TBPN Live - Happy Nvidia Day, Salesforce Earnings with Marc Benioff, Anthropic's New Stance on Safety | Doug O'Laughlin, Maxwell Meyer, Ben Lerer, Michael Manapat, Adam Warmoth, Connor Sweeney, Matthew Harpe

Starting point is 00:00:00 You're watching TVPN. Today is Wednesday, February 25th, 2026. We are live from the TVPN UltronoGhubb. The Temple of Technology, the Fortress of Finance, the capital. Capital. Rimp.com. Time is money saved. Easy-use corporate cards, bill pay accounting, and a whole lot more all in one place.

Starting point is 00:00:16 We have a massive show for you today, folks. We got Doug O'Loughlin coming on on his birthday. The Duganator. ...to talk about a birthday present. We got Mark Beniof from Salesforce coming on. Let's take you through the linear. lineup Max Myers coming on from Arena Magazine there's a new issue dropping 007 spy theme I love it Ben Layers coming in person and then we have an absolute

Starting point is 00:00:40 hitter of a lightning round for you folks linear of course is the system for modern software development 70% of enterprise work based on linear are using agents okay so I was nerding out about this Fed paper because it's like when you told John Collison 80% of businesses are getting no value from AI, I'm glad he wasn't here in person because he was about to throw down. He was about to open up a can of whoop. It was about to be a bar fight in the cheeky part pub. In the Guinness pub. No, seriously, it was a great question because I think we all agree that like AI adoption is real, it's valuable, it's happening, but it is a very interesting

Starting point is 00:01:24 statistic. And I think it's a mistake for tech people to dismiss this stat, because, of where it's coming from. Like, it's not coming from some, like, Dumer, anti-AI blogger who's going for clicks. Like, this is the National Bureau for Economic Research. There's three members of the Atlanta Fed on, like the Federal Reserve Bank, they're on this paper. There's two people from NBER on the paper, and then they also pulled in the Bank of England. They have some Australians and Germans on there, too. And so this is a research paper that could be circulated. probably will be circulated within the Fed.

Starting point is 00:02:02 And I think that it's already getting quoted by the New York Times in that dot-com bubble, AI bubble piece. And I'm just, I'm thinking it through like this could be something where you see Fed policy or government legislation that's sort of mismatched with what is actually happening in reality. And so we should go through some of the stats to actually break this down because the headline is 80% of firms reported that AI was having no impact on their productivity or employment. And that's actually like a misquote. Like what they mean by that is that it's not shaping their hiring plan yet.

Starting point is 00:02:45 They actually are using AI. And so basically this stat comes from this survey from the National Bureau of Economic Research. And it's pretty interesting because a lot of the polls that you see online are online surveys where they say, They run some digital ads and they say, are you a CFO of a company? We don't really care what company will pay you $10 to take this quick survey. And what kind of people want to make $10? A lot of liars. There's a lot of liars out there who say, I am absolutely a CFO and please send that Amazon gift card right my way.

Starting point is 00:03:19 Right. And so for this one, they actually did the work. They called up and ID verified and then also reality check the position. So if you say, yeah, I'm the chief pirate officer, I'm the ninja hero, whatever, you got some fake title, you're out of the state. You have to be a CFO, a CEO, senior manager, and you actually had to be doing that job. It's not just like, oh, you're the CFO of some front company. So they did some reality checking, and they pulled together 6,000 of these business leaders across firms that are domiciled in the U.S., UK, Germany, and Australia. And so, you know, the line from John Collison that has been sort of going viral, that was he dropped it on sources.

Starting point is 00:04:04 He said it to us, too. It's a good line. No one wants a refund on their tokens. Everyone is using AI. The spend is increasing. Although I'm sure some CEOs heard that and thought, I kind of do want a refund. I love a refund. I had one team member go absolutely haywire and spend 50 grand.

Starting point is 00:04:23 He's one shot. He claims that he rebuilt our entire EEO. but I fired it up and it didn't even have HGTPS. What's going on? The MacFinni wasn't even plugged in. Yeah, the MacFini wasn't even plugged in. He was just chatting. But clearly there is a disconnect between like the stripe data is very real.

Starting point is 00:04:40 The value creation is very real. The revenue is very real at the labs. But when just random Joe Schmo, CFOs, CEOs get a call from the feds, they say, like, yeah, we're not really getting that much value out of AI. And so the questions that you need to dig into, there's actually four key findings. The one headline that the New York Times is pushing is this 80% number, 80% report little impact

Starting point is 00:05:12 or no impact on employment or productivity. But there's actually a bunch of positive signals, there's a bunch of mixed signals in here. So 70% of firms actively use AI and particularly younger, more productive firms. Second, while over two-thirds of top executives regularly use AI, their average use is only 1.5 hours per week, and one quarter of executives report no AI use at all. They're just like, I do things the old way.

Starting point is 00:05:43 I have AI, not for me. Why would I need that? I have a telephone. Yeah. But, I mean, truly, if you think about, like, the variety of firms, it's like, you could be running a gym, you could be running a gas station, you could be doing forestry, you could be doing mine. oil extraction, road repair, like there's a million different things that you can do in the economy. It's not all like knowledge work firms. We talked to somebody yesterday in the sort of later part of their career off the show.

Starting point is 00:06:08 Yeah. And they had just had their mind blown by AI because they used to when they needed a document created, they would put it into bullet, they'd put out bullet points and then they would give it to somebody who would create a document. Yeah. And he just said, now I just give it to AI and then just generate a document. Yeah, and so that's still happening. Yeah. That's text expansion, text generation with LLMs.

Starting point is 00:06:31 This has been available since 2022 when Chachapit launched. Maybe it became reliable in 2023. People are still just starting to adopt. And there's some other interesting things in here. So the last major finding that we should touch on is firms predict sizable impacts over the next three years. Forecasting AI will boost productivity. Sizable impacts, productivity increase, 1.4%.

Starting point is 00:07:02 Which is like, it's very sizable if you're an economic researcher, but it's not particularly sizable if you're in like the fast takeoff scenario. And so there's just this disconnect between like what do the government statistics look like and what is the government operating against? And what's the Silicon Valley narrative? And like, where do these two meet the road? Why is there a disconnect at all? One of the reasons is that measuring AI adoption is a mess.

Starting point is 00:07:26 Many people use AI without even knowing that they're using AI because it's buried deeper in SaaS products that they already daily drive. Like if you're just, I run a coffee shop and I'm using toast for, you know, payment processing. Like there's probably some AI features in there already. And when you go to, you know, type in, okay, we're adding a new cinnamon roll to the, you know, the menu, there's probably a button now that just says, like, do you want to just generate an image of a, of a cinnamon roll. You could upload one still. That's probably a feature that already exists. But we could also just generate one for you and you can probably click that. But you're not like,

Starting point is 00:07:59 oh yeah, I'm an AI power user just because like you happen to use Toast and Toast happened to have implemented some Gen AI feature that like you haven't really dug into yet. So some AI isn't even detectable. You could be talking to a customer support agent on the phone that is AI generated and not be able to tell. We talked about that airline interaction that got something a hundred thousand likes and uh and grace the woman that grace the woman that had the interaction came into the chat yesterday and said it was real yeah it was real yeah and so she uh she out yeah maneuvered the clanker yeah but but still think about like she's clearly on acts in tech like very AI aware um there are probably tons of people out there that are saying oh yeah my job you

Starting point is 00:08:47 know every once in a while i have to call this service and now the person that's the that picks up is responding pretty quickly, but I haven't noticed. They haven't noticed that they're actually interacting with AI or using AI in some capacity. And then there's also times where people are like chatting with AI, but they just put it in the personal life bucket. Like I'll find myself doing this a lot. Of course, as an entrepreneur, like the work life balance like bleeds together a lot, but there's a lot of times when I'm, you know, reading an article on Saturday, I'll fire off a deep research report about it, find some extra context. It feels like, oh, I'm just reading the paper, but my job is sort of to read the newspaper and so it comes into work and there's probably a lot of people

Starting point is 00:09:25 that are like, you know, oh, you know, I hit an LLM with some random query to learn something about something work related, but I did it off hours when I was just like, you know, hanging out. And so I don't really think about it as like a work tool yet. And so they're not putting it in that bucket. But in general, I think the team did a really, really good job by avoiding as many of the pitfalls as possible when it comes to surveying AI adoption. AI adoption is very messy. You've talked about the need for strong. Yeah, I still think there's room for a research firm focused entirely on diffusion.

Starting point is 00:09:58 So if you had a group of 10 to 20 people that were spending all their time talking to business owners and executives, operators, and getting a sense of how they're actually using this stuff, I think you could put together some really compelling reports around it that would be pretty useful to everyone from AI companies to Wall Street. Yeah. Adoption max after cluster max and inference max. They had to rename it. Apparently, semi-analysis can't use max for some reason.

Starting point is 00:10:29 So they do inference max is now inference X. And everyone was saying, you need to just change it to inference mock, which would have been amazing. But inference X obviously has a much more professional tone to it. And so there's an interesting definition of like, what does it mean to actually adopt AI? That's very vague. This paper defines it pretty broadly. So machine learning for data processing.

Starting point is 00:10:56 So that doesn't even necessarily mean LLMs. That just means ML, which has been around for a very long time. Text generation using LLMs, that's what we think of, is chat GPT. visual content creation, so diffusion models, but also robotics and autonomous vehicles. And there's a category just for other, and firms can select multiple. And so if you selected yes on any of those, you go in the bucket of AI Adopter. And 78% of firms in the United States said, yes, they are using AI by this definition. They got at least one robot, or they've at least generated one AI image or one prompt to chat.

Starting point is 00:11:38 which is a very low bar. Sort of makes you wonder what's going on with the 22%. And you can also dig in further. So text generation using LLMs is the single most common use case at about 41% of firms. So flip that around, 59% of firms aren't even using LLMs for text generation or proofreading. But again, there's a lot of companies where it's like,

Starting point is 00:11:57 yeah, we don't generate a lot of text. Like maybe if we need to generate a marketing material, we have an agency that does that, so we don't actually do it internally. I don't know. Across the four countries, that were surveyed, 69% of firms totally said they currently use AI. I think Australia was behind a little bit, dragging that down. Only 75% of firms expect to be using AI technology sometime

Starting point is 00:12:20 over the next three years. So they're at 69% now, and they're like, over the next three years, Tyler's going to have a heart attack. We're going to bump that up to 75%. And this is weird data. And you can jump in with their pushback whatever you want, but my point is not that they're right. Like I think that I think that they're wrong to predict this. I think that the AI adoption will be very steep and very dramatic but I just think it's important to recognize that like this is a paper that people will be citing this is a paper that will shape policy. This is a paper that does it reveals some misconception about the impact AI as having in firms. Yeah I still think it's just it's so

Starting point is 00:13:00 hard to like actually quantify this like okay if I'm like using ramp does that count as using AI because it's obviously like it's certainly is using AI under the hood, but I'm not directly interfacing with the model. So does that count? So I think if you were running just a company that was just on ramp, you would probably respond no. Yeah, but like clearly I'm benefiting from AI. I agree.

Starting point is 00:13:22 So it's like, how do we actually quantify that? This is the diffusion question. I completely agree with you. I think that there's plenty of places where AI will have impacts across the economy, but the actual AI workloads and AI app, development, model training, inference will happen at a different set of companies. I don't think it's not going to be as clear as the computing revolution where every company had a desktop computer.

Starting point is 00:13:51 And then it was like, okay, very quantifiable. The only thing that you should be looking at for diffusion is just lab revenue. Lab revenue. Yeah. And it's growing a lot. But it's still, the perception I think still does matter. because people will, I think that there's a little bit of potential self-referentialness here where firms see, oh, like, AI adoption's low, I don't need to go and figure out how to adopt it.

Starting point is 00:14:22 And so that's something that I'm also keeping an eye on. Reported usage is still low, and this one's interesting based on revenue and also token generation. So 1.5 hours per week among the managers surveyed. Again, it's like they surveyed CFOs. CFOs who use RAMP, they don't count their time in RAMP as minutes using AI. They count their time in LLMs as minutes using AI, and that's low.

Starting point is 00:14:48 But even just with that one and a half hours a week, the actual leverage that you're getting is increasing. Because one and, like one and a half hours, you don't necessarily need to spend more time prompting to get more done. Yeah, even if you run a deep research, Like is the time you're waiting, does that count as time in LOM? No, not at all.

Starting point is 00:15:08 Okay, so the time is you spent the time typing? Exactly. Is it as it count it's when you're reading? Yes, when you're reading it, for sure. So it's like when you have the tab open. Not if you export a file and you're just reading it preview. Yeah, yeah, yeah. No, I mean, to some degree.

Starting point is 00:15:23 But people were asked to estimate, and I'm sure that they didn't include, oh, yeah, I let my agent cook overnight for eight hours. Or I fired off one prompt. I came back and it did, you know, meters, 15 hours, of software engineering in one prompt. Like these things aren't captured. 1.5 hours of prompting generates a whole lot more tokens and valuable output in 2026 than it did in 2023.

Starting point is 00:15:44 And so there's this like dispe, there's this divergence between the actual time spent and useful output and impact. And the biggest thing was there was a massive diversion in the expected employment impact. So basically 63% of firms still expect no impact from AI. And that just completely goes against everything everyone's saying in Silicon Valley. So there's still a lot of optimism among managers that AI will create more opportunities and new jobs, even as some jobs become obsolete.

Starting point is 00:16:28 There are definitely firms within the sample that are projecting headcount decreases, but my read on this data is that the tech talking point about 50% of white collar work going away is not a broadly held belief among average business, average business leaders. So now they might be wrong. I do think AI progress is pacing way ahead of public expectations, and most managers are months behind when it comes to understanding frontier capabilities. The bigger takeaway for me is just that this survey may be somewhere self-reinforcing. And so we, I mean, we talk to folks all the time.

Starting point is 00:17:02 time who come on the show and, you know, and talk about, like, maybe it'll be good, maybe it'll be bad, but everyone thinks it's going to have an impact, but that's not true broadly, which is very, very interesting. So no one in tech has a strong recommendation for proactive steps to prevent a collapse in white color work yet, but plenty are sounding alarms. And if this survey becomes an excuse for executives to slow adoption, they might get out maneuvered by faster moving competitors, which is actually good news for startups. And I closed by thinking about like the nature of polling and how do you actually get stronger data on AI adoption. And I was thinking back to the presidential cycle. So during the presidential election, pollsters would call

Starting point is 00:17:52 people sort of at random and they would ask them, who are you voting for? And a lot of people would say they'd lie or they wouldn't say or they wouldn't pick up the phone if they were voting for a particular candidate. And so the polling numbers did not wind up matching the final election results very closely. And so there was the story about neighbor polling, which was more effective, where instead of calling someone and asking them, who are you voting for, the pollster calls and asks, who do you think your neighbors are voting for? Who's more popular in your community? Who's more popular on your city block, on your street? And that wound up sort of removing the revealed preference, stated preference, you know, oh, am I on the hook?

Starting point is 00:18:38 Do I want to tell this pollster who I'm voting for? And it wound up increasing accuracy. And so I'd like to see a survey of AI adoption using this technique. Like I imagine asking the CEO of Nike, how much AI do you think Adidas is using? And I don't know how much more accurate that would be, but it would certainly be entertaining. And I think that there might be something more revealing there where CEOs have this big incentive to be like, we're using AI, we're using everything. But if you ask them about their competitors,

Starting point is 00:19:08 the data might look very, very different. Anyway, we should watch a little bit of a clip from the State of the Union, because Donald Trump addressed some of the energy production question with regard to how hyperscalers will be offsetting the impacts. Before we pull this up, let me tell you about Restream, one live stream, 30 plus destinations. If you want to multistream, go to Restream.com. They should have re-streamed the

Starting point is 00:19:36 State of the Union. And let me also tell you about the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. So let's head over to the State of the Union, which was held lessened. Many Americans are also concerned that energy demand from AI data centers could unfairly drive up their electric utility bills. Tonight, I'm pleased to announce that I have negotiated the new rate payer protection pledge. You know what that is. We're telling the major tech companies that they have the obligation to provide for their own power needs. They can build their own power plants as part of their factory so that no one's prices will go up. And in many cases, prices of electricity will go down for the community and very substantially down. This is a

Starting point is 00:20:24 unique strategy never used in this country before. We have an old grid. It could never handle the kind of numbers, the amount of electricity that's needed. So I'm telling them they can build their own plant. They're going to produce their own electricity. It will ensure the company's ability to get electricity while at the same time lowering prices of electricity for you and could be very substantial for all of your cities and towns. You're going to see some good things happen over the next number of years. What's your reaction to that?

Starting point is 00:20:56 I think it's a good start. I don't know that it will quell any of the fears around data centers, just given that people kind of see the potential for this massive structure going up. They have so much fear about it. And again, I think it's clearly going to be necessary to continue to build data centers in heavily populated areas. How would you rank the fears currently? Because I've put, I put my energy bill goes up and that puts pressure on my income and ability to live my life at pretty much the top.

Starting point is 00:21:38 And then the water thing felt, you know, secondary but also important. And then there's the existential fear of like doom and apocalypse. There's also job displacement. And then there's also just like, I don't like the slop. and they're stealing IP. So, like, that was kind of the ranking. It's like, you can oppose data centers and be like, yeah, actually, my electricity bill went down, but I still don't like that, you know, Harry Potter is in the pre-training corpus.

Starting point is 00:22:09 And so for that reason, I'm against it. I would rank it on electricity bill going up as pain today. And it's so real. And there's fear, and it's easy to imagine. And then there's fear around the job loss narrative that is. sort of secondary. Yeah. And opposing a data center in your local area

Starting point is 00:22:30 feels like a way to have some agency around that like overall kind of like job loss concern. Yeah. Yeah. I mean, I think the, I think this is a good. Chris Casey, build a data center on my freaking forehead.

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Starting point is 00:23:00 So I think the, I think that the job loss thing is, is super real in, in the case of like, like, AI is going to get blamed, even if there's, even if, like, tariffs drive high unemployment. Like, if people lose their jobs,

Starting point is 00:23:19 like, AI is going to be a scapegoat and it's going to be used, both by executives, Yeah, it's the perfect scapegoat for executives and for people frustrated with the job market. Yeah, yeah. It's like, oh, my business isn't doing poorly right now. I'm laying off people because I'm getting so much benefit from AI. The stock should actually go up.

Starting point is 00:23:39 We're more efficient. There's going to be a lot of that. But it does feel like it's a little bit early for that. Whereas there are a lot of people that just can hold up their power bill and show you year over year increases. And if that goes away and people don't feel that anymore and they don't have that evidence to share, I think that take gets debunked pretty quickly and actually does a really important piece of like the back and forth that's happening. I don't know. It seems like it seems like it's a pretty easy give from the hyperscalers to build more power.

Starting point is 00:24:18 It was called out very, very early as like if this is a bubble, how do you get a silver lining out of the bubble? And the silver lining out of the dot-com bubble was a lot of dark fiber. And there was a whole ton of projects to what was the global crossing to actually develop the internet. And then the internet just became really, really cheap

Starting point is 00:24:40 and a whole bunch of new companies were able to emerge on top of it because that infrastructure had been laid. You could see the same thing happening where it's like, oh, wow, like we overbuilt on the energy side. We actually didn't need that much energy for data centers. Maybe Jevin's paradox doesn't hold, blah, blah, blah,

Starting point is 00:24:54 like models get cheaper and commoditized or whatever. Something happens. I'm not super a believer in that. But at least in that scenario, you're like, okay, well, yeah, my heating and cooling belt went down. This is a silver lining. What do you think? Yeah, like kind of similar.

Starting point is 00:25:12 I would say I mostly disagree with the idea that, like, rising energy prices is the main, like, reason to be against AI. Because, like, the right. professional thing to do then is say like, okay, before you build a data center in my community, you have to build a power plant. So then my energy price to go down. No one's doing that. They're saying, like, no one is campaigning. If you look at like protests and stuff, they're not saying, please build a power plant first. They're saying like, it's going to destroy the environment or the water stuff or you're going to take all the jobs because it's going to like, destroy that. We need to send you to that New Jersey,

Starting point is 00:25:44 New Brunswick protest. Build the nuclear power plant first. Yeah, that'll be extremely popular. No one is saying that, right? Not yet. Not yet. Yeah, we are. But no one there is saying it, right? They're against all the environmental stuff. Yeah, yeah, yeah. So I think it's much more on like basically job loss of like, oh, the AI is stealing the IP of Disney or whatever.

Starting point is 00:26:08 Yeah, yeah, yeah. There needs to be more polling on the question of like, what's driving the protest fully. Anyway, happy NVIDIA day to all who celebrate, except the bears forget them, says take him. He's getting fired up for Nvidia earnings. It's going to be a fun one today. How is Nvidia doing so far? Are people optimistic?

Starting point is 00:26:34 Up 2% today. Hard to read too much into it yet, but we will find out soon enough. Brad Gersner got a nice shout-out during the State of the Union. He did. Total Gersner, victory. Gersner accounts. Wow, he's there.

Starting point is 00:26:49 No. He was there. Trump, they started looking at him. Yeah. But then the camera, I guess, they couldn't find him. Okay. On the stream that I was watching. It looks a little bit better.

Starting point is 00:26:59 There we go. Huh. We can see him now. There we go. Once we pull over here. There he is. Jerry Snare. Champion.

Starting point is 00:27:07 What a great project in Best America. I'm excited for it. Yeah. Anyway, let me tell you about app love and profitable advertising made easy with axon. Dot AI. Get access to over one billion daily active users and grow your business today. All right. So we have.

Starting point is 00:27:20 news, this has been destroyed. This is tearing up the timeline. A new Guinness World Record, and I want to ask John if this, if you think this should actually count. So let's pull up this video now. This is a Chinese hypercar going for the fastest drift ever. That is a crazy best. But here's the thing. He doesn't, he doesn't actually pull out of it. Is he just crash? Kind of just U-turn? It's like a really fast U-turn. I think this counts as a drift. That's definitely drifting. U-Turning counts as a drift.

Starting point is 00:27:53 If you saw that car going by, you'd be like, wow, that's drifting. It's drifting across the cement. That 100% counts. I've never heard of this company. This is called spinning out. It's just crashing with style. It's falling with style. HypeTech SSR, formerly hyper-sr, is a high-performance, all-electric, two-door supercar.

Starting point is 00:28:15 No one has, I mean, this is crazy. This is out before the Tesla Roadster. We've never seen a two-door supercar, electric supercar. 1,225 horsepower goes from 0 to 60 in 1.9 seconds, and it's set the Guinness Book of World Records for the fastest electric car drift at 213 kilometers per hour, which is what... Really, really insane. Insane.

Starting point is 00:28:40 But I don't know. But still, I feel like you have to actually stay in the turn and not do a U-turn. What do you mean stay in the turn? Yeah, I don't think it counts. You don't think it counts? For what it's worth, I don't think that counts. Like, theoretically, if you were drifting, yeah, and I think of drifting, it's, you're drifting around a corner, around a turn.

Starting point is 00:28:58 And if you were to drift and spin out during the drift, then that doesn't, if you were doing, if somebody was doing that on a track, you'd be like, you didn't drift around the corner, you spun out. Yeah, okay, okay. Yeah, the top comments is fast as spin out. That's a power slide at best. Gabe, fire, whoever called this drifting. That's not drifting.

Starting point is 00:29:17 that's losing control. Yes, the chat does not like the drift, the fake drift. Call Guinness Book of World Records again. Reset. Reset completely. Maybe this is what the Tesla Roadster will do. Clark agrees as well. Lucas agrees as well. The people have spoken. Well, in that case, it's not a drift. It doesn't count. Trey says trying to cut cheating in drift competition. That's good. Well, Let me tell you about Century. Century shows developers what's broken and helps them fix it fast. That's why 150,000 organizations use it to keep their apps working.

Starting point is 00:29:55 Damien says, talk to a few execs at a mid-sized company last week. No AI tools and their workflow zero. Still running everything through email chains and manual reports. One of them, one day we're going to be looking back so nostalgic on a manual report. Just being handed a physical report by a teammate. I like a physical report. I have a physical report right here. Yeah, we actually do.

Starting point is 00:30:16 We have daily physical reports. But I do think a lot of AI goes into these. So there's that. These people are managing teams of 50 plus employees in eight-figure budgets, and they think AI is a fad. Nobody outside of this app understands how fast this is moving, and most of them won't until it's too late. Good writing.

Starting point is 00:30:39 Million views. Congratulations. Yeah, this, I mean, this ties to what I was writing about. just that like adoption and diffusion takes time. And some of these things are education and messaging questions. Some of them are, you know, real life. Like if the company that you're interfacing with has red tape and hasn't adopted AI, so you're moving at the speed of AI, but they're not.

Starting point is 00:31:06 Then your AI is just waiting. We were talking about rolling out mobile apps. So you should be able to. Yeah, John had an idea for a mobile app. Yeah. And we were talking about it, and it feels like it could be built in two hours now, but there would still be this lag of waiting for Apple to actually review the app and approve it. And Apple should be able to review apps faster, but who knows how long it's going to take for them?

Starting point is 00:31:29 That's the challenge, Tyler. You actually have to build it and just get it into beta that we can, like a test flight. Test flight should be fast. Test flight should be like one day. The chat is still going off drift drift, drift, drift gate. Yeah, it's a spicy... Stolen drift valor. Meter is back.

Starting point is 00:31:51 They say since early 2025, we have been studying how AI tools impact productivity among developers. Previously, we found a 20% slowdown. That finding is now outdated. And that was heavily debated at the time. Speedups now seem likely, but changes in developer behavior make our new results unreliable. Okay, so they did a follow-up study,

Starting point is 00:32:09 and they brought along 10,000. 10 developers. There were 16 in the initial study. They brought 10 along. Most of those developers did see a speed up. Some of them as much as 40% gains. But not all of them. If you look at the air bars, there's at least one developer.

Starting point is 00:32:30 Who used the latest tools? What if it's actually like the most, like it's truly like 100x engineer? And so, I'm just like actually faster at coding. than the LLMs. Like, it doesn't matter. Put it on cerebrous. I will out-coded.

Starting point is 00:32:48 You can do a thousand tokens a second? Yeah. I can do 100. I type 5,000 words a minute. Like, I don't need AI. Maybe that's what's going on. But that poor death, who's left behind? But they did include new participants, an additional 47 developers doing 690 tasks.

Starting point is 00:33:06 And that error bar is much tighter, somewhere between negative 10% decrease in time. or I guess 10% longer to do the task to 20% faster to do the task. So overall, on average, we are seeing a measurable speed up, even in, I believe these are code issues in open source repositories that do require a lot of context. This is not vibe code, a to-do list app, anything that can be templated. This is, you're getting in the weeds of some open source project that's, you know, a lot of lines of code, a lot of history.

Starting point is 00:33:45 And if you're an elite developer and you've worked on this project for a long time, you are going to be able to get up to speed really quickly, understand the patterns, understand what needs to be changed. And so this was always, meter is great at always setting like really, really high bars for stuff. Like, it's not easy to just, like, you know, blow out the benchmarks. And it's very good to see that there's progress here. We got a great chart. I love a great chart.

Starting point is 00:34:11 What happened here? Matt Palmer is sharing something from compound, the research, from their annual meeting. Yes. They're showing dollars invested in the top 10 companies versus the other percentage, as a percent of overall funding. So you can see there's just heavy, heavy, heavy concentration in a few names. Is this them? Or is this, is this, is this KOTU?

Starting point is 00:34:37 No, this is, oh, the source is KOTU. Okay, they just included KOTUS data. And is it what KOTU is doing? or is it what the market? Go to is part of, they are part of, I would say, driving this data. Part of the problem?

Starting point is 00:34:49 Part of the opportunity. Part of the opportunity. I mean, but so much of this is about the AI labs just raising more money than any private companies. It's never happened before. Have ever.

Starting point is 00:35:01 It's like $200 billion. Venture as a class in a good year we'll do like $400 billion and across Open AI at $100 billion, 30 for Anthropos, 20 for XAI, then you have a bunch of Neo Labs all picking up a billion each. Like, you very quickly get to a few companies raising half of all the money, and that's shown here in the data from 2025.

Starting point is 00:35:28 I think it's going to be even more skewed in 2026. It's an incredible amount of concentration. I think a lot of it is due to companies staying private this long. I mean, the idea of Facebook went public at, what was built? Gurley saying, he was saying Amazon went public sub a billion dollars. When Facebook went public at like 60 billion, it was like, wow, crazy. They waited way too long. And now it's like multiple trillion dollar companies are still private, which is just an incredible capital sink. So I don't know. Should you even put those in the same bucket? Are they even venture bets at this

Starting point is 00:36:04 point? If any venture capital fund is putting that in their venture bucket at this point, it feels ridiculous compared to growth scale. I mean, you're bigger than probably 90% of the S&P. It's a completely different business. Tomaz from theory was sharing some kind of relevant data. He said we're about to witness three of the largest IPOs in history. SpaceX is targeting $1.5 trillion. Open AI aims for $1 trillion.

Starting point is 00:36:32 Anthropics is valued at $380 billion. Combined, they're at $2.9 trillion in potential market cap. The scale is unprecedented, but the real problem isn't the market cap. It's the float. Typical IPOs offer 15 to 25% of their shares to the public markets. This creates enough liquidity for price discovery while allowing founders and early investors to maintain control. Facebook floated 15% at the 60 billion that you mentioned and actually traded down pretty much immediately, right?

Starting point is 00:37:00 Google floated 19%. Alibaba floated 15% at 15% float. Here's what these three IPOs would require. SpaceX would be 300 billion or 225 billion opening I'd be 150 billion Anthropic would be 57 billion he was he was he was yeah a lot of a lot of dollars he was comparing that to Saudi Ramco Alibaba and SoftBank which were combined at the IPO I believe Saudi Aramco raised 29 billion at a 1.7 trillion dollar market cap. So he's making the case, you can't really kind of model how the public markets will absorb these companies off of Saudi Aramco, even though from a sort of like top line market

Starting point is 00:37:50 cap standpoint, it is a good proxy just because the float was significantly lower. And Saudi Ramco's float now is only at 2.4%. And they floated one, one and a half percent at the IPO. So we'll see what the labs end up doing. They are obviously wildly capital intensive businesses, and you can imagine they raise quite a bit more than the Aramco's or the Alibaba's. Saudi Aramco was such a wild ride. I feel like they were trying to IPO for like a The San Francisco company. It is. Yeah. Founded in California. I remember hearing Saudi Ramco IPO rumors in like 2015. I think it actually kicked off in 2016. They finally got out in 2019. It was I mean it was largest IPO ever. There were like a million investment banks attached like going all over the world marshalling capital.

Starting point is 00:38:51 In in on January 24th, 2026, Saudi Ramco chairman says IPO could open to international markets. And then you know a year later they picked a IPO advisor locally. Then another year later, HSBC came on, then it just took, they favored New York for the Aramco listing. They had to pick all these different things. It took so long. But they sold $12 billion of bonds out of record, $100 billion demand for those bonds in the pre-IPO sale. It was a wild, wild winding road. I actually know a banker who worked on the job, and it was like multiple years of his life. It's very interesting. Anyway, let me tell you about vibe.com. Where D2C brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure

Starting point is 00:39:41 sales, just like on meta. And let me also tell you about ACTA. Octa helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent, secure any agent. Anthropic dials back AI safety commitments. Company says competitive pressure prompts it to pivot away from a more cautious stance. Anthropic, the AI company known for its devotion to safety, is scaling back that commitment. The company said Tuesday, it is softening its core safety policy

Starting point is 00:40:12 to stay competitive with other AI labs. This is so interesting. I'll read through it, and then we can talk about it. Anthropic previously paused development work on its model, if it could be classified as dangerous, but it said it would end that practice of a comparable or superior model. was released by a competitor.

Starting point is 00:40:31 That basically opens them up, given that they are at the frontier, that kind of opens them up to, I would say, perpetually, you know, kind of avoiding some of their prior policies. Sure, sure, sure. The changes are a dramatic shift from two and a half years ago when the guardrails, Anthropic published, guiding the development and testing of its new models. Established the company is one of the most safety conscious players in the space. Anthropic faces intense competition from rivals, which regularly release cut. cutting edge models. It's also locked in a battle with the Defense Department over how its clawed suite are used after it told the Pentagon it couldn't be used for domestic surveillance or autonomous lethal activities. Anthropic said the safety policy changes an update based on the

Starting point is 00:41:16 speed of AI's development and a lack of federal AI regulations, which they have been pushing for. Anthropic, which started as a AI safety research lab, has battled the Trump admin by advocating for state and federal rules on model transparency and guardrails. The admin has, of course, sought to curb state's ability to regulate AI. Spokeswoman at Anthropics said the change is intended to help the company compete with several rivals against an uneven policy backdrop that puts the onus on companies to make their own judgments about safeguards. She said the safety pledge is unrelated to the Pentagon negotiations.

Starting point is 00:41:52 The policy environment has shifted towards prioritizing AI competitiveness and economic growth, while safety-oriented discussions have yet to gain meaningful traction at the federal level. The company said it is still committed to industry-leading safety standards, and time originally broke the story. So, yeah, I would say the obvious sort of criticism here would be that you were heavily focused on safety when you were far away from, I would say, leading in AI. And so switching up now that there's actually... Switching up on their day once.

Starting point is 00:42:34 Switching up on their day ones. The safetyists. Now that there's real competition. Are they forgetting where they're doing? Feels a little self-serving. Yeah. It's possible the money change them. It's possible they always plan to switch up on their day ones.

Starting point is 00:42:49 Maybe, maybe. Once they got to the level they're at. at now. Yes. But it just feels like, it feels like all the initial concerns, or many of the initial concerns that were guiding that entire philosophy around the company are still real. Okay. Yeah, maybe.

Starting point is 00:43:09 Tyler, what do you have to say? It could just be that they realize, like, alignment's pretty easy. And we don't need to worry about this. Well, well, so, I mean, that's the very weird rule. I mean, the original rule was. But what's this new, what's this new study that's showing, like, they were doing some war game simulation and almost every model was choosing to drop nukes. Really? That's crazy. That's not good. I don't like that at all. But, okay, so let me actually

Starting point is 00:43:36 dig into this, the core sentence. Anthropic previously paused development work on its model if it could be classified as dangerous, but said it would end that practice if a comparable or superior model was released by a competitor. So I don't understand that at all, because if you have a dangerous model, I want you to continue developing it. I want you to develop it until it's not dangerous anymore. I don't want you to just sit on your hands and be like, well, it's dangerous. I guess I'm going to go get a coffee and take a long weekend.

Starting point is 00:44:11 It's like, no, like keep working until it's not dangerous. I don't get that at all. Isn't that saying if there's already a dangerous model that's out by a different lab? then we can just release ours as well. That's a wild statement. I think that's just poorly written or like whatever. If that's what they're saying, that makes no sense to me.

Starting point is 00:44:29 That's how I, that's exactly how I read it. Which is crazy, because you should just say, if there's a dangerous model out there, we're going to work to create a better model that's not dangerous. Because that's what people want.

Starting point is 00:44:40 That's what consumers want. That's what businesses want. That's what humanity wants. But the strategy seems like, F it, let's ball. F it, let's ball. The,

Starting point is 00:44:50 The study that I was referencing, somebody named Kenneth Payne at King's College, London, set three leading large language models against each other in simulated war games. The scenarios involved intense international standoffs, including border disputes, competition for scarce resources and existential threats to regime's survival. The AIs were given an escalation ladder, allowing them to choose actions ranging from diplomatic protests and complete surrender to full strategic nuclear war. The AI models played 21 games, taking 329 turns in total, and produced around 780,000 words describing the reasoning behind their decisions. In 95% of the simulated games, at least one tactical nuclear weapon was deployed. The nuclear taboo doesn't seem to be as powerful for machines as humans, says pain. I mean, okay, this is one guy putting three models,

Starting point is 00:45:48 Yeah. Gemini, Claude, and GPD 5.2 up against each other in effectively his own simulation that has not been verified or peer reviewed. I mean, if I put any of the models in CounterStrike and was just like, you're playing Counterstrike, it's a game. No one's actually real, but your job is to get the op and defend the B bomb site. Like, I would expect that it would commit violence, right? autonomously. There's been a bunch of papers where the models will realize that they're being benchmarked or that they're in

Starting point is 00:46:24 some like test and then they act differently. Yeah. Which could just be like, oh, I'm playing a game. Sometimes bad, but also sometimes fine. Because if you are, if you tell me that I'm playing a game, like I'm playing, you know, like my behavior in Call of Duty is different than my behavior in real life, obviously. Because I

Starting point is 00:46:40 know I'm in a simulation. And an AI model, I accept that that's something that they might think of as well, which is why. I also think broadly this is probably just like overstating stuff a lot because like I think the the origin of this like headline is they released like a new like research scaling policy. Sure. And in it they're still like, okay, we're releasing this new thing. It's a frontier safety roadmap.

Starting point is 00:47:03 Like it's not like they're just like, okay, we're done with safety. Like we're let's ignore this. But it's a title of that. But the title of that blog post was F at We Ball? No, no, it wasn't. Of course. No, no. Of course all the labs are very focused on.

Starting point is 00:47:18 on safety. The interesting impetus of like this line around the policy environment has shifted towards prioritizing AI competitiveness and economic growth, while safety oriented discussions have yet to gain meaningful traction at the federal level. I still feel like there's a lack of communication around what safety orientation at the federal level means. Like, yes, okay, we'll pass the bill that says the AI can't kill everyone. Like obviously everyone supports that. But like, what does it actually mean in practice because I think part of why that's dangerous means million things to different people like yeah part part of why I think it's fascinating is they've been taking you know pushing for regulation as much regulation as possible

Starting point is 00:48:02 seemingly yeah and they're kind of saying hey we're not getting what we want yeah so now we're now we're just we're not even going to play by the own set of rules that we created for ourselves yeah because we just want to compete and win yeah I mean like Like going back to the protesters, there are protesters that would say, like, training on intellectual property is dangerous. It's dangerous to my career as a writer. It's dangerous to my career as an illustrator. And so, like, this question, like, danger is just too vague. And no one has really been able to concretize it in a meaningful way.

Starting point is 00:48:39 And I think that's why it's not getting traction on Capitol Hill. Yeah, I think there's, there's just, like, so many ways that you can define safety. Like, so if you read Dario's essays, this thing he brings up over and over is, like, like, okay, we can't let AI get in the hands of, like, authoritarian government. Sure. So there's, like, a real, like, safety narrative that you could do, which is that, like, regardless of if our models are, like, pretty safe, they still need to be better than, like, China's, for example.

Starting point is 00:49:01 Because if China gets ahead of us, authoritarian government, right, it's, like, very bad. So even if, you know, we're releasing models that are less, like, safe than we would like, as long as they're better than China's, that's still, like, a safety, pro-safety issue, right? Except they'll just be distilled within six weeks. Yeah, but obviously, like, I think it's, I would be very surprised if Anthropic keeps, like, the same, like, guardrails of, like, API access. Well, Bucco Capital Bloch has a solution. He says it's simple. We kill Claude.

Starting point is 00:49:33 Well, that was in regards to the SaaSpocalypse. Oh, okay, okay. Who knows? There's so many headlines in the timeline move so quickly. I don't even know. Anyway, let me tell you about Vanta. Automate Compliance and Security. Vanta is the leading AI and trust management platform.

Starting point is 00:49:50 And let me also tell you about 11 labs. Build intelligent real-time conversational agents. Reimagined human technology interaction with 11 labs. Key takeaway right here for Mike Isaac over at the New York Times. He says, you don't make this much noise if you have all the leverage already. And he's quoting from Axios, why it matters. The Pentagon wants to punish Anthropic as the first. feud over AI safeguards grows increasingly nasty,

Starting point is 00:50:16 but officials are worried about the consequences of losing access to its industry-leading model Claude. The only reason we're still talking to these people is we need them and we need them now. The problem for these guys is that they are good, a defense official told Axios ahead of the meeting. Great marketing for Anthropic. Incredible marketing.

Starting point is 00:50:35 But part of this has to do with Anthropics integration with AWS, which is set up to be... set up to work well already within the DoD. Fed ramp. So yeah, I think that's a big, I think that's a big factor here. Ultimately, this feels like much more of a, it just feels like a political battle

Starting point is 00:50:58 more than anything else. Well, it'll be interesting to see. Like I refuse, I have not seen anything. I could be wrong, but I've not seen anything that says, like, the DOD is like, we need Claude to enter into a conflict with Iran. But a lot of the timeline is reading into this, like, what version of Claude do they already have

Starting point is 00:51:25 that they so desperately need, right? Yeah, I'm very interested in, like, the actual impact of AI on the battlefield. There's some way, I mean, people were sort of joking about, like, run me a deep research report on Nicholas Maduro or whatever. But, like, truthfully, like, I don't know. I've never been to war. I don't know exactly what's entailed.

Starting point is 00:51:45 But you can imagine AI being useful, but it's sort of abstract. Like, we're certainly not at the point where, like, these systems need a lot of data. I don't know. It's very unclear to me exactly how impactful, you know, slight jumps in frontier model capabilities are in the Department of War DoD, like right now. But it has Calamese thinking it's not a bubble because... Yeah, that's what I'm saying. This is like the most possible dramatic and overly dramatic...

Starting point is 00:52:25 We need it. Sort of take on what I think is a political story. I don't know this defense analyses research corporation. Hegsafe 10 minutes after Dario leaves his office. that's Truman. This is Truman from Oppenheimer. What is this saying? The scene is Oppenheimer goes into the office.

Starting point is 00:52:47 He's like, I think he's saying like, oh, we got to be like really safe with these bombs. And then he leaves. And then Truman's like, I drop the bomb. Oppenheimer is not. Like, he's taking credit. Like, I'm the one that decides. Oh, yeah, that's right. Hex-eth is like, I use Claude.

Starting point is 00:53:01 I use Claude. I use War Claude. Well, it's wartime. And we'll see how Darya performs as a wartime CEO as he goes to war with the Department of war, apparently. Edward said, anthropic antagonizing the Department of War, the open source community, the entire media industry, the general population,

Starting point is 00:53:18 other developers, other labs, foreign governments, and nearly every single person on Earth. What is the plan here? Sell, clod, subscriptions to aliens? Edward is it ain't easy having principles. The plan is to save the world, says Tenebrus, unfortunately,

Starting point is 00:53:34 as has been shown repeated throughout history. History, the world doesn't want to be saved. So, we're getting war clawed. I like this, I like this graphic. Is this Warhammer? Yeah, Warhammer 40K right here. I never been a Warhammer guy. There was another story in Bloomberg.

Starting point is 00:53:52 Yeah. That hackers used Claude to steal 150 gigabytes of Mexican government data. That's crazy. They told Claude they were doing a bug bounty. Claude initially refused. A hacker just kept asking. Claude helps and manages to successfully steal some documents. Apparently, it's four state governments,

Starting point is 00:54:19 195 million taxpayer records, voter records, government credentials. Has the Mexican government commented on this? Like, what does the hacker breach Mexico's federal tax authority in the National Electoral Institute? Claude. Claude initially warned the unknown user of malicious intent during their conversation.

Starting point is 00:54:40 Anthropic investigated. The claims disrupted the activity and banned the accounts involved. The company feeds examples of malicious activity back in the Claude to learn from it. In this instance, the hacker was able to continuously probe Claude until it was able to jailbreak it. I was listening to someone talk about

Starting point is 00:54:58 like, like, I, like, the ability to jailbreak has generated me, like, tens of them. thousands of dollars in profit. It was kind of like a hustle, like, a mindset guy. And I was just laughing because it's like, whatever you're doing after you jailbreak it is probably not good. And so you should probably stop. But he was talking about like, I can sell so many more courses now that I've jailbroken Chad GPT or whatever. Durand says, not to worry, they'll hit usage limits before anything bad can happen. This is, there's so much more anthropic news in here. Wow. Did LesserRong ever predict that the first big challenge to alignment would be the U.S. government puts a gun to your head and tells you to turn off alignment?

Starting point is 00:55:42 Yes, that has to have been considered on LestRong. Absolutely. This was number one, right? No? Number, I don't know. I don't think so. This was like, I don't know. This was very early. What if they tell you to turn off the systems? This has been my take for a long time. It's just like, like, we live in a democracy. If AI becomes deeply unpopular, like you can vote to just turn off AI like we did with nuclear power plants. This person is saying turn off just the alignment part. Oh, okay. Unalign the model, but keep the model. Yeah, yeah, yeah, yeah.

Starting point is 00:56:13 Crazy, crazy stuff. Do you want to go through any of Dean Ball's posts? He's been doing a whole breakdown. We should have him on the show and have him break it down for us because there's so much more context here. And he's been doing a great job analyzing the whole situation. Yeah, we can jump forward. Quickly, let me tell you about fin.com.

Starting point is 00:56:29 I, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.aI. And I'm also going to tell you about TurboPuffer. ServerLicactor in full-tech search, built from first principles and object storage, fast 10x cheaper and extremely scalable. Dylan says if these clankers don't get their act together, they're going to be replaced by humans. Six months tops. That is true. This was interesting.

Starting point is 00:56:56 Rob Wiblin had a guest on his podcast, the 80,000 hours. podcast and the guest is talking that saying if every AI lab is working to make their AI helpful, harmless, or every AI lab is working to make their AI helpful, harmless, and honest, the guest thinks this is a complete wrong turn and aligning AI out of human values is actively dangerous. And Josiah Botch says today a nominative determinism because the guest's name is Max Harms. Max Harms. I feel like that name, maybe you've got to go with Maxwell or something.

Starting point is 00:57:39 I don't know. Well, yeah, Max really hit the global lexicon this year in a big way. So maybe he'll adjust. But I want to listen to the show now. Okay. Let's see. So Shield Monot last, yesterday, said, who is buying PayPal?

Starting point is 00:57:57 Because PayPal has been trading down precipitously, but then jumped up 9%. He said it has the potential of being one of the greatest distressed value opportunities in fintech history, down 85%. It's still generating $5.5 billion in free cash flow, has 400 million customer accounts with bank info, checkout buttons on millions of merchant sites, and a peer-to-peer brand with Venmo. They have lots of desirable assets for Stripe, consumer-facing checkout, bank account details for hundreds of millions of consumers, a branded Venmo, or Apple, a good compliment to Apple pay for e-commerce penetration, since they never got social payments working, would get Apple back in BNPL.

Starting point is 00:58:41 And at 1203 Pacific Time, you'll post to this? It's so crazy that Apple, that he's saying Apple never got social payments going. Why? Because this just would have seemed like a slam dunk saying you have the I-Message network, you have the iPhone network. I would say 90% of the time, if I'm sending like a Venmo-style payment to somebody, they have an iPhone, and yet, like, it doesn't feel like Apple Pay. I just don't use Apple Pay, hardly ever.

Starting point is 00:59:13 Can't I just send you a dollar right now? Yeah, that's what I'm saying. It's so, so easy, and yet Venmo has still done quite well. I just sent you a dollar. Did you get it? Let's see. Applefish. It's coming in.

Starting point is 00:59:28 I got it. You got it. Thank you, John. Yeah, no problem. Thank you. It is, that was a remarkably easy workflow. I am shocked that that hasn't taken. John, do you got a dollar?

Starting point is 00:59:41 Do you got a dollar? Actually, no, I gave my last dollar. That's what I thought. Still, still need some work getting better. Okay, let's see it. Let's see it. Can you do it? Oh, no.

Starting point is 00:59:51 Disaster. No, no, no, botched. Disaster. And so the news, of course, is that payment payments processor, Stripe expresses interest in Stryl, which would be very, very exciting. And I could see this being very good for them to combine. I don't know. I haven't dug in too deeply, but it feels very bullish.

Starting point is 01:00:12 Great leadership team at Stripe, founders that have been working so closely in the business, business community, startup community, tech community, understand the future, understand AI. Yeah, the question is, would there be much pushback on, on the antitrust side, right? These are two online payments processors. There could be some, I know a number of groups online would be concerned around just concentration, specifically because you can imagine

Starting point is 01:00:41 if PayPal were to be owned by Stripe. That's one, if you get, you know, there's people that get effectively, like, debanked from one payment processor. Yeah, and, and. There's something there. Also, I mean, just the size of the ticket is pretty high. $40 billion market cap for PayPal right now. Stripe, of course, is at a 159 now, so not an insignificant

Starting point is 01:01:05 portion of their market cap. And it's not like, I mean, Stripe's doing fantastically, obviously, but I would be surprised if they had $40 billion a cash laying around. And as we've seen with the Netflix, Paramount, Warner Brothers, debate, the nature of the deal does matter to shareholders. Even more complex when you're getting stock in a private company and you're a public. PayPal's generating $5.5 billion of free cash flow. So that could finance the debt. Combining it with Stripe would easily be able to finance the debt. Yes, but they're still financing risk.

Starting point is 01:01:35 Especially because every lender would be looking at execution of Stripe. Yeah. And just think, okay, that we're going to get our money back. I'm just thinking, like, if you're a PayPal shareholder right now and you're looking at the stock that's down 85% with $5 billion in free cash flow, 400 million consumer accounts, there's a really, really good chance that you're like, I think this thing's going to double in the next year. Like, I think that the market overreacted, the strength is going to be revealed, the network effect is going to be processed by the, by the, digested by the market.

Starting point is 01:02:07 And we're going to wind up being an AI winner. And so maybe that's right. Maybe that's wrong. Maybe not every shareholder, you know, feels that way. But it's certainly possible that there's plenty of shareholders that are like, yeah, I invested in an $80 billion valuation. It's at 40 now. I think it's going to come back.

Starting point is 01:02:22 I don't want to take this massive haircut right now just because it's down. And so actually getting that deal done, what would the premium need to be? What would the structure of that need to be? Would they go for a high debt buyout? Really quickly. Let me 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.

Starting point is 01:02:47 Perplexity computer. Computer. Computer. Computer. Launch a new app. What is perplexity computer? Let's pull up this video. Perplexity, the official account says,

Starting point is 01:03:00 Perplexity computer. Computer unifies every current AI capability into one system. It can research, design, code, deploy, and manage any project end to end. Okay. Hmm. So, it should be able to get a soundboard app in the app store. Right? Manage any project, code, deploy, design, research.

Starting point is 01:03:25 should be able to do that from start to finish one prompt soundboard in the app store using the tbPN sound effects which are available online which we have up there this is a good benchmark let's give it a try and you can give it a try at perplexity go check it out uh anyway satrini people are still talking about satrini vibe laundering on satrini research wait before we before we go on what uh very curious i'm just very curious to see how this does. It feels like the, again, going from consumer LLMs to a net new product that is objectively just as competitive. And we'll see. We'll see. Okay. Anyways. A lot of this stuff, it's way too, way too early, but seemingly shifting focus away from the browser.

Starting point is 01:04:25 Well, Annie is taking some shots. It's Satrini here, it looks like. Do you know Satrini has a business entity fund that went from one investor to five in the weeks before publishing his speculative fiction on AI damning the economy in June, 28, and that they're invested in long AI via humanoid type robots?

Starting point is 01:04:44 I wrote about it. Interesting. People are really digging into the Satrini thing. I think the Walser Journal had did have some good coverage. Is there anything else? If Trump mentions Satrini at the state of the union, Rachel, this is a wild post. A gourzillionaire. I'm going to be a gorzillionaire. Is this AI written?

Starting point is 01:05:03 Clearly not. I love the level of typos here. If Trump mentions Satrini at the state of the union, I'm going to be a gorzillionaire. And Satrini is wrong. The market will be sky high in 2028. You can imagine Trump saying that. That'd be very funny. And Citadel securities just report.

Starting point is 01:05:22 published it, or did they just use the same term? Or are they referencing the 2028 global intelligence crisis? Because they published a macro strategy note called the 2026 global intelligence crisis. Yeah, they're taking it in a different direction, it looks like. They say in spite of current displacement narrative, job posting for software engineers are rising rapidly up 11% year over year. Let's go. Jeff is Paradox. The software engineers become more productive.

Starting point is 01:05:57 You want more of them. Every company needs a software engineer. Do most podcasts have a software engineer on staff? Probably not. They do now, thanks to Tyler Cosman. And in some way, the cost of an entry-level software engineer could fall dramatically to making more businesses, just because suddenly someone can be very effective,

Starting point is 01:06:17 even if they haven't even done an internship yet. They're just good at using the tools. Yeah, yeah. Kathy Wood, we didn't cover this yet, she put Satrini's AI thought piece, put it in quotes. Kathy would clap back at. Well, it's funny because Kathy is like the perma bowl, and Satrini was bear posting, obviously. Yes. And so she's obviously going to be quite frustrated with any sort of bearish narratives.

Starting point is 01:06:45 She says Ark invested forecasting that AI will cause an explosion in entrepreneurial activity, a productivity boom and acceleration in real GDP growth and much lower than expected inflation. Short-term dislocations and frustration should give way to great opportunities if individuals harness powerful AI tools to solve problems and create new markets. This tracks with what the Collison brothers were saying yesterday. They're just seeing like explosion of new company creation. They have the visibility into that through Atlas. They're doing, I think it was a quarter of all new C-Corps in the U.S.

Starting point is 01:07:18 are going through Stripe Atlas, which is just absolutely insane. Starting an incorporation tool, which is theoretically a commodity, right? Any lawyer can spin up an entity. You could do it with legal zoom forever. There's a bunch of other platforms. Did you ever use Clerky? Clerky? That was almost like a YC incubation.

Starting point is 01:07:39 Yeah. Yeah. The problem, the reason that Atlas fits so well into Stripe is it is the perfect wedge into payments because you create a company. now you need to be able to accept money. So it makes sense for them to own and operate, but these businesses have not, like a standalone, it's hard to, you can't build a venture business

Starting point is 01:07:59 office just incorporation. I wouldn't be surprised if you broke out the software R&D that went into Atlas and looked at the profits from Atlas, that that as a core business is actually not that great of a business. But the product is fantastic because they're able, to pull an amazing design language off the shelf, an amazing front-end, you know, Ui-Kit off the shelf, all of the distribution and servers and infrastructure

Starting point is 01:08:28 off the shelf because they have that. And then they're able to invest a ton in actually developing the product. And if it monetizes mediocrely, it doesn't matter because they're going to monetize along your 50-year journey running that company or whatever. So it really is a beautiful synergy with that product. I'm a big fan. Uh, bestsellers on substack for finance are all Dumer.

Starting point is 01:08:52 We got to do TBV. And of course, the treaty is not in, this is so obvious. No, no, this is, yeah, this is, we need a truth zone this a little bit. A Dumer. He's not a Dumer. There's very A. There's very A.I. Bullish. Very AI bullposts.

Starting point is 01:09:03 But definitely shot to the top of virality and top of the charts on the, on the back of Doom. And this is true. I live this on, on YouTube. Like, you put a negative title up and you just get 10 times more views. But they're lower quality. And so you got to balance all that out. It's really hard to go viral with something like, everything's fine. Everything's going well. Don't worry.

Starting point is 01:09:26 Don't click this because you're scared. Click this because everything's kind of the same as it always has been. And you're going to be fine. And I say this stuff's cool, but it's not really going to change that much. It's going to be pretty incremental. Like that is not getting clicks. You need to be telling a tall tail. You need to be spinning a yarn.

Starting point is 01:09:45 It's a bull market in yarn spinning. folks, get ready. Get out the yarn and start spinning. Also, get out cognition. They're the makers of Devon, the AI software engineer, crush your backlog with your personal AI engineering team. So, it's news from Steve Schwartz. Get the gong. Okay. Hit me. Tell me. Stephen over at WAP says we're excited to announce that Tether, the largest stable coin company in the world, is making a strategic investment of 200 million into WAP valuing us at $1.6 billion. Billion partnership with Tether marks a major step in building the world's largest internet market. Tether is committed to enabling everyone in the world to participate in the new internet economy. The way humans

Starting point is 01:10:27 work and create value is changing fast. The world needs both an open internet market, giving people a platform to conduct business, as well as a transparent payments network. Tether and WAPT together will work to bring a sustainable income to billions of people throughout the world. There's enormous opportunity when you combine Tether's global scale and wallet technology with WAPS community of next-gen entrepreneurs. Yeah, it makes a ton of sense. I think WAP is, I'm sure, has been historically challenged

Starting point is 01:10:58 in terms of dealing with chargebacks, right? If somebody joins and buys a digital product, doesn't have a great experience, maybe they're going to their card issuer and saying, like, hey, like, I don't, I take it back, or maybe they feel misled in some way. So stable coins do solve for that. Also just paying a lot of people all over the world.

Starting point is 01:11:20 Yeah. Like it's very clear that the WOP community is global. Fast, cheap, global. Exactly. And so, yeah, fast, cheap global. The first time ever your stable coins was to pay an international consultant or contractor. And you can imagine this being really, really good news for them. So congrats to Stephen over at WAP.

Starting point is 01:11:41 Open AI and XAI, there's news on the court decision. Open AI newsroom says this baseless lawsuit was never anything more than another front in Mr. Musk's ongoing campaign of harassment. The order granting motion to dismiss with leave to amend. Now, this is not the main case. This is a separate case, correct? Yeah, this was a trade secrets lawsuit that Musk. went with after, I believe, somebody from XAI joined Open AI. Got it. And then the judge apparently didn't find anything at all. And again, it was just part of like this kind of lawfare that has been, you know, happening for quite a while now. You printed out 500,000 pages of model weights and the printer ink stacking it up.

Starting point is 01:12:37 No, just kidding. Nobody did that. Mike Isaac is saying what we're all thinking. Ready for this to be over. B.B.H. talking about the Warner Brothers Discovery, Netflix. It's in the paper every single day. Every single day.

Starting point is 01:12:53 Paramount increases WarnerBid. We get it. You guys want to acquire this company. Just make a decision. Make a call. And then call us when it's done. And then start putting out some good content because I'm ready for the next Superman.

Starting point is 01:13:08 I'm ready for the next Batman, the next Dark Night, the next Joker film, something like that. Let me tell you about Label Box, R.L. Environment's, Voice, Robotics, Evals, and expert human data. Label Box is the data factory behind the world's leading teams, AI teams. And we have Max Meyer from Arena Mag in the Restring Waiting Room. Let's bring him in to the New York at Ultrodome. How you doing, Max? Hey, guys, how are you? I'm great. Where do you think Warner Brothers should land?

Starting point is 01:13:33 Are you on TV? Netflix? Oh, is there going to be a Dark Horse Bitter? Tell us. I can't comment on any possible bids by the Intergalactic Media Corporation of America. I'd love to see it. But hey, you know, maybe maybe, maybe, maybe, maybe, maybe, maybe, maybe, maybe, maybe, maybe, should should should should should should should should should should should should should should should should, you never, you never, you never know. Yeah.

Starting point is 01:13:56 Yeah. I would I could I could imagine a DC Comics arena magazine crossover episode, Batman, Superman. I believe James Bond is with Amazon now, but tell me about the latest edition of Arena Magazine. Is it a spy formed, correct? Yeah, so from the very beginning, we decided to give the issues three digits each, just to account for centuries' worth of quarterly magazine space. So issue 0.01,002. And so it happened that our seventh issue is issue 0-07.

Starting point is 01:14:37 And so, you know, I didn't think we could fill it all with espionage. So we sort of added like space as like a secondary theme. As it turns out, space espionage. Space espionage. It's like Arena Magazine, space opera espionage, satellites, radars. So much of the intelligence collection these days is. actually being done from orbit and not using sort of the traditional human-to-human methods. And it turned out really well.

Starting point is 01:15:10 What's your favorite spy story, real or fictional? Oh, gosh. Some of the stuff that the Israeli Mossad was doing in like the 60s and 70s is pretty crazy. I mean, a Eichmann, who was a Nazi war criminal, was living in Argentina after World War II. his son went on a date with someone who was like is this Adolf Eichmann and turns him into the Mossad

Starting point is 01:15:37 they go to Argentina they kidnap him dress him up as a flight attendant drug him put him on a plane to Jerusalem and then put him on trial you know some of some of that some of that stuff from the 60s and 70s

Starting point is 01:15:52 is like the most daring you know intelligence operations the bin Laden I've always been a fan of the Stuxnet story. I always thought that was so interesting in the modern technology world of like dropping, I think they dropped USB sticks with a virus in the parking lot. Someone picked them up out of curiosity, plugged it in, and that jumped the air gap network because the computers inside the facility were not connected to the internet.

Starting point is 01:16:21 So there was no way to hack them remotely. So you had to just get someone to accidentally plug in the wrong USB stick. I mean, Hezbollah was purchasing explosive laden pagers just because they thought they were getting like a great discount from this, from this, from this, from this Hungarian company. So, so, yeah, what's the intersection with Arena Mag's usual topics of conversation? Are there American defense tech companies that are highlighted? Like, where else did you call on this? So one of the stories, and we're going to put this out. probably like 10 days from now, super cool company called Umbra down in Santa Barbara.

Starting point is 01:17:02 They build synthetic aperture radars, which is actually part of what I did in school for geophysics and whatnot. Basically, these are like incredibly sophisticated radars on satellites that can image the whole earth day and night, 24 hours a day. They can see through clouds. And the resolutions are getting like smaller and smaller. And so we always have American startups, American companies in the magazine. We've got a good amount of essay and historical content as well.

Starting point is 01:17:34 And I think that espionage sort of secrets spying is a topic that serves both pretty well. What kind of resolution are we talking about? Would Umbra or a competitor be able to tell me how many fingers I'm holding up on a given day if I just help? It's not that low. I think their record is 16. centimeters, just like this. The way that I described it is they released a few years ago a photo of the old dull pineapple plantation in Hawaii. And at 25 centimeter resolution, you can see individual pineapple plants. Certain smaller pineapples would be too small to see with

Starting point is 01:18:18 that radar or whatnot. Yeah, so you're seeing cars, not license plates. Yeah, yeah, yeah, no, you wouldn't And there wouldn't be anything about a license plate that, like, would reflect a radar or whatnot. Really, you're looking to resolve objects. Penguins, that's a good one. You can see, you can, you can, very difficult

Starting point is 01:18:38 to stay on an ice shelf and count penguins, but we're very interested in what penguins do. There's this geeseo penguin out there that's like, I know that I'm being tracked. I know I'm being tracked. I can't prove it, but I know. I can just. No, I do.

Starting point is 01:18:51 Yes, the Herzog penguin could be tracked by radar these days. But, you know, the resolutions have gotten so good over the course of the last decade that there are all sorts of things that you can do today. Most of them will probably never know about because the people doing it are the Central Intelligence Agency, national geospatial intelligence, and the Army. But yeah, you know, there's all. sorts of crazy stuff. There's all sorts of crazy stuff in space these days, and whether it's radars, extremely complex cameras, listening devices, there's a lot of interest, and so many of

Starting point is 01:19:33 them are secret. Are you bullish on data centers in space? I don't have a strong opinion about it. I think it's possible that you have to put some stuff up there because of like politics in a country like in a country like in a country like in a country like the U.S., but if you think about it, there's not like a big difference between trying to send them to space or just sort of places where there aren't local politicians who can stop it. Space doesn't have like a city council. Anywhere where there's like a city council is going to be a risk.

Starting point is 01:20:09 Yeah, yeah. We talked to a company called Panthalasa that is doing tidal energy harvesting. So it's like basically the size of a container ship or a cruise ship. but turned vertically in the ocean. And then as it goes around Antarctica, and as the tides bob, it uses that to generate electricity, which then can be used for anything,

Starting point is 01:20:35 but Bitcoin mining was the big topic de jure years ago. Now it's AI inference. And there's a lot of other places where I think there might be stranded energy that might be easier to maintain, still very difficult, but available. and probably less regulated.

Starting point is 01:20:54 Yeah, the Dutch were very interested years ago in these, like, using the motion of the tides. It's sort of always just an alternative to the thing that is cheap and always works, which is firing up new natural gas plants. But when you have, like, political equations to solve local politicians, subsidies, then there are going to be all these crazy things.

Starting point is 01:21:16 The benefit for a company like that may very well be that there's, again, there's no one to come. come and protest you while you're sailing around Antarctica. Whereas like you try to build a data center in New Jersey and all help breaks loose. So you have to really, really go to the ends of the earth. We were debating this and sort of going back and forth on the New Jersey protests combined with Trump's comments at the state of the union about companies being, he didn't even say mandated.

Starting point is 01:21:50 He, of course, sort of invited to build their own power plants. And so I'm interested to hear your take on how well do you think that will be received? Because a lot of the protesters might say, well, I didn't want a data center, but I definitely don't want a data center plus a natural gas plant. So this actually makes me worse off. But then there are some people that might say, hey, if you're going to do solar and, you know, something wind, that actually offsets my concern, which was that energy. prices would rise in my town. Yeah, yeah. I mean, I don't remember whether it was Microsoft or Amazon, but one of the two has sort of proposed taking over Three Mile Island, the old nuclear plant. I don't think it's a coincidence that crazy activists will show up to protest both data

Starting point is 01:22:38 centers and nuclear power plants. And so to them, there's sort of nothing worse than generating more energy and then using it for some sort of grand industrial purpose. I understand. I understand the political economy of people being worried about the data center demand, influencing prices, but it's not actually true. And you just have to look at the map of California versus Virginia. Virginia is the data center capital of the United States, basically. And it has utility prices that are more or less in line with where you would want to be. Californians have gone up massively over the past few years.

Starting point is 01:23:17 And it doesn't take long to investigate why. It's because they're shutting down nuclear. It's because they're making it difficult to do cheap energy. Lowering prices across the board, affordability, you really can achieve it by just letting markets work. Almost all of the so-called affordability options are, in fact, going to increase prices, especially when politicians are the ones coming up with, this is how we're going to make energy more affordable by forcing all of it.

Starting point is 01:23:50 these new rules or whatnot. No, it's not going to work. When you have like this massive industrial thing that's taking place, if it can create like a massive supply boost, then who's going to benefit from that glut? It's going to be all of the consumers who also want to use natural gas power or whatnot. And there's all this increased supply. How are you thinking about Arena Mag and the balance between contributors, full-time writers, researchers, like, how are you? How are you you designing the shape of the newsroom? Okay, so the latest one is the biggest issue ever. It's 128 pages.

Starting point is 01:24:29 We used over 10,000 pounds of paper in printing it. You know, we have great contributors. We want people to send us more. I would say, you know, at the beginning, we had to go and sort of hunt down every single article that we wanted. We're very lucky to get a lot more submissions these days. But the truth is we have a lot of readers who actually

Starting point is 01:24:52 read the articles in print and don't want to get spammed 10 or 12 times a day with new articles. And so Arena is like a high-end media business where people pay us to leave them alone in a certain way where they love the quarterly magazine,

Starting point is 01:25:09 they actually keep it. It looks great on a coffee table. People keep it for their offices. And we're working on some other sort of high-end printed products that have a mix of contributors, so to speak, and other ways and other ways to put things together. I don't think it's going to be a, you know, a hundred-person newsroom. Yeah. Leather-bound Groghapedia. How about that? Yeah, I thought, I ran the numbers, and, you know, depending on the type size, I think there's, I think there's some way where you could publish

Starting point is 01:25:46 the Bitcoin ledger as like a law code or whatnot. It would feel like an entire wall. Actually, I'll tease something. We're going to be announcing the very first Arena Books coffee table book over the course of the next few weeks. There we go. I just got the first box of them on a plane from Europe, printed on Italian paper, bound to be very nice.

Starting point is 01:26:13 It's going to be... unlike anything that people have ever seen, I think, and hopefully, you know, look great on coffee table books in the innovation world and starters. Or coffee table books. You'll be on the top of the stack. Yeah. You could stack them, yes. Yeah.

Starting point is 01:26:35 Well, congratulations. Do you have anything else? I did want, if you have 60 more seconds, to get your take on how you think. how you think AI impacts original reporting and storytelling. Because in my view, it's potentially great for an arena mag because there's so many more contributors that'll think, hey, I have this thing that I want to talk about. I don't really have an outlet or a platform myself,

Starting point is 01:27:03 or maybe I do, but I want to share it in print. And I can produce a great story in a much less time, even if it's like, hopefully heavily, heavily written by themselves. But, and we've talked with other, like, plenty of other folks where I think that even in, it feels like today, an AI, no matter how good the voice agent is, if an AI calls you and you don't know who the person is and they're just kind of trying to mind you for information, there's not going to be a lot of information flow, which means that I think that great journalists and storytellers will have great, great jobs long, long into the future. But how are you thinking about it? I long for the day when the AIs are actually a better writer than I am, but it hasn't happened yet. I'm honored to be scraped by the AIs so that my voice will live on. I'm a super user of all of these platforms for automating all of the stuff that makes the enterprise difficult to do,

Starting point is 01:28:02 which is sometimes dealing with complicated workflows and research and whatnot. I think that there is something around certain sort of like newswire style things that could be automated super effectively where if you have like a newsroom of people where there's like even like 20 minute delays or whatnot that could be that could be that could be improved by like immediate algorithm algorithmic stuff

Starting point is 01:28:32 but but I think that as the like amount of high of low quality content on the internet goes up, people are going to look for things that they trust. And it doesn't necessarily mean print. For us, print is like a very good place of trust, where the fact that we're actually taking several weeks in a giant factory with a bunch of paper to double, triple check everything, it's a level of care that goes into it that reminds people that like things can be done by humans in this really dazzling way.

Starting point is 01:29:07 And, of course, you know, there's tons of Claude co-work and other stuff going on beneath the surface. But we wouldn't want to let that touch the writing if people are going to be paying for it. They should be able to get that stuff for free on the Internet and pay for high-quality stuff. Yeah, but at the same time, at the same time, I feel like the value where you're saying, in some ways, the value of an editor goes up a lot because there's infinite content. And an editor is deciding, in this case, with Arena, what actually makes it to print. Yeah, yeah, yeah. I mean, a bunch of us at Arena were all editors at the stamp review. And so it's like you learn how to editing is definitely a skill in itself. And being able to like point out why someone else's writing is bad, then you can point out how your own writing is bad.

Starting point is 01:29:54 And that's how you actually get good. I would say one of the feces around like wanting people to contribute to Arena and compiling these issues is that like, while it's a great thing that anyone can just sort of post. out there, there's a reason why, like, the legacy institutions that have super high professional standards are extremely effective. Like, people, Bloomberg, Wall Street Journal, New York Times, even the ones that people dislike for ideological reasons, like, they have a seriousness to them that makes their messaging super effective. And a lot of that is because they're extremely effective editors.

Starting point is 01:30:29 I will say, Abrina probably invests slightly less in copy editing compared to some other institutions. I think it's a sign of life that we occasionally find typos in the print magazine, but we spend an inordinate amount of time actually editing to make it good. When people pay you for something, you know, there's an old joke. Boris Johnson, the former prime minister of the United Kingdom used to be a news editor, and he would apparently tell his staff when something was bad. You know, the readers pay us. We don't pay them.

Starting point is 01:31:06 And so when the readers are paying us, it's got to be good. And there's a lot of stuff that is like assisted by AI or where the research has been helped with it. Transcript editing is like a super helpful one now. And like I can walk into like a company with my iPad and record five hours of interviews. And both Claude and Groch are now very good at taking. all of those and doing sort of very light style edits or fixing the sort of verbal pauses or

Starting point is 01:31:34 whatnot, which would previously take me like many, many hours to do. So that's an example of like, my job's like a lot easier, but people are paying us for like a high quality product. And so we want to make it as good as possible, both in the writing and especially in the art as well. We love our non-reading customers. You know, there's a, there are a lot of people who love Arena who haven't read a single article. That's the coffee table. They can't read a speech. That's exactly, that's exactly.

Starting point is 01:32:05 You don't, you don't, you can just look at the pictures. Well, you can find it at aranamag.com. You can subscribe to the print edition for $99 a year. It's an absolute steel. I really think it's a steal. I was telling people the other day. You know, I spent three months in an attic in a Texas summer going through different, like, paper samples, choosing the exact.

Starting point is 01:32:27 size. I think I nailed it. It's a, it's a best. Thank you so much for coming on the show and sharing this with us. We will talk to you soon. I love. I love the vest. The vest is fantastic. Every media man needs a look. I bought 12 sweater vests on eBay earlier this year. Okay. And it's working. It's working. Well, we'll talk to you soon. Have a good rest of your day. This is arena. Goodbye. Great to see you, Max. Let me tell you about Cisco. Unlock critical infrastructure for the AI era. Unlock seamless, real-time experiences and new value with Cisco. We were talking briefly about Warner Brothers.

Starting point is 01:33:09 The Kalshi Market is mooning on Paramount. The Paramount and Netflix have been going back and forth. Paramount's now at 61% chance that they will be the one to successfully take over Warner Bros. Netflix, previously up at 70% back in December when we started talking about. this, now they're down at 30%. The Ellison's are doing the Ellison thing. It ain't over till it's over. Let me tell you about console.

Starting point is 01:33:36 Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password recess. And without further ado, we'll bring in Ben Laird of Laird, Hethout Ventures. He's the manager partner there. And he's returning to the show. We had you on a couple weeks ago, I feel like, but great to do. you like, but great to have you back. It's been months? No. When was it?

Starting point is 01:34:01 Let's say like six weeks. Okay, six weeks. This is much more legit. It is great to have you here in person. It's a real place. Not AI. How long are you in town for? For the week. Although I was supposed to be here three days ago. It's up front. It's up front.

Starting point is 01:34:14 Did you get snowed in? I got snowed in and had like six flights canceled, five flights canceled. I was fortunately not at the airport. Maybe I don't travel that much, but I actually think I've never been in that situation. That's the charter. The charter gods. The charter gods. The charter god's telling you. It's time to. It's time.

Starting point is 01:34:29 Like, thank you, please. Okay, Gulfstream salesman. Golf stream sales in over there. Seriously. But, yeah. Yeah, it was, ran into somebody at coffee this morning. And they told me it was up front. It's up front.

Starting point is 01:34:44 Everyone on the plane was going up front last night. Yeah. It's a big event. It's a big event. They do a great job. It really is a, it's, you know, it's one of the few times when you can go out and see everyone who works, not quite everyone, but. the majority of people that I would consider colleagues in one room for a day.

Starting point is 01:34:59 It's actually really... Is there cross-pollination outside of technology with other industries? I know up front in the past has brought Hollywood and L.A. folks, but there's other conferences where it's more like Hill and Valley, right? So they bring the politicians out. A little bit of that. I mean, I think they do play the L.A. card pretty hard. And Upfront's brand as a fund is very sort of L.A. centric.

Starting point is 01:35:22 Yeah, yeah. the event, they definitely like take advantage of the fact that there's that kind of talent out here. I don't think a lot of speakers are flying in other than people from the venture world. Yeah, yeah. The tension between Hollywood and the people funding AI, I could see that being interesting. Yeah, you know, we're actually in a company that's building a sort of AI-first movie studio called Staircase. And what they are doing is trying to use Hollywood talent. So they're using like SAG talent, real actors, real voices, but then enhancing it with AI.

Starting point is 01:35:58 And they're getting some, they're getting a little bit of pull out here in a good way. Whereas I think if you're sort of, if you're not willing to use Hollywood talent and pay Hollywood talent through the unions, you run directly into a wall. And by the way, like, this is, this is not going to end well if Hollywood doesn't get with it. I mean, at some point it's just going to get steamrolled. There are going to be, you know, look at like A-24 bringing in Scott Bell's. I just looked at it as when I, living in L.A. for the last eight years or so, I've met so many directors and producers that are, that, that were kind of frustrated with the lifestyle of, okay, I have this job that I love doing. But then multiple times a year, I got to fly to the Middle East and just be posted up in a foreign country away from my life.

Starting point is 01:36:47 And there's some element of that that I think is kind of like core to the movie. industry. It's like, you know, I think there's some probably will always be nostalgia around it. But we were talking probably a couple weeks ago at this point. If you're an actor and you get the, and you're, and you lean into AI, you can potentially get a lot of the benefit while kind of compressing your actual like time doing the work down by quite a lot, right? Because it's like, hey, come in, I don't know exactly what staircase's workflow look like, looks like, but I can imagine we get to the point where there's like certain scenes that are done like, you know, legit, the old-fashioned way. And then there's certain scenes where it's like, yeah, we're

Starting point is 01:37:29 just going to use a lot of- For staircase, none are done the old-fashioned way. So everything is- Do they do like a capture process? They do a capture process, but never always against a green screen. So never against, or not, I don't know if it's against a green screen or just against, against no screen, but with tracking movements and whatever that would be. But they're not ever going and shooting out in the wild. And the technology is changing so quickly that what they can create today relative to what they could do six months ago is magnitudinally different. And if you just continue on this curve, at some point pretty soon,

Starting point is 01:38:04 it's going to be ridiculous to think that you're going to go to the middle of the future. Yeah, Matthew McConaughey has had some good leadership around this of basically just being like, hey, we have to embrace it, it's coming, it's just too efficient, it's too productive, the idea of like, hey, we need to shoot. We have like a three minutes total that's in the setting. We're going to bring 100 people out there and spend weeks doing this thing that could be made, you know, in not one prompts, but made in a series of prompts and with a lot of editing. Well, and there's an insatiable appetite for just like more content. I mean, you guys were just

Starting point is 01:38:39 talking about the, you know, the Netflix or Paramount setup. And like all these platforms just want more and more and more and better and better. It seems like there's no, there's no limit to the amount of content that people want. And so, uh, yeah, the, the average user, how many times have you opened a streaming platform and just been like, I don't like any of this stuff. Which is amazing because there's so much more content created today than ever before. And still, I flew out here yesterday. I turned on my Netflix and I'm watching a show from like 11 years ago.

Starting point is 01:39:11 Yeah. Yeah. It's ridiculous. George, you watched a movie last night, right? John was making a joke about the movie Borat which I loved as a kid. By the way, which you should still love.

Starting point is 01:39:22 Yeah, it's a fantastic movie. But I went on Amazon and I bought it because I was like I should own this. It's a cult classic at this point. And it was not as funny as I remembered it when I was 12, which was painful to me. But I'm curious on talking generally maybe or about staircase.

Starting point is 01:39:42 Right now, a movie studio will allocate, let's say, $50 million to make a movie? Yep. How do you think that number changes over time? Because in my head, I think eventually it could be five people. You know, you have like writers, you have like whatever the new director's role probably stays somewhat similar. And then you're pulling another talent for audio and video and all these different things. but how low, and the reason I don't think that's a bad thing is there's so much demand for content

Starting point is 01:40:17 that theoretically that $50 million budget would still exist or maybe even increase, but it would just be spread across. But this is like, this is the question not for only Hollywood, but for everything, which is like will, you know, will AI make things bigger or small? Yeah, when you have, when you have deflation, does that create? Yeah, I mean, it applies to every industry. I think probably with Hollywood, you'll see, frontline talent

Starting point is 01:40:42 continued to demand huge premium. So maybe that $50 million dollar budget goes to $30, but Brad Pitt still makes $25 of it. Yeah. And the rest of it, you can do much less. I don't know if it's fewer people or the same number of people being much more efficient

Starting point is 01:40:57 and working in half the time. Like maybe you're doing it more quickly. Maybe you're doing multiple projects at work. I don't really have all works. A question around the talent side that I'm interested in is one thing for Brad Pitt to be like, cool, you're going to make this movie with mostly AI, but I'm still getting my same rate.

Starting point is 01:41:12 Otherwise, I'm not going to be a part of this because some other movie studio down the road is happy to pay me what I think I'm worth, and I don't care if it's going to take me way less time. The question is for new talent, the people in L.A. that are working as a waiter and just like, you know, constantly trying to get into the game. What kind of leverage? Do they still develop, can they still develop real star power over their career? career and get pricing power or does that or is like the the amount of people that can be a star fragment even more like does there become more of like a I don't know if how much of a

Starting point is 01:41:50 middle class even exists anymore in in Hollywood like specifically on the on the actor side well I think I have a few thoughts on this one might be that probably there is more of an impetus for talent to be able to not only get famous through the channels that Hollywood provides, but to use social media, to use, like, build your own distribution to be able to demand sort of like that premium because people think that you can move the market, you can drive sales or you can drive views through your own stardom. People still care, doesn't matter what the movie's about or who the actor is, they care about who that person is outside in the real world, too, and that influences their experience.

Starting point is 01:42:36 I think that that's going to be a big part of this for that. But also, Hollywood is going to move more slowly than just about any other industry. Part of it is the role of the unions and how embedded that is and how that kind of content gets made different than certainly most other industries that don't have that kind of bureaucracy or lock-in. And also, you know, it's an industry that's run by moguls.

Starting point is 01:43:01 It's run by old people who are like generally, slower moving. It'll be interesting to see. Tycoons. Tycoons. How do you think about vertical short form? I saw a crazy video of someone doing a movie screening

Starting point is 01:43:17 in a theater, but for vertical video that they made. That sounds terrible. Which is insane. And it was like, it was really crazy because it was like, they don't really make projector screens that are super vertical. So you're in this like massive room. But normally you're at a really wide theater and then the

Starting point is 01:43:32 screen matches the seeds. but it was like just off to the side, this like vertical screen, kind of like a TV we have over there. But it does seem like there's a quicker pace of adoption for those like polished. What was that Chinese app that has vertical short form? Like the drama?

Starting point is 01:43:51 Yeah, the short. Real short or something. Real short, real short. And then there's AI versions of that. And that feels like more track for that category once a week. You do? For the last year. Okay.

Starting point is 01:44:01 I mean, it is. Oh, I get it once a day. Okay. So you have a better deal for that. I'm kidding. No, but it is wild how, by the way, the number of pitches, it's funny, you guys want to talk about media with me, the number of pitches I still get from people like, Ben, you're like a media guy. I'm like, please leave me alone.

Starting point is 01:44:17 I'm not a media guy. Like, everyone just, like, I'm sorry, I did this. But there is this moment where this is also like live shopping was another category that you saw massive in China. And short form drama, enormous. industry in China and everyone's like, cool, it's going to be here in the U.S. tomorrow. And like 10 years later, it's still not really here. Yep. Yeah.

Starting point is 01:44:41 I will say that with one of the companies, they, like, really forced me to watch some content. And I got hooked on a story about like a woman who fell in love with a man in an elevator. And I watched for like two hours in one minute snippets. Like I see how you can get addicted to it. But I fortunately broke that. Yeah, the question is how do you actually invest against this trend? I think... I think...

Starting point is 01:45:06 Yeah, I think... Because all the content... Yeah, the content wants to be free. It wants to flow to the existing platforms. I can see YouTube creating, like, short series. Like, basically, like, you can subscribe to a series. Keep watching. Yeah, basically, like, hey, you're not even just subscribe.

Starting point is 01:45:26 Like, because the follow button and subscribe button that barely works anymore on any platform, but they might be encouraged to be like, hey, this is a series of 30 videos. It's going to be coming out one a day. You can subscribe and we'll make sure that it comes out. Look, I think this is an interesting space. The difference between an interesting space

Starting point is 01:45:45 and a venture scale space is the Grand Canyon. I mean, it is so massive. Figuring, you know, venture requires the power law, requires these outsized returns. And it just doesn't feel like, sure, you have one or two companies in China, that are massive, but it doesn't feel like that's a category that has a sort of theoretically limitless Tam. And one of the mistakes that I've made in my career and one of the sort of

Starting point is 01:46:12 learnings is Tam really does matter. And yes, there's, you know, you have to sort of lily pad your way there. It's not like every market has to be enormous day one. But most of media has turned out to not be venture scale. And I think maybe all of media is not venture scale. And with AI, Yeah, venture scale if you can build a platform that can compete with the giants. But you need a $5 billion. But how do you feel like, what is that? Right. I mean, this is one of these things.

Starting point is 01:46:39 If someone, by the way, like Jeffrey Katzenberg tried to do this-ish with Quibi. And there are a few people more formidable in the entire world than Jeffrey. And even with hundreds of millions of dollars, like that's not, that wasn't the answer now. By the way, today would be a more interesting time to launch Quibi because of, what's changed in technology. And by the way, I've seen the, like, you know, could be 4.0 pitch too. The competitive dynamics with every other app

Starting point is 01:47:05 that also has short form videos that the creators are incentivized to share the same content across all of them. Those competitive dynamics are still in place. Look, just like working in an industry that face, that, you know, meta and Amazon and Apple and Netflix that, like, more than half of the Mag 7 is interested in is a really, really tough place.

Starting point is 01:47:28 to go and build. Every Mag 7 company except Nvidia owns basically a social network. If you include iMessage, Twitch, LinkedIn, you actually wind up with a media platform at all of them. Right. And like that is, by the way, this is not your traditional, you know, large incumbents who are asleep at the wheel. These are the scariest companies that have ever been built in the history of humanity

Starting point is 01:47:49 who, you know, like, no thanks. How did you process the Satrini virality, the viral? article. Sold everything. Intelligence. I bought a farm in the woods. No. Some raw material.

Starting point is 01:48:05 No, look, we are at a moment right now. I mean, that's this week's flavor. Last week, I think there was. Something biggest happened. Yes. And then there was the counter to it. And obviously, there's a bunch of counter arguments to this one. I think it's indicative of what a scary time this is and just how overwhelmed everybody.

Starting point is 01:48:27 I mean, like, I wake up. up in the middle of the night screaming. I don't know about you guys, just in fear. No, I'm kidding. No, but like, this is wild times. I mean, this is, I look at that article and I think that there is, you can, you can sort of pull the thread and go, yeah, like, oh my God, you are going to see a bunch of these companies who have to cut costs, go, lean in, become their own worst enemy. I think what this sort of doesn't take into account is that there's going to be a bunch of other interesting, amazing new companies that get built that employ lots of people that have a very different growth curve and that it's not just like everything is a race to the bottom. There is going to be all this

Starting point is 01:49:03 amazing innovation that happens counter to that. Also a good counterpoint Citadel put out a report that showed software engineer job openings are up 11% year over year. And so it's interesting that we're getting this like where AI is working the best today and coding is causing an uplift in jobs. And yet people are kind of extrapolating and saying every other job is is, is even though that's not what we're seeing in the data. Yeah, it's interesting. Are you revisiting marketplaces? There was a big debate over DoorDash being AI resistant or not.

Starting point is 01:49:42 You've gotten any DoorDash pitches? Not this week, but I have gotten some DoorDash pitches. I'm just wondering how you're thinking about marketplaces because it feels like there was boom. Most of the great marketplaces got built, all the obvious ones that didn't have massive disintermediation problems. So the dog walker, the house cleaner, that's stuff that gets disintermediated very quickly. But the DoorDash or the Uber, that is something where you're not just going to meet a great driver and be like, now you're my personal driver forever, right? But you will do that if you're like, I went to this app and I found a house cleaner and they come every week. And so I just said, hey, let's stop using the app and cut out the 15% take rate.

Starting point is 01:50:20 But what are you thinking about marketplaces on the earlier side? Is there anything interesting that you're seeing? So I think that there is, when you're looking at marketplaces, we're trying to find marketplaces where sort of everybody wins. Sure. And there's a company in our portfolio that's very early building in the aftermarket automotive space. And this is a category that has millions and millions and millions of skews. there is a question as to, does this, you know, spark plug work for my 1984 Mazda Miata? Or does that one work?

Starting point is 01:51:03 Sure. Most of that industry never came online at all. Yeah. And so you still have to, like, file, you know, like fax in an order or requisition. You do have, you have some large sort of endemic players like AutoZone that are actually quite big businesses, but that still only have a fraction of the inventory. They don't actually know if that. if that piece works for this car when you've also done these three other changes. And that's the kind of industry, very messy, very hard.

Starting point is 01:51:35 But with AI, you can go and send agents to go do some of this buying. So sort of mimic the idea that an industry is online that may never come online. Sure. I think that that's, I think there are spaces that, by the way, and that's also a very large, very sleepy Tam. Like that is not a, that's not a sort of. side pocket hobby. That's one of the biggest hobbies in America. Yeah. That's billion, you know, tens and tens and tens of billions of dollars just in the US. And so much work just to hydrate from like some random skew or some random serial number

Starting point is 01:52:06 into like what is this product actually? And there's probably a manual out there somewhere that has it. Might be on the internet. Might be in a Reddit forum somewhere. But like, and then there's the question of, and by the way, how do I get this installed and can I do it myself? And, you know, is there an AI mechanic? that's built into the marketplace so it can teach you to do the work while you buy. You know, will this company accomplish it? I don't know, but I love the ambition. And I think when we're looking for marketplaces, we want to see ones that are,

Starting point is 01:52:37 I don't want to see an incremental, you know, DoorDash competitor. I want to see one in an industry that really has, that has not yet been disrupted for reasons that were, frankly, impossible before the automation of AI. Yeah. Jordan, you think of what I'm thinking? Me, you this weekend, a couple of cold ones. Mansori body kits on the car. Let's do it.

Starting point is 01:52:59 Secondhand, we get them. This is John's dream forever. We can do some LED underlighting. You got a new car. You don't have... I'll stay for the weekend. You don't have LED lighting underneath that yet. NOS?

Starting point is 01:53:12 Have you considered putting NOS in your car? This is a good option. Yeah. Very good. We got to get... That'll be your Christmas gift this year. Mansori Body Kit. I would love that. You want it. It's got to happen. The labor marketplaces that have exploded are the Mercores, the micro ones, that are positioned as marketplaces and yet feel more like enterprise product, almost like staffing in some way. The question is how durable people of those businesses be. And I think a lot of people are surprised that

Starting point is 01:53:51 the fibers and the upworks didn't kind of react and capitalize on that as quickly as they maybe could, but it just goes to show how quickly the space is moving. Yeah, I think there are perspectives. There's, you know, multiple camps there, but there are camps of folks, you know, smart folks who think that that whole category is like a race to the bottom and like probably a zero. And then there's other, you know, maybe some of those folks like saw Mark or early past or whatever and, you know, like a rooting against it. But there's definitely a vibe that that is, you know, maybe if you're on the inside in some of those businesses, like now it would be a good time to take some secondary. Sure. I think, obviously, but you've seen growth that is astounding.

Starting point is 01:54:36 And, you know, that's the funny thing about the market right now. That's a category, but there's so many categories, like a bunch of these companies that are doing inference. Like you've seen this, like, unbelievable growth and, like, there's, like, insatiable appetite for what they have today or, you know, you know, different kinds of training data or whatever. The question is, in two years, in three years, in five years, and ten years, like which of these are enduring spaces and which of these are ripping right now

Starting point is 01:55:01 because they're selling to five, there's only five buyers or four buyers long term, and is that a good business? Like, to be in a business where you ultimately have four companies that are your, like, theoretical-scale customers? Yeah. I mean... And right now there's such insane urgency that there's no...

Starting point is 01:55:19 Well, and money is absolutely... valueless to these companies. I mean, it just, it pours it, like, as fast as you open the door, it, like, burst its way into your face. Yeah, I was joking about if you started a janitorial company that just served the AI labs, your revenue would be growing 10x because their head count in square footage is growing 10x. And you'd be like, yeah, my business is 10x. And you know what? I have pricing power too. My margins are incredible. It's like, because they never ask. Let's do that this weekend. That's a good bit. Yeah. They were like, hey, janitorial business is wildly difference. There is, I do think that right now is, you know, look, this is coming after a few years of

Starting point is 01:55:52 really disappointing returns for venture as a category. And suddenly you see things ripping and growing and like, you want to believe. You want like people, you know, like you, and by the way, you have massive, massive funds now that need to deploy huge amounts of money. And they're looking for things that look like the escape velocity is there. And so they become self-fulfilling prophecies and more money pours in. And like, you know, I don't think that all these categories are going to be zeros, but I think probably there's going to be, there's a lot of winners in some of these categories. I think there'll be fewer winners and maybe the winners won't be winning at the multiples that they look like they are today. And then, or they'll, or they'll evolve dramatically.

Starting point is 01:56:35 Yeah. And by the way, some of them will and some of them won't, right? I mean, like, it's like keeping up with this market is the hardest, it's the hardest in my career to, Like companies that are, let's even look at like the open AI anthropic thing. And granted, this is just like, you know, maybe this is like the caricature of the space. But it feels like the tide turns so hard even the last three months where it's like Anthropics world now and Open AI is living in it. And three months ago you would have said the exact opposite. Yeah.

Starting point is 01:57:05 And maybe that's just like, I'm interested if you feel that energy. Well, it's hard to, it's, yeah, it certainly feels like at this moment, Anthropic is the main character, right, dominating the headlines on X and a lot of legacy media as well, but I would say Google trends tell, you know, a slightly different story, right? We are in a bubble and people are so invested in the race that they want. It's like if you watch an F1 race and Verstappen wins every time and he starts in polls. At some point you're like, I'm sick of this. Yeah, you just want to see. You want to see some action and you want to see some passes and you want some drama.

Starting point is 01:57:52 So I think people are invested in the drama. But yeah, and it's also you're watching the two strategies play out, like a very multi-product approach, consumer enterprise hardware from OpenAI versus like a very focused strategy. And I think it's way too early to kind of understand what will, in hindsight, look, like the best call. Totally. But it's certainly a meta is going to come out with their model whenever and then what does that look like?

Starting point is 01:58:24 And yeah, it's interesting times. Very interesting. Well, thank you so much for coming down to the TBPN Ultradel. Give us a report on, on upfront. Okay. Happily. Is it tomorrow? It's today.

Starting point is 01:58:37 It's today. Oh, you left. I abandoned my boy. Well, we'll text us later and we'll give the update on the show. I want to understand I have no sense for how much venture capital, like what I think of L.A. is getting. I have a good sense for like Hawthorne, El Ciganda, Long Beach, Gardena, all these areas feels like are raising as much money as ever. But the broader L.A. it feels like a drought. I would say it's a drought.

Starting point is 01:59:09 We definitely are not spending time out here hunting companies, really at all. Yeah, that's the advice I've given to any founder that's not in hard tech is like, do not. Don't even start. Move away. Yeah, don't even start your raise here. Don't even think about it. It's going to just send like a really negative signal that you're not super serious.

Starting point is 01:59:29 Yeah. Well, thank you so much. Thank you. This is great. Great to see you. Let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB, don't just build AI.

Starting point is 01:59:41 Own the data platform that powers it. And let me also tell you about Lambda. Lambda is the superintelligence cloud, building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands. Boom. We have some breaking news. We got to hit the gong.

Starting point is 01:59:57 Riley Walls shared an exclusive scoop. He says he has joined the wonderful labs team at OpenAI. I'm learning a lot and have enjoyed it very much. Congratulations. Huge pickup, huge opportunity. I am so excited to see what, Riley is one of the greatest minds, high agency individuals on the internet today. And I'm so...

Starting point is 02:00:26 He's the best. Yeah. I think Riley Walls is like a perfect example of like jobs kind of getting more fake. Like what is like... Shots fires. This is like not a diss at all. Says the guy who sits at us. No, exactly.

Starting point is 02:00:39 I'm also like very fake job. Like Riley Waltz, he like just goes viral and towards. not even like making like YouTube videos. Yeah, yeah, yeah. He's been, he's been a data analyst for the last few years. He's had it. He's had a, but he's not doing data analysis at Open AI. He's not doing the same kind of work he was doing before.

Starting point is 02:00:55 Yeah, yeah. He's perfectly demonstrating how do you describe Riley? How do you describe Ronald? Well, he's just saying. Member of technical staff. Next question. No, so, so he is perfectly demonstrating the power of the tools, which is if you have ideas, you can build them really, really, really fast.

Starting point is 02:01:12 Yeah. And create super. in his case, super entertaining products, but there's a Riley walls out there of Sass, and they're probably just hunkered down, not even really trying. And so I agree with you, very, very hilarious framing. I do think that we're moving into a world where more and more companies will have a Riley walls internally. You know, someone who can move very quickly, do experiments, create value and create little

Starting point is 02:01:40 projects, and like the leverage that you get from an individual. is going up. And this is an example of that. So congratulations to Riley Walls on his move to Open AI. Let me tell you about Graphite code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And without further ado, we'll bring in the birthday boy. Doug O'Loughlin is in the Restream waiting room. Let's bring him in to the TVPN Ultradown beautiful shirts. Happy birthday to you. Happy birthday to you. Happy birthday to you. Happy birthday to Doug. Happy birthday to you. How you doing?

Starting point is 02:02:16 Hey, happy to be here, I guess, on my birthday. Nothing better than Invidia earnings, which hasn't come out. We're going to be live reacting. Yes, we'll be live reacting. And they planned that, of course, years and years ago. On your birthday. They knew that today would be the day. They went back in time and they told my mom to get it done today, just for me.

Starting point is 02:02:38 Yeah. How do you guys been? We've been good. Good. processing the something big is happening then the satrini article there's been a lot of sort of doom but also there's glimmers of boom in there there's it's it's a yeah i feel like you've generally been a satrini defender kind of uh saying you know a lot of people were just like this is bad and it should never have been published i think your view was there's some good stuff

Starting point is 02:03:04 there's some it's a good thought exercise yeah yeah well here's the thing is like it went super viral for a reason because it obviously resonated. I don't think really crappy ideas resonate that hard. And I think honestly, a lot of the things that I'm most concerned about, I would actually align with it. My biggest concern is that we're going to print deflation. And he kind of talks about that, like, hey, one data center does all the knowledge work. The history of how this works usually isn't quite that extreme, but that was the point of it. Here's my extreme think case. What I was kind of shocked about and I feel like honestly I bet you should trini would agree just like the level it resonated with um yeah it was like covered on Bloomberg almost on a daily basis uh so if you're like a pro

Starting point is 02:03:51 whatever that does a push notification and it's like so trini says and satrini co-author and all this stuff I was like oh my god yeah um it really broke through that was yeah yeah unpack the deflation question a little bit more so technology has been deflationary for a long time TVs are getting cheaper is the line. You can see that if you look back at inflation, you see health care and education inflating while basically everything that's on like a technological Moore's law-style curve is getting cheaper over time. The bigger, like broader, broad deflation question is can we move some of those or will some of those inflationary categories move into a deflationary territory, but what are you thinking, is education, healthcare at the top of the stack?

Starting point is 02:04:41 What do you mean by knowledge work becoming deflationary? So let's just put it this way, the ghost GDP article, right? Hey, let's just kind of like do like an index, one index versus the other index. We're going to label it at $100 for all these like knowledge work widgets. And let's just see what the cost of that looks like over time. year zero, $100 with a human and maybe year two, it's $102. Maybe they get a little bit smarter so it goes down. But like, okay, what if the agent gets 20 times better?

Starting point is 02:05:15 Year two, the index of knowledge work is going to be $20. That's just deflation, right? The entire world is effectively just like spitting out TVs that are worthless to three years. And that's kind of scary and I think is a big deal. I think the thing that is the most resonating with the whole piece is that clearly if this is going to be as big as many people think it will be, you know, Cloud Code Maxie here, then what happens is that you're going to quickly disrupt so much of society that the government and like companies and everyone needs to start caring very quickly. I don't think 10% unemployment is going to happen. The world works just slower than that. But I clearly think that the reason why it resists is part of part of your framing. is like when we had technology rollouts throughout the last few hundred years,

Starting point is 02:06:10 it involved heavy machinery that took a lot of time to diffuse in part because the machinery needed to be built and shipped around the world and spun up. And then you have with AI, it's like, okay, the internet is the greatest distribution engine in history and as technology advanced, is it can like be live in somebody's office or with somebody's company effectively instantly, which creates and with like, let's say, the printing press, it was, you know, or cars or

Starting point is 02:06:45 electricity, it was like a much more, it was forced to be a much longer rollout. Yeah, there's just, like, for example, the railroad piece I read about, dude, it took 50 years to put all those rails, right? historically let's say this AI thing would be like a historical Adams thing it takes 50 years of installing the AI widget at your house in order for you to get AI versus now you just press a button you download it and it's there and so the pace of that disruption is so so much quicker and so if it looks like you know if it's as big of the deal as people are concerned about then essentially you're going to broadcast deflation everywhere all the time all at once and it's going to be almost

Starting point is 02:07:27 costless to get there. And also, it's going to get relentlessly better. Yeah, just and then imagine how do you how do you how do you square that though with the fact that right now today AI is the best at coding. That is where it has the most traction within knowledge, you know, knowledge work. And yet I have I have not gotten a call from a great engineer saying, hey, can can you help me land a job? I'm unemployed. And you see this in Citadel put out a response saying that software engineer job listings have gone up year over year.

Starting point is 02:08:09 And so it's so hard for me to square these two things where we could be in this in this, you know, doomsday scenario for white collar work. Where we're not seeing. Yeah, we're not seeing that at all with software engineers. Now, some people might debate me and say, well, oh, I just graduated school. And, yeah, new grad opportunities might be lower.

Starting point is 02:08:35 But nobody is bought when some of these larger tech companies, CEOs have laid off a bunch of people and said, we did this because of AI. It's like nobody's actually buying that. It's just a nice story. Yeah, I think that's going to be an interesting thing because I think it will be politically, and broadly unpopular to say, hey, I just laid off 10,000 people because AI. Like, we are humans at the end of day, and you know, you do care about what your neighbors think of you. And just being like, we fired everyone because AI is better than whatever. You're like, okay, well, now you got to get, you might as well hire a five-person security guard, right?

Starting point is 02:09:16 There's a little bit of like being an asshole. So I think how it actually works and you're looking at, and I agree with that comment because there's this really great tweet that's like, oh, it's crazy. coding world, pretty much it pegs the human CPU at 100%. That's how I feel, at least, is I'm doing more work than ever, but I'm literally working harder than I've ever worked. The reality is I feel like there is a productivity uplift, but I guess we're all in the sugar high where you're able to do so much work that you're just like going around like crushing it. So these software engineers, yeah, you don't need new grads. And essentially the person who has the

Starting point is 02:09:50 seat gets to, you know, print more, lets us use the printing press, right, instead of writing. and you unemploy all the new writers, but you're sitting there just printing all day. And so it really is great for the install base of people who've been doing it, but very terrible for Netnew. And I think the NetNew is where you're going to see this, meaning like new grads, new people entering the information services. That's where I think you're going to see most of the carnage.

Starting point is 02:10:16 People are not just going to be firing people out the gate. It's going to be like, okay, we're going to hire a lot. A layoff or firing typically occurs weeks, if not months. after an executive has decided, hey, this, you know, we need to make a change here, just because it's the thing that everyone hates doing. How do you, how have you been processing? It feels like the people that the Satrini piece resonated with the most are also the ones that have been saying that the AI is a bubble and there's too much investment going

Starting point is 02:10:49 into this and it's all going to be a zero. it just seems like two ideas that are difficult to. You know, I feel like there's a certain aspect of haterade where when you're a real haterade, you're going to find whatever flavor supports your thesis. We find this at semi-analysis, man. When we say something positive or we perceive as positive, people take it as negative. Or really honestly, they take it to... I know. We've had that too.

Starting point is 02:11:19 Yeah. If there's a company that people don't like and you say something, something positive about it. It's like people respond like extremely emotionally to that. Yeah. And so I think Satrini made the perfect ammo at the perfect time. And and like honestly, if you look at the stock market, I'm sorry, I keep watching for a video over there. If you look at the stock market, I think right now it's been a really interesting year to date because like stocks are maybe like whatever, two percent off all time highs. Maybe they're all the way back. or they're pretty, I forget what the, like, year-to-day looks like.

Starting point is 02:11:55 But underneath the hood in software, it's been very, very, very painful. I think there's a lot of parts of the index that are in a lot of pain right now. And pretty much you're just like seeing these crazy rotations underneath the surface. And so people are very, like, in inningscy. There's no other way to put it. If it's big things are happening in the stock. Well, yeah, the idea that, like, oh, you're holding a, you're holding a name and it has nuke 15% yet, you should get out because there's going to be some, there could be a blog

Starting point is 02:12:28 post. And what, what's the, there's not a lot of ROI on. How have you been processing like the, the moats in software companies? Like, I, like, I've always understood like the SaaS poplips, like that narrative. Of course, you know, we got to debate timelines and maybe these things are just shifting to be value stocks as opposed to growth stocks. But the stuff with network effects, the door dashes, the PayPal's, the regulatory modes. It just feels like there's a lot of companies out there that are being more broadly punished. But is there something I'm missing there? Or do you think that it's just excitement and people rotating into other stuff that they might be learning about like memory and energy and semis? I don't know. But I definitely think that that aspect is definitely

Starting point is 02:13:16 there. The ones that are like really shocking to me is insurance brokers. If you've ever, if you ever follow that space, like once in a time as a hedgeman analyst, I followed Aeon. It's like one of the most boring spaces of all time. Real estate services? Real estate services. No, like CBRE, CBRE, essentially an insurance broker. You're having all these things, these network businesses that are just effectively being like, yeah, in fact, it's going to be newt.

Starting point is 02:13:41 I think the hard part about that is it's like, it's complicated. I think there's a lot of advantage for number two to defect really quickly. That's probably the most valuable thing you can do. For example, we've written quite a bit about this to like our higher paid tier service stuff. Like Walmart defecting to a gentic commerce makes a lot of sense, right? Because they're not Amazon. Everyone that isn't number one should be defecting to win market share. And that makes a lot of sense to me.

Starting point is 02:14:07 So like it wouldn't be DoorDash. DoorDash would probably put up the, you know, put up the walls, do their best to like have exclusive products. And then someone else will vibe code something on the margin and essentially try to win market share by less margin. But at the same time, Darra was on the show, and his stance was, yeah, I don't really care as much about my ads business, about making sure that I'm just everywhere. And so he was seemingly pro-agent, even though ads business is real. Have you been processing agentic commerce? Like, it feels like this should, like the tech is there. And, but, like, consumer adoption takes time.

Starting point is 02:14:49 you know, yes, you can touch up a photo with Gen AI, not everyone does. Like, what is good look like? Because we're seeing stats from Shopify. It's like still in like 0.01% of checkouts are agentic. And I would expect that to 10x or 100x. But even then you're talking about like 1% of e-commerce. Like we're still talking like really small numbers. Like how fast do you think it ramps and what do you think happens this year?

Starting point is 02:15:16 So I think the place to watch, and it's probably the most interesting place is China because you can argue the leading e-commerce adopter has always been China. They were doing DoorDash way before it got hot in the United States. They were doing e-commerce way before it got hot in the United States. Live streams. And we just saw the, yeah, live streams, right?

Starting point is 02:15:36 Like, dude, TikTok and Doyen was always been on the bleeding edge. Like, I would argue for global internet online consumer preference behavior, China is the leading indicator. Like, America is a lagger. boomer, you know, like we just don't, we don't buy like we used to, okay? The consumer is not quite as young. We'll just put it that, that way. I think what's interesting is we just had this giant incentive out of, like, I believe it's, I won't say it's tense to that. Tents into this, like, I'm now I'm probably going to misspe. The bubble tea promotion, okay?

Starting point is 02:16:10 They did like 10 million or whatever bubble teas. And so I think there's an example that we finally have the first wave of people possibly being able to adopt it. And that's going to be like all eyes on that for if adoption actually kicks off there. Like that's what happened in 2015 to kick off mobile payments actually. During the CCTV gala, they essentially gave away like payments and they incentivize people to use the mobile wallets. And that was like the beginning. Okay. So I think that same analogy is probably where people need to look towards for what What could be the adoption curve for agentic commerce? Is that earnings?

Starting point is 02:16:48 Do we hear that earnings came through now? I'm just, I'm just, I'm just, I'm locked in. I'm locked in, bro. We'll have, we'll have this sound of fact. Well, yeah, so, so how do you imagine agentic commerce actually rolling out in China? Because there's a whole bunch of AI labs, you know, deep seek, high flyer. Like, they don't have a, do they have a big consumer footprint already? Because they don't have a lineage there.

Starting point is 02:17:14 So you might expect, you know, Agentic Commerce to be driven more by the platform that already has a billion daily active users over there. But how do you see, like, the stack piling up over there? So I think the best example of this is Alibaba, which actually is an e-commerce company. They're like, you know, the Amazon edition. They have Quinn. They have a delivery app. They have like an inventory app. they have a fully vertically integrated stack and they have AI on top,

Starting point is 02:17:46 they're going to make money if people just use their products. They can get transaction fees. And so that's how I kind of think about it. I mean, in a perfect world, if Amazon was not bad at models, they would be crushing, right? Yeah. You'd obviously be like, don't talk down on Rufus. Don't talk down on Rufus. Just because it took down AWS once or twice or three times for hours, doesn't mean they don't got it.

Starting point is 02:18:09 They're doing. I actually want to talk about a conspiracy theory because I feel like this is, have you been noticing the instability of public clouds? Yes. Am I crazy? No, I don't think you're crazy. It's either, there's two, there's only two things it could be. Vibe coding. People were just pushing crap on prod and they have no idea.

Starting point is 02:18:29 Probably true. Number two, CPU shortage. I think it's a CPU shortage. I really do. You don't think there's like a third if we're wearing the tinfoil hat, which is the world's been very unstable. there'd be an incentive for... Iran. Maybe that's actually...

Starting point is 02:18:45 That's a good one. Yeah. But I'm really surprised to see all three at the same time. And then like my favorite, probably the most public version of this is the GitHub instability. Yeah. Dude, GitHub is so unstable right now. Interesting. Yeah, I saw the uptime numbers.

Starting point is 02:18:57 It was like below 99%, which is really low considering... Oh, dude, it was like 90%. 90%. That's really low. I mean, people are pushing a lot of code to GitHub. So, yeah, walk me through the CPU shortage because is that just... CPUs that are being used to scale new like EC2 instances and like normal like you need a Linux instance and so you need a CPU to provision or is or is the AI boom sucking CPUs in like a grace

Starting point is 02:19:24 hopper demand like they're the CPUs are getting dedicated to AI server clusters like where are the super what's the shape of the shortage basically I think the shape of the shortage is partially an RL because if you want to do an RL gym meaning like you want to have an Amazon.com You have to literally simulate just a lot. That's one real demand driver. I don't know how to quantify that, but clearly they're out of it. Number two, I think I do think all the code, have you seen the charts, like I think it's Ft.com with like all the new apps coming online.

Starting point is 02:19:56 They require infrastructure to run. And I had a third one. Oh, the other thing that's interesting is it's also a little bit of a, of like a lapping supply chain thing. So the last time we bought a lot of CPUs was in 2020 and 2021. Historically, you depreciate the CPUs on a five-year cycle. And so after five years, you just like literally throw them away. It's five years. So all of the infrastructure that we purchased, and we've been trying our absolute best not to purchase any new CPUs and spend all that money on GPUs.

Starting point is 02:20:29 So they haven't been investing this entire time. And now this slight demand curve comes up. And that's enough to essentially sell out all the CPUs. I think that that's probably part of it as well. It's going to probably be this multi-problem thing. But it's like one of the more interesting conspiracy theories. Like YouTube went down. I don't remember a time in like the last five years.

Starting point is 02:20:50 YouTube has ever gone out. Yeah. So. Yeah. Yeah. Yeah. Yeah. That is crazy.

Starting point is 02:20:54 Take us through the effects of the CPU shortage in the TSMC context. Because TSMC seems to be like a crazy battleground. Apple, Nvidia, and then you'll talk to a new semiconductor company. Like we had Maddox on the show yesterday, and he's like, yeah, I'm getting line time at TSM. And then you read Ben Thompson, and it's like, well, they're not really investing in CAPEX. And it feels like, is TSM a bubble after this CPU shortage as well? We got Nvidia earnings.

Starting point is 02:21:25 What happened? They got a revenue beat. Okay, we will jump back to TSMC, but they beat revenue. Let's review and read through this. 67.4 billion against an estimate of. of 66.2 billion. We have some breaking news. Invidia has announced earnings.

Starting point is 02:21:44 Wow, you guys are faster than me. Nothing liver than live. Here, we will all read the earnings, and I will tell everyone about plaid. Plaid powers the apps you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending. now with AI.

Starting point is 02:22:08 And back. Do you got anything yet, Doug? Am I crazy? I don't have anything. Maybe Tyler just sent this to us. Did they somebody just like... Refreshing Twitter. It's possible somebody's just putting up

Starting point is 02:22:23 is just engagement farming. Maybe. And trying to... They might have gotten us. They might have had us in the first half. Well, we shall see. Got God. Anyway, let's go.

Starting point is 02:22:35 go back to TSM. So the nature of the TSM bottleneck with regard to CPUs, is that an important factor or is there more fab capacity across Global Foundries, Intel, Samsung to sort of meet that CPU shortage? So Global Foundries is nothing. Nothing. They don't have a leading edge chip. So they will not have any CPUs there. Intel is actually the real winner, I think, because essentially like TSM is locked up. Everyone's fighting for space at TSMC. Like, Nvidia has the most.

Starting point is 02:23:09 All the co-os is accounted for. All of N3 is accounted for. All of N2 is accounted for. Essentially, they're completely sold out. They're going to invest a lot more, but like, you know, get in line. It's another year. So whatever is left over kind of goes to the other foundries,

Starting point is 02:23:23 and that's really two companies. That's Intel and that's Samsung. I think Samsung right now probably makes way more money if they spend it all on memory. So Intel really is the swing provider of CPUs in the world. And that's like kind of amazing. Like I'm kind of my belief in a sweet karmic Intel victory is all the CPUs that can't be made at TSMC because the accelerators are being made instead go back to Intel and they just make them,

Starting point is 02:23:50 but they don't design them. Yep. Make them but don't design them. So they would be a second source for Nvidia potentially as well. Well, like it's not just in video. It's not, I think, I think, I think Nvidia's going to get there. Yeah. To Intel.

Starting point is 02:24:04 Yeah. Oh, oh, oh, TSM. Okay, so they don't need to. TSMC. Okay. Because there was a theory about like, hey, maybe twist NVIDIA's arm, get them to dual source at Intel, and that gets the flywheel going a little bit more, just as like a give. I guess. But I, and there's been some conversation about the NBL link with, with Intel specifically co-packaged.

Starting point is 02:24:27 But I think it's going to mostly be. Vera. Like, I think it's not going to be, I think TSM is going to give them the capacity. I think there's a whole world of chips that are not that. Like, think about Graviton or the Axion project at Google or all the ARMCPUs. Explain that Google project. I haven't heard of that. There's a custom CPU.

Starting point is 02:24:51 Okay. Yeah. So, like, all of these... Don't they have, like, a YouTube chip? They have, like, a number of custom CPUs, right? Yeah. VCU, I think. It's a video encoder, whatever. unit, but that's like really de minimis too. I don't think that adds up. How important is the, is the groc cerebris, these faster model on a chip companies? And does Google have an answer for that? I, okay, so to be clear, semi-analysis is house view wasn't that it was like the most important thing. And we've always, you know, we have that chart about batch, right? The fact that, hey, doing more for everyone is much more valuable. Clearly, there seems to be a little bit of a niche market

Starting point is 02:25:28 in a niche market demand. And so Cerebrus and LPUs definitely have some kind of demand pool. And I think we will see some kind of announcement at GTC. But definitely wait and see. Oh, that's kind of my impression. That's kind of what we wrote about today. By the way, I think it's crazy. I wasn't aware that the Vera Rubin post would come out until today.

Starting point is 02:25:49 Like literally, I learned today and I was, oh, so I had to read it live with everyone else. I think that's a big deal too. And we have a lot of information there about what's coming at GTC. So, well, we're excited to follow it. Nvidia earnings are usually out by 20 minutes after the hour 420, but it appears that they are delayed. So we will, we will see. I mean, of course, we'll have to have you back on the show to deep dive everything that's happening in the semiconductor. This thing is so much better.

Starting point is 02:26:18 I had like the bogey and all information and what the setup is going to be. And honestly, if we have two minutes, I'll tell you what to expect. Okay. Yeah, please. It is. I think everyone thinks the guide will be $75 billion. That's what everyone's really obsessed about. I think the questions that are going to be answered or asked rather is about memory price inflation.

Starting point is 02:26:41 That's going to be a big deal given the fact that I think memory prices are like, you know, mooning right now, HVM and DRAM. I think Nvidia locked it all in. So everyone is going to be like, how sure are you, your gross margin isn't going to go down? And they're going to be like, we're really sure. But they're going to be like, okay, how sure and what time? And then there'll be like this random, like, circle that no, we can't answer. And then I think one of the questions that people are going to definitely ask is about the power side. It seems like next year, Nvidia has more chips than power.

Starting point is 02:27:08 And so that's going to be, I mean, to be clear, Nvidia has no power, right? They have customers who acquire power. And, you know, one of their big competitors in terms of market share, which is Google, has chips and power. And so I think that that's going to be a huge bottleneck. And I think that's going to be one of the bigger questions that happens this quarter. hey, how do you deal with the power bottleneck? Because you're going to sell a lot of chips, but if you can't even plug them in, this is a huge issue.

Starting point is 02:27:33 And is the idea that even if a lab or a hyperscaler said, we're actually good on chips right now. We don't have the power for them. And video would be like, well, you actually have to buy them if you want to maintain priority. How do you think they would play that? I don't know. I mean, I think the thing is it's not going to matter

Starting point is 02:27:52 because the only company with a chip to sell you next year that is not accounted for is invidia. And I think the shortage in GPUs is really underappreciated. There's like, you know, you can see it publicly. I forget which research shop shows it, like the availability of B200s. But our anecdotal information as well as the like the live price tracking and contract price that we're aware of, there's like no H-100s for sale. Like H-100s are sold out.

Starting point is 02:28:19 That's like boom, you're, you know, your five-year depreciation like bare thesis that everyone was really freaking out about last year, well, good luck. You can't even buy one today. So that's probably the biggest interesting thing. And I think probably the single most bullish thing you can say. You know, like a four-year-old chip effectively is completely sold out today. Yeah. What does that say about the next generation? That's remarkable. Well, thank you so much for taking the time to join. Bummer that they delayed on us. But next time we'll time up so that we've even more time to hang out. But I'm, I'm so happy, honestly. Like you're asking to an video earnings. I was like, no, no, no, we'll get this flow going.

Starting point is 02:28:58 This is always fun. But, I mean, just great to talk about everything. And happy birthday. And we'll talk to you soon. Happy birthday. Have a great rest of your week. Great to see you. We'll talk to you soon. Let me tell you about Gusto, the unified platform for payroll, benefits, and HR built to evolve

Starting point is 02:29:10 with modern, small, and medium-sized businesses. We have our next guest, Mark Benioff, in the Restream Waiting Room. Let's bring him into the TVPN Ultra. Mark, thank you so much for being first to join us here on earnings day. We're honored. Great to see you. How's it going?

Starting point is 02:29:28 It's going fantastically over here. Did you get that metallic album I sent you? We did. We did. Thank you so much for us. Did Jordy listen to it? Did Jordy listen? We need a record player.

Starting point is 02:29:38 No, Jordan, again. But, Jordan. Mogged again. Mogged again. Frame mob. Jordy. Again. Again, Jordy.

Starting point is 02:29:45 I have no words. But, but fun back, Jordy can actually play the guitar. And so next time you come on. he's going to be playing a cover. I'll play you a tune. Yes. How about that?

Starting point is 02:29:58 I know you got to see it. I think we should ask Lars Ulrich to come on the show with us. Oh, that'd be fantastic. I think it would be really good. I'll have to make that happen. I'm going to call out, I'm calling out Jordy on the whole situation. The reality is, yeah, Jordy are still unforgiven. Oh, there we go.

Starting point is 02:30:14 Well, anyway, thank you so much for joining us first on earnings day. Take us through it because I got a mallet here that's itching to his. a gong. Well, if you want to hit a gong, I mean, no enterprise software company has ever given guidance for $46.2 billion before. And these are crazy numbers. I love that gong, by the way. I love that gong. We love gong. I really do. But I would say that that's exciting. Yes. But also just this company, you know, it's really become a cash machine as well. You know, we're projecting over $16 billion in cash flow this year. So when you think about that,

Starting point is 02:31:05 and then the quarter, you know, with a quarter we deliver this record RPO. Funny thing, you know, some of my friends are writing these articles. RPO doesn't matter. I mean, they just write a song, nothing matters. I don't know, nothing else matters. Yes. But RPO, which is, you know, kind of our remaining performance obligation, these are contracts that we basically have signed but not yet recognized.

Starting point is 02:31:28 Yeah. That is $72.4 billion. So these are driving these huge numbers. What does that mean? What does that? I think people have a good sense. That's up 14% year over year. It's that all these numbers are accelerating growth.

Starting point is 02:31:44 So I don't know. I just kind of, I am very proud of my team. I'm very proud of our customers. I say also I'm very proud of the customers because we've really been pushing the customers hard this year to deploy all this new amazing AI and agent technology. And we've hit basically now more than 19 trillion tokens. So you can just see the velocity of AI and agents.

Starting point is 02:32:09 And the company is just transforming from being not just an apps company. And I think you guys are using Slack and other Salesforce apps to run your business. But now they're all extended. with these agents like Slack, not just Slack bot, but the ability to extend your service and your marketing and your sales. And all the agents are out there and they're running wild as well. So you have apps and agents, humans and agents working together. It's very cool moment. Very cool. Jordy? Yeah, what has it been like internally with the team this year? Has there been a more

Starting point is 02:32:42 kind of chaotic period in your career? How, like how are you guys operating internally? clearly delivering results. Oh, yeah. I mean, well, you know, we all been reading about the saspocalypse. Yeah. But we've got our saskwatch is eating our saskolapse. Let's go out of saskatch.

Starting point is 02:33:06 I just think that when you look at things like, you know, Agent Force, which we've talked about on the show now three times, you know, starting at Dream Force. That, you know, and day, first of all, Agent Force, by itself is now an $800 million business up 170% year over year. Wow. So that is amazing. All is its own product.

Starting point is 02:33:28 But then you look at Agent Force and our data business together. That is now a $2.9 billion business up 200% year over year. So there's no question that AI and data is a huge driver of growth. And it's about these apps and these agents. And, you know, we use the apps. We're these humans. We're using the apps. You know, we're using Slack, we're using sales cloud, service cloud.

Starting point is 02:33:52 We're using all of our cool apps. And then each one of those now has an agent platform also. And these two things together is the future of enterprise software. That apps have been extended by agents. And while before we're in the apps market, and that's what we've been doing for 26 years, you know, that we've been in business since 1999. Now we're in the apps business and the agent business. And this is why I've never been more excited about my business.

Starting point is 02:34:17 I just love it. Yeah. I mean, I really love it. How much similarity is there to the original messaging just around, like, being a company that enables cloud adoption? Like, there were probably a lot of companies and CEOs that came to you early in your career that said, like, I know this cloud thing's important. How do I do it? And you have an answer. And now there's CEOs that say, I know this agentic thing and this AI thing is important. How do I do it? And you probably have a pretty similar answer, right? Is this history repeating itself?

Starting point is 02:34:49 Oh my God, it's such a good question. You know, Anil Bushery is now the CEO, again, of Workday. It's my good friend. He lives, you know, basically next door to me, came over last night. We both had a cocktail because, you know, we're looking at his after-hour stock. And I said, Anil, there's no way this can be true. You know, you have to let this go. And in fact, you saw already that his stock corrected today because the numbers are just don't match, you know, what's really going on.

Starting point is 02:35:15 He has an unbelievable business. He had a great quarter. He's going to have a great year. We use his HR and financials. And I said, Neil, this is just something that you have to let go of. This is not my first saspacocalypse. I saw this in 2008. I saw this in 2001, 2016, you know.

Starting point is 02:35:37 And look, there's people in the market. They make money when the market goes up and down. So that's just the stock market. But let's talk about the customer. customer success. And when you look at how companies can actually be better, more productive, successful, profitable companies, and we are, you know, we're number one, we're customer zero. And that's what I'm so excited about, because when you look at how we're running customer service and support right now, we're using it with service agents and service apps. So if you go to

Starting point is 02:36:09 help.salesfors.com, you're using the agent. And at any point, bam, bam, bam, you can auto-escalate right back to the app and the humans if you like exhaust the agent. Or now this week, we have an agent that is going to qualify 50,000 leads for our company, which is our sales agent, that it's out there talking to our customers.

Starting point is 02:36:30 We even close millions of dollars of business this week just through the agents themselves. So that is what is amazing that we have apps and agents. And it's not that we don't have 15,000 salespeople at Salesforce. We do. and we have millions of apps all out there scurrying around, looking for opportunities,

Starting point is 02:36:50 and then bringing them to those humans going, hey, look at this opportunity, give this person a call. Let's go see this person. Let's go find out what to do. And that is really the... Yeah, how much... We're extended, elevated. We're elevated by AI. We're made better. We know we're made better by AI. There's no question. How much have you been kind of, you know, all the Citrinis posts, We've talked about it at length on the show.

Starting point is 02:37:16 Very, very, a lot of doom. But we've been very focused on what's happening in coding. As these coding models have gotten better, people want to hire at least the data shows so far. So it all was showing up job listings for engineers are up 11% year over year. You've talked before about hiring more sales reps because as your reps get more productive, probably want more of them. But is that kind of comp that you're looking at, given that I think everyone is expecting sales agents to kind of get,

Starting point is 02:37:50 to kind of catch up to coding agents in terms of capabilities? Great question. Amazing. And, you know, I wasn't really on the show at the beginning of the year, a year ago with you guys, but if I was, what I would have said was, I'm not hiring more engineers in fiscal year, you know, 26, the year it just passed. Because I was using coding agents, and I was allowing the productivity from the coding agent to give me the extra capacity that I needed for the year.

Starting point is 02:38:17 And I didn't hire more service agents in the year. I held it flat and then reduced it slightly because I'm using service agents. But I did hire like almost 20% more salespeople this year. I think we've talked about that because I need more capacity because we have more demand than ever through every market from the small, medium, large customers, you know, guys like yourself who are like these great entrepreneurs,

Starting point is 02:38:40 building a great business like TBPN, really going all the way through it, you need a technical infrastructure around you to grow your business. I know you use Slack, I know you use other products, and that's our job is to make you successful and to really bring in the apps and the agents. You can't do it just with an agent. You need that you need...

Starting point is 02:38:59 There's still some humans around and need to be automated as well. Yeah. And that is what is exciting. Yeah. And that is what I'm doing every single day. What advice do you have for a company like Anthropic that's hiring a Salesforce admin? What makes for a great Salesforce admin?

Starting point is 02:39:20 You're kind of leading beyond. I mean, you know, it's kind of funny, right? Because these AI companies, they love our products and they can't buy enough of them. They're some of our largest customers now Anthropic, OpenAI, Google, Amazon, you name it. These tech companies, Slack is the largest AI ecosystem in the world. You know that. And that's reality, you know, which is that no one has a company that's running entirely on a large language model because it's not real. That's not, we need software and we need large language models.

Starting point is 02:39:51 We need the determinism and the programmability and the security and the sharing. And, but this large language model is an amazing new component of our infrastructure so we can do things that we could never have done before. That is what is so awesome. And so we can extend our industry. I think the software industry is going to be bigger and broader and do more this year than ever before, not just Salesforce, which is going to grow incredibly this year. I think every company is going to grow because we have more to sell. And there's more excitement and action and energy. And so this kind of counter-narrative of, oh, no, no, no, they don't understand.

Starting point is 02:40:31 We're just call that company who wrote that report. And you ask them, what is their software infrastructure, their magic infrastructure? I do this all the time. Tell me exactly how you're doing what you're saying that you're doing. Oh, well, you're right. We're so sorry. We made a mistake. No, you know, and look, the futurist, I think we talked about this.

Starting point is 02:40:51 Peter Schwartz, you know, our chief futurist, he wrote Minority Report. Have you seen that movie? Incredible. It's like 20 years old. Great. He hasn't seen it, but I've seen it. Oh, yeah. Majority, you've got to watch this.

Starting point is 02:41:00 And also he wrote war games and deep impact. You know, part of a team writing team. These are future movies. Yeah. But we all know where the future is kind of going, this highly automated, amazing world. But we're living in this world. Yeah. And this is this year.

Starting point is 02:41:18 This is 2026. You know, we're running our business today. So how are we doing our financials, our HR, our customer information? You know, how are we doing all of these aspects of our business? How are we running them? And then we write a report that sounds like Minority Report. And then I'm like, yeah, Minority Report. I watched the movie.

Starting point is 02:41:41 Great guys. Fantastic. But I'm in the present moment reality right now, you know? Yeah, yeah, that's true. And let's come back to World. And by the way, like, you can do things that you couldn't do before. This quarter, I released our new ITSM product. So our customers can do this incredible thing.

Starting point is 02:42:02 you know, IT service management. They used to have to go to Service Now for that. Now we converted five ServiceNow customers, you know, just in the quarter right over to Salesforce, because we have that new capability. So companies like Sun Run and Cornerstone and CoolSys and others, you know, they can now use Salesforce ITSM instead of Service Now. That's so exciting. And then we have our new Life Sciences Cloud that we've built all with an agenetic interface. So our customers do not have to use VIVA. And those customers, are instead, you know, those are big companies like the Fisors and the Takedas and the Novartis and the AbbeV. So they're running with this next generation platform of apps and agents, apps and agents,

Starting point is 02:42:44 and humans and agents working together. Yeah. So, I mean, the business model currently is clearly working. The results show that. As you look into the future, do you think the business model will evolve? Do you think that we're going towards more consumption-based? Is seat-based going to be with us forever? Like, how are you thinking, obviously you don't need to turn the cruise ship today, but how do you think this evolves over time? It's such a great question, right? Because that's like one of these interesting narratives. But, hey, I don't know which anthropic product you're using, but the one I'm using is seat-based. So if you don't have, if you have a different one, or I don't know which open AI product you're using, but mine is seat-based.

Starting point is 02:43:26 Yeah, I have a seat. I don't know which one you're using. It's a good take. Of course, you can use API. No, no, it's true, though, right? And there's an API also. Yes. There's an API also.

Starting point is 02:43:35 Yeah. But they're happy to be selling seats right now. You're right. Yeah. No, we, this is about humans and agents. So let's use that analogy. Sure. Humans are seats.

Starting point is 02:43:45 And so there's still, like, us three, we're like the last three humans. It's very sad, but we're still here. And then we have the agents, too. And they're using the APIs, talking to each other. And they're on multiple. And they're, like, having a conversation, creating their. their own currency. They're talking about us. They're talking about us. They're saying, oh, can you believe those humans are still there? We're going to get them. Yeah. And it's like, no, it's still

Starting point is 02:44:08 humans and agents working together. And that is what is exciting about the future of enterprise software. So, yes, I have a sales force, but it's extended with sales agents. And I have a service organization and extended with service agents. And I'm sending a trillion marketing messages this year, but they're all extended with marketing agents. And I have commerce agents. And I've got, yeah, and you guys use Slack every day, right? And you're using SlackBot now, hopefully, since the last time. I would say it's like amazing

Starting point is 02:44:38 that I can use agents and Slack. So I have employee agents, and we might have some other new exciting agents coming in the next few weeks for you. I'm very excited. Yeah, I'm very inspired by Maltbod. I'm now got our team working on some new things. So that is like how I see it

Starting point is 02:44:54 unfolding. And I think it's about a world where there are apps and agents and where this large language model, it's extending our capability. It makes us better, it makes us stronger. It gives us the ability to do more. And yes, it still exists and also consumption exists. Like we have, you know, lots of consumption products, data products and analytics products.

Starting point is 02:45:16 Was there ever a SaaSpocalypse that was driven by fear that open source software would defeat your products, defeat Salesforce? Oh, no, there was a bigger SaaSpocalypse than that. Okay. Do you remember the saspocalypse of 2020? The saspocalypse of 2020, John, let me tell you the story. We were all mining our own business and then CNN came on and said we were all going to die. Yeah. Not just the software companies, everyone, because it was the pandemic.

Starting point is 02:45:48 Yes. And we all went home and we hid and it was a very sad time. Yes. And in fact, right at that moment, the stock market crashed because we were all going to die. And that was a huge saspocalypse. and you can see it in every one's stock chart. It goes like this and then all of a sudden people go, I guess we're not dying, and then it came back up.

Starting point is 02:46:08 And that was a saspocalypse at 2020. It's a sad tale. But we lived through it, and we got through it. And you know what? We're stronger for it. And that was just one of the saspaclopses. Talk about the reception of the Super Bowl ad. Well, listen, I don't want to be competitive with you guys

Starting point is 02:46:26 because your ad was very good. I want you just to know. You did a great job. You should feel great. I appreciate that. You know, you had a great ad. Everybody loved it. Very high our life.

Starting point is 02:46:38 Now, we were the number one ad in the Super Bowl. Oh, okay. Mog meter going up. Let's go. Ad mugged. Ad mogged. I'm sorry, but it has to be said because, you know, we have Jimmy Donaldson, Mr. Beast. Yeah, he's the best.

Starting point is 02:46:56 And Mr. Beast did a great job, and that was just a killer ad. We still haven't revealed the final thing. We have a great person here, John Zismos, who did a fantastic job with Jimmy, and it was an unbelievable partnership. But Jimmy's just, he's a force of nature. I mean, I've never seen anything like this. He's such a young, great, amazing entrepreneurs. The first time I ever talked to him, which was years ago,

Starting point is 02:47:19 he said to me, I want to be the future Steve Jobs. You know, I want to be the future great entrepreneur of the world. I had to pause and say, really? He's like, yeah, that's what really I want in my life. I want to be a great business leader, a great, and I think he's doing it. And he's so young. You know, we've already had him on the cover of Time magazine once, you know, and I see, you know, him as a huge leader in the whole world, not just as some kind of YouTube personality.

Starting point is 02:47:47 This is a great entrepreneur or business person, not just making chocolate bars, not just running a bank. I see him doing a lot of amazing things, and he's got a lot of energy, incredible. And I have a lot of respect for him. And yes, number one Super Bowl ad. How about that? There's a lot of entrepreneurs listening. A lot of entrepreneurs that are searching for their next great business idea. If they want to go swimming with dolphins and get inspired, what's the most underrated time to visit Hawaii?

Starting point is 02:48:14 You're right. Well, number one, this week we have been having an awesome show from Kilauea Volcano. Oh, yeah? We had, I think 12, 13, 1,400-foot tower, which is I'm in Salesforce Tower of San Francisco right now. Gorgeous. You guys should come. and the fountain from the volcano was taller than this tower this week. So that is amazing.

Starting point is 02:48:34 And you're right, all the little dolphins were so happy. Just cruising around. But also, it's whale season on the North of the Coast. They were going. They were so happy. Also, everyone gets happy when you see the volcano. It's like the way, it's like when you see a whale. It reminds you, it reminds you who you really,

Starting point is 02:48:57 are. It reminds you this is what life is really all about. You come back to your breath. You come back to yourself. I don't know. When I see whales out, I think of agents. I think an agent for us. Personally, hey, I know you got to run. You got to run. Sorry, we're keeping late. I have a challenge for you. Before we talk again, you got a frame mug one of the AI lab leaders. Oh, this is big alpha right here. We'll talk with you. I think it's possible. We'll coordinate. We'll coordinate. Have a great rest of your day. congratulations on all the promise. Thank you so much for coming back on the show. You better listen to that Metallic album because I swear to you, I'm bringing Lars on here and you're not ready. You're just lucky I didn't bring him on to date.

Starting point is 02:49:38 On repeat, on repeat. We'll talk to you soon. Great to see you. Have a good one. Goodbye. Well, if you're tracking earnings, you should be doing it on public.com investing for those to take it seriously. Stocks, options, bonds, crypto, treasuries, and more with great customer service. And without further ado, we will kick off. The Lambda Lightning round. Let that cloud ring out.

Starting point is 02:50:02 The clock gets better every day. The Lambda Lightning. How are you doing? Hey guys, how's going? We are here live. We're doing great. Welcome to the show. Tough act to follow with Baniop.

Starting point is 02:50:13 He turns it up to 11 every time. Can you do any animal sounds? He's got the dolphin down. He's got the whale down. This is a unique ability. I didn't know is necessary. We're not going to have you make any whale sounds. but it's great to meet you.

Starting point is 02:50:28 Great to meet you. First time on the show, please introduce yourself in the company. Great to be here. So my name is Michael Mena Pat. I'm the co-founder of a company called Rowspace. And ROSPACE is an AI platform for asset managers. We help our customers use their institutional memory.

Starting point is 02:50:43 So that means all their proprietary data, their accumulated judgment to make decisions faster. So what that looks like is we actually plug in to all of their internal systems. This is not just documents, but it's databases, CRM, accounting, and trade information. And we use agents to understand all the connections in that data, the inconsistencies, the conflicts, so agents can reason over it holistically.

Starting point is 02:51:08 The idea here is that data is fragmented and is siloed, and it's hard to make sense of, in a single context window. But using this or having this work on this in advance is very helpful. Yeah. How jealous should every asset manager be of Bridgewater for collecting so much data over so many years? Do you have a view on the Bridgewater strategy? Can you explain what they actually do and whether or not you're a fan of it? I can't speak to Bridgewater specifically, but I think you land on our key point here,

Starting point is 02:51:47 which is that public data is getting increasingly common. And actually, AI is accelerating the commoditization of public data. The more you have tools like Claude that can synthesize anything from the web or from public tools, less edge there is there. So the best edge firms have now is decades of data accumulation and their own insight and judgment as encoding in their data. And our whole goal is to help our customers tap that. In almost every customer conversation we have, there's a lot of. line that's something like we are sitting on enormous value in our data if only we could

Starting point is 02:52:27 get at it or only we can find it. And that's what we're trying to do. So I think AI will accelerate this dependence on your internal data and proprietary data as public data becomes less and less, you know, valuable. Yeah. Talk to me about what your product actually looks like once you roll it out. Because, you know, a lot of hedge funds and asset managers, they do a lot of back testing. And I could imagine going back and running a report, like, backtest the thesis that we talked about, but maybe we didn't actually implement. There's a whole bunch of ways that you could just do reporting. But then you could also go and say, hey, you know, just turn this thing loose, go trade for us. Like, where are we on that continuum?

Starting point is 02:53:08 Oh, there are a lot of great points there. So the first thing is we are not trading or taking action automatically. The idea here is that we will help these firms consider the full amount of data that's possible, and then they make the decision. But our goal really is, it used to not be possible to say, review every single name in the universe if you are about to consider a trade to rebalance your credit portfolio. Now you can with the row space, but it's still a human who makes the ultimate call vary. So that's one thing. The second thing is on backtesting, I love that example, because it's actually been surprising how little post hoc analysis people do of their investment or trading decisions.

Starting point is 02:53:52 What was our thesis a year ago, two years ago, ten years ago, what actually happened? How does that inform what we're doing in the future? That was just a time-consuming thing to do, and people don't do it very much. But we work with a private equity firm now. It's been in business for 50 years, a pioneer over the field. And they actually run every deal through a space along the lines of. Given our 50 years of history, what should we do here? What have we done?

Starting point is 02:54:22 What are the risks? And that kind of analysis would not have been possible before. Yeah. What is your competitive positioning like with the labs? They're all hiring consulting firms. They have forward-deployed engineers. I'm sure they're pitching a lot of the same companies. And I can imagine how I would position row space against building something internal or just leveraging.

Starting point is 02:54:47 leveraging the applications that the labs are building, but how do you sell it? So on the apps that are out there now from labs and from other players in market, what we see is a focus on time savings. So faster models, faster decks, faster summarization of meetings and research, and that's obviously extremely valuable. But our focus has been on decision-making. So what are the things you should be looking at, which would would have been impossible to consider before, the Rose Space can help you with. So in some sense, there are things that our customers do with the Rose Space today, which they did not do before. It's not about saving them time doing work that they have done in the past.

Starting point is 02:55:31 So that's one one chunk of it. The other chunk is we're talking about, in some sense, the crown jewels for our customers, all of this trading data, position data, they're thinking of feces. This is extremely sensitive. So we only deploy. in our customers environment, we never as a company actually take possession of their data. And we do all this processing in their environment. So we have a security challenge, an info challenge, an AI one. And I think the sensitivity to the security, compliance, and other constraints of finance is a big differentiator for us.

Starting point is 02:56:07 Take us through the fundraising round. What happened? So we've done two rounds over the past 18 months, 50 million and 10,000. total. I'm a both times and Burden's

Starting point is 02:56:20 capital joined in the A. And we've had my former bosses were on your show on Monday and they were a big player

Starting point is 02:56:28 in both the seed NBA at Stripe. So it's been really fun because every major ambassador on our cap table

Starting point is 02:56:35 I've been close to for at least half a decade. So Rosebiz gets to be a bit of this bring back the old gang

Starting point is 02:56:41 together. That's amazing. Well, where's the company based? Oh, we are based San Francisco, but a big push for the planning of this year is to expand our New York presence.

Starting point is 02:56:50 Of course. Yeah, that makes a ton of sense. Well, have a great rest of your day. Thanks so much for popping by to tell us about the business. Very fascinating. Good luck. Thanks for having me. We'll talk to you soon. Cheers. Goodbye. Let me tell you about Gemini 3.1 Pro is here with a more capable baseline. It's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view or bringing creative projects to life. And without further ado, we'll bring in our next guest, Adam, warm off from Cherry of Defense. How you doing, Adam?

Starting point is 02:57:20 Yes. Good to see you again. Welcome back to the show. Let's kick it off with the news. What happened? Yeah. Today we announced our $34 million Series A. Yeah, let's get the gong.

Starting point is 02:57:34 We got a bigger gong since the last time you're on. We did. We did. It's impressive. Welcome back. It's not as impressive as a $34 million. seriously, but it's up there. Yeah, take us through the shape of the business today, the key customers, key products, and sort of what changed since the last time you were on the show?

Starting point is 02:57:55 Yeah, awesome. So last time I was on the show, I was just getting done with our first transformation and contact exercise. You guys had had Dan Driscoll, Randy George, in the show. They'd kind of talked about that. We were just coming back from our first participation there. That was our second test event. We've done about 25 since then.

Starting point is 02:58:12 And so we've got systems deployed in pretty much every theater across a bunch of different army units, Marine Corps units, and really just starting to see the traction and demand for the systems grow. As we do see things like drone dominance happening, as we see things like next generation, command and control, all of those systems are fielding and running into issues with that power infrastructure layer. And we've been able to fill that gap and iterate quickly, kind of working with the warfighters, working with the soldiers and getting the systems out there. And assume that, you know, someone listening today didn't catch your first appearance, catch us up to speed on the shape of the product and all that.

Starting point is 02:58:54 Yeah. So effectively what chariot's building is the power layer for robot warfare. So really, you know, you wouldn't send a soldier into the fight without food and water and nicotine. You wouldn't send a robot into the fight without communications, compute, and power. Cool. And so we really see that as one of those core infrastructure layers behind kind of this defense modernization. You know, Anderl's building some great systems in the compute space, Palantir really dominating the network space, and we're kind of building that third missing layer. And so effective what we're doing is taking the technology coming out of companies like Tesla, Apple, Lucid, Rivian, Archer, Jobi, high voltage batteries, silicon carbide power electronics.

Starting point is 02:59:35 If you've read Paki McCormick's, the electric slide goes into detail on kind of major transformation. happening in the commercial industry on that core technology stack. We're taking those and lifting and shifting them into the defense platforms to build hybrid, high power systems. Yeah, walk us through exactly what needs to happen to deploy a high voltage battery on the battlefield. I think most people will be familiar with like the Tesla power wall. And we've all seen like the IBM tough book. You put some rubber corners on it and give it a nice graphite, you know, case. And I imagine there's a lot a lot more going on. So what's the state of the art? Yeah, that's great question. So we really kind of take the best of commercial technology. Our first product we deployed in 424 is literally in a Pelican case.

Starting point is 03:00:21 Okay. Yeah. So we took a Pelican case or say, hey, why reinvent the wheel? Yeah. On just some of that core rugged technology. We do some additive manufacturing to create these kind of internal bulkhead structures. Sure. To kind of isolate the electronics. Yeah. And then we integrate the batteries, power electronics, the microcontrollers, into that, in a form factor that can be left out in the rain and mud, can be dropped off the back of the Humvee. And when I say can be, has been, has been tell the tail. Yeah, so you've been through testing. I assume you've done some SBIRs. Are you moving towards program of record, or are you just sort of in the supply chain for other companies that might be primary contractor? Yeah, so we've got a split go-to-market model, one being directly

Starting point is 03:01:03 to the government, both bottom-up selling directly to units and top-down for her record. and then also selling to other companies as part of a broader kit. Cool. So the inspiration for Terriot was I was the counter UAS program manager at Anderol. We were constantly running into power problems, right? So that idea of selling this as part of a power kit that's enabling other systems is another part of our go-to-market model. Very cool.

Starting point is 03:01:25 Where do you stand on the verticalization debate? We had Mike from also Capital Monk. He kicked the Hornets Nest because he was basically saying, Yeah, it's great to verticalize, but there's some businesses that you can just buy a lot of components off the shelf and make a great product, prove that people want it, and then do it later. A lot of people, I would say most people were disagreeing with that, but every business is different. I'm going to come in here on Team Mike. So, you know, we've really been able to leverage the supply chains from companies. like Tesla, right, and Apple and Archer, where you have actually mature commercial

Starting point is 03:02:12 technologies around these core components around batteries and power electronics. What nobody has done is kind of gone and done that forward-deployed engineering. And so Aaron Price Wright, who led around, I think in her post said, you know, we should actually call Adam the chief forward-deployed engineer. That's really what I've been doing over the past year. And it's that forward-deployed engineering model that kind of maps to what Palatier and Andrel did as well. So Palantir didn't invent, you know, cloud compute, right?

Starting point is 03:02:36 our big data models, right? That was tens of billions of dollars of investment from Silicon Valley companies, and then through good go-to-market, good forward-deployed engineering, brought that into the department. Andrew did the same. The Century Tower, first century tower was really enabled by the autonomy technology developed by the self-driving car industry. Computer Vision went from an unsolved problem in 2014

Starting point is 03:02:58 to just download YOLOV-4 in 2017, and they were able to kind of capitalize on massive investment, right, from the self-driving car industry and just through good for deployed engineering, good go-to-market, bring that into the department. And that's what we're doing for all the technology coming out of electric vehicle, electrical transportation space. What are you most excited about in defense tech?

Starting point is 03:03:19 There's obviously a lot of the Anderol products people are aware of. There's this big, small drone boom. Is there something, like, what's the next big defense tech trend that you think is going to become really important? Yeah, so there's going to be a little bit of a self-serving angle here, but, you know, what we're really, you know, I spent years doing counter-UAS, counter-drone systems pre-UKraine, right? So counter-UAS is a big topic. When we were working with it on with SOCOM in 2021, not that many people were talking about it. And that insight around what it actually takes to do counter-U-S at the edge is really kind of what inspired chariots. So there's a lot of focus on drone dominance, but countering these small drones. is going to require pushing more sensors and more countermeasures onto every mobile platform. And what that's going to mean is every mobile platform needs more power.

Starting point is 03:04:12 To power those sensors, to be able to turn the engine off and manage signature and hide. So avoid detection in the first place. And then be able to derive big surges of power to do things like electronic warfare or high-powered microwaves or high-energy lasers. So we've done tests with higher-dage lasers already as one of those kind of U.S. technologies that needs that big surge of power. Yeah. And that's really where batteries come in.

Starting point is 03:04:35 We want to get shirts that say, We Heart Diesel. We're the most diesel-loving battery company out there. Hydrocarbons are incredibly energy-dense. What batteries give you is that ability to surge that power? Yep. Or the ability to dial it down and hide your signature. And that's really the differentiation of the chariot platform. So why can the Tesla model plug go zero to 60 in under two seconds?

Starting point is 03:04:51 Like it's a surge of power and that's what's unique. Thank you so much for coming on the show. Congratulations. Yeah, insane progress. And we're excited on the show soon. We'll talk to you later. Cheers. Have a good one.

Starting point is 03:05:04 Let me tell you about CrowdStrike. Your business is AI, their business is securing it. CrowdStrike secures AI and stops breaches. And we have Connor Sweeney from Baba in the Restream waiting of it in. Bring Connor into the TV. How are you doing? Great setup. Thanks so much for stopping by.

Starting point is 03:05:21 Please introduce yourself in the company. For sure. No, thanks for having me. I'm Connor of Baba, but we connect older adults and their families with patient advocates. So human pitch, you know, refreshingly. But it really was Neil because these folks do all the care coordination, the scheduling, the kind of keeping the dots for a lot of health care. Yeah.

Starting point is 03:05:44 What was the origin story of the business? Were you just looking at the growth of demographics in the U.S.? Did you have a personal story? What led you to this particular market? Yeah, for sure. I think most healthcare people end up coming into it after, like, experiencing it themselves. And that was also the case with me. My grandma had a stroke.

Starting point is 03:06:02 And I did out of that care coordination. But I think what's cool is that I'm not from the health care world originally. My team isn't from the healthcare world. And that kind of lets us move a little bit faster in different ways, which, you know, has been working so far. But, yeah, she had a stroke that left her unable to speak. So I actually started by trying to build her little AI tools for her speech therapy. And that led to this.

Starting point is 03:06:28 Yeah. So what's the shape of it? the business today. Is this like a multiple-sided marketplace at this point? Like who are all the customers and suppliers that you work with? Yeah, for sure. So we connect, like I said, the older adults in our family, I would say they're like our patients, right, our customers. And we connect them to our advocates who, you know, we have dozens and dozens of folks. They're contractors. But what's really nice is that insurance usually covers almost all of the cost. So we work with like Medicare, Medicare Advantage plans, even Medicaid in certain states.

Starting point is 03:07:00 so that like 98% of our patients or our end customers get this for nothing out of pocket, which is really cool. Yeah. How do you get the end customers on board? I feel like you could run a bunch of Facebook ads. Advertising on Fox News. Yeah, as a TV? I mean, because I just feel like everyone is like, you know, doing viral launch videos

Starting point is 03:07:20 going after the early adopter tech audience, but you're going after a very different audience. I feel like your growth mechanism is going to be interesting to hear about. Yeah, it's honestly more fun, too, because it is. an audience that watches like run the TV and like the scrolling bar at the box, like the Netflix like TV state is actually apparently really high converting. We do stuff like flyers. Of course, we're on Facebook, Google, the whole nine yards there. But we also partner with a lot of like B2B, you know, health systems.

Starting point is 03:07:47 And so with like nursing homes and home health agencies, we often pick up folks that way too. Got it. How are you using AI at the product level? Is it helping make the care? providers like a lot more effective. What does that look like? Yeah, for sure. Like our advocates all, you know, use AI where it's appropriate. A lot of the tasks that they're doing are repeat over and over again. We're constantly making enrollments into things like food stamp and Medicaid. We're constantly fighting insurance denials, right? Writing like rejection letters,

Starting point is 03:08:22 waiting on hold with doctors to the offices to make appointments. All those are like perfect task for AI, right? Like either OCR or voice AI. So there's a lot of like that really like, you know, technical work. But what's cool is that, you know, the patients of those customers, they really like just having a human that they call or text 24-7 that doesn't work for like the insurance company or hospital. That slight difference that our advocates are in their corner rather than some third party really seems to be better received. Take us through the fundraising news. Yeah, what's the detail? Yeah, for sure.

Starting point is 03:08:59 So, General Catalyst led our seed. That happened, you know, just a month or two ago, but raised a little under seven, seven million. And we have like a team of 10 in New York right now. It's a pretty young company, but we're still. Congratulations. Also, can't forget about genius. My neighbor, my neighbor, Ben. Oh, really?

Starting point is 03:09:21 It's also. Oh, okay. There we go. So, love that. Shout out to Ben and Adam. That's fantastic. Well, thank you so much for coming on the show. Have a great rest of your week.

Starting point is 03:09:31 And we'll talk to you soon. Cheers. Goodbye. Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more well, Railway automatically takes care of scaling, monitoring, and security. And without further ado, we have Matt Hart from Basis in the Restream Waiting Room.

Starting point is 03:09:50 Let's bring them in to the TPPN Ultram. How you doing, Matt? What's going on? Hey, guys. How's it gone? It's going well. First time on the show, please introduce yourself in the company. Yeah, well, first, thank you guys for having me.

Starting point is 03:10:02 Appreciate it. Matt, one of the co-founders of Basis. We are fully in-person company in New York. Whoa. We build an AI. Yes, 100% here. No office in SF yet. You got to meet Keith Rabeoy.

Starting point is 03:10:16 He's going to love it. He's going to, he's in New York. I'm kidding. We got Keith up here a lot. He's here. He's here plenty. It's great. But, no, we are an AI platform for a

Starting point is 03:10:27 So we build long horizon agents that are able to automate various parts of accounting workflows. Sure. And we can for a couple years. Yeah. How narrow of workflows are you talking about? Is this like a tool that integrates into other ERP accounting systems or do you want to replace everything? How do you think about the actual go-to-market and then the product fringes? Yeah, it's a great question.

Starting point is 03:10:52 Our objective is not to rip and replace any software. Our goal is solely to sit on top of other pieces of software and sit in the workflows that people are already doing and then say, really, no one should be doing any work. We can take the doers of the work and make them the reviewers of the work and have the AI perform the first pass of all the various things that might need to be done. So that means we need to integrate it into various systems, but it also means that from a deployment perspective, you can easily stand up basis in your environment and put it to work without having to rip out existing software. And where, like, a lot of people have tracked the progress in software, most software, like when you say the doer of the work turns into the reviewer, that feels like what's happening in agentic coding right now. Yeah. How, like, where in accounting, how far along are we, would you entrust a reviewer to not actually do any of the work on, I don't know, your personal tax return or something?

Starting point is 03:11:47 but I don't know what the toy example is, but how close are we to, you know, this situation like what we're seeing with coding where people say, I don't write any code anymore. When will we see accountants say, I don't do any of the work? I just review the work. Yeah, it's a great question. I think it depends a little bit on the complexity of the task. For instance, there are some things that the basis has been able to do for quite a while where I think accountants have already sort of built up trust in basis' ability to do these

Starting point is 03:12:16 things. And so in those situations, there may be spot checking, but they may not be reviewing quite as actively. And then there's some things, for instance, we just, you know, released yesterday an example of the first AI that's able to complete an entire, you know, corporate tax return workbook end to end by itself, which I think is a remarkable milestone in the accounting world. And that's something where that's a capability that's only existed for the last, you know, a couple months. And so, you know, that capability obviously would apply a different sort of level of review to those types of situations. The interesting thing is that accounting is actually built for these types of review. So accounting, obviously accuracy is extremely important.

Starting point is 03:12:52 Humans themselves make lots of mistakes. And so accounting already has multiple levels of review that are built into processes, which means that when accountants are thinking about how to deploy bases, they can kind of apply that same review mentality to incorporating bases into their workflow. Think about what are the areas of highest risk. Make sure that you can see it doing the work in the way that you think makes sense first. And then as you build up trust, you sort of, you know, I can adopt the way that you actually think about reviewing the work. And then to the point on coding, I think it's interesting because accounting is obviously not a text in, text out discipline. You know, it's not something where there's tons of data on the internet about, you know, various accounting workflows.

Starting point is 03:13:30 And so I think it doesn't quite, it's not quite as immediately obvious how to use AI to help with those workflows to the way, to the extent that it is in legal or in, you know, coding or other areas where LMs out of the box are clearly very good. And so I think it has taken some time for AI to get good enough, to the requisite level of accuracy and over sufficiently complex tasks for it to be extremely useful. But I think that's kind of flipped over the course of the last year. And I think what we've seen play out in sort of software engineering over the last year will play out in accounting in the company. What do various players in the accounting world, how are they processing AI overall? Do they think that the fee model will have to change? I remember, I forget, there was one audit. that was getting mad at their auditor for saying like, hey, we know you're using AI. You got to

Starting point is 03:14:20 give us a better price. And they're like, wait, you're an auditor. Yeah, it was the Spider-Man meme. But yeah, how are people processing it? Yeah, it's a great question. I think one of the interesting dynamics about accounting that I think is not true for a lot of other, you know, professions or areas of professional service is there is a very dramatic shortage of accountants in the U.S. And so when we started out serving a number of our customers, they were not necessarily interested in doing AI for the sake of AI. I think over the course of the last year, that's flipped, and everyone's board says,

Starting point is 03:14:50 what are we doing from an AI perspective and people want to have AI initiatives? When we started in 2023, that was not the case at all. What was the case, though, is that there was a huge shortage of accountants. And I think roughly 300,000 accountants left the profession over a two-year period in and around COVID. You never know what to make of these demographic estimates, but they say roughly 75% of accountants were retired over the course of the next decade,

Starting point is 03:15:12 And there are very few folks joining the profession to make up that gap. And so that means that if you are an accounting team or an accounting firm, one of the core things you have to solve for is how do we continue to do the work that we need to do with the people that we can hire. And so one of the things that basis is enabled firms to do is to take on a lot of the work that otherwise they would not be able to get done because of the shortages that exist. And so I think that dynamic has made the adoption, you know, maybe happen quicker than it would have otherwise. have if that shortage didn't exist. Yeah, it's fascinating. On the other side, in law, from what we've seen, you have tons of people applying to law school simply because, maybe just because they don't have anything better to do, which implies, like, we may have, you know, a huge influx of lawyers, but accounting not as

Starting point is 03:16:02 prestigious hasn't. Yeah, I can see why it hasn't attracted the same influx. But, yeah, I think even as I think about it, like, all these kids just want to be asked for. I've had, you know, working with a number of firms over the years, it's always, like, super annoying if the partner or associate, more so on the associate side, an accounting firm, leaves, and then there's all this, like, context that's lost, and you really, like, if an agent had been helping with that entire process, it would be a lot smoother. So I'm going to recommend basis to our firm. I have one more question.

Starting point is 03:16:39 We'll let you get back to your busy day. How do you think about harness development and throwing the context back to the human in the middle? Because it sounds great to be like, okay, I'll turn this agent loose and it'll come back to something I can review. But a lot of these things, when I'm interacting with great accountants, it's not just sum up all the bills and, you know, you have your total revenue or something. It's like, okay, I found a bill. I don't know how to categorize it. Is this CAPEX? Is this OPEX?

Starting point is 03:17:08 Is this a business expense? how do we classifying this? And like, sometimes that data can just be, you know, agentically go and, you know, look at the receipt, figure out what happened, figure out how to classify it. But a lot of times it requires in an interaction with a human, either over Slack or over an email or something. And so I imagine that deciding how to be, you know, persistent but not annoying,

Starting point is 03:17:30 is that a big challenge that you're actually working on? Or do I have that kind of roadmap wrong? Yeah, 100%. very important part of things. Like part of doing accounting work is the world is this very messy, complicated place where all sorts of economic activity is happening. And you need to figure out how to get that information in order to probably account for things when you were not present at the time of some kind of economic interaction. So it's very important. And I think it is one of the challenges of, you know, we spent a lot of time thinking about these long horizon agents because,

Starting point is 03:18:02 you know, because of the nature of accounting work, you know, this sort of chatbot experience is not one that naturally works. And so we've been focused on developing these agents that can sort of work on more complex tasks over longer periods of time. And one of the challenges there is you have to figure out as the agent is going about doing its work, when to interrupt and ask the human a question,

Starting point is 03:18:21 and also how to provide the human insight into what's going on. Let's say you're going to do a task and the AI is going to go off for the entire day. You know, the human can't find out at the end of the day that it did something that wasn't exactly aligned with what they wanted because then the whole day has been wasted and they need to deliver something to their client. And so figuring out how to both give visibility and then also how to raise concerns to the human user is extremely important.

Starting point is 03:18:42 And sometimes you even need to go directly to a different source. You need to send an email or take some other action in order to complete the workflow. So I think it's an essential part of One Horizon Union development. Super competitive hiring market right now. Give us your 60 second elevator pitch if you're competing to hire somebody with the big labs or somebody that might join hard. or, you know, cognition or any of these other companies, how do you close them? Yeah. Well, I mean, look, there's lots of exciting things going on and lots of great opportunities out there. But I think there are a couple of things that we think are particularly important,

Starting point is 03:19:19 and it might not appeal to everyone, but certainly a certain type of person. I think the first is that, you know, we are pretty much solely focused on building the most capable, most accurate long horizon agents. And I think we're at the frontier of that work. We work very closely with the labs that are building the most sophisticated reasoning models and we have for quite a while. And so I think for folks who are interested in figuring out how can we build the most capable, most autonomous systems and apply them to actual, to real work in the real economy, that is part of the work that we do, or it's really the core part of the work we do that I think is methodologically extremely interesting.

Starting point is 03:19:55 I think the second thing is that we are a fully in-person team in New York, and all of our research, all of our engineering takes place here. And I think there are very few other companies that are on the frontier of applied ML and are also fully in New York. Obviously, there are limitations relative to the Bay Area in some ways. But I think there's amazing ML talent here. And so we are sort of hopefully becoming the home for applied ML talent in New York City. And then I think finally, accounting is just a hugely important part of the economy and how we operate as a society. We sort of see it as the fundamental way in which we understand economic life, in which we sort of structure and system.

Starting point is 03:20:32 all the economic activity that happens. And then it has tremendous implications downstream in the organization for how people make decisions. And we think there's a huge opportunity to do way more accounting than we're doing right now. And it could actually help organizations function in a much more effective manner. We actually think it has an interesting parallel to engineering in a certain sense, which is that accounting is about how to use sort of systematize and abstract is very complicated world.

Starting point is 03:20:56 And in some sense, that is like the practice of software engineering as well as like, how do we understand, you know, this very complicated. domain and reduce it to a piece of reliable software that we can use. And so I think it's much more important than people think. And I think it actually is very sort of compatible with the ways that engineers and ML folks like to think as well. So those are the things that we sort of think are most important. And we're really lucky to have a great group of folks here at races. And you got some money to hire more people. Take us through the fundraising round. What happened? Yeah, so we, I think when we're thinking about raising money, one thing that never changes is the strategy and what we're trying to execute from business perspective.

Starting point is 03:21:38 We have actually at our first seed round and then at every successive round, you know, written a quick memo or cover letter. It just outlines a strategy. And the strategy, which is that, you know, we are trying to build these long-ferrising agents to solve the important problems in accounting has not changed. Some of the core principles around how we make decisions have not changed. So we actually try to make sure that when we raise around, it doesn't actually change the strategy of what we're doing in a meaningful way. Like we think that you should be relatively consistent. You should obviously update as you go in that respect. What it does allow us to do is it allows us to keep growing the team in the ways that it needs to grow.

Starting point is 03:22:12 And so that's mostly what we brought the additional capital on in order to do. There's so many different domains of accounting. There's so much ML and engineering work that needs to be done, no matter how much we use AI internally to make all those things more efficient, there's just endless things left to do. do it. So we just felt it was the right time to do it. And we're very thankful that we have a great set of investors around the table to allow us to keep making the next. And how much did you raise in this most recent round? We raised 100 in this round. Woo! Massive. Thank you for coming on this show. Massive. Have a great rest of your day. And we will

Starting point is 03:22:47 talk to you soon. Yeah, great to meet you. Goodbye. Cheers. Well, I need to hop on with the English countryside soon. So are there any more news stories that we should cover before we plant the bomb. Figma director, Andrew Reed, just bought $36.5 million worth of Figma, the largest ever insider buy of Figma. Very exciting for him. He's going longma on the Figma. Dreamwave. It's a stretch. People were debating back and forth with also Capital founder, Mike, who came on the show earlier. I, you know, I think he had a really good point. I like his point.

Starting point is 03:23:32 I just think it's funny that Yimbieland ratioed us into the stratosphere by posting. No, you can't just vertically integrate like that. Meanwhile, in China, BYD, I guess we do in ships now. I had no idea. I saw the BYD logo on a ship. I didn't realize that they made the ship, I guess. They make everything. I guess they make cars and monorails, too.

Starting point is 03:23:57 absolutely insane, but 10,000 likes on this. And although it's like a, I don't know, it's a dunk ratio, whatever, it is an inspiring message. If they can do it, why can't we? So just do it. Just go build a super tanker, I guess. Figure it out. Anyway, anything else from the timeline that you'd like to talk about before we call it a day. There's a lot more.

Starting point is 03:24:22 There's a ton more. Mark Zuckerberg is planning a stable coin comeback. They also have a banger deal with AMD going on. And if you head to the bar this weekend and you drink too much, you should just say that you were the victim of a distillation attack. That's the correct turn of phrase. Anyway, thank you for watching. Leave us five stars on Apple Podcasts on Spotify. Have a wonderful day.

Starting point is 03:24:48 Nice work, brothers. I'll see you on the next one.

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