Big Technology Podcast - Predicting the SpaceX, OpenAI, and Anthropic IPOs — With Dick Costolo

Episode Date: May 27, 2026

Dick Costolo is the ex-CEO of Twitter and managing partner at 01 Advisors. Costolo joins Big Technology Podcast to look ahead to the SpaceX, OpenAI, and Anthropic IPOs, looking at whether the offerings will be successful, who should go first, how the companies differ, and where the capital will come from. Tune in for the second half where we discuss the state of Meta, Costolo's Twitter memories, and Silicon Valley's 'Permanent Underclass.' Tune in for a fun, in-depth discussion of the most important pending business event in decades. Learn more about your ad choices. Visit megaphone.fm/adchoices

We are headed towards the most epic run of IPOs of all time, with SpaceX, Anthropic, and Open AI all coming out within the next calendar year. What's going to happen? Let's ask the man that took Twitter public right after this. I'm just back from ServiceNow's Knowledge 2026 in Las Vegas, and the conversations I had there are ones you're going to want to hear. I sat down with their president and CPO Amit Zaveri on the platform strategy powering enterprise AI, chief people and AI enablement officer Jackie Canney,

and Chief Digital Information Officer Kelly Romack on what AI really means for the workforce. The technical leaders behind ServiceNow's Nvidia partnership on shipping AI at scale and Alta Beauty on deploying ServiceNow's technology across 1,300 stores. If you want to know where Enterprise AI is actually headed, not the hype, but the real story, you can find these videos on my YouTube channel. Search Alex Cantrellwitz on YouTube. Depending on who you ask, between 80 and 95% of Enterprise AI projects fail. To get AI to work for you, you don't need more tokens.

You need better people. A board pairs powerful proprietary tools with senior engineers who've seen it all. That combination means your project doesn't stall, doesn't drift, and doesn't fall. It ships. Whether you're a startup that needs to get to market or an enterprise with complex legacy challenges, a board delivers exactly what your business needs fast. Aboard is your partner for AI transformation. Visit abord.com and let's build something together.

Welcome to Big Technology Podcast, a show for cool-headed. and nuanced conversation of the tech world and beyond. Today we're joined by Dick Costolo. He is the former CEO of Twitter who took the company public in 2013. He's also a partner at 01 Advisors and one of the members of a new podcast, the Nick, Dick and Paul Show. Dick, great to see you. It's great to see you.

For clarity, I'm Dick and the Nick, Dick, and Paul show. It's good to know that. It's good to have that clarity. Just clear things up from the beginning. Thank you for establishing that. It's very interesting time that we're about to head into. We are in, right? But in terms of the financial markets, three major IPOs are on the way. SpaceX, OpenAI, and Anthropic could all come within, who knows, maybe even the next six months, which is crazy to think of. You were the CEO that brought Twitter public. And in fact, I showed up to San Francisco in May 2015. I got one week in, and then we can. two, you step down as Twitter CEO. That's right. That's right. And then away we went. So it's good to be, we actually spoke

the morning after. We're going to talk about Twitter in a bit, but you're somebody who knows not only about the going public process, but how important I think the messages when you go to, when you go public, how important that message is for what the rest of your company lifetime is going to look like. And how you're communicating with your own team and company about it inside the company because interesting thing about an IPO for many company, but particularly for tech companies and particularly in a bull market, is there's the time before the IPO where you raise your Series B and you were valued a billion dollars. And that's what the stock price is and what the valuation of the company is until 18 months later, whenever, and you raise your Series C

and now you're valued at $2 billion. And so there's not really any concern about, you know, stock price. If you're in a fast-growing company before the IPO, you're like, oh, my options are priced at a dollar, and now the stock's $2. My options are price of $2, and now the stock's $3. It's just kind of this, it's all kind of fine, you know? And then you go and think about not just Twitter in 2013, but more recent examples like what Dylan Field had to deal with, I'm sure, at Figma and Cerebris now dealing with as well. You know, it took us, you know, seven years, six year, seven years to get to the price of, you know, $30 a share. And then one day it went to $110 a share. And then, you know, two months later, it's back down to $40. So there's a roller coaster.

Becomes this, you go from, yeah, whatever, it's not something you think about having to reinforce with the team or talk about with the team regularly to whiplash and, you know, what happened and why is the, So my advice to people who haven't taken a company public before and are about to do it is you need to prep the team for, hey, we're about to go into a world where the price of the stock can change even though nothing particularly happened today. Like the stock can go up by 15, 20 percent in value based on nothing or down 15, 20 percent. I think the public underrates how turbulent that could be inside the company. And this is kind of what I was getting at. The early days are really important in terms of the way that that turbulence actually lives out in your time on the public markets. So let me just make the distinction between the private markets where, you know, the numbers matter to a degree.

Of course. But they're not the ground truth, right? A lot of it is feeling and potential. You go public, those numbers matter a lot. You have to report quarterly. Yeah. For now. We'll see if that has to see.

We can talk about it, right? So there's conversations that it might be once a half, but you have to report quarterly. And ultimately, even if you're not showing profitability in the early years, investors who... You need to show a path toward it. And investors who bought in on the IPO promise, they need to see that promise lived out. Of course. What our future cash flow is going to look like? Exactly. I remember before, a year before we went public, I was at a summit at GE, General Electric. And I was on stage with Jeffrey O'Melt, the CEO. And he asked me, you know, how do you think about how you're going to manage, your investors, once you're a public company. I said, well, we're just going to continue to focus on the long term like we have now. And everyone in the audience laughed, you know, like, good luck, you know, let us know how that goes. Once's your public company, when all the, you know, cell site analysts are asking you every two days what the next quarter numbers look like.

No, you're right. And so, look, I'll tell you what I remember covering, because I was a Twitter beat reporter for a while. And what I remember covering, because I would go on CNBC and talk about Twitter earnings. And I would always look back to the sort of the messaging at the Twitter IP Yeah. And now I'll caveat it. Well, no, I won't even caveat. I'll talk about it. What you said was, look, we see a path that this is a global service.

We'll get a billion users. And what's the thing that dogged Twitter every quarter? Yeah. It's like, you know, 200, 250, 300 million monthly active users. Yeah, yeah, yeah. But I bought in at this promise that there's going to be a billion users. We're going to get to a billion. Now, this was why I was going to caveat, but now I'm going to sort of talk about the fact.

We could even have beat. top line and EBITDA and grown, you know, bottom line more than we said we were going to grow it. But if we missed an MAU number, this would be down. Exactly. And we could miss top line. I mean, we only missed top line one quarter by like 1%. But that quarter, MAU were up over consensus and the stock went up and by a little amount. Yeah.

And so here's this is the point that I was going to bring to it, which is the hype that you came out of the door with. Twitter, you know, is basically going to be nothing compared to the hype that we're going to see SpaceX OpenAI and Anthropic come out with. I mean, talk a little bit about what it's going to look like when these companies hit the public markets and then start reporting these quarterly earnings. And SpaceX might come out $1.5, $2 trillion, open AI, anthropic, certainly trillion each, at least. Yeah. This seems like it's there, they have obviously the potential to change software. We talk about that all the time, change tech. But until they do, they're going to be sort of measured against the expectations they set. And that could be a very

rough road on the public markets for a while. 100%. However, I think you've got three very different personalities and stories associated with each company. And let me just say what I mean by that. Elon has the benefit of already knowing what this is like. And like him or, you know, like his, the way he runs his companies or not like the way he runs his companies, he does a great job of the narrative of, yeah, yeah, yeah, this is what's going on right now. But let me tell you about what's coming. I mean, look at Tesla. You know, they can hit or miss delivery numbers and they can have 37, you know,

63 robotexies on the road in Austin versus the year ago number of a million, estimated a million. But the narrative is, yeah, but this is where we're really going. And he's just out ahead of it with the public market and the retail investors and his fans and even the analysts and the sell side analysts and the people who run hedge funds. So I think with Elon, even though the initial valuation of SpaceX is a public company, if you mapped it to the amount of stuff they have to launch into space and make productive is going to be like, wait a minute, the math doesn't, that math doesn't foot. I mean, forget Mars. They're going to have to get to Neptune to justify the valuation.

And build it and build it. He just does such an expert job of, yeah, yeah, yeah, yeah, yeah. But if you play this out 10 years and I think he'll be, I think that, so I think he'll be actually fine, even though there will be the people that are like, look, these numbers just don't make any sense compared to, you know, Starling has to grow up this crazy amount over the next 10 years for this to make any sense. Right.

Okay. Before we move to OpenAI, okay. How much money in the market is there in this belief that Elon will figure it out? Because, so you have Tesla, right? So you have Tesla and there's this belief that he'll figure out robotics. And then you have SpaceX with this belief that, I don't know, he'll figure out space. I think SpaceX, I am one of the people that believe SpaceX will buy Tesla. Right.

And so Tesla's $1.29 trillion. Yeah. It's, I get, I don't know, maybe I'm misreading the market, but I get like a trillion-dollar company on belief of Elon. But then if he buys Tesla, we're talking about a $3 trillion company. Fair. In the belief that Elon will figure it out, is that possible? I think based, so again, what? When SpaceX goes public and I think it'll actually, you could, it could end up being worth over $2 trillion on day one.

Whether that's a fake price or not, and, you know, three days later it's something else, people are going to, there's so little float. My understanding is there's so little float. And the float is, you know, how many shares are being issued, et cetera, as a percentage of the overall number of shares of SpaceX. And there's going to be so much demand that the day one price is going to go to some. insane number. And where it foots out, I don't think is, I don't know. I just think that his ability to frame a narrative on a small float, you know, he doesn't need, he doesn't need, for example, you know, a bunch of sovereigns to come in and put 400 billion each into the company. He just does, you know, 30 billion each into the company. He just doesn't. So he's been able to

sustain that retail narrative with Tesla. And I think it'll continue for some time with SpaceX. We'll see how long that lasts, but I do think he'll be able to do it. Okay. What is the narrative before we move to Open AI? What is the narrative? I mean, it's just going to be, Starlink is going to be, Starlink is going to be power all, you know,

all internet connectivity. So it's a Starlink story. It's a Starlink story and then I'm sure it'll be data data center of space, which Sam has and on our podcast we've talked about it's a long, long way off from being true. I think data center in space is actually like full self-driving.

If you remember, Elon in 2013 said, you know, maybe it's 2014. By next year, your Tesla will be able to back out of the garage, drive you to work, pull into the garage at work, navigate downtown, all without you ever touching the steering wheel. He eventually was kind of right, you know, he was just like 11, 12, 13 years off. The data centers in space thing is the same thing. The amount of the acreage of cooling. you know, systems, you would need to launch into space right now.

Well, the argument is you don't need cooling because it's space. Well, you actually do, but it's a longer, that's a longer conversation. Okay. The amount of stuff you have to launch into space right now to even power a one gigawatt data center is something like, foots out to something like 16 acres of stuff in space. Also, like... So you can't, just the capacity to launch that right now is non-existent. I don't see it as ever possible.

I mean, a piece of... space junk hits your thing, you have to send not just an astronaut, a fleet of astronauts. I think the data center never has a plug come undone because it wasn't like properly plugged in. It's like, ah, shit, we have to send an astronaut. It's, let's at least say, let's at least agree that it's at least 10 or 12 years away. Okay. But the story will be, here's what's coming. And I just think, look, if you would ask me 10 years ago or how long are people going to buy

the Tesla story where, yeah, they never missed this, but this is what's coming. I would have said it would have fallen apart a little while ago, and it just doesn't. So I think the same will be true of SpaceX for a while. I have this theory that the Tesla stock will or the Tesla shareholders who've been through this bumpy ride with Tesla, like they've been told a couple stories. Tesla, the electric car, the self-driving car, the optimist robot, they will move their money, the retail in particular will move their money to SpaceX. I think that's probably true.

store. Yeah, I agree. And then SpaceX will buy Tesla. Probably. Yeah. Okay. So if Elon is somebody that can sell a vision, Sam Altman is not? No, I don't think it's that he can sell the vision and Sam can't. I think it's that the narrative around OpenAI is already, Sam has gone out and written checks that Sarah Fryer and team, not to put Sarah's the CFO. So it's not just, it's not just or say Sam has gone out and written checks that the rest of the organization can't cash, if you will. The compute commitments, the public commentary about, yes, we're going to spend this much on compute,

but we're going to spend three times as much on training the models. And, you know, when you go, I mean, there have been plenty of podcasts with Open AI investors on all these topics, et cetera. But when you go and run on the numbers, it adds up to crazy. over a trillion dollars worth of commitments that don't have the, you know, and you don't see the revenue model or growth yet to back it up. So he's kind of mortgaged a bunch of the company, if you will, that now Sarah and the rest of the executives have to go out there with an S-1 behind them and answer questions.

It's one thing for the CEO to be out there. And again, Elon's got this history of, I'm talking about things that are four or five years out. Sam has made monetary commitments, right? Here's how much so-and-so is going to put into the company. This is the deal for this particular data center. This is the deal for this kind of compute. Actual dollar figures attached to them and commitments.

So Sarah and the team now have to go explain to the public markets and get out there during the road show. And, hey, help me. I'm not getting how the bill adds up here, right? I'm not seeing how the dollar commits over here are mapping to revenue over. here and when we're going to see profitability. So I just think they're going to have a much, much tougher time. It will still do really, really well on day one because people are going to be

like, it's the next stigma, it's the next cerebrus. I haven't been able to buy secondary before I want to be an investor. You have to own one of these things. But I think they'll, I think they'll be under a much bigger microscope quarter to quarter than Elon will. Is that fair? No. Is it probably what will happen, yes. So when I spoke with Sam about this, his perspective was basically like it's tough for people to grasp exponentials and we are in the middle of an exponential. Yeah. So you might see our revenue today and you might see our, you know, planned expenditures.

But what you don't fully grasp potentially is that we see it going that direction. And it let, you know, that argument is a lot of people don't buy it. Yeah. The counter on it, the counter to that counter, and then I'll let you answer is. No, you just keep, you keep doing the arguments yourself and then we'll end up somewhere. This is typically what happens. I just debate myself. All right, but let's just talk about it.

If you've seen this play out over the past few months, you've seen Anthropicat capacity limits and Open AI is starting to look wiser. Yeah. Because it planned for that exponential. Yeah. So? I think, first of all, I think Sam is right. that people are, I'll just insult all your audience right now and say, I think people are generally enumerate and don't understand exponentials. And it's true, if you look back even six months ago with the actual committed data center buildout, people were saying, there's way too many data centers.

We don't, we're not going to ever use all these things. And six months later, with a gentic coding and code X and Claudecode and et cetera, they're like, oh yeah, we're actually need more because these things to both do, you know, you know, forward and backward work, and the token usage has grown exponentially. And so he's proven to be correct. And yet, the size of the commitments, the debt load that some of these people are taking on to fulfill some of these commitments, and the gap between those commitments and current open-AI revenue growth is, you know, he's just got a hard. Sarah and the rest of the executives in the company are going to have a harder time. Help me map how you get from here to here.

I just think they will. They've got hard numbers associated with them that Elon doesn't necessarily have. Elon kind of does a lot of here's where we're going to go and this is what's going to happen next. And people are like, great, I get it. Well, SpaceX has basically given up on the AI project and I know that might sound extreme, but when you're renting data centers to Anthropic, they've given up. Yeah. Yeah.

So is it possible with Open AI's case that Open AI really delivers on the product because it has more of these data centers, but still doesn't get it right economically? I think so this is this is my admittedly opinion from the last couple of weeks but one of the things that I see happening that works in open AIs favor is codex is getting more and more popular. I think if you asked people a month ago, you know, if you actually looked at Google Trends a month ago for Claude Code, like what Google Trends is, you know, show me what the search results, the volume of search results for this term over the last, you know, over time. Claude looked like one of these

inflection points and Codex is kind of bumbling along. In the last couple weeks, I've heard more and more

folks say we're, you know, we were 95% Claude Code and a couple like Codex fans and now we're,

now there's a rapid growth and the number of people move into Codex. So all of, that works in Sam's favor

and should that continue and you see a sort of, you know, balance of, I don't recall, I don't know, 50, 50, 60, 40, whatever. And with the growth in agentic coding across the board that's going to continue, that could be what saves, that could be one of the things that saves open AI. Anthropic? I just think, I mean, same thing? No.

I think Dario, I mean, that's why I think there are three different things. I think Anthropic has. just been maybe as a result of just not being the lead horse so they don't have the spotlight on them. They were just more focused on, we're going to go attack the enterprise, we're going to focus on the enterprise. They weren't even initially going to release Claude Code. I mean, the initially, my understanding from folks inside Anthropica is we were just going to be like, wait, this is like a huge competitive advantage to be able to increase the rate of speed with which we can accelerate our own work,

and then decided, well, actually, we should release it because people will find problems with it out in the wild that we didn't find internally, and that'll make everything better, et cetera. There are probably other narratives internally, but that's my understanding. Anyway, I just think their focus on the enterprise, their consistency of story,

and the public's perception that Claude Cod Code is like the, the, irrespective, what I just said about Codex two minutes ago, that cloud code code is like, this is the, this is the great unlock and going to be the real game changer, makes their story maybe the most middle of the road of the three, where I think SpaceX will be, a lot will build castles in the sky and people will buy it, and Sam will be put up much more against the, help me understand how this maps did this over here, and Dario's threading the needle between the two, and we'll probably get a little bit more. more of a, this is the most consistent one of the three I can bet on for long-term growth and focus. But the finances aren't going to look that different, or they will? I think that my experience. Big losses from all of them. I get it. My experience as a public company executive is that the narrative and the story and your ability to help the market think about the way you want to tell the story is just as important as the specific numbers and the

quarter. And I think, you know, the even, that's, that's more true now than it ever was. Does it matter then who goes first because you get a chance to set the nerve as opposed to sit in the wake of the others? I think it would be great. I think it would be great for Anthropic if they can go first. Because. For this reason. Like, we can tell our story. It's not going to be compared to. But Sam says, and we just saw in them, we just saw in, you know, opening bell on CNBC that they have this much, they had to spend this much in compute. Why don't you have you have to spend this much in compute. You want to go first. I mean, I actually think part of the Elon lawsuit that, you know, we now all know the verdict of was, you know, when the verdict was announced

people, some people were like, oh, I'm, you know, surprised he pursued that if it was going to be that kind of obvious that he was going to lose, Elon was going to lose, I think part of it was just, and, you know, throw some wrenches and the works over there and slow them down. And I can get out first before any of these things and I'll be first out to work it. And I can suck a little bit of the air out of the room. Right. And that'll be great. Now, you mentioned that most people are enumerate, so let's keep running with that.

Yeah. I mean, this is going to be the, unfortunately, this is going to be the, I can already see the clip. This, unfortunately, many, most people are enumerate. And then someone will go find somewhere I made a simple map. there and then they'll... Oh, our team will do it. Yeah, I know. Good.

Okay, perfect. We're very generous with their guests. Excellent. Just kidding, we won't do that too. So, but let's talk a little bit then about the money in the market that can... I mean, we're going to talk about one and a half, two trillion for Spitzx, a trillion for Open A, trillion for Anthropic. Is there?

I mean, obviously that is just the market cap, not the money going in. But there's a lot... But the money has to come from somewhere. Where's it going to come from? Again, another... advantage to going first or going second and not going third is there's not infinite. There's not infinite capital out there. You're going to want to be in, you know, one or two of these things.

And then probably not all three, although we'll see. And they're going to require a lot of capital. And I think the advantage of going first is you have access to everybody's liquidity. and then you go second, you have access to some of that liquidity. And then when you go out with third, like, well, we're, you know, we put this much into SpaceX and this much into anthropic and we're, you know, I'm sort of capped out on my public, the percentage of money I devote to public equities, et cetera, et cetera. Do you think, though, well, let me ask you, go ahead. The investors, the public market investors.

There are all sorts of secondary effects on. Right, but they must be making contingencies, right? They go through these planning cycles where they're like, I'm going to want a piece of all these companies. Yeah, yeah, yeah. But so I'm going to have much more money available than previously, but maybe not. We'll see. Because if you don't do that and somebody else comes in and gets opening eye for cheap,

you just messed up in a big way. We'll see. We'll see. There's such, as you already said, even though those market caps are not the amount of, you know, money that's sloshing around and on the supply demands out of the of the, of the shares that are floated, it's still, there's still big numbers and there's not, there's not infinite capital out there. The interesting other thing that will happen is there's been so much illiquidity in the private markets. You've got all these university endowments and venture LPs,

etc., that haven't had their big liquidity events that are now going to be, you know, flush with distributions of SpaceX and anthropic and open AI that are going to be able to turn around and pour a bunch more money into the early stage, early stage venture capital again that have been maybe people who, hey, like, I'm already, you know, SpaceX is marked up to this. It's on a markup basis. It's now this percentage of my portfolio. It's only supposed to be 7 or 8 percent. It's now 15 percent. Can't invest in new venture funds. That becomes liquid. You get your big SpaceX distribution. You've got a lot of money to go invest in in venture capital again. And so there will probably be six to 12 months down the road a great time to go raise venture capital from LPs. Right. And the sort of question is, well, what can you invest in that doesn't get eaten by these companies? Yeah.

Yeah, well, I mean, that's something you have to be thinking about if you're a venture investor for sure. Yeah. All right. Let's talk a little bit about where this story can sort of unravel where it could go wrong. Let me give you one scenario here, which is I was speaking with an investor recently about the margins that these companies, these big AI companies are getting. And I thought, well, they can easily raise the price because the economic value that they're creating is so great that you could double the price.

And most people would pay that price. This investor said, no. They're so close to parity that you're much more likely to see a price war than you are to see a across-the-board price raise. and then I had to agree with him. I agree with that. Then how do you justify these massive valuations for the OpenAI and Anthropics of the world? I agree with that sentiment.

I actually think there's a bigger challenge for them. And it's something that is growing in the news, which is the public backlash against where's all the compute going to come from. And are these data centers that have been already committed to, and approved by the county commissioners and blah, blah, blah, are they really going to keep happening? I mean, you know, the one that's been in the news a lot is the Utah Data Center, just North Assault Lake,

that Kevin O'Leary, the Shark Tank investor from the Canadian Shark Tank, whoever's in charge, who's ever actually the money behind this thing, and I actually don't know who it is, why they picked Kevin O'Leary a Canadian Shark Tank guy as the face of this is anybody's guess but the people of... It's funny when we talked about

this before you mentioned he's Canadian so like why are you in a U.S. infrastructure project fine but I would say the bigger problem is he was the face of FTX not the guy right somebody somebody picked this guy and he's going out and doing big public interviews

on both the right he was on the Tucker Carlson thing you know you've got the right that really doesn't want this thing to be built progressives and others who are like, you know, it's going to do this to the environment and it's really not going to create a bunch of jobs. This is going to be just this huge problem in Utah. He's getting switched in these interviews.

And he's getting, and he's not prepared for these interviews. I mean, the Tucker Carlson interview was like not dissimilar that Ted Cruz's Tucker Carlson interview. He just got crushed. So I think there's actually going to be a growing, there is a growing backlash. against, hey, not in my backyard on these data centers. And we'll, I mean, the commute has to come from somewhere. And these things have to get built.

And that's going to be, that's a real problem for these companies. Should that become a, this is like the only thing I can think of that unites the right and the left in the country right now is I don't want you to build one of these things in, you know, in my backyard. Yeah, recent Gallup poll said seven out of ten Americans don't want them. Yeah. The other three people don't know what, don't. Yeah. The other three people haven't seen what one looks like. It's probably the other three got a check in the mail or something like that because they're widely unpopular. If you give a commencement speech and you say anything about AI, they'll boo you out of the stadium like we've seen recently with Eric Schmidt.

So that could be a real. It's the idea that there could be moratoriums. There was one that was proposed in Maine that got vetoed by the governor. But it's being brought up by national politicians. the idea that moratoriums could happen, maybe not tomorrow, but like it's going to be on the ballot in 2028. There are going to be pro-mortarium candidates. Yeah. So the interesting thing about all this is because, you know, you've got, I mean,

what has Silicon Valley spent, you know, the last two weeks gossiping about the Elon, Sam, Brockman, you know, Brockman Diaries? I'm sure he regrets having a diary, but. You don't have a diary, do you? I don't have a diary. I had one in Burr. I had one in Burn. No, I don't have a diary.

While these guys have been like, you know, I know you are, but what am I in court? The real challenge is they should be helping Americans understand this is why this is why it's important we win. Here's what happens if we don't build these data. I mean, it's not a hard. It's challenging. It's not the most difficult challenge in the world. If we don't do these things, you know, it's a fairly straightforward story.

We don't do these things China wins. If China wins, we lose. If we're the follower, we don't get to vote on a lot of things happening or not happening. They're going to tell us whether that happens or doesn't happen. And they're not telling that story right now to people. The China thing can be too abstract for, let's say, a college student who's like, I don't know if I'm going to have a job. I get it. If I was sitting at Arizona.

I was sitting at Arizona University of Arizona, and Eric Schmidt told me about AI, and I didn't have a job lined up coming out of college. I would be booing. I mean, I didn't have a job coming out of school as it was when I graduated. And if I heard anything like that, oh, man, I'd be ready to boo. Yeah. Yeah, they're just, you better start telling the story. Like, and there's no time like the present. Like, you haven't been telling it in the past. And again, Americans' perception of these guys is they're like bickering about. who's going to be the more rich in court. And, you know, I know your name calling and et cetera. And that coupled with, now you want to go build this thing next to my house, is a bad look. And so they just need to be a lot more focused on the external narrative about this is why this is important to the future of our society. And it's not happening at all right now. So let me challenge the economic benefit. part of this and see what you think. So another place this could go wrong is, are these companies

going to create enough benefit for others using them? This is, Chimoth had an interesting tweet. He said, wait, Chimoth had an interesting tweet. Yeah, I like this one. Well, I guess he does that often. They're all super interesting. So let me read this. In an early meeting at Facebook when I was describing the goals of Facebook platform, an area I oversaw, Bill Gates, Bill Gates yelled at me. Wait a minute, you got to love, comma, an area I oversaw. That's right, yeah. Okay, he said his quote has stuck with me to this day. This isn't a platform.

A platform is where the collective sum of revenues of the participants exceeds those of the platform itself. Yeah. So the platform is something that's so useful that the companies that use you make more money than you make. Yeah. I think that's a good definition. Yeah. There's an article in the information, Anthropic and OpenAI's share of AI startup revenue rises to 89%. That's not a platform according to that definition.

Yeah. Yeah, correct. I agree. I mean, not wrong. But that doesn't mean they won't be able to be wildly successful. If you're increasing the productivity of every Fortune 500 company and beyond by not just 10%, 20%, but orders of magnitude, that's an extraordinary amount of that. That's an extraordinary amount of value. What do we have seen a corresponding increase in earnings?

Well, we'll see. I mean, again, if you look at six months ago and you tried to foot out, hey, we're not going to need all this compute. And, hey, these companies are never going to be able to be profitable. You would have been right if that continued to be the trajectory. And then along comes agentic coding and up everything goes. So we'll see. One can easily imagine there are two or three or four more.

those unlocks that we haven't seen yet that are coming. Yeah, it could just be that that is, that's simply been applied to coding work, and it can start working for all different types of work. Sure. Which is what they want. So, okay. One last thing to run by you, and then we're going to take a break. This is, we had one of our commenters talk about the fact that, like, Microsoft has pulled

back a little bit from Open AI and Apple has not participated in this moment. They said Microsoft and Apple come from real innovations and use. cases, executing LLMs is expensive, risky trash for grifters, and they know it. There is no paradigm shift without Apple and Microsoft on board, so why should they take the risks of building these models driven by stolen data? This stuff is toxic, and they know. Could you find someone who has a stronger opinion and is less equivocal in their commentary? Let's see. It's unclear whether that was a choice Apple made or an inability to do. an inability to do whatever they needed to be doing.

I've found it. It's surprising how Siri for XI or IMessage, for example, have been so impossibly slow to keep pace with what appear to be things that AI startups with 10 or 12 people have been extraordinarily successful at, like text to speech or speech to text. Granola, for example, does a 100 times better job of interpreting what I'm saying than Siri does, which seems, I would imagine, has orders of magnitude, more people and resources focused on it. So I don't think it's that Apple has seen that what Open AI and Anthropic are doing is, you know, grifting. I don't think that's the case at all. And I think Microsoft

pulling back from the Open AI relationship probably has more to do with soft. Lacha's understanding of the dynamics that are going on inside Open AI and with the relationship between him and Open AI and maybe his perception of what he believed to be true and what is actually true and his understanding of where he wants to take Microsoft. Yeah, no, I think that's a good perspective. Hey, I love our listeners. We'd love to give you guys an opportunity to come in and come. Of course. I have nothing against that listener. I was just making a joke about the clear opinion he had.

That came through. Right. Let's take a break. When we come back, you ran Twitter. I want to talk about meta. And then there's also this really interesting thing that's going on, this concept of a permanent underclass that's emerging because there is going to be this sort of distinction between those that have one from AI and those that happen. So let's cover that right after this. Look, if you have a kid in school right now, you know the drill. What should take 20 minutes of homework ends up taking two hours and usually ends in tears. And every good tutor, well, they're fully booked for months. This episode is brought to you by Brainley. Brainley is an AI-powered personal tutor built by

educators, not a general purpose chatbot. It doesn't just give your kid the answer. It walks them through step-by-step explanations so they actually understand the material. It learns how your child learns, diagnosis when they're struggling, and builds a personalized learning path in under three minutes. Available 24-7, there's no scheduling headaches. And it's just a fraction of the cost of a private tutor. Finals are coming. Build your teen's study plan now. It only takes minutes. Go to brainy.com slash big tech to get 50% off your first brainly subscription with my code,

big tech. That's B-R-A-I-N-L-Y.com slash big tech. Bitcoin has been part of the conversation for years now, but actually doing something with it has always felt more complicated than it should be. Where do you even start? If you've been curious about using Bitcoin but haven't made the jump yet, Cash App makes it easy. When you buy Bitcoin on Cash App, they hold real Bitcoin for you one to one, and you can withdraw it anytime. No extra steps or restrictions, you just access and control it when you need it.

For a limited time, new customers can get $10 added to their balance. Just use code Cash App 10 when you sign up, and don't forget this part, send at least $5,000, $5 to a friend in the first two weeks. Terms apply. CashUp is a financial services platform, not a bank, banking services provided by CashApp's banking partners. Bitcoin services provided by Blockink Brand. For additional information, see the disclosures at cash.com slash legal slash podcast.

Insurance isn't one size fits all. And shopping for it shouldn't feel like squeezing into something that just doesn't fit. That's why drivers have enjoyed progressives name your price tool for years. With the name your price tool, you tell them what you want to pay, and they show you options that fit your budget. Enough hunting for discounts, trying to calculate rates, and tinkering with coverages. Maybe you're picking out your very first policy, or maybe you're just looking for something that works better for you and your family. Either way, they make it simple to see your options. No guesswork, no surprises.

Ready to see how easy and fun shopping for car. insurance can be, visit progressive.com and give the name your price tool a try. Take the stress out of shopping and find coverage that fits your life on your terms. Progressive Casualty Insurance Company and Affiliates. Price and coverage match limited by state law. And we're back here on Big Technology podcast with former Twitter CEO de Castillo. Let's talk a little bit about meta, which was your number one competitor when you were working on Twitter.

Yeah, number one, number one, number two, and number three competitor. I remember META and Twitter didn't like each other so much that when META built a trending tab, a short-lived trending tab on its news feed, whenever there was a story they picked up from Twitter, they would write social media. People are talking about this on social media. Oh, I didn't know that. That's very good. So because they clearly saw you as a competitor.

But right now it's kind of a rough moment at META. They just went through, or they're in the process of going through some large layoffs. Their AI models are not state of the art. They don't have a cloud code or codex equivalent. In fact, the consumer use case for AI hasn't really been correct. And employees are starting to question whether it's worth working there anymore. I'm just going to read one employee's comments in the SF standards. From the outside, there's massive negative sentiment.

And there's certainly something there. But the pain of working here is not very well understood. It's this grand calculus of what it costs to live in the Bay Area and what personal sacrifices you're willing to make and what you're willing to do for money. On the one hand, I feel massively privileged and lucky to work at a place like this. On the other hand, I'm like, where is my line? What do you make of those comments? I mean, there are always people who are, there are always people inside the company who are, it's fine, but I don't, I like it. I don't love it.

You know, Bob's, my manager's mean to me. You know, I don't know. There's one person's sentiment, so it's hard to know what to make about that comment. What I would say specifically about meta is Mark is extraordinarily sharp and a strategic thinker. And the thing that I've been surprised about is the little bit of the death by a thousand cuts on the layoffs. Like there's a riff, and now there's another riff, and now there's another roof. Sorry, reduction in force. Yeah.

Layoffs. And that's like, that's what drive. If you do it once and then you get up in front of the company, like, here's why this is happening, you know, and blah, blah. And we're going here. And so now we're going to all, you know, wish our, you know, colleagues the best. But and the rest of us have to, you know, buckle down and focus on. People will like, okay, I get it. You know, they might be sad that Jim is leaving, but then they kind of are like, okay, like,

get it, we had to do that, fine. The doing it, you know, a second and then a third and then a fourth time is like, okay, you start to be like, okay, this is obviously not the last time. It's going to happen again. It might be me. And then that starts to be like massively anxiety inducing across the company and people just start to look around and like, you know, who's next. So that's just been, and each time in these layoffs, it's been a slightly different version of the, you know, because of blah, we need to X, Y, Z. And at some point, you just start to realize, like, you know, you said that one, that was the same reason as the second riff, and then the third rift was a third layoff was a little bit different narrative. Now we're going back to the second

layoff narrative, and people just start to go, okay, like, this, we're just being, you know, were just being spun. Yeah, I mean, I worked in newsrooms for eight years. So every January, there was a difficult decisions subject line in email. Yeah, the difficult decisions. Yeah. And I was like, I can't deal with this anymore. That's why I just decided to go out of my own.

There's nothing people hate more in an organization than feeling like they're being spun. And that's when they start to kind of turn on management. Like, you know, you can get up to, you can make mistakes and get up in front of them and go, man, I really screwed this up. Or we really screwed this up. and we should have done X and we didn't. It's my fault. I'm the, you know, blah, blah, blah, I'm fessing up. And they'll kind of be, okay, you can do that a few.

You can do that a couple times a year and be like, people are like, okay, I get it. We all make mistakes. But when you start to spin people, and the reason for this is because of our, like, and you said that, you know, same thing, nine months ago, whatever. Then they're like, it drives people crazy. You think people are fooled and they're not fooled. And I'm so glad to have you here because, man, Dick, I feel like we could speak every week because there's so much that, you know, I covered social media, I cover AI, you worked,

you're in social media company, you're investing in AI. So, you know, it's unfortunate we only have like 12 minutes left. I feel like we have to do this again. Ben Horowitz has this great shout out to Ben Horowitz. He ran this management class when he was running, when he was running, you know, his loud cloud. And he had this great, and I'd ask him for his outline of it, because I wrote a management class, and I did at Twitter. And I remember he was, you know, is like, your job as a leader is not to be, you know, as to have, is not to have all the answers. If you try to spin people and you think, and I just said this, if you try to spin your team and they know you're like spinning them, like, that's like the most demoralizing thing you can do.

Like, don't try to con me. And so there's got to be, that's the problem with these layoffs and then layoffs and then layoffs. And now, you know, we're doing it again, but this is the reason why. And people just are like, okay, they turn off. No, I'm with you. And okay, so here's where I was going with my windup. The interesting thing about meta is that is it really like a social network anymore? Or is it like reels and an AI project?

Yeah. And is Twitter and a social network anymore or social media? Or is it like, I mean, it does still have text posts, but it's kind of like reels. and it's combined with that side AI project. I think Twitter's text posts have been extraordinarily resilient. It's like this, you know, its ability to survive the changes in the way people use TikTok and Reels and social media. I do think, and I do think meta is Reels in an AI project. Let me just tell you, though, Twitter, I just went to my home feed.

Okay. First post, image. Second post, video. Third post, video. Fourth post, text only. Fifth post, video. Some guy beating the shit out of someone who tried to take his bike. Six posts.

Alex, you've got a weird, you've got a, the algorithm wants you to look at, it's the algorithm. I'm not, I'm not the only one that gets the fight videos. All right, next text post, next image. All right. Anyway, I just think, I'll say this about, I'll say that, I think you're asking me about Twitter. I think Twitter's usefulness as a text-based medium, despite what you're seeing in your home feed has been extraordinary. And I think I would actually credit,

I like to knowing a little bit about, you know, knowing a little bit, a tiny little bit about what goes on inside the company. I would credit a lot of the recent success. And I hope I'm actually hurting this person by crediting him and stuff. that of, you know, the ownership. But I think Nikita Byer as the head of, and he's the product, I think he's the only product manager there now. Right.

And then loads and loads of engineers, or sorry, some engineers and a designer. Sorry, don't mean to insult Elon by saying loads of engineers, some engineers. But Nikita has an extraordinary instinct for product that I think only, I would say, Kevin Sistram and maybe Evan Spiegel with his initial instinct for Snapchat stories are comparable. I just think Nikita's got an almost remarkable instinct for

no, no, no, this is going to be what helps grow the product, even though nobody else is talking about that right now. We're going to go do this. And he's right more often than he's not, and it's impressive. Yeah. No, it's, I mean, I just remember, I sort of foreshadowed this at the beginning of the episode. So I moved to San Francisco in May 2015. And I think I had my first week on the job, second week on the job, you stepped

down. Yeah. June 10th. And this was, yeah, and this was my second week there. And this was Twitter and Facebook word. That was basically my big. And the whole newsroom stopped. We're like, this is big, big news, holy shit, and my editor looked around and he's like, who's writing this? I guess I will. And then the next day we spoke about the fact that we were leaving and Jack was going to become the interim CEO. My favorite, my full-time CEO. And that was like, it was a definite like welcome to Silicon Valley moment. Just like, oh, things haven't really slowed since then.

Yeah. Go ahead. Your favorite? Not favorite. A moment I remembered vividly from that is, you know, we had that we had that. have all these alerts on our on our devices internally around the platform obviously and I got off stage after telling the company hey I'm stepping down Jack's going to takeover's interim CEO I've told the story before but yeah I like this one I get off stage and my phone you know and you

know it's super emotional and my phone bings Elon Musk has unfollowed you on Twitter I was like wow man yeah four seconds you might I don't know you might a dodge a bullet there I don't even know. Anyway. Yeah. No, that was, I was, well, look. I think it was more like looks and sees the news, like, don't need to follow this idiot anymore. Well, you should, does he follow you now?

I don't believe so, but I haven't looked. No, I always, I mean, I always liked looking at your tweets. So, I mean, I think we could do another full episode talking about the Twitter era and the transformation of that product. And I actually thought, you know, maybe we should have even started there, but I'm glad we went with. AII POS. But it's a, it has been a fascinating. I mean, when I was covering it, I covered like every little tweak to the feed. I broke the news that it was going to be algorithmic. And that was a very intense time because Jack initially denied it. And my DMs were like, you're a liar, your credibility is gone ever, forever. And then on Tuesday, like I broke it

on Friday on Tuesday. They're like, we're going algorithmic. And clearly it's algorithmic. But I've forgiven Jack for that. I hope we're all good at this point. But, um, Not just a crazy, crazy product. And clearly, like, you know, this whole, you know, this whole Twitter's dead thing. I mean, when you were CEO, you saw it after you left. Every journalist writes a Twitter's dead story. I never wrote it and I never will because for whatever reason, the format works. That's what I was saying.

It's remarkably resilient. The year I became, the day I became CEO, I walked up to the head of communications, Gabriel Stricker, and I said, hey, at the time, back in the day, there were business magazines. Business 2.0 and like Bloomberg, I think, had had dead birds, dead Twitter birds on their cover the past year. The death of Twitter. This is 2010. Death of Twitter across media.

I just went up to the head of comms. Gabriel was like, hey, your goal for the next year is no dead birds on any of the major media platforms. Low bar. Like the company is not dying. It just is a constant. And it never goes away. It's crazy. Well, I would say that so the business of Twitter has died to a degree.

But the product remains vital. I mean, I was people can. Crazy. It's a SpaceX company to bring it full circle. Yeah. People can dish on advertising, dis and dish on advertising all they want. But advertising is undefeated as a business model. What you end up finding is that the average revenue per user is just much,

much higher than you can get from a premium subscription. Well, yeah. And so maybe going to premium subscription and telling advertisers to F themselves isn't the best business strategy. I mean, it never worked for me telling my customers to go after themselves. But, you know, again. Teach their own. Yeah, teach their own.

Okay, let's end here. You know, we were texting. You sent me this post. The vibes in SF feel pretty frantic right now. The divide in outcomes is the worst I've ever seen. Over the last five years, a group of 10,000 people about at Anthropics. Open AI, XAI, NVIDIA, meta, TBD have hit retirement wealth above 20 million. Everyone else outside the group feels like they can work.

They're well-paying, but less than $500,000 job for their whole life and never get there. Worse yet, layoffs are in full swing. Many software engineers feel like their life skill is no longer useful. The day-to-day role of most jobs has changed overnight with AI, sort of pointing at this permanent underclass meme. I mean, I guess it's tough to feel bad for someone who's making less than $500,000. if it's like $499. But it is interesting what you're seeing in Silicon Valley today with like these lottery ticket winners at the big AI labs and everyone else.

I don't know, man. I'll say two things about it. Living a life of comparison, it doesn't matter, it doesn't matter where you are in that stack. It's a losing strategy. It's just a life of misery. And I guess... Because you're comparing or you can't buy a high.

No, just, no, just the, like, I'm here and this person, there's no winning that ever. That's right. By the way, you can be, look, look, Elon has got more money. Elon's going to be the first trillionaire. Is he talking about, like, what's he talking about on Twitter? You know, like, I'm, Sam's a bad guy. You know, like, you don't get like, man, if I were a trillionaire, life would be great, too. You get, I'm going to, that guy's a bad guy and I'm going to, you know, go get this person.

I just like, there's a great old Winston Churchill quote that I'm going to botch. But it's something like functional expertise, while great, is no match for a broad appreciation for the humanities and the human condition in all its joy and suffering. because you just developed this immense understanding of it looks like things are great for that guy, they can be just as horrible for that guy. It looks like things are horrible for her. Actually, some things about her life are better than anything about yours. And literature is filled with these, hey, man, stop chasing ghosts.

Stop looking, stop living a life of comparison and chasing ghosts. and this phantom thing you think you're supposed to have. Virginia Woolf's to the lighthouse, great expectations at Dickens. And I just think there are too many people in Silicon Valley who have functional expertise and not a broad appreciation for the joys and sorrows that you grow to appreciate in the humanities and therefore live in this vortex of like this tunnel vision of like they got that and I would have that if I went to Anthropic

and I didn't go to Anthropic and that sucks. The person Anthropic is like I was going to get this house but this jerk paid $15 million for the $8 million house and now I don't have it and that sucks. It's just there's no winning. That's right.

Yeah. I mean, I would say, I would say, okay. I get that it's worse for the guy that didn't go to Anthropic and now it doesn't have a billion dollars. I get that. I'm not taking the side of someone saying life is miserable

in that front. do get the person who's like, it's, you know, crazy, like making a couple hundred thousand dollars. And because these opening eyeanthropic folks have gotten this windfall, they've taken the housing supply. Yes. Rent has gone up here in New York. Rent is like the craziest it's ever been. Yep.

But that being said, you can still have a pretty nice life with that type of money. Again, writ large across the country, it goes back to the Darius and the Sam's, et cetera, et at need to start painting a picture to the country about why this is great for us or a lot of these data centers aren't going to get built yeah all right dick you have to come back this was so great yeah thanks for having me move an hour i've ever done on the show so thank you thank you for being here yeah happy to do it all right all right check out let's plug the show check out the nick dick and paul show please on your podcast app of choice and you always thank you for being here with us we'll see you next time on big technology podcast