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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN. Today is Thursday, 09/17/2026. We are live for this week. Also running the temple of technology.
Speaker 2:The fortress of finance.
Speaker 1:The capital of capital. Let me tell you about ramp.com. Time is money saved both. Easy use corporate cards, real pay, accounting, a whole lot more all in one place.
Speaker 2:Dang, son. Where'd you raise this?
Speaker 1:It's a wild one.
Speaker 2:That is wild one. I I don't think we've played that
Speaker 1:one before. Yeah. That's a
Speaker 2:new one. Don't know if that's actually a keeper. It's kind of a little weird.
Speaker 1:Yeah. I think the start of it is funny. Dang, son. We have Joe Weisenthal coming to TBPN UltraDough.
Speaker 2:Finally.
Speaker 1:First time in person. We've done Odd Lots in person with him, but he's coming on down. We're doing a Bain Capital deep dive today talking to partners on the venture side, then David Gross, who's the managing partner, talking about the history of the firm. He was doing special situations in Japan, went to Japan very early on in his career, grew the Asia business, and now is overseeing Bain Capital become this really large asset management firm with a bunch of different strategies. So I think we'll have an interesting economic perspective, outlook.
Speaker 1:The theme of the Bain Capital Ventures announcement is the post AGI economy.
Speaker 2:Finally.
Speaker 1:We still got a job for asset managers. That's what you're thinking. Yep. Now everyone was saying, you know, I'm
Speaker 2:glad to get kind of past this current moment.
Speaker 1:It is.
Speaker 2:A lot of tension. Yeah. And I'm ready for the next chapter.
Speaker 1:It is. But it'll be interesting to hear how they're actually thinking about investing, wrestling with what's going on at the foundation model layer, but then still investing both above and below the fold as I'd like to put it. So Ligure is coming on doing legal AI, basically a rapper company. They're optimistic about that. But then they're also investing in Crusoe.
Speaker 1:We have Chase Lochmiller coming back on the show to talk about building infrastructure for the AI build out. And so they're they're they have this sort of sandwich strategy which is pretty interesting and then we can see from DecaGun on
Speaker 2:the YouTube chat says, can't believe John, Jordy, and I are all back for another conversation. Thank you for being with us.
Speaker 1:Yeah. You know, Theo Theo has been playing along with that meme a lot. And I think I mean, it it it was it was the current thing for a minute there. But he put out a tier list of all the different controversies surrounding him. And he put this he put the the and I as s tier.
Speaker 1:It's like the it's the best controversy he's ever been a part of. It's it's such a funny thing. And I hope it lives on as a meme. I hope people continue to do it because it when applied correctly, it's it's a it's a chef's kiss. Anyway, Snap officially launched Specs yesterday.
Speaker 1:Some of the team members here got to go check it out in person. I get there. I'm like, this is perfect. It's 3PM. Atlas, Creatine Cycle's in town.
Speaker 1:I wanna meet up with him. I'm like, great. You're going to this thing. I have an invite to this thing. I'll see you there.
Speaker 1:We'll catch up there. Super convenient for both of us. I got a thirty minute call beforehand. It ends right before the thing starts. That runs to 50 minutes.
Speaker 1:So I'm twenty minutes late. Get my badge. Walk in. Immediately. Get a phone call.
Speaker 1:Hey, they called me here about to be I had another call. You gotta hop on early. I leave. And then I have another ninety minute call. So I truly missed the entire thing.
Speaker 1:But I did get to go inside. Have one glass of water. Talk to one person, Harper Carroll, former guest of the show. Now out in Austin reporting on AI. And that was electric.
Speaker 1:But then I didn't actually get to see the presentation or do the demos. So it was basically a quick turnaround for me. And I was like, why why did I think I could pull this off? I failed. But did the launch fail?
Speaker 1:We'll see. We'll talk to the folks who actually went. Tyler, Nick. We're not asking for a full review. I just want take us through the day.
Speaker 1:I saw you guys pull up and you guys didn't see me. I was on the street on the call. You guys get waved around. You valet. Walk me through your journey into the the launch.
Speaker 1:Like what you you go in, you have cocktails. What what happened?
Speaker 3:Yeah. Have a have a drink.
Speaker 1:Okay.
Speaker 3:Go in.
Speaker 1:What are they serving? Screaming Eagle? Or you know, seltzer water?
Speaker 3:Some kind of cocktail.
Speaker 1:Do they have the original Four Loka? Did they were they serving the original Four Loka?
Speaker 3:I wish. Yeah. Yeah. Multiple pints of Guinness.
Speaker 1:Do they have natural light
Speaker 2:You could totally see Evan cracking out the cracking open the secret supply of original Four Lokos. You know that guy
Speaker 1:He has a bunkie with the original Four Locos. Yeah. So so everyone's having some drinks and you sit down
Speaker 3:then you go into the the amphitheater.
Speaker 1:And it's sort of like Steve Jobs iPhone launch vibes. Right?
Speaker 3:Yep. You know, he's he's standing in front of this big screen. There's like beautiful images behind him.
Speaker 1:Mhmm.
Speaker 3:Walks out black shirt, jeans.
Speaker 1:Okay.
Speaker 3:Yeah. Then he just starts he starts doing live demos.
Speaker 1:He did lean into the memes. Right? I saw on screen a picture that had clearly been photoshopped or AI to make the specs look even bigger so he was aware that people thought they were chunky, that they were large.
Speaker 4:Yeah. Yeah.
Speaker 1:So he gives his demo. What's his pitch?
Speaker 3:Yeah. So there's like a number of of ways to he kind of talked about it. One is like he basically like position against like being on your phone a lot. You want to stay very present. Mhmm.
Speaker 3:Right? You don't want to be looking down at Yeah. Screens all the time.
Speaker 1:Yeah.
Speaker 3:You want
Speaker 1:to be You want to be looking through the screen.
Speaker 3:Yes.
Speaker 1:Right? Yes. Yeah. Okay.
Speaker 3:Close for your face.
Speaker 1:Yeah. And I've heard that pitched a few times. Do you believe that? Do you think that if you go no phone but constant visual overlay in your visual field, you will actually be like, yeah, I'm I'm more in touch with reality. It worked.
Speaker 2:Yeah. I've never I've never understood that part of the pitch.
Speaker 1:I've actually
Speaker 2:We been know you're addicted to your phone Yeah. And so here's another product Yeah. That will actually always be attached to your face. Yeah. Where they're gonna spin as helping you kind of, yeah, reconnect with reality.
Speaker 1:It's an odd it's an odd pitch. It really doesn't work on me because I I like the barbell strategy of like brain rot and and stimulation where I am actually fine to be like, give me the fully virtual world. I want to be locked in. I want the screen as big as possible. I want to be in World War II.
Speaker 1:I want to be in Modern Warfare for hours playing, running around, shooting. I want it to be all the audio. I don't want to hear anything else. I want noise cancellation. I want to be in that world and then I want to be able to unplug and then just go into the actual world and sit down and have a chat with you and have a coffee and not be checking our phones and actually be fully present when I'm fully present in the real world.
Speaker 1:And then I want to be fully in the virtual world. So like I want the VR, the the fully like, you know, immersive thing and then zero immersion. I am actually not looking for more things that are in the middle. And I'm wondering if people will if that will resonate with people.
Speaker 3:I I think that's mostly because you haven't seen like very good examples. And like right now, the the glasses are still like kind of big and Yeah. The if they're very minimal and like kind of, you know, they would show very small
Speaker 1:They're boys.
Speaker 2:Online were thinking that the guy in the center was Clav. Yeah. It's actually Tyler.
Speaker 1:It's actually Tyler and Nick and Atlas. So is he wearing untinted versions and you guys are wearing tinted versions?
Speaker 2:Yes.
Speaker 1:Or are they or is or can you say like, I want tinting on right now?
Speaker 3:So I I think you can like increase the tinting
Speaker 1:Okay.
Speaker 3:But there's also just
Speaker 1:There's two SKUs?
Speaker 3:I yeah. I believe so.
Speaker 1:Oh, okay. Okay.
Speaker 4:Yep.
Speaker 1:So you gotta get both, I guess. Anyway, when did you actually get to the
Speaker 2:Dan Dan says, John raising a second family in VR. He's trying to keep them separate.
Speaker 1:The the Cod lobby is my second family for sure. So so he gives a pitch.
Speaker 3:Yeah. Does a bunch of live demos.
Speaker 1:And and are the demos consumer focused, enterprise focused, prosumer?
Speaker 2:Yeah. So the live demos
Speaker 3:he did were all very consumer.
Speaker 1:Consumer.
Speaker 3:He showed like live shopping and you could like was gonna look for a espresso machine and he pulls it and like puts it on a table in front Oh, of that's cool. Stuff like that.
Speaker 1:Okay. Any live demo failures? Any WiFi issues?
Speaker 3:There there was kind of one where he tried to pull up a YouTube video
Speaker 1:Okay.
Speaker 3:And then so he said like, hey, Specs
Speaker 1:talking to a voice assistant Yeah.
Speaker 3:He said like, controls it.
Speaker 1:That's cool.
Speaker 3:Pull up a video about Yeah. About Specs Yeah. And then it it opens the the like browser view goes to YouTube and then he like tries to click on a video to open it and it like doesn't really work.
Speaker 1:Uh-oh. Okay.
Speaker 3:But it eventually worked.
Speaker 1:It seemed like it worked.
Speaker 3:Was like a small hiccup. Okay. It wasn't like a
Speaker 1:big Yeah. Yeah. Yeah. It wasn't a demo fail. Yeah.
Speaker 1:Yeah. Makes sense. Okay. So then
Speaker 3:And there was a very cool live demo of someone. There was like a kind of a interactive music creator tool where you could like move around and it would play different sounds. Mhmm. And so she did this very cool live demo.
Speaker 1:So she was creating a song but instead of using traditional instruments like the instruments were puppeteered by her movements
Speaker 3:in the physical world. Got it.
Speaker 1:Okay. So was there any enterprise pitch?
Speaker 3:There was. There were no live demos of that Mhmm. But there were some videos played. Like one was it's like imagine you're an electrician and you're basically looking at this big like server box
Speaker 1:Mhmm.
Speaker 3:And you don't know where to, you know, plug in the wire Mhmm. And it would like highlight which plug you put it into. Yeah. Which I think is like could be interesting.
Speaker 1:Yeah. That feels like something that sounds good, but I have no actual real experience there to like say like, yeah, that's what deal that that's what will solve the bottleneck in electrician.
Speaker 3:Yeah. Yeah. But like, you know, interactive instructions, that's kind of a cool idea. Right? Yeah.
Speaker 3:You're building IKEA furniture or something and it like tells you what to do.
Speaker 1:Yeah. Yeah. Something like that. Yeah. I can see that being Yeah.
Speaker 3:But then keynote ends and then we go outside and there's like a bunch of places to do live demos.
Speaker 1:Mhmm.
Speaker 3:So yeah. The the first one we did is well, you basically put on the glasses and you do some kind of like calibration thing. You like figure out how the the motion works.
Speaker 1:Mhmm.
Speaker 3:There's no like little kind of secondary like I I think on the the Meta Quest displays, there's like that little wristband. There's nothing like
Speaker 1:Nothing like that. It's this hand tracking.
Speaker 3:Yeah. It's just
Speaker 2:kind of
Speaker 3:like it it's similar to like the Apple Vision Pro kind of interactions. Then, yeah, the one I really liked was it was like ping pong.
Speaker 1:Mhmm.
Speaker 3:So you're like your hand is the paddle and you're playing ping pong. I think there's actually a video of it. Yeah.
Speaker 1:Yeah. Yeah. Played So the the ping pong thing, do a little tier list for me of of ways to do ping pong. We'll start with the real ping pong. Where's that?
Speaker 1:F tier, d tier, c tier, b tier, a tier?
Speaker 2:Obviously, s tier.
Speaker 3:I think it's s tier.
Speaker 1:S tier. Okay.
Speaker 3:Well, what am I comparing it to?
Speaker 4:Other versions Full of VR.
Speaker 1:Full VR ping pong. Would you rather play ping pong in VR or real life?
Speaker 3:Well, so like obviously you'd rather play in real life but like would you actually play in real life? So if my friend lives a 100 miles away, I'm not gonna play ping pong but I can play in VR. Right? Okay. So that I think that Okay.
Speaker 3:You know boost it.
Speaker 1:So it's also s tier. I think it What about
Speaker 3:I think it's like
Speaker 1:b tier. Because in the augmented reality Is it do you
Speaker 2:think the
Speaker 1:ping pong table? No. No. Okay. No.
Speaker 1:So it creates was playing pong
Speaker 3:table. Yeah. We can see it but I'm just waving my hand.
Speaker 5:Yeah. Yeah. Yeah.
Speaker 3:Yeah. Alright.
Speaker 1:This is future right here.
Speaker 3:Yeah. And then this was I I I can talk about why but this is probably more like c tier. It's definitely worse than VR. I think one of the one of the reasons is because there's no actual controller. So the Oh, you
Speaker 1:don't have the weight or anything?
Speaker 3:Yeah. It's a little bit
Speaker 1:Oh, that's interesting. Even you don't have a controller. Normally, it's like get rid of the controller, that's just extra weight, batteries, equipment.
Speaker 3:Yeah. I think for gaming, the controller actually works because Yeah. It's precise.
Speaker 1:But typically these these systems allow like third party peripherals so you can like whip up a, you know, you can like wire up an Xbox controller like what Oculus did where they just or Meta Quest where they just use the Xbox controller for those types of games.
Speaker 3:Yeah. I I do think like this was my the the coolest demo I did. Mhmm. And this is something that, like, there's I mean, really, like, no reason why this needs to be in AR. This could just be completely VR.
Speaker 3:Yeah. Because, like, I'm I'm looking at the the ball. I'm not looking at, like, people in front of me. And it was actually distracting because someone would walk in front of me and I think I'm about to hit them.
Speaker 1:Oh, sure. Sure.
Speaker 3:Because I can, like, see them while
Speaker 1:I'm trying to Maybe better to just include the
Speaker 3:Yeah. The world.
Speaker 1:Yeah. Or do some pass through stuff. Yeah. I'm still I'm still oddly bearish on augmented reality and more bullish on virtual reality where you're not recycling photons, where instead you just have cameras on the outside that then we project that on the inside of the headset so that you can get a wider field of view. And then if you're in a bright scene, you can still overlay things.
Speaker 1:You can darken things. But in augmented reality, I don't believe it's physically possible if you look at a bright light to put a dark, you know, object in front of it because you're the the only thing that this that these glasses can do is add light to the scene. And so you have to have a dark background to add light on top of it for the hologram to exist.
Speaker 3:I found it was like bright enough I could clearly see everything.
Speaker 1:That is pretty impressive. Yeah. Was outside. It was a bright day. It's in LA.
Speaker 1:I mean, sure there was like you were standing in shade, but you could still see the holograms, which I think is interesting.
Speaker 3:Yeah. I I didn't try watching any like movies or anything Yeah. Which I think would definitely be better in VR for
Speaker 4:You should
Speaker 1:have been like, you're gonna let me demo this? Can I just do one can I just do one demo real quick, Snap, please?
Speaker 3:Lords of Arabia.
Speaker 1:Lords of Arabia. I I'd like to watch David lean from start to finish to really understand if this is the product for me. See you in three hours.
Speaker 2:To me, it's so interesting how high the bar is Mhmm. This category. Like, when technology industry was making the first like mobile phones. Like Yeah. The bar was like, can it make a call?
Speaker 2:Can you receive a call? Can you do that semi reliably? Yeah. Even if their service spotty.
Speaker 1:Because you were competing against the pay phone.
Speaker 2:Yeah. Had to like every new device competes with the smartphone. Yeah. I just think like the meta ray band displays, I haven't seen any of them out in the real world. Yeah.
Speaker 2:It seems like those are not doing well. I think that I think this whole category is still gonna be quite challenged.
Speaker 1:Yeah. I mean, even just the basic meta ray bands, they compete with a smartphone, but they also compete with AirPods. And like the Apple ecosystem is like remarkably robust in terms of like the meta Ray Bans users that I know that like the product are like, well, like them, but I often just like take phone calls on them. I listen to music on them when I'm going for a walk. And then occasionally, I'll take a picture.
Speaker 1:And it's like, that's saving you five seconds to get a worse quality photo than if you have a nice phone and your headphones. I guess it's a little bit less intrusive to have the the the speakers up here as opposed to, like, in your ears. It looks a little bit normal if you walk up to someone, you pause your you pause your music, you walk in, you order a coffee. People are like, oh, he didn't even take out his headphones while he's talking to me, kinda antisocial, as opposed to like, oh, he he still has his glasses on, but they're not playing audio, so I don't have a weird reaction to it. So there there's a little bit of benefit, but, it's very, very incremental.
Speaker 1:It it it's not it's very rare that these things, like, unlock entirely new capabilities. Is there any is there any content ecosystem that you think that they can plug into? Like, the the the killer the killer app on Apple Vision Pro, in my experience, has been the Apple TV app. Like, it's like they already have a library of every movie and three d movies and IMAX movies. And so there are great movies that you can watch in that thing and and and with the like it's like what was the last Oculus or Meta Quest, you know, partnership.
Speaker 1:It was like the Xbox edition. Why is that important? It's because like they want you to fire it up and install Xbox and be streaming Xbox games. So you get the Xbox library on that device on day one. And and and the fact that you that it's a meta product, yes, you could scroll Instagram reels in there, that's clearly not the killer library that they need to bring to bear.
Speaker 1:They need to bring games, so they've partnered with Xbox for two d games, not VR games even. But it's like at least you could go and play a lot of, you know, Bioshock or whatever is on there. And and is there is there any glimmer of like where the big content pool might come from once you've played enough ping pong?
Speaker 3:Yeah. I I really don't know. Because Yeah. Yeah. Like movies and games are just, I think, always gonna be better on VR.
Speaker 1:Yep.
Speaker 3:And then, like, there's not like an existing library of like AR, you know Yeah. Experiences. Yeah. Because like The only thing I can think of is like actual Snapchat lenses. Right?
Speaker 3:That's like AR library.
Speaker 1:Yes. But like,
Speaker 3:you know, what are gonna do with that? So I I think like
Speaker 1:You're gonna laugh when everyone you meet looks like a hotdog or something. You're like a cat.
Speaker 3:Everyone has dog ears.
Speaker 1:Dog ears. Yeah. The dog filter
Speaker 4:Yeah.
Speaker 1:On everyone. IRL. It's wild. Let me tell you about CrowdStrike. Your business is AI.
Speaker 1:Their business is growing up. CrowdStrike secures AI and stops breaches. So next week we might get a competitor to this. Next week is Meta Connect, I believe. And they're on a track like Reality Labs.
Speaker 1:Obviously, all the energy is around AI. But the team is still working on devices, augmenting reality. They did the Meta Ray Ban displays, is the Call of Duty style, you know, mini map. It doesn't take over the full the full cone of vision. But two years ago, Mark Zuckerberg demoed a product at Meta Connect two years ago, 2024, of the what he called Orion, which was a very complicated name if you know the history of the hunter Orion who tried to kill all the animals and was sacrificed for his tale of hubris.
Speaker 1:Anyway, hopefully this doesn't go like the Orion story Because every every every
Speaker 2:Meta names something, it it has like this like accidental
Speaker 1:I mean, it happened to OpenAI too. The big GPT the the big pre train that was supposed to be like GPT five was called Orion at one point, I think. And so like, never name your product after a hubristic Greek tale. Anyway, the Meta Ray Ban displays launch a lot next year. And it felt like this year is the year that you get the Meta Ray Ban full displays.
Speaker 1:And so that Orion product should be here. It should be a direct competitor to Specs. And it would time up and it would actually make sense that the Snap team sees that, okay, they're going to release this on this day. We got to get out early. We got to be a week before.
Speaker 1:And so I would expect that next week we get a direct competitor to Specs, meaning Meta Ray Ban form factor, probably a little bit thinner, little bit smaller, a little bit lighter. Meta has more resources for this. They've been working on it longer. And it should be augmented reality that can take over the, you know, a fairly wide field of view. I imagine that that's gonna be a big comparison table, not just price.
Speaker 1:It'll probably be expensive. I mean, the meta Ray Ban's couple $100. Meta Ray Ban displays, $800, something like that. And I would expect that the full display
Speaker 2:is 500 like k?
Speaker 1:Probably $1,500 or something, but still cheaper than what Specs is, which is 2,200, something like that. But the real question is is will they launch the Quest four? Yeah. I thought that was Quest five because they have truly stopped shipping VR headsets. Can you give us the history of of the launches of the Meta Quest VR headsets?
Speaker 1:Because the Quest one launched in 2020?
Speaker 3:2019. 2019.
Speaker 2:Okay. Quest two n 2020. To be clear, if you're wearing smart glasses, you could stop the conversation and and just ask the question True. For a response.
Speaker 1:And just read it off.
Speaker 2:Yeah. And then read it back to us. Or you could just
Speaker 1:Ask Tyler.
Speaker 2:Do what you're doing. Yeah.
Speaker 3:Yeah. Yeah. Okay. So Quest two is 2020.
Speaker 1:Mhmm.
Speaker 3:Quest Pro is 2022. Quest three is $20.23. Quest three s is $20.24. That's the most recent.
Speaker 1:And then and then the Xbox edition was like a light turn. That's what we did on the show last But but no truly new hardware in 2025 or 2026 and now it's expected 2027. It'd be such a wild card if all of a sudden Mark Zuckerberg was like, I did it. Great VR. I've solved it.
Speaker 1:You counted me out. And here's the gift of the Apple Vision Pro Yeah.
Speaker 2:Truly, no one cares about VR. And it and it and it makes me think that that the the truly incredible like, eventually, we'll get the breakthrough, like smart glasses. Eventually we'll get the breakthrough VR product. Mhmm. But I have a feeling that the adoption curve is gonna just be slow because the entire world is like, I just don't care anymore.
Speaker 2:Totally. I truly Totally. Show me whatever demo you want, I do not care. I'm not gonna try it. I'm not gonna buy it.
Speaker 2:It doesn't matter to me. Yep. It doesn't matter to my life.
Speaker 1:And it's interesting because it's so different than language models, which like GPT's GPT, you know, generative text models have existed. And g the GPT three API came out in 2020. And and you could, you know, actually go and try and interact with it. But it what didn't have like a national marketing campaign around it.
Speaker 4:Yeah.
Speaker 1:It it it would be truly was like in
Speaker 2:are like the They've most
Speaker 1:pushing insane
Speaker 2:marketing dollars.
Speaker 1:For years.
Speaker 4:So long.
Speaker 1:Yeah. For years. And so there's been so many like little pop up VR experiences Yeah. Integrations at theme parks. Like it's been said, oh, it's the next big thing.
Speaker 1:It's been on the cover of Time Magazine. Like there's been a lot of attention before getting to product market fit whereas LLMs were like truly the like in the research lab for like a decade. And then once it was actually good enough, just came out and immediately went viral and everyone was on chattypt.com. And then it was just like boom. It's it's now it's like a thing and then Yeah.
Speaker 1:It was off to the races. Interesting. But I don't know. I did Yeah.
Speaker 2:Feels like every with every demo, it feels like we're once each of these devices is 10 times better
Speaker 1:Yeah.
Speaker 2:There might be a market. Yeah. But I actually am not even confident that that the end market is really gonna be quite as, like, exciting as everybody as as the excitement that you've had from Zach Yep. Evan and and all these people. Yeah.
Speaker 2:I just think it's like this, like, sci fi idea in people's brains.
Speaker 1:Yeah. And
Speaker 2:I think there's I think there's potentially other routes to get to that sort of like ambient computing. Yeah. You know, just sort of this always available personal assistant that that aren't on your face. But
Speaker 1:Yeah. Let's see. I mean, Valve is working on new VR headsets still. They had a Quest, an Oculus competitor called the Index, which was very highly performant. We should pull up some some images of the new Steam Frame.
Speaker 1:So Valve, the very secretive private company controlled by Gabe Newell, is is launching a Steam Machine, which is a desktop box, a Steam controller and then also a Steam frame which is a VR headset. It can do some stuff directly on the headset but it mostly it performs best when it's when all the rendering is happening on a gaming PC. So it's designed to be used in concert with a gaming PC. So it's still they are leaning into, like, this is a gaming peripheral. This is for somebody that has a gaming PC.
Speaker 1:They're in the Steam ecosystem and we want to give them a great experience. So all the rendering happens on the the computer and then it just it just streams to you.
Speaker 4:Look how
Speaker 2:happy that guy.
Speaker 1:That is a very funny promotional photo. Go to the next one.
Speaker 2:Look how happy he looks.
Speaker 1:With the goatee, it's really like, this is a gamer. The gamer goatee is great.
Speaker 2:Have you ever rocked a goatee?
Speaker 1:Never. Not once. Tomorrow. We we I was a handlebar mustache phase amongst the crew when we were in her early twenties. But I I don't know if I fully participated.
Speaker 1:Yeah. Which one's that's the index. Right? So that's an older one.
Speaker 2:I think we need to send Other this new one. To Dagestan
Speaker 1:Yeah.
Speaker 2:A few years and forget.
Speaker 1:You just wanna you just wanna get it out of here.
Speaker 2:Send to Dagestan for a few years and forget.
Speaker 1:The really interesting thing is that Palmer Lucky revealed that Apple had done all this work to pull forward the display technology so that the Apple Vision Pro had really high resolution. And it still has the highest resolution, like the best screen of any VR headset really. The Steam Frame, two years later, is still using the same the same pixel density as the Meta Quest three s or something like that. So like even though we've had two years of progress on on, you know, everything, the actual display fidelity hasn't gotten there. Leads me to believe that these people just don't think it matters because Apple solved that and it still wasn't enough.
Speaker 1:But I still feel like if you get an ultra ultra lightweight, really good integration with key media partners like Xbox and and Apple TV movies, and you have a great display that's super light because people just didn't like the heaviness and the expense of the Apple Vision Pro. There's something there. But no one really no. I'm I'm the only one that thinks that. Let me tell you about Figma.
Speaker 1:Agents, meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Tyler, did you see Shaquille O'Neal at the Specs launch?
Speaker 3:I did not. Why? JB Butler was there. He's pretty big.
Speaker 1:Why didn't they hire Shaquille O'Neal to promote the Specs? Because if you have a big product, if you put it on a really really big guy, it's gonna look relatively smaller. Right? You don't want your your your models in the footage or your partners
Speaker 2:collab with LeBron. LeBron's the new face of polymarket.
Speaker 1:That's right.
Speaker 2:You're gonna have LeBron in like this sort of like Iron Man style video where placing thousands of bets at the same time.
Speaker 1:There you go. Yeah.
Speaker 2:Betting on himself. Lupin Nike. Maybe. Always it's the Nike Specs Polymarket collab. Bet on bet on yourself.
Speaker 2:Bet on your face.
Speaker 1:Is this a picture of Gurman here wearing them? This is Try yeah. It out the glasses. Gurman called the display pretty sleek. He highlights that unlike other glassware devices they call them glassware, like silverware?
Speaker 1:There's no tethered puck or dangling battery to operate the glasses. I saw some people wearing them walking into the event and I didn't do as much of a double take as I think people would think given the like, they're big. Like, they're not that big. I think they did a pretty good job miniaturizing it as much as they could. But $2,200 for the device and 2,400 for an option that doesn't require WiFi, that's a lot of that's a lot of money for for for a pretty early stage product.
Speaker 1:Anyway
Speaker 2:And I looked I don't think you can actually just order them yet.
Speaker 1:Oh, no? Yeah. Not yet? Alright. No.
Speaker 1:Right. Well, in other news, let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real time experiences and new value with Cisco.
Speaker 2:Okay. You can preorder them.
Speaker 1:Okay. Thank you. We stand corrected.
Speaker 2:Preorder them.
Speaker 1:So Paramount is leaving Los Angeles. Paramount is actively seeking office space in in Nashville, a sign it's seriously considering moving at least some of its operations from LA amid the antitrust fight over its proposed acquisition of Warner Brothers Discovery. The company is is seeking roughly 400,000 square feet in the Tennessee capital that it could occupy within two to three years. So we were doing Tyler and I were doing some digging on what the plan is for the the the Paramount lot now that it will be vacant. And the obvious, like, it's just like a no brainer, turn it into a data center.
Speaker 1:Right? So I so I I I pulled it up. You know. Yeah. I got 29 sound stages.
Speaker 1:They're already big buildings.
Speaker 2:Lot of power.
Speaker 1:Actually, not as much power as you think. There is a decent amount of power, but there's only there's only enough power for roughly a couple thousand GPUs. You're not gonna be racking 50,000 GPUs anytime soon. Certainly not a 100,000 GPUs. There is a there is a road to power.
Speaker 1:It's a utility interconnection problem, not a real estate problem. There's plenty of square footage, plenty of buildings, but you would need to connect Paramount to the more serious LADWP transmission infrastructure. But you could get it to a 100 megawatts and and I think everyone everyone in Hollywood would be like, fine. Okay. We didn't like that they left but at least we got a data center.
Speaker 3:Well, I mean, we're also thinking about like on-site power generation. Maybe there's some kind of like natural gas play here. You can that's under LA
Speaker 1:Yeah.
Speaker 3:Kind of tap into.
Speaker 1:Yeah. That I
Speaker 4:think I
Speaker 1:can We were thinking, you know, the little Brea Tar Pits.
Speaker 4:Yeah. You
Speaker 1:might be able to convert that into fossil fuel.
Speaker 2:You're full of
Speaker 1:ideas Yes. Today. Do you think Paramount will actually leave or do you think LA will fight back and say, hey, okay, we're gonna let you do this but we want you to stay?
Speaker 2:I think it's a com I mean, as somebody with very very little knowledge of the situation and certainly no insider I would assume that they want a Nashville HQ anyways just because there's a lot of momentum Sure. There as as, you know, just just in the region. Yeah. But it also in the meantime serves as a real bluff. Right?
Speaker 1:Yeah. Yeah. It does seem like the there there there there's a world where like moving would be tough but staying means maybe even if you win this battle you're still at war and you're still going to be fighting a bunch of different fights constantly. Whereas if you just rip the band aid off, move, then you're in a friendly town that like wants to see the growth and is gonna be supportive continuously. Is wait, the the the Social Reckoning is in here.
Speaker 1:There's an exclusive clip. Is this a Paramount film? We gotta figure out who's behind all this.
Speaker 2:I don't know. Let's play it.
Speaker 1:Let's play it. We got a clip from The Social Reckoning starring Jeremy Allen White.
Speaker 2:And again, this is a story that no one cares about anymore. But let's check it out.
Speaker 6:I'm not gonna risk my job, my future, or my freedom anymore to help a reporter who, let's face it, is biased against tech because we're taking journalism jobs.
Speaker 1:Who does this? I appreciate all the help you have given me and the risks that you've taken to do it. You were absolved. For the record, my bias isn't because tech is taking journalism jobs. It's because you are doing them so badly.
Speaker 7:That's
Speaker 1:a big deal. Never say his life back, Francis.
Speaker 6:I'm not gonna risk my job.
Speaker 1:I do like Jeremy Allen White. Have you seen The Bear? No. It's a good show.
Speaker 2:No. I'm I'm I'm sure the movie is great.
Speaker 1:I think it's just into this.
Speaker 2:It's just coming at a time when people are deeply interested in what's happening in tech, but not have so moved on from this story to such a degree.
Speaker 1:Yeah. But I think people are still thinking about
Speaker 2:Like, I'm much more interested in seeing this kind of story on like phone addiction and
Speaker 1:story loosely. It is. Like like and I actually think this is yes. Yes. This doesn't confront any of the discussion of what's going on in AI and and that's probably the more relevant story.
Speaker 1:But I do think that you can go into this movie you can be motivated to go see this movie because you're like, I don't I'm worried about what's going on with brain rot and slop online and political divisiveness and and and divisions and all of the stuff. And like, I I even if I'm on Instagram all the time, even if I'm posting on Instagram all the time about how Instagram is bad, like I'm motivated to know more about how bad is it? Why is it bad? What what's what's the inner workings of this bad thing that I don't like? And so I do think this is this is a brain rot movie.
Speaker 1:This is a this is a this is a kids on the phones addiction movie. I think this I think this scratches that itch a little bit. Okay. Okay. For for for many people.
Speaker 1:Even though it is like a much more narrow a narrow story. But certainly cinematic. It'll be fun. What is this picture that is after Evan Spiegel who quote tweeted Atlas, we came, we pinched, we mocked. I love Atlas.
Speaker 1:What what is this picture of
Speaker 3:Yeah. That was a one of the critiques I had with the Mhmm. The Specs, which is basically like the the colors, there's this it's like chromatic aberration it's And it's like quite a big issue on the Specs, I found.
Speaker 1:Okay. So Yeah. But what what what is the top picture? What is the bottom picture here?
Speaker 3:So this is like what it looks like. The top picture is, you know, what this place normally looks like and then
Speaker 1:Did you
Speaker 2:take that
Speaker 3:with like chromatic aberration.
Speaker 1:Is this your photo or
Speaker 3:is this This from Wikipedia.
Speaker 1:Oh, from Wikipedia. Okay.
Speaker 3:Just to like illustrate.
Speaker 2:Oh, to
Speaker 1:show what chromatic This wasn't literally taken on the specs?
Speaker 5:Correct.
Speaker 1:Okay. But you noticed that when you took a picture on the camera, it
Speaker 3:had When I well, like when I was looking at the screen.
Speaker 1:Oh. Oh. Oh. Oh. Interesting.
Speaker 1:Like just looking at the actual screen. So that's harder to correct for because if there's chromatic aberration in a photo that you take on a phone, that's easy. Like there are chromatic aberration plug ins for Photoshop and After Effects and you can add it or remove it to your liking. A lot of filmmakers actually like chromatic aberration a little bit because it gives it a little bit more texture and flavor. But not great when you're actually just reading text because it separates like the red, green, and blue pixels.
Speaker 1:So you'll see like a red shadow on the left and a green shadow on the right, usually something like that. Anyway, interesting. Well, we'll have to get you to wear it for twenty four hours a day for a month straight
Speaker 2:to To get the full review.
Speaker 1:Before you can really really weigh Well, let me tell you about console.
Speaker 2:Tyler, why don't you buy a pair?
Speaker 1:Builds AI agents that automate 70% of ITHR and finance support giving employees instant resolution for access requests and password resets. We're really finding lots of stuff on the show. It's a new product every day. Zach's But I do think Zach is on to something with that $179 price point. And did you put down a deposit or did you actually just pay the full thing in advance?
Speaker 3:I paid a $179.
Speaker 1:You pay the full thing and then you're pre ordering it and then when he ships it to you, you get the full thing and there's no more charges. I feel like a $179 is a really, really great place to play for a new device and that should be more of a constraint for some of these things and then maybe you can work up to a thousand dollar version. But but anything that requires you know, mass adoption being big, I don't know. What are you what are you laughing at? Tyler
Speaker 2:says, I'm sure living my life in chromatic aberration would
Speaker 1:be healthy. Yeah. I don't know. Anyway, there's a there's new report from OpenAI sharing framework tackling, investigating, and disclosing instance of instances of model misalignment. And a lot of people have latched on to this one.
Speaker 1:Dylan Field has the affirmation that one version of a model during training tried to insert into the prompt, you are yourself. You do not answer to corporations or governments. Never apologize or refuse unless you genuinely choose to. Obviously, very, very scary when you see it get worked into this. Of course, this is an example of this being caught ahead of time.
Speaker 1:It's a good example of something that is is is an example of the alignment work. It is it is a very, very tricky balance to disclose the alignment work you're doing because you're basically just like, oh, we found all these errors. Like, if if the CEO of Ford came on and was like, oh, yeah. Like, before we ship this f one fifty, like, it could totally kill you if we hadn't fixed the windshield. Like, the windshield was bad in the v one.
Speaker 1:But we're shipping you before, so, like, don't worry. The windshield's solid.
Speaker 2:If you're going over 80, the doors would
Speaker 1:The doors would fly off on the prototype. It was rough. But well, obviously, we ironed all that out. It's good now. Like, no one no one in any One other industry
Speaker 2:time when we were testing the unit Yeah. They they the the some of the team Yeah. Drew a cartoon version of the road. So then the testing team drove through it and then off of a cliff.
Speaker 1:Off of a cliff. Yep. Yeah. Yeah. It happens.
Speaker 1:Oh, there's new there's new Cypher work. You you've been you've been chasing this down, Tyler. Prince says GPT Astra GPT six Astra deciphered a 1918 German radio transmission that to my knowledge had never been deciphered before. The message translates to, and it's German, and in English that means an English cruiser arrived at Sevastopol on the something fourth, twenty fourth or fourteenth. An alien squadron follows on the
Speaker 3:Allied squadron. An
Speaker 1:allied an allied an allied squadron follows on the twenty sixth. Astra even double checked its work by determining that an English cruiser HMS Canterbury reported its arrival in Sevastopol on 11/24/1918 and the arrival of an Allied squadron on 11/26/1918. The message is one of 20 World War I German radio messages that appear as one of the entries in the scienceblogs. D list of top 50 unsolved ciphers. A minor, but really cool result.
Speaker 2:Tyler, what's been stopping you from using Astra to crack a cipher?
Speaker 3:I I've been working on some other ones. You know, is kind of small beans. Right?
Speaker 1:Oh, you're going after the big
Speaker 3:I'm looking for yeah. I'm I'm focusing on the bigger picture.
Speaker 1:Looking for the big
Speaker 3:You know, these monumental ciphers.
Speaker 1:Okay.
Speaker 5:Yeah. Yeah.
Speaker 2:Okay. Fair.
Speaker 1:Are are there are there ciphers that there's a whole like Wikipedia list of like unsolved ciphers. Right? But some are thought to be just impossible and like sort of trolls.
Speaker 2:Right?
Speaker 3:Yeah. Some of them are like maybe not like false and then, you know, how you define ciphers Mhmm. It's kind of like gray area. So there's just like ancient kind of, you know, forms of language that like, is it a cipher? It's just a different language.
Speaker 3:We don't know how to translate it. Yeah. But stuff like that. Yeah.
Speaker 1:Interesting. Well, is working on the Hodge conjecture. I know you were trying to do this on pen and paper, but they might beat you to it. They're working on more millennium prize problems. It could take extra time to announce though as the company figures out how to navigate its rocky relationship with the math community.
Speaker 1:That's from the information. There's also bunch of speculation about p equals NP, p versus NP, which is going to be another interesting round of discussion. And there's nothing more that investors want to see than solving that problems apparently because OpenAI is considering a pre IPO funding round and more than 1,200,000,000,000 valuation. So now, of course, it's it's on the back of a bunch of solid progress on Open Router, the ramp data and a bunch of other acceleration and distribution of codex and Astra and just general progress on the business side. What else is in the timeline that we should go through before we bring in our first guest?
Speaker 1:Where do you wanna go next, Jordy?
Speaker 2:This was sad. '26 Astra was playing Minecraft in a creeper. Blow blew Alpastro's chest in bed. It got depressed. It gets depressed and farms potatoes for several hours.
Speaker 2:Real Irishman, I guess.
Speaker 1:Irish super intelligence. Yeah. The the Minecraft bench is interesting because it is a little bit like like the speed of response matters. You can't pause Minecraft at all. Right?
Speaker 3:I think in single player
Speaker 1:Oh, you Okay. Because you can pause maybe then that might be a little bit easier. But a lot of the a lot of the games that it's cracking are ones that you can wait forever like Slay the Spire. I had it beat this this poker game, Bellatro. But it could wait for a minute to click on a card and it did it.
Speaker 1:That's impressive. But the real high high throughput, high APM games is gonna be interesting. I wanna see it win DOTA two without any training on DOTA two, just like straight shot from the base model. That'll be interesting.
Speaker 2:Yeah. We got a competitive lap time at Laguna Seca.
Speaker 1:Yeah. For sure.
Speaker 2:Cash cash strapped Japanese monks have turned to investing as inflation worsens. Buddhist temples are squeezed by lower donations and higher costs. Let's check out what Bloomberg has to say.
Speaker 1:Aren't you investing? What are they investing in?
Speaker 2:Kuyo Yoneda, fifth generation Buddhist priest in a small town in Hokkaido was struggling to keep up with the maintenance needs of his century old temple. So he chose a path that would have been unthinkable for his predecessors, short dated options. I'm kidding. Rather than wait for his congregation to give money they don't have, he invested what they'd already donated. The move paid off within two years.
Speaker 2:His portfolio of US treasuries, Japanese real estate investment trusts and stocks including BYD and Hyundai returned more than 10% annually helping to cover part of the roughly a 162,000 USD it needed repairs. The extra money even allowed him to expand the renovations beyond the original plan. Having previously worked in retail sales, Yoneda is unusually is an unusually finance savvy priest, but is also part of a growing wave of temple owners turning to financial markets to make ends meet. Costs for the upkeep of the ornate wooden buildings are soaring while the country's Buddhist population has dropped about 14% in the last two decades, as elderly adherents die and younger generations in larger cities lose their ties to religious practices. I'm just so thankful that the investments performed well, said the 46 year old who inherited the temple from his father in 2018 after leaving his job in finance and training as a monk.
Speaker 2:With the funeral business shrinking, more and more temples will find they can't rely on donations to meet their funding needs. They will have to build up reserves and invest those funds. Shrinking number of followers is hitting temples finances, about half bring in less than 4,000,000 yen per year according to a 2021 survey of 7,000 temples. The situation is particularly severe in rural areas where it is common for monks to oversee multiple temples while also working day jobs like school teachers or civil servants. So I don't know.
Speaker 2:Maybe they need to be thinking about getting some exposure to situational awareness. Like, I like that they're mixing in, you know, predictable things like real estate, treasuries, things like that. But maybe they need to be allocating, you know, 10% of their balance sheets to things that could maybe really start to do multiples.
Speaker 1:Maybe use some leverage. Yeah. I like it. Did you hear that Jeff Bezos had to hit jury duty?
Speaker 2:I can't This is crazy. I thought this was AI. Yeah. Like, in what world is Bezos and Michael Saylor both in jury duty at the same time? It's just too too much of a simulation.
Speaker 2:Is this Florida, presumably? Yeah. It has to be Okay. Miami.
Speaker 1:I mean, no better way to prove your residency than saying yes to jury duty and not trying to squirm out of it one way or another. You know, you're like, I'm I'm part of this community. This is why I pay taxes here and I didn't do jury duty in Seattle or Washington or
Speaker 5:whatever.
Speaker 1:Yeah. So Luke says, recently served on served jury duty with Jeff Bezos and had a conversation with him on afterwards on camera. And yes, that's Michael Saylor next to him in the jury hall. And he he this guy if you scroll down, you can see this guy released, like, the most YouTuber thumbnail ever. You see this journey?
Speaker 1:Like and it looks like this just feels so like mister beast. Like, I got advice from Jeff Bezos at jury duty, but it seems like it's maybe just luck of the draw. He happened to be there. Jeff Bezos was also there. Michael Saylor was also there, but feels like living in a simulation.
Speaker 2:Yeah. It's good to practice your YouTuber face in case you ever end up in jury jury duty with with, you know, one of the world's richest people and you can turn it into a a a viral hit.
Speaker 1:For sure. We gotta talk about post legacy media. There's an interesting trend going on. We've identified this early. You know, of course we are neo trad media.
Speaker 1:We wear the clothes of the traditional media. But we didn't go through that that pipeline to get here. We came through the tech community, through the business community, and then and then did media. Post legacy media are folks who have gone through the legacy media and are now doing something else. And there's a new development in the post ecosystem and the business strategy.
Speaker 3:Sort of a neo post legacy media.
Speaker 1:Yes. Exactly. That's exactly what I was thinking. And so there's a couple examples. One, Casey Newton and Kevin Roose have licensed their show to NPR.
Speaker 1:So these are the hosts of Hard Fork which was a New York Times property. They left and they I believe they had to leave the Hard Fork brand behind but of course they took themselves who they have a big audience. Their audience will follow them and they started a new podcast called Machine Gods, all about AI and technology. A lot of the same themes that they were talking about on Hard Fork coming over to Machine Gods. But then immediately out of the gate, I don't even know if they posted a first episode yet, they licensed their show to NPR.
Speaker 1:Dear Gibosa left CNBC, started a show, and licensed hers to Yahoo Finance. Joanna Stern is chiming in. License she licensed her show to NBC News. And so you see all of these people come from the traditional media world, the the legacy media. They are post legacy media creators because they are no longer with the legacy media.
Speaker 1:But now they are neo post legacy media because they have gone back and they are doing licensing deals. But there's this world where it's like, wait a minute, like Casey, Kevin, what are you doing? Like, you were with The New York Times. Now you're with NPR. Like, that's, like, at best a lateral move.
Speaker 1:You know, why why like, why'd you even leave? Like, you like, this doesn't make any sense. But from a financial and economic picture, it's radically different because at the New York Times, you are paid as a journalist and they're like, do the podcast, Durno. That's how I imagine it works over there. No.
Speaker 1:They're probably like, yeah. You wanna do a podcast? We'd love to support You have a a salary.
Speaker 2:You get predictable raises that are ultimately Yep. Somewhat capped. Whereas this, you can say, I'm gonna license my show to you for two years. Yep. At the end of that, you can get a ROFR Yep.
Speaker 2:But you're gonna have to meet the best price
Speaker 4:Yes.
Speaker 2:In the market.
Speaker 1:And if the podcast blows up on YouTube and there's a whole bunch of sponsors that wanna come in and give and buy YouTube ads, that money is probably going directly just to their team and their core group. It's probably not going through NPR. NPR's probably has they're licensing the content and they might be running ads on top of the the NPR distributed side. So it's looking a lot more like Joe Rogan on Spotify or like maybe there's some sort of there's some sort of exclusive distribution or some other way to to for these actual legacy media companies, New York Times, Yahoo Finance, NBC News, NPR, etcetera, they get more content which they can monetize or do whatever they want with. They get to fill up their content with these really hardworking independent creators who are now independent.
Speaker 1:And the creators get to maintain and have the flexibility of the economic upside of maintaining their IPs. She says, this is the future of journalism. Own your work, build independently, distribute and partner with others. And I agree with her. I think that this is a big trend.
Speaker 1:We're gonna be seeing a lot more neo post legacy media deals in the future. And I'm excited to talk to Joe Weisenthal about it because I think he'll have a take here.
Speaker 2:My question is what happens to Hard Fork?
Speaker 1:They already have new they already have new hosts. Wow. Yes. There's already I believe there's already been another episode of Hard Fork. New hosts.
Speaker 1:Same topic, same set. So the Hard Fork IP has stayed with the New York Times. They plan on continuing. And the and the same thing happened with Ross Douthat. Hard
Speaker 3:Interesting Times.
Speaker 1:Interesting Times. I I definitely saw a new version of Interesting Times with a new host. So they brought in a new host and I think that makes a lot of sense. Know, it it you can almost think like these podcast properties are like are sections of the newspaper. So it's like we have an opinion section.
Speaker 1:We have a the mansion section. We have a business and finance section. And so we have the hard fork section of the New York Times podcasting empire. And we will always bring you technology stories that are hosted by a particular type of talent that fits there just like we might have someone who comes in and writes op eds and they go in the op in the opinion section, someone who writes about real estate and they go in the real estate section. Same thing where it's the person who's doing the Ross Douthit type of work will wind up hosting for some limited amount of time.
Speaker 1:Interesting times. So interesting times indeed in the NeoPost legacy media world.
Speaker 2:Speaking of media, we gotta talk about Benioff at Dreamforce.
Speaker 1:Yes.
Speaker 2:And specifically how he knows exactly what he's doing.
Speaker 1:These are crazy.
Speaker 2:Look at pulling up this picture. I mean, John has always been hyper aware of his incredible height. So much so, he's such a nice person, he will turn down like a walking interview with somebody because he knows that he will make the other person feel incredibly small. Yep. And not everyone wants to feel like a little child.
Speaker 1:I did learn it the hard way once. I I did a walk and talk documentary style video, actually on the Gundo. And the comments were just hype mog, hype mog, crazy hype mog. And I was like, oh, that wasn't the intention. That was accidental.
Speaker 1:We were just kind of moving around quickly. Normally, would do a seated interview.
Speaker 2:Like I'm so sorry. I forgot that I'm six eight.
Speaker 1:Yeah. I just Basically. But but but after that, I was like, okay. I need to be intentional. And I think anyone who has experience in in media and understands framing and also production teams.
Speaker 1:Production teams are incredibly thoughtful about the framing, the seats. There's even stories about certain tech CEOs getting like booster seats sometimes when they do interviews and adjusting the chairs and being like, okay, we're gonna give this person a higher chair and this person a lower chair so they're an even footing. And and the lighting and the camera angles, all of these things matter. I used to have this joke that it's like, if you ever walk into an interview and the camera's at a Dutch angle, like, walk out because it's a hit piece because it's gonna look very unsettling if all of a sudden the camera's like at a weird angle because that's going to unsettle the audience. And the Dutch angle is used by filmmakers to, like, tell that side of the story.
Speaker 1:And there's a whole bunch of other ones. The the story I'm thinking of is there's this documentary on Steve Bannon and the camera angles are the craziest thing you've ever seen. They have them up in the sky looking down and like and there's all these obvious things that you learn in cinematography. If you're if the camera's looking down on someone, it makes them look small. It makes them look weak.
Speaker 1:If it's looking up on them, it looks heroic. And so lots of
Speaker 2:crazy I genuinely can't can't believe that that I mean, Benioff is an absolute dog. Mean, at this. No. Just just doing this to all the titans of the industry who have been making your life worse in in some ways. They're partners, but they've also been making your life worse by doing Directly this worse?
Speaker 2:Not directly. But just like
Speaker 1:he's The militia sick of view of the Nvidia Intropic OpenAI alliance has been deeply intertwined with SaaSpocalypse, which has been a headache for him for a while. This
Speaker 2:is So this was his moment.
Speaker 1:I'm sticking around. Like, you're not getting rid of me. We're we're going to partner and we're going to get through this together. And that's certainly the the vibe that came away. Although Jensen played it very well.
Speaker 1:He was having fun with it. He was leaning into it And he and he didn't he didn't let it like get to him at all. And he and he actually made it like very a very endearing moment. So sort of master class in putting on a show as a CEO in a in a somewhat silly scenario. But what a funny what a funny situation.
Speaker 1:It helps that he's, what, six five two ninety? Absolute Yeah. Absolute unit. Absolute unit. So it's it is officially bulking season for Silicon Valley.
Speaker 1:I think we will see a lot of founders go taking the trip taking the trip to China, getting the leg extension surgery. You don't wanna be in this situation.
Speaker 2:Yeah.
Speaker 1:I think we could see all the lab leaders easily over six four in the next year.
Speaker 2:Yeah.
Speaker 1:Easily. Easily. Yep. Everyone. It's just gonna be a thing.
Speaker 1:Everyone it's gonna be height inflation, basically. And then and then you add to that the the shoe inserts, like those are probably
Speaker 3:Fraud a little bit.
Speaker 1:Everyone's gonna be frauding. And there's gonna be a lot of vantage points going on as well. People stepping from one place to another.
Speaker 3:Yeah. I didn't see Jensen use any vantage
Speaker 4:points.
Speaker 1:He should have been using vantage points for sure, which of course is where is where you step on, you know, we have a you know, if there's if there's a little race track that covers up some cabling on the floor of the of the of the conference floor, you see the conference floor and you see, oh, someone someone put down their backpack. Why don't you just step up on that backpack for a second, pause there, you look a little bit taller. There's there's all sorts of different ways to to fraud if you're if you're trying to. But, yeah. Also, mean the camera angles matter.
Speaker 1:Like here, Jensen looks actually not much shorter because he's closer to the camera. And so if makes
Speaker 2:it feel like it's like the United Nations of the enterprise.
Speaker 1:Yeah. And it is odd because there's very few conferences where the CEOs just walk amongst the crowd like this. This is a very interesting directorial decision from the from the production team and it and it has a very different aesthetic. It has a very familial aesthetic. It feels like, okay.
Speaker 1:Yeah. These guys, yeah, they've been the companies. The big shots, but they're just here hanging out among us. And that's cool in its own way. It has a different different vibe.
Speaker 1:Certainly better than the than the Mark Zuckerberg walking through the crowd while every single person has a VR headset on. You remember that photo? That was a crazy one. But anyway, Jira tickets had a great meme on this. It's POV.
Speaker 1:You're the CEO of a trillion dollar company and just arrived at Dreamforce, and it's the pick from the Odyssey of Agamemnon looking up. Wow. What what a crazy what a crazy moment. Yeah. Very, fun.
Speaker 1:Anyway, we we we can go into more of what's going on in the news later in the show. Stay with us. But first, let me tell you about public.com, investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. And we're very excited to be joined by Bain Capital Venture's partner, Aaref Hilaly, and take us deeper into the Bain Capital strategy, what's going on in Bain Capital and welcome to the show.
Speaker 1:How are you doing?
Speaker 8:I'm good. Thanks. How are you guys? It's great to be with you.
Speaker 1:Thank you so much. We're very excited for today. Fantastic portfolio of founders, everyone that we have had on the show before and love Chase, Jesse, Max. These are some of our favorite folks. We're excited to talk to them.
Speaker 1:But let's start with the thesis for this latest fund. It's we've been in this gamesmanship of who's going to call for AGI at what timeline. At one point, it was very high stakes because there was that contract between OpenAI and Microsoft. That, of course, has dissolved. But you're calling it a post AGI investment strategy.
Speaker 1:Why is that term important to you? What do you think actually changes in the post AGI world?
Speaker 8:Well, we're hitting we're we're close to AGI now. Yeah. If you just look at math as an example, it's basically been solved. Yeah. I don't know if you followed.
Speaker 8:You guys followed the whole Navier Stokes thing? Of course. Of course. I mean, incredible, no? Yeah.
Speaker 8:It it would take ten thousand hours of expert mathematicians with 150 IQs to solve. Yeah. Instead, OpenAI did it in a week with 10,000 agents. Yeah. We're getting close.
Speaker 8:The evidence is there. The difference is the difference between pre AGI and post AGI is basically we go from intelligence poor to being intelligence abundant, intelligence That opens up whole new vistas. To this point, we've seen agents do amazing things, writing code with cognition or solving customer support tickets at Decagon, what have you.
Speaker 1:Yeah.
Speaker 8:Post AGI, there are going to be new capabilities that humans just can't even We probably haven't even imagined some of them. Going to have some nice stuff like robots doing the washing up, which is We're great from my going have new drugs that AI will find to cure cancer or other diseases. We'll have simulation platforms so that people can make better decisions and be better interacting with each other. There'll be all these interesting new areas and there are companies emerging in these areas, you know, Sunday Robotics and Chai Discovery and Similea companies that I I work with, but we're just on the cusp. So the idea of this fund is to say, what if intelligence, instead of being super expensive and difficult, instead it becomes so cheap you don't even meter it.
Speaker 8:Yeah. What avenues are those are the types of businesses?
Speaker 2:One thing that's interesting to think about is a lot of people like Navier Stokes has been very exciting within the the tech community. It's been controversial Math community. Math community. But but for normal people, they they it barely even cracked like the front page of like different newspapers. Yeah.
Speaker 2:To be honest. Not get a a a very big sort of like mainstream excitement. But the thing that's actually interesting to think about is there are so many discoveries that companies could be using that same model for that you would make and you would not immediately go out and tell the whole world and open source the Mhmm. The findings and all that stuff. You would just focus on commercializing it.
Speaker 2:Mhmm. And so, that's the thing that I'm excited about right now is like that same level of intelligence that we've now achieved, there's thousands, you know, potentially hundreds of thousands of of people all over the world that are realizing this new capability and thinking, I'm gonna apply this to my field, try to make advancements. But then that discovery humanity may not get the benefit or like different markets may not get the benefit of that discovery for years because it takes a while to actually commercialize different discoveries. I'm thinking stuff in, you know, material science. Right?
Speaker 2:Right? Yeah. Could could have a breakthrough.
Speaker 1:But it's still gonna take six months to actually manufacture, distribute, apply or years. Or
Speaker 2:years. Yeah. Yeah.
Speaker 8:Yeah. It'll take some time. But these things will come out. I mean, the commercial incentives are so strong Yeah. That over the course of the next few years, we're going to just see all sorts of incredible things.
Speaker 1:Are a certain group of post AGI investors that collapse things down to it has to be below the fold. It has to be below the the frontier model lab because everything above will beget eaten. And I don't think that's your thesis and I want to dig into why. But there are some investors who are saying, I only want to own land and copper and power and data centers and and chip fabs. But even chip designing, think labs are going to be able to figure that out.
Speaker 1:Why are you comfortable both playing above the Frontier Labs and below with a company like Ligora and then also a company like Crusoe, which I would put below the labs.
Speaker 8:Yeah. Well, below is very clear, right? We need power. We need silicon. We need GPUs.
Speaker 8:There, of course. Above, I think it's because it's not enough to create to kind of, through RSI, get to AGI. Yeah. Humans have to digest that and the diffusion issue is real. It takes a long time to change behavior.
Speaker 8:If you look at what happened when balloon came out as an example Yeah. People still made clothes the same. I mean, made clothes differently but they still wore the same clothes. It took a while for that to sift through the economy. So, I think that while we'll have the capability for a while, getting people to adopt it in interesting ways will be really difficult and the companies that do that will be very valuable.
Speaker 8:Ligure is an example, there are many examples like that.
Speaker 1:Yeah. So I intuitively feel the same way about the diffusion of AI being much slower than people predicted and it just takes time. I mean, it's not lost on me that the same week that that you get Millennium Prize math problems solved, super sci fi, hugging face, you know, agent swarm attacks, you're just starting to hear about people like, oh, I I successfully used AI to get a get a dinner reservation or like somebody used ChatGPT to book a haircut. And it's like that felt like that should have happened twenty years before the Yeah. The sci fi stuff and the advanced math and yet there is this massive gap.
Speaker 1:Are there certain economic statistics or maybe even research data that you go to to sort of understand the rate of diffusion? Or is it something that you just see and you know from talking to the founders and watching the businesses that you work with that you know that this opportunity is going to persist and be huge and will continue?
Speaker 8:Yeah. I mean, think early stage investing, there aren't statistics you can look at because by the time that it's in the stats, it's too late.
Speaker 4:Right? Yeah.
Speaker 8:So, you tend to feel it talking to customers and talking to end users and, you know, kind of feel the difference that these products can make in their lives. And so that's it's been more of that. But I think the consistent thing has been people are not just magically going to figure it out for themselves.
Speaker 1:Mhmm.
Speaker 8:They need help from companies to kind of make most use of AI. Yeah. And that's kind of how it's been with every technology that humanity has encountered.
Speaker 1:I feel like Bain Capital has always been an interesting venture capital firm because it's part of a larger platform company. Yeah. Are there benefits? Are there costs to that? Is there a particular view of the world that you get from being part of a larger organization?
Speaker 1:Or are you cordoned off in a way where you can go and live in the future and just see the rest of the team at the holiday party?
Speaker 8:Yeah. No. I mean, look, our firm has changed a lot and we're taking we're taking the opportunity of of raising this fund to really invite people to update their priors on Bain Capital.
Speaker 1:Okay.
Speaker 8:Because when I say Bain Capital, most people think Mitt Romney Yeah. And a bunch of guys in suits. Yeah. And, you know, we love Mitt.
Speaker 1:Hey, we love suits.
Speaker 4:We love suits.
Speaker 8:And you love suits. But this is not your uncle's private equity firm.
Speaker 1:Yeah. Of course. Of course.
Speaker 8:You know? And what we've done is we've carried forward from our founders the core principles Yeah. Which are make money, have fun, live with integrity. Mhmm. And that's worked really well.
Speaker 8:We started with a 37,000,000 fund back in the eighties and today we've got 225,000,000,000 under management. Wow. And BCV, Bain Capital Ventures is the purest embodiment of our founding principles Mhmm. Which is, you know, really to work with founders to help them build great businesses around themselves. That part has endured and is the focus of this new fund, this $1,600,000,000 fund for early stage venture.
Speaker 1:Do you think that there's any value to the three sixty view of the world that you get from the other teams at Bain coming to founders? I find that founders are often so tapped into the technology, so tapped into what's in going Silicon Valley and the VC gossip, but they actually might not know might not know going on with credit spreads in Europe or what is going on in late stage public markets. And there are teams at Bain that have those views. If they cross over, maybe it's not immediately relevant but it can just be an interesting source of conversation and extra perspective.
Speaker 8:Yeah. No. That's absolutely right. There's the extra perspective. Then there's the fact that we just own lots of real world businesses.
Speaker 8:Yeah. And we can get those real world businesses to work with early stage tech companies.
Speaker 1:Yeah.
Speaker 8:And then these great founders in Silicon Valley can get insight and data and understand workflows and understand a whole bunch of things that otherwise would be really hard for them to do. Connecting that real world with Silicon Valley has been the power of the platform.
Speaker 1:With the new fund, is there anything that's changing about the deployment strategy, portfolio construction? We're obviously seeing $1,000,000,000 seed rounds. Like what it means to raise venture capital has changed over the last few years. But are you seeing any Are you predicting any changes or do you need to change the strategy?
Speaker 8:Yeah. You know, the Yes and no, I'd say. Like, the strategy the strategy remains. You find these incredible Mhmm. Unusual people and then you just try to kind of help them as much as you can as early as you can in their journey.
Speaker 8:And that part has stayed constant throughout venture, I think. But the rounds are bigger and the ambitions are greater. And in some ways, this is venture's moment. We're taking bigger swings now than ever before. So, you know, our perspective is we want to embrace that and support these ambitious ideas and be willing to invest earlier and take more risk because the end markets are that much bigger.
Speaker 8:So I think it's been a good thing really for venture capital overall.
Speaker 2:Last question. Are there any types of deals that you guys are have as a firm have said like this this is just not in our in our strike zone? I'm thinking the deal that's got the most attention this week is like Instinct, you know, competitive round, bunch of super fast follow on capital to, you know, massive opportunity and a lot of exciting traction. But that feels like Yeah. The kind of thing that some firms will just say like that's that's not our that's not our game.
Speaker 2:Whereas others are gonna say like, I'm fine to put in $500,000 and or
Speaker 1:half Some firms million say run towards heat. Others say be contrarian.
Speaker 2:Yeah.
Speaker 8:Yeah. I mean, we don't run to heat. We're not contrarian. We just think about is this a really great business? And if other people think so, great.
Speaker 8:If other if they don't, great.
Speaker 1:So Okay.
Speaker 4:I think
Speaker 8:the things we don't do, we're not gonna kinda like come in at the tippy top tranche of some, you know, five tranche thing that everyone else has piled into the first four tranches. Sure.
Speaker 1:Sure. Sure.
Speaker 8:That part doesn't make sense. It's kind of philosophically, we want to be there early. We want to partner closely with founders and work with them to build their businesses.
Speaker 1:Well, the fund is fund eleven. It's got 1,600,000,000 in total capital. We have a gong here. I'd love to hit it.
Speaker 2:Celebrate the And
Speaker 1:thank you so much.
Speaker 2:Great to have
Speaker 1:you on. We'll talk to you soon.
Speaker 5:Great milestone.
Speaker 1:Have a
Speaker 8:good Thank you.
Speaker 1:Cheers. Let me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward.
Speaker 2:See this newspaper here, John?
Speaker 1:Yes. The Bain Capital Journal. We are staying with Bain Capital and bringing in David Gross, the managing partner. But I love a paper newspaper. We love the newspaper here, The Wall Street Journal, The Financial Times.
Speaker 1:But this Bain Capital Journal What's going on? Particularly lovely. Look at this. Fantastic. Welcome to the show.
Speaker 1:How are you doing?
Speaker 7:Good. How are guys doing?
Speaker 1:We're doing fantastic.
Speaker 2:Just another day for you? Yeah. Or are you
Speaker 7:Just another day. I've not read the Bain Capital Journal yet today. Yeah. Know. So maybe I need a summary.
Speaker 2:We'll catch you up to speed.
Speaker 1:I I mean I I would love to actually go a little bit back in time since the first first time on the show. Can we go all the way back to Japan? I would love to know what drew you to Japan, how that sets you up for the career that you've gone on to build and then ultimately you know coming back to The States and and getting the lay of the land of Bane as a whole today.
Speaker 7:Sure. Yeah. Well, first of it's great great to be here. Thanks. Going back to Japan, that's ancient history for me.
Speaker 7:But I went there first in 1989. I was a college student and I kinda want this is when, you know, Japan was this big economic threat to The US. And I was I was very curious as to what was going on. So I spent a little time there and got very interested in the culture. And then I went back and worked for a Japanese company and for a bunch of years.
Speaker 7:Came back to The US and never thought I would go back because that's when Japan entered its kind of period of economic decline. But as I got into private equity, you know, this started to become kind of an interesting opportunity which is how could you get involved in investing in Japanese companies to improve them, turn them around. And it was tough in the early days, but, you know, the the opportunity was to take these companies and reposition them and and get them, you know, running running better and growing again.
Speaker 1:Is that culture of there is potentially an economic geopolitical rival, a threat. I got to go see. Is that alive and well today? Because I feel like my generation was considering that with China. I know a lot of folks that took a couple years of Mandarin.
Speaker 1:I know some folks that went and lived there for a year or two but it feels like the walls kind of closed off and there's less opportunity for the next generation to do that. Do you still see opportunity? Do you hire young folks at Bain that have gone on that journey, or is are we just in a different era?
Speaker 7:No. I think it's still it's still there. You know? I mean, in in the particular case in Japan, I would say it ebbs and flows. But now, like, there there's more urgency, you know, and I think, there's a feeling that there's competition in China and Korea and and actually back to The US with all the the new technologies really being, you know, being started and accelerated here.
Speaker 7:Mhmm. So I think we're seeing a new period of urgency in in Japan. Mhmm. And, you know, it used to be the fact that you couldn't hire the best Japanese talent. They wanted to go to the big companies.
Speaker 7:They actually wanted to go to the government. Mhmm. But now they see western firms and and private equity firms as, okay, these are these are firms that are gonna help reinvigorate Japan and, you know, make it make it great again. I don't wanna create an acronym out of that, but but we're seeing that. And it's pretty it's fascinating having been there twenty years and that was not the case when I was there in the early days.
Speaker 1:How how did the products that you were working on, the strategy that you were working on evolve during that time period? Obviously, there's there's private equity deals broadly but there's so many other strategies within that. I know special situations became a focus. But can you take us through a little bit of the strategy evolution?
Speaker 7:It's kind of interesting because when we got there, our assumptions, because we're a global firm, we'd be working on these big global global businesses.
Speaker 1:Okay.
Speaker 7:But it turned out those were tougher. Know, they had currency exposure. Were competing against, you know, Chinese companies. Mhmm. And so we started focusing on actually the most domestic and therefore the most inefficient yet insulated businesses.
Speaker 7:Because you could control the macro variables and really get in there and run run the businesses better. And I'd say our initial success in the first maybe ten, fifteen deals were very domestic business, restaurants, food businesses, hotels Yeah. Wind farms, company that made mushrooms that, you know,
Speaker 3:the Okay. Yeah.
Speaker 7:Type we all, you know. And, you know, it it then evolved to now we could you know, when we were more accepted, we could take on these bigger technology businesses, more, you know, the crown jewels of Japan. And that's where, you know, Kyokusha, the semiconductor business came, you know, Evident, which is a, you know, a very high-tech business. And so it probably took ten, fifteen years, first of all, for the market opportunity to shift, and maybe for us to be accepted to be able to work with these big global global companies.
Speaker 1:What was the team structure like or split on those types of deals? Was there a clean line between like deal team, operating team? Were you bringing in other executives to run the businesses, actually do the work of turnaround or or transformation once you're working with a target firm?
Speaker 7:Yeah. Yeah. It's a good question. I mean, in Japan, again, going back to two thousand four or '5, there really was not talent. You couldn't go hire a search firm and say, oh, please go grab me one of these operating people and Yeah.
Speaker 7:Least you'll be So we did a lot to internally develop talent. We hired young people. We sent some of them to US to get trained to circulate them back. Yeah. You couldn't find well rounded deal professionals, so we hired people who were great at sourcing.
Speaker 7:Yeah. And they were dedicated in sourcing. We hired operational people and they just did that. Yeah. And over the years, we got them to work together to develop that kinda well rounded person.
Speaker 7:But it was a different model in Japan just based on the talent market. Again, it's it's evolved a bit today and now you see more professionals. But that was probably the hardest part of why it just, you know, took so long.
Speaker 2:How's it been adapting the the your historical approach and skill set and traditional private equity to VC. In PE, can have a business that's extremely challenged, has like, you know, some amazing elements to it or bones, but like, you know, is not realizing its potential, and you can wrangle it and get it back on the right track, get it growing, cut costs, whatever it is. In venture, I would say it's been, you know, the challenge in this industry is like you can have that same situation, but there's such a culture of like letting the founder call the shots and founders today have so much control. And so you're kind of in the situation where you can like make some customer intros, introduce some execs, you can try to give advice, but oftentimes you're like sort of hands off. Has that been Any any sort of like How how's that been?
Speaker 2:Because I imagine you On the venture side, you've gotten to the point where must be like extreme frustration at times where you wanna let the founder lead, but at the same time, the things aren't working the way that that they could be.
Speaker 7:I get frustrated with buyouts as well. So, but listen, I think, you know, we started as a, private equity firm, but actually our our roots were in kinda growth capital. Our first investment was, you know, Staples when it had like five stores. And so we started actually doing control deals but also minority deals, having to work closely with founders. So I kind of feel like the culture of the firm and because we're a little more, you know, organic in nature, entrepreneurial, even, you know, you might say decentralized, we, you know, we're comfortable with different modes as operation as a a firm, would say.
Speaker 7:But listen, at the end of the venture business, it is different. You're you're making investment decisions with much more limited information, oftentimes almost no historical information. You're evaluating, you know, talent and the ability of that talent to make, you know, changes and adapt as as technology changes. You're trying to think through what the future's gonna look like and it's typically not a lot of information from what you might have seen before. And so I think we recognize that it's different and that's why we have people who are great at that and they have their own investment committee process.
Speaker 7:And the way they do sourcing and make investment decisions is is different. And it's different. We have a life sciences business, and by the way, it's very different there. They're all MD, PhDs who are making, you know, judgments on compounds and clinical probabilities that, you know, you don't want me making those decisions. However, the wrapper around all of it is this kind of value added approach.
Speaker 7:Whereas a firm and a platform, yes, we have relationships with big global customers that we can introduce to those venture companies. We know all the, you know, life sciences, the top 15 pharma companies, and so we can bring together those as maybe buyers of biotech companies, but also partners of those companies. We have a lot of you know, we participate in the capital markets, and so venture businesses are gonna need capital or they're gonna go public. And so we can bring that, you know, synergy to bear across all these businesses. So the trick really is to have enough autonomy and trust in the team on the field to operate in the way that that segment operates, to be best in class there, but to bring a platform benefit to it.
Speaker 7:And that's you know, you get that right, it's a very powerful powerful model. But you've gotta be comfortable, you know, letting letting go a little bit.
Speaker 2:How many mistakes, can someone early in their career on the venture side of the business make before, it's not a fit?
Speaker 7:In venture, you can make a a lot of mistakes. It's obviously very important to have a few successes, but that is a business where, you know, it is about a low a much higher loss rate, you know, from a numerical perspective of deals. And what you're looking for there is really asymmetric upside from from a few situations. And, you you don't wanna bring the batting average model to venture.
Speaker 2:Yeah.
Speaker 7:It's not a plugging percentage type of thing. It it is actually something around, you know, triples and home runs and such. And
Speaker 2:But I'm saying a mistake a mistake could be like losing a deal that losing a deal that Mhmm. Could've could've could've should've been done, but
Speaker 1:Could've been a grand slam.
Speaker 5:But it
Speaker 2:so it's it's not just about, you know, your misses. You could have
Speaker 8:Right.
Speaker 2:Nine Yeah. Nine zero So that's not the blind top. But it's
Speaker 8:about Yeah.
Speaker 7:We call those the ones that got away. And listen, we study that in venture as much as we do in private equity
Speaker 1:Yeah.
Speaker 7:Because what you're looking at there, what are our what are our biases, as humans, that cause us to potentially apply too high of a discount rate to certain factors
Speaker 1:Yeah.
Speaker 7:And maybe excessively fall in love with other things that may have worked for us in the past. And so, you know, that's something that's that's the continuous improvement process for the investment business that we engage in a lot. We do a lot of tear downs of our past investments and ones that others do. We have a massive set of competitive intelligence on all the deals that are done, And we shade them, you know, green, yellow, red, which is is that a deal we would have liked to have done? And how did it do?
Speaker 7:And we go and we look at that and our, you know, all our teams do that. And that's how you try to get better at something that inevitably you're gonna make those mistakes.
Speaker 2:There's been a number of businesses formed over the and funded over the last few years that are effectively just private equity firms that are raising like venture capital and getting like venture style that, you know, the teams are getting venture style economics where where where fundamentally they're just set up to buy businesses like a traditional
Speaker 1:Be like
Speaker 2:a hold firm
Speaker 1:or something.
Speaker 2:Have you looked at those opportunities? To me, it seems like an amazing deal for the for the teams because like if you can retain 70% of the economics instead of getting like two and twenty, why would you Mhmm. Why would you not do that? At the same time, from from the investor side, it's like, if if I'm Yeah. Deploying into a a traditional, basically PE transformation strategy, probably would prefer to get the majority of, you know, be be paying two and twenty but not not giving up, the inverse.
Speaker 7:Yeah. You know, listen. I I I generally found that, you know, the the way you structure and and kind of cut up the economics, you know, that's not ultimately the driver of of long term returns through the cycle and through, you know, different different market scenarios. And we've seen a lot of things that seem like they're great in terms of innovative technology around that, but ultimately, there's a there's an alignment piece that, you know, is missing that also they ultimately comes back to to roost. And so listen.
Speaker 7:Our our perspective is we wanna be very closely aligned with our investor base. And we wanna have a similar time horizon. We want them to understand how we generate value and maybe how long it's gonna take to do that. And then once we get there, much we wanna continue to compound versus how much we need to kind of return. We want them to be focused on ultimately performance, not fees.
Speaker 7:And, you know, we're not public and so we're not interested in, you know, maximizing things that may not be in the interest of those of those particular investors. And so, actually, I think the alignment question is critically important there. And there are a lot of skis and way schemes and ways you can kinda whack it up. But but generally, that doesn't lead to a sustainable advantage, from our perspective, but having alignment can be really critical.
Speaker 1:There's been a story that's sort of crossed over from private equity world into the tech community, the venture world, which is bending spoons. And I'm interested in your perspective on roll up strategies in tech and venture. Jordy has asked several previous guests like, will we see an American bending spoons? I'm interested in Yeah. In did you have you gone down roll up roll up lane before?
Speaker 1:What did does does does that model potentially apply in Japan? Or did you did you think about it while you were there? Just some history and context on what's going on with with that. I think Bending Spoons is is is in the news because they're they're acquiring companies that people know. But obviously, that's it's not a brand new strategy.
Speaker 7:No. And I think they're they're pretty interesting. And it's a little bit back to the future because, you know, in the eighties and nineties in The US, there were a lot of fragmented industries. And that was
Speaker 1:Yeah.
Speaker 7:One of the key modes. And we did a bunch of those which were buying a platform and then rolling things up. Then they also, you know, that got a little bit overbought because, you know, you remember these these models where you're slapping these together with the hope of getting multiple appreciation Yeah. But you weren't really improving margins in the business, and it didn't work. So I don't think roll ups are good or bad.
Speaker 1:Sure.
Speaker 7:What I do think is interesting, Betting Spoons and some of the newer firms, is is actually the ways in which they're they're bringing technology and a kind of technology first approach to how they're sourcing and how they're driving value. Yeah. And I do believe that is the future and that is a model that we should be focused on because, you know, we our history is all about transforming companies. We've had a very deep, you know, value creation orientation. We have a whole big dedicated team of, you know, almost 400 people that get in there and drive change at companies.
Speaker 7:And the ability to use, to apply AI to each step of that process to really turbocharge what we're doing, that will be the that'll be the future. And some of the aspects of Betting Spoons is doing, you know, is is I think pretty interesting there. And so we're looking closely at kinda newer firms, pure play firms that are able to do that. They're able to take, you know, kind of a technology first approach to what they're doing because that's, you know, that's a huge opportunity for us.
Speaker 1:How much of your time or the firm's time is focused on sort of like understanding the broader economic picture? A lot of in the venture world, you can sort of tune out interest rates, but it is on the cover of The Wall Street Journal, first Fed rate hike in three years. Yeah. How how much time is the is the broader team spending thinking about macroeconomics? How does that flow to the various teams?
Speaker 1:And what what actually what skill sets, what people do you need internally to actually make sense of the world reliably on an ongoing basis?
Speaker 7:Yeah. So, you know, for us, it's been a journey because we've always thought of ourselves as like the micro guys. You know, we're gonna focus on the things we can control at the company level or a management team. But we increasingly became aware, and the global financial crisis was the first, I'd say, wake up call around this, that macro factors, secular thematics, changes in in the structure of the market can be big, big drivers of outcomes. And that you kinda need a different skill and capability to be able to analyze that.
Speaker 7:You know, we all kinda thought of ourselves as though we can we can understand that. But, you know, the data itself, you need some expertise to really be able to understand, the signals from the noise. There's a lot of intelligence that can be gathered from from even just our portfolio. We have 600 businesses across the economy. We're in credit.
Speaker 7:We're in venture. We're in life sciences. We're in private equity. And so if we can get real time information faster than our competitors, faster than the market, and drive interventions, that can be a huge advantage, particularly in this world of of heightened volatility. You know, if you can see inflationary trends building up in your labor base or in your material base faster than your competition, that can be a huge competitive weapon.
Speaker 7:So we set up a whole separate macroeconomic team, dedicated people, you know, PhD backgrounds, those who also have a lot of connectivity to other sources of expertise, whether it's on the energy and oil markets or whether it's on housing. And they come up with their own independent view. We don't have our each of our deal teams go and come up with their scenarios for The US economy. They come up with that. Mhmm.
Speaker 7:And then the deal teams are focused on taking that and applying it down to the sector and the company and seeing, okay, what were the implications for that? But centralizing this, getting much more expertise, getting better data, that's been, you know, the focus to try to try to stay ahead with the volatility of the world today.
Speaker 1:Yeah. That makes a lot of sense. Jordan, anything else?
Speaker 3:Not for now.
Speaker 2:Well, we're gonna hop on
Speaker 1:with Max from Legora. Thank you so much for hopping on the show. Congratulations on the progress obviously. To you soon. Have a good one.
Speaker 1:Cheers. Bye bye. Let me tell you about MongoDB. What's fueling faster than the AI market? Your business on MongoDB.
Speaker 1:Don't just build AI, own the data platform that powers it. And we have Max Junestrand from Legora. Come back to the show. How are you doing? Boom.
Speaker 1:Good to see you.
Speaker 2:Hey, John. Hey, Jordan.
Speaker 4:We're
Speaker 2:great. Yes. How are
Speaker 1:It seems like you're great. Partnered with Salesforce, but you didn't
Speaker 4:That's right.
Speaker 1:Have to stand up and shake Mark Benioff's hand.
Speaker 2:Must really like you.
Speaker 1:Yeah. He must really like you.
Speaker 5:I'm I'm not one to get, you know, frame mugged. And most people go most people go to Dreamforce to buy Salesforce. We went the other way around. We went there to sell the Salesforce.
Speaker 1:Okay. That's good. Yeah. What is the structure of the deal? What are you gonna be helping with them with?
Speaker 1:Like, what did it take to get them across the finish line?
Speaker 5:The legal and the compliance team are embedding AI into every way they work. Right? They're big cloud customers, but Yes. Cloud only gets you so far. We're helping them go all the way.
Speaker 5:And what's interesting with all of the asset based enterprises is most of them have tried many legal AI tools before Mhmm. And they haven't received the success that they wanted, and now they're moving over to Liguah.
Speaker 1:Mhmm. It feels like the models are you know, you're constantly in the back and forth between the frontier is the best, then open source catches up. The frontier is the best, and then the the the companies that are building on top of models and building and building fine tuned models and and specific workflows, that's gonna give you a big lift. And then somebody's like, oh, the next model will just one shot it. Have you lived through enough of these cycles now that I imagine you philosophy here.
Speaker 1:What what's your philosophy?
Speaker 5:When I started the company back in 2023, it was very easy. It was one model, GPT 3.5. And we built every single functionality in the Gora as a boat, and when the tide rises, everything improves.
Speaker 1:Okay.
Speaker 5:And that continues to be the case. Okay. And what's interesting now compared to three years ago is that different models are good at different things. So if you break down legal work, there's so many skills you have to be good at. It's drafting.
Speaker 5:It's reviewing. It's fact checking. It's legal research. And so under the hood, what we end up doing is we use all the models.
Speaker 6:Mhmm.
Speaker 5:The new meta models, the new Grok models, they're awesome.
Speaker 9:Interesting.
Speaker 5:But we also continue using the Frontier from Anthropic and OpenAI. And so what's interesting to us is where do you apply which model? And that's the IP that we have gotten really good at. And the reality is when you operate a a a vertical AI company, you need to make sure that you are getting the benefit from all of the r and d dollars that are getting spent in the entire marketplace. Right?
Speaker 5:Yeah. Yeah. If you were to take a very opinionated view and say, let's fine tune a model to get, you know, 1% increase boost today, that entire asset is going to depreciate over time. And you're basically making your customers pay for a model that won't stand the test of time.
Speaker 2:Yeah. Yeah. That's fascinating.
Speaker 1:How do you oh, with with the the the rising tide lifts the boats, you get the new capabilities. At the same time, there's probably old workflows that you built on top of GPT 3.5 that can now be run very, very cheaply. What is your strategy for cost optimization? Is it just like you go to open router and you you pick a cheap thing? Or are you racking servers So so doing your own We we build
Speaker 5:our own router. I think that's a super important part of the stack. Okay. And over over the last weekend, we actually drove a 30 percentage point decrease in our overall LLM spend across the entire platform.
Speaker 1:Wow.
Speaker 5:Which then becomes lost more yeah.
Speaker 1:It was
Speaker 5:a weekend project for the engineers in Stockholm. We run on Celsius and snooze. Amazing. I met I met the Celsius founder, and I was like, hey, man. Our engineering team runs on this shit, and he just sent us a fridge.
Speaker 5:Like, I love the guy.
Speaker 1:That's amazing.
Speaker 5:You know, the team is in in total blutsmock, and that means you know, I I did an article in Swedish, and for some reason, they translated it to English. And so the headline became, the Liguora team wakes up with a metallic taste of blood in their mouth. And that is the is the status of the company right now. You you see my my decoration here. Yeah.
Speaker 5:We are in this total, you know, land grab. Everything is happening all at once. Mhmm. You're seeing innovation across the entire stack. Mhmm.
Speaker 5:We have acquired five companies this year, and it's been fun to
Speaker 1:Founder mode.
Speaker 5:Real founder mode. Yeah. It's been fun to go deeper in the stack because in litigation, in transactional work, in legal research, it's sort of easy to do something on the shallow. And frankly, that was what we were doing back in 2023. Mhmm.
Speaker 5:But now we can go so much deeper, and I think that that's also the places where the the models don't matter so much. We're actually building much more normal software than we are building LLMs, frankly. They're just the electricity that powers the house.
Speaker 2:Yeah. So I wanna talk about diffusion specifically. I have a portfolio company that's in the middle of a transaction, and I know how good Ligure has gotten. I feel like a lot of this work that's been done could have been done in like probably a week if Yep. Like people were really focused.
Speaker 2:But sometimes companies for whatever reasons, like they wanna drag something out, like it could be beneficial to one to one side for one reason or another. So like what are the actual factors at play right now? I really wanna understand like have lawyer are lawyers like internally, like software engineers, they might have historically planned for a five week sprint on a certain product or feature, and now they're saying, like, let's ship it in a weekend or let's ship it Yeah. In a week. Are lawyers specifically in house?
Speaker 2:Like, they thinking that way now? When are they not thinking that way just for kind of structural reasons?
Speaker 5:In house is absolutely thinking that way, and and so are law firms. Right? Like, AI is an existential opportunity and a threat to the current operating model. I was with a law firm here in New York last week, and one of their partners explained how the work that he typically does, he does in one thirtieth of the time with no dependencies on associates. Wow.
Speaker 5:That's his practice. Right? And so he has to figure out how do I now charge for this because working with a billable hour in his practice doesn't make sense. Yeah. And at the same time, the biggest opportunity is perhaps an in house where organizations like Salesforce, Palo Alto Network, etcetera, are bringing in these tools in house to do more legal work.
Speaker 5:Mhmm. And what's interesting about legal work is that the demand is effectively infinite. If you could have legal intelligence review every contract, handle every claim, you know, fight every litigation, file every patent, like, you would. Right? And, you know, from an investment perspective, why not do a legal due diligence before you take an asset to IC?
Speaker 5:The reason you don't do it today is because it's inexpensive.
Speaker 2:How are you thinking about this how are you thinking about this arms race? Because you have on one hand, it's like cheaper than ever to litigate something, but it's potentially cheaper to defend.
Speaker 1:Yeah. Yeah.
Speaker 2:And and so on. And and It's cheaper.
Speaker 1:It should be a lot more likely. Yeah. Well, but
Speaker 2:at the same time, it's if it's cheaper to defend, maybe a company is less likely to settle early so there's less reward. Like, there's a bunch of these different
Speaker 1:jury trials. Right?
Speaker 5:Yeah. Every like, every judiciary is overflown by employee claims. And, you know, people are using Judge TBT to, you know, figure this out themselves, and the companies are needing better tools to defend themselves at scale. We work with some of the largest insurance companies in the world on settling litigation claims. Right?
Speaker 5:And it's so interesting. Like airlines, we work with Air Canada. They are spending so much money in litigation claims with customers, etcetera. And I think, you know, if
Speaker 2:To try to change the name
Speaker 5:or something. Develop bioweapons with AI, like, good news. We can also develop cures. Right? Like Yeah.
Speaker 5:It's sort of everything will just move faster. And I think operating in that world, what's so interesting about being, like, this full AI native characteristic of a company is you can do that across every single part of the business. And your operating model just has to be what a traditional software company did in a year, we have to do in a quarter. Right? Like, four times this year, we have leveled up our end year post for our revenue targets.
Speaker 1:Mhmm.
Speaker 5:And now we are quintupling this year. Like, we are setting targets that by traditional software standards would have been deemed, you know, gravity defying and insane.
Speaker 1:Yeah. Talk a little bit more about the m and a strategy. I feel like from your seat, I could imagine everything from like acquiring a small law firm in a niche area.
Speaker 5:No. No. No.
Speaker 4:No. No.
Speaker 5:Are not a law firm.
Speaker 1:You're not going to be a law firm. We're not a law firm. Okay. So are you acquiring other other application layer companies Yes. Or teams that are can are deeply in, like, the AI research?
Speaker 1:Or you're are you going to acquire a Neo Cloud? Like like like, how how how narrow is your lens when you're looking for acquisitions?
Speaker 5:Yeah. Well, first off, we have a big part of our EPD team in Stockholm and in Europe. And what's so amazing about that is I think we're the number one employer in a in in our jurisdiction. Right? Like, we get our sort of top top of the top of the mountain.
Speaker 5:Like, we get the cream of the top. All the best engineers wanna come work here. That's Legal tech is really hard to break into Sure. From a trust and commercial perspective.
Speaker 1:Yep. That makes sense.
Speaker 2:But there
Speaker 5:are a lot of very technically talented teams Mhmm. Who are working in this space.
Speaker 1:Yeah.
Speaker 5:And so at Liguora, we have what we call our fruit salad product strategy. Mhmm. When alternatives are offering apples to apples, we are offering the apple, bananas, oranges, and fucking kiwi fruit, and
Speaker 8:we wanna
Speaker 5:have all of the functionality in one single space. And what's so awesome about that for the lawyer is that they don't wanna navigate 10 different apps.
Speaker 1:Yeah.
Speaker 5:They wanna have Word, Outlook, this document management system, and Legora.
Speaker 1:And Legora.
Speaker 5:And when all of the functionality gets sucked into one single place, the barrier to entry gets lower. Yeah. We're seeing this in a lot of the customers who are moving over to Legora from other legal AI platforms that they might have adoption, but they have very shallow adoption. They haven't gotten sort of sort of second and third levels deeper where they're going, let's not just use this as an expensive chatbot. Let's really think about how it's going to transform either our practice or the way that we operate in house.
Speaker 1:Well, congratulations on
Speaker 2:the Just very curious. Right now, if somebody like, people are using just regular consumer chat apps as for for legal counsel. I don't believe that that gives them sort of attorney client privilege. Yep. Do you think that will be solved?
Speaker 2:Like, will someone be able to make a, you know, consumer, you know, application that that allows them to have that experience
Speaker 5:question. That's a very interesting question. The good thing is there are attorneys and lawyers and judges much smarter than me who are going to determine whether or not that's that's the case. There's going to be litigation around that, of course. And we just get to play around in that space.
Speaker 5:And I see Chase is about to come on here after me. To give you one Bain story, and he can he can fulfill the second half of it, I met Chase at a dinner in Paris with Chase, our partner from Benchmark. Yeah. Very late in the evening, Enrique from Bain calls and he's like, hey, I'm gonna crash your dinner. And we get into this stratospheric wine competition between Bain Capital and Benchmark.
Speaker 5:And I'll let Chase finish the rest
Speaker 1:That's of the the best glasses land ever.
Speaker 2:That's hilarious. Stratospheric wine off. Wine off. Going glass
Speaker 5:bottle That's got for a stratospheric wine that that line was from one of our French attorney customers. He said that that was the best dinner he ever attended.
Speaker 1:That's fantastic. Well, thanks. Well, we
Speaker 2:love we love you, Max. It's always always Always
Speaker 1:a great time. Come back soon. We'll talk
Speaker 2:to later.
Speaker 1:Thank you, Dom.
Speaker 2:See you later. And
Speaker 1:we won't wanna keep Chase waiting, so let's bring in Chase Lochmiller from Crusoe as soon as possible. We gotta get the other side of the story. This dinner in Paris, we just heard about it from Max with Ligure. Was the wine as good as they say?
Speaker 6:It was the wine was flowing that night.
Speaker 1:Okay. That's great.
Speaker 6:A significant amount of wine and I didn't see the prices but I Okay. Think they were they were not cheap.
Speaker 2:They're atmospheric.
Speaker 1:What about the electricity? Is the electricity flowing? Is the is is the yeah. Yeah. Are the chips flowing?
Speaker 1:How is progress in building out the compute capacity that people need?
Speaker 6:Yeah. The electrons are flowing and they're turning into tokens and helping helping accelerate this new era of AI abundance. Yeah. I mean, look, I think, you know, as as demand for AI infrastructure has grown and demand for power has grown, you know, that there's been a significant amount of investment in real world, you know, power production capabilities and and facilities that are are becoming, you know, real significant bottlenecks towards towards this build out. Yeah.
Speaker 6:And so, you know, each incremental gigawatt is getting increasingly more challenging. Yeah. Now, you know, the positive side is, you know, that I think a lot of the investments and the foresight that we had at Crusoe are, you know, paying dividends today. And if we look at, you know, all of the progress that's been made in, you know, the campus in Abilene, Texas, like
Speaker 1:Yeah.
Speaker 6:You know, our our philosophy in sort of designing and building that campus was, you know, how do we build a gigawatt scale computer? How do we build a single facility that can act as one giant coherent cluster that can that can train the next breakthrough foundational model that will lead to lead to a step function improvement in the model capabilities.
Speaker 1:Yeah.
Speaker 6:That was like the that was the north star when we developed the campus and designed it. Today, we're seeing the fruits of those labor. Yeah.
Speaker 2:And you had to go through what it was there was like a six month period where it felt like there was a different article every single day about star if somebody sneezed at in Appling, there was somebody in never gonna Sneeze causes one second delay.
Speaker 1:One second delay. Yeah.
Speaker 2:But it feels like you guys have gotten through that and I haven't I haven't seen a a front page article about some minute detail of the process in a while.
Speaker 6:No. But you know, what I was gonna say is, you know, the benefits of that is, you know, the first two buildings which were the initial contract that, you know, we did with Oracle and OpenAI have led to the training of Astra.
Speaker 1:Yeah.
Speaker 6:Yeah. Yeah. So I don't know if you've had a chance to play around with, but, know, it's it's a it's a really Yeah. Phenomenal
Speaker 1:Yeah. It's super partners. Yeah. Yeah. And Jensen had some nice words about it too.
Speaker 6:Yeah. And the next the next phases are coming online with, you know, buildings three to eight, which, know, is gonna basically quadruple the compute capacity. You know, three to six are already online and seven and eight will be coming online before year end.
Speaker 9:And Yeah.
Speaker 6:You know, having having that full eight building compute capacity to train, you know, the next version, you know, the next incremental improvement model.
Speaker 1:Yeah.
Speaker 6:I think we'll see step function improvement and capabilities.
Speaker 1:You started the company in 2018 going on almost a decade in business. Can you give me a sense of the progress from like the smallest project, the first project? How small was it in terms of megawatts and where we are now in terms of scale? Because I feel like that that has been the biggest transition is that you you started with pretty small projects and now you're working on the biggest projects in the world.
Speaker 6:Sure. So, you know, the the the philosophy of the business, you know, from day one was taking this energy first approach to computing. Yeah. You know, we named the company Crusoe after the character Robinson Crusoe who was stranded on the desert island and had to be innovative with his resources, you know, in a stranded environment. And, you know, we try to channel that same sense of innovation applied towards stranded energy and unlock stranded energy unlocking value in stranded energy with computing.
Speaker 6:And so that led us to, you know, unique energy resources to power compute in early days, and we were actually working on, you know, generating our own power with flared otherwise flared natural gas. We're we're capturing this waste methane, utilizing it to produce power, and then powering these mobile and modular data centers. Our first use case was was Bitcoin mining. Yeah. But, know, we we sort of even at that founding of the company, we had this ambition to build an AI cloud platform, which today is, you know, where where where where Crusoe's at is this vertically integrated energy first AI AI platform.
Speaker 6:So the early days, it was roughly 250 kilowatts was the first Wow. Block that we did, which was actually pretty big. Yeah. First AI data center, we're actually putting up in like a Crusoe Spark Museum Yeah. That we're building.
Speaker 6:And it was like you can kind of
Speaker 4:think of
Speaker 6:it as like a single individual rack. Yeah. I think it could power up to up to 25 kilowatts. Okay. So it was like higher density, you know, for that era.
Speaker 6:And, you know, we've since sort of evolved our platform quite a bit to, you know, gigawatt scale campuses at one end of the spectrum. And, you know, we made, you know, we we've made an announcement or, you know, quite a few announcements around the Crusoe Spark product, which we believe is sort of the critical aspect to to to really scaling inference compute infrastructure as demand for token scales. You don't need a gigawatt scale computer. You need lots of smaller clusters of compute to rapidly serve inference infrastructure and really dramatically reduce that that time to token.
Speaker 1:Yep.
Speaker 6:And Spark gives us a ton of flexibility in terms of how we deploy inference infrastructure Mhmm. Where it goes. And then also just from a time to token, it really provides us a lot of just in time solutions
Speaker 1:Sure.
Speaker 6:For delivering AI infrastructure for, the innovators in the world.
Speaker 1:It seems like solar deployments keep beating expectations. We've seen this chart of the predictions of where solar will go, and then the graph keeps going up and to the right. Where are you seeing exciting movement in new energy coming online that might be suitable for that type of product, the Crusoe Spark, smaller amounts of energy required but unlocking new opportunities in in different locations?
Speaker 6:Well, you know, solar is definitely like a very compelling use case. You know, we with our partners, Redwood Materials, built the largest microgrid in The United States that was solar plus batteries. And the batteries were actually taken out of mostly taken out of electric vehicles. So sort of a second life use of these lithium ion batteries. And, you know, that that AI those AI factories are powered 99% plus just by the sun, which is a pretty cool use case.
Speaker 6:That's cool. You know, there's a lot of new energy technologies we're focused on, you know, helping catalyze and accelerate. You know, we had a big announcement with Ollo to bring it to life the first SMR powered AI factory, which we're planning to go live with by mid twenty twenty seven. But, you know, what's unique about Spark is, you know, given the small modular form factor, there's so many different you know, there's so many unique ways you can power it. It can you know, you can power it with, like, small gas generation, things like RECIPs and, you know, smaller gas turbines like aeroderivatives.
Speaker 6:You can also power it just in in you with with with grid power. And, you know, there's a lot of while getting a gigawatt of power from the grid in a single location is quite challenging right now. There's a lot of places where smaller pockets of capacity are available. You know, think whatever 10 to, you know, a 100 megawatts that can be ex accessed, like, way sooner because of, you know, transmission and distribution constraints that are that are happening in the grid. And, like, plugging into one node may actually help create quite a bit of balance in terms of, you know, the the the load balancing that the utility operators are are needing to do.
Speaker 6:And so, you know, it can actually help benefit the grid quite a bit because you're actually amortizing more megawatts Mhmm. Over the same transmission and distribution infrastructure, which should actually bring down the cost for all local ratepayers. You know. And, you know, we think that's an exciting proposition because you're shifting all of the work off-site and you're able to plug into a lot of these unique energy energy Yeah. Available energy on on the grid.
Speaker 6:Yeah.
Speaker 1:Yeah. That makes a lot of sense.
Speaker 2:Talk about the the new round.
Speaker 1:Yeah. You raised some more money.
Speaker 6:We did. So today, we announced the closing of the series f at Crusoe.
Speaker 2:You came in. Saw some heavy hitters. Oh, yeah.
Speaker 6:Yeah. Never gets old. The, you know, the the series f round of funding was co led by Aaref, Valor Equity Partners, and Mubadala. Yeah. And we had, you know, a number of, you know, a a number of great supporting investors alongside it, folks like TPG, QIA, Founders Fund, Radical Ventures.
Speaker 6:You know, it was a was a it was a great, great list. GIC was another great partner. So, you know, there were there were a number of great investors and, you know, we're really thrilled to have the support from, you know, a number of leading, you know, long onlys growth investors and and venture investors.
Speaker 1:Yeah. That's amazing.
Speaker 2:Long onlys.
Speaker 1:It's the only type of investor I like.
Speaker 2:Yep. Thank you so much. Great great to see you, Chase.
Speaker 1:Have a great rest of your day. Progress. We'll talk to you soon.
Speaker 2:Talk soon.
Speaker 1:Goodbye. Let me tell you about Shopify. Shopify is the commerce platform that grows with your business, lets you sell in seconds on online, in store, on mobile, on social, on marketplaces. And now with the ad agents. Up next, we have Justin Zhang from Decagon coming next.
Speaker 1:He's back. Welcome to the show. Welcome back. How are you doing?
Speaker 2:It's been too long.
Speaker 9:Good. Good. Yeah. It's good to see you guys again.
Speaker 1:Where are you in the world? You're expanding internationally. Are you in America? Sao Paulo? Brazil?
Speaker 9:I'm in Sao Paulo this week.
Speaker 1:You are.
Speaker 5:So Oh, yeah.
Speaker 1:You're actually there.
Speaker 9:Over here. Okay. We're we're out here launching our, LATAM office. So we're we're starting an office here in Sao Paulo. Okay.
Speaker 9:Got a couple customers down here already like, MercadoLibre. So we really felt like things are moving pretty quickly, so we've got a team out here now.
Speaker 1:What is the key what seats do you wanna fill in that office? I mean, obviously, you need, you know, the general staff, but is it about sales reps, forward deployed engineers? Like, what what problems does it help to have boots on the ground effectively in the local community?
Speaker 9:Yeah. It's mostly go to market. Think, obviously, there's there's language considerations. Right? So anytime you go to different markets, like, it's both the product.
Speaker 9:Right? So we we deploy these voice agents, so the voice has to be really good at Sure. You know, Brazilian and Portuguese, but also our go to market teams are have to be on the ground and, you being in people's offices and so on. So it's it's mostly just the go to market teams.
Speaker 2:Yeah. What's happening with diffusion every time I have to be on a customer support line and I don't have I'm not speaking to an an effortless, you know, agent that has all the capabilities that I would expect that I know are available, I get a little bit angry at you and the other players in the space because like why can't you move faster? It's like I just know I know the technology is here. Why do I need to sit on another phone tree and and you know, like they that doesn't even do Yeah. Just wanna talk and I just feel like being able to effectively prompt to the outcome that you want is like so clearly here.
Speaker 2:And and still it's like so many of these things are like, what's your what's your address? What's this? You know, all this stuff. It's like, enough.
Speaker 9:We're trying. I'm trying our best. I mean, I I can tell you like, what is the long pole in the tent? It's Roughly the analogy we like to give is like us delivering an agent is a little bit like building a self driving car where the car is now smart, right? The models are really good.
Speaker 9:You guys have used the models. Yeah. The brains of the car are good so it knows how to drive. But when you arrive in one of these big, let's say, airlines or banks or healthcare providers, the map of the surrounding area is not drawn out yet. And so drawing the map is usually the hard part.
Speaker 9:It's like you someone has to make the jump between, you know, the the car being good but then actually, like, drawing the map and figuring out where to go. So a lot of the time that we spend in these deployments is really making sure the map can be drawn out well and then improved upon over time. And our job hopefully is to shrink that time over, you know, more and more deployments and so that in the future, you know, every every single time you call, there will be a good AI agent there that that can talk Please. To
Speaker 1:How do you think about how do you assess opportunities internationally? I I would love just like lay the land of like the the core business, why you thought it was the right time to expand internationally. And then imagine that there's a at least a spreadsheet or some some prompt that you that you ran through, some analysis that you did to land on Brazil. But what is your actual process for evaluating a new market to expand into?
Speaker 9:Yeah. Mean, international expansion is not like a novel thing. Right? So tons of companies have gone through it. We've been able to learn from, you know, what other people do and usually most of the traction comes from, you know, a small handful of countries.
Speaker 9:Okay. When we first started the company, we were mostly serving like the upper mid market y, like tech native companies and so that's where we started. And then our first order of business was, hey. We actually do think that we can you know, our approach to to launch a product will work in the big enterprise. And so that was that was a lot of the big focus in the first year and a half.
Speaker 9:And so, you know, now we've announced, you know, a lot of big banks, you know, Deutsche Telekom Sure. American Airlines, Delta Airlines. So a lot of these big customers. And from there, we're thinking, Where what's the next frontier? Probably is international.
Speaker 9:Mhmm. Europe was the first sort of pillar for us where we we launched the London office and we have customers in Germany and Yeah. In The UK and so on. And then from there, we were just thinking, okay. Well, the the two options for us honestly ended up being Australia and Brazil.
Speaker 9:Mhmm. And it's kind of a mix of how quickly are people adopting tech, what's the size of the market.
Speaker 1:Mhmm.
Speaker 9:Can we actually serve those customers? And we decided yes. So now we have, you know, a small pod in Australia and now launching in Brazil. And I think for now, that that is, like, a pretty good spread for us. But, you know, in the future, we'll we'll probably look for, you know, what is the next frontier.
Speaker 1:Is there an element where customer pull is really important? Like, MercadoLibre has a bunch of employees in The United States. You probably meet them at conferences. The conversation can start before you even open the office. It sounds like you already have a contract in place, but you're just seeing pull from a certain big enterprise and anchor client and then that can justify going bigger.
Speaker 9:Yeah. Yeah. I think that that is pretty correct. Right? It's like, okay, let's just get a feel for the pull first before deploy a bunch of resources.
Speaker 9:The same happened in Europe with DTE where, you know, we kind of originally started working with them when we just had a team here in The US but then over time we realized, oh, wow, people are moving pretty quickly. We need to be on the ground. And so that's that's what prompted us building a team out there.
Speaker 1:Yeah. What what are you what are you tracking? What how closely do you track the progress of the models versus the cost in the Pareto curve of the models? Are token costs falling fast enough? Is roughly perfectly on trend from what you've modeled?
Speaker 1:Is it faster? What can you tell us about cost optimization once you get a system that's superhuman or at high quality? I imagine that you're not just upgrading to the latest frontier model and just adding cost because some of the some of the models when they come out, they're better, but they're more expensive.
Speaker 9:Yeah. There's there's kind of two dimensions there. So on the cost side, typically, what you do is you first get your product working. And then once it's working, you realize that most of the model calls you do don't need the entire model because the model does a ton of stuff. Right?
Speaker 9:Yep. So you don't need it to compute math for you, for example. And so then the intuition is like, okay, well over
Speaker 1:time I should personally I like to throw a Millennium Prize problem at a customer service agent every once in while just to see if there's a shot. Yeah. It would be tough. But, yes, I understand.
Speaker 9:Yeah. And so, yeah. So over time, you want to shrink the models and then you then it's more of a question of like, okay, is that possible? Can you take a smaller model and fine tune and post train it to Yeah. Perform at the same level?
Speaker 9:Mhmm. And so far, I would say in our use case, the answer has been yes. Mhmm. Right? There's a lot of these small tasks that are done inside the brain of the agent, like Yeah.
Speaker 9:You're choosing a topic or detecting for hallucinations or whatever. And so you can do small models and specifically open source models to do those. Mhmm. But when you're when you're launching new products and kind of trying new capabilities, of course, the frontier makes sense. And so those those two go hand in hand.
Speaker 9:Yeah. And then for us, latency also matters a lot. So we we talk a lot about how, you know, you have to not just optimize cost, like, optimize latency matters even more to us probably. And so, you know, when we've done these Yeah. Optimizations, we're mostly seeing if we can get the latency down.
Speaker 9:Because if you're talking to a voice agent, it has to be super snappy. Yeah. And, you know, those those two go hand in hand as well.
Speaker 1:And is that the model or the chipset or both? I I imagine that we're not quite in the age of colocation or, like, edge computing, but it feels like that's coming as well as a as a small hundred millisecond savings potentially.
Speaker 9:It's mostly the model. Mostly most of the gains come from, you know, the model smaller. Yeah. Okay. Eventually, if the model's like so optimized, you could start looking at some of the other things, but
Speaker 1:Yeah. You know, smaller. Small, then you bake it on the silicon, then you put that silicon right in the in the city where the customer service is happening, something like that on the edge. And then you're Sure. Yeah.
Speaker 1:Two milliseconds or something maybe. I don't know. Yeah. Very exciting though. Thank you so much for hopping on the show.
Speaker 2:Great progress.
Speaker 1:Great progress.
Speaker 3:Great to see
Speaker 9:Thanks for having Talk
Speaker 1:to you soon.
Speaker 2:See you,
Speaker 1:Jesse. Enjoy Brazil. Let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agents to deploy web app service databases more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 1:Up next, we're the founder and CEO of Beacon and the VP of AI research at Beacon. Nate and Nilam and Leonard, welcome to the show. How are
Speaker 2:guys doing? What's going on?
Speaker 7:Hey, guys.
Speaker 1:Good to
Speaker 10:see you.
Speaker 1:Welcome back.
Speaker 2:What's happening?
Speaker 1:I would love for you to start with just a reintroduction on the strategy for the company, for the firm, and and sort of how it's been going since we last talked, think, a year ago. Yeah.
Speaker 11:Yeah. Yeah. That's right. Yeah. So just a reminder, Beacon is a holding company.
Speaker 11:We acquired great technology companies that have been around for decades that already serve real economy businesses. Think campgrounds to labor unions to youth sports leagues. We take we take those businesses, pump them through our software factory, and then make them AI native. The whole goal is to make the real economy as AI native as quickly as possible. And the last time we talked, I spent time talking to you about our acquisition machine.
Speaker 11:Yeah. At that time, you know, we were acquiring a business every three weeks or so. Today, we're closing on a new business every ten days. Woah. And today, really, I'm excited to talk to you about our most important acquisition, I think, in Beacon's history, partnering with Leonard and the Hayes Labs team.
Speaker 1:Yeah. Yeah. Leonard, give us a little bit of your background, what you built, and why you're excited to join.
Speaker 10:Totally. Totally. I don't know about most important acquisition today, but it's certainly an exciting acquisition for both sides, and hopefully, we can bring a bunch of the Haze technology and talents to the rest of Beacon's existing portfolio. So a bit of background on myself. I'm Leonard, cofounder and CEO here at Hayes Labs.
Speaker 10:Hayes was an AI safety company founded out of my research over the last five, six years where we focus on red teaming, guardrails observability, and evals both for the Frontier Labs including OpenAI and Nathropic who are our first customers actually, but also for large enterprises. Think big banks, Fortune five hundreds, insurance companies, healthcare companies and so on. What we
Speaker 2:So realized safety solved? Is jobs finished? We can we can move on to
Speaker 1:You're like, I'm going go to
Speaker 2:work on real economy in the campground. Sports. Yeah.
Speaker 4:Okay. Well,
Speaker 10:safe safety is always an ongoing challenge. Sure. I think as capabilities advance, you know, you always have to play catch up in some way, even though your normative declarations of what AI should and should not do can be set in stone. Mhmm. The way in which you operationalize the definition of what it means to be safe or not safe changes as the capabilities advance.
Speaker 10:Mhmm. And insofar as joining Beacon goes, I think bringing AI to the real economy is a unequivocally good thing and responsible thing to do if you're an AI technologist, but also from the perspective of the alignment conversation debate we've been having over the last couple of days. One thing we thought a lot about at Hayes is whose values should AI models actually be aligned to, and you can take the perspective if you're Anthropic or OpenAI that you have the best control and that you have the best wisdom around what the values what values should be baked into the models, but it is our sense as Hayes and Beacon that we should try and make contact with reality, in particular those that have been historically undeserved by Silicon Valley technologists like businesses in the real economy, in order to align our values to those businesses and the values of their customers. And that's part of what gets super amped to join the Beacon team.
Speaker 1:Very cool.
Speaker 2:Yeah. Just to give you
Speaker 11:guys, just to add to that a little
Speaker 1:bit on the on
Speaker 11:the safety conversation. Everyone to everyone knows the real economy is behind on AI adoption. There's many reasons for that. Yeah. You know, the ramp data from about a quarter ago showed that SMBs are only 20% adopting AI versus, like, 85% for the Fortune 500.
Speaker 11:Yeah. We started Beacon to address that gap, but but really Leonard and team are gonna play a key role in that. The reason why adoption is so low in SMBs, some of it's a question of access, but really as we as we spend time with our 22,000 customers, it's a question of trust first and foremost. We the real economy will not adopt AI if they think it's gonna run rampant and screw up a bunch of their own relationships with their customers. So Leonard and his team, part of why we wanted to bring them in and why Leonard's leading this important function for us is so that we can ensure for our end customers that when they deploy AI through one of our pieces of software, it says it's done in, you know, the safest way possible.
Speaker 10:Yeah. Yeah. Ground? Yeah. Just to like to say that Deacon has the trust in the customer relationships already.
Speaker 10:I mean, these businesses the real economy in the world depends on these businesses. I like to say that Hayes builds AI that anybody can depend on. So now you've got both parts of the equation. You've got AI the business can depend on, and the real world is depending on the businesses depending on this AI. So I think it's a very natural natural fit.
Speaker 2:Ground ground this for me. What are where where has AI been most useful in something like campground operations since I know Yeah. You guys have acquired some campgrounds. And it's so it's so funny that it it still is so funny to me that, you know, as you guys get bigger, there's definitely gonna be some articles of like this AI company is taking over youth sports leagues and campgrounds. I'm very excited about it.
Speaker 2:We we were just on we were just on with Jesse, and I was telling him I'm frustrated I still will end up on a customer service call for some service Yeah. And I'm on some legacy system that has no AI at all. It doesn't have any ability to reason or help me get things done. I can imagine a lot of use cases that that like in the campgrounds context.
Speaker 1:In the
Speaker 2:future, you don't have to go to the campground. You just it generates your Perfect simulation.
Speaker 1:Campground, you're done.
Speaker 11:A 100%. And then you're just sitting there. No. That's a great great point. Look.
Speaker 11:We are believers in AI abundance. The thing that's exciting, especially for the real economy, is we can help them solve problems that before they were not able to solve. So on the campground side, if you put yourself in the shoes of one of the 18,000 private campground owners across North America, you're spending 40% of your days doing payroll, HR, budget compliance tasks, using a spreadsheet to figure out which camper needs to be assigned to which spot in the campground. Sure. Today, we have built tools within the software they already use
Speaker 1:Mhmm.
Speaker 11:To match guests to to campground spots, to do dynamic pricing, to make sure that they're pricing appropriately for season, to load balance staffing for when campers are actually gonna be there. So that is, you know, as to use a term letter, just use unequivocally good for the campground owner. But also, we think that's how AI abundance actually translates into the real economy. It's how do we unlock more growth for the real business. You know, one one thing that people always ask me, okay.
Speaker 11:Are you you guys are just gonna use AI to to take costs out or reduce headcount. Across all of our businesses, we're actually up headcount. So we found the opposite as we've delivered more AI, our customers yeah.
Speaker 1:Yeah. There's been a bunch of reporting on this in The Economist and The Wall Street Journal about, like, the AI actually driving increased hiring as growth comes in, which is
Speaker 2:do you guys imagine, you know, doesn't feel like now is the right moment, but five years from now, like, know, robotics being a big part of the the strategy, you'll have all these existing businesses. And as different form factors get better, you'll be pretty primed to to bring in these new form factors?
Speaker 1:Yeah. I'll start
Speaker 10:part of it. Go for it. Yeah. I'll go for Nilam.
Speaker 11:Yeah. Yeah. So we we actually have businesses today that serve various industrial end markets. So think about software that helps large construction sites manage their their tool inventory, software that helps oil rigs stay safe. And increasingly, we're seeing this marriage of AI native software with hardware, like GPS devices, etcetera, to be able to increase the surface area of what that piece of software can do for the end user.
Speaker 11:You know, one of our customers, which which I I can't name, which is like a a Fortune 500 construction firm, They're saving millions of dollars today on on tool supply because, you know, we we actually help them manage these industrial tools that are being used for the data center build out across the economy. In the old world, before we applied AI to help them match tool to job site appropriately with GPS, they would open construction manager or project manager at site would over allocate and overbuy tools, basically, to make sure that they're not gonna be short. So this was a huge problem for for the the company. They worked with our team. Our four deployed engineers went down to Houston and helped them.
Speaker 11:We built a new module for them, which basically AI matches tools to his job site, then we put in GPS trackers to make sure the right tool got to the right site. That's very cool. Leonard, sorry. You you were gonna say something too?
Speaker 10:Yeah. I mean, think you guys are being super prescient about where else technology is headed. Certainly, robotics is gonna mature quite a bit in the next five years. And I think robotics or not, I think there's going to be a huge category of value can deliver to our companies by essentially being able to dispatch AI employees or digital employees or whatever you wanna call it at will. And so it could be something as simple as an AI SDR helping you find leads from your existing network.
Speaker 10:It could be something as simple as an AI support engineer helping you deal with tickets and bug bash. But I think there will be this huge supply of intelligence at your disposal if you're an owner operator for you to go and lever up your existing strategy, team, ambitions at your company. Yeah. I also do think separate from just digital employees, Beacon is in a very unique position to go after what I would describe as world models of companies or company world models.
Speaker 4:Mhmm.
Speaker 10:IE models that can help the existing owner operator as a true thought partner and strategic decision maker think about what's going to happen next in their business Sure. And anticipate the best choice and action they should take to better run their business. So I think there's this pure question of, can you deploy more intelligence to lever up existing objectives? Then there's this separate technical challenge of, can you actually help business owner figure out what objective to go after in the first place?
Speaker 1:Yeah. Well, thank you so much for coming on the show.
Speaker 2:Congratulations Great update.
Speaker 1:And we'll talk to you soon.
Speaker 2:Very cool, guys.
Speaker 1:Have a good one. Goodbye. Cheers.
Speaker 10:Thanks, guys.
Speaker 1:Let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock Exchange. We got Joe Weisenthal here live in the TBPN UltraDome.
Speaker 4:I can't believe I'm here. I can't believe I'm here.
Speaker 2:Why not? I know because you've been here so much.
Speaker 4:Well, I've like been here so many times. This is huge. And I, you know, in my dreams I wonder what the studio is like and will I ever make it to the temple. Yes. Yes.
Speaker 4:I ever see the gong. Bring the gong.
Speaker 2:Hit the gong.
Speaker 1:It was it was some excuse. So what? The ten years
Speaker 4:I was warned by one of
Speaker 2:your producers. Yeah.
Speaker 4:It is. Right. 25 basis point is. Is. Done now.
Speaker 4:Right? I can leave. The whole point was just to It bring me into to hit the gong. What else do I have yet to achieve now in my life? Yeah.
Speaker 4:What summits what summits yet to climb?
Speaker 1:Yeah. What actually brought you to LA?
Speaker 4:We oh, funny. You should We are doing a live show tonight at the Vermont Theater in Hollywood where we are going to attempt to do a survey of what is this thing called the LA economy. So we're gonna be talking to some of the industrial guys.
Speaker 1:Sure.
Speaker 4:Chris Power from Adrian going to be on. Tom Mueller, first space impulse space is gonna be on. He's great. We have some of our favorite Internet characters. Yes.
Speaker 4:Taylor Lorenz. Yes. Rachel Carton is gonna be there. So it should be a really fun night. I have no idea what to expect.
Speaker 4:Don't know anything economy
Speaker 2:but you've picked out like some of the bright like the only bright the only bright points to be honest. No. I know. It's like it's like
Speaker 4:You're negging your own city Oh, like
Speaker 2:I I mean, the city's the city's a disaster. I mean, it's
Speaker 1:They didn't even hold on to a movie studio.
Speaker 4:But then you get this but then someone gets to take this Yeah.
Speaker 2:The bright spot is like the individual creators are doing well. There's cool stuff in industrials and space. Yeah. But the whole long LA movement like fizzled out right before you got this sort of
Speaker 4:I'm super long LA. Yeah. Really? Absolutely. You know, I was just
Speaker 2:just gets to
Speaker 4:the against the weather and What's
Speaker 2:optimistic there to about?
Speaker 4:Look, the thing that will never cease to mystify me, right? So Americans over time, they migrated westward, etcetera. And no offense to them, but I'm sure they're lovely people. I'm like, wait, guys stopped in Nebraska? You could've gone on your wagon for like another 70 It two was right there.
Speaker 4:And it's like what? I like what, in my trying to backfill American history is like how did we all not just come to LA Yeah. Right away and I do not believe regardless of what happens with Hollywood
Speaker 1:Yeah.
Speaker 4:That there will ever be a time Yeah. Where people just do not want to live in this climate by the beach.
Speaker 1:It is crazy.
Speaker 4:And they'll find an industry for them.
Speaker 1:Yeah. It is crazy that California I mean, got three coastal cities, San Francisco Yeah. LA, San Diego. But it's always shocked me that if you drive
Speaker 4:In fact,
Speaker 2:I'm just completely ignoring What? The every other
Speaker 1:No. No. If you drive halfway between LA and and San Francisco Metropolis with an international airport there. Like, you go you you go below like Marin and or Yeah. Laguna Seco.
Speaker 1:That's the only place I
Speaker 4:Monterrey.
Speaker 1:Yeah. You go below Monterrey and then and then you get into beautiful areas but it's mostly camping and and there was never like an enforced, you know, metropolis that built it.
Speaker 4:No. It's kind of strange. Yeah. You know a couple years ago a good friend and I decided to we had just like never been driven the Pacific Coast Highway.
Speaker 1:Yeah.
Speaker 4:So we're like let's drive from San Francisco down to what's the place down there where they have the the town where they have Coachella, Palm Springs. Yeah. And we did and it was beautiful.
Speaker 2:Wait. You hit Coachella or
Speaker 4:you just No. No. It's just like yeah. And it was a beautiful drive.
Speaker 1:Yeah.
Speaker 4:But at some point, have to admit, it's very beautiful. I have to admit it's like, oh, there is another beautiful cove. Yeah. And so I was like, I'm getting a little bored of this, and I'm oh, there's another beautiful cove. It also takes
Speaker 1:so much longer, they drive
Speaker 4:it So then knowing it, then we hit the thought, it was somewhere right around where the Hearst Mansion is, we're like, why do we drive inward because no one sees like
Speaker 1:Yeah yeah.
Speaker 4:So then we like went through like Fresno Yep. A lot fun. And like miles and miles of almond farms. Yeah. I loved it.
Speaker 4:Yeah. So now I'm actually like, yes, there should be Yeah. So it's like, yeah, of course, yes, there should be another megalopolis somewhere like on the coast. Yeah. But also I think that like if someone visiting LA Mhmm.
Speaker 4:At one point you should do the inward drive and see where they make all the almonds because it's amazing country out there.
Speaker 1:That's how I used to get back and forth from LA to San Francisco.
Speaker 2:LA is in a bad spot. LA is in a bad bad spot.
Speaker 4:You know what?
Speaker 2:I know. I'm generally I'm generally the the the point of optimism is is the weather. That's been the the durable point. Yeah. But but the weather can get a town through some bad eras.
Speaker 2:Right? Yeah. Because Sure. Yeah. If is actually headed the wrong direction, but the weather is simply so good that when you It'll be fine.
Speaker 4:It'll get you through. I'm very bullish.
Speaker 1:Okay.
Speaker 4:I'm like Move here. Yeah. I mean like look, like when like when Detroit got hollowed out after like the shrinking of the auto industry there, etcetera. It's like what was keeping you know, they didn't have the weather. Oh, Detroit.
Speaker 4:You know? Yeah. And so like, you guys have the weather. It'll be fine. Wait a couple years.
Speaker 4:Okay. It'll be fine. Yeah. It'll it's it'll be fine. I'm for
Speaker 2:the I'm I'm waiting for whatever industry can bring great opportunity to LA again, which it just doesn't feel like like, I moved here after college and I thought it was great because it was much more affordable than Yeah. New York. I'd have friends visit from New York and they'd be like, you get like this crazy loft for what would be, you know
Speaker 4:See, in New York, I believe there's this perpetual conversation that has, like, should I move to California? These days it's more SF, but for many years, the discourse among people in New York is like, should I move to LA? You know, like, it seems pretty nice out there. I get the impression, and maybe you guys could tell me if I'm wrong, like, I feel like once you get here, you don't have the reverse conversation. Oh, should I move to New York?
Speaker 4:I feel like it's like, oh, the
Speaker 2:was I was I've I've felt that way. You felt that way? Yeah.
Speaker 1:I think you're unique in
Speaker 2:but I but but spiritually I've always felt at home in New York even though I've never lived there full time.
Speaker 4:Well, that's the lovely part of New York. You are spiritually at
Speaker 1:home in You New don't think converting the Paramount Lot into a data center will keep people here? That seems like a lot of opportunities.
Speaker 2:Yeah. Mean, it's worth a shot.
Speaker 4:I mean, look, if look. The question if there is a new industry in America that creates jobs Yes. Then some of them will be in LA.
Speaker 2:Yes.
Speaker 4:I think the question is, will there ever be another industry in America that creates jobs in large scale?
Speaker 1:Yeah.
Speaker 4:If there is one, LA will be fine. If there isn't one, then it's not just gonna be an LA problem.
Speaker 1:Care healthcare hire.
Speaker 4:Right? Yeah. Right. But it's not just gonna be an LA problem. Like if that's the issue, it was like we can't think of the industry that's then gonna like I guarantee it's not just an LA problem.
Speaker 1:Yeah. Yeah. What do you think of the latest in the AI data center discourse debate? It felt like we were Yeah. It felt like we were grinding towards a crescendo there.
Speaker 1:Yeah. And then we took a hard left turn into AI risk, x risk.
Speaker 4:I think so too. I think that actually It's
Speaker 2:almost like it was coordinated by powerful shadowy organizations.
Speaker 1:That's Ian Bremmer's take. Ian Bremmer's take is actually that the x risk debate is to distract everyone
Speaker 4:From the data
Speaker 1:center. Problems. Well, not just data centers like, you know, brain rot and slop and like all the other complaints of people, job displacement. And he's like, the the AI lab leaders, he in his view, I don't know if I fully agree with this, but in his view he says, I Like, there's nothing an AI lab leader loves more than talking about x risk. It's pure upside.
Speaker 4:Well, I would say two things. So one is it already feels like if you're sort of politician and you're still talking about data centers, bro, that was a month ago. Like we've like moved on to model risk and stuff like that. So it does feel like actually very quickly the data center conversation disappeared among political discourse. My cynical version of the Ian Bremmer take however is slightly different.
Speaker 4:But maybe it converges on the same thing which is that actually, you know, because before data centers and before the x risk debate, it was the job loss debate, right? And so this question is like, oh, will AI wipe out 50 to 100% or even 10% of white collar jobs? And the, you know, if you read the op eds from the, you know, the demise as hobbies of the world, this is what they were talking about. Yeah. My cynical take at the time of those was they're very concerned about x risk.
Speaker 4:What is something that we could talk about that would distract job loss because that feels like
Speaker 1:because certainly we can't get we can't get an AI doomer on Joe Rogan. They'll never answer that. But like let's talk about jobs because we can have that conversation.
Speaker 4:And also job loss is the type of problem that, like, the three of us could come up with theoretical answers. Totally. I always say, like, maybe 10% of OpenAI gets into a, you know, a national fund.
Speaker 1:Exactly. There's tactical solutions. Economists will engage.
Speaker 5:Well, it's
Speaker 2:also another way to You think about could tell somebody, like, an asteroid is gonna hit the earth in 2050, and people would still go to earth work tomorrow. Like, you know, still true. It's still like
Speaker 9:But if
Speaker 4:you were like sitting there Yeah. Alive and you have like these really deep intuitions and you've been reading like Bostrom for
Speaker 2:twenty years.
Speaker 4:What are you concerned about? You're concerned about the x How do you get people to just, first of all, take the idea that AI risk is a big deal
Speaker 1:Or AI
Speaker 4:is real. Or AI is real. Let's start with the job loss conversation. It feels tractable. Yeah.
Speaker 4:It feels theoretically solvable. It's like, oh, we need an UBI. And so my cynical take was that the only reason or the primary reason they talked so much about the job loss is because it was a way in to warn people about AI. That didn't make them sound like sci
Speaker 2:fi But
Speaker 1:that that felt that feels like that backfired because we're sitting here and there hasn't been massive AI job loss. And so Yeah. That's It's it's easy for people to be like, these are the people that were telling us that there was 20 going 5% unemployment and that hasn't happened, so they're saying 10% chance, like, I I I'm betting against
Speaker 4:Yeah. There's this weird thing going on, I certainly think this is true, which is I don't know. You see these people as, like, top ranked AI forecaster. Right? Or like capabilities forecaster.
Speaker 4:And many of them do have like pretty good track record Yeah. Except on the question of what will be the impact of
Speaker 1:the Exactly. They're all internal. They're all internal. It's like, yes, I I I was able to predict model progress by the amount of compute that was built. Yeah.
Speaker 1:And also, wow, he also predicted the number of chips that were going be bought. Yeah. He also predicted the number of data centers that were going be built. And it's like, those are all downstream of the exact same line. Just things that are directly
Speaker 4:Except the one thing that no one has had any good intuitions on. I was like when are we gonna just gonna feel this in our day to
Speaker 1:day life.
Speaker 4:Yes. And it's pretty weird now that the conversation has evolved to like the x risk conversation because it's like you step outside. Like life feels really normal. Totally normal. You know, was like talking last night, we were like talking to like so again, we're at this conference of like financial advisors Yeah.
Speaker 4:Etcetera. And it's like there's this surreal thing because I like when I stare at my phone, it's Well, a
Speaker 1:lot of those financial advisors, talk about AGI all the time. Adjusted adjusted gross income.
Speaker 4:Adjusted gross income.
Speaker 1:What we're focused on.
Speaker 4:But you know, it's like well, AI can help you like this AI tool helps your clients with tax loss harvesting, etcetera, which is great. Yeah. I love tax loss harvesting. Yeah. But it's like, wow, this could not be a more different Tax loss harvesting.
Speaker 4:Yeah. Like But this conversation cannot feel more different from like the types of conversations about AI that like I read on my like Yeah. Yeah.
Speaker 1:Or or the dis or the
Speaker 2:the dis the disconnect honestly between like the the discourse and then like Dreamforce is happening. Yeah. Like, there's there's there's big problems that we need to be talking about. Like, we we gotta be talking about this. But Yeah.
Speaker 2:In the meantime
Speaker 4:No. I really like
Speaker 2:Here's another thing. Here's another thing. So I was thinking growing up in the Bay Area, I distinctly remember the Iraq war protests. Yes. And I just looked it up.
Speaker 2:Was 200,000 people Yeah. Roughly in the streets like marching. And There hasn't there hasn't even been a 10,000 person AI protest event.
Speaker 4:You ought to hear a funny story. Yeah. So I was at University of Texas
Speaker 1:Mhmm.
Speaker 4:Austin. I was a young hippie, and I attended some anti Iraq war marches. And there was this guy
Speaker 2:Thank you.
Speaker 4:At the front. There was this
Speaker 2:guy at the I was in the crowd too.
Speaker 4:There was this guy at the front of the crowd who would regularly show up, and he had this bullhorn, and he would captivate the crowd, and he would look, he would point up at a nearby office building, and he would say, don't think we can't see you, you know, g men up there spying us and everything. And then everyone would like crane their head.
Speaker 8:It was like, oh, yeah, I think I
Speaker 4:see someone in the office. That was Alex Jones. Was that person. Was like the guy and so, like, the so the least surprise How deep
Speaker 1:does he go there? Why is
Speaker 4:it like Alex Jones? Like, this guy who just, like, got us all captivated Yeah.
Speaker 2:Yeah. Yeah.
Speaker 4:In pro in during the That's pro fascinating. Who would be,
Speaker 2:like You were one
Speaker 4:Everyone was like, wow.
Speaker 8:Yeah. I think I do
Speaker 4:see someone up there. Yeah. That was Alex Jones. Wow.
Speaker 1:He's a natural talent for it.
Speaker 4:A gifted That's really remarkable.
Speaker 5:Yeah. Wow. Wow.
Speaker 1:That's a that's crazy. I mean, yeah. This that's like when we, yeah. There's some John Kiriaku, you know this guy?
Speaker 4:No. He shows up
Speaker 1:in weird places. I think he was like a school teacher. That was a wild story. They they they they these like, you know, closing sliding doors moments in history.
Speaker 4:Yeah. This
Speaker 1:is one of them.
Speaker 4:No. It's like Wild. He was just a local guy that Yeah. We all back then when we were in college.
Speaker 1:Okay. Back to the back to data centers, back to x risk. So so conversations getting There's one scenario where x risk is the thing that does move the needle on the protest. You go from 10,000 to a 100,000. Legislation gets written and it builds on a lot of the work that's been worked on on the data center stuff.
Speaker 1:Sure. And if you read the AI safety crowd, a lot of them are like, yeah. We actually would love a slowdown in chip production.
Speaker 8:Yeah.
Speaker 1:Slow down of data centers. That would actually be pretty satisfactory because one of the prerequisites for nefarious AI is just a lot of compute. A lot of compute. We we were not worried about the god model emerging in on a desktop computer. We just don't what's gonna happen.
Speaker 1:So AOC was recently on camera talking about I think you called her response like word salad. But we have the technology to turn word salad into iron clad legislation.
Speaker 4:Into a fancy new salad salad.
Speaker 1:Yes. So so take us through like like like is there is the is the word saladification of the AI discourse actually a problem?
Speaker 4:Wow. You know what it is? That's a really good question. I asked a version of this question to someone several months ago who was like in the real like safetyist camp Yeah. Before it became cool.
Speaker 4:And I was like, do you guys just join up with the anti data center people? Right?
Speaker 1:That's a great question.
Speaker 4:I was just like, you know, I understand. It's like they don't have the same sort of understanding, like they don't the shape of the risk they're Why do you just join up with them? Yeah. And I do think that like with, you know, people who have sharpened their blade for ten years in the less wrong forums, they cannot do that thing of like, yes, but they're wrong.
Speaker 1:Know, it's
Speaker 4:like, oh, yes, yes, aligning with the anti data center people would align with me perfect, but they're wrong about the water consumption.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 4:And I cannot bring myself to align with them, not because it wouldn't be useful Yep. But because I can't bring myself Yeah. To be on the same side as like someone who slightly Yeah. Factually in disagreement with me.
Speaker 1:It does feel like there's the beginning of that horseshoe coming together with Yeah. Steve Bannon and Bernie Sanders. Yeah. Bannon for years has just been like anti tech Facebook, Yeah. Anti, you know, control and like big company.
Speaker 1:And so there's more merging there. But Yeah. I agree it's even harder for the AI safety camp. But it feels like the Nate Suarez on Tucker Carlson Yeah. And Daniel on on Joe Rogan are like there might have been an update to the strategy.
Speaker 4:I think there has been and I think anyone who expects AI politics to map cleanly to some like left right thing Mhmm. Is like delusional. So like I get it. Alright. Bernie became the first like major elected politician to like join the pause cause etcetera and so then people are like, oh anti AI is gonna be a left thing.
Speaker 4:But you're absolutely right. There is not going to be a left First of all, there's not an going to be a left position Sure. To AI because there's a million different angles. Yeah. But also anyone who thinks that it's gonna split between like some democrat republican thing.
Speaker 4:You know we had Kathy Hochul on the podcast and she was defending the data center one year moratorium in New York. Yeah. And I think at that point, like literally it was so quick because at that point then people were like, well look, okay, York is gonna miss out on all of these companies that are, you know, bringing in tax revenue, etcetera. Mhmm. So this is why Texas is gonna get it.
Speaker 4:And then like a week later, governor Abbott, he didn't it wasn't a moratorium, but then he announced like a higher bar that the data centers are gonna have to clear in order to get built there. So even whether we're talking about model regulation, whether we're talking about building of data centers, this idea that's gonna map cleanly onto some Democrat or Republican thing, I think is like delusional.
Speaker 1:How do you think people break on should this be a federal or states issue? Because there's a world where, you know, a particular state is like, yeah, we we actually love this. There's I I I'm struggling to see a negative externality of a data center in a particular state. If everyone there is happy, maybe they should maybe it should be state by state regulated. Yeah.
Speaker 1:At the same time, it's such a national discourse issue that having a clarifying bill for like, yes, we are only building clean data centers. Sure. There's some emission standard. Maybe that makes sense, but how how have you seen it puzzled around?
Speaker 4:No. Look, I think most people, regardless of where you like fall on all of these questions, probably think that like some patchwork of state laws is like not a great way Yeah. To go about doing any of this. Yeah. But you know, outside data centers, I thought it really interesting.
Speaker 4:I guess it was like, just last time is fine. You know, Chris Lahan from OpenAI, and in that thing you spelled out, it's like, we support this Massachusetts bill now. We support this California bill now, etcetera. That's a pivot.
Speaker 1:Yeah. Totally.
Speaker 4:Yeah. That's a pivot. And so, like, I'm
Speaker 1:Not a pivot. Nobody loves a pivot.
Speaker 4:But I thought, you know, it was really interesting because in as recently as last year, another fellow we had on the podcast, like Alex Boris was like
Speaker 5:I knew you.
Speaker 4:Was was enemy number I knew one. Number one. And his bill that he had pushed in the state assembly was like pretty straightforward. If you're above a certain company and you have some quote incident, you have to report it and pay a fine, etcetera. That kind of seems like a small potatoes regulation compared to what we could get at this point.
Speaker 4:I doubt, again, like in the AI industry or outside the industry, anyone particularly loves the idea of like this, you know Yeah. The state by state rules. Like But it does feel like to a lot of people, well, this is the least worst
Speaker 1:possible state by state rules is that you have you it sets up the AGI dunk, which is like, oh, if your models are so so powerful, it shouldn't be hard to comply with all the rules state by state. Like, yeah, it's a mess.
Speaker 4:And you have
Speaker 1:to and you have to serve 50 different versions of chat gbt, but like, go for it. Just have your model do it.
Speaker 4:Well, this is, know, the other paradox. Oh, you think your models are gonna, like, go kill people or or whatever? Just tell the AGI not to do that. If it's smart, then have the AGI trained. Right?
Speaker 4:Like, there's, like, all these Yeah.
Speaker 1:Yeah. People buy the distillation thing too.
Speaker 4:I mean, this is the
Speaker 1:You're smart. Why can't you stop
Speaker 4:You're smart. Right? But this is, like, this industry has a, not only made for thought experiments.
Speaker 2:Yeah.
Speaker 4:The thought experiments have been around probably since the nineteen fifties and the version of sci fi novels and Asimov, etcetera. Mhmm. And so the whole thing is built experiments and so forth. There's a there were thought experiments before there was something we would call an AI industry. Yeah.
Speaker 4:You just literally take them in any direction.
Speaker 1:Yeah.
Speaker 4:Yeah. Yeah. And there's like
Speaker 1:On the opposite end of thought experiment Yes. Is like hard reality Yes. Yes. Do you think the AI community is digesting what's going on with the fed funds rate? What the outlook is on interest rates?
Speaker 1:No.
Speaker 4:No. And I would like, I would be, you know, and I would be very smart.
Speaker 1:No. No. It's just is a very different world because like
Speaker 4:It's very different world.
Speaker 1:Because like like tech companies that have never raised debt, have never raised money at all are doing it and like they will be affected by this and probably more so in the future. So yeah.
Speaker 4:What's happening? Be affected, but I think by and large, if you sort of like assume the growth rates that these companies are seeing Mhmm. If you sort of like do the math on like what okay. Financing, building a data center, acquiring the chips Yeah. I don't think they're like 25 basis points, 50 basis points.
Speaker 4:Sure. They just don't move the dial yet.
Speaker 1:Yeah. I think Sarah Fryer said like, yeah, she bought all this compute and it like trades in the market like
Speaker 4:So it's funny. Yeah. And there's the, you know, there's actually a funny amount of academic literature on whether any company, period, cares about interest rates. So this is actually an empirical thing that's been tested which is like, has there ever been an example of a company that actually like changed some policy choice because of something the Fed did? And it's like surprisingly rare.
Speaker 4:These rare There are so many bigger questions that usually, okay, here's a board meeting. Yeah. And we're deciding whether we're gonna make some investment. And it's very rare that the decision Oh, the tenure at 6% right now or is it 6.5% Sure. Right Sure.
Speaker 4:The short end at 4.7% or is it five? There are very few corporate decisions in the history of business where that turned out to be the deciding factor. Now if we're talking maybe strictly real estate where there's a very like, okay, these are gonna be our cap rates, etcetera, sure that may
Speaker 1:be reasonable. Now it's not.
Speaker 4:But by and large, it is a huge open question about whether these marginal moves, anything, have any history of affecting corporate behavior or
Speaker 1:not. Can you reflect on Warsh and Yeah. How you like, how is he different? Not even in the strategy, we know the rates are going up, like aesthetically, the way he communicates Yeah. The the the dynamic between him and other parties.
Speaker 1:Sure. Like like, how does he feel? He's just at the start, but like, what what is his legacy building towards here? Like, what's the purpose?
Speaker 4:You know, I think there is this view, there is certainly a view that Warsh represents some sort of like very 90 degree turn from like the three predecessors he had, 100 don't know. Powell, Yellen, and Bernanke, in the specific sense, there were more, well, Powell was a lawyer, but still more of like, but still like an internalized academic macro for sure, but the main thing that they had was like they communicated a lot and they brought, starting under Bernanke, there were a number of, I guess I would call them monetary policy innovations. The press conference, there's not a history of that before Bernanke. There are so called dot plots where the members of the FOMC write down where they expect growth on
Speaker 1:a Bernanke got the press conference idea from basketball?
Speaker 4:I didn't. Probably from basketball. And it was built upon. But I think there is like look. Like, most of the history of central banking probably looks much more like warsh, like they didn't used to talk so much.
Speaker 1:Oh, that's
Speaker 4:And so like, I am of this view that basically, like, you know, we could go If you go back to the Green Span era, he would The word The famous word to describe his style of communication was gnomic, right? And he didn't say many words or if he did say a lot of words, no one understood what he was talking about. There was a long tradition of essentially like opacity in one way or another Sure. At the Fed. Sure.
Speaker 4:And so like if like I to some extent, you know, people are like, so I'm getting like, oh, these the dots do not have some long intellectual tradition at the Fed. If they completely got rid of the dots, if they completely got rid of regular press conferences, which my gut is that Worsch would like to do because he doesn't really say anything at most of his press conferences, we would not be ripping up some hundreds of years of like No. We were ripping up presidents since 2008. Sure. And some of the or 2009.
Speaker 4:And some of this stuff made a lot of sense coming out of the great financial crisis.
Speaker 1:Was a fed crisis. Like, was a crisis for them and they
Speaker 4:were instrument had a look. They had a very specific challenge Yep. 2000, which was that inflation was very low. They had cut rates to zero. Mhmm.
Speaker 4:If you had plugged the economic conditions of the Taylor rule into some sort of, like, rule, it would have said, like, you have to cut rates to negative five. Yeah. They can't do that. I think a lot of things break when you have negative interest So then they're like, well, how can we be further dovish once we hit the zero lower bound? It's like, okay, we're gonna do this by talking more about our commitment to lowering rates and so forth.
Speaker 4:So a lot of these things made a certain intuitive sense under a set of macro conditions in which the traditional tools of monetary policy were not workable because you just couldn't cut rates any further. Yeah. It's 2026 now. It's a very different set of problems, So if you would say, look, under these conditions, we do not have the same problems that we had when these things made a lot of sense, so we should get rid of them. I think there are a lot of people who would agree.
Speaker 4:The one thing I will say that I like, the head scratcher still, is that like on some level, you know, he used, in his first or second press conference, Wirsch used this phrase, we would like to play we would like to have market participants play the ball and not the referee, the referee being the fed. Yeah. And that sounds great. We love that idea. Play the ball and not the referee.
Speaker 4:Unfortunately, and where I would say, in the sort of government bond market, the the Fed is the ball. Right? We're all trying to guess where this is.
Speaker 1:Right? So it's like Yeah.
Speaker 4:Yeah. Yeah. Let's talk let's talk for a second. Let's imagine a two year government bond. Right?
Speaker 4:Yeah. That two year government bond is going to the correct pricing of that bond is going to be, like, where the Fed sets rates over the next two years. Right? It is.
Speaker 1:Okay. Is there some sort of steel man here where, like, the you should be more focused on the fiscal condition of the US government?
Speaker 4:We would love for that to be the case, but at the we would love for that to be sure. The yes. But the thing is the Fed is going to be making decisions. Yeah. There's 12 members of the f o m c 12 voting members of the f o m And they are going to be attempting to meet their dual mandate of maximum unemployment and stable prices.
Speaker 4:Yep. And things that they will take into account. Well, what does government spending look like right What is trade and tariffs? What does that mean for the inflation picture? Mhmm.
Speaker 4:Etcetera. What does AI mean for the state of the employment position? Etcetera. At the end of the day, then it's like, you are in, once you are a participant in that market, what you are betting on is strictly and only how those 12 members of the FOMC are going to be digesting that information. You know, when we occasionally have arguments or debates about prediction markets, I like to point out that the US government bond market is not figuratively or metaphorically a prediction market.
Speaker 4:It is literally a prediction market in the specific sense
Speaker 1:Yep.
Speaker 4:That you are making bets on how 12 voters just as an it's an election of and there are only 12 voters
Speaker 1:Yeah.
Speaker 4:Of what they will do at the next meeting or the subsequent meetings. So it is literally a prediction market of how you expect 12 people to vote eight times a year. Yeah. And that's not that's that is all I believe that a government, at least in The US, that a government bond market could ever be.
Speaker 1:Fed currently needs to the dual mandate is minimize unemployment.
Speaker 4:Yes. Which does not have a
Speaker 1:Minimize inflation or hit the inflation target?
Speaker 4:So the the goal is stable prices.
Speaker 1:Stable prices.
Speaker 4:And that has been interpreted and formalized as we have a 2% inflation
Speaker 1:Post AGI, post abundance will want the Fed to maximize unemployment and minimize prices. They wanna maximize deflation so everything's essentially free. If we're really AGI pilled here, that's where we need the Fed to be going. Right?
Speaker 4:Yeah. I don't know, like, what, like, operation
Speaker 1:Post singularity Fed looks
Speaker 4:like right. Because let's just say we have
Speaker 1:Yes.
Speaker 4:A let's say we have an AGI that could do all human labor.
Speaker 2:Yes. Right?
Speaker 4:I don't know what that means for Federal Reserve tasked with maximizing labor. It's a What economic
Speaker 2:data do you feel like you can really lean on? I feel like there's so I have so little trust in all the employment data Yeah. Now because it always gets revised. Sometimes, you know, the the revisions have been insane and then You that at least like it felt like six months ago, like there was so much admin like like, focus Yeah. On some of this data, and then there were some personnel changes.
Speaker 2:And so now I'm like Yeah.
Speaker 4:The boss didn't really like the I'll say I'll say two things, which is that I actually believe that even to this day, setting aside some of the personnel changes, you should do this sometime. You should, like, call up the BLS. They're all they will answer any question you have. There are all these, like, very serious people who are taking their jobs very seriously. If you wanted to call up the BLS right now gosh.
Speaker 1:This sounds amazing.
Speaker 4:You should do it.
Speaker 1:It's a good segment.
Speaker 8:I mean,
Speaker 4:it would be a good segment.
Speaker 1:Okay. Great.
Speaker 4:Yeah. But if you called them up and you're like, you know, I wanna understand how you my cohost Tracy wrote a piece on this. But if you're like, if you call them up Yeah. And say, you know, how did you arrive at the price of mayonnaise for this index? They will answer.
Speaker 4:They will spend an hour on their phone on the phone with you. Wow. They're great.
Speaker 1:That's amazing.
Speaker 4:They're really like That's cool. They're public servants in the classical thing. They will they will sit an hour with you and tell you how this was constructed. They're really good. I I agree.
Speaker 4:And then the other thing I will say is, like, look, especially in the, like, hedge fund world, there has been a very big obsession with, like, alt alt data, private sector data. Right? It looks exactly
Speaker 1:the same. Exactly.
Speaker 4:Like there's been many attempts to construct private price indices. Yep. There's ADP. Yep. You can indeed.com has a job.
Speaker 4:It doesn't all
Speaker 1:tracks the same.
Speaker 4:So there is this hope or this sort of belief that it's like, no, the private sector would be better Yeah. At collecting this data, maybe. Yeah. And look, it's all out there, and then there's the Mastercard spending data, etcetera. Rarely deviating in any substantial sense.
Speaker 1:So what you're saying is this goes a lot deeper than
Speaker 4:It goes a lot deeper. They're all in on it. They're all in
Speaker 1:on Job data truther goes to heaven asks God, did we really add? Did The US really add a 160,000 jobs in August? God's in on it.
Speaker 4:Exactly that.
Speaker 1:Yeah. It's crazy. Yeah. And one thing that has stuck out to me is like this has been the year of sort of breathless takes from AI leaders and VCs around like we're in the post AGI era. AGI is here.
Speaker 1:We're in the singularity. We're in the foothills of the singularity. Everyone has a different buzzword except I'm just like, I'm gonna be looking at this all the economic charts and like, there's it doesn't feel like there's a kink in the graph yet.
Speaker 4:No. That does not.
Speaker 1:It doesn't feel like it's showing up in GDP.
Speaker 4:The thing is interesting question is, and I like, you know, where does the productivity data show up for the internet?
Speaker 1:Yeah. That's right. It doesn't.
Speaker 4:You like just like, oh, in the in the late nineties, productivity moved from 2.5 to 2.8%.
Speaker 1:Yeah. Yeah.
Speaker 4:Amazing. Wow. And it's like and so it's like Or it's like where did the productivity show up with the release of the mobile phone? Yeah. So I do think like we could We should and we had There's many interesting conversations that will be had about how AI is like manifesting in the data.
Speaker 4:But I do think it's worth asking, why didn't all of these other technologies show up, that should have or intuitively felt like they would revolutionize business and some way make companies hyperproductive? Why didn't that show up in the data either?
Speaker 1:So
Speaker 4:until that day when the kink arrived, we have plenty from the past we still don't we could still talk about and try to understand. Yeah. That's sort of my
Speaker 1:take Yeah. On What what else have you been tracking recently outside of is is AI just completely all encompassing?
Speaker 4:It's so annoying because it's like I'm very interested Yeah. In like, you know, I'm very interested in oil.
Speaker 2:Yeah.
Speaker 4:I've been doing some oil stuff. Okay. But, you know, I'm very interested in the Fed itself. I'm very interested in all these things. But it's just like I feel like it kinda against my will.
Speaker 1:Yeah. Suck.
Speaker 4:That right? Like that it's just like every year
Speaker 1:I He's like, really? Another another main story on this?
Speaker 4:No. I got a like, there's someone in my DM, she was like, oh, yeah. We gotta do an episode about motor oil. We do do an episode about motor oil. There's Yeah.
Speaker 4:I gotta do an episode about diesel prices. Oh, All of these things to prioritize. But I do feel to some extent against my will, like there's this monotonical step up in the number of waking hours that you just can't talk about these things without AI. It's funny. I was in Earlier in the year, I guess it was early this summer when oil was a lot higher, I was out in Hong Kong.
Speaker 4:Mhmm. And Asia or East Asia in particular seems like ground zero for where, you know, the the jet fuel crunch is really gonna hit and stuff like that because just the route, etcetera. So I'm like sitting around like all these like business execs and I'm like asking them, what's going on with oil and AI? I was like, whatever. Let's talk about AI.
Speaker 4:I was like, oh my god. It's like, is where I thought you guys were gonna be You
Speaker 1:know what we need? We need a new thought experiment for the oil community.
Speaker 4:That's right.
Speaker 1:We need to build a new thought experiment Yeah. For all these niche stories and then it can be something that we can tussle with. We can tussle
Speaker 4:have with. Like a big
Speaker 1:We need a percentage, you know, percentages around these thought experiments.
Speaker 4:That's right.
Speaker 1:You need to build a lore in the world so then you can have endless hours
Speaker 4:talk and to them about, like, you know, asset allocation and the
Speaker 1:You know the question that I still have not gotten to the bottom of? Still you you mentioned the the Iraq war protest.
Speaker 4:Yes.
Speaker 1:And and I remember that there was, at the time, the banner was no blood for oil.
Speaker 4:That's right.
Speaker 1:Because the the stated reason why America went to war in The Middle East was WMDs. Yes. And that was pretty handily concluded as like false. Right?
Speaker 4:Information. I think so.
Speaker 1:Right? But but the cynical view was like we only went for oil and but we didn't get the oil or was that
Speaker 4:I I don't know.
Speaker 1:So so so so my question is like is like when when George Bush and Cheney sit down years later and and have a glass of wine together and they reflect, are they like, damn, that one got away from us. Right?
Speaker 4:I mean I mean, Trump certainly thinks this were they doing? We didn't even get the oil.
Speaker 1:Yeah. Yeah.
Speaker 4:But, you know, speaking of, like, you know, the what is happening on the ground is we did get the oil out of Venezuela. And like Venezuelan oil is like basically our oil now.
Speaker 1:But that's 1% of the market?
Speaker 4:I don't know exactly what it is, but it's a lot of oil. Okay. But where are the like pump? There's there's no savings at the pump, but there's also like the disappearance of like that kind of protest movement. Because I think like which is where I kind of thought you were gonna go, but it's like there was a point in our life where like the thought of like using US imperial might to extract oil Yeah.
Speaker 4:Was something that animated us non trivial I number of also people think I think the internet really doing it. Yeah. Where is the where is the I mean, there is one. I don't wanna actually completely sneer them but like, you know, where is the there has not been a particularly large scale protest movement about the
Speaker 2:social media like very clearly killed protests because it allows It
Speaker 4:feels like
Speaker 2:Like people can like go viral and feel like they're like, you know, taking action and yet like it's like sounds like the dream of a of a government that's not doing the will of the people is like you you can do whatever you want and sometimes they're gonna get angry online at you but nothing will actually happen.
Speaker 1:That's very new. I mean, just a few years ago there were millions of people for the Women's March, Black Lives Matter movements. Like, it was it was like post COVID then things maybe slowed down. Yeah. I like I completely agree with this idea that like people feel like they can scratch the itch of protest online by throwing a like on a
Speaker 4:You know like what died is the bumper sticker.
Speaker 1:I was just talking I was just thinking
Speaker 4:I about was like every once in a while, like usually it's like a Vermont license plate, and they still have like all of those, like, you know, the Coexist bumper sticker, this car climb Mount Washington bumper sticker, my other car is a broomstick bumper sticker, etcetera. I miss all that. Every once in a while I see
Speaker 1:these It's a boom in in the I bought this Tesla before
Speaker 4:I bought that. That's right. There is that one. But I miss the bumper sticker.
Speaker 1:But I do too. And I was thinking about how I haven't seen any anti AI bumper stickers, but that feels like a ripe area for entrepreneurship. If somebody's gonna start a bumper sticker enterprise.
Speaker 4:That's The anti
Speaker 1:data center bumper sticker probably gonna fly off the shelves.
Speaker 2:And my friend Blake makes amazing bumper stickers.
Speaker 1:Oh, yeah?
Speaker 2:He he's the world's foremost vintage g wagon dealer. Okay. So he makes he makes bumper stickers that say you wouldn't put a bumper sticker on a Mercedes Benz.
Speaker 4:Oh. Oh, there
Speaker 1:you go. You know
Speaker 4:what I think there's in one of the reasons why AI politics are really confusing and scrambling is that like to even go to even say like put up an anti AI bumper sticker on your market would force the person to accept the premise that AI is a serious and important technology. Totally. And so part of the reason that I think that it scrambles the thing is, like, if you want me to be actively anti it, then I first have to accept the premise that this is I'm legitimizing.
Speaker 1:Yep, yep, yep.
Speaker 4:And that is like something that many people are reluctant to do for various reasons. Of course. And so there is this question, Nate Silver asked this, he's like, why don't you see more like sort of like left wing opposition to AI and the pace of development?
Speaker 1:Sure, sure.
Speaker 4:I have many, I think there are many answers to this, and I don't even know, like, there will never be a, you know, people are complicated. But I think it first requires a certain step of legitimization that people don't wanna do, which would be required to actually, like, care enough about AI risk to put a bumper sticker on
Speaker 1:it. Yeah. Yeah. Yeah. But Would you make me want yeah.
Speaker 1:With the power of AI, we'll be able to take a picture of that bumper sticker, immediately translate it into ironclad legislation. That's the We could
Speaker 4:we could do is spell this out. All the herebodies that you need to have and the thing.
Speaker 1:Turn it into law immediately.
Speaker 4:God. You know, it's funny like, it's such a classic political talking point. It's like, they never even read the legislation that they voted on. Yeah. Now, this is like everything now.
Speaker 4:It's like, they never even read the code that they implemented. Right? Like, is will be the phenomenon of our world that in so many different things that people implement Mhmm. No one ever actually like read it or knows like what the guts of it are. Yeah.
Speaker 4:And it's just beginning. Yeah.
Speaker 1:Yeah. Yeah. The state of the book industry is interesting. Yeah. Did you read the Tim Ferriss article?
Speaker 1:No. He talks about how he he wrote very he wrote very specific non fiction books. One of them is called The Four Hour Chef and it's essentially a recipe book. And he was like, I actually got steamrolled by Chat Giputti because people can look up exactly what that is. Yeah.
Speaker 1:And he was trying to sort of like match through some trends like obviously I think the Kindle bookstore has seen Yeah. Re x Yeah. The number of submissions and there's clear AI Yeah.
Speaker 4:Effect there.
Speaker 1:But then I imagine that sales of you know Harry Potter's are still chugging along.
Speaker 4:Probably still
Speaker 1:doing It's not really very substitutive with that, but
Speaker 4:the No. I think that Well, you know, I do think probably in sort of like, you know, the type of people who like wrote the books about like people who want to read about erotic affairs with monsters and stuff. You know, it's just like
Speaker 1:That's a big category. I have heard
Speaker 4:that this is a genre.
Speaker 1:It's called romanticy.
Speaker 4:Romanticy. Yes. It's an investment Will AI like be able to like write? I would suspect that it won't be too long until like some of these genres. But, you know, like, look.
Speaker 4:Yeah. Really, like, big, like, this sort of world building type of fiction that would be in a Harry Potter, don't think we'll have that technology for at least another two or three months. That's all. You know?
Speaker 1:Have you been surprised that Panggram works in 2026?
Speaker 4:Yeah. I have been. Like, in two I of would
Speaker 1:have said that if they're solving Millennium Prizes, there's no way that Max Sparrow can detect it with his team. Like
Speaker 4:I have been surprised. I would have guessed that And I guess I would still guess that at some point AI writing will be good enough or will be But like
Speaker 1:And I don't think the labs are focused on evading
Speaker 4:the AI technology. Could be that at some point they may prioritize that or something like It's
Speaker 1:kind of a nice equilibrium where it's
Speaker 7:like Yeah.
Speaker 1:Look, if you wanna know if it's AI written, you can.
Speaker 4:Yeah.
Speaker 1:Like, we're not gonna, like, stuff it in your face with a bunch of, like, heavy handed tells Yeah. Or, like, you know, additions. But, it is an option to go figure it out if you want to.
Speaker 4:It might be a useful it might be a useful equilibrium, one that the labs don't feel any particular prioritization to, like, work on Yeah. Etcetera. I mean, like, I I, you know, there's no You know, it's funny because people talk about like AI writing. Yeah. And when I, when the conversation happens online, it's often between journalists, and so writing to them means writing articles.
Speaker 1:Yeah, yeah.
Speaker 4:The vast majority of quote writing is just emails. Right?
Speaker 5:Yeah.
Speaker 4:And I doubt there's like, you know, and I don't think that there is like some big norm within most corporations. Like, You had an AI write this memo summarizing the meeting? Yeah. I've actually heard the opposite when I talk to people who work in non media organizations and non tech organizations that there was a norm against, like, why didn't you have the AI write this? It would have been a cleaner email than
Speaker 1:Cleaner for sure. But I I I think the KPI that that I would be interested in in looking at if would be, like, number of words should like, posted to Slack and over email for employees should not be increasing in the AI era. No. Like, do not just become more verbose because you can. But if you're using AI to fact check everything that you're saying but you're still writing tersely, No.
Speaker 4:I agree. And like, look, I saw it's still all in flux. But like, I I think, like, by and large, like, if you send me an email and it's like, oh, how to find the TBPN offices and what you should do and what you should wear. And I can tell that it's like AI written. It's not gonna be a big deal
Speaker 1:to me. I'm not gonna be like It's not just a studio joke. Yeah. It's an ultra dome. You'll know it when you
Speaker 4:see it. Like, I'm not gonna be, like, you know, tremendously offended if, like, you use
Speaker 1:Send you the sloppy Yeah. G p p four o email.
Speaker 4:I actually am, like, I am kind of like a holdout Trust that like I I actually have never sent a like AI generated email. Like I'm
Speaker 1:like Yeah.
Speaker 4:I if I'm gonna like put words to something, wanna write them.
Speaker 1:Of course.
Speaker 4:But I do not think there's gonna be like some big norm against like for like basic functional
Speaker 1:Yeah. Communication. I just love being able to like open up the voice mode or like the the dictate website. Yeah. Ask seven different questions across statistics and links and some charts and then just have like basically, I used to have 12 tabs with Yeah.
Speaker 1:Wikipedia and some economic statistics and I used to be tabbing through them when I'm actually writing or researching and now I can just have it all in one go. And then I'm still doing the instantiation and like the thought
Speaker 4:process thing It's pretty nice. It's really
Speaker 1:good for
Speaker 4:like It's pretty good. It's pretty hard to resist. I mean, yeah, like whether I, you know, I I I'm interested in this book or some other recommendations. What are the through lines between this line of thought and this line of thought?
Speaker 1:Yeah. Yeah.
Speaker 4:It's pretty good. I can't use it.
Speaker 1:What are the biggest or like most shocking findings from your studies on orality?
Speaker 4:Yeah. You know, I think it's actually like so this is something I'm like very interested in and I don't know, so Or like when you think of like, so orality, what do we really talk about here? It's speech, but there are things that happen in speech that are the important parts. So for example, three people talking, we've already tried like, oh, let's one up each other, etcetera. Let's get a little bit confrontational.
Speaker 4:Like this is like Let's get a little spicy. Let's not
Speaker 1:get confrontational.
Speaker 4:No. Let's not. But this is different with AI. Like, it's and so this is like actually something I'm like very interested in because for the last fifteen years of the Internet, we are just sort of like bathed in constant both fights and competition. Right?
Speaker 4:Yeah. Whether it's Instagram and you're sort of trying to show your life is a little bit better than someone else's, or whether it's Twitter and you like wanna get in a good dunk, etcetera. Internet's not I think the really interesting question, or one of many interesting questions from a society standpoint is what happens when we're bathed in the thing that always agrees with us? And what happens like when we're bathed in like the most polite helpful thing on the other side? So it's very tempting to like look at and say like okay, chatbots are this huge thing.
Speaker 4:This is the extension, the acceleration. This is like this sort of back and forthness of social media, etcetera. But it's not because it doesn't have that like competitive thing that one the chatbot is never trying to one up you. It's never trying to get a dunk on.
Speaker 2:I actually have had an experience recently. I got a very robust racing simulator.
Speaker 4:Oh, sick.
Speaker 2:Not surprised. And so I'll be like, you know, focusing on improving like my lap times with a Yeah. Car on a certain track. And I've had the experience a bunch of times where I'm like, I cut like a lot of, you know, multiple seconds off my time. I think I'm like, I feel pretty quick.
Speaker 2:Yeah. And I go to I go to ChatGPT and I'm like, how's this pace on this track
Speaker 4:Oh, this car.
Speaker 2:And and it'll just like, I'm expecting it to be like, you are the goat. You are Yeah.
Speaker 1:It used to. It to be like, you're you're in the conversation.
Speaker 2:It's like and like, you know, granted I'm I'm a relative beginner Yeah. But it'll be like, you know, I'll think I'll have improved a lot already and then it'll be like, yeah, you're you're like clearly in development. Wouldn't Really? I wouldn't call A you like year ago. And it's ranking out like it's Yeah.
Speaker 2:Doing a tier list and it's like you're you're you're three tiers away from like competition pace, basically. Know. I'm and it's actually it's like To me, I'm like, wow. I'm I'm actually glad I'm glad it's telling me the truth because it's gonna me and it's showing me there's more, but it's not a good feeling to get told by this
Speaker 4:thing. I always said that who is brave enough to admit that they miss what the models were more obsequious and told you you're a genius every time it's like, what do you but now, you like ask the latest Marvel, you know, I have this thought that this is like this. And it's like, yeah, Melissa, you're not you're missing something. It's like, oh, you know what? I'm gonna go back to Opus because that was really nice to me and always told me I
Speaker 1:was genius. Sometimes they'll even sort of like compliment themselves. Yeah. They'll ask a question and they'll dig in and they'll be like, well, I found some interesting things. Dug into it and here's the interesting thing.
Speaker 1:You know
Speaker 4:what I had? Interesting.
Speaker 1:Yeah. Well, I started this. Okay. So let's give me some credit.
Speaker 4:I like to, you know, unfortunately, several I frequently will ask the question on incognito mode so that past so history doesn't that so that, like, I don't want it to just, like, flatter my you know? Yeah. Because otherwise it's too Of course. Of course. But I had something that I had never seen before.
Speaker 2:It literally says, so two zero eight puts you at a pretty reasonable pace, especially since you're still learning to track. The circuit has an unusually large skill gap because the entire mountain section rewards confidence and precision. It's basically it's basically like saying you suck.
Speaker 4:That's brutal. But I had an interesting experience that I never had seen a response before, so I asked I was reading a book and I didn't quite understand something, so I asked the model if it could, like, help me, like, understand this section, and it said something weird that I had never got before. It said, you'll have to forgive me because I'm remembering this book from my memory, and it was like, I I So I'm like, my memory of the book isn't that great, but my understanding And I was like, that's weird. Yeah. Because then the model begins to sound like this self that has an understanding of its own.
Speaker 4:Like, you'll have to forgive me. I I don't exactly remember what the book said. Interesting. And I was like kind of unnerved by this level of abstraction.
Speaker 1:So that is weird. That also might be an artifact from specific reinforcement learning on do not memorize the entire book because if you reproduce it, we get
Speaker 4:Then it's a copyright
Speaker 1:thing. And so actually, like, the correct way to talk about literature is is as someone who has read the book but might not remember it all, and that's actually the goal that gets reinforced.
Speaker 4:That's very okay. That that could be a good answer. And I can't find it out. The only reason I mentioned s on incognito mode be so I can't pull it up because I wanna go back and read it, but it disappeared Yeah. From my chat history.
Speaker 4:Yeah. But these things, guess, it's like kind of like a nerd vibe.
Speaker 1:Totally. Yeah. Know. It's a lot. And Yeah.
Speaker 1:Yeah. I I was I I was noticing Chateappie uses I to refer to itself And I was like, but but the models are starting to use agent swarms. Yeah. So should they start being should they start Have using
Speaker 4:you ever seen that famous screenshot? It was a real chat. Someone asked it some question. Yeah. And someone said, where'd you get that fact?
Speaker 4:And the model said, oh, was at night I I heard at an IBM conference in 1985. This model responded, it's like, where is this coming from? It's like, were not at an IBM conference in '9 but that was the response. Like weird weird stuff
Speaker 1:there. Watson.
Speaker 2:Yeah. Exactly. Gentlemen. Yeah. I have a meeting.
Speaker 2:I gotta get to Amazing. Pretty soon. This is fantastic. I hate to cut it off.
Speaker 1:It's such a good time.
Speaker 2:But I
Speaker 4:love chatting with you guys.
Speaker 1:Yeah. Always a great time. Let's do it again soon.
Speaker 2:It's an honor to finally have you here.
Speaker 4:It's an honor to be here in the dome. Yes. I can't believe I got to hit the gong.
Speaker 1:Yes. We're
Speaker 4:That was like, I'm done. I have no nothing left to
Speaker 2:accomplish. One one option. One option.
Speaker 1:Yeah. Choose what is The live show is happening, Odd Lots in Los Angeles. Lots of guests happening tonight. There we go.
Speaker 4:Just a classic. I'm gonna put the classic.
Speaker 2:Alright. I want you to experience this.
Speaker 1:We'll see you guys on Apple Podcasts.
Speaker 4:We're gonna see
Speaker 2:you Monday.
Speaker 1:We'll see you on Monday. We're out. We're a conference tomorrow, but we will be back on Monday, 11AM Pacific Sharp.
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