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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.
Imagine you're a founder and you get an email from Daniel Penney.
Speaker 2:Welcome to Technology Brothers, the number one live show in tech. It is Wednesday, 02/05/2025. We are breaking down a whole bunch of earnings. It's earning season, boys. Earnings season on technology
Speaker 1:already know that.
Speaker 2:Is presented by public.com. Install the app. It's the best way to trade, all sorts of financial assets. It's the super app. And so we're we're proud to be partnered with Public, and we're gonna take you through three, amazing earnings reports, really.
Speaker 2:Palantir, Google, and Apple will kick off with those. Then we'll take you on a deep dive of TMU since we mentioned them yesterday, and then we will move on to some segments in the timeline like we always do. Jordy, anything else? Any breaking news we gotta cover before we dive into Palantir?
Speaker 1:There's always breaking news, John, but we have three straight hours to just keep breaking and scooping, until we're too tired to keep going, which usually doesn't have usually, we get cut off. So
Speaker 2:maybe Yeah. Yeah. You know? I I was watching some of our clips, and it still gets me every time. I'm like, oh, we got some breaking news here, and it's from, like, three days ago.
Speaker 2:We broke this on the show.
Speaker 1:It's not we've always said it's not breaking news till the technology brothers, you know, share it. So
Speaker 2:That is true. That is true. Well, let's start off with some memes, some posts on acts all about Palantir. They had a banger earnings, and the stock soared more than 23% as AI powers, strong earnings, and guidance. Kramer keeps posting.
Speaker 2:Jim Kramer known for famously calling the top at the wrong time all the time has become a bit of a meme, but he says total heavyweight, exceptional call, awesome company. Kramer keeps posting about it, and it won't go down. And so Mads Capital is quoting, talking about me driving to work knowing the Palantir is now at a hundred, and it's just a, a hilarious video of Mads Mikkelsen crying in the car because clearly he doesn't own enough Palantir, I guess.
Speaker 1:So one thing people don't really realize it unless you follow Kramer. If you actually scroll his feed, he's very he's almost schizophrenic with his predictions. One day, he's saying, this this, you know, this way over price has gotta drop. The next day, he's like, I'm super long. So he's just engagement farming constantly.
Speaker 1:And so that's the lens he needed to view Kramer for, which just means almost any company on Earth, you're gonna be able to find him bull posting and bear posting. And so go scroll his feed. It's quite entertaining. But for every one post of his that goes, like, really viral on sort of teapot and tech, tech x, he's got, you know, 10 others about the same company. So, anyways, excited to get into Palantir.
Speaker 1:They they were dominating the timeline a lot.
Speaker 2:And I wanted to I wanted to kick it off with a great throwback post. This is from praying for exits. One of my favorite super random things is that the Wu Tang Clan were some of the earliest Palantir supporters. And they Raekwon DeChef posted in 2010 when basically no one knew about Palantir. It was a private company.
Speaker 2:It hadn't even raised, I think, all that much money. And he says, just got to Palantir Technologies headquarters. If you don't know about them, Google them.
Speaker 1:And I love that.
Speaker 2:And somehow they linked up with, Alex Karp, I guess, and the Palantir crew and came through and had a good time with the Palantir team. But it really speaks to just the the the the bizarre culture at Palantir that they have, you know, rappers coming through, and then they are employing former senators and, you know, very important people in the military, and and just kind of doing it all. And so doctor Karp was pictured, in The Middle East. To, Maktoum bin Mohammed said technology and innovation are key drivers of future economic growth. Today, I met with doctor Alexander c Karp, cofounder and chief executive officer at Palantir Technologies, to explore opportunities for accelerating the adoption of artificial intelligence.
Speaker 2:And, you know, he's just in a room of absolute killers out in The Middle East. And as a reminder, this is from Eliano over at Palantir, good friend of the show. We are less than two weeks away from the release of doctor Karp's book. So if you haven't pre ordered it already, go check it out. It's
Speaker 1:all copy on your desk there, John?
Speaker 2:I got the copy, and, I also have the audio book, pre ordered. And so you can go on, Audible right now and use one of the credits if you have that, and, or you can order the hard copy. It should be out in a few weeks. And, we're looking forward to reviewing that once it goes live. Here's a little bit of a quote from the earnings call.
Speaker 2:CTO, Shyam Sankar, good friend of the show, on DeepSeek and and disagreeing with OpenAI CEO Sam Altman. We are at war with China. We are in an AI arms race, says Shyam. I got into a disagreement with Sam Altman about this at the Senate AI Summit over a year ago. There is an opposing view that we can all get along and cooperate on these things.
Speaker 2:I'm sure the other side feels quite different re realizing their IP has been stolen. How many times are we going to believe that anchors dragged across the sea that cut undersea cables? Maybe it's espionage. China knows they're at war. We kind of equivocate on it as a peace loving nation.
Speaker 2:The engineering on r one is exquisite. The optimizations they've done are really impressive. We have to wake up with respect for our adversary and realize that we are competing, but they absolutely did steal a lot of that through distillation of the models, and perhaps they stole even more. We have to realize that the AI race is winner take all, and it's going to be a whole nation, a whole of nation effort that extends well beyond the DOD in order for us to win as a nation. And so I loved I loved that quote, and I thought it was important to highlight that I mean, these Palantir, earnings calls are like the Super Bowl for defense tech companies.
Speaker 2:Like, you need to be watching these because there's so much gold and so many good, good And then
Speaker 1:even carp's energy on the stream was insane.
Speaker 2:I mean Oh, yeah.
Speaker 1:Obviously, they were putting up big numbers, but, the entire the entire vibe coming out of I mean, if your stock goes on that much of a rip, it's hard not to have everybody be be pretty excited about what's going on. But Alyona's been on a tear. Carp's been on a tear. Yeah. And and they're clearly having a lot of fun.
Speaker 1:And they have this amazing dynamic with their, with their shareholders. Right? It it doesn't feel like they're lecturing. It does they have made it feel like everybody's a part of this bigger, you know, broader important movement. And in many ways, a part of the, you know, supporting The US's efforts to, you know, further its national interest.
Speaker 2:Yeah. A couple weeks ago, I was at the Palantir headquarters, and they have all these memes that go out in slack and then get printed and put on the walls. And, my favorite one was the grim Reaper meme. And it was like, Palantir will never be a $10,000,000,000 stock. Palantir will never be bigger than Lockheed.
Speaker 2:Palantir will never be worth a hundred dollars a share. And they've just blown through every, you know, it could never happen moment. And carp just loves it. He brings this amazing energy to the, to the office. He has all these crazy, I don't even know like what I can say or not, but he, he like just works out constantly in the office.
Speaker 2:He carries these kettlebells around. He believes that if you if you can carry your body weight in, split between two kettlebells, and walk around for sixty seconds, I think, That's like an extremely strong health metric, and so everyone should be able to do that. And he brings us just like
Speaker 1:Farmer farmer carries. Yeah.
Speaker 2:Farmer carries. Yeah. Yeah. And so, on the next
Speaker 1:And to and small note Yep. And relevant to our friends and partners over at Bezel. Okay. He has fantastic taste in watches. He
Speaker 2:wears the
Speaker 1:beautiful, Aquanaut with the orange band. We worked with the Bezel team to identify it last time he was, presenting with it, and it it's hard to miss. It's a beautiful it's a beautiful, beautiful piece. But, anyways,
Speaker 2:onto onto the report. Yeah. And so, Eliano posted, are you not entertained? Carp, after earnings looking fantastic, you know, hilarious red beanie and, and ski gear.
Speaker 1:Somebody somebody bought the c c sent the CTO a beanie sort of?
Speaker 2:Yeah. Yeah. Yeah. Purple.
Speaker 1:Yeah.
Speaker 2:I'm not exactly sure why, but we'll see.
Speaker 1:I'm into a joke.
Speaker 2:Well well, let's move on to Palantir earnings. So just to give you the high level, this is for, q one, fiscal year twenty twenty five. So looking back the last three months, revenue surged 36% year over year with record operating margins. They achieved GAAP profit profitability and delivered bold guidance, 31% revenue growth forecast for 2025. The stock price spiked 20% following the earnings announcement.
Speaker 2:And so they've been growing both on the, government side and the commercial side. For people that don't I mean, there's this meme, like, no one knows what Palantir does. It's really not that complicated. You know, it is an enterprise software as a service company that does data aggregation and data analytics. They don't actually own data.
Speaker 2:You go to Palantir, and you store your data with them. Snowflake is an is a competitor.
Speaker 1:And one and one thing to note, them the fact that they're projecting this level of growth at a time when pretty much every government contractor is under attack Oh, yeah. Due to Doge's activities just shows that, they themselves as well as the market believe what they're doing is critical enough that it's not at risk of, Doge and Elon's team coming in and saying, hey. Why are we spending $10,000,000 a year for this database? Like, we could rebuild this, you know, in in a few weeks.
Speaker 2:Yeah. And and you see that on the commercial side. Boeing has been a public, client of Palantir. They put all of the parts data into Palantir, and then, or maybe it's Airbus. I there there's a few different companies, but you can think about it like your your manufacturing airplanes.
Speaker 2:There's a whole bunch of pieces that you need to track. How many do we have in inventory? What's broken? What's not? How do we move that through the system?
Speaker 2:And that actually drives a lot of of of efficiency. So that's why, Palantir has been, like, a valuable product for the government because it actually drives efficiency. And Elon, posted just recently on x, like, doctor Karp is a hero. Like, I love I love Alex Karp. Like, he's great, because he's very much aligned with the mission of Doge and what Luke Ferritor is doing over there, understanding the data and making better decisions.
Speaker 1:Yeah. It's interesting to think there's there's a world where Elon would have been a cofounder of Palantir. Like, it wouldn't doesn't even sound that crazy given
Speaker 2:Totally.
Speaker 1:You know, at the stage at which Palantir was started, but there was obviously a lot of different activity happening at that time.
Speaker 2:Yeah. And so, you you you need to think about Palantir as, two main revenue streams, government contracts and commercial deals. On the government side, they grew 45% year over year driven by defense and intelligence projects, which they often can't talk about, but they can just give you the high level how they're doing financially. And this has provided a stable recurring revenue base and strategic credibility. Everyone knows, oh, if it's good enough for the CIA or the government, it's probably good enough for my organization.
Speaker 2:And then on the commercial deals, US commercial revenue jumped 64% year over year, even bigger than the government contracts, and they are focused on ultra high value, large clients across finance, health care, manufacturing, etcetera, which I mentioned. And they have a strategy of fewer deeper relationships that enhances stickiness and upsell potential. So Palantir is this famous example of, forward deployed engineers. They actually send Palantir employees into an organization, help them understand how to implement the software, how to get all the data into one Palantir installation, and then be able to drive all the analytics and mapping over it. One of the greatest examples just to concretize how Palantir works since a lot of people think it's so pretty ex abstract is, you can think back during the Iraq war, and and and when the troops were in Afghanistan, there were a lot of IEDs, improvised Explosive Devices.
Speaker 2:And so you wanna find the bomb maker who's making all these bombs and blowing up cars and civilians and US Troops. And so what you do is every time a bomb goes off, they inventory what they found at the bomb site. So they look and they say, okay. We found dynamite at this one. And over there, we saw we found c four.
Speaker 2:And over here, we found some other plastic explosive. And then here, we found nails. And here, they used, shrapnel from old grenades. Or here, they use land mines. And so you put all of those on a map, and pretty soon, you can see that, hey.
Speaker 2:The ones that use c four and nails, those are all clustered within a 20 mile drive of this one town. So the bomb maker that's making that type of bomb must be in that town. And so it's a very easy way where you load it all up in the database, you slice it all up, and then you can just see it visualized on a map, and that helps the, and that helps the troops figure out where the bad guys are essentially. And then there's a million other examples, but that's a very concrete one where you can imagine just dots on a map being valuable. And it's it it it doesn't sound revolutionary, but it was at the time, and it still is in many ways because there just aren't that many databases that were in house and working very well.
Speaker 2:And so, that drove a lot of early adoption. And now Palantir is used for all sorts of things. It's this big company, but that's an
Speaker 1:And part of the bowl case is that, Salesforce, you know, another enterprise, software provider, they, you know, they have an incredible distribution engine, very broad product that that, you know, many large companies and and SMBs build on top of. But, they have less of a moat in the sense that somebody else can say, hey. I'm gonna build a really specialized CRM for this one opportunity and then just start selling into those customers. Yep. Whereas Palantir has, you know, almost two decades now of of work in Washington building these distribution channels, getting contracts, earning trust.
Speaker 1:And so when you think about the, you know, moat for the business, it's just much more meaningful than your typical SaaS provider that that has to go through someone like Vanta and get, you know, approval. SOC two compliance is just like an entirely new level, on this side.
Speaker 2:Yeah. Totally. One of the reasons the stock jumped this year was because I believe Palantir received the highest credential, approval from the government on FedRAMP, I believe. So Yeah. They're able to integrate at the deepest level with the government.
Speaker 2:And so in terms of geopolitical and and where they're pulling their revenue from globally, The US market continues to dominate, with rapid adoption in both government and commercial segments. But, Europe is now 13% of revenue, but this revenue only grew 4% year over year due to regulatory and cultural challenges. Leadership warns that Europe's European institutions risk falling behind in the AI revolution. This is something we've talked a lot about. They're so privacy concerned and so, sclerotic with how they move through things that they're not adopting the latest technologies, and that's something we certainly hope changes in Europe in the coming years.
Speaker 2:And then, Palantir's also been expanding into other territories. They have an active initiative in in Japan. It's a $50,000,000 deal with a major insurer, and they've made strategic moves in The Middle East and Asia Pacific like that image that we saw earlier. And so, they, firmly avoid business with not with adversarial nations like China and Russia aligning with a pro western stance. And Karp has been taught has been beating the drum on, the on being a pro western company for a very, very long time way before it was cool.
Speaker 2:And, and he's built that upon, you know, all of his philosophical research in Germany and and, and, you know, all all the different, philosophical thoughts that he's processed to understand what will create the ultimate ultimate amount of peace in the world. And so, he's he's built his business around that and obviously foregone a lot of revenue that could have been, hey. Yeah. Let's sell to China. Why not?
Speaker 2:You know? And I'm sure a lot of Totally. Competitors would say, yeah. Sure. It's a global market.
Speaker 2:Let's just go for it.
Speaker 1:It's very hard to be American and hate Palantir. You gotta do some crazy, you know, crazy gymnast mental gymnastics to get to that point.
Speaker 2:Yep. And so, they are really well, like like, the the the big question with Palantir is I think at the beginning of the year, it was, I remember maybe last year, it was around, like, $20.23, 20 20 4. It was at, like, $10 a share. Now it's at a hundred, something like that. It's been a 10 bagger for a ton of people, and a lot of that's been around the AI narrative that it's more important than ever to aggregate data for AI analysis and then also work with proprietary data for AI systems that isn't just the open web.
Speaker 2:And so, the the model layer, as you've mentioned, is commoditizing in some ways, but the model the models that are built on private repositories of company data or government data, those certainly aren't commoditizing, and that data is not being moved into, large scale open source LLMs anytime soon. And so they've, positioned strategically into advanced data and AI capabilities. They've had an emphasis on operationalizing AI by integrating it with proprietary data and workflows, and they launched the artificial intelligence platform, AIP, to enable rapid, customizable AI solutions. This has had a customer impact. Examples include reducing underwriting process processing time from two weeks to three hours for insurance companies, and accelerating digital transformation across sectors with high switching costs.
Speaker 2:They have a unique full stack approach that differentiates Palantir from cloud giants and pure play AI firms, but they must continue continuously innovate to fend off commoditization and growing competition. But they have done a great job of building a really, really insane team of, of engineers. And it's still even I mean, the the company is over twenty years old at this point, and they're still recruiting top grads out of Yep. Top colleges. And it's, like, still a hot place to work, which is very rare.
Speaker 1:It's very I mean, it's it's harder than ever to recruit talent out of Palantir even though many of them are ambitious and would wanna join other, you know you know, similar companies or start their own company. But, many you know, given the growth of the company just over the last year, some of their packages are pretty much impossible to compete with at this point. Yeah. Just given, I I looked on public and this, exactly a year ago, the stock was at $17 a share. It's sitting over a hundred right now.
Speaker 1:So if you got a if you joined Palantir as, like, a new grad engineer and got, you know, some type of, relatively basic offer, it's now, you know, nearly five x what, what it what it initially was was slated for. So, pretty pretty incredible.
Speaker 2:Yeah. So Palantir's competitive advantage in AI comes from that interplay of data, context, and action. The company spent nearly two decades building software to integrate, clean, and model vast troves of data for complex organizations. That groundwork now seal now serves as the ideal conduit for AI. Many companies can train an AI model, but Palantir's ability to pipe the output of those models straight into decision making systems on sensitive critical data, all while handling security, privacy, and regulatory compliance is key.
Speaker 2:Palantir essentially offers out of the box an out of the box operating system for AI in the enterprise. This is not easily replicated because it requires trust and, and a track record of solving hairy data problems. As Karp bragged, Palantir had early insights years ago that AI would require this kind of infrastructure, and that foresight has now evolved from theory to fact. And this is true. You you can go back and look at even at, interviews with Peter Thiel in, like, the mid two thousands where he's talking about the vision for Palantir and the ability to to look at a vast trove of data and ideally stop the next nine eleven before it even happens.
Speaker 2:And Yep. It's this weird thing where there's always been this question of, like, what is Palantir's real impact? And it's like, well, we might not see it because if it doesn't happen, it's not gonna be news, and it's probably not even gonna
Speaker 1:be We don't want to know every single daily threat against United States. Right? In a perfect world, it doesn't hit the news. Right? That usually means something, bad happened.
Speaker 1:But, but, yeah, it it's been interesting to see people go from nobody even knowing what people being aware of the company Palantir, but not being you know, having any idea what they did. But looking back at the growth of the company over the last year, Palantir being a a a big data company supporting both the government and big corporates, it almost was a pure play AI bet because they're able to actually leverage all of that data and help their customers and clients start to understand it and then take action against it. So seems all all very obvious in hindsight. It's not not without risk. We this show is for entertainment purposes only, as you all know, but currently, they are sitting at a 552 PE ratio.
Speaker 1:So,
Speaker 2:you know,
Speaker 1:if you're if you're building a defense deck and you're raising a new round and you got a little bit of, you know, or, you know, earnings, ask for ask for the Palantir multiple. You know?
Speaker 2:For sure.
Speaker 1:It's, Yeah. It's bold, but you never know. You might get a deal then.
Speaker 2:I agree with you. I mean, it it is bold, and you're through, like, the Warren Buffett lens, but and I saw some I saw some weird meme that I didn't I didn't get a chance to screenshot, but it was somebody saying, like, oh, like like, somebody just called them the next, Salesforce or, like, they're as important as a company in Salesforce. And and they were like, this is ridiculous. Like, Salesforce, like, prints so much more profit or whatever. But when I just think about, like, the vibe of the institution, like, what Palantir is, like, it feels like as much of a force as certainly as Salesforce.
Speaker 2:And so I wouldn't be surprised if over time they catch up. And Salesforce is, I think, an extra decade older maybe. It is an older company. They've had more time to grow and scale. And, I'm I'm just super bullish on a founder led company that's still able to attract talent.
Speaker 1:And And carbs carbs energy levels right now.
Speaker 2:He's just not gonna stop.
Speaker 1:Yeah. He's just
Speaker 2:not gonna stop. And so it feels like like, yeah, there might be some meme stock dynamic, but that ultimately just lowers the cost of capital and allows him to keep building. And eventually, if things catch up, it's gonna gonna be really good, and he's going into, a pretty favorable administration for this stuff. Obviously, Elon's commented on it. Obviously, the the DOD is investing more in technology, and, all signs point to just more Palantir.
Speaker 1:Yeah. They enter they enter the Japanese market and do one deal that's worth 50,000,000. Right? Yeah. So it's like, you can easily imagine Japan, a single country, becoming a a multibillion dollar revenue line for the company.
Speaker 2:So
Speaker 1:Yep. Yep. And
Speaker 2:so a lot of it just depends on how much you how much you believe the AI story. Obviously, there's a lot of
Speaker 1:Yeah. And then there's
Speaker 2:a lot of takes it done on both sides there, but, it is it is, interesting one, and it's it's it's, there there are certainly been crazier meme stock stories told in the past.
Speaker 1:Yeah. If you look at, you know, not that we're calling Palantir meme stock even though maybe it's getting priced similar to to GameStop, but, lowering GameStop's cost of capital by it being a meme stock does nothing for America. Right? They're now in the same position, which is that everybody's buying video games online. Yep.
Speaker 1:And, yeah, maybe they become an important distribution channel for mod retro. Right? But
Speaker 2:Yep.
Speaker 1:That, you know, mod retro by itself is not necessarily gonna sustain, you know, GameStop in the long run. Right? It's just it video games have been particularly cruel to the to the retail side of that industry. So
Speaker 2:Yeah. I remember I think it was last year, maybe maybe even the year before, I, I was hanging out with Shyam Sankar, this, CTO, and and was asking him, like, kinda what what's the next goal for Palantir? And he was saying, like, well, we gotta get into the S and P 500. And I was like, man, that's that's a tall like, you're already a public company. Like, that's a big goal.
Speaker 2:I have never heard any anyone operating a company say that as the goal, and he did it.
Speaker 1:Yeah.
Speaker 2:And and and they and and that drives a ton of institutional investing, capital into the business. And a lot of those, a lot of those ETFs and funds that hold Yeah. S and P five hundred stay there for a long time as shareholders and are very they're very much in it for the long term. So,
Speaker 1:the game the game never never ends. Right? It's we gotta get, you know, we gotta go public. We gotta get break into the S and P five hundred.
Speaker 2:Yep.
Speaker 1:We gotta we gotta, you know, become a trillion dollar, you know, market cap company and then Yep. You know? So Yeah.
Speaker 2:And and and the yeah. The big story has been that, this year, Palantir became the, I think, the highest value defense company of all, bigger than Lockheed, Northrop Grumman, and and by some measures, bigger than many of them combined. And there's this question of, like, being so crazy. They're so much smaller on a revenue scale, but it's a software company, and so the margins eventually should be much higher than Yep. Okay.
Speaker 2:Yeah. You have to make yeah. Yeah. You make an aircraft, and it's really expensive, but a ton of that got eaten up in cost and and overhead. Whereas once once a once a a a SaaS system is actually installed, it can be very lucrative for a very long time.
Speaker 2:We've seen this in every software company that's IPO'd in the last twenty years, basically.
Speaker 1:Yeah. Yeah.
Speaker 2:And so let's move on to Apple's earnings. Apple reported a hundred and 20 4 billion in total revenue, up 4% year over year, and net income of 36,000,000,000, up 7% year over year. Shares rose in after hours trading despite mixed signals in key areas. And so Ben Thompson wrote a quick review of Apple's earnings, and then he asked Deep Research, OpenAI's new, research tool, to do the same twice. And, it was very interesting listening to the deep research, result.
Speaker 2:It it wasn't able to really create Ben's voice, but it did hit some of the analysis, but it was way more verbose. It was like pages and pages instead of, like, a nice little summary. So let's go through the Stratechery update and then give you some highlights on what's going on with Apple these days. So The Wall Street Journal reported, Apple's iPhone sales fell in the all important December, a sign that its artificial intelligence software has yet to kick off a new cycle of growth for its most valuable product. On Thursday, Apple reported that iPhone sales for the quarter were down nearly 1% from the year prior to 69,100,000,000.0, a miss from the 70,700,000,000.0 analysts were projecting according to FactSet.
Speaker 2:Apple's total revenue was 124,300,000,000.0, rising almost 4% from the same quarter. Debt income was, 36,000,000,000, up more than 7%. And so Apple shares rose. The company said its earnings report it it said in its earnings report that sales dropped in China by more than 11% missing the 20,000,000,000. Analysts went up to 20,000,000,000, and they only did $18.05.
Speaker 2:Apple's newly appointed chief financial officer, Kevin Peric, Peric, said that the company saw better iPhone 16 sales in markets where its new AI tools called Apple Intelligence have been launched. And so Apple Intelligence is not available in Europe, and it's not available in China. And so they're saying, hey. The only reason that we're not selling more iPhones is because our amazing Apple Intelligence isn't there, and they might get put in the truth zone here.
Speaker 1:Which is, yeah, literally insane. I don't know I don't know a single person who who enjoy who benefits from Apple intelligence other than a laugh or two here or there when it just badly summarizes something. So really, seemingly a product that that should have not been widely, you know, shipped Yeah. And just needed quite a bit more testing. So to be coming in here and saying iPhone sales are declining because we're not properly summarizing, people's tax is
Speaker 2:Yeah.
Speaker 1:Is, is crazy.
Speaker 2:Yeah. I mean, to put on the the steel helmet for a second and steel man this a little bit, there is something to be said for a lot of the advertising campaigns around the new phone have been driven and focused on Apple intelligence. And so if that feature is not available and you see that ad, even even if you've never tested it or you don't look at a review, you're just seeing the marketing, then you're like, well, I'm gonna wait until the product that they're marketing. And this was a thing that happened in The States. Like, in The US, Apple was running tons of ads around Apple Intelligence, Apple Intelligence, Apple Intelligence, and it wasn't available for months after the phone started shipping.
Speaker 2:And so you could imagine in America a lot of people saying, well, yeah, I am excited. I do wanna try that, but I'm gonna wait until they until it's actually available. Now, obviously, the tech world negative
Speaker 1:the negative word-of-mouth is is very real in the sense that people that do have access to Apple Intelligence are posting screenshots of the, you know, completely botched summaries of, of you know, which is I'm I'm sure Apple Intelligence has, you know, other features that maybe are are valuable. But,
Speaker 2:Yep. And so if we go to unusual whales, unusual whales summarizes the q one twenty five earnings for Apple. Earnings per share were at $2.40. This was a beat. They were estimated to make two thirty five.
Speaker 2:Revenue was $1.24.3. This was also a beat, and iPhone revenues were down at 69 instead of 71. And so
Speaker 1:And most importantly, down year over year. So their their their golden goose, the iPhone, is not selling as well as it was last year.
Speaker 2:It didn't fall off a cliff. If you look at, US, it's just completely flat. Like, it's a completely mature market. Everyone that has an iPhone has one. Everyone that wants one has one, and they're just continuous to selling the same amount.
Speaker 2:And so, if if you look at, what Ben says, he says, first, it's notable that that iPhone sales could be down year over year even as Apple reports both record revenue and record profits. The story of, of course, is services. It as it has been for a while now. It's striking though that services doesn't just mean record profits thanks to the higher margins, but also record revenues, thanks to the absolute number. The long run increase as a share of Apple's revenue on a trailing twelve month basis to smooth out seasonality has been relentless.
Speaker 2:And so Apple has been a tear with their services. Of course, this is like the App Store. Second, greater China's year over year revenue was down for the sixth straight quarter. Just as it has been for nine of the last 12, I graphed China's, trailing twelve month revenue, to avoid seasonality, with year over year quarterly growth. And so, revenue has been declining in China for, several quarters.
Speaker 2:The key takeaway here is that the recent decline in revenue isn't a new issue, but actually a continuation of a trend that started nearly a decade ago. The iPhone six took China by storm, but Apple and Apple built up a large user base, but it never really penetrated beyond the tier one cities. The one exception was the Huawei chip ban in 2020, which drove premium Android users to Apple. Apple has done pretty well to maintain its customer base.
Speaker 1:One thing to note, China has a is no longer adding people to its major cities. There's actually been an exodus from cities, which is a whole other issue in China right now leading to, Peter Zeihan has a good bid on, you know, basically how much oversupply there is from a from a housing standpoint in Chinese cities. And so, Apple's not gonna get the benefit of people moving to, you know, tier one cities and telling themselves, oh, I should get an iPhone now. It's just not happening anymore.
Speaker 2:Yeah. And so there's a little bit of a question here. What's missing is the long p n's to China's middle class and Apple's massive opportunity in the country that used to characterize these earning earnings calls. So Apple used to say, oh, when we hit China's middle class with our iPhones, that's when we're gonna be really ripping in China, and it just kinda never happened. Apple is hoping for a bit of a bump from government stimulus, but that's a pretty weak sauce.
Speaker 2:I love it, Ben. Get them. The reality is that China as a growth opportunity for Apple seems truly finished. The best hope for now is that revenue doesn't decline too precipitously. And then lastly, Apple's executives, including Tim Cook, mentioned a couple times that Apple had better growth where Apple intelligence had launched, and Ben is putting him in the truth zone.
Speaker 2:I'm not buying it as a real driver. Cook's framing suggests that China's growth will return when Apple intelligence arrives. I think it's more likely that China's decline was independent of Apple intelligence being there or not, but that at least it gives the company a chance to point out that non Apple intelligence countries grew less on average because they include China. In fact, Europe outgrew The US in iPhone sales, and they don't have Apple intelligence at all, with the exception of The UK for a couple weeks in December. And so, and so why why would why would why would iPhone sales grow in Europe where they don't have Apple intelligence if Apple intelligence was that important?
Speaker 2:And so it's a very, very good, it's a very good question. And I and I like that. And and then and then he drops these massive, research reports from, from OpenAI deep research, and it is a remarkable report. It it it it's great. It pulls in, you know, product segments and and deep dives and can create not just bullet points, but also tables.
Speaker 2:And it really does a good job of of analyzing it. But what he what his conclusion from all of this was was that while it was impressive, there's nothing novel in the analysis, and it only really worked. He says the case, it's also the case that the reason why the second answer is so good and insightful is precisely because I gave the model specific talking points instead of asking it to come up with its own insight. In other words, the model does a much better job of filling out a thesis than coming up with one. And so, it seems like it's it's great.
Speaker 2:Deep research is super great for, hey. I I I I I already read the report. I understand this. I have a thesis. I just need you to go and pull together all the different quotes and data that support and substantiate that thesis as opposed to really just saying, hey.
Speaker 2:Apple research report, go. You're you're you're you're not gonna get something as not And
Speaker 1:to be clear, that's the way we use it too. We use it to speed up the process of researching the show, but then ultimately, the takes are artisanal. So
Speaker 2:Exactly. Exactly. And so yeah, I mean, Ben actually talks about that where he says, in in in 2022 before chat GPT, Ben was talking about how AI will affect, publishing and just communication and the information economy. And so he's broken down, the value chain into five steps, creation, substantiation, duplication, distribution, and consumption. And so there's this evolution of the value chain where the, it all started with, when writing though unbundled consumption, increasing the number of people who could consume an idea, then the new bottleneck was duplication.
Speaker 2:And so the paint the the printing press removed the bottleneck for distribution, dramatically increasing the number of ideas that could be economically distributed. Then, the new bottleneck was distribution, which is to say the new that that was the new place to make money. Thus, the aforementioned profitability of newspapers because the printing press could copy, but then you needed to actually get it to someone. So owning a distribution line was very important. Then that was removed by the Internet because which made this made distribution free and available to anyone.
Speaker 2:And there was one final bundle, creation and substantiation of an idea. And so you have an idea. How do you actually create it? And then the Internet makes it free to distribute. It can be duplicated, obviously, through the printing press and through the Internet, and it can be suit consumed anywhere.
Speaker 2:And that is exactly what AI does. It takes the human's ideas, the creation, and substantiates them. And, obviously, this is most prominently viewed in, the AI generative image models because it would take me forever to paint a painting of a sci fi thing. But if I come up with a good prompt, I can just get it instantiated immediately. I can post it on Twitter.
Speaker 2:It's distributed. And if it's a good idea, everything else downstream is taken is completely egalitarian and taken care of. And so, it's interesting that now he has the ability to have a good take about Apple and substantiate it more quickly with AI in some ways. I don't think we will be using this point
Speaker 1:of view. One of the issues with deep research right now that that was pointed out, by some poster. I don't I don't recall their name. But they were saying that what what deep research is doing, it doesn't necessarily have access to all the things that it's sourcing from. And so it will summarize the abstract of a source, which is not or or a specific study, something like that Yep.
Speaker 1:Which isn't necessarily the actual material that you wanna pull from. Right?
Speaker 2:Your I really need this.
Speaker 1:Is just kind of like a teaser for the actual piece maybe has some light data.
Speaker 2:Yeah. And so, yeah, bringing your own sources, bringing your own facts. I mean, a lot of these like, the best research reports on Apple are often by, analysts that talk to the CEO on background or have phone calls. I mean, at at Citadel, their global macro team or was it their global macro team? One of their public markets teams conducted thousands of CEO interviews, to understand how they were thinking about the business while they were trading the stock, and this happens all the time.
Speaker 2:Yeah. You you you know, some big hedge fund calls up the CFO and says, hey. Tell me how things are going off the earnings call. You can't share material nonpublic, information, but you can get a vibe check from this person and get a ton of more context and more information that could inform your decision. And so if that's not on the Internet and it's not baked into the LLM and it's not available for the LLM to pull, you're never gonna get that analysis.
Speaker 2:So there will still be a huge alpha and and huge premium, not just on the interesting thinking and being able to puzzle things together, which I think humans are still uniquely good at, but also just bringing new facts to the to the system. Bringing new new tokens. You
Speaker 1:can't you can't imagine a future though that the time it takes for Ben Thompson to write a essay
Speaker 2:Totally.
Speaker 1:Dropped by 90% because he gets he says, hey. You know, basically, look at my writing style. Like, look at my reporting and and and have access to my entire database of content.
Speaker 2:Yep.
Speaker 1:Which because he does a lot of this. Right? Referencing back old material, old writing. David Sender does the same thing with founders podcast where he says, hey. You know what?
Speaker 1:This you know, the the McDonald's founder, does something very similar to Brad Jacobs. You know? And so it's like, models can do that pretty well in terms of, helping draw comparisons. But Yep. Ultimately, yeah, the delivery and the and the stamp, I think, matters a lot, especially with Ben's work.
Speaker 2:Yep. And so I think we should close out with a post that you ripped yesterday that got over a million views. Jordy says on x, Apple is giving up on VR. Their current marketing is laughable, and they're sitting on a hundred and $62,000,000,000 of cash. At this point, they should just buy an f one team, sign Verstappen, and win some championships.
Speaker 2:If we're entertained, maybe we'll forget about the company they used to be. Okay.
Speaker 1:Let me break it down. So so this this, I think it resonated just because it's a funny idea, Apple getting into f one, and I I would rather them spend their brand marketing dollars on doing, you know, having an f one team than doing these Genmoji campaigns that
Speaker 2:are super
Speaker 1:cringe at this point.
Speaker 2:Oh,
Speaker 1:yeah. And so this struck a chord within the the VR, AR, MR community because they were saying you know, a lot of people are saying they're not giving up on VR. Mhmm. A lot of people were saying, well, I didn't even do VR. It's AR.
Speaker 1:And Yep. You know? No. It's actually MR. So so a lot of sort of disagreement on on on just their product strategy in general.
Speaker 1:We had been referencing, I think, two days ago, Mark Gurman's article about how they did they did kill a project internally related to that would have been competitive with, Meta Ray Ray Bans, which
Speaker 2:No. No. No. Not that. It's a it it was a, like, a pro level device for
Speaker 1:Oh, connected to your
Speaker 2:connected to your Mac to replace your six screen gigachad finance bro setup, basically.
Speaker 1:Yeah. Yeah.
Speaker 2:Which is admittedly, like, a very niche product. But Ben Thompson, we talked about it, and he said, this is exactly what I wanted. This is this is the product that I wanted. And for me, I I I want that product too. I I I would have loved it.
Speaker 2:But but, I mean, there's a lot of reasons they could have killed it. We don't even really know. And, you know, they got so many projects at once, but I think the the sentiment
Speaker 1:is correct.
Speaker 2:The only thing They didn't get across the finish line.
Speaker 1:Yeah. What what seems obvious is that and I I it it appears that they don't have the conviction to continue with the the the the pace at which they had been spending on the development of future products that may not be hits. Right? And so it's easy to to I think the winner out of this is certainly not consumers, but it's more so, you know, somebody like Zuck who said, I'm willing to spend tens of billions of dollars to own the next personal computing platform. So, and, and, yeah, and then somebody took issue with with Verstappen.
Speaker 2:I
Speaker 1:don't I don't make f one driver signings, so, feel free to sound off on who you think would be a better fit. But, but yeah. And then the the irony was that yesterday morning, they also launched this invites product, which is basically somewhat of a clone of of Partifull. I do think it's a pretty different audience, and I don't see Apple just crushing on building a, a social, you know, media app, which which their invites product is in some ways. But, but, anyways, I think they're you know, I would like, you know, the the timing of all of this iPhone sales peaking and actually dropping.
Speaker 1:We don't know if they're actually peaking yet, but they hit some type of local top. And then simultaneously, like, not having the conviction to really go founder mode and, you know, spend the necessary, r and d dollars to develop, you know, and really own that next category. You know, only time will tell. But, Yeah. This is a company that I just Apple, you know, somebody in the comments also phrased it as Apple's like a new luxury brand now where they make the best phone, but they're no longer the company, the hardcore zero to one, you know, innovator.
Speaker 1:And I think that's okay. Right? Like, I'm not trying to argue here that Apple's, you know, I don't even necessarily think they're in trouble. They're just not the company that I was from that what that they were when I was a kid when every campaign was inspiring. Every product was trying to push the boundaries of what was possible in terms of, you know, user joy and also performance and all these other things.
Speaker 1:And, so anyways, hopefully, I do think I do think that it will become more and more clear that, Tim Cook seems to be able to generally manage this, like, luxury brand type version of Apple, but it doesn't feel obvious that they have this sort of visionary product leadership that's going to have them have whatever comes post iPhone. Right? Whether it looks more like Neuralink or it looks more like, you know, Apple Vision Pro.
Speaker 2:Yeah. I mean, it feels like it feels like Google. They have erected a toll booth on the world and the Internet and the digital economy. Everyone buys their phones, and that has flatlined. They have reached their market saturation on their phones, and now they're taking a a cut of all the transactions that happened.
Speaker 2:That's the service revenue. The service revenue is growing. That's why their stock went up even though they're they've clearly reached saturation on the hardware side. And so it's kind of like they're enjoying the fruits of their labors, and they're just going to sit back and enjoy, you know, the the the the massive money that just comes in. And and maybe they'll still working out work on ambitious projects here and there, but that doesn't seem super baked in the culture at this point.
Speaker 2:That's unfortunate because I I think as tech people, we always look to Apple as like, oh, man. The next cool thing from Apple is The
Speaker 1:epitome of an amazing hardware. Yeah.
Speaker 2:Always. Even like the first iPad, it was it was mind blowing. Yeah.
Speaker 1:Yeah. The areas in which the the iPhone is pretty perfect. Right? So Yeah. It's not to not meant to throw shade at the device, but, the area for me as a consumer that I would actually want them to try to, you know, 10 x improvement is battery.
Speaker 1:Right? Like Printer. Camera is good enough. But the issue with them, if they if they massively improve their battery, that's a huge reason that people, you know, actually, end up end up renewing their, you know, buying a new device. So it's they're sort of not the same incentive to be like, hey.
Speaker 1:Let's let's spend $10,000,000,000 and try to build a a 10 x better battery. Right? I just don't see them doing that because it's not necessarily in the interest of of growing sales.
Speaker 2:Yeah. Yeah. There's a lot of places where they've clearly tugged in either direction. They've made the phones, like, a little bit bigger, and they're too big and a little bit smaller, and they're too small. And they've just found they've they've kind of min maxed everything to the point where everyone wants the same thing, and they've just created, like
Speaker 1:Even my my favorite is that by by putting bump. By having, you know, the this is not actually level unless you have a case. So how do you walk out of the obviously, I don't use a case, but how do you walk you know, most people are like, well, if I put my phone on the ground and it's and it's gonna not even sit on a flat surface, okay, I'll buy the Apple case on the way out. And that's that's just them squeezing an extra $45 of, of net revenue out of you. And it's a beautiful business.
Speaker 2:But, And that's why the stock's up, and and it's a safe place. You know? It it feels like a safe place to put your money because, it's not going anywhere. It's just so windy.
Speaker 1:Yeah. And if you look at it from the lens of, like, LVMH being somewhere in the range of a 250 to $350,000,000,000 company
Speaker 2:Yeah.
Speaker 1:And Apple being a multi trillion dollar like, being worth an order magnitude more than that, makes sense. Right? Yeah.
Speaker 2:Totally. Like, the
Speaker 1:price is is Yeah. I
Speaker 2:mean, imagine yeah. Imagine if LVMH could take a cut of everything that you put in a Birkin bag or whatever. Is that is that them? They do they own Birkin? They own her
Speaker 1:no. No. They they're they don't know. That that was the one that got away.
Speaker 2:That was the one that got away. Or not. But, I mean, yeah, if you buy some Louis Vuitton, imagine every other piece of clothing that you put on when you're wearing an Hermes belt or Yeah. I guess, I guess, an LVMH, you know, piece of clothing, they take a cut off. That's the Apple model, and so it's so much more profitable.
Speaker 1:Yeah. It's more than that. It's like, yeah. It's hey. When you're when you are wearing our shirt, we're gonna we're gonna tax everything that you do throughout your day.
Speaker 2:That's basically what the iPhone is. It's a
Speaker 1:beautiful thing. So Yeah. I'm not a and I'm I'm, I'm not an Apple a full Apple hater. I just, you know, I love them. I just wanna see more.
Speaker 2:Yeah. I wanna see more. And I and I want I want more ambitious VR headsets. I want more risks. I want more f f one teams.
Speaker 2:Give us an f one team, Apple. Yeah. Design the car. Design the car. Yeah.
Speaker 2:Build the motor. Build the engine.
Speaker 1:The other people that critique was like, okay. You could have bought an Tesla in 2018, '20 '19 and owned the car. Right? Like, it's
Speaker 2:I don't know if that was an option. You you remember that deal? They had the money, but Elon said, I'll only do it if I can be the CEO of the parent of the parent company.
Speaker 1:Yeah. Yeah. Yeah. Yeah. No.
Speaker 1:I'm I all I'm not saying it was a it was a good deal, but they also could have two x the price and still still done, you know, very well from that. Right?
Speaker 2:Totally. Totally.
Speaker 1:So
Speaker 2:Anyway, let's move on to Google. We mentioned them briefly. Google also released earnings, and it was a little bit rockier. Shares dropped 7% in response. There's a post here from consensus gurus, bumps in the road, revenue miss, and they need an incremental $20,000,000,000 in CapEx next year relative to estimates.
Speaker 2:They plan to spend 75,000,000,000 versus 58,000,000,000 estimated. And so, Stratechery has another great breakdown we'll dig into, and, we'll give you some high level overviews here. Alphabet reported 96,500,000,000.0 in revenue for the quarter, up 12% year over year, but this is the slowest growth they've seen since 2023. Shares fell roughly 7% in after hours trading, erasing must much of this year's modest 8% gain. The deceleration in revenue was primarily driven by a slowdown in cloud computing, which is obviously very important with the AI revolution.
Speaker 2:They have the TPU system. They wanna be training these massive models, but the demand just isn't quite there yet as to what the market wants to see. And so Google Cloud generated $12,000,000,000 in revenue, which is up 30% year over year, but it's down from a 35% growth rate seen in the previous quarter. So people want accelerating growth, not just linear growth. It and this is decelerating growth and that, you you know, you start projecting that out and it stops and it's not very it's it's not very good.
Speaker 2:And so
Speaker 1:despite Every every, every seed stage founder has gotten through that where they're like, we're growing two x month over month, and then they're like, wait. I have to do this again.
Speaker 2:Or I have to do more. I have to do three x month over month. I have to accelerate my growth, not just maintain my growth. It it it is not enough to merely grow. You must also accelerate your growth.
Speaker 2:And so they have healthy margins rising from 17% to 18%, but the slowdown signals the demand for AI powered products is outpacing available infrastructure. And so there's a big question about is Google building enough, data centers right now? So the CFO, Anat Ashkenazi, noted two factors behind the deceleration, lapping a very strong q four twenty twenty three and current capacity limits. Strong AI demand has created a supply side bottleneck prompting a planned CapEx surge to 75,000,000,000 in 2025, up from 52,000,000,000 last year. Google Cloud platform continues to outperform overall cloud revenue, partly driven by higher demand for AI innovations and favorable pricing trends, I I e, workspace adjustments.
Speaker 2:And so, this is this is something that, like, you could see as a bowl case. Like, there is a lot of demand for AI workloads, and they just increase their CapEx spend because they're going to build against it, and they're gonna and they're gonna, you know, handle that. But, obviously, when the money's flowing out into CapEx, it's not going into the shareholders pocket, and so people get a little worried.
Speaker 1:And and and to be clear, the market and analysts are not excited about what Google is doing on the AI side as a, in terms of consumer products. Right? They have way less Yep. Pipe and sort of positive sentiment towards their AI products. Even though their even though their products are good, they've really struggled, from a positioning product marketing standpoint, even usability.
Speaker 1:Right? Yeah. And, and just kind of letting down, consumer users. And so, you know, if if OpenAI, when OpenAI says it's gonna spend, you know, $500,000,000,000, people generally get, you know, it's a it's eye eye catching number, and people are generally excited about that. But but when Google, a a, you know, infinitely larger company, much more profitable, says the same thing or or sorry, says they're gonna spend a fraction of that, everybody, starts to freak out a little bit.
Speaker 2:Yeah. And so there's two main things going on here in this earnings report that you need to focus on. One is that massive increase in capital expenditures, all the way to 75,000,000,000, 20 billion more than people thought they were gonna spend, basically. And then the other side is, the the cloud miss that they didn't make enough money in Google Cloud. And so last quarter, Google had arguably its best cloud results yet 35 growth on 17% margins.
Speaker 2:This quarter saw only 30% growth on 18% margins. And so there's a there's a chart here that we can pull up. It's the next slide, showing Google Cloud's revenue growth and then their margin. And it's pretty crazy to see how the the how how how how they've driven profits. From twenty nineteen q four, they were doing 2,600,000,000.0 in revenue with $1,200,000,000 loss, negative 46% margin.
Speaker 2:And they've, five x the revenue, and they're now profitable. So, they went from 2,600,000,000.0 to a to 12,000,000,000, essentially.
Speaker 1:And this just shows this just shows how brutal it is. One being a public company and one being any type of company that's that's that has shareholders is is that the expectations just continue to accelerate over time. And it's worth noting the the you know, going back to Apple.
Speaker 2:Yeah.
Speaker 1:This is the highest press pressure situation that that Tim Cook has, ever been under. I would say the exact same thing with Sundar. Yeah. Many people thought last year that that Sundar's job was potentially on the line Yeah.
Speaker 2:People were talking about that.
Speaker 1:After that, you know, really brutal launch of the, of their image generation product and and just feeling like, you know, he he didn't have the vision to lead the company into the next stage. And, anyway, so, you know, both these companies have had, the last decades have been very favorable. There's been a bunch of positive trends, and it certainly hasn't been easy. But it does feel like we're hitting this sort of critical point where the pressure is certainly on. And and for the first, not for the first time, but, you can imagine that the the job of CEO of Apple or Google is is very fun, in 2025.
Speaker 2:Yeah.
Speaker 1:In the same way in the same way that Palantir is. Right? Where, like
Speaker 2:Oh, yeah.
Speaker 1:The market loves it, and they don't care that Palantir is not making any money. They're that, you know, everybody's, you know, just focused on the the the stock price and and the broader narrative.
Speaker 2:Yeah. And so, Ben goes on to compare this to the last time, Google Cloud disappointed. That was q three twenty twenty three. In that quarter, revenue growth disappointed and margin decreased, which suggested that Google had too much capacity for the revenue it it earned, which is to say the problem was a lack of demand. And so if you remember in, q three twenty twenty three, this was kind of very early early days of AI workloads.
Speaker 2:And so, clearly, the margin decreasing means that they didn't have leverage over their customers to to drive higher profits. And the revenue growth disappointing, meaning that there wasn't just there wasn't that much demand. But this time, what happened was revenue growth was a disappointment, but the margins still rose. This suggests the problem was a lack of supply in terms of infrastructure. So they're getting good margins, 18% up from, I mean, 3%.
Speaker 2:They're they're the highest they've ever been, basically. And the reason for that is that they're able to have leverage over their customers, but they're just they just aren't able to deliver enough services to people. And so that's a very good sign in general in terms of, like like, do companies want to do large AI workloads? And, and the answer seems to be yes, but, there's just isn't enough infrastructure, and that's what there is to hold that.
Speaker 1:Is a you know, anytime you're introducing a new technology into the market, you're going to have this ultra high volatility. And this is what Jeff Lewis was talking about yesterday. Having a multitrillion dollar company go down 7% in a day, after take going from from negative 46% margins in 2019 all the way to 18% margins in 2024 and, potentially having you know, needing to spend on CapEx in order to sort of catch up for, the demand. And then the mark and then it's still dropping by 7% just shows the market doesn't you know, is trying to price in these sort of changing, you know, trends in the broader tech ecosystem, but it's not quite sure how things are gonna pan out.
Speaker 2:Yeah. And so digging into these, the cloud platform results in more detail, you kind of have to tease out. Google's names are not terrible, but I'll send out amazing. So there's actually two different products that have, you know, substantial revenue lines. There's Google Cloud platform, and then there's Google Cloud as a whole.
Speaker 2:And Google Cloud's revenue growth has been benefiting from Workspace price increases. So that's just like, oh, you get a Google, you know, Gmail for your company, and you get Google Sheets and stuff. And they raise the prices on those, products because they integrated Gemini. And so Workspace, meanwhile, is getting another in price increase, which Google is justifying by including Gemini without requiring a paid add on. It will be interesting to see if the trend of GCP outgrowing Google Cloud as a whole continues, as this increase makes its way through the system.
Speaker 2:And needless to say, this does suggest that there wasn't a lot of uptake on the Gemini add on. So they used to say, hey. You have Google Workspaces. You know, you got your startup.com. You got your startup.com emails from Gmail, and you get Google Docs and Google Drive and all that stuff.
Speaker 2:We're gonna give you what if you want Gemini, it's an extra $20 a month per per person, per seat. And for some organizations that did that and they pulled that trigger, that was really expensive, and that caught and that drove a lot of growth. But, clearly, that wasn't really happening. People were like, I just use ChatGPT, or I'll use, different services as needed. Now Google's saying, everyone's getting Gemini, and you're gonna pay for it.
Speaker 1:Yeah. And and and the issue with, launching products before they're fully baked. We talked about this with Apple earlier. Apple intelligence doesn't feel fully baked. People got access to it.
Speaker 1:They started talking about how how sort of hilariously, underbaked it was. And now Google's dealing with the same thing. Right? Gemini's had a had a number of issues. Their image generation product was was not quite ready for production.
Speaker 1:And so now when I'm in Google Workspace and I see a pop up that says, hey. Do you wanna add Gemini? I just don't even I don't even think about it. Right? I'm like, I already pay, $200 a month for chat GBT.
Speaker 1:It it's performs great for my needs. Like, I'm not looking to spend more, on on on a sort of language model.
Speaker 2:Yep. And so there's a similar narrative here with Google where they're the the the thing that's moving the stock right now is the just like with Apple, it's the services revenue that's that that's kinda changing the business. And it's something that they can take advantage of because they've built this stable iPhone business. With Google, it's Google search, and the search results have been very much to expectations and very predictable, and everything is really changing, because it's such a huge and robust business. And so everyone's interested in, like, oh, what's gonna happen to AI and cloud workloads and, GCP and and and, Google Cloud?
Speaker 2:But, Google search search results were mostly in line with expectations. YouTube got a boost from election ads. Search is holding steady from a revenue perspective. And then, there's some interesting quotes here from Sundar and, the the chief business officer, Philip Schindler. So, Sundar says, on search usage overall, our metrics are healthy.
Speaker 2:We are continuing to see growth in search on a year on year basis in terms of overall usage. Of course, within that AI overviews has seen stronger growth, particularly across all segments of users, including younger users. So it's being well received. But overall, I think the I think I think through this AI moment, I think search is continuing to perform well. And as I said earlier, we have a lot more innovations to come this year.
Speaker 2:I think the product will evolve even more. And I think as you make search, as you give, as you make it more easy for people to interact and ask follow-up questions, I think we have an opportunity to further drive growth. When products our products and platforms put AI in the hands of billions of people around the world, we have seven products and platforms with over 2,000,000,000 users, and all are using Gemini now. That includes search where Gemini is powering our AI overviews. People use search with more with AI overviews, and usage growth increases over time as people learn that they can ask new types of questions.
Speaker 2:This behavior is even more pronounced with younger users who really appreciate the speed and efficiency of this new format.
Speaker 1:Yeah. And so,
Speaker 2:if stuff in AI ever
Speaker 1:They wanna they wanna bake they wanna say that we have basically their all these 2,000,000,000 people are using Gemini, which is, you know, again, they look at themselves as I'm using Google and and, okay, you summarize some results for me. So it's a little bit disingenuous to to say that it's all Gemini usage. Overall, I look at it as a lack of exciting leadership, like the difference between how Alex Karp is coming into an earnings meeting and actually getting you that feels like the company is, like, on a mission. Yep. Very important one.
Speaker 1:Yep. And it and it's making massive forward progress, doing very important work. Totally different from how you hear, Apple executives and Google executives talking about sort of managing the empire and saying like, oh, yeah. We're threatened. You know?
Speaker 1:Basically, if you look through it, it's like, okay. Apple is losing market share in China. Google is their search product, the goal you know, which is Apple's golden goose, or the iPhone is a golden goose. With Google, you have search threatened for the first time in a very long time. Right?
Speaker 1:It's not like chat GPT has a million users. They have hundreds of millions of users. Right? And there's new players like perplexity that are also, you know, threatening them. And so it it it feels to me that broadly, both Google and Apple are are acting from a more defensive lens.
Speaker 1:Yep. And it makes sense. Nobody wants to invest in a in a in a growth story, for a company that's that's being defensive. Right? It's just not it doesn't get you inclined to say, you know, I think this business is gonna be worth significantly more.
Speaker 1:You know, maybe you think Google is gonna be worth significantly more years from now. Yeah. I can totally see that, but they're not driving that sort of excitement because it doesn't feel like there's real vision. Right? It's it's management versus, you know, on Karp side, it's pure, you know, vision and momentum.
Speaker 2:Yeah. And so, I mean, Google's mission for decades, I don't know if they've changed it, is to organize the world's information. And AI and LLMs are like the final boss of that. Like, you literally can press down the entire Internet to just a bunch of numbers in these model weights, and you can ask it any question, and it will just give you the answer or the fact.
Speaker 1:Yeah. And so if I if if if if you're sitting in the the Google exec team's chair, you would want to position people around and be honest about the fact that the rollout of AI across Google's ecosystem has been rough. It hasn't gone nearly as well as it could could have. Right? And if you're saying there, hey.
Speaker 1:We have the the narrative of, hey. We we know AI is gonna be transformative. It aligns to our mission already, and we already have billions and billions of customers. And so our sole focus is helping them understand our products better, making our products better, etcetera. But the narrative seems to be, more around, oh, they're already using Gemini, or, oh, oh, we're gonna just bolt this on here versus we're gonna get users really excited about these products and actually make their lives better versus the work play the work, the workspace sort of upsells, right, are very much, hey.
Speaker 1:Please sign up for this so that you pay $20 more a month. That's all I see when I see the pop up. I don't see I'm not in a doc seeing something. Hey. You know, I can pull in this information from Gmail.
Speaker 1:Right? You already typed this out over here. Let me pull it in. It's not, like, proactively making my life better as a user. They're just sort of asking for that incremental, you know, SaaS fee.
Speaker 2:Yeah. Yeah. I mean, again, it's a it's a defensive story. At the same time, I I mean, I agree with you that they haven't created a new any new products that they've really surprised or delighted. The growth story really is on the cloud platform side.
Speaker 2:They say, hey. We have some of the biggest data centers, the best data centers, some of the best AI chips. We're gonna make a ton of these, and then we'll make a bunch of money, and we'll let everyone else figure out what products monetize on top of it, and that's fine. But most importantly, the golden goose of Google, they're arguing, sure, it's not, like, you know, transformed, and we're not dominating the new paradigm, but we are monetizing just as well as we always have. And this is good news.
Speaker 2:And so revenue is steady. AI overviews are being used. And, critically, they are monetizing without cannibalizing revenue, which is Yeah. When everyone thought
Speaker 1:We talked we talked about this yesterday. The the way that that that one of the best sort of, mechanism like Google operating as a toll booth. Right? I search tennis shoes, and I get ads. I'm not doing that in ChatGPT right now.
Speaker 1:Right? Yep. And so, I I imagine ChatGPT wants to eat into that and get better product recommendations, and and that will be a threat to Google. Yeah. But it is slightly that that that behavior is sort of different.
Speaker 1:ChatGPT is operating more of organizing information, but, again, it's still, you know, somewhat of a of a threat.
Speaker 2:Yeah. We gotta we
Speaker 1:gotta probably jump into the timeline just being conscious of of time here unless you have anything more you wanna cover.
Speaker 2:No. We can wrap that up. Did you wanna do Timu today, or you wanna move move on to timeline?
Speaker 1:I think we should do Timu tomorrow.
Speaker 2:Okay. So I
Speaker 1:just wanna give that proper attention. We had a couple comments that were good. I'll read through. Venturi says, Walled Garden sells iPhones. Apple AI is copium for shareholders, and I don't think it's actually copium for shareholders.
Speaker 1:I don't think any of the shareholders are really smoking the Apple AI. I think it's I think it's the Apple executives that are I think it's Tim Cook is getting a little high on his own Apple intelligence supply. And then, a more even more aggressive comment from Vic. He says, iPhones really are mid at this point. Billionaires and day laborers shouldn't have the same devices.
Speaker 1:And, Yeah. I mean, in many ways, it's awesome that that that that that is the case right now, but it would be cool if Apple was like, we're coming out with a $50,000 iPhone, and I'm sure they would get a lot of people that would buy it. And, anyways, so more to come there.
Speaker 2:Well, we have some breaking personnel news on the channel. Daniel Penney was hired by Andreessen Horowitz, and Barry Weiss reported it out in the free press. Ben, let's click through some of these slides. In less than two months, Daniel Penney has gone from facing a potential twenty years in prison to landing a role at Andreessen Horowitz, the premier investment firm in the valley. An internal statement seen by the free press, David Ullovich, a general partner at the firm, confirmed the hire.
Speaker 2:He will learn the business of investing, and he will work to support our portfolio companies. In on 05/01/2023, Penny's case became a lightning rod for controversy when Jordan Neely, a black homeless man with more than 40 prior arrests and a prior history of mental illness, wandered onto a subway car and according to witnesses began threatening passengers. Penny intervened, placing Neely in a choke hold. When Neely died short shortly afterwards, much of America turned on Penny. And the city's progressive district attorney charged him with criminally negligent homicide and second degree manslaughter.
Speaker 2:Penny based a possible twenty years in prison. After a months long trial, a New York jury acquitted Penny in December. Accor announcing the hire, Ulevich did not shy away from the May 2023 incident. In fact, he cited Penny's actions that day when explaining the hire. And so Daniel Penny is at Andreessen Horowitz.
Speaker 2:It shook up the timeline. Lots of people were commenting on it. Jordy, you got any comments?
Speaker 1:It, one of the one of the craziest headlines Yeah. Because it it almost feels like a like a fever dream of just, like, combination of different, you know, different different memes all all converging into one. I think it's awesome for Daniel. It's you know, Andreessen clearly wanted to make a statement with us. You know, there's no reason that Daniel should be discriminated against because he was in this, you know, total culture war crisis and and went through this very tragic incident.
Speaker 1:He's a veteran. He seems like a good guy, and I'm glad that he has this opportunity. There's a lot of ways that people could knock it, and people certainly did.
Speaker 2:Yep.
Speaker 1:It's funny because that news was coming out while Trump was saying that he was gonna, turn Gaza into a Oh,
Speaker 2:wow.
Speaker 1:US territory. So there was a lot of stuff going on yesterday. But overall, I think it's this is a a cool, opportunity for and to recent portfolio companies. Imagine you're just sitting there minding your own business, and you get an email from Daniel Daniel at a sixteen z, and it's like, hey. Have you seen this?
Speaker 1:And it's like your competitor announcing, like, a fundraising announcement. You're like, yes. Yes, Daniel. Yes.
Speaker 2:I saw that.
Speaker 1:Yes, mister Penny. I saw the announcement. Yeah. But, but, yeah, you know, overall, overall, you know, I think it's I think it's, cool, and I'm glad they're giving him, you know, I'm glad they're giving him the opportunity, and I'm excited to see where his career goes. It there there's an alternative version of the story that's very dark where he goes to prison for for trying to, you know, stand up for his fellow citizens.
Speaker 1:And and, you know, I experience I didn't personally experience this, but I had a family member held up at knifepoint in New York and had their watch stolen. And that family member went to a police officer immediately afterwards, and the police officer just said, sounds like your problem, not mine, even though he was bleeding at the time. And so I think that New York, basically made crime legal in many ways. In this case, the guy that that Daniel Penney was in an altercation with had been arrested, you said, 40 something times. And so, you know, we don't comment on, politics or or social issues here, but it it seems like New York, in general, needs to get a hold on on their entire, judicial sort of system.
Speaker 1:And, anyways, I'm excited to see, Dan's Dan's first, first bet. I wanna see him betting big. You know?
Speaker 2:Yeah. It's interesting to see how he fits in it. And Andreessen, Ben, can we pull up the the slides and kind of tab through these quickly? I wanna see the, keep going. That's the cultural leadership fund and injuries and keep going.
Speaker 2:Okay. That's still a cultural leadership fund. Keep going. Okay. So yeah.
Speaker 2:So Ryan, Ryan is a, is an investor there, and he's listed as a partner and, friend of the show. And so Andreessen does their naming schemes a little bit differently. For a long time, everyone was a partner. If you're an investing partner, like, you can be in a most firms are, like, an associate principal partner, general partner. At Andreessen, most people come in as partners.
Speaker 2:And then if you go to Catherine Boyle on the next slide, you'll see that she's a GP. She's a general partner. And then Daniel is listed as a deal partner. If you go to the next slide, Ben. And so there there is a question about, like, is this more like a venture partner role where he gets carry and deals he brings in, or will he be working from the office and fully staffed on, you know, deals all the time?
Speaker 2:There's a whole host of different structures that the, that these firms can take with sometimes I mean, there's this they also have scout relationships where, you're you don't even have an email address with Andreessen.
Speaker 1:I'm an Andreessen scout. I have been for years. So so look at this. This there's two things going on here. One is the mark like, don't get it wrong.
Speaker 1:This is a marketing moment for Andreessen to say, we are gonna stand behind an individual that we believe did the right thing and was proven, you know, to be innocent. Right? Yep. And second is we wanna give this individual who did the right thing in a, tough moment that, you know, we wanna give that person an opportunity. On the other side for Daniel, it's just an amazing, you know, opportunity to go from being a veteran who I believe didn't have a lot going on prior to the incident to now getting to work at, you know, the biggest venture capital firm in the entire world and get to be involved with some cool companies.
Speaker 1:And I do think this will resonate with a lot of the the the founders that Andreessen has backed and and, plans to back in the future.
Speaker 2:Yeah. Especially on the American Diamonds side. So it makes a lot of sense. Well, let's move on to our next so story. Change of CEO, some more personnel news.
Speaker 2:Match group has announced its new CEO, Spencer Raskoff. I've helped create category leaders in online real estate, Zillow, and travel hot wire. Now I'm focused on the most important category, human connection. He says, Match Group's mission to spark meaningful connections for everyone worldwide is inspiring, and I can't wait to help achieve it. Here's the email I sent to our 2,500 employees.
Speaker 2:In In the next few minutes, we are releasing news that I have the great honor of stepping into the role as Match Group CEO and will join you in shaping the next chapter of this incredible organization. And so I wanna acknowledge and thank them for everyone that has contributed to Match Group. I have enjoyed partnering with him, and I know I will join all of you in wishing him every success and happiness. What do you think about this change of CEO at Match Group? The stock has been down for a while, I believe, and I think this might be part of the change.
Speaker 2:Lots of people asking about dating apps
Speaker 1:in the future. Spencer is an absolute dog.
Speaker 2:Love it.
Speaker 1:A fixture of LA's, startup community helping put LA on the map and, going along LA. I think he had he had a media company at one point that was, centered around LA tech and, has done a bunch of stuff in in in sort of real estate, and real estate tech. So, anyways, I think this is cool. I mean, it's, match group in general gets a lot of hate. Right?
Speaker 1:Yep. It's it's a pretty controversial company. A lot of people don't. Even if they were using a data app that they make, they don't necessarily have super positive feelings towards it.
Speaker 2:Yep.
Speaker 1:And so I think it's a huge challenge for Spencer, but, everything I've heard about Spencer, he's a great dude and a great, you know, a great leader. So I'm I'm excited to to see what he does. At a company like this, you want you know, it it it it actually can't be understated if they are facilitating the connection of millions and millions of people every single day. Yep. We want, you know, we want good, visionary founder types leading these companies.
Speaker 1:And and, I think that done properly, you know, there's there's the sort of black mirror analysis of of dating apps. And then there's the sort of real potential that everybody, like, constantly wants to see out of these. Right? And dating apps have this, you know, dichotomy and that that if their users wanna find, you know, long term love, maybe that's not so good for the for the dating app. But, there's a lot more innovation that can happen here, and, I'm excited to see where MASK Group goes.
Speaker 2:Well, good luck to him. Let's move on to a big product launch announcement from Kennon Davidson. He's excited to introduce ICON, the first AI ad maker backed by Founders Fund and execs at Frontier AI Labs, like OpenAI, Pika, and Cognition. ICON is like chat g b t plus cap cut, but for making winning ads with AI in minutes. Icon looks at your video library and tags scenes, close-up, unboxing.
Speaker 2:These scenes become reusable clips used as Lego blocks for making ads. Prompt a icons add GPT to generate scripts, focused on specific angles and audiences. Icon binds perfectly matching clips for every script seen and generates an ad that is 80 to 99% complete, and then you make edits yourself with a cap cut like video editor until you're happy. Three pre three person creative teams make 30 ads per month. With Icon, they make 10 times more than you can make 300.
Speaker 2:We built we cobelt Icon with a hundred million dollar revenue brands like Ridge, Jones, Road, Emmy Backbone, Mudwater to solve big pain points. So you've worked with Ridge. What do you think about Icon?
Speaker 1:Yeah. So there's this interesting thing that happened probably five years ago, maybe six years ago at this point, where Meta got so good at delivering your ads to the right people that the real challenge of performance marketing was having really good ad creative, like the videos and images and GIFs and things like that, that all performance marketers shifted from, okay. I have to perfectly optimize my audiences and targeting, which they still have to do to some degree, to I need to spend all of my time building this sort of treasure trove of ad creative that I can deploy across, you know, Facebook and Instagram and Snapchat and then TikTok and things like that. And so you're a consumer brand founder. I've started Aurora as well.
Speaker 1:So you you you've been through the process of understanding, like, there it's it's this treadmill where ad creative you can create a great ad, and it'll perform amazing sometimes for, like, two weeks. And then the performance will drop off because it works so well. You were able to spend so much money against it that it started declining. And so it's it's literally, you know, the these, brands get on this infinite treadmill of needing to produce more and more and more and more ad creative. So the problem that they're solving is massive.
Speaker 1:This, founder previously started a company called Skio. That's a pretty well liked, subscription, management platform for ecommerce brands. So clearly, had had had talked with enough people, that were experiencing the pain point and then built a product that they love already. So I'm bullish on this. I saw I saw one person respond like a a thread boy was responding.
Speaker 1:Like, many people are calling him the Sam Altman of ad creative, and then somebody else, I think I think it was, like, base baron or or somebody like that. Like, was like, absolutely no one is calling him the Sam. That makes but, very, very cool product. And and, yeah, already, if you think about just how much a a, you know, a brand like rigid is spending on ad creative, They have a big team. They're already spending, you know, probably hundreds of thousands of dollars a month to make creative.
Speaker 1:And so you if you can help them generate 300 extra ads out of their existing library Yep. You can easily charge, you know, multiple 6 figures of of, you know, and potentially a 7 figure contract. So I see this company going, and, growing, like, very quickly if if they can really deliver on what their demo does.
Speaker 2:Yeah. And what I love about this is that it it it it realizes, like, what AI can do great, like script writing, tweaking, a little bit of AI avatars here. It's not trying to be end to end full AI ad, just one prompt, and that's it. It's like Yeah. Hey.
Speaker 2:Give us the give us the real four k graded footage of your product. Give us your interview with your CEO on a podcast. Give us everything. And then, yeah, if we need to throw some stock footage in there, we can. If we need to throw in some AI voice over, we can.
Speaker 2:And a lot of these products that really succeed, they blend everything together and wind up just amplifying the distribution and creating more content out of Yep. What's already what's already great. And in this They're they're
Speaker 1:at $99 a year. They're clearly just trying to completely undercut the market and and, make it really difficult to compete. So
Speaker 2:$999 a year, but still a steal for sure.
Speaker 1:Well oh, yeah. Sorry. Not 9. Yeah.
Speaker 2:Yeah. Basically, $99 a month.
Speaker 1:A thousand dollars a year.
Speaker 2:For any for any company that's doing d to c ads, this is a no brainer. Absolutely. Yeah. Yeah. And so congrats to the team on the launch.
Speaker 2:I hope it goes very well. It already went super viral, and you clearly know how to go direct and and get a lot of attention, which is great. And, yeah, any of these AI things, they're always, like, little bit of a hot button. A lot of people like to hate on them. You can kinda tell from, like, the quote tweets and the replies.
Speaker 2:Like, this was engaging. This was something that people were debating about, not just people saying, oh, congrats. This is so great. But that's but that's that's actually key to going viral and getting a really broad reach. And a lot of brands will see this and say, hey.
Speaker 2:I wanna be like Ridge. I wanna be like Mudwater. I I have ads I promise to solve. I need to make my my creative dollars go further. This is a great
Speaker 1:way to do it. This is such a universal pain point and something that people have extreme willingness to spend on because they're already doing so that if they can deliver a great product experience, it will be a big company.
Speaker 2:Fantastic. Well, let's move on to some more breaking news. Enron, the publicity stunt run by the guy who did Birds Aren't Real is, has launched a, coin, on pump.fun. And so Enron, which they acquired the Com, they bought the they didn't buy the
Speaker 1:the IP. They they
Speaker 2:didn't buy all the IP. They actually I I read something about this. They registered a new trademark for Enron in merch and other categories. They didn't actually have to go and acquire the old Enron name.
Speaker 1:Interesting. So they had the username and the
Speaker 2:domain Exactly. Which are a
Speaker 1:lot of which are which are important assets. Yep.
Speaker 2:I saw someone put him in the truth zone because he says I put I purchased Enron for $2.04 $2.75. That's not exactly what happened. He purchased the Enron trademark in a new category, which is often Yeah. Easier to do. But, anyway, it doesn't matter.
Speaker 2:He has Enron. He has at Enron on x. He has Enron.com. He has a logo, and he's put it on shirts, and he's done a bunch of publicity stunts with this, like, nuclear powered egg. It's all very Silicon Valley, HBO style.
Speaker 2:But they launched a coin on Solana. We should blur out the address because I do not want anyone losing money on this thing. I don't even know if it's possible. It might have already rugged, but let's break it down.
Speaker 1:Yeah. So, where to start with this one? One, from a pure marketing brand campaign go to market standpoint, they absolutely crushed it. The creative was was awesome. They sort of slowly built up hype, and they would sort of drop little Easter eggs.
Speaker 1:Easter egg Easter egg, Eventually dropped a real egg.
Speaker 2:Literal egg. That's what I have to say.
Speaker 1:Global tour. They're doing keynotes. Yep. This guy, Connor, is, like, really embodying the Totally. I I don't know if that's his real name, but really embodying the CEO role.
Speaker 1:Yep. Really taking, the audience on this sort of emotional journey around, please, we wanna regain your trust. You know, we we we we messed up. Yeah. But but, you know, it's a new team.
Speaker 1:Right? It's a new opportunity, and and and we're gonna take Enron into the future, really orienting around the the energy aspect of it. They even did a a, you know, an interview with Taylor Lorenz. You said this was a very you know, we've seen some very right wing, meme coins. This was a very left wing meme coin in many ways, sort of making making fun of tech, you know, doing doing, sit down interviews with with Taylor Lorenz.
Speaker 1:But, but, anyway so so in in many ways, like, what what they did was very impressive. It seems like from a you know, and yesterday, they launched a token. You know, there have been a lot of, when when a big project like this is sort of building up hype. Right? A lot of people are basically sitting at their laptop refreshing, wanting to be the first person to buy it because if you buy it at the right time, maybe you'll make a lot of money.
Speaker 1:Right? We saw this with Trump. People that happen to be on their computer when Trump went live and just bought it ended up making, you know, ridiculous amounts of money if they sold in the next, well, even if they didn't sell until now. Right? They could sell today and still make a good return.
Speaker 1:And so, look, what, what they did here ended up falling falling flat in some ways. They launch it. It sort of pumps briefly, and then it's been on just a steady decline ever since then. Mhmm. They seem to have made some sort of blunders in terms of how they actually of it.
Speaker 1:A lot of people were, pushing back because they had, you know, the team controlled 90% of the supply. Usually, I think in crypto projects that are more, from the the actual crypto community, it's usually the opposite where the team controls something like 10% and the community controls the other 90%. Yep. And so when they push it live, people immediately sniped it as in bought a lot of the supply, wrote it up, sold it, and, you know, presumably made a lot of money. And then, the chart has just been on the steady decline, and the response in the community was not good.
Speaker 1:A lot of people were just like, wow. You you did all this just to, like, you know, do a rug pull. Like, it's it's, and and they even there there's this guy, Coffeezilla, who I think Yeah.
Speaker 2:We have the next slide. Yeah.
Speaker 1:Where, I think Coffeezilla had made a video about Enron, and then they reached out to him and said, hey. We're fans. Just saw you put out a video on our efforts. Wanted to clarify we are not doing a coin, and all coins on the market are unaffiliated with us. We will be making steps in the energy sector soon.
Speaker 1:We are quite excited about. So I guess you're just, like, like, lying to Coffeezilla.
Speaker 2:Never a
Speaker 1:good move. Kind of a weird weird call.
Speaker 2:Never a good move.
Speaker 1:But, anyways, it's it's just it almost seems like I would've you know, maybe they thought this was the best and most funny way to bring back and monetize the IP and do this campaign. Yeah. But you have to imagine they could have done something more interesting with it that would have potentially been a lot more lucrative. You know? Who knows how much the team and things like that made?
Speaker 1:But overall, it's, it's not, it just seems like, okay. You missed the timing. Right? Maybe, you know, the the the crypto market goes from absolutely roaring to completely dead. Right?
Speaker 1:We we saw this. There was there's a a podcaster, from from Red Scare launched a token yesterday. Mhmm. Barely cleared a $1,000,000. I don't think it cleared a million dollar market cap, and and a month ago, it probably would have gone to 20 or 30 or who knows.
Speaker 1:Right? And so the the market was, like, humming, and then sort of Trump was very clearly at the top. I think we may may have said that or or covered people that called the top. It's like, how do you beat the president launching a meme coin that, like, obviously has to be the the local top? And so, yeah, it seems like they botched the timing.
Speaker 1:They botched the launch, and now they're just sitting their Enron, and they have to somehow keep people excited to presumably because, again, we've talked about this before in crypto. Your product is your price. So Yep. If the price is going up, people are gonna love your product. If the price is flat or down, no one cares.
Speaker 1:And Yep. So now it's they they're gonna have some responsibility to try to sustain it or make it go up. And, I I'm not personally not super bullish, but Yeah. They'll see what they have in store.
Speaker 2:Yeah. The, just meme coins and and these pumped out fun things, they feel a little long in the tooth. They're just we're kind of over them. They're not as exciting as they used to be for a lot of people. And, yeah.
Speaker 2:It's just odd because this feels like it had the trappings of, like, the good outcome here would be they they launch a kind of mischief style studio agency, and they're doing funny projects like this and breaking through and monetizing with merch or some cool thing every few months, and you hear from them. I mean, Mischief launched a, like a fraud startup fraud based drop once that was you could buy a miniature Theranos, Theranos blood testing kit and a miniature, Juicero pump and a juicer, all these different products. And it was very fun, and and it was just like, the people who bought that, they might have been auctioned off. It might have been expensive, but I I I saw some people that bought the, you know, the collection of trinkets from I I got a couple of disasters. And Yeah.
Speaker 2:And That's cool. And it's great. And and and whatever you paid, you feel like you got your money's worth. You you enjoy that. And even if you paid a couple hundred bucks, it's like, yeah.
Speaker 2:I have a token from mischief, and I like that. And that's what this could have been, and yet they went this other weird way.
Speaker 1:But the issue though too is the IP was a little bit too old in my opinion.
Speaker 2:And why?
Speaker 1:I wasn't yeah. What was it? It was early two thousands. I don't know. Yeah.
Speaker 2:It was a .com crash company.
Speaker 1:So I was seven years old. Right?
Speaker 2:Yep.
Speaker 1:So I I for me, it's not really that meaningful. I didn't get to experience it. Right? If you if somebody were to buy the FTX merch
Speaker 2:Totally.
Speaker 1:Five years from now, boot it up again Yep. That I would That would rep. You know? I don't you know? Yeah.
Speaker 1:Not saying I would be the customer for that, but I think that their audience of, like, terminally online Zoomers
Speaker 2:Yep.
Speaker 1:Are just looking for a financial return. And so people cared about it when it was like, hey. This might be a billion dollar token.
Speaker 2:Yep.
Speaker 1:And then now that it's not a billion dollar token and everything kind of flopped, the insight a lot of the wind is gonna be taken out of their sails. But I'm sure they again, I'm sure they have more plans
Speaker 2:Yeah. For
Speaker 1:the kind of campaign. But
Speaker 2:I mean, with Enron, I think more people know it just as a it's a fraud. People don't actually know that they were an energy company or what they did. And it's actually fascinating because it wasn't it wasn't they did they they did things. There was an accounting fraud, but they actually did energy trading and stuff. It was like a fund.
Speaker 2:And, like, there were people there that had real jobs and did real business and created some sort of value for a while before the fraud kind of became
Speaker 1:The original company went to zero.
Speaker 2:Yep.
Speaker 1:Every shareholder lost everything. Yep. And now they have a token where which gives people an opportunity to lose it all again in the new generation.
Speaker 2:And so I wonder if I wonder if the CEO is gonna come out and be like, this was all, you know, a performance art piece. This is all a stunt. And, like, the token was part of that. It was like a commentary on, America's obsession with fraud and how you could even fall for the Enron token after knowing that Enron's a fraud, and and and it's some sort of art piece. And And I wonder if there'll be some sort of justification or attempted justification like that, but I don't know.
Speaker 1:When when people people are gonna lose money on this, and they're not gonna think it gets nearly as entertaining as as if it was just actually some type of nonfinancialized stunt. So
Speaker 2:Yeah. Yep. Yeah. Yeah. It could have been done way better.
Speaker 2:So we'll close with, Gwart with a banger. Gwart says it's getting harder and harder to have a coherent bear case for Solana when established companies like Enron are launching there.
Speaker 1:Basically
Speaker 2:I love this one.
Speaker 1:Post. And this and and just to give you a history, people were very bearish on Solana for a very long time. Right?
Speaker 2:Totally.
Speaker 1:Certainly not Mike Solana. That's been a permanent bull run generational bull run. But, people were bearish, and then and then having Trump, the president of The United States, launch on Solana was like, again, the apps how how do you get more validated than that? Yeah. Maybe you have, like, Google or Apple start to use it in some way, but, anyways, great joke.
Speaker 1:Before we jump over, we gotta jump to a meeting with our friends over at x because we are signing a distribution deal with x.
Speaker 2:Oh, okay.
Speaker 1:Should we cover the post with, Solana's post?
Speaker 2:Yeah. Let's let's tab through. Moon should be a state. The movement has met has hit the New York, the Times Square in New York City. AdQuick.
Speaker 2:They partnered with, Pirate Wires, and they're also partnered with us. Best place to buy billboards. If you're looking to do out of home, an amazing stunt like this. This went mega viral. Elon reposted this post.
Speaker 2:And, not not this one on Pirate Wires, but the one, Mike Solana shared. And, it has, like, millions of views, 5,000 likes. And, you know, that's the way you have to think about out of home is how can I do a a stunt, something that speaks to my brand, something that's that's jaw dropping that then can go online and get organic views? And that's exactly what happened. I'm sure this was a a massive ROI driver for Pirate Wires.
Speaker 2:It's a great example of what AdQuic can do, and, we're just so happy to be affiliated with both those organizations. They're fantastic. What what you got for me, Jordy?
Speaker 1:No. I think it's a great example. I I think, I think it's hilarious to think about somebody just walking by who's not on x, who's never seen this, and seeing that and just being like, yeah. Actually, I never thought of it like that. But you're right.
Speaker 1:The moon should be a state. So, anyway, shout out to Piratewire, Solana, and Adam and our friends over at AdQuick. Lots more to come there.
Speaker 2:Fantastic. Well, short show today, but stay tuned for tomorrow. We got a Timoo deep dive. We're taking you through the full history of the company, breaking it down, and we got a ton of timeline that we didn't get to. And, of course, a ton more ads and promoted posts.
Speaker 2:So stay tuned. Thanks for Timo. People
Speaker 1:are saying that our Timo deep dive is gonna be a Timo acquired deep dive.
Speaker 2:Let's go.
Speaker 1:Timo Timo acquired deep dive. So there's level to this. And I cannot wait. Sorry to cut the show short.
Speaker 2:If you're
Speaker 1:angry about it, go DM Tyler Gold over at x. Say, hey. You scheduled a meeting, and just and let him know what you think. But,
Speaker 2:you should just have him on the show. He should just call in and we can have a meeting here live on the show. Yeah. Next time we're working on that. Thanks for watching, guys.
Speaker 2:Appreciate it.
Speaker 1:Cheers.
Speaker 2:Bye.