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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TBPN. Today is Tuesday, 08/26/2025. We are live from
Speaker 2:the TBPN Ultradome, the temple of technology, the fortress of finance, the capital of capital. Thank you to the team at X. Thank you, Elon Musk. Thank you, Nikita Beer. Because in the latest app store graphics package for the X app, that's the everything app on iOS, who's featured?
Speaker 2:None other than yours truly.
Speaker 1:The technology brothers.
Speaker 2:Yeah. Yes. Both of us are there and
Speaker 1:Height mugging me as usual.
Speaker 2:I don't I don't know. I mean, it it's I'm just It fits I I I like how
Speaker 3:the
Speaker 2:brand kinda fits in because our we have some green in the background and they have green little accents in the design looking good with the liquid glass, whoever screenshotted this clearly on the next version of iOS. But you wrote on
Speaker 1:The account swift dev on X.
Speaker 2:Oh, it was from them. Oh, interesting.
Speaker 1:Provided the screenshot.
Speaker 2:That's great. You said number one on the charts, number one in our hearts. I believe you're
Speaker 1:I mean, it's great to see X number one in the news. Oh, yeah. They are number one
Speaker 2:oh, that's what you were talking about. Okay. So they're number one in the charts. Yeah. That's great.
Speaker 2:Very, very cool. We love having grown the show, and people are having fun because we hit 100,000 followers on X. Thank you to everyone who supported us along the way. They said
Speaker 1:they said it was impossible.
Speaker 2:There's actually two two two clips or hype reels have hit the timeline. We have one showing the evolution of our intros where they they get more and more aggressive every day. Should we throw up this one? Yeah. Let's watch this.
Speaker 1:Play it.
Speaker 2:This is great. Welcome to technology brothers, the most profitable podcast in the world. So passionate. The most profitable podcast in the world. Welcome to technology brothers, the most profitable podcast in the world.
Speaker 2:Welcome to technology brothers, the most profitable podcast in the world.
Speaker 1:I mean, our our house is
Speaker 2:the most profitable podcast in the world. Welcome to technology brothers, the number one live show. Well, I mean, I mean, it's time technology brothers, the number one live show in tech. You're watching TVPN. We're live from the temple of technology, the fortress of finance, the capital of capital, the dojo of the dollar, the shrine of shareholder value.
Speaker 2:You're watching TVBN.
Speaker 1:You're watching TVBN. You're watching TVBN. Watching watching TVPN. Watching TVPN.
Speaker 2:It's much more extreme. Well, thank you to my man for putting that together. Only months apart from the first clip to the to the last incredible growth. Yeah. It's been a lot of fun.
Speaker 2:And then can we pull up this this vibe from James' Foe Drill? This podcast has been growing like wildfire. Recently, we've become the fastest growing podcast in the world.
Speaker 1:We're gonna be doing a bottle of Dom every thousand followers.
Speaker 2:Every thousand followers. Hey. We're live from the Palace
Speaker 1:of party rounds. Oh my god.
Speaker 2:Well, that was the first time you popped that one. I didn't realize it was so true. We are live from the New York
Speaker 1:Stock Exchange.
Speaker 4:One of
Speaker 3:the most, I think, important things happening in broadcasting, it's your show.
Speaker 1:You guys saw it.
Speaker 5:What you guys do is great. I also think that you're transforming the way that media is dispersed each week and it's awesome.
Speaker 6:John and Jordy are gifted. They're gonna fucking blow. I don't know anything. I only I know about podcasts and I know how history's greatest entrepreneurs think.
Speaker 1:I don't
Speaker 6:know anything about anything else. I promise you, there should just be like, here's a fucking pile of money, and next time you have come with an idea, do it.
Speaker 1:Almost everything that I don't like is un American. We get into producing ballets.
Speaker 2:A model that would basically use AI to basically use AI to make AI.
Speaker 1:We are going to win. The temple of technology. The fortress of fights. The capital of capital. You're watching TVPN.
Speaker 1:Wow. What a great edit. Thank you, Chase.
Speaker 2:It's a constant edit. It's really funny.
Speaker 1:Fantastic edits.
Speaker 2:Thank you. Thank you for making that. That was that was amazing.
Speaker 1:They beat us to it. We were working on something post to do something like this, but you guys did it for us. So thank you. Thank you for being a part Thank
Speaker 2:you to Ramp for making all of this possible. They took a shot on us very early and so you should take a shot on them. Ramp.com, Time is Money saved both, easy to use corporate cards, bill payments, accounting and a whole lot more all in one place.
Speaker 1:They did. I I think we had something like a thousand followers when
Speaker 2:Rarely anything.
Speaker 1:Committed to working with us for the year. Yeah. And we are forever grateful.
Speaker 2:Yeah. They made it possible. Yeah. It's been been a fun run. Anyway, the the real top story is, of course, Intel.
Speaker 2:The experts have weighed in. We have some amazing breakdowns from John at Asianometry, Ben Thompson at Stratechery, and Doug O'Laughlin at Fabricated Knowledge Semi Analysis. The true experts have weighed in. We've obviously been following the story on this show, but these folks really know the details and were able to put together a bunch of great analyses mapping out what might happen next. There's a really good video from John at Asiandometry that we should play to hear a little bit of what happens next.
Speaker 2:The the quick recap, as I understand it, is Intel was dominant right up until mobile. Not only did they manufacture the best chips, but they also had an incredible brand from their Intel Inside campaign. These stickers were all over every PC. Intel Inside, it was on every PC that every kid wanted. And I can still hear the Intel sound in my head if you you know that Nope.
Speaker 2:Sound? Wow. Extremely offline.
Speaker 1:Before my time.
Speaker 2:Tyler, do you know the Intel in inside sound?
Speaker 5:That sounds like the Xbox sound.
Speaker 2:No. No. No. Pull up the Intel inside sound. We need this on the on the soundboard.
Speaker 2:This is the only sound we need. I'll just play it here. I think you can play. Oh, yeah. You've never heard this before?
Speaker 2:Let me play this. Oh, come on.
Speaker 1:I do know that sound.
Speaker 2:You know that sound. That's everyone's sound. I take
Speaker 1:it all back.
Speaker 2:Everyone knows that sound. So incredible brand. Right up until 02/2007, the iPhone dropped and
Speaker 1:they used to get they used to play that sound when you would be booting up a Mac?
Speaker 2:I I think that was a different sound.
Speaker 1:Or was
Speaker 2:But it was just all over TV. Yeah. So you couldn't turn on the TV. They they were just wall to wall. And it was interesting because Bounce such
Speaker 1:a underrated, like, medium for
Speaker 2:100%.
Speaker 1:100 been taken advantage of fully in the Internet era.
Speaker 2:I mean, what did I say about the the Super Bowl ad that Ramp ran? I was like, that song at the end is iconic and like this one. I was like, there's something here that you could double down on Switch
Speaker 1:your business to ramp.com.
Speaker 2:Switch your business to ramp.com. Thank you for sake one, Barkley. So it was a very it was a fascinating time because Intel was making the chips, but also designing the chips, then also marketing the chips. And people would buy the computer because of the chip, not just because of the brand, and that just doesn't happen anymore, really. And so in 02/2007, the iPhone launched, and it did not include an Intel chip.
Speaker 2:And this was a bombshell. Instead, Apple selected a Samsung manufactured system on a chip based on ARM, which is a design firm that designs chips and has an architecture that is incompatible with x 86, which is Intel's architecture. Yep. So the reason was into chips from ARM were far more energy efficient than Intel's x 86 processors at the time, and the iPhone needed to optimize for long battery life. There's a debate over whether or not Apple ever had a chance to go with Intel, but it it almost doesn't matter because they went with Samsung, and then eventually they did Apple Silicon, and they stayed on ARM.
Speaker 2:And they went for a more efficient chip, more less power, more less power hungry. And so Intel was just too power hungry, and Intel as a company underestimated how important the mobile market would be to remaining dominant in semiconductors over the long term. Ben Thompson
Speaker 1:identified missed AI.
Speaker 2:Yes. But they didn't miss cloud. And that's what and that's where it gets interesting because so 02/2007, they start missing mobile because of the iPhone. But the iPhone was small, and it was a small portion. It was unclear how much computing was gonna be done on mobile.
Speaker 1:A lot of people weren't taking it seriously.
Speaker 2:A of people weren't taking it seriously. Ben Thompson comes up with
Speaker 1:And there was real reason for that. Good. If you if you were just comping into the PC market and saw Apple's, like, market share within PCs was a tiny
Speaker 2:Totally. Fraction Yeah. Yeah. Yeah. Of the
Speaker 1:overall market.
Speaker 2:Of that. And then also just the idea of, like, what? Am I gonna do my work on a tiny phone? Like, that's so it's such a stretch. Even if, yeah, the the okay.
Speaker 2:I can text a little bit better, but but I'm not gonna be doing a lot of work on here. And now, it's like the it's like the device of CEOs. Like, CEOs, like, don't even open computers anymore. So Ben Thompson came up with this thesis in 2010 that Intel needed to pivot and and really double down on going into foundry mode. Not founder mode, but foundry mode.
Speaker 2:They needed to get other customers to design chips that were specific for what those customers needed, and then Intel would make the chips and act as a foundry. He launches the blog Strtechery in 2013. It's one of his first posts. Intel needs to build a foundry. Legendary call.
Speaker 2:Now interestingly, he, by his own account, says that wasn't a good trade recommendation because for the next eight years, Intel ripped because of cloud computing. Because as mobile was growing, cloud was also growing because what does your phone need to talk to? It needs to talk to a server in the cloud. So the cloud was growing. AWS is growing.
Speaker 2:GCP, Azure is growing. And so Intel's selling a lot of CPUs into e c two instances on Amazon, a in the AWS. And Intel's business is doing fine until AI comes around, and they miss that as well. And now they miss mobile and AI, and they're and they're just falling falling behind. And then now the cloud is starting to look at, hey.
Speaker 2:Well, actually, the power trade offs of ARM now are actually pretty good, and so maybe we should do, you know, different chips in the data center. So they are facing pressure in a lot of different ways. Now that type of pivot would have been really antithetical to Intel's culture. They would have had to build a customer service organization. And Intel was so dominant.
Speaker 2:It was like this center of excellence ever. It had the best people. And so they weren't used to saying, oh, yeah. Like, let's do what the customer says. It's like, no.
Speaker 2:We know what's best. We make the best thing. And you decide When you're
Speaker 1:on a roll, that works really well.
Speaker 2:Exactly. Exactly. And so who knows if they could have did they could have done it. They actually did, as we talked about yesterday, they did try and spin up a little bit of a foundry for these FPGA startups, but it was always a small piece of the business. Mhmm.
Speaker 2:But basically, like, if you need a very specific chip to do, like, networking or or encryption in a data center, it's like a special chip. They would do that, but with a small startup. And they never really pushed into it. They never went for, like, the big, like, wins like Apple. And so because of the cloud boom, Intel performed quite well throughout the twenty tens.
Speaker 2:But the AI boom is a different story. Intel's far behind now and can't simply and simply cannot afford to build their new cutting edge manufacturing facility without external customers, and no one wants to work with Intel right now. But big companies do wanna stay in the good graces of the US government, and that's the bull case for Intel here. If big tech companies get art of the deal into putting large enough orders into Intel to underwrite the completion of their new 14 a foundries, that's the big Ohio plant that is estimated to cost something like $40,000,000,000 in orders to kind of make it math out. They they don't need to go to head to head with NVIDIA.
Speaker 2:NVIDIA they they don't need to win the GPU market necessarily, And we'll get to this with the video. John at Agenometry argues that NVIDIA should buy CPUs from Intel. So NVIDIA sells a CPU called Grace that they pair with Hopper, which is Grace Hopper, which is the name the namesake of the system. And that's not an in that's not an x 86 chip. But there's no reason why NVIDIA couldn't license CUDA and the design to Intel and say, hey, Intel, you're gonna be our manufacturer for that Yeah.
Speaker 2:Because Intel's not a manufacturer. So realistically, Intel should be able to say, hey, yeah. We'll we'll go
Speaker 1:to Intel. We'll go to TSC. Whatever
Speaker 2:gives us leverage.
Speaker 1:That the government and Trump have a stake in Intel. You can imagine Trump Yep. Really leaning on Jensen to make something like this happen.
Speaker 2:And and Trump also has some leverage over NVIDIA because he's taking this 15% kind of questionable export tax. And so you can say, hey, Jensen, like, how about I make that go away and you give Intel a little bit of bit of business? Or, oh, like, I'm gonna threaten a really crazy tariff and I'll pull it back if you work with Intel.
Speaker 1:Yeah.
Speaker 2:And so that's kind of the bull case here that people are are kind of coalescing around the experts who I trust on this issue. And so if Trump was able to strong-arm NVIDIA with a somewhat legally dubious 15% export tax, getting Jensen and Lip Buutan in the same room today to hammer out a deal, doesn't seem like the craziest idea. And there are other tech companies that might play ball too. This is an expensive gambit. Ben Thompson estimates Intel needs 40,000,000,000 in demand to make the Foundry play pencil out.
Speaker 2:But big tech companies are spending almost 10 times that collectively, and they all and they all still take the president's phone calls. So let's play the Asianometry video right here. Perfect. He's gonna be in California, by the way, or Arizona. So we should go.
Speaker 7:So what seems most likely about to happen is that the United States government and a few aligned investors first take a stake in Intel. The government puts up money to finish the fab in Ohio, then raises tariffs to a high number with some carve outs to satisfy the crowd.
Speaker 2:That's the $20,000,000,000.
Speaker 7:And then they will apply pressure to the tech giants to get them to throw some orders at Intel Foundry. There's a comment on the WallStreetBets thread on the story that succinctly lays down the sentiment. Dude is 100% gonna nudge, quote unquote, Apple and Nvidia to use their 14a foundries. This is gonna skyrocket by EOI twenty twenty six in the hundreds. Doug O'Laughlin of Fabricated Knowledge agrees and adds that pressure might also be applied onto the semiconductor equipment companies too.
Speaker 7:Additionally, forcing semiconductor companies like KLA, Applied Materials and Lam Research to invest and give resources in exchange for approved licensees is another example of a carrot and a stick. A few companies have already started to turn on this perceived trajectory. For instance, just as a right stick, Intel has announced that SoftBank
Speaker 2:We need a we need a stick and a carrot in the studio for sure.
Speaker 7:Considering how Masa invests, I'm not surprised he's first through the gate. There's news that he was in talks to buy Intel's fabs. Maybe that will happen by the time you see this. As I said before, this seems to be what the plan is.
Speaker 2:Coalition of the unwitting. Okay. We can stop with that.
Speaker 8:Intel.
Speaker 2:It's a great video. You should go subscribe to Asianometry on YouTube and and get a I think it's part of the Strathecari bundle. If you go for the bundle, you get access to john at Asianometry's blog post as well, which
Speaker 1:are
Speaker 2:fantastic. And I've been going deeper into the Asianometry YouTube and there's so many good Intel videos and the guy really understands the history. Apparently, isn't the first time that the US government has tried to reassure manufacturing, in particular technology. He highlights the the DRAMs like this memory gambit that happened in the eighties, and it didn't really work out. And he kind of kinda draw some analogies there.
Speaker 2:Anyway, John, next time you're you shouldn't just upload that you that YouTube video. You should stream it on restream, one live stream, 30 plus destinations, multi stream and reach your audience wherever they are. Put a restream. Anywhere. So Saga and Jetty is quoting Ben Thompson on the Intel 10% stake.
Speaker 2:Quote, the single most important reason for The US to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise without having skin in the game. So it's not just a lender of last resort. It's actually just a commitment that there will always be some level of US manufacturing on the leading edge, which is what Intel's trying to trying to do here with this foundry and what they have been so far unsuccessful at drumming up customers for. So
Speaker 1:Yep.
Speaker 2:He Sager shares some screenshots from the Strathecari article. Given all of this, acquiring 10% of intel, terrible, though it may be for all the reason Lidsicombe articulates, and I haven't even touched on the legality of this move, is I think the least bad option. In fact, you can even make the case that a lot of what Linzicom views as a problem has silver linings. Intel deciding to stay in manufacturing is arguably not making a political decision, not a commercial one. However, it is important for The US that Intel stays in manufacturing.
Speaker 2:It it is a political issue. Intel prioritizing government interests, which are inherently focused on national security and the long term viability of US semiconductor manufacturing over their fiduciary duties could just as easily be framed as valuing the long term over the short term. Had Intel done just that over the last two decades, they wouldn't be in this position. So America is setting Intel up to be able to make that multi decade decision. Yep.
Speaker 2:It's gonna be a lot of pain. But then eventually, hopefully, they'll be back on the leading edge.
Speaker 1:Yeah. I remember, it was felt like two or three weeks ago, Le Puton was just focus like, you could imagine the morale at Intel just being absolutely abysmal because it was just cut after cut after cut versus, you know, any time any type of obvious long term strategy of getting back on the leading edge.
Speaker 2:Yep. Other companies being pressured to purchase Intel products is exactly what Intel needs to not be to not just be viable in manufacturing, but also to actually get better. If TSMC and Samsung are disadvantaged by not making chips in The US, that's a good thing from a US perspective. Both companies are investing here. The US wants more.
Speaker 2:Private capital prioritizing US manufacturing is a good thing. I remember when the CHIPS Act was still break was first breaking, Ben Thompson was advocating for something that looked a little bit more like Operation Warp Speed, where basically the government instead of and this is what they do in China too, where instead of saying, like, okay, we're just gonna give 20,000,000,000 to Intel because, like, we pick them and they're good. It's more like Guaranteeing This US is gonna be a buyer at this price. So if you make it in America, we'll buy it. And this is what's happening with MP Materials right now.
Speaker 2:The DOD invested, I think, 500,000,000, but then also said, hey. We will buy all the magnets at this price. If you can go sell them at a higher price than somebody else, do that. But you got us, and we'll just build a stockpile. Yeah.
Speaker 2:And so you can imagine The US being like, yeah. We'll build our own data center, and we'll try and lease it out. And maybe we take a loss if if there's, an overbuild or something. But but it it it could very well pencil out. And if demand for these chips is actually higher, then you'll just sell them to someone else.
Speaker 2:We won't even need to buy them. Yeah. So just acting as, that that that stop gap actually makes more sense, maybe. But the like, so many of these decisions were already made that this is probably in this moment in time what made the most sense. And then private capital prioritizing US manufacturing is a good thing.
Speaker 2:Ben Thompson closes this little quote out by saying, the single most important reason for The US to own part of Intel, however, is the implicit promise that Intel Foundry is not going anywhere. There simply isn't a credible way to make that promise without having skin in the game, and that's now the case. So, of course, go subscribe to Stratechery. Go go subscribe to Fabricated Knowledge, Doug O'Laughlin is saying. Not gonna lie, a lot of people who are mad at Trump for everything can't see the genius of the intel investment.
Speaker 2:I mess with it massively. I love I love the way he posts there. It's great.
Speaker 1:Doug messes with it, everyone.
Speaker 2:Yeah. I'm I'm I'm up I'm messing with it. But I'm I'm mostly deferring to the to the experts on this.
Speaker 1:Trust the experts.
Speaker 2:Anyway, if you are designing not a chip but something else, get on Figma. Think bigger, build faster. Figma helps design and development teams build great products together and get started for free. Figma.com. David Senra, you saw him in the Vibrio.
Speaker 2:He just dropped a fantastic episode called How Elon Works. It was a very interesting process. He outlined it for us on the show. Basically, the latest book on Elon is more of like news. I think it's Walter Isaacson's and it's more of like news articles minute by minute.
Speaker 2:Yeah. And so it's It's a play by play. It's a play by play.
Speaker 1:Less of a playbook.
Speaker 2:Yes. And so Senro wanted to transform it into a playbook and he did that by I think he read the book like seven times or something insane. But he he like turned he took notes on it then read it seven times and then, you know, he he does his process.
Speaker 1:He did real actual deep research. Not such Seriously. A
Speaker 2:But I really enjoyed it and I think you'll enjoy it too, so you should go listen. But the interesting thing that I liked about it was that it it helped me it helped me understand a little bit what's going on with Starship because we've seen so many setbacks with that program. And when you actually listen to how you like like the risks that Elon takes, it is crazy. So first first one is that he is not interested in achieving any sort of short term goal. He only wants to develop a system that can do something a million times.
Speaker 2:And so that says that that has a much higher bar than building, like, one exquisite rocket that gets there and has, like, okay. Yes. We spent we spent five years. We made sure that every screw was in the exact same place in the perfect place and everything was designed flawlessly so that we could get up there. And then the next time we wanna do it, it's gonna take another five years and another $10,000,000,000.
Speaker 2:He's like, no. Like, the thing that we're going to design needs to be able to go every single day. So it needs cheap and fast and
Speaker 1:And we need to be able to copy and paste it.
Speaker 2:And paste it. And so I I think the manifestation of that is that is that, like, the like, you're gonna have a lot of failures early on. Yep. But then once it gets polished up enough, it's gonna start it's gonna start churning and and you're set up for much more scalability. The other example he gave was, like, you would go around the the manufacturing line and just be like, why are you using four screws there?
Speaker 2:Do you think you could use two? Like, save a little weight. Like, do something. And the person would be like, well, like, two screws, like, thing might fall apart. He's like, we'll try it.
Speaker 2:Like, just try it and we'll see how it goes. And and if you imagine that manifesting in the Starship program, it's like, how many of those experiments are there? It's like, yeah, that one, you actually need three screws at least. You definitely can't do it with two screws. And so I imagine that there's tons and tons of those little decisions that, like, once you get like, instead of instead of starting with, like, the exquisite system and then tearing stuff down, with this, it definitely seems like you started with, like, the bare minimum and then just, like, adding things back to like keep it stable so that it actually will will work.
Speaker 2:But when it works, it should it it should be very very very cheap, very reliable and actually solve Yeah.
Speaker 5:Economic equation.
Speaker 1:This Starship launch, the timing with everything that's been going on in xAI world recently, this launch feels more important than the last few Yep. In the sense that Elon and the SpaceX team don't wanna give the the haters material.
Speaker 2:Totally. Totally.
Speaker 1:And so, this current launch has been delayed a couple times. It's currently slated to to they're they're gonna attempt it as of now in five hours
Speaker 2:Okay.
Speaker 1:Later today. Yep. So hoping this one gets off the launch pad and does well. Right? Because if we get one another one of those, you know, fireworks shows
Speaker 2:Yep.
Speaker 1:I think that Elon is gonna wanna log off x for
Speaker 2:a little bit. Yeah. People are gonna be talking trash talking trash.
Speaker 1:Or at least pause the Ani posting for at least twenty four Yeah.
Speaker 2:Well, if you're building a business that's going to space, you gotta stay compliant, you gotta get on vanta.com, automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program. In other news, Taylor Swift is getting married. Private jet enthusiast. Well, I I feel like most of our audience would know her for her Wall Street Journal op ed in 2014
Speaker 1:Right.
Speaker 2:Where she said for Taylor Swift, the future of music is a love story. Right. Where will the music industry be in twenty, thirty, fifty years before I tell you my thoughts on the matter? You should know that you're reading the opinion of an enthusiastic optimist. Of the
Speaker 1:few Enthusiastic souls. Being there.
Speaker 2:Yeah. One of the few living souls in the music industry who still believes that the music industry is not dying. It's just coming alive. There are many, many people who predict the downfall of music sales and the irrelevancy of the album as an economic entity. I am not one of them.
Speaker 2:In my opinion, the value of an album is and will continue to be based on the amount of heart and soul an artist has bled into a body of work and the financial values and the financial value that that artists and their labels place on their music when it goes into the marketplace. Piracy, file sharing, and streaming have shrunk the numbers of paid album sales drastically, and every artist has handled this blow differently. In recent years, you've probably heard the articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they all realize their worth and ask for it. Music is art and art is an important is important and rare.
Speaker 2:Important rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free and my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or underestimate or or undervalue their art.
Speaker 1:So did she get this right? To date? Not really.
Speaker 2:I think she I think she got the thing that she got right is that what an album is can be extremely monetized if you continue to think about what like the album is scarcity. Like, you either have it or you don't, and the Internet kind of reduced that scarcity to zero because you could stream it, you could pirate it, but there is still scarcity to be created if you are an artist, if you are a musical artist. And so the way she does that now is when she releases an album, she goes on a tour that becomes so big that again, there is scarcity because there are only so many tickets at SoFi Stadium and you have to be there Yep. Because it's a moment monetized.
Speaker 1:Yes. Recording artists of all time.
Speaker 2:Yes. Yes. And so she gets the long tail eventually. And eventually, her her music is essentially free and played in in grocery I'm gonna read
Speaker 1:you something from their Instagram caption announcing the engagement.
Speaker 4:Yes.
Speaker 1:It's not just a marriage dash and dash.
Speaker 2:No way.
Speaker 1:It's the perfect love story.
Speaker 2:No way. No way.
Speaker 1:Smack on x is calling this out saying claiming that Taylor and Travis are one shot at.
Speaker 2:No way. What you got Tyler? Was that
Speaker 5:No. Oh, I was gonna say something about like her like monetization like
Speaker 1:Yeah.
Speaker 5:Kyla Scanlon has this good post. She said, Taylor Swift's engagement is actually very relevant to monetary policy
Speaker 2:Mhmm.
Speaker 5:Because she is the most powerful stimulus tool we have.
Speaker 2:Oh, really? How so?
Speaker 5:Well, I mean, her her tours are, like, massive. Like, you can see the, like, rise In in
Speaker 2:consumer spending? Yeah. Oh, interesting.
Speaker 5:Especially, like, smaller countries, it's, like, very notable.
Speaker 2:Yes. Yes. But but how does her being married like,
Speaker 1:she could
Speaker 2:just go on tour and be single. Right? Is she gonna sell more tickets because she's married now? Does it allow her to tour more?
Speaker 5:You could also see it in a lot of people are talking about birth rates. Right? So maybe a new boom. Yep. Baby boom.
Speaker 1:Yeah. Catherine Boyle just posted a picture and just said with the caption captioned American. Their pictures pictures just said American dynamism. American. I do think this will be good for the birth rate.
Speaker 1:It's it's also gonna be some some for anybody that's in a longer term relationship in their late twenties, early thirties Yeah. Pressure is now on. Yeah. These photos are gonna be getting sent around. They're setting a new bar.
Speaker 1:Quite the floral display by Yes. Travis. Gotta give him props there.
Speaker 2:How many how many kids do you think she'll wind up having?
Speaker 1:She's 35.
Speaker 2:She's 35.
Speaker 1:She's gotta get going.
Speaker 2:Oh, yeah. Nineteen eighty
Speaker 1:And hopefully, a ton. Right? I mean, I think we'd like
Speaker 2:see luxury status symbol, apparently.
Speaker 1:I'd to see at least 10.
Speaker 2:Yeah. It'd be great. Well, if she wants to manage her family's plans, she should get on linear linear as a purpose
Speaker 1:built tool for planning and building products. Meet the meet the It's a family planning tool. Meet the He could make it work for it.
Speaker 2:For modern software development, streamline issues, projects, product road maps, start building. I don't know. She could probably use linear. She's probably developing software and websites and stuff. Anyway, what we should talk about is this post from Robert Sterling, the only form of wealth that's ever mattered, screenshotting the Financial Times.
Speaker 2:The ultimate status symbol, a big family. So the Financial Times writes, a flex of Uber wealth in 2025 is multiple children, all the while preserving pre parenthood lifestyle interests and physique. What is the ultimate luxury status symbol, Jordy Hayes? Once upon a time, it may have been flaunting a rare handbag, sports car, or flashy watch. But with the soaring costs of living and shrinking household sizes and depreciation of of Taycons, sports cars are now are now
Speaker 1:They're giving Taycons away.
Speaker 2:Giving Taycons away. The only thing that you need that that you can flex your wealth with is having kids, specifically lots and lots of them, says the Financial Times. For most working parents, quote, and particularly those living in cities, even to have one child comfortably is a major economic calculation that requires considerable financial stability, says Eliza Philby, author of Inheritocracy. It's time to talk about the Bank of Mom and Dad. Well, that was also true historically when having an enormous brood was bolstered by a need for labor, religious imperatives, and preserving family legacies in the face of high infant mortality.
Speaker 2:Children today aren't a source of positive household cash flow. They are a drain on it. But
Speaker 1:I think We gotta turn this around. We gotta put these kids to work.
Speaker 2:We gotta put them in the mines. In the in in the Minecraft or
Speaker 1:Get them on if you if you got a if you got once once your kid hits three, you should set them up with a WAP account and
Speaker 2:I was about say, hey,
Speaker 1:hey for college. Yes. Yes. Do it. Don't Yeah.
Speaker 1:Don't make mistakes. Actually, make some mistakes but figure it out.
Speaker 2:Hey. I mean, in the Stevens household, you have to pay the bills, making making tech decks.
Speaker 1:Start making start making courses for other three year olds. How to be a three year old. Yeah. Don't don't expect official course.
Speaker 2:The the andoril chairs to pay for your college, buddy. There's only so many of those to get around. We're not selling. We're you're still long. You gotta pay for those with with skateboards.
Speaker 2:The reality is that middle class parents do not support kids to 18. Philby says that for families who can afford to, it's often closer to 30. Wow. With costly childcare, a lack of family support systems, and a global trend of
Speaker 1:Hiring women childcare for their 25 year olds?
Speaker 2:I guess.
Speaker 1:Yeah. In some cases.
Speaker 2:Conceiving children later, there is a feeling that one child is increasingly the norm for dual income households, Philby says. Two is a bit of a push, and three or more is just an is not just an anomaly. You need to be super rich. Officially official birth rate figures in many countries have hit all time lows. In The UK, the Office for National Statistics says that the fertility rate is 1.44 children per woman, while in The United States, that figure is 1.6.
Speaker 2:In some Asian nations, such as Japan and South Korea, the rates are one point two and point seven five, respectively. I was talking to somebody who is very bullish on South Korean tech because of AI and a lot of the companies that they sell.
Speaker 1:SK Hyner.
Speaker 2:Yeah. And there's a whole there's a whole ton. I I think there's there's there's there's like they have their own like S and P five hundred of like really really great companies.
Speaker 4:They have
Speaker 1:their own. TBPN.
Speaker 2:They do. They do. But I had no idea that the birth rate was so low
Speaker 1:point That's crazy.
Speaker 2:Seven five is really really low. So they gotta turn that around. But while one and done may be booming as a cornerstone of modern middle class parenting culture, so too has a fetishization of the opposite end of the spectrum. In other words, ogling extremely wealthy figures in the public eye whose picture perfect families never seem to stop growing. Behold the fixation of frazzled millennial working women and others with the trad wife movement, a social media phenomenon that glorifies homesteading, milkmaids, and taking care of your husband and offspring.
Speaker 2:Its brightest star, Hannah Neelman Neelman? I don't know. A ballerina farm has attracted a 10,000,000 strong following on Instagram. Thanks in no small part to her eight immaculately disheveled blonde children with her husband, Daniel Neelman, the son of JetBlue founder and airline mogul David Neele.
Speaker 1:Hopefully, sold before JetBlue became a penny stock.
Speaker 2:Oh my god. Yeah. Get out. Get out.
Speaker 1:Get out.
Speaker 2:In the celebrity orbit and beyond the trials and tribulations of ever expanding Kardashian clan. Alec and Hilaria Baldwin sent the Internet into meltdown earlier this year with a t TLC reality television series called The Baldwins. I had no idea this was a thing. Documents between their Manhattan apartment
Speaker 1:Try to pull up this picture.
Speaker 2:East Hampton Mansion with their seven children and eight pets. I had no idea Alec Baldwin had seven children, eight pets. I wonder what pets he has. Huge fan.
Speaker 1:You know you know that you know that Hailey Bieber is Alec Baldwin's daughter?
Speaker 2:No. Is that Am
Speaker 1:I am I right on this, guys?
Speaker 2:Wait. What? Yeah. That's true? Way.
Speaker 2:Okay. Learn something new every day.
Speaker 1:Pretty sure that's true. Yeah. Might need the truths on it. Yeah. No.
Speaker 1:No. No. Uncle and niece.
Speaker 2:Uncle and niece. Okay. So they are Okay.
Speaker 1:Okay. Okay. Yeah. Got it. Interesting.
Speaker 1:Here here's the picture of Alec Baldwin and his family still just pumping them out.
Speaker 2:Looks great. Looks great. Take those kids to a wander. Find your happy place. Book a wander with inspiring views.
Speaker 2:Hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge services. It's a vacation home but better folks. Anyway, huge families are increasingly visible among the 1%, especially in some of the world's wealthiest and most competitive enclaves such as New York City in her widely read, if controversial book, Primates of Park Avenue, Wednesday, Martin member memorably observes that massive families, they were everywhere on the Upper East Side, a neighborhood with some of the most expensive real estate, schools, nannies, hobbies in America. Jordy, what were you about to say?
Speaker 1:I was about to dive into that. Oh. Four is the new three. Previously conversation stopping, but now nothing unusual, she writes. Five is no longer crazy or religious.
Speaker 1:It just means you are rich and six is apparently the new townhouse or Gulfstream. According to a study by Forbes of more than 700 American billionaires, at least 22 have seven or more children. Yeah. Often from multiple marriages and adoption including perhaps most famously Elon Musk regularly named the world's richest man. Musk has become a poster boy for billionaire procreation and a vocal proponent of pro natalism which he sees as vital to humanity's survival and declining birth rates.
Speaker 1:Fascination with the Uber elite with how they live their lives and run their households is not new. A raft of high end fashion and consumer lifestyle brands have turned to notions of parenting with almost unlimited resources and incorporated them into their product offerings and marketing efforts. Artapop offers $800 velvet and cashmere baby carriers that have been heralded as the Birkin of mom gear.
Speaker 2:Heralded. Heralded. Heraldo Rivera.
Speaker 1:Heraldo. Rebranding wearing a baby
Speaker 2:Is an ultimate luxury accessory.
Speaker 1:I mean
Speaker 2:It is the ultimate luxury accessory. Much like having graphite in your software development team. 100%. I was kinda there's there too. It's the burkin of code review.
Speaker 2:Graphite.dev, code
Speaker 1:review for among
Speaker 2:Graphite helps teams on GitHub ship higher quality software faster. You can get started for free. If I don't mention Pavel Durov in here, I'm going to stop reading.
Speaker 1:Anyway. I still when I'm walking around with my one year old and my my three year old Yep. People often assume that I'm the uncle Mhmm. And and are surprised.
Speaker 2:Because you're young?
Speaker 1:Yeah. Oh. Just Okay.
Speaker 2:Yeah. Yeah.
Speaker 1:It's it's still Sure. Sure. Seems wild even though if you go anywhere slightly off the coast Yeah. Yeah. Yeah.
Speaker 1:It it starts to become commonplace.
Speaker 2:Yeah. Super normal. Yeah. It is interesting that if you if you actually look at if you look at birth rate trends by income bracket, for a long time, the higher the the the the like, the lower income cohorts would have more kids. Yeah.
Speaker 2:And so technically, I think from an from an economics perspective, having children was an inferior good. It was something you did more. It was like the equivalent of Costco. It's like the opposite of what they're saying here. Yeah.
Speaker 2:But really, what we're identifying is like is like there's a there's a barbell effect where Totally. At the high end, you get a lot more kids. And at the low end, you get a lot of kids. But in the middle, there aren't that many kids. Yeah.
Speaker 2:And this is
Speaker 9:I'm gonna make
Speaker 2:a movie reference that you haven't seen, so I won't even try.
Speaker 1:Hit me. Hit me. There's a 1% chance.
Speaker 2:Idiocracy. Nope. We should pull up the intro to Idiocracy because it is hilarious.
Speaker 1:John Ross in the chat says Nick Cannon has 12 kids.
Speaker 2:That is crazy.
Speaker 1:That is a big number.
Speaker 2:Wow.
Speaker 1:Very good. I think I mean, it's it's it's also I'm guessing that's across a number of different relationships. It is. It is. Yeah.
Speaker 1:Yeah. Nick Cannon.
Speaker 2:Okay. So mini me designer collections and $600 high tops allow an army of children to dress like their parents as well as one another. And white labels such as Patek Philippe and Dolce and Gabbana have long placed glamorized visions of family at the heart of their advertising campaigns. Of course, you never own a Patek, you merely hold on to it for the next generation or patek as they say. Newer efforts from Bottega Veneta and Berber
Speaker 10:and Oh,
Speaker 2:yes. You wanna play this? This is the I I think this is the intro to to Idiocracy. Let's play this.
Speaker 10:Was at a turning point. Natural selection, the process by which the strongest, the smartest, the fastest reproduced in greater numbers than the rest. A process which had once favored the noblest traits of man now began to favor different traits. Most science fiction of the day predicted a future that was more civilized and more intelligent. But as time went on, things seemed to be heading in the opposite direction, a dumbing down.
Speaker 10:How did this happen? Evolution does not necessarily reward intelligence. With no natural predators to thin the herd, it began to simply reward those who reproduce the most and left the intelligent to become an endangered species.
Speaker 6:Having kids is such an important decision.
Speaker 11:We're just waiting for the right time. It's not something you wanna rush into, obviously.
Speaker 6:No way.
Speaker 12:Oh, shit. I'm pregnant again. I
Speaker 1:got too many damn kids. I thought you was on the pill or some shit.
Speaker 2:Hell no. Must have
Speaker 1:been thinking of Brittney.
Speaker 12:Britney? No. You don't. What?
Speaker 11:There's no way we could have a child now. Mhmm. Not with the market the way it is. No.
Speaker 6:No. That just wouldn't make any sense.
Speaker 2:Come on over here, bitches. He doesn't care
Speaker 12:about you. Yeah. Well, there must be something he likes over here. Mean nothing to me, baby? No.
Speaker 1:It wasn't me. It wasn't me.
Speaker 11:Well, we finally decided to have children, and I'm not pointing fingers, but it's not going well.
Speaker 6:And this is helping.
Speaker 11:I'm just saying that before I have in vitro, maybe you should be willing
Speaker 6:to It's always me. Right? Well,
Speaker 11:it's not my sperm count.
Speaker 1:Yeah. Yeah. I'm gonna fuck all you. Okay. Okay.
Speaker 1:We gotta cut this off.
Speaker 2:You get the idea.
Speaker 1:I get the idea.
Speaker 2:Decision fatigue from the from the 138 IQ.
Speaker 1:Simply too smart to have kids.
Speaker 2:Too smart to have kids. Anyway, let's continue.
Speaker 1:Yeah. This is an interesting line. So
Speaker 2:Yep.
Speaker 1:There's been a, you know, other brands. Bottega Veneta has has had a campaign with Is
Speaker 2:that which big
Speaker 1:has been cool. I I thought this campaign was brilliant. The there's a line here. Healy thinks these campaigns come at a time when the luxury industry is struggling to maintain its cultural relevance reflected in a cooling appetite for products as social signifiers in a fall in global sales. Focusing on family reflects an attempt to move into the realm of behaviors and values and away from physical things.
Speaker 2:Mhmm.
Speaker 1:You can't dupe having a family Mhmm. Healy says. It's a, you know, you could get a dupe of a of a Birkin or or
Speaker 2:something Sure. Oh oh, that's a dupe is Or
Speaker 1:or something from the row or whatever. Yeah. Every luxury brand gets knocked off immediately. Healy says it's a very long term commitment, not to mention one of the most significant and transformational that you can make in your life. But it's not just having kids.
Speaker 1:It is venerated by brands and vaunted as a status symbol. It's about how you're having kids and to what extent you can maintain your pre parenthood lifestyle. For many celebrities, this means an army of childcare support. Kim Kardashian is said to have 10 nannies on a twenty four seven rotation for four children while the Baldwin family have two on staff. Yeah.
Speaker 1:That feels low for how many kids I saw in that picture to be honest. Yeah. Child care positions in The US of this nature can easily command annual salaries of more than 200,000 though his more standard wage would be closer to 85,000. Still paid support of any kind remains an unobtainable luxury for the majority of families. Yeah.
Speaker 1:For for me, I I noticed this. I I noticed the jump in, you know, how how I was living at at 25
Speaker 2:Mhmm.
Speaker 1:Pre kids Mhmm. Realizing as soon as you add kids, everything that you do, whether it's where you live and how you travel becomes travel instantly becomes, you know, if you're staying at nice hotels and now you're traveling and you gotta get a hotel for your nanny, you gotta get a hotel for your kid Yep. Then a hotel room for your kid, then you add a then you add a second kid and so now you need, in some cases
Speaker 2:We have nannies. You need Apparently.
Speaker 1:Three extra rooms. Yep. One for the nanny, one for each kid Yep. One one for the couple. And so the actual like cost of of something as simple as a weekend trip can can four x
Speaker 2:pretty Yeah.
Speaker 1:And it certainly inspires you to grind harder in my experience.
Speaker 2:100%. This version of parenthood doesn't mirror the experience of most people. Healy says there's a version where you're still constantly meeting friends, returning to your pre baby body, showing up at the club or late night event, not being tired all the time, moving out to the suburbs, or wearing clothes with milk splattered over them. Fashion has always traded on allowing us to project something a little bit better than we are, But having a large family also sends a signal of confidence in the future.
Speaker 1:We're also the generation that grew up with suburbs being bad and something to avoid. Yeah. As as an adult with kids, I realized the suburbs are incredibly underrated.
Speaker 2:Yeah. Heard it from doctor Drew yesterday. He lives next to a golf course. It's amazing. A demographic that may feel more secure than most, those with more money.
Speaker 2:Musk paints his pronatalist vision in stark terms and has some highly unorthodox personal family values. But among the traditional conservative right whose social media sway is growing and who champion Americans having a large household, the question of who should be having more babies is an uncomfortable one. A sizable portion of the extremely wealthy pro natalists say they want us to use breeding to fashion a better human race, Philby says. But the current fetishization of being a mother of multiple children can reduce women to a kind of birthing machine fulfilling her social societal duty and demonize women working incredibly hard and contributing economically toward society who are having few fewer or no children whether by choice or necessity. I think Nadia Asperjov had a good rebuttal to that, which is that tech can certainly embrace and and and kind of invalidate this false dichotomy by creating a more welcoming ecosystem and not like noveling Yeah.
Speaker 2:When a woman shows up
Speaker 1:It's yeah. I mean, it's interesting to note that a lot of the technology that we take for granted today makes parenting like a little bit easier Mhmm. But not dramatically
Speaker 6:Yeah.
Speaker 1:Easier. Right? The sort of I think people people tend to judge, you know, the Yeah. The the family out to dinner with the kid on the iPad. Yeah.
Speaker 1:And if you haven't had kids, you don't realize that that many kids It could be so not be able to
Speaker 2:strap the VR headset right on.
Speaker 1:Yeah. You have to deal with them at all. And just bolt them down
Speaker 2:Lock them in.
Speaker 1:To the to the
Speaker 2:Lock them in. Yeah.
Speaker 1:To the kid seat. Yeah. Yeah. And then just fully locked in.
Speaker 2:No. When I when I go out to the
Speaker 1:The high chair.
Speaker 2:Yeah. No. Yeah. When I go out to the the restaurant, I bring the full racing rig with the wheel, steering wheel, and the pedals
Speaker 1:Oh,
Speaker 2:okay. And the VR headset. And I'm just like, lock in, brother. Lock in. You're going
Speaker 1:You gotta you gotta beep
Speaker 2:We're doing the Nurburgring.
Speaker 1:Doing the Nurburgring. We're not gonna I don't wanna
Speaker 2:hear a peep out of you. No. I'm not having a not wasting time with an iPad kit.
Speaker 1:No. But I mean, we we, you know
Speaker 2:Step it up.
Speaker 1:We we've tried the the iPad here and there. We don't we don't do it anymore. The kid is I completely strolled myself. The kid is just know, my my three year old will just run laps around the restaurant for like two hours straight. And it's cool because he likes to socialize and walk up to other tables and and like try to grab a french fry or something.
Speaker 1:Yeah. Oh, yeah. That's a little bit.
Speaker 2:Yeah. No. I love it. I love when running around the just being crazy. It's so funny.
Speaker 2:Nothing brings me more joy.
Speaker 1:Yeah.
Speaker 2:Because I'm like, that's what I wanna do.
Speaker 1:Yeah. I wanna get some
Speaker 2:stretch my legs right now. I don't wanna sit in here.
Speaker 1:My my little guy was stood up. We were at we were at a little beach house in Malibu and he's just stood up. The last time we were there was a Sunday. There was a DJ playing. He just put his chair up next to the DJ stand and just stood on it.
Speaker 2:Yeah. Yeah. IPad thing is like a is like an endless source of trolling for me. So the four year old's like, oh, for my next birthday, like, think I want like a tablet. I'm like, oh, like what?
Speaker 2:Like, you want like because, you know, some kid like told them like that they're the most incredible thing in the world, of course. And I'm like, yeah, like like, let's make one, like, out of cardboard. Yeah. So we're
Speaker 1:like I'll buy I'll buy you a CPU.
Speaker 2:Six hours into a crafting project where you're like, what do you wanna what do you do you want on the screen? Let's draw it on with crayons. We're just six hours into this like, oh, you wanna have a he was like, I want I want one for my birthday. Was like, oh, so you want the you want the theme to be like tablet based technology? Like, we'll bake you a cake that's the shape of an iPad.
Speaker 2:And he's like, no. No. I want the actual I'm like, iPad cake coming your way, buddy. Don't worry about it.
Speaker 1:Don't worry. Got
Speaker 2:you. Paper mache iPad pinata that you will smash and get candy out of
Speaker 1:Yep.
Speaker 2:That we will make by hand.
Speaker 1:But but I think you'll have
Speaker 2:to wait. You'll have to assemble one on your own with a box of scraps in a cave. That said, following trad wives or billionaire spouses with lots of children on social media isn't necessarily a retreat into the home and history. As with many objects of aspirational focus, sometimes these trends are rooted in a type of parasocial cosplay exploring styles of life and livelihood that are far removed for from or will never be our own nor do we really want them to be. Much of the Internet is consumed as if it's a type of speculative fantasy fiction.
Speaker 2:Healy says, the ballerina farm family, for example, represents a vision of economic security. This is so much Diet Coke. Clearly defined gender roles and a certain degree of purpose. People might engage with it as a type of entertainment or escape, but many will also look at it and think in the real world in 2025, in no way do I actually want that. Why not?
Speaker 2:I yeah. I want don't know.
Speaker 1:The more, the merrier.
Speaker 2:The more, the merrier.
Speaker 1:Within reason. Within reason. No. I do I do think it I I think that anecdotally from from what I've seen in my social circle outside of work, I do think that kids are 100% a status symbol. I also think it's incredibly unfortunate that it's gotten to that point.
Speaker 2:Yeah. I wish there was a Polymarket on the birth rate. I don't know if there is. We are, of course, sponsored by Polymarket and you can see the Polymarket's on the on the ticker. We will we will need to spin up something.
Speaker 2:I wanna see if
Speaker 1:something mean, there's already a there's Polymarket on on the on the Swifts. Oh, really? I guess it would be Taylor Kelsey. Okay.
Speaker 2:And who who is she marrying?
Speaker 1:Travis Kelsey. What does he do? He is I I think from what I can remember, he's involved in like the pharmaceutical industry. Okay. As a person?
Speaker 1:I I can't quite remember. Okay.
Speaker 13:But I
Speaker 1:I think he also played some some sport. Okay. I will have to we'll have to look into it.
Speaker 2:Well, I'm sure he'll be more popular now that he's marrying Taylor Swift. Like, people probably dig into his backstory and like Yeah.
Speaker 1:Figure it out.
Speaker 2:And stuff.
Speaker 1:For sure.
Speaker 2:It'll be interesting. We'll be following it.
Speaker 1:For sure.
Speaker 2:Anyway, let's go to this post by Young Macro, one of my new favorite posters on
Speaker 1:the He's been on an absolute tear. He has been
Speaker 2:on a tear.
Speaker 1:And he highlights the
Speaker 2:He's
Speaker 1:good. Dynamic that he's experiencing right now. He says the hyper reality version of the bedridden industrial magnet magnet and being the dashing young socialite archetype is that basically every one of your billionaire idols, Elon, Teal, P. Marco, Samma, etcetera feels intense jealousy every time they witness an anon zoomer surf the cutting edge of the algo purely organically.
Speaker 2:Donald Boat. Exactly. Donald Boat.
Speaker 1:I bet you every I bet you every other day they see a random zit that makes them ache to have once experienced being the guy to have posted it. Enjoy every second of it, Anon. Mhmm. You're the nubile maiden bathing at the village creek as the laboring brutes admire from baking the village.
Speaker 2:This is this is actually sort of tied to what we were just talking about. This is great.
Speaker 1:So if you're if you're in on Zoomer out there surfing the cutting edge of the algo, just just know that you can parlay that into a $50,000,000 series a if you do it right.
Speaker 2:Yeah. It's great. Well, we should move on to the story in the Wall Street Journal. A billionaire, a psychic, and a bad investment, the friendship breakup from hell. Of course, you wanna stay away from these bad investments.
Speaker 2:You wanna get on public.com investing for those who take it seriously. Seriously. Not take it casually. Take it seriously. They got multi asset investment.
Speaker 1:I think we're a lot
Speaker 2:of industry leading advice. Yes.
Speaker 1:Not financial advice.
Speaker 2:Financial advice. We just say take it seriously, and don't be a casual. Anyway, a woman convinced her best friend, an heiress to the Thomson Reuters empire. We've, of course, had the CTO of Thomson Reuters on the show. Didn't get to talk to him about this.
Speaker 2:I need to have him back.
Speaker 1:I'm back on.
Speaker 2:To invest tens of millions of dollars into a crypto meme coin created by a psychic. It went to zero, of course. And this is in the Wall Street Journal magazine. So over a decade, Taylor Thompson and Ashley Richardson were inseparable. A fight over money destroyed it all.
Speaker 2:Oh my god, said Taylor Thompson, clapping her eyes on Ashley Richardson for the first time. You have those fabulous heroin chic arms. In 02/2009, both women were lounging in the backyard of a Malibu home of Beau St. Clair, a film producer and mutual friend Richardson wearing a muscle tee over her bikini over her bikini, Basked Muscle in the tee like a like a a stringer,
Speaker 1:you know. Okay.
Speaker 2:Kinda like that.
Speaker 1:Gold gym enthusiast.
Speaker 2:I literally don't know the name for the non bodybuilding version. It's like a tank top. A tank top.
Speaker 1:A tank top.
Speaker 2:Yeah. Tank top.
Speaker 1:Richardson wearing a muscle suit over a bikini basked in the Samuel Thompson sat carefully covered in a flowy outfit and hat. Her then 10 year old daughter clutched a hot pink mini Birkin. Richardson, a lanky six foot tall blonde was a free spirit who went on to build a career designing social media campaigns for companies like Ford Motors and McDonald's. Thompson was an heiress to Canada's wealthiest family and eccentric with a self deprecating sense of humor. She went to dinners and party with parties with wild hair and drapey distressed clothes by California designer Rick Owens.
Speaker 1:Oh, Rick, it's so she was a subversive secret billionaire says one mutual friend. Okay. But a few crucial commonalities assured silliness, a love for animals and a deep spirituality drew them together. Thompson liked that Richardson has spent five years in India working with a spiritual leader named Amma, the so called hugging saint. Richardson bonded with Thompson's daughter whom she recalls as precocious and a quirky little being.
Speaker 1:Taylor is holly go lightly adventurous bohemian spirit says Richardson. She has this big beautiful heart when she lets her guard down. Both women have ADHD she adds. Because of that, I think we got each other. Richardson soon became part of a small Los Angeles friend group that Thompson called her inner sanctum.
Speaker 1:Whenever Thompson would land in LA, says Richardson, her phone would blow up. The the women, often with Richardson's girlfriend, would order Nobu takeout and pair it with tequila at Thompson's beach house. Richardson made Sunday dinners and and frittatas at the heiress's Bel Air mansion. When Thompson had staff there, her assistants chopped onions. When she didn't, Thompson was the first to do the dishes and Richardson taught Thompson's eager then teenage where
Speaker 2:Daughter how to roast potatoes for New Year's Eve. They planned a menu that included chocolates and truffles, also an onion to chop for caviar, reminded Thompson in a text message at the time. I can see the problem here already. Yeah. They were not doing enough data analysis on Julius.
Speaker 2:Yeah. Julius could have changed everything in this equation.
Speaker 1:Totally.
Speaker 2:What analysis do you wanna run? Chat with your data, get expert level insights in seconds.
Speaker 1:The story would have ended here. They were running.
Speaker 2:Yeah. If they were
Speaker 1:running their life.
Speaker 2:Yeah. If they just become data analysts powered by Yeah. Julius.
Speaker 1:But instead, we're forced to continue here. Over the next decade, the friends traveled to Italy and London, bought the same ViaLife vegan feta and stocked up on Rite Aid hand cream.
Speaker 2:It's
Speaker 1:very random. Richardson remembers the many details. Insanely unhinged article. Remembers the duo peeing in the bushes at a Rolling Stones concert. It was Thompson's first ever what is this writing?
Speaker 1:I can't even read this out loud. Gotta get to the part where they start slanging checks.
Speaker 2:Okay. Let's let's scroll down. Richardson had grown up in an affluent part of Monterey County, California where she attended elite prep school and was skiing by age two.
Speaker 1:There we go. Crazy.
Speaker 2:But Thompson's wealth was a different ballpark. We would go somewhere for a few days and she'd be buying houses like other people buy mugs. Though there was a lot of it, money didn't interfere with the relationship. The reason we'd be friends because there was no financial connection. Richardson could be defensive about the way people used Thompson at the Freeze Art Fair in London.
Speaker 2:Richardson recalls attendees descending on the heiress. People know who she is and that she will drop millions, says Richardson. It was nauseating. There was one time there were then there were one time friends who Thompson later assumed were were using her for her money. She had a nickname for them, taker.
Speaker 2:Don't be a taker. Now the relationship between Thompson sixty six and Richardson forty seven has exploded into an epic battle that landed the pair in court. But this time, the billionaire is accusing her onetime best friend of doing the taking. The story is based on interviews, blah blah blah blah blah. What went so wrong?
Speaker 2:Okay. By the time Thompson met Richardson, the heiress had spent decades trying to prove herself to her family. For the Thompson's control of the empire passed down the male line according to people familiar with the family. Taylor, the middle child and only girl, felt less favored than her two brothers, and her efforts to forge her own path led to occasional periods of estrangement. But much of the tension with her brothers revolved around money.
Speaker 2:Thompson family in 2024 was the world's tenth richest. Wow.
Speaker 1:Give it up for the Thompson.
Speaker 2:Let's hit the gong for the Thompson family. There we go.
Speaker 1:Richest family according to Bloomberg and Taylor wanted equal access. The family holding company Woodbridge owns a majority stake in media and technology company Thomson Reuters. Her older brother David is the chair of both companies. Thomson pursued a career in acting training at the American Repertory Theater in Cambridge. She performed with Shakespearean Theater Companies in Massachusetts and Los Angeles and had roles in in the TV show Matrix What?
Speaker 1:A Canadian drama.
Speaker 2:A TV show?
Speaker 1:Canadian drama. Love a vampire working as a detective. Okay. That's very cool. Big into TV.
Speaker 1:Maybe you should go.
Speaker 2:No. No. I'm not big into TV. I'm a cinephile. Thompson often suspected people were trying to use her for her money according to people that know her.
Speaker 2:She insisted those around her sign nondisclosure agreements from access from assistance to an ex boyfriend of her then 20 year old daughter, and she could get get aggressive if she if she thought those terms were breached. Thompson even hired an infamous Hollywood private investigator, Anthony Pellicano, to spy on her former nanny who she suspected of sharing personal information with her daughter's father during a custody battle. I want you to do whatever you can to get information on Pam Pamela, said Thompson to Pellicano on a recorded call played during Pellicano's 2008 wiretapping trial after which he was convicted. Just get it. I'm not gonna ask questions.
Speaker 2:Crazy. By the 2015, Thompson and Richardson's friend, Saint Clair, were losing their battle with ovarian cancer. Her closest friend surrounded her in her final months. Richardson and her partner at the time had weekend slumber parties at Saint Clair's ranch home. Saint Clair's producing partner Pierce Brosnan then came by.
Speaker 2:Wow. Thompson decorated for Christmas with doctor C's original grint sketches from her personal collection. Okay. We gotta get to the crypto stuff. There's some crazy stuff in here.
Speaker 2:Well, let's just let's just keep keep scrolling. Keep scrolling. Keep scrolling. Thompson's pokes that this is all false, blah blah blah. Quit the pandemic.
Speaker 2:Inhibit.
Speaker 1:Yes. Richardson's work was drying up. In a fit of anxiety, she googled the burning question. Had anyone predicted any of this? She stumbled upon Michelle White Dove, a celebrity psychic.
Speaker 1:She dropped $25 a month for White Dove's newsletter then largely ignored it until the 2021 when she noticed the psychic had recommended a new crypto token. Persistence, White Dev wrote. This is another dark horse that's gonna come up on everybody and be a big
Speaker 2:dog. Dog. Get
Speaker 1:it and sit on it which is what I would tell myself. The value of persistence's token called X PRT quadrupled from less than $3 in April to as high as $13 by the next month. That summer, Richardson brought up White Devs predictions to her friend. What is the link to that website of the channeler Thompson texted? She followed up with Robert Robert Sabella, an astrologer and intuitive.
Speaker 1:She regularly consults combining astrology and crypto
Speaker 2:is So good. Is good.
Speaker 1:It's a
Speaker 2:in heaven.
Speaker 1:Absolutely. What more do you need? And intuitive, she regularly consulted for advice both personal and financial. Once when Thompson tried a Xanax after a panic attack, she asked Sabella for his thought. He replied, I'm getting that Xanax is not good for you right now.
Speaker 1:Stop taking it and find another mean, advice. He also weighed in on her investment.
Speaker 2:No blazing there.
Speaker 1:Those answers I promised Yeah. He said, but other coins show promise. Ada has a very high reading on it, a 10. Persistence does as well, even higher. Oh, no.
Speaker 1:And so they're using the astrology readings for as financial advice.
Speaker 2:So with Richardson's help, Thompson invested more than $40,000,000 in messages after the initial purchase. Richardson cheered Persistence's early success. But at times, she pushed back at Thompson's request, including when she when she suggested buying 60,000,000 of the token. Are you sure you want 60? I will try.
Speaker 2:Still think you should diversify, Richardson wrote her. That same day
Speaker 1:Insane.
Speaker 2:Thompson and Rich told Richardson that she would seek access to what she viewed as her share of the family money. I'm going to write my to my brothers directly. David and Peter Thompson wrote, as you know, as you as I know you both are more than aware, our family branch, Thompson and her daughter, has been completely locked out of our any voice of control of stewarding our future financial wealth. She acknowledged having always been one for riskier investments like the rest of the than the rest of the family, but said she had been exposed to valuable opportunities like crypto. She accused her brothers of discrimination, the 2022 the 2020 infrastructure around my family branch, and the inherent restrictive compliance, which was put into place completely removed any opportunity of me stewarding meaningful investments.
Speaker 2:To be blunt, it is no longer acceptable. For the next several months, Richardson spent as many twenty hours as many as twenty hours a day hunched over her laptop researching cryptocurrencies and ex executing trades for Thompson. Richardson says Thompson provided in instructions over daily hours long phone calls and messages. They just become a hedge day trade.
Speaker 1:They're just day trading. This is crazy.
Speaker 2:Richardson, they get into physical custody. Look. Richardson stored physical wallets like USB like devices holding millions in crypto around her home, including at one point in her then partner's underwear drawer. Richardson, who whom Thompson didn't pay and who has no financial background, says that moving that money was exhilarating and stressful and then debilitatingly scary.
Speaker 1:So at this point, they're managing a 140,000,000 in crypto That is crazy. Based off of astrology. Persist I I looked up the chart for XPRT, the one they tried to put 40 or 60,000,000 into. Yeah. Yeah.
Speaker 1:At the time that they were investing in it, it was about, I guess, $3
Speaker 4:Okay.
Speaker 1:Yeah. Per token. Now, it's sitting at less less than 3¢.
Speaker 2:Less than 3¢?
Speaker 1:Yeah. But
Speaker 2:Wow. That that that is like a complete and total loss. Like, wow. They had a 140,000,000. They probably walked away with, like, a 140,000.
Speaker 2:That's really bad. Today, Richardson is driving an Uber up and down California Central Coast, a job she took to make ends meet. I had this charmed, magnificent life. She sounds ejected and wistful. Her life wasn't charmed because of Thompson, she now says.
Speaker 2:But in spite of her, she had a lively community of friends in Los Angeles, a partner she loved and a thriving career. There were dinners and parties, she says, a chosen family that included Thompson and her daughter. I don't look at them and say bad people. I look at them and say this is the catastrophe of having having money. Now she lives in her childhood home in Monterey County.
Speaker 2:A private investigator's unannounced visits to the home of her mother and stepsister this August has led her to worry for her family. Said I was hired by Taylor Thompson, says Richard, mother of the woman, a former FBI agent who now works for the consulting group Guidepost Solutions. Richardson has applied for food stamps. She can't afford paid medication for her dog Jasper. She is buried in legal work.
Speaker 1:Wow. This story has been a disaster.
Speaker 2:She lost more than $80,000,000 in crypto associated with Richardson's involvement. Thompson did. Asked about the private investigator, a Thompson spokesman said guidepost was making continued efforts to recoup the tens of millions of dollars from of missus Thompson's of miss Thompson's money under miss Richardson's control because, of course, any one of those thumb drives could still have, like, a bunch of Bitcoin on it that you, like, forgot to sell or trade into something else. And so whenever a crypto deal happens, there's always a lot of, like, exhaust nonsense going on. Persistence apparently rewarded Richardson by giving her a secret kickback of $783,707,102 dollars worth of x PRT, the lawsuit alleged.
Speaker 2:So they were like, you're bringing us a whale. We'll kick you back something which is not good. And you need to disclose that, obviously, if you're getting commissions or something like that. You're not acting as a fiduciary. You're also not licensed or trained or, know, have any reason to be doing this.
Speaker 2:But what a mess.
Speaker 1:Yep. The lesson is What have hoped there was a white pill in here, but I think it's just total disaster.
Speaker 2:Total disaster. Should have gone long t bills instead.
Speaker 1:Wow. Friend friend of the show just texted me something very funny about Can you read about the story that I cannot read off without completely
Speaker 2:Doxing someone?
Speaker 1:Doxing him. But this this goes deeper than we thought.
Speaker 2:Okay.
Speaker 1:But anyways, we'd love to move on to the next story. This was a total black pill. But anyways, if if the I guess, of the story, don't day trade crypto. Don't trade day trade your friends crypto based on your astrological readings. Yes.
Speaker 1:And Yeah. Just Stick to betting on horses.
Speaker 2:Trust the experts, really.
Speaker 1:Go down to the track.
Speaker 2:I mean, it seems like stick to real estate. Like, you know, she was known for just like buying houses on a whim. And that seems like kind of ridiculous and
Speaker 1:so Hard to have you can overpay for something but hard to
Speaker 2:have total all of those have been yeah. Very have done very well even since the real estate market's been booming. Anyway, Pavel Asperuhov, a friend of the show, says Travis Travis Kalanick's corporate catering service is insanely good.
Speaker 1:Is brilliant.
Speaker 2:By way. Kitchen, faux chipotle is better than chipotle. Delivery is the the exact same time every day without fail. Cheaper than competition. TK is a beast, man.
Speaker 2:I mean Absolutely. We gotta get a very move. Would change.
Speaker 1:This this grace has been devastating.
Speaker 2:This could be the thing that gets us from a 100 k to a million.
Speaker 1:Devastating for many technology brothers out there that that used to be able to rely on Yes.
Speaker 2:On Yes. Quality
Speaker 1:and options. Quality meal. Yes. And it has just gone down
Speaker 2:the But you know, the problem is with cloud kitchens, not very good name recognition, very much under the radar. They need to get Travis needs to get on ProFound. He needs to get his brand mentioned in Chatuchi BT. He could reach millions of customers who are now using AI to discover new products and
Speaker 1:brands. Try this out.
Speaker 2:There's another post from Polymarket in here. Breaking Bitcoin is now predicted to crash below $100,000 this year, 67% chance before 2026. Currently I mean, Bitcoin's 10. One ten. I I remember this this viral video of, like, Bitcoin goes up, and then it crashes down to a a $100.
Speaker 2:And then it crashes down to a thousand dollars. And then it crashes down to $10,000. And then it crashes down to to a $100,000. It's like, we're kind of using, like, silly terms for, like, what is, like, a pretty remarkable rise over a very long time. Yep.
Speaker 2:Anyway, I'll leave it to my astrologer to decide whether or not I should buy or sell Bitcoin. Just kidding.
Speaker 1:Not today. Nick here has an has a very funny post. We there was a new Google image Banana. Generation product released today. It's very cheap.
Speaker 1:It's very good. No banana. And Nick is
Speaker 2:What a great name.
Speaker 1:Always taking advantage of the moment to to post a funny picture of Sam. He loves it. He's But this is a good meme
Speaker 2:for Where
Speaker 1:did he get this? From Sun
Speaker 2:Valley or something? Yeah. He he went deep in the
Speaker 1:In the archives.
Speaker 2:Yeah. In in you know, some paparazzi uploads a bunch of photos and Nick finds the the most ridiculous one. But it is interesting to see the the the cost of these different models. You know, if you're doing high volume image generation, probably makes sense to check out Google's offering.
Speaker 1:And we will have Logan joining Oh, yeah. Too today.
Speaker 2:Talk about Nana Benning.
Speaker 1:Release State of the art image generation editing, incredible character consistency, lightning fast.
Speaker 2:Very fun.
Speaker 1:And available in AI Studio and the Gemini Gemini API today.
Speaker 2:Fantastic. In other news, Alex Wang has unblocked Yak scene. This is shaking up the timeline. Maybe we need a trading card unblocked. Unblocked.
Speaker 1:Is huge news
Speaker 2:in the tech world.
Speaker 1:There's big things that
Speaker 2:are gonna come from that. Says, can someone tell Alex Alex Wang to unblock me? The reason I was being annoying was because of the whole MEI thing. Because the whole MEI thing was sensitive to me. But now that Zuckerberg crowned him the king of AI, I actually think it's really bad for my career that he doesn't like me.
Speaker 2:And so and so
Speaker 1:We gotta we gotta get a Yacine up. Bones. We gotta get it back on the show.
Speaker 2:Yeah. So BoneGPT messages Alex Wang and says, please unblock Yaxine. He's very sorry. Thank you for your attention to this matter. And Alex Wang says, unblocked.
Speaker 2:LOL. I love it. And and Bone says, you must send a raven to ruin for me. I don't know what that means.
Speaker 1:Anyway. Good post here from High Yield Harry. Do we
Speaker 2:have the video?
Speaker 1:We gotta have we have to pull
Speaker 2:up the video. In the meantime, let me tell you about Numeral sales tax autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com. And
Speaker 1:I got the video here.
Speaker 4:It is in the timeline.
Speaker 2:This is of course Mike O'Hern, the famed bodybuilder and known for for memes and video reactions around the around the Internet. And here he is. We need the audio too. It's the audio set.
Speaker 1:Are you following generally accepted accounting principles? Giga Chad.
Speaker 2:I'm just smiling. I just look good. Like, what are you asking me?
Speaker 1:I don't care. Just look at the chart.
Speaker 2:Yeah. Just look. It's fine. Don't worry. It's all good.
Speaker 2:It's all good. Stop stop asking
Speaker 1:me questions. Yeah. This guy is is is just born for
Speaker 2:the Internet. Absolutely fantastic. Anyway, in other news, Mark Zuckerberg gifted noise cancelling headphones to his Palo Alto neighbors because of the nonstop construction around his eleventh So thoughtful. This is awesome. Chris, back he says, this is so funny.
Speaker 2:I'm deeply sorry I've been jackhammering the concrete of my old wave pool to build a new wave pool for the for the last few years in my 120,000,000 home, which is next year 18,000,000 home $18,000,000 home. In order to remedy the situation, I've gifted you these $199 headphones. Who knows?
Speaker 1:I think thoughtful gift.
Speaker 2:I think yeah. It's the it's the least you can do.
Speaker 1:It's a thought that counts.
Speaker 2:He's like It is the thought that counts.
Speaker 1:Eventually, the jackhammering will end.
Speaker 2:Hey. I mean, are you is it time to build or not?
Speaker 1:Yeah.
Speaker 2:Throw it on the gauntlet. Yeah. You know?
Speaker 1:Just say I mean, if you're angry about this, just say it's not time to build. Yeah. Just say just say you're It's not time
Speaker 2:to say you're anti re industrialization.
Speaker 1:You're anti growth.
Speaker 2:You're a degrowther. You're a degrowther if you're not into growth. Anyway, in other news
Speaker 1:This has been this is Cadillac is coming to f one. Important story of
Speaker 2:the day. This is huge. This is huge. Sergio Perez is returning to f one to drive for the Cadillac team, joining the grid in 2026 along with Valtteri Bottas, sources. This is particularly
Speaker 1:important for John who dailies a Cadillac
Speaker 2:I do.
Speaker 1:The Blackwing
Speaker 2:I do.
Speaker 1:Much like Zuckerberg
Speaker 2:Been waiting.
Speaker 1:Does
Speaker 2:himself. Yes. If you want an American made, if you just have a few, like, you know, requirements in your daily, you want it to be American made, you want them to have an f one team, you want it to have a supercharged v eight, like, there's really only a few cars that fit that that fit those
Speaker 1:Not that many.
Speaker 2:Those basic criteria. Options. And so it eliminates a lot of other options.
Speaker 1:Pretty much everything.
Speaker 2:Yeah. So you you you kind of forced forced my hand on that one.
Speaker 1:Totally. Totally. And the different Sergio Perez had, like, this very, like, serious announcement and and Bottas just just posted him in a tuxedo with an American flag.
Speaker 2:The tuxedo with an American flag is ripping.
Speaker 1:Fantastic. Yeah. What is wearing too?
Speaker 2:He has a water bottle or something or it's But
Speaker 1:it's like
Speaker 2:it's a green can of beer or something but it's like it's unbranded. It's fascinating.
Speaker 1:Very interesting stance on
Speaker 2:the Yeah. The have to admit the first time I saw this picture of Sergio Perez, I thought it was the guy from
Speaker 1:The back?
Speaker 2:No. I thought it I thought it was Billy McFarlane.
Speaker 1:Why did you think that?
Speaker 2:Billy McFarlane looks kinda like that. Don't you think? Interesting. I don't know. Maybe I'm maybe I'm crazy.
Speaker 2:Anyway, fin dot ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive Bake Offs, number one ranking on g two. All eyes Give
Speaker 1:it up.
Speaker 2:On 2026. Their driver lineup is locked in. I can't wait to see an American team
Speaker 1:And grid. They're gonna be working with Tommy Hilfiger.
Speaker 2:Oh, really?
Speaker 1:And so this this team is gonna be very, very American.
Speaker 2:Oh, very fun. Yeah. This is a good opportunity for you know, Trey was taking shots at Palantir, his former employer, because Palantir sponsors an f one team. Andoril sponsors a NASCAR event. This is the this is the chance.
Speaker 2:If you're a reindustrialized company, if you're an American dynamism company,
Speaker 5:getting your logo on the Cadillac f one car
Speaker 2:feels extremely high ROI. Yep. You know, it's probably not gonna price like Red Bull, like Ferrari, but it will certainly get a lot of attention, especially online. And then you fill up the top of the leads bucket. You'll be able to put everyone's information in Adio.
Speaker 2:It's customer relationship magic.
Speaker 1:That's right.
Speaker 2:Adio is AI native CRM that builds, scales, and grows your company's
Speaker 1:next level. The founder of Adio will be joining to Oh, talk about their new round later today. Excited for that. What else? And we have a post here from Mike Anutia.
Speaker 1:He is highlight highlighting an article from Bloomberg, data centers to propel infra securitizations past 110,000,000,000 by 2026. We had been joking about data centers crashing the global economy. Was it last week or the week before? Hopefully, it doesn't happen. But the tech lash
Speaker 2:Someone was saying that that that that Mark Zuckerberg has the ability to crash the economy with how much he's spending on on CapEx. But I don't I don't know. Yeah. There's there's I think it's Derek Thompson take that the economy is data centers and dialysis. It's kind of an interesting take.
Speaker 2:But the the I don't know. The data center build out, like, the CapEx numbers are growing, but they're not 10 x ing yet. I mean, even the most AGI pilled folks are like, the training runs will increase by three x the size per year. Like, that's a ton, but we're still early. And, like, all the CapEx numbers are growing, but the cloud bills are growing as well.
Speaker 2:Like, there are some crazy deals out there, but it's certainly not the size of the mortgage market yet.
Speaker 1:Yeah. And the big question is how quickly will these assets depreciate. There's some conservative estimates. There's some very extremely bearish estimates. Yeah.
Speaker 1:Bloomberg is reporting the market for securities backed by various digital infrastructure including data centers could grow by 46% by the end of next year to roughly 115,000,000,000. Data centers account for 61% of the current $79,000,000,000 market for digital infrastructure securitizations according to business in Bank of America. Fiber infrastructure makes up another 20% while cell towers are 18%. The estimates take into account both asset backed securities and commercial mortgage backed securities. Companies have been developing large data centers to help support demand for AI and banks as well as private lenders have been competing to underwrite such deals.
Speaker 1:Meta platforms picked Pacific Investment Management and Blue Owl Capital to lead a $29,000,000,000 deal for its data center expansion in rural Louisiana. JPMorgan Chase and Mitsubishi Financial Group, meanwhile, are leading are are leading a loan of more than 22,000,000,000 to support Vantage Data Center's plan to build a massive data center campus. Investors concerns about the development of data centers, cloud adoption and the path of investment in AI have been have been sorry. Cut off. Mhmm.
Speaker 1:The four big data center developers in particular, Microsoft, Alphabet, Amazon, and Meta Platforms discussed higher cloud business revenues and reiterated plans for capital spending increases. Risk premiums on all three types of digital infrastructure, ABS, data center, fiber, and cell towers have tightened significantly over the past two years. While B of A strategists expect limited spread tightening going forward, they see such securitizations as offering attractive relative value compared to other types of ABS. So
Speaker 2:Okay. So there's a post that I found through a Martin Scarelli quote again to Martin on becoming a father. But it starts with this Cuppy's Corner post. Global Crossing is reborn, and it's a picture of Mark Zuckerberg. I got a fever, the only prescription is more data center build out.
Speaker 2:Microcap David says, this is insane. I had no idea it's this bad. Shares this post, which leads you to the first shocking revelation, the AI data centers to be built in 2025 will suffer 440,000,000,000 of annual depreciation while generating somewhere between 15 and 20,000,000,000 of revenue. The depreciation is literally twice what the revenue is. Global Crossing
Speaker 1:Is that good?
Speaker 2:Was started in 1997, and it's like it's the textbook example of, like, the dark fiber overbuild. So the main business was a global fiber optic network. They wanted to sell wholesale bandwidth to telecom companies in the nineties. It completely mooned. The market cap was over $47,000,000,000 around February.
Speaker 2:Didn't really have that much profit, but it was, like, key infrastructure for the new economy. The bubble burst, and they had already spent a lot of money to lay cable. But the demand for bandwidth is far lower than expected. The company filed for bankruptcy in 02/2002, and so a lot of people lost a lot of money, and that's what people are that's what people are memeing around. Martin Scrella has a take here.
Speaker 2:He says, so this assumes $400,000,000,000 spent on AI data centers. So much of this math is wrong. A one hundreds have depreciated 50% after five years, not 10% after three to five. A b 200, which will depreciate over ten or over eight to ten years, costs roughly $62,000, 500 k for eight. You can produce some amount of human like intelligence with this machine.
Speaker 2:Would you pay for around the clock always improving human level intelligence for 8,000 a year? $8,000 a year. Chips are a much bigger percent of the cost than implied here. So this breakdown says, like, it's a third depreciation, a third energy, a third GPUs or something like that, which I think is not quite right. So Scrella's putting it in the truth zone.
Speaker 2:But, obviously, it is worthwhile to, like, reality check the the the the overbuild. You don't wanna get over your skis too much. But at
Speaker 1:the same At the same time, bubbles are important.
Speaker 2:Bubbles are important. We get a lot of a lot of capacity to build the next thing.
Speaker 1:Joe Weisenthal hit the timeline at 3AM this morning. Guess, fair enough. Joe.
Speaker 2:He wasn't sleeping on Eight Sleep, but you can be. Go to 8sleep.com. Get a pod five with a five year warranty. Thirty day risk free trial, free returns, free shipping. Back in the game.
Speaker 2:Yeah.
Speaker 1:What were
Speaker 2:you doing, Joe? I have to assume think
Speaker 1:was actually 06:30
Speaker 2:Eastern. He's up early, Brian.
Speaker 1:So he's up early posting. He said rather than take equity positions and he's talking about the Intel deal. Rather than take equity positions in private companies, perhaps the government could confiscate 20% of pre tax earnings. And then when it comes to control, Congress could pass laws governing corporate behavior. There's could be something could be something here.
Speaker 1:Fantastic post. Gregory replied, that is just the beginning. Your scheme could be expanded to confiscate a quarter of any increase in the value of those companies when people sell their shares. Woah. Another another Okay.
Speaker 1:Play here.
Speaker 2:Yeah. This is interesting. I think we're getting somewhere.
Speaker 1:There was an interesting post here earlier. Dan Primak highlighted that Trump's Pentagon is thinking about taking equity stakes in defense contractors
Speaker 2:Okay.
Speaker 1:According to Lutnick. Mhmm. So They're going all over. They're doing they're they're they're fiending.
Speaker 2:They're in deals mode deals mode.
Speaker 1:Lutnick was on Squat Box with Sorkin earlier and
Speaker 14:what?
Speaker 2:Someone apparently, the team put up breaking news of TBP and Taylor Swift engaged. And somebody quote tweeted, Connor quote tweeted, Never in my life did I think I would find out about Taylor Swift getting engaged via TBPN notification.
Speaker 1:I mean, she's a bean air and she's a private jet enthusiast. Right? Yeah. What else do you Why would we not be highlighting that? This is fantastic.
Speaker 1:She's a incredible entrepreneur Yeah. An artist.
Speaker 2:This is great. Anyway, should we do this five span stake in the New York Times? This activist investor? It's kind of interesting. Has a story.
Speaker 2:So the financiers that led a high profile activist campaign at the New York Times three years ago have now taken a stake in the iconic newspaper
Speaker 1:the They're
Speaker 2:new investment firm, Five Span Partners.
Speaker 1:New York Times, Mike Isaac, your favorite activist is back. They missed you guys.
Speaker 2:Yep. So the the activist investment firm started last year by Dylan Haggart and Sarah Coyne has built a position in the Times and is pushing it to use artificial intelligence to expand its subscription base according to a letter. The pair led
Speaker 1:They're like, they're just like every VC. Write a check. Hey. You guys should be using AI. I've heard a lot about it.
Speaker 1:I think there I think there could be something here.
Speaker 2:AI is a clear tailwind for the New York Times. Our work shows it can more than double the company's long term revenue and profit potential, enhancing growth by reaching broader audiences, converting more readers into paying subscribers, and unlocking new lucrative profit pools. What's the what's the steel man for this? I think that if the New York Times goes AI slot mode, it's very bad. It's a very if short term win
Speaker 1:Well, so they're saying Yeah. They're talking about using it to more, I guess, more efficiently convert non paying they're saying.
Speaker 2:Yes. So The Times could
Speaker 1:use AI to broaden its international reach Love that. Low cost text and audio translations. Yep. That makes sense. Yep.
Speaker 1:Develop develop more dynamic paywalls and optimize pricing. Yep. Low cost video offerings could also boost revenue per user according to FiveFan.
Speaker 2:Yeah. And so so AI doesn't necessarily mean LLMs generating text of articles. But translation, nailed. Audio, nailed. And already
Speaker 1:I don't know why you're laughing. Well, I just think it's think it's pretty funny to just we we should do this bit with with TB TB nation where we collectively take a stake in something like a Google and tell them that AI we think AI is very important. Think We it could be good for your business. Yes.
Speaker 2:We sent a letter.
Speaker 1:I'd like you to take this seriously. Yes. Yes. Yes. Hey, Satya.
Speaker 1:We're gonna take a position. We've taken a position in Microsoft. Our whole team.
Speaker 2:Yeah. And we want
Speaker 1:you to take this seriously.
Speaker 2:We ask if we're if we're being activist investors in Microsoft, I know the ask. Bring back Clippy. Clippy.
Speaker 1:Is Clippy still around? Can you find him anywhere?
Speaker 2:I think there's some merch out there. But Clippy is not productized. Clippy needs to be
Speaker 1:That is that is a billion dollar IP. It's locked in.
Speaker 2:Imagine a billboard campaign on adquick.com centering Clippy as the new spokesman Yeah. Microsoft. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology out of home expertise and data to enable efficient seamless ad buying across
Speaker 1:Clippy should become CEO for a day Yeah. As like a little
Speaker 13:stunt.
Speaker 2:Oh, well, yeah.
Speaker 1:Give Satya the day off. Yeah. Let Clippy run the show for a day. Just one day.
Speaker 2:We gotta we gotta bring back Clippy. It's so good. It's such good lore. And it's so fun. It's cute.
Speaker 2:It's like inoffensive. It's the perfect it's the perfect mascot.
Speaker 1:So so we've been joking around Five Span's ass. But I think it is I'm happy to see that they're not saying, you know, lay off Yep. You know, two
Speaker 2:AI will will definitely not be able to do the fact finding that the New York Times does. Like journalists are particularly good at that. And it real and it requires, like, building a relationship over time, getting someone to share a piece of information that you can then verify. That's really intractable for AI. Yep.
Speaker 2:And then even the instantiation, you know, Teal has that line about, like AI will hurt math people more than writers, which is kind of counterintuitive because you'd think that, well, AI is really good at writing. But AI is not actually that great at writing and you can still clock it when there's the m dash and
Speaker 1:And we saw this
Speaker 2:it's not this, that's that.
Speaker 1:Travis Kelce Taylor Swift announcement. Go into ChatGPT. Not just a marriage. It's a love story.
Speaker 2:It's a love story.
Speaker 1:That's That is bullshit.
Speaker 2:But what's problem the problem is like people do write like that every once in while like, but now you just can't you can't use those. It's not this than that.
Speaker 1:They hit chat.
Speaker 2:They You think so?
Speaker 1:Got PPT.
Speaker 2:You're convinced. I'm But on the tinfoil hat, Jordan, if you're gonna make that strong.
Speaker 1:We gotta keep it closer.
Speaker 2:We do. We need the we need the hat rack over there. A representative from San Francisco based FiveSpan declined comment. That's the most boring line I could possibly read. This article today, we believe AI represents true transformation opportunity.
Speaker 2:There is something interesting here about instantiating low cost video. So the the the New York Times will occasionally take a story if it's really big and turn it into a video, like a video essay. And they could probably do that for more content where they take the video or they take the facts that have been found by human and the writing that's been found by human and then use an AI voice and then use AI to select different stock imagery or generate images
Speaker 1:So five spans saying they could slop it up.
Speaker 2:Yeah. They would be slopping it up, but it would probably be, like, value additive to just, like, get the stuff. You know what they should do?
Speaker 1:They should do the clipping strategy. You should take
Speaker 2:a position in the New York Times and be like, you need 500,000 clippers. You need to just be clipping everything. You just need to clip it all over. This is the this is the thing. Maybe that's the strategy for Clippy.
Speaker 2:Clippy will clip their content.
Speaker 1:Clippy. Clippy. I was just sure.
Speaker 2:So so so you do a campaign for for Clippy and then you have WAP clip it all over TikTok and then and then you buy TikTok. Anyway, we went through the family stuff. Let's go to this this gentleman over at Waymo, Ethan. I love the Waymo team posting. Everyone in Google feels like they're they're getting more comfortable on the timeline right now.
Speaker 2:I don't know if they're just emboldened but they're They were perfect and now
Speaker 1:they're coasting.
Speaker 2:Exactly. They they've been kinda sort of building in silence but now they're getting out there. So there's a video of a Waymo on the one zero one driving from San Francisco to San Mateo. Rider only doesn't touch the steering wheel. Very impressive.
Speaker 2:Congratulations to the team. And Ethan at Waymo says, multiple sensors together is a fool's errand. What do you do when the sensors disagree? Surely, no one has solved that. Anyway, here's one of our freeway rides that don't count in our 1,000,000 plus fully autonomous paid rides per month because freeways are for employees only for now.
Speaker 2:Interesting. Interesting that they're not doing freeways because the the risk of serious injury is much higher on a freeway because you're going much faster. So Mercedes has done the same thing with their level three autonomous system that only works in, like, stop and go traffic, I think, or, like, under 40 miles an hour. Because with the modern seat belts and airbags, like, it's really, really hard to get into a serious serious, like, injury accident if you're just going 35 miles an hour. So the Waymo's can kinda drive around.
Speaker 2:It's much lower stakes. But they're testing it and they're gonna be bringing them onto the
Speaker 1:That's a cool video.
Speaker 2:So congrats to everyone over there. On the COGS debate, Tane shared a chart of marginal differences, AI start ups recent gross margins.
Speaker 1:This is where high yield Harry pulled that video of of Mike O'Hearn for
Speaker 2:sure. Referencing that. So Dropbox at 60%, Perplexity is at 60%, OpenAI is at 50% gross margins, StackBlitz at 40, Lovable at 35, and Replit at 23.
Speaker 1:And there's an important note
Speaker 2:here. There's a note here.
Speaker 1:Perplexity, Replit, Lovable, and StackBlitz do not incorporate the cost of running AI models for non paying users and calculations while open AI does. Think it's
Speaker 2:little Oh, and tropics accounting accounting couldn't be learned. Interesting. So that's why.
Speaker 1:Which I think is fair. They don't they don't need to I mean, it it it's not Anthropics job to tell journalists what their approach to accounting.
Speaker 2:Well, you know what? We have the perfect guest to talk about building a business without burning a ton of cash because we have Wade Foster from Zapier Zapier here
Speaker 1:in Zapier. French pronunciation.
Speaker 2:I you know, you were in my y c batch in 2012 and and I called it what did I call it?
Speaker 1:And you and
Speaker 2:you I called it Zapier like a rapier for a long time. Yep. And then I and then people were telling me that's wrong. And so I started calling Zapier, and then I learned that was wrong. But it's Zapier like Snappier.
Speaker 2:Right?
Speaker 8:Yeah. Zappier it's funny. Snappier was actually what we called it first.
Speaker 2:Oh, no way.
Speaker 8:We yeah. We had to switch to Zappier because there was, you know, copyright issues. Of Of course. And, of course, it was one Snappier with one p. And so we just doubled down on the mistake.
Speaker 8:Okay. It went Zapier with one p as well too.
Speaker 2:So It certainly hasn't hurt the business. You've you've been on an absolute tear. We've enjoyed talking to your cofounder a ton about Arc AGI and that stuff, but we'd love to get I I I just into the rest of your world and what's going on with the business. And do you have any advice for current generation startups who are maybe playing a little bit fast and loose with the accounting? Did you ever have gross margin problems?
Speaker 2:Was there ever a moment where you were like, okay. Like, we have customers that are actually making so many calls to our APIs that we're losing money on them, or was that just never an issue?
Speaker 8:We became profitable in 2014. So basically, two years in. And Congratulations. When we raised the, yeah. When we raised our seed round out of YC
Speaker 1:Yeah.
Speaker 8:We said, hey. We want this to be the last money we ever get. Mhmm. And so I I, like, looked at every expense on our p and l and approved everything and was just, like, vigilant about not spending money if we didn't have to. And, yeah.
Speaker 8:I think in 2010, like, decade, we were looked like as crazy.
Speaker 2:Totally.
Speaker 8:And now it's Yeah. Very trendy. Like, in fact, I heard, this term popularized out, like, six months ago, siege
Speaker 2:Seed strapping.
Speaker 8:Where it's like, yeah, one round and then, you know, don't raise more.
Speaker 2:Okay. So
Speaker 8:did you believe it? That's what we did.
Speaker 2:Yeah. Did you believe it at the time? Were were there specific, entrepreneurs that you were looking to as, like, mentors? Like, where did that idea even come from? Because the meme in Silicon Valley at the time was much more on this on the Reid Hoffman blitz scaling, raise a ton of money, and every venture capitalist would echo that because they wanna put dollars to work.
Speaker 2:And so there was definitely, like, a a mood in Silicon Valley of, hey. It's more than okay to raise an a b c d. Burn. Burn. Burn.
Speaker 2:Win. Win. Win. Did you believe that when you said it, or did it come from somewhere? Like, talk to me about the the the thinking at the time.
Speaker 8:We had two examples. So we founded the company in Central Missouri. All three of us worked at Veterans United. This is a company owned by two brothers
Speaker 2:Wow.
Speaker 8:Fifty fifty. They never raised a dime. I was employee 500, and when I left ten months later, there was a thousand employees there. So this company scaling like crazy with mortgages during the financial crisis.
Speaker 2:Wow.
Speaker 8:And so we see that and are like, well, clearly, you can build a successful company this way. Yeah. Then one of our favorite products, Mailchimp, they were one of, like, our earliest partners that was most successful, entirely bootstrapped. Mhmm. And then coming from the Midwest, we just don't know anything about, like, this Silicon Valley world for companies.
Speaker 8:Yeah. Yeah. And so it kinda makes us skeptical of any time, you know, a venture capitalist is yeah. I remember one said, no important company has ever been built this way. And, you know, when you make grandiose statements like that and you have counterfactuals, you're just like, well, what other advice are they saying that might just be wrong?
Speaker 2:Yeah.
Speaker 8:And it doesn't mean that all the advice is wrong, but I think we just ran it through a thicker filter than most people who are like, well, I guess we're going to raise an a and a b and a c
Speaker 1:and it doesn't my read and I guess what I've heard over the years is it's not like you said, we will never raise another dollar. It was more so we we hope to just make a great business
Speaker 2:The point.
Speaker 1:And not be forced to. And I think the issue when I hear people talking about seed strapping, it's like seed strapping, I don't know if it's like the right goal. It can be something that you hope to be able to achieve. But if you're raising a $5,000,000 round and you're telling everybody, oh yeah, we don't wanna raise more money. It's just like not the right, oftentimes not the right thing to be fixated on.
Speaker 1:It's like be fixated on like, we wanna use this money to find a really sound business model that will allow us to scale efficiently and we will tap capital markets as needed is like a better goal than, oh, we just don't wanna raise more money. And because I usually feel like that comes from founders that are like, you may as well just say, I don't wanna dilute myself anymore. Mhmm. And that's not necessarily the right thing because ultimately, if you wanna create value, you should just make the share price go up and like there's some companies that needed to dilute a lot in order to Yeah. Create more value.
Speaker 8:I think the exercise to go through is to look at your growth and really understand where is there a bottleneck in your business. What is the long pole in the tent that is holding you back from achieving your goals? And every time we did that exercise, we came back at with an answer that wasn't more money. It was management horsepower or, you know, we need this particular feature to go launch, which we can go build. Like, there was just other things that were the thing to go address to help us grow faster.
Speaker 8:And the place where I see folks making mistakes is they get caught up in the noise, and the logic will be like, well, so and so raised a lot of money, or what if something what if this happens, or what if that happens, which are not actually grounded in factual truths of reality. What you do know is this is where my company is. This is what it'll take to get there. And if my bottleneck is money, great. Go get money.
Speaker 8:But if the bottleneck is something else, you as the CEO, like, it's incumbent upon you to spend time on the most important thing instead of go chase another thing that actually is is not the most important thing. And so that that's kinda how we always thought about it. And, you know, I think it raising more money never was the most important thing. And so we spent our time differently.
Speaker 2:Was there ever a moment where you blinked, like, you know, halfway in or a few years past being profitable where you were like, oh, like, this idea, maybe it's worth, you know, dipping in, raising some money, getting back on the train? Was it just like, okay. Now we've been going for a few years. We're good.
Speaker 8:Well, once you get it going
Speaker 1:Yeah.
Speaker 8:It it actually gets harder to want to raise more money because you start to look at your growth rate and going, you know what? Like, why would I raise at this valuation when I can just wait six months?
Speaker 2:Yeah.
Speaker 8:And, you know, my revenue will be up by 50% or a 100%. Like, the valuation just never makes much sense. Now, obviously and and this is, I think, why you see a lot of, like, really runaway valuations right now because the founder kinda just looks at the math and says, well, it's there's no there's no sense. And so if, venture capitalist has to come in and be like, well, I'll give you a 40 x or 80 x or a 100 x to get them to go, well, okay. Maybe for that, I would do it.
Speaker 8:Yeah.
Speaker 2:Yeah. It it it's very funny that we're seeing in the market right now, like like, tough margin stuff, crazy burns, crazy valuations. And then simultaneously, we have another company in the AI space mid journey, David Holes, that hasn't raised any outside capital and is just growing, growing, growing. And so it's not like it's something unique to the to the, like, the fundamental structure of AI. Like, you there is a there's clearly a way to do it without raising an incredible amount of money, and yet not everyone's on that path.
Speaker 2:Everyone seems to be on the path of, like, burn, burn, burn. I don't
Speaker 1:know.
Speaker 8:Yeah. Well and I think it depends. You know, like, some of the the foundation models obviously have huge CapEx and Totally. Ex expenditures. And so that's a different beast.
Speaker 8:You know? Whereas if you're at the application layer, your cost structure obviously looks a lot different. So Yeah. You know, this this advice, this way of building obviously has to be filtered to your your context. Yeah.
Speaker 8:It it doesn't make sense for all companies.
Speaker 2:Yeah. Was there something about your particular business or where you fit into the landscape where you it it wasn't it wasn't positioned as a product where on on day, you know, 200 AWS is like, we're competing seriously. Or you had, like, a million competitors immediately. What like, was it less competitive because of the position in the market and kind of, like, how you how you shape the product? I like, the product felt, like, I don't know, somewhere in between, like, a developer tool.
Speaker 2:It was almost like a new market that felt less competitive, but I don't know what your experience was.
Speaker 8:It definitely was an odd product. Like, we had folks, like, comment to us, like, how exactly did you come up with this idea? And I think partly what made it so defensible was integrations, middleware is just inherently sloggy. Like, there's not a lot of secret hacks to do that. You know, now with AI, it's getting easier
Speaker 2:Yep.
Speaker 8:But it's still not easy. You still just have to, like, you know, just kinda chunk away at this stuff. Like, would put us, Plaid
Speaker 2:Yep.
Speaker 8:Others kind of in this category where it's not actually easy for a big company to just decide, oh, we are gonna go compete in this. And most of them just don't have the fortitude to kinda keep chipping away at a bunch of, like, really boring engineering work. Like, they're hiring all these engineers that wanna work on more sexy things
Speaker 1:Yeah.
Speaker 8:Versus chip away at integration code all day every day.
Speaker 2:Yeah. Now you kind of have, like, such a platform that you're in feel like you're just like a natural beneficiary of the AI wave because you're already plugged into so many customers, so many integrations, so many data sources. There's already so many primitives that AI can take advantage of. There's two areas that that stand out to me as potentially valuable. I'd love to know which one's more valuable to you.
Speaker 2:And then if there's a third that I'm not thinking of, let me know. First is just having AI copilots help write new integrations, help accelerate your software development, just do more with the team. I doubt you've done, like, massive AI layoffs or anything like that, but you're probably being more productive. That's maybe one area that is interesting. And then the other is just AI as a product that can be drawn on in the midst of moving data around.
Speaker 2:So if I have one connection over here on Zapier and then I want to have an LLM transform that data and then send it to another integration, that feels like a really, like, really amazing use case. Have those both been equally beneficial? Has one been has one stood out to you as, as particularly greater? Is there something else that I'm not thinking of?
Speaker 8:They're they're both really valuable for different reasons.
Speaker 2:Yeah.
Speaker 8:So the first, this idea of, like, a copilot or text to workflow is really valuable for helping people build new types of workflows.
Speaker 2:Sure.
Speaker 8:Inherently, like, these no code workflow editors have a fair amount of configuration involved with them. You we always invested a lot in design and making that experience good.
Speaker 2:Yep.
Speaker 8:But it's still a lot to configure. And Copilot just gets closer to how humans think about this stuff. Mhmm. Most humans are not great systems thinkers. They don't break the task down bit by bit by bit.
Speaker 8:And so as a result, a Copilot can be a really good way to attract folks into the market that may be struggled in the past. But it doesn't fundamentally change the use cases that folks can do, which is where the second one gets really interesting. And I think the this is where we've had some really interesting learnings because we have launched Zapier agents, which is a purely agentic experience, and we have our classic workflow editor where you can now inject AI steps.
Speaker 2:Yep.
Speaker 8:Now both have been successful, but the latter has been far more successful. And I think it's because when you look at the
Speaker 2:And the latter sorry. To clarify, the latter is in in in this case is
Speaker 8:Workflows.
Speaker 2:Workflows and AI steps. Yes. Exactly. Mhmm.
Speaker 8:And I think what the reason why is because agents inherently just don't quite have the reliability yet
Speaker 2:Totally.
Speaker 8:To get you to solve, like, sophisticated use cases.
Speaker 4:Yep.
Speaker 8:You know, you think about it where it's like, well, if you're asking it to do anything complex, call it, like, 10 tasks in a row, 20 tasks in a row, but the the error rate is 10% every Well, by the time it, you know, rips through 10 or 20 tasks, like, it's messed up on a handful of these things and it's way off in left field.
Speaker 4:Yep.
Speaker 8:Whereas within a workflow, you can put it in a harness and say, hey, mostly, I want this thing to be deterministic throughout all these parts of the steps. But right here, I need to to summarize something or I need it to analyze the sentiment of this or I need it to generate an email. Yeah. And you can put the agent part, the AI part in the spot where it does the thing best. And then you wrap it back in, fold it back into a deterministic workflow.
Speaker 8:And that has opened up a huge amount of usage. We have, like, a quarter billion more than a quarter billion tasks that have run through Zapier with AI like that Yeah. Alone. And I think that's the honestly, I think it's kind of a a sleepy category.
Speaker 1:Yeah. Did when did you guys realize what a good position you were in here? Because you basically spent before agentic workflows were like a term that people were throwing around every single day, you guys spent a decade basically building out really hardcore integrations with hundreds or thousands of different services and getting just simple workflows dialed so that you can
Speaker 14:Yeah.
Speaker 1:You can just slot in, you know, reasoning or or slot in LLMs at different at different steps. But have you been surprised at at at how many people are coming in to kind of like compete in this space? Because it feels like I've just seen a lot of pitches over the last twelve months that are I just look at it be like, okay, this is like this is Zapier but just like
Speaker 2:More than that.
Speaker 1:You know, pretending that Zapier doesn't
Speaker 2:exist. Exactly.
Speaker 1:Like But
Speaker 8:but AI first. Right?
Speaker 1:Yeah. Yeah. Yeah. AI first. And it's like, well, you're
Speaker 2:It's Zapier but you can buy the stock in the private markets.
Speaker 1:Well, it's it's yeah. It's it's Zapier, but Zapier also
Speaker 2:We're doing a series b. There
Speaker 8:you go. Zapier, we sell software. We're Zapier, but we sell stock.
Speaker 2:Yes. Exactly.
Speaker 8:There you go. Yeah. You know,
Speaker 2:I
Speaker 8:I do think it kinda surprised us Yeah. That we were as well positioned as we were. Mhmm. You know, we had started to dabble with generative AI a few months before ChatGPT had come out. And had started to see some customers building workflows on our private developer platform.
Speaker 8:So we have a developer platform where folks can build their own stuff, and so we'd started to see some of that happen. And as the models advanced, in particular when g p t four came out
Speaker 2:Mhmm.
Speaker 8:We were, like, very unsure if workflow was durable. Like, we started to think, like, actually, this, like, pure agentic experience is probably going to be the future. Now I still actually believe that it will be the future. I just don't think it's gonna get there as fast as, we we think it will. Yeah.
Speaker 8:And, you know, over the course of the next year, we just kept seeing agent, like, AI use cases on the traditional workflow builder grow and grow and grow and grow. And then we started to realize, like, maybe what we need to do with our product road map is actually help people surf the wave. Like, help them go from just old school classic deterministic workflows and move steadily into purely agentic ones, and allow them to kind of mix and match these experiences along the way.
Speaker 2:Talk to take it back to gross margins for me. How important is offering the full suite of Pareto frontier models within those, deterministic steps? And is there a world where you want to offer even smaller and more focused and cheaper models? We talked to one company that's training transformer based models, but just for sentiment analysis, just for censoring bad words, just for JSON to CSV or something. Like, something could almost be done deterministically in many cases, but just like you need a little bit of of AI there, and they train them on GPUs or on on, like, gaming graphics cards.
Speaker 2:And they run, like, super, super cheap. And I'm wondering, like, if you're if you're in a high if if you've built out if you build out Zapier workflows that are high volume, the cost per inference feels relative there. And I feel it feels important, and I feel like you would have a good insight into, like, how some of these, like, bigger models can kinda blow up on you if you're not careful.
Speaker 8:Yeah. Well, this is also where it's nice if you can encode your workflow into something that's deterministic.
Speaker 2:Sure.
Speaker 8:You get reliability.
Speaker 2:Yep.
Speaker 8:You get cost advantages. Yep. You get speed. You get a lot of things that are really, really nice. And then, you know, insert AI only where you need it.
Speaker 8:Now the way we've thought about this is we really wanna abstract as much of this away from the customer as possible. You know, we sell predominantly to folks in GTM orgs and GNA orgs and, folks that are not paying attention to the subtle differences between, you know, which model is best for coding, which model is best for writing, which model is best for this, that, or the other. So we're trying to abstract away a lot of those choices, and that extends into how we price for this stuff as well too. So we wanna make it a little bit more like you just buy it, we charge you for tasks, doesn't matter if it's an AI task or another task, we'll just sort of it all the math will kinda all work out for you in the end. But I imagine if you were
Speaker 1:selling Do guys have a lot of learnings from like pricing on on pricing based on on out outcomes versus Mhmm. Traditional SaaS? Because that's again, so many of the ideas that VCs have gotten excited about with agentic workflows and just Yeah. Agents broadly. I feel like our ideas that you guys have explored
Speaker 2:always been consumption based. Correct?
Speaker 8:We've always been consumption based. Yeah. Yeah. And I think the challenge
Speaker 1:sorry to interrupt, but the other way to look at that is like, you've been pricing based on work done Yeah. Is is like the the sexier way to describe that at least
Speaker 15:It
Speaker 1:is. 2025.
Speaker 8:We do a task. Like, we pay for tasks. And I think the challenge that exists for horizontal products is the way in which folks use the software. They they get variable value from it.
Speaker 4:Mhmm.
Speaker 8:And high usage doesn't necessarily correlate with high value, and low usage doesn't necessarily correlate correlate with low value. And so that's where, you know, if you're building horizontal usage based software, you run into a a trap where you're like, how is like, where along this spectrum are we gonna price?
Speaker 4:Yeah.
Speaker 8:Are we gonna pick one credit system where everything is gonna cost one and we're trying to figure out, well, is it a premium thing or is it a more commoditized thing? Or do we risk making our pricing more complex
Speaker 2:Mhmm.
Speaker 8:And start to say, we're gonna have a credit system that's tied to different value, but now your customers having to do a bunch of different calculations in their head figuring this out. This is where I think vertical agents have an advantage right now where they can say, hey. We are hyper fixated on one use case. And as a result, we can maximize the value that we are gonna sell for. We're gonna say, hey.
Speaker 8:You know, if you're in customer support, we're gonna charge you if we close the ticket. And you can do very direct math to say, well, today, I have a support rep that I gotta pay this much money every single year to answer this many tickets. If I can turn that into an agent that they can answer those questions just as well, then I'm willing to pay you know, this this is sort of like the maximum I'm willing to pay for
Speaker 2:this. Mhmm.
Speaker 8:So that's where these vertical software do have, like, pricing advantage. Whereas if you're charging horizontal, you you have a much trickier challenge because you have so many variable use cases at the end of the day.
Speaker 2:Yeah. Are there new, new markets that you're noticing open up that are uniquely available to you because of AI?
Speaker 8:I think the thing that has surprised me is the certain, like, more traditional or, like, industries
Speaker 2:Mhmm.
Speaker 8:Have been fairly quick to jump on this. And I think my hypothesis is partially that their use cases are well suited for this. So if you have if you're working a lot with, like, PDFs and, paper documentation, the SaaS stack was, like, kinda tough for you because it had to be structured. And there wasn't tooling that could turn all this, like, unstructured data into structured data for you. However, LLMs are uniquely good at that.
Speaker 8:Mhmm. And so as a result, these companies have seem seemingly jumped on this stuff pretty quick. The second thing that's been interesting is we've watched, particularly media companies be relatively fast at this, which also surprised me. In some ways, I felt like they were faster at it than certain tech companies we've spent time with this. And I have to wonder, like, how much of this is because they saw so much disruption in their business model during the Internet craze that they were like, we are not gonna let that happen to us again.
Speaker 8:Whereas technology companies have kinda had it pretty cushy.
Speaker 2:Yeah.
Speaker 8:And so like, yeah, we're we're doing the AI thing.
Speaker 1:It's fun when you're doing the disrupting but getting disrupted.
Speaker 8:Yeah. And that's so exciting. And so they're like, act two, we're gonna be on it this time around.
Speaker 1:Yeah. Where where do you stand on on estimating the impacts of AI on the job market? Because I feel like a decade ago or went around the time when you were getting Zapier off the ground, Zapier. Said it both ways. I'm sure people were saying like automating business processes will lead to with software will lead to job loss and Did people say that?
Speaker 1:I guess. Yeah. I mean, people said that with the Internet. They said you're not gonna need sales reps anymore. Everybody's just gonna be able to go and, you know, you're just gonna be able to go to a website.
Speaker 1:And I just yeah. I'm curious, like
Speaker 2:There's two data points that we've been pointing at. One is The Wall Street Journal had an article today saying that new grad unemployment is is not tracking as well as it should, and there might be a real effect of AI not driving companies to hire less new grads. And then but then on the flip side, there was this report that came out that said that 95% of AI tests at, at Fortune 500 companies did not make it past the test phase. And so AI as an installation into these large companies is not going as well. So there's kind of evidence on both sides, but I'd I'd love to know what you think.
Speaker 8:Yeah. You know, I when I think about this, I my my take is that capitalism is largely undefeated.
Speaker 2:Mhmm.
Speaker 8:And, you know, it's it's it's easy for us to spot the disruption. We can see the jobs that are disappearing easier than it is for us to see the new opportunities that are being created.
Speaker 2:True.
Speaker 8:But history will tell us that there is always new jobs created.
Speaker 4:Yep.
Speaker 8:And this is what we see play out in our customer base. Mhmm. I talked to small businesses over and over where they're like, I I I never could have hired somebody to do this work. And now because I'm doing it with automation, I'm actually getting more done. I'm generating more revenues, and now I'm reinvesting that.
Speaker 8:And when they go to reinvest that, yeah, some of it's being reinvested in AI and more automation, but some of it's being rest invested in people. So that's kinda where I think this plays out. And the second thing I I think will happen is there's this meme that goes around where it's like, well, all these software companies are just gonna have crazy high margins now. Like, we just don't need that many people. Mhmm.
Speaker 8:But again, capitalism is undefeated. If someone looks out and sees like, wow, you're generating so much value, how about I just come in? I'm willing to tolerate
Speaker 1:everybody has high margins and they're like, we should just spend three times as much on user acquisition and just get more scale.
Speaker 8:Right? Yeah. Exactly. And well, how are you gonna get user acquisition? Well, some of that's gonna be invested in advertising.
Speaker 8:Some of that's gonna be invested in people. And, like, I think at the end of the day, it nets out where, hey, we're all we're all gonna still have jobs. Yeah. But what jobs we do have, that's where it's gonna shift. And I think those reports are kind of telling that story where new grads, the requirements are shifting.
Speaker 8:What's what's needed inside the workforce is is changing. And so there's kind of a shift going on there. And that's always what's really challenging in these moments is time is the skill sets required to be successful.
Speaker 1:What if
Speaker 8:They're not static.
Speaker 1:Yeah. What about job creation around the implementation? Like, I'm sure there's been a cottage industry around Zapier for a long time now of people that just help integrate Zapier in companies. And we we were talking probably at the beginning of this year thinking that what what an you know, in the same way there used to be a big opportunity to just help companies run Google Ads or help companies run Facebook Ads and that there's still opportunities there. But it feels like right now, taking Zapier into a company and just saying like, I'm going to save you guys, you know, $250,000 a year if you pay me $20 to like set this up properly.
Speaker 1:Just feels like Yeah. That is extremely repeatable and there's so many businesses that as for as many that are coming on and and and using Zapier or other platforms, there's there's probably a multiple of those that just don't aren't even fully Yes. Aware that these tools exist yet or how to implement them.
Speaker 8:We so 100%. We're seeing the rise of the AI automation engineer. We have some of these internally where for our enterprise customers, if you want us to do it for you, we will come do that for you. And to your point, we're seeing this cottage industry starting to blossom. And it's particularly effective when you can combine that skill set with domain expertise.
Speaker 4:Yeah.
Speaker 8:So if you have somebody in HR who has this capability, they're able to work magic on this. Same thing in legal, finance, marketing, sales. If they have the systems thinking, this ability to break down tasks to to use the tools, they're often able to work wonders inside the stack. And it's been pretty exciting because we've this this person has kind of existed for all of our this is who we've served for all of our fifteen years. But in the last couple years, they're starting to get more credit inside these organizations.
Speaker 8:They often were, like, the underappreciated person who just kept all the plumbing working.
Speaker 2:Yeah.
Speaker 8:But now, like, they're like, the automation engineer, like, I'm making magic happen.
Speaker 2:Can you give me your take on MCP and how just explain it and how it fits in and is it a tailwind or a headwind, an alternative, something that you're just benefiting from immediately? How does it all fit into your landscape?
Speaker 8:Yeah. So MCP model context protocol, it's it's a protocol much like HTTP or or REST or something like this that allows, it focuses on agent to agent communication, letting agents talk to each other. I think right now, there's obviously a lot of hype around it. Whether it's a tailwind or a headwind or both, you know, we're still figuring it out. Like, I think there's a lot that has to be figured out with the use cases and whatnot.
Speaker 8:The I think the most important thing is to actually get the the use cases really dialed in. And the place where we're seeing it be most effective is in, like, Claude. We're seeing a lot of folks that set up Claude projects. They give it access to various tools, and then they go deploy that tool like an internal tool for their organization. So for example, if you wanted to create, like, a sales briefing tool for your sales reps, you might say, hey.
Speaker 8:I'm gonna set up a project. I'm gonna give it a list of a template for how I want the brief to be created, and I'm gonna give it access to HubSpot. I'm gonna give access to ZoomInfo. I'm gonna give it access to, like, deep research through ChatGPT or Perplexity or something like that.
Speaker 4:Yep.
Speaker 8:And now my sales reps can just come in and say, hey. I'm talking to, you know, Sam Altman tomorrow. Like, what do we know about our deal with OpenAI? Mhmm. And it goes and does deep research.
Speaker 8:It fixes everything you have from your internal CRM, and it generates a brief for you. So you come in way more prepared. So those types of, like, internal tools in the past, those were, like, kinda hard to build. And MCP is, like, making it really easy for folks to build those kind of, like, chat style, internal tools really effectively. That's the use case that we're seeing pop up most frequently.
Speaker 8:But I I have to imagine that as time goes on, we're gonna see a a lot more. Like, we it very much feels like we're in the very early innings, and we haven't, you know, seen these, like, new user experience paradigms, like, launched yet or popularized yet.
Speaker 2:Yeah. Yeah. It always it always just felt like to me with just the just on a on the basis of inference cost, if you're hitting an MCP server a million times, you would rather just have your agent, like, write an API integration and just go direct to the database for most of those things. But there's probably specific use cases where it makes sense, especially if you're, like, dancing around a lot of different
Speaker 8:Well, I think that's I think you're correct there. Like Yeah. At the end of the day, there's gonna be some use cases where you want, you know, an API call and deterministic code because it's faster, cheaper, more reliable.
Speaker 2:And we saw other
Speaker 8:use cases.
Speaker 2:Yeah. We saw this with ChachiPG pretty early. It was like, yeah. It's pretty good at math. It can memorize a lot of math.
Speaker 2:But like, why not just give it Python and then it can get the math a 100% right? Like, I don't care. I just want the right answer. Don't need to like stunt on me by memorizing every number of pi. You can just go look that up on Google if you want.
Speaker 2:Anyway, Jordi
Speaker 8:That's fine. That worked out pretty good in the past.
Speaker 2:Yeah. Exactly. Let let's stand on the shoulders of giants as much as possible. Anyway, this was fantastic. Thank you so much for hopping on.
Speaker 2:We will talk to you soon. Great to chat.
Speaker 4:Thanks, guys.
Speaker 12:Have a
Speaker 2:rest your day.
Speaker 1:Cheers,
Speaker 2:Wade. In the meantime, let me tell you about Bezel. Your Bezel Concierge is available now to source you any watch in the planet. Seriously, any watch. You can go to getbezel.com.
Speaker 2:And we have Dan Wang in the waiting room coming in to the TVPN Ultra Dome. He is releasing a new book today, I believe. It's already being reviewed.
Speaker 1:Gotta ask him how many pages it has.
Speaker 2:Is that the question you wanna ask?
Speaker 1:And hit the gong. Okay. Yes. Yes. Yes.
Speaker 2:Definitely. So
Speaker 1:The the what everybody's been waiting to hear Yes. How many pages is your new book?
Speaker 2:Yes. Yes. Yes. He's a research fellow at the Hoover Institute. The book is China's Quest to Engineer the Future.
Speaker 2:I saw a a video of him going viral talking about the difference between China's government officials and America's government officials, talking about how they have an engineering society. We have a lawyer society. It was fascinating. Can't wait to talk to him. So we will bring him in from the rooster in waiting room.
Speaker 2:Dan, how are you doing?
Speaker 1:Welcome to the show. Hey. Welcome to the
Speaker 5:Really well, guys.
Speaker 2:Thanks so Big
Speaker 1:day for you.
Speaker 2:Huge day.
Speaker 13:Well, huge day. I get to be on TBPN. This is Awesome. This is a nice day indeed.
Speaker 2:Welcome. Welcome.
Speaker 1:Been waiting for this moment.
Speaker 2:How many pages are are in the book?
Speaker 13:Less than 300.
Speaker 1:Wow. Less than 300. I think this should be a complete. Quick read. Quick read.
Speaker 2:Talk about the background
Speaker 1:intentional was by the way? Were you were you going for some like, did you did could you have written, you know, 700 pages and and and
Speaker 2:You want it down or
Speaker 1:To condense it down. Yeah.
Speaker 13:I think it's I think it's much better to write a book that is that people feel was too short and could have been a lot longer Mhmm. Than it is to write a book that everybody feels should have been a 100 pages shorter. So that you wanna on that side.
Speaker 2:Yep. Yep. Give me some background on on the path to writing the book, type of research you were doing, what inspired it, and a little bit on your background.
Speaker 13:I was in China from 2017 to 2023 working as a technology analyst mostly for hedge funds
Speaker 2:Mhmm.
Speaker 13:Thinking about semiconductors, clean tech, China, and science, trying to figure out what's going on. So I was living in China at the start of the first Trump administration. I was in Hong Kong, then Beijing, then Shanghai, trying to figure out what's going China's going to do on Huawei, how it's going to respond on the trade war. So I ended up living through the first trade war, the trade war that morphed into a tech war that really hurt Huawei. I lived through the entirety of zero COVID, and I was just trying to make sense of all of this experience.
Speaker 13:I was thinking that, you know, you we use these words like socialist, capitalist, neoliberal, democratic, whatever that means to describe The US and China now. These are all words from, like, the eighteenth century or something. And let's just come up with a new framework, and that's why I came up with the engineering state and the lawyerly society.
Speaker 2:The Lawyerly Society. It's a great framework. It really stuck out with me. Your yeah. Remind me where your family, comes from within China.
Speaker 2:It's somewhere somewhat far away from Beijing. Is that correct?
Speaker 13:Yeah. It's in the southwestern periphery named Yunnan. So it's really far away from Shanghai and Beijing.
Speaker 2:That's right. And and and you said that the the distance from the government was relevant to the political culture there. And I was wondering if there was a similar dynamic that you saw in The United States. Like, is being in California or Silicon Valley, is there a distance from Washington, D. C.
Speaker 2:Or Mar A Lago or Trump Tower in New York that that that is at all relevant? Or do you think it's a do you think that that distance from the center of government power unique to the the geography of China that your family grew up in?
Speaker 13:I think I'm an outsider in both The US and China. Well, I'm Canadian, so I'm not not exactly American.
Speaker 2:Sure.
Speaker 13:Now I'm in Silicon Valley, but I I've never quite felt like this is this is exactly where I'm from. This is exactly where where where I need to be. And also in China, I didn't grow up in these hypercompetitive Chinese cities like Shanghai or Beijing, where everybody owns a bunch of property. You liquidate one of these properties, you can send her kid to UCLA and give her a Mercedes as well. And so I I I feel like my strength looking at both countries is as an outsider, not really, you know, buying into everything that DC or Silicon Valley thinks about itself.
Speaker 2:Yeah. How how how when when when you when you try and define, like, the the structure of China's government or the United States government, you've obviously coined these terms, the the the engineering and and lawyerly society. I was looking at data to try and quantify the difference between the Chinese economy and The US economy. And The US has, I think, higher taxes and potentially a higher share of the of the population working for the government. And I'm wondering if there's this world where you can look at The United States as a socialist country that's trying to be capitalist and China as vice versa.
Speaker 2:And I wonder if you could, like, toy with that at all where where, you know, The US is actually, you know, like, the government is huge. And yet, it is the country of, like, oh, yes. The government is not involved at all. And in fact, it is extremely involved.
Speaker 13:Yeah. Well, I think the best line I've heard on this is that the Department of Defense is America's answer to central planning at the and the Communist Party
Speaker 1:Yeah.
Speaker 13:Because it's just so big. My view of China is that it is nineteen fifties Eisenhower America.
Speaker 2:Mhmm.
Speaker 13:Giant manufacturing sector. They're building highways absolutely everywhere. Mhmm. Very little immigration. Very traditional gender roles.
Speaker 13:Pretty low taxes. Very minimal transfer payments. Eisenhower had more transfer payments because he embraced the New Deal. But there is a sense in which I think China's the most right wing country in the world, for all of the reasons that I've just outlined. And The US is kind of a kind of a capitalist country that's a little bit embarrassed about it and trying trying to get to a bit more socialism.
Speaker 2:Yeah. Wait. Yeah. I heard you mention that, like, imperialism was somehow, like, the final form of capitalism or something like that. Can you explain what you meant by imperialism's relationship to capitalism?
Speaker 13:Well, that that wasn't me. That was a Okay. That was a much balder thinker, Vladimir Lenin
Speaker 2:Oh, other side.
Speaker 1:You were
Speaker 2:quoting it.
Speaker 1:Yeah. That's right.
Speaker 13:I was quoting Lenin. Yeah. That's right. So imperialism, the final stage of capitalism, which is one of his big pamphlets. I recommend Okay.
Speaker 2:But but I I I unpack the the thesis there, because I don't immediately understand intuitively the relationship between imperialism and capitalism. Like, what was his argument? And then, what's your take on his argument?
Speaker 13:Yeah. Well, I think maybe we don't need to get too deeply into Marxist thought here. But they have something about class struggle and how the proletariat really needs to rise up because the the the people at the top have all the resources. Mhmm. And the capitalists, in order to maintain their capitalist expansion, really just have to go overseas and conquer Africa
Speaker 2:Sure. Sure.
Speaker 13:Asia and Latin American in order to maintain their expansion. That's the idea.
Speaker 2:Yeah. And then and then, like, the the the white pill of, like, America avoiding that. Like, what what what was the what's the bull case for for American capitalism not devolving into imperialism?
Speaker 13:Well, imperialism, I think, was a thing of the past when, you know, you really needed a lot of rubber in order to power your cars. And we don't need this natural rubber anymore. You know? We can synthesize it through petroleum. Yeah.
Speaker 13:And so I think The US doesn't need to be imperialist. That doesn't mean that it doesn't have any other sorts of problems, but it hasn't needed to conquer a lot of territory, in part because it's built this wonderful structure of alliances that you don't really need to conquer them because the elites kind of do what you already want to do. And I Yeah. I wonder if the Trump administration is also gonna value all of that.
Speaker 1:Yeah. How much do you think Trump is actually inspired by the Chinese approach?
Speaker 13:Well, every time he talks about his buddy, Si, he compliments Si for his great head of hair. And this is, like, something that they talk about pretty often. I've always felt that Trump never said a bad word about his buddy Xi Jinping up until COVID. Yeah. Trump always kind of hated the Japanese and the Germans more, which were the the enemies of the nineteen eighties.
Speaker 13:I think there is an aspect in which The US is becoming like China. The US is nationalizing Intel. Intel is now going to be a state owned enterprise with American characteristics. There's a lot less data, I think, with the statistics not being perhaps quite right.
Speaker 2:Yeah.
Speaker 13:There's a lot of interference inside the economic agencies. I I think there is more construction, but there is more construction around gilded ballrooms and detention centers. And I just want Trump to take a leave from China and build a lot more mass transit, build a lot more subways in New York where I'm chatting with you from Yeah. Build a lot more housing for people. Let's let's make Silicon Valley, you know, a much more livable mass transit friendly place.
Speaker 2:Is there any is there any hope for the federal government building anything? Really, I feel like all of that is the domain of the state and local governments when I think of the roads and the bridges and the high speed rail in California. Like, that's not a federal project. Should it be?
Speaker 13:Well, the interstate highway system is a federal project, and that was something really built by Eisenhower.
Speaker 2:Sure.
Speaker 13:Manhattan was a federal project. Yeah. Apollo was a federal project. There is a lot of local building. That's for sure.
Speaker 13:A lot of maintenance, a lot of highways need to be built locally. Yeah. But I I think there's no reason for the federal government not to be much more muscular and take over California high speed rail. Rather than nationalize intel, let's nationalize California high speed rail, do a much better job
Speaker 2:at it. This feels like something that Trump could get on board with, like, for sure.
Speaker 1:This He would love to pop over to Newsom's backyard.
Speaker 2:He loves building stuff. Yeah. He's a builder. He's a real estate guy.
Speaker 1:What about on the energy side? What what what what do you think America can learn from China's approach to increasing energy production?
Speaker 13:Well, Trump has this policy of all of the above. And I think China is actually the one that is much more all of the above because they're building most of the world's coal plants still today. They're building all of the wind. They're building all the solar. So they don't have that much natural gas, but they're building much of everything else, including all the nuclear.
Speaker 13:So the Trump administration is doing more nuclear now, but they're getting rid of wind projects that are almost completed. They're not really building much more transmission. I guess they're favoring coal as well. But China is doing all of the clean technology, all of the new stuff, as well as some of the old stuff too.
Speaker 2:One one question have on, like, press freedom in China is just why isn't China does does the repression of the press in China reflect a lack of confidence in how good things are over there? Because you think if if you're if you're confident about what you're doing, if you're happy, if you're successful, you'd be like, there are no skeletons in the closet. Let the press run free. They will, by default, report positive things.
Speaker 13:I think that is a sign of lack of confidence.
Speaker 1:Mhmm.
Speaker 13:The Communist Party is super thin skinned about any sort of criticism. Yeah. But I think the other aspect of that is that there are a bunch of engineers. And you've spoken to engineers. Yeah.
Speaker 13:They're not really good at talking.
Speaker 2:They're not
Speaker 13:they don't even wanna talk to to any of us. Right?
Speaker 2:Yeah.
Speaker 13:So they like to just sit, you know, sit with their projects and design a new bridge or something. Whatever they don't understand, they tend to censor, and they're also really prickly skinned about any sort of criticism that they have. And so I think that it is a manifestation sometimes of lack of confidence in China's system. They're really nervous that any criticism will somehow topple the communist party. And then whatever sort of chokes or any sort of humor they don't understand, they simply censor it.
Speaker 13:And so I think the engineering state is also kind of an explanation for why China's been relatively weak at producing soft power. It's not like the Koreans, you know. We're all listening to k pop. Yeah. We're all watching Squid Game.
Speaker 13:Yeah. The Japanese with Nintendo and the Game Boys and Mario and Mario Kart, they've been amazing. Chinese have not produced quite that much and
Speaker 1:I think about the LeBoo?
Speaker 2:LeBoo is the first, yeah, the first attempt, I suppose.
Speaker 13:I think this is kind of a new thing. China's been getting richer for nearly five decades now and this kind of a weird doll is that the best they can do? I don't know.
Speaker 1:Well, TikTok. TikTok would be the other TikTok feels like
Speaker 2:TikTok is it it it's not its own cultural power. It's not its own brand. It's like a bucket that people put different brands into. It's it's like the hoverboard, the anonymous hoverboard that came that product was developed in Shenzhen. And and no it and it never had a brand around it.
Speaker 2:It was just five different front brands on top of a technology that was engineered. I don't I don't know. It an interesting phenomenon.
Speaker 13:Yeah. I mean, mostly on TikTok, all I'm watching are short clips of TBPN, not the not the Chinese propaganda. Right? I'm only watching American propaganda from
Speaker 1:that is really proof that that they're not putting their thumb
Speaker 2:on if
Speaker 1:we have any traction over there. We have any traction.
Speaker 2:Through what
Speaker 1:Have you been have you been surprised to see Elon engaging in in lawfare with the the apples of the world, the open AIs? Feels like, you know, if anybody represented the Engineer state. State in America was Elon, you know, creating these mega projects, massively impactful companies yet.
Speaker 2:More broadly, just like it feels like the lawyerly society kind of had organ rejection from having an engineer in the room. That was like I don't know. That if I'm trying to apply your your frame of thinking to the Elon Trump, like, were other people that were successful in Washington. David Sachs has a law degree. Peter Thiel has a law degree.
Speaker 2:Keith Rabois has a law degree. Elon goes in. Vance. JD Vance. Elon goes in.
Speaker 2:He's in the same crew. He's in the PayPal mafia, and yet he is, you know, ejected pretty quickly.
Speaker 13:Yeah. I mean, I think this is one of the tragedies of Doge. I feel like we could have had engineers building a really big mega project inside government as we used to do. We had Robert Moses build a lot of projects in New York, sometimes not very well. We had Hyman Brickover, father of the nuclear navy, build this giant navy project powered by nuclear reactors with some ships as well.
Speaker 13:Yeah. What did Elon do? Well, he wasn't really trying to build anything inside government. He was kinda destructive to a lot of aspects of government. And I really wish he applied his talents more to, like, build 30 big nuclear reactors for for The US instead, and that's that's not what happened.
Speaker 2:Would those need to be, net new projects? Like, is that is that a more fertile ground for government projects as opposed to, say, take over Intel, take over the high speed rail initiative, like, over something. Because it just feels like there's a lot of stuff that's not working both in the private sector and the public sector. And that seems to be where we focus as a society in America. Just there's so much that's going wrong.
Speaker 2:The government is kind of the lender of last resort that can step in. When I agree with you, I think I like the idea of another Apollo project, another Manhattan project, another project that's, like, completely new and and no one would underwrite it in the private sector to begin with.
Speaker 13:Yeah. Let's have both. Let's have a functional high speed rail project out of California. Yep. Let's have many more nuclear reactors because we I think we had only one new nuclear reactor in something like the last forty years, and that's kind of pathetic.
Speaker 13:I'm talking to you now from New York. New York is trying to fix up Port Authority Bus Terminal. It's gonna take something like five years and $6,000,000,000 to make a new bus station. Every mile of subway that New York builds cost something like $2,000,000,000 per mile. This is just the highest cost in the world.
Speaker 13:And we can't even build something as simple as a public toilet in San Francisco. And so, you know, we need to we need to get better at every sort of thing. You know? We need to do the public toilets. We need to build the bus stops.
Speaker 13:We need to build the nuclear reactors. Let's go to the Mars.
Speaker 2:Yeah. Yeah. Is is the is one possible path here, the wolf in sheep's clothing, the engineer with a law degree that they acquired online or something? They passed the bar in their free time. Like, can the lawyerly society be hacked in the way that an, you know, an an engineer might social engineer a a job application or or reverse engineer an API and hack a website?
Speaker 13:Yeah. I want Peter Thiel to hack all of that and Yeah. Be the lawyer that actually is actually the real engineer. Yeah. I think that would be great if something like that could happen.
Speaker 13:But I also feel like The US used to be an engineering state. You know? It built a lot of, in the nineteenth century, built canal systems, built the train systems, built a lot of skyscrapers in Manhattan and Chicago. Yeah. And then in the mid twentieth century, we built the highways, we got Apollo, we got Manhattan, we built the Hoover Dam.
Speaker 13:Mhmm. You know, the heritage is out there. But right now, it feels like we're walking amidst the ruins of a fading industrial civilization. We need to at least renew this and hopefully build more too.
Speaker 1:Yeah. Trump yesterday said, we're going to get along good with China. I hear so many stories about how we're not gonna allow their students. We're gonna allow, it's very important, 600,000 students. It's very important.
Speaker 1:Where where do you think that's coming from? Feels like a little bit of a pivot. And do you think there's that much demand on the on the student side for opportunities at US universities?
Speaker 13:Yeah. Trump is now the most pro China member of the White House.
Speaker 1:And I
Speaker 13:as I said, I think I've always every time I saw Trump and I was living in Beijing in 2017, 2018 when he was visiting China. He visited the Forbidden Palace once. He's always said nice things about China up until COVID. He his real enemies are, like, the Germans and the Japanese. That's been long the case, and that's not always going to be true.
Speaker 13:But, you know, a lot a couple of months ago when he a journalist asked him, does The US want so many Chinese students? Trump said, it's our honor to have them. You know? It's our honor to have them. And I think that's a that's a really ringing endorsement of Chinese students.
Speaker 13:And I think there's still a lot of Chinese who are really keen to move to The US. They're attracted by some aspect of working without censorship if they're in the arts, if they're working in journalism. They're attracted by some aspect of pluralism. New York is a great place. San Francisco is a great place.
Speaker 13:They wanna come.
Speaker 1:Yeah.
Speaker 13:And I think more American students should also go to China. You know, take a look at what Shanghai is like. Take a look at what Shenzhen is like. You know, let's just have more exchange and let's have more mutual curiosity too.
Speaker 1:I studied I studied abroad in in Shanghai in 2016. And and
Speaker 13:What'd you think?
Speaker 1:Within a week of arriving, I decided to stop studying Mandarin and I was excited to go home. I think that's that was part of part of partly because I was born and raised in California and I like clean air and healthy food and things like that which are not in large supply over there. But I was still shocked. It it was overall a cool experience. It was interesting because I was working at a at a interning for a company that was at a Chinese startup accelerator.
Speaker 1:And I got to experience the how hostile the the sort of local market was to external external kind of startup players in the ecosystem.
Speaker 2:You also got paid to be in a promotional film about teaching English which you weren't doing. Right?
Speaker 1:Yeah.
Speaker 2:Yeah. Local government fraud.
Speaker 1:Yeah. Yeah. No. Yeah. Can we
Speaker 15:pull up that clip?
Speaker 1:Let's I think it'll be tough to find. I I still don't I
Speaker 2:still Yeah. Don't One day Jordy gets paid to go out to some like province. There was The official was clearly cooking the books on like how much English was being taught.
Speaker 1:Yeah. There was there was a there was a local some some state government had like really bad test scores and they they they wanted to bring English teachers which anybody any student in China can become like an English teacher Yeah. Whatever. But anyways, it was a very weird very weird experience. It was this is also during the during the election cycle which was just absolutely wild.
Speaker 1:But Yeah. I'm not surprised now that I think there's like only 800 ish American students currently studying in China which is just such a So so yeah. Wildly inverted from from how many Chinese students that we have Yeah. Here.
Speaker 2:Switching gears, what what do you think of I like I like the take about, like, the the quantitative nature of Chinese policies. Zero COVID, the one child policy. It's very quantitative. My my kind of take on the on the Chinese birth rate decline was that if you can effectively put a gun in someone's face and tell them they can only have one child, you can put a gun in someone's face and tell them that they have to have three children. And so, is is there actually cause for, for, like, nervousness or fear around true population decline if you are if you do have the authoritarian playbook in your back pocket and you can just upregulate fertility, essentially?
Speaker 1:I doubt it. I think it it it is.
Speaker 9:You can stop a lot of
Speaker 13:births by putting a gun to people's heads.
Speaker 1:It's much
Speaker 13:harder to help. Difficult to, you know, coerce some measure of population.
Speaker 2:Mhmm.
Speaker 13:You know, how how how are you gonna get two people in bed to and and put a gun to their their their head? I think that's it's not the best conditions. Not the best conditions.
Speaker 2:It it
Speaker 13:It's much harder.
Speaker 2:Is is is population decline, like, overrated, underrated? Is it is it a serious threat to China in the long term from an economic perspective or population perspective?
Speaker 1:Yeah. Peter Overrated in the short Yeah. Peter Zaihan loves to go on and say how how cooked the he's like Yeah.
Speaker 2:Yeah. He's been saying that for a long time. But What what were you saying?
Speaker 13:Overrated in the short term. Yeah. Correctly rated in the long term. Mhmm. I mean, the the curve is not that steep right now.
Speaker 13:The population is really gently declining.
Speaker 2:Sure.
Speaker 13:You don't need a giant population in order to have a semiconductor industry. Right?
Speaker 1:The the
Speaker 13:global population of semiconductors is not that large.
Speaker 1:Yeah.
Speaker 13:And so this is really going to bite something like twenty years from now. Yeah. But that's still twenty years when you know, twenty years is a plenty long time. Twenty years ago, you know, we were dealing with some sort of a housing bubble, and The US was bumbling around in Iraq and Afghanistan. Twenty years could be a long time, and it could be that China fully deindustrializes
Speaker 2:Oh, wow.
Speaker 13:Germany and Japan and maybe even The US over the next twenty years. And that sounds pretty bad.
Speaker 2:Yeah. What what is your frame of thinking around the Chinese semiconductor industry? It feels like they've been investing consistently for decades, Never really hit the leading edge, but they've always been there in the conversation. They've never stopped investing. But how do you think about China's place in the competition against TSMC, ASML, the rest of the, like, in a Western semiconductor supply chain?
Speaker 13:They've never caught up, but they're closer and closer. And as they get closer and closer, the profits among the leaders are going to shrink because they're going to be outcompeted by China. Mhmm. You've already seen this happen in memory chips, which is simpler, but Micron has been kind of struggling for quite a while. Mhmm.
Speaker 13:Intel struggles have almost everything to do with itself and nothing to do with China, but it could also be that once China gets much better at foundry, then, you know, a lot of orders will shift to SMIK, which might be able to offer a lot of cheaper alternatives. So I don't think that China will catch up to TSMC in the next, let's say, ten years. Mhmm. It might never catch up. China also might never catch up to ASML.
Speaker 13:But if it is just consistently following behind and it's good enough, you know, maybe that extra quality level is not worth triple the prices. And that's always been China's success. Right? Yeah. They they they make, you know, 80% is good at half the price, and that's good enough for most people.
Speaker 13:And once that shifts, then a lot of the leaders stop having profits too.
Speaker 2:Are there any are there any moves by The United States in the competition for semiconductors with China that you would like to see America avoid or you'd like to see America particularly go down a particular path in terms of, the semiconductor competition?
Speaker 13:I think that America should import a lot more Taiwanese engineers.
Speaker 1:Sure.
Speaker 13:Send them to Arizona. Send them to California, wherever it is. Yeah. And then just bring all of their process knowledge into, you know, manufacture in The US instead. The US isn't hasn't done a great job supporting Micron, hasn't done a great job supporting Intel.
Speaker 13:I'm skeptical that nationalizing these companies is really gonna be a good solution. But The US has everything it needs to succeed in chips. You know?
Speaker 2:Yeah.
Speaker 13:In Intel hasn't been good, but NVIDIA and Apple could shift a lot more of their orders to, let's say, a better Intel or a better TSMC TSMC. Import a lot of ASML equipment and then just become a lot better at that. It has a lot more resources and much more capabilities than China does now.
Speaker 2:Yeah. The yields in Arizona seem particularly good. I'm not sure where I heard it, but someone was saying that there was potential the the potential of TSMC spinning out the Arizona assets, which I think might be quickly made a meme stock. But Mhmm. Certainly would be an exciting exciting
Speaker 1:do you expect the trade war to resolve between US, The US and China just given Trump's more up to date messaging around, signaling that, you know, we're actually we actually might be friends after all?
Speaker 13:Every time it gets close, there's always the chance that it falls apart. And I've seen that the trade deals fell apart several times, when I was living through the first trade war in Beijing. And so I wanna be optimistic that these two countries come to some sort of agreement so that, you know, we don't have the world's two biggest countries at each other's throats two biggest economies at each other's throats. But I'm not really optimistic. Trump is erratic, and sometimes he wants to make a deal, and sometimes he doesn't.
Speaker 13:And even if Trump and Xi come to some sort of agreement, I'm not sure if that's really good for the world. What if Trump decides that he's simply going to gift Taiwan to Beijing? You know, I don't think that would be good for the world. And I think there's a lot of European countries and other Asian countries who are really nervous that they they do come to some sort of accord. So I don't have a I don't have a good sense of what what is the right move here.
Speaker 2:How do you think China is thinking about Taiwan? There's there's a I think America comes to the Taiwan conflict with a very cold war mindset, a very a very kinetic warfare mindset where I've heard more interesting theories around sort of like slowly shifting the population with propaganda and political influence and just creating a more a more pro China Taiwan over time, being very patient might be something that's, like, more in the direct playbook, of China. What's your current thinking on how how China would like Taiwan to play out if everything went according to plan over the next, like, decade or so?
Speaker 13:China has had this patient strategy for a really long time Yeah. And then it's tried to shift the population with propaganda. It was on course to work until they blew it up themselves by being really mean towards Hong Kong. So China promised Hong Kong that it's going to have essentially fifty years of freedom, and it did have about twenty years of freedom. And then she went back on basically Deng Xiaoping's word, and they crushed it.
Speaker 13:And so after that, you saw that the Taiwanese population don't have faith that China would actually respect any of their own wishes. And so I think what we're thinking about now is I don't think that a kinetic action, a big conflagration in The Pacific is the most likely. Yeah. I think the most likely path is just some sort of status quo, which the two, you know, The US, Taiwan, China don't really try to do anything big. And if anything, more likely than a kinetic action would be some sort of a blockade Yeah.
Speaker 13:To surround Taiwan. And then The US would be in this kind of a tough position to have to be the initiator to break the blockade rather than, you know, being the defender of Taiwan. Mhmm. And so I think that that is kind of the challenging politically challenging thing that Beijing would like to put the American position in.
Speaker 2:Yeah. Well, hopefully, it's resolved peacefully. We'll continue monitoring the situation. Thank you so much
Speaker 1:for Always monitoring. Show. Yeah. Congrats on the launch.
Speaker 2:Congrats on the launch.
Speaker 1:Thank you very much. Get our copy. This is fine. Yeah. We'll talk soon.
Speaker 2:Have a great day. Alright. We'll talk to
Speaker 1:you soon. Bye.
Speaker 2:The book is Breakneck. You can go and check it out. Dan Wang
Speaker 1:Send it. Pufour. Right up the charts.
Speaker 2:Yeah. Send it up to the top of the charts. Our next guest is in the restream waiting room. We have Nick from Adio coming into the studio. Sharp.
Speaker 2:What do we got?
Speaker 1:Fantastic name. The news. Give us the news. What's happening? Welcome to the show.
Speaker 14:Hey, guys. How are you doing?
Speaker 1:Great. Late for you. Right?
Speaker 14:Yes. It is. Especially when you are you've got two toddlers asleep in the house. This is well past bedtime.
Speaker 1:Yeah. Yeah. Well, I I know how that goes and I'm yeah. I'm glad you were able to always good to get them. It's good to have like a meeting set for you know somewhere around bedtime.
Speaker 1:It's like extra incentive Exactly. To have bedtime.
Speaker 14:Yeah. And also dodge the duties of putting them to bed.
Speaker 1:It's all
Speaker 14:Thank you.
Speaker 1:Good. Good. Well, big day. Big day. Congrats on on the raise.
Speaker 1:I have the, the the Gong, mallet here ready if you can give us, the details.
Speaker 14:Okay. Absolutely. So we are very, very excited to announce our $52,000,000 series b led by Google Ventures with existing investors.
Speaker 1:Sorry to interrupt. Fantastic. Breakdown, give us I mean, first time on the show, give us kind of the his Yeah. Full kind of abbreviated, but full history of of the company and how you guys got to this point because it hasn't it's a big milestone, but certainly been at it for a little while now.
Speaker 14:Yeah. Absolutely. No. Big long journey. So, you know, fundamentally, what what we do is we build an AI native CRM.
Speaker 14:And what that means is a very, very flexible data model. It allows businesses to mold out here to their go to market motion rather than having to do it the other way around, which has been the way software has worked for a while. Yep. And then the a massive amount of data ingestion, which gives us all of the context to automate action, essentially. DRM is a big product to build, a very big product to build, and there's not really an MVP of a CRM.
Speaker 14:It's a it's a big ask for a customer to adopt it, and, you know, we've we've got about 5,000 companies that that that have now adopted Ateo. But to get there is is a lot of engineering. And so we did three years of of engineering in a, you know, in in a sort of start up desert prelaunch.
Speaker 1:Prelaunch.
Speaker 14:And yeah. So we did three years pre launch of of just hard engineering grind and launched that two years ago.
Speaker 1:Incredible. What yeah. I guess, like, maybe talk about kind of the inflection points at what stages kind of kind of where LLM started to really unlock value for for customers and Yeah. Where kind of where you had those initial sparks? Because I think like when people Yeah.
Speaker 1:For better or worse, every CRM provider now says that they're AI native. So I also wanna understand like what what is that actually what does that actually mean in practice and what kind of advantages do you have as a new player that that hasn't, you know, been in the industry for couple decades at this point?
Speaker 14:Yeah. I think I mean, I think fundamentally, we have two really big advantages. So one is the quantity and resolution of the data that we ingest and building a data model that can do that. So LLMs work great when they have lots of context, and, you know, you need to you need to feed them that context. And so one of the things that, you know, we we we worked one of the first things we worked on was this data model and being able to instantly ingest the company's, you know, emails, calendar, product data, etcetera, etcetera.
Speaker 14:And so that was the bit that really took, you know, took took a long time to build, especially when you need to do it at for for CRM. The other thing that is is, you know, a big difference between Arteo and and and sort of legacy products is that we think that well, we have a thesis that code is becoming the new no code. So the idea of of no code and these kind of very complex UI that you have to learn and very steep learning because you're learning how to code, but you're learning something pretty complicated. And, you know, you especially when you start to hit up against edge cases, etcetera, then the the UIs become extremely complicated. And so one of the things that we've sort of engineered into Atio from the offset was the ability to execute code inside of your CRM.
Speaker 14:And you think if you think about what has made Salesforce successful is this infinite flexibility through very, very complex engineering processes with, you know, with Apex and a language not many people know and huge amounts of difficulty. But what we what we do with that is build in this sort of native code execution very early, and LLMs are are brilliant at generating code, especially in these kind of safe, somewhat constrained environments. And so that's another thing that we think is going to especially, you know, as as this plays out, it's gonna be a really, really big deal. This idea that software becomes so much more malleable because code is so much easier to generate.
Speaker 1:How do you think about the right like, where where is your focus on on the customer side? Again, CRM has so many different applications within different companies, and it's Yeah. In in the long run, you can serve everyone, but what what's the focus been to date in in the in the kind of 5,000 you mentioned?
Speaker 14:Yeah. So the focus really is, is, is on, you know, what we would consider builders. So so people who like to get stuck into building things, the the rise of the GTM, the go to market builder is is pretty is pretty apparent now. Yeah. And so about 50% of our customers are are tech companies, and and and even the 50% that aren't tend to be people who who really want to get stuck into building something.
Speaker 14:But but, you know, as as you said, CRM has a huge range of users, and we think deeply about the kind of, you know, the consumer of the CRM. That's the AE, the SDR, etcetera, all the way through to someone in RevOps or or, you know, building out really complex go to market motions. And so we have to serve all of those customers, and, you know, we we focus a lot on making the consumption of the CRM super seamless as well. And, obviously, AI has been incredible for that. You know, massive reduction in data entry and and stuff like that.
Speaker 2:Talk to us about gross margins. They're they're in the news with a lot of companies sort of like just reselling inference. Obviously, your business is very different than that. It doesn't feel like I'm just paying you for tokens or or just output. But are there any examples of, like, customers where you've looked at their usage and you've been like, wow.
Speaker 2:This person somehow triggered, like, a million a million different calls and and ran up a big bill. And are there any are there any lessons that you've learned from just, like, building an AI product that is on the back of inference and does have real costs that are somewhat variable?
Speaker 14:Yeah. Yeah. Absolutely. And, you know, the like all good startups, the the the sort of approach we took to this initially was it's not our focus right now. In the last sort of six months, twelve to six months, we've actually made incredible, you know, incredible gains there, and we're in a very, very good place now.
Speaker 14:And that has been a combination of I mean, that's that's a combination of models getting more cost effective and us learning to use them better. Mhmm. The one of the things that we can do, for example, is we can we we can decide at one time which model is best suited for a task. So I think this is now becoming a relatively mainstream strategy. But if we're digesting an entire call transcript, we don't need to use the best reasoning model.
Speaker 14:Yep. We can do sort of compaction first on a faster, cheaper model, and then put less tokens into a better reasoning model.
Speaker 2:Yep.
Speaker 14:And so it's it's it's exactly. Yeah. And so it's been a big engineering effort, but with a combination of all of these techniques, you know, we have very, very good margins there. The other thing is a lot of the the the the sort of the value that the LLM provides is is very apparent to the end user. So it's worked on, and that's changing the way that we think about pricing as well.
Speaker 14:And so, you know, CRM has historically been just a seat based product, but I think increasingly, we'll see that that will that will change. And, you know, we now have a hybrid pricing model, which is there is there is a seat based aspect, and we give sort of very generous automation and sort of AI credits to those seats. But if you wanna go really wild and you want to replace a lot of work, then you can buy credit to do that.
Speaker 2:Yep. Makes a ton of sense. Well, congratulations on the round. Thanks so much for hopping on the show. We will talk to you soon.
Speaker 2:Have a great rest
Speaker 1:of your day. Back on anytime.
Speaker 2:Rest of your evening.
Speaker 14:Absolutely. Thank
Speaker 3:you, guys.
Speaker 14:Yeah. Nice to see you. See you.
Speaker 2:Up next, we have Sean from Coinbase joining. I wanna get his reaction to this front page news about stablecoins. Wall Street calls for stablecoin rethink as friction with crypto industry builds. There's a loophole on industry yields apparently. We're gonna dig into it.
Speaker 2:He's in the Restream waiting room, and now he's in the TV in Ultradome. Welcome to Restream. How are you doing?
Speaker 1:Good to see you.
Speaker 3:Hey, guys. I'm doing great. Good to be here with you.
Speaker 1:The chief business officer. It's a great title. It's
Speaker 2:the best. Anyway, give us a little of your background and and what you're working on. What's the most interesting thing in your world these days?
Speaker 3:Yeah. First off, congrats on a 100 k pump for you guys in under a year. That's huge. You know, we're just trying to keep up with the crypto charts here.
Speaker 1:Yeah. It's
Speaker 3:tough. My background so like you guys mentioned, I'm chief business officer at Coinbase. I oversee the broader company's strategy, partnerships, m and a investments, and a handful of other things. I actually started out my career wanting to be a brain surgeon. So I studied neuro neuroscience at UCLA.
Speaker 3:Mhmm. Realized, like, late in college that I had a a big enlightening moment, which was that I fainted when I first, like, saw that much blood up close. And I realized, like, hey. This isn't gonna be the
Speaker 2:thing for me. Yep. Wow.
Speaker 3:I ended up working in strategy consulting. I know you guys have been talking a lot about Intel and semiconductors today. Those were, like, some of my early clients there. We're doing a lot of due diligence for private equity firms and the like. And
Speaker 2:Were you pounding the table saying go pure play foundry in
Speaker 6:2013?
Speaker 3:Not not quite
Speaker 2:Ben Thompson just wrote about it. We gotta implement this.
Speaker 13:Yeah. Exactly.
Speaker 1:If you had the same clout back then.
Speaker 2:So Well, fortunately, you're
Speaker 3:the same. After the consulting thing, you know, wanted to get more on the, the right side of the table in terms of allocating capital. So I worked in, in venture at a a fund called Graycroft. Oh, yeah. We're actually based down in the Arts District, John, down
Speaker 1:I've to the office. Yeah.
Speaker 3:So, yeah, we were early movers there to the East Side Of LA. But
Speaker 15:That's good.
Speaker 8:Yeah. And then
Speaker 3:I jumped on Coinbase in, 02/2018.
Speaker 1:So
Speaker 2:Yeah. So take me through the recent, the recent history of your work at Coinbase, what you're focused on, what, what is moving the needle for Coinbase in kind of this, this next phase. It's obviously a very scaled company, but it's one of the it has to be one of the largest founder mode financial institutions now. And I'm starting to stop thinking I'm thinking about it less as like, yeah, it's the place where you buy Bitcoin. And more just like, it is a financial institution that does a lot of things and potentially will do kinda everything in the financial world over the next decade.
Speaker 1:And that's And been acquisitive.
Speaker 2:Yes. So yeah. Yeah. Give give us a give us a whirlwind tour.
Speaker 3:Yeah. Totally. I think two primary dimensions. So historically, like you mentioned, I think Coinbase has primarily been known as this place where we make it really easy and secure for people to buy and sell crypto assets. Right?
Speaker 3:And people know us for the first party applications, the Coinbase Blue app, which has been great. But we're broadening that out now to support a wide range of different assets. And I think fundamentally, it's driven by we think that all assets are going to get tokenized and be on chain in some capacity. It just provides better infrastructure for financial transactions. And so we announced pretty recently that, you know, for the first time, Quimus is going be building what we call the everything exchange and supporting things like equities, prediction markets.
Speaker 3:We opened up through the Coinbase app now that you can trade assets directly on DEXs. So in general, what we see is basically the blurring of these lines between what was off chain and on chain. And we want to make a very simple and seamless user experience for people to access the all of these assets that are going to be on chain. So that's yeah.
Speaker 1:Go ahead.
Speaker 2:Yeah. Yeah. I mean, in in in general, super onboard. I feel like liquidity just lowers cost of capital, allows businesses to do more impressive things. It's it's good.
Speaker 2:Obviously, there are areas where I I'm particularly thinking of, like, stocks on chain. There's situations where, like, I don't know that I'd want someone to be trading shares in my company all the time. So how are you thinking about that market evolving? Obviously, there's a huge benefit to getting access to capital without some of the over like, the the the cumbersome nature of the, like, reporting constraints of going public and all the all the different issues with floats and IPOs. But how are you thinking about the the the path to bringing more assets on chain?
Speaker 2:What's the most logical? And then what's further out on, the the long long time horizon?
Speaker 3:Yeah. I think it starts with the regulatory front, and that's where we see, like, the biggest uphill battle. So, you know, right now, it's sort of, like, in vogue to talk about tokenized stocks and this theme of tokenization. And tokenization isn't really anything new. You know?
Speaker 3:When we cofounded USDC in 02/2018, that was it's a tokenized dollar. Right? Like, it is a dollar on a blockchain. And at that time, people were sort of like, what is this thing good for? Yep.
Speaker 3:But now they realize, like, hey. You have all these benefits that are just come with the asset when it's on chain. So you get programmability, interoperability, global access, all those types of things. So public stocks, that's this is, like, the the new thing that people are really excited about, and we're really excited about it too. Actually, in 2021, I was helping take the company public, through our our direct listing, and we actually explored, issuing a tokenized version of coin Coinbase simultaneous with the, exchange listed version of coin.
Speaker 3:And, you know, that was always the dream where you could basically have a user that holds the asset on chain, and if they wanted, they could redeem and hold the asset on NASDAQ or go vice versa depending on their preference.
Speaker 2:Mhmm.
Speaker 3:And we just ran into a number of different regulatory blockers in 2021 where we realized that wasn't possible. And so I think the regime change in 2025 makes it much more collaborative. There's a very healthy bidirectional conversation that's ongoing around, you know, what are the rules and requirements for an asset that's traded on chain? Do you need to be does it need to live in in the environment of a broker dealer and a national securities exchange, or does it not? So we're really excited about the regulatory environment progressing with the benefits of the technology.
Speaker 2:Is there a great argument right now that you've heard for how, like, your average American benefits from stablecoins? Because I I I've I've literally paid people internationally in stablecoins. It is amazing. And if they don't have access to dollars otherwise, like in a high inflation country, I totally get that. But is there a way to contextualize it for somebody who isn't doing any international business and is an American?
Speaker 2:Like, what are the benefits besides, like, programmability abstractly?
Speaker 3:Yeah. I would say right now, most of the benefits are really cross border oriented. But like, you know, the one that I think will resonate with a lot of people who are Americans even is, you know, if you're hiring freelancers or contractors around the world, like, how do you get them money?
Speaker 2:Yeah.
Speaker 3:These are people that you might need for, like a one time job or for like just a few weeks. It's a lot easier to do that. And you know, we have a partnership with Stripe where Stripe is enabling stablecoin payments through USDC on base. And one of Stripe's key customers is remote.com, and they start to see that this is just a naturally native, better way for small startups and founders in The US to pay freelancers regardless of where they are in the world.
Speaker 2:Do you think that, like, the freelancer, are they more just excited about getting dollars? Or do they actually care a lot about, like, the yield that comes from treasuries and all of that? Because it feels like they're they're they're both important, but I have trouble waiting them. Like, what what do people
Speaker 1:think about? Benefit is just getting the money immediately versus having to Yeah. Wait days Yeah. Potentially ten days. Yeah.
Speaker 1:Yeah. Just get your money even after the client has hit pay. Yeah.
Speaker 3:Yeah. I think the thing that has become clear is there is just insatiable demand for US dollars around the world. Yep. Like, everybody wants US dollars Yep. But it's really difficult to access US dollars.
Speaker 3:To so, John, I think to your first question, the the pain point is really I want dollars or a safe, stable currency. And then, Jordy, to your point, it's like, want it as quickly as possible in a in a form factor that I know and I trust. And, you know, we started to see this kind of organically a couple of years ago where a lot of people in Argentina and a lot of other countries were just, like, natively finding their way into dollar stablecoins. And in those countries, you know, we we spoke with a lot of customers, and it's it's normal. Right?
Speaker 3:Like, you look for different stores of value, whether that's, you know, buying real estate in The US or gold or Bitcoin, and stablecoins are just a a natural and, more relatable form of store value for a lot of these people.
Speaker 1:Yeah. Can you talk about the significance of the Derabit acquisition that you guys just completed?
Speaker 3:Yeah. We're really excited about it. We just closed it. For, context, Derabit is the world's largest crypto options exchange, specifically. They've had about 80% market share in crypto options for the last years or so.
Speaker 3:So kinda like up and down through the various crypto cycles. And in in the crypto markets, derivatives are orders of magnitude larger than spot markets. Coinbase kinda grew up and got its foundation and its roots in helping people seamlessly go from fiat currency, primarily US dollars and euro and GBP into crypto. And the derivatives markets have have just sort of, like, ballooned in size. So over the past year or so, we've made a big push into the derivatives markets.
Speaker 3:We have exchanges in The US and internationally that support a handful of products. But Derabit really us, brings us market leadership in this options category that we think is gonna grow tremendously. It's also a differentiated capability that will basically pull together spot options and futures as different trading products together into one exchange platform. And what that does for users is really two things. One is it creates new trading opportunities.
Speaker 3:A lot of people will, like, buy spot and short features, and you can do that now across more more instruments just on one place. And then the second thing is it unlocks more capital efficiency. And then this is really a key one is whenever you put on
Speaker 1:Just give it up for unlocking capital efficiency.
Speaker 2:Love to see it.
Speaker 1:Doesn't get better than that.
Speaker 3:Whenever as you guys know, it's like, how do I get the most bang for my buck quite literally. Right? So if you can trade across all those different assets, you hold $1 or one crypto asset with Coinbase, then you basically can get margin and cross margin across all these different products with that $1. So it's it's just a better trading experience overall for, for people who move in size.
Speaker 1:Very cool. Well, you. People Let's move in hear
Speaker 2:Play the eagle sound.
Speaker 1:There we go.
Speaker 2:I love it.
Speaker 1:Thank you for coming on.
Speaker 2:You for hopping on.
Speaker 1:You're always always welcome. Yeah. Anytime. We'll talk to you soon. And congrats on the title.
Speaker 1:Well deserved.
Speaker 2:Thank you. Well deserved. Cheers.
Speaker 1:Up next We need to we need to Yeah. We need to make somebody the chief business officer here. Yeah. It's up to It's simply too good.
Speaker 2:Tyler, are you gonna take it? You're take it? You're the chief I'll take it.
Speaker 1:Chief intern officer, the CIO.
Speaker 2:The CIO. But, you know, any day now you could get promoted. Anyway, in the restream waiting room, have Brian Pellegrino from Layer Zero. Oh, sorry.
Speaker 1:No. We have
Speaker 2:Sorry. We have a switch. We are We have Ryland from
Speaker 1:From Reframe. Right? There we go.
Speaker 2:Sorry. Having difficulties over here.
Speaker 1:Welcome to the show.
Speaker 2:Good to meet you.
Speaker 4:Great to be here. I'm glad you guys have Ryland on too.
Speaker 2:We do.
Speaker 1:He's an
Speaker 4:old colleague of mine.
Speaker 2:Oh, no way. That's amazing.
Speaker 1:From what era?
Speaker 4:We were both at Kiva and Amazon Robotics maybe
Speaker 2:That's ten years very cool.
Speaker 1:Awesome.
Speaker 2:I had a friend who just, got a tour of an Amazon facility. They said, like on-site, just on this one facility, they had like 10,000 robots or something and they built the whole facility like six months ago. They said there are already two versions out of date from like what the next stage of Amazon's build out is. It says it was like the most impressive tours ever done. Anyway That's great.
Speaker 2:We're not here
Speaker 1:to talk about Amazon. We're here to talk about you. Talk about you.
Speaker 2:Us off with an introduction on yourself and what you do.
Speaker 4:Wonderful. Well, yes. Well, it's great to be here. I'm Vikas Nt, CEO and cofounder for Reframe Systems. We're on a mission to build climate resilient homes for everyone, and, we're doing this by applying some cutting edge robotics and algorithms with micro factories, that we can deploy within a hundred days to build, pretty impressive good looking homes, in neighborhoods all around the country.
Speaker 1:It's very incredible. And the news today?
Speaker 2:Give it to us.
Speaker 4:We've raised a $20,000,000 series a. Super pumped. It's not
Speaker 2:as pumped as us.
Speaker 1:Not as pumped as us.
Speaker 5:Congratulations.
Speaker 1:Incredible. It's incredible. When when did you start the company, and and I guess what what was the initial catalyst?
Speaker 4:Yeah. We started about three years ago, with the pitch deck, and, the catalyst was as simple as me becoming a dad. My twin daughters are four years old now.
Speaker 2:Oh, twins?
Speaker 4:But they they yeah. So they were, yep. The catalyst to kinda take a step back and think about, what else I should be doing in my time besides getting boxes to people's doors faster. And I decided I'll get bigger boxes to people's doors that boxes people can live in right now.
Speaker 1:You're committed to making boxes go faster, basically. You find what you love.
Speaker 4:That's that's my
Speaker 1:superpower. Kind of what kind of yeah. Feel I mean, obviously, reframe is trying to provide a solution for one of the biggest problems, I think, facing our our country. Where how how have you thought about kind of narrowing in and focusing go to market? What what markets are important and and what does success look like in the in the early days?
Speaker 4:Yeah. Maybe I can kinda talk from what the big picture is for us. We wanna build a million homes by 2045. That's twice as fast as what how long it took D. R.
Speaker 4:Horton, the largest home builder in The US, to build a million homes. But the places we're gonna be building homes will look vastly different. If you think about where homes are getting built today, they're out in farmlands that have been converted. They're far away from existing communities. Like, that's the only place we have land available for large scale optimized builders.
Speaker 4:We believe that by applying software and robotics, we actually changed that equation. We can actually be just as efficient as them, but in infill neighborhoods. How do we actually build a 100 units not on a single lot, but on a bunch of scattered sites in a neighborhood in Palo Alto or a neighborhood out in Somerville or Cambridge, Massachusetts. And we believe that by leveraging software, we actually get to a wall that we define as mass customization. How do you convert existing building designs to have it be compliant with any site, but make the marginal cost of this change go down to zero because software's in the loop, robotics is in the loop.
Speaker 4:And whoever can achieve that end state can get the same efficiencies of a production builder on scattered sites, and we believe that's our our our path for actually getting and creating the type of housing that people actually wanna live in, in neighborhoods people wanna live in. Ideally, at price points, they're also significantly better than what's out there today. So we're currently focused on markets that are building homes for over $400 a square foot. So they are markets on the coast, so New England. So we're currently based in Massachusetts.
Speaker 4:They'll be as part of the series, they will also be launching capacity out in Southern California to help with the LA Wildfire rebuild. So LA is also a target market. And then we have markets out Salt Lake City, Utah, and then Denver adjacent, and then Seattle and Washington DC adjacent would be other markets in the future.
Speaker 1:How does is what what is the process to start working with somebody that ultimately wants to buy a home? Are you working with developers that are developing entire neighborhoods? Or can somebody just go to your website and say, I want one house, please?
Speaker 4:Yes. So today, we're very focused on working with developers. So it's still a b to b sales motion for us. We believe that the best customer is a repeat customer, and this is what we're trying to build a pretty long term multi year pipeline. We have sold to individual customers, but the experience for them doesn't resemble that of a custom home builder.
Speaker 4:Like, you're still building off of our product portfolio. We will customize our product to meet the site. We're not gonna design a ground up custom building, and that's if customers are fine with that. And that's the experiment we're testing out with LA because now we're working with homeowners who've had their previous homes burned down, and we're trying to help them rebuild. And we're able to make good progress with customers who realize they're gonna get a better product significantly faster working with us, but they'll have to make some trade offs in what the product is and what their expectations are, and that's been our education process.
Speaker 4:Mhmm. And we've actually been surprised that people actually just want limited set of choices. If you can give them choices on things like cabinet colors, a few different arrangements of windows, etcetera, they're actually pretty happy with the process versus saying, right, you can only get one color if as long as or any color as long as it's black. Right? I think that Interesting.
Speaker 4:That doesn't that doesn't work out here. Yep. Doesn't fly in a house, and the the whole aspect of mass production doesn't work for construction either, which is why we've had to embrace, customization.
Speaker 2:Yeah. That makes sense. What, what it do any of these stick out as factors for your business? Self driving cars potentially making it easier to people live in farther away suburbs or just the the adoption of technology in cities. You can live in a smaller house because you can put on a VR headset and you don't need a home theater anymore.
Speaker 2:Or you can, you know, go to a local gym instead of needing a home gym or a library because you don't need a home library. Or even like the ADU thing in California, the idea of building more smaller houses on on existing plots of land. Are any of those factors that you think about?
Speaker 4:Yeah. So the ADU factor has been great, where I think it's actually spurring the whole bunch of upzoning. You can actually add more units into existing properties.
Speaker 1:Mhmm.
Speaker 4:It changes the calculus when for developers trying to develop new properties. They get to add additional density. Mhmm. And we're also seeing this trend where people are actually okay living in smaller spaces, which also results in us being able to build homes that are, right, more space efficient.
Speaker 2:Yeah.
Speaker 4:But the place that we're also keying off of and where I think that from the practical standpoint of self driving cars, solving the logistics challenge, well, that is true. We're also noticing a generational shift taking place. If you actually look at buyer sentiment for right. Zoomers are coming into the market, eventually, what we expect Gen Alpha would also envision. There is a loneliness pandemic.
Speaker 4:They're looking to build more connection and community. And I think their desires are actually vastly different than what was true for the boomers all the way through the millennials and gen buyers. So I actually think we'll see a migration of people coming back into cities or or pockets of communities that are more denser and more connected than what they were for how development took place for the last twenty or thirty years. And the only way to be successful in that space is how do you actually embrace scattered site development, infill development.
Speaker 2:Sure.
Speaker 4:And not build a 300 unit apartment building. People only live there because that's the only choice. Yeah. People don't live there because they wanna live Mhmm. With 300 other people who are complete strangers.
Speaker 4:Right? I think so this is a place where we get to refactor what housing of the future looks like. It's not just the form, but just the connection of how it's connected to neighborhoods. Yeah. But the only way to unlock that is, again
Speaker 2:You said
Speaker 4:ground up new technology.
Speaker 2:You said a million homes by 2045. When do you want the first home to be built?
Speaker 4:Well, we've already built our first home. It's occupied today. So we built our first home about '18. Thank you. Fantastic.
Speaker 4:I need to get I need to one of those buttons here. Yeah. We've built our
Speaker 1:We'll license you the the Airhorn every time you guys have completed a new home. But, congratulations Congratulations. On the progress. It's it's tremendous.
Speaker 2:We'll talk to you soon. Have a good day. Cheers.
Speaker 4:Take care. Take care.
Speaker 2:And our next guest is in the Restream waiting room. We will bring them in to the studio.
Speaker 1:I believe we have Brian from Layer Zero.
Speaker 2:Welcome to the stream. Play that soundboard, Jordan.
Speaker 1:Here we go. Look at this. Look at this background. There we go. How you doing?
Speaker 1:Hot.
Speaker 15:How you guys doing?
Speaker 2:I'm good. You got
Speaker 1:some news for us? Waiting.
Speaker 2:What you got?
Speaker 15:Yeah. I like, I got lots of news. What do we what do we wanna go through?
Speaker 2:Kick us off. What's the biggest news in your world?
Speaker 15:Biggest news in our world is we just wrapped up the largest Dow acquisition in history, about a $120,000,000. Yeah.
Speaker 4:Congrats.
Speaker 1:Crazy. Okay. Break break that break that down for the audit. What does that actually mean in practice? And and kind of what why why did it make sense for for LayerZero and, yeah, basically to combine these two businesses?
Speaker 15:Yeah. So, I mean, there's a little bit of context here that's originally, we built LayerZero. We actually built Stargate as well and spun it out and sort of was running as this independent entity and we now have, like, refolded it back in with this acquisition. Right? So so it's coming back home.
Speaker 15:There's been kinda meme that the bridge is coming home finally. So That's good. For us, LayerZero already today, you know, 86% of all dollars that move across chains happens through LayerZero. Largest stablecoin in the world is built on us, largest wrapped Bitcoin asset, largest synthetic yield bearing asset, like first state issued dollar with Wyoming. All all of this is already there, so we're doing that side of things.
Speaker 15:You have on the background of of Larry Fink saying, listen. Every every stock, every bond, every asset is gonna be tokenized. So, like, we're already sitting there. Stargate is the consumer touch point. Right?
Speaker 15:Stargate is where the end user facilitates, where we've sat in the background. And so for us, this was just purely a verticalization of the entire stack. It's roll up the whole thing, have a single touch point, single offering to both developers, merchants, and end consumer and have it in one single place.
Speaker 1:That's awesome. So so breakdown, like, what did the what did the what did the entity that was Stargate prior to this acquisition actually this was The Dow? Dow was thrown around. I think our audience some some people in our audience are are more crypto native, but but many others aren't. And so they may have heard about Dow's back in 2021, 2022, but but are less Yep.
Speaker 15:DAO is sort of fascinating idiosyncrasy within crypto itself. Right? So DAO is decentralized autonomous organization. We built this protocol. We launched it, and then we basically said, hey.
Speaker 15:Governance is going to be left up to all the people who hold the token. Right? So there's a bunch of people who hold the token. They have the ability to stake and and actively vote on all kinds of things, how things get priced, how the dollars that the protocol owns. So the protocol accrued about $95,000,000 worth of with their assets itself internally, like all kinds of things within it.
Speaker 15:And it was just running. And naturally, as you can imagine, something that gets run by, you know, 50,000 people as opposed to a small group of very agile, fast moving entrepreneurs runs very differently. Right? And so what's meant is a a lot of things are slower than you would like them to. Innovation is sort of like slow in that side.
Speaker 15:So, I mean, it was very dominant from a bridge perspective. That's what Stargate does, is move assets around. It's done about $80,000,000,000 of assets transferred, so about the largest bridge in the space. But purely on innovation side and to keep moving forward, much slower than kind of you would hope. And so the offer from the layers are side was listen.
Speaker 15:We're gonna basically buy out these SDG, this governance tokens, SDG. We're gonna pay a premium on top of what exists. So we're gonna pay an offer above kind of what's there and the Dow gets to vote on whether or not to basically accept this or not. And so we paid again close to about a $120,000,000 at at at current market price. And so what happens is they get rid of their old token.
Speaker 15:They swap it for this new one. They now have, you know, this $120,000,000, so they're made whole. They're invested in in the future direction of the new thing. Now universally, stack, those assets, everything drives in a single direction. So what was Stargate, what it was accruing value internally, revenue streams internally, now all drive directly to LayerZero.
Speaker 2:How does it Is that the
Speaker 1:largest acquisition, like, take private in in in crypto history?
Speaker 15:Yeah. Largest largest Dow acquisition ever in history. Really, like, really not. Definitely not common. Think might might become more common, but definitely very unique.
Speaker 2:Yeah. Yeah. Are are there, like, lawyers in the room? Is this all executed on chain? Is this is this
Speaker 15:something Everything on chain through the Dow. So, it's not like, you know, we don't have an agreement that we can sign with the Dow. It's it's really was an offer. An acquisition is sort of how the industry is Sure. Internalizing it because that, like, makes sense.
Speaker 15:What it what it really is is, hey, the Dow is going to vote to sunset their own token
Speaker 1:Sure.
Speaker 15:Take this other asset in place of that and basically migrate the the whole system over. And they're getting a premium for doing that.
Speaker 2:So it looks more like a GitHub PR than, than, like, a traditional, like, filing from a
Speaker 1:Has to be one of the most yeah. It's of the most efficient acquisitions from from the sell side from a from a cost and and legal standpoint.
Speaker 2:Checking on the banker. Make sure they do enough.
Speaker 1:What what what what should we be looking out for in the back half of this year? I mean, four months, I guess, at this point. But in in terms of assets coming coming on chain and tokenization broadly.
Speaker 15:Yep. Yeah. I mean, like, right now, what we've become most well known for and where we sit is is stablecoins. Almost every you know, the large majority of stablecoins are built on top of this.
Speaker 1:Pay,
Speaker 15:PayPal, USDT, all of this stuff built moves through layers here. Alright? So stablecoins have been a bread and butter. That has been the focus of really what we're trying to do is is the the cleanest and most efficient money technology ever. Right?
Speaker 15:That's really our pitch internally is is the way that value moves. And what you're going to see in the coming months and then accelerating very quickly from there is is, you know, hundreds of of tokenized equities, stocks moving on chain, all of this again moving out of the same rails. So, like, the layer zero, what what makes it so special and what has you know, we're we're talking hundreds of billions of dollars of assets moved is is you can move today, you know, $5,000,000, $50,000,000 for for for, you know, cents or low dollars. Right? Like, incredibly efficient to move extremely large amounts of capital around all of these ecosystems.
Speaker 15:So when you talk Stripe and Coinbase and Robinhood and Circle, all are launching their own networks. Right? And all of these platforms are racing for tokenization, for issuing equities on chain. Again, all of, you know, this this entire sort of Larry Fink 2025 mandate of, like, this is the way that the world is moving. None of those have the ability to talk to each other.
Speaker 15:Right? None of them. There is no way right now that you're gonna settle between Coinbase and Robinhood or that you're going to, be able to move these assets anywhere. So that is where we sit. All of this flow that, again, has been historical stable coin flows, these hundreds of billions of dollars of stable coin flows.
Speaker 15:Now you're talking every asset that exists. And so very we're very directionally focused on that.
Speaker 2:Fantastic. Incredible. Seemed you're set up for success.
Speaker 1:Congratulations. Come back on again soon.
Speaker 2:There's Yeah. This gonna be
Speaker 1:a lot more here and we should have longer conversation. And Yeah. Congratulations on on the take private, the acquisition, whatever we wanna Very call cool. Cool to
Speaker 2:be We'll talk to you soon. Have a
Speaker 1:good day.
Speaker 15:I'd love to. Thank you guys so much.
Speaker 1:Thanks for coming on.
Speaker 2:Our next guest is in the Restream waiting room. Let's bring them into the studio. I think we gotta get the gong ready again.
Speaker 1:Rylan, what's happening?
Speaker 2:How are doing?
Speaker 1:Great to see you. Hey, guys.
Speaker 9:Good to see you guys.
Speaker 2:Sorry to keep you waiting. Give us the news. Welcome back to the show.
Speaker 9:Thank you. It was doesn't seem that long ago that I was on the show, but we raised our series a today led by Google Ventures and Davey Nikkelo. Wow. $50,000,000.
Speaker 1:50. Boom. GV's been busy today. Busy today. Busy day.
Speaker 1:They haven't they're not taking they're not taking August Yeah.
Speaker 2:Yeah. That's true.
Speaker 1:That's fantastic. Yeah. Give it give us the update since since the last time you're on. It must have been probably two two three months. I'm also interested.
Speaker 1:I I think I'm I'm an investor in this round. Right?
Speaker 9:You are.
Speaker 2:Yeah. Yeah.
Speaker 1:I didn't I didn't know. You guys have been moving you guys have been moving very quickly. Know, you never but but yeah, what what's the update?
Speaker 9:So we announced our sort of seed round, came out of stealth in the spring. That round was just to get the company going, get the team together, and start developing some of the key tech for what we're building and we're building and designing autonomous ships for the navy. Mhmm. And now with the series a, we're actually able as one of our investors said, we've left the reservation. We actually build a full prototype ship which will launch next year for the navy.
Speaker 9:So when I say full prototype ship, talking like half a football field in length. So we're you know, there's a lot of unmanned service vessels Navy is working with today. Some are smaller in form factor, they're great for choke points. Yep. But we're building ships that are meant for like the open ocean that can operate all the way across the Pacific.
Speaker 2:And they can fit like basically a full shipping container on board, if not multiple. And then so you could put
Speaker 1:half a football field, that is what the ultimate size will be but you're
Speaker 9:It's the Goldilocks. So like Sure. We wanna carry payloads that matter for the Navy.
Speaker 16:So if
Speaker 9:you think about the payloads that today's guided missiles destroyers carry, you can actually disaggregate them and take one or two of those payloads whether the radars or the equipment look to hunt for submarines or even missile launchers and put them on these smaller size ships.
Speaker 2:Yep.
Speaker 9:So they're big enough that you can operate across the ocean. You can carry the payloads that matter. We have the range and endurance for the Pacific, but we're not so big that we cost an arm and a
Speaker 16:leg. Yep.
Speaker 9:And so we're making ships that are tradable. They're reusable, so you can send them out and they come back. Mhmm. But if you lose them, it's okay, and it's relatively inexpensive compared to, like, a $2,000,000,000 destroyer.
Speaker 2:Yeah. We talked to Dan Driscoll at about the army modernization project. What's going on with the navy? What does it look like to sell into the navy now as opposed to maybe five, ten years ago?
Speaker 9:I would even talk about a year ago. Mhmm. So a year ago when we started this company, we had a thesis around building a sort of bully likes type ship, sort of a medium then Navy would call it the medium unmanned surface vessel. Mhmm. But it wasn't on the shipbuilding plan.
Speaker 9:There wasn't a ton of money around it. But we thought there was a a need. And so we started the company with just a, you know, a small check for to start the company. But what's happened is there's actually $2,000,000,000 now for this program. And so there's a ton of investment.
Speaker 9:There's a ton of activity and a ton of, attention, around the space. And so right now, it's us and a couple other companies that are with our own dollars building what we think the Navy needs. And there's just an AOI that went out. We submitted for it. So we're super excited to see all the progress in the space.
Speaker 2:How does the Jones Act fit into your business model? Does it affect you? I've heard I've talked to some folks who've said that it's making it difficult for them to source certain pieces if they're building in Europe or something. Obviously, Europe has a long lineage of shipbuilding. But how does the Jones Act fit into your strategy or benefit you?
Speaker 2:Or or is it red tape?
Speaker 9:That's a good question. I don't know who gave that one to you, but that's a little bit spicy. So in a good way, because of the Jones Act, we have mid tier shipyards either on the West Coast, the East Coast, or the Gulf Coast that actually can build our ships. So we don't need to start from scratch.
Speaker 1:K.
Speaker 9:We don't need to go find a 100 acres of greenfield and try to go build a shipyard which will take years to go launch. We'll announce later this year a partnership with the shipyard Mhmm. So we can actually build and launch our ship next year. And if it weren't for the Jones Act, I'm not sure if that industrial base would be around today. But I think in some ways, we're not as competitive as other countries in shipbuilding.
Speaker 9:Mhmm. And so because of that, we've had to go source some of our long meat items from other countries Mhmm. That have a sort of a deeper base around sort of shipbuilding. But we think we can bring shipbuilding back to The US and I think it's not by necessarily trying to compete in directly with countries like China or Japan or South Korea, but it's about out innovating them and sort of taking a lead on the tech side. And so we believe in, you know, maritime autonomy not only for the Navy, but also for the commercial sector.
Speaker 9:We think there are a ton of different use cases that are out there. We're already getting comfortable, and you've seen in LA, like hopping in a Waymo, has zero drivers in the front and just taking that, and sometimes it's a preferred kind of method versus having sort of a manned vehicle that's out there. We can apply that same technology for the maritime industry and we're super excited to do that.
Speaker 1:That's very exciting. Incredible. Very exciting.
Speaker 2:Thanks so much for taking the time to hop on.
Speaker 1:Congrats to to the whole team. And yeah. We'll at some point, I I assume we'll do a podcast at sea Oh. Can't wait for that. On on one of your one of your ships.
Speaker 9:Well, the next time I'll the next time I'm on, I don't want it to be a funding announcement. Like do a interview from like a shipyard and show you all
Speaker 4:the cool stuff
Speaker 2:we're doing. That's what we're your phone. It's a Zoom link so we can Anywhere.
Speaker 9:Exactly. If you wanna see welding and steel and all that cool
Speaker 1:stuff. Wanna see Sparks flying.
Speaker 2:That'd be great. Sparks Have a good day. Cheers. Thanks, Up next, we have Logan Kilpatrick from Google coming in. I think I have it right this time.
Speaker 2:I got a little mixed up on my calendar.
Speaker 1:We're caught up this week. Logan, great
Speaker 2:to see you. Congratulations. Give us the news. What's the launch? Is there a number we can associate this so we can ring the Gong for
Speaker 1:Looking for any reason to hit the Gong.
Speaker 2:Number of parameters, number of cost per token, or cost per image or something.
Speaker 16:0.39 0.039¢ per invoice.
Speaker 1:There we go. Congratulations. There we go.
Speaker 2:Step back. Yes. It contextualize it for us. Give give us the actual news, the actual update.
Speaker 16:Yeah. Super exciting day. So we launched I think folks have probably seen online this whole nano banana thread. We should've gotten y'all in banana suits or something
Speaker 2:for this.
Speaker 16:Yeah. We launched this new model, state of the art image generation editing model. I think what people are losing their losing their mind over is is just this character consistency of, like, how well you can do all of these, like, prompt based edits and, like, transform whatever people have. I've seen all these great examples online already of of what people are doing. So it's awesome to see, and it's a model that's available for free for everyone to go and play with and try Gemini app, AI Studio.
Speaker 16:You can vibe code some cool stuff with it. I was working on a TPN announcement card generator earlier. Oh, that's amazing. We need that. It's I'm like, I'm putting your media team out
Speaker 1:of work.
Speaker 2:No. No.
Speaker 1:No. I mean, the biggest thing there is speed. I mean, it's just about the the ideas matter
Speaker 2:more and more timings. Yeah. Yeah. Yeah. I I love that.
Speaker 2:What's the story on the on the research side that unlocked this? Is this, new algorithm? Is it just more scale, bigger data center, bigger training run? Is it some sort of unique advantage to Google on the data side? Like, what what went into achieving this?
Speaker 2:Because I think people are tracking this stuff very closely these days.
Speaker 16:Yeah. Yeah. That's a great question. I think there's three things quickly that I'll mention. I think one of them is there is this interplay between image understanding capabilities and image generation capabilities.
Speaker 16:And it's actually was just talking to the VO team two weeks ago as well, and it's a similar story on video as well, which is, like, if you have state of the art video understanding, it tends to be that that actually really helps you when you wanna generate really great videos. Yeah. And there's a bunch of dimensions of of why that's the case. But so I think that's part of it, which is from the ground up, Gemini was built to be multimodal. So it's been, like, the core focus from a from a modeling perspective for a long time.
Speaker 16:So I think we we've see that now in the generation capabilities. I think another one is, like, this this iteration flywheel that we had. So we initially launched this was actually before, OpenAI launched the GBT image model. We shipped the first, like, native LLM image generation model, and got a ton of feedback of things that, like, didn't work, and people were, you know, you know, wanted it to be better along a bunch of dimensions. And I think this this launch was a combination of, like, looking at and, like, spending a ton of time with folks in the ecosystem.
Speaker 16:We've been giving us all the feedback of, like, what would they actually want this model to do in order to build a bunch of, like, real production use cases and use it to to support whatever their work is. So I think that's another angle of this. I think the last one is just this, like, continued model train that we have, which is, the there's all of this, like, infrastructure that's being built in order to make it so that Google can ship models and bring them to the world and have them scale up on day one like we are right now and all this other stuff. So I think the the, like, new capabilities of of image generation, I think, benefits from, like, this huge amount of momentum and and inertia that's happening inside of Google to, like, get this stuff out the door. So I think it, like, it helps, and we see this on, like, every other model benefits by, like, how much momentum there is on the core model progress standpoint.
Speaker 2:I've, I have two follow-up questions. One is, are you thinking about some sort of Pareto frontier? Do we need a benchmark for image generation that then we can comp to put on a beautiful x and y axis so we can go viral here, with cost to quality trade offs? Because I haven't I haven't really seen that pop up. We're still in the age of just, like, there's, like, the state of the art's great, and then everything else I wouldn't wanna use.
Speaker 2:And and so people aren't really making those trade offs. But you can imagine that as people start to implement this into business processes, if I'm just like, oh, yeah. I'm just generating like an icon and, you know, like a previous generation model can basically one shot it because I'm not trying to do anything crazy. I wanna be very cost conscious versus this super frontier. I'm gonna be using this as, you know, a poster in VFX in a Hollywood movie.
Speaker 2:It's gotta be the best. And whatever the cost is, let's do that. Are are you starting to think about a front Pareto frontier kind of emerging in in image generation?
Speaker 16:Yeah. I mean, we should collaborate on this because I feel like y'all will do a great job on it.
Speaker 2:So that's that's maybe
Speaker 16:an action item. But I I think one of the cool takeaways for me on this launch is, actually, the, like, cost per image didn't change between two point o and 2.5. So if you see the I think we released a graph of, like, the level of progress from two point o to 2.5. It was literally, like, almost, like, doubled in quality across certain dimensions. Yep.
Speaker 16:It's the same zero point. It's like the pricing is annoying. It's like 4¢ Well,
Speaker 2:we're gonna switch to, like, cost per million images at some point because just like cost per million tokens. Like, we if we tried to say cost per token, we'd be in, like, zero point zero zero zero zero zero zero.
Speaker 16:4¢ per image. 4¢ per image or $40 for a thousand images. That makes it that makes
Speaker 2:There we go. Now and then now we're talking. Yeah. $40 per
Speaker 1:To do. Yeah.
Speaker 16:I think it's just crazy, though. There's there's so much that you could build that, like, you wouldn't have thought about building before at that price point. Like, $40 is, like, not for a thousand images customized for whatever you want. It's, like, actually not that crazy. Totally.
Speaker 16:Totally.
Speaker 1:Yeah. How what was the reaction been from some of your guys' partners on the on the API side in terms of this I mean, I'm assuming they got early access and exposure to it because I see a lot of them are already rolling it out to millions of of users.
Speaker 16:Yeah. I think a great example of this and something that I'm super happy about is OpenRouter, which I'm sure you all have covered some of this stuff. They have a bunch of, like, actually cool leaderboards that show, like, their leaderboards are all usage based. So it's like
Speaker 2:a Alex on the show, the the CEO. Alex
Speaker 16:Alex is awesome. He's Nice. He's he's an incredible founder and entrepreneur.
Speaker 1:He joined the day that he raised, like, a $100,000,000 and didn't mention it at all. Like, we were
Speaker 16:He's a
Speaker 2:super low key dude too. It's crazy. He's real
Speaker 1:low dude.
Speaker 16:Yeah. He's awesome. But so we are the first image model that OpenRouter has actually ever released, and I think there's, like, a bunch of philosophical reasons why from a platform perspective. But I also think it speaks to, like, the level of quality and the progress that's been made on these models that OpenRouter wanted to, like, actually take the first step in and have, like, a model that they felt is, like, conversational enough for their customers to just, like, embed it into a bunch of their existing workflows. So I think the reception has been super positive, and you we need to get, like, a live pipe coating segment and show some of the cool stuff that you all can do.
Speaker 16:Yeah. There's there's literally so much. It's incredible to see what people are building already.
Speaker 2:I wanna talk about naming, version numbers and all of this. It's good for releases. It's good for, showing that there's some sort of binary change that you should pay attention to and actually see the jump in capabilities. At the same time, eventually, this stuff just diffuses into everyday workflows. And Google has a bunch of products that don't really have version numbers.
Speaker 2:BigQuery just gets better. Google Sheets, I mean, might be some version numbers under the hood that I'm not aware of. But like for most people, they just open it up and, oh, there's a new feature today or maybe there's release notes. Yeah. Are we close to entering that era?
Speaker 2:Are you are you gonna miss the era of constant name changes?
Speaker 1:Because the timeline? Are there are
Speaker 2:benefits and there are costs. Like, there are high expectations when there's a new big number, but it also draws a lot of attention. It's a reason to talk because something happened as opposed to just, you know, BigQuery is growing and it's better and it's good and it just keeps getting better. It's less exciting. So, how are you thinking about that in terms of, like, messaging, all of, Google's products here?
Speaker 16:Yeah. I I think this is a super fine line to walk. I I hear like, I talked to lots of customers who have this feedback, which is, like, it's there there's so much, exhaustion with the pace of releases, and they're keeping up with, you know, something point one version update. And it's just like all this stuff to keep in your head is really annoying.
Speaker 1:Stop making technological progress. Like, we've had we've had enough, please.
Speaker 2:I don't think that's not what people this is the challenge.
Speaker 16:Not what I don't think that's actually what people want. They just don't wanna have to, like, stay on top of it. Yeah. So I I do think there's a point at which, like, this stops being the thing that everyone is talking about. And there is this, like, what's the, like there's a bunch of good sayings that I'm sure you both know better than me, which is around, like, the arc of technology and how it, like, transitions from actually being technology to just being, like, something that is a part of a product.
Speaker 16:Like a car, we don't look at as this, like, science thing anymore. It's just this, like, object that we use to get around. Yeah. And I think AI will sort of eventually go on that arc where it's just, like, diffused into everything that we're doing, and we don't think about it. And it's it's part of every product experience, and therefore, you don't look into, like, all the nuance details of the small version number.
Speaker 16:But I do love the my takeaway is you need a good mascot. Like, I love the the nano banana thing really took off. And I think if it wasn't something that was, like, easy to attach to that had an emoji that, like, all this other like, there's all this, like, subtle weird marketing lessons that you, I feel like I relearn every time something like this happens.
Speaker 2:That's great. Talk about jailbreaking bug bounties. Is there some benefit to the flywheel of people trying to jailbreak stuff? It actually helps improve the models. There's some there's some post out there.
Speaker 2:Somebody figured out some jailbreak. The chat wants to know. But, I've always thought that the the the nature of social media kind of encourages like, if you can get the models to do something weird or funky or rude, then it goes viral very naturally. And, of course, there's, like, the negative, like, oh, this is bad. But it's actually pretty helpful.
Speaker 2:But how how are you thinking about that side of the world of getting these models out to the world?
Speaker 16:Yeah. One of the things that we're always trying to, like, again, walk the fine line of is all the, like, safety parameters. So I think I I already saw a bunch of folks making comments around, like, what are we overblocking on? What are we underblocking on? There's the the global legislation on a bunch of this stuff is extremely complicated.
Speaker 16:So I have a bunch of empathy for the teams that have to, like, think about this more deeply than I do. But, like Yeah. It is it's actually not easy. There's a lot of open questions. Not easy to deploy people.
Speaker 2:Hard, especially on I was thinking about, like, the trademark infringement side because I was like, well well, I wanna be able to use my own trademarks. Like, I wanna be able to go and generate my own my own deepfakes of myself, but I don't necessarily want everyone else to be able to do that necessarily without doing something. So, like, it's such a we've big
Speaker 1:into that trying to generate images of ourselves.
Speaker 2:Yeah. And it's a, oh, no. You can't do this. And it's like, it's you've kind of arrived, but now you gotta prove to the model, no. I'm John Kugen.
Speaker 1:Yeah. I am.
Speaker 2:I'm John Basically, this
Speaker 16:is a very I think this is, like, a nontrivial problem that, like, will end up getting needed to be solved. Yeah. So I I don't, like, I don't think there's any good experiences to solve this right now, but, you know, to the extreme of this is, like, the future of you you orb scan your iris to, like, IV to the model that, like, you're really John, and then that's
Speaker 2:how this sort of
Speaker 16:you unlock this capability. That's the extreme version. But
Speaker 2:Yeah. Yeah. I mean, the yeah. There's a bunch of ways to to to make sure that the the stuff works. But I mean, also just like like, I feel like Google's been particularly good with releasing like the thinking behind the decision making in both like a blog post and a technical paper like Jeff Dewey covered Jeff Dean talking about the amount of energy and water used by various queries.
Speaker 2:And I just I love that because it was it was written in a way that was accessible to the person that just wanted to see a viral post on X, the everything app, which is kind of like, you know, it's a it's a it's a mud fight on there every day. And then and then you also had the blog post, which was like, you know, a press person could show up there. And there was also the technical paper. So if you're a scientist, you could go in there. And it wasn't phrased as like, you know, this counterweight to like all the pieces that have come out saying it's really bad.
Speaker 2:It was just like, here are the facts in in three different tiers of complexity so you can kind of get the answers at whatever level you want. And I I thought that was well handled. Anyway, Jordy,
Speaker 1:anything else? Absolutely. No. Congratulations on the launch. Always great to see you and have fun out there on the timeline.
Speaker 2:Have fun out there.
Speaker 16:Let's go vibe goat some stuff. I can't believe you think the timeline is a is a mud fight.
Speaker 1:I'm like, you got the people in
Speaker 16:your replies must be horrible. I feel like everyone's very kind in my version
Speaker 2:of kind, but you're always just one one quote tweet away from getting
Speaker 1:From war. From war.
Speaker 2:The timeline's in turmoil a lot. We monitor the situation every day, and we see the timeline in turmoil nonstop. Someone puts out a bad take. There's gonna be a
Speaker 1:pile on. Always. Always.
Speaker 2:But it's good content.
Speaker 15:It's for
Speaker 2:business. It's good for business.
Speaker 1:For sure. Sure. Great to see you, Logan.
Speaker 2:Thanks so much. We'll talk to you soon.
Speaker 1:And And on that note
Speaker 2:You gotta hop on.
Speaker 1:Gotta get on with London.
Speaker 2:With Pyeong Neng. One sec before Oh, we have one more thing from producer Ben.
Speaker 1:We have a special guest here.
Speaker 2:We have a special guest. Who is Okay. Let's bring them in.
Speaker 1:Moments away. Let's bring them in.
Speaker 2:Okay. Who is this?
Speaker 1:Who's this? This is a surprise. What's this? What is this? This you?
Speaker 2:Is a joke or something? This is a prank that Are
Speaker 1:you pranking us?
Speaker 2:I'm I'm I'm genuinely not prepared for whatever's gonna happen. Who's this?
Speaker 1:Oh, wow. Oh,
Speaker 2:wow. No
Speaker 1:way. No way. What is this? Happy 100 k. Wow.
Speaker 2:Oh, thank you. Oh, we have a we have a cake in the studio.
Speaker 1:Come here. No way.
Speaker 2:Oh, that's so cute.
Speaker 1:Model of dom.
Speaker 2:Wow. Amazing.
Speaker 1:You. Thank you. Thank you. Welcome to welcome to the show.
Speaker 2:Thank you. Amazing. Look at this.
Speaker 1:A cake Can you say into the microphone you're watching TBPN?
Speaker 12:You're watching TBPN.
Speaker 1:Amazing. Well, thank you folks. Fun Can show you say see you tomorrow technology brothers?
Speaker 12:Say John and D brother.
Speaker 1:Say see you tomorrow technology brothers.
Speaker 12:See you tomorrow, check.
Speaker 1:We go. Yay. Awesome, folks. We will see you tomorrow.
Speaker 2:We will see you tomorrow.
Speaker 1:Thanks for tuning in.
Speaker 2:Thanks for tuning in. Goodbye.