TBPN Live - Alphabet Breaks $100B Barrier, OpenAI's Rumored $1T IPO | Grant LaFontaine, Chris McGuire, Max Junestrand, Christina Cacioppo, Lin Qiao, Ilan Twig, Taranjeet Singh

Starting point is 00:00:00 You're watching TVPN. Today is Thursday, October 30th, 20, 25. We are live from the TVVN Ultronome. The Temple of Technology, the Fortress of Finance, the capital of capital. Meta missed earnings yesterday. Due to a one-time tax hit. Yes, not a, not that big of a deal, honestly. Meta posts record revenue, but warns of expenses. This is from the Wall Street Journal. Meta reported record revenue in the third quarter, but the technology company warned of accelerating capital expenditures around artificial intelligence, sending its stock down 7% after I was trading. If you're worried about expenses, you've got to go to ramp.com. Time is money saved both. These use corporate cards, bill payments, accounting, and a whole lot more all in one place, baby. It's now a $1.7 trillion company. not bad but we are in the age of three four five trillion dollar company now uh it's crazy times

Starting point is 00:01:03 there's a club above uh stand out for me reels at north of a 50 billion dollar run rate crazy which is more than all of tv combined right something like that it's close no i think uh i think television advertising like linear tv advertising is is in that range or it's like creeping up on it. In 2024, television advertising spending in the U.S. was expected to amount to approximately $60 billion. I mean, they're within striking distance. Let's hear it for the meta team. Remarkable. So there was this one-time tax charge of $15.9 billion that crushed net income. Spending on AI researchers has also been crazy recently. And KAPX is growing a ton. They're going to hit $72 billion this year. I'm going to

Starting point is 00:01:54 for my 72 billion over at Meta. Not bad. The ad load, just anecdotally, is up tremendously. They're now doing four ads where they used to do one. Yeah. I thought they were almost five. Like, you can go in between stories and get five in a row or something. Yeah, so in between two stories, you can get up to five individual ads.

Starting point is 00:02:17 So got to pay for all that CAPEX somehow. Yeah, the core business rocks. We know this. 51.2 billion in revenue this quarter. They were up 26% year over year. And there's just so many dials that the meta team can get slightly more dialed every quarter. You can get more users, more time on the platform from those users, more ads, more targeted ads. There's all these small tweaks that add up and wind up compounding. So my bigger question today is what happens to the advertising cash machine once you're two decades in. So Google went through this transition,

Starting point is 00:02:54 on October 2nd of 2015. And at the time, I feel like most people thought it was crazy. They rebranded. They went from Google to being called Alphabet. And the idea was that they were going to have other business lines. Yeah. Yeah. We're going to have other things.

Starting point is 00:03:11 And, you know, focus is usually pretty valuable. And at the time, people were like, well, you can't even keep Google Reader online. You can't even get a chat app up to date. You can't win in social networking. You had to shut down Google Plus. So what are you thinking you're going to go build a self-driving car, an AI team, or a new cloud platform? Like, this is crazy? Just put the 10 blue links in the back.

Starting point is 00:03:38 But looking back on it now, it feels like Alphabet totally deserves the broader name. The company is more than just Google Searchbox, certainly more than 10 blue links. Google Cloud is material. DeepMind is material. Waymo is material. There's the business side, Google Apps for Business. All of these are both key to the future value of Alphabet, but also key to just running the business today. The interplay between these divisions creates a ton of value, but more importantly, I don't think these businesses, at least most of them, would exist if they hadn't grown up in a cash-rich environment.

Starting point is 00:04:13 Like, I don't, I, it's just so hard to predict in 2009, how much capital is it going to take us to build a self-driving car network that we'll be able to launch in San Francisco and barely be profitable and then we'll probably need another decade? You know, strange, strange comp here is YC, I don't know, some years ago at this point was trying to understand what, what, what, uh, the factors that contributed to the breakout successes. and one factor was founders having wealthy parents. So the founders felt like they could just take these really massive high-risk swings because they weren't going for a base hit. The founders, like, if I make like a few million dollars, if I make a few million dollars, it doesn't change my life, right? The trust is well beyond that.

Starting point is 00:05:00 I got to go big. And so I got to go big, willing to, like, look silly for a long period of time, willing to, you know, just stumble around as long as it takes to hit it really big. and certainly, you know, number of the things you just outlined wouldn't have been able to be, maybe would have died as traditional venture businesses. Yeah, I mean, this was what I was writing about

Starting point is 00:05:21 with OneX, the robotics company, extremely difficult to understand are we three years away from that business really working financially? Are we 10 years away from the business, really working financially? There's a lot going on, but Google was able to just hold on to Waymo

Starting point is 00:05:39 from 2009 to today, 16 years, and they're probably still losing money on it. I mean, they're like unit economics are decent in one specific market. It's going to be a long time. I would say definitely losing money out. But they can actually do stuff. But every time they announce something, you know they stream it. They got to get on re-stream one live stream, 30 plus destinations, multi-stream, and reach your audience wherever they are.

Starting point is 00:06:05 You can sign in with Google, since we're talking about Google. So I wanted to look at some parallels between what's going on with Google, who's been on a tear and now has this like all of a sudden pretty diversified business. There's this meme here of the Ninja Turtles where the account alpha betting. Yes. So the search giant, the search, the cash machine of the of the ads business is taking the other bets as their children. And now as search becomes less relevant potentially in the age of AI, well, Well, what does Alphabet have? They have Google Cloud. They have Waymo.

Starting point is 00:06:41 They have Maps, Gmail, Chrome, DeepMind, Google AI. Like, it's a stack lineup. And so, yes, even if search does get older. I love how YouTube isn't even deserving of its own Ninja Turtle. No. And you'd think YouTube would be a huge one here. And that one seems, YouTube seems extremely resilient in the age of AI. It seems like the place, it's a social network.

Starting point is 00:07:02 It's going to stick around. And we really haven't seen any. I mean, we've seen the SORA stuff, but no one's, everyone uses chat ChbT and says, oh, wow, yeah, this is definitely going to replace some of my Google searching for me, for sure. It's kind of searching Google for me and then just giving me the results. No one's saying that about SORA. No one's saying, like, oh, I don't need to watch Doug Dumiro anymore or whatever. Yeah, and I mean, I think one of the, you know, right now you're seeing more AI content on

Starting point is 00:07:29 YouTube, but it's still created by independent channels. Yep. There's a world in that, you know, YouTube pays out a huge amount of its revenue today to the creator on the platform, there's a world in the future where YouTube just generates the video, the content itself through, you know, its various AI products. It never actually has to pay out a creator. Yeah. And that's actually better for YouTube in many ways.

Starting point is 00:07:51 Yeah. So content creators today are worried about being disrupted by other people using AI to make content. They're not thinking about the platforms themselves that know exactly what the kind of content that people like and would be able to, over time, produce it. themselves. Yeah, but aggregating that demand, like aggregating attention. Yeah, yeah, the value is aggregating this is the, is not aggregating the supply side. It's the demand side. This is the aggregation theory. And so if you want to aggregate, if you can aggregate a bunch of people

Starting point is 00:08:22 that open apps and are in the market for video, you can serve them up a Mr. Beast video or a Doug DiMiro video, or you can serve them up, yeah, I could generate content and you still make money because you have aggregated that, that demand, not supply. Doug DeBiro would be a good guest. We are working on it. Great point, right. Now, three, two, one. Privy, wallet infrastructure for every bank.

Starting point is 00:08:45 Privy makes it easy to build on crypto rail, securely spent up white label wallets, sign transactions, and integrate on-chain infrastructure all through one simple API. So the Google story is very interesting because really for the last decades since 2015, when they rebranded his alphabet, I feel like they were not getting a lot of credit. People were like, oh, yeah, like Google, it's like, the kind of the place where you sit on the, you rest invest, you sit on the rooftop, you're not really doing anything. And then now everyone's waking up to this idea that it's like, whoa,

Starting point is 00:09:13 they have like four monster businesses. And yeah, there's a ton of gravestones in the graveyard from various note-taking apps and chat apps and Google readers over there. But overall, they wound up building a very diverse, very valuable business where even if Waymo's not cash flowing a ton, is it worth $100 billion? Does that add to that? of their $3 trillion market cap materially? Probably, right? Waymo also raised like a venture round not long ago?

Starting point is 00:09:43 Yeah, I think it actually has like a public mark now, which is interesting. But my question is, how do we take this and we bridge it to what's going on at Meta, formerly Facebook, in October. I guess October is the month where you rebrand your company.

Starting point is 00:09:58 Facebook did it. Google rebranded to Alphabet in October of 2015. Facebook rebranded. granted to meta in October of 2021. And people, I think, overly, were overly narrow about framing that transition about, specifically VR, specifically virtual reality,

Starting point is 00:10:18 the metaverse, everything that Mark Zuckerberg was investing in after the Oculus acquisition and the Meta Horizon worlds and VR. Obviously, that was a piece. It's interesting that I feel like the name Meta has aged pretty well. I agree. even though it was ultimately somewhat like an embarrassing overinvestment at the time totally so the name aged well even though the activities that were driving the name change did not yes and i think it was just it was just important for for mark Zuckerberg to send the message that we're not any single app

Starting point is 00:10:54 we're not facebook yeah yeah we're not even just social networking like we could wind up with a hyperscaler cloud platform. If there was like, you know, yes, you have AWS, GCP, Azure, and then you also have like meta cloud platform, people would be like, yeah, that makes sense. And that's a couple hundred billion dollar business. And they figured it out, right? And so that rebranding, it did, it did definitely set them up for a new, a new era, but also just the ability to place other bets like what Google did once they became alphabet. But, uh, so, So it's interesting to see, like, how will, you know, like, what would those bets look like? Because AI is obviously just a sustaining innovation for meta.

Starting point is 00:11:40 It's a similar thing to YouTube, right? And machine learning's been generating value in ad targeting for over a decade. Sustaining in many ways, but the potentially disruptive component is that people are using LLMs in social ways. And so as people spend more and more time talking to LLMs, that is time that they are not in meta platforms products. Yeah, maybe on the personal interaction side, like the really parosocial stuff. That's what I'm saying.

Starting point is 00:12:16 That's what I'm saying. But for the users, like, you know, there are users out there that used to spend five hours a day using meta products and now are spending. I don't think there's that many of those, though. I mean, you look at the overall usage numbers. Yes, you're getting 30 minutes of chat GPT, but you're not seeing a blink on it. People are like, they're doom scroll on Instagram, and then they're also chatting with 4-0, right?

Starting point is 00:12:39 They're doing about it. Yeah, maybe. But at the end of the day, I mean. I agree. Like, it could potentially be a headwind long term. And that's obviously why. I'm just saying, like, Mark certainly, like, sees ramping attention and user minutes on OpenAI products. Totally.

Starting point is 00:12:56 And it's a concern. It's a risk. not quite as material as for Google. And so, yeah, the question is like, can meta, MSL, TBD Labs generate some sort of chatbot that's at 4-0 level, frontier level, doesn't need to be superintelligence necessarily immediately, but just something to sort of stem that bleeding in the way that Gemini and AI search mode, AI mode in Google search and the AI search overviews sort of stem. stemmed of the bleeding from, okay, well, do I need to just stop using Google search for knowledge

Starting point is 00:13:34 retrieval? If you're like, am I, do I need to stop? Maybe you can pull some people there. But, I mean, meta does, even though there's like all this chaos around who they're hiring and they're laying off their old team and they're building this new team, they're spending so much money, it's not like they're new to this. Like meta started using machine learning for ad targeting all the way back in 2013, two years before opening out. was founded four years before the transformer paper. Like this is not a new technology for Facebook. They've been using this in their core infrastructure for over a decade.

Starting point is 00:14:08 But there's this question of what is Mark Zuckerberg's track record when building or buying successfully in new markets? That's where it gets really hard. Obviously, Instagram, WhatsApp, great results. But certainly much harder in VR and also, you know, whatever the next next next thing is, it's much less clear. He has a track record of being amazing at cloning incredible features and products and buying incredible features and products.

Starting point is 00:14:41 There's no obvious track record of zero to one innovation. And some of this stuff has just been blocked. I believe he wanted to buy Unity, game engine, and effectively get into the game. gaming world in one way or another. And, of course, some of those games would be instantiated in VR or instantiated in meta properties. But I believe that was blocked or that didn't get through FTC. Yeah, a, you know, an environment that doesn't allow him to buy great companies is

Starting point is 00:15:17 not a great. It's his kryptonite. He's nerfed. He's definitely, if he can't buy, he's nerfed. He's one of the M&A goats. He is one of the M&A goats. This power level is too high. And it's way different than Google.

Starting point is 00:15:29 And it's interesting because on the face of it, Google and Facebook have similar backstories, similar cultures, you know, young founders who built up these tech companies only seven years, eight years apart from each other when they started. But Google had a very different culture. You know, it's a PhD research project, sort of an academic campus when you're walking around. The mission is organizing the world's information. It's like very nerdy. And that obviously translates to, hey, how do we? organize the world's information. Let's create a mapping product, Google Maps.

Starting point is 00:16:02 Okay, what do we do when we have all the maps? Let's try and drive around a car on it. And then they get self-driving cars, right? And it's like, it's a little bit harder to jump from like, our mission is to bring people together. So we're generating AI or VR, which feels like the opposite direction. And so I don't know.

Starting point is 00:16:20 It feels like there's always been a little bit more tension on the mission related to where the other bets go. Whereas you organize all the information, the organizing the world's information, like you might say, how does a self-driving car fit into that? But I can totally say, here's exactly how it fits into it. I can't say that. It's much harder. What's meta's mission monetize the world's attention?

Starting point is 00:16:46 No. Bringing people together. And the thing is bringing people together. To build the future of human connection and the technology that makes it possible. Yeah. and so there's a lot of there's a lot of products that feel like they might be successful I would love I would love for Mark to just go super villain mode again you know he he he's he like at some point it could make sense from a calm standpoint to lean you know in totally the opposite

Starting point is 00:17:13 direction of course yeah yep yep right now um that's not the strategy but if he just said our mission is to monetize the world's attention that would go pretty hard I like that stock pops I like that. I think so, too. You want to build it back up. Monetize the world's attention. Stocks down 10% today, but it came out with that. Updated, update, update on Halloween. Ooh, spooky. Spooky. I like that. I like that we're going into spooky earning season. Before we move on, let me tell you about cognition, the makers of Devin, the AI software engineer, crush your backlog with your personal AI engineering team. Yeah. And so overall, you know, it's easy to. look back with 2020 hindsight on Google and be like, wow, it all made sense. They were these

Starting point is 00:17:59 academics. They wanted to organize the world's information. They wound up building AI. They wound up building Waymo. They've been very successful there. Who knows what's going to happen with Meta? I do think that there is an open question about how does Meta Square the grounding of the mission into whatever comes next? Because if you're, if there is a big business to be built, In anti-personal, in truly like anti-social networking, you kind of got to square that with the mission, right? And so maybe you do need to, maybe you need to shift away to some sort of newer missions,

Starting point is 00:18:36 something different. Or maybe you need to define. Apple should probably update their mission to making phones that are performant but break easier. Have you actually read Apple's mission ever? The Apple mission? We got to do a, we got to do a segment called ranking, big tech's mission statements? We definitely do. Apple's mission is to bring the best

Starting point is 00:18:58 user experience to its customers through innovative hardware, software, and services. Is that actually? That's like the least inspiring mission statement. They've gone, so Apple strives to bring the best personal computing experience to student educators, creative professionals, consumers around the world. There was an older mission statement at some point, like post-jobs there was one that like literally had like TM for like we make the iPad which is the best like tablet computer and it was just like a list of products that they had it was like deeply Apple's mission is to create technology that empowers people and enriches their lives that's pretty good that's that's better than the than the AI overview of anyways yeah

Starting point is 00:19:46 I think the mission statement's probably underutilized as a as a as a mechanism to increase your stock price. Because authenticity, authenticity is like a powerful thing. Yeah. I mean, overall, I think, you know, there's a lot of questions about like, what is MSL building? What is TBD Labs? What is superintelligence? How does this all fit together? I don't think anyone doubts that meta can benefit from just improve machine learning systems, improved AI features all over the ecosystem, all over the family of apps, all over the core apps. The question is like, are any of the side projects going to become monsters because you're kind of in the side project era now that you're 20 years old?

Starting point is 00:20:33 Yeah, that's a good point. But yeah, you know, another shout out in the second quarter of 2022, Reels was at a $1 billion run rate. And by the third quarter of 2022, a $3 billion run rate, second quarter of $23, $10 billion and the third quarter of 2025, $50 billion. So the growth is absolutely incredible. And yeah, credit to Meta's, you know, entire team for just ridiculous execution. Yeah.

Starting point is 00:21:04 Google really crushed it. Google's parents says spending on AI development may reach $93 billion. They're higher than META's 72. Google parent companies, Google's parent company reported the 16, percent surge in third quarter revenue, with growth in its digital advertising and cloud computing units helping to finance robust artificial intelligence spending, sales reached a record 102.3 billion. Sundara was just like, uh, is that good? I mean, he almost posted like that. Like the post is like, hey, we did our first $100 billion

Starting point is 00:21:44 quarter. Not, and it's completely down place. how insane that is. That's so, so massive. Shares rose 5% in after hours trading. I think it's up a little bit more now. Net income was $35 billion, a 33% increase from the same period a year ago. Like other large tech companies, Google is pouring tens of billions of dollars into AI development. I mean, what a remarkable result. You know, there was so much, so much fun. Our friend Logan Kilpatrick, of course, works at Google. applies to Sundar and says, Google is the most incredible business in the world.

Starting point is 00:22:23 He just said that? He replied to Sundar and said that. That's awesome. I have to, I have to agree. I have to agree with Lois. We are very proud to be sponsored with them, by partner with them, by the way. Google AI Studio.

Starting point is 00:22:37 You can create an AI app, an AI powered app faster than ever. You can get started. Gemini understands the capabilities you need and automatically wires up. the right models and APIs for you. You can get started at AI. Dot Studio slash build.

Starting point is 00:22:54 Talk about a domain name. And this is, I didn't ask Logan if this is cool, but if you run into any issues with Gemini, you can just DM Logan. It'll be your personal tech support. And if you doesn't respond quickly, DM me, then I'll DM him and say hey.

Starting point is 00:23:11 You're famously a, you're famously a dot com respecter and a good domain. respecter, uh, Google has gotten to the level where they're buying whole TLDs. Are you familiar with this? Like doc, dot new. Oh, yeah, yeah, yeah. I believe they own dot Google. And so if you go to, I think if you go to com.

Starting point is 00:23:32 Dot Google, it resolves or something like that. I think they bought dot Google. Maybe I, maybe I don't get that right. W, www. I got to look this up. But they, they've been on a tear. If you go to docs. you just get a new Google Doc, which is cool. Anyway, let's move on to some timeline. Let's move

Starting point is 00:23:55 on to some news. Tyler, what's new in your world? I mean, most of the big news, I guess, was the Open AI IPO. Yeah, $1 trillion. And that's from Reuters, correct? Yes. Do we know, like, was that just leaked to them? Or can you just call them? Should we call Reuters, hey, TbPN, we think it might be worth a trillion, R-E-U-T. Yeah, I don't know where this was originally reported, but... Open AI lays the groundwork for juggernaut IPO at up to a $1 trillion valuation. Three people familiar with the matter said. So they got some reporting.

Starting point is 00:24:37 They got a scoop. The company has looked at raising $60 billion at the low end and likely more. they cautioned that talks are early in plans, including figures and timing could change depending on business growth and market conditions. CFO Sarah Friar, who's been on the show, has told some associates the company is aiming for a 2027 listing. Bo, play the wantwale. Let's get it happening earlier. Some advisors predicted could come even sooner around late 2026. I want this IPO to happen tomorrow. I think it'll be the most entertaining news item ever to actually get to dig into an S-1, to actually look at the financials. Like there's been so many leaks, so many, so much

Starting point is 00:25:24 speculation to actually get... We can do our first 24-hour show. We should. We should. I mean, realistically, we should be there in New York City the day of talking to all these people, everyone involved as they go out. Yeah. So it says they're going to, they're planning to file on the back half of 2026. Yeah. So it'll be a while. There's still a lot to do, a lot to build. I'm sure that they want visibility into what's the impact of SORA on the business. What's the impact? I saw another post that was, I don't think it's in our stack, but it was something of the effect of like, you know, how depending on where meta's market cap is at the time of the OpenAI IPO will be like potentially like like it will be an interesting comp because you're going to be

Starting point is 00:26:15 able to look at a business that's like very you know at scale like profitable still growing very quickly versus open AI which we know will be losing you know tens of billions of dollars at the time of the IPO yep and of course we'll have an amazing growth story and a bunch of narrative and things like that, but we'll still be, the comps are going to be absolutely wild if it's landing in that one to, you know, one plus trillion dollar range. Yeah. Let's go to some timeline. Suspended cap says makes no sense what the F meta is spending all this money on. You've spent $70 billion on reality labs to make the Rayban vision. Are you serious? And people are critical of Apple and their hardware efforts, give me a break.

Starting point is 00:27:04 And Investor Nick says, investors need to punish Zuck like they did in 2022. And suspended cap says, he won't blink this time. This is too big. He's effed. I don't know. He does have one of the biggest cash machines

Starting point is 00:27:18 in the entire world, in the entire history of business. There's a lot of cash. And there's, it's worth remembering the debate between Eric Schmidt and Peter Thiel where Peter Thiel sat down with Eric Schmidt, I believe at a

Starting point is 00:27:36 wired conference, maybe it was Forbes, and they debated what big tech companies should do with all the cash they're generating before we continue, before I finish this thought, let me tell you about figma.com. Think bigger, build faster. Figma helps design development teams, build

Starting point is 00:27:52 great products together. Get started for free. I can't believe you interrupted your own thought. And so, I was listening to Sharp China with Bill Bisch, last night and he and he his dog came in and he mentioned the farmer's dog which is like the brand of dog food that he feeds the dog and he was like this isn't like tv p and we are doing 25 ads in the middle of the show and I was like you are doing ads uh anyway um yeah the question was like google has all this money uh why do they have this growing cash pile why can't they find something to do with it and it's interesting looking back on it now because Google did wind up giving a lot of

Starting point is 00:28:29 cash back. They weren't able to find a place to, they truly had too much cash to do. They invested so much in Waymo and so much in DeepMind and so much in Google Cloud and, and a ton of other projects. And at the same time, they still had money left over. And so they were still doing, I think, stock buybacks and dividends throughout that whole process. And so it was, like, Teal was kind of proven right that Google was sort of out of ideas or the big tech companies or the technology industry broadly was really out of ideas. Then, of course, AI comes. Now we're sort of, you know, vindicated, hey, there is this new thing. We can invest. Let's draw down on the cash flow. People are skeptical about it, but at least it's happening. But the question is, is what is

Starting point is 00:29:14 Zuck thinking? Because he's definitely in the mode of like, I got this cash machine. Let me invest my cash flow in new data centers, in new AI training runs, in VR. I think investors are right to look at this and say, like, meta platforms is one of the greatest business. of all time. And you have, and, and the CEO's a little crazy. Like, he's a bit of a wildcard. Like, he has, like, obviously has an incredible. That's true for, all of the big tech companies.

Starting point is 00:29:39 No, I, I disagree. I think if you look at, I think if you look at Sundar, I think if you look at Satya, I think if you look at the guys that are running other. What about Bezos? I'm thinking Bezos because they had a cash machine with Amazon. What did you do? He didn't return a dime of capital and had gross, net profits of like zero for a decade. Yeah, but, but he was building a cash machine.

Starting point is 00:29:59 AWS. And the last time that Mark invested this heavily in something, it did not deliver R-O-I. Sure. And so I think people are just a little bit scared. That's why the stock's more volatile. That's why it traded down 10%. This is fair. Google is up.

Starting point is 00:30:17 Google's up 10%. Microsoft traded down briefly after earnings. But ultimately, I think if you're investing in this company, you have to, if you're investing in this company, you have. have to be okay you have you have the the the the sort of protection knowing that this is fundamentally just a fantastic business and you can you can pause you know they can sort of pause this like crazy spending at any point but again metacan yeah but meta hit the hit uh they're doing a bond offering that got announced this morning

Starting point is 00:30:50 for 25 billion dollars and that's after they did another um they did another deal with blue owl for like something like 30 billion dollars a couple weeks ago and so Zuck is levering up. He's going all in. And investors need to be tolerant of that risk. And there's plenty of people that are going to say, well, it's fine. I'd rather own, you know, alphabet. I'd rather own Microsoft, et cetera. Bucco Capital bloke is also, seems like he's on your side here. He says, excited to buy meta in the 500s. The stock, of course, is trading in the 600s. So he's It's joking that it will fall down. It's $666 a share.

Starting point is 00:31:32 Is that a good thing? Is that a good omen? Is that a good symbolism? It's a devilish omen. It's rough. And Bucco Capital says, the only challenge will be having the courage to do it when it gets there.

Starting point is 00:31:45 And he shares a pretty good visualization from Gemini of what's happening right now. Mark Zuckerberg is in some sort of convertible, driving off a cliff, wearing a VR headset with piles of cash flying out the back of the car. I mean, to be honest, I think this makes him look really sick. It does. And this is exactly what I want out of a big tech CEO. I want risk. I want risk. And I don't know. I feel like you're making a ton of good points that I agree with this year. I'm not saying to be clear that I'm not riding with Zuck. I will always ride with Zuck. I'm just saying I understand why people are like, you know what? I'm going to, I'm not. I can't really stomach, you know, a drawdown.

Starting point is 00:32:29 Some people are going to just rotate into the other hyperscalers. I'm just trying, yeah, Tyler, what do you think? I mean, people were calling for Sundar to be basically fired for, like, a long time. I know. Until, like, basically, this year. Yeah. So I feel like you're exaggerating how much, like, Google has been, like, this, like, winter the whole time. No, no.

Starting point is 00:32:47 No, no, I completely agree. This was my point about when they rebranded to Alphabet. Like, everyone was like, you're not going to cure cancer and create self-driving cars and also build AGI and build a cloud platform. And people were still saying Sundar should not be CEO recently. For 10 years, for 10 years. Yeah, people were saying like it's not really working. And now, finally, people are like, okay, it actually worked.

Starting point is 00:33:08 You have a diversified business. Congratulations. Okay. Okay. Breaking news. Yes. This is going to rock your world. No way.

Starting point is 00:33:14 Taylor Sheridan and Peterberg, team on Paramount and Activision's Call of Duty movie. Let's go. Let's go. Let's go. Hit the gong for that. The creators that made Yellowstone, Heller High Water, and Lone Survivor and Sikario. I'm so excited for the Call of Duty movie.

Starting point is 00:33:34 You know, they should also make a Vanta movie. Automate compliance, manage risk, prove trust continuously. Vantas Trust Management Platform takes the manual work out of your security and compliance process and replaces it with continuous automation. That's incredible. Wait, so what we need to get someone on the show who understands media because I like this all seems like it's happening very very quickly we

Starting point is 00:34:00 understand neofactual media yes media corporate media legacy new legacy media no I don't understand the neotrad media the neoconglomerate is entirely new to me I don't understand what Ellison's doing I don't understand what Taylor Sheridan is doing in reaction to it it it seems like this is a reaction basically Taylor Sheridan left Ellison's new empire left Paramount and said, hey, I'm out and I'm going over to NBC Universal. I'm riding with the Comcasters. And now he's saying, I'm making Call of Duty movie. Is this, is this, is this all tied to his, him leaving, um, him leaving Ellison? Or is it something else? I don't know. I'm sure this was in the works for a while, for a while. Potentially. Was it? I don't know. There

Starting point is 00:34:52 have been like a flurry of Taylor Sheridan like little leaks and news items because it seems like he's in he's in a negotiation with David Ellison over I mean he was until he laughed but he's still with he's still with Paramount at least for you know a couple more months maybe a couple more years he still has projects in flight you can't just like you know completely dip on your on your production company but we really should get someone on the show to figure that out let's go to more haters, more posters on the timeline from Jebultard.

Starting point is 00:35:28 This AI stuff is so dumb. Zuck is repeating the 2022 sinking of a great money machine in meta with wasteful spend. The Metaverse sucked and AI is nearly as dumb with all this CAPEX as investors tell him they're sick of it.

Starting point is 00:35:46 Yeah, and part of part of the I think part of the blowback here is that the first AI product that META announced from their new team was Meta vibes. Incredible. And I know you're, I know you've been putting in hours and hours a day on the Meta vibes up. But that didn't send a strong, that does not inspire confidence. Yeah. Right?

Starting point is 00:36:11 Because it was they, if they had launched SORA, people would have been saying like, wow, they're absolutely cooking. And I think there's two audiences that the Meta Vibs app didn't hit with. One was, okay, the extremely online technical teapot, whatever you want to call them, those folks are like, well, this looks like white-labeled mid-jurney because it kind of is, and the app just doesn't feel like super polished or like crazy, oh, wow, I've never seen these like UI paradigms. So there's that. And then there's the, you know, the teapot critique of like infinite jest and slop and all this stuff.

Starting point is 00:36:46 So like they weren't hitting with like the insiders. But then simultaneously, it's not like you walk down the street and you were like, oh, wow, like this is actually breaking through with just like everyday random people in the way that Threads has. And so, I don't know, maybe in a year we'll be like, oh, wow, they actually figured it out. They funneled a ton of people to meta vibes. And it's as successful as threads. That would be impressive. It seems like a tall order. Yeah, it won't be.

Starting point is 00:37:12 It won't be. But the thing about SORA that stood out, and even though I'm not. bullish on SORA as a media consumption platform. It had this innovative, super viral feature that was fresh and new. And so I think if Meta had launched that, everyone had been like, yeah, you spend the money. But when they launched lives. Because at least you're on the frontier of the slop.

Starting point is 00:37:36 Like you have the purest slop. Yeah. And it, you know, SORA benefits Instagram weirdly because people are creating more content over there and it's driving engagement. And also just the SORA app, it did not inspire. The actual app, the idea of cameos and putting those things together. Yeah. And the way it was, like, all the little details.

Starting point is 00:37:55 Yeah, it was like, okay, this is unique. And like there's clearly a ton. Like, it doesn't feel. Did you see cameos suing Open AI? Like cameo that the celebrity video. Ah, that makes sense. Yeah. Buy a celebrity video platform suing open AI over the feature, which I don't know.

Starting point is 00:38:09 Do we the feature or just the name? The naming, the naming of the feature, which feels like, feels like a stretch to me. Yeah, I don't know. The problem with brand names is if you create a name that is too descriptive of what you do, you can't trademark it. So if we were to call this like the news show, we couldn't have any intellectual property around that. Did you see this engineer said a couple days ago, just submitted my resignation from META. Some might say that one year at the company is not that long,

Starting point is 00:38:45 but I survived like three rounds of layoffs so I think it's fair play for what it's worth my team is great and it was an overall positive experience but there are other better places to build AGI which hopefully won't be used for stepmom chat bots and infinite slop machines scathing

Starting point is 00:39:00 I wonder what the play is do you think that's like grow your account so you can be a founder, launch something the whole I don't know the slop it doesn't seem I don't know it's tricky So, Zuck is certainly, I don't think, going to take his foot off the gas yet. No, no way.

Starting point is 00:39:21 The vibes will have to get about 10 times worth. There's new reality labs hardware shipping every year. Like, there was massive pushback, and the stock, like, sold off about 50%. It was like really, really rough for a while. Wasn't it, didn't it trade down to something like? Yeah, like $300 a share or something. No, I think it was, I mean, so. Yeah, look at the five-year chart.

Starting point is 00:39:47 At the bottom of 2022, it was $90 a share. That's what I'm saying. Rough. And it was up at 300. So it traded from almost 400 to 90, which is down 70%. Like that is an insane drawdown. And then it just built right back up and it was bigger than ever. And so, I don't know.

Starting point is 00:40:13 I feel like people might be filling out apology forms for him at some point, even though it looks rough right now. Just something's going to wind up clicking, and also the core business is just going to keep ripping. So you just get so many more shots on goal. It's just an endless, an endless, you know, stream of shots on goal when you have a cash machine like the family of apps. Yeah.

Starting point is 00:40:35 Also, the stock's up 20% in the last six months, even, even, you know, factoring in this 10% drawdown. I don't know. I think investing in AI is not the craziest thing you could do in 2025 as a hyperscalor CEO. Anyway, Polymarket has some OpenAI IPO market up already. So no IPO by December 31st, 2026 is already at 55%. We will certainly be tracking this. But if they do get out, the market is pricing right now between 1 and 1.25 trillion in market cap, but 6% chance that it's up at 1.5 trillion, which would be crazy to go out of it. Not technically the biggest IPO of all time. I believe that belongs to Saudi Aramco. So oil is still dominant relative to AI, but still would be one of the most insane tech IPOs in history, obviously. Quickly, before we move on,

Starting point is 00:41:38 Graphite. Dev, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. Did you want to watch this video? Toby yesterday responded. Wait, Luke Key? Yeah, Toby, we covered his post where he said, having some AI follow you into your Zoom meetings or Google Meet for taking notes

Starting point is 00:41:56 as the digital equivalent of showing up to a meeting with your fly down. I said, I never let them in. I just let them sit there in the waiting room. Oh, I forgot. Sorry. He responded and said, I'm actually very pro meeting recording and AI summarization, but I'm not okay with bots joining as fake humans to accomplish this. It's a meeting between you and me, not you and me and some

Starting point is 00:42:17 startup's viral growth strategy. Granola is great. Gemini does this well in Google Meet. Hypernote is great and fully local, but use them with consent. My tweet is about how ridiculous and self-important it looks when you show up to a meeting with random bots as entourage. Yeah, I think... I do remember seeing there's a viral screenshot of somebody who showed up. Is this the screenshot where if somebody brought like five bots? It's hilarious. Entourage is actually kind of sick. Yeah. Wait, Tyler, this would be a good hack project. Like viral entourage on your, on your calendar that when you join a meeting, it just joins with like 25 other people. And it's just like, it just takes your name and just automatically does like, you're chief of staff, your head of security.

Starting point is 00:43:05 You're a PR person, your secretary, your driver, your dietitian, your, and it just joins every meeting with 20 different bots and just makes you look super important online. Maybe that'll happen. We should move on to this video of Jensen Wong, CEO of InVinci. I was going to go for that, the guy from Snowflake. Oh, okay, yeah, yeah. I mean, let's watch. The Jensen video is only seven seconds.

Starting point is 00:43:35 so look at this he's having beers with some absolute dogs he's hanging out with the CEO of samsung the CEO of hundi hanging out in south korea just having some beers crushing some beers of the boys this is how you do it people will call it a top signal i mean this is going to go so hard in a top signal vibreel that we will definitely create yeah when the time is right but i mean for now there have been crazier top signals and when in video was at like half of the market cap it is at now uh jensen was signing autographs and people were like that's signing signing a woman's shirt right i'd have done that too i don't know but it was a crazy moment and everyone was like this has got to be it so i think jensen is just

Starting point is 00:44:22 consistently putting out crazy clips that read his top signals to confuse the market keep you guess it that's right that's right he said doubt doubt me again he also says that korea has the best fried chicken in the world taking shots of Colonel Sanders, the rough out here for America. I don't know why Korea has the world's best fried chicken, but Korea has the world's best fried chicken in America is Korean. Whoa. I have had Korean fried chicken. It is delicious.

Starting point is 00:44:55 Something about the sauce is really, really good. Also, Jensen Wong in South Korea says, are there any Nvidia investors here? the audience cheers and he says that's why Korea is rich baby let's play this one play it loud do we get it? he else and video investors that's why Korea so rich he's got bits he's got he's feeling good right now I mean on on your five trillion day I mean come on let him have a little fun you have some Let them have a little fun straight after GTC. It's so wild that they hit $5 trillion yesterday, particularly because they don't report

Starting point is 00:45:43 earnings for another like two weeks. So like basically every other big tech company is on like the October 28th, October 29th cycle. So as of tonight after Amazon and Apple report earnings, we should, we have like the book closed mostly on all the mag seven, except for Nvidia. But Nvidia is still in the news. So Alphabet got crammed to the business section. Microsoft got crammed down to the business section. Meta made it to the front page of the journal because they sold off.

Starting point is 00:46:16 But Nvidia got the full chart of their progress. They got the Glazinator 3,000, the A1 from the Wall Street Journal because they just hit $5 trillion. And they have this interesting chart of how many days it took Nvidia to create a trillion. dollars in market cap. The first trillion took him 6,138 days. The second trillion, they did it in 180 days. The third trillion in 66 days. Then the fourth trillion was in 273 days. And then the fifth trillion in 78 days. So from 6,000 days, took him 20 years to make that first trillion. They say that. The first trillion is the hardest. They do say that. But then the next one comes in just 66 days or 78 days, which is remarkable. So he is on a tear, and

Starting point is 00:47:06 congratulations to Jensen Wong and all the folks over at NVIDIA for powering this AI revolution and absolutely crushing. Let's pull up this video of the Snowflake CRO doing a little street interview. Excuse me, sir. How old were you when you became a millionaire? This guy. Yes, sir. I've just been getting your Instagram feed. How old were you when you became a millionaire. Oh boy, four years ago. Okay, pause. Pause. Yeah, wait. So who is this guy again? He's the, he's the, the CRO of Snowflake, which like, Snowflake's been like a hundred billion dollar company for a while, right? Snowflake market cap. I thought it went out like years ago. I mean, maybe he wasn't liquid. It's $91 billion market cap company. And it's down too. Like,

Starting point is 00:47:56 Like it was trading higher. So this was the line that people were most confused about because I don't want to try to guess this guy's age to, you know, I won't pretend to know exactly. But I assume he's in his 40s, maybe his 50s. He was at VMware for 10 years as the vice president of U.S. enterprise sales and then the senior vice president. president general manager of Americas. Yeah. And so, and he was also the president of Broadcom for, from November of 2023 till now. Yeah, it seems like an absolute dog. And became the CRO at Snowflake this year, but still, uh, everyone I think is shocked of like, uh, how, how he didn't, you know, possibly pull together a million dollars, a million dollars by somewhere.

Starting point is 00:48:52 25 years in enterprise technology. That's what it says. 25 years. Like, what is he spending his money on? He must be just, like, obsessed with buying depreciating cars. That could be it. Maybe he gets a new Bentley Continental GT every year, like, clockwork. Maybe he's the one that's buying all the Lamborghini erosids. Maybe he's buying multiple. Maybe he doesn't like to drive the same car twice.

Starting point is 00:49:15 Yeah, that must be it. Maybe he gets a fresh car. It must be it. I don't like to drive cars with more than 20 miles on the odometer. Yeah. So I'm just going to cycle it out. I'll take the lot. Yeah, yeah, yeah.

Starting point is 00:49:24 Every 20 miles. say once you drive it off the lot, you lose half the value, well, it's the price I'm willing to pay. Yeah. Because I got to keep my net worth under, I got to keep it in six figs. To inspire, it clearly it worked. It clearly inspired him to grind harder. He's a Sierra at Snowflake. It's incredible. No, this must be, this must be some sort of, he misspoke because that. Okay, let's, let's play the rest of it. This does not make sense. What are you doing tech? CRO for Snowflake. Did you guys just go public? We went public five.

Starting point is 00:49:56 years ago during COVID couldn't ring the bell so this is our do you recommend entrepreneurs take their company public because there's a risk there as well when you bring in all that capital you bring in voting shares what do you think about going public is it such a funny question I have to snag him I'm sorry I promise we got 17 million fathers this is the best marketing he can do all right just keep it rolling hey we're keeping this shit rolling man sir real quick could I finish with you real quick for one minute we'll do 30 seconds 30 seconds what do you think he does not do 30 seconds he definitely does another like five

Starting point is 00:50:21 minutes based on the edit I mean cash flow is everything until profitability comes Then you get S&P 500 and you get a whole different kind of return. What does that mean too? Do I not understand that? What did you guys do in revenue this last year? So we're going to exit this year probably just over about four and a half billion dollars. Let's go! Disclosure! That's just a disclosure that he's not supposed to make.

Starting point is 00:50:41 Keep track of us. It's amazing. You have some good equity in the company? We're doing okay. As somebody who's an executive at a billion-dollar company. You're awesome, by the way. I watch you all the time. Congratulations on all your success.

Starting point is 00:50:51 This is an million. The best financial advice you can give to the younger generation, best money this guy shouldn't be giving back. He's like, step one. You can save your way to being financially secure in the future. You've got to build up wealth. Don't worry about W-2s. W-2 is not necessary. It took me 30 years to build up. This is crazy. This is tough to predict my friend in this world. This is actually hilarious. 12 to 18 months. That's all you got. Yeah, okay, give me the next 12 months. What's the number one thing people need to be adopting in their business right now? They're going to be using an actual. He's still going to 30 seconds.

Starting point is 00:51:25 30 seconds, accelerate revenue. It's all about moving fast. Do you think if business owners aren't leveraging AI, they're going to be left behind? Absolutely. Why? It's like the internet. If you're not on the internet, wave you're dead.

Starting point is 00:51:33 It's going to replace Uber drivers. Potentially good. Self-driving. It's going to change the world. It's so funny. Wild, wild interview. Yeah, so they had to file an emergency 8K disavowing unauthorized statements.

Starting point is 00:51:48 The projection exceeded the official guidance by $100 million. So they said that they were projecting 4.4 billion. He rounded up to 4.5 and that's a no-no. So he got himself in trouble. Stay safe out there. I just don't understand how he has on his LinkedIn. He has president at Broadcom full-time since November of 2023. He's not listed on the Broadcom website.

Starting point is 00:52:17 I don't know. But it is one of the funniest. Maybe he's kind of like so Humpurik-style moonlighting over there. Yeah. Who knows? We have the founder of, founder, CEO of Whatnot coming in the studio today. Is that correct? In about 20 minutes.

Starting point is 00:52:33 About 20 minutes. We have Grant. We're very excited. People have been debating whatnot because it sort of came out of nowhere is this Dachakorn e-commerce company. Chris Pike, former guest on the show, is taking shots on the timeline, putting the timeline in turmoil, calling it unregulated gambling. Well, we're going to get to the bottom of it. Is it gambling? Is it not?

Starting point is 00:52:57 He says, he feels like someone needs to write a deep dive on this, but we will dig in. I'm not exactly sure, but we'll try and understand the business, how they make money, how it all works. He's buying groceries gambling. Sometimes you go buy a watermelon, you're like, I don't know. It looks pretty good. You can't crack it open.

Starting point is 00:53:17 Once I cut it open, once I get home and cut it open, it might not be the best watermelon. but it look good. You're trying to knock on it. You know, you're trying to feel out the kind of the vibes of the watermelon. You do that with pumpkins right now around Halloween. That's right.

Starting point is 00:53:28 Halloween's coming out. People are gambling on pumpkins. It's going to be rotten inside. You've got to play the game. Play the game on the field. We, uh, Drove over on X, uh,

Starting point is 00:53:37 released a video. I guess he says Amazon will sue me for leaking this. He says, worth it. Uh, new, new, this is so funny. Putting the tiny Amazon package in the missile launcher that

Starting point is 00:53:51 just flies it and I love it just demolishes the door it just completely destroys the door like the door just gets like broken into a million pieces and this is innovative because how everyone's experiences right even though Amazon gets it right to your front door yeah it still be kind of mildly annoying yeah to have to go out and carry boxes in yeah yeah yeah first world problem yeah but this solves that totally yes you need to replace the door once a day yeah yeah so people were taking shots at a door dash with a new door dash robot will it get it to your door well here's your answer maybe maybe it needs a missile launcher on it I also love that this video it looks like it's it's in part a real video like those first frames with

Starting point is 00:54:34 the human hand that looks like they actually built the missile and then they switch over to just a 3D render and so there's like maybe no AI here but still some CGI it's uh it's very very hilarious oh so funny uh should we move into some of the Or neo-reaction. Of course, yeah. But first, let me tell you about Julius. What analysis do you want to run? Chat with your data, get expert level insights in seconds.

Starting point is 00:55:00 Thejulius.a. Yes, me after loading the dishwasher, instead of paying a robot $20,000 to do it for me, and it's Trump holding a ton of cash. Very, very funny. Also, people are planning to drip them out with gold chains or silver chains. And I think a fade on here, too.

Starting point is 00:55:22 Very cool. I mean, underrated the idea that if you get the 1X robot, I wonder how much you'll actually be able to dress it. Because at a certain point, you can't put a body kit, a crazy body kit on a Tesla because you'll just block the cameras and eventually you won't have self-driving. And I wonder. I put in Chrome hearts all over my knee.

Starting point is 00:55:44 Yeah, you're going to. I think that, but I think it's going to trip and it's going to shatter. No, no, no. One t-shirt? One t-shirt? I don't know. You get a baggy t-shirt in there. If it can't handle one baggy tea.

Starting point is 00:55:56 If it can't handle... It's just, you're going to have to pay for two Chrome Hearts T-shirts. Because you have to, you have to send one to the tele-operator. Because the tele-operator doesn't feel the exact weight of the Chrome Hearts t-shirt. They need to make, immediately make an account dripped out Nios, and it's just a daily feed of... The vibes around this company are just great. It's such a moonshot, and it's so capital-intensive. It's so difficult.

Starting point is 00:56:18 but I think everyone's having fun with it. MKBHG actually dropped a whole video. Rob, we've got to pull up this video, Rob, Frood. He says 20K to simulate the experience of a roommate with a ketamine problem. That's ridiculous. No, this is what we were saying that we were saying on the show yesterday. It's like, hey, Neo, you know, clean up all those wine glasses. And it's just like, yeah, just smashing everything.

Starting point is 00:56:44 I mean, it's going to be crazy. Neo, get ready to be good at cleaning up glass. sure. That is, that's really the final challenge for humanoids. Yeah. Cleaning up glass. One of the greatest challenges for humans. Yeah. Cleaning up glass. Oh yeah. It's a mess. It's like, it's an adventure. It's a mess. It's a high stakes game. I mean, the, the, uh, like some of the anecdotes from this robot are going to be hilarious. There's going to be wild stuff. Um, well, if you're looking for a robot to generate some media for you, head over to fall the generative media platform for developers the world's best generative image video and audio models all in

Starting point is 00:57:21 one place develop and fine tune models with serverless GPUs and on-demand clusters another post here with neo with got the Glock out now tell me where the seed phrase is got to make sure that the just another reason why they put the experts locally you definitely have to arm them this is important yeah should should humanids be able to open carry there's old corridor crew video about this that went super viral boss town dynamics they made a whole series out of it all cg i but they took uh renders of real boston dynamics robots and put them in like shooting ranges and this whole environment they tell this whole story and it just goes viral constantly and people think it's real even though it's cg what were you saying about mkbh oh mkbhd put out a video about neo 1x and and he's he's

Starting point is 00:58:11 beating the drum of like this is teleoperation it doesn't count and he's like he's going pretty hard on them. He gives us some caveats and he says, you know, hey, I wish, I hope this does work out. But some other people were kind of levying the critique on him that he's not in the arena, not trying to build things. But I mean, at the same time, we talked about this yesterday. I think MQBHD really has seen a number of these consumers. Yeah. And he's been burned on, on, he's been burned on on, you know, multi-hundred-dollar devices that should be a lot easier to deliver a great customer experience. And so I think it's fair for him to be concerned about a $20,000 product that probably, like, I, I'm, every day, I'm more bullish on 1X. Yeah. I think, I think they have a

Starting point is 00:59:06 great understanding of the internet. Yeah. They've been focused on, like I see, specific use case the home for a while. They're focused on teleoperation, which is the right thing to be focused on. Because even if it only

Starting point is 00:59:17 is good at teleoperation forever, that still could be valuable. I'm bullish as a futurist. Yeah, yeah, yeah. Not as a consumer advocacy.

Starting point is 00:59:27 Well, yeah. And I think that everybody should be going into this with the understanding that you are going to be participating in trying to pull the future forward.

Starting point is 00:59:36 I agree. I agree. Yeah. Yeah. It seems like I don't, I don't know if they're calling it a beta, but it feels like you should go into it, assuming it's a beta.

Starting point is 00:59:44 What are you laughing at? Didn't you have a joke? Did you ever post your joke? At least tell your joke on the stream if you didn't post it. I'll tell my joke. Tell your joke. A woman shoots her 1X Neo, then holds him underwater for five minutes.

Starting point is 00:59:56 Next, she hangs him right after they enjoy a lovely dinner. How can this be? What was John posting about that before? The woman, John, John Palmer, this was inspired by John Palmer's post last week, of like the AI agent being like, this is not my son.

Starting point is 01:00:13 Oh, yeah, yeah, yeah. A father and son create an AI agent company that gets to $20 million. They go to San Francisco. Yeah, a father and a son, a father and son build an AI agent. The father tweets that they have 10 million ARR and the son has rushed to San Francisco

Starting point is 01:00:28 to pitch the seed round. At the pitch, the VC looks at the boy and says, I can't fund this boy. He is my son. I'm going to this boy. And so the answer, of course, to my role, riddle. A woman shoots her 1X Neo, then holds him underwater for five minutes. Next, she hangs him right after they enjoy a lovely dinner. The answer to the riddle is, of course...

Starting point is 01:00:47 Turbo puffer. Search every bite. No. Serverless vector in full text. Search every bill from first principles on object storage, fast, 10X cheaper, extremely scalable. Major cliffhanger. No, she killed the robot, but is hanging out with the operator. Oh, okay, okay. At first, my read on it, I mean, my read on it was just like, it's ridiculous, and it's a play on that whole, like, riddle that confuses LLMs. I mean, there's some very funny examples of those. It's the strawberry thing all over all over again. It's just very easy to confuse these things.

Starting point is 01:01:18 Any way, P.E. P.E. Cooper over on X went incredibly viral, 25,000 likes on half a million views saying, my Neo-Robot, after I learned the third-worlder piloting them as Mad Schill. It's not going to be a third-worlder, remember. It's going to be an American tele-operated robot. What is this Wilmonitis post? He posted this Neo Robot in this image, and I understand it's photoshopped in there, but I don't understand why it went so viral.

Starting point is 01:01:49 People really like it. What is this a reference to? It's some, I mean, if you scroll down Brand of Jacoby's posting it's this? You think it's that they don't know? But it's such a real image. Have you seen the original image? Yeah, is it like a frat of frac guy? What is the, yeah. No, it's like a guy who's staying there and he, like, I don't know how to describe it.

Starting point is 01:02:11 He's like, looks all run down and everyone's like looking at him funny. Okay. I think the, it's kind of just like the Ghibli thing where it's like, oh, that's an image I recognize. Okay. Yeah, for some reason, I don't, I don't understand this image. I just don't look at that many photos of people drinking on porches, I suppose. But, you know, to each their own, I guess. um dev had an absolute banger uh wait till you find that mf 20k clanker in your kitchen acting too friendly

Starting point is 01:02:43 and i guess you you followed him after this post and he says damn after so long oh that's funny i got caught following him but i did like this post and i was like i got to follow this there's a dev i don't know wait after so long you you're not that big of an account i feel like i'm not that behind I don't know. I'm glad I found your account, though, Dev. You're very entertaining. You guys found each other. It's very sweet.

Starting point is 01:03:08 Oh, you already following. Okay. It's me, you, David Holt. For the followers, I know. And Jaya Seed. Very funny. And I like the dev replied to the post, banger. Just giving yourself a pat on the back is fantastic.

Starting point is 01:03:23 Okay. Eric Katana has a less not-so-PC post in here. Is it gay to have sex with a female role? robot teleoperated by a man? Elon Musk comes in with a crying emoji. I don't know. We'll leave that to the philosophers, I suppose. We'll need a whole new branch of philosophy. Eric Aton, Eric Tana replied and said, Elon, what did you mean by this? Which is Optimus's new hand upgrade includes 22 degrees of freedom. What does it mean? Anyways. Did this, did this Tane post get deleted? I don't know where this one went. I'm

Starting point is 01:04:02 I don't know. Let's move over to some bub talk. We have a post here from USV with a clip from The Legend, Fred Wilson. Well, we pull that up. Let me tell you a profound. Get your brand mentioned in chat you to tea, reach millions of consumers who are using AI to discover new products and brands. Let's play the clip from Fred Wilson. So the thing about bubbles is that there's just two things I think that people need to remember about bubbles.

Starting point is 01:04:28 First of all, bubbles provide the financing. for new revolutions. Like that book you described. And they provide it at inflated valuations so people can, I mean, look at what OpenAI and Anthropic and others are doing. They're raising money at astronomical valuations and then throwing all of that money building. We got to get Fred Wilson on the show. We can say they're overdoing it.

Starting point is 01:04:54 You know, this reminds us of the telecom overbilled of the late 90s, whatever. But the net result of it will be, there will be advances that wouldn't. not have been possible without that investment mania. So that's one thing to remember about bubbles. The second thing to remember about bubbles is after the crash, there's a renewal. And so if you can just ride out the crash and then stick with it, things will be even better afterwards. So, well, so the thing about bubbles is that there's just two things, I think. Basically just survive. Survive. Get in the winners. Ride in the winners.

Starting point is 01:05:28 invest in the companies that are durable and generation multi-generational skip the others skill issue at all just just don't make mistakes don't make mistakes

Starting point is 01:05:41 use Google AI Studio the fastest way from prompt to production with Gemini create an AI powered app faster than ever that's the second time I did that I read but

Starting point is 01:05:52 sometimes we skip around Dean Ball says my sense is that selling black Well chips to China would quite possibly be the most unpopular tech policy move of the Trump admin, especially on Capitol Hill. It's plausible that the long-term, really even near-term result will be much more compute regulation. I like this guy, Dean Ball. Tyler, do you know Ball? I think you've already made this joke. Yeah. But have you gone down the Ball rabbit hole? Have you read any of his more? I've read some of his longer post. He's coming on the show tomorrow. Pretty spooky day to come on the show. Yeah, it is.

Starting point is 01:06:32 That'll be an interesting interview. Yeah, I feel like the, didn't, Trump went to China just yesterday, right? Or where did he actually meet Sijan Ping? I don't remember. He's not going to China. No, no, no. But he met with Sizh Jinping and immediately let up.

Starting point is 01:06:48 South Korea. Oh, South Korea? Okay. Oh, Jensen's there too. That's fun. I have no idea anymore. I feel like if you were, if you were, if you were, if you were anti-selling GPUs to China on the basis of AI Doom, you have to update towards, it's actually kind of chill to sell them to China, right? Like, debate this with me.

Starting point is 01:07:15 Wait. Okay. So, the reason, the, one of the reasons people said, let's not sell GPUs to China was if they get GPUs, they will get super intelligent. They will steamroll us. They will be all-powerful. And super-intelligence will be communist. It will be state capitalist. It will be not love and free speech.

Starting point is 01:07:35 It'll be all the things that are un-American and we don't like. Then the last couple of years have happened and played out, and it feels like the fast take-off scenario feels less likely. And so that should update you to be like a little bit less worried about it. No? less worry about selling to China because it's not nuclear weapons. It's not the Manhattan project. It's nuclear slop. It's slop. It's erotica. But it's also great knowledge retrieval, really cool image generation, really cool audio generation, summaries. It is definitely

Starting point is 01:08:19 a great productivity tool. But it's not going to be, okay, they have. They have. it, they got the GPUs, they got, you know, a GPT-5-level model, and now America just loses. Like, and China is just dominant, right? Yeah, I mean, I think, you know, the leap will take is that it's still like, I don't think in his scenario, like, the labs have even been nationalized yet. And he's, like, I don't think the capabilities right now merit the nationalization. Yeah. But I think a lot of people still think that, like, it's like, you know, two more years, then

Starting point is 01:08:53 will be at a point where, like, it would make sense for there to be, like, major geopolitical conflict just over the AI question. So I don't think it's, like, the people who were super, like, bullish on that idea, I think are still, I don't think they've been fully, like, disproven yet. Yeah. I don't know. It seems like, I mean, we'll have to talk to more people about, like, how that's shaping up because there's also the weird dynamic of, like,

Starting point is 01:09:18 even if we wanted to sell Blackwell to China, would they even buy it? because they seem very interested in their own supply chain. I think they can do both, you know. They can buy Blackwells today and they can still. I don't know. I mean, the more you buy, the less incentive you have to build locally. Like, that's just true. Like, we buy solar panels here.

Starting point is 01:09:40 There are no good solar panel companies. I don't know. There aren't. Yeah, but they're like, America has been like, yeah, we're buying them so cheaply. Like, how do you get a company off the ground in a market that's just getting destroyed. We ran this example with GoPro. Like America had a company there and got steamrolled. And so it's like you need to be over investing like crazy and America just doesn't have the appetite for that. Yeah. And I'm just saying China has has more of an appetite to have a, you know,

Starting point is 01:10:11 entire industry, you know, backstopped and, you know, money losing for a sustained period of time. Yeah. A couple more posts before we bring in grant. Uh, zero has. We talked about this briefly yesterday. MasterCard is set to acquire crypto startup ZeroHash for nearly $2 billion. Imran Khan over at Alliance says ZeroHash powers most crypto-dity fiat on-off ramps holding money transmitter licenses and MSB licenses across the U.S. Most on-ramps you use today likely run through Zero-Hash. This is a pretty big deal. So MasterCard getting into the game.

Starting point is 01:10:48 In other news, Kimball Musk says, please vote your Tesla stock. There is no one remotely close to my brother and no CEO on Earth that would accept this package. It is a massive win for you as a shareholder every way you look at it. Elon says, thanks, bro. These are the original technology brothers.

Starting point is 01:11:08 Oh, you're true. What does he mean by no CEO on Earth that would accept this package? I can give some more context. So Gavin Baker says my firm at Trades Management will be voting in favor of Elon's performance-based compensation package. would prefer that every company I invest in have a comparable plan.

Starting point is 01:11:24 Sure. I believe shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value. The basic logic of these plans is the CEO gets 10% of the incremental value creation if they 10x the stock with a 2x hurdle. So shareholders get a 900% stock increase and the CEO gets an incremental 10%. The first Tesla plan incented Elon to 10x the value of Tesla. He achieved all the milestones and may never be paid for this. the Axon plan incented Rick Smith to greater than 5X the value of Axon and he did. And when milestones aren't met, such as Farfetched, then the CEOs don't receive the payouts.

Starting point is 01:12:01 The new Tesla plan is arguably better than the first, as it also includes financial and technological milestones in addition to market cap-based incentives. And again, so Atreides is riding with the brothers. Yes, but what do you think Kimball means by saying no CEO? on Earth would accept this package? Like, I understand that I completely agree with the first part. There is no one remotely close to Elon for Tesla. Like, I'm totally in on that.

Starting point is 01:12:33 I'm in on the idea of incentive packages. I like that as a structure. It's just that the targets are so aggressive that most CEOs don't think they would achieve them as they would accept them. Yeah, they'd be like, no, pay me for 20% game. Yeah, how about I get, how about I get compounded 10% a year? Yeah, yeah. How about I do this through that?

Starting point is 01:12:51 Like, if I go to the CEO of Target or something and say, like, okay, you won't make a dime unless you 10X the stock, they're going to be like, what are you talking about? No way. Yeah, that makes sense. Thank you. Well, let me tell you about linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development stream like issues, projects, and product roadmaps. Let's start building.

Starting point is 01:13:15 Let's go to Cheng Liu. Have you heard this Scott Forstall? stands. There's a lot of Scott Forstall stands out there. He was the senior vice president, iPhone software. 13 years ago, he was apparently fired from Apple after the disastrous launch of Apple Maps. What mapping app do you use on your phone? I am an Apple Maps guy. Me too. I pretty much always have been because I used to be. I switched to Apple Maps, but only like a year ago. Yeah.

Starting point is 01:13:51 But then I was on Google. I was on Waze and Ways was incredible because you'd find all these like secret behind the scenes ways. And then I think a lot of local neighborhoods basically said like, hey, we actually live on a nice quiet street. We don't want Ways funneling a thousand cars through our neighborhood during rush hour. So can you route around us? And it kind of put everyone back on the normal routes.

Starting point is 01:14:16 I just always like that you can see the maps on your home screen without unlocking your phone. And that was enough for me. I agree. I would stuck with it, even though sometimes it would take you on a little bit of a goose chase. Yeah. Well, Ways is killed.

Starting point is 01:14:29 I was never a fan of the goose chase. I'm like, I don't, I don't want to. You're anti-goose chase? Like in the Ways context. Oh, I love a Waze goose chase. I don't want to go on a street race through a bunch of 25 mile an hour. No, the best is when you're on Ways.

Starting point is 01:14:43 I agree with you. But the best is when you're using Ways. And it's like, hey, you're on the freeway. but why don't you get off and get back on the freeway seven times over the next six miles so you can save 45 seconds it's like ways i don't want to do that at one point ways so they really should have a slide like an aggress like an aggression slider they basically do so if you go into the ways settings there's one where it's like okay avoid avoid toll roads it's like i understand that it's like i'm driving across the town and i don't want to pay five bucks like i want to save money yeah avoid toll roads then one was like avoid freeways and i don't know i guess it's like avoid toll roads then one was like avoid freeways and i don't know i guess it's like Maybe if you get motion sick or something, you don't want to be on freeways. I met someone recently that doesn't drive, they didn't grow up in L.A. They moved here and they just avoid all freeways. So they only take street law.

Starting point is 01:15:29 I mean, the self-driving cars often avoid freeways because higher speed accidents are more risky. But so for a while, I don't know if this was actually in ways, but there was a moment where you could go in and check, I want to avoid toll roads. Two was I want to avoid freeways. And three was I want to avoid dirt rows, which was hilarious because I can just imagine driving through Los Angeles. And all of a sudden it's like, yeah, if you cut across this person's front law and you can save 30 seconds. And so, I don't know. Hot take is that Scott Forstall, like Apple Maps was this kind of disastrous launch where it really didn't work as anywhere anywhere near Google Maps. But eventually they turned it around and Apple Maps became a really

Starting point is 01:16:14 great product for the iPhone. And Cheng Lu says, as someone with a bit of insider info, sorry for baiting, I can tell you that the current trajectory for Apple would likely have been better off if he ended up CEO, look up his background and interests, I'll forever be a forced all simp, the guy can code and coded the right things. And so it's very, very interesting. I wonder what he thinks about iOS 17. Yeah, I mean, it, like you can, you can, you can write. this counterfactual and say, okay, if you put the software guy in charge, maybe the software

Starting point is 01:16:52 is better. But what does that mean for the hardware, the supply chain, the trade war? Like, would Scott Forstall have been able to get through the crazy trade war? I mean, Tim Cook could have been a goaded COO right hand to Scott. That's true. That's true. Maybe you wouldn't have, maybe iOS 17 wouldn't be such a dumpster fire. I don't think it's that bad, actually. I get multiple times a day a reminder of how bad. I think it will, I think you'll get used to it over the next six months. I've gotten used to it, but I still can appreciate how bad it is. But we have Mark German's coming on the show next week.

Starting point is 01:17:31 Yes. And I'm excited to talk with him about it. Well, we have our first in-person guest of the day while he hops on the show. Let me tell you about numeralhq.com. sales tax on autopilot spend less than five minutes per month on sales tax compliance thank you so much for hopping on the show great to meet you likewise good meet thank you uh can you fellow L.A technology brother yeah not many of us yeah many uh here I'm gonna have you right uh why don't you introduce yourself uh and kind of describe the shape of the business today

Starting point is 01:18:08 and then I'd love to go back and kind of hear the whole the whole entrepreneurial journey sure So I'm Grant LaFontaine, co-founder, CEO of a platform called What Not. What Not's a live stream shopping platform, an online marketplace. The best way to think about it is we sort of enable anyone to create like a digital brick-and-mortar store. So as opposed to, you know, any seller can come on. They can then sell through live video, which means you sort of like this. You can stand up. You can be in your store.

Starting point is 01:18:36 You can walk around your store. Sell good. Sell anything. And so we have people on the platform. selling comics to paintings to plants to women's fashion everything in between and it just ends up being incredibly good way to build a business very similar to like a brick and mortar retail shop it's so interesting that that digital commerce has just and doesn't look like yes there's items on the storefront that you can buy but imagine if stores had no employees in them

Starting point is 01:19:07 and you couldn't like in real time quickly ask yeah ask a human like, hey, like, you know, what size do you recommend here? Or do you have this? Do you have this in another, you know, all these different things that ultimately drive like higher purchase volume in a retail setting that we just generally don't have online, but do exist on whatnot? Yeah. What was the, uh, take me back to the start of the company? What were the, what was a competitive landscape like at the time? What was the, uh, was this something that was like working internationally? And you were like, oh, of course. Of course. That was the whole, that was

Starting point is 01:19:39 whole thing. It was like everyone was like looking at China and and you look at how some of China's retail giants got started. It was like selling fruit and vegetables. Yeah. Like in live, and it's something that Americans just don't understand at all, you know, buying like bananas through like basically a farmer who's just like, yeah, check out these bananas. I actually imagine you buying bananas through I would, I would do that. In Malibu. But anyways, but yeah, walk us through kind of like the early days of discovering kind of the opportunity. Yes. So one of the funny things with us is so the live shopping market in Asia is like monstrous, you know, like nearly a trillion dollars in sale. And it's been big for a long time? So I think it took off in like a little after 2015 or so and it's just like

Starting point is 01:20:21 ramp to a crazy extent. And when did you get started? What year? So we started What Not in 2020. Okay. Okay. So there was like some, there were examples out there. Yeah. This can work. Although we had no idea. Yeah. We literally had no idea. So when we started What Not, it was me and my co-founder Logan and we were working at some bigger tech companies. We'd both started businesses before. We're like we like to build yeah like that's sort of the thing we enjoy to do yeah and we're like we don't like what we're doing now let's go build something new yeah um and we were both really into buying and reselling things online collectibles so you know at one point we were selling sneakers and you know in that whole world and I my first business was when I was seven and I um started saying

Starting point is 01:20:59 Pokemon cards online there we go there we go I love it I was selling DJ equipment he was at the last YC batch we were asking every founder that we interviewed like how they started what their first business was and a lot was like somewhat collectibles. He's like running Fortnite servers, collectibles, like there's just something about, I don't know, I have kids, I don't know if you have kids, I want to get my kids to like do business online ASAP. Well, yeah, and people that don't, people that are like, I want to start a business, but I don't have an idea.

Starting point is 01:21:27 It's like business is just making something for one price or buying something for one price and selling it for a higher price. That is just business. Yeah. So just sneakers or collectibles, poker cards, whatever. It's just very simple. So I feel like a lot of the media platforms, they'll start with just like the idea of like, I want to share photos online, Instagram, or I want to have a place to host video online YouTube.

Starting point is 01:21:51 And then over time, the commerce aspect comes in and becomes more feature rich, whether it's, you know, tagged products with affiliate codes or sponsored content or an ad network. Like, how mature was your thinking when you went to write like the first pitch deck or the first Did you go through YC? We went through YC. Yeah, so the YC application. Did you apply with this idea or did you guys like take a little bit of a... So I'd say we had like a quasi pivot.

Starting point is 01:22:18 Sure. Which was so early on the thesis was there's something around collectibles in social commerce because a lot of why you collect is not necessarily for the object, but to sort of hang out and talk to people about your interests. And so our initial pitch was basically a social commerce like marketplace for Funko Pops, which are like little final dolls. And that was it. That's what's in the YC application.

Starting point is 01:22:43 And we didn't have any idea we were going to do video. It sort of looked like a standard marketplace with a follow button and a cool handful of features. So was it creator-led in the sense that I as the collector come and share pictures

Starting point is 01:23:00 and inventory and details about particular products that I have in stock? Yeah, it would basically be that. So you'd have a profile. You could follow it. You could post your stuff. There's DMs. Got it.

Starting point is 01:23:10 You could chat with people. Yeah. And how many investors, obviously you managed to pull around together, but how many investors passed because they were like, sorry, I'm not backing your, like, niche toy marketplace. Yeah, I mean, it's funny now because the amount of money we've raised is, like, ungodly large, you know. But not even, not even. Not even relative to the valuation.

Starting point is 01:23:33 I mean, you've raised, like, just under a billion dollars. You're sitting at 11 billion. seems like also the stakes right now for for raising an ungodly amount of money are like if you if your business doesn't work does everyone in the whole world lose their job and as long as you're not there like have fun or people are like I have two get hard stars on my projects I'll take two billion but yeah so so so when did this when did the video aspect come in what were the or the thinking and like how did you how did you think about the first design and then start iterating against it.

Starting point is 01:24:07 Yeah, so I'd say like I'm a purist when it comes to building product, which is like you, you know, stay close to your customers, you talk to your customers, and you figure out the problems they have. And so as we were building our Funkopopop marketplace, we just knew everyone on the platform. Yeah, yeah. Like we knew all the sellers, we were friends with them. Sure.

Starting point is 01:24:24 And we could see them hacking sort of social media video in interesting ways, in particular trying to run like auctions in live video. Oh. So they'd be going live on Twitch or other platforms and then selling on. on whatnot. Yeah. So the actual real initial example is we were following, I was following a seller on Instagram and I tapped into their Instagram Live and they were trying to hold auctions

Starting point is 01:24:49 in the comments. And the latency on Instagram Live video, at least at that time, was like 30 plus seconds. So they basically have like put up the item, run a clock and then once the clock stopped, they'd start taking the bids in the comments. And I invited my co-founder and we got into a bidding war and it was just like really fun. and we're like, huh, why has no one built? It's sort of broken. Yeah, like, why has no one built mobile video auctions?

Starting point is 01:25:12 Just sort of felt obvious. Yeah. And then... People don't realize, unless you've bid on an online auction, you have no idea how thrilling. Thrilling it is. So I've bought cars on Bring a Trailer. And once you start bidding, it is just,

Starting point is 01:25:31 there's nothing more entertaining on the entire planet. The more I get to know you, the more you're like, actually, gamification really works on me. It does work on me. No, it's just, it's, it's incredibly, it's incredibly fun. And that's even in the context of bring a trailer, which anybody that's used bring a trailer, like, maybe it uses, goes on the site all the time, but they're like, this is so underdeveloped in comparison to every other application that I use. And so even just the dynamic of, like, bidding against someone else and looking at their bidding history and saying, okay, like, Like, this guy just bids a lot. He doesn't actually buy cars.

Starting point is 01:26:06 Okay, this guy's bought, like, six cars in the last six months. Like, I've got a real competition here. So, that's amazing. But I still, yeah, it's still the percentage of people that have actually, like, done, like, bought things online via auction, I think is relatively, it must be relatively low still. Yeah. And so, so, yeah, we basically. How quickly did you ship the, the, the, your version of the live auction product after that? Four weeks.

Starting point is 01:26:31 Okay. Yeah. Correct. They were good APIs around that time. because I remember it wasn't Clubhouse doing live audio, and they were partnered with some new company that was able to kind of do it like Turnkey. Yeah, it was this company of Gore, I think,

Starting point is 01:26:46 the Clubhouse was using. We actually didn't, again, we made a bunch of mistakes. We didn't know anything about China. We didn't know anything about the low-latency live video APIs. So actually stood up our own, like, low-latency live video surfing infrastructure. If we hadn't, we probably would have built it in a week. Yeah. And it was not.

Starting point is 01:27:03 very good. But, like, good enough to get it. Good enough. And the product was so clearly had product market fit. Yeah. I'm not entertaining, as you guys can tell. And I did the first live stream because we, you know, we got to like make sure it works. And I sold $5,000 with a funco pops in two hours. Wow. And so you're like, unentertaining human being. So I sells that much. We basically dropped everything the next day. And we're like, we don't know what this is, but this is really fun. This is it. Drop everything we're all in. Yeah. Okay. Yeah, and $5,000 doesn't sound like a huge amount of money, but when you look at that in the context of an individual seller that probably has decent margins on that $5,000, and then they start realizing, I can do this every single day, and this quickly just becomes like a real business out of like, could be out of nothing. So from there, help me understand the growth mechanism. Is it people screenshoting and sharing to other platforms? Are you running ads? Is there a referral program? Is there SEO? Like,

Starting point is 01:28:01 What's the flywheel because it's... Well, and part of it, because I imagine, like, the people that are obsessively buying, like, funco pops are, like, pretty, like, they know where they're being sold, right? Like, these are people, like, it's not like... Well, it's the same thing with G3RSs. Like, people know, I'm going to go find that on bring a trailer. Yeah, or their handful of other platforms. Yeah, it's like people that are obsessive about a category are going to know all the surface area

Starting point is 01:28:27 where selling is happening and just go to where the inventory is. Yeah, is that roughly? that yeah that's roughly correct for you know for almost the first three or four years of the business we basically just focused on collectibles and enthusiast categories which we sort of broaden out maybe like if you're into cars and things like that and it was fundamentally because these categories people like to talk about what they're buying where they're buying it and so we lean for the first four years we basically just grew through referrals and word of mouth was it pretty smooth and what was it like with the investors once the product was clearly working because I remember there was so many VC think pieces on live shopping and how it had broken out in China and I imagine when they met you

Starting point is 01:29:11 they were like Lisan Al-Gai I finally I finally but there was also there was also like in the early days like I remember there I won't there was like pop shop was also very hot I think they raised around from like benchmark

Starting point is 01:29:27 around the same time as you guys so it seemed like very competitive at the time Also, Amazon owns Twitch. They have selling infrastructure. There were lots of reasons why someone else might do this. The classic, like, what if Google builds it? What if Twitch does it? What if someone else does it?

Starting point is 01:29:42 Yeah, I'd say probably at least for even the first couple of years after we did live, we weren't like particularly hot. Yeah. A lot of people like looked at the side that we started in, which was, you know, all collectibles and then sort of compared it to Asia and they're like, is that really the same? So like, you know, a lot of it was people. holding, you know, doing auctions and they're not showing their face on camera. They're just show, like, the Funko Pop. Oh, okay. And so, and a lot of the other companies...

Starting point is 01:30:09 And that's like, they'll put the product out and wait until it sells and then put a new one up there. Yeah, they'll, like, talk to you and you'll just, like, look at the product. And you can... And meanwhile, in China, if people haven't seen these videos, it'll be like, they'll show, like, they'll just take a product, hold it up, move on. Take a product, hold up, move on, right? Yeah, we have those... We have those people now. It's crazy that that works at all. Like, that feels like such a worse experience than just an e-com. commerce app with like a bunch of drop downs and filters. I don't know.

Starting point is 01:30:36 Something about seeing a product in real life. I think it inspires like some element of like trust even than just seeing like a digital photo or render. Yeah. I think what we see is that people start to build relationships and trust the seller. So as opposed to like in the previous e-commerce world, where is it coming from who you don't know? People come to whatnot because they build a relationship with a seller.

Starting point is 01:30:59 It's sort of like, I don't know, a local. shop where you go and meet someone, talk to them. Yeah. And so it just builds a lot more trust in the system. So in that sort of like, it seems like there were a few years where like you weren't as hot as like maybe you should have been. Was that driven by just not fully monetizing as well as you wanted or like choppy growth? Were you cyclical at all?

Starting point is 01:31:22 Was it like the interest rate like crisis and SUV collapsing that like put a damper on the hype? or was it all pretty smooth? Yeah, because I, because, because my, my memory of, of the whatnot hype cycle was like, okay, wow, this company has like a massive valuation, but I've never used it. And I think that's what a lot of people like, recognize. Like, people are like, something can't possibly be real unless I'm using it every day. It's a zero unless I use it. But you guys had this insane valuation.

Starting point is 01:31:53 And then every once in a while, you're not, you don't go on a lot of podcasts. At least I haven't, I haven't heard you on one before. but like you just pop up with like a massive up round and then just pop up with another massive up round and so I guess like what we're trying to get out I think is like has the growth been like relatively like consistent and smooth or has it been like unlocking new categories unlocking new use cases that have just really continued to to drive the business in general it's been pretty smooth we had one slow patch probably coming out of COVID where growth during COVID if you were like a consumer entertainment company was just, no one had anything to do. And so I think we were

Starting point is 01:32:34 sort of lazy in our growth motion because it just basically we didn't have to worry about growth. They just sort of like boom. It's happening to you. And then we had to get a little bit more deliberate, but I don't think we've ever grown under like, you know, top line sales. I mean, revenue is probably never grown under 90% a year. Yeah. In the entire history of the business. That's amazing. And so it's been pretty good. And there's when people, like, there's moments and times where people get excited. So for a long time, we're like, oh, this is niche, it's collectibles, and then we got fashion going and working. And I'd be like, oh, that's exciting. That's a big category. And is fashion driven mostly by reselling, existing inventory, or are you partnered with specific

Starting point is 01:33:10 brands or fast fashion companies? Like, what's the shape of the market? Yeah, I mean, it's pretty diverse. So there's some brands selling now. There's brick and mortar jewelry shops selling. I would say the dominant sort of theme in in fashion is probably like old season inventory or overstock. So people, and the reason it's really great is it's great for whoever owns that inventory because they can collect higher margin by selling it on whatnot. And if you're a buyer. And that's the individual brand. A lot of times it's, it's somebody that goes to the brand.

Starting point is 01:33:45 Yeah, yeah. You think like T.J. Max style stuff. Yeah, yeah, yeah. So people getting access to T.J. Max style inventory and it's multi-brand. It'll be like Lulu Lemon, but. from last year. So it's like 60% less or something like that. Yeah, 60% less and the deals are incredibly good.

Starting point is 01:34:00 Yeah. So people are kind of building their own business on whatnot from scratch, but then scaling to a point where they kind of have an operational relationship with different brands and they have a whole kind of strategy and probably pretty stable earnings as a creator. What's the competitive landscape been like over the last couple years? Because I know it's been widely reported that TikTok's been. willing to just burn billions of dollars trying to get shopping working on their platform you have there was another one i can't even remember the name that popped up with crazy incentives that was like

Starting point is 01:34:34 i don't think it was live but what what's the one that flip flip so flip popped up and they were like free money as a service we're just going to and that that was like i remember people were like people would send me a text and it's like i just sent you two hundred dollars on flip and so i'm like this can't go that's not going to last that long And so you've had a number of people kind of like, you know, trying to at least like enter this like overall kind of like entertainment meets commerce market. But how have you got? It sounds like it's just been continuing to execute against your roadmap. Yeah, we're pretty like, as you said, I sort of don't go on much podcasts and, you know, maybe we'll pop up every once in a while with a fundraise.

Starting point is 01:35:16 We just try and stay really heads down and just deliver. Our thesis has always been it's going to be a competitive market. And so how you're going to distinguish yourself as consistent delivery and then, you know, continue to add value to customers every day. And, you know, our belief's always been there's room for a purpose-built platform here. Like, say, TikTok, amazing product, but people are going there to, like, watch videos, not necessarily shop. And I think that pattern is really hard.

Starting point is 01:35:40 So we've always believed there's opportunity for a player who's purpose-built to be world-class at shopping and sort of, you know, shopping meets entertainment. And I think over the past six years, we've sort of largely proven that out. Is there a Mr. Beast of whatnot? They're a true power law creator that's just a whole order of magnitude above everyone else in terms of seriousness and operational excellence, size of team, like that type of thing. There are a few people who are, like, I think whatnot's very similar to other entertainment platforms. So I spent like six years at YouTube.

Starting point is 01:36:18 You know, it is power law oriented. And so the handful of people. who are in the tippity top tier. You know, you're looking at operations with like 100 plus employees at this point. So pretty big. That's pretty remarkable, yeah. Why do people say whatnot is gambling?

Starting point is 01:36:35 It feels like collecting things that just like, I mean, obviously there's a little bit of risk you buy GTTRS and you find out that it has a broken, you know. Yeah, and I think to be more specific, people are saying, like, certain sellers on whatnot are focused on. Mystery boxes?

Starting point is 01:36:48 You know, mystery boxes, right? Like the power packs from games? from GameStop and so you would have to like also say that yeah yeah yeah do you have like policies around it do you have a personal stance like how does that like yeah because game gamification too is like that is something that sellers want they're like make it easier for me to provide an entertaining shopping experience yeah yeah yeah so first off there's no gambling allowed or whatnot right like it's illegal and whatnot okay uh you know our trust and safety and customer experience team is probably our biggest team at the whole company.

Starting point is 01:37:22 So we do take this stuff like very seriously. Let's hear for no gambling. We love that. Let's here for trust and safety. It's here for trust and safety team. They work really hard. We know it's a serious expense. Very good.

Starting point is 01:37:33 But yeah, so none of that's loud. I think, you know, people open packs of cards. It's fun. I opened packs of cards and I was a kid. I sold Pokemon cars and I was a kid. And so we try and give sellers the flexibility to run their business in the right way. Sure.

Starting point is 01:37:44 Well, making sure it's safe for customers and we don't, nothing illegal is allowed. Yeah. And so there are, there is an element of randomness if you're selling just, like, I used to buy the booster packs of Magic the Gathering cards as a kid, and like, sometimes you

Starting point is 01:37:58 get something that's a foil or something, but that's very different than putting money into the whatnot platform, participating in some sort of ecosystem, then pulling out dollars directly. Like, that's what gambling would be, right? Yeah. Yeah, that means that sounds. Thank you for.

Starting point is 01:38:13 What categories are you guys working towards that you're kind of most excited about? You said, you unlock fashion? So the future category I'm most excited about, it's still early innings, this food and drink. Okay.

Starting point is 01:38:27 That feels like really hard to sell online. Well, so it would be in a static world, but in a video-based world where you can like, you know, so like the, we have a, there's a farm outside of San Diego

Starting point is 01:38:40 who sells organic citrus. The bananas. Yeah. Back to the bananas. Back to the bananas. And so like I'll order from them and like the next day at my doorstep will be like organic tangerines and things like that and so I'm like I'm really into I'm a foodie

Starting point is 01:38:55 and I think everyone increasingly is more conscious around what they eat where they get their stuff from and so I think being able to eventually you know get fresh meat from a farmer get fresh fish from a lobsterman from Maine there's a bunch of stuff we're going to have to figure out logistics wise and and all sorts but that's like food is crazy but wouldn't wouldn't you rather like see it get caught and then at your doorstep the next day Starlink, with Starlink, the fisherman's going to be out there and be like, all right, I'm just pulling up a crate of crab. Who wants it? Who wants it? That's wild. And then he pulls it up, and there you go. Yeah, that's, I can see that. I can also, there's so many other categories of, like, collecting. I don't know if these are popular yet, but eventually I could imagine, like, a wine collector is going on there. And wine is something that you want, if you're buying it, like, unless you're like just an insane expert, you probably want somebody. part of going to a wine shop is being able to talk to the associate there and they can talk through

Starting point is 01:39:56 like the origins and the winery and what made what made you know a certain case of wine like special things like that so wine makes sense i think other categories of like collectible alcohol like you know whiskeys and and things like that what about cars cars would love dreaming of the day to do cars i've wanted to do cars for a long time we'll eventually get to it um The truth is we're growing so fast and so we're having to like make sure the core user experience is really good before we get outside of our cities. How rigid are you? Because Twitch just has, you know, like just chatting or like IRL for like it's a catchall. If you're not playing Fortnite or Minecraft, they have a catch all. And then people kind of go and innovate in that category.

Starting point is 01:40:41 Is it just like I will get deplatformed if I try and sell my car and whatnot? or is it just like you're not ready to say like it's actually a good experience but it is possible to do cars are tough too because i i mean think of you know you can buy a new car yeah it could be a lemon you can buy totally you know an existing you know it's a used car and you know even after you know on bring a trailer there's like you buy it and then you can get pPI you win the auction then you're getting the the the ppi done and then at that point you can back out you don't get your, like, I guess, like, fee back, but at least there's, like, some protections there. So when you up the, when you up the price, like, you know, 1,000 X, it just gets.

Starting point is 01:41:23 So theoretically, today, if you adhere to our platform policies, you'd be able to do it. You could. Theoretically, it would be almost impossible. Sure. Because you'd have to be able to pay for it with your credit card. You'd have to, you know, like, ship it in two days. It's like, I will be driving this across the country. It's like, a challenge accepted.

Starting point is 01:41:42 Cannonball across the country. country. We have sold some cars on whatnot. There's been more for collectible cars for specific events. So like the creator of Spawn sold like the Spawn mobile. And so we just did some custom stuff there. But in practice, if we saw people starting to sell cars, they'd likely butt up against some of the just general policies we have today. And so we'd have to go and make the platform suitable for it. How is it like, is the majority of the team in L.A.? So we're all over the place now. So the...

Starting point is 01:42:15 Are you a true COVID company? Yeah, we're a true COVID. Even before, like, we started a handful of months before COVID. And our initial team, our designer was in Italy, two engineers in Brazil, and me and Logan in L.A. And so we've always sort of been distributed on an introvert. Did you go to YC up in the Bay? We did go to YC up in the Bay.

Starting point is 01:42:33 And then we couldn't raise money. And so we moved to Phoenix. No way. Yeah. Because we had like no money and we just ran it, ran the company from our garage in Phoenix. And then I would, I would, uh, off air, I would love to see who passed because, uh, I mean, even to, to a lot of people's credit, I mean, I saw shield, uh, from BTV posted yesterday. Like, if I got pitched, uh, whatnot and they were selling like dolls, I would have like,

Starting point is 01:43:00 almost certainly passed. Yeah, look, you would have, the only way you would have ever invested in whatnot in the early days was if you knew me or Logan deeply and had worked with us. because that's the only thing that would have given you confidence. We always had the confidence because we, you know, we thought we were capable of doing a lot per period of time, but we're not, I didn't know that many people. I hate networking and you're coming here with like a funco pop thing. So I totally, do I harbor like a little bit of like, you know.

Starting point is 01:43:30 You're getting the last laugh. But, you know, like I still think it's early, so I don't even worry about it. I just sort of like blinders on, we got to deliver. But yeah, unless you knew us, you would have sort of been a fool. to invest. How did the Logan Paul investment come around then? I think we got introduced to him through Andreessen. So Andreessen did our Series A and then helped get us connected. And he was really into Pokemon cards at that point in time. And so it was sort of like a natural fit. He's been on the platform a handful of times. And so it was a good add-on investor. Yeah, I was reviewing his

Starting point is 01:44:05 post talking about the investment. And I was like, that makes so much sense because he's been so immersed with even early stage, like Vine was so primordial in terms of like what TikTok became. He's been so early to all these platforms. It makes sense that he could see the vision better than a lot of other people. How international is the business today? I think we're in nine countries now. So I think we got into international maybe about two and a half years ago. It's a really big focus for us. The international business is doing very well. And I think you'll see us to continue to expand. This year we're going on the offensive. Are we going to China? We're taking the fight with them. We're not. We're taking the fight with them.

Starting point is 01:44:40 We're going to TikTok's front door. Bank dance, you're on notice. We'll go anywhere where we think we can add customer value. Yeah, that makes sense. How crazy has the Lubbubu side of the business been? We covered it. What is the Lubbub? So we, I think we literally, by the time we did a deep dive on it,

Starting point is 01:45:01 I think we may have, like, top ticked that trend. Maybe they're still growing as fast as they were. but uh i mean it pretty much came out of nowhere and then was doing hundreds of millions of dollars in sales on whatnot it still is i think wow um annually yeah annual annual annual like if you were you're like now daily no it's it's it's it's pretty big um you know i i i think it just like fun you know you sort of get a box and you see which one you get and it's kind of quirky and weird so it it had it like lends itself to making content and so it sort of takes off what's the relationship like with the company behind Labubu in that case because I can imagine that they want to

Starting point is 01:45:44 capture some of the value created by the gamification and they have the ability to sell directly and they might even have the ability to auction things off like they want efficient pricing and so how how does the relationship work between you and like the originator of the collectible? I think it just depends. You know there are some collectibles companies we work with directly like I think we're working with Marvel and we've done a bunch of stuff in the toys and comic space we haven't specifically worked

Starting point is 01:46:13 with Lububu honestly I think the Labubo stuff took off to such large degree even they're like again I don't know but I imagine like holy so no matter what they were going to sell a gazillion looboos and so I think they were just trying to make sure

Starting point is 01:46:29 manufacturing hits and the product is still doing so that makes sense before you jump off what does the next couple years look like I think it's a lot of the same stuff one just continue to make the buyer experience better

Starting point is 01:46:44 the seller experience better you're going to see us get into more categories more countries and then make sure we build the products for more and more types of sellers so more investments in brands is definitely in the cards very specifically yeah where does AI play a role

Starting point is 01:47:00 do you need like a traditional machine learning system for recommendations algorithms, or is there a role for generative AI in this business? Or is it more just like you're using, you know, tab completion models to write, speed up the developer productivity of the company? I think everyone's, like, there's the obvious spots where like, yes, everyone uses cursor and, you know, whether you're an engineer or not, you can prototype and build stuff faster. I think we're seeing obvious applications in CX and trust and safety. It's really good at, like, detecting context.

Starting point is 01:47:33 in core ranking systems. I haven't seen anything yet that's much better than the state of the art machine learning models. So I'd say we're at least in core ranking systems, probably not a lot of LLMs. We're starting to use it more for content understanding. This is very good.

Starting point is 01:47:50 You can take a live stream and tell me everything about this live stream to then feed into the ML models. So I think for us, we're just trying to be world class at using LLMs to solve our customer problems. So we're making deep investments. but it's, you know, wherever we can solve a problem.

Starting point is 01:48:05 Where does the community stand on AI generally? Are they like anti-AI because it needs to be like an old-fashioned collectible or do they see it as an opportunity? There will be new IP that comes from some kid prompting a model and then creates a collectible phenomenon. Yeah, I mean, I think people still want to interact with people at the core. So in some ways, whatnot, sort of anti-AI, in that it's like about the human experience.

Starting point is 01:48:34 So I think anything that undermines the human experience will always have a little bit of a knee-jerk negative reaction. And so for us, again, I think customers don't care if you're in tech, they care if you're using AI. But, you know, everyday customer uses whatnot, doesn't care. So it's more behind-the-scenes stuff where we can make their lives easier. So you're a seller.

Starting point is 01:48:52 Can we tell you what are the five major things happening with your business or, you know, generate tips for you or make it so you can list products really fast, ask, we get all the context from them. I think that's sort of worth for applying it. Is there a cohort of folks that just, I mean, like there are obviously tons of people

Starting point is 01:49:09 that just watch Doug DeMiro videos because they're interested in cars and they never buy a car on cars and bids or they never even buy a new car because they're just happy with their car, but they like him and they like him talking about cars. And are there users on whatnot who don't really buy stuff,

Starting point is 01:49:28 but watch a lot and just see it as like some sort of meditative, you know, content. Parassocial. Maybe parisocial, but also maybe just like, it's kind of like background TV and they're just like enjoying learning about different products and understanding the market. Yeah, absolutely. So unlike any given day,

Starting point is 01:49:44 the vast majority of people who are watching do not purchase anything. And the average person watches 80 minutes. 80 minutes a day. 80 minutes a day. That's so much. Hit the gong. That's crazy. Well, thank you so much for coming on.

Starting point is 01:50:03 Thanks for having me. Really great to meet. Always welcome when you have news. Anytime you want to pop your head up and announce on you. Yeah. All right. Thank you. Yeah, I'm glad that we're here.

Starting point is 01:50:13 Stay hanging. 80 minutes a day. Wow, that is a lot of minutes. I need more minutes in the day. Yeah, sorry, Sam Altman. Good luck with your 30 minutes a day of chat GPT usage. What Not's got 80. Get those numbers up.

Starting point is 01:50:28 Time to get those numbers up. if you're building anything except whatnot, apparently. Tyler, can you find out the day that we did our Pop Mart deep dive? Yes, I need to know that. I also need to tell you about fin.a.I., the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bakeoffs,

Starting point is 01:50:50 number one ranking on G2. Oh, there's this funny, funny thing. So there's profound and like GEO is is actually in the timeline. And of course, we are partnered with profound. And so, you know, there's the conflict of interest here. Didn't we, you know, you got to get through it with a kid gloves. But the founder of Amplitude, YC company, Spencer Skates, he posted too many VCs or funding AI companies that should be features.

Starting point is 01:51:25 12 plus startups have raised 72.8 million in the last few months for AI visibility, basically SEO for LLM's. What Profound does. We built it in three weeks with three people and shipped it for free. And he's going back and forth with David Burton, who says, I personally demoed 12 SEO for LLM products. And 11 out of 12 sucked. Do you see this? First, don't we have to talk about James's reply? Oh, yes. That was almost ratioed Spencer. James, James replied. lack of focus kills, and he just shared amplitudes. I'm not a fan of that. I think it's not golden retriever coded. It was pretty hardcore. It's a little too hardcore for me. I think you've got to put on the kid clubs when you're dealing with somebody who stocks down.

Starting point is 01:52:14 To me, one thing that stood out about Spencer's original post. Spencer's wife, by the way, did the Series A of whatnot. No way. Yeah. Wow. Who's that? and skates. Oh, cool.

Starting point is 01:52:27 Friend. Very cool. But they said 12 startups have raised 72 million in the last. That just doesn't feel like that much for a category that could be drive like billions and billion. Yeah. Yeah, we've talked to a bunch of these different companies. It feels like it feels like a lot for one sort of like thing all at once. It is interesting because it feels like a ton compared to like how many weapons companies.

Starting point is 01:52:55 But like, two-thirds of that is profound. Two-thirds of the dollars, yeah, but not of the number of startups. And so it is just interesting that it feels like a niche. Yeah, but yeah, for all a venture, if something's a good opportunity, expect like at least 10 funded companies. I mean, I would expect that there are at least 12 new like CRM companies out there. Of course, we are partnered with Adio, customer relationship magic, the AI native CRM that builds scales

Starting point is 01:53:26 and grows your company to the next level. And so, but it was just funny because David Burton is like putting all of these AEO companies in the truth zone, but Ahmed Omar says, which one works? And he said, profound, but I didn't buy because pricey and still too black box for me. But he was, you know, very interested that he responded possibly

Starting point is 01:53:50 why, this is why I, um, yeah, I, we're one of the reasons I invested in profound, uh, myself was, uh, Kareem over at Ram, was just like, this is what works for us. That was, that was, that was enough of a, of a co-sign for me. Tyler, did you find out when we covered Pop Mart? Uh, yes, it was August 29th. Is that the top? Oh my God. Wait, did we perfectly top ticket? Yeah. August 29th? Really? Not perfectly, but August, it, it actually peaked on August 26th. We are in the top. And so this is a good learning. If we ever start talking about...

Starting point is 01:54:23 Something cool. Toys. It's not cool anymore. Collectible toys. Just know that we are probably top ticking it. If we're talking about some trend in technology, or probably like 12 months, 12 months at least before the top. For sure.

Starting point is 01:54:40 We have our next guest in the Restream Waiting Room. First, how'd you sleep last night, Jordy? I mean, my handicapped is just killing me. Head over to 8Sleep.com. I think I got a decent. Get a pod five. I did not do too well. I got six hours of sleep.

Starting point is 01:54:55 I got a 79. I think you might have beat me today. See, the fact that you can get six hours and put up a 79 when I got seven hours and 10 minutes and put up an 81, it's like, I'm going to have Mateo reset this. I think you, I think it's a skill issue. You're just not focusing on sleep. Like, so you're like waking up in the middle of night and stuff. It's not good.

Starting point is 01:55:13 Great stuff. Let's do it. I'm excited to talk to Chris. I'm going to let you know. take the intro. Chris, welcome to the show. Hey, guys. Thanks for having me. It's great to have you. I will give some quick background. Chris, you were the senior advisor to the U.S. Department of State, Office of the Special Envoy for Critical and Emerging Technology from 2023 to 2025. You're a foreign affairs officer for the U.S.

Starting point is 01:55:38 Department of State, the Bureau of Arms Control, Verification and Compliance from 2015 to 2023 and in 2024 you were the deputy senior director for technology and national security on the national security council at the white house and there's a bunch of other stuff that seems equally significant and important but we can get into it it's great great to have you on the show i'm sure it's been a busy busy busy year for you but why don't you give a quick introduction on on your background and anything i may have missed thanks a lot guys and really appreciate you having me uh yeah so I was a longtime civil servant in the government and the State Department.

Starting point is 01:56:17 I was detailed to Biden White House from 2021 to 24, from 22 to 24. I was on the National Security Council, and I broadly had the China Technology portfolio the whole time and oversaw that they had to kind of all the Biden administration's critical and emerging technology-related work from the White House that I went back, served to the Trump administration for a good chunk of time this year and recently left government. So really appreciate you guys having me, especially on today where obviously we had a big, a bunch of big developments kind of overnight with the president meeting with she and the kind of trade deal of which technology is obviously a very major portion. Okay. So before we get into what's happened in the last 24 hours in the last week, like can you give kind of your view on this year and how a lot of these different, you know, how the trade war has been kind of evolving in your view? Yeah, absolutely. So, I mean, I think the administration has very much kind of gone back and forth on where they are in China policy. I think that you obviously have had enormous threats of tariffs and moves to kind of really kind of separate the U.S. and Chinese economies on pretty fundamental levels. On the other hand, I think you haven't actually seen a lot of implementation there. There's a continued desire to talk with the Chinese. And when it comes to some of the, the, the technology protection measures where I think the Biden administration was more focused.

Starting point is 01:57:46 It's been a little bit more stop and go. I think that generally since the first Trump administration, there has been a big pivot in Washington to move towards away from the policies of China of, let's like deep in integration in order to kind of get them to change and towards a more competitive stance. I think first Trump administration really kind of initiated that. It was very much built on by the Biden administration. particularly in the semiconductors in AI spaces where I think there was a pretty very conscious decision. I know there's a very conscious decision to really separate those supply chains and saying in those areas,

Starting point is 01:58:23 we have to maintain as large of elite as possible. It doesn't mean in every single one, but in the especially critical ones like advanced chips and AI. And then the Trump administration then I think took this and initially escalated with enormous tariff threats on China across the entire economy. the Chinese, I think, have very much taken to heart the lessons from the first Trump administration that what you have to do is punch back and punch back hard. And that has resulted, I think, in a little bit more of a detente, actually, than we've seen over the previous few years where I think the United States has been able to kind of slowly ratchet things up. The Trump administration

Starting point is 01:59:02 has ratcheted things up a lot. So did the Chinese. And I think both sides have now kind of pulled it down a little bit. It does feel like the renegotiation of U.S.-China relationship starts in 2016 with the new Trump administration, a hundred-year marathon by Michael Pillsbury's an important point. That book, it seemed like it sort of went viral on Capitol Hill.

Starting point is 01:59:26 There's also the rejection of American tech companies. But what else do you think kind of led us? What was like the inciting event, there was one in this beginning to discuss a renegotiation in U.S. China policy. Is it Xi Jinping becoming effectively a dictator for life, that kind of changing the perception of like, okay, well, they're not even going, they're not even trying to go for democracy. What other kind of like moments in history do you think of as the defining moments in the

Starting point is 01:59:59 renegotiation of U.S. China relations? Yeah, I think that's right. I think that China has kind of fundamental, well, China has fundamentally changed under Xi. I think there's some in some realization here that some of the promises of China of China political change in China and market-based change are not going to happen. There have been very much market-based changes in some senses, right? They actually are much more deeply integrated into the economy, but it hasn't changed the fundamental, you know, integration with the Chinese state and their companies. And from that flows kind of national security considerations. And I think, you know, she has obviously taken this in a, in a, in a much more authoritarian direction.

Starting point is 02:00:40 And one can argue whether or not that was there all along. And actually, you know, maybe, maybe it was something that people missed in the 2000s. But, but I think very much in the mid-2015, like you said, around 2015, 2016, people were starting to realize that we have to, we have to change course. And particularly, I think, in 2017, 2018. And look, the, the initial Trump campaign, I think really did change the narrative on China. I think that's pretty indisputable. On certain things, I think we were starting to see

Starting point is 02:01:11 a little bit of a changing narrative towards the end of the Obama administration. Like the last week of the Obama administration, they put out a big report, the President's Council on, on P-CAS, President's counsel on science technology, put out a big report on the importance of maintaining a domestic semiconductor industry,

Starting point is 02:01:26 which was the first time they'd really talked about that. And then obviously, you know, with the Chips Act in the coming years, that became the major focus. But I think you have to give the first Trump administration credit for really changing the policy. And the Biden administration very much continued that. I think the approach was maybe not to have a massive confrontational policy across the economy, but to say in the areas that we care the most about,

Starting point is 02:01:53 we are going to take pretty actions that four or six years ago would have been unprecedented to separate ourselves. and that's that was that's we are in a very different place because of that i think we'll see kind of where we go going forward it's it's a little bit of a um the last last like a couple weeks have introduced some some more complicating dynamics i think yeah one of those was uh the rare earth uh elements debate uh has america been blindsided by the importance there where we miscalibrated on exactly how much leverage they had like how much that poker chip is worth on the poker table of this trade deal? Yeah, because there was a point where people are like,

Starting point is 02:02:36 wow, they're already using that play, right? Yeah, taking away the passports of the researchers and then also just banning exports, really crippling our ability to build with those rare earth elements. But is that something that we've known about for the last 10 years? Or has this been a surprise? Or is this like, or is that just like, one of the many chips that we expected to be played the whole time.

Starting point is 02:03:04 Yeah, I mean, people in Washington clearly knew that the Chinese had dominance of errors. You'd have to kind of be under a rock to not know it. But I think you're totally right that no one really did anything about it. And part of that is that, look, it's so hard to get things done in Washington. Yeah, that's about right. It's hard to get things done. And it's hard to get things done that are like, you know, you need a lot of investment and a lot of coordination and, like, you know, massive resources. and coordination is exactly the thing

Starting point is 02:03:32 that's really difficult to get things done in Washington unless there's a crisis. It took a Chamoth spec to really make a move, right? MP materials. Yeah, he did, yeah, he did do that spec. That's crazy. Yeah, I mean, that's like, I think that's the biggest success out of all of them.

Starting point is 02:03:47 Totally. Yeah, and I think, look, Washington is actually can be good at responding very quickly in a crisis, right? Like Operation Warp Speed was very effective, for instance. but obviously it took until there was a pandemic for us to do something like that. So I'm hopeful that now people will take this very seriously. I wouldn't be surprised if we start to see legislation on Capitol Hill that actually resource this. Because even though the administration, I think the administration is focused on it now and takes it very seriously,

Starting point is 02:04:19 they're also, you know, we really need to get money, right? And exactly how that money manifests, whether it's, you know, equity investments or loans or, some kind of, you know, other Defense Production Act authorities or something else, like there's going to have to be some government dollars here, which certainly can be stretched a long way, but we're going to have to do that. I think just to your original question, though, the thing that's surprising, I think people were very surprised that they played this card as expansibly as they played it right now. Yeah. Right. And go ahead. Yeah, no, continue. And then I want to get into kind of the last 24 hours. Yeah, the surprise on playing the card early.

Starting point is 02:04:59 yeah i look the fact is this move was way disproportionate to anything that we had done uh effectively it was saying you know the there was this affiliates ruled the united states put in place which basically fixes a big loophole and export controls like the way that the way that export controls work is every single company has to actually be listed on the control list to be to be controlled and if the subsidiary isn't listed then you can export to them that's not the way that sanctions work the with sanctions work is if the company is listed, then every company they own is sanctioned, and you better not work with sanctioned companies

Starting point is 02:05:33 because otherwise you're violating sanctions. For various arcane, you know, reasons that have to do with nothing. It seems like a really simple own goal there. Exactly, exactly. So we basically put in place of, there was a regulation that said, hey, we're going to fix this really obvious loophole

Starting point is 02:05:47 that is being blatantly exploited, that also is just very logical. And the Chinese response to that was to go way over the top and say, we're going to cut you off from all the rarers and, you know, threaten your entire economy. They didn't think that was proportionate. I think what they were trying to do was send a signal that we won't tolerate any additional

Starting point is 02:06:09 export controls on, you know, any entities in China. And we want any, any, you know, additional restrictions on our access to technology. We're going to go over the top. It was really risky for the Chinese because the U.S. does have big leverage over the Chinese, too, right? there's two things that they're extremely dependent on us for us that you know we could cut them off from the first is the u.s. dollar right their financial you know system is still very reliant on the dollar obviously trying to extricate that that would have enormous implications but they're reliant what would that what would that what would that look like sanctions on on banks or something like that i think it's something that chinese fear quite a bit now to be clear i'm not advocating for that and that would be a really significant move but just it's something that that would be a it's a lever that we have the second second is semiconductors, right? They're not good at, you know, they've limited 7 nanometer, can't do anything beyond that. And they're very, all their whole industry is very reliant on chips made with U.S. tooling and so on. Okay, so I want to get way more into chips, but to kind of

Starting point is 02:07:08 ground the next part of the conversation, like catch us up to speed on the, on what, what you kind of, what your takeaways were and what we know out of the meeting in South Korea. Yeah, so I think basically the deal was sort of a freeze-for-freeze. They agreed to freeze implementation of their massive escalation, our Earth's rule. We agreed to freeze our affiliates rule. So I think you think of it as largely it locks in the status quo for the duration of the deal. There was various other things that it resolves that are recently created issues, the Chinese agreed to buy soybeans, we resolved rare as access, et cetera. It did not, you know, we avoided some of the worst case outcomes. There was no agreement to send, you know, our votes to advance chips to China.

Starting point is 02:07:56 There was no, we didn't accept like a Trojan horse package to like, hey, we're going to build a bunch of, you know, Cato and BID factories in the United States, which would have been very bad for U.S. battery and, you know, auto industry in the longer term. But I think China really does feel emboldened right now because they kind of punched us in the face for the rarest rule. And our, you know, what happened was we both de-escalated a little bit. We'll see what happens going forward, but the status quo to a degree benefits China. They're trying to buy time. They're trying to circumvent our controls. And if we're not willing to kind of continue to engage in this kind of technology protection effort, then every day the Chinese get a little better at working

Starting point is 02:08:35 around our controls. So what can you say about, or what are you, what's your read on the actual dynamic between Xi and Trump? Like, I feel like these two guys have been in the game for a long time. I have to imagine part of me wants to believe that they enjoy this like, you know, deadly dance that they play with each other. But maybe they're just like deeply frustrated.

Starting point is 02:09:00 Putin and Xi Jinping kind of being like, yeah, we might live forever. Yeah, you think you're going to make it to 160, bro? He's like, yeah, totally. I got some scientists that are cooking up crazy stuff. I love that this is like hot mic. Who knows if it's real? Might be a sciop, but I like to imagine that they're just, you know, broing down.

Starting point is 02:09:17 Who knows? Yeah, what do you think? I will say, that was not the first time I've heard leaders of countries speak to the desire to live to 150. Here's some interesting things. You work at the White House, and I have heard that before. Not from them, but... Yeah, yeah, yeah. I'm thinking of what you're putting down. That's great.

Starting point is 02:09:36 Yeah, but... No, I mean, look, I think that Trump's obviously coming at this from, you know, this deal-making perspective. That's not surprising. And obviously there's, you know, political dynamics here on top, both because I think there's threats to, you know, the Chinese kind of both pose threats to hollowing out industry, but also are kind of doing acute things to cause pain to some of Trump's political base. Like I think that the soybean purchases and things like that are doing that. Yeah, exactly. On the other side, I think that, you know, she is very much seeing himself as managing the relationship for. for the long term.

Starting point is 02:10:18 I mean, what hovers obviously over all of this is Taiwan as well. And the desire to kind of slowly move the United States away from Taiwan, which is ultimately his long-term historical perspective and goal. So in some ways, they're coming at this from a little bit opposite. I think Xi is from the much, much longer-term angle

Starting point is 02:10:39 and Trump from a shorter-term angle. But I don't think they necessarily have hugely different perceptions of the, you know, broader dynamics at play here. Okay, so on the chip front... Okay, yes, so we got the rollback. Yeah, let's move on to chips, sorry. So I don't even know.

Starting point is 02:10:59 Maybe it was two, three, four weeks ago at this point, but somewhere in the last like month or so, they were basically like, we don't want any of your chips at all. And I didn't really know how much to read into that at the time. People... It seemed like the D.C. team wants NVIDIA chips, But the CCP said, you've got to justify why you'd want Nvidia chips over Huawei chips.

Starting point is 02:11:22 We're working hard. Let's support Chinese industries. She wants to build up real national champions that can get to the cutting edge or leading edge. And at the same time, the AI industry wants to be able to make as much progress as they possibly can. And what was your read when that news broke? And then how much do you think they're still kind of gunning for? blackwell grade chips yeah so a number one i think they are you know the the chinese will take all of the u.s chips that they can get a way in a in a vacuum um like i i i think that there's some negotiating

Starting point is 02:12:00 ploys here uh and i think i think they were holding the h20s kind of hostage because they wanted to to turn the tables on us and get us to give them blackwells which which obviously didn't happen there is a possibility that there's the information filtering up to she is saying actually we can do this ourselves you shouldn't take these and that would be like Huawei being like yeah no give us just just keep the money you know coming back to us so that you know we're close and we'll be a lot closer in a few years if we can you know take those dollars reinvest them et cetera that's right but the problem is like there's just no way that china can meet their domestic demand with Chinese ships alone. I mean, if we can have all sorts of debates about Chinese production numbers, and I'm happy to engage in those, but fundamentally, the United States cannot meet demand for our own AI ecosystem with, you know, all the semiconductor production in the world and all the best companies. So it's obviously impossible that China, who has a much more

Starting point is 02:13:05 nascent ecosystem, is heavily restricted on tooling. And I think all the estimates of their seven nanometer production capacity, not to mention, obviously, they don't have any 5, 4, 4, 3, 2 production capacity is, you know, somewhere in the realm of one 25th to one one hundredth of the United States. Like, there's just no way that they can fill their domestic demand with Chinese chips. So any effort to say we're going to not take any U.S. chips is going to inherently hobble their AI industry. I mean, I guess at some point, if you're very close, the marginal value of that would be

Starting point is 02:13:38 such that you're willing to take it. But I think, you know, just given the dynamics we're broadly seeing with U.S. AI companies, I'd be very surprised if they were actually, when the cards were down, we're going to retract Nvidia chips. Is Jensen being in South Korea at the same time just a coincidence? Or did he, do you think he sort of planned around that? Do you think anything with Jensen's a coincidence these days? No, I don't think so.

Starting point is 02:14:09 No, that makes sense. I mean, he's basically, he's the CEO is the biggest company in the world. like he should be there regardless. Yeah, he's running, NVIDIA is basically a country. I mean, the market cap is like, you know, bigger than... Their market cap is equivalent to twice Canada's GDP, something like that. It's greater than Germany's GDP. Remarkable.

Starting point is 02:14:32 Not that you can really compare those. It's kind of Apple store. You wrote a piece that you published last night around why Chinese car investments are a national security risk would love for you to kind of like give us a preview on that front. Yeah, I mean, the point we were making, there was a lot of rumors in advance of the summit that another thing that the Chinese were dangling,

Starting point is 02:14:52 which did not come to fruition, was saying, hey, appealing to the dealmaker element of Trump and saying, hey, we'll give you a bunch of investment in the U.S. in exchange for, you know, whatever. I mean, as part of the deal. But that kind of very obviously is a Trojan horse. We very much restricts Chinese investment in critical industries,

Starting point is 02:15:14 in the U.S. via the Sipius process right now, and obviously, particularly given the rare earth controls, you would think that that would, I think it has shown that we really can't be dependent on China for critical supply chain. So if we were to have, you know, B.D factories, like I was saying before, like BID factories or Cato factories in the U.S., that's not, that's, that's just as bad as relying on Chinese graphite for batteries, right? So we need to solve all this. When you say Chinese investment in the U.S., you mean them setting up local factors. factories, which is different from making equity. Yeah, yeah, because China wants us to make as many equity investments in their companies as possible

Starting point is 02:15:52 because that gives, I mean, think about DJI is a good example. There's American venture capitalists that were in DJI. They have huge returns just like sitting there. They now have an incentive to say, hey, we shouldn't, we shouldn't ban DJI. It's not a problem that China can fly, you know, millions of drones over all of our cities. just just worry about something else we saw this with I mean we saw this with bite we saw this with bite dance too yeah yeah no that's right and there's a whole separate conversation on kind of outbound investment and what we should think about with

Starting point is 02:16:28 with US investors investing in China and then with inbound investment the question is what are the risks that the Chinese and if not passive investment that's very different but but active investments and particularly setting up you know large facilities in key supply chains what are the risk here and The trend we've seen over the course of multiple administrations has been to take those threats much more seriously. So it's, I think that's a positive thing. I think that the other thing the administration is going to have to really think about is, first of all, what are the investments we need to make in those supply chains if we're not going to accept that?

Starting point is 02:17:03 And we're going to diversify not just from Chinese batteries, but also like all the way down the Chinese battery supply chain. What does that mean? But also, we have to think about kind of what are the sectors where, and this is where we got to the car, was what happened with cars, and we talked about in the piece, what are the sectors where just having large-scale deployment of kind of connected Chinese products in that area poses a risk? And I think there was a recognition in the Biden administration that actually, you know, electric vehicles in general, having, you know, 20%, 30% of the cars on the road were Chinese and could theoretically be, like, you know, switched off by Beijing. Yeah. I mean, they could cripple our transportation infrastructure overnight, right? That is something that wasn't a, that was unacceptable.

Starting point is 02:17:45 So we've effectively banned Chinese cars, but did it before there was big market penetration. So I think we have to kind of think about what are the other, like, I think there needs to be some pretty hard conversations on robotics. Yeah, so what do you think about Unitri just selling humanoids on Walmart.com? We were thinking about buying one here. Because I've been very vocal over the last year as long as we've been doing the show. that, you know, I think it's super disappointing that we let, you know, like GoPro should have been the dominant American drone company, and there's a longer list of companies that could have made great products in that space.

Starting point is 02:18:22 Maybe people would have to pay slightly more, but we just let DJI flood. And from what we know, DJI was just willing to lose money for a very, very, very, very long period of time in order to just take market share. And so when I think about humanoids, and, you know, I don't, I'm not going to put a Unitree robot in my home. But if they're the cheapest and, you know, if they're kind of the leading edge right now, there's a scenario where we just let them flood the United States with humanoid robots.

Starting point is 02:18:54 And maybe they're adding value in home or in factories and different settings. But then it's just obviously like you just watch any sci-fi movie and you can understand like the potential like national security. risk of allowing robots that can be teleoperated to, you know, just proliferate all over the country. And so it just feels like hopefully that comes up at some point in some of these discussions of just, hey, maybe we make the call to not allow this to happen like it did with drones. Yeah, I think we just have to have kind of class-based regulations on these things. It says anything that fits these parameters, you know, a robot in your home that's capable, that has recording equipment and audio, yeah,

Starting point is 02:19:38 and has mapping technology and maybe has, yeah, it has some kind of appendage. I don't know, you could figure out a way to do it. Like, just cannot be sold in the United States if it's from a Chinese company. Or Chinese, Russian, North Korean, right, like the broader set of actors. The only category of items that we've done that for

Starting point is 02:19:58 as a class is vehicles. But I think that needs to be, you know, we need to think about. We have the tools to do it, and we need to think about what are the areas where that pose kind of similar risks. And you're worried that we'll wait until there's a robot uprising to do something like this. I mean, you said earlier, like, the U.S. is really good at reacting in a crisis, and I just hope, like, at some point, like, if I'm China and you're letting me sell humanoid robots into your country at scale, and you're a political adversary, like, I'm laughing, I'm laughing at you. Like, it just seems like totally unsurious. Yeah, I think it is easier to do these types of things before there are huge market impacts.

Starting point is 02:20:44 So part of the reason that the car's move was doable was because, first of all, like, industry was very supportive, right? We had Detroit banging down the door being like, we're going to get killed by the Chinese. But in the same way they are with tariffs. But second of all, the market penetration of all the Chinese car companies was very close to zero still. partly because we had such significant tariffs, although those were going to become muted in effect. So if you have an area where it's still pretty nascent, it's doable. Yeah, humanoids are perfect.

Starting point is 02:21:16 Like the second, once you have a million Americans that have spent 20 grand on a humanoid, and they're like, I'm not, like, I want to buy the next version. I like this one. You know, it's not like we've now seen the Chinese can build, hit consumer products. There was a long time where people didn't believe that was true, but clearly with TikTok and DJI, like, it's no longer a debate. And DJI is a great example because, you know, DJI, it's a much more complicated to do this for UAVs right now,

Starting point is 02:21:43 because DJI is everywhere, also all sorts of like state and local and municipal governments. Even the federal government still uses DJI drones. They're just, they have such dominance that, like, even if we did do it, we would have to do some kind of mitigation steps, even to implement it if we did it today, which maybe we should. But it's massively complicated, whereas if you do it nascently, It's just, you could just kind of cut off the appendage. Yeah, anybody that disagrees about the national security risk here

Starting point is 02:22:11 and the potential downsides, like, you can't believe that, like, if you believe that Israel was able to run, like, a decade-long operation to get pagers, like, sold into the right group of people that they could then carry out this, you know, coordinated action. And then you think it's safe to just let robots from an adversarial nation flood our country, like, I don't know what to do. I think you're just, you know, blissfully. And they won't let us develop the domestic robot industry unless we do something like that, too, right? They will consistently undercut us and will never, our companies will never get

Starting point is 02:22:48 mature enough, will they'll be able to benefit from the economies of scale where they can even remotely compete with the Chinese instead they're going to be 100% off. We were having this debate before you, not debate, really, but before you got on, it's like, I believe that China can simultaneously buy as many leading-edge chips, Blackwells, whatever, whatever we'll give them, and simultaneously provide the long-term capital to allow their own industry to catch up on whatever time scale it needs to catch up on. Like, what is the tolerance level for? Basically, is it possible for us to run the Chinese playbook against them? We subsidize black wells, flood their markets with Blackwells. And then,

Starting point is 02:23:31 They can't go down the learning curve with Smick and Smi and Wauway, and then at the last second when they're super dependent, we pull it back when we need to right before, I guess, ASI hits or something like that. That's the basic thesis, debate. I mean, I think two things with that. One is that history would show that's never something that the Chinese are going to accept, right? They've never been okay being reliant on any Western technology of any significance. They also, we've been very clear about our intelligence.

Starting point is 02:24:01 intention to keep this dominant now. I think you can't put that tooth face back in the tube. Like they're going to go, we saw they were going all out in indigenousation back in 2020. It's even more of the case now. Their constraints are not desire or cash. They are actual access to equipment and tools. And we're lucky that the SME and, you know, not just lithography machines, but also etching deposition machines like anything, all the kind of really advanced equipment is among the most complicated technology in the world. But we can assume that they're actively, that they have, you know, thousands or tens of thousands of people that are tasked globally with just collecting as much information as they possibly can to reproduce it locally.

Starting point is 02:24:40 Yeah. The only reason this works with chips is because this is the most complicated equipment with the most complicated supply chains on Earth, right? Like, an UV lithography machine is literally the most complicated machine ever made by man. So, therefore, it's possible the Chinese can actually indigenize every single thing on Earth except this. Like, that is a logically consistent outcome. thing I would just say with respect to your thesis is if that was the play, the more effective way to do that would be to cut them off from everything completely, but then tell them you can have it via U.S. cloud because then you can cut it off at any moment's notice. You could debate if that's a good idea or not, but like chips are going to be a lagging effect, right? It's going to be

Starting point is 02:25:23 two to three years until all the GPUs kind of go bust or you need to move on in your architecture. It's interesting. What is the most current debate on the ground in Washington around, like, Blackwells specifically? So there is the question of whether or not we should ship them, but actually the more pertinent question is there's a piece of legislation called the Gain AI Act that's moving on the hill that actually the Senate passed as part of the NDAA, the must pass annual defense bill, and is being debated with the House right now. And it's a sponsored by Senator Banks. And basically it says, he's a Republican from Indiana. And basically it says, look, we're not going to weigh in on the question of whether or not we should ship chips to China. That's a separate question.

Starting point is 02:26:11 But regardless of where you are on that, American companies should get priority access before Chinese companies. And it basically requires, before shipping any chips to China that are controlled and authorized, it requires American buyers to get right of first refusal. which I think is a, from my perspective, is a pretty logical approach, whether or not you support or oppose AI chip exports to China, you know, saying that America should have them first is logical. It also does one other thing, the most recent text, which exempts trusted U.S. exports to trust, from two trusted U.S. persons to anywhere other than China from license requirements. The reason this is important is actually there's a lot of pending deals in the Middle East right now from U.S. data centers that are trying to make billions of dollars of deals in the

Starting point is 02:27:02 Middle East. Those are subject to license requirements. There is a lot of negotiations on whether or not those can go and they've been held up for a long time. But this would say as long as the government certifies them as a trusted U.S. person and they're subject to a couple, you know, standard restrictions like, you know, they keep 50% of their computing power in the U.S., then they can go without U.S. government approval. So really basically trying to prioritize U.S. customers in any decisions vis-a-vis Chinese companies and also U.S. companies vis-a-vis any decisions on the international AI build-out. Do you think Jensen will be happy with that? The NVIDIA has been pretty public of their opposition to the bill. But look, my response

Starting point is 02:27:46 would be... And is that just they want, they don't, they just want the flexibility to do deals effectively? Like, because it's not exactly a secret that NVIDIA, like, they have a Shanghai office and R&D center, like they're trying to, I've joked that Jensen is, you know, the juggler, just sort of like juggling a bunch of different, you know, national interests always. And I guess that's his duty to the shareholders. But what is their specific, do you know what their specific opposition is? I think, I mean, any regulation is generally opposed. And I think there's they're concerned it would kind of hamstring their operations or resulting kind of bureaucratic complexities that actually would prohibit them from selling anything to China, even if it kind of was prohibited.

Starting point is 02:28:36 I guess I think that this is a good faith effort to work to develop a system that would allow that if that's the administration's policy position to do so. I think my response generally be like if the question is really is there a supply shortage of GPUs or not, right? Because if there is, I think it's pretty clear with Blackwell that there's more demand than there is supply, then I think that U.S. companies probably, it's not surprising to say that the U.S. government, for the U.S. government to say that U.S. companies should get priority over these, over foreign companies for these chips. If there's not, then the bill in theory would have no impact on their ability to sell them to others. Now, certainly I think there's tweaks to the language and things that people would be, you know,

Starting point is 02:29:24 I know that Senator Banks and his staff are happy to work with industry on, but that's the intent here. I'd hope that we could come to a resolution there. Makes sense. Really enjoyed this conversation. Come on again soon. We'll reach out. I'm sure there'll be much more to talk about in the near future. This is fantastic. Thank you so much, Chris. Thanks, guys. Appreciate you having me. Look forward to talk more in the future. Cheers. See you later. Bye. Let me tell you about public.com. Investing for those that take it seriously. They got multi-asset investing. They got industry leading yields. They are trusted by millions, folks. And our next guest is already in the Restream waiting room. Let's bring in Max June Strand from Lagora into the TP in Ultramm.

Starting point is 02:30:06 Boom. Max, how are you doing? Welcome. Welcome to the show. I'm great. Good to see you. How are you? Congratulations on all the progress. Introduce yourself, the company, and then give us the news. Of course. I'm Max, June Strand, CEO, co-founder of Lagora. We're an AI-powered workspace for lawyers. We just closed our series. seed, founded the business back in street. How much did you raise? John's ready. John's ready. 150 million.

Starting point is 02:30:34 You can't even hear the value. I got all of these pictures back from the gym this morning from Stockholm. They had bought a huge inflatable unicorn. Maybe we can send you some pictures. It literally takes up half the office. Amazing. If you added it to the 18th calendars, you can book it. Are you a YC company?

Starting point is 02:30:58 Yeah, we were in YC, winter 2024. Winter 2024? Wow. Yeah, winter 24. That's insane. 18 months. This must be one of the fastest growing YC companies of all time. I think so.

Starting point is 02:31:11 I think so. I think so. A fifth month in Sid to Sierra Zid. Wow. That's impressive. So the VCs, they'd said, we need 10% max. And you're like, best second. do is 8.3.

Starting point is 02:31:25 How did that? Yeah. This round. This one was easier to negotiate than the first one I did with benchmark. When I did the one with benchmark, we sat down, we took an Excel, Chatham put in some numbers, and I went, there's no way, dude. And he goes, I've never done a deal where I didn't get 20%. And then we started going down on the point decimals.

Starting point is 02:31:48 And I think we landed on something like 18.51. 1%. It was extremely... You got to back off just a little tiny bit. It was a little bit. He broke his rule for you. So... Okay, so how are you... We've talked to a bunch of... Yeah, let me give some context here, because a good friend of mine, as a lawyer,

Starting point is 02:32:09 and the firm he's at, he's on their, like, tech kind of advisory, I don't know, whatever, you know, big law, and he's been evaluating products. and about a year ago he like was not impressed at all and when I saw him I saw him last week and he was telling me that he now is seeing AI tools do um he called it like a hundred thousand dollars worth of like diligence in like 10 minutes and he was like a huge wake-up call he was like thinking about um like he didn't he didn't even think his firm would be able to evolve to that, even though he, even though, and this is a big, you know, big firm, but he, uh, he was like, clients are going to realize, like, what's the game has changed, like,

Starting point is 02:33:03 very quickly. And not every law firm is going to be, is going to react, uh, quickly enough. And so, um, yeah, kind of want to get, yeah, wanted to get the update on like, just how much has changed kind of over the last year, because there's product innovation that's happening. And then there's just like the models are getting better and they're both feeding into each other. Well, I kind of view it like this. Here's the model capabilities. Here's the product capabilities and here's the people capabilities in terms of using those products and getting the most out of it.

Starting point is 02:33:33 So there's a huge sort of gap still to be filled in terms of what people are using the products for. I mean, back in 2024 when we were part of YC, I mean, Ligua was a glorified GPT wrapper with sort of good rag, good citations, you know, solved compliance. and data issues, but now I think your friend is right. The products have moved from being a conversational simple AI into something that solves much more sophisticated tasks. And it looks very differently across transactional work or in litigation or in-house work. If you take due diligence as an example, I mean, it's effectively the exercise of looking through a large number

Starting point is 02:34:14 of documents and understanding what is within those documents. And I think, LLMs were better at reading than writing initially, which is quite an important distinction. So we came at this whole problem very much from the review angle. I think some companies, I mean, look, we were not the only ones who realized that legal and LLM was going to be a nice marriage. They came at it from the thing like research angle or drafting angle, which was much, much harder to build a good company on in the early days. And I think now what's happening is, I mean, I don't know how many apps you use on your phone.

Starting point is 02:34:47 I use maybe five. And what's happening is the lawyers don't want to learn 20 different point solutions. We're bringing everything into one suite. And then with things like MCP, we can actually also allow the really sophisticated law firms to bring in corpus of their own bespoke tools and capabilities, which I think gives a much richer environment. I have a very painful lesson around diligence, which is why I'm very excited about this technology. was I worked on a deal last year, you know, before we started the show. And we were in diligence

Starting point is 02:35:23 on this company. And there was a single document that killed the deal. And the lawyers had already racked up like a $100,000 bill before we, before we found it. And it ultimately meant that, you know, all the parties walked away. But we were still sitting there with like this massive bill. And it was just like unbelievably painful because it wasn't even complicated. It was just the business was incredibly old and there was just this one deal that they had done like a decade ago that meant that it was just like kind of dead in the water. Yeah. I mean what's what the tech allows is that you can also do a deedy on the cell side before you even put the documents into the data room and you say, hey, let's go open it up to the other side. Right. Like it's it's it's funny that it's called

Starting point is 02:36:11 a data room right because it used to be a physical data room with a bunch of boxes. You would go into that room, you would open it up, you would start reading all the documents. Then we got Control F, and you could start Control Fing for different change of control clauses. And then came the early versions of the sort of AI systems where actually the seed for what became Leguara was founded, back with the early birth models, if you remember those. And you had to fine tune the system to find specific provisions. And now what's cool is you basically just ask the query in natural language and the system understands it. So you can even go in there and say on a scale of one to 10, how much of a smoking gun is this document and the AI will just respond and provide its reasoning.

Starting point is 02:36:51 So I think in the comment that you made, will some law firms disappear? Absolutely. I think law firms will go through a huge wave of consolidation, frankly, because they've never had tech and sort of real scalability as a weapon. And I mean, you have the big four in auditing and tech has been very good for auditing. It's very good with numbers. It's very good in finance. Tech has never been good at language until large language models. And so now I think you'll see increasingly firms leverage these things to not only sort of out-deliver their competitors, but also to out-priced them, you know, be much faster. So is the solution for law firms, do you think, transitioning to kind of value-based pricing, flat, you know, more like project fees? Because, you know, if you

Starting point is 02:37:40 compare this to like the creative world, like the best logo designer in the world, is not going to charge an hourly rate because they might be able to make that logo in like 30 minutes, right? And so if they charge like, you can't charge like a $100,000 hourly rate, but companies will pay $100,000 for a great logo. So is that...

Starting point is 02:37:58 Which is correct. I think that's correct for a lot of work. I don't think it's correct for all the work. So I'll give you an example. When we negotiated this term sheet, we were working with Goodwin and our partner Craig there. And when I need his expertise,

Starting point is 02:38:14 to help me negotiate the term sheet, he's worth a lot more than his hourly rate, which is arguably already high, but it's worth a lot more than that in that specific case. But when his team is reviewing simple documents, maybe that's not worth as much if AI can do that. So I almost viewed it as if AI can do a specific piece of task, it will do it. The only question is like, where does that get transacted? And I think you'll see value-based pricing in taking a portion of the deals. Like the best law firm in the world, arguably, is Wachtel, and they don't do hourly rates at all. They just say, this is the price to win, and you pay them.

Starting point is 02:38:55 Right. And they get a portion of that. But I'm also actually seeing another way where really big companies, like the big tech companies, are going to law firms and saying, hey, we're going to pay you $200 million over the next two years. And we want you to do all of this work. Can you do it? And the law firm is then forced to say, are we going to turn down $200 million or are we going to figure out a way to do that? And of course, then tech will be part of that answer. So I actually...

Starting point is 02:39:24 Yeah, it's about creating the right incentive to adopt the tech versus, like, currently some firms are going to resist it and being like, I actually like doing diligence the old-fashioned way where we could get three people to spend, you know, all these hours. This was super fun. I'm super excited for you guys. I have a feeling we'll have you on a lot more in their future. remarkable progress, which we had more, which we had more time. I love to see a YC company winning, and I rarely see one winning this hard. This is incredible progress.

Starting point is 02:39:52 I mean, I'm going to give a shout-out. Since we started in Europe, we just launched in the U.S. back in Mark. So since then, we've killed the team almost 50 people, and it's like the growth that's coming in the U.S. is frankly what we're doing around. Congratulations. Thank you so much, guys. Thank you, we'll talk to you soon. Have a good one.

Starting point is 02:40:08 Cheers. Bye. Before we bring in our next guest, let me tell you about adquick.com, out-of-home advertising made easy and measurable. Say goodbye to the headaches of Adam Home advertising. Only ad-quick combines technology, add-of-home expertise, and data to enable efficient, seamless ad buying across the globe. Our next guest is Christina from Vanta. She's been on the show multiple times. She's back. We're getting an update. How are you, Christina? Great to see you. Thank you for supporting us for this entire year. It's been fantastic. You've been on a tear.

Starting point is 02:40:34 What's new in your world? Well, I got a hat in the mail from you all, and it's great favorite. Well, you should have got in a jacket, too, but the team may have sniped it. Oh, no. The jacket never, the jacket never showed up. Jacket never showed up, but really into the hat. So thanks for that. I'm glad. I'm glad.

Starting point is 02:40:53 Things are going well. So a little bit, a lot of AI going on with everybody as you're probably talking about. Getting excited for Vantacom, the security and compliance event of the season. Let's go. And just did some surveying of security folks about how they're feeling about AI. Yeah, we were talking to the season. the CEO of CrowdStrike yesterday. Very interesting nuance. Some, there's basically like AI generated viruses now where the actual code that hacks the system is generated on the fly

Starting point is 02:41:23 by a generative AI model. And can do reasoning. Yeah. So your malware. It's going to be great. I'm sure. I'm in danger. I'm in danger is what I feel like. But, but how are people feeling what are you learning from the customer base, from the folks that you're talking to on the ground? Yeah, so we, talking about it on the ground, and then we also surveyed thousands of security leaders around the world. Sure. And the result's actually super, super encouraging on the AI front. And then I actually even guessed. So we found like four and five security leaders are using or plan to use AI agents to prevent against those sort of attacks.

Starting point is 02:41:59 Sure. So the solution to the attack, to the AI agent attacks is good guy agents. It's in fact more AI. Yeah, of course. Yeah. Long tokens. Yeah. So there's that piece.

Starting point is 02:42:08 And then we found, like, kind of a similar percentage, but 70% of folks are letting those agents give input on security strategy. Yeah. And it's like giving it to a person who's considering it except. Sure, sure, sure. We're in, like, default let the agent talk to your folks and influence them versus, like, default skepticism. And again, this is among security folks. So I was, like, pretty impressed with this. How, do you have a sense of, like, how token intensive some of these processes are?

Starting point is 02:42:36 Because I imagine that, like, one of the things you could do is just the benefit of AI is that it doesn't mind working 24-7 for months on end. So you could just say, actually go through every single line of my code base one by one and then just, you know, see, does this, does this same like there could be vulnerability here and just generate tons and tons of, you know, ideas. And then we'll have a human filter through what it thinks could be vulnerabilities. Yeah. So, okay, I saw your interview with Alex. And Barakas opened yesterday. And I think we're, like, seeing something similar where it's just, like, paralyzing. Sure.

Starting point is 02:43:07 And we're like, oh, okay, go off, run, take all the tokens, like, see what you come back with. And maybe it's something, and then I just did two things at once. And maybe it's nothing. And then I'm like, I kind of just did the one thing and I have to move to the next task. But, like, I'm in the spot I am. And so we are seeing, like, a ton of paralyzation of work here. Yes. Yeah.

Starting point is 02:43:26 What, yeah, what else is empowering people on the, on the AI side? in security compliance, I can imagine that, like, you know, when we're talking about the technology, we talk about, oh, the future of the agents, we'll just be able to do it. But then when we talk to people on the ground, they're like, I'm just using ChachapD to do my homework, or I'm using it to get educated. And I feel like there's a whole world where we go and we rebuild the compliance training processes in an AI-native way. In an awful way. Yeah, a lot of times it's pretty awful. I've been through a few of those where you're clicking a button and watching a video and you need to move the mouse.

Starting point is 02:44:08 Is there progress there? How fast is that rolling out? What does the future of compliance training look like, you think? Yeah, okay, well, compliance training in particular, I think a ton. And to your point, like, adaptive and compelling and not the, like, watch a video that feels, you know, at best stuck in the 90s are probably worse things you could say about it, right? Yeah.

Starting point is 02:44:27 Yeah. Yeah, we see folks doing, like, the fishing email was like always the classic thing, but Now it is just, they're really good because it's also like, oh, let me scan your email inbox and be like, what do you actually reply to? Oh. Not just like, I'll send you the, I don't know, TVPN newsletter and like try to, or fake that and try to get you to click on it. Like it's super personalized. So there's some cool stuff there. To your other question, my model of this kind of an overall, but I definitely see it in security and compliance to steal from Tyler Cowan is like centaurs.

Starting point is 02:44:59 And so it's like AI plus person and we're at that stage. Yeah. Right? And maybe, you know, AI will take it all the way, like the way it did with chess. But even with chess, there was like a multi-decade, you know, AI plus person stage. And we're seeing a lot of that with our customers. Yeah, that's fantastic. What we were asking the CrowdStrike founder about like, like, basically was he surprised that we haven't seen like a Gen AI induced, like high profile security incident yet? I don't know if I'm like a solar wind I'm sure yeah when you like yeah what's your you know

Starting point is 02:45:38 how how concerned are you about about that sort of like yeah you know even the a WS outage that was not a generative AI driven problem it was just DNS configuration on a database okay so actually like building off of that I think I don't know probably pretty soon but I don't think it'll be some like crazy complicated attack like a kind of you know it'll be like oh, you left your database that's unlocked. It's like the classic Equifax thing, you know? And it's like maybe AI spotted that. Sure.

Starting point is 02:46:08 But like you kind of did the equivalent of like, well, you left your front door unlocked. Yeah, yeah, yeah. Yeah. So just another, another lesson. Just like go back to the basics, drill the basics, human in the loop. There's definitely, the centaur error is going to be here for a long time, I believe. I completely agree with you. Last question, which we had more time today.

Starting point is 02:46:28 Like, how are you in your team thinking about? head count planning over the next two years oh yeah that's a great question it's like all I'm doing right now um in like an AI sense in a business yeah well just not even in an AI sense but just like it's a new it's a new world it's a new world we see we see public company CEOs doing layoffs and saying we're doing these layoffs because of AI and maybe some of it's because of AI but you know others is just it's a really good it's really good he's not going to really grow headcount and he thinks he can massively grow revenue without actually scaling

Starting point is 02:47:04 up the talent pool that much. Government contracts are amazing. The way we were thinking about it is like someone or like AI won't take your job but someone using AI might like back to the set of our thing and so have a bunch of

Starting point is 02:47:20 stuff and that's like our framing inside to Fanta and whatever and we have a bunch of stuff both to like encourage and teach and be like this and then this will be a core expectation of your job and so like that kind of model going forward and filtering on it and hiring and you know so you're telling the team like you should have three three at least three bots join every hangout that you do that are all summarizing all summarizing the meeting notes

Starting point is 02:47:47 and and competing to summarize the meeting notes the best i saw this too i yeah i'm i don't i'm a note taker and like notes make me pay attention so i like can't use those meeting recorders because then I stop paying attention. And I'm just like, I know this. Not everybody is like this, but yeah. Yeah. A lot of it depends on like the actual use case. If you're in some sort of meeting where you need a full transcript, that's probably different. But, you know, certain types of meetings, it's going to make more. Vanta should make like a really menacing agent that joins and is like watching, watch and out of it. Make sure there's no funny business going on. Yeah, yeah, yeah. See some words. It'll like pop up at you. Yeah. Well, thank you so much for

Starting point is 02:48:25 taking the time to join the show today. We will talk to you soon. Have a great rest of your day. Bye. Talk soon. See it. Before our next guest hops on, let me tell you about Bezell. Your Bezle concierge is available. Now to source you any watch on the planet, seriously, any watch. Okay, quick fire drill for the team is Alon from Navon in the waiting room yet, Ben? We have... Because I know we have a couple more, but... Fireworks AI in the Restream waiting room right now.

Starting point is 02:48:54 Okay, but team, think about ordering here because Ilan... We have a special situation because Navon is going public. Today. And the IPO's timing might be... Yeah, I just want to be cognizant of his timing. Okay. So we will have the production team working on that. But let's bring in Lynn.

Starting point is 02:49:12 Let's bring in Lynn from Fireworks AI into the TVP and Ultram. Welcome to the show, Lynn. How are you doing? Hi, thanks having me. Thank you much for taking the time. Big day. I would love to get your introduction to the company, how you're framing your business relative to everything else that's going on in an AI at such an exciting time.

Starting point is 02:49:33 And then we'd love to go into the news. Yeah, definitely. So fireworks, we are an AI inference platform with application-specific inference. So here's how we think about inference differently, that we do not think about inference as we buy in compliances at home. For example, we buy a refrigerator, use that for 10 years, and then upgrade to the next one.

Starting point is 02:49:59 We believe model should be continuously becoming smarter and smarter and learning and adapt into the application. So every single application developer, they should have their own model. They shouldn't use off-the-shelf, you know, any model other people use and become a model API wrapper. Instead, model should be part of,

Starting point is 02:50:22 of their product design. And the model is like we raised child. It will continue to learn and be smarter and be more specialized in solving particular problem really, really well. So that's kind of inference platform we provide with smarter model, faster model, and a much more cost-efficient model for every single application. So, I mean, you're competing with, am I crazy? Are you competing with AWS, Azure?

Starting point is 02:50:46 Like, these are the biggest hyperscalers. They are somewhat model agnostic, but serve up inference. as APIs. Lynn's competing with everyone. Is this the craziest? He's coming for everybody. But I mean, take me a click deeper on the actual strategy. Is it just that there's so much demand that you can go in, go and satisfy the extra

Starting point is 02:51:06 demand? Or do you think you're building something that will just be completely differentiated from the hyperscalers forever? Right. So we, currently we are running very high traffic. We are processing more than 180 request. second, that is an order of magnitude of, it's same in the ballpark of Google's search traffic volume.

Starting point is 02:51:29 We process more than 10 trillion tokens per day. Okay. Okay. That's similar to their... That is actually the same as their token processed from Gemini. So we process a large volume of data. And that means, that just means open model has the future. And there are so many startups and enterprise, they are reinvent the new use experience.

Starting point is 02:52:02 And they want to have full control of the model as their IP. And have the model co-developed, co-involved, co-adapt into their product. And we see that as a future. And that's how we differentiate from product focus point of view. And we do not provide this inference, one size of face, all. We provide inference one size of face one. specific tailor towards application. Are you GPU rich?

Starting point is 02:52:24 Are you GPU poor? Is this part of your strategy to have GPUs available when your companies need them? Is that a differentiator? Yeah, I would like to say we design our product for GPU poor because interestingly,

Starting point is 02:52:44 we are at the beginning of S-curve of huge AI-NAB product expulsion. But product market fit today doesn't mean a viable business in the sense that many of the we work with so many companies they just couldn't scale to millions of developers or billions of consumers they're going to scale into bankruptcy fundamental infrastructure is so expensive even if they build the best product has so much value they just couldn't make a viable business scaling into bankruptcy is an iconic line it's a great line i'm not going to name there's one

Starting point is 02:53:20 company that really comes to mind. I won't name them. Give us the news. Give us the news from today. On the fundraising side. And get that gong ready again. Yes, what happened? We congratulations. We raised our CSC. Yes, give us some more details. Who came in? How much? What is the valuation? What else are you sharing about the round? Yeah, we raised 250 million. Co-led by light speed and index. Boom. Love it.

Starting point is 02:53:47 With. Fantastic. Participation fund event take in Sequoia. Fantastic. You can just call it a quarter billion now. You're getting into the really big number range. It brought us about our valuation to $4 billion. $4 billion. So really excited for all the customers, partners, and investors.

Starting point is 02:54:04 And quickly, how old is the company? We're three years old. Wow. That is impressive. Congratulations. Well, thank you for everything you're doing to power the AI revolution. helping people avoid scaling into bankruptcy. That should be the company motto.

Starting point is 02:54:20 It's honestly one of the greatest lines. We're going to be using that line quite a lot. So thank you for that. And it's great to meet you. Congrats to the whole team. Congratulations. Thank you so much. Have a good day.

Starting point is 02:54:32 Cheers. Before our next guest hops on, let me tell you about Wander. Find your happy place. Book of Wander with Inspiring Reviews, Hotel Grated Manning's Dreamy beds, top tier cleaning, and 24-7 concier service. It's a vacation home, but better. Our next guest is from Navan. We have Alon Twig, the CTO and co-founder of the world.

Starting point is 02:54:49 Welcome to the show. Get that gong ready. Congratulations. Let's ring the gong preemptively. Preemptive hit. I love you. Now we can have a conversation. Champagne.

Starting point is 02:55:02 Cheers. Cheers. We have happy dad. Nobody's joined. Nobody's joined drinking champagne ever on the show. If you're joining drinking champagne, I'm going to have a happy dad from the Nelk boys. from a friend John. I had a really long day, so that's my last thing before the big party starts.

Starting point is 02:55:20 Well, congratulations. Amazing. And you're live, live from the NASDAQ. How's the day been? And yeah, maybe kind of back up a little bit and actually introduce yourself. I think people can probably tell what you're up to. Yeah, sure. So my name is Ilan Twig.

Starting point is 02:55:39 I clearly like Champagne. I'm the CTO and co-founder of Navan. of Navan. Navan is a travel and expense management company. We started more than a decade ago. Wow. Today we IPOed. Super pumped. It was a beautiful day. Yes, exactly. My entire family, by the way, I think I broke the record of the number of family members that joined me to the ceremony. No way. That's amazing. It's so funny because the last time we were at NIPL, yeah, the last time we were at NIPL, it was for Klarna, Sebastian. who's a friend of the show.

Starting point is 02:56:15 And for him, it was just like another day. He was like, oh yeah, I didn't need to bring my family. I just kind of stopped by, IPO the company, come back. But so every founder, every... Wait, how many family members, by the way? Like, processes these things differently. It's always interesting to hear how people treat it. How many, roughly?

Starting point is 02:56:30 Like, 30? No, it was, just for my family, it was 17. 17. 17. 17 family members at the IPO. Congratulations. Really? And by the way, if I may say one last thing about the guests, so my parents were here, both of them.

Starting point is 02:56:49 Sure. My dad turns 90 in two weeks. Wow. And he was here with me on the stage. He was like happy. That's amazing. I think most of my excitement was watching them. Totally.

Starting point is 02:57:01 Being so excited. Yeah. Not understanding anything because they don't really speak English, but they kind of got the gist of what's happening. And it was super exciting. Yeah. That's incredible. What, take us back through, I mean, I'm sure when you looking back into like the depths of COVID,

Starting point is 02:57:18 which probably feels a long time ago, but you were in a business that was, I mean, I just imagine you aged more rapidly than maybe Brian Johnson would like during that period. Walk us through kind of some of the key moments getting to this point. Maybe I should first tell you that before COVID I had black hair. It's a little black. Oh, wow.

Starting point is 02:57:40 It looks good on you. It looks good on you. You look more like a serious. Yes, you know, executive, yeah, yeah, I can fool people around you that I'm serious. Yes, you know, you run a company that the business model is, we make money when people use the platform. There was no monthly fees, there was no way you don't pay, yeah. No long lock-in, no enterprise contract. No enterprise contract.

Starting point is 02:58:05 So, and why? Because both my co-founder, Ariel Cohen and I, we had this philosophy that if the company generates money on usage, then the company will always be focused on making sure that people would want to use the product because it's a great experience. And it worked well for us for the first five years. And then when COVID hit,

Starting point is 02:58:28 no one was traveling and no one was using our platform not because it was an inferior product, it was because there was a virus and no one could travel. And so we found ourselves with the best product out there with zero usage and zero, zero revenue and it took six weeks from like I don't remember the number maybe a hundred million to zero six weeks so then what yeah it was it was a very interesting point in time but I can tell you that you know five years later here I am with a glass of champagne my parents

Starting point is 02:58:59 were here we were celebrating the IPO with a company that has way more products a much more resilient business model and trust me this time it's a pandemic proof so we are not going to go to zero we'll go down but not to zero if it happens again so we learn you know that's why we have gray hair um battle scars and yeah it's it's uh it was definitely a challenging time but but i think that you know judging by results i think that it was managed well obviously the entire company entire management team the board we were all united around the decisions and here we are how are you we were talking to brian chesky at a Airbnb last week and uh he was sort of of mapping out his vision for the future of travel, this idea that as we become more online,

Starting point is 02:59:49 we also maybe want to become more offline as well. And maybe we're traveling more as well as spending more time just online. How do you and how do you internally in the company think about the future of just business travel, pleasure travel, just like the overall travel market? Right. So first I should tell you, you know, I'm the CTO. and I love technology. I mean, this is my thing. I really, really love technology. When ChachyPT came out, the first thing that I did,

Starting point is 03:00:19 I bought like a $30,000 worth of a GPU. That's what I did. And I built a PC. My co-founder thought that you should fire me. It's like, you have a PC under your desk? Yeah. I said, yeah. And I paid for it.

Starting point is 03:00:31 You don't worry about it. I paid for it. And then I started deploying LLMs on top of it, uncensored LLMs. I dove deep into that. And I really wanted to know the nature of these creatures, how they behave. Because if I were to deploy anything to production, based on these creatures, I call them, I need to know who they are, how they behave.

Starting point is 03:00:50 Will they lie, for example? Do they know what a lie is? Will they use it? No, they lie, yeah. But forget their definitions. They will also lie for other reasons, intentionally. Like they would not want to lose, for example. And they would lie in order not to lose.

Starting point is 03:01:05 A lot of discoveries. But ultimately, it led us to, once we really understand the technology, how to deploy this thing to production and let it run completely unsupervised and do stuff for us. And I think the important thing is completely unsupervised. The first thing that we've done is we deployed the Ava. Ava is our virtual travel agent. And she communicates with travelers as things happen when they need to book something or when there's disruptions and they need to push their travel by one day, cancel this leg, argue about the refund, et cetera, et cetera, and she would do all of these things for them. And it is all based on an internal framework that we built. We call it Navan Cognition.

Starting point is 03:01:49 I really like the name Cognition. I didn't invent it. It was a professor from Columbia that we worked with. And why cognition? Because it turns LLMs into a highly functioning cognitive system. So Ava today is completely unsupervised. She manages thousands of chats every day with a very, very high customer satisfaction that matches the humans level, and she offsets more than 50% of the incoming chats. She does not deflect, she solves. So I think our approach to travel is we look for ways to leverage technology, to make travel easier so that people can focus on being there rather than getting there. Getting there is just a noise that you have to, it's a penalty that you have to pay.

Starting point is 03:02:35 But the focus for corporate travel is to be there and to be fully there. And there's people outside trying to make me laugh from outside. And I'm a little bit... Well, I'll try. I just have one suggestion. I think if you make an agent one of your baby creature and call it Twiggy, please. Oh, that's a good nickname. Microsoft has Clippy.

Starting point is 03:02:59 Yeah. Navon needs Twiggy. You already went through one. You went through a rebrand. you were trip actions now you're nivan i want you to rename eva to twiggy i love it let's me let's i'll do my best here i'm going to dream for that really cheers thank you so much for coming on the show on such a big day congratulations such a monumental moment and and please extend our congratulations to the entire family all 17 all 17 and the whole

Starting point is 03:03:26 team it's a beautiful moment and just i hope you have a great rest of the day great rest of you Thank you so much. We'll talk to you soon. I'm going to party tonight. Thank you so much. Thank you. Amazing. Let's go.

Starting point is 03:03:37 Let's go. Love your podcast. Love it. Thank you. What a legend. What a legend. That was one of the best legendary. It was tough to follow.

Starting point is 03:03:49 Yeah. We have Taryn Jeet coming in next. From Memo. I think that's how I pronounce it. Mem Zero. He's in the re-stream waiting room. How are you doing? Great to see you.

Starting point is 03:04:00 Thank you so much for hopping on the show. Really, really tough one. follow. Yeah, the last guest with IPODia, champagne, who's drinking. Raised to Billy. It's a crazy moment. But I'm excited for this. But thank you so much for hopping on the show.

Starting point is 03:04:11 We're very excited to talk to you. Yeah, like, thank you for having me great to be here. Of course. Talk to me about the business. Introduce yourself in the business. And then I want to go really deep into how memory will actually transfer and what the equilibrium of the market will be. But we can go into all the technical or like market structure stuff.

Starting point is 03:04:32 after we kind of get the general news, where the business is, the shape of what you're building. Thank you. So I'm Taranjit. I'm the co-founder and CEO of Mem0. Mem0 is building memory for AI agents. Right now, everybody is trying to create an AI app, an AI agent. But there is a fundamental issue. All the apps are done because they are stateless.

Starting point is 03:04:52 They don't evolve with you as humans evolve. We are trying to fix that. So far, we are the most dominant player in the market with like $41,000. GitHub stars, 14 million downloads. And we recently announced our 24 million funding, led by BASISC, Sententures with Kindred, P-50, and IC in GitHub. Total agent domination. So, I mean, I got to just jump straight into the actual market dynamic

Starting point is 03:05:22 because I have to imagine that right now, Open AI, is saying, where you're going to log in with OpenAI, and we're going to start. the memory because we want you lock to us as much as possible. And for everything else, if we, we want to build it within the app, we want to do, we want one-click checkout in the app. And if we're going to send you out, you're going to owe off with chat GPT. And so are you the Android to chat GPT's iPhone or is there a way that you can play together? Is there a data privacy thing where I can go to Sam Altman and say, hey, look, I know I'm daily driving the chat GPT app, but you got to let me take my data with me, my personalization data with

Starting point is 03:06:07 me, because I want to go out into the open, open LLM ecosystem and interact with things all over place. Yeah, I think that's a very good question, and there are two ways to look at it. First, it's good that big labs are adding memory in their consumer offering. They are actually educating the market that memory is needed, and they also realize that as models commoditized, memory is the next mode. And it's a matter of time that memory becomes available as an API. But you know, developers who are building all sorts of cool AI apps are using multiple LLMs.

Starting point is 03:06:37 So in that scenario, because memory is not just read only, it's also right. You would want to decouple it from LLM so that's like take one. Now the fundamental thing for why this is happening is, you know, we are going through a technological shift. So far we have been interacting with click, swipe and scroll. But for the first time, we are, we and everyone on this planet is getting the ability to talk to software. You can chat with it. You can say a few words. It will save back to you.

Starting point is 03:07:05 So you as human, I as human, we are accumulating rich personal context. Now, right now, it's a handful of AI agents that we use on a day-to-day basis. And we use like chat, GPD, Claude and, you know, other apps are there. But five years down the line, it's going to be a lot of apps in our life. And imagine if I as a user or you as a user have to explain every app who you are, that's going to be frustrating for you. So in that scenario, we strongly envision and we strongly will make this plaid for AI kind of, you know, functionality out there within you as a user are empowered to carry, to own and carry your AI memories across any app or device that you interact with. Okay. So if you're the plaid for memory and in the future, I am using, I mean, this is a real story.

Starting point is 03:07:56 You're like, I use Gemini all the time for V-O-3. I also, if I'm interacting with a YouTube video, I'll always go to Gemini for that. Gemini is faster in a bunch of different places, but I use the voice mode on Chachabit. I also use Claude every once in a while. Like, I have little memories all over the place. And if I'm in the platy analogy, that's similar to having a Chase account over here, Morgan Stanley account over here, an E-Trade account over there, a B of A account, a credit card, all these things, and I want to bring those together, is that something that you imagine I'll be able to do

Starting point is 03:08:29 when someone comes out with a completely new product that they want to customize? I could go over, we were talking to Adobe or something, and then I could say, yeah, I'm going to off with memo, and then I'm going to allow you to access my memories or my, yeah, my memory in all of the other apps and port all of that in. Is that something that they would let you do? See, that's the future that we feel is highly possible. They won't, I mean, like, big labs won't let you do because for them, memory is one of the modes, right? Yeah.

Starting point is 03:09:03 But if you consider from other side of users, like, you know, the world is not going to be just one app. The world is going to be multiple apps. It's like open eye will be there and generalize, there, Claude, is it right? In that scenario, once, so right now it's like a technological shift. So you and I can relate, but not everyone on the planet, right? But soon they will relate. And because of this new interface of voice. Like, I will feel like, why do I have to tell this software again and again?

Starting point is 03:09:28 Why is this software so dumb? In that scenario, I think, like, users should be empowered to own and carry their memories. So far, it has not been the case because it's just been like clicks, data, you know, your session history. But now you're sharing a lot of personal rich context. You should own it. You should be saying that, okay, I give my healthcare memories to this app. I give my financial memory to this app. And they are in sync.

Starting point is 03:09:53 I think that's a future that benefits everyone, at least everyone on the planet. Is cold email underrated? I actually changed my life because of cold emails. I wrote like 200 cold emails to almost everyone in Silicon Valley back in 2003. I still write like a lot. In this round also, I still wrote like cold emails to angel investors. I think it's the most valuable asset for everyone out there. You should be writing more cold emails.

Starting point is 03:10:25 Everyone should be writing more cold emails. I love it. Handwritten or AI generated? What's it take? No, I still write like everything personally. I just take AI help to fix, you know, some grammar or some structural issues. But should be personally written. Yeah, the AI cold email.

Starting point is 03:10:42 Hey, saw you're in New York. Hope you like, I bet you like Central Park. Yeah. Do you like Starbucks? Anyways, congratulations. Congratulations on the fundraise. It's great, great to meet you and hopefully get to use Mem Zero out there in the wild very soon. Yeah, thank you for having me.

Starting point is 03:11:03 Fantastic. We'll talk to you soon. Have a good one. I have the perfect post to end the show on. Please hit us. Hit me. That is that Tyler's app is broken. Oh, taking shots.

Starting point is 03:11:19 Whoa, whoa, whoa, whoa. He's doing his best. Did you want to do the virality equals taste one? No, I wanted to do, Maytob says, I keep getting ads for cocaine on Facebook. Oh, yes. Just using Linktree as a cloaking page, kind of surprise this works. And to that, I would say, how do you think who's going to pay for the CAPEX, right? Oh, okay.

Starting point is 03:11:42 You're bringing it back to where we started the show. It's meta earnings. If you see this, you got to assume, you know, the, you know, whoever's run that ad advertising cocaine they got to pay a pretty penny they got to pay in their facebook ads manager this is so funny there's a there's a reply here from this guy zach what data does meta have on you and the metab says i was in l.a for a day i guess this was a thing um this was a thing on on facebook of people advertising drugs and it is a game of whackable back and forth trying to catch people because the the lingo will change

Starting point is 03:12:23 and the way people are kind of dog whistling to each other that they have something illegal that they're selling, it's a huge game of cat and mouse that the meta team is kind of constantly working on. And you see those same kind of like breathless panicked news articles about like his Facebook like a hotbed for, I guess, cocaine in this case or, you know, something else and a variety of different adult companies. content or whatever. And it's always this like dance of like how much do they, how much are they

Starting point is 03:12:58 going to invest in trust and safety? How many people are going to be in the loop? How much AI are they going to throw at it? How are they going to have false positives? Because what if you're just posting a meme about Tony's, not Tony Soprano? Tony Montana. Yeah, our favorite song that we used in our in our launch video. If we post that, there's obviously a reference to elicit substances in there. Do you want that to be flagged? No, obviously not. And so It's a constant dance. But very funny that someone actually slipped this through the Facebook's ad review team. I have a funny story about the Facebook ad review team.

Starting point is 03:13:36 There was a time when you could straight up, like there were companies that would basically go and find the individual ad manager who would approve, who would have admin access to the, the, Facebook side of the ad manager, and the company would go and put up an ad and try and get it approved and it would get shut down. The ad would be like, Harvard scientists created this limitless pill that's used by Johnny Depp. It was always Johnny Depp, but it was always Harvard scientists. And it would be a picture of Johnny Depp looking great and then Harvard scientists, and it would link you to some scammy website that would sell you basically some fake neotropic or fake supplement. And these ads were against terms of service like it's straight up snake oil like it's not even like there's no thesis of like oh

Starting point is 03:14:28 it's actually good for you it's just completely fake but they realized that it would convert and it would be very high margin and so what they would do is they would go to uh the facebook ad manager people and they would try and bribe them and say hey if you go in and you approve my ad i'll put a hundred million dollars of ad spend behind it and generate 200 million dollars in revenue and if i can get that ad approved if you as just the individual ad manager can go and tweak the back end. And so there's like a constant war, even inside the organization, to make sure that nothing elicit is happening.

Starting point is 03:15:02 I heard something interesting recently that there's a health influencer and people make AI videos of them, just promoting random supplements on YouTube. So they make an AI video. They'll post the video. And in the description, they'll put links out to products. Okay. And YouTube does not, it will not systematically identify the content themselves. It's just they say they, we support AI video.

Starting point is 03:15:32 Sure. And so this influencer is paying another AI service to consistently monitor for these videos and then report them automatically. Yep. But they have to spend $10,000 a month. It's $10,000 a month. On this service because it's super, it's super intensive from a, and this influence. influencer like needs to, so you can imagine somebody's, you know, I know exactly what we were talking about. Yeah, there's, yeah, it's a constant war. It's a constant war. The solution to bad AI is

Starting point is 03:16:03 good, good, good AI agents with guns, I guess. Give your Neo-Robot a Glock. It needs to happen. Anyway, thank you so much for tuning in today. Thank you for listening to the show. We will see you tomorrow. It's Halloween. We have a special show for you. Please tune in. Leave us five stars on Spotify. and Apple podcasts. Tomorrow is going to be spooky. It could be silly. Have a great, have a good one. And I can't wait. Goodbye. Have a great evening.

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