 10:how to actually build, create, or
Speaker 7:launch something.
Speaker 2:Says my default reply to high schoolers hitting me up for VC funding is put me on the phone with your parents.
Speaker 10:I'm Albie. I'm 14.
Speaker 1:This is awesome. I love this. I hope he gets in. I I I should recommend this guy.
Speaker 2:This seems to interesting. YC, Albie, we'll hire you.
Speaker 1:Yeah. Head head over to Los Angeles. Head over to Hollywood. Yeah.
Speaker 2:I don't I don't This
Speaker 1:is it's interesting because it's it's sort of a sort of a you're, like, you're not really supposed to do this when you apply to YC. Like, the application video is not like, they definitely don't want a game of, like, a Red Queen's race where it's about the video production. Yeah. But at the same time, like, you gotta play the game on the field. Like, you're supposed to just turn on the webcam and basically just talk for one minute.
Speaker 1:That's how you apply to YC.
Speaker 2:One shot it.
Speaker 1:Yeah. You're supposed to just one shot at no editing because they don't want it to turn into, oh, to apply to YC, you spend two weeks doing an edited video. They're like, no. Work on your product, and then the marketing is like the last little cherry on top. Like, that's always been the YC mantra.
Speaker 1:And that's a little bit of like this Cloud Labs thing. Although the weird thing is, like, the video, I love the video. It's funny, and it's cheap, and it's clearly just, a bit. And they did it, and it was two seconds, but then it feels like like they
Speaker 2:didn't products.
Speaker 1:They didn't they didn't give me the payoff of, like, oh, okay. You guys are funny, and you're working on something cool and interesting and hard and different. And so I I just feel like I didn't I didn't get the payoff of the joke. Like, the beauty of those Google April Fool's Day was that that was the era when they were on such a tear. You would go and you would go to a Google April Fool's joke, and then you would land on their product blog, and you would be like, oh, wow.
Speaker 1:Like, they did some crazy update to Google Maps, and now you can see your house from the street because they just invented street view. Like, this is incredible. They were delivering on so many different levels that they earned the right to make the every fool the April fool's joke. They earned the right to joke around because they were also had a massive monopoly in
Speaker 3:Yep.
Speaker 1:In, in search engines. And and so they were they were printing money, so no one was like, oh, this is so unreasonable that they took a couple hours out of their developers' time to go build some funny gag. Anyway, bigma.com. Build think bigger, build faster. Bigma helps design and development teams build great products together.
Speaker 1:Get started for free.
Speaker 2:Sheila says, met a very successful founder who said
Speaker 1:Oh, I read
Speaker 2:this chose fund. I read this. Credibility when this. What?
Speaker 1:I read this one. We we we we covered this. Sorry.
Speaker 2:Oh, sorry.
Speaker 1:Yeah. We jumped ahead. Earlier. I was Yeah. This was my point about about Yep.
Speaker 1:If you if you even if you put 99% of your AUM into boring b to b SaaS or even curing cancer, if you do one deal that's gonna get a little crazy and go viral, like, that's gonna have a big impact on the fund overall. Should we go to more drama in the venture world? Ev Randall, who's coming on the show on Friday, went on Harry Stebbings show 20 VC and and is is is putting the timeline in turmoil over, some comments about other funds. I'd love to play this, this clip from the actual, interview. It's in a minute
Speaker 11:and thirty two
Speaker 1:seconds.
Speaker 11:Ravi or Hamant or even Ben and Mark at this point, I don't think that they can go to LPs, one of those legs of the stool, and say, hey. This this basket of funds that we're making you invest pari passu across, we're gonna get you five x net on that. I don't think they can say that grow they at least can't say that with a straight face. And if you look at the recent return data, I think it suggests that. So I think they'll be able to make an immense amount of money on an absolute basis, but I think a lot of these LPs are in the business to make or in venture to make high money on money returns.
Speaker 11:Like, had PE for the low return stuff, and they probably get better liquidity from PE. They're here for the high money on money returns. And this is one of the reasons why I'm extremely excited about Benchmark's competitive position in today's market because we can go to LPs. We can say, hey. We're shooting for higher five than five x net.
Speaker 11:Have We the historical track record to back it up, and we have the fund sizes to back it up as well. I mean, you had Miles from Carnegie Mellon come on here and do the awesome math and the very clear math of, hey. Do you know how hard it is to return four x net on $8,000,000,000, $10,000,000,000? It is immensely hard, and it's it it, like, defies the laws of physics. So I think there's a difference between, are they going to make a ton of money, and are they gonna produce the returns that LPs really want this asset class to produce?
Speaker 11:Two very, very different things. But for now, the, like, the the rubber is like, the rubber won't meet the road because as you mentioned, there's just so much global demand from LPs for exposure to private technology, and they are happy to take lower returns. And so I don't think there's any end in sight. But I think on a relative basis between all of these different constituents and all these different GPs, there's a huge, huge delta and a huge differentiation between who can actually produce venture like returns.
Speaker 1:Boo. He's not AGI pilled. Boo. 10 x. You're you're gonna 10 x the fund.
Speaker 1:Just 10 x it again. Just 10 x it again.
Speaker 2:10 x again.
Speaker 1:The fund. Raise it
Speaker 2:to All within
Speaker 1:a $100. Fund and 10 x it. Just 10 x it, and we're gonna 10 x it again. No.
Speaker 2:Obviously That was on a little bit of damage control
Speaker 1:this morning. Control. Wait. Wait. I so I wanna hear what what what exactly did he say the first line?
Speaker 1:He says, they cannot go to LPs and say with a straight face that they can do five x net. Can we play the actual clip? Because I feel like that's not quite right. What do
Speaker 4:you say?
Speaker 11:I don't think Rabbi or Hemant or even Ben and Mark at this point, I don't think that they can go to LPs, one of those legs of the stool. And say, hey, this this basket of funds that we're making you invest pari passu across Good. We're gonna get you five x net on that.
Speaker 1:We're gonna get you Yeah. Five x Because maybe they can go with a straight face and say, we're gonna get you six x net. Boom. We're gonna get you 10 x net. Maybe I can say that with a straight face.
Speaker 2:Taylor knows. Nancy Pelosi is not afraid to say, I'm gonna 10 x it. I'm gonna 10 x it again.
Speaker 1:I'll turn x over yes. Ev is fighting for his life a little bit. Tagging big shots, quick edits, clickbait callouts, giving me pick me vibes. People are not happy about the the this clip hitting the timeline. People are are are taking shots back and forth.
Speaker 1:What what actually happened here?
Speaker 2:Part part of the the reality is I don't think no fund manager can really go to LPs and and you can you can share that you you believe there's a chance we'll get a five x net. But isn't it like
Speaker 1:Yeah.
Speaker 2:99% of funds just don't come anywhere close to that?
Speaker 1:Yeah. That's, yeah, that's for sure true. Also, I mean, I think the point I think the broader point that he's making is something along the lines of, like like, I I saw some other post about, like, there will be fortunes made just by getting, getting retail investors and the broader capital that's out there in the world into the private Mag seven. So the OpenAI's, the Anthropix, the SpaceX's, the Andrew rules. There's a whole host of companies.
Speaker 3:That was also an Ev Randall tweet.
Speaker 1:Oh, that that was him from was that him recently?
Speaker 7:Or
Speaker 3:Yeah. That was, I think, yesterday.
Speaker 1:Okay. Yeah. So so, like, there is a world where where you set up a fund that has lower return expectations, but also lower risk, and it's a great deal, and LPs love it. And so I don't know don't know that it's that hot of a take, but, it certainly certainly put the timeline in turmoil. Christian Garrett here is sharing the GIF of of digging himself deeper into the hole, I imagine.
Speaker 1:So what
Speaker 2:did that affection? Part of it is that Benchmark's feeling feeling pretty good right now. If you look at their 2020 fund, they have Oh, have. Four. They have Yeah.
Speaker 2:Fireworks. What's the other one? They have they have a number that are that have that have they have a bunch of, like, multi 10 baggers
Speaker 1:Yeah.
Speaker 2:At this point in that fund. They're So feeling pretty good about going to LPs and saying, look. We still got it. Yeah. Still cooking.
Speaker 1:Yeah. And, and, yeah, I mean, it it ever, ever in Benchmark, newly at Benchmark. Benchmark has not become the the platform fund, mega scale fund, has not, 10 x the l the LP base, certainly. Ev says, to be clear, I slash we love working with our friends at all of these funds, and this part was not meant as a slight slash commentary on the on their quality as investors, just POV on fund strategies and the unique value prop of benchmark. I think it's I think it's a fair fair tweet, but it's it's amazing because everyone is coming out and just trash.
Speaker 1:Spencer Peterson in the in the comments there was like, I took that personally. I run a big fund. I'm at co two. We got 60,000,000,000. What are you saying about me, buddy?
Speaker 1:You don't think I can put up a five x? Watch me. Watch me. I take that personally. I'm gonna put up a five x.
Speaker 1:I'll call you when I have when I have 500,000,000,000 under management.
Speaker 2:I think part of what made it feel super personal is that Harry tagged Robbie Robbie
Speaker 1:Totally. Totally. Totally. And Ben. Yeah.
Speaker 1:We we we act we actively try to avoid, like, tagging people if someone is talking trash about someone else or, like, subtweeting them. We don't really try and, like, handhold into drama. But it is an art, and it is delicate. Like, so, like, sometimes it's like, oh, wow. Like, they're really talking trash about that person.
Speaker 1:Sometimes sometimes it's fun. Like, sometimes we've done this where I mean, we've done this with Ev. Right? We've we've had Delian on the show. He's called out Ev, and we've tagged Ev in a clip.
Speaker 1:And then but it's all been fun. We've all been, you know, chatting about it behind the scenes and then obviously had them all on the show to duke it out and stuff, and that was a lot of fun.
Speaker 2:This felt personal.
Speaker 1:This I don't know. It doesn't feel that big of a deal. But let let let's go to Scott Kapoor, obviously speaking for, his his, his former colleagues at Andreessen Horowitz. Now he is, the director of the office of personnel management. Scott Kapoor says, since my former colleagues at a sixteen z are RIAs and thus cannot legally comment on what they can slash cannot say with a straight face to LPs, this sounds a lot like what, crappy board members say.
Speaker 1:They think they understand your business in-depth and make inane comments about what you should slash should not do when as an outside observer, they have zero clue what actually happens day to day in the business. Buyer beware. What what? I I I'm so confused by this. Okay.
Speaker 1:So so he's saying that Ev thinks he understands Andreessen's business, but in fact, he does not understand Andreessen's business. So but I wanna know, like, what is the misunderstanding? Because the the the the the steel man, the bull case on the injuries and strategy is that, Ev is Ev is making the claim that they will make more money dollars total dollars because they're they're investing out of a bigger fund size. They don't need to go and say, we're gonna five x it. So it's a different pool of LPs.
Speaker 2:Also, part of part of, like, the major appeal of investing in a 16 z is that you pretty much know that you're gonna get in every important company through just one single check.
Speaker 1:Okay. So, yeah, maybe that's something that I didn't didn't articulate fully. I don't know. I don't know.
Speaker 2:That's that's my that's my point of view. Yeah. I'm not an LP, but Mhmm. I I happily would be. And it's because you know you're gonna get some exposure to pretty much every important company, not necessarily always super early.
Speaker 2:But at some point in the company's life cycle, it's very likely that they will take a meaningful check from a 16 z.
Speaker 1:Yeah. Yeah. Yeah. I I wonder how the the the RIA dynamic is playing out at at Benchmark. It's it it seems like such an advantage in the vibe wars to not to be able to speak freely if if if Andreessen can't defend themselves because of RIA rules, and Ev can just go on podcast and talk trash.
Speaker 1:Like, you gotta win by default. Like, you gotta get out there, guys. You gotta convert. You gotta you gotta d deconvert from the RIA. I don't know.
Speaker 1:You gotta get on the timeline. Fight it out. What does Evan say? He says, I think smaller constrained funds can produce higher returns in venture. Quote, this must be a shitty board member.
Speaker 1:Don't work with him. Incredible non sequitur. Thanks, Scott. Chad Beyer says, well, I actually agree with Scott in general. My lived experience is most board members are useless.
Speaker 1:I've been on a board with Evan. He was consistently the most prepared slash founder raved about his contributions. And Alex Klein is saying, love you both because they're beefing. Interesting. Yeah.
Speaker 1:Smaller funds can produce smaller constraints constrained funds can produce higher returns in venture. That seems to be, like, like, a reasonable take, but I don't know what they're actually saying to LPs. Where is, wasn't Emil Michael going chiming in as well? What did Emil have to say?
Speaker 5:That was
Speaker 2:I tried to pull that up, but underlying post got deleted.
Speaker 1:Oh, it got deleted? Okay. Well, we'll we'll move on from it. We'll tell you about Vanta. Automate compliance, manage risk, improve trust with Vanta.
Speaker 1:Vanta helps get get get you compliant fast. We don't stop there. AI automation powers everything.
Speaker 2:Meanwhile, over on X, people are saying, calling me unk. They're saying I'm a boomer
Speaker 1:Oh, yeah?
Speaker 2:For my for my post, which I think is fair. But again, there's more nuance. I don't I I I like there's a lot of it that I think is cool.
Speaker 1:Should we have the founder on
Speaker 2:the The founder? The oop open invite to the founder.
Speaker 1:Okay. Open invite to the founder, of, of the BrainRot IDE Clad Labs. I I am I am actually very interested to hear, what is what the actual product is. I I feel like the the narrative around around these, these, like, you know, rage baity stunts is always is always like, oh, don't play into it. Don't play into it.
Speaker 1:I'm happy to play into it. We played into it with Cluelly. We had we had Roy Lee on the show three times. And and what I said the first time was what I continue to say, which is that, like, hey
Speaker 2:And part
Speaker 8:of part of my thesis
Speaker 1:build a real product.
Speaker 2:Part of my thesis is that Roy, like, effectively ran this strategy as aggressively as you could.
Speaker 4:Yeah.
Speaker 2:Like, he he posed there was a picture of him with a stripper.
Speaker 1:Yeah. That was very rage baby.
Speaker 2:And that was, like, the peak. Then I think he's walked it back, and he's adapted his strategy. And now he's
Speaker 1:And so and so our take was, it was, like, he's gonna have to build some good good software at a certain point, good product. And we tried the product, and Tyler churned, and, like, it just wasn't adding a ton of value. It wasn't moving. Yeah. But now they're
Speaker 2:they're iterating open it up? Iterating on the product.
Speaker 1:And now they're iterating on the product. And so now I would imagine during the Clearly heyday, I would imagine that 80% of the team's hours were spent on marketing and 20% were spent on on product, maybe. Now I think it's flipped. And I think that's very bullish. I think that's good.
Speaker 1:But, Tyler, you had a rebuttal?
Speaker 3:Yeah. I mean, I I would just say, like, this seems very different from like, you see the the the gambling on your credit card statements or whatever, like, from other accelerators. Like, this feels very different. Like, this is, like, the marketing like, I I I think people kind of tend to group all of this stuff together where it's, like, what Gruen Gagne was talking about yesterday where it's, some of these are like immoral companies that you could say.
Speaker 1:Sure.
Speaker 3:I think this feels different than that. It feels much at least to me, it feels much more of a marketing stunt than
Speaker 1:like Okay.
Speaker 3:This is the product we want people to be gambling while writing code.
Speaker 1:Yes. But but but what if what if the whole if the whole product is and this is all we've this is all we've seen, is a, you know, a Versus Code fork with minimal autocomplete. It they're always, you know, a year or two or five behind Cursor and Windsurf. And, yes, it has the ability to add Tinder and stake and sports betting in it. And, like, that the product that they are telling us they're building is what they're building, and they stay with it for five years.
Speaker 1:Like, what do you say then?
Speaker 3:Yeah. Then that's not good. So
Speaker 1:so, basically, you're you're you're just saying you're open to a pivot.
Speaker 3:It's it's not even a pivot. I like, it seems to me like the company is everything to at least in my opinion, points to this being a marketing stunt. The company is named Clad Labs.
Speaker 1:It's Yes. Clad Labs.
Speaker 3:Yes. Yes. The marketing stunts, it tells me that there actually is something different underneath than just
Speaker 1:Okay.
Speaker 3:Adding
Speaker 1:Yeah. No. No. I I I am super optimistic about it. I would love to see like, I don't know, by the end of the month, we know what is actually going on here.
Speaker 1:Certainly, by demo day when's demo day? December 3, I believe. December 3, we should we should we should know what's actually going on, with the company. What's the real product? So they did their stunt.
Speaker 1:They got a bunch of people, hopefully, to sign up, check out the website. You got your early user base. Typically, in YC, you just ask your other your other, YC batchmates to try it. Maybe you need to go broad, go viral. You did that.
Speaker 1:Now build the draw the rest of the owl, basically, is the is the prompt.
Speaker 2:Well, let's
Speaker 1:Or at least or at least or at least say what you're planning
Speaker 2:to do.
Speaker 1:Say what you're planning to do.
Speaker 2:Any Let's on to Dwarkesh? Dwarkesh.
Speaker 1:Dwarkesh. I haven't watched the full thing, but a massive, interview has hit the timeline. Dwarkash Patel, Dylan Patel sat down with Sachin Adela, and they got an exclusive tour of Fairwater to the most the most powerful AI data center in the world. Feel like everyone's been saying they have the most powerful AI data center. It appears that, open, that Microsoft has leapfrogged, Colossus two.
Speaker 3:Well, I I think, maybe this is wrong, but I I think Colossus 2 will be bigger. It's just currently, it's not big. Like, this is the current
Speaker 1:Current biggest. It's the
Speaker 3:current biggest.
Speaker 1:Okay. Okay.
Speaker 3:Okay. Great.
Speaker 1:So so you had a you had a chance to actually sit down and watch this whole interview before we started the show. Yeah. Can you give me some takeaways? Where should people are there any time stamps that we should pull up? Are there any takeaways that people should know before they go and watch it?
Speaker 3:Yeah. I wrote a bunch of notes. Yep. So maybe some of these aren't at some strength.
Speaker 1:Before you take us through those notes, let me tell you about graphite dot dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. GitHub, of course, is a Microsoft product.
Speaker 3:Yes. Okay. So so I think broadly, I would say it was pretty enlightening. I I usually think of Satya as being very non AGI filled. Mhmm.
Speaker 3:And I think this was a bit of an update. Mhmm. So there's there's a bunch of reasons for this. Think so so early on he, like, in the very I think this was one of the first questions. He's like, what is AI?
Speaker 3:AI is basically two things. This is Satya saying this. There's cognitive, like, enhancement.
Speaker 1:Mhmm.
Speaker 3:So this is, like, your, like, tools or this is your auto complete. This is your Copilot? Yeah. Copilot, stuff like And then there's, like, the guardian angel. And this is, like, the the very AGI pill where the I mean, it's, like, kind of lording over everything.
Speaker 3:And the and so he he actually does, like, say these two things are, like, very possible. Mhmm. So and then we kind of move on. He says
Speaker 1:Copilot and actual pilot.
Speaker 3:Yeah. So so the next thing, he's talking about kind of how he thinks about pricing structures of AI broadly. So there's this this kind of conflict between subscription models and usage model of of pricing. And he says, I think he's broadly more kind of focused on, at least in the in the short term, on the subscription kind of thing. Right?
Speaker 3:Which like it it's he he makes a big emphasis on this. Right? Because you need to be very specific on how you price these things Mhmm. Because doing an actual, like, serving of the models is so expensive. Mhmm.
Speaker 3:Okay. So then throughout the interview, he he he keeps emphasizing the point that, like, Microsoft is a hyperscaler. And so that means, like, a bunch of things. That means that they're gonna keep supporting multiple models. Mhmm.
Speaker 3:It means that they are going to, like, that they want to prioritize prioritize the kind of long tail of, like, high margin users. So you can, like, you can kind of compare that to Oracle who you can think of Oracle as basically
Speaker 2:Prioritizing one potentially low margin
Speaker 3:Yeah. Exactly. Power. You're you're giving bare metal essentially to one customer Mhmm. OpenAI.
Speaker 3:Yeah. And you're betting the whole company. And he says, like, if you're gonna do that, you should just vertically in integrate that company, like, you're part of that company. Mhmm. That that's what Satya says, like, in response to, like, why is Oracle basically eating your entire business?
Speaker 1:Sure.
Speaker 3:Like, in the past, like, five years, Microsoft was super ramping up their their CapEx, their build, and then they just basically stopped and let Google, Oracle, Amazon basically build that up. So that's kind of the main reason. There's a bunch of other stuff he he's talking about they're asking about chips. So all the big hyperscalers have their own chip play. Right?
Speaker 3:There's training, there's TPUs. OpenAI is doing their own chip. And Microsoft does have their own chip, but it just kind of it's like the actual production is like way behind everyone else. Yeah. It's like, okay, why is this chip so bad or or or why are there why are there so few of them?
Speaker 7:Mhmm.
Speaker 3:And then Satya basically brings up that like Microsoft has IP to everything OpenAI has except for consumer hardware.
Speaker 1:Mhmm. So Chips are not consumer hardware. They're Chips are proprietary. Right?
Speaker 3:So he's like, well, okay. How do we get the best chips? The the best, like, you know, model specific chips? We'll just take OpenAI, and we'll just, like, bill on top of that.
Speaker 1:I wonder how much that actually transfers, though. Because where does the chip development live? Where does the IP live? Like, if if OpenAI
Speaker 2:is and they can get line time at TSMC, then they can just produce it and sell it to any customer they want.
Speaker 1:Yes. But what if they do it within within NVIDIA or something? Like, what if they go to NVIDIA and they're like, hey. For the next run of NVIDIA chips, we'd like you to consider this architecture. Do
Speaker 2:they need why would why would they need to do that?
Speaker 1:Because they want their models to be more performant on the chips. And so they go to Jensen and say, hey. We're we're the biggest we're one of the biggest buyers, so make the next version extremely performant for our chips. And I think they're already doing this. They're codeveloping chips with NVIDIA.
Speaker 1:They're codeveloping chips with other companies. And if they codevelop with Broadcom or they codevelop with AMD or maybe even Intel in the future and but that IP lives with Intel, then no. Microsoft doesn't just get it. Right?
Speaker 3:Yeah.
Speaker 1:So there so it's like only in the event that I I mean, both of these are gonna happen. Like, there's gonna be internal efforts and there's gonna be external efforts. But it is it is a funny reminder that the internal that the internal efforts get get copy pasted over to Microsoft. What do you
Speaker 2:guys One other note, Satya signaled that he's open to buying capacity from Neo Clouds Mhmm. Like Oracle, Nebius, Lambda, Iron, and Scale.
Speaker 1:Is the only doing that?
Speaker 2:To fill the yeah. He is. But but he he Semi Analysis has a concept called, like, the pause, which is, like, basically a gap of, like, this, like, insane period of demand that Oh, right.
Speaker 1:Trying to
Speaker 2:meet that demand.
Speaker 1:Yeah. Yeah.
Speaker 2:And Satya actually says specifically, you're right you're rightfully calling out the pause in the interview.
Speaker 1:Interesting. Right.
Speaker 3:Yeah. And Yeah. I think continuing on, like, why he basically stopped building out Yeah. The the, like, chip question is also, like, very important because you can think of it like, if you build a bunch of data centers right now, they need they have very specific, like, power requirements that are directly based on the chip. Like, if you're building based off the h 100 chip, that's different than if you're building a data center based off g b two hundreds.
Speaker 3:Mhmm. And it's like, they're you can't really it's not like fungible. Like, you can't just trade one out for another. So that that's another one of the reasons why you don't wanna basically have insane build out right now because you think well, you don't think you know that chips are gonna get much better.
Speaker 1:Sure. Especially with like ASICs. Right?
Speaker 3:Yeah. Exactly. And NVIDIA is like constantly they're saying, we got this next chip coming out.
Speaker 1:Yep. Yep. Yep.
Speaker 3:You wanna build up your data center with those chips because otherwise, they're gonna depreciate and you're gonna have these basically data centers in, five years that, like, are using, you know, the old gen chips or or two generations back.
Speaker 2:Yeah. Anything on depreciation?
Speaker 3:CapEx Yeah. I mean, so yeah. Basically, he gives, like, two reasons how you can justify data centers. Right? Because you think of data center basically depreciating in, like, five years or the chips, which is a big part of the the cost.
Speaker 3:And so the there's basically two ways to, like, justify the actual build out. One of them is, basically, you can think of, like, research as just being, like, r and d spend. So you basically just have to, like you gotta do the research. Like, you need to do the spend, basically. Yeah.
Speaker 3:And the other is just, like, he he keeps bringing this up, is everything has to be like super demand driven. Mhmm. So that's also why he's not it's like, again, in comparison to Oracle, Oracle is basically you maybe you could say that they're kind of skating to where the puck is going or trying to figure that out and then doing a bunch of debt, etcetera. And then Microsoft, Satya is saying, no. Where is demand right now?
Speaker 3:How do we fulfill that demand? Yeah. Basically, exactly. If we're not fully built up, then we can, you know, lease from the, you know, Neo Clouds.
Speaker 1:Yeah. Makes sense. I'm I'm super excited to listen to this full episode. The Wall Street Journal also had an article about the the news as well. It seems like this is all in in line with Microsoft's just announcement that they have a super factory.
Speaker 1:I like it. We went from AI factories to AI super factories. We went from regular artificial intelligence to super intelligence. We're ramping up, but we're still, like, seven levels away from the final the final boss. Because after superintelligence, of course, you have giga intelligence, then ultra intelligence, then super duper intelligence, and and mega factories, exafactories, terra factories.
Speaker 1:There's all these different terms.
Speaker 3:Okay. So I will say one last thing I think Extraterrestrial was intelligence factories.
Speaker 1:Yeah. Very sure.
Speaker 3:Okay. One last thing. Dorakesh asked Satya, like, does he buy basically the revenue growth of, like, when OpenAI or Anthropix says they're gonna be, like, 70, a 100,000,000,000 in, like, three years? Mhmm. He's like, well, know, they have to justify their fundraise somehow.
Speaker 3:And then he basically doesn't say much else besides that.
Speaker 1:Wow. It's such a absolute I
Speaker 2:love him. He's the best. Cooking. He's killing it. He's amazing.
Speaker 2:Was asking about hair routines. I think have to comment And unfortunately, disappoint because I think we both ride the to apply the same approach, which is
Speaker 1:Sleep, diet, exercise, baby.
Speaker 2:Well, and no no hair products.
Speaker 1:No hair products.
Speaker 2:No hair products.
Speaker 1:Just water and
Speaker 2:Just water.
Speaker 1:Some sauna, some workout. Some just to keep the rest of your body healthy and I think the hair will be healthy as well. I I I actually think that's how it works. Right? No?
Speaker 2:Yeah. Yeah.
Speaker 1:Like I It's
Speaker 2:just it's just funny. We're never we're never gonna have a shampoo or a hair product sponsor because we don't really use either of them.
Speaker 1:No. But I like creatine and people say that that's bad for your hair but
Speaker 2:it's Creatine, the hair loss medication?
Speaker 1:The hair loss medication. People think it people think you'd lose your hair if you're on creatine but I certainly haven't experienced that. I have experienced that Julius helps with maintaining good hair because it's the AI data analyst that works for you. Connect your data
Speaker 2:Stop pulling your
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Speaker 1:Stop pulling your hair out and get on Julius. What are the other factors in here? Microsoft spent more than $34,000,000,000 on CapEx during its first fiscal quarter and said it would increase its total infrastructure investments over the next fiscal year. It is among several tech companies pouring a combined 400,000,000,000 into AI efforts this year with demand for AI computing and companies say saying they need ever more capacity. Very fun.
Speaker 1:You have a one.
Speaker 3:One last thing. Another thing that I was I was surprised to hear is that Satya's he made a big point of saying that, like, there is a super intelligence lab within Microsoft. They're gonna be training their own models.
Speaker 1:Yeah. Is that Mustafa Suleiman Yeah. Who's running it?
Speaker 3:Yeah. Yeah. And so he says, maybe they'll be completely trained by Microsoft. Maybe they'll just do, like, fine tuning Yep. And training on, like, GPT, OpenAI models.
Speaker 3:Yep. But, like, they are gonna, like, actually have they're gonna be training their own models. They're doing kind of the full stack.
Speaker 1:Yeah. When we were when we were about to go on stage with Satya, I was texting with Doug Laughlin from semi analysis, and and he was like, ask about MSL or or not MSL. MAI. MAI. MAI.
Speaker 1:Ask about MAI. Like, what's the strategy for MAI? And we and we asked a couple people, and we got a little bit it was it was sort of hard to, like, really pin down a clear strategy. I don't think that they were ready to really divulge exactly the full strategy. It'll be interesting to see what models they train.
Speaker 1:Like, do they just go bigger? They have the biggest factory. Could they just take this, this Fairwater facility and say, hey. Let's go let's go train something that's 10 times bigger than GPT 4.5. Do they believe that pretraining scaling laws hold or not?
Speaker 1:That's what I'm I'm curious about. Or are they gonna do something that's more precise? Like, will they do a pretrain for Excel? Will they do a pre train for Word or something like that? Is there some other tactic that they're going to employ?
Speaker 1:There's a bunch of interesting things. They're clearly very GPU rich, tons of sharp engineers, tons of interesting product surface area. Where will they actually go? Interesting times.
Speaker 3:Yeah. I mean, he he talks a lot about, like, application layer stuff. He he actually says, like, the wrapper model wrapper companies are basically debunked by models getting better. So I I think he thinks that Microsoft will basically take over a lot of that, like, application layer stuff. Right?
Speaker 3:He's he talked about Excel Agent a lot. Yeah. There's, like, the the PowerPoint stuff.
Speaker 2:I I so That's why I've always felt like the dynamic between OpenAI and Microsoft is so interesting because OpenAI just has massive ambitions in the enterprise. They wanna create, Sam, you know, alluded to a AI native Slack recently. Microsoft has Teams. Teams. Imagine those It's gonna be
Speaker 1:AI native.
Speaker 2:You can imagine, OpenAI having, like, word processing Yeah. Excel like product. You know, you can imagine them ultimately competing on, like, every single layer, including at the eventually at the cloud layer.
Speaker 1:What do you think the dynamic is between this, like you know, Microsoft always loves to say, like, hey. Yeah. We have all the IP. But it feels like they're not actually fast following. Like, they could.
Speaker 1:Like, OpenAI launched Atlas. Like, they could have launched, like, Edge Atlas. Microsoft could have launched, like, Edge Atlas, like, the next day. And that would have been like, woah. What are we doing here?
Speaker 1:Like, that's a shot. They could have launched Sora two. They could put Sora two in Excel. How about that?
Speaker 2:The train rod
Speaker 3:Brain Excel.
Speaker 1:Brain rod Excel. You know, they could have done that. They didn't. And so there's clearly like, even though they have access to all the IP, they still have, they still have a differ differentiated view on, like, how the products get built. They're not just saying, yo.
Speaker 1:Yes. One copy of Atlas, please. One copy of Sora two, please. We'll just launch our own competitor app. They could have put it in LinkedIn.
Speaker 1:Like, they could have they could have there there is a way to integrate that. Microsoft's clearly, like, not moving so fast on that front. They're they're being a little bit more methodical.
Speaker 3:Yeah. I think this is why I'm I'm very excited to see what what comes out of MAI. Yes. Because it seems like they have a lot of good people. Yeah.
Speaker 3:Like, they've been doing a bunch of, like, talent acquisition stuff. Yes. So I'm I'm curious if they're gonna start, like like, right now, it just seems Microsoft is still very slow. They're kind of reactive. Mhmm.
Speaker 3:And they're like, okay. We should add, you know, another AI helper to Excel or something. But it's not, like, really kind of built in, like, low level yet.
Speaker 1:Yeah. I'd like to have Mustafa on. I'd like to talk to him about where their training models, where they're not. That seems like an interesting conversation. I'd like to ask him some hard questions.
Speaker 1:There's been a debate on the timeline. John, how hard of questions
Speaker 2:we has every single feature that Atlas has. Woah. In co pilot mode. It's better than Atlas or Comet actually.
Speaker 1:Interesting. Maybe they don't need a copy then. They're good. But there has been a debate over over how hard of questions we ask. Is it hard is it a hard question to ask Mustafa at at MAI, you know, what type of model he's training, or should we ask some sort of other hard question?
Speaker 1:I wanted to practice some hard questions. I think we should start asking harder questions. I have some hard questions here for you, and I think if we practice, we'll we'll we'll become better interviews. Are are you guys ready for these?
Speaker 2:We just start hitting guess with, like, insane
Speaker 1:I I math. I wouldn't call them insane. I I do have one here for for Tyler. Is every even number greater than two the sum of two primes? Answer the question.
Speaker 1:He's looking around for blue. It's a simple yes or no question.
Speaker 3:Every even number
Speaker 1:Is every even two number greater the sum of two primes? Answer the question. Stop dodging the question. Just answer the question. It's a yes or no question.
Speaker 1:Is every even number greater than two the sum of two primes? It's an unanswerable question, of course. It is the Goldbach equation or the Goldbach conjecture. There's also can there exist an algorithm that decides whether any computer program will halt or run forever? It's the halting problem.
Speaker 3:It's Yeah. That's the question.
Speaker 1:What about what will OpenAI's valuation be in 2035?
Speaker 3:100,000,000,000,000.
Speaker 1:100,000,000,000,000. Oh, he answered that quickly. We'll come back to that in ten years. See if that was a hard question. What's the nicest thing ever done by Adolf Hitler?
Speaker 1:Answer the question. Stop dodging the question.
Speaker 2:Tyler Ask that to carp.
Speaker 1:He Does your Carp
Speaker 2:was carp was on a roll yesterday. Yeah. Some of those those clips were
Speaker 1:Here here's a question we should ask, a lot of founders that come on here. Does your dad know you're bankrupt? I think if we hit them with that, he will be like, that's a hard question. That's a hard question. Here's one for, for for Tyler.
Speaker 1:Prove God exists.
Speaker 3:There was the the Godel
Speaker 1:What what is truth? That's a hard question. Have you ever done illegal drugs, Tyler? Answer the question. No.
Speaker 1:Answer the question.
Speaker 2:Good answer.
Speaker 1:Who's your favorite host? Me or Jordy? Answer the question. Answer the question.
Speaker 3:I'm my favorite host.
Speaker 1:Woah. Taking shots. What is time? I like these hard questions.
Speaker 2:Okay. Jordan Jordan at at Semi Analysis is down to hop on and correct a few Okay. Few things we said on
Speaker 1:Okay.
Speaker 2:On the articles. Awesome. I'm gonna drop him the he was listening. He was listening. He said, Al Al in the chat.
Speaker 1:Where where where is he? Let's bring him on.
Speaker 2:I'm I'm working on getting him the Okay. The Zoom link. Fantastic.
Speaker 1:Fantastic. In the meantime, let me tell you about Fall, the generative media platform for developers. The world's best generative image, video, and audio models all in one place, developing fine tuned models of serverless GPUs and on demand clusters. You can get started. Let's see.
Speaker 1:What else? Henry Kravis gave a talk, the founder of KKR. The post appears to have been deleted, but I won't say who it's from, but I will read it to you anyway. The world needs another fund like it needs a like a hole in the head. I think it was supposed to be off the record, and I think one of our friends was maybe live tweeting it against their request, or maybe he just cracked it and realized that he didn't wanna post that.
Speaker 1:But there are a lot of funds, I suppose. I I was doing a little deep dive on Blue Owl. I I wanna get to know Blue Owl more. It's a fascinating company. Merger.
Speaker 1:There's a SPAC involved. They have two co CEOs and three co presidents. The the the the top ranks at Blue Owl are absolutely stacked from what I read. They are, of course, powering the AI build out with, debt private credit. They are a private credit fund up there with Ares.
Speaker 1:They've done very well. They actually have three different businesses. Only one of them is doing AI data center build outs. And and even within the AI data center build out fund, they they they they fund other stuff. So it's interesting to see how how much risk they're taking, how much their business is really dependent on the AI build out.
Speaker 1:It's also, there was a, they got in a little they got in a little battle with, with Jamie Dimon because Jamie Dimon was saying that some of these bank failures are the fault of private credit. When you see one cockroach, there's usually more. He's kinda saying like, hey. Like, you know, we see these defaults. We see these we see these these large companies defaulting.
Speaker 1:Maybe this is the start of something bad. Maybe there's lot of other bad companies out there.
Speaker 2:Yeah. There was something with BlackRock had lent, I think, a $100,000,000 to a a business recently as of like two weeks ago. They had it they had it marked as, you know, fully sound. Yeah. And then the company almost immediately went bankrupt.
Speaker 2:So concerning. We have Anyway. Jordan from semi
Speaker 1:Welcome to the show. Jump. How you doing? Hey, Jordan. Good to see you again.
Speaker 1:Welcome back.
Speaker 2:Alright. What did we what did we get wrong?
Speaker 1:What's going on?
Speaker 2:This is all, of course, Tyler's fault. He he was
Speaker 1:Break it down. Give us some notes. Yeah.
Speaker 5:No. I don't think you guys got anything wrong, but I think just wanted to promote that we we put out a companion article that comes out with the interview
Speaker 1:Oh, fantastic.
Speaker 5:Was in there. He was he's been called out by some other people on Twitter for hunting around in the background while they're interviewing the Azure teams.
Speaker 1:Wait. Dylan Patel, you mean? Yeah. Yeah. Oh, we we I we gotta go through frame by frame and find him.
Speaker 1:Like, oh, he's gonna go look. Because he's wait. If we actually break down what what does a Dylan Patel scoop look like when you're on-site and security turns their back? Is he, like, looking for, like, oh, they're instead of this NVIDIA switch, they're using AMDs. I've seen him call stuff out where it's like, wait a minute.
Speaker 1:This company is using a different company's technology. Is that what he's looking for?
Speaker 5:Yeah. I mean, I don't know if he was looking for the Credo cables or anything. Those those are obvious with the purple housing. But if you look at his last tweet, he just said, to be clear, while Scott was explaining the data center Mhmm. He was super intently focused on figuring out the fiber patch panel config.
Speaker 5:We know about some we know about some providers that have gone out and bought cables, like 20,000, 40,000 cables, and then they they mess up the config of the patch panel, and they end up five feet too short. And they just have to send them back and get all through cable,
Speaker 1:which is, like Oh.
Speaker 5:Not a negligible amount of money. These these cables are, like, at least a thousand bucks a piece. Yeah. They're really heavy. We've been talking about internally how many cables can you bench.
Speaker 1:Okay. Okay. There we go. There we go. Yeah.
Speaker 1:Dylan Patel seems like a bit of the fox who in Microsoft is the henhouse, and they really shouldn't have let, Dylan Patel into the into the new data center because you know he's gonna find some stuff. There's gonna be some scoops that, like I'm sure there's, a PR team at Microsoft that's like, okay. Like, here are the talking points. Like, we're gonna keep him here. He's not gonna look behind this curtain.
Speaker 1:Like, there's a bodybuilding over there. Like, don't go in the don't go in that closet. And and Dylan's, I'm sure, on the case probably, the they they you know, quickly becoming the greatest investigative journalist of our of our generation.
Speaker 2:What what like The big pop. Give us some more insight on, the depreciation comments.
Speaker 5:Yeah. Definitely. So there's a section of the article, that kinda goes through this. I think you guys asked me this on Monday. I didn't have a properly prepared answer because I actually didn't know what Michael Burry had been tweeting about and and kind of talking about with this.
Speaker 5:So maybe for background, Burry is claiming that the hyperscalers, like, including Meta, but also Azure Yeah. On Oracle, Google, are artificially boosting their earnings by extending the useful life of the IT assets.
Speaker 6:Mhmm.
Speaker 5:So you can see from 2020 when they would report their numbers, these IT assets like servers, switches, storage would be three to five years
Speaker 1:Yeah.
Speaker 5:On a life cycle, and they've now extended that to five, five and a half, or six all the way across the board. In some ways, I think this is a bit of a, you know, game of catch up. If one provider does that, everybody else has to follow suit.
Speaker 4:Sure.
Speaker 5:But we go into detail on the article about, like, what this actually means. And, you know, Burry's argument that this is understating the amount of or or it's boosting their earnings. It's understating the amount of of depreciation that's going on on these GPUs is really predicated on NVIDIA's comments that the product cycle is now two to three years long. Right?
Speaker 1:Sure. Sure.
Speaker 5:And I think that is is, like
Speaker 1:But that's on that's on the development of a new chip. Like, from my perspective, depreciation although there is the economic question about how much how much value can you get out of the tokens that you sell generated by an a 100 in five years? That's a good question, but that's not how we think about depreciation. Like, if you buy a mechanical arm to put a glass windshield on a car at a automotive factory, you're just wondering how long until that mechanical arm breaks. And and I'm sure there's been immense pressure on NVIDIA to let the chips not burn out in two years.
Speaker 1:Like, they they, you know, they probably have done a lot of work. It's a very expensive chip. It's a very expensive rack. Like, is it that crazy to assume that that the fiftieth percentile might be five years now?
Speaker 5:No. And there's basically no precedent to say that a chip would fail or wear out as you're describing it in two to three years. Yeah. Like, there's the o the hardware OEMs, they have contracts that are standard for three to five years, and they offer extended warranties for six and seven years.
Speaker 1:Mhmm.
Speaker 5:The big supercomputers in the world that run as a total system or even individual servers kind of get life cycled Mhmm. They run for five, six, seven, some of them up to ten years
Speaker 1:Mhmm.
Speaker 5:In in production. Right? Not to say the years that it takes to actually turn this thing on. And and these are the environments that use liquid cooling and some of the latest and greatest chips that are actually, you know, similar in comparison to the g b 300. And then even if you go to the providers directly and you try to rent a v 100 today, which was launched in 2017, right, seven, eight years ago, I can still rent v one hundreds in data centers from providers like Amazon.
Speaker 5:Mean, there's plenty of a one hundreds for sale right now. So there's there's nothing to me, you know, the the the proof of this argument would be predicated on NVIDIA releasing chips that so drastically outperform the current generation in two to three years that all hyperscalers everywhere are so incentivized to go through another CapEx cycle. They gotta buy all new chips and rip out all the existing ones, and we're still so power constrained that they have to do all that. And that seems like a much farther leap than saying, we might be able to run these chips for five or six years in the data centers themselves.
Speaker 1:I I wonder do you have a reaction so Ben Thompson's been writing about the AI build out and the bubble potentially, the benefits of a bubble. And one of his, like, bull cases for a bubble was basically that, in previous bubbles, you get a glut of, IT infrastructure or or even just, you know, steam engines or railroads. But his example was dark fiber. And the idea was if you overbuild, well, then you get a bunch of extra infrastructure that you can use, and it's cheap. And his his, like, counter to the AI build out was that, depreciated h one hundreds just aren't as valuable as fully depreciated, you know, fiber lines.
Speaker 1:But I just don't know if that's true. I feel like if there's a ton of depreciated h one hundreds out there in ten years from now, I think there's still something useful that you can do with that in the same way that you can push bits across fiber lines. It just it won't be superintelligence, but there will be a base load of, you know, generic knowledge retrieval or just, hey. People just wanna chat. And the fact that it's so cheap now because the assets are fully depreciated means that you can just have a chatbot in interface every single conversation in every app, and it'll just be so much it's sort of like a Jevons paradox thing.
Speaker 1:I'm not saying that the economics will stay the same. The margins will go way down, but there will be a benefit. It's not like these things just disappear after five years. They don't just break.
Speaker 5:Yeah. No. They they they don't just break. I think, there are some new your comparison makes sense, but there are some nuances compared to the fiber line, just to say that if new GPUs come along from other providers that are so much more performant than the current ones, then at some level, it doesn't make sense to keep the power turned on for the old one because the operating expense is too much. Like, we estimate this at 30¢ per kilowatt.
Speaker 5:So if the bottom of the h 100 price gets below 30¢ or somewhere close to it, you're probably better ripping them out and replacing them with something new even if, you know, for the car analogy, this is still a beater that somebody else could drive for the price of gas and insurance. Right?
Speaker 1:Yep. Yeah. Yeah. I I was talking to Jordy about it, and I was saying, like, there is a world where, to just put in really concrete terms that most business people might understand, just, you know, if your job is you know, you're you have a Diet Coke business, you deliver Diet Cokes, you have a you have a you have a gas car that delivers the Coca Cola, and you have the opportunity to switch to an electric vehicle, you you might do that because the low bringing down your total cost of ownership, your annual OpEx would be great, but sometimes companies just don't want to spend the CapEx to actually do that. And so I'm wondering if there's a world where the GPUs get traded down to a point where people are like, yeah.
Speaker 1:The OpEx is higher, but I still I'm still running it for this niche use case. Like, there are still mainframes that are running. There are still on premise cloud. There'd be there's there's companies that haven't fully moved to the cloud, and I'm just wondering how long, some of these, like, GPU racks might just be sitting around where someone gets it cheap, and they're just like, yeah. Like, that's the thing that filters every invoice that we get, and it just runs and it it runs like, it runs grok two on it or whatever, and it's fine.
Speaker 1:It's good enough.
Speaker 5:Yeah. Well, I mean, look. I I put in the article a link to Azure's announcement from September kind of pleading with their users to move workloads off of v 100 GPUs that are eight years old. So
Speaker 1:Please. It doesn't yeah.
Speaker 5:Please don't get upset at us when we turn off this instance and you, you know I I don't think they're doing payroll on these things, but, like, things gonna shut off. So Interesting. I I mean, I totally take your point. Working in IT for years, there's there's so many people that come along and when there's, like, some sort of last call for the sale of spare parts for these old GPUs and they wanna keep these systems running, they they suddenly show up and wanna order a bunch of them. Yeah.
Speaker 5:And it could be for all sorts of reasons, but, usually, it's just inertia of not wanting to move the old workloads onto the new stuff.
Speaker 1:We're also completely discounting the nostalgia market. I mean, people like air cooled Porsches. I imagine that that Dylan and you guys are gonna be like, yeah. I need a v 100 just, you know, sitting in the office. Like, I don't like this new technology, this new GV 100.
Speaker 5:We gotta you wanna talk nostalgia, we gotta go back to Kepler or pastel, you know,
Speaker 1:way before
Speaker 5:the guys. I don't know.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 2:Way before the. What what about on the what about on the chip side? What what was most notable about Satya's comments there?
Speaker 5:Yeah. I mean, I find it fascinating that Satya clarified they have access to all IP, including chips and including systems. So Yeah. This is on the models that everybody jumps to. I think OpenAI has a ton of IP that's going into their chip program that Azure could have take and sell as part of the cloud services if they wanna partner up with Broadcom and just produce a bunch of chips that are, you know, more similar to a TPU than they are to a GPU in the future.
Speaker 5:Yeah. They've got that optionality.
Speaker 1:I wonder if there's a way to puzzle around that, though. Like, when I was debating with Jordy, I was saying, like, well, you know, obviously, OpenAI has a team that works with NVIDIA and with Broadcom and with, you know, maybe Intel in the future, AMD now. Is there a world where the IP lives with the other companies for the next five years or something? It seems like maybe tricky, but I'm just wondering, like, how much of the IP actually lives within within OpenAI versus the their partners?
Speaker 5:Well, I I think it's, so Satya made the point in the podcast that in some cases, Microsoft seeded parts of the OpenAI chip program with IP from their Maya program.
Speaker 1:Oh, sure.
Speaker 5:So I think it's this whole mosaic of where the actual IP sits.
Speaker 1:Okay.
Speaker 5:But at the of the day, there's gonna be something that comes with OpenAI that they learn. And you can even go beyond the chips to the systems that the chips go into, to the network that connects the chips, or to the software, like the runtime and the, like, inference stack, which is to say how they run inference efficiently on these chips. There's a whole stack that gets built from the actual hardware through to the API that produces tokens to the user in the chatbot, and they have access to all of that that OpenAI would consider proprietary. So I maybe to the point you guys were making earlier comparing to Excel or to Microsoft's other strategies, it it seems like this is a case of OpenAI going really fast and executing really quickly and their moat being speed.
Speaker 1:Mhmm.
Speaker 5:And then you compare that to Microsoft who has an existing moat of distribution.
Speaker 1:Mhmm.
Speaker 5:So they've got 400 data centers in Azure, 70 regions Free
Speaker 2:cash flow free cash flow is also a bit of a moat too.
Speaker 5:Yeah. Definitely. They've got all the makings for, like, you know, who
Speaker 1:who do you who do
Speaker 5:you think wins the race to turning on public instances of an OpenAI chip that anybody can rent. Right? OpenAI or Microsoft Azure with a bit of a head start? Like, I I think they have some good optionality there with with OpenAI's program, with the relationship with NVIDIA, with Maya. But the point is that right now, they are losing the race on chips to NVIDIA, the CPU from Google
Speaker 1:Mhmm.
Speaker 5:Maybe AMD. They use some AMD GPUs right now. So they've gotta go and execute.
Speaker 1:Mhmm.
Speaker 5:Right?
Speaker 2:Whether or Satya do you think Satya expects Azure to compete with an OpenAI cloud in the next few years?
Speaker 5:I think if OpenAI really develops a cloud, absolutely. Because because Satya says in that article that they well, in in the interview that they don't wanna be beholden to one customer. Right? I think he says, like, we have five big deals with five customers, and that's, like, the bulk of Azure's compute right now. And and I would say it's really one deal with one customer.
Speaker 5:That is the bulk of the incremental revenue in Azure right now. So, like, I'm I mean, I go hands on testing this stuff, and I've talked to a 140 different companies about actually using Azure. And they were a a distant third compared to just AWS and Google from a hyperscaler perspective. And I I talked to Clem from Hugging Face this morning, and he shared some data with us that backs this up. Like, if you look at the downloads from Hugging Face of open source models, the downloads that originate from an Azure IP, there's more than five times less when compared to AW.
Speaker 1:Wow.
Speaker 5:Right? OpenAI can use it all with their private repos and stuff. But if you look at the the long tail of the market where the long tail represents everybody but OpenAI, basically, They're getting five times less of that business right now because they're so focused on OpenAI. So I think Satya wants to do more than just OpenAI. It's just a matter of actually going and doing it.
Speaker 1:Yeah. Do we have more of a clear narrative now on what motivated the pause? Like, you can see it so clearly in this data center preleased capacity in the seminalysis article. It's so obvious what's happening from 2023. You see the blue bars just increasing, increasing, and then just complete flatlining.
Speaker 1:Everyone else is growing. It seems like this it seems like this this, this piece, this, video with Dorkash and Dylan feels a little bit like him maybe teasing like, hey. I'm getting back in the race. Like, the headline with The Wall Street Journal is like, I got the biggest data center. That feels like I'm unpausing.
Speaker 1:But but hey. Right? You're you're not like, oh, I'm happy to be a lease, or, and, by the way, I have the biggest thing. Actually, I own the biggest Like, that's kind of a it's kind of an odd dichotomy there. And I'm wondering if there's a if there's a clear narrative.
Speaker 1:Was it specifically, like, the nature of the OpenAI relationship that that led to the pause, or was it just concern about the overall market or the viability of the technology, or was he, like, plateau pilled and had seen the GPT 4.5 wasn't getting adoption too expensive to serve? Like like, do we have a narrative for, like, what motivated the pause yet?
Speaker 5:I I don't know if it's clear. I think we have different pieces that we can piece together. The the things that Satya says in the interview point towards fungibility Mhmm. Diversification outside of OpenAI. Yeah.
Speaker 5:A lack of foresight in two years ago to what the actual demand would be. Mhmm. They they like, fishtail where they went too far on building demand
Speaker 1:Mhmm.
Speaker 8:And then
Speaker 5:they wanted to come back, and now they didn't have enough. And so now they're renting from neo clouds like Mhmm. Navias, like Lambda, I ran Yeah. Oracle directly. They've got Enscaler deals.
Speaker 5:I mean, they they're clearly using neo clouds to take on that extra bit of risk. And going forward, I I mean, we are I think the result is that it's incredibly bullish for Microsoft actually serving this demand when they have the first right of refusal
Speaker 2:Yeah.
Speaker 5:And OpenAI's growth continues to go crazy, and they they are kind of back on track to leading the way with coding models in a way that they were, you know, maybe forecasted not to with Anthropic coming and taking a bunch of share there. They are, like, all in on taking down Anthropic as a direct competitor with their codex models now. Mhmm. So I think they just kinda Microsoft just flinched a bit. Yeah.
Speaker 5:And they're they're back on track, and we're pretty I mean, we're pretty bullish on them growing in the future, but it's notable that Satya talks about things like diversification around OpenAI and around globally. Like, the idea to me that there's a there's a geopolitical conclusion that you can draw from his response on the the question about the pause where he says, what if I wanna build in India? What do I wanna build in Europe? What if I wanna build, you know, elsewhere? And, therefore, we pause North Carolina.
Speaker 5:That seems to say that governments around the world can attract investment in data centers if they implement a bunch of harsh regulations on data privacy.
Speaker 1:Yeah.
Speaker 5:And more and more companies are gonna wanna train models based on personally identifiable information or other types of data that's regulated and needs to stay in those countries, and therefore, you need GPUs around the world. You know, that could be something that they just kind of learned and and therefore pause North Carolina, spin up something else.
Speaker 1:Yeah.
Speaker 5:Haven't seen that exactly play out on the global deployments, but it could be coming.
Speaker 1:How how real is this fungibility of the fleet thing? Because, the the narrative around Google is that they have a TPU. They're so vertically integrated. They DeepMind and and the the it just feels like when you go to Gemini, you get something that's, like, down to the metal. And then at at Microsoft, it's like, pick your model.
Speaker 1:And then, also, they're they're subleasing from all these other clouds. But as as I see from ClusterMax, like, there is a wide variety of performance metrics and results and qualitative, like, even, like, the feel of these different NeoClouds. And so is there is there some sort of risk to you go to Azure and they put you on the the lowest ranked ClusterMax Neo Cloud, and it's like, I would rather be up here on the the top tier lease. I wanna be I wanna be sub I wanna be subcontracted down to the platinum tier, not the d tier. Is there any risk to that, or or or is am is Microsoft actually able to take a Neo Cloud that is in the d tier and and give you the Azure level of service?
Speaker 5:Yeah. I I think it really depends on at what level you're assessing the fungibility. So I think in some ways, the tokens or the tokens produced by the model endpoints are almost completely fungible.
Speaker 1:Okay.
Speaker 5:You know, you can find it in the models in private scenarios. But generally speaking, like, tokens from one provider versus tokens from another provider are effectively the exact same
Speaker 6:Mhmm.
Speaker 5:As long as you're, you know, hitting the, like, quality metric you need from that model deployment on that GPU.
Speaker 1:Yeah. Yeah.
Speaker 5:But if you look at the underlying architecture, like, when Azure claims to add a 100,000 g v three hundreds coming along online this quarter, I mean, that is not fungible to every single user on a cloud service. Like, g v three hundreds are rented 72 GPUs at a time and a 135 kilowatt rack. Your workload needs to be ported to ARM because it's a grace CPU. Mhmm. You need to have the performance per dollar benefits of the Blackwell GPU to justify it over the previous generation hopper.
Speaker 5:It needs to use a GPU in the first place. So I just spent a bunch of time in the article talking about the importance of, you know, in in the in the interview talking about the importance of databases of, like, you know, non GPU related services that actually run the web app, that actually store the data. Right?
Speaker 2:Turbo Puff.
Speaker 5:There's lots of Azure capacity beyond GPUs coming online too. Right? Yeah. You know, I call them CPU data centers now, and they consume a little bit less.
Speaker 1:Yeah. Cup Cool.
Speaker 2:I wanted your take on a couple other things. One, the new Anthropic news, $50,000,000,000 investment. Any any any reactions to that?
Speaker 5:Yeah. I think notable that they called out FluidStack by name, and they're not calling out the underlying providers, as you said. Like, you know, if if somebody like FluidStack can help them deliver on a a bunch of what we think is TPUs deployed directly to first party, you know, then there's, I mean, there's all sorts of stuff that they can do because under the hood, it's it's pretty clear that FluidStack is deploying these TPUs in TerraWolf data centers in Buffalo, their Lake Mariner facility, and and elsewhere in Texas. And then at Cypher Mining in Texas. If you look at some of the you know, you you gotta pair two news press releases together.
Speaker 5:Mhmm. The one from the underlying provider and and FluidStack and then the one from Anthropic with FluidStack. But the point is that Anthropic is is definitely ramping up just at the same level as OpenAI, and maybe not quite at the same level, but they they both seem to be clearly believing that that statement from Greg Brockman. Like, if we had 10 x more compute right now, we'd have 10 x more revenue. Mhmm.
Speaker 5:And so, therefore, their constraint is compute. Bring it online and just keep growing.
Speaker 1:That was certainly the case with the early iPhone launch. Like, the iPhone, like, Apple's earnings were extremely predictable every quarter because they knew they they were like, as many as we make, we will sell. And so they were completely supply constrained. I I it does feel like on the on the question of backlogs, Anthropic has just been much less aggressive. Like, they have been somewhat saying the biggest number every once in a while, but they haven't gotten into the trillions of backlog.
Speaker 1:And it feels like OpenAI Sam's almost like, oh, yeah. Sure. Like, give me all the weight of Stargate even though that's sort of a separate entity. And he could have easily fended that off and been like, well, that's Stargate. That's sort of a separate thing.
Speaker 1:That's not all on OpenAI. Like, we need to clarify what like, how this all fits together. But Anthropic's been a little bit quieter on the on the, like, okay. We have this crazy RPO that's going on all all over the tech industry.
Speaker 2:What was your reaction to Core Weave's quarter? Jim Kramer was going pretty hard.
Speaker 1:What did what did Kramer say?
Speaker 2:He he was just like
Speaker 1:He was blackmailing?
Speaker 2:It was yeah. Was just a funny interview. He was like, what's going on? What's going on?
Speaker 1:He's like, doubled the they doubled revenue, but they sold off. Is that
Speaker 2:what Yeah. Well, I mean, they sold us a ton in the last month.
Speaker 1:Yeah.
Speaker 2:I think, like, 20 about a yeah. 26%, something like that. But Kramer was saying like, why are you relying on a Bitcoin miner to like help fill your capacity? Are you sure they can deliver? And he was talking about Core Scientific, which Core we've attempted to acquire.
Speaker 2:It got rejected. Yeah. Yeah. But, I know it was Core response was yesterday.
Speaker 1:Platinum on cluster bags. That's all I need to know. Buy and hold. Get lost, creator.
Speaker 2:Yeah. And and the CEO was saying, like, yeah. And, like, he didn't name Semi Analysis because I think the CNBC audience is maybe not familiar yet. But he was saying, like, we're platinum rated. We're platinum rated.
Speaker 1:Oh, you said platinum rated? Yeah. Oh, that's amazing.
Speaker 2:He's like
Speaker 1:I love it.
Speaker 5:Yeah. I mean, it's in it's in the earnings calls. I mean, Alice has mentioned, I think, three times. There you go. But that's definitely yeah.
Speaker 5:We we went into this the
Speaker 7:We're very
Speaker 1:excited for this. This is big.
Speaker 5:Yeah. I think we like, we went into this Jeremy and the data center guys, Rake, Dan, they put out a note earlier in the day to the Core Research subscribers that the the Core Research is at risk of short term delays in their CapEx, but not to their revenue, which is driven by the data center partner Core Scientific.
Speaker 3:They Mhmm.
Speaker 5:So, yeah, when you're relying on somebody to add 250 megawatts and, you know, they're only gonna get you a 150 by the end of the year, that changes your guidance on CapEx.
Speaker 1:And Sure.
Speaker 5:I think the, you know, the this is like yeah. Look. This is the the reality of the industry right now, which is that when projects are so big, measured in the hundreds of megawatts, small delays or small changes in a plan can really impact, like, short term financial guidance that that people have in place. Mhmm. I don't like, personally, I don't think this changes any of the fundamentals of, like, CoreWeave's engineering or a lot of the, like, experience and and what customers they have signed.
Speaker 5:But we saw the same like, a very similar reaction when when the information put on an article about Oracle
Speaker 1:Yeah.
Speaker 5:Having a a few delays. Right?
Speaker 1:Yeah.
Speaker 3:Yeah.
Speaker 5:And, you know, I think people are people who don't know about the data center industry or or things like this, they they see things like, oh, yeah. These these GPUs take a month to come online after they get installed, they're starting to depreciate the asset, but they're not generating revenue yet. Like, what's going on? It's like, yeah, that's that's typical. I mean, you Yeah.
Speaker 2:That's completely standard. That's business.
Speaker 5:Yeah. It's stuff takes I mean, you know, maybe US federal government is is different, but in my previous job, we we try to hand over these supercomputers to the US federal government. It take, a year and a half to pass acceptance.
Speaker 1:But at the same time, if if investors aren't aware of that and then they learn that for the first time, they could be surprised. And so that could be something of what we're seeing in the gyrations in the public markets,
Speaker 3:I suppose.
Speaker 5:It makes sense. And and there was a I think there was a broad Yeah. Recognition that the Bitcoin miners have an uphill battle to figure out how to run these facilities when compared to established players like an Equinix or a digital realty or, you know, Switch or some somebody that's, like, has been running tier three data centers for a long time. Yeah. It's just different.
Speaker 1:Give us an update on the energy model that's coming. What can you tell us? Is it this year, next year? Is it my Christmas present? How does this work?
Speaker 5:There's some previews. I think you should, you should have a Jay on the on the program next time or bring Jeremy back.
Speaker 1:Yeah. Yeah. I would love to have both of talk about it.
Speaker 5:Yeah. I
Speaker 1:I I'm specifically I'm very, very interested in, you know, the just American energy forecast for the next couple years, because it feels like the entire industry is sort of hinging on, like, the trend changing, in my opinion. It feels like we're we're we need to bring up the level of energy production for everything else to happen. And, whether we hit some sort of regulatory block or some massive scale block or a capital block or a glut of some sort or some gyration correction, there's so many things that could go wrong, but I'd love to know what the forecast actually is from the folks who have gone so much deeper.
Speaker 5:I'll give you the quick the quick hit. So, everybody's trying to do turbines behind the meter right now, not gas. Right? Mhmm. And you've got a number of different players.
Speaker 5:But if you look at Schneider, Vertiv, Bloom, one of them, Bloom, is ramping up they're first of all, they're all sold out. So the model will cover, like, how sold out and exactly, you know, exactly how sold out. But, yeah, you you wanna look at Bloom ramping up production, and you wanna get Schneider and Vertiv on here and try and figure out exactly why they're not. Let's let's see, you know, what does it take to get those guys to recognize what everybody else in the industry is recognizing right now. And then and then let's dig into solar, wind, nuclear, hydro, all these alternatives that, you know, you'd like to you'd like to have in there.
Speaker 5:Right? Why why is Elon putting power plants on the other side of the border and then piping the electricity back to his data center in Memphis because of, you know, short term regulatory approvals.
Speaker 7:Like
Speaker 5:Yeah. There's all of that political stuff that goes on to influence this market.
Speaker 1:I'm I'm so excited for it.
Speaker 2:Well, thank you for coming on
Speaker 1:Yeah.
Speaker 2:Again twice in a week. We'll see what happens. We
Speaker 1:really appreciate
Speaker 2:you taking time. For
Speaker 1:a three peat. If you're if you're not already subscribed, what are you doing? Head over to semianalysis.com. Buy the most expensive subscription you can find, especially if you're a venture capitalist. You can't call yourself a VC in the age of AI if you're not paying semi analysis the big bucks.
Speaker 2:Demand it. Couple $100,000 per month.
Speaker 1:Per month. I I demand it.
Speaker 2:Anyways, great. Nice to see you, George. Thanks for coming on.
Speaker 1:We'll see you soon.
Speaker 4:Take care.
Speaker 1:Bye. You mentioned Turbo Puffer. I'll tell you about Turbo Puffer. Search everybody. The Puff.
Speaker 1:Serverless vector and full text search built from first principles and objects. Storage is fast, 10x cheaper, and extremely scalable. The soundboard
Speaker 2:is doing very well. Leaked their revenue recently, and I was Turbo Puffer. It's quite shocking.
Speaker 1:Well, we have a shocking guest. Brian Halligan from HubSpot joining us. He's the cofounder of HubSpot. Welcome to the stream, Brian. Are you doing?
Speaker 2:Sorry to keep you waiting. Welcome to the show. Never been better.
Speaker 7:How are you guys doing?
Speaker 1:We're doing fantastic. What is the what is the latest in your world? Have you been captured by the AI build out? Is this something that's keeping you up at night, or are you, watching it more as an observer, or are you checked out entirely? Where are you on the the how much does it get your pulse up?
Speaker 1:Because me and Jordy, it's every day for us over here. We're in the trenches.
Speaker 7:I'm very checked in.
Speaker 1:Okay.
Speaker 7:I come at it from another angle. Yeah. What I've been doing for the last year is I'm like the run an in house CEO practice at Sequoia.
Speaker 1:Yeah.
Speaker 7:And I do three things. I coach CEOs, most of which are building companies on top of the AI wave, all of which. I create communities of CEOs so they can collaborate together. I have a kids table of CEOs of kinda small company and an adults table of CEOs in large companies. Mhmm.
Speaker 7:And then I'm creating content. So I've got a podcast. Launch is tomorrow.
Speaker 1:Oh, let's go.
Speaker 7:Yes. About CEOs and how to be a CEO.
Speaker 1:I love it.
Speaker 6:How do you
Speaker 1:go from
Speaker 7:start up to scale up? Tune in tomorrow.
Speaker 2:Fantastic. What what's what's the format? What's the format? Is it is it guest driven? Is it, is it turning kind of the lessons that you talk about at the kids table and at the big kids table?
Speaker 1:It's a six hour daily livestream, actually.
Speaker 7:Exactly what
Speaker 1:it is. It starts it starts at 9AM and and ends at 3PM. Makes The Us look
Speaker 7:basic thesis is, like, the playbook I grew up running HubSpot from 2006 to 2021. Like, a lot of those plays don't seem to work as well.
Speaker 12:Sure.
Speaker 7:And the getting like, the Rubik's we thought, like, for example, I think what's how the way Jensen Huang runs this company is super interesting with 60 direct reports and no one on ones and kinda public criticism. The way Elon runs his company, his empire is really interesting. The way Brian Chesky does it is quite interesting. And I noticed all these CEOs have kinda new place, and they've got a new perspective on things. And so I'm inviting them on kinda one by one to chat about how did you become a CEO, how do you like your job, what are the best practices, what is all wrong about CEOing these days, and I think it's first guest is Parker from Rippling tomorrow.
Speaker 2:Nice.
Speaker 7:And it's a good one because Parker gives all the tea on getting fired by David Sacks from benefits, all the tea on the drama with Deal on Spygate. And then in between all that, he is a very, very thoughtful CEO. He's not a big fan of conventional wisdom as people know, but he he's doing some really cool stuff. So that's kinda episode number one tomorrow.
Speaker 1:Yeah. I like that framing as, like, focusing on the actual job of the CEO because there there's there's there's other shows that could do, like, okay. Let's do the product review. Let's let's do the product announcement. But having one feed where you can go and actually understand the philosophy of a whole host of CEOs.
Speaker 1:That's fascinating. Jordan? I think
Speaker 7:it's What? I think Sorry. I think it's kind of interesting because I was the CEO for so long. So it's like, I'm really journalist. It's like a conversation about what the hell is really going on here.
Speaker 1:Yeah.
Speaker 2:Yeah. How did your approach evolve over the fifteen or so years that you were CEO of HubSpot?
Speaker 7:I don't think it evolved that much is the interesting part.
Speaker 2:You just one shotted. You just
Speaker 7:I was basically the same guy from 2006 to to 2021. And but and I followed, like, ye old playbook of the way people run companies, like the Bill Campbell style playbook. And that's what I think is interesting. It's kind of changing, and that's what I'm trying to dig into and kinda go deep on. It's like Stanley Tucci.
Speaker 7:You know, Stanley Tucci show when he goes to Italy and he's trying to find his roots. Yeah. I'm searching. I'm searching.
Speaker 1:Fantastic. What are your thoughts on
Speaker 7:You wanna know some surprises?
Speaker 1:Yeah. Please. Yeah.
Speaker 7:Okay. Couple things. There's a there's a breed of CEO that I see a lot of these days that I call a five tool CEO. I'm a big baseball guy, there's such a thing in baseball as a five tool player. Somebody who can hit, somebody who can hit for power, somebody who can catch, somebody who can throw, and somebody who can run at an elite level.
Speaker 7:Very, very rare in baseball.
Speaker 2:Who's who's an example of a of a modern five tool player?
Speaker 7:Shohei A six tool player is Shohei Okay. Yeah. He can do he he can actually run. He can hit. He can hit for power.
Speaker 7:He can throw. He can catch. Yeah. He's a very talented and very unusual cat. Alex Fregman's one of those on the red some red sets guy.
Speaker 7:But there's a bunch of these folks who kinda remind me of that in in the software industry where they've got vision, they can code, they can design, they can recruit, and they can sell their product. And they're and that's I think what's pretty rare in software, they're all over the place now. And they're getting funded, and I work with a bunch of them. Just a few examples, like Parker's one, for sure. Brett Taylor, for sure, from Sierra's one.
Speaker 7:Gabe Stengel from Rogo, kind of a new company's ripping is one. Matti from eleven Labs. I have no idea how to say his last name. Karim from Clay. Dara from Delphi, like, on and on and on.
Speaker 7:I'm super impressed with the new breed that's coming out and how talented they are.
Speaker 1:Who do you think the Barry Bonds of business is or the Mark Maguire of business? Fantastic performance as a CEO, clearly using performance enhancing drugs.
Speaker 7:If someone if someone tapped me on the shoulder and said, you know, I don't know if you heard this, but Elon's actually an alien
Speaker 1:Oh, yeah.
Speaker 7:And be like, man, that that kind of that puts
Speaker 2:That's trash.
Speaker 7:You know, would you guys be surprised if someone said, it turns out he was an alien? Would you guys be like, oh, no. No. No. No.
Speaker 7:No. That's that's crazy. You'd you'd be like, yeah. Maybe.
Speaker 1:It is it is funny the performance sensing drugs thing because, like, the majority of jokes about how it's not illegal to be on a stimulant. I obviously partake in in caffeine, the legal stimulants, but some folks, go a little bit further. But the reason that it was so controversial and so illegal in baseball is because isn't baseball a sanctioned monopoly by the government? I believe that's I believe that's why. And so that's why during the whole baseball scandal, the steroid scandal, they came in and they had to do, like, a hearing in on Capitol Hill.
Speaker 1:It was a crazy, crazy moment. I don't know if you tracked that.
Speaker 7:The the I think the real reason is because they've been around for a hundred and fifty years. People who broke records in the nineteen twenties, like Babe Ruth broke important records in the nineteen twenties, that you can have, like, a ranking of who's actually done the most home runs, best batting,
Speaker 1:all these
Speaker 7:different things. You can't do that in basketball because they change the rules so much. You can't do that in football if they change the rules so much. That's why they were so resistant to change the rules in baseball, and that's why they were so up in arms about the steroid thing.
Speaker 1:Yeah.
Speaker 7:Yeah. But I do think founders do the equivalent. Like, when I was growing up, I'm a beer drinker. You know? We went out the team, definitely tied it on.
Speaker 7:You go to you go to a Sequoia founder dinner?
Speaker 1:Yeah.
Speaker 7:First of all, it's at 05:30.
Speaker 1:Oh.
Speaker 7:Kinda, like, early. And everyone has a salad, and it has water, and then is back in the room coating by 07:30. That's definitely not how I grew up.
Speaker 2:Yeah. Yeah. Yeah. Do you think beer do you think beer gave you an edge back in the day?
Speaker 7:I I I don't think beer gives anybody an edge. I think it helped me connect with some employees along the way for sure, particularly salespeople.
Speaker 1:What do you think about co CEOs? Yay or nay?
Speaker 7:Okay. I I think I Sandhill Road is very negative on this.
Speaker 2:Last Except on stewards. We have co stewardship.
Speaker 7:Yes. We can talk about that too.
Speaker 1:Yeah.
Speaker 7:But I talked about this on one of the pod episodes with Vlad Tenev. He was a co CEO for, like, the first seven or eight years of the company, and I was very surprised to hear that. And he was very positive on it. I think you can do it. I think it's a little dangerous.
Speaker 7:You better know the person very well and be able to finish your sentence. Like, my cofounder, Darmesh, and I, we weren't co CEOs, but we ran it like a partnership. And we thought of it like a partnership, and the employees thought of it like a partnership. If we called ourselves co CEOs, that would have actually worked quite fine.
Speaker 2:That makes sense.
Speaker 7:Yeah. Want some other things that surprised me?
Speaker 1:Yeah.
Speaker 7:Here's the weird thing. Two of our most successful entrepreneurs of our generation are Jensen Huang Yeah. And Elon Musk. And they've obviously got really unique play playbooks. Like, Jensen's got his 60 direct reports, and the no one owns all this stuff we just talked about.
Speaker 7:Elon has his has his algorithm, and, like, he credits the algorithm with a lot of his success. I ask all of the CEOs on the pod, like, who's on your Mount Rushmore? Who do you follow?
Speaker 1:Mhmm.
Speaker 7:Like, who's your inspiration? For me, it was Steve Jobs. Like, my generation is Steve Jobs. None of them really say, you know, Jensen. Like, no one's copying their playbook.
Speaker 7:No one none of these CEOs have 60 direct reports, and not a single person has mentioned the algorithm. I think that's quite odd. Do you?
Speaker 1:Yeah. We actually polled YC founders in the last demo day. We asked probably 20 or so who was their favorite entrepreneur, like, they look up to. And, I was expecting, like, half to say Elon and Yeah. Maybe, you know, a third to say Jensen, something like that.
Speaker 1:Just like vanilla market cap. It's a question. We didn't prep them. We didn't tell them we were gonna ask them this. This is off the top of their head.
Speaker 1:And there were maybe, like, two or three Elons, but it was all over the place. Yeah. And it was it was way down the stack. I mean, there were some people who are like, the the founder that I look up to most is is, like, a, like, a founder who started their company five years ago and is a unicorn now, but, like, certainly not, like, one of the greats. Like, obviously, like, doing doing fantastically, but, like, you know, this is like a series b or series c level founder.
Speaker 1:And they're like, that's who I actually look up to.
Speaker 2:I don't think I don't even think a single person said Jeff Bezos.
Speaker 1:I don't think anyone said Jeff Bezos.
Speaker 2:A guy with a 120,000,000,000 of of $20.24
Speaker 1:Free free cash flow. Even yeah. Yeah. It was crazy. It was it was much less concentrated in the mag seven than I thought it would be.
Speaker 1:And I don't know if that's a shift in in how younger entrepreneurs or newer entrepreneurs are thinking about what success looks like. Like, the maybe the downstream critique of, like, the the teal monopoly thesis is that, like, it's actually really hard to go start a business that is in the social networking category or in the online commerce category. It's just harder to do that. And so, maybe people some people read zero to one, and they said, hey. I gotta start a company.
Speaker 1:But then other people read zero to one and says, hey. I I better not I better not set my sights too high because, realistically, how am I going to compete in, you know, some of these monopolistic categories that have been truly dominated by the hyperscalers? It's gonna be hard for me to go zero to one in those categories. And so I need to maybe find a smaller market. I don't know.
Speaker 1:Maybe it's a trend.
Speaker 7:One of the things that surprised me about them is they don't really have anyone that they're really following or looking up to. They're very much their own people. Mhmm. And they're kinda making it up as they go, and they're and they're writing the rules kinda based on what they think makes sense. They don't have like, when I grew up, I had two people.
Speaker 7:I have two CEOs. Jobs
Speaker 1:Mhmm.
Speaker 7:Jerry Garcia. Those were my my two heroes that I tried to base my behavior around.
Speaker 1:Yeah.
Speaker 7:And they they, you know, they were my courses. These guys don't have courses. The other thing that's interesting about all of them is, like, be yourself, everyone else is taken. They're all very, very, very different homo sapiens. Like, Vlad Tenev is very, very, very different from Parker at Ripley.
Speaker 7:Anton from Lovable is very different than Matti from eleven Labs. They are all quite unique, which I I like to see that. And they're and they're they're their own people. They have a lot of agency.
Speaker 1:Are you
Speaker 2:interviewing anybody that runs their company remotely?
Speaker 7:Nobody's doing remote. Everybody is in the office. Remote is dead.
Speaker 1:Remote is dead.
Speaker 7:And everybody talks about 996. I think there's a lot more talk about 996 than walk on 996. I don't think very many people actually doing it. The CEOs are, though. The every CEO I talk to is under a like, I say, what's your stress level?
Speaker 7:One to 10? Almost all of them say 10.
Speaker 1:Yeah. What do you think about this idea that a lot of companies are nine nine six ing in a hybrid sense that because the tools have gotten so good I mean, a software engineer can fire off a prompt at home on their phone that will go and, you know, start doing work that gets reviewed in the morning. I I'm I'm firing off a deep research prompt for something that we are gonna talk about on the show. Yes. Tomorrow.
Speaker 1:And so there's this, like, ambient level of remote work that's happening on top of the in person work that's happening. And so I might if I were to push back, it might be that, remote is not dead. We said yes and. We said, let's go back to the workplace. Let's work in the office, and then let's also work remotely at home on Saturdays, on the nights and weekends, because that's what it takes to win.
Speaker 1:And so the nine nine six thing is happening, but across two two spaces.
Speaker 7:I'm a little I totally buy that so much work is asynchronous now. Yeah. I just think, like, we went remote at HubSpot pre COVID, and, like, the culture's great. It's still great, but you lose something. You lose.
Speaker 7:You definitely lose something. So I'm very supportive of the announcing. Like, if I were starting a company today, I wouldn't do remote. You know, your headquarters is San Francisco. San Francisco is a bearable place to scale a company.
Speaker 7:Salespeople are hard to find and really expensive and not loyal. Developers are even harder. And so I do a big hub in San Francisco and then another big hub, let's say, in Toronto where there's a lot of salespeople and a lot of developers Mhmm. And be like, we're in office and or at least four days a week. I think that's a good call.
Speaker 7:Ironically, the people who I think that CEOs who I think are the hardest core are the two European founders I interviewed, Anton from Lovell and Matti from eleven Labs. Like, they are seven days a week. They expect everybody in the office for seven days a week. Those two are the hardest core, even more so than our American brethren.
Speaker 1:Well, the pressure on them is immense because people have such so low of expectations for Europe. So Yeah. You know, they have to deliver for their country. It's really it's really high speed for them.
Speaker 7:Is kind of patriotic
Speaker 1:Yeah. For sure. Of course.
Speaker 7:Of course. Need to
Speaker 1:lead the thing. Talk about the stewards I wanna call.
Speaker 2:One second. I I was curious. You said, the CEOs you interviewed, all of them or the CEOs you talked to, all of them say their stress level is 10 out of 10. For the most part, they do. Fifteen years running HubSpot.
Speaker 2:When was your like, what what did does that resonate? Was it kinda steady state 10 out of 10 the whole time, or did you at some point figure out a motion that allowed you to maybe hover at, you know, a seven, which is maybe like a healthy amount of stress?
Speaker 7:It was pretty close to 10 the whole time. Just Most of this
Speaker 2:white knuckling it.
Speaker 7:Just It was pretty stressful. Like, the whole thing was stressful. And and, like, the thing with HubSpot in most companies, like, looks pretty smooth from the outside, but it was, like, two steps forward and, like, one freaking giant step back and two steps forward, giant step back. You're stepping in it. And in HubSpot, like, we were kind of a wartime company.
Speaker 7:Like, I like Ben Horowitz's book, and he's got a whole chapter on wartime versus peacetime CEOs. All of these CEOs are wartime all of the time. And if they don't have a war going on, they kinda create a war. I thought that was kind of interesting. It's a wartime era.
Speaker 7:The only CEO I interviewed that is not, like, 10 out of 10 stressed is Nikesh from Palo Alto Networks. He's a cool cucumber.
Speaker 1:Yeah. I wonder why. I mean
Speaker 2:Yeah. He's a
Speaker 1:cool He's, like, so secure.
Speaker 7:He doesn't he doesn't work. A lot of these guys are wrong.
Speaker 1:Mean, really yeah. Like, this has more, like, strength of strength of market position. Right? Like, if if you are running a company where Sam Altman's out there being like, I would love to eat off of your plate. I would love to launch a competitor.
Speaker 1:And then, like, Sacha Noodella is like, oh, yeah. We're gonna do that too. Like, you better be operating at a 10 out of 10
Speaker 2:stress off.
Speaker 1:Sam Sam you're gonna get cooked.
Speaker 2:Sam competing you know, effectively competing with Microsoft while Microsoft has all his IP, and he has to give him 20% of his revenue, and he's gotta pay him a quarter
Speaker 1:It might be quarter
Speaker 2:of a trillion over the next few years.
Speaker 1:He might he might come for your for your nice little startup. You know?
Speaker 7:Virtually every company I'm just looking down my list of kids stable, adults stable. Virtually all of them are extremely nervous about what I'm gonna ask him to do. Yeah. Of course. It's a a long conversation at every board meeting.
Speaker 1:Of course. Of course. The the Stewart thing. I'm so interested. Like like, why doesn't Sequoia just have one CEO?
Speaker 1:Why don't they have a, you know, like, a super GP, like a head partner named named partner? You could just rename the fund. Kleiner was doing that for a while with Caulfield Byers. There's so many different ways to approach it. The Blue Owl we were talking about earlier, they have two co CEOs, and I think they have three co presidents.
Speaker 1:You know, these names kind of mean nothing, but they also have extreme weight. So what is what is a steward in the Sequoia Capital context? Why not CEO? Why not president? Why steward?
Speaker 1:And then what does it mean to have two now?
Speaker 7:Okay. I like the I actually like the word steward because, you know, Don Valentine started and Michael Moritz and and Jim Getz and Doug Leone. Like, it's been a long line of really strong leaders in Ruloff that they've handed it down to. And the thing that's interesting about Sequoia, so I've been in there for a little over a year, is they are not at all, like, even remotely resting on their laurels. They are paranoid.
Speaker 7:They are aggressive. Mhmm. They don't wanna blow it. And so steward is actually a decent word. The the in this particular case, I think Ruloff was ready to move on.
Speaker 7:He wanted to move on on top, and the there were just two really obvious candidates. Alfred Lin's got an incredible track record. He runs the early team. He's a good leader. Pat Grady's got amazing track record, runs growth team.
Speaker 7:Like, picking one of those would have been tough. They work well together. It's like, let's give it to them both. And I think Sequoia has done that kind of thing in the past, so it's not unprecedented. And I I think it's gonna work well.
Speaker 7:And they don't call themselves they call themselves stewards, but internally, they're like, just call us partners, and they've made a big deal out of that, which I think
Speaker 1:I imagine that they go around the office saying, you have to call me steward Lynn now. You have to call me steward Grady now, And also don't make eye contact with me.
Speaker 7:Yeah. There it is.
Speaker 1:And I will wear I will wear long flowing robes. No. It yeah. It's just it's just interesting the the actual, the actual aesthetics of it. I mean, we don't need to get into the actual dynamics of the of the changeover from Rohloff to, the the co stewards.
Speaker 1:It's just I I wonder if if a co CEO dynamic is sustainable or if it is an audition process for the final boss, the final CEO.
Speaker 7:I mean, it hasn't worked a lot. It it I mean, Netflix is doing it. Spotify is doing it, but you can't think of a lot of examples. And it looks like it kinda works with Netflix. Like, that's been going on for a while, and it's doing pretty well.
Speaker 1:Yeah.
Speaker 7:I mean, Spotify is really there's just not a lot of precedent for it. So I don't know. It wouldn't be my first choice to to be a co CEO or to fund a co CEO. Yeah. But in some cases, it can work.
Speaker 7:I think it's a little unorthodox.
Speaker 1:There is an interesting dynamic where
Speaker 7:They call it a partnership for a reason. Yeah. You know? It's not a corporation. It's a partnership.
Speaker 7:And so that vibe has stretched over five decades for these folks.
Speaker 1:Yeah. I wonder I wonder the benefits of having two people in the same in in the role, like, it becomes less pressure for one person, but then you also don't have necessarily, like, the buck stops with one person. There's all these, like, odd dynamics. Like, there's benefits and costs to to having, the do the That's right.
Speaker 7:I think they can get a lot done, and they can divide it up and get a lot more done. That was the case with my cofounder and I. Like, we divided a lot of stuff up Yeah. And we got a lot of shit done together in in our respective parts. And I deferred to him a lot.
Speaker 7:He deferred to me a lot.
Speaker 1:What do they call it? Du duarchy, where there's two kings. Monarchy one key. Duarchy is two kings. Very rare.
Speaker 2:How have you been processing this new wave of AI agent startups that are, in my view, oftentimes competing with traditional SaaS companies that may have only been started a few years ago? How how have you been processing it?
Speaker 7:Well, I'm I'm involved with a lot of them. That's I mean, they have escaped the gravitational pull of the of the Earth's revenue. Like, holy crap, where they're going fast. And HubSpot grew fast in its day, and and it's like, wouldn't even get a second look from a VC now. And it's remarkable what's going on.
Speaker 7:And I tweeted a a week or two ago that, like, it's a bubble. If you get an offer to sell your company, should do it. You should take money off the table. And on one on one shoulder, I'm like, it's definitely a bubble. The valuation is crazy, 100 x and whatnot.
Speaker 7:On the other side of my shoulder, like, I just have never seen in the history of mankind growth like this, so maybe it's not. I don't know. Where do you guys come out of that? Are we in the middle of a bubble or is it just match the growth?
Speaker 2:I think we've had a you know, we talk with a lot of investors and sometimes we get a little concerned when people come on and say they don't care at all about margins. We worry a little bit bit about those clips ending up in documentaries about, you know, whatever whatever this moment in time has up there.
Speaker 1:You're either in a bubble or you're in a crash, and we're definitely not in a crash right now.
Speaker 2:Yeah. I get I get I get I would say I get my concern comes from companies that spring up and are raising because they're positioning their product as this, like, AI agent when in reality, it's hard
Speaker 4:to
Speaker 2:tell why it's gonna be a better solution oftentimes than something that looks like a a a normal SaaS product. And so I just get I get concerned because I know that the the SaaS companies in their category are have access to all the same tools and they have distribution and they can potentially use the advantage they have of having this big product surface area and a bunch of core existing product and then just compete on all these new product lines. And and I just wonder if if some of these, like, age AI agent, these more native AI companies will struggle to actually compete with, and and you've seen this. Like, it's not like com companies like Notion, for example, didn't sit around and say, like, no. We're not gonna integrate LLMs into our product.
Speaker 2:Like, that seems cool, but we're just a we're we're, you know, a notes product and and we're gonna stick to handwritten text. Like, were incredibly quick to integrate all the best models into their product. And so I just don't I don't see, like, the most recent generation of teams, like, asleep at the wheel at all.
Speaker 7:Yeah. And I'm old enough to remember the last platform shift from client server to SaaS. The client server companies were very much in denial of SaaS for a long time. I remember Oracle just being very vocal that SaaS is it's a bunch of BS. And obviously, SaaS did very well.
Speaker 7:Some of those folks did well, and they and they came across. SAP did pretty well. Oracle did pretty well. Oracle did fantastic, actually. The thing that's different this time around is all the SaaS players, including HubSpot, were very early on it and are investing heavily in it and are building cool stuff.
Speaker 7:And they have a little bit of advantage, and they have a lot of data and a lot of context, which is really useful if you're building agents. So I wouldn't I don't I I think SaaS is alive and well, and I think a lot of these SaaS companies, HubSpot, ServiceNow, and Ocean, so many of them are building cool stuff. Like, inside of HubSpot, I think of it as like a platform with applications and agents. You can build agents on it. You can use our agents, and then it's got a a Copilot that you can refer to.
Speaker 7:It's all starting to work. People are using it. The thing that's interesting about some of these Asian companies is they're working in areas where there's there weren't SaaS companies. Harvey is doing incredibly well. It wasn't really a you know, it wasn't an area with a lot of big SaaS companies in there or Rogo selling to investment bankers.
Speaker 7:Like, a lot of a lot of the early huge wins on the agents are in funny areas. This company called Juicebox, absolutely ripping, is in recruiting areas where they're like a big incumbent. Like, they're filling in the air.
Speaker 1:Yep.
Speaker 7:And some of them are sort of be working alongside of it, and some are autopiloty. And the autopilot ones, I think, will be the ones to really watch.
Speaker 1:Yeah. It feels it feels really hairy for Microsoft to go after legal AI just because that's not really they they sell mostly general purpose tools. And so if you're building an Excel plug in or you're bringing AI to Excel, I'm worried a little bit about where that goes. But if you're building something that, yes, it ostensibly is a Word document, but your entire business is off in this industry that's heavily regulated and Microsoft has only penetrated with the broad tools and has never really built a vertical solution in that category, I I feel much less worried about you being attacked from the labs. But thank you so much for
Speaker 2:taking the time fun.
Speaker 1:To chat with us.
Speaker 2:Excited for your I'm excited for your new show. Excited to check out the first episode.
Speaker 1:And the number of stewards at, at Sequoia is doubling. So, any day now, you might get the tap of the shoulder. Be the third, fourth, fifth steward. They're adding more stewards every day, and we're pulling for you.
Speaker 7:See you, guys.
Speaker 1:See you. Cheers. Google AI Studio. Create an AI powered app faster than ever. Gemini understands the capabilities you need and automatically wires up the right models and APIs for you.
Speaker 1:Get started at ai.studio/build. Our next guest is doctor Fei Fei Li from World Labs. She is a world renowned computer scientist. Thank you so much
Speaker 2:Welcome to the show.
Speaker 1:For taking the time to talk to us today, and congratulations on the launch.
Speaker 2:Massive.
Speaker 9:Hi, guys. How are you?
Speaker 1:We're doing fantastically. I I I have so many questions about, what you're building. I'd like to start with why you're building it. Specifically, what was the moment where you decided to go and start the company? Because, the big institutions, haven't exactly given you the cold shoulder.
Speaker 1:You've been associated with Stanford and Google and on the board of Twitter at various times. You could be doing work inside of a hyperscaler, I'm sure. Why did you wanna build a company outside of the big labs?
Speaker 9:Well, because we had a vision. Mhmm. We had a vision we really believe in. We believe that AI as a civilizational technology will will help humans and superpower humans in many aspects of the intelligence industry. Mhmm.
Speaker 9:One of them is spatial intelligence, and that is something that is, in my opinion, still still in the in the in the budding stage. And our vision was ahead of most people, and this is something that my cofounders and I really feel passionate about because because without this, AI or AGI would not be complete. And we wanna pursue that vision and that mission.
Speaker 1:Talk about how you think about spatial intelligence that there's so many data primitives from GIS data, GPS data. There's, you know, dot clouds and all sorts of different ways, even just video footage like what we're generating right now. We're generating spatial data to some degree. How do you like, where where did you think the initial the initial data sources were, like, lacking? And then how did you want how do you think about building up the stack to kind of advance this and move it a step forward?
Speaker 9:Yeah. You're totally right. Spatial intelligence is actually as huge or horizontal as, say, linguistic intelligence or language intelligence. So there is many aspect of it. But fundamentally, I think it's it's it's deeply perceptive.
Speaker 9:Mhmm. You know, it involves seeing and understanding. It involves reasoning. It involves the ability to create in the mind's eye what what worlds look like and also the fundamental ability to to be able to interact with the with the worlds, whether it's physical or virtual in a very profound way. And if you put all these together, we haven't had technology that can can really do all of the above, and we're still on a journey to unlock that.
Speaker 9:But one of the things we just have done is really putting out the world's first three d world generation model that is available to everybody. And not only it's generative, it allows users to interact and create and edit. And your your question about data is is is actually a a important one because it's hard. Unlike language, unlike videos, unlike images, you don't have too many three d data too much three d data out there on the Internet. They're much more specialized.
Speaker 9:So as a group of technologists, we actually have to we have to just work harder and, you know, and and, frankly, we use a hybrid approach in data. Some are large scale from the Internet. Some are large scale from simulation. Simulation. Some are real world captures, and a lot of data also comes from algorithmically processed data.
Speaker 9:That's really important because it's just a much richer problem. Three d is a much richer problem.
Speaker 1:So the, I mean, the product that we just saw, it it looks a little bit like a video game. I can imagine a bunch of different ways that this gets built into something that feels like a video game. Or, maybe there's this new trend of folks who are using AI tools almost as, these they just enjoy generating songs on Suno, or they enjoy just creating for the sake of creating. It's like you sell a guitar and then someone plays the guitar, and they never commercialize their music. They just enjoy playing the guitar.
Speaker 1:And so I'm wondering if you have a view on, is it is it too early to tell what your customer base or what the user base will look like? Are you just hoping to get this out and then see who shows up? Maybe there's a robotics company that needs a bunch of data, and so they use your model to generate synthetic data. Or there's people that just have fun with it, and they wind up paying because they enjoy the service.
Speaker 2:Yeah. Wonder if people underrate world models because they look and feel today often like video games, and so they don't understand kind of the significance. And so, yeah, would love to understand. Yeah.
Speaker 9:You're you're so right. I think people underrate world models because we haven't had world models. So it's not people's problem. It's that the technology is really hard. It's the next frontier of AI.
Speaker 9:And and like I said, this is the first time a generative three d world model is available to everybody. And humanity has only known one world that which is the three d physical world. But now suddenly, we are in a multi universe multiverse situation because of this technology. So who will use it? I agree with you, actually.
Speaker 9:You know, just the sheer joy of the immersive experience for for the sake of enjoyment itself is really fun. I I was just talking to a user earlier today about the VR button. You know? We on our product, click on the VR part button. It takes you to if you have a headset, you can just purely enjoy the immersive experiences and, of course, add some favorite music of yours.
Speaker 9:That will be even better. But dialing all the way to professional use, there is a a lot of professional use cases. If you go on our website, we have a page called MarbleLabs Yeah. Where we show creators from VFX, from game developer, developing world, from design world, architecture, from robotic simulation, even clinical research, which I personally never thought about, are are already finding use cases. So it's very horizontal.
Speaker 9:But I think creativity and simulation are going to be two very large areas that people will will find this Mhmm. Really useful and superpowering.
Speaker 1:Okay. Help me understand tool use in the world model context. So there was a moment where the the large language models, the transformer based GPT three, GPT four, those models were getting really good at math, and they were basically just memorizing math. And you could just ask them, what's a 100 plus 50? And it would just tell you one fifty, and it was sort of learning math.
Speaker 1:And then at a certain point, it broke down, and it couldn't do really complex math just in the actual weights. And so the solution was to teach it to write Python and give it a Python REPL and let it write some code. And then you get the perfectly accurate math when you need that from the not just the LLM weights, but the actual model, the experience. And so what I'm interested in is that I've seen, I've seen evidence from Genie and your model and world models generally. There's this idea of persistence and the base model getting good enough that if I go up and I paint the wall and I come back later, the paint's there.
Speaker 1:The model remembers this. Maybe gravity. There's all these things that are simulated. But at a certain level, it feels like if I need an inventory in my game, maybe we should just use a database. And so I'm wondering where you see tool use coming in to layer on top versus your where where you think you're on, like, a scaling law where if you just keep working on the base underlying model, you will get all of that functionality for free.
Speaker 9:Yeah. Great question. So I I wanna answer your question in two different ways because you you ask a very important question technically, which is the scaling law of of Yeah. These models. But then you also ask the really important question of the tool use.
Speaker 9:Right? On the scaling law side, three d generative world or or just world model in general is actually a a earlier technology than language models.
Speaker 1:So Okay.
Speaker 9:We're seeing budding signs of scaling law, but but this is a interplay between model architecture as well as data. So what I can say right now is we're absolutely seeing budding signs of it. Mhmm. But it's not the the the curve hasn't gotten to the point where we see LLMs, you know, yet. Yeah.
Speaker 9:So which makes this technology really, really exciting and and being at the forefront of it, we really do have the best three d generative world model is is exciting. Yeah. On the tool use side, this is where I find it fascinating. I think when it comes to the usage or the use cases of world model, there's a lot of professional use cases, whether we're talking about VFX, you know, for movie industry or or game developers. And when it comes to professional use cases, I personally really believe that superpowering creators and developers is very important.
Speaker 9:That means it needs to give them the sense of control and and agency. You know? If if if you try our model and product, there is an option just prompting and and result out. And sometimes it's a slot machine, but it's it's it's setting to be a pretty good slot machine.
Speaker 1:I love a slot machine.
Speaker 9:Yeah. And that's great. Right?
Speaker 1:It's amazing.
Speaker 9:But as a creator, in your mind's eye, there's actually so much nuance. There's so much story in your mind, so much so much you wanna express, whether it's for a game or for a movie, for a story, for for even, like, trying to get the robot to do train the robot. So we actually put a lot of thought in using native AI capabilities to allow the the the users or the customers to engage in the editing and controllable creative loop. So if you're prompting something and you don't like the the wall color here Yeah. We actually allow you to say, we'll change the wall color from green to purple or say, add this object Yeah.
Speaker 9:Or say, I wanna expand here or allow you to stitch together the worlds that you see or allow you to actually give a three d layout
Speaker 1:Yeah.
Speaker 9:So that you you can put the couch where it is. So so this is very important, and this is the tooling side of it. Right? It gives the controllability and agency to the human collaborator.
Speaker 1:Yeah. You you can go.
Speaker 9:By the way, my team told me I have to put this on now.
Speaker 2:There we go. Oh.
Speaker 9:Yeah. Thank you. You're such a
Speaker 1:sweet truck.
Speaker 2:Love it.
Speaker 1:You're doing fantastic. Love it. That.
Speaker 2:Yeah. What what kind of progress, can we expect from World Labs on the next two, three years? Like, how what what are your kind of ambitions in terms of just general progress
Speaker 9:Oh my god. Model. Two, three years. I I think we need to two, three years is a long time. I things are moving so fast.
Speaker 9:Spatial intelligence is so horizontal, and it's a platform. I do envision that Marble, our product, is a platform that can empower creativity simulation. And and I I think we're gonna see a sea change in multiple use cases on the gaming side, on the VFX side
Speaker 4:Mhmm.
Speaker 9:On the metaverse side, on the robotic simulation side, on design side. All these are really I wouldn't say it's it's almost ripe for changes, and we we're seeing that level of excitement from many, many u users now. What
Speaker 2:what game developers or platforms do you think will be most quick to adopt, world models? Because it feels like Feels like like Roblox I I'm sure you've chatted with them. Like, Roblox should be jumping on this because it could be something that any of their users could get a lot of value from immediately, speed up that creative process. But I can think of any and some of the visuals we've shown on the screen, I'm just like, wish that I had World Labs when I was playing first person shooter games as a kid because you could just generate infinite maps for the games that you're playing.
Speaker 1:You're watching this, and you're like, yeah. The the the environments look beautiful. I just wish I had a assault rifle in this game, and they were bad guys.
Speaker 9:Yes. And if you look at our page on MarbleLabs, you there are, you know, shooting Yeah.
Speaker 6:Shoot games.
Speaker 9:Examples already. So Yeah. I don't know. I I I I think I think that the the the sky is the limit Mhmm. Literally.
Speaker 9:Of course, I think what's exciting in this Gen AI era is that a lot of a lot of just creators and technologists, many of them are individual developers or indie, you know, studios and and teams, small teams, are really jumping in really fast. And and general AI models like ours really lowers the bar of entry for many of these many of these use cases. So we
Speaker 2:we're
Speaker 9:we're also to be honest, we're also talking to bigger teams. I I'm actually very pleasantly surprised by the the level of enthusiasm from bigger teams as well.
Speaker 1:The team's the team's going crazy. They lot of fun. They're actually playing
Speaker 2:Is it is possible that we're in a we're in a WorldLabs model Simulation. Simulation at this very moment? Have you
Speaker 9:Sure. Yeah.
Speaker 1:I'm glad After this time travel.
Speaker 9:Generated this way.
Speaker 1:Getting back to some
Speaker 2:The model the model is getting really good.
Speaker 1:Yeah. I I I would love to know your thoughts on, market structure and how, things might play out because I I've been completely convinced of your vision for how where we are on this technology, how early we are, and and what's going to happen over the next few years is, like, just the I don't wanna call them easy wins, but, like, the logical play out the scale, and you get somewhere really exciting. But I'm interested in the market dynamics. So, in in chat, in LLM, we saw sort of a somewhat of a monopoly, you know, emerge, a clear winner in consumer chat knowledge retrieval with OpenAI's ChatGPT, of course. Now other firms are obviously working on that and competing.
Speaker 1:Then in the enterprise, you have more of an oligopoly maybe emerging between Anthropic, Gemini, and and OpenAI's API. There's obviously a long tail of other providers. Then you have the wrappers. And I'm wondering if there's gonna be something similar that happens in world models. Is is it worth thinking very hard about being the winner in consumer specifically and being not partnering with Roblox, but being the next Roblox, being the platform that wins consumer even if it means pulling back from an API business in the short term?
Speaker 1:Or is it just too soon to tell, and it might be kind of totally different? I'm just wondering how you're thinking about the long term market structure for what feels like a distinct technology from LLMs.
Speaker 9:That's a great question, actually. By and large, I think it's a little bit early to tell. So right now, like I said, we we just rolled out the first, you know, generally available publicly available model. Yeah. And we're going to focus on being a model company for for a while because science is still early.
Speaker 9:Yeah. We we we wanna move fast, and and and there is a lot to be unlocked. Yeah. I also think that I don't think we're a model in in a way that we are defining it, especially in the deep spatial intelligence way, is as consumer as a a chatbot. Mhmm.
Speaker 9:Because I think, you know, like, three d is a a representation. It's a it's a medium that is that has its own own characteristics.
Speaker 1:Mhmm.
Speaker 9:So I think that we're gonna see we're gonna see products that are going to build around these models in in in different ways. Some are for creators, some are APIs, some are for possibly even different use cases. And I'm not saying there's no consumer. I I actually think the market might surprise us for especially on the metaverse side.
Speaker 1:I think it's gonna surprise you. I I I I mean, it's gonna be a huge consumer category. Yeah. There's there's a lot of work that needs to be done to actually make it a place where people wanna hang out for hours and hours and hours. But Yes.
Speaker 1:But but I I I I do think it's gonna happen, and I think that it it's a bit of a race. But it's it's extremely exciting to even just be on the at the at the at the, at the model layer and then, you know, experiment at the application layer because
Speaker 2:We've seen
Speaker 1:model companies
Speaker 2:get in get in get into the application layer.
Speaker 1:Yes. Yes. Course. Exactly. Of course.
Speaker 1:Right? Course.
Speaker 9:Yeah. No. We're we're absolutely I mean, Marvel itself is a application Of
Speaker 1:course. Today Of course.
Speaker 9:SaaS app.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 9:But we are gonna focus on model. This is the World Labs is a deep tech company, and I think focusing on model is the right thing to do right now.
Speaker 1:Yeah. How are you thinking about fungibility between formats? It feels like there's maybe a uniquely unique value in having a world model that can export Gaussian splat, but then also export geometry, also export, just an m p four for different stages of, like, a VFX pipeline, for example, something that Hollywood might wanna do. Do you think that you need to have, like, translational models, or is there, like, one model that becomes, like, multimodal that can handle all the different formats, whether I want an an OBJ file and I want a three d, you know, point cloud or an Alembic? I can just get whatever I want from the same model, or do I need specific models to translate between them?
Speaker 9:I don't know if you have played Marble yet. We are actually multimodal. All Yes. We we are right now exporting, you know, Gaussian splats, mesh mesh colliders, m p fours Yes. And images and panels.
Speaker 1:But is that is that all from one one model that's trained, or is there, like, a translation layer between the outputs? Is there, like, one foundational truth and then like, it's like, ChatGPT is not specifically trained on there's not a Spanish version and an English version and a French version. It just learned every language when they did the big pre train. Is it the same thing, or is there actual, like, or is there a, like, a translation layer that you need to do in a series of different models?
Speaker 9:Oh, what I can say now is we are a foundation model. Model is a
Speaker 1:foundation model. Okay. Yeah. Got it. Cool.
Speaker 2:More more broadly, where do you think, AI is underhyped, and where do you think it's overhyped? Oh.
Speaker 9:Oh, that's a spicy question. Whole tomato is underhyped.
Speaker 6:There we
Speaker 2:go. Yeah. Talk your bug.
Speaker 1:Just talk your own bug. I love it. I agree, though. I completely agree. I think this is a deeply underhyped category.
Speaker 10:Yeah.
Speaker 9:So so to be honest, you know, one one thing, I consider myself a scientist in my heart, and I actually really don't like hyping. Yeah. I think, you know, that's just you probably have seen me not on the hype train
Speaker 6:Mhmm.
Speaker 9:In most of these discourse. Right? So as a scientist, I think world model is underappreciated because it's so new. And in terms of overheated, I do think that Silicon Valley as a whole tend to mistaken clear vision with short distance. Mhmm.
Speaker 9:Sometimes for example, 2006, Stanford self driving car drove the first a 140 miles in the Nevada Desert for mankind self driving car. Yeah. It took twenty years for Waymo to be barely on the road as a l four, and there's still it's still so limited. Yeah. And and this is a massive amount of effort, and it's also riding on the coattail of a very mature industry, especially a hardware and then distribution and use cases and all that.
Speaker 9:So this is an example to show you. There are clear visions. For example, you know, robots that can do all kind of house chores. And and as as a mom, I'll tell you that that would be amazing. You know?
Speaker 9:Start with cleaning my bathroom.
Speaker 1:Mhmm. But
Speaker 9:but that clear vision is important, but the journey is gonna be long. It's you know, we have issues with hardware. We we still need to figure out data. The world model brain of the robots also need to improve and and and all that. So that's just an example.
Speaker 9:And and also creativity. Right? Creativity industry, which we are also engaging in. One thing I don't I don't call it a hype. I call it a misleading sentiment, which actually really bothers me is that I don't we don't wanna replace human creators.
Speaker 9:You know? Human creativity is precious. It tells the story of our species, of our culture, of our society, of our community, of each one of us. What we wanna do is to superpower and augment creators' capabilities. And sometimes the the communication of technology is a little skewed towards, oh, the model can do all the work in creativity.
Speaker 9:And I I personally really wanna highlight human creativity as as something that's so fundamental to who we are, and and AI is here to help and augment.
Speaker 1:Can you help me understand the relationship between the current AI hardware build out and your technology, your model, your business? I would imagine that you're a beneficiary because there's all these data centers. There might be some slack capacity in the future. But at the same time, I've been hearing that a lot of the, LLM, foundation model companies, are are partnering with NVIDIA to try and steer the development of the next generation of chips to be hyper optimized for LLM inference. And that might be okay for you, but it might actually take us, you know, away from something that's optimized for for what you do.
Speaker 1:And so I'm wondering if if you could just take me on a tour of what's exciting on the AI hardware build out from your perspective. Where are the risks?
Speaker 9:Yeah. So, actually, I was just in London receiving this award with both the algorithm folks as well as the hardware folks for AI. Congratulations. Yeah. So I think as as you Is that a AI generated?
Speaker 1:It's the queen no. No. It's not AI generated. I believe it is recording of an audience clapping, but Jordi triggered it from his soundboard. That is the Queen Elizabeth Prize for Engineering from King Charles himself.
Speaker 1:Congratulations. We had it here to to mention to you, but I'm glad you brought it up.
Speaker 9:Yeah. Because you're talking about hardware. Yes. Literally the room with my friend Bill and Jensen. So as you know, the the most exciting the most exciting thing for for for modern AI for the birth of modern AI is the convergence of hardware, software, and data.
Speaker 9:So so from hardware side, I think it it's it's it continues to evolve. For world modeling, especially our technology relies on rendering Mhmm. We do think we we will keep our conversation, our side of the conversation going with the chip makers. Mhmm. Because some of the our requirement, especially on the rendering side as well as on the training, the model side will be somewhat different from LLMs.
Speaker 9:And, you know, I I would love to I will, and I would love to call for the chip industry to also work with us on this on this front. What is exciting? I think that's a great question, actually. I'm trying to so I was in Middle East visiting some of the the the construction of data centers, and and and that was pretty epic seeing how how large the this Stargate data centers are are being constructed. And it really feels that we're in a different phase of industrial revolution.
Speaker 9:You know? We we never none of us lived in the days of the the steam engines, the electricity when the the scale of industrialization in that time was just multiplying for for humanity. I think we are now living in the AI industrialization era and seeing that scaling up is is is quite quite exciting.
Speaker 1:Hypothetically, last question for me. Hypothetically, if I gave you unlimited access to a one gigawatt data center, the best and brightest, the hot off the presses, the freshly installed one gigawatt data center, you know, probably billions of dollars invested in this, Would you would you run your would you do a training run? Would you would you run your, your model? Would you just scale up? Or would you say, hey.
Speaker 1:I I I would need more time to actually, advance the way we think about training, before we press Yeah.
Speaker 2:That that kind of goes
Speaker 1:the big run.
Speaker 2:Yeah. That that was gonna be my question is, like, at what point does World Labs become capital constrained? And Yeah. Are you capital constrained today?
Speaker 1:Yeah. Or is it just matter less and new ideas? There are different parts of the business that are bitter less than pilled and others that aren't. And I'm wondering, like, what what pieces are are currently on the great scaling curves?
Speaker 9:Yeah. Like I said, the scaling curve, from a model architecture point of view, we're still early. So
Speaker 1:if I
Speaker 9:have if I have one gigawatts and and and and that many chips, I I'm more likely gonna actually run some parallel models and experiments to really hole in the the the the the bet. So the so it doesn't mean we're still trading large models. It's just not at the level of today's LLMs yet. So are we capital constrained? We are capital constrained.
Speaker 9:I'm just getting
Speaker 2:on start
Speaker 1:hiding more. Okay.
Speaker 2:I wanna see. We'll we'll we'll we'll we'll we'll the gong.
Speaker 1:We're gonna hit the gong.
Speaker 2:We hate
Speaker 1:capital constraints. How much have you actually raised? How much can you do how you how many can you share?
Speaker 9:Publicly, it's known that we've raised more than 200, $40,000,000.
Speaker 2:Publicly. Let me
Speaker 9:explain why. Why did you hit the gong just now?
Speaker 2:Because we're increasing the hype.
Speaker 1:We we hit the call. We heard
Speaker 2:your capital constrained. We
Speaker 1:hate that. Yes. Yes. It's it's a good sign.
Speaker 9:It's a mutual hype. I'm wearing your hat.
Speaker 1:Yes. We appreciate that. And we appreciate you taking the time to come talk to us. Thank you so much. This is extremely exciting, extremely enlighten enlightening.
Speaker 2:And And, yeah, we're very excited for you
Speaker 1:and your culture. Launch. And we'll talk to you soon.
Speaker 9:Yeah. Thank you, guys.
Speaker 2:Thank you. Cheers.
Speaker 1:Bye. See you soon. Before we bring in our next guest, let me tell you about ProFound. Get your brain invention in ChatGPT. Reach millions of consumers who are using AI to discover new products and brands.
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Speaker 1:you Projects linear. Road maps. Imagine. I'm loving the new stingers. Look at that.
Speaker 1:That looks fantastic. Our next guest is Scott Sanders from Forterra. He's got some big news. How are doing, Scott?
Speaker 2:What's going on?
Speaker 1:Good to see you.
Speaker 6:To see you too.
Speaker 1:First time on the show, introduce yourself. Let us know what you what you do, how you describe Forterra for those who don't know.
Speaker 6:Yeah. Mean, first first off, long time listener, first time caller.
Speaker 1:I think
Speaker 6:it was actually the subject of the original TVPN, print the internet situation.
Speaker 1:Oh, yeah.
Speaker 6:While you were printing out physical memes, and I criticized that. You criticized it?
Speaker 2:Okay. Well, came around.
Speaker 6:I came around.
Speaker 2:Was it was it like we were using up too many Were you use of paper
Speaker 1:Is this a very environmentalist that you anti printing or something? What was going on?
Speaker 6:No. I was you know, the Internet exists on your computer. What's the need to physically print it off every day?
Speaker 2:Well, I printed your new we printed I will put it out there. We printed your news here. We printed your news. Because we cared so much. We wanted to physically hold
Speaker 1:Wall Street Journal. We like Financial Times, you know. You'll come around.
Speaker 2:Should we should do like a TBPN, like, every episode we plant a tree just to make sure that, you know, we're we're replacing
Speaker 1:But I feel like you I feel like we're kindred spirits. You you work on physical things. We we work in in physical in the physical realm. Of course, there is a software element to everything that both of us do. But, give us the update on on on what you're building because, it does touch the physical realm.
Speaker 1:Correct?
Speaker 6:That is that is true. We do we do build hardware.
Speaker 1:Okay.
Speaker 6:Yeah. We, we announced a $238,000,000 Woah. Series c today. I think there's a sound effect that happened.
Speaker 2:There we go.
Speaker 1:Congratulations. There
Speaker 2:we go. Massive. Fantastic.
Speaker 6:Yeah. But we're we're building distributed systems for defense starting from the ground up. Mhmm. You know, we feel the warfighter, you know, you need drones, you need maritime capabilities. There's great companies building that.
Speaker 6:Yep. But we're focused on building stuff that primarily goes on vehicles because at the end of the day, you know, try not to walk into combat if at all possible. And we want to be able to equip those war fighters with technology and distributed compute at the tactical edge that enables vehicles to be self driving, act as nodes and relays, launch things like loader ammunitions, put radars into place to, you know, detect aircraft or detect enemy shipping, and then put, you know, anything from cruise missiles to anti ship ballistic missiles in the back so that we can deter our enemies from invading countries and want them to invade.
Speaker 1:Yeah. My my mental model for this stuff is, a little a little hazy. Maybe you can help clean it up. I I feel like there's there's usually, like, one company that does just autonomy. There might be another that's doing, some sort of battlefield tactical mapping, some awareness things.
Speaker 1:It sounds like you're doing multiple. How how do you actually interface with the other the other touch points? I mean, if if, who who do you need to integrate with since some people might be familiar with maybe what Palantir builds or what Andrew has built on the, on the operating system level? How how like, what what can you give me some concrete examples of, like, groups that you're working with or technologies or platforms that you're building on? Like, what's the what's the wheelhouse case study for Fortero?
Speaker 2:Yeah. And on on top of that, I feel like the challenge from a product roadmap standpoint or product planning standpoint is you have to understand what are the systems that we have in place in our armed forces today, and then how the battlefield is actually changing. Mhmm. Because we've heard from other people on the show that, you know, a lot of the equipment that we have might not be relevant in a world where the frontline is is just drone on drone action.
Speaker 6:Yeah. I think one of the best examples of doing this is actually with one of our partners, Raytheon, where we or in this case, Chaos in that quick little snippet. Yeah. Where with Raytheon, we and Oshkosh, we integrated our edge compute platform and our self driving software to take a traditionally manned vehicle and make it unmanned. So one, by putting the edge compute on self driving vehicles, you're enabling other algorithms and other platforms to run on top of them.
Speaker 6:So we think about the ecosystem as a partnership approach where we're not gonna make everything that a warfighter needs. In fact, no defense company, defense tech or otherwise can do that. Mhmm. And so we open up our architecture and our system so that a Palantir can run at the tactical edge, not on a giant server rack somewhere. Or in the case of the the small multipurpose equipment transports that you're looking at, we put chaos's long range, by static radar system on it to detect drones.
Speaker 6:And our, you know, future integrations with those guys will enable them to utilize our compute and our autonomy later. We don't care who's doing the c two. We obviously do our own because you kinda have to. But if that's Andrew's Lattice or Palantir's Gaia or smart system. We're very open to that, and we've broken up our system in a way that enables the user to sort of make the decision of what capability they want for each different application layer and not wrapping it all into one holistic platform unless that's what the the end user and the customer wanna do.
Speaker 2:What was, yours or the team's reaction to, Pete Hegsef's speech last Friday? They, we had Catherine Boyle from Andreessen on talking about how Hagsteth was basically making a case that it was it Cheney made back in like 2001? Mhmm. So these are basically, reforms that have been people have been asking for for a long time, but we haven't been able to actually deliver.
Speaker 6:Yeah. We were we were lucky enough to to be at that event. And, you know, defense tech reform is people is a thing people have been talking about since before defense tech was a thing.
Speaker 3:You
Speaker 6:know, the acquisition system has become extremely complicated and, I think, difficult to work with for many companies. And it's, you know, to have a secretary of war coming out and saying, like, look, this is a this is an actual problem. Right? Like, the the rate limiting step on getting technology to operators is very rarely whether there's the technology that exists that can solve the problem. It's can it work its way through the prototyping in a production phases and get in get into scale production with a with an end user.
Speaker 6:And that's been very hard. Palantir has been at this for twenty years. Andrew's been at this since 2017. And definitely not gonna do that math in public, although it'd be quite easy to do. Yeah.
Speaker 7:I'm math guy.
Speaker 2:A growth guy.
Speaker 1:Growth guy. That's amazing. Okay. Speaking of growth, where where how how is the company growing? I mean, we we we've texted about this.
Speaker 1:It it's all SBIRs. Right?
Speaker 6:Yeah. Just all SBIRs all day long. Actually, no. Too big for SBIRs now, which is great. Yeah.
Speaker 6:We're about about 550 people total. Yeah. And so, you know, we're not still not that big in defense tech or defense world, still relatively small. Yeah. Trying to be a scrappy startup and, you know, work with not only legacy primes who build incredible systems.
Speaker 6:Right? There's no one in defense tech building eight by eight twenty five thousand pound armored vehicles that
Speaker 7:can go head to head with,
Speaker 6:you know, major land forces across Europe.
Speaker 7:Sure.
Speaker 6:There's only a couple of small startups that are starting to do the missile systems that we wanna put on the back of these platforms. Sure. But our approach is we open up and enable our architecture to work with nearly anyone to deliver that that capability to tactical edge. We really just feel like humans being the blunting force of combat is a pretty bad idea. And we have probably 20% veterans at Forterra, a lot of us feel very strongly and very passionately that I would much rather have a robot make first contact with the enemy or be the platform that is a meeting a large signature on the battlefield.
Speaker 6:Something firing a missile, firing a howitzer, moving a radar. Mhmm. So the platform is inevitably targeted. It's not a human that's getting targeted. It's a machine.
Speaker 6:And we're trying to change that dynamic, you know, one platform, one program at a time.
Speaker 1:Well, thank you so much for coming on the show, and thank you to all the veterans. It was Veterans Day yesterday. Right? Thanks, everybody, for your service. Yeah.
Speaker 1:And, congratulations on all the progress, and congratulations on the series c.
Speaker 2:And next time you come on, we will, not print out your news. We'll just go in blind.
Speaker 1:Yeah. We'll just because
Speaker 2:we don't know how to use computers.
Speaker 6:As as long as the next time I'm in at 10:30 at night, I'm I'll be stoked.
Speaker 2:Wait. Are you in are you in Lisbon right now? Were you guys at Web Summit?
Speaker 6:Josh is at Web Summit. I'm in Paris, at Tech Talk. I'm in with some customers.
Speaker 1:So Okay. Cool. Awesome.
Speaker 2:Yeah. Alright.
Speaker 1:Well Yeah. We can coordinate better on the time.
Speaker 2:Congrats to the whole team on on the progress.
Speaker 1:Yeah. Awesome. We'll
Speaker 3:see you soon.
Speaker 1:We'll talk to you soon. Have a good day.
Speaker 2:See you.
Speaker 1:Numeralnumeral.com, not numeralhq.com anymore. Numeral.com. It's sales tax and autopilot. Spend less than five minutes per month on sales tax compliance. Our next guest is Jamie Alaire from Circle.
Speaker 1:Just had earnings. Welcome to the show, Jamie. How are you doing? Good to see having him.
Speaker 13:I'm great. Good to see you guys.
Speaker 2:Welcome back. Fantastic. Welcome back. Thank you.
Speaker 1:Give us the rundown. What's the latest in your world?
Speaker 13:Yeah. Well, this morning, we announced our q three earnings.
Speaker 8:Mhmm.
Speaker 13:It was a tremendous quarter. We saw USDC grow a 108%
Speaker 1:Wow.
Speaker 13:Year on year, which is fantastic. The amount of activity happening on chain with USDC Mhmm. Grew about 600% year over year to $9,600,000,000,000 of on chain activity That with
Speaker 2:might biggest gong for that. I think that's the biggest Gong ever. Maybe we've hit the Gong for various countries' GDPs.
Speaker 1:Might have hit for a GDP once, but that's it. The only thing that's
Speaker 2:volume. Triggered
Speaker 1:That is yeah. That is remarkable. That's a lot. Of course, that's the nature of these networks.
Speaker 13:Yeah. Lot lot of other great stuff. I mean, we we we we launched something called CPN, which is an on chain money movement payment network Mhmm. Earlier this year. That that is growing very fast.
Speaker 13:Dozens of financial institutions coming on that network. It's already gotten to an annualized payment volume of about $3,400,000,000 Key though, just from a financials perspective, we saw adjusted EBITDA grow 78 to $166,000,000 in the quarter. That's a 57% adjusted EBITDA margin, which is about seven thirty basis point expansion. And so strong performance on that as well. And then I think really importantly, we recently launched Arc into Testnet.
Speaker 13:And Arc is a new layer on blockchain network that Circle has been building into the market. We had over 100 major companies, major banks, payment system operators like Visa and Mastercard, major AI companies, major exchanges, e commerce companies, gig economy companies, all these working with us, collaborating us to deliver Arc. And we also announced this morning that we're exploring a token, a native token for Arc network, which is an exciting development for us as well. And so we're seeing a lot of activity in the space. We had the Genius Act passed recently, and so we're also just starting to see more and more major institutions, major financial firms, payments companies getting in the game and collaborating with us and building products with us as well.
Speaker 1:Can you tell me anything about the Anthropic, relationship? It it there's this very interesting concept of, like, using stablecoins to power agents in There's the that. And then there's also just like Anthropic might need to pay someone internationally. Can you give me any guidance on like where we are on that?
Speaker 13:Yes. I mean, look, a couple of things on that. I think the first is that, you know, we've been working alongside others on these standards for agentic payments using
Speaker 1:which does not have MCP. Does not have data points yet, but it should be maybe in v two or something that you
Speaker 13:Well, yeah. And and standards like x four zero two and Google's agent to payment standard. We're collaborating on both of those. Cool. We're we're releasing tools for those.
Speaker 13:Yep. And, you know, we actually have a number of like agent developer tools, companies that are that are supporting these things as well. And so that's actually happening. It's actually one of the key design centers for the Arc blockchain network that we're building, which is we envision a world where over time the velocity of money increases and more and more of our economic activity is machine intermediated. And that machine intermediation is going to be in these new computing networks, these provable trusted computing networks, which we call blockchain networks.
Speaker 13:And AI agents will become, we believe, the primary intermediary that's intermediating activity on these. And so we see that as sort of if you look at these trends converging over the coming several years, we see these kind of compounding each other. And so yes, we were excited to have Anthropic as a collaborating partner for us with ARC. And I think we had a number of other AI focused firms there too. And I think it just speaks to the fact that we need a substrate.
Speaker 13:We need an execution environment that AI agents can use that are trustworthy, provable. And look, AI agents need to be able to make a $05 transaction for consuming some tokens or a $50 transaction. It needs to work anywhere in the world where software works, and that's what these new networks are really good at. And so there's not a payment system that's ever really been built to support that. And I think something like USDC and then these new networks like ARC Network and standards like X402 and others really help with that a lot.
Speaker 2:Talk about just like the strategy of going full stack and how you guys are positioned against competition at the different levels. You guys are an issuer. You're build you know, you're, building your own network. You're gonna have a native token. There's ton there's, nowadays, it feels like there's probably a new stablecoin that gets created every second of every day.
Speaker 2:Right? Not not just a net new of an existing stablecoin, but an entirely new stable. You guys are, you know, well positioned in a lot of ways, but I guess talk about how you view your your competitive position as a variety of other networks come online and new stablecoins come online.
Speaker 13:Yes, absolutely. I mean, I think the first, just start with the core, which is our stablecoin network has really strong network effects. We have liquidity network effects globally. We have infrastructure network effects just in terms of where we're plugged in around the world. There's tens of thousands of products and services that integrate to our network, which really drives the developer flywheels.
Speaker 13:And so we're in a very strong position there. And we're taking that and we're expanding kind of down the stack and up the stack. And I think in our view, if you think about where we are in the evolution of this, the global economic system is enormous. And we expect more and more of the economic system to, as I said, become machine intermediated on these new kind of economic operating systems. And we're still at the front edge of that.
Speaker 13:We have a market that really grew out of speculation on cryptocurrencies, and now we're seeing like more and more of actual financial contracts, actual trade flows, payments flows, treasury activities, investment products, lending products. All of this is actually starting to come over, but we're at the front edge of that. And so I think our view is that there are going to be some very significant scaled Internet platform companies built out of this transformation over the next five, ten, fifteen years. We think that these can be as big or bigger than prior Internet platform companies that were built around centers of gravity around search or social or mobile or cloud or e commerce, we think that that's going to take place. And we think that we're in a very good position to provide really great infrastructure across those different layers.
Speaker 13:And I think if you look at what we've been able to do with Arc, even just getting to Testnet, the range of major firms from around the world that touch literally over $100,000,000,000,000 of assets, whether those are custodians, exchanges, clearinghouses, payment systems, etcetera, We're putting forward a model that we think can work for scaled mainstream adoption. And so that's an infrastructure problem. And we're doing it in a way where we can build a distributed network of distributed stakeholder participation, distributed governance and kind of bring that into the world. And obviously, that's what we're considering as we evaluate the design of an ARC token as well. And then on the other hand, we definitely see an application layer emerging on top of these platforms.
Speaker 13:And I think likewise, we're still in the early stages of the application layers being built. We are definitely taking a crack at part of that by building a payment utility, this CPN as a payment application, but we're designing it in a way where other financial institutions can use it, benefit from it and generate revenue from it. We're not trying to compete with them as well. And so at every layer of what we do, we try and build kind of market neutrality and interoperability at the core, and that has served us well. I mean one of the things we've pointed out this morning in the earnings call is we actually run, as of October, the largest cross chain interoperability protocol in the world.
Speaker 13:CCTP, which is Circle's cross chain transfer protocol, in October was greater than 50% of all cross chain traffic accounting for all assets across all blockchains. And that's really significant. We really want to be part of the solution to interoperability while we build at these different layers of the stack.
Speaker 2:We've had a number of conversations about the local regulatory environment, how that's changing recently. Internationally? Last time you were on the show, we talked about how, you know, part of Circle's edge is having offices in a, you know, in a bunch of different countries and being set up to navigate what, what will ultimately be unique regulatory environments in a in a a bunch of different countries?
Speaker 13:Well, amazing it's actually. Since the Genius Act, we've seen almost every major government in the world accelerating plans around building local rules around stablecoins. We've seen, for example, Hong Kong in August went effective with their new rules. We're seeing regimes working on this from major emerging markets to some of the largest developed markets like Korea, which is accelerating their efforts around stablecoin rules, U. K.
Speaker 13:Accelerating their efforts. So now everyone is sort of getting behind this model of private sector, bank and nonbank issued stablecoins, clear supervision, usually supervision by the central banks, just like we're going to be overseen by the national bank regulator here in The United States. And so that kind of standard is cascading around the world. And I think also a lot of these regulators are looking at ways to support kind of reciprocity or kind of consistency as well. And so I think that's really important as we build infrastructure that we know that it will work in all these different places around the world.
Speaker 13:So I would say that the activity for us internationally has really, really accelerated and you'll see a lot more as well as we go forward. But I think The US is actually really providing leadership right now on this in this whole area and the rest of the world is taking notice and following. It's kind of a national competitiveness issue as well.
Speaker 1:Fantastic. Well, congratulations
Speaker 2:Makes sense.
Speaker 1:On a successful earning season. We'd love to have you back on the show soon. And we'll Thanks, guys.
Speaker 2:Catch up.
Speaker 1:Have a great rest of week. Likewise. We'll talk to soon.
Speaker 2:Cheers. Yeah. Bye bye.
Speaker 1:Goodbye. Before we bring in our next guest from the newsroom waiting room, let me tell you about Fin dot ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on g two. Our next guest is Vlad. He's building lighter. We have some big news on the funding side.
Speaker 1:How you doing, Vlad? Good Hey, guys.
Speaker 2:To meet you. Welcome to the show.
Speaker 1:Welcome to the show.
Speaker 2:What's happening?
Speaker 1:How are Can you hear me? Yes. We can hear you. Please introduce yourself. Introduce the company, for those who aren't familiar.
Speaker 8:Awesome. Yeah. Good to be here. Actually, I think you had, my former cofounder Scott on a couple weeks ago who's now working on Cognition.
Speaker 1:Oh, Scott. Of course. We've had him on a bunch of times. Woah.
Speaker 2:TBPN hall of fame.
Speaker 1:We TBPN is made possible by Cognition, the makers of DevOp. Oh, really? The AI software engineer. We we we love doing ad reads for Cognition. We're the other makers of DevRel.
Speaker 1:Oh, nice. Nice. Nice.
Speaker 2:Yeah. No. We're not here to promote you and Leiter. Yes.
Speaker 8:Exactly. So I'm Vlad. I'm founder and CEO of Leiter, which is decentralized exchange built on top of Ethereum. We can talk more about, you know, how we built it and and why, but, you know, we're we've we launched in January and kind of had pretty strong growth this year with our main net, and we actually had a public launch in, you know, October 1. But, yeah.
Speaker 8:And I guess, yeah, before later, I worked on a lunch club, you know, with Scott. And prior to that, I I guess I'm kind of like like, I'm not a crypto guy that got into finance. I'm more like a finance guy who took a detour to AI and then, you know, got into DeFi.
Speaker 1:Yeah. Talk about the some of the some of the some of the choices that you've made. Like like, why Ethereum compared to other, other chains? Why decentralized exchange? Like like, of the of the technical decisions that you made, I feel like we've talked to a lot of folks who have picked out different quadrants if we do a two by two quadrant or something like that.
Speaker 8:Yeah.
Speaker 1:You've clearly landed in one particular piece, one particular spot on the market map. How would you describe the trade offs that you've made, and then why did you make those trade offs?
Speaker 8:Awesome. Yeah. That's that's a great question. And we actually started working on lighter right around three years ago. Mhmm.
Speaker 8:So, like, mid to late twenty two is when we were thinking through that idea maze as it were. So it's interesting to, like, look back now. And the, you know, the genesis of the idea, right, was that we were thinking about digital assets. Right? Like, digital assets have been around for ten, fifteen years.
Speaker 8:Right? Like, they've been traded a lot. I mean but most of them represent some kind of blockchain or or, you know, decentralized protocol or, like, rails for the future of finance. But the weird thing was that, like, 99% of the activity of how they're traded actually did not use the rails of the stuff that these assets are building. Right?
Speaker 8:Like Oh, it's it's actually trading in a centralized way. And, like, centralized exchanges have you know, there's some good ones. Right? You know, they they you know, I I think some of them definitely have provided value to customers, but, like, at at the basic premise, right, like, a centralized exchange doesn't actually use the blockchain at its core to verify what's going on. And and, like, in some cases, it's actually worse than TradFi.
Speaker 8:Right? Like, at least in TradFi, have, you know, regulations and the legal system to fall back on if something goes wrong.
Speaker 1:Like Yeah.
Speaker 8:Right? Like and we send the thing is that, like, actually, almost three years to the day is when FTX collapsed. And we we were looking at that when when we're thinking about how to build lighter, and we thought, okay. Well, now people will get it and, like, volume will move away from centralized exchanges Mhmm. After, like, one of the big ones failed, and that didn't happen.
Speaker 8:So what that taught us was that, actually, like, the decentralized exchanges that existed at the time, like, their product market fit was so bad that people would rather trade somewhere where there's, like, a one in six chance of the whole thing being a fraud than, like, using the decentralized products. And so right. So then we thought, okay. Well, we this is something we we should be part of the solution to. Right?
Speaker 8:And so for us, it's like, okay. What we wanna achieve is low cost, low latency, secure, verifiable, and composable.
Speaker 2:Mhmm.
Speaker 8:And, like, the first three of those are pretty self explanatory, but, you know, what does verifiable mean? Right? It it it means that everything that happens, there's a cryptographic proof that it happened fairly and correctly. And, like, why is that important? Well, if you ask the reverse question, like, what if what if it's not verifiable?
Speaker 8:Well, that means there's some part of the system where you're just like, trust me, bro, which is kind of, again, defeats the even if there's one part like that, you know, like, the whole thing could be, you know, manipulated or, you know, corrupted. Right? So that's a problem. Right? And then composable is also important because at the end of the day, we're we're not just trying to build a sandbox for people to speculate on.
Speaker 8:We wanna build something that's composable with the rest of DeFi, whether it's lending, stablecoins, you know, staking, you know, prediction markets, all this other stuff so that it can kind of all work together in smart contracts. So, anyway, so we had those five goals. And going back to your question, like so Ethereum was the obvious choice for the security layer. Right? For it to be secure, we had a pretty strong view that the layer one that's by far the most secure out of things you can build on is Ethereum.
Speaker 8:Another you know, we you know, Solana has built a great l one as well and others have too, but, you know, Ethereum is, like, very secure. It's been stable for a very long time. So that was pretty clear to us. And, yeah, we can dive into how we achieved other goals. But as far as, like, why decentralized and why Ethereum, I think that that gets into those points.
Speaker 1:I I I don't know if we have enough time to go super deep into more of the technical side. I'm more interested to hear about how you met Ken Griffin, honestly. So could you tell me the story of, of of the Ken Griffin, recruitment? I would love to know, like, how did he even know to reach out to you? What what happened there?
Speaker 1:Tell me the full story. Yeah. Because I think that's fascinating.
Speaker 8:Yeah. Yeah. So and by the way, I'm, you know, also based in Miami now Yeah. For the last five years. So, you know, not only did I learn a lot of stuff from Ken about finance and business, but also that South Florida is a good area.
Speaker 2:That location. Yeah. Yeah. But,
Speaker 8:you know, so so the I I guess, you know, the thing with my time at Citadel and you know, the the so I was 18 when I finished Harvard and actually even
Speaker 2:Right.
Speaker 7:While a student.
Speaker 2:Let's give it up for finishing Harvard at 18.
Speaker 1:Congratulations.
Speaker 2:Continue. What
Speaker 8:what what's that what's that account? Like, VCs congratulating themselves?
Speaker 2:Or No. We're congratulating you. You just said a fact. You just said fact.
Speaker 8:You just said a fact. But yeah. So and, actually, like, even at school, I did some trading and was working on kind of a side project with two friends around options. And so, you know, so I was doing that, and that didn't quite get off the ground. But I got to know the team at Citadel through, you know, essentially, like, research firms.
Speaker 8:So, you know, it's not
Speaker 1:Oh, wow.
Speaker 8:You know, it's not like Ken personally gave me a call or something, but I got to know the team, and they wanted me to join. And then kind of towards the end of the process, Ken got involved and spent a bunch of time with me, you know, to tell me more about what their high level goals are at Citadel and their strategy and why it would be a good fit for me and kind of making sure that I'm comfortable joining them. And I guess without going into too much details, I mean, he made it a very attractive proposition for me and was pretty involved,
Speaker 12:you know,
Speaker 8:the first couple of weeks, especially of my work there. And, yeah. You know, he's, to this day, someone I thoroughly look up to. And
Speaker 1:Yeah. There I I just hope that he's gonna lineage here.
Speaker 5:Sorry?
Speaker 1:Hey. There's just fascinating lineage here, obviously. Ken Griffin went to Harvard, was trading in his dorm room. It took him a couple extra he didn't he didn't graduate at 18, so he sort of mocked him on that front. But but then, of course, he had a deep relationship with Robinhood, and Robinhood Markets came in and invested in this round.
Speaker 1:And so there's a whole bunch of, like, full circle moments to
Speaker 2:be next. I I did wanna quickly ask if you think that the industry fully learned its lesson from FTX. Cause I feel like there's I've seen some chatter over the last few weeks around various exchanges saying like, no, your your funds are frozen, but don't don't worry. We're we're we're working on it. And it's, you know, maybe sending some alarm bells.
Speaker 8:Right. So October 10 was an interesting moment, for the space, I think, that actually DeFi kind of as a whole worked well. Right? Whether it's Aave or Morpho, all those all those, protocols. And, I I think our competitors, you know, handled those market moves in different ways, but I think all of them in the context of DeFi work the way they were supposed to work.
Speaker 8:You know, some of the centralized exchanges, I think, maybe again, like, the problem there, right, is, like, lack of transparency. You don't really know like, did they actually liquidate their customers correctly or not? Like, maybe they did. Right? Like, maybe maybe everything worked exactly as expected.
Speaker 8:But if it didn't, there would be no way we would even know that. And so I I don't I'm not aware of any cases of specific wrongdoing by centralized exchanges in that cycle. But, again, with the lack of transparency, there was no way I would know that. And, you know, we we do know there have been some, like, blowups of kind of smaller hedge funds, like, chain hedge funds. Right?
Speaker 8:And what ultimately caused those is unclear. But the one thing I will say is I remember after FTX, there was this whole thing about, like, okay. Let's even centralize exchanges. Let's like, let's make them more verifiable and, like, prove reserves. Now, of course, like, what does that mean?
Speaker 8:Because, like, you can prove assets, but how do you prove liabilities? But still, like, there's some push to do that. And I remember Vitalik had some ideas on how to do that, and Binance was looking into it. And then, like, I think someone asked CZ about it, and he was just like, well, you know, Vitalik is very technical. Some of the stuff is, like, too complex or something like that.
Speaker 8:Right? So I I don't I don't know if the centralized exchanges have really truly learned their lessons on that front, but, you know, did anything particularly egregious happen that I know of October 10? Like, I can't say that. But, again, the, you know, the whole point is that, you know, it's supposed to be transparent and trustless.
Speaker 5:Mhmm.
Speaker 2:Well said. Well, glad you're glad you're building what you're building.
Speaker 1:Yeah. Well, thank you so much for coming on the show, and congratulations on the massive fundraise. Very excited to continue following the story as you continue to build this company. But have a great rest of your day. Awesome.
Speaker 1:Hope you enjoy Awesome. Thanks for having me,
Speaker 8:guys. Miami.
Speaker 2:Cheers. Come back soon.
Speaker 1:Have a great
Speaker 8:rest of
Speaker 7:your day.
Speaker 3:Thanks. See
Speaker 1:you. Let me tell you about Adio customer relationship magic magic. Adio is the AI native CRM that builds scales and grows your company to the next level. Can get started for free. Also, I'm gonna tell you about 8sleep.com.
Speaker 1:Jordy's traveling, but I got a 91. Woah. Hours, fifty five minutes.
Speaker 2:I'll give it to you.
Speaker 1:Let's go. And our next guest is Andrew D'Souza from D'Souza from Bordie. He's in the restroom waiting room.
Speaker 2:Now he's on
Speaker 1:TVP and Ultramanca.
Speaker 2:What's happening?
Speaker 12:How are you?
Speaker 2:Great. Great to meet, and, welcome to the show. Kick it off maybe with a quick intro on yourself, background, and then let's talk about Bordy.
Speaker 12:Yeah. Yeah. So I'm the founder founder, CEO, creator of Bordy, the AI super connector. Bordy is helping, you know, helping founders meet investors primarily, but connecting people for, you know, business and economic reasons. We've had we launched a program about two weeks ago to try and get a 100 founders to help close the round.
Speaker 12:We have 5,000 founders raising $16,000,000,000 sign up and 600 investors, I think, about a trillion dollars of capital who
Speaker 2:Some size.
Speaker 12:Get act so, yeah, we've got I think we probably got about 10% of the active fundraising happening right now among founders that are that is are working through Boardy, which is pretty exciting.
Speaker 2:Awesome. So, yeah, I guess I guess yeah. I guess I guess immediate thought is with products like this, like, one of the one of the challenges is just like balancing the network, basically. And with InVenture, it's oftentimes the the companies that have the most demand for their equity or or the companies that are that are, you know, maybe performing the best oftentimes don't need intros. You know, they're in the position of, like, saying no.
Speaker 2:How are you thinking about kind of, like, maintaining quality on the platform when you're a business and you wanna be as as big as you can possibly be? And I imagine you you have a strategy there.
Speaker 12:Yeah. I think it's it's that was something that I was worried about. This is the reason why we didn't start with the idea of connecting founders and investors. It just sort of happened organically, that this was this was the activity that was taking place. I've been shocked at the caliber of founders that have come in looking for help.
Speaker 12:And I think as a CEO, as a founder, like, your job is to create demand for your shares. It doesn't matter whether you're Elon or, you know, Roy Lee or, you know, a YC founder.
Speaker 2:Like Yeah.
Speaker 12:That's your job, and you'll take all the help you can get. Most founders only raise capital, you know, two or three times in their life and and help having someone that can help you navigate that, get the right introductions. I think there are probably 50 or 100 founders in the world. I think this is the reason why we talk about the sort of AI bubble right now. So 50 or a 100 founders in the world that every investor is chasing.
Speaker 12:Right? Because that's, you know, that's the hype cycle. There's probably thousands of founders who have incredible business. We're we're talking to them. They have incredible businesses, incredible metrics, and they're just you know, they just haven't they're not based in Silicon Valley or they're not, you know, straight down the middle pattern recognition.
Speaker 1:They're not based at all. I'm back.
Speaker 6:They may not be based at all.
Speaker 1:Stupid joke.
Speaker 2:Good luck good luck raising if you're not based these days.
Speaker 1:That's a good you're
Speaker 2:not based. No. Yeah. That that makes total sense. What like, where where does this go from here?
Speaker 2:This feels like a good early wedge, but, you know, hard hard to build a bit a billion dollar business yourself just within just within venture. So I imagine you have a number of other kind of pathways or or use cases for the for the kind of introduction engine or or I don't know how you
Speaker 12:Yeah. Yeah. We've built Boardia as like an AI board member. So what is the most important meeting for the CEO to take at any time? Right?
Speaker 12:Is it a customer meeting? Are they hiring an executive? Are they trying to get on, you know, a podcast? Mhmm. Are they you know, like, is it a is it a big partnership?
Speaker 12:Is it corp dev? It happens to be that fundraising ends up being a a high urgency place where you can build a great relationship, But I think of Bordea as an economy. Mhmm. You know, Bordea every time you connect two people, there's some economic opportunity that that is unlocked. There's some latent economic potential.
Speaker 12:And
Speaker 1:We can financialize it. Yeah. I love it. It's actually it's actually what you're doing. It's true.
Speaker 1:It's it's actually good.
Speaker 2:Okay. Can I give can I give feedback to board if I get an intro and I and I and I take the call and I'm like, can I be like, yo, Bordy, that never again? Never again. Because we I mean, everyone's gotten an intro from somebody and and you're like, wait. Why'd you make that intro?
Speaker 2:Like, I jumped on. They didn't know who I was.
Speaker 1:Am I on with the venture fund that loves firing CEOs? Don't introduce me to them. Introduce me to the friendly ones.
Speaker 2:Yeah. So how do you how do you because because I can imagine that's, like, one way that you you wanna make sure you wanna get to the point where the entire industry is is onboarding. Like, every single founder, every single investor. But as an investor, for an investor to, like, not churn, they need to be able to, give feedback and say, like, hey. Like, this didn't meet this didn't meet my bar for a meeting.
Speaker 2:I don't you know, if you you know, and if you keep sending people meetings or intros that don't meet their bar, eventually, they'll just say, like, I'm I'm gonna, you know, log off.
Speaker 12:Yeah. Yeah. Absolutely. So so this is, this is one of the things we take a lot of we we take feedback. Boardy has goodwill with people.
Speaker 12:Right? So his idea the same way that if anytime I make an introduction, I'm gambling goodwill. Mhmm. I mean, I make a bad introduction, burn some goodwill. If I make a great introduction, maybe I've gained some goodwill.
Speaker 12:And you're sort of doing that calculation at any given time. The version of if you just sign up, you you're talking to a low latency, relatively low cost on on the phone, on WhatsApp. You're just talking to, you know, the the standard version of Boardy. What we tried to do we had this experiment. We were running this fundraising thing.
Speaker 12:We said, what if you could remove the constraints of latency and cost? What if I could spend a 100 times of tokens?
Speaker 1:What if
Speaker 12:we could let Bordie run for thirty minutes trying to find the per perfect introduction and position you in the perfect way? Can I get better results? And that's kinda what we're seeing. So now we've had five and Bordie's talked to 5,000 founders that are raising in 600 investors in the last two weeks. He has now picked the top 100 that he knows he can help that are gonna be in demand from the investors in his network, and we put them into a shared Slack channel with us and Bordie and the founder, And and we've we've now got those shared Slack channels with with people who are like, hey.
Speaker 12:Here's some investors. What do you think? Get feedback from the founders. We're doing the same thing with investors. So then the investors are sort of signing up and saying, here's a few founders that are raising.
Speaker 12:We think they'd fit your thesis, and Boardy's just learning. So you're like, actually, that's not a good fit. Or I've talked to this founder more like this, less like this. And over the course of a couple weeks, we really dial it in on both sides, and we just make sure that you're spending time. And it's less about capital allocations.
Speaker 12:It's more about, like, how are you allocating your time and attention onto the deals that are actually likely to materialize? As an investor, the deals are gonna win. As founder, the found the the investors are actually gonna give you a term sheet
Speaker 7:and fund.
Speaker 1:Mhmm.
Speaker 2:That makes sense. What what are some other kind of, like like, types of work that you expect Boardy to do in the future?
Speaker 12:Yeah. We're already starting to see a lot in sort of corporate, you know, enterprise sales and biz dev and partnerships. There are there's it starts with the corporate venture capital arms. So we're getting a ton of corporate venture capital funds coming in, and now we're talking to their innovation teams. It's the same thing.
Speaker 12:It's like, hey. Look. I gotta I gotta stay abreast of what's happening in my industry. Mhmm. And it's almost impossible.
Speaker 12:Right? Maybe I'll watch TPPN and see who comes on there, but, like, that's almost too late. Right? It's actually, like, I've gotta I've gotta see who's starting a company, you know, who's just being funded, who who is going who do I want to be who who do I wanna be tracking? And so Bordi is starting to help with that and making those introductions.
Speaker 12:Hiring is another one that I think is interesting, you know, especially when people are passive. They're not actively looking. They don't wanna take a bunch of recruiter calls, but they'll talk to board. Like, I might start a company, but if there's a really great startup out there, I might join the team. And so those kind of conversations are are are quite interesting as well.
Speaker 12:But it's like, whatever you call your board member, whatever whatever introduction is gonna move the needle for you that is worth the time of the CEO, that's what we wanna work on.
Speaker 2:That makes a lot of sense. I'm
Speaker 1:looking for a board member who can take me on a track day. That's that's my only thing I wanna get out of them. Take me to the track. Put me in a race car. It better not have a passenger seat, and then get out of the way because I'm building on my own.
Speaker 1:Thank you so much. Yeah.
Speaker 5:Yeah. I mean, that that's
Speaker 1:a good challenge. Development. Maybe once you get into the really high tier of boardy spend, you do a track day.
Speaker 12:Well, you know, so Nico Rosberg is a big boardy user.
Speaker 1:No way.
Speaker 2:There we go.
Speaker 1:Oh, he's been on the show. A big
Speaker 12:big time boardy user. That's awesome. And, and so he he could probably make it happen
Speaker 1:for you. Very cool. I love it.
Speaker 2:I like it. I like it. It's one of those things that in in kind of working on when when you when you describe it of just like a place that a founder can go to just get help with their business. It's not it's surprisingly not something that not some nobody's, you know, made that pitch on on the show to date, which is surprising because that's pretty much, you know, feels like very valuable to a lot of the companies that are are coming on.
Speaker 1:Yeah. Fantastic. Well, thank you so much for taking the time to come talk to us. Congratulations on all the progress. Yeah.
Speaker 2:Great. Great for you. We'll we'll try out the product and Yeah. Yeah. Need to find, like, a guest.
Speaker 1:We're raising. Yeah. That'd great.
Speaker 2:There you go. Love to
Speaker 12:give give it a shot.
Speaker 1:Awesome. A good one. We'll talk to you soon. Cheers, Andrew. Goodbye.
Speaker 1:Let me tell you about public.com investing for those who take it seriously. They got multi asset investing, industry leading yields. They're trusted by millions. I'm also gonna tell you about AdQuick, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising.
Speaker 1:Only AdQuick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe. Our next guest is Parag Agarwal from parallel.ai. Welcome to the show, Parag. How you doing? Hey.
Speaker 1:Hey.
Speaker 4:Hey. Hey. Good to see you next.
Speaker 2:What's so much fanfare in Are you, are you at a newcomer event right now?
Speaker 4:I am.
Speaker 1:Oh, yeah.
Speaker 12:You got
Speaker 1:the step of behind you. Cerebral Pepro AI Summit. Congratulations. What'd you announce on stage? What are you announcing here on TVPN?
Speaker 4:I announced on stage that we just raised series a. We raised a $100,000,000 from some of the best investors. Yeah.
Speaker 2:Let's give it up for the best investors. 740,000,000. Index ventures. There we go.
Speaker 1:Got some spark capital participation. We love to see it. Coastal is in there first round. Terade, wow. Really?
Speaker 1:Really? Murderers row. Mamoun Ekaliner is joining the board. That's exciting. That's exciting.
Speaker 2:What? Kinda looking like the Figma Yeah. Figma board.
Speaker 1:We got a we got a good crew here. I like this. Yeah. So so so take me through take me through the actual company progress, the progress that unlocked this $100,000,000 series a. Obviously, there was some demand.
Speaker 1:There was some research progress. What was the shape of the data points that went into the ultimate deck that got this across the finish lines?
Speaker 4:So with our first time two years ago, we started with this sort of pie in the sky idea that agents are gonna use the web, and they're gonna use them a lot. Yeah. And we need to build new infrastructure for them.
Speaker 1:Yeah.
Speaker 4:There weren't any agents around in that moment. Right? None of them was using the web when we started.
Speaker 2:Were trying. Some of them were trying.
Speaker 4:Yes. And this year, like, everything's changed. Like, everyone's now building an agent
Speaker 1:Mhmm.
Speaker 4:And every agent wants to connect with those. So the market just came alive, I wanna say, nine months ago. The most, like, frontier customers started doing its last years Mhmm. And became our design partners. This year, the number of customers, the number of queries, the diversity of work, like, there's quoting agents using us.
Speaker 4:Yeah. There's people in sales, building agents using us, finance, risk, compliance, insurance, health care, people doing scientific research agents
Speaker 1:Yeah.
Speaker 4:People in pharma and biotech, figuring out how to use web search APIs to build agents. So, like, it's completely different world this year as it relates to agents agents using the web.
Speaker 2:So, yeah, to to make it super simple, people are using parallel web systems within, you know, maybe a SaaS provider is integrating parallel into their products so that if somebody's doing research, let's say, a CRM on a customer, you guys can help, you know, them use agents to do a web search and, fill fill in that CRM with data. That would be one example.
Speaker 4:That is a perfect example. You see this white ostment. Our products are APIs. Our users are agents. Our customers are people building agents.
Speaker 4:Right? So if someone builds an agent to say, okay. I'm going to take your CRM and add very interesting data to it so that you can take better actions. Mhmm. That agent, the data, will call our APIs in order to search the web, in order to pull content from the web, in order to get the highest quality information to be able to fill up that database.
Speaker 1:React to this post from Jim Kramer. He says, when I use ChatGPT or the others, I can tell quickly that they won't pay up for good sources. We all know this. So what's the point? They need to start paying newspapers and stop using bogus sources we would never use ourselves.
Speaker 1:We need integrity, not volume. There's a bunch of ways you could read that, but my take was there is a data quality opportunity, especially in the enterprise, especially where willingness to pay is maybe really high. And so how are you thinking about, making sure that Parallel and the deep research API has the highest quality data forever?
Speaker 9:I perhaps,
Speaker 4:I've been partly is it Jim Kramer? Mhmm. I don't always. The so there are two things there. How do you get the highest quality DP search results?
Speaker 4:Mhmm. That is a lot of things. High quality data, authoritative data is a part of it. Mhmm. And then there's a lot of other technology we're building on top, whether it be at the ranking layer, the retrieval layer, the crawling layer, the reasoning layer Mhmm.
Speaker 4:To get you higher quality PCGs. I I ask you to try our deep research product and compare it to OpenAI's, and we win nine times out of 10. Mhmm. So I want everyone to try that and tell us if I'm wrong. So go to the data question.
Speaker 4:I think there are deals being done by people. The the world I don't wanna live in is only Google and OpenAI's agents have access to some data. And most publishers don't get to make those deals, and most other agents don't get to have that access. That is the core mission of our business. We started with building products for AI customers.
Speaker 4:We've recently started figuring out what the incentives are for publishers to allow AI just to use them, which will include payments Mhmm. Which will include other forms of value, which is transactions, and which include distribution. Mhmm. Right? Which would be which are the things that people care about on the web.
Speaker 4:I've sort of having run Twitter before, I understand the concerns of someone publishing on the web and business models around ads are likely to evolve, and that's part of the reason we end up doing this company because we think we have an opinion or two to bring to life shares.
Speaker 2:Do large revenue multiples scare you?
Speaker 4:No. Good. No. As long as you know what you're doing. There we go.
Speaker 1:It's confidence. I love it.
Speaker 2:Love the confidence. Gotta be confident. Congratulations. But, yeah, I I I love how the the even even since the last your last appearance, you know, the vision, and opportunity, just seems bigger and bigger. Totally.
Speaker 1:Yeah. Makes a ton of sense.
Speaker 4:Thanks for having me.
Speaker 2:Yeah. It's great to have you back, at this rate. I'm sure, come back on the end of the year.
Speaker 1:Weeks and then make it around.
Speaker 4:I'm gonna ship a product in a couple of weeks and be right back.
Speaker 1:Fantastic.
Speaker 2:Head us up then.
Speaker 1:Congratulations. We'll talk to you soon, Prague. Have good one.
Speaker 4:Thanks for having me. Bye.
Speaker 1:Let me tell you about bezel. Get bezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. I wanna do a lightning round.
Speaker 1:We got a bunch of posts. We're gonna try and go through them as fast as possible. First, Brian Johnson does did confirm. This is from Brian Gorell. Brian Johnson confirms he was not one shotted by a recent magic mushroom trip.
Speaker 1:You said if Brian Johnson comes out of this five gram
Speaker 2:He's trip not okay.
Speaker 1:Says, yeah. We're gonna conquer death. We're still on. Then he's certainly a true believer. What do you say?
Speaker 1:He replied to TBPN's post. He said, we're gonna conquer death. So Brian Johnson is feeling good, looking good, back in the timeline, not one shot, I suppose.
Speaker 2:One of the founders of Chad IDE says, he quoted my post and said, really great post. However, it doesn't apply to Chad IDE. We're five steps ahead. Different plane of thinking. But really great posts are reposting for visibility.
Speaker 2:Nice post, little bro.
Speaker 1:Nice post, little bro. I I I I wanna say
Speaker 2:I think that's a pretty hilarious
Speaker 1:I I I did I did sneak a peek at your post, during, during the show, and, I don't think you got called unk as bad as as I I expected. You you made it sound like you were getting destroyed. You did very well. You got over a thousand likes, and, people are like, oh, you're taking shots at Gary Ten. No.
Speaker 1:Gary Ten chimed in. He said, good points. Big thanks. A lot of people a lot of people did identify that you were rage baiting the rage baiters, which is funny.
Speaker 2:I had to use their own tricks against them.
Speaker 1:Yeah. You did. I think in this case, you used the tricks for good, and I and I think it's a great post, and and I enjoy. But, you know, maybe we have to have the you know, there's always there's always room for follow-up. Maybe we'll talk to Gary Tan later this week.
Speaker 1:We'll get him on the show, think about how he's thinking about the future of YC. Maybe we'll have the founder of Chad Labs, Chad IDE, whatever it is.
Speaker 2:Yeah. So we we The
Speaker 1:lab labs. We will also be demoing the product at some point. I believe we'll be getting a preview of what the actual product is. If there's something awesome behind the scenes, we're gonna tell you what that is. Let's also
Speaker 2:just responding being like, yep. Actually, it doesn't apply to us. We're five steps ahead.
Speaker 1:Or five steps ahead. Mean, that is just a complete trump card. How do you respond to that? How how do you Levels. See, I think he wins.
Speaker 1:Much like Wander. Find your happy place. Book a Wander with inspiring views. Hotel great amenities. Dreamy beds.
Speaker 1:Top tier cleaning and twenty four seven concierge service. It's a vacation home, but better. What is this? La lamp. Introducing a La lamp, says Shavir Sharkey Shakery, an emotional and expressive robot to reshape our attachment to set to technology.
Speaker 1:Is this a CGI vibe real, or is this a real product? Can we put do do you have any idea? Who put this in the in the show notes?
Speaker 3:I put it in
Speaker 1:the show. Okay. Do you think this is real?
Speaker 2:It looks real. CGI.
Speaker 3:Yeah. It looks real.
Speaker 1:Looks real? Okay. It looks pretty cool. I I wonder wait. Wait.
Speaker 1:So would you buy this? What what is the what is the value of this? It's obviously very cute, very cool. It's the Pixar lamp, but it should exist. But why what does it do?
Speaker 3:I don't it's pretty cool. I don't know.
Speaker 1:It's weird. It's It just feels cool.
Speaker 3:It's a very cool thing to have. There was Put
Speaker 1:a speaker on
Speaker 7:it.
Speaker 3:I I'm like 90% sure it's real. There was a Apple research paper that came out like, I don't know, six months ago. Sure. And it was all about, like, expressive robots. Sure.
Speaker 3:And they had a bunch of, like, demos and stuff on how they could build this stuff. Yeah. It looks very exciting.
Speaker 1:Well, the website is lelamp.com. You can preorder it. The lamp, like, follows around your cursor. Pretty cool website. Let's see what the checkout is.
Speaker 1:It's only $50? Wow. Okay. This is this is very cool. I I have been, delight baited.
Speaker 1:I have not been rage baited by this. I think this is a great great launch. And and in other news, Jim Kramer is posting about about quantum computing. He says, Rigetti, what an opportunity. Ka ching.
Speaker 1:Buy IBM. What?
Speaker 2:I How does that even mean?
Speaker 1:Kramer posts, like a crazy amount. I mean, he's got 2,300,000 followers. He's posting like every half hour. Like, the guy's a machine. He he's gonna be on the show in a couple weeks.
Speaker 1:We're very excited
Speaker 7:about it.
Speaker 2:I cannot wait.
Speaker 1:It's gonna be a lot of fun. Anyway, that's our show for today.
Speaker 2:I do not tolerate Kramer slander.
Speaker 1:Yeah. No. No.
Speaker 2:I think he
Speaker 1:He's he's entertaining. He's insightful. He's controversial. He's a total package. We love Kramer here.
Speaker 1:He's great. Woah. Woah. Woah. There is a review from Andre Karpathy.
Speaker 1:I missed this one. Oh, there's a couple posts that I missed, actually. Andre Carpathi says, I took delivery of a beautiful shiny new h w four Tesla Model x today. I like this hardware for. He cares about the chip inside that thing.
Speaker 1:His dad doesn't care about what the light bar on the front is or the door handles or whether the doors go up. He Andre Carpathi cares about the the GPU inside. So I immediately took it out for an FSD test drive a bit like I used to do almost daily for five years. Basically, I'm amazed. It drives really, really well, really smooth, confident, noticeably better than what I'm used to on h w three, my previous car, and Elon's eons and and and eons ahead of the version I remember driving up Highway 280 on my first day at Tesla nine years ago where I had to intervene every time the road mildly curved or sloped.
Speaker 1:Note, this is v 13. My car hasn't been offered the latest v 14 yet. On the highway, I felt like a passenger in some super high-tech Maglev train pod. The car is locked in the center of the lane while I'm looking out from the Model X's higher vantage point and its panoramic front window listening to the incredible sound system or chatting with Grok on city streets. The car casually handled a number of tricky scenarios that I remember losing sleep over just a few years ago.
Speaker 1:It negotiated incoming cars in tight lanes. It gracefully went around construction and temporary in lane stationary cars. It correctly timed tricky left turns with incoming traffic from both sides. It's a glowing review glowing review of, of Tesla self driving from the man who basically invented it and started the whole started the whole process. Right?
Speaker 1:I mean, I don't if he started it, but he was he was increment he was he was instrumental in the development of it. So maybe go on
Speaker 2:We also missed it, but OpenAI released GPT 5.1 Mhmm. Rolling out to all users this week. Yeah. Nir says ChatGPT is officially in its Fiji phase now if you're wondering why the upgrade doesn't come with benchmarks. Have fun.
Speaker 3:Yeah. No benchmarks. So, yes. There's two models. There's 5.1 thinking and instant.
Speaker 3:So if you go to, like, the actual, like, model router on, like, chattypd.com or whatever, the only, like there's g p t five, which you you can do pro, which is, like, the super long, almost like a deep deep research product. Then the rest of them are are just the 5.1 thinking. But yeah, no no benchmarks or like any kind of really technical report. I in the blog post, it was a lot about the like personality of the model. She also released a separate blog post on her substack.
Speaker 3:And she there there was some mention of, like, they're definitely they tried to address kind of the four o, one shotting stuff. They're like, okay. We're we're definitely aware that there are some problems with peep like a very small amount of people becoming very, you know, addicted to the models. Mhmm. But, yeah, nothing like very technical out of this.
Speaker 2:They're like, it was only 1% of our user base.
Speaker 1:It wasn't 1%.
Speaker 2:Like point 01%. It was 10,000,000 people that wanna kill Roon. People. Was not 10%. Roon, up your security.
Speaker 3:Yes. Please do.
Speaker 2:Anyways, we actually have to go over to Base which is a conference hosted by my dear friend Will Coffield. Yeah. So we gotta head over there. We're gonna have a little chat.
Speaker 1:That'll be fun. More podcasting.
Speaker 2:Another two hours of offline podcasting. We love it. Cannot wait cannot wait to be back tomorrow. Have a great rest
Speaker 1:Leave us five stars on Apple Podcasts and Spotify.
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