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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TBPN. Today is Friday, 10/09/2025. We are live from the TBPN oh, it's October 10. I forgot to change the date on my sheet. Good.
Speaker 1:Thank you for catching that. We are live from the TBPN Ultradome, the temple of technology, the fortress of finance, the capital of capital. And we wanted to open with this post by Jira tickets. GAT says, don't worry about the bubble. If it pops, we'll just make a new bubble.
Speaker 1:We got some guys who are really good at making new bubbles. Bubble talk
Speaker 2:is We used to pray for a bubble like this.
Speaker 1:We did. That was how we started the show. We said lever up. We said we're praying for a bubble. Well, it's here.
Speaker 1:People are starting to lever up, and it's time to double down and support our strongest soldiers, those who are holding up the the global economy. And we are joined by some folks who are going to be holding up the global economy. Sam Altman's joining in just fifty five minutes. Bill Bill Bill Peebles is joining.
Speaker 2:The Head of
Speaker 1:Sora. We also have a lot Gil, Robbie Stein from Google, Morgan Housel is coming on to talk about a book. Have a couple
Speaker 3:other
Speaker 2:Misha folks Laskin, which was a $2,000,000,000 round that got yesterday.
Speaker 1:And we have Dylan Patel from semi analysis talking about inference max, which is already putting the timeline in turmoil. Folks are taking shots at AMD, but Dylan Patel says he has the data that can that that shows that AMD in some cases can be a lower total cost to own. There are certain models that favor AMD. GPTOSS might be one of them. This is all from his new benchmark called InferenceMax, where he's gonna take us through it.
Speaker 1:It's a fascinating project. I think something like $50,000,000 of capital was kinda marshaled just to run the GPUs, to run the tests, to run the benchmarks because they run every single night and they vary different models.
Speaker 2:That Dylan's been able to marshal this amount of resources for effectively a test.
Speaker 1:Yeah. And he makes no money from it. It's free. It obviously, people will work with semi analysis at some point. It it's it's amazing.
Speaker 1:But basically, all the different AI companies are in helping out with this. So we'll dig into that.
Speaker 2:Boston in the chat says bubble made of steel, hopefully.
Speaker 1:A steel bubble.
Speaker 2:What about a a diamond bubble? Yeah. A diamond bubble. You'd
Speaker 1:I like it.
Speaker 2:Something. Something there.
Speaker 1:You'd still see see through it. In the meantime, let me tell you about Ramp. Time is money. Save both. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place.
Speaker 1:Mark Cuban, Dylan Eberscato on our team says, Mark Cuban is the greatest marketer of all time. Every video generated from his Cameo includes brought to you by Cost Plus Drugs. Even when it's not in the prompt, he baked this into his Cameo preferences. So every Sora post he appears in is an ad for cost plus drugs.
Speaker 2:I love how shameless Cuban is about promoting cost plus drugs. A lot of people become a bean air. Yep. They they lose the ability to just be shameless.
Speaker 1:Yeah.
Speaker 2:Not Mark Cuban.
Speaker 1:Like he
Speaker 2:every possible chance. Even on our show, I think he was promoting All of that. Cost Plus Drugs. Totally. Yeah.
Speaker 2:And I do think the the beautiful irony here of him, you know, not too many months ago saying, you know, we need to make sure that ads aren't in LLMs. He's the first person to incorporate ads into Sora. Of course, not a language model, but still brilliant.
Speaker 1:I I had this idea too. I'm I'm bummed that he scooped me, did it first. I did go into my prompt and I put always depict me as a bodybuilder. And and then it worked really well. Yeah.
Speaker 1:I I didn't really think about
Speaker 2:credit, you don't look that much different.
Speaker 1:Thank you. Thank you.
Speaker 2:The open AI team was playing around. They made a made a video Yeah. With John and Bill yesterday and they texted Ben. They were like, by any chance, did John like do some type of prompt that depicts him as having very large muscles? Because I guess they were trying to
Speaker 1:in a suit, and they're trying to make it as accurate as possible, of course. Represent me appropriately, and they just keep getting results of this, like, extra burly businessman. But it's having a lot of fun. So yeah. I mean, if you're playing around on Cameo, I highly encourage having some fun with that with that prompt.
Speaker 1:Throw a brand in there. Throw a description. I saw someone that said that they always wanna be depicted with an Adamar Piguet watch on the wrist.
Speaker 2:There we go.
Speaker 1:So no matter what you
Speaker 2:An
Speaker 4:AP. What you
Speaker 1:prompt, they get an AP on the wrist, which I love. If you want an AP, you can go to bezel.com. Get bezel.com. Your Bezel Concierge is available to source you any watch on the planet, seriously, anyone.
Speaker 2:Tom Osman in the chat says, gents, how's the horse? The horse is fantastic. Can we pull up the horse cam? Checking in on the horse.
Speaker 1:Yes.
Speaker 2:Never been better, folks. Thriving The horse. After its first full week in the with us.
Speaker 1:The horse is streamed live to all platforms. Thanks to Restream, one livestream, 30 plus destinations. Multistream and reach your audience wherever they are.
Speaker 2:Lots of good questions coming in from the chat. Fannis says there's a downgrade on the quality soar it generates the last few days. Have you noticed that? I have. It's hard to really tell.
Speaker 1:I haven't. I I I generated a few collabs with Sam and Bill last night. I thought they were fine. They were good. They take a minute, but I it's not noticeable to me at least.
Speaker 1:I interestingly, I have noticed that the Sora app sometimes can't just load normal videos. The generation actually works fine for me. Interestingly, it feels like they're CPU poor because just the loading the actual feed sometimes loads and then just doesn't play. So there's something going on there where they're just scaling all parts of the system, I'm sure, because I've seen some videos on Sora that now have, like, thousands of likes, which is clearly an indication
Speaker 5:that there are a lot of people
Speaker 2:watching consuming
Speaker 4:Yeah.
Speaker 1:Yeah. Video on the platform. Wait.
Speaker 2:But it Palantir says that the channel Palantir, of course, says OpenAI dropping 25,000,000,000 on a data center in Argentina deserves a drop. I hadn't seen this. This came out this morning. OpenAI and weigh a $25,000,000,000 Argentinian data center project.
Speaker 1:Wasn't there also a bailout of Argentina or something?
Speaker 2:Well, yeah. So while OpenAI and CERT SIR and Yes. You're working on a $25,000,000,000 data center project
Speaker 1:Yes.
Speaker 2:Bessen is, like, figuring out how to bail out the Argentinian government for just 20,000,000,000.
Speaker 1:Yes. Yes. There's this hilarious post by Alphapix. This was sent into our group chat, like, five different times. This is Besson.
Speaker 1:Wake up. Espresso shot. Thirteenth on Bloomberg quiz, bailout Argentina. And it just says, it's a shot of a screenshot of blue a Bloomberg terminal. And I guess this is from the quiz that goes out.
Speaker 1:He got a 242 score. He's 13. Oh. It just says anonymous US Department of Treasury. Of course, could be someone else, but it's very funny to imagine that it's him.
Speaker 1:I like that a lot.
Speaker 2:Anyways, this, I guess, news leaked of OpenAI and Sir Energy. They signed a letter of intent, an LOI. Yes. Now, let's give it up for LOIs carrying a lot of weight these days. For a data center project in Argentina requiring an investment of up to 25,000,000,000, the project would involve a large scale facility with a capacity of up to 500 megawatts to support advanced AI computing according to a government statement
Speaker 1:Yeah.
Speaker 2:Structured under Argentina's RIGI tax break scheme which went into effect last year. The project, if completed, would be one of the largest technology and energy infrastructure initiatives in the country's history. So I'm sure we'll get more news here. But another day, another Yeah. Multibillion dollar announcement from
Speaker 1:There was a man. There was a moment when
Speaker 2:Woah. Taylor Hodge in the chat. Buenos, I rage. AI race. Nominative to nepotism is going crazy.
Speaker 1:There was a moment when the the sovereign AI initiative was very much about building a data center and then running open source software on it. But I do think that it's not that unreasonable to say that it is critical to your geopolitical strategy as a country to just have an open AI data center in your country because then you have access to the open AI API at lower latency potentially. ChatGPT runs better in your country. That could, you know, be not just profitable from, like, a business perspective, but it's also a matter of, like, going where the energy is. Like, if you're a country that has cheap energy, it makes sense to kind of set up infrastructure there instead of trying to manufacture all of the energy in America, all build all the data centers in America, and then just have all of the tokens flowing over the Internet backbone.
Speaker 1:I don't know. It doesn't seem that great to me. But the the market is selling off. It's very sad. I wish we could be wearing white suits today, but it's a rough day in the market.
Speaker 1:The Dow is down 1.25% and the Nasdaq is down like
Speaker 2:member of our who who we won't name was using leverage and opened up their brokerage this morning and immediately said, I'm chopped and cooked in a very in a very Gen Z way. We at the team breakfast this morning, everybody got a got a good laugh. So hopefully, he'll be so back very soon. Yes. Rough one out there today.
Speaker 1:And the reason that that most people are, you know, describing why the the stock market is falling is because of a news from Donald Trump. Before we get into reading Donald Trump's statement, let's tell you Privy, Wallet Infrastructure for Every Bank. Privy makes it easier to build on crypto rails securely, spin up white label wallets, sign transactions, integrate on chain infrastructure all through one simple API.
Speaker 2:DJT should put ads in these posts for so long. I mean, he is really actually maxing out the word count on some of these. But but, yeah, as John was saying, S and P
Speaker 1:We talked about this yesterday. I actually have it in the journal. It made it to it made it to the front page of the journal today. Yesterday, China squeezes The United States in rare earth move, so China's newest restrictions on rare earth materials would mark a nearly unprecedented export control that stands to disrupt the global economy. That does not sound good.
Speaker 1:Giving Beijing more leverage in trade talks and ratcheting up pressure on the Trump administration to respond. So we talked about this yesterday. We went through some of
Speaker 2:Isaac Foster in the chat just just needs more leverage to come back. 100%. Get the get the intern more leverage.
Speaker 1:Yes.
Speaker 2:Make it all back.
Speaker 1:Always always lever up. So, yes, yesterday, we read through Dean Ball's analysis of the rare earth move by China. There's there there's some green shoots there. We do have America does have some leverage, but it's all in the backdrop of this larger trade negotiation. Now, the United States government has responded.
Speaker 1:Donald Trump has responded with this letter or this post on Truth Social. I think they're just called truths over there. Yep. He and Kobe and the Kobe Essie letter, kinda breaks it down. Breaking the S and P 500 falls 70 points in seconds after president Trump publishes the below paragraph about China.
Speaker 1:Trump says he is calculating interest increased tariffs on Chinese products. Trump also says there is no reason to meet Chinese president Xi Jinping anymore. And so we can read through a little bit of this. It's a very long post. He's he's he's become a thread boy over there.
Speaker 1:Trump says some very strange things are happening in China. They are becoming very hostile and sending letters to countries throughout the world that they want to impose export controls on each and every element of production having to do with rare earths and virtually anything else they can think of. Even if it's not manufactured in China, nobody has ever seen anything like this. But, essentially, it would clog the markets and make life difficult for virtually every country in the world, especially for China. We have been contacted by other countries who are extremely angry at this trade hostility, which came out of nowhere.
Speaker 1:Our relationship with China over the past six months has been a very good one, thereby making this move on trade an even more surprising one. I have always felt that they have been lying in wait, and now, as usual, I have been proven right. There's no way that China would be allowed to hold the world captive, but that seems to have been their plan for quite some time, starting with the magnets, in quotes, and other elements that they have quietly amassed into somewhat of a monopoly position, a rather sinister and hostile move to say the least. But The US has a monopoly has monopoly positions also, much stronger and much more far reaching than China's. I have just not chosen to use them.
Speaker 1:There was never a reason to do so until now, he says. The letter they sent is many pages long and details with great specificity each and every element that they wanna from other nations. Things that were routine are no longer routine at all. I've not spoken to president Xi Jinping because there was no reason to do so. This was a real surprise not only to me, to all the leaders of the free world.
Speaker 1:I was to meet president Xi in two weeks at APEC in South Korea, but now there seems to be no reason to do so. She was pulling out of the talks. The Chinese letters were especially inappropriate in that this was the day that after three thousand years of bedlam and infighting, there was peace in The Middle East. I I wonder if that timing was coincidental, putting putting on the tinfoil hat. Just noticing coincidences.
Speaker 1:Yes. Depending depending on what China says about the hostile order that that they have just put out, I will be forced as president of The United States to financially counter their move for every element they have been able to monopolize. We have too. I never thought it would come to this, but perhaps, as with all things, the time has come. Ultimately, though potentially painful, it will be a very good thing.
Speaker 1:In the end, for The USA, one of the policies that we are calculating this moment is a massive increase in of tariffs on Chinese products coming to The United States. There are many other countermeasures that are likewise under serious consideration. Thank you for your attention to this matter. And so it's a the trade war is returning and we will continue to monitor the situation.
Speaker 2:And again, don't need to freak out. The S and P's record high was just a couple days ago. Yeah. So
Speaker 1:And with all these, you know, the the tensions can ratchet up very quickly. We saw this with the the the tariff tantrum, the Liberation Day, the massive sell off, and then quickly things were negotiated and largely reversed in many ways. A lot of companies got through that. I mean, we just experienced this with Base Power where we were like, so you're in a lot of trouble. And then they got through it entirely very quickly and raised a billion dollars.
Speaker 2:Yeah. Raising a massively Yeah. Oversubscribed brand.
Speaker 1:Yeah. But but in in
Speaker 2:the backdrop, think that it changed their strategy.
Speaker 1:Woah. It was rough.
Speaker 2:Yeah. I don't think it changed their strategy. Think they always intended to set up the factory in Austin.
Speaker 1:Of course.
Speaker 2:But I'm sure it certainly accelerated.
Speaker 1:Yeah. But they have, you know, they have to get certain supply chain is so global all over the place that it it it was certainly a cause for concern.
Speaker 2:But Well, speaking of energy, Oklo, the What's
Speaker 1:going on with Oklo?
Speaker 2:Sam Alton company. Backed that Sam Alton backed years and years ago. Think he 2014. On the board now.
Speaker 1:2014.
Speaker 2:But Oclo is up almost 10% today. Yeah. So a little green in the midst of a lot of red.
Speaker 1:Well, let me tell you about Cognition. They're the makers of Devon. Devon is the AI software engineer. Crush your backlog with your personal AI engineering team. Pedro Domingos has a chart from the Financial Times showing the number of years after release to scale the Internet versus just scaling ChatGPT.
Speaker 1:And the Internet took thirteen years to get to 800,000,000 users. ChatGPT took a little over two, maybe three. So And it's more remarkable.
Speaker 2:Internet is the greatest distribution engine for products
Speaker 1:in history. ChatGPT. Yeah. So it's it it is a very accelerator effect.
Speaker 2:Tron Ares is getting some reviews. The Telegraph had a headline today. They said, Tron Ares is so bad, it makes you wish AI would hurry up and destroy Hollywood.
Speaker 1:Long case for Sword.
Speaker 2:One out of five stars.
Speaker 1:I was so
Speaker 2:excited for Tron populated by some of the most aggressively charmless characters ever seen in a blockbuster. Almost makes me wanna see it now.
Speaker 1:I agree. I agree. I wanna see it. I love the first Tron. I'm optimistic that the second Tron will deliver in one way or another.
Speaker 1:Either way, should we go to SoftBank? Masayoshi Son is seeking $5,000,000,000 in a margin loan backed by ARM stock. Know that he's he's flush with ARM stock. It was the way he made his second $100,000,000,000. He made his first with Alibaba and his second with ARM.
Speaker 1:So SoftBank Group is in talks to borrow 5,000,000,000 from global banks, refilling its coffers at a time Masayoshi Son is accelerating the Japanese investment firm's bets on
Speaker 2:We gotta pause for one second and give Masa credit for not top ticking OpenAI. He invested Yep. Earlier this year somewhere around a $330,000,000,000 valuation. Yep. A lot of people were saying, this is crazy.
Speaker 2:Yep. They thought it was bearish. Now, OpenAI just closed
Speaker 1:Yeah.
Speaker 2:A secondary or or a tender offer at 500,000,000,000. So nice little markup for Masa. Hopefully, he's been able to actually fund the entire investment. Yeah. I think there's a number of OpenAI investors that have been you know, working to pull capital Yeah.
Speaker 2:Necessary together.
Speaker 1:It was also a it was it was a big jump in valuation at the time. I feel like it was more than, a two x step up or something from the previous round that everyone was talking about. And so I was like, oh, okay. This is this is a big jump in valuation, but, of course, the business had grown. And it was also there was also that funny picture of Masayoshi Son holding crystal ball and then dropping it, and you could read all sorts of things into that.
Speaker 1:But if you read too much into it, you would be wrong because it's been on a tear, and he's done quite well. But now he is levering up further. So SoftBank is close to signing a deal with a handful of lenders for a margin loan secured by shares of its chip, of its chip unit, ARM Holdings. The capital will fund additional investment in OpenAI this year, the people said, who asked not to be identified. A margin loan is a type of facility where you borrow money using your investments like stocks as collateral.
Speaker 1:A representative for SoftBank declined to comment. SoftBank shares slid 4% on Friday, the most since September 26.
Speaker 2:And Harm is down 8% themselves.
Speaker 1:I wonder how much that is tied to the other stock Part its
Speaker 2:mortgage Stanley lowered their price target
Speaker 1:Okay.
Speaker 2:Based on the 2027
Speaker 1:For SoftBank or ARM?
Speaker 2:ARM's 2027 guidance. So that's a factor.
Speaker 1:But Yep. So SOAN has embarked on a spending spree this year to try and position the firm as a linchpin in the global AI boom, most recently pledging as much as 30,000,000,000 towards OpenAI and buying ABB's robotics arm for 5,400,000,000.0. I had no idea he bought an entire robotics division. That's that's pretty cool. Arm's 38% rally this year has in turn granted SoftBank the confidence and leeway to grow its investment war chest.
Speaker 1:SoftBank has raised a total of 13,000,000,000 in margin loans from Arm shares with 5,000,000,000 still under undrawn. I wonder how much Elon took in margin loan during the the Twitter buyout because I feel like some of that was backed by Tesla stock. He was saying he wasn't gonna sell Tesla stock, but then I think he got a margin loan against it, maybe. I'm not exactly sure.
Speaker 2:All I know is that that x, the social media platform or Twitter Yep. What was originally Twitter's, like, annual interest payments were north of a billion Mhmm. Which was part of what what created urgency to, you know, merge with XAI. Yep. Had a had a, obviously, larger valuation.
Speaker 2:And again, still putting pressure on the combined entity, but at least equity overall is marked up substantially. Yeah. I think if if I remember correctly, yeah, they there was like something around I think it was like very levered. It was like something like that, like, 30,000,000,000.
Speaker 1:Something like that. There were a couple different tranches, and I I I don't remember the exact details. But, I mean, was he able to roll it into xAI and you know, raise more money and so, you know, these things can can kind of like you can you can move the chips around the board for for years and and try different things to to piece together value. Well, if you want something that you won't have to need you won't have to go into debt to sign up for because you can sign up for free, figma.com. Think bigger, build faster.
Speaker 1:Figma helps design development teams build great products together. The group had secured about 8,000,000,000 in margin loans ahead of ARM's initial IPO in 2023. 11 banks, including JPMorgan, Barclays, BNP, Credit Agricole, Goldman Sachs provided the facilities by linking mandates for arms IPO to loans. Earlier this year, the group also raised a $15,000,000,000 one year facility to help fund AI investments in The United States in what is among its largest borrowings raised. Zones insatiable appetite for deals has extended
Speaker 2:far and wide. I thought I was gonna say insatiable appetite for leverage. For capital. This is also true.
Speaker 1:For deals. I mean, when when should you have a satiable appetite for deals? Everyone should have an insatiable appetite for deals. Yeah. Send it on ideas to capitalize on the ex on the expected exponential growth of AI technologies.
Speaker 1:His most ambitious projects include the $500,000,000,000 Stargate initiative that aims to build data centers across The United States in partnership with Oracle and OpenAI. SoftBank is also exploring the feasibility of large scale industrial manufacturing hub in The United States, that's cool, which would encompass production lines for AI powered industrial robots. That's probably a little bit further out, but but pretty cool. SoftBank joins a wave of big tech firms and investors plowing unprecedented amounts of capital into a technology with the potential to transform industries and economies. But the flurry of deals and partnerships, many involving Nvidia Corp and OpenAI, are escalating concerns that an increasingly complex Internet
Speaker 2:Something that I wanna understand better is how much chatter there was about the circular telecom deals in in, like, 1999 and Yep. In early the early in the first quarter of of two thousand. Yeah. Because
Speaker 1:Oh, by the 2000, it was, like, front page everywhere.
Speaker 2:Well, things didn't really correct until March. Yeah. But I'm saying it
Speaker 1:1999, The New Yorker ran a profile of Mary Meeker that's called the woman in the bubble. So, like, The New Yorker, which isn't in the business of, like, calling bubbles early, was just describing it, you know, like, everyone agrees that this is a bubble, we're profiling someone who's at the center of it. Yep. At in The New Yorker,
Speaker 2:which I feel like is still six months below.
Speaker 1:But but
Speaker 2:You know, over the last couple weeks, you can't scroll three posts Yep. Without seeing somebody, you know, posting some type of graphic or or meme or just general concern for the circular nature of some of these transactions.
Speaker 1:Yep.
Speaker 2:The you know, and and Doug's point is, from some analysis from Monday's interview is that, you know, the next leg up in the bubble Yep. Is leverage. But here, Morgan Stanley, in this article, is estimating the amount of debt tied to AI has ballooned to 1,200,000,000,000.0, making it the largest segment in the investment grade market. Pretty remarkable.
Speaker 1:Yeah. We were talking about, like, when does the number actually get big in terms of total debt? Because if you look at, like, the market for treasuries, that's obviously way bigger. Or the market caps of all the hyperscalers combined, that's, you know, 10 to 20,000,000,000,000. It's really, really big.
Speaker 1:But 1,000,000,000,000 of debt feels like a lot. That feels like a lot. And so
Speaker 2:I wrote But the notable thing here is understanding who is actually on the hook for the debt. A lot of, I think, OpenAI broadly has done has has made a a extremely made it had a focus of not tying the debt to the actual for profit entity and then obviously not the the nonprofit Yep. Itself. Right? So the question is, they can be at the center of all this, but they're not necessarily directly on the hook Yep.
Speaker 2:For any of this, you know, 1,200,000,000,000.0.
Speaker 1:Yeah. Yeah. Yeah. Where where where does the actual debt live? What is it entitled to?
Speaker 1:Does it have warrants over equity? Like, all of that matters a ton. I wrote about, the bubble talk in today's newsletter. You can sign up at tbpn.com. And I was reflecting on ten years ago in 2015, Sam Altman was also being, you know, talked about a lot of people were talking about the bubble.
Speaker 1:Vanity Fair ran a an article at the time that said something to the effect of, like, like, we talked to multiple experts in financial bubbles, and they say it's gonna pop any minute. And so Sam formulated this bet and said that, like, look, I'm the I think he was the head of YC at the time. He was like, I don't think we're in a bubble right now. And he framed it in three propositions that all had to come true. So the first one was Uber, Palantir, Airbnb, Dropbox, Pinterest, and SpaceX.
Speaker 1:They were worth under 100,000,000,000 at the time in 2015. By 2020, five years from then, he said they have to be worth more than 200,000,000,000. And second, he said mid midsized companies, Stripe, Zenefits, Instacart, Mixpanel, Teespring, Optimizely, Coinbase, Docker, and Weebly together had to be worth over 27,000,000,000. They were worth less than 9 back in 2015. And the brand new YC Winter twenty fifteen batch needed to be worth over 3,000,000,000.
Speaker 1:And what's crazy is that if you if you just think about those those three those three buckets, which one so Sam got two of them right. He missed on one. Which one do you think he missed on? The big companies, Uber, Palantir, SpaceX, those ones needed a double. The mid tier companies, Stripe
Speaker 2:Well, I'm not gonna pretend. I know that he missed on the big the public company.
Speaker 1:He missed on the big companies, which is crazy because today, Uber's a $200,000,000,000 company. SpaceX and Palantir are both at $405,100. So you over a trillion dollars now, but he missed because a couple of those companies had kind of traded down that particular year. But he hit on the second one. Coinbase obviously went huge.
Speaker 1:Stripe as well. And and in the third, in the in the in the YC Winter twenty fifteen batch, there was a company called GitLab that's already worth something like 7 or $8,000,000,000 in the public markets. And so he hit on all on basically all of them. I still regard it as, like, he was very, very close to being just completely correct. He did lose the bet.
Speaker 1:But as we talk about another bubble, I was I was thinking about, like, should we have another framework for, like, where we expect things to go in five years to assess it. And I feel like energy is where we should go with this. So in the newsletter, you can go read it. I tried to formulate, like, how much energy OpenAI will be consuming in in five years in 2030, how much energy data centers globally will be consuming, and how much energy will The United States be producing. And there are obviously linear projections of all of these, but I think Sam is is bullish on the idea of, like, we're gonna destroy those those estimates, and we're going to see significant build out.
Speaker 1:And he's certainly doing deals to make that happen. But I wonder how he would quantify it. So I'd like to dig in there. But first, let me tell you about Vanta. Automate compliance, manage risk, improve trust continuously.
Speaker 1:Vanta's trust management platform takes the manual work out of your security and compliance process, replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.
Speaker 2:There's an article in the New York Times today
Speaker 3:Let's go through it.
Speaker 2:On a Singaporean firm called Mega Speed.
Speaker 4:Mhmm.
Speaker 2:The CEO has socialized with Nvidia's Jensen Huang. Now the company is being scrutinized by US officials for its ties to China. So on a humid June night last year, Jensen Huang, the chief executive of Nvidia held court with several of his company's major Asian customers at a bar with sweeping views of Taipei. They stood and toasted the booming artificial intelligence industry. Next to NVIDIA chief was a woman named Huang Lee Lei or Alice Huang, an executive of Singapore based data center company called Mega Speed, great name, which was poised to buy 2,000,000,000 of Nvidia chips.
Speaker 2:Though Ms. Huang and Mega Speed are little known players in the AI industry, their association with Nvidia and its CEO has recently become a preoccupation in Washington. Commerce department officials have been investigating whether Mega Speed, which has close ties to Chinese tech firms, is helping companies in China sidestep American export restrictions according to more than a half dozen current and former officials and other people familiar with the companies who spoke on condition of anonymity to discuss examination that is not public. The inquiry inquiry, which is active, calls into question how closely NVIDIA is tracking where its AI chips end up and highlights the possibilities of American export laws easily being sidestepped. Mega Speed is also facing scrutiny from Singaporean police who told the New York Times in a statement that they're investigating the company for breaching local laws without elaborating further.
Speaker 2:As the dominant provider of AI chips, NVIDIA's annual revenue has soared. I'm gonna skip over this because
Speaker 6:I know you
Speaker 2:already know this.
Speaker 1:Yeah. So While you skip over that, let me tell you about graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 2:Continue, Jordy. Mega Speed illustrates the challenges facing US government officials trying to keep China from assessing powerful AI chips. After splitting off from a Chinese gaming company in 2023, Mega Speed set up a subsidiary in Malaysia that quickly snapped up nearly 2,000,000,000 worth of NVIDIA's most advanced products. Most of those chips came from The US branch of a Chinese company that has already been sanctioned for providing technology to the Chinese military according to records obtained through Import Genius, which is started by
Speaker 1:Sorry.
Speaker 2:Ryan from Flexport.
Speaker 1:Yes. That's right. And his brother. That was
Speaker 2:his first David.
Speaker 1:That was his first yeah.
Speaker 2:That was
Speaker 1:his first company. It's so funny that the whole, like, pivot to AI is not just a Silicon Valley American meme. Like, it's definitely happening in China too. They're like They went from Yeah. We're doing gaming, but, like, you know, this AI stuff is way better.
Speaker 1:Let's just pivot to AI. Or, like, High Flyer being like, we gotta we gotta get on the large language model actually. Is cool. Yeah. It's cool.
Speaker 1:But like, let's just let's focus on AI.
Speaker 2:Yeah. So anyways, this this story is evolving. I I'm not surprised to hear that that I mean, I think it's actually good that the commerce department is, like, trying to figure out what's actually happening here. I think there's been a lot of rumors floating around. And, like, you know, data center companies in Malaysia and Singapore, you know, having, you know, an extreme demand for chips and this uncertainty of like, Okay, who's actually paying?
Speaker 1:Remember one of our first episodes, we read a Wall Street Journal article on Malaysia, Switzerland of AI. Yeah. Because everyone was building a ton of data centers there so that they could sell inference or build token factories that would sell to both American companies, Singaporean companies, Chinese companies, and there was kind of like this neutral territory. But as the trade war heats up, people are gonna want more answers, more more analysis. They they're gonna wanna understand exactly, you know, are any of these things does every deal fit perfectly within the current restriction framework?
Speaker 1:Right? Yeah. Because obviously diversion is is a natural thing. I mean, we've heard we've heard stories of this in the Ukraine Russia conflict where companies will go you know, entrepreneurs will go buy DJI drones and then go deliver them and, you know, what what are the actual restrictions on that? It all gets when when when the economic stakes are high and things are trading at a premium, you can literally I mean, we've heard this from, there was one account of someone loading the training data onto hard drives, flying to another country, doing the training run, saving the weights onto the hard drives, then flying back.
Speaker 1:And it's like, that's kinda hard to predict. That definitely is a runaround on the chip controls. It's not it's not the the stated goal of those chip controls. But, you know, when there's huge dollars on the line and training runs are extremely valuable
Speaker 2:And I think it's we'll
Speaker 1:figure out a way.
Speaker 2:It's fair to kind of try to understand miss Huang, the CEO of Mega Speed's background. She spent much of her career in Mainland China Mhmm. Including working as a television reporter for Chinese state media.
Speaker 1:Let's hear it for television reporters. One of us. One of us.
Speaker 2:From
Speaker 1:One of us.
Speaker 2:From being a television reporter to creating a new hyperscaler.
Speaker 1:I love it.
Speaker 2:Do anything in this world.
Speaker 1:Who knows? I think we'll stay out of that game but good to see that you can
Speaker 2:start talking to our anywhere. We'll leave it to our friends. Yeah. Good post here from High Yield Harry.
Speaker 1:Okay.
Speaker 2:It says a sixteen z and Sequoia co It's leading the Crips and the Bloods. Is that what this is? Uniting. Uniting.
Speaker 1:Of Is that what's This is about Calshi?
Speaker 2:Referencing Calshi who followed Polymarket Yes. Who announced their $2,000,000,000 financing earlier this week from ICE, not the immigration No. Branch of the government.
Speaker 1:But International Commodities Exchange, the Intercontinental Exchange.
Speaker 2:That's right. That's the name. But CallSheet raised $300,000,000 backed by Andreessen Horowitz. And the prediction market wars are heating up Coinbase, Google's Capital G, a sixteen z, and Paradigm, we're investing in this new as well as Sequoia, we're investing in this new round. And so by this point, everybody sort of picked a picked a side.
Speaker 2:Yep. And I would not want to be a net new prediction market company getting started today. I think there's gonna be an insane the capital war is just sort of starting in the category.
Speaker 1:I mean, do you remember the capital war between Lyft and Uber? Were That
Speaker 2:the boy.
Speaker 1:There were, like, three or four, probably 10 other companies that were in the ride hailing industry. And they, like, they aren't public companies today. They they they either sold or pivoted or found some other niche. But when you're when you're in this, like, duopoly world and this capital fight and there's maybe one that's running away one way or another, it yeah. It's painful to be number three.
Speaker 2:Call sheet is on track to do 50,000,000,000 in trading volume
Speaker 1:Yeah.
Speaker 2:Trading volume. Says Call sheet 300,000,000 last year. So a pretty wild jump. Yep. Competition, is certainly heating up.
Speaker 2:This will be an interesting one to watch.
Speaker 1:Yeah. Brandon Jacoby is putting another app in the truth zone. What happened here? Brookwell launched a an app, I guess. And Brandon Jacoby says, hey, Brookwell.
Speaker 1:App. Great design. I was proud of it when we designed it for capital in
Speaker 2:2020 So this company, Brandon and I, obviously, worked together to design the app that you can see here. Brandon is an incredible designer and spent hundreds of hours developing this experience. And ultimately, think Brookwell seemingly Same. Pretty much copied it to a t and then even doubled down and said, like, yes and.
Speaker 1:Wait. Really?
Speaker 2:Like, the the founder replied
Speaker 1:to Was like, yeah. Yeah. Yeah. Basically
Speaker 2:saying, yeah. I mean, I think it's like
Speaker 1:It's it's sort of fair if it's not like
Speaker 2:It's fair game.
Speaker 1:Yeah. Fair game for to to pull a design off the shelf that's not actively being used as much. You know But it's
Speaker 2:still nice
Speaker 1:to go further back in time like
Speaker 2:You can still bring your own ideas to it, you know. Yeah. I think Brandon's frustration is probably just that you didn't bring many new ideas. Yeah. Just kind of copy and paste it.
Speaker 1:A lot of that going on.
Speaker 2:John Titor is quoting a post that says, this is a camera. It's 200 by 200 pixels, 30 frames per second. I didn't know they made cameras this small. John says there are certain things you just can't learn about if you're prone to paranoia.
Speaker 1:This is actually crazy. Yeah. So the I mean, the the the community note gives a little bit more context here. It does say that this is the camera module. It is capable of producing an analog video output, but it needs a power supply, battery, or storage.
Speaker 1:And so Yeah.
Speaker 2:And the concern here is the implication is that this camera could be built into effectively just like a dot on the wall, and you could store the power
Speaker 1:Oh, it's only two hundred two hundred by 200 pixel. I was saying, should we get these and put them all around the set? And so you just walk into the TVP and UltraDome and you don't see any cameras moving. Like, we have a slider cam now. We have a lot of different cameras around.
Speaker 1:And you kinda trip over them and, you know, you gotta cable manage them. But imagine if we could just put one little dot on that turbo puffer fish there, one little dot on the microphone. You can just get any any image from any place. Maybe
Speaker 2:Big debate on the timeline over whether you should have shoes on or on in the office. Ben Lang over at Cursor says no shoes at Cursor NYC. Will O'Brien says if Ulysses ever ends up like this, you have permission to shoot me in the face. Very aggressive response. I I can see why companies that are just, you know, wanna wanna be cozy, wanna have a a I think wearing shoes in your home is insane.
Speaker 2:Yeah. I'm very against I agree. Walking around the house with shoes that you wear out in the world. Sure. Plenty of studies that just show you're just tracking in All sorts of all sorts of
Speaker 1:Makes sense.
Speaker 2:And Do
Speaker 1:you do slippers in the house then?
Speaker 2:I I enjoy slippers.
Speaker 1:I feel like if you if you don't do slippers, then you need to keep keep the whole house warmer. You need more carpets. But I wonder I wonder what else went into plan to make sure that Cursor HQ in New York City is fully cozy. Because you don't just wanna take off your shoes and then be around. Like, we have concrete floors here.
Speaker 1:We are shoes on facility. No one takes off their shoes. But if we were to go to shoes off, I think we would need to get some carpets, keep the place a little bit toastier.
Speaker 2:Yep. Right?
Speaker 1:Or or maybe give everyone a pair of slippers.
Speaker 2:What's going on here? This account Toys x y z is sharing a nano banana watermark. Have they how do you know how this works functionally? Yeah. So You have to, like, turn like, do you have to basically increase the saturation of the photo in order to see it?
Speaker 1:So this pattern that you see are are subtle changes in the saturation. If And you go to the next image, you can see what it looks like on an actual Nano Banana image, not just the watermark. And so this is a black and white image. This was generated as black and white, but Nano Banana uses slight variations in the colors to just have a little bit of saturation. So normally, if you're looking at like a grayscale image, basically, the saturation is turned down to zero, and there is no color whatsoever.
Speaker 1:There's only there's only brightness. Right? You're you're going from zero to one just on the black scale. Nano Banana, even if you ask for a black and white image, it will output an image that does have a little bit of color, and it will vary this pattern. So there's little bits of red, little bits of green, little bits of red, little bits of green.
Speaker 1:And and so this is being put in every nano banana image. Of course, as soon as you discover this pattern, there's probably some ability to remove it. Even just a slight edit might change this. Like, you could just go in and actually reduce the saturation to zero, and then the watermark's gone. Yeah.
Speaker 1:And I'm sure people will do that. But
Speaker 2:it's Yeah. There will be somebody will make an app where you just upload an AI photo, and then it figures out which which which model generated it and then figures out how to remove whatever hidden watermark is included until you have a clean image.
Speaker 1:Totally. There's already a ton of Sora watermark remover tools out there. It's I think this is still just more useful for, you know, having a reality check on, like, you know, was someone dumb enough to not even remove the watermark? At least you can just automatically flag that. And a lot of and at least it injects an extra step, an extra cost into generating, you know, like spam images or whatever you would wanna do that's, like, malicious that would you'd want to discover the watermark.
Speaker 1:But fortunately, I feel like even with Nana Banana, you can still just look at the image and tell. Yeah. But if you want to generate some generative media, head over to Fall, the world's best generative image, video, and audio models all in one place, developing fine tune models with serverless GPUs and on demand clusters.
Speaker 2:Let's Fall. Jared Kushner? Jared Kushner. They they Matt Steeb said in an article a while back, Jared Kushner claims he can solve Israeli Palestinian conflict because he's quote, read 25 books on it. And, of course, seems like that was
Speaker 1:hopefully No. The real reason is what Will Mineta said.
Speaker 2:It would is that In New York real estate.
Speaker 1:Yes. Yes. He's been doing New York New York real estate deals. And so he's ready to broker another real estate deals effectively. But, I mean, we we haven't really covered the the the the peace deals.
Speaker 1:The the journal's writing about it a little bit. There's I guess, there's gonna be a vote. But there's plenty of serve
Speaker 2:there's plenty Another news, Barry Weiss asked everyone at across CBS News to send her a memo by next Tuesday explaining how they spend their workday and what's working, not working.
Speaker 1:Is this a what did you get done this week? Basically.
Speaker 2:It's a it's a what what exactly do you do here? You think it's that? I I I think I mean, as it's great asking, hey, what's working? What's not working? Yes.
Speaker 2:But as a manager and you're coming into a new or a leader, you're coming into a new organization, you wanna get a pulse on, okay, what are Yep. What are people actually doing here? Yep. Because I think the question is with this with with everything that David Ellison is doing is is he trying to turn these into media companies that can create massive cash flow?
Speaker 1:Mhmm.
Speaker 2:Is or are they strategic enough? Like, don't think when Jeff Bezos was buying the Washington Post, he was thinking, I'm buying this to make money necessarily. Mhmm. And so the question is, I think Max Taney here, I I I my the way that this has been written, I think question is, like, are they gonna let a bunch of people go?
Speaker 1:Oh, interesting.
Speaker 2:How I would I would read into it.
Speaker 1:But Yeah. I mean, at the same time, like, if you're coming into if you're coming in as CEO or or, you know, editor in chief of a new organization and you're like, my my view on it is that they're actually severely understaffed. And the first thing I'm gonna do is is triple head count. It's still reasonable to ask what everyone does. So you understand, like, oh, okay.
Speaker 1:This person's doing five different jobs, and they're working two hundred hour weeks. Like, maybe we need to get them some extra support. But I agree with your your your general assessment. And it certainly would be a little bit stressful to get this email from Barry. But, you know, she says, please be blunt.
Speaker 1:Just break it down.
Speaker 2:Recommendation, don't use AI. Any Em dashes?
Speaker 1:There is an Em dash, but we know Barry uses Em dashes. She's been using them for decades. So there's no maybe not decades, but for, you know, her career. It is it is the the reason that it's in the model is because it's a popular writing tool. Anyway, Cloudflare did a new rebrand powering 20%
Speaker 2:of And I guess, Ty Yeah. Former member of the Party Round team
Speaker 1:Oh, really?
Speaker 2:I guess was behind this.
Speaker 1:Oh, no way.
Speaker 2:Why else he'd be sharing it. Wow. And he also was cofounders with Dylan on CTG which
Speaker 1:Oh, no way. That's
Speaker 2:very cool. Tyler.
Speaker 1:Little bit of lore.
Speaker 2:Ty is a legend, extremely talented designer. When he he was he had reached out to
Speaker 1:I like this
Speaker 2:us at party round.
Speaker 1:Yeah.
Speaker 2:And we didn't we I talked once with him. I remember correctly, we didn't immediately make an offer. We were just kinda like, yeah, let's keep talking. And then he built an entire game, like a simulation of a of a of a Game Boy game that you could play on your phone and he just sent it to me. He like built it.
Speaker 2:And this is like pre
Speaker 1:That's awesome.
Speaker 2:Pre vibe coding. He just built it and sent it to me.
Speaker 1:And it was it was web based basically?
Speaker 2:It was no. Was mobile. Okay. And I just immediately called them
Speaker 1:and I was like,
Speaker 2:okay, we're bringing on the team. This is amazing.
Speaker 1:Very cool. Very cool. I mean, it seems like good response. A thousand likes. No one's people are very opinionated about branding Yeah.
Speaker 1:Launches, you know, launch videos, all sorts of stuff.
Speaker 2:So Yeah. He it was likes. I found the original post. It was a Pokemon style game where you could build like a cap table, basically.
Speaker 1:Perfect.
Speaker 2:Collect investors
Speaker 1:Exactly what you want
Speaker 2:for sure. Great stuff. Great stuff. For sure.
Speaker 1:If you're just tuning in, Sam Altman will be joining in about ten minutes. He's on for half an hour, then we're talking to Elad Gil. Before we move on, let me tell you about Turbo Puffer. Search every byte, serverless vector and full text search built from first principles on object storage, fast, 10 x cheaper, and extremely scalable.
Speaker 2:You see this Reddit Yes. Post circulating that lists OpenAI's top 30 customers by token consumption and apparently Duolingo. The top second left is OpenRouter, but of
Speaker 1:course, they're Sort of platforms. Really count. Yeah.
Speaker 2:Routing routing Yep. Consumption. Surprising to see Indeed at the top of this list.
Speaker 1:Do you see number nine, baby?
Speaker 2:Number nine.
Speaker 1:Let's go. It's ramp.com.
Speaker 2:See warp dev on there, shop Shopify Sure. Also.
Speaker 1:What what so so I I when when this came out because of their I I I don't know if there was this table is like a leak or something, but at Dev Day, OpenAI put up a list of names of people that had been using over a trillion tokens. Right? And there people kind of reverse engineered that to understand what these what what the people who like, what companies they work for. Right? And I was trying to make a meme that I was sending you, and I it wasn't quite hitting, but it was like the the Atlas holding up the world meme.
Speaker 1:And it was like the entire global economy, But instead of, like, OpenAI, which is the current meme, it's like 30 companies in wildly different markets that are all using AI. And so that, like, the like, you would be more worried, I think, if this was more circular. And this is the Martin Scrawley take, which is that if it was if you looked at the the top 30 customers and it was all, like, AI, ChatGPT, rappers, or something, something very circular, you would be worried. But instead, it's companies like Indeed and Duolingo and Ramp and Shopify and all these companies that are touching very different pieces. These aren't competitors.
Speaker 1:Like, Duolingo is not a competitor to Shopify. And so it feels like an it feels like evidence that that this is, like, less circular. I don't know.
Speaker 2:Yeah. Yeah. I mean, the it is the the Grok, CEO of Grok, g r o q, recently said that 35 to 36 companies are currently responsible for 99% of token spending in AI right now. Even among those 35 companies, two are by far the most significant spenders, and their OpenAI is dropping. So it's crazy.
Speaker 2:The
Speaker 1:the that's generation. That that that's buying inference. I'm talking about companies that are buying from OpenAI and buying from Enthrom.
Speaker 2:That is that is So
Speaker 1:one more step.
Speaker 2:Point.
Speaker 1:One more step. Because it's like, if I'm buying with like, it's scary when you hear, like, OpenAI is buying 99 percent of of AI stuff. But then when you look under the hood and you see, like, Duolingo and Ramp and Shopify, it's like, okay. Well, that's actually, like, pretty diffuse in the economy.
Speaker 2:Yep. So, yeah, there's two significant spenders. But Yeah. In those spenders are thousands of other companies.
Speaker 1:Right? Yeah. And I wonder, just this idea of, like, there's a there is a trend. We're in a trend right now, the AI wave, and it's holding up the global economy. Like, has have other trends held up the global economy successfully?
Speaker 1:Like, if we go back to industrialization, was that was that holding up the global economy? Did it successfully hold up the global economy? Or, like, global trade, the containerization, That held up the global economy, and and, like, there were certainly, like, ups and downs, but, like, it kind of successfully held up the global economy.
Speaker 2:Yeah. And certainly, the I mean, going back to that clip from Ken Griffin earlier this week, he was basically saying that in in 1999 and February, it was incredibly obvious that the Internet would change everything.
Speaker 1:True.
Speaker 2:But that still took fifteen years. Yep. Right? Yep. So I think even I would say most of the bears, like true AI bears Yeah.
Speaker 2:Still believe in the potential of the technology. They just believe there's gonna be a some sort of winter.
Speaker 1:Like a hiccup. Yeah. Winter. Yeah. Hey.
Speaker 1:We haven't heard a lot of talk about AI winters. There's been many of those and we I had a hot take that 2023 was an AI winter, which is like, of course, like the most bullish insane time possible. But I but my my my riff on it was that, like, ChatGPT launched in '22. Waymo launched in '22. The and then '23 was more just, the adoption of ChatGPT.
Speaker 1:And at and I think at Dev Day, they they launched maybe GPTs and it wasn't like a wild use case. We didn't have reasoning models yet. And so it was like this magical technology that launched in '22 and in '23, everyone was kind of like processing it. But there wasn't like a massive jump in '23. I mean, I guess we did get GPT four.
Speaker 1:What do you think,
Speaker 2:LG, by the way, is quizzing you in the chat Oh, John. John Coogan, how many total tokens have been used on OpenAI year to date? Name every token.
Speaker 1:Name every token. Well, it's odd. It's 6,000,000,000 a minute. I think we did the math on this. It's it's in the trillions.
Speaker 2:It's a lot.
Speaker 3:So yeah. When I calculated it, I
Speaker 2:I had, like,
Speaker 3:around 1 quadrillion a month.
Speaker 1:1 quadrillion a month.
Speaker 3:That was also the number I think Demis, a couple of weeks ago, he said Yeah. Memorized doing that. One quadrillion. Wow. But yeah.
Speaker 3:I because OpenAI was, like, 6,000,000,000 per minute, but that's just on the API. So if API is, like, 25% of the company
Speaker 1:Exactly. Yeah. Yeah. Yeah. You have to do a lot of, like, dancing.
Speaker 3:But In 2023, I mean, g p t four, I think, is, I I don't think you should be following product releases. You should be following
Speaker 1:But GPT four was was trained in '22 and was released in Bang in '22. So it doesn't count. I'm kidding. Of course, 2023 was a phenomenal year for AI. Not not not a winter at all, but it's it's it is interesting to see, like like, where the growth spurts come, how much of it is just a smooth curve of adoption adoption and diffusion into the economy, what's the rate at which it's diffusing, where are companies and individuals actually getting value.
Speaker 1:Should we move over to the huge news in creatine?
Speaker 2:Yes.
Speaker 1:Dan McCormick says, work with your brother. Go into debt if you have to because Paki McCormick is giving a shout out to Dan, the founder of Create. He says, my brother Dan has been writing the weekly dose of optimism for three years. That's Packy's second newsletter aside from the one that he writes. Last week was his last.
Speaker 1:Dan McCormick is stepping down from writing the weekly dose of optimism because his company create
Speaker 2:He's absolutely ripping.
Speaker 1:Ripping $85,000,000 run rate
Speaker 2:I swear I swear gummy vitamins are just an infinite money glitch.
Speaker 1:There's a couple categories that are just doing so, so well. Stick packs and powdered supplements. I don't what's what's hard? Hard is hard is liquids. Right?
Speaker 1:Hard is
Speaker 2:Do not try to sell liquids on Internet.
Speaker 1:That's hard. But gummies must have a great,
Speaker 2:you know, an opportunity. I invested in create, I think, a six cap. I met Dan before the launch. He was raising it even less than that. I didn't I didn't see the vision right away.
Speaker 2:Yeah. And his execution in the first, like, five months was absolutely wild. And I capitulated and it's been a wild ride. The the Capitulation. Execution is is insane.
Speaker 1:Well, Dan, if you wanna keep a hold on that creatine monopoly, you gotta get you gotta get on ProFound and get create mentioned in chat GPT.
Speaker 2:That's right.
Speaker 1:Reach millions of consumers who are using AI to discover new products and brands.
Speaker 2:This post from Frog is a banger. Please make sure you are only drinking as much water as you really need. We need that for the data centers. If you're thirsty, Grok is thirsty too.
Speaker 1:Completely agree. I completely agree.
Speaker 2:Reply here, installing a low flow shower head out of concern for Grok.
Speaker 1:I love it. I saw someone else was trying to put the yes. This is it. Andy Massley, a couple slides later. He said, every day, I find a new way of trying to get across just how ridiculously fake the problem of AI water use is.
Speaker 1:We've talked to a number of Neo Cloud CEOs, data center builders on this show who have built data centers, and they've told us, yeah, we use we use a decent amount of water. But once we have the water, we actually have figured out how to just recycle it in in the in the system. And so we're we're not actually using that much water.
Speaker 2:Even the new iPhone has a single drop of water.
Speaker 1:And they sell a lot of iPhones. So, I mean, millions of drops of water. You got to answer something.
Speaker 2:But it but just proves the point that
Speaker 1:Oh, yeah. Yeah. You can recycle it for heat.
Speaker 2:Yes.
Speaker 1:Yes. Yeah. No. That's a great point. I hadn't even thought about that.
Speaker 2:It's not like you're you're, oh, I gotta go refill my
Speaker 1:my iPhone. Can you imagine how upset people would be? It feels like, yeah. I need to charge my iPhone. Oh, I forgot to refill it with water at the gas station.
Speaker 1:So he he he shares some data here. So this is a quote post from someone else. Yeah. But the form of AI that use the most water and electricity by far is chachapiti. You can start somewhere.
Speaker 1:The whole I can't do it because I got cut off is just an excuse I don't care for. And so here is some evidence, some new ways to think about the amount of water used by AI. Have you ever worried about how much water things you did online used before AI? Probably not because data centers barely use any water compared to most other things we do. Even manufacturing most regular objects requires lots of water.
Speaker 1:Here's a list of common objects you might own and how many chatbot prompts worth of water they used to make them. Leather shoes are 4,000,000 prompts worth of water. Smartphones are 6,400,000 prompts of water. Jeans, a single pair of jeans is over 5,000,000 prompts of water. This is such a silly metric, but I love these silly metrics.
Speaker 1:T shirt is a million prompts. A single piece of paper is 2,550 prompts. If you wanna send 2,500
Speaker 2:Imagine trying to give up all the things on these on this list because they use water.
Speaker 1:But you'd have Grok. You'd just be naked using Grok. But you'd have you'd have you need a smartphone and that's 6,000,000 prompts.
Speaker 2:Chad is going crazy right now. We're Yes. We're being told to not ask him anything about Trump or crypto. Okay. Money on it.
Speaker 2:It's because there's prediction
Speaker 1:Oh, no. That gets basically we we are not paying attention to the any markets. We will not be steering the conversation if you happen to have a bet one way or another. Well, I believe we have our guests in the restream waiting room. But before we bring them in, let me tell you about Julius.
Speaker 1:What analysis do you wanna run, chat with your data, get expert level insights in seconds? Julius is the AI data analyst that works for you, connect your data, ask questions
Speaker 2:Data superintelligence.
Speaker 1:It is. And we are joined by Sam Altman and Bill Peoples. Sam, Bill, how are you doing?
Speaker 2:What's going on? Hey, guys. Hey, guys.
Speaker 1:Welcome to the show. Congrats on all the progress. I've been enjoying Sora a ton. Personally, I've been enjoying making them. I had a ton of fun making, the collab post yesterday, and, I was wondering prompting your
Speaker 2:your cameo feature. John made it so that, he always appears as a bodybuilder if anybody is cameoing him. So you guys got got to experience
Speaker 1:to some some chaotic results. Do you have favorites or a post that you've been coming back to or that have, you know, stuck out to you as particularly, you know, creative uses?
Speaker 6:I I mean, definitely all of the ones of, like, me stealing GPUs or doing other crazy things to get GPUs have been funny. In in the last few days, the there at least in my feed, there have been these, like, very beautiful sort of fantastic scenes that are just not things that could have ever existed without something like Sora or wouldn't have been easy to make. And watching people build those and watching the sort of the trends flow through that has been pretty awesome.
Speaker 1:What about you, Bill? Any favorite uses of Sora so far?
Speaker 5:Oh, man. Mark Cuban came on the platform a few days ago and there have been some hilarious Shark Tank memes. Those are probably my favorite. Pitching Oh, so pitching some Sora features
Speaker 1:to Mark. Yeah.
Speaker 2:Also, leveraging the the prompting function to always include an ad for cost plus drugs, thought was especially hilarious considering he's been one of the most vocal opponents of of advertising in AI. He is leveraging the feature to the max. Yeah.
Speaker 6:I think they're gonna be all of these weird new dynamics that we see emerge that just weren't possible in previous kinds of video. This is like a fun period because it's all gonna be so different every few days. Man, I'm watching this Polymarket ticket go by ticker go by, and it's so tempting to, like, say things to.
Speaker 2:Yeah. Yeah. Yeah. To be clear, not we're no. Don't don't worry about the don't worry about the ticker.
Speaker 2:I don't think we're including, I don't I don't think any of those markets are being, being featured in the ticker. But Yes. Yeah. Again, this is the new world we're in.
Speaker 1:Yeah. You can move the market live on TBPN now. But today
Speaker 2:very odd. People, I'm sure, will be happy or disappointed we're here to talk about Sora,
Speaker 1:of course. Yes.
Speaker 2:So none of the other topics.
Speaker 1:But I I mean, I also wanna know about ads. Why no ads in Sora on day one? I feel like you've laid out a really great, you know, mental model for how you think about ads on Strathecari, on the Andreessen Horowitz podcast. I've I've I'm bought in. Is it a technical thing?
Speaker 1:Do you need scale? Do you need, to think about it more? Why no ads on day one?
Speaker 6:This is like a ten day old product. Right? Like, it's hard to get anything to work at all. And we we, like, we we don't we we don't assume success. We we gotta, like, go hard earned success, and then we can then we can think about monetization for it.
Speaker 6:But this is, like it's gone great so far. It's still very early, and there's still a lot of work to build, something that a lot of people are gonna love first.
Speaker 1:What about surprising capabilities of the model? You mentioned that you've seen some fantastical scenes. I'm interested to know about specific, like, specific breakthroughs that you've noticed that Sora two, the model, is particularly good at? I noticed one about reflections being great. Obviously, people love the cameos.
Speaker 1:But what what has surprised you in terms of just, like, technically, the model can do something now that it couldn't do before?
Speaker 5:This model is a huge leap forward in terms of Physics IQ. So pretty much all past video generation models really struggled with prompts that, you know, involve like backflips, gymnastics routines, etcetera. Yeah. That's right. And this is really the only model that exists today which can reliably handle these kinds of really complicated dynamics.
Speaker 5:One of the big features that people have really loved on the app so far is the steerability of the model. So, you know, if you give it, like, a really simple text prompt that's maybe even only a few words, this model is really good about kind of telling a coherent story with, like, a beginning, middle, and end and doing this, like, automatically in a way that doesn't require, like, a lot of direct steering from the user. If you wanna, like, go into, you know, a ton of detail about exactly how your prompt should be laid out and how the story should unfold, it supports that too. So it can kinda meet you wherever you're at in the creative process. But, really, this model is just, like, so hyper steerable, and it's, like, just vastly higher physics IQ just makes it able to do things that were, like, not possible a few months ago.
Speaker 1:Is that all within the model, or is there some sort of, like, reasoning step where you're, hydrating or unpacking my prompt and writing a bigger prompt or breaking down the problem in some way? Can you share anything about that?
Speaker 5:Yeah. It's a good question. So, you know, the intelligence for these text conditional video models kinda lies both in the the core model itself like Sora, and some amount of it also comes in through the text prompt. So, you know, where however the user decides to kick start a prompt, you can have, like, a language model under the hood, add some details in. But for example, you know, when it comes to things like, again, like, doing these backflips or any kind of physical interactions, how refraction is modeled, you know, when you're pouring water into a glass, all of these details have to be captured by the core video model itself.
Speaker 5:So that that's intelligence, which is really innate to Sora. And, certainly, you can supplement it with intelligence from a language model as well, but it's not necessarily a prerequisite to get kind of amazing results out of these things.
Speaker 1:Are there any areas on the physics where you think that, the model falls down and you wanna improve? I mean, we went through the era of, like, six fingers. It seems like Yeah. Reflections of water are solved, but someone was saying something about doors being hard or I I haven't noticed that one personally, but a lot of the stuff's great. But what what have you noticed is, like, the next version's gonna be even better at?
Speaker 6:This is still very early. Yeah. I think Bill said that I appreciated is this is this is the this is like the GPT 3.5 moment for video.
Speaker 1:I agree.
Speaker 6:And if you went back to use the actual GPT 3.5, you'd be like, okay. Signs of great promise can do the occasional impressive thing, but it was really not until GPT four where these text models started providing real value for people. And we know how to go make the g p t four equivalent of video models, and we will do that. And then a lot of these things that are currently annoying, like doors or, you know, once in a while, something goes through something else it's not supposed to. In the same way that the world, you know, loved to complain for a brief period of time about where 3.5 fell down and, oh, it's never gonna be useful.
Speaker 6:It's never gonna do this. It's never gonna do that. And then we were able to just keep making it better and better and better and better. The model Physics IQ is certainly the best I've ever seen, but it is nowhere near as good as it will be in the future versions. And I think I hope we'll see a similar thing to what happened with the GPT text models, which is people will always demand more and better, and they will always find new and better things to use it for, and the world will just make ever more amazing videos.
Speaker 2:And How quickly
Speaker 1:Oh, sorry.
Speaker 2:We're so on the test
Speaker 5:for for video here.
Speaker 1:Yeah.
Speaker 5:Like, GPT one really was sore one for this modality. And the progress we've made kinda in the last eighteen months into this 3.5 moment, right, it's really compressed compared to how long it took to go from GPT one to 3.5 in the language domain. So we're really expecting progress to continue to be meteoric here in the near future.
Speaker 2:How quickly do you expect the Cameo feature to be cloned? That feels like a It's
Speaker 7:a good
Speaker 2:point. Equally important part of the, you know, the the models made a leap, but the product is in the experience and the the the experience of creating these assets is wildly innovative. We saw stories get cloned. We saw saw, you know, algo video short form feeds get cloned. I I expect many other platforms to be looking at this functionality and realizing that this might be the future.
Speaker 2:You guys certainly believe that that it could be important. So how quickly do
Speaker 6:We're you actually totally okay with a world where we do the product innovation and everybody else copies, and I don't think it works for them as well as they think it does. Like, the the you know, a lot of people have tried copying ChatGPT, and you can go look at some of our competitors' apps, they even copy the mistakes. They even copy the design decisions we really wish we hadn't made. And maybe it's worked well for them. I guess I kinda hope it has, but it's been fine for us.
Speaker 6:Yeah. I I think, like, the the the the key to this is not any one innovation, but it's repeatedly putting them out again and again and being first to come up with them and put them into a cohesive offering. And, you know, that's what we wanna be good at. And if other people wanna clone the stuff that works, we also sometimes clone stuff that works. That's fine.
Speaker 6:But but mostly, we wanna be able to drive the innovation, and I think Bill and his team have done an incredible job of figuring out how people actually wanna use these video models, what the models need to do. Really, they've approached this as a full stack problem from how do you train the video model to how do you make this enjoyable for users. But cameos are one out of many ideas they have from here on the journey to, like, the product that we hope to eventually build. And so if people take some inspiration from us and copy us along the way, I'm sure they will. It's fine.
Speaker 1:How do you think about the, like, popular claim, that we want AI detection? I want AI content flagged. Is that a stated preference that's not a revealed preference? Because personally, I don't want bad AI content, but I don't want bad human made content either. I want great both, and I'm fine when someone comes up with something genius and they instantiate it with a video model.
Speaker 1:How do you think about it?
Speaker 6:I I think that is the real thing is you don't want slop. You want great content. Yep. Different people, one man's slop is another man's treasure for sure. Yes.
Speaker 6:But what you care about is, like, good, original, thoughtful, new, helpful, whatever content. And whether that is generated entirely by a human or entirely by AI or what I expect will mostly happen in the future, which is tool assisted human driven generation, I don't think you care that much if the content is great. There's a lot of, like, you know, stuff that is technically written or drawn or filmed by a human, but is completely derivative and much less original than what an AI has generated. And I think that will be what people really care about long term. You just want great content.
Speaker 6:I also do want some human connection with it. When I read a great book, first thing I wanna do is read about the author that wrote it and what life experience went into that. I don't think that'll go away. But if they're using an AI as a tool to help them make the writing better, sign me up. That sounds great.
Speaker 6:Similarly, I would rather watch a video about someone I know than some random AI generated character, which is part of why I think this was cool to offer. One design decision the team made that I thought was really great, and I I was actually pushing them in a different direction earlier on, and then I decided they were totally right, and I thanked them and dropped it, was the fact that the feed is AI only and not a mix of AI plus some uploaded videos, I I think, is a subtle but extremely important design decision in how people are relating to this.
Speaker 1:Yeah. It was a very weird experience for me. I was I was thinking about the collab post that I was making announcing this interview, and my initial thing was like, well, I'm gonna have to think of a script, or I'm gonna have to think of, you know, what I say, or I should record a piece of this, and then I'll use it. And it was like, no. I just took the prompt, and then I get the front facing video.
Speaker 1:It's remarkable.
Speaker 2:What are you what kind of indicators are are you guys looking at as Sora can transition from, what it was the second it launched, which was a creative tool, into something that's more of a consum like a consumption platform, traditional, you know, social media platform? Like, talk about kind of what you guys are pushing forward to because obviously, you're seeding seeding the the network with with the tool, but it's it's certainly much harder to turn it into something that people are spending hours a day in purely consuming content and not creating content.
Speaker 5:You know, we really wanted to design this from the ground up to be centered around creation. And a lot of the metrics that we've been focused on optimizing here are really aligned with making sure as many people as possible are actually, like, getting their hands on the SORT two model itself and, you know, able to create content with their friends and, like, for the rest of the world. One metric that we're really proud of with this launch so far is that 70% of our users are actually creating content even to this day, you know, a week and a half after launch. And that's, like, vastly higher than on any other social media platform. And I think it really speaks to just how fun creation can be with the right tool set.
Speaker 5:Right? If you look at any of these kind of legacy platforms, there's just, like, so much friction from, like, getting off the feed and, like, into some creative flow state. Right? You have to, like, put the phone down. You have to go get, like, a camcorder, start recording yourself, find your friends, like do a dance, etcetera.
Speaker 5:It's just like a lot of work. Right? On Sora, like you can just pick up your phone, find a like any video you like in the feed, remix it, you know, Cameo any of your friends. And I think one insight that was not obvious to us at first, but we kind of clearly seen as an emergent behavior of this product is just like there's there's all these people out there who would not necessarily want to be like, you know, influencers or something or have like a big social media presence. But the fact that, like, all of their friends can just access their Cameo, right, put them in all of these crazy situations actually, like, kinda gets them into the playing field in a way that felt really high friction before.
Speaker 5:And so, you know, we're closing in on close to, like, 2,000,000 weekly active users now. We're really excited that such a huge percentage of that user base to this day is, like, still creating with Sora, and we're gonna continue pushing on that direction and making sure people have even more powerful tools in the future.
Speaker 1:Yeah. So 70% of Sora users are creating content. The typical benchmark that people kind of quote randomly is like 1% creation, 99% consumption, something like that. And that certainly feels like my experience on Instagram. I post a photo every once in a while, but most of the time, I'm just kind of scrolling.
Speaker 1:And I'm wondering if you think that that one percent will be much higher on sort in terms of actual time in the app, time prompting versus time scrolling. If you have any data, that'd be super interesting. But then also, does that make it more of like a competitor to video games than traditional social media because it's such a lean forward experience versus just lay back? What do you think?
Speaker 5:Yeah. It's a great question. We still need to study this more exactly how creation versus consumption habits kind of change over time for folks on the platform. It's still pretty early days. I I do agree with your point, though, that I think over time, this is going to feel much more immersive, in a way that, like, video games kind of do.
Speaker 5:Like, you have more agency when you're actually using the platform, you know, not just kinda, like, mindlessly scrolling a feed, like, hours a day. And, like, one interpretation of this product, which I think is kind of interesting, especially from the research perspective, right, is Cameo's in some way is, like, the simplest way where you can kind of, like, inject yourself into the model. Right? So it it's a very low bandwidth communication channel right now. You know?
Speaker 5:You're only giving, like, a few seconds of video footage of, like, any given individual, like, into the app. But, like, over time, right, you can imagine, like, these models know more and more about your life. They really, like, deeply understand your friends, how you wanna, like, show up in the world. And, like, over time, this can almost become, like, a little mini, like, alternate reality. Right?
Speaker 5:So, like, you're not just generating, like, videos of yourself with your friends. Like, you actually just have, like, digital copies of yourself running in the model on the Sora platform interacting with other people with agency. And so I think over time, we're really gonna see this platform evolve into, you know, something that feels kind of familiar today and just something that really leans into, like, the full intelligence of Sora two in the future and, like, really leverages all of the world simulation capabilities that we're working on internally.
Speaker 6:Yeah. I I would add to that that if if you think of this, like, spectrum of the kind of entertainment you can have in front of a computer, At one end, you have, like, watch a two and a half hour movie and you hit play, and then you lean back and you don't do anything at all. And then at the other end, you have, like, a very intense video game and you're, like, you know, sweating and your heart's racing and it's, like, super, super active. AI is gonna push things to be more in between there. So you'll have maybe you're still watching that movie, but now you can, like, say something a few times throughout the course of it, and it changes what happens as the movie plays out.
Speaker 6:Or with Sora, you're seeing this amazing new phenomenon where most users are creating in a in a world where traditionally only 1% of them did. And so you're yes. You're, like, watching a video feed, but you're you're doing a little bit more. And it, at least for me, really changes how fun the whole thing is and how I feel about it, then maybe you'll do what Bill said and you'll have like you'll be way more actively participating in the Sora feed. I I think you're just gonna see that continuum blur a lot more.
Speaker 1:Did you see Bandersnatch by any chance, Sam? Have you seen this Netflix? It's like a Netflix choose your own adventure. And it was a really cool idea, but ultimately, people it never really took off and became like something they do again and again and again. And I'm wondering if it was because it was like not customizable enough or people just want to just sit back and see a director's vision.
Speaker 1:I don't know. Anyway I never heard of
Speaker 6:that, but it sounds cool.
Speaker 2:Yeah. How do you think question for Sam. How do you think about allocate allocating compute to Sora versus the rest of the business? I imagine Bill is constantly in your ear Always. Every every other hour.
Speaker 2:But how are you thinking about it?
Speaker 6:You know, my real answer is I've entirely changed my focus of how I spend my days to just go get more compute rather than have to make the compute allocation decisions. Yeah. I still do have to make some short term compute allocation decisions, but I hope we are heading to a world where I am instead telling people you gotta find a way to use more compute, and we're gonna be we're gonna be very aggressive here.
Speaker 1:It feels like you're doing a great job of, like, bringing things within your control within the supply chain. What is outside of your control at this point?
Speaker 6:I mean, most of it. But
Speaker 1:I feel like you have great you have great partners all up and down the stack, multiple partners in different parts of the chain. Like, when I think about scaling up Sora, I I I I feel like it's crazy to bet against you. Like, you're gonna you're gonna get them chips. You're you're not gonna be GPU whole.
Speaker 6:Try to buy, like, 10 gigawatts of power for delivery next year. It's not so easy.
Speaker 1:It's funny.
Speaker 2:How are the conversations going with, with Hollywood?
Speaker 1:Oh, yeah.
Speaker 5:Oh. Actually
Speaker 6:Yeah. You take it.
Speaker 5:Yeah. I I was gonna say we've been chatting actually with a few, you know, very notable folks in in Hollywood over the the last week. You know, I think people's first reaction to this is, like, very understandably going to involve a lot of trepidation and, like, anxiety. When we've gotten to just sit in a room with these folks though, you know, and really explain what we're building, I've actually been pretty struck by, like, how excited folks in Hollywood are about this. You know, we were chatting with with one actor recently who mentioned that, you know, on Twitter, like, a year ago, saw, like, a deep fake of her generated with one of these, like, open source models, which really have, like, a lot of nasty content
Speaker 1:Oh, yeah.
Speaker 5:Created. And when we really, like we walked her through kind of all of our safety mitigations, right, how we're making sure that we have this, like, very well defined model spec, which dictates the behavior that that we allow on this platform, and how we are really leaning into, like, full control of likeness, right, more so than any other platform. Like, you have to come in through the Cameo process. You can't just, like, upload an image of yourself and just, like, generate a video of it of, like, any person. You have to come in through Cameo.
Speaker 5:I think it became clear here that, you know, we're really setting the right standard here in terms of making sure people are in full control of their likeness in Hollywood. I think that's where, like, a lot of this anxiety comes from. Right? It's this feeling that, you know, some random person can just kind of take videos or images of you and do whatever they want with them and create all of this, like like like, terrible content that's, like, outside of your purview. But we've really been, like, designing Sora from the ground up to put users in full control of their likeness end to end.
Speaker 5:From the moment you sign into the app to, you know, needing Cameo permissions to, like, access any of your friends' generations. So, you know, I think we need to engage more with Hollywood, and we're gonna continue to do that. But once we really explain the story of Sora, you know, they're very receptive to it. Do you
Speaker 4:think there's a world folks
Speaker 6:like to that. I I, like, you know, I the team asked me before launch if they could put my Cameo in there, open access, and I, course, thought about it for a second and said, absolutely yes. I had all these Hollywood celebrities then messaging me on the first day being like, you're absolutely crazy. This is insane. This is, like, the dumbest thing I've ever said.
Speaker 6:And then by about the third day, they were like, that was really smart.
Speaker 2:You got,
Speaker 6:like, a lot of, you know, free publicity. Maybe we need to be doing that. And I think you're now seeing actual celebrities say, okay. I'm gonna do this, and I expect a lot more of them will. Similar thing on other kinds of characters in IP.
Speaker 6:I can totally imagine a world where our problem in a year or six months or maybe even less is not that people don't want their cameos or their characters appearing, but they think we are not fairly having their characters or cameo appearing often enough.
Speaker 1:Yeah.
Speaker 6:This may turn
Speaker 8:out to be
Speaker 6:a really big thing for fan connection. Now, it may be that kind of the previous generation of celebrities don't wanna do this and the influencer celebrities all do. Don't know how that's gonna go, but but I bet this will be like a pretty deep kind of new connection.
Speaker 1:Yeah. It seems like it's been good for DiCaprio in the memes. Like, he's not directly monetizing those when you show the champagne meme or him pointing at the TV, but, like, you know, it builds his aura in some way.
Speaker 2:A friend of ours posted something yesterday. This this is Jeremy Gaffani. He said, the reason we're so upset about slop is because it's obvious we're all going to be going to love consuming it in two to three years. It's not gonna be slop for long. Do you agree, Sam?
Speaker 6:I mean, some of it will be slopped to some people, and some of it won't. I I remember, like, there was a real reaction like this in the early GPT days where people were like, I can't believe anyone reads this. It's, like, total crap. It's full of hallucinations. You know?
Speaker 6:It's, like, it's not useful to anyone. And then it became more useful to some people, but they said, I can't believe anybody, like, ever thinks this thing writes a beautiful sentence. That's insane. And then with GPT five, you have authors saying, like, wow. This is a useful tool.
Speaker 6:It sometimes, like, writes a beautiful sentence.
Speaker 1:Yeah.
Speaker 6:And I kinda think it'll follow a similar trajectory.
Speaker 1:What do you think about the fact that people feel, at least I don't know if they actually can, but it feels like you can still clock GPT five writing, you know, it's not this, it's that, the em dash. Like, will will we still see these artifacts in three years in Sora five that people are like, oh, if you know, you know, you can tell, but most people can't.
Speaker 2:Yeah. It's like what's the em dash of of A video. Video because I don't think it's like six finger.
Speaker 1:No. No. Definitely not. That's the typo, which doesn't happen anymore.
Speaker 5:Yeah. I think right now the em dash is like this, like, wired speech pattern in Sora where it likes to say a lot of words very quickly. You know, these these generations definitely have, like, a style to them. Mhmm. I think analogously to GPT, we really wanna give users a lot of control over exactly how their videos show up, right, on the platform.
Speaker 5:Like, if you really want kind of like a very soothing experience, right, not a lot of shot changes going on, we wanna give users the ability to generate that. We're gonna continue to give more optionality to people. So, you know, there'll be some default kind of behaviors and quirks of of SourObs for sure, but we definitely want all power users to be able to be in full control.
Speaker 1:Random question. Where did the name Sora come from?
Speaker 5:Yeah. This is a fun one. So the original Sora came out in February 2024, the OG blog post.
Speaker 1:Yeah.
Speaker 5:We did not have a name for it. I think, like, up to two days before we, like, revealed the model to the world. We just could not agree on the team what it should be.
Speaker 1:Did you at least have a code word or something? Like, how
Speaker 5:did just called it, like, video gen.
Speaker 1:Okay.
Speaker 5:And so at some ungodly hour, I like just started pumping a bunch of crazy ideas into chat GPT. And then like we basically ran out of like
Speaker 1:English words.
Speaker 5:Then we switched like Japanese words. Wow. And then Sora came out. I like, wow, that sounds really nice. It means sky, you know, moving for, like, imagination, like, all the the possibilities of creation.
Speaker 5:And so then we just, like, last minute ship Sora. So Yeah. Yeah. It's kind of a mad dash.
Speaker 1:Okay. Speaking of Japanese stuff, Sam, you said you were looking for a Acura NSX a while back. It's kind of this throwback car, very it's not a Waymo. What do you think the piece of content or format will be that remains loved in an age where everyone's taking the Waymo of video, the Sora video generation? What do think is like Well, first of
Speaker 6:all, I got that NSX, and it lived up to all of the childhood hype. I mean, just incredible. It's amazing. That car is so fantastic.
Speaker 8:That's great.
Speaker 6:And I I don't know. I kind of think there's gonna be a lot of stuff like that
Speaker 2:for
Speaker 6:people that, generated or not, where you still you want the real thing, you want the thing that you have the kind of childhood connection to. You know, someone like a kid today is not gonna want the NSX, but whatever the a cool car like that is, they will want. And at some point, like, the fact that they can have, like, a crazy VR experience, they'll still want the real thing and the connection to it and everything they have. So I I think there will be a huge amount of that. In fact, I think the future looks like much more of that kind of stuff, not much less.
Speaker 2:How quickly do you wanna create an economy on Sora? It feels like there would be a a number of ways that you could create incentives for creators to create things for IP holders, for individuals to just be passively monetizing their likeness. Bill,
Speaker 6:what do you think for timing on that?
Speaker 5:I mean, this is, like, a top priority for the team. You know? There's clearly such an incredible value proposition for celebrities, for rights holders across the board here. We think Cameo is, like, a great entry point for this. Right?
Speaker 5:You can imagine right now, we have Cameos for people. Maybe you have cameos for, like, you know, your character or, like, your brand or something. And so we're actively working on the team right now coming up with, like, the right monetization model here to get this rolled out. But it's really important to us, right, that our creators on the platform are rewarded and that there are clear, you know, financial incentives for, like, the incredible work that they're already doing. Yeah.
Speaker 5:So this is, like, top of mind for us, and we'll have updates here over the coming weeks. This is, like, something we're actively working on.
Speaker 6:I I I will I I think it's super important and awesome. I I will say I I would like to know how many hours of sleep Bill has averaged for the last few weeks, but I bet it's not enough. So we got a lot of stuff. The team's got a lot of stuff they have to do in a short period of time, and it's gonna take a little while.
Speaker 1:K. Let me put one more thing on your plate, Sam. I mean, earlier, like, years ago, you built Looped, location based product. Have you thought about how AI and location based content fits together? Like, on most of these social apps, you can tag a location.
Speaker 1:It wouldn't even make sense in the current SOAR app, but what does the AI maps product look like?
Speaker 6:I haven't thought about AI and location that much, but I've thought about, like, how AI can really change the social experience for people. Mhmm. We don't have, like, a for sure answer yet, but we have, like, a lot of interesting threads to pull on. And I have thought back to, like, my days running that startup there more. My instinct is it is possible to make a very interesting new kind of social experience, connecting you to people, helping you find people that is intermediated by AI in an interesting way.
Speaker 6:But, you know, we have a lot of exploration to do there.
Speaker 1:What advice are you giving to startup founders these days? I remember in the GPT three point five, GPT four days, it was like, don't build a company that assumes model stagnation. How do you think about in the age of sore
Speaker 2:That's been really great advice.
Speaker 1:It really has. It planned out it played played out exactly like that. There's a bunch of great companies that aren't built that way, and they've done great. But if you if you were just, oh, I have a special prompt that tunes up GPT four, yeah, bad times. But how are you thinking about it now in the context of video and Sora specifically?
Speaker 1:You obviously do have an API. You have Dev Day. There's people that will build on top of this. Is it a different shape of the problem?
Speaker 6:Totally. The the reaction to the API has been nuts positive. Like, I I at least the fastest ramping revenue I've ever seen for one of our new models in the API. I mean, maybe there was something faster than I'm not remembering, but Congratulations. The demand there has been just incredible, and people are doing awesome stuff with it.
Speaker 6:Bill and I have not had a chance for a one on one since launch because it's been so crazy. We're doing one later we're doing one later today. But one of things I was gonna suggest to him was that we given how much excitement there is to build on this stuff, that we do something we don't usually do and put out our intended road map of the things we're gonna prioritize. Because I can imagine really cool new startups that simply were not possible, that will be possible at each of these new things we'll ship.
Speaker 2:So I I I had a question when you guys released the Sora two via API, which was that if Sora has the potential to be a Instagram or or YouTube scale business, why release part of your edge for the entire world that they can integrate into other creative tools and then use the model to generate content that doesn't have a watermark, that's not in your feed, that you're not able to get that feedback loop on that you guys do with the Soar app.
Speaker 6:For ChatGPT, we also put out a great model in the API. Yeah. And people can theoretically compete with us on ChatGPT and some try to, but, like, we are willing we're never gonna build every cool use of the technology, and we want the world to get all that stuff. We're delighted to also get paid on people using our API, but, like, we just want AI to flourish out in the world. We're not gonna build every great use of what you can do with video models either.
Speaker 6:We'll build one, and I think it's pretty awesome. But people have a lot of other ideas of of business and products to go build, and we'd like to enable those.
Speaker 1:Okay. Last question. Back to cars. What's wrong with the Porsche nine eleven?
Speaker 2:Yeah. You said earlier the timeline was in turmoil. You said if you were worth, somebody said
Speaker 1:If you were $5,000,000 worth
Speaker 2:by 09/11, you said no. You agreed with PG. What what did you mean by that?
Speaker 6:I mean, it was maybe it was like a tasteless joke. It was kind of like late at night. Was, you know, whatever. But I have an unfortunate proclivity for expensive cars.
Speaker 1:Yes.
Speaker 6:And and the response was like, would you ever spend 250 k on a car? And I took that literally.
Speaker 2:Hit the size gong for taking it literally. No no time for 250 k cars. Not this week. But probably that
Speaker 6:was not my best tweet.
Speaker 1:You know? Yeah. No. And I I I We enjoyed it. Enjoy it now.
Speaker 2:We all enjoyed it.
Speaker 1:I enjoy it now. I have the context. Congratulations on all the progress to both of you. Thank you so much for taking the time
Speaker 2:to stop by the show. Really appreciate the update.
Speaker 1:And very excited to see where this goes. Thank you
Speaker 2:so much.
Speaker 9:Thank you.
Speaker 1:Talk to you soon. Bye.
Speaker 2:I I don't think anyone read it. One.
Speaker 1:No one got it that way. That's amazing. Wow.
Speaker 2:250 k? How about 200 Anyway,
Speaker 1:we have our next guest joining in just a few minutes. In the meantime, let me tell you about Linear. Linear is a purpose built tool for built planning and building products. Meet the system for modern software development, streamline issues, projects, and product road maps. We have a lot Gil.
Speaker 2:OpenAI builds on Linear.
Speaker 1:Yes. Oh, yeah. That's right. They're a customer. Well, we have a lot Gil coming into the TBP And Ultradome from the Restream Waiting Room.
Speaker 1:Let's bring him in now. Thank you so much for joining us a lot. Are doing?
Speaker 4:Finally. Thanks for having me. Good to see y'all.
Speaker 2:We have wanted to do this interview since probably the very first week that we can guess. Took us a while, but you have your own show.
Speaker 1:Yes.
Speaker 2:But
Speaker 1:But thank you so much for taking the time. What what what this week has stuck out to you? I'd love to just get a a state of the union on how you're thinking about the market broadly, and then we can zoom in on on individual start ups and trends and subcategories that you've been focused on. But have you had a reaction to this, like, bubble talk that's going on? Have you been thinking about this?
Speaker 1:What what's been how have you been processing the information? How do you even research whether or not when something is going viral like that?
Speaker 4:Yeah. I mean, I've been looking at this stuff for a while, because if you look at the nineties as a sort of precedent or antecedent, the the nineties Internet bubble.
Speaker 1:Yeah.
Speaker 4:I think there was something like 450 companies that went public in nineteen ninety nineteen ninety nine. There's another 450 that went public in the first couple months of February. And so about 2,000 companies went public. Yeah. And then you ask how many of those are still alive?
Speaker 4:Like, how many survived? And there's probably a dozen, two dozen that that are still up and running. There's probably two or three of those that are really important to Amazon as an example, etcetera. And then one thousand nine hundred and eighty out of 2,000 probably died. Right?
Speaker 4:Went to zero.
Speaker 2:And they were being priced on eyeballs. Yeah. They're being priced on eyeballs, not not not even account creation.
Speaker 1:It was it was such a different time. Like, IPO ing was like doing your series b. I remember there was a guy, Bill Gross, out of Idea Lab in Pasadena, my hometown. And I believe he took a 100 companies public. And he ran an incubator.
Speaker 1:It was like the Y Combinator of the day. One company, I believe, was AdWords that went to Google and became the backbone there. And he had a bunch of great outcomes, but it was like a bit of a machine. If the IPO is no longer the metric that you we should be watching, is it Mhmm. Is it these revenue ramps?
Speaker 1:Is it churn? Like, how can we dig into understanding, like, where true value, durable value moats are accruing versus froth. We we often call it, like, the barnacle economy. Like, if you're if you're, you know, a toilet cleaning startup, but but you have Anthropic as a customer and they 10 x their office footprint, you 10 x revenue, that's not exactly the type of business we wanna see long term.
Speaker 4:Yeah. I think durability is a great question, and it's a really hard one for this era. For two reasons. One is things are changing so rapidly from a model and underlying capability perspective that if you look at every prior technology wave, you look at, for example, Microsoft OS. Right?
Speaker 4:They forward integrated into the Office Suite off of using Windows OS, or Google forward integrated into vertical searches. So they killed a bunch of companies or really hurt a bunch of companies that are providing those services. So we should see the same thing with the foundation model companies. Right? It's most likely that they're gonna forward integrate.
Speaker 4:They're already doing it in code. Maybe they end up doing it in customer support and sales or all the big categories. There'll probably be some effort at some point. Now they may or may not succeed with that, which is a different thing. Yep.
Speaker 4:But there's durability in the face of competition from the big folks. There's durability in terms of, like, will people keep using your product or we get subsumed by startup? And then there's just things that are just running up that clearly are never gonna really work. And the real question is, you know, how do you identify each one of those classes of companies, and how do you think about them as either a founder or an investor?
Speaker 1:Right now, we've been we've been noticing there's sort of, like, three types of three buckets of companies that are trying to, like, you know, craft an AI narrative around whatever market they're in. If we're talking vertical markets, smaller markets, not the foundation model layer. You have the legacy Fortune 500 company, you know, career CEO in the seat who's maybe paying a consulting firm for some AI transformation plan, and, maybe the stock's not doing so Then you have the startups that are you know, we we we go to YC Demo Day. We talked to five companies that are building the same space, and it's their complete greenfield project. Amazing place to be.
Speaker 1:Must be super fun to just have be puppeteering 25 Cloud Code instances and Codex agents to build your thing. But then we talked to a lot of founders that have they started their company five years ago, ten years ago. They have a serious business, but they're still in founder mode. And we always find it a little bit hard to bet against those guys who are, like, coming back in reenergized. They have the balance sheet.
Speaker 1:They have the customers, and they can kind of take a second crack at it. Do you like, what nuance would you add to that framework? Do you think it's on a per industry basis? Is it all about the founder? How do you think about that?
Speaker 4:Yeah. I think there's basically three viewpoints on that. I think there's a very small number of singular founders who just make amazing things happen, and that's Elon Musk. Right? Like, who else would go to space and build cars and do all these things?
Speaker 4:Honestly, I think Arvind and Perplexity is one of those where in anybody else's hands, I think Perplexity would be a dramatically smaller business. Sure. And I think most other companies in his hands would do better. He's very good. Right?
Speaker 4:But that's very rare. So I kinda put, you know, amazing founder aside because even great founders out there in a terrible market tend to get crushed. And so I think there's a second piece of it, which is there are a bunch of these AI markets that have recently really crystallized where you know, I used to say a year and a half or two years ago that the more I learn about AI, the less I know. And it was the only market that I ever felt that way because, you know, you learn new stuff and you know more. Right?
Speaker 4:You do better. You can predict stuff. And I think that changed over the last six to nine months where suddenly, at least for certain areas, it's really clear who the finalists are. We may not know the winners, but we know who the the final contenders are. We know that for the foundation model market.
Speaker 4:We know it's Anthropic, OpenAI, Google, perhaps XAI, Meta, a few others, Mistral, whatever. But, you know, it's a small list. Yeah. We know for coding, it's Cognition, Cursor, and then the foundation model companies and then Microsoft. And you can go through sort of vertical by vertical.
Speaker 4:There's a bunch of verticals now we know. A bridge for health care and maybe Komir. You know, there's there's a handful for each thing. But then there's a bunch of markets where it's clear the market's gonna be important, and there's tons of players, but we don't know who the winners are. That's financial tooling.
Speaker 4:Maybe that's sales enablement. Maybe that's accounting. You know, you can come up with a list.
Speaker 2:Legal legal feels like legal feels like it's already solidified except a handful of these more vertical specific, you know Mhmm. Specifically, we we we were joking. There there's people doing injury, you know, personal injury law agents, you know, ambulance chaser agents. But it feels like the categories are solidifying. I guess Mhmm.
Speaker 2:The question I have is you've backed win winners and basically all these categories. Where do you from an investment standpoint? What do you think you didn't quite anticipate? Is it is it like energy possibly? I'm sure you have bets there, but where do you feel underexposed?
Speaker 4:That's a really good question. I feel like the two big trends of this era so far have basic and by era, I mean, like, two years, you know, some Yeah. Two years. Era. You know, of recent last two weeks, you
Speaker 1:know, the last two Yeah. Exactly.
Speaker 5:The last
Speaker 10:two weeks New past.
Speaker 4:Exactly. I think that there's the two big things are basically defense. And, you know, I was very early involved with Anderol and Leatherd and have participated basically in every round of that company. And then I'm an investor in Saranac and Helsink and then Kayla in Israel. But very very little defense actually over, like, a ten year span of investing.
Speaker 4:Right? I did Anderol only for, like, seven years because it was, like, the only company that I thought was just gonna keep going forever, and I think it's the the, you know, a generational winner there. But, and then there's AI. Mhmm. And AI means everything now.
Speaker 4:It means consumer. It means roll ups. Means Electricity. It means yeah.
Speaker 1:Natural gas turbines are AI indexed.
Speaker 4:Right? Yeah. Exactly. Yeah. Trains have to move GPUs across the country.
Speaker 1:Yep. Yep. Yeah. FedEx. Maybe Throw that in there.
Speaker 4:Yeah. I love it. Yeah. FedEx is my favorite AI company. Yeah.
Speaker 4:So I think, you know, the those are the the sort of two obvious trends now. Six or seven or eight years ago, they weren't obvious. Now they are. And, you know, honestly, obvious trends often go longer than you think. I remember with the social networks, there was a bunch that didn't work out in the MySpace and Friendster, and eventually, I had Facebook and LinkedIn and Twitter.
Speaker 4:And then at that point, everybody said it's over. Yeah. Everything in social saturated, but then we had WhatsApp, and we had Instagram, and we had TikTok, and, you know, it just it just kept going. AI is in a much earlier version of that right now where I think we're at the very, very early days of this massive wave. And so to some extent, I'm underexposed to AI in general because I think it's the biggest thing that's happened in, you know, twenty years or longer.
Speaker 4:Did.
Speaker 2:Says he's underexposed to AI.
Speaker 1:You're very, very humble. The chat says everything important, a lot is in. Yeah.
Speaker 2:What is what is, what's not AI? When do you get a pitch where they use a lot the word, the letters AI on their website a lot, but you're just like, hey, guys. This is this is just this is just regular app like that. Yeah.
Speaker 4:Well, I actually bring this back to, like, what's durable in the face of AI. Yeah. And a good example of that is Rippling. Right? Rippling is a amazing company.
Speaker 4:They cross sell a dozen different HR products. Mhmm. And AI can make some stuff better, but nobody's gonna do, like, the AI first Rippling.
Speaker 1:Yep.
Speaker 4:And suddenly win. Right? Now the the main threat maybe to a rippling or deal or sort of related companies is if company headcount actually goes down because of AI, then they have fewer seats they sell. Right? And so that's maybe how there could be a headwind from AI for these companies.
Speaker 4:But
Speaker 2:maybe that means more companies AI. Maybe that means we just get a lot more companies, smaller teams. Right?
Speaker 1:Yeah. It's quite possible. Yes.
Speaker 4:So I I just think, like, that's the when you see that, you're like, okay. This is very durable in the face of AI, and that's great. Right? And so a lack of AI means AI can't displace it. And so as long as it's working, it's actually more interesting in some ways.
Speaker 2:Yeah. The question I sort of ask myself is, you know, using a company like Rippling, for for example, even if companies start needing less people, there's still they can they I could see them transitioning to kind of value based pricing around what is it what's the value of, like, running your HR department. Right? Is it Mhmm. 3% of revenue?
Speaker 2:Is it 5% of revenue? Is it 1% of revenue? Like, either way, they're going to make money if they're providing, like, infrastructure for that function.
Speaker 4:Yeah. It's a great insight because I think one there there's two or three things that are underappreciated about this AI wave. I think that the first thing is that the the capability set has shifted dramatically, not just in terms of what these models can do, but the fact that you can just ping them with an API and something that's accessible to everybody. And I think that's actually very under discussed, right, relative to the the prior world. I think a second thing is that the markets are oddly open.
Speaker 4:Like, legal never bought any software. It's really hard to sell into legal. But because of AI, suddenly Harvey can exist. Right? And then the third thing is that a lot of this is about what you're saying, which is the TAMs of markets are shifting from seat based pricing or seat based value to labor.
Speaker 4:You're replacing human labor. And so you're looking at, for example, customer support. It's not Zendesk. How many seats can you sell to customer support reps? It's how much can you augment and do work for customer support reps.
Speaker 4:It's the labor market versus the software market. And I think that's very underappreciated when you think about market size for some of these things. You're really gonna miss the size of these markets and how big they are. You know, the services economy that we looked at on on my team in terms of, like, where AI could intervene is about $5,000,000,000,000. Right?
Speaker 4:So it's a lot of GDP is accessible to this. And so then you ask, okay. Is it is it a workflow that's specialized to customer support, legal, whatever? Is it a roll up where you're buying assets and changing them? Is it a different approach?
Speaker 4:Like, how do you sort of span all the change that's coming because of this?
Speaker 2:Ken Griffin gave a talk earlier this week and he was saying that in 1999 and February, it was very obvious that the Internet was gonna change the world, change the way that our economy is run, yet it still took fifteen years for it to actually have an impact. He was comparing that to today. Difference of today is that we have the internet so we can deliver these products instantaneously to the entire world. Do you think that do you think that this time can be different and we can, as an industry, unlock Mhmm. The value of this technology on a shorter timeline than than the Internet took because we just didn't have you know, the Internet is the greatest distribution engine in history.
Speaker 2:Mhmm.
Speaker 4:Yeah. That's an excellent question. And I think both things can be true simultaneously, which is we're seeing real revenue for these companies. Right? Cursor is rumored to be in the high hundreds of millions of revenue.
Speaker 4:You you know, Azure added something like 2 or 3,000,000,000 of AI revenue per quarter from sort of a cold start two or three years ago. Right? That's amazing. That's like $10,000,000,000 run rate plus just off of AI revenue. Right?
Speaker 4:So it is working. It is being adopted. But the flip side of it is it'll probably take a decade. Right? And so I think both of those things are true.
Speaker 4:And I think the biggest impediment to adoption isn't the technology. We could do so much stuff with the technology right now. It's organizational process. It's workflow management. It's all the stuff that happens when a big enterprise uses anything.
Speaker 4:They're like, you want me to change my tooling? You want me to change my people? You want me to you know, my processes? And that's what's gonna slow it down. And that slowed down every technology wave.
Speaker 4:But to your point, we have massive distribution. It's already everywhere in some sense. Right? I don't know that you guys probably know the number. You just talked to Sam Allman.
Speaker 4:Right? What's the number of people using ChatTPT per month? But that's a huge impact already.
Speaker 2:Yeah. It must be It haven't built it yet. It it has to be north of a billion because they're already they're reporting 800 weekly active.
Speaker 1:If you have 800 weekly, you have to have over a billion. And that feels like such a But new maybe just keep it in the hill's back pocket for when it needs a good news cycle.
Speaker 2:Bit of a wild card question. And I didn't plan this, so I didn't mention it beforehand. But no, it's not it's not bad, but I just think it's interesting. If you couldn't be an entrepreneur and you couldn't be an investor, what hyperscaler would you want to work at where where, you know, be an executive at?
Speaker 1:That's interesting.
Speaker 4:Oh, that's so interesting. I don't know. I could make arguments for two or three of them because I think there's such different problems to be had and different assets or you know, Google, for example, just has such amazing assets relative to this era. Right? They have the most data.
Speaker 4:They have the most compute. They they have amazing cash flow. I mean, they're just like in
Speaker 1:TPU. A great spot. DeepMind. It's a it's a really crazy
Speaker 4:stack over there. Yeah. Yeah. Amazing stack. So there's amazing things they could do.
Speaker 4:Obviously, there's crazy stuff Microsoft can do on the business side, plus with GitHub and Copilot and everything. You know? So they should really be driving a lot of the coding future, in my opinion, if if they make the right moves over time. You know? And so you can kinda go through one by one and say there's really interesting things
Speaker 2:Opportunities in
Speaker 4:in terms of social. I think there's opportunities everywhere. Yeah.
Speaker 2:What give us a give us an update on AI roll ups. You have some investments here from my understanding, but how how do you see the category evolving? We see new com you know, new teams coming together to attack various, various markets with this strategy almost daily now. But what's your Yeah.
Speaker 4:I think, so it's back to if you look at services in The US, it's 3 and a half to 5,000,000,000,000 a bit, is sort of labor that, to some extent, could be augmented or displaced by AI. And so the idea is, you there's certain types of companies that are gonna be very slowly adopt software or AI. And so there's two things you can do with that. You can wait and build a software company that will take a really long time. You can actually buy companies, implement the AI changes, and dramatically change their margin structure.
Speaker 4:And that doesn't mean letting people go. It could just mean you make people five times more productive Mhmm. For certain types of roles.
Speaker 10:So you can
Speaker 4:look at different businesses where, you know, 80% of the cost of that business is repetitive white collar labor. And so you can help augment or automate stuff for people. And so I looked at a few dozen of teams or companies doing this. I ended up backing two of them. And really, you need three things to make this sort of strategy work, which is truly transforming a business with AI and then scaling it up.
Speaker 4:The first is you need a great, AI person, obviously. Right? You need to be able to learn the technology. Second, you need a great PE person. You need to buy assets properly, understand your envelope.
Speaker 4:Just like a SaaS company has its ICP or, like, customer profile that goes after, you almost have, like, your m and a profile. Like, what fits in my pocket of stuff that I wanna go after? And then lastly, you need somebody who's operationally great, who can rework the organization against the AI because that's often the hard part. Right? You actually have to get people to use this stuff in order for it to be implemented.
Speaker 4:And so very, very few of these teams have all three of those things, and many of these teams are basically doing traditional PE roll ups. They're not really using AI, but they're raising at AI prices, and then they're buying at PE prices. And so just arbing. And so I've tended to avoid arbitrage.
Speaker 2:Yeah. It seems like a great deal with the founder. In another world, they'd be doing a private equity fund with two and twenty. And then here, they can go out and raise and dilute 20 you know, raise 20 on a 100, and then they they own 80% of the of the business. Yeah.
Speaker 2:Yeah. Remarkable.
Speaker 4:Yeah. It's a it's a very smart thing to do, and if I was a PE person, I totally could do that. I'm doing AI. But most of these things aren't doing AI. So but a handful of them that are gonna be massive.
Speaker 4:Right? Imagine an AI Danaher. Right? It's just it can really be transformative to big sectors. Yeah.
Speaker 4:And it changes something from a services margin to a software margin business with software leverage.
Speaker 1:Yeah.
Speaker 4:So it changes the characteristics of the of the business.
Speaker 1:Sort of sort of flashing back in your career, one of my questions I've always had on my mind is that you kind of, like, created the solo capitalist idea. People have kind of, you know, put that label with you. Was that just a happy accident? Did you did were you deliberate that you didn't wrap what you were doing in a firm? There's obviously people that start with similar scales, but wrap it in a firm with a brand.
Speaker 1:Mhmm. Like, how thoughtful was that? What were the considerations? Do do you like what how that Yeah.
Speaker 4:I think, you know, for a while, it really was just me.
Speaker 1:So
Speaker 4:Yeah. It it wasn't some strategic move to, you know Sure. Do something. Was just I was on my own doing stuff, I, you know and then eventually I brought on people for back office and finance because, like, I think that's really important. Right?
Speaker 4:Want compliance. You want things to be proper and all that. And then I got this moniker, and I never asked for it. Right? I actually am happy to be called whatever as long as I get to be involved with the most interesting technology and technologists in the world.
Speaker 4:Know, they they could call me, I don't know what, a carpenter. I don't care what
Speaker 2:you're They could talking call you big VC. Big venture capital.
Speaker 4:Yeah. That's the one thing I don't want to be called.
Speaker 1:Other than that, you know But I mean, I I imagine
Speaker 4:different from, like, traditional VC too. Sure. You know, like, I don't I I we do traditional investing, and we do traditional venture, but I actually think we do a bunch of other stuff, and we do interesting projects around, you know, things like one person on my team who's working as an investor with a technical background is actually driving AI driven translation of the world's thousand most important books that are off of copyright. Okay. And we're working with a few really big foundation mobs on that.
Speaker 4:So we do stuff like that too just because it's interesting. So I hope it's never just a venture fund.
Speaker 1:But Yeah.
Speaker 2:Do you think No. When do you expect, AI to transform venture capital? I think it's notable that the firm today and the activities of the firm look quite similar to pre ChatGPT. Maybe you can write an investment memo faster. Maybe you can seem like you prepped for a board meeting better, you know, if if you can just drop the deck in and and ask for a summary.
Speaker 2:But it doesn't feel like it has changed the profession at all yet. It's still finding and winning allocation and and, you know Yeah.
Speaker 4:I think it can help with some aspects of diligence to your point. Like, it can pull competitors and things like that. To some extent, it depends on the market. You know, there may be weird uses that nobody's done yet. So an example would be have you ever done the prompts where you ask the AI to, like, cold face read somebody and tell you about their personality?
Speaker 1:No. You you upload any pics Yeah. For
Speaker 2:I mean, just just analyzing somebody's personality with a picture, even just any picture of their face. It's it's pretty I mean, this is like the the schitzos called this physiognomy. Sure. Sure. Sure.
Speaker 2:Yeah.
Speaker 4:Yeah. But there's stuff like that where I've I've done that just for fun with my friends. Right? I'm like, what what is this person like? And my friend's sitting there with me.
Speaker 4:Right? I'm not secretly trying to psychoanalyze this or something. And then I'll ask it to give me a detailed breakdown of those characteristics and why, and I'll say, oh, this person looks like they have a genuine sense of humor and they're warm because of the way that the crow's eyes around their eyes exist in this way versus somebody who fake smiles because it doesn't get to the eyes, so there's no wrinkling. And you're like, wow. That's actually, like, super interesting.
Speaker 4:Right? And so it'll break down the sense of humor. It'll break down how likely that person is to be loud or quiet, the likely aggressiveness, like, all this stuff.
Speaker 2:Yeah. You can imagine there's there's a somebody could create an EQ copilot for the new, like, meta display glasses. You can just walk around. And I and if I'm maybe I'm really high IQ but I don't read people that well, I can look at John and say we're just probably probably inverted. But I could look at John and be like, oh, John is John's very interested in the conversation and he Yeah.
Speaker 2:He he clearly wants to be friends.
Speaker 4:Yeah.
Speaker 2:So I think there's more more to more to build there. Yeah. Give us the update on on on your your company with Jared Kushner. I know he's been very busy, but but I'm excited to to hear the latest.
Speaker 4:Oh, sure. Yeah. So we recently launched a company that's called Brainco, which is focused on using AI as basically a platform to help transform the world's largest institutions. And so I've been working with a number of large enterprises, some private equity, and other firms around this. And so this has been a fun project to do with him and with Eric Wu and Louis Bittigray and a few other people.
Speaker 4:Eric was the former CEO of Opendoor, and then Louis is former finance minister and foreign minister of Mexico. So it's kind of this interesting group of people coming together to try and solve really big AI problems. So that's been
Speaker 2:really fun. So is this realizing how much the Accentures and the Mckinsey's of the world were were getting paid to make pitch decks on basically, here's here's what you should know about AI for your business and realizing, hey, we could probably do that a lot better and then ultimately build software Mhmm. Within these organizations. Like, what is the Yeah. Actual
Speaker 4:much more focused on the yeah. It's more focused on the software side of it. So, basically, there's a common platform that's involved in terms of dealing with different forms of data, dealing with evals, dealing with a lot of the things that every enterprise needs to build in order to Sure. Really adopt AI, and then we build vertical specific applications on top of that, or in some cases, applications that can be reused over and over by similar companies in the same vertical. So you could imagine, for example, for a financial industry company, there's like a dozen things that every single one of them needs to build, and there's some customization around it.
Speaker 4:It's kinda funny because if you look at very large deals, right, if you're Dell or your VMware or your Oracle and you do, like, a tens of millions of dollar deal with with a customer, you're gonna have customization against that customer. You can afford to do it, but also it's important enough to do that for them. And so it's similar in that regards where we have common infrastructure, common platform, the same vertical applications, but then there's gonna be some customization per
Speaker 1:Yeah.
Speaker 4:Per client just like any other giant, you know, enterprise company.
Speaker 1:Have you thought about slicing the target customer either across vertical? Like, we're not doing health care because of HIPAA just yet, or we're not doing defense because of FedRAMP just yet, or we we think we have a lot in industrials that we can go after, or or are you more focused on slicing by, you know, market cap or size of business? Like, yeah, we're not gonna work with mid market companies. How do you think about, like, where the wheelhouse customer will be?
Speaker 4:Yeah. It's very much the the goal is to work almost solely, and there's gonna be some counter examples of this, with companies that are truly the the world's biggest institutions in terms of revenue, market cap, and then potentially impact, means sometimes you work with somebody a little bit smaller. But the goal is to ask how can you use AI to really get leverage on things that are important at at sort of a massive scale.
Speaker 2:Yeah. There was a report that JPMorgan is spending $2,000,000,000 a year investing in AI to effectively save $2,000,000,000 a year Mhmm. From automating. It's like when there's that much breaking even. Yeah.
Speaker 2:Yeah. They're breaking even, basically. I mean, presumably, like, some of those savings are
Speaker 1:They don't care. Yes.
Speaker 2:But Mhmm. But certainly, there's a lot of money. What do you how how how good do you think you've gotten at clocking AI pilot revenue as nondurable? Because there you I'm sure you saw that that headline. An MIT study came out that said basically 95% of pilots are are not actually delivering in value.
Speaker 2:This this felt like the year the year of the pilot. Next year is maybe the year of reality. But I don't know how you see it.
Speaker 4:Yeah. I just view that as a standard technology cycle. I thought that was a very overstated article. So, you know, this happened with mobile. You do the kinda crappy mobile app.
Speaker 4:Don't if guys remember the first BofA mobile app. Was basically yeah. Like a It was just like a web page.
Speaker 1:But everyone was just wrapping it.
Speaker 2:Well, the the current BofA app is still still pretty rough.
Speaker 4:So I actually think it's pretty good. Like, you can go to ATM. You can take out cash. Think I'm the only person who still does that. You can take pictures of checks.
Speaker 4:You can pay with Zelle. You can do all these things, right, that you didn't do before. But you started off and you tried to log in and the thing would crash. So I just feel like we're kind of in that era of AI implementation. People will get it.
Speaker 4:It'll take a decade to fully sort of propagate to your earlier point, but it really is the big wave that we're living through right now, and I think it's truly transformative.
Speaker 2:Would you ever would you ever have you ever considered an LBO of any of these companies that are in the the SaaS pocalypse in the public markets Mhmm. That clearly have some, you know, you know, super meaningful customer relationships and a ton of potential important place in their market, but just aren't Mhmm. Evolving their business model quickly enough?
Speaker 4:Yeah. We've looked at that, actually. I think there's a few really interesting things to be done at scale. And to your point, I think part of it is just driven by can you actually implement AI?
Speaker 10:And I think the if you look
Speaker 4:at the private equity industry in general, they've talked a lot about, tech transformation. That was a prior wave, right, like ten years ago, and you had all these tech based roll ups. Like, Compass was supposedly a technology company. And it's a great company, but it's not really a tech company. Right?
Speaker 4:And so I think we've we've kinda lived through the cycle before where people do almost like tech fake tech tech implementation where they claim they're doing it, they get a higher valuation, and it doesn't quite happen. They still load up the company with debt. They still run it a certain way. They you know, the the drivers are different. The CEO is the wrong person, etcetera.
Speaker 4:I think there's a good version of that to be done. I don't think it's easy, but if you do it, think you can unlock an enormous amount of potential in companies that won't make it otherwise or won't go there. And so, yeah, I think that's a super interesting area, and we we've looked at a few things over time. And part of the decision sometimes is, like, do you wanna try and do that or just fund a start up that you think will get there instead?
Speaker 6:Mhmm.
Speaker 4:And it's a little bit of that. It's kinda easier to just fund a startup because buying a company and transforming it is quite hard.
Speaker 2:Yeah. It has to be a company that is, I mean, is is at a sufficient scale. Obviously, we just saw that the EA LBO, you don't need to go that big. But finding something that's like really a whale.
Speaker 1:Can't hurt to go that big though.
Speaker 2:Yeah. I would like we would like to see you go that big.
Speaker 1:I would love to see you.
Speaker 2:I feel like that's the next that's
Speaker 4:the next
Speaker 2:you've I I like you've done it all at the early stage. You've done it all in growth. I feel like just get into the
Speaker 1:How about an Activision spin out? Activision spin out. Take I know. Know.
Speaker 8:Lagging. I know.
Speaker 10:I'm moving too slow. I know. That's just our mother.
Speaker 4:You're putting all this pressure on me.
Speaker 2:I know. That's that's our small ask is set the record.
Speaker 1:Wait. Wait. Do you have do you have any we we like to ring the gong for people around here when they share a number. Do you have any number you can share?
Speaker 2:Favorite number?
Speaker 1:Of deals, number AUM, number don't know. Anything. Do you what what's number that that quantifies your your corpus of work? Number of startups founded? My
Speaker 4:corporate I've started, well, I've started two companies directly, and there's two I've incubated. So four, I guess, ish. That's a lot
Speaker 2:of businesses. Relatively modest amount for the amount of EV created.
Speaker 1:Yes. Yes.
Speaker 2:It's good good hit rate.
Speaker 1:Well, thank you so much for stopping by.
Speaker 2:This was super fun.
Speaker 1:This was
Speaker 5:a lot
Speaker 4:of Really glad we
Speaker 7:met you. To do it, Janet.
Speaker 1:We'll talk to you soon.
Speaker 4:Have a good day. Really appreciate it. Take Before
Speaker 1:our next guest joins, let me tell you about numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.
Speaker 2:I hate to pick favorites. I hate to say it. I I I was I was more I was more engaged for for a lot than
Speaker 1:A lot was great. Than A lot was great.
Speaker 2:Sure. But his book High Growth Handbook
Speaker 1:Yes. Is Fantastic. It's a series
Speaker 2:of interviews. My It's favorite favorite business book.
Speaker 1:Yeah. No. It's a great
Speaker 2:High Growth Handbook, Scaling Startups from 10 to 10,000 people.
Speaker 1:The interview is Some hitters for that.
Speaker 2:Timeless. Bunch of great interviews and yeah. You should go pick it up. I need to I need to relisten to it.
Speaker 1:Well, without further ado, we have Robbie Stein from Google in the Restream waiting room. Welcome to the show, Robbie.
Speaker 2:Robbie. How are doing? Welcome.
Speaker 1:Good to see you.
Speaker 8:Hey. Hi. Can you guys hear me?
Speaker 1:We can hear you. We can hear you. Loud and clear. I I know people are gonna be confused, so why don't we just get out in front of it and explain your role at Google relative to Gemini, relative to AI? Take us on a little, Game of Thrones HBO intro of the map of Google and where you fit in.
Speaker 8:Sure. Yeah. So I work on the Google search team. So it's the search bar. You type things in.
Speaker 2:Yep. Yeah. I was gonna ask, could you could
Speaker 1:you explain Google? Yeah.
Speaker 8:It's a thing. You know, you could type a question in. Sometimes you could use a camera. I don't if you've used Google Lens.
Speaker 1:Oh, yeah.
Speaker 8:You can also Google that way too. Yeah. There's a there's this app. It's also called Google. Yep.
Speaker 8:All that kind of stuff is is it was where I focused my time.
Speaker 2:Consistency the don't forget about the I'm feeling lucky button.
Speaker 1:Yeah. Yes. Right? Yeah. Yes.
Speaker 1:That's what do too. So so how do you think about integration with the DeepMind team, integration with the Gemini team? How do you think about bringing AI to search?
Speaker 8:Yeah. So we work very closely with the Google DeepMind team, Demis, Corai, that whole group. The way we think about it is we want to have frontier models right in search so you can really ask anything Mhmm. And have the the ability to use all of search's incredible knowledge, real time information systems, and context of the web to help give people this incredible information. And that's really where the two come together.
Speaker 1:Yeah. There there was this question. It's like, you know, chattering class being like, oh, well, Google's you know, it's such a different paradigm chat versus search, 10 blue links. But have you drawn on the fact that Google's search started with two modalities? The I'm feeling lucky button was a different way to interact with Google search.
Speaker 1:The 10 blue links was one way. What are you how are you thinking about how you, like, kind of level up or educate the consumer to use the all the different tools since now there's not just, you know, search results and and and AI overviews, but there's so many different things. How do you think about ramping those up?
Speaker 8:Yeah. So there's always been many ways to use search. Actually, Google Lens is a good example. You can take a picture of something. You can ask what is going on with this plant that seems to be dying, and you can get information from that right from the camera.
Speaker 8:And that happens in the app. So there's always been different ways that you could access and tap into the search knowledge base. But I think increasingly, it feels like you wanna go to search, ask whatever you have in mind. You only wanna think about where you're gonna ask that question. And then if you have something where AI is really helpful, get this little AI preview starting to show up now around AI overviews.
Speaker 4:Yep.
Speaker 8:And if you click into that, you're in this AI driven experience. And we've now, through a new new project we launched called AI Mode, allow you to follow-up, go deeper, and have a full generative end to end chat like experience right within Google Search.
Speaker 1:Yeah. Walk me through the international expansion. I'd love to know if legal or engineering is more rate limiting there. It feels like it's it's gotta be incredibly complex to check all the boxes when you want to expand. You've obviously expand really fast.
Speaker 1:So what's the secret to taking over the entire world so quickly?
Speaker 8:Well, our newest our newest product, AI Mode, is the that lets you really ask anything within Google Search Yeah. Using frontier state of the art models. You know, we we launched in The US and then quickly in India, a couple countries, UK, over the summer, kind of May, June, July timeline. And then just a couple months later now, we're at over 200 countries, 40 languages. We moved really fast to ship that.
Speaker 8:And so we're now basically everywhere except for a couple countries, and there's certainly a bunch of considerations, policy and infrastructure. Honestly, they both affect the Oh,
Speaker 1:yeah. Because there's actually inference going on, so you need local compute, basically, more than
Speaker 8:you There's also there's there's we want to make sure to do quality checks because in every language, have you different permutations where you have multilingual with people moving between English and other languages. Yeah. Just wanna make sure everything is doing what you expect it to do. You know, this is also a multi turn conversational experience. So when you evaluate it, you wanna make sure that it's dialed before you go.
Speaker 8:And so each of those just takes time. I know everyone's always frustrated. Like, why can't I use it today?
Speaker 1:It's the main
Speaker 8:thing I see on x. But, hopefully, now almost everyone can.
Speaker 1:How are GPUs allocated at Google? You have TPUs. You have TPUs in the cloud. You're selling them now. Obviously, DeepMind wants one for research.
Speaker 2:Member just gets one Everyone
Speaker 1:gets one rack. You're splitting equally. But I imagine that, you know, there is is there a spreadsheet? Like, what what's the process to actually figure out where to allocate GPU or TPUs?
Speaker 8:Yeah. I mean, there's a there's a there's an allocation process. Okay.
Speaker 1:I mean,
Speaker 8:everyone needs TPUs. Yeah. It's just compute is by far the most important thing in driving infrastructure right now. Sure. I mean, there's lots of needs, but they're they're important things.
Speaker 8:We want search. The search is one of the largest ways people interact with AI. So that's like a it's very important one. Obviously, we're doing frontier modeling work. We've got a bunch of things happening in cloud.
Speaker 8:Yep. So that that's there's a process by which you do those. It's funny. I did an event, and a Google team actually gave me, like, a old Ironwood, like, gen prior gen single TPU in this little case.
Speaker 1:That's cool.
Speaker 4:And I was
Speaker 8:joking if somehow I could, like, crack it open
Speaker 1:Play it.
Speaker 8:And, like, refurb it and, like, get it up and running. I can somehow, like, improve my improve my standing in the on the team. But I don't think it's gonna happen.
Speaker 1:Couple How
Speaker 2:how often do you guys come back to Google's mission when when thinking about product decisions? We've talked about this on the show before. There's always, you know, you you I'm sure you wake up every morning, there's a new headline. What is Google doing in a in AI? Why haven't they released this faster, etcetera, etcetera?
Speaker 2:But I you know, we were never we never really stressed about it too much because when you look back, I'm I have AI overview here. I said, what is Google's mission? My AI overview says Google's official mission is to organize the world's information and make it universally accessible and useful. It And feels like LLMs are just so aligned
Speaker 1:It was the technology definition of a
Speaker 2:to to carry out the mission. And so it's like relax everyone. I think this is this is like a natural evolution for the company.
Speaker 8:Yeah. I mean, talk a lot of internally actually about how the mission has never felt more relevant. Mhmm. And it is really incredible to work somewhere. I worked at Google in 2007 for a while, did some startups, and worked in some other companies too.
Speaker 8:I'm back now. And it's it feels that same level of entrepreneurialism in 2007 where it's like you're building all these new things for the first time, except you're kinda building them again because AI allows you to say, what does search look like if you could really ask literally any question and have created an AI that's the most knowledgeable AI out there that could understand all of Google's information, the context of the web, and you could talk to it. And by the way, you could talk to it live. Like, we just announced search live that's available. So if you're driving, you could just talk to Google literally, like, on in your car.
Speaker 8:You could take a picture and have this multimodal conversation back and forth now. Like, this is all stuff that talked about a long time ago, but was limited because of technology. So that is incredibly exciting. It's it's very motivating, and I do feel like it's one of the reasons people on the team are fired
Speaker 1:How do you think I mean, it it's it's so interesting that, as LLMs boomed, AI search overviews, made a ton of sense, were baked in, adopted, loved. But now we're already in the next phase, which feels like agentic purchasing, agentic checkout. How do you think evolving how do you think about evolving the product even further to go from knowledge retrieval to taking action?
Speaker 8:Yeah. We have a bunch actually active there. And we recently launched in The U. S. An agentic experience where you can book restaurants and local services through agentic.
Speaker 8:So it's actually really neat. Like, through AI mode now, you can just have a conversation. Hey. Was a good date night place. It'll do all the thing.
Speaker 8:It'll tap into the knowledge of Google. It'll look at Google Places. It'll do research. It'll do whatever. But then if you wanna start a task, it'll also go bring back availability across talk and OpenTable, like, right in the experience.
Speaker 8:K. And you can just book it, and it's awesome. Yeah. I've using that. It's just a small example of what's possible.
Speaker 8:You know, people come to Google not just for information, but they get things done. It just materializes itself as a query. But you're not like I don't, like, wanna just know restaurant reservation availability and be like, oh, sweet. I'm glad to know there's a table available. I'm gonna go to my day.
Speaker 8:Like, you're trying to do something. We we think about that a lot. And that's just the, you know, the surface that there's so much people are trying to do, but they're just kinda getting started with those journeys on search. What could we do to really help you? Shopping's a big one.
Speaker 8:So we have an we just launched a new visual way to do AI, which, like, is one of the first ways where AI can be helpful with inspirational tasks. So now in AI mode, you ask to design a bedroom or look up landscape lighting, it actually finds you beautiful inspirational imagery and products in a grid. You could click on it. You can imagine getting much more help finalizing those purchases, doing you know, being reminded of price changes, and it's much more of this interactive version of search that can do things for you and you can you can really connect with versus in just a pure informational experience.
Speaker 1:Right now, my my mental model for is like google.com, the search bar, then AI mode almost as a vertical product like flights, like images, like shopping, where it's sort of a portal or subproduct that I get, you know, I I go down a funnel and I wind up in. Do you see that holding? Or do you think that AI mode acts as a wrapper on top of all the different sub search products?
Speaker 8:Yeah. I think what's gonna happen is you have this AI mode, which is gonna hopefully be this most knowledgeable AI possible. It knows everything in Google, billions of products, million hundreds of millions of locations, all of the web, and has access to all of it, knows how to use Google as a tool, and it's super powerful. But not necessarily the best thing for all things. Like, if just need a specific phone number, you probably get that in, like, fifty milliseconds right at the top of the page.
Speaker 8:Mhmm. You just wanna know a sports score? What's what's literally the sports score right now? Just works. You just you know, you put it in Google.
Speaker 8:Or if you're just looking up a musician's name for the first time, you're trying to get a browsier experience. Like, you actually wanna kinda see images. You wanna see what's going on on at what are people saying on x, which shows up in the search page. So I think what happens is you have this incredibly knowledgeable system that we feel like is designed for more complex tasks, more of this, like, how do I do this? What's my advice for this?
Speaker 8:I'm doing this trip. I need this restaurant. I'm trying to buy some jeans. How do I get started with that? And that if you have knowledge baked into that, that's really powerful.
Speaker 8:But then people need how do you how do you bring that to people? And there's basically two ways. One is you just search. And through AI overviews, we will show AI where we think it's useful. Mhmm.
Speaker 8:And for many queries, it's not useful actually, which is why it doesn't show up. The system learns that. But for these longer queries where you have a specific question, it typically shows up there. Then the other way is for power users, we feel like they kinda have this mental model of, like, oh, like, this I'm doing this planning thing. Like, oh, I'm like, I'm really curious to know, like, what a stock price difference between these three stocks are over some period of time.
Speaker 8:Usually, you wish you could just type that in natural language and have the thing generate a chart and look at it use Google Finance as a tool, which it will do. And for that, you can go right to AI mode. So if you can do that through the mode, you can do it on mobile through those direct kind of buttons to go right to AI mode. You can go through Chrome now. We announced like a way to just type and go right to the AI mode in Chrome.
Speaker 8:And you could also just go to google.com/ai now, which is kind of fun.
Speaker 2:What anomalies are you seeing? Have you seen any of these screenshots of of Google trend data? People are are posting, you know, people forever have been posting screenshots of effectively search data and using them to infer what's happening in in the world. Right? And so over the past few months, we've seen people posting search queries like help with my mortgage.
Speaker 2:And it's just like a crazy ramp up into the right. My my intuition is that it's potentially a bunch of different keywords are seeing these crazy ramps because there's potentially agents sort of like leveraging Google search to drive a higher volume of searches on potentially a search that's happening maybe in an LLM. Have you seen any anomalies there? Is that something you're aware of?
Speaker 8:I haven't personally seen any anomalies there. I I don't I haven't really heard of that before. So wouldn't look I wouldn't buy too much into that. We do have protections for those kinds of things. Yeah.
Speaker 8:I think in general, what we're seeing is people who are using Google very differently and at a at a very fast growth. So people are asking very specific questions of Google. They're they're using Google Lens and asking multimodal questions. They're asking follow ups. I mean, those are kinds of things that we're just seeing we're seeing in such a broad way that I think that's the thing that we mostly focus on.
Speaker 8:But, yeah, I can't speak more to to some of the trends things that you're mentioning.
Speaker 1:Yeah. How do you think about advice for brands? I've I've run brands and, you know, grinded my way up the SEO rankings. I never did a ton of optimization. Most of my strategy was just try and make something eventually that people talk about and it gets written about, and those websites have, you know, ranking power and then you kind of rise to the top of that keyword.
Speaker 1:Is any of that changing in terms of in the AI shift? What advice are you giving to brands that want to perform on Google these days organically? Yeah.
Speaker 8:But what's really interesting is I think the core Google search ranking is more relevant than ever. Because it turns out that one of the best things that every AI model does now is they kinda, like, search the web. It's like, I don't know. Like, what are you trying to do? Oh, I don't know.
Speaker 8:I'm trying to figure out if, like, I should go to this hotel. Alright. Well, like, it's not in parametric knowledge. Do you, like, know the rates of those hotels? Like, can't okay.
Speaker 8:I'm gonna search the web. Right? And Yep. And even AI mode is is special in that we're Google, and so it uses Google really effectively, it creates these query fan outs. It does dozens of queries.
Speaker 8:Yep. But effectively, it's googling stuff. Right? And everyone's googling stuff all the time. So for a given question, what are the things that show up as highly relevant to a given question?
Speaker 8:Those end up getting absorbed into the context window and have a high probability of being displayed to the user. Mhmm. And so if you are just thinking, how do I build great original content that's trusted and authoritative for specific kind of query? Turns out that's still gonna likely be very valuable.
Speaker 1:Mhmm.
Speaker 8:And you can go read the Google guidelines on content and human rater guidelines. I think they're super interesting. There's lots of detail in there on how Google evaluates trustful, high quality content and scoring systems that are used. Turns out that's a really good investment because every other system is is kind of proxying for the info that's most useful for a question. Yeah.
Speaker 8:So that's my main advice is to kinda, like, dig in more on understanding how those systems work because it's largely gonna apply later.
Speaker 1:Yeah.
Speaker 9:And then
Speaker 8:the second one is what are people using AI for? Those are the growing Mhmm. Kind of needs.
Speaker 1:Oh, sure.
Speaker 8:Sure. And there's a disproportionate amount of use case in different types of domains now with AI because it allows complex needs and it allows for things like advice. It allows for things like really nuanced troubleshooting with stuff. It allows for these emotional needs to be satisfied differently and mental health.
Speaker 1:Yep.
Speaker 8:So those are areas that are probably growing markets of use cases. And I would be I would be a student of those as well.
Speaker 1:What about Sorry. Can I have one more on that? So what about content that was previously buried to Google that is now available for search rankings because of artificial intelligence? I'm thinking about, like, literally this show, it will be a three hour video on YouTube that, you know, a a buried mention previously probably wouldn't be perfectly translated, indexed, etcetera, etcetera. But, I would imagine that the the strength of, like, video content and audio content gets relatively better over time in the AI era?
Speaker 1:I mean, honestly, you guys have been doing this for probably a decade, but take me through a little bit of that. Is that is that a reasonable thesis?
Speaker 8:Yeah. I actually we are it is a reasonable thesis. We have been seeing an increased diversity of the kinds of pages and sites that show up within AI. Yeah. Because people are asking these nuanced questions.
Speaker 8:There's a lot of times, there isn't even, like, a single web page that has this information.
Speaker 1:Yep.
Speaker 8:But if someone I don't know. Sometime in the future, this this video gets segmented and scanned and understood by Google, and someone asks for, like, I don't know, an interesting conversation in Google's AI journey, reagreeing search in the AI era.
Speaker 1:Oh, sure. Sure.
Speaker 8:And maybe it's like, here's a cool conversation you could check out, and this this, like, clip
Speaker 1:Yep. Show up now Yep. In in a
Speaker 8:way that
Speaker 1:would be very
Speaker 8:difficult for that to happen unless you search for, like, tVPN, like, interview of whatever which was, like, very specific keyword Yeah. Based on
Speaker 1:Or or we'd have to go manually create a transcript and then get that into, like, the text SEO world. So, yeah, very different era. Sorry.
Speaker 2:What are what are the plans around giving, if there are any, giving publishers control over whether or not their content is used in various AI functionality?
Speaker 8:Yeah. We have a bunch of publisher controls we what we have. So there's an over there's an overall opt out training side. You know, in search, you can opt out of crawling. You can opt out of this other thing called snippets where you can you can show up in Google, but you won't show up in these rich these rich experiences if you want.
Speaker 8:Yeah. And so there's there's a bunch of things that, you know, publishers can do and can look at there. But, you know, I think ultimately, the belief I have is that to the prior conversation, you know, AI should be this massive discovery engine over time.
Speaker 1:Because if
Speaker 8:you think about it, these complex needs were getting growth. Like, we're we're seeing 10% growth, for instance, in large markets like like India and The US for these really specific questions, which at Google scale is, like, enormous, enormous number where you got if you have a really specific question, people are doing that more and more and more and more because you can get AI to go deeper. Multimodal. Right? You're asking taking a photo of something and you wanna shop it.
Speaker 8:Seeing 70% in year over year increases in those kinds of questions. And these are billions and billions of queries. Like, so this is these are huge numbers.
Speaker 1:Wait. How many queries? Billions?
Speaker 2:Billions. Billions. Yes.
Speaker 1:It felt so good. The sneaky gunk is always fun. Sorry. No. That was
Speaker 8:totally worth it. I'm glad you did that.
Speaker 1:Thank
Speaker 8:you. So, like, these are big numbers
Speaker 1:Yeah.
Speaker 8:And each of those generate AI experiences with links to go deeper on stuff. Yeah. Every single one of them. And so, theoretically, you should have this, like, unique opportunity to say, oh, did you take a picture of your bookshelf. What book should I read?
Speaker 8:Oh, well, here are cool reviews of other books that are like things you've liked. And it's like, I could never Google that before. And so, theoretically, you should have because it's such expansionary moment. We're seeing that this is an expansion more than anything. Like, the old like, the way people Google, they're Googling, and they're using it in all of these new ways.
Speaker 8:And and so, hopefully, over the long term, that's what that produces growth.
Speaker 1:Mhmm.
Speaker 2:I have a lot more questions, but We'll
Speaker 1:have to follow-up.
Speaker 2:Out of time.
Speaker 1:Yeah. Yeah. We could go way deeper here. I I would love to even even just dig into how TBPN shows up on Google. It's such a fascinating content because we create so much content all over the web.
Speaker 1:But thank you so much for taking the time to hop on the show. This is fantastic, and congratulations on the progress. We'll talk to you soon.
Speaker 8:So much.
Speaker 2:Cheers, Rob.
Speaker 1:Have a great rest of your day. Before we bring in our next guest, let me tell you about Fin dot ai, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on g two, and we have Morgan Housel in the Restream waiting room. We're gonna bring him into the TPPN UltraDome. We're very excited to catch up with you again. One of our earliest and just most enjoyable guests.
Speaker 1:I I had such a ever fun
Speaker 2:across a thousand plus interviews.
Speaker 1:Remarkable. So thank so much for taking the time to host us
Speaker 2:huge week. Yes. Congratulations on on the launch.
Speaker 9:Big shoes to fill. Thanks guys. Nice to see you.
Speaker 1:Yeah. Give us the give us the updates, set the table, what's going on this week.
Speaker 2:Get that LP Get that Gong ready.
Speaker 1:Get this Gong.
Speaker 9:I Yes. So my my my third book, The R of Spending Money came out this week on Tuesday. Now, it's it's a tough thing with there it is. Thank you. Thank you.
Speaker 9:It's a weird it's a weird thing with books. I think I feel like it's almost like a startup where I've been a writer for twenty years
Speaker 2:Yeah.
Speaker 9:But you get, like, three shots on goal when when a book comes out. And when when when when when you're writing a blog post Yeah. If it sucks, and at times they do, there's always next week.
Speaker 1:Yeah.
Speaker 9:It's not not that big of a deal. Yeah. When when when when you write a book, you really gotta be like, this is this is it. You really gotta put your best foot forward. So there's it's always a a stressful thing to go through.
Speaker 1:Was the process different for this book from the other ones? Do you we've heard from authors who, like, go lock themselves in a cabin. Like, what what's your process like, and has it changed?
Speaker 9:It's usually it's it's usually roughly this. It's it's about a year of very informal noodling, where it's like, I'll be going for a walk and be like, oh, that would be a cool chapter, and I could use story. It's a year of that. Like like, just just no effort. And then three months of part time writing and three months of full time writing.
Speaker 9:During the last two weeks of the full time writing, the world does not exist outside of my keyboard. That's usually how it works.
Speaker 1:Yeah. And are you, like, combing, like like, front to back of the manuscript, like, every day? Are you focused on, like, a single chapter for a full day? Like, how how do you actually, like, chop through, like, what becomes a full book?
Speaker 9:It's it's usually it's usually the latter. There's not much going through everything end to end until the very, very end of the process. So it's usually just focusing on one chapter. Mhmm. And very roughly, this is not a hard and fast rule, but when I was writing it, it was like, I wanna focus on one chapter per week.
Speaker 9:Normally, I'd say if there's one thing that I've gotten a little bit better at over the years, just a little bit better at, not perfect by any means, is that I think my first draft is closer to my last draft than it used to be. Not necessarily because I'm a better writer, but because I'm better at knowing what writing is not going to work and then stopping it very quickly. And so I think when I when I go through a chapter, by the end of it, I can go back and scan it and be like, this is pretty good. I'm gonna set that aside. And then when I do my little self edit at the end, that's that's usually where where where most of the work happens.
Speaker 2:So it's much easier to write a book now that that we have AIs.
Speaker 1:Yeah. What was your problem?
Speaker 2:I'm kidding. I'm kidding.
Speaker 9:Yeah. No. I'm here. Here's here's the thing. Share the problem.
Speaker 9:I've I've I've talked to
Speaker 1:Just share the prompt. Just just give me the prompt.
Speaker 2:Yeah. Come on.
Speaker 9:What's I'm
Speaker 2:scared to share your prompt?
Speaker 1:Come on.
Speaker 9:Just give me I was talking to a guy the other day who just finished his manuscript.
Speaker 1:Yeah.
Speaker 9:And he said, without ChatGPT, he would not have been able to write the book. And I'm like, I love hearing that. I love that if we can have a tool now, we're gonna have more books being published.
Speaker 1:Because I
Speaker 9:think there are people who have very good ideas
Speaker 1:Yeah.
Speaker 9:Who have a story to tell, but are too intimidating to write a $50,000 50,000 word manuscript, which is not an easy thing to do. Yeah. So if we can just get more people out there because they have ChatGPT to get them through writer's block, awesome. I think it's wonderful. I'm still I'm still old school because I've been doing it for long enough that I wanna write every single one of my words for better or worse.
Speaker 9:Even if I could have done a better job with some LLM, like, getting me through those blocks, I'm still gonna try to power it through myself.
Speaker 2:I'm sure you saw David Simon, the creator of The Wire. There was a screenshot from an interview. Someone asked him, okay. You've spent your career creating television without AI. And I could imagine today you're thinking, boy, I wish I had that tool to solve those thorny problems.
Speaker 2:David Simon says, what? And the interviewer says, we're saying dot dot dot. David Simon goes, you imagine that? And the interviewer goes, boy, if if that had existed, it would've screwed me over. Simon says, I don't think AI can remotely challenge what writers do at a fundamentally creative level.
Speaker 2:And then he says, I'd rather put a gun in my mouth.
Speaker 9:Yeah. There there you go. Yeah. Just just get right to it. Here's what I think.
Speaker 9:I've always thought that writer's block is actually a symptom of your idea sucks. Sure. And it's not working. And the reason you can't find the words to get through is because you know in your soul that this idea is not working.
Speaker 2:Yeah. You fundamentally don't you don't care about what you're writing about. Right? And I think as a like, when I think about the points where I've been writing that I cannot get fig get myself moving, it's like writing that essay. I had to take a class in college about dinosaurs.
Speaker 2:Yeah. I had to write a paper about dinosaurs.
Speaker 1:You studied dinosaurs was in an actual class that
Speaker 2:fulfilled some sort of science. And Some sort of
Speaker 1:and now your son is obsessed with dinosaurs. Apple doesn't fall far from the tree. That's incredible.
Speaker 2:No. But you're writing you're writing about a topic that you don't care about. Words do not come easily. You're not Right. If you don't care.
Speaker 2:Course And
Speaker 1:Jordy Segerly, a PhD paleontologist. I'm finding this out for the first time. Sorry. I love it.
Speaker 9:No. I would say the flip side of that is when you know you have a good idea
Speaker 1:Yeah.
Speaker 9:And it's a right idea, the words just tend to fall right out. And it's no problem to get them on the paper.
Speaker 1:Yeah.
Speaker 9:And so I bring that up because I think if you have writer's block and you're like, oh, let me use ChatGPT to get me through it, it will fight it it will find a road through, and it'll help you onto the next paragraph. But then you're probably ignoring the signals of your idea not working. And you're much more likely to get to the bottom and finish the essay or whatever it is, even if your idea sucks and it didn't work.
Speaker 1:Yeah. I've
Speaker 2:noticed Writer's block is just this divine presence that's telling you, you don't need to make this.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 2:It's not needed. It's not needed by the world. And you can force through it. Yep. But what did you actually Yeah.
Speaker 2:What did you actually do?
Speaker 1:I've been writing a I think there's a Oh, sorry.
Speaker 9:Oh, sorry. I was gonna say, I think there's a similar analogy with music where I've heard from many musicians, I am not one of them, of course, that their best songs were the easiest to write. Mhmm. And, like, the tune, the lyrics just flowed right out. And if they are struggling to figure this out, figure out the tune, figure out the lyrics, it's probably because the song's not working.
Speaker 9:It's usually the same.
Speaker 1:Yeah. I've been writing a daily newsletter for this and to prep the show, about 500 words, and I've noticed that I haven't been using AI for anything other than knowledge retrieval. If I have to look up what what's the market cap of this company, of course, I go to ChatGPT. And then I also noticed that a lot of times, I'm kind of just reiterating, like, a discussion that I had with Jordy earlier in the morning. And so I'll use dictation sometimes to just get some of the words down, and then I'll kind of write from there.
Speaker 1:But I'm never crafting a prompt for what I'm writing, which I think is just interesting because the models have gotten so much better, and yet there's still something about, like, I gotta come up with the own idea, like, seed of the debate.
Speaker 2:Yeah. What do think?
Speaker 9:Yeah. It's also very difficult to really make it right in your voice. Yeah. So you can prompt it and say, write it like Jordy, like, it exactly, but it's not. Yeah.
Speaker 9:It's just it's Yeah. It hasn't hasn't gotten there yet.
Speaker 2:I feel super grateful that it's still easy to clock AI generated text because if I'm scrolling on social media, maybe I see a post, and then I'm in the comments, like, interested to to see what other people think about it. And I can just easily clock, okay, AI generated. I'm just gonna skip it because it's probably just, like, summarizing it and asking a question. But Yeah. I I worry we'll lose that ability to filter, like, in the next iteration of the models.
Speaker 1:It's definitely made me a sloppier writer, and I'm I'm I'm, like, deliberately not trying to craft the perfect sentence structure constantly because I feel like the like the rigidity is just an extra layer that I impose on myself. And if I take that away, it just kind of feels more stream of consciousness and is just actually a better product. I don't know.
Speaker 2:Shifting gears. Yeah. Yeah.
Speaker 1:Sorry. Go ahead.
Speaker 2:I was gonna say shifting gears to the book.
Speaker 1:Yeah. Yeah. I want you thesis and
Speaker 2:Do you think well, maybe a kickoff question. Do you think tech has figured out how to spend money? Because there's always this there's always this critique that tech people don't know how to spend money. And I think part of that was the the tech uniform was not How maybe like the East, you know, the West Coast tech uniform, jeans and a t shirt and sneakers. People sort of came, you know, participated in this industry in a very sort of plain way.
Speaker 1:How do you go to your jacket? Like $200. Okay? It's reasonable. Well,
Speaker 9:let's let's compare tech spenders to Wall Street spenders. Major difference is most tech wealth is not liquid, and Wall Street was paid in cash every year. Sure. So so, I mean, that's that that that's the that's one of the biggest like, tech wealth is a lot of paper wealth relative to Wall Street wealth. That was so much more liquid.
Speaker 9:You can go buy the Rolex. You go buy the house in the Hamptons Mhmm. Cash. So I think that that was that was that was probably that was probably part of it.
Speaker 2:But Yeah. There's a culture of, like, buying the the the watch based on the, you know, a banker buying deciding what watch to buy based on the size of their q four bonus. Yep. Right? It's just like it's gonna be some percentage of that.
Speaker 2:So the watch I get, it'll be a Submariner, maybe it'll be a Daytona. I don't know yet.
Speaker 9:I do think there's something to be said that on Wall Street, your value and your success was how much money you made. And in tech, it is much closer towards the product that you built and the intelligence that you have and whatnot. And so there is less desire to show off wealth in tech because that's not what people get valued for. And I can't think of hardly anyone in Wall Street outside of maybe Warren Buffett, who is very well respected and admired and wears a T shirt and lives in a modest house. It doesn't happen.
Speaker 9:But you can but but you can name a 100 of those people in tech Yeah. Who do that because they're valued for their ideas, not just their annual bonus.
Speaker 1:On that illiquidity question, Paul Graham had a take recently that a lot of tech people, they're locked up. And then by the time they can afford art, they struggle to get up to speed on the art world or something. Does that resonate with you at all, just the fact that if you come on Wall Street and you can afford, like, the the Rolex and then the AP and then the FPGeorge eventually, like, it just ladders you up the luxury ladder easier than just having all this money and being like, well, do I really wanna jump to the top of this luxury ladder that just put the hedonic treadmill on 15 miles an hour on the first run?
Speaker 9:Yeah. I think it's very difficult for people to know what they want. Yeah. They're very good at knowing what they need, and they're very good at knowing what they don't want. Knowing what you want is actually very difficult.
Speaker 9:Part of the reason is because what I want might be totally different from what you want. People have completely different needs and whatnot. I think if you are thrust into wealth very quickly, there are knee jerk reactions of what you think you should want. I want a mansion, I want a fast car, I want art, I want the plane, whatever it might be. Sometimes it's true, and sometimes it's very not.
Speaker 9:I think if I can predict all of your spending habits based off of your income, there's a very good chance that you're not doing it right. There's a very good chance that you're just buying and spending your money in the way that society told you to do. If you earn this much money and your net worth is this, you should have this house and this car and this art and travel this way and whatever it might be. Most of the time, it just doesn't work that way. People have very unique spending preferences.
Speaker 9:The wealthy people who I've seen who've done the best have a lot of really extreme quirks in their spending. Where they spend they're very wealthy, but they spend no money on cars, or no money on travel, no money on food, whatever. It's very unique to them, whatever it might be. I'm not a wine person in the slightest. I'm not even necessarily a travel person.
Speaker 9:But a lot of people would be the exact opposite, and that's fine.
Speaker 1:So I
Speaker 9:think it takes a lot of looking in the mirror, so to speak, to figure out who you are, and to go down the path of trying to figure out what you want, which is not easy.
Speaker 2:I I feel on a personal level that my relationship with money has been very distorted because the business that I started building in college ended up, you know, is cash flowed every month for my entire adult life, which has been a tremendous benefit, but it's also completely it's just distorted the way that while in tech, the primary way you generate wealth is you get a measly salary for a long time and then you get a whole lot of money at once or maybe you sell some secondary along the way and get some liquidity. But it's been this weird dynamic where it's like, I remember T shirts. Well, so so the first time I took a meaningful profit share from from my company, I bought a nine I took the entire amount and I bought a nine eleven because I was just like, well, I'm gonna get the same amount next month and then I'm gonna have this nine eleven for a long time. And so I had to kind of like I've it's taken it took me a few years to kind of like learn Such
Speaker 1:a fascinating psychology.
Speaker 2:Learn that lesson whereas I I I wouldn't think like, oh, that's a lot of money. I would just think of money in increments of basically months of cash flow. Yeah.
Speaker 9:I think I think there's there's good mental accounting there of, like, rather than thinking about the $9.11 costing a $120, you think of it as one month. It cost me one month or something like that. I think that's that's actually a smart way to do it.
Speaker 2:Do And and even even I I value a month even more now even though monthly income has, like, increased throughout my adult life because, like, I'm, like, a month as a kid, you're, like, oh, I got all the time in the world. Now, I'm turning 30 at the end of this year. I'm, like, oh, time is a real thing. It goes by. You don't it's not you don't have a infinite supply.
Speaker 1:Do people come
Speaker 9:How do you how do you think that makes me feel when you say times times like running out because you're turning 30? How how how does it make everybody else feel? Would I would would kill almost 30.
Speaker 5:Well, are you are
Speaker 2:you are you are you spending a lot of money on your health because you look younger than the last time you came on the show?
Speaker 9:Maybe I just hadn't showered the last time I was on the show. I don't know. But I do think there is a real thing where there it's a fine balance between spend for today, live for today, and save for tomorrow. Both of them are really great ideas, and it's never as simple as YOLO or or, you know, save and and and and save for the future. It it always just comes down to what are you going to regret?
Speaker 9:What are you most likely to regret at some point in your future? Goes both ways for people. You could easily imagine looking at yourself twenty years from now and regretting the trips you didn't take, the nineeleven you didn't buy, the house you didn't buy. You can so easily imagine too, looking back at some point in your life when you're tired and your career is not working out, whatever it might be and saying, I'm so grateful that I saved the way that I did. It gave me a sense of independence that I value more than anything right now.
Speaker 2:What are your quotes?
Speaker 1:Take on the Oh, sorry.
Speaker 2:You you said you said a lot of a lot of successful people have, you know, quirks in their spending. Do you I'm I imagine you understand your own at this point.
Speaker 9:Yeah. I mean, this is this is a trivial and small thing, but I love this heuristic by Rob Henderson. He's a great great academic. He says, rich people food looks better than it tastes, and poor people food tastes better than it looks. And on that spectrum, I love I love cheap food.
Speaker 9:I love Taco Bell. I love Jimmy John's. I can't And get enough of I've had some very expensive meals and whatnot, and I have enjoyed them marginally at best. The best meals I've ever had tend to cost the cheapest. And so that it's it's such a trivial thing.
Speaker 9:But I never would I wanna be like, oh, I can afford to eat this way, so let me abandon all the food that I love and go eat some food that is subpar because I'm supposed to like this stuff better when I don't.
Speaker 1:Yeah.
Speaker 2:Did you did you cover private aviation at all in the book? We had a funny conversation with a friend this morning. Yeah. He basically said, I'm I'm my house is gonna be paid off by the end of this year. And after that, I'm giving all my money to NetJets.
Speaker 1:He's not getting a I second
Speaker 4:love it.
Speaker 2:Which is a quirk in itself. It's very quirky. He finds commercial aviation to be very dehumanizing. Yeah.
Speaker 9:I would if you had a choice between two houses and commercial or one house and NetJets, a thousand times out of a thousand, I would do the latter. Yeah. Absolutely.
Speaker 2:Totally agree.
Speaker 9:Two houses are a giant pain in the ass anyways. But to answer your question, I do cover private aviation in that because I made this observation that having a private plane is the ultimate luxury. If you talk to wealthy people, they're like, that's the only thing that you get pleasure out. The house, the yacht, the car doesn't do you much. The plane will change your life forever.
Speaker 7:I think part of
Speaker 9:the reason we love it so much is because the vast majority of people in that situation remember what it was like to fly commercial. Now, here's the observation is nobody thinks it is an ultimate luxury to have a private car. But virtually all of us do. And the reason we don't think about it is because we've always had private cars. And so there's nothing to compare it against.
Speaker 9:Now, you could imagine that if you spent your entire life on a train, on a public train or a public bus, and then you got a private car, it would feel like the ultimate luxury. But we have nothing to compare it to.
Speaker 2:So what's their lure? If you if someone's lucky enough to be born into a family that only flies private, can you imagine their experience of flying? They're like, I don't wanna fly. It's gonna You you can imagine they don't even have a positive feeling associated with flying private because it's all they know. Because if you actually Right.
Speaker 2:You know, it's like, okay. I'm gonna be up in the air and, like, the bathroom's small and I don't have that much access. There's not that much. There's some food, but it's not my my favorite food.
Speaker 1:Can't get Taco Bell delivered.
Speaker 2:Yeah. Exactly.
Speaker 9:Exactly. Right. Right.
Speaker 1:Do you think people oh, I I I wanna hear your reaction to Jordy's take that buying physical things is actually an experience So so I grew dichotomy between I just wanna spend money on experiences.
Speaker 2:Yes. So so I Growing up as a kid, I always I always loved brands and I would get obsessed with different things whether it was mountain biking or snowboarding or surfing or anything. And I would get fixated and obsessed with like a certain kind of surfboard. Right? As a kid, I wanted to surf mayhems but I couldn't really afford them.
Speaker 2:They were super expensive. And I worked at a surf shop. I could get these other boards for a lot cheaper, I'd always get them. Now as an adult, I only surf mayhems. And I always we grew up in this era.
Speaker 2:Our generation was told constantly, don't spend money on things, spend money on experiences. I never understood that because in my view, I was like, when I put on a jacket that I love and it's a thing and I wear it for the day, it's an incredible experience. Or if I take this surfboard that's incredible and I go out surfing with it, that's an experience in itself. So what do you what's the verdict on things? Can things make you happy?
Speaker 2:I've found that things have and continue to make me happy in my life.
Speaker 9:Yeah, totally. Because I think what you broke down there is if nobody were watching and nobody could see your surfboard, nobody could see your car, you would still buy them. And therefore, you're doing it for something that actually makes you happy rather than trying to signal for the attention of strangers. If you use a fancy sports car, for example, there are some people who own Ferraris because they love the artistic engineering of it. They love the line.
Speaker 9:They love the beauty of it. They love the growl. They love the engine. They work on it themselves. They wax it themselves.
Speaker 9:They love the art of owning it. They love the acceleration. They love driving it. That's one group. Another group just wants to get the attention of strangers.
Speaker 9:And they just rip it down the road, just trying to turn as many heads as they can. The former is going to get way more happiness out of it than anyone else, because they would still do it if nobody was watching. I think that's the framework. If nobody was watching how you lived, what would you spend your money on? And as you just described it, I know you would still buy that surfboard.
Speaker 9:So it's the right thing to do. I think the stuff versus experience tends to go astray too, because particularly in the social media world, a lot of experiences that we want to spend money on are literally just to impress other people. It's where should we go on summer vacation that's going to generate the best Instagram pic?
Speaker 2:Is John's thesis on Europe. He's like, I don't need to go to Europe. We have lakes oceans here. We have mountains here. Why would I Totally.
Speaker 2:Why would I leave the the great United States?
Speaker 9:You know what? My example of this is? Bali. I don't know if you've ever been to Bali.
Speaker 2:It's a dump. Sorry.
Speaker 9:It is a thank you. Thank you. I did my my my wife and I took our honeymoon to Bali and it's a dump.
Speaker 2:So so I went there on a on a on on multiple surf trips and I I only cared about the waves. But the funny thing is people go out there on surf trips and like the actual best surfing in Indonesia is really not in Bali. There's a handful of solid waves. The downside is there's actual trash in the water. You were just swimming this like water.
Speaker 2:Yes. Supposed like idyllic reef break
Speaker 1:Yeah. And you're just
Speaker 2:swimming through plastic bags. It's just absolutely disgusting on a half the island. The water is just like brown
Speaker 1:and dirty. Right. And people surf in America too.
Speaker 2:Yeah. And and it's like, do wanna say that you wanna take the picture and say, I'm I look look at me. I'm in Bali in my trash water.
Speaker 9:I I think that's it. I think that's no. I think I think Bali becomes a popular tourist destination because people love to say I went to Bali and post that on social media. The whole time I was there, my wife and I kept saying, we could have flown to Maui Yep. Which is a five hour flight.
Speaker 9:Instead, we flew twenty hours to Bali Yeah. And it's 97% worse.
Speaker 1:Yeah.
Speaker 9:And like, why would they but I I I think, honestly, we were attracted to it back in the day before we knew better because it sounded like a cool thing to do. Like, we could tell our friends we're going to Bali. We didn't know anything else other than it was a cool it sounded
Speaker 1:like good thing do.
Speaker 2:I don't wanna I don't wanna Dunk too on
Speaker 1:people
Speaker 2:of why it's not as great as the hype is that there's too many people there.
Speaker 1:Oh, sure.
Speaker 6:Hype sort
Speaker 2:of like created the problem. I think it is, you know, probably is as nice as Maui just just physically, but the challenge is, again, the infrastructure, the the traffic is number of times have almost died on a scooter in Bali too. I'm I'm surprised I'm here
Speaker 1:on podcast. Safety is real.
Speaker 9:Right. And so then, it's like, if if nobody could if nobody got to hear where you're going on vacation, you can't post it and you can't tell anyone else. Yes. Never would I wanna go to to Maui. I'd be like, let's just go to Santa Barbara or let's go to Maui or something like that.
Speaker 9:It's so much better and easier.
Speaker 2:Yeah. Totally.
Speaker 1:I wanna talk about, like, the the I mean, maybe the frame is, like, do people ask you more questions about or how do you see the job to be done by the book? Is it more about how to is it more about money or just happiness?
Speaker 9:It's definitely more about happiness. One of the big points in the book is there is no formula for how to do this. That's why when you have a formula like spend money on experiences, stuff, it tends not to work because I'm different than you are. People from different generations, different countries, different backgrounds totally want different things. I think it is immature to say that because I like spending my money on this, you should too.
Speaker 9:Or because I don't value this, you shouldn't either. It's an innocent mistake to make, and a lot of people make it in finance. The assumption that there is a right answer to earning, saving, spending, investing, when it's a very individualistic endeavor. The question you asked is, do people ask me for advice on this? The advice I have, and people don't like to hear this, is you need to figure it out for yourself.
Speaker 9:And so the book is about the psychology of envy and contentment and social aspiration, which tend to be universal. But there's nothing in this book that says you should spend your money like this. And so it's not called the science of spending money, because I don't think that exists at
Speaker 1:all. Yeah.
Speaker 2:What about what what do you what kind of things that you can spend money on have the worst value? Because when I talk about when you when you look at luxuries, like maybe staying at an Amman property, Amman is maybe 10 times as expensive as like the average Four Seasons. But I think it's it's probably like five times better in my opinion. Yeah. So so it's not it's not it's not per like a perfect trade, but but it it's at least if you only have a limited amount of vacation time a year and you wanna have the best possible experience, I think it's a it's a trade worth take you know, a trade worth making.
Speaker 2:But where where do you think maybe is on the opposite side of that? Things that are 10 times you mentioned food. Is there anything else?
Speaker 9:I'll tell you one little spending quirk that I have. This is slightly off topic, but I think it's when I grew up, I was a ski racer, and I always felt that everyone else on my team had better gear than I did. They had nicer skis, a nicer jacket, and all of that. And it drove me crazy. And so when my son, he's nine now, when he started skiing, to make up for the hole in my soul that I had when I was a kid, I was like, I'm going to buy you the best of everything.
Speaker 9:You're gonna get you're gonna get the nicest skis, the nicest everything. And the the quirk is he could care less. He could not care less about any of that, about having the nicest stuff. And so that would too was like a realization of like, that would have meant more to me than anything that I could have ever had, and he could not care less because everyone has their little spending quirks about them.
Speaker 2:Totally.
Speaker 1:Last question from me. I obviously, we're here. I wanna celebrate the book. I wanna promote this book. But I'd love to know about another book that you think serves as just something you enjoy, something you an author that you respect, maybe someone from the twentieth century or twenty first auth century author, someone who you've pulled influence from or just have respect, or just a book that you keep coming back to?
Speaker 9:Yeah. I mean, two nonfiction authors that I think are the greatest of modern times, they're both still living, still writing. One is Eric Larson, and the other is Robert Curson. They've both written some very famous books and some very successful books, and I think their ability to craft a sentence and tell a story is unparalleled. And even if I were to compare them of all the writers of the last two hundred years or so, I'd put them near the top.
Speaker 9:It's effortless to read their work. Never do you have to reread a paragraph and say, what are you trying to say here? You can just kind of glaze your eyes over the page and completely understand what they're saying. And what I love about what Eric Larson in particular does, he's a non fiction writer, writes books about World War II and all these different events, some of his chapters are half a page. Some of his books can have 200 chapters.
Speaker 9:They're each a page or two. Because he's so good at just being like, here's my point. I'm gonna make the point. Use an example. And boom, I'm done.
Speaker 9:I don't need to ramble for another 17 pages. I'm just gonna move on. And that, to me, is the key of good writing. It's like the person who can say the most in the fewest words wins. Yeah.
Speaker 9:And he's the best at that.
Speaker 1:Yeah. I read Devil in the White City a while maybe a decade ago. Fantastic book. Loved it.
Speaker 6:Yep. Very good.
Speaker 1:And and perfect example of that. Thank you so much for coming on the show.
Speaker 2:So far.
Speaker 1:Always a great time.
Speaker 2:Let's do it again soon. We're gonna this time, we're just gonna send a recurring slot
Speaker 1:Yes.
Speaker 2:Calendar. You can move it if you want. Yes. But we love love to
Speaker 1:It's always fun.
Speaker 2:Hit the hit the gong Yeah.
Speaker 1:Yeah. Yeah.
Speaker 2:For being number one in the business section on Amazon. Business decision making. Congrats. See you at number one, and I'm sure, many other, charts, to come.
Speaker 1:Thanks. Congratulations. As always. Talk next time. See you.
Speaker 1:Before our next guest joins, let me tell you about Adio. Customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next level. CRM. Started for free.
Speaker 2:Intelligence.
Speaker 1:And we have another Gong worthy guest. Let's bring in Misha from Reflection. How are you doing? Boom.
Speaker 10:Hey, guys. Good to see you again.
Speaker 1:Good to see you again.
Speaker 2:Good to see you. You've been busy raising billions.
Speaker 1:Jordy has this habit of telling people when they come on and they do a great interview, we'll see you soon, but you delivered. I think you're the first person that didn't roll the tape. Jordy probably said, we'll see you back here.
Speaker 2:We gotta we gotta roll it back. I bet I bet you called it. Knowing knowing the progress you've made and the progress you mill will make, I bet you'll be back
Speaker 1:Yes.
Speaker 2:On here with more news.
Speaker 1:But quickly, give us a reintroduction to the company and, of course, give us the news.
Speaker 10:A quick reintroduction to the company. Mhmm. I'm Misha. I'm the cofounder and CEO of Reflection. Together with Janus, we started the company about a year and a half ago, and we were formerly at DeepMind.
Speaker 10:Janus was one of the founding engineers at DeepMind, contributed to a lot of projects, like AlphaGo and Gemini, and recruited a team of about 60, I would say, researchers and engineers from Frontier Labs. And the charter of the company has opened up since we last spoke. We are we've raised this capital to really build out the frontier open intelligence based in America and exported to the rest of the world.
Speaker 2:So Before we get into
Speaker 10:folks of the company.
Speaker 2:Yeah. Before we get into the details, how much did you raise and who did you raise it from?
Speaker 10:We raised, in total of, $2,000,000,000 from a syndicate of investors. Oh, this this has a gong hit. From a
Speaker 7:syndicate of investors.
Speaker 1:Everyone's excited. 2,000,000,000 video.
Speaker 2:That's it.
Speaker 10:DST, 17 There
Speaker 1:we go.
Speaker 10:BD Capital, a bunch of existing investors as well, like Lightspeed, Sequoia, CRB, and so forth. So it it was quite, you know, we're we're very grateful for the support from, the syndicate.
Speaker 2:Okay. Get, get, even more kind of granular with what the focus is today. Yeah. I my read on it is open source is the focus. Is that
Speaker 1:Putting DeepSeek out of business. That's what
Speaker 2:I wanna hear. Finally.
Speaker 10:That's right. Yeah. Maybe the short of it is that right. It's US DeepSeek.
Speaker 1:Yes. Yes. It's what we want. Thank you.
Speaker 10:We can have Frontier open weight models
Speaker 2:Founder. That
Speaker 10:we train here Yes. In America and export to the rest of the world.
Speaker 1:I love it.
Speaker 7:So this
Speaker 10:is meant to be a global technology. We have a big presence in The UK. We have a team there. And so this is not just you know, even though it's American built, it's really built for the world, more broadly.
Speaker 1:Can you share anything that you think you'll be able to do to outfox DeepSeek and GPTOSS? We're having Dylan Patel from Semi Analysis come on next, and he's talking about, inference max. He's benchmarking. And I learned so much that, you know, it's not just the model. It's how you run it, the batching, the the the the different GPUs.
Speaker 1:Sometimes NVIDIA is better. Sometimes AMD is better. Like, how are you understanding? Because I imagine it's not enough to just say it's American Deepsake. It's gotta be better.
Speaker 1:So what's your plan to actually beat them?
Speaker 10:It's a really good question. And I I think it actually falls in two parts. First, actually, just having an American compliant, deep seek would go a really long way Yeah. Because a lot of enterprises are basically locked out from using those models because of various, legal, marketing, provenance, data provenance risks that are associated with, Chinese models. So, from a commercial standpoint, just having something that is as good but kind of compliant and built here, would be really powerful.
Speaker 10:But, of course, there is, you know, an aspect that you want to leapfrog and really be the leader in open intelligence across the world. And we do have some tricks up our up up our sleeve. Obviously
Speaker 1:share them. A lot.
Speaker 7:But I
Speaker 1:can't share them. Yeah. But I mean, hopefully, eventually, they'll be out. Yeah.
Speaker 10:Yeah. Yeah. But, you know, we have, some great work happening on reinforcement learning within the team. The other thing that, you know, the Chinese labs don't have access to is obviously, the same level of chips
Speaker 1:Yeah.
Speaker 10:That American companies have access to. And so what I think DeepSeek did really well is co designing their algorithms together with the chips they had access to. And so there's some really interesting stuff that you can do with codesigning algorithms with, frontier chips that aren't gonna be accessible to us as well.
Speaker 1:Interesting. Quickly, talk about the business model. I can imagine this turning into sort of like a Red Hat Linux play where, there's an open source model, but you're implementing it, working with enterprise, working with the government, and there's a contracting piece, a SaaS layer on top. Is that logical, or or are you thinking more like you you nail open source and then you can do a closed source model, sell API? You could go and own the whole token factory, the inference stack.
Speaker 1:Like, where do you see the business looking in a couple years?
Speaker 10:I think that the primary thing I need to set first is, how do you build the kind of open intelligence, open models, and the sets of tools around them for, you know, you partner with some inference providers. You, you know, set up, you know, make it easy to customize things. You make it easy to build agents out of these models and, ensure that that kind of spreads like wildfire.
Speaker 1:Mhmm.
Speaker 10:So I think that having an open sum sets of open models that are really fully permissive is really important. But the pull from a from you know, for this kind of, model really comes from large enterprise. That's when does it, you know, make sense for you to move from closed to hybrid to open models? It's really once you're a very big consumer of intelligence, and that's basically large enterprise sovereign and scaled up startups that are spending crazy amounts of money on closed APIs. Yeah.
Speaker 10:And so the way you kind of commercialize it, yeah, you want you want them to be building on top of your models, and there's all sorts of services and products that you can, build out on top of it to effectively solve their problems end to end. Because just providing an open rate model, is not enough. These things are very hard to customize. These things are very hard to build evaluations around. They're very hard to do anything useful with if you don't help a customer end to end.
Speaker 10:So I think that there's a lot of opportunity for commercialization, but you really need to be the core intelligence that others are building on before you can really be useful at the next layer as well.
Speaker 2:Why why do you think the dialogue around open source, open AI models went from, you know, up to a fever pitch, people demanding it, then they release it, and then now you don't hear it talked about really, at least online in the timeline much at all. Clearly, clearly and and and I would say, what what I'm trying to understand is, like, clearly there's massive demand for open source models. But I have a feeling that developers would like to be leveraging the technology of a company like Reflection who's wholly dedicated to open source and and and dedicated to commit, you know, and and really committed to it. Whereas, it's hard to you know, we we had Sam on today. We've had a bunch of people on from OpenAI.
Speaker 2:It's hard it it'd be hard for anyone at OpenAI to say, like, open sources are top three priority. Right? Maybe it's in the top five.
Speaker 10:Exactly. Exactly. It's it's really hard for you to both be the world's open model and open intelligence provider, and it for for it to be the number two, number three, or number five thing, right, that your company is focused on. And the reason is that what what matters is capability. You want highly capable open models.
Speaker 10:Mhmm. And the only way to get that is if your commercial incentives are fully aligned with OpenIntelligence as the first and primary thing that you're doing. Now when you release something like this, you can't just release the model. I mean, I think that that's one part of it. And then, you know, inference providers can take that model and optimize their stack around it.
Speaker 10:But these models are so big and hard to do anything with unless you are an expert that you really need to help with that as well.
Speaker 1:The models seem to be exhibiting spiky intelligence. Where are open source models particularly best or demanded to be best? Like, the the customers of open of of open models, what do they wanna do that, might not be as relevant in the closed source ecosystem? I could imagine that agentic payments is maybe not the hottest thing in open source models or or IMO level math that might be maybe that's really important in open source, but what what is unique about the customer of the open source model? What do they want it to be best at?
Speaker 10:Yeah. There there are basically two things that as customer, you are looking at looking to do and achieve when you're when you adopt an open model. The first thing is suppose you have good performance on something Mhmm. From a closed model, but it's ludicrously expensive, which is very common. Then you wanna drive down, right, the cost while keeping the performance.
Speaker 10:So you wanna customize the model for those tasks. Mhmm. The other way around is that, yeah, you have some finicky data distribution that was not represented when the closed model was trained, and the closed model is spiky, but not on the data that you need it to be good at. Sure. And so then you wanna drive a performance on that.
Speaker 10:And so then you want to post train and customize for that. So it's really you're customizing for driving extra performance Mhmm. Or you're customizing for driving down the cost, but it's really important to have control over both.
Speaker 1:Yeah. That makes a ton of sense. Well, thank you so much for coming on the show. Congratulations on the huge raise. I'm sure we'll see you back here in a couple months.
Speaker 2:I I I'm so curious. I imagine you guys are thinking about how you can create your own deep seek moment. So Yeah. Looking forward to it. The time is right, come back on.
Speaker 2:We'll pump it. Play that eagle sound.
Speaker 1:Thank you. Have a great rest
Speaker 2:of day.
Speaker 10:Thank you so much for having me.
Speaker 2:Of course. Great to catch up. Talk to you soon. Congrats to the team.
Speaker 1:How did you sleep last night? I woke up way too early. I woke up and I woke up four
Speaker 2:in unable of a three
Speaker 1:Oh, no. This is so bad.
Speaker 2:Have not gone You're you're still gonna be back to back with with a 90. What what you got? I got a 79.
Speaker 1:I got a 69. You beat me.
Speaker 2:There we go.
Speaker 1:You beat me almost every day this week or maybe the last two or three.
Speaker 2:But I got I got So
Speaker 1:you got your three peat. You got your three peat.
Speaker 2:I got cocky yesterday.
Speaker 1:Play play some side effects. Do something. Me Let also tell you about public.com investing for those that take it seriously. They got multi asset investing, industry leading yields, they're trusted by millions. Please take it seriously.
Speaker 1:Did you see that, Marginal Revolution is calling for Vitalik Buterin, the cofounder of Ethereum, to win the Nobel Prize in economics. Really? I think that'd be very, very cool. It's a wildcard. Tyler Cowen's mentioned it a few times that Vitalik would be kind of the outside the box pick.
Speaker 1:But in terms of advancing economic theory, designing Ethereum, I mean, it's it'd be remarkable. And and he also advocates for Robin Hanson, the father of prediction markets, to win the Nobel Prize. I don't know. We'll see. It'll be it'll be fun to track the Super Bowl for economics grads, I guess.
Speaker 1:I want your take on this. Luke Kawa is quoting the Pepsi CEO. I think fiber will be the next protein. Consumers are starting to understand that fiber is a benefit that they need. We we we put creatine in everything.
Speaker 1:We put protein in everything. Is fiber the next thing?
Speaker 2:We put caffeine in everything?
Speaker 1:I mean, why not just add them in?
Speaker 2:So the thing here is that Fibergumines? Is that a thing? Polypop already, like, leaned heavily into fiber.
Speaker 1:Okay. So it might already be happening. Maybe the Pepsi CEO is a
Speaker 2:little behind the also times of He be did Pepsi buy Olipop's competitor?
Speaker 1:I don't know. I mean, Carlos Scanlon in the in the replies says, didn't we already do this with the rise and fall of Fiber One? So I don't know. Maybe maybe it's too late.
Speaker 2:PepsiCo acquired Poppy. I think Poppy includes fiber.
Speaker 1:Yes. Oh, I have a reaction for
Speaker 2:You do. Wanna keep you wanna keep going on that? You have anything else? No.
Speaker 1:Okay. I have a reaction to Rune who put us in the truth zone. So on a previous show, we said that we said incorrectly that during the AlphaGo game between Lisadol and and DeepMind, AlphaGo dropped the thirty seventh move, move 37, that iconic moment that kind of scrambled Lisadol's brain. We told the story such that Move 37 happened. Lee Sedol was so wracked by it that he stepped outside to smoke a cigarette.
Speaker 1:Apparently, that's not true. Apparently, he smoked a cigarette before Move 37. And so it's just more cinematic to tell it that way. I think it's I think it's actually maybe even more dramatic because potentially, Move 37 was so crazy that he couldn't even bring himself to smoke a cigarette. Do you think that's what happened?
Speaker 2:Maybe.
Speaker 1:No. I don't know. But thank you, Rune, for doing the fact check. Obviously, you are correct. You know
Speaker 2:True sound.
Speaker 1:Story more, and we always appreciate the true sound. Well, we have our next guest, Dylan Patel from semi analysis with some massive news. Dylan, how are you doing? That is a cinematic shot.
Speaker 2:It is.
Speaker 1:Is this AI or something?
Speaker 5:What are we?
Speaker 2:That's called aura. You're aura farming.
Speaker 7:I'm literally in America, bro.
Speaker 1:That's amazing.
Speaker 7:Out of the back of the truck.
Speaker 1:You're the bald eagle. You're the bald eagle. He's not a China hawk. He's a bald eagle.
Speaker 2:This is proof of work. You're you're out. You're out the cluster maxing. Truck bed.
Speaker 1:You're inference maxing. You're podcast maxing. Thank you so much for taking the time. Give us your breakdown quickly on, on the launch today. Inference Max was launched yesterday.
Speaker 1:I went, on your Zoom call at 10:30. I was laying in my bed listening to you. It was very interesting, but I'd love to hear you kinda break it down first.
Speaker 2:Wait. First, Jack wants a, can we get a shoot. Are you do you have cowboy boots on or or what
Speaker 1:We need the full fit check.
Speaker 2:The full fit
Speaker 1:check. The full fit check.
Speaker 2:Oh, okay. Okay. Good. Good. But cowboy boots cowboy boots next time.
Speaker 1:Okay. Anyway, sorry. Please give us the give us the high level.
Speaker 7:So I'm gonna this is a fire
Speaker 1:Okay.
Speaker 7:Station behind me, by the way, just so you you know. But in Tennessee. Anyways, yeah, yesterday we launched inference max, which is a humongous release for us. It is running it is a benchmark that's doing cost per million tokens Mhmm. And how many, you know, cost per tokens per megawatt across all major AI infrastructure, AMD, NVIDIA, all the newest GPUs.
Speaker 7:And and and on all the latest models, GPT open source, LAMA, DeepSeq, etcetera. Right? And so the reason why this is so important is, you know, throughout the industry, people are always like, oh, our chips are great at cost this way. Our chips are more efficient that way. Well, it turns out to actually measure inference, you have a variety of different metrics.
Speaker 7:It can always just cherry pick something, right? It's some vendor saying some BS. And so there ends up being a cherry picking. And then it's also on some super hyper optimized software stack that's not real, Right? It works for that one specific cherry pick use case.
Speaker 7:But guess what? When I'm running inference at a major company, sometimes I have big requests, sometimes I have small requests, sometimes I'm outputting a ton, sometimes it's like an agentic workflow, sometimes it's this model. Sometimes it's that model. So what really matters is the real software that people are running and it's on, you know, the latest drivers, the latest open source, you know, PyTorch version, latest VLLM, latest SGLANK. All these things matter because at the end of the day, software changes every day, performance changes every day, models change all the time.
Speaker 7:Right? And and to actually get, hey, there's trillions of dollars of infrastructure investments being made over the next few years. How do you actually measure what's the best hardware? What's the what's the most efficient hardware? What's it cost?
Speaker 7:And that's that's what we're aiming to do with InferenceMax. And so we're supported by NVIDIA, AMD, Microsoft, OpenAI, Oracle, CoreWeave, Dell, Super Micro, HPE, and all sorts of vendors that I I can't remember off the top of my head.
Speaker 1:Well, you're not making any money on this. Right? It's, it's all, open source, but there was a ton of capital that came together, a ton of people that did put up money. What's the scale and the scope of the project?
Speaker 7:Yeah. So semi analysis has multiple engineers that I'm paying full time. So I'm I'm losing, like, you know Yeah. A million dollars a year on this or a bit more, obviously, because engineers are expensive. Yeah.
Speaker 7:But on top of that, it's it's you know, the the vendors are contributing and the cloud companies are contributing tens of millions of dollars of GPUs. No. And there's no
Speaker 1:Congratulations. That's that's fantastic news.
Speaker 7:So so, you know, the the the thing is I'm I'm not necessarily, like, sure how I'm gonna make money on it, but I am more of farming as I am with this background. Right? Is, you know, what's what what what you know, how do we deploy AI efficiently across And, the you know, perhaps by aura farming in this way, we'll figure out how to you know, people will buy our other stuff, right, is the hope. You know, not exactly sure, but this needed to exist and there was no way for it to exist unless we did it.
Speaker 2:Yeah. What's what's your life been like the last few weeks? How often are billionaires calling you, asking you specifically for financial advice saying, hey. I'm I'm thinking of putting, you know, a billion into this one.
Speaker 1:What do you think? Deal.
Speaker 2:Could I do it? Should I do you find yourself having to push back and say,
Speaker 1:like, can't actually trillion dollars of debt to flow into this.
Speaker 2:Yeah.
Speaker 1:What do you think?
Speaker 7:You know, the the the crazy thing over the last few weeks is that, you know, companies that you would have never expected to need debt are in the debt markets. Right? You mentioned debt. You know, people like Meta and Oracle, you know, who three years ago, you had been like, these are the most profitable companies on the planet. Well, they're in the market for debt because they're they're building.
Speaker 1:Yep.
Speaker 7:As far as, like, how often are people in the DMs or calling me, you know, that's what the company does. We provide services around this. So, you know, I'd like to say the company and business is taking off like a rocket. And so, you know, the whole point is inference max aura will increase the aura of, like, other people, like, you know, you know, doing this. But I will say it's just like we've hit terminal velocity.
Speaker 7:Right? It feels like we're building a motherfucking, like like, Matrioshka brain. You know? Like, I don't I don't know what people are trying
Speaker 1:to invest in themselves. God. That's great. What's the biggest debunk that's come out of the results of inference, Max? Is there some narrative out there on the timeline or in the AI community that you feel like you've kind of you're able with this data to turn things around?
Speaker 7:Yeah. So, I mean, there's there's tons of people like, oh, AMD's best. Oh, Nvidia's the best. Oh, this is better. That's better.
Speaker 7:It turns out like everyone's statements are sort of like, you know, there's gotta be a lot more nuance to it. And so my favorite thing is yesterday, I saw Twitter war between two accounts of, like, 5,000 followers each. So these weren't, like, small accounts per se.
Speaker 9:Yeah. And they
Speaker 7:were going back and forth posting data from inference max saying, no. You're wrong. You're cherry picking. No. You're wrong.
Speaker 7:You're you're cherry picking. And it's like, the reality is it's a little bit more complicated and they're debunking each other. Yeah. But I think what's relevant is that, you know, NVIDIA is not the only game in town. A lot of people thought that they were.
Speaker 7:You know, between the OpenAI AMD deal that happened and then the results that we've shown. And we've been working with AMD and NVIDIA on this for many, many months. It's clear OpenAI. I mean, NVIDIA is definitely ahead. Right?
Speaker 7:Yeah. But there's certain use cases where AMD is better. Right? If you're running GPT open source, that model's exploding in usage, then, hey, guess what? Actually AMD may be a better hardware for on a dollar basis.
Speaker 7:It's not better on a Watts basis. And, you know, those are the two things. Right? So I maybe I'm in test is, you know, there's a lot of Watts here that we could put on AI infra. Yeah.
Speaker 7:But it's it's it's a challenging sort of, you know, thing is sometimes your capital constraints, sometimes your power constraint. And what you should do may maybe you do actually think, you know, maybe you should deploy AMD. Right? Maybe you should deploy NVIDIA. The default is NVIDIA.
Speaker 7:But actually in many cases, it makes sense and the software works. The open source software works. Yep. It's not buggy completely. It is if you're training and doing other things.
Speaker 7:But if you're running inference on specific models, it works.
Speaker 2:What's the biggest risk to the overall build out? Is it energy capacity? Like, what what's what's top of mind for you over the next twelve to twenty four months? All these deals have been announced, but a lot of people are asking where's the energy gonna come from once you once you start talking about, you know, gigawatt scale clusters.
Speaker 7:Yeah. So it's it's it's not even it's not even, you know, like, you've got all of these, like, dudes in suits like you, you know, in in their little cushy little offices signing these big checks of of thick money on bank accounts. But the reality is is, like, hey. I can buy the GPUs. I can get them made and import them from overseas.
Speaker 7:I can buy, you know, like, the sheet metal. I can buy all these different things. But you know what I you can't do? There's not enough motherfuckers in cowboy boots in Middle America deploying and building these things. Right?
Speaker 7:Like, it turns out electricians wages are skyrocketing. Right? It turns out like plumbing wages are skyrocketing because data centers need liquid cooling. And so like how I think that's the biggest risk is, you know, where is the skilled labor gonna come from in in the West? Interesting.
Speaker 7:Because the West has not built at this scale before.
Speaker 1:Yeah. Chat says that regarding the chat says you're the only 10 I see. So he's having fun that you're out in Tennessee. Is there any, is there, what does the long term vision look like? Is it relevant to think about adding TPU, Grok, Cerberus, other system?
Speaker 1:Like like, what is the shape of the of the road map? Are you sharing that yet? Or how can or is that even relevant?
Speaker 7:Yeah. InferenceMax is amazing because it runs every single day on the latest software. But right now we've only got tens of millions of dollars of GPUs. Yeah. You know, we gotta we gotta hit the the 100,000,000 number to actually get everything.
Speaker 7:Right? So so what that means is more models are being supported and we we we got that in the works. We've got adding TPUs and Trainium. Mhmm. This is a real big difficult engineering effort.
Speaker 7:Google and Amazon are excited. Awesome. You know, we'll see how long it takes us, but it is a difficult thing. But, you know, they've gotta put up the capacity. We've gotta get the capacity somehow and add those those chips.
Speaker 7:And then if you do that, 99% of the flops are around the world. Maybe we add Huawei. Maybe we add Grok or Cerebras. It's really a lot of engineering is gonna be required. And so that's all on the roadmap is to add more hardware.
Speaker 7:Quality. It turns out there's a lot of innovations that people are doing on model inference beyond just quantization. Right? You can do eight bit or you can do four bit. But let's say everyone's doing eight bit.
Speaker 7:You can still do certain innovations that make performance better, but quality worse. And so there's these tricks that people are implementing that, you know, actually, it's it's completely unknown to people. And so, you know, measuring quality as well is really, really important. And and and, you know, continuing to run it every single day in an automated basis
Speaker 1:Yeah.
Speaker 7:And continuing to get more people pushed behind it so we can get, you know, TPUs, Trainiums, GPUs on as many models as possible with quality as well measured.
Speaker 1:Well, that's fantastic. Jordy? One more question
Speaker 2:from my side. It seems like the debate is heating up around depreciation schedules for GPUs. Like, what what's your what's your framework on on that front? A lot you know, Neo Cloud wants to say five to six years, but maybe that's not realistic. How how are you thinking about it?
Speaker 7:So every company major company in the world, the Googles, Microsofts, Amazons, etcetera, do six years. Right? That is the industry standard. But that may also be erroneous. And the reason why it may be erroneous is because the reason it's sick it got pushed up from, you know, four or three years to six years over the last decade was CPU storage, you know, that sort of stuff was not advancing that fast.
Speaker 7:And now we've got AI, we've got it advancing like a rocket ship, and it's faster than ever. And so the question is, there's two points on useful life. Right? One is, does the thing still work in six years? And the other one is, is it even useful to run it in six years?
Speaker 4:Mhmm.
Speaker 7:Right? And they're two very, very different questions. You know, for will it still run-in six years? The answer is most likely, but these things are running super fast. GPUs, GPUs, etcetera are way less reliable than CPUs and memory.
Speaker 7:So it's a very high likelihood that may not work in six years. For a CPU servers, they'll actually run like ten years. It's fine. But may not last the full six years, especially the new ones that are super hot, liquid cooled, etcetera. Right?
Speaker 7:A lot more complexity, a lot more likelihood it could break down within the six years. The other side is economically useful. Well, if NVIDIA is releasing a new GPU that ends its best for 50% more money every year and a half, well, then in six years, you're at, like, 20 x improvement in performance. Right? And it maybe only costs, like, three times more.
Speaker 7:So so you're like, okay. Well, yes. The old GPU still even if it still works, is it even useful or should I throw it out and in with that power, should I feed the new thing? Right? And so that's the big question is, you know, is it useful to keep using the newest GPU or the the old GPU or should you buy the new thing?
Speaker 7:You know, as Jensen says, the more you buy, the more you save. Right? And so maybe maybe his argument is correct. Right?
Speaker 2:Yeah. And and does that present a real risk? You know, a lot of people are levering up and and raising, you know, debt and and against GPUs that and and assuming that that five, six year useful life, how how big of a risk is that is what I'm trying to understand.
Speaker 7:It depends entirely on the company. Right? So for example, Oracle's raising debt and they're building out Stargate and all these things. Right? You know, they've got this $300,000,000,000 deal with OpenAI.
Speaker 7:Their biggest risk is not that, hey, you know, our depreciation schedule is six years and OpenAI's contracts are five years. Right? They still make money if they they don't they aren't able to last year. Right? Because they've got the contract with OpenAI.
Speaker 7:The real challenge is where the hell is OpenAI gonna pay $300,000,000,000? Right? You know, I'm a believer. I'm a believer. I think you guys are believers, but a lot of people aren't.
Speaker 7:For other folks, it's like, hey, I'm out here deploying GPUs. I'm just putting them out there. Right? Hey, anyone wanna rent them? Please rent them.
Speaker 7:And maybe only sign a six month contract. Maybe sign a three year contract. That's where it gets more risky because at the end of the term, I haven't paid off my GPUs. I haven't paid off my debt. Where where am I going to sell it?
Speaker 7:Does the price fall? Where does the price end up being in that after after a year? And so we saw that with Hopper GPUs. Right? The people who signed the long term deals initially weren't making as much money.
Speaker 7:Because they were selling them at $2, whereas, you know, other people were out there like, oh, yeah. Six months, I'll sell it to you for $3. Yeah. That was amazing money for that first six months. And then on renewals, like, oh, shit.
Speaker 7:It's only $2.50. And then on renewal, it's like, wait. Now I'm selling it for less than $2. And who knows as NVIDIA's Blackwell comes out, as Ruben comes out, as AMD's new chips come out, as Google starts selling TPUs, all these things keep driving down the the cost performance and how many tokens you can get per dollar and per watt. So then all of a sudden, is a hopper still worth $2?
Speaker 7:Is it worth a dollar 50? Is it worth a dollar? For the people that are locked into a five year contract, that's one thing. For the people who are, you know, just go over and don't have a long term contract, it's very possible that, you know, the GPU works, but it's not able to produce economic value worth what you actually put into it. So that's the big risk.
Speaker 2:That makes sense. Oracle sold off earlier this week based on reporting from the information. Any what what was your immediate reaction to that piece? There was a lot of pushback on it.
Speaker 7:Yeah. So they said that Oracle's margins were low. Oracle's margins are not that low. They're higher than that. At that exact point in time, their reporting is accurate.
Speaker 7:Right? But that what they what they deduced based on the reporting, what the numbers they saw were not accurate. Right? Which is that Oracle's margins are low for the deals they've signed. That's not accurate.
Speaker 7:Right? What's accurate is that NVIDIA's G v 200 N v L 72 has a lot of issues. Right? They're mostly being sold and and have been sold, but there are a lot of issues. It's it can be unreliable because of how complicated of a of a thing it is.
Speaker 7:So so much power, liquid cooling, it's got the back plane. So there's a lot of difficulties with the hardware because of how complicated and how fast it is that are being solved slash solved already. The other one is, hey, Oracle has to rent these massive data centers before they fill them up with GPS. So Oracle's paying all this money for these data centers for Stargate, right, like in Abilene, Texas that aren't necessarily generating revenue yet. And when your revenue goes from like this to rocket ship up because you've got Stargate, you know, what happens is you've got all this cost right before the revenue comes in.
Speaker 7:Right? You bought the GPUs. You're trying to figure out how to make them to work, you know, because they're a little bit unreliable. You're replacing things. You're building out the data center.
Speaker 7:You're renting the data center. All these costs are hitting their books. Right? But that doesn't necessarily mean that they can rent them. I might get be getting kicked out.
Speaker 1:You're all good. This has been a pleasure. Dylan, next time you're in Los Angeles, we'd love to have you at the TVP And Ultra Dome in studio. Everyone's a huge fan here. Congratulations, and thank you so much for stopping by.
Speaker 2:Yeah. Massive launch. Excited to see how it plays out.
Speaker 7:Alright. See you, folks.
Speaker 1:See you. Thank you so much for having day.
Speaker 2:We got to get Dylan. Nick, reach out to Dylan. Get his shoe size. We'll get some we'll get him some cowboy boots.
Speaker 1:That sounds great.
Speaker 2:I love that. Good use out there.
Speaker 1:Tyler, you got something on your mind?
Speaker 3:There's some big news going on.
Speaker 1:Oh, What it?
Speaker 3:So so one is about thirty minutes ago, Trump put out a a truth. He said a 100% tariffs on China starting November 1. What? So since then, I think broadly today, 250,000,000,000 has been wiped out from crypto.
Speaker 2:Okay. Yeah. Bitcoin is down 5%.
Speaker 1:Oh, no. Yeah. We have to check-in our on our retail trader. Oh. Our retail trader in residence.
Speaker 3:Another white pill, though. White pill. Demis just said they did last month, did 1.3 quadrillion tokens Woo. On Gemini.
Speaker 1:Found it. Congratulations.
Speaker 2:That'll that'll fix the global economy. That'll fix the Congratulations. Absolutely wild. Our retail trader in residence is probably put a hole through the wall by now. Thankfully, the markets are closed for the week, but my portfolio on public is looking looking rough.
Speaker 1:It's a rough day, but we're happy to see that.
Speaker 2:Hey. It's a rough day, but Monday will probably be rougher.
Speaker 1:Maybe. We'll see. It might might might be a white suit day. Everything could get resolved over the weekend. You never know.
Speaker 2:Figure out what our Couple truths. Bear market suits are. Maybe maybe suits that are like actually look like bear kind of like fur.
Speaker 1:Oh, fur suits. That would be suit. Yeah. You know, in Hollywood, they have there's there's a certain synthetic tears. It's like propylene glycol or something.
Speaker 1:I that that's what in vapes. That's not it. But there's some sort of eye dropper that you can put in your eye. They they put in eyes of actors when they have to cry. And so maybe we should just be applying those the entire show so that we're just crying constantly.
Speaker 1:Well, in some much better news, of course, if you wanna get away from all the chaos, you can get you can book a wander. You can find your happy place.
Speaker 2:That's right.
Speaker 1:Book a wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning, twenty four seven concierge service. It's a vacation home, but better.
Speaker 2:Joey in the chat says, Fartcoin is down 73%.
Speaker 1:I don't know I don't know why. No. No. That's gotta be a joke. That's impossible.
Speaker 2:I looked it up. I I mean, I'm looking at the chart right now. Says
Speaker 1:60 Today?
Speaker 2:And so maybe it's rallied a bit.
Speaker 1:Today?
Speaker 2:Yeah. That's I mean, I guess
Speaker 1:I can't believe that someone took household name and tech is actually down that much. That's absolutely crazy. Well, in in in some more serious news, we have a new partner at TBPN. We're partnered with Gemini, Google AI Studio, the fastest way from prompt to production with Gemini. AI powered coding app.
Speaker 1:It's ease of use. It's built for everyone. You've been a power user. We're friends with Logan. We're very
Speaker 2:Logan is a dear friend of the show and works around the clock to make this
Speaker 1:product work. Fantastic job over there. Supercharge your creativity and productivity. Chat to start writing, planning, learning, and more with Google AI. So you'll be hearing more about Gemini in the coming weeks, in the coming shows.
Speaker 2:Not tomorrow because tomorrow is a Saturday.
Speaker 1:Worst But day
Speaker 2:I can't wait for Monday, John.
Speaker 1:Yeah. What else? Oh, Sheel had a take on Sora, which is interesting. He says, he personally got bored of Sora after a day, but a surprising number of my friends are still posting 10 plus videos a day. Maybe this AI slop I thing has have been I haven't been consuming a lot of Sora.
Speaker 1:I've been generating a lot, but I haven't been posting a lot. But I started posting. And once I got over that threshold of, yeah, I'm just gonna put my Cameo. Yep. I'm just gonna post.
Speaker 1:It's gonna be fun. I think I'll be experimenting with the actual feed. I only have 20 followers now, but I think that there is some fun creative stuff that you can do there. It's definitely a different tool to pull off the shelf than the video camera or the text post on on X or the email. But I've been having fun, and I think I will.
Speaker 2:Apparently, I didn't catch this when you said it, Tyler. The 100% tariff on China is on top of all current tariffs.
Speaker 1:Oh, wait. Wasn't it already at a 100% or something like that? Oh, we had Ryan Peterson on a few times and and the tariffs were like up and down and up
Speaker 7:and down.
Speaker 2:To the Ultra Dome, Ryan.
Speaker 1:Seriously, gotta check-in with Ryan. Sure.
Speaker 2:Get back on. Buco Capital says, I legitimately cannot believe we are doing this again.
Speaker 1:Tremendous nukes have hit the cryptocurrency charts, says Joey in the chat. Did you read that? It's very funny. Thank you, Joey, for your service as the resident crypto bro. One last note, you know what hasn't changed with a tariff?
Speaker 1:Of home advertising in America, baby. Out adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Do not Only ad
Speaker 2:tariffing our billboards.
Speaker 1:Do not tariff our That is my You are on my list. Yeah. Single issue voter on billboards,
Speaker 2:Liquidity says there won't be a second date, but at least she now understands why the AI circle jerk deals are quickly becoming a major systemic risk.
Speaker 1:Wait. Wait. Can we pull up this picture of this eight year old building in Kazakhstan from off-site? This is this is a this post made me laugh out loud. It's page 70.
Speaker 1:Do you see this, Jordy? Look at this picture of this eight year old building and At the bar? And and off-site and off-site that quote president says, that MF on Roblox, left hand on AWSD. Because if you look at his hand, it's
Speaker 2:like Oh.
Speaker 1:Caught caught Wow. Gaming handed for sure. Very funny post. But that would have been me at eight gaming. And, you know, who knows?
Speaker 1:If he's on Roblox now, maybe he'll build a Roblox game. Maybe he'll build a startup. But, yes, eight years old is might be a little bit young to take a company public unless you're a 23 year old and then apparently, can spack a nuclear company. Be fun. Anything else you wanna cover?
Speaker 1:Any other breaking news before we log off for the weekend?
Speaker 2:No. I'm gonna miss being here at this table with these mics Yes. This team
Speaker 1:Oh, we miss with
Speaker 2:this chat.
Speaker 1:We miss Dave Portnoy's mansion. He Dave Portnoy made the mansion section in The Wall Street Journal. I'll read you one line of it, because it is iconic. Dave Portnoy adds record breaking home to his $95,000,000 property portfolio. Inside the Barstool Sports founder's collection of luxury houses, they break down all of his different houses.
Speaker 1:They're all beautiful. But, this is what made me laugh out loud because it's printed in The Wall Street Journal in the mansion section. Barstool Sports founder Dave Portnoy has been dogged by champagne problems at his Miami mansion from construction delays to losing his coffee because the waterfront home is too big. Last year, a more serious issue emerged, and we've talked to some founders about this, mold. And he as he often does, Portnoy turned to social media.
Speaker 1:Quote, I need the best mold company in the history of Miami to come look at my moldy ass house. Any wrecks? He posted on x in August 2024. I just thought that was hilarious that he, that one of his x posts made it into The Wall Street Journal. So you can post your way onto a private plane.
Speaker 1:You can post your way onto The Wall Street Journal. You can post your way on the show. So enjoy the weekend
Speaker 2:and is right.
Speaker 1:Locked in on the timeline.
Speaker 2:Sattrini says, can we change the channel? I've seen this movie before. Uh-oh. Our retail trader just posted his portfolio. He's down 12% on the day.
Speaker 2:He says, I'm so cooked.
Speaker 1:I'm so cooked.
Speaker 2:You're cooked and chopped.
Speaker 1:Cooked and chopped.
Speaker 2:But we love Get the Dylan camp. Get the Dylan camp.
Speaker 1:No. He doesn't wanna be on TV. Thank you so much for tuning in.
Speaker 2:We're gonna set up. We're working on setting up a retail corner Yes. Here at TVP. About it. We're gonna We're give
Speaker 1:We're gonna get him on.
Speaker 2:We're gonna give Dylan not Dylan Abruscada, the other Dylan. We're gonna give him a public account Yes. Some funds. And he'll just he'll just trade.
Speaker 1:This is just crazy enough
Speaker 2:to He won't be cooked or chopped.
Speaker 1:Thank you everyone for tuning in. We will see you on Monday. Have a great
Speaker 2:Have a great weekend, folks. Bye. Bye.