TBPN Live - Apple Unleashes $100B Buyback, Palantir Crushes Earnings, OpenAI's New Open Source Model | Alex Albert, Scott Kupor, Kyle Harrison, Brielle Terry, Sean Henry, Andi Duro, Gabe Pereyra, Kareem Amin

Starting point is 00:00:00 You're watching TV! Today is Tuesday, August 5th, 2025. We are live from the TBPN Ultradrome, the Temple of Technology, the Fortress of Finance, the Capital of Capital. I just lost my voice. I'm actually seeing stars. People said the intro could be louder. Yeah. They're like, that's the main feedback.

Starting point is 00:00:19 I took it there. I took it there. Good job. Anyway, let's kick it off of this post from Bucco Capital Bloke. Apparently, Variety has reported that Roku launches Howdy. A low-cost, no-ads streamer, but it doesn't want to compete with Netflix. Calling it a streamer is funny. Yeah, what is this streamer?

Starting point is 00:00:37 Streaming platform is a short for sleep streaming platform? Oh yeah, I work at a small streamer, American streamer called Netflix. Is that a, is that, is that, does Netflix count as a streamer? I don't think of it a streaming service. I don't think of it's a streaming service because streams the content to you. Yeah. Well, anyway, Bucco Capelblok shares a hilarious post from the bangor archa boxer. orc boxer says, have you seen the new show? It's on tubu. It's on tubu. It's literally on

Starting point is 00:01:04 he be. It's on pooty with ads. It's literally on dippy. You can probably find it on we now. Dude, it's on gumpy. It's a feebo or racial. It's on poob. You can watch it on poob. You can go to poob and watch it. You can log on to poob right now. Go to poob, dive into it. You can poob it. It's on poob. Poob has it for you. Poob has it for you. Where do they get these names? Where do they get these names? It's like the pharmaceutical industry, how they have, like every drug kind of sounds like vaguely like a familiar world with goovy and Ozympic. Like they sound like real words, but like the domains are available.

Starting point is 00:01:42 It is one of the most wild things anyway. It's great. Yeah, we should go check out howdy and you should check out Ramp.com. Time is money. Say both. Easy use corporate cards, bell payments, accounting and a whole lot more all in one place. And we have our first story. So we talked about this a little bit yesterday.

Starting point is 00:01:58 Take him, author of the Invidia Way, and a huge fan of Jensen Wong and invidia, says, here's what I would do if I were CEO of Apple, quadruple the RAM and iPhone, so 32 gigs, have the max model at 64 gigs. Memory is oxygen for local on device AI. More equals smarter, more powerful. Take the margin hit. Memory isn't even that expensive. Then this is where we get controversial.

Starting point is 00:02:19 This is what we were debating yesterday. Number two is buy mistral or end. Anthropic and invest $100 billion compute annually. That is, I didn't realize. So buying Mr. All Aranthropic, that's $100 billion out the door, day one. Then you're spending $100 billion a year to build a multi-gigawatt data center. Take him a great writer. And the more you spend time with this post, the more you can imagine a world where he takes Apple, you know, out of the Mag 7.

Starting point is 00:02:52 Yeah. He says build multi-gaggagawatt data centers and enter the frontier AI model race in a big way. This would be fantastic for Nvidia. I mean, take him seems like he's really full tilt on Nvidia to 10 trillion right now. Anyway, Apple has a capital. Apple knows the AI computing shift is existential. Where's the bold action and urgency? So there's a lot to agree with here.

Starting point is 00:03:15 We debated it. The one thing we didn't debate is that you restreams the best stream platform, one live stream, 30 destinations, multi-stream to reach for your audience wherever they are. Go to restream to sign up. Anyway, what are you saying? What is AI is seemingly important, but what is the existential threat that we get? Just play this out. New computing platform, eyeware that's integrated with AI.

Starting point is 00:03:40 We haven't seen anybody launch a hardware device or even plan to launch a hardware device yet. That's not an additional device outside of your computer. We are both on MacBook pros or MacBook users. Using iPhones. We have iPhones. They were additive. And then other people went further and they added an iPad to their life or they added a watch to their life.

Starting point is 00:04:00 Not even obvious Schiffman, the most bold hardware founder in the world is saying I'm going to replace your iPhone. Yeah. It's just saying I'm going to give you a friend. So I mean, I do think that there is some potential, like if there was ever a crack in the foundation of Apple's monopoly on high-end smartphones, it's now because not like you're not going to get me to switch with slightly different design or slightly different shape or it's folding. Like those phones have come to market. No one has meaningfully shifted. But a, but a phone that

Starting point is 00:04:34 was designed from the ground up around AI and really, really optimized for chat GPT and really, really, like, AI first at the core, just everything is infused. Sure. Like maybe there's a chance there versus anything else that came out. Like Apple was always like, like, like, 5G was never a digital. differentiator. Apple was never behind on that. They were never behind on display resolution. Like, they had the retina screen immediately. But you could imagine a situation where if Apple was three years behind on retina screens, people would be like, well, yeah, like, I want the one that's sharper screen or something. And Apple's been behind on a lot of things by a year or two. And that's what leads the Android fans to always say, like, Android's had this for two years, or that's why I

Starting point is 00:05:18 have Android because I like the cutting edge because you're actually you actually kind of are in many ways more on the cutting edge when you're in the Android ecosystem but you just don't have all the integration that comes from. Android owners love to tell you. Yes, yes. They love to go spec for spec. Yes, yes, exactly. But the question is should Apple actually go so hard to play catch up? And so Apple beat earnings last year. I mean, going hard could look like buying perplexity. People have made the case. My voice is still shot from that.

Starting point is 00:05:57 People have made that case, but it still feels insane when you look at the history, Apple's M&A history. And often they're happy to acquire talent, but they don't do it at the VCs. Historically, they're not doing it. as sort of unicorn valuations, right? Yeah. Yeah, the, like, going hard could look like spending $100 billion,

Starting point is 00:06:24 or it could look like just figuring out what their next Google deal looks like. Because Apple has this insane deal with Google, where Google is the default search engine on Safari, and they make, what, $10 billion in profit? I think it's $20 billion in profit every year off of that deal. It's like a fantastic. deal. And people are worried that it might go away. So there's something in this, but there's

Starting point is 00:06:53 something in here. But, you know, you could imagine a situation where Apple is getting a massive payday from a foundation model lab to route iPhone customers to that model. And we haven't seen that dynamic play out. There's this question of, will Apple? One scenario is, there's a world where a foundation model gets the Siri button and Google keeps the the default search sure and Apple suddenly is getting another yeah like 100% yeah I mean Ben Thompson's written about this we've talked to a lot of folks about this like there's this weird world where chat GPT is so dominant that they might like they could swap out the foundation model for a different model and most people wouldn't know they'd be like oh yeah I use chat GPT what model 4-0 or or 03 or Gemini or

Starting point is 00:07:43 Lama and then be like I don't know I don't care it just gives me the answers and so you could imagine a world where where Apple is pumping users into monetized you know LLM queries and getting a huge check from that and maybe that's the most elegant solution here to like get back in the AI race I capture the value I would love to know how much open AI already pays Apple just through the app store oh yeah I don't know yeah because if you if you subscribe to open AI in the app store they probably take 30% of that and if they're making a billion a year and maybe a third of that is from iPhone subscriptions in-app purchases like you're looking at like a hundred million dollars a month is that like are we in the right territory that seems like extremely high i know i'm going to

Starting point is 00:08:31 look in the i'm going to look in the app store right now and see how much they actually push in app subscriptions yeah yeah i don't know i'm pretty sure i subscribed on web long before downloading the app and then I transferred the app in. And chat GPT might, like the team might push you out into a web view. Like, you can do that now. It's getting easier every year because of the antitrust stuff.

Starting point is 00:08:54 And it certainly makes, you know, economic, it's economically rational. Especially if you're going to get somebody to upgrade to $200 a month. You can't make changes to your subscription inside this app. Okay, so the answer is zero. So right now, I think $0 are changing

Starting point is 00:09:08 hands between Apple and Open AI. Either way. but that could change and and maybe that's the end um but uh you know on the on the question of should apple um make a huge acquisition um Tim cook actually addressed it in the earnings call uh he said something like we've acquired around seven companies this year and that's companies from all walks of life not all AI oriented we're very open to MNA that accelerates our roadmap We're not stuck on a certain size of company, although the ones that we've acquired thus far this year are small in nature. And he said, like, we're acquiring one every few weeks, which is not quite seven per year.

Starting point is 00:09:52 I mean, I guess that's like one a month, but a few weeks, sure. So he's doing deals, but he's not looking at anything massive. And I think that actually makes sense. My question was, if you were the CEO of Apple and you had $100 billion burning a hole in your pocket, what are the other things that you could do with that money. Formula One team. You could buy every team and the division and every track and all the sponsorships. I made a post about this joke.

Starting point is 00:10:22 It's so much money. It's so much money. I made a post about this jokingly earlier this year. I still think it would be cool for Apple to be an F1 in the way that Red Bull is. I think that'd be great. No, no, I agree. Yeah, I think that would be great. The one thing culturally is like Apple's brand is very premium.

Starting point is 00:10:40 and very high end. And I don't know if they could handle a few losing seasons. This was the early bear case for Apple TV. I was talking to someone, a very successful Hollywood producer. And he was saying that the nature of Hollywood is like venture capital. Like it is a hits driven business. If you don't accept that you're going to have massive flops, an egg on your face and embarrassing moments,

Starting point is 00:11:09 moments, you will not make it. And just like any venture capitalist who is like, I only want to make investments where they won't blow up, you're not going to make it, right? Yeah, Mark Andreessen had a, there was a clip from an episode he did recently talking about how he lose sleep over the companies you don't invest in, not the ones you invest in and don't work. Exactly. Exactly. And so, so you have to be risk on. You have to be risk on in Hollywood as you do in venture. And so the question was like, can Apple deal with spending 50 or 100 million dollars on some show that completely flops and everyone's like this is a disaster and they've navigated really well I think that they have some had some flops but they've kind of tucked those behind the scenes whereas Netflix has started to get more kind of you know people talk trash about what was that red red notice or they did some massive movie with the

Starting point is 00:12:01 rock that kind of flopped they've done a few of these big movies that haven't done that well and and it's sort of like oh like you know they're they're not you know, God's gift to, you know, producing. But it doesn't matter because overall Netflix is doing very well. And all it takes is like one squid game to like carry the whole quarter, basically, just like in venture. Or like one, you know, you sign the friend's deal and then, or the office and people are watching that like 20 years later.

Starting point is 00:12:28 So. And apparently, so F1 has surpassed half a billion dollars in box office earnings as of last week. I mean, that's a fantastic movie. example of a of a home run but it's not like they're doing that once a quarter by any means no and john exley's in the chat shout out to john exley uh unfortunately i didn't get a chance to connect with him at our party in new york but he did attend you got to chat with him a lot of the team got to chat with him so thank you for all you do john we really appreciate you the entire team is giving you a round applause general because general of the chat you've done a ton of a ton of

Starting point is 00:13:02 a ton of work for us and we really appreciate it um anyway if you had a hundred billion dollars burning burning a hole in your pocket at Apple, what would you do? I have a bunch of crazy ideas. Go through your list. So most people would just say, hey, you're going to benefit from AI because you are the window into all technology. And it doesn't matter if it's generative video or text. Like people will be consuming it on devices. You sell devices.

Starting point is 00:13:28 You'll be fine. Just like search did not destroy Apple. It actually made Apple stronger because people search on their iPhones. So most people would just. say, hey, return it to the shareholders. Apple's already done that. They've returned over a trillion dollars to shareholders in the past 10 years. Those are kind of rough numbers, but it's basically that, which is an insane amount of money

Starting point is 00:13:47 to return to shareholders. But Samsung is worth $330 billion. They could buy the entire company lever it up with two-thirds debt, and they would just own both sides of the smart front market then. Probably extremely anti-competitive. I think Lena Khan would have a connipion fit, but funny concept, funny concept. the other idea is massively expand the retail footprint so Apple right now I was surprised by this how many retail stores do you think they they have worldwide I don't know like 599 or

Starting point is 00:14:21 601 did you look did I tell you this morning it's 535 so it's not that many it's mostly in the tier one city is there's usually only like one in every city they don't really they don't take the Starbucks strategy where they put them across the street from each other yeah but for For $100 billion, they absolutely could. $100 billion is enough to open 6,000 new Apple stores. So they would be 6,600. So they would be up around 7,000 stores, which for reference is as many subways as there are, and as many CVS's as they are, and as many 7-Elevens as there are in America.

Starting point is 00:14:57 And so everywhere you see a subway, you can see an Apple store. And I feel like this would be a big upgrade for America. I feel like if you just walked around every American city, where tier one, tier two, tier three city, you just see a beautiful sheet of glass and it's an Apple store on every corner in America. They could also acquire every firearms store in the country and turn them into Apple stores. They could do a take private of Figma. Think bigger, build faster. Figma helps design and development teams build great products together. Get started for free at Figma.com. I'm still buzzing from Thursday. It was a fantastic day. Absolutely fantastic.

Starting point is 00:15:35 Everybody that is tuning in, anybody that is tuning into the show for the first time today is going to be hearing our ideas for Apple and just thinking, these are some of the worst that we have ever heard. But they're definitely fun. Okay, so speaking of glass from the Apple stores, they could buy Corning, which makes Gorilla Glass. That's a $55 billion company. Then with the money left over, they could buy Interdigital, which owns all the patents on 5G and 6G. So they could basically patent troll everyone else in the industry. just get extremely anti-competitive. They could also, with the money that is left over,

Starting point is 00:16:08 we're still in the first, like, let's vertically integrate this company mode. They could also buy 10 rare earth or cobalt mines. So they own the supply chain there. And then they could also build four battery gigafactories and lock up the sapphire crystal supply chain that's used on the iPhone camera. So they could just completely own their entire supply chain

Starting point is 00:16:30 for $100 billion. And that's just one year, one year. And then they, you know, the proposal was do this every year. The other thing that was interesting about Tay Kim's post is if you listen to the earnings call, Tim Cook and the team were very clear that they don't even want to finance like data center development themselves. They're still working with these sort of like third party lenders to like capitalize them. And so again, Tim Cook is the king of efficiency. Yeah, he knows his business.

Starting point is 00:17:01 Should we get into some? No, I have one more. One more. So, Open AI, they act will hire Johnny Ive. They're coming out with something that's competitive. It's going to be some sleepless nights at Apple when that thing drops, right? It's going to be stressful because like maybe it doesn't go super well, but like, you know, it's a serious threat. Open AI is a serious company.

Starting point is 00:17:22 They have a lot of customers. And they got Johnny Yves, your former goat, designer, ready to drop, you know, the next. And a bunch of former Apple employees that are now at the opening up. Amazing, amazing team over it. in hardware at Open AI. So the question is like, how do you fire back with your Apple and you have 100 billion to spend? Here's what you do.

Starting point is 00:17:43 The cogs on an iPhone are less because they have a margin. So you take that $100 billion, you buy 200 million iPhones, and you send a brand new iPhone to 200 million Americans. And you're just like, oh, how much are you charging, Johnny Ive and Open AI? Well, ours is free this year. We're doing a free iPhone for the entire year. They should just do something like that

Starting point is 00:18:06 where it's like your 11th iPhone in a row. Is free? It's free. They'd probably have 200 million people with free iPhones. And they're just like, yeah, we're actually, we want to keep you in this ecosystem. We like our services revenue. We're excited to be a platform.

Starting point is 00:18:20 We're excited, we're just giving it back. We're just giving back. Can you imagine? I think that would also be extremely anti-competitive. I don't even know if there's a regulatory framework to stop that from happening. But I mean, price competition is a real thing. Like if you, if you discover that your competitor is undercapitalized and can't, can't win a capital war, you could potentially cut, cut prices so dramatically that it's like, yeah, the other phone's like, cool, but, you know, this one's free.

Starting point is 00:18:49 I guess I'm just staying in the blue bubble world. Tim Cook, next earnings call. All right, we're going to buy all of the minds we depend on and we're going to make the iPhone free. Stock just eats, like, 80%. He's like, I'm petty, I'm petty. And you know what, Johnny On, you know, I'm not going to let you win. I would rather die that let you win. Yeah, I would destroy myself.

Starting point is 00:19:13 Yeah, I've been reading a lot about cutting your nose despite your face. And I'm pretty into the strategy. Anyway, let me tell you about Vanta, automate compliance, manage risk, improve trust, continuously. Vanta's trust management platform, takes the manual work out of your security. compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program. Go talk to the purple llamas, bantan.com. Anyway, so Ben Thompson's been noodling on Apple and AI strategy.

Starting point is 00:19:44 He had a rough go because he, I think he took some time off or shifted. He shifted his posting schedule right when all the earnings dropped and there was all this crazy stuff going on. So he's just writing about Apple earnings now. but he still has some good takeaway saying, you know, even if they do, even if Apple does swoop in and buy Mistral, for example, the overall point holds, Apple isn't going to compete with OpenA.I Anthropic MetaX and Google on pursuing AI superintelligence. Like five extremely well-funded, extremely serious teams. Apple's going to go their own way, centered on their devices and their direct relationship with their customers, at least as long as Cook is in charge. Anyone that's saying that Cook needs to step aside, I think is in for a world of hurt because he's been on a generational run and he's solving the most important problem for that company, which is not the application layer in artificial intelligence, it's the supply chain and keeping the flow of iPhones coming and selling phones. Make and put the phones in the boxes. Tim, he's doing it. He's doing it. He's really, he's really, he's really underrated. He's been CEO longer than Steve Jobs was now. I hope on this 10-year CEO of Apple in history.

Starting point is 00:21:01 He better be bringing some of these AI researcher comp packages in as comps when he gets in front of the comp committee at Apple. Yeah. That is true. He should definitely be getting a bump. If he does have researchers, I mean, he has AI researchers. They are improving different functionality. I feel like maybe I'm hallucinating this, but it feels like the text to speech engine has gotten

Starting point is 00:21:25 better on my phone. I listened to a semi-analysis article with the default Apple Safari text to speech, and it was very listenable. So I think we're getting better there. Regardless, he's got to get his AI researchers graphite so they can embrace code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. So anyway, Hunter SPX is shocked at Alex Karp's comments on the Palantir earnings call. carp said the growth rate of our business has accelerated radically after years of investment on our part

Starting point is 00:22:01 and derision by some the skeptics are admittedly fewer now having been defanged and bent into a kind of submission yet we see no reason to pause to relent here so good sitrini says you can't accuse the guy of not having flare these are so good talentier ticked up over 400 billion up almost 10% in the last five days let's go so Congratulations to everyone over at Palantir. Congratulations to Eliano, who's been on the show, a friend of the show. He says he's actually in tears after Carp went on CNBC and said, just tell the haters, read them and weep.

Starting point is 00:22:38 I love it. We covered this yesterday a little bit, but I wanted to go one step deeper. Friend of the show, Marcus Milioni was posting earlier, a bunch of cell orders that he had for Palantir earlier this year. And he was feeling very, weeping, very disappointed with himself. So Palantir Technologies boosted its full year outlook after posting higher profit and revenue for the second quarter driven by continuing demand for its artificial intelligence projects. The Denver company which sells AI software to manage and analyze large amounts of data. Everyone says, what does Palantir do and sell software? It now expects revenue to be between 4.14 billion and 4.15 billion.

Starting point is 00:23:23 And what a narrow band for the year. They know what's coming. Up from the prior outlook of $3.89 billion and $3.9 billion. So the interesting thing here is that they, where is it here? I missed it. So revenue from U.S. commercial customers rose 93% to $306 million. So Carp's been talking about this for a while. Just look at us.

Starting point is 00:23:50 Like you say that we're just a government contractor. look at our commercial side of the business. Like we're doing very well there. Companies are buying talking to when they casually mentioned that they got like a nine figure contract in Japan randomly. On the corporate side?

Starting point is 00:24:08 Yeah, on the corporate side. I don't know. We've talked to a lot of Palantir people, but it's all over the place. I mean, everyone from like Airbus, like if you wanna know like what Palantir does, just the Airbus example is like the best because it's just like you're making planes.

Starting point is 00:24:21 There's a ton of different parts that go that plane you need to see the lead time the durability the testing of all those you need not just a database of what you have in stock okay we need more seat belts to get this plane out the door we need more engines we need more you know doors or whatever like you got to buy all these different things probably from uh trans die or something some some PE backed small manufacturer makes the sub components you got to buy all those components put them all together and then ship the ship the the final plane out. Well, you don't just need a database of what everything's in. You need to know how these things interact. And that's why Palantir always says like ontology. It's a layer on top of

Starting point is 00:25:02 the database. And so there's been a bunch of database companies that have grown a ton snowflake and Snowflake and Palantir. We're kind of duking it out. And now they're kind of partners and friendly. You put all your data together into a data lake and put Palantir on top of it. And so it's driving, it's all good news. for carp. Two CEOs top $1 billion in raises. Palantir CEO, Alex Carp's 2020 Equity Award, has soared in value to 14.7 billion as the company's stock grows. That was when the company first went public and he got a bunch of stock and it's grown and grown and grown as the share price has appreciated.

Starting point is 00:25:45 Or Snowflake. Stock chart looks very different. What's the market cap right now? 68 billion. Not bad. Still up 30% year to date. A little side project incubation for the folks over at Sutter Hill. It is the latest ultra-exclusive achievement for executives of big U.S. companies. The billion-dollar year, two bosses made it last year holding stock-based pay that swelled in value by at least 10 figures in a single year.

Starting point is 00:26:15 That'll buy a lot of cross-country skis and a lot of aquinas. Alex Carp clocked more than $6 billion. He could effectively corner the entire orange band. You could buy all the aquanauts. You could buy them all of them. 100%. I've actually done this before. I've asked chat GPT, find me the market cap of all the super cars.

Starting point is 00:26:36 So you take the average selling price of the F40. It doesn't work this way because once you start buying them up, they get more valuable. But if you take an F40 is like a couple million bucks, but there's only a few thousand of them, you add that up that's like $5 billion market cap. One of the biggest market caps, if you use this kind of rough terminology, is fire trucks. Because there are a million dollars each, and there's like a million of them in the United States.

Starting point is 00:27:00 Now, they're all like slightly different brands, so it's not quite the same comp. F-150s, also, huge market cap. Then, can you look into getting a fire truck for our road shows? I don't think there's enough space inside. Yeah, that's actually true. I think you want something else. But you could load up cables in all the different sides. It's like, you know, we pull out the hoses and just a massive HD-HdMI cable.

Starting point is 00:27:20 I think that's the move. So Hawk Tan grew, his pay grew by $1.15 billion at Chipmaker Broadcom. So Broadcom did very well. Only two other S&P 500 CEOs have hit that mark in recent years, according to data from a public company data provider. Cryptocurrencies Exchange, Coinbase Global Brian Armstrong in 2021 at $2.1 billion. Naturally, Elon Musk, the Tesla CEO can boast billion dollar gains in three years, including a record 43 billion in 2020. Though all are part of a pay package that the Delaware court declared invalid on Sunday, Tesla

Starting point is 00:28:00 granted Musk a new interim stock award that tentatively valued, that was tentatively valued at $23.7 billion with the promise of more this fall, barely scraped by. Scraping by. The other note on Palantir, I think this was reported on Friday. They have a new U.S. Army contract worth up to $10 billion. So this is consolidating a handful of contracts that they have into a single deal. And, yeah, so pretty significant. That's over, I believe, the next decade.

Starting point is 00:28:34 So Palantir Classic 20-year overnight success. Some interesting history and kind of strategy of how they got here. So we talked about this before, but you remember the, famous story about Alex Karp talking to his employees early in the in the in the journey of the of the company he said when you're traveling for business I want you to book a five-star hotel when you're in town visiting a potential client and Gary Tan was commenting on this other employees were saying like this we're startup we're burning money this is kind of a crazy thing what's the rationale here and can and Karp had a very contrarian take he said

Starting point is 00:29:15 that when you're doing business, you're going to meet a Fortune 500 company that you're going to be consulting with or rolling out or selling them Palantir, selling them software, you're going to be a forward-deployed engineer. They will ask you, oh, you're in town, where are you staying? It's just a natural thing that comes up during introductions. Oh, you're in town, you're in, you're in Dallas, visiting us at our HQ. We're evaluating Palantir as a potential solution provider, where are you staying? And if you say the Holiday Inn, they will assume that you're selling holiday in level software holiday in quality software but if you say i'm saying at the four seasons they will assume that you are selling four seasons level software and so Palantir had this

Starting point is 00:29:55 culture of carp has joked about like steak dinners being like not the correct way to sell the product and the product actually has to be very good but clearly from an early from from from early on Palantier focused on brand positioning and just taking travel and internet entertainment very seriously because there's going to be a lot of forward deployed engineers that are on the road a lot. You want their life to be manageable so they can go and show up and perform and they're not and they're not like gassed and exhausted from an economy flight and then a tough bet. So this was wrecking their financial stuff when they went out and they went public. The narrative was that they were a consulting company masquerading as a software company. And looking at the earnings yesterday and their margin profile, this is very clearly not consulting business.

Starting point is 00:30:48 Yeah. So when they went public, you can look up the market cap when they kind of went out early. But I believe that they were languishing in the low tens of billions. Might have even dipped down to $5 billion at some point, $7 billion market cap. The stock was not doing very well. If you bought a single share at the open, you could have paid $9.20. cents and years and years later you would have been flat yeah on that entire period yeah it was so they went out October 2nd 2020 and if you look on May 12th they they ticked over that initial

Starting point is 00:31:30 price so not a lot of people were writing it off for a long time and it still it didn't it wasn't like a fast IPO by any means right this was like took them what 15-ish years to get out. So 2020, 2021, they were in like the 40 billion, 35 billion. I think they probably dipped lower at a very, at varying points in time. But it wasn't, the stock was not ripping. And it was kind of in this, it was languishing the consulting meme was going strong.

Starting point is 00:32:02 And that was because they were spending a ton on travel and entertainment. But what's interesting is what happened during COVID. So during COVID, they couldn't travel as much, and companies didn't want forward-deployed engineers coming into their offices. They didn't, like, airlines were shut down for a long time. Everyone was working remotely. So they switched to a remote first, you know, forward-deployed engineer strategy. And so by default, during an implementation of Palantir, you would just hop on a Zoom call or hop on a team's call or whatever. And so their travel and entertainment budget like cratered, and that was really, really good for their bottom line.

Starting point is 00:32:43 And then they were able to just kind of like hold the lot. And they didn't, sure, they added it back slowly, but it kind of revealed that this actually does have software margins. This actually is more of an enterprise SaaS company than a consulting business. And it allowed them to grow very, very significantly. And so they've been on an absolute tear. And congratulations to everyone over at Palin. Well, while we're talking about earnings... Let's talk about linear.

Starting point is 00:33:09 Linear is a purpose-built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product roadmaps. That's right. Ben and the production team are going to pull up a post from highlighting something from Reddit's Q2 earnings call. If we can pull this up. Yeah. And play this video.

Starting point is 00:33:27 That's fun. Okay, let's see. Let's play a video here. Let's see. This is the hardest thing. That's why Reddit is the number one most cited domain for AI across all models. across all models per data collected by Profound. That's why Reddit is the number one.

Starting point is 00:33:41 Anyway, so I wanted to highlight this because we just partner with Profound. This is the company that I invested in earlier this year. James, CEO, has been on the show. Profound allows companies to understand and improve the way they show up in LLMs. So today, companies are using LMs. Everyone's using LLMs to research products, make business decisions. And so if you're running any type of business, whether it's consumer or enterprise focused, you've got to actually figure out where you stand in these rankings, how people are perceiving your products through the models. And Profound lets you do all of that observability.

Starting point is 00:34:23 I think the best way, the best comp for it is kind of like SEO optimization. There's a bunch of different dynamics here. But Profound is the clear leader, and we're super excited to partner with them. Let's hit the gong. Hit the gong. Fort profound. And a new TBPN sponsor. Welcome to the lineup.

Starting point is 00:34:41 Welcome to the livery. Welcome to the next drop of merch. Welcome, profound. We're happy to have you on the team. Welcome to the show. In other AI related news, open AI has announced an open source model. They said they'd never do it. Everyone's saying it was in the name.

Starting point is 00:34:59 It was in the name. How could you have doubt it? Closed AI. Closed AI. They're not open AI. They're closed AI. Everyone thought they were so clever. They said they couldn't possibly open source a model.

Starting point is 00:35:09 And they did. They did. They did it. The unthinkable. First open model in years, right? They used to have that. Was GPT1 open source? Like when, when was the last time that, so we're going to talk to Tyler about this.

Starting point is 00:35:23 I want to say it's in the studio today. Was still open source? And then they decided to close source something. It's tough that I treat you like things that I could Google and I know that you just have to search it or chat GPT it. But good luck. Get me the information on the history of open AI's open source models.

Starting point is 00:35:45 In the meantime, I will read this post from Sam Altman. GPT OSS, all lowercase. He's still in lowercase mode, although he uppercases the other sentences, but he threw in. He likes lower case. Is he sending you messages, John? I'm seeing it. I'm seeing coded messages in here.

Starting point is 00:36:04 GPTOSS is a big deal. It's a state-of-the-art open weights reasoning model with strong real-world performance, comparable to 04 Mini, that you can run locally on your own computer or phone with the smaller size. We believe this is the best and most usable open model in the world. We're excited to make this model the result of billions of dollars of research available to the world to get AI into the hands of the most people possible. Hit that soundboard again. I want to keep it going.

Starting point is 00:36:32 We believe far more good than bad will come from it. For example, GPTOSS-120B performs about as well as O3 on challenging health issues. We've worked hard to mitigate the most serious safety issues, especially around biosecurity. GPT-O-S-Models performed comparably to our frontier models on internal safety benchmarks. We believe in individual empowerment. Let's hear it for individual empowerment people. I feel empowered the way that you're reading this, John. Although we believe most people will want to use a conventional service, a convenience service like ChatGPT,

Starting point is 00:37:06 people should be able to directly control and modify their own AI when they need to. And the privacy benefits are obvious. As part of this, we are quite hopeful that this release will enable new kinds of research and the creation of new kinds of products. We expect a meaningful uptick in the rate of innovation in our field and for many more people to do important work than we're able to. before Open AI's mission is to ensure AGI that it benefits all of humanity. To that end, we're excited. I think I cut this screenshot off.

Starting point is 00:37:38 We're excited for the world to be building on an open AI stack created in the United States based on democratic values available for, I didn't screenshot the rest of that, but oh, here it is, available for free to all and for wide benefit. So I imagine that that was the voice that was in his head, as the author intended, as the author intended. Exactly. Exactly. Will DePue has some more notes here, some context. So less than one year between 01 announced, which was September of 2024. And we have an 03 level model open sourced that's runnable on consumer hardware. Wild progress. You were highlighting earlier, Sam initially had a poll. Oh, yes. Yes. Saying like, you know, should we should we, what do you want? Do you want an 03 level model or do you want something that you can run? He did both. And he did both. He did both. Wow. That was. Yeah, so we were reading that.

Starting point is 00:38:28 So it was, what, like six months ago or something, that post that you shared? Yeah, I think so. So I asked Tyler to dig this poll up. Sam Altman shared a post that it was a poll on X saying, what do you want? Do you want an 01 level model, reasoning model, a frontier model, open source? Or do you want something you can run on your phone? And it was, and it was neck and neck. And people were clicking on the phone model.

Starting point is 00:38:53 They were like, we want the phone model. And then Dylan Patel quoted it and said, Oh, you idiots, don't vote for the phone model. You can just still... Let's get a truly frontier model. Let's get a frontier model. And so Dylan Patel was very much like, like, you guys don't know what you want. Like, the phone models are available.

Starting point is 00:39:11 That will be easy. The hard thing, we got to twist open AI's arm to open source the reasoning model, the O3 level model. And Sam Oman just said, you wanted this or this. It was a false dichotomy. You get both. You get both. You get both. Yassine says, all caps.

Starting point is 00:39:26 I'm so sorry for doubting you, Sam Aldman. I'm so sorry for saying that you were the Antichrist. I didn't realize your plans were measured in centuries. I hope you forgive me for everything. I'm so glad you kept control of Open AI. I'm so sorry. Please forgive me. That's remarkable.

Starting point is 00:39:43 Never talked out on the future first ballot hall of famer, apparently. The future leader of open source AI will be very interesting to see how meta responds. Will they stay in the open source game? Also, just how important is open source? Is this a Linux scale opportunity? Is this an Android scale opportunity? Like, is this, you know, is this GitLab to GitHub? Like, what's actually the long-term play?

Starting point is 00:40:08 Certainly cool. Great for the community. We're going to see fun experiments. We're going to see interesting things done with this. I think do we want to talk about some of the ideas that we had for building on top of this open source model fine tuning I can just run through some I know there was one you didn't want to

Starting point is 00:40:25 you didn't want to share because you thought it was too too good too much alpha but what was I talking to you about Tyler what were our ideas we had one that was uh well initially we weren't sure there was going to be reasoning that's right so we were going to add fake reasoning yeah so it was going to be a model

Starting point is 00:40:40 that gaslights you into thinking it's reasoning when in fact it's not reasoning so if you pull up if you look at the actual like you know reasoning UI It's just UI, it's not, there's no actual reasoning, it's like, it's a time delay, it's a time delay, and it's a delay, and it just is thinking really hard. Let me think about that. What would a super smart person think right now? So we can actually still kind of do that because it's not a multimodal model, but we could like, you know, we just add some kind of like totally blank encoder or something for the image.

Starting point is 00:41:12 Okay. And then it's like, this is an interesting image. Let me think about what's in it. Yeah, one of the best images I've ever seen. A lot of people are saying this, this is one of the greatest images. Thank you for sharing this PNG and or JPEG with me. There's nothing about the image. It's great. I'm seeing that this image is large in file size. It's purely metadata-based analysis.

Starting point is 00:41:36 It doesn't know anything about what's going on. Like, wow, this is a tough question. I'm going to have to generate a lot of internal reasoning tokens to answer this. Test time inferences really is magical, isn't it? Anyway, back to thinking. Okay, I'm reasoning about this now. Yeah. The other obvious opportunity, you know, people have been frustrated with sycophancy with the models and models being...

Starting point is 00:41:57 Well, not me. I've been frustrated with the lack of sycicivacy. Yeah, you want more. You want more. I want more. You want the model to gas you up. But, you know, fine-tuning it to go, you know, over the top. Somebody could release the glazinator 3,000, which just tells the user, you don't just think you're goaded. You are goaded. I know this.

Starting point is 00:42:16 You know this. It's like, I'm asking you to solve IMO questions. six. Why are you talking about whether or not I'm goaded? It's like it just tells you like you got this one. The timing here. The timing here is interesting. I mean everybody's everybody's been banging the table saying where is the American open source AI or LLM leader? It was reported yesterday by the misinformation that reflection, the misinformation reported that reflection, the misinformation reported that reflection one-year-old startup we've had the CEO on before is in talks to raise one billion to develop open source models to compete with deep see meta and mistral and yeah all of the

Starting point is 00:43:02 you know the the the Chinese open source models have been on a tear quen released quen coder recently people are into quen or a new version of it that is getting good results so It's important work. We want multiple horses in the race. So one interesting thing that's kind of related to the, like, U.S. China, like, race is like, so when Deep Seek first came out, everyone was like up in arms because they said, like, it was less than $5 million to train, right? Yep. So in the model card for these models, they actually reveal, like, the GPU hours it took, which then you can, like, figure out how much it probably cost it to, you know, train. Give me the number and tell me if I need to ring the gong for them.

Starting point is 00:43:42 So, so for the big model, it was probably around, like, four. million. So just, yes, but, but the small model was like 500K, probably a little less. But that's like 10x better. The model is way better than deep seek R one. Okay. Okay. So I bring the gong. I mean, I think it's I wanted I wanted I wanted to hear 400 million at least. I was expecting nine hundred million dollars nine did they got a billion of revenue coming in every month. But isn't no, it's cool that it's spent 10 days of revenue on the open source model. I you know, no, it is very cool. So, so. So, so. So we're ringing the gong for the elegance of the training run.

Starting point is 00:44:19 Efficiency. Efficiency. Congratulations. Congratulations. Delivering a great model. Saving time and money. Putting money back in the hands of shareholders and not in the hands of open source developers, I suppose.

Starting point is 00:44:34 But yeah, I mean, do you think that is this like a pre-training scaling wall narrative? Like would you as someone who is a potential consumer of an open source, model like do you want a 400 million dollar open source model would that necessarily be better because it seems like they were able to distill it pretty well get it to the frontier not you know burn a ton of money on on training also the question is like if they're this is probably distilled from their other models that are much bigger so like you there is no world where you could just spend four million dollars and get this level model without also have done having done the GPT 4 run the GPT 4.5 run etc right yeah maybe it's also just like even if they didn't distill it they just have the

Starting point is 00:45:21 knowledge of like how they did it totally like arguably more valuable right yeah yeah yeah so like I think in terms of like open source it's either you want to go like super super cheap and super small yes they kind of did here yeah or you go super big like almost like the llama like the the heath right yeah yeah um I think it would have been really cool to see that like literally like state of the art you know level model yeah you could also try and ask claude hey build me a fit frontier open source model don't make mistakes yeah we're gonna have someone from Claude on soon um this is funny because wait you said 500k for the small model yeah probably less so that's the same amount of money that they're putting up for this

Starting point is 00:46:00 challenge the red teaming challenge have you seen this so uh to encourage researchers developers and enthusiasts, that's me, from around the world to help identify novel safety issues. This challenge has a $500,000 prize fund that will be awarded based on review from a panel of expert judges from Open AI and other leading labs. At the end of this challenge, we will publish a report in open source and evaluation data set based on the validated findings so that the wider community can immediately benefit. So if you can hack this thing, if you can get it to teach you how to develop a nuclear bomb or take over the world, you might have 500K in your pocket. Not bad. Go get some of that. That's a seed

Starting point is 00:46:42 round in 2012. Massive day for the labs. Anthropic announced a state-of-the-art coding model Claude Opus 4.1, which one ups 4.0. We are having somebody on the show from Anthropic later today, Alex Albert, to break all of that down. So I'll wait there. And then Google also announced Genie 3, a new frontier model, a new frontier for world models. Yeah, Tyler, take us through Genie 3. What is it? Where are we in the deployment of this particular technology? Let me give a little bit more context on Genie. So given a tech sprint, Genie 3 can generate dynamic worlds that you can navigate in real time at 24 frames per second, retaining consistency for a few minutes at a resolution of 720 p so i got to be up at 60 frames a second if i'm pulling a no scope

Starting point is 00:47:39 24 true this isn't this is an 824 movie this isn't a this isn't a cinema this is video gaming get it up at 120 frames i got to be on 144 hertz monitor yeah so uh google deep mind as soon as john can 360 no no scope at 60 you got a customer but for now you got a customer but i'm out keep pushing it uh yeah bring it out what is this and and and where to come from why is it important. Yeah, so I thought this was really cool. I mean, we've seen kind of like worse versions of this. It's not like a completely new paradigm of like basically, you know, real-time video that you can control. Yep. Oliver Cameron came on the show. He was at Cruise self-driving. I interviewed him years ago. He came on the show and he demoed this and the

Starting point is 00:48:24 production team was kind of freaking out because it was like this very trippy like wandering around this like kind of Elder Scrolls landscape basically. We've seen the same. Same thing with, I remember playing like a Minecraft. Yeah, Minecraft. People have figured out how to do, etched has a Minecraft MOT2 that runs very quickly on some of their hardware. Yeah, but it's just like, I mean, if you watch the videos, it's like incredible. Like it looks, I think it looks by far better.

Starting point is 00:48:48 This looks way better. Yeah, definitely. We're now in like, where like video generation was really, really crazy and then V-O-3 came out and it was like, oh, it's good. And same thing with like mid-Journey. It's definitely getting to point where like you could use this for training as like an RL thing, right? thing right because this is like kind of I mean this is how you like justify spending a huge amount on this stuff because then you can use that as like training data yeah right for agents or whatever you know robotics synthetic data generation yeah for robots okay that makes sense

Starting point is 00:49:17 what else I mean there is like the long term of like you know people do just enjoy watching AI generated videos people get joy out of looking through studio Ghibli's for a few days so like there is value just in the inherent product aside from training. So you could imagine that this becomes like a game that someone. Let's pull up some of the examples. I have them in the timeline. Yeah, yeah, yeah. Let's pull these up and try and like flip through those.

Starting point is 00:49:44 But how far are we from like the actual game mechanics when we played Oliver Cameron's one? I remember being able to move around with the arrow keys. That was cool. Next thing I wanted to do is I wanted to jump everywhere because that's like the default mechanic. I mean, anyone who's played any game with a jump button, you're jumping the entire time, you're bunny hopping. Like, this is not something you just wander around in. And so does it have a jump button? Do you know? I don't think it does right now. Wow. We're so far. We're so early. But you can, I mean, it's cool because I actually don't remember this exact one you're

Starting point is 00:50:20 talking about, but you can prompt like all sorts of stuff, right? So in the examples that we can probably pull up. Yeah. You can see them prompt in like, okay, a dragon flies in and they're in some like random yeah okay let's take a look at this here okay so it's a bunch of this looks like an after each one of these is an interactive environment generated by genie three a new frontier for world models with genie three you can use natural language to generate a variety of worlds did they make this demo for us interactively I wanted to take the horse off the off the ski jump so we're looking through a helicopter Yeah, it's for sure photo reel.

Starting point is 00:51:00 Like, this is, this is good enough. Gene3 has real-time interactivity, meaning that the environment reacts to your movements and actions. You're not walking through a pre-built simulation. Everything you see here is being generated live as you explore it. Jump, jump, jump, press space bar. 360, no, let's go. Hey, 360.

Starting point is 00:51:19 We just got a 360. World memory even carries over into your actions. This is, that's AI? That's wild. Okay. I'm painting on this wall, my actions persist. Whoa, okay, that's pretty good. That's way less hallucinatory.

Starting point is 00:51:35 But when I look back, and it's consistent. So it remembers that. Oh, that's big. Yeah, that's huge. We haven't seen that. Yeah, because when we were walking around in the other world, we would like turn around and they would just be like a cave and then you do a 360 and then all of a sudden it's like,

Starting point is 00:51:48 it's like a church or something. Horses. There's a dragon. Yeah, that dragon looks pretty good. you can use genie to explore real world physics and movement I wonder how expensive this is this will probably be extremely gated I'll have to beg Logan

Starting point is 00:52:05 to get me access oh there we go that's a job that's really oh okay that's really cool and entertainment yeah and that's just the beginning yeah worlds can help with embodied research training robotic agents before working in the real world okay give me a top down simulation of World War I

Starting point is 00:52:24 I want to play parts of iron Now Give me a spreadsheet I want to play Stalaris or Eve online Think about some of the use cases here Spreadsheets in space Some of the use cases here

Starting point is 00:52:37 Are insane All right we can pause it now You can imagine a world in the future Where you give Jeannie some images of you Like with family growing up when you were five And you could just like be

Starting point is 00:52:51 Have a third Like you could just like very trippy generate like a synthetic memory like this is where we're headed where people are going to be having to kind of simultaneously hold their real memories and these sort of like simulated this is wow it's just like i put on my VR head so it's just like christmas and oh super VR sick i'm throwing up everywhere just like when i was a four-year-old and they ate too much candy on christmas it's very realistic i think this would be really cool for for llama to for meta to do like some kind of similar thing that you can run on to yeah what do you think the

Starting point is 00:53:23 training data set for this is do you think this is YouTube gated because it's got to be YouTube and it's also probably just like video games I mean you can see so if you look at the old this is Genie 3 if you look at the first papers it's very clearly like okay that looks exactly like you know GTA 5 oh really or in the first one yeah it's like some kind of very simple like 2d game that you can tell like okay that's a video game that they either built or found somewhere they trained on yeah Yeah, I feel like the pulling from the different video games be cool. I wonder if you run into IP because you're basically like distilling GTA into a model.

Starting point is 00:54:01 Yeah. Probably not okay, but you blend them all together. You create something new. That's probably transformative and fair use. But I keep wondering, I was running the numbers and I think YouTube has like 20 xabytes of data, which is 20 million gigabytes or something. or 20 million terabytes or something like that it's like it's so much that you can't exfiltrate it you can't put it in a suitcase of hard drives like it is it is just the storage is like a data center of its own like as opposed to like the common crawl like the all the web

Starting point is 00:54:39 text is like it's like you can put it in a server rack like it's not that much data and same thing with like some of those image data sets and i always wonder like does google have like a permanent advantage here or will we see the other labs catch up on this pretty quickly like opening i seem to have catch caught up pretty quickly in image generation mid journey's doing great there but a lot of the images are out on the open web whereas a lot of videos are locked in youtube and like if you can't get access to if scale really matters there google has like a serious serious yeah i mean they have soar which is like it's kind of very slow like the

Starting point is 00:55:17 architecture is definitely different than what you've seen some from i don't even care about the of SORA. I care about the fidelity. So SORA, the latest SORA feels like V-O-2 and V-O-3 feels like a full step. I've put the same prompt in both and Sora is like way more hallucinatory. Like it's way crazier. V-O-3 still hallucinates and does like crazy things where like you'll be watching a car drive forward and then all of a sudden it flips around. It looks like the car's driving backwards like it gets confused but just the visual fidelity is really, really high. You've done that in real life. Yeah, yeah, yeah, flip, flip the car around. Anyway, get on Numeral HQ, sales tax on autopilot.

Starting point is 00:55:54 Spend less than five minutes per month on sales tax compliance, numeralhq.com. Anyway, we have a post here from Clousseau. Clousseau, Investments. How do you not know how to pronounce Cloussau? Do you know Inspector Clouseau? No. Oh, lore. Is he French?

Starting point is 00:56:12 It's, actually, I'm going to blank and I'm going to look really embarrassing now because I was trying to mock you. Fictional character, yeah. In the Pink Panther series. Pink Panther, that's right, yeah. Movie? Is that a movie? It has been adapted into a movie. It was originally, I think, an animated show.

Starting point is 00:56:27 Okay, okay. So not, not my... You don't know what the Pink Panther themes are? Dunna, da, da, da, da, da, da, da, da, da, da, da, da, the guys, no. It's coming back. Yeah, yeah. Cluceau, investment says, I haven't done it yet, but I really want a short Uber. In New York City, there's a taxi app called Empower, which charges drivers a flat feet in exchange takes 0% of the ride costs, all it goes to the driver.

Starting point is 00:56:48 If you're in NYC, I encourage you to try. try it. I've been using it for two weeks now, and every ride is 30% cheaper than Lyft and 40% cheaper than Uber. LGA to Manhattan is around $25, sometimes 50 to 75, depending on Uber or Lyft. I think Uber should be in the cash generation phase, but they somehow flush the $25 to $30 they make a ride doing literally nothing, down the drain, bold statement. There will always be a market for Uber because some people value their time at 1,000 an hour, but for most people like me, waiting two minutes instead of one to save $30 is worth it. I still do not understand. understand what the engineers at Uber, PayPal, et cetera, do because it seems like the marginal

Starting point is 00:57:24 improvements they make are not worth their cost. Anyways, maybe I can sell a call on Uber or something because despite Uber and Lyft using lobbyists and dirty tricks to try to stifle competition, eventually instead of pocketing $30 from a $65 and giving the cab driver 35, someone like Empower will catch on and charge 40 and give it all to the drive, give it all to the drive, the driver and Uber. Anyways, typo. But I think the interesting thing here is like I can easily see something like Empower working in New York City. Yeah, high density environments where there's a lot of taxi cabs.

Starting point is 00:58:00 I just think in the, I've never seen a taxi cab 10 square miles around my house once. And the question is like even if the model works, if they're not taking a cut, then they don't have money to invest in onboarding both sides of the two-sided marketplace and so the question of like why did uber and lift burn so much money well it's because they were running insane amounts of ads convincing everyone to be an uber and lift driver yeah and so they created they brought all this liquidity to the market and and new york cities has had has had a few of these uh competitors there was another one for a while there was one that was owned by the taxi there's been a few some of the major and yeah i mean it's very clear that like certain markets are going to have you know different ways to slice it

Starting point is 00:58:48 You go to some markets and I mean, when we were, we were, I think we were in New York City, right? And Uber had clearly lost some fight with JFK because it was like, oh, if you want to take an Uber, just like get in a taxi cab, drive 10 miles and that's the Uber pickup zone. And it's like, what? Like the Uber used to just come directly to the exit and act like a normal person. But same thing with LAX. Yeah, LAX is LAX. You have to call it black. Which I guess makes sense because it was really congested and it was kind of crazy and it was like actually.

Starting point is 00:59:18 probably net worse for everyone. I think the bigger point here is just what is, why is the company not generating obscene amounts of cash when their margins feel like they should be able to produce? We're going to be having David Risher from Lyft and CEO of Lyft on, I think later this week post earnings. A bunch of questions for him around autonomous vehicles and we can maybe bring up this post as well.

Starting point is 00:59:47 We'll see. Yeah, see the rebuttal. Well, let's tell you about Finn AI, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bakeoffs, number one ranking on G2. That's right. Go to Finn.aI to get started. Hey, Kim has a great post here from Jeffreys. Apparently, this looks like it was in some deck from Jeffries.

Starting point is 01:00:08 This is hilarious. Like memes are, I've seen memes in VC decks. Like, oh, we're doing a quarterly update on the market and somebody throws a meme in there. Jeffreys is a very serious investment bank, and they're throwing an AI-generated image. It says a lot. You see the source? Source co-pilot. You know what that means?

Starting point is 01:00:27 So they made it? The AI image generation they used is from Microsoft Copilot. Everyone thinks, oh, everyone uses ChatGPT. Not Jeffries. They use Copilot because this is an Excel shop. That's right. Hands off the mouse when you're prompting and copilot to be a Jeffries Associate generating this. but it's a funny meme because Azure and GCP are dancing.

Starting point is 01:00:49 Meanwhile, AWS is a sad puppy in the corner. You know, we talked about this with AWS, like sort of lagging, not having a strong, you know, horse in the AI race. Google obviously has a fantastic foundation model lab, Azure, obviously is the Open AI bet and is growing like crazy through the Adobe. Of course, Amazon has, has Anthropic. They do, yeah. And the work they're doing with TPU there.

Starting point is 01:01:15 Somebody was saying that, like, Traneum is underperforming or people don't like Traneum as much. They prefer just give me a ton of a ton of Nvidia GPUs. But, you know, who knows, never count out the goat, the man who invented the cloud, the cloud cowboy, Andy Jassy. The man himself. I mean, truly in the age of, like, AWS being the most important driver for Amazon as a whole, like the perfect person to run the business at Andy Jassy, right? Because he created it. So they're in a pretty good spot. We have a post here from Joe Wisenthal, flying first class on my flight out of New York City.

Starting point is 01:01:48 I was a little bit surprised here. I expected him. I expected Joe to be flying private. He says, everyone in the front is solo, quiet, and isolated. I look back to the rest of the plane. People are joyously traveling with friends and family, sharing humor and adventure. Yeah. It was just an interesting observation.

Starting point is 01:02:03 Well, I mean, I understand why people in the front are solo, quiet and isolated because first class flights have become extremely draconian yeah and you really have terrible we we should share our experience so we we flew a mixture of first class and an economy to New York City with with our lovely team and crew and Jordy were jordy and I were up in first class and were served we were flying should we name yeah we're gonna name him we're gonna name we're flying we're flying jet blue mint which historically I've had great experiences with mint over the years David Sanger was singing their praises that it was the first-class experience he's ever enjoyed and said it was fantastic but we had

Starting point is 01:02:47 quite it's been fantastic but this was different experience this was devastating let's let's run through our problems so the seat was comfortable lay flat it was great you didn't think it was comfortable I thought it was great the fall off is real everything about the experience is degraded over the last couple of years you know the worst thing about the lay flat seats this is such a me problem but they're clearly designed they're like they're like 99.9% of people will be able to lay down completely flat here and the seat is six foot six so I'm two inches short and so I have to curl up in a little ball exactly like a child yes well it gets worse yes that was just the

Starting point is 01:03:26 beginning of our nightmare I ordered steak yes and I wasn't hungry yes so of course as soon as the flight attendant left I got up and I walked the steak dinner back and I gave it to Michael and Scott. And then I went back to my seat. And I was just relaxing. And the flight attendant came up to me in a little bit later and said, would you like dessert? We're serving a gelato, I think it was. And I said, I would love gelato. Thank you. And the flight attendant went back to the front. I ran to the back and I started handing the gelato to Michael. And a hand jumped into frame and grabbed the gelato. Grab the gelato out of my hands and said, you cannot do it. You cannot do. that. And of course, there's a rule that says you can't pass food between

Starting point is 01:04:16 cabins, but I was just shocked because I was shocked. Once I mean, possession's nine-tenths of the law. Once I take possession of the stake, it's mine to do what I want with. I think I should be able to distribute the steak evenly amongst the entire first-class cabin. I should be able to auction it off. It's mine. I should be able to resell it in a secondary market. Whatever I want to do with that should be a stock expert. Either you gave it to me. Yes, yes, this is what we're going to do. We're going to start. We're going to vibe code an app. that allows you to sell first-class meals to economy customers, and it runs on the JetBlue Wi-Fi.

Starting point is 01:04:46 Okay, so credit to the flight attendant. Yes. It could be annoying if I'm distributing the plates and the forks and the things like that around the plane. It's annoying. Maybe it's frustrating to the other clientele. But I was more on your side. So anyways, I brought the gelato back to the front. I gave it to you.

Starting point is 01:05:08 You ate it. You enjoyed it. Yeah, it was great. But then after that, we looked, we did a quick deep dive on JetBlue. And I got very concerned because JetBlue... Nothing more shocking than... So the real shocker is... Liding in a metal tube at 30,000 feet and realizing you're flying a penny stock.

Starting point is 01:05:27 Basically. So JetBlue is now trading at... What's the ratio between just like... JetBlue and perplexity? Is it bigger than perplexity? Because I feel like there are over 10 times smaller than perplexity. They're less than one-tenth perplexity. Oh, okay.

Starting point is 01:05:45 Yes. Okay. And their entire market cap is less than Miramiradi's seed round. Wow. And so usually if I was going to get in a tube, a metal tube. Yeah. And fly thousands of miles. I would trust Mira for sure.

Starting point is 01:05:58 I would, you know, I'm starting to think, you know, optimize for market cap a little bit more on the provider. But yeah. Anyways, Joanna, CEO, welcome to come on any time. Get down to the DBPA and all the gentlemen, defend your first class policies. I was talking to the flight attendant and I said, I'd like to speak to the manager. I'd like to debate the manager because I don't think, I'd like to debate the manager. You don't want to speak to the manager. You want to debate the manager because they have rules.

Starting point is 01:06:32 They're going to pull out some rule book. I want to go a level deeper. I want to go from first principles. Why do those rules exist? I was thinking, you know that that company pipe dream? Yep. They make tubes that run underground that you can transport goods. I was thinking if you could create some type of advanced straw that you could run from first class, put it. Run it on the side and then run it back like telescopically.

Starting point is 01:06:54 Yes. Like back to your boys in the back and then just feed them and use like high pressure air to feed them little bites of steak. Yes, yes. And so you could do this. Yes. You could do this without anyone, potentially anyone, knowing about it. Yeah. Passing back scraps to your boys is like the, it's so American.

Starting point is 01:07:13 I was deeply offended. And then it got worse because the flight attendant kept bringing different trays of snacks. And I remember when they brought the one tray of snacks? They're like, do you want any of these? This was after the, after the steak debacle. And we start taking them and we're clearly taking more and more than we need. really just give us the entire try and i asked i asked specifically i was like can i bring these back to my friends and she said technically yes because they were for the whole cabin these stacks are

Starting point is 01:07:44 but then less than 10 minutes later they brought some nuts yes that were that looked very nice yes and those you could you cannot pass the nuts back and you can pass the chips back anyways very very frustrating yeah it was it was brutal it was brutal anyway We had some fun. Ben definitely said at one point, you know, we're flying with like 10 people. Shouldn't we just, shouldn't we just charter a jet? And he made a good point. Yeah, I think we'll have to.

Starting point is 01:08:13 Well, you will have to get on Adio. Customer Relationship Magic. Adio is the AI Native Suram that builds scales and grows your company to the next level. You get started for free at Adio. Kevin Kwok has a screenshot from LinkedIn. This is amazing. He braved LinkedIn to bring us this. He says, this is the funniest LinkedIn title.

Starting point is 01:08:31 from now on people should only use LinkedIn like this. And Peter Sellis over at Discord in the title of his LinkedIn that says, I have full purchasing authority over Discord's extremely large and lucrative cloud contracts, and I am presently leading their renegotiation. Basically putting up a billboard. Just getting exactly what you want. I want to talk to the most senior person possible at every hyperscaler. Take me seriously. Great.

Starting point is 01:08:59 his username on LinkedIn is disgruntled and his title if you go to the experience section is personality hire this guy's good sense of you prior to this he was vice president president of product at snap so good stuff university of Chicago come on the show Peter we'll do a live he's connected to him Orrin Hoffman's connected to him

Starting point is 01:09:23 Orrin's been on the show a couple times to do a live auction yeah with the hyperscalers And you should get on public.com, investing for those that take it seriously. Multi-asset investing, industry-leading yields, trusted by millions. Is Discord out yet? No. They're about to go public, right? That seems to be the case.

Starting point is 01:09:40 I think that's the story. I haven't been following too close, but a big fan of Jason Citroved. Yeah, I know Delian was saying like it was the wrong move. But regardless, love Jason and what he's built. Fantastic. One of the coolest founder stories went to a college for like video game design, I believe, started an app, sold that, and then was building a video game, built a League of Legends for your phone, like a MoBA, and took that to TechCrunch Disrupt and was demoing it, was just like super into the gaming world,

Starting point is 01:10:09 eventually got lucky with Discord and found the correct product markets that scaled to the moon. Put the KPI's in the orbit. The building games to building dominant messaging platforms pipeline. Undefeated. Slack, Discord. Paracletes in the chat says, what kind of country is this? even pass back little stakes to our boys. I know. I agree. He also said that I love Adia. Thank you. Thank you. Welcome to the same way. Good to have you here. Good to have you. Let's talk about Scott Wu. There was a report about cognition. He is replying or kind of sub-tweeting the coverage. Basically 30 out of the 200 people that were acquired from windsurf got laid off. And then the rest got a buyout offer. If you're not interested in staying on the boat, you were on a go-ship.

Starting point is 01:10:57 you're on the Titanic. No, not the Titanic. You're on the, you're on the, you're on the Carnival. Carnival Cruz for cracked IMO. It's a destroyer. Yeah. You're on a battleship. You're on a battleship and everyone's got to be pulling in the same direction. Everyone's got to be hoisting the sails on this galleon. And so Scott Wu says people have asked about our culture and recent employee communications cognition has an extremely performance culture. And we're up front about this. This is Scott Wu's. This is my Scott Wu impression. We are routinely at the office through the weekend and do some of our best work late into the night. Many of us literally live where we work.

Starting point is 01:11:34 That's true. They have a house in Silicon Valley somewhere, and a bunch of them live there. We know that people who joined windsurf didn't expect to join cognition, and we're proud of how we work. We understand it's not for everyone. We gave our team the opportunity to decide. We offered for all employees who joined via acquisition to opt into our culture with full clarity on what that entails. We know that we will lose some strong talent in doing this, but we truly believe the level of intensity this moment demands from us is unprecedented. While not everyone

Starting point is 01:12:08 is looking for a culture like ours, everyone deserves respect and appreciation for their work, regardless of their decision. We accelerated and cashed out all four years of equity for everyone in Windsurf, even for the 85% of employees who didn't hit their one-year cliff. And for those who opt out. We're providing an additional nine months of pay on top of this. This is just good guy, Scott. He's just doing everything right. He's setting the bar high. He's letting people know, hey, we take this really seriously. We just don't want there to be a culture clash. Look, we took care of you. If you got, if you, if you, if you, if you just went from almost acquisition from open AI, ended up on the go ship through the Google deal, ended up

Starting point is 01:12:49 cognition got all your got got the full upside from the deal yeah even if you had invested and then now you're at cognition and realize i don't want to work as hard as everyone else here and you get the opportunity you get nine months of pay to just walk away yeah that person is there's there's going to be some people in that group that are totally i mean it's not it's not like the norm but there are definitely people who are like i was actually excited to rest invest i was i was actually excited to hit the ping pong people you know i wanted to just be on the beanbag chair for a while and I wanted to kind of cruise and and have like a normal nine to five like there are people who like that's what they maybe they maybe they maybe they're

Starting point is 01:13:29 this was their third startup they're already got some liquidity they're doing great and they have a family and they're you know they they want to be a little bit more flexible take more time off and like that's the beauty of you know the american labor market is you can kind of choose and pick your own adventure but that you know Scott wants to create a cohesive team a cohesive culture he doesn't want this idea. It's very tough when, when half the team is staying up really late grinding and they love it. And then the other half is like, I'm dipping out early. It's, I'm just awkward for everyone. It's just awkward for everyone. So he's just saying, hey, like, you're welcome to stay on the team. But you got to buy in or you got to bounce and go, you know,

Starting point is 01:14:08 take your, take your liquidity from the accelerated investing you got. Take the nine months of extra pay and go find something that actually brings you joy. Go do your life's work. So I think this is well managed. It seems like the comms leaked prior to this. I don't know. I don't know. Would it have been better if he posted this beforehand and just kind of own the narrative? Maybe that would be the move because you kind of know that people will frame this poorly.

Starting point is 01:14:32 And so you get out and say, hey, I'm going founder mode. I'm offering this buyout offer because there are plenty of companies that have done these buyout offers before. I believe that there's one major company. I forget which one that has a standing offer at 24-7 every single day. Like, it doesn't matter if you just. joined. I mean, of course you can't just like join and leave immediately and get the buyout offer. But basically like you, if you hit a cliff and they're like, we'll re-up you, we'll keep you incentivized, we're going to keep paying you. But like the buyout offer is always there for you

Starting point is 01:15:00 to take some cash, go figure out what's next, find a better fit because we just don't want people who are just like hanging on to this job because they are like just hesitant about going somewhere else when they should just figure out the next thing. Yeah. Anyway, you don't want to be losing sleep get a pot five ultra go to eight sleep.com five year warranty 30 night rest of trial free returns free shipping i got a great night sleep i slept for eight hours last night and i think it's showing didn't you say eight and a half something like that you put up some crazy numbers i got a 95 last month i've been down in the dumps i had a 45 Sunday night no you're you're back in the game the energy's coming through and you can feel it in the intro your sleep is great sleep for you can tell my

Starting point is 01:15:43 inversely correlated with your voice. Yeah. The more sleep you get, the more hoarse you will get from screaming into the microphone. You can tell my sleep score by the, by the intro. Yes, exactly. Scookes says after they put GLP-1s in the water, being obese will be back in vogue, a sign of indomitable vitality and enormous wealth. This is not obese.

Starting point is 01:16:02 This man is not obese. He is prosperous, prosperous, and prosperity should be celebrated. Yep. Love the cane, too. It's a wild build to run. Our next move, bring back. Cains. Cains, smart canes, it's going to happen.

Starting point is 01:16:16 A lot of battery life in a cane. Plenty room for a ton of batteries. A lot that you can do with a cane on device inference, GPTOSS. Run it on the cane. Run it on the cane. That's really the ultimate status. Does Nvidia make a narrow 4090, like a GPU that could be put in? Maybe we just need to string together a bunch of, a bunch of iPhone chips.

Starting point is 01:16:39 I really think building a smart cane might be a challenge. I don't know if you can, I mean, I guess the chip in the iPhone is probably small enough to fit in the cane, but you'd have to figure, it might be, I might have a thick part to the cane. Well, yeah, you could make a very wide cane, right? Almost like an elephant's, you know, leg. That seems like not the vision I'm going for with the cane. I want an aesthetic cane. I want a cane that, that it doesn't jump out of anyone. You doubt, well. Doesn't jump out of anyone. We'll put Tyler on it. Tyler, just try to make one by the end of the show.

Starting point is 01:17:10 Using open source LLMs, please. Thank you. And then when you launch the cane, buy a billboard for it on adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology, out of home expertise, and data to enable efficient, zeemless ad buying across the globe. One of our billboards was taken.

Starting point is 01:17:30 One of our billboards was taken down. Taken down. Was that by a, after a good run? By a state actor, do we think? Probably. Probably. Some type of, yeah, nation state hacker group. Or was it a false flag?

Starting point is 01:17:44 You'll never know. Zach Pogrob noticed that it had been taken down. It was very disappointed. So working on getting more up, Zach, we're on it. Maybe SF next time. Maybe, I don't know where else we should go. Probably Santrape. That makes sense for a billboard.

Starting point is 01:18:02 Abilene. Abilene would be good. Abilene would actually be great. Abilene would be the way. audience of one i just want i just want chase and sam to see it basically audience in two just there's also a lot of people in abilene that are just getting the billboard in abalone should just say it shouldn't even say listen to tv you it should say come on tbpn call into tbpn call in to tbpn we'd love to chat with you if we put that up i think

Starting point is 01:18:30 we get i think we get him okay he'll of course come on the show welcome to data center USA yes yes congratulations saga and jetty says i can't help but love every iteration of the moon swatch yes what do you think of this collaboration between omega and swatch is that the same company does swatch group own omega omega omega i always listen to the james bond pronunciation the daniel crag he says omega omega does swatch group own anyway looks nice history of the moon swatch watch The moon watch was, it was an omega, it was worn by the astronauts. Same company. Make same company.

Starting point is 01:19:08 Same company, yeah. Very big, very big company. So if you're not familiar with the moon watch, there was a knockout, drag out fight. It was like the AI talent wars all over again in the 1960s to decide which company would send the watch to the moon on the wrist of the astronauts. Everyone expected it to be Rolex. Omega won the contract. the Omega Moon Watch went to space, went to the moon, and came back and now is a celebrated timepiece. The ones that went to the moon are obviously in museums, and the models from that

Starting point is 01:19:41 year traded a very high premium, but they issue new moon watches regularly. And the Moon's watch is something that's a little bit more, I think, affordable, certainly more rugged and has a nice fabric strap. We'll release Saturday, August 9th, and it's priced at $400. Oh, okay. And if If you're looking for your own watch, go to getbezzle.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch you can get an Omega. You can get something worn by Mark Andresen. He's an Omega guy.

Starting point is 01:20:14 Yeah, we clock that. We clock that early. Came out with an interview. We were expecting. What's on the wrist? Yeah, we were expecting a graph diamond hallucination. Maybe four of them, ideally. But, you know, he went with the budget option.

Starting point is 01:20:27 Yeah. But we'll get him. He's coming on the show, I believe tomorrow, and we will pitch him on picking up a couple graph diamonds hallucinations with the pennies and his couch cushions. He's got a lot of real estate. Everybody's got a lot of real estate.

Starting point is 01:20:39 A lot of people, I don't know what's up with people just wearing one watch, especially allocators. Exactly. His caliber, right? Why stop at one? You've seen a couple people that wear a watch and then the whoop band or a watch and then an Apple watch or something, but why not for Daytonas?

Starting point is 01:20:56 Anyway, something there. Congratulations to Joe Weisdenthal, again on the absolute run, odd lots is the number one business podcast in the world and the number six podcast in the world after cold-blooded from ABC News and crime junkie and the Joe Rogan experience is sitting at number three. Mick unplugged leadership because growth, which I'm not familiar with, is number four. And the daily from the New York Times is at five. And to be clear, this is not because we are our episodes of Odd Lots release yesterday. It is because they got a profile, a glowing profile in the New York

Starting point is 01:21:35 Times on Sunday. Yes. They're on a generational run. We love to see it. Yeah, and Joe said the business category of the Apple charts is very funny. It is funny because money rehab, Andy Frizzella, real AF, like a lot of, like I think Jock Willink is in the business category and it's very different than the Odd Lots stuff. Like Odd Lots is like, let's talk to an expert on the grain market. I'm like, let's see what's going on with the yield curve. Yeah. And it's very much listened to by, by hedge fund folks and capital allocators. And a lot of these other podcasts are listened to more by lifestyle entrepreneurs and small business folks.

Starting point is 01:22:16 And they, and obviously that's a much larger audience, much larger addressable audience, but it's good to see odd lots on an absolute tear. And Joe says, okay, going to stop with self-congratulations, but fun to be number one for what will be a brief moment, surreal week. also one last thing. If anyone knows how I can parlay my 15 minutes into throwing out the first pitch at a cyclone game. I have no idea what the cyclones is. Is that some sort of, is that sports of some sort?

Starting point is 01:22:43 It's some, I've never heard of this. High A affiliate, the Brooklyn Cyclones. Okay. High A affiliate of the New York Mets. This is, so this is baseball? Yeah. And that's the one with where you throw the ball and then you hit it with the-

Starting point is 01:22:56 Is this like a feeder team? This is the one where you throw the ball and you hit it with the best. that and there's like gloves too, right? Well, good luck to Joe throwing out the first pitch. That would be great to see. Good content. Nikita says things that will cause a user to churn.

Starting point is 01:23:12 One, friends leave, two, product stops growing and becomes culturally irrelevant. 998 feed has a bug where it flashes. 99 bookmarks are not searchable. You have to imagine Nikita's DMs are potentially gnarlier than Elon's at the moment. of thousands of his mutuals and friends, messaging him every possible bug in the app.

Starting point is 01:23:35 I know we would do the same to Jacoby before he left. I mean, I was just talking about this. Like, we don't use the bookmarks feature. We use the shared groups feature to kind of track posts that we want to share on the show. And I was like, oh, I wish I could search it across all of these. But I was like, I'm literally the only person that wants that. Like, I'm the only person whose entire job and career

Starting point is 01:23:56 depends on this one niche feature. And so it's not even worth requesting. I'll just figure out a workaround, hopefully scrape it out of there and then make that searchable or something because I can work on a workaround. But yeah, fortunately, friends have not left and X continues to be culturally relevant.

Starting point is 01:24:15 It's where news breaks. And we saw that on full display with the Sohan Parique saga. The entire thing played out on X. Started with a post, wound up with everyone else chiming in on various posts, kind of ended with like us interview him live on a stream on x it was very cool all within the ex ecosystem you know stuff stuff still happens elsewhere but in terms of like where the tech conversation is happening it's entirely

Starting point is 01:24:42 it's entirely there's no there's no even close second now i do think it's interesting to see i want to get better at understanding like what what is the current thing on instagram today and where what is the real community that is formed on very other platforms that are adjacent because I know some people that have grown accounts and when I was big on YouTube and really focused on YouTube I would notice things like we were talking to Samir yesterday about like different metas that develop and different themes and you you sometimes these break containment but a lot of times it's just just a story that that happens within

Starting point is 01:25:23 the YouTube ecosystem somebody posts a video and there's a reaction to that video and there's a whole cycle of news that happens within the YouTube ecosystem. X still feels you know if you're generally interested in tech yeah it feels like a shared experience totally whereas if you're interested in tech and you're on Instagram yep it doesn't feel like you're you have any feed that feels at all similar to even another friend that's like loosely interested in tech yeah I'm trying to think on YouTube the big the big discourse is always it's always about YouTube like Colin Samir really are at the center of the of the discourse on YouTube creator industrial complex yeah and I think a lot of

Starting point is 01:26:04 that has to do with the fact that on YouTube you have to have a YouTube account and you have to publish a YouTube video to have a voice whatsoever yeah like anyone can show up on X and type out 280 characters go viral and be the main character be the current thing start a conversation engage with that conversation but the bar on YouTube for having a voice like the comments section just doesn't rise to the same level as like a reaction video and so when when like when mr beast is embroiled in controversy there will be other YouTubers like there was this the mr. Beastification of YouTube this idea that Mr. Beast had created this meta and then other YouTubers are copying it and it was all this like yelling at the camera and fast-paced editing and lots of like in your face high

Starting point is 01:26:49 saturation graphics popping up all this different stuff going on and and that entire that entire news cycle played out on YouTube and it was because there were commentary channels and cultural and analysis channels that replied essentially but instead of it being like a quote tweet dunk like the equivalent is like responding viral video another viral video responding to the analysis so someone put out so mr. beast was on a tear and then other people were copying it and then somebody put out the mr. beastification of YouTube which went viral and then other people would respond to the mr. beastification is overstated or it's not that big of a deal or it's even worse than you thought and so people will take the

Starting point is 01:27:30 conversation in different ways but it moves much slower because if you're like yeah i want to do a reaction video okay see you in a week right yeah anyway find your happy place find your happy place book a wander with inspiring views hotel great amenities dreamy beds top tier cleaning in 24-7 concier service it's a vacation home but better is that gong new this gong is relatively new a couple months since our new studio uh we do have another new gong over there that we haven't uh so we haven't actually showed anyone. We haven't hit on air yet. And we got a completely new gong

Starting point is 01:28:02 for the Figma IPO and we had Dylan Field hit it on the day of his IPO. It's a game hit, it's a game hit IPO gong. It will be retired. It will hang in the rafters of the TBPN Ultrodome. And eventually this, eventually this dome will be filled with gongs from historic technology moments. And we're gonna give the Computer History Museum

Starting point is 01:28:23 a run for their money. They might have Cometre 64 or whatever. They have the original like touring machine. It's like this, it's this computer that you crank. It's like the craziest thing and it can do calculations. And it's like, it's literally no electronics and it's a computer. It's like, it's all just like, basically like marbles flown around. Not really.

Starting point is 01:28:42 Dream rig. Yeah, dream rig. Imagine posting on that. But we're going to give them a run for our money with our gong collection. Anyway, what's up with? Labs has a new launch today. Big news. Can we pull this video up somehow?

Starting point is 01:28:56 Yeah, I want to listen to the 11 labs music. They're saying 11 music is here created with leading labels, publishers, and artists. It lets you craft studio quality tracks with control over genre, style, and language using just text. Built on license catalogs, every song you create is cleared for commercial use. That is pretty insane. I had an eye-opening moment probably two years ago at this point. One of, I enjoy the music of the rapper Gunna. Sure.

Starting point is 01:29:24 And somebody made an entire. out a gunna album that was entirely AI generated was it good and it was solid it wasn't necessarily I listened through it a couple times you could if you paid it if you were not paying attention to it it sounded just like a regular gunna song album did any of those was it on Spotify uh I think they published on Spotify but I did any of those did any of those songs migrate over into a playlist for me you're saying uh no but I That's what I would consider crossing the chasm would be like it's in your liked feed or it's in your it's in your Spotify's in an interesting place here because your one way to piss off artists is allow people to generate AI versions of the same artists and the artists are losing revenue and I knew a team a friend that was working on on basically Spotify for just AI generated content they ultimately pivoted because they didn't feel like they wanted to withstand decades of lawsuits.

Starting point is 01:30:25 But it sounds like 11 labs has found a solution here. Let's play this video. Yeah, let's play the video. Let's see what they have to say. Hopefully we don't get copyrights, right. I think we should not, because this is the first time this music has existed. Okay, so we got some orchestral music. It's pretty epic.

Starting point is 01:30:47 I told the founder to make us a W.W.E. theme song, a really aggressive over the song. top track for us this is this is not quite our vibe but it's nice it's nice okay this is definitely past the uncanny valley like this could just be a real song this is hit no this it I'm digging it okay let's see did they do any gunna okay okay you got some fast-paced little But I'm getting into it. What else we got? Their customers must just love, like, falling asleep.

Starting point is 01:31:35 Their customers must just love, like, falling asleep. Reggae? This is pretty cool. Give me some heavy metal. Okay, some hip-hop. chest feel the pulse in every curse pressure build you know much it's pretty sick i like this one this is epic i want this song i'm sold now oh this is good it's hit it's hit that's great get me that track i want i i i want to get me that track this is a good time to talk about so last week the

Starting point is 01:32:13 panama playlist yeah came out john and i were featured in doxed uh we were targeted by the panama playlist. If you go to Panama Playlist.com, they basically scraped a bunch of people's Spotify's without them knowing and then published their playlist. I was wondering, I was looking at this playlist and I didn't immediately have a memory of it. The playlist was called No Cap. I was like, why would I name a playlist that? And it took me a second to come back to me. It's because I was collecting songs, rap songs with obscure references to venture capital and investing as one does as one does and so if you look at the first song god clearly for a party round drop that never happened never happened never happened but first song god did

Starting point is 01:33:02 DJ Caled or one of the other rappers on the track says I'm at the cap table what the splits is not that cap table boy we live this and then you have okay okay Kanye West price went up Angel Investor. And anyway, a bunch of other random references, but it's all making sense now. What else we got, John? We got GPT5 news on Polymarket. GPT5 released by August 10th is now sitting at 92%. It was sitting at 75% yesterday earlier this week, 80%.

Starting point is 01:33:42 And so that's by the end of the week, there is, a 92% chance that GPT-5 is released and it has mooned recently just back on August 3rd it was sitting at 31% chance so it has just in two days gone from 31% to over 92% so people are definitely expecting GPT-5 to be released in the next five days which should be exciting I'm sure there'll be lots of coverage let's talk about and we will want to hop on with as many as many legends, as many, as many Mettis list AI researchers as possible to get the deep dive. Absolutely.

Starting point is 01:34:25 In other news, flying private is the new wealth yardstick. I know our audience is gonna wanna know about this. We talked about Joe Wisenthall. Is this news? This is news? Is this new news? This is people hearing about this for the first time. But I love this because, do you know Max tuning?

Starting point is 01:34:42 He started a gummy candy business, sour candy business. He sold it to Hershey, for $75 million. I just love the name, Max tuning with two X's. It's like a great name. So he was a YouTuber. He started a sour candy business, sour strips, and just grew it and grew it and grew it

Starting point is 01:34:58 and wound up selling it for $75 million and did very well. But the first thing he did before buying a Rolex or a dream home was a private jet for his wife and six friends to veil on a desult Falcon 900. They skipped security lines, zipped straight to the runway and seated themselves in leather recliners with gold accents,

Starting point is 01:35:16 In the wood-paneled cabin, the price tag for this adventure, $100,000. It's worth every penny. Tuning's golden-doodle, dude, this guy is phenomenal with the names. Naming artists. Love it. Sprawled at their feet. The joke is, I had to get a private plane so I could bring my dog, the 35-year-old said. I didn't really care what the price was.

Starting point is 01:35:36 The ultra-wealthy have always enjoyed flying private. That exclusive club is growing as soaring stocks and crypto prices. Mint more millionaires and billionaires who now have a range of choices. to book a seat on a jet. And you know the best part? He can give the stake to his dog if he wants because he's flying private babies. He doesn't have to deal with the draconian rules of jet blue mint.

Starting point is 01:35:57 Flying private has become the ultimate luxury splurge for many wealthy individuals, surpassing Ferraris, Hermes, Berkin bags, topping $14,000 or even Waterfront Hampton homes. Why not? All the above. Which we recently learned are very interestingly priced where property in the Hamptons is somewhat reasonable, you know, five, ten million dollars might get you in the game, but renting a house in the

Starting point is 01:36:22 Hamptons for a single month during the high season, $250,000, right? Something like that. That's very, very expensive. And the rental rates are so extreme because you really only want to be there for a few months out of the year. You only want to be there during the summer, the hot season. And Emily Sundberg will be out there. For many of those aspiring to join the ranks of the truly rich, having private jet money is the new goal, dividing, the 1% from the point 1%. The pandemic unleashed a burst of demand and providers say popular

Starting point is 01:36:52 culture has turbocharged enthusiasm and envy for the fly private lifestyle. Social media has given, I mean, Swift's in the chat says his friend flies their dog private solo. Well, we talked

Starting point is 01:37:08 about on the show earlier, a dog that flies private alone because the owner signed a contract to do the interior design for the private jet. And as part of the deal, their dog gets to fly private. And we were laughing about what if you want to get to New York to Miami and the dog wants to get to L.A. And you have to do a layover at Van Nuys to get to Miami

Starting point is 01:37:37 because the dog has to fly private. But the younger people are getting a glimpse into the lives of jet setters, whether it is a model flying with friends to a bachelorette party in Los Cavos, Mexico, or a hedge fund manager hopping a plane for a birthday in St. Barts. Realistic expectations are in or in order. It's my dream to fly private set a user on a Reddit forum for so-called Henry's, which refers to high earners not rich yet. I think that's everyone on our team, adding that he earns about $300,000 is married and has a kid,

Starting point is 01:38:13 in daycare, definitely closer to broke than flying private. Another user responded, mugged. Yet the number of people are rich. The Henry term emerged during the D to C boom. I never heard of that before. That whole era where a lot of D to C brands were kind of looking at their customers as people that weren't necessarily going head to toe Laura Piana, but they would maybe flex up and get, you know, an item or two or, or,

Starting point is 01:38:43 or buy some away luggage, that whole thing. Buying a Clydesdale, not a thoroughbred, that type of money. Yeah, something like that. I mean, the rain, I did a deep dive on like the horse market recently and the, as one does. And the spread between the cheapest horse and the most expensive horse is staggering.

Starting point is 01:39:03 You can spend millions or you can spend just a couple thousand dollars. So no excuse not to have a horse, one horsepower. What's my, how much power do you need? At least. The US added more than a thousand millionaires every day last year on average according to UBS the billionaire club grew more than 50% between 2015 and 2024 private jet hours flown touched a high in 2022 and then have stayed elevated since according to data travelers can now use apps to snag individual seats on private jets

Starting point is 01:39:33 or pay for flights by the hour others chartered flights paying for just the occasional trip from New York to Miami while there are rare business moguls whom might spring for the entire jet some jet providers except payment in crypto, shrimp cocktails and facials. Ken Ricci, a pilot and chairman of FlexJet, a private company said the frugal wealthy, high earners who don't typically splurge, started spending big on travel during the pandemic because of health concerns. Many of them have found it tough to go back to flying commercially. Yeah, because of the JetBlue rules, we know this. And years of economic growth have helped ease the stigma around conspicuous consumption that's set in after the financial crisis.

Starting point is 01:40:13 It's in vogue to be wealthy, he said. Sometimes we love the rich, sometimes we hate the rich. It isn't just avoiding the security line or the hoi-poloi. Flying private means trading Biscoff cookies, which were also given to us on the JetBlue Flight. For freshly baked ones and packing lunch with such items as shrimp cocktail and filet mignon from menus spanning a dozen pages, chef Nobu Matsu Hesha crafted a menu for VistaJet that includes miso salmon.

Starting point is 01:40:40 Some cabin hosts are trained to give travelers. facials 40,000 feet above the ground with Dr. Barbara Sturham's line of luxury skincare. Very nice. Anyway, fly private. Stop making excuses. Just do it. We had a breaking news. Tyler actually. I made us a song on 11 labs. Okay, break you want to play. Yeah, yeah, can we play it on the stream? I think so. Okay, set up. Let's hear the song W.W.E. Capital and code where pitches rain and valuations grow. Brace for the adventure showdown. Let's go.

Starting point is 01:41:15 Wired for disruption. Seed rounds come alive. Is this like a rap? This is not how WWE works. I don't really know what you mean. I'm not into this now. Go do some research. Go do some research.

Starting point is 01:41:30 Shut down. Shut down. No, no, no. The whole point of the WWE intro is that is that it has no words. It's purely instrumental. So look up, look up some. some WWE intros because it's meant for the announcers to speak over it. And so I'm sure you can just prompt it and say no words.

Starting point is 01:41:50 But also like the words are going to be the hardest thing to get right because it's like telling jokes. It's creative writing. It's very, very difficult for the models to get that right. Obviously, amazing work by 11 Labs. Very convincing, but we got to do some work on prompting this one. Yeah, go back to it. I don't want any of that cringe like rap. Yeah, yeah, yeah, yeah.

Starting point is 01:42:11 And yeah. and the abstract like chat GPT compression of the concepts that we talk about. Good effort, good effort, though, Tyler. And impressive that it was able to be turned around so quickly. This isn't something that cooks overnight. Before we go into the next story, a funny story from earlier this year,

Starting point is 01:42:27 we were flying back from a trip. And we're joining a buddy, friends of the show on their jet. And the morning of, it was a super early flight. didn't text him to remind him that we were coming and so we got to the we got to the terminal got on the golf cart we're driving out to to the plane and just watched it take off no we didn't watch it taxing it was taxing it was no no no no it didn't it didn't leave the ground oh we got out of view from it so i thought it left the ground no no it didn't leave the ground but it was running down the runway it was on the runway taxi it was it was on the runway taxi it was

Starting point is 01:43:12 It was not actively taking off. I thought it had turned around. I don't know. But either way, they turned the plane around for us. It was the nicest thing anyone's ever done for me. We felt really bad. If I ever go on, I was like the best, what's the nicest thing everyone's done for you?

Starting point is 01:43:23 Turn around the PJ for sure. That's up there. It was mortifying. It was a low point. But then the rest of the flight was fantastic. It was fantastic. It had a great time. Learned a lot.

Starting point is 01:43:33 It was fantastic. And we are forever. You're deaded, yes. Anyway, in other news, the New York Post is launching the California Post. Wow. The New York Post goes to Hollywood, plans to launch, plans launch of the California Post daily newspaper. New York Post, you probably know them from their hilarious and wild front page, what do you call them?

Starting point is 01:43:55 Just like headlines. They write really great headlines with like these hilarious puns. And so they are going to come to California and launch a daily newspaper, which of course will probably be instantiated on the web very seriously. but they call it the new venture they're bringing the signature high-brow low mix high high low-brow mix of content that the new york post is famous for alongside fearless common-sense journalism celebrity entertainment news world-class sports reporting and legendary covers we got to get we got to start getting a california post legendary covers yeah i'm very excited for this do you know who founded the new york post i don't who he uh have

Starting point is 01:44:39 happens to be a founding father. Really? This country, Alexander Hamilton. Wait, what? You're kidding me. Yes. New York Post was founded in 1801 by Alexander Hamilton. No way.

Starting point is 01:44:50 That's amazing. George Washington appointed as the nation's first secretary of the Treasury. Wow, what a story. We have our next guest, but in other media news, Barry Weiss is apparently looking to sell the free press for $250 million. I'm going to hold off on ring the gong until it's confirmed. We're all rumors. Rumors. The rumors actually come from the New York Post. But this would be a fantastic outcome

Starting point is 01:45:12 for a new media company that's only something like four years old. Barry Weiss left the New York Times, opinion page. There was a huge dust up. That happened in 2022. And she's reportedly met with Skydance Media CEO David Ellison at the high-powered Allen and company Summer Camp for billionaires. And David Ellison is the son of Oracle founder Larry Ellison. And he's apparently reportedly interested in buying the free press as Skydance continues. We, I think originally covered this briefly when they were meeting at Allen and Company's event earlier this month, or I guess earlier in July. This screams like talent acquisition as much as it does.

Starting point is 01:45:57 Yeah, Barry, Barry is on a tear and she, yeah, is a, she does, she leads the podcast interviews and brings great guests on and she writes. But then they also high, they also have. gotten a bunch of great people on the team. Tyler Cowan has a column at the free press. Like that was the thing that got me to subscribe because I love Tyler. And I was like, I want to see what he has to say.

Starting point is 01:46:20 And I don't want to like, it's pay walled, so I have to pay. And so she's been very good at like hoovering up talent, building this thing. And they publish a ton when you go to the free press. You just see tons of articles, all sorts of stuff. Just today, I was looking at the free press's homepage. They have basically an op-ed written by Palmer,

Starting point is 01:46:38 like they got Palmer to write about his thoughts in the free press and I thought there was just like crazy that's the example of like great great written written work so congratulations very would be able to help make CBS relevant again even if she was that sounds right to run that sounds right anyway anyways without further at you we have Alex Albert Alex welcome to the stream thank you so much for joining on short notice great to meet you great to have more you do it great to meet you guys what's you in your world and John I'm hoping you hold on to that that mallet so we can get a gongering and

Starting point is 01:47:08 Give us some news. What's you got? We went from... Yeah, it's... Oh, go ahead. No, you go for it. Yeah, yeah. I was going to say it's an exciting day. We dropped Claude Opus 4.1.

Starting point is 01:47:18 Let's go. Hit that. Three hours ago. You're going to give us a number. How many parameters? How much money do you spend on the thing? I can give you a sweet bench score. Okay, here.

Starting point is 01:47:26 Yeah, give me the sweet bench. How about... 74.5 sweet. Let's go. There we go. There we go. Congratulations. Thank you.

Starting point is 01:47:34 Thank you. It's been a very, very exciting week. We're shipping a lot. like crazy and a lot of stuff happening yeah don't know how we're even keeping up yeah oh it's it's amazing it's uh yeah i mean we've been talking about streaming for seven hours a day we'll we'll get there eventually fortunately three hours is like just enough to barely cover scratch the surface of what's going on in tech uh talk to me about where this fits into the rest of the landscape there's a ton of stuff going on in open in uh in anthropics world uh from

Starting point is 01:48:03 clod code different consumer models open there's so many different projects how does this fit in Yeah, so this is our best model yet for just general capabilities and intelligence. Really, really is pushing the frontier on all sorts of agentic reasoning, coding tasks. Back in May, we kind of hinted at the launch of Claude 4 that we want to get on a more continual release schedule with our upcoming models. And this is kind of our first step towards that vision of now being able to ship models faster and faster to our customers and end users. One of the narratives that's kind of stuck around with Claude for a long time is

Starting point is 01:48:38 this idea of like the vibes just being really good and yeah it does great on the benchmarks but it's just like fun to talk to people like the way it talks but at the same time anthropics been fantastically successful in the business context is there an important overlap there like are you hearing from business customers that the vibes being good is driving yeah bottom line results well yeah more so how much do developers care about vibes versus just raw it seems like developers are the only ones that can tell that the vibes are good. But I'm always interested, like, how does that actually translate to, like, my bottom line if I'm an enterprise SaaS company and I need to use an anthropic API for something? Am I happy with the vibes, or is that just kind of like a nice

Starting point is 01:49:19 to have on top? Yeah, I mean, the vibes are kind of, you can measure vibes in a lot of different areas, right? So if you're a developer, you're measuring vibes in the coding domain and how long of a task can these models complete? Can you just let it go off agentically and work on your files. If you're creating an application, your enterprise has end users and you're having those end users actually interact with the model, you want those personality vibes to be pretty stellar. Otherwise, you're just going to give a bad experience to your customer. I think Claude has like a really wide range of things there. And of course, we're known for kind of that natural feeling personality. And we've done a lot of character work there. We've some really great

Starting point is 01:49:58 researchers on the team that focus on that. But then on the other side of the spectrum for the developers for those folks that are building agents, that's where we really get into that other type of vibe, which is how long of a task horizon can these models operate on. Is there a good benchmark for task horizon yet? We've heard baby AGI, 15 minute AGI, 20 minute AI. We've seen a lot of people like string these things together. But like in terms of like most consumer interactions, I think the way where most people hit the interface of an LLM, they feel like like 20 minutes is the kind of the upper bound of what the average AI user is experiencing. Can you talk to me about that? Yeah, I mean, I do think LLMs right now have somewhat

Starting point is 01:50:47 of like a jagged intelligence frontier where in some tasks, of course, they spike more than others. For me personally, when I'm trying to assess that capability in a model, there's a couple places I look. One is especially coding benchmarks. These are really, really important because often it's the model trying to complete a PR end to end. So it needs to take a lot of actions. It needs to call a lot of tools and modify a lot of files. So things like Sweet Bench are actually like good proxies in some degree to measuring that. There's also third-party institutions that are doing this research right now. So one is called meter, their model evaluation threat research. And they have that really nice that really nice line goes up graph of like plotting out the models and how long the

Starting point is 01:51:33 tasks they can do compared to a human developer sure um and clot has always been uh pushing the frontier on that and i'm assuming uh once they get 4.1 up there it'll be up and to the right as well yeah i mean we've seen like the in terms of the spiky intelligence like arc a GI is like the main thing that people point to is like a weird valley of capability because it seems like it should be obvious and and easy to do, and yet it reveals something about the models. Are there any places in the coding world that are more specific where we're underperforming, either just because we haven't focused on it? I'm thinking about like, I imagine that most models are better at Python than Fortran.

Starting point is 01:52:14 Yeah, yeah, yeah. But is that an outdated take? Is Fortran now just kind of like solved because somebody had just got all the training data together and RL done Fortran and now we're good? Yeah, I definitely think there's still probably, if you were to like, take Sweet Bench, for example, and you translate it into every coding language, I'm sure Python and JavaScript TypeScript would be ahead of the other languages. But we are seeing, especially with the Cloudform models, that they're able to handle a lot more of those, like, older languages or the languages that don't really appear as much in the training data to a much better degree. And that's through a combination of things from RL to just general. architecture improvements um so we're we're kind of covering the bases with the models but yeah it

Starting point is 01:53:00 definitely started in one way and now is expanding out what what have uh reactions been to four one i'm assuming a variety of people got access to it you know pre-release what what are the areas that people are kind of most excited about yeah um again it's it's kind of those coding and agentic tasks have been really the start of the show here uh what i think is interesting about that is that coding is kind of the proxy for allowing everything else. So if you think about how a model actually interacts with things on a computer, everything can be

Starting point is 01:53:31 done through coding operations. So when we say coding, it's almost like a little disingenuous to just like narrow it to that domain. But some of our early customers that were playing around with 4.1, WinSurf being a great example in one of their benchmarks, they showed that from Opus

Starting point is 01:53:47 4 to 4.1, showed roughly the same performance jump from Sonnet 3.7 to Sonnet 4. And this like a real world junior developer task eval. So something that I definitely would pay attention to. How are things going on the rate limit side? I've heard that like capacity is generally constrained for everyone everywhere all the time because we don't have enough data. Obviously people are working on that. But like I guess like broad update on like how things are going. But then more specifically like when you're talking to companies that are built.

Starting point is 01:54:23 on top of Anthropic APIs, are there specific strategies that you recommend to just embrace the realities of the modern AI era and capacity constraints? Yeah, I mean, the rate situation is something we're just continuing to iterate on. And of course, we have like very, very smart people. They're much smarter than I think about this problem in terms of building out compute and also working on making our inferences overall more efficient. we want to provide the best experience we can to our customers. So whether this is on the cloud code or through the API,

Starting point is 01:54:59 there's various things that we do, whether it's like through our applied AI team helping our enterprise customers with their specific deployments or on cloud code, making sure that our rate limit system is fair and actually allows for people to utilize it as much as they can without rewarding people that might be abusing the system and kind of detrimenting the other users. So it's really about like kind of monitoring and keeping me consistent.

Starting point is 01:55:21 We ensure like great experiences for everyone that's trying to use clot. What about pricing? Is there a step up in like costs associated with 4-1 versus 4-0? What does that look like? Pricing is the exact same. We really do intend for this model to just be like a drop-in replacement for Opus 4. So if you're using Opus 4, you should just be able to cleanly kind of switch over the model string and you're good to go. That's awesome.

Starting point is 01:55:49 Yeah. What are some of the weird use cases that you've seen for cloud code? I've talked to some people that are like, because coding is kind of like an abstraction over like everything that a computer can do, they're coming to Claude code with tasks that don't, that feel more like just general like personal assistant agent stuff, but then it just writes a bunch of code. Is that real? Is that something that it's more just like when, you know, you know, when people do those

Starting point is 01:56:18 like beautiful artworks in Excel where they like this color every single cell as like pixels and it's like you're not you're kind of abusing the tool here but it's still impressive or or is that actually like you know a glimpse into the future i think that is a glimpse into the future um there there was a tweet i posted a few days ago kind of asking the community for hey what's all the best non-coding use cases you're using cloud code for and it got hundreds of replies and really the answer is kind of of we're super wide ranging everything from like managing your own personal knowledge base second brain on your computer you know maybe you have a ton of notes and text files to some folks are actually using it now for like video production so we have we have a guy on our team that's uh uses

Starting point is 01:57:06 cloud code and uses like an open source library to create animations and things for like all our product launches oh that's very which is just absolutely amazing i didn't even know that's possible uh but it is kind of hinting at this thing that it's like well if you can control code you you can really control anything that happens on a computer. Now we're moving it to this operating system abstraction, almost. And I think that's really the direction you're going to start to see CloudCode heading in. That's awesome. Anything else, Jordy?

Starting point is 01:57:32 I'm curious to get an update on, it seems like a lot of the companies that we talk to, we were talking with Dylan Field the day of the IPO, and he was talking about updates they're making with MCP, what's going on in that realm. Any updates while you're here on that front or interesting use cases? Yeah, I mean, MCP's been absolutely just ripping lately. The community is awesome and it's like really got to this point now where it's almost its own like self-sustaining thing. Where there's like meetups and gatherings that are being hosted completely outside of like our facilitating.

Starting point is 01:58:09 And thankfully we get to participate in them and that's just like been super cool to see. I think MCP is going to be a large part of like making sure this. kind of agentic future goes well. So if you can spin up easy integrations and connections to any service or any product or any internal application, all of a sudden you kind of unhobble Claude to some degree. And you give it access to that knowledge that it needs to actually go out and do those correct operations. So very excited about the team there. And yeah, hopefully a lot more good stuff coming on the way there soon as well. Awesome. Very cool. Congratulations to the whole team on the launch. It's a massive day, a massive week. And I love to have you back on soon.

Starting point is 01:58:50 I'm sure they'll, I'm sure 4.2 will be right around the corner. Oh, yeah. A lot more coming soon. Yeah. Stay tuned, guys. We'll talk to you soon. I was a good one. Cheers. Bye. Up next, we have Scott Kapoor from formerly Andrewson Horowitz. He was in the OPM business, the other people's money business. Now he's the director of OPM for the U.S. government, the Office of Personnel Management. Welcome to the stream. Scott, we are excited to talk to you. How are you doing? I'm doing great. How are you guys doing? We're doing fantastic. It's great to have you on the show. Thank you. We're in a very funny era where more folks from Silicon Valley have moved over to the government. And every time they do, I have to have them explain to me like I'm in the VC world, what they do. I think I learned about the OPM, like the entire office was a new term to me just a few years ago.

Starting point is 01:59:44 Explain the Office of Personnel Management to me. You mean to tell me that you guys don't know what OPM is that is really disappointing. I'm shocked to hear that. I probably learned about it about a year ago. Explain it like I'm a venture capitalist that's about to write a thread. Yes, yes, yes. Like I've always known about it. And I'm an expert in it.

Starting point is 02:00:01 Yeah, my wife asked me the same thing when I got appointed to the job. So I'm not surprised to hear that. Hey, so really quickly, what it is is we are the talent management organization for the government. So in simple, in our corporate VC terms, we would be the HR department. basically for the company. Sure. So our job is like make sure we have the best talent. Make sure we have actual things like performance management standards, which by the way we don't have, which we're working on.

Starting point is 02:00:24 Make sure we have the ability to, you know, kind of understand the employee base through technology, which we don't have currently. So, but basically think of us in very simple terms as we would be the HR department inside, you know, any other, you know, traditional BC back company. And does this cut across all the other departments or are you, like, where, where, where the, where the, where the, where the, where the, where the, you. boundaries of your yeah so it's it's a hybrid is actually what it is so basically so like there's some stuff that we have exclusive province on so like i'll just give you a simple example like the president puts out a hiring and executive order saying we want merit hiring to be the standard in government which you and i can we can talk about that forever if you want but basically so he says look i direct opm to figure out like what are the standards that we need to do cross government

Starting point is 02:01:07 to make merit hiring a reality so we will go put out a bunch of you know regulations and research it and say great okay now this is the law of the land for all all the other agencies. This is what we expect you to do. And, you know, OPM will not formally approve and issue offer letters and stuff like that unless you guys do that. So that's what we do. And then, but there are HR departments, obviously, in the different agencies. And, you know, so think of it as like, you know, in a company, you might have like centralized HR, but then you have like business partner HR that might sit in the sales organization or other stuff like that. And they may be kind of, you know, do things that are domain specific. But all the big things about,

Starting point is 02:01:41 like, how do we recruit people? How do we train them? How do we. actually manage them performance-wise we will provide guidance for yeah and sorry jordie yeah i was just going to say like getting into it what what are your priorities first 90 days 180 the year i'm sure there's you you've uh like even any any you know i'm assuming you're trying to bring in best practices that's simple fix the government don't make mistakes yeah exactly just ask model to do it we're gonna make we're gonna make some mistakes which is okay that's part of the problem by the way which is like we've been living in this environment where like like you literally cannot make a mistake and so nobody actually tries anything so yeah really simply

Starting point is 02:02:18 there's three big things we're trying to do one is create a high performance culture in the talent so in other words like we my simple goal is look we want like the best and brightest people to take government jobs but as you guys know look a players want to be around a players they want to be in an environment where they're held accountable where when people do well they actually get rewarded we have a very like tenure based uh and conservative risk management based system here in the government, which is, like, you get power and you get promotion by having more people in your organization and a bigger budget and the longer you spend time in government. So we've got to just flip that on his head and say, look, we're going to award things like innovation. We're going

Starting point is 02:02:55 to reward. I've been using the term measured risk-taking because, look, we can't go just, like, literally throw stuff against the wall and see what works like we do in Silicon Valley. But anyways, that's thing number one. So, like, goal is how to, like, all the smartest people in the country feel like coming to work for the government actually is great for them. They learn stuff, and they'll go get paid for that in the private sector. Number two is we've got to make operational efficiency like a core tenet of government. So again, I know this sounds crazy coming from, you know, the world that I know you and I came from. But today, basically, there's no incentive for efficiency.

Starting point is 02:03:26 So, again, you need to, like, make it into people's performance plans and say, like, your job every day is, are you doing a great service on the behalf of the American people? And are you constantly like turning the crank to figure out how do we use technology? How do we, you know, use AI to do stuff? How do we, like, reorg to do things? Again, because the incentive. money? Spend less money, right. Today, again, right, I mean, it's the exact opposite incentive, which is more money means more people, it means more power, right? And so like everything we have to do

Starting point is 02:03:52 is, yes, spend less money to deliver a better service. And so we've got a ton of like technology initiatives that we can talk about there. And then the final thing we want to focus on is we've got to make like, we've got to anticipate what living in an AI first world looks like for government. And we got to not be flat-footed and realize that we have none of the talent we need and we don't even know what the jobs are. So this is, I think, a huge opportunity, quite frankly, where I think we should work with the private sector and say, great, you guys understand what AI is going to do. Let's figure out ways where we can have information sharing, even like, quite frankly, swap employees back and forth, but find ways so that we don't wake up five years or now and

Starting point is 02:04:26 realize there's all these new jobs that are being changed and or augmented by AI, and the government is not like, you know, figuring out how to actually get that talent into the government. Yeah, you mentioned spending less money. I want to know about, the potential of spending more money. Is there a world where we remove salary caps on government employees? Like, you've seen this in Silicon Valley. There's not, like, you know, obviously founders are very driven, but they have uncapped economic upside.

Starting point is 02:04:56 Like, the venture capitalists have uncapped economic upside in so many ways. The AI researchers that are getting poached, like, it is just moneyball at the end of the day for a lot of sectors of the economy. Is there a reason why the government is fundamentally structurally different, or do you think that we just need to make a better pitch for civil service? Yeah, I think it's a little bit of both. So, okay, so look, we're never going to solve, we're never going to solve, like, the ultimate, like, uncapped upside pay gap between the public and private sector. And look, that's just, you know, politically that it'd never work. You know, we're not going to, you know, we're not going to have a Zuckerberg equivalent of, like, paying engineers a billion dollars a year, right?

Starting point is 02:05:35 Yeah. But we can do two things. One is we can change the compensation structure so that, yes, like A players actually get rewarded. So I'll give you a very simple example here. Everybody gets ranked one through five at the end of the year in their performance evaluations in government. Five's the highest, one's the lowest. 70% of the people get ranked a four or five, okay, which means like they're awesome. They're doing outstanding work.

Starting point is 02:05:55 0.2% of the people get ranked to one or two. Now, again, mind you, this is across a population of 2.4 million people where at a minimum, you might expect a normal distribution, but like there's just no way that 70% of the people are above. average, right, unless you're in, like Wobagon, basically. So we got to solve that problem. And then if you solve that, then the incentive structure can follow it, right? Because, again, a typical government employee gets 0.5% of cash bonus at the end of the year. That's because, again, there are too many people highly ranked. And the delta between low and high is like, you know, 50% or something, right? So what I'd like to do is say, you ought to have many fewer people ranked a four or five.

Starting point is 02:06:33 And let's give those people like most of the bonus pool, for example. So, We can't solve all the problems, but like we can solve that. And then your other points are really good one, which is we've got to change the pitch. So again, I'll give you a story here. When I first came in, one of my, one of the employees here said the pitch that we use for government is job stability, basically. Like, that's the pitch. And I was like, I'm sorry to say, but like, unfortunately, I think somebody's been lying to you because like there's no job in the world where we can guarantee job stability for people, even in the government. To me, the pitch has got to be you can see things at a scale and solve really hard complex problems.

Starting point is 02:07:04 And yes, like, you can, you know, do a public service as well. But we've got to get people excited about, like, you know, putting people on the moon or all the things that, you know, guys like Elon do. You know, it's the whole, like, founder story of, like, what's the mission of the organization? The mission of the organization cannot be we provide job stability. So we've got to, like, tell that story. We've got to go tell it on college campuses and we've got to go, like, show it. And look, people don't have to commit their life to being in government. But if you could come here for two years and work on really hard, really cool problems, and you could actually advance in the organization because you're not.

Starting point is 02:07:34 tenure limited but you actually are skills you know you know you're awesome at skills we should be able to promote you faster like there's no reason why we can't compete for really smart people in that environment and then again go take that skill set and go work for you know Elon or go work for Zuckerberg and get paid a billion dollars a year after that like you can do both things so we got to sell the story yeah i was talking to a friend who had some experience in china and he said that the the main difference that he noticed was that the really really top performers over there just kind of got sucked into government work. And he was kind of framing it as like, it wasn't exactly optional for them. And I know that that's not on the table here. We love freedom and choice and

Starting point is 02:08:15 independence. Yeah, we kind of decide a long toe that we actually, like democracy is actually a good thing, right? Yeah, of course. But I guess my question is like, is like, should, I know that like when the, when the administration changes over, I mean, this happens every four years now, eight years most. There's there's a push to bring in new folks. And there is some recruiting that goes on. And there's like whisper networks of who's really talented and let's make the pitch to them that maybe now is the time to go and serve your country. And a lot of people do swing at that pitch and they take it and some of them do very well with that. But should it be more aggressive, should have should recruiting be be 10 times bigger in terms of just every talented founder, engineer, venture capitalist, anyone who's high agency, high intelligence, high EQ. is at least hearing the pitch for where they would fit in in the U.S. government.

Starting point is 02:09:08 Because I think a lot of people, I know a lot of people that got calls, I know a lot of people who were talented and didn't get calls. And I'm wondering if we should have reached them with something. Yeah. And it felt like at the beginning of this year and maybe the end of last year was just recruit, Doge was just dominating on recruiting. It's a fantastic recruiting engine. Yeah, yeah.

Starting point is 02:09:25 But I didn't see that. I didn't hear like, oh, I have a fintech founder who, you know, they were great, but they got kind of clobbered. And now, like, the IRS is calling them. Like, I didn't hear that story that often, for example. Yeah. So, yeah, so let me try to just unpack that a little bit. So, first of all, you're absolutely right.

Starting point is 02:09:41 We should 100% do that. So there's a problem we have today, which we are working on fixing, which is today, believe it or not, you can actually, there are weird hiring procedures in the federal government, which makes it very hard in some cases, literally to hire people based on their skill, skill assessment. So they'll give you a great example. So people have gotten really good at, we put a job description up on this thing called U.S. SA jobs, which is basically the website, and people essentially tailored their resume to exactly the words that are in that job description, and the filtering process puts them at the top of the list, but it's all self-assessed stuff. We literally, like, you could hire an IT network administrator in the government today and not

Starting point is 02:10:21 have a technical person, interview that person to see, do they know, like, what, like, you know, HTTP means, basically. And the good news is we just, part of it is because, like, people are worried about, okay, are those tests discriminatory? We actually just had a good legal ruling the other day that clears the path for this. But believe it or not, literally, like, we do not have skills-based assessment for many jobs in the government. So the way to, so, like, it's just really hard. It's really hard for those people to come in. But you're absolutely right, which is, look, the real solutions problem is we've got to do both. We've got to fix that piece. And then

Starting point is 02:10:53 we have to literally go tell the story. Like, I don't think this is the solution. We're not going to do TV commercials like, you know, the Army and Navy and, you know, we need a few good men, basically but we need something like that we got to go tell the story and you're absolutely right which is i would bet there are i don't know i bet there's thousands of data scientist jobs open across the government today you as an employee if you're interested in that you should just be able to apply once and we should then send your resume to all thousand of those jobs like we don't even do that today basically so like you literally have to go find out where those thousand jobs are so there's all the stuff that again it's not they're not bad people it's just that the system has not been set up

Starting point is 02:11:27 for that goal. The system has been really set up to say, let's really be conservative. Let's really be kind of careful on these things. And we just have to change that paradigm. Yeah, it feels like we're fishing with a really large net. You know, you put up a big ad. We need a few good men. And whoever gets caught in the net comes into the organization. And we need to get some harpoons out and go find the really like laser focused people for the perfect job that will thrive. Military, you know, it's been interesting. I think things have changed. But there was a period where military recruiting to my knowledge was was really really tough and that's still with a lot of a lot of people that do end up joining having been marketed to and and and and kind of exposed to army navy

Starting point is 02:12:08 navy marine corps air force since they were kids right but nobody's getting nobody most most americans wouldn't know they think o p.m if anything's other people's money like you're saying and they wouldn't know it and so how do you how do you get somebody like even open to the idea you know a lot of kids today in high school, college, they know they want to work in tech. Nobody's going through those periods of life knowing they want to work in a specific organization or very little. On the tech. You're absolutely right. So look, yeah, and we got to just like have a presence on college campuses and be there just like Goldman Sachs's and just like Facebook is. And we got to go tell our story. Like, you know, you guys know this, but I used to work for a head of sales one of my companies.

Starting point is 02:12:47 And his famous thing was, you know, show it, sell it, hide it, keep it, basically. Right. And right now we are hiding it basically. And people find us because they're looking for stability as opposed to us finding people who are looking for like an actual real interesting challenge. It's an interesting time, you know, apparently CS grads are struggling to find roles. Exactly. You can see the variety of reasons for that. You know, we just had someone on from Claude. Claude performs really well now. Maybe it's performing at the level of a junior engineer. But the opportunities in government where you don't need to be, you're not out there competing with other foundation model labs or Luke Fairtor like he is a programmer it from that

Starting point is 02:13:29 massive Bloomberg article it didn't seem like 90% of what he was doing was programming it seemed like yeah he was able to scrape some data together and do some analysis to know how to make a decision but a lot of it was just sending emails having phone calls having meetings but Luke's also an example of somebody who's truly elite in his category and I'm talking about like the next like 10,000 but I feel like if you're a new grad and you can program that gives you a super superpower that then you can also just be effective to be rigorous and first principal thinker in a meeting where you're just trying to decide how much money should we spend on this thing yeah did you see by the way did you see the

Starting point is 02:14:01 quote from the unnamed government source in that article about why they didn't like why they didn't want Luke they're like he's not qualified because he didn't go to college and he didn't have five years experience right and that is exactly the problem right all of our criteria for evaluating people are based upon credentialing based on tenure and this is where merit based on howling matters so much like to me if you're Luke I don't care if you're 18 years old and you can actually function at the level of somebody who like you know knows programming at the at a high level yeah let's pay you at that level let's hire you that level and and okay

Starting point is 02:14:31 like if you need some help around the edges to like you know make sure you can sit in meetings you know with your shoes on that's great we can teach you that basically yeah but we can't we can't exclude people from the process because they don't have like you know a sheep skin that says you know they went to stanford for four years i mean that's crazy yeah exactly how is your AI strategy forming when people hear AI in government as citizens they get scared that sounds scary if they hear if you're working uh in the government and you hear a i you're probably thinking i don't want to lose my my job uh but but clearly it should be able to be you know beneficial the big thing just feels like get every government employee access to an

Starting point is 02:15:09 llm because before any of the job displacement any of the cyberpunk terminators like let them search the knowledge quickly like please it's anyway what's your take yeah no you're exactly right so on my government computer, if I want to do something on an L.M, I have to like go to my personal computer to do it, right? It's not crazy. And how many government jobs are email jobs? Look, the privacy issues are real, and we've got to be conscious of that. But like there's, but there's, but so much of what the

Starting point is 02:15:36 government does is already in the public domain. So let me give you a very simple example. So one of the things my team does, as I mentioned, is we develop like rules and regulations for, you know, let's say how you should do merit hiring the government, okay? And the way the process works, which I won't bore you with, but basically like we put out a rule, and then we have to invite public comment on it, and literally people submit comments. So we're doing a rule right now where we got 40,000 public comments on this rule, okay?

Starting point is 02:16:00 Some, a group of people in my team literally read all 40,000 of those comments, and they write a written response to them, and do it, you know, the old-fashioned way. Now, I'm not going to say, like, let's just have, let's just get rid of all the people and have AI do that, but there's no question in my mind that we can get a 10 to 15% easy efficiency advantage if we actually had a very simple LLM that we could train on totally public data. I'm not talking about private data. All that regulation stuff is public. Yep. You know, help people manage that process. But, like, we have to start with that. So, like, what I'm doing here in OPM is I'm actually going to have somebody come in from

Starting point is 02:16:34 the outside and, like, do the full landscape of, like, what's happening in customer support and what's happening in, you know, HR organizations and, like, what are all the use cases out there? And then what I'm doing is just telling my team, look, now your job is to go back and find, like, what are the small wins we can make on little use cases? And again, I'm not asking you to like, you know, get rid of 100% of your people, but like you need 10 more heads and you need to find some place to get 10% more productivity. We ought to be able to do that within our current budget without actually having to, you know, add headcount. So we just got to start with little baby stuff that doesn't scare people, get them educated.

Starting point is 02:17:08 You're exactly right. Everybody should have, you know, an LLM on their desktop. And then we can tackle the hard problems, which is, okay, are we going to put confidential government data in them? And do we need them air gaps and all that crazy stuff. But like, we don't even need to do that right now. we just need to like educate people and then come up with use cases that are based on like literally public data with human augmentation is the does the federal workforce have a like an aging problem you know we'll talk with uh CEOs on this show or investors that say you know the majority of factory owner operators in the country are going to retire within the next five to 10 years right that becomes concerning because there's a lot of just like general knowhow and process that could just kind of get lost or evaporated is that a challenge that you're facing in terms of, you know, people that have been in the government for 30 plus years and are getting to the point where they're ready to retire?

Starting point is 02:18:00 Yeah. If you look at the demographics of the government, I don't know the exact number, but there's no question. Like, the government is very skewed towards people who are kind of later in their career. And again, I think this is a problem that we've had, which is we haven't figured out a way to actually get people in at earlier stages in their career because we've got all these impediments that I talked about that make it hard for you if you're a recent Stanford grad or whatever to be able to get a job here. So yes, we have to solve that problem. Look, I mean, sure, there's going to be knowledge that walks out the door. Look, I'm more worried about the long-term thing, which is, do we have a steady pipeline of really smart people who will come here? And then

Starting point is 02:18:32 we can solve that aging problem by just, you know, over time, kind of changing the demographics. But yeah, like, I don't think, I'm not worried, like, there's a cliff here where, you know, 10 years from now, all the experienced people walk out the door. But I do think we have to have, like, a demographic and a set of hiring practices that allows us to actually kind of, you know, build a funnel from the very bottom of folks yeah it'd be cool i remember maybe in 2012 like teach for america was really popular and obviously that was like non-governmental but like aligned with this idea of like a tour of rough service and there was code for america and you know it's like cut out the middleman and just go straight for america like work for the government i love that yeah you

Starting point is 02:19:11 it'd be great culturally it was like yeah somebody so yeah because now like i feel like if you did four years just in civil service and then you jump into Silicon Valley it's kind of like a weird track but like it shouldn't be it should be completely normalized yeah a long time ago right there and this is not the perfect analogy but there used to be something called like the civilian conservation corps which was exactly that right it was like people came right out of school they did some heavy labor for a while and then they went to the private sector so yeah like we ought to do this so like what I would love to do is I would love a program where we say you know what take all the smartest people have them come here for two years by the way if we can do this let's forgive your let's forgive some

Starting point is 02:19:45 student debt as part of that, right? So like, let's actually have a real tradeoff, which is you do public service and we'll give you some financial compensation. And oh, by the way, I want to work with the private sector and say, you know what, we're going to get a private sector employer to guarantee you a job when you finish your two years here. And they might even give you full credit for those two years. You come in as a third year in that. And like just work on that stuff, right? So, you know, that's what we need to do. And look, I've been using this term that's terrible that my kids joke at, which is make government cool again, which is Magaca, if you pronounce it out loud my my my uh my uh my uh marketing team who's sitting here next to me off

Starting point is 02:20:19 camera yeah don't doesn't run off the tongue doesn't really yeah it's not it's not it's not the great attack but like that's what we have to do like we have to make civil service like super exciting and the good news is like we've got no shortage of like moonshots now right so like AI right like how do we transform the government with AI that's a great moonshot let's go do that but we need like a you know Apollo mission like moonshot which i think the president has given people with AI we've got to go tell that story and you know if we can do that then i think like we're in a totally different situation are you going to be visiting college campuses for career fairs at all are you

Starting point is 02:20:53 are you're going to pounding the pavement sounds very i would love to look you all know this having been in the valley look if you're in the valley 99 percent of your job is recruiting basically like that is like probably the most important thing that any manager does and yeah like i don't think any of us is beneath that we got to go sell so yeah i'd love to go to campuses i'd also look i i want to we've We've been talking about campuses. I also want to be clear, though, one of the priorities the person has, which I totally agree with is we shouldn't use credentialing as a shortcut for this stuff. So look, I don't care if you went to college or not. If you have the skills to do this job, like, we got to go find you too. Look, college campuses are nice aggregation points and make it more efficient. But like, we need to go find anybody who has a, you know, technical degree or a trade degree or anybody who's just really smart and capable and go find those people. And we hire them not because they, you know, have a, you know, a diploma, but because they actually can contribute to the workforce. or even like experience at a startup like they've been there for a couple of years they've vested they run to the next thing go do a tour in the government yeah yeah last question have you had any pleasant surprises since starting your job anything that you're like oh that's actually

Starting point is 02:21:54 run pretty well yeah you know look i'll be up so to be totally honest look um there are my pleasant surprise which is i don't think it's surprises look there are very good people here who are who are really care about what they're doing so look you know everybody in the government here there is a serious element of public service and they all take it very seriously and believe it and believe it and it's incredibly like noteworthy what i what i really think is look i think the system has failed them which is look as as leaders and managers we have created a system where you know we've told them do not ever make a mistake do not ever risk innovating because we don't you know look you guys know the valley right in the valley we always talk about look we're looking for uncapped upside on

Starting point is 02:22:30 stuff yeah you get fired for not taking the risk that's exactly right there is no value today in in in maximizing for uncapped upside if that means you also take an extra 5% of downside risk and again like i want to be totally clear we can't be cavalier you know we're dealing with people's you know social security or we're dealing with national security so we can't just you know literally throw caution of the wind but we can accept that there are some things where we may not get in the 100% right and then we'll fix them when we do and we have to have a culture to do that so that to me has been again the very positive upside surprise which is and which i hope will prove true which is if we can change the incentive system. I think you have really good people who will do what the incentive

Starting point is 02:23:07 system and sends them to do, basically. But right now we just, we have an incentive system that, in my mind, at least, kind of encourages behavior that just is not, you know, efficiency maximizing, is not innovation maximizing and, you know, is just outdated, I think, in a world where, you know, we know technology and the needs of the government are going to change very rapidly. We need to be an innovation maxing. Let's do it. I love it. Thank you so much for joining. Thank you for serving our country and rallying so many smart. people to join you. And thanks for breaking it down for us.

Starting point is 02:23:35 This is very helpful. Thank you so much. I appreciate it. Don, you take care. Bye. Cheers. Bye. We need a Luke Ferritour for the CIA. We need to send Luke Ferritour to North Korea, infiltrate Pyongyang, get behind enemy lines, and turn it into a capitalist utopia.

Starting point is 02:23:50 Make South Korea look like a complete blackout by comparison. You've seen that map of the North Korea's dark and South Korea is super bright. More lights in Pyongyang than all of South Korea combined. Luke Fair tour on the front lines we get it done. We have our next guest. This is breaking in real time. So John Exley hit up Peter Salas over a Discord. Oh really?

Starting point is 02:24:13 H.R. apparently just threw a note on Peter Salas just posted guys at TBPN, WTF. John Exley, I think I'm in trouble. HR just threw this on my calendar. And it's Peter and HR discuss TBPN issue. Wait, is this real? No, I think he's joking. But very good stuff. I love it. That's amazing.

Starting point is 02:24:32 Thank you for show. Peter, come on the show. We're going to do a, we're going to figure out your cloud, your cloud needs live. We're going to have people live bidding. Yeah, yeah, yeah. We should have three, we should be Shark Tank. He's the Shark. We have three hyperscalor cloud SDRs come on and pitch.

Starting point is 02:24:50 Okay, this is what we can bring to you. This is what we're asking for, we got 100,000 H-100. It's an auction for who can deliver the lowest price. Exactly, exactly. Anyway, we have our next guest in the Temple of Technology. you. We have Kyle from Contrary. How are you doing, Kyle? Good to see you. Welcome to the stream. How's it going, guys? What's new in your world? Break it down for us. Well, we're just launching our latest deep dive from Contrary Research. So for folks who don't know, Contrae Research is

Starting point is 02:25:19 our private markets research database. We launched a couple years ago. Contrary is a venture fund, but our focus is on talent and on research. So finding the best ideas, best people bringing them the other. And so Contra Research has published research on 500 different companies. I think we've got most of your sponsors on the list. So we're working our way down. But we just published all the latest deep dive on building an American TSM. So TLDR of the piece is the idea that we're completely dependent on Taiwan for 90 plus percent of advanced semiconductors. And it's probably the dumbest bottleneck that we could possibly be in. And it feels like we're basically just hoping that it doesn't become a problem when it could become the most significant

Starting point is 02:25:59 geopolitical flashpoint and effectively lead to World War III. And so it feels like there is something we should do about it. And so we kind of go through the options of, do we build it from scratch? Do we borrow it from TSM? Do we try and buy it from some willing sellers? It seems consensus that Intel is not the American TSMC, is Samsung the American TSMC? Is Samsung the American TSMC? We've seen a lot of progress from both of those companies. Elon doing a big deal with Samsung, TSM obviously seeing great results out in Arizona. What's your take on just porting or expanding the current set of fab companies that are doing quite well?

Starting point is 02:26:36 Our biggest takeaway from doing the research is that a little bit that the ASMC is more of a mindset than a specific company, it's an ecosystem, that we have to build a lot of different aspects of this. There's a ton of startups that are building a lot of advanced stuff in chip design and using AI and that. and TSM is pouring 165 billion into the US more so.

Starting point is 02:26:59 So there's a ton of things that we can take advantage of. The biggest limitation is that when you try and build a lot of this stuff from scratch, you just don't get there quickly enough for it to make a difference, right? There's a bunch of stuff like the folks at Anderil, and they have this idea sort of internally of China, 27, where it's this idea of, you know, if China's going to invade Taiwan, it's probably going to happen over the next, you know, call it four or five years. She has talked about 2027 specifically.

Starting point is 02:27:24 So this is an urgency thing. This is not a long-term bet. And so the question is, how do we get to scale where, if China was to take Taiwan tomorrow, is there something that we could do to have some capacity here? The unfortunate reality is that the startup ecosystem, as great as it is, and as much as it can benefit us in the long run, it's not going to get there quick enough. As much benefit as we get from TSM, partnering a lot of the results they're having in Arizona. There's a huge cultural blowback in Taiwan because they have this Silicon Shield

Starting point is 02:27:52 where they think of our dependence on them as their protection from China. And so, yes, TSM wants to pour a bunch of resources here. But whether we get those sort of leading edge nodes that allow us to compete for things like AGI and to really compete with China, that is a much longer battle. And so despite the fact that Intel is struggling, it's basically sending up emergency flares. You guys talked about it on the show. Basically in their last quarterly earnings, they talked about, you know, we're going to do our best. And if we don't get material customers, it may not be economical for us to continue to compete

Starting point is 02:28:22 in leading edge nodes, which is going to be a huge hit for the U.S. to stay competitive. And so our thesis in the piece is that we basically have to take Intel as our only hope of getting to scale quickly enough. Intel's not going to do it on their own. There's a bunch of stuff that we have to do to make that possible. Yeah. So what's the biggest request from TSM or Taiwan? Like should we be pulling the, hey, we'll invest alongside you, will subsidize.

Starting point is 02:28:48 We'll give you tax cuts to build the second, the third, the fourth fab. America or should we be more focused on let's commit more defense resources, more government spending to Taiwan to create, you know, an American shield that's independent of the Silicon Shield or maybe both. Yeah. I mean, there's definitely when you talk to all of the major defense companies, Palmer Lake has a great line where he talks about turning Taiwan into a prickly a porcupine that people don't want to step on. That is absolutely priority number one to make them, to give them all the capabilities that they need. and the folks standard all are on the ground in Taiwan all the time. So that's a huge component of sharpening the partnership. I also think that you need to emphasize that American companies need to be, the government needs to incentivize American companies to be purchasing American-made semiconductors as much as possible.

Starting point is 02:29:41 So as you reshor more of this stuff to, whether it's TSM efforts, whether we literally, you know, nationalize Intel and take it and take the foundry business, private, right? Like Dylan Patel, who you guys have had on the show and is an absolute rock star, he has made it abundantly clear that the survival of Intel Foundry is critical to America's economic and technological dominance. And so we have to take that seriously as well. And there's a bunch of incentives that we can build in terms of making, you know, getting people access to semiconductors that are made by Intel in the U.S., by TSMC in the U.S. We have to incentivize people to be using our own ecosystem so that we get the reps we need to get as far away. from dependence on Taiwan as possible.

Starting point is 02:30:22 Do you think that Lip Bhutan is the right leader for this transition for Intel? It seems like they need to, with broader support, reinvent themselves. And yet hearing Lip Bhutan on earnings calls and just talking through, it just feels like cut after cut. He's good at firing people, but is he really good at fire? I haven't been, I haven't been inspired by, he's definitely not carp on the mic. is not exactly inspiring people. So I'm curious.

Starting point is 02:30:53 Karp also has like 1,000 employees and I'm pretty sure Lipputon has like 100,000 employees or something. Yeah, they, so Intel has more employees than TSMC and Nvidia combined. Yeah. So he's got plenty of people that you can fire. The biggest thing that is compelling about Intel is that they are already in this process of cultural change, right?

Starting point is 02:31:14 You look at that and it's back to 2005 was the first time they had a CEO who was an engineer by trade. And basically they went through 15 years of financialization. Like, it was literally the Jack Welch playbook of just dumping money into stock buybacks and robbing R&D for decades. Those CEOs were the ones that put them on the path sort of stumbling, losing their lead. So, like, even with Gelsinger, like, that transition is already in its way. Like, putting engineer, they talk about bringing the nerds back. And that transition is already in the way, which is important. I think the cultural leadership that you should be paying more attention into is the leadership level at Intel Foundry specifically.

Starting point is 02:31:53 When you think about Intel's two core businesses, you have Intel products, Intel Foundry. Intel Foundry has had four different leaders over the last three years, like some of them lasting no more than two months, right? And what was compelling this idea that like you can't, you can have this sort of within a division leader who can be really inspirational. I think the folks at Waymo, they have a co-CEO set up, but it's their former head of policy and then their former CTO, you have the technology, you have the policy. Like, that's a great duo for sort of Waymo setup.

Starting point is 02:32:23 Something at Intel Foundry that could be similar could be really compelling. The thing that's the biggest concern for me is that the first person they had, once they started breaking out Intel Foundry into a separate P&L, the first CEO, the first leader of Intel Foundry that they had, they called him the president of Intel Foundry. He reported directly to Gell Singer. Four leaders later, it's now, this person is the general manager, of Intel Foundry. They're also the chief global supply chain officer and the chief technology

Starting point is 02:32:50 officer of Intel's core business. Meanwhile, like Intel Products has its own dedicated CEO with the title of CEO. I think the biggest problem is not necessarily even Liputon, but it's more about are we actually acknowledging that Intel Foundry needs to be a growth engine that you can invest in to be able to build back dominance, and that's absolutely not how they treat it. I feel like earlier this year there was a rumor that Elon was kicking the tires on Intel is how real was that? Did he kick the tire and? It was the PJ tracking. That was how they all. Yeah, but it, but the PJ tracking felt like a bit silly because everybody was in Mara Lago. Yeah, everyone was there. That's right. You can you could spend probably a lot of compelling

Starting point is 02:33:31 narratives based on all of the people who were there at the same time, right? Yeah. And in terms of like what is actually sort of official, the two things that you know for sure are there was talks that that TSM was going to acquire Intel's Foundry business. Their board flatly denied that. That that wasn't true at all. Then there was talks that they might invest heavily and run a joint venture where they take over operations of Intel's Foundry business, even if they're not buying it outright.

Starting point is 02:33:57 And what's funny is that they did not deny that outright. They refused to comment. And so the general census of folks is that that was a conversation that was active. Yeah, that makes sense. How much of the race for American semiconductors is driven, by the question of like founder mode, just that abstract question of, you know, do we need Elon in the seat leading? He said he was going to be walking the floor at Samsung. Obviously, like the founder mode pattern has seemed to work in so many stuck kind of stagnating worlds like

Starting point is 02:34:31 rocketry, electric cars or Elon's gotten in and kind of jarred things loose. But is that something that we should be looking out for or optimizing for? 100%. I mean, when you contrast Lipu versus Jensen, it's like night and day difference, right? You do not have visionary leaders in chip manufacturing in the U.S. because we don't do it anymore. Like, it's not a fundamental part of what we do.

Starting point is 02:34:57 There's not a core DNA there. And so do you need somebody who is that visionary leader? Absolutely. And does Intel have any of that DNA? No. And so when you think about what needs to change, I think our thesis and takeaway after doing six months of research and drilling into all this stuff is that you cannot ignore the entire ecosystem and that leader, that visionary leader role

Starting point is 02:35:17 is absolutely critical and that is an unanswered question. Like we don't have that. Like we don't have an, you know, somebody retweeted our post today and said, we just need an Elon Musk like, you know, Herculean act of God to be able to make this possible. And like, the takeaway is accurate, the how to, to do that is much more difficult. Yeah, yeah, it can't be manufactured. But, I mean, green shoots all over the place,

Starting point is 02:35:44 lots of cause for optimism, but... So hopefully the piece starts a conversation can be a catalyst for change. What are you hoping to see out of like the immediately next quarter for Intel to get on the right track? The biggest opportunity is for Intel to stop treating Intel Foundry like it is an ugly stepchild, like it is this like embarrassing accident that they happen to have

Starting point is 02:36:05 and they're trying to distract people over this other things. thing or dress it up like it's this fancy thing. And the biggest problem is, and this goes back to this is a great conversation. I've heard a couple of folks have. They talk about the, I think it was Bucco Capital talking about like the greatest thing that Elon Musk has built independent, even even thinking of Tesla, SpaceX, everything, it is the investor base at Tesla is got to be the most incredible investor base any public company has ever had to let him do what he's doing and to have the vision and everything. Intel is just smattered with. what Palmer would call Wall Street weenies is everybody's just thinking about it is how can we optimize this thing as effectively as possible and it's like that is not how you build the future nor is it how you build American dominance and so really you need that investor-based turnover and it feels like that comes from narrative where if you're telling the story of Intel foundry we can get a visionary leader we can have this opportunity they're already at scale they have a lot of the technology they've they have sort of caught back up in many ways they're still failing operationally pretty miserably and so the opportunity is

Starting point is 02:37:07 like tell that story and get an investor base that is stoked to be investing in the ASMC. Well, thank you so much for joining. It's a pleasure catching up. We'll talk to you soon. Have a good rest of your day. Thanks for you guys. Thanks for coming on, Kyle. Great work. Speaking of Anderl, our next guest works for Anderl. There we go. And she's the general manager of Anderl RMS. And we're excited to talk to her about the new rocket motor facility. But we'll let her break it down for us. Welcome to the stream. How are you doing? We have have one minute while we get to keep clapping John just keep clapping just keep clapping welcome to the street how are you doing what's happening oh it's a really good day just just commenced or finished a ribbon cutting with our new

Starting point is 02:37:54 facility in coastal Mississippi with Chairman Wicker about 10 minutes ago so good day so far fantastic tell us more about this facility what are you making how big is the facility how big we're the scissors How big were the scissors? You know, the scissors were not as big as I was expecting. I mean, they were big, but they weren't like the economically big. No, we just finished a full-rate production facility for kind of what the 2020s can do for automated robotic full-rate production of solid rocket motors.

Starting point is 02:38:27 We have a 450-acre facility in Coast of Mississippi, about nine buildings. And when we moved in here, it was a multiple-bult facility in 2020, and we saw the good bones it had and the ability of what it could do. So we took one of the buildings, the far south end of the campus, nearly quadrupled the footprint, got world-class engineers, specifically from the automotive industry, to really look at what solid rocket motor production could look like in the 2020s with robotics, automation, and really putting, you know,

Starting point is 02:39:01 robotics everywhere where there's a safety critical or a quality, component. Speaking of robotics, what's behind you? That is one of two robots that are involved in the casting assembly. So we go through a mixing of solid rock a propellant and then you have to cast it where you you're essentially filling a mold like you were solid rocket motors is a lot like making a cake. You mix together dry ingredients, wet ingredients, and then you pour them in a mold and you cure in an oven. And so this is the robots that's used for the casting process. Can you give us a view into the shape of the company?

Starting point is 02:39:39 I know Adronos was the rocket motor company that was acquired, but it sounds like you've hired a lot of people. How big is the organization now? So you are right. We started as Adronos. I was one of the two co-founders of Adronos back in 2015 with my co-founder, Chris Stoker. And we grew that into about a 40-person company,

Starting point is 02:40:02 the time of acquisition by Anerl, who was previous to that had been one of our customers, so a little bit of a vertical acquisition play. We have since grown that organization to just about 200 people today for Andrew Rockermotor Systems. I sit as the vice president and general manager of that business line. What did you see back in 2015 when you started the original company that kind of caused you to take on the mission? It felt like broadly, Silicon Valley started kind of being aware of rocket motor like supply chain challenges, I want to say like in 2022, but you clearly saw it way, way ahead.

Starting point is 02:40:46 Yes, this is all very much before all of the, I guess, need that has risen for solid rocket motor production enhancements. Really back in 2015, I had developed a brand new formulation called Alatech that can bring more performance to the industry. I saw a need to commercialize it. And naively thought that I would be able to progress it to a spot where the two kind of incumbent providers of solid rocket motors would fight over themselves

Starting point is 02:41:15 to get access to the IP. But what I quickly realized is the desirement for them to innovate and get these new propellants was not there. And the only way I would ever be able to see full adoption and utilization of that product was, was if I was my own customer, if I was the solid rocket motor provider. And a big piece of my PhD at Purdue

Starting point is 02:41:40 was looking at innovative ways to process energetic materials, new ways of mixing, new ways of doing things. So I was able to leverage those lessons along with taking what a state of the art for kind of automation and different manufacturing processes, put them all together to create what my vision was for what solid rocket motor production could look like in the 2020s.

Starting point is 02:42:03 Very cool. And we really were kind of ahead of, you know, all of the other suppliers that have joined into that market. Amazing. Well, thank you so much for calling in on such a busy day. Congratulations on the massive launch and good luck with the next phase. I'm sure you're going to be making a lot of product very soon. Yeah, and hopefully copy.

Starting point is 02:42:24 I don't know. Last question I had, is the idea for this new facility to be a model that you would copy and paste to scale? to scale production, or is this going to be able to kind of take you guys all the way? No, that's exactly the purpose of what we are wanting this facility to do. It's really looking at a manufacturing line that is agnostic to what goes through it, so we can do anything from a small two inch diameter motor to something that's really big, up to 32 inches in diameter. And we are agnostic in the manufacturing process, But really focusing on kind of the one-piece flow out of manufacturing practices, we can take this facility and copy-paste it elsewhere.

Starting point is 02:43:08 On our 450 acres, I could fit another two full-rate production facilities. Each one, if you look at a mid-scale tactical motor, like say 9 inches diameter, we can do about 6,000 of those a year out of one facility. So if I place another two of those here, you know, that's just a linear increase in production without having to have a brand new giant explosive campus. Then, alternatively, I can take this small footprint, agile manufacturing process and place it strategically for integration purposes with our different customers, both domestically and abroad. And we are on the record looking at, you know, multiple places for that, including Australia through the new guided weapons enhanced ordinance program. Amazing. Well, thank you so much for joining the update. Have a great day. We'll talk to you soon. All right. Thank you. Bye. Up next,

Starting point is 02:43:56 We have Sean Henry from Stored. We ran into him in New York City. Got a chance to sit down and have the same hotel. Yeah, you're staying at the same hotel. We just said, well, we had breakfast. He just sat there and listened to us. Yeah, he was walking by. He was busy.

Starting point is 02:44:08 We said, hey, sit down. Sit down and listen. Supply chain and logistics. About tariffs and the de minimis exemption. We will welcome him to the stream. How are you doing? Great to be here. Thanks for having me, guys.

Starting point is 02:44:25 Good to see you. It's great to see you last week. Where did you land? Where are you now? Back home in Atlanta, no longer having fun in New York, having some breakfast with you guys. Yeah, very nice. And business is good overall. Crashing breakfast, I should add, I guess.

Starting point is 02:44:40 It was a great breakfast company. We were crushing breakfast. It didn't feel like you were crashing because you were probably, it was a busy day for us. You were probably even busier. And we requested that you hang with us. It was fun. and shared some insights on all the different things happening in your world. So yeah, give me the update on tariffs, the de minimis exemption, where things, how we kind

Starting point is 02:45:05 of got here and then where we are now and then we'll get into where we're going next. Yeah, absolutely. So I guess background, there's two types of core tariffs. One is the general commercial, something's coming into a U.S. port and you're charging a tariff based on the commercial value of the goods at that time. And that's largely what was rolled out at Liberation Day a few months back was all of these tariffs, particularly around large imports. But there's a separate category that had a big action last week, which is the minimis exemption, which is really started in the early 1900s, mostly for international travelers, think, hey, I want to send a package back to my family. Well, there's these rules created that, well, as long as that package is under $800 and in these categories, you don't pay any tariffs.

Starting point is 02:45:49 Well, what's happened the last few decades is if I want to store my inventory locally in the U.S., meaning bring it through a port, hold it in the U.S., now ship it locally, if I'm say, let's paying $2 for warehousing, $7 for delivery, and $5 for the tariff to get it in, I'm paying $14 to ship that locally. But if I never bring it into the U.S., if I just keep it in China, keep it in Europe, put it in Mexico, Canada. And instead, I'm maybe paying $1 for local warehousing and labor, a more expensive package like $9, $10 internationally, but I never pay the tariff. I'm not comparing $14 to ship my unit through the U.S. versus maybe $10 to ship it from international. That's a big difference on your

Starting point is 02:46:35 average product. And so Trump and the administration had formerly said that they've been waging more on this since even before election day, but they formally said it was going to go away in 2027. So since the start of the year, brands thought they had maybe two years to get ready for this. And all of a sudden, last week, you saw it announced on Wednesday that's going away on August 29th. And so now brands are rapidly trying to move inventory into the U.S. Yeah. And is it apocryphal to say that this all like Timu and Sheehan like kind of started this trend? Or did they just merely capitalize on it? Where there other other companies that kind of found this? it's not necessarily a loophole.

Starting point is 02:47:14 It's more just like an opportunity that if you exploit it to the max, you can scale a multi-billion-dollar business. A lot of people were using it. Nobody exploited it to the same degree. Yeah, I wouldn't call it Chian and Timu, just like, you know, the tourist example. It's like they're shipping billions of dollars through this platform. But are they the, are they the real progenitors of the idea? They've definitely exploited it at a greater scale than anyone else. Sure. But what's crazy is that if you look at the top 100, let's say, Shopify businesses, over 50 of those, roughly was the estimate, are tripping out of Mexico into the U.S.

Starting point is 02:47:52 So this is very prevalent across brands of all sizes, particularly very large in the apparel category. And just some quick numbers. Last year alone, there was an estimated $64 billion of commerce that entered the U.S. through the de minimis exemption, which is roughly 10 billion of missed tariffs and roughly four to five billion of missed U.S. logistics infrastructure revenue. And so broadly speaking, logistics, U.S. oriented companies like ourselves are very excited by this, it's very hard to compete with Chinese and Mexican and other labor, real estate and no tariff versus local fast shipping. So yeah, what, I mean, this sounds like a huge tailwind for your business, but what are your customers actually coming to you with question-wise? It sounds like

Starting point is 02:48:39 there's a very quick shift on the horizon around the de minimis exemption. So they're coming to you and saying, hey, I need to move all my inventory from Mexico or China or Taiwan or Vietnam into Atlanta or somewhere else as soon as possible. Is that basically what's happening? Exactly, because one, I think it's important to note that when you look at tariffs, a lot of people apply it linearly. Okay, a 10, 20, 30 percent tariff product cost is going to go up 10, 20, 30 percent. That's on the commercial value of the individual unit.

Starting point is 02:49:12 And so much of the cost is both margin for the brand, advertising, local U.S. logistics. And so these tariffs don't translate one-to-one. for how it's going to impact the consumer. But at the same time, we're not necessarily talking to the brands as much about changing manufacturing origin to get away from those tariffs because the impact can often be absorbed for these mid-market brands who have real profits, real growth.

Starting point is 02:49:36 What we're talking about is back to that math I gave of, if you were spending $10 to ship it internationally avoiding a tariff, but you're doing a one to two week shipment, so a slow delivery cheaper. And it was, you could do two, three day delivery, in the U.S., but maybe $14 all in with the tariffs, well, all of a sudden, if you're now spending, or I said 11 at first with the tariffs or in the U.S., all of a sudden now, if you're going to jump all the way to 14, it doesn't make sense to pay more and deliver

Starting point is 02:50:04 in two to three weeks cheaper. But now all of a sudden, there's this massive influx of volume where all these brands are saying, how fast can you get me live in the U.S.? I'm in Mexico, I'm in Canada, I'm in Europe. And the problem is with outdated technology, most logistics businesses are going to tell them four to six months and or with the influx volume, a lot of capacity is becoming challenged again like we saw all the way back in 2020 and 2021 with such shortages of warehouse capacity. It's not that there's not leases on the market. It's that ready-to-go warehousing capacity with all the infrastructure, technology, and labor, that capacity is rapidly getting gobbled up. And so we actually had a case study on our website from

Starting point is 02:50:44 exactly what's going on where True Classic T's a great example, massive. and $800 million t-shirt retailer wearing one right now. Earlier this year, they were stuck in Mexico, and the Mexican president first signed away their exemption, which was, hey, if you first bring it into Mexico, and it's here for less than 180 days, because we know you're going to ship into the U.S., you also never pay our tariffs, but please pay our labor, our real estate, et cetera. Well, they first signed that away. There's since been a pause put on it, but we already migrated customers.

Starting point is 02:51:15 Take someone like True Classic. They were often told, we can get you live in the U.S. in six months. That's insane cost that they're going to face for those six months relatively. We had them live in 18 days from meeting us to go live, and that's all because we're really the cloud in comparison. Exactly. Last question from me, how solid are we, I mean, when we went into, when we went into Liberation Day, a lot of it was just uncertainty from the business community.

Starting point is 02:51:42 How confident whether or not it's good or bad for your business. how confident are we that we will be at least on the same course for whether it's good or bad for the next few years for the next 12 months like how much confidence do people have that these set this set of rules that are in place right now will stick personally i think the confidence is going up i think this is one of the last exemptions people were curious about and while there are still a few negotiations going on with specific countries the kind of broad general tariff the reciprocal tariff and even key countries have already been set. And frankly, I tend to believe the administration is liking the results.

Starting point is 02:52:21 So far, we've taken in over $150 billion of incremental revenue since Liberation Day just via tariffs alone. There was a GDP positive, or sorry, kind of balanced budget, positive month. So it's all these tariffs and more. And so I don't think we're going to change course and go backwards. And I think some of the logic is while it may drive a slight increase in cost on the front end, you have to wonder what it's going to do on the back end when there is more production in the U.S., more middle and lower class jobs that have been competing with Mexico, China, these other countries labor on logistics, and ultimately, if they're able to use tariffs to impact other

Starting point is 02:52:58 taxation on citizens, leaves me thinking the administration is going to stay a course on this. Makes sense. Awesome. Well, congratulations on the growth, and it seems like a lot of these decisions are going your way. So happy to have you on Team America. America building infrastructure and everything that we need to bring products to market in the United States. So thank you so much for joining. Great to see you, Sean. We'll talk to you soon. Absolutely.

Starting point is 02:53:23 Have a good rest of your day. I'll talk to you. Bye. Up next, we have Andy from Two Sense. We've highlighted his posts many, many times in the show. Excited to meet him and chat about the business and his day job outside of posting because he's built a very, very fun social network. I'm excited to talk about it. is your net worth. Andy, welcome to the stream. How are you doing? Great to be here. Thanks

Starting point is 02:53:48 for having me. Are you in a secure location? You've probably upset a lot of people with what you've built, but it's opt in. I guess it's opt in, but it just feels like something people would push back on, right? You've gotten pushback for that, right? To a degree. People have been a lot more positive about it than I thought they would be actually. Okay. I think what happened is I tapped into a latent anxiety that everyone actually had. And it seems sort of like people are like, Thank God someone's doing this so that I don't have to worry about it anymore. So is it, is it anonymous? It's just your network.

Starting point is 02:54:19 Yeah, yeah, yeah, yeah, explain the product for people that haven't seen it. I think a lot of people have probably seen it without realizing it. Yeah, maybe seen screenshots of like polls or comments or things like that, which I think are fascinating. But, but yeah, explain it for the audience. Yeah, so we're building an anonymous social network where your username is your net worth. The main idea is to provide a verified. place to have financial conversations that are difficult to have in person or with other people around you because of the inherent private nature of finance. And so we're collecting

Starting point is 02:54:53 net worth information from bank accounts, brokerages, crypto wallets. And then later we're also going to do real estate and all kinds of other financial assets. And we're trying to calculate this one big number that we can assign to everyone and allow you to speak from your position, basically. What are some of the key learning insights? I mean, I think the polling function where people can, users can ask a question and then see, like, you know, let's say it's a yes or no answer. You can see how much net worth is like backing up the results. And so I feel like it exposes like, okay, what does, like, what side is wealth on on this specific issue? But I'm sure you've had a bunch of other interesting learnings.

Starting point is 02:55:34 I think probably the most interesting thing is when I set out to build this, I thought it would be inherently a place for financial discussion where people would talk about tax strategies and ARBs and alpha and stuff like that. And it's really become more of a general place to hang out. And what I figured out is actually every conversation is a financial conversation. Your net worth and the experiences that have led you to that number sort of dictate the way that you are going to look at other things as well. And even if you're talking about something that's kind of boring or weird, that number is still relevant in that conversation, even if you don't bring it up every time you talk to someone. Totally. I feel like there's a lot of anonymous social networks that have gotten, like, problems with like bullying and stuff and just like toxic communities because of the anonymity. Have you run in any problems?

Starting point is 02:56:23 Are you fighting it in any particular ways? Or do you think it like... Yeah, do people ever come on there and try to eat the rich? It's just net worth negative $2,000. We are actually in an incredible position as a social network because our moderation strategy is to just ban your bank account. And so if you break the rules on the platform, we can just block out the accounts that you've connected with.

Starting point is 02:56:47 That's so interesting because normally on like Reddit, you could have somebody that's angry and then they could just create, they could be getting banned and just recreate accounts. How would you create new account with a huge bank? You have to set up a new bank account, transfer all your money over there. That takes a long time. And if you do that enough times, eventually you will make other people angry who will ask you why you're making so many bank accounts. And we don't even have to worry about it.

Starting point is 02:57:10 That's very funny. That's wild. How's growth been? What's the news? Are you monetizing yet? I can imagine a bunch of different ways to monetize. I can see, you know, you have interesting data that other social media companies need to kind of piece together through behavior and things like that.

Starting point is 02:57:26 But I imagine the big social networks try to build a profile to understand, like, what is this person's purchasing power? You guys get it. The user's providing it. But how are you thinking about monetization? I think there's a couple of big strategies that we can try to go after. Referrals is something that I've looked at for a while. If you look at a public company like NerdWallet, a lot of their revenue is coming from

Starting point is 02:57:53 referrals to loans and mortgages and credit cards. And from our position, if we have a bird's eye view into your finances, we're actually pretty well equipped to show you products that would benefit you financially. So we're not just selling you something, but we're also trying to sell you something that makes sense with the type of portfolio that you currently hold. Yeah, it's like, hey, we notice you're not using leverage. Did you know that you could lever up massively? We'd love to refer you to Harry Winston, rare jewels of the world, discover the sunflower collection. John, what are you reading? I'm reading how to spend it.

Starting point is 02:58:25 It's the wealthy section of the financial times that comes on the weekend. Refer you to Vacheron Constantin, the quest. Vacheron Constanton celebrates seeking excellence for 270 years of doing better if possible. What were you doing before this? These are going to be great referrals. You got to contact the ad salesperson at HTSI.

Starting point is 02:58:50 They got the Graf Diamonds ad in there. This is going to sell like hot cakes when you start monetizing. That's the broad plan. That is the broad plan. Before this, I was doing basically a bunch of different side project apps. Two cents started as a side project. Sure.

Starting point is 02:59:04 And I was just trying to figure out something that could ship out the door three or four times a month or a year and see if anything would get traction. And so the early growth on Two cents has been really amazing. It's probably the most popular thing I've ever built and almost entirely organic. So it has come from Twitter on the timeline from other posters wanting to sign up and beyond. it I've actually gotten a lot of comparisons to this earlier app poster which was popular a couple of years ago I invested in poster yeah it was a wild it was a wild place last but it's so you know people are it's interesting a lot of people will use two cent that have never had an alt or an anonymous like account and I

Starting point is 02:59:49 think it becomes extremely freeing for them to feel like they can have conversations online without being tied back to their LinkedIn, you know, or without being tied back to their family. And I do think, yeah, I just think you've tapped into something super interesting because money is so, is just at the core of everyone's life, whether they want it to be or not, and giving people a place where they can talk about it freely. Of course, there's still going to be judgment. Like, of course, there's going to be people on the app that are going to think a certain way about someone's financial situation or you know what they're saying or how they're spending their money but it does um i feel like the next uh i feel like it'd be funny to build out uh i'm

Starting point is 03:00:31 curious would you ever build out like a feed of like the users kind of like if they obviously opted into it but just like purchasing uh i feel like i feel like a lot of people would would be very fascinated in that um in a different way than like venmo used to do it which i was like why is Venmo a social network you know it's like I don't want like I don't want people to know what what I did you know whatever but yeah this is on the roadmap we would love to have a feature where you can opt in your transactions your recent transactions and then almost quote tweet them and say like I bought this $18 shawarma at this bodega it's fucked here's a picture of it and it kind of proves that you did that right like you're not just saying it and same thing for brokerage

Starting point is 03:01:15 movements. If you sell a bunch of Apple stock or whatever, you can write your due diligence and then also prove that you actually made that sale. So you're not just saying you did it. We're proving it through financial history that it happened. And obviously, that's going to be entirely opt-in. You can choose to show things or not show things, but it'll be the only social network where you can have these types of conversations where you can prove that you're actually moving your money or making these transactions that you're claiming that you are. Very cool. Speaking of money, have you raised any money? We have. We have raised $3 million from Dragonfly and starting line.

Starting point is 03:01:48 Congratulations. Was that just announced today? I didn't see it anywhere. It was yesterday. The official two cents account on two cents increased by $3 million. Right. And so he saw it. Where our spot on the leaderboard has jumped up a couple of places, which I'm very happy about. There we go. That's great.

Starting point is 03:02:08 What's the number one spot on the leaderboard right now? Oh yeah. Who's the richest? Right now we have. So I don't know because it's anonymous. But they are at 26 million. 26 million. Verified liquid. Wow.

Starting point is 03:02:20 Terrified and liquid. That's pretty crazy. Might be an AI researcher. Maybe. Maybe. You got to get MSL on there. 8 million 333 every month. You're like, oh, okay.

Starting point is 03:02:30 I know who this is. Got a $100 million contract. Anyway, thank you so much for stopping by. Great to meet you and have a great rest of you today. Congrats on the round. It's super exciting. Thank you for having me. Bye.

Starting point is 03:02:41 Cheers, Andy. Up next, we have Gabe from Harvey, AI. Very excited. to talk to him about legal AI and the impact of open source. I want to know if anything changed this week for his business. We will bring in Gabe from Harvey AI, the legal. Hello, welcome. How are you doing? What's going on? Good. How are you guys? We're great. Great background. Great background. Is that mahogany? Yes, the official wood of business and law. Yes. Mahogany, some bucks. Got to look professional. Fantastic. What's the latest,

Starting point is 03:03:14 give us the update. I have a bunch of questions that will go all over the place, but give us the update in your world. Yeah. So last week hit three year anniversary, have kind of scaled up to 350 people, 500 customers, just hit 100 million revenue. Let's go. There we go. Love hitting the gong for revenue. We hit the gong a lot for $100 million rounds, but it feels better when it's real customer demand. We have this silly soundboard where we play the overnight success sound but uh overnight success yeah that one um and usually it's because some founders been grinding for like 10 20 years and then they finally hit breakout success but like Harvey is kind of an overnight success what actually set you up for this obviously uh you were in a

Starting point is 03:04:00 unique position to actually go after this opportunity this wasn't just something that you just lucked into obviously so give me a little bit of the prehistory yeah i actually i started doing AI research in like 2012 and tried to do some other startups. And so I think there was a lot of this experience of trying to build these companies without this technology. And I think I was at Meta on the large language model team right before Harvey. And my roommate, who is now my co-founder, Winston, was an associate at a law firm. And I was showing him kind of the GP3 models. And he was showing me his kind of the legal work he was doing. And I think it was pretty obvious these models were going to get much better. And that seemed like a great application. And then I do think there was like

Starting point is 03:04:46 some factor of luck of, you know, raising from Open AI, how good GPD4 was and then kind of really focusing on big law. Yeah. So you add all that in, then we can do the overnight success. Because it's like easy. If you want to just grow really quickly, just spend a decade researching a fundamental technology that will change the world. Anyway, what, yeah, so much to go into here. Yeah, I mean, one thing I want to, you know, you at the this point, I'm sure, are talking to or have closed all, you know, pretty much all the top law firms in the United States. I'm sure the reaction internally at all the different firms, I'm sure there's some excitement. I'm sure there's clearly excitement. Otherwise, they wouldn't

Starting point is 03:05:29 be, you know, signing up and becoming customers. But I posted something last week I was in New York and I spoke with, I was speaking with a lawyer randomly, and he was telling me about their AI, adoption internally and he said and this was his point of view he said adopting too much AI will hurt our bottom line and I posted that note yesterday and it sparked a big conversation you know the obvious response is that you don't pay great law firms and lawyers for the execution you pay them for the overall product and the sort of like guidance and advice and strategy and and all these other things. It's not just like the raw generation of documents

Starting point is 03:06:15 or reviewing contracts and things like that. So how do you know, how are, give us kind of the overview of how different firms are reacting and sort of leveraging AI. And then I wanna hear how you think law firms might need to like reinvent themselves and like kind of even adopt new business models and approaches and things like that over time.

Starting point is 03:06:37 Yeah, so it's definitely like a wide range, both law firms, but also kind of individual partners within law firms. And so we have firms that are still in the, let's test this out, let's see what to do with this. And then firms that are, we have already co-built software products or models with them, and we're revenue sharing and selling that to their customers. So there is kind of the full range. And yeah, I think it'll be interesting to see how it plays out. I think my guess is long term where this is going is, I think,

Starting point is 03:07:09 your point is exactly right. Like I actually think if you look at partners billables, they're actually undervalued where it's like if you want to do a massive public merger, that partner is worth much more than $3,000 an hour, but it kind of gets subsidized by all these associate hours. And so I think there'll be some changing of, you know, how you charge for these. But so far, I think we're still kind of early days in that conversation. And it's much more how do you, you know, get adoption. How do you start upskilling lawyers to use this technology? But do have a lot of- Yeah. The interesting thing i think you know we obviously have a bunch of founders uh that uh watch uh the show and i think it's interesting to look at the invoices you get from your law firm and and just like

Starting point is 03:07:52 look line by line where was i getting like real value and legal advice and strategy and all these things that are extremely high leverage and where was i paying to like recreate a variation of this document or fix a punctuation error and things like that and obviously you can't see exactly but I does it is easy to imagine in the future where in the same way that you have a hundred a hundred X engineer today that's using you know cognition Devon or or windsurf or Claude code or whatever variety of cursor etc. Where they can be ultra high leverage because they effectively have an army of people you know working under them agentically I think you'll see that in it's

Starting point is 03:08:36 hard not to imagine that happening in law where you have this like incredible individual player who's able to like produce potentially an order of magnitude more work in the very near future. Yeah. One thing we're also starting to think about is like it's always interesting to ask why do you have this billable model structure in the first place? And I think one big problem is pricing legal work. And so like the reason you have this model is like these projects are so complex that it's actually impossible to do fix a fee without, you know, this technology where it's just how much does it cost to do this merger. It's like you're going to have all these things that come up. But I think as these models get better, the same way it's

Starting point is 03:09:18 hard to predict, like, how long will it take to fix this bug? But now with these models, you can kind of look at a code base and say, oh, actually, I can tell you, you know, some good error bans. I think there's things like that you can start exploring that make more of these new business models interesting. Have you seen lawyers in big law spinning out and building firms from the ground up to try to disrupt themselves and create new models. I mean, we've seen, we've had the founder of Crosby on, which is like they're building a firm themselves and like focusing on like a few specific types of contracts initially. And I could imagine it's kind of hard. If you have a law firm with thousands and thousands of lawyers, it's hard to like totally change the business model

Starting point is 03:09:57 where if three people spin off and they come to you and Harvey and say like we want to leverage this, ground up, build a firm around this. Are you seeing that at all? Yeah. One of the fastest this growing, I think they might be AMLA 200 firms now is actually partner only. And so I think this model is, I think that the challenge is it just depends on the type of legal work you're doing, but this is also traditionally, like, not traditional. In the past couple years, what firms like PWC have also been doing of how do you bundle this legal work and provide alternative ways. So I think some of this work is getting unbundled. And with different models, you can kind of tackle different parts of the legal work. How much, how much do you guys care about models getting

Starting point is 03:10:36 more intelligent versus just delivering on the current capabilities. Yeah, I think for us, the big challenge we definitely still have is like the models aren't good enough to do the very complex legal work. And so I think for us, you know, Sam has the quote of like try to build some company that like as the models get better, your company gets better. And I think we are very much in that position where it's like I think as amazing as these models are and I think lawyers get a lot of value. We still have so many use cases where it's just like, like the models can't draft these very complex like merger agreements and things like that. They can't look at these massive case law research corpuses or discovery corpuses or data

Starting point is 03:11:15 rooms and like really understand them. And so I think there's a bunch of room both for the foundation models to get better, but also we're starting to think about like can you, you know, custom build these reasoning models given this kind of specific data you have. So I think there's huge room for improvement for the models. What about what about the back office? There's a lot of costs that go into law firms that are that are non, legal work, operations, billing, you know, all that, is that something, is that a focus at all for

Starting point is 03:11:43 you? Is that something you think about or is there just enough work to be done on the client side? Would you do like a legal billing product too? Yeah, I mean, I think that's something we've thought about of, you know, partnering with the folks doing that in the future. We've had law firms ask, can you, you know, help us automate parts of how we do billing? We have a bunch of firms that just buy Harvey seats to do some of this back office work again. And then there's clients that have asked about, you know, can you help us build spend management, things like that. But I think right now the focus is still kind of building the product for, for lawyers, for law firms.

Starting point is 03:12:15 We have a question from the chat. Is the company named after Harvey Spector, the fictional lawyer from suits or Harvey Dent, the Batman villain, who I think also had a law degree? Harvey Spector. Harvey Specter, there we go. Makes sense. It's a great, it's a great character. I want to talk about costs, obviously, tons of revenue coming in the door.

Starting point is 03:12:35 also we're seeing this weird phenomenon, maybe it's not that weird, but like with test time inference, reasoning, you want to put, you know, GPT, what was the Arc AGI? They were putting $2,000 of inference behind every task just to crack that puzzle. If I'm, you know, coming to you and I want, you know, to really make sure that the AI is checking its work fully, I'm probably want to put a ton of tokens behind that. What does the cost structure look like? How does that evolve over time? What is what are the relevant changes that could happen and changes in the landscape? We saw the open source model come out from open AI at the same time even if you're running even if you switch to open source today You still have to pay for energy and GPUs and stuff. So what yeah? How does the cost side of the business evolve over the next couple of years? Yeah, I think our bet kind of from early on has been Focus much more on like capabilities these models are going to get cheaper as you scale get economies of scale You can kind of solve these problems. I'd say right now our cost structure is similar to, you know, if you're using like a chat

Starting point is 03:13:40 GPT where, you know, that gets amortized over the task, you have some tasks that are low compute, some that are a lot. I think Beagle is actually one of the very unique domains where you have these tasks where I want to draft a motion and typically this is going to cost $250,000. I want to do document review and this can cost a million dollars. And so you have these specific problems where you can actually just run models over every single document and throw just a ton of compute at this. And so we're starting to kind of explore, like what do those different models look like

Starting point is 03:14:09 if you're doing tasks like that. But yeah. Lessons from Atrium, lessons from Clear Spire, lessons from binding a actual law firm to a technology company. Seems like it hasn't, not doing that certainly hasn't hurt you, but did you know that one of the students? Yeah, and I'm sure you got a lot of investors

Starting point is 03:14:32 that say, why don't you sell the work instead? of the software. Exactly. We actually had the opposite. Like when Winston and I started the company, we talked to the founders of Atrium and like 30 of the folks that worked at Atrium. And actually Jason Kwan, who at the time was the GC of Open AI, was at Y Combinator when they did Atrium and Sam was as well.

Starting point is 03:14:55 And so we kind of like mentioned that and they were like, you guys should focus on building tech business. And for us, it seems like the scalable play here is like, we don't want to build a professional service firm ourselves. We want to enable every law firm, every professional service firm to kind of become the next generation of firm. Yeah, it makes so much sense.

Starting point is 03:15:15 Microsoft Excel, their team didn't build an investment bank, and yet it's used by every investment bank. And that will continue for a long time. Anyway, I think we have to jump to the next guest. Jordan, you have for coming on. Thank you so much for coming on. This is really fun. Incredible progress, congratulations on all the growth.

Starting point is 03:15:30 Huge. We'll talk to you soon. Bye. And up next, we have another massive gone moment. Let's bring in Kareem from Clay. We'll get the update from him. Welcome to the stream, Kareem, Kareem, Klee, AI. How you doing?

Starting point is 03:15:47 What's going on? How you doing? Give us the latest. Give us the update. What's new in your world? What do you do? Break it down for us. I can give you all those things.

Starting point is 03:15:58 Excited to be here. Thanks for you. Yeah. Well, today we announced that we, raised a hundred million from alphabets capital g congratulations thank you at a 3.1 billion dollar valuation wow three jet blues that's crazy amazing we've been dogged on wild uh that is fantastic so classic overnight success you started the company like a few months ago yeah like eight years ago yeah so i was going to say so the story so give us give us like the

Starting point is 03:16:31 journey how you got here because i think like you You guys have been a massive beneficiary of LLMs, from what I know, over the last few years, but it was not an overnight success. I'll call it a spiral. Spiral. Yeah, I mean, we started the company with the idea of how do we give the power of programming to an order of magnitude more people. And I was saying it took me some time to reformulate that to, how do we give that to, well,

Starting point is 03:17:03 call go-to-market engineers. So it's like half of the company can't code but has all of these ideas of how to grow the company. And Clay basically gives them the power to program revenue instead of just program software. Let's make a lot more concrete. There's been this cool wave of designers going from zero-x engineers to one-x engineers and that's had a lot of benefits in organizations. But what does that actually look like concretely on a go-to-market team? Is that just generating emails faster, managing a CRM, like what are we actually talking about in terms of detail? Yeah, the actually, like, most important part is who should you reach out to? That's actually, like, I would say 60% of kind of like, there's two ways to grow your company. Either

Starting point is 03:17:50 you find new customers or you expand existing ones. If we just talk about finding new customers, 60% of that is finding the right person, right? And then kind of like reaching them at the right time is another 20%. So what we do is, listen, let me give you an example. One of our customers, they have a ton of people just going on Google Maps, looking at all the different locations that they sell to, finding warehouses, and then manually counting the number of parking spots that that warehouse has, because that's a good indicator if they're a good customer. And so we can use Google Maps API and LLMs to do that counting for them. Oh, that makes a tons of us. Yeah. So really, most of it is about like account selection and finding the right people and then the

Starting point is 03:18:34 second part is you know that they just raise a round of funding like us was there some kind of new news story that did they just hire a few people in a department that you're selling to and it's very specific to what your company does in their product got it is this every of us this question on the on the show before but it feels pretty common that some random private equity firm will just be spamming people on the internet trying to buy their companies. Oftentimes there's probably good targeting. Oftentimes there's bad targeting. How close are we to just like eliminating those emails that are just kind of those out that outreach? The spray and prey outreach. When is spray and prey era going to end? I hope now.

Starting point is 03:19:20 I mean, I think that that's kind of like one of our top goals is if you actually, I think you could think of it is what if you actually put in the effort and the thoughtfulness into figuring out who actually wants your product? One, you reduce spam and two, you actually increase like your own productivity. It's just that that's hard to do at scale. And the best companies like RAMP, like there's a lot of companies who figured out how to do that internally. What Clay is doing is giving that to every company. And really what that means is that businesses can find each other and more accurately. So I think it should end up benefiting everyone. That makes sense. Anything else?

Starting point is 03:20:04 $100 million. How are you going to spend it? Hopefully we don't spend it. Yeah, always a good play. Yeah, I think that one of the key, like really exciting things about Clay is that we have this huge community that has emerged around us. So there's Claygencies, so people who implement Clay Oh, that makes sense. Yeah. There's like 60 clubs in 29 countries where people meet up to talk about different techniques.

Starting point is 03:20:34 Because if you think about it, in sales, like you're always figuring out how to be creative, how to be unique, and Clay is a tool that lets you do that. I almost think of it like Ableton is for music or like you said, Figma's for designers, Clay's for go-to-market teams. They're doing deals. Interesting. Exactly. So we want to use that money to support that community.

Starting point is 03:20:55 So we're having a conference actually sculpt in September in San Francisco. So we're going to do more events like that. And then there's a lot of investment into the product. We're just touching the surface of what we can build. Yeah. Is there any functionality to share workflows or create some sort of marketplace for workflows? Like, you know, yes, there are agencies on top of Shopify that do design, but then there are also templates.

Starting point is 03:21:22 And so you gave some examples of, you know. new funding announcement in my category, that seems like something that I could be able to just pull off the shelf and not even build from scratch within Clay. Yeah, totally. I feel like you should really join our team. This is exactly where you're going. I'm looking at the roadmap. Yeah.

Starting point is 03:21:43 So we'll leave it there. Yeah, we'll leave it there. Well, good luck. Very exciting time and congratulations on the massive round. Awesome. I appreciate it. Thanks for having to you. We'll talk to you.

Starting point is 03:21:53 Bye. Good stuff. Well, John, I got to get on with London, and I'm sure you've got to get on the Taipei. I do have to get on the Taipei. Why don't we end it there? Thank you for tuning in to the show today. And thanks to everyone in the chat. I agree.

Starting point is 03:22:07 The deeper the V-neck, the more funding you get. That's right. Good strategy. It's a good, good. I didn't say it, but I think it's true. $100 million deal. Really deep V. Looking good.

Starting point is 03:22:19 The next round is down at the belly button. It was funny because I clearly you could see the bottom of the V-neck if we had shown the full screen, but we had a ticker. And so the ticker made it look like, you don't know where that thing ends. It could just kick it go forever. But Palmer Lucky has made. He's actually a vest. Palmer Lucky has made the Hawaiian T-shirt iconic. Maybe Kareem makes the, the D-V iconic at Kly.

Starting point is 03:22:41 Good energy. I was into it. Anyway. Awesome folks. Thank you so much for watching. Leave us five stars on Apple. Podcast and Spotify. Leave us some reviews.

Starting point is 03:22:50 leave us some reviews, send us some notes, send us and reply to some threads, whatever you want to do. Whatever you want to do. We'll talk to you. Have a great evening. Bye. See you soon.

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