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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 TVPN. Jordy's in front of the horse. Today is Thursday, 10/09/2025. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the
Speaker 2:capital capital. Today,
Speaker 1:I wanna tell you about ramp.com. Time is money saved. Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. That's why the horse is wearing the yellow hat. Also, the show is made possible by Restream, one livestream, 30 plus destinations, multistream, reach your audience, wherever they are.
Speaker 1:Dylan Patel took to the timeline to say he's going to be dropping something huge in twenty four hours. This was, what? This was nineteen hours ago. We have five hours to left to go, 4PM Pacific on October 9. He will drop something that will reshape how everyone thinks about chips, inference, and infrastructure.
Speaker 1:It's it's it's directly supported by NVIDIA, AMD, Microsoft, OpenAI, TogetherAI, CoreWeave, Nevis, PyTorch, Super Micro, Crusoe, HPE, TensorWave, v v v Who's who? SG Lang, etcetera. If you are press, I went to this. I'm very excited for him to drop it. I got the whole briefing, and it is very cool.
Speaker 1:And I do think it will be huge. And it's it's in classic semi analysis fashion. It is very rigorous and detailed and I think will be very, very interesting to dig into when it drops. In the meantime, I have something that's the opposite of rigorous. It's completely it's the other side of the of the mid width curve.
Speaker 1:It's just complete slop analysis, but I think it's useful.
Speaker 2:It's a good thought exercise.
Speaker 1:Yes. So I said token adjusted EBITDA, of course, a nod to WeWork's community adjusted EBITDA. To be clear, no one's doing this. This is something you should not do. You should not value AI companies as a multiple of the total amount of tokens they're generating.
Speaker 1:But as soon as I saw that OpenAI news, they're generating 6,000,000,000 tokens a minute. They're worth 500,000,000,000. I see 500. I see 6. I start dividing those.
Speaker 1:I gotta know what the valuation multiple is. How much am I paying if I'm buying a dollar of OpenAI stock for a stream of tokens? Of course, this is nonsense analysis because tokens have various values. Different produce. Different profit streams, different costs.
Speaker 1:Exactly. There's a whole bunch of things whole bunch of reasons why you shouldn't do this, but I thought it was interesting to do it anyway because I like silly things. And so I think of this more as like like there's a lot of bubble talk. We aren't yet in the eyeballs phase of this .com boom, but if we start seeing this here. Yeah.
Speaker 1:If we start seeing
Speaker 2:this so much, we just call it BubTalk.
Speaker 1:BubTalk. Exactly. But I wanted to give a little bit of history on the nineteen ninety nine bubble and how valuations were processed then. It's pretty fascinating. So back in the late nineteen ninety nine in the late nineteen nineties, eyeballs became a hilarious but deeply important KPI for tech companies.
Speaker 1:It's a very funny name. It was
Speaker 2:basically just eyeballs.
Speaker 1:It was basically just audience size. Unique visitors, page views, time spent on-site. These were all nonfinancial, non GAAP metrics that were meant to serve as proxies for eventual earnings and value creations. Revenues were tiny, and earnings were always negative. So eyeballs were the best metric that folks had to understand who was growing at least relative to other
Speaker 2:dropout posts back then. Somebody sends around physical mail. They're like, I'm dropping out of college. I have 10.
Speaker 1:Raised eyeballs. Yeah.
Speaker 2:A $100,000.
Speaker 1:I mean, we we we see the charts now. Fastest $200,000,000 in revenue. Obviously, that's a very good, very strong business metric that assumes that you will be around for a while if you're generating a lot of revenue very quickly.
Speaker 2:Time to 100 too is also very old news. Obviously, everyone's focused on time to a billion.
Speaker 1:A billion in the run rate.
Speaker 2:Yeah. Was recorded Yeah. Reported that Cursor will be somewhere around there by the end of this year.
Speaker 1:Yeah. And so that's like, what, two years, maybe three from
Speaker 2:Was it 2022?
Speaker 1:They were technically any sphere before, but, really, you should start it as, like, the launch of Cursor, the product, probably. But they've been on a tear. But it's way different to look at the size of a business as if I'm buying a dollar of of stock, it's tied to a stream of revenues, which could be very profitable versus just eyeballs. But this is audience size has, you know, been around for decades even in the nineties at that point in the marketing world. And so it was just kinda pulled over.
Speaker 1:And a lot of this came from Mary Meeker. She's now at Bond Capital. She was the hotshot analyst of the day at Morgan Stanley. And this is what's interesting. So we think of eyeballs in the in the .com bubble.
Speaker 1:We think of it as a 1999 phenomenon. In 1996, she wrote, what's the value of an eyeball or an ear? Three years before the '99 bubble got crazy, there's a you can read her whole Internet trends report on Scribd, which is pretty cool. And then three years later, she was profiled in The New Yorker. We actually read the whole profile on this show about a year ago, and, that was a really interesting piece.
Speaker 1:And the name of the piece in The New Yorker was called The Woman in the Bubble. So The New Yorker like, the bubble talk was not like, you think about the bubble talk right now on X, and it's like it's bubbling up really quickly. But, like, The New Yorker's not writing profiles on the AI bubble yet. They'll probably get there a few months just like what we saw with French French TV. Like like, the legacy media takes a little bit longer because they do a lot more research to write a profile.
Speaker 1:Yeah. It just takes months to write a profile.
Speaker 2:Yeah. It's interesting how I mean, social feeds just are are perpetually months ahead of headlines.
Speaker 1:Exactly.
Speaker 2:Right? And so we're seeing every single day, I see somebody outside of x or outside of teapot Yep. Or or the the tech community on x calling it a calling it a bubble Yep. Saying, you know, when this thing blows up and you guys crash the global economy, like, it's all gonna be so obvious.
Speaker 1:Yeah. It's just it's just starting on the most bleeding edge. It's still not in the pages of of The New Yorker yet. It was in 1999. The the title of the article about Mary was the woman in the bubble.
Speaker 1:And this is what's extra interesting to me. It took eleven months more after that article for the stock market to actually peak. And so in that article, in that profile of her, of Mary Meeker in The New Yorker, she's saying it's a bubble. It's crazy. I've never been seen anything like this in my career, and she's kind of grappling with the fact that it's her job to analyze these .com companies, but everyone can tell even her, She can tell that it's a bubble.
Speaker 1:And so you're in this weird dynamic where people can can say we're in a bubble, but they don't know exactly you can't stop it because it's a it's animal spirits, and it's a force greater than any one person. So 1999, eyeballs were highly valued. Let's get into some numbers. The market was pricing traffic at around $700 per monthly unique visitor. So if you got a million unique visitors on your website, you could sell that company for $700,000,000.
Speaker 1:And I know people that did, and they're venture capitalists now, and they're retired, and they got extremely lucky by some concern. They sold the top, basically, and they did very well.
Speaker 2:$700 per visit.
Speaker 1:$700 per monthly unique visitor.
Speaker 2:And that's not even somebody that has an account. Yeah. That's just somebody that visits
Speaker 1:Chooses to go to the website. I mean, you could do the math for us. It'd probably be around there. But
Speaker 2:No. It's it the it's worth noting that we haven't gotten there
Speaker 1:yet at all. Not at all. Now to be fair, that's $700 per monthly user. That analysis was heavily weighted by Yahoo, which was, by far, like, the largest, platform that was that was driving this metric. If you pull Yahoo out, you you get a much lower number around 400 per unique visitor, but that's still a high.
Speaker 1:And then for m and a, for smaller companies, it's not like everyone is actually comping to the Yahoo number. It was more around it was closer to a $150 per monthly unique visitor. But still, you know, you get a million unique monthly visitors and you sell the company for a $150,000,000 in 1998. That's pretty good.
Speaker 2:Yeah. And it's worth noting how much harder it would have been to get a a visitor back then. It's not like you could just run. If if you were getting value if your business was being valued at just getting somebody to your site and they were putting a value on that Yep. Today, you could just run traffic to it like crazy through all of, you know, search engines, through social media To through organic content, through TikTok.
Speaker 2:So it was much harder to get somebody to your site.
Speaker 1:I don't know. There were a lot of crazy, like, there's a toolbar that's installed that automatically routes traffic Sure.
Speaker 2:I'm just saying it wasn't quite as programmatic.
Speaker 1:A lot of people would pay Yahoo for higher ranking because it was a portal, not necessarily a search engine.
Speaker 2:Wasn't But I'm just saying everybody didn't have a mobile device in their pocket
Speaker 1:I agree.
Speaker 2:I agree. Where now they're probably visiting an order of magnitude you know, multiple orders of magnitude more websites on a daily basis.
Speaker 1:Yeah. You're 100% right. If you if you apply this metric to OpenAI, I had to. OpenAI has 800,000,000 weekly active users and is worth 500,000,000,000. So that's
Speaker 2:And I believe but but I believe they're counting this as, like, people that have created an account, not not just a website visitor.
Speaker 1:Wildly different. Way stronger way stronger audience. And that's still at $650 per eyeball. That's way lower than what the Yahoo number and the average number was in the in the .com bubble. And you could also use the estimated 6,000,000,000 estimated visits for OpenAI and get $83 per visit if you're trying to get a little bit closer to the comp.
Speaker 1:So you're still off by an order of magnitude there. Again, these are all nonsense estimates. I did wanna flip them around and go towards token generation instead of a like, if you thought about a dollar of OpenAI equity as buying a stream of token generation instead of a stream of discounted future cash flow, which you should not do, you could estimate something like a 22 x ratio between valuation dollars and tokens generated per minute. You could also flip this around and estimate that for a $100 of equity, you're the owner of an annual stream of 2,300,000 that then need to be sold and eventually drive profit from. That doesn't seem that crazy to me.
Speaker 1:I don't know. It a lot of it depends. Two, 2,300,000.0 tokens right now would sell for, what, is it $10.20 bucks or something? It's it's $10 per million tokens for the high high end.
Speaker 3:Somewhere around there. Yeah.
Speaker 1:So so the the like, the and, of course, like, this is extremely silly because token tokens are sold for a variety of prices. Token volumes are growing exponentially. Token generation cost is falling. This is funny math, but I like funny things. And so I hope this doesn't show the most important thing is that I hope this doesn't show up in sell side analysis.
Speaker 1:And also, I also hope that I don't hear
Speaker 2:That's it.
Speaker 1:Whatever these
Speaker 2:that I saw posting in the last twenty four hours Really? That was trying to get people to focus on-site visits, which I don't
Speaker 4:think is.
Speaker 2:And I'm not gonna name the person, but Well but, again, sophisticated investors today or even not so sophisticated investors today are not gonna put a lot of value on on just pure site visits.
Speaker 1:Yeah. Well That's healthy. Before we move on, let me tell you about Privy, wallet infrastructure for every bank. Privy 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. In other in other data point about the incredible growth of these properties, Bill Peebles, who's coming on the show tomorrow from OpenAI, said, Sora hit 1,000,000 app downloads in less than five days, even faster than ChatGPT did despite the invite flow and only targeting North America.
Speaker 1:Team working hard to keep up with surging growth, more features and fixes to over moderation
Speaker 2:It's worth noting. So if you look at the the charts on the App Store, in the top free apps, you have Sora, ChatGPT
Speaker 1:Yep.
Speaker 2:Gemini, Tea Dating, Threads, and McDonald's.
Speaker 1:McDonald's.
Speaker 2:And the top paid apps are Shadow Rocket, HotSchedules, Anki Mobile Flashcards Woah. Procreate Pocket, Tonal Energy Tuner, and AutoSleep Track Sleep.
Speaker 1:Wow. I feel like
Speaker 2:Like, so it's paid app ranks. Six apps you've never heard of.
Speaker 1:Yep.
Speaker 2:And then and then, again, it's still worth noting, Tee dating just still in the top five
Speaker 1:is Yeah.
Speaker 2:Actually insane.
Speaker 1:I see them as, like, wildly different markets. I almost see them as the free apps are venture backed hyperscaler, multibillion dollar, multitrillion dollar company efforts, and the paid apps are much more like lifestyle businesses. They're probably generating cash flow. I feel like all of those founders they might be part of a roll up or something, but they're thinking about it in much more financial terms than just go go operate in some winner take all market.
Speaker 2:Seems like there's alpha right now being a venture backed business and just making a paid app.
Speaker 1:If you want charge the charge.
Speaker 2:Way easier, 10 times easier to
Speaker 1:to I wonder how cheap you can make your app. Can you make it a dollar? Can you make it 1ยข?
Speaker 2:$2.99, I think, is what the Oh. Few of these are. Anki Mobile must be printing. Have their app is $25 and it's top three paid apps
Speaker 1:in the world right now. If you're looking for an app that you can get started for free with, get Figma. Think bigger. Build faster. Figma helps design and development teams build great products together.
Speaker 1:Greg Brockman was talking about Move 37. This is the big question in AI. When will we see a Lee Sedol Move 37, a truly novel strategy in Go that DeepMind was able to achieve? When will we see that in text? When will we see that in image?
Speaker 1:When will we see that in scientific research done by LLMs? And Greg Brockman was on a podcast and said, on Move 37, I do think next year, we will have some incredible models. The milestone I am most excited about is having models that can solve hard problems. And the analogy that I like to make is think back to AlphaGo, you know, Move 37. That changes people's understanding of the game.
Speaker 1:Imagine that in coding. Imagine that in material science. Imagine that in medicine. Having real breakthroughs that are either potentially the AI by itself or the AI assisted with top humans, I think we'll start seeing that. And so we've seen a few examples of now, know, top tier mathematicians kind of going to GPT five and saying that there's breakthroughs.
Speaker 1:Tyler, what's your read on how close we are to a Move 37 like breakthrough in a non, you know, perfectly simulated environment like Go?
Speaker 3:Yeah. I mean, it's hard to say. I I think first, what we'll see before we see, like, completely novel breakthroughs is just, like, being more helpful to the top people. So, you saw Scott Aronson talk about this a couple weeks ago. Yeah.
Speaker 3:He said, Jeep d five, like, helped him get past some roadblock that he he said he, you know, he he would have figured it out if he spent another hour or two or maybe Mhmm. Asked one of his grad students. But it just, like, helped speed him up. So it's always hard to figure out, especially with with these novel breakthroughs, because people wanna, like, credit for them. Right?
Speaker 3:If you're gonna if it if it's something that's worth a Nobel Prize Yeah. Someone is gonna wanna, like, take credit. So they might try to, like, hide the
Speaker 1:the the impact Yeah. That they Maybe.
Speaker 3:So it I think it's hard to see hard hard to figure out the exact, like, attribution that you can do to LLMs.
Speaker 1:Yeah. Yeah. It's interesting that he's kind of not drawing a a super clear line between AI by itself versus AI assisted with top humans. Because you have to imagine that a vast majority of modern Nobel Prizes are computer aided just in the sense that that, like, the lab notebook was digital and, like, the pipetting machine was automatic. And, like, anything that you're doing to win a Nobel Prize, you're gonna be leveraging computers now just to speed up your workflow.
Speaker 1:That's very different than than just prompt
Speaker 2:I did get a
Speaker 1:figure out a novel science.
Speaker 2:I got a I got a lunch with with a a physics professor Yeah. Right after the GPT five launch and he was able to one shot a problem that he felt he he estimated would have taken him three months to complete if he was just doing it Yeah. Himself, which which is why.
Speaker 1:Yeah. Yeah. Like, that's interesting. It's just it's not move 37 because move 37 was something that Lee Sedol felt that he would never have come up with, not in three months. It was not something that was even on his radar.
Speaker 2:Totally. So I'm not putting it in the same bucket Yeah. And and neither was he. Yeah. But it was again, was it wasn't doing anything especially novel.
Speaker 2:It was just doing a massive amount of work in, you know, twenty minutes.
Speaker 1:Yeah. The but the impact is still massive. Like, if you even if you're just like, okay, we're gonna speed up the the level of scientific discovery by 2%. Like, that's just massive. So we don't necessarily need Move 37 to justify all the work that's going into AI.
Speaker 1:I'd be super excited about AI. Like, it's fine if it's just if it's if for a long, long time, it's just an assistant because why not? Why why not speed things up? Yeah. Anyway, if you wanna speed up your development workflow, head over to Cognition.
Speaker 1:They're the makers of Devon. Devon is the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 2:Spike is sharing there's nothing happening in America besides AI.
Speaker 1:Yes. And
Speaker 2:there's an article that says without data centers, GDP growth was point 1% in the 2025. Harvard economist says that is brutal and not super surprising. At least at least we're able to admit that here that, you know, AI CapEx is driving GDP growth. Yeah. And there's, again, that just massive disconnect between the real economy and our little bubble.
Speaker 1:Yeah. I wonder I would love to know more about breaking down how they're counting, like, data centers in this GDP growth number. Is it specifically, like, the data center construction? Is it chip production? Is it energy production?
Speaker 1:Is are are any of the, like, revenue streams from the foundation models actually moving GDP at this point? It seems like maybe not. I don't know. This does seem like a like a higher level analysis. But certainly, I don't know.
Speaker 1:It'll be interesting to see.
Speaker 2:Well, Ludwig says had a had a great post that we got a chuckle out of this morning. He said, wearing my TPPN jacket and thinking cap from Anthropic. Look at my OpenAI coin. I'm such a good boy. Did you know I got an OpenAI coin?
Speaker 2:It's because I gave them lots of money. Anyways, I'm a 15 year old dropout and I'm building the first $1,000,000,000
Speaker 1:Evaluation. Evaluation
Speaker 2:solo
Speaker 1:company the world. Evaluation.
Speaker 2:Such Anyways, having having a lot of fun here. The the anthropic cap and TBPN jacket combo is is Yes. Is is pretty pretty on the nose.
Speaker 1:Ludwig is a master of the Wojak.
Speaker 2:He really is.
Speaker 1:This reply to you is remarkable. Not like the rest part one. Where did you find that yellow token? Where did you find that jacket? Thinking cap.
Speaker 1:The the cap with the helicopter wheel on top is utilized. Nobody Someone should
Speaker 2:We don't know how to make these hats in America.
Speaker 1:Yeah. That was kind of the the the the the the most iconic tell of like the, I don't know, 2005 nerd is very like I don't know, just kind of like you're hanging out on some sort of corporate campus like a Google. It's multicolored. It's very it's very sophomoric. No one's brought that back and reappropriated it.
Speaker 1:So maybe someone should. Maybe maybe someone should make it make it trendy.
Speaker 2:Yep.
Speaker 1:The the spinning wheel cap.
Speaker 2:Well, in other news, Francois Chollet is very impressed by the new tiny recursive model from Samsung, a tiny 7,000,000 parameter model. Just beat DeepSeek r one, Gemini 2.5 Pro, and o three minute reasoning on both ARG a g one AGI one and ARC AGI two. And the model is 10,000
Speaker 1:It's ARC AGI one.
Speaker 2:Oh, okay. Okay. I was like, I'm I'm not familiar
Speaker 1:Yeah. With It is odd because I I I felt like at the end of this, it looked very AI generated because this isn't just scaling down. It's a completely different, more deliberate way of solving problems. So it feels like AI generated text, but the the typo there is a
Speaker 2:little bit odd. But it's cool to see Samsung getting in the game here.
Speaker 1:Yeah. It is it is unexpected. I I feel like a lot of the labs are are are pretty excited about Arc AGI. Obviously, x AI did very well with Grok. And it seems like the the level of respect for performance on ArcGI is pretty high right now.
Speaker 2:Yeah.
Speaker 1:Tyler had a chance are you still at the top of the leaderboard, or have you been unseated on ArcGI? If you're just tuning in for the first time, ArcGI is a is a benchmark for AI systems, but we we put Tyler on the task and he was able to defeat all of the systems, actually.
Speaker 2:One of the top humans.
Speaker 1:And and and I think he was in the top 10 at the time, but he probably he should have fallen at this point because Yeah.
Speaker 2:Would hope so. Liquidity says Prime might need to rebrand to subprime, apparently. In 2023, they sold 1,300,000,000.0 in product. It's on pace to do only 300,000,000 in 2025.
Speaker 1:I don't know how that's possible.
Speaker 2:I mean, do know so so what Prime did, which was genius Yeah. Was they created a a sports drink. Okay. And then they also created an energy drink. Yes.
Speaker 1:And they
Speaker 2:look exactly the same. Yes. And so I think that children were buying the energy drink. Yes. Their parents think they're just buying a a Gatorade alternative.
Speaker 2:Yeah. And meanwhile, the kid is getting ramped up on hundreds of milligrams of caffeine. Yep. Which, I don't know, back in back in my day when I was a kid, my parents were like, don't do caffeine. I pretty much abided by it until I was probably, you know, 18 and started.
Speaker 1:Yeah. I didn't really have caffeine until I was in college. But I remember being maybe a freshman or a sophomore in high school and a friend's older brother had access to Red Bull and was talking about the experience of drinking Red Bull like it was hard drugs. Yeah. It was remarkable.
Speaker 2:But, yeah. I don't know. I mean, it's still $303,100,000,000 dollars is more than respectable.
Speaker 1:Insane.
Speaker 2:But I've never seen a brand go I've I I don't has has we we should actually look at the history. Do brands going to north of a billion dollars in sales and then retracing down to this level
Speaker 1:is mean, I worked in consumer packaged goods for a long time and and with my first company, like, it was a rough go, but that the the the pattern of that rough go was very fast revenue ramp and then plateauing.
Speaker 2:As a curve. It was not not a
Speaker 1:falling off cliff. Once you have a customer on board and they're subscribed
Speaker 2:Well, it's also it's about distribution. So I think in this case, they basically when when you have these influencer brands, it's when you have KSI and Logan Paul, they effectively probably put like $200,000,000 worth of like marketing firepower Yep. Into growing the brand initially. Yep. And even the biggest influencers in the world are not typically enough sustain a brand, you you need to branch out.
Speaker 2:Right? Yeah. Because eventually, the the the ad just become less effective. And so, again, I think this was, a number of factors contributing here.
Speaker 1:You So think it might have been a lot of trial that was driven where somebody sees People are viral video explaining that he launched the brand. They try it, and they're like, like, it's not available in my local store, so I'm gonna churn.
Speaker 2:They just try it, and they don't love it and they don't stick around. I mean, the the number one Yep. More so than, like, influencer partnerships, CPG brands work in the for the most simple reason Mhmm. Because the product is great and people love the product. Mhmm.
Speaker 2:And they come back and they buy it again and again and again. It And becomes a part of their life. I'm not like a DAU or a weekly active user of Red Bull. Mhmm. But I probably have consistently had, like, 10 Red Bulls a year for my entire adult life Yep.
Speaker 2:Randomly.
Speaker 1:How real do you think that 1,300,000,000 number is? Because you could imagine that this was, like, in 2023, Logan or KSI, like, leaked a number that was crazy as, like, a stunt, and it was taken out content.
Speaker 2:Months of revenue multiplied it by
Speaker 1:Or or even someone leaked a number, and then they multiplied it. And it wasn't even on Logan and KSI. It was, in fact, on someone downstream. Some some, you know, want somebody who wanted to go viral just said, oh, well, I saw that my Shopify order number was this, multiply it by that, and and and come up with some crazy number that was never really, what they actually did that year. Because I am I am shocked because, typically, it's like we talked about this with Create.
Speaker 1:Once you get the the target distribution, like, you should be able you you wouldn't necessarily just see a massive spike. You might see some trial and then some drop offs.
Speaker 2:It's like Bloomberg
Speaker 1:fall off by four.
Speaker 2:Is who reported
Speaker 1:Four x.
Speaker 2:At one they
Speaker 1:reported Two wow. 1,200,000,000 in sales, not valuation.
Speaker 2:Yep.
Speaker 1:That's a lot. That's crazy. Well, I mean, still, if you're if you're, you know, just thinking about this from, an influencer perspective launch launching a brand, winding up with something that does $300,000,000 a year is is nothing to laugh at. So still impressive run for the folks over at Prime.
Speaker 2:In other news, Delta had blowout earnings and guided up Oh, really? While highlighting bookings have actually accelerated the last six weeks Mhmm. To Elliot Capital. This is confusing because if worse if if, you know, usually, you would see a recession Mhmm. In the real economy Mhmm.
Speaker 2:Impacting bookings. Right? Yeah. But not you know, Delta's not seeing it.
Speaker 1:So Well Let me tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation.
Speaker 2:Well, I think I think it's time.
Speaker 1:I think it's time.
Speaker 2:We have an absolute legend.
Speaker 1:We have John Quinn from in
Speaker 2:the to bring him onto the show.
Speaker 1:And I have here printed out, good to meet you. Welcome to the show. John, welcome to the show. Thank you so much for joining.
Speaker 4:Good to meet you. Good to meet you.
Speaker 1:I have here printed out one of the greatest out of home advertisements in the history of California Burbank Airport, I believe, where I saw this one for the first time.
Speaker 4:Found
Speaker 1:that. It says, Quinn Emmanuel trial lawyers, justice may be blind, but she still sees it our way, 88.4% of the time. Did you think of this marketing copy? Was this some genius on your team? How did this come about?
Speaker 4:It was within our firm.
Speaker 1:Okay.
Speaker 4:It wasn't some outside PR. That's good. But, you know, we came up with the copy.
Speaker 1:Yeah. It's amazing. To me about a little bit of the about of the journey. How are you defining the firm now? Has anything changed over your career?
Speaker 1:I mean, it's not exactly a nontraditional path. You know, you went to law school, built the firm. But what were the key decisions along the way?
Speaker 4:Well, I started out at a big firm in New York. That's very well known, Crevasse, Wayne and Moore. Oh, yeah. But you know, I'm from the West. I grew up in Utah.
Speaker 4:Yeah. Went to college here in L. A, really liked L. A. I liked New York.
Speaker 4:But I decided I wanted to come back to L. A. Came back here, bounced around a little bit. And we started this firm in January 1986. And we started with four lawyers, Downtown L.
Speaker 4:A, not too far from here. And along the way, we decided to focus just on disputes work, litigation work. So most large firms, we're now 1,300 lawyers almost There
Speaker 2:we go.
Speaker 4:In 34 locations around the world. Most firms of that size are so called full service firms.
Speaker 1:Yep.
Speaker 4:So they'll have some deal lawyers.
Speaker 2:Corporate.
Speaker 4:Yeah, they'll have corporate lawyers, they'll have some tax lawyers, trust and estates, and somewhere they'll have some litigators. And we thought we got we came to realize that this model of only doing litigation, arbitration, disputes work, government facings, kind of dealing with legal risks in all its different forms was a very powerful model. And so we decided just to stick with that. We're not going to try to be
Speaker 2:And historically people would diversify because they wanted the stability of a variety of different businesses or they wanted to be able to add kind of contract effectively like add hours to existing relationships.
Speaker 1:And I
Speaker 4:I you know, so if you have because I'm
Speaker 2:sure you would've had pressure over time from people that say, I love working with you. Can you do more for me?
Speaker 4:You know, I think the thought is you want to be able to service all the client's needs. So a client may want to do some M and A work, they may want to raise some capital, they may and then they may have need tax advice.
Speaker 1:Yeah, you're effectively processing. From time
Speaker 4:to time they'll have a litigation. So the thought is to cover all those. And by the way, that's how our industry is organized. We're one of one. Yeah.
Speaker 4:I mean, there is no firm I don't know what the next largest litigation only firm in the world is, but it's probably not more than 50 lawyers, wherever it is. Yeah. And we're almost
Speaker 2:So you started in 'eighty six. How long did it take you to become the most feared lawyer in the world?
Speaker 4:Well, so what you're alluding to is there's a consulting firm, BTI Consulting. We had nothing to do with this. They called us up one day and told us they were doing this survey. That they survey the general counsel at, like, three fifty large corporations around the world. And they asked them, what law firm do you least want to see on the other side in the dispute?
Speaker 4:And they were publishing a list, and, you know, we've always been on that list of the top They call it the fearsome foursome. And a few years ago, we got them to tell us, okay, of the four, which one actually got the most votes? And they told us, and for five years running now,
Speaker 1:we
Speaker 4:have been, we say, we characterize it as, the most feared law firm in the world.
Speaker 2:It's good to be feared.
Speaker 1:What's secret?
Speaker 4:Well, our business, don't find clients very often that are looking for shrinking violets to represent them, to stand between them and trouble. They're looking for lawyers that will cause the other side to think twice. There's a settlement here, this can go away for this amount, Or you can you see what's behind door number two.
Speaker 1:Yeah. Yeah.
Speaker 4:And so, you know, we think we can get resolutions that other firms can't because of our reputation and our record.
Speaker 2:What's the secret to paying for yourself?
Speaker 1:Win rate? Is it is it case selection? Walk me through all the decisions that make sure that
Speaker 4:you're No, we don't just select winners.
Speaker 1:Yeah.
Speaker 4:We don't select just winners. Yeah. I mean, we're in for the hard cases, the tough cases to win. And what's behind that is frankly, there aren't shortcuts. Doing what we do at the highest level is labor intensive.
Speaker 4:And it requires people who are not just smart, but truly dedicated.
Speaker 1:What's the hardest case? What's the long shot that you actually wound up winning?
Speaker 4:Well, early in my career, I mean, I'd be embarrassed to kind of tell you the facts. It was an employment case and it was we were defending a discrimination case where there were plaintiffs. They were both African American. They were both, you know, over 55 years old, I think. And they were both let go.
Speaker 4:And there was evidence, I mean, the plaintiff had some evidence that the motivation behind the they had both been terminated from their jobs that the motivation you could argue that age entered into it, Maybe race entered into it. Sure. It was a very, very tough case. Yeah. And I'm kind of embarrassed to tell you almost of these thirty years later.
Speaker 4:Mean, we won the case.
Speaker 1:Yeah, yeah. What about in tech? You've been a part of some of the biggest tech cases. Is that something that took you a while to get up to speed on? Is it is there anything different about working with a big tech company from any of the other work that you do?
Speaker 4:So we noticed twenty five plus years ago what was going on up in the Bay Area and And in Silicon we made a decision that we wanted to be part of that and start doing some intellectual property work, patent litigation work, tech work. So we're there for the conflicts. We're not raising money. We're not doing the M and A work. It's primarily patent litigation.
Speaker 4:We now have the largest patent litigation practice in the world. But we sent a lawyer up there to start an office. And frankly, was a little bit difficult to get traction in the beginning because there was then, I think it's diluted somewhat now, kind of a Silicon Valley culture. Yeah. Yeah.
Speaker 4:And people wanted to know how much time did you how much Valley experience did you have? And we were kind of we were kind of outsiders. We did some recruit some people locally, but it took us a while, frankly, to get some traction.
Speaker 2:What's different about Silicon Valley? I you know, there's so much about Silicon Valley that is weird around IP. It's like in software you would have there's a there's a world where if somebody developed a unique user experience, you would have been able to really enforce that in in in the scale of time. If a big platform creates some incredible feature, it's gonna get copied by every big company that that it's relevant to. How did that kind of evolve?
Speaker 2:Because I think early on, you maybe would have expected that you could have and if somebody like a Snapchat creates a Stories feature that they that could have been there's another world where that could have been IP but it didn't play out that way.
Speaker 4:Is kind of a culture, there's a feeling in many circles especially among the biggest companies, the hyperscalers and and the like that you should compete based on your business. Don't compete on IP. Yeah. I mean, is a reluctance
Speaker 2:completely different than like almost every industry in the world. Yeah.
Speaker 1:Biotech would never say that.
Speaker 4:Well, mean, don't don't see the big automobile companies suing each other either. Yeah. You don't see the big airplane companies. Oh, there'll be trade disputes between Airbus and Boeing, but not so much technology disputes.
Speaker 1:Interesting.
Speaker 4:And there is kind of a feeling, and you know, Elon Musk has been outspoken about this Yeah. That anybody, we're not gonna anybody can use our inventions. Yeah. He said things, he has said things like that
Speaker 1:Yeah.
Speaker 4:in the past. So you don't see the big players going after each other so They will, there are examples. But there's kind of an ethos that you compete on the business, you compete on your offering and you don't compete with IP lawsuits.
Speaker 1:What lessons did you take away from working with Elon? Is he different than other clients? Is there something that you were coaching or advising at various points of time?
Speaker 4:Well, we've represented Elon in a number of cases, including cases have gone to trial here in California. There was that defamation case Yeah. The British cave driver Yep. Diver remember. Where there was a tweet about Yeah.
Speaker 4:Whether this was a pedo guy
Speaker 1:Yeah.
Speaker 4:And the case about wanting to take Tesla private for $420 a share. Funding secured. Tried both those cases. I was not on either one of those Okay. Trial Yeah.
Speaker 4:So I have not we have a team of people that work very, very closely with Elon. So what I know about him and our experience working with him is second hand. I do know, you know, he values his time. He closely guards how he spends his time. I don't I think it's fair to say that based on what I've heard that spending time with lawyers preparing for depositions and trial and the like is not the top of his list of things that he likes
Speaker 2:Not priority,
Speaker 1:I can imagine. So
Speaker 4:he's a busy guy and obviously he's got great instincts himself.
Speaker 1:Yeah. What about
Speaker 4:I can tell you just one kind of one story. Yeah. So in that defamation case, he had tweeted that I assure you this British guy is a pedo guy. And he came into law and then lived in Los Angeles, sued him for defamation here. We didn't have a lot of time to prepare him for trial.
Speaker 4:And when the trial started in a federal courthouse downtown, the plaintiff called him as their first witness. You can do that. You can call the adverse party, put him on the witness stand and immediately start cross examining him. So the jury, the first witness they see is your adversary being cross examined. Mhmm.
Speaker 4:And the question to Elon was, when they put him up there was, this is a defamation case. You're Elon Musk, so the world really cares about what you say. Not a bad question. What's he going to say?
Speaker 2:Yeah. It's hard
Speaker 4:to deny. And there's kind of a beat, and he says, Well, I'm not so sure. I don't know. I've been talking about our need to get away from fossil fuels for so long now and it just doesn't seem to be happening. I'm not sure people aren't are listening to me at listening to me all.
Speaker 4:Was like, genius.
Speaker 1:That's remarkable. Yeah, that's a good argument. That's very funny. We we I mean, we're tracking like a crazy AI boom, crazy tech boom right now, mostly from the financial markets. We have founders on.
Speaker 1:I'm sure we have seven people on today that are raising a lot of money. Is there a boom in tech litigation?
Speaker 2:Well, maybe even before that Sure. Go talking about kind of the .com era, you saw this craziness. We opened the show talking about how people were just valuing eyeballs. Right? And there was aside from that, there was like, you know, these round trip, you know, effective, you know, commercial agreements that ended up getting litigated in the years following after the after the crash.
Speaker 2:What kind of stood out from that era? What was what was just, you know, I guess, what what were the takeaways from that era? Did you ever think we would repeat those kind that kind of cycle? Because I'm sure you that you were in the your job even after the crash just got busier and busier.
Speaker 4:Yes. Whenever there's a crash, as in the financial crisis, for example, 02/2008, which we weren't very involved in, that plays out in the courts, of course. There'll be people who've lost a lot of money. There'll be claims of fraud and misrepresentation. You know, in the .com boom, there were down rounds.
Speaker 4:There were class actions of all kinds, securities class actions. So every deal gets scrutinized in retrospect. In AI, where we are look, I'm not an economist Yeah. And I'm not a prognosticator about where we are in terms of whether this is a bubble or not. I can tell you in our world, the disputes world, litigation, we're seeing a lot of AI related And there's no question.
Speaker 2:And is that around primarily today? I can imagine the trajectory is like right now it's a lot around IP. Right? We saw case against Anthropic around their their usage of I forget. Reddit.
Speaker 2:Well, there's Reddit. It's getting litigated but then the books where they They
Speaker 4:just did a huge settlement.
Speaker 2:It was big settlement. And so right now it feels like we could be in the era of like litigating around IP and what what even is IP in in the in the world of generative AI.
Speaker 1:But no
Speaker 2:one's losing money. But it feels like the the next wave could be around just rehashing and and litigating. It's gonna be a lot of lawyers looking over. You know, this this announcement that went out, it's like, yes, in the fine print it said that it wasn't an actual deal yet. It was just a kind of a a general Yeah.
Speaker 2:Sentiment from the two companies. But but I but yeah. How do where do you think you think we're at all close to having some precedent around AI and IP or is this gonna take years?
Speaker 4:I mean, AI is throwing up so many novel legal issues. I mean, IP for sure. Everybody's heard about the cases that have been brought relating to music, literary works, visual works Yeah. Using copyrighted materials to train large language models. And whether that's copyright infringement or what's called fair use.
Speaker 2:Male Yep.
Speaker 4:Male So we have dozens of those cases.
Speaker 5:Mhmm.
Speaker 4:We finally have a couple of decisions now out of the federal court in San Francisco, where the judges in those two cases one case involving Meta, another case involving Anthropic Uh-huh. Decided that it was fair use, that it was not copyright infringement, to use copyrighted materials to train large language models, although both decisions were kind of qualified. And there were some unique facts in both cases. But, yeah, we're starting to have those decisions on various issues. But there's so many things.
Speaker 4:All this money is going into large language models and AI and there's a And
Speaker 2:you think you think a lot of founders are just running the calculus of I know that I'm gonna have to eventually pay out something for what I'm doing but I'm just gonna run with it because I'll I'll be able to eat the eat the cost later and and if I wait then my competitors will will
Speaker 4:I don't know. Losing one of these cases, the copyright cases, there's so much involved, price tag could be very, very big. Yeah. So I don't know that people are sitting back saying, it's just the cost of doing business.
Speaker 2:Yeah, but at the same time, if your competitor is like willing to take the risk and they can ramp their market up, market cap up into the hundreds of billions, they're net they know that and and the alternative is, you know, being safer around IP and then you just lose the race, then you're a zero anyways. So I think a lot of people are it feels like a lot of people are willing to just roll the dice and say Yeah. We'll figure it out later.
Speaker 4:Well, Apple in its early years had a reputation for not being very careful with its IP. Mhmm. You know, they launched the iPhone knowing they did not own the Oh, name yeah. It was owned by, I think, or
Speaker 2:They opened it. Yeah.
Speaker 1:Cisco, I think.
Speaker 4:And so as soon as they launched it, there was a lawsuit filed.
Speaker 1:Yep.
Speaker 4:Cisco versus Apple. It was immediately settled. I've never heard what it's
Speaker 6:settled Yeah.
Speaker 4:Male But that was Steve Jobs, driving ahead and kind of doing what you're saying. I think they've gotten, a lot more careful. But there's just a host of issues. Like, have all this money going into AI and AI inventions. How are you going to protect it?
Speaker 4:You cannot patent an algorithm. You cannot patent a mathematical application. You know, these come under the rule of general ideas. Again, The laws of nature.
Speaker 2:Yeah, yeah. And in the talent wars are a whole other thing. I'm curious what your kind of view on over the summer we saw all the labs kind of poaching, pulling talent from different places and people realizing that in this person's brain is like potentially
Speaker 4:You a 100 that's million think that's they're not being hired for what is in their brain? They know. Of course they are.
Speaker 2:Which
Speaker 4:And they that's an example of what I was referring to earlier where the major players are very reluctant to sue each other. I'm kind of surprised there hasn't been more litigation over this poaching. But I think it's this phenomenon that
Speaker 2:Yeah, but our view is that they were very much like aqua hires, just unauthorized aqua hires, where it's like this team knows how to do something really well that they've learned through spending tens of millions or hundreds of millions or sometimes even billions of dollars and we want what they know how to do. We want the process that's in their head basically.
Speaker 4:Yeah. You know, there's no doubt. I mean, of the what you're referring to is trade secrets.
Speaker 2:Yeah.
Speaker 4:Trade secret law. Yeah. Which is another area of intellectual property. And that's an awful lot in the AI world what we're talking about, mathematical applications, algorithms and the like. Can't They be patented.
Speaker 4:They can be trade secrets and they can be protected as trade secrets. And if somebody has access to those and goes to work for a competitor, it's not lawful for them to be using that information when they go to work for the competitor. But then proving that actual use Yep. You know, is is another thing altogether.
Speaker 2:How often would an issue pop up and you have multiple, let's say it's mag seven on mag seven and you're getting you're getting calls and texts from both of them racing to to to work with you guys. And then have you ever had to make a In call in the
Speaker 1:that world,
Speaker 4:we never encountered that because we always and forever
Speaker 5:Yeah.
Speaker 4:Have been adverse to Apple, Meta, Amazon, and Microsoft.
Speaker 1:Okay.
Speaker 4:We've always represented Google, Nvidia, Qualcomm, Salesforce, and some others. Sure. In our world, it seems like you come to a fork in the road Yeah. And you decide we're gonna go this way
Speaker 1:Okay.
Speaker 4:And you never come back. Because people know you will. You're the firm that will be adverse to Apple. It's like being the firm in Seattle. Yeah.
Speaker 4:They'll be adverse to Boeing.
Speaker 1:Yeah. I
Speaker 4:mean, that's kind of a job in itself. Yeah.
Speaker 2:That makes sense.
Speaker 1:What about
Speaker 4:I mean, does happen in other areas of practice Yeah. Like in private equity. I mean, we had a situation just within the last couple of days where two global private equity firms Yeah. Who were opposite each other with respect to a particular transaction. Both of us called us.
Speaker 4:Yeah. And we accepted the engagement from the one that called us first.
Speaker 1:Okay.
Speaker 4:So that does happen.
Speaker 1:Is being litigation only an advantage in being able to create this patchwork of clients that you don't have conflicts because you're you're also already doing their contracts or anything, so you can be a little bit more
Speaker 4:You know, I think as a litigation only firm, we have fewer fewer conflicts. Yeah. So for us, the world is is divided to the into companies and individuals we represent and those we don't. And sometimes a party, a company or an individual moves from one category to the other. But we don't have, we have very few sort of lasting conflicts vis a vis the business world in principle.
Speaker 4:Where deal lawyers, you know, there might be some industries that they know, well, we just can't be on this other side of this issue or represent a competitor or the like, because it's a little bit different in the deal world.
Speaker 2:Where is your firm getting leverage from AI today?
Speaker 4:We're using it we're using it a lot. Mhmm. We're using it to, you know, not only to manage documents, things that are produced in discovery, because we've been able to do that for a long time. To be if you can imagine, we tried a case in Delaware a few months ago. And we had loaded into the database all the deposition testimony, all the documents, and testimony as the trial's going down.
Speaker 4:And as somebody's on the stand, mean, can imagine, you can query this database. What is the best evidence that so and so just lied about that?
Speaker 2:Yeah. Real time.
Speaker 1:In real
Speaker 4:time. Yeah. And it'll, you know, you press a button and it'll give you a list of things Wow. In rank order.
Speaker 1:Yeah, yeah.
Speaker 2:Now, if you had to Before, back in the day, nineties, early two thousands, twenty tens, you had to
Speaker 1:be Go back to the filing cabinet.
Speaker 2:Yeah. Mean, that just you had to You relying on your memory and
Speaker 4:what you know what you know about the case. And still, that's the most important thing, I think. And mostly it's kind of a backstop. Know, it's a check, things you would have thought of anyway. But it'll also come up with things that you wouldn't have thought of.
Speaker 4:Or maybe you would have thought of if you just had more time.
Speaker 1:What are your thoughts on resolving co founder conflicts? There's been a number of really high profile cases around a group of people came together, started a company, the company grows and grows and grows, some people leave, and then there's Winkelblast Twins. That was one example.
Speaker 4:We settled that case. Yeah. And we didn't file the case. We were brought in to settle it.
Speaker 1:Sure.
Speaker 4:Snap. Yeah. There was a third guy in the garage.
Speaker 1:Yes, yes, yes.
Speaker 4:Who got kicked out. Yes. And he brought a claim.
Speaker 1:Are there any common pitfalls that you see on the incorporation documents or the safe note or People start
Speaker 4:working on these projects, sorry, all the time. Yeah. And they're not thinking about this might become super valuable someday.
Speaker 1:Of course.
Speaker 4:Maybe they're more sensitive now in the tech world and so they It's
Speaker 2:easier than ever to create you can create a c corp in a few clicks, you can
Speaker 4:see Yeah, exactly and they don't think to lay out, okay, who owns what? What's my share? What's your share? We're friends, right? Yeah, yeah.
Speaker 4:So they don't think to document it. Yeah. And it's not till later that and suddenly it's super valuable. Yeah. And they're getting all these views and followers and realize, wow, this is now remember this is one third, one third, one third, right?
Speaker 4:Yeah, No, no, no. That was not my understanding.
Speaker 1:Yeah, yeah, yeah, yeah. How much in a case like this is it worth pursuing a settlement, taking it to trial? Like what are the key decision points where you realize, okay, this is going to trial?
Speaker 4:I mean usually, so there's a stage called summary judgment
Speaker 1:Yeah.
Speaker 4:Where a party can go to the court and basically say, Look, on the undisputed evidence that's been developed in the course of discovery, I'm entitled to judgment as a matter of law. It's basically you're arguing to the court no reasonable juror could find for the other side. They could only find for me. And there has to be no disputed evidence. The judge has to find, okay, on the law, and yes, the evidence is undisputed, you win.
Speaker 4:If it gets and a lot of cases are dismissed at that level if it gets past that, then there's the prospect this case is going to go to trial. There's nothing really going to stop it because that's kind of the last court off ramp. A lot of cases are resolved in mediation. And any significant case these days, the courts will expect you to go through a mediation. That is to say, engage a neutral professional mediator, spend some time with the mediator, and see if you can resolve the case.
Speaker 1:And
Speaker 4:that happens sometimes it happens right at the beginning of the case, or even where there's a dispute and no case has been filed, you get a mediator together. Sometimes it happens on the eve of trial. But a lot of times it happens in the course of a mediation.
Speaker 1:Yeah.
Speaker 4:So, you know, if it's gone past summary judgment, if you've gone through a mediation and that hasn't been successful, then that looks like a case that may go to trial.
Speaker 1:And is that a function of total settlement? How much is at stake relative to the legal bills? Is it or is it am I more likely to settle a case if it's $1,000,000 at stake, but $500,000 in legal bills that I'm looking at versus there's a billion dollars
Speaker 4:I at would certainly think so. The legal bills are
Speaker 1:Yeah.
Speaker 4:More than what you would get out of winning the case. Sure. Sometimes there's other things, you know, at stake.
Speaker 1:Sure.
Speaker 4:Whether ego Reputation. Or whatever or reputation. But it's usually a calculus. I think most clients, it's pretty much an economic calculus. What, you know, what are my chances of prevailing at trial?
Speaker 4:What do I get if I what does prevailing mean? What will I get if I prevail? And obviously, what's the cost to get me there?
Speaker 1:Yeah.
Speaker 4:Including primarily attorney's fees.
Speaker 1:Do you I'm sorry.
Speaker 2:Do you think that AI will speed up cases? Or is there some element to litigation that just because maybe one side realizes the longer this goes on, the the the better for me. I'm just gonna drag it out. Like, will it actually even even though a lawyer could now do two weeks of work in an hour maybe if they're properly using some of these AI tools, they might it might still just take the full, you know, however many, two weeks in order to
Speaker 1:Because the other side's gonna be using AI, right?
Speaker 4:Yeah, look. I mean, cases settle when parties realize the strengths and weaknesses of their case Mhmm. And the strengths and weaknesses of the other party's case. And they assess that. Know, cards in the discovery process, everybody's cards are basically put on the table.
Speaker 4:Yeah. And you have a basis then to make a judgment am I going to win? What does winning mean? What am I likely to get in damages? I think A.
Speaker 4:I. Will accelerate that process. There'll be more disclosure and more ability to handicap the potential outcome sooner. So I do think there's a potential for resolving cases sooner. However, I think AI is going to result in much more litigation.
Speaker 1:More cases. Yeah.
Speaker 4:More cases. Why? There are already early stage companies out there who are putting cases together. They have put into databases all records about permits, licenses, advertising, what parties claim is in their product, what they say their product can do, all this information, and information about what is actually in the real world, what's the experience there. They'll put that together and they will serve up to lawyers.
Speaker 4:You can subscribe to these services. They'll come to you to say, I've got these great class action lawsuits for you. Yeah. And so they're finding cases. So I think there will be more cases, but I think there's a potential they'll be resolved sooner.
Speaker 1:Do you think the legal profession is a mentorship business? Do you like when you bring on do do you see, you know, young lawyers needing to find a mentor to establish a full career? Is that how you is that how you think about it or?
Speaker 4:I really think the best way to learn is working with more experienced people. Yeah. That was certainly true Yeah. In my case, whether you call them mentors Sure. Just senior people in the firm who you work with
Speaker 1:Yeah.
Speaker 4:Go to court with and see how they examine witnesses and the like. Yeah. So I do think that's really important in terms of learning what it means to practice Yeah. Law.
Speaker 1:What advice are you giving to young lawyers today that want to be where you are in thirty years or so?
Speaker 4:Well, I said earlier, tell people, you know, this is practicing law, litigating high value cases at the highest level is there's no shortcuts. So you have to be prepared to sacrifice
Speaker 1:Mhmm.
Speaker 4:And work super hard. It's an hour's commitment. There really are no shortcuts.
Speaker 1:Is it thrilling though? Do you love it?
Speaker 4:I do love it. Yeah. I do love it.
Speaker 2:Is the case more thrilling or is it who you're working on behalf of? Is it the partnership between you and the client? Because
Speaker 4:the partnership with the client can be very, very satisfying. Okay. Because the This is a
Speaker 2:team sport, right?
Speaker 4:Exactly. It's definitely a team sport. The team within the firm, the team with the client. What I love most about it is we're constantly learning. We have to be able to cross examine experts, whether it's on biotech, steel manufacture, AI, I mean, you name it.
Speaker 4:We have to get to the point where there's an expert on the stand, somebody who maybe has a Ph. D. In something, and we're going to cross examine them. We have to learn. That's what I love about my job.
Speaker 2:That's I'm learning something new. Yeah, an expert can make something you sound really silly. They're like, What do you mean by that? Like, I don't understand what you're even asking. And then they could just be, you
Speaker 4:know You sound like an evasive
Speaker 2:expert Yeah, exactly.
Speaker 1:That's not
Speaker 4:gonna be great for your credibility.
Speaker 2:There you go.
Speaker 1:What about how the media characterizes law? Is there a book or movie that stands out to you as kind of telling the story the correct way that resonates with you that's something that you don't feel like it's a mischaracterization of how you work?
Speaker 4:You know, there are a number of good books about trial lawyers. And perhaps my favorite was written by a trial lawyer who recently passed away, Jerry Spence. I don't know if that's a name you know. Trial lawyer from Wyoming. He did the Karen Silkwood case, that uranium case.
Speaker 4:She claimed that she was injured by exposure to radiation. Yeah. She represented Amilda Marcos in a trial in New York City. I mean, he he but he was always kind of this Wyoming buckskin clad country lawyer.
Speaker 1:A character.
Speaker 4:And he yeah. And he wrote a book called Gunning for Justice. Yeah. That was about his own life.
Speaker 1:Okay.
Speaker 4:And it was a very very moving moving book. That's one that I really like. Enjoy.
Speaker 1:I will have to pick it up. Well, thank you so much for coming by. Thank you. And doing this interview.
Speaker 4:Thank you, John. John. Enjoyed it very much.
Speaker 1:You so Thank you.
Speaker 4:You very much. I'm back on the Yeah,
Speaker 1:you're welcome anytime.
Speaker 2:What a legend.
Speaker 4:That was a lot of fun.
Speaker 1:We have our next guest in the restream waiting room. Let's first tell you about graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. You can get started for free. And our next guest is, Martin Casado from Andreessen Horowitz.
Speaker 1:We have a bunch of breaking news. We're excited to talk to you. How are you doing?
Speaker 2:Welcome, Martin.
Speaker 1:Good to see you. Can we adjust the levels, make sure that we're hearing him okay? How was your day? Just tell us how you're doing.
Speaker 7:I'm doing very well. Thank you.
Speaker 1:It's Great.
Speaker 7:Actually pretty chill morning because I had a couple meetings canceled, which is kind of the best gift you can give me.
Speaker 1:There we go. Paradise. Canceled meetings, hop on TBPN. What more could you want Perfect. In the Silicon Valley life?
Speaker 1:Exactly.
Speaker 2:How's how's your how's your q four been? Pretty mellow?
Speaker 7:My company's most of my companies are still in q three because we shift by a month, but pretty good. Thank you.
Speaker 2:There you go.
Speaker 1:Wait. Why why do you shift by a month? Is that is that standard now? Is this something It
Speaker 7:it is. Well, it is very standard. I mean, listen. So I I did, you know, enterprise sales for my company for ten years, and I don't remember a Christmas or a New Year's where I could be home because we were, like, deep enterprise sales. So 50% of the year came in in the last month.
Speaker 7:And so everybody realized that, you know, if you're pushing to the end of the quarter, it's probably better to do it when people are still working. And so most will use the January. And so that's the majority of the companies I work with Which wins. By a month. Yeah.
Speaker 2:When how often are you investing in a company and and they haven't made the shift yet? Are you going that early?
Speaker 7:Honestly, if they don't, I I recommend them to
Speaker 8:Yeah.
Speaker 2:I imagine that's a first You like you like the holidays at the end of the year? You like spending time with your family?
Speaker 7:I mean, I I would say 2008 to 2012 of my life, maybe 2016 was me on the phone, like, in a beach somewhere trying to close a deal. So
Speaker 1:Then you paid off. Here you are. We're having the infrastructure practice. I wanna get to robotics in China. But first, I'd love just an update on how you're thinking about infrastructure at Andreessen.
Speaker 1:You have 1,250,000,000.00 under management for that fund. And infrastructure, I mean, we're seeing deals for energy. Sam Altman's doing stuff with SK Hynix and HBM. There's, you you know, the the Neo Clouds. There's the hyperscalers.
Speaker 1:There's so much in infrastructure. Then there's also just, like, dev tools, which I think could maybe be in there. So how do you define it? What's interesting? Where are the key themes these days?
Speaker 7:Yeah. So we do primarily software infrastructure and things that directly relate to software infrastructure. Infrastructure. So everything from, like, let's say chips to AI models to, to your point, dev tools to the traditional compute network and storage. Mhmm.
Speaker 7:A very interesting thing about this AI wave is, like, it's very hard to distinguish between, like, a, like, a deep infrastructure model company and, like, say, an application company. And so we're having kind of a renaissance in the field where everything has to be redone.
Speaker 1:Like, you
Speaker 7:have to redo networking. You have to redo compute. You have to, like, build new dev tools. And so, you know, we're just trying to keep up with all of this change that is coming from from AI.
Speaker 1:How are you thinking about competition from the hyperscalers when you're looking at a start up? We talked to a bunch of founders who Yeah. They're going up against AWS, and Andy Jassy's not asleep at the wheel. But at the same time, there's this meme of, like, you know, VC would always tell you, what if Google does this? And then we have, you know, Cloudflare and, like, you know, GitLab.
Speaker 1:And there's, a million companies that we could name off that are, you know, Decacorns, public companies that successfully went up against the the, you know, the the public clouds and won or at least saw, you know, massive businesses built. So is there is it all about the founder? Is it about the particular market or the technology or lock in or being program record or being a, you know, some sort of system of record? Like, how are you thinking about it?
Speaker 7:So listen. I've been an infrastructure investor for ten years.
Speaker 1:Yeah.
Speaker 7:And listen. In that entire time, the public cloud has been incredibly dominant. Right? And so I would say after Reinvent, which is the AWS show, I have to, like, move into therapy therapy mode. Mode.
Speaker 7:But I've got actually I'm actually on the other side of this. I'm never the one that actually worries about the public clouds. I'm always telling, like, the founders. And I I have this line. My my line is is, can you name one company that AWS has put out of business?
Speaker 7:One. Just one. Point. Yep. Like, they literally have copied everything.
Speaker 7:They've hosted everything. And like and so the reality is is that if you have an entire if if the market is large enough and you have an entire company focused on it, you're gonna win. And that's just the reality. And AI in particular is a new behavior, which, you know, you know, companies like, incumbent companies are terrible at new behavior. So, like, this is definitely an advantage to start ups.
Speaker 7:Like, it's like a new buyer. It's a new use case. It's a new way of thinking about things. So they don't have the incumbent institutional momentum. And so I think that, like, you know, we're free of of a lot of the trappings of the cloud, and I think the future is very bright for startups.
Speaker 7:So I I I don't spend a lot of time thinking about the incumbents. That said, I have to say one thing is, listen, Anthropic and OpenAI are are startups really in the classic sense, and they are incredibly dominant. And so I would say I'll put them in a different class. There's a there is a class of these new types of incumbents. Think like Stripe Yep.
Speaker 7:Figma where the founder is still there. They're still hungry. Yep. They're executing very well. I think those are much more dangerous than, you know Yeah.
Speaker 7:Google or Microsoft.
Speaker 1:Yeah. I was talking to a founder who is going up against an AWS point solution that was rolled into stuff. And I was like, you you are going up against Angie Jassy, but you're really going up against the particular product manager who's on that particular product. And that product manager might not be taking calls on a beach in on December 25. You know?
Speaker 1:Like Yes. They they might be taking a vacation. And so if you're gonna outwork them, it's possible you could beat them.
Speaker 7:Totally. And and, like, this is a company that, you know, is famous for bragging about two pizza box teams. Right? Yeah. So okay.
Speaker 7:Yeah. So fine. You've got, you know, the 12 people on this product is dying on the vine. Like, if you can't beat that, you kinda deserve to lose.
Speaker 1:Yeah. Yeah. Yeah. That's a great point.
Speaker 2:Well said.
Speaker 1:Well, I I'd love to go into robotics in China. You recently published a Wall Street Journal op ed, which I love. I read the journal every day.
Speaker 2:Before we dive in there, one question around Yeah. When you're evaluating how you think about how you think about revenue ramps, specifically, you know, there's always this question if a company's ramping revenue just just at at an ungodly rate. There's a question of, like, how how durable that revenue is. Is it is is it gonna be possible for another company to come into the category and sort of pull off the same type of pull off the same type of growth. What are you evaluating for these software infrastructure companies on whether they have actually done the hard work to figure out, develop something that's unique and proprietary or they're just capital or they're just like a we did talk about it as like a a barnacle on the side of a whale like opening a seller.
Speaker 1:Yeah. We're into the barnacle economy. Yeah. We love the barnacle economy where you just naturally grow at the growth rate of anthropic and you're like Yeah. It's a miracle.
Speaker 7:Yeah. Yeah. I mean, listen. So there's always this concern of easy come easy go, which is kind of like what you're asking about. Like, you know, you got this revenue so quickly.
Speaker 7:How hard could it be? But, you know, listen. We're three years into this, and we've got a lot of data points that this stuff is actually pretty durable. Right? I mean, mid journey bootstrapped to actual scale, and it still is very much a leader in image.
Speaker 7:Mhmm. You know, OpenAI roared into dominance in text, and it's still the leader. Anthropic roared into this. I mean, Cursor roared into this. And I think that these revenue ramps are much more of an indication of the size and the growth of the market, which I mean, these things have just been so large and growing so fast.
Speaker 7:And, of course, like, the leader that becomes the brand monopoly will follow brand effects, and then people will know the name, and then they'll go ahead and adopt it. So I think that, you know, like, there is no indication just because the revenue ramp was quick that it's not durable. That said, I don't know of any endemic defensibility in AI. I think companies have to figure out traditional moats, and there's a lot of traditional moats we know about. Right?
Speaker 7:Integration moats, two sided marketplace, brand moats. Like, whatever the moat is, they've got to get to that. So when we evaluate the company just because it grew quickly, we're not like, oh, easy come, easy go. Right? I mean, that's kind of, like, intellectually lazy.
Speaker 7:On the other hand, we do look for, like, what actually is the moat. Right? If you're basically just, you know reselling TPM, you know, tokens per minute from Anthropic, that's probably not as durable as if you've got an a workflow and a bunch of users that use it and you know, they save configuration in this and you've got good retention numbers, etcetera. So we we do kind of full fledged investment like we always do, but I don't think it's correct to just say just because the growth is high, it must not be durable.
Speaker 2:How quickly can a brand moat emerge in in infrastructure?
Speaker 7:Yeah. I mean, it's a good question. Mean, the last time I remember brand modes like this was the Internet. I think when markets grow incredibly quickly, like, education is always kind of out of date, and so you default to brand. Like, remember Netscape was largely a consumer phenomenon, and very quickly, everybody was talking about Netscape very early on, and we're seeing a very similar thing.
Speaker 7:So I think it's been probably twenty five years since we've seen brand effects dominate adoption, especially for highly technical projects. I think the last time was probably the Internet and before that, like, maybe the PC. Like, Windows '95, again, was very much kind of a brand name. And so I think it's more, again, an indication the market's very large. It's growing very fast.
Speaker 7:There's so much confusion in the market so that a few leaders end up becoming brand monopolies, and then the adoption is literally because people can't keep up. So they just kind of adopt the one that they know about.
Speaker 1:Yeah. There's a speaking of brand, there's actually a comment in the chat. A 16 z blows my mind. How can they be a venture fund and a brand at the same time? And I feel like there's like like, Andreessen really is focused on brand in many ways, both the Andreessen brand, but also partnering with brands on the consumer side or or, you know, Internet consumer side.
Speaker 1:But do you have do you have thoughts or advice for infrastructure founders on brand? Is there is there is there an equivalent of, make sure you have your .com or make sure that you have, you know, specific brand package? Like, you spend any time thinking on that? Or is is that at all relevant, or is it just something that, you know, kinda check the box, make sure it's converting customers, think about it in more quantitative terms?
Speaker 7:Yeah. No. So quite frankly, this is a pretty new phenomenon. Like, I am part of the nerdiest part of Andre's squads. We don't really think about brands.
Speaker 7:It's like, no. That's not the conversation we have. Normally, it's either talking about, like, the mechanics of, you know, inbound bottoms up growth or the mechanics of enterprise sales or something like that. That said, we've all had to all of us, the founders and the investors had to become students of this because, like, you'll have model companies that'll be consumer companies, and those are very much brand led. You'll have I mean, you know, I mentioned Cursor before.
Speaker 7:Like, you know, Cursor is a dev tools company, but it's got so many users. Like, brand effects are at play. Brand is really important. And and X now, because this stuff is proliferating so quickly, has become a primary distribution channel. Like, X is its own way of propagating information that's very, very different than going to, like, traditional press or doing, like, a press release or writing content marketing or whatever.
Speaker 7:Like, we're in a very different world. And so I would say, you know, historically, I personally while the while the firm has, I personally have not been very focused on brand, like the opposite. But, you know, I've I've had to learn a lot more about it.
Speaker 1:It used to just do make the docs dark mode.
Speaker 2:Do you think some
Speaker 3:of Yeah. The
Speaker 1:Yeah. Yeah. Yeah. We are emerging in
Speaker 7:Sell different sell the thing and be technically correct. Exactly. That was kind of my yeah. Exactly.
Speaker 2:Do you think public SaaS is generally oversold? Are people too bearish? Or is the is the is the the the conversation we keep coming back to, Brett Taylor was on the show talking about how it's easier to change the the your tech stack than your business model. And he was referencing, you know, the dynamic between, you know, seed based.
Speaker 1:But that's but that's kind of not as relevant in in public company infrastructure companies that might be disrupted
Speaker 2:by record.
Speaker 1:Because because of public I I I imagine that most of the infrastructure competitors, the incumbents, are already on consumption based models. And so you're not seeing a dramatic shift in the business model of the companies you back. It's more of a technology shift, or am I mischaracterizing that?
Speaker 7:Okay. So I I definitely think we're seeing a pricing shift from seed based to usage based. And and listen. We saw that. Listen.
Speaker 7:When I was thinking of my company, we saw the shift from perpetual to to SaaS. To recurring. Right? To SaaS recurring. Right?
Speaker 7:And so we're seeing that type of shift, and that's being accelerated by AI. It was it was started by the cloud, but it's being accelerated by AI because, you know, the tokens are so expensive. I don't think that alone is depositing anybody. Right? I think that the the SaaS companies are very good at adopting that and using that.
Speaker 7:I really think a lot of the story of AI is actually kind of new capabilities and new use cases, and, like, that's kind of, like, the untold story. I mean, these things now speak English. Right? They develop an emotional connection. They can create something from nothing.
Speaker 7:Like, that's cool. That's net new behavior. That's net new budget. And you can see this in this dramatic growth. Now, of course, budget has to shift to cover that.
Speaker 7:Right? And so I think we are seeing a slowing down of traditional SaaS spend as you would expect when you have something super cool and new and whatever, but I don't think that this spells the demise of of the traditional sector. I mean, it's just it's actually not even good at things like systems of record yet. Now over time, that will change, and maybe it'll change the consumption layer. And once you have the consumption layer, you can change the back end.
Speaker 7:But I really think the story we should all be talking about is, like, what are these net new use cases? Like, what is it enabling? Where does that budget come from? Yeah. As opposed to, like, who is this necessarily gonna kill?
Speaker 7:Because the zero sum thinking, I think, is the biggest mistake we all make in this AI wave.
Speaker 2:Totally. Alright. Well, let's switch gears to robotics.
Speaker 1:Yes. There is a what's the major robotics company out of China? Unitree. The there there's a Unitree for sale on walmart.com for, like, $20,000. I'm hovering over the buy button.
Speaker 1:How un American am I if I pull the trigger? Take me through the landscape. Yeah. Buy I think we're gonna I think we're maybe gonna try and hack it and do something weird. That's right.
Speaker 1:But, yeah. Yeah. Take me through the current understanding. In general, it feels like maybe I'm wildly wrong, but it feels like tension between China and America is calming down almost. I don't know.
Speaker 1:Just maybe that's just the news cycle and people have shifted to other geopolitical topics. But, I mean, polymarket has the the the the the chance that China invades Taiwan by 2026 down at 14% from 25%, and and and we're doing more trade deals. There's crazy news today, but walk me through how you're understanding the the the geopolitical landscape.
Speaker 7:Listen. I'm not an expert on on geopolitics. I will say today, China put expert controls on on rare earth metals that are, you know, useful in, like, things like lithography. So that's clearly, like, I would say not a detente. I mean, that clearly is kind of a more of an aggressive posture.
Speaker 7:Probably this is because Trump is meeting with Xi Jinping. Probably this is just kind of for negotiation. I don't know. Right? But I I would you know, again, I am not an expert on these things from my perspective, which is through the lens of technology.
Speaker 7:Like, there is not a detente. I think that things tend to be escalating. Mhmm. Now that said, you know, the the technical collaboration between China and The US is the strongest it's ever been. I mean, you know, half the founders I work with are Chinese, half the teams I work with, half the papers I read, half the models I use, half the models the companies I work with use.
Speaker 7:I mean, like, I think from a technical academic standpoint, it's the strongest I've ever seen in in the industry. And so in that way, there's very much a positive. But politically, there's clearly some jockeying, and I think we're trying to all understand what that means. And and and I'll just tell you my my very quick view is, like, I don't think anybody wants a generational struggle with China. Right?
Speaker 7:I mean, like, the, like, the, you know, the hope is is that both of us collaborate together and take over the solar system. Right? These are two just phenomenally great countries with a tremendous amount of talent, but there is some level of Pollyanna in that belief. And so then the question is is to what extent do we want to depend on China? It's not it's not about being aggressive.
Speaker 7:It's not about being proactive. It's like, know, do we want to depend on them for for critical infrastructure? And I I would say my position is the answer is no. We don't wanna depend on them, in which case it's important to understand what they're capable of, what we're capable of, and what we can do to develop local capabilities.
Speaker 1:Do you read anything into the the fact that Xiaomi was able to be a phone company that launched a car and Apple was maybe rumored to be working on a car and never got it out. Is is the is that just a market structure thing? I'm interested in understanding, like, where is China behind? Where are they ahead? It feels like Tesla was way ahead in electric cars, and China's catching up there.
Speaker 1:But now Tesla's playing catch up in humanoid robots, and I I I'm I'm interested in the landscape of, like, what each country does best.
Speaker 7:Yeah. Yeah. Okay. So the I mean, listen. This is gonna be very polarizing topics.
Speaker 7:I just wanna say upfront that I'll send some opinions. These are not rooted in fact. There is no agenda here. Just you know? As far as your first question on on the structure of companies like Xiaomi and the car and Apple, You know, Asian companies test time to do more.
Speaker 7:Right? I mean, think about the Korean Che Balls. There was, like, for a long time, there was five companies that did everything. Like, everything.
Speaker 1:They did everything from the
Speaker 7:cone to the car. So I I don't think that that is, like, a China versus US thing. I I think that's something quite a bit different. You know, that said, we've seen China be, like, you know, very, very effective in a number of areas in recent memory. Right?
Speaker 7:I mean, five g, China basically won, which is, you know, critical infrastructure communications. Right? I mean, for solar, they've been dramatically good. And then I wrote this post on robotics where they're very, very good. And so it's clearly a country with a ton of capability.
Speaker 7:On the other hand, like, listen, like, The United States continues to, like, do two things that I think are are are pretty distinct from China. One, they're very good at complex software systems. Right? Like like, you know, not building a model, but building kind of like the opening eyes and the anthropics and, you know, and everything around them. Very, good at complex software systems.
Speaker 7:And two, this is gonna sound funny, but The US is actually really good at building stuff people like. And I I That's good. No. But I I I think that I think there's I think there's a specific reason for that, which is we're more like the rest of the world than China is. Like, China, like, caters to a local market, and the local market is just different behaviors.
Speaker 7:A different buying behaviors, different political behaviors, different economic behaviors. And so, like, the stuff that they produce is just weirder. And so in some way, I would think, like like, you know, there's there's there's two areas where they're just not as strong. It's very complex software systems, which we historically have just not seen come out, especially for b to b, but also, like, software that the rest of us can, like, use and adopt outside of, like, these viral things like
Speaker 1:I'm about to say. Yeah. They Laboo boo. Right?
Speaker 7:Yeah. This consumer thing. But I'm not a consumer guy, man. I'm a Yeah. I'm a like
Speaker 1:There's these cars that have, like, LED front dashboards and karaoke machines inside, and they float. And they're all very cool, but I don't know if the American consumer actually wants that necessarily.
Speaker 7:Well, I think I think you could reduce it to, like, you know, listen. People are people and whatever, but, like, enterprise buyers are very different in China than they are in The United States. And, like, can you name one large Chinese enterprise software company? No. Software.
Speaker 7:Yeah. It's, I mean, it's impossible. No. I mean, we we we
Speaker 2:Does ByteDance get into enterprise in China?
Speaker 1:Alibaba, Quen, like, count? Or, like, does Deepsea count? I I know Deepsea is getting inference a lot.
Speaker 7:I mean, I'm like, well, it's like Databricks, Snowflake, Salesforce, Microsoft.
Speaker 1:Yeah. Yeah. Yeah. We have more than
Speaker 7:US enterprise companies. And then in China, you're like, well, you're kinda trying to, like, well, it's a consumer company,
Speaker 1:but maybe they do enterprise.
Speaker 7:Like, there's kind of these weird telco companies that people will mention.
Speaker 1:Sure. Sure.
Speaker 7:It just you know, listen. I I, you know, I built a team. You know, I ran a team in Beijing. I ran a team in Shanghai when I was working at VMware after they acquired my company, and we sold software in China. It's just different.
Speaker 7:It's totally different. Like, the consumption patterns are different. How you sell it's different. What they expect from the software is different. And and and the market is large enough and localized enough that any local company is gonna focus on that.
Speaker 7:And if they focus on that, they're just, like, through Darwinistic forces of acceptance are not gonna build something the rest of the world really understands. And so I do think this is an area that The United States has a tremendous advantage is like Do
Speaker 2:you think
Speaker 7:You know? Yeah.
Speaker 2:Based on your experience selling software, enterprise software in China, do you think in in our lifetimes, there will we will go back to American companies trying to sell enterprise software into China? Or is that Yeah. Is that ship sail? Because I I I briefly lived in China. I studied abroad there.
Speaker 2:I was at a I I worked out of the China Accelerator office in Shanghai. And I there was a lot of international companies that were trying to sell into China. This was 2016 era. And there was a sense that the Chinese market sort of wanted to learn about what was being sold, but they didn't actually want to adopt it. And it was more like, how do we learn about this so that we can just build this ourselves and utilize, you know, Yeah.
Speaker 2:Our networks locally to just kind of out out compete here?
Speaker 7:Yeah. So listen. I I think behavior follows business. I think that there are some systems that are pretty straightforward to reverse engineer like a like a actual hardware system where you can pull out the embedded software and you can look at the chip like what like, you know, like, let's say network routers, like, you know, classically. Yeah.
Speaker 7:You know, Wasco Huawei copied Cisco routers early on. I think for very complex software, it's just, you know, it's like all the operational, like, know how is just a very tough thing to copy. You can look at the code all you want, but what you wanna know is what it does when it's actually running, and that's just not something. Like, the state space is too large. And so no.
Speaker 7:I think behavior follows business. I think there's a lot of business between the two countries. I think they're both commercial countries. They're full of commercial entities. I do think we're gonna go back to, like, having a market between the two.
Speaker 7:But I I do think, like, the landscape is shifting. Like, I do think, like, listen. Like, right now, you know, we buy, you know, the majority of, you know, our kind of hardware parts for robotics from China. And I would, you know, assume, you know, we sold a lot of software in in China that a lot of the business software, like, they're adopting from us. And and, you know, that you know, what that looks like may shift over time, but I I don't think it's gonna go to zero.
Speaker 1:You think humanoid robots are gonna start as an enterprise product or consumer product? Are are do and how how confident are you that it will start where you think it will start?
Speaker 7:I mean, listen. I'm not an expert. So so can I maybe can I just talk about the piece that I wrote very quickly?
Speaker 1:Yeah. Please.
Speaker 7:Put this in context.
Speaker 1:Because I
Speaker 7:wanna show, like, the area where I am expert versus not expert. Like Break it down.
Speaker 2:You're a VC. You're an expert in everything. Give yourself some
Speaker 7:credit. I know politics. Yeah. I know human noise. I know Yeah.
Speaker 7:Super. No. It's not. So so listen. The area I'm expert is is is infrastructure software.
Speaker 7:Right? And that's what my PhD is in. Yep. That's what my company was in. That's what I you know?
Speaker 7:And so in order to, you know, know what is impacting enterprise software and software infrastructure, we do these market studies. Right? So we'll study, like, what's going on with energy. We'll study what's going on with microchips. We'll study what's going on with robotics.
Speaker 7:Like, these are and we did this study on robotics, and it was in service to our software investing, which we do. Even though, like, a lot of, you know, the groups in Andreessen Hornets do hardware investing. Right? Like, you've I've said on the board of hardware companies, like, we do it, but, like, the purpose of this study was software investing. And we we got the result of this and, oh, damn.
Speaker 7:Like, China's kicking ass. We're like, wow. They, like, got the supply chain locked up. They're doing incredibly sophisticated stuff. I think something like 50% of all deployments for the last three years were done in China for the globally.
Speaker 7:And so the purpose of the piece that we wrote was just to say, listen. You know, we do these studies normally. We do tons of studies like this, but, like, this was so dramatic. Like, maybe we should kinda make it a little bit more apparent to everybody, like, you know, know, how China is doing. And so I don't listen.
Speaker 7:I am not an expert on any given robotics market. Like, if it's an enterprise industrial thing, I'll have more of a sense to it, where, like, from a humanoid standpoint, I think there's huge expert on on that. But I will say that, like, when it comes to China and The United States, I mean, they're a very, very real contender when it comes to, you know, the full supply chain all the way up to the hardware. It's the software where I think, you know, things start to differentiate.
Speaker 1:Like, how do you characterize the opportunity for America to catch up? Like, should we be more bullish on the hyperscalers, the mature companies, the Teslas of the world stepping up and taking it seriously or completely new startups from scratch building solutions and then kind of integrating, creating their own keiretsu, if you will.
Speaker 7:So here so here
Speaker 1:Shagun.
Speaker 7:Let's let's let's talk about the areas where I think that, like, The US has an advantage. Right? I mean, like I mentioned, like, complex software, the the The United States does a great job of. Yeah. When it comes to, like, building products that people want, I think The United States does a great job of.
Speaker 7:And so I think that right now, when it comes to, you know, Chinese hardware, I think we have to really look at ourselves and say, you know, do we want to, like, start putting, like, import restrictions and tariffs on those? Not not to penalize China, but to kind of incur local capability building for these things. And I think that would be an important thing for us to consider as a nation doing. And there's another very interesting area, which is, you know, for a lot of AI, you want big GPUs. Right?
Speaker 7:And so you can do a lot of robotics with smaller microcontrollers, but you kinda want the big GPUs for the heavy processing, like, certainly for AV. And it's pretty well known that China doesn't do anything below nine nanometer very well. You know? Like, seven and five, they can do it, but the yields are pretty low. And, of course, they'll be subsidized by China, but they're well behind.
Speaker 7:So I think at some level, like, we should continue our export restrictions on SME, like, you know, ASML lithography machines. Like, I think we should do that just because it does slow them down. I think we should, you know, do import controls, you know, and tariffs so that, like, we can do local capability building. But, again, I like, I have no interest in a generational struggle with China. I just think that we need to understand where we're weak, and then we need to, you know, put in the controls necessary so that The United States can catch up.
Speaker 7:And these are the areas I would say. So I would say it's not it's not, you know, the big chips. I think we're pretty good about that. It's not the software. Think we're pretty good about that.
Speaker 7:But I think actually a lot of the hardware supply chain. I do think that we should put our finger on the scale.
Speaker 2:Yeah. To me, the interesting thing seeing unitary robots selling on walmart.com when everyone in the tech community realized probably starting about couple years ago that letting DJI flood the American market with cheap drones
Speaker 1:Just killed GoPro.
Speaker 2:Yeah. Killed killed our killed our internal you know, they they they were willing to sell products at a loss Yeah. In order to Subsidize. Yeah. You know, subsidize these products in order to to make it impossible for American companies to compete.
Speaker 2:And now we have, you know, millions of drones here in America that are flying around that we don't own and they're gonna continue that. And allowing them to do the same thing with humanoids feels like an even bigger national security risk to me and would again just set us back in an entirely new Yeah. It's
Speaker 1:crickets. It's crickets. I haven't heard
Speaker 7:of the implications yeah.
Speaker 2:The implications Yeah. Imagine it.
Speaker 7:Enormous. Right? It's like it's like health care. It's like economics. It's like industrial capacity.
Speaker 7:It's I mean, it's like basically as broad based software if you take the generalized form of robotics. And so it's incredibly critical that
Speaker 2:we on top
Speaker 7:of this.
Speaker 2:So we have a geo geopolitical rival, and we're gonna allow them to put a human sized robot that can presumably do human things like Wait.
Speaker 7:Movie about this once.
Speaker 2:Yeah. Yeah. They could do laundry. If they could do laundry, they can do a lot of other things that maybe we don't want them, you know. So so anyways, I I think this is something that I hope I hope it gets more attention before it's too light because they're already selling again on walmart.com.
Speaker 7:I I will say one last thing too is like we kind of sometimes hope that, oh, like, listen. This is an issue of scale and like, you know, we wanna work with our partners and our allies. And so like, what about EU? Can they help out here? But like, if you actually look at some of their dominant robotics companies like Cuccos, I think it's a 100 year old company.
Speaker 7:Like, that's now owned by China as well. And so, I mean, even on the global footprint of industrial robots, China is incredibly dominant. And so I think now is the time for us to map it out and figure out what we do to enable local capability building. And, again, the point is not to penalize anybody or to have a lifelong struggle. The point is to not depend on them and and to
Speaker 2:build What's happening in in India on the robotics side? Obviously, Apple is trying to shift a lot of iPhone production to India. Is that is that an area that you're
Speaker 7:I don't I don't have any expertise on that. No. Mostly in India.
Speaker 1:What about open source LLMs? Have you changed your thinking at all? I know that you're pro open source generally. We had the deep seek moment. Now OpenAI has GPTOSS.
Speaker 1:MetaLama is sort of, you know, declining in favor, but there might be a new generation of models from Meta. They're certainly staffing up for it. And so do you think that that market has resolved? Is it calcified in any ways? Is it heating up?
Speaker 1:Is it something that people should be paying attention to?
Speaker 7:Yeah. So I, you know, I generally think AI is following open source as we've historically seen it, which is the closed source models get 80% of the market and open source mops up the remaining, you know, 20%. And, like, that's happening now. Yeah. I think open source is incredibly important to the broader dynamics of markets, you know, like kind of anti monopoly stuff.
Speaker 7:It's good for the startups. It's good for pricing. It's good for academia. It's good for research. So I maintain that position.
Speaker 7:I think the Chinese models are phenomenal. I think they're leaders. I think we should keep to having the academic partnerships. I feel very strong about that. I think any sort of import or export restrictions on software is stupid.
Speaker 7:Like, it just doesn't really work to begin with. And so my view is software kind of, you know, let it all play out. The US is dramatically ahead, I would say, end to end when it comes to capabilities and capacities for OSS. The Chinese models are fantastic. You know?
Speaker 7:We use them if kind of will keep us honest, I think that's great. Where I think that we should be more serious is import and export restrictions on hardware. I mean, we've done them as them in the past. We've done them incredibly effectively. I mean, you know, especially when it comes to critical infrastructure.
Speaker 7:And I don't say this from an economic or even from a job standpoint. I literally say it from national security standpoint.
Speaker 4:Like, you
Speaker 7:know, do we want to run Chinese hardware infrastructure for our our Internet backbone? Probably not. And if you know what has happened in the last few years with the telcos in China, you can see why this is the case. And I do think of having, like, an aggressive posture when it comes to, like, what we run nationally and what our capabilities are.
Speaker 1:So are you not worried about the national security risks of running an open source model from a near peer competitor. There's this idea of the, the Manchurian candidate hiding inside of, the weights of an LLM. It all seems fine when you benchmark it, but once it realizes that it's inside of the, the NSA or something, it phones home. Red Star Linux from North Korea does that. It phones home.
Speaker 1:And there are and and, you know, there's there's rumors that TikTok and and Yeah. Might be doing or many people
Speaker 2:our our physical infrastructure, whether it's in manufacturing, like robotics in a manufacturing context or or even a humanoid in in somebody's home Yeah. Having that not be something that is a
Speaker 1:No. I I I get that the No. Hard hard hardware. Like, you're asking specific questions about software. Like like like, if if hardware is, like, a 10 out of 10 risk, where is running an open source model from a near peer competitor that might wanna sneak something in?
Speaker 1:I don't know if technically they can, but it but is it is it a one? Is it two? A five? How would you think
Speaker 2:about it?
Speaker 7:Yeah. Super legit question. So first of I'd say, like, I'm much more sympathetic to, like, import restrictions and export restrictions. I think it's it's just a net good for the rest of the world to use US technology and to have that footprint. Right?
Speaker 7:And so, like, when you're talking about export restrictions, I think that, like, when it comes to software, like, we should never have any. When it comes to import restrictions, I think that you should differentiate between what we use for, like, the government and critical infrastructure versus, like, you have access to academia. I think, for example, if we if we did import restrictions of, like, the latest greatest models, we would be handicapping our researches in a very significant way. And I I don't think that that would justify whatever gains we might have given the fact that, like, half of what we get is from China.
Speaker 1:Yeah. Like There's also, like, a free speech. Like, math is should be legal argument here where, yeah, like, the government and critical systems and maybe our Fortune 500 companies should be very careful with what they run if they're running a Chinese open source model. But if you're just as a libertarian, you know, you could think like, yeah. If you wanna go and run this on your local hardware in the cabin in the woods, like, that's pretty American in my opinion.
Speaker 7:Yeah. Yeah. Yeah. I'm I'm I'm very, very much about never do kind of export restrictions and import restrictions when it comes to software. Sure.
Speaker 7:Sure. It's strictly listen, I used to work for the the intelligence community back in 2001 to 02/2003, and, like, this is kind of the height of, like, concerns around Huawei. And so maybe I'm just a little bit
Speaker 1:more Sure.
Speaker 7:Sympathetic to arguments of not having, you know, these components in our critical infrastructure.
Speaker 2:That was the height of the concern around Huawei, and it took us how many years to Yeah. Actually act on it. That makes me concerned about was one of the many one of the many peaks of of That makes me concerned about it. By by 2045, we'll get around banning UniTree in The United States. After they after they get a robot in every
Speaker 1:Every home, we'll finally be like, you have to pay us 10% tax on this. That'll be the resolution. Long As as we're making money from it, maybe we'll be fine with this, the result. Anyway, thank you so much for coming on the show. This is fantastic.
Speaker 2:Appreciate you.
Speaker 1:Always a good time.
Speaker 2:Always. Good to see you, Mark.
Speaker 1:We'll talk to you soon. Have a great rest of your day. And let me tell you about fall, generative media platform for developers. The world's best generative image, video, and audio models all in one place, developing fine tune models with serverless GPUs and on demand
Speaker 2:Fact. Infrastructure. A 16 z
Speaker 1:Oh, really?
Speaker 2:Used by Adobe, Canva
Speaker 1:Probably used gas player.
Speaker 2:Core On main clusters. Complexity.
Speaker 1:Did you see this post by Jacob Rintamaki?
Speaker 2:He said, truth nuke. What are you scared of? Oracle being 500% levered and not a thousand percent because Larry isn't AGI pilled enough. And tell us something tangible you want. Porsche nine eleven that comes with a signed copy of the new Dourkech Stripe Press book.
Speaker 2:They we we should be able to make this
Speaker 1:Those are fantastic answers. I believe that's a screenshot of the Thiel Fellowship application maybe, something like that.
Speaker 2:That's hilarious. But yeah. We we Jacob, just just post more. Post your way to being able to cover a nine eleven. You can get it.
Speaker 2:Can get a nine nine seven for, like,
Speaker 1:$30. Yeah. What's the yeah. Yeah. What would the monthly payment be on that?
Speaker 2:My first $9.11 was, like, $32,000.
Speaker 1:Okay.
Speaker 2:Bought it on Bring a Trailer.
Speaker 1:Yeah. Yeah. Yeah. You finance that. You pay for it with the XPost.
Speaker 1:I think he's
Speaker 2:Harder to finance a nine nine seven. Yes. But but, yeah, just post your heart out for for twelve months, and you'll be in you'll be in business.
Speaker 1:Oh, we, of course, have a Substack now. You can go to tbpn.com, drop your email, and you can get a summary of the show, some posts that we like, some important links, the the run of show, and sort of my take, my current thinking on whatever the the current topic of the day is. I'm also posting those on my personal ex account. And yesterday, we got a quote post from Zephyr, who kind of answered the question that I was asking, which was, you know, we have to trust the Sam Altman plan. What is the Sam Altman plan?
Speaker 1:Are they building their own chip, their their own data center, their own everything? Like, how mature will this be? Zephyr says, is OpenAI building its own chip? Yes. They are in in collaboration with AVGO.
Speaker 1:Fab by TSMC will be available in the 2026. That's forever in singularity terms, in my opinion. The 2026 feels like it's a decade away, but, obviously, it takes time to actually design and fab these chips. But I wanna know more. I wanna know more about the plan.
Speaker 2:Wanna doing on, 08/07/2009?
Speaker 1:08/07/2009. Was in college. I was where was I? 2000
Speaker 2:Well, instead of having a couple beers, you could have bought Broadcom at the IPO. Mhmm. It was a dollar and $6.04 cents a share. It's now sitting at 345.
Speaker 1:There we go.
Speaker 2:There we go. So
Speaker 1:That would've been good.
Speaker 2:Go back in time, John, and and figure it out.
Speaker 1:Indeed. And I could've gone back in time and signed up for Turbo Puffer and been searching every bite. But you can do that today with the power of the Internet. Serverless vector and full text search built from first principles on object storage. Fast, 10x cheaper, and extremely scalable.
Speaker 2:A Wordle game show is in the works at NBC. Jimmy Fallon is set to produce a get that size gong ready. Harvester, Salon, says, well, you know what they say, strike when the iron's cold and has been stored in the cupboard for several years.
Speaker 1:Yeah. Wordle. That was a was was that a COVID phenomenon? I believe it was. 2020, everyone was doing Wordles.
Speaker 1:I still hit them up every once in a while. I like a good word game. I like a puzzle. Yeah. The New York Times has been on a tear.
Speaker 1:I like I like it is not true, but I like the meme that people will New York Times makes a lot of money from their games, and and they have a separate subscription for games. And they've and and everyone kind of says, oh, The New York Times is journalism on life support by games, and it's kind of it's kind of evolved to the point where, like, they make 99% of their revenue from games. It's like, that's not true.
Speaker 2:They gotta get into they gotta get into gambling.
Speaker 1:They should get into gambling.
Speaker 2:I mean, they have an insane user base. Yes. And, you know, they're they're an eight they're a $9,000,000,000 company.
Speaker 1:Yep.
Speaker 2:So basically, the New York Times Yep. Value the same as Polymarket. Yeah. And what, you know, what what what could the New York Times do with they they could do mail order gambling I
Speaker 1:would love that.
Speaker 2:Mail order prediction markets.
Speaker 1:I would love I would love a daily gambling. A daily
Speaker 2:The Daily Gamble.
Speaker 1:The Daily Gamble. Imagine the Yeah.
Speaker 2:The New York Times betting podcast.
Speaker 1:Yes. I have another idea for them since they're into games. They're into Wordle. They should do a first person shooter.
Speaker 2:There you go.
Speaker 1:Don't you think it'd be good? You know, have Call of Duty. We have Battlefield. Yeah. Team Deathmatch.
Speaker 1:You go to newyorktimes.com. It just preloads a vibe code.
Speaker 2:You get to play as a legend of Mike Isaac.
Speaker 1:Yes. Exactly. Yeah. Yeah. You get Love it.
Speaker 1:You get Mike Isaac. Russell
Speaker 2:Paulson quoted our post. We were talking about the Anthropic ad campaign. Yeah. He added some insight. He says, this is all about values based marketing.
Speaker 2:It's not about the hat or what Claude does technically. It's about how it makes us feel and how it elevates our inherent humanity. It's a breath of fresh air to feel like an AI tool makes better rather than replaceable. Yes. Very well said.
Speaker 1:I like that a lot. And it does feel like Although, I do think this
Speaker 2:feels a little bit written like like Claude. It's not about the hat. It's about
Speaker 1:You can't yeah. I like when I when I write now, I actively think like, okay. If I'm gonna if I'm gonna try and put something in a it's this, not that, I'll just completely rephrase the sentence to just be, you know, just wildly different structure because, it can just it just has a a tinge to it these days.
Speaker 2:Yep. But anyway Paul says, OpenAI plans to detect underage users and give them a model with more safeguards. This may clash with Colorado's s b two zero five That's crazy. Which prohibits algorithmic discrimination based on age. What is Colorado doing?
Speaker 2:One of literally millions of pro social AI uses plausibly rendered illegal by that stupid law. Very yeah. Very interesting that a single state is gonna be able to potentially create policy nationwide policy Yeah. Around AI.
Speaker 1:Think David Sachs has been kinda ringing the alarm bells about this. Yeah. And there's been a number of folks we've we've we've talked to on the show who have said that, like, the state by state stuff is gonna make it really it it it sort of turns us into Europe where you have, like, one cookie policy that then cascades all over the place. At the same time, I feel like, is it not possible to just, like, geofence a feature?
Speaker 2:Still, I mean, you have 50 states if they all have different laws. Yeah. Colorado only has 6,000,000 people. We
Speaker 1:Yeah. Have 40. I'm not worried about the technical burden. Should be able to one shot that with Kodak. Come on.
Speaker 1:We're in the future. But I am worried about some weird situation where one of those Colorado ins is on the border, and the cell phone tower that they connect to says that they're in a neighboring state, and then that creates a liability. And there's a class action lawsuit, or they're using a VPN, and the VPN doesn't count as actually leaving Colorado. And so there's a lawsuit there. And and if it just becomes a legal precedent that requires you to to treat the entire United States populace like the the folks in Colorado, that could be very, very annoying and kind of just dampen everyone's experience because Yeah.
Speaker 1:When I think about, you know, we have kids. When I think about if they're using AI tools, like, I like the idea of more safeguards. I, you know, I I like that if you open up the the Disney app on on Apple TV, you can choose. Don't show anything r rated or p g 13 And just, you know, content filtering, adult parental controls. Like, these are good tools that should be in the hands of parents, and they should be in and they should be surfaced by the tech companies.
Speaker 2:Also, don't really want if if, you know, my son's very into dinosaurs. Yeah. And if he's someday talking with ChatGPT about dinosaurs, I don't really want I don't feel like it's necessarily fully appropriate for the to for him to feel like he's becoming friends with the dinosaur machine.
Speaker 1:Yes. I would also
Speaker 2:I think we're probably Yeah. Years and years and years away from him using
Speaker 1:Yeah. LMs. I would also just be worried about annoying syntax leaking into his vocabulary. He's like, dad, this isn't a tyrannosaurus. It's bedtime.
Speaker 1:It's king of the jungle.
Speaker 2:He's He's like
Speaker 1:on, dude.
Speaker 2:It's not bedtime. It's playtime.
Speaker 1:It's is
Speaker 2:basically the constant debate.
Speaker 1:Anyway, did you do we mention ProFound? Get your mention in ChatGPT, reach millions of consumers who are using AI to discover new products and brands? We always gotta mention them.
Speaker 2:PE Cooper. Get the timeline, built his own TBPN Meme template. Template, and he's putting it to use.
Speaker 1:What is this picture? Is this just how he sees himself as a royal lord? I love the
Speaker 2:Very base.
Speaker 1:Very base. I love the enthusiasm to just hardline that you're an eighteenth century or fifteenth century king or something. Yeah. I like it. It's very royal, very
Speaker 2:Bill Ackman.
Speaker 1:You can go check out he he has a he has a meme maker. You can make your own. People have been adopting the TVPN trading card aesthetic. Thank you for to Tyler Cosgrove for, I believe, inventing that whole, like, strategy or something like that. I think you made the first one of the AI researcher that got 5,000,000 views on X and then was shared all over the Internet and wound up wound up getting us on French TV.
Speaker 1:Did you wind up talking to the French journalists, by the way?
Speaker 3:I talked to them, but I I don't think they wanted me as, like, an actual interviewer.
Speaker 4:Okay. They
Speaker 1:didn't Like, sell you?
Speaker 3:I think they want people that work
Speaker 2:They're not real fans of this show, clearly. Would say,
Speaker 1:you've said. You're a yeah. A heavyweight in the industry. We we we tried to pitch them this idea that that Tyler was was was beyond the met the Metis list. The zero with
Speaker 2:Yeah.
Speaker 1:AI researcher since of course lists are indexed at zero.
Speaker 2:Bill Ackman says in one week, Jared Kushner pulled off the biggest LBO of all time, that is EA, and then negotiated one of the biggest peace deals of all time, a pretty good week. That's wild. Really just running the art of the deal playbook.
Speaker 1:We have been so behind on our EA coverage. We'd love to have Jared on the show. In the meantime, you can listen to his interview on Invest Like the Best if you wanna understand more of his investing philosophy. The EA take private is fascinating. It's a massive deal.
Speaker 1:EIA has so many interesting properties from Battlefield to they have Madden, right, and FIFA. They have all the sports. Got a lot. And it's just a very interesting business. We've talked for a long time about what it takes to pivot a business model in the public markets, how difficult that is.
Speaker 1:Will they be pivoting the business model? To what? If so, will they be doing that? Is that the point? Or is there some other restructuring that will happen while the company is private?
Speaker 1:That's fascinating to me. Ben Thompson had an article in Strutecari today, which, of course, you should go subscribe to, all about the the the basic basically, the failure of Xbox Game Pass because Microsoft paid something like $70,000,000,000 for Activision. They got Call of Duty. And the idea was they would put people on a Netflix like subscription, and you'd be able to play any game you want. And according to some, you know, rumors and talking to some Microsoft employees and some leaked data, it seems like the LTV went down.
Speaker 1:So it seems like it was actually better to get people to shell out $60.70 bucks a couple times a year for the big games that they want as opposed to putting them on a $10 a month plan, and then they're playing all these games for much cheaper. And so, it's been you know, the the conclusion is that it's still isn't working. We'll have to keep checking in on it. But, it'll be interesting to see, does EA go private and then find land with Sony or something? Or, like, land with another another, you know, gaming platform?
Speaker 1:Does it create its own store or, you know, pivot into, you know, buying other companies and getting into mobile gaming? Is there some sort of, other monetization micro transactions? Like, what are they gonna ramp up? They've tried a lot of stuff, but it'll be interesting to see where it goes. So we'd love to talk to the folks over at Silver Lake and, Jared Kushner's firm.
Speaker 2:Will
Speaker 1:I understand that.
Speaker 2:Menaida says, it's genuinely nuts that if you get good enough at New York City real estate that the only other place where those skills are useful is negotiating world peace.
Speaker 1:I didn't realize that these two were these two were connected. But of course, it's about Jared Kushner.
Speaker 2:That's Yeah. And and Trump, of course.
Speaker 1:Yes. Oh, yeah. Trump. That's very funny. Should we cover the the China news today?
Speaker 1:So Dmitry Alparovich says huge escalation by China. MOFCOM announces new export controls taking effect after December 1 of rare earths to anyone, anywhere in the world producing chips or equipment to make chips below 14 nanometer and two fifty six layer memory due to military applications. And so Dean Ball had a big take on this that we should probably read through to get up to speed. I'm Good. Not an expert on this, but I hope to be after talking to Dean.
Speaker 1:We're hoping to have him on the show soon. Dean says, this is a very big deal. China has asserted sweeping control over the entire global semiconductor supply chain, putting export license requirements on all rare earths used to manufacture advanced chips. So we have the design firms with NVIDIA. We have TSMC kind of on our side.
Speaker 1:We have ASML. There's a whole bunch of American IP that goes into the Western semiconductor supply chain, but China's upstream of all of that with their rare earth supply chain. There was a comment in the chat earlier about about what did like, does China control all of the rare earths? I think the the the the common sighted metrics are that they control a huge portion of the of the rare earth supply today, but they don't actually have all of the rare earths in More processing than supply. Exactly.
Speaker 2:Rare earths aren't as rare.
Speaker 1:We just call them earths.
Speaker 2:Yeah. And around here, we call them earths.
Speaker 1:Because they are, in fact, all over the place. And you hear about these rare earth deposits being found in Ukraine and in various parts of The United States. We have them. We just haven't actually gone Mining built the mine and processing, and that takes years. And so in the short term, putting an export restriction on, the actual processed rare earths is very geopolitically significant.
Speaker 1:So Dean Ball continues. He says, if enforced aggressively, this policy could mean lights out for The US AI boom and likely lead to a recession slash economic crisis in The US in the short term.
Speaker 2:Remember, this wouldn't be the first time they tried to I mean, the deep seek moment felt at the time very calculated. Let's ramp this app up the charts that I didn't still didn't know a single person Yep. That was using DeepSeek. It felt entirely that that that the chart run felt entirely manufactured and that the immediate effect on markets was insane. Remember?
Speaker 1:Counterpoint. Maybe they were just trying to take a little bit of air out of the bubble to create a bull catalyst.
Speaker 2:I mean, everybody knows if markets go down, that's a bullish catalyst.
Speaker 1:Yes. It also inspires us to grow grow grind harder.
Speaker 2:Yep.
Speaker 1:Tyler, do you know Ball? Dean Ball?
Speaker 3:Oh, I know of.
Speaker 1:Yeah. Oh, you do? Okay. Cool.
Speaker 2:Oh, he knows Ball. Okay.
Speaker 1:Good. Do you know Linear?
Speaker 4:That's why
Speaker 2:we hired you.
Speaker 1:It's purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, product road maps. You can start building for Linear. Some thoughts and recommendations from Dean Ball. Many things are unclear, including how intensively they will enforce this.
Speaker 1:This is a costly decision for them too and not without risk. These controls are being imposed on the whole world, not The United not just The United States. My current assumption is that China is doing this to gain leverage over The US in advance of the president's upcoming meeting with Xi Jinping at APAC. It'd be very funny if they just put the controls on The United States, then you had a bunch of startups that were like, I'm gonna do diversion, and I'm gonna go set up a a rare a earth, you know, buying and selling operation in, you know, Dubai or Malaysia or somewhere. That'd be very interesting.
Speaker 1:Number three, I do not think they are doing this to get The US to relax its export controls on NVIDIA Blackwell chips. In fact, my guess is that they want us to think that's their goal. We buckle by relaxing Blackwell controls, then the PRC shrugs and says, no. Thanks. We're very confident in our domestic chip industry.
Speaker 1:That is a message I'd want to be delivering to APAC if I were advising the PRC. Four, further relaxation of export controls is therefore unlikely to be a useful policy lever here. Instead, it is time for The US to get serious about export controls on semiconductor manufacturing equipment. Five, because we have been mostly unserious about this issue, China has stockpiled most durable equipment needed to make semiconductors. So most controls will not have an immediate effect.
Speaker 1:Six, he really ran through this. This is great. Six, however, there are some there are there are some consumable materials needed for semiconductor manufacturing that China China cannot make domestically, even better. Those consumables are often degradable, meaning one can only stockpile so much. These would be on the top of my list if I worked at BIS.
Speaker 1:I would strongly I would retaliate strongly, but in a targeted manner, the ultimate route to de escalation here is tariffs and broader trade war policy moves, not AI compute. This only underscores the urgency for The US plus allies and partners accelerate domestic efforts to mine and refine rare earths. Let's hear it for that. The Trump administration has been especially strong here, and Congress allocated serious money to this goal in o three b. But all options must be on the table, including the Defense Production Act.
Speaker 1:Policy will be important here, but remember that these rare earths are essential to the functioning of the global economy. It has heretofore been hard to solve with markets alone because China already supplies these commodities in abundance and at low cost, but they are fundamentally just commodities. We can make them. And 10, to the extent China enforces this policy, they will have made the price of these essential goods infinitely high. Remember, most of all, that supply is elastic, not on arbitrarily short time cycles, but faster than most people think.
Speaker 1:So we if the price is is is infinitely high, there will be a huge incentive to go start mining rare earth elements in The United States.
Speaker 2:Interesting. MP Materials is actually down point six of a percent in the last five days, which is, of course, the company that the Trump admin took roughly a 15% stake in
Speaker 1:Yeah.
Speaker 2:In rare earths money.
Speaker 1:Peter Hague says, sir, a second whispering to the president meme has hit the timeline. Is this a real photo? This feels like something that someone would have AI generated, but it looks real to me. It's from Reuters. And, sir, a second ad read has hit the timeline with numeralhq.com.
Speaker 1:Sales tax on autopilot. Spend less than five minutes on sales tax compliance. I screenshotted that one twice. It was so good. Andy Jassy says Joseph Carlson, the current c CEO of Amazon, has been with the company for twenty eight years.
Speaker 1:Wow. Andy Jassy, what a run. In 02/2003, he played a pivotal role in creating and scaling AWS, which is the most valuable part of Amazon. A significant portion of the modern Internet is powered by AWS. Amazon today is worth $2,400,000,000,000 and is one of the most critical companies to The United States and the world.
Speaker 1:Yet the CEO makes less money than many YouTubers, comedians, podcasters, professional athletes, and actors that don't manage or guide anything nearly as important or critical to The US or have millions of employees. We need to stop pretending that the CEOs of Fortune 10 companies who have helped build trillions of dollars worth of value for investors should have their salary compared with the delivery drivers working their way through through college. This trope is old and should be retired.
Speaker 2:Yeah. Josh Hawley, senator for Missouri, says is firing shots at Jassi saying, why? How is it pro worker or pro American that he makes at least 40,000,000 a year while the average American Amazon worker makes less than 38 k a year.
Speaker 1:Well, he needs to go on a campaign. Bobby the chat says, Andy Jassy doesn't even have 200,000 Twitter followers. That's rough. He's also never streaming on Twitch. Get on Twitch, Andy Jassy.
Speaker 1:We'd love
Speaker 2:to see product.
Speaker 1:I know. They own it. Amazon owns Twitch. So Yeah. That's where he should give his press releases.
Speaker 2:Is Dog food. Wild. Chip Wilson, Lululemon founder takes out a full page ad in The Wall Street Journal to roast the brand that he started.
Speaker 1:When was this in the journal? Was this
Speaker 2:Lululemon in a nosedive. He says, When I founded Lululemon in 1998, it was built on a relentless focus on innovation, product culture, and customer experience. We invented a technical product business model, created a new apparel category, pioneered community marketing, and developed system processes so simple a refrigerator could manage them. By its twenty fifth anniversary, Lululemon should have been a $100,000,000,000 market cap company. Instead, its trajectory has declined.
Speaker 2:Why? Lululemon directors have systematically dismantled the business model and lost employees who held the institutional knowledge that made the company great. Like a plane crash, decline rarely happens because of a single failure. It's a series of mistakes. He's adding some different sections here.
Speaker 2:One, the founder leaves. When a founder leaves, boards tend to fill committees with operators or finance focused directors who are beholden to quarterly commitments. A company bereft of a visionary loses its singular voice for product and long term strategy, a strategy that builds a moat around success. An operation slash finance driven board lacks the moxie to understand the market pulse. Gap gap ivization, loss of creative to the merchants.
Speaker 2:Every few years, a design team will stumble. When that happens, merchants and MBAs swoop in claiming to be the adults who can deliver consistent quarterly projections for Wall Street. To meet those projections, merchants follow algorithms and double down on what's sold the year before. This kills risk taking and prevents new innovative product from emerging. As a result, innovation dies, the brand becomes predictable, customers drift, the best creative people leave.
Speaker 2:The domino effect. As top talent leaves, short term results often look strong. The board harvests brand value by rapidly growing store count while margins expand through economies of scale. Wall Street is ecstatic and the egos of directors and management soar. Meanwhile, owner operated competitors seize the opportunity producing better product.
Speaker 2:Lululemon's institutional knowledge walks out the door often to competitors and is replaced by Nike executive shots fired
Speaker 1:Oh, he's taking
Speaker 2:shots all over the place. Failed business model. Desperate for growth, Lululemon squandered 1,000,000,000 on Mirror and wiped out 10,000,000,000 in market cap with a wildly wildly inappropriate Disney collaboration. To squeeze margins further, directors cheapened store design and shifted to nontechnical fabrics eroding the brand's premium positioning. Cultural erosion.
Speaker 2:New executives from old school companies chase short term margin growth and resume building. Directors unwilling to confront their own role in the decline and attempt to replace the CEO only to realize for the third time that they've failed to develop an internal successor with the brand faltering no capable candidate wants a CEO job. The nominating committee struggles to attract directors because no great leader wants to join a sinking ship, loss of cool. The board insists on operator finance CEOs who can speak Wall Street rejecting the idea of a product driven CEO. These types of finance focused CEOs don't know how to attract or motivate creative talent, or even worse, they think they understand how great product when they don't.
Speaker 2:Without an eye for outstanding design, the company dies a slow death. Lululemon forgot its muse. The woman who inspires culture, not just follows it. By drifting toward the mainstream and trying to appease everyone, Lululemon lost 50% of its market cap earned from brand power. It's it lost its edge and with it, the ability to hire the best people.
Speaker 2:The results on paper, Lululemon still looks good, but it's losing its soul. Deeper issue
Speaker 1:billion dollar company.
Speaker 2:That is getting absolutely smoked by Aloe in their core segment, which is the the muse that he described above.
Speaker 1:And founders back at outdoor Voices too.
Speaker 2:Yeah. So he says, the deeper issue is not just management, it's a disengaged nominating and governance committee that has failed to safeguard the company's long term vision. The path forward, I believe Lululemon can recover, but survival requires courage. Put product and brand back at the center. Rebuild the knowledge and systems that deliver product in nine months, not two years.
Speaker 2:Bring entrepreneurial ownership back onto the board. Three, empower creative leadership over merchants. Four, stop chasing Wall Street at the expense of customers. Five, recommit to the muse, the woman who inspires the brand. The world doesn't need another bland quarterly driven apparel company.
Speaker 2:It needs bold vision. It needs Lululemon to fly again. Lululemon can keep growing, but growth alone is not a healthy measure of success. The true measure must be innovation and brand reputation. When those are strong, growth comes naturally.
Speaker 2:When they're not, growth halts. The path is clear, but only with a revitalized board of directors with diverse capabilities. Sincerely, Chip Wilson, founder, Lululemon.
Speaker 1:Chad Wilson.
Speaker 2:When when did he actually step off the board? No. When did when did this actual article come out?
Speaker 1:It feels like I mean, it's not it's not in today's paper. I checked every page. So
Speaker 2:I think it But it must
Speaker 1:be recently.
Speaker 2:Came out. I'm on the journals.
Speaker 1:Yeah.
Speaker 2:Yeah. I think it came out yesterday.
Speaker 1:What's interesting is, like, I'm surprised he had to pay for this. Like, this would just be a good op ad to throw in there, but it does hit
Speaker 2:It's kind of it hits harder that he's paying out his own pocket.
Speaker 1:And the layout also just feels very, I don't know, iconic. It it it looks a lot different.
Speaker 5:So We
Speaker 2:should get Chip on the show.
Speaker 1:I'd love to talk to him about that.
Speaker 2:Yeah. Mean, they're just being competed from every possible angle. There's Yeah. New brands popping up all the time that Yep. Are more catered to the early kind of core Yeah.
Speaker 2:The lemon customer. You have Aloe. You have Vori. You have SKIMS from Kim Kardashian. Right?
Speaker 2:And all these brands are just better serving that that initial cohort. So
Speaker 1:Yep. Well, let's get him on the show. Let's pitch him fin dot a I, the number one AI agent for customer service.
Speaker 2:More sales, Kip. That is it.
Speaker 1:Performance benchmarks, number one in competitive Bake Offs, number one ranking on g two. Did you see Wagy Capital taking a shot at Samuel Gibson? We'll hold our we'll hold our judgments until we actually meet him. So Wagy Capital says incredible things are happening in the nuclear grift space. Meet Samuel Gibson, Zoomer, who graduated from college in 2023.
Speaker 2:Let's give it up for Zoomers.
Speaker 1:Yes. And is now cofounder and CEO of Hadron Energy, a nuclear vaporware company going public via SPAC at a $1,200,000,000 valuation.
Speaker 2:They have, according to LinkedIn, between two and ten employees.
Speaker 1:Okay. So But 11,000 followers.
Speaker 2:Starts everybody starts somewhere.
Speaker 1:I don't know. I mean, you gotta get the money to build a nuclear reactor at some point.
Speaker 2:And they raised they a $900,000 according to Crunchbase. That's also
Speaker 1:You went from 900 pre seed to $1,200,000,000 SPAC? I mean, ugh, built different. Gen z really on a tear. He had a 3.4 GPA at University of Nebraska link Lincoln. Not
Speaker 2:bad at all.
Speaker 1:I don't know. Get the get the bag. Get the get the cash. Build the thing, hopefully. Gotta build.
Speaker 1:You get Yeah. I I You can't purely cash out and then write it down. You gotta turn it. You can stack it, but you
Speaker 2:gotta On website.
Speaker 1:You gotta deliver the actual energy.
Speaker 2:On the website, they just have they have like a bunch of renders. Yes. And one of the renders just says data center one on it.
Speaker 1:Okay.
Speaker 2:They got so they got data centers. They got data centers. Yeah. But they're saying the world's smallest, lightest, most versatile micro modular reactors.
Speaker 1:This
Speaker 2:yeah. And the design is awesome. The renders are awesome.
Speaker 1:Yeah. A lot of lot of work. I mean, I I I feel like.
Speaker 2:And they have a Tesla Cybertruck Yep. Render Okay. Pulling a render of their micro render, battle. Reactor. So it's it's looking it almost looks kinda like Fortnite.
Speaker 1:Huge question on who's actually underwriting the SPAC, who's running this thing, how did the cap who's how did the capital go into the pipe? Like, what what actually happened here? You know, there's the SPACs are not inherently bad. You can raise money in a variety of ways. And if you go and actually deliver and generate a lot of cash flow, at some point, you'll be worth way more than what you SPACed at.
Speaker 1:So good luck to him, but it does seem like a tall order.
Speaker 2:Well, I think
Speaker 1:that Gig
Speaker 2:Gig Capital Global is putting up
Speaker 1:How much?
Speaker 2:Some of the cash here. And they also you might remember, they are investors in Big Bear AI.
Speaker 1:I don't know Big Bear AI.
Speaker 2:I didn't think you
Speaker 1:would. Okay.
Speaker 2:But anyways, we'll we'll see here. I think I think we should withhold judgment. I
Speaker 1:I Yes.
Speaker 2:I the renders look cool.
Speaker 1:Plug it in.
Speaker 2:They're may plug it in. Plug
Speaker 1:it in. Plug in. It the nuclear reactor, Generate some electricity. Profitable. Let's see.
Speaker 1:Plug how
Speaker 4:it is.
Speaker 2:Tyler, you should talk to him and see see how real it is.
Speaker 3:Yeah. I mean, I I've been thinking about getting to the SPAC game.
Speaker 1:Oh, yeah. What are gonna SPAC?
Speaker 3:Think I'll I'll probably figure it out later on. Okay. So I'm kind of started the the motions already.
Speaker 1:Just empty shell for now. Yeah. Self spack. Cabaluraza. Self any direction.
Speaker 2:Yeah. I'm surprised somebody hasn't tried to stack themselves with some type of income share agreement yet.
Speaker 1:During the NFT boom, someone did. Wasn't it Alex Token? Am I getting that wrong? Some
Speaker 2:Yeah. But a lot of that he definitely, I think, started a trend of people.
Speaker 1:Isn't this the Ben Pasternak thesis as well? Everyone will have a coin attached to them or their project.
Speaker 2:Nathan Summers in the x chat. Are you guys hiring for a narrator intern? Oh. I have great cadence. He's a drummer.
Speaker 2:And tonal variety for an exciting viewer experience. I also would hate to see a vocal cord strain cut down on your ability to run the live show DMZ.
Speaker 1:Imagine being able to Tyler,
Speaker 2:reach out to Nathan. We we gotta talk to this guy.
Speaker 1:Okay. Yeah. He's just sitting here and was like, read read me this Wall Street Journal article.
Speaker 2:Yeah. Ner a narrate
Speaker 1:Nerate having And we will just do the reaction, but we want you in person live to read us this story from the Wall Street Journal on can Ferrari persuade the super rich to buy an EV sports car that won't rev? We're gonna read this article, but first, I'm gonna tell you about Adio, customer relationship magic. Adio is the AI native CRM that builds, scales, and grows your company to the next level. So the brand, Ferrari, is planning to unveil its first all electric model next year, And, it's a bold move. It's a bad time, probably something that was, greenlit years ago, but we will dive into it in this Wall Street Journal article.
Speaker 2:And, some backstory here Please. Ferrari just updated guidance. Yes. They had a capital markets day. Wall Street was not excited about it.
Speaker 2:The stock is down 18% in the last five days.
Speaker 1:Okay.
Speaker 2:Let's get into, their next vehicle, which I think is something no one wants.
Speaker 1:We will see. Extravagantly powerful and noisy engines helped make Ferrari the ultimate sports car brand. Now the company wants to persuade the super rich to buy a model with no engine at all. The Italian carmaker this week started lifting the hood on its first electric vehicle, a years long project that has cost the brand hundreds of millions of dollars and promises to set a benchmark for how battery powered sports cars should look and look, sound, and drive. At a glitzy launch event at its headquarters in Maranello, Italy, Ferrari showed off the technology that will power the EV, including a new electric axle motor and battery pack set to be made in house at its factory.
Speaker 1:Wow. Going vertically integrated all the way down to the battery on day one, that's bold.
Speaker 2:Which is wild because Ferraris have always been known to have electrical issues, including the Ferrari that I owned Yeah. That I I think I replaced the battery. I forgot exactly how many, but I had to replace the battery multiple times Yep. In a single quarter. So
Speaker 1:Skill issue. It it it said the vehicle called the Ferrari Electrica. What do we think of that name? It's not quite there. The Dolce Trelindi hits, you know, the Electrica, maybe?
Speaker 2:It feels like a name that somebody that was, like, trying to come off as an Italian Maybe. Brand would would use.
Speaker 1:Well, it'll be able to go from zero to 62 miles an hour in two point five seconds, which is fast, but not as fast as a Model s Plaid that you can get on Bring a Trailer for 50 k now. So it has a top speed of a 193 miles an hour. The range on a single charge will be at least 329 miles. That's not bad. The company won't reveal what the model looks like until next spring with deliveries slated to start later
Speaker 2:in the six Model s Plaid does one point nine nine seconds, although
Speaker 1:1.9999999. Wouldn't wanna up to?
Speaker 2:Try that out, to be
Speaker 1:honest. You wouldn't? Or you would?
Speaker 2:Maybe on a maybe on like a runway. Yeah. But on a on a normal road, I wouldn't wanna I wouldn't
Speaker 1:You wouldn't wanna go that fast?
Speaker 2:I just Maybe when
Speaker 1:you're an adult, when you're when you're a man
Speaker 2:Yeah.
Speaker 1:Then then you could do it.
Speaker 2:When I finish growing.
Speaker 1:Yes. The debut comes as a as the global auto industry adjusts to a slower transition to EVs than expected when Ferrari announced the project. So when Ferrari started working on this, everyone was saying, everything's gonna be EV. EV is gonna dominate. It's not just gonna be some, like, subcategory of the market.
Speaker 1:It's gonna be everything, you gotta get in on it. And, of course, other sports car makers such as Porsche, Lamborghini, and McLaren have delayed plans to build electric models citing weak demand. While Ferrari is committed to launching its first EV on schedule, it has scaled back its wider bet on the technology at Investor Day Thursday, which is which you mentioned. The company said EVs would account for 20% of its vehicle lineup in 2030, half the share previously indicated. We know that this path is not easy, Ferrari chief executive Ben Benedetto Vigna said in an interview.
Speaker 1:But we also know that we, as a leader, need to show the entire world that we can harness this technology. At the same time, the company plans to release many new vehicles with traditional engines according to its latest product road map. The Ferrari Electrica is one of 20 models set to launch through 2030, more than previously planned. Despite the new models, Ferrari issued a cautious sales forecast, 5% annual revenue growth through 2030, and the stock fell 12%. Since being spun out of Fiat a decade ago, Ferrari has become Europe's most valuable carmaker by persuading uber wealthy gearheads to splurge hundreds of thousands of dollars on meticulously crafted sports cars.
Speaker 1:EVs pose a particular challenge for luxury sports car brands, which say roar and rumble are central to their identities and appeal. Ferrari, perhaps more than any other automaker.
Speaker 2:Imagine Nathan in the chat narrating this right now.
Speaker 1:I know. It could be so much better. The brand is known for its noise. The Dolce Trelendri is naturally aspirated, meaning it doesn't rely on a turbocharger to push air into the cylinders, an old school approach credited with more natural open roar. Ferrari said its EV wouldn't mimic engine sounds as some competitors have, like the Kia EV six GT.
Speaker 1:I forget what it's called. But
Speaker 2:Yeah. That was an engineer from the m Yes. Series. Right?
Speaker 1:That No. That that's Hyundai, actually. Right. So the the the engineer who created the m division at BMW went over to Hyundai and created the n division because n comes after m and tuned up a bunch of the Hyundai's to be performance cars. And one of them is the Hyundai EV six or something.
Speaker 1:I'm getting the the exact model name wrong. But it has not only engine noise that comes through the speakers, but a simulated dual clutch transmission that you can operate via paddle shifters that are entirely digital. And so you can essentially be rev limited and be redlining the car even though it doesn't have a real red line. And a lot of the super old school car lovers tried it. Doug Demuro and a bunch of other folks, Matt Farah from Smoking Tire all tried it, they were like, this is amazing.
Speaker 1:Like, I forgot that I was driving an electric vehicle after just a few minutes in the car. And so the prediction at the time was that every electric vehicle car maker would adopt that same simulation technology because it was popular, and it's a pretty easy feature to add. Seems like Ferrari won't, though. They're going natural EV. Yes.
Speaker 1:Instead, it will pick up the sound of what it calls the electric engine and amplify it into the cabin to give the driver feedback when required, so you'll hear the electric engine Mhmm. Whirring. The company compared the difference between its conventional sports cars and the EV to the difference between an acoustic and electric guitar. Ferrari also faces the risk of EVs losing value faster than traditional models as the battery degrades. The promise of timelessness is a selling point for Ferrari buyers.
Speaker 1:The company leans into the economics of the luxury industry, carefully limiting supply to ensure that its top models retain their value over time, like like Rolex watches or Hermes handbags. And if you want a Rolex, head over to getbezel.com. Your bezel concierge is available to source you any watch on the planet, seriously any watch. So, Elkan also recruited Johnny Ive to work on the brand's first electric model. Oh, interesting.
Speaker 1:I I didn't didn't realize realize this.
Speaker 2:That's Love
Speaker 1:talked about this with Love From having a, Ferrari partnership. This is the car that was designed by Johnny Ive. That's fun. To make its electric cars, Ferrari built a state of the art factory, which cape which became known as the E Building. After heavy investment, the question now is whether Ferrari's wealthy clients will want to drive the new model.
Speaker 2:Imagine imagine, you know, spending your whole life as, you know, being obsessed with the Ferrari brand, learning to work on on on these engines Yes. And then getting the tap on the shoulder and saying, you're actually going over to the E Building.
Speaker 1:Yeah. And I think there's there's also this factor that the it feels like the really highly engaged Ferrari buyer maybe doesn't care about straight line speed that much. It's never been a muscle car. The more exciting number that folks track is like the Nurburgring time, And the gas cars are still performing extremely well
Speaker 2:So just the feeling. Yeah. The the factors that that For sure. Yeah. Just the feeling of driving the car, what the the ownership experience.
Speaker 2:Right? Yeah. The the the main critique of for Ferrari from some of the more, I would say, casual Yeah. Clientele is like the depreciation Sure. Recently.
Speaker 2:The cars are just losing value far more quickly than they historically did. Part of that is already because the hybrids, right, the SF nineties, the the s the two nine six is also a hybrid. Right?
Speaker 1:Is that depreciating? I thought that one was kind of holding its value a little bit more.
Speaker 2:A little bit better, but I mean, you can buy them for less than sticker with like three, you know, less than sticker for like 300 miles on
Speaker 1:that. Yeah.
Speaker 2:Would have expected Ferrari to try to go more towards something like a Nissan Cross Cabriolet.
Speaker 1:I would love that. Take the Purosangue. Give it a drop top. Yeah. Iconic silhouette.
Speaker 1:A rag top Purosangue might be the move for them.
Speaker 2:This is interesting though. Canadian collector, Luke Poirier, who owns 38 Ferraris, said he was open to the idea of buying the EV having found the company's hybrids engaging and emotional drive. See the SF 90 is a wild driving experience. I was in Dubai and rented an SF 90 and took it out. It's pretty funny.
Speaker 2:They they give you tickets in The UAE based on you'll get they have cameras. They'll they'll they'll give you tickets without you even having any sense of it. So you can actually go out on a drive and get multiple tickets if you're not safe. I was so the so the the rental service was they keep like a deposit Yeah. Aft like long after you've returned the car and ensure Oh, that interesting.
Speaker 2:They're like, okay, the car is good.
Speaker 1:But you might get
Speaker 2:But you might have gotten like five tickets.
Speaker 1:That's fine.
Speaker 2:And so we need to hold this. But Luke Luke says, my only hesitation is reliability since it will involve so much new technology. Ferrari started dabbling in hybrid technology on the racetrack in 2009 and hybrids now account for almost half its output. Vigness said Ferrari would apply lessons it has learned from hybrids to its EV. We will not sell an electric car without considering the expiration date of the battery.
Speaker 2:Many EVs and hybrids haven't performed well in the second hand market, a problem typical of fast moving technologies. SF 90 and SF 90 Spider, for example, have depreciated faster than comparable models with conventional powertrains according to Hagerty. Again, there was a lot of people that bought SF nineties at the top for way over sticker.
Speaker 1:It also came out during, like, the zero interest rate sort of bubble. So the auto loan rates were really low, and a lot of people were flushed from various crypto schemes and all sorts of froth in the market.
Speaker 2:Oh, yeah. Everywhere.
Speaker 1:It was easy to buy it over sticker. Do you know David Lee, the Ferrari collector? He has over 40 Ferraris, I think, all in red. He has all the supercars, the f 40, f 50, the LaFerrari, the Enzo. He says to be a top client of Ferrari, you you buy every car that they introduce, and he says he's planning to buy the EV.
Speaker 1:Yeah. But I wonder how many how many of those collectors will stick around if they just took a bath on an SF 90. They're not doing well in their '2 nine six.
Speaker 2:Yeah. But this I mean, so city analyst Harold Hendrisky says, it is somewhat surprising that Ferrari is going ahead. Overall demand for those cars is minimal. We were talking earlier off the air just saying they had such an amazing opportunity to let the rest of the automotive industry go have you know, Porsche went heavy into EVs, is now pulling back. Ferrari could have said, we never wanted to go into EVs.
Speaker 2:We like, you know, naturally aspirated v twelves. We're gonna continue to focus here.
Speaker 1:If they were the one that never did the EV It would have been crazy very for special thing to the brand. And now they're they're still Yeah. They're still, like, in the same conversation as Porsche and Lamborghini Yeah.
Speaker 2:McLaren and what. But again, if you're a client and you want access to, the f 80, you can better you better believe that you are
Speaker 1:Pick up a couple of these.
Speaker 2:Get go into your dealer, get preorder a few of the Ferrari Electrica's. Yeah. You know, show you.
Speaker 1:At the same time, like, I I feel like if you're David Lee, you own 40. Like, you definitely wanna own the first EV just because it's gonna be interesting to see what Ferrari does with an EV. Like, it will be a different experience. It will be there will be a Ferrari twist or take on
Speaker 2:e Yep.
Speaker 1:Even though that's been
Speaker 2:age of So interested to see what happens with the Purosangue
Speaker 1:Yeah.
Speaker 2:From a depreciation standpoint. They're holding up well now. It's a naturally aspirated v 12. Mhmm. I think it looks you know, people debate the the looks all the time.
Speaker 2:But Yeah.
Speaker 1:You can always put a monsailary
Speaker 5:body kit on it
Speaker 1:and get the pooginator and then you're good.
Speaker 2:Yeah. But yeah. We'll we'll see how these hold up
Speaker 1:make it off road edition,
Speaker 2:having a I don't The the Urus has held up incredibly well because it still looks exactly the same as it did in 2019.
Speaker 1:Yeah. It hasn't been
Speaker 2:happily buy happily, you know, continue to purchase a older Urus and and use it to sell courses or whatever whatever they do. But I don't know about the it's hard for me to imagine people paying half a million dollars for a Ferrari SUV or even $400,000
Speaker 4:Mhmm.
Speaker 2:In a few years. Right? So
Speaker 1:Well, if you want a Ferrari for your bedroom, get an eight sleep. Pod five, five year warranty, thirty day risk free trial, free return free returns free shipping.
Speaker 2:I'm back on a roll. Got a ninety three eight hours twenty three
Speaker 1:minutes. Let's read this post from SMB attorney who says wait. What'd you get?
Speaker 2:I got a 93. Oh, I got a 92 back to back.
Speaker 1:SMB attorney says, people keep telling me the American dream is dead, but every day I meet entrepreneurs who know more about SEC football than accounting, drive trucks, and think getting dressed up means a good pair of jeans who've made millions running businesses that clear land, trim trees, and install equipment. The American dream is alive and well. It's just hidden behind hard work and a little bit of sweat.
Speaker 2:We have to get a plumber or an electrician on the show that's cashing in on the data center boom. There has to be some guys that are that are on their way to at least getting a a PC 12, you know, turboprop.
Speaker 1:I wouldn't be surprised. But I I think that this post is more just about, like, you don't you don't need to be a janitor at a data center to to experience a boom if you're just running a well run operation, have scaled it. There's a reason you know, the meme is the private equity guys will come and buy these companies, but the reason they do is because they're good companies. And so maybe there's still still an opportunity there. And there's also opportunity in the public markets on public.com investing for those who take it seriously.
Speaker 1:They got multi asset investing, industry leading yields. They're trusted by millions.
Speaker 2:They now have direct indexing Yes. I am playing around with. Well What do you got?
Speaker 1:Will Minitis on the timeline Back. With a longer post. Take us a minute to read through this, but should be fun.
Speaker 2:Get started. I'll be right back.
Speaker 1:He says, you can leave the kingdom, but you're still paying tax. Incumbents realize their industry is too regulated or too and too consumer unfriendly for growth, so they build a parallel, less regulated, often cash pay alternative next door. The parallel system is easier but causes massive consumer harm. I've seen this myself. The prime example of this over the last five years is the rise of telemedicine pill mills in health care.
Speaker 1:Think of the health care industry as defined by two factors. One, extremely limited supply. Medical doctors are scarce and costly. And two, a a principal agent problem with payments. Your insurance pays and you don't.
Speaker 1:This has allowed the industry to behave in incredibly weird ways. Costs can constantly grow. Patient experience can constantly degrade, and clinics will still fill up with wait lists because patients trust it, need it, aren't paying for it, and have no choice. As a result of this, we saw a world where patients replace their primary care doctor with a fleet of telemedicine pill mills for lifestyle drugs. Further, lax regulations during the 2021 era allowed for these telemedicine services to offer things the traditional system could never offer, fund lifestyle drugs with limited medical supervision.
Speaker 1:Sure. It was a better experience, but that patient went from having 75% of their care subsidized by insurance to having 0% of their care and drugs subsidized. The parallel system passed costs on to the consumer. Furthermore, the consumer is likely harmed in the form of lower coordination and regulation, opening the door to all kinds of harm, bad drugs, conflicting drugs, etcetera. How many people do you know that are now on four, five, six, or seven drugs of dubious medical need?
Speaker 1:I actually don't know that many people that are on that, but I certainly hear stories about it. Flip a coin. Either way, the percent of your income spent on health care is going up. That seems true. We see this playbook across industries.
Speaker 1:When the kingdom was built, the merchants paid taxes, coordination, regulation. They hated paying taxes and boxed themselves in via regulatory capture, so they pushed it onto the consumer. Unable to conduct business, both the merchant and the consumer leave the kingdom. Things are easier outside of the kingdom walls, but the merchant gets richer faster, and the consumer gets harmed. You see this in options markets today.
Speaker 1:You you see this in defense procurement, which I don't know what he's talking about. I'd I've never heard of defense procurement happening outside of a regulated environment. I do see it in health care. You see it in crypto. That seems like a great example.
Speaker 1:You see this everywhere. I would love to know what he's thinking on defense procurement specifically. We build palaces of regulation to pursue to prevent consumer harm and force consumers into unregulated legal gray area systems in order to conduct business. It's easy to see why. This is a durable economic effect we see across economies.
Speaker 1:You can simply squeeze more growth out of an unregulated market. Look at rising Asia. And The US has allowed for a continuously developing set of emerging economies by its glacial pace of gray market regulation. We should view this as an incredible indictment of a regulatory state. The solution is to overregulation of essential industries isn't to allow the progressive construction and delayed regulation of legal gray areas.
Speaker 1:The solution to overregulation is to remove regulation on existing industries. Parallel construction of regulated system harms consumers. And I have a great example of this that I've lived for years, but I can take you through it. So Juul started ten years ago, got immensely popular, and was so regulated by the FDA that at one point they were banned, and then they finally got approved. And all of this was justifiable in the micro.
Speaker 1:But during the time that they were banned and going through all this, guess what happened? There was an entire massive gray market of illegal vapes that weren't even trying to be approved by the FDA. They weren't participating in the regulated structure. They were not in the kingdom. They were just out in the gray market.
Speaker 1:And they gave video too
Speaker 2:of, like, a of a child testing the vapes? Yes. They were coming off the line. Child and China's hitting them all to make sure they're they're they're working and then Yep. Before they ship them out to America.
Speaker 1:Yep. So crazy So the market moved to gray market. And and I I don't know what the stats are most recently, but at at one point, illegal vapes, mostly imported from China, were the second largest category of nicotine consumption after cigarettes. So it's much, much bigger than Juul and and the and the companies that were trying to be regulated. There's obviously regulation that needs to happen in this category.
Speaker 1:But if it takes ten years, yes, there is a gray market that's going to develop. And so I I firmly agree with Will. I've seen it in in the business that I know best, and he's obviously seen it in the medical space. I have no idea what he's talking about in the defense space. But do you have any thoughts on Will's latest long post?
Speaker 1:The Yuga, as he puts it.
Speaker 2:The Yuga. I don't know. I think it's interesting that we haven't seen more about the pell mills and all the telemedicine shops from the from the 2021 era.
Speaker 1:We were hearing rumors
Speaker 2:working through the courts.
Speaker 1:Yeah. Yeah. We were hearing rumors of, like, ATF getting involved or the government going getting involved, some of these companies going bust. A lot of them, they kind of had legal problems, and then they just kind of melted away, and they just became quiet. And I haven't heard from these companies.
Speaker 1:Maybe they still exist. Maybe they just kind of quietly stopped doing the bad thing.
Speaker 2:Yeah. I'm sure they're all doing it again or they're being reborn to do various peptides
Speaker 1:Yep.
Speaker 2:And semaglutide and all those.
Speaker 1:Well, we heard about a fantastic company, biotechpeptides.com or something. Oh, Do do not go there. I know that that's the website. Yeah. We saw someone.
Speaker 2:Saw somebody
Speaker 1:Friend of the show.
Speaker 2:Friend of the show shopping for Chinese peptides off top offline and the website was just called biotech peptides. Doesn't seem like the most legit
Speaker 1:It's extremely legit. I love biotech. It's it's it's the most important technology, you know. It's like it's like reliablemedicine.com. That's No.
Speaker 1:It's called medicinemedicine.com. Yeah, basically.
Speaker 2:We didn't we haven't talked about this First Brands bankruptcy. Did you see this?
Speaker 1:I don't know anything about this.
Speaker 2:I'll I'll read through a piece in the journal from yesterday. So First Brands auto parts supplier First Brands crashed into bankruptcy last month. Now banks are shifting through their exposure to the company and its chain of customers and suppliers. Jefferies on Wednesday said funds run by an asset management unit Point Bonita Capital are owed 715,000,000 from companies that bought First Brands parts. UBS in bankruptcy court filings said funds it operates including through its O'Connor hedge fund unit, which the bank agreed to sell earlier this year, around 500,000,000 of exposure.
Speaker 2:The exposure is also mainly to customers that owe First Brands money. A person familiar with the matter said, the twin disclosures from the banks illustrate the tangible the tangle of financing that flowed through First Brands, collapsed in late September, owing more than 10,000,000,000 in a messy and sudden unraveling. Newly appointed directors have said they're probing irregularities in its financing arrangements. Jefferies said it doesn't have any information yet on what the probe has found and it would also act to enforce investors' rights. UBS also said in a statement that it was working to protect investors' interests.
Speaker 2:Of course, they are. Mhmm. Neither firm indicated any significant direct exposure. Analyst at Morgan Stanley calculated Jefferies possible total exposure as an investor in the funds at 44,000,000. So the timeline is getting into a junk bond.
Speaker 2:Analyst on x says Jefferies is in the crosshair as the main investment bank behind First Brands with a history of bringing risky capital markets deals. New facts are coming to light. The unraveling of First Brands comes just one month after Jefferies was pitching investors on a $6,000,000,000 debt refinancing deal. Investor investor concerns caused the refining refinancing efforts to fail as Jefferies struggled to get diligence information from First Brands. Chapter 11 bankruptcy filing followed weeks later.
Speaker 2:New information about Jefferies level of involvement. First Brands set up a so called side letter with Jefferies for an additional trade financing facility which enabled First Brands to raise funds at at an interest rate above the limits permitted by its loan documents. The workaround First Brands paid Jefferies a supplemental incentive fee instead. This new disclosure caught investors by surprise, increasing financing costs and breaching rules on existing loans which Jefferies helped arrange and syndicate. So
Speaker 1:On their website, they have a list of brands. I'm I'm I don't know that many of them, but I do see the Michelin logo. They don't actually own Michelin. I was thinking that they might also own the Michelin guide, but they do license Michelin in in tires, I suppose, or wipers, actually. Michelin wipers, they they sell.
Speaker 1:They don't sell the tires. Interesting. I I was not familiar with this company before we we pulled it
Speaker 2:Anyways, still still sort of unraveling. There's a bunch of different groups that there's other reporting that says 2,300,000,000.0 has simply vanished from
Speaker 1:Yeah.
Speaker 2:First Brand's accounts. So, again, people Yeah. There's a there's a an an email here from someone at Auric, that says, Wheel team, thank you for your help yesterday in in respect of the orders and our clients' comments. We would like to set up a call with you today to ask two question which our clients needs for informational purpose purposes. First, do we know whether FBG actually received 1,900,000,000.0 no matter what happened to it?
Speaker 2:So, like, we got one, almost $2,000,000,000 Second, is would you tell us how much is in the aggregated accounts in respect of the factored receivables as of today? And they answer one, we don't know. $20 in their accounts. So, big, multibillion dollar mystery here. And, yeah, we'll see how this how this turns out.
Speaker 1:Well, Clark in the chat says is is talking about the example I gave about vapes. He highlights that something similar happened in THC with Delta eight and THC a. I completely agree. It was the same thing. The the there was there for a decade or longer, like, people were saying, oh, there's gonna be, like, a federal bill on on, you know, where dues where does America stand on THC?
Speaker 1:And it just kept being kicked to the states and is legal and medicine in some areas and then recreational in others. And in that time, basically, you go to one of these trade shows and every gas station owner is there buying, like, basically whatever they want. And it's it's it's just like a complete failure to just have clarity around what the market structure should be. So, lots of work to be done on the regulatory side, unfortunately.
Speaker 2:Well, without further ado, I think we have our first guest in the mainstream waiting room. Let's let's bring them
Speaker 1:in. Let's bring in Preston.
Speaker 2:We go. Welcome to the show. Preston from Relays.
Speaker 1:Hey, guys. It's great
Speaker 4:to be on.
Speaker 2:Great to have you. Give us a quick introduction on yourself and the company, and then we'll get into the news.
Speaker 9:Yeah. Of course. My name is Preston. I've been working on relays with my cofounder, Eitan Borgne, we've recently raised $23,000,000 as a series of
Speaker 2:we go. When John gets back, we'll we'll hit the gong. But how did you get into building relays? When did you start it? What were you doing before?
Speaker 9:Yeah. That's a great question. Before this, we were both PhD students. So I was doing my PhD in physics. My co founder Eitan was doing his PhD in machine learning.
Speaker 2:Same college? No.
Speaker 9:I was at Harvard and he was at UChicago, but we went to Caltech as undergrads together.
Speaker 2:Very cool. Very cool. So straight from PhD program into relays, did you did you drop out or did you guys actually get your degrees?
Speaker 9:Yeah. We dropped out.
Speaker 2:There you go. There you go.
Speaker 9:ChatGPD had just come out and we were like, this is the time to do it.
Speaker 2:Amazing. What obviously, hypercompetitive category, tons of activity, what what's been your guys' initial edge and focus?
Speaker 9:Yeah. So we've been really focused on approaching the developer experience from but from the experience of the agent itself. And so we don't consider ourselves, like, competitors with, like, cursor or cognition or anything like that. We're building the infrastructure that someone would want to use when they're building AI agents. And so what we've focused on to start are all these auxiliary models that make these AI agents more reliable.
Speaker 9:For as an example, if I'm a human, I love my autocomplete. I love my tab autocomplete. If I'm an agent, I have a different set of models that are really useful to me. So this is, like, what we've started out with. This is, our fast supply model, which applies diffs and our embedding and re rank models, which is able to find the relevant code in your code base in less than a second.
Speaker 9:And this is used by 40 companies, including, like, Lovable and Figma, etcetera.
Speaker 1:There we think OpenAI's agent builder product is gonna is gonna play out? It seemed like a cool, like like, new capability and but I'm not sure. I haven't had the poll like the other products that they've released in the last couple weeks to just, like, jump in, try it, play around. What what's been your read on agent builder from OpenAI?
Speaker 9:Yeah. I've heard good things. I mean, it looks very beautiful. It's it's definitely a different category than what we Yeah.
Speaker 4:Of course.
Speaker 9:Built in. But I think the launch went really well.
Speaker 2:Yeah. What does success look like over the next twelve months?
Speaker 9:Yeah. For us, we really want to now, with this raise, optimize the infrastructure along with the models itself. I think, as an example, like, Cursa has done such a great job of optimizing the product with the models. And so all the models that you have within your IDE, the apply model and the tab auto complete, make this product work very seamlessly. We wanna do the same thing for the infrastructure.
Speaker 9:And so we recently also released Relay's repos along with our series a announcement. It means that you can now have retrieval embedded directly into your source control. And we're really trying to, like, reimagine, like, hey. Like, what does source control look like when you have access to models to make it better and when you're, like, exclusively focused on building it for the agent. It's
Speaker 1:What's the what's the biggest company that you've pitched or talked to in customer development? I'd love to know the mood and the receptivity. We've seen some some news about, like, the Fortune five hundred trying a bunch of AI stuff and then kind of pulling back from it. Have you talked to any big companies? And and can you share any context on how bigger companies are thinking about adopting AI broadly?
Speaker 2:And have you been focused there? Are you focused on scale ups like Lovable and and sort of founder mode companies like Figma?
Speaker 9:Yeah. I mean, we're talking to all of the big five coding companies. Sure. You know, Lovable, Figma are some of the examples. I think the way we think about this is that these LMs are going to continue to increase in capability.
Speaker 9:We're seeing kind of what dominoes fall in the first, say, like, year, year and a half of, like, models that are, like, reasonably good at coding. And so already, if I need a marketing website or or a simple presentation, I can actually, like, vibe code that on, like, Replit or Lovable. I think over the next year, two years, three years, as we continue to see the capabilities increase, more and more things that are now traditionally software will be able to express in code. And and this is, like, what we're very interested in. This is why we're saying that we're building the rails for software on demand.
Speaker 9:It's because things we've seen people build, like, PowerPoints and decks in TypeScript and React instead of using PowerPoint anymore. We've seen people use, like, consumer TikTok filters that are entirely expressed in code. It's one of our customers, Gizmo. And we think that a lot of what we might not consider software today will end up being software, and the thing that runs and creates it is going to be a coding agent.
Speaker 1:Well, congratulations on the round. I'm gonna
Speaker 2:Hit that gong. Boom. Awesome. Congratulations on the raise. I'm sure we'll have you back on again soon for the b Yeah.
Speaker 2:With the way things are going currently, and congrats on all the traction.
Speaker 1:Have a great rest of your day. We'll talk to you soon.
Speaker 2:Cheers.
Speaker 1:We have a review from Trip Carolyn that we gotta read through. He says, and of course, as a reminder, if you leave us five stars on Apple Podcasts or Spotify, put an ad for your business in that Review. Review. We'll read it on the show. Gulfstreams, wrist hitters, impeccable ad reads, the daily coverage of technology news.
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Speaker 2:We love you, Tripp. Fantastic. Tripp truly has been fan of of Technology Brothers since the very beginning.
Speaker 1:Yeah. We appreciate it.
Speaker 2:And excited to get the update on Flux. You guys have been, cooking, over the last, nine months or so.
Speaker 1:And without further ado, our next guest is in the restream waiting room. We'll bring Scott into the TVPN UltraDumb. How are you doing, Scott? Good to see you.
Speaker 6:Thanks for having me.
Speaker 1:Great job. Give us, give us an introduction on yourself and the company, and then we'll get into the news.
Speaker 6:Sure. I'm Scott Stephenson, cofounder and CEO here at Spellbook. We launched one of the first Gen AI products for lawyers back in the 2022 Mhmm. A little before ChatGeBT. We're an AI contract review tool.
Speaker 6:So we allow 4,000 law firm and, in house counsel teams to, draft and review contracts, with AI. My background is in engineering. My cofounder, Daniel, is the the lawyer of the team. And, yeah, we're based in Canada.
Speaker 1:Give us the news today.
Speaker 6:We've raised 50,000,000 led by Keith Urbaugh. Oh,
Speaker 1:yeah. Keith. He's a lawyer. Right?
Speaker 6:Did he Yeah. He he he
Speaker 1:He was a lawyer.
Speaker 6:He was a former lawyer. Yeah.
Speaker 1:He knows that. He doesn't love to admit it. Yes.
Speaker 2:What's it like, what's it like building a point solution these days? We've we've, I feel like this month that there's just been so many different announcements for for different legal AI tools. Some are are legacy platforms that are launching AI features and have a bunch of different workflows across the, the law firm. We had Crosby on, yesterday who's taking a different approach, obviously, building the actual the entire firm.
Speaker 1:And then we've got some other we we we had someone on the show last week who was building, you know, AI legal, but just in
Speaker 2:Ambulance chaser agents, basically.
Speaker 1:Yeah. Personal injury, which is a very small niche. When So I hear cursor for contracts, that makes sense, but it's like a different slice of the market. How'd you settle there? Why are you confident about that slice?
Speaker 6:Yeah. Sure. So I I guess there there's a couple questions there. Like, one, yeah, we we like being a point solution. So we think of our product often as, like, a toaster.
Speaker 6:Like, there's a lot of broad AI solutions for enterprise right now. From the beginning, we're like, we're gonna be a toaster for contract review. So really easy to use, really easy to adopt. You know, we don't even do a sales call most of the time. It's just like, welcome aboard.
Speaker 6:Let's let's get you using Spellbook in five minutes. I think there there's a bunch of advantages, and I think there's a lot of opportunity to build these kind of, I would say, like, point solution products. And there's a lot of very, like, broad AI solutions out there. Why we chose contracts specifically yeah. I mean, the story of how I started the company is I had a small business before this, and then one day I had a a legal bill that took, like, half the cash out of our bank account to do some, like, very minor things.
Speaker 6:I didn't have much cash. I was like a a new grad, but, you know, I I thought that it was hugely painful to just do, like, simple transactional work as a small business, and then I thought, you know, we could do it much more efficiently. But then the the reason we settle on contracts is because the the contract market size and and and the contract thing goes way beyond just lawyers. Like, 30,000,000,000,000 is estimated to flow through contracts in The US alone every year. It's happening very inefficiently.
Speaker 6:There's a lot of risks. There's a lot of litigation from bad contracting, which, you know, Keith used to clean up as a litigator. And, you know, when when you look at the actual overall size of OnTrak pain in not just for lawyers, but in procurement, in HR, in sales, that market size ends up being really, really big. Whereas if you if you just look at the market size of, you know, x number of lawyers times y dollars per month, It's actually a much smaller market than when you look at, like, the the overall pain of contracting. And, you know, I see, like, the the millions of transactions that happen around the globe every day and contracts often being the bottleneck.
Speaker 6:And, you know, what is it worth if we could speed up all those transactions if we could remove that bottleneck? I think so much of commerce over the last twenty years have sped has sped up. Like, we have credit card networks. We have, you know, we have Stripe. We have digital payroll.
Speaker 6:The contracts have largely remained the same except for Microsoft Word. And so they've become a bottleneck. So our our mission is to make contracts move at the speed of commerce so we can all transact and work together much more efficiently.
Speaker 2:How often is a lawyer or firm signing up for Spellbook when they have like when they're bringing basically like, hey, we we we have this contract that we're working through right now. We're trying to create or or provide feedback on. We wanna use Spellbook, like, this afternoon. Are you what's, like, the time to value between signing up and actually being able to leverage the product?
Speaker 6:Yeah. I mean, it's it's it's close to zero. And and that was our design philosophy from from day one is that a lawyer should be able to adopt this almost instantaneously. So, yeah, I mean, they they can adopt it in almost five minutes without having to do a big rollout or a ton of training and we've optimized almost the whole company with with that in mind. Yeah.
Speaker 2:And do I'm not nowadays, engineers at every software company have the ability to just sign up for tools themselves. Are law firms at that point yet where they have some amount of discretionary software budget that they can allocate as they see fit or they still or is it still maybe like, you know, Silicon Valley engineers in in the two thousands?
Speaker 6:It it depends on the segment. So 70% of lawyers work for small and mid sized law firms. So, when you envision lawyers, you usually think of big law, but actually 70% of lawyers are working at these much smaller firms where they actually have a lot of autonomy. They have access to a credit card. They might be one of the founding partners of the firm.
Speaker 6:So in that segment, yeah, it's very much you you can do self sign up. And then we also serve in house counsel teams. In on in house counsel teams, like, we have customers like Nestle and eBay. You know, the decision making power is still very concentrated. I think, like, with with Wiz, one of the reasons why they cited it it was such a great motion is because, you know, the the buying the decision making power for was, like, with the the CIO or chief security officer and, you know, they're sort of the technical buyer.
Speaker 6:They're also the user. They're also the check signer. Similar thing happens in these in house legal teams where there's often the GC who's the user, they're the check signer, they're like the sort of the the domain expert, and they're the champion all in one. So you still get these, I think, really fast buying cycles in these large enterprise in house legal teams as well. What
Speaker 2:does growth look like?
Speaker 6:We are growing very quickly. Yeah. So we launched.
Speaker 2:Let's give it up for very
Speaker 1:quick. Quickly. Quickly. Put in your Excel model.
Speaker 6:Yeah. We launched we we launched in 2022. We have 4,000 customers today. We're tripling this year. We're over tripling this year for sure.
Speaker 6:You know, hopefully even more.
Speaker 1:That's good.
Speaker 6:Yeah. It's been, it's been pretty wild. Yeah. I think yeah. Over the last two and a half years, I think we did something like 7000% growth, something like that.
Speaker 6:So, yeah, it's been it's been
Speaker 1:fast. To the right. That's been to the right.
Speaker 2:Well, congratulations. Yeah. Well, I'm sure we'll have you back on again soon for the sea. Have fun out there.
Speaker 1:Thanks very much for coming on the show. We'll talk you soon.
Speaker 2:On, Scott.
Speaker 1:Bye. If you're looking for cursor for billboards, head over to adquick.com. Advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 1:We are joined by George from Monk next.
Speaker 2:The Monk himself. Welcome to the show. VPL. George, what's happening?
Speaker 5:Hey, guys. How are you? Thanks for having me.
Speaker 2:Good to
Speaker 1:have off with an introduction. You launched the company. How are you, positioning, the value proposition, the business? How are you explaining the business these days?
Speaker 5:Yep. We're among.com. We help businesses save time and make money by solving invoices and collections, which now that I say this in the show kinda sounds like cramp.
Speaker 1:Yep. Wait. I what is the what is the typical collection process? Is that is this, like, just automated emails? Is that an important part of getting paid as a business?
Speaker 5:Yeah. It's a huge part. It's a huge part. I mean, most of it is email. Yeah.
Speaker 5:And and and up until now, it's all been, like, these very boring, dummy emails that get sent and then get ignored.
Speaker 1:Yeah.
Speaker 5:And then, like, statistically, a big piece of delays is just an error in these emails. It's like a tiny thing that we accept, but it's like a $3,000,000,000,000 problem. Right?
Speaker 2:Yep. What Super kind. What were the legacy solutions in the category? Why why start this business now? What was kind of the key unlock?
Speaker 2:When I when I saw the launch, made a lot of sense, but at the same time, you know, you you look at a business like this. I think every business owner can go to monk,youknow,.com and think, okay. I'm having these problems. This feels like, an elegant solution for it. But but, why was this not a solved problem yet?
Speaker 5:Yep. That's a good question. And it's it's a red ocean. Like, there's a ton of players before o l m, and now every person with a Wi Fi connection is gonna rip a competitor. It's it's
Speaker 2:Just diving into your real shark. It takes a real shark to dive into
Speaker 1:your red ocean. I appreciate this. This is much better. It's true. We're the only person that thought of this.
Speaker 5:Cap you know, capitalism is is inevitable. Yeah. You know, a few things. A, the selling into the office of the CFO changed twice since the ZERP. Sure.
Speaker 5:So, like, a, there was ZERP and, like, it was super frothy. And then and then and so and then and then there's a lot more financial rigor. And then now with post LLM, there's just a lot more appetite to experiment. So, like, I think the the GTM motion got easier, and then the onus on the CFO or, like, the business leader, even the founder, the solo founder get, like, a lot a lot harder. Like, they have to do a lot more with less.
Speaker 5:And then b, like, when Sim Altman and Satya compete and they pour billions in CapEx and OpEx and r and d, we at the AppLayer just get to rip that into advantages. And so, like, we are applying LLMs in three parts of this workflow, and it just works. And, like, every every week that they improve, we improve before obviously not possible.
Speaker 1:How'd you get monk.com? That's a great domain. What's the story?
Speaker 5:Won another poker game.
Speaker 2:You wanted a pro game.
Speaker 1:You're a pro poker player. Right?
Speaker 5:No. I'm kidding. I'm kidding. I bought it. I bought it.
Speaker 1:Oh, okay. You bought it. But you made money in poker, and then so you paid for it. So you kinda wanted a poker game. I like that.
Speaker 5:Kind of wanted a poker game, kind of a shield, and BTV gave me some money. Okay. It we used to be called Atlas because I think Greek philosophy is school and I thought, you know, a science function like holds up the the world. But then there's like 50 Atlases.
Speaker 1:Oh, sure. Sure. Yeah. Stripe Atlas. There's a bunch of other
Speaker 2:makes Crazy. Makes poker players so elite at at the sport of business? Yeah. I know a buddy of mine still plays like pro pro am, pro Because pro poker.
Speaker 1:He started This is basically degenerate gambling. Professionalized. Just kidding.
Speaker 5:But, I mean, don't you think you can sort of, like, cross supply from I mean, you run a business, and now you run a very popular show. You just cross supply. Like, a lot of the same principles govern all these domains. Right?
Speaker 1:Yeah. Totally. Totally. Mean, this is this founder bluffing, or will they come on the show? Will they come answer hard questions in the TBP ultra ultra dumb?
Speaker 1:Will they have a poker face on?
Speaker 5:Expected values thinking, you know, risk, discipline, etcetera, etcetera, etcetera.
Speaker 1:Totally. Totally. Awesome. Take take us through the round real quick. What happened?
Speaker 5:You mean, like, money?
Speaker 1:Yeah. The money. Gong. How much From
Speaker 2:who? Greenbacks.
Speaker 5:Or led by Sheila and Neehar on BTV. Yes.
Speaker 6:Thank you. Thank you. Thank you.
Speaker 1:We love Sheila. Is this from his new fund? He he came on the show just like a week ago. He's already deploying, ripping checks. Or maybe you were the last one in fund two.
Speaker 5:I don't know. I think I'm the last one in fund two.
Speaker 2:Okay. They're very good. Too.
Speaker 1:Okay. Well
Speaker 5:GTM fund and V Rail also helped, but he has Sheila and Yee Harled.
Speaker 1:Very cool. And tell us about the last company. Super interested.
Speaker 5:The last company
Speaker 1:Streamlabs?
Speaker 5:The one. Oh, Streamlabs. Yeah. Yeah. Yeah.
Speaker 5:It's a It's story. Yeah. It's a big business. It's a creator economy business. Yeah.
Speaker 5:It's like we're a big developer for Twitch and YouTube. So, like, if you're a content creator and you livestream on Twitch, YouTube or, like, back then when Facebook was Facebook Yeah. We're using our tools.
Speaker 1:Yeah.
Speaker 5:So livestreaming, patronage, moderation, etcetera, etcetera, etcetera.
Speaker 1:Mhmm.
Speaker 5:And we sold because we're a developer, and, like, Twitch was just ripping our road map, which
Speaker 6:is fine. Like
Speaker 1:yeah. Yeah. Who'd you sell to?
Speaker 5:Logitech.
Speaker 2:Okay. Logitech. There you go. Awesome. Well Logitech.
Speaker 2:For Congratulations on the raise. And, yeah, it seems like there's quite a lot of demand, so good luck keeping up with it.
Speaker 5:Yeah. Awesome. Thanks for the support.
Speaker 1:We'll talk to
Speaker 2:you Our
Speaker 1:next guest is in the Restream waiting room. But first, let me tell you about Wander. Find your happy place. Book a Wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home but better.
Speaker 1:We have Zach from meanwhile coming in to the TVP and Ultradome. Zach, how
Speaker 2:are you doing? He is. Welcome.
Speaker 8:Great. Happy to be here.
Speaker 2:Great to have you.
Speaker 1:Please kick us off with an introduction on yourself and the company. We'd love to learn something.
Speaker 8:Yeah. My name is Zach. I'm a long time fintech entrepreneur. I've built Meanwhile. Meanwhile is the world's first Bitcoin life insurance company, but our intention is to build the world's largest life insurance company.
Speaker 1:How does Bitcoin life insurance fit together? How's the normal life insurance market work? How is this different? Walk me through just the like one step deeper in the thesis or the product.
Speaker 8:Yeah. So the normal life insurance market, you know, this is about 3% of global GDP. You've probably never talked about it once on the show, but it is gigantic. Yeah. It is not just life insurance, it's about retirement savings, it's about, you know, protecting your family when you die.
Speaker 8:But what also happens to your family when you live longer than you're supposed to, that's deferred annuities, it's insurance bonds, it's all sorts of saving products. It's a huge huge market. It is completely untouched by technology. And the reason it's untouched by technology is because you need to be big for technology to matter. So that is why you have a bunch of companies who have like built marketing engines on top of the global life insurance ecosystem.
Speaker 8:What we've done is we have built a full stack vertically integrated life insurance company in Bermuda. It just happens to entirely be denominated in Bitcoin. And what that means practically is if you want to save for the long term, you can now do it in Bitcoin. Mhmm. And there are tax advantages and there's a state and, you know, tax planning reasons to do that.
Speaker 8:But fundamentally, what we see is that if I bought a life insurance policy in 2018 when my son was born, I've seen the purchasing power of that dollar policy go down 25, 30%. Whereas if I had done that in Bitcoin, I've seen the purchasing power go up hundreds of percent. And we wanna bring that not just to everyone in America, but if you're a middle class person in Argentina, you don't save for your retirement because you were gonna live longer than the Argentinian peso. Yeah. So that person should save in Bitcoin.
Speaker 1:Okay. So you want a million dollar life insurance plan to
Speaker 2:Yeah. Walk us through the actual
Speaker 1:10 bitcoins by paying in Bitcoin because Yes. Most people think about their life insurance policies. Okay. It's gonna be a $100 a month. I have a job.
Speaker 1:I can pay that. If it's in Bitcoin, it goes up, and then all of a sudden I can't make the payments. Like Yeah. How does all that flow?
Speaker 8:Yeah. So the current product that we do direct to consumer, but this round's actually about all this other stuff we do, is is called whole life. So it lasts your whole life. It's very well named. You in our case, you might pay I'm gonna use big round numbers.
Speaker 8:You might pay 1 Bitcoin a year for ten years.
Speaker 1:Okay.
Speaker 8:So you've paid us 10 Bitcoin. Yep. And then whenever you die, you get 15 Bitcoin.
Speaker 1:Okay.
Speaker 8:But yes, you're absolutely right. In a way, you're short Bitcoin, so I suggest do not buy a policy bigger than your existing amount of Bitcoin.
Speaker 2:Interesting. What you mentioned some you you've just raised 82,000,000, so we should acknowledge that.
Speaker 8:$82,000,000.
Speaker 4:That's it.
Speaker 2:Baines, Apollo, Northwestern Mutual, that's big, Han Ventures, and, Pantera, a couple others. What what was the catalyst for this round? What are you working on outside of the direct to consumer product that you just mentioned?
Speaker 8:Yeah. So actually, we raised a series a in February that was $40,000,000
Speaker 2:There we
Speaker 8:Framework and Folger and Wences. Okay. And what happened after that round is that a ton of the largest life insurance and retirement companies in the world approached us and asked us if we could work with them to bring these products to their markets. If we could help them do indexed annuities, indexed life insurance that had exposure to Bitcoin. And that is how this $82,000,000 round came about, is that Han and Bankcap Crypto in particular, they had sort of been hovering around.
Speaker 8:They reached out to us in the summer. They said, you're one of the most important companies and going to be one of the most important companies in crypto. Can we invest? And I said, for a large enough check, you
Speaker 2:can do it. I love the love the honesty. What what is it about give give us the lore Bermuda lore. I've only been there on vacation, but
Speaker 1:it's been American to me, but I'll let you defend it.
Speaker 2:Well, it's it's a it's it's long been a a sort of, you know, financial hub and has like some deep history and ties between, you know, tradition, you know, Wall Street and and Bermuda.
Speaker 1:You're not winning me over. It's not in America.
Speaker 8:Yeah. So the fundamental history is that Bermuda used to be a tourist destination when you had to get on a boat to go to your vacation spot. And once there was an airplane, you're like, I'm gonna go to The Bahamas or I'm gonna go to Jamaica. Bermuda is actually like way out in the middle of nowhere in the ocean and it's just not as hot as you'd like. Right?
Speaker 8:So
Speaker 1:And it's
Speaker 2:the Bermuda Bermuda Triangle out there.
Speaker 8:Bermuda Triangle. You know, not not a great history on boats. So basically, they had some really enterprising people in the fifties and the nineteen fifties and sixties who decided to make it an offshore financial Hub. And now it is like the insurance capital of the world. So I'm surprised you went there on vacation because there is about as many actuaries, lawyers and accountants on Bermuda as there are Bermudians.
Speaker 8:Wow. You walk around and it's like Munich Re, Chubb, Swiss Re. It's like huge financial institutions and I guess the next huge financial institution there is gonna be Meanwhile.
Speaker 1:Congratulations. That is That's amazing. Is the Bermuda Triangle fake news or are you taking a wild route when you go there? Are you avoiding that?
Speaker 8:I'm gonna call it fake news, but they're actually Bermuda has this really crazy history. They did a lot of things. They, like, ran a ruthless assault monopoly over the Caribbean. They were, like, gunrunners in the civil war. They had ran a penal colony.
Speaker 8:They
Speaker 2:They're like, why not finance?
Speaker 8:Have found ways to be innovative for hundreds of years.
Speaker 1:So if so if me and you are flying in a Cessna to Bermuda, you're not telling me to fly around
Speaker 8:the triangle.
Speaker 1:Only say fly right through the through the triangle?
Speaker 8:That's right. I've only been there on commercial jets.
Speaker 1:I like it.
Speaker 8:So I'm not prepared to support the Cessna plan. But
Speaker 1:But you're fearless, generally, around the triangle.
Speaker 8:Generally fearless.
Speaker 1:That's great to hear.
Speaker 8:That's what it takes to take on a $3,000,000,000,000 industry.
Speaker 1:I like it. I like it. You shouldn't be afraid of the triangle. You shouldn't be afraid
Speaker 2:How are you
Speaker 1:financial markets.
Speaker 2:How are you innovating on the direct like, actual experience? I got a like I got life insurance through my neighbor who happened to be an agent. It was kind of this weird, you know, it's it's it's not a, it's not a didn't feel like the most seamless digitally native process. So there's also I think a lot that you can do on on the actual
Speaker 8:Yeah. Fundamentally, look, we wanna do with a thousand people what Alliance does with a 100,000 people. Our we didn't mention it, but Sam Altman actually led our seed round and our pitch to Sam was this is a once in a century opportunity that we can use digital money in the form of Bitcoin and stable coins to reach billions of people with these savings products, and then we can use AI and automation to serve them profitably. So we have built everything from the ground up. We are a fully vertically integrated life insurer.
Speaker 8:So, yeah, the the experience of filling out the application is quite seamless. People can get underwritten and we can close policies in a single day. We do all our actual we close our books. This sounds so boring. But we close our books in like two and a half hours at the quarter end.
Speaker 8:Most insurance companies we're talking like forty five days. Wow. But we do all of that. Like we have our chief risk officer, we have an enterprise risk manager, we have all this boring stuff. But because we built it, you know, feature by feature, step by step, system by system, we are building a durable advantage in the life insurance space.
Speaker 1:Fantastic. Well, congratulations on the progress. Hope to back in Bermuda one day. Have a great rest of your day. We'll talk
Speaker 8:a little about host a show there sometime if you'd like, gentlemen.
Speaker 1:Sounds wonderful. Awesome Bermuda shorts.
Speaker 2:Thanks for joining.
Speaker 1:Have a great rest
Speaker 2:of your day. Progress.
Speaker 1:Speaking of life insurance, Dylan Patel over at Semi Analysis says life insurance in Taiwan is delaying NVIDIA's expansion in Taiwan. Remember, Sam Roman was talking to Ben Thompson just earlier this week about wanting TSMC to ramp up. He obviously wants more chip production. And so seminalysis tells the story. They say, at Computex this May, NVIDIA announced plans to establish its constellation headquarters in Taiwan.
Speaker 1:However, the project now faces uncertainty. The proposed site for the Taiwan headquarters was the t 17 and t 18 plots in the Bai Tuchilin Technology Park. NVIDIA had signed a memorandum of understanding, an MOU, with the this life insurance company, a Taiwanese company with total assets exceeding a $100,000,000,000 USD, but the MOU expired on September 30 and is no longer valid. The key obstacles are as follows. Shin Kong Life completed the registration of building rights for the T 17 and t 18 plots in February 2022, securing a fifty year leasehold.
Speaker 1:Xinqong expressed willingness to directly transfer the rights of T 17 and T 18 to NVIDIA. However, the Taipei city government opposed this arguing that Xinqong must first construct the buildings and obtain an occupancy permit before transferring the rights. The government is concerned that if Xinqang gains additional benefits from NVIDIA through a direct transfer, that may be seen as favoritism. So furthermore, NVIDIA requested the that the road between the two plots be incorporated into the site. They want the road as well, not just the buildings, and that would require changes to the urban planning regulations, and it would increase the value of the land rights and, again, the concern of favoritism.
Speaker 1:So Xinqong proposed constructing the headquarters for NVIDIA and transferring it afterwards, but NVIDIA said no. NVIDIA wants full control over the design and construction of its headquarters. You gotta get a nice corner office for the big man who knows what Shing Kong's gonna do if you let them
Speaker 2:build closet for leather jacket.
Speaker 1:Yes. A massive walk in closet that makes a
Speaker 2:Entirely the same
Speaker 1:leather jacket. Lots of leather jackets, and the jackets come flying out of every every possible closet. The Taipei city government suggested terminating the existing contract and signing a new one directly with Nvidia. Xinqang opposed this, citing its fifty year leasehold and expected rental income. The city's proposal did not account for Xinqang's anticipated future revenue.
Speaker 1:Regarding rumors that Nvidia may abandon its Taiwan HQ plans and move to India, semi analysis is is has the following view. Taiwan's supply chain remains more concentrated and efficient than any of the other countries. And with the MOU expired, NVIDIA is free to seek alternative locations or quit the site entirely. Therefore, we believe NVIDIA will not give up on establishing its headquarters in Taiwan. That's where they want to be.
Speaker 1:The city government is reportedly leaping toward persuading NVIDIA to give up sites t seventeen and eighteen instead and instead accept a different site, T12, along with surrounding private land. Discussions with NVIDIA are expected soon. They believe the likelihood of NVIDIA accepting the T12 proposal is low as the site is similar and surrounding private land involves many owners, which would drive up costs. So NVIDIA is duking it out with life insurance provider in in Taiwan. Other
Speaker 2:news Jensen. REI announced it's shuttering its Soho flagship. It's also closing flagships in Paramus, New Jersey, and Boston. Mhmm. Its shores will shut down in late twenty twenty six.
Speaker 2:Also, OpenAI is opening an office, in the same building. Wait. Really? The Soho flagship. No.
Speaker 2:Think Michael, Mirafloor was was saying that on X, something about that being like very symbolic. Symbolic. I have a lot of happy memories of of being in visiting REIs as a kid.
Speaker 1:It was
Speaker 2:a wonderful wonderful place. So hopefully hopefully this isn't a sign that it's so over and hopefully someday soon we can be so back.
Speaker 5:Yes.
Speaker 2:I did wanna close out. There's the Figure three robot
Speaker 1:Okay.
Speaker 2:Released today. Have a video We should pull up the video.
Speaker 1:I'd also like to pull up the video of Mark Zuckerberg talking about the barbecue because isn't isn't it the anniversary of that video at some point? Let's watch those two videos and then we'll get out of here. But first
Speaker 2:While you pull it up?
Speaker 1:Yeah.
Speaker 2:Apparently, so Mark Cuban went in Sora Yes. And said free free for all with his likeness.
Speaker 1:I went free for all But as
Speaker 2:he did something
Speaker 1:What did
Speaker 2:he that was even smarter than you, which you prompted it to always depict you as a bodybuilder. Cuban added a tag somehow that says brought to you by cost plus drugs.
Speaker 1:I was gonna do that with the ramp logo on my forehead. He did
Speaker 2:That's amazing. And it looks It works? Yeah. It works. Very funny.
Speaker 2:Dylan Clever. Posted a couple screenshots.
Speaker 1:Very clever. Okay. Let's watch this video. Thank you for pulling this up. We were just talking about humanoid robots with Martin Casado from a '16 z.
Speaker 1:Nobody trying does to do it.
Speaker 2:Nobody does videos like Figure. Gotta give him credit for that.
Speaker 1:Launch videos. Where this is the third. So this is version three, but they're still in alpha, and they haven't they haven't shipped these? Or installed some into a demo plant with BMW. Right?
Speaker 1:But So
Speaker 2:what's notable here is they're not the I I I scanned the video. I don't think there's any they're not just depicting it in a factory setting at all. Okay. Seems like this is a pivot away from
Speaker 1:Going more consumer. Commercial. Which was one of my questions for Martine. What do you think, Tyler?
Speaker 3:Right at the end of the video, it's in a factory.
Speaker 1:Oh, it's in a factory at the end?
Speaker 2:And the other thing here that's notable, they It's like pretty followed one x robots
Speaker 1:That's doing
Speaker 2:the fabric covering.
Speaker 1:Fabric looks way better, I think, than the hard metal. It just looks yeah. Looks I
Speaker 2:can see why
Speaker 1:Oh, there there's a house. Okay.
Speaker 2:I can see why the retail army just loves figure.
Speaker 1:It's not a it's not a retail army. We're seeing the emergence of a new army, the private market's retail market.
Speaker 2:Retail army.
Speaker 1:We need a new word for it. It's not it's not retail necessarily if it's private, but, people have been pumping for
Speaker 2:their own line. It's a special purpose vehicle army.
Speaker 1:People have been asking questions about how much pumping is going on on the timeline, and whether it's too much. But, I mean, it's a great video.
Speaker 2:$39,000,000,000 company, John.
Speaker 1:Is it still?
Speaker 2:Wow. Still. Yes.
Speaker 1:That's remarkable. Hey. Look. Bad dog. That was an opportunity to make that a robotic dog.
Speaker 1:It is interesting that they're not they're only focused for, you know, straight shot to humanoid robot. No Boston Dynamics project. No no four legged friend first. A lot of the other robotics companies have kinda taken a more incremental, like, prog progress.
Speaker 2:Do you think they trained on Biden's? It
Speaker 1:does it does seem like an the the walk of an elderly man.
Speaker 2:But it's a start.
Speaker 1:It's not. It's not. Yeah. I mean, the Boston Dynamics demos are always, like, way more agile. And and same with the unitary demo.
Speaker 2:So question here really that
Speaker 1:for the flipping it now. The in
Speaker 2:home space is gonna come down to, one, how effective is it? Right? If we both have kids, kids tend to destroy the living room. Yep.
Speaker 1:Create a lot of chaos.
Speaker 2:Bed. You gotta clean it up and stuff.
Speaker 1:But humanoids should be able to clean it up, you'd think.
Speaker 2:The question is
Speaker 1:Maybe it's a little slower.
Speaker 2:How effective and what's the cost? Are Are people going to buy Yeah. If can they come in anywhere near Unit 3 at 20 k for a comparable robot? Yeah. Seemed unlikely.
Speaker 1:The big the big debate here is just how how much does this stuff generalize? Because, I mean, we've seen in all sorts of other AI applications, like, it's simple to RL on one certain, you know, one certain problem and get really good at it, but then does that learning generalize? And so you can have a model that's fantastic at IMO level math but can't but can't complete Arc AGI, which is so simple that a 10 year old can do it.
Speaker 2:It's doing dishes?
Speaker 1:And so, you know, if it's if it's trained to be really good at this one dish with this one with this one faucet system, can it generalize to your faucet system? Or or when will that generalization happen? It certainly happened in LLMs, so you would hope that it happens in humanoid robotics very quickly. It's it's an interesting time.
Speaker 2:Brett shared that none of this is teleoperated.
Speaker 1:Okay. Yeah. None of this is teleoperated.
Speaker 2:Which I still think tele even a teleoperated humanoid would be very cool. That would be
Speaker 1:Yeah. I mean, you're still paying by the hour more than just power. There there is something that's very important economically about getting away from teleoperation over the long term. But I don't see a problem with teleoperation as a as a data flywheel, as a way to actually get these into people's homes. You're teleoperating them.
Speaker 1:You're collecting more feedback and data, and you can train that and roll that into reinforcement learning. I do yeah. The the the the the question is, like, did he comment on whether or not this is scripted? Because it could be recorded motion. Right?
Speaker 1:Because that would not be teleoperated. It would be running on the robot locally, but it could have been, you know, teleoperated at one point and then memorized and then and then, you know, played back effectively? Like, is this there's a big question about, like, how long has this robot been in this particular
Speaker 2:Figure.
Speaker 1:Environment.
Speaker 2:Yeah. For Figure to develop, like, legitimacy within, like, our bubble. Yep. Like, people are gonna need to be able to do some type of live demo setting where they can be in the house with it, they can task it with doing things that aren't necessarily preplanned. Right?
Speaker 1:Yeah. There's something about, like, with the other AI companies in the LLM world, like, the models go out, the APIs are available, the benchmarks are
Speaker 2:Because if if you can just walk into a room with a figure robot dump a bunch of laundry on the bed and it just folds it and puts it away Yep. That is gonna be mind blowing. Yeah. But I don't know how how
Speaker 1:I mean, to be fair, Noam Brown, I think at OpenAI was was saying like, okay. Like, this is a nice example of the robot folding laundry at a table. What happens if you raise the height of the table six inches? And Brett Oddcock raised the height of the table six inches and posted another video and said it still works. It still works.
Speaker 1:So he is he is duking it out on the timeline.
Speaker 2:Is more commercial setting. Yeah. Delivery robot. They had it at the opening of a hotel.
Speaker 1:I wonder I wonder what makes it so much slower than the the Boston Dynamics example. Like, it feels in some ways more advanced than what Boston Dynamics does. Certainly, the demos here are more generalizable. Like, I haven't seen a video of a Boston Dynamics robot doing any of these, like, useful tasks. It's always just, like, dancing and doing parkour, which doesn't seem very commercially viable.
Speaker 1:But but the Boston Dynamics, like, the actual motion just feels so much smoother and so much more fluid. And same thing with the unitary robots. So the room the unitary robots, you kick them over, and it does a three sixty to jump back up. That doesn't feel very economically useful like folding laundry or Yeah. Delivering packages.
Speaker 1:And but it's certainly impressive.
Speaker 2:Responded and said, I have so many questions. I wonder Who did think long how long do you think until MKBHD can can He's a review of figure out.
Speaker 1:Review of the Boston Dynamics dog that he got one. I think he might have even paid for himself and, like, been able to play really play around with it and really put it through its paces, and I love that. I I would love for him to do a proper review on a on a figure robot. That would be very cool. There was something else that was that was top of mind on the the MKBHD thing.
Speaker 1:Oh, yeah. Did you see that? Somebody posted their product, and MKBHD responded with a meme that said, like, interesting, and it was like a funny just GIF or image. And the company took the text out of the, out of the meme and put it in quotes on their website and attributed to MKBHD. It was like he said it looks interesting.
Speaker 1:And it was, like, a meme that he sent. And then MKBHD was like, this is ridiculous. Like, I didn't give you a quote. Like, you can't just use me on your website. And the founder of the company was like, oh, well, we also emailed with your team, and they said, like, it looks interesting.
Speaker 1:Like, we'd love to, you know, like like, hear more about it. And then they took that as an example. It's like, that's not quite the same as like
Speaker 2:We'd love to hear more about it.
Speaker 1:Yeah. Yeah. It's like, were just being nice.
Speaker 2:Chat right now, it's AV says it's slow for dramatic effect.
Speaker 1:It's actually moving it five
Speaker 2:times the speed. But they
Speaker 1:filmed it with the slow motion camera. They they filmed it with a slow motion camera to make it look more sci fi and cinematic for sure.
Speaker 2:Love that. But anyway Anyways, it's a long run. No more information on on when when it'll be available for But I'm sure somebody at the right point will pit the I mean, the first thing somebody's gonna do is pit the Dimitri g one against a figure and just make them compete in a variety of contests. Yeah. Looking forward to that.
Speaker 1:I mean, Christopher Mims has a whole deep dive on America's manufacturing resurgence and the robots that are doing that. More focused on cobots, which we've talked to some companies around, less on the humanoid side. But it's a it's a fascinating deep dive if you wanna go check that out. Maybe we'll cover it on the show at some point. That'd great.
Speaker 5:Is there
Speaker 1:anything else you wanna react to?
Speaker 2:That's it. Okay. That's it. Let's We can react to this iconic Let's video. Let's head out.
Speaker 2:Let's head out. On this day.
Speaker 1:Friend of the show, Mark Zuckerberg, TV PM.
Speaker 2:Hey, everyone. We are live from my backyard where I am
Speaker 1:See smoking Imagine Andy Jassy doing this on Twitch. It would be so much better here. Than another conference call for earnings.
Speaker 2:It's smoking. So
Speaker 1:Is this the edit where they just show the smoking meats?
Speaker 2:Yeah. Someone asked me, do I smoke meat? Smoking meat.
Speaker 1:They this is
Speaker 6:this is the least shared lesson.
Speaker 1:You could edit yeah. I saw lesson. You you could edit any video. You could edit us to look like idiots too if you took our fifteen hours a week of content and Smoke a dialed it down to all the times we say something silly.
Speaker 2:Smoke up. Like smoking.
Speaker 1:Thank went so much farther. He has his own cattle ranch. He didn't he vertically integrated his meat smoking operation. So cheers to Mark Zuckerberg.
Speaker 2:Thank you for tuning in today. We hope you have a fantastic afternoon and evening wherever you are in the world. Yeah. And we will see you tomorrow. Here And wait
Speaker 1:here in my garage.
Speaker 2:Sam, I'll
Speaker 1:do this.
Speaker 2:Live on TBPN, noon Pacific.
Speaker 1:Tune in.
Speaker 2:We'll see then.
Speaker 1:See you tomorrow. Goodbye.