TBPN Live - Freedom 250 Recap with Bo Nickal, The Hand Anthropic Was Dealt, Fox Buys Roku | Bo Nickal, Gavin Baker, Leif Abraham, Aaron Ginn, Rafael Vivas

Episode Date: June 15, 2026

(00:57) - Freedom 250 Recap (04:43) - Bo Nickal, a former Penn State wrestling champion turned UFC middleweight fighter, recently secured a first-round knockout victory over Kyle Daukaus at UFC Freedom 250, held on the White House South Lawn. In the conversation, Nickal discusses his early awareness of the event, having known seven months prior that he would be on the card, which allowed him to prepare thoroughly. He reflects on the unique atmosphere of the fight, noting the supportive crowd reminiscent of his college wrestling days, and shares his plans to capitalize on the media attention post-fight, including a media tour and a trip to Japan. (14:11) - The Hand Anthropic Was Dealt (21:45) - Meta Tracks AI Usage (30:24) - Gavin Baker, Chief Investment Officer and Managing Partner at Atreides Management, is a seasoned investor with a background in technology and consumer sectors. In the transcript, he discusses the successful execution of SpaceX's IPO, highlighting the company's rapid ascent in the AI compute sector through strategic deals with Google and Anthropic, and emphasizes the importance of scaling terrestrial compute and the potential of orbital data centers to reduce infrastructure costs. (01:03:41) - Leif Abraham, co-CEO of Public.com, discusses the unprecedented retail investor interest in SpaceX's IPO, noting that nearly half of all stock purchases on their platform that day were for SpaceX, making it the most popular IPO they've ever seen. He highlights the challenges retail investors face in obtaining significant allocations during high-demand IPOs, as banks often prioritize their wealthier clients, resulting in limited shares for the general public. Abraham also addresses concerns about SpaceX's inclusion in major indices, emphasizing that Public.com offers direct indexing tools, allowing investors to customize their portfolios by excluding specific stocks like SpaceX if desired. (01:16:58) - Fox Buys Roku (01:28:31) - 𝕏 Timeline Reactions (01:46:44) - Aaron Ginn is the CEO and co-founder of Hydra Host, a company specializing in GPU management platforms for AI infrastructure. In the conversation, he discusses the challenges of regulating technology adoption, emphasizing the importance of empowering parents to educate their children on social media use rather than implementing total bans. He also highlights Hydra Host's recent $100 million Series A funding, which will be used to expand their software solutions for data centers, enabling them to become NEO clouds without owning physical GPUs. Additionally, Ginn addresses the global competition in AI, noting that China's rapid adoption of AI technologies may render U.S. export restrictions less effective. (02:00:19) - Rafael Vivas, General Manager of New Initiatives at AppLovin, discusses the company's evolution from struggling to raise venture capital to becoming a leading mobile ad platform valued at $180 billion. He highlights the vast and diverse mobile gaming market, emphasizing its significant growth and the increasing need for effective distribution strategies. Vivas also touches on the integration of AI in enhancing advertising algorithms and internal efficiencies, as well as the company's focus on expanding its e-commerce initiatives and maintaining customer retention through profitable advertising solutions. (02:16:13) - 𝕏 Timeline Reactions TBPN is made possible by:Ramp - https://ramp.comPublic - https://public.comCisco - https://www.cisco.comConsole - https://www.console.comCrowdStrike - https://www.crowdstrike.comFigma - https://www.figma.comMongoDB - https://www.mongodb.comNYSE - https://www.nyse.comRailway - https://railway.comShopify - https://www.shopify.comCodex - http://openAI.com/codexFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/tbpn/id1772360235https://www.youtube.com/@TBPNLive

watching TVPN. Today's Monday, June 15th, 2026. We are live from the TV panel. The Temple of Technology, the Fortress of Finance, the Capital de Capital. Let me tell you about ramp.com. Time is money. Save both. These is corporate cards, bill pay, accounting, and a whole lot more all in one place. The chat wants me to pronounce la Chauton, and it's going to be a fun day. Obviously, Mistral is in the news. Incredibly bullish for Mistral. Obviously, very unfortunate drama happening in the anthropic world. We'll go through all of that. But if the sovereign AI thesis could not get any stronger right now, this weekend really showed a lot of countries, hey, maybe we do want a national champion. Hey, maybe we do want someone that will provide us

models forever. We're also going to be going through SpaceX IPO. We have Gavin Baker joining in 30 minutes. And we're recapping UFC Freedom 250. It happened at the White House last night. take us through your reactions, introduce our first guest to the show. Okay, quick intro on the event overall. I am a UFC fan. Yes. It's one of the few sports, maybe the only sport, where I actually know the names of the people that are competing.

Our guest in just a few minutes is one of those people. Are you more of a fan of the UFC or more of a fan of the government? Because a lot of people were watching just because they're fans of the government and they said, oh, I will watch any, I watch C-SPAN all day long. I watch anything that happens if it involves the government. This was an interesting crossing. No, more seriously. As a UFC fan and as an American,

I'm excited for the UFC to do well. I'm excited for the fighters to have a platform. I was a little bit wary of this event overall just because the aesthetics of putting on this crazy part, party in this moment when there is a ton to black pill about. Yeah. Not after. Interest rates, wars, all this stuff going on.

And yeah, so war raging, gas prices are high, house prices are high, rates are going up. Yeah. What are we doing? Having a part of. A lot of people in America are not having a good time. And it really felt like a bread and circuses moment. Sure. But the bread and circuses, John, it worked on me.

Top notch. It worked on me. Some of the best ever. It was Why was it so good compared to a normal UFC event? Well, you didn't watch

so I guess it's I guess it's hard Was it the aesthetics or the actual Well so one The production value One the card Was absolutely stacked

It was eight fights Yeah No filler Yeah Wall to wall Really Really fights that had a lot of

They carried a lot of weight Right So like the The main Title fight Gae versus Ilya that changed both fighters' careers

like full stop right and even with Bo Nickel joining in just a few minutes you know Bo that was the biggest possible stage that any athlete could be on and especially in the UFC

at least here in America so anyways going into it I thought the aesthetics were bad I was excited to watch the fights turned out it was just really cool and sure there's still going to be people that are upset that the president and the admin is like platforming something like this

turned out to be really fun. It was a cool night and I think America kind of needed it. Yeah. A lot of people are saying it's not unprecedented because Teddy Roosevelt held a boxing match in the White House almost 100 years ago around that time and apparently he fought in the boxing match, which is crazy. Yeah, he was a big boxer.

He was a big boxer. Imagine. So this is like a light, a light craziness. Anyway. But anyways. Yeah. I, you know, the event was incredible.

And I came away thinking that big parties and sporting events are potentially the most underutilized political strategy. All right. I would actually expect the admin's like overall popularity to go up. approval rating to go up based on just on this event because there were so many iconic images. Funny enough, the most iconic image is of a Brazilian named Diego, Diego Lopez, which we had up on the screen there. Standing up on that. But anyways, really, really wild.

And let's bring in, let's bring in Bo. Let's bring in Bo Nicol. We've talked about it many times on the show. Welcome to the show. How are you doing, Bo? Doing great, guys. Thanks for having me on. Thank you so much for taking the time.

Long overdue. So, backstory here is Bo somehow was like one of the first 10,000 people to discover TBPN. You're an entrepreneur outside of the Octagon. And somehow you were in between camps or maybe during camps. You maybe saw a funny clip of a couple guys in suits. And yeah, I remember getting the notification like, Bo Nickel has followed you. And I was like, oh, who's this? Who's some troll like, pretending to be Bo Nickel?

It was you. And it was a funny. moment because yeah you know I probably hadn't even shared that I was a UFC fan on the show so first off congratulations I was a lot of a lot of the fights last night were high stakes and but but yours was the highest stakes because I was watching and I can't imagine what you were going through in the lead up to the fight but you you had a perfect performance and and it was really fun to watch wanted to first off ask what it was like leading up to this event, highest profile UFC event ever by far.

And I want to know what that was like. Yeah, it was pretty interesting. I think my experience was a little bit different than a lot of the fighters because I knew immediately after my last fight seven months ago that I was going to be on the card. You know, I think most guys didn't find out until, you know, probably 10, 12 weeks out. And, you know, I knew seven months that I was going to be on it.

So I started prepping immediately. And, yeah, it was just a lot of a lot more media, a lot more attention, a lot more buzz, tried to take advantage of that as best I could, you know, first and foremost by being prepared to whip ass. But secondly, just, you know, the opportunity with the, you know, viewership and stuff like that and maximizing that. But is that is, is that. knowing nine months out that you're going to be fighting like you know five feet from the president

on the white house lawn is that an advantage is that an advantage or a disadvantage because in some ways you're probably more locked in you know you're taking every moment more seriously but on the other side like i know i there's been moments where i know i'm going to be like doing public speaking right i don't really love public speaking uh and and and i and usually i'm thinking like i'd be nice to just get this over with but nine months out you know you're you don't you got it's a lot of time and like, I want to get in there. Yeah, it definitely goes in waves. Like, you know, there's certain times where you feel a little more stressed

than certain times you feel really relaxed. For me, it was just staying focused on the process, focused on my systems, refining everything that I do and improving every day. And I knew if I kept doing that for that period of time, that I'd just be as prepared as possible. So, you know, it really, like I said, riding those waves was big and just being able to, you know,

kind of stay, stay focused on the process and my systems and refiners rather than like thinking about this big moment 24-7. Was the crowd any different? Was the vibe in the stadium any different? Does that affect you during a fight? It was way different. To me, I come from a college wrestling background. So, you know, when you're competing in a home match,

you got 10, 20,000 people that love you, want you to win, right? And since transition into MMA, I've had like a little bit of mixed emotion. towards me. Some people love me. Some people hate me, which is, it's good for me at the end of the day, but this one definitely felt more like my college days, where it was a home match. I felt like everybody was on my side. President Trump was actually the way he was kind of positioned around the ring. It was like he was right next to my cornerman, so he was almost in my corner. And yeah, it was, sick. That's crazy. What about the prep? I saw folks doing walkouts from the Oval Office. Do you have enough space to sort of get in the right mindset?

Are you stuck in a trailer? What is your day of the fight like? Yeah, day of fights, I try to just keep it loose. They have your report a few hours early, but I'm just hanging out with my friends, everybody that's visiting and come watch me. And once you get in, you get warmed up, get your gloves on, get taped up.

And then what was really unique for this one is the walkout, being next to a Medal of Honor recipient, and another military member was just like, they were walking out with you. And so I showed up and the guy that I was next to, he like was just a total badass, older guy and was like, you ready to do this? And I'm like, hell yeah, let's go.

And so, you know, that just got me hyped up and just had to have fun with it. I feel like every UFC is a Super Bowl in some ways. It's the top every time. But this was a particularly special moment. Is, are you optimistic that the UFC will find other ways to sort of create even more special events in a calendar crowded with like special events that happen fairly regularly? Not necessarily, it's going to be 250 at the White House lawn, but you can imagine that there's just something that breaks through and goes into the mainstream media even bigger like this one day. I don't know. I don't know how you, I don't know how you go bigger.

I don't know. I don't either. In space on the moon? On a boat. I don't know. Top of the Eiffel Tower. Yeah, top of the aisle. Yeah, maybe.

Who knows? Who knows? They're going to figure out something. They always do. There's always something that comes along. But yeah, I mean, I was told this actually did more viewership than the Super Bowl, which doesn't surprise me. But, yeah, it was unbelievable.

I mean, they're going to figure something out. And I'm just going to keep getting better at fighting. So I focus on that and take care of business on my head. Where were you? Where were you watching Ilya Gae from? So what they did was they had us go back to the hotel, do media, and then they had a little room set up for us where we could have all of our families and stuff because post-fighted had the presser with all the winners,

and we had to wait until main event was over to do the presser. So they kind of set up a nice little area with food and stuff for us. But it was all the fighters in there together, and it was a pretty cool environment. It was insane. Yeah. That was John, John, given that he didn't watch, even though he was cheering for you in spirit.

No, it's okay that you're, it's okay that you're locked in. It's okay that you're probably meeting for techery. No, but I was explaining, like, to me, to me, that was the most, you know, the Gaichi, Ilya was the most insane UFC moment, you know, going in underdog. He's lost to a bunch of guys that,

that he's lost to multiple guys that that Toporia has you know wiped the floor with and for Gachi to do that in that moment just felt like what a way I mean I was I was just really happy for the guy one of those guys who's been on top and as an American UFC fan I bet I bet that fight created like a bunch of Gachis

and a bunch of and a bunch of Bo Nichols I love it I love it what is the next week, month the rest of the year look like for you now? Like, what does it like coming off of this? I texted Bo last night, like, so happy for you. You know, blah, blah, blah. You texted back in like 30 seconds.

Like, what are you doing right now? Like, I would have just thrown my phones. Yeah. I do like, yeah, post-fight for me, I probably take like a week or 10 days to do a little media tour just to kind of maximize that and, you know, do as much as I can. And it's kind of just like, you know, business.

I got a couple of things planning for this summer. Of course, a bunch of training. I'm going to take a two-week trip to Japan, see Japan, which is going to be dope. But, yeah, usually post-fight, like I said, try to, you know, take advantage of the media buzz and then, you know, maybe work a little bit on some of my businesses, things like that while I'm not, you know, directly preparing for a fight and a couple weeks for a vacay if I can slip that in. But, yeah, always staying busy.

You're going to Japan. anything we can do to get you to stop over in China and get in the ring with one of those humanoid robots. I want to see you clock it so hard. Yeah, we just explodes into a million pieces. Basically, all the humanoid companies, we need to create bow bench. And it's like, how long can you last? It was like 10 milliseconds. Yeah. No, easy money for me. I might break my hand on for that, but I'll destroy it for certain. Padded gloves or something. I don't know. Awesome. Well, so happy for you. Happy for you. Enjoy, enjoy the moment and come back on next time. Whenever you want to talk about some of your businesses. And yeah, we're very proud and, and yeah, enjoy the moment.

I'm honored to have you as a fan. Thank you so much. Let's do it. Thanks, guys. Appreciate y'all. We'll talk to you soon. Let me tell everybody on MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it. big topic over the UFC was the fact that Dario Amadee was not in attendance. He wasn't front row. Mark Zuckerberg was. And it sort of underscores this odd situation that Anthropics in where, like, they just

got dealt this weird hand where, like, they're doing so well. And the admin could not be more misaligned aesthetically with Anthropic. Their whole brand. Yeah, but the whole brand, the very, very different brand. And I was, I mean, I was, you know, I read the article yesterday that anthropic staff were going to Washington, D.C. And it was funny. Some people were like, oh, this is, you know, this is bad.

Like if it was, they could, if they could solve the issue easily, they could, they could do it over the phone. Not how this works. You always go. Seriously issue. Everybody goes. You know, yeah, you would obviously go. But going to Washington, D.C. to try to solve an issue on a Sunday, there was not a worse. They'll be here.

They'll be there. No, but you can imagine you land there. You're like, okay, like, where is everyone? Let's, let's, like, meet is a big issue. Let's meet and figure this out. This is important. The national security is on the line. Like, let's figure this out.

And they're like, where is everyone? And, like, if you take safety seriously, cybersecurity seriously, biosecurity seriously, export control seriously, like, UFC could not be less aligned with that, the stakes there. And so, like, there is this big gap between the administration and anthropic. And I think that everyone should, like every American should care about bridging this gap. Like private enterprises should be able to flourish in the United States.

Everyone agrees with that. And the government should be able to enact reasonable regulations to protect America's interests. And both of those need to find a way to play together. But there is just a really, really broad gap between these two organizations. And so everyone's hoping that things resolve quickly. And it seems like the right, you know, wheels are in motion. The flights have been booked or already. taken and things are moving along. But just a recap on the play-by-play. March 4th, Anthropic

received a Department of War supply chain risk letter that, of course, got rolled back eventually. April 7th was the Mythos preview announcement alongside Project Glass Wing. June 9th was the Fable 5 launch last Monday. Mythos with guardrails around cyber, bio, and AI research. And on June 12th, just five days after the end of the week, Fable 5 gets suspended after the Commerce Department issues, an export control directive. So Anthropic explained in a blog post that the U.S. government is restricting both Fable 5 and Mythos 5 from being used by any foreign national, whether inside or outside the U.S., including foreign

national anthropic employees. And so that's a huge compliance burden, very sudden, and that led Anthropic to completely suspend the use of those models for all users, not just foreign national employees because they need to, at least if they want to comply with this, do all the KYC, understand how different organizations are using the model, who at those organizations has access,

if something's being vended through an API and it's showing up in another product, does that product do all of the proper, you know, authorizations? And so it's a big wrench in the gears of the rollout of this model. Then the information reported that Andy Jassy, at Amazon had raised concerns with the senior administration officials about jailbreaking, the risk of jailbreaking fable, getting access to all of Anthropic. Anthropic countered in their blog post saying, quote, we reviewed a demonstration of this specific technique being used to identify a small number of previously known minor vulnerabilities.

These vulnerabilities all appear relatively simple, and we have found that other publicly available models are able to discover them as well without requiring a bypass. So they're saying this isn't that big of a jail break. This isn't that big of a deal. We can move forward safely. We've taken safety seriously But that is the debate that's going on between the admin and anthropic. So as everyone knows, the rollout of Fable 5 has been a bit rocky Incredible demos, incredible benchmarks, but offset by the odd decision to silently degrade the quality of answers related to frontier AI Development instead of just refusing the request like cyber and bio prompts, which that was the main thing that that everyone was really confused about, the actual rationale behind AI development refusal is pretty sound.

Like, people are upset about that if they're working on machine learning systems, recommender systems, anything that requires, you know, like instantiating an AI product, let alone if you're just, hey, I'm just doing open source AI research and I'd love to use the latest and greatest models to help me. Now it's not an option.

And, but at the same time, just think about the logic. If a model doesn't let you hack a system, just have the model build you an unrestricted model that does let you hack your system that system and so clearly in that scenario It makes sense to restrict if you want to restrict hacking or bio you also have to restrict the tool that makes the tool that hacks the system or develops the bioweapon in theory And so but the choice to do you know silently degrade Responses was not well received these are important issues and there's another timeline where AI leaders are cut from the same cloth as America's elected officials but we're in a world where Anthropic has to make their case for safety in an age of RSI during a UFC fight on the White House lawn. It's a very bizarre timeline, but here we are.

Most of the big tech CEOs, they have figured out how to work with the administration effectively, showing up to large dinners, photo ops, the occasional movie screening to make their case about hot topics. Many of these CEOs also have business relationships with Anthropic, either on the customer side or on the investor side. And that's what's really complicated about the Amazon relationship. Obviously, Amazon uses anthropic models, also is an investor in Anthropic, also provides compute to Anthropic. And so they have a very hairy, complex, circular relationship. And so that clouds the discussion over whether or not is Anthropic going to try and help Anthropic get through this? Are they doing everything above board?

At the same time, you know, people were sort of putting out that like, oh, did Amazon like spike the ball on this? And at the same time, if the government comes to you and asks, like, hey, you're a big tech company. You've been using this model a lot. You're close partner. You're close partner. Were you able to jailbreak it at all? And your security team just issued a report.

Like, yeah, we actually were able to just jailbreak it a little bit. Like, you're not going to withhold that from the government. You're going to turn that over. That's different than calling and saying, hey, I really think it's dangerous. You've got to put pressure on them. So there's this wide range of levels of interaction that can go both ways. You can be a lab partnered with a big tech company. That big tech company can have a really established.

government relations group that is actually helping you get through to the admin. On the flip side, you could have a big tech company that is competing with you or frustrated by your business and is actively trying to put their thumb on the scale the other way. So I'm sure we'll learn more in the future. Many of these CEOs have business relationships with Anthropics, so we'll see how all of this develops. And they're always renegotiating these contracts too, which makes. things more complex and they're competing across multiple markets. So expect the 4D chess to be on to be on full display all summer long in Washington. Anyway, UFC Anthropic, what else is going on?

Meta is doing a 180 according to Amir over at the information, trying to be the vanguard of token minimizing. I think the token maxing, token minimizing thing is so silly. Because do you know where maxing comes from, really? Like, it comes from gamer lingo usually. And adopted by looks maxing community. I don't know if looks maxing community was the first one. They certainly made it really go really viral. But they popularized, like, I feel like through,

yeah, effectively through Clavs clipping. Yeah. That language. The idea of, like, doing anything like, oh, I'm computer maxing today. Yeah. I mean, isn't it from like min maxing? Min maxing. And that's what I'm getting at.

Like, you shouldn't be token maxing or token mining. You should be token min maxing. And the idea of min maxing is when you're in a video game, you want to get the most resources for the lowest cost. So if you're playing League of Legends, you're going to put just the right amount of gold into this particular item or this particular stat point in an RPG. And you're going to try and find the optimal build based on your resources. You have confined resources. And somehow it feels like these tech and all these companies went through some sort of hallucinatory period where they lost sight of that they should always have been mid-maxing because that is the goal of business at all times in all things. Like you would never say like, oh yeah, we're ad maxing this quarter.

We're going to buy as many ads as possible. Oh, no, it didn't work. We spent way too much on ads. They were not effective. We need to admin spend as little as possible on marketing. It's like, no, you always want to be spending. you always want to be getting the most return on ad spend, the highest leverage output. Yeah.

There was, and again, unsubstantiated posts. Yes. But somebody was saying they talked to somebody of META, and there was one engineer that spent $90,000 in one day and was quickly terminated. Oh, really? Terminated within three days. So again, could just be entirely fake news, but it seems somewhat informed. The crazy thing is that is that like the less. from that will be... This guy's like, I'm not getting fired. I'm going to use AI more than anyone

else in the whole company. Rides loops. $90,000 bill. The, I mean, so, so the lesson that will be learned from that is, is don't spend $90,000 a day. But, like, the Super Bowl is for a marketer, the Super Bowl is spend $5 million in one day. And it works sometimes. And sometimes Super Bowl ads deliver $20 million for dollars. Yeah, but what do teams do when they run Super Bowl ads, right? We ran our Super Bowl ad. Yeah. We, we trained our, own model in order to, yeah, yeah. No, but we made sure that ours was ROI positive and we only

bought the ad in a small market and we did it before the game. We knew our audience was. And so for a very low cost, we were able to get a very high value. So I believe we got a very high return on investment. We mid-maxed the Super Bowl. Now, there were some companies that sort of just Super Bowl maxed and they just

spent a ton of money. And when you looked at the data on how they were received by audiences, it seemed like, oh, they It definitely didn't get $5 million in brand value back. In fact, maybe that ad was poorly received. Some of the AI-generated ads was- I got to give it up to the UFC for the level of advertising during the event yesterday.

They're running full, full ads in the middle? I thought the whole thing with the UFC was no ads. No, so one, the interesting thing. Just in, just brand it. No, with the New Paramount deal, there's a lot of ads. Okay. But one, Dana White was in a lot of the ads that were running. So like Dodge was doing a TRX ad.

It was Dana White driving. There was another ad. I forget the brand. I guess it was a bad ad. But Dana White was, they faked a podcast set where it was with an insurance company. And Dana was having a conversation about business insurance with the CEO of the company. So it looks like a podcast. So I thought it was interesting.

They were casting Dana and all them. Then second, the level of advertising just in the octagon. was out of this world. There was so many different ways to gamble. There was like there's no like the UFC, the UFC cannot do like a gambling exclusivity deal with anyone, right? Because it's like they have, it's crypto.com. It's polymarket.

It's bet 365. Any possible way that you could want to like gamble. Bet 365. So the only day you're taking off is leap day. Every four years you take one day off of gambling. That's kind of like the, emission. One day off

every four years. And then Cali's running ads during the event. Oh, so Cali Market or Dukin? So Polymarket is in the octagon. Okay. But Cali's running a bunch of ads.

Against it? And they're buying directly through Paramount? Because you streamed it on Paramount. Is that correct? Yeah, I don't. Did you have to pay for it in addition to?

No, no, no. Okay, so you pay for Paramount on a monthly basis and then you get UFC for free. Got it. Gambling is just min-maxing done poorly. That's true. That's true.

True. Anyway, so the news around Meta is, Meta's doing a 180, trying to be the vanguard of token minimizing. Two months ago, meta epitomized token maxing on track to spend billions a year on Claude, et cetera. We've seen an exponential increase in AI usage and we are tracking to spend billions on internal use alone in 26. The memo said at the same time, individuals and teams have limited visibility into and control over how they use AI. In 2027, we expect meta will move towards managing AI tokens in a more structured way with bullet budgets, allocation decisions, and supporting tools. That makes sense.

You have a marketing budget. You should also have a token budget. I also saw something they have like meta code, which is their internal. Yeah. That makes sense. I mean, they're like, you know, catching up to the frontier with. Yeah, I mean, Zuck can talk about this. There's a bunch of like these leaked calls where Suck is like, you know,

you should imagine that met employees are going to be better than like the average open source contributor. So it's like the basically quality of coding data within meta. It should be super good. You can train some model on that. It's the same pitch as take a frontier model, bring them in through some sort of consulting partner. They fine tune on your business workflow. They automate your business process. But your business process in this case, if your meta, is generating code that makes your social networks better.

Yeah, it's especially good because in meta, all of the internal business, like, whatever data, it's already in like, code format. You don't have to like scan in a bunch of papers. Yeah. And to, you know, like digital. I still, I still don't know what meta is actually building. And I think there there comes a time soon that they should probably communicate that to the market. Personal super intelligence, baby. What's not to, what's there not to understand? No, it's just, it's a $1.5,000 what is that? What does that mean? 75% is valuable as SpaceX, buddy. Come on. It's a It's crazy. SpaceX, well.

Space Six is 2.3. Well, if things keep going the way they're going, we'll see even more of a divergence. No, but I think, like, it's so unclear. You should be able to put a lot of the SpaceX bull case on meta, right? It's like, sure, maybe Colossus was built a little bit faster, but meta's pretty fast. I think they're wildly, I think they're, there couldn't be more different. With meta right now, it's the bull case is it's potentially the greatest business in the history. Yeah.

that is not threatened by AI. Totally. Totally. That actually is accelerated by AI. Yeah. And I don't think, anyways. Yeah. But I do think, I do think I would expect some communication from meta

around what their real strategy is. Yeah. Over the next month or so, because it's killing them that they just keep saying, oh, we're personal super intelligence, but wait, they're building like a coating harness and they're working on coding, like, are they going to sell that externally or is it going to be internal? Coding?

Are they going to try to... Coding seems like it makes sense. Are they going to try to sell their model on an API and get into enterprise? The big question is, like, do they take the leap? They kind of did that with Manus. Yeah. But that's getting unwound.

Well, let's talk to Gavin Baker about it. But first, let me tell you about the New York Stock Exchange. One, change the world. Raise capital at the New York Stock Exchange. Our next guest is the CIO and then. partner in Trades Management. You've heard him on Invest like the best many times. Gavin Baker, welcome to the show.

How are you doing? Doing great, man. How are you guys? Fantasticly, right? SpaceX IPO. It seems like everything went just flawlessly to a T, like to the point where it wasn't even dramatic. Let's give a round of applause for the banker.

The banker. It's like 20%- perfect. 20% pop almost to its TV. Yeah, what I mean by that is like, it would have been more dramatic if it had like popped up 70%, then went down 30, and then went up 50, and it was drama. But it was just like perfect execution from start to finish. Was that how you interpreted it?

I thought Goldman Sachs and Morgan Stanley did a very good job. Yeah. What do you think the market is looking for SpaceX next? Is it all eyes on the first earnings report? Like, where do we go from here? Because there's so much of the SpaceX story pre-IPO that was a decade out, five years out, two years out. But is the market going to be processing quarter by quarter plays like many other companies? Well, I think the market is always, you know, quarters matter. Yeah. You know, the runners on

X, you know, it's like there are these reply people on X for any topic or experts. Yeah. But somebody what's told me a marathon is 26, one mile runs. Yeah. And so, you know, and then all the runners were like, no, that's not true at all. You know, obviously running a mile is different than running a marathon. But, you know, every quarter matters. But at the same time, I do think if you look at how the market has looked at Tesla over the last five, six years, you know, Amazon during kind of the days of, you know, when they were building out AWS and then, you know, kind of their retail distribution infrastructure when they'd go through these investment cycles.

I do think the public market has a much greater tolerance for investment and a much longer time horizon than a lot of people in the venture ecosystem give a credit for. By the way, this is Foxy in the back. He's one of the analysts here at Atreides. I was just listening to him on the Brad Gersner podcast. I think he chimed in on that, right? You brought him with? There we go. Yes, he did.

But he did the work on SpaceX, so I thought you guys might want to talk about that. But I do think I'm not sure the story is as far out as you made it seem to be. I think there are two variables that are going to matter a lot over the next year. The first is just how quickly can they bring on terrestrial compute.

It does seem like they monetize gigawatts at a higher rate than anyone else. And we know from Jensen that they bring on data centers faster than anyone else, per Jensen's words. and everyone in the ecosystem is really insented to get

land of power in the hands of people who can energize it because everybody starts making more money when the GPUs are energized so you know if they can what are what was the altimeter figure for how what they were monetizing gigawatts at Foxy do you remember

for which deal? Well I think it was like two to three wasn't it like at least two times higher than like average Neo Cloud pricing and that's partly due to scale and customer quality and things like that, but it was meaningful. Yeah, so they're doing 50 billion a gigawatt on the Google deal. So how quickly they can add gigawatts

really matters. Yeah. If you can energize two, three, four gigawatts in the next year, that's a lot of revenue. Now, you know, prices may go up, they may go down, but that's really going to matter. So all eyes on Colossus 3, 4, 5, 6, 7, 8, 9, 10,

etc. At least in the short time. Yeah, our macro hard, macro harder, macro. Hardist. To that name, yeah, macro hardest. Yeah. And then I think cursor is another big variable. Yeah.

You know, we talked about it with Brad about how Composer 2.5 after three weeks of, you know, R.L and supervised fine-tuning Colossus 2, it's kind of Pareto dominant. So what's going to happen when it's applied to a, bigger, better base model. I do think Cursor being in, you know, half the Fortune 500 is interesting. So I think those two things, you know, while I mean, I'm super excited for going to Mars and asteroid mining and, you know, a city and mass drivers on the moon, like all that stuff is awesome.

And I think there's a, you know, decent chance it happens in my lifetime. I just think there is, there's much more tangible near-time. turn drivers here. How do you think about the tension of the cloud business versus their own application and model business? I think a lot of people were surprised when the initial anthropic deal happened purely because knowing Michael Truel, he would have been very excited. That's my compute.

Yeah, yeah, get access to a couple. He's like, hey, you got a share? He's got an only child around here. And it feels like you can imagine SpaceX, you know, bring on a lot more compute very quickly. But at the same time, every lab has had to go through this tension of like, how much compute do we allocate to training versus inference. A way to interpret that is that maybe the team at SpaceX is pretty confidence in their ability to bring gigawatts online. Yeah. That makes sense. And the altimeter figure that they've ordered 20% of the Rubens and the Rubin is an epic chip.

Like Blackwell, it was really hard to get it online. Rubin is kind of a. more drop-in replacement. It's a really, really good chip. You'll have the, you know, the GROC LPUs integrated at some point in the next six, nine months. So one way to interpret that is they're pretty confident that they can bring data centers online pretty quickly. But I also, I don't remember all of the details, but I do think there was an out in the Anthropic agreement that if they need to be. Yeah, and the Google, and the Google. Yeah, could be short-term.

There you need to be. That's what I just meant. It's like, it is, there is, like, a tension there where if you, you know, there's a moment where maybe you want to compute, but you don't necessarily have all the revenue yet. And so you could see, anyways, I'm very confident they can figure it out. Yeah. On the topic of, like, Elon Web Services, is there a world where SpaceX winds up building

out more of what looks like AWS? Like, we've seen between Open AI and Anthropic, there's this tension of, like, you got to be on AWS because I-TAR. or the ecosystem or enterprises just want to be on AWS. They won't even go over to Azure or Google Cloud for whatever. And you could imagine, like, is it enough to just be a token factory? Or do you need to have a database and an in-memory storage and cloud storage and cold storage and all the things that ABS provides?

My thought is that being a token factory is more than enough for the next five to 10 years. Man, we are, yeah, we need more token factories. But we'll see. And if they need that stuff, they will build it. Yeah. How are you thinking about the other hyperscalers, the other big tech companies? We were sort of puzzling over meta strategy at this point. Tons of resources, cash flow, data centers.

They have experience there. Maybe they're not as fast as SpaceX. But there's a lot there. But it's a completely different motion to go into token factory. And yet there's still a lot of demand. So how do you think all of that plays out? Well, I think there's many ways to go to the token factory business. You could, if you're meta, you could just say to someone like fireworks,

hey, here are 100,000 GPUs. We'll take our revenue split and we'll see what happens. I am increasingly looking at EV to net PPNE as a valuation metric. Just with the idea of being installed atoms on Earth, I think are getting appreciate in value. This is a little bit that halo trade that I think maybe Goldman Sachs came up with, you know, high asset value, low obsolescence. Yeah. But meta, you know, meta's EV to net PPNE multiple is in an interesting place. It just suggests that the market has an immense amount of skepticism about their ability to monetize their own asset base. And I think that's, I think

that's warranted given that all we've really got out of management is this concept of personal superintelligence. And it would be different if meta AI was like at the top of the app store and everyone you were talking to was like, yeah, you know, I'm using meta AI. Even there was like a killer feature within Instagram. Yeah. Like, oh, people are shopping in Instagram now. And I think no one, no one doubts that like once Zuck has an AI product with a billion dollars of revenue, he can take it to to tens of billions. But it's unclear. I feel like, you know, going into enterprise, like, you know, what is this API business going to look like? We know they can use the GPUs just on making the ads product better at the end of the day.

But there's a lot of questions. Look, I think a few things. I do think if I look at the way different players are behaving, it feels like everyone thinks we're entering the end game. Everybody, you know, loves to use these chess analogies. and it looks like the endgame maybe years sooner than we think I think that's why OpenAI is cutting codex pricing

simply because coding coding tokens are so valuable and if you don't have enough of them you may not be able to get into this RSI loop that everyone is you know pushing for

and I think if you're Zuckerberg you feel that acutely I thought muse What are the, Muse Spark. To me, it was an upside surprise, and it made me feel like, you know, what's the, what's, what's, what's, what's, what's from Talladega Nights or what is it? So you're saying there's a chance. Oh, yeah.

Like, you're telling me there's a chance. I mean, the other quote from Talladega Nights is if you're not, if you're not first, you're last. And, and, you know, that's how a lot of people. There's so many good quotes from Talladega about me. He sold the windshield. Yeah, 100%. But I think if... I'm pretty confident Mark Zuckerberg has proven to be a good entrepreneur over time

and has been willing to pivot. You know, and it's just... It's so funny. You know, right now, Facebook is... You know, meta is tell investors. There's like no chance that we're going to, you know, monetize GPUs externally. Well, like 10 days before, they announced all those layoffs. which I think it was at the end of 22, if not, I don't remember when they started to announce the layoffs.

Shortly after Brad, maybe two months after Brad wrote that letter to Mark where he said, you're the king, you can do whatever you want, but this is what I might respectfully encourage you to do. You know, they went from saying, we're not going to do that, we're going to keep investing to, you know, super focused on OPEX. And a couple of days, man. So it's like people they meet with meta and they hear, oh, you know, we're not, we're not going to monetize our GPUs externally. Well, I don't know, check back at a few hours. Yeah, yeah.

No, it's like everyone has, it comes down to like everyone has a price. You look at, you look at Elon and Anthropics relationship four months ago. And then you look at kind of, kind of as the opportunity unfolded, it made sense for them to partner. I wanted to ask how. On the meta thing, I think there is one point that's important. what ultimately drives behavior for all these big cap companies? Like getting to AI, I think that does feel existential for all of them. But the stock price also really matters.

Because if the stock goes down, you know, you gave people a grant at this price, stock goes down, you know, your engineers are unhappy and it's tougher to get to where you want to go. If you don't have, you know, these, you don't know, forget the 10x engineer. People are talking about the 10,000 X engineer. You know, you're not going to get there if you don't keep those 10,000 X engineers. Yeah. So just I think, like, we'll see with better. Yeah.

Yeah. How did this IPO update your general kind of framework for the role that retail is playing in capital markets? A lot of, it was very funny last week to see people like say like, oh, the IPO is only 2x oversubscribed by retail. Yeah, they're dumb. All these other $3 billion IPOs were 10x over subscribed. It's like, no, we're talking about, you know, a very, you know, order of magnitude difference here. But it still feels like retail is going to play a very, very important role over the next 12 months, maybe more so than ever, given that the hyperscalers are now running, you know, cash flow negative.

You have the conflict in the Middle East, right? There's rebuilding efforts that needs to have. happen. And so I feel like retail, this is kind of retail's moment now, maybe more than ever. Yeah, well, so a few things. One, people say retail in a pejorative way. And I would just say stupid is as stupid does. And like, you know, we track, you know, there's all these indices of retail favorites. And man, they're up a lot and they're up a lot, 25, and they're up a lot in 24. Or, you know, so kind of stupid is as stupid does. So I'm not, you know, like I think retail is probably outperforming the overwhelming majority of professional money managers, whether they're, you know, private equity managers, venture, you know, public equity managers, whatever.

So, like, retail, I don't think it's a majority of. I do actually think in the case, SpaceX, I'm not sure, you know, you process so much information. I'm not sure where this comes from. but I actually think after the IPO, you know, for whatever reason, some of that retail stock may have gotten allocated to people who are flipping it, because my understanding is there was more institutional buying. I don't know where this, after the IPO, the was retail buying. Now, I'm sure, you know, retail is very sensitive to momentum,

so maybe what's happening today changes that. But I think another really underappreciated thing about the SpaceX IPO is that over 10, That wasn't. SpaceX employees bought on the IPO. And that's just, you know, everybody does all these lockup analyses and, oh, how much stock is going to come to market. And, you know, for sure, there's all these triple layer SPVs or whatever. Or maybe there are. There are. People speculate there are. And I'm sure some of that will get unwound. But the reality is that SpaceX employees own a lot of this.

and if you're an employee or even if you're an investor who has an SPV or you're directly on the cap table, you've had a chance to sell every six months for the last 10 years. If you wanted to sell, you could have sold and, you know, whatever, when they did that offering in the second half of last year. So I think the supply demand dynamics here are going to be very interesting. But with retail in general, yeah, man, they're, they've been a more powerful force in the market over the last three and a half years than any other time in my career, including the year 2000 bubble, which I think this is nothing

like, by the way. But yeah, they matter. And stupid is and stupid does. I'm interested to go a click deeper on the idea of like value will accrue to companies that are in the token path. I think that phrase is extremely powerful right now, but I want to sort of expand it and understand the fringes of the token path because we talk to Matthew Prince at Cloudflare, stocks at all time highs. It's delivering tokens at the edge. And obviously there's an immense amount of AI agents that are interfacing with different websites.

They need to be distributed. So there's a lot of value there. But is Cloudflare in the token path? if they're the one finally sending you the packet of tokens at the edge? Or does that not count? How does that? How do you think about that? Every CDN has this business.

You know, Akamai, they signed, what was it, a $1.8 billion with Anthropic? And if you have all these points of presence and you can deliver really low latency tokens to high value users, I think what's interesting for all these CDNs is they're getting a massive premium for that. latency. Yeah. You know, it turns out, you know, one of the lessons from from cerebris is people are willing to pay for speed. Yeah. And you see that in the prices these guys are commanding.

But I do think, I mean, my God is in terms of tokens consumed, um, on planet earth, these CDNs are delivering less than one percent of them. I mean, maybe less than 10 basis points of them. Most of the things are happening internally and then you just get the result. Yeah. Yeah. Would I say that these guys are in the token path? I mean, I would say they have a path towards being in the token path.

And they have part of their business that's in it today. And like everyone, they're trying to move it more and more there. Yeah, I mean, Matthew is talking about co-locating Nvidia servers on the edge, specifically for the delivery of voice models because you want those to be very low latency. Maybe you want your coding model to go off and cook in Virginia. for 20 minutes or an hour and then come back to you with the final result. But if you're trying to actually talk to a model, you probably wanted as fast as possible. What about on the opposite end?

Wasn't there that a startup that a video just invested in that like will. Oh, yeah, on your house. Money to put a GPU, you know, a four GPU server on the outside of your house. I mean, yeah. GPUs are going everywhere, going in your bed eventually. I mean, it's full circle too, because wasn't Jensen talking about stuff like that back during like the original crypto cycle being like everyone's going to be, you know, mining. Yeah.

And I mean, the Tesla power wall is like a version of that for storing energy. It doesn't store compute, but it stores energy locally on the edge off the grid. And there's a lot of powerful things that get unlocked by that. What about land? Is land in the token path at some point on the extreme other end? Because people are obviously searching for going further and further upstream. They found a toilet company that makes a particular. material that goes into semi-conductor supply chain.

People are hunting for like the final, the final ingredient. Maybe it's just sand that turns into silicon. Yeah, I do think the bottleneck bros, as they are called, are this like bottle deck trade is kind of nearing its end. Okay. And, you know, I did, you know, the Wall Street Journal had the story about this Japanese company that makes, I forget what they make. Isn't it to?

too. Agamodo. Adjimodo. Yeah. Adiomoto. And everybody's in this because they thought they were going to raise prices. And they just said, we're actually not going to raise prices. This is the wrong thing for us. And I almost posted yesterday on X, welcome to Japan to all of the bottleneck people.

But, you know, everybody's, you know, having claw and run. What's the next bottleneck? Yeah. That was the game for the last year. The next game is what has enduring. franchise value kind of on the other side of these bottlenecks whenever that is.

As far as land is land a bottleneck, man, I do think the math for orbital compute to me, once they can reuse Starship, I think the math for orbital compute becomes pretty compelling. You know, it's just $60 billion to bring on a gig terrestrial.

25 is power and cooling. You don't need that in space. And so the right comp for that $35 billion of kind of, you know, IT equipment, GPU, CPU, switches, you know, memory storage is that $25 billion versus the cost of launch.

And once Starship is reusable, I think the cost of launch is $5 billion. So that means you can put a gig into space for $30 billion, and the gig on Earth is $60 billion. And that $25, the power and cooling, feels reasonably inflationary to me. Sure. So I don't know that I would say land is in the token path.

Maybe beachfront property, but that's about it. Beachfront property is beachfront property, airplanes, really nice cars. Yep, firmly in the token path. All that stuff is in the token path. I gotcha. How do you think the events of last week with Anthropic and D.C. update different countries on their own, sovereign AI play. Because there's been, there's been attempts. It doesn't feel like, you know, many of the attempts have, you know, you can have a powered shell and you can have the best

GPUs, but if you don't have the talent, it's really, it's going to be really hard to get to the frontier. And now if you don't have massive usage, it'll also be really hard to get to the frontier. And so do you think the ship has sailed? No, well, look, look, I think every country is going to want to have their own sovereign AI strategy, the minimum for national defense. I think where that ends up is, I saw today that the EU had restricted exports of McStraul's. I think that's a joke. I think that's a meme. So people have gone so far on the Mestral Le Chatt thing, la Chetan, that they're saying it's like mythos is distilled on it and it's breaking all the benchmarks. I think it's a good model, but I don't know that it's quite there yet.

Yeah. But you can imagine that we get there for sure. Yeah, so I think what sovereign AI will look like for essentially all countries, really other than the United States and China, although I think China is going to fall further and further behind, is just some sort of you do, you use, you know, you use one of these providers to do some reinforcement learning on your language, your culture, your values, you have a system prompt, you do some supervised fine-tuning, and you run that on whatever the best open source model. I think that's where sovereign AI ends up. And then you run it in your own data centers so you feel like, you know, it's safe and whatever defense questions you're asking it or whatever, forget questions, whatever. Defense and intelligence and maybe, you know, policing activities, your sovereign AI agents are doing, you know, 24 hours a day, you feel like they're safe. Yeah. So I think that's where sovereign AI ends up. And I think, you know, there'll still be a big build out for that.

But, man, sovereign AI at the frontier, I don't see it. Yeah. What do you think the drivers are of the widening gap between Chinese open source models and American closed source models is? China has made a terrible mistake, not, you know, taking, it feels like the administration has been willing to let them buy H-200s or B-30s. Oh, yeah. And I think they're on this, like, you know, they have this crazy belief that, oh, you know,

our own internal chips are good enough, they're not. And then, you know, I think what's making them think that is that Chinese labs are very, very good at distillation. Somebody told me it only took 160,000 reasoning traces from 01 and 03 to get the original deep seek. You know, they're very clever at industrial scale distillation, running it through multiple APIs, peeing each API from, you know, we've all seen those iPhone farms in China. They've got the same thing for distillation, and they've got 100,000 in points distilling these models across every API available. They've got really, really good at that. But man, all that goes away if people stop releasing these models at the frontier. And I think mythos is a side of things to come there.

Yeah, yeah. It seems like they're getting much better at locking down. The reasoning trace is locking down the espionage. It feels like back during the 01 days, the last. the labs weren't even aware that distillation was so possible that that was that was something that was such a such a potential threat for sure. Is any part of you worried that you'll never see another company like SpaceX? Worried is the wrong word.

Not worried, but like you have to appreciate that a moment like that, it's possible that you have an opportunity to invest in a company like that one time in your career. And thank God you did it because there's plenty of people that that had the opportunity it didn't. Well, I did own 15% of the video when it was a sub two billion dollar market cap. But I owned 10% of Tesla when it's a sub two billion dollar market cap. But SpaceX certainly, it's been a special experience for me. And I think there is a chance that it is, you know, one of the most important iconic companies of all time. I mean, it already is. Maybe there's a chance it's the most. And I think in general, it's just, like, I kind of want to take a step back and, like, all this

trillionaire hate from the left, it's like, you know, there's a great post from my friend, Kevin Baffee saying like, oh, this is a bond villain who's decarbonizing the world. Last time I checked people on the left were like the environment. Connecting, you know, poor people in low-income countries,

schools and hospitals to the internet at very low cost. And he's helping blind people see today and, you know, interact with the world. That's a villain. And then just like, there's so many parts of the SpaceX story, like all of the, you know, blue-collar workers

who've gotten super well. If you're opposed to data centers on Earth, because the environment, well, SpaceX is your solution. So, you know, there was another great post that just said, you know, the left one, and they don't even appreciate it. The world's first trillionaire, you know, has done more to kind of solve the environment than like everyone else on Earth combined. Yep, yep.

Yeah, I saw there was another good one. It's like, yeah, Elon could solve world hunger by, you know, market selling every, you know, piece of stock that he has and send the world into a global economic downturn losing, you know, millions of jobs in the process. Yeah, somebody said that Elon that the World Bank could solve hunger with $5 billion. And he said, if you prove it to me, I'll do it. Yeah. And it turns out you can't solve world hunger for $5 billion. But yeah, SpaceX is certainly, I would say, you know, SpaceX, Invidia, Tesla, they've all been very special to me in kind of a different way. But man, there's nothing like a rocket launch.

And so I just don't think as a visceral experience, I highly recommend. Everyone listening, you guys, if you have kids, take your kids to a lodge. You don't want to go with SpaceX. Everybody's always like, oh, get me the special tickets. You just literally, you can go to a beach at Bocchika and be where the special SpaceX viewing area is. You could literally be closer to the launch. There's hotels near Vandenberg. Take your kids, see a lodge.

It's super inspirational that humans are capable of this. And it's much more visceral than you realize. You know, the sound, the blast of hot air. A lot of people cry. So go see a lodge, but there will be a net never, I don't think, I'm pretty skeptical that there will be another company that delivers a visceral experience like that. And then listen, if SpaceX puts a city on the moon and then Mars and enables, you know, becomes the British East Indy company, the solar system, I think this will, and those, there's a lot of hard engineering that needs to happen to go into all that. this will probably be the most important company of certainly my lifetime, but maybe of all time. And so from that sense, I don't think there will ever be anything else like it.

And yeah, I guess that is a little bit sad. But you know what? There's so much awesome stuff happening in the world that it's, it's tough for me to get too down. I love it. Yeah, hard to be hard to be too. I have one last question. We have, you mentioned owning Nvidia sub two billion. What is the health of the sub two billion market right now?

Is there anything that you're excited about? Is there anything that the bottleneck bros haven't ran out? You haven't run up to a trillion yet? The bottleneck bros have taken everything under $2 billion. Maybe not even like public companies, but private areas. I mean, we're starting to see the knock on effects of AI and bio and material science and like Neurlink was sub two billion for a long time, right? And so there are more like not in theme, but accelerated by.

So I don't know. There's also just like, you know, SaaS company. There's loads of incredible venture companies, you know, startups under $2 billion. Yeah. Like loads of them. Yeah. You know, I, I, I talk to the, you know, several times a week minimum. Yeah.

In public, you know, until the bottleneck bros came along, until AI came along, there was not a lot happening in public small cap land. And by the way, on this like all these small caps, these bottlenecks, this AI, it does feel a little weird to me that you can have like a large following on social media, post about, you know, buy stock in something. And then post about, you know, outline your thesis in a $35 million market cap company. and sidd it up like a thousand percent. And there's a lot of that going on.

And by the way, this is not like a serenity comment. I think that guy's, that person, is smart. But I mean, there's, there's, there's, there's a lot of shady stuff happening, it feels like to be. Sure. Well, yeah. And you look back at, you know, you were a young, young analysts at Fidelity, right, during the, you know, the end of the, the dot com cycle.

and there was a lot of just like euphoria stuff happening. And in the years that followed, there was consequences, right? There were people ultimately had to face. Sometimes civil penalties, all sorts of different things. Companies went bankrupt. There were all sorts of different, you know, perturbations in the market. And of course, we got a bunch of really enduring generational companies through that period, too. Although a lot of these accounts are anonymous, and I'm sure they're logged into social

media with a made up email, you know, called through a VPN. And so I don't, I don't know. It is different than a research than a cell side research report that maybe goes a little bit too far, but there's still a whole compliance department around it. We are in, yeah, uncharted territory. So everyone needs to stay safe out there and do your own research, I suppose. Yeah. Anyway, Well, guys, man, this was super fun. This was great. Let's do it again soon. on more. Thank you so much. Anytime.

Let's get the whole team on too. Yeah. That's great. You know what? That's actually fun. Yeah, that'd be great. Let's do that with the whole team. It'd be amazing. Awesome.

I would love it, yeah. Yeah, you have a conference room with a nice wide angle camera. You can just have the whole crew there. That's great. Bring us into a partner meeting. Let's do it. Awesome. Great to hang with you guys.

Have a great rest of you guys. Thank you. Thank you so much for coming on. We'll talk to you soon. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI.

and stops breaches. Our next guest is Leif Abraham from public. He's the co-founder, co-CEO, CEO. Here to break down what happened on public when SpaceX went public. How you doing, Leif? Good to see you. Beautiful background. What's up, guys?

Hope you're enjoying New York City. What's up? It's fantastic. Great to see you. Was Friday crazy for you? Was the weekend crazy for you? Is today crazy for you? Is it all just like crazy in the, wow, this is a historic moment?

versus like crazy at the office, like the servers are on fire. Like, does that happen with you? Yeah. I mean, by now it's obviously more kind of business as usual when IPOs happen. But on Friday, definitely, I mean, SpaceX was the most popular IPO that we have seen on the app ever. Yeah. By like a wide margin. And, you know, to give an example of like, you know, off everyone who bought a stock on Friday,

Nearly half of people who bought a stock on Friday bought SpaceX. Which is obviously quite crazy. Just a diagram as a circle. But like second most traded stock was Nvidia and SpaceX was like 533% more trading than Nvidia that day. And so definitely, you know, one of the kind of craziest IPOs that we've seen so far. Yeah. What was the retail allocation actually like on the ground?

We heard numbers like it's double over subscribe, but then the number that I saw reported was like a hundred billion for retail. And that seemed like way more than what would actually go to retail because so much of it is going to be anchored by the banks and what I would not put in the retail bucket. Like JP Morgan's like clients, right? And you would think so. But I think when people talk retail, they think what you and I were just thinking of like basically people. who use retail investing apps like public and the like individuals and they're making decisions

to like self-directed you know and so not not necessarily not a fun like but like retail is still you know the rich guy who has a JP Morgan advisor and stuff that still counts as retail right and like when you see you know and I

know it was first about 30% then it was like down to 20% in terms of like retail allocation of it you did still see that you know at least you know sort of you know happen and don't labor like you did still see that at the end of the day when these retail locations happen these days it still mostly goes to the good wealthy customers of the big banks and their wealth management arms first and that's why you saw like you know the like retail brokerages that

had some allocation you know ended up mostly giving people like one share and stuff and that is because most of that 20% still went to you know the good long-term customer with a very large account of jp morgan and maryl and whatnot right so sure That is still the reality. And I think the main thing there is really is that, you know, the banks who are, in most cases, also like the ones who are underwriting the IPOs, you know, they are kind of managing the process. They will say that's a retail location, et cetera.

The most companies that go public maybe also don't really have, not saying SpaceX, but like, you know, most companies in the city really have the perfect understanding of, like, the nuances in retail. And I think, you know, that's why you're still seeing that the banks who are underwriting are, like, pushing their weight around. And at the end of the day, most of that. still goes to, you know, the wealth management customers and stuff. Can you talk a little bit about either the research that you're seeing folks do or maybe

the research that you're enabling with Publix Tools? Specifically, I read a very interesting report in the Financial Times where they visualized over the next year how the lockup will actually play out. It's a very low float stock early on, gets added to the indices. And there's all these different milestones that, I mean, you could just say it's all priced in already, but I imagine that many investors will care and want to buy ahead of, ahead of a index purchase, but after lockup ends or something like that. And I'm just wondering about how you can actually help a investor understand those dynamics. Yeah. I mean, I don't have the perfect schedule in front of me right now. But first of, I think this IPO specifically that the banks likely have done a pretty

damn good job, like in terms of the pop was there. It was sizable, but it wasn't ridiculous necessarily. You know, even now on day two, like the stock clearly is holding up. And then the whole orchestration of the kind of multi-stage unlock of the float at the same time or the lockup in the same time where, you know, obviously like the whole renegotiation with the, you know, adding to the NASDAG 100 and so on, which then creates more by-pressure on the other side as the other ones kind of, you know, get unlocked. And I think that orchestration will see how it all plays out as it kind of really unwinds. But it's clearly very well thought out. And if you would judge the performance of that, you know, orchestration so far throughout this IPO and stuff, I mean, I would argue compared to many other IPs, it's been very well executed, right? So my hunch is that a lot of smart people have done some, some good work there that's,

I don't know if you can really play it like that. Sure, sure, sure. You know, they're surely smarter people than you and me that have models that have all figured that out. So there's clearly continues to be more retail demand than allocation for these Blockbuster IPOs. On one hand, Elon has benefited tremendously from like the power of retail, right? It helps to have a bunch of people invest at like, you know, you know,

low two-digit billions with Tesla and sort of ride that up, right? But I feel like one of the challenges for retail to actually get meaningful allocation is just the lack of like reliability and the flipping risk associated with allocating to retail. I'm sure Elon in a perfect world would love to say like, yeah, we're going to give half of the IPO to retail. But then there's going to be that risk that people are like, you know, not as, not as reliable as the big, you know, institutions and things like that or certain even clients of the private banks that want to make sure they're in the next IPO. So how do you think that that gets solved? Is there a world in the future where, like, retail has like a true lockup, like they cannot sell versus just

saying, like, hey, please don't sell? What do you think happens? Yeah, I mean, so as a broker, you know, what most workers do and also what the companies who IPO kind of ask for is, it's like, what's your flipping policy? And as that, in most cases, if you flip within a certain time frame, you basically get restricted from future IPOs, and that's like one of the kind of forcing functions. But pure security is not perspective. You can't create this notion where, you know, once this stock is common stock publicly trading, like every investor has to be treated equally.

You can't then suddenly be like, well, I don't trust you retail investors, so you can't sell, but the other institution they're sold it to, they can, you know, like, those things can't, like, can't really happen. But I think from the retail investment, it really depends on, obviously, like, the, at the end the platform in most cases, right? So in our space, I want to also buy it up as, like, trading platforms, where they're at their focus, right? Trading platforms and, like, trading is basically, like, your chart-based first product,

technical analysis, very heavy options and futures and so on. And in that world, you do actually have a full. flipping culture. Like, there's reddits about it. There's like, you know, like telegram groups, et cetera, about, you know, where basically people like try to find multiple access points to an IPO just for the matter of like flipping it. But I would say that that is a small sliver of the retail market.

Most people are actually more buying and holding. But we've seen with IPOs in our history, our like net share retention on IPOs is like a hundred and 25% roughly, you know, which basically also means that people are actually add to their positions afterwards. And so they get shares allocated, but didn't get everything that they wanted, obviously, you know, so far, always. And then, but then they add to it as it starts trading in the public markets. And I think most cases, what you're seeing, because, like, normal retail amounts are like, but not traders, but people who, like, built up in four euros for the livelihood and stuff.

Like, they are mostly people that are cold stocks, right? And that's what you've seen also with, like, the diehard Tesla crew, like, in the past, you know. These people were people who were treating out pictures of, you know, their monthly DC. the money dollar cost average into their Tesla stock because they got a new paycheck, you know? And I think that is the much more normal behavior, I think, than this true flipping thing. So I think it's, yes, it exists, but I think it's a little bit maybe the fear is a little overstated, I would argue. There were a lot of people that were upset about SpaceX's inclusion and indices. Maybe they don't like Elon for political reasons.

Maybe they don't like the stock because of the revenue multiple. There's a variety of gripes that people have. but I saw Jason Calacanus Fireback say, hey, you can create a synthetic index that, you know, you want to own the S&P 499, just go do that. And it seemed a little complicated. How complicated is it actually to do that today? If you're genuinely so bearish on SpaceX

that it can't touch your portfolio, because you could go short or you could just buy everything else in equal proportion, but then there's rewading that has, and it's sort of complicated, but where are we from someone being able to just do that with a prompt or a click these days? Well, I love the question because that can perfectly now put an ad in here. So the simplest way is we just go to public.com, sign up, and there's something called... Public.com.

There's something called direct indexing. There you go. Fantastic. And there's direct indexing, which basically means you can buy the S&P, you can customize them. You can be, you know what, I want to have the S&P 500. without this and that stock. You can have rebalancing built in, even Texas harvesting built in,

which means you can actually save some money just on, you know, just on the taxes as well. Yeah. To that selling the losers, you know, and rebalancing over time. And so that is super easy now, at least from the public.

And it's something that a lot of people do. I think the main thing that really was, I think what a lot of people got upset with, was that people have trust in these indices because of the rigid frameworks that they have. Yep, have to be profitable for a certain amount of quarters. Exactly. It has to be a certain size.

Yeah, totally makes sense. I understand the critique. And so the minute it was basically like, oh, now we make an exemption suddenly. I think a lot of people were just getting upset with that but basically be like, hey, what the fuck? Like I put my life settings into this because of these frameworks and I have basically like, you know,

agreed to them or whatever. believe in however you're structured. And I think that was mostly what kind of came. Yeah. And also like when I think about the S&P 500, I think most people mentally think, okay, I'm going to have 0.2% in every company, but of course it's cap weighted. And when you see a two trillion behemoth come into the index, you're like, well, that could be like 3% of my portfolio, maybe 5% of my portfolio if it runs. And I don't want that index exposure necessarily. Of course, Everyone has different risk tolerances, different preferences, but good to know that there's an alternative out there. Jordy, anything else?

I was going to say, if you have 30 more seconds to answer, how do you think the SpaceX IPO impacts how, you know, bankers and companies are thinking about, you know, potentially other IPOs this year. Obviously, retail is quite strong. They want exposure. And it's at a level that is pretty unprecedented. And also the market, I felt like there was one narrative was like, if SpaceX way, everyone else loses because there's going to be so much rotation out of everything else. But the market's performed well today and stuff.

And that's not what's happened at all. Yeah, I don't know. I would argue there's so much money in the world that it's totally fine. I think when you look at the big institutions and put multi-billion dollar checks in the SpaceX, not of those who are even like existing investors and so on that kind of doubled down their positions and stuff. Like, you know, and so I would necessarily think of that argument. I do think that because this IPO at least so far,

far has been really executed quite well that it makes everyone very confident on the next ones. And so, you know, if I would be now enthrobic or open air or something, I would like to look at this one now and be like, okay, fantastic, the market is ready and the bankers seem to be ready as well. So I would say this, I would like I would argue it's a very good sign of general confidence. And so white pill on a red suit day. There you go. What else? Sorry, I cut you off. I was glad.

Okay. Thank you so much. Great to see you. Great to see you. We'll talk to you soon. Great rest of your day. Goodbye. Let me tell you about Cisco.

Critical infrastructure for the AI era. Unlocked seamless real-time experience is a new value with Cisco. Fox is buying Roku, the streaming service, for $25 billion. It's in the Wall Street Journal. 25 or 22? 25 billion in the Wall Street Journal here. Let me refresh the page. See if they have.

updated it. It still says 25. Weird. Bairns is reporting $22 billion. Okay. But who knows? Somewhere in the north of a billion, sub-hundred billion. Let's be very conservative with our estimates. Yeah, CNBC also $22 billion. Weird that

the journal is... I mean, I have inside information given that it's a news court property related there, right? Anyway, let's read through the journal piece, which might be... I don't know. Let me just give you some And then you can sort of give me some takes and contextualize it with more information.

So Fox Corp said it's acquiring Roku in a deal valued around $25 billion. So the Wall Street Journal is saying around? Is 22 around? Maybe making a major bet on the future of ads supported streaming. Ad supported streaming, obviously Netflix pivoted to ads after saying we don't, we're not going to do ads turned out to be a great business. Ads are undefeated and more people want. They're down with ads.

They're just down with ads, especially if they're good ads. Anyway, the Fox, the deal. The deal is Fox's largest to date. It brings together a media company known for its live news and sports programming with the biggest provider of streaming platforms for connected TVs. It will add scale to Fox's streaming business, currently home to free ad-supporting streaming service, Tube, which the company bought for 400 million in 2020

and subscription-based Fox One and Fox Nation. In addition to Distribute... To Be, from my understanding, has been a home run. I don't remember exactly what their revenue is, but they bought it for 400. It's in the billions now. And all the metrics about actual audience size are huge. And yeah, putting up, getting to tens of millions of dollars in revenue, hundreds of millions of dollars in ad sales against a big audience like the 2B viewership. When you have the Fox machinery behind it, it makes a ton of sense.

In addition to distributing other streaming services through connected TVs and devices, Roku has its own ad sales. supported Roku channel, the combined company will better compete with the likes of Amazon.com and Netflix for ad dollars. Quote, bringing these two companies together will really help define the future of television in the United States and in many other markets around the world. Fox chief executive Lockland Murdoch told investors on a call Monday. Fox will pay around $160 per share, 96 in cash, and 0.9693 Fox Class A shares. The deal is valued at around $22 billion on an enterprise business.

basis, Fox expects to fund the cash portion of the transaction with $12 billion in new debt, as well as cash on hand. The combined company expects to cut around $400 million in annual costs. Fox plans to keep To Be in the Roku channel as separate offerings. Consumers are increasingly opting for free and lower cost, ad-supported streaming options as the cost of subscriptions marches ever higher. Ad-supported streaming plans now represent almost 50% of all premium subscription ad video-on-demand sign-ups in the U.S.

up from 39% just two years ago. More than 100 million global households stream with Roku. Roku is the largest streaming platform for connected TVs with 25% market share. Samsung's Tizen is number two at 23%. And then I'm sure probably Amazon's Fire TV is not far behind. Fox remained on the sidelines during the heady early days of streaming boom. Pouring money instead into programming for its cable channels and buying up sports rights. It launched Fox Nation in 2018 and introduced direct-to-consumer Fox One, which includes sports and Fox News last year.

Fox said last month that Tooby had nearly 100 million monthly active users, and its revenue had grown by 23% in the Biscal third quarter. And so Fox's stock is down today. Roku is down 0.2%, something like that. and the market doesn't like it. Take him has a take here. We can read through his opinion. He says, I don't understand how this Roku deals makes any sense, bringing together the most valuable live... I'll tell you how it makes sense. How does it make sense?

No, so I think it makes sense. One, Fox, they have a great product in Tooby, right? It's, again, there are certain people that are happy with their HBO or Netflix or whatever, but 2B has a great niche. It's been a great acquisition for Fox, north of a billion dollars of revenue. That is a product. Roku is a platform.

They have over 20% market share in connected TVs. I was looking at the data. They have over 40% of the engagement with connected TVs. So when you think about it from an advertising potential, right, it's not just that they have 20% of the connected TV market. they have over 40% of like the watch time effectively, right? So looking at the potential from an advertising standpoint and how many dollars are still yet to shift

from traditional television to connected TV. So from that lens, I think it's great. Roku's also a much younger demo. So like a lot of media properties, right, especially television related, are gonna be older demos that are eventually gonna be aging out, at least, of like, prime consumers. But these are consumers that are in their, you know, prime earning years, prime years as

consumers. And so ultimately, I think it makes sense. I think it makes sense for Fox. Next, the thing that I hope that they can do as a consumer is re-bundle, right? We've just gone, we've gone through this era of unbundling. and the fact that you get a new TV and you're like, okay, great, let me log into, you know, 15, 10 different services, something like that. I would like to see them do, I would like to see them do something in bundling for a consumer. So again, looking at it from the lens of like having north of 40% of like watch time, right, that is a super valuable property.

And like with the right ad-driven approach, I think it'll pay. I wonder how windowing fits into this. Like, when I grew up, I didn't have cable, but you would get a prestige movie played on ABC, like once a week. And for a while, that was the flow on Netflix, and HBO was like its own premium subscription. You open up the HBO app. It's all premium series and movies. And then some of that would trickle down, but then it feels like the ecosystem sort of branched a little bit,

where Netflix stopped getting like the James Cameron library for a while. And Disney started hoovering up some of that, keeping some of the really popular movies, the Marvel franchise off of Netflix, even for later run a year or two after. Because there was more competition from the actual different pieces of the different studios. So I wonder if Roku will be able to provide some sort of like neutral territory in some ways where viewers can pick up something that's in the premium end,

something that's a sequel to a franchise that they know and love, but it's not seen as competitive as Disney versus HBO or whatever. We will see. The history of Roku is interesting. We've got to take you through this briefly. So it was founded by Anthony Wood, born in 1965. When he was a teenager, he published, Lunar Lander in the Ahoy magazine, earned a bachelor's degree in electrical engineering from Texas

A&M. He met his wife there. Now they have three children. Congratulations. They live in Palo Alto. But in college, Wood founded his first company, AW Software. AW. Software. What do you think the AW stands for? He's putting his name on the line. On the line. Andrew Wood Software. I got to meet Anthony Anthony recently. Oh, you did? Wait, really? No way. That's awesome. So he was selling computer programs. He founded Sunrise Industries while studying engineering, developing software for the Amiga, the original Amiga system. After graduating, he founded his, I think this is his third company, and it's called Sunrise Version 2. Later in 1995, he launched another company, Iband, and Iband sold to Macromedia for $36 million in 95. That's a lot of money.

And Macromedia, of course, was the makers of Adobe Flash. He left in 97 after two years to launch replay TV, which was a digital video recorder DVR. You'd have something coming in over the antenna, and you'd be able to record it and watch it later, much like TiVo. Tevo was their main competitor. In 2002, he founded Roku, his sixth startup to market home devices. Roku means six in Japanese, and he's just like, it's the sixth time I'm doing this. Imagine being on the sixth startup. Grindrinder.

I'm number four, three or something like that. He also worked at Netflix, but the Roku history is sort of interesting. So he founded replay TV. Reply TV was not successful, so he worked at Netflix. In 2007, Woods Company began working with Netflix on Project Griffin, a set-top box. Netflix was thinking about getting into hardware, and it would allow Netflix users to stream Netflix content to their TVs. Like, they were working on, like, the Apple TV. It was a crazy fork in the road.

A few weeks before the project was due to launch, Netflix's founder, Reid Hastings, decided that it would hamper license agreements with third parties. All of our third party license agreements, they're giving us content. They're going to be super upset about this. We're shelving this product. We're not doing it because we want to keep Netflix on all the other platforms. When the Apple TV comes out or whatever other boxes out there, we want Netflix there. We don't want Apple cutting us off because they say, oh, you got your own box. You can live over there.

You're not on ours. Not that Apple would necessarily do that, but that type of set-top box would not integrate. Or the smart TV would say, we are not integrating. And so Fast Company cited the decision to kill the project as one of Netflix's riskiest moves. Netflix then decided to spin off the company and Roku released their first set-top box in 2008. In 2010, they began offering models with various capabilities, which eventually became their standard business. model. And so they went on and on and wound up as a very successful company now owned by Fox, as long as the Steelers. Overall, real platform. They already have a product that sits on top of it.

Tons of advertising potential. And I think that regardless of whatever the market reaction is today, I expect that people will get it over time. Well, Roku is ad-supported. We are too. So let me tell you about console, console builds AI agents that automate 70% of ITHR and finance support, giving employees instant resolution for access requests and password resets. Tyler Cowan shared some more thoughts on the recent mythos, brew ha ha. It's a good term.

We, this was all over. We talked about this earlier, but he says, according to not yet confirmed but likely true reports, it was shown that the model could be jailbroken. There's debate over this now. The released mythos,

already restricted bio and AI improvement queries rather strictly in fact, rather strictly in fact. So now we are back to the model not being available. Here are a few of the constraints on the U.S. government, not the only ones I might add. One, it needs for the main companies to stay in business. On top of that, it wants their IPOs to go reasonably well. And it's now much harder for the top companies to recruit foreigners, which is a significant share of their highest quality workforce. Demis, Ilya, Andre, for a start.

are all international engineers. It is much harder for the main competitors to drum up foreign business in a credible manner and sustainable manner. That's interesting. We haven't seen many breakout charts of how much revenue is domestic versus international, but we have seen reports of OpenAI and Anthropic

doing big deals with international companies. Some of these companies, Fortune 500, they just have global footprints, so they got to use the models everywhere, ideally, unless they do all of their software engineering in Silicon Valley. 1B, how are American multinationals operating abroad supposed to use top systems moving forward? That's literally what I just said.

I just predicted the next line. Whoops, I am a stochastic parrot. It wants to use model access as a tool of both hard and soft power. So model access has to be possible at some level. But it is very hard to control what foreign agents will do with partial model access when they get it in the future. Sure. Three, the U.S. needs to stay ahead of China in the AI race. This is a big question. We have Aaron Ginn from Hydrohosts joining in just 10 minutes. We'll ask him for his perspective on this. Four, the U.S. needs to issue restrictions that are actually enforceable, and U.S. citizens only doesn't fit that bill. That's a good point. You might have some KYC, but it's very difficult when these APIs leak into other products. All of a sudden, you're prompting a model within a piece of SaaS. We've seen this with, You go to SlackBot in Slack, Salesforce product.

There's an AI model under the hood that's vended in by Anthropic or OpenAI, depending on the deal, depending on the product. And that now needs to be passed along to understand. Is this a U.S. citizen on the other end of the line? Let's find out. Furthermore, markets and everything. It is easy enough to hire a traitorous American to access tools of wrongdoing. That's a really good point. How can you verify that every American is loyal?

for a matter, it is not that difficult to fake citizenship in various ways. Yeah, there's been, there's been people over the last 50 years that have gotten caught, like, passing on, or basically selling, you know, secrets around our various military aircraft, for example. Yeah, there's a very controversial story of Virgil Griffith, a cryptocurrency researcher, who I actually met once. He worked at Caltech, was deep in math and very excited about cryptocurrency, And he went and gave a talk on cryptocurrency in North Korea explaining how cryptocurrency works and how cryptography works. And that was seen as a violation of export controls and he was sent to prison. And the crypto community is very upset about that because they maintain that math should not be illegal.

This information should not be illegal. The government side is helping me. What was his defense? Was he like thinking that he was going to liberate the North Korean people by giving them access to effectively or explaining how code? can be used to create a store of value that is unsanctionable, essentially. And so it was seen as a violation of sanctions by the U.S. government. And more importantly, it was seen as unpaid. I don't know.

I don't know. They have a lot of housing. They're calling it the most sanctioned stable coin ever. Potentially. Potentially. This one, number five by Tyler Cowan, was a little bit controversial. He says the U.S. government cannot nationalize these companies and then proceed to run them effectively.

And people were debating that, saying that it might be possible for the US government to own the labs in some way and leave them to their own devices to actually roll these things out. What do you- Yeah, I mean, if you're like super RSI-pilled, right, you don't need the employees at all because they just improve the- So the government just says continue to improve.

Yeah, basically. And that's it. So you don't actually- You know the extreme scenario. Yeah, yeah. And then on the other side, it's that, okay, these systems are actually extremely complex. You look at the uptime of some of these systems, the research taste. In fact, you need so many employees to make these products effective.

You actually need the international employees as well because they come up with great ideas. And so, yeah, those are the two sort of sides of the debate. Six, is Chinese and open source models do, in fact, improve at some reasonable pace, even though they are right now considerably behind them at best proprietary models. And that's something that I want to dig into more. It does seem like the pace of open source development in China is slowing. I'm not entirely sure what's driving, and it feels like there's a number of different things. Gavin Baker said it's about compute, and they're turning their backs on the Blackwells that

they had the opportunity to buy. I think it might be research ideas that are more locked down now in tighter-controlled circles in San Francisco. It also might be the data, but you'd have to imagine that they have lots of people that are writing code, lots of people that are inferencing those models, and then full data and, and information capturing of those rollouts. There are a number of different reasons why that pace might be slowing. And we'll see.

Maybe there's a big jump in the graph. Maybe we have another deep seek moment in the next couple months. We'll see. I think everyone should expect some type of update, hopefully today, from Washington or Anthropic or both hopefully today. Anthropic had originally said, I think, 24 hours. Obviously, a lot more time has passed. but partially due to the events on the White House lawn yesterday,

making things a little bit harder. One person potentially impacted is... Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web app, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. Who was impacted? One person potentially impacted as Carpathie. Theo went to Google and said, is Carpathie a U.S. citizen?

and AI overview seemingly pulled, went to GROC, and said, according to GROC, Andre Carpathie, is an EB-1 extraordinary ability green card recipient, not a U.S. citizen. This is a loop. This is a loop. Loop from Gemini to GROC and back, and then it goes back into GROC now because the screenshot's been shared. This is RSI. This is RSI. For sure, for sure.

Where next, Jordy? What else do we have? We've talked about La Chaton. Legrot Chaton? La Gros Chetan. I think that's how you pronounce it. Okay. Yes.

Take us through this. What's going on? Well, yeah. So there's rumors. I think this has not been formally announced by Mistral. Yeah. Formally announced by a bunch of teapot schizzoes. So in closing, Tyler Cowan called out Mistral specifically.

He said, rising in status, mistral, AI nationalism, proponents of slow-take. off as the likely scenario, reticent, quiet CEOs. But he calls out Mistral as a potential beneficiary of all this government chaos, government restrictions, closing down. And so what's going on? What is, they, they, Mistral's released many models, they've done their actual pre-trained, they're not doing fine tunes on Chinese models, correct? And it's been a good product, like it's been working, they've been raising more money, but they've never been seen as one of the leading frontier labs.

Is that the general tone? Yes, I think that's correct. I mean, very early on, I think they were like, oh, this is maybe one of the Frontier Labs, right? It was all, I think, X meta researchers. But yeah, there's the new model. You know, is it real? Technically, no.

But, you know, perhaps in the future some of the founders are vague posting. Maybe they will actually release a model called this. Let's go through some of the vague posts. All I know is a lot of Americans have ever since, ever since this new model started being talked about a lot of Americans that maybe formally had some type of beef with France have been real quiet. Yep, yeah.

Real, real quiet. Well, people are having fun with the fat cats, Arthur Mench. This is a fake screenshot, I believe, but Tenser QT shares the Death Star with the cat on it. And then Chachang Goyal says, Les Chaton Fat is now number one on OpenRouter, need to urgently fix our axes. and he actually works... He's not really helping the confusion. He actually works at Open Router.

And on the chart, it has a break in the chart because it goes so high that it's off the charts. Les Cheton Fat is crushing it. I like a friendly hype cycle. This is great. Lucas says, holy... I thought we had more time. I thought we had more time.

And it's a fake image, but it says the French government's citing National security authorities has issued an export control directive to suspend all access to Les Chauton Fatt by any foreign national, whether inside or outside France, including foreign national mistral employees. The net effect of this order is that we must abruptly disable La Chaton Fatt for all of our customers to ensure compliance. It's a direct copy pasta from the Anthropic Post, of course. And Gary Marcus also says, early access to Chetotin, and it's terrifying. I was wrong about everything. Of course,

Gary Marcus has been skeptical that LLMs will deliver AGI, ASI, RSI, whatever you want to call it, wherever your goal posts are. Gary Marcus says LLMs are not the direct path. And so the joke here is that Les Chetone updated his. Fais, does anyone notice Les Cheton fat got quantized lately? Yes. people are also saying mythos is a distillation of Les Chaton fat Yeah there's various rumors

I think the accelerate harder Says you can really tell who has early access to Les Chaton Fat and who does not You know like the butt of the joke here is that Oh like Les Chaton Fat and Mistral Like it can't possibly be on the absolute frontier But this is just good vibes Like this

It's showing that they are the leader in France for sure they're getting a lot of attention. Still have mind share. Yeah, growing the valuation, delivering something. And now people are going to check out this model and see what it can do. And it certainly, like, people wouldn't be making this joke if Mistral had, you know, been like completely languishing, not doing anything, not making any progress. Like, this is a sign of some healthy attention. I can't tell if this is a joke anymore.

NVIDIA is reportedly in talks with Mistral AI to supply 1.5 billion euros in compute per month to help support the demand for Leschaton fat and Leschetan ground. That is a joke, John. That is a joke. I mean, Nvidia probably do. It's all faked, except the vibe is real and it's amazing. You can tell who has early access to Lescheton fat and who doesn't. In other news, the prime minister of the United Kingdom has banned social media access for under 16.

He says, these days kids must find their feet in a world where technology intrudes into every area of their life. I just can't let that go on anymore, so we're giving children their childhoods back. Let's play the video. Very interesting. Kier Starmer, right? Every parent wants the best for their kids. That's what being a parent means. And for me, for my two kids, all I've ever wanted hand on heart is for them to be safe and for them to be healthy.

and for them to be happy, and the rest is up to them. But, you know, I think back to when I was growing up, and I have to say, I think we had it easier. These days, kids have to find their feet in a world that changes so quickly, where technology intrudes into every area of their lives. And we know that harms them. The response from parents in the consultation has been absolutely good. clear. Thousands of parents say their children are addicted to social media. It can leave them

trapped in a cycle of endless scrolling that displaces play, sleep and time with the family. It can harm their mental health. And frankly, parents need our support on this. That is why today the government has decided to ban social media access for children. under 16. It's a big step for our country. Goodbye. If you're under 16 in the UK. It's not an easy thing. We exist on social media. I don't know. RSS feeds are those social media?

We look carefully at the evidence. Imagine if they'll turn, OK, so we can... You know what we have to do. We have to print every episode's transcript as a book and mail it and put in children's bookstores. So every episode of TBPN needs to be. TBPN needs to be transcribed.

It works because there's no swearing. It on paper and deliver to children's books. Fly plane over the UK and then drop leaflets. A massive leaflet campaign, but every episode is a 50,500,000 words. So it just hits the ground like that. Every, every. So what's going to happen? They're going to require, they're going to require major social media companies to require

ID verification for every user. Okay. There's potentially a bunch of, you know, issues with that, especially given that there's a sort of raging debate around free speech in the United Kingdom and a bunch of issues related to that. And so that, a lot of this, again, I will happily say that I look forward to trying to get my children to not use social media as long as possible. I don't think it's, I don't think it's good for anyone's mind, much less the mind of a child. but there's a lot of issues here.

One, the other thing with vibe coding is like literally anyone can make a social media app with like one prompt now, right? And so my expectation is this is not really going to work. And one of the... I think there's power law, though. Yes, but imagine being a kid and being, and that's been you're 15 years old right now, you've been using social media for years.

I mean, truthfully, like if a kid goes and vibe codes a social network and sends it to their five friends. Like, yeah, that might violate, like, user account logins. It might be, like, a social app. But that feels, like, way chiller and not a big deal to me. Like, it feels like the spirit of the law is held there. Anyway, we can come back to this here and again in the... Yeah, I just don't...

I just think, like, there will be a new social network later tomorrow that gets hundreds of thousands of users because social media is inherently viral. It's banned the next day. They all have... Yeah, yeah. But, again, like, these things pop up. I remember, I remember there was social media. If you have like, okay,

there is a million dollar penalty for delivering a social media experience to someone under 16, then if I'm a vibe coder, first the model is going to say, hey, what you're doing violates UK law. I can't help you. Or they'll say, are you sure you want to do this? Because like, that's risky. And then you do it. And then you just get the fine and you're like, I'm shutting down. Why would I keep doing this? Yeah, but there's going to be plenty. I mean, there's, there's, I don't, I, I, I just, I agree with you on this. Information flows. One, and, and the only other thing is people have had every issue with like meta's like trust and safety, right?

But for everything that they do is that is bad, they do probably a million good things, right? Like taking down content that shouldn't be online, stopping abuse, things like that. And so I'm just very interested to see how this plays out. I think the kids are going to find a way to gather online, no matter what the law says. Yeah. You know, maybe it's in the comment section of like the Financial Times. Yeah. They'll turn that.

So the definition that the UK is using, you're using the Australian model. It's not anything with accounts and comments. It's user-to-user platforms whose purpose is to enable social interaction where users can post material and where content is distributed alongside slash through algorithms. So you've got to have an algorithm is there. They explicitly name Snapchat, TikTok, YouTube, Instagram, Facebook, and X. And so the working definition is basically a social app

where users post content, two other users interact socially, algorithmic feeds, shape, distribution. So messaging services like WhatsApp signal are not affected. So anyway, we can begin to this more. I think we have Derek Thompson coming on this week. Imagine being in the one group chat. Just everyone's sharing. know, homegrown reels in that they're making in their own homes.

Yeah, why not? Imagine that seems more healthy than, I don't know. That seems like it solves the problem that they're going after. If they think it's a problem, they're solved. Anyway, we have Aaron Ginn from Hydra host. He's the CEO and co-founder. You know him, you love him. Aaron, how you doing?

Been too long. What's up? Yeah, it's been a while, man. I miss David Cameron. So that's what I take away from that. Yeah. Oh, really? The Tori, they're a mess, but, yeah.

Yeah, yeah. I mean, have you been grappling with the phones, fertility thing? social media thing? Like, where do you stand on all that? I mean, one, most of the long journal study, they actually can't normalize their control for most of the stuff, versus, like, already predisposed behavior. Sure. And then, like, you already were existingly depressed and accelerates the depression, similar with, like, alcohol and other things like that.

Sure. But the second is that this is going to go the way of the 18th Amendment, because of the guy like what Jordy said, which is like, but the world is flatter than it's ever been before, just like the model stuff with Anthropic. It's like, it's like, okay, so we make a big deal about this, but then six of plenty of China already has it. So, like, what's the point of this? And, and I think that that's, like, I like the intent, but the intent should be, like, empowering parents to, like, educate their children and empower them to control. Or choose.

Even a curfew feels more, like, even a curfew feels more enforceable or, like, in four screen time, which is, like, you get 30 minutes a day on social media. Like, that feels, like, easier for the platforms to actually, enforce then or the country to enforce then like a total ban yeah but but this this just goes the normal trajectory of how technology gets adopted there's always a late stage of regulation and and for like GPUs you know like the or the reason why the UK government is so aggressive on sovereign AI is because they want to do similar things the to like with it this and and I think that that trend is a little bit unescapable because in the UK you have the right to do that like they're

sovereign country, you can regulate how you want to regulate. And then the latter component is that if you think about the kind of how this whole space has washed out, like what has enabled our business, and why we just, you know, closed a very large series A. How much?

$100 million. $100 million. Yeah. Yeah, no. Right. Right. So, I appreciate that. I have a gong in mind whenever y'all had your successful acquisition. I rang my little, or ran my little gong for you.

Thank you. Yeah, of course. Did you prime it? Because we've been getting a lot of critiques online. People said, you didn't prime the gong? Yeah. And I just thought you'd come in with the hardest possible hit. No, I'll show you.

I'll show you. I'll show you. I'll do five priming strikes and then the real strikes. So you go, now it's prime. Okay. And now the real hit like this. That's how you prime the gong before you strike it. This is the way you do it.

We learned this from the commenters who said, we weren't warming it up. Hey, I am pro appropriation of my culture. So like, this is, this is always the pro for the J&J. You brought us hats. You brought us hats that I didn't even, I didn't feel comfortable wearing because it, they just. I thought he was talking about appropriating the GPU whisperer culture, whispering to the

GPUs. The, the, I mean, literally, my dad gave me this on my desk. So, like, this holds my phone. Very cute. Love it. So, 100 million dollars. What, what is? is the distribution of that? I mean, are you going to be buying a lot of GPUs? You're working with

NVIDIA. Is this like one data center, multiple data centers? Are you building? Like, what restate the thesis of like where you fit in the bottleneck? Yeah. So no, we're not using any of the money to buy GPUs. We are an asset like company. I believe we hold the title as the only neocloud in the video's orbit that is a software company. So we we manage GPUs. So we provide an operating system for the data center to where any data center in the world can become in the OCloud. Sure. We're already in almost two dozen countries, close to 60 data centers, and we have, let's say, several billions in contracts that have been signed for us to continue this project.

So that's why Sovereign is a big customer of ours. It's got to think that, you know, is a U.S. company really going to go try to build a data center and supply in England, or are they just going to rent from somebody in England? then you then add the layers of now we're on social media, but this is clearly going to be applying to GPUs. Then you can see how this all kind of hall flows out where data residency in nation states is going to be a permanent fixture going forward.

And then that's not me approving that or wanting that. I just think that that's just where we are right now. And then you then add the continuous layers to that of like, well, what is AI going to work on? Healthcare, education, defense. Already all those are nationalized industries. in the other countries. So in summary, public cloud is dead. And Nvidia in all the other accelerators are basically are applying a ton of free cash flow to that same argument. And so we're the software

that enables all that to work together. How much of your thesis is like you want to stay Nvidia only, you want to compound the learnings around the Nvidia ecosystem. There's value. like we talked to another, a neocloud last week that's AMD super focused. But then you talk to other folks and they're like, we want to be completely agnostic. We want to be, you know, one big blob of fluid compute. There's multiple thesis that are playing out and people are sort of testing every idea. But how do you see it? Like, what is your strategy?

Yeah. Yeah. So our software works with any OEM or ODM. It's intentionally designed that way. But of course, like the capacity in our data center is, reflects exactly what the market demand is. And the video is just the best. And yes, I do think that there is a place for not necessarily the hyperscalor chips.

I think that that market is pretty narrow. I think it's probably five customers that actually would ever buy that. But the rest of the kind of alternatives, they're all going to be designed for very specific use cases. But if you're in a market where power is going to continue to be constrained, data center's making, you're going to pick the most. Like, you're basically always going to pick the Porsche, Cayenne, Turbo over and over and over again. You want to put your kids in it. You want to put some stuff in the back.

You mean the GT. You want to go fast. You want to go fast. Or Mercedes station wagon, right? The AMG station wagon, right? Yeah, that's a good. Classic. Yeah, so that's the Nvidia play, right?

Is that I'm the best, I'm expensive, but I can do everything you wanted me to do. And A6 and TPUs, et cetera, they're very, they're like, I'm getting a motorcycle. I'm getting a SCOT. And the market will eventually get there. But like a Nissan cross cabrily. Cross cabrily.

React to what Gavin Baker just told us in the show earlier. I asked him about it looks like the trend lines are widening between the United States close source model capabilities and Chinese open source model capabilities. There's a bunch of charts that show one line is growing linearly, the others growing exponentially over time. That could be really good for America. It could mean a lot of different things.

They could catch up. Who knows? But he was saying that the big reason for that is that Blackwell is a great chip. They've had the ability to buy it, and they've turned their back on Nvidia, even though Jensen and NVIDIA went to Washington and figured out the correct framework to allow her exports. Those exports have not been received on the other side because of the push to build an indigenous supply chain. How strong is that narrative for you? What would you add to that?

I think on one of my last op-eds and in the show, I told me all that was going to happen, that China was going to basically reverse band. Okay. Because, and that's why I wasn't really that concerned about the initial kind of Biden. Yeah, because that wasn't actually the goal. Again, like y'all both know my disposition as I love this country and I'm happy my family came here. but there's a kind of underappreciation about how actually Chinese people think and what their goals are as society. So I agree with Gavin's

kind of, you know, listen to them on All In this other podcasts, like, yeah, yeah, it's very aligned with kind of our thesis about Global Comput. Sure. The one thing that I would add is caveat, like the question is like, does it matter? And that's what we don't really know is that if we're in the market

as customers and I think probably all three of us has at least some German car, then other models of German cars are very, interesting to us. But if China doesn't care because it buys Toyotas, it buys Volkswagen, it buys whatever, like lower in stuff, then it's just a different way of understanding the preference theory of another country. And currently, I think the safest assumption that we should have as Americans is that it doesn't matter to them. And because it could be 80%, and that's all it

needs to be. And if you look at the history of CCTV policies, everything from environment to manufacturing, to buying stuff from Tibu, it seems like the consistent strategy is that 80% is good enough. And the one thing that we do have to be very careful about, which SACs has talked about pretty religiously, is that they are winning on the adoption side. And every kind of arc of innovation that has happened in the world, like previously AI,

America has won the several stages of the like Industrial Revolution to other phases of the Internet because we are first to adopt. And China clearly is the first to adopt on robotics, on drones, on AI integration. And that's where maybe they figured out, it doesn't matter. Like they can solve it via other mechanisms like dirty power, inexpensive chips,

and they can kind of go their own trajectory. So, like, you know, I'm with the administration on the changes that they've all implemented. I would say that the Freedberg's kind of last rant last week was definitely echoing, like, my view on things. It's just like the government always thinks they can do something about something when they're rather they can't, and then they spend a bunch of energy, and then at the end of day, it doesn't work, and then they still claim victory. Like the world poverty is a great example.

And so I feel like that's where we're going to end with AI, where in the end, it kind of like all this effort really didn't matter, and it caused entrepreneurs to slow down, and eventually the government backs off and realizes that we have to, to quote David Sachs, you know, let America cook. Yeah. Is distillation a bigger problem than chip exports? I think most of that's overblown, and it's kind of hard. to prove. Yeah, I think it's actually quite hard to prove. And, and, and I, I also believe there

is this kind of, even if the model will just tell you straight up, but it's flawed. Yeah. I mean, yeah, like that, like, I, I, I'm not, to be clear, it totally does happen. The question is, like, how much does it matter? Yeah. Like the, and, and I think a lot of it is oriented towards the fact of, like, under-reaching the fact that Chinese engineers are actually amazing at this. that's brought. And I think it's kind of all coded with that. They're like, oh, if they're coughing somehow they can't do it themselves. And they have proven over and over and over

again they can. And then you then go into the fact of obviously coding is now universally accepted as a wide adoption or like in the first CSA put whole for AI. Well, that's because it was also the most widely used by the customer base. And it has a

firm yes or no answer. So now you see China, which is using kind of grade B models currently, but if accelerates, reading and its adoption, and it doesn't care about the what things that we care about in terms of everything from morality to safety and things like that. So, of course, they're going to be able to find use cases and things that we didn't understand. And that's something we as Americans have so far deeply unappreciated. And you can see that in the poll numbers where data centers are more unpopular than nuclear energy. And that's a quite scary place to be, which is why the kind of, I think,

in orc of the Deidate Center business, it's actually going to mimic the oil and gas business where the reason why fracking became this great energy revolution and why it became the number one exporter of oil and gas in the world is because oil and gas companies pay off owners of lands. So that's just what it's forever too.

I mean, you have a small piece of land that they're fracking on. Like, you get a check in the mail. Yeah, that's right. And that's starting to happen. Sounds like Brad is working on something. Oh, with the Trump. accounts but also I mean no not even he was sort of teasing like we have something like around like yeah because we were just saying why would you want to be a center in your backyard if you can get if you

can use inference from you know somewhere in another state right Tyler just wanted to say hi it's been a minute oh yeah there we go there's the hat yeah oh of course we kept of course we kept your gift we would never we would have we would never it's it's here always in the office it's on our hat rack with space helmet, hard helmet, Cowboy hats, unicorn heads, Howard Wade, I think. Oh, that's so great. Anyway, thanks so much for taking the time.

Yeah, congratulations on the milestone. Great to see you. Yeah, thank you. Thanks, guys. It's been too long. Let's do this again soon. We've got to chop it up on all sorts of things. It's always a great time.

Have a good way. Yeah, absolutely. And congrats to y'all, you definitely out of the few entrepreneurs I know, man. Like, I was very happy for you all. You'll deserve it. Thank you. Thanks, Erin.

We'll talk to you soon. Congrats again. Let me tell you about Figma. agents meet the canvas. Your AI agents can now create and modify your phigma files with design system context. And our next guest is here with us live

in the TBPN Ultradome. Raphael, welcome to the show. Please introduce yourself for everyone at home first. Raphael Beavis. Apploven is the largest mobile ad platform that you may or may have not heard of. Let's put this. I think everyone on X

knows, I feel like you guys have like 100% saturation. at least on our corner of X. Yeah. I feel like some people learned like forcibly because they were like, hey, what's going on with this business? It came out of nowhere.

Like, wasn't, I don't know, wasn't like super noisy and then people were skeptical and then you kind of proved all the haters wrong again and again. Not a venture story, right? No, not at all. We couldn't even raise a dime in San Hill. I think Adam was willing to give away

25% of the company out of a $5 billion gap way back in the day. Wow. And now the company is worth $180 billion. We've done pretty well. That's crazy. 25%. What was, as you tell the story, what was the key to get from $5 billion to where you are today?

The big thing for us has really just been the model, right? The great thing is in the world of performance marketing, advertisers don't have incremental cost typically to bring in new users, right, at least on the digital side for games. And then we went into e-commerce as well, and we made the model work there. But people always want more customers, and especially if they can buy them profitably. The question is, how many more times over can you do that? We've been able to do it at a pretty big scale. Okay, so mobile games, super interesting economy, sneakily large.

Again, I think the part of the reason why App Lovin is sometimes misunderstood is that people misunderstand how big the mobile games market is. They think, like, oh, well, I'm familiar with like a blockbuster movie, certainly. It's about the same, it's entertainment. No, it's way bigger. But walk me through, first, how big is the mobile game market? How international is it? walk through the dynamics of like whales versus daily players versus free players.

Like what's the shape of the market that you're describing to a potential new app loving customer? Yeah, sure. So the mobile gamer is pretty much everyone. Think about it. You're on a first class flight, right? You see somebody right next to you playing a word game or a solitaire game or you're on the bus or it's your wife at home.

Yeah. So it's not just, you know, some kids sitting in their basement. Yeah. For us, we see over a billion people every single day, primarily heads of households and female. So for us, we see it's a massive market. And I think in the app store, there's, I think, over $120 billion of annual spend, just in-app purchases. So that really speaks to the volume of it. Yeah, the dads are PC master race, mouse, and keyboard.

Exactly. They have to call it dead on a mobile game. But it's getting there. It's getting there. You get the backbone, you click that into your phone, you can play cod mobile. There's ways around. There's a little halo. But, I mean, the business grew 70% last year, and it was primarily driven by the gaming

side of the business. Now, e-commerce has been the really big, massive thing for us. Listen, you say everyone's heard about us. Part of our TVPN, Act ownership, you know, helped with that. Yeah, yeah, totally. But, no, it's been incredible. I mean, you know, kind of looking back, we're in 26. Yeah.

In 25, we announced having a billion-dollar run rate in the e-com business. And there's just a year of it being open. now we're have our self-serve referral only thousands of accounts have onboarded and hundreds and millions of dollars hundreds and hundreds of millions of dollars of values been generated for e-coms merchants and we're so small

I mean like just for the context of the market here right so I think Facebook's got over 10 million active advertisers we'll have a few thousand right and so for us this is like a holy crap once in an opportunity especially for advertisers that are looking for a new channel. That's amazing. For us, like, you know, we're at less than 0.01% of the market share.

Yeah. But we have north of $12 billion of ad spend compounding at 70% year over year, right? So we think this is going to be a massive, massive opportunity. So two questions on AI. Let's start with the mobile game dynamic. We've seen those charts. The number of App Store submissions is skyrocketing. And yet we all can't really point to like, oh, there's that breakout game that was vibe coded by the kid in the basement or something like that.

And we could during the early App Store boom. I remember, was it Flappy Bird? Isn't that created by a kid? It really not. It wasn't some Sand Hill Road $10 million. There was some NBA-related game. Yeah. I didn't play it, but I had at least a handful of people, but it was all webbase.

There's a few games that are happening. But what are you seeing in the data? anything starting to move where you're like, oh, like, that's AI or that's vibe coding, I can see something changing about the business, or are we still sort of like pre-showing up in your business? So what we see is really cool. I'd say on the advertiser and the developer side, more and more people are coming onto the platform, right? And so on the developer side, what we see is that more developers are in need of distribution. Yep. It's now become a core part of the strategy. It makes so much sense, yeah. In 2012, 2013, when we started the business, most advertisers would depend on just getting

an App Store feature. Sure. That is no longer the game. Yeah, yeah, yeah. Yeah. You just be able to just climb the rankings. Vibode an app. Yeah.

I downloaded it. Yep. And then was later trying to leave a review because he's like, hey, this helps visibility. Yeah. Couldn't find the app in the app store. Even if I searched the app. Exact name. Like the exact phrase.

Yeah, there were so many little like. Yeah. So app store discovery seems like, you know. There were so many little like, I don't know, the web 2.0 playbook of like contact important. invite your friends, share a social leaderboard, and people would be, oh, yeah, game center integration is going to be the thing that makes you pop out. And none of that was, they were always sort of over-promising, but some of them did work. Like, some of them really did go viral and

had interesting distribution techniques, but a lot of those have been commoditized. So actually showing up and, you know, building your business on the back of Apple, it makes a lot of sense. What about AI internally? Eric Sufert and Mobile Dev Memo. is writing a lot about gems model, the gem model over at Facebook, that they're getting a lot of lift at meta out of new, more advanced transformer-based, you know, matching algorithms, advertising algorithms.

It's sort of like the unsexy part of meta's AI strategy. But have you started to see glimpses of just improvement in your system during the AI era? So, yeah. So, you know, on our side, our developers on a weekly base, are releasing improvements to our algorithm. Yeah.

And a lot of those improvements are also on the backs of using the state of the art models out there. So we definitely get an advantage of it. Yeah. And outside of just like the ad algorithm itself, internally, our efficiency gains have been massive. Like I can speak for myself personally. Yeah. Our marketing team is eight other people. Yeah.

Every single person on the marketing team is a vibe coder, right? They're using Claudec, they're using code, they're using codex and they're building tools to make them more efficient in their role. Yeah. You know, we before used to have to run everything. through an engineer. Now, everyone is their own engineer. Are you token maxing? Are you token minning? Or are you token maxing? We're token maxing. We're token maxing. Wow. Flashback to February. What's going on? Isn't this going to be a problem? Aren't you sure? We've gotten some messages from my TV. Flashback. We've, you know, we've got some messages about costs getting out a little bit out of

hand. But you know, the good thing is this. It's not showing up in the quarterly earnings yet. No, not at all. I mean, the beauty is that when you've only got, a few hundred employees and your gender as much revenue as us. You're going to have to be doing a lot of token burning. There was somebody who allegedly might be a complete rumor, but $90,000 in a day. Wow. So I think you might be changing your tune. No, no, no, or nowhere near that. It was a light week. Half a million dollars. But yeah, judicious use, token maxing, but not taken to the extreme. Yes. The judicious usage. That makes sense. What? What is it? take to all the digital marketers, growth people I know will happily test any new ad platform.

What has been the key to retaining customers, right? Like, you know, marketer, let's say they're managing $20 million budget. A lot of it's going to meta, Google, handful, you know, maybe some TV. You come to them and you say, like, give us a shot with like, you know, a quarter mill or half a mill or something like that. Everyone will take the shot, right? But you got to, if you want to build a big business, you got to retain that. Profitability at scale. So that scale is different for everyone. Some people are happy with you driving an extra 10% growth for their business. Some are saying, hey, you have to be the next Facebook or Google for us. But I would say for us, like, we see over half our clients actually retain. So we do a pretty good job. The algorithm works for a lot of people

who come on. Now it's just getting the word out to the masses, right? Yeah. Awesome. That's next week. That is next week we open it. One other big thing is that we are going back to the App Loven name. And this is a part of the role as well. Amazing. That's what I wanted. I wanted the whole time. Abloven's amazing. It's, it transcends app. Like, I think of it as its own entity, App Loven. You know, it doesn't, it doesn't matter. And for anyone that's confused as to why Apploven is going back to the name App Loven, you guys were thinking about having the ad platform be named something else. Axon. Yeah, yeah. So, anyway, smart, smart play. I always, I always, it's what I always wanted. I have no say in the matter.

I was always saying. Yeah. Listen, I have more marketing people. That's amazing. Talk about generative, creative. Is that in demand from your partners? Because I can imagine a marketer saying, you know, for this particular audience on this particular platform, yeah, I want you to just go to a frontier model and generate me a hundred different copy lines that all fit neatly in the box and generate some images and here's some screenshots. to sort of work through.

You could even have an AI agent actually use my game, take real screenshots, then you don't get the slop allegations. But in terms of layout, in terms of distribution, like how much of that is brands coming to you saying, look, I'm already really comfortable

with chat GPT images or nanobanana or Higgs field. So I got it handled. I don't need your tool versus I would love for you to do this for me. Yeah, so taking a step back. Yeah. The value of creative is that if you find the right creative that resonates with the right audience, it can be one of the biggest growth leverage for your business, right?

Sort of a power law. Exactly, right? It's, you know, let's say you spend an extra 5% on creative and you find a winner. It doesn't mean you're only going to spend another 5%. You could spend double, right? And so every advertiser wants more creative that's performing in high quality. And so amongst all advertisers we talk about, they all want the generative tools.

What we have right now is generative interactives. So that has been very helpful for us. Yeah. Why interactives, and we'll talk about video in a second, how our ad unit works is we show a video, then there's interactive, and then there's the catalog. A lot of the clicks that happen on our ads are within the interactive. And so that has been massively adopted. And that's basically playing a demo of the game or a smaller version loaded probably in HTML or JavaScript and then you get to demo it. You hit the nail on the head.

Got it. That's exactly. And that's probably extremely cumbersome for a small developer with a new game. They have to go create a new version of their game that loads quickly in the app loving platform, seamlessly and that's a perfect use case for a hundred percent and imagine you're not even a game studio right you're an e-commerce store you're selling wallets and you want to use the interactive right exactly how interesting right well the interactives are massive yeah right and so it's where we get a majority of the engagement and you're showing an ad within a game right so how do you gamify that experience how do you allow it to look at more specifications of the product all i would say 80% of our top advertisers use interactives and so it's such a massive unit yeah yeah yeah

Now, where is this going? So right now we've got the interactives. Now video has been our main focus. We have it in beta and it's been really good. And so our goal is to get that out to everybody. By the end of the year, how we envision onboarding on app, Lovin is you go onto the site, you set up the pixel, then you create a campaign with one button. It automatically generates the creatives. It pulls the links.

And then you're off onto the races, right? You just have to tell it your goal as well. So that's where we expect where the market is going. And it's part of our goal, which is making profitable advertising, accessible to everybody. What's your advice for somebody that wants to be the first hire at a company that becomes worth $175 billion in the public markets? Work harder than everyone else around you and always be meeting people. You know, I got lucky to meet Adam. No, I don't think it was any luck.

I think it's pure skill. That's why I asked. But I mean like my background funny enough is I'm a high school dropout right and what I tell everyone is that you get your GED or no GED? If mom and dad are listening sorry. Have you actually gamed out can you get like an honorary PhD from some elite institution? I don't know. I haven't reached out because that's the max. Advertising honors.

Yeah. Wherever like your hometown has a university you go give their commencement speech you start donating and all of a sudden they're just like PhD and it's like probably cheaper. Like if you donate what the tuition would have been, you probably get the honorary degree. Well, if Stanford and Harvard are listening, you know, my email box is open for you. I think they need you. But my analogy I'd always tell everyone is that, you know, when you send the warriors out to go get food, the first question they asked back isn't who is the eldest tribes leader. It was who killed the animal and who brought us back the food. And so that was always my analogy of like, as long as I outworked

everyone and delivered a ton of value, then I would be at the same conversation in the same table as everybody else. So your advice, one word, kill. Yeah. Yeah, you're going to kill at a lot of small companies. And if you provide value, if you provide ROI, you keep showing up. What about other platforms? I mean, we were just talking earlier in the show about Fox acquiring Roku.

They have 2B. There's a lot of ad inventory there. Have you thought about getting into that space? like what does that look like? What does the product line expansion beyond the phone look like in the future? You know, it's funny. Everyone talks about expanding.

We're thinking about consolidating more. Yeah, focus. Yeah, focus, exactly, right? You know, you try to do everything. You can't go deep on many things, right? And so our, what I would say is, like, our company has grown so much since we got rid a lot of the gaming studio.

So we stopped poking on that side of the business. For us, we feel like we have so much room to grow. I mean, remember, less than a tenth of a percent of advertisers in the world even use Apple of them, right? Sure, sure, sure. So let us get to millions of advertisers and then we can talk about the rest of the other platforms. That makes sense.

And also, you're very fortunate in, like, you're focused on a market that is growing, both, like, mobile gaming and advertising in mobile gaming and e-commerce. And time on phones. Like, you're, like, 12 different tailwinds. Why go into a market that has headwinds? 100%. I don't think people are spending less time on their phone these days. Nope, nope.

Maybe in the UK, if you're under 16. John, with your Applevision Pro. you know that's taking away some screen time that's a real threat to you guys it's actually twice the screen time because it's both eyes two screens nixon one youtube on the left yeah he's asking full brain rot awesome anyway um yeah excited for more people to get access and uh great to me thank you so much thanks for having me on the show guys we'll close out there leave us five stars on apple no no no we got close out with uh one of the best ads i've ever seen okay we're going from ad in my Life. This ad is truly one of the best. Let's pull it up. Wait, what is this? This just is an ad from

cheaper usually. Cheaper usually. This is one of those fake tech ads that the guy put up in the subway. That's what's going on. No? Cheaper. Usually. I start thinking, hmm, well, in what settings is it not cheaper? This is really tough if you're trying to get people to switch. It's certainly not cheaper if you're trying to go like one block like a car is always going to be uh is always going to be more expensive

but this also feels like it's like we're trying to be cheaper it feels like price war with Uber still but it's like we're sort of doing a price war but not all the time so you don't know it's not really a guarantee of any sort of like most marketing campaigns need to guarantee something even if it's a moderate guarantee

it's like 5% cheaper every time yeah but because if it's cheaper usually, could they not just say cheaper? Drop the usually. The usually is hilarious. Like, I'm thinking about different campaigns. If you take a bunch of lift rides, the same route every single day and you take a bunch of like Uber rides.

Yeah, yeah. You could probably just make the argument that it's cheaper. Yeah. Well, what's the, uh, what's that airline that has the tagline bags fly free? But it's also tough to put cheaper and then your logo. Yeah. That's not good either. Uh, I think it's Southwest.

has bags fly free? Like, can you imagine how bad that campaign would be if it was bags fly free? Usually. Usually. Like, built forward tough. Usually. It's usually built forward tough. Not always, but usually. What are some other big, just do it. Usually. Usually not the most expensive option. Most I, most. That's even, that's even, that's even, that's even worse because then they're thinking, okay, sometimes it's the most expensive. Um, Anyways, folks, I'm rooting for Lyft. There's some other billboards. Let's check in with them.

The new Chad GPT billboards are really good. Lyft is up 10% in the last month. The ChadGBT images. It's really cool. I like it because it has the same like it is aesthetically pretty, but it's also functional. It like actually. bags don't fly free anymore, apparently. Oh yeah, they don't.

But there was one airline. Think different, usually. I'm loving it, usually. McDonald's. A diamond is forever, usually. De Beers. Got me? What's the other one?

Finger licking good, usually. KFC. It's very ominous. The best a man can get, usually. Gillette, usually. Breakfast of champions, usually. Have it your way, usually. I love it, usually.

Like a good neighbor, like a good neighbor's state farm is there. Usually. The few, the proud, the Marines, usually. Taste the rainbow. Usually. Red Bull gives you wings. Usually. That's actually probably accurate. Anyway. Why the friendly skies usually. Wait, I got to tell you about Shopify. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces. And now with AI agents, always. Shopify always lets you do this. They never, it's not a usual

thing. Let me also tell you about Codex. Codex always is a powerful workspace for always is getting worked on with AI agents, whether you're writing code, analyzing data, creating content, or automating business workflows. Codex always helps you move projects forward from start to finish. Always. Visa, everywhere you want to be, usually. Also, we told you about public earlier, but it's investing for those who take it seriously. BMW, the ultimate driving machine. Oh, yeah, we also got to talk about fin.a.ai, sale to Salesforce, fantastic outcome.

True testament to founder mode. Give it up for Owen McCabe, friend of the show. Mark Denny off, friend of the show, teaming up. Absolutely amazing outcome. Such a wild ride to build intercom, wind up, raising a ton of money, build a great business, but not have this like, you know, founder energy.

We talked to own about this where it was like, okay, the business is working. Things are growing. It's not crisis mode. It's not wartime anymore. And he sort of got forced into peacetime. And then AI shows up. and he gets to go back into wartime.

And he delivered fantastic growth, fantastic new product, a fantastic outcome for everyone, met the moment, and is now on, you know, the Salesforce team and can be absolutely knocking heads. Great outcome for Intercom and Finn,

massive pickup for Salesforce. Yeah. I mean, the rebrand, crazy move. Like, I think a lot of people were like, wait, Intercom's like this known thing. Why are you launching a new product?

and rebranding the whole company. But that's the type of thing that you get when a company switches into wartime mode, switches into founder mode. And so you get these like high risk, high reward things. And I don't know if the rebrand or the rename was, you know, that critical to the outcome. There was a lot of other stuff, mainly the growth, the product, right? But it just shows you that own came in and said, I'm willing to change literally everything, including the name of the company that I've been running for a decade.

So, fantastic news. The transaction is expected to close in the fourth quarter of fiscal year 2027. That's a long time to integrate, but good luck to them to get through that. It's been 15 years in the making, so what's six quarters to wait around for the deal to close? Super happy for the thin team. Fantastic outcome in the seat for 27 years, Benioff's been at it. So fantastic crew. Congratulations to all in all.

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