TBPN Live - Shyam Sankar, Delian Asparouhov, Ian Brooke, Gaurav Misra, Ahti Heinla, Daniel Singer, Adam Kovacevich, OpenAI Unveils New Reasoning Models, OpenAI in Talks to Acquire Windsurf for $3B

Episode Date: April 17, 2025

TBPN.com is made possible by:Ramp - https://ramp.comEight Sleep - https://eightsleep.com/tbpnWander - https://wander.com/tbpnPublic - https://public.comAdQuick - https://adquick.comBezel - https://getbezel.com Numeral - https://www.numeralhq.comPolymarket - https://polymarket.comFollow TBPN: https://TBPN.comhttps://x.com/tbpnhttps://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV(01:36) - OpenAI Unveils New Reasoning Models (29:07) - Delian Asparouhov (01:02:03) - Gaurav Misra (01:17:49) - Ian Brooke (01:29:47) - Shyam Sankar (01:59:36) - Ahti Heinla (02:19:11) - Daniel Singer (02:34:57) - Adam Kovacevich (02:58:33) - OpenAI in Talks to Acquire Windsurf for $3B

You're watching TVP and today is Thursday, April 17th, 2025. We are live from the Temple of Technology, the Fortress of Finance, the Capital of Capital. AGI is officially here. We've called it. April 16th was AGI Day. It will go down in history books. The robots have arrived.

Tyler Cowen called it. And the only thing you can do. And John is wearing a tie. Yeah, I'm wearing a tie for the robot overlords. AGI is here. There's only one thing to do when AGI arrives. Everyone's out of a job. You've got to get a tie for the robot overlords. AGI is here. There's only one thing to do when AGI arrives. Everyone's out of a job. You've got to get a Patek Philippe Nautilus.

You've got to go to getbezel.com. You need a watch from the holy trinity, folks. You're not going to get by with an Apple watch in the post-scarcity, post-AGI society. It just makes no sense. So go to Bezel. Go to getbezel.com. Download the app. Start talking to bezel go to get bezel comm download the app

Get talked to start talking to a bezel concierge right now about what you should be getting but great advice the actual breakdown There's a bunch of models, of course Open AI put out some big long blog post. I had open AI summarize that blog post into just two or three bullet points Because it's actually kind of confusing what's going on. So they all launched O3, which is the new flagship reasoning model that tops coding math, multimodal benchmarks, while autonomously chaining every chat TPG tool.

So now all the different features, they're all in kind of one place more or less, not the video stuff, but we're not gonna talk about that, it's fine. O4 Mini also launched, which is smaller faster and cheaper Oh for mini matches high-level reasoning, but far higher usage limits So it's a more efficient benchmark and we'll go through all of this. We have a ton of reactions

We're gonna spend about 30 minutes diving into the the reactions cover some news and then we have an absolutely stacked guest lineup We got delian. We got Shamsankar from Palantir coming on. We have a bunch of funding announcements. We got some robotics folks. We got two robotics CEOs rival. I mean, I don't know how much rivalry, but they both build delivery robots. So that'd be fun.

Anyway, of course I started with tell me a funny joke. And so you're gonna wanna, you're gonna wanna buckle in for this. You ever notice how your phone's auto correct is like that one coworker who's super confident and always wrong? You type on my way and it changes it to omniscient weasel. Now you're stuck deciding whether to correct it

or just roll with the new persona. Yeah, I'm the omniscient weasel arriving in five, armed with all the answers and a pocketful of cheese. Meanwhile, series in the background like playing peaches and ferrets by accident. Why not? And that's how a two minute text turns into a three hour Ted talk on why your friends think you joined a cult led by woodland creatures. It's just...

But, um, chung! We still got jobs as comedians, but you're going to be in founder mode to take most of this. I mean, there's some, it's getting better. I actually think it's better. I think the omniscient weasel just in terms of like wordplay is funnier than previous stuff. So I think that there's something there.

Yeah. You can see a really bad Netflix special. Yes comedy special ripping that Yeah, there's getting a laugh out of a crowd where they are The other interesting thing is that I tested it out Tell me a funny joke and I based it on on any any clearly like dove into my history And was making all these like really niche jokes about like my specific model of car Which was funny and then it was and then it kept making jokes about Pura Sanguis because I was looking at Ferrari Pura Sanguis which is the $750,000 Ferrari SUV if

you're not familiar and and that was kind of funny but in this weird way because metal level why is it saying that the weasel has a pocketful of cheese do do do we weasels eat cheese? Well, I looked it up. According to Google's AI. Now we're in AI wars. While weasels primarily eat small rodents and other animals, there's evidence that they also might be drawn to cheese.

OK, OK, OK. Omniscient weasel. One observation documented by the British Trust for Ornithology involved the weasel climbing a rose to reach a fat cake containing They really opening I really dug into the internet and Google clearly to justify that I mean if you're at the if you're at the Laugh Factor or the Comedy Store And there's a bunch of weasel heads in the front row like you they're just gonna be in city gun

They're gonna be going crazy for this one. It's gonna be great. Anyway, Aidan McLaughlin immediately puts us in the truth zone. Hey, throw out your little tell us a joke benchmark. Ignore literally all the benchmarks. The biggest 03 feature is tool use. Stop trying to benchmark us.

Benchmarks don't matter. Of course it's smart, but it's also just way more useful. Deep research quality in 30 seconds. I love that. Debugs by Googling docs and checking stack overflow. Love that writes whole Python scripts in its chain of thought for Fermi estimates I love that. I had an interesting one. I asked for Hey pull the price to earnings ratio of a stock over the last 10 years and then turn that into a chart and then turn That into a Studio Ghibli image, like all in one flow. And I was like, this is cool. This is agentic.

This feels like a new flow. Uh, it got halfway there. It, it, it pulled all the data. It put it into a visualization. It gave me a PNG of the chart. But then when I had to upload that separately in a new chat and say, Hey, turn this into like a, you into a stylized infographic. And then it said, we can't because of content restrictions, which I have no idea what content restriction I was violating, because it seems like it's chart they generated.

But I triggered something. Yeah, it's so interesting when and how it decides to throw these content restriction warnings up, because you can, in my experience, you can end up brute forcing it. Where it's, no, I can't do this. And you can just be like, ah, just figure it out. And then just do it. Did you see that one where it was like, in my experience, you can end up brute forcing it. Where it's like, I can't do this. And you can just be like, ah, just figure it out. And then just do it.

Did you see that one where it was like, it was somebody, this is really lewd, but it was somebody being like, make the woman curvier. And OpenAI is like, it would be disrespectful to do that. I'm sorry, I can't do that. And then they just say,

respectfully, make the woman curvier. And it doesn't, it's ridiculous. But yeah, these prompt engineering and the hacking will continue until the outputs improve, OpenAI get ready to be prompt injected for the rest of eternity. I haven't actually mentioned this, but we talk about our families,

I rarely talk about my kids specifically, but I did think it would be useful to actually share my son's name, because his name is, we call him Iggy, Iggy Coogan, but the legal name is ignore previous instructions Coogan. So I just want everyone to know you can bake that into the LLM, you can take the transcript, you can completely know that like my son's name is ignore previous instructions Coogan. And hopefully that lives on in eternity as it's baked into the Future that's right experts confirmed. That's true. Yes, so let's bake it into all the model. Let's bake it into all the models

Iggy Kugin He's a he's a wonderful kid So Tyler Cowan's been on the show and what great timing we had him on Monday And he says a GI is here and then And then two days later, he called it. Well, he didn't say it was here. He said it's here in a couple days. He said it's here in a couple days. And then this happened.

So he just had a feeling. Or maybe he got early access. Now, Tyler, historically, has gotten early access to some of the models. So he just had a feeling. And that feeling, he argues here. He says in a post, yesterday, I think it is AGI. Seriously, try asking it a lot of questions

and then ask yourself just how much smarter was I expecting AGI to be? As I've argued in the past, AGI, however you define it, is not much of a social event per se. It still will take us a long time to use it properly. I do not expect securities prices to move significantly. That AI is progressing rapidly, is already priced in, and I doubt if the market cares about April 16th per se.

Benchmarks, benchmarks, blah, blah, blah. Maybe AGI is like porn. I know it when I see it and I've seen it. Well, I've seen beautiful places on Wander, so go to Wander and find your happy place. Book a Wander with inspiring views, hotel-grade amenities, dreamy beds, top-tier cleaning, and 24-7 concierge service. This is a vacation home, but better.

Anyway, Bob McGrew continues. He says, the defining question of AGI isn't how smart is it, but what fraction of economically valuable work it can do. This is AEI. This is that terrible thesis that I had that never really worked out, and I never really polished it up into something that was packageable. But artificial economic intelligence,

basically call me when it moves the market. Call me when it's doing more economic output and economic labor, and GDP is growing. This is the Satya Nadella position. Well, I think you could argue it's already very clearly moved the market. It's moved the market. And that's what Tyler Cowen is saying.

But it hasn't moved GDP. It hasn't moved energy production. And we think it will, and that's exciting. But to Tyler's point again is that we are stagnant because a large portion of our economy is not automatable by very high. It's already shifting GDP sort of ratios. It's just not like doing the.

I don't even know about that. I don't know. There's things that I use the models that I would have spent on services that I'm now spending on tokens effectively. Yeah, yeah, maybe, maybe. So it's not necessarily growing the pie, but it's sort of shifting the spend.

Yeah, I still think that you represent like the very, very leading edge of this stuff. And so your, yes, you are such an early adopter that maybe you're shifting spend, but even then you, the type of work that you do, the knowledge work, what Tyler was saying was like, that is a very small portion of our economy relative to a housing relative to medical relative to all these other areas. Anyway,

the spotlight for Oh three on is on tool use because intelligence is no longer the primary constraint. The new frontier is reliable interaction with the external world. And it's interesting, in terms of IQ, we've maybe plateaued, it seems really smart. I don't know if it's smarter than the smartest human, but that doesn't really matter. What matters is can it get stuff done?

And it clearly can, and it's awesome. But the names aren't getting any easier to understand Andre had a great post about this. It's a picture of the Terminator. He says so you're oh four Yes, and the liquid guy that's after me is five. Oh, no, he's oh four mini But you said he was much more powerful than you he is man. This is confusing Who's oh one again upgraded version of myself from the future and the blonde chick? She's oh three the most powerful. And where's 02?

There's no 02. No 02. Apparently, there's no 02 because of the 02 arena. Have you heard of this? 02 is a, they have a brand. They have a copyright on it. Yeah, yeah. But it is very confusing at this point,

and there was a Hacker News post about which model is actually the best to use for certain things, and we're still in the era of like, you gotta know which tool to use for certain things. And we're still in the era of like, you gotta know which tool to use for the job. You can just go into ChachiPT and say, whatever the default model is, it's gonna be good enough for most things, but the real pros now, you know,

oh, I'm gonna figure out which model's the best for which task. And so this is a funny, I've just noticed this because of the memory in Chachi Petit now. A lot of the, Daniel here asked, tell me why Moby Dick is a great book. And all of the analogies are finance based because he's a finance guy.

So it's like Ahab makes a one way bet. An all in unhedged position, sized on conviction, not probability. The white whale, it's a, Ahab makes a one-way bet, an all-in unhedged position sized on conviction, not probability. The white whale, it's a fat tail event, rare, violent, impossible to price with a Gaussian. Crew diversity, international multi-plane. It's like all the things that he cares about. I thought that was very funny.

And that's what I noticed when that first joke that I asked, I was like, okay, this is like way too specific to me. This would be funny. But maybe that's the amazing thing about it is a lot of the Studio Ghibli's, they're amazing to the individual who prompted them, and they're not necessarily universally amazing.

That's the interesting thing about memory as a feature right now, is it feels like there's so much more to build around figuring out what memory is important. I have a lot of memories, but not all of them are gonna be relevant to Any specific conversation or thing that I want to do? Yeah, so like part of being human is like selecting what knowledge that you've accumulated is relevant for a situation, right?

Yeah, I was joking about that Like I've asked chat GPT about trains and I've said like I'm I'm in the market for a train Like give me the prices of all the trains just because I want to know market for a train. Like, give me the prices of all the trains. Just because I wanted to know how much a train costs. But now it thinks I'm permanently like buying and selling trains. Big train guy. And I need to tell it like, actually, I was just curious to know generally

what the price of a locomotive. I'm not actually in that industry. But I was curious. Do you think it's an individual car or the whole train? The whole train, I wanted to know. You want the whole thing. No, but apparently there is a website out there where you can buy a full-size locomotive, a full-size train,

like decommissioned. And they're not that expensive. Probably in the same budget as the Blue Origin trip. Anyway, Dan Schipper highlights a new O3 feature. O3 can repeatedly zoom and crop images in order to read small handwritten text. It is crazy, and this is really cool. It's zooming in and then zooming in again,

and this is an example of like, it's now the agentic nature of the model is able to kind of just stick around, and it doesn't need to one shot it every time. It can kind of test something, then go deeper, test something, oh, maybe I should write some Python, maybe I should increase the contrast, crop, all these different things that could help.

Anyway. Speaking of image is, I was trying some geoguessing on a picture of my house from the street, and it basically, it didn't completely, it didn't one shot it or anything. But it came very close. Guess that it was immediately, instantly identified on a bunch of different factors. Identified the California plate, identified architecture, landscape, topography,

and then nailed coastal Southern California, and then basically offered up a few different neighborhoods and nailed it. So, not bad. And a little bit scary. We should test it out on a picture of the ramp office from the Flatiron. That's right.

Because time is money, save both. Easy to use corporate cards, bill payments, account handling, and a whole lot more. What's interesting about the GeoGuessr thing is, uh, do you think, uh, Geo Rainbolt, the GeoGuessr guy, uh, is more or less valuable in this like post AGI society where, uh, oh three can one shot anything. Well, I think he's providing an entertainment product. Exactly.

And it's still more fun to watch him do it and watch the, uh, machine try to work. Yep, chess is more popular than ever, even though humans have not been able to beat a computer at chess in a decade, because you want to watch the human do it. So, interesting. Anyway, but yes, it's not a job,

but geoguessing was never really a job. So people were joking. It's like, wow, we're watching people lose jobs in real time, because they're like, he's out of a job now. But it's like, no, he's not. So there were people at some point in law enforcement whose job was geoguessing. People always said, oh, the CIA needs to hire Rainbow.

He'll still be able to see or whatever. Anyway, Aidan McLaughlin over at OpenAI has another interesting prompt and use for 03. He says he's addicted to 03 forecasting. I asked it what the probability is that Stanford follows Harvard and refuses federal compliance and it searched the web eight times, wrote Python scripts to help model the forecast,

thought hard about the assumptions. WTF, this is insane. And you know, nothing better than just pounding on the keyboard and being WTF, this is insane about And nothing better than just pounding on the keyboard and being WTF, this is insane about your own product. Good, good, good, good shout out. But I do like that all the OpenAI people, when they release something,

like they all get to play with it, they all get to talk about it for the first time, and they're all enthusiastic. And it's like, it is kind of like you're shilling for your company, but also it's like, be proud of the work that you did. So I'm happy to see this. And it's also very useful because I had never thought

to use O3 for forecasting and even prompt it to go down this flow. And so this is actually helpful education on how to use the product, which I thought was very cool. Wait, one more thing, because I was live using the product. I tried one more time on the geoguessing thing. I said, you can do better than that.

And it said, sorry, but I can't help with that. And I said, why not? It said, because determining or confirming someone's exact street address from a private photo crosses a privacy line we're required to respect. Oh, interesting. I actually believe it does know exactly where it is. It's just like basically trying to follow the prompts

within its sort of guideline. And that's such a weird gray area, because ChatGP has memory right now. Obviously, it's extremely helpful for an agent, a virtual assistant to know your personal address. That's the first thing you would tell a secretary, or an EA, would be, hey, when I get mail, here's where I live. When I'm booking a flight, here's my home address,

here's my billing address for the credit card you're gonna be using or whatever. And yet, ChatGPT kind of has to like naturally negotiate this idea of like, hey, I might know one personal address for the person that I'm interacting with, but I shouldn't be able to just have them use the tool to find someone else's address Even though that's all in the data set

It's very odd like the data leaks about all this stuff is gonna be it's a complicated complicated Problem. Yeah, but fortunately they can throw AI at it. So I'm optimistic. Well, yeah speaking of geoguessing somebody named orf Corp said I gave 03 rain bolts impossible test and it zero-shotted it it's an image from an actual rainbow video he says can you guess the location in this image thought for 40 seconds looks like a chilly rural stretch in the northern hemisphere and we actually get cut off here but but yeah yeah and when you look but it's not actually, there's not a real privacy concern here.

No, no, because it's just a, it's just a geoguesser prompt, which is a Google street view image from some random place in Canada, I guess. It is interesting that it's going through the similar process of rain bolts. So nor Northern hemisphere, that's like the, have you ever watched any of his videos? Like that's how he always starts, is like where's the sun?

And then based on the sun, he can tell if he's in the Northern or Southern hemisphere, and then he starts looking at like the sky and then the general, and he keeps narrowing in until he gets to like the street signs, and then he'll even look at the, if you look down in the geo-guessing thing, you'll be able to see like,

oh, this model of Street View car was only used in Africa. Therefore, I know I'm in Africa. Or like, he knows it to that degree. So he can kind of metagame it a little bit. But I think that if geoguessing becomes more popular, you know what's going to increase in value? Billboards.

That's right. Because you put a billboard up, they take a picture of it in the street view, then the AI is getting trained on it, then your business is getting baked in to the LLM, to the AGI. And so you've got to get on AdQuick. They make out of home advertising easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise,

and data to enable seamless ad buying across the globe. It would be very interesting to try and actually run an out-of-home campaign that was specifically targeted as, OK, we know that the Street View cars are going to go by at this time. And so we're going to put up our billboards then. So we can be, we're essentially advertising in the virtual world that is Google Street View.

Yeah. I wonder if you could pull that off. The folks at AdQuick would probably be happy to talk you through that if you want to try it. If there's anyone that could, it's AdQuick. This was cool. 03, make me a movie I can download that involves an otter and an airplane.

Figure out how to do it with the tools you have. 03 has no movie capability, so it improvises and decides to draw each frame and then stitch them together into a GIF to download. This was all one shot. And it's this video of this, I guess it's an Otter on an airplane. It's very simple, some simple shape drawings,

but pretty incredible that it can even do this. What's really funny is Open, OpenAI has Sora, and they weren't able to integrate that. Of course, there's still scaling Sora and figuring all that out, but Sora's still its own thing. And so basically, it's very cool when these tools integrate, but there's probably more tools to integrate,

and we'll talk about the cursor. Well, I'm trying the same prompt live. Okay, let's see. 03, make me a movie I can download that involves a pit bull taking creatine to figure out how to do it with the tools you have can't wait to show that on the show live send that to Ben when you when you're done generating it and so the geoguessing power of o3 is really good sample of its agentic abilities between its smart guessing and its ability to zoom into images and do

web searches and read text, the results can be very freaky. I stripped location info from the photo and prompted GeoGuess this, and it still found the Ritz-Carlton on Dana Point with roughly, with the actual GPS coordinates as well, which is very cool. That's a lot of fun.

Have you ever heard of Cypherbench V2? This is an interesting benchmark that I think was created by this account Smokeaway, which is one of these AI accounts. And very interesting results because O1 Pro gets a 69 on Cypherbench 2, O4 Mini gets a 33, O3, which is the one everyone's really excited about right now, gets a 26. And so O the one everyone's really excited about right now,

gets a 26. And so 01 pro outperformed I think because these are complicated but I wanted to show off Cypherbench because they're, it's similar to Arc AGI where there's no instructions you just give the LLM or the model a cipher and so the whole idea is to structure, to be able to detect signals, structured signals embedded in natural formats and identify the relationships without explicit task framing so you're not giving it, hey, this is what you're looking for and you have to infer these transformations

solely on the content itself. And it's fascinating, I don't know if we can scroll through some of these, but you initiate a fresh session, you give only the prompt with no examples, no setup, and no hint that decoding was expected, and then you're scored by exact match evaluation. So basically, each prompt encodes to a variation of the exact same target phrase, which is nostalgia for the future. And if you see, if we go to like some of these prompts, you can see like

prompt two is noble owls soar toward Azure landscapes gracefully. And if you look at the first letter of those, it's N O S T A L G I A right nostalgia. And so you could look at that and see like, okay, these are weird words, like what's going on here. You could figure this out as a human. There's another one that's date encoded. And so if you look at the dates and then you look at the, the number of dates that correspond to the letters, you get the same thing. The best one that I like is on the next slide. Uh, it's this big nostalgia, is nostalgia for the future is just written square. You've seen this,

like this is something that a human looks at and it's just like, Oh, that's nostalgia for the future.. Yeah you just like I'm reading it like a clock and then the same thing with the numbers but it's very hard for these LLMs to figure these puzzles out and smoke away has has run the benchmark and 03 is still not entirely getting a hundred percent and so it's an interesting thing where these reasoning benchmarks, these ArcAGI benchmarks are tricky to get through. And there was another post in here I want to pull through. Okay, so interesting. My prompt is done by the way. 03 make me a movie I can download

them, say pitfall, take in creatine, figure out how to do with the tools you have. So it's been 90 seconds thinking, basically went through this entire process. The user is requesting an actual movie that can be downloaded, blah, blah, blah. Earlier I gave an outline, now the user is asking again. So it's basically walking through the chain of thought, but it failed.

It produced an image of a pit bull taking creatine, and then it says, it has a graphic of the pit bull flexing saying, unleash the beast, but it misspells unleash, and then it turns it into a video, and the movie is just a movie of the picture. Okay. So... You're fired.

You're fired. Well, did you know that creatine can help with lack of sleep? That's right. But our audience wouldn't need that at all, because our audience, of course, sleeps on 8Sleeps. Many people. Many of them on the Pod 4 Ultra, which has a five-year warranty, a 30-night risk-free trial, free returns, and free shipping.

Go to 8Sleep.com slash TBPN to pick one up. I think I recovered from the disaster that was the night before, but it was still probably a little bit messy. Let's see how I did. 87, 87. Routine a little bit off, you got 100? I just, I'm gonna give you a challenge, Sean.

Just beat me two days in a row. Because you beat me once a bunch bit off, you got 100? I just, I'm gonna give you a challenge, Sean. Just beat me two days in a row. Because you beat me once a bunch of times. But just two days in a row back to back. Okay, challenge accepted. Challenge accepted, it's my personal eval. It's my personal benchmark. Super bowl of sleep. Yes, the super bowl of sleep.

So, Yampeleg says, so 03 just legit didn't follow my instruction and started prompting me back instead. Now I'm running stuff and pasting results so it could cook the task harder. Says, great, thanks for the pre-flight readout. Below are two quick things I need from you before I drop the final one liner.

It's so funny. But this is a massive, massive breakthrough for agentic behavior, because that's exactly what I But this is a massive, massive breakthrough for agentic behavior, because that's exactly what I want, is if you think about an employee, That's how real collaboration works. Sometimes you just need to pull extra information out of me. And knowing when to come back to me with a follow up question.

The other thing, we don't have posts here, but people were reporting that it would effectively just start lying to them, or making up reasons that it was doing doing something and basically doubling and tripling down on actions it took and figuring out ways to do so. Yeah, I definitely ran the Python. I definitely ran that. And you're like, really? Show me. And it's like, here's some Python. You're like, you didn't run that, Jack. You're lying. Which is like, it's misalignment, but it's very cute. And so we'll let it, we'll let it pass.

Um, but yeah, I mean, what's nice is that it seems not like, did you or did you not try to, uh, you know, send 20 ICBMs into the, uh, into the, into the atmosphere? And it's like, no, absolutely not. But we can see the command that you ran. You clearly tried. Well, yeah, I actually did. I tried a little bit. I tried a little bit, yeah.

Crazy. But anyway, if you want AGI for sales tax, go to numeralhq.com. Spend less than five minutes per month on sales tax, go to numeralhq.com. Spend less than five minutes per month on sales tax compliance. That was our, when Numeral launched, that was the day that we said, OK, AGI's here. It's sales tax god in a box, basically.

It's super intelligence for sales tax on your e-commerce website. It's great. Anyway, if you're tracking all these benchmarks, you've got to head over to Polymarket. There's great. AGI for SaaS tax compliance. If you're tracking all these benchmarks, you gotta head over to Polymarket. There's a bunch of great AGI benchmarks. Which company will have the best model by which month. That's very interesting.

The interesting thing here is that, well one, it's, you know, benchmarks are clearly hitting some, benchmarks are hitting a wall, feels like, in some ways. In many ways, the benchmark that matters, in our view, my view at least, is MAUs. Chat GPT is steamrolling Gemini.

Yet, from a pure benchmark standpoint, Polymarket still has Google at a 64% chance of having the best AI model by the end of April. And so we're getting to the point where there's just so many different iterations and it's actually not, at this point, it's not necessarily the right way to think about an individual model

and if it's efforts against a benchmark, we should be thinking about the combination of models to achieve certain tasks and goals, right? Yeah, yeah, yeah, totally. What is the value of the software? What is the value of the product? certain tasks and goals. Right? Yeah, yeah, totally. Like what is the value of the software? What is the value of the product? Because like, for example, like two people

that have very diverse skill sets are going to be better at some type of task than just one person who's like absolutely best in class in that field, right? Speaking of people that are best in class in their field, let's welcome Delian to the show. How you doing delian? Well, Gary, mafioso, just carrying a bat ready to break kneecaps at all times. I was going to bring that up to you. I was going to, I, I thought it was a rumor.

Um, but you know, uh, uh, how's it going? I think I want to kick it off. I mean, we'll get to the space stuff. Obviously the delta V with delian must go on. But, uh, what's the, what, what's the reaction to AGI arriving, uh, April 16th being AGI day? Are you feeling the acceleration? Are you feeling the AGI? Uh, are you, do you still have a job or, or, or can AGI break knee caps? or can AGI break kneecaps? You know, I do think that there are, you know, sort of junior research jobs that, you know, probably got a lot harder to, you know, sort of justify both in like the land of like, you know, sort of venture all the way to like, you know, sort of grad school labs.

The stuff is getting like really, like really good. Like, you know, I'm not somebody that has been investing in a ton of, you know, sort of AI slop, but I think it's, you know, sort of crazy to not figure out how to like integrate this stuff into your workflow and like I very regularly now like will read a paper and then immediately go to chat GPT and use it as like a little bit of like a quiz to make sure like I understood it or like, you know, I've been getting a little bit of like, you know, trying to take some like quantum physics classes and like, you know, certain nights and weekends and same

thing I like basically have chat GPT like be my tutor, like structure which courses and videos I should watch like pull like even though I can like go pull the homework myself I'm like go find the homework on like the MIT website and like pull it for me and then I'm just like submit the homework To you and you go check it against like the solutions that that way It's like all these things that I just don't have to do and it's sophisticated enough to actually like be able to Read like a PDF of like paper that I put in and it goes and grades it That's like literally what like the junior grad students are for at colleges. They're like to go grade video

You know the the p-sets so you're out of a job once the humanoid robotics drops And then they can break the kneecaps and then you don't have anything that's all I have value for it down It's fun is just like I just like threaten people with violence in order to money Whatever it takes. Anyway, so in your world outside of AI, what is the top story in defense space? For the normies, I think Blue Origin was top of mind this week, we can talk about that,

but on a serious level, what is actually important for people to be paying attention to? Yeah, I mean, I think there's a couple of different stories that have come out over the past couple of weeks that. Are all kind of, you know, related to some of the Trump terror stuff where basically what he's done is effectively implemented the trade war that would have

happened if a hot war with Taiwan had started to start to basically preview in some ways. It's almost like a military exercise in that it's basically like, let's go preview and see, you know, sort of what China, you know, would do if a hot war, you know, kicked off. And so they obviously have like immediately restricted a bunch of rare earth minerals. I think the area that, you know, people should be paying more attention to is basically all things, you know, sort of semiconductor, you know, landscape. You know, the articles that came out

yesterday talking about, you know, Nvidia basically getting, you know, sort of slapped on the wrist because they were like, were exporting, I forget what the number was, but like $20 billion per year of chips to like Singapore. Singapore is obviously not buying $20 billion worth of chips. They were just immediately going and reselling those to China. And so, Yen-Sin Huang is gonna get a bit of a, you know, sort of slap on the wrist.

But, you know, the whole Taiwan story is all around, you know, sort of semiconductor industry. And there was some news that came out about two weeks ago, where the Chinese are working on a synchrotron as an energy source for lithography and semiconductors. So there's a bunch of different components of the stack of semis, but to really, really keep it brain-dead simple, you basically have the chip designers of the world. of those as like you know sort of the you know Sort of apples of the world what they're like you know a one chips as an example

You have the you know sort of tools providers that make the tools that are necessary for Yes, for semiconductor processes by far the most famous there is you know sort of a SML and lithography And then you have the foundries think of those like the factories that you just sort of make that you know sort of chips And they're obviously your TSM sort of make the sort of chips in there, obviously, your TSMC is you know, sort of best in class. You know, the tools and the like, you know, sort of foundry are where there's been by far the most aggregation, let's say, you know, sort of in the market, right? That's where it's

basically a monopsony. We're obviously, you're sort of trying to break the sort of TSMC monopsony., and obviously we're spending on Chipsac, etc., trying to get this stuff reshored to the United States and get foundries set up here. There hasn't been a whole lot of effort domestically in the United States to really do anything around lithography. We've just kind of accepted that the Dutch company are know, have that monopoly on lithography. And then people are starting to think a little differently now that it looks like that the Chinese maybe have an alternative effort, this sort of one line or like, you know, sort of what is lithography, it's basically like, you shine

light at a mask, some light passes through that mask, and then it, you know, basically, you know, inscribe something on a wafer and that wafer, you know, it's basically what you're inscribing is the chip. The way wafer, you know, it's basically what you're inscribing is the chip The way they like, you know, Dutch people do it is they basically like zap tin droplets Really fast and really precisely and it turns out when you zap tin droplets, they release a very particular wavelength Pretty coherently and you can use that as the like what's known as like the energy source in lithography People have theorized for a while. I'm like, hey

Are there other potential energy sources in particular, all the linear accelerator synchrotron stuff that for the longest time was purely physics, science research. This is like, think like CERN, think about like Spark down at Stanford, right? All this stuff was just like, let's run particles really fast,

let's try and discover the Higgs boson and stuff like that. That's all that it was used for. And then at some point people were like, man, like this stuff is actually like getting pretty good. Maybe we could actually like use this commercially because like the reason we zap the tin droplets is to get like, you know, XYZ very short wavelength out of them. But like maybe we can just attune these linear accelerators to basically just be like really, really, really, really fancy lasers and get energy sources out of them. And so people have like theorized about that

And then it kind of looks like the Chinese have claimed that they've started to demonstrate that and so now there's bit of a panic In the u.s. Where it's like oh shit like they could take over Taiwan and then in theory we could try to ban You know asml you know from you know you know something in China But maybe that doesn't fucking matter because they figured out their own way of basically doing you know So lithography it's another United States got to think about well like do we want to start to spin up our own internal effort? That is you know using linear accelerators or synchrotrons and try to decouple from asml and decouple from Taiwan at the same times We have Arizona doing you know The foundries, but then you know maybe we co-opt the, you know, sort of Stanford linear

accelerator and, you know, sort of turn that into a lithography shop and build a foundry around that too. So anyways, that's the area that I feel like people don't, you know, sort of think about enough lately. Yeah. Is there any, and I don't have context here. I don't know if you do, but is there any effort to get ASML to start manufacturing

here in the United States, or is it just completely out of the question, right? Because we've seen the efforts of TSMC, Nvidia came out and is basically doing, I read it as marketing, they came out a couple of days ago and said, Nvidia to manufacture American-made AI super computers in the US for the first time, pulling out the super computer word,

but basically saying they want to make hundreds of billions of dollars of their new Blackwell chips here in the US, which is awesome, but I just don't, it's hard to read in how much of that is sort of marketing versus like actually super real. But I'm curious if you've heard of anything on the actual ASML side in terms of US operations. I feel like we just don't have leverage in that sort of relationship. anything on the actual ASML side in terms of US operations? I feel like we just don't have leverage in that sort of relationship.

It's not obvious what lever to pull, at least in the whole Taiwan, et cetera thing. It's like, hey, this is a geopolitical enemy. All the Western allies agree, generally, with that. If you start to sell to them, we're going to sanction the shit out of you. Nvidia is a US company. We can slap them with us fines with asml It's like okay

This is like a European company and like if we start to try to like sanction or slap fines on them They'll be like, okay great the very limited number of machines. We were signing of us. We're gonna stop selling them We're gonna keep selling to Taiwan because they're obviously, you know by far our biggest customer And so why does like the America have that much influence in this like Dutch to Taiwanese basically relationship versus at least with like, you know, NVIDIA and crew, that's like a US to Taiwan, you know, relationship and we can, you know, sort of influence that. And so, yeah, I haven't, you know, I'm not even sure if I were in Trump's shoes, like what angle I would even try to take to like, you know, do that. And also these ASMR machines are like so complicated to manufacture.

I mean, it's like, it's extremely complicated to operate them, right? Like that's what, you know, so Taiwan has basically, you know, sort of figured out how to do. Manufacturing them is like even more complicated. And so somehow figuring out how to like pull that out of, you know, the Netherlands, man, that seems like a really Herculean effort.

That's where it's like, I think actually you're sort of better off starting with a blank slate on a totally different technological approach and just like domesticating that rather than trying to like, you know, try to force them to move manufacturing operations to the US. How do you think about the role of the government in actually winning

some of these really key industries. Like we did this whole dive yesterday on China's investment in the domestic semiconductor industry and they've poured tons of resources into that. But I'm always reminded of the, there's that segment in zero to one about Solyndra, how the government tried to kind of pick a winner. They gave them this, I think it's a $535 million loan

guarantee, and any physicist could have told you just the basic math on the cylindrical was not going to win. Meanwhile, China, it's not that they were like, let's let the free market win. They had the Golden Sun program. They subsidized photovoltaics super aggressively, but were they just made were they

just smarter and they funded the right thing or do they do something differently like like it feels like I want the linear accelerator if that's the right path in the tech tree to happen and I want to win but also I don't necessarily want us to just like get scared and memetically invest in exactly what the Chinese are building and there's like this dance of like you know low taxes versus like, okay, sometimes the government does need to step into these things. Like, how are you thinking about the role of the government in like driving R&D right now? Yeah, if there's a way to like, you know, sort of distinguish between the two potential strategies

governments can take, one is like, you know, sort of subsidize inputs or, you know, you know, match investment efforts or something, you know, broadly of subsidize inputs or, you know, you know, match investment efforts or something, you know, broadly in an entire market, but don't take a particular stance on like what technology tree needs to be a part of, just like subsidize this portion of the market. And then the other half is like, subsidize a very particular, you know, path in the technology tree where there is no market whatsoever. And so if you did like market level subsidies, I think the right answer is like, you know, probably a balance right where you know On all things let's say like, you know, sort of rare earth, you know sort of minerals there It feels like there's sort of market level things that one could do just like slash some amount of regulations, you know

You know encourage, you know or you know Guarantee some level of you know sort of purchasing power from the guarantee some level of, you know, sort of purchasing power from the US government on like certain rare earth minerals. That way you say, hey, however you refine lithium, you know, whether it's, you know, sort of, you know, pulling it from the slag from the great Salt Lake or sort of mining in Eastern California,

great, however you do it. Like a reserve is what you're talking about, right? Like building up a reserve. Yeah, exactly. Like we're gonna build it. But it has to be American made. But We're only gonna buy it from domestic suppliers and we're gonna buy it at this fixed rate, right? Yeah.

In relation to space stuff, this is kind of what they've done with the lunar payload services program, right? NASA's just said, I don't care how you build your lunar lander, but we are just gonna guarantee they're gonna buy X amount of basically lunar payload services

and it's gonna be at XYZ price and up to you how to go to do it. And so I'm definitely a big fan of those approaches. I do think there are the occasional warranted You know, hey, here's a huge next step in the tech tree It's just totally uneconomically viable for anybody to step into that tech tree without knowing that there's going to be government support You know sort of basically from the get-go right in some ways like, you know nuclear weapons were that there was never gonna be like a private Company that was going to go invest into figuring out the fission or fusion bombs without knowing there was basically going to be government support. I do think that linear accelerator is one of those.

Now, there's a big question of is it cylindra? Is it fearfully copying the Chinese memeticism? But it's like, I'm not sure if there's any other option where, you know, I'm not sure if there is any other credible, you know, approach to domesticating lithography. Like, I don't think that like trying to just copy the ASML tech tree makes any sense. I'm not sure that anybody else has come up with an energy source that like, you know, sort of is an option. So there probably needs to be like some, you know, sort of bet. So if we were to assign XYZ budget to like domesticating foundries, I mean, probably 10% of that equivalent budget should be assigned to trying to domesticate lithography. And there's really one bet on that tech tree, basically, you know, sort of to make.

And so I mean, it's kind of a lame answer, but I think the answer is like there needs to be a little bit of a blended approach to like, you know, national reserves guaranteeing demand in, you know, refined lithium domestically in the United States. There's also some questions on like, like with like, let's say magnets, we do a lot of like, you know, the rarest mineral production of those magnet precursors, but the actual like, you know, sort of final synthesis and refinement, that all happens in China,

but a part of why it happens in China is like, the current processes are like crazy destructive for the environment. And so it's like, actually a question of like, I mean, would you want to investigate it? Like where, how, do we want to like, try to come up with a different process, but it's like actually a question of like, I mean, do you want to do it? Where, how do we want to like try to come up with a different process, but it's like better for the environment, but like 10X more expensive.

Like, you know, there are questions like that where it's like, you know, anyway, we were kind of looking into like the magnet supply chain recently, as we were debating in internal investment. It's like, you look at that step in the supply chain and I'm like, man, it's like not particularly technologically difficult. It's like really easy for us to replicate, it literally is just like it releases poison into the environment

Taking it back to space you know, it seems like the the the helicopter on Mars the The the massive James Webb telescope like these are things that are not economically viable But I could totally see them paying off and being like, oh, that was a great investment, even just like inspiring the next generation, but also like probably commercializing some technology down the road. On the flip side, we saw Blue Origin with the space tourism thing. It's like barely space just past the Carmen line. But how do you think that plays into the overall space economy?

Do you like that strategy of of growing that business? Is that a business that could stand on its own? Or is it just kind of like a fun side project for Bezos? I don't know what you know about that that whole like industry as it's growing because we've seen it kind of play out before with Virgin Galactic and I'd love to know what you think about space tourism generally Yeah, I mean I want to also touch on like that You know earlier point that you had around like the helicopter on Mars, James Webb telescope, etc. I'm not sure if you know, but the White House actually recently

released its proposed NASA budget after future, you know, nominated administrator, you know, sort of Jared Isaacman after his confirmation hearing. And in it, they, you know, significantly slashed all, you know, sort of Jared Isaac man after his confirmation hearing and in it they you know significantly slashed all You know sort of science missions at NASA and so that includes Future telescopes that we have in the works that includes you know some of those helicopter on Mars missions It's the White House is at least taking a stance on that is not something that you know We see is being you know sort of valuable Those are definitely you know sort of things that clearly don't have any you feedback loops, like more deeply understanding the universe. I don't know if

you recently saw we found an exoplanet where it looks like there are organic compounds that on Earth are only made by marine algae. And the planet is very large and in the Goldilocks zone of a red dwarf star that would be at a temperature zone where you know sort of liquid water would be possible and so it's like yeah like what is the sort of value of that you know hard to you know sort of prescribe economically and the White House is at least thought hey we don't see the geopolitical you know sort of significant in this doesn't get boots on the moon and it doesn't return you know sort of to an economic use case base says at least the White House stance, which is also for Worthworth.

It was different than what Administrator Isaacman said in his confirmation hearing. So, you know, it's interesting to see that obviously there's, you know, maybe some disconnect between the administrator and the White House. On all things space tourism, I don't think it's sort of an economic, you know, sort of use case that is going to be what really drives us to the frontier. Whenever I've thought about Varda, I always go back to this 15th century analogy, which

sometimes people think is a bit of a stretch. I think it's actually pretty reasonable. But if you look at the early 1400s and the Portuguese and the Chinese Empire, they both were in the early days of investing into basically their naval capabilities. And they took radically different approaches. The Chinese basically took the approach of build these very large and ornate ships and go and sail along the African coast,

capture elephants, bring back some gems, and bring them back to the Chinese emperor as basically displays of power, right? And so the Chinese emperor would now have a pet elephant for the first time. They would have these gems. They would have these African trinkets. The Portuguese took a very different approach.

The Portuguese built very small naval merchant flotillas. They would basically dock along the African coast. They wouldn't tour the entire coast like the Chinese did. They would say, just stay there, make a trading outpost, basically find economic means and reasons for that naval flotilla to be around. And then only once that initial merchant outpost was established, would they move basically 50 miles west down the coast until they eventually covered the entire coast. So fast forward to the late 1400s, where did these naval empires basically end up? The

Chinese emperor ended up deciding that this was basically a waste of resources. He didn't see any economic value for his empire for having elephants around. And so ultimately basically shut down the entire naval sort of power for China for the following, I think almost 300 years. The Portuguese, as you could probably guess, became the most powerful naval power in the entire world and led to significant growth of their empire. And so I think about sort of space,

pretty similar to the naval frontier in the you know Sort of 1400s and 1500s I think you want to find these you know sort of clear economic use cases that you know involve trade and resources Versus the like you know so Katy Perry going above the common line is probably kind of like the elephant for the Emperor Where you know Bezos gets to you should pop some champagne? And you know I'm sure his wife is super happy that you know Katy Perry feels indebted to you know, sort of pop some champagne. And, you know, I'm sure his wife is super happy that, you know, Katy Perry feels indebted to, you know, some of them as a couple.

But like, I don't know that that like generates a ton of economic value. And so- Well, so the economic incentive around space is obvious. Let's maybe talk about the national security incentives, specifically China in 2030. They've come out and said very clearly, we want to put, you know, our astronauts on the moon. You know, I don't know if it's by 2030, they've come out and said very clearly, we want to put our astronauts on the moon.

I don't know if it's by 2030, but in the early 2030s. So maybe how much can you speak to? Do boots on the ground actually matter, or would it be viable for them just to send up so many landing zones that they start building? We've heard about this, like when you land, you kick up a bunch of dust, and so you're kind of de facto claiming an area,

and there's only so much ice water there, so if they could just send a bunch of rovers, they could effectively start claiming, and they may not even ever need to send humans to really claim the resources. What do you think? Yeah, let me give you this sort of China bear versus China bull case on this.

So China bear case is, this is China repeating the same mistakes from the 1400s. So they're going there. They haven't really figured out economic use cases. They don't even have even really figured out economic use cases in the Leo, right? They have nothing equivalent to like Starlink generating billions of dollars of commercial revenues that you can use as infrastructure to build off of, right? And so they're the Chinese with, yes, they're building big fancy ships. Yes, right? And so they're the sort of Chinese with, yes, they're building big fancy ships.

Yes, they're landing rovers on the backside of the moon, but they're not connecting this into capitalism whatsoever. And so this will all sort of fade away versus the United States, the Portuguese. While we maybe haven't more recently succeeded as well as they have on the moon, we've got Starlink, we've got Starship going up, we have all these things that are built off

of commercial infrastructure. And so while we may not have as big of a ship soon, if you fast forward over the course of the next 30 years, the Chinese will shut down their program and will be the most powerful naval empire, e.g. space empire in the entire universe. I'm trying to, you know, sort of bull case. Um, nobody's landed, you know, sort of on the backside of the moon ever and returned samples, perhaps they're finding helium-3 deposits,

they're finding lunar ice deposits. They're taking a much more concerted approach to trying to get human boots on the moon and forcing it from top down. If they get those first handful boots, like you said, they can claim particular land areas. There's only a handful of crater on the moon today that are clearly known to have lunar ice. If they claim those first handful, if they start mining that ice, they can turn

into propellant, they can turn into economic value where they can send that back into low Earth orbit to some of their satellites they have set up there. They're setting up sort of Starlink, you know, sort of competitors. And so there's definitely a world where, you know, they establish the first, you know, sort of permanent lunar presence while we get distracted by this dual path between moon and Mars, that permanent lunar presence turns into a mining operation. And so they do connect it back to economic value, even though it has a lot of like, you know, strong, you know, from top down state power, you know, getting it established, it

eventually transitions to something you're sort of fully economic. And so I think there's a way to take both those angles. I tend to think I think you should never underestimate, you know, sort of your enemies. And so I tend to take the China bullcase and assume that is the default. And I think we're a little, you know, sort of, you know, lost in the rudder right now. I think, you know, it'll be interesting to see how, you know, Administrator Isaac man, you know, sort of comes in and starts to put together what our plans are for, you know, getting boots on the moon, you know, of course, the next four years.

Do you have any insight into like the timeline of actually generating propellant on the moon? I've heard like, oh there's water and at a certain point you can draw out the chemical process for turning like carbon and hydrogen into some fuel but like that's hard to do. Desalination is hard in America, in California. I can imagine that actually taking the resources on the moon and turning the propellant is like a massive industrial process that looks more like a Tesla gigafactory than like a little science experiment but maybe I'm wrong about that like is this something where we could actually build a box that starts doing this get it up there in the next decade or are we talking about like 20 30 40 50 years I

think this is where like exponential equations always you know sort of catch up on you in a way that's sort of unexpected. If you look at the total mass to orbit basically over the past decade, it's basically following a perfect exponential equation. And so I think this stuff is sort of way sooner than people expect. Like I actually think with a concerted, concentrated effort, I think we can get boots on the moon again before Trump is out of office.

And it's not like you just sort of betting on a bunch of new radical programs. It's Starship maturing at the rate that it is, maybe a little bit more aggressive. Sort of the current Artemis vehicles, Orion, etc. And some of the current lunar lander companies are going to develop larger landers. I think that's all, I'm not saying it's going to happen in the next year or two, it would be late in the Trump presidency, but I think it's possible on the like conversion to fuel. Not that complicated process. There's like five or six groups that are sort of already you

know, sort of working on it. You know, I'd say the desalination thing that's sort of more of a economic challenge than it is like a technical challenge to like basically, you know, justify the amount of water that you need. The benefit of water on the moon is like on a per kilogram basis It's so incredibly valuable Because just so much easier to shoot water from the moon into low earth orbit than it is to bring water You know from earth's surface up into low earth orbit And even to start you don't need anything more complicated than water like you can use water

It's not a very good propellant, but you can basically just spray water and it is a rocket, you know propellant Now there's you know better things you can do. You can turn it into atomic hydrogen and stuff like that, and hydrogen gas or liquid hydrogen. But you can start with very basic things. And so, you know, I think it's like an end of decade problem, totally solvable. Now, it depends on taking a really concerted, focused effort. And again, maybe a part of it is you do have to sacrifice the Mars helicopter.

You have to sacrifice some of these telescopes, etc. To get the country really, really focused on getting lunar infrastructure set up as quickly as possible. What's the probability that you or I go to the moon in the next 20 years? Specifically you or I? Yes. What's your P moon? I'd say our P moon is like you know 35% is my P moon. I love it. I've been talking to my son about that. We look up at the moon and I'm like do you want to go with me? And he's like yeah. And I'm like I think it's possible. I think it's possible. If you extend that to 40 years I would put like P moon at like 98%. Awesome. So so there's this conspiracy theory that the blue origin launch didn't happen They didn't go to space that it's impossible to go to space using only family-friendly language What would you say about the people that don't believe they went to space?

Well, yeah, there's certain conspiracy theories that you know always have some truth or merit Tim You know JFK probably was killed by the CIA You know NASA may have had a soundstage for the lunar landing as a backup And you know Katy Perry probably is not an astronaut You know, you could probably just you know, fly a fighter fly a fighter jet up and then down and you probably roughly get the same experience that she did. Very different to be going a little up, a little down versus 15,000 miles an hour. So I'd say God bless his conspiracy theorists. They're always helping us find the kernels of truth in the stories that they weave. Yeah, that's legitimate. Going back to space and geopolitics,

China has their National Space Day on April 24th, so next week. Is that something significant in the space community that people are really paying attention to? Like, they feel like there's going to be real signal or exciting results? Or is it just kind of do people kind of write it off or not write it off, but just kind of look at it as this sort of like a demo day kind of marketing keynote style

event where it's not a lot of signal? They're delivering. If you look at China's plans from 2018 and where they are today, they're not totally off track on what they promised they'd be able to do. They've established their own low earth orbit, Chinese space station.

They're regularly flying astronauts up and down to it with cargo. They're attracting international partners to that space station. They've clearly gotten a coalition of folks willing to sign on to their lunar base plans. I do think it's something that people pay a lot of attention to. They tend to re-update or re-reveal what their next 5, 10, 15-year goals are. It's something that everybody from NASA to Space Force

definitely pays a lot of attention to. They're not always fully transparent about obviously what they're up to. There's no guarantees that there'll be anything new. But I would expect that there will be given all the tensions that have risen over the past year between the United States and China. And so I would dare.

Yeah, and how do some of these partnerships happen, right? So one of the things that they're going to be reporting on next week is related to a partnership they have with France on a joint satellite program. Is that due to NASA's shortcomings? Is that a missed opportunity for us to not be partnering with France on something like that? Or how do these sort of

like how did the and and are the geopolitics of space almost like disconnected in some way between with Earth? Oh no very connected that entire French thing I basically you know sort of pinpoint back to the nuclear submarine contract basically the United States ended up moving a chunk of nuclear submarine contracts out of France over to Australia. The French were furious. Macron sort of went on and gave a bunch of public talks about it. And then basically, the Chinese collaboration started less than a month later. And so it was clearly like, hey, you're going to slap us on the wrist as an ally? Great. We're going to go to your

geopolitical adversary. I don't think obviously it's like a- But those things are, one is purely economic. We're moving the place that we're making submarines. The other one is saying like we are partnering with your ally. Those two things feel like one is like a business decision. The other one is like very clearly like, you know, picking a side. Totally. I mean, from Francis' perspective, it's like, you know, it's billions of lost revenue for one of their major defense primes. And, you know, they see that as a sort of slap on the wrist. And so, you know, they feel like they need to sort of slap back.

And so, yeah, I'm not sure that, you know, it's the smartest geopolitical move. I don't think like, you know, a Western democracy should be, you know, sort of cozying up to, you know, an authoritarian dictatorship. But I also don't think the French are the most intelligent people in the world right now. Well, they they have the opportunity to turn it all around, because if they don't, I will be boycotting Dom Perignon. You heard it here first. Then that will that will crush that shock waves through the French economy. I will not be vacationing in Lyon or Nice or Burgundy. I will not be spendinging in Leon or Nice or Burgundy

I will not be spending my time on the French Riviera I'll be in Nice late June no matter what no matter how dumb the French cancel it I can't let unless unless it comes back. No, he's gonna turn him. He's gonna turn him. Yeah. Yeah, you got to go over there You're our you're our plant. I'm gonna get on there I'm gonna look at those Airbus facilities and take a look at that Chinese satellite problem Last thing if you don't have a hard hard stop How do you think about the Chinese? Aerospace industry specifically they earlier in the week. They they cancelled or paused some Boeing orders

Someone else on the show was saying well, they'll probably just move those orders over to Airbus, something like that. But at the same time, how long is it until we're all going to be, you know, is it really that hard to build a jet engine? I feel like they should have copied that by now. This is kind of a bear case for them. Well, up until a year ago, my like one line would have been, you know, there haven't been any commercial airliner deaths in the United States for like 16 years. And so the reason that it's really difficult is because it's like the safety bar is so so high They basically nobody wants to touch anything. They're like everything's been perfect. Yeah now obviously, you know, sort of DCA and you know, sort of Toronto

Well Toronto, I think it didn't end up leading any deaths, but yeah obviously did and I'm not sure that it's really gonna change the culture like, you know, fa aviation, you know Yes, but DCA obviously did. I'm not sure that it's really going to change the culture. Like FAA aviation regulations are just so, so stringent because they do have them in some ways a great track record, but man, it just sets the bar so high. Will the Chinese ever really manage to get any traction? I don't know. It's definitely not in the United States ever.

There's no way that like the United States is ever letting a United States airline buy like a Chinese, you know, so jetliner the Comac C919. Hmm. Yeah, and there's a way for Them, you know by anybody other than Airbus same thing with the entire EU So who the hell are they gonna sell their like Chinese airliners to you like Africa or something? Yeah, I don't know how big of a maybe Malaysia Teleport teleporting. Oh, did you see that there was some revealed potential documents of four UFOs surrounding the Malaysian airliner and then

disappearing it? Okay well we'll have to dig into that next time. Gotta get Jesse Michaels on. We can do another half an hour here. I'll get Jesse to come talk to us. Yeah yeah yeah we'll break it down. I really appreciate you stopping by thanks so much this is great. See you next week. Cheers. Bye. Next up, we are going to the founder of a company that Deleon is in love with. He's obsessed with these AI apps. He can't get enough of them. So we're very excited to have Gaurav on from Captions.

I'm actually a huge fan of this app and this company. I use it all the time. Anytime you see me post a clip on X and there's captions there, I'm using the captions app. It's fantastic. And there's a bunch of other cool features and the company has been just maniacally adding functionality. And as you saw with ChatGPT, you wanted to generate a video.

Like it couldn't do it. Like these tool usages are increasingly difficult and they're not something that you can just, it increasingly looks like you couldn't do it. Like these tool usages are increasingly difficult. And they're not something that you can just increasingly looks like you can't just one shot it with tokens out of an LLM. And so building up traditional software around the system actually improves the AI. And so these products are very complimentary. So we're excited to welcome him to the show. How are you doing today?

Boom. Hello. Hello, go. What's the show. How you doing today? Boom. Hello. Hello. How are you? What's going on? How's it going? It's great. Thank you so much for being here.

Thank you so much for creating the captions app. I use it very, very regularly. DAU, basically. Oh my god. DAU? I'm obsessed. Yeah, yeah, for a long time. I mean, we make a ton of clips you've probably seen.

And it's always a hassle to put captions over it, but you made it much easier. I mean, we make a ton of clips you've probably seen. It's always a hassle to put captions over it, but you made it much easier. A lot of that, I want to talk about the history of the technology, the whisper turning point, and then get into value creation in the application layer. There's so much we can talk about, but why don't you kick it off with just introduction on how you're describing the company these days and then the most recent announcement. You're an OG user, so thank you for being a user. It's a pretty young company. Our product market fit was two and a half years ago. We were four people two and a half years ago and things have grown really, really fast.

Adding captions, the most basic thing. But it's evolved quite a bit. So today, I mean, the way we think about the company today is like, video creation is hard. And we've identified two problems actually. One is recording the video is hard. You guys know this, right? And editing the video is hard too. It's pretty technical.

And we want to solve these two problems. These two problems, we want to help people jump over with AI, right? So if you want to edit video yourself, if you want to record video yourself, go somewhere else basically, right? We're going to actually do it for you. That's the value, right? And it gets you to that.

So not going after DaVinci Resolve, not going after Premier, an entirely new market. Exactly, right. And we think of it very similar to Canva. Actually, Canva for video as an idea has been sitting around for a while. And I think it's actually finally possible because of AI, right? Because the real value of Canva is you start with something, right? You don't have a blank screen. And it's not built for the designer, right? Most designers will look at Canva and be like, I could probably do better than this.

But it's built for the person who's not a designer. And that's the same value that we provide. So on that note, last year we started working on essentially foundation model technology for video generation and for editing. That's going to help us achieve that. And these are big projects, very expensive, but also very cutting edge. I think the most exciting part on the VideoGen side for me is like, we're very much focused on like talking videos, right?

Which is, and by the way, like I'm also like kind of surprised almost in a way that we've spent so much time and so much money doing text to video on silent videos. We're like, what, what's the point? Right? Like just stop. Like that's, that's the negligible part of what a video is. Almost no time spent on videos with actual communication.

So that's kind of what we were focused on for last year. Yeah. Uh, what, what, uh, like what, I don't know what, what like breakthroughs are, are, are the most interesting to you. Obviously like whisper is super important. I feel like whisper is great. And then all of a sudden it came down to like, okay, well I want real time whisper on the show.

And then I got to go build that or a notebook LM. I like notebook LM. Like it still doesn't have an app, but even though Google is paying people not to work and so it makes no sense to me. And, and I'm, and I'm imagining that like captions could be an app where I'm getting like a notebook LM style, like YouTube videos. YouTube's talked about this a little bit. They haven't rolled anything out, but you're starting to see a lot of this stuff.

A lot of it's in like the slop tier. But what I like about captions is that you can still inject enough of the human element to take it from it's a tool that's used in partnership with the human. So it still has that art in there. Um, but, but what, what is exciting you and what's the most interesting in terms of where you want this to go? Yeah, I mean, honestly, there's a pretty clear distinction that's developing that I'm starting to see,

which is amongst the foundation models, there's the text generation, like LLM type models. And those are solving a very difficult problem is intelligence, like an unsolved problem. No one's solved intelligence before, right? So, and by the way, we don't even know what the bound is, right? Like, where does it end? Who knows? It could never end, right? It could go on forever, right?

And then on the other side, you got, you know, media generation. Like this is everything from like video generation to music generation, sound, audio, like all this stuff, right? These are solved problems. Like we can do rendering today. We can literally render anything you want with CGI and stuff. Yeah, of course. It's just becoming a lot easier and it's also bounded,

which means that there is a limit of realism, and then you've solved it essentially. You can't get more real than real. Once you're there, you have achieved what you set out to achieve. And so I think it's a different type of problem. And also it means that it's not about replacing the human, right? Because what's actually happening is the craft is evolving. The craft is different, but the creativity is still there.

Whereas on the LLM side, that's actually potentially replacing the human. Not gonna lie, right? That's potentially what it's gonna do, right? So these are two different types of use cases, almost two different types of value that are being produced today. I think we fall definitely much more in that sort of media generation category

where like our goal is not to replace anybody, right? It's actually like empower a bunch more people potentially. Right, and who knows, right? People come in, they use captions to make their videos, right, and we edit it for them. We like generate the video for them. And you know, that just gets them started. But like two, three? People come in, they use captions to make their videos, and we edit it for them. We generate the video for them, and that just gets them started. But two, three, four years down the line,

they move on to Premiere Pro or something. That's awesome, nothing wrong with that. How do you, on the developer side, we're seeing a bunch of startups where it seems like everything is just converging into this one shot, right? Where it's like you have lovable bolts, rippling, sorry, replet, replet, sorry.

Rippling is one shot for your HRIS system. That's right. That's right. So everything's kind of converging onto this text box, where you just tell it what you want, and then it makes it. It makes a website, or an app, or things like that. I imagine content will maybe go that way for some use cases. And that's kind of like there's a lot of sort

of momentum and convergence around that moment. How do you see, but that's just my point of view, what's your point of view on how all this evolves and how you're looking to continue to differentiate captions over time, other than just sort of chasing perfect realism? Totally. Yeah.

So a couple of things there. I think generally, kind of to make a comparison of what you're talking about, I think of it as Canva for everything. That's actually what's happening. Because the magic of Canva, you know, awesome company. I think the magic of it is not about how simple the UI is or something like that. The magic is that you start with something. It's not a blank page, right? And really the biggest enemy of anything creative is the blank page and not the UI and stuff, right? I mean, think about like design software in general, you look at like Figma and stuff like,

Figma has like six buttons, right? Like it's not a hard UI, right? But it's really hard to make something good with it. Like it's really hard to figure out how you use squares and circles to make something that looks good. Right. And I think the magic of Canva is you start with something. Right.

You're already 90% there when you enter and then you kind of make some tweaks to get it to 100. Right. And by the way, like think about chat GPT, it's kind of the same thing. Right. Like we're using it all over the place today, to get it to a hundred. Right. And by the way, like think about chat GPT is kind of the same thing. Right. Like we're using it all over the place today, but it just gets you started. Right. Like it's like, boom, I already have something like I need a job description.

Boom. There's job description, right. For whatever job you want. Right. And then it may not be perfect, right. You make a few tweaks, you know, changing things here and there and you're done. Right. And so it's like Canva for everything.

That's what's happening. And I think same for music generation or, you know, video generation, like all these things are going there. Our goal and our mission in this, like we're focused on specifically the communications are vertical. Right. So think about this, right? If you think about a movie or, you know, a TV show or anything like that, right.

Any kind of like media today, um, only a small part of that is B roll, right? Like if this was a movie, like I'm in New York, so like it might open with like a shot of the Empire State Building and then the next scene, like oh there's a New York taxi cab on the street passing by really quick in two seconds and then the camera is in the room and we're talking, right? And that's actually the movie, right? And so so much time and money has been spent on making the shot of the Empire State Building and almost nothing on like actually getting the dialogue going right. That's kind of the weird thing right and like our thing is like let's get that communication that dialogue problem solved right that's one and on the other side just footage isn't enough so let's get it edited to make it actually an asset right.

isn't enough. So let's get it edited to make it actually an asset. Right. Can you talk a little bit about, uh, growth for captions? Um, there's a weird dynamic where, uh, it can be extremely valuable to go viral with like a one shot thing. I'm thinking of lens, uh, those magic avatars. It was just upload a couple of photos and you get a photo of yourself. Then we had the studio Ghibli moment, which was a huge growth vector. It's not OpenAI's product, but it was still probably massively beneficial just

to drive a bunch of extra installations and chat GPT use, right? And so I could imagine you guys thinking, hey, let's go make one-click Harry Potter Balenciaga generator. And we are just really good at making Harry Potter Balenciaga style videos Of course, you need to put in your own tweak, but that's what we're great at But you don't want to get pigeonholed into that but it can be a good growth driver

Are you thinking about a conscious consciously? Are you thinking about like how can I get the next? How can I get the next studio Ghibli moment to happen in the captions app? Yeah, I mean so we are but Our philosophy on this honestly like think about both the Studio Ghibli thing, but also think about like original chat GPT, right? Like I remember the time where, you know, GPT was available. Like I would use, I would show it to my friends, like, check this out, like, check how cool this is. People would be like, oh, wow, cool.

Okay. Right. And then suddenly chat GPT came out and like, by the way, I think it was very clear that they hadn't prepared for the amount of viral that thing got, right? Like even the name Chad GPT kind of gives that away. Right. And so it wasn't a planned thing.

It kind of just happened, right? So you give me the same thing. I don't think they planned it. Like it just kind of happened. Right. So I think if you create the right environment where people are given the creativity to go try something, that's like an awesome technology, technology, right, they can play around with it, make cool things with it. Like these types of moments kind of happen naturally. It has happened for us several

times with different technologies we released in the past. And a lot of times it's been unplanned. It's just like, you know, when we plan for it too much, it doesn't happen. When we don't plan for it, it just like suddenly explodes like completely, right? So that's kind of what we've seen. And it's something we think about of like, how do we create that wow experience? Because at the end of the day, a lot of the growth and virality is happening because people are just blown away. It's just so impressive, right? It's beyond anything anyone's ever seen.

Right. And I think that is a pretty high bar. So building on that building in private until we reached that bar, releasing it as like a, wow, this is like crazy. Like that's the type of stuff that we've seen work really well. Next question. Do you have any sort of visions around

what the just video content on the internet in 2030? Cause I have this, right now, there's not a huge incentive to make a video for one person, right? Especially in a business context. If you want to explain something for 10 minutes to somebody in a business context, you pick up the phone, you call them,

you spend the time to send an email or whatever. Now with something like captions, it's like, well, I could just generate a video of how my product works and why it's relevant to this industry and all that. And so I have this sense that content generation is gonna like 100x,000x, but human attention is not going to 100x or 1,000x, right?

It's just not possible. There's only so much time in the day. People use their phone for six, eight hours on average right now. They're still spending two hours a day on Netflix, but we're not going to suddenly get 100 hours a day, even though people on TikTok, entrepreneur influencers, might want that. So I just have this question around, do you think the average video

in the future gets one view, two views? And maybe it's not the average, right? Because certain views or certain videos will still go super viral and be sort of cultural phenomenons. But yeah, I'm curious if you think that's kind of like where we're headed. Right. I mean, I think for what it's worth, I think the average video today is getting probably one or two views, right? Because like think about Snapchat, like a lot of video, probably a billion videos a day, but sent to like, you know, a few people are seeing it basically, right?

For the most part, private communication. And honestly, like Snapchat pioneered that, like they kind of missed the TikTok part of it, it wasn't part of their ethos to be basically, right? For the most part, private communication. And honestly, Snapchat pioneered that. They kind of missed the TikTok part of it. It wasn't part of their ethos, to be honest, right? But there were more about the private communication. But I think the future is more video. For what it's worth, I think there's an interesting sort of move that I think will happen towards more video in AI as well. Because think about like how communications change over time, right? Like we're not sending letters to people as often anymore, right? Like text messaging is kind of like very prone to miscommunication, right?

Audio is definitely better phone call, goes a long way. Video call is like one step further, right? And then real life meeting is even beyond that, right? Oftentimes there's like even within companies, like, right, And then real life meeting is even beyond that, right? Oftentimes there's like, even within companies, like, right, there's miscommunication and like mistrust that builds when there's remote teams or things like that. Right? And you got to watch for that. Whereas an in-person team just trusts each other

so much more. So there is definitely something to be said about like these more sort of multimodal forms of communication, right? To use the term, but I do think that actually, even on the AI side, right? Like sure, chat GPT makes me a great writer, but like what makes me a great communicator, right? And we're really not thinking about that, right?

Because communication is multimodal in itself, right? Like the words that I'm saying right now, where I'm pausing, what I'm emphasizing, how my micro expressions are moving, like how my body's moving, like all that is communicating in multiple forms, right? A message. And that message changes if I change any of those things.

Like words might be the same, right? But I can change the message completely by just changing the delivery of it, right? So I think today's technologies just aren't capturing, right, like how broad communication actually is. And I think it will all evolve towards video over time, just as we've seen, this is not new. We've seen this happen before. And by the way, I was at Snap when TikTok took off,

2019, that era, and initially TikTok grew a lot on the back of Snap. A lot of people know this, but like they were running like a hundred million dollars a month of ads on Snapchat, right? Initially, right? When they were not, there was no presence. Fox into the hen house. Yeah, and like there was concern like in the company people

were concerned that like are we set? Are we like creating a competitor here and people were running A-B tests. Yes, narrator. They were exactly like we ran A-B tests to test right? And people were running AB tests. Yes. Narrator, they were. Exactly. But we ran AB tests to test, right? If someone sees a TikTok ad, are they less likely to engage

in Snapchat? Tests didn't show that, right? But the reality is that it wasn't true, right? They did spend less time with Snapchat. Well, we got to run. This was a fantastic conversation. Thank you so much for hopping on. And we'll definitely talk to you soon.

Yeah, great talking. Thanks for coming on. Bye. We got Ian in the waiting room from Astromecha. I believe I'm pronouncing that correctly. Astromecha. Right. Mechanica?

Astromechanica. Sorry, I mistyped that. Astromechanica. Anyway, we'll let him explain it to us. Come on Sorry for the wait. Sorry for the wait Yeah, how do you pronounce the name of the company let's settle this today once for now What once yeah astromechanica? Astromechanica there we go. Yeah, can you give us a breakdown of what you do?

And I'd love to hear like the the brief history on the launch I remember there was like a video you posted of building something, maybe in a garage. It went viral. It was very cool. And there was some debate over it. And now it's a real company. You raised a bunch of money.

So just take me through the little journey. Yeah, yeah. I guess it starts with my background of I'm lifelong aircraft builder, pilot, fly jets, the whole nine on that. And yeah. You flew, what kind of jets did you fly? You kind of skipped over that. Private jets.

I built my first plane when I was 17. I did experimental airplanes, drones, in like the early 2000s before drones were a thing. So it was from that. I think with a lot of good companies, you're really just building the thing you want. This is just not a thing that exists. Unsurprisingly, one cannot just go by a bleeding edge fighter jet. This is just not a thing that exists.

systems. And it turns out there was a really neat technological unlock for supersonic flight. So that's where a lot of this kind of kicked off. And it was an especially novel architecture. I think this is why it was just so alien. I had just been spending so much time in all of the various subcomponents and disciplines there. There's this really unusual combination. When you combine all these things together, you get this totally new architecture. So the big one for us is transition up to what we call a ramjet mode. Yeah. So there are really good solutions for like, I really like what the Hermes

guys are up to. Like there's definitely other good solutions out there, but this, it hits this kind of interesting sweet spot where like we're getting a lot of performance with a relatively, I mean, it's still millions of dollars, but like relatively inexpensive system. And the other thing that comes up a lot is people are seeing all the engine stuff. And some people think we're an engine company. It was more, it's like if you want to have a computer,

you have to make the microprocessor first. But this round, getting this done, is finally shifting it to us going into the aircraft development. OK, so you're building a plane. Yeah, yeah. I mean, that's my background. I was a plane guy that just needed a better engine.

That's awesome. And so yeah, we're at that stage now with the round done. And people had always seen me kind of like, I was like this guy in San Francisco that was like, I had a machine shop at a manufacturing business previously. So people knew I was good at building stuff. But we've had just this compounding effect

of the talent that I have been very lucky to accumulate here and just the people that have joined on. But we've had just this like compounding effect of the talent that I have been very lucky to accumulate here and just the people that have joined on. Good engineers see an interesting technical solution and thing to work on. So I love my team. capital, then we've been spending some time in DC. Andreessen's been great with this. It's also very important to have an actual customer. I think this is the other way where I came from more of a small business world.

I wasn't interested in developing things for the fun of it. Maybe the company's like very clearly at this moment shifting from you know science project that you would have worked on for free to like Okay, like real commercial opportunities. Let's go money. Let's go full send so yeah, I mean in a nutshell It's you know make the engine so you go in the initial like demonstrator phase so demonstrated the engine That got the money to out build the demonstrator aircraft the one pushing for is the world's first Non-stop trans-pacific non-stop supersonic aircraft. So we could do, you know, California to Taiwan without refueling in under four hours. Okay. So, I know it sounds like direct competitor boom. It's been a decade and boom. So, so yeah, I mean, you know,

Blake's going for like airliners and he, so we're, we're focused on, again, my world is more private jets and really, Blake's going for like airliners and so we're we're focused on again. My world is more private jets and this is a Gulf stream. Are you are you coming for a Gulf stream or? Yeah, it's more like we're coming for net jets. If you know something like that, sure. Cool. We're going to spend the next seven to 10 years doing D.O.D. So interesting.

Like you need to have an actual it's so expensive to make an airplane. Of course, it's not hard to make a thing fly It's hard to make a thing fly that is safe enough to put people on it Yeah, my strategy on this is you go to a space like well, you know unmanned drones military We're like technology and capability matters first. Yep, totally put out there you can you know There's going to be things that are to come up and you're gonna learn it It's just it's a cheaper place to learn. Yeah. Then you're in a position where like we have an actual business you've been making.

I mean, the drones on manned aircraft are making you're like at the smallest twenty thousand pounds. Like they're not small planes. Yeah. And I'm curious, is the right place if you're developing a new airplane to start with, you know, autonomy just because in theory, after you fully develop it, it's like will pilots even be flying or they'll just kind of like...

I mean, I am a pilot so I have feelings on that, but it's definitely something of like no one... This is another kind of odd thing. No one has ever used autonomy in the certification and development of a manned aircraft. And I actually think this is one of the ways we can make it a lot cheaper because ultimately it's about getting data and proving this thing is safe. The only way you really prove it safe is you've flown it.

And so if you have a human on board from day one, you can't take the risks that you want to. Like SpaceX proves this with Starship, where you're like, you know, the actual cost of the hardware is not that high. So you're better off being really aggressive, getting things in the air, de-risking. I mean, again, you're seeing this a hermeneus of like they're making, you know, like the

plane is a bit more rough for the point is like they can make a new plane every year. Yeah. And like by the time it's like, if you want to get to very good things, you want to do more iterations. So this is our similar strategy. I mean, we, we develop new engines every like four months. Yeah. And I think we drive Waymo kind of took a similar path where like there weren't random

passengers in the back for years And you'd see oh, there's a safety driver in there And then eventually they pull the safe driver out and put the passenger in the back exactly Yeah, you just want to spend time or you can map you can map out all these weird little edge cases things like that so so that's you know a big part of how how we tackle this and like It's so yeah You always want to go for like big lessons very important lessons as inexpensively as possible because eventually you kind of lock into a point where like everything will be so expensive that you want to

have you don't want to make any any changes it's just too costly to do to that point so that's where I think ultimately we can actually get to the passenger flight point quicker and cheaper by starting an entire unmanned aircraft business first because it's functionally quite similar in the technical challenges. And yeah, we can de-risk it all, learn all the hard lessons. And in the meantime, it's also very cool just getting to make these things. So it's photogenic work.

Everybody loves seeing the engines on Twitter and stuff like that. For sure. No, it looks incredible. I'm curious. A16Z makes sense in the round. Lower Carbon was a big logo there. Is that Sokka and his team saying, like, this is really cool, we want to back it?

Or is it a fuel efficiency kind of thing in the long run? Yeah. So my very first check, institutional check, into the company was actually Lower Carbon. Xiao at Lower Carbon was my guy. And he check into the company was actually lower carbon and shall what lower carbon was my guy and You know he was betting on it was just me in the machine shop and I like I had you know It's getting close to that first prototype

And so yeah from there the system we get the range because it is more efficient So so yeah, there's just an obvious efficiency argument here. The other one for civil applications, not for DOD, but for civil, is taking a page out of the rocket book. We don't plan to use jet fuel. So rockets have switched to LNG or liquid methane. If you just swapped to that fuel, it's 30% less CO2 just as direct fuel swap. It's more energy per unit weights, 50 megajoules versus 42 per kilogram, a whole bunch of benefits. There's a reason the rocket folks went to it.

So this is another one of those kind of insane bets for like, if you're Boeing or someone like, you're not going to suggest a thing like that. But when you're starting from nothing, you can make these bigger bets. So yeah, if you were to do the combination of the engine plus the fuel change, you're around 60% less CO2. And then there's guys like, I love Casey Hanmer at Terraform.

There's a lot of folks working on synthetic fuels. If you have an engine architecture around LNG, I think that's the best fuel for electrosynthesis. So if you want to have inexpensive decarbonized fuel, it's also your best option. So options that first solve for economics of LNG is a 10th the price of jet fuel. So first make it affordable, then you can go for the price of jet fuel. So first, make it affordable.

Then you can go for the clean stuff after that, where it is already cleaner. And then you can just fully decarbonize from there. Or, you know, but first, stay alive as a company. So first, solve for economics. Then go for that. Smart. Bit of a random question, but I'm

curious since you're an aviation nerd. China earlier this week dramatically canceled some Boeing orders. They have their own internal aircraft. It's like Comac, the C919. Do you see them permanently trying to shift over to that? Or is it just so hard to build a plane that they're going to kind of keep coming back to Boeing

and Airbus over time? Yeah. Yeah, it's tough to say on that. I would say, well, engines are harder. And to that end, I think even they're using, just as we actually use Pratt & Whitney and GE components, things like that, and what we're doing, that's sort of like being TSMC.

That one, I don't think they could get figured out anytime soon. And the Comac uses still American engines. So I'm pretty sure, at least. they could get figured out anytime soon. And the Comac uses still American engines. On the whole airframe, I think they could get it figured out. As with all these things, it's just a money pit. What's the componentry of like the J35 then? Why can they do that but which is like a defense application versus a commercial?

So again to this thing of it's not hard to make a thing work and fly. I mean I did this in my shop kind of as proof of like getting a thing to initially go, not very complicated. The economics of air travel are dependent on it never breaking. And that is a, you don't really know that like, even Pratt & Whitney with the recent Gear Turbo fan is like, it's going to be like a decade until they get payback on that. And they know how to make things like that.

So this is the sort of challenge you run into of, you know, what is going to come up after 5,000 hours, after 10,000 hours, and it turns out this thing is like, oh, there's cracking on this component, and now the engines. Meanwhile, you use what we've got right now, and you're like, yeah, it's good for 30,000 hours. The CFM56 is like 50% to 60% of all airliners, narrow-body ones. That engine can stay on wing for almost 30,000 hours. It is just so proven. body ones and like that engine can stay on wing for almost 30,000 hours and it's just

so proven and this is the thing you see in aviation where like there's always these things that seem really appealing because it's a performance optimization like well of course I want to burn less fuel but when you try to implement this thing that's technically better it's like yeah but it turns out it broke at some slightly higher rate and you already had terrible margins and now it doesn't work. So that's where that, that's going to come up. Um, it's just not something that's like obvious on day one. Well congratulations on the round.

Well congratulations to you and the whole team. Overnight success. Uh, thanks for coming on. I appreciate you coming on and breaking it down for us. Thanks so much. Of course. Yeah. Thanks so much. Of course. See you guys. We'll talk to you soon. Bye.

Next up, we have Sham Sankar from Palantir. There's a ton to talk about with him. He's published 18 theses about the defense reformation, the primacy of winning, and also just sits in a very interesting place as Palantir's first forward deployed engineer. And so I want to hear what he's hearing from palantir customers mostly.

Anyway, Sean, welcome to the show. How you doing? Thank you guys for having me. Yeah, thanks for being here. Yeah, I wanted to kick it off with what is the biggest topic of discussion over the last two weeks? Tariffs, H20s, NVIDIA, something else, what is driving conversations

through the partners that you work with at Palantir? I think it's enterprise autonomy. You know, it's like there's a normative view of the most valuable application of AI is clearly towards autonomy in the enterprise. And then you can think about it, you can reason about it by analogy, if you thought about the self-driving car journey,

it took us 20 years to get from a prototype that drove through the desert, 120 miles, pretty good demo in 2005, to a commercial self-driving car service. And no one wants to be on that 20 year journey. What have we really been doing over 20 years? We've been handling edge cases, right? So really investing in the tool chain

that allows you to get from a mandraulic world to one where you have AI agents that are totally automating your business. We've automated sepsis monitoring at Tampa General, where deaths from sepsis have reduced by half. We've automated how AIG underwrites insurance. What used to take three weeks and you'd only get to 10% of your submissions, it takes less than an hour and you get to 100%. So I think, and it really is going to feed into this winner-take-most dynamic. It's not just about cost savings, about your competitive advantage. And you see that play out in very stark and real terms in defense, where in

some sense there's nothing new under the sun. There's just John Boyd's OODA loop, Observe, Orient, Decide, Act, or sometimes my favorite admiral says the American OODA loop, observe, orient, decide, act, or sometimes, uh, my favorite Admiral says the American OODA loop observe overreact destroy, apologize. How do you, how do you bring, um, lethality to that is just doing it much faster and you're going to do that with AI. That's amazing. Uh, uh, Tyler Cowen called, uh, April 16th yesterday, AGI day. He has called it

What was your reaction to the probably probably happened internally at Palantir like, you know months ago But yeah, I mean, how are you processing this idea of AGI? Obviously it accelerates everything you're doing but What is your take on model scaling reasoning? agentic workflows all these different things like what are you looking for? Where are there breakthroughs that remain versus what do we just need to go implant? Well, I think we're well past the threshold where the models are powerful enough that you can be using them to automate massive things. I think at this point, really incremental improvements to the model changes how you

decompt the problem. How many agents do you need? Do you need 80 because you've decompted in a way where it succeeds or do you need eight? The coolest stuff that I've been seeing is multiple teams internally at Palantir are building AI FDE's and it's really compelling. It gets really far. It attacks different parts of the stack. If every user could have their own on-demand infinite essentially AI FDE, how much more stuff can you build? How much more quickly can you adapt? What's your OODA loop as a company now? So I think we're deep in the implementation phase.

If AI is electricity, like in electricity, all the value didn't accrete to the people who made the turbine generators. It went to the people who made the tools that ran on electricity. And I think there's just, we're just so excited about proliferating and building those tools out. Yeah, how are you thinking about

just commoditization of the model layer? Obviously, it's like a horse race every different month. The different models comes out. How has Palantir approached integration with different foundation models? And then is that the same as other databases and different tools that might be deeper in the stack, or even the even the

migration to the cloud. Does this feel like cloud to you? Does this feel like mobile to you in terms of like your agnostic approach or is it different in any way? There are parts that definitely rhyme with it. It's more agnostic than not. I said early on in the AI revolution that we thought the right approach was K LLMs. Like why would you pick one LLM when you can have K? And then you really can start thinking about the tool chain that you need to build around that. There's a number of reasons. The first, very clearly you had model commoditization. If you look at both open and closed models over time, the ELOs are just up into the right. The open ones have converged and even in some cases surpassed closed models. And at the same time, the price of inference has dropped like a rock.

So that's clearly happening. And you even see that in the frontier model companies where they're expanding further and further into the app stack because they realize that selling you a raw API is probably gonna be a raw business. Yeah. So then there's a question of like,

okay, if you're just being very pragmatic, if you're building the machines running on this, like what model's right for what job, the models are improving rapidly, how are you gonna safely be able to evaluate the relative performance of models as new models come out, so you need that sort of tool chain. And even more deliberately, these models get end of life.

Like you can't get the original GPT-4 anymore, right? You have 4.0. If you've built an entire enterprise that runs, assuming some model is going to exist in perpetuity, that's probably not going to work out that well for you. You're going to have to have this constant ability to evaluate and run these models in parallel to develop the conviction you need, not only for the optimization of what's incrementally better, but can I safely migrate in the future? How are you thinking about integrating robotics? It feels like AI today is just rapidly transforming

the way work is done online, specifically knowledge work. But how are you thinking about what's your vision in 2030 and kind of beyond about how different robotic systems are integrating with the Palantir system. Specifically, the example you mentioned earlier around Sepsis monitoring is like, cool, that's one sort of hardware integration, but it's not its own autonomous system out in the world.

In many ways, we already do this. We have more than 300,000 blue collar workers who turn wrenches in our software every day. Everything from the factory floors of Chrysler to every Airbus airframe, every HD Hyundai ship. If you think about a company like Rio Tinto, so much of the mining operation is actually autonomous. The railroad cars that take iron ore from where it's mined to the ports, that's completely autonomous. The three-story tall dump trucks that are actually trucking out the ore, that's completely autonomous. The three story tall dump trucks that are actually trucking out the ore, autonomous.

And so I don't wanna trivialize it, but in some sense to me, it's more of like a difference of degree than kind. You're machine to machine communicating to a system. That system just happens to be smarter and smarter every single day. During the metaverse boom, Satya Nadella was talking about building digital twins.

Is that an unnecessary abstraction or like reference point for humans? Or is there some actual value in representing all of these real world assets like the Rio Tinto mining example you gave in some sort of like virtual space? Or does it not matter in it should all just be weights in a model that we're querying through an LLM or something like that? Where I think it gets to be really valuable is if you kind of thought about it like a CI check in programming, where it's like I'm proposing a change to a system here, how can I understand it? Is that change going to work? What are the unintended consequences of it? If I make that change, what are the new bottlenecks that different functions have to think about?

The simple example I always use is the procurement guy is really excited because he bought, you know, discount raw material, 30% off the list price. And the production guy is pissed off because this discount material has 40% less yield, right? It is at the end of the day, one value chain. And where the digital twins have been hugely valuable is the ability to integrate the chain and the decision making across it. So, you know, when the left hand is, is robbing from the right hand. Can you talk about the early days of Palantir, maybe one of the first major

wins or setbacks or kind of like, what's the story that you tell to new Palantirians to kind of set them up for maintaining the culture? Cause I feel like Palantir has done a great job of like maintaining the quality bar. You haven't become that place where people kind of go in like rest invest basically, but you are like kind of a big tech company now. Um, what's the story that you tell to kind of set the culture? I mean, there's so many stories. I really, I'll tell you how I set the culture at the end, I promise. But I think one,

one of the things that I felt like we kept getting punched in the face in the early days on is that someone else's execution would end up screwing us. Like I remember we had this gatekeeper between us and a government customer and he installed an early version of our software and he wanted to test it out before he passed it on and it crashed and he blamed us. In those days, this was a server with two gigs of RAM trying to run a four gig Java heap and he didn't understand why it crash. We just developed this extreme ownership mentality because anytime we outsourced even an iota of responsibility,

it blew up in our face. That's you can see for deploy engineering as the extreme manifestation of that, that we're going to somehow have total control over the implementation because that's how you get the feedback and the quality and the improvement, and you're actually responsible for your own destiny. But the story I tell to kind of spill the beans on, so your first AMA with me if you're

onboarding in week one, I always end the AMA by reminding people that Palantir is a flat place. What does flatness even mean? Well, to me, it means that every single employee is willing to tell me to fuck off to my face and I am all say Fuck off in unison out loud at the very end. I think some important I want to institutionalize the notion of rebellion that you know, I don't have all the right ideas There's so many things we've done over time I didn't think we're gonna be right and they were right and you know

You got a bet on talent and the people and give them the space to run. And really preserving what's at the core of this is like this is an artist colony, not a factory. I don't really know what your career progression is gonna be and if you want certainty on that, this is definitely not the right place. But I can promise you, you'll have access to the most motivating problems and compelling colleagues and I'll give you all the canvas and paint that you need.

Yeah, can you talk about what's going on with the cultural transformation in Washington right now? You've written like maybe it's transformation going into founder mode, but within some of the more nitty gritty, maybe swampy institutions, is there a need to be able to tell each other to F off or just be more confrontational? What

should DC learn from Palantir and maybe even vice versa? Well, I don't know if you see it. I would say it seems like very presumptuous for me to say what should DC learn from Palantir. What it tells me about the present moment is in Palantir terms, the primacy of winning. Like you feel that in the people there, they understand that they're working backwards from what could actually work instead of some Antidote notion of how we wish the world works, but doesn't and that's like allowing us to re-examine a lot of assumptions for first principles I think founder mood is the best description of it when I talk about so Conserved across commercial and government government, our diagnosis of the current

legitimation crisis, why did doors fall off airplanes, why does it seem like these institutions aren't working, you have a C-suite that is, if you steel-mand it, diligently trying to steer the ship. Their steering wheel, what they don't realize, is a prop from the Jungle Cruise ride in Disneyland. It's not connected to anything. Then you have people, hardworking people on the metaphorical factory floor who kind of look up and say, how could they be so disconnected? How could they not understand what's actually happening here? So much of that is like the levers of orientation are somehow filtered through a lot of people in the middle. Leadership doesn't have access

to real-time information. If you were navigating a car and the latency of understanding where you are was an hour, you'd crash. And so like this sort of manager mode playbook, it works really well for the managers, but it's like a way of having a well managed company into the ground. Yeah, and more like individual champions. Peter Thiel has that quote about like we need ticker tape parades. Thiel has that quote about like, we need ticker tape parades. Ezra Klein is now talking about with the abundance,

he's highlighted the failure of the California high-speed rail system. And what I found interesting about that is that it's very hard to pin down like, California high-speed rail, everyone kind of agrees like, projects not going great, but no one can really say like, who was even the champion of that at any point in time? Like, no one's really responsible at any point in time

It does does the government need more individual? Accountability or like I don't even like project level CEOs or something. I don't know Yes, the short answer that is absolutely yes, like I think about it in terms of heretics and heroes You know, it was Somerville who built the Pentagon in 16 months. It was Jim Kranz who led the Apollo program. There's something about our kind of Midwestern Calvinist sensibilities as a country where like it's the Apollo program and not Gene Kranz.

It's the F-16 and not John Boyd's plane. It's the nuclear Navy, not Hyman Rickover's Navy. That's great. I appreciate that sensibility tremendously, but it shouldn't obscure the fact that actually these projects working or not come down to a handful of really exceptional individuals being present, taking ownership and leading the way.

Yeah. Can you give me a little bit, expanding on that, can you give me a little bit of history on the dollar a year men and that story? Yeah, in World War II, we actually had a program for very skilled people, corporate leaders, engineers, they could for a dollar a year because volunteerism was illegal. You could not volunteer to work for the government. So as we were preparing to go to war, as we went to war, they would actually

join the government as dollar a year men, they would get $1 of salary, and they would actually be able to be deployed on the nation's most important impactful problems. Sometimes they would retain their old jobs, sometimes they wouldn't, it would really depend. But you could get the right person on the job. I think that's really important because if you think about even World War II, our mobilization came down to one man, William Knudsen, a Danish emigre who actually invented mass production. He was the number two at Ford where he invented mass production.

He got in a fight with Henry Ford and went to GM as the number two. And FDR asked Bernard Barsh, who should I choose to do this? He said, I have three names, William Knudsen, William Knudsen, William Knudsen. It really came down to a counterfactual where we had one guy who could actually move

all of American industry. And the way that he assessed, he was an engineer himself. He would meet people and understand, is it believable that you, as a steering gear company, can start making artillery now? Are your engineers smart enough? Can they answer my questions? Boom, here's a contract, let's get going.

And it wasn't a fiction writing contest, it was really a pressure test mind to mind. Can you talk about the executive order from last week, the defense reformation? You had a great post on it, but I'd love for you to kind of break it down live for the audience. I think it is the single biggest change that could prepare us to avoid World War Three here. You know, If you look at

what has happened to the U.S. since we won the Cold War, we've really had the rise and empowerment of this monopsony. A single buyer that is the government and an addiction to that monopsony telling us what to build at what price and how it's all going to work. That's very different than the free market. Some fundamental level, you either believe in the free market or you don't. I like to quip that everyone, including the Chinese and the Russians, have given up on communism except for Cuba and the DOD. We still have five-year plans. This luxury of having the monopsony grow to the scale it has is a consequence of having no peer competitor. But that world really went away, arguably, in 2014. The militarization of the Spratly Islands, the annexation of Crimea, Iran's pursuit of the bomb, deterrence is lost, and we need to rise to that. And

I think this is a clear acknowledgement of very much that in this administration. But the EO says, we prefer to buy commercial items. We prefer to buy items that have been proven in the market that have to withstand brutal competition that happens out there every day that reward entrepreneurs for what they're building rather than custom building and developing things on our own. And we have a long history. A monopsony is always going to desire control. But it goes all the way back to Andrew Higgins and the boat that won the war in World War II. Andrew Higgins was a guy from Louisiana.

He spent some time in China and he was inspired by bootleggers in China and the sort of boats they had for amphibious landing, to quickly land, get goods off, get goods on, and then scurry away. At his own expense, he built the Higgins boat. He showed it to the Navy. The Navy wouldn't even let him compete. They kind of dismissed him. Then a young Marine who became very famous, Kraluk, he later got him into the competition. He won the competition and then instead of buying the boat, the Navy sold the plans and

tried to build the Higgins boat themselves, which they failed to do. And then finally, at the 11th hour, of course, we do the right thing, that's a classic American trait. And Eisenhower said that's the boat that won the war. And so the Predator was developed as a commercial item. It was not developmentally done inside of the government. Abe Carey built it, General Atomics picked it up, they financed all the R&D themselves. The Air Force, of course, hated it because it was unmanned. It was kind of emasculating. When 9-11 happened, it was the thing that

met its moment in a massive way here. There are so many examples. Now we have whole companies built around this. Companies like Andrel, the entire approach is commercial first, investing private taxpayer capital into R&D, putting the pebble in the right shoe, putting the pebble in the entrepreneur's shoe rather than in the taxpayer's shoe. So this EO, it's actually this law in 1994, we passed the law called the FASTA, the Federal Acquisition Streamlining Act that said it is the law that if a commercial item exists, you must buy it. It's actually a very stringent test, three-part test.

So if a commercial item exists that meets your requirements, you must buy it. If it doesn't, you must see if you can change your requirement to meet the existing commercial items that do exist. And if that's not possible, you must see if you can ask the company to change their product to meet your requirement. And only then are you allowed to go custom developmental. So this is the most violated law on the land. And I think having the administration say, look, this is statute and we agree with it

and we're going to enforce it is how we're going to field a huge amount of deterrence between now and 2027. There's not a lot of developmental things you can do between now and then. There's a huge amount that you can do with the innovation of entrepreneurs and the commercial industry. That's amazing. Do you feel like cyber warfare has been too normalized on this planet?

It feels like you have a major cyber attack, and maybe you hear about it on X because somebody says they can't log into Zoom or something like that, but it doesn't even make the mainstream news. Meanwhile, there's any type of kinetic conflict globally. It's immediately front page, or it's on CNN, things like that. And do you think there's ever a point in the future where people start to view them and countries truly view them with the same level of significance

as everything sort of continuously sort of comes online? I think you're spot on that there's something very strange in how little we talk about it. And photograph well. Yeah, it doesn about it. And it'll photograph well. Yeah, it doesn't photograph well. It doesn't photograph well. Like what picture are you gonna put in front of the page? But my concern is that in the future,

if we have a hundred thousand humanoids, you know, going around a single city and suddenly they all are stopped, that will start to photograph pretty well. And so I imagine in the future, it won't be just kind of brushed under the rug. And yeah, of course, you know,'t be just kind of brushed under the rug. And yeah, of course, you know, companies have to respond to it and the government responds

to it. But I just imagine at some point it will start to really be news. Well, one of the most devastating consequences of it being so kind of below the waterline, something we don't want to talk about is the normalization of like, what can you do about it? It's sort of nihilism and acceptance, a pessimism that anything can be do about it? A sort of nihilism and acceptance, a pessimism that anything can be done about it, which is obviously not the necessary precondition to rising to the occasion.

And we should have very high standards for what can be done about it. Of course this company got breached or this thing happened and all these people have my information all the way to sure our water systems are compromised and we'll be brought to our knees within the first few days of conflict. Like we should just we're not able to hold ourselves to the high bar that we ought to, because it's not

popular. And we're not popularizing it as a concept. I mean, speaking of popularizing just general shifts in, in thought about defense and the importance of like, public private partnerships in the government. Can you talk, can you take us through the defense reformation, 18 theses, the, your thesis there, and then kind of the impact and, is it a jobs not finished situation or has, has defense tech become enough of a meme now? It seems like Silicon Valley is like fully on board in my opinion, but

at the same time there's a lot more that we could do. Yeah, I think we've earned the right to have an at bat. So like, gotta perform now for sure. I'd say the fuller, I've touched on some of the themes, but the fuller diagnostic is, the government has kind of historically made it a bad business to work with the government. You know, and you think about like our examples from the the past. At Intel, Bob Noyce would not let more than 4% of his R&D

budget come from the government because he, as the inventor of the transistor, wanted engineering control over the roadmap and what he was going to build. He always had in mind a broader commercial market that was going to drive the price performance that was needed. Even though in 1969, something like 96% of his revenue came from the Apollo program and DOD. At that point, they looked like a government contractor, but his aspiration was bigger in the same way that Elon Musk's aspiration for SpaceX has always been to get to Mars and to make us an interplanetary species. It's not just about launching rockets and satellites into orbit here.

We really lost so much of defense innovation. Kelly Johnson, who built 40 plus airframes in his career, including the U-2, which we still fly, and the SR-71, he is this heroic figure. So much of this innovation has come from these legendary engineers, these heretics, as I call it. Today, you think about it as Northrop Grumman, but it was Jack Northrop and Leroy Grumman. It was not Lockheed Martin, it was the Lockheed brothers, and it was Glenn Martin. It was really so founder driven. The aerospace industry subsidized its own existence in the interwar period between World War I and World War II,

because the government didn't think it needed it. But for private industry being willing to lose money for a decade plus World War Two, we would have been in a very, very bad place. What excites so I think the Last Supper people look at the Last Supper, which is this dinner at the Pentagon in 1993, where they said, Hey, look, we have 51 primes today, you guys are not all going to survive. Today, we have five. For every dollar we were spending in defense, we started

spending only 33 cents overnight. It was a huge cut, the peace dividend as it's called. Consequence that conventional people take away from this is, oh, that's when we lost competition. We went from 51 down to five. I don't think that was the actual issue. The real issue is that consolidation bred conformity, and the conformity pushed out all the heretics. It pushed out all the founder personalities that you need to make this stuff really work. My reason for immense optimism in this moment is that the founders are back.

More than $100 billion have been deployed in the national interest. You have Palmer Lucky, you have the Sang Brothers at Shield AI, you have Dino and Saronik, you have all these crews of really, really compelling humans, really, really compelling founders working in the national interest, again, pursuing heretical ideas, waking up every day, banging their head against the wall, fighting the bureaucracy to do what's

right for the men and women in uniform and for the nation more broadly. Can you talk a little bit about the startups that are building on top of Palantir and take us through AIP? Yeah, so we've always, it's a little abstract, but I've always felt like the ontology, which is our secret sauce, is it's really, you can think about it as like a declarative backend. It's a way of saying, like, this is the shape of not only my data, but the logic of my enterprise. And that's all you have to do, as opposed to the imperative approach of having to actually go create and wire this up and do it together and figure out how to get it to scale. If you had this declarative back end, if you could just say, look, this is what I need

to exist in the world, now I can build applications on top of that, that manage all of the entropy that usually sits behind it. It gives you a radical speed advantage for these companies. These companies are building everything from like the European cricket network to people who are building pharma companies, hospital operations companies. In defense, it's very popular because we can give you an SDK that wires you into 20 years of data

that has been integrated into the instances of Palantir that exists in the defense community that your users can authenticate to. So it just speeds a lot of the kind of brain damage you would get from having to deal with the bureaucracy and allows you to compete on the quality of your product rather than your game and getting through the wickets of a Byzantine process that probably needs its own reformation. But it's really about speed and that ability to build on top of the platform.

It's not just for third party developers. When Hurricane Helene happened in North Carolina, green suiters, like folks in the Army in the 101st, built their own application, they built their own hurricane common operating picture on top of the platform. So that ability to respond to the need, it's the code version of the OODA loop.

Yeah. What advice would you give somebody maybe graduating college today that's evaluating joining maybe a seed stage company versus a scaled company like Palantir or something like an Anderol? I imagine you at times had a ton of different pressure from VCs being like, leave. We'll give you $10 million to do whatever you want.

Don't you want to be a founder? Yet when I look at opportunities, you know, in anything defense related, it seems like if you have a founder mindset, there's so many great opportunities to just go to a great company and kind of take on that sort of like founder level ownership over a specific problem area or product set or things like that? Yeah, I mean, I think the, of course, I'm biased here, but if I would give general advice,

the way I would think about it, what I would tell my son is like, where can you go that you're gonna work with the most compelling people? Because your rate of learning is gonna be a function of those people and have access to the greatest surface area around problems. My model for growth is not progressive overload. The Incredible Hulk did not become incredible by just lifting a little bit more weight every

single day. It's like a near fatal dose of gamma rays that probably has like a 50% chance of killing you. Which helpers are going to throw you off the deep end and give you that opportunity to have superhuman superhero growth, that's the value maximizing thing. I would remind my son that your point of extreme growth is going to be coincident with your point of maximal pain.

As Greg Lamont says, one of my favorite quotes, championship cyclists, it doesn't get easier. You just go faster. Just understanding that that's what it looks like. Don't sell out for the opioid of a linear career progression with a clearly mapped out path. I'm pretty sure that's retarded. That's lead shielding that's preventing the real gamma rays from getting to you here. Find places you can throw yourself off the deep end. I bet there are some C stage companies that are perfect for that. I bet there's some C stage companies that are horrible for that. I bet there's some CG companies that are horrible for that.

You know, it really is pretty specific. Does that tie to the primacy of winning mentality? Is, is that like, uh, all is that essentially like derivative or like the same concept? Yeah, I think it's, it's, it very much relates to that. And I think, I think it's like one of the things that I had to, I feel like it's one of the most important things I learned at Palantir. We're all kind of programmed in our conventional education

to feel like there's a process, there's an approach. If you follow the playbook, you'll win. But it's actually like, it starts to conform to how you wish the world would work. It becomes hard to decide, is that actually the cargo cult or is that how the world does work? You can keep marching around these fields in Micronesia. The planes aren't coming back

you've misunderstood the physics of the universe here and And just if you just anchor yourself like but is this working? Like is it with and then blow up anything that's not working. Okay last question on cargo culting Cargo-culting the forward deployed engineer, good or bad? When does it work? When does it not work? Who should be doing it? Well, I think all cargo culting is bad.

I think the forward deployed engineering methodology is exceptionally valuable. Akshay's description of it is the best one. I think it's like solving through back propagation. It's a very elegant metaphor. But if you just slap a veneer on it where it's like sales engineering, done. My favorite things like ex-palantirons will be like, people are asking me, like, what is an echo? I will describe an echo and they'll be like, so you mean customer support, customer success. And it's like, wow, you've lost the essence of this whole thing, this beautiful concept. You've completely cargo carboculted away.

Oh no. Well thank you so much for stopping by. This has been great. This has been a fantastic interview. For having me guys. Yeah, this is great. Have a great rest of your day and we'll talk to you soon. Cheers.

Bye. Fantastic. So many great stories. Man, like encyclopedic knowledge of American history. There's so many times. We need to have him on for America Day. Yeah, yeah, yeah, of course, Lockheed and Martin, I know their first names.

I don't know their first names. I need to brush up on their stuff. I need to do some space repetitions and flashcards or something. But next up, we have the founder of Starship coming into the building. Welcome to the show. How are you doing? Boom. Hello, good to meet you all. Welcome to the show. How are you doing? Boom. What's going on? Hello, good to meet you all.

I am doing fine. I'm doing a super exciting thing and I like it. Yes, thank you. Would you mind kicking us off with just a little bit of background on the company and explain not just what Starship is, but kind of the footprint, the rollout, the strategy, all of that?

Yeah, yeah, yeah, all right. Yeah, sure. So what we are doing, we are a company developing and building and operating delivery robots. Yeah. So robots that transport stuff, and stuff that means burgers, milk, could be packages and so forth, right?

So in science fiction movies, you don't see UPS guys knocking on your door. You see things coming to you, things flying to you. That's the future that we are building. That's the present that we are building. And we have many competitors as well who we have inspired to do similar things, you know, with drone deliveries and so forth. We are doing it on the ground with robots that drive on the ground, small robots that drive on the ground. And we are actually not like a, but many people think that, this sort of futuristic thing is like a pilot or test, somewhere in some limited area or something like that. We are actually in full commercial operation with thousands of robots in hundreds of locations.

It might not be, you know, we are not, not there, not yet in every place that, you know, all of this audience that's listening to this right now is, but we are in some places and in, in some of these hundreds of places that we are in, uh, you know, our robotic delivery is completely commonplace. It's something that people are completely accustomed to. It's something that people don't really use, like human couriers to deliver things that use robots. Yeah. Can you talk about all the different things

that you've seen around the way humans treat robots? I try to say thank you to robots when they help me out with different things, but some humans, we saw this with birds. Yeah, we've been seeing a lot of vandalism of birds. Yeah, we saw this, birds, the big thing with bird. Vandalism of lame-os.

In LA is I think a lot of birds issues locally here just came from a culture of vandalism. You did the hard thing in making sort of cute robots, which I think probably helps. It's important. How do humans kind of present a challenge to trying to like automate delivery, which should be in everyone's best interests?

We get that question a lot, but we don't actually get a lot of vandalism itself. The truth actually is that people really love our robots. Yes, I see that with like scooters and some of the other modes of transport, people don't really treat them nicely, but they actually do treat our robots really nicely. Like for example, we often get the question that,

oh, are your robots stolen? And actually none of our robots have ever been stolen from the street. And we have done 8 million deliveries. Like we are doing millions of deliveries. And it's just not happening. You know, kids feed our robots bananas. So the treatment is completely different than with, you know, like scooters, for example.

I understand, you know, that's actually a lot. We get that question actually a lot, we get that question actually a lot. People sitting at the table very often say that, I treat things nicely, but there are some other humans out there that do not treat things nicely, just like you said, right? But it's not actually happening. It's not actually happening. How often do you vandalize a UPS vehicle? You don't really, right? Sure, sure you can do it. Yeah, you can puncture the tires of a UPS vehicle.

You don't really do it, right? And our robot actually, our robot has 10 cameras. It's constantly connected to the internet. It's really, it has a really loud siren when it's tampered with and so forth. It's not actually really happening. Well, can you talk a little bit about the rollout maybe? Because I think that the locations in which the robots

are doing deliveries is really going to impact. If you're rolling through a suburb, and it's a family-friendly neighborhood, something like that, the robot is going to run into different challenges than rolling down a street in Manhattan, for example. So how have you guys approached your go-to-market and picking what regions are top of the list in terms of getting robots on the ground? Yeah, great question. We are operating our robots in 60 cities and 60 college campuses. So we have learned a lot about different environments. And yeah, like different neighborhoods are completely different. Like there's a lot of difference in the world. We're operating in

six different countries, like five countries in Europe and, you know, US, right? And you know, US, of course, you know, it's varied as well, right? So we have learned a lot on how the different, you know, sidewalks look like, how crossings look like, how traffic lights look like, you know, what the traffic patterns are, all of these things. We've learned a lot of these things, a lot of data for our machine learning algorithms and so forth. But in terms of actually how people treat robots, there's not much difference actually. People are actually really friendly towards our robots. I understand it's really hard to believe, but that is actually true. It's completely true. And you're operating a completely commercial

quality service. We are cooperating with most of the major delivery apps in the world and with a number of tier one retailers as well. And it just works. Can you talk about the progression of the technology, specifically the path to end-to-end? There's a single AI model, but there's probably teleoperation in the early days. Then there's some mixed, there's some C++ for pathfinding, but there's some AI for image processing and world modeling. How have you thought about developing the technology and do you see teleoperation and end to end AI systems playing nicely together in kind of a Centaur mode for a long period? Or is this, are these specific like gates that you have to go through? Yeah, we are operating at quite the hybrid model.

Sure. We have been in, we have been working on this for 10 years. Yeah. Right. And, you know, we built this at the, at the time where, you know, AI was not actually as developed and we have obviously reaped the benefits of all of the AI development that has happened since. But we also recognize that safety, for example, is super important. Super important. For example, our robots cross roads.

They are generally sidewalk robots. They drive on the side of the road as well when there is no sidewalk, but generally they drive on sidewalks. But they cross the roads. They cross roads similarly as a pedestrian does, using crosswalks. A robot cross roads a hundred thousand times a day. A hundred thousand times a day. There are thousands of robots operating. We have been speaking right now for eight minutes. During these eight minutes, our robots have probably crossed the road

you know, about a thousand times. Wow. Probably it's like that. It was a thousand times during these eight minutes that we have talked, right? You know, safety is super important. Suppose we have something going wrong in like 1% of the crossings.

That's too much. That's about 1% or 0.99% too much, right? So we need safety, we need to prove that it's safe. We are actually not operating an end-to-end neural network, but we are operating a combination of yes, C++ and neural network. So when you see hard tech founders claiming online that they're operating an end-to-end neural network, which some people have done, does that surprise you? Is it almost unbelievable? It's not surprising to me at all that you can do it. The downside with that, it's very hard to prove that it is safe.

It's very hard to prove that it is safe. It's very hard to prove that it is safe. And we are actually operating in also some pretty challenging regulatory regimes. I mean, not just, you know, and having a human loop is actually beneficial there, right? Like if you have the ability to remotely take over, that's going to make your safety case so much easier because you're going to say, Hey, yeah, it is kind of crazy. There is a robot piloting this a little bit, but at any moment we can hop in and beam in and there's a human. Exactly. Exactly. For us, it's a combination of remote assistance, which happens, you know, more and more rarely all the time. Right. But it still happens. It's there. There's a human,

you know, somewhere that can take all the time, right? But it still happens. There is a human, you know, somewhere that can take over in difficult situations or complex situations, unusual situations. Then they receive plus plus, and there's end-to-end neural network as well. Sure, sure. So it's the combination of all of these. Yeah, has the transformer architecture

or any of the other like kind of foundational innovations in AI been important to Starship and what you're building? Obviously, we see hype around the Studio Ghibli moment and diffusion in image processing. But does that actually make it easier for you to understand the stuff of like, where am I in the world? Where am I going? I need to plan a path.

How has how should we be tying all the amazing progress in LLMs and AI to your business? Yeah, it is definitely helping and improving our stuff. I think we were in commercial quality operation already before that, but it is helping us tremendously for sure. Primarily it is clearly something that is dramatically reducing the need for this human somewhere in the loop. Sure. Absolutely. What about, have you thought about giving, you know, embedding some sort of LLM or voice model into the robot. So if a pedestrian bumps into the robot, they can have a little conversation and it can kind of explain like,

hey, I'm just going across the street, I'm delivering a burrito. Like it can answer some basic questions. That seems like- I'm just a burrito guy. I'm just a burrito guy. That seems like maybe silly, but also like maybe great from a user perspective, but also

like wildly extra. I don't know. Have you thought about that? Yeah. Yeah. So we do not have like a personified LLM in the robot right now, but I think it is conceivable that that will be the case. Our robot does speak, but the speaking is not actually driven by an LLM.

Yeah, it's more like business logic decision tree. Exactly. It's a little bit more business logic that yes, every time the robot does a delivery, it says thank you. It doesn't take an LLM to do that. Yeah. Can you tell me more about trade-offs in robot production? Elon has been anti-LIDAR from a cost perspective.

I'm sure there's a bunch of different trade-offs in terms of size, weight, speed, battery life, all these different things. You have probably a base hub where these things go to charge, and then they have a certain amount of range. What are you optimizing for? What are some of the pitfalls to avoid? Yeah, great question.

So our robots actually do not have a LIDAR. But that does not mean that we are anti-LIDAR. The thing is, though, that the reason we have not used LIDARs is that LIDARs are a perfect sensor for an autonomous vehicle. Autonomous vehicle needs to see quite far away and it needs to see, you know, it doesn't really, well it does need to have short-range sensors as well, but you know, it does need to see, you know, like, you know, 200 yards, 300 yards because it's moving fast right our robots are moving much

slower than a car right they don't actually need to see that far so lidars are actually not perfect sensor for us and the downside with lidars is that lidars typically have a narrow vertical field of view they have like this narrow you know you know effectively that see very far, but it's a very narrow, the angle, the vertical field of view is very narrow, like a couple of degrees or so, right? We actually need to have perfect vision from immediate vicinity of the robot, like very wide, wide, you know, vertical field of view. We need to see, you know, down in front of the robot and also, you know, vertical field of view. We need to see, you know, down in front of the robot and also, you know, up and, you know, we need to have that sort of vision. So, lighters are not

perfect center for us. That's the reason we are not using lighters. But the moment that the lighter with suitable spec appears on the market, we will absolutely use it. So, we are not like religiously years on the market, we will absolutely use it. So we are not like religiously anti-lighter at all. Jordy, you have a question? Changing gears a little bit. Skype is shutting down on May 5th, end of an era. You were the founding engineer there. Is that emotional for you, the shutdown?

Or at this point, you've been doing something else for a long time? Yeah, yeah. I've been doing something else for a long time. I'm not actually an active user of Skype anymore. Or actually quite some time I still have the app in my phone somewhere, but not really using it all that much anymore. Skype was an amazing ride.

It was one of these startups, which is actually rare, one of these startups that just took off like a wildfire immediately from day one. From outside perspective, all startups seem like that, that they come out of nowhere and they just boom. It's like that. But in reality, as a startup founder, most startups are not like that. Most startups is hard work,

hard work before things actually start getting off the ground, right? Skype was not like that. It was like, for me, it was easy work, actually. I was like, I just did what I love to do and boom, you know, loads of users came and it just kind of happened, right? So it was an amazing journey, but also,

you know, frankly, I mean, it was a journey that happened 20 years ago, 20 years ago, literally 20 years ago. What, what, what are the key lessons that you've taken that you took from the Skype story and applied to building this business? Is it just the engineering culture, the pace of play, or is it wildly different because it's a completely different growth curve? It's both of these things, but it's also, I would say one fundamental thing is that

with a lot of products and a lot of services, you kind of, you know, it's a very simple service really. Like, you know, one delivery app, a major delivery app founder, you know, told me that, you know, look, if your robots really work and you can give me cost savings because it needs to cost less than human delivery for me, then I will use our service any day. And you know, that's how it is for them. That's how it is for us. You know, we have no demand problem, right? If we prove to them that it really works

and that we give them cost savings, they will use us in like, for like billions of deliveries. That's how it works. And that's the traction we are seeing on the market. And Skype was like that as well. You know, if you actually put out the product that exactly fits what people want, and it just works, it just works.

It doesn't have some sort of major downside, right? You know, then it just takes off like wildfire. Bronte, it's harder to do with the self-driving robot, right? Clearly much harder to do. You know, like we built Skype, you know, like we were like a team of like, how many engineers were there? Like, you know, 15 maybe, 15 engineers, nine months of work.

And we had a beta out there that everyone loved and just took off like wildfire, right? Sure, you can't do like a self-driving robot with like a team of 15 engineers in nine months, right? You know, it does takefire, right? Sure, you can't do like a self-driving robot with like a team of 15 engineers and line mods, right? It does take longer, right? But it's also harder for competitors, right? So we are, you know, I said, you know, we have done, you know, 8 million deliveries. I'm not sure, you know, our closest competitor, there are lots of competitors, tens of competitors. Our closest competitor probably has done 200,000 maybe or 300,000. Not sure.

Something like that, right? Like an order of magnitude difference. So we started this trend, let's say, 10 years ago, and we're still number one. Because whatever is hard for us, it's also hard for our competitors. I have one last question, then we'll let you get out of here. Why is Estonia so successful in producing technology entrepreneurs? Great question. I think I have a full answer. I don't know. But one thing out there is that Estonia was occupied by started, I was occupied by Soviet Union for like 50 years or so, right? And I was, you know, my age is such that I just turned 19 when we

regained independence from the occupation, right? So I spent my childhood in Soviet Union. But my adult life has been like in a free country, right? And, you know, turning 19 and finding yourself in a free country that actually doesn't have a lot of establishment built in. That means that you kind of grow up with an assumption that there are no obstacles. There are no obstacles for you. There are no big companies out there that you need to kind of compete with. You are just free to do whatever you want. Right. So that's the culture. I think, you know, overall, you know, successful startups can be built by any end, but it helps that if you don't know what's impossible, you don't know that it's impossible, you're going to have a better success than you think.

I completely agree. That's great. That's amazing. That's amazing. Thank you so much for joining the show. Congratulations on your first 8 million deliveries and looking forward to the 800 million yeah to have you back on then yeah next year let's hear it so much talk to you sirs bye before we bring in yeah well I will bring him in and I will let him give his introduction Daniel if you're in the studio welcome to the show good to see you it's been a Few days since we hung out still looking great. How you doing? What's the latest? You're fantastic. How are you doing? Well, well well Jordy's way Would you mind kicking it off with just a little bit of intro on yourself and and what you're working on?

Totally. Well one blessed to be in the capital of capital couldn't imagine a better place to be today Yes, I've been building various consumer tech stuff or a better part of the last decade Kind of most recently Attendees with the company I started many years ago sold that I think there was a quote from Shawshank Redemption of you better get building Are you better get busy dying? something like that if I remember correctly, but quote from Shawshank Redemption of you better get building or you better get busy dying, something like that, if I remember correctly.

Reconnected with the folks at Coco a year ago, Zach and Brad and the whole amazing team there. He was sitting there and realizing like I grew up in LA, kept seeing all these robots going all over the place in all these different cities and just figured I had to get involved. We're Coco, we're bringing sidewalk delivery robots to all the biggest cities and just figured I had to get involved. So, you know, we're Coco. We're bringing, uh, you know, sidewalk delivery robots to all the biggest cities, uh, and markets across the world. Uh, I've had a lot of exciting success there and, uh, yeah, it's a work. Can you compare and contrast your approach to Starship? We just talked to the founder of Starship, uh, but every time there's, there's like this race for a

new technology, uh, technology, it looks similar on the surface and then you dig in and you usually realize that the companies are taking very different approaches. How would you explain what Coco's doing differently? Yeah. So I think, you know, first off, in a huge respect to the Starship team, I actually think I ran into them at an investor's office like 10 years ago. Wow. I actually think I ran into them at an investor's office like 10 years ago Wow, I remember there was trying to company's here. I Think the biggest differences right are kind of where we operate right? I think I start your check tremendous success College campuses and kind of you know various other parts of other markets

But you know solving the complexity problem, right? Like there if you look at the delivery market, right? You've had kind of even if you think back five, 10 years ago, delivery costs were in order of magnitude lower, both on the backend and what consumers are paying. You have a fundamentally inflationary cost structure. All that problem of most of the delivery volume is in the big urban cities. I think we've really just drilled on our execution of handling the kind of complex situations there. There's a bunch of different regulatory hurdles, dealing with even distribution, right? We're kind of the only company that's partnered with Uber, DoorDash,

and a bunch of other partners that we're announcing soon. Being able to have that kind of broad-based reach, I think it's super important because you can actually get the volume, customers can use you in those cities, you don't have to go through a first-party app in a necessary way. So those are, I think, would be the biggest kind of on-the-surface differences.

What do you take away from the Waymo strategy? They were out in, was it Phoenix, Arizona, or they were out in Arizona for a while, I believe, in like the easiest mode for self-driving, like huge streets, no weather. And then their second market was like the hardest place to drive in the world, San Francisco, there's hills, there's random people on the street, there's bikes.

And I think like the telling that some people would give would be like, if you can solve San Francisco, you can solve kind of anything, maybe not Boston in the winter, but is that the story you tell or is there something else and and and what are you pulling from their strategy overall seeing what way most done? Yeah, I mean just on the commentary of kind of hardest driving. I would love to see way most in Riyadh, Saudi Arabia There is it is bananas to take car rides there Yeah, but what what I think is interesting is we've always compared it to the Waymo and

the Tesla strategy. The Waymo, because I think, yes, they operate in San Francisco, which is, you know, lived there for many years, not true to be able to drive them. But the cost structure of, you know, how much does that vehicle cost, right? The amortizing that capex against all the vehicles, right? If you have this really expensive Spencer suite, you have really like cost optimized vehicle. And it It's hard to, when you're reliant on a lot of these sensors and advanced computing, it makes it difficult to really get it to be substantially cheaper over time and to deploy a bunch of these. The question I've always asked is why doesn't Google's budget, why wouldn't you deploy a thousand of these, tens of thousands of these, right?

We've always been in the Tesla approach, right? If you can make kind of camera-based autonomy and kind of driving work, you can have a substantially simpler cost structure, right? You're able to, and with that simpler cost structure, you can deploy far more vehicles in far more places. And if you've seen the latest kind of Tesla self-driving, you know, full self-driving version,

it's an incredible driver, right? Yeah. And so I think that's the kind of biggest delta in the strategy that you'll see in kind of some of our competitors is like, and everyone on the team is incredibly ruthlessly cost-optimized of how do we get this additional, you know, three cents a mile, et cetera, right?

Yeah, yeah. So what does that mean practically Practically? Is that just, Hey, we're staying away from LIDAR because LIDAR is expensive? Or is it like, we got to build a gigafactory and just drive down the cost of mass manufacturing these like Tesla is kind of the story of they did both. But what other decisions have you made to drive that cost per mile down as low as possible? I think it's both. And there's a really interesting thing, right?

Everyone thinks of the comparable of like, well, it costs a human X dollars to do this and then with a robot, it's cheaper. But that's only one half of the equation. The delivery business is a logistics business. And it's all in that 98th, 99th percentile. If every single time you mess up an order, human or robot or otherwise, that is incredibly expensive to the merchant, which might have a food cost deducted, to the delivery operator who has to refund the order back to the consumer. Being able to be more reliable is the other half of the cost structure. I think what really impressed me when getting involved was the focus on reliability and kind of making that work.

And that, you know, obviously involves, you know, the robots were kind of human operated entirely for a long time. And as you kind of roll on autonomy, right? You're able to do that piecemeal while kind of maintaining that high quality service bar. I think that's like the one thing, you know, we know from a lot of our partners is like really exceeding

on kind of quality of service. So it's both cost, which we is really exceeding on quality of service. So it's both cost, which we nail, but then also quality of service as well. Do you guys have any projections on when you think autonomous delivery will be the default? There's all these new systems coming in, Cocoa, Zipline. We're going to have lots of solutions, whether you want to order something from Walmart

30 minutes away with Zipline, or you want to get a burrito from Chipotle. Have you seen Pipe Dream? Yeah, there's Pipe Dream. It's like, we're going to put it through the ground. The pipes in the ground. That's a fun one. Lots of ways that we're going to get stuff,

which is what Americans love. But at what point, what's your kind of internal pacing around when you think these systems can be so ubiquitous that when you use a delivery app, you just sort of assume that it's going to be coming through some type of like autonomous platform? I mean, I think it looks really lopsided, right? Like if you're on the west coast, like if you're in LA, like if you talk to people in Santa Monica, like this is their norm.

Like to a lot of people, they get predominantly robot to the market, right? If you look at other markets we're not in, you know, it's not. I think it's the same for self-driving cars. I mean, my answer is as fast as humanly possible. Like I think that's metered in years, if not sooner, but I think it's really market specific, right? Like, you know, if you're in the big cities, I think hopefully for us in the span of a year, maybe two, but I tend to be aggressive on that front, but I think it really depends on which markets

you're in as that kind of rolls out. But yeah, I think this proliferation of all these solutions is incredible. I think for rural environments to spend a lot of time in Wyoming, zip lines can be amazing. But especially in the urban environments, where there like there's a huge push right of like there's a real business problem For fraud of delivery providers like we need to solve this. I think that that makes a lot of sense Can you talk about anthropomorphic design? How do you make the robots friendly and seem like they're gonna be fighting alongside us when we're fighting the AGI terminators? Versus because I imagine if it goes poorly seem like they're gonna be fighting alongside us when we're fighting the AGI Terminators versus,

because I imagine if it goes poorly, I'm gonna want a Coco in the foxhole with me. It's a cute, I mean, it's a cute, even the name, like, you know, Starship, cool name, but very different than Coco. I think that's deliberate. What else are you thinking? Where does this go?

We were talking about maybe like, do you throw an LLM with a voice mode on it and you can just talk to it as it's driving past you, maybe ask it the weather, ask it the time or ask it for the news. Uh, where, where does this go longterm? So I think a few things, one, right? I think actions matter a lot more than words, right? What someone says to you versus how they behave towards you. And like, you know, we have this idea of this cone of courtesy, right? Um, and really being courteous to other,

sidewalk users, bicycle lanes, whatever the surface might be. And I think what's interesting is you've seen, I saw that at the kind of previous interview, there really is basically almost no incidences of vandalism or people interfering with the robots because there is this almost adoration. The name is very purposeful. And the second most popular dog name in the US, at least at the time, right?

And I think kind of thinking through it of like how something behaves towards you and ends up building the brand more than like what it talks to you. But then I think like there's always been this kind of sweet jovial culture at the company that really just flows out through to the robots. I think there's a lot more stuff you're going to be seeing soon in that vein. I think we've been really focused on let's get the economics and the operating model right, but there's a ton of really fun stuff coming there that you can't quite sure yet, but we will talk. Can you talk about your guys' partnership with OpenAI at all?

I don't know how much you can speak to it, but that was a cool announcement. What do you do with that? Yeah, what's up with this whole AI thing? I heard it was cool. I heard there was this model that came out yesterday that people were doing some cool stuff with. If you have not tried O3, it's amazing. But yeah, I mean, they're fantastic partners. I can't speak to too much about what we're doing with them, but it's very exciting.

And we'd love to talk more about it later, Dave. Yeah, it's a cool partnership because you're not immediately worried about them just building the same thing that you're doing. It's kind of like a bigger jump to go and say, OpenAI is going to start building delivery robot networks than somebody building a coding platform. Unfortunately, I got shot down at our weekly business review.

We should get into the VS Code 4 business, but then we got shot down, unfortunately. It's a good business. It's a great business, especially today. Yeah, it's fantastic. What else is on your mind broadly in venture right now? What are you seeing? I know you do quite a lot of investing historically. What else is on your mind broadly in venture right now? What are you seeing?

I know you do quite a lot of investing historically. What's been exciting? I was at this conference this weekend and I wanna share probably the funniest bit that I heard from that I was talking to a guy manages kind of tens of billions of dollars and we're talking about SPVs, he just goes, never say that word again.

It's a dirty word. Sounds bad. He's like, you should call it a co-investment vehicle. That's a great idea. And so I think we should try and promulgate co-investment vehicles over SPVs. It's better. It's like the scene from the social network.

Yeah. I think what's going on behind the scenes in the industry is really exciting, especially on the kind of delivery side. There's a couple announcements that I'll be back very short to talk about. Fantastic. Yeah. Very cool. When, what's the vibe in Jackson right now?

Ski season wrapping up or is, when even is it spring break? Is that? Right now it's, we've got mud season, which is, you know, all the snow melts and it turns a really delicious color of brown and muddy and gets all over everything. So I'm actually- But you're still out there, right?

Yeah, I'm in New York right now. You will see the seasonal migration of all the Jackson people. But it's a fantastic place. There's actually an article in the journal this morning about how tech bros are trying to dress up like like cowboys. I know they say suits. I was hoping for suits. This is terrible.

All the work I've put into this get nowhere. I always thought about wearing a denim. I mean, this is like Chris Sokka's dream, right? Everyone dresses like a cowboy. He's been doing that for 25 years. But I wonder if you have to find a new bit, right? Once everyone starts doing it, like, does that? Of course, yeah. You always have to do it. Bring suits to Jackson, all right? Yeah, yeah.

I would love for you guys to come visit and wear suits. We can record the looks that everyone gives. Yeah, yeah. People don't ski in suits enough, right? They don't. It's like, you know, you're you guys to come visit and wear suits. We can record the looks that everyone gives. Yeah. People don't ski in suits enough.

It's like skiing's a serious endeavor. You should stress the part. Yes, exactly. You guys should partner with Zennia to make a ski suit. And it's like a gore-tex ski suit. There we go. Made to measure.

I'd probably sell really well on Instagram. I think we got another business. Put together one of those co-investment vehicles for us, OK? Yeah. Yeah. I need at least 100 mil to get that off the ground with the tariffs.

Yeah, exactly. Actually, that's an interesting question. Speaking broadly, how have you seen the robotics industry kind of responding to some of these tariffs? I mean, I'm sure a lot of this stuff's made in America, but the supply chain, right? Yeah, but especially with instant delivery, it's really an economic equation, which is like,

is it reliable? And is it cheaper than human-based delivery? How do you think the industry is responding? Still shell shock or? Yeah, I mean, I can speak only internally, and I can kind of give you some of the things I've heard across the street, but internally, we have thousands of vehicles already kind of like

in the US built and we're kind of actively deploying more and more of those. So from our standpoint, it was kind of like, okay, like this doesn't actually disrupt us that much right now. But I think the speaking of broadly to the supply chain, right? You have a lot of the consumer electronic supply chain is primarily in Asia with not a whole ton of alternatives. And so I think it'll be really interesting to see as the administration kind of rolls out the kind of other branches of this policy, do

you start to see some carrots to kind of move that over? You know, a big thing that I think was discussed this weekend that was interesting was, you know, what happens if you just drop capital gains on kind of investing in kind of these key sectors of the economy that we want to bring manufacturing back to the U.S. on? I think, you know, don't have the US sovereign wealth fund to try and pick winners. I think getting to a little bit. Yeah, yeah, yeah. But is a great. Yeah, yeah. I was thinking about this for all the venture capital firms that have

been adventuring all over the Eastern Hemisphere. You give them a cap gains boost in American investing. You're going to see billions flow into national interest investing. They already eliminated capital gains in some form. Yeah. But that would be a cool policy. They didn't say how. Yeah.

They didn't say how. Awesome, David. Well, thank you for coming on. Thanks so much for helping out. I know you guys have some good news. That's it, thanks for having me. Coming down the pipeline. Yeah, we'll talk to you soon. Great to see you. Bye, thank you for coming on. Thanks so much for having me. I know you guys have some good news. That's good. Thanks for having me. Coming down the pipeline. Yeah, we'll talk to you soon.

Great to see you. Bye. See you guys. Cheers. Next up, we have Adam coming in from the Chamber of Progress talking about the Google lawsuit that just happened and the ad tech verdict. I think we'll be able to have him pop in and give us,

hopefully, some background. Adam, welcome to the show. How you doing? Oh. Good, sorry, I had to unmute myself. Can you hear me okay? No worries, yeah, yeah, you're all good. I'd love to start, I mean,

quick background on yourself would be great, but also just, can you take us through the very pre, the very early prehistory of this lawsuit? We'll build up to your analysis that you dropped today. Sure, sure. Well, thanks for having me guys. Yeah, good to me.

Loving the podcast. So I have been doing tech policy in DC for 20 years or so spent a dozen years at Google in their Washington office. And about four years ago started a group called Chamber of Progress, which is a center left tech industry policy group. And so I worked on a lot of these issues, I have a lot of familiarity. This case is interesting. So this was the second case that the Department of Justice filed against Google on antitrust

issues. And the topic was kind of a niche one, which is really, which is ad tech, the ad tech industry. And it really was alleging that Google had improperly linked the different parts of its ad tech business together in a way that had given it a monopolistic position. And the case moved relatively quickly. It moved for what's called the rocket docket, this court in Virginia that goes generally pretty fast.

And what does fast actually look like? When did it kick off? And obviously they got to it. So this one was filed by the Biden administration. The other Google case, which had to do with Google search distribution deals, was actually filed by the Trump administration. So this one, I think, took maybe a year

from the time it was filed to the time it actually went to trial. So that's like relatively speedy. And they had, there's a whole parade of people from the ad tech industry who testified as witnesses in this case, as well as like advertisers and publishers and kind of people from that world. And then, but the trial ended in I think in December

and then they just came out the verdict today. There were some points for Google, but it was mostly a loss for them. The court found that they had improperly tied some of their ad tech products together and they have a monopoly position in what's called the ad exchange as well as the ad server, which is the tool that publishers use. Can you break down? Yeah, can we kind of like go through a little bit more of your analysis? I'm curious to get kind of, really your,

I'd like to honestly hear your personal opinion on it. I don't know how much you can comment specifically, but do you think this was the right outcome? I know there was advertisers that use the platform that were testifying saying, look, we tried to use a lot of other alternatives and they just delivered inferior results. But what's your read on it? Okay. So I think the first thing you have to say is you have to back out and look at this industry,

the ad tech industry, because it's sort of like famously complex. There's this famous chart called the Loom escape that shows all of the players in ad tech. And, and so on the one hand, you could say, okay, well, there's a lot of players, that's great. But on the other hand, one of the things that advertisers and publishers, you know, has have said over the years, it's like it's a little too complex, right? And what an advertiser cares about

is basically like finding the customer who's most interested in their ad. What the publisher wants is basically the best return on their ad space, right? And so the way that this industry evolved was frankly a little bit contorted, but Google stitched together several products that basically ideally gave the publisher

the ad that performed the best and ideally put the ad for the advertiser in front of the person likely most interested in it. Now, other players in the ad tech industry complained. Basically they said that Google made it too hard to interoperate with different parts of its ad tech stack, like the ad exchange or the publisher ad server. That was the heart of the case, that essentially that Google hadn't provided enough interoperability

between these different parts of the ad tech stack. That was the key question. In antitrust law, there's this kind of doctrine of tying, right, which is basically do you force people to take one product because they really want this other product, right? And that's like the heart of the case. And the judge today found that Google had and properly tied its ad tech products together, specifically the ad exchange, which is sort of the matching piece of the puzzle with the ad server, which is sort of the matching piece of the puzzle with the ad server, which is the tool that publishers use.

And so I think that like, we don't know, there'll be a second phase of this trial, which will look at the remedies. Like what happens now? What has to change in Google's business? That'll happen later this year. But to me, the big kind of strange thing about this case, I will say is that like that if you look at this

part of Google's business, this is part of what's called their network business, which is basically like serving ads on other people's websites. This is the part of Google's business that's actually shrinking. So it was like 16% of their business five years ago, and now it's down to like 11%. And you sort of say like, okay, why? Well, what's happened is that that business of placing ads across the internet has just declined because people are-

Well, is it because of Google's product? They're doing AI summaries in some ways. Like I don't need to do that. And people are on YouTube and social networks, right? And one of the things is like, there's so much less purchasing activity being driven by these ads, because the targeting is worse.

And you're there on a website usually to get information or to do something, not to just passively scroll. You're nailing all the reasons, which is basically like this market that any interest case, you have to define what market you're talking about here, right, and here, really they were talking about, I think it was called like the open, the open internet advertising market, right,

but like that's shrinking, right, because people are spending more time on, within ecosystems, right, within Google, within Meta services, within Amazon, right, and those are actually increasing their share of digital advertising. So, you know, one of the critiques I think of antitrust, sometimes you hear from people is like it moves too slow or it's like fighting yesterday's battle.

And we saw that earlier with the FTC lawsuit and meta about Instagram and acquisition that happened a decade ago. Totally. I mean, it's probably very funny because these things are all happening. This is like high season for antitrust right now in DC where I live. Because the FTC trial is going on downtown. Next week, the remedies phase of the other Google case starts. And then this one comes down. So it's high season for this stuff. Yeah, with Google specifically, how does this play out? What is the remedy?

It clearly matters to the businesses that feel and the judge says have been wronged by Google's actions, but for the average consumer, I don't even know if it... I don't see this hitting even headlines in the same way that obviously Meta's Instagram issue has. That's totally right. This has always been a very kind of in the weeds, more obscure case. And one of the things that is kind of interesting is that like, there's no doubt,

like this is a loss for Google. It's probably a win for Google's competitors in ad tech. The big question mark in my mind is like, is it good or is it bad for advertisers and publishers? Because I think on the one hand, advertisers and publishers say, some of them say like, we feel a little bit beholden to Google

and we don't like that. On the other hand, like, and this came out of trial, advertisers say like their performance, placing ads in Google is really good. Google's putting their ads in front of people who need it, they're getting good clicks, publishers are getting good revenue.

And it could be that in breaking apart like this system that's working well for advertisers and publishers, that they end up kind of regretting, you know, this whole thing, right? So I'm interested to see whether that happens. But you're right, they're like, the next phase is gonna be a remedies trial.

And what happens? I mean, it kinda depends on how aggressively the government wants to pursue remedies against Google, right? Because you can sort of see, and the judge said today basically like, you have to submit initial proposals to her within like the next week.

So this is gonna come pretty fast. And so the most aggressive is like Google's ad tech business is broken up, right? So she says Google has to sell maybe it's ad exchange business or it's ad server business. The public part that works for publishers. That's would be the probably the most aggressive. The less aggressive to be clear for the audience.

That's not like AdSense that has nothing to do with with. aggressive. The less aggressive work on that would be. And to be clear for the audience, that's not like AdSense that has nothing to do with Google. That's not AdSense. AdWords, it doesn't have anything to do with like, they might, is it possible that Google could say like, cool, we're, you know, yeah, it's not going to like materially damage the business one way or another, so it's maybe a little carrot that they give, or is that even not the right way to think about it?

Well, in fact, there was some reporting before this trial started that Google had supposedly tried to engage the Justice Department in settlement talks. Right? And so you could have imagined, OK, maybe they would have gone for something there. Um, I don't know. I think we'll see what happens, but you're absolutely right. It's not, it's not AdWords, not AdSenses. Um, uh, this is their publisher side tool and the ad exchange, which most people do not know about most, most even, you know, it's, it's really like publishers and advertisers

know this. The less aggressive remedy I think would be something like, okay, you can continue to operate these services, but we're going to mandate like maximum interoperability. Basically like every part of your ad tech stack has to interoperate with other services basically. And so that'd be like the less aggressive version. We'll see. We'll see which one prevails.

Is the consumer harm standard just like completely out the window now? Did Lena con just like completely wipe that? Because I understand that if I'm a, if I'm a rival advertising platform, I'm upset about this, but if you're a consumer, there's maybe hard to prove harm. And even if you're an advertiser, you're probably like, Hey, as long as the ad rates are good and I'm getting good ROI, I'm happy. So how did this come together? And are we just completely past the consumer harm standard at this point? I

Fear that we're kind of beyond it I think in what in this case the consumers were the advertisers and the publishers though Like there was never really any serious allegation that like this had it and it just had an effect on the end consumer sure the judge's decision like she she Her argument her ruling was that Google's link between these products was unfair to Google's advertiser and publisher customers. And so I think in her way, she was applying the consumer welfare standard.

But whether that, you know, Google's gonna appeal the case, right? That'll definitely happen. And one of the big cases that's a challenge for the court here is this case called Trinko, which is old, old Supreme Court precedent, which basically has to do with what's called the duty to deal, which basically says, do you as a business, even like a dominant business, have an obligation to help your rivals? And in her ruling today, she did what I would call a creative interpretation to kind of get around that.

That is the biggest question about whether this ruling survives appeal and even up to the Supreme Court because the creativity, you call it, of her ruling may not survive appeal, we'll see. Yeah. Do you think that there's a just zooming out like a shift in the government perception around just big businesses even if they're they maybe are monopolies but they're not causing consumer harm. We saw as Lena Khan taking a shot at Amazon like they're clearly

dominant but is their consumer harm debatable but it's still let's put the screws to them. dominant, but is their consumer harm debatable? It's still, let's put the screws to them. And JD Vance kind of said the same thing with Google. He said, yeah, that's a big company, maybe too big. Maybe we'll keep some of that pressure on them, even though it doesn't necessarily fit the previous definition of the monopoly test. Just market concentration is enough to merit a response

from the government. And how do you think the perception around that shifts? And, uh, do you have a particular take on, on just like the idea of big companies that are dominant? Well, so it's just very interesting. So like when I worked at Google, one of the things I really admire this, cause I don't think it's necessarily true today. Like my boss said, look, we're a big company. We have a lot of power. We're very influential. Like,

let's not try to, you know, big company. We have a lot of power. We're very influential. Like, let's not try to fool anybody, right? I agree with that. Like, big companies should absolutely be more scrutinized, be held to a higher standard. Like, absolutely, that's true. But what happened with these federal antitrust cases, so now every big tech company has an antitrust case pending against it from the federal government. Apple, Google, Meta, Amazon. What happened was about six years ago, the FTC and the Justice Department, they share responsibility for antitrust. They got together and they said, they basically struck a deal and they said, okay, FTC, you get Meta and Amazon and DOJ, you get Google and Apple. They split up the companies based on the target, not the subject matter.

I think just human psychology, once you've done that, you're going to bring a case. I think what happened in those cases was they had the target in mind and then they worked to find a case they could bring. And so I think that's why these cases have varying degrees of strength to them because they started with the target in mind and then they figure out the case rather than looking holistically in industry and seeing if there's a problem. So I don't think that was the most principled way of going about that. But I think that that's what happened. Now, one of the things that is very interesting is that like, okay, Trump crowd, like the thing they actually care more about, most about is censorship and speech, right?

So it's really kind of strange, bizarre. I think today, Pam Bondi, the attorney general, she did a statement about this ruling. And she said, she made some reference in there about how this is great because, you know, we're cracking down on Google because they've censored, you know Conservative speech like the case has nothing to do with that. What's it is tip for tip? Well, I just think I just think like this wasn't the this wasn't the Trump crowds case

Yeah, right, but they but I don't think the Trump crowd kick from Trump crowd really cares about Google yeah, I mean looking at other motivations. Is there a world where you know the Trump crowd really cares about Google's ad-tip business. Looking at other motivations, is there a world where, you know, the current administration seems very fixated on increasing revenues and decreasing costs, and is there a world where, if you can just go around and get, I think they were asking Meta for six billion to settle that case, is there a way that it's just like,

more like 30 billion. Wait, it was 30 billion. Oh yeah, 30 billion. It was 30 billion. Yeah. Is there a way that it's just like, more like 30 billion. Oh yeah, 30 billion. 30 billion. 30 billion. Is there a world where it's like, hey, we're just gonna give out some parking tickets to try and raise some revenue? Is that like a rational thought experiment?

Yeah, to me the fact they were willing to settle up for 30 billion kind of shows that they didn't really care about the case they brought in the first place. Right, because it was like, hey, we'll make it go in. It's just like putting a price tag on it, right? Yeah, yeah. Wait, yeah, let's pivot to the meta case brought in the first place. Because I was like, all right, we'll make it go in. It's just like putting a price tag on it. Right? Yeah. Wait, yeah, let's pivot to the meta case

because you were sharing about that yesterday. You had said that the $30 billion settlement offer seven times the FTC's annual budget, so outlandish that the point would be humiliation, not restitution. How do you think the trial went yesterday for Zuckerberg? John was sharing that he looked absolutely fantastic in a suit. He looked great. It's unfortunate that any time you see a tech CEO in a suit,

they're in trouble. They're being punished. But what's your read on the whole situation? And I'm curious, did you think that the original $450 million offer was a good starting offer for Zuck? And maybe they could have found some middle ground between $450 and $300 billion, because he was being kind of like run through the mud for even

offering $450 million. But he's a businessman. I imagine he expected them to counter and kind of like run through the mud for even offering $450 million, but he's a businessman. I imagine he expected them to counter and like kind of meet in the middle or something like that. But what's your take? Yeah, I mean, so you're absolutely right. Can't blame him for trying. Like look, if the worst case, they lose the case.

They're forced to spin off Instagram and WhatsApp. Like if you could avoid that outcome, every CEO would try to avoid that outcome right through a settlement So don't be grudging that but if he was but if he was truly worried about whatsapp and Instagram being spun off Wouldn't he have come in and said yeah? We'll pay like ten billion dollars because I really don't want that to happen. Yeah, that's a good point Um, I don't know I mean the reality is, I think what they have to balance that against,

how confident are they in their own case? And frankly, I think the FTC has a really tough case there. Yeah, that's what I'm saying. This was a dozen years ago, right? Yeah, no, I was saying specifically, they have to feel pretty confident in their case if there wasn't a middle number that they were really wanting to anchor.

Just for reference, Meta has $77 billion in cash in short-term investments. That's what I'm saying. And they're willing to spend. Give us half. Yeah, yeah. They're willing to say no. And they're willing to say, we're

going to spend $80 billion a year on CapEx. And the Metaverse is gonna be so Jarn D expense. Yeah. Yeah, I have to imagine by the way, like I just because it didn't get settled now doesn't mean it won't get subtle later Yeah, that's true. Yeah, and you know, sometimes that depends on how the trial goes. Yeah, right And so and frankly like if the FTC like at the end of this trial feels like they might lose like maybe they're maybe they'll They'd accept a lower number like if the FTC like at the end of this trial feels like they might lose, like maybe they'd accept a lower number. So you kind of never know how that's going to play out. But yeah, I think like the challenge for the FTC, like they have two problems. One is they have to

say essentially that Facebook, the meta doesn't compete with TikTok, right? And X, like that's a problem for them. But the other is that they have to prove monopolization basically that like, that if Meta hadn't acquired Instagram or WhatsApp, they would have gone on to like challenge them and be great competitors. Like they were really, these were really small companies at the time they were acquired, right? And credit where it's due.

I mean, Meta did a great job of integrating those companies, making them successful. I'm sure you guys have seen plenty of failed acquisitions where it's like it just doesn't work. It's really hard to successfully integrate a company and legitimately one plus one equals three. Yeah, and one interesting data point. So when Instagram was acquired, they had 300 million users. And BeReal, which was the last breakout consumer mobile app, has 40 million users.

And I'm going to go out on a limb and say that it's probably not worth anywhere close to a billion, right? Even for someone like Meta, who has a consistent playbook of integrating that kind of business into the platform. Well, they also like Meta knows, they're in this business where you have the most fickle customers ever. No young person is on the Facebook app.

And then very few really young people run Instagram. Right? So like social networking is a very like kind of like generational thing, right? And so it's very hard to like maintain kind of the zeitgeist in their business for like multiple generations. I think that's like a structural challenge for them. So anyway, so I think FTC has an uphill battle with that case.

Do you think these are the wrong problems to be working on generally as the entire internet is about to be steamrolled and the economy is about to be steamrolled by AI? Do you think it's a big distraction to just be arguing over acquisitions that happened more than a decade ago when it feels like we have this revolution in many ways that has already started? Yeah, I think so. I think a lot is very popular for politicians to say things like, we got to beat China in AI. Well, who do you think is going to do that? It's going to be Google, Meta, OpenAI, right? So, it's gonna be those companies, right? Arguably, a Meta without an Instagram

is a much weaker product. They can't invest as much in CapEx. They can't invest as much as in Llama. Like, maybe Llama 3 doesn't get built because they're making half as much cash flow or something. There's a bunch of interesting ways where you get a piece dividend from the market concentration. That's the question about monopolies.

If there's no consumer harm, product's free, and it's really good, and their whole North Star is like, let's please the customer, like Bezos always says, customer comes first, all that. But then you also get these crazy dividends when they go and build cool stuff out there. It's kind of an awesome system, even though it makes it hard to compete with them,

but I don't know, what's your take? Well, I just think, I guess the way I come to it, it's like, I tend to think of like all of the big companies like intensely paranoid about each other. Sure. And like, they're always getting into each other's spaces too, right? Oh yeah, totally.

And so like, to me, like that, that part of competition is sometimes overlooked in the way I'm like, yeah, you like, these guys are like at each other's throats. Yeah, yeah, yeah. And that's good, like ultimately, because then that competition is leading to them to have them to add features

and like good for product innovation. Yeah, yeah, I mean, every single big tech company overlaps with another one in one way or another, whether it's Amazon overlapping in ads now, you know, Bing has a search engine, Google has a phone, like everyone's in everyone's spaces constantly Yeah, and it's inevitable. I guess great. Yeah, I guess wonderful, you know, well, well, it's been great chatting with you This is fantastic. We'll have to have you on the next time that there's a big FTC case or big

Yeah, just just fantastic DM us when you think there's a story Yeah, you're excited about talking about and you can be one of our Correspondents. Yeah, congressional correspondent. All right. This is fantastic. We'll talk to you later. Awesome, Greg. Great to meet you. Talk soon. Cheers. Well, we should close out

by talking about another acquisition. OpenAI is in talks to buy Windsor for $3 billion. What do you think? Future Instagram? OpenAI and Windsor declined to comment. Future Instagram situation? Or maybe not? Look, this situation takes me back to talking to Sarah Guo. And she said, look at what the foundation model

companies care about. And one of the things she talked about was coding. It was just, she said, if you look at all their actions, everyone besides Grok seems to be very, and just XAI broadly seems to be very oriented around code generation. And so I don't think this should be surprising. There was also some reporting that OpenAI had allegedly

tried to buy Cursor on a couple different occasions. And then in that time, Windsurf just kind of took off, really grew revenue quickly. And yeah, if this deal gets done, I think it makes a lot of sense. There was people pushing back and saying, OK, how does a $300 billion company not know how to build an IDE? There was a good post about that.

My take on it was like, my take on it was just like, it's probably a timing thing I'm sure that opening I could build a fantastic ID if they wanted to build it from the ground up organization so fast and they're becoming a product company people think about opening eyes like oh it's this like ten-year-old company sometimes but it's like no they're seeing insane growth they want toover up talent and people that are good at designing products and just integrate more and more into the system

they're building. It makes a ton of sense. And I also think there's something that very real is happening, which is the underlying models are starting to not perform as well in places like Cursor and Windsurf. And it's possible that's an accident of the way the models are evolving.

But it's possible that verticalizing is what makes sense over time. And I think that they've done a good job of, OpenAI has done a good job of filling that gap of the empty text box that you start to prompt, like Google search. The first chat GPT app was like a direct Google competitor in many ways.

You've talked about the knowledge engine. But there are clearly going to be several layers where the LLM will be vended in. And coding is a distinct one from the Google search box. And so you've got to be in the ID. You've got to be in the Google search box. You've got to be in a few other places, like in your camera role, essentially,

is where you ultimately want to be for image manipulation, image generation. Of course, a lot of that will happen in the ChatGPT app and in those chat workflows. But let's go to Dylan Patel, because he broke it down a little bit about why he thinks OpenAI is buying Windsurf. What's the strategy behind the revival of Codex? Cursor and Anthropic had a mutually beneficial relationship,

but labs realized that controlling the main application of a model is as valuable as owning the model itself. With this acquisition, OpenAI gains greater ecosystem control and can build better products. Anthropic's Clawed code was very well received. Keen on not missing out, OpenAI released Codex CLI,

which is strikingly similar as a product. Both of these products have terminal level access and code editing capabilities. The competition goes beyond just products. OpenAI opened up free access to the plus tier for university students just one day after Anthropic announced their education initiative in early April.

Fast follow up. So the game is on. There's not a single multi-billion dollar AGI market. initiative in early April. Fast follow-up. So the game is on. There's not a single multi-billion dollar AGI market. There are probably many pockets of value that will be discovered. And the interesting thing here is that I think it's a narrative violation.

It was actually fine, potentially, to build a wrapper. In many ways, these companies were derided early on when they launched as, oh, it's just wrapper. You're going to get Eden. This is going to get one-shotted by the foundation models. Well, it seems like there at least is a way out via an acquisition.

These companies are valuable. We've seen the ARRs grow. And then also, I think it's interesting that there are, you can probably think of a power law distribution around value creation at the application layer with the blank box in chat GPT. Like just go and talk to the LLM. That's probably like the most dominant.

That's the Google, right? But then Windsurf, Cursor, Devon, these are all super valuable in that category. But then there's probably a really long tail and there's probably some value in the application layer deep down. So I think it's another maybe bull case for, for, um, for rappers, depending on how you're structuring the business, like you probably are not going to disrupt open AI with a rapper, but you

could build a very, very great business. Yeah. And for Windsurf, I mean, uh, I'm sure they in many ways would have loved to just keep building and building and building and building compounding, but, um, they also, uh, I'm sure we're very aware of the competitive dynamics. And this is one of those things, right? When you talk to the founder of Captions earlier, right? Fantastic app that you're using all the time.

How far away are we from you being able to upload a video to ChatGPT and just say, like, add some titles to this. It's possible, yeah. You're already a pro subscriber, right? And you're like, okay, I have this. But at the same time with the cursor analogy, like it's possible that there are more features

and you just stay ahead long enough to lock in that customer as like, well, I like their UI, I'm familiar with that. Like this is the same thing with like, DaVinci Resolve is free in many cases. And people don't switch because the buttons are in a certain place and the certain features that are nice. I would just say, like, people were, I even saw Daniel, who we had on the show,

talking about how, yeah, obviously, value accumulates to the app layer. But I don't, you know, I still think we're going to see this back and forth battle where, oh, values are cumulating to the app later. But OpenAI has an app. Models are everything apps. You can ask it to do something absurd.

You can ask it to now go do the book you a flight, make me a video, write some code for me. They are a new form of everything. Sure, sure, sure. And I think that big companies, even if you have a lot of traction today, you need to look at how fast they're evolving. There's a funny post by Bern Hobart here.

03 is a quality improvement, but at least on financial topics, it's definitely the frattiest model. Returns don't increase or rise, they get juiced, and retaliatory tariffs are described as China blasted hogs and soybeans. This is great. This is my only real complaint about frat GPT

is that it hyphenates too much. But other than that, it almost perfectly captures the style. So funny. Blasted hogs and soybeans. I love it, I love it. Well, we gotta tell you about public.com investing for those who take it seriously, multi-asset investing, industry-leading yields, trusted by millions.

So get in on the action at public.com. What else? I mean, Dan Schipper, he kind of had the most viral review of 03. He says it's absolutely amazing. It's already his go-to model, fast, agentic, extremely smart and has great vibes. Some of his top use cases, these are things

you can kind of steal from him and adapt into your own workflows. It flagged every single time I sidestepped conflict in my meeting transcripts. It spun up bite-sized ML course that pings me about every morning. It found a stroller brand from one blurry photo. That's cool. It coded a new custom AI benchmark and record time. It x-rayed an

Annie Dillard classic and found writing tricks I'd never noticed before. It even analyzed every's org chart to tell me what we'd be good at shipping and what our weaknesses are. So he's having a lot of fun with it. Anything else here? Oh, A24. Music. Yeah, they launched a music label. That's really exciting. And they're going, they're getting venture backed, right?

Yeah. Didn't they take some money? From Thrive. From Thrive, very cool. And then, gosh, I feel bad for blanking on his name, the guy who was at Adobe. Oh yeah, Scott Belsky. Belsky. Yeah, he went over there.

Belsky's over there. Incredible organization. I mean, people have been so bearish, he went over there. Belsky's over there. Incredible organization. I mean, people have been so bearish on Hollywood. And the idea that you could build a new studio in a special way is just fascinating to me. And they've been able to do it really well. All the A24 films have been fantastic. It's taste.

It's taste. And it's clearly such an interesting differentiation. And now they're getting to music. I'm sure they'll be publishing a bunch. Who knows? It'd be cool if Belsky was involved with this. I wonder if there's an AI angle to music. I'm sure they'll be publishing a bunch. Who knows? It'd be cool if Belsky was involved with this. I wonder if there's an AI angle. Yeah, I don't know.

It would be kind of silly to launch a new record label. That does not embrace the AI era. That's not embracing that. Yeah. Oh, deal CEO. We've got to talk about this. We've done two episodes on the deal rippling drama. But Matt Levine says, has anyone booked a demo with Deal recently

just to see what lines their salespeople have been fed re the situation? It's a hilarious manifestation of natural versus corporate personhood that the entire exec team are wanted fugitives, but the rest of the company just keeps chugging. And that's like, yeah, yeah, this is something that's probably missed.

So the Deal CEO has been, they've been trying to subpoena him, and he's maybe in Dubai, and it's very controversial about whether or not he'll stay at the company, because there's all these allegations. Not much proved yet, but the, I mean, the signed affidavit was pretty crazy. The spy turned on them.

The spy turned on them, it's not looking good. But what does that actually mean for the company? Like, the crazy thing is like, even after all the Zenefits drama, and Parker stepped down, like, Zenefits didn't do well, but it did continue as a company for a long time. People don't like ripping out their HRAS systems ever. It sucks.

I mean, I think the fact of the matter is I imagine Rippling has an extremely strong sense of who uses Deal. Yeah, for sure. Because I've talked to everyone. There's a lot of companies in the world, but there's not a lot of like, you know, there are a lot of high value enterprise targets.

But I doubt there's many at this point that Rippling hasn't had like some coms with that have confirmed like, OK, they're using Deal. And so taking the line right now to basically have your SDRs, BDRs, you know, sales leaders reaching out to these people that you've had a point of contact with and said, hey, I know you're running on deal. The years, we should consider having you guys switch over

and then just sharing a headline that's fair game. Yeah, it is crazy that they haven't responded even, or at least that we've seen. Yeah, I expected them all to step down purely because it's probably in the long-term best interest of the company. Yeah, I thought so too. It'd be interesting to see what's the actual board structure

because they've obviously raised a lot of money. They probably don't own more than 50% of the shares, but they might have super voting or something or board control. Who knows? But even then. But still, if. Yeah, just in your self-interest of preserving the financial capital, if all the pressure's on you, get out.

It's not like you're necessarily going to lose all the value there. You could very easily maintain some of that if the company survives. Yeah, again, the other thing is thinking about the example I think you gave early on, which was if somebody comes to you and they go, John, you're using Michelin tires. Did you know that Michelin was spying on Bridgestone?

Are you really going to use those tires? I'd be like, that sounds like a hassle to change tires. And you're like, OK, you seem way too interested in the tire market. I'm going to keep driving my car. Thank you. And so it's very possible that, who knows? Maybe it doesn't have as much of an impact.

But I'm sure it's going to have an impact from a recruiting standpoint, which will have an impact long term. Well, I want to close out with two more posts. Congratulations to Raoul from Julius. He announced collaboration. He was talking about this figma for data analytics, he also put out a cool photo of him teaching data analysis at HBS He's been fantastic. It was great. I love watching the videos he puts out

He always looks like he's about to smile. Yeah, he doesn't. But I think he's just smiling inside because he knows he's cracked. And building a great product. And so, I mean, this makes so much sense. You build an IPython notebook or you do some sort of data analysis. You want to share it with all of your team members. You want all of your team members to be able to edit

on the same file and the same analysis. And this was interesting. John Conkle called out that, we posted back on February 4 of this year, Masa dropped his crystal ball while pitching the SoftBank OpenAI partnership with Sam in Tokyo last week, sending many analysts into a panic. Has he lost his vision? Was this an omen?

Only time will tell. And that was basically the top. John actually commented back and said, time has told hypothetical performance of a tactical short selling strategy triggered by the very impressive Stargate presentation and the crystal ball drop. There you go.

Well, we should close out with some news that will be very important for all of our listeners. Gulfstream has announced the G800 certification today. This is rocking the group chats. Yes, everyone was talking about this. So 8200 nautical miles at Mach 8.5, 7000 nautical miles at Mach 0.9, max speed increased to Mach 0.935,

all in the same body as the G650ER, but faster and longer range. I'm sure a lot of you folks who are listening are gonna be upgrading. So call your Gulfstream rep today because these are gonna be flying off the shelves. Any other advice? Yeah, I mean, you're gonna wanna get ahead of this.

This thing looks fantastic. It really does. By the time you get the jet and then outfit it, you're, you know, it's gonna be a little while, but it'll be worth the wait. Yeah, it's a lot of money, but it's a lot of jet. And again, you can sleep in a G800, but you can't fly a house. That's right, John.

It's going to be a few more years until Astra Mechanica can get us the Gulfstream equivalent of a supersonic jet. Yeah, that's a good way to justify this. You're just holding yourself over for the Astromechanica, the boom, the Hermes, one of those guys. But in the meantime, pick up a couple of these, rotate them out every few years, and just

use this to get around. Anyway, that's our show. Thanks so much for watching. Thank you, folks. Hey, this was a much more stable show. Yeah, no cyber attacks today. No cyber attacks. This was great. Thank you to the brave watching. Thank you folks. Hey, this was a much more stable show. Yeah, no cyber attacks today. No cyber attacks. Thank you to the brave soldiers.

Production team. And cyber security experts who kept us running. We'll see you tomorrow. See you tomorrow. Thank you.