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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching Today is Monday, 08/04/2025. We are live from the TVPN Ultra Dome.
Speaker 2:That's right.
Speaker 1:The temple of technology, the fortress of finance, the capital of capital. We were recently featured in the New York Times podcast, their headlines podcast. And they quoted that segment of the stream and we snuck in an air horn. Bringing the air horn to Legacy Media. It was it was very satisfying.
Speaker 1:What a what a week last week. Absolutely insane. We did the Odd Lots podcast. That's out now. You can go listen to that Bloomberg Odd Lots with Tracy Allaway and Joe Weisenthal.
Speaker 1:Had a great chat with them about the AI talent wars and who who Mark Zuckerberg's white whale is in the Moby Dick analogy. We kinda settled on Ilya Sutskever, but we're gonna read the book. We're gonna have Joe Wiesenthal on the show later and get to the bottom of the full metaphor of if we are living in Moby Dick world, who's who? Who's Ahab? Who's the whale?
Speaker 1:Who's There's a whole bunch of funny side characters that I was trying to map out to different AI people. And I only got like halfway there, but I wanna do Anyway, big news from Microsoft. This was interesting. So this is from the Wall Street Journal. Microsoft is an AI darling, but its core businesses are booming too.
Speaker 1:Did a bunch of reading into this. Also, let me tell you about ramp time as money say both easy use corporate cards, bill payments, accounting, and whole lot more all in one place. I love this one.
Speaker 3:You know what, John?
Speaker 1:Your business to ramp.com. Love that.
Speaker 3:Anyway Quick note. Please. Microsoft. Yes. 4 t.
Speaker 1:4,000,000,000,000. They did it. Hit that gong, Jordy. Hit that gong, Jordy Hayes. We found a video of somebody playing a gong like much much more professionally than we do where they like have different tools and they can bring out different songs.
Speaker 1:They can really make it sing. And so, you know, Late Night has the live band. I think a live gong player might be in our future. Think that
Speaker 3:I think know,
Speaker 1:if we ever if it's ever discovered that TBPN goes bankrupt because of our incredibly high cost structure
Speaker 3:It will be because we have the world's foremost Gong athlete Yes. Gong player. Yes. Gong artist.
Speaker 1:Yes. Truly the greatest gong player of all time will be on staff.
Speaker 4:But you know why the Microsoft news are hitting that number is meaningful? Why? It's because everybody has always said Satya is more of a more of
Speaker 3:a two to three guy. Yeah. He's good in that range.
Speaker 1:He's in that range.
Speaker 3:Don't know
Speaker 1:if he's in the The four trillion club.
Speaker 3:In the four club.
Speaker 1:Got it. Got
Speaker 3:it. There's not a lot of guys in that club. There's one guy.
Speaker 1:Yeah. He's the founder.
Speaker 3:Founder mode. Right? Yeah.
Speaker 1:So is Sache in founder mode or is founder mode defeated? Because if a manager mode can take company to 4,000,000,000,000, you know, all bets are off. Put your company in manager mode. As long as you can recruit Sache Nadella to be your CEO, I think it's okay to step back.
Speaker 3:Manager run companies can excel.
Speaker 1:Exactly. Yeah. So if you're like, I'm a little burned out as a founder. I wanna take a break. I'm gonna step back.
Speaker 1:I'm gonna get a manager in. Run the Normally, bearish. Give Satya Nadella a call and You'll be okay in that case. Anyway, this stream is made possible by Restream One livestream 30 plus destinations, multi stream, and reach your audience wherever they are. Very exciting company.
Speaker 1:We're happy to partner with them. Anyway, so from the Wall Street Journal, Microsoft's blockbuster earnings last week, they blew out earnings. It was very exciting. They cemented its status as one of the biggest winners in the artificial intelligence boom. We knew this.
Speaker 1:Satya had carved out just a massive amount of territory. GitHub Co Pilot, First real major breakthrough product that was monetizing on top of g t GPT 3.5. Great product, obviously, led by Nat Friedman when he was there.
Speaker 3:Last we heard, it was at around half a billion in ARR
Speaker 1:Something like that.
Speaker 3:Two months ago, so probably billions now.
Speaker 1:Yeah. Probably bigger. And then the crazy OpenAI deal, they got in very early. They they have this massive revenue share. They have an ownership.
Speaker 1:They get a copy of any software that OpenAI writes basically or acquires. That's kinda crazy. And so
Speaker 3:Satya did seemingly one of the best deals of all time for Microsoft. Potentially.
Speaker 4:Yeah.
Speaker 1:Yeah. I think so. It's hard to I mean, it's an awkward situation now and it's a really hard decision.
Speaker 3:Sam is Yeah. You know, renegotiating the deal. Yep.
Speaker 1:And Ben Thompson was noodling on this like, should they take the money now or should they play it more like a venture style bet? What is the role of the CEO of a $4,000,000,000,000 public company where the shareholders have different expectations? They're not seeing if you hold Microsoft stock, you're not feeling like you're an LP in a venture fund. Yeah. So, if if the CEO comes to you and says, hey, look, we're taking the cash flow now.
Speaker 1:We're gonna dividend some of this out. We're selling down the position. Yeah. We're we're we're thinking strategically about this as opposed to just, we want the highest multiple. We wanna ring the gong on the deal.
Speaker 1:That could be reasonable. So, obviously, we're we're we're tracking where that goes. But, they also have Clippy, generational precursor to potentially all the AI agents, the original AI agent, Clippy, potentially making
Speaker 3:him Or you come be original super intelligence.
Speaker 1:The original super intelligence. And
Speaker 3:That was the first time they had to move the goalpost.
Speaker 1:Right? And this is why we're worried about getting paper clipped. Because Clippy will become too strong. I mean, with the power of OpenAI and Microsoft Azure, anything's possible there. So anyway, outside the AI race, Microsoft is minting money from corporate customers spending on regular technology, long a sweet spot for the company.
Speaker 1:Many companies are shifting from buying their own IT equipment to renting it from Microsoft through its cloud computing service. They are also renting more standard issue computing stuff, hard drives for data storage, for example, to support their AI efforts. And so this is the key stat from the earnings call that the that the Wall Street Journal is highlighting, and then we'll kind of dig into this number and what it means because there's a lot of different explanations for what could what could be going on. But Microsoft and the CFO and CEO didn't necessarily give all the context that we'd like to set this definitively, but I think there's some really good theories floating out there. So the quote from the Wall Street Journal is a large chunk of the recent strong growth in Microsoft's cloud business called Azure stems from that.
Speaker 1:More than half of Azure's 33% revenue jump in the company's March came from non AI services. While the company didn't give a comparable breakdown, a comparable breakdown of the cloud unit's 39% growth in its June, it said that the core infrastructure business, Microsoft's
Speaker 3:lingo for its non AI cloud business, was the driver. Jordy? Massive win for enterprise SaaS. Just good old fashioned SaaS. There were So some
Speaker 1:theories. So we had
Speaker 3:it's theories. Not SaaS. Yeah. So it's people migrating from on on prem to It's what's called infrastructure
Speaker 1:as a service. Yeah. So there's software as a service. That's when you go and get teams or you go and get a subscription to excel in the cloud Yeah. Or outlook in the cloud.
Speaker 3:That's software I more was more traditionally someone else People building.
Speaker 1:Yes. Yes. Using using it as infrastructure as Then a there's also platform as a service. That's like Heroku on AWS. Yeah.
Speaker 1:Where you go and you deploy an app. You could think of maybe even like a replet as like a platform as a service almost. Yeah. Where they're hosting you, but they're not just providing you the raw infrastructure. Azure's Azure's core infrastructure business is essentially infrastructure as a service, I a a s is the term.
Speaker 1:Yeah. And that means, oh, you want some CPUs and some hard drives and some Ethernet cables and moving stuff around data transfer.
Speaker 3:Interesting thesis offline earlier. Yes. You comped it to people in the internet era buying a compute. They hear about the internet. Like, hey, think this might be a thing.
Speaker 3:I should get a computer.
Speaker 1:Yes. And they just buy a computer.
Speaker 3:Yes. Now, you could see something, you know, where companies say, hey, this AI thing might be big. We should get on the cloud.
Speaker 1:Yeah. Yeah. You wanna set yourself up for it. And I think if you have a whole bunch of data in some sort of on prem, you know, you have a data center for all of your data in a bunch of hard drives and you have CPUs that can do the do different workloads and data workloads and maybe you're using some SaaS on top of that, but you realize that you're never gonna be in a position to buy a 100,000 h 1 hundreds and you're going to wind up being a leaser of that for some small
Speaker 3:fine other tuning people's application layer
Speaker 1:Totally. Products. Yeah. And so, the integration that comes from being in the Azure ecosystem, that could be a driver. There's a few others.
Speaker 1:When I think about the the core, the the AI Azure services, I think of that almost as, you know, it is SaaS. Like, if they're they're if you go to Azure and you say, I'd like to, you know, put my credit card down and I wanna be able to use the GPT four API. I also wanna be able to use Llama three. And I also wanna be able to use DeepSeek. And I wanna be able to call all these APIs within my within my product.
Speaker 1:I almost think of that as tokens as a service. Like it is SaaS, but it's something else. And I think these token factories, I think this idea of how much revenue are you generating from your token generation business is really what we're talking about when we when we talk about Azure's, you know, core AI products Yeah. Versus the infrastructure. But there's a bunch of interesting wrinkles that could be going on within the classic, you know, core infrastructure business.
Speaker 1:So this is of course is virtual machines. You just want a Linux box with a CPU to host a website. That's something that you do on Azure. Storage, networking. Okay.
Speaker 1:I wanna store all my data. You could go to AWS and store it in s three. You could go to Google Mhmm. Store it in BigQuery. You could also go to Azure and fire up any sort of storage database Yeah.
Speaker 1:Or just, you know, raw raw hard drives and then networking moving stuff around. So this is the infrastructure as a service versus tokens as a service, their higher level AI APIs. But, so GPUs are so the question is like, why is their infrastructure as a service growing faster than their tokens as a service product? You would think that Microsoft is going to their enterprise clients and saying like, you need to build AI. You need to bring AI into your products and we have all the best APIs, so just buy tokens from us.
Speaker 1:And you would think that that would be the boom.
Speaker 3:Well, couldn't the other factor here be that they are massively supply constrained on the GPU side? Yep. They have this, you know, multi Yes. Tens of billions or hundreds of billions of dollars of backlog Yep. That they can't fulfill?
Speaker 3:Yep. Meanwhile, they had a, you know, more kind of like predictability on the the traditional data center cloud side Yep. That they were able to scale up to.
Speaker 1:Yep.
Speaker 3:So that feels like a potentially like a pretty big driver here.
Speaker 1:Yes. Definitely.
Speaker 3:But still shocking.
Speaker 1:And so and so as companies come out and they say, okay, we are we are scaling our our, you know, hardware and software foot our technology footprint broadly going into this AI era. We're excited about this stuff. Well, we're also gonna need more databases. We're gonna need to put more data in those databases. We're gonna need more CPU workloads.
Speaker 1:We're gonna need more of everything. And Microsoft's like, yeah, of course, we can definitely get you a whole bunch more hard drives and a whole bunch more CPUs. We're not constrained on that at all. And the CapEx is keeping up, they're able to service that. There's also an interesting thing where tons of AI stuff can technically be happening inside the core infrastructure bucket.
Speaker 1:You just don't necessarily know what what's in there. So some examples are like, if you're, you let's say you're a pure AI company or you're doing or you have a new AI workload, you could go to Azure and say, hey, I'm gonna do a whole bunch. I'm gonna do my own AI thing, but I need a ton of storage for data because I'm gonna be training on it. I'm gonna need a bunch of networking to move that data around when I do a training run. So that could be driving core infra up.
Speaker 1:And then also, if a bank hypothetically spins up a huge cluster of h 100 GPU virtual machines to fine tune an open source model like Meta's Llama three, this would show up as core infrastructure, not Azure AI services. And so that's like textbook AI boom, but it's just happening in the in the wrong bucket. And then I also saw a post that potentially ChatGPT counts as Azure core infrastructure because they're not they're not serving ChatGPT through the Azure AI API. It's not this like snake eating its tail or a boros. It's like OpenAI just came to there Yes.
Speaker 1:Give us a whole bunch
Speaker 3:headline itself ends up becoming pretty misleading.
Speaker 1:Exactly.
Speaker 3:Because, and again, this is, this was probably, you know, a lot of people were reading into AWS's growth, you know, the reports that Andy or the comments Andy had given on AWS last week. Yep. And the big thing that AWS is missing is having a chat gbt building on top of Yeah. AWS.
Speaker 1:Right? There's
Speaker 3:no dominant consumer product at least at that scale. ChatGPT, I think the as of this morning, somebody was estimating getting to a billion weekly actives this year which again, those types of products don't, know, the the the power laws like extreme.
Speaker 1:Right? So Yeah. So if you I I mean, I I believe Anthropic is pretty tightly hitched to Amazon and I think the next big cluster from Anthropic will be powered by Amazon for the most part. And so Yeah. They're getting there certainly on the if they're building all the all the infrastructure Yeah.
Speaker 3:But again, that would show up on on Core. Token generation side? Like, more of the the the
Speaker 1:No. No. So if Anthropic goes to AWS and says, we want you to build a huge data center to serve cloud code for us Okay. That's going on that's going on in infrastructure. Yep.
Speaker 1:Not Got it. Not actually APIs. But when you go to AWS and you're just some random company and you say, I need a database and I need some storage and I need a web server and I also need a bunch of tokens from whatever model you can serve me. And they're like, we got Claude. And then you're like, yeah, let's pull the Claude tokens into my app.
Speaker 3:It's a good model.
Speaker 1:That's token as a service. What?
Speaker 3:It's a good model, sir.
Speaker 1:It's a good model, Exactly.
Speaker 3:The one thing that stood out to me that has stood out to me across this year with Microsoft is they've done more layoffs this year than the past three years before that combined. So 2022, 2023, and 2024.
Speaker 1:That's crazy.
Speaker 3:So this just shows the level that Satya is operating at is like the the company has been on a tear this year, you know, performing exceptionally well. And he's still thinking about how do we get more and more fit. And Yeah. So
Speaker 1:So to be clear, literally every piece of Microsoft business is growing and at a very a very solid clip. So Microsoft three sixty five commercial cloud business, which houses remotely accessed versions of Word, Excel, other productivity software, That grew at 16% from a year earlier. So that's, I mean, that's like, it's not the most insane growth rate but that's still crazy because you think about like
Speaker 2:Yeah.
Speaker 1:Who doesn't have Excel that needs it? Like, who who are these people who are like, you know what? 2025 is the year that my company's getting on Excel. We're doing it.
Speaker 3:Well, it's just crazy when you compare it to AWS growing at 19%. Yeah. Obviously, very different scales.
Speaker 1:Yeah. Totally.
Speaker 3:You would think Yeah. You don't wanna be in the same ballpark as Yeah.
Speaker 1:And so that was the news of AWS if you missed it. They beat earnings. They did very well, but they weren't growing as fast as the others, the other cloud platforms, Google and and Microsoft. And so this the Amazon stock traded down. And, I mean, the the narrative around AWS is different because Microsoft has OpenAI, Microsoft Research, and has GitHub Copilot, and he's, like, really moving things forward in the AI world.
Speaker 1:And Satya is seen as someone who goes on the Door Cash podcast and talks about AI. And it's clearly like really on top of it where and and obviously Google has Gemini and a million different products and and and strategies around rolling that out and staying on the frontier. I mean, they have a frontier lab internally. And Amazon's just not there either on the partnership side or on the core, like, training frontier lab side. And so it's a little bit it's a little bit of both.
Speaker 1:Anyway, let me tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together. We had a great week in New York celebrating Figma and the IPO. Stock's been up, stock's been down, wild ride, but we are still very happy to be partnered with Dylan Field and the Figma team.
Speaker 1:And I'm It
Speaker 3:was truly
Speaker 1:excited to see what happens next because Truly,
Speaker 3:it was Thursday was such such an incredible day. Just getting the you didn't get a chance to listen, we talked with every the seed lead investor all the way through, of course, Andrew Reed who led the sea. Yep. And then capped it off with Dylan and and also got to speak with Lynn Martin, president of New York Stock Exchange, as well as Chris, the CTO of Figma. So, really incredible day and it's just very proud of the Figma team.
Speaker 1:Yeah. It was awesome. In one sense, investors might prefer to see AI businesses driving growth. That, after all, is what has driven the company's valuation through the roof. But tech companies' stocks arguably hinge on too much on AI to the extent that they can keep increasing other revenue streams.
Speaker 1:They are on more solid financial ground. Of course, none of that means anything if all of the growth is coming from OpenAI. But at the same time, does anyone really think ChatGPT is is Yahoo anymore? Like, do like, you know, they're they're generating what a billion dollars a month in revenue at this point. Everyone uses the app.
Speaker 1:It's installed everywhere. Like that that that token demand is not going anywhere. That infrastructure demand is not going anywhere.
Speaker 3:On the other side, Amazon is down just over 9% since Thursday
Speaker 1:Since Thursday. To earnings.
Speaker 3:Wow. And then this morning, unrelated, they announced that they're shutting down Wondery, the podcast studio Really? They acquired in late twenty twenty. Wait.
Speaker 1:Why did and the market's way up. Wow. Nasdaq's up 1.8% today after a brief sell off on Friday. Good news.
Speaker 3:Bear market is over.
Speaker 1:Yeah. We were so over but we're already so back. It's fantastic.
Speaker 3:Love when it happens.
Speaker 1:Markets go up, markets do go down. But the march of technological progress, the arrow points in but one direction.
Speaker 3:That's right.
Speaker 1:And its march is relentless. There is another silver lining for Microsoft. Non AI sales can be substantially more lucrative than AI ones. Non AI gross margins within Azure were around 73%. Wow.
Speaker 1:That compares to that that compares to 30 to 40% gross margin for AI, he estimated, because of the huge cost of setting up AI infrastructure that makes sense, you get more margin on just a bunch of CPUs and databases that you've harnessed and built everything around. Also, you know, you still have that interesting dynamic where it seems like all of the cloud, the hyperscalers, like, don't really compete on price because they're all pretty comparable but they seem to all have
Speaker 3:the It's a coca cola dynamic.
Speaker 1:That's what it seems like. Yeah. I'm not exactly sure if there's something else that's more fundamental going on.
Speaker 3:And the coca cola dynamic is like, I don't know if we It's hard to tell what conversations were off air
Speaker 1:or
Speaker 3:on Pretty down. John last week, forget when, was describing how you would think that Coca Cola or Pepsi would decide to get aggressive on price Yep. Try to gain market share and get people to switch. But ultimately, that would just lead to a price war with both companies, you know, massively eroding their their, you know, Margins. Margins and then
Speaker 1:Did all the RC Cola coded then.
Speaker 3:Yeah.
Speaker 1:So every yeah.
Speaker 3:Every So if you have a competitor consider entering an unspoken gentleman's
Speaker 1:That's the beauty.
Speaker 3:Maybe a gentleman's agreement.
Speaker 1:It's not it's not even a gentleman's agreement. It's not it is unspoken, but it is Just good business. Nature it is a natural game theoretic Nash equilibrium. Like, it is the natural state of things that both sides understand that to go to war would be mutually assured destruction. And so they don't even need to talk about it.
Speaker 1:And so instead, they both agree to keep prices where they are and instead compete on marketing. Compete on marketing. Really.
Speaker 5:Yeah.
Speaker 1:Yeah. I mean, they don't form they don't reformulate that often. They mostly compete on on on marketing and that allows them to have this like continually compounding business. And that's why it's in the the Warren Buffett portfolio. Coca Cola.
Speaker 1:He's been in there for a long time. And Pepsi's been doing well.
Speaker 3:And he was a DAU, of course.
Speaker 1:He was a DAU of Coke. Still. Diet Coke or Coca Diet Coke. I think Coca Cola?
Speaker 3:No. Diet Coke.
Speaker 1:Oh, he's a Diet Coke guy? I feel like he was a Coca Cola guy.
Speaker 3:Warren?
Speaker 1:Yeah. Look that up. I wanna know. Anyway, I'll keep reading from this Wall Street Journal report. Luckily for Microsoft demand for lucrative non AI services appears to be reasonably strong.
Speaker 1:Measures of broad IT There we go. You know why?
Speaker 3:It's it
Speaker 1:has corn syrup in it. It's literally corn grown from mother nature, from the earth. And then syrup, it's what you put on pancakes. Like, it's the most wholesome combination of of foods you could imagine. Maize.
Speaker 1:This is something that's been grown in America for generations.
Speaker 3:Right? And corn is so popular in Nebraska. Right? It's grown everywhere. Exactly.
Speaker 1:It's it's cultured Take corn. Significant. And the syrup that you put on pancakes, it it's it's the most American, most wholesome ingredients. Not this like refined sugar, this crazy stuff from somewhere else. No.
Speaker 1:It's American.
Speaker 3:American corn syrup.
Speaker 1:It's nothing it's Lindy
Speaker 3:corn syrup. Corn syrup. Yeah. All See haters are are in disbelief. The shambles.
Speaker 1:That that we need to return to corn syrup. None none of this none of whatever's in this Coke Zero.
Speaker 3:Yeah. Your grandpa was was drinking corn syrup.
Speaker 1:Yeah. Oh, and it's too good for you? Yeah. Because you read a couple posts on axe.com. Think you understand something better than corn?
Speaker 1:Delicious corn, corn on the cob. Something you have on a at a barbecue. Oh, now it's too good for you? Can't possibly have corn? What's next?
Speaker 1:No apple pie? What's next? No rotisserie chicken? Somebody is gonna listen
Speaker 3:to the show for the first time today and and just go raging for you promoting corn syrup consumption.
Speaker 1:It's as American as apple pie. And Warren Buffett knows best. He's doing great. And of one study sort of a Brian Johnson. Yeah.
Speaker 1:He's sort of the Brian Johnson.
Speaker 3:He's the original don't die.
Speaker 1:Yeah. And he's been doing fantastically on that front.
Speaker 5:Yep.
Speaker 1:He's great. Anyway, measures abroad IT spending were fairly muted at the start of the year as companies pondered the impact of Donald Trump's tariffs and concerns bubbled about the health of the global economy. Attitudes appear to have improved somewhat in the second quarter, though. A UBS survey of cloud computing customers in July showed a clear improvement in tone about spending. Most were moving forward with efforts to migrate computing work to the cloud.
Speaker 1:They're like, this internet thing is real. It's real. We gotta put the data in the cloud.
Speaker 3:We held back as long
Speaker 1:as we could. As we could. But it's 2025. We have no more excuses. The tariffs that's come and gone.
Speaker 1:Now is the time.
Speaker 3:We were resisting the twenty first century
Speaker 1:Yeah.
Speaker 3:But we're a quarter of the way through.
Speaker 1:Put the data online.
Speaker 3:It's not going away.
Speaker 1:So let's let's use the computer in the online In in the cloud.
Speaker 3:Put the docs in the cloud.
Speaker 1:Put it in the cloud.
Speaker 3:Just put the docs in the cloud.
Speaker 1:Put the fries in the bag. Anyway, and put your compliance process on Vanta. Automate compliance, manage risk, improve trust. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program. In the longer term, there is little question that cloud computing is going to grow in ways that play to Microsoft's strengths.
Speaker 1:Its rivals, mainly amazon.com and Google, are growing quickly too, but don't have all of Microsoft's broad corporate software offerings that enhance its cloud footprint even outside of AI. Amazon on Thursday said its cloud unit grew at 17 and a half percent in the June, disappointing investors and forcing CEO Andy Jassy to answer questions to answer questions about Azure's outperformance. Why are you getting beaten? You created this category. You created this product.
Speaker 1:Why is Satya Nadella
Speaker 3:You are cloud.
Speaker 1:You. Are the cloud. You are the the cowboy of the cloud. And you're getting you're getting put out to pasture. Recent quarterly earnings in Azure's favor were really just moments in time.
Speaker 1:Said John. The oh, yeah. Wow. That is worse than I thought. I wasn't sure where we had that pulled
Speaker 3:I mean, it would have been hard to predict five years ago that we'd be sitting here with with Microsoft at 4,000,000,000,000 and and
Speaker 1:We're saying it on it.
Speaker 3:I think 2,200,000,000,000.0.
Speaker 1:2.2.
Speaker 3:2.27.
Speaker 1:2.27. Okay.
Speaker 3:So almost double. Magnificent but
Speaker 1:Still magnificent but you gotta keep fighting. Gotta keep fighting. The company's stock fell 8% Friday and it looks like it's sliding. Down even more. The question for Microsoft's investors then is less about the its prospects than its valuation.
Speaker 1:The company's stock is up nearly 40% since the April pushing its forward price earnings multiple above 33. That's a bit richer than Amazon and a large margin above Google, which is trading at a multiple of roughly 18 times. That should be easier for investors to digest because while Microsoft's AI growth is real, it is far from the only thing going right at the software giant because they got Excel. They got core infrastructure. They got AI, APIs.
Speaker 1:They got tokens as a service, infrastructure as a service, and software as a service. They got the royal flush. It's going well over at Microsoft. They won't need to call Mckenzie but maybe maybe amazon.com will. And that brings us to our next story.
Speaker 3:Well, if we're gonna jump in
Speaker 1:Please. Quickly. Graphite for the age of AI. Graphite helps teams on GitHub shift higher quality software faster. I'd love to do an ad, Jordy.
Speaker 3:Very clean. Thank you. We got to hang with Merrill.
Speaker 1:Yes. We got to hang
Speaker 3:with Last Thursday, which was Which
Speaker 1:is great.
Speaker 3:He came with a tux. Incredibly sharp.
Speaker 1:Yes. It was great.
Speaker 3:Great sign of respect Well, American Eagle Outfitters Inc is up 23 No way. Today after Trump came out with a lot of a lot of excitement for the advertisement this morning. I'll let people go read it but he did describe it as the hottest ad out there. And it certainly struck a chord last week. But anyways, let's jump into this next story.
Speaker 1:Really quickly before we go that, the battle for the Mag seven is is heating up. Microsoft is now in the 4,000,000,000,000 club. Let's go to the Poly market for the largest company at the 2025. NVIDIA has a solid handle on it. They as of December 31, they are expected to be the largest company in the world at 63%.
Speaker 1:Microsoft is at 28%, but climbing up from 22% earlier. Apple has been falling. They were the largest company, and now they are falling down to just 6% chance. And, of course, Tesla's hanging out there at 3%. Anything could happen with Tesla.
Speaker 1:One crazy move. One naturally aspirated v 12 Cybertruck and boom.
Speaker 3:It's all it would take.
Speaker 1:It's a $5,000,000,000,000 stock.
Speaker 3:What about a v 12 Optimus? Like a gas powered Okay.
Speaker 1:I have a pitch for you. Richard Mill of cars.
Speaker 3:A Richard Mill for the for the streets?
Speaker 1:Richard Mill for the streets.
Speaker 3:That's like a racing machine.
Speaker 1:Basically, the pitch is that now, it's routine. I would say most people, if they if they put their minds to it, they'll be making a $100,000,000 a year. Seems like that's kind of the benchmark for like you did okay in life. $100,000,000 a year, even even a million dollar Ferrari is not really gonna stand out. That's three days of income.
Speaker 1:Right? So we need we need a car brand to come out where the floor price is like $20,000,000.
Speaker 3:Yeah. Bugatti doesn't quite get you
Speaker 1:And the thing with the Bugatti is that it's like this hypercar 2,000 horsepower. It's so extreme. The whole point of the Richard Mill is that you can wear it to the gym, but it's $250,000. So I'm looking for something that's
Speaker 3:like A daily
Speaker 1:$20,000,000. Yeah. $20,000,000
Speaker 3:minivan. $20,000,000 Pickup truck.
Speaker 1:Just crossover. Just midsize SUV, $30,000,000. This is what we're gonna do in here. This is what we're gonna do. Because a lot of these a lot of these AI researchers, they don't they don't wanna pull up in a Bugatti.
Speaker 1:Yeah. But they have the money to spend. So To be
Speaker 3:a bit more They want understated that still says to the right audience, I spent tens of millions of dollars on my daily.
Speaker 1:Exactly. Exactly. That's definitely what they're going for over at MSL. If you pull up to Meta Super Intelligence Lab, like you don't wanna flex but you want people to know.
Speaker 3:You know? We need we need satellite imagery of the of the MSL parking lot. Yeah. That would be funny if it just looks like a car meet. Yeah.
Speaker 3:Just gets like
Speaker 1:a s e Koenigs. Laferrat. F 40. Somehow I think it won't be that It at won't be that at all. But do you think that there's actually an opportunity to start a new car company that that it takes the Richard Mill approach and is 10 times what the luxury cars are?
Speaker 1:So, like, maybe it's not 20,000,000, but, like, you know, a G Wagon is is a functional car in the 200,000 range. Something at 2,000,000 The
Speaker 3:thing with RM is they made something that was light Yep. And incredibly durable and that was effectively
Speaker 1:You don't think you can make a light and durable car for $2,000,000, Jordan? What are
Speaker 3:you talking about? World's lightest.
Speaker 1:What are you talking about?
Speaker 3:I mean that yeah. That would that'd be that'd be interesting. It just drives like in a go kart. It's just totally insane. Yeah.
Speaker 1:But Well, I don't necessarily need to optimize it performance.
Speaker 3:Was in aesthetically in an entirely new category. Yeah. It was it had the perform it it new levels of performance Yeah. Within the category broadly from a from a durability standpoint. So I think
Speaker 1:I think with the RM, it does stand out. It looks completely different, but it's still in this weird watch world where to just a completely average person is not as bold as a Cybertruck. It doesn't it's a it's still an if you know, you know type type accessory. Right? And so that's where you need to target.
Speaker 1:It needs to look kind of like, is that a BMW or an Audi or model y? It's like, it blends in a little bit.
Speaker 3:I think I think one one not not to crush your dreams. Please. One reason potentially many that this this is not as exciting as it sounds. I mean I I I wanna drive it to be clear. Yeah.
Speaker 3:But I think that the the automotive regulations around you need to have a seat belt like this. You need the seats need to work like this. It needs to be able to handle this type of.
Speaker 1:Okay. Maybe maybe there's some sort of like, you know how Steve Jobs famously bought a new nine eleven every single year?
Speaker 3:It was every ninety days I thought.
Speaker 1:Every three yeah. I think you're right. Every three months Steve Jobs would buy a new Porsche nine eleven so that he didn't ever need to have a license plate on it. Just for anonymity, I suppose. Yeah.
Speaker 1:So he would never be identifiable.
Speaker 3:Potentially an incredible excuse for being just like, I like to drive brand new cars.
Speaker 1:What what is what is breaking in three months on a nine eleven?
Speaker 3:The new car smell goes away by that point.
Speaker 1:Maybe he just really loved new car smell. He's like, I could never do a new car smell air freshener. Yeah. That's that simply won't
Speaker 2:get Got it.
Speaker 1:My new thing. And then later in life, I believe he switched to Mercedes. And I think he got the SL 63 or something equivalent to that. So like the the nine eleven equivalent of in Mercedes world. But, yeah.
Speaker 1:Maybe that's the hack. So so you you find something that would never be approved but you do some crazy thing where you bring it in on show and display and you can only drive it a few thousand miles a year, but then you're swapping them out. And so you're kind of doing, a subscription. And so your real cost to own is in, like, the 5,000,000 range. But the beauty is that you're getting something that's just complete regulatory and run around the rules so that you wind up with this very unique, very different, you know, experience but only made possible at the extra high end.
Speaker 3:I think at that point, helicopter.
Speaker 1:Maybe. Maybe maybe helicopter's the move.
Speaker 3:Let's get into the next story. The journal says AI is coming for the consultants inside McKenzie. They're saying this
Speaker 1:McKenzie?
Speaker 3:McKenzie. Somebody's got a case of the Mondays.
Speaker 1:McKenzie. McKenzie.
Speaker 3:They say this is existential. This is wild. Was talking with a buddy. Was talking with a buddy. Burn media though.
Speaker 3:We were talking yesterday or not yesterday. Last week and he said, word for word, adopting too much AI will hurt our bottom line.
Speaker 1:That's
Speaker 3:right. And that totally makes sense Yep. But it's not something that lawyers are actively saying out loud Yep. Because you don't wanna be the law firm that's anti tech Yep. If you go out as a big, if you're, you know, one of the one of the top 100 law firms and you're like, yeah, we we're excited about the potential of AI, but we won't be adopt adopting it internally because it, you know, naturally it's gonna hurt our profits, which you can just translate to, we're just not gonna be able to bill our clients for the same number of hours.
Speaker 3:And so, that statement made me bullish on why am I blanking on the the name of this company? Had company on Harvey, the other one Oh. That is doing just like contract like NDAs and and a few other types of contracts, but they're an actual law firm.
Speaker 1:Oh, interesting. Yeah. Kind of the Atrium ClearSpire model.
Speaker 3:Similar to similar to that.
Speaker 1:Fascinating model. Don't know if you remember this, but Justin Kahn, when he started Atrium, had a very complex corporate structure where the company was half a law firm, an LLC, which is the traditional corporate structure for a law firm and employed lawyers. And then there was a tech startup c corp that was bound together with a master service agreement or something like that. So these two companies were combined to be a tech enabled law firm. And it was it was probably a good idea just a little bit too early.
Speaker 1:But interestingly, there was another attempt to do the exact same thing ten years earlier called ClearSpire, and that didn't go well either. And it was start started started by some all star lawyers and some technologists, and they came together, and they were like, let's build this AI enabled law firm. Maybe now is the right time to build the AI native law AI native law firm, but I don't know that they need to be they need to be doing technology development. I think that the I think that the the next world might be you have a power law winner in legal AI tooling. Maybe it's Harvey.
Speaker 1:Maybe it's someone else or a combination of firms. And then you have a very, very small term small team of high EQ deals guys, lawyers who are phenomenal at the human element, thinking creatively, coming up with crazy structures, understanding are you familiar with the battle of the forms, this idea in in law firm, in in like in the legal world?
Speaker 3:Not familiar, but I can guess what what it what it looks like.
Speaker 1:Basically, if you talk to most lawyers, they will tell you that you can express almost the exact same legally binding theories or like like rules in a contract or bullet points in a contract. Everything you want in a contract can be expressed both in one page or a 100 pages.
Speaker 3:Yep.
Speaker 1:And so, which one you choose to send to your counterparty is like an aesthetic choice. It's like it's like for certain for certain deals, you wanna send the 100 page contract because you wanna send the send the message that like, we're taking this really seriously. We're thinking of everything. But for other people, you're more like, we wanna show that we're moving quickly. We wanna use the safe.
Speaker 1:We wanna use and and structurally, it can be the exact same deal. And so a good lawyer will know when to when to send a lot, when to send a little, when to slow a deal down, when to speed things up. And so you get a bunch of folks who are great at that type of legal thinking, the creative thinking, the human element, the the relationship building, the golden retriever mode. And then you and then you empower them with the best in class legal research and analysis tools to actually instantiate and do all the grunt work. And then separately, you have a you have a company like Harvey that's building the the the tooling that then sells to the team of, you know, humans.
Speaker 1:And and that law firm will have a very different cost structure, very different dynamic. Might even look like an older school law firm where it's just a few partners and One thing I know
Speaker 3:two people. Lawyers are not going down without a fight. They're like Absolutely. We're making 90% less per case. We're gonna initiate 10 times as many losses.
Speaker 1:That might be the equilibrium here for sure. Yeah. For sure. Well, if you're planning to manage your lawsuit or build a legal AI company, get on Linear. Linear is a purpose built tool for planning and building products, Meet the system for modern software development.
Speaker 1:Streamline issues, projects, and product road maps.
Speaker 3:Good transition. Not great. I I we're not recommending you use Linear to manage your lawsuit. But if you are building Use
Speaker 1:it for everything. Product.
Speaker 3:Yeah. John John's very in favor of using linear for everything including workouts.
Speaker 1:Haven't you seen those people that that that do art in Excel? Yeah. Then they zoom the grid way out and they color each each cell is a pixel Linear really
Speaker 3:is a a art?
Speaker 1:Think it's A product artist. I think it should be. Anyway, let's go back to McKinsey. Companies paid dearly for McKinsey's human expertise and for nearly a century they have had good reason. The elite firm the elite firms armies of consultants have helped generations of CEOs navigate the thorniest of challenges, synthesizing complex information, and mapping out what to do next.
Speaker 1:Now McKinsey is trying to steer through its own existential transformation. Artificial intelligence can increasingly do the work done by the firm's highly paid consultants often within minutes. That reality is pushing the firm to rewire its business. AI is now a topic of conversation. At every meeting of McKinsey's boards, their board of directors, The firm's global managing partner has said this.
Speaker 1:The Bob Sternfels, I wonder the nominative determinism there. Do you think he's a very stern individual or do you think he's friendly and fluffy? On the show.
Speaker 3:Chop it
Speaker 1:up with him. Just throw him. I don't
Speaker 3:even have him on the show to know.
Speaker 1:He's just like, you guys should be doing so much better. You should be more serious. Immediately stern stern mogs us. The technology is changing the ways McKinsey works with clients, how it hires, and even what projects to take on, and McKinsey is rapidly develop deploying thousands of AI agents. Those bots now assist consultants in building PowerPoint decks, taking notes, and summing up interviews and research documents for clients.
Speaker 1:What do you think about building PowerPoint decks using purely AI?
Speaker 3:We were talking about this this morning. Yep. I think that AI can do a tremendous job making you a generic deck template
Speaker 1:Yep.
Speaker 3:Or just market analysis
Speaker 1:Yep.
Speaker 3:And turning that into page by page kind of analysis that you could generate slides against. But I think just just grounding it in something more specific, I think if you asked if you were just trying to build a pre seed or seed or series a or series b, really any type of fundraising materials that are or even like fund like a deck for a venture fund
Speaker 1:Yeah.
Speaker 3:Raise. It's it's gonna produce something that will will not have you looked at very seriously. We'll put Yep. They will put together something that maybe like the most basic McKenzie associate would put together in terms of like, these are all the different types of slides you can have and you know, here's data and and here's research that that support these things. But the best decks take you on a journey.
Speaker 3:And I My framework for making decks is you basically want, in a fundraising context, you want every single slide to have like a very short sentence that takes like walk, that's walking somebody down this path that you're Where taking them they just agree, agree, agree, agree. So they get to the end and if at any point in that deck they've read a headline and they're like, I don't agree with that or that's dumb Yep. You're screwed.
Speaker 1:Yep.
Speaker 3:But usually, if you've you know, thought through your or I'm bored. Yeah. If you're bored or confused
Speaker 1:Yeah. It doesn't work. That's c tier. B tier But is
Speaker 3:decks decks just get looked at. It it's not about like the supporting content. It's about like the high level like narrative arc through the deck. Yeah. And getting somebody to click through enough times to through enough pages to actually care about what you're doing.
Speaker 3:Yeah. And I think that maybe there's some like really incredible prompting that you could do to try to come up with something like that. But I haven't been able to.
Speaker 1:Yeah. I just think the models aren't there yet in terms of, like, putting disparate information together, coming up with novel insights, contrarian thinking, independent thinking, all of that stuff is where the models fall down. But that's fine because they're fantastic at a bunch of other stuff and anything that they can RL on is fantastic. And so I would think about it like, you know, we already did the the the Figma ad read, but we're gonna wind up doing another one. But I mean, they have a tool for building decks and obviously, you've built decks and Figma for years.
Speaker 1:And when I think about as that tool becomes more AI native, I don't necessarily want the it it to try and one shot a prompt from build me a deck that convinces you that TPPN is a growing media company or something like that. I want I want a prompt to be like, go through and make sure all the text is centered. And then it just clicks through every deck and does the grunt work of centering every piece of text. Or there's so many times Or
Speaker 3:put all the content in and you say generate other variations of this slide.
Speaker 1:Yeah. Yeah. Or make sure all the black font is actually the correct color of black because I've updated that, like the style guide. And and then pull in this data and then keep the data up to date. Like, the grunt work that happens, that should be the that that should be the domain of AI.
Speaker 1:And for a long time, that's been the domain of the low level management consultant. The person who is at a wedding and has to leave because their boss told them, hey, you gotta update slide. Yeah. Hey. Yeah.
Speaker 1:There's a missed comma in this deck and I'm about to go present and it needs to be flawless. Yep. And so, McKinsey is is continuing saying they're they've reduced the head count from 45,000 people in 2023 to 40,000 through layoffs and attrition, in part to correct from an aggressive pandemic hiring spree. It's also roughly rolled out roughly 12,000 AI agents, which is a very like that's not apples to apples at all. Like you cannot just you cannot
Speaker 3:just It's also funny to be thinking about like the whole point of agents or that like anybody and a team can like spin them up get value and shut them down. Yeah. And they're not necessarily perpetually running so just to to come out and be like Yeah. We have 12,000 agents on our team
Speaker 1:right now. It's like how many
Speaker 3:We rolled out 12,000. It's like okay
Speaker 1:How many Google Chrome tabs do you have open? Tell me that too because that's useful. Like, yesterday, I I used I used agent mode to do some like really deep research and then I wound up and then it like was kind of working. It had this cool interaction where it asked me a question and I just wasn't online for that and it just it just typed for me continue, and then it just kept going. And so it wound up putting together really, really thorough result, but it took a long time.
Speaker 1:But in the meantime agent?
Speaker 3:Are you sure it wasn't a ghost in the machine?
Speaker 1:It was a ghost in the machine. But it was weird that it was, like, typing for me, but it was actually a great u u x because I I would have forgotten about it. But then I just went to four o, like, in the in the interim and got, like, basically the same answer because, like, I didn't ask that complex of a question. And so I kind of, like, overestimate. I was like, I need the I need the nuclear bomb for this one.
Speaker 1:This is the most brilliant question you could possibly ask. And it was like something that like probably Googleable.
Speaker 3:I think the thing with management consulting Yes. Is that it will the question this question has come up forever is is the the value of hiring McKinsey actually the the the strategy that you get or the advice that you get? Yep. Or is it outsourcing like critical decision making or backing up critical decision making Yeah. So that the management can say,
Speaker 1:like I don't want do layoffs, but McKinsey told me I had to.
Speaker 3:Yeah.
Speaker 1:Yep. It's a lot of cover and that.
Speaker 3:Or I didn't want to go into the cloud
Speaker 1:of McKinsey. Yeah. Yeah. Yeah. Yeah.
Speaker 1:Yeah. It's a lot of defensibility. It's a lot of, like, internal politics, it feels like. But I do think that there is I I think that that narrative is a little bit overblown and I do think some of the top McKinsey folks are actually great at business strategy. It's just that when you think of McKinsey, think of kind of the the mid tier junior associate who's still just kind of learning.
Speaker 1:And, of course, you're not gonna get that much out of that person. So my question for this, so the the key quote in here is that Katie Smaje, a senior partner that Sternfeld's tapped to lead McKinsey's AI efforts early this year said, do I think that this is existential for our profession? Yes. I do. I think it's an existential good for us.
Speaker 1:But, of course, that read as, they think it's an existential existential threat, potentially, if they don't get it right. And so consulting is emerging as an early and high profile test case for how dramatically an industry might must shift to stay relevant in the AI era. McKinsey, like its rivals, grew by hiring professionals from top universities, throwing them at projects for clients, and then billing companies based in part on the scope and duration of the products. So my my analysis of this was that okay. So clearly, McKinsey is going to change.
Speaker 1:The question is, like, in the medium term, like, pre super intelligence, like, how does it change? And what's interesting is that, like, when you look at the hoards of, like, eighty hour weeks from, you know, junior analysts on a McKinsey team, like the typical, like, Harvard, Yale, Stanford, Ivy League grad, doesn't exactly know what to do, maybe goes into, you know, the big three, Bain, BCG, McKinsey, as just kind of a junior consultant. And then after like two years, it's like, go to go go get your MBA and then maybe come back or do something else. Those eighty hour weeks, like, what they are doing during that time, there's a lot of hurry up and wait, but there is a lot of actually hard work pulling data, doing deep research, doing stuff that can be done by AI. But it also serves a as a as basically like an extended interview.
Speaker 1:It serves as a benchmark for is this person a grinder? Are they a creative thinker? Like, they have to do the baseline. They have to do they have to be very detail oriented. But then also, it's a question of while you're there, can you actually develop a relationship with a Fortune five hundred CEO?
Speaker 1:And that happens. Like I remember this crazy crazy story of a woman who was at This is a crazy story. So she was I think I've told you this before. So she was at, I think, McKinsey, and she went to do some consulting in a Middle Eastern country. Maybe like What was it?
Speaker 1:It was something in I don't wanna be too offensive but it's one of like the Borat countries. Think it was like Kazakhstan. Is that the one where he's from?
Speaker 3:That's where Borat
Speaker 1:is So so The character. The character's from Kazakhstan. So she goes to Kazakhstan.
Speaker 3:Doctor. Cohen, that's where he went.
Speaker 1:Yes. Yes. So she goes to Kazakhstan and and Kazakhstan has a number of state owned assets. And one of the things they own I believe was a cigarette making facility. So they built a factory for making
Speaker 3:They built a heater factory.
Speaker 1:National tobacco.
Speaker 3:We need to secure heater production. It's critical to national security.
Speaker 1:Yeah. No. No. I mean I mean basically like like when you are a big tobacco company in America, everything is privatized except for like the roads here. Basically, we're like the most privatized country.
Speaker 1:But when you go to when you go to a foreign country and you're like, let's set up, you know, we'd love to set up business in your country. You have a bunch of hard workers who can work on this manufacturing project. The government just says, like, okay. We will be the customer. Like, we will be the service provider.
Speaker 1:We will be the counterparty to your to your request for certain services. We will provide those, and we will own this, and that will be tax revenue for our government. And so that's what had happened years ago. This country had built up this cigarette manufacturing business. And then once you build up the business, the privatizing that can also be very lucrative because then you get all the cash up front.
Speaker 1:And so if you wanna if you wanna raise a bunch of money for your government and then maybe build some roads, one thing that you can do is you can sell the assets that you've developed. And so they brought in McKinsey to discuss how could they package this cigarette manufacturing building or factory or series of factories into an asset that could be sold to either private equity firm or to big tobacco. Actually, a large IPO on the horizon. Basically. I mean, this is what happened with like, Saudi Aramco was gonna go public.
Speaker 3:Where do you where do you think where do you think Kazakhstan's nationalized cigarette infrastructure? What do think it would trade at if it went out on? Probably a pretty low multiple honestly. Very real meme stock potential there.
Speaker 1:Yeah. Yeah. Can you imagine that? It'd be crazy. Anyway, so they bring in McKenzie and this woman's on the team.
Speaker 1:And she does the whole analysis and says that like, okay, if you package it up this way, you could get this multiple, you could sell this and then that would bring in this amount of cash that you could go and use and you could reinvest in roads infrastructure. Could build an airport. Data centers. Centers. Yeah.
Speaker 1:You could build anything. Right? Just
Speaker 3:Foundation model.
Speaker 1:Is pre all that. This is maybe like 2005 or 02/2010. So she does the deal. It's massively successful. Comes back.
Speaker 1:Applies to Harvard Business School. And she needs a letter of recommendation. So she goes to like the prime minister Kazakhstan and he's like, Hey, I helped you with that deal. I helped you privatize your cigarette factory. Can you write me a letter of recommendation?
Speaker 1:And I had the chance to read this letter of recommendation. And it was one of the funniest things I've ever read. It presupposes was endorsement. It was like, wow, she was incredible. She helped us with this deal.
Speaker 1:Does it assume
Speaker 3:she's getting in?
Speaker 1:No. It doesn't assume that she's getting in. But it is worded in the craziest way possible. It basically presupposes that it was unthinkable that a woman could do this and
Speaker 3:No oh,
Speaker 1:huge cultural bias because you know, it's like a developing nation. And so, this country, this prime minister is like, I was very surprised when she joined the team because I'd never worked with a woman before.
Speaker 3:That's insane.
Speaker 1:And I didn't 02/2005? Yeah. No. And I didn't think that she
Speaker 3:would So, pour out the whole
Speaker 1:the the I don't wanna say it was Kazakhstan because I could have been any other country in that area. But you can just think of it as generic developing
Speaker 3:Cohen was making jokes like that Exactly.
Speaker 5:And then
Speaker 1:bore out. Exactly. And so and so So maybe you see I saw a real instantiation of like the joke that he was telling basically. Yeah. And so the the letter of recommendation Harvard Business School, it starts with like with like it was mind blowing that like a woman showed up to this meeting.
Speaker 1:I didn't think that was possible and I and I didn't think that she would be like actually contributing, but then she was really helpful and this like surprised me. And so like, you should definitely let her into Harvard Business School. And then it ends on something that sounds like a vague threat. He's like, great great great great sorrow will befall Cambridge if you don't let her in. And it's like And it was clearly meant to just be like like, you're you'd be you'd making a mistake.
Speaker 3:A missed opportunity.
Speaker 1:You'd be a missed opportunity. But it was worded in this very aggressive way that sounded like threat. It was wild.
Speaker 3:I mean, I guess, anybody that's trying to get into HBS Yeah. Get a a prime minister of a foreign government Yes. The right you to make a threat to the college
Speaker 1:And and the funny thing is that is that you can do that. Yeah.
Speaker 3:Do anything.
Speaker 1:So you could read you could read into it as like, okay, this this country is developing like they clearly have different cultural norms. They're not the most like forward thinking in terms of women in the workplace. But instead of like instead of getting like dragged down in that, HBS clearly saw that like she basically went to a developing nation and like ris'd them like insanely and got a phenomenal deal done and made a ton of money for her firm and also for the country and it was just this like win win take private. That's awesome. And she got in and had a very successful career.
Speaker 1:And, yeah, this is a funny story of of what can go right with McKinsey, but it brings me back to the question of, you know, there's a world where she would just be the, like, the PowerPoint person and that's clearly not what she did with that opportunity. She went there and actually interacted with the prime minister and the top top economic advisers to this developing country and wound up driving a lot of value. I'm sure there were other On folks the client on the team on the client side. But, she developed such a relationship that she was able to get this like silly, but glowing
Speaker 3:Yeah.
Speaker 1:Recommendation letter. And so Right. Recommendation threat. Recommendation threat. Yeah.
Speaker 1:Yeah. That's the real alpha. If you if you're don't write me a recommendation letter. Threaten the person that I'm applying the job for.
Speaker 5:Would write
Speaker 3:a recommendation threat.
Speaker 1:For anyone on the team. Tyler. Anyone on the team. Yeah. For sure.
Speaker 1:Great. Your next training run will fail unless you hire
Speaker 3:If you do not hire Tyler Cosgrove, you will effectively curse your bloodline.
Speaker 1:I would I would happily put pen to paper to say that. Anyway, so the eighty hours a week, it's not just AI agent work. Like, you could not have an AI agent do what she that example, like, do what she did, fly to a developing nation and actually sit in the room with someone who who was just on the cusp of learning what a take private was and and the value that could be created and convince them that that this was a good idea. And so, I think that these these eighty hour weeks, they're gauntlets, and they're used to identify top performers that can still lead the firm. And the question is, if you if you don't have people doing the hard work, and you're not in in in like a lot of these things, we we were talking to Danny Reimer at at Index.
Speaker 1:We were like, is ventures, is your model a mentorship business? And so even if you can, like, outsource to AI agents these low level tasks, you still need to, like, build the next generation of talent in your firm and figure out who the top performers are. Now, maybe you can collapse that to an eval. Like, the reason that she got hired at McKinsey, I'm sure, was because she went to Harvard undergrad or something and had like perfect SAT scores and like a bunch of and like, all of that might be able to be distilled such that, you know, if you just ask Goldman or McKinsey to just say, take the top 10% of your class, don't hire the bottom 90%, and then immediately put them on the executive track, and they'll be your managing directors. Like, maybe that's maybe it's all predictable, but you do have a lot of churn where some of your top performers are gonna leave and start companies.
Speaker 1:Some of them are gonna go to big tech. Some of them are gonna just burn out and wanna be like teachers or something random. They might wanna change change trajectories entirely. And so, even your top performers aren't necessarily gonna matriculate into the the the partnership leadership. Like, leading the firm is a separate thing
Speaker 3:to see like, if there's new archetypes of people that thrive in management consulting. Right? Because like, the the right person that thrives in the first whatever it is, five years of just insane grunt work and just like toiling over documents Yep. Stuff like that. The person that thrives in that often times clearly can like rise above it Yep.
Speaker 3:And excel and client side firm wide kind of you know, running the firm itself etcetera. Yeah. But there's also probably other people that would never make it through the first five years but would just absolutely crush, you know you know Sure. On on on for for this sort of the majority of the career.
Speaker 1:And I think that does happen maybe once in a while. There are people that lateral from entrepreneurship or tech into a big three consulting firm at the top. So they're never the low grade analysts grinding. They might have grinded somewhere else though. Like, pretty much everyone grinds at some point.
Speaker 1:And I think that's kind of the the part of the takeaway of founder mode is that the founder has has been grinding in the exact context. And so, you talk about like Dylan Field working on WebGL in the trenches of Figma and then, you know, that enables him to speak with a different level of authority when he's managing a massive company that's now public. And so there's there's there's a world where, like, the the grind is relevant to what you wind up doing. But the big question is just, like, if, like, there is a risk, like, how do you identify these killers early on in the interview process? What does it mean for retention?
Speaker 1:And then the other question is like, today, if you leave McKinsey to build a new consulting firm, you might be able to take some of your top clients with you. Like, if they put you on the Coca Cola account, and you wound up being really, really impressive as an analyst, and you spend a lot of time with the CFO and the CMO or whatever or COO or whatever you were working on, and you built that relationship, and and they see you as a critical consultant. Even though the managing director or the head was the one who closed the deal, they might be willing to take a shot on you if you leave and start your own firm. But then, you still have to spin up all of your own analysts to actually do all the work that you were doing before with your team. And so, that takes time to hire and train.
Speaker 1:But in the future, if you leave, if you're if you're if you're really high performing and you leave and you can just be like, let me get an account on ChatGPT Pro or whatever, and then I effectively have 40 consultants on my team
Speaker 3:on day one. 12,000.
Speaker 1:12,000. Exactly. I would I would imagine that leaving to start your own firm and going like sort of sort of so low and just leveraging just the relationships, just the ability to just your innate ability could be like extremely high leverage much earlier in your career. Yeah. And so because you don't have to do the the thing where like you leave and you say, I'm taking everybody with me.
Speaker 1:You know? You you you can just leave and be like, I'm taking the AI agents with me because they live in Azure. And I'm just spinning up new ones.
Speaker 3:Yeah. Yeah. The the real question will be is there IP into like real IP to develop around the agents or can you use ChatGPT out of the box to say, pretend like you're a McKinsey analyst and make me this, you know, 20 page report. I need sections on this, this, this, and this. Yep.
Speaker 3:Use the entire internet as a data source as well as these materials from the client. Yep. And give me this report and then, yeah.
Speaker 1:Well, here's consulting firm. Leave McKinsey, go to companies, tell them to implement fin.ai. The number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on g two. That's basically your hero slide. You just show them the website and you say, pay me a million dollars and I'll help you implement it.
Speaker 1:Kidding. Of course, you can implement this yourself. Could start a free trial.
Speaker 3:McKinsey is private. Yes. But Accenture is not. Sure. And they have traded down 35 Mhmm.
Speaker 3:In the past six months. Bookings are slowing. That's crazy. Yeah. Mean They had
Speaker 5:The poll.
Speaker 3:They were impacted by Doge moderately. Mhmm. McKenzie does have the benefit of being private and being able to to, know, make hopefully some some longer term decisions. The scale of Accenture is insane. Guess how many employees they have?
Speaker 1:40,000.
Speaker 3:Close.
Speaker 1:Okay. How many do they have?
Speaker 3:791,000.
Speaker 1:What? 700,000? They're they're 20 times bigger than McKinsey? Is that
Speaker 3:a There's real more people that work at Accenture than the population of San Francisco.
Speaker 1:Where do they hold their Christmas party?
Speaker 3:I don't even Yeah.
Speaker 1:I don't even know where a million people congregate. Like, is that like Mecca? They have to go to Mecca? Have you seen those like a million people praying in one area? I think that's where they have to go.
Speaker 3:Coachella has a daily capacity of a 125,000 people.
Speaker 1:But you can't even do Coachella. What what where where can a million people I mean I guess there was the million man march so they could they could march on Washington DC. That's what they could do. They could take over all of DC.
Speaker 3:This is their new they they just do rotations and they basically do like a daily walking ultra marathon Yeah. Where they just walk through and they just completely shut down towns and they all wear the company merch.
Speaker 1:They've probably never been in the same place. They've probably never had a Christmas party with everyone.
Speaker 3:They should use they should use Restream for their all hands. They should. Need some real infrastructure there. Anyway. That is absolutely wild.
Speaker 3:How many If
Speaker 1:you're selling something, I have some consulting advice for you. This one's free. Get on numeralhq.com. Sales tax and autopilot. Spend less than five minutes per month on sales tax compliance.
Speaker 1:Go to numeralhq.com.
Speaker 3:The team just erupted in applause
Speaker 1:We love it.
Speaker 3:For numeral. We love it. What else we got, John?
Speaker 1:We got Disney. My question, is AI a sustaining innovation for Disney or is it a disruptive innovation? Where will Disney be in ten years in the medium term? Obviously, you're gonna be able to generate a lot of AI slop. You might be able to infringe on their on their IP.
Speaker 1:They might get paid by Google VO. When you generate a Mickey Mouse AI slop at it, they might get a little a couple pennies. But really good or bad for them?
Speaker 3:Children's, you know, I could see them making a product that allows you to make a, you know, book or a story for your kid that actually, you know, and they get they get some type of revenue.
Speaker 1:They should get revenue and I think that they will through the courts especially because as like big companies, like you're not so it it it's not this crazy, oh, there's like a bunch of kids doing random things. Like, they never had to go after the the street artist on Venice Beach that would draw a picture of Mickey Mouse and sell it to you for $20. They that was never material to their business. They had to go after Napster.
Speaker 3:I went to Venice Beach. Yes. I got them to draw me as Mickey Mouse. Really? And then, performed a citizen's arrest because I respect IP.
Speaker 3:I have an IP respecter.
Speaker 1:Yes. Yes. Yes. Citizen's arrest is underrated. Citizen's arrest.
Speaker 1:Citizen's arrest. You're going to
Speaker 3:jail, buddy. This is for Bob.
Speaker 1:This is for Bob Iger. Yeah. So, big question. This feels like a moment where you wanna be in founder mode. Bob Iger is one of the greatest CEOs of all time.
Speaker 1:How will he navigate this? The Wall Street Journal says
Speaker 3:Hey, but not
Speaker 1:Is it still Not He's not the founder. The founder died in 1966 Walt Disney Are
Speaker 3:you claiming
Speaker 1:He dies still. He might be able to turn it on. Satya Nadella certainly did was able to do it. He's in he's navigating the AI the AI shift flawlessly. We'll see what happens with Bob Iger and Disney.
Speaker 1:Wall Street Journal says, is it still Disney magic if it's AI? The stakes are especially high for the studio caught between how to use artificial intelligence in the filmmaking process and how to protect its famed characters against it. So there's a little anecdote that we'll kick it off with. When Disney began working on its new live action version of its hit cartoon Moana, executives started to ponder whether they should clone its star, Dwayne Johnson. The actor was reprising his role in the movie as Maui, a barrel chested demi god.
Speaker 1:Have you seen Moana? No. You have not. Of course, we know this. For certain days on set, Disney had a plan in place that wouldn't require Johnson to be there, all under the plan they devised.
Speaker 1:Johnson's similarly buff cousin, Tanoa Reid, who is six foot three two hundred fifty pounds, would fill in his body double for a small number of shots. Disney would work with AI company Metaphysic to create deep fakes of Johnson's face that would be layered on top of Reid's performance in the footage of digital twin essentially. Digital double that effectively allowed Johnson to be in two places at once. Obviously What's better?
Speaker 3:Calls up his cousin, you want a job? Need you to Yeah. Be
Speaker 1:Hit the gym, buddy. Yeah. Better be better be jabbed.
Speaker 3:Get on a cycle.
Speaker 1:But yeah. I mean these these movie schedules are famously tight, three months in and out crazy schedules and then you move on to the next one. There's that famous Henry Cavill story where he filmed Superman, wrapped, moved on to another movie where he had to grow out a mustache. He grew out a mustache and a beard, and then they said, hey, we gotta do some reshoots. You gotta come back to Superman.
Speaker 1:And he came back, but he couldn't shave his mustache and beard, so they had to change it in in CGI, and it looked terrible. Probably not a problem now with with deepfakes. That's actually a good use of AI and, something that probably shouldn't be very controversial, but obviously, everything in AI is controversial right now. But we will continue with Disney. They say, what happened next was evidence that Hollywood's must discussed much discussed, discussed, much much feared AI revolution won't be an overnight robot takeover.
Speaker 1:Johnson approved a plan, but the use of a new technology had Disney attorneys hammering out details over how it could be deployed, what security precautions would protect the data, a and host of other concerns. They worried that the studio ultimately couldn't claim ownership over every that the studio couldn't ultimately claim ownership over every element in the film if AI generated parts were in there. So if there's AI training data from a DreamWorks film in there and they use the DreamWorks training data to make a Disney film even if it looks like Dwayne the Rock Johnson, DreamWorks might come knocking and say, hey, give us a royalty. I think that's the risk. But the lawyers are having fun maybe.
Speaker 1:Full employment for lawyers over at Disney, clearly. Disney and Metaphysics spent eighteen months negotiating on and off over the terms of the contract to work on the digital double, but none of the footage will be in the final film. When it's released next summer, they went and shot it. A deepfake Dwayne Johnson is just one part of a broader technological earthquake hitting Hollywood. Studios are scrambling to figure out how simultaneously they can use AI in the filmmaking process and how to protect themselves against it.
Speaker 1:Is it sustaining or disruptive or both? Can't be both, but we'll see. While executives see a future where the technology shaves tens of millions of dollars off a movie's budget, they are grappling with a present with a present present filled with legal uncertainty, fan backlash, and a wariness toward embracing tools that some in Silicon Valley view as their next century replacement. And if you are trying to sell an AI tool into Hollywood, you gotta get on Adio customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level, and you can get started for free.
Speaker 1:So the Academy of Motion Picture Arts and Sciences is surveying members on how they use the technology. Studio chiefs are shutting down efforts to experiment for fear of angering show business unions on the eve of another contract negotiation, and no studio stands to gain or lose more in the outcome than Disney, the home of Donald Duck, Bell, Buzz Lightyear, Stitch, and countless others, which has churned out some of the most valuable and protected creative works in over the past century. So, my take on this. So, two years ago, I was hanging out with the founder of a very large generative AI image generation company. And he was telling me that by 2025, anyone with a laptop and an Internet connection could generate a full Hollywood movie about anything they want with a single prompt.
Speaker 1:And it was a hilarious conversation because we were on a Zoom call and his Internet wasn't working. And it was the classic example of like, the technology is amazing but we got a lot of stuff to iron out. So anyway, extremely aggressive timeline but obviously things are gonna change for Hollywood. So my question is, will Disney benefit? It feels like a moment to be in founder mode but Walt Disney died in 1966.
Speaker 1:So basically, everyone believes that Meta will benefit from AI even if they miss the train on owning the next dominant consumer tech platform. But if Disney got really AI pilled, what would that look like? I don't think they need to train their own foundation model just like they don't need to train their own. They don't need to build their own cinema cameras. Yep.
Speaker 1:They can just use IMAX when they the time calls for IMAX. They can use Blender when the time calls for Blender. They can use Houdini when the time calls for when the when when the the shot calls for some high level VFX. Yeah. But they do need to rethink how they structure their business and negotiate with unions and underwrite content.
Speaker 1:They might need to go more risk on not just from a brand risk position, but taking more smaller bets. We're in this weird barbell world where everything seems like it's either a $100 and it's shot on an iPhone. It's a viral, like, TikTok, or it's a $100,000,000 blockbuster with, like, $50,000,000 of VFX. Actually, that's kind of a low number. It's usually, like $300,000,000 production with a $150,000,000 VFX.
Speaker 1:And then no one sees it and it's a flop. But then they they hit every once in a while and they're great when they're good. But it's this weird like venture style betting at the high end. But there's nothing in the middle and maybe if that's like the death of the arthouse film. But I'm just wondering if in the age of AI, like maybe there's this interim step where Disney ladders down a little bit and gives like 10 filmmakers $10,000,000 each and says, hey, you're still required to deliver a ninety minute full film but you're doing it for 10 mil.
Speaker 1:And it's not quite Blair Witch level production one notch up. You gotta be creative. This is what makes people bullish on
Speaker 3:this idea that the the you know, historically like a TV show would film a pilot episode and they would use that to get the budget to shoot an entire season. And you can imagine now you can, you know, even for film, you can just make, you know, make the trailer ahead of time with AI. The other advantage that I think Disney has that's very real just going in and and why they're just broadly seem to be positioned very well here. Is that I think that I think that broadly like content customization will probably take off because you could Disney can make a film now and then you could make millions of different variations of it that become interactive with Mhmm. Like the underlying fan.
Speaker 3:So like imagine you're watching Moana Yeah. But like your kid is in the film, is a character in the film and you can now do that at scale. And how much more would you pay as a parent to have something like that?
Speaker 1:I have a funny story about this.
Speaker 3:But last thing I'd Yes, So customization and just like democratizing like like basically making making being able to make variations of films. Yep. I think is gonna be big. I think just the the time. It's the same way you it's it's so difficult to make a new luxury brand.
Speaker 1:Yep.
Speaker 3:It's so difficult to create it's easy to create IP. It's hard extremely difficult and time intensive to create valuable IP. And Disney's advantage is they have this sort of like three sixty in that they can make a film and they can bring it to Disneyland. They can bring it to a cruise. They can create physical products around it.
Speaker 3:And so, they develop IP in a way that that new entrants are not, you know, they don't have the benefit of like having a Disneyland where they can make new experiences that that increase the value of that IP, right? So Okay.
Speaker 1:Yeah. I think So two things. One, if I were to go back, one of my favorite Disney properties is Star Wars A New Hope, the very first film. If I went back and was like, let's customize that for me, I don't know that I would make any changes. I Like do I really want a scene where Han Solo breaks the fourth wall and says like, hey John, like I'm about to go you know save Luke at the Death Star.
Speaker 1:Like that doesn't improve the product for me. I actually like that it's just the vision of George Lucas. So I don't know about customization being better for me. I don't know what I would change.
Speaker 3:But here's here's an example of how to make like a magical experience for a kid. Yeah. It's like imagine after a movie ends
Speaker 1:Yep.
Speaker 3:A kid could interact with a character and ask it questions in real time like about about the story or conversation with them and that's what I'm talking about like bringing that IP life.
Speaker 1:Totally. Right now, that exists. And I was obsessed with this when I was a kid. I would I would I would watch Star Wars and then I would read the the the books that in the expanded universe. And I remember even having books that were just like encyclopedias of every single ship.
Speaker 1:This you could read into this a little bit more, but we'll leave that where it is. But I but I would learn every single every single ship. This is what a star destroyer does, and it would have all this backlog and stuff. And so, yes, I agree with you. That's very cool.
Speaker 1:You finish the movie, and then you can just interview Luke about how does how does the lightsaber actually work? And he can talk about the kyber crystals. That would be very cool. On the flip side, I had a very funny experience. I was watching a horror film in high school with a couple friends and I grew up in Pasadena.
Speaker 1:And this horror film just happened to take place in Pasadena. Like that's where they set the film because Pasadena, California is just like a place where you set films. It's just a real place. So if you've seen Kill Bill, which I know you haven't, but Kill Bill by Quentin Tarantino, there's a scene where where Uma Thurman just shows up and it says at the bottom, Pasadena, California because, like, that's where the character went. It exists in the real world.
Speaker 1:But this horror film that took place in Pasadena was terrifying because I was watching it, and I was like, this is happening here, and it's night, and it's dark outside. And, like, I now I'm so much more immersed. And so I was thinking back then that you could use, like, the IP address of the of a of a connected I think we were watching it on, like, a PS three, like a DVD player. Like, you could you could use the DVD player to dynamically change the location of this of the establishing shot. So you're like, this whole horror film is gonna take in take place inside of like one house where there's like a monster in the house and it's gonna be like the usual like, they're upstairs, they're downstairs, there's blood, there's you know, someone's running and chasing.
Speaker 1:Like, it could be any town USA, But they usually they usually establishes like this is happening in Amityville. This is happening in you know, some random town. Lake Placid. Right? They could easily just dynamically change that with a few establishing shots to just show you, okay.
Speaker 1:It's happening in Malibu. Right? And now, it's a lot scarier for you. So, I think there's something interesting there but again, it has to be the work of like an
Speaker 3:on It's Yeah. It's not something you can copy and paste either because Yeah. It works for some shows Yeah. But then others like the place is so obviously the place Totally.
Speaker 1:That it would throw you off as a viewer. Exactly. And so, I do think that the that the fully AI generated, fully custom content, that will exist but it will exist on independent third party platforms. It won't be the domain of Disney. The the this will be something where if you in the future, if you really wanna see like, you know, AI generated stories about surfing in Malibu, like there will be an endless stream of those and you will be able to go and and and experience that particular content.
Speaker 1:And you can already kind of experience that because there's probably some Instagram person who makes really great content about surfing in Malibu. And if you follow them, you get that vibe and that might be what you're into. And you can kind of like, and and it's handled just by the great democratization of creativity.
Speaker 5:Yeah.
Speaker 1:And we should talk to Samir about this later. He's coming on the show. So we can talk about the future of of of content creation and whatnot. But anyway, let's talk about public.com. Investing for those that take it seriously.
Speaker 1:They got multi asset investing, industry leading yields and they're trusted by millions. Go check it out. Anyway, let's hit the timeline. Let's go through the hottest posts on the internet.
Speaker 3:The moment, the video.
Speaker 1:Last Friday, after we wrapped the show, it was a timeline in turmoil over in DC. I believe the the head of the Bureau of Labor Statistics was fired. This was after a negative job report. It was very controversial. People were not very happy about this because this is the data that we use to judge the health of the economy.
Speaker 3:Insane whiplash too because big tech, you know, Thursday Ripping. Printing Ripping. Figma.
Speaker 1:Massive Massive.
Speaker 3:Yep. You know, biggest gain in a very long time. Yep. And then it turns out the real economy or at least the statistics coming out of the bureau of labor statistics were not looking great. And the prior two months
Speaker 1:Got revised down. Revised down. And so we are still adding jobs, but mostly in health care
Speaker 3:and Over at Accenture. Yeah. Yeah. Think they're cutting as well.
Speaker 1:Yeah. And so and so broadly, The US economy feels strong, but we are having some unemployment upticks. And so that's always, you know, a canary in the coal mine. But Ray Dalio chimes in with
Speaker 3:his taste. Also, believe, like, tourism is is down pretty much across the board.
Speaker 1:Yeah. And there's lot of debates
Speaker 3:about bunch of
Speaker 1:People immediately were were digging into what's driving the the job losses. Is it is it does it have anything to do with Trump's immigration policy? There were a lot of different a lot of different, ideas as to why the why the job numbers are what they are and how how bad are they. Obviously, you can see in the market, the market tanked on Friday, but then is up today. And so there's, you you know, there's not necessarily consensus now that we're, like, entering a recession or anything like that.
Speaker 1:But it's certainly something to watch and something to dig into. And, obviously, we want high quality data about everything from GDP to CPI to unemployment. And so Ray Dalio is breaking down his argument for firing the head of the Bureau of Labor Statistics. He says that's because its process for making estimates is obviously obsolete and error prone. And if there's no good plan in the works and there's no good plan in the works for fixing it.
Speaker 1:The huge revisions in Friday's unemployment numbers are symptomatic of this, especially because the revisions brought the numbers toward private estimates that were in fact much better. I assure you that this is something that I know a lot about because of how I use data to follow the economy and bet on where it's going. Of course, if the way most people in the media are con are conveying president Trump's motivation for the firing is correct, such as the New York Times saying, quote, when president Trump didn't like the weak jobs numbers that were released on Friday, he fired the person responsible for producing them. That would be a big problem because leaders manipulating numbers that distort the truth to suit their political objectives is a classic sign of the loss of a functioning system with the rule of law and checks and balance. And the loss of these things leads to the loss of confidence that underpins our whole economic and political system.
Speaker 1:So it'd be good if president Trump made his thinking clear. In any case, we do need big renovations renovations to the ways the government estimates what's going on in the economy to make them more, not less accurate. And so this is interesting because Ray Dalio is not a perma bull on America by any stretch of the imagination.
Speaker 3:Yeah.
Speaker 1:He literally wrote a book about the changing world order that was basically like America's cooked. I mean, to some extent. Was like talking about the rise and fall of nations and is and he's been very bullish on China and and sees China's rising nation. So he he he is not someone that is just constantly bringing the gong for America's, you know, unrelenting progress. And so this is interesting take from him.
Speaker 1:And then and then, I I mean, I have personal experience with with how the how the government collects data. I didn't work at the Bureau of Labor Statistics, but I I I worked I worked at the census department. From the
Speaker 3:people that bought you that brought you the Department of Motor Vehicles labor statistics.
Speaker 1:Exactly. And so, I always in in in the year February, the economy was ripping and I believe the census was done by volunteers because it wasn't it was just kind of like, oh, let's let's let's get a poll of people. But then in, in 2010, the economy was in a recession after the great global financial crisis, and it was seen as a stimulus program. So people were making like 20 to $25 an hour, which is very good back then to go around and survey people. But the survey data is a little messy and I was always wondering You told her
Speaker 3:a story on the show before.
Speaker 1:I don't think we have time today but
Speaker 3:No time.
Speaker 1:Should at some point. But but basically my my takeaway was always was always like, couldn't we just ask Google? Like, I have a feeling that the big tech companies know not just exactly how many Americans are in each each jurisdiction, but they know everything about them. Their IP addresses and their geolocations. Like, the big tech companies truly know so much.
Speaker 1:And I know you're gonna say, like, well, not everyone uses Facebook. And and that's true. But if you aggregated data across, like, most of the cell networks and most of the web services like you could get a very accurate reading much more so than just randomly going door to door and seeing like, oh this person opened the door and talked to me which is like how the census currently works. And so it is interesting that that the unemployment numbers were the government numbers were less accurate than the private estimates, which are just like because obviously, every hedge fund wants the data and they want the data earlier than the government puts it out. And some traders obviously trade on top of the BLS statistics and those are important, but the private estimates are better.
Speaker 1:And so interesting to see where this goes, how much modernization can be done, how much. And then there's always the question of like privacy if you're like tracking everyone. Because it's like there's a lot of people out there who might say Wow. I don't want the I don't want the government to know if I have a job or Big two
Speaker 3:data. Palantir announcing earnings. Oh. I guess in I'm assuming in thirty minutes. What's going Another post here from Buco, Bucko, capital bloke.
Speaker 3:Yeah. He says, Trump, we need to cut. BLS, turns out the job market is weak. Trump, no. Not like that.
Speaker 3:Another post, interesting data point here, Derek Thompson says, spending on services especially travel and tourism has declined for three straight months for the first time since 02/2008.
Speaker 1:And
Speaker 3:expanding when Trump the The US economy is showing strains of weakness. Outside of the pandemic, the employment rate for college graduates over 25 is rising fast and is higher now than any year since 2014. Job growth in the past three months is the lowest since 2010, and spending on services has declined for three straight months for the first time since 02/2008. How are companies, individuals, the government supposed to deal with an economy slipping toward recession if we're if we're smashing the tools. We need to know how fast we're falling.
Speaker 3:In a tempest, it's unwise to ransack the navigation system. That is Derek Thompson's What else else we got?
Speaker 1:We got Eight Eight Sleep dot com. Get a pod five. They have a five year warranty, thirty night risk free trial, free returns, free shipping. Continue, Jordy.
Speaker 3:It was absolutely brutal having to cover the Figma IPO without sleeping on an eight Bates and ramps ramps series e two. Yeah. These are big days.
Speaker 1:Yeah. But green shoots for us.
Speaker 3:Code TPPN of course if you want to make the switch. Yes. Benji Taylor says, people are finally starting to realize how few truly great designers there are and how disproportionately valuable they are.
Speaker 1:Yep.
Speaker 3:If you missed our interview with Dylan on Thursday, he said that design is becoming an enduring edge Yep. For companies. We've seen this with companies like Linear which came into a crowded category and is dominated by just building a truly thoughtful product. Yeah. And this is something
Speaker 1:People love to to like reduce design to to nothing. Oh, cursor, windsurf. These are just forks of Versus Code. And it's like, yes, but like if it was truly perfectly competitive, why is there a why is there a split in revenue at all? Why isn't it just fifty fifty?
Speaker 1:Well, like, there's probably some design and and and differentiation in the product that you don't realize until you're actually a DAU of these, that is what's driving the adoption.
Speaker 3:Yep. But Sorry. Yeah. I have worked with hundreds of designers across my career and there's only a handful that when people come to me and say, know, I I wanna recruit a founding designer or something like that.
Speaker 1:Jacoby.
Speaker 3:Jacoby. Jacoby in the comment section.
Speaker 1:Yeah. Oh, he's there?
Speaker 3:No. No. No. No. He's in the comment of Benjie's Yeah.
Speaker 1:Yeah. Anyways, on design something, design a billboard, put it on adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology out of home expertise and data to enable I efficient seamless ad buying across the globe.
Speaker 3:We didn't make it to our billboards in New York.
Speaker 1:We didn't.
Speaker 3:But I felt like I'd been there because so
Speaker 1:many people had shared that. Yeah.
Speaker 3:I'd shared that.
Speaker 1:Still love hanging fruit in billboards.
Speaker 3:An Anjanae says, Mistral, eleven Labs, Black Forest Labs, Lovable, Helsing, Granola, European AI scene is on fire. So I just wanted to give some credit.
Speaker 1:Stop comment. Not to mention Lovable. And then Anj just says, reread the list like it's literally the fourth one. That's very funny.
Speaker 3:Anyway And I know all these companies.
Speaker 1:This is this is bait. Well, this is It's bait for Because you you know I I I refuse to step foot on the old continent. And so by posting something like this, this is just this is trying to get me out of golden retriever mode, out of being nice. This is trying to bait a dunk from me because nothing makes me more upset than anything that's not America.
Speaker 3:Well, one thing I would say I think you can be happy that the cap tables of these companies are majority US Yes. Cap
Speaker 1:tables. I'd like the cap tables to get a 100% American owned and then I'd like the companies to relocate to America. What
Speaker 3:about the teams?
Speaker 1:Everyone and all the customers. Just move everyone to America.
Speaker 3:Labs Unicorns games. Guarantee citizenship. From my understanding is primarily based in New York.
Speaker 1:The truth zone going on. But I think The truth zone.
Speaker 3:Anjaney would know better considering Andreessen is an investor. Yeah. Rune says
Speaker 1:This is funny.
Speaker 3:It's true what the misinformation is saying about us. We indeed have Lilith. Lilith, progenitor of human life locked up under the Mission Bay headquarters.
Speaker 1:Don't read the comments on this one.
Speaker 3:We're skipping over the comments.
Speaker 1:Very funny. But anyway, yeah there was a GPT five article that went out and this is Rune kind of putting in the truth zone and saying like hey we're just grinding and we're building and you know, tell your story a different way basically.
Speaker 3:Baez Lord says, I propose we create the Terrence Tau Institute for Math and Science and fund it with tech money. Terrence Tau got his is funding at UCLA
Speaker 1:like this.
Speaker 3:Cut not specifically but but but funding was cut broadly due to UCLA's reaction to
Speaker 1:Yeah. He was sort of collateral damage. Yeah. In in a in a in a political fight between UCLA and the current administration. And so I think someone should step up and keep funding him.
Speaker 1:I think there's certainly value in having him do extremely undirected research. He could land in a lab and do cool stuff. I was saying that he
Speaker 3:should join Vlad's
Speaker 1:That would be very Yeah. So Vlad Tenev, founder of Robinhood has a new foundation model company or AI lab focused on math and he's got the money to provide Terrence Tau with everything he needs and more. And I think this would be a great use and if it doesn't happen soon, we're gonna start nagging every billionaire into doing it. Gonna create the shame on you list for billionaires who have not donated to Terrence Dow.
Speaker 3:You know what?
Speaker 1:I think it'll be taken care of.
Speaker 3:Says, we now have a big story about why this time is different, rapidly increasing debt funding one single sector, an opaque corner of the financial system that has recently grown, systemically important lenders enmeshed in the new sector.
Speaker 1:Yeah.
Speaker 3:And I just wanna say I really
Speaker 1:I feel like calling top signals was like a two weeks ago thing. I think we're back at this point and I I don't know why he's calling top on everything right now.
Speaker 3:I just hope that this time the music never stops.
Speaker 1:Me too.
Speaker 3:Because I
Speaker 1:I like dancing. Yeah.
Speaker 3:Who doesn't like Yeah. A little game of musical chairs?
Speaker 1:But also, I mean maybe this time there's enough chairs. Everyone just takes
Speaker 3:a seat. One said if you're playing musical chairs you you have to stop the music. Yeah.
Speaker 1:I mean musical chairs, you could still land on a chair. There's only one person gets gets eliminated. So just don't don't be that person. Don't don't Don't
Speaker 3:be that that guy, pal.
Speaker 1:Yeah. Don't put yourself in the in the FTX bucket.
Speaker 3:Do we have time to to go through this?
Speaker 1:We we have ten minutes.
Speaker 3:Okay.
Speaker 1:I think it's probably more
Speaker 3:Smith on no opinion. Will data centers crash economy? This time, let's think about a financial crisis before it happens. The US economic data for the last few months is looking decidedly meh. The latest employment numbers were so bad that Trump actually fired the head of bureau of labor statistics.
Speaker 1:We don't know that that's why but Yeah. It's a reasonable take.
Speaker 3:Accusing her, yeah. His take would be, you know, she's been messing up the numbers a lot and we need a new approach, know, kind of
Speaker 1:Yeah.
Speaker 3:But Accusing her of manipulating the numbers to make him look bad but there's one huge bright spot amid the gloom, an incredible AI densator building. Boom.
Speaker 1:Let's go.
Speaker 3:Let's go.
Speaker 1:Look at the chart. Pull up the chart. Scroll down. Capital expenditures quarterly. We're so close to touching a 100,000,000,000 across Meta, Google, Microsoft, and Amazon.
Speaker 1:You add in you add in the independent CapEx that's going on, and you're easily in 100,000,000,000 a quarter. You'll love to see it. A little disappointing q one, but q two, we came back strong.
Speaker 5:Strong.
Speaker 1:Yeah. No one's really talking about the the the sell off in q one.
Speaker 3:Noah says inference compute now represents most of the cost of running advanced AI models and increases in inference computer responsible for many of the ongoing performance gains. So compute needs are probably only going to grow as AI keeps getting better. Whoever provides us compute is gonna make a huge amount of revenue. Whether that means they'll make a lot of profit is another question, but let's table that for right now. We reported earlier that Microsoft's margin on the on the, like, token and inferencing side was something like 30 to 40%.
Speaker 1:I would just zoom out and look at it as like, what's CapEx? We're talking about a 100,000,000,000 a quarter. What's token related revenue? So add OpenAI, they're making $3,000,000,000 a quarter. Anthropic's making $1,000,000,000 a quarter.
Speaker 1:You know, obviously, there's, you know, core AI stuff happening in all the hyperscalers. But you add all that up, we're making like maybe 10,000,000,000 a quarter in revenue right now on AI stuff and we're investing a 100,000,000,000. And so like, we're not right side up on the trade generally, but there's no sign that
Speaker 3:if you build a factory Yeah. Do you expect to to to generate profit that month, that quarter, that year, the next year, potentially now?
Speaker 1:I mean, this stuff depreciates, like, quickly because it doesn't stay on the frontier. But, like, the base workload for just generating tokens for GPT four o like reasonable questions and
Speaker 3:just Like basic
Speaker 1:workload could stay on those h 1 hundreds for a decade and you could make that money back.
Speaker 3:Yeah. It is interesting that Apple, covered after their earnings. Tim Cook called out that they're using third party like lenders to finance a lot of their CapEx. Yep. And they're choosing not to deploy too much capital themselves.
Speaker 3:So Noah says, roughly speaking, Apple is choosing the former while the big software companies Google, Meta, Microsoft, and Amazon are choosing the latter. These spending numbers are pretty incredible. We covered this chart already. For Microsoft and Meta, this capital expenditure is now more than a third of their total sales.
Speaker 1:Let's go. Let's go. If you're looking to deploy a capital expenditure of your own, get on Bezels. Get bezel.com. Your Bezel concierge is available now to source you any watch on the planet.
Speaker 1:Seriously, any watch. It goes on the balance sheet. It's CapEx. It's personal CapEx. Do it.
Speaker 3:Here's Chris Mims of the Wall Street Journal. Mag seven tech firms have collectively spent a record $102,102 and a half billion on CapEx in their most recent quarters, nearly nearly all from Meta, Alphabet, Microsoft, and Amazon. Apple, NVIDIA, and Tesla together contributed a mere 6,700,000,000.0. Investor and tech pundit Paul Kiedrowski says that as a percentage of gross domestic products, on AI infrastructure has already exceeded spending on telecom and Internet infrastructure from the .com boom, and it's still growing. He also argues that one explanation for The US economy's ongoing strength despite tariffs is that spending on IT infrastructure is so big that it's acting as a sort of private sector stimulus program.
Speaker 3:CapEx spending for AI contributed more to growth in The US economy in the past two quarters than all of consumer spending, says Neil Duda, head of economic research at Renaissance Macro Research, citing data from the Bureau of Economic Analysis. Here's that chart from Kudrowski, who has been doing excellent job following the story as it unfolds. So we can pull this up right now. Infrastructure CapEx as a percentage of US GDP by era. And you could see railroads.
Speaker 3:We went pretty
Speaker 1:What's weird is that is that he's showing telecom CapEx in 2020 when that was not like the boom time for telecom. Obviously, five g and fiber infrastructure are being built out, but this doesn't surprise me. We gotta get this number up. We gotta get to 6% of GDP for sure. 50% of g a 100%
Speaker 3:talked of about this.
Speaker 1:Yes. Yes. Yes. If you play out the scale is all you need thing, you wind up investing like 200% of g global GDP eventually. And it's just like the math
Speaker 3:doesn't Masa is like, I can I can come up
Speaker 1:with I'm good for it? I'm good for it. I mean, technically, you could invest more than 100% of global GDP with enough debt. Like you can or you could just save up for a decade. Like the humanity could save up and then just deploy it all at once.
Speaker 1:Like like wealth is not the same as GDP. GDP is an income figure. Yeah. And wealth is a is a balance sheet figure. CapEx is a deployment from from the balance
Speaker 3:sheet Not income. Yeah.
Speaker 1:I mean, loosely, you you you should benchmark GDP to to to revenue or something like that. More more than just like like GDP, like, The US's GDP is not how much money The US has right now or can spend. It's just how much money is flowing through the economy. Yep. Anyway.
Speaker 3:Noah says, think it's important to look at the telecom boom of the nineteen nineties rather than the one in the twenty tens because the former led to a gigantic crash. The railroad boom led to a gigantic crash too in 1873 before the investment peak on Kudrowski's chart. In both cases, companies built too much infrastructure outrunning growth and demand for that infrastructure and suffered a devastating bust as expectations reset and loans couldn't be paid back. Yep. And doesn't Tyler Cowen also have a bunch of writing on on why these sort of booms and bubbles are actually can have it tremendously
Speaker 1:Tyler Cowen has written about it but I think you're thinking of Bern Hobart who wrote the book Boom for Stripe Press. Fantastic book. You should go check it out. But basically, it's just that you get yes, you do get these gyrations, these market corrections, but the booms create new opportunity at lower prices because you have all this dark fiber. Who bought up that dark fiber?
Speaker 1:Google. And so we got Google post crash, actually. Yeah. And we got Facebook post crash because the infrastructure was there and the railroads had been built. And you could see the same thing happening where there's a whole bunch of inference capacity that's out there.
Speaker 1:And then it's like, yeah. We're really not using it all because we're kinda good with GPT four class models, and we don't need to inference at the 4.5 level and those monster models because it's kinda not worth
Speaker 3:good with my McKinsey analyst agent.
Speaker 1:This one. But then in the next ten years, while we're kind of licking our wounds from the sell off, somebody goes and figures out how to actually use that crazy, crazy higher amount of inference and and the capacity is there, which is very cool. But anyway Now it's if looking to take a vacation and go visit a data center, you gotta book a wander so you're sleeping in luxury while you're going out to the data center.
Speaker 3:That's right.
Speaker 1:You can find your happy place. You can book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge It's big vacation home but better. Yes. That are closest to the data centers.
Speaker 3:To the big data center. Yeah. If you wanna do some data center tourism.
Speaker 1:Sort of like a pill.
Speaker 3:Noah says in the context of the telecom boom and the railroad boom, in both cases the big cap ex spenders weren't wrong. They were just early. Eventually, we ended up using all those railroads and all those telecom fibers and much more. This has led a lot of people to speculate the big investment bubbles might be actually be beneficial to the economy since manias leave behind a surplus of cheap infrastructure that can be used to power future technological advances and new business models. But for anyone who gets caught up in the crash, the future benefits to society are a are of a cold comfort.
Speaker 3:So a lot of people are worrying that there's gonna be a crash in the AI data center industry and thus in big tech in general. If AI industry revenue doesn't grow fast enough to keep up with the cap ex boom over the next few years. A data center bus would mean that big tech shareholders would lose a lot of money. Like .com shareholders, you're not losing if you never sell. Like .com shareholders in 2000 it would slow the economy directly because big tech companies would stop investing.
Speaker 3:But the scariest possibility is that it would cause a financial crisis. Financial crises tend to involve bank debt. When a financial bubble and crash is mostly a fall in the value of stocks and bonds, everyone takes losses and then just sort of walks away a bit poor like in February. Georgia, Schulerick and Taylor surveyed the history of bubbles and crashes, and they find that debt, also called credit and leverage, is a key predictor of whether a bubble ends up hurting the real economy.
Speaker 1:So I think we need to dig into this more. We need to learn more about private credit, have some folks on who are financing this stuff, analysts who are covering golden era of private been. And I think that there's a there's another three hours of of in, you know, discussion. We had one the
Speaker 3:We had one of the founders of CoreWeavon. Yeah. We should ask him to to introduce us to a couple of the lenders Yeah. That kind of financed that business Yep. And ended up printing.
Speaker 1:Yep. Yeah. I mean, I just off the top of my head, I've been talking to a bunch of folks about this. And it's not quite the same because you can hold private credit for a much long longer time, and there's a lot of this stuff is being funded off the balance sheets. They're just cutting a dividend or or drawing down on a cash balance if you're a mag seven company.
Speaker 1:So there are a lot of differences, but, definitely worth digging into. So we will cover this, more in the coming days. But we have our first guest of the show, Dan from Armada. Welcome to the stream. How are you doing, Dan?
Speaker 6:Hey, guys. I'm doing great. How are you?
Speaker 3:I'm good. Welcome to the show.
Speaker 1:Thanks so much for joining. Appreciate it. Can you kick us off with an introduction on Armada and how you're explaining the business these days?
Speaker 6:Yeah. So Armada is building the hyperscaler for the edge. Mhmm. Looking at the map of the world, there's about 30% of the world where you have these big hyperscale data centers. I mean, 70% of this the world doesn't have AI infrastructure today.
Speaker 6:And so we are filling the gaps in infrastructure, building that hyperscaler for the edge.
Speaker 1:Got it. How much of that is military versus, you know, that we hear about the oil and gas industry? They need a data center on-site. They're in some remote location versus just energy price arbitrage. Let's go where the energy is cheap.
Speaker 1:Put a data center there. Crusoe was doing that early on in a little bit less of a portable package. But how are you thinking about the the the market and kind of the most the most tangible opportunities that you can explain the business through?
Speaker 6:Yeah. It's it's both. So we're working with critical industries, lot of energy companies, oil and gas, mining, manufacturing, logistics. And then in the public sector, we're working with the DOD as well as allies. And then also doing a lot with emergency response, anything that requires sort of split second decision making processing of large amounts of data in more remote locations, that's a real focus for us.
Speaker 6:And then what we've seen is that now that the kind of blocker for AI is moving from just the chips to energy. And I think Anthropic just came out with a white paper last week where they're talking about we need to unlock 50 gigawatts of energy by 2028 for AI. And so we actually just launched a new product, which is called Leviathan, is megawatt scale AI data centers that can rapidly co locate with areas where they're stranded lame of energy. And you can have a a sort of a plug in plug and play AI factory in weeks versus years with the traditional data center. And that's important because we've got about six gigawatts of stranded energy around the country.
Speaker 6:China's moving really fast. We need to unlock all that energy in order to win.
Speaker 1:Yeah. Walk me through kind of the shape and scale of the products. I've seen the
Speaker 3:I'm shipping curious what what does stranded energy actually look like? I have a bunch of guesses, you know you know, infrastructure was overbuilt in a specific Beached whales.
Speaker 1:There's beached whales, you go, you extract the whale oil right there. Yeah. And then you can burn it and generate your power for your data center. No.
Speaker 6:Just like that. Just like that.
Speaker 1:Just like that.
Speaker 6:No. I mean, there is a ton of stranded energy around the country and then also, you know, in allied parts of the world like The Middle East. If you if you looked at, like, the top energy sources, what's top of the list? It's it's natural gas. Right?
Speaker 6:You have a lot of stranded natural gas in places like, you know, North Dakota, Texas. We're already working with developers that have a lot of that land and stranded energy, and, you know, they're looking to utilize it for AI infrastructure. And if you look at, you know, the the AI action plan that just came that came out, I think part of what we're trying to do is say, okay. We have all this stranded energy. We're gonna need hyperscale data centers, you know, sort of gigawatt scale data centers.
Speaker 6:We need to build those really rapidly, but we're also gonna need to build distributed infrastructure, distributed data centers that can be deployed very quickly to to use that stranded power.
Speaker 1:So when I'm when I hear stranded natural gas, does that mean, like, some exploration company has gone and and done fracking experiments or research to understand that there's natural gas there, but maybe there's just no pipeline to extract it so you can get it out of the ground, but it's very expensive to move somewhere else that's more valuable? Or is it something else that's going on? Like, how can natural gas be stranded, basically?
Speaker 6:Yeah. That's definitely, you know, some of the scenarios. The you know, other scenarios are, like, there are major energy companies around the country that have, you know, sort of flare gas that's just being released today in the atmosphere. So they they're they're under pressure to do something with that gas.
Speaker 1:Yep.
Speaker 6:And so what they're now doing is they're actually using turbines to convert it into electricity so that you can power infrastructure, some for their own internal use, but then also they're looking at this as, hey. I can create a new revenue stream. And so it's a mix of different situations, but but those are common ones that we see.
Speaker 1:Makes sense. Let's go back to the actual product, what it looks like. I've seen shipping container renderings. What are the different scales and products that you think are most important to push forward right now?
Speaker 6:Yeah. So, again, we're we're building the hyperscaler for the edge. And what's unique about us is we're doing it full stack. So you the hardware, the software, and the AI. And the easiest mental model to have is, like, think about one of the current cloud providers.
Speaker 6:Think about, you know, Azure, AWS, GCP. What what are they? They're they're, you know, really just full stack infrastructure companies. They focused on building these large hyperscale data centers in, you know, areas that had a lot of data, major metro areas. But, again, that's only 30% of the world.
Speaker 6:So, basically, what we're doing is focusing on the remaining 70%. But, otherwise, it's a similar type of approach. We're building full stack. We provide everything to customers as a service in a way that's totally turnkey. And I'd say that the biggest difference is we we see that a world where it's gonna be distributed compute.
Speaker 6:So we're building rapidly deployable mobile infrastructure that can be co located with not only energy, but data. Because what we've found is that you've got, you know, some of these energy companies that have oil rigs that are generating one to five terabytes of data every day, similar situations with mining companies, you know, similar situations on a a battleship, right, where you might have just huge amounts of data being generated from drones, autonomous technology in the middle of the ocean. Now you have connectivity via Starlink or Star Shield and other types of connectivity, but you also need to compute there locally to do a sort of real time data processing at the edge.
Speaker 1:Are you seeing more demand for kind of, like, tokens as a service managed models or just pure infrastructure, bare metal, let me do whatever I want on it?
Speaker 6:It's all so, again, it kinda comes back to think about, like, the cloud provider. Like, there's a reason why Amazon Web Services is called Amazon Web Services. Right?
Speaker 1:It's it's the it's the
Speaker 6:services that the people care about. And so for us, we also sell services or so we call them solutions where it's like, there's a specific thing that the customer is trying to do, whether it is, you know, rapidly standing up an AI factory in some location location where they have stranded energy, or it's a scenario where they have lots of unstructured data, let's say, from drones, and they wanna process all that data in real time versus having hours or sometimes, you know, days of delay so that they can do a specific thing. A good example is we're working with the the state of Alaska, their Department of Transportation, and they're using our entire platform. They're managing all of their connected assets, meaning, like, Starlink terminals, Skydio drones, SD WAN devices. They used to have over a day of latency to process the unstructured data from the drones for response to avalanches in remote areas.
Speaker 3:Wow.
Speaker 6:And, you know, we're helping them get to near real time to respond to those types of things. And so, that's that's what we're seeing is there's different specific problems that these customers have at the edge, and then we're unique in that we actually solve them full stack.
Speaker 3:Jordy? I'm curious how many how many sort of like systems do you want to have? Like, what what are the sort of like more near term goals in terms of deploying systems when I think of the word Armada, you know, obviously you think of Ships. Like the fleet. You know, a fleet that's stretching as far as the eye can see.
Speaker 1:Obviously, there's Tesla power battery pack where I can figure like one and it's a couple grand or I can spend a $192,000,000 or something if I buy a ton of them, but it's really just like a lattice. Yes. It's super Yeah.
Speaker 3:And even, how how you're managing kind of, like, how to prioritizing different customers when I'm sure you get calls all day long and somebody's like, hey, need a data center in in Antarctica. And you're like, well, like we're more focused on, you know, the Northern northern half The
Speaker 1:IMO is next week. I need a data center.
Speaker 6:Yeah. Exactly. No. We're we're exactly right. We're focusing on the the largest sort of mission aligned entities in in the world.
Speaker 6:And what I mean by that is we're working with some of the largest energy players in the world. We're working also with, you know, the DOD. It's public. We're working with the US Navy. It's kinda nice that the the company's called Armada because Perfect.
Speaker 6:You can handle that. But the the the way that we approach it, we really focus on customers that we can see that they will have thousands of what we call connected assets. So, you know, take take the navy, have a a galleon. We call our modular data centers galleon sticking with the Armada theme. Have one on every ship.
Speaker 6:Mhmm. You know, have one in strategic locations around the world where we have bases or maybe more of a mission scenario being able to support that. Similar situation, if you think about, like, a really large energy company. Like, we were in the news with Aramco and Microsoft, where we've already deployed our technology. We're starting with one site, but they have rigs and refineries all over the world, onshore, offshore.
Speaker 6:And so the idea is that this is distributed infrastructure for all of their operations. And what's really interesting is if you open up our operating system, we call it we call our platform the Armada Edge platform, AEP, you see a fleet map, and it shows all of your galleons as well as any other connected assets that you have all in a single place. And so what we wanna be is that single partner for the most important organizations in the world, you know, obviously aligned with the The US for all of their operations.
Speaker 1:Can you talk to me about the the history and development of Starlink that feels like a foundational technology that unlocks a lot of what you're doing. How big is Starlink? How useful is it? Where is it going? Where where do you expect the capability unlock points to be?
Speaker 1:Should is there a framework where I should be thinking about Starlink in the same rollout as, you know, three g, four g, five g, something like that? I imagine that we're we're still in, you know, the exponential, rollout phase of that technology.
Speaker 6:Yeah. Absolutely. So Starlink only launched in public beta in November 2020. Mhmm. So it's a relatively new technology.
Speaker 6:The first couple of years, they were focused on consumer business, and then they started selling to enterprise and then also working with the government with Star Shield. So you're really only talking about a few years, and they're now in well over 140 countries all over the world. Mhmm. And what's been really interesting, we've been working with Starlink from the beginning of Armada. I've been working with them since the the inception of the company, and we have a a great partnership.
Speaker 6:But the technology is continuing to get better and better and better. When we first started working with them, a lot of people were using it in, like, pockets. Take it like a a really large energy company. They might use it as as backup form of connectivity. Yep.
Speaker 6:But they wouldn't use it as a primary. What's ended up happening is that everything that Starlink does is getting better really, really fast, including, you know, new generations of the birds, the satellites up in space, which are getting better performance. There's, you know, new types of terminals. There's even, you know, a new kind of, like, priority lane. They call it multi KU where you can get better performance, a little more expensive.
Speaker 6:So what's happened is a lot of these, organizations, they started to use it as backup, and now they're actually starting to use it as a primary source of connectivity. And what we expect is over the next five years, it's gonna cover the entire globe, and you're gonna have, you know, LEO connectivity that's as good as having fiber in a lot of these locations. And so we're we're building for that world today and sort of completing the rest of the compute stack for for that world.
Speaker 1:In terms of fiber, I mean, that seems like speed, but is is there a world where when you're you when you're in the data center space, like, you need the pipe to be extremely big, and and we're we're hoping that, you know, the rollout of Starlink will enable bigger and bigger pipes. Is that the correct, like, mental model?
Speaker 6:Yeah. What's what's interesting is that a lot of times, people will not wanna send all the data back. So Sure. They they only wanna send the met metadata back. So what's very kind of, like, synergistic between what Armada does and what Starlink does is we can work with them.
Speaker 6:The the performance, you know, will continue to get better and better from a latency standpoint. We will handle all of the, you know, local data processing, and then we'll use Starlink to send the metadata back. Right?
Speaker 1:Yep.
Speaker 6:And there's really interesting things also as we're continuing to evolve what we do. So we started out with inference. That was the primary focus was like, okay. You take an AI model that's been trained in the cloud. You run it at the edge on our infrastructure.
Speaker 6:Now with this Leviathan launch that we recently did, we've kind of completed the picture for a AI factory that can be deployed in weeks versus, you know, years with a traditional data center, and it's still mobile. So you can relocate it as needed. And what is interesting there is that you could do very cool things with, like, federated learning. People are gonna wanna take these models, sort of fine tune them for different scenarios that and run them at the edge, but they're gonna wanna leverage the improvements in the model across all of their different sites. And so the way that we're evolving, the way that Starlink's evolving, we think we're gonna continue to unlock a lot of new, high value use cases that way.
Speaker 1:Yeah. Can you walk me through some of the some of the, like, enterprise, like, infrastructure that you bring to a customer that's not out of the box with Starlink? Because I know that SpaceX is a fantastic consumer product, but there's a certain level when you get into the enterprise workloads that you need another partner in the stack to actually deliver capability.
Speaker 6:Yeah. We're we're seeing that customers wanna use multiple connected assets. We call all these things connected assets. And and it's, you know, LEO and GEO satellite connectivity. So they they sometimes will use Starlink, but they'll use Starlink plus, like, a Hughes or Avaya SATA GEO satellite connectivity.
Speaker 6:Yep. They'll use SD WAN devices, like Cradlepoint and Peplink. They'll use drones. Like, we have partnership with Skydio on the drones.
Speaker 1:Oh, wow.
Speaker 6:And so what these customers want is they want somebody to help bring it all together to solve their problems at the edge, and that's that's what we do. And so a lot of times when we'll get involved, you know, working on on opportunities with Starlink, they are already working with Starlink, but then there's something else that they wanna do in addition to that. And we help we help that. And then the other thing, there's, you know, different things that customers want just in terms of optimizing for different scenarios based on not just performance, but for cost.
Speaker 1:Mhmm.
Speaker 6:And so we help with a lot of those types of use cases.
Speaker 1:Yeah. What what's the scale of the business these days?
Speaker 6:So we've been growing really fast. We've we've only been around for a little over two and a half years. Wow. We spent the first year in stealth. Yeah.
Speaker 6:Raise now well over $200,000,000 from a bunch of great investors
Speaker 1:like Congratulations. One of the
Speaker 6:the really exciting things that happened last year is that Microsoft ended up in making investment in the company. They invested in this round, and then I met with Satya Nadella.
Speaker 1:Yeah.
Speaker 6:He got excited about what we're doing. And so he ended up talking about us on stage at Ignite, their big annual customer conference. And we're going to market really globally now with Microsoft and and and SpaceX among other partners. And we're working with some of the largest companies in the world. I mentioned Aramco.
Speaker 6:There's a bunch of other large oil and gas companies. We're working with some of the largest mining companies. And then, you know, we're working with the Navy that's public and then with states. So we're kind of just continuing to focus on ones where, like we were talking about, we can see fleets of connected assets, like thousands and tens of thousands of connected assets being deployed all over the world and then, you know, scaling to become their single partner for the edge.
Speaker 1:Yeah. Do you think, the relationship with Microsoft looks more like in the future, I go to Azure and I need to do a workload and leveraging stranded energy just gets me a better price? Or do you think it's more like a channel partner where a really big enterprise client goes to, Microsoft and, they can they can, route to you as a specific solution for a very, like, you know, I don't know, like like, off the off the beaten track use case.
Speaker 6:Yeah. I think what customer already seeing is that customers wanna optimize more and more workloads between the cloud and the edge. Mhmm. And I I think that's gonna continue. Like, the cloud is always gonna be there, but more workloads are gonna also be run at the edge.
Speaker 6:And so the more those things work hand in hand, the better it is for the customer. Yeah. And so how how it's working today is most of our customers are already working with Microsoft. They have really large, you know, agreements. They have Azure credits.
Speaker 6:They can actually buy all of our products under their agreements with Microsoft and using those credits.
Speaker 1:That's interesting.
Speaker 6:Then Microsoft sellers also get some credit, so it kind of all works together. Everybody wins. Yeah. But what's nice for the the the customer is there's different capabilities that they already are using from Microsoft that have never been available in these more remote sites, and we're making them available, in these more remote sites. And that can range from, you know, the latest AI model that's been trained in Azure that somebody wants to run locally at the edge.
Speaker 1:Yep.
Speaker 6:So, you know, things that are more basic. Like, an example is in the galleons, you can have what's called Azure Stack, which is a piece of hardware that Microsoft produces.
Speaker 1:Oh, interesting.
Speaker 6:And a lot of applications that these companies like to use Yeah. Are designed to run, and they already run on that, but that's never been available at the edge.
Speaker 3:So Sure.
Speaker 6:We we had a and a partnership that we announced with Microsoft and also Halliburton Yeah. Where there's a sis a series of applications for, like, production automation that Sure. These large energy companies are already using in their more connected sites. Yep. We're just extending that to the more remote sites.
Speaker 6:And I think
Speaker 1:that's So you don't have to completely replatform and go down to, okay. I gotta make sure it runs on Linux or it runs on CUDA. Like, you you can assume that you have access to all the niceties of Azure, but at the edge.
Speaker 6:That's right.
Speaker 1:Exactly. That's awesome. Yeah. Congratulations. This is a fascinating business and I really appreciate you taking the time, hopping on.
Speaker 1:We'd love
Speaker 3:to talk to again. Your travel schedule must be absolutely insane.
Speaker 1:On a plane a lot like this. Yeah. Next time you're out at some stranded energy, call in from the field from your phone, presuming you have Starlink or or at least cell service, we'd love to see what it looks like to see some some natural gas plant flaring for for the last time before it becomes tokens.
Speaker 6:Well, let let's do it. I'll I'll put my Starlink Mini in the backpack and
Speaker 1:Fantastic.
Speaker 7:Make it happen.
Speaker 1:Amazing. Thank you so much for hopping
Speaker 3:on. On all the progress.
Speaker 1:We will talk to you soon. Have a good one.
Speaker 2:Soon. Thanks again.
Speaker 1:Up next, we have Sameer from the Colin and Sameer YouTube channel, of course. Second time on the show. We ran into him at the Coinbase base launch event very briefly, chatted in the stairwell. We were moving past each other. Very excited to welcome him to the stream.
Speaker 1:Samir, how you doing?
Speaker 3:Looking professional.
Speaker 1:Looking extremely professional.
Speaker 3:I don't know if we have your audio yet.
Speaker 1:I think we missed
Speaker 3:team's side.
Speaker 1:Let's check. We we we are we are not getting audio but
Speaker 3:It doesn't matter because you look fantastic.
Speaker 1:Yeah. The the the
Speaker 3:Clearly hitting the gym.
Speaker 1:The Yeah.
Speaker 3:Ben, is this on our side or or?
Speaker 1:Okay. Think you're muted. Let's try and throw that on and we'll bring him in and and continue the the Glazinator 3,000. The white balance on that camera, phenomenal. The exposure, to die for.
Speaker 1:The lighting, very soft. Very neutral. Let's see. Can you hear Samir? Welcome to the stream.
Speaker 1:Nothing yet. Let's work on that. We will bring
Speaker 3:I mean, what a what a moment, you know. Even even creators at the absolute top of the top of their field, the Apex content creators still still learning Yes. Still grinding.
Speaker 1:Yes. Let's let's do one timeline post and then we will move back into Samir. This interesting data point to calculate the grind score of a company. Have you heard of this metric before? So, Figma is in the top 15 companies in terms of Grind score.
Speaker 1:Grind score is the percentage of employees that have a positive business outlook divided by the work life balance. So you're working really really hard, but you are extremely optimistic about the company. And topping the charts are Applied Intuition, who we talked to, Kayser Yunus. We talked to him at Hill and Valley. The Boring Company, of course, the Elon company.
Speaker 1:You're be working very But if you believe that you're gonna drill tunnels all over the world, you're probably pretty optimistic.
Speaker 3:I had a I had a a roommate when I first moved to LA that worked a buddy of mine that worked at The Boring Company and he I thought I was working hard but he would would often leave before I was up and come back after I went to bed.
Speaker 1:It's it's an extreme, extreme company. I've heard of stories of investors who were trying to get allocation in the company and a prerequisite was basically that you go do a full month of full time work to to, you know, advance the company. It's like, oh, yo, you think you're gonna value you you think you're gonna add value? Yeah. Come out here.
Speaker 1:Let's see it. For for
Speaker 5:a month.
Speaker 1:See it. Just be
Speaker 3:in the office office today. See ramp up there and Vanta. And ideally, you know, we can get all of our sponsors into Shield the top
Speaker 1:AI. Yeah. It's a good crew. Also, Gautier. I'm pronouncing it correctly, finally.
Speaker 1:Six months into reading his posts on the stream. I just vibe coded this. It works flawlessly. And it's a picture of a plane with an engine where the plane should
Speaker 3:I actually think this plane should Would
Speaker 1:this fly? It might actually work.
Speaker 5:I don't
Speaker 2:know. You got me now?
Speaker 1:Samir. Yeah. We got you. Are you live?
Speaker 3:Let's go.
Speaker 1:We're just looking at a random image of a plane.
Speaker 3:Oh, we got the mean, the the the other setup, I we gotta we'll have you on again, very soon to get the the full experience. But great great to see you.
Speaker 1:Great to see you.
Speaker 2:And how are you guys? I'm sorry. I'm giving you this, this non premium experience, but
Speaker 3:I mean, it's still better than
Speaker 1:that. Of stream, baby.
Speaker 3:90% of our guests.
Speaker 1:So Yeah. This is fantastic. Yeah. What's new in your world? What's the latest and greatest?
Speaker 1:Give us the little little update and then I wanna go into, just AI, creator economy, Disney, a bunch of stuff. We'll we'll turn it over.
Speaker 2:Amazing. New in my world. I mean, dude, there's there this has been the craziest year of my life. Okay.
Speaker 1:I don't
Speaker 2:know if the viewers know. Yeah. But both mine and Colin's homes burned down in January, which is a crazy experience. And then twelve days later, I had a baby.
Speaker 1:Yeah.
Speaker 2:Colin Colin and his wife just had a baby, about three weeks ago.
Speaker 1:So Well, congrats on the baby. Sorry about the house. It's a very, very tumultuous time for sure.
Speaker 2:Actually, it was, a conversation with Reid Hoffman.
Speaker 1:Okay.
Speaker 2:That was really interesting. He, on his way out, we were we we were chatting mostly about AI and and the world of creators and AI. And then on the way out, he turned around and looked at at Colin and I because he knew about what had happened earlier this year. And he just looked at us and he goes, never waste a good crisis, and then walked out. And I was like, woah.
Speaker 2:That is that is some amazing advice. So trying to what's new in my world is trying to understand that statement more and what that means to me. A bit of what that means is I've we've always wanted to do in person events. We're starting to do in person events now. We have a big one in New York on September 4.
Speaker 2:So, you know, on one side of the the spectrum is, like, content AI digital. The other side of the spectrum is just, like, getting back out, being in front of people Yep. Being with the community.
Speaker 1:I I I know you've done a lot of public speaking. What does a good in person event look like for you? Because I can imagine, like, you could just you have such a dedicated fan base. I remember running into you at, one of those YouTube VidCon or something and you're getting swarmed. I imagine you could just do q and a for two hours and everyone would be satisfied.
Speaker 1:At the same time, you could define like a very tight, you know, forty five minute presentation with slides, take people through the history of the creator economy where things are going. You could also just do interviews and interview top tier people the entire time. How do you think you wanna play it?
Speaker 2:So, we actually the first thing you do is like you ask. So we this is an application only event.
Speaker 1:Okay.
Speaker 2:And in the application, we just ask, what what is this what is this event have to do to be successful in your mind? Like, what does it mean to be successful?
Speaker 1:Yeah.
Speaker 2:Also, like, the two questions that Tim Ferriss gave us. One is, what are you here to give? Like, what do you feel like you could give at this event? And then what are you here to receive? What what do you what, like, piece of advice?
Speaker 2:So I would say, like, overwhelmingly. Right? Like, there's there's 380 confirmed applications for this event, represents over 300,000,000 followers.
Speaker 5:Wow.
Speaker 2:I would say 90% of people just said that being a creator is lonely, and I wanna meet other people in in the industry and, like, other like minded individuals.
Speaker 1:Totally.
Speaker 2:So I would say most events probably undervalue free time and space and prompted networking or prompted conversation and overvalue what happens on stage. I'll tell you, like, not one application said, man, I can't wait for a panel.
Speaker 1:Yeah. Yeah. Know what? Window dressing. It's always window dressing just to, like Totally.
Speaker 1:An excuse to get out there, and then you're just, like, hanging out at the cocktail party the entire time. But that's the best stuff, which actually makes it good.
Speaker 2:I feel like for me, even, like, when I've been on panels, like, to to have a to have a mediocre panel is probably the easiest thing in the world.
Speaker 1:Oh, yeah. Yeah.
Speaker 2:And so, like, to to make it good, I think, exceptionally challenging to make it worth your time. Yeah. So we're we're working hard to do that. But mostly, like, people wanna hang out with each other. Like, are lonely.
Speaker 2:People people spend a lot of time at their computer, And, like, being in a curated group of like minded individuals is fun. So I think
Speaker 1:Do have a or or or philosophy around what makes what makes for a good spot?
Speaker 2:I think New York City is, like
Speaker 1:Yeah.
Speaker 2:The greatest. Right? Like, I just think coming to New York is really fun. 62% of our attendees are traveling in, which is really interesting. And, you know, we the venue is at the refinery Domino Sugar factory, which is, this big glass building that has, like, a views of the city.
Speaker 2:So I think what was important to me was, like, you walk in and you're already like, this is cool. Yeah. I'm I'm excited to be here.
Speaker 1:Yeah. So yeah. Yeah. It makes sense. We were debating this earlier.
Speaker 1:There's an article in the Wall Street Journal about how Disney is wrestling with the way they use AI. A lot of companies are going through disruption. Yeah. Maybe it's a sustaining innovation. Like Microsoft's doing great.
Speaker 1:Right? And it's not disrupting their business. They're just printing money all over the place. Everything's growing from Excel all the way to their cloud business to their AI business. But for Disney, it's a lot more complicated.
Speaker 1:And they were giving this anecdote of The Rock and using a deep fake to essentially create a digital twin using his cousin, apparently. His cousin go to the shoot and they put a deep fake over his cousin. Yeah. Obviously, they pay his cousin. They pay Dwayne The Rock Johnson.
Speaker 1:But there's still some backlash from the fans potentially for using AI at all. And I've just been noodling on this question of, you know, will Disney be disrupted by AI? Will they just continue on unabated? Will it be really good for them? How like like so maybe we can just kinda noodle on it for a little bit and just kinda get your initial reactions, and then we can kinda take it in a bunch of different directions.
Speaker 2:Okay. So I think my first POV on AI right now is that I think we don't talk about AI and prompting as entertainment enough. And and what I mean by that is not like its ability to produce entertainment, but the fact that it is entertaining to chat with an LLM. And I think for me as a content creator, you know, all of us are in the business of attention, like you guys are in the business too. Like, we're looking to, create something meaningful enough to capture someone's attention.
Speaker 2:And I think Sam Altman has created something that is meaningful enough to capture a lot of attention. And I think a lot of creators think about this as like, oh, man, if if, AI can produce graphics and VFX, then, you know, it's people are out of jobs and, you know, that that is totally true. Like, that is happening. Yeah. But at the same time, us as creators, we might be out of jobs if AI itself is entertaining.
Speaker 1:Yeah.
Speaker 2:So I think on the you know, no matter what, we live in a in a in a landscape, in a media environment where, like, creating stuff is really competitive. It's really hard. It's very it's gotten very expensive. Like, studios are gonna use AI to to supplement production. Creators are gonna use AI to I mean, almost every creator probably uses it to supplement production in some way, shape, or form.
Speaker 1:Yeah. Totally.
Speaker 2:But I think we if we think about it from the consumer side and what's entertaining about learning a new recipe or figuring something out on ChatGPT or writing with ChatGPT or asking questions with ChatGPT. That that's where I I think about, like, time spent on the Internet, and is more time gonna be spent over here? Are you Yeah. Are you guys familiar with Showrunner? It's it's coined as the Netflix of AI.
Speaker 1:I have heard of it. I I'm not familiar beyond just seeing like one headline.
Speaker 2:So Amazon just backed it, and I think it's an interesting one to look at. It's essentially like they give you a show. So there's a show called Exit Valley. It's kind of like this their version of Family Guy.
Speaker 1:Sure.
Speaker 2:But you can choose your own adventure within the show and put yourself into the show as well. So you can kind of prompt what happens next. And I think it's an interesting thing to look at of like making content playable. Right? Making it interactive.
Speaker 2:Because if we look at the most culturally relevant stuff from history as well as now, video games are wildly culturally relevant, and those are stories that you can put yourself inside of. Right? That you can prompt what happens next inside of that story. And you look at live streamers right now. Kaisina, I show speed.
Speaker 2:As the viewer, you actually have impact over what happens in that story.
Speaker 1:Yep.
Speaker 2:So I've just, you know, rambled quite a bit about this stuff, but I think that we should really evaluate the, like, consumer and viewer interest in having a say into what happens next and also having interaction with the Internet.
Speaker 1:Yeah. That interaction thing is so fascinating. I I haven't thought about it in that frame but when I go to ChatGPT and I get it to generate an image, it's definitely a little bit like hitting the slot machine. Totally. Because I prompt it and Unblurring.
Speaker 1:I'm I have something in my mind and it's unblurring like it's in the like it's I'm in the dial up era and
Speaker 8:it's It's saying
Speaker 1:it's like, this the right image?
Speaker 3:The generation is you you you know, talk with the designer and you give them an idea and they're like, okay, I'm gonna I'll come back to you in a day. Yeah. You're waiting and you're waiting and waiting. They send you the files and you're like
Speaker 1:But it's totally dopamine hit.
Speaker 3:But but compressing that down Yeah. That makes like the dopamine. Yeah.
Speaker 1:And and you can see in the in the charts, think ChatGPT is up at thirty minutes a day for Yeah. The daily active users. And that's getting into TikTok numbers. And that's getting into Reels numbers. And and so maybe it's not immediately disruptive but it's certainly taking time from somewhere.
Speaker 1:And if you go back to Ted Sarandos at Netflix saying like, our competition is Fortnite. Well, you know, yeah, your competition is chatty p t now. If people are having fun on there even if they're not watching, you know, movies yet on there, just the interaction, even if it's text based. It's it's all in the same media. It's all in the same screen time.
Speaker 3:Yeah. Casey Neistat came on, I think, a week and a half ago and was saying that he's just, like, feeling like it's this tidal wave that's gonna wash over everyone and nothing will be the same. And it was almost, I wouldn't say it was like super bearish or black pilled but it was just like Yeah. Get ready, it's coming, it's gonna disrupt a lot of different verticals. Curious what percentage of creators that you talk to are more excited about the potential of AI than they are scared.
Speaker 1:The fear versus greed index.
Speaker 3:Yeah. Exactly.
Speaker 1:What they say in the public markets.
Speaker 2:So so that that's really interesting. I think, like, the the aspiring creator, the young creator is fearful and angry. And, like, we get a lot of anger when we talk about AI.
Speaker 1:Sure.
Speaker 2:You know, I think, for me, I I don't feel that way. I think it's there's an inevitability to it that's like, if you if you do feel angry, if you are a young creative and you're like, this thing is making logos and people are using it to to do their branding instead of hiring designers, and you feel angry about it. It's like, it's upsetting, but it's there's an inevitability to it. Like, it's not gonna stop. It's it's this is the worst it'll ever be.
Speaker 2:So I think the, from the the professional creative
Speaker 3:This perspective is best it'll ever be.
Speaker 1:No. The worst it'll ever be.
Speaker 2:This is the worst it'll ever be.
Speaker 1:It's just getting better everyone
Speaker 3:AI is the best. I'm saying it's the best it's ever gonna be for you if you're just angry that AI is doing worse.
Speaker 2:No. No. Yeah. AI right now, what you can do with AI, this is this will seem comical to us in
Speaker 1:Totally. Five
Speaker 2:Totally. And so it's only getting better. And I think every professional creator uses it in some way, shape, or form. Think one of one of the, maybe the nerdiest things that I ask my friends and that I tell my friends is like, if I have a favorite prompt or if I
Speaker 1:Yeah.
Speaker 2:Ask them what their prompts are, but I ask always, if we write something, I ask it to challenge based on being a different persona.
Speaker 1:Sure.
Speaker 2:So, you know, I've done this as Casey before. Hey, imagine you're Casey Neistat, give me feedback on this.
Speaker 1:Sure. Sure.
Speaker 2:Imagine you're Johnny Harris, give me feedback on this intro. So that's been a really like, that's probably the simplest most effective way, but all the way up to like, we use it to mock up thumbnails now.
Speaker 3:Yeah. I was gonna ask you about the thumbnail because when Yeah. When so mister beast had his like AI thumbnail generator and then he got some some
Speaker 1:Pushback.
Speaker 3:Extreme backlash. But it seemed like it was from a a a bunch of Interesting.
Speaker 1:Bunch of It was take on this.
Speaker 3:I my my point of view was that he should have said, like, I understand that this is disruptive to like a small number of people that that do thumbnail art as a profession. But I care more about democratizing access to great thumbnails by making anybody generate them and I'm gonna keep this in the product.
Speaker 1:The point was that
Speaker 3:He reacted
Speaker 1:putting it out there was pro creator, anti thumbnail artist Yeah. And that was like the trade off that he should've And
Speaker 3:so he, in my view, he he, you know, and I'm sure he has a bunch more context. But in my view, was siding with the 10,000 people in the world that are that that make a living doing thumbnails Yeah.
Speaker 1:And Instead of the millions instead
Speaker 3:of the millions of people that want to create
Speaker 2:I think actually the the core issue with the announcement was the face swap. So what he did was he showed two thumbnails and he said it's it's it's very simple to put your face on this thumbnail. Now, look, that happens on YouTube all the time. Right? Like, the reality is that when one creator makes something that's like really successful, another creator just goes, oh, cool.
Speaker 2:That's almost like public domain, that idea. I'll just take that and like reinterpret it from my own channel. Sometimes people are so egregious to just put their own face on someone else's design. We made a video about this called the copy and paste culture of YouTube Yep. Because it is a big culture.
Speaker 2:And I think what a lot of creators were feeling was that Jimmy was making that process very easy. Thumbnail designers, as a cottage industry of YouTube, are some of, like, the most powerful people on the platform. They literally are the gatekeepers between creators and millions of
Speaker 3:views. Attention. Yeah.
Speaker 2:Yeah. Totally. They are very, very talented. Even for us, what happens for us is we just we're all visual people, so we mock it up with AI, but I don't think anyone you know, I think Dude Perfect did one thumbnail that was pure play from an AI generated thumbnail, which was a airplane with a bunch of basketballs coming out of it. That was like an impossible photo to take or an impossible, you know, thing for them to mock up.
Speaker 2:And the thing they got from AI, they're like, this represents the video concept.
Speaker 1:Yep.
Speaker 2:People were upset about that. But I think mostly how creators operate is they go, here's the concept. How we operate is we go, here's the concept. Okay. Here's the here's how it looks visually, and now we hire a designer to bring that to life.
Speaker 2:And we still do that. We I mean, I think thumbnail designers are, like, wildly talented, and they operate more as, like, strategists as well. But it's it's a fascinating cottage industry that people looking into YouTube probably have no idea exists.
Speaker 1:Do you think that there's a role in the future for, like thumbnail concept er? Because I've made thumbnails and they like they live and die. I mean, the last step of the Photoshop work is extremely important but you have this, like, twenty minute video where you talk about so many different things, and there's so many different visual elements. And then you're trying to distill it down into, like, the three element rule or just, like, one thing and picking that one thing that like the plane, I can imagine what that video is about right now just based on what you said. Yeah.
Speaker 1:But that could have been botched so many times on the concept And it doesn't matter if you had, you know, the the best photographer in the world working with the best Photoshop artist and, you know, the entire AI team from all the different Foundation Model Lab companies working on it. Like, the wrong concept's just not gonna break through because people are gonna be like, this is confusing. Like, I don't wanna watch this.
Speaker 2:You can't fix you can't fix a bad idea. Exactly. You just can't. You can't. But I think what makes a good idea is really hard to decipher today.
Speaker 2:Totally. Because I think on the internet, we live in a world of two extremes. One is if I'm gonna click on something that has to be something I've never seen before on one extreme. Right? So mister beast, let's take that and go.
Speaker 2:He just raced an f one car and a cheetah. I've literally never seen a cheetah race an f one car. So fine, Jimmy. I'll click on
Speaker 1:that because
Speaker 2:I've never seen it before. On the other side of this attention spectrum, I think it's show me something that impacts my day to day life, either with my friends and family or, like, is interactive. So your guys show is a great example of something I think lives on that, which is like, get to turn this on, and it impacts my life because I get to be a part of a water cooler conversation. Yeah. I can turn to my friends and I have more things to talk about with my friends.
Speaker 2:Love Island is massively culturally relevant. I think that is something that, you know, even around my social circles, people talk about. And it they get to connect with it with their wife or with their girlfriend or with their buddies, like so I think we live in in those two extremes. Anything in the middle is really hard.
Speaker 1:Yeah.
Speaker 2:Right? Like educational stuff, very hard right now. Yeah. I think viewership is gonna go down in the middle. It doesn't mean it's less impactful.
Speaker 2:It's still impactful. But I I think Yeah.
Speaker 3:It's interesting that the the educational content is it used to be if you wanted to quickly understand a complicated topic Right. Finding a short YouTube video on it was super effective because you're like, I don't have to Google and I don't have to find this summary and I don't have to piece together this Reddit thread and that blog post and this news article and I'm just gonna watch this like three minute video and have a good understanding. Now, you can just prompt the model and say, how does this work? And then you can ask follow-up questions and you can ask follow-up questions and you can click in to see the source. Yep.
Speaker 3:And I feel like that that that middle is just getting hollowed out. Yep. And we're not that far from OpenAI just being like, do you wanna generate a ten, you know, a ten minute video explaining this? I'll turn this report into a video. Right?
Speaker 3:That's that kind of like
Speaker 2:I mean, you can already do it with podcasting. Mustafa Solomon from Microsoft, the CEO of Microsoft AI Yep. On our show prompted a podcast that was really compelling using Copilot. And I I think though have you guys ever used the, like, kind of FaceTime feature with ChatGPT?
Speaker 1:The it's the voice mode. Right?
Speaker 2:Yeah. Voice mode, but it's video too.
Speaker 1:Oh, it does video?
Speaker 2:It's video in it. Oh, see that now. So I I did that in the kitchen.
Speaker 1:Got it.
Speaker 2:Like, three nights ago, I made, you know, I saw some like everything on Instagram, on my Instagram feed is like cottage cheese. Right? Just like put cottage cheese in something. So it was like these like cottage cheese protein brownies.
Speaker 1:Awesome.
Speaker 2:And I was like, alright, I'll make these. Yeah. And I, in the middle of it, like had a question and so I opened that up and I had like the video. And I was like, alright. Wait.
Speaker 2:I only have one banana. Like, what do I do next?
Speaker 1:Oh, interesting.
Speaker 2:And it was just live prompting me. And I think the obvious thing you recognize is that that won't be our phone soon. Right? Like, maybe it'll be glasses, maybe it'll be contact lenses, maybe it'll be like contact lenses and an earpiece. Yeah.
Speaker 2:But there will be like an omnipresent nature. And that's very dystopian. But I think this all connects to that question of education. Like, educational content will be real time, personalized in my ear and in my eyes, at least I think.
Speaker 3:What did you think about the launch of Waves, the new glasses built initially for live streamers? It felt like the most polarizing launch where if you were a live streamer that does IRL stuff, you were thinking, this is amazing. I I need I wanna get this as fast as possible. And if you were a member of the public that values your privacy, you were, you know Yeah. Saying, like, please, you know, stop this before it launches.
Speaker 2:Yeah. I think it's okay. I think on the live streamer side, I mean, my perspective is POV is not that interesting. Maybe I'm wrong, but I think what's interesting is, like, a filmer filming speed doing something. Yeah.
Speaker 2:You know, not not necessarily POV. The only guy who nails it is, you know that guy in New York who, like, plays the the keys and, like, someone raps with him?
Speaker 1:Yep. Yep.
Speaker 2:That's, like, the dopest kind of solo dude. I assume he's solo. Maybe there's a cameraman with him.
Speaker 1:But Yeah. I mean, it sounds like it's just, like, one of many niches, and there will be
Speaker 2:Yeah.
Speaker 1:Creators that are shoot wide angle, shoot drone footage of themselves doing things, shoot Yeah. You know, like like, cinematic stuff. It's just like one of the tools in the tool chest. Sure. I mean, people really like humans and they really like seeing speed or Kaisenauts and they like Exactly.
Speaker 1:That relationship. Totally.
Speaker 2:Yeah. And I think like
Speaker 3:feeling like like you don't feel like you're somewhere, like you don't you you don't, like for example, like the idea of an NBA player Mhmm. Like wearing glasses.
Speaker 1:Oh, yeah.
Speaker 3:That might be cool for a second. Yeah. They were there dribbling down Yeah. Like shooting, pulling up. But then you probably wanna just go back to like feeling like you're actually there in the scene
Speaker 2:seeing it. I would get bored quickly with that. I think on the privacy side, like, you know, you guys are in LA. Right? Yeah.
Speaker 2:Like you see Waymo's all the time. I think I think there's a lot of concern about that too of like, okay. Now we have more cars on the street that just have, like, tons of cameras on them. Yep. And I think just generally, there's, you know, there's a lot of concern about that, but it is like a natural evolution to us just unloading our lives and data on the internet.
Speaker 2:Like, people are concerned about that. They concerned about their chat GBT search history or question prompt history? Like, I think Scott Galloway said it, like, if you want real anarchy in the world, just release everyone's Google search history. Like, that would end civilization. And I think
Speaker 1:Do you think it actually would? Or do you think everyone would just be like, okay. We're all equally weird. Like
Speaker 2:Yeah. Or it would be this, like, cool moment of just, like, the veils lifted. Like, we're all just We're all
Speaker 3:weirdos search and, history. How much creatine can I take Legally? For losing my life? Yeah. I don't know.
Speaker 3:I think one thing
Speaker 2:this stuff's gonna play out. I just think that
Speaker 1:Yeah.
Speaker 2:You know, I I did Colin and I did get the opportunity to spend some time with with Sam Altman. And I think, you know, I I I my curiosity with having a lot of the, like, like, Mustafa on the show or Reid Hoffman on the show is to understand the incentives and the curiosity of the creators of of these programs. And even with someone like Sam, like, it's actually hard for me to fully tap into I understand the desire to create and to innovate and to be number one and to to push things into a place you could never imagine, but I think the implications of this are pretty different than anything else. I think the implications of advances in in in AI are gonna change human society in a way that like I think Casey's right. Like it's gonna change things in ways we can't imagine.
Speaker 3:Yeah. One one thing that's interesting when I think about creators that that I've watched over the last decade, you think about in music like Anthony Anthony Fantano. Like Yeah. There will be an AI creator that just instantly reviews a new Drake album. And it just compare, you know, and it and it and it can come up with some analysis of the song and it'll tell you what this lyric meant and it'll say, you know, this sounds similar to a song or a unreleased track from this period and it'll give you this like context.
Speaker 3:But people will still wanna hear what Anthony Fantano thinks about the album.
Speaker 2:I think we look at it in in terms of, like, efficiency and inefficiency. There's certain times where you want efficient media. So, like, let's say I'm going into a meeting and I'm like, wait. I didn't prep for this. I need something really efficient.
Speaker 2:Like, when I was in high school, that was SparkNotes. Remember SparkNotes?
Speaker 1:Oh, yeah.
Speaker 2:You guys are too young for SparkNotes.
Speaker 1:No. No. I use SparkNotes, of course.
Speaker 2:SparkNotes was like, if I didn't do the required reading of class, which I rarely did, I would just The original ClaroLead. Exactly. I would go like, alright. I got the SparkNotes. So I think there's like efficient media.
Speaker 2:But then if you look at there's also people who just love reading a book. So there's gonna be both ends of the spectrum.
Speaker 3:I wish I wish wish I in college if you could generate a podcast on any topic. Mean that is Totally. That would be amazing. Gonna be like, I'm gonna go to the gym and when I finish this, I'm gonna know like 90% of what I need to know about this I'm gonna go into the test. I'm gonna write the essay.
Speaker 1:I used to get the audio books for every book. I'd buy the book for this for the course and then I'd also buy the audio book because there's an auditory learner.
Speaker 2:But we can't assume that just what humans want is efficiency all the time. Right? Because I don't want efficiency all the time. Like, you think about going to a concert. Going to a concert is the least efficient way to hear the music from that artist.
Speaker 2:You go, you have to park, especially in LA, it sucks. You go, you have to figure out parking and there's traffic on the way in. You go in and, like, why are you there? You're there for a collective human experience. You're there for the messiness of how John Mayer is gonna play.
Speaker 2:I'm speaking about a John Mayer concert. So you're you you hear him play the guitar differently than he would. If I just wanna hear the song daughters, I'm just gonna go on Spotify and hear the song daughters. So I think I I think you just play with those two worlds of, like, we will always kind of crave efficiency and inefficiency. There might be areas where we want it more.
Speaker 2:So, like, brainstorming is a really interesting example. Hey. I want 100 variations of this idea. Presently, an LLM can do that better than five people in a room and faster than five people in a room if you wanna see every variation of an idea. But, you know, you wanna just watch a movie and see if you can come up with ideas based on that movie.
Speaker 2:Like, it'd be hard for an LLM to match your taste in that way or yeah. I just think there's, like, efficiency and inefficiency and they're both gonna play together.
Speaker 4:We really gotta book an hour
Speaker 1:for this. We could just keep going forever. This is fantastic. We do have another guest joining
Speaker 3:do it in person next time.
Speaker 1:Yeah. Oh, yeah. You're in LA.
Speaker 3:Just come by.
Speaker 2:Dude, I would love to come see it. Also That's amazing. I mean, I totally botched my, my good looking setup.
Speaker 1:So I'm sorry. It's high stages of the live stuff.
Speaker 2:It's high stages.
Speaker 1:We saw we we we saw the potential. We saw a glimpse of the potential.
Speaker 3:No. Was a human it was a humanizing moment for your audit, you know.
Speaker 1:But yeah, usually you should come in, you should come one day and close out the show with us and then we can pick your brain stuff and and you can help us get an upgrade John
Speaker 3:just said pick your brain.
Speaker 1:What's that?
Speaker 3:Well, mean, I just
Speaker 1:What's wrong with that?
Speaker 3:Asking Samir. I'm sure he gets that message a thousand times a day. Love to pick your brain, Samir.
Speaker 2:Tim Ferriss Tim Ferriss gave me a hard and fast rule. He said, if anyone says pick your brain Okay.
Speaker 1:Don't go
Speaker 2:to the meeting. Yeah. Don't go
Speaker 3:to the meeting.
Speaker 2:So that's my hard and fast rule. I will not be there. Okay. If have another suggestion, then I'll come in for that.
Speaker 3:Okay. We'll hang out. We'll hang out. We'll have lunch.
Speaker 1:We'll have to be gone. Awesome.
Speaker 2:Alright, guys.
Speaker 3:Great to see you.
Speaker 2:Thanks for having me on. See you guys. Cheers.
Speaker 1:Talk to you later. Bye. Up next, we have Lo coming into the studio to the TVPN Ultra Dome.
Speaker 3:Legend.
Speaker 1:Welcome to the stream. We kept him waiting. We'll try and move through these next guests quickly. Been very excited to catch up with him. How are you doing?
Speaker 3:Boom. Welcome. John will be back in a minute. How are you doing, Flo?
Speaker 5:Good. Good. Good. How's everyone doing?
Speaker 3:Great. Great. You know, it's it's been a slow summer. Not much news in AI. Everyone's just clearly taking a breather.
Speaker 3:Of course not. I know you guys have been busy. What's going on in your world?
Speaker 5:Yeah. Just announced three point o. It's been an insane last couple of weeks. I've been working on this update all year. Yeah.
Speaker 5:I mean, we're just making it way, way, way easier to create way more powerful AI agents.
Speaker 3:Incredible. When did you decide to adopt the, like, versioning for Linde? Because I've it feels smart to, like, kind of anchor, like, the team and your customers around these, like, major updates to the to the product versus, historically, people might have a product launch, but they're not necessarily, like, signaling, like, hey. This is a massive advancement. We're call it's an entirely new version.
Speaker 5:Yeah. No. We've done that from the beginning. Like, two point o was, like, in November. Actually, you know, even smarter, and that's what I wanna do next time, would have been to name them.
Speaker 5:I wanna like, Lindy's, know, like, how Apple does, like, Yosemite and stuff? I wanna give them good names moving forward.
Speaker 3:Yeah. I'm trying to think we'll come up we'll come up with the right series of of names in the right category, do something
Speaker 5:I'm I'm thinking like sci fi books. Like, would you think of like a fire up in the deep, you know? Or like the metamorphosis of Or
Speaker 3:Lindy Lindy Snow Crash or something. Yeah.
Speaker 5:Exactly. Exactly.
Speaker 3:That's great. What how how are you guys using the new the new Lindys internally?
Speaker 5:Oh, we're using it all day. Like, I think one of the most insane things that it's automated for us is, like, it's replaced the QA engineer. Wow. It just like so we it's getting very metallic. We all using Lindy to QA Lindy.
Speaker 5:And so every hour, we have, like, a Lindy agent that wakes up, that tries the entire, like, core flow, like, literally signs up with a new account, tries to pay, create a new agent, test the new agents. You have an agent creating an agent and testing it. And then if anything goes wrong along the way, pings the on call engineer. So we've been using that for weeks, it worked beautifully. It's it's amazing.
Speaker 3:How do you think about reducing the time, I guess, like, to value for somebody that's coming in to use? Lindy. I imagine that's key. People are so used to like signing up for a SaaS product, knowing exactly what they're getting and having there be a lot more kind of controls around what the product does. So it's not a sort of like build your own adventure.
Speaker 3:Whereas I feel like with Lindy, historically, you you do like, the the customer needs to really embrace like, hey, I have to figure out how to when you hire a new employee, very few roles can somebody just come in and without any ramp up time, just immediately start crushing it. And and so I'm curious what that looks like for you guys.
Speaker 5:Yeah. Can they show my screen? Does that work?
Speaker 1:It does. Everything's live. So whatever you share will be Okay. Already doing to the mutable record of the Yeah. Of the Internet.
Speaker 1:Oh, that looks great.
Speaker 5:Well, yeah. So the the I mean, this like an excellent question. Like, that's the problem we've always had from day one. It's like it's almost too powerful. You have to do everything yourself.
Speaker 1:And Sure.
Speaker 5:That's why the vision from day one has been like it's just like an employee. Like, it's very easy to set up. You can just talk to it and tell it what you wanna do. And so now the new app is just text field. It's like this thing, and you tell it what you wanna do.
Speaker 5:It's like, hey. I want an agent that will monitor my support inbox, and then you can, like, iterate with it, like, very interactively. And we have a bunch of templates here for, like, sales, customer support, customer productivity, engineering. Right here, like, the QA assistant is one of them or, you know, like like, a software engineer agent, like human resources, like a recruiting agent, or or like a company knowledge base. So we give you a bunch of templates, and then you can just create your agent in, like, a minute and a half.
Speaker 1:You running into any problems just linking up private data sources? I mean, I'm just thinking from, like, a consumer's perspective, You have a bunch of, you know, news subscriptions. You wanna to log in to those news websites and kind of collate a digest for you. That's something it would need a password for. It would get run it would run into a number of paywalls.
Speaker 1:Are you seeing a lot of luck with, like, jumping through login flows, or are you getting hit with CAPTCHAs constantly that are intractable?
Speaker 5:Oh, no. I mean, like so that is a big part of what we're announcing today is, like, autopilot. So, basically, your agents now have their own computer. Mhmm. And if you need to give it a login, you can literally take control of the computer and log in for them.
Speaker 5:Let me just pause the screen share because I don't wanna show anything crazy. Yeah.
Speaker 1:But Does is that is that something that you do, like, once? Or because I'm I when I think of the benefit here, I think of, like, a really long running, like, cron job based agent. Essentially something that feels more like a
Speaker 3:You're still screen by
Speaker 1:the screen sharing. Oh, yeah. Your list of passwords is up now. Just kidding. The API keys are leaked and it's
Speaker 3:Oh, wow. You did a billion in revenue yesterday?
Speaker 5:No. I mean, yeah, you you log in only once. So it's like this is I I am screen sharing on purpose. So this is an agent that said that this is actually a little bit of a dirty secret. Like, I don't like LinkedIn.
Speaker 5:I'm more of a Twitter guy.
Speaker 1:Sure.
Speaker 5:And so I post on Twitter. I don't wanna post on LinkedIn. But I have an agent that so it it is a cron job. Wakes up every day at 9AM.
Speaker 1:This is Cross passes.
Speaker 5:This morning. And you can see it's logged in from my Twitter account. Like, this is authenticated as me. And so it goes on my Twitter. It's also authenticated as me on my LinkedIn, and it basically looks at the posts on my Twitter and it's like, hey, this is what I think you should post on
Speaker 1:Yep.
Speaker 7:On LinkedIn.
Speaker 1:That's very cool. Yeah. Yeah. That makes a ton of sense. That's And and can obviously, like, hydrate things and add extra context and really, like, transform the post properly as opposed to just, like, a default Flow
Speaker 3:post on on X. Very excited to announce Lindy three point o. It's our most powerful Lindy. And then it converts it to the the Lindy then converts it to LinkedIn. It's like, what's
Speaker 1:so What I learned about B2B SaaS. Today,
Speaker 3:we're transforming transforming the power of agents Yes. To unlock productivity for everyone in your organization.
Speaker 1:No. The real the the real clickbait for LinkedIn would be like, you know, three weeks ago. Three weeks ago, I hired a software engineer who was working at 25 different companies. Here's what it taught me about building three point o. Something like that.
Speaker 1:Anyway. Well, congrats on the launch. Anything else we should know? Where can people sign up?
Speaker 5:Yeah. Linda.ai. It's it's available today. Like, I don't know about y'all. I find it frustrating when like, there's a lot of, like, vaporware in AI.
Speaker 5:It's like, this is coming one day. It's like, no. No. This is available right now. It works.
Speaker 5:It's incredible.
Speaker 1:Very What's the pricing model right now?
Speaker 5:Don't worry about it.
Speaker 1:Like, consumption or subscription?
Speaker 5:It's consumption. It's consumption. It starts at $50 a month and it's it's a tenth of the price of a human.
Speaker 1:Okay. This is gonna be one of those things. Am I gonna hear horror stories about people that like forgot to, you know, turn off their Lindy and they ran up a $10,000 bill?
Speaker 5:Don't worry about it. The
Speaker 3:cost of inference is declining rapidly. It is. It's all gonna everybody's gonna make it. We're all gonna be fine.
Speaker 1:Yeah. Yeah. We're gonna distill the models. These aren't No.
Speaker 5:I mean, look. I you know, this has happened before, and we're very generous with credit. People reach out to us. They're like, can I get a refund? This happened.
Speaker 5:And we're like, well, that comes yeah.
Speaker 1:Of course. That yeah. That makes
Speaker 5:sense. Useful.
Speaker 1:Cool. Any other any other tools or or custom models or, like, RL environments that you're tracking or excited for progress to be made? You mentioned computer use, but what else do you want the Foundation Labs to solve to kind of so that you're, like, a beneficiary riding the wave?
Speaker 5:Memory.
Speaker 1:Memory.
Speaker 5:Definitely. Memory, I think, is is the big gap. And I I think, like, there's a lot of attempts to solve this problem across the industry, but I'm noticing this pattern where it's like people and companies like ours that are stuck and cannot change the weights of the models. Mhmm. They think of all of those, like, convoluted schemes to, like, hack the model to do something it doesn't when really it belongs to to the model.
Speaker 5:Yep. And when you talk to the researchers at the labs and you ask them, it's like, ah, like, we're working on memory. This is what we're doing. They tell us, like, don't don't do it. Like, let us let us
Speaker 1:do this. We'll do it.
Speaker 5:Yeah. We'll do it. This belongs to the model, and the model is going to do a thousand x better than you do. And I expect a much more advanced memory schemes where it's like, basically, the model is going to be retrained
Speaker 1:Yep.
Speaker 5:To print out in, a year or something, like, or twelve months.
Speaker 3:What are you expecting from GPT five?
Speaker 5:Just I I I'm expecting it to be smarter. It look. We feel sparks of a GI daily at this point. Like, we had this moment last week. Like, we basically accidentally built Lovable.
Speaker 5:Like, because we gave a computer to Lindy, like, someone who was, 10PM in the office is like, Flo, like, hey. If you ask me to to build a website, she builds it and she deploys it. It works. And so, like, to me, that was, like, a huge holy shit, like like, AGI spark of AGI moment. But, like, look, it's still not as good as a human.
Speaker 5:Like, sometimes it's just dumb. It just makes dumb mistakes still today. You know? And so I'm expecting GPT five to be, like, a step change and and to be a big step to wield the GI, but I still people don't realize what's happening. And I I get it.
Speaker 5:People are tired of, like, all the AI hype and the noise. And I tell them, like, if you're tired, man, like, this is only the beginning. It's gonna get a lot more noisy out there. Like, it's it's gonna get pretty crazy.
Speaker 3:Yeah. Makes sense. I I I'm just it it should be exciting for everyone because Lindy today feels like the promise is is automate these tasks that are boring that a human does. The first 10 times they do it, it's interesting. The next 10,000 times they do it is very boring.
Speaker 3:And so you just free people up to do these more like higher leverage zero to one type type activities that can then be automated and systemized over time. So very very cool. Congrats on the launch.
Speaker 1:Congrats on the launch.
Speaker 3:I'm I'm I you know, people are gonna be know, making bets on Linde four point o. Is Linde four point o gonna be able to get a college degree for me? You know? All that good stuff.
Speaker 5:Congratulations. Is that is that these models all actually today able to get college degrees. They can get good job as an intern. Right?
Speaker 1:Yeah. Yeah.
Speaker 5:From the top to the bottom. So Yeah. Yeah.
Speaker 1:Awesome. Well, congratulations. We'll talk to soon.
Speaker 3:To see you. Thank you, Jesus.
Speaker 1:Great day. Bye. You too. Up next, we have Dave from Rune Technologies coming in to the studio. Get that gong ready, Jordy Hayes, and welcome to the stream.
Speaker 1:How are doing?
Speaker 4:Hey. How are you?
Speaker 1:What's happening? Welcome to
Speaker 3:stream. Show. Thank you.
Speaker 1:Give us a brief intro. Give us an update and tell us the news.
Speaker 4:Yeah. Yeah. So Dave Tuttle, cofounder and CEO of Vroom Technologies. Founded the company last year with my cofounder Peter, who I know is on a little while ago. We just raised our series a.
Speaker 4:Just announced it about two weeks ago. So excited to have closed that.
Speaker 1:Didn't even give you the number. Sorry. Sorry. Didn't even I didn't get to the number. Didn't even get to the number, but congratulations on the series a.
Speaker 1:Give us the number, give us who led, and then we'll go into more about what the company's building.
Speaker 4:Yeah. So we closed $24,000,000 led by Human Capital. All of our current investors from, Andreessen, point seventy two and x y z reinvested, and then, you know, New Investors Human and Makes sense. You know, Washington Harbor Partners as well, a new investor here. And and, we won't announce it yet.
Speaker 4:There's gonna be another one, but we'll save that in a few weeks as a little surprise.
Speaker 1:Fantastic. Nice. You're give us give us the brief history on on logistics and supply chains in the US military. What I mean, what what were you using in World War two? What are we using today?
Speaker 1:And then what does the future look like?
Speaker 4:Yeah. And and I mean, in many ways, the insane part is some of it hasn't changed. Right? Like, we're tracking things in analog systems, you know, the means of a whiteboard has changed obviously from, from scratch paper back in the day. And, you know, sometimes it's even Excel documents, but great.
Speaker 4:Like, the basic nature of it is still an analog human centric tracking of things, whether that's supply inventory levels, vehicle maintenance levels, vehicle locations, and those sorts of things. You know, and especially over the last, you know, I came out of uniform. I'm still serving part time even in the Army National Guard. And when I think about, like, how do we track what we need and where we need it and when we need it, that is still a human centric analog process that has remained generally unchanged at least in the last twenty years with the advent of, you know, computers at some level and connectivity at some level.
Speaker 1:So, yeah, what's the path to actually getting this this in the hands of the warfighter? Obviously, it's a newer company. You've made a lot of progress, but, it's never easy getting a program record. It's never easy getting, you know, full deployment. We've we've talked about the history of Palantir.
Speaker 1:Took a long time to get that out into the world. What's the plan? What's the update?
Speaker 4:Yeah. Yeah. I mean, you said it. I mean, it is a long path. We know that.
Speaker 4:We all of us have come from this industry. We've lived in the defense space for years at Roon, you know, from many other companies. I'm excited to say right now, like, there's a team down at an army base as we speak deploying TIROS at an exercise with an army corps. So pretty excited about that. There'll be a second deployment within the army.
Speaker 4:We haven't announced it yet, but we also have work within the marine corps as well. Yeah. So we know we gotta spin the flywheel with these sorts of things. And core to our DNA is how do we get out to these exercises in real world scenarios with war fighters, with our sustainer, know, sustainment customers and do this. And that, you know, build closely with the warfighters.
Speaker 4:In many ways, what what Palantir pioneered and what Andrew pioneered. Right? How do we do this with them to then build momentum, get those get ahead of the requirements, do things very quickly and iteratively to then get to that goal of writing enterprise, you know, or production deployment in those types of situations. So, you know, think you you guys well know that, you know, seed round is about, hey. Do we have product market fit?
Speaker 4:Is the thing that we're building needed? Right? We have proven that. And what we thought was gonna take twelve to eighteen months, it we did it in eight months with initial pilot contracts in the military. And now series a is about how do we scale the team and how do we ruthlessly execute on the things we need to do, right, to meet the milestones we have to actually deploy this across the not just the joint force, but even potentially our allies as well.
Speaker 3:How much, you know, we in the the recent conflict in The Middle East, how much are you trying to learn and and how much are you guys paying attention to, the challenges they're facing there versus, hey, we already know our systems and processes are so broken that we just need to bring them and and and so ancient, I'm sure. Know, we just need to bring them into the present and then and then worry about kind of more specific deployments and and problems.
Speaker 4:Yeah. Well, I mean, everything's a learning opportunity. Right? So whether we're talking about the Russia Ukraine war and how how the speed and the scale of sustainment that has to happen in a in a peer or near peer adversary, or we're even looking at the recent events in The Middle East. Right?
Speaker 4:There was a not insignificant consumption or expenditure of US surface to air missiles even in the twelve days of conflict in in CENTCOM. Right? So how do we think through knowing those expenditures in real time or near real time, being able to even predict those now with those cons you know, expenditures into future needs and being able to position things and reposition things, inventories, right, in this case, munitions in the right place? To me, those are all important lessons learned. Right?
Speaker 4:We have to be able to do it at the scale that is gonna be required and at machine speed, and then we have to take a real hard look at, like, what are the exquisite things that are very low density that we need to get, like, exquisite munitions and systems that are gonna be required, know, in a conflict. Should a conflict come? Hopefully not, but should come. And I think, you know, Peter and I founded this company in many ways because I don't question that we're not gonna have the most exquisite munitions, the best weapon systems in the world. What keeps me up at night is, like, can we get them in the place we need them at the scale we need them at the right time?
Speaker 4:Right? Can we actually do that? Like, that's something that I think is lacking and frankly, has been overlooked by the technology, you know, companies companies of of today. Today. Right?
Speaker 4:Right? And how do we sustain the force and how do we do this with modern technology?
Speaker 1:Yeah. Yeah. That's the entire conversation. Just, capacity more than capability. So thank you for everything that you're doing, and thanks for joining the stream.
Speaker 3:The team too. Tremendous progress. Love love to see you guys making eighteen months of progress in eight months.
Speaker 1:We love
Speaker 4:to see That's right. Keep keep I appreciate keep that. Yeah. Awesome.
Speaker 1:Welcome back on the stream anytime. We'll talk to you soon. Have a great day.
Speaker 5:Talk soon. Thanks, Chad.
Speaker 4:See you later.
Speaker 1:Up next, we have Will Ahmed from Whoop coming in the studio. Welcome to the stream. Second time on the show. We had him on around the last product release, and we will invite him back to the stream.
Speaker 3:There he is.
Speaker 1:How you doing, Will? Good to see you.
Speaker 8:Up, guys? Good to see you.
Speaker 1:What's up?
Speaker 2:Great to
Speaker 5:see you.
Speaker 1:Where are you right now? What's in the background?
Speaker 8:This is WHOOP HQ. I'm in my office and if you look right here that's Fenway Park.
Speaker 1:Oh, that's right.
Speaker 8:We're in Boston. Yeah.
Speaker 1:Boston. Very nice. Oh, we got some claps from the team in the background. Someone's happy about Boston. Anyway, give us the update.
Speaker 1:What's what's new in your world?
Speaker 8:Well, we recently launched the WHOOP five dot o and the WHOOP MGP. So two new hardwares, three membership tiers, bunch of new bands and accessories. The market seems to be loving the product. Business has been has been really good.
Speaker 1:It's great.
Speaker 8:And, yeah, we've launched a lot of new features. We just came out with a with a health span feature that'll tell you your WHOOP age. We worked with, the Buck Institute, which is the leading institute in the country for longevity. So we found that, you know, the top nine biometrics that correlate with all cause mortality. I'm sure you guys have very low WHOOP ages.
Speaker 1:Thank you.
Speaker 8:And and we
Speaker 3:came up do you think about when when just sorry to interrupt, but but a lot of anybody that anybody that does any type of like health testing diagnostics, a lot of people are adding an age or or or this kind of like age score. And it feels like there's incentive to, for some players to just put the age as low as possible so that people share it. That's obviously not great for the user. They're like, I'm 35, but this score says I'm 25, so I'm gonna share it, you know, on on social I
Speaker 1:took one of these biological age tests and it said that I have the mind of a four year old.
Speaker 3:The mind specifically. The body of an elderly man, but the mind of a
Speaker 1:It said I was in charge of a compliment? Four year old. Okay. But it is it is mind
Speaker 3:people have said I have the mind of a golden retriever.
Speaker 1:Yes. Yes. It said it says you're as smart as a four year old. It was impressive. But my question is yeah.
Speaker 1:It it it is kind of like a little bit of a optimistic flip because you could flip this around and just say, your your life expectancy, like, the average life expectancy is is 75, and you're at 85 based on how you're aging. So There is a company that's much darker.
Speaker 3:It does, like, death.
Speaker 1:The death. Yeah. I remember those apps, and those are much darker and spookier and weird and and macabre. But this feels this feels much more optimistic, much more tractable, something you can work towards. But what are the pitfalls?
Speaker 1:What do you what what did you make sure where you Yeah. Sounds like you're Without naming competitors, like like, what what did you wanna avoid in the in the in how you designed your product?
Speaker 3:Yeah. It felt like I it feels like some are just a random number generator Yeah. And you're doing it with the Bach Institute. Yeah. Sounds sounds Yeah.
Speaker 1:Look. We we work we work
Speaker 8:with doctor Eric Verden who's literally one of the best doctors when it comes to longevity and the research institute there. We found nine biometrics that most closely correlate with all cause mortality. Yeah. And, and they were all things that that we measure. And, and so we're able to show in great detail how WHOOP members stack up to other people their age, in a bunch of different factors, like sleep consistency, hours of sleep, steps, you know, time spent in heart rate zones, your v o two max, your weight, a number of, you know, kind of obvious metrics that we can we can qualify.
Speaker 8:And, we also show all the research that we used in developing the feature. And, and look. It's not everyone wins at soccer. This is not a participation trophy type product. You know, I think, like, people generally associate WHOOP members as being pretty fit and healthy, and I think it's, like, 55 of people on WHOOP are younger.
Speaker 1:I was about to ask.
Speaker 8:That means, like, 45%, you know, are are seeing that they've got some work to do. And and that's how we think it should be. You know, it's it's designed to be really transparent and honest.
Speaker 1:Yeah. But that's a good balance because if it was like 99% of whoop customers just happen to be, you know, half their biological age, you'd be raising some eyebrows. But it seems like you dialed it in appropriately. Anyway, is that an is that a health claim? Do you need to get that approved by the FDA?
Speaker 1:Are there other things that you that where the technology has progressed, but maybe the the legislative framework or the the government regulation framework hasn't advanced as fast as you'd like, and you feel like the consumer might be getting left behind because of some some, some cruft in DC?
Speaker 8:It's a good question because we've had some challenges with the FDA recently. I think it's worth just stating that the the role of the FDA is to regulate products that have a medical diagnosis. Sure. And and the twenty first Century Cures Act makes it pretty clear that if a product is intended for wellness, it's not designed to be regulated.
Speaker 5:Mhmm.
Speaker 8:And the, you know, the structure of this exists for heart rate, sleep, so on and so forth, where let's take heart rate for example. That's existed heart rate monitoring has existed since the eighties with chest straps and other tools. Obviously, WHOOP does it today, Apple Watch, so on and so forth. And so you can show heart rate in the context of sleep or exercise or whatever, and that is wellness and therefore is not regulated. If you want to tell someone that they have AFib, that all of a sudden is a diagnosis and so that would need to be regulated by the FDA.
Speaker 8:Now just to say, we also spent the last two and a half years getting regulated with the FDA doing clinical trials, and so now we have a medically cleared product by the FDA to do ECG monitoring from the wrist and also to do A fib detection. So that's just one example of the difference between wellness and medical. You know, with sleep, you can say hours of sleep, you can do staging, that's wellness. If you want to tell someone they have sleep apnea, that's medical. And where the FDA is inconsistent on this is with blood pressure.
Speaker 8:So WHOOP spent the last three years and tens of millions of dollars innovating to, develop blood pressure insights. And this is a really cutting edge feature that allows us to measure blood pressure from your wrist and give you a daily estimate, which, just to say, it is a pretty big innovation in the wearable space. And we brought this to market in May, and the FDA has come out saying that they think that it should be a regulated product. Now, again, back to this distinction between wellness and medical, we built the feature for wellness intended use. So it has a lot of disclaimers around it that it's not designed to diagnose hypertension.
Speaker 8:It's not a medical device. And it shows you how your blood pressure, impacts sleep and stress, how it's impacted by nutrition. I had a woman in my office last week, and she, was seeing low readings on her blood pressure insights page. Turned out she was dehydrated. She drinks more water.
Speaker 8:It goes back to, you know, a more normal reading. That's like a classic wellness use case. So we built this wellness feature, and now we're we're in a debate with the FDA over it. But we're fighting, to keep this product in market because, at the end of the day, it's it's the right thing to do. Consumers are loving it.
Speaker 8:It's innovative. And by the way, it's the law because the twenty first Century Cures Act says that you can't regulate wellness intended features.
Speaker 1:What are what are some of the breakpoints for amount of money to really have a good relationship with the FDA? Like, I imagine, like, a seed funded startup has no chance of getting cleared as a medical device for, you know, $300,000 investment. I imagine Apple should have no problem because they probably have an office in Washington DC, but, you know, you're, like, a pretty big company. I feel like you should be able to afford it. But, like, how tricky is it to and how expensive is it to actually just go for the other designation with any of the the wellness features and just kinda shift them over into the medical feature?
Speaker 1:And would there actually be a a product or consumer benefit if you did that?
Speaker 8:Well, it's a good question. There there are a lot of costs associated with being a medical device. Mhmm. You know? You have to go through a clinical trial process.
Speaker 8:You have to work with the FDA. Depending on the functionality, you you might need to hire a lot of consultants to support that. So it's a it's a hard thing for smaller companies to do. The other thing just to say it though is it's time consuming.
Speaker 1:Mhmm.
Speaker 8:So, you know, it'll delay your time to market by two, three, four years depending on the type of FDA approval that you're seeking.
Speaker 1:Yep.
Speaker 8:And and then I think the real main question is what's the intended use? Is the intended use around describing wellness or is the intended use around diagnosis? Yeah. And and so our intended use today is using blood pressure insights to help people understand their wellness. And in the long run, of course, we can imagine having a a more diagnostic product, but that's not what we've we've shipped yet today nor is it what we're claiming to have.
Speaker 1:Yeah. And I imagine that even even if you have unlimited money you still will be delayed by a couple years or the FDA reviews these claims and then the problem is is that you're shipping new hardware like every year.
Speaker 3:You have millions of people that are dehydrated and
Speaker 1:have Yeah. You're just way behind.
Speaker 3:Pressure because of it and aren't even able to be aware.
Speaker 1:Very rough. Well well, what's next? What is the plan? Is there is there there anything on the horizon that you wanna get through or or move over? Or is it just kind of, like, sort this debate out and then move on?
Speaker 8:Oh, we're gonna keep working with the FDA. I mean, like I said, we've been working with the FDA for years.
Speaker 1:Yeah.
Speaker 8:And and I have a lot of respect for the FDA. I think they they have an important governing function in this country. I I just think they've missed the mark on this on this particular case. And so we're gonna fight for that, and we're gonna fight for health data for Americans. In terms of where WHOOP is going right now, we just announced a bunch of new features that are coming out before the end of the year.
Speaker 8:One of which I'm very excited about is advanced labs. So WHOOP is gonna be coming out with our own, blood testing. You're gonna be able to upload all of your past blood tests. Doesn't matter if it was through a doctor or another product or what. That's all gonna be able to live inside WHOOP.
Speaker 8:It'll be graft over time. It'll become part of your WHOOP data. And then on a go forwards basis, you'll also be able to, take blood tests. And this is a real new capability for the company, but it's gonna help bring more and more of this data under one umbrella, one roof, so to speak.
Speaker 1:You know? Trying HIPAA compliant, I assume? Is that what is that the compliance framework that matters here? Yeah. You have to work with
Speaker 8:the right partners in order to enable it, and, obviously, the testing is pretty sophisticated.
Speaker 3:Sure.
Speaker 8:We've got, you know, some great partners in
Speaker 1:the space.
Speaker 8:But a lot of it's also explaining what the data means.
Speaker 1:Yep.
Speaker 8:And I think that's where WHOOP historically has been quite good is is, you know, presenting information and trying to coach on it.
Speaker 1:Yep. And
Speaker 8:what's powerful about the blood testing is we'll now be able to pair it with your twenty four seven physiological data. So, you know, maybe if you're not sleeping well, it has something to do with a biomarker or a blood test. You know? Maybe your exercise is improving improving something here. You you wanna be able to have all this data under one umbrella so you can understand it.
Speaker 1:Makes sense. Well, thank you so much for stopping by. Good luck with everything at the FDA, and good luck with the rest
Speaker 3:of friends over there. I'm sure you guys are spending a lot
Speaker 1:of time Enjoy the frequent flyer miles as you go to Washington DC regularly or maybe you take the train. Who knows? Anyway, thank you so much for stopping by.
Speaker 3:We'll talk to soon. Gents. Progress.
Speaker 2:See you guys.
Speaker 1:Have a good one. Bye. Up next, have a niche from knit coming into the studio. We are talking about them and I think we got some good news. I think we might be hitting the gong.
Speaker 3:I'll let you do the honors, Sean.
Speaker 1:Oh. First gong hit for me for the for the day. For the day. I'm gonna
Speaker 3:have to hit the Gong for the Palantir.
Speaker 6:But How are
Speaker 1:you doing? Would you mind kicking us off with a little bit of introduction on yourself and give us the latest news?
Speaker 7:Yeah. For sure. Well, first of all, thanks for having me here.
Speaker 1:Of course.
Speaker 3:My name
Speaker 7:is Anish, one of the cofounders and the CEO of Knit. And, yeah, we're excited. We announced our $16,100,000 series a on Thursday. Let's go. Congratulations.
Speaker 3:Backhand. Nice.
Speaker 1:Backhand. We love it. Amazing. Talk to us about the company. How are you pitching it right now?
Speaker 1:Who are the customers? Break it down for us.
Speaker 7:Yeah. For sure. So, yeah, Nick, we have built a system of agents that is really building the simplest way for enterprise consumer researchers to go from, hey. I have a business question to here's a story I can share with my stakeholders.
Speaker 1:Mhmm.
Speaker 7:So, yeah, what we're solving is this age old problem of anytime you wanna talk to your customers, especially these large enterprise brands, it's taking them four to six weeks. They're spending anywhere from tens of thousands to hundreds of thousands of dollars, and we're helping them do that now in days instead of weeks and at a fraction of the cost. So working with the largest enterprise consumer brands today.
Speaker 1:What is the is is the key differentiator just AI? Are there other differentiations on the the go to market strategy or the way you build a product? Like, is there counter positioning against the big, you know, 800 pound gorilla in this category that, you know, we we we know and might be at a basketball game, but, you know, he's he's definitely not taking days off recently.
Speaker 7:Yeah. So, yeah, I mean, great question there. So basically, at Knit, you know, what we've really what we're putting our hat or hanging our hat on right now is this idea for researcher driven AI. Mhmm. Right?
Speaker 7:So we were we're an AI native company. We started the company, you know, a year or two ago when when, AI was, still not not as prevalent in our industry as it is today. But what we realized is that, you know, you can you can run this data through the AI, but really what it's missing is the context that the researcher brings, understanding how this shows up in your business, how do you actually sell it into the organization. So throughout our plat platform, the way that shows up is one, we always have the researcher at the center of how we run research. So the researcher on our platform will go in and share, this is, you know, more information about my business, here's the context of my business, here are my stakeholders and how they like seeing the data so that we can get the output as close to that stakeholder ready.
Speaker 7:And then the second is we've invest pretty heavily into an internal research team. So throughout the process, all of our customers are paired with a dedicated expert researcher. And what we've seen is that that gets the AI to a better spot, a place where, our research customers can actually then take this. It's a really good first draft. They clean it up a little bit, and then they can share with their stakeholders pretty quickly.
Speaker 3:How are you closing all these logos? You got Amazon, Mars, ESPN, T Mobile, Paramount, NASCAR, Moet, Hennessey,
Speaker 1:over time. Insane lineup.
Speaker 3:WNBA. Congratulations. Insane lineup. Stacks for series a.
Speaker 7:Yeah. Well, started off with some start off with some good old hustle. You know? I I I flew out, met a bunch of our first customers. I just kind of figured it out.
Speaker 7:But really what we've invested going back to this researcher driven AI piece is we've really invested in the human aspect of it. So we primarily meet most of our customers through events. We show up. We go to all the major events in our industry. We we show up to their offices, take them out to, you know, take them out to dinner, and and invest heavily in face to face meetings.
Speaker 7:The other aspect is really around our
Speaker 3:What about NASCAR? You you you did you ever crush a beer at a NASCAR event for research purposes? I feel like that's that's a good it's a good sign of respect in in NASCAR
Speaker 7:NASCAR team was kind enough to invite us out to Daytona when we kicked off our partnership. So, yes, they they know how to have a good time
Speaker 3:for sure.
Speaker 1:That's why I say only drink champagne. It's just the biggest narrative violation of all time. It'd be great. Oh, what what so where yeah. I mean, you're talking about the customer the human centric research.
Speaker 1:Where where do humans excel in this in in this problem set, in this domain? And then where does AI thrive? Like where do you not wanna delegate a piece of the work to an AI? And where do you wanna spend zero minutes of human time focused on something?
Speaker 7:Yeah. Absolutely. So, you know, where we've seen humans really excel is is storytelling. Our entire platform is built around how can we take all the time intensive kind of grunt work that goes into research. So think, you know, setting up your first draft of the questionnaire, analyzing all this unstructured qualitative data, whether it's video data, open end text data.
Speaker 7:And we've built really good AI that can get you that first draft, whether it's a questionnaire or a final report. And really where the human researcher comes, both, our internal team as well as, you know, the external kind of partners that we work with is how do we take that that those insights and tell a really powerful story here, something that will actually drive action from our marketing team or product team or strategy team.
Speaker 1:Yeah. How important is it to build a, like, liquid supply of people that are willing to answer surveys? I you know, when I think about Amazon, Mars, ESPN, T Mobile, Paramount, NASCAR, Moa Hennessy, JBL. Like, a lot of those research projects are probably just, I wanna know how Americans feel about my product. It's not this hyper specific talk to just my customers, my my 10 people.
Speaker 1:I can probably call those people if I'm running that company. But if I wanna know how is my brand perceived Yeah.
Speaker 3:Nationally or globally. T Mobile T Mobile also can do like like easily survey active customers. Their own customers. New cohorts, old cohorts. Yep.
Speaker 3:Whereas like MoA can't Yeah. Necessarily.
Speaker 1:So how how important is it over time for you to be able to bring survey able people to a platform?
Speaker 7:Yeah. Yeah. Well, first of all, I'd say we're we're very data agnostic. Right? So we work with our partners where they layer us on top of their existing customer list.
Speaker 7:Sure. We work with some of the larger panel companies in our space. But as you know, making that stance that we're data agnostic, one thing that we've invested a lot of energy in and technology in is how do you make sure the quality of that data is really good? So a big problem in our industry today is, data quality challenges. There's fraud.
Speaker 7:There's bots. There's there's a lot of, not so great stuff happening. And so what we do is we've invested a lot in our AI tech too, especially if you think about video, for example. If you collect video responses, you can actually see the human on the other end. We analyze across seven different plus parameters to make sure that that human is who they say they are and actually speaking on topics.
Speaker 7:So the data quality is an area we've really stood out for our partners as well.
Speaker 1:Very cool. Else?
Speaker 3:No. This is great. Congratulations
Speaker 1:on the We will talk to you soon. Have a great rest of your day.
Speaker 3:Cheers.
Speaker 1:Talk to you soon.
Speaker 3:Let's rip some timeline.
Speaker 1:I have I have
Speaker 3:been waiting for this. Have Some breaking news. Breaking news.
Speaker 1:Saw Hill Bloom, Five Types of Wealth, over 300,000 copies of that book sold. Incredible.
Speaker 3:Not surprised.
Speaker 1:You know why? Because we reviewed it on the show right as it went live. And remember, interestingly, we tried to guess the five types of wealth.
Speaker 3:Cars, watches, art, homes.
Speaker 1:Horses. Yes. And we were wildly wrong. Apparently, it's it's it's something about, like, living some sort of balanced life that's not that materialistic. Money's only one of them.
Speaker 3:Yeah. We we put it
Speaker 1:in He had little bit of contrarian take. Yeah. But it's done very well and congratulations to Sahil. What a run. 300,000 copies of that book sold.
Speaker 1:Absolutely massive number. So congratulations to him.
Speaker 3:Well, Palantir earnings came out after the close north of a billion dollars in revenue for the last quarter up 48% year over year. Beat by 7%. Gonna be $1.180000000.00 next quarter. Estimate 11%. And then they've raised their full year guide 6% from last quarter.
Speaker 3:And they had raised already raised 11% from the start of the year. So they have 57% free cash flow margins Congratulations. Bad and 81% gross margins. 81% gross margins. So congratulations.
Speaker 3:Doesn't look like a consulting company to me. It does not. They're being Jammin Jammin at Altimeter broke it down.
Speaker 5:Oh, yeah.
Speaker 3:Let's see how it's doing after hours.
Speaker 1:Benjamin Jammin. Jammin.
Speaker 3:Up another 3% after hours. This is about to be mean It's
Speaker 1:a big company. This is gonna have to be Mag eight. Throw them in there.
Speaker 3:Mag eight. Nice nice nice number.
Speaker 1:Chinese number of wealth. Right?
Speaker 3:That's right. That's right, John. Of course. Let's do some timeline because I I love it so much.
Speaker 1:I love timeline.
Speaker 3:Doomer says
Speaker 1:What you got?
Speaker 3:So Dave Asprey posted yesterday, huge news for Jim Bros, a new study reveals incline walking burns more fat than running.
Speaker 1:We've getting into this. We've been doing this because of the bodybuilders. When they're on cuts, they do incline walking and it's so much easier to get yourself into the mood of just walking at three miles an hour on a 10% incline.
Speaker 3:Total bro science victory.
Speaker 1:It's total bro science victory. This is hilarious.
Speaker 3:Says jog cells absolutely mauling and seething over hike chads.
Speaker 1:It's remarkable. Yeah. I mean, when you're when you do that incline walk, you throw throw on a podcast, throw on some TVPN, listen to us, watch this, and start burning
Speaker 3:Friedman says, it's crazy that an LLM can win IMO gold before making a single funny joke. The only thing
Speaker 1:It's not.
Speaker 3:They do the the the that format where it's the be me jokes.
Speaker 1:Yeah. They're pretty good at that. But in general, yeah, RL is or funny jokes seem to be RL resistant, whereas the IMO is easily defined by a benchmark and therefore hackable. But still, you know, still valuable. And I I like this.
Speaker 1:I I prefer that that it focuses on IMO gold because I can't do that. But I can make funny jokes.
Speaker 3:Tay Kim, author of the Nvidia Way says, here's what I would if I was CEO of Apple. Quadruple the RAM and iPhones at 32 gigabytes and have max model at 64 gigabytes. Memory is oxygen for local on device AI. More equals smarter and more powerful. Take the margin hit.
Speaker 3:Memory isn't even that expensive. Buy Mistral or Anthropic and invest a 100,000,000,000 in AI compute annually. I don't agree
Speaker 1:with mistake. How much does it cost to buy Anthropic right now?
Speaker 3:We have 500,000,000,000 or something? I mean, the the bigger issue the bigger issue here is like, one, I just don't see France selling their national AI champion.
Speaker 1:Oh, totally.
Speaker 3:Why would Europe ever
Speaker 1:Yeah.
Speaker 3:Yeah. Allow that?
Speaker 1:That's the whole point of
Speaker 3:the company. And then Anthropic is dominating in code gen and like very clearly could be seeming I I it seems like they could be a trillion dollar business someday just generating code for the world.
Speaker 1:Yep.
Speaker 3:So I just don't see Apple, know, also Apple buying a, you know, whatever price they would have to be pay. Yep. And then and then like kind of, I don't know, keep the core code gen business running and then
Speaker 1:Well, regardless, shout out to Tay Kim. He's sending us some books of his book, The Nvidia Way. But
Speaker 3:I agree. He says Apple has the capital. Apple now knows the AI computing shift is existential. Where is the bold action and urgency? They are the only big tech company not in the AI race.
Speaker 1:Completely agree.
Speaker 3:Take the short term pain to have long term relevance.
Speaker 1:Yep. To definitely invest. Might might tweak my recommendation, but love the thought experiment. Very interesting. And we should switch to the Mark Gurman article, Power On.
Speaker 1:Apple has a new Answers team working on a stripped down alternative to ChatGPT for world knowledge as it looks to catch up in AI. So Apple has a new Answers team developing a stripped down rival to ChatGPT. This, of course, is like distill the model down, focus it, and you're gonna have this there's this idea that you're gonna have the really smart genius models, the big models training smaller models for specific things. You're gonna have one that just does code, one that just does, you know, Wikipedia, one that just does weather really well. And so, you can just kind of route between those, can be very efficient and you can probably run it on an iPhone.
Speaker 3:Equally important, Mark Zuckerberg says, without AI glasses, you'll be at a cognitive disadvantage. Hopes, revenge says, good. I'm used to it.
Speaker 1:Buy my product or you
Speaker 3:One of the best posters
Speaker 1:in history. Image is so good. I have him on the show.
Speaker 3:Pavel Esperuhov, former guest and friend of the show says, people will congratulate me on raising money. And it's like, bro, I am poor and stressed out. It should be condolences.
Speaker 1:Did you talk to Pavel in
Speaker 3:New York? And Will says, tell that to your ramp equity. Pavel says, the Pawtex store doesn't take ramp shares.
Speaker 1:Well, they should. They should.
Speaker 3:It's better than cash. Better than a than a store of value.
Speaker 1:Exactly. Exactly.
Speaker 3:Sam Altman says, entering the fast fashion era of SaaS very soon gets 16 k. Banger here. I The thing that's interesting here is it, my immediate thought was look at the performance of LVMH during the fast fashion era. True. And if you extrapolate this example, it says that craft driven luxury products will you know, will will endure.
Speaker 3:Obviously, fast fashion. Fashion is much more about like signaling and trends and Yeah. And SaaS can be very utilitarian. Yeah. Were you gonna were you gonna hit a gong or something?
Speaker 1:No. Was looking for the red flag. We have the red flag somewhere, but but I think the fast fashion we have a red flag in the studio. Ben, you wanna come wave that on camera?
Speaker 3:I'll wave it.
Speaker 1:Wave the red flag. But the reason I'm waving the red flag is be it's more like bay maybe maybe red flag's not the quite the right one. But the fast fashion is there's a different there's a different term here which is like disposable software. And and I like the formulation of like the meme generator era of SaaS. The meme generator era of SaaS where, you know, everyone got everyone got ability to make memes on their phone.
Speaker 1:And and that's just a lot a lot less controversial because it's like democratizing democratizing this is it it it's like the teespring of SaaS. It's like, I wanna be able to print my logo on a t shirt at the click of a button. I want the Shopify for SaaS soon. I want the the, you know, the the chatty pity for SaaS. The fast fashion feels like feels like very sloppy, but all the value and all the creativity being housed within Shein and Timu.
Speaker 1:And I don't like that as It's way more cooler when you see someone who's wearing like a small merch drop from one artist that they like and you're like, oh, that expresses something that's unique. And it's only made possible by the industrial capacity that is so ramped up to the point that you don't just need to have the Nike shirt and everyone has the same shirt. Everyone can express themselves differently. Like, when the screen printing era I remember, like, you used to just be able to take spray paint and just spray paint a logo on a shirt. Like, that that is what I'm looking forward We don't how to do that.
Speaker 1:We don't know how to do that anymore. But, yeah, mean, you walk around Venice mean, Beach there's so much an there. Example. You'll see like unique shirts that are very weird, cringe usually. But I like I like that idea of like democratizing the creation of SaaS so that there can be one off websites.
Speaker 1:But that doesn't feel fast fashioned me. I'm sure there will be fast fashion but
Speaker 3:I think it's more there's we're talking about this
Speaker 1:like SaaS.
Speaker 3:Apps as memes. There's a lot of apps. I like that. There's apps that should exist that shouldn't that you shouldn't spend time producing them because they don't have like an obvious business application. Yep.
Speaker 3:There's also apps that should exist but shouldn't have 10 engineers working on them. They just have one person who loves building the product. My dad showed me an app yesterday that you just sat outside. We were having lunch in my backyard
Speaker 1:Mhmm.
Speaker 3:And he put his phone down and it just was using the microphone to pick up which birds were
Speaker 1:No way.
Speaker 3:Which birds were in our yard.
Speaker 1:That's
Speaker 3:super And within like five minutes Yeah. It identified like 10 different birds Yeah. Yeah. Yeah. And was listing them out by name.
Speaker 3:Yep. That's really cool. He was showing me the profile and he can see all birds he's been around. It's like
Speaker 1:It's amazing.
Speaker 3:Insane. And so there's apps like that that I just think like probably a great small business that Yep.
Speaker 1:But And way cooler if you don't need to go and raise a bunch of money and then have this like cap table prefer pref stack like hanging over your head. It's just like That might be
Speaker 3:at its best a $5,000,000 a year business. Yeah. You have a small team on it, and
Speaker 1:it's And so if the fixed cost of of developing the first version is $5,000,000 in engineer salaries, it's like you never really clear the pref stack. Whereas if it's just an idea and you can just get it up and and then run it, it like can actually be a good business. Yeah. So I I like that. I like that world.
Speaker 1:Well, anyway, we have a funny we have a funny take in the in the chat from Azar talking about Apple should buy Perplexity, which we've talked about before. And I think that one makes more sense than Mistral or Anthropic. Much more gettable at the current valuation, 18,000,000,000 versus what? What's Anthropic at? A 150 or something?
Speaker 3:$1.60.
Speaker 1:$1.60. That seemed And then, they'd have to pay more, obviously. So that But I don't know why he said Sony. Sony is an interesting choice. I don't
Speaker 3:know Sonos? What
Speaker 1:Sonos? Sonos would be an interesting one for sure because then they could I mean, they already They have
Speaker 3:tried to do their speakers thing.
Speaker 1:But Sony I make great cameras. The cameras.
Speaker 3:Example where Apple doesn't need to become a foundation model lab. Yep. They just need to be able to build good products. Yep. And I think Perplexity's consistently built Yeah.
Speaker 3:Pretty solid products.
Speaker 1:I think at some point, you know, if you think like like iCloud is not hosted on AWS. They did build their own data centers eventually even though they're not a true hyperscaler. I could see them just being like, we trained our own models so that we know the legal risks. And I think that's a lot of what the hang up is with these partnerships and stuff is like, there's a lot of legal risk, a lot of brand risk, hallucination risk. All the stuff that the Foundation Model Labs are grappling with, whether it's AI psychosis or, you know, intellectual property infringement or hallucinations or just bad recommendations, mediocre products, all the rough stuff.
Speaker 1:It's great when that lives in the founder mode startup world. Apple's not in that world right now. And so it makes but but eventually, you will be able to develop these foundation models in a way that that obviates all that risk.
Speaker 3:Totally. Anyway While we're at it, Mark in the chat says this has quickly become my favorite show.
Speaker 1:Oh, thanks Mark.
Speaker 3:Well That's great to hear. Last message has quickly become my favorite message in the last I appreciate Mark. We have another post here from Matthew Zeitlin.
Speaker 1:Did you see this one from Frank? Sorry. Todd Graves should lead product at Perplexity. That's the CEO of Raisin Cane's chicken fingers. Someone's someone's clearly listening to to Founders Podcast 100%.
Speaker 3:Todd Graves
Speaker 1:should leave product at Apple. Founders Podcast Todd Graves fan.
Speaker 3:Apple should
Speaker 1:Hats off to you.
Speaker 3:Apple should acquire Raisin Canes.
Speaker 1:That'd be amazing. Put them right put them right in the Apple Store. You come in for some chicken, you pick up a new iPad. Do you need the iPad? Maybe not.
Speaker 1:But you enjoyed the iPad, you enjoyed the chicken.
Speaker 3:It's great. Matthew Zeitlin says, I only trust reporters that are fully locked in. And this is from a piece on Joe Weisenthal.
Speaker 1:In the New York Times.
Speaker 3:In the New York Times. Had an amazing
Speaker 1:Hot lots crushing.
Speaker 3:Yesterday, he says, mister Weisenthal who said he used nicotine probably more than his optimal and was going through a full 15 pouch can in a day.
Speaker 1:Yeah. You know what's better than than using a nicotine pouch? Developing a new nicotine pouch with your cohost before you launch your podcast.
Speaker 3:As a way to kinda test if we have, you know, on air Exactly.
Speaker 1:I was I was reading this and, you know, like, it's like, how are we the more extreme version of this somehow? It's, like, extremely odd and rare that we would be. But we actually did build a a nicotine pouch brand for finance bros called Xcel, and we and we launched this product before launching this podcast. And that was kind of where we this we we we realized that we were onto something because we sat down to record a promotional video that was supposed to be like three minutes long and we wound up yapping for over an hour.
Speaker 3:Ben was like, did you guys prep for that? Like Yeah. What was that?
Speaker 1:Ben was
Speaker 3:like, what was that? So we'll we'll end on this post. Okay. Lina says August Lina. Yeah.
Speaker 3:We just go by Talk her first about her
Speaker 1:a lot. She is the biggest Lina in tech.
Speaker 3:She says, a great reminder that letting startups grow into independently successful businesses rather than be bought up by existing giants can generate enormous value. A win for employees, investors, innovation and the public.
Speaker 1:And investment I'm
Speaker 3:actually talking about Figma. Yep. And Shea Levy says, Linahan cuts off the right hand of a genius.
Speaker 1:Lina Khan cuts off the right hand. You said Linahan.
Speaker 3:Linahan
Speaker 1:cuts No. Linahan. Khan. Linahan cuts off the right hand of a genius pianist who nevertheless perseveres and produces a one handed masterpiece for which she then takes credit. Yeah.
Speaker 1:Interesting. I don't know. It's a it's a it's a hot take in tech.
Speaker 3:Yeah. Lots of
Speaker 1:people relitigating this out.
Speaker 3:Alex Andreessen said something which was
Speaker 1:Heard not well.
Speaker 3:In a a in a free society, we let, you know, we should let people do things if they're not creating immediate harm. Right? Yeah. And so deciding how other people are gonna run their business is against is against I
Speaker 1:I still think you had the best the best post about the Lena Khan news. I'm wondering if I can pull it up. But where was it? It was you replying to Lena Khan. I'll I'll put it in the chat.
Speaker 3:You found it.
Speaker 1:I found it. It's in the timeline chat now. But if we can pull up this image of Jordy Hayes replying to Lena Khan, Lena Khan says, a great reminder that letting startups grow into independently successful businesses rather than being bought up by existing giants can generate enormous value. And Jordy Hayes shared a picture of a what is this? A soldier who's fought a war and there's a dolphin and rainbows in the Oh,
Speaker 3:it's like this guy just through like he's clear, you know, he's in paradise, right? There's tropical rainbows and
Speaker 1:There we go.
Speaker 3:And it's like, you know, he made it, you made it through a war and he's smiling now, but clearly, you know, been through been through it. Yeah. So Lena really made the Figma team. She put put them in a dark place. Made them
Speaker 1:iron it.
Speaker 3:They made it.
Speaker 1:They ironed it though. And now it's a better story. I don't know. Definitely. Lots of nuance there.
Speaker 3:Well, you
Speaker 1:for watching. Thank you for listening.
Speaker 3:It is gonna be a massive week Massive technology.
Speaker 1:There's some weeks.
Speaker 3:Some news dropping later in the week that we will be covering live. We'll be up in San Francisco.
Speaker 1:And we're excited.
Speaker 3:And in the meantime, I can't wait for tomorrow. Yeah. Leave
Speaker 1:us
Speaker 3:We'll
Speaker 1:talk to later.
Speaker 3:A five star review. Apple Podcasts. If you're listening on Apple Podcasts, I remember I recommend switching to a more video native platform Spotify Spotify. Or YouTube. And we appreciate all your support.
Speaker 3:Thank you. See you tomorrow.
Speaker 1:We'll see you tomorrow. Bye.