Hacked - The SIM Farm

Episode Date: October 16, 2025

The story of a massive swatting hoax campaign across the US that helped take down a piece of cybercrime infrastructure in the heart of New York. That and a big rambling chatty chat about Tilly Norwood, AI bubbles, and somehow, very briefly, Goku. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Christmas Day, two years ago, Boston police get a phone call. The call painted a very grisly and spoiler so we can all exhale fictional scene. According to the caller, a man had shot a woman at a home in a neighborhood called Roslindale. There were still victims on site who'd been tied up and were being held hostage by the man. The call gets routed to 911. The Boston Police Department and Emergency Medical rip out to the scene. and is only once they arrive that they determine it was a hoax. The home they arrived at was the then and current mayor of Boston, Michelle Wu.

And it's here at the swatting attack at the mayor's house that responders start to piece together a pattern based on reports coming out of other cities across the country. At the same time as this call, one of the few where responders actually went out, a slew of similar calls were happening. In Rome, Georgia, a man phoned a Georgia suicide hotline from out of state, said he'd shot someone and planned to hurt himself next. The call was routed to Rome police where they flagged that this was the eighth such horrific scene allegedly taking place at this one address.

If they had responded to any of those, they would have found themselves at the home of U.S. representative Marjorie Taylor Green. In Cayuga County, New York, cops get a call about a made-up shooting at a rural home. They figured out before they went out there. that that was the home of Representative Brandon Williams. All at once, Christmas Day, a swatting hoax spree. Special Counsel Jack Smith, U.S. Senator Rick Scott, a unnamed in press, but referenced in DOJ

filings, former U.S. president. The swatting spree targeting all of these high-profile political figures unfolding across the states, all on Christmas Day, itself just one day, in a much longer conspiracy that would go on to hit more than 100 high-profile people and institutions. So what happened here and why are we talking about it now? At the heart of this is a piece of technology called a SIM farm. And last week, the U.S. Secret Service revealed that it had dismantled a massive SIM farm network in the New York area, more than 300 servers and over 100,000 SIM cards networked into

infrastructure that they say was exploited in those same swatting calls on Christmas Day. The calls led them to bust the farm. And when Asians started tracing who was actually behind those Christmas Day calls, the cast of characters was much smaller and stranger than I might have expected. A teenage swatter in the U.S. and two men in Eastern Europe, now both extradited and indicted. Behind a conspiracy, the prosecutors say touched over 100 different targets,

from mayors to senators, to judges, to journalists. So Scott, so, so happy to have you back. We're going to start here. With that takedown and the conspiracy that turned a piece of cybercrime infrastructure into this national security story here on Hacked. Scott, I'm back from Mexico. You're back from Mexico. How are you feeling? I'm feeling a lot better than I was last week.

Hell yeah, dude. I'm still on the mend. I got a little respiratory infection in Mexico. No good. I picked it up. I got dunked pretty hard surfing one time. Got kind of plowed under. It was held under for 25, 30 seconds.

And it kind of filled all of the sinus cavities and respiratory cavities with a little saltwater. It didn't go in my lungs, thankfully. Yeah. And then I think it just a little bit of Mexican Bay saltwater. Sure. ...beguals became a little bit of a respiratory tract infection. So I've been fighting it off. I've been sleeping a lot, taking a lot of cough syrup.

some antibiotics and just recovering. So feeling better now. But thanks for asking. Are you rolling on cops on that sizurp right now? No, today I'm actually off it. It's been giving me it, truthfully, maybe TMI, but giving me a little bit of heartburn. I don't like heartburn, but like all this.

You say a wicked high. It's been giving you just a wicked, wicked high. Yeah, all the DM coughs are just drinking it by the, by the gallon, just getting leaned. But the, no, no, feeling better. good. Good. Recovering.

Canadian Thanksgiving is almost here, so they're going to get a little break. What about you? How's things to do? Things are good. You were missed in the last episode, a lot of the comments sent their love. I don't know if you saw them.

I just want to go back. 25 to 30 seconds under the water. Is that normal in surfing? I am not a surfer. That sounds intense. It is intense. You kind of have to, like when you're held under that long,

you start to really think about it and you have to start convincing yourself. Because, like, we all know that we can hold our breath way longer than we feel like we can because you get that, like, adrenal response to, like, breathe. So you have to sit there and, like, when you're being rolled and washing machine under the waves for that long, you kind of have to have this, like, thought process with yourself being like, you're not actually in trouble. Right. Just relax.

Sure. You'll get up to the air at some point. Gotcha. Like, it's only been 10 seconds. I know it feels like it's. been 10 minutes, but like just calm down, don't breathe. You'll get air soon enough. And it's like it's, when you're held under for that long, you get to have like a whole cognitive process with it, like thinking about it and talking to yourself about what's going on. Because normally it's like

a few seconds. You just get rolled and then you pop up. But I got just clipped at the right tam. A rogue wave came and I was paddling back to get behind it. And it just as I ducked off through the face of the wave, the wave broke on me and just took me through. So, gnarly. Narly. Not really. And residual respiratory tract infections are the payment for such a mistake. For shredding. For being shredded.

For being shredded. Nasty. Nothing that eventful in my world of just a bunch of hikes while the season is still happening. A lot of time while doing that to be able to reflect on why it is I'm doing that. But I do like it. I spend three hours wondering why I'm walking up this mountain. Yeah, with a big back.

on with tents in it and stuff. Like we're doing like the proper. Backcountry camping. Backcountry camping. And there's like, especially at the beginning of those trails, you feel like a real weiner because you've got like hiking. Because you know you're going out hours further. But then there's like a family with like a grandmother and a small child with an iPad.

And you're like, I feel like a goober right now. And in about an hour, none of these people will be here. I will have earned this much kit. But I feel pretty silly being this gorped out. out when there's like someone wearing high heels just up ahead. Well, you do live in the gorp capital of the world, maybe. You see it at weddings. It's just like you cannot wear that puffer vest all of the time. Like you don't got to. You're not always going for a hike. You're at a at a cafe. Like stop it. Yes. Yes. Yes. Yes. It's good stuff. How is Mexico City though,

good? I really liked it. Yeah. It's interesting like that you got dinged up in Mexico. I arrived a day after the rest of my friends who were there. And they were like two of them were already dinged up by like like stomach wise and just different stuff. I think I watched one by one. And it's just funny that it, I then got back and that you were out of commission from having been there. I was like one by one everyone in our group, I think aside for me and one other guy got just like,

it was like a serial killer movie, like a slasher flick where there's just like, and now one goes down and that one goes down until just one of us was standing up right up until someone got literally food poisoning the night we were going to the airport to fly home and had to had to ensure that it's not it's a you know prepare yourself prepare yourself that being said probably my favorite city in north america it's great it's so fun it's really good i haven't been i've heard so many good things about it oh it's all here the food's amazing even though your recollection of all the food poisonings and stomach issues it's sensitive british dispositions not all of them but some of them i shouldn't i shouldn't cast

disperchards. I don't know where that came from. But yeah. Came from your subconscious. You're very biased subconscious. It came from my literal recent experiences where it came from. Just knocked them out. But they all had a great time to you. Yeah, food's great. Architecture's incredible.

Yeah. That's just like a good vibe. Just a really cool city. It goes on forever. If you don't like where you are, just keep going and you'll find a whole other city, essentially. It's like Tokyo. It's like Tokyo. It's a mega city. It's really cool yeah i got to do it i gotta do it it's on the list it's on the list yeah okay oh so should we

do anything else we want to talk about thank the patrons thank you so much patrons thank you all so much as always yeah really uh we should probably make a hotline hacked one of these days so maybe we should pump hotlinehack dot com send us your strange tales yeah yeah yeah there's some good stuff in there i i cracked it over for the first time we were we were running it a little hot and so you just like some stuff will come in and we would immediately post. I just wanted to let it kind of percolate for a little while, and it's like, it's been percolate. So, yeah, get your message in.

We'll jump back into that soon. I got some fun interviews scheduled coming up soon as well. Get more of those episodes out to you. Just, yeah. But I think for now, it's time to talk about a sim farm. It's talking about sim farms. Talk about a sim farm. And it's not like the farming video games.

This is not a sim farm. What's the name of the farm? Star do you? Star do Valley. I'm thinking Star Do Valley, which I have some friends that are like ride or die, Star Do Valley people. Oh, my God. And Sim Farm would be kind of awesome. Like, you're building it in like an abandoned floor of an apartment building in downtown Manhattan.

It's just racks of server farms. You got to get clients that want to do spam SMS messages and robocalls. Honestly, not bad. A sim farm for anyone. I didn't knock it out this again. Yeah. Anyone who doesn't know, a sim farm is this kind of type of setup that centralizes and automates the use of a giant number of physical SIM cards so that one operator can control thousands, if not more, phone numbers all at once. If you're trying to get it in your head, picture like a rack room full of SIM cards plugged into devices that are in turn controlled by servers, acting like this giant parallel set of mobile phones. Yeah, I saw this story when it broke.

And some of the photography is hilarious. It's just literally like these custom rack, like one-you rack boxes that have phone antenna sticking out of them. And it's just like, this is 25 cell phones. There's like just multiple one-U racks full of them. And it's like, oh my God. Like it's, you have to know you're doing something bad and you're like setting up something like that.

There is, from what I can tell no. Someone correct me, but I can't see or think of any normal use for this technology. Maybe there's some kind of like normalized use in terms of like, where's the line between spam SMS and say like political outreach via text messages. But in the vast majority of the case, that is done by real volunteers who are using their phone numbers through a system. This is the use of like, this is largely used for account fraud, spam SMS, robocalls, ad fraud, fishing campaigns.

it's useful, and as we will discuss, it has a role to play in swatting campaigns as well. Primary components are pretty straightforward. You've got a ton of SIM cards, the actual mobile subscriber identities, the phone numbers themselves. You've got SIM boxes, which are just hardware that can hold hundreds or thousands of those cards and connect them into the network. You've got a server that's controlling all of it. And then you've got the software layer on top, connection layers, proxies, automation, all that stuff that lets the person control all of these SIM cards. I'm not explaining how to build one, but how one at a very high level does build one is like it's pretty intuitive.

You've got to go buy a ton of SIM cards, typically for multiple carriers with software to rotate between them to avoid detection. You got to network them. You got to do that rotation because otherwise these things do get taken down. Like telecom providers know about this. Yeah. Yep. And then typically just trying to mask your behavior.

So that's a SIM farm. Picture that server farm, Scott kind of described with all of the antennas sticking out of it and someone controlling all of it from behind some kind of a terminal. So what happened here? The small little group of people, a teenage U.S. swatter and two European co-conspirators orchestrated this years-long campaign of hoax emergency calls and bomb threats that targeted about 100, like high-profile victims around the United States, Congress people, mayors, judges, journalists, a former U.S. precedent. Who are our characters here? Two big ones you got to know are the American, a guy named Alan W. Fillion, aka Torsoat. He was this prolific caller and orchestrator of hundreds of these calls,

who was partnered up with two other guys, but one primary one, guy named Thomas Zabo, aka Plank, Jonas Seifer, this guy in Romania who was identified by prosecutors as the kind of leader and organizer of this years-long conspiracy, They coordinated all of these swatting and bomb threats against all these high profile targets. There was another guy, Nomenya. One second. Radavanovik.

I practiced saying it, so I wanted to say it right. Thank you. Thank you. Guy in Serbia who was also co-charged. So we have these two different, you have these two guys in Eastern Europe and you've got this teenage swatter guy. Like how did all of this come together? I feel like the, there's the infrastructure side and then there's the,

usage side. And the teenager seems like he's got a use for it. And the infrastructure side, I would assume these people set these things up and then sub them out, contract them out to people. That would be my guess is with swatting culture in the States and swatting streamers and like any kind of live personalities, I feel like they're always looking for a way to do it. And these other people are looking for to set up infrastructure to sell to the highest bidder. Totally. What's interesting about this? is Sabo and Radan Ivanovac. Well done.

Ran this network that organized and directed the swatting and bomb threats that recruited individuals and operators inside of the states to do the actual calling English language speakers based out of the United States, folks like Philean. Neither of those groups were the ones that set up this network of SIM farms littered across New York. The SIM farms got busted because law enforcement found out about it when they tried to take down the swatting campaign.

Basically, this giant swarm of swatting events on Christmas Day got law enforcement looking into it. They said, what is the tech that is being used? Because we have these calls coming from all over the place, but a lot of it's localized in New York. Sure. Having this one radio tower. That brought them into New York where they found the Sim farm that Sabo and Radivanovick were

themselves users of. So they inadvertently got the SIM farm taken down, but they weren't the creators of the SIM farm. Okay, I got a question for you. How mad were those SIM farm operators? Very, I imagine. Better, better than that. Better.

You're a landlord. Yeah. You rent a small one-bedroom apartment out. Sure. To some Eastern European guy. Yeah. There's an emergency in the building and you have to go into your unit. You go into your unit and there's server racks

full of humming, buzzing, cell phone and tendons sticking out everywhere. What's going through your mind? What happens when you walk through that door? Eastern European guys standing there smoking a signal. I'm going to be like, it's crypto. It's crypto. It's Bitcoin. Like you just kind of shut the door.

And you're like, oh, I hope that's crypto. I hope that's crypto. Yeah. No, it's a really good question. The stuff that wasn't that I could find in any of the DOJ filings of this was actual specific locations. It is a really interesting question of like what spaces were they using. It's similar to stuff we've talked about with like underground crypto mining where people didn't know.

It's like, what did you think was going on with the power consumption in this space? What did they tell you they were doing? There must have been, my theory was that they were commercial spaces. And the people were saying we're operating a tech business when what they were actually doing were operating sim farms that they were licensing out to criminal operations. If I had to guess. If you had to guess, if I had to guess that I would. think that they probably had smaller farms set up in residential places. Interesting.

They make them more discreet. Yeah, sure. I'm just a little underground. I'm a little crypto miner and that's why I have these server farms here. Yeah, it could be a mule type thing too where it's just like, hey, let us give you $1,500 a month to put this thing in a closet. Totally. That's interesting.

Oh, yeah. I'm coming around to that idea. Yeah. Like tenants have way more, you know, laws and protections than commercial tenants do, like residential tenants. Sure. You can't kick me out just because I'm running a spam SIM farm out of my second bedroom closet. You can't barge into my unit. There's more protections, things like that. We're commercial. I think there's way less of that. So if I had to guess, if I was to do it, if we were theoretically setting up a SIM farm, I'd probably go smaller farms

across multiple residential units than one big commercial space. Yeah, right. It's much more conspicuous to run the bed bath and beyond of Sim Farm and phone crime versus just being like, I just need a guy to put this rack mount thing inside of some corner of their house. Little five-y rack shove it in your like bedroom closet and close the door. We use it for 12 hours a day when we're not. You can mine crypto with it. You do whatever you want with this. So according to the kind of prosecution's case, all of this documentation is now public.

So we have a pretty good sense of what law enforcement things happen here, which is the division of labor was kind of intuitively. You would have actors, some folks like Philean, making the calls and executing the hoaxes themselves. And you have others like Sabo and Radavanovich organizing the targets, creating scripts, arranging calls and resources, getting access to those SIM farms in New York, access to that telecom infrastructure.

At this is like, at the heart of this is kind of how do you scale something like this? Step one, they pick the targets. We'll talk more about how they picked them later. Step two, Zabon Radavanovich would write these scripts, these premises for the operators in the states to execute on. They would use these SIM farms to make sure that the calls originated from inside the states. They use this combination of human callers and this technical infrastructure that they had access to, got throwaway numbers, proxies, basically just to avoid being traced.

A single person dialing can only do so many calls if you want to scale something like this, scale this kind of harassment, and to sustain this campaign over months and months. months and months. You need a ton of different originating numbers, a ton of different SIM cards, a ton of different networks to access. And that was why they had to work with this series of sim farms versus something they might have been able to get somewhere else. Sure. They need a big infrastructure. You need a lot of infrastructure to do something like this. And the why of all this is still very opaque. Well, when you were reading the intro story, all I was seeing in my mind

was like the opening to a Hollywood movie. It's Barry. Yeah. It's like Christmas Day and like a SWAT team breaking down a door and it's like the mayor of Boston and then it like cuts to another scene and there's a SWAT team like assembling at a house and it's the governor of somewhere else. And then it's like it's just the chaos that they created allows some other, it's like a misdirect for some other larger criminal thing. Yeah, sure. Well, that's the weird thing about it is this doesn't really, there wasn't, the why of it never really gets much more satisfying than the why that an individual would do a swatting attack, which seems to be,

I don't want to psychologize them, but it's like it's kind of ego at a certain point. It's notoriety. It's all of those psychological things. There isn't really like a profitability component to all this. So much of what we talk about is like at the end there's a big pile of cash and it's like, I keep looking,

there's no, I don't see the pile of cash for anyone other than the sim farm operator. I feel like swatter culture. Again, again, I'm by no means an expert in it. But like I've seen, seen a lot of like streamers get swatted, major personalities.

And it's like, it seems like it's a bit of entertainment. Yep. Like we've talked about it on the show before where they'd hacked the doorbell cameras and stuff. And there was like people watching the swats happen. Yeah. I feel like it's like a power,

power issue. Like they're trying to, you know, influence power, take power, as well as like this little bit of entertainment that they get this like dopamine hit of like, watching their plan come to fruition. Totally.

And it's like, yeah, it's very, very strange. Very strange thing. They've scaled something very strange here. Yes. So this December 25th to 27th, 2023 spree targets senators, representatives, mayors, law, and gets all this law enforcement attention. And those calls matter beyond just being a good way to start the story because so many of those calls appearing at the same week telegraphed that there was something coordinated

happening here rather than just isolated prank calls. That sense of, oh, this is coordinated, prompted the attention that eventually broadened the investigation to capture the SIM farm. So they find this 300 SIM server, 100,000 SIM card network around New York. Secret Service said that this infrastructure was used to set up tens of millions of text per minute, licensed to totally unrelated criminal enterprises, but law enforcement, as we mentioned, was brought to this because of this sim swatting, this swatting hoax event on Christmas. The thing I found interesting here is, like, so Philly and Sabo and co met up and worked together

on the scheme, which used the sim farms and led law enforcement to the farms, but as I said, they didn't set any of this up. And I'm, I just, I really want to understand who did. There's no publicly available information in the charges as to who they think set that up. And it is unclear if those folks have been arrested or if they just found the scheme. It is, it is interesting. Like the, to jump back to talking about like shutting these things down, like I get tons of text message spam. Yeah. Some of it, some of it's like pig bitry.

Some of it's like political like PACs and stuff like trying to influence you. And some of it's straight up like, you know, spam. And it's like there's no real easy way, at least in Canada, to report that stuff. So I'm sure it goes on and on and on without ever really being shut down. So these SIM farms probably make a ton of money licensing out this capacity to these operations that are using it for stuff that's not going to get investigated by the FBI. Totally. And then all of a sudden they license a bit of that capacity out to some group that is doing it to do something that will get in. investigated by the FBI, and then boom, their entire thing comes falling down.

Yeah. Providing the criminal infrastructure for the smaller crimes that never get investigated seems smart until you realize you don't really know what you're licensing the tech out to. And it turns out someone being like, what if I SWAT attacked all of the senators? And it's like, well, now you got a lot of heat. Totally. You thought you were, you were fine, like empowering the equivalent of pickpocketing on the internet. And it turned out you were empowering the equivalent of like something.

much more serious. Totally. Alan Philean pled guilty on November 13th, 2024, multiple counts of making hundreds of swadding calls. He was sentenced to 48 months in prison. Sabo and Radavanovich were indicted. August 28,

24, DOJN sealed an indictment charging the two of them with conspiracy threats transmitting false information. They were both extradited from their respective countries to the United States. Actually, Radivanovich proceedings remained pending in a bit but I just don't want to say they both were.

Sabo was extradited from Romania, pled guilty to conspiracy. So I think that that's most of the story. The more I was just more time I spent on this one, I was really, and we talked about this a little bit, but like the why of all of it, we talked about the side of sort of psychological reasoning, but a thing I found fascinating and I was noticing this as I was reading the list of victims. It was a notable line from the indictment quoted by reporters. Sabo allegedly instructed co-conspirators to pick targets from both sides of the political aisle,

saying, quote, we are not on any side. Kind of like this attempt to appear nonpartisan so you would get no political heat from one side or the other, while still doing something that targeted some of the most high profile people in the country. It's like, I don't know what you thought you were avoiding by not picking one side of the political aisle from the other, but you did not avoid it, sir. I guess they just didn't want to get painted with like a tribal brush. Sure. Yeah. Just like this is, this is political.

It's like, no, this is for the laws. We're going after power. We don't have an agenda in a political realm. Yeah. They were going after, I mean, power and a set. They went after a lot of journalists, too, which were woven into that. It seemed like they wanted to go after high profile people. Yeah, exactly.

I was using power. Totally. Broadly. Yeah. Broadly is like a, that's like, we're going after senators. We're going after people that have power and authority. Yes, influential people, people with a reputation. And in the vast majority of cases, law enforcement, I think,

has figured out that this is an issue and that they must maintain databases of like, here's the 20 people in our town or whatever it is, that if a call is going to come in, check that that address isn't on this list before you send everybody out. The Michelle Wu, Boston mayor anecdote was one of the few ones where law enforcement actually went out, which is why we started there. So yeah, it's a fascinating, it's fascinating to watch the evolution of this from like a discreet thing that would happen

to something that is apparently people are attempting to scale. It's, I don't know, I swatter culture to me, I feel like it kind of like maybe I'm going to knock on wood here, but I feel like I don't hear about it as much anymore. Yeah. Yeah. Maybe police services and have gotten better about responding to it. I think that's it. Yeah.

Because there was a period there, like kind of like end COVID, 2022, 2023 when it was just game on. Like every day it seemed like some high-profile streamer was getting squatted live on stream. People have influenced. So, yeah, I'm hoping we're done with that. Yeah, me too. It's a very, it's like a bad use of time and resources and it's like really. Wasted utility, you know.

Wasted utility, as you say. It's dangerous. It's like people have gotten hurt in those situations because you have a parameditary force showing up inside of a like residential neighborhood. It's like it's not good. No. No. And especially they're showing up under the guise that something is very wrong,

that they're armed people, hurting people actively. And they are ready to respond with force. And then all of a sudden they're standing in someone's bedroom who's sitting in front of a bunch of computer screens with a camera in front of them. I was what to say. Yeah. It's the like, it's, it happened to, I forgot how much it was targeted at streamers who wear headphones.

Like, I know that seems like a small detail, but it's like there's someone banging on the door and you're live streaming and you have like all the UI sounds blasting in your ear. And then suddenly there's like... Yeah, six people. The cast of Tenet behind you with like all of the rifles and stuff, like just ready to go. And you're like, that's... It's why people got hurt.

Yeah. Yeah. Bad vibes. Bad vibes. Don't do it. Don't build a Sim Farm in a closet in New York. it's not good and if you do don't license it out to people who are going to use it for things worse than petty ad fraud yeah totally like there of all of the things you could

license this out to totally uh where do we go next yeah we go ad break let's go to it's go let's take it there think about the last time you heard a breach story on this show it always starts the same way someone somewhere saw something too late An alert buried, a signal missed, an SOC that just couldn't keep up. Arctic Wolf set out to solve that problem by rebuilding security operations from the ground up for a world where attackers are already using AI. They created the Aurora superintelligence platform, a fully agentic system powered by the swarm of experts. Instead of single-purpose bots or lucky-guess LLMs, this swarm is full of deterministic agents that handle whole entire workflows. Humans stay in the loop and on the loop to validate the critical decisions and keep everything trustworthy.

And all of this is just off running on their secure operations graph. A constantly updating intelligence engine fueled by more than 9 trillion telemetry events every week and over a decade of real-world incident response. The system reasons on real signals and real context not synthetic training data. And the result is the new Aurora Agent SOC. It's the first SCC that is agent led by design. You get agents that coordinate, agents that investigate, agents that respond at machine speed, and hundreds more that automate the repetitive work that normally buries human animals.

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Last year, 2025 was nothing short of a record-breaking year for major breaches, from sophisticated ransomware operators to AI-enabled attacks that turn defenses on their head. Organizations around the world saw headlines they never expected and cybersecurity teams were tested like never before, but here's the thing. These incidents aren't just news. headlines. They're learning opportunities. And that's why Arctic Wolf is hosting a live webinar on February 5th diving to the most impactful breaches of 2025. Their field CTO and security leaders are going to unpack not just what happened, but why these attacks succeeded. And most

importantly, what businesses can do to fortify their defenses for it's too late. You're going to walk away with real insights into how threat actors are evolving, how defenders are responding, and what strategies can help you stay ahead of the next big breach. It's not fearmongering. It's practical, actionable intelligence from experts in the trenches. Register now at arcticwolf.com slash hacked. And we're back. Before we hit record, Jordan and I were just catching up

because we haven't had a lot of time in the last couple of weeks to catch up. We're talking about the stock market. And what seems to be going on in the stock market? Jordan and I were talking about whether there might be a little bit of an AI bubble showing up, whether the market's a little frothy, seen as we're hitting new all-time highs every couple days.

It's really a cybersecurity-related conversation, but it's an AI-jacin tech-related. And this is... So when people say this is not financial advice, it's typically the last thing they say before they give you financial advice. And truly from the bottom of my heart... Yeah, this is not financial advice. This is really not financial advice. I don't like that kind of content. That's not what we're doing here.

But it seems weird. Where's your head on and add on this, man? Because I have, I have takes. I think I've got a few heads on this one because it's like, I personally think AI is going to be profound. Okay. So I don't think it's a, like, but here's the thing is like the dot-com boom in the 90s, the internet turned out to be quite profound.

Sure. But there was still a bubble and that bubble did burst. Yep. So there are some parallels there, except for the differences that a lot of the dot-com corporations had zero, like zero revenues. Like they didn't make any money. They were just spending money. It was all future potential. Where now we've got a bunch of players like Nvidia, who's making real money.

Like, Nvidia is based, like they have a huge long-term valuation, but also their short-term. and like their their EBTA and like their earnings is quite high. Like they're selling a lot of hardware. AMD, of which I am a shareholder, I just had a massive week because it turned out that OpenAI signed a monster deal with them. With Nvidia. With AMD. Oh.

But then so here's the thing that I'm worried about. Here's my take is it seems that Open AI, I don't want to say that they're manipulative. manipulating the market. But every single day, there's a new story about how AMD is partnering with somebody. And then that company's share goes up 20%. Oh, interesting. So Figma, who kind of came out, IPOed, went way up to like $100 some bucks a share, then crashed to like 50. Open AI came out the other day and was like, we're going to be integrating into Figma. Figma share price responded by going up 20% or something, a rough, rough approximation. And so just this week alone, it's like Open AI is signing deals with companies and announcing them. And it's that alone is enough to move

these companies share values huge. I've heard that they've also taken options. I don't know the truth of this. I should actually just Google this right now before I say it. But I've heard that AMD has taken, or sorry, Open AI has purchased options in AMD. So they could end up owning upwards of 10% of AMD if the stock price hits the targets over the next few periods. So essentially they're going to own a big chunk of AMD if their relationship drives the value of AMD up high enough. So it's like, it's, it's very strange what's going.

on. AMD knows that they hold a bunch of power in the investment community. And it seems like they're leveraging that power to kind of make equity plays into other companies. So I don't know if they did the same thing with FIGBA, where they took the ability to own part of Figma, but it wouldn't surprise me. The thing that maybe not stresses me out is the wrong word, but the thing that's odd to me. So last week, Open AI released, I don't know what they're calling. I think it's just called SORA, which is previously their video generation. It was just the name for their video generation platform. And they rolled it out as a invite only sort of vertical scrolling video style app that sure

isn't for me from the look of it. I don't love the way that those like sort of just you look at the app and it blasts content at you without you having to choose style vertical video apps work. But hey, do you? This is that, but entirely AI generated. And without at all, at all, digging into the ethics of that and the copyright of all of that and that is it good for you of all that. There's just the fact that an app like that's monetized. It's like that monetization model is very well established.

It's advertising. You make an app like that. You make so that you can put ads into it. And you can imagine how that would be monetized with this, where you have people using the app to generate the content. And then you have people paying to generate. ads inside of it and it's just this big prompt slop funnel. And the thing I'll say is that Open AI's value is not pegged to maybe we'll sell some ads. It's pegged to maybe we'll replace 40% of jobs.

So if where they're spending their time is, can we make money off ads? That makes all of it look really house of cardsy to me. because I'm like, I thought you were working on making God. And you're making AI vertical video and maybe we can put ads into it. I'm not saying that's where they're spending all their time. But that to me is like, does anyone else see a red flag here? Because that feels really red flaggy when I think about it like that. Yeah.

I think. I feel like the launch of Sora. Like I saw it all over the timeline. mostly in like Stephen Hawking X-Games clips for some reason. Like people were generating X-Lame. Anyway, I don't know how they ended up all over my timeline, but they did. And I don't know. Me neither.

It's very, very strange. Open AI also relaunched like our release and launched an agent builder. So now they're using AI to build agents that use AI. Okay. So you don't even need to code. them anymore. Like you don't need to use any of the agentic frameworks. You can actually just talk to Open AI and it will build you

an agentic agent. So, it's going to be very interesting to see how that goes. Like they are as a private entity it is very fascinating what they're up to. And it's not uncommon for them to take

ownership. Like for some companies to take ownership stakes in other companies, like it's not unreasonable, but to have warrants and options to take a big chunk of AMD, as they announce that they will be partnering with AMD utilizing their chipsets for their data centers is a crazy backend way to pay for your investment. We need to buy $10 billion in chips from you.

So we're going to buy options to buy 10% of your company because when we buy $10 billion in chips into you, the value of your company is going to go up enough that our options pay for the investment in the chips that we've made. It's like a crazy financial game. How is that not trading on privileged information? Don't know. Okay, cool.

Because I'm like, that's not, you're not supposed to do. I would get in trouble if I did something that I can't tell how it's different from that. Yes. Like, it's like I'm about to sign a monster deal with you, but I'm not going to sign it until you sign a deal that allows me to buy a chunk of you in the previous price. Yeah. Yeah.

Yeah. Cool. Yeah. Cool. And then all of like invidia, like I'm not saying invidia isn't worth a ton of money. But all of those chip companies are, their valuations are in part pegged to the valuations of the generative side of things. Like, Nvidia is worth more than like a big chunk of the pharmaceutical industry at this point. And its value is in some part pegged to the generative output of these companies.

And I'm like, it's different than the dot-com bubble. But it would be bad. Invidias worth $4.7 trillion. Okay. So like, that's a large number. Yeah. Like what's Amazon kicking that today? Two and a half.

So it's two, it's two, two Amazon's. Two Amazons. Two Amazons. How big is the pharmaceutical industry? As per my AI. The global pharmaceutical industry commands a staggering enterprise value estimated to range from $4 to $5 trillion. So if Nvidia's worth $4.7 trillion,

that would make it essentially a single industry the size of the entire global pharmaceutical industry. Yeah. Yeah. That's a big bubble. I don't know, Jordan. I didn't say it was going to pop. I just said it's a big bubble.

It's a big valuation. It's a big valuation. So it's a true story. The reason that I own an AMD is that I miss the NVID. bus. Invidia bus came and went. I was on it for a little bit, made some money, got out, didn't know if it was going to last.

And AMD is the only people who have shown that they have the potential to compete with Nvidia at that global data center scale. You're not bullish on Intel? Well, much more bullish on Intel, seeing as Trump is taxing Nvidia to give it to Intel. But I wish I'd gotten onto the Intel train. when it was like $18 now that it's like 40. Anyway, so the Nvidia, what was I saying? I got an AMD because if it even has a fallout of 15 or 20%

of the expectation that Nvidia's got on it, then it'll double or triple in value. So I was like, you know what, I'm just going to jump on AMD and hope that it rides the tail of Nvidia as its only real competitor that's shown up so far. Sure. The Pepsi to their worth more than the pharmaceutical industry Coke. Exactly.

Yeah, I got you. Exactly. Interesting. Okay, let's leave the stock market. It makes me feel bad. No financial was given. Advice there. I mean, still in kind of the AI world.

Did you follow this Tilly Norwood story? Oh, of course. Yeah, I didn't follow it, but it definitely showed up in my spaces. When do you tell everybody who Tilly Norwood? it is first. I reject the structure of that sentence. So two weeks ago at Zurich's film festival, Aline Vandervilden, founder and CEO of Air Production Company Particle 6 and this sort of, air quotes, talent studio spin-off Zikoya, revealed that, air quotes revealed that talent agents had expressed interest in representing Tilly Norwood, a AI-generated actress.

Norwood is Zacoia's first lifelike digital avatar. It's kind of envisioned by Vandervelden as the quote that got so much press coverage. The press coverage of this kind of is the story. The quote is The Next Scarlet Johansson or Natalie Portman. Her most visible role so far is an AI animated short called AI Commissioner, a video that Particle 6 put out. It's poking fun at the TV production process. You gotta get there.

You gotta get there. You gotta talk about AI people. It's not, though. It's not an AI people. So basically, she puts out this press, they put out this press release saying, this is the new type of actor and all these talent agents are talking to us,

and they all want to sign a thing called Tilly Norwood. A thing. And she's going to be in movies, and you're going to watch her, and she's going to be a star like Scarlett Johansson. I watched AI Commissioner. I can go ahead and say that I did not like it, and I did not think it was very good.

In my personal, subjective opinion, I thought it was very, very bad. And I think that Tilly Norwood had one sentence that it said in it. And best a luck to him. The response from the film industry, from actors, from other talent agents, was resoundingly negative

for the obvious reasons. Where do we begin with this? I feel like we're a throwback to last month when we talked about AI music. Which I got roasted on a bit in the comments. A lot of Swifties out there quick to point out that Taylor writes all of her own music, to which I will contrast

when you see Max Martin on her songwriting credits, I just want you to go to Wikipedia and look up who Max Martin is. Okay. Okay. So we got, we got, we got Timbaland starting an AI music agency group, A&R agency group. We've got Tilly Norwood, the AI actress, AI actress. That's what that's, that's the pronoun I will use, AI actress.

Sure. Sure. The. Yeah. Yeah. I want to, I want to dig into this one a little bit. Like, as we have, anyone who looks at. listens to this show knows.

Like, I don't think I am digging my, like, sticking my head in the dirt on AI, generally speaking. I'm very aware of what can be done with it. I'm, especially in terms of, like, film and media production, it's like, it certainly has a role. It already is featured in moments in special effects. It has a role to play in VFX. It is a useful technology in the film production pipeline.

Having established that I am not old man shakes fist at cloud about this technology, this is the dumbest shit I've ever seen in my life. If you are a talent agent who signs what they're calling Tilly Norwood, I have a duffel bag full of magic beans to sell you. Like, at the heart of this is like a category confusion of like, is Bart Simpson a character or an actor that you can cast in things? Yeah, well, I'd say, I'd say they're both. I wouldn't. Because Bart Simpson has a human that voices him. They're an actor.

Yes, exactly. So they're both. It is both a character that you can cast in things and an actor, because you need both of them to make Bart. Right, but it is not an actor. Like Bart Simpson... I know what you're trying to say, but I'm trying to say the opposite, where it's like, what we consider to be Bart Simpson is actually a performance by an actor and a performance by animators and illustrators. Sure. There are animators and there's an actor. But Bart Simpson, is a character, and Nancy Cartwright, it is very specifically important because people are saying Tilly Norwood's an actor. And I'm saying Bart Simpson, Goku is a character. Sure. Bart Simpson is a character.

Nancy Cartwright is a wonderful performer and actor, the voice of Bart Simpson. Yes. So when you start saying things like we're expecting talent representation to sign Barts, to sign Goku any day now, I'm like, you are at best confused. in it worst lying. I'm like, this to me, the verge called this an AI sciop, where all of the media about this is normalizing this concept. And I'm like, I would go further. It's like, for legal reasons, I will not call this a grift.

And it's only for legal reasons that I'm not calling this a grift. Like it, this one, there's so many of these things where I'm like, oh, there's actual shades of complexity and ambiguity here of when is it AI, what is an art project? And there's some actual cool AI art projects that are starting to come out. We can talk about in a minute. But like this one, this has like in the early days of NFTs when people are like, you can own a JPEG. And then now we're like, no, you couldn't.

This feels like that where I'm like just no, no, she isn't. In my, in my humble opinion. Hey, hey, hey, it's complicated. It is complicated. It's definitely that. Because the thing is, is really what we're doing is, really what we're doing is, were taking, like, I wouldn't call them an actor, but I would call them more of like a directed asset because there's somebody that's controlling the asset that is Tilly Norwood,

who is the conduit and the prompter. Sure, the prompter. The proctor. I'm with you. It's complicated. I am with you there. Yeah, yeah. So there's somebody that will control and review and evaluate and criticize the performance of the asset,

Tilly Norwood, who will then refine. the prompts to make it more of what they're expecting. It's still a performance. There's still going to be a human gatekeeping it. It's just that it's an automated artificial asset, which is very strange and not something that we've typically had in the world. Like this is in the last couple of years we're getting it. I will say that like if you watch any kind of streaming platforms,

anywhere where there's video advertising. I would say now that we've crossed the 10% threshold where 10% of the video ads that I see, I can quickly spot that they have AI assets in them. And it's not like text or background. It is in use. Whether you like it has utility in that use case. Yes.

Yes. I completely agree. I guess I've spoken my piece of why I'm not a fan of it. In a practical sense, I would say to anyone considering signing this thing, It's like. No, nobody's going to. No, and no one should. Like I genuinely.

Unless it's a shock and awe thing. So we'll do it for the PR. But no, no sincere filmmaker is going to do it because they know that there's going to be a massive fallout from it. It's also just like a, I can't wrap my brain around the, aside from the publicity stunt of it all, which you only get to do once. No one's going to be the second one to do this. And if I want Scarlett Johansson to be in my movie, not AI Scarlet, not a rendering of Scarlet, but I want Scarlet, Johansen to be in the movie, like, guess who has to show up on set and whose talent agent

then gets a cut? Do you want to know who gets a cut if I put this exact face and visage into an AI slop thing that I've made no one? You could go make a thing with air quotes Tilly Norwood in it right now. And the response, which could then be like, oh, but if someone owned the intellectual property to a Tilly Nor would know you couldn't, it's like, sure, they'll be the first person to enforce copyright in AI image generation. Best of luck to you. Yeah. I saw some of the criticism

about the SORA launch around that same topic where people were like four days after SORA launch. Now all of a sudden these AI companies are talking about copyright problems because there's like people

that's good fun. It's like it's gone full circle. Oh, 100%. The, if you want to see like more it's like another thing that's been getting way less press than the Tilly Norwood and the Velvet Sun Down, the pure just like prompt generated stuff is a thing called Neurlvis, which is a product of a, I would say, like a filmmaker named Josh Wallace Kerrigan,

who is using AI essentially as a visual rendering pipeline for a series of characters that he is creating and voicing himself. Like he is doing a Trey Parker and Matt Stone writing and voicing all their characters and then animating it dirt cheap with like paper cutouts. he's doing that same kind of thing and then rendering the visuals using these tools. Does this address the ethical implications of how those tools were trained? No. Is it creative?

An order of magnitude more than any of the stories we have talked about? Yes. Yeah. So if you want to see a world of like AI created stuff that isn't just this kind of low effort slop, start there. Like that, the defensible position looks like that to me. This is kind of where my mind. goes with this stuff. Like we're just talking about generative AI,

but I don't see like the Tilly Norwood's this case of like, I'm going to replace our, like we're still going to do this Hollywood project, the cinematography, we're going to have sets and circuses and all the rest of the jazz. And then we're just going to replace the female lead with a green screen stand in that's going to be replaced with Tilly Norwood. I don't see that ever happening.

But I can see the 19-year-old, Jordan Blumen, who's sitting in his bedroom and has come up with this great storyline idea and wants to turn it into a piece of visual content that they want to put on the internet, but they don't have the experience training skills to hand illustrated, animated, do all this stuff. But now all of a sudden they have an outlet where they can leverage it to do it. They can score it. They can do all kinds of stuff. And they know the vibe that they want, but they don't have the training and the knowledge to like sit down and score the, the TV show they're making

or the YouTube shorts or whatever it's going to be. And I see there's like a huge empowerment in the content creation game. Like that's the way that I see it going. I think that if we can accept that that's where it's going now, we need to also accept that in 10 years, it's going to be at the point where we could sit down and create a full motion picture with it.

Because it's like the speed that it is progressing now, compounded over 10 more years, we're going to get to the point where you won't need a circus and a set and cinematographers and, you know, grips and gaffers and best boys and blah, blah, blah, you won't need them all.

Costume departments. You'll be able to sit down in something like Google's creating their little motion picture platform that you can sit down and stitch scenes together and create stuff. Edit with it. Yeah, like they're building an AI woven, video editor. And I could see that

product going somewhere in like five, ten years when that gets more advanced. As a tool, it will like I said, I look at something in Neurovis and I don't even need to say we'll have a place. It's like it has a place in a real creative person's

pipeline. And we can talk about the exact machinations of that, but it has a place in a real creative person's process. I think about when we've talked about this before, but my other analogy from Bart Simpson and Goku was like Ghalm versus Andy Circus

where you had a real person delivering a real performance that like expressed something about their experience and all the great things that are art and it was being filtered through the visage of like a 3D generated character that cost tens of not hundreds of millions of dollars to produce and Matt Parker and Treystone

with their little character like cut out paper characters. It's that kind of thing. Yeah, video games, same thing. It's the ability to filter a thing and create something more than the input. That's really interesting to me. And for someone to, you know,

we all have like bat, like there's some weird taste in everyone's mouth about like de-aging actors. But for Harrison Ford to be able to wear kind of a like AI generated deep fake mask of his younger self to play himself 40 years prior in the scene. That's a creative.

I was thinking Indiana Jones, but totally, like that's a creative choice that real artists can use leveraging these tools. That's something, to my mind. Attili Norwood is not. Yes. Agreed. Agreed. I would never make the art. Like, by no means, I think the Tilly Norwood thing is hilarious.

Oh, yeah. It's deeply cringy. I think if you're looking at AI, I'll say this. I'll make a bold claim. If you're looking at using AI to replace human function in a process

in the traditional way, then you're not thinking about it hard enough. Well put. Because the process will change to adapt to the AI integration of it. Just looking to be like, oh, we can remove Scarlett Johansson's $20 million movie fee from this

and this put in Tilly Norwood is not the way that the world's going to go. It will not be the open. It misunderstands why people are drawn to artists and art. I really do, like, not to get too big with it. But like the reason you have paintings and songs and poems and films is to go, the things that happen inside of my head and inside of the story that is my life are happening inside of other people's as well. Yeah.

And they put it out there and I can see it and I can feel it and I feel seen and I see you. There's something really meaningful about that. And they go like, or I could type in a prompt and that's just as good, right? It's like, oh, I think you misunderstand. And you might like the NFD makers be able to ride a publicity cycle to a bunch of money briefly. I'm not denying that. And a bunch of people will make a lot of money putting out these kinds of press releases and go see and it won't make it true. Yes.

Yes. We're all products of our context and we look for that context and understanding in our forms for sure. 100%. So I just, yeah, I think it's going to be interesting. As society adjusts and adapts to AI, it's going to be a really entertaining shift. Yeah. To go back to the stock market a bit and talk about Nvidia. Sure. Like Jensen Wong says that AI is.

is our fourth technological revolution. And I don't disagree with them. And it's like you kind of already see it making those impacts across society. Like it's already farther along than I think any of us ever thought it would get. And it's still underwhelming to the people who are pushing it forward.

So if they, even if once their expectations start to be met, it's going to be truly boggling for us. Like when you've got Elon Musk and Open AI, like I don't even know how many groups are pursuing AGI I know, but it's got to be 10. And lots of them have endless money. If one of them reaches that endpoint, society will fundamentally change from that day forward. I don't think we've seen a lot of made, like AI has definitely made an impact in our society and in our culture. There's certain industries like software development that it's like grossly affecting.

It's certain places where it's having a big influence. But I'd say at the large scale, it's more just facilitating some of our job functions. Like most people use it now. It's not like a foreign thing. Some companies that have been resistant to it are becoming less resistant to it because they see productivity gains in their staff for it. How many times can you pay 20 bucks a month and see a 30% lift in productivity and somebody that you pay $100,000 a year?

It's like that to me just makes economic. make sense. It's economically viable. Exactly. So, yeah, it's going to be interesting to see if they get it across the finish line, and by the finish line, I'll say AGI. And if they do, what will happen at that point? Yeah. Anyone's

guess. Yeah, like I was listening to an interview the other day between a couple of deans for major, like, prestigious universities in the United States. It was on Diary of a CEO, I think. No, it wasn't. It was on all in with the Facebook guy. Yeah. And they were talking about how they're weaving AI into the curriculum now because they know it's here to stay.

And, you know, what used to be tutoring and special learning and stuff like that, people could just ask AI. I will explain it to you. If they have questions, they can ask, like, it is an educational tool, and they can't overlook that. Also, the value that they put, they actually made some funny jokes. As the deans of, like, you know, these massive institutions, they were laughing about how people don't know how to write anymore and, like, things like that. which is, you know, will only get worse as we become more dependent on the machines.

But, but, yeah, it was just very, very interesting to hear how their take on it is and what, like, what the educational, the post-secondary educational system is looking at it for because they know it's there. They know it exists. They know people are using it. And they have to adapt for that because to just ignore it and pretend that it doesn't exist, it's just not going to happen, not going to work. It's going to be a fascinating day if we, when we hit that line. If they ever hit that line,

it would be interesting day to be making a tech show. And I will say, I'm very, very happy to have you back. Because as much as I can bullshit into a microphone by myself, I can't do this. I can't bullshit just as, actually I can't bullshit as because you're a great bullshitter.

Oh, man. Okay. We got Sim Farms. We got a 40-minute AI rant. 40-minute AI rant. I couldn't be. happier about it. This has been a fun one. Anything else? Nothing we can't save for the next one. Hell yeah. We'll catch you in the next one. Thanks for coming by. Appreciate it. Take care.