TBPN Live - Disney’s $1B OpenAI Bet, GPT 5.2 Reactions, Saagar Enjeti Weighs In | Matt Levine, Mike Swan, Mike Gallagher

Episode Date: December 12, 2025

(02:12) - Disney’s $1B OpenAI Bet (26:57) - GPT 5.2 Reactions (40:53) - 𝕏 Timeline Reactions (58:46) - Mike Swan, owner and managing broker of Swan Land Company, specializes in ranch, farm, and recreational land sales across the Rocky Mountain West. In the conversation, he discusses the enduring appeal of land investments in the western United States, noting a slowdown in 2025 due to strong financial markets but anticipating renewed interest in early 2026. He highlights the premium value of properties with quality water features, the influx of tech industry professionals into Montana seeking safety and lifestyle benefits, and the challenges of generating significant returns from agricultural operations alone, emphasizing the importance of long-term appreciation and conservation-minded ownership. (01:24:40) - Matt Levine is a Bloomberg Opinion columnist and author of the daily newsletter "Money Stuff." In the conversation, he discusses his transition from working at Goldman Sachs to becoming a journalist, the evolution and challenges of prediction markets, and the potential implications of insider trading within these markets. He also touches on topics such as the possible SpaceX IPO, the OpenAI-Disney deal, and the growth of private credit in the tech industry. (01:57:58) - Mike Gallagher, Head of Defense at Palantir Technologies and former U.S. Congressman, discusses the critical need for the U.S. to expand its naval fleet to deter potential threats, particularly from China, emphasizing the importance of increasing ship production to meet geopolitical challenges. He highlights the Navy's partnership with Palantir to implement the Shipbuilding Operating System (ShipOS), a $448 million initiative aimed at modernizing shipbuilding through artificial intelligence and autonomy technologies, thereby streamlining production and enhancing efficiency. Gallagher also addresses the role of autonomous vessels and the significance of international collaborations in strengthening maritime security. (02:17:28) - Saagar Enjeti is a political commentator, journalist, and podcaster best known as the co-host of Breaking Points alongside Krystal Ball. Previously the host of Rising at The Hill, he built a large following for his populist-leaning, anti-establishment analysis across foreign policy, economics, and U.S. politics. He is a graduate of George Washington University and the University of Texas’ LBJ School, and he has written on national security and international affairs for several outlets. Enjeti is widely recognized for his clear, independent commentary that resists traditional left–right alignment. (03:02:30) - 𝕏 Timeline Reactions TBPN.com is made possible by: Ramp - https://ramp.comFigma - https://figma.comVanta - https://vanta.comLinear - https://linear.appEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comAttio - https://attio.com/tbpnFin - https://fin.ai/tbpnGraphite - https://graphite.devRestream - https://restream.ioProfound - https://tryprofound.comJulius AI - https://julius.aiturbopuffer - https://turbopuffer.comPolymarket - https://polymarket.com/fal - https://fal.aiPrivy - https://www.privy.ioCognition - https://cognition.aiGemini - https://gemini.google.comFollow 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 TBPN. Today is Friday, December 12th, 2025. Just 13 days till Christmas. We're live from the TBPN Ultradome, the Temple of Technology. The Fortress of Finance. The capital of capital. Ramp.com, baby. Time is money, save both.

Easy-use corporate cards, bill payments, accounting, and a whole lot more. All in one place. That's right. Death Star post. Now it makes sense. It all makes sense. It all makes sense. It wasn't a vague post.

It was a preview of a deal that would take shape four months later, right? That's what was happening. Sam Hallman, of course, what was this, on GPT-5 Day, August 6th, he posted a picture of the Death Star Rising on the horizon, a very confusing post at the time. Now we understand. Now we get it. He was saying, hey, one day, we're going to have rights to Star Wars properties through this deal with this. Darth, Samma.

People did not like this post at the time. Nikita is in there saying, you should delete this. Just delete it. There's time to delete this. And the timing was really funny. It implied that they were about to release something so all-powerful.

Yeah, it was easy to read it that way. You could also read it as like maybe they're going on the offensive against the Death Star, the Empire, which is Google. They're going to attack Google. There were a number of different ways to read into it, but it was. It felt confusing. It was confusing, and then it, and then it was, I feel like people were somewhat let down. Yeah. Right, by GPD-5. Yeah, people were expecting something remarkably qualitatively different. That's not what people got. And so the end result

was, you know, people just remaining confused. We had a bunch of different takes on it. We think it makes sense now. But now, you know, it's even more clear with the Disney deal. But you wrote about the Disney deal. You dug into the deal. and you kind of crystallized your take, so take me through it. Yeah, so some of the stuff I talked about yesterday, but I wrote about it for the newsletter today, tbPN.com. I wrote 127 days. That's the gap between Sam's to Star Wars Death Star Vague Post

and yesterday's announcement that Disney is investing $1 billion into Open AI and giving them a three-year license that allows users to generate AI, photos, and videos of the most popular 200 Disney characters. Most notably, Open AI is guaranteed a one-year exclusive on the IP, and while the posts in the deal are probably not connected, I think it's funny to imagine that they are. Right before the deal was announced, Disney sent Google a cease and desist letter

claiming Google had been violating Disney's intellectual property by allowing users to generate a variety of Disney characters. Many people outside tech seem shocked that Disney would license their IP in the first place, given their history of ruthlessly protecting it. There's a number of examples of Disney coming after kids' birthday parties, or at least that's how they positioned it. Of course, these are businesses

that are using, effectively using Disney characters to monetize. I read your draft and I was like, wait, they sued a child for having a Disney theme birthday party. There's two notable examples. One is coming after basically a birthday party service. Company, like a business that sells, we will do your birthday party, and then they were selling, and it'll be a princess theme. Well, so what they, it wouldn't, they wouldn't directly call the characters that you could like rent the same names.

It wasn't like Elsa. Okay. But it was clear. In the reviews, what Disney noted, in the reviews, people would call the characters by the Disney name, and so that was one of their proof points. And then there was also a story of a father who, like, wanted to do a Spider-Man tombstone for his, like, very young son that passed.

And I think it was the, um, effectively got blocked. It wasn't necessarily directly by Disney. But anyways, Disney has longstanding policy of, of not, other people. Such a PR nightmare. If your legal team comes to you and says, like, we want to sue a dead person, like, tell them, like, me back off. It was just like, it wasn't a lawsuit. Or maybe it was a tombstone company. They were just saying, like, no, you can't make a Spider-Man. Sure, sure, sure. Anyways, many people outside of tech seem shocked that Disney would license their IP, but Bob Eiger knows that AI generated Disney will happen with or without the company's

blessing. So partnering with Open AI today while setting up negotiations with Google and other players makes a lot of sense. Again, I just expect this, like, cease and desist is the start of a negotiation process in order to get the same type of IP and capability ultimately into Gemini. But in 2027, not. Yeah, well, and maybe not, right? Like, one question I have is they have a one-year exclusive after that period. Does Disney say, okay, you can keep having the exclusive, but you need to pay us, like, a billion dollars a year? And at least Google's at the table, negotiated. Is that what you mean? Exactly. So the strategic significance of the steel for open AI has been broadly underappreciated, mainly because for a company that frequently talks in the trillions,

Disney's investment of Paltry $1 billion just isn't enough to turn heads. But the advantage this deal gives Open AI from a product and distribution standpoint is extremely significant. Per the most recent reports, Open AI has 20 to 30 million paid users out of a total of 900 million globally. Disney, on the other hand, had 140 million people visit Disney parks in the last year and 128 million paid subscribers to Disney Plus. If you're an adult, spending thousands of dollars to take your kids to Disneyland or a Disney plus subscriber, surely you'll pay an incremental amount to open AI to extend and personalize your Disney experience.

As a parent, some of the most magical moments with AI that I've had her simply generally, I've talked about this before, I take a real photo of me and my son, and I turn a generic design source. Dinosaur mode. It really brings us both a lot of joy. It's like, it's his reaction to the picture

that I'm getting joy from because he just like absolutely loves it. I had a similar experience where I would take a picture of, like, you know, we'd create a scene of toys and then we'd say, like, make these Lego versions of this or something. But the models got so good at a certain point that I was just like, okay, like, I just, I made his toys look like toys and it just looks exactly like what I made. I was like, I just take a photo. I need, like, more creativity to come up with something remarkable. Yeah. So anyways, I think people, my household is not into the Disney world yet.

I think the kids are just young. Yeah. But I can imagine how excited if you're a frozen super fan, an event you're a super fan, being able to put yourself, your kids, into their world, I think is going to be pretty exciting. So having a license to generate high-quality images and videos of 200 of these characters creates a temporary but very real differentiation for tons of current and future trap GPT users. It creates a real catalyst to pay, right? Like, my kids want more outputs.

I'm assuming you'll get a handful for free, and then you'll have to upgrade. and it creates, and it's just going to be super viral, right? These videos are going to be going into family group chats, they're going to be shared online. I think it's hard to imagine another studio Ghibli moment in the way that that happened, but you can imagine that this will be getting a lot of attention. Knowing Sam and Josh, they've likely negotiated to get SORA chat chbtee,

brought exposure across Disney properties, both online and offline. And we already know that select SORA videos will be featured in Disney Plus. I think they're going to be taking, really making sure they're hand selecting those because... I wonder what that means.

I wonder if that means the Apple TV app or the Disney Plus app on the phone because on an iPad, on a phone, it feels a little bit more natural. But, I mean, just in terms of the Star Wars property, like there's... There are the original Star Wars films, and then there's Young Jedi Adventures,

which is Star Wars for kids. You know, there's even less violence. G rated than a PG-13 rated. Even with Bluey, very popular children's show on Disney, on Disney Plus, there are full episodes that are like a full episode

might be, I want to say like eight minutes long, but then there's mini-sodes that are even shorter. So like the short form of vacation is happening within the Disney app already, but I think a lot of parents would have a sort of negative reaction to just a feed.

A feed. Yeah, an endless scrolling feed of short form, SORA content, that's going to be really tricky. It needs to be some, it needs a twist, it needs curation. They said that there's already going to be curation, but I wonder how that's going to roll out. Curation, but it could still very well be infinite. Yeah, well, it doesn't need to be infinite. Well, I just imagine it could be every way. Like you could have, like, you could truly have like a monthly contest.

Everyone prompts to create the most incredible SORA videos with Disney IP. And allow the kids to bet on the winner. Yeah, they definitely have to gamble on it for sure. That's a done deal. But you could essentially have like a film festival that's running and kids submit their generations and then those get highlighted. A film festival of seven second videos. I'm sure Hollywood will love that. Back in the Vine Days, like the, the,

the creative skill ceiling was incredible. People were doing remarkable, remarkable things with that technology, that short-form video. They would loop and do all sorts of stuff. I still believe that there's some really interesting things that you can do with generative systems, with generative AI. And I imagine that we will see some cool stuff

come out of the Disney partnership. But I don't know that I'd want a kid sitting there watching endless slop. Like, that seems rough. But, I mean, at the same time, a lot of parents are like, yeah, actually, that's great. Because there are parents out there who are like, no, I'm actually just in the market for something that will keep their attention.

Today. Right now, I want them to stop trying now. I need five minutes to do this thing. Or I just need a babysitter. Anyway, I finish it out by saying my long-held assumption is that over time, everyday consumers won't pay for LLMs. There will be great ad and commerce supported LMs that provide the monetization to serve great models. But Open AI's challenge is that even with future Hall of Famers like Fiji CMO and Denise Dresser, board. Denise is, of course, the former CEO of Slack, who's now the CRO at OpenAI. They can't

massively scale monetization of the free product overnight. They can't just say, hey, chat, GBT, agent, creative, massive ad platform. Don't make mistakes. And I said, I don't expect those business lines to really begin ramping until the second half of next year, and they need to show continued revenue growth now. Hard to think of a better time for this deal to get done than 11 days into OpenAI's Code Red, and right as Sora was about to fall out of the app stores top 25. I looked earlier this week. They were sitting at around 24. And again, as this new IP actually rolls out to users, I expect it to go right up back to number one. I said, will the functionality be immediately abused? Yes. Will it create uncomfortable moments for

Disney's leadership? Yes. Is it a smart move for Disney? Yes. Will Open AI have to shell out billions to maintain exclusive access over the long run? Yes. Will it be worth it? Okay, so first, I want to tell you about Julius AI, the AI data analyst that works for you, join millions who use Julius to connect their data, ask questions, and get insights in seconds. Second, I want to debate you on this idea that it will be abused immediately. I think it's actually really, really hard to abuse these systems. Like, there was the whole, the first Gemini model where people would say make a soldier from the 1940s and it would be a Nazi, but it would be a black Nazi,

and so that people were very upset about that because it just made no sense. But I think that the models and the more importantly, like the reasoning chains that happen, like it's very clear that when you go to Nanobanana Pro and you say, you know, take this image and make it Christmassy, it's unpacking that

using Gemini as an LLM first and it's hydrating it into something that's actually reasoning about what you asked, even if you just say Christmas mode, Studio Ghibli mode, you know, like you give it two words and it actually is clearly hydrating it to a much broader degree. And I think that that reasoning step happens before. And I also think it happens after so that even if it accidentally generates Mickey Mouse or, you know, someone doing something that they shouldn't be, Mickey Mouse holding a gun or something, then it will detect

that and actually turn that off. Like it's been very hard. The whole like, oh, oh, jail break it. I got it to say something crazy. Like that's like, it's just like, it seems like a thing of past. I just trust that the internet immediately will figure out if you have hundreds and millions of people trying to jail break it, they will pull it off. The other thing that will happen is people using different models that are like already don't have the same guard rail and making it look like their sore outputs even though they're insane. Oh, totally, totally. I'm just saying like open source model that's completely unrestricted, you do something crazy and then you throw the solar a watermark on it just to take a shot at Sam and Bob and Sam. What do you think, Tyler?

Yeah, I was, I was going to agree with Shorty. Like, I think, hey, what's this? What's this? Oh, yeah, I've just been, you know, I got a double jaw surgery. And a little bone smashing. I've been bone smashing a bit, yeah, just trying to get my looks like. You're looking fantastic. This is remarkable. I really, I really care. Hats off to the production team. This is a, this is a fantastic new feature to, to allow Tyler to look like the absolute. Look like how I do. day. Yes, how you do every day. Shish. I love it. Yo. Chad's loving it. Okay, but I was going to say, like, yeah, day one, there's going to be people on X that, like, easily jail break it. I can't. I can't take you seriously. Just look at us. And then they're just going to post it, and then it's

going to go super viral, and then you'll have parents. Chad ID. Now it says chat podcast. I love it. Banta, automate compliance and security, AI that powers everything. from evidence collection and continuous monitoring to security reviews and vendor risk. Okay, tell me your actual take. Okay, yeah, so I think, like, day one... Oh, he's back to me. Oh, what, what happened?

Day one... There we go. There we go. Okay, day one, you have people who jail break it, even if it's like one person, then it goes super viral next, and then it's like, oh, Mickey Mouse, like shooting a gun,

and then it goes viral, parents see it, and they're like, okay, my kids. aren't going to be on this because even if it's like mostly like you're going to have a ton of backlash where it goes super viral on CBS news or whatever. No, I don't buy that.

I think I think it will be very magical and I think that they'll immediately be getting shared in family group chats and you know, between friends and I think we're maybe underestimate the adult Disney

audience as well. I could go two ways. Adult Disney. Okay. easy, John. Yeah, it is notable adult mode and the functionality are running out around the same time. But the Pikachu getting barbecued, is that a violation? Is that something that they'd want to stop? If you're Bob Eiger and someone shows you that Pikachu getting barbecued video, would you say, no, no, no, I don't want any videos out there of Mickey Mouse getting barbecued? What do you think? Do you think that crosses the line?

I think Disney execs if they saw that in a pre-IPO world would send a season to CISS What do you mean pre-IPO? Sorry, pre-AI world Pre-deal world Okay

Like I think that I would imagine That anybody that's been creating content Like that, they come after them In the same way that Ferrari If Ferrari sees you Like Ferrari some crazy color and do donuts They'll just send you a season to cyst

even though you own the car, right? They care a lot. I'm just wondering like internally, where do you think the line is? So you think that they would, you think that, you know, whenever this rolls out, maybe it's already out, I might be out soon, but let's just assume it rolls out January. You go to Sora, you can generate, you know, Luke Skywalker fighting with Spider-Man because those are two Disney properties. Can you have Luke Skywalker cut Spider-Man's arm?

off because Luke Skywalker does cut off people's arms in the PG-13 rated Star Wars. But Spider-Man does not ever get cut. He never gets his arm cut off because he's more of a PG character, right? So how do you blend those two together? And I'm just wondering, like, where is the line for the Disney execs? Like, where would they draw the line? How do they even think about a framework for upholding the brand? I think we'll know it when we see it.

You think so? I think it would be a funny scenario where they only allow violence on Warner Brothers characters. But they don't have the rights, but it's just like, oh yeah, like you can, well, they do that in Hollywood. There's some actors who have it in their contracts that they never will lose a fist fight, basically. They'll say, like, you know, you can cast me in this movie, but if I'm fighting up as somebody, I don't lose, we can tie, basically. So you know how you watch a lot of, like, Jason Statham and The Rock and, like, Fast and Furious? and they're like bashing each other through walls for like five minutes

like this crazy action scene and then at the end you're like oh and like neither of them won it's like that's because it's in the contract they don't want to be they don't want to be depicted as like losers they don't want to be aura farmed exactly they want to use graphite.combed instead

code review for the age of AI graphite helps teams on GitHub ship higher quality software faster Justin Moore taking a victory lap she's been on this case for a long time she said I got roasted by the anti-AG-I crowd for suggesting that IP holders might want their characters in SORA.

They insisted that real entertainment companies would never willingly allow their characters to be used in AI slop. Two months later, how the times have changed. Fantastic prediction, Justine. Great work. I completely agree with this take. I think it is interesting how there are, there is just the reality that if you hold IP, you need to exist in the world. You need to exist a lot. You can't just stay on the shelf. You can't be the Humphrey Bogart. And yesterday when Dylan from Puck was here,

he was mentioning a bunch of old Hollywood references, and I was laughing to myself because I know you have not seen Casablanca, and you have no idea what he means by Get on the plane or Rosebud or any of these references. You're just like, yeah, totally, dude. Yeah, yeah. Give me another movie to watch.

this weekend because you told you tried to get me to you got me to watch the fugitive and it was good right I deliver okay movies might be movies movies are underrated you heard it here first movies underrated at least in my household scroll down here because I wanted to show another post from Olivia Moore who said it has anyone else noticed V-O-3 has no IP constraints prompt Mickey Mouse welcoming you to Disney look at this John sorry yeah Yes. I'm pulling up my movies, my movies list, which I will read to you in fall. Anyway, so this was going back, this was going on back June 16th.

What's crazy is that this somehow looks, this, this looked so good at the time. And I was like, oh, it's over. It's so over. Like, they can fully do it. And yet this now, looking back, this looks washed out. It doesn't have, it's like overly saturated or something. It looks like a green screen. Yeah, it doesn't actually look that good to me anymore. And it's because the, the goalposts have moved, as they always do. Anyway, let me tell you about our daily newsletter. Tech analysis and news daily.

Get our daily op-ed, top headlines, and best posts from the timeline every, every something, every day in your newsletter. It still cuts off. We're working on it. I'm just messing with the team here. Anyway, numeral.com. Compliance handled. Numeral worries about sales tax and business. VAT compliance, so you can focus on growth.

Numeral. Bill Peebles is fired up. Do you want to hear my full movie? This is the full list you can pick, and Tyler, you can play along too. First up, The Godfather. Have you seen it? No. Wow.

Okay. Taxi driver. Never heard of it. Star Wars. You've seen Star Wars. At least a couple. Raging Bull. No.

Scarface. yes you've actually seen scarves yes okay uh full metal jacket but i didn't study it watched it but i didn't i didn't take notes full metal jacket no die hard maybe like 10 years ago you got to see die hard uh good fellas no you gotta watch good fellas this is so good uh reservoir dogs um maybe falling down never heard of it falling down's a good one uh pulpick Seen it. Okay. Heat. Heard of it, haven't seen it.

Casino? Never heard of it. Braveheart. I heard of it, haven't seen it. You've never seen Braveheart. Wow. Okay. Hackers. No. Apollo 13. No. Contact. No.

The fifth element. No. Saving Private Ryan. No. You haven't seen Saving Private Ryan. Wow. Fight Club. Seen it. You've seen the fight club, thank goodness.

The Matrix. Seen it. American Psycho. Seen it. Gladiator. No. See, now we're in the 2000s, so we're more likely. But the fact that you haven't seen Gladiator,

I mean, that's a fantastic film. You've got to watch Gladiator. Lord of the Rings. At least one. What do you mean? At least one. You mean at least once? So you've watched the full trilogy at least once.

No, I'm saying I don't think I've watched the full trilogy. You just watched a random movie in the trilogy? Probably the first one. The first one, it's Act 1. You didn't finish the Lord of the Rings. It's the three-act structure. You can't just watch one and call it and call it. I guess I can.

It's ridiculous. Minority report. No. 300. No. You didn't see 300? That's crazy. Troy, the departed, the prestige.

You're just... I'm not making things up. No country for old men. I think I've seen that one The Dark Knight Seen it Iron Man See now this is

Now we're getting into good ones We've passed You know Yeah the old ones The joke that I've only seen three now I think I've seen a handful But uh A few handfuls

Sicario Have you seen Sicario? No But I like the I like the I like the I like the I know the memes from it Yeah

We got to run through the rest of The chat is The chat's getting angry There's so many good ones here Iron Man Grand Torino, Inception, the social network, Tron Legacy, the town drive, enemy, Wolf of Wall Street, American sniper, edge of tomorrow, John Wick, interstellar, nightcrawler, Mad Max Fury Road, X Machina, the Martian, Sicario, the Revenant, Dunker, Dunc, Atastra, Joker, Tenant Dune. I have seen John Wick. I have seen John Wick. I have seen John Wick, funny story, I was on a flight back from London. And it was, like, effectively 3 a.m., the whole plane's dark, and Keanu Reeves just walks by my seat. Wait, in the actual plane?

Yes. That's wild. Just walks by, and it was like... Wait, and you were watching John Wick on the street? No, I wasn't. Oh, okay, okay. Yeah. But he walks by, and imagine seeing, like, Keanu, like, you're on an overnight flight.

It's dark in the plane, and he just, like, walks by, and he was using the restroom. and I ended up watching it after that to be fully immersed. Anyways. I think Sicario would be the pick. If you have one movie to watch tonight, I would say Sicario. Okay. It's a great one. I know that you're going to like it in the same way that you like the fugitive with Harrison Ford.

Great. Bill. Think bigger Bill Pastor. Figma helps design development teams build great products together. Bill Peoples says Sora meets Disney is going to be pure magic dream come true to be working with them. let's give it up for Bill. Bill Peebles. Yeah, seriously, what a great partnership for him. Hero.

Especially because, you know, there's a lot of people that have been, like, pointing to, like, SORA falling out of the App Store charts, like, SOR is not doing that well. And it's like, that might be true, but SOR is still the number one generative AI video app, right? It's kind of, like, winning by default. So it's not like you should cut your losses. it's not like you've been beaten. Like, it's clearly still a category that you want to go after. And so, why not go get a big partnership?

Why not keep iterating to get to breakout success, to get to product market fit? The model's going to get better. You know the research team's working on that. And now you have more IP, and then the actual implementation of the app is going to get better. So, congrats to Bill Peebles on the partnership. Jobs not finished. Yeah, it's already, I mean, it's back up to 15 already, probably just based on the news, even though I don't know that all this functionality is actually available yet.

More importantly, Hero Thousand Presence says 5.2. How about 5.2 cold ones with the boys? It's a beautiful Thursday night, folks. It's hilarious. This latest model is state-of-the-art on beer bench, which is if I crack it open, it makes a fizzy sound, and I go, hell yeah. very good Tyler Cowan says Chet GPD 5.2 also knows exactly which are the best Paul McCartney songs and it can

write a poem in Spanish as good as the median Pablo Neruda poem Tyler Cowan loves the GPD models he's obsessed Have you He's the most obsessed and I Yet I've never seen somebody make the claim

That he was one shot That's true. That's true. He's pretty elite category. He's using responsibly. Yeah, I haven't really had a chance to play too much with the new model. Is it already, is it already rolling out? Yeah, I am on 5.2 already, 5.2 pro. I was working through.

I hit 5.2 pro with a question because I wanted to know. So it does feel like opening up. it a little bit of the coming out of a trough of disillusionment potentially. You know, the vibes have been really bad with the $1.4 trillion, but the global economy has not collapsed, and the market is rallying, and there were, in fact, not an Enron scenario. None of the big tech companies blew up.

Like, we've moved on. Not maybe it happens, but in general, it seems like, you know, expectations have sort of reset, and now we're going into 2026. It's kind of a new game. But, you know, Open AI still has a really dominant consumer business, and what looks like it's shaping up to be an oligopoly in the enterprise side or the B2B side. And so nothing is a five alarm fire. They're in the code red, but it feels like they will emerge stronger from it. The big question is, you know, how will Sam Altman be perceived?

Will he be one of the greatest founders of all time, founder CEOs? And I was trying to benchmark him. You know, let's say that he lands the plane, gets out of the code red, Baja blasts his way into the public markets. And he winds up, you know, being this founder-CEO of a multi-trillion dollar consumer tech company, he's in the mag seven. It's the MAG-A. How will he be remembered?

And I was thinking about how you know. unique his ownership structure would be, because for most CEO, founder, CEOs, if they get the company out into the public markets at a trillion dollars, something like that, they typically own a ton. Steve Jobs is notably, at various times, not a major shareholder. At one point, he owned five and a half million shares out of almost a billion shares. So he had half a percent, or 0.6%. in 2011. That's reported here. Bill Gates, on the other hand, absolute size dog. 13.7% ownership of Microsoft. So, you know, at a trillion dollars, that's 137 billion. That's 137 billion. That's a lot of ownership. Alphabet, Google, obviously both of them became

some of the richest people in the world. Today, the economic ownership is only around 3%, but still significant. Jeff Bezos is at 14% with Amazon. Jensen is at 3.7%, 3.77% of Nvidia. Of course, it's been a 30-year trip. Elon Musk, almost 20% at Tesla, 19.7%. Meta Mark Zuckerbergs at 13.5. Given how much dilution Open AI has had to take in all the shareholders. Starting as a nonprofit.

Well, that, but there's a world where if the company had just been formed as a C-Corp back in the day in 20, 2015, and they had just raised a bunch of rounds back to back to back, and there was a bunch of co-founders initially. Would Sam actually have, it's rumored what he's going to get something like 7% was a proposal? Sure. Would he have less than that in that scenario? Obviously, he could get topped up. Maybe. I don't think in the fullness as well I end up working out that badly for Sam. Yeah. Yeah, it is interesting. Because just like, like being founder, CEO of a trillion dollar, consumer tech company, that usually is good enough to get you $50 billion, $100 billion. But we'll see where it lands. I'm not quite sure what will happen. Did you want to run through this post from Greg? I'd love to. But first, I'm going to tell you about profound.

Get your brand mentioned in chat QBT, reach millions of consumers who use AI to discover new products and brands. Greg, Comrat, who, of course, is the president of Ark Prize and the creator of some fantastic TBPN trading cards. That he's been printing out. He's been printing out. We were shocked by this. Thank you, Greg, for the tireless work on that project.

It's very fun, very cool. And you have such an important day job. We were shocked when we found out that you were making something cool on the side. But he says the jump to reasoning models will be studied for years. They are still wildly underrated. Arc AGI 1 has been out for six years. GPD 5.2 is a five order of magnitude. scale up, and yet it still lands at 12%.

Add a bit of reasoning and performance immediately jumps. And so you can see the Arc AGI 1 leaderboard. GPD 5.2 is only at 12%, but when you get to low, medium, high, extra high over in the reasoning models, or you switch to the pro models, you're getting up to 90% on Arc AGI. Of course, the test that any human can do, and yet AI has struggled with for a long time, not for long.

AI is starting to make headroom or make headway on the ARC-AGI leaderboard. Very impressive results. Opus 4.5 didn't do too poorly either. Croc 4, of course, is also doing well. Who else is? And has Gemini not benched on this yet? Or have they not been focusing on this?

I'm not exactly sure. But I'm excited to see what happens with Arc AGIV3. It feels like we're not even showing those scores yet because I think that none of the models are scoring at all yet. They're not even finishing. And I think it's an optimization problem to get the least number of moves. But it is interesting because the model card that Sam shared had a caveat around the Open AI models.

I sent this to Tyler last night asking him about this. So Sam Altman shows OpenAI, GPT 5.2 thinking versus GPT 5.1 thinking, and there's huge step-ups across Sweebench, GPQA, Diamond, Frontier Math, AIME, RKGIGI1, RKGI2, GDPVAL. There's jumps of various sizes all over. And then there's also Anthropic and Google, Gemini 3 Pro, Claude Opus 4.5 are also benchmark there. And of course, when you read into it, OpenAI's GPT 5.2 thinking wins on almost all these benchmarks, except for the advanced mathematics, Tier 1 through 3 and Tier 4, where Gemini 3 Pro wins, actually. But down at the bottom, there's a little

caveat, and it says, Open AI models were run with maximum available reasoning effort. So these models now have the ability to reason for longer. You can just throw more time at them. But I was asking Tyler, it's weird because, like, this makes it look like open-ass cheating and Anthropic and Google are doing more of a, you know, by-the-book approach to their benchmarking or whatever. But Tyler was sharing that actually all the labs now run their models at maximum reasoning effort because they all want to maximize the benchmarks, right? Well, yeah, I mean, you're going to run out on your best model. Yeah, it's just, it's just weird to put that caveat for you and not your enemies.

Isn't that weird? Yeah, I don't know. That's just like standard practice. Like, they're not going to benchmark on their worst model. No, no, no, no, they're not. But if anything you would want to say... You could just put the note for all the different... All the labs.

All the labs are running on maximum available reasoning effort. We're just like that. I don't know. Yeah, we should build a model that reasons for a hundred years. What happened? Oh, he's back in chat about... I'm missing it. This is insane.

You didn't even notice the difference. No, because when I'm talking to Tyler, I look at him as I look at his face. I don't look at the screen. I'm going to jump in here. So Jay, J. Ball, T-A-R-D over on X, says, Oracle is a train wreck. How did they not disclose these delays on the call two days ago? And Bloomberg is reporting that Oracle delays some data center project for opening

eye to 2028. Oracle has pushed back to completion dates for some of the data centers it's developing for opening eye to 2028 from 2027. The delays are largely due to labor and material shortages, said the people asking not to be identified. Oracle has been working to deliver over on a $300 billion contract to supply the computing power necessary to train and run opening eyes models since it was inked this summer. Even with the delays, the timelines for the project in the U.S. remain ambitious for sites that are set to become some of the largest in the world. I remember when this news broke, we talked about how Oracle was basically saying, like, we're going to build AWS in two years. And that just felt like, you know, applaud the sort of ambition.

But I think some of these delays, labor shortages, et cetera, were predictable. Bloomberg says our take on Oracle's massive bet on AI. Oracle's AI bet has fast become a bubble barometer. A little bub talk. Oracle spokesperson said in a statement that the company remained confident in its ability to meet its obligations and future. expansion plans. There have been no delays to any sites required to meet our contractual commitments and all milestones remain on track. Site selection and delivery timelines were established in

close coordination with Open AI. And they said, we have ambitious, achievable goals for capacity delivery, yada, yada, yada, yada. The whole market's down today. I wanted to wear a white suit, but it is not the day for that. Did you see Broadcom? We celebrated yesterday. It seemed like the beat earnings, but... And they revealed their mystery $10 billion customer. Anthropic, didn't people think it was open AI? I think at the time everyone thought it was open AI.

But Broadcom is selling off significantly down 10%. Really, really bad, really bad news. Yeah, so Broadcom revealed during a September earnings call that it had signed a customer that had placed a $10 billion order for custom chips. TAN said yesterday

that Anthropic had placed an additional $11 billion order with Broadcom in the company's latest quarter. So at the time originally in September, Broadcom didn't say who it was, but yesterday, Hawk Tan revealed. So anyways. So it's selling off because of questions about Broadcom sales forecasts, contracts, backlog, and anticipated future margins, despite reporting a record $18 billion in sales and strong profit growth. That's what we latched on to from that hilarious post of the crying bear. Well, the bear's not crying now. The bear is rich because the bear was short. The bear's, the bear's funny. The bear's

excited. Margins appear to be one area of concern. Chief Executive Hock-Tan said Broadcom's fast-growing AI business has lower gross margins than other areas. It's forecast for non-AI revenue in the first quarter was flat, so the revenue mix is changing, the margin mix is changing. And so, so, So some analysts cast the stock move as an overreaction and noted it came after a 75% run-up this year so far. We can expect it to recover, wrote a team from city research that reiterated its buy rating on the stock, saying that upside from the AI business will continue to push up earnings estimates. I wonder why the AI business is so much lower margin. Like we've seen over the past few years, Nvidia has actually expanded margins and grown their gross margins significantly.

During the AI boom, Broadcom doesn't seem to have the same leverage as Nvidia, and so they've been struggling, unfortunately. Meanwhile, Apollo, according to Compound 248, casually predicting zero returns for the S&P 500 over the coming decade. They put this out yesterday. A note on expected returns in public equities over the coming years. The historical relationship between the S&P 500 forward PE ratio and the subsequent 10-year annualized returns show that investors should expect to get. get zero return in the S&P 500 over the coming decade. They have a chart below. They're like, hey, can we interest you in some private credit opportunities where? Or do you know the other option? What's the other thing you want to invest in when the stock market isn't looking so good? Puts? Land. Land. Land. Land. And we have Mike Swan on the show.

Land maxing. The owner of Swan Land Company, we saw him advertising some land in the We said, we got to get him on the show, and we did. So we're very excited to talk to him in 15 minutes. All about land and his business. I've talked about this. Land, I think, is the most criminally underrated asset by new generation of investors. Nobody wants to make steady returns, land maxing. They want to hit the 1,000x.

Exactly. Meme coin. They want to hit the 1% polymarket, whatever it is. Well, let me tell you about Adio, the AI Native CRM, Adio builds scales and grows your company to the next level. There is, the timeline has been in turmoil over Klein, and some posts are getting deleted, so I don't even know if we're going to be able to pull these up.

Okay, here's what happened. Yeah, bring it down. Somebody at Klein commented on a picture from a hackathon and said, imagine the smell. Yes. People thought he was making, they thought it was like a racist comment. Yes. People started piling on.

Yes. The CEO initially defended him and said, I'm, like, I know I can vouch for this guy. Yeah. He's, he's fine. People kept piling on. The CEO ended up turning around and said, actually, we've let this guy go. Yeah. And then now the CEO is getting even more, more hate from letting the guy go.

And then now he's deleting the post. And so maybe the guy, maybe he ends up rehiring. It feels like damage is pretty done at this point. I'd imagine, you know, I'd imagine this engineer that was formerly at Klein finds a new. It'd be hard to imagine him saying, like, going back and saying like, oh, I'm actually going to rejoin the team that should. I have a brief screenshot saved a little bit. I think I can read it, some of it. This is the CEO of Klein.

says a few days ago, a tweet from our head of AI offended a lot of people. And it definitely offended a lot of people. There's an article in the Hindustan Times in India. This is like newsworthy in India. Well, I don't believe his original tweet was intended to be offensive. His response, refusing to apologize, does not reflect my position or clients. We recognize this caused real pain, and that deserves blah, blah, blah. And so the rest is cut off.

Lulu says this stinks. She's not a fan of it. Yeah, she says re-calms mistakes. Everyone makes them sometimes things fall flat. It's happened to me, and it also happens to people much smarter. But betraying people or principles is in a different category. It's more preventable and less excusable. Cowardist doesn't happen by accident.

In the case of Smellgate, it could be argued that Posh made the first kind of mistake overlooking how the joke could be interpreted, but then the CEO in arguably made the second kind of mistake. And that one, to me, is much worse. Nat Eliasson posted a friend of the show. I'm not sure if he's in the chat today, said, considering the unanimous reaction to the CEO's post saying that they let go of the engineer, Nat says, will he fire himself now?

Only seems fair. So I don't know, I don't know if it'll get that far, but certainly. It's just the entire company gets fired? Fireception. Just everyone gets fired? No. The funny thing is that the only reason I know about

this joke is from a bunch of Indian friends who seem to have, like, been making it on anonymous accounts years ago in some sort of funny attempt to, like, reclaim the formerly racist joke. But, uh, Lulu says, when you cave to the mob instead of standing by your employee and now people are more mad at you than before. And, uh, she quotes, your worst sin is that you have destroyed and betrayed yourself for nothing. Yeah, it's really, it's really odd because it feels like, although it was going viral, like this just feels like something that would have blown over,

at least like take a breather, take a week or two, just like, you know, take some time off to think about the action. It feels very reactive to do it like within a 24 hour news cycle which like can just amp up so quickly and then fall out. Okay, I guess the Hindu

Stan Times is not very seriously. It's the gawker of India apparently. So don't worry about that. I guess I'm wrong on that. Thanks for fact-checking me, Syrah. Frank says, is responding. Trump in an interview yesterday said that he would consider eliminating taxes on gambling winning. This is so crazy. Frank says prediction markets be like, never mind, it is gambling. It is gambling. Because they always use trade. It's not, it's not bat. You trade on future. Trade on sports, trading on this.

Like, wait, actually. And, yeah. Yeah. It is interesting to think about, you know, creating tax incentives for gambling. Did they ever get limited taxes on tips? I remember that was like a thing during the election. Or did that ever go through? Because I remember we were joking. We're like, oh, we're going to tip everyone here. I think everyone made that joke at some point.

Apparently, it is a glorified tabloid. So, you know, don't, if you're an American CEO and the Hindu stand times is putting you in the true zone, let it be known that maybe take it with a grain of salt. Um, anyway, I, I, this, this just feels like a whole series of, of people. It's like, it's like, Trump likes being edgy and funny making jokes and he says, I'd consider it. And then watcher guru takes it and turns it into a viral thing. And then somebody dunks on it and they get viral points and it, it all feels deeply unsurious and, and not really, uh, like it's going to reshape the market anytime soon. But it certainly is a funny headline. Yeah, I think, I think a lot

of people would hope that he'd be like, no, we're not going to create tax incentivize gambling in this country. But he didn't. Stranger things have happened. Stranger things have happened. What is this classical theist says, increasing the incentive to gamble as an answer to the affordability crisis is nothing short of diabolical. That is very, very rough. I don't know. Yeah, it seems like the thing you should tax extremely highly. It seems like the best thing to potentially tax. Arthur Pigoo in Shambles, the Pigouvian tax creator. Are you familiar with Pigouvian taxes?

No. It's basically this idea that, like, you can use taxes to shape, you know, behaviors, incentives. So, like, if you don't want people to drive gas-guzzling cars, you just increase the tax on gasoline. Instead of trying to make something illegal or promote something or incentivize something, you just shift the tax to be tax on tobacco, people will smoke less, in theory. Of course, cigarettes, they're addicted. I mean, California has done this so aggressively with gasoline

in the state. And arguably, it's worked. I mean, there's a ton of electric cars in California. Like, there really are less gas-guzzling cars. So if that was the goal, mission accomplished, right? It kind of worked. What do you think about? Paguzzi in Texas. I was going to say, isn't that like the idea behind the land value tax? Yes, a little bit. It's not quite the same. Land value tax is more. Because you're incentivizing people to develop the land.

Yes, yes. But I think Pagovian Texas is more is like the opposite, like the negative. Like it's a way to disincentivize negative externalities, like negative behavior. But I suppose it works both ways. Anyway, this, yeah, this was interesting. This scoop from Alex Cantorwitz. Did you see this? So Alex Cantorwitz from big technology, what a great name.

He says, Scoop OpenAI CEO, Sam Altman, gathered newsleaders for lunch in New York City on Monday. He told them Enterprise AI will be a massive priority for Open AI in 26. And Greg Brockman says, yeah, Enterprise AI is going to be a huge theme for 2026. And this tracks with hiring Slack CEO as CRO, right? Totally, yeah. Yeah, the question is, what does this actually look like, right? I think a lot of people are using chat GPT at work. They're using a variety of LLMs.

Does it mean they're going after Harvey? That's the big question. Harvey seems to be doing really well. And I think of law firms as enterprises. And I think of law firms as potential targets for an Open AI enterprise plan. Am I crazy? Yeah, I don't think you're crazy. Okay.

There was a funny post here from Peter, Gernis. This is not a super serious. post, but I think it's worth reading. He says, last quarter, I rolled out Microsoft co-pilot to 4,000 employees, $30 per seat per month, $1.4 million annually. I call it digital transformation. The board love that phrase. They approved it in 11 minutes. No one asked what it would actually do, including me. I told everyone it would 10x productivity. That's not a real number, but it sounds like one. HR asked how we'd measure the 10x. I'd said we'd leverage analytics dashboards. They stopped asking. Three months later, I checked the usage reports.

47 people had opened it. Twelve had used it more than once. One of them was me. I used it to summarize an email I could have read in 30 seconds. It took 45 seconds. Plus the time it took the fix, the hallucinations. But I called it a pilot success. Success means a pilot didn't visibly fail.

The CFO asked about ROI. I showed him a graph. The graph went up and to the right. It measured AI enablement. I made that metric up. He nodded approvingly. We're AI enabled now. I don't know what that means,

but it's in our investor deck. A senior developer asked why we didn't use Claude or ChatGBTGBT. I said we needed enterprise-grade security. He asked what that meant. I said compliance. He asked which compliance. I said, all of them. He looked skeptical.

I scheduled him for a career development conversation. He stopped asking questions. Microsoft sent a case study team. They wanted us to feature us as a success story. I told them we saved 40,000 hours. I calculated that number by multiplying employees by a number I made up. They didn't verify it. They never do. Now we're on Microsoft's website. Global Enterprise achieves 40,000 hours of productivity gains with co-pilot. The CEO shared it on LinkedIn. He got 3,000 likes. He's never used co-pilot. None of the executives have. We have an exemption. Strategic focus requires minimal digital distraction. I wrote that policy. The licenses renew next month. I'm requesting an expansion. 5,000 more seats. We haven't used the first 4,000, but this time we'll drive adoption. Adoption means mandatory training. Training means a

45-minute webinar no one watches, but completion must be tracked. Completion is a metric. Metrics go in dashboards. Dashboards go in board presentations. Board presentations get me promoted. I'll be SVP by Q3. I still don't know what co-pilot does, but I know what it's for. It's for showing we're investing in AI.

Investment means spending. Spending means commitment. Commitment means we're serious about the future. The future is whatever I say it is, as long as the graph goes up and to the right. 134,000 likes on that one. What a long post you go. That's fantastic. I was thinking about the fact that we now have a data point for agent force revenue.

And we also have a data point for- Okay, you have to take that with a grain of salt. Because Salesforce is, they are the greatest to ever do enterprise sales. And we do know that they're selling agent force as like an add-on. Yeah, that's what I'm going with. but first I'm going to tell you about re-stream one live stream 30 plus destinations. If you want to multi-stream, go to re-stream.com. Okay, so my point was you can actually get to a dollar per token because we've also seen that leak of how many tokens they're generating, remember? And everyone was like, oh, Benioff's like not generating that many tokens. And so you can see that he's probably making the most dollar per token of anyone in the industry.

Because you can look at other companies and see how many tokens they're generating, they're rough revenues, and we can work through all the math. Tyler, have we done this with Anthropic or Open AI? Because we were looking at rough revenue, token, how much they've done it. Yeah, I think I tried doing this at some point. It's just so hard because they don't like break it up in a nice way. Like I think at some point, Demas said they're doing like over a quadrillion a month. Sure.

But then what is the revenue? We don't know. Yeah, we don't know for Gemini. Yeah, and then for OpenAI, like we, I think we knew their API token count. Yeah. And then the revenue was leaked, but it was overall revenue, it wasn't broken up. Yeah. So you can maybe estimate it based off subscription for 10 inch.

Still, still, I feel like we got to, we got to put together the agent force numbers to figure out. But agent force must be, because, I mean, I think the leaked number was like $3 trillion or something. It was a very low amount. And they're making like half a billion dollars. So they're printing. And that must be like 99.99.99% margin, too, right? Like, how much does it cost to generate a trillion tokens? Like, 10 bucks or something?

I don't know. Well, yeah, I think we also pregnant with this, too, because we wanted to get on the opening eye. Yeah, yeah, yeah, yeah. So if you do the batch tokens and, like, the 4-0 model, it's like $20. Can you imagine? Adiosh is sitting there. Like, yeah, COGS is $10.

I made half a billion. No, I don't know. Yeah, yeah, tokens are the new page views, the new eyeballs. But we should actually get both of those numbers in a spreadsheet and see if there's any other numbers we can pull through because I would love to see them. In the meantime, let me tell you about Gemini 3 Pro, Google's most intelligent model yet, state-of-the-art reasoning, next-level vibe coding, and deep multimodal understanding. What do you laugh at? A post went very viral a couple days ago. Someone's saying, come on now, because Tubey has a movie out called The Grinch that stole BIA.

ITC-H-E-S, and To-B-E-Responded. To-B-Responded. Tis the season. T-S-the-S-E-E-S-E-E-R-E-E-T-E-E-E-T-E-E-T-E-E-T-E-E-T-E-E-E-T-E-E-E-T-E-E-E-E-E-C-E-E-E-E-C-E-E-E-E-G put this on a shirt. So OpenAI launched a merch store called Supply.openAI.com. Very fun, bunch of shirts in there.

You can get basketball. You can get a bunch of cool stuff. But then Riley's sort of dunking and saying, like, put this on a shirt. It's like how crazy the financials are over at OpenAI. And I get it. Merch store probably not the biggest priority while you're in Code Red on your core product.

Like, that's a legitimate concern. But the financial times, like, what, what are we doing with this chart? This is a crazy, crazy chart. So first off, this says Open AI's estimated balance sheet, but then it has revenue on here. And like, revenue doesn't go on the balance sheet. So, like, what are we doing? And like, it's like, I'm just so confused by this. And so total cost of cloud compute, that's the purple bar down there. Cogs also don't go on the balance sheet. So, like, both of those don't belong there. Then, the, red dots are new equity fundings that they're planning to do, and that should go on the

balance sheet because that's assets that come in. But then free cash flow, that comes from the cash flow statement. So it's just like, this is such a chart crime from anyone who has respect for the three statements. This is the financial times. This is the financial times. I have a lot of respect for the financial times. I love the financial times, but I was just very shocked. I mean, it's more like Open AI estimated financials. I don't know. It's sort of an interesting chart. It's also just very weird how there's like bars. and dots and it's like, what does the bar mean? What does the dot mean? Like, it's like the dot feels like it's more of like, I don't know, it's a very confusing chart. It does tell an interesting

story, though, which is that they're projecting revenue increasing while costs also increase and they're going to have to raise more money and eventually they're going to, you know, they're going to lose a lot of money. There's going to be negative free cash flow for a number of years. Then eventually they will turn positive. I don't know. It seems like it's a bold five your plan. We've heard about this. It's funny to see it laid out like that, but ultimately they're, you know, like whether or not they deliver a sort of immaterial to their, to their merch efforts. Anyway, what? Cognition. Open AI is not going to like the post I read after you talk to me about Cognition. Cognition. The team behind the AI software engineer, Devin,

crush your backlog with your personal AI engineering team. What post are you pulling out? Jacob Allorty says he has no tolerance for AI and finds the whole conversation around it so effing boring. He would not like this show. This is hilarious. He says, I would much rather kiss on the beach

and read a novel and be sunbird. Most pick-me moment of the year. It's a crazy line. But it resonated. 91,000 people agree. This is hilarious. Yes. Medein, who makes technical deep learning tutorials, says,

yo, Jacob, come on my live tomorrow. We're going to be review this paper. It's almost as good as the stuff you mentioned. See you tomorrow, buddy. And it's a surprising effect of negative reinforcement and LLM reasoning. That's a very, very funny. Okay, one more post before we start land maxing. Suck says, God blessed us again.

Shocker, a thousand-year American Empire in open-source intel's report. A major deposit of rare earth and critical minerals has been uncovered in Utah, which the Wall Street Journal calls the most significant critical mineral reserve in the U.S. We did it again. We did it again. If you're a nation without, you know, a lot of critical minerals, it's probably a skill issue. This is actually a good transition to our next guest, Mike Swan. Before we bring him in, let me tell you about Privy. Privy makes it easier to build on crypto rails, securely spend up light-level wallets, sign transactions, integrate on-chain infrastructure, all through one simple,

API. We will bring in Mike Swan, the managing owner of Swan Land Company. Mike Swan, how are you doing? Welcome to the show. Good well, gentlemen. How are you? Merry Christmas. Thank you so much for taking the time to come talk to, to, I don't know, probably random people. What was the timeline here? We saw the ad, was it Monday? Yeah. It was in the weekend edition of the Wall Street Journal in the special mansion section. We saw the Swan Land Company advertisement. And we were like, we've wanted to invest in land? We think that there's a lot of people in our audience who might be interested to invest in land. I've talked on the show before that I think the new generation of investors,

they want to buy crypto coins, they want to be trading options, they want to do NFTs, all this stuff. They want to do sports betting. And I feel like land is just kind of overlooked, but certainly not by you. So we were excited to have you on the show to give us kind of an update on your business and how investors are approaching the asset class lately. No, thank you for having me on, gentlemen. I've really been looking forward to joining you and sharing a little bit of what we see in our arena out here in the West as far as ranch properties, investment properties in the Rocky Mountain West, which we primarily serve.

basically right now what we're seeing is as we always have that you know land in the western part of the United States isn't going out of style anytime soon especially in Montana we saw an explosion with with the rise of the Yellowstone phenomenon and how that that really hit us out here and was it actually driven by the show the show really caused people think about it it amplified what we were already seeing out here in our in our market but it certainly didn't it didn't slow down the process of the interest in in Rocky Mountain Ranch property. So, of course, you receive the phone calls that, you know, talking about the train station and, and all the entertaining aspects of what Rip, Rip in that show went through. But that's a, that's

obviously Hollywood doing its best to portray, to portray our part of the world in a very unique and unrealistic light. But, you know, we're seeing, we continue to see, we continue to see, investments in our part of the world. You know what our market's very cyclical as we see many of the markets and we study those and keep very close tabs on what the markets are doing but you know currently right now with with the stock market where it is and in the cash and the financial sector being as strong as it is right now the capital flow has really been out of real estate it's it's gone into the market it's going to stay in the market until we see until we see some corrections there and then in the

then typically we see that pendulum swing back and so really so that's somewhat counterintuitive i would imagine some folks maybe some smarter investors when they feel like markets or maybe a little bit overheated or overvalued might say hey this is a good time to rotate into a less liquid asset like land or ranches and have some stability what you're saying is it's maybe the opposite a lot of people just wait for a correction and then and then get maybe a little bit scared at that point and then seek more stability? No, I think we're going to start seeing that in Q1, Q2, and next year. I think we're going to start seeing that movement back into our arena.

But we've certainly seen a slowdown, you know, early 25, all the way through 25. It was a relatively slow year outside of several large transactions that we've seen in the marketplace. But we feel as far as looking at the markets and the economic indicators as well as the financial people that we work with that we're going to start seeing that come back into the market early in early in 2026 and really see it ramp up in our in our neck of the woods so you know our focus right now is is getting quality listings getting priced well getting them priced in the market we continually see anywhere between a 10 and 20 percent rate of appreciation in these western

Montana ranch properties that's year is that year over year I say that's over a five to seven year period, is what we typically see, especially in the Rocky Mountains. Now, there's a lot of factors that play into that. We see properties where you have a quality water component, fishing component, hunting component, there's timber on the property, different amenities like that obviously have a higher rate of appreciation than straight agricultural land where you're grazing cattle. But there's getting to be a real appetite in the investment world for these quality aid properties, just like there are with quality stocks or quality business investments, whatever it may be, we see the same thing in the Rocky Mountain portion

of, you know, in our real estate world as well. Yeah. How many people out of the buyer pool really care about having like a high quality water source on the property? I think our audience primarily works in and around tech. Every every once in a while a headline will pop up of some tech founder, you know, buying a doomsday ranch. I think a lot of people like the idea of having a place with a dedicated water source that, you know, if stuff hits the fan, they can escape there. But what percentage of the buyer pool really actually cares about making sure there's, you know, a lake or a river or some type of natural spring?

I'm assuming a lot of these properties you can just drill down and access well water. But how does that all work? You know, a lot of it jordy deals with the fishing aspect of it. The blue ribbon trout fishing in western Montana is some of the best in the world. So primarily it's more of a recreational-driven component of these properties, and it is necessarily an end of times or a doomsday aspect to the property. So the fishing, we always refer to quality fishing water on these properties is really the golden thread on ranch real estate and recreational real estate.

in the Rocky Mountains in that, A, we typically see these properties appreciated a much higher rate, and B, they never go out of style, and there's only, there's a, there's a finite amount of those A properties that are on legitimate fishing water available in the Rocky Mountains. So when they do come available, they're, they're typically in very high demand. And the premium over, the pre is, what's the, what would you say the premium is over a property that doesn't have a running water or a lake or any of those things? Is it 50% is 100%, 200%? That's what I'm going to say.

Each one of these is so unique, Jory. That's what's hard about it. But it's significantly higher. Then you go to the timber properties, the properties that are in the mountains with the mountain setting that everybody sees in the magazines that you really obviously recognized in the magazine ads that we put out. But the timber, the elk, the big game are always an attractor as well as to those investment-grade buyers. You know, back to what you were talking about from the tech standpoint, it's remarkable how Bozeman's exploded as really an emerging market in that tech industry. We're seeing a lot of tech people, high net worth tech individuals relocating in Montana, relocating in the Rocky Mountains in general,

as well as buying large properties. You know, we're tied by a lot of NDA documents and NDA contracts, but there are a number of high net worth individuals that are relocating out here for a number of reasons. One is from a safety standpoint. They see Montana is very safe. They see the Rocky Mountain West is very safe. As you see the crime rates in some of these urban areas that, you know, regardless of your

political affiliation, there's concern about it. And I think as there continues to be concerned about that, we're going to continue to have people that are driven to this market, seeing as a safe, secure place to raise their family, to have their kids, to have their family, you know, a family compound where they can gather at. What kind of opportunities are there to actually monetize and generate yield on a ranch property? Obviously, if you can just buy a piece of land and and let it appreciate over time, are there opportunities to actually utilize some of these properties, even if you're not there to generate some type of incremental yield?

Absolutely. You know, the ROIs on these is much lower than what a standard investor would demand out of their portfolio. So a lot of it when we're working with buyers is changing that mindset that we're looking at a long-term appreciation. Obviously, the depreciation schedule and the depreciable assets that are contained within these properties is of significance to a lot of these buyers that they can use directly on their tax returns. But typically the ROI on a cattle ranch, if you can get a two, even a three percent return on some of these, is quite good. The land prices have gotten to the point where it really agriculture is making, it's hard

for agriculture to really sustain and to pay for any of these. I had a good friend of mine, an ag family tell me that, you know, really the ability for agriculture to pay for these ranch properties, farming is a little different, but on a strictly cattle standpoint, finding a way to get cattle to pay for these properties, really that wagon came on hitched back in the 70s. So today it's more of looking at how you can get the agricultural operation to pay for your operation, to pay for your expenses, hopefully get a decent paycheck out of it. But where you see the return is obviously when you go to sell that real estate or you look to 1031 out of an existing operation and upgrade into something a little larger in a possibly not so desirable area that isn't commanding these record prices from a recreational standpoint. if that makes sense. Does it feel like essentially most of the land that you're seeing come across your desk

has been properly surveyed such that people aren't seeing it as a gamble. They're not buying and say, oh, well, like, maybe there's a chance there's gold there or oil, because we just saw a, there was a new rare earth element deposit that was found in Utah, and the Wall Street Journal called it the most. significant critical minerals reserve in the United States, a whole bunch of rare earth elements. And that seems like, how are we not looking for that already? But I imagine that most of your clients are not thinking about their land purchases as lottery tickets, right?

So how do you think about these like wild card events that seem to be happening? And yet, what is your, what is your client base actually experiencing? You know, we really don't see that in our client base. It, typically what our clients are looking for is preservation. We have buyers that are typically very conservation-minded that look at the land is how they can improve it, how they can possibly reduce man's footprint on that landscape, enhance the wildlife, enhance the agricultural components, enhance the land. So when they leave it, it's a little better off.

A lot of what our role is is actually educating these buyers. to, you know, there's a great shot right there on a ranch that we have listed in northern Montana. But a lot of these new buyers that are in our arena today are looking at ways that they can help preserve the West, which is very refreshing in a lot of ways. They want to find ways that they can preserve the agricultural way of life, that ranching way of life. Oftentimes we'll see buyers that will come in, acquire an asset, and then go back to that owner and say, okay, we understand that the margins in the agriculture are very tight. Let's re-look at this asset and say, okay, if we have an influx of capital and we have the

ability to put some capital into this property, what can we do to enhance it, both from a production standpoint, but also from a recreational and a conservation standpoint as well. Looking at it through a little different set of glasses and possibly what that operator's been looking at it in the past, and in finding ways that they can better preserve the ground, preserve that landscape, preserve that Montana and that Western way of life, and not just come in and look at mining it, developing it, carving it up, putting small ranchettes on it or whatnot. We've really seen a shift away from that development aspect into more of a conservation-minded buyer. What's the process if you acquire a piece of land actually build on it?

we're based here in California, and the process is absolutely insane. I live in Malibu. If there's a property that you might look at, it might be reasonably priced, but you're looking at maybe six years to actually develop plans, get them approved, and actually start, you know, getting to the point where you could really occupy the space. What's it like in Montana from everything from a permitting process through even just like labor costs, all that stuff? I don't know if I want to answer that question necessarily. I don't want to see a big rush all of a sudden into our market. But I think you'd be pleasantly surprised, George.

It's significantly smoother. We don't have the bureaucracy in Montana that you'd see in a lot of other states. Obviously, are there processes? There are permitting processes as far as building permits, electrical permits, and whatnot. But nothing remotely close to what you deal with in California. it's much more personal, it's much more hands-on, it's much more streamlined. And not always is it, you know, with that being said, we have a development here in Montana called the Yellowstone Club, which you may or may not be aware of, which is it turned into quite a billionaires resort area, very high end, very high end. It's the who's who in the financial sector that are residing in that area.

And what we're seeing is really the high, high-end construction taking place in that kind of in that sector of our state. You know, we'll see some building in the more remote areas, but not the extravagant building like we see up in the Yellowstone Club. Yellowstone, you'll have a two-bedroom condo for $20 million. It's a pretty commonplace. Yeah. Yeah. How much does it cost in general to start? to work with you in general.

Do you, you know, is there like a, like a floor price or how do people start to get into ranches, farms, land? Like, what are all the different financial products or actual opportunities that you see people come to you with? You know a lot of it, John, is just sitting down with a client interviewing them. We spend a lot of time up front. Our time is money, just as a lot of our clients. their time is money as well.

So we like to spend a lot of time upfront interviewing them, understanding what their goals and objectives are, looking not only short-term goals and objectives, but long-term goals and objectives, not just of them specifically, but also of their buyer. Where are they at with their family? You know, what are they, what time a year do they plan on using the property? What do they want to get out of the property? What are they looking at long-term? You know, talking a lot from the construction standpoint, what those times look like.

What are those time frames, getting them hooked up with the right people so they get good quality information? So what we do is a lot of times is spend that upfront time. So when we have a buyer that comes out and says, Mike, we've sat down, we've spent several hours with you on Zoom calls or personal meetings. A lot of time, we'll fly to the client. We'll sit down with them at their house in California, Texas, East Coast, wherever it may be. sit down and have that face-to-face meeting, what we do extremely well is personalize a process that so many clients feel is very impersonal. And that's really been our niche that we do extremely, extremely well. We're very high touch. We, this is a, these are big decisions with big

dollars tied to them. And so we want to make sure that, A, there's no surprises. We want to make sure that we're totally up front where we have everything on the table. We, we, we inform and educate our buyers as best as we possibly can. So there's no surprises. That's the last thing any of us want is dealing with surprises when we get into a multimillion dollar or a hundred million dollar transaction is surprises. So a lot of that is done up front. And we sit down and talk to them through that right up front. We explain the good, the bad and the ugly about these processes, timing, costs, and trying to make sure that those goals and objectives that they have are realistic. And so once we get on track with that, we're very strategic.

We like to say we shoot, you know, we like to aim like a laser versus a shotgun. So we're very, we're very direct in how we approach these processes. So we put a property in front of a prospective buyer. It's something that they need to look at. And we've vetted it. We've gone through it. We've visited the property. We've gone through and already done a lot of the due diligence already up front before they

ever even set foot on the property. So again, being efficient in the process, that's one of the things that we stress within our office is being efficient with our time. There's no wasted motion in what we do. And we convey that to our buyer and we convey that even to our sellers that everything we do has a purpose. We have very strict, very, very systematic protocols in everything we do. And, you know, I got to be honest with you, gentlemen, what we do, we're not building rocket ships here. real estate is is personal and it's being able to execute at a very high level and that's one of the things that we do and we feel we do exceptionally well we've transacted more a hundred million

dollar plus range properties what's the uh what's the the total volume that that you guys have done if you're able to share oh boy i couldn't even tell you jordy right now but it's in the it's in the bill it's in the in the billions absolutely yeah absolutely it the hit the hit the gong for Mike. We got a gong here. I think that's a good thing. I got two more questions for you. We got to do the question. Yeah, yeah, yeah.

But I got one more before that. Okay. Any restrictions on building an air strip on a large enough ranch? If I want to create a ranch and fly a PC12, land that or PC 24, is that all fair game? We have several clients with air strips on their properties, private air strips. Mm. Okay, let's hit the dog again. Again.

And then we have a question we like to ask all of our guests, but it's particularly relevant for you. What's the biggest fish you've ever caught? Oh, you know, as crazy as this sounds, I don't fish a lot. Oh. I really don't. You know, we...

You're too busy land maxing. We're busy. You know, and when I'm not at the office, We have a small farm that my family and I have, that it's kind of my therapy. I get my hands in the dirt, and it's where I work. We're avid, avid sports fans, so we travel around watching our local college teams, and my son is a college athlete, so my wife and I, we spend a lot of time on the road following him. And so I think one of these days I'll probably take up fishing.

I do like to go to Canada with some good friends, and we go up and fish walleye and pike in up in the in northern Canada but uh around here i just i just don't have time to get on the rivers too much and it's crazy as it sounds we get on we get on some of the most spectacular fishing water that you could ever imagine that very few people in the world ever get to see and you know i now with that being said some of my colleagues here in the office are exceptional and very accomplished fishermen so that's probably a better question for for them i i i like to work too much. I'm with you. I'm with you. I'm with you. Great stuff. Well, thank you for coming on breaking it down. This is fantastic. And I'm sure there'll be another land story in the news

sometimes soon, and we will reach out. I appreciate you having me on, gentlemen. Thank you very much. Merry Christmas to be. Merry Christmas. Have a great day. We'll talk to you soon. Let me tell you about fall, the generative media platform for developers. Develop and fine-tuned models It's servers, GPUs, and on-demand clusters. Up next, we have Matt Levine in five minutes. But let's go back to the timeline and clarify something with Augustus DeRico. He says, am I tripping, or did TBPN used to stand for Technology Brothers Podcasting Network? And he says, technology business podcasting network.

Did we get gentrified, bros? What happened? Do you already break it down for Augustus? I mean, I think real ones will always know what the TB and TBPPN. stands for. Yes. We actually never refer to TVPN as like four words. It's just always, always the initial.

Always the initials, yes. Leave it up to the audience to interpret. Yes, it's becoming a thing. But it is actually on our website. There is, it is spelled out on our website. It says technology business programming network. I still get that wrong. Often I say production network.

It's not production. It's programming network. Of course, it's a nod to ESPN. Of course, technology and business is what we talk about. And so that made sense. And technology, brothers, TB always remains in our hearts. Eternal, eternal. Our Epsilon.

What's up with, what has Rivian been up to this week? We should play this clip. RJ has been on a tear. He's making a serious run at self-driving. He's chipped up. He's chipped up. Let's play this with sound, please. And now?

For the first time on R2, we're adding a third sensor, the LiDAR. Oh, they're doing LiDAR? The LiDAR. That's crazy move. It's bold, right? I don't know, that seems like crazy. Clearly, no one clapped when he's, when, go back, that was a really awkward pause. Dramatic.

And now, for the first time in R2, we're adding a third sensor, the LiDAR. The LiDAR. LIDAR. People are like, no, my iPhone camera is going to get fried. It's a weird thing. Apparently, LIDAR on certain cars, not all of them, can be so strong that if you point your camera at it with your phone, it can permanently damage the sensor. And so what about your eyes?

I think it actually only hurts the phone. It doesn't hurt. Don't worry. You're good. Okay, totally good. Nick, could you bring over that bag right there? What bag? I gotta see, we gotta see this.

Look, we signed up for Picnic, TK's new service. Let's see this, let's see this. What did you get? Try Picnic? Try Picnic.com. Look at this. We're supporting Travis Callanick, my Cloud Kitchen's team.

This is an unboxing. What'd you get? You got a, you got a, you got a slot bowl? One slot bowl. One slot bowl. Anyways, looks fantastic. We're excited to check this out. one of one of our interns signed up for the service the orange bag stands out with the green

background here you got no you can have your lunch bag this feels like a yeah yeah this is iconic this is going to be seen all over all over the place he's cooking they're cooking he's literally cooking well let me tell you about public dot com investing for those to take it seriously they got multi-asset investing industry in the yields they're trusted by millions folks uh Tyler posted yesterday you're telling me a brainwash this colt didn't get into the three-figure like club, but Kristen Forty says top 20 tweets of the year. So you made it top 20.

Top 20, that's good. Yeah. I only need four more likes. I'm at 96. Help them out. Go give it a like. Go give it a like. There's a chance.

I tried to artificially give it a boost by quote tweeting that one, not the other ones. But it did perform the best, right? Correct. Because we ran the experiment. We posted all four of. Tyler's jokes and per my prediction the did a brain walk you can turn the giga chat filter off now Tyler you can turn it off the bit it's kind of an old bit at this point ridiculous ridiculous

well um we have Matt Levine from Bloomberg and money stuff joining the show he's in the restroom waiting room let's bring him into the TVP and ultradome Merry Christmas Matt how are you doing Merry Christmas how you guys thank you so much for taking the time to come on the show on a Friday Thanks for having me. Great to meet you. And thank you for creating wonderful content that at times we have... Remarkable. Yeah.

Many times included in our show. Tripod glaze, yeah. You know, we love the work. It's been fantastic. Thank you. Thanks. I did want to start with a little bit of background. I wanted to know about the day that you decided to become a journalist.

What was the transition like? What was like the first inciting element in that story? Did you know we were headed? towards a hyper-financialized world where we would be able to gamble in this very conversation? I don't know, man. I was working at Goldman when I decided to become a journalist. I was already pretty hyper-financialist. Oh, that's true.

I mean, I was, the day I decided I went to my boss and I was like, I'm quitting to go to a deal breaker, which is like a financial gossip blog, and he was like, that's fine. You can stay for another two weeks and finish up your work. And he was like, wait, did you say deal book? And I said, no, deal breaker. and he's like, oh, good night. You absolutely have to leave the bullets. We really.

That's remarkable. Well, I wanted to take your temperature on a bunch of different topics. The first might be prediction markets. I mean, Jordy was joking about it, being able to gamble on this very conversation. Yeah, we've had some uncomfortable moments throughout the year where people flood into our chat and they're betting on what Sam Altman is going to say or marks up. Zuckerberg is going to say I'm one of our conversations, and it becomes very distracting because everyone's just saying, say this, say that, obviously trying to influence the results.

Manipulate the conversation. But, yeah, it's been... I get a lot of those people. I get a lot of... Yeah. The overlap between prediction market people and my readers is pretty high, so there's a lot of people emailing me and say... So, I mean, one of my main questions is, like, is like, how do you actually get to some sort

of ground truth for what's going on with? prediction markets because there's there's a world where it was like you know this incredible crystal ball for understanding the election then it turned into okay this is going to give you information about all sorts of different things in the world and then you peel back the onion and you think maybe there's just a lot of sports betting going on like how do you actually think about the the shape of the business today and where it's going um you know I think that like this stuff about like what people will say like you look at the volumes on these things they're like you know thousands of dollars like it's not like there's a lot of stuff that is fun to write about because it's

it's weird and silly and susceptible to manipulation but it's just not that big right um when people talk about these companies raising at huge valuations and becoming huge companies like it's 80% sports gambling that's like a number i made up like it's it's you know it may be less than that there's a volume matter but like it's it's like but now Next leg up is sports gambling, right? I mean, that's why they're businesses. I think if you talk to them, like, their view is sports gambling is this huge opportunity for them to, you know, get people there, right? To get customers who really like gambling and to get professionals who can make money gambling against the sort of, like, you know, dumb money customers.

And then once you have that, it's easy enough to expand into, you know, markets that make us more informed about the future. of the world. I don't know that that's true. And like if they end up just being weirdly regulated casinos, then like that's possibly still a really good business. The question is how does the market actually evolve because you have every traditional sports book adding prediction markets. And so if you have new businesses that can be in 50 states on day one, maybe that grows the market a little bit. But overall, you know, what is what is the sort of like total enterprise value that all the popular online trading and or betting platforms can really sit at is kind of unclear right maybe yeah i mean like clearly the

big opportunity is like cannibalizing sports betting the other thing is like it's not clear what they are because they're exchanges right so they're not making money by treating against uh customers right and so like one possible evolution of the market is you end up with people who are either literally these sports books or who are like kind of like hedge funds that are replacing sports books, being market makers on these platforms and sort of, you know, making their money by trading against retail flow. But like, you know, there are a separate business from the actual, you know, CalShian polymarket platforms. Yeah. Do you have an idea of how sophisticated like Wall Street is around sports betting? Because you have to imagine that like at some point Jane Street or Citadel

said like, well, what if we just went and put someone in Las Vegas and started? trading. Could we make an edge there permanently? It feels like there might be a wave coming where Wall Street starts having like serious desks dedicated to sports betting, or is that already happening? Or do you think that won't happen? Yeah, it's already happening, right? I mean, like, Susquehanna is the big one who like, you know, famously have a sports desk and like other big kind of like high frequency trading market making firms are dipping their toes into it. I think it's harder for them to get into like traditional sports book you know trading but it's very yeah because if you're too if you're too good you're regulated exchange if you're too good just get

booted traditionally you get limited and it's like it's just like a different interface where and then a different regulatory interface too like if you're trading on a commodities exchange you're trading on a commodities exchange I can do that um uh so I think they're very much getting into it and if you know legal sports books regulated as commodity exchange and are here to stay. It's also just like whether or not it's a good business opportunity, there's a huge personality overlap. Like you know these high frequency trading firms. Like it's the same type of analysis. It's the same type of adrenaline. So like they're very happy to get into sports books. How are you thinking about insider trading on prediction markets? It

feels like we've, I mean, this this week, it seems like multiple people have been making the steel man argument that it's good. Yeah, the problem is, is in some ways it feels like if you don't have insider trading, then it's just a bunch of people guessing. And if you do have insider trading, then you potentially get greater accuracy of, and, like, more value out of the markets. And so it just feels like a very tough, I mean, it's very tough for the prediction market platforms themselves to actually talk about. Right. Like, my impression is that everyone who started a prediction market is a true believer in the idea that like the job is to make markets as informed as possible and like they all secretly love insider trading but they're also trying to

get approved by the CFTC and so they have to say we do not allow insider trading I think the rules are weird right I mean the rules of insider trading commodity markets are less strict than they are in security markets because traditionally they're for like you know grain producers hedging their grain production so like you're supposed to insider trade um and I think like maybe a little bit of that philosophy will be important into the prediction markets. But, I mean, if you look around it, like, the Justice Department is going after, you know, baseball players for rigging, gambling, and baseball, like, no one, there's no appetite for legal insider trading in most of the markets that, you know, will be big money in prediction markets. So I think that the regulatory

situation is kind of going to shake out that insider trading is kind of prohibited. But, maybe a little harder to monitor than it is in the stock market. But definitely, philosophically, people in this market don't want that. Do you think we just need a, like, a big, like, bombshell case or story to sort of, like, catalyze some action around that? Because it feels like, you know, sports books have existed for a long time. So I'm interested in understanding, like, what would actually change? Because for, what, like, I don't know, 50 years, it's been, you know, longer. For decades, it's been illegal or, you know, against the rules for a baseball player

to go and put a big, you know, bet against them and then throw the game. And so that should just, I would imagine that that framework just carries over to prediction markets, but maybe if it's lagging, then we won't actually get codified until there's a big headline case. Yeah, I think they're going to be more caught about in prediction markets, right? I think the prediction markets have rules saying you can't use Medicare on public information, whereas the sports books have those rules too, right? But, like, I think that it's going to be pretty codified like that, but, you know, you're going to have a lot of, like, the sports stuff, the sports leagues have a real interest in policing

and, you know, the Justice Department has a real interest, and, you know, that's a sexy case to bring if you're, like, you know, arresting baseball players. you know, people betting on, like, you know, Google search results maybe is a little bit less interesting and a little bit more lucrative. Yeah, that makes sense. And, like, also, we, like, live in a world where, like, fraud enforcement is just kind of less of a priority.

So, like, people will definitely get away with stuff in the next few months. Yeah. How did you process Trump saying he, quote, would consider eliminating taxes on gambling winnings? Is this just him joking around or something? Yeah, it was kind of offhand, but then the nature of the internet today is you have like 100 accounts on X that are like pseudo news wire accounts and they'll take one line out of context and then blast it out and they'll get a bunch of engagement. And then you realize, you know, you look to like an actual credible news source and you realize that, you know, again, fully taken out of context.

But do you think we should be incentivizing gambling in the country? So a couple of things. One, no. Two, you know, like being the friend to crypto has paid big political dividends to him. And like if you're sort of looking around for what other like aggressive young male demographics you can appeal to, you might be like, oh, I'll give the gamblers what they want. And then the other thing is there is this weird situation where the tax bill maybe somewhat accidentally limited to detections of gambling law. So you can only deduct 90% of your gambling losses, which if you are a professional gambler is quite devastating. And one theory is that that has been very good for the prediction markets because there's an argument that if you, you know, are trading on prediction markets and you win some and lose someone and you win a 51% of your bets, you can deduct all of your losses.

Whereas if you're doing that on a sports book, you can deduct 90% of your losses. And so it's the difference between being profitable and unprofitable. As far as I know, that was sort of an accidental concept. consequence of all of this, but you could imagine a, you know, Trump, like, you know, Trump administration liking the prediction markets and wanting to send business their way. Yeah. I want to talk about the potential SpaceX IPO. A lot of people have been processing it in different ways. Some people were surprised this was happening, just given that SpaceX has thrived in the private markets and has plenty of access to capital and Elon has had a number of bad experiences in the public markets. I have a kind of working thesis that this could be a spite IPO. I think we're going to see a lot of IPOs next year.

And if you're raising a billion dollars, let's say, if you're going to float at like a $50 billion, you know, if you're a $50 billion a company and you only need to raise a billion dollars, you're not really threatened by IPO. But if you're a foundation model lab, such as Open AI that wants, or anthropic, that wants to raise tens of billions of dollars, it's very possible that a $1.5 trillion dollar SpaceX IPO could kind of like suck the oxygen out of the room is is uh you know i want you to kind of give us your take broadly

on it and and i'm curious if my tinfoil hat schizo theory has has any merit yeah i don't really know okay so first of all like i you know i read companies in my co-public next year all the time so i don't know i mean i assume it's true but like i'm not totally sure um to like one thing I've read is that the use of proceeds for this hypothetical $30 billion IPO is to put data centers in orbit and like you know this gets to your spite theory like in a world where there's you know $10 trillion of probably speaking AI CapEx needs like there's going to be competition for that and there's going to be like like SpaceX can kind of SpaceX has been able to raise as much money as it wants in the private market and, like, you know,

achieve a, you know, $800 billion valuation and, like, send rockets into space and be, like, a fairly capital-intensive company while staying private. But, like, if the next leg is, you know, they need tens of billions of dollars of AI-ish spending, then you might reach the limit in the private markets. And, yeah, you might reach the limit in the IPO market, too, right? Like, you might, like, there might just not be enough money to go around for all of these AI companies. And then I don't know why SpaceX is in the AI company category other than the data center.

So here's the other. It's like Elon Complex, right? Yeah, but the other theory is like there's a world where XAI could get rolled into SpaceX and taken public around the space data center narrative. And I think that there's a lot of people that would be excited about that narrative, even if other people in the space economy are saying, hey, space data centers will happen. But it's probably more like a 10-year timeline versus a three-to-four-year timeline.

Yeah, also like, I mean, I've read the, they're like looking at a $1.5 trillion dollar valuation on like $22 billion of revenue. Like it's all pretty, it's on a pretty deferred timeline. It's in orbit. It's in orbit. Yeah. You're not paying for like that year's earnings, right? So you need some sort of 10-year story to tell.

Yeah. But I mean, to be fair, it would be easier for, I mean, at least I believe it would be easier for SpaceX to acquire. XAI than Tesla to acquire XAI because of acquisition laws around a public company buying something big versus a private company buying something big. Does that sound roughly correct? Like would you handicap? Oh yeah, it sounds roughly correct. Although, I mean, Tesla has form of buying, you know, other Elon companies and you know, has moved to Texas in order to make it easier, right? Like, I don't think Tesla would have that much trouble buying.

But they would get sued, you know, if you do it in SpaceX. Well, I think part of the challenge is that Tesla shareholders might say, like, hey, we already have a really good AI team. We've been working on self-driving. Like, we don't need X-AI. We don't necessarily want to dilute ourselves, you know, whatever X-AI's current valuation is or whatever price it would come in at. So I just think that.

I guess. I just feel like the sort of standard. Tesla shale, their approach is, like, we're going to trust Elon's intuitions on these things. And, I mean, they bought, like, you know, solar company, right? Yeah, but there still was pushback, and that was, like, a much, I'm assuming that'd be one percent of the, that'd be one percent, like, solar city was like one point something billion, wasn't it? It wasn't like, it was much smaller. It wasn't like a hundred billion. Like, I'm assuming XAI has a lot of debt. There's a lot of equity.

It would be somewhat. It has the Twitter debt as well. No, yeah. It has a lot of debt rolled in. Well, speaking of debt, I mean, Netflix had to issue some debt for this Warner Brothers deal. I'm interested to know your, you're thinking around how the Warner Brothers process will go. Are we going to wind up in a quiet period for the rest of the year as we go into the holidays? Or do you think it'll be, you know, just as many headlines as there have been?

Where do you think it actually lands? What's the nature of the story? I don't know. It's been surprisingly quiet to me. I think that's weird that, that Paramount, first of all, launched a tender at the price that was rejected, right? Rather than saying, we're going to raise a few bucks and go to the shareholders, they launched at the price that the board said no to, and that they've said publicly that it's not their best in final offer. I know. What is the logic there? Is there any logic where that makes sense? Okay, so I think that where that makes sense is that it's not a real tender offer, right? Like they can't close a tender offer for reasons, including antitrust, but they clearly want to do a friendly deal with the board, right?

And so I think that saying very clearly we could give you an extra two bucks if you sign a friendly deal with us is a good way to get, you know, to the board and to try to strike a deal with the board. So I think that's the logic there. I don't know what the board is doing, right? I mean, I think the board likes the Netflix deal. I think that, I also think that, like, Paramount has two things going for it. One is that they think they've offered more money, or certainly they can offer more money. And then the other is they really think the Netflix deal is dead on sort of antitrust slash Trumpy reasons. And I don't know how that plays out, right?

Because that's a potentially year-long process, and presumably nobody wants to wait that long. But I think, like, there's some ability to wait a few weeks and see if, like, Trump says nasty or things about Netflix to try to pressure the board to come to a deal. I don't know. I'm surprised that there's been so little news, right? I mean, like, since Monday, like, no one, like,

I would have expected someone to raise their offer by now. That's a good point. Yeah. Hmm. What was your, have you formulated a take on the Open AI Netflix deal? We kind of landed on... I mean Disney deal. Sorry, yeah, Open AI Disney deal.

We sort of landed on it being like sort of an interesting way to create less commoditization in, you know, the AI application layer, the consumer chat experience. They all are starting to feel very similar. I don't know if you felt this way, but it feels like all the models are, you know, sort of at the same level. The benchmarks are pretty similar. Well, if you can get Spider-Man in one and not in the other, maybe that's a differentiator. Have you processed that deal similarly, or do you have a different frame of mind around it? I haven't thought that much about it, but that seems right to me, and it is like, you know,

it's like, you know, you think about, like, the Netflix Warner situation, right? like you have like you have like content distribution services and then they have like content libraries right and there's some combination of acquiring the content and making you know commercial deals with the content providers right like like here one possibility is that the AI chats are ultimately the next you know dumb entertainment channel right and so if you have the good properties in your dumb entertainment channel then like when people are like oh I want an AI to create a movie about me, I'll go to the one that has, like, the Disney characters, like, that, I don't know, that kind of makes sense, right? And it's like a, like, the thing that is striking to me is that, uh, the AI companies, like, talk about, like, this sort of fundamental reshaping of society and, you know, discovering super intelligence. And then, like, they're a little bit consumer entertainment products, but, like, if you're a

consumer entertainment product, like, you want the Disney characters. Also adult, adult entertainment. Yeah. Yes, right. Yeah, it's a Disney character porn. It really has been just kitchen sink of messaging. Adult mode and Disney will be rolling out in the same, effectively, 30-day period. I don't know enough about the deal to know if they, like, have, I hope they have.

I hope they have a carve-out. They do have a carve-out. They do. This was confirmed. They did say that there are lots of restrictions on what you can and can't do with a Disney character in open-A-I property. I'm sure that was that was key it's wild um we're going to see the jail breaks that's going to be good there will be some jail breaks I think there won't be that many jail breaks I think in the last two years they've gotten pretty good at locking it down so that was that was kind of my

prediction uh I'm sure but I'm but there will always be chaotic stuff it's it's inevitable with AI the internet um what uh how should tech people be thinking about the growth of private credit. I feel like there was a, an era where folks in tech were, you know, understanding that the foundation model companies, anthropic, open AI were operating at a truly unprecedented scale. The capital war was bigger than Uber Lyft. It was bigger than anything folks in tech had seen. It was certainly more capital consumption consumptive than Google was when, before it IPOed. And so all of a sudden, by a lot. So all of a sudden, you have tech people. that are grappling with the prospect of a $10 billion debt financing for something that is, you know, feels like a startup. It feels like a startup project. And so it was easy to point the, to sound the alarm bells, like debt is coming. Debt is scary. Debt blew up the economy in 2008. It's going to happen again. But you talk to a lot of people in private credit and they say, no, there's plenty of areas where, you know, people pay their debt obligations on time.

How have you processed, like, is NVIDIA holding up the global economy? Is Open AI going to blow up the entire global economy? Those types of like Cassandra-esque narratives that have kind of spiraled and maybe are coming back down to Earth now. Yeah, I don't know. I mean, it's fascinating that, you know, like insurance companies investing in investment grade data are like ultimately underwriting like a stream of payments from startups right i mean kind of what is happening here deeply um deeply unprofitable deeply unprofitable startups

yeah but like also a lot of it is like people underwriting a stream of payments from facebook which like you know um uh is very profitable yeah like the blue out data center for for meta super intelligence one gigawad the hyperion thing like it's like meta. It's like meta is going to pay that bill. At least I think so. Right. And if you had made like an equity bet on like, if there had been a way to make an equity bet on like meta's pivot to the Metaverse, like you would have lost all your money. But like, like,

presumably they paid their supplier bills for that, right? No, totally. Like there's like a difference there. If you're like underwriting these like hyperscalors, like mostly, you know, these are very investment grade, very cash flowed companies that, you know, could turn off the cabbacks if they needed to.

But right, I mean, you're underwriting a lot of, you know, fixed payments on capex and uh it's it's um uh it seems a little irressive for a credit investor but um they're all like when the either private credit is like uh it's not going to blow up the economy like it's you know it's like insurance companies making these bets so like a little bit longer term capital yeah is there anything in the economy right now that gives you the same sort of jitters that you had during your famous interview with Sam Bankman-Fried, where it felt like

at the time you were clocking, like this just doesn't make sense. The math doesn't math. It feels like we're frothy, where everyone kind of goes around saying like, yeah, we're in a bubble. But at the same time, it feels like it's a bubble that's built on some real stuff. Even

the prediction market stuff, it's like, I can at least trace the cash flows. I might think that sports betting isn't the greatest thing, but at least I know that the businesses are going to make money. Right. Like, you know, AI sort of replaced crypto as the sort of darling of a lot of investors, but it's just you can, you can, the consumer product is very tangible, right? Like the crypto stuff is all like, oh, I'll make tokens that other people can trade for more tokens. And, and, like, it didn't, wait, that actually sounds like AI too. Because I make, I'm, I make

anthropic tokens. I sell them to you. You make cursory tokens. The circular, like, the circularity is, you know if you want to be troubled about the circularity it's like a little weird but it's um the difference between that and like crypto or no one like the thing about Sam Bankmanfried that was obvious at the time was that he didn't care about

crypto like oh yeah this is a world changing product it was like oh yeah this is a casino where people will give me money and like AI is there's a lot of people who are true believers in it and again they've like rolled out consumer products that Disney's going to license its characters right I mean like

there's a real um uh sort of there are many real obvious use cases and so like there's a lot of value being created and then the question is like is it commensurate with the you know 10 trillion dollars of debt that's paying incurred and that's uh it's not obvious but it's like you know there's there's something there's not how much how much would i have to how much would i have to pay you for you to agree to not use any AI for the next year um i'm kind of a lot i like i mean i use AI, but I'm assuming it's like for research here and there

of like better kind of search. Give us the prompt for your column. Give us the prompt. People pretty regularly email me. They're like, I asked chat GPT to write about this and the style of Matt Levine. It did pretty good. And they sent it to me and like,

okay, I'm safe for like other three months. Yep. It's like never. Never close. No, it just doesn't get the flavor or something. I don't know. The answer to your question is less you've been back i did for yeah yeah how have you been processing oracle over the last six months or so

they're getting zero credit for their backlog their five half a trillion dollar backlog uh i think they're are they trading at less than less than the backlog currently uh they you know people have brought up uh the dot com bubble and obviously are drawing comparisons between the two moments but what's your view uh about oracle being like not the darling of the a i don't i don't really know uh they're just not i don't i don't know enough about like oracle's backlog but i think they're not just you know they're not the name that the people go to as the alien a darling um i don't know the dot com bubble is like you know it seems like a reasonable comp in that it just feels like obviously even if there's a huge shakeout there will be huge value you know there'll be an Amazon of this bubble right like there'll be big important survivors of it which you know again like I can't say wasn't true of crypto but like there's nothing inevitable about that in crypto right like that was you know like there's there's there's the possibility of nothing

happening there whereas here it's like like the changes to the economy and the society are kind of already tangible the thing that's somewhat of a narrative violation is the like the median crypto fund has actually done pretty well over the last few years and it's possible that the median venture fund AI focus it is very much like dot com boom it's like you got to be in google or amazon or you're probably in a lot of trouble and and and with crypto they were a lot because it's so liquid there are so many funds that were like trading in and out even if something went way down it's like well they already distributed they got out early like you know there's tons of ways to make money yeah i don't know one one uh one one kind of random question um your workflow i'm assuming

people email you kind of like tips tips all the time that are really trying to like feed you information on on their enemies things like that how do you kind of uh I'm not an investigative reporter, and so, like, I don't, I'm not that useful for that. But, yeah, people are like, you should read about this. But how do you, yeah, what's your process? What's your process for trying to figure out what of that is, like, actually real? Because, I mean, we, we get that where people are trying to, like, convince us of certain narratives and we're trying to process, you know, maybe off air and trying to process how real something actually is.

you know again I don't like do a lot of investigative stuff so if people are like oh look into this secret thing I'm like no so like they you know like if I'm if they're sending me information about their enemies it's like here's their 8k filings and I can read them myself and I do try not to I used to like find it flattering when like you know big finance people were like let me tell you about this and then I was like they're just shopping me their version and so I try not to yeah sure Try not to either have those conversations or if, like, I have conversations with the Hedgeman manager about how their position is so good. I just don't write about it because I don't, I, it's, like, too easy to be, to be flattered and persuaded into thinking that what they say is, right? And so, like, I just try not to expose myself too very much.

That's good. Yeah. Like, I just try to, you know, like, people are like, oh, this is an interesting thing. Like, okay, send me the public documents and I'll read them and I'll make my own. on lots about it. There's a balance. Somewhat related question. You have to get some information from people,

but I try not to be hearing their opinions. Somewhat related question. What is your theory on why Bloomberg is able to retain top journalistic talent? They've seen very little churn over the last couple of years relative to other legacy outlets. What's going on? What's the secret sauce?

I mean, there's a lot of things. Like, we have a great audience. Like, the audience is so good. Like, it's so, you know, there's like the feedback that I get. from readers it's like they're so smart like it's it's so concentrated in the financial industry so like the audience is so good um it's the best business model in media like we're a good stable profitable company in a world where that is not true a lot of legacy media um and uh i mean and you know

and there's a flywheel where like your colleagues are great like i really like i wouldn't leave Bloomberg just because my friends are all here yeah and then the other thing is like it is a huge huge organization that nonetheless gives people a lot of freedom to do weird stuff. Like, what I do, like, I've been doing this for like 10 years, and, you know, if I tried to do it at, like, another media organization, they would have various statistic objections. I'd say, are you sure you can do it this way? Like, I feel like I proved out the model, and so Bloomberg just lets me do it. But, like, Bloomberg does that a lot, right? I mean, like, Oddlots just had its 10th anniversary party this weekend.

Like, Oddlott's is a weird. Overnight success. Yeah, it's like a program that just, you know, like a lot of people in media would have been like, well, that won't work, and Bloomberg's let them do it, right? So there's a lot of stuff like that where it's a huge organization that also is like quite experimental. Like, yeah, and like gives people a lot of freedom. That's really cool.

Yeah, that's a great. That's a great take. Well, thank you so much for taking the time to come. Yeah, thanks for having this was fun. Really enjoyed. Yeah, this is very educational. letting us bounce our theories off you. Yeah.

Well, have a great rest of the year. Have a great rest of the day. And we will talk to you soon. Thank you, sir. Cheers, Matt. Goodbye. Finn.a.I. It's the number one AI agent for customer service.

Automate the most complex customer queries on every channel with fin. com. Our next guest is Mike Gallagher from Palantir. He's the head of the Fed. I don't know if that one's going to stick but hopefully he's here Welcome to the stream Merry Christmas

How are you doing? Do you have some Christmas music for Mike Gallagher? Thank you How are you doing? I'm good. How are you guys? What's the nickname, the Gallaginator? That didn't stick. No, that one's not sticking.

Have you had any nicknames throughout your career Throughout your life? Mostly just Gallagher. Yeah. G money for a while. G money. Yeah. I think that's it. Mixmaster Mike G.

Was that on the hell? What's that? Was that on the hell? Gee, no, that was like high school of college. I imagine. Yeah. Yeah, exactly. That sounds like high school name, not necessarily one in Congress.

But anyway, it's great to catch up with you. I hope you've been having a wonderful year. It seems like Palantir's been on a tear. I'd love for you to take us through the news today and kind of get us up to speed on what's happening in shipbuilding. specifically, and then I'm sure we can zoom out and talk about shipbuilding more broadly and geopolitics and competition. Well, I wonder if we couldn't reverse it. I think it's important to make the geopolitical case first of all, you guys seem to be crushing

it as well. I see you everywhere. I have like merch in my office now. All my friends are constantly on your show. So congratulations on all your success and taking over the world. It's very cool to see. Thanks for coming on. early in helping us.

Hey, it was huge. Hey, listen, some call it the Gallagher bump, you know, that you've now, you're now a beneficiary of. Gallaginator bump. The Gallaginator bomb, the G-Money bomb. Anyway, geopolitically. Yeah, that's right. My entire, like, eight years in Congress was devoted to this question of how do we enhance deterrence

with respect to China. And if you look at it, like, there are things we do in the short term, you know, killer robots, a lot of the stuff, Anderoles building. you know, long-range precision fires. But over the long term, if you just look at a map of the Pacific, we need a bigger Navy, right? We had a four-structure assessment that called for a 355-ship Navy when I was a freshman member of Congress in 2017. We made it the official policy of the United States to get to a 35-ship Navy as quickly as possible, as quickly as practically possible was the language. And then the size of our fleet continued to shrink. It's on track to bottom-out at

279 ships in 2027, which happens to be the year that Xi Jinping has set for having his military ready to invade Taiwan should he make the decision to move. So if for no other reason that if you look at geopolitics in the most fundamental sense, the collision of geography and politics, we need a larger navy to preserve the peace. We need to start cranking out ships. We need the high-low mix of ships. Now, the reason we haven't been able to do that, I think, combination of factors, right? We have had an inconsistent demand signal from previous administrations, and that's usually what the shipyards say. It's like, we don't know the right mix of ships that the Navy wants to build. You have inconsistent budgeting from Congress, right? I mean,

we go from omnibus bills to big, beautiful bills, to continuing resolutions. Continuing resolutions are particularly destructive for the Navy. A former sector of the Navy said because of continuing resolutions, the Navy put about $5 billion in a trash can and lit it on fire. All of this is to say is we were trying to figure out. What are the dynamics that causes that waste? Yeah, the biggest issue is under a continuing resolution, you basically agree to fund a previous year's levels. You can't have new starts, right? You can't fund new things, whether it's a new ship class or a new innovative of AI program or a new, you know, robot that, you know, scares the hell out of Xi Jinping, right? And then there's just also a lot of uncertainty hanging over a CR, the usually short-term,

hard to do long-term planning. There's this other phenomenon where the military actually, because of how messed up congressional budgeting is, the Pentagon fails to spend about $15 billion a year. So think about that. For the last 10-ish years, we've lost about $125 billion in defense. appropriations, money that was appropriated for defense that went unspent, it goes back to the treasury, it sits in abeyance for five years, and then it evaporates. Like, that's, for $125 billion, like, I could build you a regional military that could definitively prevent World War III.

If I was unrestricted in how I could use that money and how quickly I can move. All that is to say, certainly you could have prevented the decline in the Navy's, you know, number of ships, like you mentioned just a bit earlier. Exactly. I think there's another thing, right? We obviously went to war in the Middle East after 9-11. I was part of these wars. I deployed twice to Iraq. The Navy was largely the billpair for these wars. We had a large infusion of money into ground forces and overseas contingency operations. What we didn't spend money on was investing long-term in the future naval fleet and growing the size of that fleet as well as the mix of capabilities on various ship platforms. And then we had cost overruns in key programs, whether it's the Ford class carrier,

Columbia class submarine, you know, the constellation class, forget the littoral combat ship prior of that. So all that is to say for the first time and a long time now, in the Trump administration under the leadership of Secretary Phelan, the Navy is taking advantage of some money that was appropriated by Congress for non-traditional bets on leveraging AI and autonomy and applying to shipbuilding and bringing in Palantir in this specific case to turbocharge production in key shipyards, both public and private yards, and 100 key suppliers. So this is $448 million. Over two years, it's based on pilot work that we've already done at various shipyards and suppliers, the results of which have been incredibly promising at one shipyard.

we saved over 100, our 200 planning days, 20 planning days a week. You may ask yourself, there's only seven days in a week, but that's because there's four people who's full-time job it is. They spend 160 hours working on mandrolic processes. Now with our software, it takes 10 minutes. At another supplier process that used to took 200 hours for manufacturing bill of materials is now down to 12 seconds. So just by modernizing the underlying software, leveraging AI, it's our belief that we can

maximize production at the shipyards and then link the suppliers to the shipyards and all of that, what's called the maritime industrial base to the Navy itself. So key Navy officials in general and the Secretary of the Navy in particular can look at the maritime industrial base and understand what's going on in real time and make critical allocations decisions. Because a lot of what's happening at the yards, particularly the public yards, is just simple decisions about what do I buy now, what do I not buy now? And there's really no, like there's no, there's no, there's no source of truth to make a sophisticated judgment on that, and that's what causes us to waste money in time.

So this is all about maximizing production, getting more ships in the water, and ultimately fulfilling that geopolitical need for a bigger and more lethal Navy. Are there sailors that don't have boats right now, or are we going to recruit a bunch more sailors as we build out the physical boats in the Navy? I'm just wondering, because I imagine if you are an American citizen, you join the Navy, your dream is to be on a boat, and then they're like, oh, we're all out of them. You've got to stay on land. That's got to be depressing. But do you think there'll be a recruiting push for more Navy sailors as we build out our fleets? Or are these going to be autonomous boats? Are these support ships? How do we

think about the human side of the future of the American Navy? Sure. It's a great question. I mean, one thing we've seen in recent years was a full-on recruiting crisis that had little to do with the decline or the growth of the fleet and more to do with a lot of at the time it was in my opinion a misguided push for diversity equity and inclusion initiatives that were based on species political science that really turned off a lot of people we had a retention crisis as well the interesting thing is at least in most services that's starting to turn around i was just at the reagan national defense forum they released a survey every year and one thing that the survey results reveal is that the so-called Hegset reset is extremely popular among current service members,

which is important because that's the big recruiting pipeline. It's usually someone who is serving or recently served to tell someone else, yes, you should join the military and among veterans. So when it comes to things like gender neutral combat standards, you know, and some other changes, this is wildly popular. So the recruiting crisis has gotten better. I actually think over time it's not going to be a problem if we stay on that trend because, and this is the second part of your question, yes, more of our ships are going to be autonomous. They're still going to be destroyers that are complex manships. They're still going to be carriers. They're still going to be submarines are our biggest asymmetric naval advantage right now.

But increasingly, I think you're going to start to see a lot more autonomous vessels in the fleet, both autonomous surface vessels and undersea robots. And that's where you have, I think, as we've talked about before, I believe, what's most exciting about the current moment is you have so many people in your world, right, in the investing world that are willing to put capital into non-traditional defense tech startups that are building really cool capabilities for the Navy. And I think this is a really exciting moment for the non-traditional. So I think the defense industrial base is going to look a lot healthier four years from now where, you know, Palantir shouldn't be the last company to enter the S&M. P-500 as a defense technology company. We need five more companies like that. And so I actually think the companies that are building autonomous vessels that are building killer robots that are building long-range precision fires, you know, hypersonic missiles like Castellian in California. I think it's a great moment for all those companies. Yeah. Have you, I mean, it's hard to like pick a favorite branch of the military, but it feels like. Well, I'm Marine Corps. Obviously, it's the Marine Corps. Oh, yeah. I mean, it's not hard. It's not hard. It's not hard. Hit the gong for the Marines.

let's go we're not picking favorites but but uh but but i am i am super fascinated by this uh this palmer lucky line that he's been uh delivering a few times about uh he he wants america to be uh the world's not the world's police but the world's arms dealer and so the idea that that maybe you know if if he's if he's building something that can shoot down a drone that that goes in the hands of the Ukrainian service members and maybe America doesn't put boots on the ground in Ukraine but we do put you know equipment that can neutralize an attack for a Ukrainian soldier and so I'm wondering how that interfaces with the naval strategy in your mind are there are there do you think that are there already boats that we're going to be supplying to other allied navies we want to build up our own Navy but is there also an incentive to build up ally navies as well? And what role do you think the U.S. will ultimately play in that dynamic?

100%. Well, first of all, Palmer is at the leading edge, a lot of this stuff. And one thing that gives me hope is we look at this new Cold War with communist China. It's like I think our private sector leaders, Palmer's a great example of this. Yeah. Oh, do we lose you? Oh, no. A nation state.

What a coincidence. Wow, he starts mouthing off about near-peer competition. It gets immediately taken down. They get immediately taken down. Well, I'm right, we're under cyber attack very clearly. We thank you for bearing with us. Well, we have the moment I mentioned the Chinese Navy. It's crazy.

Okay, anyway, kick us back off. Well, I'll make simpler. I think it goes both ways, right? Like, we are seeing foreign shipbuilders, world-class foreign shipbuilders, like HD Hyundai with the Poundters had a longstanding partnership with. They represent, I think, 17% of the global tonnage that's built. And a lot of the work that we're now applying to American yards is built on some of the lessons we've learned in applying AI to Korean shipbuilding, Hanwa, et cetera, are trying to invest in America. Hanwa bought the Philly shipyard, and that's great. We need more shipyards.

We need that investment. That's sort of, and they're going to have, you know, American subsidiaries that are doing important work. So that's one thing. And then on the other hand, and I think maybe the August agreement, this was the arrangement we had to provide nuclear submarine technology to the Aussies. And is an example where we can take what we're best at, i.e. building nuclear submarines and share it with our closest allies and get more interoperable vessels west of the international dateline to enhance our collective combat power. I think this gets to a broader issue, really the promise of August and a promise of a lot of our alliances in the Indo-Pacific is that we can start to build out something resembling a free world technological industrial base where humans with appropriate clearances, technology can float seamlessly between the borders of countries that we truly trust. And then if you layer on geography and you look at, OK, Taiwan, the first island chain, the second island chain, we need countries, including treaty. allies like Japan to invest more in their military. There we have a really positive story in

terms of Japan, what's happening in terms of their investment in asymmetric capability. It's probably one of the best developments for deterrence in the last 20 years in the region. So the answer is, yes, all of the above. We need to be, we need to have a more coherent foreign military sale process where we can provide our best technology and our companies can sell around the world and we make it easy for them. But we also want to leverage areas where our allies, might have key capabilities either to invest here in America or we can fight as a team. And that's where a different sector, what Palantir does with our Maven smart system. You know, we are the solution for joint all domain command and control.

This is how you see the battlefield, how you see the enemy, how you see yourself. We obviously want us to have a similar, if not identical picture when we're thinking about how do we fight China with the Aussies, with the Japanese, and with other key allies. We have to fight as a team in order to enhance deterrence on a timeline that's actually relevant. Makes it sense. Jordy, anything else? Not sure how much you can comment or riff, but what should people be paying attention to

in regards to Venezuela as a casual geopolitical spectator? I saw that video floating out that very clearly at the top it said unclassified or declassified. I didn't want to read too much into why it was immediately you know, look like seals, you know, taking over, but what should people be kind of paying attention to on that front? Well, you know, it's almost similar in my mind to some of the recent naval operations we saw

relative to the Houthi Rebels in CENTCOM. You know, I started this conversation off laying out the challenges we've had with shipbuilding. That being said, what are recent operations in the Middle East and what our current operations in Southcom and in Western Hemisphere demonstrate is that we are still the world. world's best military far in a way. And we have capabilities that nobody else has. Now, that should not be a cause for complacency. Like, we need to build off that. We need to keep investing more in the military. But like our sailors, our soldiers, our airmen and Marines, like when you give them a mission and a difficult job to do, like they will get it done. And if you are

an enemy of the United States, like you should be on notice. When we have presidential leadership combined with military professionalism, there's almost no limits to what we can achieve. And so I welcome a renewed focus on our own hemisphere when it particularly, particularly where it intersects with Chinese and Russian influence our own hemisphere. That being said, what I'm most concerned about over the next five years and beyond is what is the conventional balance of power in the Indo-Pacific region. Because what I've been saying now for a decade is that Xi Jinping is serious when he talks about taking Taiwan by force and all these operations, whether in the Middle East or whether they're in, you know, off the shores of Venezuela or in the Caribbean,

will look like child's play compared with a major naval war with China over Taiwan. The scale is almost hard for us to imagine because we just haven't fought a war on that scale since World War II, really since the Battle of Lady Gulf in World War II. We haven't seen something of that scale. And I think one of the disadvantages, I almost hate to call it that we have, is that in a republic like ours, and a democracy like ours, we're very sensitive to casualties, rightly so. We have an all-voluntary military. We don't want to spend lives uselessly, right?

I mean, the American people won't stand up for that. In a dictatorship, in a Marxist-Leninist system like that in China, I don't think Xi Jinping cares if he loses 10,000, 20,000, 50,000, 50,000 PLA soldiers to achieve his lifelong ambition. This is actually a lesson that endures from the last time we fought the communists on the battlefields of Korea, on the Korean Peninsula. They were just far less sensitive to casualties. So I only bring that up to say there are certainly lessons that are relevant across the world,

but there are certain things peculiar to the nature of the adversary we faced in China that I don't think it is, that I think makes it a much harder problem to deal with than Venezuela, if that makes sense. Yeah, completely. What's up with the gong? Can I ask about the gong? Is that, you know, can I guess. a Gallagher gong? Of course. A galagong. There we go.

The gong is usually a celebration of funding rounds, big numbers, milestones. Chip OS. Yeah. This is a, this is obviously a massive deal. And so totally gong worthy. And the Packers beat the bears. So there we have a lot to celebrate. You know, there's a lot going on. A lot of numbers. And we should ring the gong every day that Xi Jinping doesn't invade Taiwan because that sounds terrible. don't want that to happen. And you just delivered a very chilling, you know, potential sci-fi future where that doesn't happen and it's miserable. But thank you for everything you're doing to stop that from happening because I very much want peace in the world and in the Indo-Pacom region. And, of course, you and the rest of the team over here. Working very hard on that. So thank you so much

for taking the time to come and tat with us. Thank you guys. Merry Christmas. Peace, peace on earth. Peace on earth. See you. Up next, turbopuffer, serverless vector, and full-text search, built from first principles on object storage, fast, 10x cheaper, and extremely scalable. We have Sager and Jetti, the co-host of Breaking Points with Crystal and Sager. Obviously, the reallignment podcast, the second time on the show. He's also a girl dad.

Welcome to the show. How are you doing? Looking sharp. Good to see you. Good to see you. How's the family? Merry Christmas. How's the holidays?

Thank you. Merry Christmas to you all. Family's doing well. That's great. She's old enough that we've got her pigtails going. This is true girl dad. Yeah, it's as good as it gets. Yeah, that's amazing.

Well, I'm glad that that's going well because it seems like everything else on your timeline is not going well. What is, if you had to pick one to snap your fingers and eliminate, would it be, you know, rising energy prices from AI data centers or sports betting at the touch of everyone's finger all over the world? impossible question. Very tough. Because one is going to be a future. Wait, wait, before you say, is it okay if I bet on this? I'm sure somebody already out there. There's going to be a market that's going to exist in terms of which one that I would pick.

I don't know. Both are going to be very financially draining to the American household. Sports betting in the immediate term would probably be the one that would ban immediately. But power use in the future. Well, what was that reason? There's a recent, there's a, I saw a study floating around that, uh, in states that sports gambling was legalized, like the average credit score drops like, yeah, 10 points or somewhere in that range.

So it has like effect, effectively, like direct impact on. Do you think that sports betting is something that will come for us all? Because I, I, that the odd thing is that I have, uh, you know, John and I, like, some weird genetic, like immunity, because we went to Vegas for. F1 and didn't gamble at all. I have zero interest in gambling. I don't have the bug or something. It just doesn't do anything for me. If I sit down and actually stresses me out. Yes. I'll tell you why it comes for us all. Okay. Even when if you casually watch sports, casually watch the NFL. I don't sports bet. I think sports betting is bad. I still know the

line on every game. So in a way, because that's how you know who's because that's how I'm not. No, I'm like, oh, well, so and so is the favorite or the over under on how many yards somebody is going to throw. I shouldn't know that. People shouldn't know, but I do. Even just casually, you know, the last time I was on here, I talked about how I think that there's a media bubble in sports because I think sports gambling is just pumping all these money into people with microphones who talk about sports. But that's part of the issue is in all mainstream sports coverage from ESPN, part in my take, everywhere you go, a daily segment is I like the over, I like the under. Here you're going to take the first half. And so even if you don't bet, you can't help but think about

the sport without thinking in sports betting terms. And that's what I would say is like frame domination, you know, where even for people who don't bet, they have to think in betting terms. So that's a winning, that's winning in their part. Yeah, maybe I have a weird, like a weird perception of it because I also don't watch sports. I really, I really, I watch like movies a little bit. But, but there's no, there's no sports that I follow like regularly. And so I'm like, I'm not even getting into the top of the funnel for this stuff. And so it's really, really hard to ladder me down and so I'm a little bit more so of course you were excited to hear that Trump

would consider eliminating taxes on gambling. This must have been well, okay, let's talk about this though guys because he said gambling winnings gambling winnings and what I was crashing out about was there are no winning gamblers. It doesn't exist. There's a longitudinal study

of sports betters. Only 4% of people over five years ever took profit. Four percent. So it is a skill of the 4%. Let's be in the 4%. You're telling me there's a 4% chance that I could be one of the greatest gamblers ever. I love those odds.

I'll take them all day. It does exist. I got the over on me becoming a generational gambler. I will tell you, if I had to bet, I would bet on both of you. But statistically, it would be a bad bet. And so the reason I was crashing out is because that is going to give advertising to casinos and sports betting apps who are like, all your winnings are.

tax-free. There are no winnings. The winnings are fake. Ninety-six percent of you are losers. And all it will do is it will increase that funnel of people who may not previously have sports. We're like, it's tax-free winning. I mean, I can't lose, right, except I'm going to lose. So I think it's really disgusting, basically just giving away. Well, we don't know it's going yet. It was an off-hand comment, and hopefully it doesn't go anywhere. Well, since you're the resident Puritan on this show, I mean, do you believe that you can drink responsibly? You can have a glass of wine every once in a while.

Obviously, you don't want to become an alcoholic. Can you ever responsibly sports bet? Like Super Bowl squares? Super Bowl squares. That was the only thing that I ever did in college was I was in an office setting, and they said, hey, there's squares. You put down $10, whoever gets the right square gets a hundred bucks or something. I have never said people can't responsibly sports bet,

but what I want to highlight is that responsible sports betting would put all these companies out of business. They literally cannot operate without addicts. Like what I'm trying to highlight for everybody is responsible sports betting would end the industry. As we know it, the vast majority of the profit comes from a very small percentage of the customers, which is why, look, this is the casino model, right?

The whales are the ones who fuel everything, and they lose the most. So that's why they shower these people with gifts and they call them every day and they invite them to games and then send them to concerts and all this stuff is specifically to milk them for as much money as humanly possible. Basically, a sales, SDR that calls you with like a custom parlay for your specific, oh, I know you like this player.

And I know you love betting on the coin flip. So we're going to get you coin flip plus this player. What did you, what did you think about the policy, like an MBS policy in Saudi on like you've got to be in your bag to be getting, crack and open a cold one of the boys? So, I mean, in principle, I'm smiling a little bit. But no, I mean, because I lived in the Gulf guys, I can. explain this to you. That's just a way to target the Indian laborers, so I oppose it. So the way that it works over there is that they create this entire social structure so that all the Indian Pakistani and all these other laborers, like the day laborers, are basically excised from all

polite society. And they don't want them drinking, so they're just going to set an income cap to make sure that the foreign laborers don't get to have a drink as well as their own people. And it would just apply to like the wealthy white expats. So because I know that it's just basically going to further immiserate their like slave labor population, I do oppose it. But, you know, just broadly, you know, I just want to get to the fact, you know, from the gambling thing, like, there is no such thing as a gambling company that can operate profitably without, with responsible gambling. Like, if it literally would cease to exist.

And remember, because people always forget this, the sports betting apps, if you're actually good, they ban you. They literally do not allow you to place any large wagers. Or they limit you. They say we want you to be responsible here. No, no, no, no. They don't limit you because you're responsible. They limit you for being too terrible.

Yeah, I think Nate Silver is banned from sports betting. He is. Yeah, he's limited on all the major apps. My major question, when somebody tells me, they're like, oh, I'm pretty good. I'm like, oh, really? I'm like, have you ever been limited? And they're like, yeah, you're a loser then. I'm like, if you're any good, you would just be limited.

It means you're a statistical loser. Yeah. Well, you need like a complicated network of, you know, people that can make better. Shadow account. It's a whole thing. And, I mean, we were just talking to Matt Levine about this. Like, Susquehanna has a desk, like an actual trading arm of their firm. Like, it's very serious.

Like, the guys, some guys trade oil and gas. Now there's people that are trading, trading the, I can't name a sports team. Sports lines? The Yankees. Yeah. Anyway. Well, that's the thing. The real betters, they don't care about the sport at all.

They're just looking for value. They're like, they're always betting on, like, golf and tennis. Cricket. Yeah, this one is it, but 2 a.m., halfway, around the world, but it works for you, so you're going to play. But, but, I mean, in terms of, like, the actual politics of this, how does this, how does this wind up becoming, like, where does this go over the next four years? It seems like Trump's sort of, like, leaning in, but is this actually going to, is there a

constituency here of people that want to say, like, hey, maybe we need to rethink this at the national level? Well, already the tide is turning, guys. More recent Gallup polling showed that all age groups, including young people, the most increase, is against sports betting. the governor of Ohio, Mike DeWine, he actually said that if he could go back in time, he would never legalize sports betting knowing what he knows right now. I think people can feel it, man.

It's the most expensive advertising real estate in the world is all being bought by these gambling companies. You can intuitively feel that this is off. You know, nobody's getting rich if they're able to afford all of the stuff they're able to put in front of you. So I think America's beginning to turn. The Trump administration very recently, you know, you didn't let me crash out on what I'm crashing out the most on, which is weed.

But, you know, the Trump administration is making their vice play right now. You know, they're doing very badly with young voters. So they want to try and reschedule weed. And yeah, let's do some gambling winnings and the TikTok thing. It's like this libertarian kind of giveaway. But I think that really misunderstands why all of these younger people are even turning on the administration for economic reasons in the first place. The reason they resort to all of these horrible vice activities is because they cannot afford or at least feel they cannot afford. The very basics of life, like health insurance, being able to buy a house, crushing interest rates for a mortgage.

So I would spend more of my time on that rather than a cheap trick like weed, but, you know, that would require actually doing something. Maybe you get busted for weed. The arresting officer flips a coin. 50% chance you go to jail, 50% chance you get. Let's talk about another thing I'm sure you're thrilled about the Disney Open AI deal. I think it's incredibly bullish. for open AI. It's really good.

So I just, I want to get, I want you to agree with me first that it's bullish for open AI, at least over the next year, that they're going to have exclusive. Yes, yes, yes, yes, literally because, yes, literally because like, if you're a dad and your kid comes to you and says, like, I want to be in Frozen or I want to be in Star Wars, well, there's only one app that can deliver that. And even if nanobananas is a little bit better for today, it's like you'll go to Sora because it's there. Yeah.

Sure, it's bullish for users, for creating more users. I think it's one of the worst things that I've ever seen. I mean, last time I was on here on the show, I was like, Sam Altman is like, yeah, we're going to do AI porn. And I was like, oh, well, I thought you were going to cure cancer, but okay. And so now we're going to have Disney princesses to addict children, like you just said, so that daughters and, you know, others will come to their dads and say, can you create a video of Elsa doing, saying my name and doing this, this and this?

so that we're continuing to breed the phone addiction. And as you guys all know, we're also going to see the most disgusting pornography known to man as a result of the, yes, I know that they have controls and all that. They're going to be pretty good at shutting it down. No, they're not. No, they're not.

Have you guys been on SORA? Have you been on Sora or Grock or any of these? They're not that good at it, okay? People, people have been playing around with trying to create some pretty disgusting. John is a, is a little too confident that the, I'm pretty confident. I also had them generally. Yeah, I just think I don't,

the internet will always figure out a way to jail break anything. And they will always find a way. Earlier in the show, I went to Sora and I said, put me in a Sora video fighting Spider-Man and Darth Vader. Okay. And it said, this content may violate our guard rails, considering concerning similarity to third-party content.

So, whatever deal they announced, they haven't implemented it yet, because I got completely blocked. But I don't know. as I've scrolled, I don't scroll SORA that often, but as I've scrolled, I have not seen shocking stuff. I was reflecting with Jordi about some of the crazy, crazy stuff that was on the internet when I grew up. I mean, the stuff that people would send you a link to, you'd open it up, it would be like jump scare level. I feel like I have not gotten that from Chachapit randomly.

I have not gotten that. I think if you want to make the argument that, you know, this is so bad because it's going to get kids more addicted to devices and their phones. Like, you just got to go even further and say, like, well, we should ban all electronic devices for children or buy a ban. And maybe, maybe, maybe you're willing to go there. Speaking my language, brother. How do you, how do you feel about some of the, how do you feel about that new law in Australia that's, that's banning social media?

Yeah, I don't think it's going to create a bunch. You don't, but you don't think that. Why not put it on the parent? I mean, it's like there is plenty of evidence out there. There are plenty of access controls. You can set a passcode. You can, I mean, yes, like the really inventive 13-year-old can go out and make the money to buy the iPad and hide it under their bed every night. But, like, in general, parents do have the ability to, you know, effectively be the own authoritarian of their home.

Why do you need the government? Why do we need a nanny stuff? Yeah, my concern with these laws is... As you guys understand. Yeah, go ahead. Yeah, my main concern is if you tell a. group of young people like hey you can't use these apps there will be new apps create it's not hard to make a social media app and there'll be new like kind of homegrown wild west social media apps where

there's no right like the the the properties aren't doing any content moderation they don't have any groups that are trying to make sure that that that you know pedophiles are not able to get on etc etc so i think it'll just create a bunch of like dark corners of the internet that could very well be worse for kids. It's certainly possible, but to just answer the spirit of the question, which is basically like, why should parents not be the sole responsible ones for this? In the same way that social media only works when everybody's on it, not being on social media works best when nobody's on it. And so if you talk to Jonathan Haidt or others, what the best and most successful experiments for schools, for example, which are phone free, or people who are

opting out of social media, is being able to be in a social network where everyone, everybody else is also not on social media because one of the things that's often raised is like, oh, they're missing out on, I don't know, school drama or communication for this, this, and this. And they feel as if they're explicitly removed by the parent from like the social way that their high school or their social network operates, whereas by explicitly making it a top-down way of saying, no, nobody's engaged in it. It's going to facilitate a lot more actual like pro-social, real social behavior and make it easier in order to, look, at the end of the day, what we're trying to talk about.

And this is what I always argue with libertarians. Like, no, this idea of, like, a totally free society is ridiculous. Like, there are so many different ways in, like, you could act, quote, freely, which would impinge upon my freedom. That's why we have, you know, we have government and enforcement mechanisms. Ultimately, what we're trying to do on this is to decide what is the optimal way for our outcomes to facilitate happiness in the family unit and for our children. And there's just too much evidence here on social media and on phones.

So that's why I get with the SORA thing, especially in the totally unfettered, like, wild west that we live in here in the U.S. I just know this way that this is all going to go. In a perfect world where everybody is very informed. But, you know, right now, in a lot of ways, there's a huge class divide on phones. Like, from the very, very richest people you know are probably the least likely to actually give phones to their children. But the anxious generation might be the best-selling book in the United States. United States. But let's all be honest, like it's a class signifier, right? It's something that the top

25, 30 percent have read, are implementing, have the time to be able to. And then the iPad kid thing is still definitely not yet fully known, you know, for a lot of other people. And so I think everyone should try to live under a more uniform standard. And yeah, that's why broadly, I take your concern, dude, about Australia and, you know, like backwater ways to get around it. But the government's sending a signal and we have enough data on gambling on all other vices that when you send these signals especially with a real information campaign the behavior will reduce and there's a lot of different ways we can deal with the backdoor ways of getting around you never make anything zero how do we try to facilitate the best outcomes for everybody for all of our

citizens that's the way i would look at the australia policy have you ever thought of setting up uh you know breaking points uh you know one of these neo cities you know you know you go down to South America and set up your puritans. Oh, it's down to Honduras. Yeah, down to Honduras. No, I don't have enough money for that, right? I don't have nearly enough to buy off the president and then get imparting whenever he deals drugs.

That's not my bag. I'll leave that to a few of the other guests on your show. But no, look, I mean, at the end of the day, like, we have our country. We can just do it here. We don't need to leave. I think that the people probably feel that there's a problem. Yeah. No, no, no, that makes sense.

Let's talk about H-200s. NVIDIA is now able to export them to China. The previous rhetoric was we're not going to give China the best. We're not going to give them the second best. We're not even going to give them the third best. We're going to give them this Nerf to H-20 chip that's two generations behind, blah, blah, blah. Now we're giving them the second best effectively. The argument in favor seems to be keep the government out of the boardroom,

and Jensen is a founder of an American company. Let him sell everything. Again, to your point about the AI, it doesn't seem like you're doom-pilled. Is this nuclear weapons? No, it's AI slop. Let them have it. If Slop is so bad, don't you want our enemies to have a lot?

They're much smarter than us, and they're not going to allow any of that. They don't have any problems over there about SORA or about image generation. Do they really, though, do they have, like, incredibly high rates of youth unemployment? Are they not using the phone? to kind of medicate those people.

What are those 20% doing all day? Yeah, I mean, that's a great question. You know, is it phone-related social media? I'm not entirely sure. They don't seem to have the same issues, at least in our way. Obviously, they're going to have their own unique set of circumstances. But on age 200...

Imagine being one of these unemployed Chinese youth and having no job, but also no slop, no sports betting, no weed. What are you doing all day? You're getting shamed by your elders for not having a job. That's what we need. I suppose.

That's a good thing. Yeah, no, that's, that's great. Maybe you're studying, maybe you're practicing, maybe you're growing, you're studying the blade. You're studying the blade, yeah. Hopefully you're studying the blade.

Studying the blade. But anyway, sorry. Age 200. It seems like a wild reversal. You know, to say what your kind of articulation of the age 200 policy, it's more complicated.

And I've spent the last couple days interfacing with some of the guys, who are pro exporting h 200 i'll give their their argument their argument is to keep china on the u.s and nvedia technology tree as long as possible so what would happen according to them is if we cut off h 200 what it would mean is that wawaway would have the impetus and the incentive to not only compete but to have all of the developers in china and everybody there explicitly build the software everything on top of that right and so the argument that was posed to me was that it was a bad idea and a mistake to not have Android be very, to not have

Android and other operating systems that are explicitly U.S. base be dominant in China and that the domination of Harmony OS is actually bad for the United States. And here was my counter, and I'm really curious for what you guys think, is that in a world, as we see with Apple, where we see a huge portion of U.S. business, which is based in China, there has never been, at least in my opinion, over the last 25, 30 years since the PNTR with China, the reopening of trade relations, we have never had a situation where we have a huge business penetration in China, and that company ever really stands more for American interests. Usually what happens is that the Chinese use U.S. market penetration, like U.S.

company's market penetration, to make that company a lot more malleable to Chinese interests and to basically make them this multinational actor, which because of their ability, policy, scale, they can shape for their own interests and strategic, let's say, direction. So the point that I really am trying to make here is that I understand the technology tree argument entirely, but the longer that Jensen, NVIDIA, and others see China as this gold mine, which he obviously does, he's over there once a quarter kissing their ass on camera, you know, out in the open. Well, they have a, they have a dedicated like R&D Center in Shang. Yes. Right, but not it's not just that. he goes there and explicitly is like,

I want to continue to do in business in Beijing as long as possible. He's been lobbying for against a lot of these export controls. It's obvious that a lot of his stuff is getting trans-shipped via Singapore or whatever. Even the Blackwell chip. I'm sure you guys saw that very recently with the deep seek research that came out. But the point remains, he knows it's good for his business. The more that this remains kind of an opening, it's going to have somebody have to straddle both sides.

And it's going to be a lot more beneficial, I think, for the ability of the Chinese to shape him as opposed for us to be able to have our companies working in our national interests. And look, I mean, more libertarians are listening to the show would say our companies shouldn't even work towards our national interest. Their sole job is to make profit. I think that's a ridiculous argument, you know, sitting here in Washington. And especially just over the last 30 years, I just don't think that there is a good example from Hollywood to tech or anywhere else where they've made a lot of money in China and they become, you know, very reliant on that business line where they have not shaped themselves as lobbyists against

any more hawkish Chinese action. I think my read on it generally is that selling into China will make it more expensive for them to reduce their reliance on the USAI stack. They still will do everything that they can to reduce that reliance. Which they are. But yeah, it's going to be more expensive because there's clearly the Chinese companies in AI have a lot of demand for chips and, you know, dollars that they spend with Nvidia and other players are dollars that aren't going back into local, you know, kind of national

champion. I'm trying to think of the counter example. And all I can come up with is the Aramaz Birken bag. As we've exported the Aramaz Birken bag to China. Well, that's French. That's a French company, not the U.S. company. Right? So it's Western. But they have become dependent on it. And the more burkins that they buy, the harder it is to rip out the authentic Birken bag, much like the NVIDIA GPU, where the Kuta stack and the open source Kuda ecosystem has been built up around. No, I'm still somewhat sympathetic to the, you know, hooked on the AI stack. I get it. I just want to say, I don't think it's fully, I don't think it's wrong.

I think it misses the forest for the trees. They're looking at it purely from a technology question. I'm trying to point out the dangers of extent. this relationship. And also, look, let's look at the Chinese side. The Chinese were like, yeah, we may not even allow H-200 in the country because they want Huawei to compete. They want to create the market. Yeah, but I think they said that because of Lutnik's comments that they were very offended by, which he was like, we're trying to get them addicted. We're not going to give them our first, second, third, fourth, we're going to give them our fifth best. And they were like,

actually, we don't want any. And also, like, the country's not a monolith. Like, it's very clear that, like, even if the CCP says, like, absolutely not their band, like, there's still a world where like a Chinese company smuggles them in and uses them against the CCP's will. And like that could have a dynamic where that boosts the Kuta ecosystem further. Although I don't know why you'd be open sourcing

CUDA software if you're stealing Nvidia or smuggling Nvidia in. That's probably a good way to draw the ire of the CCP. But who knows, of course. We'll see how this plays out. I still think a lot of the reason why this HB

200 news is not so much of a firestorm is because this year has been somewhat of the end of the AI Dumer narrative. And just we've been backing off this idea that these are nuclear weapons. More and more people have been using the models for, I mean, Chachip is three years old now, opening eyes 10 years old now. And after three years of everyone saying, or all the wild crazy people in Silicon Valley saying, it's going to kill you next year. It's like, okay, boy who cried wolf, one, sky.

is falling the second year. Yeah, or it's going to kill you, kill you more slowly because of everyone falls in love. Yeah, yeah, it's become more abstract. And so I think there's this idea that like, oh, just like one more training run and then it's the super intelligence and it's run away and it's going to completely dominate and like it's either the United States or China. That narrative has kind of fallen by the wayside a little bit. And so I think people are maybe more, more accepting of, you know, export controls loosening.

My, my question is just like, like, do you agree? agree with me that it was a phenomenal L by the tech community to come out so early with this like AI is going to kill everyone narrative. That just feels like AI is the first technology that we've had since, you know, the phone, social media, software and the cloud, the internet. All of those were products that I feel like there were technologies that were enjoyed by people for years. And then we had the conversation about what are the phones doing to us?

But we got 10 years of like phones are cool. right and then we got okay maybe we should you know understand a hundred percent with AI it's like out of the gate we hate it that's why i'm i'm not yet ready to say like oh they stopped saying that i'm like no they still say it guys like Elon was on rogan the other day being like hey you know you're never even going to have to work again like don't worry about it and jensen what did he say it recently on rogan he's like all knowledge in the world will be AI and that's fine i was like um is it yeah i mean i was watching so i was watching sam altman on uh on fast And Fallon comes to him with the premise of like, give me the pros for chat GPT.

Give me some examples of how people can use it for good things. And then he's like, and I got to ask you about the cons. Like what are the cons of this technology? And I was like, no, no, no, no, if Tom Cruise was sitting there doing the interview and he's like, give me, give me the reason, give me some reasons why, you know, moviegoers might like the new top gun. And then he's like, now give me some reasons why people might hate the new. new top gun. Tom Cruise would be like, what are you doing? Like, no, I'm not talking to you about the

negatives of my movie. Get out of here. I'm here to promote my movie. And same thing with, you know, any technologist that goes through the normal late night circuit, normally it's like, oh, wow, you invented this new trinket. And you can buy it at the local Walmart this Christmas? Like, amazing. You made a gadget. And with AI, we just, it's always about the, like, the negative has just been so drilled. Well, that's because it's new. People don't. People don't. Yeah, that's what I'm Yeah, it's like you could write a story every day about violence that happens in grocery stores, right? But it would not, grocery stores have been around so long. It's everyone knows.

Every time you walk into a grocery store. There's not one guy who controls all grocery stores. So it's like, you know, it's a little different. And look, I mean, again, to their point, like Sam and them do themselves no favors. Like when he's like, I can't imagine raising a baby without chat GPT. Look, maybe just me. I'm like, whoa, man. I don't know.

again, it's just one of those where look, they sold domination of our lives, our not only in terms of our digital lives, but saying that they were going to take away our physical ability to work, education. They said we're going to take away all knowledge and we're

going to feed it back to you. So I'm still not ready to just be like, you're extrapolating. Oh, come on, man. He said all knowledge will be A.I. But you're sort of piecing together like three different statements, which is fine. Because that's how people perceive the tech industry. All Reddit, all Reddit will be AI.

There'll be one human on Reddit. Just running around and talking to it. That's the shit that they say, guys. They're like, you don't need to work anymore. What's is the, Dario? I mean, you guys are acting like this is three years ago. I'm talking about like three months ago. You know, all the comments I just made, I think, are literally all within the last month.

So they're continuing to feed the narrative. And I think people believe them. And I think that's the danger. Well, fear really sells to the capital markets. like if you're if you're somebody that has capital and somebody tells you that like all jobs are going to go away or huge half of all knowledge work what do you want to do with your money you want to give it to the guy who's going to take away the jobs right and so I think that is the challenge is these people are having to go around and give the optimistic vision one hour and then the next hour to the fear-based version of the story and then the next hour do the optimistic and but then the content just gets shared everywhere right so it's like then everybody sees it and they're like wait I don't really know what to believe at this point. Yeah, my, I mean, last time I was on the show, John, I have stolen your line

completely. Credit card. I thought it was the best comp that I've heard is you were like, I think this will be like the credit card. We just made transactions more frictionless. It created more wealth, people built on top of it. And in general, people's lives were like mostly better

and it didn't, you know, like horribly change anything, but it definitely was very valuable. I love that comparison. That's kind of the modal one that I'm They're just like leaks into all the different cracks. And I mean, there was data yesterday from our sponsor ramp that 55% of businesses are, they don't pay for AI. And that's like, and it's slowing down. It's like flatlining, too.

So it's sort of like a bombshell, like, okay, like there's a lot of businesses out there that are just like, I'm good. And it's like, they are good because they're using other products that probably have enough AI in them. And so if they're on a POS system. They're indirectly buying AI because they hired a creative agency. to make the logo and the creative agency to use the AI or whatever. Or their back end finance and all those. I totally agree

with you guys. But that also doesn't justify the valuations and that also doesn't justify, let's say. It might actually, it might justify the valuations. I think it doesn't, it doesn't justify the panic and the fear and it's going to kill everyone. It's like

if we're talking about the credit card, it is much more incremental. But of course, there are other sides because we have the social media angle, I agree that that's where it'll end up. I'm mostly with you, but I can't help but take them all a little bit seriously. I mean, these are the wealthiest, most powerful people in the world. So, like, when the wealthiest guy in the world says, I don't need to work anymore, and especially if you're walking out there and you feel very out of control of your own life,

and you hear that, you hear about the data center stuff that I've talked about here. You have a lot of fear about your own children and their addiction. You're watching their behavior. I mean, do you guys ever see your kids as, you know, like my daughter is seven months old, man. she's crawling for the phone. Like it starts so early. Like already, I'm like, oh, my God, I can't even use this thing in front of her.

That makes me concern. Does it make me a doomer? No, but it does make me a feel like it makes me immediately calculate some of the downsides of the use of technology in my life. But letting her go for that phone might be what gets her into the 4% of gamblers that wind up making money.

You got to start her young. You got to start her young. I forgot about that. You're right. Yeah. Is there an optimistic story being told by the cannabis industry about weed anymore? I feel like that one is just like, people are just like, yeah, okay, it's, it's not. Well, they're still faking medical benefits, which is complete bullshit. Explain that. Yeah, I mean, they're still talking about supposed medical benefits.

There's a huge new study that just came out in JAMA, almost all of the so-called medical benefits. Total BS. It's all fake. People just want to get high. It is what it is. Allegedly. Oh, you know, oh, somebody, you know, they're always talking about people with cancer. Oh, anxiety. Seizures, epilepsy. The anxiety one is the fakesest one out of all of them. But, yeah, I mean, they're always, you know, oh, it helps me sleep. And it's like, well, it knocks you out.

That doesn't mean it helps you sleep. But it's like, does alcohol help you sleep? No, it actually makes your sleep, you know, 10 times worse. You may not be, you know, awake. But that doesn't mean that you're asleep. You'll be happy to know. We were looking at a new studio space here in L.A., and it checked every single box.

There was a great space. But right across from it, you could see out the window, like a pot store. And I was like, no way. There's no, no, I just don't want to look at the flashing lights and the. There was another, there was another studio that we looked at where it was like the royal flesh of like gambling sin companies. It was like, but the previous three companies had been like an adult content, a weed company. And then also a gambling company.

And we were like, that is just a cursed building. It was like an amazing, amazing building. building we told our broker we're like sorry it's just like it has bad vibes like we can't possibly be there i totally agree oh john we should do debanking oh yeah yeah yeah tell me yeah this is so interesting guys so you guys know about the whole debanking you know andreason zuckerberg everybody goes operation choke point 2.0 operation choose point so the treasury the treasury department takes this seriously and they conducted a study and they just put out their report two days ago from the office of the comptroller and i was reading it this morning and it's like

oh they've unfairly targeted gun companies i was like okay you know that's bad they've untargeted unfairly targeted oil and gas i'm like oh that's esg we hate that they're like the banks have unfairly targeted the adult industry and i was like whoa whoa i was a hold on a second wait what what was that so they are actually pressuring the trump administration right now is pressuring via this report banks to do business with porn companies now why do the banks not want to do business with porn companies it's not just vice clauses it's because they're afraid of the internal standards that these companies have been doing now for decades, where they're often in violation of the law whenever it comes to children, exploitation,

all of this, and they don't want anything to do with that. That's why OnlyFans had that problem at one point. So our great, the debanking conversation is now basically being weaponized by the government to potentially force the largest financial institutions to do business with major porn companies. So that's why Jamie Diamond needs to run for president. He's like, I've had enough. If you twist my arm on this one, I'm going to get in the White House. Come on.

The idea he doesn't want to do business with the porn companies because he has a heart, like, get out of here, okay? Like, they're desperate to take their money. They just don't want their risk. I don't know about that. It's not that big of an industry. Jake Morgan is like trillion dollars. Come on. What was it?

2.2 billion from consumers in the U.S. just last year. It's not nothing, though, 2.2 billion. Yeah, what is that? That's only only fans. You're talking to AI. What are you, we had a guy on the show earlier who brokers big land deals, ranches. What do you think the odds are that breaking points a decade from now is just based on like a big ranch property in Montana and you're just yelling into the microphone? It's possible, man, you know, regenerative farming, just fully off the grid, except for Starlink, right?

I'll need Starlink to be able to zoom in to be able to do shows like. You'll be a bad idea. I put it at 55%. You want to make a market? Do you want to make a market on Kalshi? Yeah. What was Tarek's exact quote? By the way, Tarek, if you're listening,

I've been trying to get in touch with you, man. Please come on my show. But Tarek, what exactly do you say? He's like, our goal is to be able to create a market. Tarrick, on breaking points is like Sam going on Tucker. That was a lot. Hey, that was good for Sam, wasn't it? Because it showed that he was open to difficult.

conversations. So if he truly believes... No PR person in Silicon Valley believes that, but I actually do agree with you. I do think it was good. No, I mean, look, if you're going to live in a world where you're going to, you know, make all of these claims and you're going to have a high level of distrust already from the Democratic populace, then you're going to have to go out there and defend your business. I mean, all of the big tech companies have been doing that or had done that for a decade prior. I know that they all now think that that was bad. I totally disagree. I I think going on podcasts where you're just fluffing your product all the time makes you look even more disingenuous and you should come face hard questions.

But yeah, I mean, he said, we're going to make a market between every difference of opinion. And yeah, so look, Mr. Tarek, I would love to speak with you about why you think that's a good idea and vision for our future and some of the protections that you may have in place. John, did you read the prediction thing I sent you about the Russian map? I love this story. This just came out. So I actually used to be an intern there. It's called ISW, the Institute for the Study of War here in Washington.

What they do is they create battle maps. And so there was a polymarket market for like 1.3 million. That was trading on this particular map. That was trading on this map. And there was like a 33,000 percent payout if Russia seized a particular town in Ukraine on this date. And the story that's now come out is that the guy who worked at the think tank, altered the map specifically for that date so that the market would resolve in that 33,000% payout for that specific date of bet. And now the think tank has actually come out and said that they

fired that person and that he violated their internal principles by going in and editing this map beforehand. And it was a sizable enough market. We're not talking about one of these $5,000 ones. We're talking about $1.3 million. So I just want to highlight that, you know, just in terms of how these prediction markets and all that should work. I've been reliably told no realistically large market, even trades on anything degenerate. I can't think of anything more degenerate than betting on the fate of individual Ukrainian towns in a war of attrition.

The really dark, what if you just load, what if you just load a billion dollars into a world peace contract? Oh, right. And then everyone has an incentive to bring world peace. around. You're going to need a hell of a lot more than one billion. If you're going to shame me about 2.2 billion, you're going to need a shitload more than one billion. Yeah, maybe it's a trillion dollars. I do believe in the next

call it one to two years, and we'll see even darker markets, specifically around individual people. Like John was, John was joking offline yesterday. He's like, Jordy, I'm going to load a market that Jordy's going to have a, I'm going to put a million dollars into a market that Jordy's going to have an amazing year next year. He's going to bet on you. He's going to bet on me because he's my friend. He wants to bet on me. And what happens, somebody says, well, if I can make Jordani have a bad year, I can make

a lot of money. So there you go. Anyways, guys, the one I'm worried about the most is elections because, you know, now we have state, not just the national level. I don't think the national level will be as corruptible, but what I worry about the most is individual counties. and these markets already exist. So, I mean, come on.

Like, if you guys know anything about our election system, an individual clerk in an individual county, the ability to swing, let's say, a mayor's race, and people on Polymark already do these like parlay-esque style debate, you know, bets where they'll be like all ex-counties in the state will go for Trump or something just because they have a little bit better odds. These are massively open to manipulation, county-level races, mayoral, at the state representative level

there is just way too much a bill like the one I just gave you all is the classic example of somebody being able to manipulate just because it was based on a think tank map and they couldn't they never thought oh some guy making probably 25 grand a year who makes

the map isn't susceptible to a 1.3 million dollar market but I mean in a lot of cases our election infrastructure it relies on volunteers you know it's not even people who are paid So I'm very worried about stuff like that or individual primaries where there's not as much scrutiny. They, yeah, I mean, already we've seen the, there was the Google Insider.

Did you guys see that one? Well, I couldn't get to the bottom of that because what was weird was that that was published by one of the, one of the, one of the, I was like, why are they, why are they admitting to this? And it's like, no, they're not. They're bragging. And so I, I don't know, I don't know that I should even believe that it's real because it's so counterintuitive. you would, like, kind of self-snitch in that way. It was very, very bizarre, and I didn't see it, like, truly fact-checked, so I just kind of wrote it off as, like, who knows, just chaos on the timeline.

Right. I don't know. Anyway, thank you so much for coming on the show. Jordy, anything else? We can do this all day, but we'll have to have you back a couple weeks. What are you doing, anything that's fun this weekend? Let's lighten it up. Oh, not this way.

Oh, we're just, we're going shopping. Okay. Final Christmas. That's all it is. Merry Christmas. Let's play some Christmas music. Thank you so much for coming. Thank you guys for having me.

Love you guys. I love you guys. Love you, dude. I'll see you. Bye. Let me tell you about getbezzle.com. What a great way to go shopping for a luxury watch. You can shop over 26,000 luxury watches.

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You know, you can also put an eight sleep under the Christmas tree. EightSleep.com. How'd you do last night? Without exception. Fallacy faster. Sleep deeper. Wake up energy. I better have won.

Eight sleep last night. Eighty-seven. I got a 90. I got a 90. You're cooking the books. You're cooking the books. I'm not cooking the books. You're putting a bunch of weights.

You're putting a bunch of weights in the bed when you leave in the morning. No, no, no, no. No. Tyler loaded $10 into, no, John will have a good sleep. And so I had to do it to win the $10. I had hope everyone enjoyed the conversation with Sager. I think it's critically important that TVPN not just be an echo chamber of capitalism, libertarianism. And, you know, I think it's important to have an open dialogue.

You like an echo chamber? I love echo chambers. I love echo chambers. I mean, on the prediction markets, I feel like I disagree with every single one of his points. Okay. Like, elections, like, that's like, there's so much value in the information of, like, who people think is going to win. Yes. If you're a local business owner, there's a local election.

Yes. Like, there's, and maybe one of the candidates says, oh, we're going to do this tax. We're going to start, you know, change the regulation around billing certain types of buildings. There's so much value in knowing that. Yes, yes. Yes. Yes. Yes.

Yes. Seeing that six months in advance, even one month in advance, that is valuable. If he's saying that someone has the incentive to, like, actually mess with the election, I mean, that's, like, a felony. So, like, after one person, like, does he think that more people at the ISW are going to mess with the map? Yeah, I don't know. It's like, one, yeah, the first time it happens, it's bad. It's like, yeah, if there's economic incentives to meddle in local elections, like, yeah,

like, at the end of the day, there are laws. I don't know. I think, yeah, I would be much more worried about a normalized situation of the opposite where the insider trading, not changing the underlying outcome of reality based on a big market, but the opposite. Like, you know how the market will resolve, so you size up the market as much as possible. But we're clearly going to be grappling with both of these issues going forward. Sean in the chat says, lock me in the echo chamber. Never let me out.

That's amazing. Well, speaking of Sean, we got a post from Sean Frank here. He said, we are in the shop ads beta, and it has been great. Eric Suford has a story here. He says, Shopify is expanding shop campaigns with a new ad format that allows merchants to recommend products on other merchants' websites. So you're already in the checkout flow. You're buying a ridge wallet, and you see, would you like some Tocovas to go with that

rich wallet? That's basically what's happening. Very cool. David Sticklin says, tell me why you would want to encourage someone to click away from Ridge to another website after you paid to get them there. And I think the answer is that it's basically like an after sell post purchase. You have someone and you can cross sell. So you're not necessarily surfacing an ad that will take someone away from your checkout at the most valuable point. It's that. Yeah, the shop app, the way I use the shop app is for like tracking an order, right? And so if I'm in there and I bought something and then I get served something else that says like, hey, you bought this, you might like that. It's a pretty, it's just a valuable ad placement. I think it's pretty additive. Well, speaking of ads. Wander.com.

Here's an ad for Wander. com. Book of Wander with Inspiring Reviews, Hotline your happy place. Dreamy beds, top tier cleaning and 24-7 concier service is a vacation. Quinn had a post here. I've been seeing this lately. Meta has a special ad unit that they reserve for themselves. It's like a personal ad for the meta, Rayban, glasses.

I've gotten this actually multiple times this week. It's a fantastic placement. And what's notable is you actually have to hit the X to close it out. So if you just see it and scroll past it and you close the app and join again, it'll just be back there. So really one of the greatest ad units of all time. It's fantastic ad unit. Well done to the meta team.

And yeah, sometimes you've got to save. the best for the family. I mean, I would advise this to anyone who's starting a sunglass business. Get a few billion DAUs on a major social app so that you have effectively unlimited ad. Take it public. Yeah.

Have a bunch of cash flow from that and then invest that into the sunglasses. Yep. I mean, these, with this ad unit, like these, the glasses better move. I better see some big numbers. Yeah. Because everyone should be aware of these. this point but you know it is it is a good it is a good it is a good gift right it's a great

it's a kind of thing a lot of people wouldn't necessarily buy for themselves but they'll you know get some enjoyment out of it if if it's under if it's in a stocking flow over at lindy is highlighting max meyer's post asked about by the wall street journal weather spending 500 million renovating the fifth av Tiffany flagship Bernard Arnault replies, you cannot dream when you talk numbers. When you create desires, profits are a consequence. You need to be creating desire. That is one of the hardest lines of the 20th century. Ironically, the most profound business insight I've read this year makes sense that it would come from the biggest luxury company and industry that only exists because of its ability to create

desire, arguably the clearest distillation of the function of marketing. I have no idea if that can be applied to tech at all. I agree with flow that it is a profound business insight, but I think it should probably be used sparingly because I can imagine so many scenarios where an enterprise software CEO would go off and spend $500 million renovating an office and realize that it did not really move the needle for their business because what they are selling is not a Birkenback. Yeah. In other news, Lulu Lemon stock. hashtag Lulu. Surges over 12% after the company's CEO

says he's resigning. This is not as a manager, as an executive of a public company. You never want the stock to rip when you resign. I'm wondering if we get Chip back in the driver's seat.

He's been on kind of an activist, kind of a proxy fight. I would be interested to see what he would be able to pull off back in Speaking of other stock pops, this is insane. Google is about to turn a $900 million investment in SpaceX into $111 billion if the $1.5 trillion valuation materializes.

There are some crazy big tech circular deals. I'm pretty sure, didn't Jeff Bezos invest in Google? If he held, then he gets SpaceX stock as well, and it all goes back to Bezos, Hefe Boss. The final boss. The He's a final boss. The nominal determinism. Zeke in the chats is going,

Tyler Potter and the Echo Chamber of Secrets. I like that. We should actually build an echo chamber around your desk. A small echo chamber, just so that your own ideas and thoughts are just constantly reflecting back on you. It's very comforting to see these AI input names, sell-offs, says Bucco Capital Bloch, very unbubbly, confirms we are very much in a more rational,

discerning next phase of the AI buildout and adoption. I agree with that. It does feel like we, there was a world where going into the end of the year, we were talking about valuation as a function of tokens, or, you know, IPOing any company that could just throw a dot AI or, you know, throw an AI name on their company, and we've backed back. where it's from that abyss, fortunately, I think. So I've been happy. But yeah, you didn't have to have a dot AI domain. You just had to say, we're going to do something with AI at some point.

Yeah. You got a pretty big premium. Well, Chipotle rang the bell at the New York Stock Exchange, but they didn't hit the gong on TBPN yet. 4,000 restaurants. 4,000 restaurants. And we'll see. They're under intense pressure from Sweet.

green. Sweet green's putting 400 grams of protein in every bowl now, something like that. Can Chipotle turn it around? When Jordi Hay's back as a daily customer? I would love to find out. Maybe 2026 is the year. We'd love to see it. I'm still I love. I still love that in tech you have people that are like, well, like, I can predict out pretty well the next one to two years, but after 10 years, the way that we're accelerating, it's very hard to predict. Chipotle is like, in 10 years, we will add 300 new Chipotle locations in these key metros.

Yeah, things are more certain when you've been running business for a long time, I suppose. Well, in other financial news, Wealthfront raises $485 million in IPO, valuing it at $2.6 billion. Let's go. Let's go. Oh, my God. If the SpaceX IPO ticker is SCX, that will be. crazy, it probably will be. Spax would be better, though. I'm rooting for Spax. There's no way. Spax has terrible, no aura. I'm not saying I advocate for SEX, but I think that Elon will do that.

Can you just get dollar sign X? He likes X. Let's just do that. How about that? Anyway, what else is in the news? Is there anything else we should, we should cover? There's some, there's some news around, um, uh, substack. I guess substack changed their, uh, how you, how much you can read without installing the substack app. They're really pushing the substack app. Uh, gurgly orzos is, orzos is upset about this. He says, my paid subscribers cannot even read my email without installing the substack app. Eric Newcomber says WTF, uh, bullish for substack if they get everyone to install their app, obviously. Uh, D. like, yeah, and Max Child is there saying,

I was wondering if this was a growth hack, and Newcomer says for Substack, yeah, that's for their app, would be very interesting. I don't know if this affects us. You should subscribe, tbPN.com, you should drop your email, you get a free newsletter. We don't have a paid version. I don't know if this affects us.

We'll have to figure it out. We'll have to talk to brand. I'm sure it affects us. The newsletter's pretty long. And again, and so it's not sending the full thing in the email? Yeah, you continue reading in the app. which is just it's it is this this kind of decision it's right I like substack as a business but this decision is good for substack and it's not good for the reader and it's not good for the

the the person sending right I don't they could argue that it'll have a long-term benefit because people might be more engaged in the app they might be more likely but again when when you look at the data at least for us like 95% of readers are reading it in their email they're not reading into the Substack app yet. Substack wants to change that, but I can see why people will be frustrated here. And this is why the traditional email platforms have pushed back on substack and said, like, look, they want to become a social network. They want to, they want to build a garden. They're building a garden. Then they're going to put some walls up. Right now it looks like this beautiful garden. You can just come in. I mean, if they get the app cooking, they're going to put

ads in that thing, and they're going to print. It's going to be a great business. On the flip side, we are we are big fans of being in the big social media feeds like we we have not like we you know love x love instagram love youtube these are algorithmic platforms if there were to if substack were to become an algorithmic uh you know long post app basically like twitter with more words i think we would be the long trough yeah the long trough uh we would be okay with that I mean, we would certainly be the first ones because we have no paid subscribers. Yeah, but the whole premise of substack, and, you know, you look back at every, all the marketing materials is like, own your audience, have a direct relationship with your reader.

Don't be disintermediated by the platforms and sort of come out and make a product decision like this and you see where this goes. It feels at odds with everything that the company is built on. Yeah, yeah. I mean, at the end of the day, for me, it's about like, can our business? model flourish in the long form written text and whether it's delivered like there are a certain amount of people that read our newsletter in their email if we can get them all to read in the in the app like it's it's kind of six and one and half a dozen of another to me like it is

sort of neutral and the and the bull case is that by going into the app we our stuff can go more viral and we wind up getting more views on average per post but you live and die by the content just like we do on YouTube just just like we do on Instagram, just like we do on X, just like we do anywhere else, it would be a unique thing. And every time that a feed switches from, you know, subscriber enforced to ALGO, creators always hate it. This is what happened to YouTube. YouTube, the default homepage used to just be your subscriptions. And then people realize that you could just bomb the subscriptions feed with a million videos and you'd get tons of impressions.

And eventually they went ALGO feed and they show you a single video from Mr. Beast or whoever you're subscribed. to, maybe you're subscribed, maybe you're not, maybe they just know that you'll like it. And you could see that same thing happening with newsletters. You open up the Substag app and it says, hey, look, today, TVPN, put out a fantastic newsletter, here you go. Other days, it wasn't good, so we're not showing it to you. And that's weird because that's not the Substack model, that's not the email model. I think people would revolt.

But there is a world where being in that feed, being able to go viral within the Substack app is actually a net positive. It is a, it is, it's sort of a, it's like a Darwinian survival scenario. Like you really have to, you have to thrive, you have to fight it out. You have to, you have to earn every view, earn every impression.

But we'll see. What we will assess. Yeah, it is notable. I don't, I don't think Chris or Hamish have responded to any of the criticism. Maybe they're responding on subsubstance. stack. Maybe. Maybe. Maybe we should have been on the show. Debate it more. I don't know. It's interesting.

Anyway, that concludes our show for the day. Have a great weekend. Merry Christmas. Thank you for listening. Leave us five stars on Apple Podcasts and Spotify. And we will see you on Monday. And next week is Christmas week. You thought this week was Christmas week. We're just getting started. We're just getting started. We're just getting started. You're not going to be able to see us. There's going to be presents. We might be dressed up. Yes.

We might be interviewing public company CEOs while dressed up. You'll have to wait and see. We hope you have an incredible weekend. Thank you for being with us this week. We'll see you soon. Goodbye. Love you.