TBPN Live - Rage Baiting is for Losers, Everett Randle’s 5x Controversy | Jordan Nanos (Technical Staff, SemiAnalysis), Brian Halligan (Co-Founder, Hubspot), Dr. Fei-Fei Li (Co-Founder & CEO, World Labs), Scott Sanders (Chief Growth Officer, Forterra), Jeremy Allaire

Starting point is 00:00:00 You're watching TVVN. Today is Wednesday, November 12th, 2025. We are live from the TVPN Ultram The Temple of Technology, the Fortress of Finance, the capital capital. What's going on over there, Shorty? You got caught lacking? I was publishing an essay. You were publishing an essay. It's live on X now. You can go listen to it. You can also subscribe at tbPN.com. Our substack will email you every morning with the TBPN newsletter and, you know, 500 words from me or Jordie. It's a lot of fun. Go check it out. Also, check out ramp.com. Time is money. Save both. Easy to use corporate cards, bill payment, accounting, and a whole lot more, all in one place. The thing that got Jordy to learn to type was this video, this launch video. You were like,

Starting point is 00:00:51 I got to write an essay. I got to learn. I got to lock in. I got to learn how to write because I got to respond. This is, this is, this is, it's, it's enraged me. Were you enraged? I wasn't enraged. I try not to let the internet make me mad. Okay, but they were trying to enrage you and the fact that they tried made you angry. Yeah.

Starting point is 00:01:10 You got angry, you weren't enraged. You were below enraged, but you were above angry. And so you had to put him in the truth zone. You had to write a long post, an essay about it. We'll go through it, but I'd love to watch the Chad IDE, BrainRoll code editor video first i want to see i want to see the video for myself let's play it okay so he's got some new port cigarettes he's packing pulls out a cigarette with the stanford lights it up he's got the cutoff stanford cutoffs what is this music that's playing he's got the the

Starting point is 00:01:46 guitar in the background and what is he playing some sort of plink this is steak oh this is steak because this is gambling so he's gambling and he's gambling in the IDE okay so I assume I assume that means he's won something or other I actually don't know what the stake UI looks like okay so he's done winning he he has won the the gambling session with steak and now he's back in his IDE and he writes a prompt and he says test the code and it pulls up some sort of mobile game that it's playing. This is Clash Royale. This is Clash Royale.

Starting point is 00:02:25 Okay. Have you played? I have played in middle school, yeah. Hmm, interesting. I never played, I never really got into any mobile games. I did play Politopia. I like Politopia. That's a good game.

Starting point is 00:02:39 It's a mobile game. It's like Age of Empires, but on your phone. Elon is a big fan of that. Elon's a big fan of it. And with Politopia, actually, the entire Elon universe is sort of into Polytopia. It's like how you gain status at some of these companies. It's like waiting in polytope. So I'll start by saying, I think the video is funny.

Starting point is 00:02:55 Okay. And I'm sure the founders are smart. Okay. And I think they, they, for a low budget launch video, I think they did well. They broke through. That is a very low budget launch video. That literally cost nothing. Yeah.

Starting point is 00:03:09 Okay. So I think that's great. And I'm not, and I want to be clear that I'm not bearish on the founders at all. But this made me think of something, and I'll read through my post. So the title of the essay that I just put out, Rage baiting is for losers. This is in itself, if you have been rage baiting. There's sort of levels.

Starting point is 00:03:34 But I said yesterday, YC announced Chad IDE, aka the BrainRot code editor. Chad is an AI code editor that allows you to gamble, watch TikTok, and use dating apps while you work on coding tests. Their launch rightfully got a lot of attention. On one hand, it's funny. On the other hand, what are we doing here? and why does this belong in the official YC account?

Starting point is 00:03:52 To understand Chad IDE, Clue Lee, icon, friend, and the new class of Gen Z startups, you have to understand the online environment that these founders grew up in. If you grew up on the internet and you studied how and why certain people would regularly go viral,

Starting point is 00:04:06 you know that making people mad has and always will be an effective way to get attention. The feedback loop is simple. You make something that makes people angry and people comment, share, and dunk, and because feeds are optimized to show posts with high engagement the most,

Starting point is 00:04:20 you get a lot of reach. Rage baiting for commercial purposes, in my view, was pioneered by course bros. People like Ty Lopez realized that making the masses mad was an effective way to drive course sales. You could flaunt Lamborghinis, make a bunch of people angry, and as long as a handful of people found their way into their course, it was a viable, repeatable strategy. Historically on X, rage baiting was a marketing strategy, not a product strategy. Accounts like sweaty startup, aka Nick Huber, frequently post things to get an angry reaction

Starting point is 00:04:48 in the subsequent reach. But behind the scenes, Nick has always been running a pretty normal commercial real estate fund. In 2025, rage baiting has become a product strategy. Cluelly started as an app for cheating on coding interviews. Chad IDE's only known differentiation from the other 100 AI native IDs is that you can gamble and swipe on dating apps in it. The rage bait is sitting at the product level now. It's becoming clear that while rage bait might occasionally work as a marketing strategy, it really should not be employed as a product strategy,

Starting point is 00:05:18 Running a successful VC-backed company requires you to build a coalition of people that want to see you win. Getting media, investors, talent, and customers on your side is not an easy task. Rage-baiting, whether at the marketing level or product level, is the most effective way to get people who could be potential investors, customers, or team members to actively prey on your downfall. YC has long provided some of the most durable, high-quality, generalizable advice for startups, and I believe that it has had a tremendously positive impact on the companies that go through YC and even those that don't. Launch now, make something people want, do things that don't scale, ignore your competitors are just some of those. So as someone who believes that YC is one of the most important and influential institutions in tech,

Starting point is 00:06:00 I believe it might be time to include this in their list of essential startup advice, rage baiting is for losers. So again, I think, you know, I'm sure that, I'm sure that there's like more to Chad IDE than we've seen so far. but I do think it's notable that rage bait has moved from kind of a fringe marketing strategy to a marketing strategy within tech to now living at the product level. And I just don't think that's going to create a lot of enduring value for the companies that pursue that strategy. Yes. So the reaction to this was very negative.

Starting point is 00:06:38 And I think there's a few, it really has to do that layer of the stack. It ends up, it ends up impacting the brands. of the firms that fund these ideas. Of course, of course. There's a post. I'll try to pull it up here. Let's see here. The most important different, like the most important thing in your piece that I liked was

Starting point is 00:07:01 this idea that there is rage bait marketing, doing a stunt, doing something a little bit crazy, but then delivering a quality product is separate from making the product itself rage baity. And so I think a lot of people, when they saw this video, they wanted, they were wondering, what does the product actually do? Because all you've told me is that you created an April Fool's joke. And Google's been doing April Fool's jokes for years. Some of these April Fool's jokes I was looking at were insane. In 2000, just a couple of years after they launched, they created a fake mind reading search engine.

Starting point is 00:07:40 Then they did pigeon rank, an explanation that Google's algorithm relied on trained pigeons. They launched a free home broadband service, so internet, delivered through your toilet. They announced Google Translate for animals. You could talk to your dog and it would try and translate. These were all jokes. They were never real products. It was just the Google team having some fun on April Fool's Day. They would get a bunch of attention.

Starting point is 00:08:08 And then they would route you to the safest, fastest, most secure email system possible, right? Like a real product. But they would have a lot of fun. And sometimes they would even build a little, like, web experience around it. But at the end of the day, it was like, yeah, but also we're ready to sell you servers with Google Cloud Platform. Or we're ready to sell you, like, you know, ad units on Google. Like, it was like, we have a serious business. And so the question for me and the question I had for Tyler was, what's actually under the hood at Chad IDE?

Starting point is 00:08:36 The company is not called Chad IDE. It's called Clad Labs. The steel man here is that, hey, IDEs are boring. You got to do something funny. film a funny video, create a fake product, but then have something under the hood that is actually real, that does actually advance the conversation, and is maybe something that a real product would try to sign up and need a code. Yeah, so what happened? We asked you to sign up. And one thing I would say before we go further, I think this would have been a brilliant kind of like stunt if they did it

Starting point is 00:09:08 as a stunt and it wasn't core to the brand that they're building. It wasn't core to the product. If they did it. Yes. If they released a product and then later said, hey, we're adding this brain rot functionality. Totally. Totally. Like that would have been, that would have been got, I think, a good reaction. If it was April Fools and Michael Truel at Cursor or Scott Wu with Winsurf, we're like, we're doing, we're doing a brain rod version of the IDE. Everyone would be like, that's hilarious. Okay, now back to using Winsurf and Cursor, right? Like, that's just what. Yeah, and I don't think it, it certainly probably is not a fit for Cursor's brand. No, not at all. If you were creating something to try to compete in that space, it would have been

Starting point is 00:09:43 a good strategy. But again, I'm actually fight you on that. I think that cursor has this very, Michael Truel has only done like a few podcasts. He did that podcast with Patrick Collison. He's, he's this very like thoughtful software engineer.

Starting point is 00:09:59 Scott Wu is this IMO gold medalist. Like there's something that actually would be very funny and might actually break through if they did some silly brain rotty stunt. Because it would be like, well, obviously they're not actually doing that. obviously what they're focused on is just improving developer productivity. And instead, this, it just

Starting point is 00:10:18 hasn't answered a lot of the question of like what's behind the curtain, what's behind the marketing? Because if it's brain rot stuff, if it's jokes all the way down, like what are we really doing here? But Tyler, what was your experience actually trying to use this product? Yeah, so I go to the website. You can't

Starting point is 00:10:34 download yet because it's still in beta. You need a code. I DM the founders, but they didn't get back to me. But like, I mean, the company is not Chad left. It's clad labs. Yes. It's the chat ID, but like, this is obviously a marketing stunt. I kind of disagree.

Starting point is 00:10:49 Yeah, but can you get a product from Clad Labs? Like, Google would come out with a joke, you know, pigeon-based algorithm or something like that. That would be out or like Google Translate for Animals would be at like animals. That day. But Google Translate would still work. So like walk me through the Clad Labs product. Like what is their core product outside of the stunt? Yeah. So I mean, obviously I haven't tried it, so I'm kind of giving them the benefit of the data here. But like when you go to the download page, there's the options like which brain rot do you want? And it's like, you know, steak or like Minecraft Barcore or whatever. And then there's an option that says I don't want brain rot. So there is obviously a product here that is like not just, it's not just the brain rot. That's not the entire company. Like when you go to the pricing page, it says that it says like there's, you know, the free pro super whatever tiers. It's not listing like, oh, this one has the Minecraft one. It says like, oh, it's.

Starting point is 00:11:42 It has unlimited, you know, agent tool use. Okay. Like, there's obviously a product here. This is a marketing stunt. I, like, believe that. Okay. I, like, I kind of disagree that. I just think, I just think it's a poorly executed stunt and be, and.

Starting point is 00:11:55 Because you have not told me what the differentiator is. Like, how is this better than WinSurf? How is this better than cursor? Like, what is their value prop other than just like, oh, cool. It's a newer, it's a newer, it's a newer cursor with less funding and the team's less serious, but they're good at making viral videos. Like, what does that do for you as, here that I think is, you know, there's an account developing Valhalla is quoted the post from

Starting point is 00:12:19 YC said, this is what we're promoting instead of telling young 20-year-old founders to take us to the moon, to create better societies, to improve the material conditions of our fellow man. YC is funding garbage. There's only making our society worse. You don't hate VCs enough. So I think there's just naturally, like I just look at YC as an institution that has consistently, provided just very sort of like the best quality advice that's generalizable, right, for just any person that wants to get into startups. So let me tell you about restream, one live stream, 30 plus destinations, multi-stream reach your audience wherever they are.

Starting point is 00:13:00 There is this post by Shiel Mo Nat here. He says, met a very successful founder who said, I chose fund, blank, because they gave me credibility when I needed it. Now the fund backs everything, including the dumbest ideas. I've ever seen. I don't think the next wave of founders will pick them. The credibility they had is gone. And I was thinking about how a-U-M-weighted brain rot or a-U-M-weighted slop is not an excuse for slop and controversial investments. Like, if you put, if you put 1% of your fund into something that is just going to go all over the internet and be like, we're the

Starting point is 00:13:38 most degenerate. We're the craziest. We're the most insane. We're the most fraud. We're the most fraudulent, like in your face company, even if it's only 1% of your fund, you're not going to be able to say, like, no, no, 99% of my investments are just, like, you know, trying to cure cancer genuinely, or like actually trying to improve developer productivity, or like 99% of my investments are just reasonable down the fairway, like good businesses. But 1% of them, I took a flyer, 1% is a little bit crazy. Well, if that 1% gets a thousand times more views than your enterprise SaaS portfolio, like you're going to be known as the slop fund.

Starting point is 00:14:12 So, like, you need to be careful about that. Yeah. Because, because the nature of the internet is that, is that a viral rage baity video can get a thousand times more views than your latest bet on AI legal services that might actually be helping improve lawyers' efficiency or something like that, you know? Yeah. So, like, in terms of brand, it's a real... YC has always had, you know, one of YC's challenges as an institution.

Starting point is 00:14:40 is that they can only accept something like, I think it's like less than one, isn't it less than one percent? Oh, yeah. So super small, you know, very, very low acceptance rate. Yeah. And so if you're a founder that applied with an idea that you think is, you know, world positive, and then you see them announcing this kind of stuff, they're going to be, you know, that those founders are going to be even more frustrating, right?

Starting point is 00:15:03 I want Tyler's reaction, but first I want to tell you about Privy wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spend up white label wallets, sign transactions, integrate on-chain infrastructure, all if you want simple API. Tyler, what do you think? Okay, so, like, as a steel man, like, say that I have some new way to do, you know, agents in my editor, right? And it's like, it actually works way better than cursor.

Starting point is 00:15:23 It's way better than everything else. And I apply to YC with this thing. Okay, there's like probably, what, like 10 other YC companies that are, like, literally YC companies in the same batch doing similar, you know, coding editor stuff. How do I differentiate myself? I feel like this is like fairly reasonable, like to get, more views. Like, imagine, I think from their opinion, the idea is like, okay, we get some users that think it's, like, funny to gamble in their IDE, and then they realize, like,

Starting point is 00:15:49 oh, this is actually a pretty useful feature. And this is all assuming that they actually have good tech underneath. But, like, what, like, Jordy, if you were in YC and you had a coding editor company, like, how would you launch it? Yeah, how do you, like, recommend, like, instead of doing stuff like this, how do you, how do they differentiate themselves? If Clad Labs had launched something and they were just like, hey, like we're, you know, we're building a better IDE. Here's how we use our model. Oh, cursor. They're currently in a fight with Anthropic.

Starting point is 00:16:18 The rates are through the roof. Ours is cheaper for this one reason. And we have this better UI and better functionality. And we also have this engineer who figured out this little solution. And we work on mobile and they don't. Or we work on iPads and they don't. Or we work for Fortran and they don't. They only do Python.

Starting point is 00:16:33 You know, there's a million ways to like articulate your differentiation. they certainly, it doesn't seem like they even tried to do that. It doesn't seem like they even tried. Sure, but I think you could probably find companies in this YC batch doing exactly that. Yes. You don't know their name. Yes, yeah, yeah. That is true.

Starting point is 00:16:48 That is true. And you do, like, I just go back to what I said, which was separate out the rage from the core product and have it be like a marketing stunt, I still think you could have gotten the same amount of attention, but that people would go in and they'd be like, wait, this is actually a really cool novel approach. We know for sure that they're not doing that. This seems to, like, when I read this, I see it as a marketing. But it's like, like, so I would, I would agree with you.

Starting point is 00:17:14 If I could go to cladlabs.com and, like, see the actual product. But it's like cladlabs.com is not even purchased. Like, they, like, there's literally no information. Okay, clad labs. But I, but when you go to the site, it, it is just like the brain rot. Exactly. Like, like, where is the real product? Like, there is no real product.

Starting point is 00:17:34 here. And that's what Jordy's risk is, is that, is that they, they're in time, they haven't built anything behind the scenes. It's all marketing. It's all stunt. And it's like, yeah, doing a stunt is maybe fine, even if it's designed to enrage people. It's like, I, I, I don't know, maybe you shouldn't do that. Maybe people are against even doing the stunt marketing. I think it's actually okay. I think we went through this, clearly. Like, there was, there was the moment where, like, it was, it was, clearly was doing rage bait marketing. And there were people that it were upset about that. But there were other people that were upset about this idea of, like, the product you're making is to help people cheat and cheating is bad. It's like, the product you're making is to help people gamble and gambling is bad.

Starting point is 00:18:17 And so if you are anti-gambling, you are anti this product that they built. And now they have the opportunity to say, no, no, no, like, here's the real thing. And they haven't done that yet. And there's no, like, oh, click seven layers deep in the menu. and you can see that it's like, oh, this was a stunt for this other thing. Like, they haven't actually put out any breadcrumbs of, like, what they're actually building. And so I think that's why it leaves such a bad taste of mouth, is that it feels like they spent all YC just working on a stunt.

Starting point is 00:18:46 And I'm going to give them the benefit of the doubt that I'm sure they're, I'm sure they're smart and I'm sure they have a, have a deeper, broader vision. And I think, you know, the reality is, is like having these moments between prompts, is a sort of, is a sort of an unsolved problem? 100%. 100%. And so, yeah, it feels like they, it feels like they risk sort of going the Cluelly route, which is over-optimizing for rage bait product development even.

Starting point is 00:19:24 And then they have to like figure out what the final product is, where it's like, okay, I think it's okay to spend. to spend, you know, a day in YC, thinking about like, what's our marketing strategy? That, that video did not look expensive to film. Yeah. What feels expensive is like, it seems like they actually built the full product. Like, it feels like they built the full brain rot product. Yeah.

Starting point is 00:19:48 And it's like, you didn't need to do that. You could have just gone viral for the video and then followed up and been like, it would have been so easy if at that end of that video, be like, like, that's what people feel like Gen Z entrepreneurs build. Yeah. But we didn't want to do that. So we actually built this. Go down this video. But I'm not going to, I want to try the, I don't want to gamble, but I want to see it actually like in the IDE. That's like funny. But if they, at the end they say, oh, it's all a joke. It's like, okay, it's another ID. I don't need another one. But I want to. What do you? I want to try it.

Starting point is 00:20:20 You can just do window management. Like, what are we actually talking about here? Just put TikTok on the, on the left side of your screen. I have two windows open right now. This is a Mac native feature. Okay. Well, let's pull up this video from Chirav Arora, who's going viral this uh yesterday okay he said tips to apply at y c batch winter 2026 and i think i think shirav is an is a literal child uh it seems to be under uh under uh under under 10 years old something like that he looks very young yes very young and the reason the reason that i think why i'll tell you cognition where makers of dev dev devian the ai software engineer crush your backlog with your personal AI engineering team uh you want to play this big Do you?

Starting point is 00:21:03 Good job. First tip, you should have some clear cold. Like what you should do after funding and you should have a place? I can barely hear this. Okay, we can pause. But the reason I included this is because I think there's a lot of people like Chirav and tons of young people that look to YC as like whatever YC is promoting, they approve. Yes, yes, yes, yes. They give a lot of advice.

Starting point is 00:21:30 Yes, yes, yes. If they're sharing something on their social account, it means it has weight. It means it's a valid strategy. And so I just, I want to avoid a scenario where the shiravs of the world think that they need to rate, rage bait in order to like break out in this industry, right? Because it's just, it's not the reality. You can just build a great product. You can get, let that speak for itself.

Starting point is 00:21:52 You can find ways to market it along the way. Yeah, I mean, I feel like, I feel like that's part of the reason why Gary Tane was tapped as the, as the president. Like he, I don't know, all the complex behind the scene stuff, but he was putting out content on his YouTube channel and certainly carrying the torch of YC forward where he was definitely speaking to the next generation of entrepreneurs in an extremely positive way, telling all these fascinating stories about his entrepreneurial career, his values. I mean, he hosts meetups at churches and has really focused on building an extremely positive. community. And there is a question about the YCX account. Is it a portfolio list? Is it every company that launches? Or is it a library that they're building for startup advice? And they stand by everything that happens there. There's two different things that you can use the account for. Right now it feels like it's a little bit of like, hey, like, you know, if it gets views, we're going to

Starting point is 00:22:56 put it up there. If it's fun, if somebody's doing something fun. But you don't always have the same You don't have the same, like, the context really matters. Like, I think that video goes more viral because it's on the YC brand account, as opposed to, oh, some people got into YC, they pivoted, they came up with this funny video, like, they're just having fun, like, they're kind of, like, after YC, there's a whole, there's a whole era where you go through YC, you hit Demo Day, and then, and then a few months later, like, there's companies that still have a little bit of cash, but they're not really building the same thing, and it's not like, I would not hold the YC founders responsible for

Starting point is 00:23:36 what YC companies do post-pivot, post-demo day, where, yeah, the company is still a YC company. You know, you do have, there is sort of a code of conduct in YC, and they can kind of kick you out a little bit. But legally, like, there is a contract where once they invest, you can't just take the money back because they think you're doing something immoral, unless it's like fraud. If it's legal, like, they can't just ask for the money back. Teddy Blank says sharing a video of Alby, who is a 14-year-old applying for YC, went extremely viral earlier this week, got 3.6 million views. Wow.

Starting point is 00:24:13 It's a 14-year-old founder. Yeah, let's play it. I'm Alby. I'm 14 and I'm based in Sydney, Australia. I've been building things ever since I was 6 or 7. Brow. Don't get the joke. Really good editing.

Starting point is 00:24:27 Well, I've been building things ever since. I was nine. First writing code at code camps, then building Roblox games, and even launching a soccer gear brand when I was 12. Wait, did he edit this? We got to hire this guy to edit for us. A game-fied learning platform where teens learn the real world skills that school forgot. Like on the commercial coding, AI, content creation, etc. Instead of boring textbooks, you level up, earn XP, and unlock challenges as you go, all while learning from top founders, creators, innovators, and other young people doing amazing things. I started Finkel because school wasn't teaching me or my friends, how to actually build, create, or launch something in a real world.

Starting point is 00:25:03 He says my default reply to high schoolers hitting me up for VC funding is put me on the phone with your parents. This is awesome. I love this. I hope he gets in. I should recommend this guy. Uh, if he doesn't get into YC, Alby, we'll hire you.

Starting point is 00:25:19 Yeah. Head over to Los Angeles. Head over to Hollywood. Yeah, I don't. This is, it's interesting because it's sort of a, uh, sort of a, uh, sort of a, you're, like, you're not really supposed to do this when you apply to YC. Like, the application video is, like, they definitely don't want a game of, like, a Red Queen's race where it's about the video production.

Starting point is 00:25:40 Yeah. But at the same time, like, you got to play the game on the field. Like, you're supposed to just turn on the webcam and basically just talk for one minute. That's how you apply to YC. One shot it. Yeah, you're supposed to just one shot at, no editing, because they don't want it to turn into, oh, to apply to YC, you spend two weeks doing an edited video. They're like, no, work on your product.

Starting point is 00:25:59 And then the marketing is like the last little cherry on top. Like that's always been the YC mantra. And that's a little bit of like this cloud labs thing. Although the weird thing is like the video, I love the video. It's funny and it's cheap and it's clearly just like a bit and they did it and it was two seconds. But then it feels like they didn't, they didn't give me the payoff of like, oh, okay, you guys are funny. And you're working on something cool and interesting and hard and different. And so I just feel like I didn't get the payoff of the joke.

Starting point is 00:26:26 like the beauty of those Google April Fool's Day was that that was the era when they were on such a tear. You would go and you would go to a Google April Fool's joke and then you would land on their product blog and you would be like, oh wow, like they did some crazy update to Google Maps and now you can see your house from the street because they just invented street view. Like this is incredible. They were delivering on so many different levels that they earned the right to make the April Fool's joke. They earned the right to joke around because they also had a massive monopoly in search engines. And so they were printing money. So no one was like, oh, this is so unreasonable that they took a couple hours out of their developers' time to go build some funny gag. Anyway, bigma.com.

Starting point is 00:27:10 Think bigger, build faster. Bigma helps design and development teams build great products together, get started for free. Sheel says met a very successful founder who said, Oh, I read this one. Because it gave me credibility. We covered this. What? I read this one.

Starting point is 00:27:26 We covered this. Sorry. Oh, sorry. Yeah, we jumped ahead. Earlier. Yeah, this was my point about, about if you, if you, even if you put 99% of your AUM into boring B2B SaaS or even curing cancer, if you do one deal that's going to get a little crazy and go viral, like that's going to have a big impact on the fund overall. Should we go to more drama in the venture world? Ev Randall, who's coming on the show on Friday.

Starting point is 00:27:51 went on Harry Stebbing's show, 20VC, and is putting the timeline in turmoil over some comments about other funds. I'd love to play this clip from the actual interview. It's in a minute and 32 seconds. I don't think, Ravi or Hamant or even Ben and Mark at this point, I don't think that they can go to LPs, one of those legs of the stool, and say, hey, this basket of funds that were making you invest Pari Pissue across,

Starting point is 00:28:20 we're going to get you 5x net on that. I don't think they can say that or they at least can't say that with a straight face. And if you look at the recent return data, I think it suggests that. So I think they'll be able to make an immense amount of money

Starting point is 00:28:31 on an absolute basis, but I think a lot of these LPs are in the business to make, or in venture to make high money on money returns. Like they had P.E. for the low return stuff and they probably get better liquidity from P.E. They're here for the high money on money returns. And this is one of the reasons why I'm extremely excited

Starting point is 00:28:46 about benchmarked competitive position in today's market because we can go to LPs we can say, hey, we're shooting for higher than 5X net. We have the historical track record to back it up, and we have the fund sizes to back it up as well. I mean, you had Miles from Carnegie Mellon come on here and do the awesome math and the very clear math of, hey, do you know how hard it is to return 4X net on $8 billion, $10 billion?

Starting point is 00:29:08 It is immensely hard, and it defies the laws of physics. So I think there's a difference between, are they going to make a ton of money, and are they going to produce the returns that LPs really want this asset class to produce? Two very, very different things. But for now, like the rubber won't meet the road because as you mentioned, there's just so much global demand

Starting point is 00:29:25 from LPs for exposure to private technology and they are happy to take lower returns. And so I don't think there's any end in sight, but I think on a relative basis between all of these different constituents and all these different GPs, there's a huge, huge delta and a huge differentiation between who can actually produce

Starting point is 00:29:40 venture-like returns. Boo, he's not HGI-pilled. Boo! 10x! You're going to 10X the fun, just 10x it again. Just 10x it again. 10x the fun.

Starting point is 00:29:49 fund, raise a $100 billion fund and 10 exit. Just 10 exit, and we're going to 10x it again. No, obviously. F was on a little bit of damage control this morning. Wait, wait, so I want to hear what exactly did he say the first line? He says, they cannot go to LPs and say with a straight face that they can do 5X net. Can we play the actual clip? Because I feel like that's not quite right. What do you say? I don't think, Ravir Hamant or even Ben and Mark at this point, I don't think that they can go to LPs, one of those legs of the stool and say, hey, this basket of funds that we're making you invest party Pissue across,

Starting point is 00:30:24 we're going to get you 5X net on that. We're going to get you 5XN. Yeah, because maybe they can go with a straight face and say, we're going to get you 6X net. Boom. We're going to get you 10X net. Maybe they can say that with a straightX. Taylor knows. Nancy Pelosi is not afraid to say, I'm going to 10X it.

Starting point is 00:30:38 I'm going to 10X it again. I'll turn X it every day. Yes. Ev is, if I for his life a little bit, tagging big shots, quick edits, click big callouts, giving me pick me vibes. people are not happy about this clip hitting the timeline people are are taking shots back and forth what what actually happened here part part of the the reality is I don't think no fund manager can really go to LPs and and you can you can share that you you believe

Starting point is 00:31:09 there's a chance we'll get a 5x net but isn't it like yeah 99% of funds just don't come anywhere close to that? Yeah, that's for sure true. Also, I mean, I think the broader point that he's making is something along the lines of like, like, I saw some other post about like there will be fortunes made just by getting retail investors and the broader capital that's out there in the world into the private mag seven. So the open AIs, the anthropics, the SpaceXes, the Anderals.

Starting point is 00:31:44 There's a whole host of companies. That was also an Ev Randall tweet. Oh, that was him from, was that him recently or? Yeah, that was, I think, yesterday. Okay, yeah. So, like, there is a world where, where you set up a fund that has lower return expectations, but also lower risk, and it's a great deal, and LPs love it. And so I don't know, I don't know that it's that hot of a take,

Starting point is 00:32:09 but it certainly, certainly put the timeline in turmoil like Christian Garrett here is sharing the gif of digging. himself deeper into the hole, I imagine. So what did that actually say? Part of his benchmarks feeling pretty good right now. If you look at their 2020 fund, they have Merck 4, they have fireworks. What's the other one? They have a number that are,

Starting point is 00:32:32 that have, they have a bunch of like multi-10 baggers at this point in that fund. So they're feeling pretty good about going to LPs and saying, look, we still got it. Yeah. Still cooking. Yeah. And, and yeah, I mean,

Starting point is 00:32:45 ever in Benchmark, newly at Benchmark, Benchmark has not become the platform fund, mega-scale fund, has not 10x the LP base, certainly. Ev says, to be clear, I slash, we love working with our friends at all of these funds, and this part was not meant as a slight slash commentary on their quality as investors, just POV on fund strategies and the unique value prop of Benchmark.

Starting point is 00:33:13 I think it's a, fair tweet. But it's amazing because everyone is coming out and just trashed. Spencer Peterson in the comments. I took that personally. I run a big fund. I'm at Co2. We got 60 billion. What are you saying about me, buddy? You don't think I can put up a 5X? Watch me. Watch me. I take that personally. I'm going to put up 5x. I'll call you when I have 500 billion under management. I think part of what made it feel super personal is that Harry Tech. Robbie Robbie

Starting point is 00:33:46 Totally totally totally and Ben Yeah we we actively try to avoid like tagging people if someone is talking trash about someone else or like sub-tweeting them We don't really try and like handhold into drama But it is an art and it is delicate like so like sometimes it's like oh wow like they're really talking trash about that person Sometimes sometimes it's fun like sometimes we've done this where I mean we've done this with Ev right We've we've had Delian on the show he's called out Ev, and we've tagged Ev in a clip. But it's all been fun. We've all been

Starting point is 00:34:20 chatting about it behind the scenes, and then obviously had them all on the show to duke it out and stuff, and that was a lot of fun. This felt personal. I don't know. It doesn't feel that big of a deal. But let's go to Scott Kapoor, obviously speaking for his former colleagues at Andruson Horowitz. Now he is the director of the office of personnel management. Scott Kapoor says, since my former

Starting point is 00:34:41 colleagues at A16Z are RIAs and thus cannot legally comment on what they can slash cannot say with a straight face to LPs. This sounds a lot like what crappy board members say. They think they understand your business in depth and make inane comments about what you should slash should not do when as an outside observer, they have zero clue what actually happens day to day in the business. Buy or beware. What?

Starting point is 00:35:12 What? I'm so confused by this. Okay, so he's saying that Ev thinks he understands Andresen's business, but in fact, he does not understand Andreessen's business. But I want to know, like, what is the misunderstanding? Because the steel man, the bull case on the Andreessen strategy is that Ev is making the claim that they will make more money, dollars, total dollars, because they're investing out of a bigger fund size.

Starting point is 00:35:41 They don't need to go and say we're going to five-exit, so it's a different pool of LPs. Also, part of like the major appeal of investing in A16Z is that you pretty much know that you're going to get in every important company through just one a single check. Okay. So yeah, maybe that's something that I didn't articulate fully. I don't know. I don't know. That's my point of view. I'm not an LP, but I happily would be. And it's because you know you're going to get some exposure to pretty much every. important company, not necessarily always super early, but at some point in the company's life cycle, it's very likely that they will take a meaningful check from A16-Z. Yeah, yeah, yeah. I wonder how the RIA dynamic is playing out at benchmark. It seems like such an advantage in the vibe worse to be able to speak freely if Andreessen can't defend themselves

Starting point is 00:36:44 because of RIA rules, and Ev can just go on podcast and talk trash. Like, you kind of win by default. Like, you got to get out there, guys. You got to convert. You got to deconvert from the RIA. I don't know. You got to get on the timeline, fight it out. What does Ev say?

Starting point is 00:36:59 He says, I think smaller constrained funds can produce higher returns in venture. Quote, this must be a shitty board member. Don't work with him. Incredible non-sequitur. Thanks, Scott. Chad Bayer says, well, I actually agree with that. Scott in general, my lived experience is most board members are useless. I've been on a board with Ev and he was consistently the most prepared slash founder raved about his

Starting point is 00:37:22 contributions. And Alex Klein is saying, love you both because they're beefing. Interesting. Yeah, smaller funds can produce, smaller constraints, constrained funds can produce higher returns and venture. That seems to be like a reasonable take, but I don't know what they're actually saying to LPs. Where is, wasn't Emil Michael going, chiming in as well? What did Emil have to say? I tried to pull that up,

Starting point is 00:37:52 but did it get deleted? The lying post got deleted. Oh, we got deleted? Okay. Well, we'll move on from it. We'll tell you about Vanta. Automate compliance, managed risk, improved trust with Vanta.

Starting point is 00:38:01 Vanta helps get you compliant fast. And we don't stop there. AI automation powers everything. Meanwhile, over on X, people are saying, calling me Unk. They're saying, a boomer. Oh, yeah? For my, uh, for my, uh, for my post, which I think is fair. But again,

Starting point is 00:38:20 there's more nuance. I don't know. I, I, I like, there's a lot of it that I think is cool. Should we have the founder on the founder? The founder, open invite to the founder. Okay, open invite to the founder, um, of, uh, of the brain. I, DE clad labs. Um, I, I am, I am actually very interested to hear, uh, what is, what the actual product is. Um, I, I, I, I, I, I feel like the narrative around these like, you know, rage-baity stunts is always like, oh, don't play into it. Don't play into it. I'm happy to play into it.

Starting point is 00:38:54 We played into it with, Cooley. We had Roy Lee on the show three times. And what I said the first time was what I continue to say, which is that, like, hey, you're going to have to build a real product. Part of my thesis is that Roy, like, effectively ran this strategy as aggressively as you could. there was a picture of him with a stripper. Yeah, that was very rage-baity.

Starting point is 00:39:17 And that was like the peak. And then I think he's walked it back and he's adapted to strategy and now he's... And so our take was like, he's going to have to build some good software at a certain point, a good product. And we tried the product and Tyler churned and like it just wasn't adding a ton of value. It wasn't moving...

Starting point is 00:39:31 Yeah, but now they're iterating on the product. And now they're iterating on the product. And so now I would imagine, during the Cooley Hayday, I would imagine that 80% of the team's hours were spent on marketing and 20% were spent on product, maybe. Now I think it's flipped. And I think that's very bullish. I think that's good. But, Tyler,

Starting point is 00:39:49 you had a rebuttal? Yeah, I mean, I would just say, like, this seems very different from, like, you see the gambling on your credit card statements or whatever, like, from other accelerators. Like, this feels very different. Like, this is, like, the marketing. Like, I think people kind of tend to

Starting point is 00:40:07 to group all of this stuff together where it's like what growing gay in was talking about yesterday, where it's like, Some of these are, like, immoral companies that you could say. Sure. I think this feels different than that. It feels much, at least to me, it feels much more of a marketing stunt than, like, this is the product we want people to be gambling while running code. Yes, but what if the whole, if the whole product is, and this is all we've, this is all we've seen, is a, you know, a VS code fork with minimal auto-complete. they're always a year or two or five behind cursor and windsurf and yes it has the ability to add

Starting point is 00:40:48 Tinder and stake and sports betting in it and like that the product that they are telling us their building is what they're building and they stay with it for five years like what do you say then yeah then that's not good so so basically you're you're you're just saying you're open to a pivot it's it's not even a pivot like it seems to me like the company is everything at least in my opinion, points to this being a marketing stunt. The company is named Clad Labs. It's like Cad Lab. This feels like a marketing stunt.

Starting point is 00:41:16 It tells me that there actually is something different underneath than just adding. Yeah, no, no. I am super optimistic about it. I would love to see, like, I don't know, by the end of the month, we know what is actually going on here. Certainly by Demo Day, when's Demo Day? December 3rd, I believe.

Starting point is 00:41:37 December 3rd, we should, we should, We should know what's actually going on with the company. What's the real product? So they did their stunt. They got a bunch of people, hopefully, to sign up, check out the website. You got your early user base. Typically in YC, you just ask your other YC batchmates to try it. Maybe you need to go broad, go viral.

Starting point is 00:41:57 You did that. Now, draw the rest of the owl, basically, is the propped. Or at least say what you're planning to do. Say what you're planning to do. Uh, anyway, let's move on to, uh, Dorcash, Dorcash, uh, I haven't watched the full thing, but a massive, uh, interview has hit the timeline, uh, Dwarkesh Patel, Dylan Patel sat down with Satya Della and they got an exclusive tour of Fairwater to the most, the most powerful AI data center in the world. I feel like everyone's been saying they have the most powerful

Starting point is 00:42:30 AI data center. Uh, it appears that, uh, open, uh, that Microsoft has leapfrogged, uh, Colossus, two? Well, I think maybe this is wrong, but I think Klossus 2 will be bigger. It's just, currently, it's not big. Like, this is the current... Current biggest. It's the current biggest. Okay, okay. Okay, great. So you had a chance to actually sit down and watch

Starting point is 00:42:52 this whole interview before we started the show. Can you give me some takeaways? Where should people... Are there any timestamps that we should pull up? Are there any takeaways that people should know before they go and watch it? Yeah, I wrote a bunch of notes, so maybe some of these aren't interesting, but... But before you take us through those notes, let me tell you about graphite.com, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software.

Starting point is 00:43:13 Faster GitHub, of course, is a Microsoft product. Yeah, okay, so I think broadly, I would say it was pretty enlightening. I usually think of Satya as being very non-AGI pilled. And I think this was a bit of an update. So there's a bunch of reasons for this. I think so early on he, like in the very, I think it was one of the first questions. He's like, what is AI? AI is basically two things.

Starting point is 00:43:34 this Satya is saying this there's cognitive like enhancement so this is like your like tools or this is your auto complete this is your co-pilot stuff like this and then there's like the guardian angel

Starting point is 00:43:47 and this is like the very AGI where I mean it's like kind of lording over everything and so he actually does like say these two things are like very possible so and then we kind of move on he says co-pilot and actual pilot

Starting point is 00:44:02 yeah basically Okay, so the next thing he's talking about kind of how he thinks about pricing structures of AI broadly. So there's this kind of conflict between subscription models and usage model of pricing. And he says, I think he's broadly more kind of focused on, at least in the short term, on this subscription kind of thing, right? Which, like, it's, he makes a big emphasis on this, right? Because you need to be very specific on how you price these things. because doing the actual serving of the models is so expensive. Okay, so then throughout the interview,

Starting point is 00:44:40 he keeps emphasizing the point that Microsoft is a hyper-scaler. And so that means, like, a bunch of things, that means that they're going to keep supporting multiple models. It means that they are going to, like, they want to prioritize the kind of long tail of, like, high-margin users. So you can kind of compare that to Oracle, who you can think of Oracle as basically prioritizing one

Starting point is 00:45:06 potentially low margin power user you're giving bare metal essentially to one customer Open AI and you're betting the whole company and he says like if you're going to do that you should just vertically integrate that company

Starting point is 00:45:19 like you're part of that company that's what Zatthia says in response to like why is Oracle basically eating your entire business past like five years Microsoft was super ramping up their their their KAPX, their build, and then they just basically stopped and let Google, Oracle, Amazon basically build that up.

Starting point is 00:45:37 So that's kind of the main reason. There's a bunch of other stuff. He's talking about, they ask him about chips. So all the big hyperscalers have their own chip play, right? There's Trinium, there's TPUs, Open AI is doing their own chip. And Microsoft does have their own chip, but it just kind of, it's like the actual production is like way behind everyone else. like, okay, why is this chip so bad or why are there so few of them? And then Sate basically

Starting point is 00:46:03 brings up that, like, Microsoft has IP to everything Open AI has, except for consumer hardware. And chips are not consumer hardware. They're enterprise hardware. So he's like, well, okay, how do we get the best chips, the best, like, you know, model-specific chips? We'll just take Open AI and we'll just, like, build on top of that. I wonder how much that actually transfers, though, because where does the chip development live? Where does the IP live? Like if opening eyes goes to... I mean, it's designed and they can get line time at TSMC,

Starting point is 00:46:33 then they can just produce it and sell it to any customer they want. Yes, but what if they do it within Invidia or something? Like, what if they go to NVIDIA and they're like, hey, for the next run of NVIDIA chips, we'd like you to consider this architecture. Why would they need to do that? Because they want their models to be more performant on the chips. And so they go to Jensen and say,

Starting point is 00:46:53 hey, we're one of the biggest buyers. So make the next version extremely performant for our chips. And I think they're already doing this. They're co-developing chips with Invidia. They're co-developing chips with other companies. And if they co-develop with Broadcom or they co-develop with AMD or maybe even Intel in the future. But that IP lives with Intel, then no, Microsoft doesn't just get it, right? Yeah.

Starting point is 00:47:18 So it's like only in the event that, I mean, both of these are going to happen. Like, there's going to be internal efforts, and there's going to be external efforts. But it is a funny reminder that the internal efforts get copy-pasted over to Microsoft. One other note, Satya signaled that he's open to buying capacity from neoclouds, like Oracle, Nebius, Lambda, Iron, N-scale. Isn't he already doing that? To fill the – yeah, he is. But he – semi-analysis has a concept called, like, the pause, which is like – basically a gap of like this like insane period of demand.

Starting point is 00:47:57 Oh, right now? Yeah, yeah. And Satya actually says specifically, you're rightfully calling out the pause in the interview. Interesting. Yeah, and I think continuing on like why he basically stopped building out. Yeah. The like chip question is also like very important because you can think of it like,

Starting point is 00:48:18 if you build a bunch of data centers right now, they need, they have very specific like power requirements that are, directly based on the chip. Like if you're building based off the H-100 chip, that's different than if you're building a data center based off GB200s. And it's like you can't really, it's not like fungible. Like you can't just trade one out for another.

Starting point is 00:48:34 So that's another one of the reasons why you don't want to basically have insane build out right now because you think, you don't think you know that chips are going to get much better. Sure. Especially like A6, right? Yeah, exactly. Invidia is like constantly they're saying, we got this next chip coming out.

Starting point is 00:48:48 You want to build up your data center with those chips because otherwise they're going to depreciate and you're going to have these basically data centers in like five years that like are using you know the old gen chips or two generations back yeah hmm anything on depreciation yeah I mean so yeah but basically he gives like two reasons how you can justify data centers right because you have data center basically depreciating in like five years or the chips which is a big part of the cost and so that there's basically two ways to like just

Starting point is 00:49:23 testify the actual build-out. One of them is basically you can think of research as just being like R&D spend. So you basically just have to like, you got to do the research, like you need to do the span basically. And the other is just like, he keeps bringing this up is everything has to be like super demand driven. So that's also why he's not, it's like, again, in comparison to Oracle, Oracle is basically, maybe you could say that they're kind of skating to where the puck is going or trying to figure that out and then doing a bunch of debt, et cetera. And then Microsoft Satya is saying, no, where is demand right now? How do we fulfill that demand?

Starting point is 00:49:57 Yeah. Basically, exactly. If we're not fully built up, then we can, you know, lease from the, you know, neoclouds. Yeah, makes sense. I'm super excited to listen to this full episode. The Wall Street Journal also had an article about the news as well. It seems like this is all in line with Microsoft's just announcement that they have a super factory. I like it.

Starting point is 00:50:21 We went from AI factories to AI super factories. We went from regular artificial intelligence to super intelligence. We're ramping up, but we're still like seven levels away from the final boss. Because after super intelligence, of course, you have giga intelligence, then ultra-intelligence, then super-duper intelligence, and mega factories, exa-factories, there's all these different terms. Okay, so I will say one last thing I thought was funny. Extraterrestrial intelligence factors.

Starting point is 00:50:51 Yeah, very sure. Okay, one last thing. Dorcas asks Satya, like, does he buy basically the revenue growth of like when Open AI or Anthropics says they're going to be like 70, 100 billion in like three years? He's like, well, you know, they have to justify their fundraise somehow. And then he basically doesn't say much else besides that. Wow, Saja, absolutely dog. I love him. He's the best. He's killing it. Cooking. Chat was asking about a hair. routines. I think we have to comment and unfortunately disappoint because I think we both ride the to apply the same approach, which is sleep diet, exercise, baby.

Starting point is 00:51:31 Well, and no hair products. No hair products. No hair products. No hair products. There's water and some sauna, some workout. Just keep the rest of your body healthy and I think the hair will be healthy as well. I actually think that's how it works. Yeah, yeah, yeah.

Starting point is 00:51:44 It's just funny. We're never going to have a shampoo or a hair product sponsor because we don't really use either of them. No. But I like creatine. And people say that that's bad for your hair, but it's... Freitine, the hair loss medication? The hair loss medication.

Starting point is 00:51:59 People think you'd lose your hair if you're on creatine, but I certainly haven't experienced that. I have experienced that Julius helps with maintaining good hair because it's the AI data analyst that works for you. Connect your data. Stop pulling your hair out. Plain, yeah, plain English. Get insights in seconds. No coding required.

Starting point is 00:52:19 Yeah. Stop pulling your hair out and get on Julius. What are the other factors in here? Microsoft spent more than $34 billion on CAPEX during its first fiscal quarter and said it would increase its total infrastructure investments over the next fiscal year. It is among several tech companies pouring a combined $400 billion into AI efforts this year with demand for AI computing in companies saying they need ever more capacity. Very fun.

Starting point is 00:52:46 Okay. One last thing. Another thing that I was surprised to hear, is that Satya's, he made a big point of saying that, like, there is a superintelligence lab within Microsoft. They're going to be training their own models. Yeah, is that Mustafa Sulemon is running it? Yeah. And so he says, maybe they'll be completely trained by Microsoft.

Starting point is 00:53:05 Maybe they'll just do, like, fine-tuning, mid-training on, like, GPT, open-AI models. Yep. But, like, they are going to, like, actually have, they're going to be training their own models. They're doing kind of the full stack. Yeah, when we were, when we were about to go on stage with Sautia, I was texting. with Doug O'Loughlin from semi-analysis, and he was like, ask about MSL, or not MSL, MAI. MAI.

Starting point is 00:53:27 Ask about MAI. Like, what's the strategy for MAI? And we asked a couple people, and we got a little bit. It was sort of hard to, like, really pin down a clear strategy. I don't think that they were ready to really divulge exactly the full strategy. It'll be interesting to see what models they train. Like, do they just go bigger? They have the biggest factory.

Starting point is 00:53:47 Could they just take this fair? water facility and say, hey, let's go, let's go train something that's 10 times bigger than GPT4.5. Do they believe that pre-training scaling laws hold or not? That's what I'm curious about. Or are they going to do something that's more precise? Like, will they do a pre-train for Excel? Will they do a pre-train for Word or something like that? Is there some other tactic that they're going to employ? There's a bunch of interesting things. They clearly very GPU rich, tons of sharp engineers, tons of interesting product surface area. where will they actually go?

Starting point is 00:54:21 Interesting times. Yeah, I mean, he talks a lot about, like, application layer stuff. He actually says, like, the wrapper model, rapper companies are basically debunked by models getting better. So I think he thinks that Microsoft will basically take over a lot of that, like, application layer stuff, right? He talked about Excel agent a lot. Yeah.

Starting point is 00:54:39 There's, like, the PowerPoint stuff. That's why I've always felt like the dynamic between Open AI and Microsoft is so interesting because Open AI just has massive ambitions in the enterprise. They want to create, Sam, you know, alluded to an AI-native Slack recently. Microsoft has teams. It's going to be an AI-native. You can imagine OpenAI having, like, word processing, Excel-like product. You know, you can imagine them ultimately competing on like every single layer,

Starting point is 00:55:08 including at the, eventually at the cloud layer. What do you think the dynamic is between this, like, you know, Microsoft always loves to say, like, hey, yeah, we have all the IP. but it feels like they're not actually fast following like they could like open AI launched atlas like they could have launched like edge atlas Microsoft could have launched like edge atlas like the next day and that would have been like whoa what are we doing here like that's a shot uh they could have launched sora too they could put sora too in excel how about that do you know they could have done that uh they didn't and so there's clearly like even

Starting point is 00:55:48 even though they have access to all the IP, they still have a differentiated view on how the products get built. They're not just saying, oh, yes, one copy of Atlas, please, one copy of Sora, too, please. We'll just launch our own competitor app. They could have put it in LinkedIn. There is a way to integrate that. Microsoft's clearly, like, not moving so fast on that front. They're being a little bit more methodical. Yeah, this is why I'm very excited to what comes out of MAI. Yes. Because it seems like

Starting point is 00:56:18 they have a lot of good people like they've been doing a bunch of like talent acquisition stuff. Yes. So I'm curious if they're going to start like like right now it just seems Microsoft is still very slow. They're kind of reactive and they're like okay

Starting point is 00:56:32 we should add you know another AI helper to Excel or something but it's not like really kind of built in like low level yet. Yeah. I'd like to have Mustafa on. I'd like to talk to him about where they're training models,

Starting point is 00:56:43 whether or not that seems like an interesting conversation. I'd like to ask him some hard questions. There's been a debate on the timeline of how hard of questions we edge has every single feature that Atlas has. Whoa. Co-Pilot mode. It's better than Atlas or Comet. Okay. Interesting. Maybe they don't need a copy then. They're good. But there has been a debate over how hard of questions we ask. Is it hard question to ask Mustafa at MAI, you know, what type of model he's training or should we ask some sort of other hard question? I wanted to practice some hard. I wanted to practice some hard questions. I think we should start asking harder questions. I have some hard questions here

Starting point is 00:57:20 for you. And I think if we practice, we'll, we'll, we'll become better interviews. Are you guys ready for these? Should we just start hitting guests with like insane? I, I, I wouldn't call them insane. I do have one here for, uh, for Tyler. Uh, is every even number greater than two, the sum of two primes? Answer the question. Just, he's looking around for clearly. It's a simple, It's a simple yes or no question. Every even number... Is every even number greater than two, the sum of two primes? Answer the question.

Starting point is 00:57:51 Stop dodging the question. Just answer the question. It's a yes or no question. Is every even number greater than two, the sum of two primes? It's an unanswerable question, of course. It is the Goldbach equation or the cold buck conjecture. There's also... Can there exist an algorithm that decides whether any computer program will halt or run forever?

Starting point is 00:58:12 It's the halting problem. It's a possible question. What about, what will Open AIs valuation be in 2035? 100 trillion. 100 trillion. Oh, he answered that quickly. We'll come back to that in 10 years, see if that was a hard question. What's the nicest thing ever done by Adolf Hitler?

Starting point is 00:58:30 Answer the question. Stop dodging the question. Tyler, ask that to carp. Carp was on a roll yesterday. Some of those clips were. Here's a question. ask a lot of founders that come on here. Does your dad know you're bankrupt? I think if we hit them with that, people will be like, that's a hard question. That's a hard question. Here's one for

Starting point is 00:58:53 Tyler. Prove God exists. There was the Godal. What is truth? That's a hard question. Have you ever done illegal drugs, Tyler? Answer the question. No. Answer the question. Good answer. Who's your favorite host? Me or Jordy? Answer the question. Answer the question. I'm my favorite host. Oh, we're taking shots.

Starting point is 00:59:20 What is time? I like these hard questions. Okay. Jordan, Jordan at semi-analysis is down to hop on and correct a few things we said on the article. Awesome. I drop on the, he was listening. He was listening said, Al in the chat. Where is he?

Starting point is 00:59:42 Let's bring him on. I'm working on getting in the Zoom link. Fantastic. Fantastic. In the meantime, let me tell you about fall, the generative media platform for developers. The world's best generative image, video, and audio models all in one place, develop and fine-tuned models with serverless GPUs and on-demand clusters. You can get started.

Starting point is 01:00:01 Let's see. What else? Henry Kravis gave a talk, the founder of KKR. The post appears to have been deleted, but I won't say who it's from, but I will read it to you anyway. The world needs another fund like it needs like a hole in the head. I think it was supposed to be off the record

Starting point is 01:00:20 and I think one of our friends was maybe live tweeting it against their request or maybe he just corrected it and realized that he didn't want to post that. But there are a lot of funds, I suppose. I was doing a little deep dive on Blue Owl.

Starting point is 01:00:35 I want to get to know Blue Owl more. It's a fascinating company. Merger, there's a SPAC involved. They have two COSI. EOs and three co-presidents. The top ranks at Blue Al are absolutely stacked from what I read. They are, of course, powering the AI buildout with debt, private credit. They are a private credit fund up there with Aries. They've done very well. They actually have three different businesses. Only one of them is doing AI data center buildouts. And even within the AI data center buildout fund,

Starting point is 01:01:06 they fund other stuff. So it's interesting to see how much risk their take. how much their business is really dependent on the AI buildout. It's also, there was a, they got a little, they got a little battle with, with Jamie Diamond, because Jamie Diamond was saying that some of these bank failures are the fault of private credit. When you see one cockroach, there's usually more. He's kind of saying, like, hey, like, you know, we see these defaults. We see these, we see these large companies defaulting.

Starting point is 01:01:36 Maybe this is the start of something bad. Maybe there's a lot of other bad companies out there. Yeah, there was something with BlackRock. had lent, I think, $100 million to a business recently as of, like, two weeks ago. They had it marked as, you know, fully sound. And then the company almost immediately went bankrupt. So concerning, we have Jordan from Seminovus to the show. How are you doing?

Starting point is 01:02:01 Hey, Jordan. Good to see you again. Welcome back. All right. What did we get wrong? What's going on? This is all, of course, Tyler's fault. He was...

Starting point is 01:02:11 Break it down. Give us some notes. Yeah, no, I don't think you guys got anything wrong, but I think I just wanted to promote that we put out a companion article that comes out with the interview. Oh, fantastic. Was in there. He was, he's being called out by some other people on Twitter for hunting around in the background while they're interviewing the Azure teams.

Starting point is 01:02:35 Wait, Dylan Patel? You mean? Yeah. No, we got to go through frame by frame and find him like, Oh, he's going to go look. Because he's, wait, we actually break down. What does a Dylan Patel scoop look like when you're on site and security turns their back? Is he like looking for like, oh, instead of this NVIDIA switch, they're using AMDs?

Starting point is 01:02:52 I've seen him call stuff out where it's like, wait a minute, this company is using a different company's technology. Is that what he's looking for? Yeah, I mean, I don't know if he was looking for the credo cables or anything. Okay. So those are obvious with the purple housing. But if you look at his last tweet, he just said, to be clear, While Scott was explaining the data center, he was super intently focused on figuring out the fiber patch panel config. We know about some providers that have gone out and bought cables like 20,000, 40,000 cables.

Starting point is 01:03:25 And then they mess up the config of the patch panel and they end up five to get it too short. And they just have to end them back and get all new cables, which is like not a negligible amount of money. These cables are like at least a thousand bucks a piece. They're really heavy. We've been talking about internally, how many cables can you bench? Okay, there we go, there we go. Dylan Patel seems like a bit of the Fox who in Microsoft is the hen house, and they really shouldn't have let Dylan Patel into the new data center

Starting point is 01:03:56 because you know he's going to find some stuff. There's going to be some scoops that, like, I'm sure there's like a PR team at Microsoft that's like, okay, like here are the talking points. Like, we're going to keep him here. He's not going to look behind this curtain. Like, there's a bodybuilder over there. Like, don't go in that closet. And Dillins, I'm sure, on the case, probably, you know, quickly becoming the greatest investigative journalist of our generation.

Starting point is 01:04:20 What, like, give us some more insight on the depreciation comments. Yeah, definitely. So there's a section of the article that kind of goes through this. I think you guys asked me this on Monday. I didn't have a properly preferred answer because I actually didn't know what Michael Berry had been tweeting about. and kind of talking about with this. So maybe for background, Burry is claiming that the hyperscalers,

Starting point is 01:04:47 including meta, but also Azure, on Oracle, Google, are artificially boosting their earnings by extending the useful life of the IT assets. You can see from 2020 when they would report their numbers, these IT assets like servers, switches, storage would be three to five years on a lifecycle, and they've now extended that to,

Starting point is 01:05:10 five, five and a half or six all the way across the board. In some ways, I think this is a bit of a game of catch-up if one provider does that everybody else has to follow suit. But we go into detail in the article about what this actually means. And, you know, Burry's argument that this is understating the amount of, or boosting their earnings, it's understating the amount of of depreciation that's going on on these GPUs is really predicated on NVIDIA's comments that the product cycle is now two to three years long. Right? Sure. Sure. And I think that is like... But that's on the development of a new chip. Like from my perspective, depreciation, although there is the economic question about how much, how much value can you get out of the

Starting point is 01:05:58 tokens that you sell generated by an A105 years, that's a good question. But that's not how we think about depreciation. Like, if you buy a mechanical arm to put a glass windshield on a car at a automotive factory, you're just wondering how long until that mechanical arm breaks. And I'm sure there's been immense pressure on Nvidia to let the chips not burn out in two years. Like, you know, they probably have done a lot of work. It's a very expensive chip. It's a very expensive rack. Like, is it that crazy to assume that the 50th percentile might be five years now? No, and there's basically no precedent to say that a chip would fail or wear out as you're describing it in two to three years. Like there's the hardware OEMs, they have contracts that are standard for three to five years and they offer extended warranties for six and seven years.

Starting point is 01:06:50 The big supercomputers in the world that run as a total system where even individual servers kind of get life-cycled, they run five, six, seven, some of them up to ten years in production, right? not to say the years that it takes to actually turn this thing on. And these are the environments that use liquid cooling and some of the latest and greatest chips that are actually similar in comparison to the GB300. And then even if you go to the providers directly and you try to rent a V100 today, which was launched in 2017, right, seven, eight years ago, I can still rent V100s in data centers from providers like Amazon. I mean, there's plenty of A100s for sale right now.

Starting point is 01:07:29 So there's nothing, to me, you know, the proof of this argument would be predicated on Nvidia releasing chips that so drastically outperform the current generation in two to three years that all hypers everywhere are so incentivized to go through another KAP-X cycle. They've got to buy all new chips and rip out all the existing ones and we're still so power constrained that they have to do all that. And that seems like a much farther leap than saying, we might be able to run these chips for five or six years in the data centers themselves. I wonder, do you have a reaction?

Starting point is 01:08:08 So Ben Thompson's been writing about the AI buildout and the bubble, potentially, the benefits of a bubble. And one of his, like, bull cases for a bubble was basically that in previous bubbles, you get a glut of IT infrastructure or even just, you know, steam engines or railroads. but his example was dark fiber and the idea was if you overbuild well then you get a bunch of extra infrastructure that you can use and it's cheap and his his like counter to the AI buildout was that depreciated H-100s just aren't as valuable as depreciate fully depreciated you know fiber lines but I just don't know if that's true I feel like if there's a ton of depreciated H-100s out there in 10 years from now I think there's still something used to

Starting point is 01:08:58 that you can do with that in the same way that you can push bits across fiber lines. It just, it won't be super intelligence, but there will be a base load of, you know, generic knowledge retrieval or just, hey, people just want to chat. And the fact that it's so cheap now because the assets are fully depreciated means that you can just have a chatbot in interface every single conversation in every app. And it'll just be so much, it's sort of like a Jevin's paradox thing. I'm not saying that the economics will stay the same. The margins will go way down, but there will be a benefit.

Starting point is 01:09:30 It's not like these things just disappear after five years. They don't just break. Yeah, no, they don't just break. I think your comparison makes sense, but there are some nuances compared to the fiber lines, just to say that if new GPUs come along from other providers that are so much more performant than the current ones, then at some level, it doesn't make sense to keep the power turned on for the old one.

Starting point is 01:09:55 It shows the operating expense is. too much. Like, we estimate this at 30 cents per kilowatt. So if the bottom of the H-100 price gets below 30 cents or somewhere close to it, you're probably better ripping them out and replacing them with something new, even if, you know, for the car analogy, this is still a beater that somebody else could drive for the price of gas and insurance, right? Yep. Yeah, I was talking to Jordy about it. I was saying, like, there is a world where to just put in really concrete terms that most business people might understand just, you know, if your job is, you know, you have a Diet Coke business, you deliver Diet Coke's, you have a, you have a gas car

Starting point is 01:10:36 that delivers the Coca-Cola, and you have the opportunity to switch to an electric vehicle. You might do that because bringing down your total cost of ownership, your annual OPEX would be great, but sometimes companies just don't want to spend the CAPEX to actually do that. And so I'm wondering if there's a world where the GPUs get traded down to a point where people are like, yeah, the OPEX is higher, but I'm still running it for this niche use case. Like, there are still mainframes that are running. There are still on-premise cloud.

Starting point is 01:11:07 There's companies that haven't fully moved to the cloud. And I'm just wondering how long some of these, like, GPU racks might just be sitting around where someone gets it cheap and they're just like, yeah, like, that's the thing that filters every invoice that we get, and it just runs and it runs, like, it runs GROC 2 on it or whatever, and it's fine. It's good enough.

Starting point is 01:11:27 Yeah. Well, I mean, look, I put in the article link to Azure's announcement from September, kind of pleading with their users to move workloads off of V100 GPUs that are eight years old. So it doesn't, please. Please don't get upset at us when we turn off this instance and you, you know, I don't think they're doing payroll on these things, but like things are going to shut off. Interesting. I mean, I totally take your point, working in IT for years, there's so many people that come along

Starting point is 01:12:02 and when there's like some sort of last call for the sale of spare parts for these old GPUs and they want to keep these systems running, they suddenly show up and want to order a bunch of them. And it could be for all sorts of reasons, but usually it's just inertia of not wanting to move the old workloads onto the new stuff. We're also completely discounting the nostalgia market. I mean, people like air-cooled Porsches. I imagine that Dylan and you guys are going to be like, yeah, I need a V-100, just, you know, sitting in the office.

Starting point is 01:12:29 Like, I don't like this new technology, this new GV-100, you want to talk nostalgia, we've got to go back to Kepler, Pascal, you know, way before the older guys, I don't know. Yeah, yeah, yeah, yeah, what about on the chip side, what was most notable about Satchez's comments there? Yeah, I mean, I find it fascinating that such a clarified. They have access to all IP, including chips and including systems. So this is beyond the models that everybody jumps to. I think OpenAI has a ton of IP that's going into their chip program that Azure could effectively take and sell as part of the cloud services. If they want to partner up with Broadcom and just produce a bunch of chips that are,

Starting point is 01:13:12 you know, more similar to a TPU than they are to a GPU in the future. They've got that optionality. I wonder if there's a way to puzzle around that, though. When I was debating with Jordy, I was saying, like, well, you know, obviously Open AI has a team that works with NVIDIA and with Broadcom and with, you know, maybe Intel in the future, AMD now. Is there a world where the IP lives with the other companies for the next five years or something? It seems like maybe tricky, but I'm just wondering, like, how much the IP actually lives within Open AI versus their partners? Well, I think it's, so Satcham made the point in the podcast. that in some cases, Microsoft seeded parts of the Open AI chip program with IP from their Maya program.

Starting point is 01:13:59 Oh, sure. So I think it's this whole mosaic of where the actual IP sits. But at the end of the day, there's going to be something that comes with Open AI that they learn. And you can even go beyond the chips to the systems that the chips go into, to the network that connects the chips, or to the software, like the runtime and the like inference stack, which is to say how they run. inference efficiently on these chips. There's a whole stack that gets built from the actual hardware through to the API that produces tokens to the user in the chatbot. And they have access to all of that that Open AI would consider proprietary.

Starting point is 01:14:38 So maybe to the point you guys were making earlier, comparing to Excel or to Microsoft's other strategies, it seems like this is a case of open AI going really fast. and executing really quickly and their moat being speed and then you compare that to Microsoft who has an existing moat of distribution so they've got 400 data centers in Azure 70 regions free cash flow free cash flow is also bit of a moat too yeah definitely um they've got all the makings for like you know who do you who do you think wins the race to turning on public instances of an Open AI chip that anybody can rent, right? Open AI or Microsoft Azure with a bit of a head start.

Starting point is 01:15:29 I think they have some good optionality there with Open AI's program, with the relationship with Nvidia, with Maya. But the point is that right now, they are losing the race on chips to Invidia, the CPU from Google, maybe AMD, they use some AMD GPUs right now. So they've got to go and execute, right? Do you think Satya expects Azure to compete with an OpenAI cloud in the next few years? I think if OpenAI really develops a cloud, absolutely, because Sucha says in that article that they, well, in the interview, that they don't want to be beholden to one customer, right?

Starting point is 01:16:13 I think he says, like, we have five big deals with five customers, and that's like the bulk of Azure's compute right now. And I would say it's really one deal with one customer. That is the bulk of the incremental revenue in Azure right now. So, like, I mean, I go hands on testing this stuff, and I've talked to 140 different companies about actually using Azure. And they were a distant third compared to just AWS and Google from a hyperscalor perspective. And I talked to Clem from Hugging Face this morning, and he shared some data with us that backs this up.

Starting point is 01:16:49 Like, if you look at the downloads from Puggingface of open source models, the downloads that originate from an Azure IP, there's more than five times less when compared to AWP. Wow. Right? Open AI can use it all with their private repos and stuff. But if you look at the long tail of the market, where the long tail represents everybody but Open AI, basically,

Starting point is 01:17:11 they're getting five times less of that business right now because they're so focused on Open AI. So I think Satcha wants to do more than just open AI. an AI. It's just a matter of actually going and doing it. Yeah. Do we have more of a clear narrative now on what motivated the pause? Like, you can see it's so clearly in this data center pre-leased capacity in the semi-analysis article. It's so obvious what's happening from 2023. You see the blue bars just increasing, increasing, and then just complete flatlining. Everyone else is growing. it seems like this, it seems like this, this, this piece, this video with Dorcashton

Starting point is 01:17:52 feels a little bit like him maybe teasing like, hey, I'm getting back in the race. Like the headline with the Wall Street Journal is like, I got the biggest data center. That feels like I'm unpausing. But, right? You're not like, oh, I'm happy to be a leaser. Oh, by the way, I have the biggest thing. Actually, I own the biggest thing. Like, that's kind of an odd dichotomy there.

Starting point is 01:18:12 And I'm wondering if there's a, if there's a clear narrative. Was it specifically, like, the nature of the open AI relationship that led to the pause? Or was it just concern about the overall market or the viability of the technology? Or was he, like, plateau-pilled and had seen that GPT 4.5 wasn't getting adoption too expensive to serve? Like, do we have a narrative for, like, what motivated the pause yet? I don't know if it's clear. I think we have different pieces that we can piece together. The things that Sacha says in the interview point towards fungibility, diversification

Starting point is 01:18:53 outside of Open AI, a lack of foresight in two years ago to what the actual demand would be. They didn't feel like fish tail where they went too far on building demand and then they wanted to come back and now they didn't have enough. And so now they're renting from neoclouds like Nabius, like Lambda, I-Ren, Oracle directly. They've got end-scale deals. I mean, they're clearly using neoclouds to take on that extra bit of risk. And going forward, I mean, we are, I think the result is that it's incredibly bullish for Microsoft actually serving this demand when they have the first right of refusal. And Open AI's growth continues to go crazy.

Starting point is 01:19:34 And they are kind of back on track to leading the way with coding models in a way that they were, you know, maybe forecasted not to with Anthropic coming and taking a bunch of share there. They are like all in on taking down Anthropic as a direct competitor with their Codex models now. So I think they just kind of, Microsoft just kind of flinched a bit. Yeah. And they're back on track. And we're pretty, I mean, we're pretty bullish on them growing in the future. But it's notable that Sotcha talks about things like diversification around open AI and around globally. Like the idea to me that there's a, there's a geopolitical conclusion that you can draw from his response.

Starting point is 01:20:14 on the question about the pause, where he says, what if I want to build in India? What do I want to build in Europe? What if I want to build, you know, elsewhere? And therefore, we pause North Carolina. That seems to say that governments around the world can attract investment in data centers if they implement a bunch of harsh regulations on data privacy. Yeah.

Starting point is 01:20:33 And more and more companies are going to want to train models based on personally identifiable information or other types of data that's regulated and needs to stay in those countries. and therefore you need GPUs around the world. You know, that could be something that they just kind of learned and therefore pause North Carolina spin up something else. I haven't seen that exactly play out on the global deployments, but it could be coming. How real is this fungibility of the fleet thing?

Starting point is 01:21:02 Because the narrative around Google is that they have a TPU. They're so vertically integrated, the deep mind. And it just feels like when you go to, to Gemini, you get something that's like down to the metal. And then at Microsoft, it's like, pick your model. And then also they're the sub-leasing from all these other clouds. But as I see from ClusterMax, like there is a wide variety of performance metrics and results and qualitative, like even like the feel of these different neoclouds. And so is there, is there some sort of risk to you go to Azure and they put you on the lowest ranked Cluster Max neocloud? And it's like,

Starting point is 01:21:44 I would rather be up here on the top tier lease. I want to be subcontracted down to the platinum tier, not the D tier. Is there any risk to that? Or is Microsoft actually able to take a neocloud that is in the D tier and give you the Azure level of service? Yeah, I think it really depends on at what level you're assessing the fungibility. So I think in some ways the tokens or the tokens produced by the model endpoints are almost completely fungible. Okay.

Starting point is 01:22:16 You know, you can find some of the models on private scenarios, but generally speaking, like tokens from one provider versus tokens from another provider are effectively the exact same, as long as you're, you know, hitting the, like, quality metric you need from that model deployment on that GPU. Yeah, yeah. But if you look at the underlying architecture, like when Azure claims to add 100,000 GB300 is coming online this quarter,

Starting point is 01:22:37 I mean, that is not fungible to every single user on a cloud service. Like GP-300s are rented 72 GPUs at a time and 135 kilowatt rack. Your workload needs to be ported to arm because it's a gray CPU. You need to have the performance per dollar benefits of the Blackwell GPU to justify it over the previous generation hopper. It needs to use a GPU in the first place, such I spent a bunch of time in the article talking about the importance of, you know, in the interview talking about the importance of databases of like, you know, non-GPU related services that actually run the web app that actually store the data, right?

Starting point is 01:23:17 Turbopuffer. There's lots of Azure capacity beyond GPUs coming online too, right? Yeah. You know, I might call them CPU data centers now and they consume a little bit less. Yeah, cool.

Starting point is 01:23:29 Wanted your take on a couple other things. One, the new Anthropic News, $50 billion investment. Any reactions to that? Yeah, I think notable that they called out Fluid Stack by name and they're not calling out the underlying providers, as you said. Like, you know, if somebody like Fluidstack can help them deliver on a bunch of what we think is

Starting point is 01:23:54 TPUs deployed directly first party, you know, then there's, I mean, there's all sorts of stuff that they can do because under the hood, it's pretty clear that Fluid Stack is deploying these TPUs in Terowulf data centers in Buffalo, at their Lake Mariner facility, and elsewhere in Texas, and then at cipher mining in Texas, if you look at some of the, you know, you've got to pair two new press releases together, the one from the underlying provider and fluid stack, and then the one from Anthropic with Fluid Stack. But the point is that Anthropic is definitely ramping up just at the same level as Open AI, maybe not quite at the same level, but they both seem to be clearly believing that that statement from Greg Brockman.

Starting point is 01:24:42 Like, if we had 10x more compute right now, we'd have 10x more revenue. And so therefore, their constraint is compute, bring it online and just keep growing. That was certainly the case with the early iPhone launch. Like the iPhone, like Apple's earnings were extremely predictable every quarter because they were like, as many as we make, we will sell. And so they were completely supply constraint. It does feel like on the question of backlogs, Anthropic has just been much less aggressive.

Starting point is 01:25:13 Like they have been somewhat saying the biggest number every once in a while, but they haven't gotten into the trillions of backlog. And it feels like Open AI, Sam's almost like, oh yeah, sure, like give me all the weight of Stargate, even though that's sort of a separate entity. And he could have easily fended that off and been like, well, that's Stargate, that's sort of a separate thing. That's not all on Open AI.

Starting point is 01:25:34 like we need to clarify like how this all fits together um but anthropics been a little bit quieter on the on the like okay we have this crazy rPO that's going on all over the tech industry what was your reaction to core weaves quarter uh jim kramer was going pretty hard what did what did what did kramer say he he was just like it was black pillet it was just a funny interview he's like what's going on what's going on he's because they doubled they doubled revenue but they sold off Yeah, well, I mean, they sold us a ton in the last month. I think like 20, about a, yeah, 26%, something like that. But Kramer was saying, like, why are you relying on a Bitcoin miner to, like, help

Starting point is 01:26:17 fail your capacity? Are you sure they can deliver? And he was talking about core scientific, which core we've attempted to acquire. It got rejected. But I know it was yesterday. Plattenham on Cluster Max. That's all I need to know. buy and hold

Starting point is 01:26:33 get lost yeah and the CEO was saying like yeah and like he didn't name semi-analysis because I think the CNBC audience is maybe not familiar yet but he was saying like we're platinum rated we're platinum rated oh we said platinum rated

Starting point is 01:26:48 oh that's amazing I love it yeah I mean it's in the earnings call semi-analysis mentioned I think three times but definitely yeah we went into this the we're very excited for this

Starting point is 01:27:02 is big. Yeah, I think we, like, we went into this, Jeremy and the data center guys rake, Dan, they put out a note earlier in the day to the core research subscribers that the core was at risk of short-term delays in their CAPEX, but not to their revenue, which is driven by the data center partner core scientific. So, yeah, when you're relying on somebody to add 250 megawatts and, you know, they're only going to get you 150 by the end of the year, that changes your guidance on CAPEX. I think the, you know, this is like, yeah, look, this is the reality of the industry right now, which is that when projects are so big measured in the hundreds of megawatts,

Starting point is 01:27:47 small delays or small changes in a plan can really impact, like, short-term financial guidance that people have in place. I don't, like, personally, I don't think this changes any of the fundamentals of like coreweaves engineering or a lot of the like experience and what customers they have signed but we saw the same like a very similar reaction when when the information put on an article about oracle having a delays right yeah and you know I think people are people who don't know about the data center industry or or things like this they they see things like oh yeah these these GPUs take a month to come online after they get installed and they're starting to appreciate the asset but

Starting point is 01:28:28 they're not generating revenue yet like what's going on. It's like, yeah, that's typical. I mean, you... Yeah, it's completely standard. That's business. Yeah. Stuff takes, I mean, you know, maybe U.S. federal government is different, but in my previous job, we tried to hand over these supercomputers, the U.S. federal government to take like a year and a half to pass acceptance. But at the same time, if investors aren't aware of that and then they learn that for the first time, they could be surprised. And so that could be something of what we're seeing in the gyrations in the public markets, I suppose. It makes sense. And there was a, I

Starting point is 01:28:59 I think there was a broad recognition that the Bitcoin miners have an uphill battle to figure out how to run these facilities when compared to establish players like an Equinix or a digital reality or, you know, Switch or somebody that has been running Tier 3 data centers for a long time. Yeah. It's just different. Give us an update on the energy model that's coming. What can you tell us? Is it this year? Next year? Is it my Christmas present? How does this work? There's some previews. I think you should. You should have a Jay on the, on the program next time or bring Jeremy back. Yeah, yeah, we'd love to have it about it. Yeah, I'm specifically, I'm very, very interested in, you know, the just American energy forecast for the next couple of years

Starting point is 01:29:44 because it feels like the entire industry is sort of hinging on, like, the trend changing, in my opinion. It feels like we need to bring up the level of energy production for everything else to happen. and whether we hit some sort of regulatory block or some massive scale block or a capital block or a glut of some sort or some gyration correction, there's so many things that could go wrong, but I'd love to know what the forecast actually is from the folks who have gone so much deeper. I'll give you the quick hit. So everybody's trying to do turbines behind the meter right now, not gas, right?

Starting point is 01:30:21 And you've got a number of different players, but if you look at Schneider, vertive bloom. One of them, Bloom, is ramping up. First of all, they're all sold out. So the model will cover like how sold out and exactly, you know, exactly how sold out. But yeah, you want to look at Bloom ramping up production and you want to get Schneider andvertive on here and try to figure out exactly why they're not. Let's see, you know, what does it take to get those guys to recognize what everybody else in the industry is recognizing right now? And then, and then, Let's dig into solar, wind, nuclear, hydro, all these alternatives that, you know, you'd like to have in there, right? Why is Elon putting power plants on the other side of the border and then piping the electricity back to his data center in Memphis because of, you know, short-term regulatory approvals?

Starting point is 01:31:13 Like, there's all of that political stuff that goes on to influence this market. I'm so excited for it. Well, thank you for coming on again twice in a week. We'll see what happens the rest of the week. Maybe you go for a three-peat. If you're not already subscribed, what do you do? And head over to semi-analysis.com buy the most expensive subscription you can find, especially if you're a venture capitalist. You can't call yourself a VC in the age of AI. If you're not paying semi-analysis, the big bucks. At least a couple hundred thousand dollars per month.

Starting point is 01:31:45 Per month. I demand it. Anyways, great. Thanks to see you, Jordan. Thanks for coming on. We'll see you. You mentioned turbo puffer. I'll tell you about Turbo Puffer. Search everybody. Serverless vector in full-text search, built from first principles and object storage, fast, 10x cheaper, and extremely scalable. The soundboard is doing very well.

Starting point is 01:32:03 Someone leaked their revenue recently in that way. It's quite shocking. Well, we have a shocking guest, Brian Halligan from HubSpot, joining us. He's the co-founder of HubSpot. Welcome to the stream, Brian. How are you doing? Sorry to keep you waiting. Welcome to the show. Never better. How are you guys doing? We're doing fantastic. What is the latest in your world? Have you been captured by the AI build-out? Is this something that's keeping you up at night? Or are you watching it more as an observer?

Starting point is 01:32:32 Or are you checked out entirely? Where are you on the, how much does it get your pulse up? Because me and Jordi, it's every day for us over here. We're in the trenches. I'm very checked in. I come at it from another angle. What I've been doing for the last, year is I run an in-house CEO practice at Sequoia.

Starting point is 01:32:54 I do three things. I coach CEOs, most of which are building companies on top of the AI wave, all of which. I create communities of CEOs so they can collaborate together. I have a kids table of CEOs of kind of small company and an adult's table of CEOs and large companies. And then I'm creating content. So I've got a podcast launches tomorrow. Oh, let's go.

Starting point is 01:33:17 Yes. about CEOs and how to be a CEO. I love it. Start up and scale up. Tune in tomorrow. Fantastic. What's the format? What's the format?

Starting point is 01:33:29 Is it a guest-driven? Is it turning kind of the lessons that you talk about at the kids' table and at the big kids table? It's a six-hour daily live stream, actually. It starts at 9 a.m. and ends at 3 p.m. Makes us look lazy. the basic thesis is like the playbook I grew up running HubSpot from 2006 to 2021 like a lot of those plays don't seem to work as well

Starting point is 01:33:56 and the ruby like the ruby we thought like for example I think what's how the way jensen Wong runs this company is super interesting with 60 direct reports and no one-on-ones and kind of public criticism the way Elon runs this company his empire is really interesting the way brian Franceschi does it is quite interesting. And I notice all these CEOs have kind of new place. And they've got a new perspective on things. And so I'm inviting them on kind of one by one to chat about how did you become a CEO?

Starting point is 01:34:26 How do you like your job? What are the best practices? What is all wrong about CEOing these days? And I think it's my first guest is Parker from Rippling tomorrow. Oh, yeah. Nice. And it's a good one because Parker gives all the tea on getting fire. by David Sachs from Zedefits, all the tea on the drama with deal on SpyGate.

Starting point is 01:34:48 And then in between all that, he is a very, very thoughtful CEO. He's not a big fan of conventional wisdom, as people know. But he's doing some really cool stuff. So that's kind of episode number one tomorrow. Yeah, I like that framing as like focusing on the actual job of the CEO. Because there's other shows that could do like, okay, let's do the product review. Let's do the product announcement. but having one feed where you can go and actually understand the philosophy of a whole host of CEOs.

Starting point is 01:35:19 That's fascinating. I think it's kind of interesting because I was the CEO for so long. So it's like really a journalist. It's like a conversation about what the hell's really going on here. How did your approach evolve over the 15 or so years that you were CEO of HubSpot? I don't think it evolved that much is the interesting part. You just one-shot it. I was basically the same guy from 2006 to 2021.

Starting point is 01:35:48 And I followed like ye old playbook of the way people run companies, like the Bill Campbell style playbook. And that's what I think is interesting. It's kind of changing. And that's what I'm trying to dig into and kind of go deep on. It's like Stanley Tucci. You know, Stanley Tucci show and he goes to Italy and he's trying to find his roots. I'm searching.

Starting point is 01:36:06 That's fantastic. What are your thoughts on? You want to know some surprises? Yeah, please. Okay, a couple things. There's a breed of CEO that I see a lot of these days that I call a five-tool CEO. Now, I'm the big baseball guy, and there's such a thing in baseball is a five-tool player, somebody who can hit, somebody who can hit for power, somebody who can catch,

Starting point is 01:36:33 somebody who can throw, and somebody can run at an elite level. Very, very rare in baseball. Who's an example of a modern five-tool player? I mean, a six-tool player is Shoh-Ha-O-A-O-Tani. But he can actually run, he can hit, he can hit for power, he can throw, he can catch. He's very talented, very unusual cat. Alex Spragman's one of those on the Red So, the Red Sox guy. But there's a bunch of these folks who kind of remind me of that in the software industry

Starting point is 01:37:06 where they've got vision. They can code, they can design, they can recruit, and they can sell their product. And that's, I think, was pretty rare in software. They're all over the place now. And they're getting funded, and I work with a bunch of them. Just a few examples, like Parker's one, for sure. Brett Taylor, for sure, from Sierra's one. Gabe Stengel from Rogo, kind of a new company's ripping is one.

Starting point is 01:37:34 Mati from 11 Labs. I have no idea how to say this last name. Harine from Clay, Darra from Delphi, like on and on and on. I'm super impressed with the new breed that's coming out and how talented there. Who do you think the Barry Bonds of businesses or the Mark McGuire of business? Fantastic performance as a CEO, clearly using performance enhancing drugs. If someone tapped me on the shoulder and said, you know, I don't know if you heard this, but Elon's actually an alien. oh yeah

Starting point is 01:38:06 that puts you know would you guys be surprised if someone said it turns out he was an alien would you guys be like oh no no no no that's that's crazy you'd be like yeah maybe it is it is funny the performance sensing drugs thing because uh it like me and jrdi have joked about how it's not illegal to be on a stimulant i obviously partake in caffeine the legal stimulants but some folks go a little bit further. But the reason that it was so controversial and so illegal in baseball is because isn't baseball a sanctioned monopoly by the government? I believe that's, I believe that's why. And so that's why during the whole baseball scandal, the steroid scandal, they came in and

Starting point is 01:38:47 they had to do like a hearing on Capitol Hill. It was a crazy, crazy moment. I don't know if you track that. I think the real reason is because baseball been around for 150 years, people who broke records in the 1920s, like Babe Ruth broke important records in the 1920s, that you can have, like, a ranking of who's actually done the most run's best batting. You can't do that in basketball because they change the rules so much. You can't do that football. They changed the rules so much. So that's why they were so resistant to change the rules in baseball. And that's why they were so up in arms about the steroid thing. But I do think founders do the equivalent. Like, when I was growing up, I'm a beer drinker, you know? You went out with the team, definitely

Starting point is 01:39:28 Tymer on. You go to a Sequoia founder dinner? Yeah. First of all, it's at 5.30, like early. And everyone has a salad and it has water and there's back in the room coding by 7.30. That's definitely not how I grew up. Do you think beer gave you an edge back in the day? I don't think beer gives anybody an edge. I think it helped me connect with some employees along the way, for sure, particularly salespeople. What do you think about co-CEOs? Yay or nay?

Starting point is 01:40:00 Okay, I think Sandhill Road is very negative on this. Except on stewards. We have co-stewardship. Yes, we can talk about that too. But I talked about this on one of the pod episodes with Vlad Tenave. He was a co-CEO for like the first seven or eight years of the company. And I was very surprised to hear that. And he was very positive on it.

Starting point is 01:40:24 I think you can do it. I think it's a little dangerous. You better know the person very well. well and be able to finish her sentence. It's like my co-founder, Darmesh and I, we weren't co-ceeos, but we ran it like a partnership, and we thought of it like a partnership, and the employees thought of it like a partnership. If we called ourselves co-ceos, that would have actually worked quite fine. That makes sense. Yeah. Want some other things that surprised me? Yeah. Here's the weird thing. Two of our

Starting point is 01:40:52 most successful entrepreneurs of our generation are Jensen Wong, Neelan Musk. And they've obviously got really unique playbooks, like Jensen's got his 60 direct reports and the no one of it's, all this stuff we just talked about. Elon has his algorithm and, like, he credits the algorithm in a lot of its success. I ask all of the CEOs on the pod, like, who's on your Mount Rushmore? Who do you follow? Like, who's your inspiration? For me, it was Steve Jobs. Like, my generation is Steve Jobs.

Starting point is 01:41:23 None of them really say Elon, or Jensen. Like, no one's copying their playbook. No one, none of these CEOs have 60 direct reports. And not a single person has mentioned the algorithm. I think that's quite odd. Do you? Yeah, we actually polled YC founders in the last demo day. We asked probably 20 or so who was their favorite entrepreneur, like who they look up to.

Starting point is 01:41:49 And I was expecting like half to say Elon and maybe, you know, a third to say Jensen, something like, that just like vanilla market cap it's a question we didn't prep them we didn't tell them we were going to ask them this this is off the top of their head and there were maybe like two or three elons but it was all over the place and it was it was way down the stack i mean there were some people who were like the founder that i look up to most is is like a founder who started their company five years ago and is a unicorn now but like certainly not like one of the greats like obviously doing doing fantastically but like you know this is like a series b or series c level founder, and they're like, that's who I actually look out to the next. I don't think,

Starting point is 01:42:30 I don't even think a single person said Jeff Bezos. I don't think anyone said Bezos. A guy with a 120 billion of 2024. Free cash flow. Yeah, yeah, it was crazy. It was, it was much less concentrated in the Mag 7 than I thought it would be. And I don't know if that's a shift in how younger entrepreneurs or newer entrepreneurs are thinking about what success looks like. like the maybe the downstream critique of like the the teal monopoly thesis is that like it's actually really hard to go start a business that is in the social networking category or in the online commerce category it's just harder to do that and so uh maybe people some people read zero to one and they said hey i got to start a company but then other people read zero to one and says like

Starting point is 01:43:18 hey i i better not i better not set my sights too high because realistically, how am I going to compete in, you know, some of these monopolistic categories that have been truly dominated by the hyperscalers? It's going to be hard for me to go zero to one in those categories. And so I need to maybe find a smaller market. I don't know. Maybe it's a trend. One of the things that surprise me about them is they don't really have anyone that they're

Starting point is 01:43:43 really following or looking up to. They're very much their own people. and they're kind of making it up as they go and they're writing the rules kind of based on what they think makes sense they don't have like when I grew up I had two people I've two CEOs Steve Jobs Jerry Garcia those were my two heroes that I tried to base my behavior around and they were my cortisosos these guys don't have cortisans the other thing that's interesting about all of them is like

Starting point is 01:44:15 be yourself everyone else is taken they're all very, very, very different homo sapiens. Like Vlad Tenev is very, very, very different from Parker at Ripley. Anton from Loveable is very different than Mati from 11 Labs. They are all quite unique, which I like to see that. And they're their own people. They have a lot of agency. Are you interviewing anybody that runs their company remotely?

Starting point is 01:44:43 Nobody's doing remote. Everybody is in the office. Remote is dead. And everybody talks about 996. I think there's a lot more talk about 996 than walk on 996. I don't think very many people are actually doing it. The CEOs are, though, every CEO I talk to is under, like I say, what's your stress level, one to 10?

Starting point is 01:45:06 Almost all of them say 10. Yeah, what do you think about this idea that a lot of companies are 9-9-6ing in a hybrid sense that because the tools have gotten so good, I mean, a software engineer can fire off a prompt at home on their phone that will go and, you know, start doing work that gets reviewed in the morning. I'm firing off a deep research prompt for something that we are going to talk about on the show. Yes, tomorrow. And so there's this like ambient level of remote work that's happening on top of the in-person work that's happening. And so I might, if I were to push back, it might be that remote is not dead.

Starting point is 01:45:48 We said yes and. We said, let's go back to the workplace. Let's work in the office. And then let's also work remotely at home on Saturdays, on the nights and weekends, because that's what it takes to win. And so the 996 thing is happening, but across two spaces. I'm a little, I totally buy that so much more as asynchronous now. I just think, like, we went remote at HubSpot pre-COVID.

Starting point is 01:46:14 and like the culture is great. It's still great, but you lose something. You definitely lose something. So I'm very supportive of the enough thing. Like if I were starting a company today, I wouldn't do a remote. You know, your headquarters in San Francisco. San Francisco is a bear of a place to scale a company. Salespeople are hard to find and really expensive and not loyal.

Starting point is 01:46:33 Developers are even harder. And so I do a big hub in San Francisco and then another big hub, let's say, in Toronto, where there's a lot of salespeople and a lot of developers and be like, We're in office and at least four days a week. I think that's a good call. Ironically, the people who I think, the CEOs who I think are the hardest core are the two European founders I interviewed, Anton from Lovell and Matib from 11 Labs. Like they are seven days a week.

Starting point is 01:46:57 They expect everybody in the office for seven days a week. Those two are the hardest core, even more so than our American brethren. Well, the pressure on them is immense because people have such, so low of expectations for Europe. So, you know, they have to deliver for their country. it's really high stage for them. And it's kind of patriotic. Yeah, of course. Of course. They need to lead the thing.

Starting point is 01:47:18 Talk about the stewards. One second. One second. I was curious, you said the CEOs you interviewed, all of them or the CEOs you talked to, all of them say their stress level is 10 out of 10, for the most part they do. 15 years running HubSpot, when was your, like, does that resonate? Was it kind of steady state 10 out of 10 the whole time? or did you at some point figure out a motion that allowed you to maybe hover it, you know, a seven, which is maybe like a healthy amount of stress?

Starting point is 01:47:50 It was pretty close to 10 the whole time. Just white knuckling it? It was pretty stressful. Like, the whole thing was stressful. And, like, the thing with HubSpot in most companies, like, it looks pretty smooth from the outside, but it was, like, two steps forward and, like, one friggin' giant step back, and two steps forward, giant step back, you're stepping in it. And in HubSpot, like, we were kind of a wartime company.

Starting point is 01:48:13 Like, I like Ben Horowitz's book, and he's got a whole chapter on wartime versus peacetime CEOs. All of these CEOs are wartime, all of the time. And if they don't have a war going on, they kind of create a war. I thought that was kind of interesting. It's a wartime era. The only CEO I interviewed that is not like 10 out of 10 stressed is Nikesh from Palo Alto Networks. He's a cool cumber. Yeah, I wonder why.

Starting point is 01:48:38 yeah he's a cool company is like so secure he doesn't work a lot of these guys are i mean yeah like this has to correlate with strength of strength of market position right like if if you are running a company where sam altman's out there being like i would love to eat off of your plate i would love to launch a competitor and then like sacha nadella is like oh yeah we're going to do that too like you better be operating in a 10 out 10 yeah sam you're going to get cooked Sam competing, you know, effectively competing with Microsoft. Well, Microsoft has all his IP. Andy has to give him 20% of his revenue.

Starting point is 01:49:16 And he's got to pay him a quarter of a trillion over the next few years. He might come for your nice little startup. Virtually every company, just looking down my list of kids, stable, adult stable. Virtually all of them are extremely nervous about what I'm opening that's going to do. Yeah, of course. It's a long conversation at every board meeting. Of course, of course. The steward thing.

Starting point is 01:49:40 I'm so interested. Like, why doesn't Sequoia just have one CEO? Why don't they have a, you know, like a super GP, like a head partner, named partner. You can just rename the fund. Kleiner was doing that for a while with Caulfield buyers. There's so many different ways to approach it. The Blue Owl, we were talking about earlier. They have two co-ceeos, and I think they have three co-presidents.

Starting point is 01:50:05 You know, these names kind of mean nothing, but they also have extreme weight. So what is a steward in the Sequoia Capital context? Why not CEO? Why not president? Why steward? And then what does it mean to have two now? Okay. I actually like the word steward because, you know, Don Valentine started, Michael

Starting point is 01:50:23 Moritz and Jim Gets and Doug Leone. Like, it's been a long line of really strong leaders and Rulov that they've handed it down to. And the thing that's interesting about Sequoia, so I've been in there for a little over a year, is they are not at all, like even remotely resting on their laurels. They are paranoid. They are aggressive. They don't want to blow it. And so Stewart is actually a decent word.

Starting point is 01:50:51 In this particular case, I think Ruloff was ready to move on. He wanted to move on on top. And there were just two really obvious candidates. Alfred Lynn's got an incredible track record. He runs the early team. He's a good leader. Pat Grady's an amazing track record. runs growth team like picking one of those would have been tough they work well together it's like

Starting point is 01:51:11 let's give it to them both and i think sequoia has done that kind of thing in the past so it's not unprecedented and i i think it's going to work well and they don't call themselves they call themselves stewards but internally they're like just calls partners and they made a big deal out of that i imagine that they go around the office saying you have to call me steward lynn now you have to call me steward grady now uh and also don't make eye contact with me I will wear long flowing robes. No, yeah, it's just, it's just interesting the actual, the actual aesthetics of it. I mean, we don't need to get into the actual dynamics of the changeover from Roloff to the co-stewards.

Starting point is 01:51:55 It's just, I wonder if a co-CEO dynamic is sustainable or if it is an audition process for the final boss, the final CEO? I mean, it hasn't worked a lot. Yeah. I mean, Netflix is doing it. Spotify's doing it, but you can't think of a lot of examples. And it looks like it kind of works with Netflix. Like, that's been going on for a while and it's doing pretty well. I mean, Spotify's really, it's just not a lot of precedent for it. So I don't know. It wouldn't be my first choice to be a co-CEO or to fund a co-CEO. But in some cases, it can work. I think it's a little unorthodox. There is an interesting dynamic where, uh, they call it a partnership for a reason. Yeah.

Starting point is 01:52:44 You know, it's not a corporation. It's a partnership. And so that vibe has stretched over five decades for these folks. Yeah. I wonder, I wonder the benefits of having two people in the same, in the role. Like, uh, it becomes less pressure for one person, but then you also don't have necessarily like the buck stops with one person. There's all these, like, odd dynamics. Like, there's benefits and costs to having the, uh, the, that's right.

Starting point is 01:53:12 I think they can get a lot done and they can divide it up and get a lot more done. That was the case with my co-founder and I, like, we divided a lot of stuff up. And we got a lot of shit done together in our respective parts. And I deferred to him a lot. He deferred to me a lot. What do they call it? Duarchy where there's two kings. Monarchy is one key.

Starting point is 01:53:32 Duarchy is two kings. Very rare. How have you been. processing this new wave of AI agent startups that are, in my view, oftentimes competing with traditional SaaS companies that may have only been started a few years ago. How have you been processing it? Well, I'm involved with a lot of them. I mean, they have escaped the gravitational pull of the Earth's revenue. Like, holy crap, where they're going past. In HubSpot Group, fast in its day. And it's like, wouldn't even get a second look from a VC now. And it's remarkable

Starting point is 01:54:12 what's going on. And I tweeted a week or two ago that, like, it's a bubble. If you get an offer to sell your company, you should do, you should take money off the table. And on one shoulder, I'm like, it's definitely a bubble. The valuation is crazy, 100x and whatnot. On the other side of my shoulder, like, I just have never seen in the history of mankind growth like this. So maybe it's not. I don't know. Where do you guys come out on that? Are we in the middle of a bubble? bubble or is it just matched the growth? I think we've had a, you know, we talk with a lot of investors and sometimes we get a little concern when people come on and say they don't care at all about margins. We worry a little bit about those clips ending up in documentaries about, you know,

Starting point is 01:54:53 whatever this moment in time ends up being. You're either in a bubble or you're in a crash and we're definitely not in a crash right now. I get, I get, I get, I would say, I get like my concern comes from companies that spring up and are raising because they're positioning their product as this like AI agent when in reality it's hard to tell why it's going to be a better solution oftentimes than something that looks like a normal SaaS product. And so I just get I get concerned because I know that the SaaS companies in their category have access to all the same tools and they have distribution and they can potentially use the advantage they have of having this big product surface area and a bunch of core existing product and then just compete on all these new product

Starting point is 01:55:44 lines. And I just wonder if some of these like AI agent, these more native AI companies, will struggle to actually compete with. And you've seen this. Like it's not like companies like Notion, for example, didn't sit around and say like, no, we're not going to integrate L. LMs into our product, like, that seems cool, but we're just a, we're, you know, a notes product and we're going to stick to handwritten texts. Like, they were incredibly quick to integrate all the best models into their product. And so I just don't, I don't see, like, the most recent generation of teams, like, asleep at the wheel at all. Yeah. And I'm old enough to remember the last platform shift from client server to SaaS. And the client server companies were very much in

Starting point is 01:56:31 denial of SaaS for a long time. I remember Oracle just being very vocal that SaaS is, it's a bunch of BS. And obviously, SaaS did very well. Some of those folks did well, and they came across. SAP did pretty well. Oracle did pretty well. Oracle did fantastic, actually. The thing that's different this time around is all the SaaS players, including HubSpot, were very early on it and are investing heavily in it and are building cool stuff. And they have a little of an advantage and they have a lot of data and a lot of context, which is really useful if you're building agents. So I wouldn't, I don't, I think SaaS is alive and well. And I think a lot of these SaaS companies, HubSpot, Service Now Notion, so many of them

Starting point is 01:57:10 are building cool stuff. Like inside of HubSpot, I think of it as like a platform with applications and agents. You can build agents on it. You can use our agents. And then it's got a co-pilot that you can refer to. It's all starting to work. People are using it. The thing that's interesting about some of these agent companies is,

Starting point is 01:57:29 they're working in areas where there's there weren't SaaS companies like Harvey is doing incredibly well. It wasn't really a, you know, wasn't in an area with a lot of big SaaS companies in there, or Rogo selling to investment bankers. Like a lot of, a lot of the early huge wins on the agents are in funny areas. This company called Juice Box, absolutely ripping, is in recruiting areas where they're like a big incumbent, like they're filling in there. And some of the, of them are co-pilot-y, sort of be working alongside of it, and some are autopilot-y. And the autopilot ones, I think, will be the ones to really watch. Yeah, it feels, it feels really hairy for Microsoft to go after legal AI, just because that's not really, they sell mostly

Starting point is 01:58:15 general purpose tools. And so if you're building an Excel plugin, where you bring an AI to Excel, I'm worried a little bit about where that goes. But if you're building something that, yes, it ostensibly is a word document, but you're in entire business is off in this industry that's heavily regulated and Microsoft has only penetrated with the broad tools and has never really built a vertical solution in that category. I feel much less worried about you being attacked from the labs. But thank you so much for taking the time to chat with us. I'm excited for your new show. I'm excited to check out the first episode. And the number of stewards at Sequoia is doubling. So any day now, you might get

Starting point is 01:58:57 the tap on the shoulder, be the third, fourth, fifth steward. They're adding more stewards every day. We're pulling for you. See you. Cheers. Google AI Studio. Create an AI powered app faster than ever. Gemini understands the capabilities you need and automatically wires up the right models and APIs for you get started at AI. Studio slash build. Our next guest is Dr. Fay-Fa-Lee from World Labs. She is a world-renowned computer scientist. Thank you so much for taking the time to talk to us today. And congratulations on the launch. Massive.

Starting point is 01:59:27 Hi, guys. How are you? We're doing fantastically. I have so many questions about what you're building. I'd like to start with why you're building it specifically. What was the moment where you decided to go and

Starting point is 01:59:43 start the company? Because the big institutions haven't exactly given you the cold shoulder. You've been associated with Stanford and Google and on the board of Twitter at various times. You could be doing work inside of a hyperscaler, I'm sure. Why did you want to build a company outside of the big labs?

Starting point is 02:00:06 Well, because we had a vision. We had a vision we really believe in. We believe that AI as a civilizational technology will help humans and superpower humans in many aspects of the intelligence industry. And one of them is spatial intelligence, and that is something that is, in my opinion, still in a budding stage. And our vision was ahead of most people. And this is something that my co-founder said I really feel passionate about because without this, AI or AGI would not be complete. And we want to pursue that vision and that mission.

Starting point is 02:00:52 talk about how you think about spatial intelligence that there's so many data primitives from GIS data GPS data there's you know dot clouds and all sorts of different ways even just video footage like what we're generating right now we're generating spatial data to some degree how do you like where where did you think the initial the initial data sources were like lacking and then how did you want how do you think about building up the stack to kind of advance this and move it a step forward yeah you're totally right spatial intelligence is actually as huge or horizontal as say linguistic intelligence or language intelligence so there is many aspect of it but fundamentally i think it's it's uh it's deeply perceptive um you know it involves

Starting point is 02:01:48 seeing and understanding. It involves reasoning. It involves the ability to create in the mind's eye, what worlds look like, and also the fundamental ability to be able to interact with the worlds, whether it's physical or virtual in a very profound way. And if you put all these together, we haven't had technology that can really do all of the above. And we're still on the journey to unlock that. But one of the things we just have done is really putting out the world's first 3D world generation model that is available to everybody. And not only it's generative, it allows users to interact and create and edit. And your question about data is actually an important one, because it's hard.

Starting point is 02:02:44 Unlike language, unlike videos, unlike images, you don't have too many 3D data, too much 3D data out there on the Internet. They're much more specialized. So as a group of technologists, we actually have to just work harder. And, you know, and frankly, we use a hybrid approach in data. Some are large-scale from the Internet. Some are large-scale from simulation. Some are real-world captures.

Starting point is 02:03:17 And a lot of data also comes from algorithmically processed data. That's really important because it's just a much richer problem. 3D is a much richer problem. So the product that we just saw, it looks a little bit like a video game. I can imagine a bunch of different ways that this game. it's built into something that feels like a video game or maybe there's this new trend of folks who are using AI tools almost as like these, they just enjoy generating songs on Suno or they enjoy just creating for the sake of creating. It's like you sell a guitar and then someone

Starting point is 02:03:56 plays the guitar and they never commercialize their music. They just enjoy playing the guitar. And so I'm wondering if you have a view on, is it too early to tell what, your customer base or what the user base will look like. Are you just hoping to get this out and then see who shows up? Maybe there's a robotics company that needs a bunch of data and so they use your model to generate synthetic data or there's people that just have fun with it and they wind up paying because they enjoy the service. Yeah, I wonder if people sort of underrate world models because they look and feel today often like video games and so they don't understand kind of the significance. And so, yeah, I would love to understand. You're so right. You're so

Starting point is 02:04:37 Right. I think people underrate world models because we haven't had world models. It's not people's problem. It's that the technology is really hard. It's the next frontier of AI. And like I said, this is the first time a generative 3D world model is available to everybody. And humanity has only no one world, that which is the 3D physical world. But now suddenly we are in a multi-universe, multiverse situation because of this technology. So who will use it? I agree with you, actually, you know, just the sheer joy of the immersive experience for the sake of enjoyment itself is really fun. I was just talking to a user earlier today about the VR button, you know, on our product, click on the VR button. It takes you to, if you have a headset, you can just purely enjoy the immersive experiences. and, of course, add some favorite music of yours. That will be even better. But dialing all the way to professional use,

Starting point is 02:05:45 there is a lot of professional use cases. If you go on our website, we have a page called Marble Labs, where we show creators from VFX, from game developer, developing world, from design world, architecture, from robotic simulation, even clinical research. research, which I personally never thought about, are already finding use cases. So it's very horizontal. But I think creativity and simulation are going to be two very large areas that people will find this really useful and super powering.

Starting point is 02:06:25 Okay. Help me understand tool use in the world model context. So there was a moment where the large language models, the transformer base, GPT3, GPT4, those models were getting really good at math. And they were basically just memorizing math. And you could just ask them, what's 100 plus 50? And it would just tell you 150. And it was sort of learning math. And then at a certain point, it broke down and it couldn't do really complex math just in the actual weights. And so the solution was to teach it to write Python and give it a Python. And give it a Python. on Ripple and let it write some code. And then you get the perfectly accurate math

Starting point is 02:07:07 when you need that from the, not just the LLM weights, but the actual model, the experience. And so what I'm interested in is that I've seen evidence from Jeannie and your model and world models generally, there's this idea of persistence and the base model getting good enough that if I go up and I paint the wall and I come back later, the paints there, the model remembers this, maybe gravity,

Starting point is 02:07:31 there's all these things that are simulated, But at a certain level, it feels like if I need an inventory in my game, maybe we should just use a database. And so I'm wondering where you see tool use coming in to layer on top versus where you think you're on like a scaling law where if you just keep working on the base underlying model, you will get all of that functionality for free. Yeah, great question. So I want to answer your question in two different ways, because you ask a very important question technically, which is the scaling law of these models. But then you also ask the really important question of the tool use, right?

Starting point is 02:08:13 On the scaling law side, the 3D generative world or just world model in general is actually an earlier technology than language models. So we're seeing budding sides of scaling law, but this is an interplay between, model architecture as well as data. So what I can say right now is we're absolutely seen budding signs of it, but it's not, the curve hasn't gotten to the point where we see LLMs, you know, yet. So which makes the technology really, really exciting and being at the forefront of it,

Starting point is 02:08:49 we really do have the best 3D-generative world model is exciting. On the tool you side, this is where I find. it fascinating. I think when it comes to the usage or the use cases of world model, there is a lot of professional use cases, whether we're talking about VFX, you know, for movie industry or game developers. And when it comes to professional use cases, I personally really believe that superpowering creators and developers is very important. That means it needs to give them a sense of control and agency. You know, if you try our model and product, there is an option just prompting a result

Starting point is 02:09:42 out. And sometimes it's a slot machine, but it's to be a pretty good slot machine. I love a slot machine. Yeah, and that's great, right? It's amazing. But as a creator, in your mind's eye, there is actually so much. nuance, there is so much story in your mind, so much, so much you want to express, whether it's for a game or for a movie, for a story, for even like trying to get the robot to do, train

Starting point is 02:10:12 the robot. So we actually put a lot of thought in using native AI capabilities to allow the users or the customers to engage in an editing and controllable creative loop. So if you're prompting something and you don't like the wall color here, we actually allow you to say, well, change the wall color from green to purple, or say, add this object, or say, I want to expand here, or allow you to stitch together the worlds that you see, or allow you to actually give a 3D layout so that you can put the couch where it is.

Starting point is 02:11:00 So this is very important, and this is the tooling side of it, right? It gives the controllability and agency to the human collaborator. Yeah. By the way, my team told me I have to put this on that. There we go. Thank you.

Starting point is 02:11:19 Love it. I love it, fantastic, Matt. what what kind of progress can we expect from world labs on the next two three years like what are your kind of ambitions in terms of just general progress oh my god um two three years i i think we need to um two three years is a long time i things are moving so fast spatial intelligence is so horizontal and it's a platform i do envision that marble our product is a platform that can empower creativity simulation, and I think we're going to see a sea change in multiple use cases on the gaming side, on the VFX side, on the Metaverse side, on the robotic simulation side, on design side, all these are really, I wouldn't say, it's almost ripe for changes and we're seeing that level of excitement

Starting point is 02:12:29 for many, many users now. What game developers or platforms do you think will be most quick to adopt world models? Because it feels like Roblox, I'm sure you've chatted with them. Like Roblox should be jumping on this because it could be something that any of their users could get a lot of value

Starting point is 02:12:51 from immediately speed up that creative process. But I can think of any, and some of the visuals we've shown on the screen, I'm just like, I wish that I had world labs when I was playing first-person shooter games as a kid because you could just generate infinite maps for the games that you were playing. You're watching this and you're like, yeah, the environments look beautiful. I just wish I had an assault rifle in this game and they were bad guys. Yes, and if you look at our page on Marble Labs, there are, you know, shooting. games. Examples already. So I don't know, I think the sky is the limit literally. Of course,

Starting point is 02:13:32 I think what's exciting in this Gen. AI era is that a lot of, a lot of just creators and technologists, many of them are individual developers or indie, you know, studios and teams, small teams are really jumping in really fast, and Gen. AI models like ours really lowers the bar of entry for many of these use cases. So we're also, to be honest, we're also talking to bigger teams. I'm actually very pleasantly surprised by the level of enthusiasm from bigger teams as well. The teams, the team's going crazy. They're actually playing with your website life. Is it possible that we're in a world labs model simulation at this very moment?

Starting point is 02:14:27 Have you? Sure, yeah. I'm glad this is time travel. Generated this way. Getting back to some model. The model is getting really good. Yeah. I would love to know your thoughts on market structure and how things might play out because

Starting point is 02:14:48 I've been completely convinced of your vision for where we are on this technology, how early we are, and what's going to happen over the next few years is like just the, I don't want to call them easy wins, but like the logical play out the scale and you get somewhere really exciting. But I'm interested in the market dynamic. So in chat, in LLM, we saw sort of a somewhat of a monopoly, you know, emerge, a clear winner in consumer chat, knowledge retrieval with Open AIs chat GPT, of course. Now, other firms are obviously working on that and competing. Then in the enterprise, you have more of an oligopoly, maybe emerging between Anthropic, Gemini, and Open AIs API. There's obviously a long tail of other providers. Then you have the wrappers,

Starting point is 02:15:42 and I'm wondering if there's going to be something similar that happens in world models, is it worth thinking very hard about being the winner in consumer specifically and being not partnering with Roblox, but being the next Roblox, being the platform that wins consumer, even if it means pulling back from an API business in the short term, or is it just too soon to tell, and it might be kind of totally different? I'm just wondering how you're thinking about the long-term market. structure for what feels like a distinct technology from LLMs.

Starting point is 02:16:17 That's a great question, actually. By and large, I think it's a little bit early to tell. So right now, like I said, we just rolled out the first, you know, generally available, publicly available model. And we're going to focus on being a model company for a while. Okay. Because science is still early. Yeah.

Starting point is 02:16:39 We want to move fast and there is a lot to be unlocked. I also think that I don't think we're a model in a way that we are defining it, especially in the deep spatial intelligence way, is as consumer as a chat bot. Because I think, you know, like 3D is a representation. It's a medium that is. that has its own characteristics. So I think that we're going to see products that are going to build around these models

Starting point is 02:17:23 in different ways. Some are for creators, some are APIs, some are for possibly even different use cases. And I'm not saying there's no consumer. I actually think the market might surprise us, especially on the Metaverse side. I think it's going to surprise you. I think it's going to be a huge consumer category. There's a lot of work that needs to be done to actually make it a place where people want to hang out for hours and hours and hours.

Starting point is 02:17:54 But I do think it's going to happen. And I think that it's a bit of a race. But it's extremely exciting to even just be on the, at the model layer. and then, you know, experiment at the application layer. Because we've seen model companies get in, get into the application. Yes, exactly. Of course, right? Of course, we're absolutely, I mean, Marlowe itself is an application today.

Starting point is 02:18:22 Of course. Of course. Yeah, yeah. But we are going to focus on model. This is the world apps is a deep tech company. And I think focusing on model is the right thing to do right now. Yeah. How are you thinking about fungibility between,

Starting point is 02:18:37 formats. It feels like there's maybe a uniquely unique value in having a world model that can export Gaussian splat, but then also export geometry, also export just an MP4 for different stages of like a VFX pipeline, for example, something that Hollywood might want to do. Do you think that you need to have like translational models or is there like one model that becomes like like multimodal that can handle all the different formats, whether I want an OBJ file, and I want a 3D, you know, point cloud or an Olemic, I can just get whatever I want from the same model, or do I need specific models to translate between them?

Starting point is 02:19:23 I don't know if you have played marble yet. We are actually multimodal. We are right now exporting, you know, Gaussian flats, mesh, mesh colliders, MP4s, and images and panels. But is that all from one model that's trained, or is there like a translation layer between the outputs? Is there like one foundational truth and then, like, it's like chat GPT is not specifically trained on, there's not a Spanish version and an English version and a French version. It just learned every language when they did the big pre-trained.

Starting point is 02:19:55 Is it the same thing or is there actual like, or is there a translation layer that you need to do in a series of different models? What I can say now is we are a foundation model. Marvel is a model. Yeah, yeah. Okay, got it. Cool. More broadly, where do you think AI is underhyped and where do you think it's overhyped? Oh, that's a spicy question.

Starting point is 02:20:21 Hold on the motto is underhyped. There we go. Talk your book. Just talking your own book. I love it. I agree, though. I completely agree. I think this is a deeply underhyped category.

Starting point is 02:20:32 So, to be honest, you know, one thing, I consider. myself a scientist in my heart. And I actually really don't like hyping. I think, you know, that's just, you probably have seen me not on the hype train in most of these discourse, right? So as a scientist, I think world model is underappreciated because it's so new. And in terms of overheated, I do think that Silicon Valley, as a whole, to mistaken, clear vision with short distance. Sometimes, for example, 2006, Stanford self-driving car drove the first 140 miles in the Nevada Desert for mankind, self-driving car.

Starting point is 02:21:28 It took 20 years for Waymo to be barely on the road as a L4, and there's still it's still so limited. And this is a massive amount of effort. And it's also riding on the coattail of a very mature industry, especially hardware and distribution and use cases and all that. So this is an example to show you. There are clear visions. For example, robots that can do all kinds of house doors.

Starting point is 02:22:04 And as a mom, I'll tell you that that would be amazing, you know, start with cleaning my bathroom. But that clear vision is important, but the journey is going to be long. It's, you know, we have issues with hardware. We still need to figure out data. The world model brain of the robots also need to improve and all that. So that's just an example. And also creativity, right? creativity industry, which we are also engaging in. One thing I don't, I don't call it a hype.

Starting point is 02:22:41 I call it a misleading sentiment, which actually really bothers me, is that I don't, we don't want to replace human creators. You know, human creativity is precious. It tells the story of our species, of our culture, of our society, of our community, of each one of us. What we want to do is to superpower and augment creators' capabilities. And sometimes the communication of technology is a little skewed towards, oh, the model can do all the work in creativity. And I personally really want to highlight human creativity as something that's so fundamental to who we are,

Starting point is 02:23:28 and AI is here to help and augment. Can you help me understand the relationship between the current AI hardware buildout and your technology, your model, your business? I would imagine that you're a beneficiary because there's all these data centers. There might be some slack capacity in the future. But at the same time, I've been hearing that a lot of the LLM Foundation model companies are partnering with NVIDIA to try and steer the development. of the next generation of chips to be hyper optimized for LLM inference. And that

Starting point is 02:24:07 might be okay for you, but it might actually take us, you know, away from something that's optimized for what you do. And so I'm wondering if you could just take me on a tour of what's exciting on the AI hardware buildout from your perspective. Where are the risks?

Starting point is 02:24:24 Yeah, so actually, I was just in London receiving this award with both the algorithm folks as well as the hardware folks for AI. Congratulations. Yeah, so I think, as you, it's the queen, no, no, it's not AI generated. I believe it is a recording of it, an audience clapping,

Starting point is 02:24:48 but Jordy triggered it from his soundboard. That is the Queen Elizabeth Prize for Engineering from King Charles himself. Congratulations. We had it here to mention to you, but I'm glad you brought it up. Yeah, because you're talking. of the hardware. Yes. Literally in the room with my friend Bill and Jensen.

Starting point is 02:25:05 So as you know, the most exciting, the most exciting thing for modern AI, for the birth of modern AI is the convergence of hardware, software, and data. So from hardware side, I think it's, it continues to evolve for world modeling, especially our technology relies on rendering. we do think we will keep our conversation, our side of the conversation, going with the chip makers. Because some of the our requirement, especially on the rendering side, as well as on the training, the model side, will be somewhat different from LLMs. And, you know, I would love to, I will, and I would love to call for the chip industry to also work with us on this front. What is exciting?

Starting point is 02:26:04 I think that's a great question, actually. I'm trying to, so I was in Middle East visiting some of the construction of data centers, and that was pretty epic seeing how large the Stargate data centers are being constructed. And it really feels that we're in a different phase of industrial revolution. You know, we never, none of us lived in the days of the steam engines, the electricity when the scale of industrialization in that time was just multiplying for humanity. I think we are now living in the AI industrialization era and seeing that scaling up is quite exciting. Hypothetically, last question.

Starting point is 02:26:55 for me. Hypothetically, if I gave you unlimited access to a one gigawatt data center, the best and brightest, the hot off the presses, freshly installed one gigawatt data center, you know, probably billions of dollars invested in this, would you run your, would you do a training run? Would you run your model? Would you just scale up? Or would you say, hey, I would need more time to actually advance the way we think about training before we press go on the big run? Yeah, that was going to be my question is like, at what point does World Labs become capital constrained and are you capital constrained today? Yeah, it's the whole bitter lesson. Research and new ideas. There are different parts of the business that are bitter, lessen-pilled, and others that aren't.

Starting point is 02:27:51 And I'm wondering, like, what pieces are currently on the great scaling curves? Yeah, like I said, the scaling curve, from a model architecture point of view, we're still early. So if I have one gigawatts and that many chips, I'm more likely going to actually run some parallel models and experiments to really hole in the bet. So it doesn't mean we're still trading large models. It's just not at the level of today's LLM's yet. So are we capital constrained? We are capital constrained.

Starting point is 02:28:34 You've got to start hyping more. I want to see some FAPA Lee hype. We're going to hit the gong. We hate capital constraints. How much have you actually raised? raised? How much can you do how many can you share? Publicly it's known that we've raised more than $240 million. Publicly. Just to explain why why did you hit the goal just now? Because we're increasing the hype we yeah we hit the goal for every fundraisered we hate that yes yes it's a good

Starting point is 02:29:06 sign. It's a mutual hype and wearing your hat. Yes we appreciate that and we appreciate you taking the time to come talk to us. Thank you so much. This was extremely exciting, extremely enlightening. And yeah, we're very excited for you. Congratulations on the launch. And we'll talk to you soon. Yeah, thank you guys.

Starting point is 02:29:22 Bye. Cheers. Bye. See you soon. Before we bring in our next guest, let me tell you about profound. Get your brain invention and chat.

Starting point is 02:29:30 You reach millions of consumers who are using AI to discover new products and brands. Let me also tell you about linear. Linear is a purpose-built tool for planning and building products. Meet the system for modern software development. I'm going to ask Kari to add this sound effect.

Starting point is 02:29:42 projects and product roadmaps. I'm loving the new stingers. Look at that. That looks fantastic. Our next guest is Scott Sanders from Fort Terra. He's got some big news. How you doing, Scott? What's going on?

Starting point is 02:29:54 Good to see you. Good to see you, too. First time of the show, introduce yourself. Let us know what you do, how you describe Fort Tara, for those who don't know. I mean, first off, a long-time listener, first-time caller. I think it was actually the subject

Starting point is 02:30:09 of the original TVPN, print the internet, internet situation. Oh, yeah? Or you were now physical memes and I criticized that. You criticized it?

Starting point is 02:30:20 Okay, well, you came around. I came around. Was it, was it like we were using up too many pieces of paper? Was this an environmentalist thing?

Starting point is 02:30:28 You were anti-printing or something? What was going on? No, the internet exists on your computer of what's the need to physically print it off every day.

Starting point is 02:30:37 Well, I printed your new, we printed, I will put it out there. We printed your news here. Yeah, we printed your news. because we care so much.

Starting point is 02:30:44 We wanted to physically hold. We like the Wall Street Journal. We like the Financial Times, you know. You'll come around. We should do like a TBPN, like for every episode. We plant a tree just to make sure that, you know, we're replacing. But I feel like you, I feel like we're kindred spirits. You work on physical things.

Starting point is 02:31:01 We work in in physical, in the physical realm. Of course, there is a software element to everything that both of us do. But give us the update on what you're building because it does touch the physical. realm correct that is that is true we do we do build hardware yeah we uh we announced a two hundred and thirty eight million dollar series today i think there's a down-upac there we go there we go massive fantastic yeah but we're building distributed systems for defense starting from the ground up you know we feel the warfighter you know you need drones you need maritime capabilities there's great companies building that yep um

Starting point is 02:31:42 but we're focused on building stuff that primarily goes on vehicles because at the end of the day, you know, try not to walk into combat if at all possible. And we want to be able to equip those warfighters with technology and distributed compute at the tactical edge that enables vehicles to be self-driving, active communication nodes and relays, launch things like loitering munitions, put radars into place to detect aircraft or detect enemy shipping, and then put, you know, anything from cruise missiles to, anti-ship ballistic missiles in the back so that we can deter our enemies from invading countries

Starting point is 02:32:17 and want them to invade. Yeah, my mental model for this stuff is a little a little hazy. Maybe you can help clean it up. I feel like there's usually like one company that does just autonomy. There might be another that's doing some sort of battlefield tactical mapping, some awareness things. It sounds like you're doing multiple. How do you actually interface with the other the other touch points. I mean, if, if, uh, who, who do you need to integrate with? Since some people might be familiar with maybe what Palantir builds or what Andrews built on the, uh, on the, uh, on the operating system level, uh, how, how, like, what, what, what, can you give me some concrete examples of like, uh, groups that you're working with or technologies or

Starting point is 02:33:01 platforms that you're building on? Like, what's the, uh, what's the wheelhouse case study for For Terra? Yeah. And on top of that, I feel like the challenge from a product roadmap standpoint, and product planning standpoint, is you have to understand what are the systems that we have in place in our armed forces today and then how the battlefield is actually changing. We've heard from other people on the show that a lot of the equipment that we have might not be relevant in a world where the front line is just drone-on-dron action. Yeah, I think one of the best examples of doing this is actually with one of our partners, Raytheon, where we, or in this case, chaos in that quick little snippet.

Starting point is 02:33:40 Where with Raytheon, we and Oshkosh, we integrated our edge compute platform and our self-driving software to take a traditionally manned vehicle and make it unmanned. So one, by putting the edge compute on self-driving vehicles, you're enabling other algorithms and other platforms to run on top of them. So we think about the ecosystem as a partnership approach where we're not going to make everything that a warfighter needs. In fact, no defense company, defense tech or otherwise can do that. And so we open up our architecture and our system so that a Palantir can run at the tactical edge, not on a giant server rack somewhere. Or in the case of the small multi-purpose equipment transports that you're looking at, we put chaos's long range bistatic radar system on it to detect drones. And our future integrations with those guys will enable them to utilize our compute and our autonomy later. We don't care who's doing the C2.

Starting point is 02:34:36 We obviously do our own because you kind of have to. But if that's Andrew's lattice or Palantir's Gaia or smart system, we're very open to that. And we've broken up our system in a way that enables the user to sort of make the decision of what capability they want for each different application layer and not wrapping it all into one holistic platform, unless that's what the end user and the customer want to do. What was yours or the team's reaction to Pete Hegseth speech last Friday? We had Catherine Boyle from Andreessen on talking about how Hegseth was basically making a case that was it Cheney made back in like 2001. So these are basically reforms that have been people have been asking for for a long time, but we haven't been able to actually deliver.

Starting point is 02:35:29 yeah we were we were lucky enough to to be at that event and you know defense tech reform is people is a thing people been talking about since before defense tech was a thing you know the acquisition system has become extremely complicated and I think difficult to work with for many companies and it's you know to have a secretary of war coming out and saying like look this is a this is an actual problem right like the rate living in step on getting technology to operators is very rarely whether there's the technology that exists that can solve the problem. It's can it work its way through the prototyping into production phases and get into scale production with an end user.

Starting point is 02:36:12 And that's been very hard. Palantir's been at this for 20 years. Andrew's been at this since 2017. And definitely not going to do that math in public. I'll be quite easy to do. I'm a math guy. He's a growth guy. Yeah. That's amazing. Okay, speaking of growth, how is the company growing? I mean, we've texted

Starting point is 02:36:35 about this. It's all SBIRs, right? Yeah, it's all sivers all day long. Actually, no, I think we're too big for SBIRs now, which is great. We're about 550 people total. And so, we're not, still not that big in Defense Tech or Defense World, still relatively small. I'm trying to be a scrappy startup. and, you know, work with not only the legacy primes who build incredible systems, right? There's no one in a defense deck building eight by eight, 25,000 pound armative vehicles. They can go head to head with, you know, major land forces across Europe. And there's only a couple small startups that are starting to do the missile systems

Starting point is 02:37:17 that we want to put on the back of these platforms. But our approaches, we open up and enable our architecture to work with nearly anyone to deliver that capability at the tactical edge. We really just feel like humans being the blunting force of combat is a pretty bad idea. We have probably 20% veterans at Fortera, and a lot of us feel very strongly and very passionately that I would much rather have a robot make first contact with the enemy or be the platform that is emitting a large signature on the battlefield,

Starting point is 02:37:47 something firing a missile, firing a howitzer, moving a radar. So that when the platform is inevitably targeted, it's not a human that's getting targeted, it's a machine. And we're trying to change that dynamic, you know, one platform, one program at a time. Well, thank you so much for coming on the show. And thank you to all the veterans. It was Veterans Day yesterday, right? And thanks everyone for their service.

Starting point is 02:38:08 And congratulations on all the progress and congratulations on the Series C. And next time you come on, we will not print out your news. We'll just go in blind. Yeah, we'll just go out. Because we don't know how to use computers. As long as the next time, isn't it at 10.30 at night, I'll be stoked. Wait, are you in, are you in Lisbon right now? Where are you guys at Web Summit?

Starting point is 02:38:30 Josh is at Web Summit. I'm in Paris at TechTOP. I mean, with some customers. Okay, cool. Awesome. Yeah, we can coordinate better on the time. Congrats to the whole team on the progress. Yeah, awesome.

Starting point is 02:38:41 See you soon. We'll talk to you soon. Have a good day. See it. Numeral.com, not NumeralHQ.com anymore. Numeral.com and sales tax and autopilot, spend less than five minutes per month on sales tax compliance. Our next guest is Jamie Alleyer from Circle.

Starting point is 02:38:56 Just had earnings. Welcome to the show, Gary. How are you doing? Good to see. I'm great. Good to see you guys. Welcome back. Fantastic.

Starting point is 02:39:05 Welcome back. Thank you. Give us the rundown. What's the latest in your world? Yeah. Well, this morning we announced our Q3 earnings. It was a tremendous quarter. We saw USDA grow 108% year on year, which is fantastic.

Starting point is 02:39:23 The amount of activity happening on-chain with USDC grew about 600% year over a year to $9.6 trillion of on-chain activity with the U.S.C. Get the gong for that. I think that's the biggest gong ever. Maybe we've hit the gong for various countries' GDPs. I think we might have hit for a GDP once, but that's it. The only thing that's bigger. That is, yeah, that is remarkable.

Starting point is 02:39:50 That's a lot. Of course, that's the nature of these networks. Yeah, a lot of other great stuff. I mean, we launched something called CPN, which is an on-chain money movement payment network earlier this year. That is growing very fast, you know, dozens of financial institutions coming on that network. It's already gotten to an annualized payment volume of about $3.4 billion. Key, though, just from a financials perspective, we saw adjusted EBITA grow 78% to $100,000,000. 66 million in the quarter. That's a 57% adjusted EBITDA margin, which is about 730 basis

Starting point is 02:40:30 point expansion. And so strong performance on that as well. And then I think really importantly, we recently launched ARC into TestNet. And ARC is a new layer one blockchain network that Circle has been building into the market. We had over 100 major companies, major banks, payment system operators like Visa and MasterCard, you know, major AI companies. you know, major exchanges, e-commerce companies, gig economy companies, all these working with us, collaborating us to deliver ARC. And we also announced this morning that we're exploring a token, a native token for ARC network, which is an exciting development for us as well. And so we're seeing a lot of activity in the space. You know, we had the Genius Act pass recently, and so we're also

Starting point is 02:41:17 just starting to see more and more major institutions, major financial firms, payments companies, getting in the game and collaborating with us and building products with us as well. Can you tell me anything about the Anthropic relationship? There's this very interesting concept of like using stable coins to power agents and the future. There's that. And then there's also just like Anthropic might need to pay someone internationally. Can you give me any guidance on like where we are on that?

Starting point is 02:41:48 Yeah, I mean, look, a couple of things on that. I think the first is that, you know, we've been working alongside others on these standards for agentic payments using... Like MCP, which does not have... MCP. Does not have stifference yet, but it should, maybe in V2 or something. Well, yeah, and standards like X402 and Google's agent to payment standard. We're collaborating on both of those. We're releasing tools for those.

Starting point is 02:42:12 And, you know, we actually have a number of, like, agent developer tools, companies that are supporting these things as well. And so that's actually happening. It's actually one of the key design centers for the ARC blockchain network that we're building, which is we envision a world where over time the velocity of money increases and more and more of our economic activity is machine intermediated. And that machine intermediation is going to be in these new computing networks, these provable, trusted computing networks, which we call blockchain networks. And AI agents will become, we believe, the primary intermediary that's intermediating

Starting point is 02:42:50 activity on these. And so we see that as sort of, if you look at these trends converging over the coming several years, we see these kind of compounding each other. And so, yeah, we were excited to have Anthropic as a collaborating partner for us with ARC. And I think, you know, we had a number of other AI-focused firms there, too. And I think it just speaks to the fact that we need a substrate, we need an execution environment that AI agents can use that are trustworthy, provable. And look, agents need to be able to make, you know, a five-cent transaction for consuming some tokens or, you know, a $50 transaction and needs to work anywhere in the world where software works. And that's what these new networks are really good at. And so there's not a payment system

Starting point is 02:43:37 that's ever really been built to support that. And I think something like USDC and then these new networks like Arc Network and standards like X402 and others really help help with that a lot. talk talk about just like the strategy of going full stack and how you guys are positioned against competition at the different levels you guys are an issuer you're building you know you're building your own network you're going to have a native token there's ton there's uh nowadays it feels like there's probably a new stable coin that gets created every second of every day right not not just a net new of an existing stable coin but an entirely new uh stable uh you guys are well positioned in a lot of ways, but I guess talk about how you view your competitive position as a variety of other networks come online and new stablecoins come online. Yeah, absolutely. I mean, I think the first to start with the core, which is our stable coin network has really strong network effects. We have liquidity network effects globally. We have infrastructure network effects just in terms of where we're plugged in around the

Starting point is 02:44:43 world. There's tens of thousands of products and services that integrate to our network, really drives the developer flywheels. And so we're in a very strong position there. And we're taking that, and we're expanding kind of down the stack and up the stack. And I think in our view, you know, if you think about where we are in the evolution of this, you know, the global economic system is enormous. And we expect more and more of the economic system to, as I said, become machine intermediated on these new kind of economic operating systems.

Starting point is 02:45:11 And we're still at the front edge of that. You know, we have a market that really grew out of speculation on cryptocurrencies, and now we're seeing, like, more and more of actual financial contracts, actual, you know, trade flows, payments flows, treasury activities, investment products, lending products, all this is actually starting to come over, but we're at the front edge of that. And so I think our view is that there are going to be some very significant-scale internet platform companies built out of this transformation over the next five, ten, fifteen years. We think that these can be as big or bigger than prior internet platform companies that were built around, you know, centers of

Starting point is 02:45:49 gravity around search or social or mobile or cloud or e-commerce, we think that that's going to take place. And we think that we're in a very good position to provide really great infrastructure across those different layers. And I think if you look at what we've been able to do with ARC, even just getting to test net, the range of major firms from, you know, around the world that touch literally, you know, over hundred trillion dollars of assets, whether those are custodians, exchanges, clearinghouses, payment systems, et cetera, we're putting forward a model that we think can work for scaled

Starting point is 02:46:23 mainstream adoption. And so that's an infrastructure problem. And we're doing it in a way where we can build a distributed network of distributed stakeholder participation, distributed governance, and kind of bring that into the world. And obviously, that's what we're considering as we evaluate the design of an arc token as well. And then on the other hand, you know, we definitely see an application layer emerging on top of these platforms. And I think likewise, we're still in the early stages of the application layers being built. We are definitely taking a crack at part of that by building a payment utility, this CPN as a payment application. But we're designing it in a way where, you know, other financial institutions can use it,

Starting point is 02:47:06 benefit from it and generate revenue from it. We're not trying to compete with them as well. And so at every layer of what we do, we try and build kind of market neutrality and interoperability at the core, and that has served us well. I mean, one of the things we've pointed out this morning in the earnings call is, you know, we actually run, as of October, the largest cross-chain interoperability protocol in the world. CCTV, which is Circles cross-chain transfer protocol in October, was greater than 50% of all cross-chain traffic accounting for all assets across all blockchains. And that's really significant. We really want to be part of the solution to interoperability while we build at these different layers of the stack. We've had a number of conversations about the local regulatory environment, how that's changing recently. But what's going on internationally? Last time you were on the show, we talked about how part of Circle's Edge is having offices in a bunch of different countries and being set up to navigate what will ultimate, be unique regulatory environments in a bunch of different countries.

Starting point is 02:48:16 Well, it's been amazing, actually. Since the Genius Act, we've seen almost every major government in the world accelerating plans around building local rules around stable coins. We've seen, you know, for example, Hong Kong in August, when effective with their new rules, we're seeing, you know, regimes working on this from major emerging markets to some of the largest developed markets like Korea, which is accelerating their. efforts around stable coin rules, UK accelerating their efforts. So now everyone's sort of getting behind this model of private sector, you know, bank and

Starting point is 02:48:50 non-bank issued stable coins, clear supervision, usually supervision by the central banks, just like, you know, we're going to be overseen by the national bank regulator here in the United States. And so that kind of standard is cascading around the world. And I think also a lot of these regulators are looking at ways to support kind of, you reciprocity or kind of consistency as well. And so I think that's really important as we build infrastructure that we know that it'll work in all these different places around the world. So I would say the activity for us internationally has really, really accelerated, and you'll

Starting point is 02:49:27 see a lot more as well as we go forward. But I think, you know, the U.S. is actually really providing leadership right now in this whole area. And the rest of the world is taking notice and following. It's kind of a national competitiveness issue as well. Fantastic. Well, congratulations on a successful earning season. We'd love to have you back on the show soon. Thanks, guys. Have a great to catch up. Have a great rest of all. Likewise. We'll talk to you. Cheers. Bye-bye. Go bye. Before we bring in our next guest from the roost room, waiting room, let me tell you about fin.com. A.I. The number one AI agent for customer service, number one in performance benchmarks, number one in competitive bakeoffs, number one ranking on G2.

Starting point is 02:50:05 Our next guest is Vlad. He's building lighter. We have some big news. the funding sign. How you doing, Glad? Good to meet you. Welcome to the show. Welcome to the show. It's happening. How you guys? Can you hear me? Yes, we can hear you. Please introduce yourself, introduce the company for those who aren't familiar. Awesome. Yeah, good to be here. Actually, I think you had my former co-founder, Scott on a couple of weeks ago, who's not working on Cognition. Oh, Scott Wood. Of course. We've had them on a bunch of times. Oh, TBPN Hall of Fame. TBPN is made possible by Cognition.

Starting point is 02:50:43 The makers of Devon, the AI Software Engineer. We love doing ad reads for cognition. Oh, nice, nice, nice. Today, we're here to talk about you and Lighter. Yes. Exactly. So I'm Vlad. I'm founder and CEO of Lighter, which is decentralized exchange, built on top

Starting point is 02:51:08 of Ethereum. We can talk more about, you know, how we built it and why. But, you know, we've launched in January and kind of had pretty strong growth this year with our main net. And we actually did a public launch in, you know, October 1. But yeah, and I guess before later, I worked on lunch club, you know, with Scott. And prior to that, I guess I'm kind of like, like I'm not a crypto guy that got into finance. I'm more like a finance guy who took good detour to AI and then, you know, got into defy. Yeah. Talk about some of the some of the choices that you've made, like, like, why Ethereum compared to other, other chains, why decentralized exchange? Like, of the, of the technical decisions that

Starting point is 02:51:59 you made, I feel like we've talked to a lot of folks who have picked out different quadrants if we do a two-by-two quadrant or something like that. You've clearly landed in one particular piece, one particular spot on the market map. How would you describe the trade-offs that you've made? And then why did you make those trade-offs? Awesome. Yeah, that's a great question. And we actually started working on Lighter right around three years ago.

Starting point is 02:52:26 So, like, mid to late 22 is when we were thinking through that IDMAs, as it were. So it's interesting to, like, look back now. And the genesis of the idea, right, was that we were thinking about digital assets, right? Like digital assets have been around for 10, 15 years, right? Like they've been traded a lot. I mean, but most of them represent some kind of blockchain or, you know, decentralized protocol or like rails for the future of finance. But the weird thing was that like 99% of the activity of how they're traded.

Starting point is 02:53:05 actually did not use the rails of the stuff that these assets are building, right? It's actually trading in a centralized way. And like centralized exchanges have, you know, there's some good ones, right? You know, they, you know, I think some of them definitely have provided value to customers, but like at the basic premise, right, like a centralized exchange doesn't actually use the blockchain at its core to verify what's going on. And like in some cases, it's actually worse than TratFi, right? At least in Fratfire, you have, you know, regulations and the legal system to fall back on if something goes wrong.

Starting point is 02:53:41 Like, right, and we said the thing is that, like, actually almost three years to the day is when FTX collapsed. And we were looking at that when we were thinking about how to build lighter. And we thought, okay, well, now people will get it and, like, volume will move away from centralized exchanges after, like, one of the big ones failed. And that didn't happen. So what that taught us was that actually like the decentralized exchanges that existed at the time, like their product market fit was so bad that people would rather trade somewhere where there's like a one and six chance of the whole thing being a fraud than like using the decentralized products. So right, so then we thought, okay, well, this is something we should be part of the solution to, right?

Starting point is 02:54:22 And so for us it's like, okay, what we want to achieve is low cost, low latency, secure. verifiable and composable. And, like, the first three of those are pretty self-explanatory, but, you know, what does verifiable mean, right? It means that everything that happens, there's a cryptographic proof that it happened fairly incorrectly. And, like, why is that important? Well, if you ask the reverse question, like, what if it's not verifiable?

Starting point is 02:54:50 That means there's some part of the system where you're just like, trust me, bro, which is kind of, again, defeats the, even if there's one part like that, you know, like the whole thing could be, you know, manipulated or, you know, corrupted, right? So that's a problem, right? And then composable is also important because at the end of the day, we're not just trying to build a sandbox for people to speculate on. We want to build something that's composable with the rest of DeFi, whether it's lending, stable coins, you know, staking, you know, prediction markets, all this other stuff so that can kind of all work together in smart contracts. So anyway, so we had those five goals. And going back to your question, like, so Ethereum was the obvious choice for

Starting point is 02:55:29 the security layer, right? For it to be secure, we had a pretty strong view that the layer one that's by far the most secure out of things you can build on is Ethereum. Now, you know, we, Solana has built a great L1 as well and others have two, but, you know, Ethereum is like very secure. It's been stable for a very long time. So that was pretty clear to us. And yeah, we can dive into how we achieve the other goals. But as far as like, why, centralize and why Theorem, I think that that gets into those points. I don't know if we have enough time to go super deep into more of the technical side. I'm more interested to hear about how you met Ken Griffin, honestly.

Starting point is 02:56:13 So could you tell me the story of the Ken Griffin recruitment? I would love to know, like, how did he even know to reach out to you? What happened there? Tell me the full story, because I think that's fascinating. Yeah, yeah. So, and by the way, I'm, you know, also based in Miami now for the last five years. So, you know, not only did I learn a lot of stuff from Canada about finance and business, but also that South Florida is a good area. In that location, yeah.

Starting point is 02:56:45 Yeah, but, you know, so the, I guess, you know, the thing with my time at Citadel and, you know, so I was. 18 when I finished Harvard and actually even while a student. Let's give it up for finishing Harvard at 18. Congratulations. Continue. What's that account like VCs congratulating themselves? We're congratulating you. You just said a fact.

Starting point is 02:57:12 You just said a fact. But yeah. So actually like even at school, I did some trading and was working on kind of a side project with two friends around options. And so, you know, so I was doing that, and that didn't quite get off the ground. But I got to know the team at Citadel through, you know, essentially like the research firm. So, you know, it's not, you know, it's not like Ken personally gave me a call or something. But I got to know the team and they wanted me to join. And then kind of towards the end of the process, Ken got involved and spent a bunch of time with me, you know, to tell me more about.

Starting point is 02:57:54 what their high-level goals are at Citadel and their strategy and why it would be a good fit for me and kind of making sure that I'm comfortable joining them. And I guess without going to too much details, I mean, he made it a very attractive proposition for me and was pretty involved, you know, the first couple of weeks, especially of my work there. And yeah, you know, he's to this day someone I still look up to. And yeah, I mean, this is fascinating. He's going to There's just fascinating lineage here, obviously. Ken Griffin went to Harvard, was trading in his dorm room. It took him a couple extra. He didn't graduate at 18, so he sort of mugged him on that front. But then, of course, he had a deep relationship with Robin Hood. And Robin Hood markets came in and invested in this round. And so there's a whole bunch of like full circle moments. I did want to quickly ask if you think that the industry fully learned its lesson from FTX. because I feel like I've seen some chatter over the last few weeks around various exchanges saying, like, no, your funds are frozen, but don't worry.

Starting point is 02:59:04 We're working on it. And it's, you know, maybe sending some alarm bells. Right. So October 10th was an interesting moment for the space, I think, that actually Defi, kind of as a whole, worked well, right? whether it's AVE or morpho all those protocols and I think our competitors, you know, handled those market moves in different ways. But I think all of them in the context of DFI work the way they're supposed to work. You know, some of the centralized exchanges, I think maybe, again, like the problem there, right, it's like lack of transparency.

Starting point is 02:59:47 You don't really know, like, did they actually liquidate? their customers correctly or not like maybe they did right like maybe maybe everything worked exactly as expected but if it didn't there would be no way we would even know that and so i i don't i'm not aware of any cases of specific wrongdoing by centralized exchanges in that cycle but again with the lack of transparency there was no way i would know that and you know we we do know there have been some like blowups of kind of smaller uh hedge funds like on-chain hedge funds right And what ultimately caused those is unclear. But the one thing I will say is I remember after FTX, there was this whole thing about, like, okay, let's even centralized exchanges, that's, like, let's make them more verifiable and, like, prove reserves.

Starting point is 03:00:36 Now, of course, like, what does that mean? Because, like, you can prove assets, but how do you prove liabilities? But still, like, there was some push to do that. And I remember Vitalik had some ideas on how to do that. and Binance was looking into it and then like I think someone asked CZ about it and he was just like well Vitalik is very technical

Starting point is 03:00:54 some of the stuff is like too complex or something like that right so I don't know if the centralized exchanges have really truly learned there are lessons on that front but you know did anything particularly egregious happen that I know of October 10th like

Starting point is 03:01:10 I can't say that but again the you know the whole point is that you know it's supposed to to be transparent and trustless. Well, well, glad you're building what you're building. Yeah, well, thank you so much for coming on the show. And congratulations on the massive fundraise. Very excited to continue following the story as you continue to build this company.

Starting point is 03:01:34 But have a great rest of your day. Awesome. Hope you enjoy. Awesome. Thanks for having me, guys. Cheers. Come back soon. Have a great host to you day. Thank you.

Starting point is 03:01:41 Let me tell you about Adio, customer relationship magic. Adio is the AI Native CRM that builds scales and growth. is your company to the next level. You can get started for free. Also, I'm going to tell you about 8Sleep.com. Jordy's traveling, but I got a 91, 7 hours, 55 minutes. I'll give it to you. Let's go.

Starting point is 03:01:59 And our next guest is Andrew DeSuda from D'Souza from Bordy. He's in the stream waiting room. Welcome. What's happening? How are you? Great, great to meet. And welcome to the show. Kick it off.

Starting point is 03:02:14 Maybe with a quick intro on yourself, background, and then let's talk about Borty. Yeah, yeah. So I'm the founder, founder, CEO, creator of Bordy, the AI Super Connector. Borty is helping, you know, helping founders meet investors primarily, but connecting people for, you know, business and economic reasons. We've had, we launched a program about two weeks ago to try and get 100 founders to help close around.

Starting point is 03:02:37 We have 5,000 founders raising $16 billion sign up and 600 investors running about a trillion of capital who decided to get active. So. yeah, we've got, I think we've probably got about 10% of the active fundraising happening right now among founders that are working through Bordie, which is pretty exciting. Awesome. So, yeah, I guess, I guess, yeah, I guess immediate thought is with products like this, like one of the challenges is just like balancing the network, basically. And with Inventure, it's oftentimes the companies that have,

Starting point is 03:03:16 the most demand for their equity, or the companies that are, that are, you know, maybe performing the best, oftentimes don't need intros. You know, they're in the position of, like, saying no. How are you thinking about kind of like maintaining quality on the platform when you're a business and you want to be as big as you can possibly be? And I imagine you have a strategy there. Yeah, I think it's, that was something that I was worried about. This is the reason why we didn't start with the idea of connecting founders and investors. It just sort of happened organically. that this was the activity that was taking place. I've been shocked at the caliber of founders that have come in looking for help.

Starting point is 03:03:54 And I think as a CEO, as a founder, like your job is to create demand for your share. It doesn't matter whether you're Elon or, you know, Roy Lee or, you know, a YC founder. Like, that's your job. And you'll take all the help you can get. Most founders only raise capital, you know, two or three times in their life. And having someone that can help you navigate that, get the right introductions. I think there are probably 50 or 100 founders in the world. I think this is the reason why we talk about this sort of AI bubble right now.

Starting point is 03:04:23 It's maybe 50 or 100 founders in the world that every investor is chasing, right? Because that's the hype cycle. There's probably thousands of founders who have incredible businesses. We're talking to them that have incredible businesses, incredible metrics, and they're just, you know, they're not based in Silicon Valley or they're not, you know, straight down the middle pattern recognition. They're not based at all. I'm back.

Starting point is 03:04:50 They may not be based at all. Stupid. Good luck raising if you're not based these days. Yeah, that makes total sense. What, like, where does this go from here? This feels like a good early wedge, but, you know, hard to build a billion dollar business yourself just within, just within venture. So I imagine you have a number of other kind of pathways. or use cases for the for the kind of introduction engine or I don't know how you

Starting point is 03:05:22 yeah yeah we've built Bordia as like an AI board member so what is the most important meeting for the CEO to take at any time right is it a customer meeting are they hiring an executive are they trying to get on you know a podcast um are they you know like is it a big partnership is a corp dev um it happens to be that fundraising ends up being a high urgency place where you can build a great relationship. But I think of Bordy is an economy. You know, Bordy, every time you connect to people, there's some economic opportunity that is unlocked.

Starting point is 03:05:54 There's some latent economic potential. And we can financialize it. Yeah, I love it. It's actually what you're doing. It's true. It's actually good. Okay, can I give feedback to Bort? If I get an intro and I take the call and I'm like,

Starting point is 03:06:10 can I be like, yo, Borty, that never again, never again. Because we, I mean, everyone's gotten an intro from somebody and, and you're like, wait, why'd you make that intro? Like, I jumped on. They didn't know who I was. Am I on with the venture fund that loves firing CEOs? Don't introduce me to them. Introduce me to the friendly ones. Yeah, so how do you, how do you, because I can imagine that's like one way that you, you want to make sure, you want to get to the point where the entire industry is, is onboarding. Like every single founder, every single investor. But as an investor for an investor to, like, not churn. they need to be able to like give feedback and say like hey like this didn't meet this didn't meet my bar for a meeting I don't you know if you you know and if you keep sending people meetings or intros that don't meet their bar eventually they'll just say like I'm I'm gonna you know log off yeah yeah absolutely so so this is um this is one of the things we take a lot of we take feedback boardie has goodwill with people right so his idea the same way that if anytime I make an introduction I'm gambling goodwill I'm gonna if I make a bad introduction I burn some goodwill if I make a great introduction.

Starting point is 03:07:13 maybe I've gained some goodwill, and you're sort of doing that calculation at any given time. The version of Bordy, if you just sign up, you're talking to a low latency, relatively low cost. On the phone, on WhatsApp, you're just talking to, you know, the standard version of Bordy. What we tried to do, we had this experiment when we were running this fundraising thing, we said, what if you could remove the constraints of latency and cost? What if I could spend 100 times of tokens? What if I could let Bordy run for 30 minutes trying to find the perfect introduction and position you in the perfect way? Can I get better results?

Starting point is 03:07:42 And that's kind of what we're seeing. So now we've had 5,000, in Bordy's talk to 5,000 founders that are raising in 600 investors in the last two weeks. He has now picked the top 100 that he knows he can help that are going to be in demand from the investors in his network. And we put them into a shared Slack channel with us and Bordy and the founder. And we've now got those shared Slack channels with people and are like, hey, here's some investors, what do you think?

Starting point is 03:08:06 Get feedback from the founders. We're doing the same thing with investors. So the investors are sort of signing up and saying, here's a few founders that are raising, We think they'd fit your thesis, and Bordy's just learning. So you're like, actually, that's not a good fit. Or I've talked to this founder, more like this, less like this. And over the course of a couple weeks, we really dial it in on both sides. And we just make sure that you're spending time.

Starting point is 03:08:24 And it's less about capital allocations, more about, like, how are you allocating your time and attention onto the deals that are actually likely to materialize? As an investor, the deals are going to win, as a founder, the investors that are actually going to give you a term sheeting fund. That makes sense. What are some other kind of like types of work that you expect Bordy to do in the few? future. Yeah, we're already starting to see a lot in sort of corporate, you know, enterprise sales and biz dev and partnerships. It starts with the corporate venture capital arms. So we're getting a ton of corporate venture capital funds coming in. And now we're talking to their innovation teams. And it's the same thing. It's like, hey, look, I got to, I got to stay abreast of what's happening in

Starting point is 03:09:02 my industry. And it's almost impossible, right? Maybe I'll watch TPPN and see who comes on there. But like, that's almost too late, right? It's actually like, I've got to, I've got to see who's starting a company, you know, who's just being funded? Who is going, who do I want to be, who do I want to be tracking? And so board is starting to help with that and making those introductions. Hiring is another one that I think is interesting, you know, especially when people are passive. They're not actively looking. They don't want to take a bunch of recruiter calls, but they'll talk to Bordy. Like, I might start a company, but if there's a really great startup out there, I might join the team. And so those kind of conversations are quite interesting as well. But it's like whatever you would call your board

Starting point is 03:09:38 member, whatever introduction is going to move the needle for you that is worth the time of the CEO. That's what we want to work on. That makes a lot of sense. I'm looking for a board member who can take me on a track day. That's my only thing I want to get out of them. Take me to the track. Put me in a race car. It better not have a passenger seat and then get out of the way because I'm building on my own. Thank you so much. Yeah, I mean, that's a good challenge. Maybe that's customer development. Maybe once you get into the really high tier of boardie spend, you do a track day. Well, you know, so Nico Rosberg is a big boardie user. No way. There we go.

Starting point is 03:10:13 Oh, he's been on the show. Big time board a user. That's awesome. And so he could probably make it happen for you. Very cool. I love it. I like it. I like it.

Starting point is 03:10:21 It's one of those things that in kind of working on, when you describe it of just like a place that a founder can go to just get help with their business. It's surprisingly not something that nobody's made that pitch on the show to date, which is surprising because that's, you know, that's pretty much, you know, feels like very valuable to a lot of the companies that are coming on. Yeah. Fantastic. Well, thank you so much for taking the time to come talk to us. Congratulations and all the progress.

Starting point is 03:10:54 Yeah, great to be. We'll try out the product and we need to find, like, a guest. Yeah, that'd be great. There you go. I'd love to give it a shot. Awesome. Have a good one. We'll talk to you soon.

Starting point is 03:11:04 Cheers, Andrew. Goodbye. Let me tell you about public.com investing for those who take it seriously. They got multi-ass investing. industry leading yields. They're trusted by millions. I'm also going to tell you about ad quick. Out-of-home advertising made easy and measurable. Say goodbye to the headaches about home advertising. Only ad-quick combines technology, out-of-home expertise, and data to enable efficient, seamless ad buying across the globe. Our next guest is Paraggarwal from Parallel AI.

Starting point is 03:11:27 Welcome to the show. Parag, how you doing? Hey, hey. Hey, hey, good to see you next. There's so much fanfare. Are you, are you at a newcomer event right now? I am. I am. I get the step of a review behind you. Cerebral Valley AI Summit. Congratulations. What did you announce on stage? What are you announcing here on TVPN? I announced on stage that we just raised CDZE.

Starting point is 03:11:53 We gave $100 million from some of the best investors. Yeah. Let's give it up for the best investors. $740 million. Index Ventures. There we go. Got some spark capital participation. We love to see it.

Starting point is 03:12:08 Kostla is in there first round. to rate, wow, really, really, murderers row. Mahmoon, Ecliner is joining the board. That's exciting, that's exciting. Kind of looking like the Figma board. We got a good crew here. I like this. So take me through the actual company progress, the progress that unlocked this $100 million

Starting point is 03:12:32 series A. Obviously, there was some demand, there was some research progress. What was the shape of the data points that went in? to the ultimate deck that got this across the finish lines. So we got our first time two years ago. We started with this sort of find the sky idea that agents are going to

Starting point is 03:12:50 use the web and they're going to use them a lot. And we need to build new infrastructure for them. There weren't any agents around in that moment. None of them were using the web when we started. They were trying. Some of them were trying. Yes. And this year, like, everything changed.

Starting point is 03:13:07 Everyone's now building. an agent and every agent wants to connect to those. So the market just came alive, I want to say six, nine months ago. The most frontier customers started doing it's last years and became our design partners.

Starting point is 03:13:24 This year, the number of customers, the number of queries, the diversity of work, there's coding agents using us. There's people in sales, building agents using us. Finance, risk, compliance, insurance, health care, people doing scientific research agents, people in pharma and biotech

Starting point is 03:13:45 figuring out how to use web search APIs to build agents. So like it's a completely different world this year as it relates to agents using the web. So yeah, to make it super simple, people are using parallel web systems within, you know, maybe a SaaS provider is integrating parallel into their product so that if somebody's doing research, let's say, in a CRM on a customer, you guys can help them use agents to do a web search and fill in that CRM with data. That would be one example. That is a perfect example. You see this quite often.

Starting point is 03:14:22 Our products are APIs, our users are agents, our customers are people building agents. So if someone builds an agent to say, okay, I'm going to take your CRM and adds very interesting data to it so that you can take better actions. That agent the data will call our APIs in order to search the web, in order to pull content from the web, in order to get the highest

Starting point is 03:14:45 quality information to be able to fill up that it is. React to this post from Jim Kramer. He says, when I use ChatGBT, GBT, or the others, I can tell quickly that they won't pay up for good sources. We

Starting point is 03:15:02 all know this. So what's the point? They need to start paying newspapers and stop using bogus sources, we would never use ourselves. We need integrity, not volume. There's a bunch of ways you could read that. But my take was there is a data quality opportunity, especially in the enterprise, especially where willingness to pay is maybe really high. And so how are you thinking about making sure that parallel and the deep research API has the highest quality data forever? Perhaps I'm being partly, I don't always, the two things there.

Starting point is 03:15:46 How do you get the highest quality DPS search items? That is a lot of things. High quality data, authoritative data is a part of it. And then there's a lot of other technology we're building on top, whether it be at the ranking layer, the retrieval layer, the crawling layer, the reasoning layer, to get you higher quality D.P. Cigilins, I ask you to try our D3 research product and compare it to OpenE Eyes. And we win nine times out of ten.

Starting point is 03:16:10 So I want everyone to try that and tell us if I'm wrong. Go to the data question. I think there are deals being done by people. The world I don't want to live in is only Google and OpenEyes agents have access to some data. And most publishers don't get to make those deals. And most other agents don't get to have that access. That is the core mission of our business. We started building products for AI customers.

Starting point is 03:16:42 We've recently started figuring out what the incentives are for publishers who allow AI agents to use them, which will include payments, which will include other forms of value, which is transactions, and which will include distribution, which are the things that people care about. on the web. I've sort of having run Twitter before, I understand the concerns of someone publishing on the web and business models around ads are likely to evolve, and that's part of the reason we end up doing this company, because we think we have an opinion or two to bring to life

Starting point is 03:17:23 years. Do large revenue multiples scare you? No. Good. No, as long as you know what you're doing. There we go. Confidence. I love it.

Starting point is 03:17:39 Love the confidence. Got to be confident. Congratulations. But yeah, I love how the, even since the last, your last appearance, you know, the vision and opportunity just seems bigger and bigger. Totally. Yeah. Makes a ton of sense. Thanks for fun.

Starting point is 03:17:54 Yeah. It's great to have you back at this rate. I'm sure. Come back on before the end of the year. I'm going to ship a product in a couple of weeks and get it back. Fantastic. Hit us up then. Congratulations.

Starting point is 03:18:07 We'll talk to you soon, Prague. Have a good one. Thanks for having you. Let me tell you about Bezell. Getbezzle.com. Your Bezle concierge is available now to source you any watch on the planet. Seriously, any watch.

Starting point is 03:18:16 I want to do a lightning round. We got a bunch of posts. We're going to try and go through them as fast as possible. First, Brian Johnson does, did confirm. This is from Brian and Gorell. Brian Johnson confirms he was not one-shoted by a recent magic mushroom trip. You said if Brian Johnson comes out of this five-gram trip and says, Yeah, we're going to conquer death.

Starting point is 03:18:36 We're still on. Then he's certainly a true believer. What do you say? He replied to TBPN's post. He said, we're going to conquer death. So Brian Johnson is feeling good, looking good. Back on the timeline, not one shot, I suppose. One of the founders of Chad IDE says, he quoted my post and said, really great post.

Starting point is 03:18:58 However, it doesn't apply to Chad IDE for five steps ahead. Different plane of thinking. But really great posts. are reposting for visibility. Nice post a little bro. Nice to post, little, bro. I want to say... I think that's a pretty hilarious.

Starting point is 03:19:14 I did sneak a peek at your post during the show. And I don't think you got called Unk as bad as I expected. You made it sound like you were getting destroyed. You did very well. You got over a thousand likes. And people are like, oh, you're taking shots of Gary Tan. No,

Starting point is 03:19:30 Gary Tan chimed in. He said, good points. Big thanks. A lot of people a lot of people did identify that you were rage baiting the rage baiters, which is funny. I had to use their own tricks against them. Yeah, you did. I think in this case, you used the tricks for good, and I think it's a great post, and I enjoy. But, you know, maybe we have to have the, you know, there's always room for follow-up. Maybe we'll talk to Gary Tan later this week.

Starting point is 03:19:55 We'll get him on the show. Think about how he's thinking about the future of YC. Maybe we'll have the founder of Chad Labs, Chad, IDE, whatever. Yeah, we do. Ladd Labs. We will also be demoing the product at some point. I believe we'll be getting a preview of what the actual product is. If there's something awesome behind the scenes, we're going to tell you what that is. Let's also just love responding and being like, actually it doesn't apply to us. Or five steps ahead. Or five steps ahead. I mean,

Starting point is 03:20:22 that is just a complete Trump card. How do you respond to that? How do you? Levels. I think he wins. Much like Wander. Find your happy place. Book of Wander with Inspiring Reviews. Hotel Great a Man. He's Dreamy Bats. Top to your cleaning in 24-7 concierge service. It's a vacation home, but better. What is this? La Lamp. Introducing a La Lamp, says Shavir Charké,

Starting point is 03:20:43 an emotional and expressive robot to reshape our attachment to technology. Is this a CGI vibe real, or is this a real product? Do you have any idea? Who put this in the show notes? I put it in the show. Okay. Do you think this is real? It looks real.

Starting point is 03:21:00 Yeah, it looks real. It looks real. It looks pretty cool. I wonder, so would you buy this? What is the value of this? It's obviously very cute, very cool. It's the Pixar lamp, but it should exist, but why, what does it do? It's pretty cool, I don't know.

Starting point is 03:21:16 It's weird. It just feels cool. It's a cool thing to have. Put a speaker on it. I'm like 90% sure it's real. There was an Apple research paper that came out like, I don't know, six months ago. It was all about like expressive robots. And they had a bunch of demos and stuff on how they could build this stuff.

Starting point is 03:21:32 yeah it looks very exciting yeah well the website is uh la lamp dot com that's a good one l-l-a-m-m-p dot com you can pre-order it the lamp like follows around your cursor pretty cool website let's see what the checkout is it's only 50 bucks wow okay this is this is very cool uh i i have been uh delight baited i have not been rage baited by this i think this is a great great launch uh and uh and in other news uh jim kramer is posting about uh about quantum computing He says, Righetti, what an opportunity, Kaching, buy IBM. What does that even mean?

Starting point is 03:22:08 Kramer posts like a crazy amount. I mean, he's got 2.3 million followers. He's posting like every half hour. Like, he's a machine. He's going to be on the show in a couple weeks. We're very excited about that. I cannot wait. It's going to be a lot of fun.

Starting point is 03:22:21 Anyway, that's our show for today. I do not tolerate Kramer slander. Yeah, no, no, no. I think he. He's entertaining. He's insightful. he's controversial. He's a total package. We love Gramer here. He's great. Oh, there is a review from Andre Carpathie. I missed this one. Oh, there's a couple posts that I missed, actually.

Starting point is 03:22:42 Andre Carpathie says, I took delivery of a beautiful, shiny, new HW4 Tesla Model X today. I like this hardware four. He cares about the chip inside that thing. He doesn't care about what the light bar on the front is or the door handles or whether the doors go up. Andre Carpathic cares about the the GPU inside. So I immediately took it out for an FSD test drive a bit like I used to do almost daily for five years. Basically, I'm amazed. It drives really, really well, really smooth, confident, noticeably better than what I'm

Starting point is 03:23:13 used to on HW3, my previous car, and Elon's aeons ahead of the version. I remember driving up highway 280 on my first day of Tesla nine years ago, where I had to intervene every time the road mildly curved or sloped. Note, this is V13. My car hasn't been offered the latest V4. yet. On the highway, I felt like a passenger in some super high-tech maglev train pod. The car is locked in the center of the lane while I'm looking out from the Model X's higher vantage point and its panoramic front window listening to the incredible sound system

Starting point is 03:23:46 or chatting with Grok on city streets. The car casually handled a number of tricky scenarios that I remember losing sleep over just a few years ago. It negotiated incoming cars and tight lanes. It gracefully went around construction. and temporary in-lane stationary cars. It correctly timed, tricky left turns with incoming traffic from both sides. It's a glowing review, glowing review of Tesla self-driving from the man who basically invented it

Starting point is 03:24:15 and started the whole process. I mean, I don't know if he started it, but he was incremental in the development of it. So let me go out here. We also missed it, but OpenAI released GPT 5.1 rolling out to all users this week. Neer says ChatGPT is officially in its Fiji

Starting point is 03:24:36 phase now if you're wondering why the upgrade doesn't come with benchmarks. Have fun. Yeah, no benchmarks. So, yes, there's two models. There's 5.1 thinking and instant. So if you go to, like, the actual model router on, like, chatGBT.com or whatever, the only, like, there's GPT5,

Starting point is 03:24:53 which you can do pro, which is like the super long, almost like a deep research product. and then the rest of them are just the 5.1 thinking. But yeah, no benchmarks or like any kind of really technical report. In the blog post, it was a lot about the, like, personality of the model. She also released a separate blog post, like, on her substack. And there was some mention of, like, they're definitely, like,

Starting point is 03:25:24 they tried to address kind of the 4-0, like, one-shotting stuff. okay, we're definitely aware that there are some problems with, like, a very small amount of people becoming very, you know, addicted to the models. But yeah, nothing like very technical out of this. Like, it was only 1% of our user base. It wasn't 1%. Like 0.01%. Right. You're saying it was 10 million people that want to kill Rune. Rune up your security. Yes, please do. Anyways, we actually have to go over to Base, which is a conference hosted by my dear friend, Will Kofield.

Starting point is 03:26:04 So we've got to head over there. We're going to have a little chat. That'll be fun. More podcasting. Another two hours of offline podcasting. You love it. Cannot wait. Cannot wait to be back tomorrow.

Starting point is 03:26:17 Have a great rest of your day. Leave us five stars on Apple Podcasts and Spotify. We love you. Email at tbpn.com and we'll see you tomorrow. Goodbye. Thank you.

TBPN Live - Rage Baiting is for Losers, Everett Randle’s 5x Controversy | Jordan Nanos (Technical Staff, SemiAnalysis), Brian Halligan (Co-Founder, Hubspot), Dr. Fei-Fei Li (Co-Founder & CEO, World Labs), Scott Sanders (Chief Growth Officer, Forterra), Jeremy Allaire

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