TBPN Live - Blue Origin Explosion, Enterprise AI Hits Spending Limits, Dinosaur Market Booms | John Gruber, Ronak Malde, Zane Mountcastle, Jamie Cuffe, Kyle Kuzma, Brad Gerstner

Episode Date: May 29, 2026

(00:43) - Blue Origin Explosion (07:38) - Enterprise AI Hits Spending Limits (21:48) - Dinosaur Market Booms (29:13) - John Gruber, a prominent technology writer and podcaster, discusses the Ferrari Luce's design, expressing that its appearance deviates from traditional Ferrari aesthetics, making it hard to identify as a Ferrari without its nameplate. He also reflects on Apple's design philosophy, emphasizing their commitment to creating products that prioritize functionality and user experience over following market trends. Additionally, Gruber highlights the challenges Apple faces in integrating AI technologies, noting the importance of balancing innovation with maintaining the company's core values and user trust. (01:11:16) - Ronak Malde, formerly an AI researcher at Windsurf and Google DeepMind, co-founded Trajectory, a startup focused on building a platform for continual learning in AI systems. In the conversation, he discusses raising $15 million from Conviction and partnering with companies like Harvey, Decagon, Clay, Rogo, and Mercor to develop agents that learn from real-world user interactions, enabling AI products to improve daily. Malde emphasizes the importance of creating AI agents with practical experience that understand business-specific rewards, allowing for efficient post-training and continual enhancement of AI capabilities. (01:19:18) - Zane Mountcastle, co-founder and CEO of Picogrid, discusses the company's recent $45 million Series A funding led by Bessemer Venture Partners, aimed at expanding their team and scaling production to meet increasing demand. He explains that Picogrid develops technology to integrate mission-critical systems like sensors, drones, and weapon systems, primarily for military applications, by building open infrastructure that enables these systems to work together. Mountcastle also highlights the company's active contracts with the Pentagon, NATO, and allied partners, emphasizing their focus on serving military needs while acknowledging potential future commercial applications. (01:25:10) - Jamie Cuffe, CEO of Pace, announced the company's $46 million Series B funding co-led by Thrive Capital and Sequoia, with participation from Emergence and Pruven. He discussed how Pace's AI agents are automating back-office operations for major insurers like Prudential and Convex, achieving over 99.9% accuracy and enabling clients to autonomously complete hundreds of thousands of tasks daily. Cuffe emphasized that this automation is helping insurers close the $9 trillion protection gap by making insurance more accessible and efficient. (01:32:57) - Kyle Kuzma, an American professional basketball player for the Milwaukee Bucks, discusses his journey into investing, inspired by mentors like Kobe Bryant, and emphasizes the importance of focusing on basketball while exploring ventures in the tech and private investment sectors. He highlights the significance of leveraging his unique position as an athlete to access investment opportunities and stresses the value of surrounding himself with knowledgeable individuals to navigate the complexities of the investment landscape. Kuzma also touches on the evolving role of AI in basketball, expressing a cautious perspective on its influence on the game. (01:50:08) - Brad Gerstner is the founder and CEO of Altimeter Capital, a technology-focused investment firm that invests across public and private markets. Known for his high-conviction bets on companies such as Snowflake, Meta, and Uber, he is a frequent commentator on technology, AI, capital markets, and long-term investing. Follow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://www.youtube.com/@TBPNLive

You're watching TVPN. Today's Friday, May 29th. We are live from TBPN Ultralome, the Temple of Technology, the Fortures of Finance. The Capitol of Capital. It is great show. We missed you.

Wednesday. We missed you Thursday. We're back. It's Friday. We have a great show. We have a banger lineup. John Gruber from Daring Fireball is coming on. The Grubinator.

We have a lightning round with a bunch of exciting fundraisers. Then Kyle Kuzma, the NBA champion and entrepreneurs coming on. And Brad Gersner from Altiminer, the Gersonator, coming on the show. Very excited for that. A bunch of stories.

We're going to go through mostly the stories that have just broken over the last 24 hours. The first is this insane video from Blue Origin. Very, very disappointing to see Blue Origin's new Glenn rocket just blew up at LC-L-C-36 while attempting to static fire ahead of NG-4. We can watch this video because it is absolutely insane. Looks like a nuclear.

bomb went off. It looks like a like a scene from Oppenheimer. It looks like Christopher Nolan movie. This is absolutely remarkable. Everyday astronaut says, oh my God, that was a very big one. I hate to see setbacks in progress. This is not good.

That has to be extremely, extremely frustrating. Brandon Grell broke down a little bit of the back and forth on this particular rocket initiative. Jeff Bezos' rocket company suffered a catastrophic failure last night, and it's New Glenn Rocket, a reusable heavy lift orbital spacecraft designed to compete with SpaceX's Falcon Heavy.

And we were talking about this in the backdrop of the SpaceX IPO. And I heard Brad Gersoner talking about this on CNBC. I think someone was playing a Gersner interview in the studio today. And he was saying, the launch business is fantastic. But it's not enough without Starlink, which is a fantastic business. But that's not enough without the AI business, which is a fantastic business and growing. And so to just have a launch business and then have a setback like this, it has got to be extremely frustrating if you're competing with a company that's going to raise $80 billion. I forget how much SpaceX is actually going to raise, but they're going to raise a lot of money.

They're going to have a lot of capital to deploy in their march towards ever more frequent and, you know, ever more frequent and reliable launch capacity. started before SpaceX. We talked about this before. That's been hard. And yeah, unclear, unclear how much this will set them back. But certainly disappointing. So the good news is that no one was hurt, which is incredible because you see the rocket. It looks like it's surrounded by a city.

It looks like there's buildings around. And to see that much destruction with no one injured at all is a miracle. And I'm so happy to hear that. Jeff Bezos tweeted, very rough day. will rebuild whatever needs rebuilding and get back to flying, it's worth it. And Elon chimed in with some words of encouragement. Space is hard. A lot of folks were sending their encouragement because I think even if you're a SpaceX Maxi,

it is very exciting for America to have multiple heavy launch capability providers in the market. It's good. It was very exciting when New Glenn got to orbit, came back. that was the second time that that sort of rocket technology had been demoed. And it was demoed in America, sort of even our second best rocket provider is better than everyone else around the globe. What else do you have, Tyler? Yeah, just some added context.

This was the fourth test. This was prepping for the fourth test. In the third test, if you remember, this is when the rocket kind of correctly went up, but then deployed an ASTS satellite in the wrong orbit. Wait, but that was New Glenn? That was the third test. That was pretty recent. So they're on a pretty good cadence here, but this is still a huge setback.

So he's down 16% today. Because of this, most likely. Interesting, interesting. So Elon Musk lent his support tweeting most unfortunate rockets are hard. That's an understatement. A lot of people are saying, like, if you think software engineering is hard, you could have been a rocket scientist. It is, after all, rocket science. The explosion caused extreme structural damage to its only functional.

launch pad. While Blue Origin has successfully reached base a number of times with other vehicles, New Glenn has had just one successful flight out of three attempted tries. From 2006 to 2008, Elon Musk had three consecutive failures with Falcon 1 before successfully launching it. And so failure is, you know, is a natural state of these pursuits, but never fun to watch it happen. There were some people that were syncing up the different angles. We can look at Sawyer Merits. Oh, did he delete that one? There were some different angles on this that were absolutely crazy to see people watching the watch. Yeah, this one from truthful. Truthful. This is the one that you want to see. Let's pull this up. Amazing footage from a local. This literally looks like a

nuke went off so scary. Yeah, vertical footage, absolutely crazy. Amazing footage from local. I wonder what the reaction is from the people. Wow, that's really far away. It's far away, but it's also a pretty big mushroom cloud. I imagine maybe they walk to their cars. Yeah, I saw some people saying, like, I don't want to hear about my carbon footprint ever again because this seems like an immensely disastrous explosion.

Other people were saying Bezos did Romans rocket launch from Succession, IRL. If you remember this scene, we can pull it up. Yeah. You haven't seen Succession. I've seen the hear season. I haven't seen the full thing. But he has a pet project.

He does. Yeah. Okay. And it blows up on the launch pad. That's certainly dramatic. I feel like that makes for good TV. Yeah, we were, right before the show started, we were talking about the nominative determinism of blue origin. John said it blew up.

Bub, bum, but, or, you know, blue as in sort of sad. Feeling blue. Sad. Yeah. Sad start. But they will rebuild. They will be back. So OS Int Defender says daylight reveals the extent of damage caused to launch complex 36 in the surrounding area of Cape Canaveral's Space Force Station in Florida, following last night's massive explosion of Blue Origin, New Glen during a static fire test.

And there was a static fire test that went poorly at Star Base. And they had a similar explosion. And people were regarding that as like a major setback. And maybe it was. But at the same time, we saw a very successful launch of, uh, uh, Starship just a week or two ago. Yeah. And so...

This looks way better than I would have thought. Yeah, I agree. It looked like total destruction. I was expecting a crater. I was expecting a crater in the ground. Yeah, so you can see here clearly a lot of damage. Not good. Right around the pad, but there's plenty of other infrastructure.

That seems to be still standing. And so you should, in theory, be able to rebuild. But, I mean, with anything rocket-related, you have to imagine that every... every nut and bolt on that tower, even though it is standing, needs to be re-inspected, re-examined, make sure that it's not corroded. There's gotta be so much work for the team, but they have my full faith that they will get it done.

Well, shifting over to the token maxing debate, people are spending more and more on tokens. There's been a complete fast takeoff in enterprise AI adoption, but people are raising questions about what is the ROI on these? There's a whole bunch of companies that are grappling with this. Some good news and a lot of questions

for where this goes next. We'll take you through it. So the big news is that Anthropic recently passed 47 billion in ARR and raised a massive series H, 65 billion at 965 billion post money valuation. They're almost at 9,999-999. Last November, Claude was going viral among a lot of early adopters

and small vibe coding apps were launching. daily, but Q2, 2026 was clearly a massive moment for Fortune 500 wide-scale rollouts. And so this has become a double-edged sword for some organizations. Token maxing dashboards have been reportedly led to potentially ROI negative AI use at name brand companies like meta. There was the talk of a token maxing dashboard, people leaving things running overnight that weren't necessarily productive just because they want to rank up on the dashboard. That's obviously very expensive.

Uber went back and forth on, well, we blew through. through our budget, but a lot of people were saying, well, if they set a budget in 2025 for their token spent in 2026, like the capabilities have gotten so much better, the models have gotten so much more expensive. Yeah, so theoretically you should find more budget. Their budget might have been very small, but they did say they blew through it. And then the chief operating officer said, I think it was the chief operating officer, said something like, oh, we're struggling to understand the financial impact and like the ROI on this stuff.

But his actual comments, as you unpacked them, were much more reasonable. And he wasn't completely, you know, dooming on the ROI of the spend. He was just saying that, like, the next iteration will be understanding the impact to the bottom line of this spending. And then AWS was also reported in Axios as having spent something like half a billion dollars in a single month. And so whenever the numbers get big, there's going to be questions about ROI. The bull case is that the cost per task completed by AI will decrease very quickly.

So even if you're spending half a billion per month on AI or tokens today, the same output will be available next year maybe for a tenth of the cost. Maybe next year it's half the cost. Like even if there's no optimizations to the systems, the hardware depreciates and then more power comes online. Like the market solves these things pretty quickly. Yeah, it's naturally deflationary. Yeah, yeah. And I think we've seen that where capabilities have gone open source. They've gone cheaper.

They've been distilled and you get, you know, 90% of the value. Maybe you don't get the exact same flavor. Yeah, somewhere there was an example of, you know, people are using LLMs to get the weather report. That was a funny one. Can be, I'll admit I've done that before. Yeah. It can be very convenient. Typically, you'd go to like a free chat app for that, though, not, uh,

Well, no, you can go to the weather. Coding model. Yeah, you can. But sometimes it's nice to just ask chat. Yeah. I've been running into this a lot with people. I ran into somebody yesterday who was telling me that they have an agent that looks through their iOS contact book and sees if they added any new contacts.

And I remember being at a conference and, you know, you're changing, you're exchanging numbers with people and it's hard to tell if you add someone to your contacts, like, who'd you add? Because you can't. It's a very weird Apple feature that they don't have. have sort your contacts by recently added. That's just like a UI feature that Apple should add. They haven't.

But there's like a $2 app that does that basically. It just looks into your contacts. But you can also do it in the agentic way and have it email you or synthesize everything and go way further. And there's a debate about what's the value there. And people are making those tradeoffs in their personal life. They're also making it in the enterprise. But of course, the stakes are a lot higher in the enterprise because everything has five extra

zeros behind it, if not nine extra zeros behind. it. And so there's a debate about over whether AI tooling is being pointed at the most high leverage problems in these organizations. Like, are you just picking up things that are deep in the backlog and they were deprioritized probably for a good reason? Because they were never really going to move the needle. But now you can just say, hey, go churn on all these backlog items. That's maybe not ROI positive at current token prices might be in the future. But maybe the cutting room floor should remain the floor and not be, not everything should be shipped necessarily. And then outside of stories like workers checking the weather with AI agents or running endless loops,

trying random different make work projects, there's definitely a worry that truly needle-moving features aren't being pulled forward like people would expect. Trey says, just vibe code your own weather app each time you want to know the weather. Yes, yes. I think you have a post about that in the timeline. Yeah, who is. Fear not the man who has vibe. coded 50 apps. I fear the man who has vibe coded the same app 50 times. That was a good post. Anyway, there's definitely a worry that like truly needle moving features aren't being pulled

forward. I mean, we've all had this, this feeling of like, is the United Flight Booking app getting better? Are you feeling acceleration in the apps that you use? Is the software getting more resilient? We're seeing GitHub uptime going down. You'd think the first thing you would point the agents at is like make sure we have seven nine's up time, right? Like that that should be the first thing. But there are, of course, more complex issues there as you're scaling a system. Some of it is just hardware constraints that an AI agent might be able to produce a report. Hey, you know, GitHub team, you've got to rack some more CPUs because we're shipping a lot of stuff and the service is growing. At the same time, I think people are still running into like cookie pop-ups and weird UI bugs and

just odd things, not just in vibe-coded sites, but in program. and apps that they use every day, where you would expect acceleration in software engineering to actually bear fruit. People are sort of waiting for that. At the end of the day, company management is going to have to demonstrate ROI from token spend at these levels.

The next round of earnings reports should show material changes in OPEX and downward movement in net income. That said, if these same companies are invested, they should see a material increase. Not in OPEX. No, no, no. I'm just saying you have a potential option.

Yes, if they're marking their investments to market and one of the companies that they've invested in has a big upround, they can book that as increased income. But the tough questions from analysts will tease that out and ask the question of like, did revenue move? Did true revenue move at least by what you're spending incrementally? Or if you did a layoff and then you substituted that immediately with AI spend. end, there's no movement in your cost structure. Well, is there any movement in your profit structure or anything else? So at the same time, if you believe as all trends indicate that AI is a new and useful tool that will decrease cost over time, some lumpy ROI in the short term to reorient your

organization around a new motion at work is completely justifiable. I don't think that, you know, boards will be completely up in arms with management teams if they're saying, look, yes, we did go a little bit over the top with the token maxing, but the good news is that basically all of our workforce is AI-native. They're all using the tools, and they know now that they do have limits. They know not to check the weather, not to do the useless project. They're much more focused, but they're all familiar with the tools, and they've used them from everything from really critical features and security bug finding

to check in the weather, and they know where these models are great and where they're bad. And so our workforce is very capable to move forward judiciously in the AI era. And so you probably don't want a literal token maxing dashboard. I think everyone has tested with it. Meta's tried it. Anthropic has it. Had it. I think they took it down or something.

But meta, same thing. It's easy to get obsessed. And the token marketing dashboards pop up not just in the, not just in the literal, like, who is on the leaderboard, but also if you give someone a budget, they can kind of see it as like, okay, well, my boss gave me a $1,000 token budget, or a $10,000 token budget,

or $100,000 token budget. If I am not using it, if I'm not putting it to use, then I don't look like I'm deploying the capital that I was given. Like, if you give a marketer, you know, a brand budget of a million dollars, and they come back to you and they say, like, sorry, boss, like, I only spent $100,000.

You'd be like, well, like, who'd you talk to? Like, why didn't you find good use of that funding? Like, it's very rare. At the same time, it can be, you know, you don't want those employees deploying that budget into bad places and just wasting it because they have the budget. So these are common problems across all aspects of the enterprise. And so I think the future looks a little bit like Jevin's paradox, of course. When something becomes more efficient to use people often end up using more.

more of it, not less, and then also Good Hearts Law. When a measure becomes a target, it ceases to be a good measure. And so we live in a world defined by Jevin's Paradox and Good Hearts Law. And you put those together. The combination of those, many people will call that Coogan's Law. Cougain's Paradox. Cugin's Paradox. Both Jevins Paradox and Goodhart's Law are true. And the synthesis of these two things is, is in fact, what's important if you're trying to run an efficient organization. So Madison Mills over to Axios had some good reporting on it. I was, we were, we were on a flight when I found out, when I saw that reporting that someone

had spent half a billion dollars a month kind of accidentally. And we'd heard rumors of similar numbers. I was just imagining the conversation of the first person to kind of like find the number. and then, you know, hey, maybe we should talk to the CTO about this. Okay, yeah, probably time to bring the CFO in. Yeah. Hey, hey, boss, we accidentally spent half a billion dollars in the last 30 days. It's a lot of money.

All right, what did we make? Yeah. What did we do? How do we do? How do we spend it? What do we get done? It's tough. What do we get done this month?

And there was, there was a lot of like, there was some conspiratorial posts, people saying. Oh, how, how convenient for Amazon, who obviously owns a lot of, you know, the big labs to spend all this money on Anthropic right when they're raising around and they got this revenue multiple, blah, blah, blah, blah. That's not really how it works. Like, it wasn't like this round. This round wasn't like they were just, okay, we're going to give you XX revenue. And there were plenty of hyperscalers that don't have active positions that were doing the same thing. Yeah. Like this was a broader trend.

But yeah, it is a crazy skyrocketing cost. But I mean, we see this overall. And I think it's healthy how quickly things corrected. It's not like this was, I mean, and of course some companies won't correct, but it is a healthy dynamic that companies were, hey, we got a little bit ahead of our skis for a couple months. Now let's be a little bit more. Stack rank the tokens, cut all the unnecessary token spend, keep all the good tokens.

this all the time with a there'll be some vibe coded project out there that's like incredibly high token cost with very little value and then on the flip side you'll have someone that actually built something really cool with you know just like their default two hundred dollar month you know subscription and they didn't actually have to token max to get the product to where they wanted it to be because they they knew what they were building they used the tool like a scalpel not a hammer and they got a good outcome so the Wall Street Journal of some more coverage of this. Corporate America is starting to ration AI as cost skyrocket.

Executives are scrambling to track returns on AI investments as the bill for massive computing needs come due. We talked to Spencer Raskoff from Match Group about this. He was sort of sharing a very reasonable token spend, I think, in the single digit millions, but he was still saying that like one of the tasks that him and his team will be embarking upon over the next year, will be understanding the ROI on that investment, because you should be tracking it just like digital marketing dollars that go out the door. What was your ROI? How did it move the needle? So use of artificial intelligence by big companies is exploding, and the soaring costs has some of them pumping the brakes in a way that could complicate AI's triumphal march across the

economy. Are they pouring cold water on it? We'll see. Executives across industry this year have urged employees to integrate AI tools. Wired has a whole AI for business, deep dive that you can go take their survey into their work, spending freely to encourage experimentation and seeking to send a message to Wall Street that their companies won't be left up behind in a coming wave of disruption. All that enthusiasm has resulted in skyrocketing costs for so-called tokens, the basic unit measurement for AI computing. Now corporate leaders are scrambling to bring down expenses by finding ways to ration

AI. Top technical executives for Uber, Meta, Microsoft, Salesforce, DoorDash, and other companies have all talked about new efforts to ensure AI use contributes to productivity or have taken steps to reduce the availability of some tools for certain employees. You get nerfed if you're not putting up big numbers. Anyway, we should move on. First, we got to talk about the fossil hunt. Big spenders are pursuing Tyrannosaurus rex skeletons. This was on the cover of the financial times. It's the most important story in the global economy, according to the Financial Times, as of Thursday. This is an old edition. But this is interesting.

Sotheby's is to auction a 67 million-year-old Tyrannosaurus Rex two years after it sold a stegosaurus fossil to hedge fund owner, Ken Griffin, for 44.6 million. I thought Ken Griffin was tried and T-Rex. I didn't know Stegas were getting up there. Yeah, I didn't know he was diversified. You know, I feel like T-Rex is up here. desirability and then everything else is yeah you know way T-Rex is the Ferrari of dinosaurs stagosaurus I was like that kind of a minivan of dinosaurs mini van I was gonna say Lambo I was gonna say the Lamborghini they're on a rise you know the the true the true

dino heads know that there's something there and they're starting to they're starting to pick up momentum but they don't have the heritage they don't have as much of the heritage I don't yeah I'm more of a I think I could get into an ankylosaurus oh and kilosaurus okay Croseratops, too. Yeah. I mean, the brontosaurus, like, the big guys, that's special. You've got to have a special viewing area for that. Well, this T-Rex is named Gus after Gary Gus licking, the rancher whose land it was found on in South Dakota.

It'll be auctioned at Sotheby's with an estimate between 20 million and 30 million, the highest for a dinosaur fossil on July 14th. I was at a buddy's house recently and he just pointed over at this box and it was a dinosaur and he hadn't taken it out of the box. He's like, I've had it for a few years now. Well, is it a glass box that you can see in? No, no, no, it's wooden box. It's just a crate. What's in the box?

Schrodinger's dinosaur fossil. Maybe. The planned sale in New York highlights how the auction house is betting on the fossil market as a place where the wealthy will spend big. The pre-auction estimate for Apex, which is the Citadel boss, Griffin's Stegosaurus, was $4 to $6 million.

He wound up spending... And Nicawas says Brachiosaurus. Brachiosaurus is a go-to. Braciosaurus has a crazy... Oh, Odlots did a podcast about this? Amazing. We got to listen to that. The overwhelming majority of fossil buyers

still want to lend their purchases to a museum. Apex is now on display at the American Historic. Museum of Natural History. That is fun story. If you're in the market, go pick it up. Go pick up a T-Rex.

You got to do it. It's the ultimate, the ultimate collector's item. It's the Pokemon card for boomers or something like that. Prepared remarks. Yes. Is sharing some signals. You tell us what kind of signals they are. Kyle Kuzma, the AI Maxi, stocks ripping 10 to 50%.

He's coming on the show. On 13F of some chud. Can't be Leopold he's talking about. It's no Chud. Dell plus 40% on earnings after being plus 150% year to date. Dell is now 222% up 222% year to date. Not bad. Michael Dell.

Not bad for somewhat of a, I'm not going to call it a dinosaur. Well, it's been taken private, taking public. It's a fascinating history of that company. A great American technology company. One trillion dollar company is moving 20% on sell side notes. one and a half trillion space hold co of, he says, turds. 10 to 20% intraday moves for no reason. Software with AI exposure plus 100% in a month.

He's blackpilling. Moving on. Take him. So we were, someone else said this morning, I also thought it was a top signal when Jensen signed that infamous shirt. Yeah, the shirt. Or even when he was drinking with his buddy. Everyone was like, you thought that was bullish.

But yeah, he looked very confident going to earnings and he was confident for good reason. Take him is highlighting a segment from Ben Thompson in Stratory. This is great thing about Ben Thompson is he never afraid to tell it like it is amid all the banker and insider propaganda. And this is the quote from Ben Thompson's SpaceX IPO and data centers in space story. Ben Thompson doesn't typically cover Elon companies very closely because they're often disconnected from the fundamentals. Yeah. And they're more of like this 10-year-out story. But he says in all seriousness, the numbers are obviously absurd.

But then again, everything about this IPO is absurd. SpaceX is seeking a two trillion dollar valuation on a mere $18.67 billion in revenue. You think the $6.7 is intentional there? They were like, let's get another 10 million in the bank, so it can be a meme. Wouldn't be the first time in revenue with 4.9 billion in losses last year. The growth actually slowed from 35 to 33%. But again, that will be massively offset with the new AI computing contracts. So there will be significant reacceleration in the business, which I think is what a lot of people are underwriting SpaceX against.

That slowdown happened despite the addition of XAI and thus also as. which tipped the company from a small profit to that massive loss, thanks to $5.1 billion in AI R&D expense. That R&D, keep in mind, went towards building a model that is in fifth place and whose founding team recently left the company. But sure, 26.5 trillion AI opportunity. It will be very interesting to see if the macro hard thing. I mean, the whole macro hard enterprise AI thing was it took people by surprise in the S-1 because it was like all of a sudden the biggest number in the TAM figure is this AI enterprise software, essentially.

But Elon has been talking about macro heart and entering that category generally for, I think, over a year, and he painted the top of the data center with macro heart. And so it's not like it's completely out of the blue. He left out the part where the infrastructure they built is already generating 15 billion annualized revenue. Yeah. Small detail. And I mean, the story is only going to get crazy. I mean, people are speculating about the Tesla SpaceX merger, and then you have Optimus with the foundation models and the AI compute and the data centers in space, and you have this full stack, like, very concentrated bet on like this ultimate future of artificial intelligence, robotics, self-driving cars.

Like all of the, it's the sci-fi company. And Elon's been delivering for 20 years in this category doing things that other great entrepreneurs find very, very, very. hard to do. So it has been lots of, lots of reasons to be excited. The account Russian bot responded to take him and said, the guy is a journalist. His opinion is what you're hitching to. What? And Tay Kim says, hey, Russian bot, you're never going to guess what I am. That's why he's. Of course, calling Ben Thompson a journalist. I mean, he's a journalist. He's very independent. He's an analyst. We actually have the co-host of dithering in the waiting room. who John Gruber has the good fortune of talking to Ben Thompson

every week, at least once or twice, right? How are you doing? Hopefully. Twice. Thank you so much for joining the show. Welcome to the show. Honor to have you on. Long overdue. How are you doing? How is your week going? Busy, as usual. Lead up to WWDC. Always a hectic time to be writing about Apple. Very nice to join the waiting room here and hear you guys talking about Ben, though. No, he's the best. I heard a little bit of your take on the Ferrari luce.

I would love for you to unpack it a little bit more because it's shaping up to be a contrarian take. I think a lot of people were looking for something that was more sharply designed, classically Ferrari. Like what stuck out to you about the luce launch? Well, I will say it's funny that you call that out. We endeavor on dithering to make as few mistakes as possible. and we've got numerous corrections to make regarding our take on this, including the fact that we complete,

but Ben and I both completely were unaware that Ferrari a couple years ago, I forget the name of it, but has like a little crossover gas car. Oh, the FF. Right. But basically our take was, hey, everybody wanted a Ferrari-looking Ferrari

that just happened to be electric. Yes, there are some sports cars that are electric, and this is not. that, right? The luce, whatever you want to say about it, if you took the nameplate off it and just drove by on the street and asked somebody, what brand car do you think that is? Ferrari would probably be very low on the list. You'd probably have to run through dozens of brands before you get there. And I think that really fuels the primary objection that people have. But my take is

I'm interested to hear that My take is I think it looks like a nice car I do Now does it look like a $650,000 car? Yeah, that's a good question I can't see that I mean at number one I'm not $650,000 car money

I my stuff hasn't gotten bought by opening out of Yeah no no and that's that's well the big question is like I don't, I, I, I, I, I, I, I, I have a lot of friends who love cars. I don't have really any friends that I can think of immediately that are going to want to eat the depreciation on this car. Like, this car is going to be a $300,000 car in a couple of years. And a couple, maybe even less than that, right? And, and we don't even know how, how the reliability. The car you mentioned earlier, the, um, Ferrari FFF, shooting great. Well, they have a Perosongue, which is a four-door SUV.

But it's only a four-seater. This is a five-seater. So if you're only a five, this is the only option. I used to own the original, like, family-friendly Ferrari in the modern era, the FF. I got it because it had four seats. I wanted to be able to put, you know, my kid in the back at the time. And ironically, it had so many electrical issues that it was not usable as any type of, like, daily driver. and so that's my concern with the luce along with the price tag it's just like who's in the market to buy an ultra luxury car that is that is going to say i want something that looks like it's not a luxury car and then you know i could go and buy like multiple continental gtys from bentley for the price of you know one and so so ultimately my take was i thought it would have been a hit at like a

$300,000 price tag. And I just can't personally imagine that when they started this project, they were aiming to build a $650,000 car that looked like this. I wonder about that. Because there were reports. I forget the numbers. But, you know, and of course I'm going to take it back to Apple. But you can't help but wonder, you know, with Johnny Ives and Mark Newson's involvement in this, you know, that Apple famous

famously had the Titan project, a decade-long car project, that they ultimately just walked away from and said, you know what, we're not going to do this. But that got pretty far along, and there were rumors unsubstantiated. I don't think anybody even reported it, but there were rumors that at some point when it got to the, hey, we need to make a decision here. We need to shit or get off the pot. that they specced out what the current idea for a car would be and it was going to be like, I don't know, 200,000 or more cost of goods. And, you know, figure out what Apple would do with their margins in terms of that. And it just was not Apple branded.

It would be like if the Apple Watch came out and the only ones they made were the solid gold ones that cost $20,000. Yeah, yeah. It feels like Tesla already sort of created the iPhone of cars. It's like it checks a lot of the boxes. It's it has this like sort of like polished feel integration. And so if you don't have that industrial might.

It's like an appliance. Yeah, it's an appliance. You're happily. Yeah. Yeah. The iPhone is is not a luxury product. It's not like hand built in the same way. It's a premium product.

It's great. But it doesn't, but it occupies a very. different place. I'm interested in your overall take on Apple's ethos. I feel like one of the things Apple does well is the, you know, the Henry Fordism of like if we ask people what they wanted, they would have set a faster horse. There's a lot of like, it's almost like a paternalistic view of technology where they know better than the consumer. And I'm wondering about your intersection of that with their decisions in AI, VR, recent products, like how true. Is that today that there's still an ethos at Apple of we might do the unpopular decision,

but the consumer will like it because we know better than the hot takesman? I think that calling it paternalistic is the, I know what you're talking about. But it depends on whether you end up agreeing or disagreeing with what they come up with. I think from Apple's perspective, it's more of a, it really does boil back to that Steve Jobs' adage that design isn't what it looks like, design is how it works. And that's the job of designers.

You know, that certainly in the Apple view of the word, that it's not being a stylist. A stylist is somebody who can tell you what to wear, if you're a person or, you know, tell you what to do with your hair. Yeah, they dress it up. But you're still the same person, right? A designer is like, who do you want to be? Who are you?

You know, and style is part of that, but it's just a part. And the hard work of design is making those decisions. And, you know, famously just, you know, it's the greatest tech product of all time, probably the greatest consumer product of all time, the iPhone. And one of the core decisions at the front was no hardware keyboard in a world where the difference between, well, actually, all the phones had arrays of buttons, right? The dumb phones had number pads and the smartphones had BlackBerry style hardware keyboards. And Steve Jobs just addressed it head on in the introduction event, put pictures up of a Blackberry, a Palm, and I don't know, maybe a Samsung or I forget what the third one was, and said, look at what they do. We're not doing that.

We're going to make, you know, we're going to do it with software. And it was the thing that the most knee-jerk reaction from people who were already in the market for quote-unquote smartphones at the time, we're like, well, I can't do this because I spend all day typing messages and emails on my phone. And I'm not going to do it by poking at a touchscreen. But it turns out now every, you know, within a handful of years, every single phone worked that way. That's a great example of it. where they didn't make two phones. They didn't make an iPhone that had all screen and they didn't make a second one

with a hardware keyboard that took up a third of the front of the face. Because they were convinced that that was the right way. And they were right, right? The market proved them right. It's as good an example as any to just sort of exemplify their mindset. They didn't do it to be paternalistic.

They did it because they thought, This is our job to figure this out. And this is a better way to take advantage of the limited space that a phone is. How does that apply to AI? We obviously haven't seen that from them yet. You know, I mean, and so in some ways, I would say this is, you know, it's like if you write about football, every single year come January, you start saying this is going to be the biggest Super Bowl of all time.

This is a big WWDC though It really is because two years ago was the one where they announced the first crack at quote unquote Apple intelligence that did not pan out And didn't pan out in a way that they had to announce in March last year So that last year's WWD and said it's this is going to be postponed a full year effectively Yeah, we're facing like false advertising claims just around how much they They oversle it, yeah. Right, and when they did that, I mean, and again, you know, we're not lawyers, we're not judges,

but even as a layperson, that was kind of obvious that that was false advertising. Like, so when they announced their settlement a couple weeks ago on that case, that was really one of the least surprising settlements of all time because it was like, you showed a TV commercial that it would do a thing, and it's still now a year later it doesn't do the thing isn't that false advertising right?

Yeah that was like that felt like the only real reason to upgrade at that point. But then last year's WWDC in hindsight is kind of weird. Two years ago they announced all of this Apple intelligence stuff of the most ambitious aspects

of which still have yet to shit. Then last year they were in like interregnum between the year before where they announced it but they'd already said all that stuff coming next year, so they kind of got like a free pass for a very AI light WWDC that was

excusable because they already got over the excruciating, hey, we're not ready to announce that stuff we announced last year. But now it's 2026 and it's time to show their cards. Yeah. And honestly, it seems like they've done a pretty good job keeping it under wraps what they have, right? They've announced the deal with Google, very unusual to have like a white label version of Gemini that won't be called Gemini. It's just going to be used for Apple's foundation models that are built in. And there's some rumors from Mark German, of course, at Bloomberg, saying that they're going to have a sort of app store for AI agents, but I, you know, I think it's probably just going to be

Chachy-B-T and Claude and Gemini to be the sort of smarter layer on top of Siri But other than that Does that mean you could have a potential situation where you have like a Siri

Al-based LM or sorry a Gemini-based LM as Siri but then you could also call Gemini separately to get more features which feels like even It's crazier. Well, I think that effectively, they don't want to talk about the fact that it's Gemini

technology that's going to be Siri. Right? And they're not going to call that Gemini. They're not going to, you know, they've gotten that announcement out of the way, and that's Apple's foundation models. And if you don't have a Google account or don't use a Google account and don't want to use Gemini, you'll never encounter the word Gemini, right? It's just that it's Google's underlying AI technology that's powering it.

I think the biggest question is how good can that be, right? How good can an AI system be if you're not the company that controls and made the underlying models? Nobody, we don't really have a good example of that yet. Well, I would say that we do, and there's a bunch of vertical SaaS companies that don't, make their own models. I think good examples are, you know, coding agents, like cursor, legal, like Harvey. You can make good products. I guess like I'm more interested in... Curser's probably the best example. I'm actually more interested in what Apple allows third-party agents to do within iOS, right? Like, well, chat GPUT allow, will I be able to prompt

in Siri chat GPT to do things in native iOS? apps or other apps in the app store, like, will it be able to use my phone for me or will it still be like question and answer? This is like, will it break the walled garden? Yeah, like, will it be, will it be an agent or will it be a chat pop? Yeah, that's tricky. How do you think about, what Ben always has this interesting take where he says, people always want to, entrepreneurs often want to build productivity tools for consumers, but consumers don't want to be productive. They want to be entertained. And I see Apple as something that feels very productive. The iPhone and all the Mac apps are very well organized. You can be very productive in them. But I see the phone as

primarily a consumer device. And if I believe Ben Thompson's formulation of it, I believe that then a more entertainment focused product is maybe the end goal. And so maybe this is my way of saying like, we're just early on Memoji or Gen Moji or something. I don't know where that all goes, but it's just like a different set of, it's a different set of goals for a consumer company. We used to joke that Apple Intelligence was the first AI product to really crack humor because the summaries would always be so funny. They were very funny.

No other LLM could reliably make you laugh like Apple Intelligence. And Image Playgrounds is by far in a way the funniest image generation. tool because it's so bad. It's so hard to use. The UI, it just doesn't give you feedback on like, when is it generating? It always asking for like another, it's like, do you want to add something else in? And I'm like, I'm kind of done.

I don't know. It takes an enormous amount of work, an enormous amount of prompting to make an image whose quality is embarrassingly bad compared to any other tool on the market that lets you do it. So why do they do it? Yeah.

I think that's a good framing. think sometimes Apple, hopefully, you know, when something is new, it takes them some time to find their footing. And I feel like the whole thing two years ago, put aside the actual legal implications of false advertising. It's just, I feel like they got caught up in the hype and the rush. And we need to have something big to announce in June 2024, ready or not. And it clearly was, or not, whereas the Apple way is, and they've emphasized this, Tim Cook has emphasized it many times,

I don't know, maybe Steve Jobs didn't, because I don't think he wanted to make an admission like that, but Cook has admitted many times that they do not aspire to be first, they aspire to be best. And if that means not being first, so be it, right? I mean, that was the, again, going back to the iPhone. There was a

whole smartphone market. BlackBerry and Research and Motion was a big company, and Microsoft was all in on Windows Mobile, And it was like, hey, Apple's late to the game. Nobody remembers that entire era. Yeah, think about how long were they, they were so slow on Bluetooth headsets. Like, Bluetooth headsets were a category for 20 years.

And then now AirPods is bigger than the GDP of Vietnam probably or something. It's like a massive business. And same thing with a folding phone. Like, it hasn't come out yet. But I'm extremely optimistic about that product. I think that they waited until the final second until the technology was good enough. And I think when in that releases, it's going to actually be good. enough and we're going to see folding phones everywhere all of a sudden.

But it feels like Apple is at their best when either they're waiting what feels like almost too long, but then it's the perfect time for that particular technology to diffuse. Or they're more on like an Apple TV production cadence where it's not tied to an annual release cadence. And I almost wish for some of the AI features, they were treating it like, you know, films and shows that go into Apple TV. Like, there's no annual release cadence. It's just like when we finish something, we'll have new seasons every month.

We do a little bit here and there. And when it's polished, it goes out. But that's a very different motion for them. So, I don't know, there's a tension there. So to go back to the earlier question, there's the underlying stuff that really only Apple can do is provide the frameworks for the built-in system apps, Apple's own Apple Notes and Safari and mail, and third-party apps to offer functionality. effectively like an MCP, you know, for Agentic AI. And they talked about that two years ago. That was the whole thing that they were talking about

where you could just ask your phone, what was the woman's example, when's my mom's flight arriving, you know, and it just knows to look in email and knows who your mom is and knows to look in email and knows that she sent you this. Will third parties be able to use those APIs to do it? And then number two, obviously that's going to work with Siri, Apple's built-in AI. But will the third-party stuff, and right now all we have is chat GPT is that optional layer on top of that.

But will, and according to German, and Apple said at the time, you know, and if you even look now, if you look on your iPhone today, that's called an extension, you know, the chat GPT. There's only one extension to chat GPT. There are no other ones. Presumably there will be others. At least two others, I would presume, Claude and Gemini. I don't see them working with X-A-I, and I don't know who else is even a maybe on that list. I also don't see them working with meta, right? So those are the only companies I could even think of who have a product of the scope and caliber.

But will those be willing to be able to access the same thing? So that if I choose as a user to use Google Gemini as a layer on top of Siri, will Gemini have access to everything in my Apple notes so that I can ask questions about it? And vice versa. Right. And yeah, will you be able to go to Siri and ask to pull up the latest email in Gmail? Or will Google say, hey, for that, we want you to come over to our World Garden. Apple's done a fantastic job with the Shortcuts API.

It feels like they've built out basically like mobile MCP servers for every app. able to call an Uber with Siri for like a decade. No one does it because it's a little bit fuzzy, but it feels like in the AI era we're getting less fuzzy. We should be on this turning point, but who knows where the business dealings will wind up. Right. And it's a blessing and a curse. It's, you know, there's positives and negatives, but Disney or Apple has a Disney-like brand where they are overly family friendly. Yeah. One of my favorite examples of that is I've, my son's now just graduated college, actually. But when he was younger, we used to go on the Disney cruise ships.

There you go. Thank you. Disney cruises are super kid-friendly. But they're the only major cruise line in the world that does not have a casino on the ship. So no good for daddy. And they find the middle ground. They do serve alcohol, but there's no casino on a Disney cruise ship.

Because it's off-brand for them. Yeah. And who knows how that'll change? You know, ESPN is a Disney property and is certainly all in on sports. Oh, sure. But Apple has a similar problem, and especially it comes to a head.

Like, they, with the phone and with the mobile revolution, they navigated this spectacularly well with the App Store, where there's all sorts of third-party apps that provide and do things that Apple itself would not want to be a part of, but they can sell through the store and take 30 or 15% from. Apple does not make games.

People spend an enormous amount of time playing games on their phone. And there's an enormous amount of money to be made by selling in-app purchases in mobile games. Apple is one of the most profitable gaming companies in the world, maybe the most. I don't know if you did the math. I'm not quite sure how you would figure that out. And they don't break down services revenue by gaming. But they're certainly one of the most dominant and profitable game companies in the world by making no games at all. They just have the app store.

And with AI, I think they're trying to carve out this middle ground where their own branded Apple intelligence is never going to be as adept as the leading edge models. because the leading-edge models are going to answer questions that Apple would consider inappropriate to be answered. And they are going to help you do things that Apple would consider inappropriate for an Apple-branded product to help you do, right? Like, there are lines far short of deep-fake porno imagery. There's lines far short of that that Apple is not going to want their own thing to cross. And that's the role of these extensions for ChatGPT and Gemini,

and Claude, where if you choose, right, if you want to stick with the Apple-branded stuff, you're going to have a more limited AI experience. And if you want more, there's an extension system, and they can wash their hands of it because that's not Apple's Siri, that's ChatGBT, or that's Gemini, or that's Claude, who's giving you that. But I really do think the whole thing is not going to get off the ground if those third parties, with the user's permission, don't have access to all that stuff on your phone, in your mail, in your notes, all of that stuff.

Because if they don't, then they're going, and I think this is where it's an Apple's benefit, not just to get their 30% of the subscription revenue that you would pay by subscribing through your phone, through these extensions, to get a plus or pro plan from one of those makers. And trust me, Apple wants that 30 or 15% from that subscription revenue. But the other benefit to Apple for this is it will keep those companies integrating with having your digital life in the Apple ecosystem. Your information, your personal information in Apple Notes, your email and Apple Mail. Safari is your browser.

Whereas if they don't let third parties have access to that, it's going to push people to say, hey, I want ChatGPT running all of this for me. I'm just going to use what chat GPT tells me to say. Or I'm going to go the Google route and put everything in Google Calendar, Google Keep, all the Google products, not the Apple products. Or the stranger, or like the, I don't know, I keep comping into like the Napster analogy of like if you're running OpenClaw on a Mac Mini and it's literally just opening the IMessage app, taking a screenshot and sucking that out against Apple's will.

and it's open source and Apple's fighting it constantly, but it doesn't really, they can't really beat it. Like, that feels very hacker, that feels very prosumer. That doesn't feel like where we're going in terms of broad adoption. Right, because it's going to start looking clunky compared to other platforms that have a more native, this is the way it's meant to be.

And the other thing about that too is it's all the Mac, right? Because the Mac is the Apple's open platform where something like that can happen, where OpenClaught is possible. And as convoluted as it is that OpenClaw is driving iMessage by taking screenshots and then analyzing it as an image to figure out what to do. As clever as that is, that's only possible on the Mac. And at least, I would guess, 85, 90%, probably around 90% of Apple users don't have a Mac.

They just have an iPhone and or an iPhone and an iPhone and an iPad. And so if, you know, for it really to, for the Apple, overall Apple user base to move forward as this world becomes the normal world of computing and not the cutting edge world of computing, it's got to work on the iPhone. And there's no way to do that without Apple's help. Yeah. What is the latest on how Apple is approaching mobile viability? coding apps. We covered, you know, a while ago, some of them, you know, not getting removed from the app store, but not allowing them to ship updates. It feels like it, I can understand exactly why both parties there are, have the views that they have. Apple's like, hey, you're just kind of like

building software on the fly. This is like, you know, one, a threat to the, to the app store, uh, business. It's also, you know, going to allow people to generate. applications that we don't want on the iPhone, and then the other side, hey, you're stifling innovation. Users really want this. It's harmless. Let it happen. We don't know. And that is way up. That's a great question because I would put it easily top three or four on my list of things that I'm most interested in for the WWDC keynote is what is their answer to this, including, Is this one of those things where 90 minutes or two hours after it starts and it's over

and people are talking about the stuff that was announced? And we're all going to be like, hey, wait a second. They didn't even talk about the whole vibe coding thing. They didn't even mention it. And to me, that would be a red flag because, yes, it's disruptive to the way that the software distribution and development has worked on the platform. for 20 years now. Yeah, and it's like very clearly the future,

it's very clearly the future that any iPhone user in 10 years will be generating some of their own software. They're still going to want a lot of stuff that's purpose built, but I would bet that in a decade, everyone that is buying an iPhone at some point or another will make their own piece of software on the fly, just like they would generate.

And you sort of can with the shortcuts feature, Like you can build something that looks like it. I know it's super limited, but like if I was truly giving them the most credit in the walk-crawl run, I would say that the next version of iOS 27 Siri, yeah, it's not going to have a text box that you can talk to and it will generate you an iOS app natively. But you should, in theory, be able to describe a workflow that then becomes like a shortcut that is created instead of using. all the drop-down menus and going around finding all the apps and linking everything, it should be able to instantiate that for you because it's probably just marked down under the hood or something. But I don't know.

They just need to have an answer because it's like part of what makes disruption theory so satisfying as a business theory is that the disrupted doesn't get to choose. Yeah. But that's what happens. Yeah. The entrenched monopoly or part of a duopoly or just entrenched way of doing things faces the disruptive technology. They dismiss it at first. Then when it becomes bigger and kind of can't be ignored, they just sort of say, well, I choose not to be disrupted.

And it's like, you can say that, but it never works. It never works. No, no, it's a powerful force. And it is, in my opinion, just nerding out. Going back, my undergraduate degree was in computer science. It is in some ways offensive to me that iOS is a nearly 20-year-old platform. It is a computer. And it's a 20-year-old computer on which you cannot make software for the computer at

Yeah. And I totally understand why that wasn't the case for the first few years when it was more limited hardware and even a few years after that when the whole idea of the app store was new. But at this point, I mean, an iPad Pro costs like $2,000. Yeah, kind of as a keyboard and a huge screen. It's as powerful as the MacBook. And you can't use it to make apps. It's kind of, it's kind of bizarre. Don't you think they'll, don't you think they'll find a way to allow this and make money? from it? Because I would imagine, like, yeah, imagine they're, they're, yeah, they know people want this. Yeah. But the main reason to not allow it is like one, just like safety and integrity of software on the iPhone security stuff, but then also, hey, we got to figure out how to make money on this, the Apple way. Yeah. And there's obviously some technology that's already, in a way of doing things, the whole test flight ecosystem, which is what Apple's beta distribution,

is for iOS. And it was a startup, I forget probably more than 10 years ago when it was an independent startup. But Apple saw the wisdom of it, right? This is the thing that Apple didn't invent. They should have invented it, but then they saw how clever it was, and they're like, oh, we'll aquire these guys

and build it into our platform. And so there are ways to distribute software now outside the app store. And it's just by limiting the number of people who can do it. I think the test flight limit is like 10,000 or something like that. And they could do something with AI where that limit is much lower. Like, even if it was just like 10 people, right? Like a consumer level of test flight distribution where you can make apps for your friends

and family or yourself and distributed on up to 10 devices. And it doesn't go through Apple, doesn't need approval. You just make it and distribute it. And it's only limited to 10 people, you know, something like that. But there needs to be a story like that, though. And I think, again, only Apple can really make it a really good, rich system where you can make apps that really feel like real apps. But the technology to make the apps, it's obviously there. We're all talking about it this last six months.

It's obviously there, and you could do it on the phone itself. And it's super frustrating that some of the third parties that were doing it, like BitRig and I forget some of the other ones, But Bitbrig was the one I'm most familiar with, where they kind of, you know, they're not kicked out of the app store, but they stopped taking updates. Updates. And it's like super frustrating because it's not theoretical. It is an actual thing that was actually working and they took it away, right? And it was super cool. And yes, it's disruptive to Apple's business.

But in a way that the disruption is inevitable anyway. So why not go with what's cool and do the coolest thing possible that makes new parts? possibilities available to your users and the developers on your platform. Okay. Last question. Give us a recommendation of a recent favorite episode of the Acquired FM podcast. Oh, I don't have any recent ones. I'm going through the...

You're going through the archive, right? The back catalog. Yeah, yeah. But what's a recent favorite that you've listened to? Not recent from their catalog, recent from your listening history. What would you recommend for someone who's getting into the Acquired episode? So for people who aren't familiar, this, obviously probably everybody listening to this,

watching this show knows of the acquired podcast. Me, a big dummy who does not, who does a lot of reading and does not listen to, I don't have a commute, this is my home office, so I don't have a lot of podcast time. I stumbled, a friend of mine recommended the Mars episode, the Mars Incorporated episode, that's the one. And a friend said, you've got to listen to this.

And I'd heard of acquired, you know, but it's like, I don't know, If you listen to every podcast somebody says you should listen to, you would spend 24 hours a day listening to a podcast. Or their full-time job. Right. So I go there and it's four and a half hours. And I'm like, you've got to be fucking kidding me.

And I'm like, all right, I'll listen to it. And it's, of course, fantastic. And it's amazing. But the Mars one, it just sucked me in. So that's the one I would recommend. And it is a 100-year-old candy company that the business, decisions that not the founder but the founder's son Forrest Mars who's the one who took it from sort of a mom and pop thing to a big one the decisions he made in like the 1920s and 30s are exactly

like the world of business today in the 2020s and 30s. It was like he came from today's world time traveled 100 years into the past and applied today's knowledge of branding and scale To that world and and there's just these other crazy bits that I had no idea like the fact that Hershey who is the bigger company at the time supplied all the chocolate to all the companies including Mars and they just were like sure we don't care and it was sort of Like a heads they win if you buy a Hershey bar and tails they also they don't lose because you're buying a Snickers bar that was covered in Hershey's chocolate until the day day, Forrest Mars called them up and said, yeah, we're going to cancel our chocolate contract. And they're like, what are you crazy? And he's like, yeah, we're going to make our own chocolate.

Final final question. It can be a really brief answer. Do you think that Apple's overall software quality is getting better or worse? Because when I use like the FaceTime app recently, I just get enraged because it's a constant experience of, oh, wait, I'm in this group and they started a FaceTime and I didn't get a notification and I'm on a call and now it's doing a FaceTime and I start to, maybe it's just me, maybe I'm, I turn 30 and I just can't use device anymore, but it just feels like across the board there's less like polish than I remember and I'm wondering what you think.

I love how you prefaced it with Make It a Short Answer. Yeah, that's impossible. I think that to make it as short as possible, I think Apple over the last 10 years is facing a, be careful what you measure problem with software quality, where things that you can measure are things like crashes. When an app just crashes and it says like, hey, do you want to send a crash report to Apple

like if you've opted into the share crash reports with Apple thing. And their apps crash almost never, right? Like it's almost unusual when, you know, you're using Apple Notes and the app just crashes. It doesn't happen. And they've tackled a whole bunch of things like that because you can measure it, right? Like there's like a number that used to come in.

How many times, how many users today had Safari crash? while you can measure that and they've cut that down. The things you can't measure are things like your problem with FaceTime. Like I'm confused. How do I add somebody here? I thought that I added a third person.

Or there's an ability to call somebody but it doesn't ring on their side. Yeah. But I'm like what is the point of, what's the point of just joining a call when the other person's not getting a live notification? Well, if you happen to be in that I message group chat at the time, you can see that notification.

I know. The phone's a busy place, but I'm just saying it's like a terrible user experience every time where I'll send John a text. I'll just be like, John, we're in the FaceTime because I know he didn't get it. You can press the ring button, but it's an extra button. It's a perfect example because Apple's never going to get a number that goes up because you encountered that problem. There is no number that's going to land in front of Craig Federigi's dashboard of problems with Apple software that says Jordy Hayes had problems adding somebody to do a FaceTime today, but you did. And that's the sort of thing.

It's getting away from when Steve Jobs was there and was not just the CEO of the company, but the number one user of the products, right? And if that happened to Steve Jobs, that would get fixed. That would start getting fixed the next day, right? If he had problems adding somebody to a FaceTime call, all of a sudden, that would be the biggest problem in the world, right? For I message, I message, I message search, right? The number one app that I use.

Well, search is just bad everywhere. Yeah, but Apple should be able to create like the most elegant solution. It's the number one app. Search is bad everywhere. I'm not afraid to say it. Searching an I message technically works, but it is sort of like the way that putting two empty soup cans and tying a piece of string and holding it taut that you can talk to somebody through the can.

It does work because the audio goes through the string and goes to the can on the other side. But that's not what people think of when they think of talking on the telephone, right? And the way that you search an iMessage and the way that you get results in the sidebar is not the way people think of search. People think of, hey, I was searching for this one word. I was talking to somebody about this one word, and it was just a month ago. Just show me the goddamn message where I was searching for that word. And I think that's the sort of just sort of opinionated from the top thinking that was there because Steve Jobs was running the company.

And Tim Cook just isn't that type of person. And the company has taken on as a company more of the personality of Tim Cook. That's the nature of leadership, right? The organization tends to take on the personality of the person leading it. And there's a lot of good. things that have come from that. Absolutely. But I, and that's, for example, Tim Cook loves numbers.

And so something like, hey, how many times a week do apps crash? Those numbers have come down. But that is driven by a culture that kind of comes from Tim Cook. And I think, hopefully, under John Turnus, that they can sort of not turn the ship around, but just make a minor course correction back towards, hey, let's focus on just some. opinionated shit like, hey, this app is confusing. Like when you open this and you just want to add a collaborator to this, why does it look like this?

Shouldn't this be way more obvious? And I think, you know, we can't measure it. This isn't going to come with a number that goes up and down. It's a jenet se qua. We know it when we see it. But this isn't up to snuff. And I think they've gotten away from that. Yeah.

Well, thank you so much. Perfect answer. You fit it exactly into 60 seconds. Thank you. We got to do this again because this is super fun. We could go all over the place and there's so much more to talk about. Yeah, yeah. Thank you so much.

Have a great weekend. Have a great rest of your day. Thank you so much for coming on the show. It was a pleasure to be on. We'll talk to you soon. Have a good one. Up next, we have Ronak from Trajectory as the co-founder and CEO. We've been keeping them waiting too long.

We have the whole team. Let's bring them in. Give us the news. What happened? How much did you raise? Tell us about the company. Sorry for keeping you waiting. Please introduce yourselves.

Awesome. Great to meet you guys and thanks for having us on. I get started. My name is Michael. Before this, I was on the foundation of research in deep mind, build a lot of cool things in robotics and very excited about trajectory. Amazing. Amazing. What's up? My name's Arjun. Before this I was at Apple, working on Vision Pro and then multimodal foundation models. It was good hearing a lot of tea right before this. John also is the number one user in the entire world of the Vision Pro. Yeah, I watch full movies in the Apple Vision Pro regularly. All of his blog posts.

It's great. He's got some great on this. Well, I was saying, this John. Oh, yeah. Absolutely. Oh, this John. Oh, no, no. I'm like still a regular user of the Apple Vision Pro.

Yeah. I'll call John. It's so good. On a Friday night. It's like, I got to, I'm in the Vision Pro. Give me a second. I love it. We should chat.

Everyone else in our office is using monitors and everything. Sometimes Arjun is just like, they're working. Nice. Nice. We're great to meet you guys. I'm Ronak. I was at Wind Surf before training Sweet One. And then this led to the $2 billion acquisition of Deep Mine.

So went over there, as you guys probably heard on the news, and then left all the acquisition money on the table to start trajectory. Okay, but you raised some new money. How much did you raise? What's the news today? Yeah, so we raised $15 million from conviction. Hello. Let's get off.

Let's go. Amazing. Fantastic news. We're building the platform for continual learning. We're working with some awesome companies of Harvey, Decagon, Play, Rogo, Mercor, and basically building agents that learn online. So all of that, that usage, the edits, the retrys, everything they're using in an AI product, using that to make AI smarter every single day.

Yeah. Amazing. So, yeah, like 15 million seems like, you know, great amount of money to start a business with, but it doesn't seem like enough to jump straight to training a frontier model at the mega scale. So I imagine your approach is a little bit more capital light. how much of your approach is in the deployment phase with the companies that you're partnering with versus pure research versus something that's going to happen around fine-tuning something. Like, what can you tell us about how you actually deploy a model that is capable of continual learning?

That's a great question. I would say the way we're thinking about this is every lab is focused on building this, like, smart PhD student. Right? And how do you make this PhD student smarter and smarter? Yeah. But it's always day one of their job. Sure. And it's always that they're going to make the same exact mistake every time.

What we're interested in is building, like building an agent that is 10 years of experience on the job. It doesn't need to be a PhD student. It doesn't need to be like frontier level math or anything like that. But it needs to know your primitives. It needs to understand your business. And it needs to really, really understand your rewards. And with that, like just doing very, very light post-training can get us very, very far. So we have models that are 10 times smaller than the frontier models that are able to beat them.

But also, that's not what we're most excited about. What we're most excited about is that not only are we beating them today, but we're improving 1% every day. And that is continual learning. That's the most exciting part about continual learning. Very cool. Is part of this, too, you know, you mentioned some of the application layer companies that are your guys as customers. Is part of this helping sort of reduce their dependency on the model providers and help change maybe the kind of leverage equation there? Yeah, I think all of our customers have different motivations.

But I think really the main thing they're really attracted to is this idea that like what they're doing and their bet is that product like craft, product expertise, domain expertise is going to win and it's going to hold the taste is going to hold for the years to come. And they want to find ways to actually use that and work that into a product. Right now kind of their only lever is like prompt optimization, putting prompts in. and we view ourselves as a research lab in their back pocket, giving them the tools so that they can modify the models, modify the harnesses and have them modify together so that they can do what they do best, and that's make beautiful products.

Amazing. Well, congratulations on the progress. So great to meet you guys. Thank you so much for taking the time to come on the show. I'm sure you'll be back on this year. Yeah, any day now. Fingers crossed. Yeah, yeah.

Have a great rest of your day. We've got so many more things coming up. Yeah, yeah. So excited to see all soon, hopefully. Hiring in San Francisco. Is that correct? Yes, only in San Francisco. Francisco for now. More to come soon. We're doing our five days of trajectory right now. Check us out

and so many cool stuff to come. Amazing. Thanks so much. Have a great weekend. Thank you for coming on. We'll talk to you soon. Amazing. Thank you all soon. Bye. Up next we have Zane Mountcastle from Pico Grid. A good friend interviewed him for a video about the gundo years ago. I'm very excited to catch up with Zane. If we have him in the waiting room, we've been keeping him waiting. And so hopefully Zane from Pico Grid will be able to join in just a minute. We'll see.

Let us know who is in the waiting room. We're waiting. We'll give him just a second. Wish we had more time with the grubinator. Yeah. Yeah, yeah, we can go. I mean, he's a professional, professional podcaster. Dithering, of course, is available in the Stratory bundle twice a week.

We also have to say a little shout out to Jackie Shapiro from the Bronx. Apparently, she's one of our newest fans. Thank you so much for being. part of the audience and tuning in. It's an honor to have you in the audience. What else is going on? We have Jamie from Pace coming on in just a few minutes and then Chris says what we've all been thinking. Oh, what is that? Can you die from a lack of being called big dog? It's a big question. It's a big question. Do you get called big dog too much? No, not very often. I don't know. Okay. I think you have to put yourself in the right

That's work on changing. There are certain spaces where you might get called big dog. Yeah. And you have to attend. You have to open yourself to the opportunity. You have to open the door to being called big dog. Yeah. Like if everyone knows your name, they're just going to call you your name.

You have to be walking around in a certain space. Deep Fates. This was the post we had earlier. I fear not the man who vibe coded 50 new apps, but the man who vibe coded one new app 50 times. It's a banger post. I think he meant to say, but the man who vibe coded the same app 50 times.

Yeah, the same new app 50 times. Something like that. This was good. What else is going on? Over on Reddit, R slash CFA. Would it be considered insider trading if I'm on a hunting trip or safari with a CEO of a large firm

and they get mauled by hyenas and I start buying put options on their firm? Let's say I go to Tanzania. This does not sound hypothetical. The CEO of a very prominent firm in the United States when we suddenly get overraned by a pack of a dozen hungry hyenas. However, I and my youthfulness are, of course, quicker than this old man, and I managed to escape and hide behind a rock while the hyenas maul him. If instead of helping him fend them off, I open up Robin Hood and start buying put options on his company, would this be insider trading? There's absolutely no way this can be priced into the stock predicted.

Oh, but the material non-public info, blah, blah, blah, okay, but what if before I buy the puts, I post a video of him getting attacked on my public Instagram story of what then? Thoughts purely hypothetical. Does not sound hypothetical. Well, it all depends on what the market thinks about the CEO, because it's possible that the market sees his bullish signal. The CEO's now longer there. He's clearly pricing in the 21% nuke salute, you know, where the market, at least briefly, It sells off 21%, and then hopefully it pops back up.

But of course, everyone's paying it's priced in. Everything's priced in. Well, we have Zane from PicoGrid here from the New York Stock Exchange. Welcome to the show. Sorry for keeping you late for running late here. Great to see you. How are you doing? How are you guys?

Congratulations. Why don't you give us the news? Then I want to go into the product portfolio, the traction, everything else. But what happened today? So we announced our $45 million series A led by Bessemer. There we go. Fantastic. Congratulations.

Big number. So take us through the product portfolio, the traction, the latest with PicoGrid. So PicoGrid, we build technology to help integrate different mission critical systems. So think our sensors, our drones, our robots, our weapon systems, mainly for military applications. What that means is sort of we're building the open infrastructure that is the hardware and software tools that make these systems work together. connective tissue or the glue between these different platforms. We have active contracts right now with the Pentagon, with NATO, with various allied partners around the world,

supporting a whole bunch of different applications. Yeah. When we first met, you had an office in El Segundo. Still do. Still do. It felt like, you know, a lot of R&D going on, a lot of experimentation, some really great traction with the systems that you'd built. But I imagine that a lot of this funding round is thinking about

larger scale manufacturing, what does that look like? Do you need to, you know, bring on new people by automated equipment, set up a manufacturing line? Like, what does the next couple of years of the business look like? Yeah, so the big bulk of the round is going towards, is continuing to build out the team. And with that, all the investments in the underlying infrastructure to build out. And really, you know, our biggest challenge the past couple years, John, has been keeping

our head above water, right? keeping our head above of all the demand that's coming in and how can we best serve it without stretching ourselves too thin. Yeah. And that is in the past, I think, three or four months, just given all the traction that's been building up. We've actually, I think, 7xed our production line and did so as successfully as you can 7X production line

in a couple months. Yeah. And it's been a fun journey. So, I mean, if you're keeping your head above water, is there a tension between wanting revenue diversification from different customers, different branches of the, military, different organizations, and focusing on one delivering at scale? Is there attention there or is it more of like dual use, public-private?

Because as you sort of lay out the product portfolio, like there are lots of applications here, right? There are. And you can look at the problem that we're solving is really inherent to every physical industry. Military just happens to be a very large physical industry that has, that's really leading the charge and the adoption of these autonomous systems, the sensors, your drones, your robots, all of that. And it's where the integration bottleneck has been most acutely felt. And it's

so for the reason that we've, for that reason, we've really focused on selling to the military. Looking forward a couple years, I think there will be a strong commercial presence as well. But, you know, one of the things with dual-use tech is your sales motion to the military and your sales motion to commercial industry are so different. You have to really, bottoms up think about how best to sell to each of them independently. So, you know, for the time being, just given how much demand we've seen on the government side, especially in the U.S. military, but we're now seeing this across allied militaries as well, is really focusing on how can we best serve that application.

And like you were saying, diversify across services, but even within given services, there are many, many different program offices, different customers, different mission sets that we can and we are serving and continue to expand out. I was just in Colorado Springs yesterday morning at an Army event, a big Army event called The Right to Integrate with the Secretary of Army Dan Driscoll. Monday morning will be back in Colorado Springs with U.S. spacecom, and so we're able to support a lot of different missions with the underlying technology that we have. Last question for me, do you have any insight into the ramp around domestic manufacturing of solar equipment or solar panels? We've seen some companies, T1 Energy has been on the show. It feels like there's starting to be momentum there,

but what are you seeing in that piece of the supply chain? That's a great question. I don't think I've had that question before. I think we're seeing like manufacturing across a lot of different industries, especially really critical industries. I think energy being one of those, a lot of that is being sort of re-domesticated. For us, a lot of our, for the solar panels that we do buy,

for one of the products, Lander, most of those actually come out of Europe. Okay. We, for a good reason, we can't use Chinese panels, which is where most of them are manufactured. Yeah. So we're using European panels. Yeah. But with that, we're definitely seeing a ramp up of manufacturing across all sorts of energy systems and, you know, hard tech, silicon, all of that domestically.

And that's ramping up really, really aggressively. Yeah, I'm really hopeful. I mean, we've had Casey Hanmer on the show. I'm sure you're familiar. and it feels like there's all the ingredients on the capital side, the AI demand that has a ton of demand for solar. Like that could be another big mega trend in the next couple of years that I'm excited about. Jordy, anything else?

No, great to have you back on. Give our best to Lynn Martin. Hopefully she's running around on the floor. And have a great day at the New York Stock Exchange. Have a great weekend. Great update. Thank you. We'll talk to you soon.

Have a good one. Thank you. Goodbye. It has to be. Has to be one of the most powerful names. Yes, Mount Castle. Mount Castle. It's great.

In Mount Castle. It's arguably the most regal name. It's a fantastic name, and he's been fantastic successful. But we have Jamie from Pace here in the waiting room. Sorry for keeping you waiting. Back. Welcome.

Not at all. It was great to be back. Thank you guys. Thank you so much for hopping on. You've been incredibly busy. Yes. Give us the news. Give us an update.

What's going on? Yeah, well, we are super excited today to be announcing our $46 million series B. Go ahead by Thrivedicola. We participate in for emergence and proving. Yeah, super populous. So what has been the key unlock? I mean, insurance operations.

Obviously, there's a lot of intuitive applications for AI and insurance. I think people understand how this product can be valuable. But what is the shape of the go-to-market motion? Is this something where you get one big insurance company and like that's 50% of the market and you're good to go? Are you working with startup insurance providers? We've talked to so many different people that are figuring out how to insure data centers and all sorts of different new things and underwriting and new pools of capital. But where's been the biggest growth source for you? Absolutely.

So PACE is the AI operations partner for the world's leading insurers. We primarily are focused on the world's largest insurers. So large carriers, large brokers, there's like Prudential WW-Convex that are our customers today. And we're really helping them to automate a lot of their back office operations and help ensure more of the world's risk. What are the biggest challenges right now? We've talked with people from all different types of companies selling agents into the enterprise.

There's plenty of workflows where if you're getting things right, 90% of the time, it's not even close to good enough, right? But then there's others where that's a good kind of like first pass and just makes the existing back office team more efficient. So like what's working? Where do you want the models to get better? How are you kind of taking that into your own hands? I don't know if you guys are doing your own, you know, post-training and things like that.

Or, you know, leveraging open source models. But yeah, what is the current state of things? Yeah, absolutely. So I think that's definitely very true in our regulated market where, you know, many of our customers have 99.9% plus accuracy SLAs and we are hitting those day and day out. And that we have to because that's, you know, that's the, um, the way that he's got into production for our largest customers. Um, you know, for us, some of the things I'm really proud of as a statistic for our company is that we've had 100% win rate from pilot to production. And a lot of that is because we, you know, it's, you know, it's a lot of the product and then our forward deployed engineering team that are working with our largest customers to help them successfully deploy these agents into production. And so I think a lot of what we're seeing in terms of being able to deploy and hit those sort of accuracy levels and really see our customers getting the automation rates and the ROI they want is really a combination of the insurance expertise that we have as well as the AI

expertise and kind of bringing that together. what that has looked like for our customers is we have customers that require that 99% plus accuracy. We have customers requiring hundreds of thousands of tasks to be automated every day in the background. And we're doing that fully autonomously with agents. You know, we have, for example, Palomar, one of our customers has said 90% of their tasks

are being completed from intake to outcome successfully by PACE agents fully autonomously. And so, you know, we've been super fortunate to see that in production. In terms of what has been a massive accelerant to our business in doing that, certainly it's been the models getting better. We have very much lent into these agent operating procedures, so sort of natural language instructions that the agents used to complete these tasks long running. And as the models get better, our product has been getting even stronger. And I think one particular area we've seen that is in computer use. A lot of our customers had challenges in the past deploying products because they needed to integrate with various APIs.

either were too expensive or, you know, just prohibitive to build out or didn't exist. And computer use models, they've really gone from something like 30% accuracy on our evals to, like, 95% plus. And that really allows us to get these models into production and particularly work around cases like desktop applications or legacy web apps or even like we've seen the green screen CLYs, you know, and being able to have the agents get live and do this work fully end to end. So those are a few of the unlocks for us recently. That's great. Another question, there's been some new insurance startups that have been growing very quickly recently,

and there's been some debate around ultra-high growth when you're basically in the risk business can be risky. How do the companies that you guys work with think about growth? Are they really just trying to speed up? the back-offs, speed up the back office, speed up just like, you know, increase efficiency. So when a new customer comes in, they get them, you know, onboarded as soon as possible. But like, what is their general philosophy around growth, given that these are companies that are at scale? I imagine they're not coming to you saying, we want to be able to grow three times faster by

doing this. It's more creating efficiency on the back end. But what do you think? Yeah. So, you know, for our customers, these are, you know, in many cases, like 100-year-old plus businesses that are thinking about what does the next, you know, decades and centuries look like as they want to, you know, serve their customers better and better. And I think that one thing that's like really top of mind for the business is the protection gap. So last year, 60% of the

world's losses were uninsured. So that means, you know, a house after a hurricane that's flooded, you know, might be uninsured or, you know, life insurance or being just a massive protection gap between what makes sense for a family having life insurance versus what they'd have today. And I think a lot of our customers are thinking about that's their kind of responsibility is how do we shrink that protection gap? How do we take the $9 trillion of risk today that is uninsured, that should be insured, and enable that to happen? And so for us, what I think we've been most excited to see is when you take the operations component with the operations component, with AI-needed operations, you can truly change the economics.

What we are seeing is two orders of magnitude less spend than would have been needed before with agents. And what that enables is our customers to launch new products, which they have, to be able to deliver an experience to a 10-person company that is similar to the experience that they would have previously only been able to provide to a 10,000-person company for a claim to be paid consistently on time every time. And so that's like really what our customers are pushing towards, which is how can we close that, you know, protection gap

enable sort of the 60% of these losses that are uninsured to be insured. And that's truly, I think, what is so exciting about this opportunity is like, this is the moment that we can really unlock the sort of operations that makes that possible. Very cool. Fantastic. Well, I have a bunch more questions, but we'll have to do it the next time you're on the show. Which, because we've been running late. I got a feeling we won't have to wait that one.

It's going to be any day now. see absolutely thank you so much for taking the time have a great one sorry good see you guys we'll talk to you see you soon have a good one uh up next with Kyle Kuzma NBA champion entrepreneur investor he's with us in the waiting room and we'll bring him into the TBP in Ultradown very excited to meet you Kyle how you doing what's up boys what's up how we're doing you've been tearing up the timeline yes we love it thank you guys for having me thank you guys for having me I learned a lot for you guys actually so Thank you.

I'm doing to this, but you guys help out a little bit, so thanks. Yeah. What got you into investing originally? Well, I mean, that really starts like when you first get into the NBA and obviously you have a financial advisor and then you learn about, you know, typical stocks and bonds. And then I had a lot of great mentors. Like Colman Bryant was a really good mentor for me, especially, you know, he had a fun right before he passed away and he told me to get into it.

And I think that was my very first, you know, type of access and, like, get in with the whole VC and the tech space with everything. And, you know, we can only play basketball for a certain amount of time. Yeah. And you got to make it count. But then you got, like, 40, 50 years to, you know, still live. So what else you're going to do? Because, you know, that money doesn't last forever. So, yeah.

What was Kobe's advice to you? Was it, hey, here's all the things not to do because you get into the NBA, suddenly you're making to money. and you get a million opportunities thrown at you every day. So I imagine your financial advisor's primary job is like, how do we just make sure to not do all the dumb stuff, focus on the basics. But what was Kobe's main advice for you? Well, the number one thing is probably just keeping the main thing to main thing. And that's like, you know, making sure you're focused on whatever your true primary thing is.

And that's always basketball because there's going to be nothing that gives me a return, you know, unless I'm like an early investor in the SpaceX. something that is going to, you know, propel me like basketball will. But yeah, when you have a financial advisor, they try to keep you very, very conservative. And you think about the little things that you can get, you know, God willing, 10, 11 percent, you know, annual return. But, you know, for me, I want more. And I think that, you know, when you start thinking about, like, the private investment side, looking into space and tech and all these things that have crazy, crazy multiples and are, like, flying off the shelves right now, you know, that's where the interest is,

at least for me. So, yeah. How do you think about endorsements versus equity versus investing? There's so many different ways outside of basketball to apply your skills, make money, compound. But there are sometimes tensions and sometimes an investment makes more sense. How do you think about these different tradeoffs? Well, you know, I'm, I mean, I'm going into almost year 10 in the NBA, right? And I think that athlete.

Overnight success. You have all these, you know, you have your agents, you have managers, and they definitely want you to get, you know, the endorsements, right? Because they get their fee, and it's a little bit harder for you to really justify, you know, okay, what does this equity mean for me? Because, you know, 90% of things fail anyways, right? So, you know, I think it's all about, you know, getting with the right people, understanding what you're getting into and, like, educating yourself.

You know, for me, I'm not the smartest person in the room. And, you know, I think that's one of my best traits that I've had because, you know, anytime you can be inquisitive and you have curiosity, like you have the upper edge on, you know, almost literally everybody. Yeah. But you might have increased access, increased availability to just meet CEOs early, get into rounds. Have you ever thought about having other teammates or friends or even traditional? investors sort of tag along with you. Do you see this becoming a career like Kobe did with a fund

that other people could invest in? Oh yeah, 100%. You know, I think for me, over the past couple years, I've been, you know, kind of that singular investor and, you know, getting onto cap tables or, you know, hopping into other people's SPVs or, you know, in the VC space that I know and I can hop in. But, you know, learning this space a little bit, you know, the money is, you know, having a fun, you know, being able to, you know, take the upside off of your access that you have. And, you know, I'm in such a unique position because as an athlete, everybody wants to talk to you. You know, everybody wants to be around you. And, you know, you can use that for multiple ways.

You can use that, you know, to be cool and, you know, party and have a fun, good time and be famous. But you can also use that as leverage to build your own platform if you're knowledgeable enough to then use that access. to get into, you know, blue ship companies that, you know, can really change your life. So, yeah. Yeah. Yeah, there's blue ship companies. I feel like there's a tight enough circle that you can probably take those meetings during the offseason or when you're not practicing or playing. But have you had to, have you had to turn away meeting invites to seed Series A founders? Because just to see the landscape of everyone who's operating at that level would be just dozens of meetings every day? Or is there something about that that, like, oh, you want to go earlier stage?

at some point. No, I think you definitely want to go earlier stage at some point. I think I'm at that type of inflection point now. You know, I think a lot of my investing has been typically, if it's not, you know, real estate or CPG, you know, getting into tech space, a lot of late, you know, late stage growth companies where it's more surefire, you know, it's going to hit. But, you know, those multiples when you talk about IPO or somebody acquiring you, you know, maybe a three, four, five X, which is all great, right?

But, you know, to get the 100 X, the, you know, the crazy uniform. You want, let's be honest, you want the 1,000 X. Yeah. You're not going to. Come on. Of course. Of course. Jason it.

Do you find one of the challenges with privates is that you can't, you know, you can only get in for the most part, at least directly in these certain moments during the season. There's a big round happening. Yeah. If there's a big round happening, do you find yourself being like, I'll keep tracking this company, but I'm not going to chase it right now or just. just given, given, I imagine there's moments where... Or do you have a partner who can sort of chase it down for you? Yeah, well, you know, I do a lot of research on my own, but I'm very, very thankful to have just like a vast network

of, like, resources and mentors and people that are, like, way smarter than me. And I think that's, like, the most important thing, you know, because my main thing is playing basketball, right? And I can only do that for so long. But, you know, I think that, you know, I'm in that situation now. there's a couple of companies that like I'm looking at and they're like preseeds or they're looking at you know they're safe rounds and I really really like them but you know I'm at that point where you know putting you know 25 75000 into like one of those companies it really doesn't make sense when you know I'm focused on a lot more like late stage broke companies right so you know I think you want to track you want to do this but you know for me I'm just wired differently and I think that like I think it's part of my ADHD that I have.

I'm able to focus on a lot of different things at once. And I think that, you know, when I'm playing basketball, if I'm during, during season, you know, we're not playing basketball 24 hours a day. So, you know, you have to pick and choose, you know, your hours wisely. So, you know, if I'm playing basketball, I have to study film, if I have to work out, you know,

I handle that. But then, you know, as soon as I get home from three to six, three to seven, I'm in my office. That's great. You know, and that's like study time and my learning time. And I can really focus on, you know, understanding different landscapes because, you know, Every sector is different, right?

And, you know, the cost for different thinking. Is AI changing basketball in any way? I imagine you guys are accessing new tools all the time, using the models to do analysis. But how are things, how is AI changing basketball? I mean, I think most of us kind of hate it a little bit, you know, just the analytic standpoint. Oh, sure.

Because it's like, you know, it's like being micromanaged. It's like, You could have been an inch over here. Bro, it's like, it's like literally like a computer telling you, hey, you should not be taking this shot. But the computer is not the human and I'm sitting there. I'm like, yo, I'm wide open. You're telling me not to take this shot.

But I'm open and I'm a professional basketball, but I made this shot. Shut up, computer. I don't know if you guys seen this. I think, and I'm not too super educated into it right now, but saw Adam Silver, he talked about, implementing something like Hawkeye or something for like out of bounds and replays, which I think that's a great idea. Yeah.

Because, you know, we had these coaching challenges and like, you know, stop during the game where, you know, five minutes of like real time may like go off and we're just sitting there. And I think that like making a game faster in that aspect would be huge for us. Yeah, just enforcing the rules. But you're not trying to get, you're not trying to get a micromanaged by a computer. Yeah. What about on the training side? Is there anyone using like AI or, I mean, the other mega trend in Silicon Valley right now is like peptides?

I don't even know if there's illegal in the NBA, but are there any like breakthrough changes in like training, performance, longevity that you're seeing like sort of have moments? I mean, the whoop is like the biggest moment. I think. Yeah, the whoop, you know, like I don't really, I wish we could wear it during games. I tried to and like the league made me take it off because all summer. You know, that's how I really track my daily life. You know what I mean? Like I, they should pay me for what I'm saying right now.

Wait, are you not an investor? No, I missed not yet. Okay. Well, they're still pre-IPA. No, like, it's not always about that. It's about, you know, good products. And, you know, I think it's amazing because you can track everything that you need, your sleep, your workout, your stress, your strain.

Yeah. And I think that, you know, as we go, there's going to be more and more things that pop up, especially in the, you know, athletics and, you know, professional sports and just, you know, just daily lifestyle, you know, because that's what you're, you know, you alluded to earlier with like, you know, I know the biohacking scene and the founders in the tech space. Like, it's a huge thing. And rightfully so. Yeah, we can't take peptides, but, you know, there's a lot of, you know, studies that suggest that it's really, really good for you. And you probably make it more better. And I know I see you guys talk about the enhanced games. I don't know about steroids. But. Yeah, what was your, what was your reactions to the enhanced games? I don't know if you were to track it, but it showed us, like, you know, just absolute dedication and hard work and the human spirit can seemingly overcome, you know, PEDs. Well, you know, I don't know too much about the PED aspect, right? But I kind of feel for certain athletes, right? because as an athlete, you know, we put our blood, sweat, and tears into this, right?

If you're not really a part of, like, the power three, four, five sports, like, that don't create a revenue and don't really have, you know, a system where it's like unity and everything is fragmented, like, you know, like covalting and sprinting and swimming, these guys are training their entire life for four years for five minutes. Yeah. And, you know, going to the Olympics, they don't make any money. make 100, 200,000. I don't know what it is. But it just seems like so shit to me. You know what I mean? And I think that the enhanced game is very, very intriguing because these other sports, they get a

chance to one in this day and age when, you know, you think about AI and, you know, everybody thinks, oh, you're going to lose your jobs or whatever. But sports is the only thing that's going to be really bulletproof because we want to see it and everybody wants to watch it and feel it and touch it. And I think that it's going to be important for these athletes to get paid. And if I'm an athlete, I train for four years and, like, I barely make money. Like, what else am I doing? Like, this is a nice avenue that's interesting and it's different. Totally.

Yeah, that was my takeaway. I was like the silver lining here is, like, athletes have, can extend their career. These sports maybe become more interesting to follow if there's, like, high-level competition outside, you know, that gets, lot of attention that's properly marketed like enhanced games were. And you can imagine that a lot of the more like if they're restricted drugs right now, those might be studied more and then used after someone retires to recover, remain healthy as they age. If they went really hard in professional sports, beat up on their body, they can get some of

that back in their 50s and 60s and not have the toll of the physical, the physicality on their body. Take us through American Dynamism. industrials, and or all, SpaceX, super interesting companies. How did you get interested in those? How did you get up to speed? What was exciting to you about those companies? Well, you know, when I think about that, you know, I think that, and this is like my

perspective of like investing and, you know, there's a lot of like tensions and a lot of stress going on like geopolitically. And I love where I'm from. I love America, right? I'm sure we all do because it's given us all this place. platform to even be speaking here, right? Yeah. I like that.

And then, you know, I just believe that if you're an investor, like, why are you not focused on investing into one, serious things, but then two, things that have, you know, America's interest best at heart, right? And you think about space and you think about defense and where we're at in this world, you know, private example, space is a crazy economy that's about to open up. You obviously hear about SpaceX and all the other companies that are getting a lift from valuations within it. But, you know, our counterparts and our other people, other countries in the world, they are focused on space and they're focused on getting to the moon and they're focused on all these satellites. And, you know, whoever really rules space is probably going to rule the world because, you know, when we fight wars and we do certain things on Earth, a lot of things is, you know, horizontal because, you know, we're fighting.

on this realm. But up there, it's linear. You're looking down and there's a lot of things that can, like, really go wrong if we're not focused on, you know, preserving, you know, America. That's a fantastic SpaceX bull case. I love it. That is extremely convincing. What, what it, you're, you said, coming up on 10 years in the league, what advice would you give to the young Kyle Kuzma on private markets with what you've learned so far? You mentioned some of them, you know, work with smart people, build the right network, but if you were to summarize it. You know, I have a really, a really big friend in the space, and I asked them this question, like what would you do, or what type of advice would you give to, like, a young investor like me?

And he told me, don't be stupid and follow the money. This is the most simplest thing you can do, you know what I mean? Because, like I said, there's so many people that are much smarter than me, much smarter than all of us that do all this due diligence that understand the landscapes of every industry, every science, every biotech, every defense space company, you can name it. And I think that, you know, following those guys' leads as much as you can, but also making your own, like, you know, critical thinking, educated guests on certain things is super, super important. So, yeah, trust your gut every once in a while. Yeah. Well, thank you so much for hopping on the show. Let's do it again

back. Let's do it again soon. The chat wants to know how you're thinking of who you got for the finals. I don't know if you're making predictions. I don't know, man. You know, honestly, there's a part of me that I just want to see New York win because I literally want to see New York go up in flames. Like, win or lose, literally think about this. Win or lose, the city is going to burn.

New York fans are one incredible. Yeah. Really incredible. And you can just see all the memes and stuff after they win. JR's me, he almost got pummeled in the streets. Like, I want to see more of this.

Like, is this funny? A Joker over here. It's in New York win. Chaos. Just amazing for the NBA. But this game seven is going to be serious. It's going to be real,

you know, and I think it's hard for anybody win a game seven on the road. You know, and I think history and analytics kind of, you know, support that a little bit. But, you know, I want to,

see when be versus the Knicks. I think it'll be sick. Yeah, that'd be sick. Well, thank you so much for coming on the show. Have a great weekend. Yeah, that's just super fun. We'll talk to you soon. We'll talk soon. See you. Goodbye. Up next, we have Brad Gersner from Altimeter Capital. We're keeping him waiting. And we're very happy to have him join the show again for the second time. Welcome back. How you doing? Great to be here, guys. Great to be here. Fantastic. Yeah. Yeah. He laid out one of the greatest SpaceX bowlcase. We're going to throw it to you to try and one up him. He said, whoever controls space controls the world.

And for that reason, you got to own SpaceX. I liked it. But take us a level deeper. What are you thinking about in the SpaceX IPO and the lead-up? What are you watching for? What unanswered questions are there? What do you think is misunderstood maybe that more people should be aware of? I mean, come on, guys.

We didn't even have any foreplay. You've already tried to be down into SpaceX IPO. I mean, first, I haven't seen you guys. Did you sell this thing? thing? Hold on. I think we're working for you now. I think we're working for you now.

Did you guys get shares in Open AI when you sold this thing? Yeah. Everybody on the team. So we're all on. We're on the same team. Yeah. Okay. Yeah.

How much of mine did you make? Yeah. I mean, we got to turn the tables a little bit. Anyway, let's talk SpaceX. Well, well, maybe before that we can rewind a little bit because I do remember the last time we were hanging out in person. it was at Katzenberg's event, right? You were basically, it was kind of this interesting moment

because in some ways we were going through a mini correction, right? Like chatbots, you know, grew incredibly quickly. Agents were just starting to work. And it's been interesting to see how the market did go through this correction in Q4, but then realize, hey, whoa, agents are a thing. And you had pretty much perfectly called that in the conversation that we were having, which, yeah, in some ways it's just been, it's been such a wild year for so many reasons, but I feel like you had somewhat of a crystal ball back then.

Well, I mean, thank you. And I recall that conversation. And the truth of the matter is we've gone through several many corrections over the course of the last two and a half years, right? There's been a wall of worry. I mean, on my podcast with Bill, Bill Gurley, you know, we debated this. Bill was saying, will the revenue show up? Will there be gross margins?

Will there be ROI? We're overbuilding. Every supply constraint turns into a glut. And we saw all that wall of worry last year. I mean, I think for me, the turning point was when we hit inference time reasoning and we really had this whole other vector of scaling intelligence. And I remember having Jensen on the podcast. And he said, Brad, inference isn't going to 100x, not got a thousand X.

it's going to one billion X because agents are going to be talking to agents. Yeah. Right. And so I got very pilled. And then what we saw Opus 4.6 in the beginning of December, it was clear that we had crossed a threshold of intelligence that offered a level of utility that was fundamentally different. Yeah. And if you were paying attention early in December, you could see that coming. But we started the year with the market very skeptical as to whether or not AI revenues would show up.

And let me tell you this. had Anthropic not delivered its revenues that it's delivered this year, I think the stock market would be down 10 or 15%. I think it's that important to the entire narrative. Because the fact of the matter is Open AI has not blown away their numbers. Google has not blown away their numbers. Like numbers have been good, but the fundamental driver of outperformance in terms of offtake of AI revenues

has been Anthropic, which is the fastest growing company in the history of capitalism. So that buoyed the entire AI sector. And it was when they started posting those numbers and then they said on top of that, we're doing it at high gross margins in a way that in Q2 may in fact actually lead to free cash some positive free cash flow. The market really ascended. Remember, two months ago, the market was basically down on the year. And a lot of these returns, we just had two of the biggest months in the history of Ultimiter's

public funds. That's 18 years. I mean, we're going back a long time. But that's, you know, listen, I think we picked some pretty good stocks, memory, logic, et cetera, but I also think it's just a function of the market delivered. These companies delivered. You saw Dell's, I mean, listen, Michael Dell, one of my best buds. And you watch the act, you know, that he's delivering with Dell.

They just had AI server revenues up 750 percent year over year, went from a $1 billion business to a $16 billion business. This stuff is real. But in order for it to stay real, we have to continue to see usage by consumers that they're willing to pay for and growth in the enterprise, small, medium and large that they're willing to pay for, and growth in the sovereign domain. I think it will occur. But oftentimes, you know, there'll be some pockets along the way here where, you know, where revenues won't be as strong as people think, we'll have some pullbacks. We could have 10 to 20 percent pullbacks in the semiconductor stock

as just like run-of-the-mill consolidation. Yeah, yeah. Right? Run-of-the-mill consolidation. I mean, Micron has gone from a couple hundred bucks to a thousand bucks, Dell, this time last year, year was I think $80 or $90. It's now at $400. These are seismic moves. Yeah. Right. And so, yeah, fortunately, we were pretty bullish when other people were skeptical.

Yeah. But yeah, it feels like there's, there's like this natural reaction. Anytime there's good news, someone has to dig up something that's like a little bit bearish. Right now we're seeing, you know, incredible anthropic revenues. And then there's questions about ROI on token maxing and how much is going on there. How are you processing that? Are you thinking that we'll see CEOs and management teams on the next earning cycle sort of start to dig into those numbers?

Or is it just the more? Your honor, I had AI psychosis. Yeah, well, that's the most extreme version. The other one is, yeah, we actually did spend half a billion dollars in a month. And, you know, a quarter billion was super effective. So that's what we're doubling down on in the coming quarter. But how do you think that shakes out? Well, I mean, if I size up the debate in Silicon Valley, right?

there are the bears who've been bearish on AI for, let's call it, a while. And anything that comes out, anything that comes out is actually just still married bearish. Right. And so now they're saying, oh, all this AI revenue is bullshit. First, they were saying it won't show up at all. Yeah. And then it showed up. And then they're saying, oh, it's all bullshit because it's all token maxing. And there's no ROI. So that's one side. Yep.

On the other side of the people who are super AI pilled and they're like, oh, no, this is perfectly, you know, Pareto optimal. everybody's spending the exact right amount of money on tokens, which we also know is not true. And the truth buys in the center, okay? When you have millions of independent actors, all making self-rationalizing decisions, like Altimeter, on buying tokens, right? I don't like to waste money. Yeah. I'm spending money because I'm getting a return.

Now, will we experiment with some things that don't provide a return? Of course. I actually sent you guys a slide on this. I think it's pretty fascinating. I don't know if your team can pull up. But this is independent research that we did on this question of token maxing. And what we did is we went to 300 enterprises, right? And we just asked them, are you starting to optimize your spend?

And if so, how much do you expect that you're going to spend year over year over the course of the next 12 months? And if you leave that chart up, what you will see, guys, is that in the first category, these are all people who are actively optimizing. But they still expect to grow revenues at over 50% over the next 12 months. The second category are people who are planning to optimize. And even if they're planning to optimize, they say they're going to grow revenue at 90% and so on. So here's my point on this, right? And this is across 300 firms who use a multiple of AI solutions.

This is what they expect of their AI, you know, API token usage. Yeah. So what do we, what does that tell us? it tells us that, of course, people optimize along the way. But we are so early in the adoption curve, right? They're barely using coding today. They're just getting on the coding train. And they haven't really even started on using AI for knowledge work more generally.

So we're low in the use, the penetration of coding as a use case. We're almost nowhere in the penetration of knowledge work more generally as a use case. And then remember this. There are very few enterprises globally that, or even using AI. So we're really early in the curve of the people who are actually using AI. So I'm somewhere in the middle. Of course, I believe that optimization will continue. But my hunch is that Anthropic and OpenAid, these companies will continue to grow right through the optimization because the growth curve on penetration of both enterprise and use case

is so steep. But, you know, we'll see. Yeah. Is this a zero-sum market where every dollar spent on tokens comes out of a SaaS company. How are you reflecting on the SaaSpocalypse? Because we all saw what happened in the market. But there's been some really good news lately. How have you processed that? Well, I popped on CNBC for a second yesterday and was talking about Snowflake as an example. And the stock was up, what, 35% yesterday. Now, of course, just to be fair, it's only up 10% for the year compared to a company like Micron up 200% for the year, a company like arm up 200% for the year. But they did bounce back.

And what I think we're starting to see is the bifurcation. There are companies that are in the token flow. So all these software companies, we just lumped together. Right? We treat them as though they're all equal. Sure. But there are certain software companies, data bricks, snowflake, and Clickhouse, all of which we're investors in, which very clear to me, they're in the token flow.

As you consume more tokens, the amount of your database queries goes up. I see it at Altimeter. Right. In fact, our database queries are growing faster than our token usage to give you a sense. Yeah. And this is, I think, happens. So now they've proven they're in the token flow. So they're starting to get some love from an AI multiple perspective.

That's very different than a company, I think, like Salesforce. And I love Mark Benioff and got, you know, if anybody can, you know, get in the token flow, it'll be him. But the reality is the front-facing solutions that they offer are more competitive with the models than something like Snowflake. Snowflake's the enabler of the models, whereas I think that Salesforce competes a bit more, so it's going to be more challenging. But I also, I've heard so much about this saspocalypse. And listen, I did a pod with Sotcha, I don't know, 18 months ago where he caused a stir by saying software is a thin user interface on top of a crud database.

And Bennyoff and everybody freaked out. They're like, what are you saying? It's way more than that, right? And then Bill and I did a pod, is software dead? So it's not like this is new. But then everybody started freaking out and disqualification. out in December, all these multiples reset. But the question is, what did they reset to? Okay. And this is what I want to focus on here. So if you show this slide that I prepared for

you fine, esteemed gentleman, you know, what this slide shows is that the multiple correction just took software from a place where they were way more expensive than the market multiple and brought them into the category of the market multiple, right? So now they're trading at about 22, 23 times real SBC included gap earnings. That's about where the market is trading. So now just follow me on this. Software is trading, mostly software names are trading at a higher multiple than Invidio. Yeah.

Right? Invidia is trading about 13 times earning for 70% growth for the thing that is the most essential thing in AI. And they're at twice the multiple. So like when I hear everybody crying that, hey, these multiples aren't fair. It looks to me like the multiples reset from an above market multiple where everybody thought the software revenues and earnings were impenetrable. So now they're saying, well, I don't know. Some of this may be three, four, five years out will be replaced.

So we're going to raise the discount rate. We're going to lower the multiple. They've only lowered it to the market multiple. Let me just suggest that there's a possibility these trade well below the market multiple. Sure. Right? I'm not wishing for that, but I'm just saying there's a distribution of potential outcomes here. If you get on the AI train, if you get in the token flow, you're going to get above market multiple.

If you don't, if you slow down and it looks like every time that computational intelligence improves your business gets worse, then I promise you they will trade below the market multiple and there's more room to the downside. So for us, as investors, you know, Warren Buffett has this, you know, this old metaphor, you know, There's the easy basket, there's the hard basket, or the yes basket, the no basket, the too hard basket. For me, software today is generally in the too hard basket. Yeah, it's notable because you've been saying that, I think, for months now. And there's a lot of people now that there's been a stabilization that say like, oh, I'm smart enough. I can I can outsmart the market here.

And like you're saying, even with where multiples are now, you still could be catching a falling knife. I wanted to ask you about the potential data center moratorium and how, you know, the likelihood of something like that in your view, how that would, if you have less capacity coming online, that would obviously be bad for, you know, chip companies, various companies in the hardware supply chain. But it could be great for people that are actually have, you know, basically like have tokens to sell because they would potentially get more pricing power. How do you- I think it's bad for everybody. It's bad for everybody. But most importantly, it would be horrific for America. And lest we be overconfident in Silicon Valley, let's remember

the activists, a small group of activists shut down supersonic technology and a small group of activists shut down all nuclear clean energy in this country. Okay, we have 100 fission reactors being built in China. We have one in the United States. It's a disaster that happened. And so we can't take for granted that the cooks who are calling for data center moratoriums, right, which just think about this for a second. All of our GDP growth is coming from the fact that we are building data centers and driving

AI and driving productivity improvements in the economy. A data center moratorium would thrust us straight into a recession and high unemployment. it. Secondly, it would seed the entire global game to China. Like overnight, we would lose to China in the global AI race, which is not just about AI. It's about economic security. It's about jobs. And it's about national security. So it literally is insane that we would do this. I can't even believe there are people talking about it. Why are they talking about? Because people are concerned. Local communities are concerned. I just got back from celebrating my mother's 90th and rural Indiana, you know, over the Memorial Day weekend.

And what I'll tell you is, her, happy birthday. Happy birthday. She's incredible. She has so incredible. But you think about a place like Michoaka, Indiana. Yeah. Where, you know, they're building a data center. I mean, folks here, they're worried about their jobs.

They're worried about their kids having jobs. And then they're told by these crazy activists who show up in their town, they're not going to have any water and their electricity bills are going to go up. So can we blame these people for being a little agitated about what's, going on. So I'm actually working on an initiative. I'm not prepared to announce today, but with like everybody in the value chain, all of the cloud companies, all of the invidias and AMDs and, you know, and off takers, et cetera, and the White House that would deliver a very tangible and profound dividend to the communities that were building days. There we go. There we go. I love it. I think it's

there's a very elegant solution there. You're the guy to do it. You're the hero that American capitalism deserves. You've got Trump. count's done. I feel like this is a good, good next act for you. Well, I'm, I'm in the mix. I'm happy to do my part. There are extraordinary people around the table. But here's the thing. We have to build the socio-political bridge for the next three years, right? In three years, it's going to be obvious, I think, the abundance and the benefits that AI is driving for us as consumers. Everybody's going to have their own personal assistant in their pocket, right, for next to nothing. Think about that. Can do your calendar, can order your food.

can, you know, get you a new black t-shirt, send mom a birthday present, all the things. And every enterprise is going to have things that up-level us all as humans. So I am firmly, just like, you know, John Maynard Keynes was at the start of the Industrial Revolution. I am firmly in camp optimism about technological progress. But I'm also not head in the sand about the disruption and the concern people have for the next three years. So we have to give them tangible benefits that get us over that bridge. I think we're going to do it. I'm feeling pretty optimistic about it,

but your right to bring it up and you're right to be concerned about it. We cannot take it for granted. Yeah, the, I mean, this just goes back. I think it's entirely fair that individuals, you know, if you say, I'm going to put an AI factory in your backyard, okay, is it going to create jobs briefly,

and then, you know, some maintenance. I think it's totally fair for people to not want it in their backyard because there's some, they perceive some risk and there's no direct benefits because they can just get AI anywhere, right? It doesn't matter where the data centers. But there's a solution.

How are you thinking about adoption curves? It feels like part of the reason that we've had these kind of like rolling corrections is that technology gets adopted really quickly. People assume that it's just a straight line forever, but then there's a new capability, a new technology, and it feels like stuff is just breaking through like instantly. Where have you like are you adopting new frameworks internally to try to

understand how quickly new products can get to market. Obviously enterprise is is different, but it feels like the line between consumer and enterprise, at least in, you know, coding has never been more blurred. For sure. I mean, listen, I think about when I got into the game guys, 1999, 2000, and we had about 35 million people connected to broadband internet, right? We all saw what Amazon was going to be, but where we got over our skis, right, is we thought it would come a lot faster and we forgot that there were only 35 million people connected to broadband internet. Today we have four billion, three, four billion.

Like the rate of diffusion and the magnitude of diffusion is radically, radically different. And think about this. We have a natural constraint on how fast. we can go because we only have so many memory wafers in the world. We only have so many logic wafers in the world. We only have so much powered shell in the world. That means we can only produce so many tokens. Okay. And it's almost as though in 1999, 2000, we could only lay so much fiber. I've said this a thousand times. When we were putting down the fiber in 2000, we called it dark fiber for a reason. There was nobody using it, and we knew there was nobody using it when

we put it in the ground. There's not a dark GPU in the world today. Yeah. Okay. There's not a dark token in the world today. So I think it's a very different thing. I think it's a healthy thing. We have this wall of worry. We can't build that much supply. And I would say if I look at every company, what did they report on their earnings calls? Google was token constrained. They said if we had more tokens, we'd be able to generate more revenue. Same for Amazon. Same for Microsoft. Same from open AI, same from Anthropic. The world demands more intelligence. Intelligence can only be produced with tokens, and we have physical limits to the amount of tokens we're going to be able to bring online. So yes, we will have these waves, but I think the rate, the parabolic rate at which these new

models are going to produce intelligence, I think we're going to be blown away over the course the next nine months. You talk independently to Michael Truel and the guys at Cursor and now, you know, taken over X.com.A.I. or you talk to the guys that Anthropic or Open AI, and they kind of look you in the eyes with that Oppenheimer look, and they're like, we're here. Yeah. Right. Like, we are going to, think about this.

Open AI and Anthropic combined to start the year, had three gigawatts of compute. Three combined. They're going to end the year closer to 10 and end next year closer to 20. Yeah. We're making algorithmic improvements. We're making massive steps up the scaling law because the amount of compute we're going to have available to us. Think about, you know, macro hard and macro harder that cursor is going to now be able to train a frontier level model on.

So we've got incredible competition in America. We've got the right amount of compute coming along. I don't worry about the bubble as much, even though I know that, you know, there will invariably be, you know, some months that revenue doesn't grow as fast. I'm really worried about making sure that America stays foot on the accelerator, competing globally and winning the AI race like this is going to lead. to a moment of abundance for our economy. And it's only through great national wealth that we can raise the floor for everybody else. Yeah, no, that makes sense.

There was some reporting this week that META is hiring FTEs. I was sort of surprised to see them going into the enterprise because it feels like they have every advantage on, you know, consumer. They have the billions of users. They have, you know, exciting hardware. All these things.

How much did you, was that surprising to you at all? Do you expect more companies that weren't traditionally, you know, enterprise focus to say, hey, there's tens, maybe hundreds of billions of dollars of revenue here. We should be in this market. I mean, the second you start spending $100 billion on CAPEX annually, okay, you run into the AWS problem. What's the AWS problem? Now I have all this compute, but I don't use it every day equally.

Yep. Right. Jeff built AWS because he said, I have to build my capacity for Christmas Day or, you know, Black Friday. Yeah. Black Friday. But he's like the rest of the year, half of that stuff sitting idle. It's expensive as hell.

So I may as well rent it to everybody else, right? Turned into, you know, a blockbuster business, but it made his core business better because he could, he could build to Black Friday, right? And nobody else could because they didn't have AWS. So that's why Elon has launched EWS, right? Elon Web Services, you know, with his compute and, you know, signed up a big first customer with Anthropic. Listen, nobody on Earth is better at turning electrons into tokens than Elon, right?

So expect a lot more data centers out of Elon, expect them on Earth and eventually in space. And I think that changed the whole tenor of the SpaceX IPO, both the cursor deal and the Anthropic deal. I think that went from, you know, people being slightly concerned about it to people being quite excited about. I'm happy to, you know, to unpack that. So I think that for meta, if they're going to be in the game of spending that much money, listen, Susan Lee is, you know, incredible over there as the CFO. And I'm sure they're looking at the strategic plan.

And Mark is saying, I want to build even more because that guy is never going to give up the race, right? To frontier level AI, none of these guys want to give up that race. And so they just have to figure out ways to monetize everything that they're building. Do I worry as a shareholder at some level? That's, you know, that's hard. That's hard to take a business. It's been 120% consumer and say, okay, now we're going to be in the business of AWS and maybe even in the business of enterprise level agents.

I think it is hard. I think they're up for the call. And remember, you suggested the merger between, you know, product-led growth, these coding agents kind of feel like consumer adoption. Yeah. So there's a lot of shared consumer DNA with what's going on in the enterprise today. So they may surprise them, folks. And Mel does have links into like hundreds of thousands of businesses through the ads platform.

So it's not like they don't have any relationship to businesses. They do. One more that I was curious to get your thoughts on. Kirkland and Ellis is talking about investing half a billion dollars into their own software to help run their firm. A lot of people pushing back on that. Historically, you take a firm that doesn't have strong. you know, software competency and they spend, you know, hundreds of millions of dollars on their own software, there's a lot of examples where that hasn't gone well. Yet at the same time,

software, making software today is wildly different. And it's very possible that things are changing, especially if you can get the right partners around. And I know they have some great partners. Do you expect more companies of that scale services, businesses, to want to try to own as much of the stack as possible and not be reliant on, you know, the Harvys or the Ligora's of the world. I mean, what else are they going to do? I mean, it's kind of like, what else are you going to announce? Oh, just we give up? And like, they got to do something. The competition is coming straight at them. I don't think it's a high probability bet personally. Like, if I was a partner Kirkland and Ellis, and somebody pitched me on that, I'd say, I'm not sure that's the highest

and best outcome here. So what is an alternative outcome? Well, a good friend. you know, Josh Kushner, what he's doing at Thrive Holdings, right? Where he's buying accounting companies. And now I have somebody who's just like deep in the weeds recruiting the best engineers in the world, deep partnership with OpenAI. I saw Greg Brockman retweet the great, the work that they're benefiting all these accounting firms, like they're driving just huge productivity gains in these accounting firms. So it seems to me that that's a more likely outcome, you know, a Thrive Holdings buying a Kirkland

and Ellis and saying now we're going to, you know, take. this thing and AI turbocharge. And I think you're going to see a lot of that out of private equity firms out of firms like Thrive Holdings. I think you're going to see take privates where people do that on an individual company basis. But am I confident that software has gotten so easy that a law firm that gets up every day and thinks about writing legal briefs is all of a sudden going to write killer legal software to compete with Open AI and Anthropic? I think that's unlikely. That's hard. What is your thinking around the series A, B, C, these earlier growth rounds, feels like a lot of investors are just kind of frozen.

You know, you were talking earlier about not necessarily frozen in terms of their activity. They're doing a lot of deals, but they maybe don't have as much confidence knowing what will get steamroll in the future. you were talking about being in the token flow. Is that like where you feel comfortable deploying at this early stage where you're betting on a 10-year outcome? Yeah, I mean, listen, I think we all have to have the humility in these moments to know that looking out 10 years is almost impossible. Looking out 10 months is pretty damn hard. But I would say if you just looked across our portfolio and I think Altimiter is performing better than it has any time in its 18-year history, you know, our early stage, team.

I think it's doing an awesome, you know, awesome work on the early stage side. But if you look at the type of stuff that we're investing in, it is in the token flow, right? We're building to those compute shortages. You know, we had the Cerebris IPO, you know, last week. We had been in that for nine years. You know, investors, you know, GROC, so we're looking at a lot of other semiconductor-type businesses. We're looking at a lot of compute data center type businesses.

And, you know, you just had, you know, your prior guest, you guys were talking about all the stuff you're doing in military modernization and the stuff that's adjacent to AI, but benefiting from AI, we're doing a bunch of stuff there in modernization of the military. So I think you find places that are either in the token flow or benefiting from the token flow. And then I would say in growth, like we're just not doing a lot in what I would call inflection stage growth. this is the companies at 5, 10, 15 billion. You know, we've really made massive bets, the biggest bets in the history of Altimeter between Open AI and Anthropic, which, you know, is consuming billions of billions of dollars.

And so we think they are the principal beneficiaries. And then on the public side, for three years now, we basically had 100% of the portfolio in AI and compute. And, you know, as I sit here today, even though it's come up a lot, you know, Hynix is still trading at a single-digit multiple and Mike Brown's trading a single-digit multiple.

and Mike Brown's trading a single digit multiple and Nvidia's trading at 13 times and you say how is that even possible? Nvidia's up 15X like better than a venture market return over three years like like think about that like all the venture returns have been had in the public markets by the way guys.

But the earnings have come. But their multiples have come down. Yeah, because the earnings have come. Their multiples have actually come down. This is the cheapest multiple Invidia has traded at in a decade right now. It's crazy. Okay.

And by the way, I think their growth is going to continue to sustain, they're now taking 50% of their free cash flow and returning it by way of dividend or buying back stock. I would encourage Jensen to do 70 or 75%. I think if he does that, by the way, a prediction. You know, look who invested in Apple. The second they bought back, or the second they committed to 75% of their free cash flow returning to investors, Warren Buffett. Yeah. One of the greatest investment returns in history, right? And so once you make that cross that threshold. And I think this, you know, they're running that business incredibly well. So the public markets, we've had, you know, basically 100% AI and compute. We're basically there, you know, today.

So I think it is harder. If you're a Series B or Series C company, think about what we used to do in software. If it's Series A, you had a couple million in revenue and then Series B, I don't know, you had 20 million in revenue. Shit, you would have a line out the door, people who wanted to do that deal. You wouldn't have a single taker today. Not a single take. You mentioned something I think that resonates with everyone. It's very hard to predict what's going to happen in 10 years. Obviously, your job is to, you know, look at individual trends and names. But I want to know about the Trump accounts, and I want to know about investing for the next generation for children.

Advice. Also, get me up to speed on the program. What's rolling out? What's the progress? But then what is advice to parents in an uncertain time where setting their children up for success? is maybe more critical than ever? Well, the update is that after four years of working on this and, you know, getting it passed into law last July 4th, the Invest America Act as part of the big beautiful bill, you know, it's set to launch and be funded on this July 4th.

But we launched the app, guys, yesterday. So you can download the app every single family. You should tell every family you know who has a kid. Yep. They should download the app for their kids, get their kids signed up. There are 35 million kids in America under the age of 10, okay, who get at least 250 bucks. Yeah. So if you're basically born after January 1st, 20 to 25, so I think about like under two, you get $1,000 in the S&P 500.

Yeah. If you're between 2 and 10, you get 250 bucks. Most of those kids will get $250 from Michael and Susan Dell. If you live in Indiana, you'll get an extra 250 from me. If you live in Connecticut, you'll get an extra 250 from Ray Dalio. live in Oklahoma, you'll get $250 from the state of Oklahoma. Okay. And that's just for starters. We have thousands and thousands of companies. There's a lot of billionaires in states that you didn't name. Let's start to get a little of this. They've heard from you. I'm sure if they haven't

heard from you, they're going to. It's coming. And by the way, the generosity, this is the giving pledge 2.0. Yeah. We have trillions and trillions of dollars that are going to change hands in this country. There's the single most efficient way for somebody like me to fund the next generation. A hundred cents on the dollar goes to the kid. It compounds for 18 years for their lifetime. It makes them a capitalist and owner. We know they're more likely to graduate from high school and college, more likely to start a business, more likely to buy a home. The societal ROI on this is off the chart. So we launched it yesterday. Get a rip of this, man. It is now the number three app in the United States. The number three app. We just passed Google. We're only behind

chat GPT and Claude. It's incredible. You're coming for your kids. I love the app store charts. It's in all three of the top app store apps right now. Total Gerster. Total Gerster victory. It's a total Gerster victory. Well, I would say, you know, kudos to Vlad and the guys at Robin Hood and B&Y and Joe Gabia at the National Design Studio.

And frankly, the whole team at the Treasury Department led by Luke Petit and the Treasury Secretary, this is the way government should be done. A citizen had an idea. He was able to go to Washington and actually get a law passed. And then we put together a SWAT team of people who are experienced building these things to build them. And then the consumers, i.e. the citizens of America who pay for this shit, said, hey, we love that thing and bid it up on the app store. So we have a lot of people downloading the apps. There are a lot of improvements coming. So be patient with us.

But download the app. Get your kid on the path to compounding. on July 4th guys, the money turns on. So every parent's going to see that their kid owns a little Nvidia, a little Microsoft, a little Walmart, right? Their little slice of all the top 500 companies in America. And on July 6, I hope we have a joint bell ringing of the New York Stock Exchange and the NASDAQ from the Oval Office to really signify the start of the trading of these accounts.

Of course, parents that don't have to know anything about investing. It all goes into the S&P 500. Yeah. Okay. But I'm cajoling some of our friends. You would know their names. I think it would be amazing if we had some of our friends, gift a share of the most amazing companies in America.

You know, the Facebooks, the SpaceXes, the Open AIs. How about if they all gave just a share of those companies to every kid in America? Yeah, it'd be incredible. We are going to change and reorient how the 70% of people who have felt left out and left behind, they are not owners of capital, okay? We need to get them on the compound. journey. They need to feel like they're on Team America. They're in the game. This does that for every child. This is not a 529 account for the top 10% of Americans who can afford to save. This is for

everybody. And it's so gratifying. I was in Durham last Friday. I adopted a school. There are 700 kids, $250 to every one of the kids. Now, a lot of people say, well, how did you do that? Well, it's $250 times 700 kids. They made a Google spreadsheet. They got them all signed up. I give the principal. $150,000 and she QR codes the money and teach you the accounts. Everybody in America can adopt a school. Raise a little bit of money. Go to your principal and say, we want to juice up these accounts for all the kids, get all the kids signed up.

And the teachers there, this was at school that 75% black and Latino serving the rural poor in Durham, the level of excitement. A mom came up to me crying. I never thought my kids would own anything. The teacher is so excited to teach the kids about what it means to, to own something. You know, I grew up in rural Indiana, and we had zero. And as I said to the president, when you're at zero, it's a despondent place to be.

You don't know how to get to one. The hardest move in the world is going from zero to one. One to two is easier and two to three is easier yet. We're going to get all of these kids from zero to one on this compounding journey. If you start with a thousand box and you save $50 a month, it's $50,000 at age 18. there's no reason we can't put every kid in America on that journey. And to celebrate our second 250 years, right? We're launching a natural, you know, we're going to launch us as a dividend for every kid in America.

So I want to make sure that they all sign up, starting in 2027, the 3.7 million kids born in 2027, it will be automatic. Get your social security number. You get a Trump account. And then we just need to get every small, we're giving money to the, we have $8,000. 80 kids, you know, to our, you know, roughly 35 employees, they're all going to get 500 bucks at the end of the year into their Trump accounts. I'm just going to QR the money by my team into their accounts. You guys should do it for all the companies you're involved in. Yeah. That's great. And really spread the word, small, medium, large business,

realtors, restaurants, everybody can do this. And so we've created an open source platform of universal private ownership where the families have the title and they're have the dignity, the dignity of savings. A 401K for life for every single American citizen, I think it's a game changer for the country. Yeah. You did it. You did it.

You fucking did it. You fucking. No, I remember you, you're talking about this. And, you know, as much as respect as I have for you, I put it in the, in the, it's too hard bucket, you know? I put it in the, like, this is a thing that is just too hard for anyone. even the best. And fortunately it was not, which is fantastic to see. It's the ultimate white pill. So thank you. That's amazing. It's a, you know, it's still day one, but, you know, we're off

a good start here. And, you know, I think in the fullness of time, as the president said, we estimate over 15 years it could transfer three to four trillion dollars of wealth from people who have it to the people who would otherwise have zero. Yeah. And, you know, the president has said he thinks it's going to be his biggest legacy. To me, I think it'll be more impactful in the fullness of time than Social Security. Because the difference is you actually own this. You actually own.

It's not a government program. Yeah. This is a private account and private ownership that can compel for your life. And you have to imagine that, you know, if you get to that place where, you know, there's a whole new generation that's, you know, becoming an adult,

starting a family with $50, $100,000, $200,000. That's a down payment on a house, all of a sudden that can underwrite more building of houses because there's more buyers in the market. There's a whole bunch of market forces that I think will knock on from this in 20 years that could be incredibly positive. So I'm extremely excited about it. Indeed. No doubt about it. It's a, you know, you're going to hear a lot of us over the course of the next several months. But it's, you know, listen, I also should mention, I've got the best partner in the world on this. You know, Michael Dell, join me. He and Susan join me on

on this journey really helped me over to get it over the last one inch line with the administration and then made the biggest philanthropic gift in history 6.25 billion. $250 to 25 million kids. And, you know, frankly, I think for Michael and Susan, they're just getting started. And I think their example that they've set for everybody else, you know, if you have, if you, you know, you guys look at the amount of wealth

that's being created here in Silicon Valley. I mean, it's really, there is no historical precedent. There is no historical precedent. And the fact of the matter, our charities are not prepared or equipped to take $10, $20, $50 billion. And a lot of people want to give away this money during their lifetime or, you know, within 10 years of dying. And target it to. Right. And in a way that there's no way.

And scales up or down. It's like you can do the whole state. Exactly. You can do your county, you could do school. Yeah. And there's not 30% overhead on the charity where somebody's getting paid $10 million and, you know, all this stuff happens after you pass away. A hundred percent of it goes directly to the kid. Yeah.

Charity was so vague for so long. It was like, great. Okay, you gave away half your money, but you're actually not transferring until you die. And then it's going to go into this charity that we'll deploy it later. It gets so abstract that I think people, all of those big donations that happened in like the previous era, sort of, fell on deaf ears and they weren't, didn't feel like they were moving the needle. And so this is just an entirely new way to do it. I love it. The chat is asking if you have any surf trips planned. Wow. Wow. I must be checking out my, my Twitter picture, which by the way was at the surf

ranch with Romando. And the picture actually, some people think it's me. It's not me. That was my then 11-year-old son getting barreled at the surf ranch because Romando was like telling him how to get into the barrel. That's awesome. But I have to say I'm 55 guys. I just had a birthday. I'm working a happy birthday. I'm working hard. I feel like I just can't imagine you being like yeah, now's a good time to take a surf trip. I feel like maybe a trip to surf ranch, but you got to stay locked in. There's a lot of work. We ought to get together and do that. By the way, I'm currently signing up somebody who's going to adopt all the kids in Los Angeles. We've got San Francisco our covered. We've got Oakland already covered.

That's great. And we're going to announce some big things here in the state of California. I'm not giving up on California. Right? We're going to defeat. We're going to defeat the unconstitutional taking tax that some people call the wealth tax or the billionaire tax. Like this attack on success, you know, trying to divide wedges, drive wedges between Americans. We're uniting people with the Trump accounts, with the invest America accounts. We're raising the floor and getting everybody into the game. And this whole idea that we're going to demonize success and drive Elon out of the state, et cetera. Shout out, by the way, to my junior son, Lincoln Gersner, who published his first paper this

week, and I show up at home, and it's on the economic impact of tax policy in California. I show up at home, and he said, hey, dad, I finally, you know, posted that paper I was writing. He's doing it with Josh Rowe, the incredible professor over at Stanford. And then he says to me, he's like, has Mark Andreessen ever? retweeted you? I said, no, I don't think so. And he goes, I think he retweeted me. And I was like, no, he definitely didn't retweet you, but Mark did.

So shout out to my. That's awesome. And that's, you know, I think that we are, what people, there's a lot of despondency in California. Yeah. I'm going to take a contrarian position here. Spencer Pratt's going to be the new mayor of Los Angeles. The wealth tax will be defeated.

we will pass the retirement and personal asset protection act as a referendum in California, which will prohibit people from stealing your retirement money or your personal assets. That will get passed. That will send a shocking message to the rest of America. The rest of America thinks that California is as blue as it gets. It turns out California is pretty purple, right? And I think that common sense initiatives are going to, you know, reassert themselves in, you know, in the election in November.

And I think it's great because we're the fourth largest economy in the world. I know some of my friends moved out and said, listen, California's got it coming to them. My own view is this. As California goes, so goes the country. We cannot seed California. It is where we're going to battle for the best ideas that are consistent with the founding of the country. And we're going to, you know, win on those ideas.

And so I think we're seeing a lot of progress. Shout out to Sergey and building better California in the incredible work that they did to get us moving in the right direction. It's fantastic. Well, great stuff. It kept you way too long. Thank you so much. Thank you so much. And excited for your next project. Yeah. How much did you sell this for? How much did you sell this for? Let's go for it. Let's go for a serve. Yeah, we can only say it far away from the microphone. I'm going to turn this into a little BG2 and turn the tables on you guys. I need to get some more some more the other way.

Great to see. Have a great weekend. Great to see, Brad. Thank you. We'll see you. We'll see you. We'll see you. Good. years. Go by. What a performance. I'm so excited by those accounts. I really can't. Oh, it's so cool.

Being able to scale it up or down. Yeah. Just go, hey, everybody at the, where you went to elementary school, you know? This was how I first saved money. I had a physical safety deposit box at a bank. Every time I'd get paid, I'd go take out a couple hundred dollars in cash,

put it in the safety deposit box. Couldn't really access it on the weekend when people were, oh, you want to go spend money, you want to go to the bar, save the money, watch it physically grow. This is kind of a similar example because you'll put money in, but you won't be able to pull it out

until you're 18, so it'll just compound and compound and compound. Brad Hunt, ask John about his new basketball. Is the car here? We have the basketball. Nick, can you go get the basketball that's in my driver's seat or in the passenger seat? Because we were at Laurel Supply yesterday, which makes Air One look like a 7-Ele.

It makes it makes. makes air one look like a seven. No, I, so above. No. No, moral supply is, uh, is the new air wand in, in L.A. Yeah. That is not. It's very nice.

Not an actual air one. Food was good. Everything is a one to one copy of air one. They didn't, they did not, they did not, it's like, it's disorienting. They did not try to differentiate a single thing. Yeah. They copied every item on the menu. They copied every, delicious food.

Every, every single item. In my culture, that's very offensive. because if you're going to go through the process of creation and investing. Yeah, you'd think it would be able to do something differently. Okay, but outside of Laurel Supply, I receive from, I get stopped by a person who I believe is in the chat. And he says, here's a basketball. I got this for you because he's raising money for a company, Punter, and it says, invest in the future of sports, punter.us slash invest.

and he had this basketball with a QR code on here. What a unique way to draw attention to your company. What a unique way to pitch someone. And you know we love a basketball in the studio. We do. We use a soft one because there's a lot of camera gear so we don't throw a full-size basketball. We use a foam one.

But thank you to the punter team for making this possible. Very interesting drop. Very fun way. And what a great, what a great, What a great way to end to the show. We had an NBA star on the show, and we finished with the basketball. That's right. Anyway, have a great weekend.

We'll see you on Monday. Have an incredible weekend. Have an incredible weekend. Leave us five stars on Apple Podcasts and Spotify. Sign up for a newsletter at TBPN.com. We will see you on Monday. Goodbye.