Rich Habits Podcast - Should You Let an AI Agent Spend Your Money? (Max Levchin)

Starting point is 00:00:00 You are tuning in to the Rich Habits Radar, our Friday episode of the Rich Habits podcast where every Friday morning we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name's Austin Hankwitz and I'm joined by my co-host, Robert Croke, and this episode is going to be a little different. Instead of running through our normal three headlines and three radar points, we're going to be having a very special conversation with the CEO of Affirm Max Levchen. A firm recently reported their earnings results. The stock is up 70% throughout the months of April and May. So what better time to chat with the CEO of a $25 billion company than after a ton of cool announcements. So Robert, let's jump into our conversation with Max Levchin. Max, thanks again so much for joining us. Great to be here again. So you all just wrapped up your 2006 investor forum and you're coming off your 10th straight quarter of 30% or higher. GMB growth. Most people listening right now still file a firm under the buy now pay later acronym.

Starting point is 00:01:06 If that's the wrong box, what's the right one? What is a firm actually trying to become? I think I'm done fighting the BNPL moniker for a while I was raging against, you know, don't both made a box. And I'm over that. What's important to understand is BNPL, or at least affirm within that category, is fundamentally a mind shift or a vibe shift, as the kids say these days. You can borrow money. It's a good use of personal capital to stretch your money out into the future. And there's the right way to do it and the wrong way to do it. And we represent, certainly to our biased opinion, the right way to do it.

Starting point is 00:01:40 We don't charge late fees. We don't do deferred interest, all the sort of things that are kind of scary because they really are. We don't do. We are super transparent. We do everything simple interest. We pre-communicate, pre-price everything. We reward you for paying early, all the things that our firm stands for. So if that's called B&PL, so be it.

Starting point is 00:01:56 We are unique. still the only company in the industry that does all these things in a very specific, very deliberate way that is so profoundly pro-consumer. And in that sense, we are in a box of our own and I'm quite happy being there. Yeah, maybe talk more about what makes you all so unique. I mean, just for example, right, like walk me through a transaction, a firm did maybe six months ago that makes the next one cheaper or more accurate. Yeah. So as you guys know, every transaction that is powered by a firm is underwritten individually in the moment of transactions. So we take. all the data that's available about you as a consumer, as a shopper, as a borrower, and the thing that you're buying, drop it all into a giant AI model, and it tells us here's the price of risk. Here is the cost of lending you this money based on everything we know about you. So if six months ago you came in, we never met you before, we can infer a little bit of value based on your credit report data, which we pull, based on kind of what we know about the kind of thing you're buying. very interesting fraud-related data. If you're buying something, it'd be easily fenced in a street corner, there's a little bit of an increase in risk. If you're buying something that is essentially a capital asset, that's a lower risk, buying a mattress. We're easily convinced

Starting point is 00:03:09 that's probably something going to sleep on, as opposed to try to sell it to the highest bidder, etc. So the models take all the data in and give us a price, and we show it to you and say, hey, this is the cost of credit. A lot of times the retailer or sometimes the manufacturer will pay your cost of credit or pay your interest for you, so it's a 0% loan. But in either case, there's some associated cost that the model tries to predict. And we're very, very good at that. We've been at it for 15 years. Models are very precise. The next time you come around, assuming you have paid your bills from a firm on time or early, which we love, we'll say, hey, you know what, we know more about you now. It's not just the publicly available credit data.

Starting point is 00:03:42 It's not just what you're buying. It's also the fact that we've seen you in action. The cost of risk will go down and we'll pass it right on to you and your next transaction will be cheaper. And it goes on and on. Models are built to take that into account every single. single time. And that's why it's so powerful to underwrite every one of these transactions in real time. And when you say pass that on to the consumer, how does that work? Just ends up being lower interest. Got it. That's really cool. I appreciate you walking through that. Max, two weeks ago, you announced firm is going into Google search, AI mode and the Gemini app via Google pay. For folks who haven't internalized what agentic commerce means yet,

Starting point is 00:04:18 paint the picture for them. Because from a year from now, someone asked Gemini to plan a trip to Europe, what does the checkout experience actually look like and where is a firm sit in it? It's a great question. And the future is super interesting and exciting and it's fun to try to participate in both predicting and building it. This is already happening. This isn't quite figment of someone's imagination. So if you go into Gemini today and you type in, hey, I'm going to Europe, help me figure out how to get there. Here's my budget. I want to be able to fly a family of four the city, this city, et cetera, et cetera. Geminaldo a pretty good job saying, all right, I can see some information about airlines. I can help you shop for seats, etc. So that's already happening.

Starting point is 00:04:59 The next thing that's going to start happening more and more, and it's already beginning, and we are an excited part of this, is you can tell Gemini or your favorite bot or your favorite LLM, hey, I actually want to close the transaction now. I like the price I like what I'm seeing. How can I afford this? And it has been our job for 15 years to answer the question, how can I afford this in the most transparent, sensible, lowest cost possible way? And so what we've built, are these plugins that go into LLMs and pipe up right as you ask this question, hey, how do I pay for this thing? And obviously, we're not the only ones.

Starting point is 00:05:30 There will be plenty of choices. But the thing we're so excited about it is think in the past, the thing that I love to rage against this idea of, you know, zero with a tiny asterisk, don't read the fine print. You're getting screwed. You don't know how. It doesn't matter. Like, that's the business model of old. The business model of a firm is you are not going to get screwed.

Starting point is 00:05:47 We take it as our responsibility to you to give you the exact price in a super transparent language, one of our core values is no fine print. It's always been hard to compete against those who have a somewhat less scrupulous approach because the fine print is really fine. You can't read it and I can rage against the fine print all I like, but the consumer who's got two kids to travel to Europe with is not actually going to have the time to be like, wait a second, I got to read the fine print. So they still get trapped. They still get into these awful transactions that later on they come to regret, but too late. What's amazing about chat bots, amazing about AI is each one of these bots has a PhD in consumer finance.

Starting point is 00:06:22 They are looking out for you every single moment. And so as you say, hey, how can I afford this thing? A firm will pipe up with, hey, here is a pay-in-six plan. Here's the exact cost of interest. If you prepaid, the interest is going to come out. Or here's a trip by an airline that we have a partnership with. They will pay your interest for you. So it's a true no-interest loan.

Starting point is 00:06:41 Doesn't matter if you're a couple of days late. It doesn't matter if you forgot a payment. We're not going to flip on you and charge you a bunch of interest you didn't expect, like some of the other characters that I enjoy raging against. And so that combination of extreme consumer convenience, transparency, and AI being the world's best watch of these fine print gotchas, we think is just going to not only do great things for our business, but fundamentally change the bar, raise the bar on financial products. Every single person asking their AI to help them buy something, afford something, plan a financial decision is going to get a better outcome because these things are never going to be fooled. They're capable of doing advanced math right there in front of you and boiling it down for you in a single line. This one has no fees.

Starting point is 00:07:25 It's a pretty good thing. Cool. They're not going to make a decision for you, but they're going to make your decision most informed decision possible. You mentioned competition. You're launching alongside Klarna in the same Google integration. From a retail investor's standpoint, why doesn't this become a race to zero where the AI agent just picks the cheapest option every time? Spell out what a firm's moat is in this agent-mediated world because I just want them to, really understand because it does seem like a challenge for you guys, but I love the fact that you have all this transparency.

Starting point is 00:07:54 So walk our listeners through that. A challenge we are embracing wholeheartedly. So I think there are two fundamental things that make as different, maybe three. I'll start with two and then I'll add one more. Number one, much to my chagrin, by the way. Look, this advantage, I'll give away. Anyone who wants it is welcome to it. So stop charging late fees, stop doing compounding interest, stop having transaction fees, all the fees that the industry loves to throw in.

Starting point is 00:08:17 we don't do any of that. And for years, I feel like we just never quite got our fair share of love and recognition for. Those who use us know exactly what we stand for. In fact, our best customers are the ones that have been late by a day or two. I used to love listening in on phone calls. Hey, I'm late by a day or two. Can I just just just just be current or you'll be okay. Like, what's the late fee? There is no late fee. Like, oh my God, that is so cool. I've heard that that is so cool so many times. It's just it's the, it's the happiest time. We are still largely the only player that does this at any kind of scale. And so right now, as these AIs compare all these providers to each other, we tend to stand out in a good way of like, hey, this is the one with no fees. So I will gladly share that podium with anyone who wants to be on it. But for now, we are unique. Maybe the more permanent or at least harder to dismantle advantage, we've been this idea for 15 years, which also means we've gone to literally hundreds of thousands of retailers and struck special pricing contracts with them where they will pay your interest, either fully or partial. sometimes during a promotional period, sometimes during every day of the year. But the same level of transparency, the same level of no fees, no gotchas, zero means zero, all the stuff that we just bring from ourselves, we pass on or we invite retailers and brands and manufacturers to participate in.

Starting point is 00:09:35 So when you go into a chat bot and you're buying a Samsung TV on a 0% transaction, you know it's zero because it's a firm making the promise, but it's also unique. You can try to buy it with any other payment provider, BNPL or otherwise. You're going to find yourself paying interest. You're going to find yourself also wondering if there's going to be any fees. But even without it, you're going to find it a little bit more expensive. So quite happy to compete on that facet of price because we do have these contracts. And they take a long time to negotiate.

Starting point is 00:10:03 They take a long time to execute very carefully because retailers don't have infinite margins. So each time they subsidize this sort of a 0% loan, they have to believe it's, a consumer who's only going to buy when they are seeing this particular promotion power by us. And we have incredible amount of experience doing it, but also huge systems of software that we've built over the years to provide visibility and transparency to the retailers to make sure that they can run these ad campaigns responsibly, thoughtfully, and get the most for their money here. So that's a huge, very, very sophisticated advantage that we bring to bear that we've used very

Starting point is 00:10:37 successfully over the years outside of AI. We think is going to be multiplicative within AI. And then just one last bit since the two. two and a half. The other thing we've done for the last 15 years, is we've gotten better, better at underwriting. And so at any given moment when we are side by side with any one of our competitors, especially for things like six-month-transactions or 12-month- transactions or something that's actually quite long-term, it has real risk to it. You have, you know, as people in credit, say 12 opportunities to default, 18 opportunities to default. It's a bad joke, but it's not

Starting point is 00:11:07 completely wrong. We're very good at sizing that risk and pricing it correctly. And so typically, we approve more people while having lower losses. And so that, again, create a moat or an opportunity for us to outperform our competitor. So we love competing. I'm generally sort of a competitive person, but feel very good competing in a space where the judge has a PhD in consumer finance. Austin, before we ask Max, our next question, support for the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans

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Starting point is 00:12:19 including the companies leading the AI revolution, space exploration, defense tech, and so much more. So visit getvcx.com for more information. That is getvcx.com. Carefully consider the investment material before investing, including objectives, risk charges, and expenses. this and other information can be found in the funds prospectus at get vcx.com. This is a paid sponsorship. Back to our conversation with Max Levchin. I want to linger on that half of the two and a half that you had mentioned there around the consumer side of things

Starting point is 00:12:52 because we're seeing credit card delinquencies climbing. You know, household savings are getting drawn down. But you also set on your call that you're not seeing deterioration as it relates to your business. Help me understand that. Is a firm's consumer different or kind of like what you were alluding to? Are you just better at saying no and truly underwriting every single one of these transactions? It's fascinating. The answer is actually kind of both.

Starting point is 00:13:16 Maybe yes is the, we are better at saying no in a sense that we have the right or the opportunity to be the consultant or the, you know, sometimes people ask me like, what is a firm? Like, what are you to me as a person? And I'm not really a brand marketer. So I've always struggled with these. Like, what is this? but someone I know who is a brilliant brand marketer said, you're like the smart older sister. Like, you're like, hey, that's a bad idea.

Starting point is 00:13:40 Put down that wallet. Like, don't buy that thing. You should not indulge. Like this is the wrong. Or, hey, that's cool. You deserve it. Go get it. And so the ability to say no or yes, in the right moment, the right way,

Starting point is 00:13:50 as a sort of a friend or a coach or somebody who's actually out to look for your best financial outcome is something that we're very, very good at. And so because that is a fairly unique value proposition, we appeal to a particular type of a consumer. Like the person who wants that participatory engagement from their credit provider is someone who's actually quite motivated not to be behind. Our consumer knows we're going to say no when we feel you really shouldn't be buying this. We're also very frequently, we'll say things like, hey, a $600 bicycle is a little bit more than you can afford right now. However, we're quite happy to lend you two-thirds of this, but you do have to put one-third down as a down payment because that's what we think is the right sort of contours of a loan for you for this purpose right now.

Starting point is 00:14:33 And so that consumer is doing fine, but it's also because they want to do fine. They're motivated to improve their financial reality. Like maybe the most shocking thing about a firm is that we are a living proof that in the last 12 months, 27-ish million such people exist. You would think that, you know, we hear in the front pages of various newspapers is people don't care about their financial reality. They're sort of shopping with their eyes closed. They're not reading their financial statements.

Starting point is 00:14:58 And I'm here to tell you that's not true. We have tens of millions of people who are coming back to our financial. us now almost seven times a year saying, hey, make sure the thing I'm buying isn't going to bite me. I'm not going to regret it. I'm not going to be figuring out how the hell did I get myself into this kind of debt. And so that customer exists. They shop with us. They're doing fine.

Starting point is 00:15:16 I think some of the less scrupulous providers are happy to lend money because they'll make it back in things like late fees and delinquency charges. And we don't do that. And it turns out there's a lot of people in America who actually quite prefer that sort of way of living. And we don't blame them at all. I think I'm preaching to the choir a little bit here. but I just want your viewers, your listeners to know they're not alone. There's a lot of people who really want to have a lifestyle that they can afford, but also profoundly enjoyable.

Starting point is 00:15:42 Yeah, I want to go into some more numbers. You've been throwing around all these great growth numbers, but I saw that the Affirm card more than doubled to 4.4 million card holders, and you also announced a firm edge to embed payover time inside banking apps that now reaches 130 million Americans. Both of these moves are about, going from a button at checkout to a default payment system inside of someone's life. How do you think about this from a cannibalization versus an expansion here for people that are

Starting point is 00:16:13 trying to buy things the right way and use your service? We're not so large as to worry about cannibalization of anything just yet for a very long time. The total addressable market of U.S. commerce is calling on the order of a trillion dollars plus that we can play in right now, just given a problem. products that we have, 20% last I read happens online. All those metrics are giant. If you look at the number we put out as are this fiscal year, expected GMV volume, it's still in, you know, touching 50 billion.

Starting point is 00:16:48 That seems like an enormous number. It is an enormous number just in the absolute scale. But in the grand scheme of credit card payments or commerce or e-comber, any denominator you choose, we are so tiny. Catatualization doesn't enter my imagination. So that's sort of part one. Part two, I'm completely serious when I shake my fist at the compounding interest and revolving debt and fees that shouldn't exist. And it's the best kind of problem to have if suddenly more debit cards in America end up growing, quote unquote, this borrowing capability that we built into our debit card because it is that same mode of responsible borrowing with no fees, no compounding, etc.

Starting point is 00:17:29 So bring that functionality to other issuers, banks, credit unions, fintech, whoever wants to partner with us. And we're privileged to have a couple of, you know, our earliest partners on stage with us at investor forum to just sort of telegraph the excitement the industry has about this product. It's great. I would love for every bank that issues debit cards to have a firm edge, the functionality of a firm card built into their debit card. One of the cool things that sort of, you know, bears repeating, the unique thing that we bring to bear isn't just the underwriting, isn't just the sort of. or clever technical functionality, we do have these arrangements with many, many retailers, many brands that will subsidize these drives actions for you. So embedded in that partnership that Affirm Edge is, is a giant to home of promotional finance available to anyone who participate.

Starting point is 00:18:15 So we think there's a huge opportunity. We're very excited. We are but a tiny speck of consumer finance in this country. We would love to bring our flavor to everyone. That's fascinating. And I remember when the Affirm card first came out, it was such this, you know, revolutionary product in the sense that everything that you bought on the Affirm card was sort of pay-in-for, right? It's not just like, does this specific retailer offer some sort of, you know, pay-in-for for a product? It's like, no, you can go buy your Blistex. That's a bad example, but you go by, I'm looking at my blestex here. You can go buy something at Walgreens or CVS or something, whatever you need there. Use your affirm card for it and, you know, you sort of have all the same abilities to

Starting point is 00:18:53 pay in for like you would if it was a specific retailer. Now being able to unlock that to not just the 4.4 million people that use the Affirm card, but to your point with this Affirm Edge, I mean, that is fascinating stuff. Just for the record, it's more than Payne 4. So Payne 4 is a great tool. You know, Bliss Text is probably, I mean, I don't know what kind of BlisTech you buy, but mine is quite affordable even in today's strange world. But a nice lunch you might consider splitting into four if that's what your heart desires. But a firm card incidentally supports a pay now mode. So a Blistex is probably very appropriate to just pay for it right now and move on. But if you're looking at a TV or a fridge or, you know, something quite pricey, you can go into the Affirm app and with Edge into your

Starting point is 00:19:33 bank app and say, hey, the next transaction at, you know, Best Buy, not a current integrated Affirm partner. When I tap my card there, I wanted to be alone anyway. And so the magic of the affirm card and included in Affirm Edge stack is the ability to say, hey, at this store, whether a firm is tightly integrated or not integrated at all or some combination of the two, the next transaction, I wanted to be a loan and I wanted to be pre-approved and I wanted to know my rate, if any, and I want it to be a six-months loan or a 12-months loan. I want a budget. I want the budget to be up to this number and if I spend less, I wanted to adjust down and all this happens seamlessly, basically automatically, while telling you all the time, here's exactly how it's

Starting point is 00:20:12 going to work, here's exactly how much you're going to pay, not a penny more, all the same functionality you come to expect from a firm. And it does support paying for, certainly is a very popular product, but goes out to four years sometimes. So this is a very, very versatile tool. It's been growing by far the fastest in all of our product ecosystem because it is just such a powerful tool. And it really is a full feature of replacement for a credit card with absolutely no revolving, absolutely no fees, absolutely no annual fees or anything. I mean, that's the story right there. And I hope everyone listening right now completely understands that. At the end of the day, we need credit.

Starting point is 00:20:44 We need liquidity. People need to have the opportunity to say, I need to borrow X amount of dollars for this refrigerator or for this whatever it might be. And unfortunately, the system that has existed for the last several decades is ambiguity and an asterisk next to the 0%. Right? That's been the system. But you all are flipping that on its head with authenticity, transparency, and of course, now with this 130 million Americans that can do this in their banking apps. I mean, it's, this is incredible. Now, Robert, before we ask Max, our final question, we absolutely are in the summer months. And after what's been going on in the Middle East and now, the new Fed chairman and inflation. Like uncertainty has never felt so high. The major indices have been all over the place. Let's be real. The Fed has completely flip-flopped on their rate cut assumptions. And again, inflation remains just incredibly sticky here. We just got a four handle on inflation.

Starting point is 00:21:41 4.2% unreal. And that is why it's never been more important to have a plan and stick to it. And if you're a long-term investor like us, the plan has never been easier to come up with and implement dollar cost average and ride the wave. 100% Robert. We've been talking about how important it is to dollar cost average for years now. And when the market feels shaky, it's hard to see your progress. This is why we recommend being part of a social platform like Blossom, Social. Because on Blossom, you're able to see your entire portfolio in a very clean and simple way,

Starting point is 00:22:12 which includes your holdings, your performance, your dividends, everything you can think of. You're also able to follow other long-term investors on the platform, helping you stay motivated during these uncertain times. Not to mention the portfolios on Blossom are all verified. So if you're seeing someone buy or sell a name, it's because they actually did it in their own brokerage accounts. We're both on there. Our portfolios are on there.

Starting point is 00:22:36 All the fun stuff. So if you want to join us, search Blossom Social in the app store. Head over to Blossomsocial.com. And don't forget, they just came out with their AI assistant Beavis, where you can ask it any question about your portfolio, which I think is a really cool feature. So again, blossomsocial.com, link in the show notes below.

Starting point is 00:22:55 All right, Robert, let's now ask Max, our final question. I know we've only got you for a couple more minutes, Max. So last question here for you, you've spent your entire career here building products around how people handle money. What is the one money habit you think most people are missing? And what would you tell someone who feels like the financial system today has just not really worked for them?

Starting point is 00:23:16 I think people just, and I am in that list. And you're totally right of being doing this since my early 20, so I really should get it by now. But somebody tells you $1,000 loan, six months, 20% APR, what are you going to pay at the end of the year? People just stare blankly at the wall and make estimates, and they're all over the map. And they're always wrong. It's a great party trick I used to do back in the old day that I'd fly to New York to try to raise money for a firm when we were a tiny fledgling. And I would go into like venture capital offices or hedge fund offices. And I'm like, hey, I have a basic math question for you guys.

Starting point is 00:23:52 You're smart people. You trade stocks. You're serious. $1,000 loan, blah, blah, blah. What's the total cost? People are like, oh, yeah, I got this. And they'd be like 80% wrong or 100% wrong. And so people are not very good at computing revolving credit costs.

Starting point is 00:24:08 And it's designed to be hard to compute. So I don't feel bad. But if you choose to use that product or if you at least understand, want to understand how it works, make sure you have a sense for it. And it's a thing that. that often enough people just sort of say, you know what, I give up, I can't get it. I don't understand why I'm in debt. I'll probably never get out.

Starting point is 00:24:24 And a lot of people we know are struggling through life financially because they just sort of given up trying to understand. And obviously our mission since the very beginning, my personal mission for a long time has been how do you shine a light, how to make it easier to understand, how do you build products where we can compete with the tools that exist today that are not designed for transparency. But some degree of basic understanding of financial mathematics is a really, really useful skill that an awful lot of people don't seem to fully understand. It's not you. The system is built to be confusing. There is an alternative. We are it. Please try us. But don't feel bad that you can't do

Starting point is 00:24:59 the exponential math. It's designed to be difficult. It's designed to be difficult. I like that. Max, thank you so much for joining us again here on the Rich Habits podcast. We're so grateful to have hosted you and for taking some time out of your busy schedule. So excited that, you know, the investor forum went so well and all these great stats. Can't wait to have you back to talk more about it in the future. Thank you guys for having me and always great to see you. Thanks, Max. Robert, another incredible conversation with Max Levchin, so grateful that he takes time out of his busy schedule, especially after these incredible earnings calls. I just saw his stock is up literally 60 something percent in just the last two months now from the lows of March.

Starting point is 00:25:35 I think it was when the markets kind of hit that bottom at the end of March there. I mean, it's incredible to see these partnerships. It's so cool to see, you know, his affirm card doubling to 4.4 million card holders, 10th straight quarter of. of 30% plus GMV growth. I mean, they are building this company to not only solve problems, but scale indefinitely. It's really, really exciting to see. And I guess the last, like, thing I just want people to reflect upon with these conversations, because let's be real, Robert. We've talked about buy now, pay later. It kind of gets this like negative connotation for a good reason. It's people that normally can't afford things. They just say, oh, I'm just going to put on the buy,

Starting point is 00:26:11 now, pay later. And this happened to me after our first conversation with Max, but I've completely switched on what I think about a firm. specifically because of Max's deep conviction in authenticity, transparency, clarity. Like, I said it during the episode, we need credit. We need to have liquidity. We need to have that revolving ability to say, oh, I need to have access to $1,200 if I need to go buy this refrigerator or pay this person, whatever I have to do here. And being able to lean on a firm to automatically do that underwriting transaction by transaction and then saying, hey, we've realized you're good at this. we're actually going to pass our savings on to you by offering you a lower interest rate or whatever

Starting point is 00:26:52 it might be. I just, I really appreciate a firm's business model and their mission toward transparency and transparent credit. I agree with you 100%. Max has changed my mind completely because we always talk about people, you know, staying out of high interest credit card debt and all of that. But a firm has literally built the best mousetrap to allow people access to capital they need for short term. But in a way that is fair and reasonable so they're not getting into this high interest debt. I love what a firm is doing. I think it's really great for people. And I think about like the average home that maybe is doing a deck remodel in the spring and needed a thousand dollars worth a lumber to do this remodel. And they can put it out over four or six months without all of the

Starting point is 00:27:37 fees and all of the other different things that run the bill up on them. So I think it's a really effective way to borrow money for people in their day-to-day lives. And I love that Max comes on the show and shares it with our audience. And to just linger on that for a moment, if there are fees associated with whatever is going on, you know what they are. Their fees are up front. It's like, yes, we're going to charge you this much interest. You prepay whatever. Like, this is exactly how much this total cost is going to be. To Max's point on that last question, it's not, you know, what's $1,000 of credit card debt for six months compounding at 20 percent? I don't know and nobody knows. And that's why,

Starting point is 00:28:18 Visa and MasterCard are several hundred billion dollar companies because they've been able to fool us all to figure out what our interest actually is. And alongside the late fees and the hidden fees and all this other stuff. I just, I love the authenticity, the transparency. And, you know, it kind of goes back to Robert what, you know, Max was talking about when it comes to these AI agents. All of these agents, I've already done this. I remember doing this. I literally was with Google and I was trying to figure out flights. And I actually asked Google Gemma and I said, hey, I need a flight from here to here, help me find the best one, and how do I buy it? And it found me the flights. It did all this stuff for me, but I didn't actually do the checkout thing with them. I don't

Starting point is 00:28:56 think the tech was there just yet. But I could absolutely see it getting there. But to Max's point, he's right. Those AI agents are going to be, you know, genius PhDs in personal finance and these numbers. And so what begins to happen is if you run a good, honest business and you're not trying to deceive an AI agent. You know, you can deceive humans because we're not, you know, we don't know better sometimes when it comes to these hidden fees. But if it's written somewhere, that AI agent's going to find it. They're going to let you know about it, right? So if you just run an honest business, like that's the moat. And it's a pretty simple moat. Yeah, I love it. You know, and one of the best quotes from their call that Max said, and I'm going to

Starting point is 00:29:37 read this so I get it right, the world is divided into companies run by engineers and companies trying to figure out how engineer run companies are leapfrogging them. And that's what it's all about. This AI and all the technology that they built into a firm has just made them a better mouse trap. I don't know any other way to say it, making it more affordable for people to borrow money. And that's what it's all about. That and the transparency, it's a win for me. And I love having Max on the show. Thanks again to Max and the team for joining us and orchestrating this conversation. I cannot wait to have Max back on the show very soon. Are you one of those media strategy people clicking through slides, scrolling spreadsheets?

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Rich Habits Podcast - Should You Let an AI Agent Spend Your Money? (Max Levchin)

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