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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 October 16. It's Thursday 2025. We are live from the TBPN UltraDome, the Temple Of Technology, the
Speaker 2:Fortress Fortress Of finance.
Speaker 1:The capital of capital. Big news. We covered it a little bit yesterday, but big news out of
Speaker 2:Sometimes when something just hits the timeline and we're live and we're doing the show It's process. It's hard to process
Speaker 1:For sure.
Speaker 2:How significant something is.
Speaker 1:For sure. And I mean, what a funny what a funny turn of events in the meantime while OpenAI is fighting for their life in the timeline against allegations of moving into adult content. Google is saying, hey, we cured cancer. We've done it. We cured cancer.
Speaker 2:Way? Western lab.
Speaker 1:Yeah. Yes. Exactly. They didn't actually cure cancer, but they made some progress and it's definitely updating some people on what AI can do in bio, what AI can do in cancer research generally. It's very complex.
Speaker 1:I'm not an expert in bio or or any of this stuff really. So I needed to use a Call of Duty metaphor. And so I read the piece. It comes from Sundar Pichai. He says, time is money, save both.
Speaker 1:Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ram.com. Just kidding. He said, an exciting milestone for AI and science are c two s scale 27B foundation model built with Yale and based on Gamma generated a novel hypothesis about cancer cellular behavior, which scientists experimentally validated in living cells. Now, that is not in people.
Speaker 1:It's not in mice, it's not in rats, it's just in cells. And this is just one potential link between a drug and cancer cells, but it's very exciting, very promising. And so, I was trying to figure out the appropriate analogy and what I landed on was, of course, Call of Duty. And so in Call of Duty, there are a bunch of players on the map. Some of them are on your team, some of them are on the other Exactly.
Speaker 1:Opposing
Speaker 3:Standby.
Speaker 1:The opposing team, you can think of them as cancer cells. When cells develop cancer, when tumors exist, they are on the enemy team. You've got to hunt them down, you've to find them. The people that are hunting them down, those are the killer T cells, that's your immune system. Ideally, you want all the tumors, all the cancer cells to be really obvious to your immune system.
Speaker 1:So your immune system can go around and get a bunch of headshots, double kills,
Speaker 2:Three three sixteen endoscopes.
Speaker 1:Of course, of course. But it's hard because a lot of these cancer cells, lot of these tumors, they exist in what Google puts them as like they it says they they it says that they're cold tumors. Basically, they're invisible to the body's immune system. You want to turn them hot. You want them to light up on the mini map.
Speaker 1:How do you do that? Got to pop the UAV. And that's exactly how this works. So this particular C2S, which is cell to sentence model, ran a bunch of different correlations between different drugs and their effect on cells and found a drug that does just that. It's a conditional amplifier, meaning that it boosts the immune signal and it basically turns these cold tumors hot.
Speaker 1:And now, this is not new. There's a lot of drugs that basically act as UAVs for the immune system that allow the immune system to target cancerous cells or tumors more effectively. But why this is special, why everyone's obsessed with this, why everyone's whitepelling so hard is because they use AI to do this. And, of course, this was in conjunction with scientists and then it was verified in a lab setting, in real in the real world setting, but it's still very exciting. Now, just to put it in concept in perspective, Google found one drug that was correlated with this effect, which is great.
Speaker 1:There's something like 600 maybe FDA approved drug cancer indication pairs in The U. S. Alone, and only about five percent of drugs that even get submitted to the FDA actually get approved. And so the total number of, like, discoveries like this, if you just think about it as a drug that helps fight cancer or helps identify cancer, if you think about the pool of those, humans have discovered probably tens of thousands, maybe hundreds of thousands of those, narrowed those down, sent those to the FDA. The FDA has approved maybe 5% of those, and we get 600 that are on the market.
Speaker 1:And then, of course, some of those are more effective than others. Some of them have less severe side effects, and so they become more popular. Some of them are just good at advertising, probably, so or good at, you know, the cost benefit ratio. So they're very effective to a lot of people, it's really cheap. That probably is a blockbuster cancer drug.
Speaker 1:Something that's really, really, really effective but only in a very odd population. It's really expensive, probably less of a blockbuster cancer drug. But what matters here is the slope more than the y intercept. And so right now, if you just look at the scoreboard in your Call of Duty world, AI got one point on the board. And humanity has like tens of thousands of these discoveries, basically.
Speaker 1:If you that's a very rough estimate, but it's like it's a lot. We've discovered a lot of
Speaker 2:candidates. And this is meaningful for one very real reason, which is that people have been desperately hoping Yes. That AI systems would be able to discover novel cures for cancer. Right? Yeah.
Speaker 2:This has been something that if you look at anybody at any of the big labs Yep. Over the years, they probably have at least one sound bite Yep. Where they're talking about.
Speaker 1:Maybe it'll potential.
Speaker 2:Yep. My question is, does does OpenAI really have time to even compete on this front? Right? It's very easy for Google with hundreds of billions of dollars of revenue Yep. To dedicate resources to projects like this.
Speaker 2:Whereas, this doesn't feel core to OpenAI's, like, even roadmap. Right? So this is but but but what ends up being funny is that the the timing. Right? Within a basically a twenty four hour period, you get the erotica announcement fast followed by this.
Speaker 2:Yeah. And well played by Google.
Speaker 1:Yeah. I I don't think that Sender had this in his back pocket and was waiting to to drop it.
Speaker 2:I'm not implying that either, but I'm I'm sure he knew exactly what he was what he and the team knew what they were doing with their hit.
Speaker 1:Probably having fun. They're like, this is the perfect thing to launch right now. The the timeline is so primed to to love this. But there are yeah. Tyler, what what what's your take on all this?
Speaker 4:I mean, I I think OpenAI definitely has the resources to do this kind of thing. Like, you look at the the actual model, Genmets, they use the 27,000,000,000 parameter model, which is like I mean, that's tiny compared to, like, what Frontier models are now. Right? Like, g t four was over a trillion. It was done pre training in 2022.
Speaker 1:Yeah.
Speaker 4:Like, they could throw a couple people at this. They they they just they just started that new, like, physics team Yep. That's just doing, like, physics models.
Speaker 1:Yeah. OpenAI for science. Kept the deal.
Speaker 4:Yeah. So I I think this is, like, totally reasonable, and it's in their capabilities.
Speaker 1:Yes. A 100%. I I think it just like, clearly, it's a race. Even if this is just, like, positive PR, like, hey. AI is good for the world.
Speaker 1:Like, every foundation lab should be competing in that because that's the thing that when you get on Capitol Hill and somebody's saying, why are you using all the electricity? You say, well, look at all my press releases about AI and science and cancer, and it's good to point to. Like, it's just good comms. And so you wanna be putting the points on the board first.
Speaker 2:This is yeah. And this is why, again, OpenAI has gotten so much pushback on both Sora and the erotica announcement because only a month ago Sam was saying if I don't get enough compute we'll have to choose between curing cancer and free education. And I don't want to have to make that call.
Speaker 1:Yeah. Tyler, I I I think that this development updates me in two important ways. One is that it's a vindication of Rune's concept of, like, text as the universal interface. Like, if you look at the actual model, it's an LLM. And basically, as I understand it, the data that went in is basically for every cell, they have just a bag of words that are just like every gene that's expressed ranked from most expressed to least expressed.
Speaker 1:And so it's basically just like a text representation of a cell, which is interesting because I think when a lot of people thought about like creating a model of the human body, you you you just go to like a three d model or something. I I don't know. I I I don't certainly go just to text.
Speaker 4:Yeah. I mean, I I don't know if it's is it literally text or it's they just it's like tokens. Right? And then it's like, okay. DNA is already in tokens.
Speaker 4:It's just a string of numbers. Yeah. Yeah. It's not that different.
Speaker 1:Yeah. I guess.
Speaker 4:Yeah. I mean, I don't think this like, this is definitely a vindication. I don't like this, like, was that big of a, like, an update, though. Right? This is anyone who's, like, sufficiently AGI pilled is, yeah, obviously
Speaker 1:Yeah.
Speaker 4:Scale things up. We're gonna get, you know,
Speaker 5:big Well
Speaker 1:well well, that's number two. So number one is that you don't need some sort of, like, new data primitive. You can actually just use tokens. You can use text to understand a cell and then find a connection between biological systems based on just a pure textual representation of the cell and the interaction. So I think that's that's an interesting vindication for, like, text's universal interface, not just in coding or text or knowledge retrieval or any of these other things.
Speaker 1:It's also applying to bio. You can take bio, transform it into text, and then do interesting things. What do
Speaker 2:think?
Speaker 4:I mean, we so, like, if you look at AlphaFold, AlphaFold was, like, not that crazy of a new architecture. Right? It was something we've already been doing on gaming or stuff like this, then you apply to BIO. Yeah. So I think I'm not that surprised to see, like, architectures that we've already have been working well in other, like, areas.
Speaker 4:You apply them to BIO and it works. Like yeah. Because it's not like those architectures are are like fairly general. It's not like just for gaming or just for like text.
Speaker 6:Yeah. Right?
Speaker 1:Yeah. Yeah. I wanna talk about scale but first I wanna talk about scaling your streams with one livestream. 30 plus destinations, restream, multistream and reach your audience right there. So, yeah, the the the second takeaway for me is that, like, scaling laws apply to useful AI applications in bio because that's if you actually go to the GitHub, you can see that they ran this this model on something like, I think, like, 4,000,000,000 parameters or something, and then they scale this up to 27,000,000,000.
Speaker 1:It might have even been a smaller model. And so there's an interesting like, they're they're scaling up, and it's and it's, you know, qualitatively better system. And so, yeah, I don't know.
Speaker 4:Yeah. I mean, when I see stuff like this, I I kind of am wondering what people who are like, oh, this is a top. Like, we're gonna crash any moment. Like, how do they respond to this? Right?
Speaker 4:This is exactly what is like, oh, like, oh, it's just, you know, it predicts the next token.
Speaker 2:Yeah, it's
Speaker 4:slightly better at coding. It'll make someone 5% more effective but, like, this is not gonna be substantial change and event like, inevitably, it's gonna collapse. But then you see stuff like this where, like, obviously, this can keep growing. Yep. In five, ten years, this will
Speaker 2:be Yeah. I think I think it's incredible, but it but it's it's more tools for humans. Right? Like, this is human machine collaboration, obviously, like, the key insight. But but still, we're at a point where this isn't like an AI 2027 scenario where you see the machine running has a novel insight, runs away with it, fully robotic, lights out lab.
Speaker 2:And then it just spits out a drug at the other end. So I think, like, I think it's absolutely incredible, but and and an amazing proof point for the potential for the technology. But Yeah. Based on this is exactly what you want to see based on all the promises we've been getting for the last decade.
Speaker 3:Yeah.
Speaker 7:So I
Speaker 2:think I think like Google deserves a huge pat on the back. But everyone the the industry should be breathing a sigh of relief being like, Okay, we're actually doing what we've been saying we were gonna do.
Speaker 4:Yeah. I I I agree. I I'm just saying, like, if you listen to what super AGI people have been saying, like, we're just right on track with everything they say. Right? Like, if if you look at even if you look at, like, compute budgets,
Speaker 1:like Yeah.
Speaker 4:Yeah. We're now seeing there was the two gigawatt data center Yeah. Being planned. Yeah. Just yesterday.
Speaker 4:Just coming
Speaker 1:on the show today.
Speaker 4:That's I think that was ahead of, like, what a lot of people were saying, even, like, Leopold or AGI 2027. Like, that's ahead of of what they were saying.
Speaker 1:Yeah.
Speaker 4:So, like, I don't see I mean, like, everything it it's not like we're just spending and then, like, we're not getting anything in return. Like, this is
Speaker 1:I think the bear case is is for, like, a fast takeoff scenario, I suppose, something like, is this the ChatGPT moment for AI and bio, or is this the two thousand five DARPA grand challenge that took twenty years until Waymo's were on the street? Like, there could be a rate limiting cycle time to actually testing these drugs in the wet lab going through the FDA approval process. So even if the AI systems get better and better, how do you reinforcement learn on will the FDA approve this drug or not? Like, you have to actually test it
Speaker 2:Pat in says, got to give Martin Shkreli a ring. We actually should. We should hit him up, see if he wants to jump on.
Speaker 1:Right now?
Speaker 2:Yeah. To see? I'll Tyler. Figure it out.
Speaker 1:Let me I'll I'll DM him.
Speaker 2:Anyways, we can Is he live? He's probably live but he I'm sure he's down to to to co stream. Going on. I can do it. There's a post here from g Fodor who says, utterly totally destroyed worldview good riddance.
Speaker 2:He's quoting a post featuring a line from Yan Lecune, who says, it's neither optimistic nor pessimistic. It's just being real and stating what is the case. It's a system with gigantic memory and retrieval ability, not a system that can event solutions to new problems. And then he shares Sundar's post. So anyways, humans are somewhat of a system with a gigantic memory and retrieval ability.
Speaker 2:And yet, we find ways to invent solutions to new problems. So big moment. And it's a win for the world. Yeah. My question is, okay, if can can Google whatever would the the process that led to this discovery Mhmm.
Speaker 2:Can Google produce thousands of these? Right? It
Speaker 1:does seem like they're accelerating.
Speaker 2:Yeah. Like, I just imagine I just imagine at some point, like, year from now, is Sundar still sharing these breakthroughs? Or are they just kind of going
Speaker 1:Taking them through FDA approvals? I don't know. What do you think, Tyler?
Speaker 4:I mean, I assume everything that we have seen in AI, like, says that, like, yeah, they can keep scaling. It's only 27,000,000,000 parameters. Scale it up to a trillion, like
Speaker 1:Yeah.
Speaker 4:You would think. Everything that that we've seen says that, yeah, this will give us more Yeah. Even if it's not like a novel insight, if it's that, like, speeding things up way, you know, way faster, then, what what does it really matter?
Speaker 1:Yeah. Just a super drug screener that allows you, like, a first pass of ideas. Like, that's super valuable. I do wonder if there will be a data wall. There's obviously no compute wall because you can just train a 27,000,000,000 model.
Speaker 1:Like, that was not the gating factor here. It I I do wonder if they're somewhat data limited on, like, you know, actually indexing the cell, every cancer type, all of that, and what that cycle time looks like? Because we've seen with all the data brokers, like the Scale AI, the Mercos, like, those companies have been able to scale extremely quickly to do knowledge retrieval tasks and put tons and tons of new, you know, answers to questions
Speaker 8:Yeah.
Speaker 1:In the training set. Like, what is the Merkor Scale AI of AI bio?
Speaker 4:Like Yeah. Like, I I don't know if there is one yet, which just tells us that, like, this is still pretty early innings.
Speaker 2:Yeah. It's interesting to see these people that that were hyper bearish transformer models. Like this this Brett Hall post, he says, once you understand the transformer, as Lanier does and dare say I do and show on my website there, you can literally see through what it does. Recombination and prediction. It's not creativity.
Speaker 2:So it cannot possibly generate new explanations. And we see that with all LLMs. It's so funny because I like personally in my life when it comes to marketing and building brands and things like that, I think of creativity as recombination and prediction. Is
Speaker 1:Totally. Like
Speaker 2:if you put these two ideas together
Speaker 1:Yep. That's great.
Speaker 2:It could be very cool.
Speaker 1:Yep.
Speaker 2:And I would give you the example of like this this we we just got this these rugby shirts and that we that we made that I'm very excited about. Yeah. And it's like there's not a single new concept here. Yeah. Just kind of taking like a rugby shirt Yep.
Speaker 2:Which looks cool, making it kind of look like it's part of some Formula One team Yep. And then putting our our our partners logos on it.
Speaker 4:And yet Yep. This feels
Speaker 1:Yeah.
Speaker 4:Fresh. This is the the Gwen take where it's like, even if you can't just like prompt give me a new idea for a joke or something, you can just, you know, brute force it by just giving it two random ideas Yep. And saying connect them and then you can ask if it's interesting. Then you just compound that, and then eventually, you'll get you're, like, brute forcing creativity.
Speaker 1:Yeah. Yeah. Yeah. You're just kind of, like, indexing everything, ranking them against each other. I mean, we know that the like, this works.
Speaker 1:This has worked in the TikTok algorithm. And, yeah, just finding these correlations seems really valuable. The question is just like, yeah, how long will it be until the first FDA approved AI generated cancer drug hits the market? Like, are there because the bare case to, like, the fast takeoff of the compute build out is that at some point, you tap all the debt, you tap all of the capital markets, you hit some sort of, like, fundamental law of physics around how fast you can move sand around the world and turn it into silicon or how fast you can spin up a new power plant or new nuclear power plant. Like these some of these things just take time and regulation, like, the the like, there is the chance that this stuff gets regulated to the point where there's no fast takeoff.
Speaker 1:Like, we should have seen a fast takeoff in nuclear energy production once we figured out how great nuclear energy was. And we just kind of regulated it out of existence. The NRC stopped approving stuff, and we just didn't see nuclear energy production. Like, you can see it's it's and then it's sigmoidal because it just turns into an s curve because we just said, yeah, we're actually good.
Speaker 4:Yeah. I mean, that that's kind of what Puretec Labs is working on. Right? It's like the the lab in the loop of the LM or the or, like, RL step, basically. But we're just, like, still so far from, like, actually tapping the energy.
Speaker 4:Like, we're not close to that at all. There's Yeah.
Speaker 1:No. What is it?
Speaker 4:You know, I keep saying about, like, natural
Speaker 1:percent? Isn't it,
Speaker 4:like, half It's, like, tiny amount. We we're not you know, we could like, literally today, if if we wanted to, we could, like, double natural gas, like, very easily. It's just regulation.
Speaker 1:Yep.
Speaker 4:And it's, there's no incentive to do that right now because we're still not that close. It's like, oh, we're spending so much money, but, like Yeah. I mean, we could be spending way more. Yeah. No.
Speaker 4:No. No.
Speaker 1:I agree. I agree. I I really wonder, like, how quickly will Google pull the trigger on, okay. Spend 10 times as much compute or 10 times as much energy on this because this sell to sentence scale 27 b, this feels like they could have just put it on their ramp card, like, in terms of, like, the actual, like, compute budget, how much weight went into that training run versus, like, the Gemini three that's launching. Like, it feels like do you see the cutoff date for Gemini three is, like, is, like, October '25?
Speaker 1:And so it feels like that was a much bigger run, probably maybe a billion dollars of of compute went into it or billion dollars of spend went into it. Like, it's a very expensive project, but they have, you know, a bunch of applications with it. They're selling it as an API. Like, they they can underwrite it very clearly on ROI basis. This is much harder to underwrite right now, but it's gonna get less and less fuzzy as they as they actually see, okay, the things that we're generating, the ideas that we're generating, yeah, they're actually making it through FDA approval.
Speaker 1:So exciting. Very, yeah, very cool stuff and obviously just amazing for the Google brand. Like, doesn't quite fit with the concept of organizing the world's information. I guess you're organizing the cellular information. Seems like a little bit of a side quest.
Speaker 2:Is there new information? Yeah. They not knowledge that existed that was discovered Yeah. And now they're organizing it. Yeah.
Speaker 2:Their mission is to organize the world's information and make it useful.
Speaker 1:Oh, make it useful. This yeah. This is we're we're
Speaker 3:making This is
Speaker 2:extremely on brand for them then. It's being Yes. Made useful.
Speaker 1:Well, let me tell you about Privy, wallet infrastructure for every bank. Privy helps you it makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. Good. So the timeline is yeah. Still in turmoil about this.
Speaker 1:A little bit. But mostly, everyone's just like, this is awesome.
Speaker 2:Greg greg? Com comrade comrade? Yeah. Botching the pronunciation.
Speaker 1:Comrade Greg.
Speaker 2:Says someone needs to turn each TBT N card into a physical collectible. Slowly getting activation energy for this to start taking preorders limited to 10 prints first edition reserved for the subject. All profits donated to TBPN cause of choice. He says he's pulling the trigger on it. This is cool.
Speaker 2:I think we were gonna do this. So maybe We
Speaker 1:were texting about this over the weekend and I wasn't sure about like how what the right way to handle like card card printing. They're very like news driven. But I love that this just kind of organically happened.
Speaker 2:I think we should do rookie cards for people that raise a seed round.
Speaker 1:Yeah. First time you get on the show. I don't know. I I would say it's fun to print them all, honestly. Yeah.
Speaker 1:But I'm sure Greg will figure out like where the right where where the demand is. Like, do the big people want their cards or is it more like the seed stage founder? Is it more like the wedding announcement?
Speaker 2:Do they want signed cards? Yeah. Do they want like a piece of merch? Like, you know, on like some some trade you know, actual trading cards, they'll put like a piece of the jersey Yeah. Fabric in them.
Speaker 1:Oh, really? I've never seen I I feel like you'd want your own card if you did like a wedding announcement, but who would really wanna connect collect a wedding announcement that's not for their own wedding? Like, that seems kind of like a niche thing. That'd be kind of like, what what what are you doing?
Speaker 2:Depends on the wedding.
Speaker 1:Anyway, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team. And he said he he actually loaded the cards up into a system. He says UI polish is up next going to mimic TBPN website style.
Speaker 1:Thank you for your service, Greg. You've been crushing this. This is very, very cool. I would love to see how you go about actually getting these printed. You can go really crazy and actually print like real trading cards.
Speaker 1:Like, there's there are systems and and companies that do that. I was thinking that it's possible to just go to Walmart and print, like, wallet size photos of things, and they're, like, 30¢, I think, for, like, a set of four. And you just need to cut them out and people put them in the wallet photos. And it's a photo quality printer and you could just take that and then find a sleeve that fits it and for like, you know, a couple cents be like making these pretty easily. So there's lot of different ways to to solve the problem, but I'm excited to see where it goes.
Speaker 2:Will Menaida says, interesting cultural indicator that Volvo quietly rolled out armored versions of their family cars direct to consumer over the summer. Probably nothing.
Speaker 1:Direct to consumer? You can just buy an armored Volvo now?
Speaker 2:It's pretty remarkable. I almost bought an armored g wagon back in the day that my friend Blake had. It was the it was the former president of Kazakhstan
Speaker 1:No way.
Speaker 2:Like presidential, like, car that he'd been driven around that that my buddy Blake had imported from Kazakhstan. That's And I really just wanted to own, you know, as a as a as a Borat enthusiast, I really just I just really wanted to own that car. I didn't pull the trigger because it's so it's got so much metal in it that it's like three times as heavy.
Speaker 1:Yeah. The doors are massive.
Speaker 2:And so it's just like
Speaker 1:not actually It must get like two miles to the gallon. Yeah. Exactly. Yeah. It must be so insane.
Speaker 1:You're just filling up like, oh, I'm driving from Malibu to LA. Gotta stop for gas. Full
Speaker 2:Full tank. Yeah. Rough.
Speaker 1:Well, let me tell you about Figma. Think bigger, build faster. Figma helps design development teams build great products together. President Trump says that India's prime minister Modi has agreed to stop buying Russian
Speaker 2:oil. Wow. Trade deal.
Speaker 1:Trade deal. Yeah. The the the geopolitical trade deals are all over the place right now. There was also news that we're poly markets that we're officially in a trade war with China. I'm not exactly sure how that's defined.
Speaker 2:There was a market on
Speaker 1:that? I guess. Yeah.
Speaker 2:Well, Trump came out and said yesterday. He said, we are in a trade war
Speaker 1:with China. Yeah. So that that's the that's the end
Speaker 2:of That solves it.
Speaker 1:But who knows? These these trade wars can be very short and, you know, I guess India's playing ball hanging out with Dario from anthropic and hanging out with Trump and no longer hanging out with Putin and buying oil. The how did I get how did our family get so rich memes going viral around the Founders Fund names. Dad read the Simarillion and bought a lot of domain names. Sebastian Calle Callery says, move quickly.
Speaker 1:There aren't that many good Lord of the Rings names left to use. Arthur McWatter says he's camping the following, Mordor, Lothorian, Mirkwood I know. Numenor.
Speaker 2:I don't think Valinor.
Speaker 1:Valinor's been used. Valinor is an incubator, I believe. Ammon?
Speaker 2:I didn't know Ammon. Amman? Is that no. There's no way.
Speaker 1:Did Peter Teel back Amman Geary?
Speaker 2:Joe Lonsdale quoted the announcement yesterday that we shared around Erebor Yeah. Course getting approved. He said, finance done right enables massive job creation and wealth for a civilization and complements builders like universities or media building. Anu with today's innovation frontier can upgrade how these areas work for all. I'm just the founding board member and early investor in Arab War with eight VC.
Speaker 2:Proud to support Palmer and his co founders.
Speaker 1:Yeah. I always liked Shadowfax. If you were gonna start a Founders Fund backed HelloFax competitor, DocuSign competitor using Shadowfax. Wait. Have you not seen Lord of the Rings?
Speaker 2:I have seen Lord of the
Speaker 1:Rings. Do you know who Shadowfax is? No. No. He's Gandalf's horse.
Speaker 2:Oh, okay. Yeah. It's it's coming back.
Speaker 1:And I think Shadowfax is a good name for, like, a a doc It's
Speaker 2:a stallion. Yeah.
Speaker 1:Yeah. A horse, a stallion.
Speaker 2:A real stallion of the company.
Speaker 1:But also something that could be related to the fax machine, which would be funny. Anyway, congrats to the team over at Erebor. Palmer went on Rogan as well. So there's a three hour Palmer Lucky Joe Rogan episode waiting in your podcast player of choice if you wanna go listen to that.
Speaker 2:P god says, welcome back, command economies. And, the classic template, get ready to learn communism, buddy, which is that apparently the Trump admin is planning to set floor prices across a range of industries to combat market manipulation by China according to Scott Besson.
Speaker 1:It's very odd that they're pulling that out as a tool instead of just focusing on tariffs. I don't know. It seems like there's so many other ways to deal with a trade war than just
Speaker 2:They like to they're like they're like a DJ, you know? Like sometimes a DJ's up there and like really turning all the different knobs. Sometimes you just let the music play, you
Speaker 1:know? That is a very funny metaphor for David Solomon.
Speaker 2:Like the knobs are there. Right? You can Yeah. Some people just choose to use them more than that.
Speaker 1:You should get They should get David Solomon in there. He's already a DJ. He's already turning the knobs. Why not have him turn the knobs of the global economy?
Speaker 2:Yeah. I just I I do Of course, we never discuss politics on the show. But I do worry about the opposite end of the political spectrum being heavily inspired by these actions. And then it just becomes the norm that you just have obscene levels of government intervention. Yes.
Speaker 1:Yes. All the time. I always go back to, like, trying to benchmark the level of government intervention in America versus other competitive countries. So with the intel thing, this happened the same thing. Was like, what was it, 5% or 10% stake that the US government took?
Speaker 1:And a 10 and a lot of people were like, this is, communism. This is command and control. But, if you look at the, the I believe TSMC was basically, like, fifty fifty with the Taiwanese government. And so even now, there's a lot of other players in the semiconductor supply chain internationally that have a higher proportion of government influence in their, cap table effectively. And so I'm not in total, like, oh, wow.
Speaker 1:We're, like, doing worse than what's going on in South Korea
Speaker 4:or I
Speaker 2:think yeah. And and my my framework is that as much as Trump and Xi
Speaker 1:Yeah.
Speaker 2:Beef Yep. I believe that Trump respects Xi.
Speaker 1:Yeah. And, I mean, America's bailed out companies successfully before. America has come in, been the lender of last resort for stronger companies like Intel and and turned the company around and then sold their position and gotten out entirely. Like, government motors. Like, The US does not, you know, fully the the the the US government never, like, fully nationalized the the GM ecosystem, even though they did bail them out at one point.
Speaker 1:Joe Wiesenthal says all businesses are banks except for banks. Banks are media companies. Wow.
Speaker 2:He said this back in
Speaker 9:2018.
Speaker 1:That's crazy. From Earth. This is because mister beast has filed a trademark to launch his own bank. The organization will will be called mister beast financial. We talked a little bit about this yesterday.
Speaker 1:I'm I'm not sure what he will what he will wind up being, but we gotta have him on the show. What are thinking?
Speaker 2:I'm just laughing at the chat. Sam Sam Sheffer is asking about real competitors to The USA at the country level. And the chat says China, Russia The EU. Uzbekistan, Martinique. Mauritania.
Speaker 2:Mauritania.
Speaker 1:Yeah. Well, let me tell you about Vantage. Automate compliance, manage risk, improve trust continuously. Vantage's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation, whether you pursue Did framework or
Speaker 2:you see this consumer reports report? Paris did an investigation.
Speaker 1:Yes.
Speaker 2:Did 60 plus lab tests on leading protein supplements and found that quite a lot of them had high levels of lead. This wasn't surprising to me.
Speaker 1:Okay.
Speaker 2:And the reason for that is that a lot of different food has high levels of lead. Mhmm. Even even food that would appear to be, quote, natural. Yeah. Right?
Speaker 2:So dark chocolate is a good example. There's a lot of dark chocolate brands have high levels of lead, something that you should be looking out for. Like, not every not every brand is created equally. Yeah. And I think that people were particularly scared about Huel Yeah.
Speaker 2:Which the Huel Black had
Speaker 1:Kind of an ominous name.
Speaker 2:Yeah. Kind of an ominous name. And of course, the timeline was having a lot of fun with it yesterday. People being like, yeah. I could tell you've been using a lot of Hewl Black over the last year.
Speaker 1:You're just deranged from all the lead poisoning. Yeah. Yeah. We'll stick to the optimum nutrition, the transparent labs. Good good to see transparent labs being exactly what their namesake implies, transparent.
Speaker 1:It seems like they've they've done very well with the the lead exposure. Is lead is lead Yeah. More of a cause for concern than microplastics? I feel like what was it last year, Nat Friedman with the plastic list, like, really shift the cut shifted the conversation to, levels of microplastics. And I think people kind of, like, stop paying attention to lead.
Speaker 1:But
Speaker 2:It's all important. You wanna be you wanna be aware of it. Yeah. But, like, the way that you need to think about it is there's basically healthy levels. Mhmm.
Speaker 2:There's certified levels.
Speaker 1:Mhmm.
Speaker 2:And then there's, like, legal levels.
Speaker 6:Mhmm.
Speaker 2:Right? And, like, healthy levels, like ideally it's zero. Yeah. Like lead I I'm actually I'm I'm sure somebody some skits I will be like, actually
Speaker 3:I like a little bit
Speaker 2:of little bit of lead is actually good for you.
Speaker 1:Because it makes you more aggressive. Right?
Speaker 2:Yeah. Yeah. Doesn't it make you a
Speaker 1:little crazy?
Speaker 2:Yeah. If you wanna have a strong q four Exactly. You know, up the lead and then detox in q one. Yeah. New year, new you.
Speaker 2:Yeah. But yeah, you I just think about it as like healthy, like certified as in like you can you can go out and get various certifications like that generally show that your product is like healthy or clean.
Speaker 1:Yep.
Speaker 2:And then there's like a legal levels which like none of these none of these brands were above the legal limit.
Speaker 1:Oh, really? None of Even even the fuel was just not recommended.
Speaker 2:So if you're a food company in America, you can legally Sure. Have Yeah. Quite a significant amount of lead. But anyways, I think you could do these for like almost every category of food and get some pretty shocking
Speaker 1:Oh, you want me to
Speaker 3:take?
Speaker 4:Yeah. I mean, I I think with plastics and lead, like thing is we've kind of ran the a b test with lead where it's like in the kind of early seventies, I think that was kind of the peak of like leaded gas.
Speaker 1:Leaded gas.
Speaker 4:And then what you saw is like fifteen, twenty years later, you basically saw the peak of like crime.
Speaker 1:Yeah.
Speaker 4:Because it's like you grow up as a kid, you're inhaling all this lead and then you you like it makes you way crazier.
Speaker 1:Yeah.
Speaker 4:But with plastic, haven't really run the a b test because like there's kind of just always been like a build of a plastic and Sure. There's like no one who like doesn't have a lot of plastic.
Speaker 1:So who knows what happens when we take
Speaker 2:out of the Potentially, schizo alpha is that lead paint could actually be positive because it reduces the, like,
Speaker 6:the amount
Speaker 2:of EMF in a room. If you have, like, a bunch of lead paint on the walls, it's actually blocking some of that.
Speaker 1:Yeah. All the plastic in your system is just bouncing the lead particles off too. You're just immune to lead poisoning because you have so much plastic in there. You wrap your entire body in plastic. This went incredibly viral, 17,000 likes.
Speaker 1:I'm surprised
Speaker 2:Yeah. Because I think most people that look through this list are thinking, okay. I've had at least one of these in the last three months
Speaker 1:I have. Probably. Every single day, basically. Yeah. Pretty pretty wild.
Speaker 2:And it's just I mean, yeah. It's it's a lot of the brands are gonna push back because not every you know, you're not gonna see that if if they ran one lab test per Yep. Product, if you tested another product that has that was made in in another batch, you could see wildly different levels.
Speaker 1:Yeah. The batches and also up the ingredient supply chain. A lot of times, the lead comes from two steps or three steps deeper in the supply chain. This happened in Soylent. Had some article that was like it was very funnily worded.
Speaker 1:Was like Soylent's like super heavy metal or something like that because they were tested for heavy metals and they found something similar to like early batch. And it was like two steps up the chain. Like one of the one of our suppliers, one of their suppliers had like changed their supplier or something like that, the lead company.
Speaker 2:Bobby wants to see a lead gong in the UltraDome.
Speaker 1:For AgroMaxing. Yeah. Let the let the lead fly.
Speaker 2:I would hit a lead gong for Absurd, a new company out of Y Combinator
Speaker 1:Oh, yeah.
Speaker 2:That makes absurd AI launch videos turning raw. This sounds this sounds kind of like it was written by Chad Cerviti.
Speaker 1:Well, let's pull this video up. First, let me tell you about graphite dot dev code review for the age of AI. Graphite helps teams at GitHub. You have higher quality software faster. You can get started for free.
Speaker 1:And now let's watch this launch
Speaker 8:Everyone wants to be different. It starts with a familiar feeling, to feel stuck.
Speaker 1:Circular motif here was really cool. The and the piano, like, changing out what's around it, I think that's a very interesting use of AI. Can we go fuller screen?
Speaker 8:Absurdity isn't designed in a studio.
Speaker 1:Fighting a robot. There we
Speaker 8:go. Discovered in obsession. Born from truth so raw, it feels like man
Speaker 1:That was that was weird.
Speaker 8:To everyone else. This is cool though. A beautiful disregard for your own limits. A truth your body understands before your mind.
Speaker 1:This really sounds like Morton Freeman. Beautiful illogical Is this not stealing his likeness?
Speaker 8:Story only you
Speaker 1:I guess it's just like an homage. Yeah. Is Sam Sheffer in here? We need Sam Sheffer's comments on this for sure. He was in here before.
Speaker 1:It's the most
Speaker 2:Yeah. It's just interesting when you Yeah. When it's when it's difficult to make something
Speaker 1:Mhmm.
Speaker 2:It's valuable.
Speaker 1:Yep.
Speaker 2:And when anyone can have it instantly
Speaker 1:Yep.
Speaker 2:It's absolutely worthless. Yeah. So so again, I before I would judge this, I'd wanna see I wanna see 10 actual launch videos for 10 actual companies that you've worked with. My guess is that my guess is that these are might work as in they might get views, but I don't think they will build your brand at all.
Speaker 1:Yeah. I mean, it I would assume it follows the same curve as like the first Studio Ghibli that I posted got like thousands of likes. It was like super basic. I just took a screenshot from Oppenheimer of Einstein talking to Oppenheimer from the movie, Ghibli'd it and just posted that and it got thousands of likes because people were like, oh, this is like something I like and I know and I like Oppenheimer and I like Ghibli, so like. But if I posted that today, it would be a total flop because like it's been done so many times.
Speaker 1:Right? Why are you laughing?
Speaker 2:I just think it's funny because we should actually test it. You should post like just a Ghibli image and be
Speaker 1:like It's like Ghibli of that horse and be like, oh, wow. You know? Or or whatever whatever meme is going viral that day, you could you could Ghibli it. And and I mean, there there were so many Ghibli's that went viral where it was just like every iconic image for the past few years. It was like a picture of JD Vance Ghibli.
Speaker 1:Okay. Viral. A picture of of Donald Trump. Viral. Like, picture of Michael Jordan.
Speaker 1:Dunking viral. And and but now it's like we've all seen it, and it's been commoditized. So it doesn't it doesn't it, like, it ran its course. And that's, like, the the the worry with this is that, like, the first AI launch video goes viral, and then it, like, gets less and less. But it does seem like they're building more of a SaaS like product on top of AI image gen.
Speaker 1:And so, you know, the agents kind of plan, generate, edit every scene. So you're kind of like, you can still come with an idea. Like, the thing that stuck out to me in that in that video, there were two things. One was the the circle motif. Hitting the circle again and again and again was cool.
Speaker 1:And at the end, the very blurry images of the boxers, like that was an interesting artistic style. Yeah. And so right now, if I wanted to generate a video, if I come up with an idea of like, okay, let's, you know, let's do a horse themed launch video, it would be it would be sort of a hassle for me to take an image of a horse, like and come up with the concept of, like, the horse running and then each frame of the horse running where it's in a different, you know, different segment of its walk cycle or its run cycle or its stride, each frame is transformed into a different art style or different world, it would be really hard to puppeteer that. I'd be copy and pasting the prompt again and again and again.
Speaker 3:Yep.
Speaker 1:And having an agent or having a system that kind of helps me pipeline that stuff where it's like, okay. I wanna make you've seen those videos on Instagram that are like, it's a car and it keeps and it just flips through like the the the headlights one after another and shows you like 50 cars, but it's always the image is always focused on the headlights.
Speaker 2:So let's Jack Cohen Yeah. Over at General Catalyst just shared a v a video they did for Zavo. Zavo.
Speaker 1:So let's let's
Speaker 7:pull it up.
Speaker 1:I'm very interested in that. It's in the chat. It's in the X chat. We can try and put it in the timeline.
Speaker 2:I think you're gonna absolutely
Speaker 1:Well, we while we pull that up, let me tell you about Julius, the AI data analyst for everyone. Chat with your data and get expert level insights in seconds.
Speaker 2:Do we have this video? Let's play it. Oh.
Speaker 10:This isn't a restaurant, it's a battlefield. Every ticket is a ticking clock. Your best soldiers Steak medium. Are falling. Okay.
Speaker 10:Meet Greg, your numbers wizard. He'll tell you the Sea Bass special is secretly costing you a fortune. But the truffle fries special?
Speaker 1:Is that motion graphic? AI as well? That's pretty impressive.
Speaker 10:He knew you'd run out of Pinot Noir by 8PM on Friday and already reordered it yesterday. He knows when your night will go from zero to sixty.
Speaker 1:So is this vertical SaaS for restaurants?
Speaker 10:And then there's Maria.
Speaker 1:That's pretty good if so.
Speaker 10:She turns visitors into regulars by suggesting the perfect top shelf tequila for their favorite spicy margarita. She'll find hidden patterns in your audience and understand exactly what they want.
Speaker 1:That looks that looks like post that that looks like Yeah. After effects. Wow.
Speaker 2:I hate this.
Speaker 10:POS agentic AI. Zappa powers the next era of
Speaker 1:See, this this looks like not AI generated. This looks like they layered in their actual product, but maybe that's part of the workflow in the pipeline. They need some drop shadow on that logo. It's a little white on white, little low contrast. The boys now.
Speaker 1:But, I don't know.
Speaker 2:I think
Speaker 1:That is right now, that's attention getting. Like, right now, if that pops into if you're a restaurateur, I I hope I'm getting this right. That's that's it's a it's an ERP for for restaurants.
Speaker 2:Yeah.
Speaker 1:So you use that to run your restaurant. That's what I got from that. Is that correct?
Speaker 2:The first agentic point of sale for restaurants and retail payments, point of sale on AI agents and one platform to build the future of autonomous commerce. Over 400 businesses. I already use Zava to accept payments and manage operations.
Speaker 1:I mean, did deliver that message to me, and it grabbed my attention a little bit. So I don't know.
Speaker 2:Worth Yeah. The opening scene was particularly bad, but at the same time, it was probably a good hook.
Speaker 1:Exactly. But I think the hikers of that will dissipate. I think you're correct on that. Like, will be like, eventually, you'll just scroll and be, oh, yeah. I've already seen, like, the AI slop.
Speaker 1:I don't want say that. But, like, right now, if you're the first like Toast does is running an ad like that. And so if you're the first company to be running that ad that grabs people in that way, like, you will break through. There's like there's like a window of alpha, I think. I I mean
Speaker 2:Yeah. The question is is if they had figured out a way to do this with the founder as, like, the key person and, like, some blend of AI plus the
Speaker 1:actual I mean, that's be That's for sure coming. I mean, vo three launched yesterday at three point one and and has, like, pretty phenomenal character consistency. I was looking at some demos. If you want to generate a bunch of video, go to fall generative media platform for developers, the world's best generative image, video, and audio models all in one place, develop and fine tune models with serverless GPUs and on demand clusters. But I I agree with I agree with like
Speaker 2:Yeah. Part of it part of it as an advertising enjoyer, I like to, without having knowledge, try to analyze. When I see a video when I see a campaign
Speaker 1:Yeah.
Speaker 2:I'm trying to clock based on the stage of the company, how much should they spend on this? Sure. For example, if Airbnb comes out with a launch video, I feel pretty I like expect it to be incredible Yeah. Because it's Airbnb and they probably spent like half a million dollars like producing mean,
Speaker 1:Apple ads when they get like, oh, Spike Jones is directing it. And you're like, he does movies.
Speaker 2:And then with with with seed stage companies Yeah. One thing I like is like being able to clock like, okay, how resourceful is this company? Sure. Sure. Sure.
Speaker 2:Right? For sure. I like being I I like being able personally, I enjoy being able to clock. Okay. They clearly had to be scrappy here.
Speaker 2:Yep. Like, they spent like $10.15, 20 k maybe on this video. Yep. But it's amazing because it's like real it's genuinely a really great idea. Mhmm.
Speaker 2:And so with absurd, I think like the the actual output generally looks great. It doesn't but but I would say the the idea itself is not I don't know if it's like strong enough, basically. It's like white humanoid looking things in a restaurant, but maybe There
Speaker 1:were white humanoid looking things, like robots? I completely missed that something. Was very, Michael. It was very visually intense. Yeah.
Speaker 1:Agree with that. That's interesting. I think that there, there is a, like, a underrated side of using AI in a creative way that does show resourcefulness, and it can show being on the cutting edge. It's a way to tell your audience that you know how to puppeteer the models in unique and innovative ways that just dropped today. We see this a lot with, like, just Justine Moore.
Speaker 1:Like, a new model will drop, and she'll be she'll have, like, converted her podcast into a cartoon with the correct lip syncing. And that's not just a feature where you just click a button and just like, you have to actually wire up a few different systems, and she usually will show underneath. It's like, I use this for the for the cartoon effect and then this for the for the video and then I use Flow or something else. And so Yeah. There is a way to signal that you're sort of, like, tapped into all the different frontier capabilities because Sora is different has a different look than mid journey, but you can start with a mid journey image and bring that into Sora, and then you can use a different video or audio model or or mix the audio especially.
Speaker 1:Like, I think that they added motion graphics on top. Yeah. That the the that the AI model didn't just one shot those graphs. Yeah. I think that that was after effects.
Speaker 2:Yeah. So the question is, like, with Absurd, are they charging let's say they're charging $10,000 for a launch video. Yep. Are they spending energy, resources, time
Speaker 1:Oh, I think it's definitely not just, like,
Speaker 2:one shot at this point. Right.
Speaker 1:But but that's fine. So so
Speaker 2:today, it's basically like a managed productized service
Speaker 1:Yeah.
Speaker 2:Business. And I've heard of another company, an an AI ad company
Speaker 1:I was effectively gonna say
Speaker 2:I'm not gonna name them. Yep. They're just doing, like, creative services work. And they're selling it. They're selling it like it's AI outputs.
Speaker 2:Yep. But it it ultimately is just them running an agency. And
Speaker 1:And are they prompting a lot or are they actually filming stuff too? Or maybe
Speaker 2:They're doing every you
Speaker 1:could do both.
Speaker 2:They're doing Right. It's basically It's it's it's an agency masquerading as like a as an AI company.
Speaker 1:Yeah. There's still there's still something there where, like, is it I guess, like, zooming out. Like, is it a better time to start a law firm from scratch where you can be AI native and you can just say, from day one, we expect everyone at this firm to use AI as aggressively as possible or a creative agency and say, hey. We don't have we're not a thousand person organization that has workflows for, you know, how we do things in in different, you know, digital products. And so we're not bought in or or or we're not like stuck in our ways.
Speaker 1:And so everyone we hire, we expect you to use every possible tool for the job. Yeah. Like, is it is it a better time than ever to start a creative agency because you can be AI native on day one as opposed to being like a legacy creative agency that then needs to go pull those tools. I don't know.
Speaker 2:The challenge on the creative agency side is if you go and compete just on price Mhmm. It's a really rough business because you get you get clients that are looking for cheap work and those clients tend to be really rough. Yeah. Great companies understand the value of creative
Speaker 1:Yep.
Speaker 2:Will invest in it. Not they're not just looking for the cheapest output. They're looking for something great. And Yep. On the legal side, where you just there's there's certain amount of work, let's say, like non transactional work that is, you know, purely corporate
Speaker 9:Yeah.
Speaker 2:Where if if a new law firm emerged and they said, we want to have your legal bill dropped by 70% every month. And we're gonna do that with by properly leveraging these tools. And if that's their initial edge, I could see that working well because Yeah. For a lot of just like day to day legal work that a company needs to do Yeah. With external counsel, you don't really care all you care about is that it's done well.
Speaker 2:It's not necessarily how it was done.
Speaker 1:Let's stay on the legal example. But first, let me tell you about Turbo Puffer. Search every byte, serverless vector and full text search, build from first principles on object storage, fast times cheaper, and streaming is available. So is there a good analogy between, I'm graduating from law school instead of going into the the big law firm world, I'm going to start a law firm that uses something like Harvey on day one and and really leans into the frontier of let's do as much as possible and set this and set this company up from day one to be AI native such that maybe our business model is different. Maybe we're not so focused on billable hours or we have some sort of different model that is enabled by AI.
Speaker 1:We're still a bunch of lawyers, but we're using AI very effectively. Is that at all can we draw any analogies between that and the d to c e commerce era where basically you had brands who said, our secret, how we're going up against Nestle, how we're going up against Coca
Speaker 2:Cutting Cola out the middleman.
Speaker 1:Were is we have Shopify and like SaaS. We have SaaS, and they don't.
Speaker 2:Turns out Mark Mark Zuckerberg says, actually, I'm planning to be the middleman here. I just
Speaker 5:don't know.
Speaker 1:Great take.
Speaker 2:Yeah. I don't wanna This
Speaker 6:is true.
Speaker 1:It's a 100%.
Speaker 2:The money that you were gonna spend on rent, well, I'm actually gonna need you to spend twice as much, with me.
Speaker 1:So do you think that do you think that's how it plays out in the next generation of creative agencies? I start a creative agency, and I say, I'm I'm cutting out the middleman of the photographer or the videographer. I'm using AI tools from day one. And I get a bunch of clients, and I'm making a decent amount of money. But over time, the platforms that actually act as the AI generators say, we're the middleman, actually.
Speaker 1:And we're gonna take the lion's share of the profit.
Speaker 2:What do think? It's a good question.
Speaker 5:It's tough. Right?
Speaker 2:I don't know. I think you always I in the creative world, I think you wanna be charging based on value, not how much time goes into the work. Yeah. Right? Because the best logo designers in the world Yeah.
Speaker 2:They might be if a startup comes to them and says, hey, we want a new logo Yeah. They might be able to do that in might it might take them weeks. It might take them they might one shot. They might sit down and just have this amazing creative spark. And so if you're the best in the world
Speaker 1:Yep.
Speaker 2:You you wanna be paid for being the best in the world. Yep. And so it doesn't necessarily matter how long it takes.
Speaker 1:Yeah.
Speaker 2:And so, yeah, certain certainly on on I wouldn't respond well to a pitch today from a agency that says, hey, you should work with us. We're gonna charge you 60 percent less than your current designer by using AI. Like, that doesn't that doesn't that doesn't get me excited on the creative front.
Speaker 1:Yeah.
Speaker 2:But maybe more so on on on legal.
Speaker 1:Yeah. I don't know. It seems like it's like there's increasing value for true creativity. Like when I think about the AI tools that are rolling out, I'm like, I completely trust those in the hands of Gabe Whaley at Mischief. Like, I think that when someone who comes up with completely novel ideas Yeah.
Speaker 1:Just has an extra tool in the tool chest, there's going to be interesting stuff. But just acting as a wrapper around it is going to be a little Yeah. Bit
Speaker 2:And the question so going back to Absurd, the YC company, there was a time when like the d to c style of doing a website Mhmm. Really hit. Consumers would see it and you know, these brands were like simple. They had a distinct style, right, product on this sort of like colored background. Yeah.
Speaker 2:And consumers responded really well to it for a decent amount of time. Right? Kind of the same period that we've been in like the cinematic launch video era. Yeah. And then eventually people just stopped responding that well to it because it it no longer says this sends a signal like this is a thoughtful person that's trying to stand out.
Speaker 2:It just becomes, you know, everything becomes that way. And then it became easier to get a response by going totally the other way and coming across like you were more
Speaker 1:Yeah.
Speaker 2:Almost vintage.
Speaker 1:Totally. Yep. So Yeah. Anyway, it's a very narrow it's a very narrow arbitrage. But the timeline is in turmoil on threads because PayPal and Wise are taking shots at each other.
Speaker 1:Did you see this? PayPal said normalize sending money instead of memes and got 9,000 likes on threads. A real ripper over there. I didn't realize how that Connor Hayes.
Speaker 2:Connor Hayes is cooking.
Speaker 1:He's cooking. Brands are really going wild over there. And Wise says normalize sending money with transparent fees. Oh, dog session. It's very funny.
Speaker 1:Is so, like, twenty fifteen Twitter coded. Like, I feel like brands have not been
Speaker 2:I put this in. It reminded me of when Pepsi, like Sarah. It was Coke and Pepsi Yep. Saying like, wag me.
Speaker 1:Yeah. Like the metaverse.
Speaker 2:But Hey, friend.
Speaker 1:They're they're they're having fun for sure.
Speaker 2:Wow. This is great.
Speaker 1:But first, let me tell you about Google AI Studio, the fastest way from prompt production with Gemini. Chat with models, vibe code, monitor usage. You can try Nano Banana. You can talk to Gemini live and continue.
Speaker 2:Speaking of Ads.
Speaker 1:Let's go.
Speaker 2:Amar made potentially the product of the year. We will be doing awards later this year. She made a Chrome extension that hides all website content except ads.
Speaker 1:This is amazing. I love this so much.
Speaker 2:This is I need a link here. I wanna start running it. Yeah. It's remarkable.
Speaker 1:The inverse ad blocker. And some of these websites wow. Some of these websites are so chock full of ads. I wonder which what website these are. Display ads.
Speaker 1:Also, looks like From
Speaker 2:another era.
Speaker 1:German maybe or something. I don't know.
Speaker 2:Wild. Did you, did you hear that yesterday, Paxos mistaken mistakenly minted 300,000,000,000,000 of their stablecoins?
Speaker 1:I am not I did not follow that at all. Yeah. Exactly what happened?
Speaker 2:So stablecoin issuers
Speaker 1:Yeah.
Speaker 2:Like Paxos Sure. And Circle and Tether, they mint new stablecoins.
Speaker 1:Okay.
Speaker 2:They had an internal error
Speaker 1:Yeah.
Speaker 2:Apparently that and they they it sounds like it was a fat finger. They they accidentally minted 300,000,000,000,000 in their PYUSD, their stablecoin.
Speaker 1:Did this, like, crash their market or something? I wonder what happened here.
Speaker 2:No. I think they were they they were Paxos immediately identified the error and burned the excess. Okay.
Speaker 1:It's resolved. Yeah. They said that there's, no security breach. Customer funds are safe. They've addressed the root cause.
Speaker 1:But how fat of a finger do you have to add? Like, I imagine, like, four extra zeros.
Speaker 2:Maybe the dev, like, fell
Speaker 1:asleep on the keyboard. Yeah. It doesn't it doesn't exactly.
Speaker 2:Yeah. Joey, slight rounding error. Don't ask about the dollar backing. Yeah. So so people people are like people are basically pushing back and be like, okay.
Speaker 2:Like, you were able to just create $300,000,000,000,000 on chain. Yep. What what what was it backed by? Is or or is it act is there some sort of disconnect?
Speaker 1:They bought 300,000,000,000,000.
Speaker 2:Glad they figured it out.
Speaker 1:Maybe they bought 300,000,000,000,000 of treasuries, you know? Well, before we move on, let me tell you about ProFound. Get your brand mentioned in chat GPT. Reach millions of consumers who are using AI to discover new products and brands.
Speaker 2:Do you see this? Born in Texas in a Texas town of less than a thousand, writes the most iconic rock album of the past fifty years, quits music before it's released, becomes electrical engineer for AMD, makes it to Sony's vice president of technical standards, helps create Blu ray, doesn't elaborate.
Speaker 1:What a wild what a wild life story. A true, like, you can just do things. It's never too late to, like, just completely switch gears. This is James Williamson of The Stooges.
Speaker 2:I never knew this story.
Speaker 1:I Me either. I I don't I'm not even really familiar with who the Stooges are. Look at this guy. American guitarist. What what what's the biggest song from the Stooges?
Speaker 2:We need to we need to convince the new the younger generation that this is actually the path that you wanna go on in life. Like go on a short but generational generational run as a musician and then go work in go work in tech.
Speaker 1:Let's get a 100 gacks in OpenAI or something. That's the move.
Speaker 2:Breaking
Speaker 1:got some news.
Speaker 2:Hit get that gong ready. Julius AI is now GDPR compliant. Perfect timing with, perfect timing with Europeans getting back from summer holidays. Oh, that's huge. They can now get access to the AI data analyst that is Julius.
Speaker 1:There's more Julius news in here somehow somewhere. I gotta go deeper. But
Speaker 2:Dean Ball says, could I, like, make a tax deductible donation to the OpenAI nonprofit? You've been joking about serious.
Speaker 1:I think you can. Alexander Berger says, true story. OpenAI once came up on the checkout screen of my Safeway as the local nonprofit to donate to. Think that's that's gotta be a joke. Right?
Speaker 2:Yeah. That's gotta be a joke.
Speaker 1:But maybe maybe it's just like a random they pick a random nonprofit or something. I don't know. But, yes. You should definitely donate to OpenAI nonprofit because they'll probably spin out another for profit. That's my that's my hottest take is that we're we're getting a
Speaker 2:Well, being a donor in the nonprofit does certainly does not guarantee you equity in spin outs. No. But I've seen that with PT and Yeah. Elon and others.
Speaker 1:But you it's probably a strong badge of honor. You're on the Wikipedia page if you're a co founder of the nonprofit which is good.
Speaker 2:About if you're just a donor?
Speaker 1:Yeah. You gotta really you gotta you gotta post a screenshot of an email. Screenshot of a receipt.
Speaker 2:I donated before Yep.
Speaker 1:They invented AGI or something.
Speaker 2:This school, the Mint, is making some new coins showcasing innovation from each state. There are four ones next year according to Schiele, including Steve Jobs for California. They're doing doctor Norman Borla Borlao? Oh, god. The Cray one supercomputer for Wisconsin.
Speaker 1:Do you know who these guys are?
Speaker 2:Steve Jobs Norlo. For California. And Minnesota with mobile refrigeration.
Speaker 1:That's a huge breakthrough.
Speaker 2:Let's give it up for mobile refrigeration.
Speaker 1:I know the Cray supercomputer and then obviously Steve Jobs. What what a great coin.
Speaker 2:How much do you I wonder I wonder Tyler, can you find out how many these of the Steve Jobs coins they're gonna make? Because I feel like these things could instantly trade at
Speaker 1:The moon.
Speaker 2:Like a 100 times.
Speaker 4:Yeah. Yeah. I'll look that up. And then also Norman Borla was an agronomist, agriculture guy. Okay.
Speaker 4:And he kind of did a lot of stuff that influenced the the Green Revolution.
Speaker 1:He he he aura farmed farming. Yeah. He was a literal aura farmer. I love it. Rune was clapping back at George Hotts.
Speaker 1:We read George Hotts' pathetic losers blog yesterday, which was very black pilling. Rune says, contrary to all this, it's completely fine to go work in technology or anywhere for that matter and not really give a damn. It is not from the benevolence of the SaaS founder, the currency trader or GPT rapper that we expect our dinner, but from regard for their to their own self interest. And Reid says, wow. His website is very negative.
Speaker 1:And Rune says, feels like George Hotts is a zealot who has produced far less value than his clearly exceptional skills as an engineer should suggest. But George Hotts can do whatever he wants. That's the beauty of of the free market. He can go and and Have his own opinions. He can he can advocate for different things.
Speaker 1:He can open source software. What Tyler, what what how how have you been reacting to the to the George Hotts news? Do you think that you're you're you you expect that AGI will come from a corporation, therefore it's worth it it's worth it to be a corporate bag man?
Speaker 4:I mean, I'm definitely pro corporation.
Speaker 7:Mhmm.
Speaker 4:But also I'm kind of a George Hotts truther, you know. I I think he has a lot of good takes
Speaker 1:He does. Really. He does have a lot of good takes.
Speaker 4:Takes. He's pretty goated
Speaker 1:He is.
Speaker 2:In general.
Speaker 1:Yeah. I'm excited to see what he does next. He's always working on fun projects. Hopefully, there's something new dropping soon. But first, let me tell you about Linear.
Speaker 1:Linear is a a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, product road maps.
Speaker 2:People were having a lot of conversations surrounding OpenAI's numbers from the Financial Times. Yes. Of course, have 800,000,000 weekly active users. 5% of those are paying 40,000,000.
Speaker 1:Yes.
Speaker 2:13,000,000,000 in a U ARR, which implies a $325 annual ARPU or $27 a month per paying user. And this post went pretty viral.
Speaker 1:From ways
Speaker 2:to Google would turn 800,000,000 users into 32,000,000,000 of revenue.
Speaker 1:Is that just based on their current revenue and their current user base? Because you have to think like Google's like so much more heavily monetized that the gap between 13,000,000,000 and 32,000,000,000, it's not as much as I feel like it should be based on how young ChatGPT is. Like, they don't like, you can't actually advertise on it yet. Like, they don't have an ads product. And so, it's pretty remarkable that they're monetizing at the rate that they are already.
Speaker 1:That was my takeaway from this. Because Google's been grinding the the the ads product for twenty years now.
Speaker 6:Yeah.
Speaker 2:And so Yeah. And I I think what what Malte was meaning to say is that he's it follows it up. He says the tweet was meant to say you can run this into a profitable business.
Speaker 1:Sure.
Speaker 2:I expect value per user is gonna be higher than Google.
Speaker 1:Oh, yeah. Because the OpenAI is making 13,000,000,000 revenue but burning like 20. Right? And so you add those together, you get about 33,000,000,000 in revenue to to fully offset the burn, which is kind of like exactly Google's monetization rate. And so if you monetize the time and the products that like similarly, you get to break even pretty quickly.
Speaker 2:Yeah. And and and OpenAI is projecting to get to a 100,000,000,000 of revenue.
Speaker 1:The projections are crazy. We we should go through those. Doomslide says extremely polite thread by epoch. OpenAI's projection implies a gobbling up about half of all software revenue by 2028. We are gonna be joined joined by Mark Benioff in just a few minutes, who, of course, captures a lot of that software revenue already.
Speaker 2:But gobbles up gobble is gobbles up the right way to do it? Or is it creating new software spend? Right? Yep. If if OpenAI can build consumer agents Yep.
Speaker 2:If they can monetize product discovery Yep. Right, which are clearly planning to do. They hired the person that built Facebook ads. Right? Like Yeah.
Speaker 2:I it's like they're they're creating new software revenue that rep, you know, basically, money that wasn't being spent on software that will now go to software. They're gonna be creating a massive ads business. They're gonna be capturing a ton. They they have partnership with Walmart that they announced.
Speaker 1:I think
Speaker 2:it was Monday. Mhmm. They've I'm sure they'll announce a big partnership with Amazon. They have a partnership with Shopify. Like, they will flip the switch Yep.
Speaker 2:And start to take a percentage of all the transactions that they're already driving. So I think that, of course, the 100,000,000,000 in a few years is is ludicrous, but I don't know that it's impossible.
Speaker 1:Yeah. Epoch AI says, one bubble one way bubbles pop, a technology doesn't deliver value as quickly as investors bet it will. In light of that, it is notable that OpenAI is projecting historically unprecedented revenue growth from 10,000,000,000 to a 100,000,000,000 over the next three years. It took NVIDIA something like seven years to go from 10,000,000,000 to a 100,000,000,000. Meta, Tesla, Amazon, Apple, Walmart, Google, they were all in the six to ten year camp to to actually ramp from 10 to a 100, and OpenAI is projecting doing it in three, which is very, very aggressive.
Speaker 1:Very, very aggressive indeed. But, yes, I agree. There's a huge amount of software that feels like it's like instantiated on the fly when you go into the ChatGPT app where I was talking to a barber who was saying that ChatGPT is phenomenal at creating packing lists for travel. And that's something that it could have been its own SaaS product. There might be a tool out there, like packinglistfortravel.com might exist.
Speaker 1:And now ChatGPT just does that for you on the fly. And it's something that Google used to route you to that one off piece of software. You can do a million of these, like calculate interest rates, compounding interest. You wind up on those home mortgage interest calculator websites sometimes. Calculate your BMI if you're into bodybuilding, like diet plan.
Speaker 1:Like there's so many different pieces of software out there that are just kind of like getting rolled up. And we haven't really seen like the the SaaS pocalypse come to those like small, long tail pieces of software. But that could be
Speaker 2:No. I think Google Google has also made a pretty big push into that. Obviously, the calculator. Like, you're not searching calculator on Google to then going to a website that's showing you display ads.
Speaker 1:It'd be so sad if you were like, I had an amazing lifestyle business. Calculator.calculator.com. It this beautiful thing for
Speaker 4:twenty years.
Speaker 2:They've also done that they have or at least they did at one point, like a mortgage interest calculator.
Speaker 1:Yeah. It would just generate but that wasn't generated on the fly. That was something that they hand coded and then would, like, route you to if you searched certain terms. But OpenAI was able to do that in a lot of different ways. We were talking about them expanding into the vice category with adult content.
Speaker 1:And I was wondering if they could potentially expand into gambling content. So I asked Chattypetty to pretend you are a casino game of roulette. I put a 100 on black, spin that wheel, tell me if I won. And Chattypiti says, the ball spins and clatters around the wheel, a tiny metal comet tracing the red black cosmos. It bounces once, twice, then settles into its fate.
Speaker 1:Black seventeen, you win. Your $100 bet doubles to $200. The house sighs, the table cheers and the wheel spins on, indifferent as ever to human triumph or ruin. Care to let it ride or cash out and walk away with your small but honorable victory before probability demands its due? And so, I mean, obviously, that's a joke because they're not getting into gambling.
Speaker 1:But, you know, they they like like, Chattypuji can just as a casino for you. Okay. That's an example of, like, software that it can just instantiate. Like, you can just say, like, pretend you're generating a scratch ticket, and it can just do it.
Speaker 2:Yeah. In the same way you could ask a friend, like, percent pretend to be a blackjack dealer and let's actually play with
Speaker 1:real real money. Money. Yeah. I I don't think they're gonna do that. Yeah.
Speaker 4:There's probably an interesting eval where it's like how close are the actual Odds? Like odds to to what it should be.
Speaker 1:Yeah. Like you'd think that it would be able to like store probabilities in memory and then use Python to generate, like, true random numbers. Like, I would imagine that it could get pretty close to reality if, like, wrote some code in the background.
Speaker 4:Yeah. I I think it could do that definitely. Also, even if you just continue the chat and say, okay. Do it again.
Speaker 1:Oh, I did.
Speaker 4:But if you do a new one every time, I wonder how close it gets.
Speaker 1:I I I did I did continue the chat. I said, I said, let's double down. And it said, bold move. The dealer sweeps your chips into the felt circle. $200 on black.
Speaker 1:The wheel hums again, a perfect machine of chance, physics and misplaced confidence. The ball launches, ricochets, clatters, red 14. The house reclaims its offering. Your streak ends where it began. Roulette in its quiet cruelty is a philosopher's game.
Speaker 1:It teaches the fragility of of momentum. Do you step away enlightened or spin again for revenge? What do you think I should do? Should I should I double down again? Put $200.
Speaker 1:I I I put $2,000,000 down. Well, whatever you're winning, make sure to pay your sales tax with numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com.
Speaker 2:Did you see that Kevin from the office was wearing a Cubitus yesterday?
Speaker 1:I didn't I didn't clock that on live. We should have talked about that.
Speaker 2:What the dog? Because of the the denim strap cutie.
Speaker 1:Oh, it's a denim strap.
Speaker 2:Very cool.
Speaker 1:Yeah. It's an 88,000 I dollars
Speaker 2:can't believe I honestly can't believe this is a real picture.
Speaker 1:It's such a great pick for that character. It's so funny in so many ways. It's a very expensive watch, but at the same time, it's a watch that's not really loved by the watch lovers. And so it's it's sort of like cringey in certain ways, that's exactly the character that he was trying to play. It really is an incredible amount of detail that went into this performance.
Speaker 1:Really really a royal flush by by the team behind this. So congratulations.
Speaker 2:Nick Carter says the government that I pay 40% of my income to has been shut for three weeks and nothing in my life has changed.
Speaker 1:It's a rabbit staring in the mirror. Yeah. It it is odd. But, the I mean, the reason is that the government is not it is shut down, but most of the government agencies have, six to eight weeks of of cash. Remember?
Speaker 2:So they can I'm glad they have runway.
Speaker 1:They they have runway. They have runway. Maybe maybe they'll have to call SoftBank and say, hey, we we need a bridge. You can you can take 20% of the of the United States government. Well, there's other news from Deutsche Bank.
Speaker 1:European spending on Chateappity has stalled since May, DB Data Insights. I think we all know what's going on there.
Speaker 2:Summer. Summer, baby. It's summer.
Speaker 1:Season. You don't need to get anything. You don't need chat You can use the you don't need reasoning models to tell you
Speaker 2:Saint Tropez.
Speaker 1:Yeah. Where to park your yacht. You can you can you can Ask your with the with the free tier. The free tier is more than enough when you're hanging out in Monaco.
Speaker 2:Yeah. I That that was my initial read on this is that you can't read too much into it. Yeah. But it certainly is not good.
Speaker 1:Yeah.
Speaker 2:Right?
Speaker 1:It'll be really interesting. I mean, I would love to look at the ramp data on ChatGPT spend across ramp customers, whether that's still going up. Because I have this thesis that a lot of the paid subscriptions are essentially like prosumer work. They're they're expensive. They're being expensed, basically.
Speaker 1:I think that for the general average person, they are very much just using ChatGPT on the free tier because $200 a month is a lot. Even $20 a month is still, like, well above Netflix, and people see it as a productivity tool. So they either figure out a way to expense it or they or they and and I wonder I wonder if that if that adoption rate is kind of, plateauing in the in the, you know, broader, you know, ramp customer base. That'd be interesting to look at. What else is going on?
Speaker 1:Starlink is live on United. This is great news. I wonder when this will actually be fully live. I imagine that it's going to be a slow rollout, and they will work through, you know, one plane at a time. But it's now live on board the first mainline aircraft.
Speaker 1:And if you've ever used Starlink on a on a plane, it's remarkable. JetSuiteX, a lot of private jets have them. And you can FaceTime on them and stuff. Although, I doubt you could FaceTime on a United flight. It'd be somewhat disruptive to people.
Speaker 1:But whatever they do, hopefully, they use 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.
Speaker 2:What's that company that's competing with Starlink?
Speaker 1:ASTS. It is it has retail army behind it.
Speaker 2:And Down 5% today.
Speaker 1:Yeah. The stock's been all over the place. They don't have revenue yet, and so it's it it it's hard to exactly value, but they have a lot of contracts with
Speaker 2:Bullish.
Speaker 1:Cellular providers. And the cellular providers don't want to be completely locked. They would prefer a duopoly. And so I think they're willing to do contracts ahead of schedule, invest, do whatever it takes to get a second constellation up there. We did see Amazon yesterday talking about Predacupier, which is another LEO satellite constellation that could potentially be a rival to Starlink.
Speaker 1:But, I mean, man, the vertical integration at at SpaceX is hard to compete when you think about them just putting up so many of them.
Speaker 2:And Amazon has their play too. Right?
Speaker 1:Amazon or Google? Google had Amazon for a
Speaker 2:long satellite.
Speaker 1:Yeah. Cupier. That's what we talked yesterday. Well, our next guest is joining us in just a few minutes. The timeline remains in turmoil over Nikita Beer.
Speaker 1:Nikita said, at this point, I think creator payouts does more harm than good. And we need to off ramp to a different system. And Elon said, no. The issue is that we're underpaying and not allocating payment accurately enough. YouTube does a much better job.
Speaker 1:And so Polymarket put up a market for Nikita Beer out as head of product at X this year, and Nikita said, this is how I win. So he is Yeah. In the trenches.
Speaker 2:Now he can hedge.
Speaker 1:Now he can hedge. Oh, yeah. I guess he could. He has the most inside information here for Yeah.
Speaker 2:I mean, think I going going back to our conversation, I think it was earlier this week on posts are so easy. Yep. Every everybody that posts on X knows that oftentimes their best post took the least amount of effort. Whereas on the YouTube creator side, for creators that are actually building a business
Speaker 1:Yep.
Speaker 2:The average YouTube creator probably is inversely correlated in that some of my best videos have taken the most amount of effort. Like top five videos took the most amount of effort. Some creative spark and then a ton of investment in everything from production to the editing process. So Yep. Again, I think YouTube creators certainly deserve to be paid well.
Speaker 2:I have never felt as a, you know, relatively small creator on x that I should be paid. Right?
Speaker 1:There's also the factor of allocating payment accurately. That is very difficult.
Speaker 2:It's so hard. Yeah. What is the value of is a is a Jeremy Gaffan post that gets 30,000 views, that's a lot more valuable to me than a meme that gets a million Yep. Impressions. Right?
Speaker 2:So
Speaker 1:so if a Jeremy Gaffan YouTube video were to go up and YouTube were to run a mid roll video ad in that video, it's very clear that however much the advertisers paid for that specific ad in that specific video, it's very easy to allocate payment based on that. But if you're scrolling a timeline and you see an ad here and then you see a post and then you see an ad here, it's very hard to say this ad was targeted at the reader of this particular post and so you run into these challenges and that's why, TikToks embrace the creator fund, which is just which is just distributed based on impressions. But impressions don't quite weight the quality of the audience, which is obviously incredibly important because advertisers want to get their message in front of customers at particular moments when they're primed to hear the message. Yep. So be interesting to see where it goes.
Speaker 2:Google Capital Bloke says, The AI CapEx trade can't keep going up 2% every day on partnerships, projections, and information articles using twenty thirty estimates. And of course, the AI CapEx trade actually can. Foxconn pops today. Right? Based on just the news that they had a conversation with OpenAI?
Speaker 1:Yes. So the the news Foxconn jumped 8% based on this. They Foxconn shares rise after chairman says he met with OpenAI, plans NVIDIA next. So it's not actually a full deal yet. Frenzied investing in AI has fueled talk of a bubble, but the chairman of Taiwan listed Foxconn the world's largest contract electronics maker says there's much further to go.
Speaker 1:The application of AI is just the beginning. Foxconn's young Liu told local reporters on the sidelines of an event, you know, on Wednesday expressing confidence in the market's potential to keep going from strength to strength. He also said that Foxconn, had met with OpenAI chief executive Sam Altman at the Taiwanese company's headquarters to discuss potential future collaborations. And so the stock jumped 8%,
Speaker 2:on the Let's give it up for discussing future collaborations.
Speaker 1:And, I mean, AMD shares jumped 24% after the chip company announced a multibillion dollar tie up with OpenAI earlier this month, another multibillion dollar announced dipping away Broadcom. Similarly company. So I don't know. I Sam is vertically integrating like crazy. We haven't seen this with a software company so fast.
Speaker 1:I mean, Google eventually did it, but over a twenty year period. And Sam is just saying, want, you know, multiple data center providers, multiple clouds, multiple chips, multiple, you know, fabs. Like, he's really going deep into the supply chain and creating kind of a duopoly at every single phase. And that's really what I'm
Speaker 2:Think about how much pressure there's gonna be on the hardware launch. Like, people are already gonna the average person is gonna be rooting for it to fail. Yeah. And then, actually delivering enough value to earn a place.
Speaker 1:Are you talking about, like, consumer hardware?
Speaker 2:Yeah. The Johnny app.
Speaker 1:Oh, because yeah. The Foxconn would be a logical partner
Speaker 2:That's what I assume the conversation is about.
Speaker 1:Yeah. I was thinking about, like, what what a head fake it would be to be you know, Samson saying, like, it's not a phone. And he's almost been saying, like, it's not a wearable. Like, it's not directly competitive with anything that's out there. Like, what if it is just like an Amazon Echo?
Speaker 1:Like, what if it's a direct competitor to, like, the Alexa? Like, that's actually kind of a great landing zone, I think. The more I was talking about Alexa and Echo, was thinking that, like, yeah, being able to talk to an LLM and that can like, it's a it's a much lower stakes, environment to add add on. Like, I think a lot of people when they think about their their phone, they're like, I'm tied to iMessage. And so I also have the Mac because I'm tied to the phone.
Speaker 1:Yep. And then I also have the Apple TV because I'm tied to the Mac, but I don't feel fully tied to Apple such that I have to have Apple HomePods. And the HomePod was not a massive success because people are like, well, I'll suffer through Sonos, or I'll get a Google Nest thermostat. People have been a lot more open to having an Amazon Alexa and then also or Google Home and then also an iPhone.
Speaker 2:Yeah. Part of the thing with Alexa is the I I bought an Alexa
Speaker 1:Mhmm.
Speaker 2:In college because it was a decent speaker that was cheap. Yeah. And I maybe tried to use the feature, order me some paper towels once. And so my yeah. I guess with OpenAI, it's like if it's just a puck that sits in your kitchen Yep.
Speaker 2:Around your home and is listening all the time
Speaker 1:Yep.
Speaker 2:Is that really gonna be valuable, more valuable than your phone? Part of the draw with Alexa was, you know, you get a decent speaker Yeah. Out of it. At least can
Speaker 1:I mean, OpenAI could figure out how to produce a decent speaker at Foxconn, I'm sure?
Speaker 2:Yeah. But then it's like, is it even really worth doing to go and just compete in the in the, like, low margin speaker market?
Speaker 1:Yeah. I mean, Meta was trying with the the Meta portal. Do you remember that device? It was a a camera that would sit on top of TV.
Speaker 2:Sonos is a $2,000,000,000 market cap company now. Should OpenAI just buy it?
Speaker 1:Equus Global says, Sonos plus OpenAI. I've heard rumors. I don't know where you'd be hearing those rumors, but I don't know. Sonos
Speaker 7:I wouldn't
Speaker 2:be I mean, I wouldn't be surprised. It's like they have they did almost 2,000,000,000 of revenue.
Speaker 1:OpenAI is great at software. Sonos is great at hardware. The the I mean, the speakers look great. Hardware. Yeah.
Speaker 1:The the the speakers look great. And I don't know. There just is a question about, like like, if you're if you're entering these, like, hypercompetitive markets, do you wanna go for the most competitive, like the phone? Sam Altman certainly indicated that he might not pull Hello. Hello in
Speaker 2:the chat. How much paper towels
Speaker 7:has Jordy
Speaker 1:Yeah. Jordy's have assessed paper towels. Specifically, paper towels
Speaker 2:I'll be honest. I have not bought paper towels in at least five years. Yeah. But when I think about buying things in the home setting
Speaker 1:Yeah.
Speaker 2:That's an item.
Speaker 1:You specifically want the lendiest paper towels possible, like paper towels from a company started in the year, January or something. That's like your dream. Always on the hunt for an old school paper towel manufacturer.
Speaker 2:Yeah. I want to know what tree it came from.
Speaker 1:Yes.
Speaker 2:Continuing, Vic says, Derek Thompson said yesterday, OpenAI is an amazing company and these are impressive Also a company losing $20,000,000,000 a year with $13,000,000,000 of revenue, making business deals that project hundreds of billions in future spending with a private valuation of half a trillion is mental. Would think, John, wouldn't you think that at a certain point people would stop if a company it's one thing to be super bearish on a company that has massive losses and very minimal revenue. It's much harder given the history of of companies that are in capital wars. Like, you know, look back at Uber and Lyft, the big critique of Uber was it's losing money. It's never going make money.
Speaker 2:Yep. Have you seen Uber's
Speaker 1:market cap recently? I think it's like 200,000,000,000
Speaker 2:TK?
Speaker 1:Yeah. 192,000,000,000 and a 15 PE ratio. Like, this business matured and is doing fantastically. It's pretty pretty remarkable. Like, they very much, like, fought the capital war and won.
Speaker 1:Like, it's I mean, it's like a testament to, like, they, you know, they they they went out. I mean, Lyft is an 8,000,000,000 market cap. There was a time when those were the spread between Uber and Lyft was like, you know, 2x, 3x, 4x.
Speaker 6:Yeah.
Speaker 1:And now it's and now it's, what, 20x or something like that. Yeah.
Speaker 2:Yeah. So I think it's I just I just think that the company's losing money. Hence, it's Yeah. Crazy that it's valued at a lot. It's just not a good argument.
Speaker 2:Yep. Vic says, stop looking at spreadsheets. Go try out Codex. If anything, they're undervalued.
Speaker 1:Stop looking at spreadsheets. Go try out ADIO, customer magic. ADDIO is the AI native CRM that builds, scales, and grows your company to the next level. You can get started for free. Also, it's the one year anniversary of the first playable Chromatic going on display at the Portland Retro Gaming Expo.
Speaker 1:This year, they're returning with the first playable m
Speaker 2:six Portland has a retro gaming expo. That's extremely on brand. That's extremely Portland. Gotta give them credit for that.
Speaker 1:This seems maybe we should dispatch Tyler to the Portland Retro Gaming Expo to go try the first playable m 60
Speaker 2:That would be cool. I think we'll be able to get one of these pretty soon.
Speaker 1:I'm really excited.
Speaker 2:We can have Tyler can just spend a whole show
Speaker 1:Beat GoldenEye.
Speaker 2:Playing the mod retro and
Speaker 1:I wonder how fast you could speed run GoldenEye. Games back then were so short. They just didn't make hundred hour games. So people would people would speed through them. This is what else is here?
Speaker 1:How'd you sleep last night? I got a ton of sleep, but I slept poorly because I'm not feeling too well. I'm under the weather. I got a 61% on quality, 79 overall. Go to 8sleep.com.
Speaker 1:Get a Pod five.
Speaker 2:I slept My tracker got messed up because of
Speaker 1:hours and forty minutes.
Speaker 2:This is a little one, so it's not.
Speaker 6:I had
Speaker 1:We gotta hit the gong again for Rahul and Julius because you can now connect Julius to your Databricks. Let's go.
Speaker 2:Break. Get that. This is about a post.
Speaker 1:Matt We're protesting for this.
Speaker 2:Matt Slotnick posted 07/16/2025. Bold case for nothing ever happens is that OpenAI runs its entire business on Salesforce and Slack. And this was in a blog post in an OpenAI employee posted. They said an unusual part of OpenAI is that everything, and I mean everything runs on Slack. There is no email.
Speaker 2:I maybe received 10 emails in my entire time there. If you aren't organized, you will find this incredibly distracting. If you curate your channels and notifications, you can make it pretty workable. We gotta ask Benioff, does anything ever happen?
Speaker 1:In which way which way does the deal go? Because Salesforce has a deal with OpenAI. Everyone assumes it's to buy a lot of tokens from OpenAI, but maybe it's a trade deal. You get you get your Salesforce installation. The money, it's one of those circular deals.
Speaker 1:Salesforce for tokens.
Speaker 2:Zephyr is sharing Broadcom's fifth customer isn't Apple or XAI. It's Anthropic. They won't design a new chip. They will be buying TPUs from Broadcom.
Speaker 1:That's very interesting that they're not buying them directly.
Speaker 2:Expect Anthropic to announce a funding round from Google soon.
Speaker 1:Yeah. The Anthropic thing has to heat up soon because Google like, it's it feels like Google might be doing something. That's what Zephyr at least thinks. But then you also have Amazon partnering with Anthropic for a long time and probably ramping that relationship up. It seems like it would make a lot of sense for them to ramp that relationship up again.
Speaker 1:And then some folks on the timeline were talking about how how Apple might make a big acquisition. But maybe Anthropic's too big to make, but maybe even just a deal there would make a lot
Speaker 2:of sense. So Google already invested in Anthropic? Yes. They own They own
Speaker 1:a bunch.
Speaker 2:14%.
Speaker 1:That's a lot. It's pretty remarkable.
Speaker 2:How much does Amazon own?
Speaker 1:I don't know. Look it up. But, well, you do. Let me tell you about public.com investing for those who take it seriously. They got multi asset investing, industry leading yields, they're trusted by millions.
Speaker 2:Amazon owns an estimated 15 to 19% of Anthropic. Mhmm. And it's so funny to me based on the way on Anthropic's brand Yeah. Yeah. Approach Yeah.
Speaker 2:All these different things, the way that that you have OpenAI's cap table which is owned by a nonprofit.
Speaker 8:Mhmm.
Speaker 2:The employees own a ton and then VCs are like at the very bottom. Right?
Speaker 1:Yeah. Just
Speaker 2:carving out a little bit. Meanwhile, Anthropic is like Amazon, Google. Like, it's big Yeah. Big, basically
Speaker 1:Tyler, did you see this Eliezer Yudakowsky post? He, quote posted barely AI. The Financial Times projected OpenAI's cap table following its for profit transition. Microsoft gets 30%. OpenAI employees get 30%.
Speaker 1:OpenAI nonprofit gets between 2030%. SoftBank gets 10, and then the VCs get, less than 10%. And Eliezer said, I wonder how the financial magnitude of this theft compares to the total amount of theft in the twenty first century so far. Wouldn't surprise me if it's a majority. Is he talking about that he wants the VCs to have a larger ownership stake?
Speaker 4:I assume. Yeah.
Speaker 1:Yeah. He must be just really because typically, a company of this at this scale, VCs could own 60%, but they're sort of getting hosed. And so Yeah. LAs are standing up for the venture capital.
Speaker 4:Yeah. He I
Speaker 2:so that's
Speaker 4:what he's speaking up for for Josh.
Speaker 1:Yeah. I would imagine. Just just bigger ownership stakes would have been more. I I don't know if it's technically theft, but, I mean, he maybe he's using that kind of in a loose in a loose way.
Speaker 4:I think we need a some kind of Robin Hood figure to to to take from the rich and give to
Speaker 1:Yeah. Thrive. Yeah. Exactly. Yeah.
Speaker 1:Yeah. Take take the the nonprofit shares and just distribute them to the venture capitalist. That that's probably what he wants. That's what he's advocating for. Did you see Flock Alpha launch today?
Speaker 1:We should pull this video up at some
Speaker 7:point,
Speaker 1:but they did it. Flock launched a American made public safety drone response system. We were talking to the CEO of Flock Garrett about the role of drones, how you could potentially call a drone to escort you home, how you could dis how you could dispatch a drone to an emergency situation, start monitoring the situation. And they did it, and they're launching Flock Alpha today. Raul says, five years ago, I stood on the rooftop of my police station and imagined this moment.
Speaker 1:There's no better feeling than seeing a vision come to life. I do not have kids yet. Which is a good good point. And so the the these can go on the top of all the police stations. The police stations, as we talked to Garrett about, are already, like, geographically distributed across a city in a very equidistant way.
Speaker 1:And so as long as the drones can get from one station to the other or halfway from one to the other, you can basically have full coverage of everything. And so you can read license plates.
Speaker 2:Has there been a black mirror on drone, you know, drones for police that that go rogue?
Speaker 1:I'm sure
Speaker 2:there's been
Speaker 1:some stuff. But this is yeah. I mean, surveillance generally.
Speaker 2:This bad. Nakun says, accidentally said sales instead of distribution and they kicked me out of SF. Gotta use the lingo. Sales is evergreen.
Speaker 1:Yeah. I I thought it was growth though. People say distribution now? I thought people would wait. We're I thought sales was fully rebranded to growth.
Speaker 1:People would be like, yeah, I'm on the growth team. And it's like, you're on the sales team.
Speaker 2:Don't think it ever
Speaker 1:No. Now it's under distribution. Well
Speaker 8:oh, well.
Speaker 2:I gotta we gotta ask, Benioff about sales specifically. Yeah. Like, what what reps are Yeah. Actually outperforming today? Is it the reps that have adopted the most AI and have just increased volume?
Speaker 2:Or is it it reps is it doing things the old fashioned way, which is like actually getting getting to know existing and potential clients on a deep level and developing trust and and, you know, making sure they're getting great service, etcetera, etcetera? Karina Nygens says, after a formative time at OpenAI, I'm launching Maison AGI, a fashion house creating cultural artifacts for the AI era. Our first collection Relic of Thought is a collaboration between Ilya Setskiver featuring his original artworks alongside his signature hat modeled after his iconic
Speaker 1:They're actually doing this. Wow. Do
Speaker 2:they have a picture yet? Yeah. We we have to pull
Speaker 1:this video up at some point.
Speaker 2:It is a study conviction and the clarity of vision that gives thought its form. We believe we're living through something extraordinary that deserves to be remembered, not in research papers or technical model cards, but intangible objects we can hold, wear, and pass down. Working alongside some of the world's brightest researchers building Claude and Czacchiuti, I've come to realize they're among the most creative minds alive. Research, at its best, is an act of imagination, the ability to glimpse what doesn't yet exist and then build toward it. Many of them remain unseen even as their work quietly reshapes our future.
Speaker 2:Though AGI progress can feel incomprehensible from the outside, its story is deeply human, full of curiosity, conviction and creation. We're bridging that world with the creatives who give form to ideas. This may be humanity's last time to create a handcrafted project before what we build surpasses us. Each collection is also a message to super intelligence itself that we cared and that we tried to make beauty out of understanding.
Speaker 1:Can we play this video? I wanna see what how they actually launched this. Karina Wynn left OpenAI to do this. That's a bold move. You know, been on a tear, you know, and now launching an entirely new
Speaker 2:Bold to be post economic and pursue
Speaker 1:the I guess you're right.
Speaker 2:Become a patron of the arts?
Speaker 1:Who knows?
Speaker 2:Who kind of a classic playbook, John.
Speaker 1:It is. It is. It is. It is. We'll try and pull that up in the meantime.
Speaker 1:Let me tell you about adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe. The chat has been on fire. Mark Benioff is, a little delayed.
Speaker 1:We're gonna remix the schedule a little bit. He will be joining later the stream. Taylor Hodge has a great take. He says that he's gonna use a trained Falcon to take down the flock safety narc drone. I wouldn't be surprised if we see a little bit of that.
Speaker 1:Hopefully not. I think that's wildly illegal. You can't just, you can't just sabotage police equipment. You have to take it to the voting booth, Taylor.
Speaker 2:What if it's flying over your prop private property?
Speaker 1:I mean, I'm sure that there are, what what is it?
Speaker 2:The You train the Falcon you train the Falcon to fly, like, low enough that, you know, there must be some law that, like, if it's within know, a 100 feet of the ground, it's fair game to take it out.
Speaker 1:Yeah. The I think that, you know, the police can drive up and down
Speaker 6:the street.
Speaker 2:Drones have to have search warrants to go fly around your property.
Speaker 1:Inside your house, but not, like, you know, on the street. A a police can a police officer can just drive down your street. No problem. Shine the lights. Say, oh, is anybody breaking in?
Speaker 1:Like, you know, that's that's helpful in many ways. You want that. You want, like, a secure environment. Ideally, this is why we live in a democracy. We elect the Yeah.
Speaker 2:Imagine if the the The UK right now let's let's just be real. Be very know, that I don't believe there's a lot of free speech left in the in The UK. Imagine if they had this set up and that you could if you send the wrong post, the drone is actually at your at your door.
Speaker 1:I think that might be overblown. I don't know. I feel like I who have you talked have you talked to people in The UK that say it's bad? Or is it all just like American posters who are taking victory laps? Because I love an American victory lap.
Speaker 1:Don't get me wrong. I will jump on any opportunity to to wave the American think there's
Speaker 2:plenty of posts from people that are based in The UK. Yeah.
Speaker 1:So I got arrested for posting the midwit meme about my enemy. And I got I I depicted I depicted my enemy as this as the sad Wojak and me as the Chad Wojak and
Speaker 2:The trained falcon taking out the the the drone is too good.
Speaker 1:It'd be great.
Speaker 2:It's been the perfect form factor.
Speaker 1:Do we have this
Speaker 4:We have Dante. Should we start early?
Speaker 1:Oh, yeah. Lay out. Yeah. Let's bring in Dante. Speaking of drones, underwater drones, we got Dante from Albacore coming in.
Speaker 2:Amazing name.
Speaker 1:Yeah. Great name. There he is. Dante. Welcome to for joining us.
Speaker 2:Fantastic. On. Fantastic name. I thought we were out of incredible names, but Albacore is strong. Albacore is a great one.
Speaker 2:It's amazing.
Speaker 1:I I like of
Speaker 9:the ring stuff was taken, so we had to get creative.
Speaker 2:Go into the tuna section.
Speaker 1:Do you know the, the the headline that, is is in the the the group chat is YC backed albacore swims into 6,500,000 seed round. I love it.
Speaker 2:Hit that, Gong.
Speaker 9:We've heard it all. We've heard Gongs about making marathon funds.
Speaker 2:Congratulations. It's great stuff. So,
Speaker 1:yeah, take us. Who is in the round?
Speaker 9:Yeah. So lots of folks. It was led by Outlander. We also have our first institutional thank you, Paige and AJ. Yeah.
Speaker 9:Our first institutional backer was d three, which is a very drone focused fund. They're sort of mix of US and and Ukraine investments, but they they backed a lot of folks like, Niras. I've got
Speaker 1:the They made two sequels to d one Capital. We're on d three now. No. We're never gonna go
Speaker 2:out names there. You just go to d four and then d four. D five. And eventually, you go to d ten, d eleven.
Speaker 1:Yeah. A 17 z is gonna be a ripper for sure. Mean, how
Speaker 2:Who else? Sorry. We got we interrupted.
Speaker 9:Oh, yeah. No. All good. All good. Yeah.
Speaker 9:So, Brave Capital, which is a bunch of ex In Q Tel people.
Speaker 1:Cool.
Speaker 9:R squared, which is a national security focused fund. Managing partner there is a Navy Seal commander, Rhodes Scholar who's on multiple national security councils. That's great. That's great. A a lot of different a lot of different investors.
Speaker 9:You got Group in there. They're in New York
Speaker 1:based fund. Group. A ton
Speaker 9:of different stuff. Yeah. They've they've done a a lot of defense. I think they they also did. Mock Industries
Speaker 1:Oh, cool.
Speaker 9:Pretty recently. Yeah.
Speaker 3:How'd you get
Speaker 1:into this?
Speaker 9:Yeah. So prior to this, I actually started a a battery tech company, and this was, like, while I was in college and really quickly identified. We were working on, like, power systems that were high performance but would make batteries for, like, really sort of complicated use cases last longer. And so that led us to the aerospace and defense market, did a lot of work with drones and started thinking about the power problems there. Right?
Speaker 9:You know, the the issue with drones is you're really limited in terms of how far things can go. And that problem just gets harder and harder when you start thinking about the oceans. Right? Because oceans are really big. You know, the people talk about in the Indo Pacific, the tyranny of distance.
Speaker 9:And so I was at a Shabbat dinner, ran into this guy, John, who I'd known for a while through mutual friends, brilliant engineer. Can't share too much about what he was doing before this, but he's worked on some major unmanned systems production type projects, very knowledgeable about the sector. And I was like, John, why why do underwater drones have just, like, such niche use cases? Right? They're very focused on short range, you know, very human in the loop type of operations.
Speaker 9:There's nothing like an undersea loitering munition that we have right now, and we really need, like, longer range capabilities for anything that's happening in The Pacific. So that's what we're working on.
Speaker 1:So is that, like, distinctly positioned against, like, the dive LD program from Anderol? Like, how do you see like, that seems like a bold company to go up with against you know, it's a great company. It's funny that you mentioned some of Dive. Right?
Speaker 9:Yeah. I mean, so actually, the the founders of Dive were were also investors in us really early on. Sam Sam Rutzon, Bill Lebow. They're super knowledgeable about the space, obviously. I was actually just with them earlier this week in Boston.
Speaker 9:Yeah. So so the Dive platform is focused on going really deep and doing survey type work. We're working on loitering munitions. We're we're working on stuff that blows up. So you can fit a 250 pound explosive payload our vehicle, and that's enough to do really severe damage to a large service vessel.
Speaker 9:And if you're lucky enough to find a submarine, to to sink that submarine.
Speaker 1:Wow.
Speaker 2:And so what are the kind of, I don't know how much you can share, but, like, what what's the goal in terms of for like, the timeline of a loitering munition? You wanna go out, effectively park it somewhere strategic, and then it's just kind of playing a waiting game before you would wanna activate it and have use it for for a certain use case? Like, how long do you want one of your drones to be deployed without any sort of, like, human or machine intervention?
Speaker 9:Yeah. So we're targeting thirty days for endurance and a thousand nautical miles. And to kinda put that in perspective, the dive vehicle, which is, you know, couple thousand pounds, that's less than a week and a few 100 nautical miles. And as you get to the the size of vehicles that that we're building, you know, our vehicle is, like, two man portable. And our our lead software engineer claims that he can bench one of our vehicles.
Speaker 9:So Let's go. Yeah. He well, he's he's really strong.
Speaker 1:The best news I've heard all day. That's amazing.
Speaker 9:Well, he actually he just got one of his fingers cut off, and so Oh, no. Not related to his work here. But, once his fingers are healed up, he says he's ready to do it on
Speaker 2:the Cut off?
Speaker 9:Yeah. Yeah. He works on a tall ship, and so, yeah, a log fell on his hand. It's a long story. But
Speaker 2:Brutal.
Speaker 9:He can still pipe faster than anyone in his in the office. So But
Speaker 2:that's, you lose a finger, though. That's that's, 10,000 aura points. For sure.
Speaker 1:That's like eye patch level. Yeah. You're
Speaker 9:We we docked his salary by 10%.
Speaker 1:Oh, stop. That's so rude. Stop it. That's very dark.
Speaker 2:What, what what's your path to program of record? How are you attacking? Yeah.
Speaker 9:I mean, so, contracting is is changing really, really fast. Right? The current administration is doing things very differently. And you can get pretty far without a program of record, but, I'm not sure if you're familiar with the defense autonomy working group that that just got released. There's a lot of things that are that are moving through programs like that with with SOCOM.
Speaker 9:You know, IndoPaycom has various flush funds that are available, and we're, you know, we're focused on on really connecting with the operators and making sure that, you know, from the start of founding this company, we were really talking with with end users, the people who are gonna be at the tip of the spear in the Indo Pacific who'd be using this. But you also have to go once you have an understanding of those requirements, you have to go to congress too. And so we we were actually lobbying congress ourselves within the first couple of months of starting the company. We've since moved on to we work with a firm now. But, yeah, you have to basically approach it from all angles, and, you know, there's also a lot of, you know, f m FMS interest as well.
Speaker 9:So can't get too much into specifics there, but there's a lot of companies that have been really successful with a a route to commercialization that consists of a number of different buyers. And, you know, largely speaking, DOD can be, really appreciative of of FMS as well, because, I mean, you can reach larger scale and, you know, potentially even battlefield test your systems.
Speaker 2:Are you guys based in the Gunda?
Speaker 9:We are not. We are based in Philadelphia, actually.
Speaker 1:Is isn't there is is there a robotics program out there? Is that why?
Speaker 9:There's a lot of great stuff about Philadelphia. We're super close to Washington, DC where a lot of the, you know, customers that we'd be speaking with are are based. Mhmm. So it's a very quick trip. We can get up here on, you know, very short notice, which is important.
Speaker 9:There's also a lot of great engineering and industrial talent in Philadelphia. And so I know there's not, like, too many hard tech companies that are based here. There's one they got pretty big called Ghost Robotics. They make, like, robot dog. That's me.
Speaker 9:Yeah. But we're we're based in the Pennovation Center right now, which is where Ghost Robotics started. Sure. And we have lots of access to brackish water just right next to our offices. And, yeah, I mean, Philadelphia has a really rich shipbuilding history.
Speaker 9:And, you know, recently, the the naval yard, it's it's being re industrialized, but it's it's actually not owned by a US company anymore. And so we want to build the sort of next generation of maritime capabilities in Philadelphia and, you know, help sort of foster more of that industrial labor force here that's still, you know, really strong.
Speaker 1:Amazing. Does your office have a pool?
Speaker 9:So we're getting a giant fish tank and also a turtle. Turtle. But we don't currently have a pool. We have limited limited space.
Speaker 2:Okay. What kind of fish tank do you need to make sure that, like, a presumably metal drone doesn't doesn't, smash through the glass?
Speaker 9:It's gonna be a pretty big fish tank. I don't know. I'd have to look into the specifics more.
Speaker 2:Yeah. You know, we
Speaker 1:call Keith our boy. He's he's got a big fish tank.
Speaker 2:Oh, yeah. He does.
Speaker 1:Famously fish, fish tank build.
Speaker 2:Thank you so much for coming you. I'm sure you'll be back on soon, and congrats on on the milestone.
Speaker 9:Yeah. Yeah. Thank you, guys. Been a while. Talk to you later.
Speaker 2:Yeah. Have a good one. Cheers.
Speaker 1:Bye. And if you're interested in some hardware for your wrist, head over to getbezelgetbezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch. Andre Karpathy launched a new repo, NanoChat.
Speaker 2:Repo alert. New repo alert.
Speaker 1:Did you see this, Tyler?
Speaker 4:Yeah. Yeah. It's super cool.
Speaker 1:This is among the most unhinged he's ever written. 8,000 lines of code to actually build basically ChatGPT from scratch. Is that how I should understand it?
Speaker 4:Yeah. So he he's done he's done this whole like course lecture series on YouTube before Yeah. Where he goes through like different parts of how to train a model. Yeah. And then this is basically kind of all of them together plus some extra stuff.
Speaker 4:So it's training the full model. It's doing the pre train. Yeah. And it's also doing the RLHF to get it into like from predict Internet text to be like a chat model.
Speaker 1:And it's just using open source data sets basically
Speaker 2:for Yeah.
Speaker 4:Yeah. I forgot the exact name but there's a a good like RLHF dataset that you can use to to get it to become like a chat.
Speaker 1:It's pretty remarkable. Is this so this is mostly for, like, educational resources?
Speaker 4:Yeah. I I think mostly. I mean, like, presumably, you'd have to run this on a much bigger scale to get, like, a really kind of capable model. Yeah. But yeah.
Speaker 1:What what was your interpretation of the hot take that somebody asked? Curious how much of the code was written by hand. And Andre Karpathy says, good question. It's basically entirely handwritten with tab autocomplete. I tried to use Claude slash Codex agents a few times, but they just didn't work well enough at all in net unhelpful.
Speaker 1:Possibly, the repo is too far off the data distribution.
Speaker 4:That's kind of interesting. I I think part of it is that, like, the end product of this is, like, the repo itself. So you want very, like, nice code that is very readable. It's in his style. I mean, he can, like, explain everything super easily
Speaker 1:Yeah.
Speaker 4:Which is, like, a little different from if you're building, like, actual product or or just like a vibe coding thing where the the endpoint is just like the interface. It's what you're actually like using where this is like the code itself is the product. So you're you're it's like you need super nice, you know, formatting and Yeah. All this, like, kind of custom stuff.
Speaker 1:Do you feel that, like, like the the whether or not the task is in the data distribution when you're firing off Cloud Code or Codex agents? Like, are you noticing that it's like, okay. Well, clearly, you know, there's plenty of data around how to build, a a mobile a a modal or, you know, some sort of, like, REST interface. And so it's really good at that. But if you're trying to do something that's, you know, probably a unique problem that there might not be, like, a direct open source example of, like, you're gonna try and code it from hand?
Speaker 4:Yeah. That's probably true. Like, I I find it's it's it's really good at writing React code and, like, tailwind CSS components. And then when I try to do some, like, custom, you know, AWS flow, it it's it's a little harder. Interesting.
Speaker 4:And it just takes longer, but I still find it's it does it very well.
Speaker 1:Yeah. Jordan, did you see that Tyler Cowen put the timeline in turmoil, taking shots at Europe? So Tyler Cowen, we talked about this yesterday. He said that, the European Union is run by, people who have an incredible depth of knowledge in a bunch of different areas. And if they ran the world, the world would be growing at negative 1% growth and, and is a pretty pretty hot take.
Speaker 1:Cassie Pritchard said, never understood why people liked this quote. The EU does exist. It is run by people like this, and it does not have a negative 1% growth rate. I'd say that's about the typical sharpness of analysis for Tyler Cowen, though, taking shots at Tyler, friend of the show. And young macro says, difficult to overstate the extent to which you need to be underexposed to macroeconomic data to think that Tyler Cowen diagnosing Europe's growth as anemic is some sort of contentious statement or that his negative 1% hyperbole is anything but mild and contextually entirely suitable.
Speaker 1:Young macro continues and says
Speaker 2:I will defend Tyler Cowen.
Speaker 1:I will defend Tyler Cowen with my life. Difficult to overstate the extent to which one's large audience must skew uneducated for this take to pass through with broad based support, nothing to do with pedantry. 10 out of 10 pedantic domain experts would say Taylor Tyler's quote is quite fine. Tyler Cowen, there's no way a regular guy would lose to a hobbit in a fight. A regular guy is what?
Speaker 1:Six feet. No chance. Person who has come across height as a concept as insufficient number of times an insufficient number of times to be up to speed with baseline magnitudinal intuitions ecstatic, at the gotcha after googling the average male height is five nine, actually. Having a lot of fun on the timeline. Wow.
Speaker 1:And Cassie Pritchard's really going back and forth, the young macro. One of the greatest up and coming posters. Should we watch this clip from Roloff Bota from Hit it. Unitched. Unitched.
Speaker 1:The Unitched. He is the steward of of Sequoia, Roelof Bota. Here. Let's hear it.
Speaker 2:One of the greatest stewards of capital in history.
Speaker 1:Yeah,
Speaker 8:Tim. It doesn't support the numbers. So there was lot of analysis back in the nineteen seventies and eighties with, you know, the capital asset pricing model, and people figured out that there's this asset class that supposedly has uncorrelated returns, and a bunch of asset managers deemed that they need to invest a certain percentage of their endowment or foundation or pension fund into this thing called venture capital. If you look at the data, they're basically 20 companies per year on average over the last twenty, thirty years, then have ended up being worth, in realized exits, a billion dollars or more. Just 20 companies.
Speaker 8:Despite a lot more money plowing into into venture capital, we haven't seen a material change in the number of companies that are outcomes that are that large. And I think part of that is that there's a lot more talent than really interesting ideas or interesting companies to be built. And I think we're spreading a lot of that talent thin right now, similar to what happened in 1999, by the way. Yeah. So when you look at the data, the amount of money going into venture capital right now in America is in the order of 250,000,000,000 a year.
Speaker 8:And the numbers, you know, these are all estimates. Let's just say it's $250,000,000,000 a year.
Speaker 1:You need
Speaker 8:a lot of exits. Well, let's just do some very simple arithmetic for a second. $250,000,000,000 going in every single year. If you assume that the firms generate 12% IRRs net, net of fees and carry, which isn't that great, by the way. I mean, over the last three or four years, the Nasdaq has compounded at 17%.
Speaker 8:Right. Let's just say 12%. Not spectacular. You're basically just average performance. You'd need a 3.7 x On
Speaker 3:ten years.
Speaker 8:On a seven year exit horizon. So I'm being a little bit aggressive. I mean, maybe it won't even be that good. So 3.7x on $250,000,000,000 That approximates to a trillion dollars a year. Coming out.
Speaker 8:Coming out. By the way, investors own. So let's say that the investors own two thirds of the company, to make the arithmetic simple. That's 1,500,000,000,000.0 annually in company exit value. Yes.
Speaker 8:Just think about that for a second.
Speaker 2:Where is
Speaker 8:that coming from? Well, Figma's worth what? It's lot. 40 But it's ish billion. I mean, that's Let's say it's worth, you know, 300,000,000,000.0.
Speaker 8:So, you know, if you start thinking in trillions and Figma gets you point o 3,000,000,000,000. You need thirty, forty, 50 Figma's every year Yeah. To make that arithmetic
Speaker 7:Figure by week?
Speaker 8:It just I don't see that many companies of that scale every year. So the only thing breaks is the return assumption doesn't hold. Yeah. And so venture is a return free risk. Not a risk free return.
Speaker 8:That's terrible. Are Black pill. Investing in the index or holding t bulls, honestly. And so I don't think venture is an asset class. Asset classes scale if you add more money.
Speaker 8:You can build more real estate. There's a lot of equities. There are, you know, trillions and trillions of bonds to be purchased. Venture capital doesn't scale with more money.
Speaker 2:I mean, the most important, I mean, takeaway here is Bobby's question in the chat. What's on the risk? Risk risk check. We'll work we'll work on that.
Speaker 3:We will
Speaker 1:we will get to the bottom of that.
Speaker 2:Venture return free risk is a crazy line. Yeah. Taking shots. But there were some good Back in the follow-up from Hari Yeah. Raghavan.
Speaker 2:He said, obviously, Roloff's a legend and one of the smartest people in the valley but I'd love to dissect this, add a bit more nuance to this. I completely agree with his directional point that most of VC, everyone but top decile sucks as an asset class, but I think the same is true of hedge funds and the top quartile's less risky asset classes like real estate, etcetera. But the nuance is that the true venture capital segment formation through series a or modest series b is probably 20,000,000,000 a year, maybe 25,000,000,000 because the remainder of the $250,000,000,000 is really private equity being deployed by a VC firm. When you take it down in order of magnitude, the exit expectations make a lot more sense for true VC that is over, let's say, eight to ten year horizons, four to five x. So 100 to a 125,000,000,000 in investor ownership at 150 to 200,000,000,000 in exits.
Speaker 2:For the PE growth equity class, theoretically, at 1.7 to two x, clear similar hurdle return because the hold periods are say three to five years from series d, e, etcetera. Works out to about 350,000,000,000. So the total now comes out to 400 to 600,000,000,000. Nothing to sneeze at, but not 1 and a half billion. And then you don't need 50 Figma's a year, but 15.
Speaker 2:And more importantly, if a unicorn is a home run, a deck of corn is a grand slam, we're seeing more of the centicorn, which I
Speaker 1:guess crown. Let's go for the horse race analogy, switching out of baseball into horse racing.
Speaker 2:And he says because you could have 15 Figma's or literally one OpenAI.
Speaker 1:A centicorn, if a unicorn's a home run, a decacorn's a grand slam, a centicorn should be like a world's wear a World Series clean sweep, something
Speaker 2:like that.
Speaker 1:Like, you won the whole see the whole season.
Speaker 2:You're saying, I'm not saying we'll have one OpenAI per year. That'd be crazy. But we could see per year one in Tropic, Stripe, Databricks, etcetera, two to three or sorry, three to five Figma scale outcomes, 20 times Wealthfront scale outcomes. Wealthfront obviously was recently acquired by Gusto. All we have to do is adjust that there are 20 unicorns a year for inflation, and that's very plausible.
Speaker 2:And that gets us to $400,000,000,000 in exit value. Markets are so much bigger than they used to be. Ten years ago, we had $0 companies. He says, maybe I'm just too much of a techno optimist. And a vol comes in with the reply and says, nailed it.
Speaker 1:Correction on Wealthfront. Wealthfront's independent. You're thinking of a different company. Wealthfront's the robo adviser.
Speaker 2:Oh, gusto guideline.
Speaker 1:Sorry. Guideline. Somewhat different. Yeah. The the interesting, like, nuance here is how, like, how weird OpenAI is.
Speaker 1:It just breaks the venture model because, yes, it is, you know, maybe gonna put up a trillion dollars of value. But as we saw the venture ownership, Roloff was saying, it'll be 50% venture owned, and that's not the case for OpenAI. And then also, it just completely breaks the whole model of, like, who's founding these companies. Sam Altman's, like, much more experienced, much older than, you know, some Gen Z needle in the haystack founder that you can pick out and get, you know, 20% of the company for for $10,000,000. That just wasn't the nature.
Speaker 1:Like, the one of the first venture deals we talked about with Thrive was, what, a 150,000,000 at, a $12,000,000,000 valuation. It was, like, you know, building, like, a 1% ownership in the firm. And so Yep. It's it's it's it's like even it's such it's just such an outlier. But this thing that's the game of venture.
Speaker 1:Right? It's the game of venture.
Speaker 2:OpenAI just hired prize winning black hole physicist Alexis Loops Lusaszka as the first member of its new OpenAI for Science team per Axios. Mhmm. Good timing here, because they are leaning more into science. Lupe Saska is a Vanderbilt professor known for his work on black hole photon rings, and now he will help shape how GPT-five tackles advanced math and physics problems and guide OpenAI's push into scientific discovery. VP of Science Kevin Weil said GPT-five can already perform limited novel scientific research, calling it the worst AI model you'll ever use again.
Speaker 2:I got to meet Alex earlier this year. And I said, OpenAI should hire you. Going to hit him up after this and say I'm sure said something like that that sound that that sounds like it'd be fun. I'm sure they were probably already talking at that point. So, not the most original idea, but, awesome guy and super excited for him to be over at OpenAI.
Speaker 1:Yeah. Well, we should prep for our next interview, with, Isso Kant, from, Poolside. The news that we'll be digging into at some point during the show is a giant new AI data center is coming online to the epicenter of air America's fracking boom. We talked about this yesterday, but CoreWeave is partnering with them to build a a massive data center on more than 500 acres of land that sits on a sprawling ranch in West Texas. The site is owned by the Mitchell family, which has run oil and gas companies which has run oil and gas companies for decades in the state and is located in the heart of the fracking boom.
Speaker 6:Alright. We
Speaker 4:got our next guest coming in.
Speaker 1:Okay. Let's bring him in to the TV panel. Welcome to
Speaker 6:the show.
Speaker 1:How are you doing?
Speaker 7:Hey, guys. Good to see you. How are you doing?
Speaker 1:We're great.
Speaker 4:So
Speaker 2:pumped to have you. Yes. If if for people that are watching yesterday, we were reading through the article about your guys' new project Yes. In West Texas. And I was like, poolside?
Speaker 2:Like poolside's going this hard?
Speaker 1:Yes. So please
Speaker 2:And when we realized that it was you, we we were pretty excited.
Speaker 1:Yeah. So please tell us the the the story of the company. Could you can you start kind of at the beginning, little bit on your background, then the first act of the company because it does feel like you're at a very unique moment in the company history.
Speaker 7:Yeah. So my story in this space actually started I was listening a couple of minutes before to your interview. Yeah. You were talking about Andrej Karpathy Yeah. Him writing code.
Speaker 7:I've actually never said this. My story in this space started because Andrej Karpathy wrote an article in 2015 called the unreasonable effectiveness of recurrent neural nets.
Speaker 6:It's one
Speaker 7:of the early kind of blog posts about language models. And it captured me so much that I ended up pivoting my entire company towards it called Source. And we spent the next four or five years building language models that were capable of writing code.
Speaker 8:Mhmm.
Speaker 7:Sounds great today. Back then, 50 people in the world cared.
Speaker 1:Yeah.
Speaker 7:And but 2015 was an interesting moment in time because it was followed the year after by AlphaGo coming up.
Speaker 1:And
Speaker 7:at that point, I built probably an unreasonable conviction that the combination of language models and reinforcement learning should be able to generalize to, frankly, anything and everything that you can approximate, including human intelligence. And, that was kind of my origin story. I met my cofounder in 2017. He was a CTO of GitHub. He made an acquisition
Speaker 2:Good job. That company. Wait.
Speaker 1:You you mean an acquisition offer for what company?
Speaker 7:So GitHub made an acquisition offer for my company in 2017 because we have the world's first code completion models that were working back then.
Speaker 1:Makes sense.
Speaker 7:Turned down the offer, but nonetheless became really good friends. And this company ultimately ended up not succeeding. We were too early. And so you can kind of figure out what happens when on November 2022, you see Chachi PT come
Speaker 1:up. Yeah.
Speaker 7:Right? It's everything you've been saying for years kind of into the void somebody else just did and did it in an incredible manner. And so it kinda gave this really deep realization in that time that everything was about to change. It was kinda like a pre post electricity moment. Like, we're gonna truly fully reach human level intelligence and go beyond.
Speaker 7:But the narrative at the beginning of '23 was all we have to do is skill language modeling. Let's just size them up, predict more tokens on the web, and just fundamentally disagreed. So, you know, the our our view, and it's why we started Poolside two and a half years ago, was that reinforcement learning was gonna become the most important scaling access for model capabilities. First eighteen months of the life of our company, that felt like one of the most contrarian opinions you could hold. I think today, it's it's it's clearly not anymore.
Speaker 7:Yeah. But that's kind of our origin story and why we decided to build a foundation model.
Speaker 1:And what was the what was the go to market that you had in mind? I mean, we've seen the the market play out where there are, kind of, like, synchronous IDE based code completion, tab completion models. There's a lot of custom models in that world, almost like I call them, like, prosumer use cases where I hit GPT five and it winds up writing code, and I didn't even ask it to. And then there's the codex. There's Cloud Code.
Speaker 1:There's agents. There's Windsurf. There's Cursor, and there's so many different positions. Like, how did you see the market map develop from your world?
Speaker 7:So we bring it back to, like, what ultimately our mission is. Right? We're here to to reach human level intelligence and go beyond. And in that world, intelligence in our view is a commodity.
Speaker 3:Mhmm.
Speaker 7:It's actually a commodity that gets created by only a small number of companies because of the sheer amount of resources and kind of compounding efforts that go into it. But I think at the limit, we're not gonna find very large differences between one foundation model and the other. And so I think as a foundation model company, you're in two businesses. You're on one hand in the what I often refer to internally is that the barrels of oil business. Yeah.
Speaker 7:Right? You're just selling your tokens behind an API, and that's your commodity business. And in a commodity business, you care about cost and scale. And they'll come back to a little bit why the info project's so important. Yeah.
Speaker 7:The second though is what do you choose to do with that commodity? Right? Once you have intelligence available to you, who do you wanna be for? And from day zero, we want it to be for the world's, frankly, knowledge workforce. We want it be for the enterprise.
Speaker 7:We want it to be for the world's most, like, high consequence environments. So our models are now rapidly progressing in capabilities. It's it's definitely been nonlinear and now we see a path to be at the frontier.
Speaker 1:Mhmm.
Speaker 7:But when we weren't at the frontier, we kind of decided to cut our teeth in a go to market area, which is really no one else was out, which was defense and and government.
Speaker 1:Oh, interesting.
Speaker 7:And so kind of our first customers were not just building the model, but also putting all the crazy enterprise stack to be able to deploy it anywhere. Like, literally in workstations and Humvees all the way to, like, the larger models and, like, air gapped environments or gov clouds or places where you needed ATOs. And now we're kind of on track to start expanding out of that defense sector and going into the wider enterprise. Not just with coding agents, by the way. That's been our really our starting point.
Speaker 7:It was our view that's where the market was first gonna go adopt. For frankly, not a very intelligent insight, just the fact that developers we've always been the first adopters of technology. Yeah. Yeah. So it's kind of clear that that was gonna happen.
Speaker 7:And
Speaker 2:And it's and it's really fun to build tools for yourself. It's less fun to build tools for a role that you've never done. Right?
Speaker 7:Look, intelligence is we treat it as this one North Star like intelligence. But in reality, it's actually really multidimensional. Right? Like, how good you are at writing poetry is very different than how good you are at writing code versus how you are, you know, being a researcher in biology. And so the thing that was the unlock, I think, in our space is that, you know, first generation of models had only been trained on the output of humanity's work.
Speaker 7:Right? Like the web. But it wasn't trained on the thought process and actions that led to the creation of that work. And it was gonna be clear that coding was gonna be the first domain where we could do that through reinforcement learning because we could simulate it. Right?
Speaker 7:So so we spent the last two and a half years building what I believe is the largest RL environment in the world. It's a million real world code bases
Speaker 2:where,
Speaker 7:you know, our agents can do hundreds and hundreds of billions of tasks. And so that's kind of it was it was partially close to our heart, but it was also frankly very close to what we saw the path to where it's like more capabilities and models was gonna run through.
Speaker 2:Get into verticalization.
Speaker 1:Yeah. Talk about the CoreWeave deal.
Speaker 7:So the CoreWeave deal, we announced has two components to it. We've been able to do in the last two and a half years what we did with 10,000 h two hundreds. Mhmm. Think of that as, like, annually a 100, you know, $20,150,000,000 dollars worth of compute. Yeah.
Speaker 7:But it's orders of magnitude less than what others had. And so we built our efficiencies around orders of magnitude, more efficient experimentation. But your big model run is still your big model
Speaker 1:run. Yeah.
Speaker 7:And so that, like, the the size of a model you can train has and the duration at which you train it has clear correlation with the final intelligence and capabilities. So we needed a lot of GPUs very fast because we saw now that, hey. We have gotten to a point where our models had gotten so good now that we knew if we'd scale them up, we'd be on track to be at where the frontier was gonna be. And so that really started with conversations with with an NVIDIA and CoreWeave. Right?
Speaker 7:And and for kind of obvious reasons. And we got really excited because we found the path to partner with CoreWeave that brought online more than 40,000 GB three hundreds really quickly. And I don't know how much you guys have discussed in the past. How much you guys in the in the past have kinda discussed, you know, like, the compute market. But right now, that scale of compute is impossible to get.
Speaker 1:Yeah.
Speaker 7:It is sold out for the entirety of 2026 and already, like, well into 2027. So we found that a strategic partnership that that allowed us to do so. And so that gets Compute Online in December, but it gets you to the frontier. But what then? Like, you can build the world's most capable model, but if you're not able to serve it, if you're not able to scale it up further, if you're not able to train the next generations, you're frankly you're not in this race.
Speaker 7:You're just cosplaying.
Speaker 8:Mhmm.
Speaker 7:And so we had to take a step back. This was already a while ago. This was already I started looking at this, you know, a year ago. And so what the true bottleneck in our industry is not chips, and it's not energy. There's a lot of, like, 400 kilovolt electricity that comes off the grid.
Speaker 7:There's a lot of sources of energy in The United States. And while at the limit, it is the bottleneck. It's not the immediate bottleneck. The actual bottleneck is bringing it all together and actually having powered shells like data centers online.
Speaker 1:Mhmm.
Speaker 7:Because while last year, I could call someone for 50 megawatts, and I could kind of, you know, get it within six to nine months. If I needed to call someone for 250 megawatts, guys, there's no one you can call. At least you can make, like, a multibillion dollar payment or commitment, you know, today on a fifteen year lease, and then you can get it in eighteen to twenty four months. Yeah. But I'm not meta.
Speaker 7:Right? And so we we understood that we have to own that vertical stack entirely if we were gonna be able to secure our future.
Speaker 2:When how early did you guys make the call to focus? You know, clearly, it sounds like you're focusing intensely on the go to market side as well. Right? We've heard, you know, there's plenty there's labs out there that have, they're taking the route of, if we build it, they will come type of thing. And very clearly, even before you guys are at the frontier, you're saying, no, we're going to get customers.
Speaker 2:We're going to get actual enterprise use cases. We're going to be focused on delivering value. And then hopefully, those products just get better for the customers as the underlying intelligence improves. But do you feel like that Was that just an easy, obvious decision to make? Or did you guys debate that a lot internally?
Speaker 7:So it it was kinda the DNA from day zero who we wanted to be. And and so we wrote ourselves and my cofound, like, a day zero memo. We often go back to it to see, you know, like, what's changed along on that. And we kind of understood early on that there were three layers that were really gonna matter for the next decade. It was gonna be energy, compute, and intelligence.
Speaker 7:And in our view, a lot of things were gonna become rounding errors compared to those three. And but you also knew that if you if you see intelligence as a commodity, right, if you treat it like a barrel of oil, a barrel of tokens
Speaker 2:Someone else is gonna deliver it. Right?
Speaker 7:Exactly. And and look. And so you care about your cost and your skill. Hence, it's infrastructure and vertically integrating. But you don't wanna be in a commodity business.
Speaker 7:You wanna be in a business that either increases someone's revenue, right, or improves their cost basis. Like, it helps them grow their business. And so from day zero, we said, well, we're not a consumer company. It's could probably be here in how I talk. It's not in our DNA.
Speaker 7:I'm not a chat app in your pocket. This is not I wouldn't know how to build that. But we typically cared about businesses and enterprises. And so it was a day zero decision to do this. And so from day zero, we built both parts of the org, our applied research org and what we call our production engineering leg org.
Speaker 1:This two megawatt facility that feels like leapfrogging a lot of the one megawatt clusters that we've seen, talked about, whether it's Colossus two or what Meta's doing with Prometheus and what OpenAI and Anthropic are doing. Like, is that the intention, or do you think that you're more just, like, catching up to the frontier and they will be coming online with similar capacity around the same time and you're differentiated on the type of model that you'll train?
Speaker 7:So there's big headlines of gigawatts of power, and and we had one of those yesterday.
Speaker 1:Yeah.
Speaker 7:And we have an incredible amount of power on that land. We actually have six gigawatts of gas that sits there that we can that that we bring turbines online for it to turn into electricity. But what I think really matters in fund as a foundation model company is your lead time from when you need compute to scale to how long it takes to get online. Mhmm. And this is where the partnership with CoreWeave is really interesting.
Speaker 7:Because with CoreWeave as the tenant in the data center, we have the ability to determine ahead of that data center coming online, how much of that compute goes to scaling poolside Mhmm. And how much of that compute we might have to put in the free market. And and they're, of course, world class. Like, I mean, I cannot speak highly now of their ability to operate, like, large scale compute. And so for us, it was it was not about the big headlines, but it's about building a company that could incrementally deliver data centers.
Speaker 7:And the first 250 megawatts are actually delivered in a quite unusual manner. Wasn't much about this in the press because it's kind of a geeky topic. Mhmm. But I think here we like geeky topics. Of course.
Speaker 7:So if you look traditionally at data centers, they're these big stick built buildings. Everything comes on-site, is manufactured, and put together on-site. And that's been the vast majority of data center industry. But mobilizing large workforces and and dealing with that complexity means that your ability to scale is not really incremental. I can't add an extra thousand GPUs, another thousand, another thousand.
Speaker 7:And so we took a different approach here where we've got the big stick build building that we're building. It's a long corridor, and we're bringing on around essentially data halls of of two megawatts at a time.
Speaker 1:Mhmm.
Speaker 7:Current generation GPUs would be be a thousand GPUs. Next generation, that's less because they're more dense in power. But what we're doing is we're doing off-site manufacturing. So a data center for GPU compute is effectively three layers. It's an electrical skid, it's a cooling skid, and it's a compute skid.
Speaker 1:Yeah.
Speaker 7:And you actually designed them that they fit on the the back of a flatbed truck. And ah. Hey, Mark.
Speaker 1:Good to
Speaker 2:see you.
Speaker 1:Have Mark Benioff. We can go way deeper with you, but thank you so much for hopping on the show. We will talk to you later and we'd
Speaker 2:love to have you back very soon.
Speaker 1:Thank you so much for joining. How you doing, Mark? Good to see you. Congratulations on all the fantastic news. Thank you so much for joining the show.
Speaker 1:How are you today?
Speaker 2:We don't have audio.
Speaker 1:Let's make sure that we have audio from Mark Benioff from Salesforce. He is the CEO of Salesforce. Let's bring him in to the show. Thank you so much for joining. Our team will sort this out in just a second.
Speaker 1:We can see you. We can't hear you. We are working on this. Let's make sure that, he is in the restream waiting room joining I
Speaker 2:wish we we gotta get Isso back on the show.
Speaker 1:I see him. I don't hear him yet. Isso.
Speaker 2:Hey. There we go.
Speaker 1:How are doing, Mark?
Speaker 2:We got audio.
Speaker 1:We got audio. Thank you so much. We got audio. You have John Coogan and Jordy Hayes from TBPM.
Speaker 2:AGI is here, but we still have
Speaker 1:Technical difficulties for tactical time. But
Speaker 6:here we are. AGI. It's amazing. Yes. AGI.
Speaker 6:I mean, it's unbelievable.
Speaker 2:We're feeling it.
Speaker 6:We've come.
Speaker 1:I mean,
Speaker 6:all of the AI is, you know is it iso con or iso con? I can never remember.
Speaker 1:I think it's iso. Iso con.
Speaker 6:It's iso con. Is it miso soup or miso soup?
Speaker 1:Yeah. I think it's miso soup.
Speaker 6:Okay. Yeah. It's iso con. Okay. So iso con.
Speaker 6:Yeah. I love Isso by the way. Oh, really?
Speaker 1:And I love Poolside. I'm so excited you guys know each other.
Speaker 6:One thing you need to know.
Speaker 1:Please. One thing
Speaker 6:you need to know. I also love Poolside, the music. The have you heard the Yeah.
Speaker 1:Poolside FM. Yes.
Speaker 6:And they do that great Neil Young cover. Yeah.
Speaker 2:Oh, the man. On Harvest Moon.
Speaker 1:Yeah. Yeah. Yeah. You
Speaker 6:haven't heard the Poolside cover on Harvest Moon Yeah. And Eso Khan and I were talking about that. And I said, why why did you call it Poolside? He's like, oh, this and that, you know, he's building this huge data center now.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 6:And I said, you should split the company. So you should have a software company building your model, which is a bay have you seen his model? It's amazing. Oh, yeah. And then he's also building a data huge data center.
Speaker 6:And I'm like, you have one company, which is the model poolside. One day one company is the data center curbside.
Speaker 1:Of course.
Speaker 6:So you could have poolside curbside.
Speaker 1:That'd be fantastic. That'd be fantastic. Anyway, please give us how you feel? How Dreamforce. Break it down for us.
Speaker 2:Dreamforce feels like something that would never never get old.
Speaker 1:Super Bowl for SAS.
Speaker 6:Well, you guys aren't here, which I guess you're not Metallica fans, which is sad, and I'm gonna have I am. Let Lars Ulrich know that you missed it. And then also you don't like Benson Boone either, so you're not pop or heavy metal. What are you?
Speaker 9:Count us in
Speaker 1:for the next one. We'll be there.
Speaker 6:We'll be
Speaker 2:there next time. Super Bowl obsessed.
Speaker 6:Why? Why? Why? I mean, this is our twenty third Dreamforce. Have an explanation.
Speaker 6:I
Speaker 1:wanna know why.
Speaker 6:No. You you you guys are the number one podcast in the world. Yeah. I wanna know why you're not a Dreamforce. And I wanna know your music I wanna know your music choice.
Speaker 2:I do love Metallica. I grew I grew up on Metallica.
Speaker 3:Yes. And Okay.
Speaker 6:I was believe it. What song do you what's your number one
Speaker 5:Metallica song?
Speaker 2:Enter Sandman.
Speaker 1:Oh. No. No.
Speaker 2:No. No. It's okay to like the best.
Speaker 6:Everybody knows that one.
Speaker 2:Let me ask other one. It's it's it's what do you what do you got?
Speaker 1:You're unforgiven. Unforgiven. I I do like master puppets. That's a great one.
Speaker 2:Master puppets.
Speaker 1:Classic. But I I was always in a a little bit more of the slipknot, a little bit more of the Slipknot. Of the corn and the tool. But, you know, but I I mean, metallic is great. It's definitely in the heavy rotation.
Speaker 1:It's on my it's on my metal plate list a bit.
Speaker 6:We not only have the greatest heavy metal band of The United States here, Metallica, really the Bay Area, Lars Ulrich and Rob Trujillo. Yeah. And, you know, Jimmy Hetfield was here. Yeah. And Kirk Hammett, probably the greatest guitarist of all time, if you like that.
Speaker 6:But but we also have here Yoshiki
Speaker 1:Oh, yes.
Speaker 6:Head of X Japan, who's also one of the greatest drummers of all time. And X Japan also, he does classical piano and he's about to go on tour again. Matt back to Madison Square Gar and Royal Fantastic. Albert Hall. Amazing.
Speaker 6:But, anyway, hopefully, you guys will come next year.
Speaker 1:And works for and works for axe the everything app. That's correct. Right? That's great.
Speaker 6:Well Axe x x the everything app. This is different x.
Speaker 2:Yeah. Different x.
Speaker 6:This is x Japan Okay. Not related
Speaker 1:to Oh, not related. Alto. Okay. Got it. Got it.
Speaker 1:I I saw I saw your post about being on x, and I wasn't sure if it was a different thing.
Speaker 6:This is we are x. Okay. We are x.
Speaker 1:Yes. It it it's never been more
Speaker 6:Your Japanese your Japanese viewers are gonna go up if
Speaker 1:you just
Speaker 6:say we are x
Speaker 1:We are x.
Speaker 6:Which is Yoshiki official.
Speaker 2:Fantastic. Yeah.
Speaker 6:Fantastic. Whatever it is.
Speaker 2:Yes. We're this this is so fun. I we gotta we gotta do this more often. We were joking on the show earlier. We were referencing a post.
Speaker 2:You know the whole like nothing ever happens investment meme. Right? Which is like which somebody was highlighting that OpenAI runs on both Salesforce and Slack.
Speaker 6:Thank god.
Speaker 3:I wanted
Speaker 2:to ask you, does not does nothing does nothing ever happen?
Speaker 6:Nothing else matters.
Speaker 2:Nothing else matters.
Speaker 6:There you go. Yes. You're still unforgiven, by the way.
Speaker 1:A super intelligence would use Salesforce and Slack for sure. That that that would be the first thing that they pull off the shelf.
Speaker 6:If you are your Slack user, you need to see the Slack bot that we introduced here, which is built on Anthropic. It's also amazing. So we use OpenAI. Yeah. We use Anthropic.
Speaker 6:We use Gemini. I just did an interview with Sundar. You know, you can see it on YouTube. Great. We x AI, love Elon.
Speaker 6:Yeah. We we love them all. We love all our children very equally here.
Speaker 1:Yeah. How how do you think about vertical integration? I mean, it's it's a fascinating company. You've had the opportunity to build your own cloud. I I don't believe you've ever built your own operating system, but many companies now are saying, we wanna build our own ASIC.
Speaker 1:And you've probably I don't know. Have you ever thought about putting Salesforce on an ASIC or Slack on an ASIC? Like, how do you think about when to verticalize versus when to partner?
Speaker 6:It's such a great question. You probably will enjoy my interview with Sundar because I asked him that because, you you think about it, he's really got it all together. He's got the data center. He's got the chip. Right?
Speaker 6:Tensor. Right? Yeah. He's got he does a lot of the operating system type work, including the model, you know, the Gemini model. The applications he does as well.
Speaker 6:And he even gets all the way to the robotic layer. Right? So here he's got these Waymos running around the street. What other company is going from robot to chip Yeah. You know, to data center?
Speaker 6:Really only I mean it's a concern is well, what is the future? Is it billions of fast food restaurants on the planet, you know, all having their hamburgers made, you know, by robots, and that's the world we're about to enter into? I mean, I have no idea, but the one thing I know is, if you look behind me, there's no robots walking around. Well, there might be one, but not making the burgers here.
Speaker 1:Not yet. Not yet. How do you think about the different foundation model brands? Do your customers want to know that they can pick Claude? Is model switching important, or is there a world where you wind up wrapping that at an abstraction layer and you're just serving them your product and it's powered by the different foundation models, but the the consumer doesn't really care?
Speaker 6:This is a great question because number one, you may know that Salesforce also has a huge research team. We invented prompt engineering, the first prompt right here at Salesforce Research commercialized by others, of course.
Speaker 2:Also one of first prompt. Hit the Gong.
Speaker 1:Thank you for your service.
Speaker 6:Thank you. You. And listen. Yeah. Look.
Speaker 6:Some customers want to use our models. Yep. Some customers wanna build their own models. Yep. Some customers like a certain brand of model.
Speaker 6:Mhmm. By the way, some countries like a certain model. You just saw ISO Kant. Was it ISO or ISO? ISO.
Speaker 6:Right?
Speaker 1:ISO.
Speaker 6:ISO Kant, he's in Portugal. He is gonna make a play. He's gonna have a data center in Texas, but he's also gonna have a data center in Europe. Yeah. There's Mistral in France.
Speaker 6:There's Middle East models. There's Asian models. You know Kwan from Alibaba. You didn't mention that.
Speaker 1:Yeah. Yeah.
Speaker 6:Right? There's models all over the world. Yeah. And different customers and different geographies are gonna all want different models based on where they are, the kind of customer they are. Yeah.
Speaker 6:They may want small models. They may want large models. They want micro models. They want foundation models. Yeah.
Speaker 6:There's a lot of different models. So you have to give people choice. But what we're gonna provide is this incredible platform that we call the AgenTic Enterprise, and we have AgentForce. Yep. And AgentForce is powered by all of those.
Speaker 6:Yep. And you can plug into whatever model you want wherever you are with the data residency, the governance, the compliance, everything you need, boom, right into AgentForce. Because look at here at this conference, you're not here, unfortunately, and I hope you do come.
Speaker 1:We will.
Speaker 6:We've had 23 of them, by the way, but I know
Speaker 2:you do.
Speaker 6:But here's the thing. Listen.
Speaker 1:Jordy's barely 23 years old. One of our one of our team members over there, most
Speaker 6:of us No.
Speaker 2:You're even
Speaker 6:alive. You're doing podcasts all day long. Listening to your podcast. All day long, you're doing this podcast going yeah. Listen.
Speaker 6:Listen. I get it. I know you're too busy for me. But now listen to this. Listen to this.
Speaker 2:This is this interview is so fun. We're we'll fly we'll fly No. No. No. No.
Speaker 6:I know you're busy. I get it. I got it.
Speaker 1:You're a master. You're a master.
Speaker 6:No. No. I understand you are not Metallica fans. Yeah. You're too busy for us.
Speaker 6:Yeah. Fine. Yeah. But here's the thing. I wanna just say this to you.
Speaker 6:Yeah. Look. There's customers here from hundreds of countries who've flown in from all over the world.
Speaker 1:Yeah.
Speaker 6:And they all have different needs, different industries. They're different size. They're small businesses, companies like zero to 200 employees. There's 200 to a thousand employees, a thousand to 2,000 employees, very large enterprise, the Pepsis and the Dells. Michael Dell was here.
Speaker 6:You're not here. Michael Dell was here. Okay. Laura Albert, the CEO of Williams Sonoma is here. You're not here.
Speaker 6:That's fine. Yeah. Yeah. Yeah. The thing.
Speaker 6:Hold on. But here's the thing. Also, it's about governments. It's about software companies. You know?
Speaker 6:It's about all of these people are here because it's a highly diversified market software. And these models don't just have to reach consumers. They have to go through these businesses and go b to b to c Yeah. From business to business to consumer. And that is actually complicated because you have different governance, like I was saying, different compliance Yeah.
Speaker 6:All kinds of different rules based on country, based on so it's it's not like, you know, we're look. We're here. We're Americans. We're here in America Mhmm. You know, that we love our country, and we have certain models that are built here.
Speaker 1:Yeah.
Speaker 6:Great. Okay. We love that. But here's one more thing. There's many people who are not Americans who are here, and they have to comply to their laws in their countries, in their languages, in their governments.
Speaker 1:Mhmm.
Speaker 6:And we have to adapt Mhmm. To those organizations and those countries as well. So you have to think about AI as a global phenomenon. You have to think about AI as a highly diversified phenomenon, and you have to think of AI as the future. Yeah.
Speaker 6:And we're just in you were in the current moment. Well, we've been doing AI at Salesforce for ten years. We did Einstein ten years ago. Wow. You know, obviously, AI has been around, I think, since the fifties, the forties.
Speaker 6:So and, you know, like, the guy who wrote Minority Report and War Games and even Deep Impact, He's our futurist. He's 78 years old. He worked at JPL on the Apollo mission. He's one of the writers on all of those things.
Speaker 1:And he's there, but we're not? He's there?
Speaker 6:Yes.
Speaker 2:He's there,
Speaker 6:but we're not. Everyone is here, but you're not. But here's the thing. Well, this is the largest tech conference in the world. You know that 50,000 people are here, the largest vendor led tech
Speaker 2:Get that Gong again. Mark, one question for you. You Salesforce has been hugely acquisitive. What is your pitch to founders in 2025 that you wanna acquire? That's great.
Speaker 2:Like why why is it such an opportunity?
Speaker 6:We have bought more than a 100 companies. You're 100% right. Over twenty six years, we've bought more than a 100 companies. We've invested in hundreds of companies. We own 1% of Anthropic.
Speaker 6:You know, we just sold a company to Google, which is Wiz, the security company.
Speaker 1:Oh, yeah.
Speaker 6:We, you know, we grew Snowflake and took it public. Yeah. We're investor in many companies. So we wanna talk to you if you're an entrepreneur. We wanna invest in you.
Speaker 6:We wanna help you grow. We wanna bring you here, introduce you to all of our customers. We have 50,000 customers here to introduce you to who wanna buy your product now. So come here to San Francisco or come to one of our world tours all over the world. You know, from here, we go on the road, and we're gonna be in every country in the world, every major city, and we will come and meet you.
Speaker 6:We wanna meet you. We wanna know you. Salesforce Ventures is our arm that acquires but also invests. It's a huge part of our business. It's a $5,000,000,000 fund.
Speaker 6:It's, I think, doing a 33% IRR. I don't know exactly the number. It's probably one of the highest performing funds in the world.
Speaker 1:That's great.
Speaker 6:Wow. Let us partner with you. Yeah. You know, come here. You know, these podcasters don't have time.
Speaker 6:You do. Come here. Be with us. Your Customers are here to meet you.
Speaker 2:What what You're good at sales. The
Speaker 1:current guy.
Speaker 2:You kinda gotta be in the role.
Speaker 1:But What's the current thinking on, seat based pricing consumption both at Salesforce or what you advise founders that might be
Speaker 2:Yeah. Think I think people have this obsession with with seat based pricing right now. Yeah. And and this idea that that AI may may allow people to run. We're not seeing it a lot yet Yeah.
Speaker 2:But companies more efficiently. But in my view, I think companies are smart enough to to understand they buy even if they're paying on a seat base Yeah. They're paying for value at the end of the day. And if they're not getting value, they'll they'll churn or they'll find another. But how do you think about this conversation around seat based versus kind of value based pricing?
Speaker 6:What a great question. Look it. I just subscribed to ChatGPT. It's a seat based model. You know that you probably paid 20 or Yeah.
Speaker 6:$200.
Speaker 2:I just subscribed Did the you use that way to to make that picture with with Sam? It kinda that that picture
Speaker 6:you guys had. Rock. I said because we were wearing like conference necklaces. Okay. And I said take it off and Chad GPT goes, oh, no.
Speaker 6:No. No. Copyright infringement. And then and then Grock said, great. I'll do that.
Speaker 6:And do you want me to put in the photo of the podcasters with you? I said, I'd like to do that also. Yeah. But you might have C PACE pricing, like those are that's a good example. Right?
Speaker 6:You might have all you can eat pricing. So we have the AgenTic enterprise license agreement. All you can eat. Don't even think about pricing. We're gonna give it all to you.
Speaker 6:Don't even worry. Three, it might be per transaction or per per action pricing because you're more conservative. You wanna know exactly what you're paying per action per transaction. Or it might be some other model that some kind of flexible agreement. Right now, what we're having to do, and this is a great question, so thank you for asking me the question.
Speaker 6:We have to write pretty much a custom pricing agreement for every single customer. And as you know, this year, we're gonna do about 43,100,000,000.0 in revenue.
Speaker 2:Let's
Speaker 6:go. And we just gave guidance yesterday that we expect to be able to do $60,000,000,000 by fiscal year thirty. That's, you know, it's still very fast growing, very exciting.
Speaker 1:Fantastic.
Speaker 6:But when you have we have a 150,000 maybe customers on our core. There's a million customers on Slack. Hopefully, you guys use Slack.
Speaker 2:We do. Of course.
Speaker 6:When you have that many customers in that many countries and that many size companies like I mentioned, it's across the board. It's every possible need. And so we have to adapt more than ever. Before when we started our company twenty six years ago, we had one product, one price, $50 a user per month for our sales product. We only had one product, one price, one type of customer.
Speaker 6:That is not who Salesforce is today with Slack, with Tableau, with MuleSoft, with our Sales Cloud, our Service Cloud, our Marketing Cloud, all you know, our AgentForce three sixty platform. All of the things that we offer, dozens of products, we ultimately have to adapt to the customer. And what I can say to you is Salesforce's core values, are trust, customer success, which is right what we're talking about right now, innovation, equality of every human being, including pay equality, and also sustainability, which is our trillion tree initiative and all the work we're doing for the oceans. And if you were here, you could see what we're doing. But listen, The number one thing, number one, you can say those are our core values.
Speaker 6:At the end of the day, it's all about customer success. Are you happy using Slack? Are you happy using our Sales Cloud? Are you happy using our Service Cloud? Is AgentForce fully satisfying you?
Speaker 6:Are you getting you know, you guys have a huge business now. You guys are growing your business. Are you you know, like Yeah. By the way, for example, you probably heard of the beast, Jimmy Jimmy Donaldson. His team is here.
Speaker 6:They're built running on Salesforce. They're a huge media company now. Everybody has
Speaker 2:runs on Salesforce.
Speaker 6:Wow. You know the beast.
Speaker 1:The beast. The beast. Running on Salesforce.
Speaker 6:Slack very aggressively.
Speaker 1:Of course.
Speaker 6:Jimmy is amazing. Yeah. Okay. He runs a great business. It is growing like a weed beast media, all of these things.
Speaker 6:Yeah. We have to adapt to him. Yeah. It's an example I'm giving you because I know you can relate to that in your own business that you guys are trying to grow and make money and have fun. Yeah.
Speaker 6:And look at this look at this great life. You guys are you probably feel blessed every day that this is your career.
Speaker 1:We do.
Speaker 2:We do.
Speaker 6:And I feel that myself. I feel blessed every day that this is my career, that I'm able to do this for a living. Last night, James Hetfield, probably one of the great singers of our time, I'm gonna introduce you to his music. Listen. Number one thing he said, he's on stage.
Speaker 6:He said, Metallica for over forty years gets up on stage and plays that song that you mentioned, Enter Sandman. And you know what? He said, I feel blessed that I can do this every time I get on stage. We feel blessed that we're here at Dreamforce. We're blessed every time we get to meet with a customer, every time we have an interaction, every time we are able to write a piece of code, sign a deal, see customer success.
Speaker 6:It's what gets us up in the morning. It's why we do what we do, and it's why we're here at Dreamforce. And after twenty six years, I still have the passion, the energy, and the excitement, and the vision for Salesforce that I had twenty six years ago because that's what makes me happy. I love making customers successful. I know that's what you like.
Speaker 6:Yeah. You love making your
Speaker 2:You're the final your viewers. You're the final boss of enterprise SaaS. I absolutely love it. Yeah. What makes why why do you believe that sales is still a great career path for young people?
Speaker 2:I personally believe it is. I believe it is the most valuable skill in the world. And but I think a lot of people see all these AI agent for sales rep companies getting funded and they they might think I don't wanna go down that path because I don't wanna go down the sales path because I think that's gonna get automated away. Why do you what what's your kind of world view there?
Speaker 6:Well, it's a great question. I mean, you know, at one level, there's between 20 and a 100,000,000 people. We actually counted them that we have not been able to call back since we started Salesforce twenty six years ago, between 20 and a 100,000,000 people. We didn't call them back. Not because we didn't love them.
Speaker 1:Yeah.
Speaker 6:Not because we didn't like them. We didn't have a people. And, you know, those are that idea to be able to call everybody back, you know, how do you do it? Like, you can't call every listener back who's already contacting you. You know that.
Speaker 1:Yeah.
Speaker 6:So one thing is, yeah, you're gonna have a SDR or sales development representative, the ability to call everybody back. Okay? The ability to qualify to have a conversation. But listen, face to face sales or face to face communication like we're doing right here like by the way, I'm I don't I'm not an AI as far as I know. I'm here.
Speaker 6:I'm not a biological computer running an LLM. At least I hope I'm not.
Speaker 2:I feel like an AI would grab a water bottle and hit it that.
Speaker 1:Very suspicious.
Speaker 6:I wanna say, I wanna just say this to you. I also just hired somewhere between three and five thousand more salespeople.
Speaker 1:Wow.
Speaker 6:Okay. I'm growing my Salesforce. It'll be more than mail. Almost it's think I'm gonna try to get to 20,000 account executives this year. That doesn't include systems engineers, managers, the infrastructure.
Speaker 2:Sales engineers. Yep.
Speaker 6:We have 80,000 employees at Salesforce. 80,000. Mhmm. And about a quarter of them, okay, are just people who are trained in our product, who are designed to help you. We want to make sure that they can help you beat your success.
Speaker 6:That is why, at the end of the day, I think sales, listening, asking good questions, empathizing with the customer, connecting deeply with the customer, having fun, which is super important for us and for you. I know I watch everything that you guys do. You love enjoying and having a good time. Yeah. We wanna do that too.
Speaker 6:Isn't that what sales is really all about? Yeah. And tonight, you know, look at the conference is happening, but across the street is the St. Regis Hotel. And last night, I was there, and I'm coming down.
Speaker 6:It's a long day. It's a long two days. I haven't slept in two weeks. Coming down the escalator, looking the bar is filled.
Speaker 1:Yeah.
Speaker 6:And the bar is filled. And what is happening in the bar, you think? And it's not our people who are in the bar. I looked. It was all the customers talking to each other and connecting
Speaker 1:Yeah.
Speaker 6:Going more deeply, you know, having that human touch, you know, because look. AI, we love AI. Mhmm. Okay? But AI, it's not the same.
Speaker 6:It's not AI doesn't have a soul. It's not that human connectivity. It's not, you know, at our depth. AI is not born. It's you know, AI is made.
Speaker 6:Mhmm. So, you know, we there's a humanity that still needs to be nurtured
Speaker 2:people wanna buy from people.
Speaker 6:And grown. People wanna buy from people. Thank you. I mean, that is what it's all about. Yeah.
Speaker 6:And that's why I think sales actually is. And you can see right here, my job right now is to sell you Yeah. To come to Dreamforce and also to look at our products, to core sell you our core values.
Speaker 1:I love it.
Speaker 6:That's my job right now. Right? Yeah. That is my job. Yeah.
Speaker 6:And
Speaker 2:quickly how quickly can you clock if somebody's gonna be great at sales? Does it take you like twenty seconds, thirty seconds, a minute?
Speaker 6:We've all seen we just had a great conversation about mister beast.
Speaker 1:Yeah.
Speaker 6:Would you say on a scale of one to 10, the 10 one of the best communicators, most aggressive salespeople in the world. Where would you put him? One or 10?
Speaker 1:10.
Speaker 6:10.
Speaker 2:10.
Speaker 6:Yeah. And boom. That is important. Yeah. And I think that that is and you see, like, of sudden, you're watching this thing.
Speaker 6:So one of the games is happening. Yeah. He's buried somebody underground for two years or something, they're digging the person up. Are you still alive? Whatever.
Speaker 6:And then just as they break, they go, and one more thing, I've got a chocolate bar to sell you. And this is the best chocolate bar you have ever tasted. Let me have the guys coming out of the ground now. Hey. Will you try this chocolate?
Speaker 6:What do you think? Look, I've been underground for two This is the best chocolate I have ever had. I mean, he has to be one of the great communicators, but also one of the greatest salesman Mhmm. I have ever seen. Is that valuable in the age of AI?
Speaker 1:A 100%?
Speaker 2:Absolutely. 100%? Absolutely. Alright. Last question.
Speaker 2:Where do you where do you get your energy? It's off the charts. It's incredible.
Speaker 6:I'm getting it right now from you guys are totally off charts. And I'm just vibing. I am so tired, so trashed. Last week, I've been on the road nonstop. I haven't slept for an hour.
Speaker 6:I don't know where I am. I don't know what conference this is. I don't know if that was Esso or Miso. You're doing great. Just wanna thank you.
Speaker 2:Wish we didn't have to fade to black.
Speaker 1:We'll talk to you soon.
Speaker 2:You see what I did you see
Speaker 6:what I did there? Oh, right there. You googled it. You googled it. You're still unforgiving.
Speaker 6:I
Speaker 2:I think I have I think I have a clip of me playing a Metallica song.
Speaker 1:Don't remember which song. I'll send it to you.
Speaker 7:I'll send it
Speaker 2:to you. We'll work on
Speaker 1:Thank you so much, Mark.
Speaker 6:We'll talk
Speaker 2:to you Have
Speaker 1:a good day.
Speaker 2:Super fun. Bye. Fire me up.
Speaker 1:Yeah. The mogging counter. We we gotta we
Speaker 2:gotta have that. That's
Speaker 1:The chat
Speaker 2:What a what a legend.
Speaker 1:A lot of fun at our expense. I would like it any other way. Everyone had a great time. Thank you so much to Mark Benio for hopping on the show. I'm the show is in chaos at this point.
Speaker 1:The timeline is in turmoil. Our show schedule is in turmoil. I believe we have more guests. I hope so. We got a
Speaker 4:palace coming in.
Speaker 1:Bring in someone to talk to. Sorry. Hello. How are you doing?
Speaker 2:Welcome to the show. Sorry for all
Speaker 1:the chaos. Mark Benioff really knows how to take control of an interview. It was a fantastic conversation, but but we're here to talk about you. So please introduce yourself and give us the news.
Speaker 11:Yeah. Great. Hi. I'm Alice Bentink, and I'm the CEO and cofounder of Entrepreneurs First. And I'm coming to you live from the EF office where behind me I have 40 of the most incredible founders that were pitching at our demo day yesterday.
Speaker 11:So we had Jack Clark, who's one of the founders of GlamTropic, who kicked off demo day and did an amazing opening talk that included the phrase, I'm deeply afraid, which I think is is always useful for Grabbing
Speaker 1:the attention.
Speaker 11:Human rights and AI to to share.
Speaker 1:Yeah. Totally.
Speaker 11:We had 200 attendees, an amazing selection of our previous co investors in the kind of leading lights of the the Bay Area fundraising ecosystem, partners from CoSola, Antreeson, Zetta, Sousa, True Ventures, Paceset. And we had 20 companies. 20 companies pitching the next generation of largely AI related products. Mhmm. And it was wild.
Speaker 11:Standing room only, amazing vibes. So, yeah, it was a it was a great day.
Speaker 1:What are the most common trends? I mean, we've been to a couple YC demo days now. We and being actually, like, in the room and talking to so many companies, you start to pick out, really clear themes. What's get us to the frontier? What's the October 2025 theme or Yeah.
Speaker 1:What are the key trends? Or even, like, anti theme?
Speaker 11:I think the key theme for this one was really young founders, early career founders who are who are obsessively solving
Speaker 1:Mhmm.
Speaker 11:Some of the most tricky problems in, like, old, old industries.
Speaker 1:Mhmm.
Speaker 11:So companies like Faction, which are the these two insanely ambitious young guys who are automating the ordering process for industrial distributors. And it's like, where do these guys get these ideas from? And that's actually part of the EF process is because we work with individuals pre team, pre idea. We help them go through that process of actually developing the idea from scratch. And Kanal, the CEO, he'd actually spent a summer spending eight hours a day hand processing these sort of purchase orders for these big, you know, old industrial distributors.
Speaker 11:And he's like, right. I'm gonna become a founder and I'm gonna make sure that no other intern spends their summer doing this. And it's the most incredibly lucrative industry, an enormous industry. But I would say that's the theme. You know, another example would be but a great company called Cherto, and what they're doing is it's like Vanta for FMCG.
Speaker 11:So it's automating the compliance process, but for fragrance companies, for cosmetics companies Yeah. This is something that's holding back $400,000,000,000 worth of new products every year because it takes months and months to go well,
Speaker 2:and and and probably a year ago at this point, I had somebody pitch me this idea of something they wanted to do, but they they I believe that. I don't think they actually went and did it. But I was super bullish on the idea at the time. What what kind of guidance were you giving the batch on kind of metrics around what would be compelling from for for the investors that were gonna be in the audience around what like, what what's the bar to come out of Demo Day with, you know, a seed round from your view?
Speaker 11:So it it depends on the company and depends on what they're trying to build. Half of this batch had more than a $100,000 worth of traction. And these are really, really young companies. So because we build all the the companies from scratch, we build cofounding teams from scratch. We have this really unusual and unique process that creates companies.
Speaker 11:The companies that were pitching at demo day were incorporated often less than three months ago. So you're getting to really, really impressive revenue traction within a short amount of time. I think one of the things we do know that investors are looking for right now is the stickiness of that traction. And particularly because a lot of our companies are selling to older industries, the revenue is super sticky. So it's less the sort of the the j curve revenue where you, you know, it's here today, gone tomorrow, you gotta rebuild it.
Speaker 11:Mhmm. Often our company's getting, you know, year long contracts, multiyear long contracts with these big old companies. So, yeah, I think one of the things we're really focusing on right now is is the stickiness of the revenue that that they are creating.
Speaker 1:Last question from my side. How do you apply, and do you have any particular application questions that you think make your application stand out?
Speaker 11:So you can apply, but, honestly, we like to find you.
Speaker 1:Okay. Don't call us. We'll call you. I like that.
Speaker 11:One of the ways to think about EF is a little bit like, you know, CAA, the talent agency.
Speaker 1:Yeah. Yeah.
Speaker 11:We see ourselves in the same way. We wanna be the CAA for founders. We wanna be in their in their corner as their talent agent. And so we go out into communities across Europe, across The US, and across India, and we build the relationships and the connections to actually work out who are the individuals that we should be going after. And because we're going after them at the point where they're pre company, they're preteen, they're pre idea, our job is to work out from their behaviors which are the ones that stand out.
Speaker 11:So I suppose some of the behaviors that we focus on are pace productivity, their ability to build really fast, but you don't see that in an application. You only see that from spending an extended period of time with these people.
Speaker 7:Yeah.
Speaker 11:So our selection process includes a hackathon. It means that we're spending two days, you know, forty eight hours pretty much straight working alongside them, seeing what they build, seeing how they interact with others. And honestly, the interacting with others bit, they don't always play nicely with others. We're not looking necessarily for for for team players. But it's really about the behaviors.
Speaker 11:You can't really assess an individual if they found a potential by looking at a piece of paper.
Speaker 2:Yeah. Well, congratulations. Hackathon is a very cool selection process. Hit that Gong for the whole batch. It's great to meet you and Yeah.
Speaker 1:Congrats. Back on the show soon. We'll talk to you
Speaker 11:later. Amazing.
Speaker 1:Day. Thank you. And we have Eric Souffert from Mobile Dev Memo in the restream waiting room. We will bring him into the TBPN Ultra Dome. We are getting back on track.
Speaker 1:Eric, how are you doing? What's up? Sorry to keep you waiting.
Speaker 2:Sorry about that.
Speaker 1:Absolutely chaotic too. I'm, I'm great. I've I've enjoyed your guest appearances on podcasts, your writing, everything, especially some of your more recent takes. But maybe for those who, are aren't super familiar, would you mind giving us, like, a high level just introduction on, your day to day, how you describe yourself to folks these days?
Speaker 3:Yeah. I call myself an independent analyst. I run the website mobile dev memo. It's got a blog, podcast, newsletter, Slack community. I wrote the book, freemium economics.
Speaker 3:Yeah. And I spent kind of my operating career in the mobile space, mostly in performance marketing roles and strategy roles. And now I just kind of blog, podcast, full time and and invest out of a fund called Hercules Capital.
Speaker 1:Oh, cool. Do you it it it seems like one of the main, like, I don't know, takes you have that you're just waiting to cash in on is this idea that OpenAI will be doing advertising soon. Can you walk me through, like, how you perceive the messaging from OpenAI, the firm, and then how like, what led you to believe that it is inevitable that we will see advertising?
Speaker 3:Yeah. That's my my modus operandi is strong, strong opinions force fully stated. And I've said very forcefully, OpenAI will monetize with ads. I wrote a piece in May. The title was, obviously, OpenAI will monetize with advertising.
Speaker 3:And here's what here's where I think the the the sort of, like, most profound clue has been. Right? So Sam Altman in Ben's podcast last week, Ben Ben Thompson
Speaker 1:Yep.
Speaker 3:He said he he he pulled off like a rhetorical sleight of hand. Right? He said like, hey. Look. You know what?
Speaker 3:Yeah. We're not really considering ads, but I really love what Instagram does. Yeah. Those aren't ads. We wouldn't do ads.
Speaker 3:Ads are attacks, but I love what Instagram does. Instagram has surfaced relevant products to me, I bought products from those ads. Those aren't ads. Yep. That's a separate thing.
Speaker 2:Yeah. Those are those are improving my life.
Speaker 1:That's discovery.
Speaker 3:That's that improves my life. Ads, by definition, you know, deteriorate engagement, but but these, I I I extract value from. Yeah. Right? And that was a Spencer Neumann moment.
Speaker 1:Totally.
Speaker 3:That was the Spencer Neumann moment. It it it's a Spencer Neumann, Netflix CFO, March 2022, Morgan Stanley TMT conference. He said, look. It's not like we have religion against advertising. Yeah.
Speaker 3:It's not in our plans right now. But never say never, but it's it's not in our plan. It's not like we have religion against advertising. That was the Spencer Neumann moment. That was March 2022.
Speaker 3:When did Netflix launch ads? November 2022. Eight months later. Obviously, they were already working on
Speaker 1:it. Yeah.
Speaker 3:Right? And and by the way, I would con I would I, yeah, I would dispute that statement that it's not like we we have religion against ads. They very much exhibited religion against ads for years and years and years up to that point. But that was a tipping point. That was a tipping point when they indicated the market that ads are coming.
Speaker 3:They're inevitable. I've said ads are inevitable with OpenAI, which had GPT. I said, guess, sort of, they're ineluctible. I got made fun of for using that word. I've used it a lot, by the way.
Speaker 3:Yeah. But they're inevitable. They're coming. And I think they've been working on that for some time.
Speaker 1:Yeah.
Speaker 2:Here's what do you think about ads where you pay for something and still get ads? Because for me, I signed up for some HBO plan a while ago and I thought I was signing up to not have ads. And now I I've been a little bit lazy. I usually watch TV before I'm falling asleep. And if when I get it like a series of like when I get like four minutes of ads before HBO and I'm paying for the product, that's, to me, a really bad user experience.
Speaker 3:Well, I mean, it's a choice. I mean, there's trade offs. Right? I think, you know, the here so with any sort of with any with any digital product that has the capability of becoming, like, having a humanity spanning TAM, you you you get the the sort of the imperative is to reduce consumer surplus to as close to zero as you can. Right?
Speaker 3:Because that gives everyone an accessible and to give everyone an accessible price Right? For some people, the only accessible price point is zero. Yep. Right? Now for some people now now you have weigh that against perception.
Speaker 3:Right? And there's perception risk. Like, Netflix well, I I I had sort of argued at one point that I thought Netflix should go fast to framing ad framing ad sorry. Free ad supported tier Yeah. And and just drop the price point to zero and have ads.
Speaker 3:Now I've changed my mind on that. I don't think they should do that just because it would it would, you know, it would deteriorate the perception of the brand. Right? They have a they have a perception of being, a high quality, you know, content studio. Right?
Speaker 3:And so I think that would be a mistake for them to do. So it's just a trade off. Right? Do you wanna maximize TAM, or do you wanna sort of preserve some other asset? In Netflix's case, it's the the the perception of being, a high quality service.
Speaker 3:I don't think ChatGPT has that risk. Right? So I think ChatGPT can introduce so first of all, when we talk about ads and ChatGPT, we're not talking about ads in the paid tier. Just wanna be clear about that. We're talking about ads in the free tier.
Speaker 3:Yep. Right? And so Yeah. What That's that's kinda what
Speaker 2:I was getting at. It's like if I if I'm on the 200 a month plan and I'm getting slammed with ads, like, that's gonna be people are gonna be really mad about that. But if for people that are on the free tier, seems very fair.
Speaker 3:Well, I mean, that would create a lot of animosity on the $200 tier. But I like so, yes, yesterday, the Financial Times posted some data about OpenAI. So 800,000,000 users, we knew that. 5% are paying. Right?
Speaker 3:So you got 40,000,000 paying users. 13,000,000,000 ARR, but only 70% of that is from consumers. So when I saw a lot of the analysis about these numbers, a lot of them sort of anchored ARPU numbers to the overall 13,000,000,000, but you've gotta reduce that to the 70% that are that's consumer. The rest of it is is enterprise API access. So, really, that backs up to $228 annual, not ARPU.
Speaker 3:Right? It's not ARPU. It's ARPPU. It's r r ARPPU, average revenue per paying user. Right?
Speaker 2:But if
Speaker 3:you so if you do if you actually if you do the calculation for just ARPU, it's it's $11.38 ARPU. Right? So how does that compare? That's less than Metas. Metas is $13.65.
Speaker 3:This is global. Right? It's it's much higher than Snap. Snap is $2.87. Pinch is $1.64.
Speaker 3:Right? But, I mean, the the thing is, like, they're pretty close to Metas, right, on an ARPU basis. Now those 70% sorry, the 95 Yeah. Of non paying users are essentially freeloading. Right?
Speaker 3:Now, the issue with OpenAI for that, and we saw that in the numbers as well, is that inference does isn't free. Inference has, you know, marginal cost of of, you know, of of providing that good. And so they have to find some way to close that gap. And I think introducing ads to the free tier will not meaningfully impact engagement. I think it could be additive to engagement.
Speaker 3:I think if you look at a ChatGP chat, it kind of feels like a feed. I think the real challenge with with ChatGP and I've seen, like, a lot of conversations about, well, the the difficulty is gonna be, like, the attribution or it's gonna be the sort of middleware that connects things. I don't think I think this is mostly a solved problem. I I don't think attribution's gonna be any different. Yeah.
Speaker 3:Attribution meaning how do you credit Chateapiqui for driving a sale or something. Yeah. I don't think that's gonna be any different than a traditional social media ad Mhmm. For ecommerce or, like, an app. I think the challenge is really going to be coming up with a format that is that feels native for the experience without calling into question the unbiasedness of the response.
Speaker 3:And that that's gonna be the real issue with ads, and I think it's also kind of gonna be an issue with instant commerce.
Speaker 1:Yeah. Walk me through, when do we get to the line of, as we're rolling out ad products at OpenAI, hypothetically, when do we get to the oh, okay. There's backlash. That's too far. It feels like if I see an an, just an ad in the Sora feed that's feels very native to Instagram, if I see an ad in my Pulse, news feed, that feels very native.
Speaker 1:That seems very reasonable. But if I ask it for what are the best paper towels and it shows me an ad and it feels like the ads team is actually influencing the editorial, if you could call it that. It feels like the the
Speaker 2:opening ads Right now, you're getting the average product recommendation from Reddit. Right? Yeah. And then if they start to put their kind of, they start to kinda tilt the scale Yeah.
Speaker 1:What are the landmines in terms of, like, just describing the nature of the firewall between the results when you ask ChatGPIA a a direct question and ads?
Speaker 3:It's a bright red line. You can't cross it because once you lose consumer trust, then it's gone forever. Right? If if if a customer thinks that the answer is not objective, that's actually influenced by whoever's just paying the most to show the product to
Speaker 1:you Mhmm.
Speaker 3:Then you lose the consumer trust. Right? And and, actually, that's, like, that's a very specific problem for chatbots. It doesn't exist for Google search. Right?
Speaker 3:Because Google wants you to click with any query. Right? You you you you query for something, they want you to click. Now when like, sort of everyone's interests are all aligned, the advertisers, Google's, and users. If that first link is the most relevant, well, you can kind of measure relevance through the price, the the sort of modified price that the person pays for the ad.
Speaker 3:Right? Because the the sort of the end price that an advertiser pays is actually modified by the relevance. And so with with ChatGPT, though, what and so if you just see a stream of links, if the top link is an ad or if it's not an ad, if it's most relevant, either way, everyone wins. Right? Yeah.
Speaker 3:But those interests are not aligned in that way with chatbot. Right? So I think once you start inserting ads into answers, you're gonna call into question the unbiasedness of that answer. And you're gonna make users question whether they're actually getting the most relevant information. They're just getting the information that was you know, that was that was paid for, that was paid to be shown.
Speaker 3:But the the the other thing is, like, so so a lot of people think that instant checkout is, like, kind of precursor for ads. Right? Because, well, there are some partners now, and and they kind of they all serve e com, but, like, they might serve different categories. Right? So there's there's probably not too much overlap in the type of products that could be served in any given instance.
Speaker 3:Mhmm. But there will be at some point. And once there is a lot of overlap, well, then how do you mediate that overlap? Auction. You'd run it through an auction.
Speaker 3:Yep. Well, then it's ads. Right? I I actually don't think that's the case. I don't think that's what what they're what they're trying to do here.
Speaker 3:You know? So the issue with that is what we know about instant checkout, and they're it's kind of light on details at this point. But it sounds like the way they monetize that is there's a flat percentage fee that gets applied to the product price. Right? And so that's actually economically suboptimal for OpenAI.
Speaker 3:Right? Why? Because, well, if the lowest price item is the the the sort of most relevant and that's what gets shown, then they're gonna make less money on that. Right? Mhmm.
Speaker 3:And so the the issue with that is, like, what you'd rather do is you'd rather combine the relevance with the bid. Right? And that takes into account the price of the product. Right? That's what the advertisers willing to pay.
Speaker 3:And so if you modify that into, like, an expected value, you you rank the potential ads on that basis, then that's economically optimal. Right? So open AI would be leaving money on the table
Speaker 1:Mhmm.
Speaker 3:By just sort of saying, okay. Well, let's do an auction and but, like or sorry. Like, just just with the flat fee, and and and and then we're just gonna, like, decide what to show then. Right? And the other problem with that is from, like, a merchant perspective, you don't have any control there.
Speaker 3:Right? So the thing is you can't change the price to sort of absorb that margin shawl. Right? With ads, you price that. You price that specifically.
Speaker 3:You you price the the bid that you're willing to pay that makes sense for you that that allows you to sort of, like, recover the the ad spend but also make money on on the checkout. But you can't really do that with the instant checkout because you just sort of submit, like, a JSON of your catalog, right, with the various price points. So I think I think instant checkout might and, you know, the the point I made in in in my blog post about this when it when it was announced is I think it's probably just a way to bootstrap conversion data for users to ultimately target ads against. But I don't think that's gonna be the ad surface area. I think the ad surface area and so first of I think it's it's a mistake to think that ads need to be anchored to the the the content of the query.
Speaker 3:Right? Like, that's that's sort of like a contextual targeting way of thinking, but that's not what Facebook does. That's not what Instagram does.
Speaker 1:Oh, that's right.
Speaker 3:An ad on Instagram, it's not because the the previous piece of content you saw was related to the thing being advertised to you. It's all based on what there is a history of of conversions Yeah. For anchored to your account. Right? So these things don't need to be related.
Speaker 3:Yep. They don't need to be re they don't they don't there's no there's there's no there doesn't need to be, like, a direct relevance connection to the actual content of the chat. Right? It could be totally unrelated Yeah. Except for there's some, you know, some logic that came up with the idea that this ad should be targeted to you because based on previous purchase data, you seem likely to buy that thing.
Speaker 1:Yeah. Yeah. You just it knows that you need paper towels. We're gonna show you an ad for paper towels. Doesn't matter if you went and searched for, you know, the history of the Roman Empire.
Speaker 2:Yeah. We haven't we haven't talked about Pulse yet either, is another effectively feed that you can just slot in whatever you want in between the content. And I don't think users would have any issue with that.
Speaker 3:Well, no. But so so that I mean, I think that could be a so so that's what I that that's kind what I meant when I talked about, like, the format's gonna be the real challenge here. Like, I mean and they've got, you know, exceptional people
Speaker 1:Yes.
Speaker 3:To tackle these problems. And I think one thing about, you know, OpenAI that people sort of, like, discount is is the number of people that they've hired from Meta. Right? So, I mean, like, when people say, well, they don't have the team yet. Of course, they have the team.
Speaker 3:They've been hiring people from Meta for years and years who worked on ads ranking because, you know, they worked on machine learning. Therefore, they were working on ads ranking. Yeah. Right? So they've they've they've they've tackled these problems exactly
Speaker 1:Yeah.
Speaker 3:In their in their career. Where I think ads will be very well suited for or what I think ads will be very well suited for is, like, if the App Store that they are that they've announced that they're building. Right? So what they said was, okay. We've got these app integrations, you know, Zillow.
Speaker 3:That's great. It's actually pretty functional. But and, you know, a number of others, Canva, Figma. But at some point, we're gonna have, you know, more app integrations than you can remember. And so therefore, we're therefore, we'll have a directory.
Speaker 3:Well, when you have a directory, what do you what what sort of, like, natively follows
Speaker 1:is ads, baby. Let's I love it. The the road all the roads end in ads.
Speaker 2:What about on the Souris side, do you think they can transition from a creative tool to a actual consumption
Speaker 1:It's still number one in the plat in the app store, by the way. Yeah. It's fascinating. Yeah. It's very sticky.
Speaker 3:No. So I think I worked in I've I've worked in mobile for too long to be like very optimistic about the staying power of an app that's been number one for like a week or even
Speaker 2:conversation earlier where I was like, I still put it at like a I I I would say like a 10% chance that it becomes a content consumption platform that people are spending.
Speaker 1:Like on Snapchat or Pinterest or We yeah. TikTok.
Speaker 3:Yeah. Well, I so first of all, I don't know if it was a great idea to spin that out into its own app. Mhmm. It it may have been. But the thing is, you know, OpenAI was not short of top downloaded apps.
Speaker 3:Right? They've got ChatGPT, and and that was a top downloaded app. The thing is, like, you look at the staying power of these generative apps, and it's it's you know, they're they're pretty short lived. Right? I mean, like, you know
Speaker 2:LENSA. What's that? LENSA. You remember that?
Speaker 3:Yeah. LENSA like, the original light bulb.
Speaker 2:Yeah. That's right. Yeah.
Speaker 3:But, like, remember DeepSeek? Right? Like, you know, I mean, the the thing is, you know and then whichever whichever company releases, like, the the sort the latest next gen model, they usually takes the number one spot, but they sort of fall off after, you know, kind of a short amount of time.
Speaker 7:But do
Speaker 3:think DeepSeek really novel idea.
Speaker 2:Do you think DeepSeek was was paying for downloads? Like, it didn't seem organic at all.
Speaker 3:Yeah. That's I I looked into that at the time. I don't actually remember what the conclusion was. I think they probably were.
Speaker 1:I mean, they were giving away the first reasoning model for free, like, a week earlier than OpenAI. So there was just, like, it's not Yeah. But the
Speaker 2:general public was not like, I need to try a reasoning. I didn't see anybody outside of our bubble talking about DeepSeek, and yet they were charting number one. And it just felt totally manufactured to me.
Speaker 1:Yeah. One, I don't know if you have a hard stop at two, but we will let you go. But I'd love to know your thoughts on TikTok. There's a deal obviously in place. It it the the valuation always felt low, but at the same time, like, competition in that category is pretty aggressive.
Speaker 1:YouTube has a very serious competitor. Instagram Reel is a very serious competitor. Now you have Sora. How are you thinking about TikTok in the in the ecosystem right now?
Speaker 3:I mean, TikTok not getting banned was a foregone conclusion. I I wrote I write a annual predictions post in my post for 2025. One of the predictions was that TikTok 's not going anywhere. Yeah. That was priced in.
Speaker 3:There was no movement basically in Snap, stock price, you know, or Metas. I think so so so TikTok is facing some challenges with its social shopping product. Yeah. Right? And I think that
Speaker 2:Well, the challenge is that they're losing a massive amount of money. Like, it's not really it's like a retail platform that is massively loss making.
Speaker 3:Yeah. And they they scaled they scaled back the team there. I mean, just social commerce in general, I think, is I don't wanna say a dead end, but it it faces challenges in the West. But I I I so I I I don't think there was any news with it, you know, with this deal being reached. I I think when people get worried about the algorithm being retrained, keep in mind, that's the content algorithm of the ads algorithm.
Speaker 3:So I I really don't think you're gonna see any meaningful change in the ecosystem as a result of this. I think though you because you mentioned, you know, YouTube being a competitor. I think the big news this week was the deal that got struck between Spotify and Netflix. That seems like a big deal. Right?
Speaker 3:Because they're sort of frenemies given the risk that you YouTube poses to both their businesses. Yeah. And so I think it's really interesting that they're teaming up. Spotify is bringing its video podcast onto the YouTube, platform. Sorry.
Speaker 3:Sorry.
Speaker 1:The Netflix platform. Yeah.
Speaker 3:Not on YouTube. Yeah. Yeah. I think I
Speaker 1:think I think Ben Thompson called it the anti YouTube coalition. Right?
Speaker 3:Right. Well, you but a similar coalition used to exist between you know, amongst and at various times with different affiliations between Apple, Google, and Facebook. Right? So I think these battle lines are being drawn there. But, you know, YouTube is a CTV behemoth.
Speaker 3:Right? They, you know, they announced that TV is the largest consumption platform for for the for, you know, the service. Mhmm. It's it's a behemoth. And you're seeing Netflix trying to sort of poach YouTube talent onto its platform.
Speaker 3:It brought over miss Rachel. Right? So I I think there is kind of like a war brewing, if not sort of raging at the moment, across, you know, YouTube and Netflix, and it's interesting to see this alliance form between, Netflix and Spotify.
Speaker 1:Yeah. Did you have a reaction to, Ben Thompson was kind of noodling on this take that, essentially, it's very hard for the second generation of YouTube creators who have built their entire business just on YouTube to then take a Netflix or Spotify deal and get off platform because they're so tied into the ecosystem versus someone who maybe has subscribers on their own website. And then, yes, they use YouTube as a distribution platform, but that's not if they turn off YouTube, it's not that big of a deal. And so, the the the the the loose pitch as I was interpreting it was that Netflix and Spotify would kind of run out of talent to approach from YouTube because the next generation was so locked in.
Speaker 3:It could be, but it depends on the structure of the deal. Right? So when miss when miss Rachel went to Netflix, she wasn't, forced to shut down her YouTube channel. She could continue to monetize that content. And, actually, she didn't even make any new content for Netflix.
Speaker 3:That's why it was such a win for Netflix. I mean, we don't know what we don't know what they paid her. Yeah. But she just took this content that was, you know, excellent and brought it over to Netflix. They packaged it up Yep.
Speaker 3:Into a short season. And essentially, she got paid for, you know, double dipping into our existing content.
Speaker 2:Yeah. That's pretty remarkable. Last question, and then we'd love to have you back
Speaker 1:on Yeah.
Speaker 2:Because this was an awesome conversation. How how excited do you think the average app developer business owner in general should be about OpenAI launching ads? Because I know a number of businesses over the years that like were basically be born because a new ads platform. Like I have a friend's company with hundreds of millions of dollars of revenue. They've told me like we would not be a big company if we didn't if we didn't get to hyperscale on on on Facebook in the early days.
Speaker 2:And so I I assume OpenAI will wanna make the ads prod product cheap and performant early on to just, you know, drive this, you know, huge influx of of volume. But I'm curious what you think the opportunity will be early.
Speaker 3:Everyone should be excited about OpenAI launching an ads platform. This is beneficial broadly for the economy. Ads are the driver of the Internet economy. Look. But for Facebook ads, but for conversion optimized Facebook ads, the DDC category won't exist.
Speaker 3:Ecommerce would be much smaller than it was. There'll be far fewer small businesses in this country. Ads is a growth engine, not just for, you know, ecom or not just for, like, tech bros, for everything. It is the beating heart of the economy. Everyone should be excited about this.
Speaker 3:Look. I remember there was was complaining at one point that, like, I I don't remember the exact number, but he's like, yeah. I I I invest in these companies, and 70% of the money goes to Facebook ads. And I wrote a piece saying, you should be thanking Facebook. Because if Facebook wasn't there to absorb this ad spend, you those companies wouldn't exist for you to invest in.
Speaker 3:Right? This is this is
Speaker 6:Yeah.
Speaker 2:Also, the the companies wouldn't spend the money if it wasn't driving results. It's not like you just you don't you don't if if a camp if you spend 20, you know, $20 on a campaign and the CAC is too just high. It doesn't make sense. You just turn it off. Like, that's the beautiful thing.
Speaker 3:Exact exactly. So so, I mean, I think, you know, there there there's there's a reason to be very optimistic broadly about the new opportunity that will be engendered by just just by by LLM empowered content engagement, right, or AI empowered content engagement. It doesn't have to be just LLMs. But but I think, like, where people get mixed up is they think, well, you know, these ads need to be different. There's some different way to sort of integrate ads.
Speaker 3:Well, no. The formats need to be unique and they need to feel native, but ads are ads. Right? If you drive performance and you get conversion feedback and you get the feedback loop going and you deliver more value than you were paid, right, there's compounding there and it grows the economy. So I'm super excited.
Speaker 3:I call this commerce at the limit because I think what all and and a lot of this technology is not being applied to the consumer facing side of things. It's it's getting applied to the back end. Right? So that's what annoyed me about Facebook's last earnings or Meta's last earnings because people are like, oh, look at all. All these big projects, JEM, Andromeda, Lattice drove 3% improvement to click through rate or 2%.
Speaker 3:You know how massive that is at that scale, how meaningful? But the other thing people ignore is that compounds. Every time I spend a dollar and I get more back, what do I invest the next time? Not a dollar. Right?
Speaker 3:I invest what I got back. So it's more, and it compounds over time. I'm gonna make more money, and it's gonna grow over time. So that two or 3% this quarter will will also exist the next time that money's recycled. Right?
Speaker 3:And, also, those products are not static. They're not they're not frozen, you know, in time. They will also continue to improve. So the thing is, like, these these products and this is all in the back end. This is not seen by consumers, but this is where a lot of the investment is going.
Speaker 3:And so people talk about the CapEx. Like, the CapEx is delivering real returns. What are you complaining about? And and the thing is, like, that is that's driving real returns, but it's driving more spend. It's driving compounding spend.
Speaker 3:And that's where a lot of the investment's going. So I think there's there's reasons to be excited across a number of of of service areas here, and it's not just the consumer facing side.
Speaker 1:This is amazing. Thank you so much. Rant. I feel like I just got
Speaker 2:Let's let's get you back
Speaker 1:on schedule We next have to get you back.
Speaker 4:This is
Speaker 1:incredible. Thank you so much for stopping by, taking the time out of your day. I learned a lot.
Speaker 2:Enjoyed
Speaker 1:it. Mostly, I just got fired up. This incredible. Thank you, Eric.
Speaker 2:Thank you.
Speaker 3:Take care, guys, congrats on all the success. It's well deserved. The New York Times profile, Mike Isaac, that's the big leagues.
Speaker 2:Survived. We
Speaker 1:survived. We Thank you.
Speaker 2:Great to see
Speaker 1:We'll talk to soon. Cheers. Have a good one.
Speaker 2:Was one more one last guest. Tim we get a general London.
Speaker 1:Intuition. We gotta hop on on with we gotta hop on with London in just a few minutes. But, Pim is in the restream waiting room. And now, he's in the TVP and UltraDumb.
Speaker 2:Welcome
Speaker 1:to the show. Sorry for keeping you waiting. Give us the news.
Speaker 5:Yeah. What you got? We've raised a $133,000,000 point seven because we're gamers.
Speaker 2:Point seven.
Speaker 5:Congratulations. Point seven. Yeah. To build general agents for environments that require deep space shuttle global reasoning.
Speaker 1:One three three seven lead. Is a gamer reference. Tell me about your you didn't you make money as a gamer in at, like, 18 or something like that? What is that sort of?
Speaker 5:I so I grew up with threats, so I didn't really do much other than playing video games as a kid and built the largest private server on Rinscape when when I was a teenager. Did about a million and a half in revenue by
Speaker 1:the time I entered 18
Speaker 5:years old. Yeah. It was pretty funny.
Speaker 1:That's incredible. I mean Yeah. People come by with, you know, a $100,000,000 fundraisers all the time, but that is that is extreme.
Speaker 2:Well, we don't we don't see a $133,700,000
Speaker 1:The seeds. Seed there. That is that is So thank you so much for stay taking the time. Let let's actually dive into the company. Tell me more about what you're building.
Speaker 5:Yeah. So, we're building general agents for environments that require deep spatial temporal reasoning. So what this means is, like, look at drones, for instance, robotic arms. They all ship with game controllers already, so there's this general interface for applications that's already in all the robotics where we don't need to reinvent the wheel. You know?
Speaker 5:And so the bet that we're taking is that we can train these these foundation models on so much diversity represented in all the gaming data, which increasingly looks more realistic, right, as physics engines get better, and that we can transfer to novel environments with very, very minimal new data. And we're seeing, you know, we're seeing the scaling for this happening now. It's very, very clear we can do this. One application that we're going after. So after doing RuneScape, I worked with doctor.
Speaker 5:Spent three years there. And so one of the applications that we're excited about is search and rescue drones, which is basically decoupling the need for humans to even be observing. And, you know, it can basically cover a lot more space, lot more quickly if if if if if you have general agents that can that can navigate these types of environments.
Speaker 2:So the future of search and rescue is in your vision, like drone swarms that get let's say, somebody's on a hike, they get lost, you'd you'd be able to launch a swarm and cover, you know, a 100 square miles in, an hour.
Speaker 5:Yeah. I suspect there will still be, like, VLMs on the other side initially that sort of analyze footage and sort of process information. But, yeah, I think the the bottleneck is just make these things not stupidly run into things, to be honest. Like, it's not that that that's so that's what we're focused on right now is just general navigation for novel environments in devices that have gaming inputs represented specifically. And that's the key.
Speaker 5:Right? Because we have these inputs that already gamers use to control in all these, like, very diverse environments inside video games, including things like drones, right, that then that then the agent only has to adapt to an environment, not a new action space. And so the the bet is that that transfers.
Speaker 2:What are some other specific categories that that are exciting to you or types of companies?
Speaker 5:Yeah. So so so look at it this way. The model sits in a general action space, meaning that it has an understanding of how different actions relate to the world that it's that it's acting in. You have to make sure that when you transfer it over to the physical world that you've sold for safety. Right?
Speaker 5:And so what we generally do is we we deploy agents, for instance, in video games that have a larger action space that can do loads of things because you don't need to solve for safety as much there. And then when you when you when you can verifiably prove that you deeply understand the specific action space, such as navigation, right, then you start transferring those actions over to to the physical world. And we have we have sort of an internal joke that we think maybe simulation might actually be larger than the physical world because there's only one physical reality and there's many simulated ones. I like that. And so yeah.
Speaker 5:So so so our take is so we're already working with game developers to get these to get these models deployed into their games, which which means, like, much more fun playing video games. And then it's also a great flywheel. Right? Because if we can verifiably prove that these models are performing great against game players, then, you know, that's that's a great benchmark to also start transferring out to other environments.
Speaker 1:Walk through the usefulness of something like Unreal Engine versus, I'm gonna mispronounce it, Gaussian splatting and then a Genie three style, like, generative word world model where you're generating the flame the the the frames on the fly. We've heard about a lot of companies using any all three of those, mixing them together, using focusing on one or the other. Do you have are you particularly bullish or bearish on e an individual Yeah. Technologies?
Speaker 5:I I thought about this question a lot. I I went through the depths of trying to actually, start building my own physics engines, like, actually understand this from first principles. So I'm gonna try I might tickle Let's
Speaker 2:give it up for first principles.
Speaker 1:Yes. Love it.
Speaker 5:So so the most computationally difficult things simulate are high degree of freedom agents, and that grows exponentially as you have more agents in an environment. Meaning that at some point in simulation, you just have you hit a point where you just have to bet on video transfer. Right? And and so and also there's then at the same time, for instance, there's loads of things that we currently do not have video footage of, which means you cannot really bet on those things. Right?
Speaker 5:And so, like, like, cells and, like, you know, smaller smaller things that, like, just aren't well represented, those type of things. Right? So so you always have to use a combination of the two. You always gonna have to use a combination of two. The other thing is that when you sit inside, like, generative role models, like Genie, for instance, you're not fully in verifiable domain.
Speaker 5:Right? Yep. And so the the the problem with right. To be clear, this is an incredible breakthrough. Right?
Speaker 5:But but there's very much use for engines like Unreal. And I think I don't think act I think where we end up is it's actually really annoying not to have that, like, determinism in these world models. Right? Because you want to be in some form of very viable file domain. So I hope that somebody manages to create some form of hybrid architecture.
Speaker 5:Like, okay. So for instance
Speaker 1:But you're talking about ChatGPT. Like like, the you can hallucinate all the text, then you can RL it, and then you have, oh, write some Python. So if you need to do a complex math equation I'm gonna draw Python. Right?
Speaker 5:Yeah. Have you guys ever watched Redstone CPU videos on Minecraft? So there are videos on Minecraft where people actually build Redstone CPUs, and there's also now they build the Cheshkid. So my point is Yeah. You know, we we might actually end up finding, like, really interesting like, my my dream is to be able to, like, simulate a CPU inside a world model where you sort of some form of determinism.
Speaker 5:And and not and, again, this is not at all possible or near possible today,
Speaker 1:but my Yeah.
Speaker 5:Yeah. My my point being, like, maybe a a world model can yeah. Yeah. And so That's awesome. Yeah.
Speaker 5:So so I think I think you need both right now. You want to bet maximally on world models and video transfer for hard for things that are hard to simulate and then maximally on simulation for the things that you want to stay in verifiable verifiable domain on, which is most things
Speaker 1:Yeah.
Speaker 5:In my opinion.
Speaker 1:That makes a ton of sense. Thank you so much for coming on the show. Congratulations. Just very fun conversation.
Speaker 2:I'd love to love to have you back on. Any anything happens in the news that you're excited about, just ping us. We'll have you on. Yeah.
Speaker 1:I'm sure.
Speaker 2:Sounds great.
Speaker 1:We'll talk to you soon. Have a good rest
Speaker 2:of day. Cheers.
Speaker 1:We'll talk to you later. Before we hop off, let me tell you about Wander. Find your
Speaker 2:happy place. Your your happy place. Book Wander. To to let to, like, to leave you hanging there for a second.
Speaker 1:Oh, you're good. Oh. No. I'm fine. I didn't even notice.
Speaker 1:Book of Wander with inspiring views, Hotel Grade amenities, Dreamy Beds, top tier cleaning, twenty four seven concierge service. It's a vacation home but better, folks. And good luck to Raghav in the chat. He is going to a job interview, and we wish him the best. Leave us five stars in Apple Podcast and Spotify, and we will see you tomorrow.
Speaker 1:Thank you for tuning in.
Speaker 2:Can't wait. Goodbye. Have a great evening.