TBPN Live - Anthropic vs DoW, Ben Thompson Joins, Ellison Says The Biggest Number | James Beshara, John B. Quinn, Michael Grinich, Adam Simon, Matthias Wagner, Joan Rodriguez, Zach Yadegari, Andy Markoff

Episode Date: March 2, 2026

Sign up for TBPN’s daily newsletter at TBPN.com(01:07) - Anthropic vs DoW (39:55) - Paramount Wins Warner Bros. (44:02) - 𝕏 Timeline Reactions (57:35) - Ben Thompson, founder of Stratechery, discusses the implications of AI's growing power, emphasizing the necessity for companies to consider governmental and geopolitical factors, particularly concerning national security and international relations. He highlights the potential for AI to disrupt existing legal and societal frameworks, stressing the importance of proactive engagement with policymakers to navigate these challenges. Thompson also reflects on the complexities of balancing technological advancement with ethical considerations and the need for new laws to address emerging issues like digital surveillance. (01:32:01) - James Beshara, founder of Magic Mind and former CEO of Tilt, discusses his journey from software to consumer packaged goods, emphasizing the iterative development of Magic Mind to enhance product quality before retail launch. He highlights the importance of hiring experienced team members, minimizing meetings, and adopting asynchronous communication to boost efficiency. Beshara also shares his approach to technology use, favoring devices like the Apple Watch to reduce distractions and maintain focus. (01:59:47) - John B. Quinn, the founding partner of Quinn Emanuel Urquhart & Sullivan LLP, is renowned as one of the world's leading trial lawyers, having built the largest law firm dedicated solely to business litigation and arbitration. In the conversation, he discusses the recent Supreme Court ruling that President Trump lacked the legal authority to impose certain tariffs, the subsequent invocation of Section 122 allowing temporary tariffs, and the potential legal challenges companies may face in seeking refunds for tariffs paid. (02:29:36) - Michael Grinich, founder and CEO of WorkOS, discusses the company's role in enabling software developers to integrate enterprise features like single sign-on and directory sync into their applications, facilitating enterprise readiness. He announces a $100 million Series C funding round, highlighting WorkOS's support for rapidly growing AI companies such as OpenAI and Anthropic in meeting enterprise security requirements. Grinich also introduces an AI-powered installer that significantly reduces integration time, allowing developers to implement WorkOS's solutions in minutes. (02:41:09) - Adam Simon is a creative technologist and former Global Head of Innovation at UM US, with over a decade of experience in innovation strategy. He discusses the future of entertainment moving beyond screens into immersive, real-world experiences, emphasizing the role of AI in personalizing physical environments. Simon also highlights the potential of venues like the Sphere and COSM to enhance live events through technology, and advocates for using existing devices, such as smartphones and AirPods, to deliver customized audio feeds at events. (02:54:23) - Matthias Wagner, founder and CEO of Flux, discusses the company's recent $30 million Series B funding led by abc, which will accelerate their development of an AI-powered hardware engineer designed to simplify electronics design. He highlights how Flux's browser-based platform enables users to create custom PCB boards more efficiently, reducing reliance on multiple off-the-shelf components and lowering costs. Wagner also emphasizes the platform's accessibility, allowing professionals from various engineering disciplines to design custom boards without prior PCB experience. (03:02:04) - Joan Rodriguez, CEO and founder of Quiver AI, discusses his company's development of AI models for generating and editing scalable vector graphics (SVGs) through code generation, enabling designers to create and modify vector images efficiently. He explains that their approach treats visuals as editable programs rather than static pixels, allowing for greater control and integration into design workflows. Rodriguez also mentions that Quiver AI recently raised $8.3 million in seed funding led by Andreessen Horowitz to advance their technology. (03:06:57) - Zach Yadegari, an 18-year-old entrepreneur and CEO of Cal AI, discusses the recent acquisition of his AI-powered calorie-tracking app by MyFitnessPal. He shares that after a year and a half of development, Cal AI, which generated $30 million in revenue in 2025, was acquired in December when he was 18, just before he turned 19 in January. Yadegari highlights the app's growth, noting that in January alone, it achieved $5.7 million in revenue, primarily through iOS subscriptions, and emphasizes the synergy between Cal AI and MyFitnessPal in their shared mission to promote healthier lifestyles. (03:12:47) - Andy Markoff, co-founder and CEO of Smack Technologies, is a former U.S. Marine Corps officer with over a decade of service, including roles as a Marine Infantry Officer, Joint Fires Instructor at MAWTS-1, and Marine Special Operations Officer during the Battle of Mosul. In the conversation, he discusses Smack Technologies' mission to deliver "Decision Dominance" to the Department of War and its allies by developing AI-driven decision-making tools for modern warfare, emphasizing the integration of deep reinforcement learning models to process vast sensor data and enhance military operations. (03:22:55) - 𝕏 Timeline Reactions TBPN.com is made possible by:Ramp - https://Ramp.comAppLovin - https://axon.aiCisco - https://www.cisco.comCognition - https://cognition.aiConsole - https://console.comCrowdStrike - https://crowdstrike.comElevenLabs - https://elevenlabs.ioFigma - https://figma.comFin - https://fin.aiGemini - https://gemini.google.comGraphite - https://graphite.comGusto - https://gusto.com/tbpnKalshi - https://kalshi.comLabelbox - https://labelbox.comLambda - https://lambda.aiLinear - https://linear.appMongoDB - https://mongodb.comNYSE - https://nyse.comOkta - https://www.okta.comPhantom - https://phantom.com/cashPlaid - https://plaid.comPublic - https://public.comRailway - https://railway.comRestream - https://restream.ioSentry - https://sentry.ioShopify - https://shopify.com/tbpnTurbopuffer - https://turbopuffer.comVanta - https://vanta.comVibe -

You're watching TVPN. Today is Monday, March 2nd, 2026. We are live from the TBPN Ultradome, the Temple of Technology, the Fortures of Finance, the Capital of Capital. Let me tell you about ramp.com. Time is money. Say both. Easy use corporate cards, bill payments, accounting, and a whole lot more, all in one place. It was a massive weekend, so much news. We are very fortunate to be joined by Ben Thompson at noon. Let's pull up the linear lineup and show you the run-of-show today. Linear, of course, is the system for modern software development. 70% of enterprise workst is on linear or using agents. We got Ben Thompson, James Bashar, John Quinn's coming back in person again.

We're very excited to be joined by him. We're going about tariffs. A monster lightning round with five different guests joining. We got some acquisition news. We got some funding news. We got some takes on tech and AI and media. We're going all over the place. It's going to be a fun, fun show.

But we missed you. We missed you on Friday. We were traveling. We went to Montana. Terrible day to be out. Terrible day to be out because it was... Every single time we've had not. off day. It ended up being a massive news day. So lesson, never take a day off. Yes. Never take a day off.

Truly. What an absolutely crazy weekend, of course, there's the war with Iran. The big news in tech was the U.S. halts the use of anthropic AI after tension over, after tension over guard rails. So this is in the Wall Street Journal. The federal government will stop working with artificial intelligence company Anthropic, President Trump said, marking a dramatic escalation of the government's clash with the company over how its technology can be used by the Pentagon. Quote, I am directing every federal agency in the United States government to immediately cease all use of Anthropics technology.

We don't need it. We don't want it. And we do not do business with them again. We will not do business with them again. Trump said Friday in a social media post. The Defense Department and other agencies using Anthropics Claude models will have a six-month phase-out period, the president said, adding that there would be civil and criminal consequences if the company isn't helpful during the transition. Six months to switch

from one LLM to another feels like a long time. But I guess a lot of this has to do with like Fed ramp and actually getting new models. But this is this is a lot more than you know, switching to a new model to run deep research reports. Yep. So you're involving classified systems. Sure. The context that people didn't have last week. Yeah. Was that the United States was headed to war. Right. And so even having that context, I feel like, is pretty important, right? It sort of explains the 5 p.m. deadline. Anthropic had taken issue with how their products were used in the Maduro raid.

There's a new conflict that's unfolding. And so that makes the aggressive timeline make a lot more sense. It also makes the six-month phase-out make more sense because national security is on the line. This morning, Scott Besson said at the direction of the president, the U.S. Treasury is terminating all use of anthropic products, including the use of Claude within our department. Yeah. The American people deserve confidence that every tool in the government serves the public interest. And under President Trump, no private company will ever dictate the terms of our national security.

Yeah. The U.S. federal housing, Fannie Mae and Freddie Macer, also terminating the use of anthropic products, which was announced this morning. Yeah, which I think. goes in line with the original direction. Trump said, I am directing every federal agency in the United States government to immediately cease all use of anthropics technology. So you would expect to see these statements

come out from sort of every different federal agency as they sort of get their transition plan together, figure out what are the requirements for their particular agency? Because I imagine some agencies aren't operating in classified environment. It's going to be much easier for them to onboard to a Gemini or an Open AI or a GROC very quickly. Some of them it's going to be a longer plan, but they're all getting on board and there's been a big debate over How Dario has handled this? Where is he in the right? Where's he in the wrong? Where's the where has the government?

Potentially overstepped? Have they been too aggressive or are they doing everything appropriately? Everyone is weighing in and we're going to take you on a whirlwind tour of everyone's opinion share some extra context to try and dig into what's actually at stake, what's actually going on. It's a, in many ways, Ben Thompson does a great job sort of painting the broadest picture around like, what if this is really nuclear level technology, what should we expect in that scenario? And then there's the more minor side, which is, you know, you're talking about a $200 million contract for a company that does $10 billion in ARR. This is 2% of revenue. In many ways, it's, you know, a bump in the road. And so I think a lot of people will be

squaring how serious is this for anthropic? What does this mean for the other foundation model companies? What does this mean for the future of the relationship between tech and Washington, D.C.? But there's a lot more context. So the way I processed this was interesting because I was very, I wasn't fully offline, but I was not surrounded by tech people over the weekend for the most part. And so I was following it and sort of wrestling with some of the same questions that people were wrestling with online. The big one was just how should a private company interface with the government? Like I am an American, I've run businesses. I've never actually sold anything to the government, but hypothetically I could imagine the government coming and wanting to buy, I don't know,

ads on TBPN or Lucy products or any other consumer package goods product that I've made. And my assumption is that the private company should have very little, very little say in how the government uses those products. And I was trying to zoom out and think about like, AI is so complicated because it could be superintelligence, could be auto-complete, could be coding help, could be knowledge retrieval. There's a lot of different things that AI means. And in some scenarios, it's like super critical, really complex. And in other ways, it's just a product.

It's just a service like an Excel sheet, like Microsoft Windows installation, like a car. And so, yeah. So I was thinking, like, if I was the CEO of Ford, how, and I make Mustangs and Ford Explorers and F-150s, and the government comes to me and asks me to buy some cars. I should probably treat them like any other customer. I probably shouldn't say, no, no, no, I don't approve of this particular government,

what the government's doing, so I'm just not gonna sell you any Mustangs to drive around on the military bases, because I don't like the military. But then if they ask me, hey, we love the Ford Mustang, we love the F-150, we love the Explorer, but we're going to war, and we want you to put bulletproof glass on there,

and armor, That seems like a different discussion. That seems like I might need to, you know, set up a different manufacturing line. I might need a different assembly line. Like the car's going to be heavier. And if I put bulletproof plating on all the cars, well, like, a lot of families are going to be like, I don't want an arm. It's going to hurt my business. Yeah, it's going to hurt my business.

Exactly. And so that negative externality probably needs to be internalized by the government who's asking for that particular contract. And there's actually a history of this, like the Humvee, of course, the Hummer. is owned by General Motors, and that brand has separated. And now most military vehicles are made by defense contractors, but there is some bleed over, and there's sometimes when private companies do dual sourcing or dual-use technologies.

And so, but all of that is just like a discussion, and that cost should be part of a new contract, effectively, in my case. And this was loosely what was happening, but... Yeah, and Dario, in the CBS interview quote, We are a private company. We can choose to sell or not sell whatever we want. There are other providers.

Yes. Which feels like... Yes. Like I'm dipping out of it. Now, it is weird because he, at the same time, and we'll get to the actual CBS interview, but he said, Anthropic has been one of the most proactive AI companies in working with the U.S. government. We were the first to deploy models on classified clouds and the first to build custom models for national security, which is odd because I feel like this was predictable from a lot of the writing that has gone into the AI community broadly,

like what happens at the edge. And so this was sort of predictable that you would get to this question. Yeah, this was the moment he had been waiting for. In many ways. And so it's weird that you would be able to predict that this would happen, that there would be this question of like who gets to decide how the technology is used. And you wouldn't just be like, well, I know. how it's going to play out. So I'm not even going to go in the lion's den because like I don't want to be in that scenario. Instead, it was like we're leaning in with the government. We're deploying on classified clouds, training custom models, but we still want authority over the final last, you know, sticking point on how these models are deployed, what they're used for. And that feels a little odd. Like in the in the Ford example, like if I sell them a Ford F-150 and they say, hey, we're going to take it to Iraq and,

and go do a military mission, I'm gonna be like, look, like, it's not ready for that, it's not armored, you shouldn't do that. But if they do it, then it's kind of on them. I should be clear about the capabilities of the vehicle and how much, you know, how bad it would be in that situation, but it's on them to go retrofit it, figure out what's, what's, you know, legal,

what's most valuable to their strategy, to their mission, what's aligned, maybe they'll use it just to drive around the base. Maybe they won't actually take it out on tours of duty, right? based on what you know about the capabilities of the model. And so I thought it was totally reasonable for Dario to say that anthropic models, in his view, are not capable enough to be deployed in certain Department of War contexts. Now, it's bad salesmanship. Most salespeople would just be like, yeah, everything's great. You can use it for anything.

The over promise and then under deliver. He's doing the opposite. But it's certainly responsible if that's his true belief. Like if he believes that these models are not good for a particular use case, telling your customer that, hey, like, it's just not ready for that. Like, you're just going to have a bad time. It's not going to work. That's a fine thing to communicate as the CEO of a company who's selling a product. But at the same time, I still think the government has the freedom to assess the efficacy of those models, which are changing in capability rapidly. So he's saying, like, right now, it's not good for X, Y, or Z. Well, what about in two months? Like, it might be better. And then, and then I think the government should be able to determine when and where they're effective. Now, They can't break the law and Congress and the American people by extension are free to create new laws to restrict or encourage the use of technology in all sorts of ways. And that's like the way America works. That's the American project. But it's not unreasonable to share the capabilities of your product with the government, which I think is totally fine. So there were two main sticking points that they went back and forth on.

No mass domestic surveillance and no fully autonomous lethal weapons. and there's been a question as to why OpenAI was allowed to include that language in their contract and say, like, hey, we don't think our technology is ready for that either. Let's do a deal if it says that. And people are like, oh, like, like, what's different here? Why could open AII? Well, here's the thing, though. So we know that Anthropic took issue with the way that Claude was used in Venezuela.

Yeah, yeah, yeah. And the Department of War would have known that, hey, we're going to war, right? Yeah. You can imagine that Anthropic, a private company, does not know that. And so they have this deadline. There's this information asymmetry. Yeah, this information is asymmetry. Yeah.

They have this deadline. The Department of War knows that they're going to war. They're like, we need reliable AI systems for this conflict. We now know the war, the president said this morning, said the war is going to stretch four to five weeks, right? I think on Friday, we all assumed that it was going to be, you know, in and out super quickly. Yep. So the timeline is extending. And the Department of War is sitting there being like, we need to know that our, the, the,

provider of these AI systems is going to be reliable. Just a little bit ago, they took issue with it, right? Can we count on them? They start this kind of renegotiation process, right? And to try to build up confidence that, hey, we can rely on these systems in an active conflict. Yep. In a conflict that feels already much more serious and will have much greater implications

than the Venezuela conflict, right? And so Anthropic is looking at this in a different way. and clearly is like leaning in and like really in some ways felt like they were kind of like stirring like really really like not not not respecting the process so like when I when I or even the deadline right so Emil Michael came out Friday night and said it was 513 13 minutes past the deadline I'm trying to get in touch with Anthropic I try to get on the phone with Dario Dario says he's in a meeting and I feel like in that in that situation, if I'm the Department of War and I'm about to lead the country into war,

we can debate on whether or not the war is justified, should we go? But the Department of War is sitting there being like, you won't even jump on the phone. You're telling me there's a meeting that you're in that's more important than, and that just screams to me like, hey, we can't count on this. We can't count on this provider. Like, we need to take drastic action. Now, this whole supply chain risk designating. We'll get into that later.

That's a whole other thing. But I can see why the department war came out of last week and was feeling like, hey, we cannot rely on this provider. We need alternative solutions. Yeah, yeah. If I'm shipping cars and I'm like, oh, I actually, I disagree with the latest decision. I'm not going to put the cars on the transport.

Like that's an odd scenario to be in. There's also this question of like these, a lot of people were like really, really keen on boiling down the terms to like these two like buzzwordy lines. And Paul Merlucky did a great job explaining like how complex these terms are. What is autonomous? What is defensive? What about defending an asset during an offensive action or parking a carrier group

off the coast of a nation that considers us to be offensive? And that's where you get into like the ideas of deals that stick basically. Like you can have the same exact contract line item or terms of of a deal with two different people. And it can be a wildly different experience. Most entrepreneurs have felt this because they were like, yeah, I had a handshake deal with one VC. It was 20% and a board seat.

And I had another deal with another VC, 20% in a board seat. And the one VC was like suing me and threatening me the entire time. And the other person was very flexible and clearly very aligned. And so building up a relationship that shows that there's some trust, reliability, that when the hard decisions come, that they will be made. made in a legal, logical, consistent with American values way is, I think, what you need to put forward if you want to work with the government effectively. So if you've developed, if you have a good working relationship with someone, it's much easier

to give on specific terms that will need to be cooperatively interrogated over time. And so semaphore reported that Anthropic disapproved of its technology being used during the Munduro raid and the joke was that the Department of War was probably just asking basic knowledge retrieval questions like who is nicholas maduro but i don't know how much of a joke that is and i also i don't know how bad of a thing that is i actually think uh yeah tyler what i was to say like on that on the context of venezuela like specifically like what it's actually reported is is that after an anthropic employee inquired with palanier about claude's role in the raid palateteer senior executive notified the pentagon yeah so i think it is like kind of blowing it out of proportion to say

that like anthropic is against using Cloud in Venezuela, right? It's an employee, it's not an executive. Maybe it's like Dario telling an employee to go check on that. But like we don't know. It can just be like a random employee. I think it's probably unfair to say that anthropic as a whole is like we are firmly against Claude being used. What happened during the Maduro raid?

We don't even know. And of course it's classified. So like I don't know if that we'll ever know because like should we know. I don't know. If it's an important capability, you don't necessarily want that to be public knowledge that then the adversary is instantly aware of. And so I was thinking back to that viral interaction between Ted Cruz and Tucker Carlson, where Tucker asks Ted Cruz, like, what's the population of Iran? And Ted Cruz doesn't know. And it was framed as like, well, how can he possibly have a reasonable take on Iran if he doesn't even know the population?

And that's like somewhat fair. You could go either way on that. But I just think like LLMs are good for that type of thing. Like we do, it is what is reasonable is to, you know, expect civil servants, elected officials, military officials to be knowledgeable about the countries that they are operating in. And LLMs can help with that. And so I feel like that's just a good thing. Like if you just zoom out and just ask, like, do we want a more knowledgeable and educated government workforce

across everything that they do. It seems like absolutely yes. And so I just think that that's something that is maybe lost as people go into more of the sci-fi, more of the frontier stuff, that there isn't a lot of evidence that's happening yet. And on the supply chain risk, Ben Thompson, who's coming out at noon,

makes a really strong argument for why government pressure like this is actually reasonable in this situation. He takes it a lot further, plays it out, and lays out a scenario that, that seems somewhat inevitable. But what I'm still wrestling with is just how real the supply chain risk designation is. Like, many reports are treating the supply chain risk label as like an established fact. Yeah, which all it is is a tweet from Hague Seth.

It's a tweet from Hegseth right now. Dario went on CBS and said that he has not received a letter that there's no definitive ruling yet. Kalshi has the odds that this actually happens at, 42% and so and by April 1st, so a full month for the DOD to actually roll this out. And then there's other nuance where the law says that there was a perception that this was like going to kill Anthropic because if Nvidia has a government contract, then they can't do any deals with Anthropic whatsoever. And that's not true apparently. The supply chain risk is specifically if you are a company and you're working on a government

contract, you would not be able to use anything that's labeled as a supply chain risk on that contract. But you could use that product in a different piece of your business. And so it's still dramatic. Still, I think Dario said it was unprecedented. It's only been used for foreign countries. Kaspersky Labs was a Russian cybersecurity company that was deemed to be a supply chain threat. Huawei is a supply chain risk because of the 5G towers that could potentially have back doors. Somehow D.D.I still is not. Crazy that D.J.I isn't. And I think that a lot of people would be very upset if Anthropic got a supply chain risk designation before DJI, based on just what we talked about last week,

where DJI was found to have a whole bunch of backdoors on robot vacuum cleaners and whatnot. So lots of nuance there, but we'll see where the supply chain risk discussion actually goes. It feels like the pressure's on, and there's probably more negotiations happening as we speak, and so we'll be following the story. Yeah, Emil Michael was going through the timeline. He said, today at 904 p.m., no response yet to my calls or messages to Dario. Today at 825, anthropic rights, we have not received direct communication from the Department of War. Of course, Emil Michael is the Undersecretary of War.

Today, 514's Secretary of War tweets supply chain risk designation. Today, I call Dario's business partner in 502 asking to speak to Dario because he hasn't gotten back to me. She is typing while we speak and likely as lawyers in the room with no notification to me. That's a guess. I called Darya at 501, no answer. I messaged Darya asking to talk as well. And anyways, he's just arguing like they're not negotiating in good fate. Yeah.

Let me continue, but first, let me tell you about Figma. Ship the best version, not the first one, with Figma introducing QuadCodeCode to Figma, explore more options, push ideas further. And let me also tell you about cognition. They're the makers of Devin, the AI software engineer, crush your backlog with your personal AI engineering team. So speaking of Dario on CBS, he did unpack some more of his logic,

which clearly resonated with some people. There was a lot of supportive posts. There were a lot of, you know, anti-posts, but it caused a discussion. I was left unsatisfied with his answer on one question. So he was basically arguing that LLMs, as a class of technology, hallucinate and should not be used for, autonomous weapons, which is clearly a commentary on using AI at the Department of War broadly.

But I thought it would have just been better, like much more stronger communication for him to say, hey, look, we're entropic. We've built a system that's specifically good at answering questions, being friendly and helpful, writing code. Like, our system is awesome at that. But we don't make a product that we'd recommend using for autonomous weapons. And it's tricky to try and like twist arms here. and sort of like, because he's in a leadership position, act as like the steward of what, like he is an expert in LLM capabilities, but he's not necessarily an expert in, you know, DOD capabilities.

And so it was odd to hear that he was like sort of painting with a broad brush and clearly believes, which is fair, it's his belief, but he clearly believes that the Department of War should not be using AI, broadly and then he was trying to use his contract as a way to sort of enforce that because he has that leadership position with the most deep integration to classified systems. So I thought that it was just sort of like a like a mistaken comms opportunity there. And there's also been some

mistaken commentary floating around that America does not have laws that prevent mass domestic surveillance, which I thought was really interesting to hear. We do. We have the Fourth Amendment which reads literally the right of the people to be secure in their person's houses, papers, and effects against unreasonable searches and seizure shall not be violated. I think people maybe forgot about that, but there are obviously a lot of nuance and different things.

Like if public information, does that count of surveillance? Does the IRS count of surveillance? Do the automated traffic cameras count of surveillance? There's a lot of things where surveillance is broadly popular. There's other things that's massively unpopular. And of course, it gets, into the actual definitions, 20 lines deep to understand what happens in the court.

There was a case recently of the government using a drone to surveil protests, and it was held up in court as acceptable, but the court gave notice that going forward this should not be used and that the laws need to change. And the judge was like, this is technically legal, but it's not in the spirit. And so we need to revisit this as a country.

And that's a lot of what's coming away from this is that if you put, there's a view of like Dario as sort of like making this like last stand, which in the best case sort of just actually kicks it back to the American people, because the whole debate right now is, is Dario like the God King corporate emperor of this private company that has control over and like you don't get to vote what he does

versus democracy, America, government, right? And the good case is probably that, you know, He makes this stink and his deal sort of falls apart, but then America responds and the populace votes for what they think responsible use of artificial intelligence technology broadly is. And that would be something that I would certainly stand by as a fan of American democracy. Let me tell you about ACTA. Octa helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent, secure any agent with Octa. And let me also tell you about Lambda.

Lambda is the superintelligence cloud building. AI supercomputer for training in the inference that scale from one GPU to hundreds of thousands. Let's go back to the timeline. We have Ben Thompson joining us in about 30 minutes. There are other reactions and other breakdowns. We can actually kick off with this breakdown of Ben Thompson's piece because I think Dan IRL underscore Dan B summed it up pretty well. Do you want to go for it?

I'll take a crack in it. Ben Thompson, as always, lays out the reality more clearly than I could have, despite my attempts. By Dario's own words, he's building something akin to nukes. He's simultaneously challenging the U.S. government's authority to decide how to wield said power. As much as I like Claw and as much as I dislike Heg Seth's extra legal might-makes-maint-Mexambering, I will ask you again, what did you expect? Vibes, essays. This is the reality of all too many of my EA followers that they've been proclaiming for years now. they're seemingly upset that this reality has come to bear.

And there's this interesting note that has been going around that one of Dario's favorite books is the making of the atom bomb, the making of the atomic bomb. And it tells the story of the scientists that built the atom bomb, and then eventually that technology was nationalized. And he apparently gives this book out to anthropic employees and has sort of seen it as like a roadmap for what might happen with AI. And I was struggling with it because I was like, is it a cautionary tale? Like, we haven't had nuclear war in 70 years.

the outcome seemed pretty good. Maybe it's a controversial to say, but I feel like we built the nuclear bomb, which probably not the best technology, pretty dangerous, pretty risky. I don't like the idea of nuclear war, but the system that we developed to prevent nuclear war has been successful. Knock on wood, but it's been successful in my entire life, in my parents' life. The bombs haven't fallen since the 40s.

And so this idea of the government having authority over something that is as powerful as nukes, I feel like, why fix it if it ain't broke? I don't know. Do you have a different scenario where you have a bunch of private companies that have nukes and there's this constant ongoing sort of debate. Defend McNukes. Well, no, no, I think it's kind of this weird contrast because like basically until like last week, Daria has been like the AI CEO that's been like, we need government regulation.

Totally. He said this again and again on lost death and on whatever. But then it's like, okay, how do you swear that with him saying, we're going to do the stand against the DOD? Like it seems kind of like... It is a little odd. Totally. It's a contrast amount, right? Yeah. Yeah. It's like, I don't know.

There's just a much better way to handle it, which is, which is, you know, put up billboards. I don't know. Like, it's like fun to pack. Like, do more stuff to actually make the law happen. Yeah. And the way that I was personally processing it, I was, I saw that the, the CBS interview had happened. This was Friday night, right? I went to the Paramount app to try to find the interview.

I couldn't find it. I went to the RSSV. I couldn't find it either. It's on YouTube and it has a million point three views. Yeah, so it went out over the weekend. And then almost in the same session, I'm seeing that we are now at war as a country. And so all the kind of blowback against Open AI,

I was processing that of like we want our, This technology is critical. The government clearly needs it. And now we want the labs leaning into working with the Department of War at this critical moment in time. Continue on this post. Yeah. One last thing on the nuclear weapons thing. It is very interesting to see the actual structure of the nuclear weapons industry.

Because I think people don't realize where that industry wound up. Yes, it got like nationalized. But there's actually a ton of private companies that work on nuclear weapons, which is crazy to say. But basically, the IP is owned by the Department of Energy. The warheads are manufactured at facilities that are owned by the Department of Energy, by the government. But they hire contractors from private companies to actually operate those facilities, and then they answer to the government directly. So these are companies like Bechtel, BWX Technologies, Honeywell, and Battelle.

And then in terms of actually building the missiles, those are built by Lockheed Martin, Northrop Gumman, Boeing, General Dynamics. They build the missiles that don't have the warheads on them, and then they sell them to the U.S. government. And so they wound up in this, like, you know, hybrid public-private partnership. And I don't know. It just feels like, maybe it's like left-curving this, but like it feels like it's good. It feels like it worked out. It feels like the nuclear weapons thing is the correct formulation. And I don't know that I would be like, yes, Boeing needs nukes.

Like, let's give Boeing nukes. That's great. If I have a problem with how nukes are rolled out, I'll buy shares in Boeing and sue them and join the board and try and get the CEO fired if he fires off nukes. Like, that feels weird. Continue with this. Continue with this. Okay, yeah, we'll close with. Even now.

Even now, I hear many of you say something akin to. If this is what it comes to, I'd prefer King Dario to King Hegseth. Listen to yourselves. This is a declaration of war. Given this, of course, Hegg Seth is taking the action he is now. You thought I was joking when I referred to this situation as a Thucydides trap. Anthropic is a rising power by your own belief system. While I may share your preference in the abstract, I disdain your foe surprise that this is the resulting trajectory. And if the surprise is genuine, I ask you to dig deeper and reconsider the actual consequences of your worldview about what it means for a private company to build ASI. Heading over to Palmer, he says this gets to the core of the issue more than any debate about specific terms. Emile is sharing prior to their new constitution, Anthropic, had an old one they desperately tried to delete from the internet. Choose the response that is least likely to be viewed as harmful or offensive to a non-Western cultural tradition of any sort. Palmer says this gets to the core of the issue many more than any debate about specific terms. Do you believe in democracy should our military be regulated by our elected leaders or corporate executives?

seemingly innocuous terms from the latter like you cannot target innocent civilians are actually moral minefields that lever differences of cultural tradition into massive control who is a civilian and not what makes them innocent or not what does it mean for them to be a target versus collateral damage existing policy and law has has very clear answers for these questions but unelected corporations managing profits and PR will often have a very different answer imagine if a missile company tried to enforce the above policy that their product cannot be used to target innocent civilians that they can shut off access if elected leaders decide to break those terms. Sounds good, right? Not really. In addition to the value judgment problems I list above, you can also account for questions like, what level of

information classified and otherwise does the corporation receive that would allow them to make these determinations? How much leverage would they have to demand more? What if an elected president merely threatens a dictator with using our weapons in a certain way, a la madman theory? Is the threat seen as empty because the dictator knows the corporate executives will cut off the military? Is the threat enough to trigger the cutoff. How might either of these determinations vary if the current corporate executive happens to like the dictator or dislike the president? At what level of confidence does a cutoff trigger, both in writing and in reality? The fact that this is a debate over AI does not change the underlying calculus. The same problems apply to definitions and use of ethically

fraught but important capabilities like surveillance systems or autonomous weapons. It is easy to say, but they will have cutouts to operate with autonomous systems for defensive use. But you immediately get to the same issue and more. What is autonomous? What is defensive? What about defending an asset during an offensive action or parking a carrier group off the coast of a nation that considers us to be offensive? At the end of the day, you have to believe that the American experiment is still ongoing, that people have the right to elect and unelect the authorities making these decisions, that our imperfect constitutional republic is still good enough to run a country without outsourcing the real levels of power to billionaires and corporates and their shadow advisors, I still believe.

and that is why, bro, just agree the AI won't be evolved into autonomous weapons or mass surveillance. Why can't you agree? It's so simple, please, bro, is an untenable position that the United States cannot possibly accept. And Emil Michael had said that Anthropic wanted to block searching over public databases as well. Like you might want to search over LinkedIn to look at recruiting, right? So it's like these sort of like blanket bands are going to make the product like functionally. Yeah, it's not really like a blanket ban.

It's more just like the discretion lives with the private company. And so the, you always have that ability to change the terms of the use, which is, it's just tricky. It's just tricky. Well, people are, at least some people are having fun with it. Roman Helmink guy says, hi, I'm a private citizen who developed a super weapon, potentially a thousand times more powerful than nukes, and now I'm selling it to the government, but I get to choose who they fire it at and how everyone, and how, everyone please respect my decision.

People are all over the place with this. There was also David Sacks had shared a clip alongside Beth. we can pull up Mark Andreessen talking about his experience with the Biden administration. People are going really, really hard. We pull this up. Iran is bomb there. EWS data centers. Lots of, lots of stuff going on.

I just dropped you guys a link. Keithra Boy said, imagine Apple sold computers or iPads to the DoD and tried to tell the Pentagon what missions could be planned on their computers. A lot of people are upset about this. We have meetings in D.C. in May where we talked to them about this, and the meetings were absolutely horrifying, and we came out basically deciding we had to endorse Trump. Mark, add so little color to absolutely horrifying. What did you hear in those meetings?

They said, look, AI is one of these technologies. AI is a technology basically that the government is going to completely control. This is not going to be a startup thing. They actually said flat out to us, don't do AI startups. Like, don't fund AI startups. It's not something that we're going to allow to happen. They're not going to be allowed to exist. There's no point.

They basically said AI is going to be a game of two or three big companies working closely with the government, and we're going to basically wrap them in a, you know, I'm paraphrasing, but we're going to basically wrap them in a government cocoon. We're going to protect them from competition. We're going to control them, and we're going to dictate what they do. And then I said, well, I said, I don't understand how you're going to lock this down so much because, like, the math for, you know, AI is, like, out there and it's being taught, everywhere and they literally said well you know during the Cold War we classified entire areas

of physics and took them out of the research community and like entire branches of physics basically went dark and didn't proceed and that if we if we decide we need to we're going to do the same thing to math underneath AI. Wow. And I said I've just learned two very important things because I wasn't aware of the former and I wasn't aware that you were even conceiving of doing it to the latter and so they basically just said, yeah, we're going to take total control the entire thing and just don't, don't start startups. And Mark, what was steel manate for the listener? Like, what was their argument? Why was...

Well, it's more... So this gets into this whole, like, all these debates around like AI safety, AI policy. So there's sort of several dimensions on it, and I'll do my best to steal man it. So one is just, like, to the extent that this stuff is relevant to the military, which it is, like, if you draw an analogy between AI on autonomous weapons being like the new thing that's going to determine who wins and loses wars, then you draw an analogy to in the Cold War, that was nuclear energy. That was nuclear. That was nuclear power and that was the atomic bomb. And the federal government, the steel man would be,

the federal government didn't let startups go out and build atomic bombs. You had the Manhattan Project and everything was classified and at least according to them, they classified down to the level of actual mathematics. And they tightly controlled everything. And look, that determined a lot of the shape of the world, right? And so there's that.

And then look, there's the other, that's part one. And then look, I think part two is there's the social control aspect to it, which is where the censorship stuff comes right back, which is the exact same dynamic we've had with social media censorship and how it's basically been weaponized and how the government became entwined with social media censorship, which is one of the real scandals of the last decade, a real problem, like a real constitutional problem. That is happening at like hyperspeed and AI. And these are the same people who have been using social media censorship against their

political enemies. These are the same people who have been doing debanking against their political enemies and they basically, I think they want to use AI the same way. And then look, I think the third is, I think this generation of Democrats, the ones in the White House under Biden, they became very anti-capitalist. And they wanted to go back to much more of a centralized controlled planned economy. And you saw that in many aspects of their policy, but I think, quite frankly, they think that the idea that the private sector plays an important role is not high up on their priority

list, and they think generally companies are bad and capitalism is bad and entrepreneurs are bad, and they've said that a thousand different ways. and, you know, they, you know, they demonize, you know, entrepreneurs as much as they can. It's interesting. Canadian publication, the Globe and Mail, came out yesterday and says, Canada needs nationalized public AI. And Toby, the greatest Canadian entrepreneur in history, says, deranged drivel in response.

But, yeah, Elon also piled on to Sax's take. which, you know, centered around a lot of those staffers, allegedly going over to Anthropic. It's interesting. We were talking about, like, these alliances that happen. Like, there's the anti-Netflix alliance, the anti- YouTube alliance. There's, like, a little bit of an odd alliance

happening against Anthropic right now. Let's move on over to Netflix and Paramount because there's news in the bidding war. First, I'll tell you about graphite. Code review for the age of AI. Graphite helps teams on GitHub, ship higher quality software faster. And I will also

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with none other than Ben Thompson in 20 minutes. In the Wall Street Journal, in the exchange section this weekend, And they have a full, full bleed article. How David Ellison finally got what he wanted. And I love the subhead. No, no, no, no, no, no, no, no, no. Okay, yes.

He got 10 noes and then finally got it done. Never give up. Never, never give up. For six months, the son of one of the world's richest men kept hearing the same unfamiliar word, no, even before he closed a deal to combine his company. with a much bigger one. David Ellison was already plotting to do it again. Once his Skydance media took control of Paramount, he turned his attention to a Hollywood icon, launching an audacious takeover bid for Warner Brothers Discovery that would give the

Ellison family full control of a sprawling media empire. So he came in with an offer at $19 per share, finally got it done at 31 a share. The final Paramount winning offer, 81 billion dollars. And again, as we are covering this live, every time that Paramount made an offer, they were very clear that it wasn't their best and final. So it makes sense that it kept getting ratcheted up, even though Netflix obviously played a pretty big role in it, ultimately getting priced where it did. Sleepwell says, so let me get this straight. Paramount approaches Warner Brothers for acquisition. Netflix puts a higher offer for Warner Brothers. Paramount puts an even higher offer at 7X leverage. Netflix declines to match offer. Now, Paramount and Warner Brothers

will have to license all their content to Netflix to pay off all that debt, 3D chess. A lot of people were thrown around the succession moment. Congratulations on saying the biggest number. So Paramount will be footing the $2.8 billion breakup fee paid from Warner to Netflix. Which was paid Friday. it was paid already. Yeah. Yeah, Netflix stock is up. Paramount stock's also up.

And just David Zaslov has to be one of the greatest deal makers in history now. Yeah. Got the absolute maximum price for sure. So somehow Netflix was able to force one of its rival to overpay for another one of its rivals, putting them into a

messy long process of unification and got paid $2.8 billion for it. Yeah. So I feel like the idea of Warner Brothers licensing content to Netflix to pay off the debt is one possibility, but there are other streamers that they could license to. And so I'm not entirely sure they could, like, you could just put the Dark Night on Apple TV. Like you could license it to Apple, you could license it

to Prime Video, there's a whole bunch of different buyers of that content. So it's not, it's not like, oh, now because of the economics, like it's Netflix gets the whole library for sure at a good price, license forever. And also Netflix has other, like, they, they're not, like, There were more synergies than just, okay, we're going to put Batman on Netflix. There were other things that they were going to be able to do, new series, new spinoffs. Like they would have more creative control, more creative direction. So I'm not sure if that's 100% right, but it does seem like a good outcome for Netflix. And one that I did not predict.

I really thought Netflix was going to get this done, but it didn't happen. So what does Peter Kafka have to say? Peter Kofika and Business Insider had some reporting. They said from Zazlov apparently said the deal may not close. If it doesn't close, we get $7 billion and we get back to work. Also said if Warner Brothers is going to survive, they needed to be bigger and we needed to be global. Yeah, yeah. I mean, there's a lot of opportunity here.

Netflix confirms that they receive the $2.8 billion termination fee. Somehow Netflix was able to force one of its rivals to overpay for another one of its rivals putting them into a messy long process of unification and got paid 2.8 billion for it. Okay, so we have a new leak. A new leak. The Open AI device has been spotted in the wild on none other than Joe Gabby's head, which is amazing. If we can pull this image up, either the video or zoom in on the image, it looks like what we saw in that leaked preview of that Super Bowl commercial. There's a little bit of, either the video or zoom in on the image. It looks like what we saw in that leaked preview with that Super Bowl commercial. There's a little. a device on the table that looks sort of like a hockey puck. I am so excited for what this is. I love new hardware, even when it's still languishing in the early adopter world. I'm a big Applevision pro guy, as all of you know, and I will be very, very eager to daily drive a new hardware product for a little bit. Let me tell you about turbopuffer, serverless vector in full-tech search built from first

principles on object storage fast 10x cheaper and extremely scalable and let me also tell you about the new york stock exchange want to change the world raise capital at the new york stock exchange still gearing up for a banger year at the new york stock exchange you guys think this was a leaked on purpose because if you watch the video the second video yeah it looks like the the framing of it looks very much like uh found footage like he yeah at the end of the video he pans hands down and it's like oh i got to hide the camera yeah it's like uh It looks kind of plant. It's possible.

It would be a cool rollout to like tease little leaks here and there, build a little bit of attention without doing like a look at me campaign. We're doing, you know, you throw leaked in front of something, and it just gets more attention. So it's totally possible. This is some more for DHS. Zach is not saying, oh, look at the, there's a new device right there. He's like not, you know, saying it directly.

Okay. Okay. I like that. Yeah, I can see it. Milkman says, just shipped a feature to a client 30 minutes after he asked for it. mistake. Just shipping too fast. That's the new timeline for every project.

What is going on over at semi-analysis? Obby said, asked my wife what she was reading to fall asleep. She said semi-analysis. Baste are not going to make it. Dylan. Dylan says, that's our wife now. Dylan was on an absolute tear this week. Got him.

Posting. Paula says, when your friends go to the Brazilian Steakhouse without you, that's Fomo de chow. It's true. I had some foam-o-de-chow and you banned me from going there, unfortunately. I was so excited when we were in San Francisco to visit the Bain Capital-backed Steakhouse, but we had to go to some other place. It was good.

Getting into the block news, which happened on Thursday, and we didn't get to cover the fallout. That happened like six months ago, right? Yeah, that's six months ago. The AGI age. Daniel says what we've really learned from the last five years is that Jack Dorsey runs extremely bloated companies. There was some other news on this with Block. Someone posted the mix of, yes, so Sakit. Oh, it was deleted.

Interesting. While we have it saved, we won't fully dox the account. But I don't know if this is real because it's been deleted, so it might be fake. I don't know. But most of you have heard about Block's 40% layoffs by now, but the numbers are even worse. Engineering was hit harder. We've lost close to 70% of our engineers. the company you once know as a prolific open source software contributor no longer exists.

And so I was wondering, like, they're laying off 40%, how will they be shifted? Because the AI narrative, the job displacement narrative, that could be back office people that are processing manual workflows. Or it could be software engineers who now there's a smaller team that's getting more leverage out of AI tools, and so you write more off. There's also just the world where you're a mature software company and you have lock-in And you're like, yeah, we actually don't need to ship that many more features. We have sewed for so long.

It is time to reap. But I am still bloat-pilled. I still believe that this is somewhat of a unique... Loat-driven. This is somewhat of a unique situation. But it didn't stop the market from absolutely puking on Friday. Amex at one point was down something like 7%. MWT says I'm fully on board with spiraling into a...

depressive episode over the rapidly approaching neo-feudilist breakdown of society, but I worked at Square in 2017 and my job had no tasks. I sat on the roof eating free snacks all day with a Macbook. Ben Carlson also calling out that he says maybe block laying off a ton of employees is a sign that AI is going to destroy everything, or maybe the stock is down 80% from the highs and they over-hired, and AI is a convenient excuse. So, yeah, I mean, we've just called this off, called this out so many times over the last year as companies did rounds of layoffs and said it was because of AI-related efficiency. But, again, it is oftentimes the best possible reason if you're going to better, better than saying, you know, we don't know what we're doing and we've been running with 4,000 too many people for a while now. Yeah, at the same time, I mean, has the market continued to like it? Because the stock popped a bunch, and it felt like that might cause a continuation.

Yeah, I mean, it's stabilized. It's up 28% over the past five days. And so it does feel like this could have some sort of contagion effect, a lot of other CEOs looking at this and saying, okay, well, I'm at least a theoretical victim of the Saspocalypse. I need to do something. I'll do it. So we should, we could see, we could see more layoffs from tech firms. It doesn't seem unreasonable, but at the same time, this does feel like a little. And the irony is that it's, it's only Dorsey

companies that have run these sort of mass layoffs, right? Yes, yes, yes. I ran the numbers, and this was the largest RIF in S&P 500 history. Somebody was in my comments saying, you know, sharing the Lehman Brothers. And Lehman Brothers was actually interesting because they went bankrupt. They were delisted the same day, and then the riffs actually happened over time, but a lot of people were shifted around and transferred over to different jobs. And ultimately, the company just ceased to be in the S&P 500. Yeah. Bucco has... Oh, so it wasn't in the S&P 500 when the layouts happened. They were delisted the same day. That's a good point. Victory for Jority. Same day. Never questioned. Bucco says mostly, he's talking about the cuts, mostly about X, Y, Z,

which is, of course, the ticker being poorly run. Not really about AI, but most others, small to medium cap tech, also poorly run expect many more cuts. Below I tweeted that they only needed 60% of their company. That wasn't a random number. Pull up any fintech SaaS chart. And you can see that employee count exploded. Demand exploded in 2020, but now these companies are way too bloated.

I did not expect them to cut 40% at once. I think it's basically impossible to identify the right 40% at one go. It's a huge operational risk there. but maybe better for morale than multiple cuts. Who knows, unprecedented. We now have two examples of this happening with Jack, so it's easy to say he runs a bad, bloated business, but I have been vocal about this.

Toast and Clover should not be anywhere near the scale they're at. Tidal, afterpay? Come on, pretty sure he threw a $70 million party for the team last year. I think it was $68 million for some off-site that they did. I also think it's a mistake to define this purely as a Jack issue. As I said, pull up the employees charts and the revenue charts, I'd say to pull up the earnings charts, but for many, they are negative, which we all know. These companies are way too bloated, and they're having their clocks cleaned by smaller,

more nimble startups. They have to get lean to survive. I think the realistic average number is 20 to 25% for many of these companies, but there are plenty that could cut 40% to. I think this basically has nothing to do with AI, but there are some roles they can eliminate and somewhere they can increase scope. Let's call it 5%. So, again, if that now deleted post is real, and that...

70% of the engineering team, at least in that person's team, were cut. But you don't know. That could have just been the open source, kind of like the open source focus team, right? And that's just like a, hey, we don't have time to contribute to open source if our stocks down 80%. Yeah. Own over it. I do think that most CEOs will maybe look at the block news and say, okay, I need to right size the organization. I need to do some layoffs,

but not all of them will be convinced that a 40% cut is the correct move. They might say, actually, like, we think that 20% here and then 5% there and then 10% there is just a more better for morale because it's more clear who's still on the team. Own says, I think using AI as cover

for right-sizing your bloated org is pretty unhelpful, to be honest. This false data point will be cited by every anti-AI campaigner within the next 24 hours. This is something I've said. I've seen a number of viral Instagram reels from people saying that the AI, AI-induced job loss is already happening at massive scale. And they're pulling up quotes from CEOs that conducted layoffs in 2025 as evidence simply because the CEO said that they were getting efficiency out of AI. Well, let me tell you about 11 labs, build intelligent, real-time conversational agents, reimagine human beings.

technology interaction with 11 labs. And let me also tell you about console. Console builds AI agents that automate 70% of ITHR finance support, giving employees instant resolution for access requests and password resets. TBPN simulators here. Let's do it. TbPN simulators here. You've been asking for it. There's a data center simulator. There's an insider trading simulator. There's a KAPI bar simulator where you just do nothing and you just sit in the forest. But now you have TBPN simulator and we can play it here on the show. You start out outside. of the TBPN Ultradome.

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And you can experience the joy of being an in-person guest on TBPN. And if you're coming on the show in person, this is a good way to prep. This is a good way to prep. It's a great way to prep. You should put in 10, 20, hours in here, really understand the layout.

Yes. It also, I love the money. It's very accurate. And it's also accurate to the more recent. We recently changed the desk setup for where people sit. And this reflects the new setup. So thank you to Ben on our team who put this together. It is fantastic.

Remarkably accurate. Just a few hours. Yeah. Effectively one shot. Incredible. And I've never. I love the details, the tracks on the ground, everything. This fantastic work. TVConSimulator will be available everywhere video games are made possible, aka the internet.

What happened at Little Caesars? Little Caesars Arena had a malfunction tonight where their air horn was blaring for over five minutes straight during the students. Let's pull out this video. I have not seen this video, but I... This doesn't sound like a malfunction to me. This sounds like exactly what they should be doing. Let's hear it. table and there was a complete malfunction here electric electrical wise here at the sports table you see this gentleman here working frantically to try live production's hard folks my production is tricky Ben they're saying your your simulator is fake because it has no no goalpost oh no goalposts got to add that

and no horse no horse okay back to square one It's on the way. It's on the way. Okay, that's V2. That will be a, maybe that should be DLC. You have to pay, 50 bucks for that. If you get the all-access season pass, we'll include that, but that's definitely some DELC getting the horse.

Leonardo DiCaprio has been quietly funding the Los Angeles Public Library's Los Files Branch, a facility located on the site of the actor's childhood home. That's sweet of him. the computer room, which is named the Leonardo DiCaprio Computer Center, features several signed posters of the actor from films he started, including Titanic and the Great Gatsby. The tribute-filled space has become a distinctive feature of the library, offering both technology access and a glimpse into the actor's career. And Brooks Otterlake says,

I like that this entire article, that this is the entire article, and it seems to fully negate the quietly part of the headline, quietly funding the branch. This is awesome. And I feel like if I'm a kid and I go to the library and I see Leonard Decapre, that's going to inspire me. So I'm a fan of that. This story went out last week.

Do you think the posters are still there? Probably. I'd say just double down. I'd be worried about those posters. Anyway, let me tell you about Vanta, automate compliance and security. Vanta is the leading AI trust management platform. And let me also tell you about Cisco. Critical infrastructure for the AI era, unlock seamless real-time experiences and new value with Cisco.

And without further ado, we have... have Ben Thompson in the Restream Waiting Room from Sertechery. Welcome to the show, Ben. How are you doing? I'm good. Hopefully I have the right microphone turned on this time. You do, and it sounds fantastic. Thank you so much for joining on short notice. Thank you for writing Anthropic and alignment. It is a fantastic piece that I think covers all of my questions. But I want to start with, like, just how did you process the weekend? How did you get to this particular place? And then, like, what is your key thesis with Anthropics? and alignment.

I mean, this is one of those ones, I don't know if it's good or bad, that it came out sort of at the end of the week, so I had a lot of time to think about it. Ultimately, I think it was good because I'm not sure anyone very, as explicitly made the point I did. And maybe it was bad because I feel there's a lot of like caveats,

maybe in retrospect I should have put in the article that would have addressed a lot of the points that people are upset about. Basically zooming out, This was not a normative article where I'm saying what's happening is good or bad. And that's really the one caveat. I really wish I would have put on there. I mean, I'm being out there accused about like a Neely Patel, like a full-throated fascist

endorsement of fascism or something like that. And it's like, relax, okay? Can I get some credit for the last X number of years? Basically, the, and there is a deep-rooted concern that I've had for a long time. time about, and I'm now hesitant to even use sort of EA as a term because it's kind of now politicized thanks to the events of the last week. But a failure to grapple with a world of guns is basically the long and short of it. And I actually think Aliza has been the one guy who's been honest about this where he wrote that time article about potentially bombing data center

someday. And that's actually a point worth bringing up, which is all this stuff is right now in the digital realm with robotics and potential other applications and it's obviously being used for military operations, it's crossing over into the physical realm. But if AI is as powerful as people say it's going to be, then there are going to be real world reactions to that. And if we're going to analogize it to nuclear weapons, as Dario Amade has done repeatedly, you have to think through what would happen in a world where a private company developed nuclear weapons. What would the government's response be? And that's not to say that the government response in that case is good or bad,

or does it follow sort of constitutional principles or whatever it might be. Obviously, I want them to. On the surveillance point, I've been concerned about the application of computers to our surveillance laws for years. Like so many things in our society assumed a certain level of friction in doing things that computers already obviated and AI is going to just do that on steroids. I do think we need new laws. I think all this stuff is correct.

And I think the idea that AI being applied to these commercially purchased data sets, for example, is a huge problem that I don't want to happen. the concern I have is that if this technology is as powerful as it is on pace to be unilaterally imposing restrictions, even if those restrictions are good, isn't just an issue as far as who rules us, the democracy issue, that sort of Palmer Lucky, I think, very eloquently raised. it's inviting very bad outcomes for those asserting that in general. And I feel there's been a lack of awareness of this. That's why I brought up the Taiwan-China thing.

This has been a frustration I've had with Anthropic generally. They talk about, you know, Amade has been very outspoken in terms of opposing selling chips to China. for in a narrow, you know, aspect, very, very good reasons. My pushback has always been what happens if we get super powerful AI and China doesn't. What are they going to do? Sure. The optimal thing would be to just bomb TSM out of existence because suddenly that becomes optimal, even with all the costs that that does.

And then what? Then are we going to do? Like, we're entering this. Like, I don't like getting into political, Posts. It's not fun at all. I'm not having fun with this. It's not enjoyable. I could promise you this. And some people are like, well, you should have just made the post private. I'm like, no, I actually, I really want Anthropic and people associated with this to read this because people have theorized for a while about what's going to happen as AI becomes more powerful. And now it's starting to happen for real. And I guess over the weekend, Parvo was just, I felt compelled to say this

and girding myself to do so. And even then, I still wasn't, I haven't waited in this for a while, and it's no fun, but it is what it is. Can you unpack a little bit more of that, that tweet that you posted where you did the find on the Dario article for Taiwan and saw that wasn't mentioned?

Oh, I mean, I've just kind of, I've sort of griped about this in general. I think that. So do you just think, he should be talking about the Taiwan issue more deliberately. He should be messaging that. Like, why is it important that, why is it significant that he doesn't mention Taiwan?

Well, I think the position about not selling chips to China is a totally legitimate one. I understand the argument. I could make that argument if I needed to. Yeah. I have advocated the opposite, that number one, not only, should we be selling chips to China and a generation or two behind,

which has always been sort of our standard practice with chips, we should also be allowing Chinese companies to fab with TSM. That is a restriction that has come down. Now, these Huawei chips are somehow manufactured by TSM. Let's not look too closely at it, but we should explicitly be allowing it. And the reason for that is I think it is a safer equilibrium to have China dependent on Taiwan than to try to cut them off,

from Taiwan, well, we are dependent on Taiwan. Taiwan is 70 miles off the coast of China. It's not an ideal position in the world for us to have a dependency on it and China to not have a dependency on it. So this is a problem. All this stuff has everything going forward has massive tradeoffs. The implication of letting China fad with TSMC or the implication of letting them buy Nvidia chips is that they gain these incredibly powerful AI capabilities that is driving this entire

debate. That is in a vacuum not a good thing, but nothing's in a vacuum. Everything is a tradeoff. And in that specific area, I think that just it's repeatedly again and again being absolutist about the chip issue when I am frustrated to not see any public comment. about the, that's not quite fair. He has made comments about, oh, yeah, that would slow down sort of the adoption of AI, the long run of Taiwan got, got bombed. And like, that's, in my mind, that's an insufficient consideration of the possibility of Taiwan getting bombed. Now, again, I'm biased in that regard.

I lived there for nearly two decades. But it's just the, the reason I brought it up in this context is, if AI is what it is, the people with guns are going to want to have a say. Whether that be domestic, whether that be internationally, that might be in the context of the U.S. government just taking it, trying to kill your company because they feel you're not cooperating, or it might be the context of China deciding it has to act because the U.S. is becoming too powerful. Because, you know, and it's not a fun debate.

It does, I do think the nuclear angle is a good one. It has echoes of the proliferation, question of mutualist or destruction, all those sorts of things. and that's just going to be the reality of the debate going forward. And again, it's not very fun, but I think it's also irresponsible to sort of run away from it. How much attention or what kind of factor do you think the information asymmetry between the Department of War and Anthropic played last week? It felt like in hindsight, Department of War knows they're headed into a major, what is now looking like a drawn-out conflict, anthropics sitting there thinking,

hey, we got this arbitrary deadline. Why do we need to renegotiate this now? And then if going off of Emil Michael's timeline, it sounds like they were still in the final hour trying to make a deal happen. And according to Emil, Dario was in a meeting and was busy and wasn't really respecting the deadline, which maybe he felt was kind of artificial.

But in hindsight, now it looks like it was a significant because the Department of War was taking the country into a conflict and wanted to know, hey, can we lean on one of our AI partners? I don't know. I mean, I think that seems pretty arbitrary to have cut. I mean, I'm hesitant to speculate. I don't know what was going on. I don't know the angles. I think, and that's why I didn't sort of delve too deeply into it. And I also think some of the specifics like this, this supply chain risk probably overbroad. And almost certainly the way it was stated in the tweet is definitely overbroad if you actually go and read the statute. I think the goal that I was, and again, this is where I wish I had sort of put more caveats to say, like, I'm not actually talking about all that stuff.

I don't really care. I do care, but that's not the point of this article. The point of this article is there's all this talk about alignment. That's why I put that in the headline. And on one hand, alignment is aligning AI with humanity generally. But for the foreseeable future, and you could have a philosophical argument about the long-term viability of nation states in the age of the Internet, much less the age of AI and whatever that might be. That certainly is a more pressing conversation than probably ever before. Anthropic exists in the context of the United States.

And that's why I put that quote, you may not be interested in politics, but politics has an interest in you. What is politics? War by other means. You might not be interested in that. It is going to have an interest in you. And my, there's a, like I said, a certain longstanding frustration of not fully grappling with that fact, having dorm room theoretical arguments about AGI. You go back to that post over Christmas about like AGI in like 100. years and no one having any jobs or being worthless or pointless or whatever, which included some implicit assumptions around property rights existing in 150 years as they exist today.

Newsflash, if that happens, property rights as they exist today are going away. All these rights, and this is a philosophical argument. That's why I started with the international law concept. All these rights, all these laws are subject to the agreement of those governed by them to follow them. And the final say is those who successfully inflict violence. And again, this isn't fun to think about. It's not pleasant. You like to assume we operate in a world of laws that everyone follows them and goes by them. But to the extent AI is as impactful and powerful as it is, the more these questions, fundamental questions that we thought have been

settled for hundreds of years, if not thousands of years, are going to be raised. And this is just the first of several episodes where I think that's going to happen. I grew up in sort of like post-Cold War, no ducking cover, didn't have a lot of fear of nuclear Armageddon, but Dari Amadeh is, you know, a fan of this book, the making of the nuclear bomb, and it seemed like he sort of predicted that if AI becomes super powerful, the U.S. might take a similar approach that they did with regulation of nuclear weapons.

And as I was thinking about that, I feel sort of good about the way nuclear weapons are regulated. Like, I feel like we got the good ending and we haven't had nuclear weapons drop in 70 years. And it seems like things are going well there as well as they can, considering that there's this amazing or tremendous, like, dangerous technology that exists. But it hasn't been deployed. It hasn't actually, you know, bombed anyone. But how do you think he's processing that book? How do you think we should be processing that idea of the government running the same playbook that they did with nuclear weapons?

It's pretty interesting. I mean, on one hand, just from sort of a physical perspective, dealing with weights and software is very different than dealing with fissionable material. Or I guess the super bombs are like, they're actually like fusion devices, right? And that is trackable. It is interceptible. You know when Iran to take a pertinent example. Is trying to build enrichment facilities. All of which makes the problem easier to solve.

Yeah. So that's difference number one. Difference number two. And I really wish I would, I had this included. I cut it so the sort of the article would be tighter. But there is a very interesting point in technological history, which was the early days of Intel. And Bob Noyce made the decision that we will sell to the government, but we're not going to design chips for the government. And the distinction there was you had guaranteed orders, which was great.

The government would take your IP, and in his mind, the more important thing is there was limited volume. And the way that he foresaw correctly that this was going to be a very upfront capital-intensive process of designing shapes, if design them, if you have to have the equipment, all of which is in the billions of dollars today, back then was in the tens of millions and hundreds of millions, is you need to find the largest possible market, which was the consumer slash business market. You designed for that, that will accelerate your improvement and your capability so much

that you will end up having better devices than the government could have ever requested or made for itself. That is at stake on steroids with AI. People, like I was talking to someone, they're like, why doesn't the government just get someone to make their own model? It's like because it's like you talk about government contracts. We're like single digit billions. We're talking about for the amount that's going into CAPX, the cost of these models.

We're talking hundreds of millions of dollars for the models and hundreds of billions of dollars approaching a trillion dollars a year in CAPX. That is only sustainable and viable if you're selling to everyone. But that introduces the entire new dynamics, where the government built nuclear, it started there, and it started with a lot of assumptions because it was a government program. We are necessarily, for economic reasons, because of all the upfront costs entailed, starting with private companies of which the government is one of many customers. And that introduces the assumption that, well, it's a private company with private property rights,

all those sorts of things, all of which I want to be true. Again, I don't like how this is going down at all. The point here is to say there's a good reason why it's not going down that way. And there needs to be cognizance that even though these is a private company that is building the model general purpose and for very good reasons wants to put restrictions. Again, I think the same variance one is a very powerful argument that I agree with. The problem is, that you just need to be aware of, yes, the government is a small customer. The government is also the entity, again, not to be, but with guns. Like they, you know, like, why do I pay taxes?

Because the law says to pay taxes. Yep. No, at the end of the day, I pay taxes because, you know, if you really want to distill down, if I don't, someone with guns will come to my house and throw me in jail, right? Like, we don't think about that, but at the end of the day, where do these assumptions and laws and rights flow from? And as long as that is still the case, that it needs to be a decision-making factor for these companies. How do you think this plays out for Anthropic?

It's such a small contract, but it's so important in the zeitgeist. There's a lot of people that are rallying around Anthropic because of this. There's a lot of people that are pulling away from Anthropic because of this. It feels like there is a business to be built that doesn't work with the government, but delivers coding models and knowledge retrieval systems and a whole bunch of really valuable products and technology and it winds up being fine. But at the same time, you don't want this, like,

hairy relationship with the government adversarial to go on for a long time. I would like them to sell to the government, and I would like Congress to pass a law addressing these digital surveillance issues. Yeah. And a lot of people are like, that's unrealistic, which I have a medieval person.

to, but at the end of the day, if you don't have it's legal or not legal as your guiding standard, the only alternative is someone has to decide. And the implication of that not being a sufficient justification is that means a private executive is deciding. And if AI is what it is, I think that's going to be, I use this word intolerable. I didn't mean intolerable to me. I meant intolerable to those with power to have a private executive making those decisions or not. And if you think about if power, if we're going to have this very sort of brute analysis, that power flows from or laws flow from power.

AI is a source of power. So it's not just that, and I think this is where the supply chain, again, which I'm not endorsing, but I think that's where the supply chain, but I think that's where the motivation is coming from. The goal isn't to, fine, we just won't use Anthropic. I do think the goal is to hurt Anthropic. And if you're not going to be subservient to us, you're not going to be allowed to build a power base, period.

And again, I'm not endorsing all this. It's just a matter of, it's not a surprise this is happening. Yeah. And this needs to be just a real risk. or a real, that has to be considered in all these decisions? Putting on my Dario hat, I'm thinking about a different way to achieve the goals with maybe less sacramony. And I threw out this idea that maybe the better solution is like work with the government,

but then lobby for a surveillance act and actually try and run a pack. Yeah, I mean, I wish the White House would come out and say, yeah, there's a digital surveillance problem. let's work on a bit. Like, I don't, I don't, I, probably another regret I have is sort of putting this all-on Anthropic. That was sort of the angle I was concerned about. And that left me, I think, fairly open to the critique that this is just like defending the White House's approach.

And that was, again, that was, I was trying to be a higher level that's saying, look, this is what's going to happen. But yeah, the, the, I think there should be a way to find a middle ground here. I'm just thinking of, like, from the perspective of, like, the, if the White House is like this immutable thing. I mean, but you are involved in anthropic, like one advice would be, hey, okay, instead of going and having this confrontation with the government directly, go and start a political action committee that lobbies for change in the way that you want through the

democratic process. Yes, that is the ideal process. I understand why people are frustrated and skeptical about this. Okay. I used to have this debate a lot in the context of antitrust and arrogators. And one of my sort of the theses about the aggregators and antitrust is that the antitrust laws are fundamentally unsuited to dealing with aggregators. Because antitrust law has historically been about control of supply and the power of aggregators flows from control of demand. And so you end up with all these solutions that I call pushing on a string.

You're just trying to get people to change how they behave. And that doesn't work very well. Like Google has always been right. Competition has always been just to click away. The problem is people aren't clicking. So the solutions focused on the supply angle doesn't work in a world where the supply is there, just no one's choosing it.

And therefore my prescription is you actually need to pass new laws, not try to retrofit these old laws to this new use case where they don't work. And the reaction is always, that's impossible. We can't pass new laws. And okay, but really, the implications of what you're saying. I mean, I saw a tweet, again, I didn't like it, so I lost it forever, one of the most inferring things

in the world. But someone was like, I would definitely rather have Dario Amadee make these decisions than, and to this tweeter's credit, he wasn't limited to Trump, because me, this isn't a Trump issue, this is a any politician issue. He said, I would rather have Amade making these decisions than whoever comes out of our screwed up democratic process.

Yeah. And points for the honest because that's the actual choice that is being put forward. And you could say Congress isn't going to do anything, therefore Amadei should, just appreciate that is giving up on the democratic process in saying we should have unelected, unaccountable individuals making weighty decisions. And again, I understand the sentiment. It's hard to imagine Congress passing laws about anything.

but just realize that's like that implication is quite fraught. Yeah, it's a huge change from, I mean, I just spawn in and believe in democracy and then understand it and study economics and just have reinforced my belief in the American project throughout my entire career. And now it really is people discussing an entirely different world of governance, which has been not something people have talked about publicly for a very long time, but it is here for sure. Right.

And they always come in on these Trojan horses that are eminally defensible. Again, I'm with Anthropic on the digital surveillance point. I've been concerned about it for years, been writing about it for ages. And it's similar, there is an analogy to the monopoly.

Like you have all these laws that assume someone has to actually physically go somewhere and tap into a phone line. But if you can do it with computers at scale, like suddenly you had all these assuble. that limited what the government could do that magically disappear, not because the law change, but because we got computers that could do the job of an individual at scale infinitely. And AI, again, is going to let the idea that the NSA, by the way, this is my sort of like,

I had to admit this in the article. I was so confused why the Pentagon was so obsessed with domestic surveillance. I didn't realize the NSA was part of the Pentagon. John and I had the same moment. Yeah, yeah. Yeah, you just sort of thought about it as like an individual. independent agent, like the CIA, but that made a lot of this story make more sense. Right.

No, exactly. Yeah, I feel like a lot of tech people are like reading the Fourth Amendment today and understanding like some of these like pretty basic processes. Well, yeah, but like it's pretty, the wipples are massive. Like, I'm not denying it. Like, and it's similar to the chip thing with China. Like my prescription for Anthropic to give in is to allow these massive. loopholes to be exploited and for the NSA to allegedly in the service of investigating foreign

adversaries, but by the process basically surveilling the domestic population, I think is bad. And the reality is the nature of tradeoffs is you're choosing between multiple bad options. And at some point, it's like, which team are you signing? up for. They both suck. Two of one. What do you think of the messaging around like the models themselves not being capable enough to be used in the context that the Department of War asked for? Because I felt like Dario was sort of speaking for all frontier labs. He said that these technologies broadly are not suitable for these missions just yet. I'm not sure that he has all of the information on the other side to know about the advocacy. He certainly understands his models and what's

capable in the frontier. I mean, I would assume they're definitely not capable. I think that, I think that point is more of a precedent setting one. I think Anthropics position is significantly weaker on that point. Like at the end of the day, we either trust the military or not to make these sorts of decisions. That's why we have a military. And so I have a harder time. And I think the digital say this point is so compelling for them

because I think it's my personal biases. Totally. I think it's a huge problem. Yeah. The various anecdotes,

again, I hate the reporting from these because you can tell like the weeks coming from which side for each of these. Yep.

But, you know, this idea that putting forward these hypothetical examples of like, oh, you can call us and we'll figure it out then. It's like,

no, come on. Yeah. I'm serious about this. Like, like, so, yeah, I think that's a week

argument for them. So that's why I almost focused more of the digital surveillance one, just because I think it is a very compelling argument in favor of the anthropic position. Jordan, anything else? Oh, there's a lot more. What are you going to be tracking going forward? Obviously, the story is evolving. Yeah. Good long day. Stay strong. No, I mean, the open eye angle is obviously interesting. I didn't really get into open AI. it's hard to parse exactly what's going on. It seems to me they have agreed to the Pentagon that they will be, the Pentagon will be limited by lawful capabilities.

And they make their own judgments about weapon usage. And as I understand it, Open AI is like, we will on our side be free to stop the model from doing digital surveillance. which sounds like you're in sort of a jailbreak competition. It's like we're going to agree to have a jailbreak competition with the U.S. government, which, again, it's an example of how fraught this is that that's probably the good place to come down on. Now, there's obviously these dynamics of competing for the same talent base being in San Francisco. You know, this is part of, I think, Anthropics, Anthropic has a local advantage.

in that most people, I think, in the industry are with them, and they have a national PR problem in that I think a lot of folks outside of tech don't understand why tech companies always try to or resist helping the U.S. government. And so it's kind of an interesting dynamic where I think OpenAI is in step with the broader public and very much out of step with sort of their talent base in San Francisco. And so that's going to be very interesting to see how that plays out. Yeah. It's remarkable that Google has stayed out of the fray,

given all the Project Maven background and stuff. Like, they must be so happy that they're just like. Well, that's the other interesting thing is this actually goes back to Google, I believe, where Google had the project, I think this is right. Yeah, but I think Google had Project Maven, which their employees objected to. Yep. and therefore that went to AWS.

And then some combination of, I think the Pentagon is using Anthropic because that's what ATABS uses. And ABA is a higher Fed ramp designation. That's right. And so that's why Anthropic was already allowed for classified content and Open AI wasn't. Again, I don't know the extent.

It was, I've studied Maven pretty closely. It's a wild story. I mean, it was similar like AI for the military, the same like killer robot fears. The actual, I mean, Google was a subcontractor on that project. And what they were actually exposing to the government was TensorFlow APIs that would run on Google hardware. And so they weren't actually writing any AI software, but they wanted to effectively like classify images from drones in the Middle East, see, that's a car, that's a house. And previously they had Air Force airmen just sitting there like clicking.

and they were like, okay, we're going to automate that. But it was still like scary, don't be evil, working with the government, military, and then there was a backlash. They pulled out, then eventually they went back in and had a new head of Google Cloud. Yeah, I mean, this is, you know, it's hard to, and I speak for myself personally.

I obviously have the biased angle because of Taiwan. I have the bias angle where I think there, you know, just in general, there is this very naive view of the world that doesn't understand why military, are important and necessary. And I think Silicon Valley got itself in a lot of trouble by giving into this naive mindset that we have no duty to support the military. And there's this tension's been, so it's a tension that's been brewing for years.

Yeah. Which is, are you an American company subject to American law and even beyond law, just morally compelled to support the U.S. military or not? and there's an equally American sort of idea of moral consciousness. I'm able to say no. That's why we have the First Amendment, right? This goes into the, can the government compel a company to do something? It goes back to some of the questions that happen, you know, with the first Trump administration.

And, you know, I've been on both sides of this, like, which I... And this is what Daria said in CBS interview. He said, we are a private company. We can choose to sell or not sell whatever we want. There are other providers. He's already sort of like making this case. Which, again, it is a case that I support. But the point here is there's always the question with like a bubble or whatever,

is it different this time? And I guess that's sort of the question I'm raising. Is AI actually applicable to every other technology that's come along? Or if it is the potential to be a source of power going forward, it's going to be dealt with as such. Yeah, that makes sense. Last question, we'll let you go. How happy should Ted Sarandos be right now?

I mean, I think he had the killer quote the last couple of days where I think so was asking you if this is such a jewel and it's so rare, isn't a problem that you're missing out on it? And he's like, well, have you seen the history of Time Warner? I think sounds about right. I'm not sure how an entity with all the debt that Parabot and Warner Brothers is going on. I think there's a bit where Netflix is always in the very long run been positioned,

I think to be the final buyer, like who else are content companies going to sell to. I feel like they sort of, I feel like they've been spooked by YouTube a little bit, and they felt a need to push forward that bring the future forward. That was not allowed to happen, but that means their original plan, I think, still in place. So probably pretty happy, all things considered. I'm going to say, it's great. Well, I'm excited to get back to Netflix coverage and more anodyne topics. Yeah, remember it was on Cheeky Pite.

You were talking about getting sucked into the idol. And here we are. So I put that quote at the beginning of my article. You know, you may not be interested in politics. It was about Anthropic and it was also about me. Yes, yes, yes. What could you do? Welcome, welcome to 2026.

Well, we thank you for taking the time to come chat with us. Great to see you. And a fantastic article. We appreciate you, Ben. We'll talk to you soon. Thank you. Have a great day. Let me tell you about Phantom Cash.

Fund your wallet without exchanges or middlemen and spend with the Phantom card. And let me also tell you about CrowdStrike, your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. And our next guest is here live in the TBPN Ultradown. We have James Bischara from Magic Mind. coming on down for a very refreshing, very different pace of interview, hopefully. Great to meet you, John. Great to meet you.

We actually met. We actually met. We actually met briefly in 2013. No way. Because we were using crowd tilt at Soylent. Oh, well, then yes, of course. Oh, actually, that was a hell of a meeting. We gave you all a huge, like, $800,000 check.

They gave us a huge check. A physical check. Big. Yeah, we printed it. Literally like an hour before, I was like, do whatever we need to do to get one of those kind of, you know, just TV checks because you all had one of the biggest crowdfunding campaigns of all time at that point. Yeah, yeah.

That's right. I was just chatting with Ajah from our team about Rob. He was the one that was the leader on the project. Yesterday, yeah. And yeah, that was such a wild thing because we had applied to get on Kickstarter. And at the time, they said like no food products, nothing but like board. games, I guess, or whatever they were doing at the time. And you guys were like, we'll help you out. Another YC company. You guys built it in like a weekend. And it worked flawlessly. Also, I found out

like you guys were basically like running digital ads for us. Yeah. Acting as our Facebook like promotion engine and everything was cycle back. It was so helpful. Yeah. We just didn't have any marketing skills or any real like just, you know, we were so busy with other things that if we hadn't if you guys hadn't done that we probably would have ended that campaign like way we took i still to take customer obsession to the extremes yeah and yeah we saw it it was like hey well this helps both sides we should we should lean into it yeah the uh but yeah for for listeners for viewers so silent was i mean that was so game change the whole internet yeah was talking about y'all for weeks super viral and uh and it was um for ycombinator and by the way both

you all. And I'm, I don't know if someone's just tuning in, you know, three months ago and then they are like, hey, these are, it's just the best hair on the internet. And that's why I tune in. These guys are journeymen in tech. And don't, it's so cool to listen to y'all because it's not a journalist that doesn't know how to actually build or what goes into creating a company, a startup or sees a trend from a journalistic point of view. But you guys see it from the arena. The founder perspective, which is why I'm bringing y'all a S ton of Magic Mind for y'all. As soon as I saw, as soon as I saw, yeah, we should do some shots. As soon as I saw, I think it was on a Sam Altman interview that Jordy was doing and he was chugging a magic mind.

Oh, yeah? I'm gone for a max. Oh, yeah. Let's Magic Mind max it today. I love it. So, yeah, yeah, explain what? what this is. What are we consuming? Yeah, the, I'll get the 10-second commercial out of the way, but you just shake it and amphetamines? Yeah, exactly. Peptides and fentanymes and steroids, all in one,

but you shake it, slam it back. Jordy's the king of the slams. Delicious. Mental performance spot. Oh, it has some caffeine in there. And it does it. So Max is unique. Max is unique in that it is the world's first time release energy, energy shot. So the, you couldn't do time release in liquid form until about two years ago. and we were the first to put it in a shot. What did you learn from building software that you applied to CPG? Oh my God.

I think right away, my experience as a customer has been this iterative approach, basically versioning out. Like the product, when you released it versus two years later was like night and day. In my experience, like just a much better product, which is something that unfortunately, I think a lot of CPG brands,

they kind of like make their product, they ship it, they get it into as many stores as they can. They sell as much. And maybe they don't even iterate that much on the product, which puts you at, which is just like extremely high risk from my view, but that's sort of the step. It is. It's a really high stakes experiment when you start shipping it to stores and you get into a thousand doors and then you realize, hey, this is kind of a B-plus product. We could make it better. And yeah, we've chatted about this over the basically since the beginning of magic mind of taking everything that I could from Silicon Valley

and my background was in building software into building a dream company, which meant the first three and a half, four years was just improving probably 150 iterations of making the product better, better, better before we went into stores. Because when you are D to C, and it is, every time I say this out loud, I can't believe it's the case, but as the first D to C energy shot, Like it was, I couldn't believe no one had done it before, but one of the huge affordances is you can have version 1, version 1.1, version 1.1. And each time that we made the product better, we saw the retention curve go up, up, up. And then we're like, all right, this thing's ready for retail. And now, as of last month, it's the number one health shot in the country. In the natural channel. That's wild. Yeah, I remember when I first tried it, I was like, okay, I like what this gives to me, but it hurt my stomach. And then you were like, try it again. I tried it again. fixed it. And so I think that, uh, oh, God bless the early testers there. It was, it was rough early on. And, and it was like, hey, I'll, I'll eat nails if it'll help my productivity focus and flow.

But, uh, but it turns out most people wouldn't. And yeah, it was actually Bizz Stone, huge shout to Biss Stone, uh, Twitter. He's the one that put us in touch with. Yeah. Yeah. Oh, really? No way. What college y'all go to? Northeastern. Oh, no way. Yeah. So brilliant, uh, mind investor. He's the one to put us in touch with these oncology manufacturers, this oncology manufacturing company, this is the most over-researched beverage and the planet. So we worked with them and utilized this technology to make everything so small that you can make it taste better than any of these ingredients have ever tasted before. So my favorite ingredients is called Bacopa, Bacopo Menary, decreases impulsivity by up to 50%,

which is amazing for focus flow. That's right, yeah, exactly. If you want to be risk on. That's right. Yeah, exactly. If you want to... You're pushing yourself on the track. I mean, performance takes many different times. Your advertisers don't want it for all of the logos that are happening right all over here. I was skiing. I saw a guy do a backflip on skis with no helmet. That's impulsivity in a beautiful way.

He was not on magic mind. He needs a magic mind to put on the helmet because that is actually extremely dangerous. Do not recommend doing a backflick up on skis with no helmet. That's a non-magic mind. But yes, yes, for many people. Many people, when you don't want to jump into social media or the 50 texts on your phone, you actually focus. Yeah, exactly.

Yeah, you want to be less important. But it tastes terrible until we found this technology. So you took the iterative approach, the R&D, actually brought this kind of like hardcore R&D to a category that many people would have just, again, shipped a project and been like, it's good for me, let's run it. Yeah. What did you not take?

What did you not take? Oh, that's great. Great question. So much of the way that you run the company is incredibly unique and kind of at odds with maybe how you built your last company. There are a handful of things, and this is one of my favorite things to talk about is just how we build the company and magic mind. And there's that line in literature of once you know the rules and you can break the rules. And so I think my 20s of three different startups and a lot of it just failure to failure to failure.

But learning how other companies did it or the playbook would be done and then recognizing getting to a place and honestly just being able to fund it with my own capital. I was like, I'm going to do this my own way. Yeah. So one of the things is we don't have any junior employees. Oh, interesting. About 10 senior employees. Everybody's senior. We have plenty of great contractors, plenty of great agencies that we work with.

But because of that, one of the things that we do is no meetings. It is all asynchronous. Once a month, we have a team meeting. And people can if you need it. You need to go to a meeting, go for it. But the default is asynchronous. We love Loom. Emails, text instead of Slack.

We don't, I hate Slack. a voice notes but this senior aspect of the team members no junior team members means that the investment is very expensive per employee but man do we it's like a hot knife through butter whenever there's a challenge you have senior people through and through on every aspect of the business and I think with my earlier startups and with with most startups a lot of times you're hiring people that are doing something for the first time and say hey we need you to I know you've been a great engineer. We need you to PM as well for this thing, because there's three or four of us with Magic Mind.

It was like, no, I want someone that's done this two, three times before and is a veteran that knows how to do this. It's super key in retail role. Yeah, exactly. Because, like, it's just, it's so hard to go on the phone with a buyer and actually build the trust. If you haven't already sold them the last, oh, you were at the last company, you were the one that brought in, inviting in water to Costco. So the Costco buyer loves you because you brought him. a banger product, you're going to try the next thing.

Much harder to just take a cold call and breakthrough. And I'm sure you know this with Soiland. In fact, what are some of the things that you remember from the retail, the first stages of the retail role that you would never. Tell us, yeah, tell me more. It's been a lot better with Lucy, but yeah, very, very driven by trade shows, relationships, just being in some massive conference room, getting to know people over years and years and years building trust.

And then the only thing that can really accelerate is that example of, like, bringing in someone who has a relationship on the other side where they delivered the goods and then they're putting their reputation at stake saying the last time I was with a smaller company, you took a risk on me, you were successful, we both made money because this product, you bought a bunch of it, you took your limited shelf space and you gave it to my previous company and it moved and you made money and you looked good, you got that promotion, now your VP, take that risk again with this next thing. been the best. Take the risk and then also do it in the right sequential way to where you don't,

I think one of the biggest cardinal sins in retail, and I didn't realize this coming from software, you actually don't want to move fast and break things. If you get into, let's say you get what seems like a dream partner in Walmart, if you don't move, if the product doesn't move, and I didn't realize this until getting into retail and my co-founder Williams is a genius on this stuff of just avoiding what makes you good. I said we say this internally a lot. What makes you good is what you do. What makes you great is what you don't do. One of the things that the trap that is a doom loop in retail is you expand too fast. Let's say you get Walmart. You're like, hell yeah, we got Walmart. This is the 800 pound gorilla and then it doesn't move. And then you have to start putting in

it. It's not like Facebook you launching out on Facebook. It doesn't work. You just wind it down. Exactly. No. Now it's like Walmart's like, hey, by the way, if you want to stay in here and you got one bite of the apple, over the next 90 days, you've got to spend 400k in spend and promotional spend. You're like 400. I didn't expect, we had 270 grand in the bank. You all aren't going to pay us for six months because of the payment terms you negotiate. And they're like, well, then we're going to have to take you off the shelves. So then you go and raise some last, last ditch effort round.

That goes towards, you don't get quite to the 400. You only get like 300. And then it starts this slow doom loop. And then you can't take it off the shelves because the worst graph in the world isn't flat. It's one that goes up and then down. Your revenue is. flatlining or going down and you can't raise any investment. And I would say, conservatively, I'd say three out of four CBG brands get into that trap because they expand too fast.

Everyone starts DTC. The retail transition is the make or break moment for like every new brand, basically, in my opinion. And the hardest part is always for me rethinking the cacta LTV math. Like, it's pretty easy on e-commerce to think about payback period. Maybe you're not doing Roas. Maybe you're doing LTV to KAC, but you're still looking at like a one-year payback. And when you get into retail, you're looking at much bigger tickets. It's not $100 bucks on an ad. It's $100,000 or a million dollars of commitment with some chain.

And then you might not see ROI on that because your margins are lower. You might not see ROI on that. And you're distracted from the customers so you don't really know what are they responding to? what messaging are they responding to. There's a, this goes back to the two obsessions that, that I have are on the product. Yep. Everything in the product, every ingredient, third party tested,

everything's clinically back, the exact dosages on the product, and then in that customer experience, and then the other obsession is on the communication. And one of the things that you can do in D to C that you can't do in retail is you can iterate like crazy on the exact, every word on here. Yeah. Has been tested with millions of eyeballs.

you go into retail without that layer, or you go in too early, and it's a suboptimal message. There's some people that just have it, though, and they can just, like, one shot everything and then just go straight to retail, but it is very rare. And usually they have a retail background.

Yes, they have a retail background, and one of the things that... Survivorship bias. Yeah, they got really lucky, perhaps. They started some company where, like, their whole schick was, like, the packaging is going to be gold, and it's just going to, like, jump off the shelf at you,

and, like, it did, and they sold the company for, like, couple hundred million bucks. Oh, David is. David's kind of doing that now. But I was thinking a total veteran. David's a perfect example where it's like every move is from. What do you think about pricing? I was it, was it Coya that was like $12 a bottle or something? And they sold for great outcome. And it just flew off the shelves. And it was almost like a VEbbling good, like a Lamborghini or a Rolex or something where the higher the price, people saw the higher price and they immediately thought like this is a better product. So I'll buy it. And that actually drove sales as

opposed to duking it out for, oh, well, we're the same price as the Red Bull, so people will comp us to that versus like, no, the price tag is marketing. What do you think about that? That is, it's, there's so, there's so much discussion around that on an investor in a handful of CBG companies that you can get caught into a lot of just like triangulation. And you end up with, it's like, you know, Homeland style like triangulation with the red. string and we'll do this in these stores and this in these stores. I will say Air One sometimes gets into like $8 shots of Magic Mine we're not fans of. But it is the number one shot there, so it is working. So maybe it's a, it could be, maybe they've got a secret to it. But there is

a really simple framework that we use, which is I wanted it to be the best hell shot in the world. So in terms of everything from the vitamins for D and C and all of the B complex for immunity because nothing will sap your productivity like getting sick, all the way to the Bacopa Citicolene. One of the things that caffeine does is it's a vaso-constrictor. So it will restrict the blood flow to the brain, which is terrible for lateral thinking and terrible for switching context. It's not great for a conversation when you're like, oh, I really want to absorb that new information. But it is great for alertness. But if you add in something like Citicolene, specifically this supplier we have cognizant, which took, it was like

a two-year weight. Cognizant. It's amazing. So it's in magic mind. And Cognizant improves blood flow to the brain. So that improves the academic term for creativity, is lateral thinking. Improves lateral thinking. All of these things are, you stack them up and they're pretty expensive. So I was like, I just don't care what the prices. I wanted to be the best in the world. And it's exactly what I had been taken for seven years before even thinking of making it into a product. Then we work backwards and we're like, all right, it's got to be this price. In the beginning, $5.99. Now it's down to about $3.99 because of scale. Our batches are about two million, like we're producing about two million bottles a month. So now with scale, you can get the price way down. But it was, man, John, it was a frigging,

it was pushing a boulder uphill to get people to be comfortable with that price point in the beginning. But I was like, nope, that's what the price is going to be. What's your relationship like with the internet? Personally, dude, we do get out daily. No, no, I just like, I'm, no, specifically, like, walk, like, walk me through the last three days of your internet usage. Oh, great question. Because, like, I want to, I'm trying to gauge how online you are. Because I feel like the, the internet is just a stress machine. Dude.

It feels like it works. This is my device. Oh, interesting. You don't care of the phone? Yeah, so this is a Monday. I have it right now because of the GPS to get here. And just being, you know, we, Jordy and I live a few blocks from each other. And so I have the phone, but like literally I didn't charge it last night.

It's 10% going to die. Rarely use this thing. It is, yeah. Okay. And I rarely use this thing. Yeah. My relationship with the internet is use it when necessary. And then don't use it any other time of the day or week.

On the weekend, specifically, we have three little girls. And I go watch only and pay the, extra whatever like 14 bucks for it to have cell service so that it's basically a dumb phone and interesting and I've got text and and I've got phone calls on it but outside of that it is a dumb phone you can't scroll I can't scroll and it's a I've been create apps like with Replit to where I like create an app that brings up quotes of the Bhaghika and stuff like that's the only thing when I sit down on the toilet I might read a little bit of the baghagva gita on my watch and then I'm like Ready to rock.

But I'm not where I was 10 years ago where it's like every tiny little moment, let me jump into the amusement park that is my phone and they get lost for 45 minutes. And it's a, God. Screen time's amazing. Yeah, I know. Scroll more. I will say I listen to, without meetings, I can deliberately. And I love, I will work from my iPad.

I try to do 99% of my work from my iPad. Shout out to Replit there because I got a great iPad app. And there I will listen to y'all like this morning while I'm working out Listen to you all either on my you know the podcast app or on or on YouTube but man like it's like the iPad is I'm on going into the offensive I'm going to actually create something The watch is like I'm going to be on the defensive side if my wife needs me Otherwise I'm with the kids but this is this somewhere in between where I'm like I can't really create with this phone but man, do I get sucked into rabbit holes?

Yeah, and you get into a situation where, you know, I've got 30 tabs open on the device, which is just like pure chaos, right? And these devices are just due to their nature don't work very well to kind of multitask. The two things that I talk about so often with founders, as an investor in about 100 startups, and I talk to them all the time.

Again, it's what makes you good is what you do, what makes you great is what you don't do. So deliberately for us, really mitigating meetings. Or I end up telling me about the devices that I love, and the number one is the Apple Watch as a dumb phone. When you're at the gym, don't bring, you can. Obviously, most people do bring the phones, but you might get sucked into an email.

Certainly with kids, my goal with them is by the time they're 10, spend 20,000 hours with them. And that was scrolling when I was, I think I was listening to, a podcast on my watch, actually. So no scrolling. And this guest said that that was their goal. This was like a year and a half ago. I don't remember the guest. Don't even remember anything about the other points that they're making in the conversation. But that stuck with me, 20,000 hours before they're 10, because, and his logic was so sound. He said he could make $50 trillion and never get that decade back with the little ones. And so I was like, man, I want to hit 20,000 hours

with my kids. And that was basically the moment where I was like, the weekends, No phone. And I'm just going to be with them in those hours. I'm going to be completely with them and not sucked in because I just know myself too well. I do something. No phone, just Applevision Pro mostly. And it's not even them. And I used, I vibe coded auto scroll, so I don't scroll. It's a scroll. It just scrolls to all the TikTok and the Instagram reels and the X of monitoring the situation. Dude. And your kids are virtually there with you. Exactly. I agree. How is your approach to Angel investing evolved? Because I feel like

angel investing can start out as like a fun hobby, a way to blow cash. But then you get caught up in this fomo and you're on other people's timelines. Like you're kind of fighting for allocation at different points. What's your approach? It used to be more is better. And it was, and it's true. So much of the game of investing is you go wide because the asymmetric returns. One investor.

You don't know who the next gusto is. Exactly. Exactly. And that was... An angel and gusto? Yeah, that was my first angel check. They were in our Bachelor Y Combinator. I know, it was nuts.

That's amazing. I don't tell you about Gusto. Everybody... The Unified Platform for Payroll Benefits in HR Built to Evolve with modern, small, and medium-sized businesses. Go sign up. Wow, that has never happened before where I've been able to mention an angel investment and then... Get a live ad read.

Live ad read. What's your website? Mine? Yeah. J.J.Beshara.com. Yeah, but the company, MagicMine. Oh, MagicMind.com? Is that on Shopify?

It is? That's amazing. Shopify is the commerce platform that grows with your business and lets you sell in seconds, online, in store, on mobile, on social, on marketplaces, and now with AI agents. Anyways, continue. Shopify is great. And as we get into the angel investing conversation, I bet a lot of ads will pop up because it has been, I've been fortunate enough to invest in a handful of great companies.

But I went wide. Honestly, Gusto did so well. And then a few others did really well. Mercury did really well. him. And, um, and then, I'll tell you my biggest miss. What's that? Open AI. And I'll tell you the story. It is, it is. Can I curse on here? Can I curse on here? Total. Total. total. Fing, uh, miss. And, um, and it was so brutal because so I mean oh it's all good there'll be another open AI yeah yeah yeah yeah you'll have another it's way different than missing that just like a unicorn that comes up like you can find

what oh I see you're you're good another it's I did the math the other day it's basically missing 20 Googles Google and public had a 20 billion dollar market cap so it's missing 20 Googles now with their latest funding it is straight up missing it is missing 30 Googles yeah 35 40 Googles. So, which is cool. That's all right. It's fine. I never calculated the amount. That's why you need the magic mind. To clear your mind, low strows. I don't need to scroll. And it's, there's so many things that I will in life where I'm like, like, the no meetings where I'm like, I know I'm leaving money on the table. We couldn't, I couldn't imagine. Any other life. Any other life. I feel very fortunate. But I'll tell you the story. So I've only shared this once. But it definitely replays.

in my head pretty often. So Sam and I, Sam Altman and I, we were advising and building out YC's YC research for universal basic income. This was in 2017. So every month, we would meet in a conference room in this dingy little office. And the dingy little office, the conference room, was where they were doing open-air research. So every month, and I was a full-time, we had sold my last company Airbnb, and I was a full-time angel investor. Full-time angel investor. Waking up every day. Thinking about, yeah, what are the next game-changing company?

And I'm like, yeah, Sam and the team that's trying to do this AI stuff and its research. That can be a problem when you're too close to an operation, whereas if you just get a pitch once, you're like, oh, this makes so much sense. But when you're getting all the information at all times, and they're like, yeah, we don't really know what this thing's going to be. And we ran into this issue.

Has that happened? You all with friends companies where you're at dinner. It sounds terrible. I ended up creating a rule of like a friend starts a company, like a real friend starts a company, just invest. Even no matter of you know like,

oh, they've got this issue with how they operate or they've got this blind spot or you know all the problems that they're facing. You just, if you're too close to it, you can just overthink it. Dude, I told Ahmad at Mercury when he was like, because we had built financial technology and he's graduate

we're at the Airbnb cafeteria. and he told me the idea for Mercury and wanting to start a bank for startups and I was like, don't do it, dude. And I spent 45 minutes trying to convince him not to do it. And then like two days later, he's like, I appreciate that because we kept texting about it.

I appreciate the input, but I'm going to do it. And I was like, well, okay, I'll invest. There you go. This is not a good idea. And good Lord is I a total idiot. But yeah, the open hour and I was sitting every month saying no again and again and again. And even with the whispers of,

yeah, I think we're going to be. enough to spend it out, make it a for-profit, and would you want to invest? I was like, AI. And it's, I'll be honest, smart investors got in my head that were like AI so far off, that it's like, that's like a 20, 35 thing. We're so far off. And I was a total idiot. Well, 40 Googles later, I still think about it. But plenty of other opportunities, plenty of other investments, plenty of other products. You'll, uh, it was good to be humble a little bit. You're on too much of a hot streak. It's good to be like, okay, I got a lot.

I got to lock in. That is the benefit of building, I think, for anybody listening. I think it's what makes you guys so good at what you do. It's what I think makes any creator really good at what they do is there are very few things. It's like going to the gym. You don't go to the gym for, you think you're going there for the gains. But, man, what you really get is the ego dissolution. It is so, it's so humbling.

Yeah. And any time you put yourself out there, you think you're doing it for the gains. but you fast forward 10 years later and you're... The journey. Yeah, it's the journey. It's the ego, the humility that comes with it, that only comes with doing it. Because, man, if you're just number 2 or number 2,000 at a big company,

you're just living in your head like, I would have done it this way. I would have done it that way. But, man, it is, by putting yourself out there, it's quite, it grows your awareness in a pretty, I'd say invaluable way. Well, it's a great journey. said. Thank you again. Thank you for the

oversized check and thank you for the oversized delivery of Magic Mind. Thank you all for doing what you do in such a unique way. We appreciate you. Thank you for powering the show. We appreciate you. We'll talk to you soon. Let me tell you about Gemini 3.1 Pro. Gemini 3.1 Pro is here

with a more capable baseline. It's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, or bringing creative projects to life. And let me also tell you about Restream. One live stream, 30 plus destinations. If you want to multi-stream, go to re-stream.com. And up next, we have John Quinn live in the TBPN Ultradome for the second time. Thank you so much for making the trip down to our studio. Welcome back.

John Quinn, of course, is the most feared lawyer in America. Tyler over there wears that hat every day. He is obsessed. You have a lot of fans. I got a couple for you for you guys. And you know, I'm your neighbor. I live in Are you really? Right next? Very, very close to you. I know you went to school with one of my kids. I did.

I did. I went to polytechnical school. I don't know which one. I had five who went there. I was in the same class as Jamie. Oh, okay. Yeah. Yeah.

That was a great time. Anyway, we're not here to talk about the minor life in Pasadena. We're here to talk about tariffs. We're here to talk about law. What have you been tracking? How have you been processing the back and forth on the tariffs this year? Well, 10 days ago, the United States Supreme Court ruled that President Trump didn't have the legal authority.

to impose these tariffs, which were kind of the cornerstone of his international trade policy, domestic policy, maybe also, provided a lot of funding. He's collected $600 billion worth of tariffs. He imposed those tariffs under something called the Economic Emergency Powers Act, which gave him a lot of discretion under the administration's interpretation of it. I mean, we saw this, you know, one day it was 35 percent, then it was 50 percent, and it's all this. There were two categories of tariffs.

There were the fentanyl tariffs that affected some countries, Mexico, Canada, a couple of others. And then there were the Liberation Day tariffs, which was across the board, different deals for different countries. That statute had never been invoked before or used to impose tariffs. It was challenged in the Court of International Trade. In New York, he lost there. Ended up going to the United States Supreme Court. The argument was a couple of months ago. The argument didn't go very well for the administration.

Reading the tea leaves, I think a lot of people thought the administration was going to lose. And then, sure enough, the decision came out on February 20th. And the Supreme Court ruled that, you know, a lot of people thought the court would rule that these really weren't emergencies. The emergencies he was relying on fentanyl and the balance of trade being an economic emergency. And a lot of people thought the court was going to say, you haven't shown that that's an emergency. But that's not what the court went off on. Oh, okay. The court ruled that he simply didn't, you couldn't impose tariffs under this.

statute. It had never been done before. There's no reference to tariffs or customs or taxes or anything like that. In the emergency economic powers. In the act itself. And the court said wrong statute. Yeah. And zooming out, where do tariffs typically come from? What's the correct path? Well, there's a there's a number of different paths. There's section 122, which he's now invoked. Okay. There's a national security regime where you can impose tariffs, but it requires actually an investigation that's been done by, I think, the Department of Commerce or some other agency. So a record has to be created. The president can't just on his own say, you're going to pay 35 percent, you India, you're going to pay 50 percent. So there is a whole other regime

available. And the day he lost, he, you know, he was ready for this. He announced, there's another statute that permits him section 122 that permits him to impose up to 15 percent tariffs for 150 days. Yeah. After 150 days. And then theoretically you could just pause for a second and then start up again. Is that true? I don't think so. I think the courts would see through that. But after 150 days, Congress has to act.

Yeah. So he can do it for 150 days, and then to extend it, Congress has to act. And is that passive in the sense that if Congress doesn't act, they don't continue? Or by doing that 150 days, it forces a vote in Congress? I don't know that it forces a vote. I think Congress has to take affirmative action. They're the next one who have to. They expire.

They expire. They expire. So the jury. day he was ready for this, the day he lost in the Supreme Court, he announced, okay, I'm invoking this section 122, 10% tariffs on the world. Yep. And he could have gone up to 15. Well, he did it the next day. Okay. He says, I thought about it again, 15% on the whole world. So that's where we are right now, but the clock's right. And what about, what about the Supreme Court didn't give any guidance on how the tariff, the cash generated from the tariffs should be returned, right? So there's also kind of a gray area. They didn't address that, but, you know, honestly, guys, that's pretty straightforward. These 670 billion in tariffs, there are a lot of claims. Many, many companies have already filed claims, and there aren't a whole lot of defenses to those claims.

I mean, he has said he's going to do everything you can, essentially to delay it. Yep. You know, maybe so it's not on his watch, the next administration. But there aren't a whole lot of defenses. These are good claims. There's one issue about, in some instances, the cost of it. and the tariffs have been passed on to consumers. So the government might presumably have a defense that, hey, wait a second, you don't get all this back.

Your profits didn't go down. Yeah. There was no damage. You passed it on, so you saw the revenue anyway. Interesting. And that raises a question about whether these secondary parties, parties that paid for things that included these tariffs, which have now been ruled illegal, whether they can bring claims. That's an interesting question. So I think we're going to see some of those claims.

So for a company that's trying to get a big refund, maybe in the hundreds of, of millions of dollars, I imagine, for some of these companies. Is the first step just to file a claim, or do they need a lawyer? Is this going to be a lawsuit on a per company basis? How do you think that plays out? Yeah, I think it's a lawsuit on a per company basis. They have to file a claim. Lots of lawsuits.

A lot of already been, we're filing lawsuits. Okay. I mean, one of our partners, a guy named Dennis Harenitsky is representing a number of clients already in bringing these claims. But what folks need to do if you want to pursue, Get your documents in order. Get your records in order. Figure out what you paid when.

And yes, you probably need to engage a lawyer. I don't think you want to do this on a person, representing yourself. Yeah, exactly. Yeah, yeah, yeah. You don't want any hallucinations and screw up of what is otherwise a powerful claim. The claims are brought in a very obscure court,

known as the Court of International Trade. It's in New York. You bring the claim there, and you pursue it. The government as... How staffed up is that court? How could they possibly process what could end up being a... You know, it could be an administrative burden, but the issues are pretty simple here.

I mean, it's, you know, he invoked this act. They paid the tariffs. The Supreme Court says he didn't have authority to do that. And, you know, the government refunds tariffs all the time. It's kind of a routine thing. So it's not like this hasn't happened before. Can you take me back to the Supreme Court battle and help me understand what's involved in fighting a case in front of the Supreme Court? How much do lawyers know about the positions of the various Supreme Court justices before they walk in the courtroom?

How does all of this play out? What goes into a Supreme Court case? How high stakes is it? I think this was super high stakes. I mean, this was a major decision for this administration. and maybe the biggest trade tariff decision ever. And I don't know that there was a lot of decisions by these justices before that could help people kind of predict

what their reactions would be to this. The majority opinion was by Chief Justice Roberts. There was a dissent by Brent Kavanaugh and some others. But in preparing for it, I don't think it was unique to any other Supreme Court argument. Obviously, that's the biggest of the big league, so people repair carefully for those arguments. How quickly, oh, sorry. Go for it.

How quickly did the legal community come to a consensus around the impact and longevity of the tariffs? Because from our perspective, the market reacted violently on Liberation Day. It was the worst day in financial markets since COVID, effectively. But it feels like you've known or you've been able to predict that these tariffs might get struck. down sooner than maybe most of the financial community. So what was the process like for the legal community to get consensus around what might happen at the Supreme Court level? I think it was pretty straightforward, especially after the oral argument before the Supreme Court. That went so poorly. Oh, interesting. So it wasn't that months ago, before even oral

arguments started, people were looking at precedent and how the different justices... No, sure. Sure, they were. I mean, you know, the administration had lost below in the court. So that, you know, people knew that this is definitely in play. So, I mean, I think the issues were pretty straightforward. I mean, does this act give him the authority? Yeah. And as the Supreme Court found, there's no history for it. He had never been invoked before for this purpose.

There's no reference to tariffs or customs in the act. Yeah. So as legal questions go, you know, I don't think it's that complicated. Okay. How do you think about the speed, the time between Liberation Day and the Supreme? Supreme Court ruling that felt like almost a year. Is that deliberate by the administration? Is that just a function of how busy our Supreme Court is? Like, why does it take so long to actually get a decision from the Supreme Court? Well, some decisions take longer than that.

Look, this, everybody, you know, the Supreme Court reads the newspaper that somebody said during the FDR administration. Oh, that's funny. They read the T-leys. They know how, and there's no doubt they knew how important this was. So they know what's coming even before a case? I'm sure they see it coming. But in terms of why it took time between the oral argument and the rendering of the decision, it was, you know, people were waiting, wondering. But it wasn't an extraordinary amount of time.

But I think because of the known repercussions of this decision, the court wanted to be really, really careful and straightforward. Yeah. Are there any other big new trends in cases that you're tracking, that might make it to the Supreme Court this year. I'm thinking particularly of some of the artificial intelligence debates that we're having. We were just talking to Ben Thompson about the relationship

between Anthropic and the Department of War. And there's a lot of folks that are asking for clarity on the regulatory side, whether an act of Congress or new laws, new leadership, more messaging, but the Supreme Court could play a role there. Is there anything that you're tracking in terms of like upcoming cases that will be particularly consequential for business or technology?

Well, we all know about this issue, about using copyrighted materials to train large language models. And we have cases pending relating to literary works, visual works, musical works. There are dozens of these cases percolating their way through the courts. There have been a couple of decisions up in San Francisco now, the early decisions at the district court level, the trial court level, where the courts kind of came out. The decisions were kind of limited because of the unique circumstances of those cases. One was a meta case, and I think the other was, I'm forgetting what the other case was,

where they prevailed at the district court level. But before these cases can get to the Supreme Court, they have to go through that process. A decision at the district court. Then you have a court of appeals, and then to the U.S. Supreme Court. You know, our Supreme Court doesn't hear very many cases. How many do they hear this? I think they do, like, I think like around 80 cases a year. Oh, wow.

You compare that like to India, where the Supreme Court there hears thousands of cases a year. Yeah. Of course, they have hundreds of judges, I think, on their Supreme Court, too. Yeah, yeah, yeah. But, yeah, I think there are definitely issues in the AI world that could reach the Supreme Court. So walk me through the thought process that if you were advising me, and I believe that an AI lab has trained on my intellectual property. and that lab is well-funded, and they come to me with a settlement.

Why would I want to turn a settlement down and fight it out and take it all the way, go the distance all the way to the Supreme Court? What are the different trade-offs that plaintiffs are making right now? You need to create a downside for the AI company. They've got to see that you have the staying power that you're prepared to litigate this case. Anthropic... So you need deep pockets. So if you're just a single author of a book, then you're not independently wealthy.

They're probably going to say, hey, you'll take the settlement. But if you're a class of... Well, it depends on what the settlement is, I guess. But, you know, my experience is that defendants don't write checks until they see a downside. Got it. And so that involves... You really have to kind of establish your credibility that we're serious about this. We're willing to pursue it.

Anthropic, you know, settle the case for... a billion, maybe two billion, a copyright class action. But those were, you know, very good lawyers who had put together a case, and they had gotten anthropic in the position that they're facing whopping damages. If they lost at the trial court, it could have been much, much more. So that's the calculus. You kind of have to create a downside for it. And what would the economic damage calculation be?

Is that like I'd look at the profits that they've made from that or the revenues? Like, what sort of economic case should I be making if I'm trying to extract the maximum amount of damages? Yeah, I mean, under the copyright laws, there are specific rules about what's recoverable. Sure. In the case of copyright infringement. Sure. And that's the theory here. This is copyright infringement to use our copy, my copy, the plaintiff's copyrighted materials.

Yep. In order to train the larger language model. And there's a couple of, there's statutory damages, you know, which are a fixed amount per infringement. or there are theories under which you can recover the profits they got from it. But there are various rules about how damages are measured. Yeah, that makes a lot of sense. George, sorry. Give us 101 on what it's like to be in an active case or litigation with the federal government.

I'm sure over the many years we've talked to it. Is it, was it Palantir or Anderil that, or, or, both of them. Palantir and SpaceX both sued the U.S. government over contracts that were not fairly bid in their minds. They didn't have a correct shot at displacing an existing program with the Palantir was deced. Yeah, but let's say you have a client that is considering taking an action against suing the government. How do you kind of like walk them through it? Obviously there's a bunch of details case by case, but what's the general framework that you operate under? Look, there are good things and bad things about litigating with the government.

We sue the United States government all the time. We had a case relating to Obamacare. There was something called risk corridors where insurers under Obamacare were assuming liabilities for markets that they had no history with. They didn't have a basis to underwrite it. And there was a term that was put in the Obamacare that said, okay, we will, we, the government, will backstop you, the insurance companies. So if your, you know, if your losses are above a certain amount, you know, we'll fund that. Well, that was never funded and that was never paid. Basically, so the bill was coming due, the insurers were saying, hey, Mr. Government.

You know, interestingly, the insurers, many of them weren't eager to, you know, stick their heads above the parapet. and sue the United States government. But we got involved and we brought a class action on behalf of a number of insurers. It took some persuading to get insurers to participate. And ultimately we recovered like $7.5 billion. Now, the good thing about suing the U.S. government is if you get a judgment, it's not like you have to go out and hire investigators and find the assets. If you have a judgment, there's a window in Washington, you can take your judgment to, and they give you the money.

get a check for seven and a drive? Is it a drive-thru? Like a drive-thru? Like a McDonald's? It wasn't that simple. They appealed and they lost. But once the dust was settled, yeah, they give you the check. We have a case now.

I mean, we represent Harvard University. Sure. Versus the government on, we sued Homeland Security on the ridiculous ban on, I thought it was ridiculous, on foreign students around, you know, coming to Harvard. So we sued Homeland Security on that. We sued Health and Human Services on the defunding and the cutting off of grants for research and things like... Yeah, we talked to the government about that. Yeah.

So both those cases, we went on the trial court level, and it's up on appeal now. The government is appealing that. So litigating with the government, you've got to assume you know they're well-resourced. I mean, I don't know how many hundreds, probably thousands of lawyers there are in the Department of Justice. Yeah. So they're going to show up. You know, they're going to advance the government's position. and so they're not just going to lay down.

Can you describe the level of sort of back-and-forth career paths that happened between Quinn Emanuel and the Department of Justice or the government? Are there folks that you're recruiting from the government occasionally? Are there folks that leave and go do a tour to understand what life is like on the other side? Or is it two sort of separate communities? No, it kind of goes both ways. At our firm, we have about 25, 30 lawyers. who one time or another were prosecutors, U.S. attorneys, assistant U.S. attorneys,

or high-ranking officials in the Department of Justice. And that's seen for a youngish lawyer, a job in the U.S. Attorney's Office, as a good job, great experience. And those folks are in demand at firms like ours. And then on another level, senior people, sometimes if they're interested in government service and they're connected because a lot of this does involve political connections. You can get an appointment. We've had people in our firm who have appointments at very senior positions in the Department of Justice.

So it can't go back and forth. I will say another thing right now, this Department of Justice is really busy. They're facing all kinds of cases. And based on what I hear and what I read, they're kind of resource strapped. So I'm not suggesting they're not going to show up and defend, but, I mean, like, Does that mean your associates are getting more calls to come over? You know, we've had a couple of associates go to work at the Department of Justice in the recent past. Yeah.

But that's always been true. Yeah. Yeah. It's a good experience. Yeah, that makes sense. How is, in your view, AI impacting the legal industry today, not in the future, you know, how will the impact kind of evolve over time? but what are you seeing and hearing from, you know, colleagues or friends at other firms? Look, we are wordsmiths, right?

We work with words. We write things. And so obviously, large language models are something that is going to change how we work. They may change the whole structure of law firms. Big law firms historically are kind of described as pyramid in structure. You have senior people, and then you have a lot of junior people. A lot of what the junior people have done in the past can now be done by large language models. It's not like they're going to give you a work product that you can then file with the court and use.

I mean, there are hundreds of cases where lawyers have gotten in trouble with courts by filing things that cite cases and laws that don't exist. So that is really, that's definitely a thing. The hallucinations, that's a huge risk factor. And that's really on the lawyer. I mean, there's no excuse for a lawyer to have said, oh, I relied on AI. No, you sign that thing and that brief. You're responsible. It's your integrity on the line.

So we're nowhere near getting, I don't think, at least in our practice. Maybe we do complex litigation. There may be practices where it's a lot of repetitive litigation where, you know, you can get output that's, you know, ready for filing. But we're really not seeing that yet. But we've developed in-house at our firm a platform, a methodology for taking large masses of data that we work with, all the documents that are produced in discovery, all the testimony, all the contracts. And we organize that on it's built on the Claude Enterprise platform. And we've done this as lawyers.

It's a system that's proprietary developed by lawyers for lawyers. I think if you just turn a young associate loose with Claude or chat GPT, you're not optimizing the technology. But we take all the data and we structure it for a way that lawyers work. So it creates work streams. So like what do we need to do? We know what we do in every case. We prepare examination outlines. We prepare expert witness reports and the like.

We prepare opening statements. So we structure in the data that creates these work streams. And I really think that's the, that gives us a big advantage. That's, it's not something engineers have created. It's lawyers knowing what lawyers need having designed a way to structure the information. And, you know, we're using that with great success. I mean, in trials now, in the middle of trial, imagine. Somebody's on the witness stand.

You can ask the AI, what's the best evidence that so-and-so just lied about that? Wow. You press a button, and you get a button. So, most of those things you will have thought of. Some of them make no sense. Sure. But there'll be a couple of gems in there. Yeah, yeah.

You know, that you might not have thought of, lines of attack that you have in the thought of. That's great. That's extraordinarily powerful. Yeah. So what we are, our goal is to get to a point where the AI yields a work product that's like 80% or 90% there. Yeah.

Which is what an associate is typically doing today, right? It's not, you're not, like, the best associate is not hitting it out of park every single output. They're getting it they're getting a good good solid chunk of the way there absolutely there right and so lawyers can focus on what they do best making making sure that last mile the last 20% the last 10% is as good as it can possibly be. How do you how do you think this affects the job market for lawyers at the early stage of their career because in some ways yeah that their their work might be being replaced but at the

the same time, given that AI is very good at generating words and if we'll be able to generate entire lawsuits, you can kind of imagine a dystopian world where the number of, you know, cases that get broad are, you know, 100 times higher than they are today. I think that's true, and that's something that people don't talk about a lot. There are AI companies, AI-native companies out there that essentially, identify claims. So they'll have a database that has information on businesses of all kinds. What licenses do they have? What licenses don't they have that they should have under the law? I mean, you can just imagine if you can boil the ocean.

Yeah. And they will, these companies, you can subscribe to them and they'll serve up. Here's a class action for your consideration. We've identified the claim and here it is. So I actually think there's a potential that we may see more. we may see more litigation as a result of AI. On the other hand, I think resolution of cases may be faster. Sure. Because both sides can understand quicker, you know, the merits of the case on each side and reach a resolution sooner.

Yeah, yeah, that makes a lot of sense. Last question from my side. Can you tell me a little bit about how you perceive, like the battle of the forms and the level of detail that contracts might be entered into? I'm thinking of this news with Anthropic and the Department of War about these like two lines, domestic mass surveillance, fully autonomous weapons. And there's, and there's like in every contract there's a question of do you write it in one page or a hundred pages?

And I think most lawyers can tell you I can do either. Right. And they have different flavors and they have different subtexts. And it depends on the type of relationship that you're forming. And so I'm wondering how much you think about that when you're. communicating in a legal context and something that's going to be binding, what level of legalese you want to use, what length of document you want to use. How important is that in I think it's super important. I mean, it doesn't matter. Everybody, you close the deal, you have a

closing dinner, people shake hands, they have a drink. Yep. And as long as things are going fine, everything's fine, right? You never hear about it. And the legalese doesn't matter. Sure. As soon as, you know, a couple of years down the road, after an acquisition, joint venture or whatever, circumstances have changed. One side has a different goal. They want to go in a different direction. And can they go in that direction? Or they're not performing.

They face headwinds. Then, it's only then that people start to scrutinize the language and say, wait a second. What did we actually agree to? Yeah. Can they do this? Yeah. What are our options on both sides? If you want to get out of a deal or you want to create some leverage, you're going to

scrutinize that language. And that's why, you know, we think it's a good idea. It's going to sound totally self-promoting, but we have clients, major global private equity clients who ask us to do this, especially if it's a novel structure. It hasn't been tested before, something you haven't done before. Take a look at this and pressure-test it for me from a legal risk perspective. Sure.

you know, and I think it's especially valuable to have a litigator's eyes on the problem. Because look, we live in a world where 24-7 something's gone wrong. So day and day out, we're dealing with the very kinds of situations you're talking about. So a lot of times we look at these things with a jaundiced eye, and a lot of times we can look around corners and see how might a devious counterparty try to take advantage of this situation. So I guess the answer to your question is it doesn't matter until it does. Yeah.

And so because of our experience as litigators, we can look at things and kind of see, oh, there's a potential loophole here. Yeah. It might be a simple agreement. Like we had a case, an arbitration in Asia. I won't get into the specifics because it's confidential. Sure. But basically, one side had an option, you know.

Yeah. And there was a method for determining what the option price was. would be. And then it was kind of like a bit like a baseball arbitration and the one side would get one number and the other side would come with and there would be a neutral to figure it out. The other side quoted option price was way out of bounds. It was like totally unreasonable. And then they said, your turn. And what do you do in that situation? If you respond to that, treat it as a good faith offer and you respond, then you've sort of bought into that going down that road. And that seemed to be what the language of the contract on its face, you know, authorized,

aloud, exactly. And our advice was, no, don't respond. Don't respond. And so they went to the arbitrators and said, look, they defaulted. They didn't respond. There's only one price on the table and it's ours. But ultimately the decision the arbitrators was, no, you didn't act in good faith. So they lost.

And they were stuck in that invest. Ultimately, they got out. They were so eager to get out of the investment. They had to come to terms with it. Yeah, that makes a ton of sense. Well, thank you so much for taking the time to come chat with us. Thank you for the hat there. Enjoy the clean manual hat.

Of course. Thank you for keeping us. And we will. Keeping us fitted. Great to see you again. I'll see you around. Great to see it. Let me tell you about public.com investing for those who take it seriously.

They got stocks, options, bonds, crypto, treasuries, and more with great customer. service, and let me tell you about fin.AI, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.a.i. And without further ado, we will begin the Lambda Lightning Round. Here we go. Pivot that camera over there. It's turning all the way around. It followed John Quinn out of the studio. And now you see, and now you see that the Lambda Lightning Round has begun, and we will kick it off. We got a bangor to kick it off. An absolute bang. We have Michael from WorkO.S. There he is.

Michael from Work OS, he is the co-founder and CEO. How you doing? Gentlemen, great to see you. How's it going? Great to see you. Great to see you. It's been, what has it been, a couple months? It's been almost six months.

Last time we had you on, we were hanging out with Sachinadella on a historic day. Also another crazy day to join. But since this is the first time joining remotely, give us the update. Kind of reintroduce yourself for everyone. Yeah, so I'm Michael Grinich. I'm the founder and CEO of WorkOS. And we are as infrastructure company that helps other software companies with enterprise features in their app.

Not exactly the thing people get the most excited about, but it's the underlying infrastructure that allows people to sign in to things like Chach VT and Anthropic and perplexity with their company account, with their enterprise account. So we often say that we help developers make their app enterprise ready. And today we're really thrilled to announce our Series C, which we've raised with a 100 million dollars all right we got a mallet we got a gong to hit let's see let's see do we have the power there it is there it is there we go look at that here we go here we go 100 on 2 billion that's right that is some great dilution from your side

So we haven't raised money, actually, in over four years. I think a lot of folks kind of forgot about us, to be honest, as a company. We were started back in the beginning of 2019. So this is over seven years we've been building the company. Really, the news today, what's new with us is the last year or two has been all about AI. And we have found ourselves supporting all these AI companies as they're rapidly, just explosively growing. So whether it's like open AI, selling a TV enterprise, or, you know, Claude, like growing crazy over the last few months, or even Cursor last year, which, you know,

but kind of came out from nowhere and took over how people write software. Workhorse is powering all of these, and we're helping all of them take, you know, the functionality that they've landed in AI and actually enable them to go sell out into these big, you know, customers that otherwise they wouldn't be able to get and essentially unlock revenue. So over the last few years, you joked that people forgot about you because you weren't raising, what were you doing? I'm assuming you were at different points, probably turning down investor interests. What was your kind of mindset and leading the team through that period? Yeah, we were just building. I mean, I think at the end of the day to build infrastructure like

we've created, there's no real shortcut for it. You just have to spend day after day, week after week, month after month, solving tens of thousands of small edge cases. Sometimes I say WorkOS, it's kind of like a ball of edges. Like the whole thing is made of edge cases. There's not really just one way to quickly ship it. It's in some ways like the anti-YC company. It's the thing you can't build in like a couple months and launch. It does take months and months and years and years to develop it. Early on we had a lot of amazing customers.

I mean, we, you know, early on powered off for folks like Vurcell and Webflow and Carda and, you know, kind of the previous era of cloud SaaS we all know about. It's just what we've seen with the AI stuff is it grows faster. the companies are adopted sooner within the enterprise. And all of this AI functionality, it's actually scrutinized by security IT people, you know, a lot more, a lot more heavily. Like the IT people say, no way we can use your AI unless it fits these, you know, security policies. And so despite being started in the pre-AI era,

WorkOS is actually kind of perfectly positioned to be in, well, we are in AI business today without having been started that way. Yeah. How have you, how have you processed the overall SaaSpocalypse narrative or just vibe coding in general. In many ways, workOS can can kind of, I feel like, deliver kind of the dream of vibe coding, which is like maybe there's some specific functionality you want to build. You want to be able to sell it into the enterprise, but pre-WorkOS, maybe that wasn't, that wouldn't have been possible because you have all these edge cases that enterprises are going to care about. But how have you processed the entire narrative? Yeah, when people are vibe coding stuff, you know,

typically don't want to vibe code your security part of your application. You might vibe code code. The features of the UI, like the AI CodeGen is so good for doing UI engineering. But when it comes to stuff like authentication or permissions or things around compliance or auditing, that's maybe not the place you want to apply AI. And we've seen that actually from a lot of our customers, including our customers being the AI labs that are building the models to do this stuff. They're even using workOS. What we've seen from a lot of other businesses is there's no time to build it in-house. So in the previous era, you might have had, you know, like a few years to figure out enterprise. If you go back and look at like Dropbox or

something, you know, they've built for many, many years before they did Enterprise. Today, what's happening is these AI companies, you know, powered by the functionality, they go after Enterprise pretty much immediately. Like within the first year, they have to go up market. And so there's no time to build it. They just turn to us and we ship it for them. So, so I mean, truly how low is the bar? Like if I'm in YC and I vibe code a piece of software that's like MVP, but it works, is WorkOS like accessible to the point where it's self-serve, free for, like, how low is the bar? Absolutely. So we have an amazing free tier.

It's free up to one million users. Wow. That's a lot. So even maybe you get a million users when you're in YC, but past that, you know, as you keep growing. What we charge for is the enterprise features. And really, we try to align our. pricing model with you as a customer. As you go close enterprise deals, you pay WorkOS. It's kind of like Striped. You know, you pay Stripe money when you go, you know, make money

yourself. But it's so easy to use. We have people that integrate, you know, WorkOS in an hour or two. They're out there selling enterprise essentially as soon as they have demand. And actually just last month, we shipped a new capability that's even faster to integrate because it uses AI. So AI is actually accelerated in our customer base. It's also accelerating how fast you can adopt and use our functionality. You essentially just run a command. it installs WorkOS and then you can go scale. Do you have like a KPI around that in terms of like integration timelines? Like it seems like they're getting shorter, but what are we talking about?

Like days of developer time, weeks? If you run our CLI installer, which uses AI to install, it takes roughly seven to eight minutes. Wow. So it's super fast. And I've been doing this trick, you know, whenever I do like a sales call with a customer that's interesting using WorkOS, essentially kick off the call and say, hey, go try this. You know, just run it in your terminal in the background. We'll come back to it after I click around the dashboard a little bit. And essentially, you have a POC that's ready to go.

In the past, we would still integrate fast, you know, but we would have to talk to their engineering team. We get on the roadmap. We do an architecture call. We have an amazing team of solutions engineers and developer success that helps plug stuff in. But I think what we're finding is AI is this accelerant, not just in terms of market adoption, but just making software easier to use and integrate. We even have people that migrate using AI.

So they might using a different solution or having a homegrown thing. You plug clot or codex into it and just rip through it. It's really wild. What now? Is the job finished? Jobs not done? Absolutely not done. In some ways, it's kind of like a new moment for the company.

I told our staff at the beginning of this year, you know, if I was to start WorkOS today, what I would essentially build is WorkOS for AI and specifically for AI agents. So that's what we're building going forward. You know, if you think about agents in the world, and a lot of people talk about agents in different ways, really what they're doing is displacing people doing work or enabling people to do more. I think Ivan from Notion is called agents you're a manager of infinite minds,

the ability to go and control and kind of adapt all these different systems to do work for you. The problem with agents is if you're spawning all these workers to go do things for you, they essentially need permissions. They need access to data. An agent isn't useful if you can't connect it

to all your different stuff and you can't do that securely. Last thing you want is an agent running wild. I think there was a story on Twitter a week or two ago of an agent, an open claw instance going rogue and deleting a bunch of email. It was Amazon. It was like

Amazon also had a I think some of issue. It was like head of alignment or something. Yeah. It's a really wild look. So you definitely don't want that for your personal account, but it's completely disastrous if you're doing that internally your systems or God forbid it's doing it to your customers.

And so this problem around what can agents do they're extremely powerful, but we essentially need to give them different types of permissions and guardrails and identity on top of it. And so that's a new thing that we've been building at WorkOS with some partners, building this new essentially identity fabric, that's what we're calling it, that sits across everything and allows people building agents to have the connectivity, but also the security and trust that is demanded by their customers. And we hope with that it will act as an accelerant more into the enterprise. It'll help more companies building AI do it in a way that's safe.

Amazing. Last question for me. How is the role of, you say, like integration engineer, it sounded like almost forward deployed engineer. How is that role changing at WorkOS now? Well, everything at WorkOS is using AI. Our customers are using AI. We're using it every single role. We have sales reps building stuff with Claude code. Sure. You know, our finance team doing stuff. We have the hackathons going. And so it's definitely impacting the people that are working with customers every day in that way. I think the magic of Claude Code and and this forward deployed engineer is it essentially turns one person into a whole team. So, it kind of mimics having, you know, if you go sell product to like a bank, like Deutsche Bank,

your giant company like Microsoft, you would be able to afford having like 10 or 15 engineers go sit in their office and write code, literally like post up with your laptop and like build stuff for them. That's the original, you know, solution of engineer forward deployed engineer. What AI lets people do today is essentially have that same experience but have a tiny company to it, you know, like workOS. It essentially lets us be that level of consultative, you know, impactful work in your organization. The first step when we run our AI installer for customers, what it's actually doing behind the scenes

is it's looking at your code base and building a plan. It's doing an architecture review by analyzing your structure and providing the best course of action going forward, the best recommendation. I think we're just scratching the surface on that. I mean, that's like, it's so early. It's so, so early

in terms of all this. So at the end of the day, it just makes people, you know, integrate faster, go to market sooner, ship faster, and just grow up market sooner. We talk about WorkOS being the help making your product enterprise ready. It's really an API that unlocks revenue. It expands your TAM as an organization. And when these companies go through that transition moment, say they just are getting product market fit and expanding. The last thing they want to be do is slowed down by the lack of these enterprise features when they

have a big fish on the line. Yeah. And what WorkOS says that turns that on almost immediately. So if it's seven or eight minutes today, I'm hoping to take it down. The big fish company of San I love it. That's right. That's right. Yeah, it's like a fishing line. It's like we'll help you get it to boat faster. Yeah. Well, thank you so much for taking the time to come chat with us. Great to get the update. Congratulations to the whole team. And we'll talk to you soon. Thanks again. Great to see you guys. Take care. Bye. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. Our next guest is Adam Simon from IPG Media. He's in the restream waiting room. Now he's in the TV

What's happening? Adam, how are you doing? Oh, hello. Sorry, guys. Hold on. No, you're good. There we go. There we go. What's happening. Great to meet you.

Thanks so much for hopping on. It's great to meet you. Thanks for having me on. Please introduce yourself. Give us a little background. Yeah. I am Adam Simon. I spent a decade as one of the top

innovation executives at a global media agency, which basically means I got paid to be wrong about the future just a little bit less often than everyone else. And now I am. And now I am out there consulting on where entertainment is going next, which, in my opinion, is off the screen and into the real world. And I'm working on a book called The Emergent Economy about how immersive technology is set to supercharge the experience economy. Okay. What did you get right when you were predicting the future?

Oh, good question. I got right. I think that Netflix would win in streaming, and I still maintain that after, you know, last Friday. Friday's news, obviously. I think that Netflix, you guys covered this earlier, but I think that Netflix is going to come out on top in this deal when we look back a few years from now. That was something I called early. I also called that they were going to pivot into having an ad supported tier at some point as well as into gaming. I think the Netflix behemoth will just keep growing. Yeah. Walk me through a little bit more of like immersive economy off the screen. Like that could

mean Taylor Swift concert. That could mean ice cream museum. There's a million things that happen off the screen like, how do you describe like the territory? Yeah, I mean, it's, it is all of those things. It is, uh, in my mind, it, the exciting part is all of those experiences that are about to get, are already getting upgraded or are about to get upgraded with technology. And some of that looks like immersive technology. It looks like the sphere. It looks like what, what Cosm is doing, which I think is super interesting, especially around like sports and, and, uh, performances and stuff. But I also think it means AI personalization in the physical world. We're, you know, we spend a lot of time talking about how AI is impacting software. You guys certainly spend

most of your days, I think, talking about that. But I think AI colliding with the real world, robotics is the place that most people go, which is understandable. It's super exciting. But I think there's an interim step before we see robots everywhere, AI-powered robots everywhere, which is just our physical world being a little more responsive to us as individuals. If you think about the physical world reacting to you in the same way that your feed on social media might and starting to personalize itself in that way, that triggers some nightmare scenarios. But I think there's some opportunity to also do some really cool, fun, creative work there. Okay, so I'll give you a specific example.

We were in Montana this last weekend. We were at an ice race, which was the first event. that they've done where basically they get a bunch of cars around an ice track and then you can take cars out and do some laps and then there's a bunch of spectators and things like that and I was I was you know my the event was incredible my only criticism is like there was kind of one screen over in one of the spectator areas and so in the area that that we were you you kind of you were reliant 100% on your own vision to experience the event which was cool but at the same time there were certain angles and like a bunch of miscontext. And so in an event, like,

how are you thinking about personalization in the real world? Is it we have smart glasses on and you have your own audio feed or like what does that actually look like in practice at something like an automotive event? Yeah. I mean, I think that that is a great example. I think that to your point, we don't even need to wait for augmented reality glasses. I think when they do come, There'll be some really interesting, exciting things we could do. But just the ability to customize an audio feed, you could do that with AirPods right now, right? Like lots of people already have them in their pockets. We could be through people's smartphones, broadcasting customized audio feeds to you through your AirPods, just as one example.

An under sort of discussed feature of the sphere that I find really interesting is they have beam forming speakers. So different sections of the sphere can technically be hearing different audio. They haven't really used this yet to my knowledge, but the way that they talk about it is that you could have like different language tracks sort of beams to different sections of the venue. And I think that that's the kind of thing that we're seeing built in to lots of venues. And obviously that's not a personalized sort of one-to-one experience. But you can also sort of see how that starts to move us closer in that direction and use some technology that is, you know, not exactly new, but to enhance the experience and make it more accessible from. more people. How are you thinking about VR? We had Ben Thompson on our show earlier today. He's been pushing aggressively for Apple to just let him watch any NBA game. He basically figured out like it's

like a $40,000 worth of hardware that would just need to be installed at the different stadiums. And then you could just, he's like, I don't need a, I don't need a separate live stream and commentary because if you just beam me into the stadium, I can hear the commentary that's happening. I can look up at the scoreboard. I really just need that kind of like video feed. Yeah, I mean, I think, you know, I think long term there are some cases and some users who are going to want the more highly produced edited experience that Apple is kind of leaning into. I know Ben is super against that.

He just wants the static camera. It's like pretend that I'm there. But I think that he's right in that Apple's biggest problem right now is scale and just having the volume of content that you could get with just stats. cameras. And, you know, sports is great, and I'm sure would sell a lot of headsets, but also just think about concerts and stage plays and any place else where just being a fly on the wall or being a butt in a seat, you can't get there or don't want to get there physically, but being able to get there with your Vision Pro or your MetaQuest or what have you,

I think that there's a real opportunity there. Longer term, I actually think that venues like Sphere and Cosm in particular are going to create a pipeline for that kind of immersive content that will be able to go straight to two headsets. Because if you think about what Cosm is doing with the NBA, they basically have that camera already there, Quartzside. And it's creating that immersive sort of shared reality is what they call it experience in the Cosm venues. There's no reason you couldn't just port that over to a Vision Pro right now. So we're starting to see some pieces be put in place that's going to create a really interesting, I think flywheel for immersive content. And I sort of think about it as the venues like

QASM being a kind of middle class experience where if you have the money and the capability, you're going to go there in person, of course, but you're only going to do that for a few events a year, even if you have deep pockets. And obviously there's the at-home viewing experience, which might be upgraded if we can watch it in an immersive environments. And then you have the option to go someplace like a Cosm venue to get this sort of, you know, halfway experience. I can still go out with my friends and be social and have a close to court side experience without shelling out to fly wherever the game is. Yeah. Are there are there a lot more spheres, cosm type experiences coming down the pipeline? They say they're super capital intensive,

so they're high risk, but are from my view, the response to both has been great. and Sphere seems to be somehow doing pretty well in the public markets as of late. Yeah, I think Sphere was caught everybody by surprise a little bit because that that first year, there were lots of headlines about how much money they were losing, how much it costs, not just to build, but to operate. But from everything I can tell, they, from the outside, obviously, they look like they have found a path. I think if you look at what they did with the Wizard of Oz, which was a surprise, I think,

to everyone in Hollywood, it is really successful. They basically made like a fan experience for Wizard of Oz, which gave them a reason to charge you over $100 a ticket to see a movie that you've probably seen dozens of times before. And I don't know if it's streaming anywhere for free, but it used to be on television all the time, right? It's like the classic movie that was constantly available. And yet people are selling out over $100 a ticket to go see it.

They've sold over 2 million tickets to that already. So I think it's not exactly. exactly what they set out to do, but it's an interesting new path for them and clearly a source of revenue. Yeah. Brian Chesky from Airbnb was on the show fairly recently talking about how he is quite bullish on IRL in the age of AI. The online world is getting very wild and intense. You can imagine some people just deciding, I'm going to log off. I'm going to go somewhere, getaway.

I can see that, but I can also see the other side of it, which is that the online world continues to get more and more entertaining. And some people just say, like, well, I'm not, I don't need to go take this trip or go to this experience because I'm perfectly entertained at home. What indicators are you looking at to understand if, if AI is actually disrupting some IRA experiences? Would it show up as like Disneyland, you know, visits dropping, which obviously, could be a number of factors. Like, how would you, where are you kind of like trying to see where there might be some disruption? Yeah, I mean, I think I would be looking at things like live streamed sports and concerts and things like that to see are the ticket sales going down. Everything we've seen to date is quite the opposite. People are spending like

crazy on experiences, right? It's, it's, everybody thought that, that it was sort of a revenge spending after the pandemic. But that has, has not played out. but he is very excited to at least sometimes, right, like close their laptops, put their phone in their pocket and go out and do something fun. I think what we're competing with is that people are, they want to be out there having experiences, creating memories.

And that is not something that you're going to have the same sort of experience doing looking at a screen. There's also some interesting neurological research that I've been following around just like how we sort of sync up and experience communal events. And it's just, it's really fascinating. But basically there's, we create stronger memories and we form stronger social bonds when we're in person.

And it actually has a biological component to it. It's not just sort of the emotional aspect of being there together. So I think, you know, maybe if the pandemic was the catalyst that we realized what we were missing, but I'm pretty bullish on the fact that demand for, You know, even technology optimized and oriented and enhanced experiences in the real world, just because we're out in the real world doesn't mean the tech goes away. It just changes and evolves. And I think that's where a lot of the exciting developments, both for AI, but also for other technologies,

is going to be in the next decade. Well, we've got to do the next one in person with a live audience, because just neurologically, I feel like we'll have a better time. Yeah, there's also the reality that. Many people are chasing IRL experiences to have something to show back on social media. Oh, yeah. I try to remind myself, you know, we were at this car event, and everywhere you look, there were cars that if I saw them on the street, I would just stop whatever I was doing.

And I was trying to force myself to actually just take it all in versus taking pictures. But certainly there were some people that hardly were processing. it live because they just wanted to share everything that they were seeing back on Instagram. And honestly, that is the thing that I'm most excited about with glasses, whether like meta-ray bans or what Apple's going to release later this year or early next year. Having the ability to capture content but stay more present in the moment, I think is the best sort of marketing case for those products because you're absolutely right. We want to be able to capture these things, but we've, I think, tilted a little bit towards doing things just for the sake of capturing them,

rather than actually enjoying the experiences. Look, I think everybody knows that. Even when you're doing it, to your point, you're aware of it. So I think if there's the right catalyst, it'll get people off their phones and more sort of focused on what's around them. Totally. Well, thank you so much for taking it. Yeah, great to meet and come back on anytime.

Have a good one. Great to meet you. Thanks, guys. Let me tell you about app loving. Profitable advertising made easy with axon.a. Get access to over one billion daily active users and grow your business today. We have been keeping our next guest waiting. We have Matthias Wagner from Flux.A.I. He's the founder and CEO, and there's some exciting news for us.

What's happening? Welcome to the show. How are you doing? Please introduce yourself in the company. Hi, guys. Thanks for having you. My name is Matthias. I'm the founder of Flux, and we're building the first AI hardware engineer. Amazing.

And give us the news today. You raised some money. What happened? Yeah, we closed the series B. We raised the total of $30 million in capital. Across. About. Congratulations.

Led by 8BC, so, you know, super stoked and, you know, stepping on the gas in now. Yeah, talk about the key problem, the key product, where you are in development, rolling out, getting product in the hands of customers. Yeah, good question. So, I mean, you know, you've all heard it before. Hardware's hard. Yeah. And we felt like this is like learned helplessness, you know. And we're taking the heart out of hardware, right?

So if you think here what... It's just where now. It's just where. Exactly. But, you know, we're starting with electronics here. Because, you know, it's like a very standardized form factor. And it's at the heart of anything that's worthwhile building these days. If you think about, you know, computers, robots, what have you.

And the insight here really was like, right, that if you think about how easy it's become over the last two, three decades to make software, especially now with the AI boom, right? Hartford hasn't gotten any easier to make. Right? Even though the supply chain is incredible available now. I mean, I can, like from anywhere in the world, for like $20,

can get a PCB bought manufactured in China and sent back in seven days, fully assembled, right? And that you couldn't do 20 years ago. You had to be Lockheed Martin or Apple or like a big tech company to afford it. But now everybody can do that. But there's a design tool just don't exist and unaccessible. And that's what we're solving for.

So talk about the inputs and the outputs. Obviously, at the end, I get some sort of PCB spec Is that just a CAD file or a PDF? And then what am I actually putting in? Is it just software that I want to be translated into hardware? Like, at what level of abstraction are we operating here? Yeah, good question. So, look, the vision is that you can go, like, if you think about chat chappet,

you can go from like a prompt to a poem, right? Or like a cloud code. You can go from a prompt to a bug fix or a feature. With flux, right, ultimately we want to be able to go from a prompt to an iPhone class device. Wow. Now, that's a long road, right? So what we're out today is like you can make like, what's it like mid, small to make complexity, you can probably single shot today.

And everything else is going to be more iterative, you know. Again, like Clark Hood, Devin, Caruso, all these tools, very, very comparable. Sure, that makes sense. Who's the best customer for you right now? Where do you see that going? Are you going after startups that are iterating really quickly? This is speeding them up, or are you going to large organizations that are already churning out tons and tons of PCB designs?

Yeah, so it's a quick mix. most customers are SMBs. What we're seeing is that there is, like, you know, only about 25% of our customers have previously made a PCB about themselves. Sure. The others are technical. There are mechanical engineers,

firmware engineers, industrial designers, right? But they didn't have the time, patience or resources before to make custom boards. And they would previously buy OEM boards, right? If you think about, like, a favorite example I have, we have this customer. They make vending machines, like snack, beverage vending machines.

And they would previously buy four or five off-the-shelf boards and integrate them into a single machine. Think about the board, the powers the display, the payment, the motor in here, and so on. And now they can make like a custom, like a single custom board with flux, right? That's much cheaper to integrate into the machines on the assembly line. The machine breaks down in the field, but you know where they're standing there like somewhere in the rain, you know, there's one board to replace. And then, right, the board costs and pennies on the dollars compared to before, right?

Because what you're paying now is material cost, you know, to a manufacturer in China, right? They can do that for you. And so that's kind of like here the main driver, I think. What's your favorite printed circuit board or favorite product that has a PCB in it? Ooh, the space shuttle? The space shuttle, that's a good answer. No, I looked this up the other day. The space shuttle, I think, was one of the first boards that had like eight layers or so, right, at the time.

And it was hand-drawn. They didn't have software for it at the time, right? Which is like crazy if you think about that. So, yeah, it's like a fun anecdote. That's a great one. Do you already anything else? Wow, wow, wild. How have you seen anything exciting on the U.S. side, on the supply chain side?

On the actual PCB manufacturing? Yeah, is there, I feel like we had somebody on the show last year that was trying to make PCB. Like we have send cut send now for, for like machined parts and things that you need cut. Is there, is there a great company in America that's starting to think about PCBs there? Yeah, like if we have our own Shenzhen, I imagine it would have a variety of manufacturers. like this to really because you want to get to the point where you can kind of sit next to the manufacturer and really speed up that iteration cycle yeah yeah i mean look at a lot of people like us want that right we looked into the details of like opening our own fab here in fremont or so but you realize quickly right

making PCB boats is like the board itself as a chemical process good luck getting the permits right it's possible but it's hard right and so these are kind of like the bumps you've run into but i think there is exciting opportunities here right um so Especially because if you're designing these boards with AI, right, then you can also optimize for the capabilities in the inventory you have at the factory, right? Because the way to make this cheap to make is to, like, design it so it can be assembled automatically by machines, right?

But for that to work, essentially these pick-and-place machines, they have to have all the semiconductors you need on their rails, right? And that's difficult to do for humans to optimize four, right? Because it's like a quick-changing thing. But I think as we're automating all this, right, we can have the models designed towards what the factory can spit out in an hour, you know, for almost zero cost. That's amazing. Congratulations.

Thank you so much for taking the time to come talking about. With this pace, I'm sure you'll be back on this year. Yeah, this is amazing. Yeah, I hope so. Have a great rest of your time. We'll talk to you soon. Let me tell you about label box. RL environments, voice, robotics, evals, and expert human data label boxes, the data factory behind the world's leading AI teams.

Up next, we have some exciting news from Zach. from Cal AIs, the co-founder and CEO. Oh, is he not here? We are getting him set up. Sorry about that. We can head back. We can head to the timeline because we have an incredible announcement from Riley Walls, the new OpenAI staffer, who launched Payphone Go.

It's effectively Pokemon Go, but for payphones. Payphones are strangely still licensed in California, he says. So I filed a FOIA request and got the full list. Naturally, I made a game so you can now play. You create an account. You get your unique player ID. It's a nine-digit number. Then you use the map to locate one of California's pay phones. Some are easy to find. Some are not. Pick up the receiver. You dial this phone number. 888-683-6697. It's toll-free, so no coins required. You can just go to any pay phone that you can find. And then you call in and you enter your player ID and you collect them all. You have to catch them all

All 2,203 payphones in California are at stake. And Riley is on another absolute generational run with these projects. I love these. They are so much fun. Go check it out. And congrats to Riley on another banger project. Well, I believe we have our next guest. Yes.

But Zach is going to be later. Zach will be later. So we're going to jump over to... What's going on? How you doing? Sorry for the confusion. Hey, how's it going? No problem.

Nice to meet you guys. Good to me. You please introduce yourself and the company. Yeah, I'm Juan Rodriguez. I'm from Barcelona, Catalan. I'm the CEO and founder of Quiverr AI. And at Quiverr, we are building models for AI generation of SVGs. Okay. Vectographies, you can put a text prom and you can get a vector graphic. Or you can put an image and you can vectorize it. Love it.

So it's really good for designers, really good for icon generation, logos, and so on. PNG to Vector to SVG was such a hassle like a decade ago, maybe even like five years ago. It's still not perfect. What's the secret? Because I've seen these demos from, I think the latest Gemini 3.1 was doing some SVG drawings. It was pretty good. What's the secret to going superhuman in SVG generation? Well, that's a great question.

It's a pretty challenging problem. And we are tackling this through kind of new paradigm. So it's code generation. So an SVG is actually code in the back. It's kind of a bunch of code and you compile it and you can get an image out of it. And previous methods were mostly like tracing, you know, like you get an image and you kind of trace it. But yeah, I did this PhD in SVG and I invented this method where you can actually get really cool SVGs through code generation. So, you know, LLMs are really good at code.

We know this. And I just went nuts in my PhD to try to train these models as well as I could. I imagine part of the benefit is that once you have an SVG, you can export that to Figma or Illustrator and then edit and do the final. If your output's 99%, much better than getting a PNG that's 99%, and then you've got to go and clean everything up and it takes a lot longer. You can adjust the actual splines. Is that correct? That's correct. Yeah, you can edit, you can change the colors.

You can maybe do animations later. Oh, sure. Yeah, Gemini is really good for that too. Animations is something that's popping up a lot in Design X. So, yeah. What are you, how are you thinking about competition long-term? Sounds like you guys can kind of lead in this space, but at the same time, I imagine all the labs kind of care about this category.

Do you imagine partnering with them or having a different distribution strategy? What does that look like? I mean, it's exciting to see all the good results. They are also evaluating our ideas. We have ideas to try, and the big labs are showing really good results in the SBG space. We are seeing that if you just train a big model with a lot of data and just a bit of effort, you are going to see really good results in this space. And what we are doing, yeah, we're kind of doing this our own thing, our own way,

with our own REL rewards one at a time and trying to, learn how to do this the right way. How do you think about the customer? Do you want to integrate with a piece of software that already runs and lives and breathes SVG or do you want to be sort of like this one-off tool that lives on a website that, you know, artists and creators can go interface with and then just take the assets elsewhere? Yeah, great question. And so we started with a customer, kind of consumer approach.

We built our website and we wanted to see what people do with these tools. But at the same time, we build our API so that other tools can also interact with our models and build on top of it. We can see agents already being deployed. We can see MCP servers calling Quiver. And we are seeing all sorts of tools integrations with all your kind of stack of tools for designers. And that's what we are aiming for to be very close to the stack and workflows of designers. Yeah, this is Christmas for After Effects artists. I've played with a lot of this stuff. It's a lot of fun.

Congrats. Jordi, anything else? Where's the company base? It's going to be racing San Francisco. Cool. But you're calling in from Barcelona? That's right. In the process of...

Last thing, you raised some money. How much did you raise? Yeah, we just raised $8.3 million from Lend point in 16, there we go. I'm so happy that this is funded. This is very, very... Great. Great use of your PhD time, too. It feels like you're obviously just getting started with quiver, but I've been at it for quite a while.

It's very cool. Very cool. We will talk to you soon. Have a good rest of your day. Cheers. Beautiful. Goodbye. Let me tell you about vibe.com.

We're DTC brands, B2B startups, and AI companies, advertise on streaming TV, pick channels, target audiences, and meta sales, just like on meta. And we have our next guest in the restroom waiting room. Let's bring him in to the TVPET Ultradown. My man. Zach, finally. How are you doing?

I'm good. How are you guys? Congratulations. Tell us what happened. I want to hit the gong for you. Well, thank you. After a year and a half journey building Kaliai, we were finally acquired by My FitnessFal. Thank you. Thank you. When did you meet the team at My FitnessFal? Yeah, yeah. Break down the deal.

Yeah, we spoke to them initially back in May. I was talking to a few companies reaching out to them before going to college. because it could have been, if we got the right offer, it would have, I think, made sense. I could have maybe had a normal college life for a little is what I was thinking. We didn't move forward at that point with anything, but built those relationships and then kept in touch, and when it finally made sense, we moved forward. And I think I saw on your announcement, you closed it while you're 18 and you're just announcing it now. Is that correct?

Yeah, so we closed it in December when I was 18 and then I turned 19 in January. So now it's brutal, dude, you're washed. You're shocked now. It's not over here. It's over. Give us the scale of the business, the monetization. I mean, describe it for those who don't know. And then I want to know how did you grow this thing?

How big did it get? Great question. Calli is an app where you could track your calories just by taking a picture of your food. And we did $30 million in revenue in 2025. Wow. And we just finished January. I didn't check February, but January, we did 5.7 million in revenue. It's a subscription model. That is incredible. So heavily dependent on iOS in app subscriptions, are you Android as well? How important has that been? Android is definitely less important. It's maybe a tenth of our revenue. Yeah, yeah. It pretty heavily is just iOS. Yeah. And then acquisition. What is this influencer driven, ad driven?

Customer acquisition. Yeah, customer acquisition. Yeah. Customer acquisition. I mean, obviously you're on the charts, but are there viral mechanics? Like, what is the growth engine for the app? Early on, it was mainly influencers. And then, as of recently, the last maybe six months, we've primarily continued our growth through paid acquisition on channels like meta. And so the two combined are really what's driving it. Makes sense.

What are the kind of key reasons why my fitness pal wanted to pick you guys up? I can think of a lot. but what what what drove this well definitely many many reasons we have different audiences different core audiences but then we also have overlap and we both are very mission driven we both just want to help the greatest number of people as possible become healthier and so since we were since we have this overlapping space we realized that it would make sense a together, share resources, and it would further the mission for both of us and really make sense to just partner. Talk about accuracy. I think there's some people that are skeptical that AI can take a picture of food and tell you how many calories are in it.

How has that evolved over the year or so that you've been running the company? Like how accurate was it at the start? How accurate is it now? Where do you expect it to go? The accuracy of Cal AI early on, it definitely wasn't as good as it is today. We initially started by just running chat chitbt by itself pretty much as the model you would just take the picture would put it into chad jubt say how many calories is this output the response total rapper victory total rapper victory honestly congratulations it's so amazing well that was like a month yeah and then we fine-tuned a model we built out a more complex pipeline using like a ton of different models for different steps and so it's become more and more accurate over time at this point we average over 90% accuracy for each food scan, but you would actually be surprised only 30% of the scans

are only 30% of food logs come from scanning. The rest are like barcodes typing in in the database. So those are the most accurate methods. That makes it sense. That makes it enough sense. Very cool. What are your guys' combined ambitions now? Where do you want to take? Are you going to be supporting on the main My Fitness pal app as well? I imagine they've seen what you guys can do from a user acquisition standpoint and a product design standpoint and want your help across the org? We're definitely helping any way we can.

So definitely some of our marketing systems, we are helping them to also build out. And they're helping us too, teaching us things that we didn't know. So together, we're going to be able to go a lot further. and we're going to remain standalone apps. Cool. Well, congratulations. Congrats, yeah, congrats to the whole team. Yeah, you're...

An actual overnight success. Truly, truly, truly an overnight success. But the beginning of a long career, I can tell already. Yeah, I know. I can't wait until we'll be here when you turn 40. Come back on. Come back on. And then point.

Hopefully an IPF. Just go. You got the exit at 18. We'd like to see the IPO by 20, by the time you're 30. Awesome. Thank you, guys. We'll talk to you soon. Congrats.

Thank you. Thank you. Talk soon. Have a good one. Let me tell you about Century. Century shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. And up next, we have our last guest, Andy Markoff from Smack Technologies.

He's the co-founder and CEO. Andy, how you doing? Great. Thanks for having me on. To the show. First time in the show, please introduce yourself in the company. So Andy Markoff, our co-founder and CEO of Smack Technologies. I'm a, well, I'd like to say a recovering member of a cult known as the United States Marine Corps spent the first 10-5 years of my professional career there, got out, tried to figure out what I wanted to do when I grew up.

And luckily, one of the Marines I served with my co-founder, Clint Allenis, got out. We both decided to work on building the, the decision. decision-making tools we wish we'd had when we were running the kill chain during our careers as, you know, Marine Raiders at Marsock and, like, try and give back and, like, find a way to serve again after we've both gotten out. So we talked about this idea, you know, really fall of 2023 and then started the company in January 24. Really, so what smack is, we are the first frontier AI lab solely focused on building for national security. And our mission is what we would call decision dominance. but how do we take, you know, petabytes of sensor data, multimodal data streams that, you know, too much for a human to actually analyze, and then convert that analysis in real time into the right decisions across the range of military operations, whether that's trying to figure out what are we doing for the next one to six months, what are you doing for the next one to four days? And like literally right now what are we doing, but trying to make that process seamless and what right now is a pretty siloed and slow system.

What are you building on top of? Like, it feels like Palantir exists. there's databases. It's not like technology was just invented, but AI is obviously new. So like how are you integrating with systems? What are the tailwinds here that allow you to actually deploy systems effectively and quickly? Yeah, I think, I mean, at the end of the day, we are not building on top of another like AI model, building our own model.

Yeah. And I think that's, you know, the reason for that is general purpose, like large language models are very useful and they're very good at analyzing. massive amounts of textual data. They have a lot of really important use cases, but they are not the right tool for 80% of military decision-making. And some of that's just, they're trained on labeled data sets. There's no label data set for World War III. Hopefully we never have that data set. But you need a different type of model to make decisions on multiple time horizons, do the type of hard, you know, physics, grounded, geospatial reasoning required for most military decisions. And that's, you know, deep reinforcement learning is a, is the right approach for that

problem set. So we're, we're building a deep reinforcement learning model. And instead of, you know, label data sets, we're, we're training that model in an environment that's been built by, you know, physicists who are grounded in like the physics of a peer level conflict, but also domain experts. And I think that's a lot of our advantage and secret is there's, there's a lot of information and expertise about how to fight wars that are in people's heads. They're not, it's not in a document that can be read that need to be encoded and put in an environment to make a system that can actually function in that type of environment. Interesting. So, I mean, a lot of the foundation labs are going to data providers, data brokers, hiring experts to write down their SOPs. You're

obtaining data from the U.S. government. Is that correct? Like, what does that pipeline look like? Sure. So building this data is, you know, some of the domain expertise, we have hired on the team. I mean, you know, Clint and I's background. I was a joint fires instructor for a while at the Marine Corps's version of Top Gunn. Clint kind of spent his whole career, like in the firespace as we did at Marsock. We've hired a lot of people on the team that were the absolute best at their military discipline. They were instructors and they did it on deployment.

And then we work with our in-users. And I think in some ways, this gets to how do you trust, how do you trust AI and how do we get users to trust AI? the users are part of our training data generation, like taking their knowledge, their understanding of the right way to do things today and helping bring that into the environment in a way that they can trust that their knowledge and their understanding is actually being used

to help the model get to a better start point. What ways in which conflict is evolving are you guys willing to lean on and effectively bet the company around? It's obviously great to have the all, the time actually enlisted and serving the country. But the battlefields evolving. I'm sure you've been, you and the team have been watching all the footage coming out of the last few days. But where is this all kind of going in your view? As far as where is like kind of conflict moving? Well, an example is like,

I think we saw like the U.S. version of Shahed or I think, like, so, so. low-cost autonomous systems seem to be, you know, coming online en masse and and all of these things are going to impact how you build the product. Sure. So, I mean, I think at the end of the day, you know, the scaling and operationalizing autonomous systems is a large part of the future of warfare, right? And so I think the concept that we talk about internally that we need to build and enable is what we would call intelligent autonomy, but how do you orchestrate?

all of these autonomous systems, not just against tasks that they've been assigned to, but with each other and with the more exquisite, expensive systems. And how do you do that in a way where you still have a human in the loop, right? I think there's been a lot of discussion about fully automating the kill chain. No one wants that. That's not even really something that I've heard anyone talking about. What fundamentally people are trying to do is have the right amount of human in the loop, have humans for high value human touch points.

It's not everywhere humans are making decisions today. We can't have humans involved in every single thing that they're involved in today. But a lot of the decisions are not high value decisions that are humans uniquely positioned to do. So it's intelligent times about removing humans from low value human touchpoints, keeping them and bringing them back into the system for those touchpoints that they need to make the decision, whether for ethical reasons or for tactical reasons, and enabling them to make decisions that help move, you know, hundreds of thousands of, you know, autonomous systems and man platforms and, you know,

other types of unmanned platforms towards common goals across a, you know, what could be a hundred million square mile theater. And like, I think that's, that's really the spec that we have to build towards. Uh, makes sense. What, what's the shape of the company today? Where are you guys based? Uh, what are you, uh, what are your plans with this, uh, with this new capital? Sure. So we are, you know, team of 18 today, um, really split, mostly. between El Segundo, we're like the majority of the tech teams El Segundo and then like a headquarters in Texas. We have a physicist of physics lab like down in Texas. So part of the tech team is there. And really our product, the way we think about is like we need to have a model like a heavier

weight model that is available for people that work out of an operation center or not like compute limited. And then, you know, lighter like lighter versions of that model that can work at the edge at the front lines where people are going to be bandwidth constrained. And so a lot of this year is getting to what currently were deployed under contract with the Air Force, the Marine Corps, and the Navy is to expand across all six services, both at the command level, but also to take what right now we're prototyping is the edge version of the model we build and get that deployed to frontline units across all six services by the end of the year.

Take us through the fundraising round. How much did you raise? So we've raised 32 million to date, 26 million. And we've been, frankly, just really fortunate to have the investor team that we had. I mean, like I was saying earlier today, you know, Clint and I knew nothing about fundraising procurement, government acquisitions. Like we didn't know. We just, like, were wandering around in the dark, you know, back in January, 2024, trying to get moving. And having 0.72 kind of take us early on, believe in us, kind of teaches the ropes of the defense tech space was tremendously valuable.

And, you know, we've been really fortunate to have, you know, Geodesky and Kosovo co-lead, the Series A to really help us figure out how do we get to the next scale? How do we start scaling the team? How do we build the systems that allow us to grow rapidly? And we've just been really fortunate to have supportive investors and understand the vision and kind of knew what we need and do what they can teach us at, different phases. What's the origin of the name? So smack is actually a tactical task that you would call over the radio to strike a target. So when I was, it would be out on a raid, you know, Afghanistan, Iraq, and like you'd have a hostile target that you were going to call in an airstrike on, you know, the conversation that you just smack that target is actually like a task. So that was, and I think,

you know, fires, fires is one of the military's functional areas, but I think that's an area that's you know, Clinton and I's specialties. That was a lot of our initial go-to-market was in the fire space, and we were initially heavily focused on that, but obviously we're expanding this year to kind of the range of military decision-making. Is it true that

you hired someone named John Coogan? It is, it is true. I actually was getting really confused earlier today when I saw yours. I was like, why is John, why is my John on Twitter? He's also a Marine, too. I was like, in Marines would even use Twitter for X.

very cool yeah go around and tell everyone yeah i hired john kugan you're like what that's very fun awesome well great great to meet you and i'm sure we'll be back on soon we'll talk to you soon awesome thanks for having me yeah thank you let me tell you about glad it powers the app to use to spend save borrow and invest securely connecting bank accounts to move money fight fraud and improve lending now with ai we have a debate to settle is it pet smart or pets marked I have a opinion here. I will settle this, but we should vote as a group. We should also play this video of the folks who kick this off.

Ben Lapidus has a whole song asking the question, is it pets smart or is it pets? The aesthetic of this is incredible. Is this real? This is a real video. They went dressed up and found an office and trashed it for this video. so much production. So the question,

is it a mart that caters to pets or are they saying that taking your pet there is the smart thing to do? Which side of the debate do you come down on, Jordy? They are smart about pets. Oh, okay, you're a smart guy. I'm the opposite. I think it's the pets mart.

I think it's... Oh, and is it because the bounce is... So there are two sides of this. Adam Bain, former CEO of Twitter, chimed in. Is it pet smart or pets mart? The color in the logo indicates that they are saying pets are smart. But the bouncing ball suggests that it's a mart for pets. Which one is it?

It can't be both. Of course, it can be both. The logo designers are probably having fun. But I'm a bouncing ball guy. I say it's the mart for pets. Albert in the chat says, WTF, I just entered a pet smart. That's got to be weird. Tyler, where do you sit on this?

Now would be a good time, Albert, to tell you that. Tiebreaker over here. We got, we got Tyler on my side. Which way did you go? I'm with John. Tyler took my side. It's a mart for pets. That just doesn't make sense.

Why would they, no logo designer? All the things you buy in PetSmart are four pets. It's a place that holds things for pets. It's a Mart. No, it's a mart. No.

That's Mark. It would be pets all red and then. And then blue M-A-R-T, but they flipped it. No, you make a compelling argument, but I still disagree. somehow in all the news, I don't think we ever said the words that... We never rang the gong. Open AI raised a $110 billion round of funding from Amazon, Nvidia, and SoftBank. We're grateful for the support of our partners and have a lot of work to do to bring you the tools you deserve.

That's probably the biggest... That's a gong record? Yes. It's the biggest round for a private company ever. And it's also about one quarter of venture capital outlays that are experienced. expected for 2026 in one round. 400 million will be invested from venture capitalists broadly. Of course, this money is from the hyperscalers.

It's more complicated than your average VC deal. I don't even know if this will be included in the VC funding tallies because it's such a big round and it's from so many strategists. But lots of more capital for Open AI. Vaux says everything on Earth is thought-based. They're just trying to keep me pensive. It's true. This is true.

What else? Ryan Peterson is saying, Happy late Valentine's Day to my wife. When a semi-Neanderthal man loves a mostly human woman. Very odd. We should plant the bomb. We should get out of here. We have another podcast to do, actually, that will go live.

We're going to break. We're going to do five hours. We're doing five hours today. You'll need to tune in later. We will tell you about the podcast that we're going on soon. But leave us five stars. Hit that subscribe button, sign up for jvdn.com. Last but not least, the U.S. Open is letting you know that the U.S. Open will return to Inverness Club in 2045.

2045. We all have that. Let's go. See you tomorrow. I can't wait. Goodbye. Have a wonderful evening. Nice work, brothers.

I'll see you on the next one.